Transcript, Hearing November 27, 2018
Location: Gatineau, Quebec
Date: November 27, 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 Tuesday, November 27th, 2018 at 9:02 a.m.
1637 THE SECRETARY: …please. Mr. Chairman, we will now proceed with item five on the agenda, which is an application by Bell Media Inc. for a broadcasting licence to operate a national multi-ethnic, multi-cultural discretionary service to be known as OurTV.
1638 Please introduce yourselves first for the record. You have 20 minutes.
PRESENTATION / PRÉSENTATION
1639 MR. STRATI: Bonjour, good morning, Mr. Chair, Madams Vice-Chairs and members of the Commission staff. My name is Alain Strati and I am Assistant General Counsel, Regulatory Affairs at Bell Media.
1640 It’s a pleasure to be here with you today to discuss OTV, our application for a national multilingual discretionary service.
1641 Before we do so, let me first introduce you to the other members of our team. To my right is Mariane Araleh, Executive Director of The Canadian Conversation and John Poutanen, Director, Finance.
1642 To my left is Wendy Freeman, President of CTV News and Jonathan Kay, Senior Director, Production at CTV News.
1643 Behind me, again to my right, Stephen Armstrong from Armstrong Consulting; Lenore Gibson, Senior Legal Counsel and Nik Nanos, Chair of Nanos Research.
1644 Le recensement de 2016 a mis en lumière un étonnant changement démographique au sein de la société canadienne. Le Canada compte maintenant sur un nombre important de très grandes communautés ethniques établies dans les villes comme dans les régions dans l’ensemble du pays, de même que sur un nombre croissant de petites communautés élargissant encore la variété et la diversité des groupes ethniques que l’on retrouve au pays, ainsi que le nombre de langues parlées.
1645 Le Conseil a reconnu l’existence d’un besoin exceptionnel pour un service national multilingue et a entamé la présente procédure d’attribution de licence en vue de combler cette lacune.
1646 Nous sommes d’avis que notre demande visant OTV répond le mieux aux critères du Conseil en ce qui concerne la distribution obligatoire de notre service aux abonnés de service numérique de base canadien.
1647 And we believe it should be approved for the following three reasons:
1648 Number one; our application provides both exceptional commitments to Canadian ethnic programming and exceptional contributions to Canadian expression and cultural reflection. Demand for ethnic programming has guided every aspect of our application, from 60-minute newscasts to prime time current affairs programs to the establishment of a much-needed programming fund to financially support community producers.
1649 Number 2; our application will have the most significant impact on Canadian news and information programming.
1650 Supported by the resources and expertise of CTV News, OTV will be more efficient in terms of news-gathering and more proficient in terms of fulfilling its core service mandate.
1651 Number 3; our application provides the best opportunity for stability and reliability. We have the experience to implement our vision for OTV, and successfully operate such an important new service.
1653 MS. FREEMAN: Many Canadians can get third-language news content from sources available in Canada. What they cannot access in their language, is Canadian news content made for Canadians.
1654 At OTV, we want to change that. We recognize the importance of news programming to the social and democratic life of Canadians.
1655 Our application will make news content accessible to more Canadians. Plus, we will expand the diversity of Canadian perspectives in that news programming, ensuring the specific concerns from these diverse perspectives are reflected and represented within it.
1656 News organizations are built from the ground up. It always starts with boots on the ground and OTV News will be no different.
1657 Our plan provides for a total of 53 multi-skilled journalists, establishing news-gathering resources in communities across Canada, a parliamentary news bureau in Ottawa, and international correspondents in strategic locations around the globe, in places like Beijing, New Delhi, Mexico City and the Middle East.
1658 OTV will produce six newscasts each in a different language: Arabic, Cantonese, Mandarin, Punjabi, Spanish and Tagalog.
1659 For many of these communities, this will be the first time Canadian news has been produced in their language and the first time the news content itself will reflect the specific concerns of their community.
1660 Our newscast format will be 60 minutes, providing ample time for analysis, discussion, and long-form investigative stories, as well as news of the day.
1661 Our plan is to produce the six newscasts in three regional centres: Toronto, Vancouver and Montreal. Headquarters in physically diverse locations will intensify the local and regional focus of our news organization and encourage the reflection and representation of diverse perspectives in our news content.
1662 We believe it is crucial for OTV to establish a specific forum for cross-cultural dialogue, presenting differing views on matters of public concern, while also promoting greater community awareness and understanding.
1663 That is why our application also features a flagship daily national current affairs program. Produced in English and French, it will provide a unique opportunity for Canadians to share their points of view.
1664 CTV News is Canada's news leader and is a trusted and respected source for news in Canada. We do not outsource news. We want to gather the news ourselves, and we operate more newsrooms, and produce more news content than anyone else.
1665 Our plan is to develop a dedicated organization committed to the production of original, first-run programming. Access to existing CTV raw video content will only serve to broaden the potential scale and scope of content available to OTV News.
1666 Dubbing cannot fulfill the demand for original news content and is inconsistent with OTV's core service mandate. Audiences know better. They can tell the difference.
1667 All of our newscasts consist of original news programming. That same foundational philosophy will apply to OTV News. Its audiences deserve nothing less.
1669 MR. KAY: OTV will benefit from the best of both worlds. It will have its own, dedicated journalists and newscast production teams and it will have direct access to the facilities, content, and expertise of CTV News and all of Bell Media's news services.
1670 OTV's newscasts can originate from existing studios. Its journalists can work from existing offices. And OTV can use existing resources for programming, operations and engineering.
1671 OTV can be included in sales pitches to major national advertising clients, and it can work with an industry-leading in-house promotions department.
1672 Yes, operating OTV News will require incremental expenses, but the extent of these costs will be lower than if OTV were to operate on a stand-alone basis. We want to minimize operations costs and administrative overhead to re-direct more money into Canadian production.
1673 That being said, we believe it's the news programming, teamwork and cooperation that make this application unique.
1674 On a daily basis, OTV will have access to raw video content from CTV News. CTV's Daily News Service (DNS) is a vast, up-to-the-minute resource of original Canadian news footage gathered by journalists who live and work in local communities across Canada, and at our domestic and international news bureaus.
1675 The ability to select material from DNS will provide OTV journalists with an important head start. Instead of beginning every day from scratch, OTV journalists will find useful, raw video content directly from DNS. They can then focus their own dedicated newsgathering resources on collecting the specific elements they need to tell stories from their communities and to produce high-quality, original Canadian news programming.
1676 CTV News has a highly decentralized editorial decision-making structure. Journalists in local communities produce their own local newscasts and they decide what stories to pursue and how to approach them. The same is true for our National newscast and our 24-hour news-based services. To keep all these decision-makers in touch with one another, CTV News has developed an Integrated Assignment Desk. Each news operation knows what the other is doing, and each one can make requests for content they may need for their own specific purposes. Each news group retains independent decision-making authority, but they all come together to discuss the strategic use of news-gathering resources.
1677 OTV will become a member of that Integrated Assignment Desk, but even more significantly, it will have a seat at the table. Access to CTV News won't simply be limited to rummaging through existing raw video footage. OTV instead will be there at the planning stages, able to use these content production resources by making requests for content specific to OTV News stories.
1678 The Integrated Assignment Desk also will provide OTV's journalists with greater scope and some additional opportunities. They can work on projects together with CTV News staff in local stations, in the National newsroom, and at W5, with its highly specialized experience in investigations and documentary-style storytelling. This all will all result in a better on‑air product at OTV and in new opportunities for its journalists too.
1679 For example, we have had cases where a local station journalist proposed a story for W5. That journalist then worked with the W5 team to develop the story further and ultimately produce it for broadcast. OTV journalists could work with W5 and develop documentary-style stories for OTV and even for W5 itself.
1680 OTV News will operate stand-alone, but it will do so on the shoulders of CTV News, establishing a unique structure for a better and more robust news operation.
1682 MS. ARALEH: Bell Media brought together more than 1,600 members from 20 community organizations for town hall meetings across the country. The objective was to use a thoughtful approach in earning the trust of communities by asking how we can deliver content and programming to their satisfaction. It was clear participants wanted greater dialogue, and a diversity of expression in OTV content. We found that there were four areas of concerns:
1683 First, the communities wanted to see more Canadian ethnic programming. OTV will provide 80‑hours per week of original, first-run programming, with significant commitments to Canadian content and third-language programming.
1684 Second, they highlighted the service gaps, as Canadian news had been eliminated or "farmed-out" to others. We are committed to original news production, in multiple languages, using our own team of news-gathering journalists.
1685 Third, communities wanted to have a say. They wanted to make sure their voice would continue to be heard. We are committed to establishing an advisory council that is both representative and culturally inclusive. OTV's council will be made of community organization leaders from different parts of the country, and will represent a diversity of perspectives, from communities large and small.
1686 Fourth, given that community issues and events are routinely covered by community producers, they wanted to be sure that they would be involved with the programming offered by our service. And they were particularly pleased to hear that our application also included a specific fund for these producers.
1687 These meetings are only the beginning of what will be a continuous consultative process with community members. A television service like OTV cannot reflect the needs and demands of the communities it is mandated to serve without also establishing a functional framework for community feedback.
1688 The framework consists of the Advisory Council, community producers and OTV's community liaison team. Working together, they will encourage community members to provide feedback, and will keep us in tune with topics resonating in the community. By its very nature, this feedback will occur spontaneously on a day‑to‑day basis, ensuring information can flow freely in both directions.
1690 MR. STRATI: We are committed to 100 percent ethnic programming, 70 percent Canadian content, and 70 percent third-language programming. We'll provide two channels, with more content, and greater access to Canadian ethnic programs. We will broadly serve communities, with ethnic programming for at least 20 different groups, in at least 20 different languages. We are committed to a Canadian programming expenditure requirement of 60 percent, projecting more than $110 million over five years, and funding for community news programs -- shows and programs of national interest totalling more than $17.5 million.
1691 OTV offrira des émissions à charactère ethnique très diversifié et assurera la couverture en direct spéciale d’évènement communautaire, de festival, d’élection et d’activités sportives, en plus d’offrir un contenu à charactère ethnique du monde entier.
1692 OTV offrira une expérience mutli-platorme, intégrant des composantes vidéo, audio et social afin d’offrir un contenu adapté de même qu’un accès personnalisé.
1693 Les journaux télévisés seront diffusés en ligne, en direct, en plus d’être téléchargé de sorte qu’ils puissent donner lieu sur un accès sur demande.
1694 Bell Media is one of Canada's prominent media companies. CTV is Canada's news leader. That will provide an enormous advantage and will provide crucial -- prove crucial in the development of a national multilingual service. We are new to multilingual programming, and our entry will strengthen this segment of the Canadian broadcasting system.
1695 Now is not the time from half-measures. OMNI has certainly had a rich history in Canadian multilingual programming, but significant structural and programming changes have been made, and the core service mandate has been altered. Community support has waned. The interim period with OMNI Regional has done little to change the situation. It is time to turn the page and consider another option.
1696 With OTV, we've proposed exceptional contributions to news and information programming and original Canadian content. Our proposal includes Canadian programming expenditure and exhibition commitments that far exceed those normally made by licensed discretionary services.
1697 We believe OTV can best fulfill the Commission's criteria for mandatory carriage and its objectives for the digital basic service. It is best positioned to address the exceptional need for a national multilingual service. As such, we respectfully submit that our application for OTV be approved.
1698 And we will conclude with a video highlighting our commitment to Canadian ethnic programing on OTV.
1699 (VIDEO PRESENTATION/PRÉSENTATION VIDÉO)
1700 MR ALAIN STRATI: Merci. Thank you for your time and attention. We’re now prepared to answer any questions you may have.
1701 THE CHAIRPERSON: Thank you. Thank you for your presentation. Commissioner Laizner has some questions for you.
1702 COMMISSIONER LAIZNER: Good morning.
1703 So I have a number of questions for you related to your programming, conditions of licence and some other matters, but I thought we might start with programming and the news format that you have indicated that you’re going to be doing.
1704 I noted that you said in your opening remarks that you would have 53 multi-skilled journalists.
1705 So are those new members of the Bell team working for OTV or are you using existing resources internationally amongst your journalists or locally amongst your journalists?
1706 MR ALAIN STRATI: These are entirely new journalists, these are OTV journalists, and if you want to...
1707 MS WENDY FREEMAN: These would be entirely new journalists that we would hire.
1708 COMMISIONNER LAIZNER: Okay, great.
1709 And then, and then, the idea is that they would go into the communities develop programming, newscasts, using your existing production facilities in the three (3) cities that you mentioned? Is that right?
1710 MR ALAIN STRATI: The three (3) cities are for the productions, so the actual production of the newscast, so the content. So if you will, the studio where you’ll see the newscast will be produced.
1711 The newsgathering will be across the country in different localities and different stations and different provinces.
1712 So the journalists are involved with the newsgathering, so essentially they will do and they do the same work, the same job that you will have any journalist in media doing, except they will focus on their communities, on that programming.
1713 Or, if you will, a different perspective or a context, which is unique and different to those communities, which may not be covered by other news organisations.
1714 COMMISIONER LAIZNER: Right.
1715 MR ALAIN STRATI: So the newsgathering infrastructure is local across multiple news across the country, the production centers are in three (3) sections where they’re actually producing the newscast.
1716 COMMISIONER LAIZNER: And those are existing facilities, so that’s at Synergy, right?
1717 MR ALAIN STRATI: Correct.
1718 COMMISIONER LAIZNER: Okay, okay.
1719 So I understand that you would have two (2) feeds, OTV-1 and OTV-2, and that they would have approximately 39 hours of news magazine programming per week?
1720 MR ALAIN STRATI: Correct. So it’s a total of 40 hours of original news...
1721 COMMISIONER LAIZNER: Okay.
1722 MR ALAIN STRATI: ... and programming, so it’d be 20 per service. The way to think about it, is having three (3) newscasts being the prime, sort of primetime anchor, if you will, on each of the two (2) channels, along with opportunities for that, for a great primetime current affairs program, other initiatives.
1723 So you have a blend and a mix, if you will, of a number of different programs, which are, we think, very viewer friendly in terms of the opportunities.
1724 COMMISIONER LAIZNER: And so those hours would also cover the current affairs programs you mentioned?
1725 MR ALAIN STRATI: Correct.
1726 COMMISIONER LAIZNER: Okay.
1727 And then, how many hours of repeat?
1728 MR ALAIN STRATI: So what we have is, it’s... during the primetime, you’ll have your, the original run of that newscast, and it’ll be repeated in the morning on a schedule show, so from, I believe, from 6 to 9 on each channel. So there’s a news component and then a repeat.
1729 COMMISIONER LAIZNER: Okay.
1730 MR ALAIN STRATI: So essentially you’re looking at 20 hours of the original first run on each channel, and 20 hours of the repeat on each channel.
1731 COMMISIONER LAIZNER: Okay.
1732 And can you give us a little bit more detail about the format of the current affairs program and the other newscasts, and the issues that they will cover?
1733 MR ALAIN STRATI: Sure, I’ll ask Wendy and/or Jonathan to give you some context.
1734 But it is really no different than some of those news programs you see currently, whether it’s Power Play or At Issue, or many others.
1735 MS WENDY FREEMAN: Yes, the current affairs show will, it’ll give us a chance to dig deeper into the story of the day. That half-hour, you know, to take a look and really go deep into what that local community, what matters to them, that day.
1736 COMMISIONER LAIZNER: So it would be locally centered?
1737 MS WENDY FREEMAN: Absolutely.
1738 COMMISIONER LAIZNER: Okay.
1739 MS WENDY FREEMAN: What matters to them in that community.
1740 COMMISIONER LAIZNER: Okay.
1741 You also said in the submissions that you put to the Commission before the public hearing that there may be situations where the CTV content would be dubbed, right?
1742 And so, you’re still maintaining that? I was just wondering in relation to your presentation this morning, are you still intending to do dubbing?
1743 MR ALAIN STRATI: In the discussions we did, there could be opportunities for it, I mean, there are stories that have, you know, if you will, a universal interest. But however, and I believe at the most in the neighbourhood of 5% to 10%.
1744 So we are very much focused on original newsgathering, original writing of news, original editing of news, and that original, you know, window, it’s an original opportunity to... for the news of the day and to communicate and to connect with the communities being served.
1745 COMMISIONER LAIZNER: Okay.
1746 So how do you feel about agreeing to a condition of licence no more than 5% to 10% of the new programming on both OTV-1 and 2 would be dubbed content, whether CTV content or other Bell property content?
1747 MR ALAIN STRATI: We’d certainly accept that.
1748 COMMISIONER LAIZNER: Okay.
1749 And would that also apply to your national current affairs programming, other types of programming?
1750 MR ALAIN STRATI: Absolutely.
1751 COMMISIONER LAIZNER: Okay.
1752 Now, you’ve indicated that there would be two (2) national feeds, so would it be your view that BDUs will be required to distribute both feeds?
1753 MR ALAIN STRATI: Correct.
1754 COMMISIONER LAIZNER: And why would you, what’s the basis of that rational?
1755 MR ALAIN STRATI: I mean, I guess, when you, there’s a couple things you do when you’re trying to develop, we talked about developing the idea for OTV, and it really starts with we thought with the news programming.
1756 And if you look at the amount of news programming and really, you know, the viewing opportunity that someone would have, if you look at our sample schedule, it doesn’t go from one language newscast to another language to another language newscast.
1757 Because we wanted a 60-minute newscast, because we wanted that long form, there needs to be a we field, there needs to be opportunities for other viewing outside of that.
1758 So if I’m Punjabi-speaking, if I’m Arabic-speaking, there’s the opportunity to watch the current affairs program in English, in French at times, there would be community producer program before it or after it. There may be a foreign acquired, you know, a great drama that we may have acquired, tag along, speaking from the Philippines.
1759 So, I think it’s the viewing opportunities, so that leads you to more content, and the two (2) channels. So we understand...
1760 COMMISIONER LAIZNER: Would it be time-delayed, the two (2) channels?
1761 MR ALAIN STRATI: No, they would not.
1762 MS WENDY FREEMAN: No. No time-delay.
1763 COMMISIONER LAIZNER: And so, and what’s the basis for saying that there shouldn’t be a time-delay? Just to give an alternative in real time to the viewer of what kind of programming they’re watching.
1764 MR ALAIN STRATI: Oh, absolutely.
1765 COMMISIONER LAIZNER: Right.
1766 MR ALAIN STRATI: And we are certainly very, very sensitive to that, and there’s two (2), there’s two (2) kind of answer of that, or two (2), you know, options.
1767 The first one, if you, the schedule itself has some, you know, for example, the Arabic or Spanish newscasts are at 7 or 8 o’clock, and they’re produced out of Montreal.
1768 But then, you’ll have other newscasts, like the Punjabi newscast, which is at 10 o’clock, which would make it at 7 o’clock in Vancouver.
1769 COMMISIONER LAIZNER: Right.
1770 MR ALAIN STRATI: And then, we’re showing an 18-hour day, so there’s also after midnight, you know, there’s the potential to also repeat the newscast after.
1771 But the opportunity and the core of what we’re doing is in primetime, or we’re hoping, that in primetime as viewers come and watch the service across the country, they’ll be able to access that programming in primetime, without the need for a time-delay.
1772 COMMISIONER LAIZNER: Are you refreshing the news programming throughout the day?
1773 MR ALAIN STRATI: I’ll ask Wendy to answer that and give you a bit of context about what we do currently.
1774 COMMISIONER LAIZNER: Okay.
1775 MS WENDY FREEMAN: Yes. If... absolutely, if a story needs to be updated, we will absolutely be refreshing the news.
1776 COMMISIONER LAIZNER: So in the same way that you would do it on your other programming...
1777 MS WENDY FREEMAN: Absolutely.
1778 COMMISIONER LAIZNER: ... on CTV News or whatever?
1779 MS WENDY FREEMAN: Yes.
1780 COMMISIONER LAIZNER: Okay.
1781 Now, would you have the same conditions of licence applied to both of those feeds?
1782 MR ALAIN STRATI: Yes.
1783 COMMISIONER LAIZNER: Okay.
1784 I’d like to talk a little bit about your CP commitments. You’ve indicated that since it’d be a new service, that you’d base the CP on the financial projections that you’ve put forward.
1785 And are you prepared to put that into a condition of licence?
1786 MR ALAIN STRATI: Yes, we’ve committed to 60% CP.
1787 COMMISIONER LAIZNER: Okay.
1788 And then, on the community, the news magazine programs, how are going to calculate the amount to devote to those in the first year of service?
1789 MR ALAIN STRATI: So, in the first year of service, there’s no current revenue.
1790 COMMISIONER LAIZNER: Right.
1791 MR ALAIN STRATI: But the reality is you can take subscribers and you can project that.
1792 So I believe we said that in response to the Commission questions, but it's the same sort of idea. In year one it's not as if we're starting the channel and saying we need to go talk to a BDU, get onto different packages, uncertainty. We know from day one what the subscriber base will be or could be, and that provides you with, you know, anywhere from 75 to 85 per cent of your revenue from day one. So basically you can project what that revenue is and you will make your expenditures based on that.
1793 COMMISSIONER LAIZNER: But you said that you would commit at least five per cent of the previous years' gross revenues in subsequent years for CP, so how are you going to gauge what you're going to do in year one?
1794 MR. STRATI: I believe in response to Commission questions we did address that and we said we'd be fine with a projection, if you will, of what our revenues would be in year one so that we would, you know, start spending and make our commitments from day one.
1795 COMMISSIONER LAIZNER: And that would also be included in the conditions of license?
1796 MR. STRATI: Absolutely.
1797 COMMISSIONER LAIZNER: As of year one just using the projections. Okay. That's fine.
1798 MR. STRATI: I mean, the reality, Madam -- Vice-Chair, is this is a news and information focussed service. It's focussed on Canadian programming. So from day -- it's -- you know, from day one we will -- you know, from before day one as we plan and get ready, there needs to be a strong commitment to Canadian programming.
1799 COMMISSIONER LAIZNER: And, again, on the theme of conditions of license, would you agree to imposition of a condition of license requiring at least 20 hours of community news programs per week per feed?
1800 MR. STRATI: So we -- when it comes to the 20 groups and 20 languages, that would be something which would be -- it would be per feed, but you would -- it wouldn't be -- there could be overlap between the two languages.
1801 So if I could give an example, you may have on OTV1 you could have, you know, 10 to 15 groups being served, on the other channel you might have 10 served. So combined you would have 10 -- 20 to 25 groups served.
1802 COMMISSIONER LAIZNER: And how does that affect the conditions of license in your view?
1803 MR. STRATI: I guess we could have -- if you're talking of a specific to each one, you could have a condition of license that would apply to each feed that would have, you know, that would have that 20 commitment divided, so it could be 10 groups -- at least 10 groups at 10 languages per channel.
1804 COMMISSIONER LAIZNER: And how many hours per week per feed as a condition of license?
1805 MR. STRATI: For the different groups and -- so what we have on -- we haven't made a specific commitment to hours, but ---
1806 COMMISSIONER LAIZNER: Right.
1807 MR. STRATI: --- you know, for community producers, we did indicate that we would have, you know, upwards of 30 plus hours of the community producers, so there's the opportunity to -- you know, again, for each of those that could be divided for each channel.
1808 So, for example, if it's -- we mentioned that we have 30 to 35 hours. You could have 15 hours on each of the 2 channels.
1809 COMMISSIONER LAIZNER: So you'd be prepared to accept a condition of license that would be a minimum of 15 hours?
1810 MR. STRATI: For community producers, yes.
1811 COMMISSIONER LAIZNER: For a community producer. Even though you've said that you intend to show about 23 hours per week; right?
1812 MR. STRATI: For community producers we indicated that we -- I believe in our schedule, the two together it's a little bit higher than 35. I think it's 30 ---
1813 COMMISSIONER LAIZNER: Okay.
1814 MR. STRATI: --- 33 or 35, but it's the combined of both.
1815 COMMISSIONER LAIZNER: Okay. All right.
1816 And just on this theme of conditions of license, so we can get that out of the way, let's talk about the PNI contributions. So you've said that the proposed conditions of license for the OTV service would commit to the acquisition, investment in ethnic or original third language programs of national interest of at least five per cent of the previous gross year's revenues -- gross revenues. So is it the same thing that you'll use the projections and accept a condition of license for the first year for PNI?
1817 MR. STRATI: Correct.
1818 COMMISSIONER LAIZNER: Okay. Now leaving aside the conditions of license, with respect to the languages served, how are you going to adapt to changing demographics over the years in terms of how much you provide for the different languages? Have you given thought to that?
1819 MR. STRATI: Sure. You know, Marianne may give us -- may want to talk a bit more about the community feedback, but when you're looking at groups and languages or, you know, these kinds of decisions, there's a couple of factors that come into play. One of them is certainly demographics. And it's -- and as you highlight it, it's not just raw demographic. It's not the big number, if you will, of mother tongue Canadians or even language spoken at home. It's built -- you know, working deeper into those demographic numbers.
1820 So things such as recency of immigration, you know, community need. Community support is real interesting and really important, whether it's community support from actually having, you know, a producer that would work with the community and having that community support, but sometimes it's also financial support. It's the ability and the interest for that community.
1821 There was a lot of talk about, you know, advertising revenues. That community support's important too from local advertisers, from local businesses and local -- that local community.
1822 COMMISSIONER LAIZNER: So when you talk about community support, are you talking about advertising revenues, about comments you receive from the advisory council? I'm not quite sure what you mean by community support.
1823 MR. STRATI: It's both. I mean, it's -- it really is community support for that producer and for that program. I mean, there is accountability, but from that community producer to that community. It's not the -- in many ways the community -- you know, we talk about these community producers and these community programs. In many ways it's sort of like your local, small-town paper. It has a real connection to the community. It has a real diversity of content. It covers a lot of different things. It covers some things within the community and outside the community, but the real kernel of it is that connection to the community and the accountability to the community so that that's the connection.
1824 So that's the first part, but the financial support could be, you know, is there interest, you know, because the -- it's been mentioned one of the things that the producer could do is to generate some advertising from that. So community support would be obviously very helpful.
1825 What we've proposed to sort of make that a secondary issue is to actually propose a license fee. We have a fund established and giving a license fee to the community producers.
1826 COMMISSIONER LAIZNER: And what is the license fee that you're proposing?
1827 MR. STRATI: So we've -- you mentioned the fund for the programs of national interest ---
1828 COMMISSIONER LAIZNER: Right.
1829 MR. STRATI: --- the five per cent of revenues. We've also proposed a fund of five per cent for community producers.
1830 COMMISSIONER LAIZNER: Okay.
1831 MR. STRATI: And the idea is, you know, many of these producers, you know, have backgrounds in media. They've come to Canada much -- I mean, you know, the issue of certification of -- and education and recognition of, you know, people come to Canada as immigrants is the same way in media. So they have background and an interest in media. So many times this is an opportunity for them to participate and get involved in Canadian media production. And frankly, we think if you have a 9(1)(h) service and you have, you know, these kinds of resources, we think it's critical that you also support the community producers.
1832 COMMISSIONER LAIZNER: So is it your intention then to adopt that barter/broker model where you share advertising as well as provide a license fee?
1833 MR. STRATI: I mean, that model is the former model.
1834 COMMISSIONER LAIZNER: M'hm.
1835 MR. STRATI: What we're doing is building on top of that model. Certainly we heard Amber yesterday and I think they've recognised the same thing. It's the need to have -- also to have the license fee. It's -- before this -- we've all talked about the difficulties in advertising. So we recognise these are difficulties in advertising and we also want to support the community producers. So we think the license fee is a recognition of the value of their programming.
1836 COMMISSIONER LAIZNER: And so what's your position on broadcasting local ads?
1837 MR. STRATI: So we have proposed the -- many existing Canadian ethics services have the opportunity to sell half of their local -- of their advertising avails for local advertising. We've proposed the same thing.
1838 You know, and it's about generating local revenue, the potential for local revenue. It's also a recognition that there's a lot of advertisers that are local advertisers and they want to be involved and they want to support the programming.
1839 So much like it's been the case with Fairchild or ATN or other channels, it's a recognition that in this part of the system, if you will, in ethnic broadcast, ethnic programming for national services there's a recognition of the opportunity of a local.
1840 So we've -- yesterday they talked about the prohibition versus the -- you know, that exception.
1841 COMMISSIONER LAIZNER: Right.
1842 MR. STRATI: So we propose the exception. COMMISSIONER LAIZNER: The exception. But your -- as I understand it, you’re proposing less than 90 percent through language programming, right? So how do you justify that request, given that you’re proposing less than 90 percent through language programming?
1843 MR. STRATI: Yes. The reality is, I would argue that 90 percent is something where, you know, they -- the services involved had the opportunity to have other types of programming and often cases, it was really the service which had a mix of programming, but again, focussed on their particular community. So it’s a bit of a different service.
1844 What we have, for example -- for example, we have no U.S. programming. We have high levels of Canadian content. So is it a -- is it a bit of a change to the exception if you will? I think it is, but I think it recognizes the fact that our service has those kinds of commitments which are very similar to that -- to that kind of level of ethnic programming.
1845 COMMISSIONER LAIZNER: Okay. Let’s talk a little bit about your advisory councils and how you see those as operating with OTV.
1846 MR. STRATI: Sure. And I’ll ask Mariane to provide some comments as well. But I think it’s -- you know, we’ve looked at the structure or the rationale for it and it’s -- for us we looked at -- we think of it a little bit different. It’s really got three components to it and it’s about accountability.
1847 So we have certainly our staff, and our community liaison team, and people involved in the station. I think that was mentioned yesterday. We also have our community producers. If we work with 30 community producers there’s accountability for community producers, and we want accountability from the community producers. It’s also the advisory council itself. The makeup of the advisory council. And if you will, it’s ---
1848 COMMISSIONER LAIZNER: So it’s that one advisory council?
1849 MR. STRATI: Correct.
1850 COMMISSIONER LAIZNER: And how many members?
1851 MR. STRATI: Certainly, we were thinking of 15, 15 to 18 members.
1852 COMMISSIONER LAIZNER: Have you developed any terms of reference, mandate, concept of what they would do, their time commitment, what you expect from them?
1853 MR. STRATI: We have not developed anything formally for the advisory council, along the lines of the terms of reference and other elements.
1854 COMMISSIONER LAIZNER: I think that brings us to the concern that’s been expressed by some public interest groups. That if you’re providing a 91H service as a vertically integrated company, and there is no check on the independence of that service, I’m not feeling a lot of confidence about the advisory council concept as an alternative to a diverse governance structure.
1855 You’re not giving me much in the way of a thought-out plan for how you can get some independent views and implement those to give some more comfort to, you know, some of these organizations that are very concerned about a vertically integrated company as large as Bell operating this service. So what would you say to that?
1856 MR. STRATI: I don’t think -- I mean, I don’t think that the issue is really whether it’s vertical integration or not. I think it’s a question of the ability and the focus on community feedback. I understand, you know, the will if you will, for formalized processes. But the reality is it’s going to be a day to day process.
1857 I mean, the issues that come up and the discussions that we have -- we would have, with whether it’s a community producer, or with an advisor on the council would not wait for a quarterly meeting, or a monthly meeting, or a semi-annual meeting. It’s a constant contact and a constant discussion.
1858 And it can be from everything from, you know, we have a current affairs program, is there, you know, a professional or someone in the community that would be good for the program? Is there -- it’s about the contact in terms of the reaction and the constant feedback. So I think that’s the key -- that’s the key element that’s going to essentially work for feedback.
1859 COMMISSIONER LAIZNER: But what makes it exceptional and not just another form of CTV News geared toward local ethnic communities?
1860 MR. STRATI: The exceptional part of it are the significant commitments that we have in terms of Canadian programming, in terms of Canadian news. We feel also, in terms of recognition of community producers for efforts in programs with national interest.
1861 And you know, certainly Wendy or Jonathan could give you some other contexts, but it’s that ability to -- if you will, to a broader and stronger news organization.
1862 MS. FREEMAN: I ---
1863 COMMISSIONER LAIZNER: But you’re saying that -- sorry. You’re saying that you want to draw on community producers and talk to community leaders. But you don’t seem to have any -- you’re not giving me any sense of how you draw them into the tent, how often you draw them into the tent, how much you listen to their views, how that’s reflected in the programming. I’m not getting a real sense of that from what you’re telling me so far.
1864 MR. STRATI: Mariane, do you want to give ---
1865 MS. ARALEH: Maybe I can clarify a little bit. We had looked at a framework for advisory council, and within that framework the community producers not only will be getting funding, but they will also be mandated to bring forth issues of concern within their community. So the flow of information is not from top down, but also bottom up.
1866 A lot of our issues in the communities are issues that are dealt at community level that never rise to a level where there are shows. So if you have the flow of topics or issues that are touchpoints of these communities that start from the bottom and flow through to the community liaison office, all the way through to the advisory council, we perceive that there would be a flow back and forth.
1867 And it is a structural framework that we felt comfortable with and I think our producers, who will be funded and who will be supported can easily agree to, you know, several issues on a weekly basis or a monthly basis, as we see. But we don’t see it as a quarterly meeting, or a monthly meeting. We see it almost as a daily event.
1868 COMMISSIONER LAIZNER: Right. And I mean, the Commission in the Notice of Consultation ---
1869 MS. ARALEH: Yes.
1870 COMMISSIONER LAIZNER: --- wanted some assurance about diverse governance structure. What we’re hearing from, you know, vertically integrated companies like yourself and Rogers is, well, we’ll have some group of advisors. But the final say on anything rests with us, we’re the company, it’s our bottom line financially.
1871 So we’re just trying to square that circle, in terms of getting some real input that’s reflected in the programming on the ethnic side. And you’re saying that what you’re going to do is just have dialogue as much as possible from the communities. I mean, is that the bottom line?
1872 MR. STRATI: I think it’s the dialogue that then leads to the formal meeting process. So it’s the day to day dialogue that then leads to a quarterly advisory council meeting. And I think the day to day dialogue and that constant feedback, and that connection, is an important part of the discussion at the quarterly meeting.
1873 I think, you know, the quarterly meeting would, you know, with the advisory council does involve things about, you know, strategies and things going forward. But it’s also looking back and sharing, you know, the touchpoints and the various examples or events that occurred, you know, in the time before that. So it’s more -- it’s also about learning from that as much as it is going forward.
1874 COMMISSIONER LAIZNER: Okay. Let’s talk a little bit more about the financial projections and the wholesale rate that you’ve proposed. Do you have evidence that the impact of the proposed wholesale rate on the price of the basic package and its acceptability to Canadians?
1875 MR. STRATI: In our consumer -- in our survey there -- we’ve conducted research -- we did not deal with the specific issue of wholesale fees and we can ask, you know, others to comment on that. But certainly, we saw that in terms of the percentage, or the price of basic, it’s a relatively low percentage of the overall price of basic. It is within the range of other services which have -- are delivering other 91H service, which are delivering these kinds of exceptional commitments and contributions.
1876 And we felt, and we built our model based on what we thought we could project in terms of the subscribers, the advertising revenue, and the subscriber revenue that we would need to fulfil all of the commitments that we’ve proposed.
1877 COMMISSIONER LAIZNER: Okay. But you didn’t specifically ask any questions related to acceptability of that rate in the surveys?
1878 MR. STRATI: No, ---
1879 COMMISSIONER LAIZNER: Okay.
1880 MR. STRATI: --- we’ve -- there was -- many others have done that and -- done the same research and others have done it for this, as well, but maybe Nick can give you a bit more context.
1881 COMMISSIONER LAIZNER: Mm-hmm.
1882 MR. NANOS : Sure, good morning, and thank you for the question.
1883 As you might guess, I do a lot of research including price-sensitivity research and many times, it has to do with asking the right question at the right time in the right frame. And I find that price-sensitivity research can be quite beneficial when there is some sort of anchor, so why don’t we just use an example? If someone is a Canadian that watches sports programming and they’re already paying for sports programming, when there’s a new sports-programming offering ; you can do price-sensitivity research because they’re already kind of paying for stuff and they already have a sense of the value.
1884 When we get into areas that are completely new -- and I’d like to say that I’m a very conservative researcher because I like to get it right and I don’t -- I just basically like to get it right and to have 100 percent confidence, when you get into areas that have no anchor ; it’s hard for people to give answers and it’s more conjecture, I would say, than a reasonable answer. So even if I was asked to do price research, I would probably clearly say that that was a significant limitation in terms of the reliability and I would probably not do it.
1885 COMMISSIONER LAIZNER: So is there anything that you would ask as a proxy for that to determine peoples’ comfort level or ---
1886 MR. NANOS: Yeah, actually, which is what we did in the study for Bell Media ; we gauged level of interest ---
1887 COMMISSIONER LAIZNER: Okay.
1888 MR. NANOS: --- and it’s quite clear that when we ask, you know, Canadians who speak, what I’ll say, the top six allophone languages that there’s a significant amount of interest in an offering -- a significant amount of interest in news. Actually, they’re quite voracious news consumers, so ---
1889 COMMISSIONER LAIZNER: Mm-hmm.
1890 MR. NANOS: --- I think that’s kind of a proxy for -- there’s definitely interest in this and that’s probably a more realistic way to look at this in terms of the opportunity.
1891 COMMISSIONER LAIZNER: Okay. In terms of the -- I’m going to move now to the digital strategy and I’d like to have a little bit more of an understanding of your business plan with respect to a digital strategy for OTB.
1892 So you haven’t included your forecast for digital in your financial projections ; I’m wondering why not and I’m wondering how you plan to roll it out, so I guess I have questions on the programming side as well as the financial side.
1893 MR. STRATI: Sure, I’ll ask John to take you through the financials and then we’ll come back to the programming part.
1894 MR. POUTANEN: Sorry, so we have -- we didn’t submit them, but we did put together some financial projections around digital. Certainly, excuse me, embedded in the head count that we’ve included to support local news, we do have people that would -- we have digital writers, people that would support our local news strategy and the strategy around digital, so we have separate forecasts, both revenue and expense side, that we did not submit.
1895 COMMISSIONER LAIZNER: Can you provide those to us as an undertaking?
1896 MR. POUTANEN: We can.
1897 COMMISSIONER LAIZNER: Okay, but how do you intend to integrate it into your existing platform, the OTB service? I mean are you intending to put it on digital?
1898 MR. STRATI: Absolutely, I’ll ask Wendy to talk to you a little bit about what we do currently with news and what we would do also with OTB.
1899 MS. FREEMAN : Yes, we plan to have a multi-platform user experience. It will have apps. We will be able to live stream the newscasts as they’re happening. We will -- you know how important mobile devices are ; we’ll have short-form news video on mobile.
1900 What’s really great about this, as well, is we’re going to have a user experience where you can actually personalize your news to exactly what you want to watch, so whether you want the Arabic newscast or the Spanish newscast, you can customize it for your mobile device and, again, everything will be live.
1901 It’s very important that Bell plays the biggest role in news. It -- you know, it has to be on all devices. It must be multi-platform and that is exactly what we’re going to do, just like we did with CTV News.
1902 COMMISSIONER LAIZNER: And is there a timeframe for that? Like if you had the 91H App. Service running, is there a timeframe for when you would ramp up on the digital platform?
1903 MS. FREEMAN: Well, I think it has to always go together. Linear and digital, as I said, we -- when you’re news, you have to be everything for everyone, so it has to be on all device. So whether you’re starting a linear news channel, you have to do in tandem a digital one always.
1904 COMMISSIONER LAIZNER: Okay. So it would be starting at the same ---
1905 MS. FREEMAN: Absolutely.
1906 COMMISSIONER LAIZNER: --- point on both platforms, okay.
1907 So if you’re going to have potential to cross monetized content originating on your licensed undertaking, is it appropriate to exclude all the revenues from the digital component of your application in your financial projections?
1908 MR. STRATI: I think it’s the -- it’s both revenues and expenses (inaudible).
1909 COMMISSIONER LAIZNER: So you’re keeping both revenues and expenses separate?
1910 MR. POUTANEN: Correct.
1911 COMMISSIONER LAIZNER: And when we’re talking about the content that would appear on the digital platform, is it all the content, a proportion of the content, a percentage?
1912 MR. STRATI: I think it’s -- I think you want your digital and your -- even some on demand opportunities to reflect what you’re trying to do with the channel, so I think it’s going to have many of the same components you have on linear.
1913 So when you talked about the news, the current affairs, community producers and other opportunities and, in fact, there may be opportunities for additional content if they’re up, you know, for -- you know, foreign programming the same way if you have a great, you know, Bollywood, you know, movie or, you know, a Filipino drama or you have the opportunity to have those programs together, if you will, available digital, you know, they air the linear and they have the opportunity on digital on demand.
1914 COMMISSIONER LAIZNER: So it wouldn’t be limited to news ; it would also include other programming as well?
1915 MR. STRATI: Absolutely.
1916 COMMISSIONER LAIZNER: Okay. And do you view that digital component as a way of mitigating risks associated with declining BDU subscribership?
1917 MR. STRATI: I’m not sure if it’s the BDU subscribership. I think it’s really about what the viewers and consumers -- what the viewers expect and what the consumers want. I think, you know, the opportunity -- the multi-platform opportunity is really important in terms of, you know, for so many different ways, so I think it really is about the consumer experience. That’s really important.
1918 COMMISSIONER LAIZNER: But do you expect to generate revenues in the digital space that are separate from the revenues on your linear platform?
1919 MR. STRATI: There’s the potential for it, absolutely, but, you know, many have -- you know, have talked about the -- the opportunities on digital are more limited than they are on linear.
1920 COMMISSIONER LAIZNER: Have you reflected these potential revenues in your calculation of the proposed wholesale rate that you’re asking for ; is that factored into your calculations?
1921 MR. STRATI: The wholesale fee is, you know, based on, you know, the projections for the service. I don’t think -- I mean the revenues expense for digital are going to be -- I don’t think it’s an -- it’s not a growth or a profitability opportunity ; it’s ---
1922 MR. POUTANEN: Often in digital, what we’re finding is you do well to pay for yourself between the ad revenues that you’re chasing and the cost of distributing the content through digital.
1923 COMMISSIONER LAIZNER: Okay. Well, we’ll wait to see those. And the undertakings are due December 6th, I believe, just to let you know.
1924 So the wholesale rate you’re requesting is 25 cents. Rogers is requesting a range of 19 in year 1 and then going up to 21 for year 5. How do you justify requesting that wholesale rate that’s much higher than Rogers when you -- we would assume you’d have similar existing resources for production? Like you said, you have your production centres et cetera -- and you’re going to use some synergies with CTV News allowing journalists to, you know, access resources and newsfeed, et cetera. So we're just trying to unpack how you justify that 25 cent rate.
1925 MR. STRATI: You know, maybe Wendy or Johnathan will give some particular elements of -- related to news, but it's based on the programming commitments that have been made. And -- for example, one of them that we've made is 5 percent of revenues that would go towards community producers, and that's a commitment that Rogers has not made. So that's 5 percent of the revenues.
1926 COMMISSIONER LAIZNER: But they'll have four feeds, and you only have two.
1927 MR. STRATI: Correct. And we'll have 60‑minute newscasts. I'm just saying there's different programming elements. We feel is that our programming commitments are larger and broader and involve additional -- certainly, we have 60 percent CPs, we have higher levels of expenditure on Canadian programming, we have, you know, other commitments that we feel are different commitments. So every applicant has -- maybe have different elements.
1928 COMMISSIONER LAIZNER: But you also project significantly higher advertising revenues than Rogers, and yet their rate is lower. So we're having trouble squaring that circle.
1929 MR. STRATI: I think maybe John can talk about the different advertising. But looking at the other applicants, you know, and certainly Amber and others, you know, I don't think that our advertising revenues, what we projected, are significantly -- they may be higher than the revised numbers for Rogers, but they're certainly within the range of the others.
1930 MR. POUTANEN: Yes, compared OMNI and Amber, we're all in that $20 million range, just north of there. The other comment I'll make about the OMNI application is they've chosen to submit a PNI margin at zero percent, essentially running as a breaking even service, while we do -- have submitted at approximately 4 percent over the licence term. We feel that's very modest, and -- but also a reasonable return on our investment in some of the undertaking with -- related to this service.
1931 COMMISSIONER LAIZNER: When we're talking about advertising, what were the underlying assumptions that you made that led you to believe that you could attract higher local revenues for example? Which are significantly higher in your projections than Rogers, at least twice as much; right?
1932 MR. POUTANEN: Yeah. I mean, you know, when you take a look at the advertising poll, you take a look at, you know, what will the entire service generate. We're within range of the other applicants, although slightly lower than OMNI and Amber.
1933 COMMISSIONER LAIZNER: So you're talking about a combination of local and national?
1934 MR. POUTANEN: Correct. Now focusing on local specifically, we felt that, as Alain was talking about earlier, there would be a desire within local communities to support the programs specifically that focus on those communities and that local advertisers, local auto dealers that are, say owned by someone in that community would have a desire to advertise on these news broadcasts.
1935 COMMISSIONER LAIZNER: So you're talking -- you're not really talking about ethnic advertising then?
1936 MR. POUTANEN: Oh -- yes, potentially. So the example I gave might be a Punjabi Canadian that owns an auto dealership.
1937 COMMISSIONER LAIZNER: Okay.
1938 MR. POUTANEN: But also -- I mean, you know, any auto dealer. You know, people from across all walks of life buy auto vehicles; right. So if you've got an audience that you want to chase, any dealer could ---
1939 COMMISSIONER LAIZNER: So have you observed any particular trends related to that ethnic advertising market? Have you measured it in any way? Or do you just see it as a global ---?
1940 MR. POUTANEN: I would say more of a global trend. You know, certainly we have local sales teams across the country and in Vancouver, Toronto, and Montreal, specifically, that serve those markets. And so it would be a bit of a gut check on what the desire might be. You know ---
1941 COMMISSIONER LAIZNER: Rogers says it's a real tough sell when you have a multi-cultural -- ethnic programming to actually get those advertising dollars locally. That -- especially with wholesale rates, it's hard to demonstrate viewership, hard to get those advertising dollars. What are your comments on that?
1942 MR. STRATI: That's correct. I mean, the Numeris issue is that the -- an issue in terms of the ability to measure audience. That's -- it's always been an issue, it's an issue for others. It doesn't mean there are not opportunities for local advertisers. It doesn't mean there are opportunities for revenue on the service.
1943 I think when you build very strong programming and you have the opportunity to reflect that -- what the interests and the concerns of the community are, you have the opportunity to reach out to that community and the community want to support. So I think it's about rebuilding. You know, the core, which is going to be the core strength of the service is rebuilding the newscasts. So I think that you have a new sales opportunity.
1944 It was mentioned yesterday. Certainly on ---
1945 COMMISSIONER LAIZNER: Right.
1946 MR. STRATI: --- the issue ---
1947 COMMISSIONER LAIZNER: But Rogers has been operating in this niche, and so their views are different from yours. So what's your strategy? How do you intend to disprove their numbers in your sales strategy for advertising?
1948 MS. FREEMAN: One of the things that I think we are different from Rogers is that we're going to have 53 multi-skilled journalists across the country gathering original news. CTV News is Number 1 in all our local stations, except Vancouver, and part of why we're so successful is because of our original newsgathering. We are entrenched in the communities all across the country.
1949 And this will be the same. We will have 53 multi-skilled journalists who edit, who shoot, who gather in these communities, and providing an hour newscast every night. And so it's different because it's original ---
1950 COMMISSIONER LAIZNER: So it's like a personal connection?
1951 MS. FREEMAN: --- newsgathering. Pardon me?
1952 COMMISSIONER LAIZNER: It's like a personal connection ---
1953 MS. FREEMAN: Exactly.
1954 COMMISSIONER LAIZNER: --- in the community?
1955 MS. FREEMAN: We are entrenched in the communities providing this connection that no one else is doing, with, you know, 53 multi-skilled journalists. That's a lot.
1956 COMMISSIONER LAIZNER: Yeah.
1957 MR. STRATI: We think -- I mean, it's -- these are new investments in stronger programming. We believe there's opportunities for advertising as well.
1958 COMMISSIONER LAIZNER: Okay. So the flip side of that, of course, is what would be your position if the Commission would limit local advertising sales? So would that affect your proposed commitments and the wholesale rate, or would it have no impact on your proposal?
1959 MR. POUTANEN: I guess it would depend on the extent of the limitation. We'd be comfortable with 6‑minutes an hour. You know, if it fell below that, then we'd have to go back and rerun the numbers. But just kind of see what the tipping point is.
1960 COMMISSIONER LAIZNER: So if we were going to prohibit the broadcast of local advertising, could you submit revised financial projections reflecting what that impact would be on you?
1961 MR. POUTANEN: Yes. We'd have to go back to our sales and management group to see if there's enough in the -- they felt there's enough in the national pool to make up the difference. But you know, certainly we think we would see a loss in revenue.
1962 COMMISSIONER LAIZNER: Okay. So ---
1963 MR. STRATI: And the only element for that, and I think it was discussed yesterday, it'd be -- and the only, you know, caveat for that would be the opportunity for local producers -- for community producers to generate local advertising. So that would be ---
1964 COMMISSIONER LAIZNER: Right.
1965 MR. STRATI: --- a segment from that, that we ---
1966 COMMISSIONER LAIZNER: Right.
1967 MR. STRATI: So it's really, if you will, our ability or our involvement in -- for our own in‑house productions, our own programming for local advertising.
1968 COMMISSIONER LAIZNER: Okay. Maybe we could do that as an undertaking?
1969 MR. STRATI: Absolutely.
1970 UNDERTAKING / ENGAGEMENT
1971 COMMISSIONER LAIZNER: So you've also indicated that you expect the service to be profitable in the very first year of operation. How do you expect to achieve that objective and maintain your proposed commitments if you're not going to generate the same amount of advertising revenues or if you, for other unexpected reasons? I just want to have a little bit more comfort on how you expect to be profitable.
1972 MR. POUTANEN: You know, if topline revenues didn't materialize like we have projected, certainly that would have a negative impact on PNI margins and on our operating margins depending on the extent. If it looked like it was a permanent decline, we would certainly have to go back and take a look at our cost base.
1973 You know, if -- programming is the biggest nut here, and we'd have to start with some of our foreign programming. The very last thing we'd want to do is touch and go after any of the dollars that we've put aside to deliver these broadcasts across the country because that's corridor offering.
1974 COMMISSIONER LAIZNER: And if the service is more profitable than expected, what would you be doing with those extra profits?
1975 MR. POUTANEN: You know, part of it is -- you know, naturally with the 60 percent CPE commitment that is going to result in us spending more on community programming and on these new services. We'd then have to take a look at -- do you want to?
1976 MR. STRATI: Yeah, I think that’s one element that John just indicated is additional revenues, a very significant portion will be reinvested back into programming automatically.
1977 I do think, also, the Commission has -- I mean, I think it’s -- the reporting requirements the Commission has indicated for both for production and for financial management are a way for us to be accountable to our operations.
1978 I think what we’ve done is focused on a business model that we feel is -- there’s with a modest opportunity for a return. Is there a possibility for greater potential for it but it’s -- we feel that may be unlikely.
1979 COMMISSIONER LAIZNER: You think it’s unlikely that you generate more?
1980 MR. STRATI: Yeah.
1981 COMMISSIONER LAIZNER: Okay. So in terms of your operating expenses -- and I’m also looking at Rogers here with four feeds -- you’re projecting to spend significantly more despite having your feeds and is that -- is the answer to that because of the nature of the news programming, or can you explain to me why that would be?
1982 MR. STRATI: Sure. John can give you the details on our technical expenses.
1983 MR. POUTANEN: You know, certainly the programming that we’ve committed to with the incremental boots on the ground is quite expensive programming. We do also -- we want to create a robust service, so we do have some programming committed to both potentially covering sports, covering additional current events, but also some foreign programming, non-foreign programming to make this a robust and desirable service.
1984 We think that also supports our ability to, frankly, drive some ad revenue dollars out of this service.
1985 COMMISSIONER LAIZNER: So, in particular, I’m looking at the financial projections four-year category of Admin General, you’re well more than twice as much as Rogers for administration in general as well. Are there potentials for synergies there? Like, why are they significantly more?
1986 MR. POUTANEN: You know, I can’t speak to Rogers’ number. It is markedly lower than any of the other Applicants. We feel we’ve put in fair and reasonable costs in there and made reasonable assumptions around those costs. We seem to be in line with a number of the other Applicants, and far lower than, say, Amber.
1987 COMMISSIONER LAIZNER: Okay. And then in terms of your subscriber forecast, those also would differ from those submitted by Rogers, for example, that’s operating the service right now.
1988 In your reply to their intervention you stated that new BDU offerings and conversion of subscribers to digital would offset the loss of legacy subscribers.
1989 So I’d just like to unpack a bit your assumptions for this forecast and any trends you believe will influence the rate of BDU subscribership in the licence term.
1990 MR. STRATI: Sure. I’ll -- John can give some additional context as well. But, you know, when you look -- when we’re looking forward I think we’re looking at the potential for stemming of the decline or the tapering off of the decline. And even some of the reports have talked about, you know, projecting forward. Many of them also highlight some of these potential factors and variables, and it’s really, we think about, you know, this notion or this element or factor of cord shaving.
1991 I think we’re seeing BDU pushback in terms of opportunities. This is -- a 9(1)(h) service would be on the small basic, so it’s not on the high, you know, penetrative discretionary packages where cord shaving could impact it. You know, cord shaving, you know, it’s about the customer. I mean, there’s small basic options now. There’s the pick pack option has just -- I mean, it’s still being relatively new introduced in the market. Over-the-top penetration in Canada for Netflix and other -- for Netflix, for example, is pretty high; it’s one of the highest in the world.
1992 So, you know, BDUs are offering enhanced services. Certainly Bell with its Fibe TV product, but you’re still going to see Rogers with Ignite, Shaw with X1.
1993 You’re also seeing Bell -- we’ve introduced something called Alt TV, which is a BDU product without the set top box. So -- and many BDUs have added over-the-top options. So we see -- you know, and there's a bundled offer for TV with a, you know, quad play of service. So the communications, if you will, package that customers get.
1994 So we think going forward some of the things that have impacted that decline, there are factors which could actually, you know, if you will, stem that decline and you may see more of a relative steady state for BDU subscriptions.
1995 I don’t know, John, if you want to add anything.
1996 MR. POUTANEN: Yeah, yeah. No, I think you’ve hit the nail on the head, Alain. You know, we are -- certainly expect to see, in the coming years, decreases in penetration but we -- our own internal numbers suggest that those decreases will flatten out. And then we’ll actually -- we’ve got actually modest growth in sub-revenue here. We feel that we’ll reach the point where the growth in the number of households in Canada, that curve will offset the curve in overall penetration levels.
1997 COMMISSIONER LAIZNER: Okay. So, you know, you’re very bullish. You think you might have a bit of a dip now but then the subscriber rate will go up. You’re confident about the advertising revenues. So why can’t you lower the wholesale rate or have a sliding scale that goes down over the next few years?
1998 MR. STRATI: On the subscriber -- I think over Applicants, although they’ve indicated decline it’s not -- it’s a relatively modest decline so I -- you know, there's a range of projections for subscribers. Some are quite pessimistic, and others, including other research reports, you know, sort of indicate that are in that -- you know, a flat BDU world is not -- it’s not growth so it’s a difficult one to work in.
1999 But you know, there’s -- and in terms of our wholesale fee, I think, you know, we’ve built our model and our programming commitments on that opportunity and we feel for that wholesale, we feel -- and part of that is this notion of, you know, looking out forward and the uncertainty. Are we more optimistic about the uncertainty? That has shown to be true. But there are others who are very close to us in terms of where they see that going. But, ultimately, in terms of the wholesale fee and the revenue that we’ve indicated and we hope to generate are there to build the model so it’s sustainable. Sustainable so we can deliver on the programming, the commitments that we proposed.
2000 COMMISSIONER LAIZNER: So you’re not prepared to adjust that wholesale rate that you’re seeking?
2001 MR. POUTANEN: I think we’d have to go back and rerun the numbers. You know, looking two years out, the farther you go out, the greater the uncertainty. You know, we feel we’ve built this model with modest BPIT margin; it’s 4.39 percent over the licence term. That accounts for some of the uncertainty that we see going forward. Certainly we’re more bullish, in terms of subscribers, than other Applicants, but that could cut both ways.
2002 You know, there's one thing you can always say about a forecast; it’ll be wrong. We all feel we’ve probably made reasonable assumptions; ours just tend to be at bit on the high end back to subscriber.
2003 COMMISSIONER LAIZNER: And they’re based on some surveys you’ve done, right? Conservative research firms who like to get it right.
2005 COMMISSIONER LAIZNER: So you would have a lot of confidence in your forecast, right?
2006 MR. POUTANEN: As confident as you can ever be in a forecast.
2007 COMMISSIONER LAIZNER: All right. Well, if you want to do some re-looking at your numbers and fine-tuning them and seeing whether you want to adjust that wholesale rate, we can -- you can submit by December 2nd.
2008 MR. STRATI: We can certainly do that.
2009 COMMISSIONER LAIZNER: Okay. The other thing that I would like to get from you as an undertaking is related to your capital investments. So you’re projections have indicated a cumulative depreciation of, I think, 7.8 million over the course of the licence term. But we don’t have much detail about the capital investments associated with this projected depreciation. So would you be able to provide a detailed breakdown of your projected capital expenditures for OTB, as an undertaking?
2010 MR. POUTANEN: Certainly.
2011 UNDERTAKING / ENGAGEMENT
2012 COMMISSIONER LAIZNER: Okay. Just give me a minute to go through your statement here.
2013 (SHORT PAUSE/COURTE PAUSE)
2014 COMMISSIONER LAIZNER: So I think that that concludes the questions that I have and I’ll turn it over to the Chair.
2015 Thank you.
2016 THE CHAIRPERSON: Thank you.
2017 Vice-chair Simard?
2018 COMMISSIONER SIMARD: Thank you, Mr. Chairman.
2019 Bonjour. Bon matin. Good morning. I have just brief I guess questions for you. So the first one refers to your team of new journalists. So you said that you would be hiring 53 new journalists. I’m curious to know how you made such assessment. So how did you assess this number?
2020 MS. FREEMAN: I’m going to let Jonathan walk us through the amount of journalists in each city. But really we looked at how we do local news now and the amount of teamwork it takes to put our newscast on the air. We have our newscasts across the country. We do a 5:00 o’clock in every city in Canada and we also do a 6:00 o’clock news. It’s based on that model. And I’ll let him walk you through.
2021 MR. KAY: And the reason we based it on that model, CTV News has a lot of experience in local news. Right now we do local news for a geographic local community and we see this as an opportunity to do local news for a community that’s dispersed across the country.
2022 So we’re going to do six separate and unique newscasts that are all formed from the ground up. So each newscast will have a dedicated producer who speaks and works in the language of their newscast. They’re going to build that newscast with a team of two writers and translators again who speak that specific language, and they’re going to sit and actually craft the newscast as a television program.
2023 They’re going to work with stories that are created by approximately seven journalists again whose primary language is the language of the newscast and who live, raise their families, work and interact in that community every day of their lives. So the stories are organically going to come from the communities.
2024 We’re not creating a newscast and then translating it into different languages. This is a newscast created by people who are part of these communities.
2025 In addition to those journalists who are creating the stories, we’ll have a shared digital producer who will facilitate the digital coverage, which will come from those journalists but they’ll be the digital expert who helps them navigate the digital space. Those newscast producers will also draw on shared resources among the six newscasts, including a parliamentary bureau, including reporters stationed outside the three production centres, including internationally based reporters.
2026 So just if you take the math, six languages, 53 people, we would expect eight or nine journalists to have their primary proficiency in each language but we’re also aiming to have journalists who have multiple language skills.
2027 We’re also able to access the news resources of CTV news, so the producers will be able to put in requests for the material we need.
2028 So we’re talking about something very different than the other newscasts you’ve been hearing about. These -- just as we would produce a local newscast for people who live and work in Winnipeg, or people who live and work in Vancouver, this will be a local newscast created specifically for people who speak each of these languages.
2029 COMMISSIONER SIMARD: And how the job description for those journalists would be different from the job description for your regular journalist?
2030 MR. KAY: I don’t think it will be different at all. In fact, I think we have journalists that are currently in the CTV system who have language skills who would be very interested in working in a capacity on one of these channels.
2031 COMMISSIONER SIMARD: But would you be asking for specific skills or experience?
2032 MR. KAY: We would -- the skill we would be looking for is we want people who are curious. The news directors I’ve worked for -- I was a local news reporter. You want somebody who can go into the grocery store and come out with three story ideas. That’s the primary thing that we’re looking for, somebody who’s curious and wants to tell stories.
2033 COMMISSIONER SIMARD: In your proposal there are three facilities, right, on the ground, Toronto, Ottawa, and Montreal. So why ---
2034 MR. STRATI: Toronto, Vancouver, and Montreal.
2035 COMMISSIONER SIMARD: Yes. Thank you.
2036 So why is that -- because in other proposals there were more facilities. So why, in your view, three facilities would be sufficient?
2037 MR. KAY: Because of the way technology has changed facilities are less important to television news gathering than they used to be. We used to have the 1,000 pound pencil that we had to carry around. Television news gathering is not the same.
2038 So while we have to have a production centre where we would have our control room and the ability to actually integrate the newscast, we’re not looking at the same requirements for our multi-skilled journalists. They’re much more portable and much more able to file the content that they gather from wherever they happen to be. So those three facilities will be where the set for the newscast is and the anchor desk but, again to quote one of my fellow local journalists, no news happens in the newsroom. We want the journalists to be out, as Wendy says, boots on the ground, in the field.
2039 COMMISSIONER SIMARD: You described your digital strategy with Vice-Chair Laizner. It’s a bit unclear to me if this information would be additional or if ultimately there would be -- it would be possible to subscribe online and have access to your services.
2040 MS. FREEMAN: What would happen is when the newscasts are on the air you can watch them as well on your devices. We will have websites. You will be able to customize what you want to watch. But unlike linear where we only have an hour sometimes, you know, a news story in an hour newscast could sometimes be a minute thirty, two minutes. We do so much more. So that extra stuff that a journalist will gather can go online. You’ll see digital extras all the time like we do now. So someone who would, you know, go out and interview someone in the community you’ll only see 30 seconds on the linear but you may see 10 minutes online on your devices. So that’s very important. So absolutely there will be all sorts of digital extras that you will see. So it’s not just what’s on linear.
2041 COMMISSIONER SIMARD: Thank you. Those were my questions. Thank you very much for your submission.
2042 THE CHAIRPERSON: Thank you.
2044 MS. DIONNE: Thank you.
2045 I just have a few questions. You’ve talked about two thirds of programming would be local, regional, and one third national. Would you -- I don’t think you proposed a condition of licence regarding local newscasts. Would you be willing to propose a COL for the one third local?
2046 MR. STRATI: Just with one point of clarification. I don’t think it’s the local newscast, but that’s fine, it’s really the local input and the local content. So essentially when you’re watching a national newscast on OTV two thirds of that content will be local and regional in nature in terms of the content, the perspective, and the one third will be that national story, the international story. So the focus will still be on local and, you know, communities in Canada.
2047 MS. DIONNE: Okay. So I gather the answer is ---
2048 MR. BOWLES: Well, we’re -- in terms of the newscast, we’re -- it’s a national service, so we, as many other applicants, are offering a national newscast. So it’s really about the contents. So two thirds of the content would be local ---
2049 MS. DIONNE: Would be local.
2050 MR. BOWLES: Local and regional.
2051 MS. DIONNE: Okay. Thank you.
2052 You’ve stated that you intend to have about 30 percent of your programming to original first run yet again I don’t think we have that as a proposed condition of licence. Is there an original first run level that you would be willing to commit by condition?
2053 MR. STRATI: Yes, I think we mentioned 80 hours. So it would be 40 hours per channel.
2054 MS. DIONNE: Okay.
2055 MR. STRATI: Which is the 30 percent that you’ve noted.
2056 MS. DIONNE: And I’d like to clarify, you also talked about the programming, so that would -- did I understand correctly that that would include your dubbed programming or it could be excluded?
2057 MR. STRATI: That could be excluded.
2058 MS. DIONNE: Okay. Thank you.
2059 We’ve talked also about brokered programming. What is your yearly budget for brokered programming and how is that reflected in your financial projections?
2060 MR. ALAIN STRATI: I don’t think we have projected or included any broker programming.
2061 So the opportunity if it’s, if you’re referring to the community producers and the opportunity to work, it would be, that would be an advertising sale, so that would be reflected in the advertising revenue.
2062 MS. VALÉRIE DIONNE: Okay. Thank you for that clarification.
2063 Do you anticipate any future agreements to acquire programming from existing next services or just an impression that you’ve just explained?
2064 MR. ALAIN STRATI: I think there’s opportunities for, you know, existing Canadian producers, Canadian broadcasters, and also distributors. Distributors who have content and who have, essentially, who have programming rights for a lot of foreign content.
2065 So our strategy is to build and to focus on the Canadian strategy we have, which is the news, the current affairs, documentaries and the community of producers.
2066 After that, it’s to look at and to supplement and to build out a stronger schedule, and certainly we’d be looking at different partners and different opportunities.
2067 MS. VALÉRIE DIONNE: So would that, that would have an impact on your in-house production budget?
2068 MR. ALAIN STRATI: No, that’s... acquired, that’s acquired programming. In our in-house budget, it’s really limited to our news, our current affaires, our community... of producers, because we have the 5%, the documentaries, because we have a documentary fund, so that’s all, if you CPE it’s on-house, but that’s CPE.
2069 There’s others in-house initiatives that we’ve talked about doing and, you know, there’s E-Talk Hollywood or Much Music sort of, you know, music shows or that kind of thing, but those are strictly in-house, anything else would be acquired.
2070 MS. VALÉRIE DIONNE: Okay, thank you for that clarification. Those are my questions. I believe my colleague has some.
2071 MR. ERIC BOWLES: I just have a very few questions, there.
2072 Earlier, when you were discussing with vice-chair Laizner, you... there was a discussion about the possibility of applying standard COL18D, which prohibits the broadcast of any paid advertising other than paid advertising.
2073 I believe an undertaking was provided, you made an undertaking to provide revised financials, if that COL was to apply.
2074 Could you, and to that undertaking, a discussion of what impact the application of that COL would have on the commitments you’re making?
2075 MR. ALAIN STRATI: Yes.
2076 MR. ERIC BOWLES: Also, following up on a discussion earlier about the digital platform and your plans in that regard.
2077 I believe you stated that the, both of the expenses with the cost and the revenues were kept separate in your projections as between the proposed linear service and the digital service.
2078 Can you explain a little bit the methodology that you used as to how you allocated cost, expenses and revenues for programs that would be programming that would be shared across both platforms?
2079 MR. ALAIN STRATI: John, do you want to give a bit of background or we can do that certainly in detail in the undertaking, but...
2080 MR. JOHN POUTANEN: So, on the digital side, certainly if we were to include incremental cost to put something on a digital platform, if it was a separate rights fee or something like that, that would be put separately as part of digital.
2081 If it’s something that, say, we’re putting the news that we’re broadcasting up onto the website, there’s no incremental cost, you’ve already produced it.
2082 And so, then there wouldn’t be any cost included in digital for that, cause you’ve already created that content.
2083 MR. ERIC BOWLES: So you would have included all of the expenses and costs for that programming on the linear service?
2084 MR. JOHN POUTANEN: Correct.
2085 MR. ERIC BOWLES: In your projections, but the revenues that would result from its presence on the digital platforms are allocated to the digital?
2086 MR. JOHN POUTANEN: If you’re able to monetize it over there, correct, yes.
2087 MR. ERIC BOWLES: Can you explain why that’s appropriate? I mean, not allocating any of the cost with respect to the production or the acquisition of programming that is shared on both platforms?
2088 MR. JOHN POUTANEN: Sorry, maybe I misspoke.
2089 So, so for the stuff we produce and go on the linear service, you know, to put something up digital, there’s very little incremental cost to that, you’ve already produced that program.
2090 So that would reside entirely on the linear service, as with the ad revenue you can sell on that service.
2091 You’d also put that up onto the website, hope to monetize it. You know, monetizing it can be a bit of a challenge; digital is very commoditized right now, the CMP rate is quite low.
2092 So we, the only cost that we would put onto the digital website, the digital part would be any of the incremental licence fees in order to get, say, the digital rights in order to put it up onto the website.
2093 MR. ERIC BOWLES: Yes, thank you very much. Those are my questions.
2094 THE CHAIRPERSON: Thank you. Thank you for your presentation. We’ll recess now for 15 minutes, returning at 10:55. 10:50, pardon me.
--- Upon recessing at 10:35 a.m.
--- Upon resuming at 10:50 a.m.
2095 THE SECRETARY: Please, we are now ready to start again.
2096 So Mister Chairman will now proceed with item 6 on the agenda, which is an application by Independent Community Television Montreal, TCTV-MTL, for broadcasting licences to operate national multi-ethnic, multi-cultural discussionary service to be known as Tele-One and Tele-Two.
2097 Some representative on the panel are appearing by Skype, today. Please introduce yourselves first for the record, and you have 20 minutes, you may go ahead.
2098 MR. LAITH MAROUF: Thank you very much. Before we start, I’d like to take permission to deposit new evidence on the record.
2099 ICTV as a non-profit had to look for funders to launch such a service, and our funders had hired a consultancy firm to investigate our liability and our sustainability for their lending.
2100 We have finally received letters of intent from our funders, and the report by MCE Conseil, the independent consultancy firm that was hired by Desjardins. And we’re hoping we can share them with you.
2101 THE CHAIRPERSON: Madame Simard?
2102 COMMISSIONER CAROLINE SIMARD: Thank you, Mister Chairman. So we will take them under advisement.
2103 At this point, it would be important, though, that you confirm whether they are significant changes compared to the most recent version we have.
2104 MR. LAITH MAROUF: Yes, there is some changes in the budget, because of the financers wanted some changes and they had to be made.
2105 So this is why it’s important for you to take a look at the financial papers in the annexe.
2106 COMMISSIONER CAROLINE SIMARD: Okay, so again, we will take them under advisement and like a while we will the exercise of the questioning, we will see, I guess, how we could make some adjustment.
2107 MS. LINDA ROY: And just for the record, Madame Simard?
2108 COMMISSIONER CAROLINE SIMARD: Yes?
2109 MS. LINDA ROY: These documents will be placed on the public record and will be called exhibit ICTV-Montreal One, Two, three, Four and Five, there is five (5) documents.
2110 COMMISSIONER CAROLINE SIMARD: And my other question is: is there any confidential information?
2111 MR. LAITH MAROUF: Some profit and part of what we’re arguing here is that any 91H that is licenced to public service should give accessibility and accountability to our financial records. All our documents have been and still are non-confidential, we don’t want any confidentiality.
2112 COMMISSIONER CAROLINE SIMARD: Thank you.
2113 MR. LAITH MAROUF: All right, so I guess we can start, now.
2114 Good day, Chairman Scott, Commissioner Simard and Laizner, Madame secretary and CRTC staff.
2115 We acknowledge we are speaking today on Algonquin territory, we emphasize that it is our collective responsibility as media producers and regulators to acknowledge both the history and the ongoing struggles of Indigenous People to be heard.
2116 I’m Laith Marouf, the policy consultant and CEO for ICTV-Montreal. I’m also an award-winning community television and radio producer, who worked in the community of media sector for the past 15 years.
2117 With me today our members of ICTV board of directors as well as future administrative staff. I will let them introduce themselves for clarity.
2118 UNKNOWN FEMALE SPEAKER: I’m the president of the board of directors of ICTV, and I’m a professor at (inaudible) College in Montreal, where I’m speaking from. Over here, I’m the coordinator of the Liberal Arts program and I teach History in Humanities. My areas of expertise are gender and south Asia, and it’s (inaudible).
2119 MR. JOONEES KHAN: Bonjour, Commissaires. Je m’appelle Jooneed Khan, et je suis membre du conseil de TVCI.
2120 J’ai d’abord travaillé pour le département Nouvelles Téléradio de l’agence Presse canadienne, à Montréal, avant de passer au quotidien La Presse, où j’ai exercé comme chroniqueur de politique d’information et de politique internationale, depuis 1976 jusqu’à ma retraire en 2009.
2121 J’ai aussi collaboré bénévolement avec les radios communautaires et universitaires à Montréal.
2122 M. QUINTANA: Buenos dias. Je m’appelle Juan-Carlos Quintana. Je suis membre du conseil d’administration et je suis diplômé de l’Université de Concordia en production linguistique. J’étais lecteur de nouvelles et journaliste pour la section latino-américaine de Radio Canada International de 2005 à 2011. J’étais aussi journaliste à la recherche pour la première chaîne de Radio Canada pour C’est Bien Meilleur Le Matin avec René Mirois en 2009. Et je suis bénévole, réalisateur, animateur d’une émission culturelle sur CQLT 90,3 FM depuis 1992. De plus, je suis ancien membre du conseil d’administration du Québec’s Community Groups Network and un membre de la Chambre du commerce latino-américaine et ancien conseiller en communications pour cette dernière.
2123 Merci beaucoup de nous recevoir.
2124 MS. LUDSKI: Hello, my name is Zoe Ludski. I am a settler in the territory of the qathet Tla’amin Nation. I live in what is known now as Powell River in the Ka region of so-called British Columbia.
2125 As a trans-media artist my work focusses on creating opportunities for diverse communities to engage in courageous conversations that strengthen our communal bonds. Ruben?
2126 M. JIMENEZ: Bonjour. Ruben Jimenez d’origine dominicaine, ici au Canada depuis plus de 34 ans. Je suis très impliqué dans le milieu communautaire québécois-canadien. Ici à Montréal, je dirige une entreprise en économie sociale et d’insertion sociale qui s’appelle Services d’entretien PROPRET, une entreprise qui vient en aide aux gens démunis. Je suis membre du conseil d’administration du Projet Sol, une autre entreprise d’économie sociale, conférencier international pour l’Amérique latine dans les sujets d’insertion sociale, développement durable et les entreprises d’insertion; collabore avec le Chantier de l’économie sociale, le CESM ici à Montréal et le collectif des entreprises d’insertion. Très impliqué dans la communauté latino-américaine ici à Montréal; créateur-fondateur de deux organismes sans but lucratif, Unis pour le Pays pour unir les Latino-américains de Montréal et de la grande région métropolitaine et la Fondation Luz del Alva pour amener de l’aide en République dominicaine. Membre de la Chambre de commerce dominico-canadienne, puis ça fait 15 ans que je collabore alentours des entreprises d’économies sociales au Québec.
2127 Merci beaucoup. Très fier de faire partie du panel aujourd’hui.
2128 MR. GAGNON: My name is John Gagnon. I’m a Cree from Omushkego area of the James Bay coast and I’m the CEO of Wawatay Communications Society, a self-governing, not-for-profit, community-driven, indigenous organization, whose membership includes 49 First Nation communities within the territory of the James Bay Treaty 9 and portions of the Treaty 5.
2129 I have also worked on the Indian Residential School portfolio as a communication director for a national agency, where I heard from survivors and intergenerational survivors for years of indigenous residential schools about the need to preserve our languages.
2130 Thank you.
2131 MR. FAHMY: Mine is Mohamed Fahmy, a Canadian journalist and author. I’ve spent almost with almost two decades mostly working for media organizations such as CNN, Los Angeles Times, and the BBC outlets often labelled as mainstream media.
2132 In my years covering conflict zones and revolutions and uprisings, it became second nature for me to want nothing more than to give a voice to the voiceless and I learned that one can fully do that by connecting to all parts of society; minorities, refugees, and most definitely a wider audience who come from diverse backgrounds who speak different languages, and that is the main reason why I joined the team of dedicated professionals -- are coming with a message that represents Canada, the diverse Canada our Prime Minister promotes.
2133 When I was jailed in Egypt for 438 days in 2013 on fabricated charges while doing my job as a prisoner of conscience, it became even clearer that free press and honest journalism are the fundamentals of a true democracy. The reason I am here today, dedicated to seeing this non-profit TV model flourish and break through the constraints and obstacles that corporate media models put us through on a daily basis both as consumers and journalists.
2134 Thank you.
2135 Mme FARAJ: Bonjour. Mon nom est Leïla Faraj. Je travaille dans le secteur de la coopération et du développement international depuis 1999. J’ai eu l’occasion de travailler ici au Canada et au Moyen-Orient, donc une variété de communautés sur un environ de 12 ans et les dernières années plus particulièrement en Haïti, en Afrique de l’Est et en Afrique de l’Ouest. Je suis présentement doctorante en sociologie à l’UQAM et je me spécialise en études féministes et je m’intéresse vraiment à l’expression des voix multiples et diversifiées des femmes au sein de la société canadienne et globalement.
2137 MR. FERRER: Hello, my name is Ilyan Ferrer. I am an immigrant, settler and assistant professor in the Faculty of Social Work here at the University of Calgary. My work incorporates intersectionality, oral history and anti-oppressive social work theory and practice.
2138 I’m also a primary and co-investigator for several social sciences and humanities research council (SSHRC) grants, and engage in capacity building within the Filipino-Canadian and Southeast Asian diaspora.
2139 Finally, I've engaged in digital story tellings with organizations such as CKUT 90.3 FM, CJSW 90.9 FM, and the Alzheimer's Society of Calgary and StoryCentre Canada. Thank you.
2140 MR. DE SILVA: Good morning, my name is Paul de Silva. I'm the Program Director of ICTV. I’ve had extensive experience workings for media, in all areas of media broadcasting, for government, educational and community organizations in the area of communications, multi-platform media production, inter- cultural communication, and new project development, as well as designing and implementing media/communication initiatives with diverse stakeholders.
2141 I have extensive strategic planning, communications and teaching experience in all traditional and new media digital formats.
2142 I’ve worked as a reporter, a news reporter, for the CBC in Western Canada and Toronto, and then executive producer in news and current affairs programming at the CBC.
2143 I have been the head of an independent production company and I most recently served as the vice-president of programming at Vision TV.
2144 I’ve also been a communications consultant to the United Nations Environment Program working in New York and Nairobi, Kenya.
2145 I currently teach in the Ryerson School of Media and at the Toronto Film school.
2146 MR. VALENCIA: Bonjour, Buenos Dias, good morning. My name is Rufo Valencia and I’m in the country since 1986, and I’ve lived almost 20 years of my life under a dictatorship, and I’ve been dedicating my life after that to work in media because I’ve seen the impact media has in societies. One has just to look at Fox TV or Global TV in Brazil to understand what I mean.
2147 I’ve been a member of the Board of Directors of the NCRA. I’ve been a founding member of APOMI, an organization in Montreal dedicated to the settlement of newcomers into the country.
2148 And I’m currently the news director for this organization. It’s public. And the idea behind all of that is that every year we have a quarter-of-a-million Canadians come in and information will make them citizens.
2149 Independent Community Television, (ICTV), is a not-for-profit that represents the collective interests of third-language and indigenous communities and their organizations in the field of advocacy for community run television in Canada and Quebec.
2150 In 2013, ICTV launched a project to licence a not-for-profit multicultural, multilingual community television station to serve the island of Montreal. Since then ICTV has expanded its board of directors nationally to represent diverse sectors of society and is composed of some of the most prominent community leaders, media makers, and organizers in Canada and Quebec.
2151 You meet half of our Board of Directors today, leaders in their communities and fields, but those who are absent are also as stellar in their credentials.
2152 Les services que nous proposons, TELE1 et TELE2... pardon.
2153 Mme FARAJ: Donc, les services que nous proposons, TELE1 et TELE2 répondent aux attentes de la Commission définies dans l’Avis de consultation de télédiffusion CRTC consultation de télédiffusion CRTC 2018-127, et les dépasse même.
2154 Plus spécifiquement, nos services vont répondre aux besoins exceptionnels d’un service de télévision nationale multiethnique qui offre aux Canadiennes et aux Canadiens une programmation incluant les nouvelles et l’information dans de multiples langues à partir d’une perspective canadienne.
2155 MS. LUDSKI: ICTV's proposal fulfils and surpasses the criteria in the Notice for an exceptional contribution. The proposed programming of our service will contribute in an exceptional manner to objectives of the Act by:
2156 (a) solidifying Canadian identity and communal social cohesion and understanding by airing news from the perspective of Canada's diverse communities in the two official languages.
2157 (b) strengthening cultural sovereignty by creating a local news source in third languages, thereby attracting ethnic and linguistic minorities away from foreign news providers and fake news.
2158 (c) reflecting ethno-cultural diversity by airing programming representing over 45 cultures and languages.
2159 (d) including the special place of Indigenous peoples in Canadian society; by airing 5‑hours of Indigenous language programming, creating cross-cultural programming that introduces new immigrant communities to Indigenous, Inuit and Métis Nations and their realities, and by prioritizing their stories in the news programming, and by committing to employment equity for members of these nations.
2160 (e) ensuring service to and the reflection and portrayal of persons with disabilities by airing current affairs programming dealing with the realities of persons of diverse backgrounds living with disabilities, and by committing to equitable employment targets.
2161 (f) reflecting the linguistic duality of the country by airing news, children's programming, drama, fiction, documentaries and current affairs in both official languages.
2162 MR. GAGNON: ICTV will leverage the expertise of its representative Board of Directors, Advisory Board and staff, to mobilize the vibrant video production networks and television broadcasting experiences within third language, visible minority and Indigenous communities, and those living with disabilities to deliver innovative original multilingual television programming produced by, for, and about, our communities.
2163 MR. DESILVA: ICTV's Board of Directors, Advisory and Staff have decades of combined expertise in media, equity, finance, and community advocacy. ICTV's Board of Directors has been designed to reflect the diverse communities TELE1 and TELE2 are expected to serve.
2164 The Board of Directors has seats reserved by nine constituencies: Europe & Quebec, Central & South America, Caribbean & Africa, North Africa & West Asia, South Asia, East Asia, South East Asia, Indigenous Peoples and Disability Communities. After licensing and as the station's operations expand on the ground, the Board of Directors will strive to have more equitable representation from Canada's regions -- currently, four provinces are represented -- and will maintain gender parity.
2165 MR. MAROUF: Mohamed? Mohamed, can you read? It's still off.
2166 MR. FAHMY: I'm having some technical issues. I will pass and read on the next one. Thank you.
2167 MR. MAROUF: ICTV's Advisory Board is designed to ensure the organization achieves educational and audience engagement goals, financial sustainability, and regulatory compliance. Members of the Advisory Board have decades of experience in communications governance and large budget management. Some also bring extensive professional networks from the industry, academia and journalism, as well as a vast knowledge of related laws, broadcasting regulations and policies. Ilyan?
2168 MR. FERRIER: ICTV believes the balance of ethnic and Indigenous media producers and community campaigners with finance and regulatory experts provides a representative and accountable not‑for‑profit governance model. Our Board of Directors and Advisory Board are committed to supporting ICTV to:
2169 (a) deliver high quality multilingual television programming by ethnic and Indigenous producers for all Canadians; (b) provide a competitive national news service offering self-representation for underrepresented views; (c) broadcast ground breaking, original, Canadian-produced children and drama programming by and for visible minorities, Indigenous Peoples, and those living with disabilities and; (d) achieve ICTV's educational and audience engagement mandates.
2170 M. VALENCIA: TÉLÉ1 diffusera une programmation offrant la haute représentation aux communautés de langues tierces, ainsi pourra comme leader national sur le marché des nouvelles en présentant l’information de la partie de la perspective de ces communautés, de ces communautés sous représentées ou mal représentées.
2171 TÉLÉ1 présentera aussi une programmation pour enfants, des musiques, des téléromans, des documentaires, des fictions et d’art et des spectacles donnés tous par les minorités visibles, leur patrimoine, leur réalité, leur perspective et (inaudible) aussi leurs intérêts et préoccupations.
2172 Our envisioned programming is internationally marketable, internationally fundable, and internationally competitive, as verified by MCE report.
2173 MR. DESILVA: Similarly, our envisioned children's programming, coupling the internationally recognized Montreal expertise in animation production with the best of international cultural expression, will become an international export and a flagship for both ICTV and Canada. ICTV's programming vision will bring in the funds, but more importantly, it will provide children of diverse backgrounds with a positive and reflective image that will help with their growth and that of Canadian society as a whole.
2174 For the evening hours, ICTV is envisioning a mix of reality TV, documentary, comedy, drama, fiction and music. Our content will be attractive to all Canadian and Québécois audiences, while being reflective of racialized communities and third language communities.
2175 MR. MAROUF: Ruben?
2176 M. JIMENEZ: Moi, j’ai pas la version finale du document. Je suis désolé.
2177 MS. LUDSKI: Our proposed music block will finally provide a platform of distribution for all the music performances filmed in the tens of festivals across Canada that celebrate our diversity, while providing a stage for the vibrant local ethnic music scenes. ICTV will work with festival organizers to sign rights to film and distribute the performances, while creating original programming that celebrates local talent and introduces the artists to national audiences.
2178 In addition, TELE1 will also air programming in Indigenous languages and daily English and French news programming that will prioritize stories from the perspective of Indigenous Peoples, visible minorities, people living with disabilities, and women, giving the wider Canadian and Québécois population access to information and perspectives currently unavailable or underrepresented on Canadian television.
2179 Finally, TELE1 will feature cross-cultural exchange programming in multiple languages that promotes understanding between Indigenous Peoples and new immigrant communities.
2181 MS. CHEW: ICTV's vision is supported by Academics and Community organizations. This is crucial to our plan to create a sustainable reality for video production in our communities, as well as for the sustainability of our proposed services long after the subscriber fees cease to provide adequate funding.
2182 At their 2018 Annual General Meeting during the Congress of Social Sciences and Humanities, the members of the Canadian Communication Association (CCA), Canada's leading scholarly association for academics and other researchers working in media and communication studies, journalism, and cultural studies, voted unanimously to support ICTV's vision for a national, non‑profit, multilingual, multi-ethnic television station.
2183 Mme FARAJ: TVCI a également reçu des lettres d’intention de partenaires, de partenariats futurs de la part de doyens et doyennes, directeurs, directrices des principaux départements de communication et de journalisme au Canada et au Québec, notamment l’Université du Québec à Montréal, le docteur Gaby Hsab, doyen de la Faculté de communication; de l’Université de Montréal, le docteur Chantal Benoit-Barné, responsable des programmes en D.E.S.S. en journalisme; l’Université York, le docteur David Skinner, chef du Département d’études en communication; Université d’Ottawa, le docteur Terrion, chef suppléant du département des Communications; l’Université Ryerson, docteur Malik, directrice des études supérieures, École de journalisme; l’Université Cape Breton, docteur Felix Odarley-Wellington; le Collège Sheridan, docteur Kathleen Cummins; l’Université d’Ottawa, le docteur Boulou Ebanda de B’béri.
2184 En plus, nous avons obtenu aussi des lettres de soutien en provenance de différents chercheurs et chercheuses académiques dans le domaine.
2185 Avec l’aide de nos partenaires académiques, TVCI offrira aux éventuels étudiants et étudiantes des occasions de formation et des stages payants menant à des emplois stables pour une production créative. Cette actualisation du talent créera à son tour un cycle de production de vidéos sains et durables et commercialisera nos produits. À long terme, ce flou – « ce flou! » – ce flux <rires> de postulants et de postulantes, de candidats en fait, alimentera la durabilité de la vision et de la licence de TVCI.
2186 MR. FEERER: Similarly, ICTV received support from a host of community organizations, artists, and directors, and producers from across the country. These included media and arts organizations, ethnic and cultural groups, as well as human rights organizations, funds and foundations.
2187 This support and the relationships we intend to nurture directly with the communities that require the access and reflection, will create a sense of ownership in our communities. Our efforts in programming, education and community partners -- partnership will also be topped-off with innovative engagement initiatives to solidify the synergy with the viewers and the communities serviced.
2188 MR. KHAN: Par exemple, le projet Club des spectateurs et spectatrices de TVCI fournira aux communautés des canaux pour interagir avec nos équipes de production, avoir accès à nos prises de décision, soigner la fidélité à nos services. De la même façon, notre intention de consulter les communautés et leurs organisations représentantes (phon.) pour siéger au Conseil d’administration et au Conseil consultatif amènera des relations durables et dynamiques entre TVCI et nos diverses communautés.
2189 MR. MAROUF: ICTV will not leave any rock unturned in our pursuit of sustainable and alternative funding to subscriber fees. We will tap into all possible funding avenues, educational, employment, culture, arts, news, locally, provincially and internationally. At and -- while at this time, nurturing a new age of philanthropy within our audiences and communities, we aim to give access and reflection. Mohamad?
2190 MS. LUDSKI: I’ll step in here, Mohammad.
2191 Our viewers and communities will ---
2192 MR. FAHMY: Yes, please. Thank you. Sorry, I’m having issues with my incoming.
2193 MS. LUDSKI: No problem.
2194 Our viewers and communities will deliver on a healthy stream of donations for our "Viewer Supported" programming model. We predict this support because ICTV will deliver unique and innovative programming, including ground-breaking daily news in the official languages that reflects realities of diverse communities; and because ICTV will embed itself in the community and invest time and effort in building sustainable environments for educational, employment, and creative production opportunities. And we will do all of this while providing financial transparency, and not-for-profit democratic representation.
2195 MR. MAROUF: Currently, millions of Canadians subscribe to, or they donate to, alternative sources of information, locally, nationally and internationally. At the same time, ethnic and linguistic minorities are also subscribing to services in pursuit of representation, including sometimes paying tens of dollars to receive one specialty channel distributed by their BDU.
2196 This is why ICTV's programming and services, made available online through live-streaming and archived video packages, will attract viewer loyalty nationally and internationally; and in turn, the donations of dollars.
2197 We have kept our financial projections very conservative. The donations stream, along with our other diversified and innovative funding streams, will bring close to $6 million by our seventh year of licensing. This includes our projections for subsidies, profits from syndication and international sales of our content, income from production and distribution services that we will be offering, as well as subscriptions to our one of a kind online video streaming service.
2198 MR. DESILVA: Over the decades, Canadian artists of diverse backgrounds produced hundreds of productions for television and cinema. Typically, these productions run their course through the festival circuit before they are shelved to never be seen again. ICTV will work towards acquiring the rights to globally distribute this content online, to populate and launch our online streaming service, and bring back to life all this valuable content, before beginning to purchase original content to grow the service.
2199 Presently there’s a huge library of content that is not being accessed and that has been supported by public funding, that cannot be seen by anybody.
2200 The content on our streaming service will be unique to any of our on-air content and will also be available by subscription only.
2201 MS. FARAJ: Le plan financier et les projections de ICTV sont novateurs. De plus, tous les plans financiers qui se font concurrence aujourd'hui devant le CRTC, les plans financiers de ICTV sont les seuls à avoir été examinés, vérifiés et approuvés par un cabinet de consultants indépendant, engagé par une institution financière respectée dont le seul intérêt est le rendement garanti des prêts.
2202 Aussi, par rapport à tous les autres demandeurs de licence dans cette procédure, ICTV est le seul organisme à bus non lucratif, ce qui signifie que nous sommes les seuls à avoir eu à demander, à aller chercher un financement provisoire indépendant pour démontrer à la Commission que nous pouvons lancer nos services une fois la licence octroyée avant l’arrivée des revenus d’abonnement.
2203 THE SECRETARY: I’m sorry, this is the hearing secretary. I’m sorry to interrupt. We’re going to have to ask you to conclude. It’s been way over the 20 minutes.
2204 MR. MAROUF: This includes the delay in the beginning? Okay.
2205 Okay. So maybe we jump to paragraph 40 -- no, 54.
2206 In today's proceedings, the Commission has the chance to provide a solution to the exclusion of racial and third-language communities within the media. Currently, the CRTC has 8 9(1)h licenses each run by a not for profit. We are advocating that the CRTC follows its standards, and license the only not-for-profit applicant in these proceedings, ICTV.
2207 We firmly believe that is the only outcome that can uphold the guaranteed rights of minorities to own and control reflective media. This guarantees racialized communities and third language communities, independent access to news and current affairs media. A right guaranteed in Canadian law, through the Broadcasting Act, the Multiculturalism Act, the Equity Act and the Charter of Rights and Freedoms, as well as international agreements.
2208 MS. RUFO: Given the Commission's composition currently does not reflect the racial diversity of Canada, the licensing of ICTV presents a valuable opportunity to mitigate any perception decisions by the CRTC have been influenced by corporate interests or affected by systemic racism and political bias.
2209 MS. CHEW: We thank you very much for listening to ICTV's oral presentation and for your work examining our license application prepared on behalf of our communities and our interests. We look forward to your questions and to a future where all those living in Canada can work as one, and when a media voice can be diverse enough for all of them.
2210 All for one, and TELE1 for all. Merci.
2211 LE PRÉSIDENT: Merci beaucoup. Merci pour votre présentation.
2212 Madame Simard.
2213 COMMISSIONER SIMARD: Thank you, Mr. Chairman. Bon matin, good morning. Thank you for your submission. Merci beaucoup pour votre… votre demande.
2214 So I think that the first question for you is to clarify the two services. So in your submission you refer to TELE1 and TELE2. I understand that TELE2 is planned to offer Canadian sports coverage in Indigenous and third languages. But it’s a bit unclear to me whether the same conditions of licence would apply and affording also the same wholesale rate.
2215 So could you give us a bit of details on that? Thank you.
2216 MR. MAROUF: Just to be clear, we’re not asking any fees for TELE2. We’re asking that it’s mandatory carry, but only the fees are just for TELE1. So the idea is that in the beginning TELE2 would be mirrored, but with west coast versus east coast standard, you know, Easter Standard Time versus Pacific Time. With rearranged programming to -- for the community spots. So they would air at different hours.
2217 And as the programming solidifies, our programming cycle solidifies, we’ll start opening more spaces for communities that didn’t have a spot in TELE1.
2218 Specifically, Indigenous communities with Indigenous languages from the West Coast, and by Year 5, when we -- the programming is much more solid, our production cycle, we will start thinking about how can we make sure that the drama programming is different, invest more drama programming for Tele2.
2219 So again, Tele2 is -- you can think about it as the second feed for now, but eventually the aim is to have it to have distinct programming.
2220 COMMISSIONER SIMARD: And it will not be limited to sports?
2221 MR. MAROUF: No.
2222 COMMISSIONER SIMARD: Thank you. That leads us, I guess, to specific questions about programming.
2223 So you mentioned that Tele1 would serve at least 45 third language and Indigenous languages combined. However, Indigenous languages are not considered to be third languages in the Ethnic Broadcasting Policy. So based on this information, how many third language groups are you proposing to serve? So in other words, if we exclude the Indigenous languages, how many languages would you be serving?
2224 MR. MAROUF: Currently, it's 42, plus 5 Indigenous; 42 third languages. And that's why it says 47, you know, third languages and Indigenous languages. They're not put -- you know, it's not -- we understand that they're a totally different category.
2225 COMMISSIONER SIMARD: So -- but it would be -- so the five Indigenous languages, which I guess leads to like 43rd language. Okay. Good. Thank you.
2226 MR. DESILVA: If I may just add, Laith, to -- if you wanted to include that the plan for Tele2, and as we develop, would be to include further third -- Aboriginal languages from the West Coast. So in our initial year, it would be the five languages, and then as we develop our infrastructures and develop our contacts, Tele2 will be able to expand the languages in the western part of Canada.
2227 MR. MAROUF: And that is also not only for Indigenous languages. So some groups, you know, we try to service as -- every community that already currently has a service, let's say with OMNI, to make sure none of them lose service. And that's why it has so many of them. But for sure, there is some other communities that don't have and will not have service in the beginning, and hopefully as we -- our infrastructure solidifies, we can start opening spots on Tele2 for the other ethnic communities that don't have.
2228 COMMISSIONER SIMARD: Thank you. And how would you do that? Because I'm trying to figure out how you would prioritize, like the choices of programs based on the high number of -- high amount, I guess, high number of languages. So how would you do that in practice?
2229 MR. MAROUF: Well, what we did now is we took -- we looked at two things: one is the census, so the top languages, and that's what it follows; and the second was communities that are currently receiving service at OMNI.
2230 So there's, I think, one or two of the ethnic communities or linguistic communities that we have in our list as -- to service that are not in order of their census, but because they have all of these services at OMNI it was necessary to make sure that they don't lose service.
2231 And in the future, when we open the door for more, basically it's either we're going to follow the same, the census priority, and/or the community that is requesting it. So -- and we will know that more when we are -- you know, offices are set and we are on the ground with every community and we can then figure where those communities that really need service and are ready to use it.
2232 COMMISSIONER SIMARD: In your submission and in your presentation, you referred to, like the news service that you would be offering. So I'm curious to -- I guess I'm curious and I would like more information about how it would work, again, in terms of priority of -- within the schedule.
2233 MR. DESILVA: Laith -- just in terms of the interest of time, Madam Commissioner, the schedule that we have provided lists clearly in terms of each of the days of the week. For instance, on Monday, the Sinhalese, the Amharic, Creole, Bengali, Telugu, Somali, Japanese, et cetera. I just refer to that from our schedule. So it's very clearly laid out in the schedule which languages will be prioritized and at what times, in addition to other lesser spoken languages, as Laith referred to in the census, we have in our block on Sunday.
2234 So I think rather than reading that, which would put everybody to sleep, in terms of how long is the list, but it is very, very clearly laid out in our program schedule.
2235 COMMISSIONER SIMARD: Thank you. In your application, you proposed to broadcast levels of 100 percent for ethnic programming and 50 percent for third language programming. In light of other applicants proposing third language exhibition levels that exceed the 50 percent you proposed, I would be interested to know why the CRTC should consider your proposed amount of third language programming as an exceptional contribution to the Canadian Broadcasting System for a multilingual, multi-ethnic discretionary service benefitting from mandatory distribution.
2236 MR. MAROUF: Well, two things you should consider. One of them is that when we're calculating our numbers, we're calculating on a 24‑hour cycle. Most of the other applicants are claiming those percentages by cutting off at midnight and not counting what's after midnight, midnight to 6:00 a.m. So if you do that to us, definitely the percentages will go higher.
2237 But more importantly for us is the issue of the priority for the ethnic visible minority communities, religious and linguistic and ethnic, who are living the reality of a heightened xenophobia where integration and immigration are the top issue in all our news and our politics. And absent in all of this discussion, as we saw in the elections in Québec and in Ontario, is a voice for these communities that are unrepresented for them to present their story, their opinions, their values, their reality to the rest of the Canadian public.
2238 And because we have that acute sense, knowing that our youth are going astray on Internet because they can't find reflection in the mainstream media here in Canada, and falling into the problems that arise from that, we are -- believe that the priority for our community is to have news in English and in French representing our realities to the Canadian public. Anything else will just add to our (indiscernible). Any programming that is just about the ethnic group with its own language may provide a fig leaf for the Canadian media system to say that it has some diversity, but it actually will just push those communities to another corner.
2239 MR. DESILVA: May I ---
2240 MS. CHEW: I want just to reaffirm what Laith said very, very strongly.
2241 M. QUINTANA: Si je peux me permettre aussi de mon côté, c’est très important à la diversité. Dans les langues officielles et qu’on doit tous parler pour pouvoir trouver de l’emploi, travailler dans la fonction publique, participer à la société comme citoyens à cent pour cent, et éviter justement, comme M. Marouf l’a indiqué, de ghettoïser les communautés qui vont faire une émission en espagnol ou même en arabe, une émission en tagalog, et vont attirer seulement ces communautés-là et les gens de la majorité linguistique ne connaitront pas la réalité que nos communautés vivent. Alors, c'est très important de ce point-là, et démontrer aussi au reste du Canada que les néo, les gens qui viennent d’ailleurs, on veut s’intégrer dans ce pays dans les deux langues officielles.
2242 MR. DESILVA: May I just add a short point to that because this is a very core part of our application, Madam Commissioner, because there's so little research in terms of, you know, hard data about this. Recently the research done by Professor Jeffrey Reitz and Rupa Banerjee at the University of Toronto has really identified how important this issue of disassociation by second and third generation Canadians and the resulting lack of social cohesion potential here. So I think this is research that it was -- should be available and is available.
2243 Part of my PhD research was looking into this very subject, so I feel quite passionately about this. And I think to reinforce Laith's point as well is this is we are very much focussed on this issue of interracial cohesion in terms of how we deliver our programming.
2244 COMMISSIONER SIMARD: Thank you.
2245 MR. VALENCIA: Rufo Valencia. I'd like to add to this just this point of consideration. What you hear -- when you look at the offer that the various communities have, look just at what packages the large companies offer. They offer packages that they -- if you are form southeast Asia you will have a package from southeast Asia. If you are Latino you have your package from Latin America. But that offer, that idea of journalistic application isolates us so you will not know why Duterte was elected in the Philippines when you have the largest language in the west of the country is the Tagalog. You would not understand why Honduran people are coming if we only speak to ourselves because it is necessary to break that. And that, unfortunately, can't be done from a point of view of a non-profit, because if I were seated here offering you this plan, I have to look for my investors. I have to make money. And these communities are money makers for me, not citizens. And that is a crucial importance in this endeavour.
2246 COMMISSIONER SIMARD: Thank you very much.
2247 So I'm hearing, you know, you and I think it's important to hear, like, the key components of your model. At the same time, I have specific question and it is important to have the answers for the record. So I'll get back to the specific question of the 50 per cent of the programming in third languages.
2248 So I just want to better understand. So if -- you just mentioned that the amount that you put forward does not consider the programs broadcast after midnight, so I understand then this number would be high, but which are the other languages I guess that -- is it French and English for the other part?
2249 MR. MAROUF: Okay. So there's two things. One is that we will be -- what we gave the CRTC the -- when we were asked about the language of other programming we created the grid of the languages of the programming. We made it clear that at least 50 per cent of the programming is mixed language; okay?
2250 So when you're going to have a children's show that is going to be say in Spanish and English or Spanish and French, you can't quantify the amount of minutes until the end of the broadcast season.
2251 So this is what we said in the grid. We're committing to a minimum of 50 per cent or 49 -- sorry, 50 per cent of third languages, but we have a huge section of our programming that is already impossible to identify right now, but we know will be multilingual, including the music. So it's impossible for me now to know is -- in the music block we're going to have an Indigenous music block, let's say, and the Indigenous musician comes and he's going to perform it in English and/or in French and/or in his Indigenous language. We can't enter it in the logs until it happens.
2252 So that's partially where -- why -- in reality, we'll be much, much higher than the 50 per cent, but we're committing only to 50 per cent because a huge bulk of the -- our programming is actually mixed languages and can only be identified by the end of the year.
2253 COMMISSIONER SIMARD: Thank you.
2254 And I would like to have more information about what you just said. Like, the -- somehow refer to the fragmentation of audiences because your proposal is based on so, like, many languages for the third language -- so it's 43rd languages. How would you ensure there's no issue with the fragmentation?
2255 M. VALENCIA: Donc, l’idée sera, de cette initiative, cette proposition, c’est d’utiliser un outil média pour tisser des rapports entre ces diversités, c'est-à-dire que si vous voyez, par exemple, je vais vous faire le test, si vous avez une seule Hondurienne parler dans les nouvelles sur ce qui arrive dans leur pays en ce moment, j’ai pas… j’ai fait la recherche, j’ai pas trouvé une seule personne, et lorsqu’il y a des journalistes de la diversité, ils sont appelés en ondes… si je suis mexicain, si y’a un tremblement de terre, on m’appelle, mais on m’appellera jamais pour me prononcer sur la question, par exemple, de la politique québécoise en matière de… en matière d’éducation par exemple.
2256 Donc, ce que je veux dire, c’est… c'est que cette… c’est que nous sommes les seuls à proposer de supprimer ces barrières qui sont créées commercialement, elles sont viables, parce que si j’offre seulement du contenu pour une communauté, c'est sûr qu’ils vont payer, mais ceux qui n’auront pas la voix pour engager des autres communautés, et vous savez aussi, si vous suivez Facebook et tous les débats qu’il y autour de cette question, que nous sommes de plus en plus dans des microcosmes, des bulles où les gens ne se parlent pas.
2257 Donc, je ne sais pas qu’est-ce qui arrive dans telle autre ou telle région, et si… s’il s’agit, si le média, son devoir fondamental, c'est de créer pas autant d’acheteurs, mais plutôt des citoyens, il faut que ces communautés se parlent, se connaissent, et c’est pour ça qu’aussi que… si vous vivez à Toronto, à Montréal, à Vancouver, dans n’importe… toutes les villes, les gens ne vivent pas dans une seule langue, leur quotidien se déroule dans deux, trois, quatre langues. Ici même dans cette table, vous pouvez voir ça.
2258 Donc, (inaudible), c’est que les gens puissent… des nouvelles, puissent interagir dans les grands discours de nouvelles au Canada.
2259 CONSEILLÈRE SIMARD: Oui, je vous interromps. On parle de 40 langues tierces, y’a une grille horaire, alors comment on s’assurer qu’il n’y ait pas une trop grande fragmentation des audiences?
2260 M. VALENCIA: Bon…
2261 CONSEILLÈRE SIMARD: Du point de vue vraiment pragmatique de la grille horaire?
2262 MR. MAROUF: So I think the most important thing about our schedule is the anchoring of English and French programming that is communal for everybody. So at the beginning of the day, the children's programming, the news in English and French in the beginning and the end of the day and the drama, fiction and comedy, reality television, all of that that's going to be program.
2263 So if you notice our grid, the community spots, as we're calling them, that are small, half hour or one-hour shows are all put in during the day hours and they'll be available on our website.
2264 So because the primary thing is what we have enveloped the station with, which is this anchoring of the official languages, content that is going to be attractive to our communities, representing their views, and also attractive to Canadians who are looking for the different point of view in the news, for diverse children's and drama programming.
2265 COMMISSIONER SIMARD: Thank you.
2266 Your conditions of license commit to 100 Canadian broadcasting in the evening and day. So I would like to have some clarification on that. Could you please confirm whether your commitment is to 100 Canadian programming or 100 per cent first run Canadian programming?
2267 MR. MAROUF: One hundred per cent Canadian programming. Okay.
2268 COMMISSIONER SIMARD: Thank you.
2269 The Commission, the CRTC notes that these commitments are very ambitious. We're trying to figure out based on the current resources then that you have and the experience the members of your team. How can you achieve those commitments?
2270 MR. PAUL DESILVA: I think, certainly in the first year of programming, there’s no doubt it will be a challenge to do that, as with any ramp of program.
2271 But I think as you referenced, Madame Commissioner, the expertise and the experience certainly of the online, for instance, Laith, you can elaborate on that in terms of what you’ve been doing, in terms of reaching a wide diversity of audiences.
2272 Also, the networks that we have set up across the country, in terms of the contributions by people in each of the individual channels or existing channels for instance.
2273 Just as an example in my role as head of programming in Vision TV; we had a network of people across the country who would contribute programming both in terms of multi-cultural, multi-lingual as well as in religious programming.
2274 So all of that is, I think, imminently doable. I think we should also reference to the fact that in our request in terms of our subscriber fee, we have adequately planed for financial remuneration for each of these people, in terms of the contributions.
2275 And one of the issues is that in the past, with multi-lingual programming, where the programmers have being required to raise money themselves for their programming.
2276 I was often approached by producers, as I said, when I was at Vision TV, who were desperate because they could not raise advertising revenue for their programs.
2277 We have dealt with that in terms of our financials in order that we will be paying them directly, so there’s an incentive to make that happen rather than for them to have to scramble to find advertising from small business people in their community.
2278 So all of that, I think, is there’s no question it’ll be a challenge doing that certainly in the first year, but I think we provided for that in our plan both financially and both in terms of the contacts we’ve already established.
2279 COMMISSIONER CAROLINE SIMARD: Thank you. Earlier, you gave us some explanation and description of the services of Tele-Two. For the record, could you confirm how Tele-two would contribute to the objectives of the broadcasting act?
2280 MR. LAITH MAROUF: So Tele-Two will fill all the gaps that will be left by Tele-One.
2281 Currently, just to give you the model that we’re trying to move by, the francophone community in Canada required cultural and promotion, and therefore were licenced Télé 5, and that was not enough to satisfy all that diversity within this 20% of the population.
2282 And therefore, Uni was licenced. And there was a little bit of a different niche that’s given to it.
2283 In this situation, we’re talking about 27% of the population. That’s the visible minorities, the multi-ethnic and multi-linguistic communities, 21% plus the Indigenous community 5%, so we’re talking about the same percentage of population, around the 20-somewhat percent.
2284 And so, it’s... and giving that actually there is not even commercial... A lot of commercial channels that are not subscriber fees for these communities, it makes sense, that it’s impossible to service everybody, and satisfied the needs and wants of programming that these communities have in one station.
2285 We will try to do this with two stations for the price of one. We’re not asking for a fee for the second one, we just want to make sure that there is space for growth, because we already know that we jammed this schedule to make space for those who want space and have some space now at OMNI, so imagining opening the door for everybody.
2286 And this is a very limited space right now we have and we can do anything without Tele-Two to grow, too.
2287 MR. PAUL DESILVA: Just a very quick comment, if I may, Madame Commissioner.
2288 COMMISSIONER CAROLINE SIMARD: Yes.
2289 MR. PAUL DESILVA: As you know, one of the challenges in broadcasting is shelf space in primetime.
2290 And, because of that with Tele-Two, we will have the opportunity to shift programming as needed, as expressed by the communities, because they will be direct feedback from the communities in terms of what times are most appropriate, and to also present some programming that may be on, you know, off times on Tele-One onto primetime on Tele-Two.
2291 COMMISSIONER CAROLINE SIMARD: Thank you.
2292 At this point, it is my understanding that Tele-One and Tele-Two are very similar in terms, like, it’s more a question of the time, like the... your Tele-Two will be used to, I guess, as, once Tele-One will be kind of, will... “aura atteint sa pleine maturité.”
2293 Sorry, I’m trying to kind of translate that, so I guess that will be fully kind of...
2294 MS. ZOE LUDSKI: Mature.
2295 COMMISSIONER CAROLIEN SIMARD: Mature, yes. So and the, so both, like, it is the same rational to say that both will, like, contribute to the objectives to the broadcasting act and merit mandatory distribution.
2296 Is that correct?
2297 MR. LAITH MAROUF: They will and they’ll surpass it. I will add one more thing.
2298 We are envisioning a lot of live programming, whether it’s, you know, going to the festivals and events of the communities, and/or live elections coverage, and so forth. And that will stay on Tele-One.
2299 And so, that live programming, when it disrupts programming on Tele-One, it will not disrupt it on Tele-Two. The consumer, the viewer, the community will still be able to watch their Japanese show while there’s a live coverage of election happening on Tele-One.
2300 COMMISSIONER CAROLIEN SIMARD: Thank you. I have a very specific question for Tele Two Sports service.
2301 How realistic is it that you will be able to secure the rights to broadcasting mainstream sports on your service at the time of launch?
2302 MR. PAUL DESILVA: The, in terms of serving the ethnic communities, in terms of their particular interests in sports, you know, which are generally non-hockey, but very possible we will, but certainly establishing relations with, for instance, cricket, which is huge, soccer, rugby, all those sports that are particularly interested, you know, in multi, new immigrant communities, we believe are very affordable.
2303 In fact, there are so many offers, I recently did a survey of sports in terms of the Caribbean, in terms of the output, that we believe that’s certainly in our first year, we’d be able to very fully service that.
2304 And you know, there is more content available than there is adequate outlets for.
2305 COMMISSIONER CAROLINE SIMARD: But how realistic is it that you will be able to secure the rights to broadcast mainstream sports?
2306 MR. PAUL DESILVA: Well, it will be a matter of negotiation, obviously, and what our competition is, but I think it all goes down, you know, Madame Commissioner, in terms of what the other market is offering and what is available.
2307 And also, in terms of what the communities want at the time. Certainly the growing popularity of soccer and of cricket in our communities makes it challenging, you know, in terms of what can we offer competing with sports networks and ESPN.
2308 But I think the reality will be that, one what we have to offer financially, and what our negotiating skills are, and what is, what else is on offer from the other networks.
2309 I hope that answers some of your questions.
2310 COMMISSIONER CAROLINE SIMARD: Yes, very well, thank you.
2311 You sent a letter to the Commission in September 2018, where you stated that the staffing structure outside Montreal will be skeleton freelance, until the year five (5) of licensing, when ICTV will lease local offices outside Montreal.
2312 So given that one of the criteria set out in the call for applications was that the proposed service has to be relevant to Canadians across all provinces and territories in the country, could you please explain how your service would accomplish this from the outset?
2313 MR. LAITH MAROUF: So just to be clear, we will be broadcasting nationally, we will have our news staff that are not hired in the beginning as full staff, but as -- what’s the name? The name for it? Freelance. In the major population centres, and they will be feeding in -- Maybe Ruffo can speak a little bit more about how the news will and so on. But they will be feeding in hard category one news from their -- from across the country into the national news broadcast that we will have. But maybe Rufo can speak to it a little.
2314 MR. DESILVA: Just if I understand the question correctly, Madam Simard, our initial plan is on licencing, to do a very major cross-country program to identify people, which we already have. But to hold meetings in each of like almost a town hall kind of meeting, which I have participated in on a number of occasions on different projects with the CBC.
2315 So there are models for this, in terms of making them aware of what we do, eliciting responses in terms of who might be interested in doing that, and essentially establishing satellite programming modules in each of the communities, right? So that will be an initial way of getting programming.
2316 And then as it rolls out, as Laith has explained, in terms of financials, is eventually creating actually production centres in each of these -- each of these communities across the country. If that clarifies. Rufo, you may have something to add to that.
2317 COMMISSIONER SIMARD: Thank you.
2318 In your application you commit to other types of independent programming, other than news and information programming. For example, and you just mentioned it, that you would -- yes, I think in your presentation, or maybe in your submission, that you would commission children’s programming, as well as drama by independent producers. Would you be willing to have these commitments imposed as conditions of licence? If so, what minimum thresholds would you commit to?
2319 MR. MAROUF: We are amicable to any conditions that the CRTC would want to put. We’re here to deliver on the mandate that the CRTC chooses. I don’t have in front of me -- I mean, it is somewhere here in front of me, but I -- you know. Whatever conditions that the CRTC may choose and/or ask now as an undertaking to do, would need to just, you know, take into account the fact that the majority of the programming grid is actually the news, information, and community spots.
2320 So really, there’s just a very small wiggle space for the children’s and the drama, and that’s why the hopes of TELE2 growth will give us more space for those things. But so, whatever those spaces are, we’re willing to commit to that being the independent production. There’s no maximum.
2321 COMMISSIONER SIMARD: Good. So just to be clear, you agree that a condition of licence be imposed to you for actually, like the minimum threshold, it’s not clear to me what would -- is your agreement for this condition of licence.
2322 MR. MAROUF: I can’t throw out a number right now.
2323 COMMISSIONER SIMARD: Okay.
2324 MR. MAROUF: I would come back to you if you want with an undertaking.
2325 COMMISSIONER SIMARD: Yes, that would be fine, thank you.
2326 UNDERTAKING / ENGAGEMENT
2327 MR. MAROUF: Because this way I can calculate the ---
2328 COMMISSIONER SIMARD: Good. Thank you very much.
2329 MR. DESILVA: Yeah. Just if I may, to add, we would welcome a condition of licence on that. Because one of the things we are aware of, Madam Commissioner, is a huge pent up demand, if you will, or a desire by producers, independent producers across this country to produce drama programming, content that currently has no place for broadcast in the system in prime-time areas.
2330 And particularly, that I also want to stress that in our group we have expertise being able to access the funding through, for instance, Telefilm, the Canadian Media Fund, and other sources of funding to produce that programming. So we have within our organization, the expertise in terms of working with independent producers to create this -- a high level or high production value content.
2331 COMMISSIONER SIMARD: Thank you.
2332 The next question is very specific to conditions of licence number 6 and 7, which seems to be written the same way. So I have like, here the wording. So condition of licence number 6 states:
2333 “Would produce and broadcast daily national 30 minute newscasts, seven days per week, in each of the Italian, Mandarin, Cantonese, and Punjabi languages.”
2334 And then 10 other languages are mentioned in brackets, including the four languages previously mentioned. So it seems that condition 7 is written the same.
2335 So could you please confirm the number of newscasts and current affairs shows you are committing to weekly -- you are committing I guess, to broadcast weekly and in which languages they will be broadcast?
2336 MS. LUDSKI: I’ll just take a moment to do some math.
2337 COMMISSIONER SIMARD: Thank you.
2338 MR. MAROUF: We’re committing to broadcasting in six third languages, daily half hour news, and daily -- sorry, that’s seven days a week. Six languages, half an hour, seven days a week. And half an hour in those same six languages of current affairs five days a week.
2339 COMMISSIONER SIMARD: Just for you, I think it would be better if you could just provide us the information with an undertaking.
2340 MR. MAROUF: In and undertaking?
2341 COMMISSIONER SIMARD: Yes, please. Before December 6th.
2342 UNDERTAKING / ENGAGEMENT
2343 MR. MAROUF: Yes.
2344 MR. DESILVA: Just to point out, in our grid again, Madam Commissioner, it’s clear the languages of Punjabi, Arabic, German, Spanish, Mandarin, Italian, Tagalog, and Cantonese will be across the schedule five days, Monday to Friday. And on Sunday there will be the Afro-Caribbean current events programming.
2345 COMMISSIONER SIMARD: Thank you.
2346 MS. LUDSKI: Excuse, désolée. Could you repeat what the undertaking is so I can ---
2347 COMMISSIONER SIMARD: Counsel will do it at the end.
2348 MS. LUDSKI: Okay, Merci.
2349 COMMISSIONER SIMARD: Thank you.
2350 The next question is about the feeds. Your supplementary brief mentions that TELE1 will be ready to launch five separate regional feeds by year five, serving B.C., the Prairies, Ontario, Quebec, and the northern and eastern provinces and territories. I will need more details.
2351 So how do you intend to serve local and regional communities in year one? You have already kind of described it. If you have something else to add for the record, but from my understanding, we have already this information.
2352 MR. MAROUF: So by year five, by that point we will have our local offices in -- outside Montreal in the other regions. We will have more staffing. So what we will do is have separate feeds for the five regions that you just mentioned, and from that point on the current affairs shows in each zone, region, can be produced locally and be distinct. So the current affairs, which is gathering news basically, and that will be the covering the activities of the communities basically in their region.
2353 COMMISSIONER SIMARD: Thank you.
2354 Would you accept conditions of licence which was with respect to the operation of five regional feeds? And if so, what would be the commitments for each feed? Again, if you need time and you want to provide us with this information via an undertaking. Is it ---
2355 MR. MAROUF: We can give it as an undertaking so it will be in writing, but basically again, we will be committing to supplement the current affairs that was, you know, produced nationally into regional current affairs shows.
2356 MR. DESILVA: Just for clarification, Laith and Madam Commissioner, do you -- would you like in the undertaking to outline from year one to year five or specifically for year one?
2357 COMMISSIONER SIMARD: For all the years ---
2358 MR. DESILVA: For all the years.
2359 COMMISSIONER SIMARD: --- and for the five regional feeds.
2360 MR. DESILVA: For the five regional feeds. Okay. Thank you.
2361 COMMISSIONER SIMARD: So and the specific question, what would be the commitments for each feed.
2362 MR. DESILVA: For each feed. Okay.
2363 UNDERTAKING / ENGAGEMENT
2364 COMMISSIONER SIMARD: Could you please clarify what research or survey you -- I guess you to verify the acceptability of your proposed wholesale price to Canadians?
2365 MR. MAROUF: Well, we did compare the -- because our priority is servicing our communities and giving access and a platform to communities that are denied access and platform in the media in Canada, that was not our priority to think about what we -- you know, what money worth can we give to acts of -- for 27 per cent of the population.
2366 So what we did is we looked at the other not for profits that are licensed as 9(1)(h) licenses with the mandate to do cultural protection and promotion. And we looked at what they do currently and how much they spend on it. And currently we know that APTN is receiving 36 cents. It is producing half an hour of original news content a day.
2367 And in comparison, we will be -- the CRTC was asking for somebody to produce news content in multiple languages to reach these communities. And, therefore, it was logical that we can model as, you know, as close as possible to APTN's realities. And given that the fact that we'll be producing, you know, tens of hours of news programming a day original in comparison to APTN at 36 cents, 40 cents didn't sound -- didn't look like much. In actuality, when we were working on the finances with our funders, you know, the hardest part was convincing them that we need this much news, but we do, because nobody else is offering the services.
2368 If there was 10, 20 other ethnic stations that are available on the skinny package and everybody's watching them, it will be an argument to be made that, okay, maybe we don't need this much news and/or maybe this is too much money. But there's total exclusion and there is -- the case to catch up to of this exclusion.
2369 COMMISSIONER SIMARD: Thank you.
2370 If we go back more specifically on the wholesale rate, in your view, what is the likely impact of the proposed wholesale rate on the price of the basic package to customers and of its widespread acceptability to Canadians?
2371 MR. DESILVA: Well, my understanding is, and I'm certainly willing to be corrected, but my understanding is, is that in your call, Madam Commissioner, that the stipulation was that there would not be an increase in the basic rate, and if I'm not understanding your question correctly. That the rate for basic service would not increase regardless of what the mandatory 9(1)(h); is that correct?
2372 COMMISSIONER SIMARD: I'm referring to your proposed wholesale rate.
2373 MR. DESILVA: You mean our proposed rate of 40 cents per subscriber fee?
2374 COMMISSIONER SIMARD: Yes, that's correct.
2375 MR. DESILVA: Yeah.
2376 COMMISSIONER SIMARD: I was looking for it and I just found it, yes.
2377 MR. DESILVA: Yes.
2378 COMMISSIONER SIMARD: So could you please ---
2379 MR. DESILVA: Would you mind repeating the question, Madam?
2380 COMMISSIONER SIMARD: Yes. Could you please tell us in your view what is the likely impact of this proposed wholesale rate of 40 cents on the price of the basic package to customers and of its widespread acceptability to Canadian?
2381 MR. MAROUF: At the outset I will tell you it will affect the skinny package as much as the BDUs want it to affect the skinny package.
2382 The -- we're sitting here trying to get this license to be fixed because on the one hand, all the BDUs destroyed the community television sector and were misusing and abusing its finances for decades where our communities were excluded.
2383 We're sitting here because Rogers also misused its funding. It's taking currently a fee levy and at the same time is receiving free programming from producers that are made to pay for their productions and is asking for a fee levy on top of it.
2384 So what is happening is that there was already a misuse of funds meant to give access to our communities. We were excluded for decades. And it's the responsibilities of the BDUs, this exclusion.
2385 It is not time for them to come and tell us that there is no money for us and/or that their bottom line again will supersede our rights to access.
2386 COMMISSIONER SIMARD: Yeah, but you are aware that your proposed wholesale rate is the highest wholesale rate. So in your views is -- what would be the impact for the consumers?
2387 MR. DESILVA: I think, as Laith has also pointed out, that that is hard to gauge. There hasn't been empirical research. As you know, it costs a lot of money, one, to do that kind of thing.
2388 But we anticipate -- partly because also, you know, the things that has been mentioned is that the desire to have both this kind of individual programming that currently has -- is a charge of anywhere 5 to $10 a month for individual programming in these ethnic languages and multilingual languages; whereas, this is being offered at, you know, a rate on a specific -- on the skinny basic that is not really going to be felt by the subscriber, but is going to present a tremendous amount of service.
2389 And I think it should be said that we generally applaud the CRTC for having recognised the importance of this in calling this hearing and putting it under the category of 9(1)(h) as, for instance, APTN or Newsworld or essential services. And so we see this as being an essential service and we are very grateful, one, that you have recognised that and called for the service which has been needed for a very long time.
2390 COMMISSIONER SIMARD: Thank you.
2391 Earlier in this discussion you confirmed that your proposal is for 100 per cent of Canadian programming. I also understand that your proposed CPE is 40 per cent. Could you explain why you propose a CPE level of 40 per cent given your commitment to broadcast 100 per cent of Canadian programming?
2392 And just to be clear, when this question was drafted, the understanding was that you would -- your commitment would be for original first-run programming. So maybe, again, could you please confirm a second time that it's 100 per cent Canadian programming and not first run? I guess that's a confirmation you provided. And if so, could you just give us some clarification about this kind of second commitment for the 40 per cent -- the CPE level of 40 percent.
2393 MR. MAROUF: Can we have that in an undertaking?
2394 COMMISSIONER SIMARD: Yes, of course.
2395 MR. DESILVA: Just to clarify, Madam Commissioner. Are you using the term Canadian programming as original Canadian programming, or could that be as opposed to first run? When you say first run programming, it would be original first run programming on the station. Is that correct?
2396 COMMISSIONER SIMARD: Yes, but I understand from our previous discussion that you confirmed that when you mentioned 100 percent Canadian programming it's not first run original programming; right?
2397 MR. DESILVA: No. We ---
2398 MR. MAROUF: Just because in the first year, and if you see that the MCE Conseils Plan and the actual finances, you'll see that in the first year we have no choice -- as we are commissioning and/or starting to produce content, we have no choice but to acquire previously -- other Canadian content. So it is not -- we don't know right now if it's going to be first run or not, so I can't...
2399 So -- but know that by the time our programming stabilizes that everything on‑air will be 100 percent first run, Canadian.
2400 COMMISSIONER SIMARD: Good. Okay. So based on this clarification, is it possible for you to provide us with an undertaking to, I guess, explain your view on the fact that you propose a CPE of 40 percent? So a CPE level of 40 percent. So -- sorry. The question is could you please explain why you propose a CPE level of 40 percent given your commitment to broadcast 100 percent original first run Canadian programming? Is it clearer?
2401 MR. MAROUF: Yes. I think it's just open-ended, like not -- it's not intentional. Maybe there was a mistake. But at the same time, I -- in my mind, there is all the other overhead costs of the station. So you have 100 percent -- okay. See there's a confusion in the term.
2402 So if you'd like me to put it -- if you would like it corrected, because you are saying it's 100 percent there, it should be 100 percent, and it's 100 percent.
2403 COMMISSIONER SIMARD: Yeah, but are you -- do you agree to provide us with an undertaking to confirm, to explain ---
2404 MR. MAROUF: Yes.
2405 COMMISSIONER SIMARD: --- why you propose a CPE level of 40 percent given your commitment to broadcast 100 percent original first run Canadian programming?
2406 MR. MAROUF: Yes.
2407 COMMISSIONER SIMARD: Thank you.
2408 UNDERTAKING / ENGAGEMENT
2409 COMMISSIONER SIMARD: I understand that you provided a response to the Commission in April 2018 about the paid streaming service, and you confirmed that your paid streaming service would not commence operation until the second year that Tele1 is operating. However, in a response in September the 18th, you stated that the streaming service will only begin by Year 5 of Tele1's operations. Could you please clarify this contradictory information on timelines?
2410 MR. MAROUF: Yes. As we were working with our officers, and the MCE Conseils, we had to readjust things because of the -- their requests. And so right now on the new financial papers that you received earlier today, you could see the streaming service starting at Year 6. That's income of it.
2411 So the ---
2412 COMMISSIONER SIMARD: Just for the record ---
2413 MR. MAROUF: Yeah.
2414 COMMISSIONER SIMARD: --- and for more clarity, is it possible for you to indicate the page?
2415 MR. MAROUF: Okay. The first page of the Income Statement of ICTV. So the annex.
2416 COMMISSIONER SIMARD: Well, maybe just for the record again, because it's a bit -- so which page of ---?
2417 MR. MAROUF: The first page of the annex.
2418 COMMISSIONER SIMARD: Okay. Good. The first one?
2419 MR. MAROUF: Yes.
2420 COMMISSIONER SIMARD: The first annex?
2421 MR. MAROUF: And it says ICTV Income Statement.
2422 COMMISSIONER SIMARD: Okay.
2423 MR. MAROUF: And when you -- the fourth line is streaming services, and you see that the actual profits come in Year 6 and 7. Sorry, 5, 6, and 7. And that's basically what I answered in the second answer, as we had to adjust things according to our financers.
2424 COMMISSIONER SIMARD: Good. Thank you. So it would commence on Year 6; is that correct?
2425 MR. MAROUF: 5 ---
2426 COMMISSIONER SIMARD: 5?
2427 MR. MAROUF: --- 6, and 7 is where it's covered in this licence period.
2428 COMMISSIONER SIMARD: Okay; 5, 6, and 7. Thank you.
2429 MR. DESILVA: And just to be clear, Madam Commissioner. Did you want this in an undertaking for clarification, or is this sufficient?
2430 COMMISSIONER SIMARD: That's sufficient. Thank you.
2431 MR. DESILVA: Thank you.
2432 COMMISSIONER SIMARD: As you may know, the CRTC's logging system is set up for either 18 or 24‑hour broadcast days to verify compliance. In a response to the CRTC in September, you stated that Tele1 and Tele2 would be broadcasting 21‑hours a day.
2433 So the -- I guess that there are two options here, either -- like 18‑hours or 24‑hours. So which option your service will choose and how that would affect the commitments and financial projections you have submitted for this ---?
2434 MR. MAROUF: If you see that the problem is the music programming on the grid, it carries over after midnight, until 3:00 a.m. So it's not -- it's easy to say 18‑hours, and then I can make up them, but it makes more sense to say 24. But in reality, the programming that we are going to be producing, purchasing -- is only going to go up until 3:00 a.m.
2435 COMMISSIONER SIMARD: Okay. So is your answer 24 or do you want to think about it and -- provide it in an answer via an undertaking?
2436 MR. DESILVA: It's always wiser to stop and think about it and come back.
2437 COMMISSIONER SIMARD: Good. Thank you.
2438 MR. DESILVA: We will -- we'll accept your generous suggestion to do that, Madam.
2439 COMMISSIONER SIMARD: So I understand that you will be providing this information, this confirmation as to whether it is 18 or 24‑hours via an undertaking before December 6th.
2440 UNDERTAKING / ENGAGEMENT
2441 COMMISSIONER SIMARD: So that leads us to the last series of questions, the financial questions. We have already discussed it a bit, like your wholesale rate of 40 cents. Could you please provide us a justification for your proposed rate?
2442 MS. LUDSKI: As mentioned previously, Commissioner, we looked at other 9(1)(h) licences and how they operate, in particular, looking at APTN's budget and their fee, and looking at the amount of news and languaging [sic] programming. And so we felt that the 40 cents, because of the multiple languages, will be necessary.
2443 COMMISSIONER SIMARD: Good. Thank you. Maybe a more general question. I understand that your proposal is to be like a non‑for‑profit organization, and in your presentation, you refer to donations. Is it fair to say that you’re not contemplating getting some advertising?
2444 MR. MAROUF: We actually are going to get advertising.
2445 COMMISSIONER SIMARD : Good. Okay, so could you please discuss your views on the health of the ethnic advertising market including your proposed service strategy to compete with increased competition from digital ethnic services?
2446 MR. MAROUF: So a biggest problem that I think -- when we were looking at APTN, one funny thing that appeared -- and at the same time, we looked at OMNI’s budget and so forth -- is how little advertising OMNI’s making in comparison to APTN when the supposed market that OMNI is servicing is five times that of what APTN. Similarly, it was looking at how much success APTN had had with getting funding for productions in comparision to OMNI.
2447 So, for us, we were shocked at the level of carelessness. This is a huge community, the communities that we’re going to be representing. There’s a lot of money and it all comes to loyal -- loyalty to a brand that they will recognize that is actually servicing (inaudible).
2448 Nobody’s watching OMNI right now in the ethnic communities because they can’t find accurate reflection because it’s been filtered through corporate lens, the reflection, because they can’t find news that is reflecting their views to the rest of Canadians and they can find better quality content online from their ethnic communities and their nations.
2449 So we have decided that we need to produce stellar programming, ground-breaking news that’s going to become a main source of information for all Canadians and that, in turn, will actually bring the advertisers.
2450 COMMISSIONER SIMARD: I had a question about some discrepancies between your financial projections, but now I understand that the last version that was filed earlier today is the appropriate one and I guess that that’s the one that we should be referring, right?
2451 MR. VALENCIA: I would -- I’d like to ask -- to add something else, too, and about your -- how the diverse -- the cultural diversity will react towards this endeavour and I can tell you that if -- we are in a big -- this big change in which everything is coming to this technology, so when we have at stake who is going to speak about these communities, one has to take into acount the following ; that already Canadians pay the highest amount money for these digital services.
2452 So there’s instrinsical contradiction when you have companies that want to provide more diverse content for our communities when our communities are not precisely -- they don’t have the best salaries when, at the same time, they are the ones who control the gates to content. I think that should be they also take into account.
2453 COMMISSIONER SIMARD: Thank you. So in our previous financial projections, it is indicated that there would be no local advertising ; is that correct?
2454 MR. MAROUF: Yes.
2455 COMMISSIONER SIMARD: Okay, so why is it the case?
2456 MR. MAROUF: The application was for a national television station. We don’t own all our stations locally like OMNI does, so we didn’t put it in our agenda. It -- and it seems like the CRTC was actually not happy that most of the other applicants were going for local advertising, so I guess it was a good choice.
2457 COMMISSIONER SIMARD: So I guess that I can understand that you would agree with a possibility that the Commission impose a condition of licence limiting local advertising say?
2458 MR. MAROUF: Yes, we would.
2459 COMMISSIONER SIMARD: So there was a discrepancy in your financial projections, so I’m going to read like the description of this discrepancy and I would appreciate if you could confirm as to whether we can find the answer in the financial projections that you filed today.
2460 So your financial projections showed a cumulative pretax profit of 25 million over the course of the licence term ; however, when depreciation is factored into the calculations, the service operates at a cumulative loss of 30.1 million. Further, the initial financial projections ICTV submitted showed cumulative profits of 73.9 million over the course of the licence term.
2461 So could you please, I guess, either now or maybe after the undertaking, confirm those numbers? I guess that you will have time to compare those numbers with, again, the ones that we have now before us.
2462 MR. VALENCIA: We can give you everything in an undertaking.
2463 COMMISSIONER SIMARD: Good.
2464 MR. VALENCIA: I can also, if you want, ---
2465 COMMISSIONER SIMARD: And is it clear, the number, or do you want me to repeat it?
2466 MR. VALENCIA: Yes, the -- it will be in the undertaking.
2467 COMMISSIONER SIMARD: Yes, good.
2468 MR. VALENCIA: So I ---
2469 COMMISSIONER SIMARD: Transfer it.
2470 MR. VALENCIA: Yeah.
2471 COMMISSIONER SIMARD: Yeah, thank you.
2472 MR. VALENCIA: And if you would like me to give you a quick answer that -- and then we could put the more details there.
2473 COMMISSIONER SIMARD: No, like if ---
2474 MR. VALENCIA: Okay.
2475 COMMISSIONER SIMARD: Yeah, that’s fine, thank you.
2476 It is my understanding that in your proposal, you have not broken down the cost associated with the acquired original, first-round programming, so is it possible for you to indicate the proportion of acquired programming in your services programming schedule?
2477 And the same thing and I guess it’s going to be -- the information will be provided via an undertaking. The -- some information that would be helpful is a detailed breakdown of the projected cost associated with acquired programming.
2478 MR. DE SILVA : We’ll be happy to provide that in an undertaking for each of the five years, Madam Commissioner.
2479 COMMISSIONER SIMARD: Thank you very much, before six.
2480 MR. DE SILVA: Before December 6th (inaudible).
2481 COMMISSIONER SIMARD: Thank you. Could you please discuss, in detail, your plans for -- in detail-- I mean like in general -- like your plans for capital expenditures and provide justification for those capital expenditures?
2482 So, again, it will lead to another undertaking, so we will need to have more information, more detail about the capital expenditures. We will need detailed, annual breakdown of the capital expenditures ICT (sic) expects to incur for the operation of TELE1 and TELE2. Additionally, we would like to receive a detailed breakdown of the capital expenditures ICTV expects to incur in the pre-launch phase for TELE1 and TELE2.
2483 So do you agree to provide us with this information via an undertaking?
2484 MR. MAROUF: Yes, we agree to provide you with all this information in an undertaking. That is in this package (inaudible), but ---
2485 COMMISSIONER SIMARD: Thank you, before December 6th.
2486 I would like to thank you for your submission. I would like to thank you for answering our -- or my questions. So, again, thank you, and I guess that may be other -- some of my colleagues have other questions. Thank you.
2487 THE CHAIRPERSON: Thank you, Vice-Chair Simard.
2488 Madam Laizner.
2489 COMMISSIONER LAIZNER: Well, we’re now in the -- good afternoon.
2490 So I was a little -- well, I was quite interested in the points you raised about the need for cross-cultural exchange programming, and I just want to unpack a little bit about whether the principle underlying your news programming or whether it’s a separate kind of programming because one of the comments I think I heard you say was that, you know, a problem with just reflecting a particular community is that there’s no understanding or nurturing of that understanding of other communities. And given Canada’s multicultural fabric, that in your view that’s very important. And I take those comments and I just want to understand basically how you accomplish that in the programming; like where it fits in exactly?
2491 MR. VALENCIA: Yes, we have the responsibility for us and our children because -- and I’ve been in Canada for more than 30 years and I haven’t seen the pace of changes that we are seeing these days. And also how we -- our vision of the world is informed and inform or by how technology has changed.
2492 So we no longer belong to one community here in -- but we belong to two or three of other communities in our countries -- eight groups of interests and what we’re seeing is that -- well, statistically, the presence of diversity not only in the -- in terms of skin colour on the screen on behind the microphones, but also the ideas that come along with it, perspectives and I think it is a loss for all of us as society when we do not take into account or at least listen to -- and we all know that it’s in these times of political turbulence it is very important to know one another because when you know the other person, it is much difficult to hate a person. You might not like the cooking but the person is like you -- or you might like it a lot, yes.
2493 So I think that is the core principle because we -- the idea is to present a progressive vision of our society, what we are doing together, and this togetherness is no longer isolated by our borders.
2494 We are the second-largest country in the world. I mean -- in one side we have the Russians and we the United States and we are in the middle of that. We have to speak with the Russian community here. We have to speak with the Russians there too.
2495 So that’s why I think it’s important for us to convey our values. How come that these people that -- English and French are not shooting at each other but they are -- we -- but they are talking. Canada -- so that’s in terms of concretely what you -- how it’s going to work. Is going to work by bringing together, in front of the microphone and behind the microphone, people that understand this and we want to foster by this engagement, by this conversation, this dialogue of visions of a country and visions of the world.
2496 For example, what we lack -- you look at any news items. We lack two things. We lack the continuity, the why’s of everything but also a continuity because we are a town in which news is more -- if you look at the news now, it has become more like an entertainment and you have discussions about the budgets and next to it you have how many kilos JLo has lost or won. I don’t know, I’m giving you a crude example.
2497 COMMISSIONER LAIZNER: No, but is this the philosophy that will permeate all your programming or is it something that you’re going to do special programming to promote? I mean, I know we talk about sports being an avenue to bring different cultures together, but I’m just trying to get a sense of where it actually sits in with the programming?
2498 MR. MAROUF: It’s both. It’s a philosophy that we’re going to follow everywhere, including the priority boards of the news being government and how it affects minorities, indigenous people, women and gendered people. So just having those priority boards in the news will mean that this is constantly an issue that is appearing in our news story and everybody -- but, at the same time, we will have specialized programming specifically about building these bridges, whether it’s indigenous programming that is tailored and -- to newcomers, new immigrants, introducing them to these cultures, the languages and realities of the indigenous, whether it’s creating cross-cultural dialogue shows that’s -- or religious dialogue shows. Those are all ideas that are going to fit and complete the current affairs block. So this is where the ---
2499 COMMISSIONER LAIZNER: Do you see that as a gap in the present system?
2500 MR. MAROUF: Yes ---
2501 COMMISSIONER LAIZNER: Okay.
2502 MR. MAROUF: --- it is. It’s not only a gap, there’s nothing like it.
2503 COMMISSIONER LAIZNER: There’s nothing.
2504 MR. MAROUF: Yes.
2505 COMMISSIONER LAIZNER: Okay.
2506 And then the only -- the other question I wanted to ask you was, you know, you’ve been talking about Rogers and its OMNI programming and, in your view, ethnic communities are not reflected because the programming is all filtered through a corporate lens, corporate priorities.
2507 Can you give me an example, a concrete example, of where you think that OMNI has failed in a particular programming and how you would do that differently?
2508 MR. DE SILVA: I would just want to reiterate something I mentioned before.
2509 I think one of the challenges, I mean, certainly it’s not my position to try and trash the efforts of any organization. I think I’ll leave it to what we’ve already said in terms of application and the shortcomings of that.
2510 But as you’ve asked a specific question, where the difficulty is is when the model for representing the community is by individual producers to go out to local advertisers to raise their money and speak only to that community, you know. If you’re going to -- doing a program for an Indian or South Asian community, for instance, you have to go to an Indian restaurant or a sari shop or a, you know, a business that only appeals to that particular community, then the programming is going to be targeted to it.
2511 Which is not to say that there are some programs, for instance OMNI, that have had broader appeal. Everybody loves Bollywood movies it seems these days. Who can, you know, not like melodrama and song and dance. But it appeals specifically to that community, but it may have crossovers to other communities.
2512 However -- programming, I think as I said, the ethos of all the programming will be to present cross-cultural views while also providing specific language, multilingual, multiethnic programming.
2513 COMMISSIONER LAIZNER: But is your concern that independent producers, they’re producing for, let’s say, a larger vertically integrated company, are getting -- are having to produce in a particular fashion, a particular slant to their programming, or are you just saying that the model by which they’re enumerated makes it difficult to achieve what you want to achieve?
2514 MR. DE SILVA: I think they are two. I think it’s a very complex question you ask, Madam Commissioner.
2515 There are two things. Yes, it is the model of how the programming is financed, developed and targeted. The fact of what you’re asking is a question in terms of how does big corporate interest mediate the content, and I think that is a bigger issue.
2516 What are the editorial restrictions, if you will, that are put on it? And I think that kind of mediation is a very subtle -- but it evinces -- it manifests itself in very -- because if the people who are making the decisions about this programming are not from those communities, invariably that programming has -- it is -- by the perspectives of the people who are making those decisions, so the decision-making.
2517 And I think all the research that is available now shows that, in terms of who are the gatekeepers, what are their perspectives, what are their reflective, what are their attitudes?
2518 So on -- to just get back to the specifics of your question, yes, the model of having to raise money from that specific community and target that community is, I think, a big issue. Much less identifiable, if you will, is the subtle aspect of mediation by people who are not from those communities who are making those decisions in the corporate landscape that I think our proposal will certainly deal with and mitigate.
2519 COMMISSIONER LAIZNER: Okay. Thank you.
2520 THE CHAIRMAN: Thank you. I have just a couple of short questions.
2521 Earlier in your discussion with Vice-Chair Simard you talked -- you had quite an extensive discussion about the issue of 50 per cent threshold for third language programming. And you explained that it would be -- it's difficult for you until after to establish what threshold you would be prepared to commit to, but you said -- you confirmed that it would be, however, a minimum of 50 per cent no matter what.
2522 So I just want to clarify, when we talk about that 50 per cent threshold, we are talking about languages other than English, French and Indigenous languages? You are talking about a minimum 50 per cent for third languages excluding Indigenous language?
2523 MR. MAROUF: Yes.
2524 THE CHAIRMAN: Okay. Thank you.
2525 Just a short question, you talked about how in your first year you would use freelance news gathering. I'm paraphrasing somewhat obviously. How do you anticipate you will test the veracity of that news gathering? You mentioned concerns about fake news and the veracity of news programming and also the importance of having news reflective of these ethnic communities, but if you're using freelances, almost like crowd sourcing of news, how do you -- crowd sourcing's an inappropriate term -- gathering it through freelances, how do you test it's veracity?
2526 MR. VALENCIA: But as you know, the field of journalism in the big companies is getting smaller and smaller, which in turn has created two situations. One in which you have this number of seasoned journalists, but only the hand, even within the sector, even in the best moments, there are journalists that do prefer to work as freelancers.
2527 Now, how do you do that? How do you vet the quality of reporting? It's precisely by two elements. First you -- as an administrator, you will look at who the career of these person. And secondly, you will also get in touch, we will also connect -- you have connections with the community to -- who will give you feedback, so feedback to see how relevant is this person's work?
2528 So we are fully aware of the risks and we -- because we have connections, as you can see here, again, across the country, we are vetted in different regions of the country with different languages. So we have the tools sufficient enough to guarantee the quality of those journalist's work.
2529 THE CHAIRMAN: Thank you. I think you have someone on ---
2530 MR. MAROUF: Mohamed ---
2531 THE CHAIRMAN: Yeah.
2532 MR. MAROUF: --- wants to talk I think for a minute.
2533 THE CHAIRMAN: Yes, go ahead.
2534 MR. FAHMY: If you may allow me. So the model I have used before while working in stations like CNN and BBC is very concentrated on using what we call a roving reporter. So aside from the trusted freelancers that are affiliated with us that will be vetted based on not just their capabilities and -- but also their reputation and their proven track record, we have the system of the roving reporter where there are staff members who may go from headquarters, let's say, to a big story happening in Ottawa, because they are more experienced in that field, if it's a national security issue, if it's a crime story.
2535 So in the world today there are networks who have 70 offices across the world, but they have a 2-man team. And because of the technology that we are seeing advanced almost, you know, regularly, a reporter now is expected to conduct radio, to do TV, to write a website. It's almost like a unit where before I would need a cameraman to broadcast my report, while now I have my own camera and I can actually do that myself as a reporter on the field.
2536 So we are very aware that we can establish a team of well-trusted reporters across Canada.
2537 THE CHAIRMAN: Thank you.
2538 MR. MAROUF: If I might just add that our news department will -- in Montreal -- our news department in Montreal will be staffed with full-time staff. Our headquarters will be solid. Just in the beginning of the stages of -- as we are building our offices outside of Montreal, we're going to be working with roving journalists and so on and then eventually we will be absorbing them into our staffing.
2539 THE CHAIRMAN: Understood. Thank you.
2540 I think Commission counsel has -- also has a couple of short questions.
2541 MS. DIONNE: Thank you.
2542 This is to follow up on one of the undertakings discussed with Madam Simard. Do you have with you your proposed COLs number six and seven so you can -- I want to point out what the problem is. So COL ---
2543 MS. LUDSKI: Just one moment. I'll pull the document up. Thanks.
2544 MS. DIONNE: Okay.
2545 MS. LUDSKI: Thank you. We have it now.
2546 MS. DIONNE: Okay. So you propose in COL number 6 daily national 30-minute newscasts in -- sorry -- in 4 languages. So you have Italian, Mandarin, Cantonese and Punjabi.
2547 MS. LUDSKI: Actually, it's 10 languages.
2548 MS. DIONNE: Exactly. So you say 4 and then in parenthesis you have 10 repeating those 4. So I need you to clarify ---
2549 MR. MAROUF: Okay.
2550 MS. DIONNE: --- which languages and how many.
2551 MS. LUDSKI: Thank you.
2552 MS. DIONNE: And we have the same problem in condition of license number seven.
2553 MR. MAROUF: So I'm sorry, this is a typo.
2554 MS. DIONNE: Okay.
2555 MR. MAROUF: So it should say -- condition six should say the license shall produce and broadcast daily national 30-minute newscast, 7 days per week in each of -- in 10 languages; okay? Instead of "in each of" in 10 languages. Take off the parenthesis.
2556 MS. DIONNE: Okay. So you will -- okay.
2557 And see number seven is ---
2558 MR. MAROUF: COL number seven, the license shall produce and broadcast daily national 30-minute current affairs show 6 times a week in each of Mandarin -- in each of the 10 languages.
2559 So the news is seven days a week. Current affairs is six days a week.
2560 MS. DIONNE: This -- you will choose on Saturday or Sunday or which six days?
2561 MR. MAROUF: On -- no, it's except Sunday because Sunday has other programming.
2562 MS. DIONNE: And is it these 10 languages or just 10 languages in general?
2563 MR. MAROUF: No, these 10 languages are the ones that we will do the daily newscasts, the 2 official languages of Canada and the top 8 languages according to the census.
2564 MS. DIONNE: Okay. Thank you.
2565 MR. BOWLES: I realise that I'm in the unsavoury position of standing between everyone and their lunch. I only have one question. I'll be very brief. And it's a follow-up to an undertaking that was given during a conversation with Vice-Chair Simard.
2566 You undertook to get back to the Commission as to whether you would want your commitments to be evaluated pursuant to a 24 or 18-hour broadcast day. As part of that undertaking, can I also get you to discuss whether your choice of length of broadcast day would impact your commitments, and if so, how they would impact them and why?
2567 MR. MAROUF: Sure, we can do that.
2568 MR. BOWLES: Thank you very much.
2569 THE CHAIRMAN: Thank you, counsel.
2570 Thank you very much for your presentation. With that we will recess for lunch, returning at 2:05. Thank you.
2571 THE SECRETARY: Thank you for taking the time.
--- Upon recessing at 1:03 p.m.
--- Upon resuming at 2:07 p.m.
2572 THE SECRETARY: Mr. Chairman, we're ready to start. We have in front of us Item 7 on the Agenda, which is an application by Telelatino Network Inc. and Asian Television Network International Limited, on behalf of a corporation or limited partnership to be established for a broadcasting licence to operate a national multi-ethnic, multicultural discretionary service to be known as CanadaWorld TV.
2573 Please introduce yourselves for the record. You have 20‑minutes.
PRESENTATION / PRÉSENTATION
2574 MR. ENGELHART: Thank you very much.
2575 Mr. Chair and Vice-Chairs, my name is Ken Engelhart, counsel to the applicant. I am pleased to introduce our panel here today.
2576 To my immediate right is Mr. Aldo Di Felice, President of TLN Media Group for the past 21‑years, and a proud Argentine born Canadian.
2577 To my left is Canadian Broadcast Hall of Fame member Dr. Shan Chandrasekar, Founder and President of Asian Television Network, operator of 41 Canadian licensed multicultural TV channels and ATN‑Asian Radio across North America.
2578 To Shan's left is ATN's Vice President of Sales and General Manager, Mr. Prakash Naidoo, a proud Canadian born and raised in South Africa.
2579 To Aldo's right is Ms. Agatha Pezzi, an Italian-born Canadian and 20‑year TLN veteran. She is Sr. Vice President Original Productions & Strategic Partnerships for all seven of TLN's Media Group's owned and operated discretionary TV services.
2580 To Agatha's right are the two multilingual senior professionals at the TLN Media Group's Finance Department, Ms. Elena Abramova and Mr. Dania Penuliar, also immigrants to our great country and proudly fluent in Russian and Tagalog respectively.
2581 Also joining our panel in the second row to my far left is Mr. Matt Thompson Director and legal counsel at Corus Entertainment.
2582 Next to Matt is ATN VP Marketing Mr. Pramod lsrani, who is fluent in Hindi, Sindhi and English and understands Punjabi, Marathi and Gujarati.
2583 Next to Pramod is TLN Media Group presenter and journalist, Colombian-born Canadian, Camila Gonzalez.
2584 And next to Camila is Mr. Nino Simone, who runs TLN's Québec office operations today after joining TLN 21‑years ago to co‑found TLN's office in Montreal's St. Leonard's neighbourhood in 1997.
2585 Next to Nino is our Senior Research Consultant, Mr. Paul Street, Director of Global Research and Analytics at Reality Mine.
2586 And were going to have three representatives of TLN's shareholder families, the Vitale, Di Battista and Rosati families here today. They have been with TLN since the 1980s and are quite likely the recordholders for the longest held minority investment in the Canadian TV business, but they got snowed in in Toronto.
2587 We would now like to turn to our formal presentation.
2588 DR. CHANDRASEKAR: Mr. Chairman, Mesdames Vice-Chairs, we are truly excited and honoured to be part of this proceeding. As candidates to take on this important national mandate, for many of us on this panel, it is the true culmination of our lifetime work. The channel that is born out of these proceedings will play a major role in our society for years to come.
2589 Changes in this country have continued at an accelerating pace. For as long as most of us in this room have lived here, a steady influx of new immigrants have been arriving to live in this country.
2590 According to the 2016 Census figures, the share of immigrants in Canada has reached its highest level in almost a century; over 1 in 5 Canadians was not born here, and 7.6‑million Canadians, reported speaking a foreign language at home. This proceeding is most timely and more important than ever.
2591 At this point, before continuing, we would like to present a 4‑minute video presentation our team has produced. Thank you.
2592 (VIDEO PRESENTATION / PRÉSENTATION VIDÉO)
2593 MS. PEZZI: The Commission's May 15, 2017 call was clear, it was a call for applications to operate a national, multilingual, multi-ethnic television service offering third language news and information programming. And CanadaWorld TV directly responds to the call. A single national channel, with identical east and west time zone feeds, focused on news and information that will serve as a unifying force for all Canadians.
2594 MS. ABRAMOVA: CanadaWorld is intended to be an inclusive new channel for everyone, regardless of ethnic region and language. It will broadcast news and current affairs in 20 immigrant languages. And that includes Russian speakers like me. Only CanadaWorld TV promises to include Canadian newscasts in the language of my Russian-speaking community.
2595 MR. PENULIAR: Korean, Portuguese, Polish, Persian and Romanian speakers will also get Canadian news in their language. A hundred thousand Canadians speak Romanian. These communities are among the 20 that we will serve with newscasts.
2596 MR. ISRANI: And let's not forget Punjabi, Tamil, Urdu, Hindi, Gujarati and Bengali speakers. Those communities are in the top 20 too. They will also receive Canadian news and public affairs.
2597 MR. NAIDOO: Beyond the linear TV channel, we are responding to the trends in the way people are actually getting their content, by including a companion Canada World VOD service delivered through BDUs.
2598 The VOD service will have several important benefits.
2599 First, it meets consumer preferences for accessing content on demand.
2600 Second, it permits us to more deeply serve the most popular immigrant languages with extra content.
2601 And third, it also allows us to serve the often overlooked, smaller linguistic communities in Canada. Everyone is included and will be represented. That inclusiveness will benefit both our society and our pay TV system.
2602 MR. DE FELICE: The mere quantity of immigrant languages served, 20 or more, is meaningless without a qualitative consideration of how that number of language groups will actually be served.
2603 We are sensitive to the needs and interests of immigrant Canadians, not only because we are immigrants ourselves, but because we have many decades of collective experience, serving ethnic populations that between TLN Media Group and ATN represent 5 million Canadians speaking over a dozen languages.
2604 And so, the guiding principle behind everything we will do is equality. That means we don't say we will serve 20 immigrant languages and then provide regular newscasts for only a half dozen of these 20 languages. We will provide full Canadian newscasts to all 20 languages equally, multiple times a week.
2605 And equality also applies to scheduling those newscasts. Only CanadaWorld TV's schedule gives equal prominence and visibility to all of Canada's 20 most spoken immigrant languages. That means we will not simply reserve the best time slots of a linear TV channel to a small selection of the most commercially viable languages and relegate the others to the fringes.
2606 And the same principle applies to our official languages programming on the service. English and French language programs will receive equal prominence in equal amounts.
2607 This will send a message that is loud and clear. A message that will unite us all
2608 MS. GONZALEZ: Commissioners, let's especially listen to young Canadians, those of us who are going to schools and growing up in environments where multilingualism is the norm.
2609 My fellow students and the staff at the Ryerson School of Journalism are more diverse than only a few major immigrant languages.
2610 So let's serve the underserved, the marginalized communities, those without the big numbers, the big dollars and the big political powers, because there are many other important communities even beyond my own Spanish speaking community.
2611 MR. SIMONE: Nous pouvons pas se concentre simplement sur quelques communautes immigrantes. Ceci nous devisera. Autant possible, les communautes mains nombreuses doivent etre traitees aussi bien que les plus importantes en nombre.
2612 DR. CHANDRASEKAR: We tremendously commend the Commission for issuing this call. This allows you to consider whether other players with fresh ideas and proven capabilities can best serve the needs of our multicultural communities.
2613 We request the three most important factors that the Commission should consider are, first, the people behind the application; number two, the second, the nature and quality of their service proposal;
2614 and third, the price that they are charging for the service.
2615 In the time remaining, we will discuss all the three factors.
2617 MR. DI FELICE: Together ATN and TLN are the most experienced and successful ethnic broadcasters in Canada today. We are proud to say that after humble beginnings our Canadian ethnic TV channels have become beacons of multicultural information and entertainment for many Canadians.
2618 And under our unique collaboration, 70 per cent of the shareholders of CanadaWorld are immigrants who have been operating or invested in licensed Canadian TV channels for decades. Our diverse ownership model is a notable and positive distinction.
2619 A majority of our staff are also immigrants and we proudly can claim fluent speakers of each of two dozen languages among our staff. We understand the needs and aspirations of ethnic groups because we have lived the immigrant experience in Canada.
2620 Therefore, CanadaWorld TV meets the CRTC's specific requirement for a diverse governance structure and goes even further, with a truly diverse ownership and operating structure.
2621 DR. CHANDRASEKAR: Managing a channel that serves a number of different ethnic groups that speak a number of different languages is quite challenging. We know how to do it because we have been doing it for years. ATN serves audiences in approximately 10 languages and TLN Media Group have both produced and distributed programming in multiple languages.
2622 We are committed to CanadaWorld TV because for us, multicultural television broadcasting is all we do.
2623 We have each started a fair number of channels -- new channels at ATN and TLN over the past 20 years and we know how challenging and rewarding that can be.
2624 After decades of successful operation, our organizations are experienced in handling initial start-up losses of a new television service and hopefully guiding it to success.
2625 MS. PEZZI: We have attracted support well beyond the South Asian, Hispanic and Italian communities that ATN and TLN Media Group traditionally serve. Many other third language groups and leaders that know us by reputation have also supported us: Chinese, Russian, Greek, Portuguese, Arabic and Persian to name a few. And more than 30 Filipino groups and leaders, plus over 50 independent producers have intervened to support CanadaWorld TV. We have even received the express support of dozens of ethnic print and radio media.
2626 MR. NAIDOO: And our supporters include major advertising buying agencies, which makes us very optimistic about our advertising sales prospects.
2627 And finally, we wish to underline that even the Public Interest Advocacy Centre, whom we did not solicit, expressed strong support for granting CanadaWorld TV a 9(1) (h) license.
2628 DR. CHANDRASEKAR: Besides considering the people behind the application, we request the Commission to kindly consider the nature and quality of our service proposal. CanadaWorld is a fresh new forward thinking two-part solution.
2629 First, a linear service delivering essential Canadian made news and information to many more linguistic communities than ever.
2630 And second, a companion VOD service to better serve varied interests and languages, and that recognizes modern consumer preferences for media consumption.
2631 MR. DI FELICE: The CRTC has identified news and information programming in third languages as a priority. We will provide full newscasts to 20 immigrant languages, multiple times a week. Most of our broadcast day will be filled with news programming, five original first run hours, six days a week. That is 30 hours of original first run news weekly.
2632 This challenge will be met in part by our alliance with Canada's national public broadcaster. We will subscribe to the CBC Syndication System, the NSS. This will provide us access to top national, regional and local stories.
2633 These stories will be supplemented by stories from our own network of contributors across Canada.
2634 CanadaWorld is also planning to subscribe to and access the news gathering resources of both The Canadian Press and of Global News. This would further complement our capabilities.
2635 As a result, both raw and complete stories will be received from multiple sources of Canadian-based industry leading -- and multiple sources of Canadian-based industry leading news gathering operations coast to coast.
2636 And apart from news gathering, TV newscasts production workflows are being developed based on industry best practices, including Global TV's award winning centralized and modular news production model.
2637 MR. NAIDOO: By taking an approach of serving the top 20 home language communities, CanadaWorld is committing to serve everyone from 50,000 Bengali speakers to over 450,000 Mandarin speakers in Canada.
2638 Although news and information are the most important part of our service, multilingual Canadians want much more. They want Latin American telenovelas, Bollywood movies, Filipino variety shows and Chinese dramas. All of this programming will be available on Canada World TV.
2639 Much of it will not be on the linear channel, but will be on the companion VOD service which will extend to include programming in up to 40 languages. This platform will be a powerful tool for attracting and keeping subscribers in the regulated pay TV system and provide value to the BDUs.
2640 MS. PEZZI: A hundred per cent of the programming on CanadaWorld TV will be ethnic. Canadian content in the standard schedule of CanadaWorld TV is 69 per cent, both overall and during the evening broadcast period. All told, news and current affairs broadcasts comprise over 100 hours weekly of the CanadaWorld TV linear service schedule.
2641 We will produce much of our current affairs programming regionally and we will have program production activity in B.C, Alberta, Saskatchewan, Manitoba, Quebec and Atlantic Canada.
2642 Some of the programming will be in official languages and all of this programming will be equally divided between English and French.
2643 MR. DI FELICE: With a 9(1)(h) multilingual service, Canadians are required to subscribe to a channel. It is therefore very important for the price of the service to be set at a level which they consider to be fair even if it does not affect the basic digital price.
2644 We have been guided by the market research
2645 originally submitted by Rogers and our own market research. And the market research showed that a majority of Canadians would be willing to pay 12 to 15 cents per month for an 9(1)h multilingual, multiethnic service.
2646 In addition, the impact on BDUs is important. Although they are still profitable, the BDUs face headwinds from unlicensed internet delivered programming, which is causing less Canadians to stay connected to the regulated pay TV system. As a result, we thought it was important to provide exceptional ethnic television at a reasonable price. These considerations led CanadaWorld TV to price our service at 12 cents wholesale monthly rate.
2647 The service will incur substantial start up costs which will be borne by the shareholders. We will continue to accumulate losses during the first five years. However, we are confident that the service will become cash flow positive by the end of the first five years, and we are committed to delivering high-quality television programming to Canadians at an affordable price.
2648 MR. ENGELHART: Regarding price, we should also explain that we priced the CanadaWorld service at a 12-cent monthly wholesale rate, based on a basic subscriber count of 11 million in 2020. This was consistent with the available data when we filed our application over a year ago.
2649 However, in a letter dated September 21, the Commission indicated to all applicants that subscriber numbers were in fact lower. We therefore, recast our business plan based on 10.2 million subscribers in 2020.
2650 In their September 21 letter the Commission asked whether the newly corrected information affected our assessment of the appropriate wholesale rate. We replied by letter dated September 28 that it did not, because we hoped to earn larger amounts from advertising and sponsorship.
2651 We remain willing and able to launch the new service at a 12-cent wholesale rate. However, if the Commission is concerned that this rate is so low as to unduly threaten the service's financial viability, we have calculated that a 13-cent rate would correct for the change in subscriber forecasts and leave our five-year business plan almost unchanged from the original plan based on 11 million customers in year one.
2652 We would obviously be prepared to accept a rate of 13 cents. At 13 cents, there would still be a high level of consumer acceptance and almost no impact on the cost of the basic package for BDUs. Our rate would remain -- would still remain significantly lower than the other applicants. A 13-cent rate would be identical to the rate mandated for CPAC, Canada's public affairs channel.
2653 Should the Commission wish to consider our suggestion, we are prepared to file revised financial projections. If not, we are prepared to stick by our initial rate.
2654 MR. DI FELICE: In conclusion, we believe that for a national multilingual service to truly represent our multicultural society and serve as a beacon for unity, we must serve as many linguistic communities as possible with the same high-quality programming. Our linear channel plan and schedule and our extended capabilities on VOD will achieve that goal.
2655 MR. CHANDRASEKAR: Commissioners, we believe and realize that the future of multicultural television is very much in your hands to create. We believe our ground-breaking alliance and our CanadaWorld TV proposal represent the experience, the vision, and the commitment that Canadians expect and deserve.
2656 We sincerely hope to be entrusted with this mission. We guarantee you we’ll equate ourselves worth of your consideration. Thank you.
2657 THE CHAIRPERSON: Thank you. Pardon me. Thank you, thank you very much for the presentation. I have some questions for you, some of which you answered, some of which have been at least partially answered in your opening remarks.
2658 I can’t help but begin by saying, so 12 cents or 13 cents?
2659 MR. ENGELHART: Thank you, Chairman. We should have said on September 28th, you know what? We do need 13 cents to correct for the lower subscriber number. We thought at the time, ah, let’s just continue to overachieve on advertising. But as we prepared for this hearing and we kept looking at the numbers we though, you know what? This is sort of a big hole that we’re digging in the first five years. So yes, our preference would be 13 cents.
2660 THE CHAIRPERSON: So maybe we can begin with just, if you’ll accept an undertaking then to refile your -- the obvious forecasts associated with a 13-cent rate, that would be helpful.
2661 MR. ENGELHART: Certainly.
2662 UNDERTAKING / ENGAGEMENT
2663 THE CHAIRPERSON: Also, in the opening remarks sort of bring us -- I will be asking questions in a whole bunch of areas and it may be somewhat disjointed at times, but we’ll start with programming. And in your opening remarks, you mention that much of the -- you’ll produce much of the current affairs programming regionally and you’ll have program production activity in B.C., Alberta, Saskatchewan, Manitoba, Quebec, Atlantic Canada.
2664 Can you just elaborate a little bit about what does much of the programming mean and what kind of operations in the various regions?
2665 MR. ENGELHART: I’ll kick off and then quickly turn to Aldo.
2666 So there’s two elements really to our original programming, the news and the public affairs programming that’s on Sunday. So the news going to Saturday, the public affairs on Sunday. We will have 20 public affairs programs, 10 of those will be produced regionally. So outside of Toronto. Both the Toronto productions and the regional productions will make use of correspondence, stringers, and affiliates throughout the country. And the news, similarly, although it will be produced in Toronto, will make use of arrangements that we have throughout the country. Aldo?
2667 MR. DI FELICE: With respect to the public affairs programming, as Ken pointed out, half of those 20 weekly current affairs shows would be produced outside of Toronto. We’re looking at our production relationships in Vancouver, Calgary, Winnipeg, Montreal, and Halifax, as well as potentially Ottawa. We have a lot of experience producing with regional producers. We are in the middle of producing PNI programming documentaries with the Montreal based producers right now on the TLN side.
2668 The other regional aspect to our activity is the collaborators we have across the country already, who we will activate and expand for the purposes of gathering both raw and finished stories for aggregation into our daily newscasts. Those are two ---
2669 THE CHAIRPERSON: And when you say -- go ahead.
2670 MR. DI FELICE: Sorry. That’s how I was describing the regional news activity, with respect to our daily news production, and with respect to the weekend public affairs programming.
2671 THE CHAIRPERSON: And if I heard correctly, you were saying in the process of establishing that. Do you have arrangements in place for regional production?
2672 MR. DI FELICE: So we have many arrangements in place for original production with respect to our own services right now. We’re actively producing documentaries across the country. We just recently completed a documentary in Saskatchewan and -- yes.
2673 So with respect to TLN Media Group, we do have existing arrangements within the independent producers at different levels. Some relate to PNI programming, documentaries in particular, some relate to segment production for our services. We gather stories from communities across Canada already for our channels and we put them out on our channels in Italian, Spanish, and English on a daily basis. Not in full newscasts, but as capsules. So we do have existing relationships across Canada.
2674 For the purposes of this new channel, which will operate as a separate entity, we will expand those relationships, combine them with the relationships that ATN has, and supplement the required contributors across Canada for both the purposes of the public affairs programming on the weekend, and the core news production. Which is the essence of this channel, the daily production of five hours of news in 10 languages.
2675 THE CHAIRPERSON: I don’t want to belabour the point, but for the new entity, you were describing your existing arrangements. For the new entity, do you have arrangements in place?
2676 MR. DI FELICE: With the contributors?
2677 THE CHAIRPERSON: With the contributors.
2678 MR. DI FELICE: No, but we have discussions going on with many contributors who currently contribute to TLN and ATN.
2679 THE CHAIRPERSON: Okay. Understood.
2680 MR. DI FELICE: And other’s who want to be involved in the new entity. Those include the 50 independent producers who have already supported us with letters of support and the two ethnic media organizations whom we are especially hopeful we can work with, because they are already across Canada working in different languages, in print and radio.
2681 THE CHAIRPERSON: Okay. Thank you.
2682 Staying on programming for a second, so your proposed service only has one feed.
2683 So you can guess what my follow on question will be and so maybe you'll want to start with that. I mean, existing OMNI Regional service has four, and most of the others are proposing multiple feeds. You are proposing one. How does that simultaneously meet the needs of Canadians, ethnic Canadians in various parts of the country?
2684 MR. ENGELHART: Again, I'll jump in and quickly turn to Aldo. But the need as we perceive it is information and news about Canada in the language of comfort. That's what people need. Immigrant Canadians, third language speakers can get plenty of news about their homeland from the Internet, but they have a desperate need to find out more about Canada and about Canadian news and a need to have it in their language of comfort.
2685 So a lot of the news that we produce is going to be national stories. Yes, there will also be regional and local stories, but in ethnic communities, as I think one of the other panels said, Punjabi speakers in Vancouver are very interested to know about Punjabi events that took place in Toronto. It's local to Toronto, but they have an interest in what fellow speakers are doing across Canada. So we think a single national service is going to fulfill the needs of the -- the need that exists.
2686 The other thing, Mr. Chair, is it's a lot cheaper having regional feeds, as to the expense. We are trying to come up with a very valuable service at an affordable price, and that drives you towards a single feed.
2687 MR. DI FELICE: If I may add. I think the primary qualitative consideration here is the misconception that a single national feed is less responsive to what consumers want. Our experience with the Italian community and the Hispanic community in Canada -- and I'm sure, because I'm here hand-in‑hand with Shan, he will be able to confirm that it's the same in his case -- our experience has been that the Italian community in Montreal does want to see a local story from Vancouver, that the Spanish and the Chilean community in Edmonton does want to see a story about what they're doing in Montreal's Hispanic community. And we on our services already include local and regional stories on a national feed. That's what TLN is, a national feed, a national channel with an east and west time-delayed identical feed.
2688 So I don't consider qualitatively, and based on experience, a single national feed to be a drawback. I think it's an advantage. It's been an advantage for the communities that we serve. They connect with each other across Canada by knowing what people in their own ethnic or linguistic communities are doing in other parts of Canada. Because the issue isn't whether you do only national stories, the question is whether you put your local and regional stories on a national channel. That's what we're doing. They're two separate issues, whether to include or exclude local and regional stories.
2689 THE CHAIRPERSON: Understood, but I mean take -- Mr. Engelhart has in part responded, but take local news, I'm struggling to understand how a suppertime local news broadcast that's relevant to the dominant or pre‑eminent ethnic communities in the Lower Mainland of B.C. are simultaneously interesting to the audience in Halifax.
2690 MR. DI FELICE: Well, in the production of our newscasts, we anticipate that 80 percent of the news stories will be the news of the day and the headlines of the day and will be common throughout. As they are in French and English television, it will be common on our channel; right?
2691 THE CHAIRPERSON: But that's not local.
2692 MR. DI FELICE: The 20 percent that would be local and regional stories would be collected locally and regionally and included on the national feed.
2693 Our experience is that the Italian community seeing a newscast with an Italian story that's local about something that's happening -- an award show, a celebration, an incident -- in other parts of the country, wants to be aware of it. So we don't see a problem because we've been doing it for 20 years, at least during my time at TLN, including local and regional stories on a national feed. Whether it's a national feed or a half hour newscast, it's the same thing.
2694 THE CHAIRPERSON: I guess the distinction may be that here we are looking for something that is more than acceptable, indeed is superior or exceptional. And that's really why I'm pressing the point. Is this exceptional?
2695 MR. DI FELICE: I agree with you.
2696 THE CHAIRPERSON: And I just -- also, I just want to come back. You just said, and I want to be sure I understood, you're actually maintaining that a single feed is superior to multiple feeds?
2697 DR. CHANDRASEKAR: Sir, I think the question of whether a single feed is superior to multiple feeds and unfortunately may not be a very fair comparison from our perspective. Because the multiple feed concept came in primarily because OMNI had several over-the‑air stations, and we tremendously admire their contribution in terms of the number of years of their service. And we are also extremely sympathetic to what happened to the over-the‑air television stations and their status.
2698 So it was absolutely essential at that point because of their, you know, financial needs for them to float multiple feeds in their regions as companion services for their over-the‑air stations.
2699 I think programming is what it's all about. News is news, and if there is something very significant that is happening in Lower Mainland or in Surrey, B.C., it's of tremendous interest across the country, and if something superb is happening in Brampton, it's of great interest in Vancouver.
2700 So we really feel that a national newsfeed for these languages, especially those who have been underserved, is extremely significant. And considering the fact that we also have a companion VOD service that'll be distributed on all the BDUs so that would give additional exposure for that so it will become more meaningful, so that may be a way to serve these communities at a lower cost.
2701 THE CHAIRPERSON: Okay. Thank you. I have lots of questions about the companion VOD service, but we'll get there in a minute.
2702 So conditions of licence. This is a bit of a -- come across like a Jeopardy round, I think. So the updated schedule sent to the Commission clearly states that at least 50 percent of the programming would be news. Can you comment on the imposition of a COL to require that percentage of new programming?
2703 MR. DI FELICE: Yes, we would agree to that.
2704 THE CHAIRPERSON: Thank you. Condition of Licence 11 states that you would maintain third language newscasts that were reinstated by OMNI Regional for Italian, Punjabi, Mandarin, and Cantonese languages. Also states that you would, in addition, produce some broadcast news and information directed to 20 language groups and ethnic communities.
2705 So again, would you -- they're not included currently in your COL, so would you agree to replace Condition of Licence Number 11 with a more detailed one, for example, that said CanadaWorld TV shall produce and broadcast daily national 30‑minute newscasts, seven days per week, in 20 ethnic languages?
2706 MR. DI FELICE: I believe, if I've heard you correctly, it would be ---
2707 THE CHAIRPERSON: You can take an undertaking if you prefer so you can read it. But go ahead.
2708 MR. DI FELICE: Yes. I think you referred to seven days, and our proposal is that it happens six days a week. There are three times a week newscasts ---
2709 THE CHAIRPERSON: Understood.
2710 MR. DI FELICE: -- to -- for six days a week.
2711 THE CHAIRPERSON: So I did say seven days. So you -- if that were six days per week in 20 ethnic languages, you'd be prepared to accept that as a condition of licence?
2712 MR. DI FELICE: I believe that the statement you made was ---
2713 THE CHAIRPERSON: You -- I'll -- you may comment further in an undertaking once you get to read the transcript if you want to confirm.
2714 MR. DI FELICE: Yes. And just to be clear, we're -- I understand you mentioned maintain the current newscasts. So what we are doing is we are maintaining those language newscasts, we're reducing the frequency from every day to three days a week in order to create the space to be able to equally serve seven -- the rest of the language is up to 20.
2715 THE CHAIRPERSON: No, I understood.
2716 MR. DI FELICE: Right.
2717 THE CHAIRPERSON: I was repeating the terminology used ---
2718 MR. DI FELICE: Right. Right.
2719 THE CHAIRPERSON: --- in your submission.
2720 MR. DI FELICE: Yes.
2721 THE CHAIRPERSON: Condition of Licence 12 commits to at least 10‑hours of current affairs programming produced each week. And again, can we discuss a updated condition of licence committing to 10‑hours of current affairs programming produced and broadcast.
2722 MR. DI FELICE: Yes, our intention is to broadcast them every Sunday, yes.
2723 THE CHAIRMAN: Just to be clear, because it still ---
2724 MR. DI FELICE: Yes.
2725 THE CHAIRMAN: And give me one second.
2726 So you also note -- and, again, we'll come back to the CBC issue, but that the daily news shows will not be dubbed CBC content, rather it's raw CBC footage that would then be incorporated into the production of original first run news programs. You count those news programs as original first run content as -- that's -- my understanding's correct. But the schedule that you've submitted with the application -- based on the schedule, you have 43 hours of programming per week, which would be original first run, but you've, again, not committed to that amount by condition of license.
2727 So is there a condition of license you would be willing to propose regarding your commitment to original first run programming?
2728 It's a very long question. My apologies, but ---
2729 MR. DI FELICE: Perhaps I will paraphrase it so that we're on the same page. The core of the original first run programming is the five hours daily 6 days a week news, in addition to the 10 hours of current affairs. That's 40 hours of original first run programming per week.
2730 THE CHAIRMAN: You lost three hours somewhere along the line ---
2731 MR. DI FELICE: Oh, the other three hours -- I can tell you what the remaining three hours are. There's 1.5 hours a week in French and 1.5 hours a week in English directed to Caribbean and African, French-speaking and English-speaking communities. That's the missing three hours.
2732 So the total would be 43.
2733 THE CHAIRMAN: Okay. Thank you.
2734 And still just on conditions, the proposed condition of license number 12 refers to an intention to provide support for independent producers. Can you elaborate on that, please?
2735 It's somewhat lacking in specificity for a condition of license. Relating to independent producers?
2736 MR. DI FELICE: That relates to the way we work with some independent producers who are not necessarily established. Emerging independent producers sometimes require help from our crew and staff in producing whatever they may be producing for us.
2737 So I think that reference refers to -- the considerable support for independent producers refers to the fact that we sometimes provide production support, guidance and assistance to emerging producers.
2738 THE CHAIRMAN: Okay. I was looking for an elaboration of what that comprised, so that's a brief summary of ---
2739 MR. DI FELICE: I'm happy to expand.
2740 THE CHAIRMAN: You can elaborate a little bit just so I have a ---
2741 MR. DI FELICE: Right. So ---
2742 THE CHAIRMAN: --- better sense of it.
2743 MR. DI FELICE: --- production studio assistance. So sometimes there's technical equipment they don't have and we need to assist them in doing the voice over or creating graphics for a show that our graphics department will create for them so they can incorporate it into the finished product that they are creating.
2744 THE CHAIRMAN: Okay.
2745 MR. DI FELICE: Script editing, that kind of assistance.
2746 THE CHAIRMAN: Thank you.
2747 In terms -- just staying with programming for a second, so our ethnic broadcasting policy, as you well know, states that 50 per cent of all programming by ethnic stations must be third language. Your proposal has 60 per cent. Hearkening back to my question before about is this exceptional, can you tell me why you think 60 per cent is -- reaches that threshold of being an exceptional contribution?
2748 MR. DI FELICE: Yes, I think that the totality of the proposal taken in its entirety is exceptional, that one condition, 60 per cent, mirrors -- it may mirror the Rogers original, regional approval. It's a minimum 60 per cent. And the standard schedule has been prepared on the basis of meeting the minimums.
2749 We're quite used to doing channels with 100 per cent third language programming on them. We thought it was important in being responsive to the CRTC's call that a channel that everyone has to have also responds to Canada's official languages, with cross-cultural programming that is in official languages.
2750 So we wanted to incorporate within the channel English and French language programming and to incorporate it equally.
2751 Our intention wasn't to minimize the amount of third language programming in the channel, but to ensure that all languages, including official languages, are represented.
2752 That was our intention about creating this and I think that the idea behind the 60 per cent number itself is thoughtful and exceptional in that sense. I don't think that necessarily just raising the number is going to create exceptionality in isolation.
2753 THE CHAIRMAN: It'll help. Whenever you say to a Commission some things in minimum you can almost always anticipate the next question. Are you prepared to commit to a higher number?
2754 MR. ENGELHART: Yeah, I mean, I'll let Aldo answer that one, Chairman, but if I could just add the -- you know, it's easy to goose up the third language numbers by adding telenovelas or Bollywood movies or stuff like that. We've got news and information. That's the exceptional thing. That's what merits a 9(1)(h) is that we are packing the schedule with news and information. Sure we'll be providing entertainment programming on the VOD feed, but I think with that much of our focus on news and information that that qualifies it for a 9(1)(h), but I'll let Aldo answer the question about whether he'd go a higher.
2755 MR. DI FELICE: If the Commission desired to make the channel more third language, we wouldn't have a problem with it. We think that the balance that we've created here, taken in its totality, makes sense. But if the perception is that the channel would be improved if it had more immigrant languages on it at the expense of official languages programming that we've described as intended to make the channel more comprehensive and appealing to everyone at one point or another, then we're willing to make that change.
2756 I would also defer to Shan who has opinions here and with whom I'm here hand in hand.
2757 DR. CHANDRASEK: No, I think, you know, you're handling it fine. So basically there are many aspects in public affairs programming which are run by CBC, CTV, Global, every major network across this country. We have great respect for what they have done. But there may be another perspective for some of those.
2758 We have enormously talented people within the multicultural communities who can comment very intelligently on free trade negotiations, on HST implication, any new government policies that happen, refugees coming into this country. And I think there may be a window of an opportunity for them to be on some of these bilingual programs that we would come up with that would give them an opportunity for exposure.
2759 And before too long, we are pretty confident that some of these experts that we have identified in the community with enormous intelligence will also be picked up by big broadcasters in this country. And that might be a stepping stone.
2760 So there may be a window of an opportunity for us in programming to provide a conduit at least to be able to give that exposure and we are pretty proud of that concept. Thank you.
2761 THE CHAIRMAN: Thank you.
2762 CBC, so as already mentioned, you would be utilising raw footage from the CBC's digital video library in order to produce original news programming. What else -- and I don't -- if you can discuss it publicly, and if not, you could file it in confidence through an undertaking -- what other services or support potentially would the CBC provide you?
2763 MR. DI FELICE: Well, I believe this is already on the public record because we referred to it in our supplementary brief, but, yes, we were quite elated to see the CBC responded so enthusiastically to the idea of our coming forward with an application and they offered us not only the ability to work with the new syndication service, which provides stories with scripts and syndicated those stories to other broadcasters, as well, for the formulation of newscasts, but they also added a laundry list of other potential collaborations and services that they could offer us. We haven’t defined which of those we will use and to what extent.
2764 The core service that we’ve identified is the syndication service because they do have the most comprehensive network of bureaus across Canada for news gathering and the number of stories that come in, I think, are about 25 a day, complemented by the stories that come in from Canadian Press and potentially our access to Global TV news stories gathered from their network across Canada. We think that those are the key -- that’s the key to producing the newscast on a weekly basis.
2765 The other elements that CBC offered us were things like promotional abilities, cross promotional abilities, digital transmission over the air, which we won’t be using, their archive of programs that they sell internationally and to Canadian broadcasters, which we have licensed in the past on TLN. For example, we’ve broadcast “Being Erica”. We’ve broadcast “Little Mosque on the Prairie” in Spanish and Italian on our channels, so everybody has access to that library to buy from it.
2766 So we will, perhaps, look at it and see what makes sense for us, but the core service would be probably the new syndication service.
2767 THE CHAIRPERSON: And if you took advantage of a number of those fully-produced programming, operational support and so on, how would you then characterize the CBC, at that point, in relation to your undertaking partners? I’m having difficulty just for asking ---
2768 MR. DI FELICE: We could refer to them ---
2769 THE CHAIRPERSON: --- the role of the CBC.
2770 MR. DI FELICE: No, in terms of their legal relationship with us, legally they would be there, right? They wouldn’t be legally a partner, but people refer to suppliers sometimes as partners or as allies.
2771 THE CHAIRPERSON: Mm-hmm. Would they have any editorial control on any of that content, the newsfeeds and so on?
2772 MR. DI FELICE: No, not at all.
2773 THE CHAIRPERSON: Okay.
2774 MR. DI FELICE: I would mention that, for example, the feed that we’re talking about is a newswire feed, essentially, of stories that are sometimes raw, sometimes complete, but they come with full scripts and so we would translate those scripts and then adapt them to ourselves for the stories that we pick and curate for our newscast. So they are the building blocks of a newscast; we are not taking the CBC newscast and simply dubbing it.
2775 Some people, I think, have tried to describe our proposal as taking existing CBC newscasts curated by CBC. We would curate our own newscasts choosing the stories that we think relevant to us, ---
2776 THE CHAIRPERSON: And this is ---
2777 MR. DI FELICE: --- complementing them with other stories and then versioning them and presenting them ourselves.
2778 THE CHAIRPERSON: I appreciate the distinction; you just said newscasts. Can you just draw a more clear bright line for me? If you take a CBC news story in its entirety -- so you said sometimes it could be the video images or it could -- the news story, I take that to mean, in effect, in its entirety -- and then recast it in another language as part of your news broadcast; is that original news?
2779 MR. DI FELICE: Yes, I think every newscaster works that way. They take newswire stories, contributed to them either from a newswire service or they take them from their own collaborators and producers, and they decide which ones to put in and then they voice them over or they introduce them. They produce them.
2780 In the case of newswire services like CBC, who also licenses that same service to Fairchild Television which produces two out of the four newscasts that OMNI is currently airing, those news stories come in and curate them. They come with scripts. We translate the scripts and then our presenters can -- if it’s a voice-over, they can voice it over or they can present the story and then we run the clip.
2781 THE CHAIRPERSON: Okay, thank you.
2782 MR. DI FELICE: We -- our internal-production-and-operations people have been looking at this more detailed description of exactly how it happens and I could read it to you. It’s about two pages long, but I don’t think you’re asking me for that.
2783 THE CHAIRPERSON: No, ---
2784 MR. DI FELICE: Okay.
2785 THE CHAIRPERSON: --- I’m not, but thank you.
2786 Moving on, VOD. So in your opening remarks and in a number of your responses, you’ve referred to a VOD offering, so you have not -- in your application, you did not include an application for -- your proposal hasn’t included, specifically, an application for a VOD service?
2787 MR. ENGELHART: Well, that’s an oversight, but yes, we intend, if the Commission thought it was appropriate, that we would have a 91H for the linear service and for the VOD service as well.
2788 THE CHAIRPERSON: And would that VOD service then include the conditions of licence -- the same conditions of licence?
2789 MR. ENGELHART: Well, the conditions of licence are really about percentages and percentages don’t really work with the VOD. The idea is that all of the stuff on the linear schedule will go on the VOD service and additional programming for the top 20 groups and for the second 20 groups will also go on the VOD service.
2790 We were talking before about how regional feeds can provide some customization, but nothing provides customization like a video on demand service because that means that the members of say the Korean community could go to that VOD service, watch the Korean news, watch the Korean public affairs programming, watch other Korean programming no matter what is on the linear, so we think VOD is a powerful part of our proposal.
2791 THE CHAIRPERSON: Would you, probably by undertaking, be prepared to file with us what you would believe to be a reasonable set of licence for a VOD service?
2792 MR. DI FELICE: Yes, absolutely.
2793 THE CHAIRPERSON: And why did you choose a VOD service that requires a BDU subscription rather than simply making the content available online?
2794 MR. ENGELHART: We think the online model is wrong. The ---
2795 THE CHAIRPERSON: This is going to come as a shock to some people.
2796 MR. ENGELHART: Yeah. The BDUs are being asked to pay 12 cents or 13 cents or 25 cents at a time when core cutting is a big problem, so the BDUs are desperately trying to keep customers on their platform, which is good for the Canadian broadcasting system. So if they’re paying 25 cents only to have that content put online where anyone can get it, that undermines their value proposition in two ways: First of all, their costs are now higher and that gives them less ability to serve their customers and secondly, core cutting is now increased because all that great content is available online.
2797 So we think the way to make it work for BDUs and for the Canadian broadcasting system is to put the programming on VOD, not on our website. Now, if the BDU in question wants to have a TV Everywhere offering, whether customers have an app and they can get all this programming on their iPad or on their computer, absolutely 100 percent of the programming we acquire or produce will have the digital rights and we would be very happy to let any BDU have a TV Everywhere offering with our service.
2798 THE CHAIRPERSON: That question was coming up, so ---
2799 MR. ENGELHART: Okay, sorry.
2800 THE CHAIRPERSON: --- thank you for that.
2801 But who’s operating the VOD service here; is it yourselves or is it the BDU?
2802 MR. ENGELHART: Well, I mean it could work either way, but I believe we would be operating it.
2803 MR. DI FELICE: I think the way it works is separating the word operating. What we would do is -- and we’ve provided financial breakdown of our costs, is encode and deliver the VOD programming to the BDUs. They have their existing VOD platforms and so currently, subscribers to channels have the ability to access additional programming that the BDUs have acquired from those channels on an authenticated basis.
2804 And that’s how we are proposing to support the system. We’re working through the existing platforms operated by the BDUs, they all have VOD platforms. We are delivering encoded programming to the ---
2805 THE CHAIRPERSON: So ---
2806 MR. DI FELICE: And they’re operating the platform, so we’re operating ---
2807 THE CHAIRPERSON: --- you’re operating ---
2808 MR. DI FELICE: --- the preparation and delivery of the programming and they’re operating the VOD platform.
2809 THE CHAIRPERSON: How do we give 9(1)(h) status to a service operated by BDU when none of them -- that have supplied -- I’m missing something in the equation here.
2810 MR. DI FELICE: I’m not sure if it’s 9(1)(h) status, but it’s an obligation on the part of the BDUs to take the programming and put it on their VOD service.
2811 Now, our experiences when we do deals with ---
2812 THE CHAIRPERSON: Sorry, mandatory distribution. I shouldn’t have said 9(1)(h), so I misspoke.
2813 MR. DI FELICE: But just to clarify.
2814 Our experience with BDUs with our current channels, which are not 9(1)(h) channels, is that the BDUs generally require a linear broadcaster to commit to providing some programming for them to put on their VOD services. So they operate VOD services and they want us to make sure that we clear rights in at least some of our programming so that they can make it available on a -- basis on those services.
2815 That’s in addition to live streaming rights that Ken referred to, the TV everywhere idea, where, for example, today I can look at my Bell 5 app on my phone and watch TLN and watch a live soccer game on the weekend on TLN. I’m watching the channel on my phone through Bell’s live streaming.
2816 THE CHAIRPERSON: Right.
2817 MR. DI FELICE: And catch-up rights, which is something else they ask us for as well.
2818 The VOD service will operate as a catch-up for programming that’s already been broadcast on a linear channel and we’re also delivering additional programming as we described to the BDUs to put on the branded Canada World VOD channel.
2819 They operate VOD platforms under channel names. The channel name in the case of the content we deliver would be Canada World.
2820 THE CHAIRPERSON: And have you discussed this type of arrangement with the BDUs and, if so, what has been their reaction?
2821 MR. DI FELICE: Well, we have ---
2822 THE CHAIRPERSON: Not the latter as much as former, the ---
2823 MR. DI FELICE: The delivery of VOD programming as I’ve discussed with the carriers for several years now because all affiliate renewals these days involve the carriers demanding that linear broadcasters go to the effort and expense of clearing rights in some programming and delivering it to the BDU separately from the linear channel itself, usually at no additional compensation, in order for the BDUs to put that programming onto the VOD platform.
2824 In this case, what we’re doing is a benefit to the BDUs. We’re not asking for more than our wholesale rate in order to do this, we’re offering to do this and asking the Commission to say to the BDUs, “It behooves you to carry this.” We would prefer that there not be a BDU where there is a gap who for one reason or another doesn’t necessarily set-up the VOD channel, although it would behoove the BDU to set up the VOD channel because it includes so much more programming than just the linear channel itself.
2825 THE CHAIRPERSON: And to be clear, at the end of the day, you are asking us to make the carriage of that VOD programming mandatory on the part of the ---
2826 MR. ENGELHART: Yes, absolutely.
2827 And I just want to make sure that we’ve satisfied your concerns there. So is it -- are you concerned that there’s a legal issue or that ---
2828 THE CHAIRPERSON: I wasn’t sure who’s offering the service.
2829 MR. ENGELHART: Yeah. I mean, a lot of the VOD today is offered by the BDUs themselves, but it doesn’t have to be that way.
2830 Something like Show Me, for example, is a VOD service that I don’t think there’s a national interest but you could compel every VDU to carry the Show Me service which is operated by Bell Media. So there’s no reason you couldn’t do that.
2831 THE CHAIRPERSON: Now, you’ve submitted in your financials costs associated with the VOD service. Is it you that assumes all of those costs or does some of them fall on the BDUs?
2832 MR. DI FELICE: So we would grant the BDUs -- in the programming that’s on our linear channel so that they could make that available on a catch-up basis.
2833 In addition, all of the complementary programming that we have promised to deliver on the VOD service, we’ve provided financial split-out of our financial projections indicating the cost of acquiring that programming, encoding that programming, and delivering that programming to the BDUs, and that cost would fall upon Canada World, and it’s already included in the financial projections that we filed.
2834 THE CHAIRPERSON: Okasy. And harkening back to my questions about the CBC, I note that you also reference the CBC in this area where you say they could provide potentially -- in the capture production to VOD assets to BDU traditional VOD/OTT VOD platforms. There’s a mouthful.
2835 MR. DI FELICE: Right.
2836 THE CHAIRPERSON: Can you again explain to me what CBCs role is here? I am ---
2837 MR. DI FELICE: Like I said before, they were excited about this prospect and this opportunity to -- and we shared the same public service ideals in our various conversations -- and so they provided us with a laundry list of potential, helpful services, programs, promotion et cetera.
2838 THE CHAIRPERSON: Would you be compensating ---
2839 MR. DI FELICE: This is one of the technical services -- pardon me?
2840 THE CHAIRPERSON: Would you be compensating them for this?
2841 MR. DI FELICE: Yes, except that the service you just described is probably not one where we’re going to do it through the CBC. Say third-party technical service.
2842 The encoding of programming and delivery to the BDUs is a technical services -- a technical service that can be provided to us by multiple suppliers. So although CBC has offered that in their laundry list of services, I don’t anticipate that that will be one of the services that we use through CBC.
2843 THE CHAIRPERSON: Okay.
2844 I think I understand how this would work with terrestrial BDUs, satellite?
2845 MR. ENGELHART: So there might even be a few terrestrial BDUs that don’ have a VOD platform in little, remote areas. So obviously you can’t mandate them to carry something they can’t carry.
2846 Most of the DPH guys have some kind of VOD capability. I know from my Star Choice at the cottage if you have an internet come into box you can download stuff to the box and then you can get VOD from that.
2847 So whatever they can do they should be mandated to do but if they can’t, obviously they can’t.
2848 THE CHAIRPERSON: And also a question about exclusive content. You’ve indicated that some of your VOD service would provide exclusive content and that is not consistent with our normal -- to VOD.
2849 How do you square that?
2850 MR. DI FELICE: I think by exclusive, we mean that it’s not content that is broadcast on the linear channel. So it’s extra content.
2851 THE CHAIRPERSON: Okay. I understand.
2852 And I guess would this strategy change in the event that we don’t approve the licencing or mandatory distribution of the VOD component as an accompanying service to the core proposal?
2853 MR. ENGELHART: We would obviously still offer it, possibly have lower costs, but we think it’s a good part of the service because it gives the third-language people customization.
2854 I mean, when you think about it, a linear channel is kind of dumb for third-language programming because you’ve got 20 different languages on there but you only speak one of them, so you’d turn your TV on and you’ve got a 1 in 20 chance of watching something you like, whereas if it’s on VOD there is 24/7, everything you want, and we think that a third-language service should be on VOD; it only makes sense.
2855 THE CHAIRPERSON: Okay, given that, and this one you’ll want to read in the transcript because I don’t think you’re going to absorb it on the spot or maybe you will.
2856 Then I’d like you to accept an Undertaking, if you would, to confirm whether the VOD service that forms part of your application would abide by the standard conditions of licence for on-demand services as set-out in the standard requirements for on-demand services, broadcasting regulatory policy, CRTC 2017 138, and, if not, I assume you will provide an explanation as to why not. But in any event, please provide the accompanying rationale.
2857 MR. ENGELHART: Yes, thank you.
2858 UNDERTAKING / ENGAGEMENT
2859 THE CHAIRPERSON: You can probably cite the decision or the guidelines back to me, Mr. Engelhart.
2860 So moving on, away from VOD, governance structure. Could you -- would you be willing to accept a condition of licence requiring that an advisory board submit a report to the Commission once a year?
2861 MR. CHANDRASEKAR:Absolutely, sir. You know, we are real believers and proponents of advisory councils. I've been part of it for many, many years. It was originally, I think, to the best of our knowledge, was floated by a visionary name, Mr. Danny Iannuzzi who founded CFMT, Channel 47, which later became OMNI. And in that application itself, there was mention of an advisory council. In fact, we followed that as a footstep since then.
2862 When we made our first Category A licence application as a legacy service almost a little over 20 years ago, we did come up with a concept that we would set up an advisory council, and it was a fabulous concept and was tremendously helpful for us.
2863 Mind you, in those days, the advisory council numbers were a little too large, and I had 45 names on the advisory council 22 years ago.
2864 So in reality, the advisory council is only as good as, frankly, how we really utilize it as well. In other words, you know, advisory councils sometimes can be very useful, sometimes can just become window dressing. In our experience in the past, we have tremendously gained from the wisdom and knowledge of people in the advisory council. It’s the calibre of people that we select. It’s the kind of commitment that they make, and there are people in the community who would go beyond the call of duty to be part of a service such as ours and to be part of an advisory council.
2865 So we would certainly undertake -- the numbers may be much smaller now because we have become much more refined compared to what we had done many years ago, but it will be an integral part, definitely, of our service.
2866 THE CHAIRPERSON: Thank you.
2867 So moving on to the next jeopardy category, financial questions. So you’ve taken a fairly conservative approach with respect to advertising revenues. Let’s start perhaps by contrasting or comparing them and the source confidence you have in them as compared to those provided by Rogers, who have obviously current experience in the market with respect to operating a similar service.
2868 So I don’t know where you want to begin, but your forecasts are -- well, perhaps just talk about the veracity of your forecasts to begin.
2869 MR. DI FELICE: In terms of where our numbers came from, we had a number of touch points that we looked at. We looked at Rogers’ own 2016 OMNI regional forecast which had advertising revenues there in the range of 2 million. We looked at the fact that this is a start-up operation. We looked at our own experience selling multi-ethnic in language advertising, which is as comprehensive as Rogers’ experience. We took into account that this is a single channel, and other factors, we’re looking at just an average price around the clock at an 80 percent sellout during the prime parts of the schedule, and all of those factors allowed us to make a conservative estimate of $2 million.
2870 We’ve said in our brief and we’ve, since our brief, made further comments on our optimism of overachieving this. Part of that optimism comes from the encouragement we received from the media agencies we spoke to. There are a couple of dozen major national media buying agencies that actually provided letters of support for this concept. So we were encouraged by that. They liked the concept. They liked the brand. They liked the premium nature of the brand. And we were encouraged to think that there is an ability to have charter sponsors come on board, which we have previous experience with.
2871 When we launched an all-Italian channel in Canada a few years ago, we had some of them on board, a dozen of them as charter sponsors to actually present the channel as something brought to Canadians, the Italian community, by them. We think that something similar can happen on a larger scale with a channel like the brank that we’ve created.
2872 The other factors that we took into account were the idea that by the time this channel launches, set-top box data will become available. And that is one of the limitations, the lack of audience measurements that Rogers and others have pointed to as one of the limitations.
2873 So for example, most of our channels, except for TLN, are not even measured by the Numeris audience rating system.
2874 THE CHAIRPERSON: M’hm.
2875 MR. DI FELICE: That will be solved for Canada World.
2876 The other idea that we think is going to develop over time and help us overachieve our estimates is the possibility of dynamic add insertion on that VOD content that we’re delivering to the BDUs. So the BDUs like Rogers have developed dynamic and insertion technology that they will offer to content providers on a shared-revenue basis that allows the content providers to place ads even on the VOD content, not just on the linear channel. That is another revenue-generating opportunity.
2877 And finally, another factor, a limiting factor that we took into account on our $2 million estimate would be the fact that we have stated that we wouldn’t accept local ads on the channel because immigrant-language programming, the marketplace we’re in, would be adversely affected for -- whoever is the 9(1)(h) who runs this channel is going to have a huge competitive advantage over anybody else doing Canadian ethnic television and selling advertising on it because they have 100 percent distribution and a guaranteed fee. That will impact not only local radio, local print, local television, but it will specifically impact the other players in the Canadian ethnic television landscape.
2878 We’re cognizant of that and our supplementary brief said that we believe that the impact on the overall vitality of the various players who are doing Canadian ethnic television services needs to be consideration. So giving the applicant that added advantage over everyone else could have the unintended consequence of actually reducing the amount of Canadian-based ethnic television available in the marketplace and the viability of other services.
2879 For that reason, we said we won’t run local ads.
2880 THE CHAIRPERSON: Which will save me asking you if you’ll accept those conditions of licence that you’ve heard.
2881 MR. DI FELICE: Right.
2882 THE CHAIRPERSON: Or a prohibition.
2883 MR. DI FELICE: We would also urge you, in the event we’re not successful, not to allow local ads.
2884 THE CHAIRPERSON: Understood. You’ve answered a number of my questions in the course of that last response, but I will just turn back to it for a second.
2885 So Rogers has expressed the view that the ethnic advertising market is migrating to digital ethnic services quite quickly. Can you comment on that observation?
2886 MR. ENGELHART: Yes, and I’m sure Shan and Aldo will want to jump in.
2887 You know, Rogers sort of identified two reasons for what they are perceiving is the decline in advertising from their service. They’re no longer running the North-American strip programming, the U.S. strip programming, the migration that you’ve talked about.
2888 As Malcom Dunlop said yesterday, a third factor could be that Rogers is just selling their language advertising wrong. They’re using an integrated sales force. And the point that Malcom made for Amber was it’s very hard when salespeople have multiple products because they always want to sell their favourite product, and language advertising is never anyone’s favourite product. It’s a hard sell.
2889 So we absolutely have -- and Shan can jump in when I’m done -- we’ve seen a decline in advertising for third-language programming, but we believe that we know how to sell it and we can hopefully overachieve on sales.
2890 THE CHAIRPERSON: And can you elaborate a little bit on how you’ll sell it?
2891 MR. ENGELHART: Yeah, I’ll ask Shan to answer that.
2892 DR. CHANDRASEKAR: I'll ask Prakash to answer because he's in charge -- he's Vice-President of Sales of our company.
2893 THE CHAIRPERSON: Thank you.
2894 MR. NAIDOO: Well, we will have a salesforce that would be selling the channel unto itself across the -- with the national advertising agencies, and they could be in the form of sponsorships for certain specialty programming that we bring and certain newscasts whereby the 6 o'clock news is brought to you by X organization, et cetera. There will be a premium attached to some of these properties, and as Aldo said, we will have measurement for this channel so we will be able to justify numbers and viewership to be able to up the ante on the advertising revenues.
2895 THE CHAIRPERSON: Thank you. All right. The next couple of questions I think will predominantly be by undertaking.
2896 Back to your relationship with the CBC. We don't have any breakout in your forecasts about -- in relation to the costs associated with CBC‑acquired programming. So I'll quickly go through these and you can answer generally if you want; and otherwise, I expect you may wish to take an undertaking.
2897 So I'd like to know a little bit about the savings and efficiencies expected as a result of acquiring programming from the CBC rather than producing it in‑house; a detailed breakdown of projected programming costs of the programming to be acquired from CBC, as well as the costs associated with CBC‑supplied operational and promotional support; and if you could tell us what proportion of programming costs would be for raw news footage to be incorporated into the production or original first run news, and what would be the proportion for acquiring other programming. Current affairs. Whether it's things like Power & Politics or Marketplace, whatever.
2898 So I'm guessing you're going to take that one via a undertaking?
2899 MR. DI FELICE: Yes, we will.
2900 UNDERTAKING / ENGAGEMENT
2901 THE CHAIRPERSON: Similarly, you have annual decreases in all of your expense categories over the prospective licence term, which runs contrary to most of the proposals that we have seen. You stated in one of your interventions that, I guess simply put, it's customary for costs to be higher at the start-up phase and decline over time.
2902 But could you detail some of the efficiencies that you expect to generate such significant declines and expenses over the prospective licence term? And for the scenario in which your projected decline in expenses doesn't materialize, can you discuss the impact on your plans or the viability of your plan?
2903 Again, I'm assuming I'll get a yes.
2904 MR. DI FELICE: Yes.
2905 UNDERTAKING / ENGAGEMENT
2906 THE CHAIRPERSON: Well done. We'll continue in this vein.
2907 So going to the rate, which is obviously one of the lowest rates that we have seen, and as you noted in your opening remarks you do project to accumulate a loss initially over the prospective term. What do you do if your revenue projections don't materialize?
2908 MR. ENGELHART: Yeah. I mean, we have definitely set a challenge for ourselves. So some of the other applicants are saying they would not only like to have an extraordinary 9(1)(h) order, but also a guaranteed licence to print money on Day 1. And we don't think that that is appropriate. If you're getting an extraordinary rate, you should also have to earn it.
2909 So we have set a business plan that has -- with conservative advertising revenues has us digging a bit of a hole for ourselves, and the way to get out of that hole is by exceeding our expectations or our projections on advertising.
2910 So that's the plan. We're going to try and really sell a lot of advertising, which shouldn't be impossible. I mean, it's $2 million a year. So with the kind of advertising and language sales that Telelatino and ATN can generate currently, we think it's achievable to increase that. And so we're pretty confident that by the end of the licence term we will be out of that hole, and beyond that we don't have any plans for how to get out of that hole, but these are well financed shareholders and they can absorb that during the first licence term.
2911 THE CHAIRPERSON: But it is, for lack of a better term, you know, razor thin margins, and as you said, you have to be confident in the advertising revenues, you have to be confident in the decline in expenses. There is a lot of moving parts of there, any number of which could result in less profitability than you anticipate, than the applicant anticipates.
2912 And -- well, it generates some concern on our part about will you be able to fulfill your proposals, your commitments?
2913 MR. ENGELHART: Absolutely. And I'll let my colleagues jump because they're the ones who are going to have to absorb those losses. But you know, it's easy just to have a high rate and to say, well, you know, the BDUs are a piggybank and we can get more money from the piggybank. But cord cutting is a problem, and the BDUs are facing risk.
2914 And we were particularly guided by the fact that when we did market research and when Rogers did market research the really relevant question is not what third language people would be willing to pay for this service, but what would all Canadians be willing to pay for this service. And the majority of all Canadians were willing to pay 12 to 15 cents for a third language service. And so that was -- we tried to create a business plan to achieve that kind of modest fee, and it creates challenges for us.
2915 So -- I don't know. Shan, do you want to say something?
2916 MR. NAIDOO: I just wanted to add that in our projections we've accounted for an 80 percent sellout during primetime. That would bring us a revenue number of approximately $2 million per annum. We have not really accounted for selling any advertising off prime, and there is revenue to be realized from that area of the schedule as well which we could potentially be offering very special incentives. If you purchase in primetime or you purchase non‑prime, you could have break at prime, et cetera, and this is the way we could increase our advertising revenues. It's one of the ways, at least.
2917 THE CHAIRPERSON: Maybe before I leave this particular point of questioning, just what's your view on the long-term viability if the prospective licence term is just break even?
2918 MR. DI FELICE: We are incredibly excited about this opportunity. We have, and I have spoken to Shan at length about this, gone through much more difficult situations than having a service with 100 percent distribution. We have been selling advertising in services that had marginal distribution on some of our services, and Shan has as well. We have sold more advertising on those services, and the Commission has actually asked us to respond to questions as to why our estimates were too low. Because we have a practice of selling more than the numbers we put into this service as a start-up on our other services.
2919 So we're quite used to having start-up losses, and we're quite used to selling multi-ethnic television with limitations that are much greater than the limitations that would be on this service. This service will represent multiculturalism in Canada. We think that charter sponsors, institutions, government advertising, and major corporations will want to associate with a quality service that represents multiculturalism and is meant for all Canadians. That's the premium brand that media buying agencies would prefer and we think that we’re going to be able to bring that to them much easier than we’ve accomplished more difficult tasks selling individual channels that have less of those advantages.
2920 So those are the discussions we’ve had and we’ve weathered startup losses. Startup losses are to be expected. The long-term prospects for the channel are excellent.
2921 THE CHAIRPERSON: Thank you.
2922 DR. CHANDRASEKAR: Sir, we just got to give you a little bit of a personal example really because we guys are, you know, from grass root level.
2923 Back in 1996, when CRTC approved our license we were absolutely ecstatic and I have to tell you that was the best day in my life. First time that we have this national license that we had for a category A license, I felt like a king without a kingdom and a minister without portfolio, because there was no carriage.
2924 Very soon I began to realize that it’s fantastic to have this great piece of paper, but videos in those days they’re not as friendly as what they are now, but things were very difficult in those days.
2925 So we were battling up and down with great difficulty. We first managed to get it on Bell ExpressVu; the new satellite that came out.
2926 It was quite, you know, an exciting period for us, but then it was exorbitantly expensive for the community because the satellite dish in those days was $1,400 and the installation was about $499, so members of my community had to take a third mortgage on their house to subscribe to service. It was that difficult in those days.
2927 In fact, when the first channel number was allocated for me, my channel number was higher than my subscriber number.
2929 DR. CHANDRASEKAR: We built it from brick by brick, you know, from that level and it was not easy and it didn’t take very long because we had the courage of conviction that no matter what happened we were going to make the service successful.
2930 And we built it up eventually to the point, finally, where in the last 10 years of our license term, approximately, you know, we generated probably about $700 - $800 million for the cable company and about $170 million for ourselves in which we spent little over $70 million in Canadian content. We are very, very proud of our Canadian content production.
2931 So we may not be as big as producing “Quantico”. We’re not at that level, but we have produced incredible content, compelling content and it is no longer an excuse for us these -– the commitment that we have, whatever limited commitment that we have, is not an excuse for us to hang our hat on a CRTC regulation. We do it because we sincerely believe that Canadian content will sell.
2932 We believe that there is a business in there. We believe that under those circumstances, if we can make these fledgling services somewhat and bring it to this stage -– not all our channels are successful. There are several fledgling services that we have, but we have made a commitment that the successful channels will somehow or rather, whatever we get out of that, will cross-subsidize the smaller communities. In principal we have been doing it for years now.
2933 So the concept is not new for us. We are in it 24 hours a day with -– now with an option for a service like this with 10.2 million is fantastic.
2934 Mind you, 11 million would have been even better, but unfortunately piracy has caused a lot of that problem. It’s not just people are moving to Netflix alone. We’ve had a tremendous amount of piracy boxes on digital boxes that are eating away the revenue for Canadian Broadcast System.
2935 And you’re being very kind. You’ve referred us now to another source because it was not in your jurisdiction. But with copyright board now we’ve taken actions along those lines. We’ve met with the ministers and we’ve taken action and that. We are hoping that if we are able to resolve that issue within the next one to two years, not only for us, any of the applicants by God’s grace it would help them, because this bleeding has got to stop in this country.
2936 That 10.2 million should not be coming down. We have to help the BDUs. They have to stay up. People cannot leave the regulated system in this country, because it doesn’t matter what great delusion of grandeur we all have, if we don’t tackle that problem all of this is water under the bridge. It’s down the drain.
2937 So we are very passionately involved. We strongly believe that we will take a parallel approach that we will fight piracy in this country. We will bring those subscriber numbers up. We want to take back those 11 million.
2938 We do realize that there’ll be a natural attrition that will go to the millennials who will switch to digital. We’re not worried about that. But there is still an influx of new immigrants constantly coming into the country.
2939 We might even create some digital immigrants before they can even arrive in this country, we will make them one of the conditions of license that they should probably be subscribing to Canadian basic.
2941 DR. CHANDRASEKAR: So that’s how passionately we feel about this, sir. You know, I’m exaggerating a little bit, but the whole idea is that ---
2943 THE CHAIRMAN: That would have been a great place to stop my questions, but I do have a couple more –- just a couple of more granular questions --
2944 DR. CHANDRASEKAR: Okay, sir.
2945 THE CHAIRMAN: -- which will seem very anti-climactic now and then my colleagues and Commission staff may have a couple of things.
2946 So just your -– so when you -– when the CRTC asked -– gave you the opportunity to revise projections along with CRTC reported subscriber information, you indicated, I think, it was a 4.1 million shortfall. That and you anticipate that it be offset by increased national advertising revenues, so, basically, you can make up the shortfall.
2947 Can you just discuss that? Can you enlighten me a little bit? What makes you think -- what made you think you can make up that 4.1 million shortfall? What changed?
2948 MR. ENGELHART: Well the fact that in our opening remarks I asked you for 13 cents indicates that we got ---
2949 THE CHAIRPERSON: What happened? You didn’t really mean it? Is that what you’re saying?
2950 MR. ENGELHART: We got cold feet. We thought about it a little more. We thought that’s a big hole, you know, in ---
2951 THE CHAIRPERSON: I forgot my first question; you’re right. Now I know the answer to my last question.
2952 MR. ENGELHART: So I mean we set ourselves a business plan with a one and a half million-dollar hole over the first five years, and we’ve described and Prakash has described, how we can exceed our advertising estimates to fill that hole.
2953 Yeah, on September 28th I thought we could -– we thought we could fill a 4 and a half million bigger hole and I’m not sure that we can.
2954 THE CHAIRPERSON: Okay.
2955 MR. ENGELHART: It’s going to be ---
2956 THE CHAIRPERSON: That’s fair.
2957 MR. ENGELAHRT: Yeah.
2958 THE CHAIRPERSON: But could you, in the event it’s still relevant, can you prevent updated advertising revenue projections just reflecting the increased -– your anticipated ability to sell more national advertising?
2959 MR. ENGELHART: I mean we can, but really what we’re saying is if it’s ---
2960 THE CHAIRPERSON: You don’t have to. That’s what I meant. If you still want to.
2961 MR. ENGELHART: And what we’ve said is here’s a conservative number. It digs a hole for us. We end up in a loss situation, so now we have to exceed that. So yeah, we can give you revised numbers, but really all we’re saying is we better exceed those conservative estimates or we’re going to be incurring losses for five years.
2962 THE CHAIRPERSON: Well you took an undertaking to let us see your projections based on a one cent increase --
2963 MR. ENGELHART: Yes.
2964 THE CHAIRPERSON: -- so we can probably see the relevant differences if any on the advertising projections as you respond to that first undertaking.
2965 MR. DI FELICE: Yes. What I would add, if I may, is that it was not so much a change of heart or a diminishment in our enthusiasm and optimism about our exceeding our conservative estimates, it was more conversations in October where we thought well that enthusiasm and confidence might not be shared by the Commission.
2966 So it’s not so much that we’re changing our mind, but we were anticipating that the Commission may not have the same perspective as we do about our history of overcoming these kinds of challenges and our confidence in our ability to overcome that challenge.
2967 There are day-to-day developments in our conversations with people about our license, because we’re having -– we’re running the businesses that we have today and talking to advertisers already - some of whom have already supported us - who are increasingly making us confident about it, but we also realize that the number may make the Commission nervous about the stability.
2968 One of the conversations I’ve recently had is with a major airline and we’re confident that there will be ancillary sources of revenue including the potential to create a branded in-flight entertainment channel populated by the programming that we’re talking about for VOD for Canada World.
2969 And the enthusiasm with which our concept is being received by the people we talk to continues to make us excited, but we realize the Commission is not there with us in those meetings, so I think that is sort of colour background as to why we are where we are today.
2970 THE CHAIRPERSON: I’m assuming the answer to the first question I asked though is still 13?
2971 MR. ENGELHART: Yes.
2972 THE CHAIRPERSON: Thank you.
2973 DR. CHANDRASEKAR: But you can calculate 12 cent as a rate and 1 cent as a tip.
2975 THE CHAIRPERSON: This truly seems anticlimactic, just on your CAPEX expenditures, you have 5 million in year 1, an additional 1 million in each subsequent year. Can you provide a detailed breakdown, please, in an undertaking, of those capital expenditures?
2976 MR. ENGELHART: Yes, we will.
2977 UNDERTAKING / ENGAGEMENT THE CHAIRPERSON: Thank you. I will end my questions. My colleagues may have some. Madame Simard?
2978 COMMISSIONER SIMARD: Thank you, Mr. Chairman. I have some questions for you. The first one, I would be interested in getting more information about your news services. How many journalists would you hire to offer this service?
2979 MR. DI FLEICE: We’ve talked a lot about this and our numbers are based on the idea that -- just stepping back for a second -- the core of this service is the news and -- the news that we’re doing daily. And with respect to that, we have back office staff already, we share administration facilities, we share production studios, we have technical facilities, we have broadcast facilities. It’s the actual news production crew that we’re talking about.
2980 And when we break down the languages that we would have to produce in, one third of the languages are languages with which Shan and ATN are familiar and already operating. Another third of the languages are euro or Latino languages, half of which we are familiar with and we have contacts, and correspondence, and colleagues that operate in those languages. And then another third of those languages are languages that we aren’t familiar with and we don’t have staffing with respect to those languages.
2981 So in our mind, with that background, we believe that 15 to 20 full-time staff will be able to produce the newscasts that we’re contemplating producing, as well as doing other parts of the channel. But primarily, the news production.
2982 COMMISSIONER SIMARD: And based on your experience, are we talking about the same skills for those journalists compared to like, journalists in general that would cover local news for example?
2983 MR. DI FELICE: I think it’s a little bit of a fallacy that sometimes people are promoting the idea that we’re not familiar with news gathering. Both ATN and TLN are doing news gathering on a daily basis already, we’re just not combining it into half hour newscasts. So the people that we work with are journalists. One example is Camilla Gonzalez here, who is a fourth-year journalism student who is also working with TLN on an almost full-time basis.
2984 So in terms of skill level, we’re already operating with people who have journalism backgrounds. The producer of our weekly half hour Hola News segment is a Chilean journalist. So yes, the people that we would be hiring would be specifically people who could be both on-air and we’d have a news director, we’d have a general manager, we’d have an assignment editor for news purposes, and then specialists in the languages that need to be presented.
2985 COMMISSIONER SIMARD: A couple of minutes ago you just mentioned that you already share offices and I guess some resources.
2986 MR. DI FELICE: What I mean by share, I mean we both have -- sorry, maybe I misspoke. We both have equivalent master control facilities, back office, administration, traffic, et cetera, production studios.
2987 COMMISSIONER SIMARD: Because a question I had was I’m curious to know if you have discussed and envisioned some, I guess, adjustments that would be needed because of, I guess, different backgrounds or different visions. So have you discussed about that and if so, what I guess -- what do you envision in order to ensure a smooth transition?
2988 MR. DI FELICE: Well, this would be a stand-alone operation. So the people we talked about would be dedicated only to CanadaWorld. In terms of a smooth transition, I just want to underline that we are going to be getting our source material from not only our collaborators across the country who will be journalists, but also the most experienced news gathering organizations in the country, CBC, Global News, Canadian Press. They already employ journalists across the country to gather news.
2989 We are able to do what we want to do because of the fact that we are going to be able to take advantage of that professional news gathering capability. So yes, we have talked about it. If your concern is that we’re deploying people who are not experienced in doing something that they’re not familiar with, then that’s not our intention.
2990 COMMISSIONER SIMARD: Thank you. Another question, and you have already discussed that, but I just want to be sure that it’s clear in my mind. At some point you said that you created a business plan, so it is -- it complies with this range of 12 cents to 15 cents. And you also mentioned that in your views there’s a need just for one feed. So is it like -- is there a need just for one feed because it is your vision, or it is because you made the math and it would be too expensive to add another, or other feeds?
2991 MR. ENGELHART: So there’s two advantages that are to having regional feeds. One advantage is you could have a different mix of languages in different parts of the country. So if there’s more people that speak Russian in the eastern part of the country, then maybe Russian would be on your eastern feed, but not be on your western feed. I think that’s unnecessary because we have our VOD concept. So we, in effect, have an infinite number of feeds where the Russian speakers can get that programming from the VOD service.
2992 The other advantage of having a regional feed is that you could customize the news, so it was of more interest to people in Montreal, or more interest to people in Vancouver for the reasons we’ve discussed. We think for language news people are interested in what their language community is doing in Canada.
2993 So the benefits of regional feed to us seemed weak, especially with our companion view service. And the services that ATN and TLN operate are national services and they serve the language communities well. So that’s -- and it is of course cheaper, so that’s where we came out and what we came at.
2994 COMMISSIONER SIMARD: Good. Thank you. You have probably heard that some parties argue that this licence shouldn’t be granted to a vertically integrated entity. So I would be interested in hearing your opinion on this question.
2995 MR. ENGELHART: The problem, I think, is not so much that they’re vertically integrated. The problem is that they’re so big. You know, a company like Rogers who I obviously have the greatest respect for, you know, they have $14 billion of revenue in their cable and wireless businesses, $5 of $6 billion EBITDA generated from that money.
2996 So what impact does OMNI have on Rogers’ bottom line? None. It’s just too small. Quite frankly, SportsNet, which is a broadcasting powerhouse doesn’t have much impact on Rogers’ bottom line. The whole of Rogers Media generates, I think $200 million of EBITDA, which is very, very small compared to wireless and cable.
2997 So something like OMNI can get lost, it can get missed, it can fall behind. They can lose track of it and it can -- it can falter. And I think that’s what’s happened. And I’m sure the people from Rogers who spoke to you today have nothing but the best intentions, and they are the strongest people that you can imagine. But a service like this can’t get lost with Shan and Aldo. Multicultural programming is all they’ve got. This is a huge part of their business.
2998 So I think the problem with the vertically integrated companies is they’re just too big to care as passionately about a service like this as standalone multicultural broadcasters.
2999 COMMISSIONER SIMARD: Last question I think, I would like you to tell me that compliance is important with our rules. It seems obvious, but there was a decision in 2017 where the Commission found Telelatino in non‑compliance, which sets conditions of licence for CPE. So I would like to give you the opportunity to, I guess, discuss about it, to tell us that compliance is important for you.
3000 MR. DI FELICE: Yes. I think we have over our 34-year history, but certainly during my time, a record of compliance that is -- we're proud of, and I'm especially concerned about compliance. I'm trained as a lawyer and I've impressed it upon all our staff that we need to comply with all our conditions of licence and -- so I find it a personal obligation and not only a business obligation and a legal obligation to the Regulator. So it's especially important to us, and I'm sure it is to Shan as well.
3001 In terms of deliberate non‑compliance, that's never happened to my knowledge in our company and we would never permit it. In terms of that incident of non‑compliance that you're speaking of, I know where that came from and that was an accounting reporting issue regarding how to properly account for productions, which over the last few years we've started to attract investment in our productions, and the manner in which that investment is counted for CPE is different than it was being reported by our Accounting Department at the time. A previous accountant, not our staff here. That is what created the CPE shortfall.
3002 But I'm glad to say that we immediately addressed it and we also caught up and exceeded our total CPE obligation for our last licence term, as reflected in our annual reports. But all I can say is that, yes, personally and as a lawyer, as a businessperson, compliance with the Regulator's rules is absolutely paramount.
3003 COMMISSIONER SIMARD: Thank you very much. Thank you for your presentation, for answering our questions, and thank you for your submission.
3004 THE CHAIRPERSON: Commissioner Laizner?
3005 COMMISSIONER LAIZNER: Good afternoon. I have a few questions about your sourcing from other news services, your news gathering from CBC, Global, and the others.
3006 Are we to understand that there is to be zero dubbing of those stories? When you talk about voiceovers, it just raises that question to me about what exactly you're doing.
3007 MR. DI FELICE: Well, the news services will collect stories, and if they're raw footage there will be nothing to dub, it'll be -- it will need to be voiced and created and it will need to be introduced. That's all third language, and we'd be responsible for doing that.
3008 Depending on what stories we're taking, if they're fully produced stories in a different language in English then we would have to remove the English content. And the content comes in with two tracks, so that we can then add the Spanish, Italian, Punjabi, or other language.
3009 So depending on how the news comes in -- now, if it's an on‑air report, we would not be likely to use that because our intention is not to dub reporters who are on‑air in other languages, or anchors who are on‑air in other languages. We need to create a quality newscast.
3010 As I said earlier, our broadcast operations manager has been looking into how the production workflow would work and looking at the different newsgathering sources and how things would come in, and we have a detailed description of what the flow would be. Once again, I -- if I read it it may make more sense to you, but it might take a while.
3011 COMMISSIONER LAIZNER: Okay. So I get what you're saying about raw footage, but when you talk about complete stories ---
3012 MR. DI FELICE: Right.
3013 COMMISSIONER LAIZNER: --- are you dubbing those?
3014 MR. DI FELICE: So complete stories can come in different ways. The ones that we would be using would only be the ones where there is no on‑air presenter. So if it is ---
3015 COMMISSIONER LAIZNER: Okay.
3016 MR. DI FELICE: --- if there is a story and video, we need to take out the story, the audio and replace it with our own audio. So we need to take the scripts, because these stories come in with scripts, we need to translate those scripts and then our presenter needs to replace the presenter of that news story from English to the language -- the third language.
3017 COMMISSIONER LAIZNER: So you're taking the other news services script, translating that, and then having somebody else speak it?
3018 MR. DI FELICE: Correct. That would then create the news story. That news story would ---
3019 COMMISSIONER LAIZNER: And you consider that ---
3020 MR. DI FELICE: --- need to ---
3021 COMMISSIONER LAIZNER: --- to be original first run programming?
3022 MR. DI FELICE: Yes, because broadcasters who take that story and include it in the newscast without doing that extra step I've just described consider that original first run programming because these are the raw elements of the creation of a newscast.
3023 What I would add is that once that story is created, we still need somebody anchoring or introducing that story. And that's also our original -- that's our original production.
3024 COMMISSIONER LAIZNER: So do you have a threshold or a maximum amount of, if I can call it repurposed content that you would consider to be original and first run in that scenario of the complete story where you're translating, you know, the audio that was done in English and then you're having somebody else read it?
3025 MR. DI FELICE: Okay. So that will be variable because we have our own stories coming from people that we have across the country, and then we have news service -- newswire stories. And depending on how those newswire stories are curated and which versions they are, whether they're raw footage with nothing or whether they're complete stories with audio and video edited in which case we're replacing the voice, and then we curate those, depending on which ones we take, which configuration each day, depending on the news of the day. I don't have a proportion. If you're ---
3026 COMMISSIONER LAIZNER: But I'm talking about the example that I just gave you. So how do you consider that particular example? So you have a complete story. You have the English run story by way of example on CBC.
3027 MR. DI FELICE: M'hm.
3028 COMMISSIONER LAIZNER: You take that English story, script, you translate it to another language and you have somebody else speak it. At what point is the threshold for you of acceptability as original first run?
3029 MR. DI FELICE: That would ---
3030 COMMISSIONER LAIZNER: Or would you have to kind of package it all with something else?
3031 MR. DI FELICE: Well, it would need to be packaged with something else because that would be a single story. But the ---
3032 COMMISSIONER LAIZNER: Right.
3033 MR. DI FELICE: --- ultimate newscast would be original first run. That is one story within a series of stories on a newscast.
3034 COMMISSIONER LAIZNER: Okay.
3035 MR. DI FELICE: I am not sure if I am understanding the question correctly?
3036 COMMISSIONER LAIZNER: Well, I think where I'm getting a little bit confused is as to how much of what you're taking from news that you gathered is somebody else's news that you're translating the script of and then just having a journalist ---
3037 MR. DI FELICE: Okay.
3038 COMMISSIONER LAIZNER: --- portray it?
3039 MR. DI FELICE: Sure. One thing I would add before having Shan discuss this as well, is that perhaps we're not distinguishing between CBC's complete newscasts, which is not what we're doing. We're not taking CBC's newscasts ---
3040 COMMISSIONER LAIZNER: Right.
3041 MR. DI FELICE: --- and taking the script for CBC's newscasts and then versioning that newscast.
3042 COMMISSIONER LAIZNER: Okay.
3043 MR. DI FELICE: Right? We are assembling our own newscast.
3044 I think the confusion may arise here because CBC is the name behind the newscast they put on, and CBC is also the name behind the syndication service. So they're also sending out the building blocks of the newscast.
3045 COMMISSIONER LAIZNER: Right. Okay.
3046 MR. DI FELICE: We are subscribing to their service that gives us the building blocks of a newscast which we are taking, curating, changing, introducing, and then creating our own newscast. We are not taking their finished newscast and versioning it, which I think maybe is ---
3047 COMMISSIONER LAIZNER: Okay. All right.
3048 MR. DI FELICE: --- the distinction.
3049 COMMISSIONER LAIZNER: Yeah. Okay. Again ---
3050 DR. CHANDRASEKAR: Sorry. Just to add a little bit more to it, just as an example. We've just -- you know, Prime Minister Right Honourable Justin Trudeau is visiting Paris and he is in Singapore. Obviously, we may not have -- we cannot afford a crew to send all the way from here to Singapore or for Paris, but CBC crew is already there, they are covering it, they're sending the material. So the top story that the Prime Minister visit so and so, and negotiations are going on with the European Common Union, a new trade deal is being done with Canada, all that will be headline news.
3051 That will run for 2 or 3‑minutes. There may be one more top story about Donald Trump that they have access. That may be another short story. But after that, the Polish newscast content will be very different from the Punjabi newscast content, because the same day Punjabi newscast, suppose another (inaudible) is going on in Surrey, B.C. with 200,000 people marching for Baisakhi Festival for that matter. That would become an integral part of that Punjabi newscast; whereas, that will not be in the Polish newscast.
3052 COMMISSIONER LAIZNER: Okay. I've got it. All right.
3053 MR. DI FELICE: If I could add more thing just to further clarify or further ---
3054 COMMISSIONER LAIZNER: You're doing pretty well.
3055 MR. DI FELICE: Well, I'll either further clarify or mystify.
3056 THE CHAIRMAN: I'd stop at clarify.
3057 COMMISSIONER LAIZNER: You know what they say when you're a lawyer.
3059 MR. DI FELICE: I shouldn't have admitted that.
3060 The -- just by comparison, the OMNI newscast right now, the Italian newscast, for example, with which I'm very familiar, they will take complete stories from the international broadcaster, REI from Italy, and run them in their totality. That counts as original first run programming when that's taken and put into a newscast that consists of other stories as well.
3061 Taken alone, it's clearly not original first run programming. It's a pre-produced piece from somebody else, not even Canadian, that is filling the time in a total newscast, but that counts as original first run programming, just to keep things in perspective.
3062 COMMISSIONER LAIZNER: Okay. Fair enough.
3063 All right. So the other question I had related to the VDO -- the VOD concept/service. And so we don't have an application before us. You've indicated that you would put one in, so we're late in the day on this public receipting, so we'll have to consider that. But in context of that application, I think it would be important to have your explanation of how under 9(1)(h) we could authorise a mandatory distribution, given that the history of the Commission is to consider VODs as programming undertakings.
3064 So I think we can do that by way of undertaking, but we'd certainly be interested in that legal issue.
3065 MR. ENGELHART: Of course we'll comment on that. I obviously thought about this too before I came here and, you know, the definition if 9(1)(h) refers to programming services and VOD's a programming service. So legally there's no problem.
3066 COMMISSIONER LAIZNER: Well, I think if you look at some of our previous decisions, I'm looking at 97-83, we characterise the VOD service as one that provides programs as defined by the Broadcasting Act transmitted by means of telecommunication where the individual consumers select the specific programs. But in the 9(1)(h) we're authorising a licensee that's authorised to carry on a distribution undertaking to carry something. So I'm just not quite sure how that fits.
3067 MR. ENGELHART: We will give it some thought and give you a ---
3068 COMMISSIONER LAIZNER: Okay.
3069 MR. ENGELHART: --- more complete answer.
3070 COMMISSIONER LAIZNER: Okay. Thank you.
3071 THE CHAIRMAN: Commission counsel, do you have questions?
3072 MR. BOWLES: I have a few brief questions. I believe co-counsel has some questions as well.
3073 But just to start off, I'd like to note for the record that the applicant has been provided with some confidential questions relating to the ownership structure of the proposed undertaking. Responses to these questions are to be provided by the 6th December deadline for undertakings.
3074 I'd also like to note that an abridged version will be provided for the public record and can be accessed in the public examination room.
3075 Just a few questions. Hopefully these are brief and won't command more than an answer on your part.
3076 You have requested a 7-year license term and a seven-year 9(1)(h) order. In the event that you're granted a 5-year license and a 5-year 9(1)(h) order would this have any impact on your proposed COLs?
3077 MR. DI FELICE: No, it would not.
3078 MR. BOWLES: Okay. Thank you.
3079 I'd also just like to close the loop on a conversation that was had with the Chair about original first run programming commitments, specifically the 43 hours that were being discussed on news and information programming. You've provided a little bit more clarity on exactly what that was, but I'm not sure I heard whether you would commit to -- this is a little bit redundant, but to have that commitment reflective as a condition of license.
3080 MR. DI FELICE: Yes, we would.
3081 MR. BOWLES: My last question -- and I apologise. A lot has been going on, so part of this, if not all, might have already been answered through various previous questions.
3082 The proposed VOD service contemplates additional programming, so programming that would not have been created for the linear service. Has the cost associated with producing that programming been factored into those wholesale rate?
3083 MR. DI FELICE: Yes, it has. The wholesale rate does not change as a result of the VOD service. When you say the cost of producing it, first of all, we both have libraries of content, which will help partially populate the VOD, and some additional content will be produced, and we're also acquiring content. As we pointed out in our introduction, we'll be able to serve viewers with international programming that's relevant to them as well. And the cost of acquiring that has been factored in to the VOD budget that we provided.
3084 MR. BOWLES: And that budget has been factored in to the rate that you're proposing for your service?
3085 MR. DI FELICE: Correct.
3086 MR. BOWLES: So the extent that the Commission were only to entertain your linear service, would that -- would this provide room to reduce the proposed wholesale rate?
3087 MR. DI FELICE: Well, I think given the previous conversation regarding the rate potentially being raised in order to soothe any expectations of -- concerns regarding our financial viability, we would not reduce the rate.
3088 MR. BOWLES: Thank you.
3089 Those are my questions.
3090 MS. DIONNE: Two quick question. Can you undertake to submit an allocation breakdown of advertising revenues expected from that VOD service? Have you -- do you have those numbers? And versus the advertising revenues that would come from your proposed linear service.
3091 MR. DI FELICE: The current advertising revenues that we would put on our financial projections don't include any potential dynamic ad insertion revenues. That was too remote to be able to count on, but we think that day by day and certainly by 2021 those -- that potential will be there, but we did not initially account within the advertising budget for additional revenue through dynamic ad insertion.
3092 MS. DIONNE: So but you expect some revenues by five years you just mentioned? Like ---
3093 MR. DI FELICE: Yes, that's one of the elements ---
3094 MS. DIONNE: --- can you submit those?
3095 MR. DI FELICE: Okay. Yes. Yeah.
3096 MS. DIONNE: Thank you.
3097 And one last question, again about VOD, exclusive content. As I'm sure Mr. Engelhart knows, on-demand services are generally not permitted to have exclusive content. You've indicated earlier that you would provide exclusive content separate from your linear service. So are you asking in addition to that exclusive content prohibition?
3098 MR. ENGELHART: No, this is -- no, if we bought a Bollywood movie, no, we would not be getting an exclusive for that for Canada. No, that was not our intention. So probably my bad wording.
3099 MS. DIONNE: So you wouldn't put exclusive content on the VOD service?
3100 MR. ENGELHART: No.
3101 MR. DI FELICE: If I may? I believe the use of the word exclusive meant exclusive to the VOD service as opposed to linear channel, not exclusive in preferential rights over all other Canadian players, which I think maybe you're referring to?
3102 MS. DIONNE: Yes.
3103 MR. DI FELICE: Right.
3104 MS. DIONNE: Thank you.
3105 Those are my questions.
3106 THE CHAIRMAN: Thank you.
3107 Thank you very much for your presentation.
3108 We will take a short break. I apologise for the lengthy hearing day, but we have one more to go and we'll stay fresh and ready, so we'll take a break until 4:30 and then continue. Thank you.
--- Upon recessing at 4:18 p.m.
--- Upon resuming at 4:30 p.m.
3109 THE SECRETARY: But I'll do it now, if you don't mind. Tomorrow morning we'll be starting Phase 2, whereby applicants appear in the same order as in Phase 1 to intervene on competing application, if they wish.
3110 So if you know that you're not intending to appear in this phase, please advise me prior to the commencement of the hearing tomorrow. If you are unsure, I will call upon you during Phase II and you can state your intention at that time. All right?
3111 So we will now proceed with Item 8 on the agenda, which is the M.T.E.C. Consultants Limited, operating as Corriere Canadese -- I had a course during break, an Italian course -- on behalf of a corporation to be incorporated for a broadcasting licence to operate a national multiethnic, multicultural discretionary service to be known as CORRCAN Media Group.
3112 Please introduce yourselves for the record. You have 20 minutes. Go ahead.
3113 THE HONOURABLE MR. VOLPE: Merci, Madame. Merci, Commissioners, Chair and Vice-Chairs.
3114 My name is Joe Volpe. I’m the President, CEO, Chief Bottle Washer and Floor Sweeper at CORRCAN. To my right is an important person, M. Jean Brazeau. He’s the Vice-President, Government Affairs and factotum on all regulatory issues, and to his right is Madame Margot Patterson, legal counsel for the corporation, especially as it relates to this licence application. If there’s anything wrong, do not blame her.
3115 Ladies and gentleman, thank you for the opportunity to further elaborate on our response to Notice of Consultation 2017-154, a call for a national, multilingual, multiethnic television service offering news and information programming. Please excuse me for emphasizing that. I’ve been here for two days, and I just wanted to make sure that we at least repeated what we were responding to.
3116 From a commercial point of view, this is what the CRTC, as a buyer of delivery of public policy, is willing to fund. From a public policy perspective, it is what you believe that Canada needs. We applaud the call from both perspectives and responded with an application to supply that request. We were guided in our response by three basic factors contained in the Call.
3117 First, the Commission had already identified “the exceptional need for a national, multi-ethnic television service that can provide Canadians with programming, including news and information in multiple languages from a Canadian perspective.” Coincidently, on August 17, 2017, Stats Canada issued a report wherein it indicated that fully 22 percent of the Canadian population has the ability to conduct its daily life in a language other than English or French. This Allophone group of Canadians may, in fact, be doing just that. I’m an example.
3118 Second, the Commission chose to remind potential applicants that “The multicultural nature of Canadian society is reflected in the broadcasting policy for Canada, under the Broadcasting Act. In this respect, the Commission noted, and I quote:
3119 “For Canadians to obtain news and information in a third language from a Canadian perspective, they must have access to affordable third-language programming services. Such programming assists Canadians in civic engagement and can help to promote cross-cultural understanding.”
3120 We think that’s called integration.
3121 Third, in Broadcasting Decision CRTC 2017-152, the Commission pointedly expressed its disillusion that broadcasters had not delivered on the expectations of the Broadcasting Act. It then set out a series of minimal expectations for temporary and provisional renewal of licence. Those conditions guided the formulation of our application.
3122 For short, we’ll call ourselves CRCMG applauds this call. We see the Commission as bold and firm in its decision to uphold public policy and to demand quality of service for the use of a public asset – a licence to broadcast. The conditions it imposed in granting a temporary, provisional licence served as our model for our application. It is a model predicated on providing a service directed to achieving a public policy objectives first and foremost.
3123 Without appearing immodest, we at CRCMG have presented a unique proposal that will fully satisfy the CRTC’s public policy void it recognized both in Decision CRTC 2017-152 and in Notice of Consultation 2017-154.
3124 Our application aims to inform, in other words, also elaborate forums for discussion, entertain and integrate an increasingly diverse Allophone population. We report, analyse and comment on their new social, economic, political environment and "how they are fitting in". We do that as a newspaper every day. We do that as a broadcaster on digital every day.
3125 Without being presumptive, we felt that if the Commission’s conditions – and the delivery model imposed on Rogers/Omni – was good enough to satisfy the news and information programming from a Canadian perspective for the four language groups that initially formed the rationale for that decision, then they should be applied for delivery of service to the additional 16 identified in Broadcasting Order CRTC 2017-127, although they’re not named. We went out and researched the next or top 20 language groups. We listed them in our appendices.
3126 Our target audience is the 7.7 million Canadians identified by the most recent Stats Canada report that can and does conduct life in a third language. It is not any other group; it’s that group. That represents 22 percent of the Canadian population. The application is geared to that segment of Canadians.
3127 That group sees our application as one – in fact, the only one – that finally provides a national news outlet dedicated to providing information services in their language, from a perspective with which they can relate, as they integrate.
3128 As per our application, the news is gathered, prepared and delivered by trained, professional writers and journalists from across Canada operating from within the heart of the various communities that make up that 22 percent.
3129 Our application is 100 percent Canadian – national, provincial and local in scope, and so will the news be. It follows a predictable, daily program timetable, delivering news and current affairs in a
3130 different language, in 30-minute segments, for 12.5 hours per day; 14.5 hours per day, if one allows for the very early morning repeat of four primary language groups identified in Broadcasting Order CRTC 2017-153, on May 15, 2017.
3131 Imagine for a moment the pulsating energy generated by over two hundred journalists, technicians, researchers and writers from cities across the country feeding into newsrooms (plural) and production centres (plural) to meet deadlines with interesting, relevant news and information.
3132 All of them, and all of “it”, developed and produced “in-house”.
3133 You will hear, later in the proceedings, from the President of the National Ethnic Press and Media Council of Canada (NEPMCC) whose membership represents a reservoir and network of talent, ready to collaborate on this great Canadian communications project.
3134 The NEPMCC represents a nation-wide network of photojournalists, writers, radio and television broadcasters from Vancouver to Halifax with all the credentials of journalists that you might have expected if you were hiring for any of the major networks or any of the major daily newspapers. I'm the proud Senior Vice President of that organization.
3135 We have provided for your consideration the names of dozens of ethnic based community and national organizations representing tens of thousands of Canadians enthusiastically supporting our application. They have already begun to develop an association to, I quote -- "their station" -- end of quote. It's presumptuous perhaps, on their part, on our part, but indicative of the energy that can be generated when they can finally feel themselves part of a Canadian information medium that evolves from the grassroots, from bottom-up rather than top down.
3136 We at CRCMG, and the membership of NEPMCC, are accustomed to the pressures and stresses of meeting daily, weekly, and monthly deadlines to produce relevant quality material. But our affiliated memberships and supporters also includes a talent pool of dramatists, performers, musicians, videographers, filmmakers whose creative juices are looking for platforms to exhibit their creativity.
3137 What they have to offer certainly fits the definition of PNI. They're all Canadians. Whatever they produce is going to be Canadian. Our application envisions the engagement of their talent in the creation, exhibition and distribution of Canadian cultural product, short documentaries, short features and eventually feature-length films.
3138 CRCMG has the facilities to do this in‑house. It has already begun to reach out to those artists who see the potential of our station as a cultural hub for the creative arts sector among the third-language communities.
3139 There is no shortage of potential subject matter. Several of the ethnic groups in those organizations have a history in Canada that, believe it or not, pre‑dates Confederation. There's a vast reservoir of potential.
3140 Our weekly program component, more specifically, the programming that is outside the daily news cycle, is designed to bring into focus the relevant experiences in each province not covered during the daily cycle or not covering the 20 language groups at the centre of the daily programming.
3141 That weekend programming can and will include short documentaries highlighting the roles that the Allophone communities and/or the personalities that have emerged from them, irrespective of duration of residency, have played or are fulfilling in the development of our country.
3142 From the perspective of a multilingual, ethnic channel, which we believe is the thrust of both the call and our application, we are confident that our proposal stands alone in the comprehensiveness and in the ability to deliver the content promised, having due regard to the professionalism required by National Press Standards.
3143 This having been said, our application has also incorporated at least one half hour of air time daily to Aboriginal programming, as well as significant time for French language programming. The calculation measurements of both in terms of percentage will depend on whether the grant of licence is for 18 or a 24‑hour schedule. I'm opening myself up, obviously, to a question.
3144 In addition, from a regulatory perspective, we have made the commitments to abide by the conditions of licence, as outlined in the application. Moreover, with respect to the CRTC's strong suggestion that a successful applicant explore other platforms for delivery of content, we are pleased to advise that we have already embarked on and invested in a digital channel, YouTube, so far in four different languages and have a full Internet and social media presence.
3145 We have our website, two apps, a Facebook site, Twitter, Instagram and LinkedIn accounts. Together, daily, they reach an average of approximately 3,000 users, just under 100,000 in Italian alone, per month. Although a work in progress, we are nevertheless excited by the interest.
3146 When we include the digital impact of our current partners in Portuguese and Spanish language groups so far, the analytics jump to 250,000 monthly viewers, or impressions. It is early stages. Nonetheless, returning to the platforms, we already operate a daily subscription and single-copy paid newspaper. Many of our potential partners also operate in the print world, some in radiobroadcasting or in Television as well.
3147 We have already built a first-rate team of technology experts, savvy professionals whose skill in broadcasting over the air or digitally will ensure our ability to hit the ground running professionally and efficiently in short order. We will not need to outsource for expertise or production facilities in any language.
3148 Our experience across the print and electronic media gives us practical, thorough, firsthand knowledge of our current and potential consumer clients. It is an important asset from a news generating perspective and from an integration objective.
3149 It is an asset that, from a commercial point of view, should/could bear fruit with potential advertisers. It is a factor we do not take lightly.
3150 As a national applicant, our product -- as a national applicant and application, our product will have appeal across the country and locally. National advertisers have already expressed an interest in this unique opportunity.
3151 Madam Roy didn't like me. She's not giving me any water.
3152 We think that the application -- that the application, our supplementary brief, and appendices taken together make a very strong case for us as unique and special; therefore, deserving of the licence and mandatory carriage. We have, as well, provided a responsible, realistic, financial projection to buttress the viability of the licence.
3153 Because of our multi-disciplinary press and media experience, we have a hands-on understanding of the market dynamics within and among our communities. We're confident that we can produce a service that is desirable at home and exportable abroad.
3154 Notwithstanding our focus on public policy goal outlined in the Broadcasting Act, we're conscious of the fact that the wholesale rate may be insufficient to make the station self-sustainable. Accordingly, we have structured our financial projections so that we can meet the obligations we accept as conditions of licence, produce quality product, and stay viable.
3155 To that end, we have assembled a first rate team of knowledgeable marketing strategists to secure the necessary revenues from advertisers to supplement those from the wholesale rate accruing to our production team via the mandatory carriage designation. Respectfully, all that's missing now is your approval to start the process.
3156 Thank you. We'll be pleased to answer any questions that you may have.
3157 THE CHAIRPERSON: Thank you. Thank you for the presentation.
3158 I believe Madam Simard has some questions for you to begin.
3159 COMMISSIONER SIMARD: Thank you, Mr. Chairman.
3160 Bon après-midi. Good afternoon.
3161 THE HONOURABLE MR. VOLPE: Merci. Bon après-midi.
3162 COMMISSIONER SIMARD: Thank you for your presentation. Thank you for your application.
3163 I think that you know the drill. So we will be starting with, I guess, general questions and after that -- and there will be specific questions as well.
3164 The first one is a general question, and it refers to your overall programming strategy. So I understand that you made a commitment to have multi-lingual, multi-ethnic news and information service domestically generated and produced, 60 percent during the broadcast day and 100 percent between 12:00 p.m. and 12:00 a.m. However, this commitment is not reflected in your list of proposed COLs.
3165 So my question is, as you can guess, if you would be willing to have a conditions of licence ---
3166 THE HONOURABLE MR. VOLPE: The answer is
3168 COMMISSIONER SIMARD: --- to capture that.
3169 THE HONOURABLE MR. VOLPE: --- an absolute yes. I think that we’ve had this question. We thought we’d clarified it, but you have our timetable. Our program is pretty well set and it reflects percentages that I’ve just suggested. So it’s an easy answer for us, yes.
3170 COMMISSIONER SIMARD: Good and ---
3171 MR. BRAZEAU: Just ---
3172 COMMISSIONER SIMARD: --- maybe there will be -- oui, yes?
3173 MR. BRAZEAU: Just to add one clarification, a final clarification, you mentioned 60 percent on news.
3174 COMMISSIONER SIMARD: Yes, during the broadcast date, yeah.
3175 MR. BRAZEAU: We always have to qualify that, that the 60 percent was based on a 24-hour schedule. If you’re looking at an 18 ---
3176 COMMISSIONER SIMARD: Yeah.
3177 MR. BRAZEAU: --- schedule which was -- 18-hour schedules, which a lot of the applicants have submitted, then the number increases to around 80 percent I think; right Joe?
3178 THE HONOURABLE MR. VOLPE: Exactly, it’s 80.3. You know, the reason why I said yes immediately is when we raised this -- and Mr. Brazeau is absolutely right, when we had these discussions, if the floor of the COL is 60 percent, which is what you asked for, we’ve gone way beyond it; why wouldn’t we say yes?
3179 COMMISSIONER SIMARD: Mm-hmm.
3180 THE HONOURABLE MR. VOLPE: We’ve gone way beyond it.
3181 COMMISSIONER SIMARD: So could you -- okay, I guess we will have this discussion a bit later about this 18-24 hours, but at this point, I understand that you would agree for a condition of licence for like the 60 percent if we’re talking about 24 hours, right?
3182 THE HONOURABLE MR. VOLPE: Yes.
3183 COMMISSIONER SIMARD: Okay. If it’s 18 hours -- I just -- could you just -- I’m not sure that I understand like -- so your proposal is for 24 hours, right?
3184 THE HONOURABLE MR. VOLPE: Well, we presented a proposal for ---
3185 COMMISSIONER SIMARD: Yeah.
3186 THE HONOURABLE MR. VOLPE: --- 24 hours ---
3187 COMMISSIONER SIMARD: Yeah.
3188 THE HONOURABLE MR. VOLPE: --- because of what we wanted to achieve.
3189 COMMISSIONER SIMARD: Yes.
3190 THE HONOURABLE MR. VOLPE: You asked us -- at one point, you said, “Well, you know, normally we only issue a licence for 18 hours.” You said, “Well, you know, would you like to commit that you’re actually interested in 24 and not 18?” And we said, ”Yes, yes, we’re interested in 24.”
3191 But if we’re going to measure one application against another and only for that purpose, ---
3192 COMMISSIONER SIMARD: Yeah.
3193 THE HONOURABLE MR. VOLPE: --- only for that purpose, and you take a look at our schedule in the first 18 hours of the day and compare them to schedules presented by other applicants for their 18 hours, then the percentages change. As I said in my production, that they not only change for the percentage provided for a specific item, but for the entire application. So if you go 18 and you take a look at our news component, it’s at 80 percent.
3194 COMMISSIONER SIMARD: Yeah.
3195 THE HONOURABLE MR. VOLPE: And if you go to 24, it’s at 62.
3196 COMMISSIONER SIMARD: Yes, good, but we’re talking about your proposal and I think we’ve received the answer that we were looking for.
3197 Could you please tell me or define the expression, “domestically generated and produced”?
3198 THE HONOURABLE MR. VOLPE: Well, for me, domestically means it’s generated here. You’re going to be using Canadian talent; journalists, videographers, photographers, writers, you know, technicians. It’s all going to be done from here. And as I read what is domestic, what is Canadian; it’s got to be done by Canadians who have a Canadian perspective. You know, it doesn’t matter what their background is; they’re here.
3199 And are they treating; I don’t know, the -- somebody at an earlier presentation talked about Trump very briefly. Well, he’s not Canadian. It’s not Canadian interest, but whatever he does impacts all of Canada and so if we cover that; it doesn’t matter from which language group, they’re -- every one of those language groups may have a different perspective, but it certainly will be a Canadian perspective and ---
3200 COMMISSIONER SIMARD: Thank you.
3201 THE HONOURABLE MR. VOLPE: --- and they will be inhouse.
3202 COMMISSIONER SIMARD: Yes, that was ---
3203 THE HONOURABLE MR. VOLPE: So they will be ---
3204 COMMISSIONER SIMARD: That’s what ---
3205 THE HONOURABLE MR. VOLPE: They will be ---
3206 COMMISSIONER SIMARD: That’s what I’m looking for in your presentation.
3207 THE HONOURABLE MR. VOLPE: Yeah, they will be employees and because of the importance of that part of the programming, it -- we want to control the quality and we want to control the input, so it will all be inhouse and produced inhouse and delivered inhouse with in-house talent.
3208 COMMISSIONER SIMARD: Good. So in your views -- so I understand that it would be all inhouse -- I mean produced inhouse, but there was also another reference to the inhouse. I forgot what it was in your presentation. I think you referred to technical, I guess, things that would be inhouse as well, right?
3209 THE HONOURABLE MR. VOLPE: Right because ---
3210 COMMISSIONER SIMARD: Okay, so ---
3211 THE HONOURABLE MR. VOLPE: --- all of our technicians ---
3212 COMMISSIONER SIMARD: So it’s ---
3213 THE HONOURABLE MR. VOLPE: --- are going to be under the CRCMG umbrella.
3214 COMMISSIONER SIMARD: Yeah.
3215 THE HONOURABLE MR. VOLPE: So whether we operate out of Toronto, whether we’re getting a feed out of Montreal, whether we’re going to be in Vancouver, in Calgary, in Ottawa; it’s all under our umbrella. It’s in-house.
3216 COMMISSIONER SIMARD: Good.
3217 THE HONOURABLE MR. VOLPE: If we have a site that’s out of our current facility; it’s in another part of Canada, -- we’re hoping to go to Halifax, as well. You read that in our supplementary brief -- that’s all in-house. We have been given opportunities. We have studios that we can use in London, in Washington, but it’ll be CRCMG personnel and technicians that will develop the news items and will transmit them through our in-house facilities.
3218 COMMISSIONER SIMARD: So does this mean that there will be no production by independent production companies at all?
3219 THE HONOURABLE MR. VOLPE: No, ---
3220 COMMISSIONER SIMARD: No?
3221 THE HONOURABLE MR. VOLPE: --- absolutely not.
3222 COMMISSIONER SIMARD: Okay, so ---
3223 THE HONOURABLE MR. VOLPE: No, but what we ---
3224 COMMISSIONER SIMARD: --- a small portion will be?
3225 THE HONOURABLE MR. VOLPE: Well, you know, we’ll give you the exact numbers. So -- but I didn’t want us to stray from what the main thrust is. So the main thrust is news and current affairs that’s gathered, produced, developed, transmitted by people who are working under the CRMCG (sic) umbrella.
3226 What is not news, -- and maybe either independently produced, but it’ll be Canadian material -- that comprises the rest of our timetable. That will be done by Canadians from many of these language groups, if not all of them. We’re going to give them first priority to produce what we require for those half-hour slots where we are not doing news.
3227 Sometimes -- and others have said, “You know, current affairs for news.” Well, in our perspective, not necessarily, especially if you want to inform that population -- that 22 percent that wants to see what’s going on. Maybe the other 12 percent that’s not represented in those first 20 language groups; we want to give them an opportunity.
3228 So what we’ll do is we will develop independent producers who will be given a time slot specific to developing that for airing.
3229 COMMISSIONER SIMARD: Thank you. So I guess that leads to the other question which is how this model would make an exceptional contribution to a diversity of voices, opinions, value, artistic creativity? So like the question is about diversity based on this business model.
3230 THE HONOURABLE MR. VOLPE: Madam Commissioner, please forgive me if I smile when I’m doing this. I’m doing it because I’m thanking you for asking me the question and the reason I thank you for it is there hasn’t been another program, another application, either in the last two days or anywhere around in the past.
3231 With all due respect to one of the applicants that spoke before, I’ve known him since he opened up with Dan Iannuzzi in CFMT 47. You know, there hasn’t been another one that said, “We are going to give you at least 20 language groups,” that full gamut of diversity in Canada. Not the full because obviously there are others still, but the 20 top-language groups.
3232 And you’ll ask me; you’ll say, “How did you come up with 20?” Any group that meets that floor of a hundred thousand, for them, we already gave that half-hour program. And so they’re listed for you. Is that exceptional? I mean nobody’s come close.
3233 With all due respect to some of the other applicants that had their own merit, nobody has come close to saying, “You’re going to provide the news every day, every week day. You’re going to provide the news because the CRTC and its decision said, “We want those four to do it seven days a week and, you know, you must do the other 16. We want you to fulfill that promise too.”
3234 Well, we found those 16 and we said, “We want them to do what those other four have to do every day.” We’re restricted by the fact that the CRTC told those initial four, “You’ve got to do it in prime time”. So we have to work around that prime time, but it’s exceptional because you’re giving these groups, these people, these talented journalists, an opportunity to tell the story of Canada to the groups and communities from which they are emanating.
3235 COMMISSIONER SIMARD: So how many journalists would you be hiring ?
3236 THE HONOURABLE MR. VOLPE: Well, what we’ve done is we’ve taken a look at we would -- what we would require to produce every half hour of work, okay, and we said, “If we’re going to do 20, we’ve got to have a minimum of four people per half hour of work, possibly a fifth one.”
3237 So we’ve got to build -- we have to build some critical mass in sharing of resources in order to maximize. But you have to have that minimum of five for every single one of them. So if you’re looking at 20 groups, you need a minimum -- a minimum -- of 100 that you have to hire tomorrow. Now, where do you get them?
3238 We’ve already got that group I mentioned a few moments ago from the National Ethnic Press and Media Council. There’s a vast number of them. They meet -- once a month they meet in Toronto. There’s at least 70 to 75 representatives there, radio, television, newspapers, magazines. And they’ve all got training in journalism. They’re excited about the opportunity to be work on this. And you say, “Well, how many of them can you actually use? Can you satisfy all 75?”
3239 Well, if I’ve got to hire at least five per half hour period, you’re right, we’re going to satisfy them all. Plus all those independent producers, all those independent producers that are going to be working, researching, telegraph -- videoing, televising, operating on producing their one video per day or per week or per -- that’s another, we estimate, at least there’s going to be five in that bunch.
3240 We estimate we’re going to come up with at least another 50. At least. So we’ve given -- we gave you, in our brief, an indication that we think we’re going to be about 200.
3241 MR. BRAZEAU: Just to add one small point; it’s also live. From noon or 11:30, from noon to ---
3242 THE HONOURABLE MR. VOLPE: From 11:30.
3243 MR. BRAZEAU: From 11:30 to midnight it’s live. So the news will be changing and there’ll be editorial boards ready to change and modify the news as it evolves. So you’ll have, you know, the 7 o’clock news may be slightly different than the 5 o’clock news and the 3 o’clock news. So it will incorporate whatever event that has transpired during that timeframe.
3244 THE HONOURABLE MR. VOLPE: And in order for us to do that, and you’re absolutely right, Jean, in order for us to do that in addition to having people in a particular production centre -- you know, in other words, if you have a newsroom in a particular production centre, you still have to have people in the field feeding in.
3245 We’re not allowed to bring our telephones here but that telephone is a video, it’s a television transmitter. I carry it around and I produce content immediately for my Web site, live.
3246 And so we have a number of individuals who are already coordinated around doing that for every one of these programs, these half-hour programs, but also for the independent producers. And what we’ll do is we’ll formalize their activity.
3247 As Jean says, you know, we’re going to have -- we’re going to have our editorial room, our newsroom, but that’s got to be organized. I know you’ll ask me this later, but it’s going to be organized around teams of editors and assignment editors who are going to be able to keep that news that’s coming in feeding and determining what it will be like, how the technicians are going to air it, when they’re going to do it, who the on-air person is going to be, and we hope to divide -- to get people who are going to be consistent. They’ll probably be part of that, part of the production team but it’ll be the same one all the time so that people begin to develop an attachment, an association with the transmitter of the news and with the team of people that bring it together.
3248 COMMISSIONER SIMARD: And where would they be located.
3249 THE HONOURABLE MR. VOLPE: Well, I said that we have various places. We have our own facilities in Toronto. Not a problem. Not a problem. We have use of a television transmission centre and a studio in Maple, just north of where we are in Toronto. We have another one in Montreal, and we have a third one in Vancouver.
3250 So we can feed in partial groups through those areas, because the critical mass of that 20 population group, that linguistic group, shifts across the country. And, you know, we try to track it for you by giving you some tables of where they are. I don’t think they are always very precise. When we produce that -- you know, what’s that now, a year -- almost a year and a half ago? Some of that’s going to change. It’s going to change because of immigration policy. It’s going to change because people move around to look for jobs.
3251 People move for whatever reason they move, but they’ll move. And there are -- it’s not a secret that the big three concentration centres for -- that attract immigrants are Vancouver, Toronto, Montreal. That doesn’t mean they don’t go anywhere else. There’s a lot of people, a lot of people who are isolated in much smaller communities.
3252 I know I’m going to offend some of my former colleagues from Thunder Bay but, you know, I always kid people and say, “How did you get to Thunder Bay? Did you miss a left turn on the 401?” You know, it’s way out there.
3253 But there’s a lot of people who want to connect with -- there's Lithuanians there, there are Italians, there are Francophones, yes, there are Aboriginal communities but there are others that, you know, in a community it’s the biggest city in the northwest but it’s only 120,000 people. But this -- this station will reach out to those three groups because they’ll have an opportunity to be seen and to see others not only from Toronto but from Vancouver, from Halifax, that have their shared experience.
3254 Unique and different but it’s shared because they’re not home, they’re making a home, and that’s the beauty of this. They’re integrating, they’re creating a Canada. And this station, the reason it’s special, Mr. Chairman, is because it’s going to give them an opportunity to see themselves as people who are creating a country and who aren’t here as visitors.
3255 COMMISSIONER SIMARD: I was saying -- talking about Francophones because you talked about Francophones.
3256 You made another commitment in your application. You indicated that the service would be dedicated or would dedicate 8 percent of your creative programming budget for French language programming. So would you agree to be -- that to be imposed with a condition of licence?
3257 THE HONOURABLE MR. VOLPE: We don’t consider it an imposition. We made that commitment before anybody asked us to.
3258 COMMISSIONER SIMARD: Okay. So you would agree ---
3259 THE HONOURABLE MR. VOLPE: We said that it was going to be ---
3260 COMMISSIONER SIMARD: --- on a condition of licence ---
3261 THE HONOURABLE MR. VOLPE: --- 8 percent of our creative, not a problem. Not a problem. It’s part of that experience that people are creating.
3262 COMMISSIONER SIMARD: So this condition of licence would be requiring the broadcast of French language programming, whether it be a spending and/or exhibit -- sorry; exhibition requirement.
3263 THE HONOURABLE MR. VOLPE: I’m sorry; what was the word before “exhibition”?
3264 COMMISSIONER SIMARD: So I ---
3265 THE HONOURABLE MR. VOLPE: Oh, spending.
3266 COMMISSIONER SIMARD: Yeah, spending and/or exhibition requirement.
3267 THE HONOURABLE MR. VOLPE: Of course.
3268 COMMISSIONER SIMARD: Thank you.
3269 THE HONOURABLE MR. VOLPE: Of course. COMMISSIONER SIMARD: That, I guess, lead us to another series of questions.
3270 We just talked about exhibition in your application. You stated that you would commit to a third language exhibition requirement of 55 percent. However, based on your proposed program schedule that was provided as part of your application, it appears that this amount is larger for third language programming. So I guess that we will need some clarification about this number. The first one is could you explain why you limited -- sorry; just -- I just want to be sure that I didn’t mis-spoke.
3271 So your commitment is for 55 percent. Sorry, my mistake. It appears that you would broadcast a larger amount of third-language programming than what you have committed to in your conditions of licence. So my question is could you explain why you limited the proposed amount to 55 percent?
3272 THE HONOURABLE MR. VOLPE: Of course, Madam Commissioner.
3273 I said earlier what we did when we were asked about some of the conditions of licence, the conditions of licence as written in the application form always ask this: “Can you answer this minimum?” And the answer is yes. “Are you willing to meet this minimum? This is what the condition of licence is.” The answer is yes. Are we going to go beyond that? Well, we’ve given you a timetable that says that we do that.
3274 COMMISSIONER SIMARD: I see, yes.
3275 THE HONOURABLE MR. VOLPE: So that’s the different side. Anyway, someone said earlier on, you know, you asked us to go to the minimum and, you know, we always try to do the minimum. No, were trying to get beyond that. But you didn't ask us more than that. You asked us for the minimum.
3276 COMMISSIONER SIMARD: Yes.
3277 THE HONOURABLE MR. VOLPE: We said yes, and then we gave you a timetable that went beyond it, just to prove my point.
3278 COMMISSIONER SIMARD: Good.
3279 Thank you very much.
3280 (SHORT PAUSE/COURTE PAUSE)
3281 COMMISSIONER SIMARD: You just talked about the number of languages that would be broadcast, I guess. Could you please explain to us how your programming languages were chosen, please?
3282 THE HONOURABLE MR. VOLPE: Well, as I indicated earlier, we took a look. There are two components to it. Number one, the CRTC decision in May of 2015 essentially said “You’ve got to have Cantonese, Mandarin, Italian and Punjabi. So you’ve got to deal with those and here’s the way that you’re going to deal with it.” So we said okay. That wasn’t a condition imposed on us. We weren’t part of the application.
3283 Then the second thing was the Commission said to Rogers/OMNI, “You know what? You had made a commitment earlier on for a further 16. You were going to get to 20. Guess what? We’re going to hold you to that because we’re going to give you money now. You didn’t do it when you didn’t have money, but we’re going to give you money and we’re going to hold you to it, but you didn’t identify the 16.” So we said, well, they want us to ask -- they want an applicant when we made the decision to apply.
3284 The CRTC wants an applicant to prove that there’s a need, but they’ve identified the need. They want the applicant to indicate that it’s a special application, that it’s unique. And we said, well, what makes it unique? Well, what makes it unique is fulfilling the conditions that the previous -- well, that Rogers/OMNI didn’t fulfil when they walked away from those licence obligations in 2015.
3285 So we said, okay, so we have to fill that. Which one do we do? The Census through Stats Canada came out with all of the distribution. We went through it with a fine-tooth comb. We drew charts. We drew graphs. We did all series of things for it, and we said, okay, what 16 groups can they possibly go after? It’s a national licence. It’s not for Toronto. I can give you the 16 top groups in Toronto, but they’re different from the 16 across the country.
3286 So we said, “Okay, if it’s a national licence, we’ve got to have these 16 groups serviced across the country. Let’s pick them. Let’s go straight down the list.” We’ve got these four, and they happen to be in the top 20, so it was easy. What’s the next 16, or 16 and add 20? And those are the numbers that you see. Those are the languages that you see in that program schedule. And it’s a fixed program schedule.
3287 COMMISSIONER SIMARD: Thank you.
3288 You’re answering my questions before I ask them, so I have to find the next one.
3289 THE HONOURABLE MR. VOLPE: I hope you’ll forgive me if I sound excited.
3290 COMMISSIONER SIMARD: So the next question refers to Canadian content exhibition requirement. As part of the deficiency response, you amended the proposed amount of Canadian content to be exhibited by the service. You changed the amounts from 55 percent of the broadcast day and 70 percent of the evening broadcast period to 85 percent of the broadcast day and 100 percent of the evening broadcast period.
3291 So do you want me to repeat the numbers? So 55 percent of the broadcast day and 70 percent of the evening broadcast period to 85 percent and 100 percent.
3292 Could you please comment on the prospect of these new levels being required as conditions of licence? So in other words, would you agree?
3293 THE HONOURABLE MR. VOLPE: We don’t have any problem.
3294 COMMISSIONER SIMARD: Good.
3295 THE HONOURABLE MR. VOLPE: It’s the same answer that I gave for another question.
3296 COMMISSIONER SIMARD: Thank you, yes.
3297 THE HONOURABLE MR. VOLPE: When we were taking a look at these edits, we said, you know, we provided a schedule.
3298 COMMISSIONER SIMARD: Good.
3299 THE HONOURABLE MR. VOLPE: And you’re asking us for minimums, that we had to write it in.
3300 COMMISSIONER SIMARD: Yes. Good. But for the record, I just want to be sure that ---
3301 THE HONOURABLE MR. VOLPE: For the record, absolutely.
3302 COMMISSIONER SIMARD: --- I have this answer.
3303 Thank you very much.
3304 There was a discrepancy that was noted and would need some clarification. So it refers to the described video requirement. So it’s very specific.
3305 THE HONOURABLE MR. VOLPE: Yes.
3306 COMMISSIONER SIMARD: I will ask for your patience. I have to be very specific here. At paragraph 79 of our supplementary brief you indicated that you would be devoting less than half of your programming schedule to drama, comedy or long-form documentary programming.
3307 So you therefore do not propose to provide described video from your programming apparently, again, based on the information we have on the record. However, you asked for an exception to the described video requirement of the standard conditions of licence applicable to discretionary services and proposed that by the beginning of Year 3 of the first licence term, the service provides described video for all English and French language programming that is cast during the primetime and that is drawn from program categories too.
3308 So I guess that the key question here is that we would need some explanation as to whether the service will provide described video as detailed in your proposed exception to the standard conditions of licence, or if the service is seeking a different relief from the standard conditions of licence?
3309 That’s a very long question, so feel free to ask me to kind of clarify or summarize it if need be.
3310 THE HONOURABLE MR. VOLPE: Madam Commissioner, you probably saw us conferring. It wasn’t because we were trying to find a way to get around this answer. We actually were looking for who would be best to do this because we’ve had this discussion.
3311 You know, we tried to meet all the requirements for conditions of licence, this being one of them, and because of the limitations of the question itself, we said, I don’t know how we can meet this.
3312 Now, my colleagues here are going to correct me, and they’ll slap me on the wrist if I misspeak myself, but we said the restrictions of our timetable, our program, make it very difficult for us to do it from the get-go. So what we can do is we can make a commitment to do it by about year three because we don’t have any of that programming in primetime.
3313 But the intent is would you be willing to do it in the occasions where you have an opportunity to describe it for these conditions. And I think we said yes to that. Our problem was how to structure the language such that it would be consistent with the main thrust of our application which, as I said in our introduction, we were responding to a news and current affairs program in 20 different languages. That’s what we wanted to do for an ethnic Allophone audience.
3314 This particular aspect of the conditions of licence were asking to do something in addition but in a timetable that we had already allocated to fulfilling the main thrust. And so we don’t want to say no. We think that the decisions of the CRTC guided us through everything. This one here, we said, listen, you know, give us an opportunity to meet it, but not on day one. Once we’ve got our schedule all set and going, and then we can go ahead and do the described video for the areas where we have to.
3315 And did we say we were prepared to meet that as a condition of licence? I thought we had done that already. You know, you had one applicant here who wanted to essentially convince you that that’s what you should do for everything. I turned to Jean and I said, “You know, there’s part of our solution. Why don’t we talk to him afterwards?” If we get to that particular part, we’ve already got an asset that we can tap into.
3316 You know, I hope I’m not rambling. My answer, our answer, is yes, we want to do it.
3317 COMMISSIONER SIMARD: Thank you. That’s clear.
3318 THE HONOURABLE MR. VOLPE: Just give us a little bit more time.
3319 COMMISSIONER SIMARD: That’s clear.
3320 So I guess that we are going to talk about a very different topic, wholesale rate. So in your application you omitted evidence as to whether your proposed wholesale rate would be acceptable to Canadian consumers.
3321 Could you please provide information as to whether you, I guess, canvassed -- just a second. I would like to have more information about how you, I guess, in your view -- in your views, why this -- the proposed wholesale rate is acceptable to Canadian consumers?
3322 THE HONOURABLE MR. VOLPE: Well, Madam Commissioner, with all due respect, others have already tried to address that. We’re going to do it and I hope we’ll do it more directly. Whatever the rate is, we said in our brief, in our supplementary brief, we said the standard was already set by what you allowed Rogers to -- Rogers OMNI to have. And you gave them 12 cents.
3323 But what you didn’t say, and what the application did not add was that Rogers had an imputed contribution as well and that’s why they were at 12 cents. So if you put in their own rate and you calculated in the amount, they get closer to the rate that they offered just yesterday, which is 19 cents. So they asked for 19 cents as the wholesale rate to do what programming they wanted to offer for your consideration. That to our mind -- I mean, as it turns out that’s what they asked for.
3324 But we operated on the basis of that 12 cents. What we wrote in our supplementary brief in our application is we said, we think that some number between 15 and 24 is probably acceptable. Because at the high end of that range, taking a look at the others that already have a mandatory carriage licence, that it’s less than one percent of the basic fee that BDUs have to provide.
3325 So if we stay under that one percent, can we deliver what we expect? And we said, Oh yeah. I think we can. So let’s do it. Can we do it at 20, or can we do it at 24? We can’t come to you and say, “Well, here’s the range.” The range is the rationale for us getting into that range and we settled down on 20. You asked us to clarify and we had 20 again.
3326 So are Canadians prepared to pay that? You know, I don’t need Nick Nanos or any other survey agency, it doesn’t matter who they work for, to tell me that Canadians are going to be dissatisfied if you ask them for one penny. All you have to do is try to ask somebody for a dollar of advertising and they’ll say, “Aww, that’s too much money.” That’s the Canadian approach.
3327 But will they pay an additional 20 cents a month to service this? You know, somebody is going to say, well, no. Canadians, they’re going to complain because, you know, they don’t speak German, you know that don’t speak Urdu, they don’t speak Russian. Why should they pay 20 cents a month to have that on their schedule?
3328 Well, you know what? If that’s the standard, that’s a problem. Why are they paying -- why are they paying whatever they’re paying to have carriage of mandatory, I don’t know, Fox News, CNN, CBC, NBC, ABC? It’s not Canadian. Who watches that?
3329 COMMISSIONER SIMARD: Thank you.
3330 You just talked about advertising. The next question is the same that we have already asked to the other applicants. Are you seeking an exception to standard conditions of licence 18 in order to be permitted to broadcast local ads?
3331 THE HONOURABLE MR. VOLPE: Madam Commissioner, as I said already twice, I think, and it’s worth repeating. This is an application for a national licence. We said that we think we are -- no, we don’t think, we confident we’re going to produce a product that’s going to be attractive to Canadians all across the country.
3332 Now, which Canadians are we talking about? We’re talking about that 22 percent. And so, they’re going to see themselves in this licence. That’s the 22 percent that we’re going for, but they’re national, they’re everywhere. So the advertisers we’re going to go after, that we’ve already begun to approach, are going to be national.
3333 Others pointed out something else. They said, you know, if we give independent producers an opportunity to air their talent, their product, what we’ve asked them to do, then we’re going to give them an opportunity to advertise locally because they’re going to do something that’s local. And advertising is part of that recognition, that people see themselves and want to be associated with something that goes on air. Something that has the validity, the certification of a national -- a national licence that says, you know what? They’re good enough to be posted on this platform.
3334 So are we right to deny them that? Let me tell you the best way for me to answer that, aside from no. I think that if we use that particular group, if we decide that we’re going to go that route -- and we’ve already decided, and I’ll tell you the exact amounts in a moment. But we’re going to be putting money into each half hour production from independent producers, just as we are for the news half hour.
3335 Now, you heard me say in my introduction, we want to buttress the wholesale rate with whatever is available outside from the private sector. Are we going to be capable of doing that? You know, we’re going to give it our best shot. We have to do it. Are we prepared to accept a condition of licence that says limit your ability to raise money? You know, I suppose we could do that.
3336 Everybody else that I followed, that we followed over the last two days have said, you know what? It just may be that we won’t be able to raise that money. So what’s our wholesale rate? The one that comes closest to us is Rogers OMNI. Everybody else is asking for a lot more, and then they’ve come -- they’ve come to this group and have said, and we’re going to put aside $5 million, $7 million for independent groups. We’re already doing that.
3337 Where are they going to get that money? They’re getting it from an increased wholesale rate. We’re not going to ask you for an increased wholesale rate, but I think you need to be able to compare apples to apples. So my answer, it’s a long way to come back to repeat the answer, was yes. Okay. We’re prepared to do it because we’re national in scope.
3338 All I ask you to consider is that when you’re asking us, any applicant to gauge a local, Canadian, independent producer, who is financed in a variety of ways, one of them is through local advertising, that maybe you should look at that too. We’re not asking you to make the decision today, but I think because we’ve said we’re willing to be limited, I don’t think it’s fair for us to limit everybody else.
3339 And by the way, on the basis of what we’re prepared to do, every half hour of independent Canadian program production comes with about -- if you gave us the 20 cents, based on assumption that we apply for everybody, 10 million subscribers, you know whether that’s the accurate number or not. But for a term of reference for everybody it’s 10 million. That means that we’re going to be able to make about $1,800 available for each half hour of production, minus some of the administrative, sales, and other things, overhead costs.
3340 What you heard in the last couple of days is that, you know, one other applicant said, we’re going to donate about 2,500 per hour, that’s $1,250 per half hour. We’ve already superseded that. That applicant also said, you know, we’re going to put aside about $7 million in a fund, which will really be a fee that we’ll pay people, but we’re going to give them an opportunity to raise their, you know, four minutes.
3341 Well, what does that four minutes mean? I’ll tell you what it means, Madam Commissioner, you know if you’re going to be looking at advertising and if you think in terms for everybody, for reference only. If you think in terms of charging $1 per second, that’s $15 per 15 second slot, you’re only looking at $60 per minute, $240 per four-minute slot. If you’re going to say that you want to prevent local people from making a $240 contribution to a 12 -- to a $1,250 contribution by the -- by the -- us, the applicant, then you know, that’s fine.
3342 COMMISSIONER SIMARD: Thank you. I think that’s a complete answer.
3343 We will move to another topic, diverse governance structure. So could you explain how your service would operate under a diverse governance structure, and one which would involve a committed group of broadcasters?
3344 THE HONOURABLE MR. VOLPE: Well, if they’re not committed, we don’t want them. That’s the first thing, okay. I’ve already given you an indication we want 20 at least who are going to be broadcast news and current affairs. I’ve already told you, and I’ve told the Commission, and everybody else that’s listening, that we want Canadian independent producers who are going to respect the conditions of this licence. And the main condition is that you produce something that you produce something that’s Canadian from a Canadian perspective. We don’t care what it is, whether it’s news, whether it’s drama, whether it’s music, whether –- whatever…
3345 --- (AUDIO INTERRUPTED AT 5:31:07)
3346 --- (AUDIO RESUMED AT 5:33:12)
3347 …current. Not necessarily valid, but they’ve got to at least be current. They’ve got to meet the standard of quality that the management team is going to be held to by the board of directors.
3348 COMMISSIONER SIMARD: Thank you.
3349 THE HONOURABLE MR. VOLPE: And that board of directors is already diverse enough; okay? It’s got nine people on it. It’s got at least four from the four basic groups – original groups – that the Commission demanded be treated the way it imposed on OMNI Rogers, plus it’s got the initial owners of M.T.E.C. As I said, M.T.E.C. Consulting Group operating as Corriere Canadese. They’re just a part of that.
3350 So you’ve got these layers and that advisory group isn’t going to be some strawman out there that people can beat up. They meet every quarter and they report to the board of governors so they can circumvent the management team if they get upset with it.
3351 So, you know, if I were part of the management team, my hair’s already gray, it will turn white.
3352 MR. BRAZEAU: Just one or two details.
3353 COMMISSIONER SIMARD: Yes.
3354 MR. BRAZEAU: So the board will be made up of 24 individuals of the advisory board and of course representing the key 24 languages.
3355 They will meet quarterly with senior management and they will also be responsible for preparing a report that they will then present to the board of directors. And that report will, of course, make sure that, you know, the station is producing what it’s supposed to be producing, the way it’s supposed to be producing it and make recommendations on how to improve the delivery of our product. So that’s how we’ll get, you know, input from the individuals.
3356 COMMISSIONER SIMARD: Thank you very much. Switching gears, your application is based on a one feed kind of a business model. Are you content –- like is it like in other words could you envision like a model with more than one feed?
3357 THE HONOURABLE MR. VOLPE: We could, but we put in this one. We put in this application in part we have to, you know, -- Jean’s going to be upset with me, we’ll probably have to – we’ll probably have to stagger the -– at a particular point just to take into account that, you know, we’re going across several time zones in Canada.
3358 And so, if there’s a suggestion that we have another feed in order to do that, to accomplish that, we’re willing to entertain it, but, you know, for our -– from our perspective the fact that you already asked us to go digital as another platform and you didn’t talk to us about print, although everybody says print is done, you know, we’re operating. We’re okay. We’ve been at it for five years. We celebrated our fifth anniversary just the other day when we took the company out of receivership.
3359 There are a lot of people who can’t say that, but we can say it and all the people that are part of our organisation also operate in print, but they are beginning to operate in digital. In part because you asked that as part of the application process, so we invested in it.
3360 Now once you invest in going digital and you put everything on digital, you can no longer say, you know, you have to be careful about what time you go to Vancouver, what do you go to St. John’s Newfoundland. You know? It’s the same time as it’s accessed by somebody in Beijing, in Berlin, in Rome or even where I come from.
3361 And so, we’ve done that and so I think we have to take that into consideration when we ask questions such as that.
3362 A lot of applicants spend a lot of time trying to satisfy a need that hadn’t been expressed. We don’t think it’s expressed.
3363 MR. BRAZEAU: Yeah, the nature of our service, which is news – live news - for 14 and a half hours a day, we thought didn’t really lend itself to, you know, being rebroadcast out west at a different time.
3364 Now we’re not closed to that. You know, there might be some advantage to doing it and we’re certainly open to consider it. And then as Joe pointed out, we do also have -– we will have a digital platform. We do have a digital platform. So again, you can have access to the news at any time.
3365 And what we’re really doing is we’re putting the product out there and we’re letting, you know, the subscriber really, sort of, decide what time, what place, how he’ll access that service. So it’s up to them to make that decision and we’re just making sure that the news in various languages that they want is accessible.
3366 COMMISSIONER SIMARD: Thank you. In your application you made another commitment with respect to annual bursary and various employment and internship opportunities. Could you please provide us with some information or details about the funding of these initiatives?
3367 THE HONOURABLE MR. VOLPE: We get requests at the paper and at the digital station from community colleges, universities, people who want to have -– want to practice their trade. You know, they’re coming from places like Brazil, from Portugal, from Ireland, from Poland, from England.
3368 You know, they’re coming from these places and they’re saying we want to have a place where we can at least practice our “trade”. We want to practice what we were “trained” in and we want to do it with somebody who understands what we want to do. Can we do it here.
3369 I give you an indication a few minutes ago that in our digital station we’ve already got four languages. We’re adding a fifth one - polish. We’re adding arabic as well and we’re going with that. We’re only going to do one every couple of weeks to start until we build a full schedule with all 20.
3370 But –- so they’re coming to us. At this stage of the game there’s -– in Europe they call them “stagisti”; people who are “staging”. They’re working co-op students. They’re co-op individuals.
3371 Or we have to qualify them under some government program so that they can get at least some funds. Instead of being out on unemployment there are various programs under the Ontario Government in this case, other provincial governments in other places, but because we’re in Ontario we’re going to talk about Ontario. No, we’re not here in Ontario right now, but our paper and our enterprise is in Ontario and the Federal Government and human resources development, et cetera, they have programs to accommodate such students. We do that.
3372 The community colleges and the universities call us and ask us if we can help some of their programs with bursaries and others, so we look for that with private sector engagement.
3373 Those are, you know, it’s not a satisfactory approach for me and I hope it isn’t for you either, but we haven’t got a mechanism in place yet where we can say here’s a fund from which we will draw -- and there’s a limit.
3374 Every time you put in a fund, whether it’s 10,000 or $100,000, the moment you get to a particular limit you can’t have any more. Whereas with the process that’s now fairly flexible you can do virtually anything, as long as people are want to do it and as long as you don’t abuse that willingness.
3375 COMMISSIONER SIMARD: So I guess that based on this explanation it would be hard to impose a condition of licence, with that respect?
3376 THE HONOURABLE MR. VOLPE: I’m sorry, it would be what, sorry?
3377 COMMISSIONER SIMARD: Hard, I guess, to impose a condition of licence?
3378 THE HONOURABLE MR. VOLPE: Oh, no, no. We’re prepared to go at that. We said it in our brief. We said, “We’re willing to set those up already”. We already anticipated that as a condition of licence.
3379 COMMISSIONER SIMARD: M’hm.
3380 THE HONOURABLE MR. VOLPE: We said we want to do it. We don’t have a licence yet. What I’m trying to give you is an indication that in anticipation of an opportunity to receive a licence we’ve already gone out and started to build the infrastructure to make ---
3381 COMMISSIONER SIMARD: Okay. The explanation that you just provided refers more to internship or employment, I guess, opportunities, but when we talk about bursaries, again, like there’s a need for a fund and ---
3382 THE HONOURABLE MR. VOLPE: You know, we ---
3383 COMMISSIONER SIMARD: So it would be financed by what you just said, like, private ---
3384 THE HONOURABLE MR. VOLPE: No, we would generate private sector funds --
3385 COMMISSIONER SIMARD: Okay. Yeah.
3386 THE HONOURABLE MR. VOLPE: -- for a particular fund that would provide bursaries for students from --
3387 COMMISSIONER SIMARD: Okay.
3388 THE HONOURABLE MR. VOLPE: -- let’s say those 20 language groups --
3389 COMMISSIONER SIMARD: Okay.
3390 THE HONOURABLE MR. VOLPE: -- just for the sake of that and say we would like to offer 20 a year.
3391 COMMISSIONER SIMARD: No, that’s fine. That’s fine, because –- yeah, that’s clear. And I understand that you would accept a condition of licence? That’s my –- that’s what you just said, no?
3392 THE HONOURABLE MR. VOLPE: That’s not a problem. We made the offer so --
3393 COMMISSIONER SIMARD: Good.
3394 THE HONOURABLE MR. VOLPE: -- that’s good.
3395 COMMISSIONER SIMARD: Thank you. That leads us to the final series of questions, as far as I’m concerned.
3396 So based on your application, you project the highest local advertising revenues of all applications by a significant margin. So -- and the total advertising revenues are the second highest.
3397 Could you please give us some detail about how you expect to attract advertising revenues? I know that we have talked a bit about it, so at this stage in the process, if you have something else to add for the record, please do so.
3398 THE HONOURABLE MR. VOLPE: Sure, Madam Commissioner. I -- you know what, yes, we have more confidence in the marketplace responding to this unique product than other people have. And you know, I am willing to be beat down, but I have got confidence that what we are going to offer is going to be attractive to everybody.
3399 Just give you an example, for a moment, a really quick moment. Those 20, those 20 population groups represent just under 6 million people. If a station can engage a mere 10 percent of them in the programming over the course of the day, that's 600,000 people that an advertiser, a national advertiser isn't getting today.
3400 So what's our pitch? We have to be able to tell all of these advertisers, national advertisers that this is a void that nobody else is filling. I don't care whether you're selling cars, insurance, or money, the bank, okay, or any series of other items where you have a national scope.
3401 Even if you're our government, and the Government of Canada, even the Government of Ontario is -- they don't believe in advertising. They think that everybody is going to vote for them no matter what happens. Well, I hope that everybody votes. But I know from experience that they don't vote because you want them to vote.
3402 But that's advertising, and they have an opportunity to engage only 600,000 across the country if there's a mere 10 percent penetration rate. I give you some numbers about our early successes already measured by independent analytics, whether they're Google, Facebook, Instagram, LinkedIn, and others because we are making an effort. We're providing content, we're going to give everybody an opportunity to be able to say here, you weren't getting that individual, now you can.
3403 So is 10 percent a lot? You need to take a look at the CBC numbers. That was an organization that came up in the previous application. So they've got a potential audience, not only of the 22 million that are Anglophones, but they're missing the 7.7 million. So what do they do? Well, I think that they're guided by some restrictions.
3404 But take a look at CTV, another applicant earlier on. So how many of those people are they getting? Well, if you take a look at some of the matrices along social media, they are not -- they're not going beyond the 10 percent penetration rate.
3405 So can we set ourselves up to that same low standard? Yeah, except I think we're going to beat that. So that's Number 1.
3406 Number 2, you take a look at what I said a moment or two ago to the Chairman. You know, what's your advertising strategy? What are you going to sell somebody? If you're going to sell them a 15‑second spot, how much is that spot worth? I think it's going to be worth a lot of money. But if you just go at $1 per second, that's $15 for a $15 slot.
3407 Just think about those numbers for a second. So in one minute you've got four of them. That's 60 bucks. That's pedestrian for saying $60. And you're going to say, well, you can do 6 of those, 6‑minutes per half hour. What's 6 times 60? Well, we didn't go to 6, we went to 4, just to be, somebody said conservative, but for somebody like me, that indicates, you know, there is some sort of political bias, like my colleague to my right.
3408 So to be very, very cautious, we'll say 4. What's 4 times 60? 240. 240 per half hour, per half hour, multiplied by the number of half hours you have during the day on an 18‑hour cycle, you know, as an average, multiplied by 365, you know what you get? Let me see. Have I got the fact right? Oh, $3,153,000 at 300 -- 153 and $600. That's what it means. That's $1 per second for a 15‑second slot.
3409 I don't know what other people are selling. I mean, if I offered ---
3410 COMMISSIONER SIMARD: Good.
3411 THE HONOURABLE MR. VOLPE: --- everybody on my newspaper an opportunity for 15 bucks per appearance, I would be inundated. I don't know whether I'd have enough room to actually produce news.
3412 So I'm assuming that the same type of enthusiasm is going to afflict any agents that I put out there on a commission that maybe, just think about, if they go to a dollar fifty, that the that three-million-one‑five, now becomes four-and‑a‑half million. If I make it $2 what happens?
3413 COMMISSIONER SIMARD: Yeah. So the next ---
3414 THE HONOURABLE MR. VOLPE: So that's how we came up with those numbers.
3415 COMMISSIONER SIMARD: Good. So the next logical question is if your service does not generate like the projected level of revenue, could you please tell us on, I guess, your -- how would you do? How would you -- how would be, I guess, the -- your service ability to achieve its financial objective and maintain its proposed commitments?
3416 THE HONOURABLE MR. VOLPE: Well, our proposed commitment is to be a deliverer of public policy outcomes. And we're going to do that on the basis of the wholesale rate that you provide us. We're going to aim for break even on that alone.
3417 What I said in my introduction and what I hope to repeat over and over again is that we're going to use this type of enthusiasm and this type of very cautious approach to engaging advertisers in a unique product that's national in scope and it's going to have talented people that they can make a minimal investment of a dollar or two dollars, or as the case may be, a lot more. You know, I'm prepared to be very straightforward about exactly how we're going to get our monies.
3418 I didn't hear that same kind of enthusiasm by other applicants because I'm not sure if they looked at it, and if they did, they didn't say it. I'm saying it because I did.
3419 COMMISSIONER SIMARD: Thank you.
3420 THE HONOURABLE MR. VOLPE: Okay. Jean, who's a money guy and a finance person, in addition to being a government relations individual said, you know, some of that money you're going to invest, and when you invest money you expect that you're going to get a return on it. And we're going to get a return on it.
3421 COMMISSIONER SIMARD: It is my understanding that you project the lowest proposed depreciation cost over the prospective licence term despite high cost commitments, such as the use of satellite studios in Vancouver. It's written here, Calgary and Montreal, but I understand that it's Toronto and Montreal.
3422 THE HONOURABLE MR. VOLPE: We have ---
3423 COMMISSIONER SIMARD: So -- but the key question here is if you could provide us with a detailed breakdown of your projected capital expenditures as an undertaking?
3424 THE HONOURABLE MR. VOLPE: Sure.
3425 UNDERTAKING / ENGAGEMENT
3426 ` THE HONOURABLE MR. VOLPE: But we've already said, we've already said we have built partnerships already. We're not going to, we're not going to write down any of those assets in those locations that we mentioned because we're sharing them with people who are part of our project.
3427 You know why they're doing it, Madam Commissioner? Because they actually believe in the project, they actually believe in the country, they're utilizing material and equipment and facilities that are underutilized. And that -- you know, that's something that people have forgotten to do in this country. If you have unused inventory, you apply it to another use. They're applying it to use with us. We're not going to discount that.
3428 So we've done -- whatever investments we've got in technology, we've done it on a straight line basis. That's why it comes across as being the lowest, because we're going to put our investment in people. That's a high cost. You've asked everyone else how much are you investing in journalists? We gave you exact numbers and we gave you exact numbers about how much money would be available per every half hour of production. And under those numbers, we’re going to be able to deliver everything that we said in our supplementary brief and that we provided you in our program.
3429 COMMISSIONER SIMARD: So you just said that you make a lot of investments in people. So I understand also that you project the largest amount of administration and general expenses by a significant amount.
3430 Could you provide us a detailed breakdown, again as an understanding?
3431 THE HONOURABLE MR. VOLPE: We can do that too, but here’s a classic example. You have before you how many people? Everybody else that’s appeared before you has had a minimum of 10. If you take a look at the administrative costs of appearing before a group of commissioners to make the point of their application, you’re going to believe that those applicants haven’t built in a big administrative costs don’t include just salary; it includes the whole operation. That’s why they appear as high as they do.
3432 COMMISSIONER SIMARD: Has CRCGM secured adequate funding for its proposed operations?
3433 And the next question is that I would like you to discuss your financing strategy to address any financial shortfalls you may encounter.
3434 THE HONOURABLE MR. VOLPE: If I heard the first part correctly, Madame -- and please excuse me; I don’t always catch everything -- but yes, we do have -- we think we have the financing in place in order to get us going and to hit the ground running. We’ve made our own personal investments, as I said, in making sure that we can test out -- we can do the proof of concept online, and we’re doing that. It’s a work in progress. I’ve already admitted, but it’s an investment that we have made. We haven’t asked anybody for anything. We haven’t asked anybody to advertise to give us that. We haven’t asked the Commission to pay us more in a wholesale rate.
3435 Sorry, okay.
3436 We made the investment because we thought we could do it with whatever resources we had. So I can say with great confidence, yeah, we’ve put the -- we can get the resources needed in order to get this project off the ground when you give us the licence.
3437 COMMISSIONER SIMARD: And what is your financial strategy to address any financial shortfall you may encounter?
3438 THE HONOURABLE MR. VOLPE: I suppose everybody has to have a contingency plan. Our contingency plan is always to work harder and smarter if we didn’t succeed the first time.
3439 MR. BRAZEAU: I think ---
3440 COMMISSIONER SIMARD: Yes?
3441 MR. BRAZEAU: --- also the business plan was based on the subscription fee. So any revenues generated from the advertising dollars were above and beyond and would be reinvested. Most of it would be reinvested in the business. So that’s how we approached it.
3442 So with the -- if the Commission agrees to the subscription fee that we put forward, then we’re very confident that we can meet the business plan with those financial numbers.
3443 COMMISSIONER SIMARD: Thank you.
3444 And my last question is about your digital strategy. Could you briefly explain to us what is your digital strategy? Briefly please.
3445 THE HONOURABLE MR. VOLPE: Do you know this historical figure called Cicero? His approach was never say in one sentence what you can say in 30 paragraphs.
3446 MR. BRAZEAU: And that’s just in Italian.
3447 THE HONOURABLE MR. VOLPE: I’m a devotee of Cicero, Madame. So yes, I’ll try to be straight, very quick.
3448 I’m one of those individuals who, just a few short months ago, was like some of the people that you heard over here earlier. You know, they didn’t want to do a digital strategy because it was going to take away from the newspapers, it was going to take away from the TV licence, et cetera. I said, no, my parents gave me some brains. They didn’t give me as many as they gave a lot of other people in this room, but they also taught me to use some of them so that I don’t look like the most stupid guy here. And I said, you know what? You had better develop the strategy that everybody else is using. You may not know to do it. You better learn. So we’ve been learning for the last five months.
3449 And the one thing that I’ve learned about the use of social media, the digital strategy, et cetera, using digital to develop anything is that it is another tool in our toolbox in order to expand the awareness of our brand. And we have to have everybody know who we are, what we’re doing, and if we’re going to use digital for it, we’re going to use it.
3450 That’s why I said to you in the course of this last five months, we’ve started with a really aggressive website. We’re now into absolute -- don’t ask me how to use that just yet. All I know is that apparently people can get our stuff on the telephone. We’re in LinkedIn because, you know, I had to be on LinkedIn so that I could get people like our lawyer to follow everything we say. I want to see that that guy’s just crazy or stupid, one or the other. So she’s on there. And we’ve got Facebook. We’ve got Instagram. We’ve got all these others. And the whole purpose of that is to be able to promote, initially, our paper; secondly, now, this project, should you give us the green light.
3451 Does anybody make money on digital? Yeah, Google and Facebook do. They’re the only ones.
3452 The Europeans, the Italians and French among them, and the Americans are now trying to sue the pants off those companies because they’re quite frankly stealing all the resources from those places, not putting anything in.
3453 But from our perspective, we’re just like CBC, CTV, et cetera. Behind the pay wall, there’s no money. But for us, more importantly, there’s a developing awareness that this project is going to come forward, and some of the principles are emerging. We’re going to build a brand identity, so when you say, “You know what, Mr. Volpe, Mr. Brazeau, Mme Patterson, and all of your associates, you’re bang on; we’re going to give you the okay. We’re going to give you an opportunity to demonstrate that this program is going to unfold and unfold properly.” We’ll already be hitting the ground running because we’ll have all those newspapers, all those magazines who are part of our project, plus all the digital media that they’re going to fit into our own website while we’re waiting for your okay. And even afterwards, we’re going to build a brand awareness.
3454 It’s not going to be that on day one, whether it’s September 1st, 2020 or whether it’s January 1st, 2020, whatever it is. What’s going to happen is people are already going to be looking forward to that launch. That’s what we’re going to use digital media for. That’s where we’re going to use digital strategy. We’re going to do it as well as a dry run for everything, so that everybody will know that what we’re doing.
3455 I mean, some of the other applicants -- God bless them -- they’re doing their job. They’re doing their best. They’re focused on what we’re focused on, for example, developing news, generating news. No, they’re not; they’re actually reporting on some of it. We’re doing it every day.
3456 But I want my newspaper to go forward, so I have to promote it every way I can. Do you think that any of the people who were here want to promote my newspaper? No. Do I hold them in any less regard for that? No.
3457 COMMISSIONER SIMARD: Thank you.
3458 THE HONOURABLE MR. VOLPE: So the digital has to promote this station ---
3459 COMMISSIONER SIMARD: Thank you very much.
3460 THE HONOURABLE MR. VOLPE: --- in any language, all 20 of them.
3461 COMMISSIONER SIMARD: Thank you.
3462 So those were my questions. Thanks again for your application and for your presentation and for answering all my questions.
3463 Thank you.
3464 THE HONOURABLE MR. VOLPE: Thank you, Madame, for listening.
3465 THE CHAIRPERSON: Thank you.
3466 I will ask Commission counsel in a second. A couple of very short questions. Earlier you described, in relation to the advisory committee, that you would generate a report that would be submitted to the Board. Would you be willing to submit such a report to the Commission annually?
3467 THE HONOURABLE MR. VOLPE: Why not?
3468 MR. BRAZEAU: Absolutely. Absolutely.
3469 THE HONOURABLE MR. VOLPE: Why not? You know, the Board exists for accountability and for transparency. That’s what the Board of Directors exists for. The Board of Advisors are there to help in that accountability, to hold management to account, but also to give counsel. But our Board of Directors is there for accountability and transparency. And if part of that process is to give you an annual report then it will be done.
3470 THE CHAIRPERSON: And I guess one other question, and it's a bit unfair, but I'll ask it anyways.
3471 THE HONOURABLE MR. VOLPE: I'll give you a long answer and make it even more unfair.
3472 THE CHAIRPERSON: That'll be my punishment.
3474 THE CHAIRPERSON: The -- a moment ago when we were asking about what do you do if your forecasts are wrong, Mr. Brazeau said you're confident that the fee, subscription fee will be sufficient, and to paraphrase somewhat, the rest is gravy. Based on that, would you be prepared to accept a lower subscription fee?
3475 MR. BRAZEAU: The point there was that with the subscription fee -- what we did is that we took -- okay, a subscription, what can we produce with that? And we came up with a plan based on what Joe was talking about with, you know, how many people do we need, how many -- you know, how much does it cost for a half hour, et cetera, et cetera. So we came up with that plan, and we can live with that plan.
3476 But what we're committing to is a lot more than that, and that's where the other revenues are coming from. Are we going to keep the gravy? No, we're not. We're spending the gravy. The gravy will be spent on more PNIs. The gravy will be spent on more Canadian production. The gravy will be spent elsewhere.
3477 But can we produce a core product, which is news fourteen-and‑a‑half hours a day? That's where we're sort of confident with that. So that's what I meant by that.
3478 THE CHAIRPERSON: Thank you for the clarification.
3479 MR. BRAZEAU: I wish there was gravy.
3480 THE HONOURABLE MR. VOLPE: You know, Mr. Chairman, as I said at the very beginning, you're buying a service and it's going to be first rate service. That's what you're buying. What we're selling outside that is the quality that we're producing to you. And if we're going to maintain that quality as Jean says, we're going to have to upgrade that quality all the time so we have to make an investment in ourselves and in you.
3481 THE CHAIRPERSON: Thank you. Understood. I believe counsel has a few follow up questions?
3482 MR. BOWLES: I believe I actually only have one.
3483 Your application is based -- is for a single feed, if I understand, but in your materials you muse about the possibility of a second feed at some point. Am I correct in understanding that the content on those feeds would be identical but simply time shifted?
3484 THE HONOURABLE MR. VOLPE: Yeah. I think we reinforced that earlier on as well.
3485 MR. BRAZEAU: Yeah. And again, it's -- you know, what we're delivering is somewhat different than what's been proposed by other applicants. We're delivering live news. So you know, time shifting live news, I mean, we can certainly consider it and maybe there is value to it.
3486 But we thought when we came up with the proposal that given -- you know, given that it is, you know, the product that we're delivering, plus we will also have a digital platform where people can access it, you know, 24‑hours, 7 days a week that that was enough and then people can go and find the product.
3487 So that's why we came up with the national feed, but we're certainly open to -- you know, maybe there is a significant advantage to having a second feed.
3488 MR. BOWLES: My question wasn't directed at the benefits or drawbacks. The angle that I guess I -- I'm coming at is to the extent that programming defers, you would likely need authorization to have those multiple feeds. And I'm just wondering if you're contemplating multiple feeds with different content, how is the Commission supposed to deal with this as part of this licensing process?
3489 THE HONOURABLE MR. VOLPE: No, we didn't contemplate that.
3490 MR. BOWLES: Okay.
3491 THE HONOURABLE MR. VOLPE: We want the Commission to take a look at that singular feed, and we want the Commission to take a look at the application as presented. You know, you're introducing something, with all due respect, that's not on the table, and we don't want anybody to be distracted by it.
3492 MR. BOWLES: Okay. Perfect. Thank you.
3493 THE CHAIRPERSON: And I thank you very much both for your presentation and your patience. That was a long hearing day. Much appreciated.
3494 We will adjourn -- oh, Madam Secretary has an item.
3495 THE SECRETARY: I just ---
3496 THE CHAIRPERSON: Pardon me.
3497 THE SECRETARY: Yes. I just forgot to mention something earlier. For those who wish to appear tomorrow, they would be allowed 10‑minutes for their Phase II presentation.
3498 THE CHAIRPERSON: I'll also speak tomorrow morning. I am cognizant of the fact that I think we're doing a wireless public alerting test tomorrow. So ---
3499 THE SECRETARY: Yes, it's at 2:55, I think.
3500 THE CHAIRPERSON: --- while I hope -- although the Ontario test might be picked up if people touch an Ontario tower.
3501 So we'll have to talk about that with everyone in the morning to make sure cell phones are turned off. While we're happy to see the system work, I don't think we want to hear it in the room. So we'll deal with that tomorrow morning.
3502 We'll resume at 9:00 a.m. Again, thank you.
3503 THE HONOURABLE MR. VOLPE: Mr. Chairman, thank you very much for listening to us and me, in particular. I promise not to feel offended having missed the opportunity to get the other commissioner offended as well with my longwinded answers.
3504 THE CHAIRPERSON: It's a pleasure, and I won't call you, I think we'll use the term cautious rather than conservative when referring to you. Is that okay?
3505 THE HONOURABLE MR. VOLPE: Thank you very much.
3506 COMMISSIONER LAIZNER: I was going to ask you why you weren't any more passionate about the application, but you convinced me of your passion so that wasn't necessary.
3507 THE HONOURABLE MR. VOLPE: You caught me at a dull moment.
3508 THE CHAIRPERSON: Goodnight, everyone.
--- Upon adjourning at 6:09 p.m.
- Date modified: