TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
BROADCASTING APPLICATIONS AND LICENCES/
DEMANDES ET LICENCES EN RADIODIFFUSION
HELD AT: TENUE À:
Vancouver Trade Vancouver Trade
& Convention Centre & Convention Centre
Room 8-15 Salle 8-15
999 Canada Place 999, Canada Place
British Columbia (Colombie-Britannique)
February 24, 2000 Le 24 février 2000
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Broadcasting Applications and Licences/
Demandes et licences en radiodiffusion
BEFORE / DEVANT:
Françoise Bertrand Présidente/Chairperson
Présidente du Conseil/
Chairperson of the
Andrée Wylie Conseillère/Commissioner
Stuart Langford Commissioner/Conseiller
Cindy Grauer Commissioner/Conseillère
Barbara Cram Commissioner/Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Lori Assheton-Smith Legal Counsel/
Michael Burnside Hearing Manager/ Gérant de
Marguerite Vogel Secrétaire de l'audience/
HELD AT: TENUE À:
Vancouver Trade Vancouver Trade
& Convention Centre & Convention Centre
Room 8-15 Salle 8-15
999 Canada Place 999, Canada Place
British Columbia (Colombie-Britannique)
February 24, 2000 Le 24 février 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
PHASE III - INTERVENTION BY / PAR (cont'd)
Jonathan Blasberg 1028
Jake Warren 1032
Thoughtcrime Productions 1037
Garth Holden 1041
Ronald Ranger 1046
Canadac Services 1049
Chinese Consolidated Benevolent Association 1053
Ben Pires 1057
The Council of Canadians 1065
The Victoria Native Friendship Centre 1070
The B.C. Festival of the Arts, Senate Council
Member and Greater Victoria Film Commission 1075
Alberta Motion Picture Industries Association 1083
Yellow Kitchen Productions 1090
Intrepid Theatre Company Society 1093
The National Screen Institute of Canada 1100
Victoria Independent Film Producers Association 1106
Questions by Commission 1117
PHASE IV - REPLY BY / RÉPLIQUE PAR
CHUM Limited Victoria 1131
Trinity Television Inc. 1136
CHUM Limited Vancouver 1147
PHASE I - MDS APPLICATIONS
PRESENTATION BY / PRÉSENTATION PAR
SkyCable Pacific/Craig Broadcasting Systems Inc. 1158
LOOK Communications Inc. 1242
Vancouver, British Columbia / Vancouver (C.-B.)
--- Upon resuming on Thursday, February 24, 2000
at 0805 / l'audience reprend le jeudi 24 février
5654 CHAIRPERSON OF THE COMMISSION: Alors, good
morning everyone. We want to put on the public record that Mr. Viner is
getting older today.
--- Laughter / Rires
5655 CHAIRPERSON OF THE COMMISSION: Unfortunately,
we cannot give him maybe the birthday gift he would like today. We haven't
brought our licensing pad, as Commissioner Grauer often says.
5656 Good morning everyone. It is going to be a
long day. We will be sitting longer hours today, because we will try to kind of
look at the MDS applications today. But let's start by the first item on the
agenda and to pursue with the applications for television stations.
5657 Madame la Secrétaire, vous voulez appeler
notre prochain intervenant?
5658 MS VOGEL: Thank you, Madame
5659 I would like to begin by checking to see if
some of the interveners who weren't here yesterday have joined us
5660 Vancouver Media Directors Council.
--- Pause / Pause
5661 MS VOGEL: Greater Nanaimo Chamber of
--- Pause / Pause
5662 MS VOGEL: And, Mr. Ibrahim.
--- Pause / Pause
5663 MS VOGEL: Then, I would like to invite Jake
Warren and Jonathan Blasberg to come forward please.
5664 CHAIRPERSON OF THE COMMISSION:
5665 Don't be afraid. We look serious, but we are
not hurting anyone. Don't be intimidated.
5666 I would like to remind everybody that
although you come two or three at the same time, you are allowed 10 minutes for
the intervention, and that also we are taking this period of the hearing really
to be listening.
5667 We will be asking questions only if we need
clarification or understanding, and we are really kind of devoting the time to
the listening period of this hearing. So keep this in mind.
INTERVENTION / INTERVENTION
5669 MR. BLASBERG: Yesterday you heard strong
support for CHUM from the voices of arts and culture on the Island. Today, many
other Island voices in support of CHUM will be heard.
5670 My name is Jonathan Blasberg. I am 24 years
of age and I have spent the last year and a half working with youth at risk in
Victoria, with the Youth Employment Project. It is a program dedicated to
helping youth facing employment barriers in today's economy.
5671 I was raised in Vancouver and I have lived in
Victoria for almost five years now. I have seen it grown, and I have grown with
it. We are the capital of British Columbia and, as such, I am proud to live
where so many important decisions are made. Today I have come to Vancouver to
help make another important decision.
5672 Does Victoria need another television
station? The answer is obvious: Yes. Victoria currently has one television
station, one eye to watch the goings-on at the capital city. But just as any
person's vision is compromised with only one eye, so too is the city's vision
5673 Victoria needs two eyes to perceive depth,
and in order that we see not only the events occurring in front of us but also
the happenings that occur on the edges of our communities, in our peripheral
5674 Right now Victoria has one eye, and for a
long time it has been half closed. Only with the granting of another licence in
Victoria will the television community here have real focus.
5675 Each person has a reason to come here today
and make their opinions heard. I am here to speak in support of CHUM Limited in
their application for a Victoria broadcasting licence. In actuality, though, my
support for CHUM is a byproduct of my support for something greater --
5676 I spend my workdays at the Youth Employment
Project encouraging other youths to grow and challenge themselves in the working
world, but I have asked myself many times, and now I ask you: What truly defines
youth? Do we constrict ourselves to the classic "age 16 to 24" definition,
discarding those who are 15 and under, dismissing those over 25, simply for
spending too much or too little time on the planet?
5677 As someone who is facing their 25th birthday
in two months, I implore you to answer no. I still consider myself a youth, and
will continue to do so, because youth is not and should not be a measure of age
alone. Youth must also be a measure of vitality. It is the characteristics of
youth that make us young, and these characteristics can belong to anyone,
regardless of age.
5678 Curiosity, honesty and charity without
forethought are all characteristics of youth. Youth does exist in everyone,
regardless of age. It is simply that some of us choose to suppress it and
others, like the people at CHUM, choose to express it.
5679 So why am I here for CHUM? Because CHUM and
its people are youth -- perhaps not all of them by the classic definition,
but in meeting with them I recognize the qualities of youth unbounded. They were
genuine, sincere and truly interesting in working with Victorians to make our
city a better place.
5680 If I didn't feel that way, I wouldn't be
here. The people at CHUM are not afraid to change. They seek it out and embrace
it. Otherwise they wouldn't be here. But most importantly, like you, me and the
city of Victoria, CHUM wants to grow, which in the end is the ultimate
characteristic of youth itself.
5681 I believe CHUM is looking to grow, and
Victoria needs just that. Our media community has become stale, stagnant and
unchanging. It has lost its youth within its organization and in its viewers.
Victoria's media needs rejuvenation so in turn Victoria can be
5682 I am tired of describing Victoria to the
citizens of the world as a city in relationship to its distance from Vancouver.
We are the capital of British Columbia and, as such, we need to be heard and we
need to be seen.
5683 Great things are happening here, and we need
open eyes to see it and to help others see it too. When politicians, bureaucrats
and business people spend a cold winter night on the street to support
Victoria's homeless, people need to know. When former street youth challenge
award winning chefs that they can cook a tastier Kraft dinner, and prove it in
the middle of downtown Victoria, people need to know.
5684 And lastly, when the graduates of our Youth
Employment Program, where I work every day, pick up brooms and mops and help
clean up the streets they once sat on, people need to know. Victoria is a city
of growing youth and in order for Victoria and its youth to grow, we need new
media to grow in.
5685 I hope that you realize, as I do, that CHUM
is the broadcaster that can make that happen. By bringing youthfulness to
Victoria, CHUM will make Victoria a better place and, because it is our
province's capital, it will make British Columbia a better place for everyone
and their youth.
5686 Thank you.
INTERVENTION / INTERVENTION
5688 MR. WARREN: Thanks, Jonathan.
5689 Good morning, Madam Chairperson, members of
5690 My name is Jake Warren. I am 28 years old and
a resident of Victoria, British Columbia. I would like to thank you for the
opportunity to speak here today in support of CHUM Limited's application for
their proposed CIVI, your Island television.
5691 As I outlined in my letter to you, I have
much experience in Victoria with the arts communities, music, film, video
production and youth advocacy.
5692 I have been working with youth since I was 18
and have contributed to the City of Victoria as the Chair of the Victoria Youth
Council, the Chair of the Victoria Street Surf Association, which was the
society that represented skateboarders back in the late 80s in their quest to
build a skateboard park, a city-funded skateboard park, and also a promoter of
many live all-ages concerts, mostly alternative music.
5693 This is why I am not only passionate about
the whole concept of a new television station on Vancouver Island, but I also
feel I can offer an expert opinion on what the Island really needs from a new
station, especially when it pertains to youth, and I most certainly believe it
5694 I recently produced the independent youth
forum, the Future of Television in Victoria. The forum presented in part by CHUM
Limited was designed to connect with Victoria's youth and to promote awareness
and involvement in the application process, and in doing so answered three
important questions: Does Victoria need another television station? What should
a truly local station know about its youth audience? What ideas do the youth of
the Island have about this new station?
5695 I invited approximately 50 young people to
participate in the forum -- university students, young professionals, high
school students, film and video producers, promoters, musicians, artists. In the
end, we had 44 young motivated Victorians come together on a Friday evening,
January 21, 2000. The 44 people were separated in three small groups, each
participating in three different exercises that we called "stations". Each
station dealt with a particular area of local television. We hoped that the
forum would not only be informative and relevant, but incite communication and
interaction amongst the youth in a stimulating manner.
5696 All in all the forum was a huge success. The
results speak volumes about the incredible amount of motivation and creativity
that young people possess, a resource that must be included in the development
of a new station and continually nurtured if it is to properly represent an
5697 At the forum, the overall opinion of current
local television was one of discontent and healthy scepticism, mixed with equal
portions of excitement and true vision for the future.
5698 The youth embraced the concept of a new local
television station and had countless reasons why one is not only needed but
desperately hoped for, the most prominent one being the most obvious: The lack
of significant representation and inclusion that they have endured for far too
5699 I encourage you to read the report that I am
about to file and view the video that accompanies it. I will leave that with you
this afternoon. This, I feel, is the only way to properly understand the
individual voices that were so eloquently exhibited there.
5700 Personally, CHUM Limited I believe is the
superior applicant. There is no question about this. It is the most capable and
historically committed to the elements of television programming that I believe
Islanders not only require but deserve. One that can promote our Island
identity, one that unifies the north, south, east and western reaches of the
Island and exists, or can exist, to represent all communities
5701 I believe that the station believes all age
groups are of priority and deserving of representation. A station that includes
vital, original, creative individuals in the production of programs meant to
entertain and inform them. I don't believe that it is safe to assume that shows
that appeal to people in other parts of the country will necessarily do the same
on the Island.
5702 They are also a station that can expose the
absolutely unique and diverse arts and entertainment communities on the Island
and promote them to the world -- I'll be very quick here. Most of all, a
station, I believe, that doesn't just scratch the surface of the community, to
simply relay information from a safe distance, but establishes roots in the
community and honest and genuine investment in nurturing positive, unduplicated,
original and distinct local television.
5703 In closing -- and I don't have to tell
you this -- anyone with the right amount of money and a licence can own a
television station and report news and explain details about upcoming events.
But what I see in stations and channels owed by CHUM, like MuchMusic, Bravo and
City Television, is an honest investment in the product and a natural creativity
in the method in which it is delivered to the public.
5704 The future of their stations and channels
depend on the people they broadcast to, and they know it, they care. Victoria
and the Island deserve that kind of commitment to exist in their local station
and I believe CIVI, your Island television, will achieve just that, and I can't
wait to see what happens.
5705 Thank you very much.
5706 CHAIRPERSON OF THE COMMISSION: Thank you very
much to the two of you. Thank you. We are really relieved that youth can be not
only based on age. Thank you. And so is Mr. Viner.
--- Laughter / Rires
5707 MR. BLASBERG: Happy Birthday.
5708 MS VOGEL: Our next intervener this morning is
5709 CHAIRPERSON OF THE COMMISSION: Welcome. Good
INTERVENTION / INTERVENTION
5710 MR. SPANGLER: Good morning, Madame Chair and
5711 I am here to talk today about dramatic
feature films. My name is Bruce Spangler and I am here today to speak on behalf
of the CHUM application for CIVI in Victoria.
5712 I am a graduate with a BFA in film from Simon
Fraser University, and the name of my company is Thoughtcrime Productions. I am
currently in post-production on my first feature, entitled "Protection", which
is a dramatic art film about the issue of child abuse.
5713 "Protection" is the first of many feature
films I plan to make. I intend to make challenging Canadian films about real
issues. I want my films to be accessible, but I am not simply seeking to satisfy
5714 I would normally never speak on behalf of any
corporation or company, but I am compelled to do so in this case because there
is a problem in the feature film community in B.C. and on the Island, and I
believe CHUM and CIVI can help.
5715 When I think edgy Canadian feature, I think
of Citytv in Toronto, owned by CHUM. Diane Baim from Citytv was the first
broadcaster who saw the potential and expressed an interest in my
5716 Even though it was shot in a low budget
guerilla film style and in spite of the fact that it is a dark and perhaps
difficult film, Diane Baim and Citytv were unafraid and have offered me a
5717 Indeed, most of the best B.C. features, the
adventurous, sophisticated and award-winning features, tend to be licensed and
broadcast by Citytv in Toronto.
5718 It is truly ironic that my film, a British
Columbian independent feature, will be seen in Toronto but may never be seen on
free television in my home province, because there are no broadcasters with
enough courage to air the film.
5719 I believe that CHUM must come to B.C. if the
Canadian feature film scene here is going to grow. I am Canadian, but have spent
many years living in the U.S., from Michigan to Nebraska and Los Angeles. My
years in the U.S. have taught me the impact that film and television has in
shaping the cultural mindset of a nation.
5720 Getting pumped full of bad American
television and film has an impact. If a nation does not have its own culture,
how can it expect to maintain its political independence in a global economy? If
Canada does not have an indigenous, unique and autonomous culture, how long can
the geographical borders be maintained?
5721 Personally, as an independent West Coast
filmmaker, I am tired of B.C. simply being used as a service industry for
inferior generic American product. There was about a billion dollars spent on
film and television in B.C. in 1999 and another billion spent in Toronto yet,
the vast majority of money spent here in B.C. is American money. This makes it
difficult to make an independent Canadian feature in this province. There are a
number of extremely talented filmmakers here, and they will be making Canadian
features in the future.
5722 It remains to be seen if they will make their
films here. It may be necessary for these filmmakers to move to Toronto. That is
because Toronto is where Canadian features get made and where they get shot. I
must include myself in this category. My feature is set in British Columbia.
It's about a social worker who works for the B.C. Ministry of Children and
Families. The film deals with the issue of child abuse investigation, which is
something I know from direct experience, having worked for the B.C. Ministry of
Children and Families for over five years.
5723 I intended for my film to be viewed by the
public in B.C. and by the politicians in Victoria and so become another voice in
the debate about this serious social issue. If I can't get my film to air on
free television in my home province, is it logical for me to continue to work
here or should I too consider moving to Toronto?
5724 I believe that if CHUM and CIVI come to
British Columbia, the pendulum will start to swing back. Their presence will
create an atmosphere of possibility. Local filmmakers who want to make art, who
want to challenge, who want to reflect what is happening in their community,
will have an outlet, and I have no doubt that you will see a blossoming of high
calibre Canadian feature films in B.C. and on the Island.
5725 If CHUM and CIVI come to this regional
market, they will help to redress some of the serious regional imbalances that
have emerged in the film and television scene in Canada.
5726 It is my urgent recommendation to the CRTC
that you give the best of Canadian west coast feature filmmakers a chance. Grant
CHUM and CIVI a licence and you will see the difference they will
5727 Thank you.
5728 CHAIRPERSON OF THE COMMISSION: Thank you very
5729 MS VOGEL: I would like to call Ronald Ranger
and Garth Holden please.
INTERVENTION / INTERVENTION
5730 CHAIRPERSON OF THE COMMISSION: Good morning,
5731 MR. HOLDEN: Good morning.
5732 My name is Garth Holden. I will be speaking
5733 I am just an average member of my community.
My only claim to any kind of expertise in the matters before the Commission is
the fact that I am a home support worker. I care for the elderly and the infirm
in the privacy of their own homes. Basically, those are the same homes that the
signals that you are making determinations on today will be received
5734 I have spent more than 10,000 hours in
private residences, from one end of Victoria to the other. Because of the nature
of my work, I have been accepted as an extension of most of the families that I
assist. Until I became involved in this process, I did not fully appreciate the
unique perspective someone in my position has on his/her community.
5735 If I achieve nothing else today, I would like
to express to the Commission just a brief case of the diverse flavour of the
community that you are making decisions about.
5736 Victoria is a migrant city. Most of us come
from somewhere else. In a multicultural country like Canada, Victoria is a
wonderful cross-section of that greater diversity. Any new television station is
going to have a format, and that is just the nature of the beast. My concern is
the ability of that station to reflect the eclectic face of my home
5737 The business' usual formats established in
the 1950s do not measure up to that task anymore. My television is inundated
with stations from Vancouver, Seattle and Dakoma. In any given week, I have a
better view of what is going on in those communities than in my own
5738 I was disappointed when we were passed over
in the last licence hearings, and decided to take a more active role in this
one. While informing myself about the groups involved in this hearing, I heard
one question over and over, "What can you do for us?" It was generally
paraphrased in terms like, "Who do you represent?", or "What is your
affiliation?", but the underlying message came through loud and
5739 When I admitted that I was simply a concerned
citizen, I was handed some pamphlets and quickly shown the door. Then I met the
people from CHUM. My experience with them has been the complete opposite. The
first thing anyone from CHUM has asked me is, "What can we do for you?". They
have gone to great lengths to ensure that they understand and can address my
concerns, and have done a superb job of keeping me involved in this
5740 I have interceded on behalf of the CIDI
licence application because of what I know they can do for my community. I come
in contact with a large number of people, who can only be described as
disfranchised -- the poor, the elderly, the disabled, natives and
minorities, to name a few. I shudder to think of what kind of reception a person
in one of these groups faces approaching a business-as-usual
5741 I would like each of you, for just a moment,
to put yourselves in the shoes of a young mother stuck on welfare. By the middle
of each month, there is no money to put food on the table, and you end up doing
something degrading just to feed your children. This goes on every month for
years, until some disaster forces you to seek media attention.
5742 You approach a business-as-usual broadcaster
and have to fight your way through security guards, receptionists and
secretaries to find anyone who can help you. And that person who can help is
asking, "What can you do for me?".
5743 Compare that scenario with the Citytv model
of an open television environment, and ask yourself which one you would want in
your own community.
5744 I tugged at your heartstrings enough. It is
time to get down to the nuts and bolts of what I want out of a new station in my
5745 It has to be truly focused on all of the
community. A Victoria station is serving all of Vancouver Island and the Gulf
Island communities, not Vancouver. It has to reflect the mix of people and
organizations out here on the west coast. Most importantly, it has to build a
format around the Island, not force one on us.
5746 On a personal note, I write romance novels.
It is a hard enough business for a man to break into without the added handicap
of living far from major publishers. Even a few minutes worth of national
exposure can make the difference in getting out of the slushpile on an editor's
5747 Our Island is close to robust communities and
all the artistic fields, which find little or no exposure today. A new station
must be able to support and promote these communities, not only locally but also
on a national and international level. We have had business-as-usual
broadcasting for far too many years. Our new station must be continually asking
"What can we do for you?". It has to be putting resources back into our
communities, such as educational programs, open forums and venues, for immediate
feedback and criticism.
5748 The CHUM Group offers my community all of
those resources and more. From letting a hip-hop fan record her own lyrics in
the Speaker's Corner booth to providing a national venue for our festivals and
events, CIVI is the station we need on the Islands.
5749 Thank you.
INTERVENTION / INTERVENTION
5750 MR. RANGER: Good morning, Madame Chairperson
and other Board Members.
5751 It is my pleasure to be here this morning in
support of CHUM Television. I am a wildlife artist, and I am also legally
5752 Locally, I am associated with the CNIB in a
number of other health and organizations. I cannot overstate the importance of
local television and radio stations in keeping the tens of thousands of other
people in similar circumstances informed of the resources and opportunities
available to us.
5753 In many cases, radio and television are the
primary link house-bound people have with their home town. All too often,
broadcasters view the disabled community only in the light of human interest
stories, focusing on disability rather than the countless skills, talents and
opportunities that my segment of society has to offer in return to our
5754 I was greatly impressed by the attitude of
everyone that I met at the recent gathering to promote the CIVI Application. No
one focused on my blindness, other than to comment on the fact that it must have
been an obstacle in re-establishing my artistic career. Instead, what I found
was a real and obvious interest in the work that I am doing.
5755 For the first time in a long while, I was
treated as an artist who happens to have visual problems, rather than a blind
artist. It may not sound like a great distinction, but it is the difference
between being treated as a working professional or as a token or freak
5756 The years I have devoted to developing my
talent and the good fortune I have had in regaining some of my sight are what
have led me to relaunch my career. But my story is the wildlife art that I
create, not the fact that there was an interruption in my productivity. The
people I met through CIVI all seemed to understand this immediately, and I
believe this speaks well for their individual and corporate
5757 The CHUM organization, VI-CIVI, is one that I
can wholeheartedly welcome and support in Victoria and the surrounding
communities. As I am sure you can understand, a dark crowded room with glaring
television lights at one end is not the most comfortable environment for a
person with limited vision. When I went to the CIVI gathering, fully expecting
to stand at the edge of the room, listen to what was said and perhaps pick up
some promotional materials, instead, the CIVI people quickly introduced
themselves, made sure that I was comfortable, and introduced me to the key
people in the room, including Mr. Znaimer, with whom I had a very educational
5758 It was a distinct pleasure not to have to
fight my way through a crowd to find out what was going on. I can only assume
that other people of differing abilities will find dealing with the CIVI and
assessing the resources they have to offer just as easy and rewarding as I
5759 I do believe that this area needs a second
television station, not only to increase the opportunity for people of differing
ability to interact with their community, but also to widen the scope of
material available to all. The people involved at the CIVI Application have
proven to me that they are the ones to do the job, both as individuals and as an
5760 The Victoria area has had monovision far too
long. We need to see an eye on ourselves that can see all of our community,
without the stereotype of the past. Please make CIVI that other point of view on
5761 The other part I would quickly like to make
is that CHUM Television -- I had a lot of feelings in trying to promote
this art career of mine. With CHUM Television, they were the ones that came out
seeking "What does the community want?" They came to us and asked us. That made
me feel of great importance in that obstacles in the future, being legally blind
as an artist, are now trivial. And I have CHUM TV to thank for that.
5762 Thank you very much, ladies and
5763 CHAIRPERSON OF THE COMMISSION: Thank you very
much, gentlemen. Thank you for your participation.
5764 MS VOGEL: Our next interveners this morning
are the Chinese Consolidated Benevolent Association and Canadac
5765 Would you come forward please.
5766 CHAIRPERSON OF THE COMMISSION: Good morning.
INTERVENTION / INTERVENTION
5767 MS HAMMOND: Ladies and gentlemen, I wish we
were meeting today in our wonderful city of Victoria, where the sun is shining
brightly. We delight in our diversity and our differences. We have a rich ethnic
mixture. You should listen to the philosophical discussions, hear the music and
savour the restaurants.
5768 Then there is our business community. What a
change from being merely a government city. To community eco-forestry; what an
outburst of energy and advanced technology and environmental industries; what a
growth in highly specialized manufacturing, everything from solar cells to top
quality fleecy winterwear, to the world's best kayaks.
5769 Then there is tourism, and the flock of
foreign students who enrich our lives every year. There is art, there are
crafts, there is design, there is drama.
5770 Why do I care and why do I want you to hear
this? I have lived in 12 countries, I have worked in 46, and visited about 20
others. And for 20 years I owned and operated a Canadian company that sewed in a
hundred countries, competing against the world. We are good. Canadians are good.
And now, out of all the cities in the world, I have chosen to work in Victoria,
to meet local socio-economic needs. But it is not just where I work. It is where
I live, where I am deeply involved in many aspects of my community. And I want
the best for Victoria, including the best media.
5771 I have seen the impact of media in many
countries, and I recognize how important strong, competent, local media is in
developing community awareness and self-confidence. We need a voice for the
diverse components of our city. We need an effective forum for our wide range of
views. And I want, for the capital city of our province, media that will reflect
Victoria's rich variety and excitement back to itself and to the rest of Canada.
I want CHUM. I want CIVI.
5772 I have lived in cities across Canada where
CHUM operates, and even just thinking in general terms, I am confident that CHUM
would bring significant benefits to Victoria, as a voice, as a mirror, as a
means of retaining advertising dollars in Canada, and as a creator of excellent
employment opportunities, especially for young people, like Jonathan and Jake.
But I also have some very specific reasons for urging you to approve CHUM's
application. What are they? Three types.
5773 There is CHUM's commitment to Victoria and to
the Island; there are CHUM's actions to date in Victoria; and there is CHUM's
5774 First, its commitment. Which applicant has
made a strong commitment to local news, to showcasing local lifelong learning
and the entrepreneurial aspects of our Island, and our local arts and culture?
It's CHUM. Which applicant has committed to coverage of values-based issues,
such as the environment, and to coverage of our diverse range of lifestyles from
a local point of view? It's CHUM.
5775 And then there are CHUM's actions. Which
applicant sought out input from knowledgeable local leaders? CHUM. Which
applicant contacted not just the leaders, but the other sectors of the
community, made a special effort to reach out to people who have to work very
hard to solve their own economic challenges? CHUM. Which application sought out
young people, not just at the university, but sought out those who have made
that enormous leap from being on the streets to now being leaders in the
community? Who said, "How can we work with you to reflect your reality back to
Victoria and Canada?" CHUM asked this.
5776 Who contacted the wide range of ethnic and
cultural communities and people at all socio-economic levels? CHUM. And who
wants to keep our advertising dollars in Canada, and will do it by focusing on
the local community?
5777 And then there is the corporate record. Which
applicant is lively, forward-looking and diverse in its own management and
performance, valuing the unique gifts of its staff? CHUM, a family of well
managed stations with an enviable record as an employer. And which applicant has
a track record right across Canada of respecting and reflecting diversity and
local communities? Which has years, actually decades, of providing excellence in
local perspectives and a truly national Canadian presence? It is
5778 Ladies and gentlemen, I want CHUM in
Victoria, because it will be good for the city. I know it will be good for the
city. I have seen it being good for other cities.
5779 I hope you approve the CIVI application. And
I want to thank you for this opportunity for me to express my
5780 Thank you.
INTERVENTION / INTERVENTION
5781 MR. YUEN: Good morning, ladies and gentlemen
of the Commission.
5782 My name is Alan Yuen. I sit on the Board of
the Chinese Consolidated Benevolence Association in Victoria for the last 15
years, holding many different positions on the Board, including the position of
Vice-President. Currently, I am the Public Relations Chairman for the
5783 The CCBA, for short, have a 115 year history
in Victoria. We have 29 different associations and societies under us. So we are
the chief spokesman for the Chinese community.
5784 We have well over 10,000 in population in
Victoria, and of course we have the Chinatown in Canada -- the Chinese
public school is still in operation. By the way, the Chinese public schools have
been operated for the last one hundred years.
5785 We always feel that the local media in
Victoria is not really covering the Chinese community well. The print media is
sometimes okay, but the radio and television station that cover it for the
multicultural societies, especially the Chinese community, are surely lacking.
They only do a brief news once in a while. We thought that we do not really have
a chance to showcase our heritage, our tradition and custom.
5786 I do a lot of Chinatown tours for different
groups over the years. Every year I do from 20 to 30 volunteer Chinatown tours.
I not only showcase Chinatown's sites and sounds, but very often we talk about
discrimination towards Chinese people in the last 140-some-odd years, since
Chinese came to Canada.
5787 Talking about how my father was born and
raised in Victoria, he was not a citizen until 1947, and also did not have
voting rights. There was no immigration allowed for Chinese people between 1923
to 1947. Subsequently, my father had to go back to China to get married. I was
born and raised in Hong Kong, before I came to Canada.
5788 CHUM visited CIVI Victoria. They came to
approach our Association for the last little while. They made a good
presentation. They talked about how they covered the local views, especially for
the multicultural society, and also programming. We really think that that is a
good idea for us. That will give us a chance to showcase more about the Chinese
community, so that people can understand our culture and tradition.
5789 We talk about the discrimination against
Chinese, because people often do not understand us. So they always feel that we
are a different class of people. Of course even though it is progressing, we
still need more understanding from the large communities, so they will get rid
of discrimination one of these days completely.
5790 I know CHUM will also bring in something good
for the business community, because I am also the founding member and past
president of the Victoria Chinese Commerce Association. Population-wise, we are
only 67 per cent of the whole population, but we have a great impact in the
business community in Victoria. We have many lawyers, accountants, architects,
doctors. There are over 52 grocery stores and over 50 Chinese restaurants, so on
and so forth. So when you talk about any business in Victoria, there are always
Chinese people involved.
5791 I will give you an example of how we can make
an impact. A couple of months ago, before Chinese New Year, the Times Colonist,
a newspaper in Victoria, approached us to try to do a promotion for Chinese New
Year. They were doing a 2-page spread for the Chinese New Year, so they asked us
to help them to promote them so they can get more advertisers on so they can
make two pages.
5792 We liked the idea, because they promised to
write up some traditions and customs about Chinese New Year and something about
the Chinese community. By the time we finished, they had a 6-page spread for
this special section for the Chinese paper. I know we have a new television like
CHUM in Victoria. Not only they can do good on the advertising front for the
Chinese business, but we can also support CHUM Television because we have lots
of resources and money to advertise.
5793 MS VOGEL: I am sorry to interrupt, but we are
past the 10 minutes. Could you conclude, please.
5794 MR. YUEN: That concludes my presentation. I
can say that the Chinese community and the business people are fully supporting
5795 Thank you very much.
5796 CHAIRPERSON OF THE COMMISSION: Thank you very
5797 MS VOGEL: Our next intervener this morning is
INTERVENTION / INTERVENTION
5798 MR. PIRES: Good morning. My name is Ben
Pires. I took the day off from work to travel from the Island to the mainland,
because I have some important things to say to you.
5799 I am supporting CHUM's Application for a
station in Victoria for many reasons. However, today I would like to focus on
just two: First, CHUM's sensitivity to community; second, CHUM's sensitivity to
5800 My appreciation of CHUM's sensitivity to
community is based on my experience as President of a Community Ratepayers'
Association, Vice-President of a high school parents' association, Member of the
Provincial Capital Commission, and Director of the Capital Health Region's
5801 Through my involvement in these
organizations, I have recognized the urgent and unquestionable need for more
extensive, intensive, proactive and more sensitively produced community
television programming in Victoria, our provincial capital. Only you, as the
regulator, can make sure we get it.
5802 While I am impressed by CHUM's plan for a
Victoria station, I was more aroused and more pleasantly surprised by its
grassroots approach. It did not zoom in on the business establishment at the
Union Club. It took a broader and more exhaustive approach. It looked at the
needs and aspirations of the community at large. It recognized we have broad
based grassroots organizations. It recognized that these organizations are open,
inclusive, unpretentious, and their bottom line is caring for and nurturing
their special communities.
5803 It recognized that these organizations go
their way quietly, with little money nor power and, hence, little media
attention. But they are the ones for making a great difference in our
5804 CHUM listened to the views, ideas and
concerns of these organizations and their members. I had the opportunity to
meet, not once but three times, with CHUM's representatives, and they listened.
This speaks voluminously about the type of programming CHUM will offer us on
5805 This is why I have come here today. I have
come here to urge you to look beyond promises made by the applicants, promises
that are easy to make. Instead, please look deeper into their approaches and
their attitude towards those they wish to serve. In brief, give the nod to the
applicant that has been sensitive to the community at large on Vancouver
5806 Now, I would like to speak on my second
point: CHUM's sensitivity to inclusion.
5807 Here, it would help to understand my
background and my experiences. I have a degree in journalism and mass
communications. I was a television reporter with the Philippines' largest
radio-television network when I left Manila in 1969 to emigrate to
5808 Though I tried very persistently, I failed to
get a job in Vancouver's station after my arrival. I was told quite bluntly that
while I had excellent credentials, the viewing public was not ready to hear or
see me on television, to hear someone with a different accent or to see a
coloured face -- "a coloured face", whatever that means, since I have yet
to see a person with a colourless face or even someone with a so-called white
face. Ah, the words we use to segregate and exclude people!
5809 What then? That was then, when the unwritten
criteria for a job in Canadian television included the hue of the pigmentation
of one's skin, the accent of one's English, and the origin of one's ethnic
ancestry. So I had to settle for the soundless, faceless print media.
5810 However, while working as a reporter for a
mid Vancouver Island newspaper, I did find a loophole to be indirectly involved
in television. I became a founding director of an association that produced
community cable TV programs in Port Alberni. This was brief, because two years
later I moved to Victoria to be the legislative reporter, first for the Canadian
Press, and then the Vancouver province.
5811 My wife and I found Victoria's distinctive
style very attractive to raising a family. So, rather than moving to Vancouver
for a career in a jaundiced media, I joined the provincial government as a
communications consultant. My long government employment was only briefly
interrupted by a two-year secondment as Communications Director for the 15th
Commonwealth Games in Victoria.
5812 Now, it so happened that during my university
days in the Philippines I had a leadership role on campus in encouraging and
understanding of cultures and in valuing cultural diversity.
5813 After settling in Victoria, I again became
involved in this area. I served for many years as an officer of an
ethno-cultural association, an ethno-culture different from my own. I served as
President of the Intercultural Association of Greater Victoria, an umbrella
organization of more than 40 ethnocultural associations, and a government funded
immigrant and refugee settlement agency.
5814 I also served on B.C's Advisory Council on
Multiculturalism, and chaired its Communication Committee.
5815 As a Council member, I travelled throughout
the province and listened to the concerns of people belonging to various
ethnocultural groups. More importantly, I heard repeatedly the concerns of those
in Victoria. I learned quickly that they did not want to be merely tolerated by
the media and others, they wanted to be included in every aspect of our Canadian
society. In any TV programming relating to their ethnocultures, they did not
want to be patronized. They wanted no part in tokenism and in
5816 They wanted their ethnocultures and the
people from their ethnocultures reflected in regular, daily TV programming, in a
natural, fair and sensitive way. They wanted a greater focus on the deep roots
of their ethnocultures and the reasons for the differences among ethnocultures
rather than an emphasis on accent, skin colour, song and dance.
5817 They did not want to be considered as partial
Canadians or hyphenated Canadians; they wanted to be regarded as full fledged
5818 The media, they said, does not call Canadians
of British ancestry as "British Canadians" or "Anglo Canadians", so why are they
referred to as "Chinese Canadians" or Indo Canadians"? They felt is there is a
gross and often deliberate misrepresentation of the term
5819 Multiculturalism is not just about or for the
ethnoculture groups that settled on this land after the people of British and
French ancestry came here. Multiculturalism is about the reality of all
Canadians -- all of us.
5820 Canada was a land of
multicultures --more than 50 aboriginal cultures -- long before the
Europeans came to this land. And the British and French ethnocultures became
part of the multiculture fabric of this land.
5821 The so-called multicultural television
stations today do little to correct the misrepresentation and myths of
multiculturalism. They perpetuate it. These so-called multicultural stations are
basically multilingual stations. They are not interested in reflecting and
promoting an understanding of all cultures. Their focus is on the needs of the
audiences for the languages and ethnocultures they serve, just like the French
and English language stations have done over the years.
5822 Through stations with a mandate for
multilingual TV programming, we are assisting new immigrants in adjusting to
their new homes. This is particularly true for the larger ethnic groups, such as
new Canadians whose mother tongue is Chinese and Punjabi. However, we do not
need more TV stations to cater more Chinese and more Punjabi language programs.
What we need more critically are our various ethnocultures reflected in a
regular programming, and an organization that is ready to lead us down this road
5823 CHUM's Application for a station in Vancouver
does just that. Its application is sensitive to the inclusion of all cultures in
5824 Much has changed since my coming to Canada in
1969, thanks to the Charter of Rights, Human Rights, employment equity and
multiculturalism policies and legislation. People like our former Lieutenant
Governor David Lam, who did much to extinguish the concept of races of people, a
construct of insecure people, with his advocacy that we all belong to one race,
the human race --
5825 MS VOGEL: Mr. Pires, I am sorry to interrupt
but we are past the 10 minutes. Could you wrap up please.
5826 MR. PIRES: Yes. I and about
5827 And corporations like CHUM, that earlier on
recognized that valuing cultural diversity is important to this great country,
and took a lead in the east in moving the media towards being sensitive to the
inclusion in all aspects of society. We still have a long way to go.
5828 Therefore I urge you to approve CHUM's
Application, because of its sensitivity to community and sensitivity to
inclusion of ethnocultural diversity in our common humanity.
5829 Thanks for listening.
5830 CHAIRPERSON OF THE COMMISSION: Thank you very
5831 MS VOGEL: I would like to call the Council of
Canadians, Victoria Chaper, Saul Arbess.
INTERVENTION / INTERVENTION
5832 CHAIRPERSON OF THE COMMISSION: Good
5833 MR. ARBESS: Good morning, Madame Chair,
Members of the Commission.
5834 The Council of Canadians is a non-partisan
public interest and advocacy organization, with over a hundred thousand members
in Canada and approximately 1,500 in Victoria region. There are a total of six
chapters on Vancouver Island. In fact, it is the highest concentration of any
region in the country.
5835 We have also had, among other campaigns, a
very strong campaign concerned with media concentration. So we have a very
definite interest in seeing a second television station in the capital
5836 We know that the state of local television
coverage in Victoria and Vancouver Island is woeful, a particularly distressing
state of affairs when you consider that Victoria is the capital, and Vancouver
Island is home to approximately 700,000 people.
5837 We feel that not only do our residents need
more and better television but, as the capital city, there is also interest in
the rest of the province about what happens here.
5838 The Council sponsors public forums and events
attracting anywhere from 250 to 1,200 people, and these deserve to be promoted
and covered on television, which at the present time they very rarely
5839 We need local television that reflects the
life, culture and issues important in our community, insightful, in-depth
coverage of local events and serious investigative reporting on environmental,
economic and social justice topics. Television must provide intelligent analysis
of areas of controversy and interactive community-based discussion on devising
solutions. We need television concerned with media literacy and development of
5840 It is our belief that, of the applicants,
CHUM most clearly reflects these goals.
5841 Our chapter applied six screens in looking at
the applications. The first of these was the promotion of democratic discussion
and participation on issues of importance to the community, what we like to call
the practice of citizenship.
5842 We know that CHUM polled the community on its
interests. We know that it is involved in media education and literacy, that it
has promised six and a half hours of non-news programming each week, that it is
interested in hearing from the grassroots, and has done so in novel forms of
television in Toronto and other cities where it has local stations, including
the Speakers' Corner.
5843 In the second screen -- this is
responsiveness to our own interest, that as the Council of Canadians -- we
believe that CHUM will provide coverage of our events, both in terms of
advertising and televising these activities, which are major events in the
5844 Three: Environmental concerns. CHUM has
indicated that it would engage a full time environmental or ecological
specialist, as I think they are calling it, to deal with issues of growth,
encroachment on green space, environmental and health issues, and
5845 Four: Economic concerns. The proposed channel
of CHUM has spoken of encouragement of entrepreneurship, promotion of local
business, community economic development, and so forth. And it will engage a
full time specialist again in the area of business and politics.
5846 Five: Reflection of our cultural diversity.
We feel that through -- we just heard from Mr. Pires, we will hear later
from the Director of the Friendship Centre, that clearly they feel, and we feel,
that this whole area will be enhanced by this Applicant.
5847 Finally, labour relations. We note that the
CHUM Application and the CHUM employees will be all union and the interns that
they will engage will be paid. Neither of these is generally true of the Craig
television system. We feel that this is a very unfortunate state of affairs,
because we have very strong support of unions within the Council, and we are in
partnership with unions.
5848 Craig made only a perfunctory attempt to
reach the Council, in fact, phoning me to ask me whether I had received the
package they had sent, which I never did receive.
5849 For every one of these screens, CHUM comes up
significantly ahead, in our view.
5850 It has long experience, indeed pioneering
experience, in making a local channel work. It has promised coverage of the rest
of the Island with a permanent Nanaimo bureau; it has promised local management
and staff will be given considerable autonomy in local programming. Again, it
commissioned the Polaris study to poll the interests of residents, and can
provide national uplinks for items of national importance, whether they be news
or cultural. They can do this through their system of national specialty
5851 We have heard that CHEK may improve now, but
we still remain very sceptical of that. We have seen a downgrade here for a
number of years. It may come to an end, but that does not obviate the need for
5852 CHUM has committed itself to, quote,
reflecting the community back to itself, end quote, and invited civil society
organizations to, quote, hold their feet to the fire, end quote, if they don't
5853 The Council, with its activist orientation,
will hold CHUM to these promises. We urge you to support this application
because, in our considered view, it is the superior one of the two.
5854 Thank you very much.
5855 CHAIRPERSON OF THE COMMISSION: Thank you very
5856 MS VOGEL: I would now like to invite the
Victoria Native Friendship Centre, Bruce Parisian, to come forward.
INTERVENTION / INTERVENTION
5857 MR. PARISIAN: Good morning, Madame Chair and
5858 My name is Bruce Parisian. I am the Executive
Director of the Victoria Native Friendship Centre in Victoria. I am here today
to support the CHUM CIV-TV station in Victoria. You will have to bear with me. I
am fighting a cold, and I barely made it today.
5859 The Victoria Native Friendship Centre
represents, in an urban setting in Victoria, approximately 10,000 urban
Aboriginal people. Of those people, there is also 9 First Nations bands locally
in and around Victoria with about 5,000 First Nations. So we have a very large
population of Aboriginal people throughout Victoria.
5860 Also, we are very interested in the concept
of local programming for aboriginal issues. I believe that this is something
that the media has really not dealt with fairly. As a matter of fact, I probably
could use a couple of stories here in terms of some recent issues that happened
5861 There was a fire not too long ago on one of
the reserves. Someone died in that house. When the news media arrived, they
focused in on this burned house and the next thing they focused on was an empty
alcohol bottle laying in the ditch. Now, this is basically stereotyping in the
community and it is a really sad fact that that is the issue that has to be
addressed. I wonder, if it was a non-aboriginal group's house that burned down,
that it would focus in on the same thing. These are very negative things that
happen in and around and particularly in our community.
5862 I also wanted to indicate that on Vancouver
Island, which CHUM would serve, we have -- I am just wondering if you are
aware that we have 15 Kwakwa Ka'wakw Nations, and we have 15 Nuu Chah Nulth
tribal nations, that make up a number of tribal groups in and around Vancouver
Island. There are also a number of Kosalish(ph) Nations in and around Victoria,
approximately 10 of those. So there is a large population of Aboriginal people
on Vancouver Island.
5863 Just to give you an idea of some of the
things I think that people are not particularly aware of, and this is something
I think that has to do with media coverage, is that Kwakwa Ka'wakw nation art
and work is world renown, and those are things I think that that kind of
information does not tend to get out. Also, that the Nuu Chah Nulth people on
the West Coast were probably the first whalers in the world, and also they were
the first people to welcome the Europeans a little over 200 years ago. I am not
sure how many people in the room are aware that Captain Cook arrived in a place
called Yuquot, which is an Indian name meaning "Where the Four Winds
5864 In that place -- I will give you a story
that I kind of find very interesting -- when Captain Cook arrived, there
was a fog and the people of that village heard a bell sounding. They went up to
that boat, because of the strange sound they had never heard before. The first
word they said to these people was "nuu chah". Of course what happened is the
Europeans thought that this was what the name of those people were. They were
called the Nuu Chah people, but what "nuu chah" means, the question was being
asked by the aboriginal people, "Are you lost?".
--- Laughter / Rires
5865 MR. PARISIAN: That is sort one of the little
known stories that have happened.
5866 Those are things that do not get out in the
community, and this is why I feel strongly about CHUM's proposal. CHUM made a
very concerted effort to approach the Aboriginal community, invited a number of
the Chiefs locally, invited myself to a number of meetings to talk about the
issues that we have.
5867 I think it is important that we get the
message out that we are part of the community, and very much a part of the
community, and we play a big role in that community. That kind of information
does not tend to get out right now, and that tends to be more of a negative
point of view that comes out in our communities.
5868 I firmly believe that if CHUM has the
opportunity to actually have a TV station in Victoria that we will, particulary
as an aboriginal community, have the ability to make our story known. And I
think that is an important part of what has to happen in Victoria.
5869 I would like to reiterate what I have said
earlier, that I strongly support CHUM's proposal and I think, like I said, it
was very important to them and I think to us, as an aboriginal community, that
they approached us and wanted our opinion, and I found that to be a very good
thing. That does not happen very often, when the media comes to us and asks for
5870 So I strongly support what CHUM is proposing
to do, and I would like to see that station there. I just hope that you consider
it and give it some thought, and support what we want in Victoria.
5871 Thank you.
5872 CHAIRPERSON OF THE COMMISSION: Thank you very
much. Certainly we appreciate that, despite your cold, you took the time to make
the trip to come and be with us today.
5873 Thank you very much for participating in our
hearing. And I hope you are cured tomorrow!
--- Laughter / Rires
5874 MS VOGEL: I would now like to call Gabrielle
Levin, from the B.C. Festival of the Arts, and Sheila Orr, Senate Council Member
and Greater Victoria Film Commission.
INTERVENTION / INTERVENTION
5875 MS LEVIN: Good morning, Members, and thank
you for the opportunity to speak. I have already been lobbied by my eminent
colleague on the left here, but I must give up some of my time. As I defer to
such a fine person, I am most willing to do that and will try to be
5876 My name is Gabrielle Levin. I am the
Executive Director of the province's leading multidisciplinary arts festival,
the B.C. Festival of the Arts. I am also a Faculty Member instructor of two film
schools in Victoria. I am on the board of five arts organizations in Victoria. I
am a parent, a consultant, a practising artist, and a concerned
5877 I am speaking, I hope, on behalf of certainly
myself and the organization and community I represent but also hopefully on
behalf of all of the artists in Victoria. There are over 127 arts organizations
in our city. There are thousands of practising artists, and we are in great need
of the exposure and support that a station such as CHUM can provide for
5878 I feel that CHUM, in their application and in
their presence, will support arts and culture in Victoria the same way that they
do in the rest of Canada.
5879 I am very aware and familiar and supportive
of CHUM's literacy in the arts. I believe that in all of their work they are
strong proponents of critical discourse in art work. I believe that they
contribute to contemporary art practice in Canada, and will do so in
5880 I am extremely impressed with the high
quality of artistic work produced by CHUM.
5881 In order for the arts to grow in Canada and
in B.C., it is necessary that the work transform the artist and the audience,
that it moves the artistic form forward, and that it contributes to culture in
the long term. I feel very strongly that CHUM will do all of this. They have a
high standard of production work. They will support local artists, from what I
read in their Application. They will support local filmmakers. They will include
all cultures, as is their policy in Toronto and the rest of Canada. They will
represent and present all artistic forms. They have a savvy and an urbanism that
I believe will be good for Victoria at this particular time. They will
contribute to the cultural industries. They are committed to Canadian talent,
and they support festivals, urban and rural art forms.
5882 I feel that CHUM is intelligent and informed
in their Application, and support having the opportunity to have them and
possibly work with them in the city of Victoria.
5883 CHUM has a long national history in Canada, a
strong reputation. They support the youth, and they support the artists of
tomorrow. And I urge you to support their Application, for the benefit of the
arts in Victoria and on Vancouver Island.
5884 Thank you.
5885 MS ORR: Good morning. I too am sporting a
cold. Bear with me if I have to break for a drink.
5886 I want to also thank you for letting me come
and talk to you this morning.
5887 I am a re-elected councillor in a
municipality called the Municipality of Sanich, which is in fact the largest
municipality on Vancouver Island. We are actually 30 per cent larger than the
City of Victoria, and we are the 9th largest in British Columbia.
5888 I presently sit on 13 boards and commissions,
and I am also Vice-President of the Victoria Regional Film Commission. I just
want to make it quite clear that I am not here representing these organizations,
although my council and the Film Commission did write a letter in support on the
principle of having a second television station on the Island.
5889 I am here, however, as a person who is
involved -- I am very involved in the community -- and someone who
likes to keep in tune and keep my hand on the pulse of the community.
5890 Approximately four years ago, I sat here in
front of you -- I recognize some of you from before. I was amongst the many
people at that time requesting that you please consider granting a licence for a
second television station on Vancouver Island. For the Members who were at that
hearing, you will perhaps remember we wheeled in a 60,000 name application, and
we were very passionate in our plea for you to please give us a second
television station. With that, I hope you will reconsider a second television
station yet again.
5891 I guess I could say things have not changed
much, except for my age and my grey hair, and my children are leaving home. But
the Island is growing. In fact things are changing, and we are seeing a lot of
people choosing to move to our Island.
5892 As a director at the Capital Regional
District I have been involved in supporting the regional growth strategy, and we
are now in the final phase of completing that strategy, and all the indicators
show that we will be taking substantial growth in the next ten years.
5893 The Island affords a lifestyle that is
attracting high tech industries and, with the onslaught of baby boomers, we will
and have become the place to retire to. And like our old reputation of being a
place for newlyweds and nearly deads, we have changed. We are attracting very
active, young, fun people, and people who want to be informed, especially on
local issues. Our Island is and has become a very exciting place to
5894 Why do I support the CHUM licence over the
Craig licence? Firstly, I want to say that both applicants have good merits, I
mean, that they have grown well in the community, but I was looking for the one
that understood what we are looking for in a television station. CHUM did that.
They came and they really listened to us. They did not impose their wants and
needs on us. They came and said: What are you looking for?
5895 They included the whole community in their
process, and I think they think a little like Island folks. They think a little
outside the box. They probably think a lot outside the box, but they
5896 I recognize that Craig is a western based
company and do an exceptional job in the Prairies, but the wants and needs of
people who live on the Island are far removed from the wants and needs of people
that live on the Prairies. Island people are a different breed. We admit to
that -- we are definitely a different breed. So it does not matter where
the company comes from; it only matters that they truly understand what we are
looking for in our community.
5897 CHUM's attitude right from the beginning has
been very inclusive. For example, our Film Commission is always looking for
funding, as most film commissions are. We never miss an opportunity to approach
people to help us, and we have been very successful.
5898 Ted Smith, who recently retired as President
and CEO of WIC Radio, is a new board member of our organization. So he went to
CHUM and gave them our pitch for funding and asked them if they were really
interested in our community and the fact that our Film Commission is so
successful that they should become a corporate sponsor. Within 48 hours of the
request, they came back and agreed to give us $50,000, with no strings attached.
That really meant no strings, unconditional, even if they did not get the
licence. And we said, "Would you mind if we went to Craig?" They said, "Sure. We
don't care. We're just here to fund the arts and to really help with
5899 What CHUM understood immediately after
listening to us was the huge economic impact that we are having in our
community, all the jobs that our industry has created, and how achievable our
future vision is, and how successful our film commission has become. And to
support us was not only a good community smart thing to do, but it was really
good business sense. If this is the way they are going to do business on the
Island, we are very impressed.
5900 I also found the scenario rather
heartwarming. Here you had a retired WIC Radio CEO in Ted Smith, here you had
me, who had been sitting here before you four years ago with Global, there you
had Mel Cooper, who was the owner of CFAX, and we were all talking to CHUM. Now,
that is community spirit, and we really felt very good about that sort of
5901 I ask that you consider granting CHUM the
licence for our community, because they truly talk to us. They listened to us,
and they worked with us, and they became our friends. They understand us and we
again, I reiterate, are a different breed on the Island, and we are proud of
that. But we feel we will be very well served by them.
5902 Thank you for taking the time to listen to
5903 CHAIRPERSON OF THE COMMISSION: Thank you very
much. We hope that you too will feel better tomorrow.
5904 Thank you for not only having taken the time,
given that cold. Thank you.
5905 We will take a break of about ten minutes,
then we will pursue with all the other interveners, then we will take a longer
break, to allow us to go later into the hearing.
--- Recess at 0925 / Suspension à 0925
--- Upon resuming at 1040 / Reprise à 1040
5906 CHAIRPERSON OF THE COMMISSION: I apologize
for having taken a long break. We had some things to deal with together back in
5907 Madame Vogel.
5908 MS VOGEL: Thank you, Madame
5909 Our next intervener today is High Road
Productions Inc., David Ostriker.
--- Pause / Pause
5910 UNIDENTIFIED SPEAKER: I believe we heard him
5911 MS VOGEL: No. We only heard from Tapestry
Films yesterday, I believe.
5912 Seeing no movement in the room, then I would
ask the Alberta Motion Picture Industries Association to come forward please.
Gerri Cook will be representing the Association.
INTERVENTION / INTERVENTION
5913 CHAIRPERSON OF THE COMMISSION: Good morning,
5914 MS COOK: Good morning, and thank you for
inviting us, Madame Chair and Members of the Commission.
5915 I have 25 years experience in the western
film industry -- writer, a fund administrator, and as an independent
producer. I have lived across Canada, all across Canada, but I work by choice in
the west, in Alberta. I want to hasten to add that some of my best friends live
--- Laughter / Rires
5916 CHAIRPERSON OF THE COMMISSION: And you have
now some in Ottawa!
5917 MS COOK: That's right. Perhaps you will be my
best friend by the time we finish, as I hope so.
5918 I am here representing the Alberta Motion
Picture Association, which we will call "AMPIA" for short. We are supporting the
Application by Craig Broadcast Systems for establishing A Channel on the
5919 For 26 years, the Alberta Motion Pictures
Industry Association has represented independent producers, but also members of
the broader industry, and that includes actors and writers and crew and unions
and all of the infrastructure that makes up an industry. That is because you
really need strong independent producers, we feel, to go out and bring in the
money and then do the productions, and it then goes out to the rest of the
infrastructure. It is pretty well driven that way. That is how we see
5920 Our mandate is to ensure the growth and
development of our indigenous industry. Central to this mandate is maintaining
that environment, a healthy environment for Alberta producers.
5921 We want to initiate, we want to develop, and
we want to produce films and programs over which we have creative control and
financial control. We found, historically, that a strong western based
broadcaster has really helped us in doing this objective.
5922 Since launching in September 1997 in Alberta
A-Channel, A-Channel established itself in Calgary and Edmonton in record time
as a truly local television station. Their programming really reflects those two
cities, we would have to say. They also made a real special effort to support
our industry. They made great promises of performance at the time, but they also
have gone over and above the call of duty.
5923 I have to say that at the time that they
applied to come into Alberta, we sort of heard about them in Manitoba and kind
of envied some of the things that the Manitoba producers were getting. I really
did not know them, but they had come forward with some great promises and we
really took a look mainly at their promises versus the other guys.
5924 The rival applicants at that time told our
industry that the Craigs would never be able to deliver on those promises. We
just decided to take the chance, to support them. It was rare, to tell you the
truth, than an association will actually pick one application over another
because if we were wrong, that could be very bad for us, right?
5925 They were successful in that application, and
they delivered everything they promised, and they had an amazingly fast
start-up. They hit the ground running. And they also converted our historic Bay
store that was about to be demolished and turned that into the A-Channel in
Edmonton, so special fondness there at Edmonton.
5926 I think some key words that I would just
throw out regarding our experience with the Craigs is: efficient, ethical,
accessible, supportive, enthusiastic, and westerners.
5927 One of the things that was significant for us
is their heavy promotion of local talent, through the Breakfast Club and other
ways, but particularly through the Breakfast Club in both cities, of local
talent and the unique diversity that is reflected in our province in both
cities. Also behind-the-scenes talent. So our own industry benefits from that as
5928 In addition, A-Channel provided a provincial
representative who lives there, who handled the fund that they set up. I cannot
overemphasize the importance of having someone in your region running these
kinds of things. She has been extremely accessible. She knows the industry. She
knew us, or she got to know us.
5929 A-Channel has also been very supportive of
our industry in other ways, through an initiative called the IDI, of which I am
the Chair. That is the Industry Development Initiative, which is a corporate
business development initiative that we have going, a professional development
initiative, for our corporations, because a lot of us are just small companies
in Alberta, small production companies.
5930 A-Channel was one of the first to come
on-board from the private sector, and loaned us Joanne basically. She has been a
tremendous support. As a result of the IDI, we are about to launch our first and
very spiffy website, which you will have to check in on, which should be
launched in March.
5931 Since their successful move to Alberta, they
have met or exceeded all their promises. They are one of our only western
Canadian broadcasters left, really, and they have a focus on western production.
They made a special contribution to our industry through the Feature Film Fund,
with critical development financing and licences, and a lot of Alberta-based and
western-based movies. It is really quite amazing how much they have accomplished
in the short time they have been there.
5932 To support what I am saying, I come bearing
gifts from AMPIA for the Commission.
5933 Over the past year, we commissioned a report
called "The Watchful Eye". The objective of it was to review Alberta based
broadcaster support for Alberta independent production linked to CRTC licences.
You have an extract, that I have brought, which covers how A-Channel has been
5934 Also included in that report, which you will
be receiving in about two weeks -- this is a final draft that you are
taking a look at -- was our assessment of the Access CLT licence, that is
also owned by Moses Znaimer, that also came in promising a number of things. I
would say that you can take a look at the report to see how both are doing. I
will just leave it at that, because I do not want to get into any kind of
comparisons. I think you have some strong applications, and I think both
applicants are very strong for Victoria.
5935 I would just like to table for you "The
Watchful Eye" from Alberta.
5936 I also come here wearing another hat. I am a
co-producing partner in Storytellers Productions. Storytellers Productions is a
majority aboriginal owned co-production company between B.C. and Alberta.
Storytellers produces children's programming that is distinctly and visually
Canadian. It is western Canadian, in fact. So far, we have two shows that we
have done, one of which has been winning awards around the world. It is
animation and live action, and the animation company is the famous Bardel
Animation, out of Vancouver.
5937 We have been animating Norvel Morso's(ph)
art, telling aboriginal stories, one of which is a Pacific Coast story, "The
Legend of Spirit Bear". So we were at first a little concerned -- I am
talking under my storyteller's hat right now -- that there was a lack of
specific support for New Children's Programming from all the
5938 We do not know, but we are afraid that in
part that might have to do with the recent CRTC decision that there is plenty of
Canadian Kids Programming available for broadcasters right now.
5939 What we would want to say is, you are
probably right, but there is not a lot of distinctly and visibly Canadian
children's programming available.
5940 That particular decision did harm
Storytellers in doing three more shows. So we were very excited about A-Channel
basically being the only one that seemed to agree that, if they got their
licence in Victoria, this would expand their strength enough that they would
open opportunities for the creation of kids programming.
5941 MS VOGEL: I am sorry to interrupt, but we are
past the ten minutes. Could you wrap up, please?
5942 MS COOK: In conclusion, we would like to
emphasize that A-Channel delivers on their promises. They have been a welcomed
friend to our industry, and they help provide a healthy, independent production
5943 That's it. Thank you.
5944 CHAIRPERSON OF THE COMMISSION: Thank you very
much for having participated in this hearing.
5945 MS VOGEL: Our next intervener is Yellow
Kitchen Productions, with Kim Hogan. Yellow Kitchen will be presenting in place
of Legacy Filmworks.
INTERVENTION / INTERVENTION
5946 CHAIRPERSON OF THE COMMISSION: That is an
unusual name for a production company!
5948 MS HOGAN: My name is Kim Hogan, and I am a
writer and producer of feature films, living here in Vancouver. I am
vice-president of a production company called Yellow Kitchen Productions, and I
am appearing in support of the Application for A Channel on the
5949 In 1997, I finally saw cameras roll on a
feature film that had taken seven years to produce. "Heart of the Son" was based
on an award-winning Canadian play called "Jenny's Story", by Betty
5950 Telefilm supported development, but turned us
down for production. Although the A-Channel stations had not started
broadcasting yet, the Drama Fund got behind our project. The Cable Production
Fund had run out of money but, based on the Drama Fund letter, we managed to
attract other investors and raised nearly 3 million dollars. That meant that 10
out of 10-point Canadian production got made.
5951 The film is shown at festivals from Victoria
to Calcutta. It has won a number of awards for the actors, the directors,
cinematographer and art director.
5952 Last month, I was honoured to attend the
Genies as the nominee for Best Adapted Screenplay. All of this was triggered by
A-Channel support. They were there for us from the beginning, they stuck with us
through the middle. Their encouragement continued with promotional support for
the theatrical release of "Heart of the Son" and sponsorship of its premiere at
the Local Heros Film Festival in Edmonton.
5953 As a B.C. producer, I would like to talk
about the proposal for A Channel on the Island, in particular the priority
program fund of 13 million dollars.
5954 This fund has been part of the application
for A-Channel from the beginning. I and other producers have had ample
opportunity to examine the plan for the Fund, ask our questions, and get
5955 It has been well thought out and designed to
be responsive to our need to create more indigenous production in this region,
as it is based on a model they have already proven works in Alberta. "Heart of
the Son" was an Alberta story that needed to be told in Alberta. A-Channel made
that possible. B.C. producers should be afforded the same opportunity to tell
their own stories in their own province.
5956 When the Craigs say the Fund will be
administered by a decision maker here in B.C., I think we can be sure that they
will follow through on that. Based on my experience and my examination of the
proposal for A Channel on the Island I believe that, as both a B.C. producer and
a Canadian storyteller, this is the best option for this region.
5957 Thank you.
5958 CHAIRPERSON OF THE COMMISSION: Thank you very
5959 MS VOGEL: For the record, Madame Chair, I
neglected to call Intrepid Theatre Company Society, with Joanne Wilson,
previously, so I would like to invite her to come up now.
INTERVENTION / INTERVENTION
5960 CHAIRPERSON OF THE COMMISSION: Good
5961 MS WILSON: Good morning. Thanks for having me
5962 My name is Joanne Wilson. I am on the board,
a volunteer board. I have spent over 15 years in arts and broadcasting
communications. I have been on the board for Canadian Actors Equity, ACTRA,
writers societies, and I am now on the board of Intrepid Theatre. So it has kind
of been my life, arts and broadcasting and communicating to people.
5963 Intrepid Theatre is a non-profit arts
organization. It is very grassroots. We produce two festivals. One is the Uno
Festival of Solo Performances. It is a juried festival of one-person
performances. The other is the Fringe. I think everybody knows what the Fringe
is. It is very popular in Canada.
5964 We are non-profit, and we are always
struggling, and having great media support is just so, so important us. So when
we found out that there could possibly be a new station coming to Victoria we
were very, very excited, and we wanted to take very seriously both the
applications and look at them seriously. We did just that.
5965 We met with both CHUM/City and we met with A
Channel on the Island, discussed things with them, and looked at their
applications as well.
5966 We decided that there are three areas that
really needed to be looked at. The first area was support of the arts in terms
of media coverage. The second area that was important was having a TV station
that would promote cultural tourism. The final part that we wanted to look at
was an independent film and TV production facilities and such in Canadam the
support of that, because that supplies work to our actors.
5967 Looking at those three things, we talked to
both groups and asked them about their local arts coverage -- a pretty
simple question. When we talked to CHUM and City and asked them if they would be
doing any kind of arts coverage, we could not get any kind of specific answer
whatsoever. We asked them if there would possibly be a 30-minute program or a
window of 15 minutes or something once a week, and we were told that that is
ghettoizing the arts.
5968 When we asked about perhaps doing an artscast
or something within the newscast, we are told that there could be no promises
made toward that, because it all depends on what is on the news and what is
being covered that day. So we did not get very satisfactory answers with CHUM
and City for Intrepid Theatre.
5969 We did go and speak with A-Channel.
Basically, the answers they gave us were the same ones that are in their
Application, that they have a 30-minute program five times a week, Monday
through Friday, that follows the 10 o'clock News, called "250", and that is
strictly an arts and entertainment program. They are also doing a program called
"Entertainment West", which runs 30 minutes once a week. That will be produced
right in Victoria.
5970 We were also really impressed with the fact
that they were going to be giving us quite a good fund for producing those
programs. I think they are promising 13 million dollars over seven years. So
they are high quality programs. So that was pretty impressive.
5971 Then we moved on and actually took some time
to phone the Fringe Festival in Edmonton, just to see what kind of coverage
A-Channel has indeed given them, because we wanted to find out if this is just
all talk or if this is true. We were told basically that they cannot beat
A-Channel off with a stick when they are doing the Fringe Festival, that they
are extremely supportive, and that they are there basically all around the
clock, supporting the Fringe Festival. So that was very exciting information for
5972 Equally as important is the fact that they
are Victoria and Vancouver Island based, and supporting our communities, the
fact that their transmitter is up Island as opposed to in Vancouver. I just
think that if you have your second transmitter being based in Vancouver it is
because you want to reach the Vancouver audience, and if you are trying to reach
the Vancouver audience, your stories are going to be about the Vancouver people.
We have had that a lot in Victoria. We do not need any more of it.
5973 A good example is right now there is a new
radio station in town that calls themselves "Vancouver's newest alternative
radio station". Because they are calling themselves "Vancouver's" newest
alternative radio station and they are Victoria based, they will not be able to
cover stuff that is in Victoria. This is the kind of stuff that we see a lot in
Victoria, and we do not need any more of it.
5974 In terms of cultural tourism, Victoria is a
really exciting place, particularly in the summer months. There are jazz
festivals and blues festivals and the harbour fest and the fringe festivals, and
that names but a few. Our surveys show that the majority of the people who come
to the Fringe do come from the Island, and that is followed by the lower
mainland and then into western Canada. If you love the Fringe and you can hop in
a car and want to go, you can. Beyond that, it does not have a big
5975 The fact that Entertainment West will be
broadcast on all of their stations in western Canada was important to us,
because it could have an impact on cultural tourism.
5976 I know that CHUM City owns "Bravo!". They did
bring in the head of "Bravo!". We met with him. This is not an application for
"Bravo!". "Bravo!" is a national specialty arts channel. They have done very
little to support Victoria festivals anyhow as it is, but they did say that if
they do get award of the licence, that they will maybe rebroadcast some of those
news stories on "Bravo!". However, that is a far cry, we felt, from the actual
30 minutes once a week Entertainment West program that would cover the arts, and
would be produced in Victoria, which is really nice for Victoria.
5977 The final point that we wanted to cover was
independent production. We thought it was really important to look at that,
because you kind of have to pity the poor actor living in Victoria or on
Vancouver Island. If they are called in for an audition over in Vancouver, they
are actors, they cannot afford to fly, and they are not taking Alojet(ph), they
are getting on the ferry. They are often taking public transportation to get to
the ferry, to get from the ferry into town to the auditions. It is a full day
for one 5-minute audition. It is horrendous for them, and it is extremely
5978 What is happening to Vancouver Island is that
the actors and the writers and the young producers and filmmakers are leaving.
They just do not see any point in staying here. I think that is really sad, and
I think it is sad for the youth of today, and I think it is sad for the arts
community. I think we need to see them stay here.
5979 So I am hoping that their very impressive
fund of 13 million, the fact that they are going to have their production office
right here in Victoria, or right over there in Victoria, is fantastic. It says
that they are committed to the community. I see that kind of commitment in that,
and I hope that will keep some of the actors living and working on Vancouver
5980 Finally, I just wanted to say that the track
record from A-Channel appears really really great. What I heard from AMPIA
sounds good. What I understand that they have done for the film industry in
Alberta has been good, the kind of support they have shown the Fringe and arts
in general. I have a friend who works in Arts Administration at Grant McEwen
College in Edmonton. She said they are just simply amazing with the kind of
support they show for the arts.
5981 So when we came down to it, how could one
support anybody but the A-Channel? They show great support for the arts
community. It is in black and white. So we are fully supporting them. We think
that they have everything to offer for Victoria and Vancouver Island.
5982 Thank you very much.
5983 CHAIRPERSON OF THE COMMISSION: Thank
5984 MS VOGEL: I would like to invite the National
Screen Institute of Canada, with Cheryl Ashton, to come forward please.
INTERVENTION / INTERVENTION
5985 CHAIRPERSON OF THE COMMISSION: Good
5986 MR. HARDY: Good morning. I am obviously not
--- Laughter / Rires
5987 MR. HARDY: I am Rob Hardy. I am the Director
of Marketing and Communications for the National Screen Institute, and I am here
today to represent Cheryl Ashton, who is our Executive Director. Cheryl really
wishes that she could be here, but unfortunately we are just days away from
launching Winnipeg's Local Heros Canadian Film Festival, and she just could not
5988 On behalf of Cheryl and the NSI, I would like
to thank you for this opportunity to take a few moments to lend our support to A
Channel on the Island.
5989 For those of you who are not familiar with
the National Screen Institute, we are the oldest of Canada's four national film
and television training organizations. With offices in both Edmonton and
Winnipeg, we are the only one that is based in western Canada.
5990 Since our inception, NSI has been committed
to developing regional writers, producers and directors, in order to promote and
develop an indigenous film and television industry that truly reflects the
5991 Because we are both western based and because
we have both grown up around the same time, there is a real parallel between NSI
and A-Channel which has, in many ways, made us natural partners. The strongest
parallel in my mind is that NSI is committed to developing local voices and
giving them the opportunity to tell local stories, and so is
5992 In Alberta, A-Channel has worked in
partnership with NSI since their launch, most notably through our Features First
Program and through Edmonton's Local Heros International Film Festival. By
investing in NSI's Features First Program, A-Channel has helped us develop new
regional scripts by first-time feature filmmakers and, more importantly, they
have helped us develop their skills and their abilities.
5993 They have gone far beyond developing those
scripts, to licensing them. Recently, A-Channel licensed Shepherd's Park, a
script developed in Alberta through the last round of Features First, and this
year their support has helped trigger a second round of the Features First
Program, which is developing the film "Polaroids of Dawn", written by Edmonton's
Marty Chan, as well as four other new scripts. But that support is just one way
in which A-Channel has helped develop and promote Alberta talents since their
5994 Through the A-Channel drama fund, the Craig
family has devoted millions of dollars towards developing and broadcasting
indigenous programming made by Albertans, reflecting Alberta perspectives. This
fund has triggered 11 movies that have been made, and another four that are
ready to go. That has employed hundreds of Albertans, keeping them at work at
home, giving people across the province and across the country a window into
their community, that never existed before.
5995 In Victoria, A Channel on the Island has
committed over 56 million dollars towards made-in-B.C. programming. Through its
priority program fund, nearly 13 million dollars will be invested by the Craigs
in developing and broadcasting drama and long form documentaries in British
Columbia and across the country. That is an incredible commitment, one that will
trigger a far greater investment by others and will provide ongoing employment
for local talent on local productions.
5996 NSI strongly supports anyone prepared to
invest in and promote regional programming, and we applaud the Priority Program
Fund and what it will mean for B.C.
5997 In Manitoba, where NSI are the newcomers,
A-Channel has given us their support from the moment we opened our doors. They
literally came to us on their own, unbidden, and asked what they could do, how
they could help us. Since then, A-Channel has gone out of their way for us. They
have created commercials and promotional opportunities for our movie camps,
which teach filmmaking to 13 to 19 year olds. They have demonstrated an
incredible commitment to Winnipeg's Local Heros Canadian Film Festival, having
donated not only dollars but countless hours of commercial production, promotion
and support to the Festival.
5998 A-Channel's support of our local exposure
amateur movie contest has helped inspire the production of 175 new short films
on video by amateur Manitoba movie makers in the past 14 months, and has
motivated many of those amateurs to consider filmmaking as a career. And on
March 4th we will award the A-Channel Audience Choice Award, the first national
prize given to a Canadian short film, at Local Heros Canadian Film Festival, a
festival dedicated to Canadian works.
5999 The fact is that they are able to give us so
much promotional support because they built these opportunities not only into
their schedule but into their character. From the beginning, A-Channel has
dedicated itself to creating opportunities for the community to see its
reflection in the station in every aspect of its programming, which allows
people to learn about their region, appreciate it, and take part. Some of these
opportunities include "The Big Breakfast" and the proposed "250" in
6000 I have gotten up quite early to be on "The
Big Breakfast" more times than I care to remember, because I know people watch
it, and it is a place that I want my stories seen. Whether I am in Edmonton or
Winnipeg -- and I spend a lot of time in both cities --"The Big
Breakfast" is the one place that I can turn to to find out what is going on in
the community that day, and really what the community cares about.
6001 "Entertainment West", which will be dedicated
to profiling Canadian talent, particularly western Canadian talent, is a program
that NSI strongly supports, because developing and broadcasting regional
Canadian works are only part of the formula. Promoting them is key as
6002 If the Alberta and Manitoba experience serve
as examples, and they do, A-Channel's commitment to Victoria and British
Columbia, both monetary and in spirit, will be incredible. They will help the
regions' film and television industry thrive and grow.
6003 So once again, on behalf of the National
Screen Institute, I strongly urge you to accept A Channel on the Island's
6004 Thank you.
6005 CHAIRPERSON OF THE COMMISSION: Thank you very
much, and give our best to Cheryl.
6006 MS VOGEL: I would like to call Victoria
Independent Film Producers Association, Greg Mason.
INTERVENTION / INTERVENTION
6007 CHAIRPERSON OF THE COMMISSION: Good morning,
6008 MR. MASON: Thank you.
6009 I welcome the opportunity to speak in regards
to the two applications for the Victoria television licence.
6010 I come here representing the Victoria
Independent Film Producers Association, which was formed a couple of years ago,
to strengthen and promote the business of independent production on southern
6011 The Association represents approximately 25
independent producers and production companies who create documentaries,
children's programs, animation, TV series, dramatic productions, and educational
programming. Our members have worked with every broadcaster in Canada, as well
as with many American and international broadcasters and agencies.
6012 Our programs have brought home Geminis, Emmy
nominations, the George Foster Peabody Award, many International Film Festival
prizes, and awards for various humanitarian, education and environmental
6013 VIFPA members' projects now in production or
in development represent millions of dollars to Vancouver Island economy. As a
case in point, in the last year there have been several 13-week television
series produced by our members. We have produced many 1-hour specials,
documentaries. We have also completed, just recently, two feature films with
independent private money, both, coincidentally, with 1.5 million dollar
6014 I think we do represent a growing regional
production centre, and we thought that when the application for a new TV licence
came to our knowledge, that we should spend some time with it, in particular
review the application details to see just what it means to us as independent
film producers, and TV producers.
6015 After very careful consideration of the
Victoria Television licence application, VIFPA feels the application for A
Channel on the Island is superior in many ways. I think it is important to note
that our decision was based on a thorough review of the applications in their
entirety, and with meetings with senior representatives of both
6016 Our members were provided with the executive
summaries from both broadcasters, and I was volunteered into the position to
review the applications in their entirety, page by page, to make sure that there
weren't things that we were missing within the executive summaries.
6017 We set up formal meetings with the
broadcaster representatives, and from there we questioned them on our opinions,
or just to check our facts, to make sure that we did indeed have things
correctly proportioned in our assessment of both applications.
6018 In our assessment, we believe it is time we
had a local television station that truly supports broadcast and invests in high
quality local productions. Our members provided unanimous approval of the
A-Channel application, and we publicly announced our support.
6019 It is a very important and significant event
for us to side with one broadcaster, as you can well imagine. As independent
producers, broadcasters are our clients. The beginning point of any marketplace
in the broadcast industry here in Canada is with the broadcaster, and from there
we have to assess, I suppose, our exposure to the situation of siding with one
broadcaster or the other.
6020 When we did look at the two applications, in
very concrete and very specific fashion, there was one that was so obviously
much better for us as independent film producers that we decided to endorse this
application. It was not a decision that was taken very lightly, and we did do it
publicly early in the game so that we could hopefully influence others in the
community to do likewise, because it was a significantly better application, in
6021 The four points that I would like to quickly
go through that we found particularly of benefit to us in regards to the
application by Craig Broadcast Systems for their A Channel in the Island were I
think obviously the production fund.
6022 Their production fund of 13 million to be
used in the production of made-in-B.C. drama and long foreign documentaries,
including theatrical releases, television movies, mini series and other dramatic
productions, is a very significant fund in regards to how we do our business. It
is an expensive project, doing any TV or film work, and if we can find new funds
for this type of work, then it is very important for us to pay attention to
6023 We feel these funds will create stability and
provide numerous opportunities to our local production industry. These funds
will develop the local talent pool and create work for hundreds of actors and
writers and artists on Vancouver Island.
6024 These funds will lead to the development of a
successful regional production centre and I think in looking at how the
production fund and how the application was structured, we came to realize that
there was not just simply a production fund in place with the application from
A-Channel, Craig Broadcast, it was part of a system or a process that they
envisioned, as a broadcaster, to be part of.
6025 So what they were saying to us, or through
the application saying to the Commission and to anyone who is involved with the
process, is that we are supporting this industry, this independent film TV
production industry, in a way that we will, yes, provide funds, but also provide
services that will help us in regards to our applications in their initial
stages, so that our proposals make sense to broadcasters, they will provide us
with assistance in a fashion such that we will get past the very important first
stage with our business.
6026 As evidence of this I think is their point,
in my list, the important point no. 2, that they will establish a local Victoria
development office. This office is incredibly important to us, for the fact that
we will have something close at hand for us to test our product and to see if we
can find its successful conclusion.
6027 A-Channel, as part of their 13 million,
has budgeted 1.1 million for the management and operation of this Victoria
development office. This development office will provide assistance to local and
other B.C. producers, access to the A-Channel independent production
6028 A Victoria based production development
office is of real benefit to our local industry. The long ferry commute to
Vancouver or the expensive flights to Toronto are serious obstacles for local
producers. Having the ears of a significant major broadcaster in Victoria to
assist us by evaluating our proposals and providing assistance to help move a
project forward is extremely beneficial.
6029 Another important part of the A-Channel
plan -- and that is how I would like to look at it -- is that they
will help us secure second windows, third windows, for the additional funds that
we need to produce our product. It is one thing for a broadcaster to support a
production with a fund, but then to carry it forward with servicing of that
project such that you will secure second and third window funding and
distribution arrangements for start up producers or producers of a smaller
nature, this is very important.
6030 Another part of this production fund that
made sense to us was the $630,000 that they plan to spend for program and script
development. This is a real benefit for many of our local producers.
6031 Point no. 3 was, as residents of Victoria I
think more than anything in the initial concept was that we wanted to look at
the program schedule itself. We found that the A Channel on the Island provides
a diverse program schedule, which will benefit the local independent production
community, but will also, I think, serve well the community that they are
broadcasting to, in Victoria and across Vancouver Island.
6032 The A-Channel schedule provides a wide range
of programs, to serve a broad audience -- daily news and information
programs, children's programming, daily arts and culture show, a regional
entertainment program, regional talk show, a weekly magazine program of various
natures, there are three of them, I believe, in their Application, and
importantly, a Canadian movie night. This program schedule will provide many
programming opportunities for our community's independent producers.
6033 This varied schedule also will help build a
skilled talent pool within A-Channel, which we will eventually benefit from as
people migrate from the A-Channel to our own production offices. I think it is
important that if you have staff at A-Channel working with a variety of
programs, to know that these people will be skilled in many styles of program
production. And then we, as producers, on the outside will benefit from those
people coming from A-Channel to us.
6034 The Canadian Movie Night was also very
important for us, for the fact that there is automatically or certainly a
window, an opportunity for us to have our products aired. As you know, a lot of
funding is triggered by the broadcast of your product. By having a Canadian
Movie Night each week, we feel that this window of opportunity is something that
will be quite significant in our production and our work towards making our
projects come together.
6035 I guess in comparison to the CHUM City
Victoria licence, in regards to the production fund, we feel the vague
inferences of funding coming through a separate Vancouver licence was neither
relevant nor reassuring to the local community. We need to -- I heard, as I
came in yesterday, that there is something new before the Commission, a late add
to the production fund to the Victoria licence if Victoria is granted and
Vancouver is not. I could respond to that later, if you wish. I certainly have
comments that way.
6036 MS VOGEL: Mr. Mason, we are past the ten
minutes. I am wondering if you could wrap up.
6037 MR. MASON: I would like to wrap with a very
brief mention that the track record that A- Channel has shown in the past, and
you have heard this already so I won't belabour the point, has also given us the
assurance that we are backing the right group, that they do back what they do
say, and will provide the opportunities that we seek from a broadcast applicant
in our area.
6038 Clearly our recommendation is for the A
Channel in the Island Application. Their commitments are specific and in
writing, and they have shown that they are true to their word.
6039 We believe the A Channel on the Island
Application is the only application which will help develop a successful
regional production industry.
6040 I would like to thank you for the opportunity
to participate in these important public hearings.
6041 CHAIRPERSON OF THE COMMISSION: Thank
6042 Commissioner Cram has a question for
6043 COMMISSIONER CRAM: Given what you have heard
about the purported amendment by CHUM of the Victoria station, has that changed
your position in any way?
6044 MR. MASON: No, it has not. I'll tell you
6045 It was quite a surprise to me to hear that
the process of an application for broadcasters could be changed at the last
minute, or that amendments could be added. I was not aware of this process being
a dynamic or fluid process, that indeed things could come together at the last
6046 It would be impossible for me to poll our
members to find their opinion in this regard to how this proposal is now to be
6047 The other part of it is, if I would hear our
members speaking, I am sure I would hear: Why was this oversight so blatantly
avoided in the -- or why was it missed before?
6048 There might be a few of us who would say that
perhaps it is not as sincere an effort as what we would hope from a
6049 I think what it plays to is the fact that we
can spend money as broadcasters to get licences, but I think what I have
hopefully expressed to you is that if you have a broadcaster who is putting a
plan together, has a vision for the industry itself, that is of utmost
importance to us. So, spending money is good but I think if we have a plan, have
a vision before us, as the A-Channel Application seems to have, and has a track
record in proving, then it is important for us to maintain our allegiance and
our endorsement for the A-Channel Application.
6050 CHAIRPERSON OF THE COMMISSION: Thank you very
6051 MS VOGEL: If there are any persons in the
room who were scheduled to speak so far in this agenda and have not yet had the
opportunity, could you please identify yourselves.
--- Pause / Pause
6052 MS VOGEL: Seeing no movement, those are the
end of our interventions for this part of the hearing.
6053 CHAIRPERSON OF THE COMMISSION: Thank
6054 We will now break, and we will come back for
the next portion of the hearing .
--- Recess at 1120 / Suspension à 1120
--- Upon resuming at 1200 / Reprise à 1200
6055 CHAIRPERSON OF THE COMMISSION: Before we go
into the next phase, we have an additional question that Commissioner Wylie will
address the applicants.
6056 COMMISSIONER WYLIE: Thank you, Madame
6057 The least that can be said about his market
is that it is in a state of flux, from a corporate perspective and from a market
6058 Not surprisingly, the incumbents, old and
new, have argued for a standstill and no licensing after this long process,
while the applicants argue that the market can easily support one or even more
new television stations.
6059 In light of the uncertain landscape, the
Commission may consider issuing a licence for a term shorter than the maximum
the Broadcasting Act allows. Therefore, we invite your comments on whether you
would accept a licence for four years or even three.
6060 I will now ask legal counsel to tell you the
procedure that we intend to follow to receive those comments.
6061 Thank you, Madame Chair.
6062 MS ASSHETON-SMITH: Thank you.
6063 The way we will be proceeding on this phase
is that we will be taking a short 10-minute break for the applicants to prepare
their answers to the question that was just posed by the Vice-Chair.
6064 Then, the applicants will appear in the same
order they appeared in Phase I, with the exception that CHUM will appear only
once, on behalf of both the Vancouver and the Victoria station, and we would
like you to answer the question for each on a stand-alone basis as well,
6065 The order of the applicants appearing in this
phase will be CHUM, Rogers, Trinity, and Craig. We are not expecting that there
will be any follow-up questions on this particular question that was just posed,
so please just come forward, provide your answer, and we will move on to the
6066 Then there will be another short break, and
we will move on to Phase IV, which is rebuttals, and it will be in the regular
order, the reverse order, that is set out in the agenda.
6067 Thank you.
6068 CHAIRPERSON OF THE COMMISSION: So we are
moving for a short 10-minute break.
--- Recess at 1205 / Suspension à 1205
--- Upon resuming at 1215 / Reprise à 1215
6069 CHAIRPERSON OF THE COMMISSION: We will be
pursuing with this phase, and many have said that they are ready to go
immediately with Phase IV, that we would not take another break. We are in your
6070 Madame la Secrétaire.
6071 MS VOGEL: I would invite CHUM to come forward
with its response to the question.
6072 MR. SHERRATT: Madame Chair, Members of the
Commission, CHUM would be prepared to accept whatever licence term you deemed
necessary or advisable for service in Vancouver, Victoria, or both.
6073 CHAIRPERSON OF THE COMMISSION: Thank
6074 MS VOGEL: Would CFMT, Rogers, come forward
6075 MR. SOLE: Madame la Présidente, Rogers also
would be prepared to accept the licence term as prescribed by the
6076 CHAIRPERSON OF THE COMMISSION: Thank
6077 MS VOGEL: Trinity Television,
6078 MR. WILLARD THIESSEN: I had too much time. I
was able to write a little bit more.
--- Laughter / Rires
6079 MR. WILLARD THIESSEN: Madame Chairperson, our
short answer, "Will we accept a licence in a period of four or even three
years?" the answer is yes.
6080 However, in view of the verbal interventions
of the applicants, all of them, and the incumbents, that licensing the Trinity
Application would not appreciably impact the market and the impact of the market
conditions because of changes in corporate structure, we would affect that at
the very least we have no intention or ability to purchase CKVU or VTV in the
near future. So it just does not --
6081 CHAIRPERSON OF THE COMMISSION: Miracles!
--- Laughter / Rires
6082 MR. WILLARD THIESSEN: We trust that a
positive decision by the CRTC towards the Trinity Application, should that be
the case, that it would result in a 7-year term.
6083 Thank you very much.
6084 CHAIRPERSON OF THE COMMISSION: Thank you. And
--- Laughter / Rires
6085 MS VOGEL: And finally, Craig Broadcast
6086 MR. CRAIG: Madame Chair, Members of the
Commission, the answer to the question is yes. And that is our final answer!
--- Laughter / Rires
6087 CHAIRPERSON OF THE COMMISSION: Thank
6088 MS VOGEL: We are ready to move on to Phase IV
at this point.
6089 Mr. Craig, it looks like you are in exactly
the right position. Would you like to call some of your friends?
6090 A reminder that there is a 10 minute limit
for the rebuttal statements.
REPLY / RÉPLIQUE
6091 MR. CRAIG: Madame Chair, Members of the
Commission, my name is Drew Craig, President, Craig Broadcast Systems Inc. To my
right is Peter Grant, our legal counsel; on my left is Jim Nicholl and Cam
6092 First of all, I want to thank all of the
interveners who wrote or appeared before you to support our application for A
Channel on the Island. We received more than 1,000 positive letters of
intervention, far more than any other applicant before you this week.
6093 I particularly want to thank the many people
from the Island who took the trouble to come over and appear before you to
support our application.
6094 We will address two matters in our reply. The
first is the claim by the incumbent stations that there is no room for a new
station. The second is the intervention from CHUM.
6095 I will start with the issues raised by the
incumbent stations. There are two points to be made. First, Mr. Reitmayer kept
saying that the CRTC should not licence new stations in a declining market. But
this market is not on the decline. After a one-year correction, it is back on a
growth path. The final TVB numbers for calendar 1999 for the Vancouver Extended
Market were released just yesterday, and are attached to our reply.
6096 The TVB numbers are actuals, not estimates,
and they demonstrate that Mr. Goldstein's estimates for calendar 1999 understate
what actually happened by almost $14 million.
6097 We have attached our own view of the overall
advertising market in the Vancouver Extended Market Area for the next six years,
compared with Mr. Goldstein's estimates. For the first four months of the
current broadcast year, the TVB figures show growth in excess of 2 per cent over
the comparable period last year. Over the next six years, we project that the
market will continue to grow at a modest rate of 2 per cent a year, based on
retail sales estimates and other factors, not the 1 per cent increase projected
by Mr. Goldstein. We think it is abundantly clear that this market can
easily support one more mainstream station.
6098 The second point to be made is that the PBIT
levels of the existing stations other than VTV continue to be in the mid 20s,
despite the introduction of VTV into the market in 1997. And VTV is
outperforming its projections by a large margin. Taken together, this is a
spectacular performance. If you take out the VTV numbers, the PBIT levels of the
existing stations continue to be over double the average PBIT for TV stations
6099 The Vancouver market continues to be
incredibly hot, and the protestations of the existing stations need to be taken
with a large grain of salt.
6100 That brings me to the CHUM
6101 To start with a small point, CHUM complained
that of the 11 films shot in Alberta with the help of the Drama Fund, only one
of them received Telefilm Canada funding. That is true, but this can hardly be
seen as a criticism. What that means is that in ten of our films, our Alberta
producers, starting with our national licence fees, were able to put their whole
financing package together without having to rely on scarce government funding.
That is a cause for celebration, not for complaint.
6102 A second point raised by CHUM was a
suggestion that our business plan was too optimistic. All I want to say on that
point is that unlike CHUM, we have actually had the experience of launching new
urban stations in the last few years. They have not. In Alberta, we are exactly
on track with the projections we originally filed with the Commission. After
five decades and three generations in Canadian television, we are not neophytes
in this business. We know what we are doing.
6103 The third point is more substantial. CHUM has
asserted that we will be dependent on them for programs, but they base this on a
review of our current Alberta schedule, not on our Island schedule, because we
purposely did not commit to any particular supplier for our acquired programs on
6104 Let me make our relationship with CHUM very
clear. When we applied for the Alberta TV licences, we were also non-specific as
to our program suppliers for acquired programming. After we got the licence, we
were approached by Mr. Asper to move all the Global-owned programs to our
station. We could have made that deal, but we elected to deal with other
suppliers, including CHUM. As an independent station, we can buy from
6105 Currently in Alberta, CHUM is a major
supplier to us, but less than 25 per cent of our current schedule there is
sublicensed from CHUM. We buy foreign and Canadian programs from every supplier
in the business, and we pay market value for all of those programs.
6106 With the addition of a Vancouver Island
outlet, we would match CHUM's buying power. We would be out there buying
programs not because of a dependent relationship, but because we think those
programs will be successful in western Canada. So we would continue to buy
programs from CHUM at market rates if they choose to sell them, and from other
suppliers if they choose not to.
6107 We were well aware, going into this
application, that CHUM might end up buying a local station in Vancouver. That is
why we were not specific about our program suppliers. If you look at our
acquisition budget, both for foreign and Canadian, you will see that is
purposely high, much higher than CHUM Victoria's budget, so we will have the
flexibility to buy quality programming, regardless of whether CHUM is a supplier
6108 Let me underline this point: The notion that
A-Channel is somehow dependent on CHUM is demonstrably false.
6109 Now CHUM has also made some disturbing
statements as to their future behaviour if we won the licence and they did not.
I will ask Mr. Grant to answer to this issue.
6110 MR. GRANT: Madame Chair, I wish to address
the statement made by CHUM that if A-Channel is licensed in the Vancouver
Extended Market and CHUM is not, they will refuse to sell any of their product
6111 In making that kind of threat, CHUM not only
contradicts itself but it also demeans itself.
6112 Here is a company that says it desperately
needs to have an outlet in Vancouver that will run its programs, and if it
doesn't get it, it may abandon the national rights marketplace entirely. Here is
a company that says it has the rights to some 18 films made in B.C., including
Hard Core Logo, that no station in the B.C. market will agree to run and, for
that reason, they must have the licence, because these films deserve to be seen
6113 And what happens if the Commission awards the
licence to the Craigs instead of to CHUM? In that case, they say, forget about
our desperate need to place our programs and films in the B.C. market. Forget
about everything we said about Hard Core Logo. If the Craigs get the licence,
they say, we'll withhold all our programs from them.
6114 As Mr. Waters so eloquently said, we're going
to "lay down the law". For the offence of winning a licence that they thought
they deserved, they'll refuse to do business with the Craigs. Presumably they
will continue to place their programs on KVOS, as they have done for so many
years, undermining the Canadian broadcasting system. In other words, they
propose that their own private interest will take precedence over the decision
of the Commission to award this licence not to them, but to an applicant the
Commission thought more deserving.
6115 I was particularly struck that this statement
came from a Toronto-based company whose senior executives seem to think that
God's earth revolves around them. Is there any wonder why Toronto has a bad name
out in the west? I am also from Toronto, and I have to say it is a display like
this that makes me understand why people in western Canada want to challenge the
notion that all decisions in broadcasting should be made in Toronto.
6116 As Drew Craig has indicated, his business
plan is not dependent on CHUM's inventory in any event. If CHUM does not get a
licence in Vancouver, I am sure a few CHUM shareholders will shed a tear, and
then, as a public company, they will move on. CHUM will need to decide: Do they
want to stay in the national rights business or not? And if they do, do they
want to deal with other players in other regions, or don't they?
6117 I don't know whether the threat by CHUM was
malicious or was simply an outburst of hurt pride. Either way, it did them no
honour and it has no place in a hearing of this kind.
6118 MR. CRAIG: Thank you, Peter.
6119 Madame Chair, this is my last opportunity to
speak about our application. We will be followed by the other applicants, each
with their own point of view.
6120 Despite the points we have made, I want to
emphasize that we bear no ill will to anyone. We are here today for the long
haul. We are prepared to work with everyone to make our Canadian broadcasting
system better. We have no doubt that others in this room will work with us
towards that same goal.
6121 That completes our formal reply. Thank
6122 There were a couple of issues I think that
came up yesterday, that we said we would also respond to in the reply phase.
There were two matters, actually, raised yesterday.
6123 The first question was whether we would
accept our licence if either the Rogers or the CHUM applications for Vancouver
were approved. The answer to that question is no.
6124 Our application for A Channel on the Island
assumed only one additional station was licensed in the Vancouver Extended
Market, namely, our own. We do not believe the market can absorb two stations
with mainstream programming at this time, particularly so soon after the launch
of VTV, and we would be unable to deliver our commitments in that
6125 The second matter related to our priority
program commitment. We indicated in our initial presentation that if the program
"250" qualified as a priority programming, we could meet an eight-hour
requirement at Year 1 of the licence.
6126 We have now confirmed that "250" would be a
priority program. Accordingly, we would be prepared to accept a condition of
licence requiring A Channel on the Island to broadcast eight hours of priority
programs between the hours of 7 and 11 p.m. each broadcast week, following the
Commission's rules and definitions of priority programming.
6127 Thank you, Madame Chair and Members of the
6128 CHAIRPERSON OF THE COMMISSION: Thank you very
6129 MS ASSHETON-SMITH: I just have one very quick
6130 I noted in your response to written
interventions and again in your oral rebuttal today there was no response to the
concerns of NBRS with respect to descriptive video services on A Channel on the
6131 Are you in a position to respond to their
6132 MR. CRAIG: We are prepared to file a written
response to that next week to the Commission.
6133 MS ASSHETON-SMITH: When do you think you
would be able to next week?
6134 MR. CRAIG: On Monday.
6135 MS ASSHETON-SMITH: Thank you.
6136 CHAIRPERSON OF THE COMMISSION: Thank you very
6137 MS VOGEL: Our next applicant in the rebuttal
phase is CHUM Limited for Victoria.
REPLY BY / RÉPLIQUE PAR
6138 MR. MILLER: Madam Chair, Members of the
Commission, I will not introduce our panel, as you have met us all
6139 We have structured our reply intervention to
address why our application for a station in Victoria, and in Vancouver,
combined or individually, best meet the local and national public interest, as
articulated in the Commission's TV Policy and in particular to key elements set
out by the Chair at the start of this proceeding, including the production and
local of regional programs, the development and promotion of local Canadian
talent, and contribution to priority programming nationally.
6140 Each of the applicants has made promises in
these areas and had interveners appear in support of those promises, but
fundamental to the Commission's examination of these promises are such matters
as track record, viability, and national and international platforms. In CHUM's
view, each of the other applicants is deficient in one or more of these
6141 In the area of local and regional programs,
Craig has claimed it will offer more locally produced programs than CIVI
Victoria, 30, they say, versus our 26. In fact, each of CHUM's applications
offer more original local programming than any other applicant. Distinctive
local service is the cornerstone of each of our applications. CIVI proposes 26
full hours of original local programming. The Craig application, 23 hours, plus
one hour of news flashes. Rogers, 18.
6142 Moreover, contrary to assertions by
interveners in support of Craig, CHUM's applications combined offer more
substantial support for B.C. based independent production than any other
applicant. In financial terms, a minimum of $19 million to B.C. based feature
film and long form documentary, of which a full $2.5 million is for script and
concept development, with a local development officer.
6143 Moreover, to be clear, Craig's commitment is
also to B.C. based production, not Island production.
6144 As discussed in questioning, in the event the
Commission licensed only CIVI Victoria, a minimum of $12 million would be spent
on B.C. independent production, of which at least 50 per cent would be regional
priority programming produced outside of Vancouver.
6145 Interventions in support of Craig by the DGC
and the Victoria Independent Film Producers Association must be considered in
context. It is the natural tendency of associations to support the broadest
possible interest of their members. So it is no surprise that the Craigs'
funding held early appeal for non-feature film producers, while our support
reflected the commitment to the under-represented area of feature
6146 It is also important to note that neither DGC
nor the Victoria Producers Association took into account the clear fact that our
two applications, while independent, contained projected revenues and
commitments based on both stations being licensed, nor that they base their
review on the scenario discussed Tuesday, of Victoria alone being
6147 In the area of development and promotion of
local Canadian talent, B.C. musicians, promoters, bar and theatre owners,
directors, producers and actors, have all attested in intervention, orally or in
writing, to the unequalled track record of CHUM in its promotion of B.C. talent
without a station here, and clearly stated the importance they place on CHUM's
capacity and commitment to build on this locally, nationally, and
6148 In the area of contribution to priority
programming nationally, while the Craigs have now attempted to match CHUM's
Victoria commitments, we are still the only applicant committed from the outset
to eight hours of priority programming on launch across all of our
6149 Key producers associations, CFTPA, and B.C.
Film, plus major producers, such as James Chavik(ph) and Larry Sugar(ph), who
you heard from yesterday, have stressed the importance of national exposure for
priority entertainment programming, and only CHUM can ensure this.
6150 In addition to the all important B.C. and
Ontario markets, comprising 50 per cent of English Canada, CHUM is able to
guarantee full national exposure, promotion and exhibition, in peak viewing
hours through, in particular, "Bravo!" and "Space". Moreover, CHUM will continue
to make its priority programming available to stations in markets not served by
CHUM, such as Craig stations in Alberta and Manitoba.
6151 Failure to get a licence in this market will
not jeopardize the Craigs' ability to maintain their existing services, because
programming will remain available to them in Manitoba and Alberta. However,
because of the dynamics and economics of the industry, the Commission has
learned that neither Global nor CHUM can realistically be prepared to
sub-licence to Craigs in B.C. in the event that they receive a
6152 In closing I want to say, particularly on
behalf of Clint and Laura and I, what a privilege it has been to work with local
community leaders and activists and the many residents on the Island that work
with us, and the privilege of appearing before you in this our first competitive
licensing hearing for the three of us.
6153 But most important, we want to thank the
hundreds of people who took the time to consult with us, meet with us, and write
letters of support, and in particular those who took the time and the trip to be
here today and yesterday. We thought they were wonderful.
6154 I would be happy to answer your question on
NBRS, if that is appropriate.
6155 MS ASSHETON-SMITH: You had put some
information already on the record, so I was not going to ask it, but if you have
something to add to what you have already stated on the
6156 MR. MILLER: Fine.
6157 CHAIRPERSON OF THE COMMISSION: Thank you very
6158 MS VOGEL: I would like to invite Trinity
Television Inc. to come forward now please.
REPLY BY / RÉPLIQUE PAR
6159 COMMISSIONER LANGFORD: You bought a lottery
ticket on the break, didn't you? You're smiling -- I can tell!
6160 MR. WILLARD THIESSEN: It's going to
--- Laughter / Rires
6161 MR. WILLARD THIESSEN: Madame Chairperson,
thank you for the opportunity to respond to the intervenors in respect to our
6162 Over the past week, we have been very pleased
to note that there have been no oral objections presented regarding our
application by any of the interveners, including the incumbent broadcasters, the
other applicants, various interested organizations in the television industry,
and members of the public at large.
6163 We note with interest that in the course of
their appearance, each of the incumbents agreed with our assessment that our
proposed service will have no measurable impact on other players in the
industry. As a religious service, we are, to quote Global, "in a different
category from the other applicants".
6164 Since some of the interveners' position seem
to have morphed somewhat since the written intervention stage, I would like to
point out for the record that we have replied fully in writing to all the
original concerns expressed by the parties.
6165 We are very encouraged and grateful for the
support and goodwill that various faith groups have extended towards us in our
6166 In addition, we are pleased to receive the
interventions and letters of support in favour of Trinity's application,
including Mr. Ibrahim on behalf of the B.C. Muslim Association, Mr. Gill on
behalf of their 35 recognized Sikh societies of British Columbia, and the most
reverend Adam Exner(ph), Archbishop of Vancouver, among others.
6167 We spoke to Mr. Ibrahim last night and he
asked me to extend his apologies to the Commission for not having been able to
attend his scheduled oral intervention. He had come several times throughout the
day, but unfortunately had other commitments at the point when he was called
upon to speak.
6168 Mr. Ibrahim, Mr. Gill and Archbishop
Exner(ph) represent and speak on behalf of many hundreds of thousands of
religious adherents in this region, and we are humbled and honoured by their
support for our proposal. We very much look forward to working with their
organizations -- and others, I might add -- to ensure that CFVT is
truly effective in serving its community.
6169 The concept expressed by the Commission in
the religious broadcasting policy has unfolded slowly indeed since 1993, but we
are convinced that its time has come for this region. In light of the consensus
that Trinity Service will not harm the industry, and given the significant
benefit to viewers of increased diversity within the Canadian broadcasting
system, it appears to us that the path is completely clear for the Commission to
grant our application.
6170 We look forward to the privilege of serving
the community in the Fraser Valley, and we say thank you very very
6171 CHAIRPERSON OF THE COMMISSION: Thank
6172 MS VOGEL: Would CFMT-TV come forward now
REPLY BY / RÉPLIQUE PAR
6173 MR. SOLE: Good afternoon.
6174 I will not reintroduce our panel either. It's
Tony Viner(ph), Mason Lo, Madeleine Seniak(ph).
6175 CHAIRPERSON OF THE COMMISSION: He looks
--- Laughter / Rires
6176 MR. SOLE: It's the length of the breaks!
--- Laughter / Rires
6177 MR. SOLE: Madame la Présidente, Members of
the Commission, both Vancouver applications and most of the interveners focused
on one over-riding theme: How best to respond to the needs of the 900,000 people
of ethnic origin who currently reside in the Lower Mainland and
6178 In that regard, the interveners raised three
principal questions with respect to our application.
6179 First: Would the approval of our application
result in concentration in the ethnic media market?
6180 For many years, Rogers Cable has operated a
special programming channel that offers non-commercial, multicultural
programming provided by the community. If you approve our application, LM-TV
will significantly increase programming choice and diversity by providing a wide
variety of professionally produced, third language television programming in a
digital broadcasting operation.
6181 There are many voices in the ethnic media in
the Lower Mainland and Victoria. Local audiences have access to many ethnic
broadcasting services in which Rogers companies hold no ownership interests,
including: Five ethnic specialty services; at least five radio stations that
provide multilingual programming; and English-language television stations that
offer some programming in third languages. In addition, there are over 35 third
6182 Therefore, we do not believe that our
application should raise concerns with respect to concentration in ethnic
6183 Second: Is the LM-TV model the right model
for this market?
6184 The other applicant has proposed an
English-language television station, with some ethnocultural on-air
personalities speaking English and a few hours of brokered third language
programming. We submit that the evidence in this proceeding does not support
6185 We filed comprehensive research with our
application that clearly shows that there is intense demand in this market for
increased access to third language programming. The Commission itself reached a
similar conclusion following its national consultation on the ethnic
6186 Our research found that demand is strong
across all demographic segments of the ethnic audience, including younger people
who speak English. We undertook a special study to examine the interest of
younger people in LM-TV. It is filed as Appendix F.
6187 The findings in our research are confirmed by
the 745 positive interventions that you received in support of LM-TV.
6188 Yesterday, you heard a number of those
interveners set out the many reasons why they believe that there is strong
public demand and an urgent need for LM-TV and the Canadian third language
programming we would provide.
6189 Even the interveners that did not support us
indicated that third language television programming is important to
6190 Interveners also noted the growing use of
satellite dishes to receive foreign third language programming and the threat
posed to the Canadian broadcasting system by KBCB, a new predominantly
multilingual U.S. border television station.
6191 For all of these reasons, we believe that
LM-TV is the right model for this market.
6192 Third: Have we proposed the right amount of
local and ethnic programming, and demonstrated our commitment to Canadian
6193 Some interveners have suggested that LM-TV
will not provide enough local programming.
6194 LM-TV will provide ethnic audiences in this
market with 38.5 hours of new local Canadian ethnic programming each week. It
will also offer five new hours of national Chinese news programming. If you
approve our application, local viewers will benefit from a significant increase
in the choice and diversity of high quality local Canadian ethnic
6195 BCTV and Fairchild implied in their
interventions that similar programming on CFMTV had small audiences. We know
that. It is our mandate. We do serve many small ethnocultural groups, some with
populations of less than 20,000.
6196 As you have heard in this proceeding, there
are few opportunities for independent producers to become involved in commercial
ethnic television broadcasting in this market. LM-TV will change that, through
the Independent British Columbia Ethnic Initiative. In this regard, we are
pleased that 11 independent ethnic producers who currently provide programming
for the cable Multicultural Channel intervened in favour of our
6197 Well over 60 independent documentary
producers intervened in support of our commitment to spend $4.5 million to
support documentary filmmaking in British Columbia. The Directors Guild
re-affirm their support also to this application.
6198 Some interveners suggested that LM-TV will
provide too little ethnic programming.
6199 In fact, LM-TV will be a full multilingual
television service. It will provide a minimum of 63 hours of programming in
third languages each week.
6200 In addition, LM-TV will provide local and
national South Asian news programming in English, to ensure that it is
accessible to all members of those ethnocultural groups. LM-TV will also provide
a variety of cross-cultural programs, that are inclusive of all ethnocultural
6201 There will be synergies from the operation of
a multilingual television station in Vancouver and one Toronto. Those synergies
will be reflected on the television screen in both cities in the national,
Chinese, and South Asian news programming that we will be able to produce. As I
stated during our appearance, we would be pleased to discuss any additional
expectations that the Commission may have as a result of those
6202 MR. LO: Fairchild suggested that LM-TV will
provide too much Chinese programming, and will harm its specialty
6203 Fairchild currently provides 120 hours weekly
of programming in Cantonese; we are proposing only 16. Fairchild's other
station, Talentvision, currently provides almost 100 hours of programming in
Mandarin; we are proposing only 4. But, as a free, over-the-air service, LM-TV
will reach those audiences that the Fairchild services do not, and grow the
Chinese language advertising market accordingly.
6204 Fairchild also suggested that Chinese viewers
are already well served and have no need for LM-TV. I do not agree, nor do other
members of the Chinese community who intervened in this proceeding.
6205 Chinese and other ethnic Canadians in
Vancouver, like their counterparts in Toronto and Montreal, want to see their
languages and their culture reflected in the mainstream of the Canadian
broadcasting system on an over-the-air multilingual television
6206 Why should we be left out?
6207 MS JAFFER: I would like to conclude our
remarks by asking you to recall the chart that was presented with the large
blank spot in the middle, for a multilingual television station.
6208 Think of that blank spot as a curtain. If you
approve our application for LM-TV, you will lift that curtain from the lives of
newcomers and other Canadians who speak third languages.
6209 When I speak to people in the ethnic
community, they tell me that they do not know their neighbour. Integration
begins when people learn about their neighbour, when they can have access to
information about Canadian society in a language that they can
6210 Third language programming does not
ghettoize -- it integrates. Without it, the curtain stays shut and the
integration process cannot begin.
6211 One of the applicants has suggested that the
Commission need only look around to see the changing face of this province. Yes,
you should look; but you should also listen. You may hear many different
6212 To meet the needs of the ethnic communities
here in British Columbia, we need both the picture and the sound. We need
television programming that speaks the languages of the people who live here. We
6213 MR. SOLE: That concludes our remarks this
afternoon, and we would be pleased to answer any questions.
6214 CHAIRPERSON OF THE COMMISSION: Thank
6215 We have no questions. Thank you very
6216 MS VOGEL: I would invite CHUM Limited, for
its application in Vancouver, to come forward now.
REPLY BY / RÉPLIQUE PAR
6217 MR. WATERS: This is the reply of CHUM
Television Vancouver to the interventions with respect to our
6218 We would like first to respond to the
interventions filed by WIC, Global and CTV.
6219 We respectfully submit that these interveners
have not put forward a credible case. It is important that the following facts
be carefully considered in assessing the impact of new television services in
6220 After careful questioning, they all
eventually confirmed that Vancouver EM television advertising revenues in 1999
were $295 million. The total market grew, on average, by 6.5 per cent annually
from 1993-1994 to 1998-1999, and that this financial information, compiled by
TVB, was correct.
6221 Contrary to the impression left by WIC, all
local Vancouver conventional broadcasters, as well as KVOS, report their
revenues to TVB.
6222 As Drew just talked about before, we now have
the current TVB data, from September to December 1999 for Vancouver, which
shows, as compared to the same period one year ago, an increase of 2.06 per cent
as compared to 1.48 per cent nationally.
6223 Any assessment of future growth must be based
on this starting point: While the 1998-1999 year did represent a reasonable
correction to a very overheated market, we project annual growth of over 2 per
cent annually from 2000-2001 to 2004-2005.
6224 The claim by these interveners that 85 per
cent of our revenues would be generated from their existing revenue base is
contrary to any reasonable analysis of the Vancouver television market. Such an
analysis confirms viewership to foreign services in Vancouver remains
substantially higher than in all but one Canadian city. Fall 1999 BBM data shows
a 27.7 per cent share of viewership in Vancouver to U.S. stations. This compares
to Toronto at 19.8 per cent, Edmonton at 20 per cent, and Calgary at 22.4 per
cent. This anomaly exists in part due to the lack of sufficient alternative
local Vancouver television services. The best solution to American signals are
even more attractive Canadian ones.
6225 Prior to the introduction of CIVT in 1997,
viewership to U.S. services represented a 33.6 share. By the fall 1999,
viewership to U.S. signals declined, to a 27.7 per cent share.
6226 It is evident, then, that a new entrant with
a distinct and alternative programming schedule and style will be able to still
further repatriate tuning at the expense of foreign services.
6227 Consistent with our audience share
projections, our Vancouver station will be able to repatriate 35 per cent of our
projected revenues directly from KVOS and other U.S. signals.
6228 On Tuesday, we heard from CTV that their
program schedule for CIVT does not really target KVOS. This bolsters our view
that there remains room in the Vancouver market for a new television service
that can directly impact foreign station audiences and revenues.
6229 Since CHUM controls the rights to many of the
programs airing on KVOS, we are uniquely positioned to repatriate KVOS'
Vancouver audience and revenue stream. None of the other applicants can claim
this unique advantage.
6230 Commissioners, the intervention filed by the
Vancouver Media Directors Council affirms that the introduction of CIVT in the
fall of 1997 had no effect on the inventory, supply/demand or cost situation in
the market. This situation remains today, after advertiser demand cannot be
reasonably accommodated by the existing local stations.
6231 The unusually tight advertising inventory
available on Vancouver stations has in part forced advertisers to direct an
increased portion of their advertising dollars to network, a situation that
would be addressed with the introduction of new television services.
6232 MR. ZNAIMER: We would like now to turn to the
intervention of the Directors Guild.
6233 The Guild also suggested that approval of our
Vancouver Application would unduly impact existing stations. The analysis just
provided by Mr. Waters demonstrates that the market remains healthy and can
reasonably accommodate our proposal.
6234 The Guild's misunderstanding of the market
was further demonstrated when they implied that a Rogers application would not
compete with existing Vancouver stations. This is obviously incorrect, since 85
per cent of LM-TV's proposed revenues would be generated from U.S. programming,
and LM-TV's proposed Year 1 revenues are comparable to those projected for our
6235 Lastly, the Guild suggested that CHUM has
failed to address why we believe an exception to the Commission's policy on
ownership of two stations in a single market is warranted. This also is not
6236 In our written reply to interventions, we
demonstrated that the licensing of our proposals best meets both the local and
the national interest. Moreover, approval of these applications will not result
in any loss of diversity in the broadcasting system. To the contrary. It will
assure that CHUM and its alternative model of original Canadian television
6237 If our applications are approved, Vancouver
and Island residents will still receive an abundant diversity of information and
entertainment from numerous television, radio, print, Internet and other sources
from a diverse group of owners.
6238 On the plus side, approval of both our
applications would maximize benefits, in the form of a combined 56.5 hours of
local programming weekly, 8 hours per week of priority programming in peak time
across the entire CHUM terrestrial television group, 15 hours per week of
ethnic programming within an atmosphere of cultural diversity, which is the
guiding theme for everything that we do, over 30 million per year in support of
Canadian feature film, and Canada's first prime time serial soap
6239 All this can be reasonably accommodated in
the still dynamic and growing Vancouver market without unduly impacting on
incumbents, who are all large multi-station groups.
6240 While we believe that approval of our
applications warrants an exception to the current dual ownership policy, we have
been clear that each application stands on its own merits, and that approval of
one is not conditional upon approval of the other.
6241 MR. SHERRATT: Madame Chair, Members of the
Commission, your television policy will be your legacy to the Canadian system.
It sets out clearly and succinctly a positive direction for Canadian television
as we begin the new century.
6242 We sincerely believe our proposal to you
responds best to that policy, by providing meaningful, responsive, culturally
diverse, and meaningful programming for the two communities that are Vancouver,
by making a major contribution to the production and delivery of priority
programming, and by addressing the urgent need for support and development of
6243 We want to thank you, your colleagues and
your staff, for you commitment to this process, for your patience, and the fair,
the very fair way in which you have carried out the examination of all
applicants. It is proof that the Canadian system is alive, and well, and it
works in the public interest.
6244 Thank you.
6245 CHAIRPERSON OF THE COMMISSION: Thank you very
6246 Commissioner Cram has a question.
6247 COMMISSIONER CRAM: It's the TVB
6248 Mr. Waters, you said 295 million in year
ending December 1999. The argumentation given us by Craig refers to
6249 When you use the 295, do you net out the
gross-up for KVOS? I took tax law, and if I recollect what Mr. Goldstein said,
the TVB data includes a gross-up, the equivalent of a tax gross-up, for KVOS. So
if what they said -- and I cannot remember, it's either 18 or 16 million
they said KVOS earned, you would then add either 9 million or 8 million to the
6250 Given that, do you then take off 9 or 8
million from that 295 to get a real number?
6251 MR. SHERRATT: That is not where our numbers
came from. Our numbers came from the gross-up of everything.
6252 The one thing Mr. Goldstein failed to mention
is that it does not really matter whether the money goes to the station in
Bellingham or to the federal government. It costs the advertiser the same amount
of money. So those are the dollars that have been directed against advertising
in this community.
6253 So whether you gross them up -- the only
fair to do it is gross them up, because that is what it costs the advertiser to
6254 COMMISSIONER CRAM: But that is what I
understood they did.
6255 MR. SHERRATT: Well, that's what they do. He
was trying to demean the figure by saying it really is not that much. Well, it
really is. But the figure that we get is 295, and I think our people here, they
are better at it than I am.
6256 COMMISSIONER CRAM: Is that TVB data? That is
what I want to know.
6257 MR. HAMILTON: It is TVB data, and TVB
do -- actually TVB don't, but the people that submit do gross up the
figure. So the figure is a grossed up figure, which was --
6258 COMMISSIONER CRAM: So it includes the
hypothetical gross-up for -- and it would have been the gross-up for that
it is non tax payable.
6259 MR. HAMILTON: Correct.
6260 COMMISSIONER CRAM: Okay.
6261 So I would be correct, then, in taking the
numbers down about another 8 million or 9 million, depending on KVOS'
6262 MR. JANSEN: Commissioner, maybe I can add a
6263 There is a reason why TVB grosses the numbers
up, because TVB correctly believes that these grossed up amounts should be
included. These are dollars that are spent against the market.
6264 One other point, Commissioner. The 295
million figure applies to broadcast year 1999. The figure of slightly above 300
million applies to broadcast year 2000.
6265 COMMISSIONER CRAM: I always get the years
mixed up. Thank you.
6266 So it does include the gross-up, and
therefore the percentage should really be down in increase.
6267 MR. SHERRATT: No. I think it is important,
and we have not really explained this as well as we might, that gross-up figure
is the real dollars that have been allocated for advertising in this market, and
that Canadian advertisers have paid the hundred cent dollar, not the fifty cent
dollar that you would take if you did not gross it up.
6268 COMMISSIONER CRAM: Correct. I understand.
6269 CHAIRPERSON OF THE COMMISSION: Thank
6270 MS VOGEL: That concludes the fourth
6271 CHAIRPERSON OF THE COMMISSION: So, to all the
applicants and interveners, I thank you all, and sorry for the longer breaks we
took this morning. That was really to support the proceeding.
6272 We will now break for lunch, and come back
with the second part of our hearing, which deals with the MDS
6273 We will come back at 2:30.
--- Luncheon recess at 1305 / Suspension à 1305
--- Upon resuming at 1430 / Reprise à 1430
6274 CHAIRPERSON OF THE COMMISSION: Madam
6275 MS VOGEL: Thank you, Madam
6276 Phase I, which we are about to embark on, is
where the applicants make their presentation to the Commission. Phase II is
where the applicants intervene against each other. In Phase III we will hear the
other intervenors. Phase IV would be where the applicants come back in reverse
order from Phase I to rebut other interventions.
6277 For Phase I there is a maximum of 20 minutes
to make your presentation. I hate gonging people, okay --
6278 CHAIRPERSON OF THE COMMISSION: She is good at
--- Laughter / Rires
6279 MS VOGEL: Right.
6280 CHAIRPERSON OF THE COMMISSION: And courteous
6281 MS VOGEL: So, with your leave,
Madam Chairperson, I will read in the first item for the record.
6282 CHAIRPERSON OF THE COMMISSION:
6283 MS VOGEL: This application is by Craig
Broadcasting Systems Inc. Craig is applying for a broadcasting licence for a
radio communication distribution undertaking to serve Victoria, Vancouver,
Abbotsford, Chilliwack, Penticton, Kelowna and Vernon, British
6284 The applicant proposes to transmit services
using a digital multipoint distribution system, or MDS.
6285 Please proceed whenever you are ready.
PRESENTATION / PRÉSENTATION
6286 MR. CRAIG: Good afternoon, Madam Chair and
Members of the Commission. I am Boyd Craig, President and CEO of
6287 Before we start our presentation, let me
introduce our team.
6288 Starting on my left, in the first row, we
have: Elan Gillespie, Principal Consultant, PricewaterhouseCoopers; beside me is
Tim Kist, VP and General Manager of SkyCable; on my right is Sandi McDonald,
Executive VP Business Development, Craig Broadcast Systems and Paul East, VP
6289 In the second row are: Debra McLaughlin,
Senior Associate, PwC; Glenn Stuart, Principal Consultant, PwC; Hank Intven, our
legal counsel from McCarthy Tétrault; and, Gord Henke, our technical consultant
from DEM Allen & Associates.
6290 In the audience we have Kevin Hooke of
Wellington West Capital who represents our minority investors.
6291 We also have some of the members of the
SkyCable Pacific Community Advisory Board here today. They include: John
Donnolly, President of Smooth Productions, who is a well-known local producer
and content creator; Maria Antidormi, with BCIT, is responsible for distance
education; Dr. Ronald Burnett, President of the Emily Carr Institute of Art
& Design; and, Bohdan Zajcew, General Manager of the Knowledge
6292 Sandi McDonald will describe the role of our
Community Advisory Board a little later.
6293 Now let me begin our presentation.
6294 Earlier this week, you heard from my brother
Drew Craig and his team about their aspirations for conventional television. As
he noted, our family has been involved in radio and television in western Canada
for three generations.
6295 But I am here to present a different team, a
different technology, and a different company, SkyCable Pacific.
6296 We are applying today for a digital MDS
licence to serve communities in British Columbia with multichannel television
that will provide an attractive alternative to cable and direct-to-home
6297 We come to this application with a unique
background. Unique because we were the pioneers in introducing digital MDS
technology to the world, and unique because our roots are in western Canada and
that is where we want to expand.
6298 We were licensed to offer digital MDS in
Manitoba only four years ago. Since then, you have licensed MDS systems to serve
communities in Saskatchewan, Ontario and Quebec.
6299 We at SkyCable strongly believe in MDS. We
believe it is a technology that should be made available to consumers in other
markets, and we initiated the call for licences in British Columbia with an
application filed over a year ago.
6300 Our proposal is well financed. The equity in
SkyCable Pacific will be owned by investors from western canada. 80 per cent of
the equity will be held by our family holding company, and 20 per cent by other
6301 Now, before we get into the details of our
application, let me turn to a brief audiovisual introduction of Craig and
SkyCable's role in introducing new technologies to western Canadians for three
--- Audiovisual clip / Clip audiovisuel
6302 MR. CRAIG: I hope that presentation gave you
a sense that we are certainly not standing still. We have always led in the
introduction of new technologies, and our MDS service continues that
6303 I will be honest with you and tell you that
it was tough being the pioneer in MDS. We faced the inevitable challenges of the
first provider of a new service. We were out there offering the service while
the technology was still in development, and before a supply industry had
6304 But the good news is we met all the
challenges and came out the better for it. We solved the technical problems one
at a time, and, in the process, became one of the most experienced digital MDS
operators in the world. Today, our system runs like a charm and we have learned
how to market and provide it effectively. Our customers are very satisfied with
the service and we are looking forward to rolling it into new
6305 To say a little more about our technology, I
would like to turn to Paul East, SkyCable's Vice President for
6306 MR. EAST: Thank you, Boyd.
6307 Good afternoon, Madam Chair and Members of
6308 I realize that some of you may not be that
familiar with digital MDS, so I will start with a brief technical
6309 Wireless technology is hot around the world
today, but there is not a lot that is really new about radio waves. Digital MDS
is simply an adaptation of radio technology that allows us to broadcast high
quality digital signlas across a wide area on a very cost-effective
6310 As digital compression technology evolved, we
have seen compression ratios increase from 4:1 to 8:1 and soon on to 10:1 video
channels per carrier. We have introduced two-way transmission capability for
Internet access. This high capacity and interactive capability, combined with
the absence of any requirement to build extensive cable networks to every home,
makes MDS a low cost and effective technical alternative to cable delivery
6311 We are very excited about the newer MDS
technology, and I thought you might be interested in seeing what some of it
looks like. Arranged here on our table are some of the items we use to offer MDS
service in Manitoba.
6312 This is a third generation Sagem DVB set top
box. It is a leading contender for the system we will deploy in B.C. It supports
an enhanced interactive program guide, parental lockout, universal remote
control and a host of other consumer-friendly features.
6313 I have two of the antennas that we mount on
customer premises. This round one right here is for locations that are close to
a transmission tower. It is a lower gain antenna. This is called a planar array
antenna. It is a higher gain antenna. This is also the one we use for
bidirectional wireless Internet service.
6314 Finally, this is one of our Phasecomm
SpeedDemon brand two-way wireless high speed Internet modems. Faster than DSL
and at least as fast as the best cable modems, it is a great product which will
allow us to bring high speed access to both rural areas, and to compete
toe-to-toe with the telco and cable companies in urban areas.
6315 As a digital MDS pioneer, SkyCable had the
unenviable task of debugging the first generation MDS technology. On the
positive side, that experience made us very familiar with the practicalities of
MDS band microwave technology.
6316 We will bring that experience to British
Columbia. We are looking forward to building a state-of-the-art system that is a
true alternative in technology, in infrastructure, in service, and low cost to
6317 We plan to roll out our B.C. system in two
6318 Stage one, within 12 months of receiving the
licence we will serve: the lower mainland, including Abbotsford and Chilliwack;
Victoria and the Saanich Peninsula; and, the Okanagan, including Vernon, Kelowna
6319 Stage two, within 24 to 30 months of the
licence we will add Kamloops and Hope.
6320 I would now like to turn to Elan Gillespie
who will discuss the consumer research on our B.C. MDS service.
6321 MS GILLESPIE: Thank you, Paul.
6322 Madam Chair, a great deal of consumer
research was done in preparation for this hearing. I will briefly review the key
conclusions of the research with the Commission by both applicants.
6323 First, there is strong overall demand for MDS
service offerings. PwC conducted two research surveys for SkyCable in April 1998
and in the fall of 1999. Over 60 per cent of respondents in both surveys
indicated that they were interested in the MDS service.
6324 Second, there are consistent levels of
dissatisfaction with current service providers. The two PwC surveys report that
43 to 44 per cent of respondents were dissatisfied. This indicates a real
opportunity for conversion of existing subscribers to MDS.
6325 Third, there is no doubt that price is a key
factor in making MDS an attractive alternative to consumers. The willingness to
switch to MDS from current providers is clearly related to consumer
6326 For example, in the 1999 PwC survey, 41 per
cent indicated a willingness to switch service providers with a cost savings of
10 per cent.
6327 The consumer research identified a
particularly high-price sensitivity to installation fees. For example, when
consumers were asked if they would switch to MDS at an installation fee of $125,
only 12 per cent would consider it. At that level of installation fee, only 3
per cent said they would definitely switch.
6328 This evidence strongly suggests that
customers will switch to MDS service, but only if the price is right.
6329 Based on these results of the market
research, it is clear that a competitively priced MDS service that offers choice
for a reasonable price will provide a strong value proposition for customers.
The opportunity to convert existing cable and DTH subscribers to MDS can be
improved tremendously by removing barriers such as high installation
6330 This market research was taken to heart in
developing the SkyCable service offering.
6331 SkyCable's proposed service will clearly be
price competitive with other offerings in the B.C. market.
6332 The SkyCable service provides customers with
a wide choice of TV and audio channels, with both basic and discretionary
packages priced below those of cable offerings.
6333 Finally, unlike the competition, SkyCable
service will have no installation fees. This eliminates what consumers have
clearly told us is a major barrier to switching from cable.
6334 I will now turn to Tim Kist who will talk
about marketing the SkyCable service.
6335 MR. KIST: Thank you, Elan.
6336 I would like to talk with you about the
advantages of the SkyCable consumer model in a competitive market.
6337 Our experience in Manitoba, both rural and
urban, can be characterized as a learning experience to build future
6338 When MDS was first launched, there was a DTH
in rural areas and SkyCable enjoyed good success in providing an alternative to
off-air TV channels.
6339 Once DTH launched, however, it provided
strong competition, offering high capacity and a lower price. At that point, we
really started to compete. We increased the focus on our local presence, local
channels and customer service to remain competitive.
6340 More important, we learned that we had to
compete on price. We eliminated all installation charges and refunded over a
million dollars in customer equipment deposits.
6341 In Winnipeg, we learned how to compete in
urban markets. When we first launched, our service was more expensive than
cable, both in installation fees and monthly fees. Although people were
intrigued and were looking for an alternative to cable, we were losing the
battle based on price.
6342 So we had to reinvent the way we packaged our
service and how we priced it. We went back to the basics.
6343 We recognized that our 100 per cent digital
product that featured all local broadcasters, coupled with the best picture
quality available, gave us the right product for the market.
6344 But, we had to improve our packaging and,
most important, our price to meet the challenges of a very competitive market.
We realized that since most of the services offered were the same as cable or
DTH, we had to differentiate on price and customer service.
6345 Next, we learned how to package our services
to make them more attractive to customers. Our experience told us that customers
want theme packages of channels, not necessarily pick and pay. In Manitoba
today, 96 per cent of our customers buy at least one of our theme packs, only 4
per cent take basic service alone.
6346 We also developed and introduced our
interactive Internet access service, providing a very attractive addition to our
6347 Finally, we learned that we had to provide
better service to attract and retain our customers. We really focused on this
area, and I am pleased to report that our efforts have been highly
6348 Just this week, we received the results of
our first Customer Satisfaction Survey, which was developed using the same
methodology as that employed by the cable industry. The results were
6349 Let me give you a few highlights.
6350 First, we received an overall customer
quality of service satisfaction rating of 81 per cent.
6351 Our quality of TV reception rating was 84 per
cent, providing solid evidence that we have met all the technical challenges of
introducing MDS, and developed a high quality alternative to cable and
6352 Finally, and we are particularly proud of
this number, our customer satisfaction rating for the attitude of our company
staff was 90 per cent.
6353 All in all, these results show us that we are
now positioned to be a very formidable competitor for cable and DTH
6354 The lessons we learned in Manitoba have
shaped the pricing and packaging of our B.C. application. As Elan indicated, the
research clearly told us that price, coupled with quality and service, are the
key success factors for a new entrant.
6355 We have taken a straightforward marketing
approach -- we have identified what customers are looking for -- a
high quality lineup of TV services. Just as important, we have made it very
attractive to customers to switch to MDS, saving them money and charging them no
high switching costs.
6356 I will now turn to Sandi McDonald.
6357 MS MCDONALD: Thanks, Tim.
6358 I would like to take a few minutes to
describe our Community Access program. We referred to it in our application as
our Open Access Network for Community-based Development and Learning. We will
probably just call it SkyChannel.
6359 Let me describe some of its key
6360 First, you may have noticed the split-screen
design of the channel in our video presentation. It's part of a hybrid design
which combines the reach of a broadcast channel with the interactivity of the
Internet. As an example, students enrolled in a distance education program will
be able to watch classes on our broadcast channel and use the Internet to submit
assignments and carry out group work without having to leave their home or
6361 Second, we understand that if we enable
communities to express themselves effectively we will have a competitive edge.
We plan to distinguish ourselves as an access and content provider for New Media
and lifelong learning. B.C. has the highest percentage of educated people of any
province in Canada. There is a large demand for lifelong learning experiences.
B.C. also has globally recognized distance education programs. We will provide a
new medium for that demand, talent and energy.
6362 Third, and most important, our delivery plan
is based on partnerships, with educators and school boards, with content
developers and new media creators, with ethnic and community associations and
6363 We have prepared a SkyChannel Concept Paper,
in consultation with B.C. community groups, aimed at developing new kinds of
interactive new media programming, combining the strengths of TV and the
6364 Madam Chair, you will recall that Boyd Craig
introduced some of the members of the SkyCable Community Advisory Board at the
beginning of our presentation. We are pleased that they are here to support us.
The board will also include representatives of local building associations who,
for example, will help us develop a customized community channel for in-building
residents, as well as representatives from municipal libraries, and other
6365 The Sky Channel Advisory Board will have
several roles and responsibilities:
6366 It will work with us and the communities we
serve to develop a governance framework that reinforces the principles of the
Cable Television Community Channel Standards.
6367 It will determine, and in some cases develop,
the programming content that will be carried on the Access Network.
6368 It will provide resources, training, and in
some cases facilities.
6369 It will direct and support the efforts of our
program coordinator and volunteers.
6370 And it will promote and champion the
objectives of the access network and its services.
6371 MR. CRAIG: Thank you, Sandi.
6372 Madam Chair, we believe that our experience
as pioneers in the introduction of MDS service in Western Canada has enabled us
to develop a very attractive and competitive service alternative for B.C.
6373 We are convinced we have the right formula
for success. Several features of our service will clinch this:
6374 First, we will provide a very competitive
package of channels, at digital quality, and, most importantly, at rates lower
6375 Second, unlike our competitors, we will
charge no installation fees or raise other barriers to switching from
6376 Third, we recognize the strength of consumer
concerns in B.C. We will maintain our high customer satisfaction ratings to
attract, and keep, customers now served by cable.
6377 Thank you, Madam Chair.
6378 We would be pleased to answer your
6379 CHAIRPERSON OF THE COMMISSION: Thank you very
6380 It really seems that you had a copy of my
questions because already in your presentation you started to answer some of the
questions that I had for you. But, if you will allow me, I will go
6381 What I would like to do with you is
understand better what you have learned from your experience and kind of dig a
bit into what you are presenting here on page 8 on the lessons learned, in a
sense, how you have learned it and how it is directing your approach here in
6382 Secondly, I will kind of go, in some detail,
into your business plan to understand the feasibility of it and also your
ambition about really reaching subscribers and really making competition a
reality here in B.C.
6383 Thirdly, definitely the open-access network.
I will want to better understand the initiatives you have there and where you
are at and how you see it. And, frankly, the split screen. I really didn't
capture it to the point that I know what it is.
--- Laughter / Rires
6384 CHAIRPERSON OF THE COMMISSION: I apologize. I
will not question the technological matters. I really trust your expertise there
and the people who staff -- what we are really interested in is much more
the interface with the subscriber and the prices and the advertising and the
marketing tools. So I apologize.
6385 But thank you. I really see that it is
--- Laughter / Rires
6386 CHAIRPERSON OF THE COMMISSION: Does it come
in other colours?
--- Laughter / Rires
6387 CHAIRPERSON OF THE COMMISSION:
6388 More seriously, let's go back to the lessons
learned. Although we know that you were a pioneer in the domain so it was
technological mastering to be done, there were some marketing ones. Can you go
back with us, kind of slowly, step by step, to the lessons learned and what you
are really bringing into the B.C. market as expertise about that?
6389 MR. CRAIG: In a lot of ways to go back and
describe the technology as we rolled it out three and a half years ago is
painful, because at times it wasn't a pleasant experience and there were many,
many sleepless nights and many, many hours spent by many members of our staff
and management rolling out what, at the time, was the first digital wireless
network in the world. There had been other digital systems planned but ours was
a very expansive system that covered an area and today covers an area from the
Saskatchewan border all the way east of Winnipeg about 20 miles. I think that
the coverage area is somewhere in the order of 70,000 square miles, so it is a
very large area to manage.
6390 We started with a company -- if you
recall, I think we may have talked about this at another hearing -- based
out of Winnipeg actually. It ended up that Nortel came in and bought the company
for a large amount of money. Perhaps we should have been buying shares instead
of equipment from that company.
--- Laughter / Rires
6391 MR. CRAIG: But part of the problem was they
were great engineers and they had some really, really good ideas but some really
poor manufacturing processes. The quality control of some of the product that we
were taking delivery of was certainly substandard. But really, at that point in
time, and I know it doesn't seem that long ago, believe it or not, there was not
a large supply community out there. In fact, we didn't run into anybody else
that promised us that they could build and deliver the equipment that BNI built
and delivered to us.
6392 It was a turnkey operation. I guess the other
lesson we learned was that it was also proprietary and then when parts of it
didn't work we were kind of locked into the whole system.
6393 We started in the late summer and turned the
system on. I must admit that the picture quality was fantastic. At that point
there had been a lot of media coverage about the fact that we had finally
received the licence, and people actually in the rural areas had been waiting
for cable for 30 years. The demand was certainly there and we rose to the
occasion and signed up a lot of homes very quickly. Perhaps in retrospect we
shouldn't have done that because you remember the day that we signed on and how
excited everybody was, and about a week later the thing went off the
6394 The problem was that the design at that point
had the transmitters up on top of our towers. Our towers are relatively high
towers. Some of them are as high as 1,400 feet. The transmitters were mounted at
the very top of these towers and they were susceptible to all kinds of heat and
fluctuations in temperature. Plus a television tower shakes constantly. I
suppose that the engineers that designed this didn't fully understand that. For
whatever reason, the transmitters failed and we never really did get a good
explanation as to what was happening.
6395 But I can tell you that over the course of
about a year and a half we replaced over 50 transmitters on these towers and
spent over a million on tower rigging crews. They actually had to come from
Winnipeg when we had a failure, rig the tower, climb the tower -- and
climbing a 1,400 foot tower takes about two and a half to three hours --
and then haul these transmitters down and haul the new ones up. Part of the
problem is now you are relying on a tower rigger to do a transmitter
installation. They are maybe great at what they do, but they are certainly not
engineers. So you have a transmitter on top of a tower 1,400 feet in the air
that your engineers can never really touch.
6396 There was a reason for why they had chose to
put these transmitters at the top of the towers. Their reason was that it was
believed at that time that if you had put the transmitter on the ground where we
ultimately put them, that by the time the signal from the transmitter got to the
top of the tower there was too much line loss and there would be no signal
actually coming out of the antenna on top of the tower and your contours would
be very small. Of course we were trying to achieve maximum coverage.
6397 At any rate, we solved the problem eventually
by finding some transmitters that we were able to put on the ground and run some
very large wave guide up our towers. We didn't do that until -- about
January of 1998, was when we ordered our first ground-mounted transmitter. The
reason for that is that even at that time it was questionable whether or not
anybody could deliver a digital transmitter that would actually work on the
ground. They are very high-powered transmitters, but they have
6398 We made the decision at that point in time to
change the entire transmission system at our own expense, and we decided that if
we didn't do that we weren't going to have a business left. We also thought that
we would save disagreements with BNI over some of their invoicing until another
6399 The second problem that we encountered was
the set top box itself. Again, there was at the time very few suppliers of
digital set top boxes. These boxes were manufactured in Winnipeg and we went
through about four generations of digital set top boxes in about a period of 18
months. The problem was that we would order approximately 1,000 boxes at a time
and the truck would be driving down from Winnipeg to Brandon where SkyCable was
based at that point in time, and we would be sending another truck with about
500 broken down boxes going the other way for repair.
6400 All this was very frustrating. It was at a
time when the phone was ringing off the hook. People were wanting the service.
We were trying to set up a business, a brand new business and engineer it at the
same time. So it was a very, very trying time.
6401 We had some problems early on with the
compression equipment, but for the most part the compression equipment was
manufactured by Motorola and it was actually -- the head ends actually
turned out to be quite a good product but they were not part of the BNI
6402 What we have done is we have replaced all the
transmitters and we are now using a DVB set top box. It is an open standard and
we are able to buy boxes now from any number of manufacturers that will work on
our Manitoba system. They work and they work consistently. They have various
features like parental lockout and electronic program guide.
6403 It was a very frustrating period but we
certainly learned a lot during that time.
6404 I think that the other issue at the time was
our ability to trunk and bag, using the same frequencies, reusing the 2.5
frequencies that we have and trunking the signal actually from one tower to the
next. That technology works very, very well. It took a while for us to
understand it, but without it we wouldn't have been able to build the network
that we built. We believe now that we are the experts in installing this in-van
trunking technique and we believe that it is a very efficient effective way to
haul signal around.
6405 That was really some of the stuff we were
going through on the technical front.
6406 There were other operational challenges that
we were facing at the time as well. Remember that we were inventing a new
business. This is somewhat different from the cable business and it is also
somewhat different from the satellite business, so we really had no model from
which to copy. Of course there was not a pool of seasoned managers around that
knew how to do this because nobody had done it before.
6407 Part of the difference, and I think a major
difference in how you operate a wireless cable plan as compared to a wireline
cable plan, is the fact that we would -- the instant you turn on a
transmitter you get huge coverage. Obviously, we had phone calls coming in from
all over a certain coverage area. In fact, they were coming in from all over the
province. We were delighted to get the calls and were delighted to take the
orders, but found that it took us sometimes three hours to drive from our office
in Brandon to the customer's premise. If you actually drive across our entire
coverage area at 60 miles an hour it takes you three and a half hours to get
from one end of it to the other.
6408 We had to learn how to manage this and we had
to learn how to hire installers and train installers and give installers the
proper safety training because it is a line-of-sight technology; it is not a
simple installation at the house. Sometimes we can do an install in an hour,
sometimes it takes us half a day, and sometimes we can't do it all, which is
another problem. It is a frustrating problem for a lot of people.
6409 Because it is line-of-sight, we can't really
tell for sure on the telephone whether or not we can actually receive signal at
that household. We now have developed techniques where our CSR is going to
actually query the customers to find out where they are located and whether or
not there are tall trees around their house or if they are in a valley. We can
qualify it somewhat, but you don't really know until you get there.
6410 I think too that there was a tendency for us
to want to tell the world -- I really mean the people in Manitoba --
what a great service we had and we found that mass marketing has its drawbacks.
For that very reason, we have run an ad and our CSRs could tell when the ad ran
on either television or radio because the phone would ring off the hook but the
calls would come in from all over the place. We find that if we can't get to a
house almost within 24 hours that people get frustrated.
6411 I think also the biggest lesson we learned
was that when you advertise you better deliver your service and it better be
there 24 hours a day, and it wasn't.
6412 So they weren't easy lessons. We have fixed
our network. I believe now that we run one of the most sophisticated wireless
networks in the world. As I mentioned several times, it is a very expansive
area. It is fully digital, it is fully addressable, and I think it is affordable
to the end consumer. As we mentioned it is cheaper than the lowest priced cable
operator in Winnipeg and we offer the same price right across the province
whereas in some cases we are 30 per cent lower than some of the wireline cable
providers for the same product. We have no installation fees.
6413 Also we have worked very, very hard on
customer care, and that is really where Tim Kist comes in. We hired Tim from the
cable industry and that is his forté was customer care.
6414 But I think also what has happened in the
last six months is really one of the most exciting advancements so far. Our
network is now bidirectional. In Winnipeg we are now able to offer a two-way
high-speed wireless Internet connection and we are pricing this very competitive
to cable. Paul showed you one of the modems there and also the transceiver, it
is called, which is capable of receiving a signal and shooting it back to our
head end, to our data head end, and it is connected directly into the Internet
6415 So I think that certainly the capability of
two-way has been recognized by major telcos in the U.S. There has been a real
resurgence in people's optimism about operating a network at 2.5, and I think we
are really now just beginning to be very, very competitive to cable. I think now
that we are two-way that gives us a very strong leg up on satellite as
6416 CHAIRPERSON OF THE COMMISSION: Those
certainly are lessons you have learned because I see that you shared that
without even going back to notes, so they are definitely learned.
6417 What is your assessment of all those reasons
in comparison to what you had as a business plan back at the time you were
licensed? You don't have the same number of subscribers that you were then
targeting given that now you are four years into your business plan with the
projections you had. Do you think you will be catching up or there will always
be a discrepancy between what you had projected and what you will be able to
really attain at the end of your licence term? Are the lessons such that you
have caught up now?
6418 MR. CRAIG: I would like to think so and I
believe they are. I think that it is somewhat embarrassing for us to make
certain projections and not be able to meet those projections. I think when we
make a commitment we want to keep a commitment and that is why we didn't exit
the business. You find that in the U.S. some of the major telephone companies
down there actually built MDS digital networks and actually walked away from the
business. They couldn't be bothered, I suppose, to put up with the
6419 I believe that we will catch
6420 CHAIRPERSON OF THE COMMISSION: That is where
you lost your hair, due to those headaches?
6421 MR. CRAIG: I lost it actually before.
--- Laughter / Rires
6422 MR. CRAIG: That's probably part of the
--- Laughter / Rires
6423 MR. CRAIG: I think that we will catch up on
the penetration rates that we talk about in our application and that we talked
about in our original application that was approved. I think that really one of
the drivers for this is going to be people's desire to hook up to high-speed
Internet. We are going to be in other businesses in the future as well. But we
will catch up and we are determined we are going to do that and we are committed
to do that.
6424 CHAIRPERSON OF THE COMMISSION: Given those
lessons that you have learned and catching up, do you think for you -- you
are saying that you have triggered that hearing in a sense because you were the
one applying for getting the licence. Do you really think, given that catching
up, that the timing is good for you, that you are not kind of establishing a
better stability out of your existing territory before you go into a new venture
at this point?
6425 What is the level of comfort you can give to
the Commission that if you were to be licensed, although you have some catching
up to do in the Manitoba territory, that will not hamper your capacity of really
being a strong competitor? It is no secret that the Commission is seeking
players in MDS and DTH. What we are looking for is to offer consumers, Canadian
consumers, a choice for their distributor of broadcasting signals. So for us it
is very important to assess that you will be there competing every day with the
existing DTH and cable.
6426 MR. CRAIG: First of all, I do believe that
MDS has come of age. I think that earlier on when we were licensed, actually MDS
was almost a bad word amongst the financial community. We discovered at that
point in time that we had to finance this thing basically by ourselves. I do
believe that finally people are starting to believe in the technology. They have
seen the pictures that we have been able to produce, they have seen the
potential of the network and all the advancements that are happening. We have
been working very diligently at learning the technical side, but also enhancing
our management team, enhancing our abilities to deliver a good service to our
6427 I think too that is what is really critical
for us is to create a larger critical mass so that we can compete with the
bigger providers. I think that we don't want to be marginalizing this business
in Manitoba. Our fear is that, if we stay there, at some point we may be too
small to really attract the attention and the capital that we are going to need
to build this thing out and to offer all the enhanced services that we are going
to do further down the road.
6428 We have expanded into other markets other
than Manitoba. We own an MDS system in the Coachella Valley in California, and
we also have some MDS spectrum that we bought in New Zealand. We believe in the
technology, we believe in our abilities to deliver it, and we believe that we
are ready to provide the service in British Columbia, not only from a technical
standpoint but from a managerial standpoint and from a financial
6429 CHAIRPERSON OF THE COMMISSION: So what you
are saying is contrary to what could be perceived as overextending. You need
that extension in order to be stronger within the territories you
6430 MR. CRAIG: That is our belief.
6431 CHAIRPERSON OF THE COMMISSION: That means
that you are counting on some synergies between the existing territory and the
one you are applying for. What are they?
6432 MR. CRAIG: I think that, first of all, it is
important for an MDS operator to maintain a strong local presence, so I think
that the synergies for us will come from the more senior management, people that
we are able to attract and keep in our company. I also think that there are
synergies in the upper echelons of our technical staff as well.
6433 We have filed an application. It is fully a
standalone application, but these upper levels of management, I think that is
really where the synergies lie.
6434 MDS is really a regional business and I don't
think that there is a need to certainly own a system right across Canada. I
think that that is not certainly our desire, and obviously that is not possible
6435 CHAIRPERSON OF THE COMMISSION: It's too
6436 MR. CRAIG: Yes, it's too late.
6437 We do believe in the business. There is no
question about that. We were there before other people believed in it. We
continue to believe in it in spite of some of the challenges that we have faced
and solved. We don't want to be a small MDS provider. We want to be out there
with the bigger MDS providers, able to provide a service as good as the big
players can, and I think that we need British Columbia to do that.
6438 CHAIRPERSON OF THE COMMISSION: Thank
6439 I will move now to your business plan, per
se. I have a few questions.
6440 You go on saying in the lessons learned that
you will not -- and your business plan is on that assumption -- that
there will be no charge for installation although it is a big charge to you as a
company. What is the alternative for you in terms of still getting to a bottom
line at one point and eventually a profit line? How can you support such an
6441 Your competitor is not proposing that. Why
are you and how do you compensate, in a sense, for that lack of revenues in your
6442 MR. CRAIG: There was a time when people
believed that you had to charge an upfront fee, and obviously we believed that.
When we started in this business we had a $200 hook-up fee. You may have noticed
in our presentation we also asked the consumer to put down a $200 deposit on the
equipment, which we refunded. We actually mailed all our subscribers their $200
back, which was well over a million dollars.
6443 We realized that the service is great, the
picture is great, but there is just not enough -- you need a compelling
reason to make people switch. The compelling reason that we have discovered is
you need a reliable service, you need it to be priced cheaper than the incumbent
cable companies, and you also cannot charge hook-up fees. It is not sustainable
in the long run in order to attract the market share that we are going
6444 I think also if you look at our PBIT numbers
in our business plan -- and of course our business plan that we filed,
there is no hook-up charge in there -- the PBIT numbers are fairly healthy.
I think that the business plan is robust enough certainly to support the fact
that we do not have a hook-up charge. We believe very strongly if we had a
hook-up charge those PBIT numbers would be much less.
6445 I think also the prices of the set top boxes
is dropping. When we started in this business the price of set top boxes was
much, much higher than it is today. The equipment generally is dropping in
price. I think the business model that we have filed is a true reflection of
what is going to happen in terms of an expense allocation that we are going to
incur, and I think that with that installation charge there we could not achieve
the levels of penetration that we are projecting.
6446 CHAIRPERSON OF THE COMMISSION: Okay. In other
words, what you are saying is the money that you are not getting there you are
getting by having a higher penetration?
6447 MR. CRAIG: Yes.
6448 I maybe would ask Tim Kist to make some
comments at this point.
6449 MR. KIST: Certainly.
6450 I think, Madam Chair, with respect to the
installation fee -- prior to joining SkyCable just about a year ago the
cable company that I worked for of course was reacting to an entrant in the
marketplace called SkyCable in Winnipeg that was starting to not offer
installation fees. We had to react as a cable company to say no more
installation fee if that customer said, "I'm going to go over to SkyCable. I
have a choice into this apartment building" or "I have got a choice in this
house. I can get SkyCable or I can get my cable service. What should I do?
SkyCable is not offering an installation fee." We had to react, and many times
it was a decision right on the floor where the customer service rep had the
opportunity to say we will wave the installation fee.
6451 It hurt, certainly on a financial perspective
because we had budgeted nice installation fees as a cable company. There was no
competition. Since that time, with SkyCable reducing the overall price of the
service, now we have taken care of both of the price barriers: both the initial
fee to get into the service and subsequently the ongoing monthly fee to enjoy
the service that you receive.
6452 CHAIRPERSON OF THE COMMISSION: Thank
6453 MR. STUART: Just an added answer to that
6454 The $100 installation fee that SkyCable is
proposing over four years is equivalent to about $2 per sub per month. In
reality over that time we are averaging about -- or SkyCable is averaging
about $46 per month. So it is equivalent to about a 4 per cent cost and it
is just a cost of doing business in a sense to get the revenue up.
6455 CHAIRPERSON OF THE COMMISSION: Yes. Thank
6456 What about the equipment itself? You are
saying the set top boxes are also coming down and you are going the rent
approach rather than sell the equipment. If a subscriber would like to buy the
equipment, is it possible?
6457 MR. CRAIG: We would love it if our
subscribers would buy our equipment. They won't. We have never in the time that
we have been in business had anybody phone up and say, "Could I buy the set top
box?" I don't know why they would want to do that.
6458 I think that the one thing that we take upon
ourselves, or the satellite industry does, is we take the risk on any technology
shifts. In the satellite business, when you buy your dish, when you buy your set
top box, if things change, which they have changed in the satellite business
over the years, the consumer is stuck with a bunch of broken down hardware that
is not good to anybody.
6459 If we were ever to do that, that would be our
expense. There is just no compelling reason for the consumer to buy a set top
6460 CHAIRPERSON OF THE COMMISSION: In the studies
you have done in the market here, you don't see a different pattern?
6461 MR. CRAIG: No. The other thing, Winnipeg has
one of the historically lowest cable rates in Canada. There is a reason for that
and that has to do with the fact that at one point in time the cable plant there
was owned by the telephone system, and the cable companies I think were not able
to pass on perhaps the increases they would have liked as the plant was
6462 So we compete in probably one of the most
competitive markets in terms of price in Canada. What we did, we took the Videon
service, which was the lowest price service in Manitoba, we established our
prices about somewhere between 10 and 20 per cent lower than them. It depends on
what package you take, that is why there is a discrepancy between 10 and 20 per
cent. We have applied that right across the province so that in some cases in
Manitoba -- in Brandon, for instance, where the cable company there is
higher priced than in Winnipeg, I had a customer that phoned me the other day
and he said, "I just wanted to tell you that I took most of the services that
SkyCable offers and I had the identical packages from Westman Cable in Brandon"
and he is saving $18 a month and it cost him nothing to switch.
6463 We had toyed at one point with having a
two-tiered pricing system, one for Winnipeg and one for rural Manitoba and for
Brandon and for the smaller communities throughout the province. We decided that
the consumer backlash would probably be too great because even if you changed
the name and market the service differently, people eventually find out it is
the same service provider. So we decided to take the hit, and we are sure that
due to the fact that we have these low prices we will sign up more
6464 CHAIRPERSON OF THE COMMISSION: Signing
people. Your projections talk about reaching out to cable subscribers, existing
cable subscribers as well as non-cable. Your strategy in the past was much more
in non-cabled areas, wasn't it? You seem to have switched a bit or shifted your
way about it.
6465 Can you explain to me why that is? That must
be among the lessons learned.
6466 In your projection, could you break down for
us what you expect will be coming from cable subscribers and what would be the
proportion from non-cabled subscribers?
6467 MR. CRAIG: Sure. I think to answer the
majority of that question I would like to ask Tim to do that. But just before he
does, we did start out actually thinking that our service would be most
attractive to rural users. We have switched our focus. Our customer base is now
about 60 per cent from cabled areas and 40 per cent from non-cabled areas. I
will let Tim explain.
6468 MR. KIST: Sure. Thanks, Boyd.
6469 The first forays into the Winnipeg market, as
I indicated in my opening remarks, were higher installation fee and a higher
monthly rate. Although people in the cable industry or customers of the cable
industry were saying, "Gosh, I would like to have an alternative", it just
wasn't compelling. They would look at the line-up and say, "Not much difference
and I'm paying more. Yeah, okay, there is a better picture, but that's just not
good enough, thank you very much."
6470 When you look at our market, we pass about
289,000 homes in Manitoba and about 220,000 of those are cable customers in
Winnipeg. That is where our market is, in and around the City of Winnipeg. We
believe now that our focus has to be on generating an alternative to cable
companies, because there hasn't been significant competition there before. We
have started to focus on area-by-area marketing within the City of Winnipeg,
which is creating an excitement, certainly.
6471 Also, because we were granted our MCS licence
initially in Winnipeg on a test basis, and fully granted that, it is the perfect
springboard in a competitive market to initially launch our high-speed Internet
service bundled with our cable television offering.
6472 To take those lessons and look at British
Columbia, we have estimated that over time about three-quarters of our customers
by year seven will be from cable, about 20 per cent will likely be from current
non-cabled areas and about 5 per cent will be switchers from DTH. Now, that
breakdown is a particular challenge for us because B.C. has a very high
penetration of current cable customers. I may ask Elan to elaborate a little bit
more on some of the research supporting it. We have found a very high
percentage, I believe it was 41 per cent, that indicated a willingness to switch
when there was a 10 per cent difference in the price.
6473 We also know from research and from reading
the newspapers that there is a dissatisfaction with cable customers out here in
British Columbia. We believe with our focus on price, quality and customer
service that that is going to be some real good drivers for us to make the
inroads into the cable market that we have to make to make our business plan
6475 MS GILLESPIE: Thanks, Tim.
6476 Clearly, price was a factor that came out in
the market research.
--- Technical difficulties / Problèmes techniques
6477 MS GILLESPIE: When consumers were asked to
state their interest in theme packs, as the price increased obviously the level
of interest also decreased. But, to address the question that Tim had, 41 per
cent of customers said that they would be prepared to switch with a savings of
10 per cent, and that went up to 47 per cent when a savings of 20 per cent was
6478 So price is a key factor in being able to
offer a competitive service offering.
6479 Thank you.
6480 CHAIRPERSON OF THE COMMISSION: Thank
6481 In your approach you were saying earlier on
that you had thought at first that the mass market type of approach would do it
but you realized that it was too much, too spread out and not enough resources
to serve everybody within 24 hours. How do you intend to go about it here in
B.C.? You know, taking the lessons learned, what would be a good promotion mix
to kind of address what you have found in the market surveys?
6482 MR. KIST: Perhaps I will start,
6483 Initially, when we looked at it, definitely
you need some form of mass marketing to initially raise awareness. That is the
purpose of the mass marketing approach. We want to let people know we are here
in British Columbia, give them a sense of what we have to offer. However, to
make the subscriber growth numbers that we require, we really need to target a
market. Based on our experience in Manitoba, principally on efforts where you
combine addressed direct mail followed up within a week with telemarketing to
support the piece that you have sent out, we are getting pretty decent response
rates, in the 5 to 7 per cent range, which are outstanding. It speaks to the
value of the package that we have as well as the fact that people are looking
for an alternative.
6484 It is going to be very interesting now as in
our current campaign we now are including our bundled Internet service into
that. So I'm quite anxious to see the results when I get back home.
6485 But the balance of our marketing dollar
expenditure is also in rural areas where we may get involved in special events,
either radio or community newspaper that will allow us to reach some of the
other areas initially to grant them an opportunity to see the SkyCable service
6486 Debra, you may want to elaborate just a
little more on the marketing mix and some of the numbers that we had talked
6487 MS McLAUGHLIN: As well as SkyCable coming of
age, so has the advertising business. One of the most lucrative areas these days
in terms of advertising is in DTH and services like MDS, so there has been a
great deal of research in terms of the media usage of this particular category
6488 As Tim has said, you need television to
develop the brand and to create awareness, but we can look at television and
even within that mass media identify particular shows that are better able to
reach the early adopters of this type of technology and really narrow
6489 We learned lessons from the research, like
newspaper isn't as effective as we might have thought, and we have where they
read and what magazines --
6490 CHAIRPERSON OF THE COMMISSION: Don't say that
too loud. There is a journalist from the print here. He will be sad.
--- Laughter/ Rires
6491 MS McLAUGHLIN: They really like
6492 CHAIRPERSON OF THE COMMISSION: They are
important. They are still --
--- Laughter / Rires
6493 MS McLAUGHLIN: Very, very important but used
in a very specified way.
6494 So we have those type of details which will
guide the promotional campaign and essentially make it more effective and really
using mass media in a very targeted manner.
6495 CHAIRPERSON OF THE COMMISSION: Where is the
MUD business in your plan? Are you targeting them? Are you targeting them now in
Manitoba? Is it particularly interesting here or not? What are your views on
that and what is your approach for the MUDs?
6496 MR. CRAIG: Our approach to MUDs is really to
be aggressive but not to be antagonistic. We do not believe that people should
have a forced cable provider down their throats. We do not necessarily run out
and ask building owners for exclusivity. We want the consumer to have the
choice. We don't want you to get involved in our ability to either be in or get
kicked out of a building. We are not going to rely on the courts to do that. We
are going to rely on good old fashioned marketing, good service and low
6497 We have talked to a number of building owners
here in Vancouver, large ones. We were surprised I think because they told us up
front they do not want access fees. What they want is their tenants to have the
service that they want so that they are happy and they stay in their buildings.
That has been our experience in Winnipeg.
6498 About three years ago when we started calling
on building owners, I think that a lot of property owners, property managers had
been to various conventions and I think it was suggested to them at these
conventions that this is going to be a huge source of revenue for building
owners. We said, "No. Our margins are tight enough. We cannot afford to pay you
$1 a month per sub or $2 a month per sub", and we walked away from the
6499 Their attitude has changed considerably over
that time. It think we have softened them up considerably. We just signed a
contract with a property manager in Winnipeg that manages 12,500 suites and they
gave us access to all their buildings. They said, "You can come in, you can put
your antenna on our building", we can run our wires into their distribution
units or put our own there, I suppose, right beside the cable
6500 We have another one that we are expecting to
sign within weeks that would allow us into another 3,000 units, buildings that
have 3,000 units. We understand here in Vancouver that Rogers does not pay
access fees and our policy is going to be and is today not to pay access
6501 MR. KIST: If I can just add to that, Boyd,
and just clarify.
6502 It is not one property manager with 12,500;
it is a few property managers totalling 12,500. Nonetheless the number is the
same. We are adding another 3,000 units.
6503 We have access now into most of the Manitoba
housing buildings across southern Manitoba, both single-unit dwellings and
multi-unit dwellings. Our next meeting is next week where we are trying to
finalize complete access to the rest of their buildings.
6504 We have an MUD strategy. We have a commercial
accounts manager in Manitoba, and in our business plan we have also indicated
that there is a senior commercial accounts manager to work with the property
managers to sign up access, to get the agreements in place to allow us to get in
there. Then we will use our other direct sales techniques to target directly to
the consumer. That is really the most important thing in this whole
6505 Building owners and managers sometimes like
to think they would like to make decisions on behalf of their tenants, and in
many cases they are well-meaning decisions, however, at the end of the day
customer choice and that customer, the end user, is the one that really wants to
decide what they can and cannot watch or do with their interactive
6506 We support that and we also support the
property manager's right to make certain decisions. That is why for us it is
very open. Like the rest of our plan, it is simple, it is straightforward. There
are no caveats, there are no little asterisks in mouse type on our advertising.
What you see is what you get. It has been successful for us in Manitoba in an
urban MUD market. Based on Boyd's contacts so far out in British Columbia we are
very confident that it will be successful out there as well.
6507 CHAIRPERSON OF THE COMMISSION: Tell me, I was
referring earlier to the fact that we are seeking to offer the choice to
Canadian consumers so that there is competition out there. What is your view and
your experience of the competition now? For example, cable is more involved in
digital than they were even six months ago. There has been more development in
the digital universe of cable. DTH has been more aggressive. So what is your
experience and how would you assess your competitiveness vis-à-vis DTH and cable
rolling out digital?
6508 MR. CRAIG: First of all, I think there is a
lot of competition out there, and that is good for the consumer. I think it is a
policy that you have been pursing now for a while. I think people have a
tendency often to ask us what our subscriber base is and somehow relate that
back to how competitive we are. I believe in Winnipeg now that we have a very
stable network, that we have a great service at a low price. I think cable has
already reacted to our prices there.
6509 I get mail all the time -- because of
course I'm not hooked up to the cable system -- I get mail all the time
offering free hook-up for video and cable TV, second month free service. That
didn't happen 12 months ago. I think that because we have a digital service now
and all our customers have digital service, all our customers have a digital set
top box, I think that how we are going to compete is by providing a very
reliable, low-cost service. It is to that end that we run our
6510 MR. KIST: Again, just to add, Boyd, Madam
Chair, the digital universe for the cable industry was just around the corner
six years ago before I started into that industry on the cable side. They are
just slowly starting to roll out that digital domain. 100 per cent of our
customers are digital. The cable industry can't say that. It is only the DTH and
MDS providers in Canada that can make that statement.
6511 The quality is significantly different
between a digital service and a regular analog cable system. We don't have that
infrastructure between point A to head end and point B to the customer
premise to maintain and worry about expansion and contraction of connectors, and
things like that. Tower, customer, home -- that's it. We can pinpoint,
troubleshoot, make sure the service is reliable right off the hop.
6512 I think that that sort of network stability
coupled with 21st century technology are things that customers are looking for.
Again, you can't underline enough that if you didn't have a compelling price to
go with that people would not select an alternative.
6513 MS McDONALD: If I could just add to that for
6514 We laid out our competitive strategy very
carefully in the application, but just to give just a couple of key
6515 We have been harping on price, but we also
plan to differentiate ourselves, particularly against DTH, for example, in terms
of buy through, access to discretionary tiers without having to pay through,
customer care, and a more affordable Internet service.
6516 CHAIRPERSON OF THE COMMISSION: But isn't it a
choice that is offered also by DTH? What would be your competitive advantage?
Okay, cable I get your point. What about DTH, which is digital as much as you
6517 MR. KIST: Right. One of them still is price.
We are lower priced than the DTH providers.
6518 The second one is our local presence. People
in Manitoba -- and certainly when you talk to folks here in British
Columbia -- having a local presence. People that work in your market.
People that understand when you say you are at the corner of such and such a
street know where that is. If it is 1-800 Toronto that you are phoning to the
call centre, you don't necessarily get that kind of support.
6519 We have identified in Manitoba in particular
that having that local presence has endeared us to communities, has endeared us
to new providers, multi-unit dwelling building owners, managers, et cetera. They
like dealing with someone who is from that area, not with an agent, et
6520 CHAIRPERSON OF THE COMMISSION: When you were
talking earlier of the direct mail and telemarketing, does that mean that you
will have installations here to do it, or will you do it from Winnipeg? Where
are you going to be located to do --
6521 MR. KIST: We will have a customer care centre
here in British Columbia. That will be primarily an inbound customer service
operation. It would be capable of doing some outbound, but we have found in the
past that we have a great partner in Manitoba that helps us, a Winnipeg-based
company that has offices across Canada and partnerships with other local
telemarketers. They had helped us out by determining that there is a local
business partner that they would use. So we would be using a British Columbia
based telemarketing firm to physically make those follow-up phone
6522 CHAIRPERSON OF THE COMMISSION: So you would
use the same sales network you have in Manitoba but that has like ramifications
here in B.C.?
6523 MR. KIST: Yes.
6524 CHAIRPERSON OF THE COMMISSION: Okay. Where am
6525 Talking about your sales and marketing, you
are projecting about $3 million a year in terms of sales and marketing costs.
What is your view on that? That will be mainly advertising and promotion and the
rest will be on the sales network, the forces?
6526 MR. KIST: No. The split for that
$3 million is approximately $900,000 in salaries for our customer care
operation. It includes about $1 million of television marketing, half a
million dollars for our direct mail and telemarketing follow up and another a
half a million dollars that we will use for specific marketing activities
including newspaper and perhaps some radio.
6527 CHAIRPERSON OF THE COMMISSION: Life being
what it is, I suppose you will be learning other lessons if you were to be
granted a licence here.
6528 Let's suppose that, learning lessons, you
have a slower penetration than the one you had anticipated or projected. What
would be your reaction? Would you be kind of going for more expenditures on the
sales and marketing front?
6529 MR. CRAIG: I think that as part of our sales
and marketing strategy you have to factor in the fact that we do not charge an
upfront fee. I think that that is $125 a month that some other people are
proposing and I think that that really should be counted as part of our sales
and marketing budget. If you do that it is a substantial amount of
6530 I believe that the budgets that we have filed
for our sales and marketing in this province are adequate to do the job that we
say we are going to do.
6531 CHAIRPERSON OF THE COMMISSION: Thank
6532 So you see that as a -- there would
be a portion being equivalent to that money as a cost to advertising, in a
6533 MR. CRAIG: Yes, and I think that
6534 CHAIRPERSON OF THE COMMISSION: That should be
added to the --
6535 MR. CRAIG: And maybe, actually, if you have
$125 hook-up charge, you may actually in fact have to spend more than $125 to
compensate for the fact that you are charging $125. It is going to take a tonne
of advertising to convince people to spend $125, and I suggest it is going to be
more than $125.
6536 CHAIRPERSON OF THE COMMISSION: Okay. Thank
6537 You are saying that you will be targeting a
high level of premium services. What is your experience in Manitobs?
Commissioner Grauer is always reminding us that it is different here, too. How
do you see, in your projections, the portion that will be high premium? Because
what I hear you say too is, given that there is no installation, basic is lower
than what is cable and eventually you do -- I understand you are saying
they are not coming for pick and choose, they take packages, but then at the end
of the day it is a lower price, so how do you reconcile the high premium notion
6538 Secondly, what is the proportion of real high
premium with the one that is really looking for strictly what he is viewing and
likes to view with a low price in getting the service?
6539 I'm not sure I was clear in asking my
6540 MR. KIST: Madam Chair, let me give it a shot
on the first shot and then I will ask Debra to back it up with some of the
specific research characteristics on the demographic side.
6541 In Manitoba, our experience is that because
we have a lower price on our basic and discretionary, it affords people an
opportunity to try out pay-per-view, for example, which is something in most
cases they have never tried before. In addition, our premium penetration is over
45 per cent and climbing, which tells us a couple of things. Number one, it is
the same point as with the pay-per-view, people are having an opportunity to try
out a premium movie service such as Superchannel and/or Moviemax where they
never had that opportunity before because the rates to the cable company were so
6542 Once they get into it, once you get used to
watching movies like that you tend to be a longer term customer. I know that in
comments from our affiliate representatives at WIC, any time they do research
they tell us the same thing. Typically, once you get a person watching those
commercial-free movies, they tend to hold onto them for a longer period of
6543 Debra, I will ask you to follow up on the
specific demographics of the people that we are looking at.
6544 MS McLAUGHLIN: The people that will be
attracted to the service are between the ages of 25 and 49. I have to qualify
this before I go on because this is a guideline. This isn't absolute and they
will fall outside of it.
6545 CHAIRPERSON OF THE COMMISSION: She is happy
she is going to make it.
--- Laughter / Rires
6546 COMMISSIONER GRAUER: Just under the wire, but
--- Laughter / Rires
6547 MS McLAUGHLIN: And for anyone who doesn't
meet that qualification, we are very interested in hearing from you anyway, and
households that have incomes better than $50,000, they have average education.
We noticed when we were doing this research that there was a fair representation
across all sorts of lifestyles and skill sets. We had, proportionate to
population, representation for owners, managers and professionals. We had
skilled and non-skilled labour. So we felt that it more or less follows the
6548 If you are a specialized viewer, if you are a
heavy viewer, if there are special genres that you are looking at that aren't
well covered by a conventional cable, then this type of service would appeal to
6549 MR. KIST: If I can just add one more
6550 Last year at the CCTA convention here in
Vancouver the general manager of a large cable company talked about customer
research and indicated that they were finding half of the customers they were
losing to competitors were in fact their premium subscribers, the people taking
most of the services. Well, I'm real happy to take the people who would rather
spend a lot of money on a monthly basis rather than the folks that are just
basic only. It doesn't mean we are discriminating against either one; it just
helps support that we are in fact gaining significant premium television
6551 CHAIRPERSON OF THE COMMISSION: But in a
different way. I understand. It is not the high premium like the one that will
take everything and whatever the price is, you know, like the early adopters
type of technology.
6552 MR. KIST: They are not the early technology
adopters, but they are people that are saying, "This is what I'm paying on my
cable bill today. If I look over at SkyCable and I make the switch, first there
is no installation, so that is okay, I'm comparing apples-to-apples. My
goodness, if I was to add the cost of a decoder onto my current cable bill and
compare it, I might as well just subscribe to take some extra movie services if
I so choose." So that is where they are, and in many cases they are still saving
money over their existing cable bill.
6553 CHAIRPERSON OF THE COMMISSION: But you are
qualifying the high premiums as the ones who take pay-per-view, in a
6554 MR. KIST: They would be included in that as
6555 CHAIRPERSON OF THE COMMISSION: They wouldn't
necessarily on cable take pay-per-view, but because of the other factors you are
presenting in your offer they can afford pay-per-view that they might not afford
on cable, is what I understand --
6556 MR. KIST: Yes. That's correct. In addition,
it is simply because every customer has that addressable set top decoder they
can order the pay-per-view at any particular time. With cable they still have to
go out and get it or return it, et cetera.
6557 CHAIRPERSON OF THE COMMISSION: I will ask the
question. Vis-à-vis cable I understand. Vis-à-vis DTH, why that targeting is
successful is for the same reason -- the price again.
6558 MS GILLESPIE: Price is clearly a factor in
targeting against DTH because of the high equipment costs and also installation
charges. Though DTH operators are starting to offer promotions, as in Vancouver
where they are waiving installation charges for a period of time, the equipment
is still a barrier.
6559 But beyond price, MDS services will have more
local channels than DTH for the Vancouver market, which will still be a factor
in attracting consumers. So I think MDS in many ways is a hybrid, if you like,
between DTH and cable because it still retains that local capability and that
ability to serve the local consumer and give them the information and news and
other programming that relates to the community.
6560 Thank you.
6561 CHAIRPERSON OF THE COMMISSION: A few
6562 The Internet. You referred to it. I had a
question: Do you have offer Internet now? You have broadly told us yes. I
understand that it is an interactive hook-up. You don't need the telephone to do
6563 MR. CRAIG: That's right. For us that was
critical to establish the link from the house back to the tower, from the
apartment back to the tower, and the reason for that is it doesn't tie up the
phone line. If people didn't want to tie up a phone line and had to actually get
another phone line, I think the average cost of a local extension in Canada now
is about $28. So if you add $28 to the price that we would charge, we basically
would have priced ourselves out of the market if we weren't two-way.
6564 We are the first MDS/MCS operator in Canada.
In Manitoba we have secured access to the MCS band on a permanent basis and also
we are returning from the home back to the tower at 2.1, and that spectrum was
assigned to us on a permanent basis as well. Manitoba was excluded from the
recent MCS call. The reason for that was that there is a provincial learning
agency that is actually the MCS spectrum. I'm probably not telling you anything
you don't know. And we have also applied for the MCS spectrum here in British
6565 CHAIRPERSON OF THE COMMISSION: You are really
anticipating all my questions here.
--- Laughter / Rires
6566 CHAIRPERSON OF THE COMMISSION: Let's stay on
the Internet for just a second.
6567 What is the price of your Internet connection
6568 MR. CRAIG: It is $39.95 and there is a price
that we have established for small business. Maybe Tim could answer
6569 MR. KIST: The commercial prices vary from $99
to $199 a month depending on the service that the customer requires. The one
other differentiating Internet price we have for residential is $49.95 for
current non-video subscribers. So, in other words, if somebody just wants the
SkyWeb service -- that is our brand name, SkyWeb -- if they just want
that it would be $49.95. There is no differentiation when we roll out across
rural Manitoba between prices in Winnipeg and in Brandon and in the rural areas.
We keep that price consistent.
6570 CHAIRPERSON OF THE COMMISSION: Are you
approaching the territory you are applying for with the same type of strategy in
terms of pricing?
6571 MS McLAUGHLIN: Our pricing strategy for B.C.
is based on the bundle. We think it is critical to have both. Therefore, we do
offer a global discount on the bundle for B.C. So it is similar to Manitoba
because in total, in the Manitoba pricing, if you add up the two services the
cost of the bundle is less. But the way we are marketing it in B.C. is if you
take the two services you get a discount on the totality.
6572 CHAIRPERSON OF THE COMMISSION:
6573 You touch upon the LMCS
6574 MS McLAUGHLIN: MCS.
6575 CHAIRPERSON OF THE COMMISSION: MCS. But you
have an MCS. You have had it for Manitoba. You have received
6576 MR. CRAIG: We have received approval, yes,
not for as much MCS spectrum as we are hoping to get over time, but we do have a
channel assigned to us -- I shouldn't say province-wide. We have a channel
assigned to us for a high-speed download in Winnipeg. We have received approval
for our Ely(ph) site and we have filed with Industry Canada an application for
every single one of our MDS sites for an MCS channel, and also 2.1 for a return
6577 CHAIRPERSON OF THE COMMISSION: Those
applications you haven't heard from --
6578 MR. CRAIG: Industry Canada has basically
reserved the channel -- the one channel across Manitoba is clear for
SkyCable. We have not heard on the B.C. licence approvals yet.
6579 CHAIRPERSON OF THE COMMISSION: What would
happen if you didn't get it? What is the alternative for you?
6580 MR. CRAIG: If we don't get it, obviously we
would be very disappointed, but I don't think that it would necessarily knock us
out of the wireless game. We don't have the ability to actually look at all the
applications that were filed here in British Columbia.
6581 When we filed our application, we filed for
an open access network, meaning that any ISP could have access to our wireless
cable, which is an MCS spectrum or data network. I would expect that if we get
the MDS licence here and not the MCS licence, we would then be in a position
where we could go to the winning MCS applicant and wholesale a spectrum back
from them for our MCS operation.
6582 CHAIRPERSON OF THE COMMISSION: Okay. Then
what does it mean to the subscriber? You are still thinking about the bundling.
In terms of price, would that be much higher than what you are capable of
offering in Manitoba were you in the situation where you would have to go
through a third party to get the access?
6583 MS McLAUGHLIN: Simply put, our strategy is
based on a bundle, therefore we will have an Internet service. We will acquire
it either through resale or through purchase or through some other means. That
means we will have a bundled service. You never know, the cost, the wholesale
price, might be actually lower than us acquiring the MCS licence.
6584 CHAIRPERSON OF THE COMMISSION: So you haven't
given any difference in price whether you were successful or you would have to
go through a bundled price?
6585 MS McLAUGHLIN: We know what we would price it
at in our application. We cannot know what the wholesale price will be set by
another competitor should we not acquire that spectrum. However, that is not the
only spectrum that may be available. Our strategy is to acquire an Internet
spectrum either in the 2.5 or the ISM or the 3.4 or the 5.5.
6586 CHAIRPERSON OF THE COMMISSION: I guess my
question is the relationship or the interface with the subscriber. You know, you
are identifying being capable of offering Internet as very important in your
strategy, so that means also the price at which it will be offered to the
subscriber is important.
6587 Have you established for yourself a certain
range over which you won't go and that you would absorb the difference if the
price that would be charged to you would be too high, is I guess the question
6588 Do you know what I mean?
6589 MR. CRAIG: I think for us to be successful,
as successful as we want to be, we are going to have to price obviously our
Internet service at or below the present offering that cable has. In Manitoba we
are charging $39.95 a month, as we said. We would expect to charge a similar fee
here. Who knows what is going to happen to it in the future, but we would
certainly start with a competitive price.
6590 MS McLAUGHLIN: But in terms of acquisition,
we have done evaluation obviously on the MCS. We have also done valuations on
other bands. So we think we understand the range that we need to be in is within
the spectrum area that I mentioned because we think that is the only area that
is price efficient for us, especially if you look at the prices that the recent
auction went for. We know that we belong in the 2.5 to whatever range, and we
think we have pretty good valuations of what that would cost us.
6591 CHAIRPERSON OF THE COMMISSION: Okay. So your
business plan can support being competitive with that price of offering Internet
services, competitive with the offer of cable?
6592 MS McLAUGHLIN: In those frequency
6593 CHAIRPERSON OF THE COMMISSION:
6594 Now the open-access network, the local
expression, we would like to have some details about that.
6595 Let's first go back to what you were saying
that we have seen -- and I haven't seen the split screen
6596 MS McLAUGHLIN: It flew by.
6597 CHAIRPERSON OF THE COMMISSION: One thing that
we are interested in knowing is would that be alphanumeric? What is going to be
there? What is your approach to it? Will it be broadcasting or not broadcasting,
whether it is exempted or not?
6598 MS McLAUGHLIN: Our community channel, really,
we didn't elaborate in our application. We are happy to elaborate
6599 It is quite similar to the community channel
that you see on cable, but it has one additional dimension. Our SkyChannel
Access Program was conceptualized around our service bundle, and by that I mean
in terms of technology we are going to have a broadcast channel showing
broadcast programming like everyone else. We will also have an Internet access
service, and that is really just going to be a second window. So instead of
offering one window which is a broadcast window, we will offer two
6600 So really we just had a discussion about the
importance of the bundle and we talked about how important Internet is to our
strategy. We just thought it made sense to carry that through to our community
6601 Basically we will have a broadcast window
just like the cable companies. On the broadcast window, of course you really
couldn't see it, but it is really what you will see on your standard cable
channel. It is a split screen so there will be a broadcast part. Along the
bottom you will have wire feeds which are alphanumeric just along the bottom
which has your weather, news, whatever. Perhaps along the side you will have
some alphanumeric text, our programming wheel, as we will have one, and other
announcements about our Web site and so on.
6602 Our Internet site will be primarily
alphanumeric. It will carry multimedia content and it will have a minor amount
of streaming video.
6603 CHAIRPERSON OF THE COMMISSION:
6604 You are talking about a third party somehow
that will manage the -- you were talking about an advisory committee here.
What is the update on this?
6605 MS McLAUGHLIN: We have spent a lot of time
out in B.C. setting up our advisory committee. It is the key part of our
strategy; it's based on partnerships, because in terms of our community
programming dollars, which is 2 per cent of our revenues, it's not a whole lot
of money. So we developed a partnership strategy and we really mean partnership
strategy. We had to create a value proposition to our board, so we do have board
partners. I outlined their roles in our delivering our program with
6606 It is a community access advisory board, and
I gave you, I think, the points earlier, but they will help us establish a
governance framework, and in some ways they are going to contribute content,
their knowledge, their skills. They are going to be our emissaries in the
community and so on.
6607 Perhaps I could just sort of give one or two
examples to explain how it could work.
6608 We have had discussions, and some of our
intervenors will explain to you further their role, perhaps tomorrow or
whenever, on our panel. So, for example, one of our partners is Knowledge
Network. They have many shows that they may give us access to on a second or
third-window basis. For example, they give us a show on fishing in B.C. and we
may work with school groups to create some new media content around that, what
fish are indigenous to B.C. and so on, and we will put that on our Web site.
Then we will create a chatroom event, co-ordinate the timing of our broadcast
channel with our Web site program. That is how the two would work together as an
6609 I could give you a couple of other examples,
if you like.
6610 CHAIRPERSON OF THE COMMISSION: Maybe another
example -- not all.
--- Laughter / Rires
6611 MS McLAUGHLIN: We did spend quite a bit of
time, and we had to of course explain it to our proposed partners as well so we
had sort of a long deck and I will try to keep it short.
6612 Another example would be something that was
important this week, the topic of widening the causeway. So either our program
co-ordinator or someone in our community might give us a video clip which we
would run by our board to make sure that it fits with our guidelines and that
might air on our broadcast channel, people sitting in trees, whatever, and we
might run that. Then we would work with our volunteers to again co-ordinate a
chatroom discussion on our Internet site, about what they think about the topic,
maybe provide some history on the issues, regular updates on the Web site in
terms of alphanumeric text and so on.
6613 So that would be kind of another
6614 CHAIRPERSON OF THE COMMISSION: Thank
6615 I understand somewhat, not perfectly, because
definitely we haven't spent the time you have spent on developing your project,
but I think we get the general idea.
6616 What about the idea of subscribers getting
access to -- I understand having partners, they have a privilege or direct
access, let's say. What about the subscribers? That is the idea of the community
channel, too, to be accessible to your subscribers. What is your approach to
that and how do you facilitate that and ensure that?
6617 MS McLAUGHLIN: We are a network operator. We
are not in the content business. We want our community to develop their own
content. There are four ways that we propose to get content and one of the ways
is for our subscribers to do it by themselves and for themselves. The role of
the Board is to make sure that it meets the goals of the cable framework and
also is acceptable to the community, so we want them to deliver that content for
6618 We will also sponsor content creation. Two
per cent of our broadcast revenues will be allocated directly to support that
kind of content.
6619 Other content will be contributed by our
advisory board members, and there will also be lots of content in multimedia and
broadcast forms that may be sent in via the Web. We are really confident and
excited. By spending time out here we really think that there is a lot of
multimedia content that is being developed now for Internet purposes. But let's
face it, it is becoming broadcast in nature and we think that it is really ready
for a broadcast window.
6620 CHAIRPERSON OF THE COMMISSION: What kind of
6621 MS McLAUGHLIN: Multimedia when it becomes a
full motion video.
6622 For example, another example -- this one
is a music example -- so if we have a local musician who we have a
performance on our broadcast channel, and perhaps a talent show or something,
they would be able to distribute, if they give us the rights to distribute,
their works via our Internet site, for example. However, when there is content,
they would create their own little Web site. We would actually just provide a
flag to their Web site and they would have some kind of promotion about their
video and so on.
6623 CHAIRPERSON OF THE COMMISSION: What is the
added value of the -- how do you call it -- SkyWeb, because the
musician, you know, they can do it on their own on the multimedia
6624 MS McLAUGHLIN: We have given them a broadcast
window to display their talents, and then we --
6625 CHAIRPERSON OF THE COMMISSION: Okay. So they
would have access first there.
6626 MS McLAUGHLIN: There. That's
6627 CHAIRPERSON OF THE COMMISSION: And then you
can do the second window.
6628 MS McLAUGHLIN: And as we stated, there is
funding available to multimedia content, so they may actually have access to
some of our funding.
6629 CHAIRPERSON OF THE COMMISSION: You are
talking in your project of a senior level resource to manage the open access
network. Has there been work that has started in terms of identifying volunteers
or local producers that can help, you know, so that the partners are not a
gatekeeper to the channel, you know, kind of spreading the input that can be
eventually there on the community channel?
6630 MS McLAUGHLIN: I think that is a really good
point. We have spent a lot of time with lots of community groups, meeting and
developing a framework since we have been here. One of the first things that the
group has to do is establish a governance framework. So we have actually got the
outlines of a governance framework and that will help us determine how it is
going to actually work.
6631 CHAIRPERSON OF THE COMMISSION: What about the
senior level resource? Will you have somebody here --
6632 MS McLAUGHLIN: We will have someone
6633 CHAIRPERSON OF THE COMMISSION: You
6634 MS McLAUGHLIN: We will.
6635 CHAIRPERSON OF THE COMMISSION:
6636 MS McLAUGHLIN: And you may have noticed,
there was a budget for a person and on top of that the 2 per cent of the
6637 CHAIRPERSON OF THE COMMISSION: My last
question, maybe some of my colleagues and legal counsel may have additional
ones, but it is relevant to the free-of-charge service to schools. Is that a
strong commitment you are making and how much investment does that represent?
Does that include colleges and universities, and how many connections and
institutions? So could we have some details about that idea?
6638 MS McLAUGHLIN: We had taken a commitment to
provide our service free to schools. When I said "schools", I was thinking
6639 CHAIRPERSON OF THE COMMISSION: Okay. I'm not
forcing anything on you. I'm just trying to clarify what you meant.
--- Laughter / Rires
6640 CHAIRPERSON OF THE COMMISSION: So you meant
schools. Okay, schools. Schools is schools. It's good for me. I'm not that
bilingual, you see.
--- Laughter / Rires
6641 CHAIRPERSON OF THE COMMISSION: How many
connections per school were you thinking about?
6642 MS McLAUGHLIN: In our seven-year program we
have undertaken to put community access kiosks in various public locations
including schools. So it may be one in a community or two or whatever. I haven't
got an exact number.
6643 CHAIRPERSON OF THE COMMISSION: Okay. So it is
not necessarily one per school?
6644 MS McLAUGHLIN: Not necessarily one per
school, depending on how many Internet access points exist in a
6645 CHAIRPERSON OF THE COMMISSION: So the access
would be through Internet, then?
6646 MS McLAUGHLIN: Well, if we are talking about
the broadcast channel, we will be able to hook up the schools to the broadcast
6647 CHAIRPERSON OF THE COMMISSION: If we were to
deny the funding of your local expression project, would you still do it? Yes,
you would cry first, but after that.
--- Laughter / Rires
6648 CHAIRPERSON OF THE COMMISSION: Is that a
commitment that is linked to having the open access or the
6649 MS McLAUGHLIN: No. We would make the
broadcast service available.
6650 CHAIRPERSON OF THE COMMISSION: Pardon
6651 MS McLAUGHLIN: We would make the broadcast
service available, so it would be a commitment.
6652 CHAIRPERSON OF THE COMMISSION: Okay.
6653 That takes care of my questions. I turn to my
colleagues if they have additional questions. They don't. Oh, there is
6654 Yes, Commissioner Langford.
6655 COMMISSIONER LANGFORD: I don't want to
emphasize the negative but I so enjoyed your horror story at the beginning. I
just wanted to get that in.
--- Laughter / Rires
6656 COMMISSIONER LANGFORD: And on a low note, it
was very candid I have to say.
6657 But, no. I'm just wondering, on page 10
of your handout you say that overall customers' quality of service satisfaction
is 81 per cent, which means -- I'm not trying to emphasize the
negative -- there is 19 that aren't. Is it one problem you still have or is
it just a big variety of problems?
6658 MR. KIST: No, I don't think it is a problem.
I think had we done this survey rating a year ago, Commissioner Langford, I
would suspect the number would have been a bit lower, substantially lower
6659 This is a baseline measurement that we will
continue to do on a quarterly basis. The Cable Television Standards Foundation
has developed these quality of service customer satisfaction indicators. There
are not many cable operators that do this.
6660 I can tell you from my experience at Videon
that the three surveys that I was responsible for overseeing, we did not achieve
a significant higher rating than this one, and we were quite proud of that at
that time. When you consider a 1997 National Quality Institute Survey that was
done, out of Ontario the cable industry rated I think it was seventeenth out of
6661 COMMISSIONER LANGFORD: I think I can save you
a lot of effort. So it is just a kind of general quality of service situation?
There isn't a major problem you are still wrestling with --
6662 MR. KIST: No.
6663 COMMISSIONER LANGFORD: -- something
like transmitters 1,400 feet up in the air that nobody can get to?
6664 MR. KIST: No. The lowest one we had was a 77
per cent rating. So everything was 77 per cent or higher, which we were very
pleased with. I know that when I tell my staff what the numbers are, they are
going to be ecstatic.
6665 COMMISSIONER LANGFORD: Thank you very
6666 MR. KIST: Your welcome.
6667 CHAIRPERSON OF THE COMMISSION: Madam
Assheton-Smith has a few questions.
6668 MS ASSHETON-SMITH: Thank you,
6669 The first thing I want to do is just clarify
the proposed coverage area. You have stated today that in the second stage,
which is within 24 to 30 months, you plan to roll out to Kamloops and Hope. In
your application you indicated that you would be prepared to accept as a
condition of licence the expanded coverage area as per Annex D if required, and
Annex D included Hope and Kamloops.
6670 Is it your intention now, are you seeking a
coverage area that includes Kamloops and Hope?
6671 MR. CRAIG: Yes, we are.
6672 MS ASSHETON-SMITH: I want to come back to
your open-access network. Unfortunately, I also don't have a real clear picture
of what this is going to be.
6673 First of all, does the Manitoba system have a
similar type of channel, or any community channel at this point?
6674 MR. CRAIG: No, it does not.
6675 MS ASSHETON-SMITH: It doesn't.
6676 When I read over the application, you talk
about educational broadcasting and you talk about it as an open-access network
or community-based development and learning. It sounds like there will be a
fairly high proportion of educational programming on the channel. Is that the
intention or do you have sort of an idea of what proportion would be educational
6677 MS McLAUGHLIN: That is not the
6678 MS ASSHETON-SMITH: It's not. Thank
6679 MS McLAUGHLIN: The community bulletin board,
is this the sort of thing where someone can get onto their Internet connection
and type in something they would like to post and it will go straight onto the
channel or is there some sort of monitoring or screening of what is going to be
6680 MS McLAUGHLIN: It will go into our media
centre for review by our program manager and possibly by our board.
6681 MS ASSHETON-SMITH: That actually comes to my
6682 The advisory board. You have indicated
"It will determine, and in some cases develop, the programming content that
will be carried on the Access
6683 Does this mean that they monitor the content
on both the broadcast channel and the Internet site as well? Is this what they
6684 MS McLAUGHLIN: These are the guidelines for
the kind of content that the channel and the company wants to be associated with
in recognition of the cable guidelines. So it is the two functions: to make sure
that the content is appropriate to the community, to the company; and then also
reflects the community channel.
6685 MS ASSHETON-SMITH: How do you determine who
sits on the board? How are they selected, the board members?
6686 MS McLAUGHLIN: How do we
6687 MS ASSHETON-SMITH: Yes. How do you select
your board members to sit on the SkyChannel advisory --
6688 MS McLAUGHLIN: Our goal is to get broad
representation from the community with a focus area on two particular aspects:
one is lifelong learning, and the other is new media content.
6689 MS ASSHETON-SMITH: Okay.
6690 How many members do you anticipate? Are there
plans for a set number of board members or would this fluctuate depending on the
6691 MS McLAUGHLIN: We anticipate between five and
6692 MS ASSHETON-SMITH: You indicated there will
be guidelines. Have you prepared any of these guidelines for the advisory board
6693 MS McLAUGHLIN: The guidelines will be
determined -- it's a governance framework, and that will probably be the
first task of the board and our program co-ordinator. We have pulled together
some material which we are now reviewing with our proposed members in draft
6694 MS ASSHETON-SMITH: Okay. But you don't have
the framework finalized at this point?
6695 MS McLAUGHLIN: No, we don't have it finalized
at this time.
6696 MS ASSHETON-SMITH: Okay. A couple of more
questions along these lines as well.
6697 You indicated that 2 per cent of the revenues
would go to developing content and that there would be a person that would be
involved with the channel on top of that. Does that mean that you won't be
counting any administrative expenses towards the 2 per cent, that it will
be purely allocated to the production of programming. Is that
6698 MR. CRAIG: That's correct.
6699 MS ASSHETON-SMITH: Finally, just to confirm,
if the Commission determined that the proposal for local expression was not
appropriate, can you confirm that the full 5 per cent, then, would go to the
Canadian Television Fund?
6700 MR. CRAIG: Yes, it would.
6701 MS ASSHETON-SMITH: And you would accept that
as a condition of licence?
6702 MR. CRAIG: Yes, we would.
6703 MS ASSHETON-SMITH: Thank you very much. Those
are all my questions.
6704 CHAIRPERSON OF THE COMMISSION: Thank you very
much. Do you wish to say something in conclusion?
6705 MR. CRAIG: First of all, I would like to
thank you for your time.
6706 We would love to be here. We know this
business very well. I think that we know and could set up a network faster than
anybody else. We hope we can get the licence.
6707 Thank you.
6708 CHAIRPERSON OF THE COMMISSION: Thank you very
much for your patience. I'm sorry I didn't go into the details of what you
brought as equipment.
--- Laughter / Rires
6709 CHAIRPERSON OF THE COMMISSION: We will take a
15-minute break and we will be back. Thank you.
--- Recess at 1630 / Suspension à 1630
--- Upon resuming at 1645 / Reprise à 1645
6710 CHAIRPERSON OF THE COMMISSION: Madam
Secretary, would you please introduce our next applicant.
6711 MS VOGEL: Thank you, Madam
6712 This application is by LOOK Communications
Inc. The applicant is requesting a broadcasting licence for a radiocommunication
distribution undertaking to serve Victoria, Vancouver and the lower mainland,
Abbotsford, Chilliwack, Kamloops, Vernon, Kelowna and Penticton, British
6713 The applicant proposes to transmit services
using a digital multipoint distribution system.
6714 Please go ahead whenever you are ready.
PRESENTATION / PRÉSENTATION
6715 MR. COLBRAN: Madame la Présidente,
Commissioners, ladies and gentlemen.
6716 LOOK Communications is delighted to have this
opportunity to present its application for an MDS distribution undertaking
licence for British Columbia.
6717 My name is Scott Colbran and I am a Director
and Chairman of the Programming Committee of LOOK Communications.
6718 I would like to introduce one of my fellow
directors present with us today in the front row of the audience, Mr. Michael
Cytrynbaum, who is Chairman of LOOK Communications and a Vancouver
6719 It is my pleasure to also introduce the LOOK
Communications panel to you today.
6720 Beside me to my right are: David Parkes,
President and Chief Executive Officer; Tracey Pearce, legal counsel; and,
Mansell Nelson, Vice President for British Columbia.
6721 Seated in the second row from your left are:
Paul Lamontagne, Senior Vice President, Television Services and Regulatory
Affairs; Carolyn Christodoulou, Vice President, Customer Care; Gary Kawaguchi,
Senior Vice President, Sales, Marketing and Customer Care; Martin Abel, Vice
President, Finance; and, Ralph von Eppinghoven, Vice President,
6722 At this time, we are ready to start our
presentation and I would like to hand it over to our President, David
6724 MR. PARKES: Thank you, Scott.
6725 Madame la Présidente,
6726 We appear before you today with the firm
conviction that LOOK Communications is the best applicant to provide consumers
in British Columbia with a superior alternative to cable and DTH
6727 I have been involved in the
telecommunications industry for over 15 years, and I have never been so excited
about the future -- a future where all Canadians benefit from greater
productivity and the better quality of life which will result from the growth of
broadband services to the home.
6728 Our company, born from the merger last fall
of LOOK TV, Canada's leading MDS operator, and I.D. Internet Direct, Canada's
number one independent Internet service provide, is uniquely positioned to
become this country's leading wireless broadband carrier to the home and ensure
that Canadians enjoy the true benefits of competition.
6729 There are three critical components to
realizing these objectives:
6730 Number one, creating a sustainable third
force to compete against national cable, DTH and telephone companies.
6731 Number two, providing a powerful service
offering that can compete head-to-head for customers
6732 And, number three, having unrivalled
experience in providing MDS services in highly competitive Canadian
6733 Let me elaborate on these three
6734 First, LOOK Communications must pursue its
growth strategy across Canada. B.C. is and will remain an integral part of
LOOK's plans. In fact, we recently acquired another Internet company in B.C.
with over 18,000 customers bringing our current client base in the province to
well over 50,000.
6735 As recent events have shown, cable companies
are getting bigger, more powerful, more national. They are involved in all areas
of the communications industry: broadcast services, high-speed Internet and
telephony. Likewise, Canadian DTH companies are national in scope and have
powerful owners with deep pockets.
6736 To be a viable competitor in this arena,
strong bundled packages are necessary. LOOK intends to offer highly responsive
customer services that include: digital television, high-speed and dial-up
Internet access, IP telephony, and a family of web-based and other interactive
6737 To compete against such powerful national
competitors, a strong level of financial backing is also required. LOOK
possesses such committed shareholder support.
6738 Number two, we have designed a service
offering that will compete head-to-head for customers against our powerful and
6739 Our LOOK model of choice, where a customer
may design their own discretionary specialty packages, is based on significant
market research and experience. It is the first of its kind in Canada and a
major competitive tool.
6740 Our expansive channel capacity will ensure a
dynamic programming offering both now and in the future.
6741 LOOK's coverage area in B.C. is extensive and
our network design ensures a quality digital signal throughout our proposed
6742 Finally, our unparalleled commitment to
customer care will ensure a level of service available nowhere else.
6743 Number three, LOOK has unrivalled experience
in providing MDS services.
6744 Our current systems operate in some of
Canada's largest markets. We have constructed a highly reliable system
architecture in some of the most difficult MDS terrain in Canada.
6745 Our management team has years of experience
in this industry.
6746 We built and rapidly deployed MDS service in
both our existing systems. Our commitment to launch service in British Columbia
within six months of receiving a licence is based on this experience.
6747 Very simply, we understand what it takes to
build and operate this kind of network, and provide strong and sustainable
competition in this environment.
6748 Today, with a national network of 60
transmission sites and points-of-presence in British Columbia, Alberta,
Manitoba, Ontario and Quebec, and over 175,000 Internet and digital television
customers, LOOK is already providing Canadians with a high-quality entertainment
and information offering. However, our application for B.C. is a vital component
for LOOK to become this country's leading wireless broadband carrier to the home
and ensure that Canadians enjoy the true benefits of competition.
6749 My colleagues will now provide you with an
overview of our application in their respective fields.
6750 To begin, Ralph von Eppinghoven will discuss
LOOK's coverage plan.
6751 MR. von EPPINGHOVEN: Thanks,
6752 LOOK's objective is not only to provide vast
coverage in B.C., but also to ensure rapid deployment and an infrastructure that
will allow LOOK to provide the highest quality of service and to compete
effectively with cable and DTH operators.
6753 First, LOOK will build a single network
programming centre for B.C. and construct nine broadcast sites in the lower
mainland, Vancouver Island, B.C. interior and Okanagan Valley, all linked by
highly reliable fibre optic connections.
6754 Second, our network will reach over 1.2
million households with a robust digital signal. This represents 84 per cent of
total B.C. households and encompasses over 110,000 homes not passed by
6755 Third, we will use existing towers and
infrastructure wherever possible. This allows rapid deployment and is friendly
to the environment and the aesthetics of the landscape.
6756 Fourth, our network programming centre is
designed for over 200 TV and audio channel capacity. We maximize our capacity
using advanced digital compression equipment and statistical multiplexing
6757 And, finally, our insertion sites for local
signals in the B.C. interior and Okanagan Valley will allow LOOK to carry all
priority channels and a wide selection of Canadian and foreign
6758 Gary Kawaguchi will now provide some details
of LOOK's marketing and sales strategy.
6759 MR. KAWAGUCHI: Thank you, Ralph.
6760 LOOK is confident in our ability to hit the
ground running in British Columbia with a comprehensive marketing and sales
strategy. Our objective is to have over 153,000 customers by the end of our
6761 The study we commissioned from the Angus Reid
group last fall provided extremely encouraging feedback from customers in
British Columbia to our core brand positioning. We believe the LOOK brand will
become a national communications force.
6762 The repositioning of Internet Direct's
services to the LOOK brand here in British Columbia will enable us to get a
quick start in this market. We are all familiar with the historical cable
practices that have upset many consumers here in British Columbia. Our research
shows that a large percentage are very interested in switching.
6763 To really flourish in the B.C. marketplace,
LOOK's programming and packaging strategy will be absolutely critical. In
response to our consumer research, LOOK intends to introduce to British Columbia
our signature true discretionary choice. We offer more flexibility in channel
selection than any other digital operator in Canada. British Columbians will no
longer have to pay for what they don't watch, they will only pay for what they
do, subject of course to distribution and linkage rules. This, we believe, is
true customized TV.
6764 In order to maximize marketing dollars and
maintain reasonable customer acquisition costs, LOOK will use a variety of
distribution strategies, many of which are already in use in our television and
6765 LOOK's most powerful sales tool is our
30-minute infomercial. Frankly, television is the ideal medium to sell a new
digital TV offering. Let me show you why our infomercials are so effective at
lighting up our phones and at the same time building greater awareness for the
--- Audiovisual clip / Clip audiovisuel
6766 MR. KAWAGUCHI: The multiple dwelling unit or
MDU marketplace is also critical. MDU's represent over 30 per cent of the
customers in our proposed B.C. service area, and we are confident that our
marketing initiatives can win over a significant share of these households. This
will require substantial capital to gain access, wire the buildings and finance
our sales and marketing efforts. This is a key core competency of the LOOK
6767 As the Commission knows, LOOK has been very
active in advocating change and reshaping the competitive practices of cable
companies, particularly in the MDU marketplace. We believe that consumers in
MDU's should enjoy the same overall benefits of competition.
6768 In order to compete effectively in all
markets, it is increasingly important for service providers to bundle different
products together. Today, consumers demand that digital television and
high-speed Internet access be bundled, and soon they will expect other
value-added services as well. Our recent marketing study suggests that the
appeal of a bundled service offering is now as high as 85 per cent. We are ready
for a fight with cable and are well positioned to pursue a bundling
6769 I would now turn it over to Carolyn
Christodoulou to talk a bit about our commitment to customer care.
6770 MS CHRISTODOULOU: Thank you, Gary.
6771 LOOK prides itself on providing superior
customer care. In our plan, customer satisfaction is a key differentiating
factor in a sector notorious for a poor customer service record.
6772 Our approach in British Columbia will be to
work locally but think globally. The staffing and training of qualified customer
care representatives and certified technicians will ensure that the customer
experience from installation to inquiry is enjoyable. We intend to provide
British Columbians with an unparalleled customer approach.
6773 While our technology will get us there, our
customer focus will keep us there. In fact, if a customer is not fully satisfied
within the first 60 days of subscribing to the LOOK service, we will refund
their installation fee.
6774 Let me show you what our customers have to
--- Audiovisual clip / Clip audiovisuel
6775 MS CHRISTODOULOU: Mansell Nelson will now
outline our programming strategy, community expression initiative and Canadian
6776 MR. NELSON: Thanks, Carolyn.
6777 LOOK proposes an extensive programming
line-up that will allow us to differentiate ourselves from the competition. As a
Vancouverite, I have seen the significant changes to the community over the past
dozen years and I believe our proposal reflects the constantly evolving
demographics of the province.
6778 As Gary outlined, LOOK is a company that
prides itself on offering true end-user choice. A company that fails to offer a
large channel line-up essentially limits customer choice. That is why LOOK will
launch with 169 television/audio channels including a wide selection of local,
specialty, pay, pay-per-view, and digital pay audio services.
6779 All our customers will have access to our
unique NaviLOOK multilingual interactive programming guide that includes
parental control functions, search by genre, seven-day listing, impulse
pay-per-view, one-touch recording and self-diagnostics.
6780 We ensure that our channels reflect the
tremendous cultural diversity of British Columbia. For this reason, LOOK chose
to carry seven multicultural services.
6781 Finally, LOOK seeks to develop a partnership
relationship with all local broadcasters in B.C. and we are committed to meeting
all our obligations with respect to substitution and deletion.
6782 LOOK is committed to the continued health and
development of the Canadian broadcast system and eager to create value in the
communities we serve. We intend to contribute over $16 million to local
expression and the development of Canadian programming.
6783 LOOK wants to play an active role in social
and economic change in the community. For this reason, we are very excited to
introduce our innovative InfoLOOK community expression channel to British
Columbia. This channel is designed to allow and encourage open access to a
channel received by all LOOK customers. Simply, this is the ultimate in
community access encompassing: community-created video segments; community
Internet messaging; community newspaper story input; and, public service
6784 LOOK plans to grow the amount of acquired and
produced video programming on InfoLOOK as our service becomes established, and
this is only the beginning. In the future, users will be able to send us their
own video content directly over the net.
6785 Let me show you the enthusiastic and
innovative approach we will bring to our InfoLOOK channel in B.C.
--- Audiovisual clip / Clip audiovisuel
6786 MR. NELSON: Already, InfoLOOK has found
supporters in the province such as the Surrey Public Library, the Technical
University of B.C. and the Vancouver Community Network. These organizations have
expressed great interest in working with LOOK to further enrich this
6787 My colleague Martin Abel will now discuss our
6788 MR. ABEL: Thank you, Mansell.
6789 In preparing the financial projections for
our plan, we have drawn upon our knowledge of the local market, the results of
the Angus Reid survey and our own operating experience. The results reflect a
realistic and achievable business plan.
6790 Let me assure the Commission that we are an
entrepreneurial company with shareholders that expect a return on their
investment. As an experienced MDS operator, we know what it takes to: first,
build a digital MDS network in B.C. that will provide high-quality and reliable
services; and, second, to compete effectively with incumbent cable operators and
6791 We are committed to building out our network
in B.C. and funding operations in order to meet our business plan. Moreover,
LOOK has put in place the required financing to do so and we are extremely
focused on achieving our objectives.
6792 I would like to ask Paul Lamontagne to say a
few words about LOOK's success in our other regions and our future development
6794 MR. LAMONTAGNE: Merci, Martin.
6795 LOOK's vision has always been to provide
innovative and competitively priced MDS services across the country. Currently,
our network covers 4.2 million households.
6796 We promised the Commission in similar
hearings that we were committed to introducing competition in the field of
television distribution and I am pleased to report that we have.
6797 While only in our second full-year of
operation we now have over 40,000 television customers and penetration rates
exceeding 7 per cent in some of our markets.
6798 We have over 1,000 apartment buildings under
contract, representing over 100,000 suites.
6799 We have launched our service in major markets
including Toronto, Montreal, London, Ottawa-Hull, Trois-Riviéres, Hamilton and
Quebec City; and we offer a high-speed Internet service in Ontario and will
shortly launch a similar one in Quebec.
6800 1999 was a start-up year for LOOK in Ontario
and Quebec. We anticipate that the year 2000 will be a breakout year.
6801 As the Commission knows, we recently applied
for the MCS licence here in B.C. and in all other regions of Canada in
partnership with Microcell Telecom. Our vision is to leverage our own network to
provide Canadians with more broadcasting services, quicker Internet access and a
suite of IP services, all through a state-of-the-art wireless
6802 Moreover, we launched late last year
technical trials Milton, Ontario using a developmental licence from Industry
Canada to demonstrate enhanced MCS technology to deliver bandwidth intensive
6804 MR. PARKES: Thank you, Paul.
6805 Madame la Présidente and Commissioners, I
would like to summarize once again the three critical components to our
6806 First, create a sustainable third force to
compete against national cable/DTH and telephone companies. B.C. is a necessary
part of this strategy.
6807 Second, provide a powerful service offering
that can compete head on for customers.
6808 And, third, LOOK has unrivalled experience in
providing MDS services in the most highly competitive markets in
6809 To conclude, I would like to thank the more
than 2,800 organizations, individuals and associations in B.C. that supported
our application. Perhaps these supporters see LOOK as a company of the future,
as I do. Frankly, I am proud to be associated with a team of Canadians who are
undertaking this vision; I am proud to a member of such a dynamic organization
dedicated to bringing Canadians true competition in broadcast distribution; and,
I am proud to lead a company devoted above all to serving the needs of its
6810 LOOK Communications stands before you today
as a company of the future. Powered by our people, enabled by our technology and
embraced by our customers. Our vision is shared by our shareholders as well as
the 2,800 British Columbians who endorsed our proposal.
6811 Madame la Présidente, Commissioners, thank
you again for this opportunity to present LOOK's application. We would be happy
to answer your questions.
6812 CHAIRPERSON OF THE COMMISSION: Thank you very
6813 I would ask Commissioner Grauer to be
addressing the questions of the Commission.
6814 COMMISSIONER GRAUER: Thank you. Welcome. I
think I need space.
6815 CHAIRPERSON OF THE COMMISSION: Okay.
6816 COMMISSIONER GRAUER: Spread out everybody.
Apparently I need a lot of room.
--- Laughter / Rires
6817 COMMISSIONER LANGFORD: I'm doing my best for
you, Cindy, but --
6818 COMMISSIONER GRAUER: We don't want to lose
6819 COMMISSIONER LANGFORD: That's not what you
--- Laughter / Rires
6820 COMMISSIONER GRAUER: My questions will be
much along the lines of the Chair to the earlier applicant.
6821 I wonder if we could start with --
perhaps you could give us your feedback and perspective on the experience of the
last 18 months of operating in Ontario and Quebec, in particular, how you are
doing with respect to your original projections, what percentage have you met,
what have the challenges been, things maybe you didn't expect, and how you have
6822 MR. PARKES: Thank you.
6823 Let me first say that we are pleased to be
asked about our experience because that is one of the three things that we think
is -- one of the great strengths that we bring to this application. We have
learned many lessons during that time, and they fall in two or three key
categories. Probably the most important of those is the category of building the
business and marketing and sales.
6824 Many of us have a lot of deep experience in
other very competitive industries prior to the MDS experience. It is that
experience combined with what we have learned since starting our business in the
fall of 1998 in Ontario that we bring to this situation today.
6825 For example, we did find that customer
sign-ups and subscriber growth were indeed slower than was originally
forecasted. It took a number of months of experimentation and trial and error to
determine what we have now come forward with as our strategy to attack this
marketplace. Really it is a multifaceted strategy.
6826 You see, we believe very strongly that, like
most other competitive marketplaces, a strategy that was based on a single
attribute would be weak. What I mean by that is that you can't depend simply on
price nor can you depend simply on the quality of your product, nor can you
depend simply on having superior customer service.
6827 In fact, you have to bundle all of these
attributes together, a lesson that many of us have learned for many, many years
to be successful. This marketplace is a prime example of that.
6828 In the area of selling, for example, by the
fall of 1999, this company had developed a multichannel sales organization. In
its earlier months it was dependent upon a single source of sales, that being
direct marketing generating leads to an incoming call centre. That was working
but not generating the volumes needed.
6829 Today we have a number of other channels. We
have, for example, a relationship with a direct marketing firm, Excel, that is
selling for us on a direct sales basis. We have retail distribution, and we have
learned also to focus and develop a specific selling program for the MDU
6830 So this is not a simple undertaking
whatsoever, but one of complexity of number of different sales channels being
active all at the same time.
6831 I'm happy to tell you that if we look at our
current sales rates and the current growth in those rates we anticipate being
able to recover in our existing licensed areas the initial shortfall that we
have experienced. We anticipate those licensed areas as being very successful.
That is based on how we are doing today and how we are expanding that particular
6832 I will say again, it is a matter first of all
of having a superior product. We have built a network that delivers the best
digital television quality that is available anywhere. It is a very reliable
network and it has been constructed to the highest standards.
6833 Having accomplished a superior product, we
then have taken the value proposition to our customers through many sales
channels. I emphasize the word "value" because value is much more than price.
Value is the combination of all the other things that we have discussed: the
quality, the choice, the customer support, et cetera.
6834 If I hesitate and talk about choice for a
moment, we are very proud of the fact that we have packaged our service in a way
that gives Canadians the opportunity to make their own personal choices. In that
way, we have found that we have very happy customers at the end of the day. So
we know that we have the winning combination whenever you are marketing a
product that has happy customers, has a reliable service offering, and is well
accepted in the marketplace. Now, it is just a matter of your company being well
financed and executing a carefully planned marketing program to be
6835 COMMISSIONER GRAUER: So I take it the lessons
you have learned were that it is a complex number of factors and you feel you
have addressed them adequately and you are recovering your projected market
shares. Do I understand you correctly?
6836 MR. PARKES: We feel that we have a sales and
marketing plan today under way. We won't rest on our laurels. We will continue
to try and prove it, but we think that we have found the right formula to
penetrate the markets much more quickly than was the case up until the fall of
1999, and we are today experiencing numbers to back that up.
6837 We have learned other lessons. We have
learned the lessons of operating in major cities. The complexity of providing
service to a city like Vancouver which has got the challenges of terrain
probably more than any other place in Canada. We have undergone those and those
have not been severe problems for our company and its start-up. Our network was
very carefully planned, very carefully engineered. We used the top quality
components to that network, as I stated, and have delivered the service quality
from the beginning.
6838 Those are not lessons easily learned, but the
result of a lot of hard work and some very expert engineering.
6839 COMMISSIONER GRAUER: I take it if I was to
ask you what your greatest challenge was, it is a number of different things. It
sounds like there is not one thing that -- or is there?
6840 MR. PARKES: I think if you were to stand back
and look at the company's performance to date, the greatest challenge would
simply be the growth in the customer base. I would say that we have fallen
behind our projections in that area, but as I have said clearly, now we are on
the right track to meeting those projections, which allows us to confidently
project how we can go forward here in British Columbia.
6841 COMMISSIONER GRAUER: I was very interested in
your approach with respect to "green fields", as you call them, non-cabled
households. What has your success been with this in Ontario and why would they
be prime targets -- meaning that I would think that people who didn't have
cable maybe aren't interested in television, but maybe that is
6842 MR. PARKES: The point here is that there are
cable-ready neighbourhoods and there are other neighbourhoods that are not
cable-ready, and we can service both of those. But I think what I would like to
do is ask our marketing expert, Gary Kawaguchi, to talk more about that
6844 MR. KAWAGUCHI: Thanks, David.
6845 When we first started we started generating
about 25 per cent of our customers from non-cabled areas --
6846 COMMISSIONER GRAUER: You know what? Maybe I
6847 I thought these referred to cabled areas but
households that didn't take cable, not non-cabled. Is green fields
6848 MR. KAWAGUCHI: We categorize "green fields" a
couple of ways. One, areas that we already know are a perfect line of sight for
us. So we say this new subdivision going up here is for us a marketplace that is
just ripe for a line-of-sight technology. We categorize that as "green
6849 There are also markets that are uncabled that
we do have in our coverage area and we feel very comfortable going after
6850 I'm not sure if that is --
6851 COMMISSIONER GRAUER: I think I misunderstood
when I read it. I thought it was non-cabled households in areas that were
cabled. Right? In other words -- do you know what I'm saying -- people
who didn't subscribe when they were passed.
6852 MR. PARKES: I might say that that is a
natural conclusion to draw when you observe the market research we did that
6853 COMMISSIONER GRAUER: I'm really glad you
6854 MR. PARKES: -- the number of people and
families that are indeed cable subscribers today but are unhappy with that
situation and anxious to make a change. So I think your conclusion is a natural
one. But we do build our market projections from different sources.
6855 But it is very important to note that in this
marketplace our research indicates that there is a very large proportion of
people who will welcome LOOK's service and who are prepared to buy our service,
and who have made that decision understanding the pricing package that we would
6856 Perhaps, Gary, you would like to expand on
6857 MR. KAWAGUCHI: In the marketplace we started
off by looking at it and saying 41 per cent and greater of the Vancouver lower
mainland marketplace is currently dissatisfied with the value that they get from
cable. With that as a start point, we had almost a 40 per cent interest level in
our wireless concept. So we think that is a tremendous number for a company that
has no brand awareness here in this marketplace. So that is a very encouraging
start point for us.
6859 MR. PARKES: I hope that covers your
6860 COMMISSIONER GRAUER: Yes. Thanks.
6861 One of the other areas that we were
interested in is now that cable is rolling out digital are you finding
this -- do you still feel you have an advantage? How much tougher is the
competition with the cable rollout of digital?
6862 MR. PARKES: Again, I will refer to our expert
team. But let me say first of all that we are true believers in the power of the
concept of true choice for our customers. The fact that we are offering and we
are amongst the first to offer the high quality digital services is really only
one of our competitive advantages. You add to that the other things that we have
discussed, but most notably the chance to build your own selection of specialty
channels, the fact that you are pay-per-view ready as a basic subscriber without
buying any additional hardware, and the fact that we include in the basic
package 30 audio channels as well. We think that we have a very, very
competitive package. Again, the feedback from our customers is very much that
6863 So, Gary, perhaps you could add to
6864 MR. KAWAGUCHI: Sure, David.
6865 There is an emerging revolution happening in
digital. I think the awareness is starting to grow now. When digital is offered
by cable, it is only going to help increase that awareness level and it is
simply going to make it easier for us to go and continue to market.
6866 I think, that being the case, for us to
compete, really what we have to be able to do is say: What is the overall value
equation for a customer? How do they pick and choose a service provider? There
are five key measures for that.
6867 It is not just price, although price is a key
component. It is the quality of the service that we provide; it is the quantity
of the channels that we offer; and it is satisfying a basic human need, the
ability to choose, the ability to choose what you really want to pay for;
finally, the reputational value of the company that is providing this, the brand
value of that company. As David said, we think we have the experience here, the
management team that has the experience building brands in other categories, and
we can build this LOOK brand to provide that kind of reputational value to give
customers the confidence in coming to look.
6868 COMMISSIONER GRAUER: So I take it that you
see the digital revolution or the rolling out of digital by cable as really
being an advantage, that it will just bring the whole world to digital, and you,
with your unique strategy, will get your piece?
6869 MR. KAWAGUCHI: David, if I could?
6870 When Rogers or the cable companies roll out
their digital offering and they charge $10.95 for a set top box on top of the
price of the basic analog cable package, that gives us a 43 per cent price
advantage. Now, I don't want to dwell on pricing alone, because as I said
before, pricing is not the only way in which we are going to compete, but
clearly they are giving us an opportunity to position ourselves in the
marketplace, again, satisfying one of those key components to value,
6871 COMMISSIONER GRAUER: Thank you.
6872 I'm interested in your MUDs or MDUs or
whatever the terminology might be.
6873 COMMISSIONER CRAM: It's MUDs,
6874 COMMISSIONER GRAUER: MUDs, whatever. Your
strategy with respect to MDUs, MUDs, and your success rates and just how
important they are to you. I think, particularly, does it bring down the price
that an MDU -- per subscriber? How does the technology work?
6875 MR. PARKES: It is a very important part of
our market and it is certainly worth some conversation. In fact, our forecasts
for British Columbia over the course of the licence term, half, fully half of
the customers would be located in MDUs.
6876 The strategy overall is complex, but if we
start with how we are selling today, we have identified in our existing markets
a team of professional salespeople who do nothing but call on landlords and
building owners and try and negotiate competitive contracts for LOOK. In other
words, what we are trying to do is become one of at least two players allowed to
sell to the occupants of the building.
6877 We know that many of these buildings have
been "tied up" by the cable companies prior to this activity and we assume that
those contracts will only become available to us gradually over time as they
expire. But to give you some numbers, just as a measure of how successful we
have been so far, at the present time we have contracts with over a thousand
buildings in our existing markets, and that represents more than 100,000
6878 The really interesting part of this is back
to the part of our strategy that I was explaining before that is working so much
better in just the recent months. In the first two months of this year fully 30
per cent of that number of units have come under contract. So it took us more
than a year to get the first 70,000 and less than two months to get the next
30,000. And we see even more of that activity coming along. I believe it is a
result of many factors, part of which is becoming more known in the marketplace,
but mostly the fact that we have a team that is concentrating on just that
6879 We then have a strategy, once the contract is
signed and the building is equipped, of going in with a different team that
specializes in actually selling our service to the tenants in the building. I
will emphasize we are not trying to sign exclusive contracts as has been the
case in the past with our competitors. We are trying to bring choice to
customers and MDUs. I think any of us that have personal experience of knowing
people that are in those situations, they really want choice and it is a very,
very prime market for us.
6880 Perhaps to speak to the details of the
revenue and pricing side, again if I could ask Gary to follow up on
6881 MR. KAWAGUCHI: Thanks, David.
6882 As David commented on earlier, this is a
marketplace that we knew very little about when we started. It was actually
Scott Colbran that hired our first MDU salesperson very early in our licensed
term. But it wasn't until the summer of this past year that we really realized
what we were sitting on and we expanded the team. Now it is 20
6883 At the end of September, we had 48,000 units
under contract. Most of that came during the summer months, because we really
started to go after this marketplace in the second half of last year. So our
success right now is just ramping this way. We think we have finally figured out
how to go after that marketplace.
6884 Now, the marketplace is getting extremely
competitive right now because we have the DTH players who previously had
technical reasons why they couldn't go after that business and they are now
starting to come after it. So what we found, we found ourselves in competition
with now three players -- now there are three different sources. The DTH
guys have taken the price of entry quickly very close to what the competitive
floor would be. So the cost of entry to the building owner has been driven by
6885 I would say another true driver in this whole
MDU marketplace is, in the last little while we are finding marginally large
building owners with consolidation happening, first in the regions and then
expanding across the country, and we are now starting to compete with DTH and
cable for building contracts that expand beyond our current licence geography.
That is a phenomenon that is going to continue as there is consolidation in the
6886 The detail of the business. It is very, very
competitive to gain access. Once you gain access there is a cost to go and wire
the building, so we have to go and construct the building. Once we have
constructed the building, now we have an investment there. The only way we can
get the investment back is to say -- that local community, that building,
we have to be better than anybody else at marketing to that building. We have to
make it so exciting for the residents of that building that they are going to
want to come to LOOK.
6887 So one of the key things that we have done is
we have said -- I have heard comments about installation fees before. We
have said in a building that we have put such an investment into there is no
installation charge for an MDU customer. So we have gone after that and said we
have that investment. We have to have a penetration in that building as quick as
6888 The other thing that we have built as a key
core competency is, again, if we have to build that level of excitement from a
marketing standpoint, we have said we better be able to build a marketing team
that can go into a building and do everything from lobby displays, direct mail,
door to door, contests. We have to be in a position to excite the people in the
building to come to our service, and all of that takes money.
6889 COMMISSIONER GRAUER: Thank you.
6890 I actually had a lot of questions on this,
but I think --
6891 One thing I would appreciate hearing a bit
about is we talked about -- you, rather, in your application, 32 per cent
of all households -- households and MDUs represent 32 per cent of all
households. Is it your understanding of this market that up to 40 per cent of
the buildings are not under long-term cable agreements as the owners contemplate
competition that is here? I'm wondering how you came to this conclusion or
6892 Perhaps, put another way, is this a more
fertile market for you than you have found in Ontario?
6893 MR. PARKES: Gary.
6894 MR. KAWAGUCHI: The 40 per cent number comes
from the experience that we have had in our marketplace. Let me explain
6895 Typically building contracts were signed for
five years, so that meant 20 per cent were coming up for renewal every year.
There was generally a lag because there was no real reason for a building owner
to want to sign, so there was always this sort of bigger than 20 per cent
marketplace to sign on any given year.
6896 We have hired some key people from the cable
business who have validated that. We have gone to the marketplace and we have
found, by audit, which buildings did not have a contract. So we felt 40 per
cent of the marketplace by experience in Ontario was uncontracted and we feel
that about 40 per cent of the marketplace here in Vancouver is also currently
6897 COMMISSIONER GRAUER: One other question with
respect to an MDU subscriber. Are your capital costs any less when you do the
wiring of the building and install the equipment than they would be with a
single family home?
6898 MR. PARKES: When we install an MDU building,
we put a single antenna on the roof, run cable to a junction point with the
already installed cable in the building. So what that means is that our cost to
equip each unit in that building is substantially lower than it would be to
equip a single family unit.
6899 To give you an example, to be specific, if we
talked about a building that had, say, 100 units, the total cost to equip per
door would probably be about $75. So that is substantially lower than the cost
to equip a single family unit and that is why, as Gary said, in that particular
case, we don't charge an installation fee to those customers.
6900 COMMISSIONER GRAUER: I see.
6901 In non-cabled areas where your only
competition is DTH, what is your success rate there?
6902 MR. PARKES: Gary, again, has those
6903 MR. KAWAGUCHI: Again, where we are competing
with DTH we think longer term in this marketplace we are going to be about a 5
to 7 per cent share in the non-cabled markets. Currently, when we found
ourselves going into the marketplace, I said 25 per cent of our customers would
come in from the non-cabled areas. We are finding great success actually
competing against DTH primarily because of our packaging and pricing model. At
the end of the day the customer doesn't have to buy the equipment and
have -- there is the equipment cost and a higher installation cost versus
what we have. So we were out selling DTH in our retail channels, for example,
two to one.
6904 Longer term, I think as the marketplace
matures and as the DTH guys continue to spend what they are spending going after
the marketplace, the projections from the analysts are they will scoop anywhere
to about 80 to 85 per cent of the non-cabled subscriptions.
6905 COMMISSIONER GRAUER: Is this partly because
of the dish? If you talk non-subscriber, non-cabled areas overall, you know, you
require a line of sight and a sort of closer geographic location of the
subscriber to your transmitter. Is that why?
6906 You don't understand what I'm saying, do
6907 MR. KAWAGUCHI: I think I do. I think the
question is: Is our success rate there lower because we have a technical gap, a
technical barrier to go over?
6908 COMMISSIONER GRAUER: Well put.
6909 MR. KAWAGUCHI: The answer is yes.
6910 COMMISSIONER GRAUER: Thank you. It is getting
6911 MR. KAWAGUCHI: Yes.
6912 DTH can penetrate markets that we cannot,
particularly in cottage country.
6913 COMMISSIONER GRAUER: Right.
6914 What I would now like to talk about is
product bundling on the Internet and your relationship or your merger with
Internet Direct. I know they were, I think, a B.C.-based company, if I'm
correct, were they or not?
6915 MR. PARKES: That's correct. Actually,
Internet Direct at the time of the merger with the former LOOK communications
was a company that had grown based on a Vancouver-based Internet company called
Internet Direct that acquired a Toronto-based company that was called I.D.
Internet Direct. But the common name was a pure coincidence. When I asked the
principals how they got together, they said they met through a trademark dispute
and decided to not fight but get together.
6916 So the roots of Internet Direct -- which
has grown through what we call an aggregation policy where we look for other
Internet companies that we can purchase and add to the package -- up until
October 31st of last year when the merger took place were indeed right here in
6917 COMMISSIONER GRAUER: Can you just talk to me
a bit about the scope of their business?
6918 MR. PARKES: LOOK Communications is a company
that was formed by merging these two companies to create a scope on a combined
basis which is really what forms the basis of our vision. Let me explain
6919 We started out with two organizations that
were operating in particular separate marketplaces. The television business
everyone here understands very well. Looking forward to its world of competition
with cable companies, et cetera, they realized they would not be able to be
successful in the long term unless they could offer bundled packages to their
customers. The cable guys were coming at us with bundles from every
6920 On the other hand you had Internet Direct,
which was a very successful, Canada's largest, independent -- meaning we
are not owned by a cable company or telephone company -- Internet service
provider providing approximately 150,000 businesses and homes in Canada with
dial-up Internet access.
6921 The Internet Direct reason to join this
merger and the vision was that a high-speed access capability was necessary for
them to continue to grow in the future. So it was very much like a marriage made
in heaven. These two companies needed each other, and having put them together
into what is now LOOK Communications, we are positioned, we believe, better than
anybody else in Canada to become the leading broadband wireless distributor of
information, of entertainment and virtually anything that in the future will
come over a digital bitstream into the home or into small businesses.
6922 That is our vision. That is how we will
become the third force. That is how we will compete with the Teluses and the
Bell Canadas and the Rogers and the Shaws and the rest, by being able to go to
our customers with very good bundles of service, not just Internet service and
not just television service but telephony service and other home services in the
future, be they security monitoring services, or, as we look forward to the huge
development of home management services that are being put together, all of that
access technology can now be provided on a wireless base. As the world wakes up
to the capabilities of broadband in the Internet world, we will be positioned
better than anybody else to take advantage of that huge shift in the way we all
6923 COMMISSIONER GRAUER: Where do they market
their services now? I mean, they are still operating, aren't they, as Internet
6924 MR. PARKES: We are operating as Internet
Direct while we --
6925 COMMISSIONER GRAUER: I'm sorry.
6926 MR. PARKES: -- consolidate the two
6927 COMMISSIONER GRAUER: I still think of them as
6928 MR. PARKES: And we are in the process right
now of doing things like physically moving the teams into the same building and
starting to take advantage of these ways that we can work together more
effectively. There are many, many examples of that.
6929 Internet Direct operates Internet access
services in British Columbia, Alberta, both Prairie provinces, Ontario and
Quebec. We have plans to expand to the rest of the country over the next year or
so as opportunities come up. We will do that either through our aggregation
strategy, if we can find a company in a new market that wants to join us, or
through establishing points of presence in those new markets and starting to
6930 That is a very important part of this
company's strategy. We see this company's need to compete. On a country-wide
basis we have to create the scale in order to compete with these big companies
with such deep pockets that we have talked about already. So we have to be
there. It is important for us to be here in British Columbia to be able to keep
our company successful so in turn we can keep offering the competition to
6931 COMMISSIONER GRAUER: Can you tell me about
the service you are offering now, your Internet service, and how it works? Does
it require a telephone hook-up? What is your timetable for wireless?
6932 MR. PARKES: Beyond Internet Direct, as it
used to be known, LOOK Communications, as it used to be, introduced a wireless
Internet service last year in southern Ontario. Essentially, what it is is a
high-speed down link with a telephone connection for the uplink. It was marketed
in a very restricted way, more or less to put it out and to establish a
beachhead for our company in the wireless Internet market and at the same time
learn about the customer's appreciation and acceptance of the
6933 The interesting thing, despite the fact this
hybrid product is dependent upon a telephone uplink, is that the customers who
are paying for it love it. If you think about using the Internet when you are
browsing the Web, not all of us want to send large files away, outbound. Some of
us in business do that, but many users of the Internet simply want to access
their e-mail and click on a Web site. When they click on the Web site, then they
wait for the graphics and all the fancy material from the company they are
visiting to come downstream to them. That is where you need the speed, and that
is where we are able to provide the high speed.
6934 So that is the product that we have available
today. We literally stopped selling it last year at somewhere between five and
600 customers and the learning experience has been very worthwhile. We are just
now, just this week, actually, starting to market that product again in southern
Ontario, and we will start to market it in Montreal and the Quebec region and
Ottawa in April.
6935 Now, as to actual two-way wireless, we have,
on a properly licensed test basis from Industry Canada in our headquarters in
Milton, operated very successfully a two-way Internet access service but only
amongst our own family of users. We were allowed that licence again to learn and
to prove the viability of the hardware and the software. Very recently we have
now been given in Ontario, and we expect very soon to receive in Quebec, the
right to use the 2.1 gigahertz uplink band, so we will be able to start offering
a two-way wireless service in the same marketplaces that we are offering the MDS
6936 COMMISSIONER GRAUER: How is that service
priced, the service you are going to start offering again? You are bundling it
and what is --
6937 MR. PARKES: The service price is $34.95 a
month. Any of our products bundled with others will receive a discount on the
total price of the two.
6938 COMMISSIONER GRAUER: Can you tell me about
your telephony plans? You mentioned that earlier.
6939 MR. PARKES: Perhaps one of the things that I
should say to help complete this story as it relates to telephony and other
things is that the important part of our strategy is that we can offer these
various services to our customers in a bundled way. We will have certain
situations we are sure in the future where we will need more than one
alternative way of providing that service. So when we talk about providing
Internet services to our television customers in a bundle, our chosen technology
is wireless. That is our preferred methodology. I have described to you how we
will do it, and we are also of course very hopeful that we will receive some MCS
licences to complete that strategy.
6940 However, at the same time, we will also be
able to provide high-speed access through reselling ADSL services from the
telephone companies and through reselling the cable plant, as has been mandated
by the Commission. So we have alternative strategies in order to provide those
services to our customers.
6941 As it relates to telephony, assuming that we
have some MCS spectrum and that we can deliver two-way Internet access to the
home on that spectrum, we will then be delivering that on a state-of-the-art
wireless IP infrastructure. It will be a relatively simple matter to superimpose
voice, both local and long-distance voice, on that same infrastructure. That
would be our chosen method of providing telephony services.
6942 However, to get to the point of my long
answer, I'm sorry, should that not take place we do have other strategies again
where we could make strategic alliances with other competitive local exchange
carriers or indeed become one ourselves and provide telephony to our customers
through that channel. So, again, a multi-alternative approach to the
marketplace, not assuming anything until it becomes real but with a fallback
positions should they be needed.
6943 COMMISSIONER GRAUER: So do you have any
timetable for that or not at this stage?
6944 MR. PARKES: LOOK's commitment, assuming a
broad licensing again, if I may, is to deploy the major cities within the first
year. I would expect that after that first year we would be in the position to
start physically using that network for other services beyond Internet access,
specifically telephony. I would not expect that we would do both at the same
6945 COMMISSIONER GRAUER: Now I have some
questions on your business plan.
6946 In entering this market before reaching
maturity in your other two markets, is there any risk of overextending
6947 MR. PARKES: Our company is very well
financed. We have prepared in great detail a business plan that spans the next
eight years. We have presented that to our Board of Directors and they have
bought into it 100 per cent. We are in need of very large amounts of capital to
implement that plan over the years, but we are very confident that we will be
able to raise the funds through development of new equity partners, additional
debt, the way that traditionally companies such as ours create their war chest,
if you will, to go forward and implement these plans.
6948 We are very confident. I have spent a great
deal of my time in the investment banking community and I can assure that there
is a tremendous amount of interest in supporting our company.
6949 COMMISSIONER GRAUER: So if you were to
sustain higher than expected cash shortfalls, your investors and bankers
6950 MR. PARKES: It is interesting because in our
business, like any of the other sort of perpetual revenue businesses that I have
been involved with in the wireless business, Cantel or Microcel or Clearnet, all
of these companies the faster they grow the more cash they need. We are no
exception to that because of the high cost of acquiring new
6951 So, actually, our cash needs in the event of
a slowdown would actually be lower with the exception of our initial network
buildouts. But a good deal of the cost of building this company is the cost of
being successful, so being the optimist that I am, I'm hopeful that we will need
even more cash than we have projected.
6952 COMMISSIONER GRAUER: But I wonder, if your
penetration was lower than expected, would you not need to take a look at your
sales and marketing plans and maybe make more investments in that area? Is that
something you have considered? Was that part of your experience in
6953 MR. PARKES: I think we have a very good idea
now of the costs that we will most likely incur in this marketplace. When you
are dealing with projections, these things always have an error factor built
into them, but we do sensitivity analyses on our business plans. Basically what
I mean by that is we say, what if? What if our sales penetration was 20 per
cent less than we think? What if it was 20 per cent more? How can we finance
that? What would we do?
6954 We are pretty confident in the plan that we
have put forward that we will be able to reach it, execute it and finance
6955 COMMISSIONER GRAUER: One of the things, both
in your application and your video, you talked about how successful your
infomercials have been and that you plan to do them here. I must say, I did
wonder where you would do them here, because, you know, we don't have -- I
think you do it on the Toronto Star channel in Toronto and I just wondered
where -- I'm curious about where they might go.
6956 MR. PARKES: We are counting on the Commission
to licence a channel where we can run them. No, I'm just kidding.
--- Laughter / Rires
6957 MR. PARKES: Television advertising will be an
important part of our future. Infomercials themselves are one methodology of
getting there. From experience, basically, what an infomercial is is generally a
very low cost to produce and a low cost to run entry into the television market.
Other ways to go at it are to go the more traditional route of using TV support
in the paid market rather than in the DRTV scheme of things.
6958 As we emerge, as LOOK Communications emerges
as a national force, you will see us using more traditional television
advertising to tell our story and to start to build brand awareness for LOOK all
across Canada and particularly here in British Columbia. So we won't be as
dependent upon infomercials as we would otherwise.
6959 As to the specific deployment of that, I'm
going to defer to our local programming expert. Mansell, can you help us with
6960 MR. NELSON: As far as, I guess, when we get
to the point of wanting to market the service, we would look at -- if we
were going to use an infomercial, for example, we could use conventional
television, and at that point in time there could be access on cable systems as
well. So I don't think when we think of infomercials it necessarily has to be
considered exclusively on a traditional cable channel such as it has been in the
6961 COMMISSIONER GRAUER: Thank you.
6962 If you are successful here you would have
three regional licences. We would be interested in hearing you quantify what if
any synergies you have been able to implement between Ontario and Quebec and
what you might expect to achieve with the B.C. operations?
6963 MR. PARKES: I really need to address the
subject of synergies from the standpoint of LOOK Communications as a whole, so
the company would have, in your scenario, three regional MDS licences and
Internet-based operations in the rest of the country. As such, that would give
us certain advantages that you wouldn't otherwise have.
6964 For example, on the customer care side, we
have talked about an unparalleled commitment. How do you do that? It would be
our plan to create a virtual nationwide call centre approach where we would have
people who would take calls and make calls here in British Columbia but also in
other parts of the country. We would network those call centres together in a
way that you can much more efficiently and effectively provide that level of
service. You can take advantage of the nationwide time differences for
scheduling peaks of activity, for example. That is one example of how we can
take advantage of being larger, if you will, and being active in more areas than
6965 Marketing programs are another. The ability
to use the mass media and offer our products on a nationwide basis will give us
the opportunity to build the LOOK brand. Now, it is true when we run ads in
Alberta we can't advertise local television service, but the build-up of the
awareness of the LOOK brand will be very important to the success of all of our
other sales and marketing campaigns.
6966 No one sales technique works by itself. They
all work because the others exist and that really is all supported with the
foundation of the marketing plan. The foundation of that marketing plan, for
example, might be a national advertising campaign that helped us create equity
in the LOOK brand which would then strengthen the local ad campaign and sales
campaign for LOOK-TV wherever we were.
6967 COMMISSIONER GRAUER: So you would anticipate,
for example, with your call centre operations, it would -- when you talk
about having them in different regions but networked together, is it essentially
one call centre, in other words, that would take calls from everywhere, working
longer hours from east to west? I'm not quite sure.
6968 MR. PARKES: There are many different aspects
to it. The advantages are that we can have --
let me start over again.
6969 The hard part of managing a call centre is
managing the peaks of traffic. If you look at the times of day when people call
or have inquiries, they are organized around certain events, typically if they
are general business office type calls they come in mid afternoon and mid
morning. If they are calls related to pay-per-view activity, many of them come
in late at night. So by being able to use our call centres in different time
zones, we can literally smooth those peaks out.
6970 So rather than have to try and schedule your
people to manage peaks, which means one hour you need a lot of people, the next
hour you don't, which is very inefficient, you can take advantage of the fact
that you have the other centres. Imagine, then, the Vancouver centre being the
place where the first Vancouver calls would go and whatever the size would be.
If it had, let's say, 100 stations in it, the first hundred telephone calls from
western Canada would go there. If there were more, because it is a peak here,
they could automatically be routed to a call centre some other place to handle
that peak, and in reverse.
6971 So that gives us a lot of flexibility and the
ability to offer that really high level of service at a very efficient rate and
6972 COMMISSIONER GRAUER: I understand your
principle. I guess what I am really interested in knowing, because it certainly
is an issue here, has always been an issue here in all kinds of businesses, is
whether, for the most part, understanding there will be times of overflow, you
will be dealing with your local customers here, locally, primarily, or will they
be talking to someone in Toronto who may not understand where they live or
what's happening? Do you know what I'm saying?
6973 MR. PARKES: Absolutely. Now I understand your
6974 COMMISSIONER GRAUER: I'm sorry. I perhaps
could have been more direct.
6975 MR. PARKES: The answer to your question is
absolutely. Yes, we will have an office and a call centre in Vancouver to
support our British Columbia operations. It will support our British Columbia
customers in the Internet business and hopefully in the television business.
That office will also have people that will work on local marketing campaigns.
There will be technicians who will manage our networks. There will be
technicians who plan.
6976 The people on Ralph's team, for example, that
build the network are then here to monitor it. The head-end facility that we are
talking about will be manned by people here in British Columbia who monitor
every channel every minute of every day and in that way ensure the level of our
6977 So we will have all those people on site here
in British Columbia.
6978 The synergies come into play when you think
that there is another team like that in Montreal and another team like that in
Toronto, and so on, and they can work together to support each other. But we
will not abandon one market and try to supply all the services from
6979 COMMISSIONER GRAUER: Yes. It wasn't so much
abandon. I think that there are a lot of businesses who find that to be a good
strategy. I mean, I'm not sure it is, but it is a business decision. I was just
interested in knowing how you would approach it.
6980 MR. PARKES: Well, I have experience with
trying to do it both ways and I'm absolutely certain that the right way to do it
is provide local service, do the best that you can maintaining an economic
6981 COMMISSIONER GRAUER: Now, if we could talk a
bit about the programming and your community channel. I know we saw a bit here
today. I wonder if you could explain how it differentiates from the conventional
community channel. One of my questions was what would it look like, but it
appears to me it is going to look like a traditional community channel. I wonder
if you could talk about that.
6982 MR. PARKES: Let me start by introducing
Mansell Nelson, our Vice President for British Columbia, who, by the way, is a
resident of Vancouver. Mansell has worked very hard in preparation for this
6984 MR. NELSON: Thank you, David.
6985 Maybe what I could do is give an overview of
I guess our concept of where we see our community expression channel
6986 I think, as a new entrant, we recognize there
are certain challenges in doing this obviously in the formative years. You know,
2 per cent of not a lot of revenue is not a lot of money, but it certainly does
grow over time. Over the seven years we propose to put $6.6 million into our
local community expression channel.
6987 We don't intend to try and attempt to copy
Rogers. Rogers has become a very sophisticated channel. They probably spend
almost as much on it annually as we are going to over our seven years at this
6988 But I guess our proposal is really two
elements. One would be community created video segments and the other would be
alphanumeric programming. I think in the early years it is the combination of
these two elements that are going to create "the channel". I think the reason
our channel, we see it as being successful is because it is going to be very
open, it is going to be very grassroots- oriented. We use names to describe it
or descriptions such as "to innovate". You know, it is always going to be
6989 Educate. We are going to work within the
community both to explain what a community channel is really meant to be, how
you can use it, how you can actually put productions on it, as well as, I think,
working within the community you become recognized as an avenue for being able
to express yourself within it.
6990 I think, importantly, one of the most
important elements, is this access to it, where people who develop something, as
long as it falls within the established standards and meets those requirements
that we propose, can air that video programming.
6991 COMMISSIONER GRAUER: How will your
subscribers know about it. How will that be, if it is a subscriber access
6992 MR. NELSON: We are trying to see if Nino has
a brother out here actually, and we are hoping to hire him, the fellow from the
6993 But we propose to hire a video co-ordinator
whose responsibility, among other things, will be to, you know, as I say, get
out into the public, all throughout the areas we intend to serve, which is a
fairly formidable task in the early days, and to get out there and work with
individual community groups.
6994 I have had discussions, for example, with
BCIT, the TV school there, and they are very interested. What we found
throughout this is there is a lot of production out there that is being made by
students and things that basically it doesn't have a home right now. We think
there is a great opportunity working with those groups to give it an opportunity
to be seen.
6995 COMMISSIONER GRAUER: What about equipment.
Will you have facilities and equipment or will people be --
6996 MR. NELSON: Basically, what we have proposed
is that we have some software and some hardware that "drives" -- you know
it's the stuff you put in the head end that makes the community channel work, as
well as two digital handicams and an editing suite to basically get us started.
So I think our principle is -- I mean, we are going to have equipment that
we will take around with us to work with groups or groups can use it to do these
things, but we are also counting on other groups within the community who have
these production facilities already there to use that.
6997 Frankly, where the future of this is really
coming, I think, is that digital handicams are becoming very inexpensive and you
can buy editing software for your PC these days. You know, there is a Sony ad on
TV recently where the father does a little movie of his son. I think those days
are coming. It is becoming more cost effective.
6998 We see also the Internet playing a
significant role in delivering that type of content across these broad, broad
6999 The one thing I neglected to say originally
was, as a British Columbian and a Vancouverite, I guess it really hit home when
I toured the province, you know, went through the communities and met with
locals and whatnot, how I really don't know much about what goes on in Vernon or
in Victoria. I mean I get very focused on Vancouver; that is where I live with
my family. But because we are building this large network that is going
throughout the province, connecting it, we are also creating an opportunity here
where people will be able to better understand what the community life is in
Vernon or Victoria while we sit in the lower mainland. I don't think there is
another avenue to do that that I am aware of in British Columbia
7000 COMMISSIONER GRAUER: So the community channel
then will be covering the whole area?
7001 MR. NELSON: That's correct.
7002 COMMISSIONER GRAUER: What about
7003 MR. NELSON: Our interactive element I guess
at this point would be we have developed some I think it is very unique software
and we have been very successful with it in our eastern operation. I think maybe
after we have covered our proposal here I am going to ask Paul to comment on
what we have done in the east, because we are really I think are taking the east
one step further immediately here.
7004 COMMISSIONER GRAUER: That's a good
7005 MR. NELSON: Pardon me?
7006 COMMISSIONER GRAUER: That's a good
7007 MR. NELSON: We need it out here.
7008 But basically, from an alphanumeric
perspective, customers can go to our Web site. We have certain categories where
they can put messages in for us and they can send it in via e-mail to
7009 We also propose to have a community access
Web master who is similar to our video co-ordinator who will understand the
standards and whatnot. He will vet these and then they will be posted onto the
7010 So that's the degree of
7011 This channel is, in our view, primarily
community access programming. Alphanumeric will play, I guess, a role in the
formative years when it is going to -- you know, it is hard to find all the
video to fill it up. But we see the evolution towards, as I mentioned earlier,
this interactivity coming more from people using things like Internet to get
things to us, their own little productions and things like that. I'm a firm
believer, after being in this industry, that digitization appears to almost be
the great -- you know, it is almost a democratic movement. Anybody can, you
know, get these things going and get on with it.
7012 But for those that haven't embraced the
online world, you can still mail it in, you can fax us your messages, you can do
those kinds of things and it will be aired.
7013 We think it is the combination of these two
elements that really we call "our channel", and we tend not to distinguish
between the two. So I think what is going to happen over time is that as we get
out there and work within the community our job is going to be easier,
hopefully, because we will inspire people to do these things. It will be easier
to do it.
7014 Frankly, one of my concerns is that we could
be inundated by people e-mailing us their videos and whatnot and how are we
going to decide.
7015 COMMISSIONER GRAUER: You might wish for those
kinds of problems.
7016 MR. NELSON: Well, it's the good and the bad
news. We will just have to get a very big hard disk on the computer I guess. But
that is down the road.
7017 You know, there are a lot of challenges,
obviously, bringing a service like this to B.C., but we think this is an
integral part of bringing LOOK to the Province of British Columbia and an
important element -- becoming part of the community -- and working
within that element to say, "Even if you don't subscribe to our service, we are
here, we have an open network. If it is suitable we will be happy to find a home
7018 COMMISSIONER GRAUER: Thank you.
7020 MR. LAMONTAGNE: As Mansell said, Commissioner
Grauer, I will just quickly run through what we are doing with the InfoLOOK
channel, and I can tell you we are very excited about the results we have had in
both our other systems.
7021 Just for a clarification, we have two
InfoLOOK channels, one for our southern Ontario system and one for Quebec and
eastern Ontario. They are staffed with separate people: Nino obviously in
southern Ontario, and Daniel Rockette(ph) for the Quebec and eastern Ontario
7022 The use of the Internet is an
interesting -- I can't think of a more interactive way for us to really
reach out and make it easily accessible to the community. If you go to our Web
site, www.look.ca, very quickly you will be able to see the InfoLOOK button to
be able to go into that page and leave a message if that is the way you want to
leave us a message and eventually be able to leave a videoclip so that we can
broadcast it out. It is exciting because people have the opportunity very
quickly, instant gratification, to send a message out of importance to them,
whether they be an individual, an association or a group, and immediately
afterwards, very quickly actually, have that broadcast out to all our customers
on the network.
7023 The channel placement is very key. It is
number 100 on both systems that we operate currently.
7024 Just to give you an example, we went out to
drive some traffic to generate some excitement. In southern Ontario shortly
after we launched we sent a mailing out to over 1,000 organizations and we got a
great response immediately afterwards. I was trying to look at some of the
traffic numbers just to give you an idea as to who is using it. Is it a lot; is
it a couple? There were well over 200 messages or videos that were sent to us,
some by the Internet, some directly, in March of 1999. So very shortly after we
launched in southern Ontario we got a great response and it was from the Girl
Guides of Canada, the Red Cross to a variety of individuals sending out
greetings and announcing meetings and such.
7025 Nino is going to be a real driver, and I
think it is very key for us to staff properly and have the right local
individual that can get out in the community and generate that type of
excitement and help the community develop that type of video content. As Mansell
said, with high-speed access becoming more and more ubiquitous, and we hope that
we will be an engine of that, it will be possible for people to send us videos
over the Internet. Today it is possible and it will be more and more
7026 So the commitment on content is to try and
drive and generate it and we think that the community itself will respond well
to providing us that type of video content as well in the future.
7027 COMMISSIONER GRAUER: Sounds good.
7028 Tell me a bit about this person and also your
plans to provide -- with the schools, your relationship with the schools.
You know, I think you are providing services free of charge.
7029 MR. NELSON: First of all, as far as an
individual -- I mean, we intend to hire somebody who is skilled in video
production that can work with groups through basically scripting, through
shooting, all the way through post-production. We think there will be people
attracted to work on the -- you know, want to get involved with the
InfoLOOK service that either have never done anything before or -- you
know, and through different extremes. One extreme may be, for example, the BCIT
school where they have all the equipment there and all those kinds of things,
where they are really just looking for more of a distribution model or a role to
get the wares to market, so to speak.
7030 But we currently believe that hiring the
right individual who is enthusiastic will make a difference in this thing and
will be able to generate, you know, the levels of production that will turn this
into a channel that people will want to tune to for community events --
community information, I should say, specific to their community or the greater
community of British Columbia, as I mentioned earlier.
7031 COMMISSIONER GRAUER: What about your plans
with the schools?
7032 MR. NELSON: We have had preliminary
discussions with schools and libraries. I guess we are open to mini-roles with
them. I mean, one obviously is in in-video productions. Some would like to have
our video co-ordinator come in and do the work. Then there is the opposite
extreme. I don't want to keep going back to BCIT, but they are fully
7033 So I think it is like anything. I think
everybody is going to have unique requirements. We are going to do our best to
try and work with those groups.
7034 The Surrey library system, one of our
intervenors, you will hear where they think it fits into the library, how they
perceive the future of the library system, how things like the Internet and the
community channel are affecting the use of the library, and where they see us
fitting into things like that. It was something that I personally wouldn't have
even thought of myself.
7035 So once you get out and start working with
these different groups, I think it kind of starts to happen. I think that it
obviously is going to be one of the first functions of this video co-ordinator
is to get out there. It is probably like Paul said in the eastern situation, you
send out 1,000 letters and you get 1,000 back with everybody's own idea and
vetting through all those to say: What is the best way to get this thing
started? What are the ideas that are most responsive to the Commission's
definition of what is a community channel supposed to be?
7036 I think it is one of these things that it is
going to settle down. It is going to find its own home. We think that is the
best way for it to mature.
7037 COMMISSIONER GRAUER: Develop organically with
7038 MR. NELSON: We would say that in
7039 COMMISSIONER GRAUER: So you say.
7040 I think that's it actually. Just let
--- Pause / Pause
7041 COMMISSIONER GRAUER: Yes. Thank you very
7042 CHAIRPERSON OF THE COMMISSION: Thank
7043 Commissioner Wylie has a question for
7044 COMMISSIONER WYLIE: Thank you,
7045 Since you filed your application, changes in
the ownership of Teleglobe have been made public. What is the effect on the
ownership chart? Would that affect LOOK directly as well, that if the ownership
of Teleglobe changes indirectly there is a change in the ownership of
7046 MR. PARKES: Teleglobe is a shareholder in a
numbered company which is the shareholder in turn in LOOK Communications. The
direct control of LOOK Communications is in the hands of Telesystem and that
situation has not changed -- perhaps I would be better to say would not
change should the Teleglobe-BCE deal be consummated later in the
7047 COMMISSIONER WYLIE: So there are no other
related changes on the Telesystem side that would be contemplated as the result
of a change of the ownership of Teleglobe. But, at a minimum, there would be a
direct relationship between BCE -- Bell Canada-Teleglobe, at a minimum
there will be an increase in the ownership of the Bell group --
7048 MR. PARKES: I think there are two questions
7049 COMMISSIONER WYLIE: But it will still be an
indirect ownership. It will increase, but it will still be well below anything
approaching control, especially if there is nothing changing on the other side,
because Telesystem also has an indirect -- will the ownership of Telesystem
and Teleglobe also disappear?
7050 MR. PARKES: Yes, that would be the
7051 COMMISSIONER WYLIE: Okay. So that will be
increasing the indirect ownership, but that's all?
7052 MR. PARKES: That's right.
7053 To go back to the first part of your
question, nothing changes with respect to the relationship between LOOK
Communications and Telesystem.
7054 COMMISSIONER WYLIE: Not even the ownership of
Telesystem and Teleglobe?
7055 MR. PARKES: The ownership of Telesystem and
Teleglobe isn't directly related to the Telesystem ownership in LOOK.
7056 COMMISSIONER WYLIE: That won't
7057 Perhaps we can ask you to file -- you
can discuss it with counsel -- what is the contemplated -- I know this
may not all be consummated, but what is the contemplated result on the ownership
chart of the -- do you know what I mean by an ownership chart? You know,
what happens indirectly as a result of the change in ownership of Teleglobe
7058 MR. PARKES: We would be happy to do that. We
will file that.
7059 COMMISSIONER WYLIE: Okay. Because it is not
clear to me, it may be to some other people, whether the Telesystem ownership
and Teleglobe also disappears, which would then increase, if it goes into the
hands of the BCE group, the indirect ownership of BCE. Of course we have some
interest because of the B.C. relationship with -- I want to say the B.C.
group because I'm not so sure where I should say Bell Canada and where I should
say BCE is also involved in another distribution system. So it is of some
importance to us --
7060 MR. PARKES: That's clear.
7061 COMMISSIONER WYLIE: -- to have at least
a draft of what is proposed.
7062 Thank you.
7063 MS PEARCE: We would be pleased to provide a
draft based on what we understand to be the situation.
7064 But, Commissioner Wylie, as you described it
was exactly correct. You are talking about, again if the deal is consummated, a
potential increase in the interest of the BCE group. In Teleglobe, there would
be no change in the structure of the numbered company, which is the controlling
shareholder of LOOK, or on the Teleglobe-Telesystem side of the control chain,
which is the ultimate controlling interest in LOOK.
7065 CHAIRPERSON OF THE COMMISSION:
7066 COMMISSIONER CRAM: I'm sorry, I didn't
understand one of your answers. It was the Internet cost. You were saying
thirty-four dollars and something. Is that for the half and half Internet? You
know, I'm not an engineer, I don't have one of those wrecked bridge rings, so I
got mixed up. Is it the wireless Internet or is it the half and half?
7067 MR. PARKES: The $34.95 is the price we are
currently charging in Ontario for the wireless Internet with the telephone
7068 COMMISSIONER CRAM: Okay.
7069 MR. PARKES: We call it Ultrafast.
7070 COMMISSIONER CRAM: Okay. Yes,
7071 And with the Ultrafast, does one then have to
get a phone or can you interrupt your own line, your first line?
7072 MR. PARKES: No. You just simply use the
telephone that is already in your home.
7073 By the way, with the software packages that
we have available today, you can overcome what was probably the largest
objection to that, which was I would miss an incoming call while I'm on my
Internet service. We have introduced a service called Internet Call Manager
which allows you to do a couple of things. One is, as you are having your
Internet session, the fact that a call and who it is from comes up on your
screen and you have the immediate choice to interrupt your session and answer
the call or to send it to a voice messaging system that is part of Internet Call
Manager, which also, by the way, means you no longer need your telco messaging
7074 Sorry for the ad.
--- Laughter / Rires
7075 COMMISSIONER CRAM: Have you ascertained a
pricing for the full wireless, because you say you are going to introduce that
in the near future?
7076 MR. PARKES: It would be our expectation that
our full two-way wireless Internet product would be competitive with the other
high-speed Internet products available today, which is essentially $40 a month
7077 COMMISSIONER CRAM: Okay. Thank
7078 CHAIRPERSON OF THE COMMISSION: Legal counsel
7079 MS ASSHETON-SMITH: Thank you.
7080 First of all, the ownership information that
Commissioner Wylie requested, when do you think that you would be able to
provide that to the Commission?
7081 MS PEARCE: I would think we will need to
speak to the principals involved in the transaction, but I would think that
early next week would be doable, if that is acceptable to the
7082 MS ASSHETON-SMITH: Is Monday early next
7083 MS PEARCE: How about Tuesday?
7084 MS ASSHETON-SMITH: Tuesday. Okay.
7085 I want to just come back to the community
channel. The proposed InfoLOOK channel, this is the same model that is operating
on the other systems right now. Is that correct?
7086 MR. NELSON: I think the significant
difference would be that in this situation we propose to distribute video or
community programming from day one, where in Ontario it is just being introduced
after 18 months as per their licence.
7087 MS ASSHETON-SMITH: Okay. So it is still
alphanumeric in Ontario. Is that what you are saying?
7088 MR. NELSON: Well, Paul is best to explain
maybe what the progression has been out there I guess.
7089 MR. LAMONTAGNE: It has been generally
alphanumeric up to recently. We are now moving in the southern Ontario system to
introducing video and in Quebec we will do the same. You will recall that the
licences were about six or eight months apart, so we are about six or eight
7090 MS ASSHETON-SMITH: Okay.
7091 MR. LAMONTAGNE: The benefit of having rollout
video quicker in Ontario will allow us to do it very quickly afterwards in the
Province of Quebec.
7092 MS ASSHETON-SMITH: Presumably, though, it
won't be 100 per cent video on day one. There will be a portion that is
alphanumeric and a portion that is video, I take it?
7093 MR. NELSON: That's correct.
7094 MS ASSHETON-SMITH: What would be the
proportion that would be alphanumeric on day one?
7095 MR. NELSON: We have committed to generate a
minimum of 20 minutes a week of original -- or I guess
7096 MS ASSHETON-SMITH: And the rest would be
7097 MR. NELSON: Right.
7098 But we also don't know, for example, what the
community groups and the individuals will give us. What we are saying is that we
will generate the 20. We think there will be more and the balance, I guess, we
will use to -- you know, we will have alphanumeric programming and we will
have to decide on our wheel and those kinds of things once we understand better
the balance of information we have to work with.
7099 MS ASSHETON-SMITH: Okay.
7100 Along the same lines. When you talked about
your contribution to local expression, you say the vast majority of the
contribution that you will be claiming will be a direct expense as associated
with the creation, acquisition and digitization of community video programming.
What do you mean by the "vast majority"? What will the rest consist
7101 MR. NELSON: Well, the current cost to
digitize the programming weekly is about $2,000, so if we multiply that or
annualize that we are over $100,000 alone just to make that analog video
suitable for broadcast on a digital service. You know, that cost may reduce over
time because of the people delivering us digital video, but we also have, you
know other costs of running the service, including the individuals that we
propose to employ to work and promote the service.
7102 MS ASSHETON-SMITH: Okay. Just to clarify,
then. There will be a portion of the 2 per cent contribution that will go
to administrative expenses and not programming?
7103 MR. NELSON: Yes. I should point out, though,
in the early years we believe the costs of running the total service will most
likely exceed what our 2 per cent contribution would cover.
7104 MS ASSHETON-SMITH: It was intriguing when you
were discussing the notion of having a local community -- the local
expression would actually be almost a regional expression. I'm just wondering
what percentage of the overall channel would be devoted to what you might call
regional expression as opposed to strictly local expression?
7105 MR. NELSON: I think it is one of these
things, as you say, it is a very open type of network. We don't know at this
point if Vernon is going to be the hotbed of activity or what may be. So I think
it is one of these things.
7106 It would be nice to have unique
representation. I can't comment on if that is the way the world will work. As I
said, I don't believe anybody has set up a network like this. As Commissioner
Grauer recognized, we have a lot of mountains and water separating us here and
whatnot. I think it will be a unique opportunity to bring this new sense of
communication I guess or awareness together of these often separated
7107 MS ASSHETON-SMITH: Is it possible that
someone in Vernon, their community channel might contain, depending on what
comes in, programming that all comes from Vancouver or Victoria, then, the way
the system shares --
7108 MR. NELSON: Well, if no one in Vernon elects
to put something on and if there is nothing worthy of being generated
there -- I mean, that may be the case that week, you know. So I think, you
know, we can't be everywhere at all times. I think we clearly are going to have
to develop a more regional model and is it this week it is Vernon, next week it
is Penticton or is it going to just be a mix. Those are the kinds of things that
will be decided when we understand the community interest, and the volume, I
think is going to play a key role in how we make those decisions.
7109 MS ASSHETON-SMITH: Okay.
7110 If the proposal for local expression is not
approved by the Commission, would you accept a condition of licence requiring
you to contribute the full 5 per cent of revenues to the Canadian Television
7111 MR. NELSON: I think the answer is
7112 MR. PARKES: Excuse me. Yes.
--- Laughter / Rires
7113 MS ASSHETON-SMITH: Just two more
7114 Your proposed service areas include Victoria,
the lower mainland, Fraser Valley, Okanagan Valley and Kamloops. Are any of
these sites severable from the others or do you require the operation in all
areas in order to meet the financial liability of the overall system?
7115 MR. PARKES: We look at it as a complete
7116 MS ASSHETON-SMITH: So they are not
7117 MR. PARKES: That's correct.
7118 MS ASSHETON-SMITH: Okay. Just one
more -- actually, two more questions.
7119 You have asked to be relieved of the
obligation to distribute all local radio stations, which is a requirement under
section 22 of the Broadcasting Distributions Regulations. In 1997, at the public
hearing then, LOOK indicated that it was upgrading its capacity and would carry
these local stations when the capacity was upgraded.
7120 Is LOOK carrying any local stations on its
other systems now, local radio stations?
7121 MR. PARKES: Paul, would you take this
7122 MR. LAMONTAGNE: We are not at this point. We
carry digital audio services only.
7123 MS ASSHETON-SMITH: Is there any anticipation
that you would be in a position to carry local radio stations in this area in
the course of the seven-year licence term?
7124 MR. LAMONTAGNE: If I may answer this,
7125 I think what we are requesting is to be
relieved of that obligation. Now, there are a number of issues that, if I could
just touch on in 60 seconds, are important for the Commission to
7126 One is the nature of the network that we have
renders it extremely costly for us to pick up local radio stations from around
the province, bringing them back to our central point of collection and
digitizing and sending them out.
7127 There is also an issue of capacity which we
raised the first time, which is the reason that the Commission understood the
initial situation when we launched, that we are trying to carry as many
specialty services as possible. We know the Commission is in a mode of licensing
more and more specialty services. In fact, they were excited about it, because
as a digital operator we want to be able to distribute all the new channels. We
see it as a factor of differentiation and, frankly, our choice models are very
compatible with that.
7128 There has been, up to now, no demand from our
customer base for local stations. There also has been no demand from the local
stations for carriage. For these reasons we have concentrated on the digital
audio services. We feel that it is a strong factor of differentiation and we
would like to request that we be granted an exemption as part of this
7129 MS ASSHETON-SMITH: Thank you.
7130 My last question. You have asked for
authorization to distribute the signals of the Vancouver local stations in the
B.C. interior. We have had several intervenors who have opposed the carriage of
those signals in the interior. Your rationale is that you need to carry the
signals in order to compete with the DTH providers, but on the other hand some
might argue that the DTH providers aren't carrying the local interior signals
which you would be carrying if you were licensed.
7131 Can you comment on this?
7132 MR. NELSON: Thank you.
7133 I guess it is always tough being the third
one in because I guess what we are suggesting is bringing the last two in that
aren't available as a point of differentiation. I think, you know, when we put
together our programming line-up, not only were we very cognizant of what the
local cable operator has, also the DTH providers, and the unique characteristics
of what our digital platform allows us to do. So, clearly, it was just a point
7134 I think part of the reason why those channels
aren't available is because I think what the satellite DTH does is pick the most
attractive ones and they have left some more limited ones. Historically, for the
cable operators there has been a microwave network so they couldn't get them up
there. So we are the first, I guess, to have built this network that has the
capacity to bring full choice to the customers.
7135 MS ASSHETON-SMITH: Thank you for that
7136 Thank you. Those are all my
7137 CHAIRPERSON OF THE COMMISSION:
7138 Commissioner Wylie.
7139 COMMISSIONER WYLIE: Remind me, is it the cost
of collecting the radio services rather than the satellite space -- not
satellite space in your case, but the gigahertz or whatever, the band, part of
the band that it requires to bring it to the antenna? Which is it that is costly
and difficult? Is it gathering them or is it because it takes bandwidth, so to
7140 You explained it to us no doubt when you
first applied, but I don't remember. I just want a 30-second answer.
7141 MR. LAMONTAGNE: I think you are quite right
in your intuition that radio obviously requires less bandwidth than television
services, so when we talk about audio services the bandwidth is limited.
Nonetheless, whether it is an audio or video service, it still gets into
7142 The costly part though is really the
collection of the signals. It is getting them from the regions, getting the
dedicated capacity to bring them back. It is a very costly venture to do
7143 COMMISSIONER WYLIE: Thank you.
7144 CHAIRPERSON OF THE COMMISSION: LOOK's head
office is in Montreal or in Toronto?
7145 MR. PARKES: Our head office is in
7146 CHAIRPERSON OF THE COMMISSION: Okay. That
explains it probably because there is one francophone service less than your
competitor in terms of offering in B.C. TV-5 is not there.
7147 MR. PARKES: I think in terms of multicultural
offerings, we are the leaders, if I may suggest that.
7148 CHAIRPERSON OF THE COMMISSION: I'm talking
about the francophone offering.
7149 Thank you.
7150 That will complete our work for today. We
will come back tomorrow morning and we will have an extra hour of sleep. We will
be starting at nine tomorrow morning. We expect to be completing the process for
the MDS part of our hearing by lunchtime so that we can start early in the
afternoon and complete our work by end of afternoon.
7151 To everyone, have a good evening and see you
--- Whereupon the hearing adjourned at 1900,
to resume on Friday, February 25, 2000
at 0900 / L'audience est ajournée à 1900,
pour reprendre le vendredi 25 février 2000