TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
APPLICATIONS FOR TRANSFER SUBMITTED BY
CANWEST GLOBAL / CORUS / SHAW
DEMANDES DE TRANSFERT DE LA PART DE
CANWEST GLOBAL / CORUS / SHAW
HELD AT: TENUE À:
Plaza 500 Hotel Hôtel Plaza 500
Ballroom Salle de bal
500 - 12th Avenue West 500, 12e avenue ouest
British Columbia (Colombie-Britannique)
27 April 2000 Le 27 avril 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
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Toutefois, la publication susmentionnée est un compte rendu
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Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Applications for transfer submitted by
CanWest Global / Corus / Shaw
Demandes de transfert de la part de
CanWest Global / Corus / Shaw
BEFORE / DEVANT:
Françoise Bertrand Chairperson /
Chairperson of the
Commission /Présidente du Conseil
Andrée Wylie Commissioner / Conseillère
Joan Pennefather Commissioner / Conseillère
Cindy Grauer Commissioner / Conseillère
David Colville Conseiller / Commissioner
ALSO PRESENT / AUSSI PRÉSENTS:
Marguerite Vogel Secretary / Secrétaire
Karen Moore Legal Counsel /
Robert Ramsay Hearing Manager / Gérant
HELD AT: TENUE À:
Plaza 500 Hotel Hôtel Plaza 500
Ballroom Salle de bal
500 - 12th Avenue West 500, 12e avenue ouest
British Columbia (Colombie-Britannique)
27 April 2000 Le 27 avril 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
INTERVENTION BY / INTERVENTION PAR
British Columbia Film 732
Directors Guild of Canada 754
National Broadcast Reading Service 769
Regional Municipality of Hamilton-Wentworth 777
Pyramid Productions Inc. 803
HBW Film Corp. 808
Brenco Media Ltd. 813
Peace Arch Entertainment Group 817
Great North Communications Ltd. 822
Remstar Télévision Internationale R.T.I Inc./
Remstar Diffusion Inc./Placements St-Mathieu Inc. 839
REPLY BY / RÉPLIQUE PAR
CanWest Global 848
INTERVENTION BY / INTERVENTION PAR
Wayne Plunkett 866
Specialty and Premium Television Association 879
Concerned Children's Advertisers 907
Alberta Motion Picture Industries Association 917
Friends of Canadian Broadcasting 925
Canadian Independent Record Production Association 944
CHUM Limited 958
TABLE OF CONTENTS / TABLE DES MATIÈRES
Forefront Entertainment Group 981
Great North Communications Ltd. 986
Media Group 998
Pacific Music Industry Association
and NewMusic West
and O'Day Productions 1017
REPLY BY / RÉPLIQUE PAR
Corus Entertainment 1030
Shaw Communications 1047
INTERVENTION BY / INTERVENTION PAR:
Glennie Stamnes Strategy 1059
Vancouver, B.C. / Vancouver (C.-B.)
--- Upon resuming on Thursday, April 27, 2000
at 0803 / L'audience reprend le jeudi
27 avril 2000 à 0803
3318 CHAIRPERSON OF THE COMMISSION: Good morning,
3319 Madame la secrétaire, voulez-vous, s'il vous
plaît, présenter notre prochaine intervenant.
3320 MS VOGEL: Thank you, Madam
3321 I would like to invite British Columbia Film
to come forward for their presentation, please.
3322 And a reminder to intervenors, there is a
limit of ten minutes for your remarks, and I hate gonging
3323 Would you push the button on the mic please
when you're ready to start.
3324 CHAIRPERSON OF THE COMMISSION: Good morning.
Welcome in your city.
INTERVENTION / INTERVENTION
3325 MR. EGAN: Good morning, Madam Chair,
Commissioners, staff, ladies and gentlemen.
3326 My name is Rob Egan and I'm the President and
Chief Executive Officer of British Columbia Film.
3327 Joining me today is Dr. Catherine Murray,
Associate Professor at Simon Fraser University's School of Communication, and a
member of the Board of British Columbia Film.
3328 We are pleased to appear before you today to
expand upon our written comments regarding the transfer of assets of WIC Western
International Communications to CanWest Global Communications.
3329 WIC is one of the three largest private-sector
broadcasting companies in English Canada, with assets in excess of one billion
dollars. By virtue of these proposed transactions, British Columbia stands to
lose its only private broadcaster. We are very concerned with the structure of
the CanWest application, as it represents a net outflow of benefits from British
Columbia to the rest of the Canada.
3330 We agree with the Commission that benefits
deriving from these transactions should be assessed on the basis of what will
end up on the screen; that there should be an appropriate level of contributions
to the production of priority Canadian programming.
3331 As we stated in our written submission, the
overriding question that the Commission must ask, in our view, is: What benefits
must be attached to these applications that will guarantee that Canadian talent
and audiences from across the country are well served?
3332 And, specifically, given the loss of WIC as
the only B.C.-based broadcaster in the national system, the Commission must also
ask: How do we ensure Canadian and British Columbian viewers will have the
opportunity to watch B.C.-based productions on these national
3333 Given Mr. Shea's comments on the first day of
this hearing, we felt it important to set the record straight regarding the
production capabilities of B.C. producers.
3334 In recent years the structure of the film and
television industry in British Columbia has changed dramatically. Whereas in the
past, B.C. was known primarily as a location for service production, this is no
longer the case.
3335 In 1994, total film and television production
in B.C. amounted to just over $400 million, of which $52.5 million, or 13 per
cent, was B.C.-owned and controlled production.
3336 In 1999, total film and television production
in B.C. amounted to over $1 billion. Of that amount, $298 million or about 28
per cent, was B.C.-owned and controlled production. In other words, not only is
the pie growing but that piece of the pie that consists of B.C. production is
proportionately larger than it has ever been before.
3337 This growth should demonstrate that B.C. has
the talent and skill to produce high quality programming that can and does
succeed in the national and international marketplace. It is equally important
that broadcasters understand these changes in order to take advantage of the
opportunities that this talented production community offers to their
3338 British Columbia assets involved in this
transaction equal $366 million of the $692 million total value or about 53 per
cent. The Alberta assets amount to $215 million or 31 per cent of the total.
Combined, British Columbia and Alberta assets equal $581 million or 84 per cent
of the total WIC television assets. Therefore, 84 per cent of the benefits or
roughly $67 million should accrue to the west in this
3339 In our written submission we argue that too
many of the proposed benefits flowed out of B.C. and accrued to national
organizations and initiatives. Commissioner Grauer undertook a comprehensive
review of the split between national and local benefits as proposed by CanWest,
and we were pleased to note the Commission's discussions with CanWest concluded
with an undertaking that these allocations would be re-examined.
3340 We feel that it is critical that on
transactions of this magnitude there should be an inclusive discussion
undertaken with concerned parties regarding any proposed benefit strategies.
Given the impact, it is imperative that the major organizations in British
Columbia should be consulted in an effective and meaningful way prior to the
applications being submitted.
3341 Even at this stage, the benefits package is
not clearly articulated and we would ask that the Commission insist upon a
consultative process that ensures this huge transaction takes into consideration
the views of those people directly impacted by it; and, subsequent to meaningful
consultation, there must be established an arm's length and ongoing monitoring
of these benefit commitments.
3342 MS MURRAY: We would like to turn now to a
discussion of the station-specific benefits.
3343 The Commission has asked two important
questions of CanWest regarding its proposed benefits package:
3344 Firstly, what are the incremental benefits to
the individual markets concerned; and, secondly, what will appear on TV screens
as a result of these proposed transactions?
3345 We would like to examine the proposed benefits
packages allocated to B.C. stations, with these questions in
3346 I would like to turn first to BCTV/CHAN
Vancouver and a discussion of news and local benefits.
3347 As we outlined in our written submission,
there is very little in the proposed BCTV benefits package of $35.4 million that
is directly beneficial to Vancouver, in our view. First of all, there are no
incremental benefits in terms of new local programming commitments. We find it
interesting that in this overall transaction, commitments to not reduce the
level of local programming on BCTV and the Alberta stations is in fact
considered a benefit somehow.
3348 Additionally, while we would consider that a
western-based national newscast would be a benefit to the rest of Canada, we do
not think it would necessarily constitute a noticeable incremental benefit to
Vancouver viewers, given the quality of news that is already available from BCTV
3349 In terms of spending, we note too, only a
portion of the $8 million is in fact allocated to Vancouver-based
3350 I would like to turn next to the Western
Independent Production Fund.
3351 Also, within the CHAN package is
$15.9 million for the Western Independent Producers Fund. As detailed in
our written submission, western producers need licence fees, not another equity
fund. We are very pleased that the Commission has required CanWest to make a
minimum commitment to licensing priority programming, and especially drama, from
3352 This is a much-needed step in the right
direction in support of western productions. We hope that the Commission will
take up Leonard Asper's suggestion that this should be a requirement at group
licensing renewals for all private broadcasters and not only at this application
3353 We do however note with concern that CanWest
stated on the first day of the hearing that this Western Independent Producers
Fund would now not give exclusive access to western producers but only
quote/unquote "first priority". Does this mean that CanWest assumes there are
not enough western producers with licence fees to trigger this fund per year so
that producers from outside the west must become eligible? At least so would Mr.
Shea's remarks imply.
3354 We certainly recommend that the Commission
clarify this with the applicant.
3355 I would like to turn to the discussion of
Canadian programming on the screen.
3356 Of the total $35.4 million BCTV package, the
only direct programming benefit appears to be a $750,000 First Projects Fund.
According to CanWest, this fund will be for small "first-time" producers. We
applaud this type of initiative, and we consider it would be a valuable benefit
for the smaller producers in Vancouver, as long as it is directed to priority
programming and includes a commitment to broadcast by CanWest.
3357 However, CanWest has also stated that this
fund would be managed internally by the Vancouver station. As this was a late
addition to the CHAN benefits, we can only comment at this point that funds as a
part of a benefits package should be arm's-length. We request that the
Commission review the particulars more closely with CanWest.
3358 In total, we have estimated that
$2.3 million for the national newscast staff and this $0.75 million for the
First Projects Fund could be considered as programming benefits produced by B.C.
talent and available to B.C. and Canadian viewers.
3359 This represents direct benefits of about 1 per
cent of the $295 million asset value of BCTV. This is not
3360 Overall, the BCTV benefits package is
seriously deficient in benefits to the Vancouver market, for booth Vancouver
viewers and Vancouver-based program producers. Further, Commission discussions
regarding the reallocation of benefits must include a complete overhaul of the
benefits associated with the CHAN purchase.
3361 I would like to turn now to CHEK
3362 The Victoria benefits package includes $3
million for new local programming. As well, $5 million from the Vancouver
benefits proposal is allocated to CHEK local. This local programming is to
include a 90-minute newscast and an afternoon talk show. The balance of the $5.2
million of CHEK benefits accrues to various other organizations and
initiatives -- none of which are specific to generating priority
programming from Victoria program producers.
3363 We question whether a 90-minute newscast and a
day-side talk show are the best ways of developing local content on the
Vancouver Island. Additionally, as the Commission has pointed out, there is a
possibility that CHEK but not CHAN would be approved. This puts into question
the entire Victoria benefits package allocation, in our view. We are now unsure
of which benefits are really on the table and which ones are subject to
3364 We trust that the Commission will provide an
opportunity for us to comment on the final proposed version of these benefits
packages as they relate to these transactions.
3365 CHBC Kelowna. The benefits attached to this
Kelowna station primarily include local programming initiatives and CBC joint
ventures. Once again, no commitments to locally-produced programming in the
priority programming categories with a commitment to broadcast by
3366 While we welcome innovative joint ventures
between public and private partners, we question the true value of allocating
$1.2 million to the CBC. How much of this $1.2 million will end up on the
3367 In the letter filed by CanWest as a part of
their response to intervenors, the money will be used for engineering, new
equipment and infrastructure, with an undetermined amount set for general
3368 MR. EGAN: In our opinion, CanWest's proposed
benefits package represents a flow of benefits out of British Columbia, despite
the predominance of B.C. assets in this transaction. There is real substance to
the loss of a broadcaster the size of WIC in British Columbia.
3369 We are heartened by the Commission's
requirements that CanWest commit to a minimum level of licensing of western
drama and priority programming, and that CanWest revamp their benefits package.
It is not the size of CanWest's proposed benefits package that we have concerns
with but rather their proposed allocations undertaken with limited western
consultation. The current benefits package in relation to the B.C. stations is
inadequately balanced in terms of benefits to producers or viewers in British
Columbia. The Commission must work with CanWest to optimize these benefits in
terms of Canadian priority programming from western sources on CanWest's
3370 We look forward to having the opportunity to
formally review and comment on any proposed changes in the CanWest benefits
packages as a result of this hearing, and we would be pleased to answer any
questions that you may have.
3371 CHAIRPERSON OF THE COMMISSION: Thank
3372 I would ask Commissioner Grauer to ask the
3373 COMMISSIONER GRAUER: Thank you,
3374 Do I take it you are not reappearing for
Corus, is that correct, or you are coming back?
3375 MR. EGAN: That is correct. We are not
3376 COMMISSIONER GRAUER: And you haven't made any
comments in here, so --
3377 MR. EGAN: No. We addressed our comments
regarding Corus and Shaw in our written application, and those stand on the
3378 COMMISSIONER GRAUER: Thank
3379 I'm just going to refer to your presentation
here today first.
3380 You have raised a number of issues, as you did
in your written presentation, with respect to the benefits package and areas in
which it's perhaps in your view not the most appropriate mix. I guess there's
3381 First, with respect to the CHAN benefits and
the national news initiative, maybe what I could do is get your comments --
I know that it's BC Film, but both the national news initiative and the national
public affairs program out of Calgary, the portion of the expenditures that
would be incremental given that they are produced in the west. I don't know if
you were here. CTV yesterday also supported the inclusion of incremental
expenses because it is more expensive to do that kind of a program in western
3382 Does doing a national newscast from British
Columbia and a public affairs show from Alberta, in your view, benefit the
Canadian system as a whole and the goals of the Broadcasting Act and our
3383 MS MURRAY: I think it's going to be a
tremendous success story for the Canadian broadcasting system to anchor national
news in the west and public affairs in the west, no doubt.
3384 Our quibble is with the exact incremental
value and the exact expenditures, which are very difficult to deduce from the
3385 COMMISSIONER GRAUER: So would you support,
though, the inclusion of incremental costs of doing a program like that in the
west as part of a benefits package?
3386 MS MURRAY: Yes.
3387 COMMISSIONER GRAUER: Yes.
3388 You have taken a lot of issue with a lot of
the benefits package. Do you have any specific ideas for us? I know you said
that there wasn't consultation with CanWest prior to this. Have you given
thought to what it might look like? What are some of the things they might be
3389 MR. EGAN: You know, we do have a couple of
concerns. I mean, we're obviously very supportive of a western fund that would
be directed to support western and B.C. producers.
3390 I think one of the -- you know, one of
the central approaches of our comments this morning is to once again make the
case on behalf of British Columbia producers, and western producers for that
matter, with respect to the talent and skill that the creative and production
community in this province offers.
3391 You know, we're a provincial funding agency,
in effect. These funds are complex. We had taken the view that the licence fees
or a top-up fund was perhaps administratively a better option than yet another
equity fund. That was certainly a concern that we had. And because we're in the
business of dealing with producers with respect to financing plans, which are
very complex and draw on a number of different sources, provincial and federal
tax credits, provincial and federal funds, private funds, there is an
administrative burden that producers have to deal with in financing projects
that is pretty daunting. We felt that it was important in the creation of a new
fund to try to address that issue as well and try to sort out what might be the
best, the easiest way to go with the production community in
3392 So we're not necessarily sold on equity as the
best model for the fund, and we do have some concerns about the ongoing
administrative responsibilities that producers are faced with. That falls
disproportionately on small, medium and large production
3393 COMMISSIONER GRAUER: So the concept of the
fund is great, but you would like to see perhaps a little more work put into
determining the best shape. Is that fair?
3394 MS MURRAY: Yes, but that's a difficult issue.
I think if I were to step back and actually return to the very first question
you asked, Ms Grauer, the issue is: The national news and current affairs
show anchored in the west, is that a benefit for all of Canada and a benefit for
the west? My answer categorically was yes, it's a success.
3395 But what seems to be absent in this
application is any kind of really creative vision about what such a change would
mean, because news as we understand it as a category, as a genre, in today's
cultural life is a much broader, more complex thing. So there are elements in
this application which demonstrate a genuinely transformative understanding of
what public broadcasting or private broadcasting may be. But I think that what
is interesting is an inability to put it together in a mission for producers and
systems of governance of new funds.
3396 So, to give you an example, we know that
health news is going to be one of the biggest emerging sub-genres of national
news going. There is an initiative with McMaster, for example, in the program
"In the East", which they talk about. There is no ability to integrate this
together with an understanding of what the impacts would be here for western
news, western production, and so on.
3397 I think that that gives you a flavour, because
news and current affairs programming, entertainment arguably, drama, fiction,
all of these are going to blend in new ways in the broadcasting universe of the
future. Where do we see any sensitivity to that? I don't know.
3398 COMMISSIONER GRAUER: Thank you.
--- Pause / Pause
3399 COMMISSIONER GRAUER: Sorry. I just need
to -- access.
3400 You talk in your written submission about
access and what western producers need is access. I wonder if you could
elaborate on that. One of the things I just wanted to get back to you briefly is
that I had not picked up that the fund is identified as a "first call" being to
western producers. I had not picked up that nuance.
3401 But are you of the view that if the rest of
the infrastructure is in place and the fund was adequately structured that there
were licence fees that it wouldn't be so much of a problem, or are you --
is that -- meaning, if there's a commitment to licence here, that triggers
access to the funds.
3402 You're not maybe satisfied. Is that -- I
mean, what's the most important thing in terms of the
3403 MS MURRAY: Definitely the commitment to the
licensing fees. That's the most important.
3404 But I would also argue that we need to be
accountable. We need to monitor the performance of that fund. We need to
publicly report its impact on putting good programming on the air and attracting
viewers, B.C. viewers and Canadian viewers. We have to monitor its
3405 COMMISSIONER GRAUER: Do you have any ideas
about how that might --
3406 MS MURRAY: I would suggest that that's a
widespread problem for all such funds. Yes, I think that there are plans to
develop monitoring capacities on the part of a number of agencies. BC Film might
be a partner in such an undertaking, yes.
3407 COMMISSIONER GRAUER: Now, access. Could you
just elaborate on --
3408 MR. EGAN: I guess one of the problems that we
run into over and over and over again, given our position here in Vancouver and
in British Columbia, is the need for producers to have access to decisionmakers
and to ensure that there is some autonomy for decisionmaking here in Vancouver.
As we see yet another Vancouver-based broadcaster leaving the field and being
headquartered elsewhere, it raises that concern once again around responsive
decisions and access to people that are actually responsible for making
decisions. We're obviously very pleased to see that there would be a development
office, you know, located in British Columbia and other western centres as
3409 But I think that, you know, there are two
things. There is the need for that access on a day-to-day, week-to-week basis,
and there is the ability for decisions to be made in those centres quickly so
that producers can get on with their business. I think it's a recurring theme
that we in the west have to deal with.
3410 COMMISSIONER GRAUER: You know, as you know, we
had quite a discussion about licensing western projects and there are some
people who would argue that we should make it, you know, a requirement and get
into more -- you know, a more detailed regulation of a system of quotas,
and those who say don't have quotas.
3411 You, I know, referenced our CBC decision in
your written submissions with respect to regional production. It strikes me that
the most effective way to achieve the goals that I think we all share is to show
the broadcasters that there is a benefit to them of doing this, that, you know,
if the playing field is level that there is in fact going to be a benefit to
producing across the country.
3412 I just wondered if you could give me your
views on that and how we might approach this whole subject.
3413 MR. EGAN: Quotas are a mechanism to achieve an
end. If quotas or a requirement or a minimum level is the necessary tool that
you use to achieve the end that you have established for yourself, then we would
obviously be supportive of that instrument being used.
3414 Quotas can also be used for a period of time
and phased out. There are a number of ways that that can be handled
3415 The important thing, from our point of view,
is to keep the goal in mind. From where we sit, the goal is to enhance and
develop a very talented community of producers and filmmakers in western Canada
and in British Columbia. In order for that to occur, they need to have the
opportunity to develop their craft and ensure that their programming appears on
both the small and big screen. If quotas are the vehicle that can assist that
being done, to assist achieving that objective for some period of time, then so
be it. That may be the way we have to go to ensure that that is the
3416 COMMISSIONER GRAUER: You mean, if it's not
happening it might be a requirement?
3417 MR. EGAN: Yes.
3418 COMMISSIONER GRAUER: If it's happening, we
don't need to do it.
3419 MR. EGAN: If it's happening, we don't need to
do it. And I think that that's where the industry as a whole comes into play.
The broadcasters have a role to play in that, producers have a role to play in
that, funders have a role to play in that. Presumably, we are all working
towards the same end, which is to ensure that our broadcasters are developing
and working with the talent that is available to them to bring programming to
the screen that is relevant to Canadian audiences and that Canadian audiences
want to watch.
3420 MS MURRAY: I think it's worthwhile just
reminding everyone that the Western Producers Study pointed out that the system
of national Canadian content quotas hadn't necessarily worked to the advantage
of western producers over the last four years, between -- the purpose of
the study was 1994 to 1998 I believe. In fact, there had been a retraction of
western production to some 32 per cent. And I believe the study also
demonstrated CanWest had a very low level of production in the west, under the
existing quota system.
3421 So the issue really becomes, I think: Do we
need a regional Canadian content quota? I would suggest probably not. But that
is why BC Film is adamant that the condition on commitments to licence fees to
western producers, and particularly B.C.-based producers, is an absolutely
essential instrument to ensure growth of indigenous, B.C. and national
3422 COMMISSIONER GRAUER: So to do it as a
part -- what I'm really getting at is, then, as a part of this acquisition
at the moment --
3423 MS MURRAY: Essential.
--- Pause / Pause
3424 COMMISSIONER GRAUER: I don't think I have
any more questions.
3425 I don't know if you have anything that I
didn't ask that you would like to answer or elaborate on, but I thank you for
coming and I'm glad to have your comments on the record.
3426 MS MURRAY: Thank you.
3427 CHAIRPERSON OF THE COMMISSION: Thank you very
3428 MS VOGEL: I would like to call the Directors
Guild of Canada next, please.
--- Pause / Pause
3429 CHAIRPERSON OF THE COMMISSION: You won't miss
INTERVENTION / INTERVENTION
3431 MR. GOLUBOFF: Good morning,
3432 Madam Chair and Commissioners, thank you for
providing me and my colleagues with an opportunity to appear today on behalf of
the Directors Guild of Canada.
3433 My name is Alan Goluboff, and I am the newly
elected President of the Directors Guild of Canada. With me are the Guild's
Executive Director, Pamela Brand, and Paul Audley, a consultant to the
3434 The Directors Guild has over 3,000 members
from coast to coast, with seven district councils. Our membership includes not
only directors, but individuals involved in all areas of production, design,
editing of films and television programs.
3435 Our intervention addresses two separate
issues. First, it addresses the question of whether the Guild supports or
opposes the proposed acquisitions. Secondly, it provides comments on the
benefits package CanWest Global has offered.
3436 I want to speak first to the ownership
application before asking Pamela to comment on the benefits
3437 The proposed ownership transactions raise a
number of general questions regarding ownership policy. The way the Guild has
answered those broader questions has determined its position on the individual
3438 I should first note that CanWest Global itself
has proposed that it divest control of CKVU-TV, Vancouver and CFCF in Montreal.
There is no reason for the Guild to take a contrary position, and divestiture is
consistent with Guild policy, so we support a requirement that CanWest Global
divest control of CKVU and CFCF.
3439 The first broader question raised by these
applications is whether CanWest Global should be allowed to own a station in
every important television market in Canada, establishing under common ownership
what it refers to as a third national programming choice for Canadians. If this
is accepted it will result in a high level of ownership concentration in
conventional television -- a degree of concentration that would not be
accepted in the United States under FCC rules.
3440 However, a series of transactions in recent
years has already produced a similar result in the case of CTV. So, while it is
recent, there is now a precedent for a single owner to have stations in every
3441 Moreover, as indicated in our written brief,
the Guild accepts the resulting high level of ownership concentration as
reasonable, given the substantially smaller size of the Canadian market.
Consistent with this application, the Guild supports the CanWest applications to
acquire CITC, Calgary, CITV, Edmonton, CHAN, Vancouver, CIFG, Prince George,
CHKL in Kelowna and CHKM in Kamloops.
3442 However, with both CTV and CanWest Global
establishing a powerful position -- each owning stations in all major
Canadian markets -- renewed importance attaches to setting limits. In the
Guild's view limits should be set that apply specifically to conventional
television, rather than to conventional television, pay and specialty services
3443 Conventional television requires its own rules
because, as the Commission stated in its new television policy announced last
june, and I quote:
"It seems clear that conventional television will remain the cornerstone of
essential support for the Canadian independent production sector and the core of
the Canadian television broadcasting system." (As
3444 The policy that should apply to conventional
television is a consistent requirement limiting any owner to a single
over-the-air station in one language in any market. Consistent with that policy
the Guild opposes the CanWest application to acquire both CHCH-TV, Hamilton and
CHEK-TV in Victoria. The Guild would take the same position regardless of
whether the company involved in the application were CTV, CanWest or any other
3445 In its response to the Guild's position on
CHEK, CanWest has misstated our recommendation, suggesting that what we said was
the Commission should approve CanWest's purchase of CHEK-TV as long as CHEK is
run as a repeater of CHAN except for its local programming. This is not what our
3446 The Guild's position stated clearly, in our
"The ... Guild opposes the CanWest application to acquire CHEK-TV, Victoria,
and urges the Commission to require that the trustee cause this asset to be
3447 Only if the Commission declines to require
divestiture did we suggest that at a minimum the market power CanWest would
exercise by owning two stations in the Vancouver/Victoria market should be
limited by requiring that CanWest's two stations offer the same programming,
with the exception of local content. The obvious rationale for presenting that
"second-best" option is that it reduces the resulting violation of the one
station per market policy.
3448 At page 21 of its Response to Interventions,
CanWest questions the integrity of the Directors Guild. It does so, as noted
already, on the false premise that the Guild is asking the Commission to reduce
CHEK to a repeater of CHAN.
3449 However, even the Guild's fallback position
reflects a consistent principle of restricting the power a single owner should
have in any television market. The Guild believes that its members will suffer,
rather than being helped, if there is less competition between national
broadcasting groups and if there are fewer buyers for national programming
rights. CanWest may legitimately argue that it rejects that principle of one
station per market, but it should not pretend that the underlying reasoning of
the Guild lacks integrity.
3450 What CanWest is really asking the Commission
to do is not just to give it one station in every market but also to give it
second stations in the two largest English-language markets. The Commission has
the opportunity, by rejecting the CHEK-TV and CHCH-TV applications, to send a
clear signal to the television industry that there are limits to the degree of
ownership concentration in television broadcasting that is consistent with the
public interest and the goal of diversity in the Broadcasting
3451 The one exception to this
one-station-per-market rule that the Guild accepts as reasonable concerns
stations which function as affiliates of the CBC. The current proposal calls for
CanWest to acquire CKRD-TV, Red Deer, CHBC, Kelowna and to run both stations as
affiliates of the CBC. The Guild supports these acquisitions by CanWest, as long
as they continue to operate as CBC affiliates. If they were ever to be
disaffiliated, ownership should be divested to owners who do not have stations
in the markets reached by these stations.
3452 Now, Pamela Brand has some comments concerning
the benefits package proposed by CanWest.
3453 MS BRAND: Good morning.
3454 While the Guild supports most of the CanWest
applications to acquire WIC stations, its support is conditional on a meaningful
package of benefits. Our particular concern with the benefits offered is that
there be an assurance that, with respect to Canadian programming generally, and
priority programming in particular, the benefits should represent expenditures
that would not otherwise have been made.
3455 There will be little difficulty in determining
that the amounts CanWest proposes are actually spent for the specific
initiatives promised. What will not be simple is determining that the spending
promised to support Canadian programming has not been offset by reductions in
spending on Canadian programming outside the benefits package. If this were the
case, the provision of a benefits package would account to little more than a
3456 What creates a particular problem is the
Commission's announcement in its June 11, 1999 policy statement, "Building on
"The regulatory requirement for expenditure on Canadian programming will be
eliminated effective September 1, 2000."
3457 In the absence of this Canadian expenditure,
or some alternative benchmark, it will not be possible to judge whether real
benefits are delivered. For benefits to be real, they must be incremental:
adding resources to Canadian programming expenditures rather than spending the
same money in a different way.
3458 Notwithstanding this fundamental concern,
there is no doubt that the benefits package includes valuable initiatives from
the perspective of the Guild's members. CanWest's commitments to the Canadian
Film Centre, the National Screen Institute, AMPIA, and other training and
development initiatives are certainly welcome. Most importantly, the proposed
Western Independent Producers Fund and the Promotion of Programming Fund are
thoughtful initiatives that will be helpful so long as the $5.6 million in
annual funding these two key programs require is not taken in whole or in part
out of CanWest's existing expenditures for priority programming.
3459 The Guild strongly urges the commission to
establish some benchmark figures for the five-year benefits period that will
make it possible to judge whether real and incremental benefits are provided.
This might be accomplished, for example, by looking at the most recent one to
three-year period in order to establish the percentage of revenue of the
stations CanWest is acquiring that was spent on all Canadian programming and the
percentage spent on priority Canadian programs. To be judged as incremental, the
promised benefits spending would have to exceed that percentage by the amount
3460 The Guild also assumes that the Commission
will not take the benefits into account when it decides on appropriate
conditions of licence for the CanWest chain of stations when that licence
hearing is held sometime in the next year. Similarly, since the resulting new
licence conditions will apply over most of the five-year benefits period, the
Guild asks the Commission to ensure that the benefits are additional to any
further commitments CanWest may be asked to make as part of the licence renewal
3461 Those are our comments. Thank
3462 We would be pleased to answer
3463 CHAIRPERSON OF THE COMMISSION: Thank
3464 I would ask Vice-Chair Wylie to ask the
3465 COMMISSIONER WYLIE: Good morning, madam and
3466 I must say I was also puzzled by your
recommendation as an alternative to not authorizing the ownership of both CHEK
and CHAN by CanWest or as -- I guess that's your second choice, would be to
require that it be a repeater. I find that a puzzling recommendation as well as
some of the parties who have commented on it.
3467 To you the reason seems to be the principle of
dual ownership, and that principle is somehow left breached if the two stations
broadcast the same material.
3468 MR. GOLUBOFF: I think generally what you're
saying is correct and is something that we agree with.
3469 I think that Paul would be able to comment, I
think, better on our behalf.
3470 COMMISSIONER WYLIE: Before you do, my second
question would be: Wouldn't it be legitimate for the Commission to waive the
violation of the principle against the -- and yet allowing two stations to
be owned by the same owner against the possible advantage or the arguable
advantage of having two stations, programmed differently, owned by the same
3471 I would have thought that the one was better
for the viewer than the other since there will be dual ownership in any case. So
I am puzzled as well. Perhaps you have some further comments.
3472 MR. GOLUBOFF: I think Paul can give you some
clarity on why our position is what it is.
3473 MR. AUDLEY: First of all, the primary position
of the Directors Guild is that the station should be divested, and that's the
recommendation that is made. The Guild has opposed permitting the takeover of
CHEK by CanWest Global.
3474 The fallback position which you asked about
would simply mean that instead of programming separately two schedules, both for
the same market, they would, in essence, be offering advertisers commercial
opportunities on the same set of programs with the exception of local
3475 If I'm a broadcaster, I would prefer to have
two completely separately programmed entities, both at the national level and
locally, rather than to be offering the same set of programs, with the exception
of local, on two different services.
3476 But I think the issue here is that
assuming -- and this I presume will be related by the Commission to the
question of whether it issues one or more additional licences for this market
and for applications that you're considering now, but the issue here is if one
assumes that CHEK will be programmed separately, should it be programmed by the
same company that is programming CHAN, the Guild's position, both at the local
level and nationally, is that it's better to have two separate entities making
the programming decision than to have one party making decisions for two of the
competing services or the allegedly competing services in the
3477 COMMISSIONER WYLIE: Your first position is
easy to understand. It's the second one that causes a problem because if the
Commission doesn't require divestiture it may well be, for example, that the
market -- which you seem to be concerned about -- advertisers and the
ability of broadcasters to generate revenues would not be possible in the
market. Therefore, to put it up for sale in the circumstances, whether there's a
result from the last hearing we had, as you pointed out, that would probably be
the answer, other than the principle: no two stations for one
3478 But then if the Commission were to decide that
that's not possible, then -- should it not look at the possibility of two
differently programmed stations? I would have thought that from the perspective
of the viewer that's better, and if the broadcaster can do it financially, it
would be better for you, for the Guild as well, because there would be, as was
discussed yesterday, an extra eight hours of Canadian programming, some local
programming. It's difficult to understand, unless it's the principle itself that
bothers you, but obviously if you're prepared to have repeaters it's
3479 MR. AUDLEY: It is the principle that's a
concern. But I think I can assure you that any broadcaster will tell you that if
they have to put the same programs on CHAN as they put on CHEK, that will affect
their market share in the Vancouver- Victoria lower mainland market and it will
affair their ad revenue, and it will reduce their competitive heft and their
market dominance in the Vancouver-Victoria market.
3480 COMMISSIONER WYLIE: Yes. Well, I won't pursue
3481 We look at it from the perspective of the
viewer, of course, and I would have thought you would look at it from the
perspective of the directors having the most outlets possible for different
3482 MR. AUDLEY: But if I can just
3483 The position is that it should be sold. If
it's sold, it will clearly be programmed separately, but you're also looking at
the opportunity to have an additional programming choice that's separately
programmed by licensing one of the applications or more than one that are
already before the Commission.
3484 COMMISSIONER WYLIE: What if we did both. Then
at your end you would have three outlets instead of --
3485 MR. AUDLEY: I don't think the Directors Guild
has a position on that. If you ask me as a consultant, I would do an analysis of
what I thought was bearable in the market without damaging the ability of the
individual broadcasters, all of them, to provide high quality Canadian
programming that's consistent with the Broadcasting Act, because at some point
it's quite clear that what gets compromised at a very high level of competition
is Canadian programming.
3486 COMMISSIONER WYLIE: My second question is
about the measures that could be established to ensure incrementality, which you
have spoken about in your written brief and again this morning. Do you have
anything more specific as to how this could be done on an ongoing basis? You
seem to be focusing on expenditures.
3487 MS BRAND: Yes. I suppose the annual income tax
returns could be taken and examined. That's how we would monitor it --
3488 COMMISSIONER WYLIE: So, in your view, the best
measure would be expenditures.
3489 Is it your view that the TV Policy was remiss
in focusing on the hours of Canadian programming exhibited or are you just
saying that in the case of benefits -- in the case of a transfer,
expenditures should be brought back into the measures?
3490 MS BRAND: We feel that not just in the case of
transfers but generally the expenditure requirement was very beneficial to
Canadian programming and the broadcasting system in Canada. We do feel that it
has had not such a salutary effect on Canadian programming.
3491 COMMISSIONER WYLIE: Thank you very much for
your presentation, madam and gentlemen.
3492 CHAIRPERSON OF THE COMMISSION: Thank you very
3493 MS VOGEL: I would like to call Canadian
Independent Record Production Association, please.
--- Pause / Pause
3494 MS VOGEL: Madam Chairperson, I don't see
anyone from that organization. I'll recall them later.
3495 I would like to invite the National Broadcast
Reading Service to come forward, please.
3496 CHAIRPERSON OF THE COMMISSION: Good
INTERVENTION / INTERVENTION
3497 MR. SMITH: Madam Chair and Members of the
Commission. Hello. My name is Drake Smith. I work for the National Broadcast
Reading Service. Two of our directors, including our vice-president, had planned
to be here but unfortunately were called away on short notice. I was asked by
Vice-President Alix Nicoll to appear in her stead to show our support for the
applications by CanWest Global.
3498 As you know, NBRS holds a licence to operate
the satellite-delivered national audio service known as VoicePrint. I am the
Vancouver Bureau Chief.
3499 At no time has NBRS received ongoing funding
from any sources, private or public.
3500 NBRS has exhausted all sources of funding and
is currently operating on a volunteer basis. All paid staff have been laid off
but many, like myself, are continuing to work without being
3501 This underscores the importance of the benefit
monies which CanWest Global has committed to provide to NBRS for VoicePrint if
the Commission approves these applications.
3502 The half million dollars which CanWest has
committed to give to VoicePrint will allow NBRS to resume paying the staff and
will help to ensure that VoicePrint can continue to serve the broadcasting
3503 There are 2.8 million vision impaired in
Canada. 500,000 regularly listen to VoicePrint.
3504 We believe it is vitally important that
VoicePrint's unique service continue to be available to all Canadians and, in
particular, to meet the needs of the vision impaired.
3505 The CanWest grant will help VoicePrint to
continue to meet the unique needs of this segment of Canadian
3506 The CanWest grant will be a big help to ensure
that VoicePrint can continue its operations.
3507 We believe the CanWest benefit is truly in
keeping with the spirit and intention of the Commission's benefits
3508 While any monies would be gratefully accepted,
we are especially grateful that CanWest has decided to provide VoicePrint with
the grant as a one-time, lump-sum payment immediately upon approval of these
3509 We thank CanWest for its support and urge the
Commission to approve its applications.
3510 We thank the Commission for this opportunity
to participate in the process.
3511 CHAIRPERSON OF THE COMMISSION: Thank
3512 I would ask Commissioner
3513 COMMISSIONER PENNEFATHER: Good morning, Mr.
3514 MR. SMITH: Good morning.
3515 COMMISSIONER PENNEFATHER: Your presentation
this morning clarifies the lump sum payment. I believe it was still a question
at the time of your written intervention. So are you saying that it has been so
confirmed in the meantime, that it's going to be a one-time lump sum
3516 MR. SMITH: I believe during the CanWest Global
presentation on Tuesday they made that clear. That was my understanding of their
3517 COMMISSIONER PENNEFATHER: You say in paragraph
"...the CanWest benefit is truly in keeping with the spirit and intention of
the Commission's benefits
3518 Could you elaborate on why you feel
3519 MR. SMITH: I would have a tough time
elaborating upon that. Unfortunately, I didn't write that line, so -- I
only read it.
--- Laughter / Rires
3520 COMMISSIONER PENNEFATHER: Well, what do you
--- Laughter / Rires
3521 MR. SMITH: What do I think?
3522 COMMISSIONER PENNEFATHER: Yes.
--- Laughter / Rires
3523 MR. SMITH: Well --
3524 COMMISSIONER PENNEFATHER: I don't want to put
you on the spot.
3525 MR. SMITH: I think it's --
--- Laughter / Rires
3526 MR. SMITH: You already have.
--- Off microphone / Sans microphone
3527 MR. SMITH: Should I give it a shot?
--- Laughter / Rires
3528 COMMISSIONER PENNEFATHER: I would like you to
give it a shot.
3529 MR. SMITH: Okay. I'll give it my best
3530 COMMISSIONER PENNEFATHER: Give it a
3531 COMMISSIONER WYLIE: (Off microphone / sans
microphone...) a consultant?
--- Laughter / Rires
3532 MR. SMITH: Let's see now -- no. As you'll
notice, I left my consultant at home.
--- Laughter / Rires
3533 MR. SMITH: We can't afford consultants.
--- Laughter / Rires
3534 COMMISSIONER PENNEFATHER: Yes. I guess that's
the point you're making today.
3535 MR. SMITH: I think it's -- the VoicePrint
is a service for blind people, as you know --
3536 COMMISSIONER PENNEFATHER:
3537 MR. SMITH: -- and there are
2.8 million vision-impaired people across the country, as you also
3538 We are delighted to have the offer of
assistance from CanWest Global in this proposal. It allows this service, which
is a lifeline for blind people, to continue, but we would welcome any donation,
large or small, from anyone, CTV --
--- Laughter / Rires
3539 CHAIRPERSON OF THE COMMISSION: (Off microphone
/ sans microphone...)
3540 MR. SMITH: You name it.
--- Laughter / Rires
3541 MR. SMITH: And they become our friends.
--- Laughter / Rires
--- Off microphone / sans microphone
3542 COMMISSIONER PENNEFATHER: Well, you're
3543 MR. SMITH: Thank you.
3544 COMMISSIONER PENNEFATHER: You actually have
spoken well to the importance of VoicePrint in terms of a service for all
Canadians in the broadcast system, reaching all Canadians inclusive of those who
are visually impaired.
3545 Just on the matter of funding, could you just
clarify for me, you say that you have exhausted all sources of funding. I don't
want the details of that funding, but is this the first time that a broadcaster
has in fact come forward with funding for VoicePrint or is this a unique
contribution or is it part -- has this been done before?
3546 You don't have to name anybody, but I'm just
trying to get a sense. Is this a new -- as you say:
"...[we have not] received ongoing funding from any sources, private and
3547 So this is a very new effort on the part of
3548 MR. SMITH: Well, this particular situation,
again, is not ongoing funding, so this would be a $500,000 injection to enable
our organization to resume its operation as staff.
3549 We have about 400 volunteers across the
country and the service is largely volunteer- driven. There's a small staff of
about I think 20 or 25 people nationwide. So this injection of money into our
organization would allow our organization to resume paying staff across the
3550 COMMISSIONER PENNEFATHER: Well, thank you very
much for being here and for making your point very clearly.
3551 MR. SMITH: Thank you very
3552 COMMISSIONER PENNEFATHER: Thank
3553 COMMISSIONER WYLIE: Mr. Smith, if you were an
applicant you would get a licence on your sense of humour alone.
--- Laughter / Rires
3554 MR. SMITH: Well, if I may, I'll take your
phone number and call you about that later on.
--- Laughter / Rires
3555 CHAIRPERSON OF THE COMMISSION: Thank
3556 MR. SMITH: Thank you.
3557 MS VOGEL: I would like to call the Regional
Municipality of Hamilton-Wentworth to come forward now, please.
3558 CHAIRPERSON OF THE COMMISSION:
3559 MR. HAYES: Good morning.
3560 CHAIRPERSON OF THE COMMISSION: You're far from
3561 MR. HAYES: We are far from home. Yes, we are.
Actually, if this was a production of the "Wizard of Oz" we would be cast as the
little munchkins. We're the little people.
--- Laughter / Rires
INTERVENTION / INTERVENTION
3562 MR. HAYES: But we really appreciate the
opportunity to be here today.
3563 My name is Matt Hayes. I will be speaking on
behalf of the employees of Ontv, of which I am one. Next to me, the
distinguished gentlemen, Jack Macdonald, former mayor of the City of Hamilton,
and next to Jack is Barb Whiteley and Barb will be speaking about the concerns
in the community of Victoria.
3564 I'll begin.
3565 I appear before you today feeling a little bit
like Oliver Twist, the unwanted orphan asking for just a little bit more. I have
been an employee of Ontv or CHCH for almost 20 years, long enough to remember
the good old days, but I have to say the last dozen or so years have been a
little bit rocky.
3566 During that time, the station has bounced
around from owner to owner like an unwanted orphan, each transition creating
anxiety for staff while leaving our audience confused and bewildered as we
change identity and strategy. Our outgoing owners believed we needed to
emphasize Toronto in our news coverage, a move that was suicide for a station
based in Hamilton traditionally covering Hamilton, Burlington, Oakville and the
Niagara Peninsula. And I have to tell you, as a born and raised Hamilton
resident, WIC could have spent $100 million on beefing up resources in Toronto
and people in Toronto would not watch a newscast based out of Hamilton. There's
no love lost between Toronto and Hamilton.
3567 Meanwhile, the residents of Hamilton started
to feel quite alienated. The community responded by tuning us out. As an on-air
personality, I get the feedback at the grocery store, at the bank, at the gas
station everywhere: What's going on at your station? For me, pride had given way
3568 Those same people are now expressing hope at
what they have heard of the CanWest Global proposal, and so am I. What is so
refreshing is that CanWest seems to understand who our audience is and plans to
cater to them rather than frustrate them.
3569 The only thing that we can give our audience
that they can't get anywhere else is local coverage. That's what the people of
Hamilton, Burlington, Niagara, Oakville want and that's what they deserve. The
employees of Ontv deserve some stability and to reach their
3570 I work with some of the most talented people
in the industry, but right now morale is at an all time low. If I were a real
estate agent selling Ontv I would call it a fixer-upper, a handy man's special.
Mr. Craig said yesterday that this is not a rescue mission, but I tend to
disagree. We need the Midas touch along with the financial resources that a
successful broadcaster like CanWest Global will bring.
3571 I know you have concerns about this deal but,
speaking for the employees back in Hamilton, we feel we are on a slippery slope.
Rejection of this deal will put us once more into limbo as we await an uncertain
fate in the hands of lesser broadcasters. We're tired of being orphans. We
deserve this deal and so do the people in the community that we
3572 CanWest plans to increase the hours of local
programming to allow us to repair our tarnished image in the community, as well
as create new and exciting opportunities for our staff. Ontv staff applauded the
details of the CanWest Global plan when it was unveiled to us a few months back.
There was a sense of relief in knowing we had a chance at a bright future. Right
now, this is the only hurdle that stands in our way.
3573 I don't believe there are any other
broadcasters out there prepared to put as much into Ontv as CanWest plans at
this time. If I was allowed to say just one word here today it would be: Help!
Help us to be the best we can be. If you look at what's best for the employees
of Ontv and the Hamilton-Niagara-Oakville community, I'm confident that you will
vote in favour of the CanWest Global proposal.
3574 And one other footnote to this, and this is
just something that I have observed over the last few days, this is the first
time I have attended a hearing but historically it's always appeared to me that
when a broadcaster comes before the Commission they promise everything, the moon
and the stars. They paint a picture of Shangrala and all I ask here today is
that you make sure that they stand up to every word, every letter, every promise
that they make to you. I think if you make sure that they do everything that
they say that they will that Ontv has a chance of being a better station than it
was in the good old days.
3575 I would now like to turn things over to a man
who never shies away from using the word "Hamilton" in his sentence, Mr. Jack
3576 MR. MACDONALD: Madam Chair and Members of the
Commission, I thank you very much.
3577 As a Canadian I'm proud as hell that this kind
of thing happens. I haven't attended a long hearing and I find myself thrilled
that this happens, that folks who are going to control our airways and use our
airways are obliged to make their case.
3578 Additionally, I'm grateful for the learning
experience of watching. I'm also amused at a process by which an applicant puts
forward his/her case and then all of their opponents get to take nasty pot-shots
at them. It's just not a kind of a thing I'm used to seeing.
--- Laughter / Rires
3579 MR. MACDONALD: They're pretty good at the
pot-shot stuff. It's an interesting thing to see this -- I don't know where
else this happens.
--- Laughter / Rires
3580 MR. MACDONALD: They say nasty things down the
hall, but right out in front of the world. It's quite unusual.
3581 You have a letter which I wrote earlier. I
have a clear memory of writing a similar letter in about 1953 in support of an
application which was headed by Mr. Ken Sobel, a remarkable Hamilton citizen,
and supported by the local newspaper and the second radio station. Mr. Sobel
controlled CHML, a wonderful radio station. It was a thrilling opportunity. I
mean, I'm a guy who at that point I'm dealing with "Howdy Doody" and "Kukla,
Fran & Ollie". The family all came into the living room and sat chairs up to
eat our dinner watching Kukla, Fran and Ollie. We thought that was a great deal.
We were later exposed to such great cultural events as "Uncle Miltie".
--- Laughter / Rires
3582 MR. MACDONALD: We had all that good
3583 But the original application was for CHCH.
Just the thought of having our own television station, our very own station
based in Hamilton, concentrating its programming and news coverage on Hamilton,
Hamilton people, Hamilton events, produced a great excitement in the city, all
over the city: Hey, we're gonna have our own television station; its purpose is
to serve us. That's a great notion and has a great impact on the personality of
the whole community. It certainly did when the station went on the air, and it
was fully rewarded all that expectation.
3584 I remember the electricity, the first signals
going on the air. Anybody who had any kind of name around town got to show up at
the television station and watch the signal, how it goes. And people all over
the area came in just to watch great electricity about our television
3585 Now, I should have begun by telling you I'm
not here to ask you to do anything except one thing. I don't know a whole hell
of a lot about all the detail that's been going on. I know that I'm entitled as
a Canadian to my television station, and it hasn't been there for some time. I'm
sad to relate that.
3586 My television station gives energy and
excitement and enthusiasm to a town. My television station presents me with
news. And when it stops doing that on a local basis, it ain't my television
station any more. It isn't really anybody's television station when it tries to
be everything to everybody and winds up being very little in the home town. I
want to see that change.
3587 I don't want to buy a television station, I
don't want you to stop these people so that I can buy this television. I don't
have that -- I don't want you to force them to hire me or anybody I know,
--- Laughter / Rires
3588 MR. MACDONALD: I don't want to do any of
those. I just want you to give me back my television station.
--- Laughter / Rires
3589 MR. MACDONALD: I was a member of the board of
control at the time, a hundred years ago when that infant television station
went on the air. And later I was privileged to be the mayor of the City of
Hamilton. And CH performed an enormous service.
3590 It forced the political leaders to face the
people. And it's a whole lot different when you're looking at them through that
little circle of glass and know that they can see your every pore. It's a real
challenge for a politician, and ought to be, and ought to be there available
every day for events within the community, to see ourselves as we are, warts and
all, to see the good things happen, to see the growth potential, to understand
who we are, who we are as Canadians of course, but who are we as citizens of our
local community. I find that very, very wonderful.
3591 This station did some funny things. Now,
they're funny in some sense, but they did a program called "Full Circle", and
all of us who were -- most of us who were in politics, federal, provincial
and local, got around in a circle and we had three or four journalists trying to
make us look like fools. And that was the healthiest possible thing, because I
could look at a Member of Parliament and say, "You're not doing your job for the
city", and that member had an opportunity to face me down and everybody in town
who really cared could watch that happen.
3592 That's really great stuff. That's great stuff.
It doesn't happen any more. These applicants have said they're going to do it. I
believe they're going to do it. And I think that's good.
3593 I also did a program, if you can imagine
someone as irreverent as I doing a program in a time frame of a half an hour on
a Sunday -- nobody's watching a lot, but you know -- but I could talk
with friends and personalities, both local, provincial, federal, but mostly
local people. A magistrate, what kind of a guy is he? We don't have magistrates
any more in Ontario, but what kind of a person is this? What makes him tick?
What makes him function while he is on the bench dealing with the bad
3594 That's the kind of thing that doesn't happen
any more in my town, ordinary people as well as extraordinary people being
exposed to the whole community. And the guy who works at Stelco can come to feel
that he knows that person a lot better than he can in a little program clip.
That doesn't happen.
3595 I implore you to approve this application.
Give me back my television station. Now, I don't speak for everybody. Jessie and
the kids are enthusiastic about what I'm saying and many of my friends, the
folks I have talked to over the last few weeks, would be here saying: Please
give us back our television station. It's an important part of the
3596 But if you don't do that, I'm concerned very
much because you would then leave us with an unwilling owner who is unlikely to
do the kinds of things which I have outlined as I believe to be important for a
community. Or, after some little time, perhaps some vagrant owner will show up
and take over and we will be back where we started.
3597 I'm confident that the applicants have the
financial capacity -- and I know that because all their opponents came here
and said they're going to make bags of money --
--- Laughter / Rires
3598 MR. MACDONALD: -- so they're not going
to have any trouble doing all the things they told you they were going to
3599 They have a proved record in the industry of
doing good things. Again, I'm told they are so powerful they frighten even big
networks, you know. We don't get another opportunity at this. This isn't
something we can just go out and pick up at a department store. Here are these
people on site, ready to do it, have the capacity, the
3600 Incidentally, they have appointed five
extraordinarily capable, fine local citizens to sort of watch them, to see that
they do what they said they would do, and to report to your Commission. I think
that's pretty good news. I know those five people and I know that if they don't
tow the line they will catch it big time. All of that is good.
3601 Please give me back my television station.
--- Applause / Applaudissements
3602 MS WHITELEY: Good morning, Madam Chair and
3603 I'm a little bit intimidated by this process.
I think I represent the only person in this room who's just an ordinary viewer.
There's no personal axe to grind, no professional benefit to be derived. I have
no political agenda. I'm not an eloquent speaker and I don't have one of those
wonderful voices like I have heard today and yesterday, but I really welcome the
opportunity to be here and speak to you.
3604 I guess I heard it yesterday talked about that
the heart of the system is the viewer, so that would be me. I have an awesome
responsibility. I'm representing the heart and soul of the system: the viewer.
So, as I said, bear with me because I'm a little bit nervous. I'm not used to
this kind of process. But I felt strongly enough to write a letter and asked to
be present and I'm grateful that you gave me this opportunity.
3605 My name is Barbara Whiteley. I have lived in
Victoria, Vancouver Island for most of my life. I was raised and educated in
Victoria and, in turn, raised my family there. I graduated from the University
of Victoria with a Bachelor of Science and started my career as a social worker
and counsellor. So you can tell I'm a caring person right off the
3606 I then moved into marketing and for many years
had an entrepreneurial bent.
3607 Presently, I am one of three principals in a
small software development company. Hopefully, you will be reading about me
3608 I support this application of CanWest Global
in general, but I will keep my comments to how this application relates to my
community, which is the Vancouver Island community. I would like to address a
key issue which, if I understand it correctly, may preclude CanWest from taking
over CHEK. This is that CHEK and BCTV stations are considered to be in the same
market and that the CRTC has a ruling of one station per language per
3609 This brings me to the point that I would like
to stress in my presentation, and that is that Vancouver Island is a distinct
and unique community from Vancouver, both geographically and culturally, and is
seriously underserved in local programming news and sports coverage, and we have
been for a very long time.
3610 CanWest Global, in its application to take
over CHEK, will revitalize and bring much needed expanded coverage and focus on
island events and issues. Vancouver Island residents were disappointed when four
years ago CanWest Global was not granted a licence for a new TV station.
Instead, yet another Vancouver station was granted that licence because, once
again, we're lumped in as one region. And we were the losers. There are a lot of
people very disappointed in that.
3611 Island residents showed enthusiastic support
at that time for expanded local programming and news coverage specific to our
needs that was promised by CanWest. Quite frankly, it is frustrating to be
considered an annex to Vancouver, and no insult intended. Vancouver is a
wonderful place. It's just a very different type of region than Vancouver
3612 We are distinct politically, and certainly
geographically. If you have ever tried to get to or off our island using the
B.C. ferries you will understand what I mean. We might as well be our own
country because it takes about as long to get to Vancouver -- this was my
experience yesterday, I could have been in Toronto faster. So definitely we are
distinct geographically; and culturally to some extent, in that we are a little
more laid back as island people, and certainly environmentally.
3613 So our issues are different and the kind of
coverage that we are looking for is different. We don't want to turn on
television and repeatedly watch what's going on in the lower mainland. That's
okay, that's part of our information, but we want to know what's going on around
3614 I submit that we deserve to be recognized as a
distinct area, a distinct market and, as such, have our unique programming needs
met. CanWest Global is offering us just that opportunity again by revitalizing
CHEK and creating a dynamic new commitment to local coverage for all island
3615 I particularly applaud the following new
programming. The additional new storefront news bureau for the communities of
Port Alberni, Campbell River and Tofino. Unless something extraordinary happens,
those communities don't have any coverage on a regular basis. So this will link
those communities to each other and link them to us.
3616 The 90-minute island report each evening
featuring consumer and investigative issues I think will be interesting and
again will help pull us together as an island, give us more information about
3617 I'm interested in the half-hour interactive
program called "Your Say". I think that will be fabulous for us. We get to make
our comments and speak on local issues, which currently we really don't get to
do in a significant way.
3618 "Sportspage". I am the furthest thing from a
jock, but I raised two sons and they were involved in sports. Try to get local
coverage and see, you know, what the local teams are doing. We have some
outstanding athletes on the island and there isn't enough attention. We don't
get to see that. So we can keep track of our local athletes and their sports
events by this venue.
3619 "Island Minutes", one-minute vignettes
featuring outstanding locals, and I know that's part of a package of short
segments they're going to do about all Canadians. I think this is wonderful.
Finally some positive programming. Something that says good things are happening
in news where we're discussing the people who are doing some positive things in
our community, and I think that's a very important thing to focus on. I think
that generally Vancouver Island people might have a little bit of an inferiority
complex compared to Vancouver because our issues aren't addressed as important.
So I think that the "Island Minutes" will do something very positive for
3620 I'm also excited about the development of a
community advisory board made up of members of the local community, which will
provide necessary feedback as to how well the station is serving our market. I
think that's fabulous. And this will ensure that CHEK is in step with its
viewers. We don't have something like this right now.
3621 And offering a million dollars to establish a
production fund for First Nations programming. I haven't heard anyone comment on
that. I might have missed it, but I haven't heard a comment on that. I think
that's timely and progressive, and I applaud that also.
3622 Lastly, something very close to my heart, a
contribution in support of the media awareness network that encourages critical
thinking about media information and the power of media in the lives of children
and young people. I think that represents a huge benefit to our community and
society in general. So I'm happy about that.
3623 In summary, I know I speak for many Vancouver
Island residents. I can't say how many I speak for. I just know that the people
that I know that know I'm here are going, "Way to go. Ask for this for us." When
I say that we welcome the benefits we will receive from having CanWest Global at
the helm of our local TV station, revitalization and a renewed commitment to
CHEK is long overdue.
3624 Vancouver Island is a very fast-growing
community and our population actually is becoming quite sophisticated because we
attract some very interesting people because of our temperate climate, relaxed
lifestyle, and not to mention some of the finest golf courses in Canada. So it
even stresses that our problem is -- that we do not have proper coverage
and I guess it's even more obvious as people from other places come and retire
in Victoria and realize: What is this? I mean, I don't want to slamcheck because
I think they have done the best that they can with limited resources and not
being affiliated with a much larger organization. But it's time for change and
it's time for growth so, respectfully, I would ask that you consider us as a
separate area and I hope that we're not cut out of this loop because of the
regulation that says not two stations in one market.
3625 So that was my main concern here. Thank you
very much. I guess we're open for questions.
3626 CHAIRPERSON OF THE COMMISSION: Thank
3627 I would ask, first, Commissioner Pennefather,
and there's Commissioner Grauer who has a comment too.
3628 COMMISSIONER PENNEFATHER: Thank you, Madam
3629 Good morning, and thank you for coming here to
this hearing from points both nearish and far.
3630 You mentioned, Dr. Macdonald, that this
process is an important one and an interesting one. I have to say that your
presence here today completes that process. It would not be complete without the
viewers, and you're voicing the opinions of viewers. So thank you for being
3631 MR. MACDONALD: Thank you. I found it fun.
--- Laughter / Rires
3632 COMMISSIONER PENNEFATHER: When I looked at
your written comments from all three, Ms Whiteley, Mr. Hayes and Dr.
Macdonald, I had wanted to hear more from you on what "local programming" means.
I have certainly, in fact, been pleased that you have elaborated on that, what
you expect to see on the screen when we use the term "local programming". I
wondered if you just wanted to add a little bit to that and then Commissioner
Grauer has a question.
3633 MR. MACDONALD: Well, I would like to see a
renewal of the kind of programming that Sobel did.
3634 Perhaps I should maybe make a point here
because I have heard the notion that we're bulked and we get really steamed when
people bulk us with Toronto. Everybody in the country gets a little hate for
Toronto, but if you live right under their shadow it's difficult, it's
difficult. We're not Toronto.
3635 Ken Sobel understood we weren't Toronto in all
concepts, not only in the programming concept to talk to and about Hamilton,
Hamilton's institutions, Hamilton's people, but also to make that a
market -- and it's a wonderful market. As your records will show, Mr. Sobel
made a ton of money and won great awards as one of the outstanding independent,
totally independent stations. And he did that in Hamilton -- Hamilton and
the Niagara and Oakville area. Outside of Toronto. A separate, healthy, strong
3636 I want to see that. I want to see -- and
I didn't mention in my remarks, although in my letter I did allude to the
commitments made by the applicant to McMaster University and to Mohawk College,
where Mohawk College has a school of broadcast journalism. What a perfect fit,
that those kids who are going to that -- and I have a son who's a graduate,
incidentally, of that school. He decided to go straight after he graduated, but
he is a graduate of the School of Broadcast Journalism -- no offence
--- Laughter / Rires
3637 MR. HAYES: None taken.
3638 MR. MACDONALD: So let's see what those kids
are doing and what they're able to do and show that to the whole community.
There are miracles going on in McMaster University as we speak, and every day,
and we in Hamilton don't know enough about those, are not seeing
3639 And there is a difference -- and,
incidentally, I write for a newspaper and I love newspapers, and newspapers give
us information, but television gives us news. And there is a difference. That's
a part of our lifestyle now. We take our news from television and our
information from newspapers.
3640 So to have that out there, to have somebody
like Matt out in the street with a camera and a microphone talking about the
Polish alliance having their annual meeting, that's great stuff in Hamilton.
It's important stuff. Ain't nobody talking about it now.
3641 MR. HAYES: If I can just add something to
3642 Over the last couple of years it
became -- at one of the roughest points in our newsroom we were instructed
to avoid using the word "Hamilton" in your news stories if at all possible so as
not to offend the audience in Toronto. Our station should be a reflection of our
community, and it hasn't been for a long time. There was a time when that was
the case, but it got to a point where we had to disguise the fact that we were
from Hamilton so that hopefully when somebody is flipping around the dial, if
they don't hear that dirty word, maybe they will think they're watching somebody
else, like a station in Toronto. And I understand the rationale because they are
going for that piece of the pie, which is Toronto, and ratings and numbers and
revenues, but the thing is that this station is not a Toronto station, and it
seems that the current applicant gets that message and wants to take the station
in a different direction, a direction that, as Jack has mentioned so eloquently,
this station used to be.
3643 COMMISSIONER PENNEFATHER: Thank you. I wasn't
clear about that.
3644 MR. MACDONALD: It appears the most significant
thing about the application is their choice of returning to the call letters.
You have no idea what that means on the street in Hamilton. That message comes
clear: Hey, these guys are going to bring us back CHCH. That's
3645 COMMISSIONER GRAUER: I think that, you know,
your presentation here today collectively has touched on the essence of the
issues that we need to consider when looking at two stations in, quote, "one
market". Born and bred in British Columbia, live here still, and went to the
University of Victoria. I understand exactly what you're talking
3646 What's very intriguing here, though, is that
in fact CHEK is owned by BCTV presently as an exception to our current policy,
and when we talk about two stations in one market it's an advertising term. It
has to do with signals received over the air. You know, I think what's common is
that both people in Victoria want to see themselves reflected on their station
and not have a station that is trying to generate the revenues in another
market, and the same is true of Hamilton, if I have characterized it
3647 MR. HAYES: Right.
3648 COMMISSIONER GRAUER: The challenge for us is
to find the best way to make that happen. As I say, it's -- you know,
having you here today, a two-in-one situation, I don't want to ask you a
question that you may or may not have thought of, but --
3649 MR. MACDONALD: Go ahead.
3650 COMMISSIONER GRAUER: -- it is -- do
you think -- have you considered and do you think that an independent owner
of CHCH can't help but be magnetized by a Toronto market whereas somebody who
already has a station in Toronto will, by their very nature, want to create a
second market and serve that one?
3651 I think the same is true of Victoria. I mean,
this is a question. I mean, is it something that you think it enhances and
ensures someone will stay focused as opposed to not?
3652 MS WHITELEY: I think if we're part of a larger
picture, alluding to your second comment --
3653 COMMISSIONER GRAUER: Yes. But there's a larger
picture. What I'm really saying is, the question is: Two stations in one market,
is that integral, in your view, to seeing the local community
3654 MR. HAYES: I think the bottom line is whether
or not the community is served. Television is a very expensive business. You
were just mentioning about how -- would the community be better served by
an independent station? No. That independent station is going to automatically
try and work some revenue out of the bigger piece of the pie. In our case, it
would be Toronto.
3655 We need an owner like CanWest that has the
deep enough pockets to make this happen for us.
3656 MR. MACDONALD: I think there are two points
and, with respect, I have tried to make the point that Sobel and CH did very
nicely, thank you, in this market because they worked this
3657 They were not trying to sell a market in
Lindsay or Peterborough. They were selling a market in
Hamilton-Niagara-Oakville, and that's where they put their focus. And as a
result of focusing on selling in that market, they also focused on telling
people about what happens in that market -- very natural kind of
thing -- your commercial conjecture that the applicant in this case is much
more likely to make a strong market out of where the original CH
3658 The situation for us is we have -- I have
about three times as many television channels as I'll ever need. And my kids are
watching some goofy stuff on various places. I don't need all those. I don't
need any more. But I do need a television that's mine, a television station
that's mine and is talking to me and my kids and my grandchildren. I need that
3659 I hope that's helpful.
3660 COMMISSIONER GRAUER: It's very helpful. Thank
3661 COMMISSIONER WYLIE: Gentlemen, I can't resist
but saying I'm very impressed by how well you handle your "H's".
--- Laughter / Rires
3662 CHAIRPERSON OF THE COMMISSION: Thank you very
3663 MR. HAYES: Thank you.
3664 MR. MACDONALD: Thank you.
3665 MS WHITELEY: Thank you.
3666 MS VOGEL: I would like to call five parties
now that have agreed to present as a panel. First, Peace Arch Entertainment
Group; second, Pyramid Productions Inc.; HBW Film Corp.; Brenco Media Ltd.; and,
Great North Communications Ltd.
3667 Would you come forward,
3668 CHAIRPERSON OF THE COMMISSION: Good morning.
Welcome. I see you have the right proportions. Two panels have the right
proportions: four women, one man.
--- Laughter / Rires
3669 CHAIRPERSON OF THE COMMISSION: You know there
are days where there's colour and there are days where there's proportion of
INTERVENTION / INTERVENTION
3671 MS McLELLAN DAY: Thank you.
3672 Good morning. First of all, just in polling
the panel, this is the first we had heard that we were presenting as a panel,
all of us, but nobody seems to have any objections. So that's all
3673 Madam Chair and Commissioners, thank you for
providing us with this opportunity to speak with you today.
3674 My name is Kirstie McLellan Day. I'm President
of Pyramid Productions Inc. I'm based in Calgary. I filed a letter in support of
the applications by CanWest to acquire certain television broadcasting assets
3675 My independent Calgary-based production
company, Pyramid Productions, has produced a daily half-hour television series
on the movies and the people who make them, called "The Movie Show", since
3676 We also produce a weekly half-hour called,
"Reel Entertainment" for Superchannel and several one to two-minute movie-themed
3677 "The Movie Show" runs coast to coast in Canada
on the television network formerly known as WIC, and Pyramid Productions has set
up syndication through a Los Angeles-based company in 70 countries around the
3678 Now, last year WIC Television, decided on a
new direction to increase their profits. They revisited our long-standing
licensing deal and informed me that either I share half my profits in their
licensing fee, SOCAN remuneration and syndication deals in return for a
television window, or they would no longer purchase my show and would instead
create their own similar product and basically put me out of business. After
months of wrangling, I did manage to hold on to my fifteen-year tape library,
which they had initially insisted on co-owning.
3679 This is why I am such a huge supporter of the
CanWest application. I cannot tell you what enormous relief I felt when I heard
CanWest had tendered applications to acquire WIC. CanWest is not interested in
this type of strong-arm takeover pertaining to independent production houses.
They are instead committed to fostering growth in the western production
community In the past they have treated me with the utmost courtesy and respect,
and dealing with them has shown me their commitment to the growth of western
3680 CanWest has committed more than
$23 million over five years for western producers in a special fund that
will be administered by a third party independent organization. The total
benefits package for approval of this transaction is in excess of
$84 million with substantial benefits to national and local
3681 CanWest has also earmarked $5 million to go to
the CTF fund to create a special envelope for promotion of Canadian programming.
These funds will be administered by the CTF and will be used to promote Canadian
programs on radio, billboards, print, etc.
3682 The benefit in this type of promotion for
shows such as mine would be immeasurable. It would increase the profile of
independent Canadian productions so that we can compete with Canadian network
and American shows on a level playing field. I am gratified that CanWest intends
to give us our chance to strive for success.
3683 I'm also delighted that CanWest will establish
a $1 million international marketing fund to help small and medium-sized
producers like me market their productions abroad at NATPE, for example. I have
always done, at my own expense, NATPE marketing, and the idea of having my
broadcaster -- Canadian broadcaster roll up their sleeves and pitch in is
3684 In addition, CanWest has numerous cash
donations going to a number of organizations in the broadcast field, such as the
Banff Television, the Canadian Film Centre, the National Screen Institute, just
to name a few. The support of these institutions will provide my company with
more opportunity to market our shows in Canada.
3685 I would like to explain just a little bit
about how this works. In my case, I make a program that requires access to
interviews with movie actors. In all of North America the movie studios allow
only around 30 of these windows or opportunities. Canada has between two and
four windows, that is, two to four journalists whose shows can secure these
interviews depending on where their shows play.
3686 For 15 years I made "The Movie Show" and sold
it to WIC. I didn't make much on the licence fee. Yesterday one intervenor and
the Commission had a chuckle recalling how they used to pay $750 per half hour.
Well, WIC pays me $600 per half hour and takes half of it back.
3687 But I sold the show internationally, and in
their new direction WIC decided they wanted to increase their bottom line by
taking half my profits and their leverage was they could deny me access to my
content. No window, no content. No content, no show. No show, no sales
3688 If the broadcaster insists on siphoning off
half the profits, we are not building a strong, independent production community
no matter how many funds they invest. Funds in themselves do not build strong
independent producers. In fact, in my opinion they build strong dependent
3689 Independent producers should make a go of it
through decent licence fees and ad sales. We should do real business in the real
world based on the marketplace. But it's not uncommon for us to be paid two to
$600 per half hour for national rights. This makes it impossible to achieve
production values to move our product overseas or build good ratings in our
country -- our own country.
3690 Now, in speaking with CanWest, that doesn't
seem to be the way they want to do business. They do seem to be interested in
paying decent licence fees and supporting us and helping to promote our shows to
Canadian audiences and international buyers.
3691 Thank you.
3692 CHAIRPERSON OF THE COMMISSION: I thought we
would be hearing every one of you and then we will come back for questions.
INTERVENTION / INTERVENTION
3693 MS. H. WHITE: Thank you.
3694 I'm Helene White. I'm from Calgary, and how do
3695 I'm the President of HBW Film Corp. I have
been a member of the Alberta community in film and television since 1979 when I
first joined the industry association as an active member and subsequently
became a board member for three and a half years.
3696 It was in 1982 that I incorporated my parent
company. Since that time, my company and its subsidiaries has produced programs
in association with the following Canadian networks and their affiliates: CTV,
CBC, ASN Maritimes, WIC, Access and CanWest.
3697 We achieved our first CBC network licence in
1982 with an international award-winning documentary, and in the years between
1985 and 1990 created, wrote and produced the first and possibly the only
Canadian-syndicated television series that came out of Alberta at that time.
This series also won international recognition for three years of its production
and was the first Alberta program to be exported to the U.S.
3698 This background experience that encompasses
approximately 55 hours of independent film and television production, is the
basis for my analysis of the Alberta industry needs. It leads me to give the
CanWest Global applications referred to in this hearing my full support for the
3699 I believe it is vital that we have another
national television network in our country, and one that has ownership in
networks around the world as CanWest Global has can give even small companies
potential access to foreign markets as we build toward a larger, indigenous
Canadian production base. This trend toward bigger media companies is
Canadawide. Alberta independents must keep up with this pace as more and more
product is required to fill the evergrowing market needs around the
3700 CanWest Global is a company that has its roots
in both central and western Canada and it is positioning itself to play an
integral part in this fast-changing scene.
3701 Global plans to give a western focus to a
national public affairs program emanating from Calgary and a nightly national
news program to be broadcast from Vancouver. How refreshing. This strikes a
constructive note for a more unified Canada.
3702 Westerners have become weary of the Toronto
bias that permeates other national news programs. Their effect is demeaning to
the regions and other Canadian centres. This condition is unacceptable in
contemporary Canada. Global has chosen a mandate in news gathering and
dissemination of same that will help correct this imbalance in our
3703 As a country with a past history of ignoring
its heroes, Global's money is targeted to not only support the arts but also to
inform the public about the achievements and careers of our artists is very
welcome. It is our artists with their music, songs, stories and visual artistry
who externalize and explain us to ourselves and to the rest of the
3704 Certainly our music industry has been
extremely successful internationally. You can see and hear Canadian artists and
music videos in Tokyo, Berlin, London and Rio, but they might never have been
heard of if they had not been extensively promoted with U.S. dollars. Global is
responding to this need in our art community. Hopefully, their recognition of
this need will lead others to follow.
3705 The latter point leads me to speak about
Historica, a new foundation dedicated to increasing awareness amongst Canadians
of their country's history and its peoples through a bilingual program that will
utilize television and new media to vignette Canada. Global's financial support
of the foundation's goals is another example of their objective of informing
Canadians about Canada past and present.
3706 In the same spirit, the Canadian Television
Fund will be richer because of Global's great grant of $1 million per year
for five years to be solely dedicated to the promotion of Canadian programming.
Certainly, the industry has become increasingly aware that we have to do more
than make good films and programs. We have to promote them to the Canadian
audiences who have had such easy access to well-publicized American
3707 Our own industry organization, AMPIA, in
Alberta, will benefit from the grant of $500,000 from Global, money that will
help the organization to keep pace with all these changes.
3708 Lastly, I wish to speak about the
$23.9 million fund for producers west of Ontario. This will give western
production companies an added incentive to continue our pursuit of
3709 I would like to refer here to a children's
dramatic series produced this past year by my company. It is entitled
"Caitland's Way". It is a runaway hit in its markets and approximately 85 per
cent of our crew and creative personnel were Albertans. This example tells us
that we have what it takes in Alberta to be competitive and the Global fund will
encourage us to work toward continuing to gain the competitive age equal to or
even better than our provincial neighbours. I emphasize competitive because I
have long been philosophically opposed against protectionism in the form of
geographical or regional envelopes.
3710 We must look outward to our neighbours and
refuse to become guided only by the standards of a few. We cannot survive in
world markets without enlarging our vision, and this is done through a broader
competitive base. I firmly believe that our broadcast industry is growing up as
well. They are becoming more and more interested in the end product rather than
focusing on the biases of the major centres of production.
3711 In summation on this issue I know that
protectionism can lead us toward complacency and mediocrity. It did it to a
major network in our country; it can do it to the Alberta
3712 Thank you very much.
INTERVENTION / INTERVENTION
3713 MS CHAMBERS: Thank you for the opportunity to
appear before you today. My name is Brenda Chambers. I'm an independent
producer. I'm based here in Vancouver and I'm also here on behalf of the
Aboriginal People's Television Network, which I'm a member of their board and
3714 I'm here today to support the licence
application relating to CanWest Global's application before you.
3715 I have been producing television programs for
and about aboriginal people for 17 years. I am former general manager of
Northern Native Broadcasting in Yukon. I have created and hosted a variety of
programs. And I'm also involved in the creation of Television Northern Canada,
the Aboriginal People's Television Network, production funds and regulatory
3716 I have made numerous appearances before this
Commission in defence of Aboriginal broadcasting. The last time I was before you
was in support of the APTN application.
3717 I currently operate a production company
called Brenco Media. I have produced programming from private broadcasters,
aboriginal organizations and the CBC. Currently, I'm involved in developing a
series called "Venturing Forth" under my company, Brenco Media.
3718 "Venturing Forth" is the first national
television program in Canada that will showcase the business achievements of
aboriginal women, men and young people uniquely presenting stories of
innovation, entrepreneurship and showcasing international trade and expansion
for aboriginal businesses. "Venturing Forth" will act as a bridge between the
popular perception and the new reality.
3719 I am very pleased the pilot episode attracted
the audience of 158,000 viewers in the first couple of months of APTN, one of
the largest audiences for them as well. I will be utilizing aboriginal producers
and technicians across the country to produce the 13-part
3720 Also through my company I'm involved in
working with a variety of aboriginal people across the country to develop
programs, strategically plan out their productions and consult on a variety of
training initiatives. This past January and February I travelled to northern
Saskatchewan, Winnipeg, Nain, Labrador, Montreal, Iqaluit, Yellowknife, White
Horse and Inuvik -- in three and a half weeks, I'll tell you -- to
provide workshops on the business of television to aboriginal
3721 So I know firsthand that CanWest Global's
Aboriginal Production Fund will be of great benefit to aboriginal producers and
technicians across this country. I have seen the commitment, the dedication and
the struggles of independent producers and aboriginal organizations to tell
their stories of their communities with few resources.
3722 The CanWest Global Network shared licence will
help ensure that aboriginal stories are told across the country. The opportunity
to showcase aboriginal stories not only on APTN but also on the CanWest Global
Network will help assist the producers of aboriginal programming in getting
their messages out about their communities.
3723 In a summary of their tangible benefits, the
CanWest APTN Production Fund -- let me just read it because I think it's
even more than the million dollar fund. It says:
"CanWest will allocate $1 million over five years to establish the
CanWest APTN Production Fund to create programming targeted to content that
creates a closer understanding of our country's native and aboriginal roots.
This fund will be co- administered by CanWest and APTN, will be made available
to independent and native producers. All qualifying productions will be required
to have an aboriginal theme and content. APTN will be the primary broadcaster
with CanWest stations taking the second window telecast. The fund will address
and attract new regional aboriginal production companies and will begin to
address the economic imbalance of ensuring access to the Canadian broadcasting
system by this important production community." (As
3724 And I can't agree with that
3725 APTN was very please to recently learn that
CanWest Global intends to install a news bureau in Yellowknife. This is an
important develop since northern issues and stories rarely make it to the
mainstream southern media outlets. APTN looks forward to collaborating with
CanWest Global in the north and areas of shared technical and human
3726 So as an independent producer and someone who
is committed to the continued development of an aboriginal production company, I
have seen and heard too many empty promises that don't go anywhere. I'm pleased
that the CanWest application encourages partnership and the continued growth of
an industry that I have worked many years to enhance and
3727 Thank you.
INTERVENTION / INTERVENTION
3728 MS M. WHITE: Good morning.
3729 I thought I would start by clarifying that I
am not Tim Gamble, President of Peace Arch Entertainment.
--- Laughter / Rires
3730 MS M. WHITE: I am, however, Michele White and
I'm Vice-President of Production and Development for Peace Arch. As a last
minute sort of surprise replacement, because Tim had to be out of town, I
apologize if this presentation isn't quite as polished -- my first venture
into the hearing.
3731 But I wanted to start by reviewing our initial
statement to the CRTC and then just expand upon that a little for you. I'm here
today on behalf of all of us at Peace Arch, including our subsidiary companies,
The Eyes Multimedia Productions, Aviator Pictures and Toolshed Productions, in
support of the CanWest Global applications presently before the
3732 Peace Arch Entertainment Group is one of the
leading producers and distributors of Canadian television and film programming
in western Canada. We have been in business since 1981 and have been a public
company since 1987. Our shares are presently traded on the TSE in Canada and the
American Stock Exchange in the United States. Consolidated annual revenues for
the fiscal year 1999 were over $50 million.
3733 We are delighted to be given the opportunity
to make our views known in support of the Global Television Network as a strong
national network. CanWest Global has been a strong industry supporter in all
regions of the country in licensing, broadcasting and marketing high quality
Canadian dramatic documentary and children's programming. Global's acquisition
of WIC's television stations only underlines its commitment to a vibrant and
growing broadcasting business as part of its plan to become a premier national
3734 We are particularly impressed with Global's
commitment of nearly $24 million in new sources of financing for western
Canadian producers and the promise of a nightly national newscast out of
Vancouver, not to mention the $60 million commitment in additional industry
benefits in the event Global's permitted to create a national network. This can
only strengthen the Canadian television industry and domestic audiences from
coast to coast. We encourage the CRTC to approve Global's applications and to
recognize a company which has invested millions in Canadian programming and, as
a growing international corporation with a strong national conscience, will
continue to do so for many years to come.
3735 In terms of expanding on our initial
presentation and why we are excited to be here today to support their
acquisitions, the acquisitions they seek, and why we believe their proposed
benefit package will in fact result in significant benefits to the industry, I
thought I would speak now specifically from my experiences as being a member of
the production company and its executive producer behind the half hour comedy
currently with the work entitled "The Agency" which recently received a
22-episode production order from CanWest Global.
3736 Our experience is that in Global we have
experienced a real sharing of the philosophy we have followed in building Peace
Arch to the size we enjoy today, and that is recognizing that it's the --
that the future of our industry is really dependent upon recognizing a critical
balance that we must achieve between exception creative material and then
supporting the material and recognizing and having a sound understanding of the
business side of the industry as well. We have just found an ideally
collaborative balance in our dealings with Global. They have been accessible and
shown a dedication to innovation, to nurturing Canadian creative talent, a
certain degree of risk-taking, and then stepping up with the all important
significant financial support.
3737 Both the licence fee and the size of the order
that we received I believe are unprecedented for any Canadian half-hour comedy.
Peace Arch has also made a significant financial investment in this series and
the various federal funding agencies have also show approval of our venture with
us and we have received approval so far from all those we have approached. This
is truly a fully Canadian production.
3738 We are confident that Global's commitment via
the Western Production Fund will be a continued positive influence for all
3739 I also wanted to comment on an issue that I
understand has been raised and that we don't believe there should be specific
provincial floors to this fund because they will undoubtedly become envelopes.
As a producer, I don't really believe that this creates the right criteria for
determining investment priorities. I think we have currently enough artificial
filtering devices in the industry via the yearly funding agency deadlines which
have been created for various reasons, but wherever possible I think that any
new initiatives, I think it's critical that they be geared towards the merits of
3740 Another of the benefits in the CanWest Global
package that I find encouraging is the Promotion of Programming Fund. It's just
another exciting level of support for local producers because it recognizes the
necessity in the industry of not only putting the programming on the air but
also making sure that Canadian viewers are aware of the programming and when and
where to find it on their local dials.
3741 In summary, Peace Arch supports the CanWest
Global applications because we believe they reflect the type of initiatives
required at this critical stage of the Canadian television industry's
INTERVENTION / INTERVENTION
3742 M. THOMSON: Madame la Présidente,
Commissioners, good morning.
3743 It is, as always, a pleasure to be here and I
thank you for providing this opportunity to present our views on the matter
currently before you, the acquisition of Western International Communications'
broadcasting assets by CanWest Global Communications.
3744 When Great North celebrated its tenth
anniversary three years ago, we received a letter of congratulations from Izzy
Asper, Chairman of CanWest Global. In his letter he said:
"Battlescarred as we both are, I wonder whether we should start measuring our
longevity in dog
3745 I assumed that Mr. Asper was making reference
to the number of times that he and I had both appeared before the CRTC in our
attempts to have CanWest Global acquire broadcasting outlets in Great North's
home province of Alberta. If so, then "battlescarred" was certainly the right
choice of word.
3746 We first appeared before you in 1994 in
Calgary to argue that Alberta was ready for a fourth English language service
and that CanWest Global was the right broadcaster to provide that service.
Unfortunately, the Commission decided not to issue a licence.
3747 We again appeared before you in 1996 in
Calgary to argue that a broadcaster with a national reach who could pay network
licence fees and offer simultaneous national exhibition and provide nationwide
promotion would be the right choice for Alberta's fourth English language
service. In the end, the Commission disagreed.
3748 Later in 1996, I supported CanWest Global's
appeal to Cabinet to have that CRTC decision revisited. Once again, Mr. Asper
and I lost the battle and earned a few more scars.
3749 It is now the year 2000 and an opportunity has
again arisen for Canwest Global to acquire broadcasting outlets in
Alberta -- this time through the acquisition of the WIC stations --
and I am here once again to support CanWest's ambitions and for the very same
reasons that I supported them before the CRTC in 1994, in 1996 and in the
Cabinet Appeal -- because the Canadian production industry and, most
importantly, the Canadian television viewer, are all best served by the
establishment of strong, national broadcasters who are committed to and can
support the creation of high-quality Canadian programming through significant
licence fees, simultaneous national exhibition and nationwide promotional
campaigns that can attract viewers to Canadian programming. CanWest Global, with
the acquisition of WIC's Alberta stations, will finally be in a position to do
3750 I should point out that CanWest Global's
inability to acquire broadcast outlets in Alberta has never stopped them from
working with Alberta producers. Great North's first production, the one-hour
drama "Life After Hockey", was licensed by CKND, CanWest's Winnipeg Station, in
3751 Our first documentary series, " My Partners,
My People", was licensed for Ontario by Global Television in 1990, as was our
first international co-production, "From Spirit To Spirit" the following
3752 Our first drama series, "Destiny Ridge", was
licensed by what was then known as the CanWest Global Television System for
broadcast almost everywhere in Canada except Alberta in 1994, and two years
later the CanWest Global Television System ordered 26 hours of the drama series,
"Jake and the Kid" from Great North under the same conditions.
3753 So clearly the lack of Alberta broadcast
outlets hasn't stopped CanWest Global from commissioning programming from
Alberta producers and from paying top dollar for that programming, but it has
prevented them from being able to coordinate national exhibition of these
projects and from embarking on nationwide promotional campaigns. This has had a
huge and negative impact on the number of Canadians that have been drawn to
these programs. I remain convinced that "Jake and the Kid", which was a
well-produced series, would still be in production if it could have been
broadcast on the same day and at the same time across the country, but CanWest
Global, without Alberta stations, was not able to do that.
3754 But what we lost in "Jake and the Kid" we may
have gained in the form of this application's very generous benefits package. If
I recall correctly, the production fund earmarked for the independent production
community included in the benefits package in the 1994 application was one
million dollars per year for five years for a total of $5 million. The amount
was similar I think in the 1996 application. The benefits package attached to
this application you are reviewing this week is a staggering $84,290,000 with
$23.9 million of that earmarked for a production fund to be accessed by
western-based independent producers
3755 In addition to this production fund, other
initiatives included in the benefits package such as the National Promotion of
Programming Fund, the International Marketing Fund for Canadian Independent
Producers, the Canadian Star Minutes and the generous contributions to the
Alberta Film Commission, the Edmonton and Calgary film offices, the Alberta
Motion Picture Industries Association and the Banff Television Festival will all
have a huge and positive impact on the production industry in
3756 With regard to the benefits package, and
specifically the $23.9 million production fund for western Canadian producers, I
would like to go on record as disagreeing with my colleagues from the Alberta
Motion Picture Industries Association or AMPIA who proposed in their written
submission that there be established a specific envelope within that fund for
3757 I had the pleasure of serving on the Board of
the Canadian Television Fund for four years and during that time we consistently
resisted pressures from organizations like AMPIA to create regional or
provincial envelopes. My reason for opposing these requests was simply that an
envelope is also a cap. Had provincial envelopes existed in 1997 when we were
producing "Jake and the Kid" in Edmonton and Doug MacLeod and Tom Dent-Cox were
producing "North of 60" in Calgary, no other producer in Alberta would have had
access to Téléfilm of CTF funding. Those two series alone would have exceeded
the provincial allocation
3758 So we would greatly prefer to have access to
the entire Western Production Fund rather than an envelope. I believe that
Alberta producers have the skill, the experience, the talent, the landscape and
the connections to compete with producers anywhere in Canada. Provincial
envelopes would be a step backwards for our industry.
3759 My other concern with the Western Production
Fund is CanWest Global's intention to reserve 70 per cent of the fund for
dramatic programming, leaving only 30 per cent for children's, variety,
documentaries and new media combined. Documentaries are the lifeblood of
regional production because they don't require huge production infrastructures,
they are easier to finance because the sell internationally better than drama,
and there is more shelf space for them in the Canadian broadcast system. I would
guess that 80 per cent of the production done in western Canada is documentary
or children's and less than 20 per cent is drama. To have a fund that reverses
those numbers would result in seeing part of it hugely oversubscribed and part
of it unspent. Neither would be good. Therefore I encourage CanWest Global to
revisit these percentages.
3760 I would like to say a word about the issue of
diversity or concentration of ownership. Great North does not have a problem
with CanWest Global owning two stations in the Vancouver-Victoria area or in
southern Ontario. We believe we have entered a new world in Canadian
broadcasting. Most television viewers no longer differentiate between
conventional broadcasters and specialty channels. We don't see any difference
between CanWest Global owning two signals in the same area or Alliance Atlantis
Broadcasting or CHUM or CTV owning multiple specialty channels sharing the same
3761 My only concern is that CanWest does not use
the same programming to meet their eight hours per week priority programming
requirement on both their signals in the same market, and they have assured me
that they will not.
3762 In conclusion, I thank the Commission for
providing this opportunity to comment on this matter, and I urge the Commission
to approve CanWest Global's application to acquire WIC's broadcasting assets,
especially those stations in Alberta. If CanWest Global can become a new player
in Alberta's broadcasting universe, speaking for myself and I'm sure for Mr.
Asper, the battle scars accumulated over the years of trying to make that happen
will have become worth it.
3763 I would be pleased to answer any
3764 CHAIRPERSON OF THE COMMISSION: Thank
3765 Commissioner Grauer.
3766 COMMISSIONER GRAUER: Thank
3767 What I will do is perhaps ask some questions
and any of you who want to jump in can do that, but perhaps I can start with
you, Mr. Thomson, just because your presentation is fresh.
3768 As you know, we have had discussions with the
Alberta Motion Pictures Association, BC Film and with CanWest Global in their
initial presentation with respect to production in western Canada, the nature of
these funds and, you know, the whole question of the concerns expressed by AMPIA
and BC Film about the allocation of these funds.
3769 I take your point with respect to the
limitations of an envelope, and in fact with the whole notion of quota. When the
CFTPA was here yesterday there was talk about cycling, and I think that happens.
I mean, your point about, you know, ending up with a cap with respect to Alberta
productions is true, and things move around. But the issue of private
broadcaster financing in western Canada over the past few years has not been a
very bright picture. We have a complex structure with respect to funding
mechanisms, requirements. Some of these are requirements that are a condition of
licence with new applications, as we have in both Alberta and British Columbia
recently. We have funds. We have provincial funding programs.
3770 I guess, having said all of that, do you
believe that what we see on our screens should reflect Canada in its diversity
in its entirety? In other words, when we look at peak time programming, that
which is Canadian, is it important to the system, and in meeting the objectives
the Act and our policy, that that programming look like Canada, maybe not every
year and every season, but that people get a sense of what this country is
about? And, if it's important, should we do anything, or are there ways to
incent the broadcasters to incorporate that as part of their, you know,
underlying commitment to serving the Act?
3771 MR. THOMSON: Obviously I think it's important.
I think it's extremely important that the Canadian broadcast system reflect our
country from coast to coast, but I just don't believe that imposing quotas,
regional quotas are the right way to do that.
3772 I think it is -- we have made a lot of
progress in that area. You know, when you look at where this industry was 20
years ago, regional production consisted, to a large degree, of the National
Film Board's regional offices in Winnipeg and Vancouver and Edmonton and
Halifax. Now we have significant production companies in every region of Canada.
You have people like Salter Street in Halifax, a publicly-traded company;
Creedo(ph) in Manitoba; Mind's Eye in Saskatchewan; Great North, among other
companies in Alberta. And Great North is the largest producer of factual
programming in the country, and we have been able to establish that position
from a regional base using the existing incentives and policies that are in
place right now.
3773 You know Téléfilm has always supported
regional production. They have regional criteria in their evaluation process to
give extra ranking points to regional production. The CTF has done the same, the
Licence Fee Program. They also provide extra money for regional production in
terms of regional bonuses. So I think all the incentives are there right now,
and I think they have been working. I mean, I think the growth of regional
production has been quite spectacular in the last 10 to 15 years. Certainly the
growth of our company has been quite spectacular in that period of
3774 So I think what's in place right now is
working quite well.
3775 I think the other thing that's important to
note and maybe doesn't come across in some of the studies we look at, especially
the ones commissioned by Téléfilm, is that Téléfilm, with all due respect,
becoming an increasingly irrelevant player in the financing of Canadian
production. That's not a slight at Téléfilm, it's simply the fact that the
appetite for Canadian programming is increasing dramatically as you licence new
channels, new specialty channels and Téléfilm's allocation stays the same. So
the demand for Canadian programming is going up, Téléfilm's allocation is
staying the same. Their ability to participate in that programming is dropping.
And my guess, and I'm not sure, but I would think that they probably represent
somewhere around 20 per cent, they're involved in about 20 per cent of the
production that happens in Canada today.
3776 I know at Great North, Téléfilm was
responsible for 2.5 per cent of our production revenue last year. So if we only
look at Téléfilm's numbers, we are not looking at the true picture. The bulk of
what we did last year had no participation from Téléfilm and no participation
from the Canadian Television Fund, and those figures aren't showing up in
Téléfilm's report. So when reports say that the spending and -- production
in western Canada is dropping, that's only from the point of view of Téléfilm
3777 COMMISSIONER GRAUER: There's no question, and
I had limited my comments -- what I'm talking about is private,
conventional broadcaster licensing fees for the priority programming categories
that the Commission has. And really my question is -- you know, I mean, the
fact is CanWest's record in British Columbia, in particular over the last three
years, is they have produced zero notwithstanding the fact that it's a vibrant
production centre here and they have a very profitable station in this market.
So that was the nature of my discussion with them.
3778 I'm very encouraged by the licensing of a
half-hour sitcom, and what I don't want to do is characterize this as
necessarily wanting to go to quotas. It's really saying: What should we be doing
as a Commission, if anything? Is it something we should be concerned about.
Ideally, we don't have quotas. I mean, you know, regulate if necessary, but not
necessarily regulation. My question is your views I guess are that it's fine and
we can be silent on the issue of licence fees with respect to -- or
licensing productions with respect to this transaction in particular, and their
activity in western Canada, because there aren't any commitments other than what
they have committed to.
3779 MR. THOMSON: Well, I think the
$24 million production fund for western Canada will have a huge impact. I
mean, that's a lot more money than is on the table in any other fund in western
Canada right now, and I'm sure they're going to want to see that spent. So, you
know, that is going to have a trickledown effect on the amount of production
3780 Other than that, I just repeat what I said
before. I think that the incentives currently in place are pretty good and seem
to be working quite well. Particularly in Alberta, you know, a lot of people
feel that Alberta is badly served by the incentives. But I don't think so. I
think that the 10 per cent Alberta grant that we get, while it's a little
less than the tax credits that other provinces have because it's a grant as
opposed to a tax credit because we get it within six months -- or six weeks
of the completion of productions than waiting for the year and a half if you
have a tax credit, you couple that with the cost of living in Alberta and the
geography that we have there, I think we have a distinct provincial advantage
where we are right now, and I don't see any reason why production in Alberta to
3781 And it has grown phenomenally. I don't know if
you have the figures, but almost $200 million dollars worth of production
happened in Alberta last year of which about 50 of that was indigenous
production. We were solidly the third largest English-language production centre
in the country now. I know we had a couple of lean years when the government
cancelled ANPDC, but as soon as they replaced that with the Alberta grant
program, we have recaptured and increased upon wherever we were back in
3782 COMMISSIONER GRAUER: I'm aware. Thank
3783 Maybe what I could do is -- you know,
another question I have, I'll ask it and then maybe we can have each of you give
me your two bits.
3784 A couple of you have mentioned the national
news program out of Vancouver and the public affairs program out of Alberta. I
know that none of you would stand to benefit from any of that. It's something
that you comment on with your hat as Canadians. I just wonder if you
could -- they propose it as a benefit. There will be incremental costs. I
would just appreciate your views on how important you think that is with respect
to their benefits proposal.
3785 MS M. WHITE: I just thought I would comment
that it ties to me -- for our company and our experience, it ties even to
the last question, is that it's something that you can feel in the province. It
would be before our eyes and we'll feel that real presence, which I assumed
would be the case with this national news broadcast and that that's been our
experience in production when you talk about the history of Global
3786 I just wanted to add further to Andy's
comments that it's truly the accessibility that we experienced as being the key
element to us, as a western producer experience, the benefits from Global
than -- you know, numbers and quotas can be in place but somehow allude you
in terms of what you can actually experience in the production dollars, but the
accessibility of Global and standing behind what they say is what we have
experienced so far. So I was encouraged by that. And I think that it's something
you generally feel in the community immediately as opposed to statistics. It's
something that would be in the public's eye and they're much more aware of the
3787 COMMISSIONER GRAUER: So you would like to see
a national news show anchored out of British Columbia and a public
affairs -- I mean, is this an important of the Canadian system, I
3788 MS H. WHITE: I would say so. I'm an eighth
generation Canadian. I was born in Alberta. I feel very strongly about my
Canadian citizenship. I want to be part of a whole country, and at the same time
I want to have my voice heard. I want to hear the views of my neighbours. I want
to hear local programming. As the gentlemen from Hamilton says, I like to see
something that is local, I like to hear local news.
3789 I also appreciate the whole national view of
the Vancouver broadcast which will have a western focus included in it. This is
very important to me as an individual.
3790 MS CHAMBERS: Yes. The same with me. I do
believe that a western focus is very important. I grew up on the Yukon, and
that's west and north, and believe me my whole life we have been looked at as
insignificant in this country. I think that more of a western focus with
national and public affairs programming coming out of here, there's more ties to
be able to produce programming that showcases also northern issues as
3791 I think the Yellowknife bureau certainly would
be a great link to hear as well. So it's another opportunity to showcase regions
that have not been showcased on mainstream networks.
3792 COMMISSIONER GRAUER: I guess I don't have any
other questions, unless there's anything else that you would like to
3793 Thank you.
3794 CHAIRPERSON OF THE COMMISSION: Thank you very
3795 MS VOGEL: Thank you, Madam
3796 I will ask our hearing manager to call our
3797 M. RAMSAY: Nous invitons maintenant Remstar
Télévision Internationale R.T.I. Inc. à se présenter à la table.
3799 LA PRÉSIDENTE DU CONSEIL: Bonjour et
INTERVENTION / INTERVENTION
3800 M. TRUDEAU: Bonjour, Madame la Présidente,
membres du Conseil.
3801 Mon nom est Maurice Trudeau, je suis le
directeur des affaires juridiques de Placements St-Mathieu. Je suis accompagné
de Me Denis Lajeunesse qui est membre du contentieux.
3802 Nous remercions le Conseil de l'opportunité
qui nous est donnée de vous faire valoir notre position dans le dossier CTEQ
Télévision. Bien que ce volet ne soit pas le plus important de cette audience,
il demeure que CJNT-TV constitue un service canadien qui s'adresse à plus de
600 000 personnes de la grand région de Montréal.
3803 Nous ne reprendrons pas ici tous les aspects
de l'intervention écrite qui vous fut soumise, notamment en raison des
contraintes de temps, mais nous demeurons disponibles pour répondre à toutes les
questions qui vont être soulevées et pour fournir de plus amples informations si
besoin en est.
3804 Cependant, et compte tenu de l'évolution
rapide des derniers jours du dossier CTEQ, il est important de traiter
brièvement de certains aspects d'une telle intervention.
3805 Depuis la décision octroyant la licence en
1975 à CTEQ, le Conseil n'a jamais approuvé de changement de contrôle tant de
CTEQ que des deux seules sociétés actionnaires.
3806 Le Conseil à ce jour n'a pas voulu intervenir
dans les litiges civils qui opposent les parties et les intervenantes souhaitent
que le Conseil maintienne une telle position et fasse de même à l'égard du
nouveau litige en matière de faillite.
3807 Malgré l'absence de toute approbation de
changement de contrôle de CTEQ de la part du Conseil, la gestion et le contrôle
effectif de l'entreprise se concentrera entre les mains de Dame Marie Griffith
et de WIC à la totale exclusion de M. Milton Winston, l'autre personne à
l'origine de CTEQ et de l'actionnaire 2927551 Canada Inc.
3808 A titre d'exemple, il est à souligner que pour
toutes les périodes de temps remontant de la mise en ondes de la station en
septembre 97 jusqu'à ce jour, ils n'ont même pas pu bénéficier de l'état
financier ni faire valoir leurs droits lors de l'assemblée d'actionnaires.
3809 Dans un tel contexte, il vous est
respectueusement soumis que le Conseil doit s'abstenir de toute décision dans ce
dossier CTEQ, d'autant plus que l'approbation recherchée par la demande qui vous
est soumise vise notamment le transfert d'autres intérêts sans dire lesquels et
en laissant supposer que le Conseil les aurait implicitement approuvés par sa
décision 99-70 du 25 mars 1999 ce qui ne peut être le cas.
3810 Au surplus, CTEQ n'a jamais autorisé la
présente demande, qui s'est construit un autre motif pour lequel le Conseil
devrait s'abstenir de rendre toute décision concernant cette station de
3811 Par ailleurs, en soirée du 12 avril dernier,
tout récemment, les procureurs McCarthy Tétrault ont transmis aux intervenantes
une réponse à l'intervention alors que CTEQ Télévision Inc., suite à
l'implication récente de CanWest, au cours de cette même journée avait procédé
une cession en vertu de la Loi sur la faillite et l'insolvabilité, cession qui
fut certainement portée à la connaissance de tels procureurs.
3812 Bien qu'une telle faillite soit vivement
contestée par M. Milton Winston et par la société 2927551 Canada, qui se sont
portés requérants à une requête pour faire annuler une telle faillite, il est
étonnant que la présente demande portant sur CTEQ n'ait pas été retirée,
purement et simplement, compte tenu que les biens et le contrôle du CTEQ sont
présentement dévolus à un syndic de faillite.
3813 On ne saurait dans un tel contexte prétendre
que la présente demande vise à sauver la station ou la reconnaissance de droits
d'entrepreneurs, comme cela vous fut soumis lors de la présente audience pour
3814 Les autres personnes qui tentent de sauver la
station sont M. Milton Winston, la Société 2927551 Canada Inc., et les
3815 Une telle réponse fut accompagnée au surplus
d'un communiqué de presse énonçant quant à l'avenir de la station, et je
"CJNT-TV ne cessera pas d'exister du jour au lendemain. Nous sommes
conscients qu'il existe un public dans la région de Montréal pour un service de
télévision multilingue de
3816 De souligner M. O'Farrell.
3817 "Nous sommes confiants que le syndic saura
trouver une solution qui soit viable à long
3818 Une telle prétendue solution ne s'est pas fait
attendre puisque selon nos informations, un processus de vente des actifs de
CTEQ Télévision Inc. est déjà engagé et en cours, les appels d'offres devant
être pour le 9 mai prochain.
3819 Au surplus, suivant ce qu'a rapporté un
article du journal La Gazette de Montréal, il n'est pas exclu que CanWest Global
Communications Inc. tente de se porter acquéreur d'un tel actif. En ce faisant,
on se débarrasse d'un litige des autres actionnaires et des
3820 A titre d'information, il est à préciser
immédiatement qu'un tel processus de vente, que toute vente et toute demande de
transfert de licence dans un tel contexte feront l'objet, le cas échéant, de
vives contestations tant judiciaires qu'auprès du Conseil.
3821 Il demeure cependant, compte tenu de l'état
actuel du dossier, que nous devons nous interroger sur la nature réelle de la
présente demande concernant CTEQ qui est devenue sans objet et devrait être en
conséquence soit retirée ou refusée purement et simplement.
3822 Par ailleurs, une telle réponse à
l'intervention et le communiqué de presse l'accompagnant font état que seule WIC
aurait financé les activités courantes de CTEQ sans aucun apport de
l'intervenante Placements St-Mathieu.
3823 Une telle affirmation vous est présentée
erronément puisque par lettre d'entente du
23 février 1998, copie de laquelle se retrouve à la demande 199900931 déposée
le 31décembre 1998 par l'intervenant R.T.I., Placements St-Mathieu a
convenu alors de différents engagements, notamment qu'au jour de la clôture de
la transaction à intervenir, des dettes totalisant 2,200,000 $ soient
payées et de payer au surplus tout déficit d'opération de CTEQ Télévision
pendant la période de gestion d'un séquestre judiciaire nommé par un tribunal
et/ou d'un gestionnaire intérimaire nommé par le CRTC.
3824 Une telle demande de séquestre judiciaire fut
effectivement faite dans les semaines qui ont suivi et fut contestée, notamment
par WIC qui s'est alors engagée à continuer à financer
3825 Les apports financiers de WIC furent en
conséquence effectués suite à son engagement à ce faire. Il n'est pas admis dans
un tel contexte que de tels apports constituent même des dettes de CTEQ.
3826 En bon gestionnaire, Placements St-Mathieu
Inc. ne pouvait injecter des fonds sans que des mécanismes de contrôle et de
gestion ne soient en place. WIC a pris une décision différente il y a maintenant
plus de deux années et personne ne peut aujourd'hui en mettre le blâme sur
3827 Finalement, une telle réponse fait état que le
format de la station n'est pas viable et que Placements St-Mathieu n'a pas
supporté un changement de programmation. En réplique à une telle proposition,
nous désirons souligner qu'elle ne tient pas compte des analyses et études
faites pour le Conseil dans le cadre de la demande initiale soumise en 1994 et
de l'analyse du marché qu'on retrouve à la décision octroyant la licence; qu'à
l'égard du changement de programmation souhaité par WIC en 1998, un grand nombre
d'intervenants dont au moins un organisme du Gouvernement du Québec, s'y sont
opposés; et que la position de l'intervenante, R.T.I. est à l'effet qu'il
fallait régler la question du contrôle avant de modifier la programmation et la
licence, ce qui a été d'ailleurs la position du Conseil.
3828 Quant à toutes ces plaintes et reproches, les
intervenantes soumettent qu'il est malheureux que les personnes ayant bénéficié
du contrôle effectif de la station tentent de mettre sur les épaules de d'autres
le poids de leur échec.
3829 En conclusion, les intervenantes vous
soumettent respectueusement que dans l'état actuel de ce dossier le Conseil doit
s'abstenir de toute nouvelle décision et qu'il est même malheureux qu'une
réorganisation interne ait pu être effectuée au bénéfice de 3683303 Canada Inc.,
une filiale de WIC et alors que ni le conseil d'administration de CTEQ
Télévision Inc. ni la société 2927551 Canada Inc., le seul autre actionnaire,
n'en furent informés.
3830 Présentement CTEQ Télévision est en faillite
et des contestations judiciaires sont déjà engagées et d'autres sont
3831 Dans un tel contexte, WIC Télévision de même
que CanWest n'ont aucun intérêt à poursuivre plus à l'avant une telle demande
devenue sans objet puisqu'au moment présent, seul le syndic est en possession
des droits dans la licence. Une telle situation d'ailleurs, élimine pour
l'instant toute préoccupation de concentration dans le marché de
3832 En terminant, il est à souligner que les
intervenantes de même que la communauté culturelle de la région de Montréal
souhaitent que les débats judiciaires puissent se terminer rapidement afin de
pouvoir relancer CTEQ au bénéfice de tous les intervenants, dont les producteurs
locaux, et au bénéfice de toute les communautés de la grande région de Montréal
pour qui la station doit profiter en premier lieu.
3833 Nous vous remercions de nous avoir
3834 LA PRÉSIDENTE DU CONSEIL: Merci. Je ne crois
pas que nous ayons de questions pour vous.
3835 M. TRUDEAU: D'accord.
3836 LA PRÉSIDENTE DU CONSEIL: Merci beaucoup
d'avoir pris le temps de venir nous rencontrer. Merci.
3837 MS VOGEL: I would like to call Dean Butler to
3838 I understand Mr. Butler might be with us later
3839 I would like to recall the Canadian
Independent Record Production Association.
3840 I don't see anyone responding to that, so
those are intervenors, Madam Chairperson.
3841 CHAIRPERSON OF THE COMMISSION: Thank you very
much. We will take until 11:00 for a break and then we will go for the
3842 Thank you very much.
--- Upon recessing at 1035 / Suspension à 1035
--- Upon resuming at 1058 / Reprise à 1058
3843 MS VOGEL: I would invite Global to begin their
reply to intervenors whenever they are ready. We have a 10-minute limit on the
REPLY / RÉPLIQUE
3844 MR. ASPER: Madam Chairperson, Members of the
Commission, we thank you for the opportunity to respond to the comments of
intervenors in this proceeding.
3845 As a point of procedure, if the Commission is
intending to rely on any documents that were submitted to it in the process of
this proceeding, we would request the opportunity to submit documents of our own
in response to this evidence.
3846 First and foremost, we wish to express our
appreciation for the many over 1,000 voices of support which were filed with the
Commission. And we also wish to pay a special tribute to the numerous appearing
intervenors who made the effort to travel to attend this public hearing in
support of our proposal. The number, strength and the source of those
interventions suggests broad-based support for this application and the
programming plans put forward to serve all of the markets.
3847 While this hearing has focused on a number of
issues, including the matter of making an exception to the common ownership
policy, the fundamental issue that this hearing may well have boiled down to is:
How many major players should there be in the Canadian conventional broadcasting
system? We maintain that Canada may have room for five to ten large media
groups, but only three major conventional players. And, we base this view on not
only our experience but three recent studies available on the public record: the
CAB's Environmental Scan; the PriceWaterhouseCooper study attached to our
application; and, the Communications Management Inc. study on market share,
which was attached to our response to interventions. All three are unanimous in
their confirmation that the Canadian private conventional broadcasting sector is
not only fully mature but is now showing vulnerability and signs of
3848 We believe that the combination of the size of
our proposed transfer benefits package, which is well in excess of what is
required by Commission policy, together with safeguards we have proposed, fully
address the question we discussed with the Commission, that the whole is greater
than the sum of its parts. We believe that three major private conventional
players, including two strong national private network players of comparable
size, will unequivocally strengthen the Canadian broadcasting system, and for
those reasons, among many others discussed with you on Tuesday, an exception to
the common ownership policy is justified in this instance. And as you know there
are numerous other examples of where an exception to the policy was granted.
Exceptions could be made justifiably on structural grounds in addition to their
being made where there's a rescue operation in place.
3849 We would like to now address the specific
comments that were raised by opposing intervenors.
3850 Yesterday, we heard from Craig Broadcasting,
and they told you that it was absurd to consider specialty services as being
important, and that the number of platforms a broadcaster has is not a good
measure. According to Craig, specialty services are "nice but not
3851 What was particularly troublesome about the
Craig Broadcasting intervention was their response to Chairperson Bertrand's
question about whether it might be better, in a finite market, to have three
strong corporate players.
3852 Craig responded that more than three players
would be better, that conventional broadcasters should accept lower margins, and
that those broadcasters should then direct their energies to other platforms
which they have dismissed as not vital to their survival.
3853 We submit that lower margins are not a
prescription for putting more and better Canadian television programs on the
screens for Canadian viewers.
3854 We also heard from Craig Broadcasting that
true diversity could only come from competition. They left out one very
important word. True diversity can only come from true competition. By limiting
the Canadian television system to one large integrated player, CTV, and having
everyone else well behind, which would be the result of Craig's vision for the
system, we would have neither true diversity nor true
3855 Craig Broadcasting echoes CTV's argument that
CanWest's proposal would somehow create a second national network for CanWest.
Although CTV used a catchy phrase, and Craig Broadcasting expressed it in terms
of percentages, the numbers just don't add up. The reality is that CHCH and CHEK
together do not add up to enough coverage to create anything approaching a
3856 With the resources of CanWest behind them, the
stations in Hamilton and Victoria will be stronger local players than they have
been in many years. They can work with other stations across the country to
amortize program costs, including the Craig stations. But two stations do not
another network make. Even with its B.C., Ontario and Alberta stations WIC
tried, but they were never a factor, in the sense of being a national network.
But they did, by their presence, help cause the massive increase in foreign
programming costs that occurred all throughout the 1990s.
3857 It is interesting to note that Craig
Broadcasting is in no way affected by this application inasmuch as it is not an
incumbent broadcaster in the Ontario marketplace or the Victoria marketplace. In
fact, the common ownership of CHAN and CHEK was an existing factor when they
applied for a Victoria licence.
3858 In addition, Craig Broadcasting will benefit
by the approval of this application because they will be able to buy programming
from us in markets where they operate, as we have offered on several occasions.
This provides them with an alternative programming source to CHUM. What more
could they ask for?
3859 And again, with respect to Craig's assertions
of potential dominance in the Ontario market, we wonder how this would remotely
affect them, since they have no stations in that market. I am sure the
Commission will be able to independently determine that what transpires in the
Ontario advertising market will not affect national spot sales nor local sales
for Craig in Alberta and Manitoba where they do have stations.
3860 If Craig Broadcasting does have aspirations
for Ontario, it remains open to them to apply for an Ontario license, just as
they did for Victoria, or seek to acquire one. Most recently Power Broadcasting
sold its station in Peterborough. Corus bought it, not Craig.
3861 As for the Friends of American Basketball and
their misrepresentation about Canwest not spending as much as others in the
system, enough is enough. It's time to put this myth to rest. The fact is
CanWest is spending more on Canadian priority programming than any other
broadcaster in the entire Canadian system. Those are the programming categories
that the CRTC designated as priority.
3862 TV statistics which the Friends' assertions
relies on were prepared by the consultant to CTV for the content hearing in
1997. They are misleading at best because they include news and sports
expenditures, in other words, profitable non-priority programming categories.
CTV has 25 stations and Global has eight. Of course they are spending more on
news. They're putting 25 newscasts together.
3863 The fact is Global has lived up to every
commitment it has ever made to the CRTC and has, in many cases, over-performed.
We will once again table that information with the Commission and we will also
reiterate that the money spent on priority programming by CanWest has yielded
the highest audiences.
3864 Yesterday, you heard the representatives of
CTV tell you that if this application were to be approved CanWest would become
too powerful in relation to CTV. In making that claim, CTV used a definition of
the market that was just not relevant.
3865 In the short time we have here it will not be
possible to answer all of the points raised by CTV in detail, but two
well-written rebuttals of the position CTV took yesterday are already on the
public record. The first is the Supplementary Brief filed by CTV in its
application to acquire NetStar, and the second is a CTV 1999 Annual
3866 Yesterday, CTV excluded specialty services
from the view of the market. According to CTV, specialty services don't figure
into ad sales and are only useful for cross-promotion. That's what they said
yesterday. But in CTV's annual report the story is very
3867 We can see from that report that CTV considers
specialty channels and their revenues to be an integral part of their
3868 Yesterday, they attempted to skate away from
that position by stating that from time to time they take different approaches
to market comparisons, or that there are various perspectives of which their
view at this hearing is just one.
3869 But they went beyond that perspective
yesterday when Chairperson Bertrand asked them why only conventional services
should be included. In answering the question, CTV's consultant put some
percentages on the public record, and these were identified as being only for
the English-language private conventional television market.
3870 But Doug Henning would be proud of CTV,
because yesterday in their answer to a question about conventional television,
CTV made the CBC disappear altogether. How can we treat with any credibility an
argument that excludes over $200 million of conventional TV advertising from the
answer to a question about the conventional television market?
3871 While it is disappointing that CTV has taken
such an inconsistent approach, it's not surprising. With its acquisition of
NetStar, CTV has become a dominant player in English-language television market
with a 29.1 per cent share of market revenues based on the real market as
described in CTV's annual report, not in their intervention.
3872 If CanWest's proposal is approved CanWest
would move to a 25.4 per cent share of market revenues, hardly the dominant
position that CTV claims CanWest will have. But CTV would obviously prefer a
situation in which they are the dominant player and no one else is allowed to
3873 If you follow the logic of CTV's intervention,
they want CanWest limited to a market share of under 20 per cent, in order to
keep a larger gap between they and their principal competitor.
3874 While CTV would like you to ignore the
significant specialty service assets it owns, they are hard to ignore,
Commissioners. The largest of those services, TSN, had 1999 operating income of
more than $37 million. That's more than the operating income of all of CanWest
Global stations outside of Ontario combined.
3875 Put another way, the profits of TSN and
Discovery, which CTV acquired only a month ago, are roughly equal to the profits
of all the WIC stations CanWest is seeking to maintain.
3876 And the recent track record of TSN and CTV on
Maple Leafs hockey telecast should dispel any doubt about the advantage CTV has
in TSN. TSN was able to outbid Global for the broadcast rights of those hockey
games and then made a deal for CTV to carry those rights that TSN didn't want.
They paid four times, TSN did, the amount of what Global was paying. And there
are other examples, like the NFL, which I can get into if you
3877 It's because TSN has a competitive advantage
resulting from its dual revenue stream. In addition, it also has the right to
request and has quite often taken advantage of simulcast privileges. Indeed, CTV
conveniently forgot to mention that all of their specialties provide a
significant revenue stream through subscriber fees which conventional
broadcasters, like CH, do not have access to.
3878 On the other hand, contrary to
Mr. Fecan's assertions, Prime cannot simulcast. Its programming has to be a
minimum ten years old. Even the brilliant Doug Hoover has found it very
difficult to simulcast a ten-year old program that doesn't appear anywhere on
3879 We are rather shocked that Mr. Fecan,
perhaps Canada's most experienced when it comes to U.S. program buying, would
have the audacity to state that should CanWest be approved in its entirety this
would drive the cost of foreign product up. The CHUM group clearly rebuffed this
assertion, and CanWest has stated its expectation of a reduction of foreign
program costs as a principal reason for pursuing the WIC assets. You can decide
who you wish to believe.
3880 And yes we are receiving an opportunity to
increase our profits. How else would we be able to contribute $84.2 million back
to the system in benefits and pool the resources to create additional hours of
Canadian news, information and priority programming? This contribution exceeds
100 per cent of the WIC profits for last year.
3881 There are a few other issues raised by the
Commissioners in the course of our discussion with you on
3882 With respect to the possible reallocation of
certain benefits which the Commission discussed, we would be willing to exchange
thoughts with you in that regard during our question period.
3883 We would like to respond to Commissioner
Wylie's point and her request to propose some safeguards in respect of local
news orientation of CHEK and CHCH to ensure that they remain truly
3884 In closing I would like to make this
3885 Over the past three days we have been entombed
in this room debating, discussing what are ultimately points about the nature of
our business and the interaction between the respective players industry. But,
thankfully, you Members of the Commission brought us back to what we are here
for, what it's really all about, that is: What's going to be on the screens of
Canadian television sets this fall and in the future? That's what we are here
3886 In 16 short weeks the new television season
will be upon us. In homes in Hamilton, Victoria, places like Timmins, we have
committed that those television screens will have eight hours of Canadian
programming, which is four more hours per week than they receive today. And,
Commissioners, it won't be basketball.
3887 If we receive a positive decision within the
time frame we expect, that may leave us more like eight weeks to get our program
schedule together and launch onto the airwaves, but I view that time frame as a
great challenge, an exciting challenge which will require a great deal of
teamwork, long hours and late nights to pull off. Hopefully not
3888 The people at Global Television are up to it,
though, the people at CHCH and CHEK I now know are up to it, and the hardworking
men and women in the Canadian production sector are up to it.
3889 We look forward to the future. We are ready to
launch right now into a whole new era of Canadian television.
3890 You know, in real estate law they have the
saying "ready, willing and able" to describe a purchaser or seller's position in
relation to closing a transaction. Well, here we are, ready, willing and able to
step up with hundreds of new hours per year of priority programming on Canadian
screens within months. We provide that certainty. You can choose between CTV's
hypothetical, their apparition and their unproven suggestions, or you can choose
the immediate in-the-flesh solution.
3891 We have, we submit, refuted Friends' claim
that taking Hamilton away from millions of Ontarian is a good idea, as well as
their misleading statistics regarding Global's performance in the production of
Canadian programming. That leaves only two intervenors who are negative: Craig
3892 I submit that their interventions at this
hearing merely represent a battle of corporate interests masquerading as a
contest of principles. We don't deny our interest in this transaction but we
believe we have put forward a programming and benefits proposal that is worthy
of the nature of the transaction. It's quite simple: CTV wants a weaker
competitor after they have been strengthened by buying NetStar; and, Craig wants
to buy Hamilton. They're asking you to look into the rear-view mirror while we
ask you to scan the road ahead and guide the steering wheel according to what
you see and what I hope I have conveyed to you that we too see
3893 Madame la Présidente, membres du conseil, du
3894 Je vous remercie beaucoup pour votre patience
et vos questions réfléchies au courant de cette audience publique. Je m'excuse
de mon manque d'expérience dans ce genre de procès, mais je dois vous dire que
j'ai beaucoup appris au cours des trois dernières journées. J'ai maintenant une
plus grande appréciation pour les complexités auxquelles vous faites face dans
votre travail. Nous reconnaisons que l'ensemble de l'industrie est confrontée
par les mêmes questions que nous.
3895 Toutefois, nous sommes d'avis que cette
demande ne présente pas un choix difficile pour vous, compte tenu du fait que
l'approbation de cette proposition assurera aux auditoires Canadiens une plus
grande diversité de programmation Canadienne, laquelle sera accessible plus
rapidement que dans toute autre alternative qui aurait pu se présenter devant
3896 Je vous souhaite un bon été, et bonne chance
dans vos délibérations. Nous allons maintenant nous tourner vers le travail qui
nous attend en préparation pour l'audience publique pour les nouveaux services
3897 Alors, merci et certainement à
3898 Thank you very much.
3899 LA PRÉSIDENTE DU CONSEIL: Merci beaucoup.
3900 We will take 15 minutes and we will back with
some questions relevant to the reply. So before we go for the summer, we still
have some work to do.
--- Upon recessing at 1116 / Suspension à 1116
--- Upon resuming at 1143 / Reprise à 1143
3901 CHAIRPERSON OF THE COMMISSION: Alors, legal
counsel has a few questions for you.
3902 MS MOORE: Thank you, Madam
3903 At the outset of your comments you made
references to certain documents and a concern about that. Could I ask you to
amplify on that, please. What documents were you referring to?
3904 MR. ASPER: Well, in the first case, there is a
letter, a very definitive letter, from Mr. Asper to Mr. Eaton several years
ago regarding a proposal in respect of CHAN-CHEK. There is CTV's proposal to
acquire that they submitted to Wood Gundy approximately one week ago or a couple
of weeks ago inviting -- in which they invite CanWest to submit an offer
for any assets they may have, which was the response -- which was the
letter which proceeded the letter which Mr. Fecan tabled. And, in addition,
there was a few pages from the annual report, which are public documents, which
we don't need to file with you. But those were the two documents, I think, we
would wish to file if required.
3905 MS MOORE: To clarify, with respect to the
letter that Mr. Fecan referred to, that has not been accepted on the public
record. Does that change your position in respect of the other documents that
3906 MR. ASPER: Yes, it would.
3907 MS MOORE: Okay. So there are no other
documents that you would wish to file with that knowledge?
3908 MR. ASPER: No.
3909 MS MOORE: Thank you.
3910 Those are my questions, Madam
3911 CHAIRPERSON OF THE COMMISSION: Thank you. That
concludes our questioning. Thank you very much.
3912 MR. ASPER: Thank you very
3913 MS VOGEL: We're now ready to begin hearing
intervenors with respect to the Corus application.
3914 For the record, Intervenor No. 1, Wayne
Plunkett and Intervenor No. 3, Manuel Canales from MediaGroup are going to come
in by phone from Toronto so we will hear them one after the other via a
--- Pause / Pause
3915 CHAIRPERSON OF THE COMMISSION: Alors, maybe we
better make the announcement again, Madam Vogel.
3916 MS VOGEL: Thank you, Madam
3917 We are now ready to move on to the intervenors
with respect to the Corus applications. In the agenda, Intervenors No. 1 and No.
3 will be coming via a telephone hook-up from Toronto and I believe we have
established communications with those intervenors now. So their intervention
will be fed through the sound system and they will be able to hear us as
3918 So the intervenor, Mr. Plunkett, is the first
intervenor. If he could proceed whenever he is ready.
3919 CHAIRPERSON OF THE COMMISSION: Good afternoon,
3920 MR. PLUNKETT: Good afternoon. Can you hear me
3921 CHAIRPERSON OF THE COMMISSION: Yes, we do.
Please go ahead.
3922 MR. PLUNKETT: Good, because I'm not used to
doing it across the country like this.
INTERVENTION / INTERVENTION
3923 MR. PLUNKETT: Good morning, Vancouver. I guess
it still is morning out there. My name is Wayne Plunkett and I'm speaking to you
from the Toronto regional CRTC office.
3924 Very briefly, I have been connected with the
Canadian broadcasting industry ever since being one of the originals of CITY-TV
Toronto in 1972 and then held senior financial positions in the radio, cable,
advertising, television and motion picture distribution industries since
3925 Currently, I am a broadcast consultant and am
writing a very comprehensive book outlining the history of every AM and FM radio
station that has ever operated in Canada from day one in 1919 up to date.
Obviously a major project. Thus, I have reviewed the far in excess of 25,000
CRTC decisions over the past 32 years, as well as BBG and CBC Board of Governors
pronouncements before 1968. Quite a mountain of paper.
3926 Now I'm going to get into my intervention
3927 I very much appreciate the opportunity to add
the following comments to my written intervention and regret that I am not there
in person to hear all the dialogue on the various applications by CanWest
Global, Corus and Shaw. I will confine my remarks to the previous theme I have
developed, that a great danger exists in the overwhelming number of radio
stations in Southern Ontario that will be controlled by Shaw/Corus if
Application 199917101 by Corus Entertainment Inc. is approved in its entirety
with no divestiture requirements.
3928 As you know, barely one month ago on March 24,
2000, Corus was approved to acquire 17 radio stations in Ontario and Quebec from
Power Broadcasting Inc. At this public hearing there is an application to add
another 12 radio stations to the Shaw/Corus fold, four of which are two AMs and
two FMs each in the Toronto-Hamilton overall market. All four of these stations
have excellent signals day and night throughout Toronto-Hamilton and for great
distances in all directions beyond, with the exception of CHML-900 whose night
signal in eastern Toronto and Scarborough is sometimes weak and subject to
3929 Commissioners, I hope you were more than a bit
alarmed by the facts presented in Schedule B to my written intervention. The
concentration of ownership of stations by Shaw Corus in the whole arc, as I call
it, of southern Ontario, from London to Barrie to Peterborough and all parts in
between, these are markets ranging in size from Toronto down to -- the
smallest would be Collingwood, will give Shaw-Corus a total of 16 existing
stations plus four more -- 2 in each of Toronto and Hamilton -- or
thus 20 in total out of the overall total of 66 AM and FM commercial stations in
the area just described, excluding ethnic -- or, in other words, fully 30
per cent of all such stations would be in one owner's hands.
3930 If that in itself can be rationalized as
getting pretty concentrated but perhaps acceptable, then consider the following
scenario. In the same area as described above, based on the location of license,
the degree of concentration of Ownership becomes much more dramatic, per
Schedule F, which follows. I won't read all the markets, but there are 12
markets with a total of 40 commercial stations of which Shaw-Corus would have
12 -- 20, I should say, 20.
3931 Now, we would have a situation where the total
of Shaw-Corus stations in the above 12 markets would total cumulatively fully 50
per cent of all the commercial radio stations, excluding ethnic, and please note
on the FM side 14 of 25 stations, or 56 per cent of the dominant FM stations in
3932 I wonder whether this is really what the
Commission had in mind when the new Radio Policy PN 1998-41 was released two
years ago the end of this month.
3933 From a single station, when Shaw entered the
Ontario radio market ten years ago in March 1990 with the purchase of
CHAY-Barrie, Decision 90-223, to a potential over-dominant position a decade
later if the present application is approved without strings
3934 Thus, the reality of the situation, as I see
it, is allowing the purchase of CILQ-FM will give Shaw-Corus three FM stations
in the Toronto market. I say that because CING-FM, which is licensed to
Burlington and indeed physically located there, is being completely directed to
the Toronto market in all facets of its operation, most particularly
programming. The City of Burlington with a population of over 130,000, for all
practical purposes, does not have a local radio station to serve its
3935 Thus, as I say, the true reality of the
marketplace is that Shaw-Corus will have three Toronto FM stations contrary to
the maximum two allowed per the revised Radio Policy. Thus, I suggest that
either CFNY-102.1, CILQ-107.1 or CING-107.9 should be required to be divested
either the Commission's or the applicant's choice, as the Commission may
3936 I also want to highlight a real concern with
the past actions of the Shaw with one of its southern Ontario stations, CKDK-FM
in Woodstock. This city of over 30,000 residents with a legacy of its own
station dating back to CKOX-AM, which commenced in December 1947, has been very
harshly dealt with in recent years due to the regionalization policy of the Shaw
radio division. Thus, there is minimal local programming being provided to
residents of Woodstock and Oxford County now, over the last couple of
3937 I can tell you firsthand from conversations
with a number of business people and ordinary residents, many of them do not
like at all how they have been treated. I fear that this pattern of establishing
regional stations by pushing the interpretation of CRTC policies to the limit
will continue by deft manoeuvring of programming in some of the stations just
acquired in the Power Broadcasting deal and those being attempted to be acquired
in this application presently being considered.
3938 I hate to think of even more format
duplication than is the present case per Schedule G, which follows. I won't read
it out. It's there based on what I interpret the various formats to
3939 Very probably, too, there will be further
consolidation of group marketing of these stations to prospective advertisers to
the detriment of smaller independent stations in the various markets which are
all outlined in the ownership breakdown per Schedule C of my original written
3940 On there, by adding the names up, there are 13
such owner with one station each in that part of Ontario from London to
Peterborough, as I described, as well as three smaller broadcasters with two
stations each, which are: CJRN 710, Telephone City Broadcast and Tillsonburg
3941 Undoubtedly, too, in every round of further
consolidation there will be significant numbers of job cuts and less positions
available for future broadcast school graduates.
3942 I'm sure I have now reached my time limit so I
will not try to expand any more on my various points. I simply ask the
Commission to carefully weigh all the evidence and facts presented in order to
not completely destroy the delicate balance of ownership structure in southern
Ontario radio that has been meticulously built up over the years and which has
made the private sector of the Canadian radio industry one of the very best
anywhere in the world.
3943 Thank you and I would be pleased to answer any
questions you might have.
3944 Thank you, Commissioners.
3945 COMMISSIONER WYLIE: Mr. Plunkett, I'm
Commissioner Wylie. Can you hear me?
3946 MR. PLUNKETT: Yes, I can, Commissioner
3947 COMMISSIONER WYLIE: I'm a bit intimidated
because I'm not writing a book on radio, but I would want to ensure that we
understand that your point is as follows, that especially in the southern
Ontario market, which is a very large extended market, the Commission's policy
won't work as intended unless we take into consideration the technical overlap
of stations rather than simply where they are situated and denominated as, let's
say a Burlington station, an Oshawa station, and possibly, if I understood you
well, the program orientation of the station over and above and separately from
the overlap technically.
3948 MR. PLUNKETT: Well, my main concern is on the
ownership structure of the southern Ontario stations, as I have said. I don't
have concerns in the other markets across the country. They are far enough apart
geographically that I don't think -- that I think that the Commission's
policies work fine. It's just that there has been such a fast development since
the new policy two years ago and of course to their credit has tried to take
maximum advantage of the changes. Some of this was certainly anticipated by all
concerned I'm sure. I just wonder whether this is too much too
3949 Perhaps one of the other things which I didn't
state was, if this application is approved and Corus does have the number of
stations that I have outlined here, which would be the case, I wonder how far
behind the other major players, Rogers and CHUM and Telemedia would be in trying
to keep pace, and the possible continuing what I will call detrimental effect to
the overall situation.
3950 COMMISSIONER WYLIE: I understand your concern.
What I wanted more clarification on is how one meets it. I gather it would be,
in part, by technical overlap.
3951 MR. PLUNKETT: Perhaps one suggestion would be
that the existing rules and the various policies and regulations are fine except
that it probably was not foreseen, until we now have these recent developments,
that the southern Ontario market perhaps needs an additional rule or some
section to perhaps provide for overlapping markets. I feel that this was not
probably anticipated at the time that the present rules were
3952 COMMISSIONER WYLIE: You mentioned programming
orientation. Would you suggest that if there is an intensely local station, even
if there's an overlap, that that would not be a problem?
3953 MR. PLUNKETT: That would be less of a problem.
But the trend seems to be that when local stations are bought out, and I don't
mean just Shaw's and Corus' management style but just in general, the local
stations are becoming more regionalized all the time, and I think to some extent
that's probably inevitable, but I don't think it should go as far as presently
3954 COMMISSIONER WYLIE: So I think I understand
your position, that in the Greater Toronto Market one should consider technical
overlap in deciding whether or not it becomes an exception to the maximum
3955 MR. PLUNKETT: Right. Or, as I say, consider
developing a new policy, and I realize that could only be done after the fact
here, that would accommodate these kinds of situations.
3956 COMMISSIONER WYLIE: Thank you,
Mr. Plunkett. Unless my colleagues have questions, I don't have any
3957 MR. PLUNKETT: I appreciate being heard very
3958 CHAIRPERSON OF THE COMMISSION: There is one
additional question by Vice-Chair Colville.
3959 MR. PLUNKETT: Thank you.
3960 COMMISSIONER COLVILLE: Mr. Plunkett, David
3961 MR. PLUNKETT: Yes, Mr.
3962 COMMISSIONER COLVILLE: I noted in response to
Commissioner Wylie's question you said you had no concern with the other
stations because they are geographically far enough
3963 MR. PLUNKETT: You mean in Vancouver and the
Alberta situation, Calgary and Edmonton? Is that what you mean?
3964 COMMISSIONER COLVILLE: That's right. The
stations in the rest of the country beyond the area that you were discussing
with Commissioner Wylie.
3965 MR. PLUNKETT: I'm more familiar with southern
Ontario, you know. And I do feel, from my knowledge of Alberta, which would be
the only other possible area, that there definitely is overlapping of coverage.
Particularly on AM. The major stations in Calgary versus the ones in Edmonton
can easily be heard in each market and Red Deer stuck in between. The FM, I feel
that there is less of an overlapping of signals and I just decided I took on
enough trying to analyze the southern Ontario situation.
3966 COMMISSIONER COLVILLE: Right.
3967 My question relates to the southern Ontario
3968 I just wanted to say that I noted that you
felt the others were geographically far enough apart. So even if we consider the
stations that you have listed in your Schedule F, if we take, for
example -- and I'm just taking this as an example -- Oshawa, say, as
one case and then Barrie as another, would using your argument that the stations
are geographically far enough apart -- wouldn't those two stations be
considered geographically far enough apart?
3969 I mean, I guess the question is: How does one
cut this pie if you're going to talk about overlapping markets?
3970 MR. PLUNKETT: Right.
3971 I feel at this present time that CHAY in
Barrie is being directed properly to its local Barrie market. The fact it can be
heard fairly well in the northern part of Toronto is a fact of the coverage the
station has, but I'm not concerned about that in itself unduly.
3972 And the Oshawa situation, time will tell.
Corus just took over the station a month ago. I would be concerned I suppose if
they tried to change the Oshawa station into a regional station, like I feel
they have done with Burlington, and start to really direct it to Toronto, which
would be another signal, as I have said, in the Toronto market and whether it
would be to the detriment of the local Oshawa market.
3973 COMMISSIONER COLVILLE: So is your fundamental
concern that all of the stations around the fringes of Toronto would all end up
being directed towards the Toronto market?
3974 MR. PLUNKETT: Well, I think that approving all
this and what I would almost think would revolve after this, that could very
well be the ultimate concern.
3975 COMMISSIONER COLVILLE: Okay. Thank you very
3976 MR. PLUNKETT: You're welcome.
3977 CHAIRPERSON OF THE COMMISSION: Thank you very
much, Mr. Plunkett.
3978 MR. PLUNKETT: I most appreciate
3979 CHAIRPERSON OF THE COMMISSION: Thank
3980 MS VOGEL: Now I would invite Mr. Canales
of MediaGroup to make his presentation.
3981 MS KENNEDY: Madam Vogel, it's Margaret Kennedy
3982 MS VOGEL: Yes, Margaret?
3983 MS KENNEDY: Mr. Canales is not here. He will
be contacting Mr. Healey in a few minutes. So I would like to thank you and I
would like to thank the Commissioners for this special arrangement that you have
made for both gentlemen and at this point we will be closing our
3984 Thank you very much.
3985 MS VOGEL: Thank you, Margaret.
3986 CHAIRPERSON OF THE COMMISSION: Thank
3987 Alors, we will close ours too for lunch. We
will come back at 1:30. Would that be convenient?
3988 MS VOGEL: At 1:30?
3989 CHAIRPERSON OF THE COMMISSION: Yes.
--- Upon recessing at 1202 / Suspension à 1202
--- Upon resuming at 1332 / Reprise à 1332
3990 CHAIRPERSON OF THE COMMISSION: Madam
3991 MS VOGEL: Our next intervenor this afternoon
is Specialty and Premium Television Association. Please proceed whenever you are
3992 MR. FRASER : Thank you.
3993 Good afternoon, Madam Chair, Madam Vice-Chair,
Mr. Vice-Chair, Commissioners. I hope you enjoyed your lunch as much as we
INTERVENTION / INTERVENTION
3994 MR. FRASER: My name is Fil Fraser. I am here
in my capacity as Chair of the Specialty and Premium Television Association and
I want to assure you that's the only hat I'm wearing today.
3995 With me is, starting from my left, SPTV's
Director of Policy and Regulatory Affairs, Mario Mota. To my immediate right
Jane Logan, our CEO and President of SPTV, and next to her Stephen Zolf of
Heenan Blaikie, who is our legal counsel.
3996 SPTV welcomes the opportunity to appear before
you today, Commissioners, as the industry association representing the vast
majority of Canadian specialty, pay and pay-per-view networks. Our 40 members
range from networks held by large corporate groups, to public broadcasters, to
independent and stand alone networks, including third-language networks and
3997 Our comments today will focus on the
application by Corus to acquire WIC's pay and specialty television assets. We
recommend that Corus be required to divest these assets currently held in trust,
while we wish to clarify that we take no position with respect to the
disposition of WIC's other broadcasting assets, including radio and conventional
3998 In our remarks we will tell you why we support
the Commission's current policy which prohibits further ownership by dominant
BDU's of programming services and how that policy continues to apply to this
day. We will also address competition and capacity and respond to points raised
by Corus in their supplementary written filings.
3999 In your 1995 Convergence Report, the
Commission determined that there was a potential for preferential treatment by
cable BDU's of affiliated programming services in areas including access,
pricing, packaging and promotion. You determined that the potential for undue
preference could only be reduced if transparent access rules were established
and sufficient channel capacity became available on cable
4000 In subsequent rulings, the Commission found
that market conditions with respect to channel capacity and competition did not
materialize, as it had anticipated in the Convergence Reporter. Therefore, its
newly enhanced, or enacted -- enhanced they should have
been -- therefore, its newly enacted access rules were not having the
4001 So, on the basis of this, the CRTC denied
further ownership interests in pay and specialty services by dominant (cable)
BDUs or their affiliates, pending changes in market conditions.
4002 Is this policy still relevant today? We submit
that it is. While we argue that the past 12 months have been characterized by
many technological advances, major corporate restructuring in broadcasting and
in distribution, and regulatory developments including the digital licensing
framework policy, very important, nevertheless, the natural market forces of
ample capacity and true competition have not materialized. They have not
mitigated the continuing market power of dominant distributors.
4004 MS LOGAN: Cable operators currently control
about 90 per cent of the Canadian subscriber base, dominating the distribution
market. Competitive BDUs, the new entrants, have a mere 9 per cent market share.
A number of key observations are warranted:
4005 Nearly half of DTH's market share is made up
of customers of Star Choice, which is controlled by Shaw.
4006 DTH's market share has been realized primarily
through expanding the subscriber market rather than taking away customers from
4007 The CCTA's most recently annual report shows
growth in both residential cable subscribers and total cable subscribers in 1999
4008 And not one cable operator has applied to the
CRTC for relief from basic rate regulation as a result of losing 5 per cent of
its subscriber base.
4009 These are hardly the hallmarks of "sufficient
competition" from the standpoint of our members. Programming services continue
to rely on cable to reach about 8 million customers, or over 90 per cent of our
total subscriber base.
4010 In fact, we have seen greater consolidation of
ownership and increasing market dominance by large cable operators in the past
year as they acquire more cable systems. This concentration of ownership is
significant, since these companies often negotiate collectively when dealing
with programming services.
4011 For pay and specialty services, channel
capacity constraints are a reality in reaching the 96 per cent of Canadian cable
subscribers who rely on analog service. The roll-out of digital cable has fallen
far short of expectations. At one time, cable operators were confident that 15
per cent penetration would be achieved by September 1999, whereas today, the
digital roll-out stands at less than 4 per cent. Shaw, which has been an
industry leader, has about 7 per cent penetration of digital cable. Rogers last
week announced that 77,000 of its 2.3 million subscribers are now receiving
digital cable service and it won't be increasing in the near term because of a
shortage of digital boxes.
4012 In this limited capacity environment, the
potential for undue preference is in the areas of pricing, placement, promotion
and packaging, in addition to access. The fact the WIC's pay and specialty
services are already been carried by Shaw is not the issue.
4013 Corus argues that capacity issues are resolved
in a digital environment, as this is where pay services will primarily be
distributed. This ignores the reality that undue preference concerns go well
beyond the issue of access. Our concerns in the pay environment include: the
role of cable CSRs advising customers on package selection; the number of
digital channels set aside for pay and pay-per-view; which customers are served
first if there is a waiting list for digital boxes; and of course the other
issues relating to pricing, promotion, packaging and contract
4014 MR. FRASER: Corus argues that the undue
preference prohibition and other existing regulatory mechanisms are sufficient
to allay concerns about self-dealing. We respectfully disagree. There remains a
major imbalance of power between dominant distributors and specialty and pay
television networks. A distributor has the power to make or break a programming
service based on issues such as pricing, channel placement and
promotion -- the keys to survival and success in specialty
4015 And while cross-ownership creates an incentive
to confer an undue preference, the same power imbalance creates a disincentive
for any network to complain about it. That is why the current complaints-driven
process for dealing with undue preference yields few complaints. In any case, as
the Commission has concluded, an after-the-fact finding of undue preference does
not ensure a fair and transparent distribution market.
4016 WIC's pay and pay-per-view services were
licensed years ago as analog services. The Commission clearly noted in its
digital licensing framework policy that existing pay and specialty services are
not affected by the new framework, and will continue to be subject to existing
4017 Both Shaw and Corus have discussed a proposed
Code of Access as a way of dealing with these issues, especially undue
preference. We are not convinced that a Code is a substitute for the
Commission's current policy, which prohibits further ownership by dominant
distributors of pay and specialty services. The current prohibition precludes
further incentives for dominant distributors to engage in anti-competitive
behaviour vis-à-vis unaffiliated programming services.
4018 If ultimately the Commission decides to pursue
a Code approach, we submit that the Shaw proposal falls far short of addressing
issues relating to fair and equitable treatment of non-affiliated programming
services. We have particular concerns about pricing, packaging, promotion,
contract terms and so on. Furthermore, the Code approach raises a host of issues
relating to effective monitoring and enforcement.
4019 Finally, we're concerned about the process.
Developing a Code represents a major public policy shift. In our view, the
public interest warrants a full proceeding in which any proposed Code should be
subject to public comment and Commission scrutiny. It is too important an issue
to be addressed on any kind of an ad hoc basis.
4020 So, in summary, SPTV believes that it is not
in the public interest to approve Corus' acquisition of WIC's pay and specialty
4021 We thank you for the opportunity to come here
today. Nous sommes prêts à répondre à vos questions. Merci.
4022 CHAIRPERSON OF THE COMMISSION: Merci
4023 I would Vice-Chair Wylie to ask the
4024 COMMISSIONER WYLIE: Good afternoon, madam and
4025 Your position is quite clear in your written
intervention and it is clear today in your oral intervention. I just have one
area that I would like to explore with you. Do you know how many Shaw
subscribers received their pay services with a digital decoder, as opposed to an
4026 MR. FRASER: Madam Vice-Chair, I am going to
act as a quarterback and I am going to pass the question to Ms
4027 COMMISSIONER WYLIE: I understand it is not
your company, but it is the services that you represent. Do you have an idea of
how widespread that is or if there are still a lot of subscribers who receive
pay services and pay-per-view services with an analog decoder?
4028 MS LOGAN: No. I think -- I don't
have personal knowledge of the numbers. We know that generally throughout the
cable world the penetration of pay television is at about 9 per cent
4029 We know that the penetration of digital cable,
which is targeted first at the pay subscribers is at about 4 per cent overall.
Shaw has the higher level.
4030 COMMISSIONER WYLIE: But Shaw has a higher
4031 MS LOGAN: But Shaw is at 7 per
4032 COMMISSIONER WYLIE: It's 7 per cent. So it
would be 7 per cent of their subscribers have a digital box.
4033 MS LOGAN: That's right.
4034 COMMISSIONER WYLIE: Therefore, would you
assume that -- I guess they can tell us that most of the subscribers
who subscriber to pay services do it through a digital box?
4035 MS LOGAN: That would be my
4036 COMMISSIONER WYLIE: Yes. The reason I am
asking that is to see whether your view is different with regard to preventing
more ownership or higher ownership or new ownership of the services that are at
stake here, whether there is a difference considering that it's received
digitally between the concern we may have with let's say Teletoon and the Family
Channel which is still received on an analog basis compared to the other
services concerned, one of which is a DTH pay-per-view and the other three
subject to what Shaw has to tell us are probably received in the Shaw
territories mostly with a digital decoder.
4037 I would like your views on whether that
alleviates the concerns, especially since, as you point out, the access rules
still apply because they are still under the rules as they exist, so they would
have to be carried.
4038 Secondly, the capacity problem would be
different. It's a different environment that has developed, especially in Shaw
territory, whether a case could be made that the concerns are less perhaps, the
concerns that have been traditionally expressed.
4039 MS LOGAN: You have made my first point, which
is that the Commission's current policy continues to apply to the established
pay television services.
4040 Do we have fewer concerns about undue
preference in this environment because they are digital? I think it was
Commissioner Colville who said yesterday that we are, of course, in a
transitional environment, an environment which for most services depends heavily
on analog and we are transitioning to digital.
4041 With respect to the pay television services,
the other issues that concern us in due preference which go beyond access,
packaging, pricing, placement, continue to be in play and I listed some of them
in my opening remarks. The concerns are how are the services sold and packaged
and how does that impact on the rest of the cable offer? What numbers of
channels are then allocated to pay-per-view and pay television and how does that
affect the ability of other services to launch or be made
4042 COMMISSIONER WYLIE: Is packaging not less
relevant with pay services?
4043 MS LOGAN: Well, I think in any offer to
consumers pricing is always an issue and it is what's your loss leader, what's
your high margin service, what discounts are you offering, what free periods and
are they all equitable? So those are all issues that come into the discussions
of undue preference.
4044 COMMISSIONER WYLIE: And do you think that
the -- you speak about Commission policy. The Commission has already
established a policy with regard to vertical integration that will be followed
when digital services -- where the services are themselves licensed as
digital comes into play. How would you -- why would you make a
difference between the current pay services that are offered in a digital world
at the moment, to the point of requesting divestiture?
4045 MS LOGAN: Well, first there is a huge
difference, of course, between networks that have been established for 15 years
and are healthy and profitable and the new risky networks that you will be
licensing later this year.
4046 I don't want to pretend to read the
Commission's mind, but it was understood by many at the time where you allowed
flexibility in BDU ownership for these new risky digital networks that you were
doing so in order to ensure lots of new services out there and help drive the
4047 I think when it comes to the pay television
services, Mr. Cassaday said, of course, that movies are a driver of digital. But
the fact is those services will be a driver of digital regardless of who owns
them and they are established today.
4048 COMMISSIONER WYLIE: Do you think that a
penetration of 7, 9, 8 per cent is not a risky business? You mentioned that the
digital world will be different because it will be very risky, et cetera. I am
just trying to see whether there is a distinction to be made between the pay
services and the analog specialty services and your concerns. I gather you don't
see a difference?
4049 MS LOGAN: I certainly see that the transition
from analog to digital is much further along with respect to the pay television
services. We continue to have undue preference concerns.
4050 COMMISSIONER WYLIE: My only area of
questioning because the rest is -- I read your written presentation
and heard you today, unless my colleagues have questions your position is clear.
This was the only area that we were trying to think through ourselves, since you
had thought of the possible distinction between the two in your concerns. But if
you have nothing to add neither do I.
4051 Thank you, Madam Chair.
4052 CHAIRPERSON OF THE COMMISSION: Thank you very
much, madam, messieurs. Thank you.
4053 MR. FRASER: Merci.
4054 MS LOGAN: Thank you.
4055 MS VOGEL: I would like to invite MediaWatch to
come forward now for their presentation.
4056 CHAIRPERSON OF THE COMMISSION: Welcome. Good
INTERVENTION / INTERVENTION
4057 MR. POYNTZ: Good afternoon, Madam Chair and
fellow Commissioners. My name is Stuart Poyntz and I am the Director of Media
Education Programs at Pacific Cinematech, a film institute in
4058 I am also a volunteer with MediaWatch. Irene
Brenner, Executive Director of MediaWatch asked that I send her regrets for not
being able to attend the hearing.
4059 As you know, MediaWatch is a national
not-for-profit feminist organization which seeks to transform the media
environment, from one in which women are either invisible or stereotyped to one
in which women are realistically portrayed and equitably represented in all
their physical, economic, racial and cultural diversity.
4060 MediaWatch has been actively involved in
representing consumers who are concerned about the offensive programming by
CILQ-FM, a WIC-owned station of the Howard Stern Show in Toronto since it came
on Canadian airwaves in September 1997. MediaWatch was one of the many concerned
viewers and organizations instrumental in getting it pulled from CHOM-FM, a
Montreal radio station, and successful in dissuading CHUM television from
broadcasting the television version of the morning radio show.
4061 But also, as you know, the WIC-owned CILQ-FM
continues to air the Howard Stern radio show in Toronto and this property is one
of many in the course transaction which is the purpose of my appearance
4062 The introduction of the sex role portrayal
code for television and radio programming states clearly:
"Canadian broadcasters recognize the cumulative effect of negative and
inequitable sex role portrayal and seek to address this issue effectively and
responsibly with this code." (As
4063 It is the contention of this intervention that
the continued airing of Howard Stern on CILQ-FM is in direct contradiction of
the intent and spirit of the code. The guidelines define negative or inequitable
sex role portrayal as referring to language attitudes or representations which
tend to associate particular roles, modes of behaviour, characteristics,
attributes or products to people on the basis of gender, without taking them
into consideration as individuals. Negative or inequitable portrayal of women
and men can be both explicit and implied.
4064 As CBSC decision made on February 20, 1998
regarding complaints made against the Howard Stern Show broadcast in December
1998 and January 1999 determined that codes were violated. The decision
identifies that the use of the term "pigs" in referring to women was in breach
of the provisions of clauses 2(c) and 4 of the sex role portrayal code. The
portrayal of women as objects or meat, the emphasis on their height, weight and
bust size are issues disparaging to women's self-image.
4065 The Ontario Regional Council of the CBSC
determined that the shows manifested a degrading approach to women and that the
Stern shows reviewed in the February 20th decision violated both the underlying
spirit and express provisions of the sex role portrayal code.
4066 Although CILQ-FM installed a digital time
shift recorder in February 1999, it is MediaWatch's contention that there
continue to be violations against the code almost on a daily basis during the
Howard Stern Show. This is particularly unfortunate given the show's broadcast
time of 6:00 a.m. to 11:00 a.m. on weekday mornings, making it accessible to
children and teenagers who are more influenced than adults by the attitudes
expressed through the mainstream media.
4067 MediaWatch outlined our general concerns to
John Cassaday, President of Corus Entertainment, on January 17 of this year. In
response, we were informed that Corus is committed to abiding by the CBSC
guidelines and would pull the Stern show if it were found to be in contravention
of the sex role portrayal code.
4068 To persuade Mr. Cassaday pursuant to this
hearing, MediaWatch developed a national research program. We believe that the
results of the research demonstrate that despite the editing which Q107 has
undertaken, the program does in fact continue to contravene the
4069 We hope that Corus will now act on its stated
commitment and cancel the program on Q107 as one of the public benefits to this
transaction to the purchase of WIC.
4070 Our main argument is that although we
appreciate that the CBSC has on two previous occasions ruled the Stern show in
contravention of the guidelines, the program continues to air and continues to
include material that is degrading to women, despite the station's efforts to
edit prior to broadcast.
4071 MediaWatch is convinced that this particular
case of systemic sexism, which is not amenable to spot editing, undermines
consumer confidence in the self-regulation process.
4072 Even in its edited form, the Stern show
continues to not adhere to the spirit and intent of the
4073 The intervention today is based on a poll, the
results of five days of monitoring of the show on Q107 and an exploratory pilot
study done by SFU communications students exploring reactions to Stern on TV.
The poll results: To determine the climate of public concern on this issue,
MediaWatch commissioned a poll on community attitudes towards standards of taste
with Canadian Facts, a national public opinion firm.
4074 The national sample from the survey was 750
Canadians 18 years of age and over proportionate to population. Interviewing was
conducted between April 8 and 16 of this year. The confidence limits are plus
and minus 3 per cent.
4075 One in four Canadians report they have seen or
heard something which they found offensive on the Internet or on the radio last
year, but fully one in two were offended by television. Offences were more often
reported for depictions of sex, bad language and violence, but stereotyping of
women and verbal or physical abuse against women and racism were also
4076 When Canadians are offended by something they
see or hear in the media the competitor wins. One in two report they will switch
to another channel, 41 per cent that they will switch off and fully one in three
will talk to others about what they saw, suggesting negative word of mouth may
carry large market clout.
4077 Just one in twenty tried to complain to
someone, suggesting that a complaints-based system of regulation will catch a
very small proportion of those who encounter offensive
4078 Awareness of the Howard Stern Show was lower
outside of Ontario, but overall 51 per cent of Canadians have seen or heard
something about Stern. Canadians were next read the following description:
"Stern is available on CILQ Radio in Toronto, which is owned by WIC, and may
be seen on some satellite TV in Canada. As you may know, Howard Stern is a
self-styled shock jock who says his brand of satire talk radio offers equal
opportunity insults to women, to disabled and racial and linguistic minorities.
Recently, the Canadian Broadcast Standards Council received a complaint against
Stern and ruled that Stern's remarks present a threat to the equality of women
resulting from degrading and offensive material. The CBSC ordered CILQ Radio to
edit Stern's remarks before airing.
"Do you strongly support, support, oppose or strongly oppose the CBSC
Council's ruling? " (As
4079 A majority 61 per cent of all Canadians either
strongly support or support the editing of offensive material that represents a
threat to the equality of women; 23 per cent oppose such editing; 15 per cent
4080 MediaWatch continued monitoring the Howard
Stern show, selected five sample Howard Stern shows aired on Q107 in Toronto
between the hours of 7:30 and 9:00 a.m. We will table a report of the
transcripts of that monitoring separate to this brief.
4081 Our findings show that Howard Stern continues
to break the broadcasting codes in ways very similar to the earlier CBSC
rulings -- and if I can just ask for your indulgence, I would like to read
a couple of clips from edited briefs from those shows.
4082 Two shows, one on February 3rd, 2000, Howard
"Your sister's a little whore. Bring her down. Let me bang her right here on
"You know my
4084 Howard Stern:
"Yeah. Bring her down. She's a filthy
4085 Follow-up show, March 22nd, 2000, the program
documents a contest involving three women who are competing to win breast
implants and who are requested by Stern to reveal their breasts to him. A brief
excerpt from the show goes:
4086 Howard Stern:
"Now, ladies, let me explain how the game works. I'm going to ask a series of
questions of you, much like our `buck billionaire' contest. When you get a
question wrong, you'll either be burped or farted on by one of those guys and
your face must be right next to
4087 Robin quivers:
"Or you get thrown
4088 Howard Stern:
"That's right, you get thrown out of the game, so you can avoid these
gentlemen's farts and burps. Now, Contestant Number 1 is Julie. Julie, and you
want breast implants very
4089 Julie says, "Yes".
4090 Howard Stern:
"And you're very flat. I can't tell. You look beautiful. You got some
4091 Howard Stern:
"I'll bet you got nice hips and everything. You got a nice ass. Let me see.
Turn around and let me see your
4092 He continues on. Howard asks a question. The
answer is incorrect. Howard says:
"The answer is `a baseball player'. Unfortunately, you have to get farted on.
Bring her over. Bring her over. And here's Jeremy. Now you gotta get your face
right in this guy's butt. Here we go, poor girl. Get your face there. Get your
4093 Farting noises.
"I think we have to get you a little
4094 He carries on. Ends by saying:
"Go ahead. Get in there. How did you feel? Humiliating? It's gotta be. All
right. You did the best you
4095 And there are other excerpts which are --
from the show -- which are going to be in the brief we'll
4096 Our findings show that individually, together
and in the context of Stern's general programming trends, these segments of the
Stern show contravene four CBSC guidelines covering the interaction of women on
TV and radio, questions of diversity, exploitation and program development and
4097 MediaWatch intends to file another complaint
to the CBSC and is confident of a ruling against the broadcaster, if
4098 In that case, we would argue that Corus is
with -- to Corus that three strikes is more than enough for Corus to call
Stern out on Q107.
4099 We trust that the results of monitoring will
show that Howard Stern's offensive remarks on radio can speak for themselves.
But, as you know, Stern comes into this country on more than
4100 I would like to introduce Nicole Cokay who's
an SFU communications student who will talk about a pilot study done at SFU on
Howard Stern on television. Nicole would also like to air a brief video segment
to give context.
4101 CHAIRPERSON OF THE COMMISSION: Aren't we close
to the 10 minutes, now? I think you have --
4102 THE SECRETARY: We are right on the 10 minutes,
at this point, yes.
4103 CHAIRPERSON OF THE COMMISSION: So could you
please come to your conclusion.
4104 MR. POYNTZ: We can come to the
4105 Does that mean that there is no time to air
4106 CHAIRPERSON OF THE COMMISSION:
4107 MR. POYNTZ: Okay. To wrap up. The real
position that MediaWatch has on this issue is that, with the evidence from the
research, the monitoring, we're disappointed that Corus has not taken the
opportunity to speak out on its responsibilities to the guidelines under the
Broadcast Standards Council or demonstrated a sensitivity to the Stern issue. We
presented data which suggested such offensive programming is not good business,
that the CBSC's prior rulings have widespread public support, that monitoring
the five sample days of the show on radio demonstrate continued system racism
and sexism and that the problem will only get larger with the advent of the U.S.
imports of Stern on TV.
4108 The opportunity of this hearing should tell
Corus that performance counts and its reputation as a quality family broadcaster
is at stake. As a public benefit, on the change of ownership, Corus should
cancel Howard Stern. If the company refuses to do so, MediaWatch will mount a
formal complaint against the CBSC and on the three strikes out rule Corus should
cancel the show.
4109 What MediaWatch also wants to argue is that
while we appreciate that the CBSC has, on two previous occasions, ruled the
Stern show in contravention of the guidelines, the program continues to air and
continues to include material that's degrading to women. The particular --
excuse me. Disabled women.
4110 The ongoing presence of Stern on our public
airways also puts into question the relevance of the self-regulation process in
any sale or new ownership transaction. Recommendations against Stern by this
Commission can help change this trend.
4111 Thank you.
4112 CHAIRPERSON OF THE COMMISSION: Thank
4113 I would ask Commissioner Pennefather to ask
4114 COMMISSIONER PENNEFATHER: Thank
4115 Thank you for being here.
4116 Your position is quite clear, both in terms of
your presentation today and what you have put on file. I can only note that the
licence renewal of CILQ-FM does address the fact that the Commission anticipates
that CBSC's self-regulatory mechanism will continue to be effective and that,
however, we do note the concerns and will continue to monitor the situation and
your presentation today is continuing in that direction, in terms of also
informing us on what MediaWatch is looking into, and on your discussions with
the -- with Corus themselves. Corus has a reply on file -- I'm sure
you're aware of that reply and I gather from your presentation you have taken
the discussion further with them directly, which is appropriate, I would assume.
So I really don't have any questions. It's clear that you're taking the approach
that we proceeded to put forward in the licence renewal and public debate
continues to be important, which is the mandate of MediaWatch, and I'm sure that
media literacy is also high on your list of mechanisms whereby the public
themselves can also bring their point of view to the situation.
4117 Thank you for bringing it again to our
4118 CHAIRPERSON OF THE COMMISSION: Thank you very
4119 THE SECRETARY: Our next intervenor this
afternoon is Concerned Children's Advertisers.
4120 Please come forward.
4121 CHAIRPERSON OF THE COMMISSION: Bonjour. It's a
pleasure to have you again.
INTERVENTION / INTERVENTION
4122 MS BOOT: Well, good afternoon, and it's
certainly a pleasure for us to be here again and we appreciate you receiving us
and providing Concerned Children's Advertisers with the opportunity to
participate, really, in this landmark hearing.
4123 My name is Sunni Boot and I'm a founding
member of this organization and its immediate Past President. With me are Cathy
Loblaw, Vice-President and General Manager of CCA, and Linda Millar, Director of
4124 We are pleased to have the opportunity to
share with you our support for the Corus application, an application which we
believe will bring important benefits to Canadian children, both in terms of
media programming and media literacy. It's an application that will strengthen
this company's ability to serve, support and benefit these same Canadian
4125 As Canada's newest entertainment company,
Corus' interest has a rich history and tradition of child-centered values and
focus. Through YTV and Treehouse, Corus has contributed significantly to this
country's child television landscapes and, with the approval of this
application, will be better armed to continue to do so.
4126 From a media perspective, which is close to my
heart, this application makes synergies possible and these synergies will allow
Corus to enhance its existing programming services for the benefit of young
4127 Recognizing the economic limitations of
children's television, Corus' priority, its focus and commitment to child
programming is, in our opinion, the very underpinning of children's television
in this country.
4128 The approval of this application is essential
to maintaining and building a rich, diverse and age-appropriate Canadian place
for children to spend their television time.
4129 We don't have to tell anyone in this room that
the competitive and global marketplace is a reality for Canadian
4130 If we hope to preserve and grow Canadian
children's programming, we must give our domestic broadcasters the support and
the resources to compete and succeed.
4131 This Corus application creates the size,
synergies and scope to secure the prominent place for Canadian television within
the broadcast system. This will provide children with quality Canadian
television because that's what Corus is all about. Through the approval of this
application, Corus will be able to extend this commitment in unprecedented and
4133 MS LOBLAW: I think it's important today that
we also be reminded of our responsibilities in the area of media literacy
education for young Canadians. When you consider the amount of time children
spend with television -- an average of up to three hours a day -- it's
imperative that we, as a country, as companies and as regulators take seriously
our responsibility to help children interpret, cope with and understand the
television they are watching and the media messages they are exposed
4134 Media literacy took center stage as an issue
of importance for the Commission in 1995. It became an area of much discussion
through the CRTC hearings on media violence and the protection of
4135 At the conclusion of the hearings, the CRTC
issued its final report. In this report, the CRTC stated that long-term public
awareness and media literacy programs will be the decisive factors in changing
4136 To encourage the creation and delivery of such
media literacy initiatives, the Commission went on to state that they will
accept funding of third-party organizations directly involved in media literacy
education as a tangible benefit at the time of transfer of ownership or control
of broadcasting undertakings.
4137 A significant and important statement that has
particular relevance to this application.
4138 It was in response to this that Concerned
Children's Advertisers made an industry commitment to contribute to media
literacy education that would help children to develop the skills to watch
carefully and think critically. That commitment has resulted in the creation of
a uniquely Canadian program called "TV and Me", connecting children and
4139 "TV and Me" is a comprehensive program
designed for children in Grades K through 6 that delivered the apparent and
educator workshops and on-screen television delivery.
4140 "TV and Me" represents the philosophy of
learning that addresses current pressing needs in the area of media literacy
education and healthy life-coping skills. Written by a Canadian educator, for
educators, this child-centered resource fills a void in Canadian classrooms and
4141 To try and help capture and share with you a
little bit of the excitement and energy of the program, we have a small video
presentation that we would ask you to kindly turn your attention
4142 If you could please roll the tape. Thank
--- Video presentation / présentation vidéo
4143 MS LOBLAW: Thank you.
4144 A program of this substance, quality and
significance does not happen without significant past and future investments and
commitments of shared resources and funding. We are deeply grateful and
appreciative of Corus' commitment and support; it is making media literacy
education a reality in Canada.
4145 Funding, a million dollars in funding in media
literacy education will not only be unprecedented in its size and impact but,
most importantly, in its value and legacy for our children. Truly a "tall
4146 Thank you.
4147 CHAIRPERSON OF THE CHAIRMAN: Thank
4148 I'm the one asking the questions this
4149 It's quite clear why your support goes to the
application, but I would like to get your view. Do you see -- and I
understand the importance of such a program and your initiative as an
organization in this particular one, but I would be interested in getting your
views as experts into children's programming and what you see on the screen, and
certainly you don't go into media literacy for children without having kind of a
diagnosis on what is the state of television for children, as we speak, in this
4150 Do you see that consolidation is really
helping? Or, you know, some would say that while we do have consolidation and
more focus of some player like Corus on children, well some feel that they don't
have that responsibility any more and kind of get away from it. You know. What
would be your diagnosis of this situation of children's programs in the country,
as we speak, and where do you see consolidation being -- you know, is it an
enhancement of children's programming? Or do you see it as neutral? How do you
4151 MS LOBLAW: Maybe I will start and then ask
Sunni to comment, as well.
4152 Certainly, we see the Canadian children's
television landscape as a very strong landscape and certainly something that we
all feel a lot of pride in. One of its great strengths is the diversity that it
offers, in terms of the variety and the choice, and we see consolidation as
playing a strong role in that in providing, in fact, more choice and in ensuring
that the companies have the strength and the resources and the financial
viability to be able to invest in children's television and to provide the kind
of programming that makes sure that when kids are spending those three hours a
day that they're seeing the Canadian experience, Canadian television and
television that is age appropriate and enriching to them. In particular, Corus
is, in our opinion, certainly the bedrock of Canadian television for kids and
really play a significant role in making sure that experience is truly a
Canadian one and truly one that's appropriate to their development -- and I
know that Sunni would like to build on that.
4153 MS BOOT: Actually, you were -- you pretty
well captured everything, but I would like to just maybe point out to the
Commission that the big concern that we have is that if we don't have a strong
consolidated player in the children's market, we could find ourselves inundated
with foreign programming.
4154 Canadian children's programming right now, I
think, enjoys a tremendous reputation around the world. So there is an
opportunity to build on that and to export our product, and we very much see
that everything that Corus has done and we have reiterated many times but,
because there's such a focus on children, because they program it so well, it is
age appropriate, it is a good balance of what we can get from other countries
around the world but it also has such a Canadian bent. And, actually, what
they're doing with the whole product, with YTV and Treehouse, I think what this
will give them is a greater financial basis to build on that and to really have
Canadian voices, not just for Canada but also maybe for the world, we have got
something very good happening here, with programming.
4155 CHAIRPERSON OF THE CHAIRMAN: What happens,
from your experience and your analysis, to the children's viewing, per se? You
know, it's one thing to provide the windows and the strong presence, but do
children come to the rendezvous? Are they there? Or do they choose other types
of programming not necessarily meant for them?
4156 MS BOOT: They will migrate outside of what we
would like to say are typical children's programming. They will migrate to prime
time programming, to all family programming, and certainly numbers would support
that. All the more reason for media literacy, by the way, because there is such
a concern for children who are maybe viewing unattended inappropriate programs.
But basically it is a very healthy market. If we can continue to provide --
and let's face it, at the end of the day, we need good entertaining programs,
too -- so if we can provide that, they will come and view those programs.
They certainly are going to Web sites -- and YTV also has an excellent Web
site -- so, you know, they are certainly looking at multi media. But I
still believe -- and BBM and Nielsen numbers bear this out -- that the
largest concentration of child viewing still is in appropriate times early
morning, after school and during family time periods.
4157 I don't know if I've answered your question
4158 CHAIRPERSON OF THE CHAIRMAN: Yes, you
4159 MS LOBLAW: And certainly, from a media
perspective, television continues to dominate children's --
4160 MS BOOT: Totally.
4161 MS LOBLAW: -- children's activity and
4162 I mean there's no question that the Internet
is growing at a rapid pace. But when you look at the numbers, television is
still that dominant force in children's lives. And that's why, from our
perspective, it's so important that we make sure that television time, that they
have the media literacy skills to be able to deal with what they're seeing and
to develop an appetite for television in a way that's healthy and appropriate to
their individual choice and that we are, from a programming perspective, making
that television as strong and Canadian as possible.
4163 CHAIRPERSON OF THE CHAIRMAN: Well, thank you.
I don't have any questions, and I don't think my colleagues
4164 Thank you.
4165 MS BOOT: Thank you.
4166 MS LOBLAW: Thank you.
4167 THE SECRETARY: Our next intervenor is Alberta
Motion Picture Industries Association.
4168 Would you come forward, please.
INTERVENTION / INTERVENTION
4169 MS EDWARDS: Good afternoon.
4170 Again, for the record, my name is Connie
Edwards. I'm the President of the Alberta Motion Picture Industries
4171 I would like to thank the CRTC for the
opportunity to intervene on Corus Entertainment's acquisition of WIC's pay
television and satellite assets.
4172 As you have heard, but for the record, for 26
years, AMPIA has represented independent producers and members involved in all
aspects of the film and television industry in Alberta. The mandate of the
Association is to ensure the growth and development of the indigenous industry
at the producer, technical, talent and craft levels. Central to this mandate is
maintaining an environment in which Alberta's producers can initiative, develop
and produce films and programs over which they have creative and financial
4173 AMPIA supports the proposed $12.5 million
television benefits package out of an asset value of $114 million. These include
the Family Film Project, the Teen Drama Project, Canadian Children in the New
Millennium, Young Filmmakers Co-Operative, Media Literacy Initiative, APTN/YTV
Initiative, Export Initiative and the Corus Banff Program, under conditions that
maximize benefits to the Alberta independent production sector.
4174 In practical terms, since the WIC pay
television assets derive a significant portion of subscription revenues from
western Canada, AMPIA feels it is reasonable and proportionate that benefits
accruing from these initiatives be reserved for projects owned -- or, at a
minimum, 50 per cent co-owned -- by independent producers who are resident
in the service area. This would include B.C., Alberta, Saskatchewan and
Manitoba, Yukon Territories, Northwest Territories and Nunavut.
4175 AMPIA, as you know, has an ongoing policy of
lobbying for a fixed percentage or dollar amount of benefits to be allocated to
Alberta independently-produced projects in order to guard against any potential
regional inequities. However, Shaw has demonstrated a commitment to allocate
funds equitably on a geographical basis via the Shaw's Children's Programming
Initiative and, therefore, in this case, we are prepared to trust that this
policy will also inform Corus Entertainment's allocation of their new proposed
4176 Regarding the terms of promise, AMPIA would
recommend that these benefits be expended over a five-year period, in order to
correspond with the benefits term proposed by CanWest Global, in regard to their
acquisition of WIC's free television assets as part of this overall
4177 With regard to the portion of the funds that
would be allocated to equity investment, as was put forward in our intervention,
we have noted Corus' response and are satisfied that the investment will be
recouped on a pro rata and pari passu basis with other investors and that all
moneys contributed to production under Corus' tangible benefit initiatives will
be incremental to the programming requirements and any returns from the equity
investments will be reinvested in incremental Canadian programming
4178 Regarding the issue of the management of these
new benefits, AMPIA recommends that the existing administration in place in
Calgary manage the funds under the Shaw Children's Programming Initiative. It is
ideally situated logistically, geographically and philosophically to administer
these new initiatives on behalf of Corus Entertainment.
4179 We note in their response that Corus would not
be opposed to this recommendation if the Commission considers it
4180 AMPIA is gratified to see, in the Corus
Entertainment executive summary, that these new benefits will of course be
incremental to the existing licence commitments of the existing WIC pay licences
for Superchannel, Moviemax, Viewer's Choice, Family Channel, VOD and Cellular
Vision. The principle of incremental benefits is a key concern for AMPIA and
reflects principles of the CRTC.
4181 AMPIA would like to note that, in the past,
WIC pay television has been a valuable partner for Alberta independent
producers -- and as we had discussed yesterday, the value of meeting with
people in your own region is great and is very good for the
4182 We were pleased to note the commitment that
these assets will continue to be managed from Edmonton facilities, provided that
licensing and investment decisions continue to reside with local
4183 YTV is currently underdeveloped in its
licensing co-production commitments with Alberta independent producers and AMPIA
seeks initiatives that would address this situation, such as regularly scheduled
visits to Alberta by YTV programmers and co-production
4184 We also suggest, as in our intervention, that
in addition to the development in equity dollar benefits that Corus put
additional dollars into licence fees over and above those proposed benefits.
While development in equity funds are of great value to our industry --
and, again, similar to what we said to you about CanWest -- these licence
fees would help to trigger additional funding necessary to complete the
financing of the productions and get them onto the screen.
4185 In closing, AMPIA offers support for the Corus
Entertainment application, with these above caveats. AMPIA looks forward to
working in partnership with Corus in its pursuit of programming
4186 Thank you for this opportunity, and we would
be happy to answer any questions.
4187 CHAIRPERSON OF THE CHAIRMAN:
4188 I would ask Commissioner Grauer to address our
4189 COMMISSIONER GRAUER: Thank
4190 I won't really have too much to ask you about
today because I think we covered a lot of territory yesterday.
4191 Were you here this morning when we had the
panel of producers here?
4192 MS EDWARDS: Yes, I was.
4193 COMMISSIONER GRAUER: As you know, we had a bit
of a discussion about the issue of quotas and ceilings and floors and whatnot
and, in light of that, I know you made a point of saying that AMPIA has a policy
of requiring percentages. But I wonder if you would just comment on the views
expressed by Mr. Thompson, in particular, and some of the others, about
4194 MS EDWARDS: I think, you know, certainly
everyone is entitled to their own opinion. I have nothing to say, you know, in
terms of being opposed to that position on their part. What I found interesting
was B.C. Film Commission who suggested -- and this may be -- this was
very interesting -- part of the problem is trying to get out to that table,
trying to let people know that we are experienced, we have good quality
programming, we have got the facilities, we have the personnel to produce good
Canadian programming. So perhaps, as was suggested -- and quotas are so
difficult. We understand the business mechanism of this and that quotas are not
necessarily the best way to go about it. Sometimes you have to implement quotas
at the beginning and perhaps, then, phase them out, as the proof is in the
pudding, if you will. So that was very interesting -- interesting notion
that the B.C. Film Commission had.
4195 COMMISSIONER GRAUER: Well, given that --
well, let me phrase it another way.
4196 MS EDWARDS: And perhaps, if I could just
elaborate, too, certainly there are lots of success stories in Alberta. There
are also some of the, let's say, smaller producers that do need that little
additional boost to get onto the national screen -- and I think that's why
we -- asked for quotas. And especially when you look at the asset value,
you want to make sure that you are seeing dollars in the community in a
4197 MS JANZEN: If I could just make a couple of
4198 Part of the issue this morning related to
what's happening in the community. And I think while overall in some areas it's
just documentary or educational programming, things are going well. The
statistics on the drama end, which is one of the key priority areas for the
CRTC, remains rather abysmal -- a drop from roughly 24 million to 3
million. That's a huge concern and a key issue.
4199 The other issue is we -- well, what have
been doing is looking at a transaction-by-transaction basis. So, for example, if
you look at A channel when -- AMPIA has supported A channel. A channel made
some very serious commitments to Alberta, and they have lived up to their
4200 In the case of Shaw, there's no specific
envelope, but Shaw has worked very hard with the Alberta community and they have
demonstrated a very close relationship.
4201 Our concerns on CanWest were on their record.
And it's -- I think that -- I don't think there's any person that
would say, "Let's stick to quotas to, you know, to tie ourselves in". The issue
is, is there going to be -- is there a trust in a situation where there is
going to be a strong relationship and commitment to where those assets are
coming from. That's what our concern with CanWest. That is not our concern with
Corus because of the very strong relationship between --
4202 COMMISSIONER GRAUER: And we should probably
stick to Corus and to finish with CanWest but -- thank you very much. I
think we have had a good airing of this issue over the course of the
4203 Thank you.
4204 CHAIRPERSON OF THE CHAIRMAN: Thank you very
4205 THE SECRETARY: Our next intervenor this
afternoon is Friends of Canadian Broadcasting.
4206 Would you come forward, please.
INTERVENTION / INTERVENTION
4207 MR. DUKE: Thank you. It's nice to be back
before you again, on this different issue.
4208 Madam Chairman, Members of the Commission, we
appreciate the opportunity to appear before you.
4209 From documents filed by the applicants, and as
Commissioner Colville established yesterday, Friends note that one individual,
J.R. Shaw, controls 77 per cent of Corus Entertainment's voting shares and 76
per cent of Shaw Communications' voting shares. Shaw and Corus are, therefore,
affiliated companies. Their recent structural separation by J.R. Shaw is an
attempt to respond to Commission policies limited increased ownership positions
and specialty and pay licence fees by cable multi-systems
4210 In its convergence report to the government,
in 1995, the Commission noted that -- I quote:
"While competition in distribution is evolving, cable companies still
exercise control over the delivery of most broadband services, and effectively
control the bottleneck for the delivery of entertainment services to the home.
The existing market power of cable companies provides the potential for
preferential treatment of affiliated broadband services. The opportunity for
preferential treatment, particularly in light of limited channel capacity,
requires that more comprehensive access rules be established to deal with price,
4211 At that time, the Commission determined that
this concern would dissipate only after a combination of, first, access rules on
price, packaging and placement, next, competitive broadcast distribution and,
thirdly, digital compression technology were all in place.
4213 MR. MORRISON: The 1997 broadcasting
distribution regulations state that:
"No licensee shall give an undue preference to any person, including itself,
or subject any person to an undue
4214 And added, in its public notice, that this
prohibition applied to all matters related to the acquisition and distribution
of programming services but will, more generally, apply to all broadcasting
activities of BDUs.
4215 In its 1998 Sportscope decision, the
Commission referenced the convergence report and the BDU regulations policy
statement in denying Shaw permission to acquire 48 per cent of Sportscope
because anticipated market competition and increased capacity had not taken
place, therefore, concerns over the potential for undue preference
4216 The Commission also cited Shaw's dominant
market position, as well as its horizontal and vertical integration, as factors
that could lead to anti-competitive practices and gate-keeping
4217 In its subsequent SportsNet decision, denying
Rogers Communications permission to increase its voting interest in CTV
SportsNet from -- to 40 per cent from 20 per cent, the Commission
referenced the Sportscope decision and stated:
"There remains insufficient channel capacity on cable networks and
insufficient competition among distributors to overcome concern related to the
potential for undue preference in the cable carriage of affiliated speciality or
other such broadband services. Until these circumstances change, cable licensees
and their affiliates should generally be prohibited from acquiring or increasing
their interests, held either directly or indirectly, in programming undertakings
other than those that provide over the air radio or television
4218 Just last year, in its French language
specialty licensing decision, the Commission acted further on its policy concern
over the potential for undue preference by limiting TVA's voting interest in
licensed specialities to less than 10 per cent because of its affiliation with
4219 TVA/Vidéotron, Shaw/Corus, they're both
affiliated, structurally separate and publicly-traded
4220 Last year, the Commission required Cancom to
divest ROB-TV because Shaw, the parent, would indirectly acquire a partnership
interest of 10 per cent or more in ROB-TV.
4221 Thus, the Commission has developed a standard
for evaluating applications by entities which are affiliated with dominant BDUs
to acquire or increase a voting increase in a specialty or pay licence. Faced
with concerns over vertical integration, the Commission has not hesitated to
impose conditions, or even to require divestiture, even in cases where the
investment does not involve control over but merely a significant interest in a
4222 Chairperson Bertrand, you said, at the 1998
Cable Television Convention:
"Notwithstanding the introduction of competitive forces, at this point in
time cable remains the dominant form of programming distribution in Canada. It
has the power to make or break a programming service via access, and as such has
the most important role in programming
4223 To alleviate the Commission's policy concerns,
an applicant would need to demonstrate that the tests of ample channel capacity,
a competitive BDU market and the roll-out of digital compression had all been
met -- Daryl pointed out earlier.
4224 Friends notes that the Corus application, one,
asserts abundant digital capacity in Shaw's systems while ignoring the
low -- well, 7 per cent is not low by industry standards but it's low in
terms of the total subscriber base -- penetration rates of digital which
Shaw has thus far achieved and it fails to note that the properties it seeks to
acquire are currently distributed in analog format and, therefore, that analog
capacity is the undue preference matter at stake and it fails to address the
matter of anti-competitive behaviour and undue preference in pricing, promotion
4225 The onset of competition in the distribution
market is evolving much more slowly than projected by the cable industry.
Friends notes that no cable licensee has applied for basic rate
deregulation -- an indication that none may have lost even 5 per cent of
their subscribers to competitors; the 1999 CCTA data suggest that there may be
only one million digital subscribers 2006 and current CCTA projections vary from
1.3 to 2.5 million digital subscribers by 2005 -- that would be digital
penetration of only between 12 and 28 per cent five years from now; and,
finally, the Canadian DTH competitors reach only 800,000 households, one-tenth
of the penetration of cable, and the majority of those households are not passed
4226 In its applications, Corus argues that it owns
no BDUs, that Shaw doesn't it and it has lots of diverse non-voting
4227 These statements are true but totally
irrelevant to the issue of undue preference.
4228 Corus goes on to assert that its structural
separation from Shaw offers a safeguard against undue preference behaviour. Not
4229 Undue preference concerns arise from the
alignment of interest of Corus and Shaw that result from their affiliation,
creating an economic incentive for Shaw to treat programming services in which
its affiliated company has an interest, or control, in a preferential manner.
The structural separation of their programming and distribution activities does
not in any way attenuate this incentive.
4230 While the above concerns may, in and of
themselves, lead the Commission to deny Corus' applications, Friends wishes to
add a further consideration; namely, ample evidence that, through its past and
its current behaviour, Shaw has demonstrated a sustained record of providing
undue preference to specialty and pay services in which it has an interest, to
the disadvantage of those services which operate at arm's
4231 Friends notes that many of the executives
responsible for this pattern of conduct are now in leadership positions with
Corus. A few cases:
4232 In the year following Shaw's investment in
Telelatino, that service's penetration increased from two million to 2.8 million
subscribers -- the data comes out of your -- came out of your cable
television database -- mostly on Shaw systems.
4233 Friends has heard credible reports that Shaw
did not pay fair market value for its investment in Telelatino, instead offering
to increase Telelatino's penetration in return for an equity share. We urge the
Commission to inquire from Corus/Shaw whether this report is true or
4234 Within a month of its Sportscope purchase,
subsequently denied by the Commission, Shaw placed Sportscope on its basic tier,
while placing other newly licensed services on optional tiers.
4235 Similarly, Treehouse TV, a Shaw affiliate, was
carried by Shaw on basic from its 1997 launch, while some other non-Shaw
licensees of the same vintage were placed on Shaw on lower penetration tiers and
still others were refused coverage.
4236 Shaw delayed the carriage of CBC's Galaxie for
several months by negotiating in bad faith, all the while promoting a competing
service in which it had an interest. This behaviour ended only once Shaw's WIC
investment suggested a forthcoming CRTC hearing.
4237 Contrary to Commission policy, Shaw has used
time allocated for local advertising in the signals of U.S. specialty channels
for promoting its telecommunications services, such as high-speed
4238 MS VOGEL: Excuse me, we are past the 10
minutes. Could you wrap up, please?
4239 MR. MORRISON: Sure.
4240 MS VOGEL: Thank you.
4241 MR. DUKE: Madam Chair, Friends relates this
litany in order to make the point that the leadership of Shaw/Corus has
displayed a pattern of conduct which suggests to reasonable observers that they
are prone to engage in undue preference behaviour.
4242 Friends recommends that the Commission
maintains its current policies, which would prohibit Shaw's affiliate Corus from
increasing its ownership position in these analog specialty and pay
4243 Friends therefore recommends that Corus be
required to divest itself of the specialty and pay services in
4244 Thank you, Madam Chair, Commissioners. We look
forward to your questions.
4245 CHAIRPERSON OF THE COMMISSION: Thank
4246 Probably legal counsel will have a comment
after Vice-Chair Colville who will ask you the questions.
4247 COMMISSIONER COLVILLE: Thank
4248 Good afternoon, gentlemen.
4249 Your presentation this afternoon was virtually
identical to the written brief that you had sent us earlier with one notable
exception and that was the deletion of the last paragraph of the written
presentation, which was a recommendation that -- your first
recommendation was to deny the acquisition of the premium and pay services, but
in the alternative you have suggested that Corus pay and specialty acquisitions
be approved only on condition that the current controlling shareholder be
required to reduce its holding to 29.9 per cent. I guess I am curious to know
why you deleted the alternative now, or is that still there?
4250 MR. MORRISON: Commissioner Colville, as I look
at you you are wearing a halo the way you are framed and, therefore, I will be
very respectful. We were trying unsuccessfully to stay within our 10 minutes and
if we said it we'll stand by it.
4251 COMMISSIONER COLVILLE: So that still is your
position as the alternative one.
4252 In that case, I am curious then to know given
the strength of your position about the concerns here why you would be satisfied
at 29.9 per cent?
4253 MR. MORRISON: Well, maybe we shouldn't be,
Commissioner. I have a lot of trust for the skills and capacity and judgment of
the Commission. I think what is most important here is the principles that we
are putting before you and the evidence, and I have noticed in other decisions
you kept people below 10 per cent. So, I must not put the last paragraph, which
we decided to ditch, as our top priority advice to you.
4254 COMMISSIONER COLVILLE: No. I raise the issue
because you have raised a concern here about incentive and opportunity for
preferential treatment. I guess I was curious when I read that if
you -- when I read your original brief and I got all the way to but
the last paragraphs I thought that's pretty clear, and then, as I say, I was
kind of curious wouldn't the incentive and opportunity still be there at that
4255 MR. MORRISON: Yes, maybe you are
4256 COMMISSIONER COLVILLE: Now, having read this
brief, I mean I understand your point about the principle of the issues here,
the points that the Commission raised in the Convergence Report and the other
statements that you referred to on previous decisions that you referred to. I
guess I am wondering how much of this is an issue of principle for you and how
much of it actually relates to the specific services that are involved in this
application because of the nature of the services?
4257 MR. MORRISON: The pay nature of the
4258 COMMISSIONER COLVILLE: The pay nature,
4259 MR. MORRISON: If there was a principle here I
guess when you are concerned with applicant A's benefits package, you are always
thinking about somebody else with a benefits package down the road. The
Commission operates on a precedent basis. Don't reward people who misbehave
would be the principle behind it.
4260 And with respect to the details, we think it's
an error to assume that digital capacity is unlimited and we can quickly
calculate circumstances where 10 moves of 100 minutes' duration, starting every
five minutes, occupy 200 channels and the 10 to 1 ratios that you have put forth
mean that licensing 10 or 20 -- all of a sudden digital would be like
a large hard disk filling up faster than you expected it to.
4261 So we don't accept the notion that, I will put
it more succinctly, we agree with the Specialty and Pay Television
4262 COMMISSIONER COLVILLE: In the brief, your
written submission and again today you said, I guess it's page 5 on today's, of
the three bullets the second one was:
"fails to note that the properties it seeks to acquire are currently
distributed in analog format, and therefore that analog capacity is the undue
preference matter at
4263 Now, in their written response and again in
their presentation yesterday, Shaw/Corus had indicated that the premium services
are carried on digital in virtually all cases now. Would that alter your view in
4264 MR. MORRISON: No.
4265 COMMISSIONER COLVILLE: Why
4266 MR. MORRISON: It's a question of degree. I was
trying to save you time by saying that the exchange between Vice-Chair Wylie and
Jane Logan, we would stand beside Jane Logan.
4267 COMMISSIONER COLVILLE: That's her view. You
spent a lot of time in your presentation relating back to us our view and our
view has historically been that we were fundamentally concerned about the
availability of analog capacity. Our position was established in the Convergence
Report around the concern over analog capacity. I guess you are saying you adopt
SPTV's view and you would extend that concern to digital
4268 MR. MORRISON: Yes. We do not accept the notion
that digital saves everything, but I don't wish with your time constraints to
try to repeat anything, but access is by no means the only issue in an undue
preference. We can see circumstances in the digital world where there will be
significant problems for undue preference beyond mere access.
4269 COMMISSIONER COLVILLE: Okay. Those are all of
4270 Thank you very much. Thank you,
4271 CHAIRPERSON OF THE COMMISSION: I have a
question. You haven't talked about radio. Do you have any views on the
4272 MR. DUKE: May I answer that question, Madam
Chair? I noted with some concern, despite repeated questioning by Commissioner
Colville yesterday to Corus, that there seemed to be no need from the applicant
to alter its application from the status quo.
4273 In fact, both applications that have come
before you here in Vancouver seem to accept the status quo as being okay and
that that status quo can continue on and on into the future.
4274 Commissioner Colville asked, well, don't you
see anything beyond kids and music, kids and music, kids and music and he asked
repeatedly and got nothing forthcoming.
4275 That concerned us greatly because the status
quo cannot continue in this region. We are here where these applicants both come
to this region and you are here and we are hearing these two corporations come
to a region where the Premier is an Indo-Canadian for the first time in Canada's
history, Ujjal Dosanjh. The Lieutenant-Governor, the previous one was a Chinese
Canadian, David Lam. The present Chancellor of Simon Fraser University is a
Chinese-Canadian. Thirty-one per cent of the Vancouver school districts speak a
Chinese language, Mandarin or Cantonese. Some 45 per cent of the Vancouver
school districts speak an Asian language. North and West Vancouver have the
second-largest Iranian community in North America. There is over a quarter of a
million Indo-Canadian citizens here and yet with all this evidence around them
they come here before you without a single bit of acknowledgment that the status
quo cannot continue, that Corus and CanWest, incidentally, have both come from a
kind of white broadcasting world and think that programming can continue on as
4276 I was astonished to see the lack of
responsiveness to the Commission's questioning yesterday, and that neither of
them have showed any acknowledgment in their applications that there are very
unique social, ethnic, cultural and linguistic changes going on in this
4277 So that I would just like to observe when it
comes to radio or television, but radio is what we are concerned about at this
intervention, that censorship, Madam Chairperson, is not from government today
but from corporations; and racism is not from government, but from corporations;
and lack of innovation is not ordained by you or by government, but is coming
from lack of innovation is coming from corporate use of the opportunities that
you were giving it and from corporate power. It's lack of innovation that is
evident in the lack of responsiveness to Commissioner Colville and I think in
both applications that we heard here today.
4278 This lack of innovation and following American
models that is really to my mind detracting from both
4279 MR. MORRISON: Ten seconds more only. We could
have spent energy on radio. We thought we were active in your policy development
on radio. We understand that Corus is pushing the limits and that your policy
entails a judgment call on any given transaction. I think that the issue has
been well aired here.
4280 Specifically, we would obviously endorse
MediaWatch's intervention, radio related, invite Corus to indicate that it will
clean up its predecessor's act, but our focus was on the 10 minutes or it turns
out 11 minutes that we put before you.
4281 MR. DUKE: Madam Chair, may I just thank you,
as we leave this table and you leave Vancouver this afternoon, may I thank you
for coming to British Columbia for this hearing which is very important. We know
that the Commission could have held these hearings elsewhere and we are
appreciative of you coming to Vancouver.
4282 We sit here as two spokespersons for Friends,
which represents 48,000 homes in Canada and a large percentage or per capita of
that membership is here in B.C. They certainly look to the Commission to
regulate more, not less, and to separate corporate interests from public
interest. We certainly get from our membership a very keen interest in your
proceedings and in your strengths and in your continued strength to know that
Canada in these not unbridled market forces, but affirmative action and seeing
that we can continue to know what kind of country we live in and see it
4283 We thank you for coming and thank you for your
4284 CHAIRPERSON OF THE COMMISSION: Thank you.
Thank you for your participation.
4285 MS VOGEL: Our next intervenor this afternoon
is Canadian Independent Record Production Association. Please come
4286 CHAIRPERSON OF THE COMMISSION: We missed you
4287 MR. CHATER: I apologize. Unfortunately, I
haven't yet learned how to be in two places at one time.
4288 CHAIRPERSON OF THE COMMISSION: But I think you
have more to say on this one.
4289 MR. CHATER: Yes. Let me say my presentation
would have been brilliant, witty and lucid, but you are not going to hear it, so
I can say that.
4290 CHAIRPERSON OF THE COMMISSION:
4291 MR. CHATER: Thank you.
INTERVENTION / INTERVENTION
4292 MR. CHATER: Good day, Madam Chair and
Commissioners. CIRPA is pleased to be here in Vancouver today to address policy
issues regarding the applications that are of concern both to CIRPA and, we
believe, a wider Canadian public. We thank the Commission for the opportunity to
discuss these issues publicly.
4293 As we have only 10 minutes, we will
concentrate on the issues of ownership concentration, musical diversity on radio
and cross-ownership issues.
4294 However, first, CIRPA would like to put on
record a fact that may seem self-evident, but seems too often ignored, to put it
politely, by some of the players involved. It is simple. Canadian radio and
television frequencies are owned by the Canadian people and are a valuable
resource both culturally and commercially.
4295 The CRTC is charged with the responsibility of
granting licences to applicants based on the best interests of the public. It is
worth remembering that these valuable commercial entities have made many
companies very rich based on a concept of restricted access to commercial
broadcasting licensees and marketing competition granted by government or, more
correctly, by the Commission.
4296 It is very clear that licensees have, in
general, benefited greatly from these policies, while it has been by definition
impossible for potential players to get into the game and compete as would occur
in an unregulated industry.
4297 While CIRPA would agree that the next decade
will see many changes, it is our view that the matters we have just elucidated
should be central to future policy and commercial discussions. To illustrate
this point, just compare the competitive situation for radio in the United
States and Canada in a very simple way -- the U.S., with a population
of about 250 million, has approximately 10,000 privately-owned radio stations
and Canada, with a population of 30 million, has approximately 500
4298 The U.S. per capita ratio is 25,000 per
station, while in Canada it is 60,000 per station. This is borne out when one
reviews the numbers of radio stations in markets of equivalent size in the U.S.
and Canada. Generally, there are about two U.S. stations to one Canadian station
in equivalent markets. One can argue the policies behind these numbers, but
CIRPA submits that these numbers are clearly a fact and should have great
bearing on any future policy discussions regarding ownership.
4299 CIRPA views this as a critical overarching
policy issue. We would now like to address specific issues relating to these
4300 First, the issue of musical diversity. CIRPA
is pleased to note the applicants' comments in this regard and, given the
commercial benefits involved, would expect to see a clear format diversity
continue. However, given the realities of competition in radio compared with the
U.S., CIRPA would expect a clear delineation being both maintained and defined
in any licence granted, particularly given the fact as stated by the applicant
as a clear and defined benefit and expanded upon at length in its
4301 CIRPA notes that even with the much greater
competition in the United States there is considerable evidence that
consolidation has not brought real musical diversity, but in many situations has
merely produced various sophisticated variants on what are essentially the same
musical formats appealing to major demographic targets.
4302 With regard to the applicant's comments on
competition with other media, CIRPA notes that the 1999 radio sales revenues,
not quoted by the applicant, are substantially better than 1998, both in total
market share of advertising for radio and in absolute dollars.
4303 Also, CIRPA was clearly under the impression
that a major point in the consolidation issue was that consolidation enabled
radio to better compete for national advertising dollars and that radio will not
exist on local advertising solely, as the applicant appears to
4304 In this regard it is common knowledge that
this was a key factor in the sale of KISS-FM Toronto by Rawlinson to Rogers and
the desire of Rawlinson to maximize value prior to substantial changes in the
4305 With regard to concentration of ownership in
radio, and particularly in southern Ontario, there is clearly a case to be made
that in the Toronto area Corus is already at the limit of four, with three
licensed Toronto stations and a de facto Toronto station in
4306 With the addition of stations in Hamilton and
a station in Oshawa that are signals of excellent quality in the Toronto
marketplace, CIRPA is of the view that this concentration exceeds the guidelines
set by the CRTC in its Review of Radio policy statement in 1999.
4307 CIRPA feels that this particular point needs a
very careful review, particularly given the overall numerical concentration that
will be granted to Corus in Ontario should all of these applications be
4308 The second issue CIRPA would like to address
is that of access. In its response to our and other interventions, Corus
addressed this issue but, with respect, we do not feel that they answered our
concerns. The matter of cross-ownership of content and carriage is a major issue
and one that the Commission will recall was raised by CIRPA through most of the
4309 As a recent article about Rogers and TVA
remarked, those that have control of the pipe have a big say about the content.
This article was written in the context of TV5 and TVA signals on Ottawa cable,
but we submit it has general relevance.
4310 In particular in this regard, we would draw
the Commission's attention to pages 2729 and 2730 of the 1995 Pay Audio
hearings. Commissioner Wylie asked questions regarding access to delivery
systems and at page 2730 she asks:
"What is your view about whether these concerns should extent to Audio
services, as well; that is, ownership of programming undertakings for delivery
4311 And Mr. Stein responds:
"In terms of looking at the Access issue to other licensed
services -- recognizing the fact that the Commission may well licence
more than one -- in terms of the concerned raised by the CRTC in the
Convergence Report filed with the Government, we decided that it would only be
appropriate that we provide access to all of the services on Shaw Cable
We would provide access to all services that are designed for
4312 Personally, I find this interesting for, as a
subscriber to Shaw digital, while DMX was added to the system, and I stand to be
corrected here if I am wrong, but I think I am not, at no time has there been
any indication to me as a subscriber that Galaxie would be added or, to my
knowledge, have I ever been asked as a subscriber if I would care to have access
4313 The third and final issue that CIRPA wishes to
raise is that of foreign ownership. While the purchase by Liberty is within the
current guidelines, given the current milieu regarding ownership issues, the
fact remains that this is not just any shareholder, but Liberty which is in turn
owned by AT&T.
4314 While there is always the issue of voting
share and ordinary share with regard to the control issue, CIRPA wishes to
reiterate its point that 19.9 per cent is owned by Liberty and, while a minority
shareholder, as everyone is aware, a minority interest of 20 per cent gives the
shareholder a major say. It is totally different from a widely dispersed 20 per
cent minority ownership and, indeed, Mr. Cassaday is quoted in the press as
saying that the decision to involve Liberty was a conscious one.
4315 We note that the applicant states that having
Liberty as an important shareholder will give better potential access for
Canadian material in the U.S. markets. CIRPA submits the reality is that in the
end Liberty will act in its best business interests and, in fact, must act in
response to its shareholders' best interests, a point which the applicant has
itself made regarding the policies of Corus and Shaw and the responsibility of
the directors to the shareholders.
4316 This concludes our comments. We thank you for
your time and look forward to your questions.
4317 CHAIRPERSON OF THE COMMISSION: Thank
4318 I am particularly interested in the matters
concerning diversity and to understand your position in terms of how we can in
either approach, whether you agree with more consolidation or you
don't -- you know, there was a journalist at lunch today who was
asking me how would the Commission choose between some who say that competition
brings diversity and others who consolidation brings diversity, especially in
the world in radio where we say that format is part of the business plan, but is
not regulated any more?
4319 MR. CHATER: Absolutely.
4320 CHAIRPERSON OF THE COMMISSION: So what are you
views and what are the best ways to encourage, and what have you noticed out
there in the marketplace from the point of view of the music industry where
there is more possibility for diversity because that very notion that everybody
goes into the MOR type of genre has its limits at one point I
4321 MR. CHATER: I agree, but equally obviously,
rightly or wrongly, I think and again my friends in radio will tell me I am not
quite correct, that the major demographic targets are still 25 to 54 for most
advertisers. Therefore, your major markets now include every major city across
the country. The key to that is, generally, how do we attract that audience? One
attracts it by playing specific types of music, not all the same, but genres
which all appeal to that particular age group, male, female, combinations of
both. It's unlikely that there will be much -- you won't hear much
Limp Biscuit on those stations, for example, which is from the point of view of
radio -- I mean again, CIRPA has said it before and will say it again,
we are not in the radio programming business. However, there are bigger issues
here which you can elucidate at the start about the whole issue of licensing and
licensees and the availability of licences.
4322 If you ask me in a simplistic way what I think
would be the best answer -- more competition. The reality is we know
that that's not the Canadian way at the moment. Maybe in the digital world when
digital comes, there could be wide open competition. But digital, if it comes,
the frequencies are not restricted. The only problems, as I understand it, with
frequencies is you could have hundreds in any given city or 10 or 1,000,
whatever. It's entirely an issue of can those licensees or can anybody in
business remain commercially viable.
4323 I mean, given in today's world it is
relatively tough and as you have done over the years you have removed the size
of the licences because you have to play this type of music or that type of
music or whatever. Once you do that, I mean you don't have, in my view, a great
option in how to get tremendous -- keep or maintain tremendous
4324 Obviously one of the arguments for
consolidation and you can argue this both ways, competition/consolidation, is
that by nature it would be dumb if you owned four stations to play the same
thing. You are obviously going to try and program across the board to pick up
the most audience you can get to sell the most, the best advertising to groups.
This is obviously a basic principle.
4325 That being said, say you have four, the four
formats you choose might not be radically different. They might be, as I said,
variations on a theme to get that bigger audience.
4326 CHAIRPERSON OF THE COMMISSION: But you don't
think that with consolidation and if you have the possibility of more windows
and the possibility of cross-promotion that it doesn't improve the capacity of
the market to sustain more formats, different choices --
4327 MR. CHATER: As we said at the radio hearings
two or three years ago, we have, and seriously because we are not joking, no
position on consolidation. We don't think it is bad or good. We want to see the
results and we have no particular concerns with the results so
4328 The point of it, I guess, if you go down this
road almost indefinitely, I mean again my friends at radio tell me that we have
seen obviously quite a bit of consolidation already. They feel, and it is their
feelings not mine, that there will be considerably more in the next two or three
years and again, I mean if you ask me or CIRPA do we have a tremendous problem
with that, as a business situation, no, we don't.
4329 It's like, obviously, let's be blunt, we are
self-interested to ensure that the most diverse music is played on as many
stations as possible.
4330 To our membership, which ranges from classical
to rap and everything in between, obviously to have everybody playing adult
contemporary is going to be limited to a very small segment of our membership.
Therefore, for representing our membership we obviously like
4331 Equally obviously, you have to sell to
advertisers. You can't sell them something they don't want to buy. I think I
would come back to your question, and the answer is if it's not sellable in the
short term is more competition. That's not a feasible option in the Canadian
situation given the allocation of frequencies and the government and the
4332 Therefore, as you have removed the absolute
say you must play this, therefore, it becomes a question I guess of, how shall I
put it, dual boning, of talking to people and making sure that
things -- hey guys, let's not make it all too much the same. I mean,
obviously, a radio person would say we are not going to because we are not going
to be able to compete by selling the same thing to the same advertiser. There is
no way, you have to change it, but what still happens clearly in markets across
the country is there are several -- again, talking self-interest from
our point of view, which get very little airplay and will continue to get very
little airplay because they are not demographics which by definition advertisers
are particularly chasing at this time.
4333 Does that answer your question or shall I stop
4334 CHAIRPERSON OF THE COMMISSION: Well, it does,
yes. For the applicant to kind of reply, I am not here to kind of counterargue
at this point in time.
4335 MR. CHATER: I could give you a different
answer if you like.
4336 CHAIRPERSON OF THE COMMISSION:
4337 I am turning to my colleagues who were
questioning on the radio matters and if they have anything to
4338 COMMISSIONER PENNEFATHER: Just one
4339 MR. CHATER: I am sorry if I am squinting, but
you are not in the halo. You have just become God I think.
4340 CHAIRPERSON OF THE COMMISSION: How do you
4341 COMMISSIONER PENNEFATHER: Well, I think I can
arise to that occasion.
4342 You mention on page 3 of your oral
presentation the concentration exceeds the guidelines set out in the radio
policy. Specifically, what guidelines are you referring to?
4343 MR. CHATER: In this context we feel in major
markets to FM and to AM. Our pleading is in this area that it is de facto in
many instances one market.
4344 COMMISSIONER PENNEFATHER: I just want to
clarify that because you were indicating that at some point you get to that
point, but the concentration then becomes a concern. The radio policy discusses
at length how we would review consolidation versus concentration. I am
interested in you clarifying that word. Thank you.
4345 CHAIRPERSON OF THE COMMISSION: Thank you very
much, Mr. Chater.
4346 MR. CHATER: Thank you.
4347 MS VOGEL: Our next intervenor this afternoon
is CHUM Limited.
4348 CHAIRPERSON OF THE COMMISSION: Good
INTERVENTION / INTERVENTION
4349 MR. MILLER: Thank you, Madam
4350 For the record, my name is Peter Miller and I
am Vice-President, Regulatory and Business Affairs, of CHUM Television. With me
is Jay Switzer, Senior Vice-President, Programming and General Manager of
4351 Members of the panel, we appreciate this
opportunity to provide some very brief context to our written intervention and
answer any specific questions you may have.
4352 We at CHUM were very pleased with Shaw's
initiative to develop its voluntary access code and the attempt to proactively
define what constitutes undue preference outside of the heat of a specific
dispute. We believe that this kind of initiative is as important now as ever. We
also believe that the key underlying elements of such a code will be as relevant
in the digital and transitional worlds as they are in the analog world. That's
why we put some energy into suggesting improvements.
4353 All of that being said, we agree with Corus
that the current transactions do not raise new access concerns. Moreover, we are
very pleased to confirm that unlike what some other MSOs, CHUM has concluded
agreements with Shaw for the distribution of our orphan specialty services, Star
4354 This and the undertakings made by Corus and
Shaw in this proceeding give us considerable comfort. Thus, should the
Commission prefer to defer further refinement of the Shaw access code, that
would certainly be acceptable to us.
4355 However, as regards application to the digital
environment in particular, we would recommend that Shaw be asked to finalize its
code prior to the start of that proceeding.
4356 We would be pleased to answer any questions
you might have.
4357 CHAIRPERSON OF THE COMMISSION: Thank
4358 Vice-Chair Colville will have some
4359 COMMISSIONER COLVILLE: Thank you very
4360 I guess and in light of what you heard
yesterday and perhaps discussions that you have had with Shaw and thinking about
the issue then, I take it with respect to these applications it's your view that
their comments and commitments, absent the code, would not be a problem, and
that the code might be something that one, perhaps as SPTV had suggested, that
if one were to develop a code perhaps it should be developed in the context of
the more open public process to deal with some of the issues that you raised in
4361 MR. MILLER: I think we look at it somewhat
differently. We understand that the code is a commitment that has been made and
does stand. I think there are some clauses that are more relevant now than they
were before, but our understanding is the code still stands.
4362 As to improvements or changes, as we have
suggested I think we are suggesting that that could be deferred.
4363 COMMISSIONER COLVILLE: This issue about
the -- you and others have raised this issue about our policy with
respect to BDUs and I guess I raised the issue with Mr. Morrison and I think
Commissioner Wylie did with SPTV. I would like to get a sense from you about
understanding the distinction between the policy principle here and the specific
applications that we are dealing with, recognizing that a number of them are the
premium pay specialty, pay services that, as Shaw has indicated are largely on
digital now and a half interest in the Family Channel, and whether for you when
you take the policy and apply it against the specific applications whether the
concern is still as significant as it might be if they were a different group of
channels, specialty channels that might be involved here with a different
4364 MR. MILLER: I think the context is everything
and the applications at issue are the ones that one has to consider, not some
4365 As Corus pointed out, the interest in the
specialty services are minority interests that they are acquiring. That's a
different issue than having majority control.
4366 In regard to the pay services, we noticed that
that was one of the elements that was addressed in the Shaw access code, that in
an analog environment they would not expand the channels occupied by such pay
services, deny other channels. You could appreciate that for us that's a
4367 We had digital carriage for Star, given
capacity constraints, so we wouldn't want to see analog pay channels occupy more
space if they happen to be affiliated with a BDU.
4368 So I think the circumstances change with the
environment. I think we are in this transition where Shaw has made the
commitment to swap out its analog boxes and that once all of that is complete
it's a different set of issues.
4369 But what we have tried to indicate is that in
the digital world these issues don't go away; they just become different. So we
think this has to be dealt with any way in the context of the next specialty
hearing. So we felt ultimately it could be dealt with then.
4370 MR. SWITZER: Commissioner Colville, if I might
just add a note, you talked about -- your question in part discussed
matters of digital and Peter has just talked about digital. There are issues in
the code that are still very, very important to us.
4371 Having said that our relationship with Shaw is
extraordinarily positive and we have solved our problems and we have had comfort
from Mr. Cassaday and others that they won't either request or be party to
preference, there still is the conflict of a related party and in all kinds of
matters dealing with things beyond just access, including things such as
migration of channels and how we are going to discuss with Shaw the cable
company in the next few months, in the next few years, policies and details
about possible migration of our channels, when we hear that, for example, music
is a priority of Corus and music is a priority of CHUM, there is obviously aside
from the excellent relationship concerns about undue preference in matters of
migrating channels where we may be asked or encouraged quite firmly to migrate
some of our channels, while at the same time there may be related Corus channels
that may not be facing the same pressures.
4372 Those are the kinds of issues that touch on
questions we have to deal with as part of the new digital
4373 COMMISSIONER COLVILLE: I take your point, but
did I misunderstand you when I understood that you were suggesting those issues
should probably be dealt with in the context of a digital
4374 MR. SWITZER: Yes. My point is that your
question was absent the code I am trying to reinforce that the code remains
important to us.
4375 COMMISSIONER COLVILLE: Okay.
4376 I think those are my
4377 CHAIRPERSON OF THE COMMISSION: Other
4378 Thank you, gentlemen.
4379 MS VOGEL: Our next intervenor this afternoon
is Bell ExpressVu. Would you come forward please.
4380 CHAIRPERSON OF THE COMMISSION: Good
4381 MR. FRANK: Good afternoon, Madam Chairperson
4382 My name is Chris Frank, and I am
Vice-President, Government Relations and Corporate Development for Bell
ExpressVu. Joining me today is David Elder, Regulatory Counsel for Bell
ExpressVu. We appreciate the opportunity to appear at this important and timely
4383 We would like to reiterate at the outset that
we support those aspects of these applications dealing with the transfer of
ownership of WIC's radio, video on demand and DTH pay-per-view licences to
Corus, since these services operate in a competitive milieu.
4384 As to the other services which operate in
national or regional monopoly genres, the company offers qualified support for
Corus' acquisition of those pay-TV services controlled by WIC; that is Super
4385 Bell ExpressVu submits that these transactions
should be approved, provided that competition is initiated in the Canadian pay
television market, or failing that, that adequate safeguards are established to
protected non-dominant distributors from potentially anti-competitive
4386 It is the pay-TV transaction that are the
focus of Bell ExpressVu's intervention. Bell ExpressVu is particularly concerned
about these transactions for the following reasons:
4387 First, movie-based services are an essential
component in Bell ExpressVu's programming line-up; a point that was made by
Corus in respect of digital delivery platforms. They are, in fact, a key
"driver" of new subscriptions. Indeed, more than 70 per cent of Bell ExpressVu's
subscribers purchase pay-TV. There is every reason to believe that cable will
experience the same pay-TV penetration when they fulfil their commitment to
deploy digital boxes across a significant percentage of their customer
4388 Second, Bell ExpressVu is concerned that, if
the pay-TV transactions are approved without modification, Corus would be
potentially positioned to extend to Shaw undue preferential treatment with
respect to the terms and conditions for the distribution of Corus' pay-TV
4389 By virtue of its cable distribution
undertakings and its control of the Star Choice DTH and SRDU services, subject
to prior CRTC approval, Shaw's position as the dominant distribution company in
western Canada is unquestioned. Indeed, this position has recently been cemented
further through a proposed swap of cable systems with Rogers. Corus, a Shaw
affiliate, now proposes to acquire important services and the supply of which
can affect the competitive position of Shaw's BDU rivals, including Bell
4390 Despite the strong growth in subscribership
experienced by Canada's two DTH suppliers, the distribution marketplace is still
overwhelmingly dominated by the incumbent cable operators. Indeed, there is not
yet sufficient competition in the broadcast distribution market to support the
deregulation of any traditional cable company in any area of the country. As the
Commission is aware, such deregulation requires a market share loss of only 5
per cent -- yet new entrants have yet to reach even this modest
threshold in any licensed cable serving area.
4391 Bell ExpressVu notes that, in its reply to
Bell ExpressVu's intervention, Corus has indicated that it would accept an
"undue preference" condition of licence as a condition of approval,
acknowledging the intention of the Commission to amend the Specialty and Pay TV
4392 Corus has undertaken to provide its pay
service to Bell ExpressVU on "similar" terms to those afforded to Star Choice.
While these undertakings appear laudable and do offer a welcome and constructive
start, Bell ExpressVu continues to have concerns. The undue preference
prohibitions that exist in the Broadcast Distribution Regulations and that are
proposed in the Pay Television and Specialty Service Regulations are extremely
useful competitive safeguards in many situations; however, Bell ExpressVu would
submit that these are not the most effective safeguards in all
4393 In this regard, Bell ExpressVu notes that we
are not just speaking here of some partial ownership interest that might give
rise to an instance of undue preference; rather, we are looking at a situation
where approval of these pay transactions as proposed would give Corus control of
our most popular and powerful programming service in respect to western Canada.
Bell ExpressVu submits that these are special circumstances; accordingly,
special safeguards are required.
4394 Bell ExpressVu would note that both an undue
preference COL and an undertaking to provide "similar" terms, as promised by
Corus in its reply to interventions, while constructive in tone and spirit are
necessarily open to differing interpretations, which may only ultimately be
resolved by the Commission.
4395 Bell ExpressVu notes that, despite the
Commission's best efforts against an increasingly challenging workload, such
disputes may take time to resolve. Time is at a premium in a competitive market.
In addition, Bell ExpressVu notes that there are significant evidentiary
problems in establishing a case of undue preference, since Bell ExpressVu would
not have ready access to the terms of Superchannel's agreements with Star
Choice, or even Shaw cable.
4396 Bell ExpressVu submits that its concerns of
undue preference by a vertically-integrated provider of both a single source
programming service and a dominant broadcasting distribution operator would be
more immediately and effectively assuaged by the existence of competition in
this existing programming sector. That is, and with Corus' useful offer, the
combination of competition and undue preference protection would, in our
opinion, quite adequately balance any "anti-competitive"
4397 Bell ExpressVu has consistently advocated
increased competition in programming genres that can sustain such competition.
With competition, access concerns by distributors are diminished because of the
existence of alternative suppliers and the discipline imposed by the competitive
market. Service providers are motivated both to improve their product by
acquiring new and quality programming, a significant percentage of which is
Canadian, and to attempt --
--- Technical difficulties / Problèmes techniques
4398 CHAIRPERSON OF THE COMMISSION: You have a real
4399 MR. FRANK: It's undue
4400 ...and to attempt to win the business of
subscribers and distributors through attractive pricing and other commercial
4401 The benefits of competition in the pay-TV
sector would be significant for the subscribing public, program producers and
other BDUs. The public will reap the benefits of competition which could include
price -- which would include, excuse me, price and product
competition; that is, new entrants will strive to offer a better product a
competitive prices, giving the public more choice and variety.
4402 Program producers will have a new or expanded
reach to which to market. This, together with the additional funding that will
result should give rise to more Canadian film and program production.
Pay-television will not be a zero sum game, so the program expenditure regime
currently in place will channel new funding as well as new exhibition
opportunities in a competitive structure.
4403 BDUs will have more premium programming to
sell which will increase both the incentive to supply and the demand for digital
4404 And the broadcast system as a whole benefits
as more channel capacity -- derived from digital adoption or
conversion -- becomes available from the expedited rollout of digital
4405 Therefore, and in recognition of the
significant cost of distributing a regional pay-TV service via national
satellite transponders, Bell ExpressVu believes that its concerns would be more
efficiently and effectively addressed if the two current regional pay-TV
monopolies were to operate on a national, as opposed to a regional, basis, and
in full competition with each other and other new entrants which might be
licensed by the CRTC. This would result in a more efficient and effective use of
expensive and relatively scarce satellite resources as well, of course, as more
choice and variety for pay-TV subscribers.
4406 Bell ExpressVu also notes that in Corus' reply
to our intervention, is non-committal to the possibility of competition in the
pay-TV genre. For its part, Bell ExpressVu notes the Commission's public policy
of fostering competition in other sectors of the communication industry. While a
reliance on a regional structure for pay-TV services might have been an
appropriate mechanism to ensure the survival of such programming undertakings in
the early days, recent growth and development and the move to digital
distribution has changed the sectors performance and potential.
4407 First, these are now healthy services whose
subscriberships have already increased markedly due to the growth of DTH
undertakings and will increase dramatically as broadcasting distribution
undergoes its digital evolution. Competition appears readily supportable. The
pie is indeed growing. Bell ExpressVu notes in this regard that, in their most
recent financial statements filed with the Commission, Super Channel showed a
jump in revenue for 1999 of some 25 per cent over the previous broadcast year,
despite a slight decrease in revenue from non-DTH distributors. MovieMax posted
an even more impressive jump of 30 per cent revenue growth over the same period.
The eastern Pay-TV service posted similar results; nearly 20 per cent revenue
growth for The Movie Network and over 27 per cent for MoviePix.
4408 MS VOGEL: I am sorry to interrupt, but we are
past the 10 minutes. Could you wrap up? Thanks.
4409 MR. FRANK: Alternatively, if a directly
competitive pay-TV model is not ultimately favoured by the Commission, then Bell
ExpressVu urges it to consider, at a minimum, additional
4410 Corus would be required, by an undue
preference condition of licence or regulation, to provide its pay-TV services on
substantially similar terms and conditions to all Class 1, DTH and MDS BDUs.
Ongoing disputes concerning the application of such an undue preference
prohibition could be greatly expedited if Corus was required to file with the
Commission copies of all of its affiliation agreements for pay-TV, thus
minimizing a significant evidentiary hurdle to the effectiveness of this
4411 In addition, in order to avoid any possible
misunderstanding as to the application of the undue preference prohibition, Bell
ExpressVu submits that there should be an explicit requirement from the
Commission that the Super Channel and MovieMax services be provided to Bell
ExpressVu on the same terms and conditions as afforded to Corus' DTH affiliate,
Star Choice, assuming similar levels of subscribership.
4412 On the premise that the Commission has already
concluded that it is in the public interest to have competition in the SRDU
sector and, by logical extension, in this HITS business, Corus should also be
required to allow the HITS distribution of all of its pay-TV and specialty
services by all satellite competitors, on the same terms and
4413 Those are my comments. I am sorry to run past
the 10 minutes.
4414 CHAIRPERSON OF THE COMMISSION: No. That's all
right and we apologize for the disturbance of the noise, but we had nothing to
do and neither had Corus.
4415 I would ask Vice-Chair Colville to ask the
4416 COMMISSIONER COLVILLE: Thank
4417 I must say I am having trouble understanding
ExpressVu's position here with respect to the first part, the issue of the
supposed or apparent or potential preferential treatment of the Super Channel
service within Corus/Shaw relative to ExpressVu. I don't understand what the
nature of the problem is.
4418 MR. FRANK: The potential nature of the problem
is that they would be owned by a direct competitor of ours and there is a
potential that that ownership could lead to unfavourable terms and conditions
for us and render us -- or lessen our competitive position by making
either the terms of carriage or the cost of carriage less attractive than Star
Choice or cable.
4419 COMMISSIONER COLVILLE: So your concern is not
how they might carry or offer the service on Shaw Cablesystems. Your concern is
the price in terms that they would the service to you?
4420 MR. FRANK: That's correct, provided that in
the carriage by Shaw Cable we were able to have the same degree of flexibility.
For instance, if they were offering -- potentially, if they were
offering 10 pay-TV channels to cable and only four or five or six to us, but,
generally speaking, the carriage of pay-tv by cable is not of concern to us,
4421 COMMISSIONER COLVILLE: Do you have a concern
with the existing framework that's in place in terms of the Commission's
approach to dealing with preferential treatment? I know you have said there are
problems here perhaps in terms of timing, but it's your view
that -- it is your view that they should not be allowed to own it
absent a competitive marketplace?
4422 MR. FRANK: That's our preferred -- that's
our preferred fix. Absent open competition in pay TV, we have proposed some
safeguards which we think should be adopted.
4423 COMMISSIONER COLVILLE: I guess you would
appreciate that it's not for this Panel and this proceeding to deal with the
issue of competition in the pay television market in Canada, that there is an
existing policy framework --
4424 MR. FRANK: Yes --
4425 COMMISSIONER COLVILLE: -- for
4426 MR. FRANK: -- I appreciate that point.
What we're trying to do here is encourage competition, national competition, in
pay television so that we can grow our business and other BDUs can grow their
business. We think the revenue opportunities offered by multiple pay services
will increase revenue per subscribe which, in turn, encourages shareholders to
finance the subsidy of those expensive set-top boxes that Mr. Stursberg was
speaking of yesterday.
4427 We also see significant benefits for program
producers and for, obviously, for subscribers and customers.
4428 COMMISSIONER COLVILLE: You understand that the
primary content for the movie services is largely U.S. American
4429 MR. FRANK: Yes, I do.
4430 COMMISSIONER COLVILLE: Were you here yesterday
when the CHUM made their presentation relative to the Global acquisition to hear
Mr. Znaimer's comments about the issues regarding acquisition of foreign
4431 MR. FRANK: Yes, I was.
4432 COMMISSIONER COLVILLE: What would your comment
be, then, considering his position there if we had competition, more competition
for acquiring that U.S. product on a national basis in Canada?
4433 MR. FRANK: That there would be -- are you
suggesting that there would be too many potential suppliers chasing too few
movies thereby bidding up the price?
4434 COMMISSIONER COLVILLE: I'm asking what your
opinion is of his comments --
4435 MR. FRANK: I'm just trying to make sure I
fully understand the question.
4436 I think that there is an opportunity for a
competitive pay TV industry because there is, I think, an adequate supply of
movies. When we look south of the border, there are a number of pay TV -- a
number of pay TV companies, and they seem to be operating quite successfully and
the benefits to both the subscriber and the distributors is quite
4437 COMMISSIONER COLVILLE: I guess I'm asking, in
light of Mr. Znaimer's comments yesterday, is it obvious, or is the likely
outcome that both movie services may end up paying more for access to that
4438 MR. FRANK: Well, I guess that would depend on
the number of competitors that were in the marketplace and what the eventual
structure was. We make the point, in our intervention, that we believe that it
would be an effective approach to move the two regional pay companies, as
quickly as possible, to national competition and if, in the future, or if at the
same time, the Commission considered it wise to license others directly, then so
4439 COMMISSIONER COLVILLE: Okay. Thank you,
gentlemen. Those are all my questions.
4440 CHAIRPERSON OF THE CHAIRMAN: Vice-Chair
4441 COMMISSIONER WYLIE: I have difficulty
understanding this, as well.
4442 On page 5, when you talk about competitive,
you mean your preference would be that there would be a competitive pay TV as an
analog service, not in the -- under the policy that is going to govern the
applications we'll hear later on this summer?
4443 MR. FRANK: Well, I think there's a natural
migration of pay TV to digital. We had not envisaged this -- we did not
envisage this as an analog situation. We understand that there is a shortage of
analog capacity and having two national pay TV companies, presumably, with
access requirements that would complicate the already chocked analog
4444 COMMISSIONER WYLIE: So, were you envisaging
the transition or the migration, as we have been discussing, to digital. Would
your proposal not be contrary to the policy we have just issued about digital?
My understanding was that the Commission was not going to license competitive
4445 MR. FRANK: Well, the full extent of our
recommendation is, yes, to open up the marketplace. But if that's not in the
cards, at least to allow or encourage the existing two companies to go
head-to-head on a national basis.
4446 COMMISSIONER WYLIE: But that is your
understanding, as well, that the applications that we said we would be prepared
to hear would have to be not directly competitive with a general interest,
pay-per-view, but a specialized movie channel, so it would require some unknown,
fully aware of all the pay channels we may have here but a general interest one
competitive with the existing one I don't think was what was
4447 MR. FRANK: That is our understanding, too. And
I guess to get back to Commissioner Colville's question, one might wonder how
this would be done and, obviously, there would have to be a public process, (a)
to take the temperature to see if there are other folks out there who felt the
same way we did who think it is in the public interest to have competition in
pay and if the response to that was, yes, then there would be a process, I
presume, to allow the existing licensees to amend their licence and if you
allowed other direct competitors, to consider them as well.
4448 We realize this isn't going to happen
overnight but --
4449 COMMISSIONER WYLIE: No. And what you may well
find is that there will be arguments that even the applications that may have
been -- movie applications, movie services applications that have been
filed will argue that they are not competitive and probably we'll see the
incumbents argue that they are, so you'll have another chance to make your point
during that hearing, because of the nature of the beast.
4450 Thank you.
4451 CHAIRPERSON OF THE COMMISSION: Thank you very
4452 MR. FRANK: Thank you.
4453 CHAIRPERSON OF THE COMMISSION: We will take 10
--- Recess at 1545 / Suspension à 1545
--- Upon resuming at 1604 / Reprise à 1604
4454 THE SECRETARY: Our next intervenor this
afternoon is Forefront Entertainment Group.
4455 Would you come forward please.
INTERVENTION / INTERVENTION
4456 MS CYNAMON: Good afternoon, Madam Chair and
Members of the Commission.
4457 Thank you for the opportunity to speak to you
on behalf of the Corus application.
4458 There has been discussion, over the course of
the hearing, about the importance of creating growth curves for the broadcasting
community. Also, I have heard the need for reorganizing -- I'm sorry. I
have heard the need for recognizing and supporting the risks and the value of
4459 As the chair and founding partner of Forefront
Entertainment, a B.C.-based company that specializes in creating and delivering
quality family programming to international audiences, I will speak to some
visible benefits for our community.
4460 I would like to base my following comments on
what I perceive is Corus' forward-thinking proposals, a valuable package of new
opportunities for the Canadian producer, the content provider.
4461 Historically, Corus' family TV networks have
been -- the growth of Canadian family content. Many independent companies,
like Forefront, have been able to showcase our product to the world because
Corus has supplied us with critically needed funding.
4462 In our case, YTV and the Shaw fund have
creatively embraced and generously financed three of our family calling card
series. Because of this vitally needed instrumental support of our
internationally award winning shows, the "Adventures of Shirley Holmes",
"Madison" and "Magician's House", we have produced and distributed over 60 hours
of family programs over 100 countries.
4463 In addition, Superchannel has been extremely
supportive of the development and pre-license side of new family
4464 I'm inspired and encouraged by Corus' 12.5
million TV and film-related package of goodies. Their refreshing strategic
vision aligns with the realities of the marketplace and the need for
high-quality, 21st Century storytelling. Specifically, I would like to point out
that Corus' proposed family film project could not be better timed or thought
out. The market is hungry for family quality features. Most of us who are
parents of young children ask ourselves constantly, where do we go when our
children begs, "Take us to the movies"?
4465 And on the industry side of things, Corus has
definitely shown an understanding of the need to support the marketing of family
programming. Cross-promotion of family films is the key to continuous growth of
the film and distribution industry. Forefront's own theatrical releasing
division has domestically released two family features across Canada last year.
There is an exponential value to the exposure of trailers on TV national
4466 In addition, the marketing goals of the export
initiative and the Corus -- programs are creative support mechanisms to get
Canadian product out there in the marketplace.
4467 Forefront is also encouraged by the teen drama
projects that would create an opportunity for Canadian producers to launch
high-quality Canadian teen drama series with international appeal. The success
of our own teen series, "Madison", opened many international doors for
4468 I would like to say that Corus' acquired
broadcast holdings do not pose a threat to our chances for producing more
product. This umbrella group offers producers a unique, synergistic opportunity.
YTV, Teletoons, Superchannel and Family Channel are all distinctly managed
broadcasting teams that have clear visions of their programming needs. We can
truly benefit by their combined expertise and, where applicable, increased
financial support through cross-platform licence fees and cross-promotional
4469 In conclusion, we at Forefront congratulate
Corus' astute awareness of the market demand and economic benefits would result
in the production of more Canadian television and film family programming and
applaud their insight for recognizing that Canadians have the talent base to
deliver critically acclaimed product to international audiences.
4470 Thank you for your time.
4471 CHAIRPERSON OF THE COMMISSION: Thank you very
4472 I would ask Commissioner Grauer to ask
4473 COMMISSIONER GRAUER: Thank you, Madam
4474 I think your support is very clear and I don't
have any questions of clarification.
4475 What projects have you got under way right
4476 MS CYNAMON: Right now we're supported by
Superchannel in the "Magician's House" season two, also in development for a
family feature called "A Little Bit of Heaven", and -- I'm just trying to
think. Teletoon has an interest in certain projects, as well.
4477 COMMISSIONER GRAUER: So you are doing a lot of
business internationally, though, with a lot of your products, are
4478 MS CYNAMON: Yes. The "Magician's House" is an
international co-production with the BBC.
4479 COMMISSIONER GRAUER: Great. Okay. So, I
actually don't have any questions.
4480 MS CYNAMON: What?
4481 COMMISSIONER GRAUER: I don't have any
questions for you.
4482 MS CYNAMON: Okay.
4483 COMMISSIONER GRAUER: Thanks very much. Thanks
4484 CHAIRPERSON OF THE COMMISSION: Thank you very
much for participating.
4485 MS CYNAMON: Thank you.
4486 THE SECRETARY: Our next intervenor is Great
North Communications Ltd.
4487 CHAIRPERSON OF THE COMMISSION: Good
INTERVENTION / INTERVENTION
4488 MR. THOMSON: Good afternoon, Madame la
Présidente Commissioners. It's a pleasure, once again, to be here before you,
although I feel a little lonely without my panel that I was joined by this
--- Laughter / Rires
4489 MR. THOMSON: It's a nice chance to meet people
that I have never met before, but it worked out quite well.
4490 We are very pleased to be here to present our
views on the matter currently before you: the acquisition of Western
International Communications' radio stations and certain of its premium
television assets by Corus Entertainment.
4491 Great North is primarily a producer and
distributor of factual programs. We never work in radio and we rarely deal with
premium television. However, we are here to support this application primarily
because we believe that it is necessary to resolve the uncertainty that has
surrounded the ownership of the services licensed to WIC for the last several
4492 The television properties or licences involved
will only be able to thrive and make positive contributions to the system if
they can count on staBle management. This application, and the application put
forward by CanWest Global, regarding WIC's broadcast assets, will, if approved
by the CRTC, certainly accomplish this.
4493 I am also here to support this application
because it has attached to it a comprehensive package of benefits that will have
a real impact on the Canadian broadcasting system, particularly by supporting
the production of long-form family drama and feature films, drama for teenagers,
as well as a number of initiatives that support the development of the
broadcasting and production industries.
4494 We especially support Corus' decision to offer
these benefits on a national basis where they can be utilized most effectively.
While regional or province-specific funds can be helpful in developing regional
production, it is also important that there exist national funds that can be
accessed by producers from all across Canada for certain unique projects,
usually distinctively Canadian, that simply couldn't otherwise be financed.
Offering these benefits on a national basis will also help relieve the strain on
the greatly over-subscribed Canadian Television Fund. I am pleased to see that
Corus has resisted pressure from regional and provincial interest groups to
create envelopes for these new funding initiatives.
4495 As Canada's leaDing producer of documentary
programming, Great North is very pleased to see included in the benefits package
a commitment to create a 40-episode television documentary series exploring the
state of Canadian children at the beginning of this new
4496 We are also pleased to see included in the
Corus benefits package a $500,000 export initiative program designed to help
Canadian producers gain access to the international broadcast
4497 Oversubscription of the Canadian Television
Fund increases every year despite the best efforts of the CTF management to make
access to the fund increasingly selection. This situation will only get worse
when the Commission licenses new digital channels later this year with
significant Canadian content requirements. The CTF will, unfortunately, play a
diminishing role in the financing of Canadian production and Canadian producers
will have little choice but to look at foreign pre-sales as a primary source of
production financing. Breaking into that market is a terrifying and intimidating
process, especially for small- and medium-sized regional producers -- those
for whom this fund has been designed.
4498 I would like to illustrate that with an
anecdote from our experience. I remember the first time that Great North went to
MIP-TV, in the spring of 1990, we were dragged there, literally, kicking and
screaming, by our friend Ted Riley of Atlantis. Having just emerged from 15 or
18 years at the Film Board, I was of the very strong belief that my job was
simply to make Canadian films for the Canadian marketplace and I never thought I
would have to look outside that. But Ted insisted we come and they registered at
the market and got us there and booked us hotel rooms and everything else. After
three days of wandering around the Palais, we realized two things, one, that
nobody had any time to talk to us and, secondly, every film we had ever dreamed
of making had already been produced and was being sold there.
--- Laughter / Rires
4499 MR. THOMSON: So, after three days, we were
ready to rent a car and drive to Italy and get away from the place. And Peter
Sussman, one of Ted's partners, saw us standing forlornly in the corridor and
came up to us and said, "You know, what's the matter?" And we told him. And he
said, "Well, stop being so hard on yourselves. Take it easy. You're not here to
sell a show or make a deal, you're just here to find out what the international
market is all about, and two years from now you'll do a deal and you'll be able
to say to yourself, `I did that deal because I went to MIP two years ago'".
--- Laughter / Rires
4500 MR. THOMSON: So, feeling much, much better, we
toddled down the hall, to the Telefilm stand, which was the only place where we
had faces that we knew, and I was talking to the receptionist at Telefilm and
this little guy came up and asked her, behind my back, "Do you know where I can
find Great North", and I spun around and said, "I'm Great North. Why?" And he
said, "Well, I want to buy your film". We had only produced one film and we put
an ad for it in the Playback International Magazine and he had seen the ad and
he wanted to buy it. And it turned out that he was from Discovery, in the
States. Discovery was a very, very small organization, at that point. I think he
was their twenty-first employee and he -- we began negotiations, the
negotiations took six months, and we met again, for lunch this time, at MIPCOM
to close the deal and he brought a friend of his who was another new employee at
Discovery and we had a nice lunch and signed the deal and then, six months, he
and the friend brought two more friends and we had lunch with four people from
Discovery, and that led to a dinner at MIPCOM, the following October, with eight
people from Discovery, and I'm pleased to say that, now, Discovery -- the
Discovery group of channels, which include the Learning Channel, Discovery
Health, Discovery Travel, Animal Planet and Discovery itself, represent about 40
per cent of our production. And we just came back from MIP about 10 days ago and
there we had our usual -- and which is going to become a semi-annual dinner
with all of the senior broadcast executives from Discovery. There was 35 people
there from all the different channels. There were six of us from Great North
trying to entertain them all. And all that happened because Ted Riley dragged me
to MIP and because Peter Sussman wouldn't let me leave.
4501 So any kind of initiative that can provide to
other independent producers in Canada the kind of benefit that Ted and Peter
gave us will be a huge, huge benefit.
4502 I don't want to bother to analyze each of the
benefits attached to the application. Needless to say, they are well considered
and will have a positive impact on the Canadian broadcasting system, as a
4503 We are also pleased to note that these
benefits put forward by Corus are in addition to the existing conditions of
licence attached to the WIP licences.
4504 ALCOM pay television has been a valued partner
for Great North and has invested in many of our projects over the past several
years, including our biography of Ray Bradbury, produced for USA Network, a
documentary about pigeons currently in production for the Discovery Channel, a
docu-soap produced last year for Life Network, and two limited documentary
series delivered just recently to the Learning Channel.
4505 It would have been difficult, if not
impossible, for Great North to cover the deficit on these shows without ALCOM's
timely participation and we hope that under new management they will be able to
continue to be an active and valuable partner for Great North.
4506 In conclusion, in the interest of resolving
the ownership situation at WIC of implementing an imaginative and beneficial
benefits package, of giving Canada's small and regional independent producers
the same international opportunities that Ted Riley and Peter Sussman once gave
Great North, we urge the Commission to approve this application.
4507 We think the Commission for this opportunity
to express our views and we would be pleased to answer any
4508 CHAIRPERSON OF THE COMMISSION: Thank
4509 I would ask Commissioner Pennefather to ask
the questions, please.
4510 COMMISSIONER PENNEFATHER: Hello,
4511 MR. THOMSON: Hello.
4512 COMMISSIONER PENNEFATHER: -- and welcome
again, and congratulations for mentioning the Film Board twice today --
--- Laughter / Rires
4513 COMMISSIONER PENNEFATHER: You discussed
earlier, and again today, with Commissioner Grauer, your comment regarding the
importance of the national program, in terms of that being of benefit not only
to producers across the country but producers in western Canada, as well, but I
would like to pursue a couple of other points here.
4514 CTF will play a diminishing role in the
financing of Canadian production and Canadian producers will have little choice
but to look at foreign pre-sales as a primary source of production funding. You
have illustrated quite well the value of the international marketing fund to
assist in doing that but, in your view, what effect will that have on Canadian
production other than, yes, it's a source of financing but as a primary source
of financing do you have any concerns that we will be leaning more and more
towards foreign pre-sale and less and less to public funding in this
4515 MR. THOMSON: Yes, that's a very, very good
question and it's not very easy to answer but I think that the public funding
was initially put in place back in the early eighties, I suppose, in order to
create an infrastructure that could produce Canadian programming and I think
public funding has done a tremendous job of creating that infrastructure and
there's no question that Canadians can produce television programming as well as
anybody now, and they can produce that in all the regions of the country.
There's no region that's fallen behind in terms of our ability and our expertise
in producing programming.
4516 It's interesting to note at a market like MIP
that Canada is consistently the fourth or fifth most represented country there.
Obviously, the Americans and the British and the French are the top three, but
it's always a toss-up between Canada and Germany as to who's the fourth or fifth
largest country being represented as market. So that infrastructure is if we can
produce tremendous programming and we can sell it all over the
4517 What's happening now, I think, is the need for
those government funds have to shift from being there to support infrastructure
to being there to support distinctively Canadian programming, because there is
no question that distinctively Canadian programming is difficult to sell. I
always use the example of a -- well, we do a series for History Television
called "The Canadians" which is a series of biographies of dead Canadians and,
quite frankly, many of them are of absolutely no interest outside of CaNada
whatsoever, but it's a vitally important series to be produced in Canada and for
Canadians. So I think the funds have to become much more project specific and
must less industrially specific, and I think we'll see that -- I think we
have seen it happen already, and I think it will continue to
4518 COMMISSIONER PENNEFATHER: So as a corollary,
you would then table, perhaps, that, as far as financing in this country, you're
looking more and more to, for example, major transactions like this one to have
an impact on financing of production in Canada?
4519 MR. THOMSON: Well, yes, if they could keep
selling themselves back and forth forever it would be great.
--- Laughter / Rires
4520 COMMISSIONER PENNEFATHER: But my point was,
though, over and above that, that, yes, there are benefits, but do you see that
this transaction, perhaps others down the road, are really providing sufficient
return, in terms of money to production? There are the benefits packages which
you have underlined as very important, and indeed they are very attractive, but
is that enough?
4521 MR. THOMSON: Boy, that's a really hard
question to answer. I guess it depends on how much we want our broadcast system
to reflect Canada or how much we want our broadcast system to both reflect
Canada and present well-made, attractive programming that sells all over the
world. And I'm not really sure about the answer to that. It's a really tough
question. I guess right now the distinctively Canadian programming that we see
is going to -- the amount of it is going to be governed, to a large degree,
by the amount of public funds available.
4522 COMMISSIONER PENNEFATHER: Well, it's in line
with our discussion over the course of the last couple of days regarding what
ends up on the screen and the position of viewers in this
4523 One final point. The last paragraph, you say
that the beneficial benefits package is an imaginative one and it is giving
Canada's small and regional independent producers the same international
opportunities that Ted and Peter Sussman had given you, at one point. So you're
confident that while this is the national approach, the small and regional
independent producers will have those opportunities?
4524 MR. THOMSON: Well, I think that particular
fund is earmarked for small- and medium-sized and regional production companies.
And I meant to preface my little anecdote about MIP by saying that while I
appreciate there has been a lot of talk about benefits being designed to end up
on the screen, as opposed to in other places, certainly that kind of benefit
pays huge, huge dividends and, you know, it didn't directly end up on the
screen. That kind of benefit will directly end up in people getting to the
markets but what they pick up at those markets will have a huge impact on what
Canadians see on their television screens down the road.
4525 COMMISSIONER PENNEFATHER: Thank you very
4526 MR. THOMSON: My pleasure.
4527 CHAIRPERSON OF THE COMMISSION: Thank
4528 MR. THOMSON: Thank you.
4529 THE SECRETARY: Madam Chairperson, with your
leave, we have Mr. Canales on the phone line right now and he is with Media
Group and he's our next intervenor this afternoon.
INTERVENTION / INTERVENTION
4530 MR. CANALES: Hi. Can you hear
4531 CHAIRPERSON OF THE COMMISSION: Are you
4532 MR. CANALES: Yes, I'm here.
4533 CHAIRPERSON OF THE COMMISSION: Please go ahead
with your presentation.
4534 MR. CANALES: Okay. Good afternoon. I am really
sorry I can't be in Vancouver due to circumstances beyond my control. I, you
know, really think we would be able to do this through the benefit of the
4535 Good day, Madam Chair, Commissioners, fellow
broadcasters. My name is Manuel Canales. I am a professional communications
4536 CHAIRPERSON OF THE COMMISSION: Excuse me,
Mr. Canales. We don't hear you very well.
4537 THE SECRETARY: If you hold on, I will go and
--- Pause / Pause
4538 THE SECRETARY: Madam Chairperson, it appears
that the connections are fine but the line that we got might not be good so we
are calling him back to see if we get a better connection.
4539 CHAIRPERSON OF THE COMMISSION: Okay.
--- Pause / Pause
4540 MR. CANALES: Hello. Can you hear me
4541 THE SECRETARY: Mr. Canales, are you on
4542 MR. CANALES: No.
4543 THE SECRETARY: Could you say "hello" again and
we will check to see how clear you are.
4544 MR. CANALES: Hello.
4545 THE SECRETARY: We are not getting you clearly,
at all. Are you speaking right into the phone?
4546 MR. CANALES: I'm speaking right into the
phone. It's a cordless phone, though.
4547 THE SECRETARY: Oh. We're not getting good
reproduction here at all.
4548 MR. CANALES: What I did say is -- my
notes is what I'm going to read, which has already been written
4549 THE SECRETARY: Well, Mr. Canales, is
there a way that you can get to a land line?
4550 MR. CANALES: Yes. Okay.
4551 THE SECRETARY: Okay. If you could tell our
operator what number he should call you back at and we'll call you
4552 MR. CANALES: Okay.
4553 THE SECRETARY: Thank you.
--- Pause / Pause
4554 MR. CANALES: Hello. Can you hear me better
4555 CHAIRPERSON OF THE COMMISSION: Yes, we do.
4556 MR. CANALES: Okay. I'll proceed,
4557 CHAIRPERSON OF THE COMMISSION: We just want to
tell you -- I'm Françoise Bertrand and I'm charing the Panel here. I just
want to let you know that we have had a copy, a written copy, of your
4558 MR. CANALES: Yes.
4559 CHAIRPERSON OF THE COMMISSION: And I would
like to remind you that you are allowed a presentation of 10
4560 MR. CANALES: Yes.
4561 CHAIRPERSON OF THE COMMISSION: So if you want
to just pick and choose because, you know, from the pages I see in front of me
it might take more than 10 minutes to read all this, so maybe you want to select
what you want to, you know, share with us orally.
4562 MR. CANALES: Madam Chair, I'm just going to be
no more than 10 minutes. I'm only going to read the first five pages. The rest
are charts and addendas that goes with it.
4563 CHAIRPERSON OF THE COMMISSION:
4564 MR. CANALES: So I'll start?
4565 CHAIRPERSON OF THE COMMISSION:
4566 MR. CANALES: Okay. I'll start
4567 I'm sorry not to be there in Vancouver, but I
thank you that you are able to include me on the telephone.
4568 So, good day, Madame Chair, Commissioners,
fellow broadcasters. My name is Manuel Canales. I am a professional
communications consultant. I immigrated to Canada from Chile in 1974 and by
1975, I had my first radio position in Dartmouth, Nova Scotia. From there, I
have worked in several consultant and employment positions in the broadcasting
industry throughout North America for the last 25 years.
4569 From 1995 to 1997, I had the opportunity to
work for CING-FM -- Burlington Broadcasting Incorporate -- as General
Manager and Vice-President of Development and with Shaw Radio -- Shaw
Communications -- and now Corus as they purchased the radio station from
local business people and, consequentially, I am still involved in labour
litigation and legal proceedings in order to obtain full payment of my
4570 I must say that through my experience with
Shaw and Corus, I have come to the conclusion that they are a very determined
company that stops at nothing to obtain their final wishes and, to my amazement,
for a company the size of Shaw/Corus, they would go to any extremes to get what
they want without regards to exemplar corporate culture or
4571 Today, I will concentrate my comments in a
strictly professional view of these radio applications, bearing in mind the
4572 The background. In February 18, 2000, the
Commission issued notice of public hearing CRTC 2000-1, giving interested
parties a full description of the background of these proceedings -- I
quote from that:
"The Commission intends to discuss, among other questions:
"- The level of concentration of ownership in the radio sector in terms of
diversity of voices that could result from the transactions in specific markets
such as Calgary, Edmonton and southern Ontario.
"- The level of cross-ownership between distribution, radio, specialty
services and other media outlets that could result from the transactions;
"- In addition, the Commission intends to discuss the impact that the
proposed transactions may have on the Canadian broadcasting system and its
related benefits. The Commission will wish to explore whether the proposed
transactions will be of benefit, from a programming perspective, to the markets
in question as well as to the broadcasting system as a whole.
"Further, the Commission may wish to discuss the appropriate valuation of the
transactions as well as the specific proposals for unequivocal tangible
benefits. The Commission may wish to discuss whether it would be appropriate, in
the circumstances, for CanWest Global, Corus and Shaw to divest a part of their
broadcasting undertakings in the event the applications are approved in whole or
4573 As noted earlier -- and this -- the
public hearing -- Shaw's acquisition of the 41.25 per cent voting interest
in WIC was completed prior to obtaining approval from the Commission. The
Commission expects Shaw to address the manner in which this transaction came
about, particularly the closing of the transaction without prior Commission
approval and without Commission-approved trust arrangements in
4574 I did not make the comments -- because I
was not present during the hearing so I don't know what the presentation was,
so -- allowing them to cover the above points -- CRTC
4575 The concentration of media ownership. Although
I filed my intervention on October 7, 1999, I only received a reply, enclosed,
at April 20th, from Mr. Cassaday's office which I believe is contrary to
Commission procedure in answering interventions within a specific time limit.
Specifically to address the consolidation within the radio industry and the
southern Ontario radio market, Mr. Cassaday writes -- and I quote:
"Corus agrees with the Commission's assessment of the effect of consolidation
within the radio industry. However, to ensure that listeners continue to be well
served by a variety of `voices', the Commission stated that in reviewing
transfer of ownership of stations it would examine the impact of increased
common ownership of stations in a particular market and the overall level of
competition. To foster diversity, the Commission's radio ownership policies
limit the number of stations that may be owned within a defined market area.
However, limits have not been placed on the number of stations a particular
owner may acquire across the
4576 This is a typical Shaw/Corus corporate
attitude to push the interpretation of CRTC policies to the
4577 Please find enclosed Schedule F from
Mr. Wayne Plunkett's -- who was here earlier today --
intervention showing clearly that should the Commission allow these
transactions, in their entirety, Shaw/Corus will have a cumulative total of 50
per cent of the licensed radio undertakings in the corresponding markets and a
whooping 56 per cent of the FM -- the most profitable section of the radio
industry -- radio frequencies in those markets.
4578 Now, add to that the fact that since
1995 -- the CRTC 1995-60 paper -- the Commission determined that
commercial FMs could apply to be relieved of their promise of performance
commitments to operate in Group I or II. The applications when made and approved
would be effective September 1, 1995. This change made possible for the
marketplace to be in flux and it became possible for changes in a particular
format to happen any time.
4579 How are we going to maintain diversity in the
marketplace and ensure that listeners continue to be well served by a variety of
voices with Shaw/Corus holding this freedom of programming and holding 50 per
cent of the commercial licensed frequencies in the markets in question and how
are we going to ensure that we foster diversity and examine the impacts of
increased common ownership of stations in a particular market the overall level
of competition when, by granting this application, in its entirety, to
Shaw/Corus, the Commission will be handing over 50 per cent of the licensed
4580 Furthermore, any audience level measurements
comparison of existing radio tuning levels will be obsolete by the sole right
that Shaw/Corus will inherit to manipulate programming of all stations owned and
target demographics to suit economic returns.
4581 Number 5: Radio advertising rep houses control
lion's share of national business.
4582 An example of this is clearly demonstrated in
the selling practices of Shaw/Corus existing stations. Please find enclosed
Schedule 4, pages 5(78) to pages 8(75) of Dufferin Application 1999-10188 where
Dufferin Communications elaborate -- and I quote:
"5. DEVELOPMENT OF LARGER SHAW RADIO GROUP (Corus) IN HAMILTON/TORONTO -
CING, CFNY, CHAY, CILQ, Y-95, CHML AND CHOG - If and when the purchase by
Shaw Radio (Corus) of stations CILQ and CHOG (Toronto) and Y-95 and CHML
(Hamilton) is closed and approved by the Commission, the Shaw(Corus) combo
(advertising package) now in the Toronto CMA will be expanded to seven stations.
This group forming a combo with the Toronto CMA portion of the audience will be
a formidable force in the marketplace in the face of
4583 Hence, the definition of a radio market, as
far as the Toronto CMA, requires a second look.
4584 The city has amalgamated into a larger greater
metropolitan area, where all radio stations are in Toronto/Hamilton corridor
currently enjoy a common listening area.
4585 Advertising is largely bought in regional
packages and this market enjoys a larger portion of media-buying decisions from
advertising agencies and media buyers that seek cost efficiencies and target
specific demographics throughout the greater metropolitan area; thus, the combo
packaging and accommodating of advertising impressions which, within the common
ownership, encourages efficiencies of delivery of GRPs -- gross rating
points -- facilitates the manipulation of competitive
4586 Six: Geographical amalgamation of
Burlington -- CING-FM -- to Toronto CMA.
4587 The potential amalgamation of
Burlington/Oakville to the Toronto area, responsibility resides with other
government agencies that do not keep check of radio ownership levels and can
potentially officialize which is today already a reality of a common market of
potential audiences in the greater Toronto area.
4588 This is, of course, without taking into
consideration that Shaw/Corus/YTV have applied to an additional licence in the
Toronto and greater provincial coverage -- 50,000 watts 740 AM -- and
awaits the Commission approval for it.
4589 Number 7: CKDK-FM Woodstock has become a
virtual repeater of station CING-FM Energy 108 and leaves little room for local
4590 Number 8: Corus' 20 per cent foreign media.
Not only we will be handing Shaw/Corus 50 per cent of all licences in the
specified markets, but with that, we will also be fostering control of
broadcasting by large corporate entities with its corresponding foreign
4591 Number 9: Power --
4592 THE SECRETARY: Mr. Canales, I'm sorry to
interrupt you, but you're past your 10 minutes. I'm wondering if you could wrap
4593 MR. CANALES: Yes, I will.
4594 THE SECRETARY: Thank you.
4595 MR. CANALES: Okay. Sorry about
4596 Like I said -- I'll just name the five
things (inaudible) power corporation; additional swap of cable (inaudible)
between Rogers and Shaw to facilitate the (inaudible); the mere fact that the
Toronto applicants are so numerous and so on demonstrate the need of their
Toronto frequencies and I urge you in closing that you look towards the future
and we are allowed to create diversity in the business environment of
(inaudible) radio broadcasting and (inaudible) to consolidation into a few
4597 Thank you very much.
4598 If you have any questions I will be
4599 CHAIRPERSON OF THE COMMISSION: Yes, we do. It
will be Vice-Chair Colville who will be asking you some
4600 MR. CANALES: Okay.
4601 COMMISSIONER COLVILLE: I guess it's good
evening, Mr. Canales, where you are.
4602 MR. CANALES: How are you?
4603 COMMISSIONER COLVILLE: I'm just
4604 I noted at the bottom of page 3 in the
presentation that you have read to us this afternoon that you have said:
"Hence the definition of a Radio Market, as far as the Toronto CMA requires a
4605 So you acknowledge that perhaps the definition
needs a second look.
4606 MR. CANALES: At Toronto.
4607 COMMISSIONER COLVILLE: Would it be your view
that these applications would fit within the current definition of the market in
4608 MR. CANALES: No.
4609 COMMISSIONER COLVILLE: The current CRTC
definition of a market?
4610 MR. CANALES: No. From what I understand, Corus
is agreeing from the current definition. We believe that there is such a merge
of audiences, in the French areas with the Toronto areas that there is not a
real distinction in terms of the quality of the audience. So, for example, just
to elaborate on that point, Shaw currently has a radio station called CFNY which
is supposed to be a Brampton radio station, which was grandfathered years ago to
be able to move down to Toronto and consequentially broadcast from the Eaton
Centre in Toronto and the CN Tower, but it's still supposedly a Brampton radio
station. Does that address your question?
4611 COMMISSIONER COLVILLE: It's your opinion that
the Shaw stations go beyond the current CRTC definition of market, but do you
understand that the CRTC -- that the stations have been licensed
within the existing CRTC framework or definition of market?
4612 MR. CANALES: Yes, I understand
4613 COMMISSIONER COLVILLE: I noted in your written
presentation that you sent in earlier, you said:
"In my opinion there should not be any more than 35 per cent market
domination in any given case, taking into consideration the target demos, music
format and concentration of ownership this will give it a fair playing ground
and a fair chance to make a profit for all the broadcasters." (As
4614 When you say 35 per cent market domination,
what's the 35 per cent of?
4615 MR. CANALES: Well, you have to analyze the
demographics. What they do is they take 12 plus as the universe and they treat
that as the general thing, but normally that's not what counts because the radio
lists of advertising sales, the advertising sales are not bought in 12 plus.
They are bought in target demographics.
4616 If you dominate the 12 to 24 market, you know,
it's a much different thing than if you have the 12 plus. The 12 plus is much
4617 The problem comes where the stations are
allowed to change their format so that they can go like CISS went from country,
which was an older demo, to a real teen demo, so that changes the mix in the
4618 So in my opinion the (inaudible) in the
outlets and the licensed numbers of outlets that has the capability to capture
audience. Then, in order to be again formed in a package for sale. (Inaudible)
...need a specific target audience. So they can meet a certain financial
4619 COMMISSIONER COLVILLE: That may be so, but the
Commission expressly changed the policy to allow stations to move from one
format to another. Are you suggesting we should change that
4620 MR. CANALES: No, not at all. I am merely
suggesting that in the case of Shaw and Corus they have too much going on and
that I think it creates an imbalance in terms of the marketplace. If you went by
the markets, like that's why I included the chart that there were 12 markets and
they (inaudible) according to the chart 50 per cent of the radio stations in
4621 COMMISSIONER COLVILLE: As we discussed with
Mr. Plunkett this morning, that chart runs all the way from Oshawa and points
west of Oshawa all the way up to Barrie where some of those stations, a station
in Ottawa doesn't necessarily overlap with a station in Barrie. So is that an
accurate way to measure that entire market?
4622 MR. CANALES: Well, the market that they sell,
really, when they sell it is really commercialized. It's like southern Ontario,
they explained they packaged the advertising in order to share it with stations
that they have low producing and so everybody gets involved, but the majority of
the stations gives you the power to make the combination to suit the advertiser
to acquire a bigger dollar.
4623 So if you have five stations you have an
ability to acquire more audience than somebody who has two. Therefore, it makes
a bit of a commercial disadvantage in terms of anybody else having more. So
that's the area that is not currently regulated in terms of because you just
having that thing happen right here right now with the situation in
4624 I don't know of any other market as saturated
as this in Canada.
4625 COMMISSIONER COLVILLE: Thank
4626 My last question then is: Is it your view that
this application with the stations involved goes beyond the Commission's current
4627 MR. CANALES: Yes. I think it should be
carefully assessed and you can hand out more like the term "a loaded gun" and
then you just have to make sure that the overpowering of the freedom of the
operation is what -- I mean they could very easily monopolize the
market. That's the concern.
4628 COMMISSIONER COLVILLE: Okay. Thank you very
much for your submission, Mr. Canales. We apologize for the difficulty in making
the connection here today.
4629 MR. CANALES: That's fine.
4630 Thank you very much for hearing me
4631 CHAIRPERSON OF THE COMMISSION: Thank
4632 MR. CANALES: Bye, bye.
4633 MS VOGEL: I would like to call the
representatives from Pacific Music Industry Association and NewMusic West and
O'Day Productions. They have agreed to sit as a panel and have 15 minutes for
their presentations. Not each. In total.
INTERVENTION / INTERVENTION
4634 MR. DONNELLY: Madam Chair, Commissioners,
4635 My name is John Donnelly. I'm a
Vancouver-based concert promoter and producer of special events. My background
includes 15 years as a performer and, now, 15 years on the business side of
music so I'm quite familiar with all areas of the music business and the
entertainment business, in particular, in this market. Although I have also
produced concerts and events in many other markets than Canada, I have had the
opportunity to work with almost all of the Vancouver's local radio and
television broadcasters over the past few years.
4636 I am appearing today on behalf of Corus
Entertainment to speak, in particular, about CFOX and their unprecedented
support for the local music industry with regard to their application which is
4637 I understand that your approval of this
application will allow Corus to effectively take over management of WIC's radio
and specialty television properties, which includes Vancouver radio stations
CKNW and CFMI. We strongly support this application.
4638 Corus is pledging to voluntarily distribute
$10 million in radio public benefits funding over a seven-year period. Of that
money, 3.1 million will go factor, one million will go to local initiatives in
the six WIC radio markets and $100,000 per year will go to college and campus
radio. This is a substantial commitment and is well allocated.
4639 To speak directly about Corus' current radio
management team, they have proven to be strongly supportive of local music and
the arts and I believe their music industry friendly management policy will
carry over well to CKNW and CFMI.
4640 Two of the major initiatives that I worked on
directly with CFOX are FOX Fest, which is their annual station festival which I
produce for them -- it's taken many forms over the years but it's always
had a very strong focus on promoting and supporting local
4641 Another big initiative that I worked with CFOX
on NewMusic Quest. This is Vancouver's annual festival for Canadian talent
development. It's supported strongly by CFOX, both financially and
promotionally, over the past nine years that we have been staging this
4642 Through these projects and other projects that
I have produced, I have the chance to watch the management and staff at CFOX
take direct action to support new ideas and new talent.
4643 NewMusic Quest in only two weeks and this year
we are going to feature over 300 artists performing in 30 venues throughout
Vancouver. If you turn in to CFOX, you'll hear promotional spots and (inaudible)
supporting the event but, even more importantly, you will hear the music of many
of these bands. CFOX has special programs, such as F-SPOT and ULTRAFOX, which
are dedicated to supporting local music and breaking new artists. But they go
above and beyond that. They will be interviewing artists, attending the shows.
They will be doing entertainment reports from our festival event and they help
promote both the festival and the new Canadian artists. This type of
over-the-top coverage isn't even considered by the other stations in the market
and they really come to the table for us and I'm pleased to report that this
event has been a huge success. Last year we attracted almost 20,000 people and
this year, now, it looks like we're going to draw 25,000. So we are really
pleased and I believe our event, in particular provides a really good example of
the type of support that CFOX gives to local entertainment events and
4644 I have also both performed and produced
(inaudible) many other markets in western Canada and I just know that it's very
difficult to obtain that type of radio support, in particular, for groups
featuring local artists. So in Vancouver, there's just a huge talent pool. The
Pacific Music Industry directory lists 1,000 performers and over 150 live music
venues. And the difference that a strong, local broadcaster can make for new
artists, especially when they get into a project or get behind it, is really
phenomenal and I know first-hand that the CFOX management and staff are very
excellent local broadcasters and committed to supporting a local
4645 My personal experiences with Chris
(inaudible), Bob Mills, Rob Robson(ph), Marianne MacKenzie(ph) and all the staff
at CFOX have been nothing short of fantastic; they provided many opportunities
to me over the past many years, and to my production company, and they were
always there when we needed them. So it's my pleasure (a) to provide this
endorsement for CFOX and their staff and I know that their application to take
over the management of CFMI and CKNW will be a strong benefit to the local
community. I think it's going to help them prove the support that we can get in
the local markets for events and for artists and I know that their commitment is
to serve the local community.
4646 MS O'DAY: Madam Chair, Commissioners, my name
is Ellie O'Day and I'm currently working at O'Day Productions as a publicist in
the arts and I'm arts consultant and without repeating a lot of things that John
Donnelly just said, I am, too, supporting this application and with more an
anecdotal background in that I was the executive director of the Pacific Music
Industry Association from its first years, in 1991, until just about 10 months
ago -- and by the way, I resigned because I like to work very directly with
artists, and that's what I have done is I have gone back to work that allows me
to work one-to-one with artists.
4647 During the years that I was executive
director, one of the primary projects that I worked on was the Canadian talent
development project from CFOX, known as DemoListen Derby/Vancouver Seeds.
DemoListen was the talent competition and Vancouver Seeds was the resulting CD.
I know there are a lot of stations that do similar home-grown projects but my
experience with CFOX showed, I think, how most stations really should be doing
these -- and I'll cite some specific examples.
4648 When CFOX did these projects, there was a
tremendous excitement in the community that was generated by the on-air exposure
of the ongoing competition that happened in many stages. Once we then adjourned
to record the CD when there was less public profile of what was going on, that
took place, and then once we had the CD out, then is the opportunity for the
radio station to play tracks from the CD. I know this, again, happens in many
contexts, but what CFOX does was very much above and beyond just giving air play
to tracks on the CD. They had an amazing open-door policy to those artists who
had gone through the process of taking part in the final stages of the project
and that afforded them an ongoing relationship with the station and an ongoing
opportunity to build their careers -- and a few examples are, Matthew Good
Band, which is one of the leading rock mainstream bands in Canada today. It was
one of the winners, I believe, in 1992. He started out as a solo artist and very
quickly found a band and got exposure on the station through not one, not two,
but a succession of, I'm sure, at least a half dozen singles that were exposed
by the station. These were not singles that you could have found any trade paper
because it was CFOX, in its local community, that was giving exposure to this
artist and today, Matthew Good is seen on covers of magazines right across
Canada and has a lot of his career to go.
4649 Another example would be Bif Naked, tattoos
and all. She was another winner of our competition and, interestingly, she won
the competition and then very shortly after her band broke up. So, therefore,
she really couldn't take advantage of the second half of the competition, but
what we allowed her to do was to use the studio time that she had won to put
together some demos -- because, at the competition where she won, she was
noticed by a local manager by the name of Peter Karroll who today, seven years
later, is still her manager -- and through those demos got exposure to a
local producer who then helped her record her very first album. She was
subsequently signed to both Aquarius Records in Canada and to labels overseas,
in Germany, and has an international career today.
4650 But what CFOX did in those intervening years,
again, was not only to afford air play to her but also an opportunity for her to
come onto the station where she has developed into one of the most amazing rock
raconteurs I have ever seen in this industry and she has now been featured on
talk shows in the United States, because she was allowed the opportunity to come
into the station and use that context to develop that part of her
4651 And most recently, Nickelback, who is on the
very last of the projects that I took part in, put out an album last year, just
following their release on the CD compilation that Vancouver Seeds was
distributed on, and when they put out their own album, they finally got the
national recognition, with the help, once again, over many years, with CFOX that
has given them the encouragement to build their career, and I do understand
that, in this past week, that they are now Top 10 U.S., and I'm very proud of
4652 I would just like to say that CFOX does much
more on the (inaudible) of requirement of the Canadian talent development
project and they really put their full creative support behind it and because of
that, I support the way that they implement their promises of
4653 MR. LaFRANCE: Madam Chairman and
Commissioners, my name is Marc LaFrance and I am the President of the Pacific
Music Industry Association. I am also a recording artist. And I also have a
record label, called Delinquent Records. I am here to support (inaudible) CFOX,
excuse my nervousness --
--- Laughter / Rires
4654 MR. LaFRANCE: I covered three people there
--- Laughter / Rires
4655 MR. LaFRANCE: I just wanted to point out that
CFOX, as an artist back some years ago when I released an album were very
supportive of me and played my record, which led to me developing my record
company which ended up putting me in a position to represent other artists and
shop their music throughout -- internationally throughout the world. I go
to MIDEM every year and will be going to POPKOMM, but from the air playing
exposure that I got from CFOX it helped me grow not just as an artist but also
helped me as an entrepreneur and a record company to further my career and help
4656 I also wanted to point out that CFOX is also a
tremendous contributor to the West Coast Music Awards, which celebrates our
talent here in British Columbia, and also, they have also been a phenomenal
support with the Seeds album which, you know, showcases our talent
4657 I just wanted to add those few things, and
excuse my jumbling, but that is -- you know, I throw my support behind
CFOX. Thank you.
4658 CHAIRPERSON OF THE COMMISSION: Thank you very
4659 I would ask Commissioner Grauer if she has any
questions for you.
4660 COMMISSIONER GRAUER: No, I think your --
well, not with respect to your support for Corus' application.
4661 I just have one other matter that I would
appreciate your views on. Our policy which allows multiple-licence
ownership -- there are a number of reasons for it, one of which is to
hopefully increase the diversity of formats available in a
4662 I would be interested in your views on what
the supply is of available music that will allow this diversity. In other words,
we have Canadian content requirements and we hear, from time to time, from
various people, that there is -- it's cyclical in the various genres and
so, I just wonder if you could give me your thoughts on that I suppose is what I
4663 MR. DONNELLY: With respect to the project that
I'm working on right now, which is the NewMusic Quest Festival, it really is a
big festival to promote emerging talent in Canada. So the way we conduct it is
we issue a call to new artists to submit their tapes to the festival. This year
we broke 1,000 submissions. We almost had 1,100 artists from B.C., from the
Pacific northwest, from Alberta, from -- a fair amount of Ontario and
Quebec, as well, but really the concentration of it is from right here in our
own market. So there's an incredible talent pool in this market. The quality of
it, with just the increased quality in home recording and everything going
digital, it's very -- it's way easier for groups. It used to be that it
cost so much for a group to make a record to try and get the kind of quality
that was available for radio broadcast. Now, with the advent of digital
technology, we are finding that of the 1,100 submissions over 800 were
CD-quality submissions put forward by new artists, so 800 of them are on CD and
available. So I really believe there is no shortage of music that's available
and it's only getting better as our whole industry matures. So, to have another
outlet, in particular with the attitude and the approach that CFOX has taken, I
know their plan, really, is that this management staff will now take over the
other two new stations and I think that taking their attitude or supporting
local music will only benefit our entire community.
4664 COMMISSIONER GRAUER: I guess part of my
question was, for instance, if we wanted diversity in terms of, you know --
I don't know my music as well as you do, but jazz and adult -- is there's
lots of -- is there ample supply in the different genres. If someone wanted
to start a jazz station, could you do it with the --
4665 MR. LaFRANCE: Yes, I would say -- I
represent all genres of music and there is an abundance of all types. There's
more music, I think, produced now than ever in the history of mankind and I see
a lot of it, local jazz, really good jazz, good even Celtic music, B.C. Celtic
music. So we have a fairly -- a very large variety.
4666 COMMISSIONER GRAUER: Thank you very
4667 Did you want to add something?
4668 MS O'DAY: I just wanted to add that even
within rock, there are so many -- the market has become very fractualized
and there's so many distinctions within even what we used to broadly think of as
pop and rock. Now, today, even within a market that has multiple rock stations,
it's very different tastes, flavours, of rock within any one market and it will
be attracting very different listenership, so I don't really see a problem
there, in that regard.
4669 COMMISSIONER GRAUER: Thank you very much. I
appreciate your comments.
4670 CHAIRPERSON OF THE COMMISSION: Thank you very
4671 THE SECRETARY: With your leave, Madam Chair,
if those three intervenors could consult with our court reporter before you
leave, please, there are some names that she would like to retrieve from you for
4672 Those are all the intervenors with respect to
the Corus applications and we're in your hands. Do we go straight to reply, at
4673 CHAIRPERSON OF THE COMMISSION: Well, I
understand Corus has been offered to have a decent time before they come for
reply and they said they were ready, so we are taking their word on it.
REPLY / RÉPLIQUE
4674 MR. CASSADAY: Good evening. We promise we
won't spoil the great karma of that last presentation.
--- Laughter / Rires
4675 MR. CASSADAY: We know many of our stations are
listening on the Web site to this proceeding and I hope they all take some
satisfaction to the kind of difference each of them can make
4676 Madam Chair and Commission, we thank you very
much for the opportunity to have presented our case and for your patience, and
the staff in particular for the patience in allowing us to get to this point. It
has been a very long process.
4677 We would like to make just a very few and
brief comments on the interventions that we have heard this afternoon and we
would like to begin by thanking all of the intervenors, both those that
supported our application and those that opposed it, and thank them in
particular, in many cases, for the long trip they made to get here and the
amount of time that they spent with us in these proceedings.
4678 As we listened to the conversation this
afternoon, there were really three themes that emerged, in my mind anyway and I
think in the minds of our team. The first was competition; the second was
diversity; and the third was the issue of fairness.
4679 I would like to just make a few quick comments
on each of those.
4680 First of all, as it relates to competition,
whether it is in respect to television and the impact of cable versus DTH
carriage or whether it's in respect to radio and the impact of various levels of
tuning share or revenue share in a given market, the most important thing, in my
mind, when one considers the impact of competition, is whether or not you have
the presence of robust and aggressive competitors in the marketplace. And as an
illustration, you know, to the intervenors, we would just like them to think
about the impact that Virgin Airways has had in their particular sector, a very
small competitor but one with a sense of purpose, one with a vision as to where
they wanted to take it and they, you know, dwarfed by giants like Lufthansa and
British Airways and American Airlines have made a truly significant impact on
their business. And as it relates to our business, the television business, we
have seen the arrival of ExpressVu, for example, who, while maybe small in
absolute terms, are the career leader in digital, which we believe is the new
business that we will participate in television.
4681 On the question of diversity, we would simply
like to remind the intervenors that we believe one of the unique aspects that
Corus, this new company, brings to the table is its western heritage. We have a
deep respect for the importance that we have, the responsibility that we have,
to reflect regional interests, particularly those here in the west, both as it
relates to music talent and production talent, and that is a belief that is a
part of our parentage and that we can assure the intervenors that will be
maintained as we go forward.
4682 The final area that we just wanted to touch on
is the issue of fairness. It seems that there is still the perception that there
would be some sense of obligation on the part of Shaw management to demonstrate
preferential treatment to Corus management simply because of the shared
ownership that J.R. Shaw has in both of those companies and we just believe that
that is not a valid or real concern. And we would remind the intervenors, as we
said earlier, that approximately 50 per cent of our new company has shareholders
that are unique to those of Corus and the Shaw family's total equity in our
company is approximately 10 per cent. So we think that there is clearly in place
the shareholding mechanism to ensure that there is fairness. And we also
appreciate the comments of notable intervenors, such as CHUM, who pointed out
the progress that we're making as an industry in moving forward on that
4683 So, Madam Chair and Commissioners, those are
just a very brief response to what we think has been a very full hearing of our
application and we, once again, thank you very much for your attention to our
4684 If there are any questions, myself or Kathleen
or any of our team who are still here would be delighted to answer
4685 CHAIRPERSON OF THE COMMISSION: Thank you. We
have a few questions.
4686 First, Commissioner Pennefather would like to
pursue in some elements that you touched upon.
4687 COMMISSIONER PENNEFATHER: Thank you, Madam
4688 Indeed, I would like to return to one aspect
of the application, and I reference paragraphs 33 and 34 of the radio policy. In
fact, we discussed these three aspects referenced in that paragraph regarding
the impact on competition and diversity and concentration, mainly the level of
true competition, the potential for gate-keeping with respect to information and
concentration of advertising -- of the advertising market in the hands of
one person. Those three components are in paragraph 33.
4689 I would like to return to this matter because
your application potentially raises issues regarding levels of competition and
the Commission may determine that some form of divestiture in some or all of the
markets involved may be required.
4690 If we look, then, at the markets involved,
specifically, Calgary, Edmonton, Vancouver and southern Ontario, wherein we do
see, when you combine the current Corus holdings and the holdings under
consideration in this transaction, a position in the Calgary market of 48.4 per
cent share in revenues and 40 per cent share in audience, in Edmonton 51.6 per
cent and an audience share of 54 per cent, and in Vancouver a revenue share of
40 per cent and audience share of 33 per cent, in Toronto and Hamilton 15 per
cent revenues 10 per cent audience share and in Hamilton 60 per cent share of
revenues and a 29 per cent share of audience as a combination -- and I'll
come back to the souther Ontario market in a moment. Considering this impact, do
you agree that if we consider just the radio stations and the radio market, and
using 1999 BBM numbers, which I just have, that the combination of your existing
and acquired stations places Corus in a dominant position in these
4691 MR. CASSADY: No, Commissioner Pennefather, we
do not agree with that. We believe that in each of those markets there is robust
competition, there are numerous competitors. For example, in the Calgary market,
which you referred to, in the addition to the combined stations of Corus and WIC
we have Standard, Rogers, CBC. We have CJSI-FM, an independent. We have CHFK, an
independent. And we also have a campus radio station.
4692 In Edmonton, in addition to the combined
ownership of Corus and WIC, we have, again, Standard, NewCap, Telemedia,
CBS -- I'm sorry -- CBC. We have CKUA-FM, an independent; CJCA, an
independent; CKER-FM, an independent; and, again, a considerable spill coming
into that market. So, again, we look at the Edmonton marketplace as being an
extremely competitive market within the country.
4693 All of the intervenors have spoken about the
intense competition within the Toronto market but within the Toronto market, in
addition to Corus/WIC, we have Telemedia, an operator with over 90 licences in
Canada, Standard Broadcasting, CHUM, recognized throughout the hearing as one of
the most dynamic competitors in our industry, Rogers, ethnic stations, CBC, once
again, intense competition.
4694 In the Vancouver market, we also have levels
of competition that virtually unprecedented in any sector that you look at
within the Canadian industry, as a whole, with the competition from Rogers,
CHUM, again Standard, the Pattison group, CBC, as well as ethnic
4695 So these are markets with intense
4696 The other aspect, of course, of importance
here is recognition that as it relates to advertising the radio business
competes with many other forms of advertising that are available, notably,
out-of-home, newspaper, magazine and television, all of which provide
significant competition for us and we have provided for each of these markets,
as part of our submission, detailed charts outlining the competitive framework
in each market in which we compete.
4697 As it relates to our share of viewership, we
also can point -- listenership, we also can point to the fact that our
listeners in each of our market have access not only to the radio stations in
those markets but also to a wealth of Internet stations which have emerged both
from Canadian sources as well as from international sources.
4698 In addition, we have the opportunity for
people to tune in to services like DMX and Galaxie, and we also talked about the
imminent arrival of satellite radio, probably either made available in Canada
directly through the automotive companies or through the two major players,
Sirius and XM Radio.
4699 COMMISSIONER PENNEFATHER: So I take it that
however you agree with the impact, per se, in terms of the revenue share and
audience share that I mentioned in each of those markets that you will be
occupying that position and your point is that it does not, however, undermine
competition as a result. But you do agree that you will occupy that
position -- those positions in those markets?
4700 MR. CASSADAY: Those are fair representations
of the market shares in those -- I mean those markets.
4701 We would also put on the record the fact that
in the radio business -- and I think Mr. Strain talked about this in some
details -- there are ebbs and flows in formats and shares rise and fall
rapidly based on the performance of the genre and the management of those
4702 So we would hope that we can maintain and even
grow our business in those markets, but there's no assurance, given the level of
competition, that that would be the case.
4703 COMMISSIONER PENNEFATHER: Now, regarding
southern Ontario, we note not only the percentage of revenues and shares in
Toronto and Hamilton but, also, the extensive coverage your combined stations in
these markets give Corus in southern Ontario, and the point has also been made
that the numbers that I have mentioned still do not include the recent
acquisitions from Power, namely, 11 stations in Ontario.
4704 In your view, does this not raise concerns
regarding competition, diversity of new voices and concentration of the
advertising market in one person's hands, in the particular situation of
4705 MR. CASSADAY: No, it does not. The Ontario
market tuning by major broadcast owner -- and we can cite statistics
here -- accounting for 70 per cent of the province's tuning, the combined
Ontario assets of Corus, the recently acquired Power stations would total just
9.4 per cent of market. The addition of the WIC stations would result in an
Ontario share of Corus, combined, of 15.4 per cent. That compares to CHUM, with
13 per cent; Rogers, with 15 per cent; Telemedia, with 9.1 per cent; Standard,
with 8.9 per cent; and the CBC, with 9 per cent; with others, which includes
independent and out-of-market tuning at 29.6 per cent.
4706 So, once again, I think we can see that there
is incredibly strong competition within the Ontario marketplace and that the
position that would be held by Corus going forward would, in no way, represent a
degree of concentration that should cause concern.
4707 COMMISSIONER PENNEFATHER: My question was
regarding southern Ontario and the particular contours that result from the
ownership you would acquire, if approved, in an area which covers London, up to
Barrie, inclusive of the Power acquisitions. You, in this particular
circumstance, were talking about CING-FM Burlington, CHML, CJXY-FM, CFNY-FM
Brampton, CHOG or CFYI -- I believe they're the same -- and CILQ-FM
North York cover a vast area in southern Ontario.
4708 Again, do you not consider this to be a risk
or there are not concerns raised regarding diversity --
4709 MR. CASSADAY: No, we do not. And we think the
information that we provided the Commission just a moment ago is quite
reflective of the southern Ontario market position. When one considers that the
Ontario radio market revenue is approximately $339 million, one could easily
assume that at least 80 per cent, perhaps 90 per cent of that, would be in the
southern Ontario market. So I think this is an excellent reflection of the
situation in southern Ontario.
4710 We would also add that the positions that we
have acquired and hope to acquire in Ontario are in complete compliance with the
CRTC policy, as it relates to radio ownership and duopoly. In no instance, do we
exceed the level of ownership that is allowed under the current regulations. We
have three stations in Toronto, two -- we would have, with your approval,
two FMs and one AM. We have a station in Burlington, which is a separate
designated market. We have two stations in Hamilton. So, three in the
Hamilton/Burlington area. We have two stations in Barrie which complies with the
4711 So, with respect, we would argue that, given
the level of competition in this marketplace and the fact that we are in
complete compliance with the policy direction of the CRTC, that there should be
no basis for concern over the position that we hope to acquire in that
4712 COMMISSIONER PENNEFATHER: I understand that
point, which is why I raised the radio policy and the fact of when such a
transfer would occur, I agree we're not challenging that, but we are looking at
the consequences in terms of competition, diversity and news voices and the fact
of the matter is that the results of these acquisitions cover a vast area of
Toronto and southern Ontario and, in effect, render a position for Corus which,
in your view -- I was interested in knowing your view on whether or not
this was a cause of concern, regarding diversity of voices as well as
concentration of advertising, because the effect of all of these acquisitions is
a very large coverage of southern Ontario.
4713 MR. CASSADAY: We believe that as it relates to
diversity that, in fact, the proposal that we have before you is a virtue in
that, as Mr. Strain explained in his detailed discussions on this subject,
we will have the opportunity, through extensive research, to create even broader
play lists than are currently in existence now.
4714 One of the benefits of consolidation is the
opportunity to move away from the pursuit of a single demographic and provide
more choice for our radio listeners in Ontario and we're excited about that
4715 Secondly, as it relates to advertising, not
only do we not consider our share of the radio pie to be in any way a threat to
the competitive environment in southern Ontario but we point out, once again, to
the supplementary material that we provided in our application with the number
of newspapers, both dailies and weeklies, in each of those markets, plus the
competition from out of home, plus the extensive opportunity for television
advertising in that market, and for all of those reasons we would suggest that
there is no reason for concern about the level of concentration that we will
have in the southern Ontario market, either in terms of number of stations,
share of audience or share of revenue.
4716 COMMISSIONER PENNEFATHER: So, in sum, you do
agree, however, with the level of concentration which the facts tell us you will
have as a result of these transactions?
4717 MR. CASSADAY: Yes. The statistics that we have
provided you with, in response to your question, are accurate reflections of the
situation as it exists in Ontario today.
4718 COMMISSIONER PENNEFATHER: Beyond the
individual markets involved, and looking at all of Corus' radio holdings
currently and as a result of this transaction, there can also be a question of
the level of competition on a regional and national basis.
4719 In contemplating this aspect, should the
Commission focus solely on adjustments in individual markets?
4720 MR. CASSADAY: We believe that the current
approach that the Commission has taken to define radio markets is accurate.
Radio is primarily a local business. As we have put on the record during these
hearings, approximately 75 per cent of our total radio revenue comes from local
advertisers and, as all of the Commission is well aware, our signals reach only
discrete areas of the population, so we are in complete agreement with the
current CRTC definitions, as it relates to market definitions for
4721 COMMISSIONER PENNEFATHER: If the Commission
were to determine that the concern is also, or instead, at a regional and
national level, what kind of adjustments could be made?
4722 MR. CASSADAY: The Corus application that's
before you is in complete accordance with all of the current regulations. It
would be very difficult for me to speculate as to what the Commission might be
considering, in terms of changes to those policies. We can only say that as it
relates to the policies that we are aware of today, we believe that this
application is completely consistent with both the word and the spirit of those
4723 COMMISSIONER PENNEFATHER: That's why I began
with the policy itself. And under the existing policy, the Commission makes it
clear that it would call upon the applicant to assess its consolidation against
the issues of competition, diversity in news voices and concentration in
4724 Thank you. Those are my
4725 MR. CASSADAY: Thank you.
4726 COMMISSIONER OLE boingINGSTRUP: Thank
4727 COMMISSIONER WYLIE: I have just one
4728 The numbers you were giving, I realize you
said southern Ontario was upwards of what, 80-85 per cent of radio of Ontario
4729 MR. CASSADAY: That would certainly be my
estimate, Commissioner. I think it would be very close to.
4730 Terry, would you agree?
4731 MR. STRAIN: Yes, John, I
4732 I think just one other thing I might add on
top of what you said, it was interesting, one of the intervenors, for example,
indicated that with our stations in Toronto we would dominate the 18 -- as
they existed today -- would dominate the 18-24/18-34 market. We are not the
Number One station with any station, either WIC or Corus, in that market, and
you can dominate the 18-24/18-34 market, in Toronto, without touching a WIC
station or a Corus station. In other words, you can buy around it. And I think
when John said that there are opportunities for people to buy around this and do
things, that is so -- you know, we had a pretty good -- and I'll come
back to Commissioner Pennefather's one question on Burlington. We had a pretty
good run with Burlington because we were lucky. We got in the CHR format. When
we bought the station, it was in that format. There was no other station in that
kind of area doing anything along the CHR. As soon as Rogers came along and
bought CISS -- and they now have three stations in the market -- they
went from a three-share to approximately an eight-share, and we went from about
a three-and-a-half-share down to a two-share.
4733 So, these are -- when I'm talking about
ebb and flows, this is what can happen within a market. And I'll tell you, you
feel the hit of it, from a financial standpoint, immediately. It doesn't take a
week. It takes a day.
4734 COMMISSIONER WYLIE: So the numbers you were
giving, the percentage of shares, were for all of Ontario, though, so there
could be a skew to those numbers, but not probably very large if it's 85 per
cent. But you were giving percentaGes of the various players for all of
4735 For example, if one is not in Ottawa, it skews
the numbers for southern Ontario, which is what we are focusing on, where the
overlap is --
4736 MR. CASSADAY: That's correct.
4737 COMMISSIONER WYLIE: -- more serious. But
considering the percentage, it wouldn't change those numbers a whole lot. But
they were for all of Ontario --
4738 MR. CASSADAY: That's correct.
4739 COMMISSIONER WYLIE: -- the numbers you
4740 Thank you.
4741 CHAIRPERSON OF THE COMMISSION: Legal counsel
4742 MS MOORE: Thank you.
4743 Some of the benefits proposed involve equity
investments, and I was wondering if you would be able to commit to -- if
your application is approved -- to report to the Commission, on an annual
basis, as to the amount of the return on those investments and as to what
initiatives the return has been reinvested in.
4744 MR. CASSADAY: Yes, we would be happy to do
4745 MS MOORE: Thank you.
4746 Those are my questions.
4747 CHAIRPERSON OF THE COMMISSION: Thank you very
4748 THE SECRETARY: I would like to invite Shaw to
come forward, at this time, to comment on the interventions with respect to
REPLY / RÉPLIQUE
4749 MR. STEIN: Thank you, Madam Chairperson and
Commissioners and Vice-Chairmen.
4750 I just had the great joy, over the last hour,
of getting all of the kinks out of my system by writing out all my notes and now
I'm just going to disregard them and give my comments as I feel then -- and
of course, I'm here with Chris Johnston to make sure I get this
4751 I would like to comment on three of the
interventions as part of this proceeding related to Shaw directly or
4752 First, with respect to CHUM's intervention, we
want to confirm our commitment to those elements of the code that are so
applicable and, as well, to work on an industry-wide basis to ensure that we
come up with an overall approach that will lead to the successful launch of the
new digital services that will be equitable to all of the stakeholders
4753 As well, I think that the -- I have to
comment that the commitment to positive negotiations to ensure that all of the
services that were licensed by the CRTC were launched, that CHUM referred to,
that the ability to negotiate with programming services over the past couple of
years has been a very positive experience and, I think, has led to a great
success with our viewers, in terms of those services. So we tried to resolve
those, the issues, in very commercial ways -- and as Jim said said, we
always appreciate the Commission's patience as we sort those things out and, I
think, in the end, benefit Canadian viewers in terms of the services that we now
4754 Secondly, I would like to provide a comment on
the issues raised by the Friends of Canadian Broadcasting, which put forward a
list of supposed misdeeds and I would like to -- I think it would be
important to deal with each of them in turn.
4755 First, in terms of Telelatino, the Friends
said that there are rumours that Shaw did not pay fair market value. That the
Friends would try to make a point based on rumour, I think, is typical of the
spin and style that they unfortunately bring to the process. If the facts don't
fit, they just start a rumour.
4756 As to the increased penetration numbers for
Telelatino, this was part of an overall plan by Shaw to bolster our offerings to
our viewers and to add more diversity to the package of services we
4757 Mr. Morrison did not mention the other
initiatives we have taken to benefit our viewers, including the move of
Fairchild Television, a Chinese-language service, to basic in our areas that we
serve in Toronto and that we were the first to launch all of the ethnic digital
services across Canada. These are all part of initiatives undertaken by Shaw to
strengthen the services that we offer in all languages to our
4758 Secondly, the Friends, in their comments on
Sportscope, have gone beyond rumours to becoming historic revisionists.
Sportscope was always on basic on Shaw's systems, and had been for some years.
What changed was that Sportscope secured a licence as a full-motion programming
service from the CRTC. We kept the service exactly where it always had been for
our customers. To move it would have been a disservice.
4759 With respect to Treehouse, first we need to
look at the characteristics of Treehouse. It's targeted at children under six
years old; it's commercial free; and, at the licence hearing, it was clearly
stated that, as an incentive, the service would be offered on basic for free for
4760 When we sat down and reviewed how we would
offer the new services, we took a very consumer-focused approach. And during
that process, we concluded that Treehouse would make a very attractive addition
to our basic package, that it would be also great for Shaw's objectives to offer
a service focused on children on our basic package and that the terms, quite
frankly, were very attractive to Shaw on a strictly commercial
4761 There had been a lot of issues with respect to
the launch of the services licensed in 1996, but I think that the most important
point is that we have successfully launched all of them, just as we committed to
4762 With respect to Galaxie, the Commission's
regulation is quite clear, that an independent service -- which, in this
case, is Galaxie -- should be carried provided that it could be delivered
to cable hit ends with the appropriate technology.
4763 The short answer is that we were never able to
come to an arrangement whereby the technology was compatible. There were
discussions with respect to transponders; there were discussions with respect to
technology. Despite this, we have continued discussions with Galaxie and we
understand an agreement has been reached, and we look forward in terms of the
benefits that that service will offer to our subscribers.
4764 Finally, in terms of the use of the local
avails, the regulations allow us to promote cable services and we always
interpret the regulations in very liberal ways and we took that to include
Internet services as part of our cable services package. The CRTC decided that
they were telecommunication services and so, we no longer use these avails to
promote those services, given that CRTC's decision.
4765 The third intervention I would like to comment
on is the intervention by SPTV -- and I'm surprised at the SPTV
intervention and, obviously, I must have (inaudible) to have a lot more
discussions with them, in terms of how we approach these issues, but I think
that in this world of convergence of new technologies and new services, the best
approach is the one where we identify the problem, discuss it and identify
solutions and move ahead. That's how we make progress. And we believe that we
have developed a great broadcasting system because we have solved problems. Nay
sayers are not appropriate in this.
4766 We believe that the steps taken by Shaw and
Corus -- namely, structural separation with the creation of Corus as a
totally separate corporate entity; secondly, the launch of all of the services
since 1996 licensed by the CRTC on satisfactory terms to all concerned; and,
finally, our participation in all policy and regulatory processes, including the
CRTC's development of a new digital framework -- that all of these
demonstrate our commitment to make the system work better and to support the
development of a strong Canadian broadcasting system.
4767 I think we have to talk more with SPTV about
what we need to do to meet the needs of Canadian viewers, to talk about the
development of strong Canadian services and to talk about investment and the
risks of investment in Canadian programming. I think that these are important
things and I think it reflects a failure, certainly, on our part, to perhaps not
have advanced the discussions as much as we could to solve those
4768 That's the sum of my comments, and I would be
pleased to answer any questions you may have.
4769 CHAIRPERSON OF THE COMMISSION: Thank
4770 Vice-Chair Colville...?
4771 COMMISSIONER COLVILLE: Just a fairly minor
point of clarification.
4772 It was mentioned yesterday, I think, in Corus'
reply -- well, I know it was mentioned in Corus' reply because I have it
right in front of me -- to a number of the intervenors that Shaw has stated
that 95 per cent of its subscribers to these services -- those being
Superchannel, Moviemax and Viewer's Choice -- 95 per cent of subscribers to
these services, those ones I just mentioned, distributed on Shaw's cable
services now receive these services in a digital format by a digital set-top
4773 Can you confirm that that's
4774 MR. STEIN: Yes. There's two numbers here. The
first is, in terms of Shaw itself, I would say that close to 8-9 per cent of our
subscribers now receive all those services on digital. A very small percentage
in smaller communities still on analog but we're planning to, you know --
that's transitory. We plan to finish that through this year. So that they would
all receive those services through digital.
4775 I think the other percentages, in terms of the
subscriber numbers for the services themselves, a lot of those are made up of
the direct-to-home services, the other digital services.
4776 I think, for example, now, the satellite
companies are the largest distributors of their products. Like Superchannel has
more satellite customers --
4777 COMMISSIONER COLVILLE: Now you have lost
4778 MR. STEIN: -- than cable
4780 COMMISSIONER COLVILLE: You lost me
4781 MR. STEIN: Okay. Sorry.
4782 COMMISSIONER COLVILLE: Of the subscribers, I
had understood this to mean you, virtually -- of all the subscribers that
you had to the premium pay TV services would have had analog boxes; you've
traded those analog boxes out for digital ones to the tune that 95 per cent of
those subscribers are now subscribing through digital.
4783 MR. STEIN: Right.
4784 COMMISSIONER COLVILLE: Is that
4785 MR. STEIN: That's correct.
4786 COMMISSIONER COLVILLE: When would you expect
that to reach 100 per cent?
4787 MR. STEIN: Well, I would -- for all
practical purposes, I would say through this year that we would reach that
level. The only area where we might not is in terms of where we are doing
conversions in smaller systems.
4788 COMMISSIONER COLVILLE: Now, would all new
4789 MR. STEIN: Absolutely. Yes.
4790 COMMISSIONER COLVILLE: -- services be
4791 MR. STEIN: All new -- yes.
4792 COMMISSIONER COLVILLE: And in the case of
Viewer's Choice, how many digital channels do you allocate to the Viewer's
4793 MR. STEIN: I would have to check that exactly
because that's part of when we do the upgrades on the systems, in terms of what
we're rolling out in the digital boxes, so I wouldn't really be authoritatively
able to answer that.
4794 The plan is to be able to launch all of the
services with the same number of channels and not differentiate.
4795 We can get back to you on that
4796 COMMISSIONER COLVILLE: I would appreciate
(inaudible) with respect to Viewer's Choice, and if you have plans for expansion
of that --
4797 MR. STEIN: Okay. Sure.
4798 COMMISSIONER COLVILLE: -- knowing what
those plans and what the number of channels allocated to Viewer's Choice would
4799 MR. STEIN: Right. Okay.
4800 COMMISSIONER COLVILLE: Thank
4801 CHAIRPERSON OF THE COMMISSION: Vice-Chair
4802 COMMISSIONER WYLIE: What is the percentage of
your total subscriber base, cable base, that receives video programming
digitally? Is that the 7 per cent you were mentioning?
4803 MR. STEIN: No, no --
4804 COMMISSIONER WYLIE: Out of your 1.8 million
subscribers, how many have a digital box for video services excluding Internet
4805 MR. STEIN: Well, the 1.8 million subscribers
we have is --
4806 COMMISSIONER WYLIE: One point nine
4807 MR. STEIN: I was using 1.8.
4808 COMMISSIONER WYLIE: One point eight, yes,
that's what I was using, as well.
4809 MR. STEIN: We have about 130,000 digital boxes
4810 COMMISSIONER WYLIE: Okay. That's the number
CTV was using but I thought there was --
4811 MR. STEIN: Well, sometimes people
4812 COMMISSIONER WYLIE: -- conflicting
because I believe sometimes Internet receivers, those who receive Internet, or
the at-home service, and not the video services also are added
4813 MR. STEIN: Not on the same
4814 COMMISSIONER WYLIE: So 130,000 of your 1.8
million subscribers receive their video services digitally?
4815 MR. STEIN: Yes.
4816 COMMISSIONER WYLIE: Thanks.
4817 CHAIRPERSON OF THE COMMISSION: Legal counsel
has a question.
4818 MS MOORE: Would you be in a position to file
that information by tomorrow, for the public record, and would you be able to
copy Corus with the information?
4819 MR. STEIN: Yes.
4820 MS MOORE: Thank you.
--- Laughter / Rires
4821 CHAIRPERSON OF THE COMMISSION: Copy Corus. And
we want proof of it.
--- Laughter / Rires
4822 CHAIRPERSON OF THE COMMISSION: Well, thank you
very much. That concludes our questions. Thank you.
4823 THE SECRETARY: Madam Chairperson, that ends
the intervention phase, with respect to Corus applications.
4824 I would like to, with your leave, re-open the
intervention phase for Global and recall Dean Butler. I would invite him to come
4825 CHAIRPERSON OF THE COMMISSION: And we are
doing this with the permission of Global?
4826 THE SECRETARY: Yes, Global has reserved the
right to another reply, with respect to this intervenor.
4827 CHAIRPERSON OF THE COMMISSION: Thank you,
Mr. Butler. Thank you for your patience.
INTERVENTION / INTERVENTION
4828 MR. BUTLER: Most of my comments are already on
the public record and I will just quickly summarize what those are and introduce
myself and make myself available to questions if you like.
4829 My name is Dean Butler. I'm Director of Media
Services with Glennie Stamnes Strategy, a regionally-based advertising company
based here in Vancouver.
4830 My comments are relative to the application of
Global to merge with WIC Television and divest itself of one station and in
order to address that issue I wanted to bring a point of view from an
4831 The comments that I have heard at the hearing
are really interesting. It's the first time I have sat down at one of these, so.
I'm not representing any broadcaster and I'm not representing any social point
of view. My comments are more economic.
4832 The issue that I want to bring forward is the
fact that in this market of Vancouver we are facing a very, very competitive
situation for our viewers, period.
4833 There's sort of three components. There's
Canadian conventional television; there's Canadian specialty cable television;
and U.S. specialty television -- and I'm not even getting into satellite
services, at this point.
4834 Since 1989, according to BBM, the share of
hours tuned for conventional television has dropped from 60 per cent, in 1989,
to 50 per cent, in 1998. Conversely, over that 10 years, with the growth of
Canadian and U.S. specialty television, the share of hours tuned on those
specialty cable channels has gone from 7 per cent, in 1989, to about 26 per
cent, in 1998. And, in the meantime, the population of this market has grown 50
per cent, from about 2.1 million, in 1989, to about 3.2 million, in
4835 What does that mean? What it means is that
conventional TV the audiences have been losing share of viewers to the growth of
specialty cable. This, in turn, has put pressure on air-time supply as available
advertising ratings available to Vancouver focused advertisers has dramatically
decreased. Compounding this problem of diminished advertising time supply, for
that matter, the increased demand in Vancouver as a market relatively based on
the tremendous population growth we have seen over the last 10 years. The result
is severe year-to-year inflation in terms of cost to buy advertising on
television in this market.
4836 We, as advertisers, pay significantly more
money for shrinking conventional TV audiences and, as a result, in certain
respects, TV as a medium, as a viability for the local advertisers, is
decreasing relative to escalating costs and advertising budgets. This is forcing
advertisers, especially regional advertisers, out of television into other
media, such as radio and newspaper, and that, in turn, is creating higher demand
in those media and driving inflation there.
4837 Just in terms of expenditures, the
average -- the total number of increased expenditures in the last five
years, between 1994 and 1998, there's been a 65 per cent increase in advertising
expenditures in all media in Vancouver, newspaper, magazine, out-of-home radio
and TV, which is about 15 per cent a year, which is actually tremendous growth
being financed by advertising.
4838 With respect to the CanWest Global WIC TV, we
all know that viewers watch programs, not channels. To capture loyal viewers,
conventional TV channels must increase the appeal of their programming --
this means producing of purchasing inventory that can compete with the best
productions on specialty networks, both in the U.S. and Canada, as well as the
existing competition from convention channels. Any TV station with mediocre
programming can't exist in that environment and, actually, will only fragment
the available viewing and maybe, in fact, aggravate the inflation
4839 When DTV was introduced in the fall of 1997,
we were hopeful that we would have more competition and greater competition
for -- the opportunity for more audiences and greater competition within
that that's mitigating cost increases. But, at the same time, I believe it was
seven cable channels were introduced at the same time which, essentially,
whitewashed any effect that DTV could have had relative to that
4840 So, with CanWest Global, really, it, from my
perspective, there's no real change in the market structure, other than the fact
that with the power of Global, which has built itself on high-quality, prime
time programming, and the power of WIC Television, which has built itself on
high-quality news programming, as one company combining those opportunities as
they may as one station and represented CHAN and CHEK, be able to provide a
higher quality competitive product and, therefore, generate higher viewing and,
therefore, make it more attractive for me, as an advertiser, at the same time,
allowing the new owner to come in, bring more competitive programming and
another competitive voice, in terms of the cost of TV.
4841 So, in my comments, I'm supporting the
application of CanWest Global to merge with WIC and divest itself of one
station; it will only increase the competitive aspect of this market, which is
really necessary, and there's still room for more competition.
4842 Thank you.
4843 CHAIRPERSON OF THE COMMISSION: Thank you,
4844 Certainly my colleagues may have other
questions. Tell me, what did neutralize the effect of the impact of DTV? I'm not
sure I --
4845 MR. BUTLER: What happens is it's really a
competition for a pie of people watching TV. And with specialty cable channels,
they tend to be national signals and, as it's good-quality programming, it's
attracting Vancouver viewers to those channels, and in doing so, it really
removes those people from access through my advertising. I can't buy national
cable channels to reach Vancouver; it doesn't make any economic sense. So what
it's doing is it's taking audience and exploiting it, it's taking local audience
and exploiting it where it's a value to national advertisers but of no value,
relatively, to regional advertisers.
4846 CHAIRPERSON OF THE COMMISSION: Okay. So if I
understand correctly, you know, kind of doing the analogy in the Global
situation you're supportive because of their local commitments, in terms
4847 MR. BUTLER: Oh, definitely, they would provide
higher quality product locally and higher quality product will then force the
other stations to match that quality and, at the same time -- so better
quality means, hopefully, larger share of viewers and, at the same time,
hopefully, control some of the cost issues that we are facing as
4848 CHAIRPERSON OF THE COMMISSION: You're a media
buyer, so you certainly not only are buying viewers, you know what the viewers
are looking for, and, in terms of local programming, what kind of local
programming do you think has more -- is that news? Or is it the kind of
programming that is more oriented towards, you know, public affairs, like, you
know, they are proposing? Are they a format or a genre where you know that the
viewers are more likely to migrate in terms of being present on the local market
here in Vancouver?
4849 MR. BUTLER: I'm not really commenting so much
on what program or genre. I do know that putting out mediocre programming that
will only take up tunable hours that people don't want to watch will only make
the situation worse. Really, put an onus on the TV stations and their
programming people to come up with solutions that are real solutions for
Vancouver and not perceived solutions. Give the people what they want, not what
they believe they should have.
4850 CHAIRPERSON OF THE COMMISSION: So you don't
care what they watch, as long as they are there, the --
4851 MR. BUTLER: Ultimately, yes.
4852 CHAIRPERSON OF THE COMMISSION: They have the
4853 MR. BUTLER: I can make my
4854 CHAIRPERSON OF THE COMMISSION: -- as
long as it's largely Canadian.
4855 MR. BUTLER: I can make my choices once they're
4856 CHAIRPERSON OF THE COMMISSION: Okay. Thank
4857 Do my colleagues have any questions?
4858 Well, thank you very much.
4859 MR. BUTLER: Thank you.
4860 CHAIRPERSON OF THE COMMISSION: You have been
very helpful and we will certainly make good use of your participation. Thank
4861 Marguerite is gone?
4862 MR. BLAIS: Marguerite has stepped out, so I
get -- I'm indicated by the folks from CanWest Global that they don't
require a reply on this additional information. So that ends the CanWest Global
item on the agenda.
4863 CHAIRPERSON OF THE COMMISSION: And that
concludes our work for this week and (inaudible) do we have any
4864 MR. BLAIS: It's my understanding that the last
application -- do you require a...? No. For the final item there is no
request for a reply orally. So that concludes that item, as
4865 CHAIRPERSON OF THE COMMISSION: Okay. So
there's no reply, there's no intervention.
4866 MR. BLAIS: So, I believe that ends
4867 CHAIRPERSON OF THE COMMISSION: That ends the
hearing and that allows me to thank everybody. Thank you for the participants
and thank you for the applicants and thank you for my colleagues, staff and the
Panel, the stenotypists and everybody who was with us when we had
heating -- the heater.
--- Laughter / Rires
4868 CHAIRPERSON OF THE COMMISSION: Thank you very
--- Whereupon the hearing concluded at 1758 /
L'audience se termine à 1758