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 LICENCES TO OPERATE NEW PAY AND SPECIALTY
SERVICES FOR DIGITAL DISTRIBUTION / DEMANDES DE LICENCES
VISANT LA DISTRIBUTION NUMÉRIQUE DE NOUVEAUX SERVICES DE
TÉLÉVISION SPÉCIALISÉE ET PAYANTE
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 30, 2000 le 30 août 2000
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Applications for Licences to operate New Pay and Specialty
Services for Digital Distribution / Demandes de licences
visant la distribution numérique de nouveaux services de
télévision spécialisée et payante
BEFORE / DEVANT:
Françoise Bertrand Chairperson of the
Commission / Présidente
Andrée Wylie Chairperson / Présidente
Jean-Marc Demers Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
Martha Wilson Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Peter Cussons Hearing Manager and
Secretary / Gérant de
l'audience et secrétaire
Alastair Stewart Legal Counsel /
Peter McCallum Legal Counsel /
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 30, 2000 le 30 août 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
GROUPE DE RADIODIFFUSION ASTRAL/
ASTRAL BROADCASTING GROUP 3849
TÉLÉVISION FRANÇAISE 1, (TF1) 3895
BCE MEDIA INC. 3911
THE CANADIAN ASSOCIATION OF BROADCASTERS 3958
CANADIAN CABLE SYSTEMS ALLIANCE INC. 4014
CANADIAN CABLE TELEVISION ASSOCIATION 4051
ASSOCIATION DES PRODUCTEURS DE FILMS
ET DE TÉLÉVISION DU QUÉBEC 4131
CANADIAN CONFERENCE OF THE ARTS 4150
CANADIAN FILM & TELEVISION PRODUCTION
ASSOCIATION/ ASSOCIATION CANADIENNE DE
PRODUCTION DE FILM ET TÉLÉVISION 4176
WIC PREMIUM CORPORATION 4203
CANADIAN SATELLITE COMMUNICATIONS INC. 4225
LOOK COMMUNICATIONS INC. 4252
INDEPENDENT FILM AND VIDEO ALLIANCE 4287
Hull, Quebec / Hull (Québec)
--- Upon resuming on Wednesday, August 30, 2000
at 0830 / L'audience reprend le mercredi 30 août
27040 LA PRÉSIDENTE: A l'ordre, s'il vous
plaît. Order, please.
27041 Good morning and welcome to the
continuation of the third phase of our hearing and it
is, I believe, day 13 today. So I hope we have no
black cats on the Pet Channel.
27042 We will adjourn, as I said yesterday,
at 20 to 12 today and resume at 2:00 and we may work
beyond six to at least complete the list of intervenors
for the day and maybe even start on tomorrow's list.
27043 Nous vous rappelons que nous allons
ajourner tôt pour le lunch, à 11 h 40, pour reprendre à
2 heures et que nous siégerons possiblement plus tard
que six heures pour finir tous les intervenants qui
sont sur la liste d'aujourd'hui et possiblement en
entendre quelques-uns qui sont à l'agenda de demain.
27044 Mr. Secretary, please.
27045 MR. CUSSONS: Thank you, Madam Chair.
27046 Just a couple of announcements to
begin our day. Learning and Skills Television of
Alberta has now filed the information it undertook in
Phase I to provide with respect to the threshold of
documentary programming it would consider would cause a
service to be directly competitive with its proposed
DocsTV service. This filing has been added to the
27047 Also Astral has filed a revised
Appendix A to its Phase II oral remarks with respect to
the proposed Cinefest service. This revision includes
the original Canadian programming hours for each year
of the licence. This too has been added to the public
27048 Maintenant le premier intervenant ce
matin, le Groupe de Radiodiffusion Astral/Astral
Broadcasting Group, M. Bureau.
INTERVENTION / INTERVENTION
27049 M. BUREAU: Merci.
27050 Mesdames les Présidentes, Madame et
Messieurs les Conseillers.
27051 Je suis André Bureau, président et
chef de la direction du Groupe de radiodiffusion
27052 M'accompagnent aujourd'hui à ma
droite, Mme Sophie Émond, vice-présidente aux affaires
gouvernementales et réglementaires du Groupe de
radiodiffusion Astral et à ma gauche, M. Michel Houle,
consultant et auteur d'une étude sur les pratiques
d'acquisition de droits multiterritoriaux en Europe et
en Amérique du Nord.
27053 Notre intervention aujourd'hui
portera uniquement sur la politique relative à
l'autorisation des services étrangers de langue
27054 C'est une question d'une grande
importante pour Astral et pour l'ensemble des
radiodiffuseurs canadiens de langue française, comme
vous avez pu le constater par leurs interventions
écrites et lors de vos discussions avec eux à l'étape
de la présentation orale de leurs demandes.
27055 Je voudrais d'emblée préciser que
nous n'avons aucune objection à ce que des services
étrangers de langue française qui n'entrent pas en
concurrence, en tout ou en partie, avec des services
canadiens de langue française soient autorisés, comme
le veut la politique actuelle.
27056 Nous croyons en fait que de tels
services pourraient contribuer à apporter une
contribution à la diversité de la programmation offerte
aux téléspectateurs de langue française.
27057 Alors sur ce point-là, je veux être
très clair: nous ne voulons pas changer la politique
du Conseil, nous voulons la maintenir. Nous
considérons qu'elle a été -- et qu'elle est plus que
jamais -- essentielle pour assurer que le marché de la
radiodiffusion canadienne demeure autonome et distinct
en termes d'acquisition de droits de diffusion.
27058 Dans notre intervention écrite, comme
lors de la comparution des Chaînes Télé Astral, nous
avons fait valoir un ensemble d'arguments qui militent
en faveur du maintien de cette politique. Bien que
tous, à notre avis, soient importants et méritent
d'être pris en considération, je n'évoquerai que
quelques-uns d'entre eux dans cette brève présentation
27059 Mais avant, j'aimerais réagir au
commentaire de M. Paul Racine qui, en réponse à une
question que lui adressait Mme Bertrand, a mentionné à
quel point les petites câblodistributeurs étaient
anxieux d'avoir de nouveaux services de langue
française à distribuer.
27060 Je dois dire que ce commentaire m'a
un peu étonné.
27061 Tout le monde sait que les services
spécialisés canadiens de langue française sont très peu
distribués dans les marchés anglophones du Canada.
C'est d'ailleurs un problème que le gouverneur en
conseil a demandé au CRTC d'analyser et de tenter de
27062 Ce qu'on sait peut-être moins c'est
que ces mêmes services éprouvent aussi des difficultés
à être distribués au Québec dans des marchés très
francophones qui sont desservis par de petits
câblodistributeurs. Cela est particulièrement vrai
pour ceux qui ont été autorisés en 1999, mais aussi
dans certains cas, pour ceux qui ont été autorisés en
1996. Pour que cela soit clairement établi, nous
joignons à l'annexe 1 à notre intervention une liste
des marchés francophones desservis par de petits
câblodistributeurs où nos services de langue française
ne sont toujours pas distribués.
27063 Par exemple, il y a plus de
140 systèmes desservant 225 000 foyers qui n'offrent
pas encore les nouveaux services lancés en février.
Nous recevons nous autres aussi des téléphones de
résidents de Magog, de Val-d'Or, de Rouyn, de
Thetford-Mines, de Ste-Adèle, qui voudraient avoir
accès à nos services spécialisés canadiens de langue
française mais leurs câblodistributeurs disent qu'ils
n'ont pas de capacité même si parfois ils en ont trouvé
pour placer RFO-1.
27064 Alors je voudrais dire à M. Racine
que s'il reçoit d'autres demandes de petits
câblodistributeurs qui ont de la capacité disponible et
qui sont désireux d'accroître leur offre de services de
langue française, il peut nous renvoyer les appels.
27065 Mais revenons en aux questions de
fond, Madame la Présidente. Si nous voulons
collectivement nous donner des priorités en matière de
diversification de l'offre de programmation de langue
française, je crois qu'il y aurait des priorités qui
s'apparenteraient aux suivantes.
27066 Premièrement, l'amélioration et
l'élargissement de la distribution des services
canadiens de langue française existants, et ce à la
grandeur du pays. Deuxièmement, la création des
conditions les plus favorables possible à la réussite
des nouveaux services numériques canadiens de langue
française que vous allez autoriser. Ces priorités sont
d'autant plus essentielles que les services canadiens
de langue française oeuvrent, on le dit souvent, dans
un marché très exigu.
27067 Plusieurs radiodiffuseurs canadiens
ont souligné qu'il serait contraire à toute logique,
économique ou autre, d'avoir au Canada des règles qui
autorisent un niveau de concurrence étrangère plus
grand dans le marché linguistique qui est de loin le
27068 Si la politique du Conseil devrait
être adaptée pour tenir compte des particularités de
chaque marché linguistique, la logique serait qu'elle
soit renforcée plutôt que diluée dans le marché
27069 D'ailleurs si le Conseil devait
l'assouplir du côté français, on voit mal comment il
pourrait ensuite résister aux pressions des services
étrangers qui voudront bénéficier du même traitement
dans le marché anglophone, et ce en vertu des principes
inscrits dans les traités internationaux de commerce.
Les services des États-Unis seront sans doute prêts à
prendre des mesures de représailles si le Conseil ne
leur accorde pas le même traitement qu'aux services
étrangers de France.
27070 Mais je le répète, nous ne demandons
pas de modifications à la politique actuelle du
Conseil. Nous demandons qu'elle continue de s'appliquer
de façon identique et uniforme dans les deux marchés
27071 Cette politique est efficace et elle
a fait ses preuves. Plus fondamentalement, elle a été
la pierre angulaire sur laquelle s'est édifiée et
maintenue l'indépendance du marché canadien en termes
d'acquisition de droits de diffusion.
27072 Si elle était modifiée aujourd'hui,
cela conduirait à une situation où le marché canadien
de langue française deviendrait partie intégrante du
marché français. Imaginons un instant que le Conseil
autorise demain des services étrangers de langue
française qui seraient concurrents, en tout ou en
partie, avec des services canadiens. Qu'est-ce qui se
27073 Dans un premier temps, des conflits
juridiques nombreux surgiraient autour de la question
des droits des émissions, comme les services
canadiens-français achètent actuellement les droits des
mêmes émissions françaises, européennes et américaines,
la distribution au Canada de services français
concurrents aux services canadiens entraînerait
inévitablement des poursuites pour non-respect de
contrat, bris d'exclusivité, non-paiement des ayants
droit, et ainsi de suite.
27074 Le mémoire déposé par nos collègues
de TF1 offre d'ailleurs un aperçu du type de problèmes
auxquels cette chaîne française doit faire face depuis
l'autorisation de distribution de RFO-1 au Canada.
27075 Et la seule façon de se sortir à
moyen terme de cet imbroglio juridique sera pour les
diffuseurs français qui sont en position dominante,
puisqu'ils peuvent compter sur un marché domestique
beaucoup plus vaste et lucratif, ça sera d'acquérir les
droits internationaux de langue française incluant le
Canada de toutes les émissions qu'ils achètent et ils y
seront incités non seulement pour résoudre les
problèmes juridiques mais parce que les avantages
financiers et concurrentiels qu'ils tireront de
l'établissement de cette pratique seront considérables.
27076 En termes de contrôle sur
l'approvisionnement, ça va leur permettre de choisir en
priorité le meilleur de la production française,
européenne et américaine et de diffuser eux-mêmes ces
émissions en France, bien sûr, et au Canada.
27077 Les services canadiens pour leur part
n'auront donc plus accès, comme ils l'ont actuellement,
au meilleur de la production internationale en version
originale française ou doublée en français. Ils
devront se contenter d'un volet de programmation
non-canadienne de second choix.
27078 Donc le problème principal n'est pas
la concurrence que des services étrangers de langue
française distribués en mode numérique pourront exercer
en termes de parts d'écoute sur le marché canadien. Le
véritable problème c'est le contrôle sur
l'approvisionnement dont vont se doter les
services-mères étrangers en ce servant du levier du
lucratif marché français.
27079 Et ça va affecter tous les services
canadiens car en matière de droits de diffusion, il n'y
a pas de distinction entre la fenêtre numérique ou la
fenêtre analogique. Lorsqu'une chaîne spécialisée ou
thématique achètent les droits internationaux en
français d'une émission, cela emporte la distribution
aussi bien analogique que numérique.
27080 Le résultat net sera, bien sûr, un
affaiblissement des services canadiens et la
disparition d'une des grandes réussites de la Loi sur
la radiodiffusion et les politiques du Conseil, soit
l'établissement au Canada d'un système de la
radiodiffusion de langue française qui soit à la fois
autonome et distinct en termes de droits et extrêmement
dynamique dans ses réalisations -- un système que
d'ailleurs plusieurs pays nous envient.
27081 Si on met dans la balance d'un côté
les avantages forcément limités en termes
d'accroissement de la diversité de la programmation qui
résulterait de la distribution de services étrangers
concurrents, et de l'autre côté les désavantages
extrêmement importants qui en résulteraient en terme de
perte d'autonomie et de contrôle sur
l'approvisionnement pour tous les services canadiens,
il me semble évident, Madame la Présidente, que les
désavantages l'emportent haut la main.
27082 C'est pourquoi nous demandons au
Conseil avec insistance et conviction de maintenir sa
politique actuelle. Et nous ne sommes pas les seuls à
le demander. Le Groupe TVA, Quebecor/TQS, CTC/RDS et
TV5 sont intervenus dans le même sens.
27083 En terminant, je voudrais rappeler
une réalité que tout le monde connaît, qui nous est
tellement familière et rivée au corps qu'on finit
parfois par l'oublier.
27084 Cette réalité c'est que les services
de propriété canadienne emploient des ressources
canadiennes dans toutes leurs opérations quotidiennes.
C'est qu'ils contribuent de façon très substantielle à
la programmation canadienne, qu'ils la suscitent,
qu'ils la financent, qu'ils la diffusent, qu'ils en
font la promotion. C'est qu'ils acceptent, eux, de
respecter des critères de non-concurrence avec d'autres
services canadiens existants.
27085 C'est aussi qu'ils assument toute une
série de responsabilités sociales, que ce soit en terme
d'équité en matière d'emploi, de stéréotypes sexuels,
de violence, de services aux malentendants, de respect
des nombreux codes d'étique et de pratiques élaborés
par l'industrie. Ce sont là des responsabilités
importantes, intimement liées aux préoccupations et aux
valeurs de la société canadienne.
27086 Je ne doute pas que le Conseil voudra
bien ajouter cela de notre côté de la balance quand il
soupèsera les arguments qui jouent en faveur du
maintien de sa politique actuelle concernant
l'autorisation des services étrangers.
27087 Je vous remercie de nous avoir donné
l'occasion de fournir nos commentaires ce matin.
27088 Nous désirons déposer en annexe 2
l'analyse à laquelle je faisais allusion en présentant
Michel Houle, qui est intitulée Entreprises de
distribution par satellites de radiodiffusion directe
et droits de diffusion nord-américains. C'est une
analyse de la problématique qui est toujours pertinente
et que nous allons déposer aujourd'hui auprès du
Conseil, avec votre permission.
27089 LA PRÉSIDENTE: Merci, Monsieur
27090 Madame Bertrand.
27091 LA PRÉSIDENTE DU CONSEIL: Alors
bonjour, Monsieur Bureau, Monsieur Houle, Madame Émond.
27092 Merci. D'abord vous nous apportez
des informations supplémentaires sur la réalité des
systèmes de câbles et de la diffusion des services
francophones et en fait, comme vous le mentionnez, en
effet nous sommes en train d'entreprendre une démarche
fort importante qu'on avait déjà entamée et que le
gouvernement a appuyée en élargissant notre enquête.
27093 J'aimerais ce matin -- parce que je
vous entends aussi parler de la situation en disant,
"Ce n'est pas qu'on est contre la venue de services
étrangers. C'est qu'on veut le maintien de la
politique. On veut s'assurer qu'on a la possibilité au
Canada, puis évidement dans les marchés francophones,
de garder notre autonomie". Je pense bien que le
Conseil n'a aucun problème à suivre votre raisonnement
de ce côté-ci.
27094 Je pense ce dont nous avons besoin
c'est un peu l'illustration des choses et comment,
lorsque vous dites d'une part, "Nous appuyons la
politique et nous ne sommes pas contre le principe.
C'est dans le cas précis qui nous occupe et il y a un
problème des droits", et donc ça laisse entendre que ce
sont les services particuliers dont on parle qui sont
en cause et non pas le fait d'amener des services
étrangers en soi.
27095 Si, par exemple, il y avait -- j'ai
peine à imaginer -- disons un canal qui serait
entièrement dévoué non seulement aux animaux
domestiques, mais strictement aux poissons de
l'aquarium, ce serait tellement précis que là il n'y
aurait pas nécessairement ce problème de droits. Alors
je comprends que c'est lié au genre.
27096 Est-ce que je me trompe quand j'amène
27097 M. BUREAU: Je pense que vous avez
raison, Madame Bertrand. C'est intimement lié au genre
de services. Je ne pense pas que ça aille aussi loin
que votre exemple des poissons mais que c'est
certainement relié au genre d'émissions, qu'il s'agisse
soit de films, qu'il s'agisse de documentaires, qu'il
s'agisse plus précisément de telle sorte de
documentaires ou de telle orientation ou thème de
documentaires, et c'est évidement à ce niveau-là que
les problèmes se posent.
27098 Maintenant, vous avez probablement eu
connaissance à plusieurs reprises du fait que nous
avons au Canada plus de services de langue française
thématiques qu'il y en a dans d'autres pays de la même
langue. Et donc ça veut dire que chez nous on est
rendus à un niveau de resserrement en terme de thèmes
qui fait que quand on veut s'approvisionner en langue
française et que nos collègues des pays de langue
française occupent déjà le terrain chez eux dans un
thème des fois un peu plus large, il reste quand même
qu'ils contrôlent à cause de la grandeur de leurs
marchés, ils contrôlent actuellement les droits sur le
doublage de ces services-là, par exemple. Ils peuvent
décider -- et ça arrive malheureusement bien
souvent --que la bande sonore en français ne nous est
pas disponible. Ils ne veulent pas nous la vendre, ils
veulent la garder de sorte qu'on est obligés de refaire
des doublages et ça augmente les coûts, et tout ça.
27099 Mais ça c'est juste pour vous donner
un exemple qu'à l'heure actuelle, indépendamment de la
question de l'importation des services ici, on a déjà
une situation où la force, la taille de certains de ces
services-là dans les marchés français, disons en
France, fait que ces gens-là contrôlent déjà, dans un
certain sens, la distribution de ces programmes-là.
27100 Si en plus de ça on autorisait des
services de langue française, qui forcément sont
beaucoup plus gros que les nôtres, à venir et à être
distribués au Canada, bien écoutez, il faudrait qu'ils
détiennent les droits. Alors à partir de ce moment-là,
ils vont acheter les droits internationaux en français,
ou ils vont acheter au moins les droits pour l'Europe
et le Canada, et à ce moment-là, quand on va arriver
nous autres pour tenter d'acheter ces droits-là, ils
vont être partis, ils vont déjà être détenus par ces
gens-là qui ont une force beaucoup plus grande que nous
autres. C'est la même chose avec les États-Unis. Le
problème n'est pas différent du tout. C'est exactement
la même situation.
27101 Alors donc on en arrive à une
situation où on risque d'avoir un problème
d'approvisionnement majeur. Maintenant, on en est à la
phase ici de discuter de la politique elle-même. On
aura probablement dans une phase ultérieure à examiner
chacune des demandes qui pourraient être proposées puis
il y a certainement des cas où en tout cas nous autres
on ne s'objectera pas. Au contraire!
27102 On a envie nous autres aussi d'avoir
des "packages" attrayants, des bouquets attrayants,
pour les téléspectateurs, des bouquets qui vont nous
aider à vendre le service numérique. Mais il y en a
d'autres où on va être obligés de dire, "Celui-là, on
ne peut pas parce que c'est carrément concurrent avec
27103 LA PRÉSIDENTE DU CONSEIL: Mais,
Monsieur Bureau, je comprends bien -- donc laissons de
côté les cas particuliers parce qu'on aura besoin d'une
démonstration du chevauchement des grilles pour mieux
27104 M. BUREAU: C'est ça.
27105 LA PRÉSIDENTE DU CONSEIL: Mais par
ailleurs, quand on voit sur la question de la
politique -- et vous faites vous-même référence à la
situation. Vous dites que ce n'est pas différent de la
situation américaine, mais les faits sont que même les
francophones, même dans les réseaux et systèmes de
câbles dont vous parlez, ont accès présentement à
plusieurs émissions américaines, diffusées par d'une
part les radiodiffuseurs canadiens, mais aussi avec les
canaux américains comme tels.
27106 Pourquoi est-ce impossible d'avoir,
disons, peut-être en plus petit nombre, mais d'avoir un
reflet de ce qui existe en langue anglaise dans les
marchés francophones? J'avoue que moi c'est ça qui
m'anime dans ma question ce matin. Je pense bien que
notre politique, la question de la protection des
droits, ce n'est pas de remettre en question
l'importance des droits. C'est qu'est-ce qu'il y a de
différend dans la réalité francophone que ce qu'on
observe sur le marché anglophone ne peut pas être
reproduit dans le sens où il y a là aussi des droits
internationaux, il y a des droits canadiens, il y a des
droits américains, il y a des droits européens.
27107 Comment se fait-il que lorsqu'on
arrive à la question de langue française ce ne soit pas
possible d'envisager -- bien sûr, on peut comprendre
que les contrats devront être -- il faudrait un temps
d'adaptation. Alors pouvez-vous m'expliquer?
27108 M. BUREAU: C'est une très bonne
27109 LA PRÉSIDENTE DU CONSEIL: Merci,
--- Rires / Laughter
27110 LA PRÉSIDENTE DU CONSEIL: Alors je
ne sais pas si on gagnera le prix ce midi, mais ça va
bien ce matin.
--- Rires / Laughter
27111 M. BUREAU: Bon. Je recommence.
27112 Je pense que la situation est assez
différente. Je vais essayer de vous exprimer comment
je le vois. Quand on se parle de la présence de
programmes américains ou de services américains dans
les systèmes de distribution canadiens, d'abord on
parle des télévisions conventionnelles américaines, des
services conventionnels américains et ça historiquement
on a accepté de diffuser ces canaux-là au Canada. Non
seulement ça, mais on a trouvé des formules, comme la
substitution simultanée, pour en arriver à permettre
aux services canadiens qui diffusaient des programmes
en provenance des États-Unis d'en bénéficier, de ne pas
perdre les bénéfices de l'auditoire.
27113 Bon. Le Conseil a eu des mécanismes
de ce genre-là pour essayer d'amortir l'impact de la
venue de ces services étrangers-là. Quand il s'agit
des services spécialisés, le Conseil a eu une attitude
différente. Le Conseil a dit, "On va commencer par
permettre à des services canadiens de s'établir,
d'occuper le terrain, d'avoir à l'intérieur de leurs
grilles des programmes en provenance des États-Unis qui
vont faire partie de l'ensemble de la programmation du
service canadien, et qui vont faire que les Canadiens
au bout du compte vont avoir accès à la meilleure
programmation américaine et à la programmation
canadienne sous un chapiteau canadien". Je ne devrais
pas dire "chapiteau" à vous, Madame Bertrand, mais
c'est un mot qui me fait encore frémir.
--- Rires / Laughter
27114 LA PRÉSIDENTE DU CONSEIL: Je ne suis
pas rancunière, Monsieur Bureau.
27115 M. BUREAU: Je l'efface. Je vais en
trouver un meilleur.
--- Rires / Laughter
27116 M. BUREAU: Alors donc, on a trouvé
cette formule-là, mais on a dit au départ, "On va
établir les services canadiens. On ne laissera pas
entrer les services américains concurrents chez nous.
On va permettre aux services canadiens d'aller chercher
la programmation". C'est comme ça, par exemple, qu'on
a Family Channel. Disney est venu ici devant le
Conseil en disant, "Je veux être au Canada". Il y a
même un membre du Conseil à ce moment-là qui avait dit,
"Vous êtes tellement fantastiques qu'on ne peut pas
attendre plus longtemps". Et à ce moment-là le Conseil
avait dit, "Bien, la décision n'est pas encore prise.
On va attendre un peu". Mais c'est comme ça que ça
s'est passé. Disney fait partie de Family Channel.
27117 Quand on a regardé TSN, TSN est venu
mais ESPN voulait être là aussi, évidement. TSN a dit,
"Je vais présenter un service canadien qui va être
vraiment canadien puis j'irai chercher des programmes
chez ESPN". Effectivement, on a le meilleur service
canadien de sports dont on peut rêver à l'heure
actuelle avec TSN et tant mieux! On a réussi donc à
bâtir un système canadien de services spécialisés qui
ont occupé le terrain les premiers et qui ont amené
avec eux le meilleur de la programmation étrangère à
l'intérieur de leurs services.
27118 Mais le Conseil n'a jamais permis à
ESPN d'être diffusé au Canada. Le Conseil n'a jamais
permis à d'autres services spécialisés de langue
27119 LA PRÉSIDENTE DU CONSEIL: A&E.
27120 M. BUREAU: Pardon?
27121 LA PRÉSIDENTE DU CONSEIL: Il a
permis à A&E -- il y a quand même une liste
27122 M. BUREAU: Oui, parce que personne
n'avait fait de demande.
27123 LA PRÉSIDENTE DU CONSEIL: Il y a une
27124 M. BUREAU: C'est rien que dans les
cas où il y a personne qui avait fait de demandes,
jusqu'à aujourd'hui, je pense, que le Conseil c'est
dit, "Bon, puisque personne ne veut offrir un service
de cette nature-là, on va permettre à un service
étranger de venir occuper cette case-là". A&E est un
des rares, Madame la Présidente, où ça s'est fait.
27125 LA PRÉSIDENTE DU CONSEIL: Le Golf.
27126 M. BUREAU: Pardon?
27127 LA PRÉSIDENTE DU CONSEIL: Le Golf et
le Speed, dans des niches très précises.
27128 M. BUREAU: En effet, tellement
précises qu'on ne les voit pas dans les BBM. Mais de
toute façon, ce sont les seuls cas où le Conseil a jugé
qu'étant donné que personne ne les voulait -- que
personne n'était prêt à prendre le risque de lancer un
service tellement pointu -- qu'à ce moment-là le
Conseil a autorisé ces services-là on ne s'objecte pas
à ça. On pense justement que la politique actuelle est
excellente. On veut qu'elle soit maintenue comme elle
est et on dit simplement quand on arrive du côté
français, on devrait avoir la même approche, on devrait
regarder les services existants, ou ceux qui veulent
venir, s'assurer que les services canadiens de langue
française occupent le terrain les premiers, qu'ils
importent de partout, que ce soit d'Angleterre, de
France, des États-Unis ou d'ailleurs, les meilleurs
programmes, qu'ils fassent partie de la grille du
service canadien, et puis s'il y a des cas où les
services canadiens il n'y a personne qui vous demande
de licence pour ces services-là bien à ce moment-là on
importera des services étrangers de façon à ce que les
Canadiens partout aient accès à ce qu'il y a de mieux.
27129 Mais aujourd'hui avec les demandes
que vous avez devant vous pour des services numériques
de langue française, je ne sais pas si on a un très
grand besoin, mais je n'entrerai pas là-dedans. Je
pense qu'au moins on a la démonstration au niveau de ce
processus, dans lequel vous êtes impliqués et nous
aussi, de voir qu'il y a de l'intérêt pour occuper le
terrain dans des niches très petites. Quand on regarde
l'exiguïté du marché de langue française, c'est assez
étonnant de voir le nombre de demandes qui sont devant
27130 Mais je dis, si au-delà de ça, quand
vous allez rendre votre décision, quand vous allez
décider du nombre de services qui doivent obtenir une
licence, qui méritent d'obtenir une licence en langue
française, s'il reste des thèmes qui ne sont pas
couverts par ces services-là et qu'il y en a qui
existent déjà ailleurs, je ne pense pas qu'il y a de
problème à les laisser entrer mais ils ne sont pas en
concurrence à ce moment-là et surtout -- ce n'est pas
qu'une question de concurrence, encore une fois -- ils
ne seront pas dans une position pour fermer la valve,
nous alimentant en programmation dans ces thèmes-là
parce qu'il n'y en aura pas, ici au Canada, qui
dépendent de ça.
27131 LA PRÉSIDENTE DU CONSEIL: Mais
reprenons ça. Admettons l'hypothèse où la politique
est maintenue. Comment peut-on, dans la mesure où
cette politique est maintenue, mais toutefois que le
principe est accepté, et vous l'admettez, qu'il y
aurait possibilité -- et il ne s'agit pas de fermer une
porte de coffre-fort pour empêcher des services
27132 Quelles seraient à ce moment-là les
modalités qui permettraient de -- quelles seraient les
considérations parce qu'il demeure quand même -- et
puis je reviens avec A&E, l'exemple étant que A&E est
sur la liste d'éligibilité. Par ailleurs, beaucoup des
émissions qui sont diffusées par A&E se retrouvent dans
d'autres formes présentées de façons différentes, même
en langue française d'ailleurs. Prenons les séries
Biographie, on les a sous d'autres visages.
27133 Là où j'ai de la difficulté -- et
c'est mon ignorance certainement, mais c'est important
pour le dossier public -- en quoi, tout à coup,
lorsqu'on est dans le domaine francophone ou dans
l'espace francophone, y-aurait-il un univers qui soit
blanc ou noir dans la mesure où s'il y avait un service
étranger de langue française -- parce qu'on va
reconnaître qu'à part TV5 il n'y en a pas. Même TV5
est un service canadien qui se veut l'expression du
meilleur de l'expression francophone. On sait qu'il y
a bien des choses qui échappent parce que justement une
question des droits empêche de pouvoir avoir accès à ce
qui serait souhaité par le comité de programmes
27134 En quoi la question des droits en
langue française se différencie tellement qu'on ne
pourrait pas retrouver la possibilité d'avoir un marché
français, avoir un marché américain, comme il semble y
avoir -- et je sais qu'on a parlé beaucoup d'une
tendance maintenant à avoir un marché nord-américain
qui ne souhaiterait plus distinguer le Canada, mais on
s'aperçoit -- enfin, on a des opinions et des
admissions un peu différentes à ce chapitre-là.
Certains radiodiffuseurs nous disent, "Ce n'est pas
vraiment le cas, au contraire".
27135 M. BUREAU: Votre question est très
bonne, Madame la Présidente.
--- Rires / Laughter
27136 LA PRÉSIDENTE DU CONSEIL: Vos
réponses aussi, Monsieur Bureau, sont très, très
--- Rires / Laughter
27137 M. BUREAU: Elle a de multiples
facettes. Je vais essayer de les prendre une par
une -- et je vais peut-être en oublier, vous me les
27138 Mais il ne faut pas oublier que les
services de langue française qui sont diffusés -- enfin
je ne parle pas des services conventionnels. Je parle
des services thématiques, c'est surtout ceux-là que je
connais. Alors je vais essayer de me limiter à cette
27139 Les services thématiques en France,
ils sont comme les services thématiques au Canada. Ils
ne sont pas comme les services thématiques américains
dans le sens que leur programmation, elle aussi, est
tributaire de programmes étrangers. Autrement dit, si
on importe ici au Canada un des services thématiques de
France, on importe un service dans lequel, bien sûr, il
va y avoir de la production originale française, mais
il y a aussi beaucoup de programmes qui proviennent de
l'étranger, de l'Angleterre et des États-Unis si bien
que ce n'est pas la même chose que du côté américain.
Si du côté américain on parle de ESPN, on parle de
n'importe lequel des services américains, c'est en très
grande partie -- à part A&E qui achète beaucoup à
l'extérieur -- c'est en très grande partie des
27140 Quand on va du côté français, par
exemple -- je ne veux pas prendre un service en
particulier parce que ce n'est pas le forum. On le
fera plus tard. Mais qu'on prenne n'importe quel
service français, ce sont des services qui comportent
une grande partie de programmes américains ou de
programmes de la BBC ou de choses comme ça, si bien
qu'on en arrive à cette situation assez étrange que
nous autres on a besoin d'acheter des programmes
étrangers, que ce soit de France, d'Angleterre ou des
États-Unis, et ces gens-là les détiennent pour
l'Europe. Ce n'est pas rien que leurs programmes
français de France. C'est tout l'ensemble des
27141 Alors la problématique au niveau de
la question que vous posez en ce sens que comment ça se
fait qu'on est pas capables de répliquer ou de faire le
parallèle avec ce qu'on fait aux États-Unis, c'est que
aux États-Unis on a un marché où ils produisent
quasiment à 100 pour cent leurs programmes -- ou qu'ils
achètent, mais en tout cas -- et que donc quand on les
importe ici on importe quelque chose qui est
27142 Quand on veut acheter des programmes
ou qu'on pense, pardon, à l'importation d'un service de
France, on pense à un service qui est semblable au
nôtre, qui comportent dans sa grille des émissions qui
viennent d'un peu partout. Alors l'impact au niveau
des droits est bien différent. Quand on importe un
service américain, ces programmes ne sont pas ailleurs,
ils ne proviennent pas d'une autre source où on peut
aller les acheter. Ils proviennent de la station ou du
service lui-même. Tandis qu'en France, quand une
chaîne veut venir au Canada, il y a peut-être 50 pour
cent de sa grille qui est faite de programmes dont la
source est extérieure et si eux autres achètent les
droits de ces programmes-là on n'y a plus accès nous et
on en a besoin dans la portion étrangère, programmes
étrangers, de notre propre grille.
27143 Bon, je pense que je n'ai pas été
27144 LA PRÉSIDENTE DU CONSEIL: Oui, vous
--- Rires / Laughter
27145 LA PRÉSIDENTE DU CONSEIL: Oui, oui,
vous êtes clair. C'est peut-être moi qui a la
compréhension pas claire. Ce n'est pas vous qui n'êtes
pas clair. Mais je comprends bien et je pense que
M. Roy expliquait ça lorsqu'il était avec nous la
semaine passée, ou l'autre semaine, comment, en effet,
les chaînes françaises ne sont pas que françaises.
Elles ont comme nous un reflet de l'ensemble, mais je
ne vois pas comment la question de droits devient
différente parce qu'aussi ce dont on parle ce sont les
questions de doublage aussi. Ce que vous dites c'est
que quand ça transite ç'a été acheté par les chaînes
françaises. Ils achètent des droits plus larges que ce
que nous pourrions -- c'est ça que je ne comprends pas,
en quoi c'est différent. Si on parle d'une émission
américaine qui passe là, en quoi est-ce différent
qu'une émission française?
27146 M. BUREAU: Je pense que la
différence c'est que l'émission américaine elle
apparient à 100 pour cent au service américain. Alors
quand on l'achète, on l'achète point et on s'en vient
avec et on fait la traduction ou le doublage et on
repart chez nous.
27147 Quand on veut acheter une émission
qui est déjà en français, disponible dans le marché
français de France, ou bien ils ont les droits
internationaux et là ils décident s'ils nous les
vendent ou pas, ou bien ils ont des droits pour le
territoire de la France et ils décident de garder la
version française, le doublage français, et nous autres
on va aller acheter le programme lui-même à la BBC ou
ailleurs, pour pouvoir l'importer ici et on fera le
doublage qu'on voudra à ce moment-là. Mais ça c'est en
l'absence de la venue de services. On vous parle de
problèmes auxquels on fait face déjà, même en l'absence
de la venue de ces services-là chez nous. Ils ont déjà
un certain contrôle sur notre approvisionnement.
27148 Ce que je dis, c'est que si en plus
de ça on va plus loin, et puis on dit, "Le service
lui-même est disponible au Canada". A partir de ce
moment-là, il faut qu'ils aient les droits pour être
distribué au Canada.
27149 La tentation, le bon sens, la logique
pour eux c'est d'acheter les droits internationaux, ou
d'acheter au moins les droits territoriaux pour
l'Europe et pour le Canada et à ce moment-là pourquoi
est-ce qu'ils nous feraient le plaisir de nous laisser
la possibilité d'acheter ces programmes-là? D'abord,
même s'ils le faisaient, même s'ils disaient, "On les
achète non-exclusivement" pour essayer de continuer à
nous donner accès à ça, bien là à ce moment-là on dit,
"Quelle sorte de diversité qu'on va avoir si on a le
même programme sur le service français et le programme
qu'on achète pour notre propre service?". L'élément de
diversité est amoindri considérablement.
27150 Ce qu'on essaie de voir c'est comment
dans la pratique on peut s'organiser pour avoir un
système canadien fort avec les meilleures émissions
possible et qu'on ait pas quelque part, quelqu'un qui a
le pouvoir de fermer le robinet sur l'approvisionnement
chez nous en produits de grande qualité.
27151 On ne veut pas être obligés d'acheter
de la seconde qualité.
27152 LA PRÉSIDENTE DU CONSEIL: Mais
pourquoi -- et je comprends bien la question de la
diversité. Ça c'est une question, et la question
éventuellement de mesurer mieux les chevauchements
dépendant des projets, c'est une autre question.
27153 Mais en quoi la question des
droits -- pourquoi les Français ne voudraient-ils pas
avoir des occasions d'affaires aussi nombreuses que les
Américains ont voulues en multipliant leurs
possibilités d'avoir des fenêtres...
27154 M. BUREAU: C'est tout à fait normal,
c'est tout à fait raisonnable qu'ils aient ce
raisonnement-là. Mais moi je dis pourquoi est-ce qu'il
n'y aurait pas les mêmes conditions pour eux qu'on a
pour les Américains? Je ne vois pourquoi que pour les
Français on ferait des conditions plus faciles pour eux
pour entrer dans notre territoire qui est déjà tout
petit, dans lequel on a déjà un peu plus de misère,
pourquoi est-ce qu'on leur ferait ça? Qu'est-ce qu'on
27155 LA PRÉSIDENTE DU CONSEIL: Nos
racines, Monsieur Bureau.
27156 M. BUREAU: Nos racines, ouais!
--- Rires / Laughter
27157 M. BUREAU: Mais, Madame la
Présidente, moi je les aime bien, mais les Français ils
nous ont déjà volé un couple de services qu'ils sont
venus copier ici et qu'ils ont lancés en France sans
notre contribution. On a offert de participer avec eux
et on s'est fait jouer le tour deux fois déjà -- et je
peux nommer les services si vous voulez. Alors à
partir de ce moment-là, moi je n'ai pas du tout de
préoccupation pour dire, "Ces pauvres Français,
pourquoi est-ce qu'on ne leur donne pas la chance à des
conditions plus favorables?". Je ne vois aucune raison
pour ça. Je dis qu'ils aient les mêmes conditions que
les autres, point à la ligne.
27158 LA PRÉSIDENTE DU CONSEIL: Mais dans
les faits, les marchés francophones n'ont aucun service
étranger de langue française sauf ce qui est amené via,
bien sûr, la programmation des services canadiens,
incluant TV5 et, bien sûr, Les Chaînes Astral.
27159 M. BUREAU: Oui, et puis? Ce n'est
pas de notre faute si en France ils ne sont pas
--- Rires / Laughter
27160 M. BUREAU: Quand ils auront des
services qu'on n'a pas, et pour lesquels on n'a pas
fait de demande, on les accueillera à bras ouverts.
27161 Madame Bertrand, je ne suis pas gêné
d'aller comparer ce qu'on a ici avec ce qui se passe en
France. Je pense qu'on a ici un ensemble de services
dont on doit être pas mal fiers. Selon la taille de
notre marché, ce n'est pas mal extraordinaire. Si en
France on est capables d'identifier des
services --encore une fois, on n'est pas contre -- qui
n'ont pas leur correspondance ici, on devrait les
avoir. C'est ça qui est fondamental.
27162 C'est la raison pour laquelle au fil
des ans on n'a pas importé beaucoup de services,
indépendamment là de la transmission elle-même de TF1,
par exemple, qu'on voudrait tous avoir ici, et des gens
d'Antenne 2 ou d'autres comme ça, des services
conventionnels. Ça je pense, comme vous, que c'est le
genre de choses où on aurait probablement avantage à
avoir la réciproque de ce qui existe avec les
27163 Quand on arrive au niveau des
services spécialisés, on est au moins aussi développés
qu'eux autres, sinon plus, et à partir de ce moment-là,
ils ont commencé après nous, Madame la Présidente, si
bien que, effectivement, le fait qu'ils ne soient pas
ici n'a rien d'autre qu'un facteur historique. On
était là avant eux autres, on l'a fait avant eux
27164 Aujourd'hui, s'ils sont capables
d'arriver avec des services qu'on n'a pas, pour quelle
que raison que ce soit, bravo!
27165 LA PRÉSIDENTE DU CONSEIL: Mais à ce
27166 M. BUREAU: Et aux mêmes conditions
que les autres.
27167 LA PRÉSIDENTE DU CONSEIL: Mais à ce
moment-ci, Monsieur Bureau, dans la mesure où les
chaînes satellites aussi en France se développent parce
qu'ils ont découvert la magie d'un certain choix -- je
ne sais pas si les téléspectateurs les suivront, mais
enfin, ils ont plus de choix qu'ils ont déjà eu. On
peut imaginer qu'ils vont continuer à les développer.
Si éventuellement, en suivant votre raisonnement, ce
que je comprends c'est que vous avez un regard
différent pour les chaînes conventionnelles que pour
les chaînes spécialisées. J'avoue que ça...
27168 M. BUREAU: Bien moi c'est peut-être
parce que je ne connais pas ça.
27169 LA PRÉSIDENTE DU CONSEIL: Parce que
la question des droits ça sera la même chose.
27170 M. BUREAU: Oui, mais ça je laisse à
TVA de venir en parler, s'ils le veulent. Ils vous ont
déjà fait part de leurs commentaires et je suis sûr
qu'il y a des problèmes qui se posent de cet ordre-là
aussi. Moi je n'aurais pas dû faire ce commentaire-là
du côté des chaînes conventionnelles. Je connais moins
ça. Je connais plus la situation au niveau des chaînes
thématiques, et s'il vous plaît, ramenez-moi dans ce
27171 LA PRÉSIDENTE DU CONSEIL: Je vous
ramène dans le chemin des canaux spécialisés.
27172 M. BUREAU: ... pour parler des
canaux spécialisés parce que de l'autre côté je ne suis
pas en mesure de vous en parler.
27173 LA PRÉSIDENTE DU CONSEIL: Je
poursuis puis ça sera mes questions finales. Si, avec
un foisonnement qu'on espère réussi du côté français de
chaînes qui pourraient venir compléter l'offre
canadienne en langue française, quelles seraient, selon
vous, les mesures qui devraient être mises de l'avant?
Est-ce qu'on devrait avoir des mesures particulières ou
des mesures semblables à celles qu'on a eues? Vous
parliez tantôt, par exemple, de substitutions
simultanées qu'on a établies par rapport aux chaînes
conventionnelles de langue anglaise pour à tout le
moins maximiser la situation des revenus publicitaires.
27174 Est-ce que vous voyez si on laisse
entrer des chaînes dans l'esprit de la politique, des
mesures à mettre en place pour maximiser d'une part
l'offre au consommateur, parce que c'est de ça dont on
27175 M. BUREAU: Absolument.
27176 LA PRÉSIDENTE DU CONSEIL: Je
comprends très bien que d'un point de vue d'entreprise
qui gère et qui détient des chaînes spécialisées, il y
a des questions qui se posent, mais du point de vue du
consommateur de langue française, il y a aussi des
questions qui se posent. Et puis je comprends bien,
vous dites que les chaînes spécialisés sont en avance
au Canada. Elles ont choisi le meilleur des émissions,
mais il demeure que dans l'esprit et dans le travail
quotidien, ou enfin dans l'acte quotidien du
consommateur, lui il ne choisit pas. Le choix a été
fait pour lui. Il est dépendant du choix fait pour
lui, qui commence avec le Conseil, je le reconnais.
27177 M. BUREAU: Écoutez, Madame Bertrand,
la situation en français ne devrait pas être différente
de la situation du côté anglophone. Nous sommes tout à
fait d'accord pour laisser venir chez nous des choix
additionnels qui ne sont pas concurrents avec les
services existants en français, comme c'est la
politique du côté anglais. On ne voit pas pourquoi
dans un marché plus petit, on aurait des règles plus
larges, plus ouvertes que du côté anglophone.
27178 Mais ceci étant dit, si on peut nous
faire la démonstration que ces services-là sont des
services différents des nôtres, et qu'ils ne causeront
pas de problèmes au niveau de l'approvisionnement des
programmes pour les chaînes canadiennes existantes, à
partir de ce moment-là, bravo, bienvenue et
immédiatement -- non, pas immédiatement là, mais selon
le processus normal -- qu'ils soient acceptés ici,
qu'ils soient distribués. Tant mieux, tant mieux, il
n'y aucun problème de ce côté-là, mais on ne voit pas
pourquoi il y aurait des règles spéciales.
27179 Maintenant la règle de la
substitution simultanée risque d'être très
problématique, comme vous le savez déjà, non seulement
parce que sur le plan technologique il peut y avoir des
problèmes -- sur le plan technique -- mais aussi sur le
plan des droits parce que, encore une fois, les chaînes
européennes ne sont pas à 100 pour cent françaises. Il
y a une partie de leur programmation qui est française,
une partie de leur programmation qui est étrangère.
Bon, alors pour essayer d'organiser la diffusion
simultanée de programmes dont ils ne sont pas les
propriétaires à la source qu'ils mettent dans leur
grille sans qu'on le sache, à toutes fins utiles, c'est
une situation bien différente de l'achat de programmes
de la part de la source elle-même aux États-Unis.
27180 Alors donc il se pose non seulement
des problèmes techniques mais aussi d'autres problèmes
pratiques pour assurer que la substitution simultanée
puisse être mise en place.
27181 Alors je ne pense pas que la
substitution simultanée soit le remède dans ce cas-là,
d'autant plus que dès qu'on parle de substitution
simultanée on veut dire qu'il y a moins de diversité de
programmes. Et donc je ne pense pas que ce soit la
formule, je ne pense que cette règle-là puisse jouer le
jeu qu'elle joue du côté des chaînes conventionnelles
27182 Moi je dis qu'appliquons les mêmes
règles que du côté anglais. C'est tout ce que je
demande. C'est tout ce que je dis. On ne vient pas
demander de resserrer les règles. On ne vient pas
empêcher ce qui est permis du côté anglophone. On
vient tout simplement vous dire qu'on pense qu'il n'y a
pas de raison d'élargir les règles pour les émissions
de langue française ou les services de langue
27183 LA PRÉSIDENTE DU CONSEIL: Mais vous
27184 M. BUREAU: Et on ajoute la dimension
internationale, Madame Bertrand, parce que chaque fois
qu'on dit, "Est-ce qu'on ne devrait pas à cause du
marché, de son étroitesse ou de l'absence de ces
services-là, est-ce qu'on ne devrait pas trouver une
façon de faciliter l'entrée de ces services-là?".
27185 Nous vous alertons en disant,
attention, parce que la minute que vous allez avoir des
règles différentes par rapport à des produits étrangers
pour le rentrer au Canada, on risque de se retrouver
dans la situation où les Américains vont dire, "Moi
aussi je veux ces règles-là", et qu'à ce moment-là,
parce qu'ils sont exemptés en vertu du NAFTA, ils vont
pouvoir exercer des mesures de représailles. On ne
veut pas se retrouver là-dedans. On sait qui gagne et
qui perd dans ces affaires-là.
27186 Alors le premier geste qu'on va poser
de ce côté-là pour avoir des règles différentes avec
les Français par rapport à leur entrée ici, par rapport
aux Américains, on va l'avoir derrière la tête, et puis
vite, de la part des Américains.
27187 Alors donc il ne faut pas se leurrer.
Si on le fait du côté français, on va avoir le même
problème du côté de langue anglaise.
27188 LA PRÉSIDENTE DU CONSEIL: Mais vous
comprenez, par ailleurs, Monsieur Bureau, quand vous
dites, "On ne demande de rien de plus différent au
marché francophone que ce qui existe au marché
anglophone", il demeure que dans les faits il y a une
différence et il y en a toujours eu une différence au
sens où on a toujours compris au Canada le fait d'une
communauté, de communautés plus petites, et que donc on
a pris des mesures qui permettaient une croissance au
rythme des réalités francophones, et dans les faits
aujourd'hui, si je suis consommatrice de télévision,
les émissions de langue française je les ai toutes à
travers le filtre d'un diffuseur canadien, ce qui n'est
pas le cas en langue anglaise.
27189 Alors quand vous parlez de
l'équivalence de la règle, elle est vraie d'un point de
vue pour vous d'Astral, d'un canal spécialisé, mais
quand on le regarde du point de vue des téléspectateurs
et de son offre, elle est différente.
27190 M. BUREAU: Vous avez raison et ça ne
tient pas rien qu'à nous, ça tient à l'absence de
services étrangers de langue française qui pourraient
entrer chez nous aux mêmes conditions qu'on a laissé
entrer chez nous les services américains. Ce n'est pas
de notre faute.
27191 LA PRÉSIDENTE DU CONSEIL: Je ne vous
27192 M. BUREAU: J'ai l'impression à un
moment donné d'être coincé, mais ce n'est pas de notre
faute si les Français...
27193 LA PRÉSIDENTE DU CONSEIL: Non, mais
c'est important que nous comprenions ce qu'a été la
démarche parce qu'il est vrai que dans le marché il y a
cette absence-là, et quand vous dites, "Donnez-nous la
même chose qu'en anglais ou laissez au marché
francophone... on ne devrait pas faire l'exception à
l'inverse", c'est vrai dans la démarche réglementaire,
si on veut, mais au niveau du téléspectateur, au niveau
du consommateur, lui ou elle a l'impression de ne pas
avoir eu le choix, ou le même choix, que le
27194 M. BUREAU: Je vais demander à mon
releveur de venir, mais je continue à pratiquer et je
--- Rires / Laughter
27195 M. HOULE: Comme le disait André,
Madame la Présidente, si il y a moins -- de fait il n'y
a pas de services étrangers de langue française ou très
peu qui sont actuellement distribués, c'est pour des
raisons historiques qui n'ont rien à voir avec la
nature de la politique mais avec le fait que les
chaînes thématiques se sont développées en France
beaucoup plus tardivement qu'ici.
27196 Tout ce qu'on dit c'est
qu'effectivement là on assiste avec le développement
des satellites à une éclosion de chaînes thématiques
françaises. Donc tout ce qu'on dit c'est que
maintenant il y a une offre qui pourrait venir ici et
que cette offre devrait, maintenant qu'elle peut
exister, être traitée de la même façon que l'offre
américaine a été traitée au Canada anglais, elle
devrait donner les mêmes résultats.
27197 Tout ce que nous disons c'est que si
le Conseil juge qu'il n'est pas opportun, comme il l'a
fait historiquement, d'autoriser un service américain
pour enfants directement concurrent avec un service
canadien pour enfants ou d'autoriser un service de
musique vidéo Country américain, et cetera, il devrait
avoir la même préoccupation exactement avec les
services français au moment où il y a maintenant une
diversité de services de langue française et ils
peuvent faire des demandes.
27198 Évidement si des services étrangers
ne font pas la demande, ni vous ni nous n'y pouvons
rien et c'est la situation historique qui s'est passée
et qui n'avait rien à voir avec la nature de la
27199 Donc on pense que la politique est
toujours le bon outil dans le nouveau contexte qui
émerge du fait qu'en France maintenant, et en Europe en
général, il y a des bouquets de chaînes thématiques
beaucoup plus nombreux et on dit que dans cette
situation-là la meilleure façon de faire face à cette
nouvelle situation c'est toujours d'adopter la même
politique du côté français que du côté anglais.
27200 LA PRÉSIDENTE DU CONSEIL: C'est ça
que vous vouliez dire?
27201 M. BUREAU: C'est ça que je voulais
--- Rires / Laughter
27202 LA PRÉSIDENTE DU CONSEIL: Merci
beaucoup. Moi ça complète mes questions. Merci.
27203 LA PRÉSIDENTE: Monsieur Bureau,
est-ce que certaines de revendications que vous faites
s'appliqueraient aussi si nous importions au Canada,
par exemple, des chaînes de langue anglaise qui ne sont
pas Américaines et qui incluraient probablement de la
programmation américaine aussi?
27204 M. BUREAU: Madame Wylie, c'est rendu
que je suis en train de faire des revendications. J'ai
dit au début qu'on ne demande rien d'autre que le
maintien de la politique. Mais pour répondre plus
spécifiquement à votre question, la même règle devrait
s'appliquer. Les mêmes règles devraient s'appliquer
pour tout le monde. On ne voit pas l'utilité de
changer les règles à l'heure actuelle parce qu'elles
fonctionnent bien, parce que tout le monde les connaît,
parce que, effectivement, elles ont permis d'ajouter à
l'offre et elles ont permis en même temps d'assurer que
les services canadiens dont on est tous très fiers
fonctionnent bien et on est fiers vraiment parce qu'on
regarde les cotes d'écoute de ces services-là -- je ne
parle pas des nôtres, je parle en général -- et ça
27205 Alors oui, les mêmes règles devraient
s'appliquer pour les services étrangers de langue
anglaise provenant d'autres pays en fonction de votre
politique actuelle. Oui, oui, les mêmes politiques ou
la même politique...
27206 LA PRÉSIDENTE: Non, ma question
était plutôt est-ce que les problèmes de droits, parce
que ces chaînes-là seraient constituées sensément de
programmation américaine de langue anglaise aussi.
Est-ce que ça ne causerait pas -- parce qu'ici, comme
Mme Bertrand relevait évidement, il s'agit de chaînes
américaines, ou des chaînes de langue anglaise, alors
si c'était des chaînes, par exemple, très développées
de langue anglaise...
27207 M. BUREAU: D'Angleterre.
27208 LA PRÉSIDENTE: Britanniques ou
d'autres pays de langue anglaise, comme l'Australie
dont l'approvisionnement serait aussi en partie des
chaînes américaines, vous verriez un problème...
27209 M. BUREAU: On verrait le même
problème que du côté français, sans doute, parce que,
effectivement, leur combinaison de programmes est comme
les programmes qui sont faits en France -- comme les
chaînes, pardon, qui sont faites en France.
27210 On aurait probablement les mêmes
problèmes, mais ça il va falloir les regarder une par
une en fait pour voir si effectivement elles risquent
de créer un problème soit au niveau des droits ou
ultimement de la concurrence.
27211 LA PRÉSIDENTE: Oui, je relevais que
c'était un problème en sus du problème de concurrence
dans le genre.
27212 M. BUREAU: Oui.
27213 LA PRÉSIDENTE: C'est un problème de
27214 M. BUREAU: Absolument.
27215 LA PRÉSIDENTE: .. qui est très
particulier à la situation...
27216 M. BUREAU: C'est vraiment le
27217 LA PRÉSIDENTE: ... de tout le
monde -- pas tout le monde, mais certainement une large
partie du monde font provision aux États-Unis. Donc ça
cause un problème.
27218 M. BUREAU: Vous avez raison. On a
dit tout à l'heure que ce n'était pas fondamentalement
le seul problème de la concurrence. C'était plus
fondamentalement le problème de l'approvisionnement en
programmes qui était l'enjeu dans ce cas-ci.
27219 LA PRÉSIDENTE: Et qui est qu'on
semble pouvoir, jusqu'à maintenant au Canada, gérer
quand ce sont des droits américains plus facilement.
27220 M. BUREAU: Oui, parce qu'on a établi
au Canada un marché distinct et on a toujours insisté
pour ça, pour dire, le marché canadien est un marché
distinct et on ne laissera personne entrer ici ou avoir
les droits canadiens et nous empêcher d'y avoir accès.
Et on a pris toutes les mesures pour essayer de
protéger ce marché canadien. C'est fondamentalement le
problème auquel on a à faire face, et nous disons,
votre politique actuelle, la façon dont vous la mettez
en place, a d'une part permis l'entrée d'ajouts
intéressants à notre programmation et d'autre part
permis de protéger ce marché canadien. Et on dit qu'il
n'y a pas de raisons pour lesquelles on verrait qu'il
faut la modifier à ce moment-ci.
27221 LA PRÉSIDENTE: Monsieur Bureau, le
document que vous avez proposé, déposé, est-ce que
c'est un document qui est accessible facilement?
27222 M. BUREAU: C'est une étude qui avait
été faite par Michel Houle pour le Ministère du
patrimoine. Alors c'est un document qui est un
document public. Ce n'est pas un document confidentiel
pas du tout.
27223 LA PRÉSIDENTE: Ou propriétaire. Il
est accessible facilement.
27224 M. BUREAU: Oui, oui.
27225 LA PRÉSIDENTE: Merci.
27226 Nous vous remercions, Monsieur
Bureau, Monsieur Houle, et...
27227 M. BUREAU: Merci.
27228 LA PRÉSIDENTE: ... Madame Émond.
27229 M. HOULE: Merci.
27230 LA PRÉSIDENTE: Monsieur le
Secrétaire, s'il vous plaît.
27231 M. CUSSONS: Merci, Madame la
27232 La prochaine intervention, Télévision
Française 1, TF1.
INTERVENTION / INTERVENTION
27233 Me HYLTON: Bonjour, Madame Wylie.
27234 Moi je m'appelle John Hylton, un
avocat de Toronto avec Borden Ladner Gervais et avec
moi aujourd'hui, à ma gauche, Mme Letitia de Giacomoni,
conseiller juridique de TF1, un diffuseur privé en
France. Elle vient d'arriver hier soir assez tard.
27235 Aussi je peux indiquer que Mme de
Giacomoni représente RFO, ça veut Radio-France
Outremer, une chaîne, et aussi France-2 et 3 des
27236 Avec nous aussi Maîtres François
Rioux et Geneviève Bergeron, avocats de Borden Ladner
Gervais à Montréal.
27237 Si je peux commencer, Madame, je
voudrais bien indiquer un peu la question devant nous
aujourd'hui et pour ça si je peux parler en anglais.
27238 This is a narrow issue in the sense
that it is a question of geography -- and a rather
strange question of geography. As indicated in our
presentation, TF1 has authorized Radio-France Outremer,
RFO, to distribute its signals and TF1 acquires the
rights for its programming to be broadcast in France.
27239 Radio-France Outremer has the mandate
to distribute its programming overseas and as it
happens part of the territories of France, as you well
know, are in St-Pierre-et-Miquelon and these signals,
again through geography, can be picked up over the air
in Newfoundland and these are captured by licence SRDUs
in Newfoundland and redistribute it.
27240 It is that perhaps accident of
geography that we are talking to today and in doing
that we are asking, perhaps quite simply, that the
Commission could solve the problem that is created by
the distribution of the programming of TF1 throughout
Canada by imposing an obligation on those who pick up
its signal to request its permission. That has been
done before. It is not a particularly difficult task
for the CRTC and I think I can indicate to the
Commission that over the years the Commission has not
hesitated where there has been an anomaly, perhaps one
created by geography alone, to work on solutions to
27241 For example, KCND of North Dakota,
eventually became CKND. Windsor, South of Detroit, has
had special problems and required special solutions and
rules. Bellingham in Washington State was exploiting
the market in Vancouver, special rules developed for
that. And going way back, the cable companies in
Calais, Maine, and Sault Ste. Marie were cut off from
27242 So it's not so unusual to ask for a
solution that is in the public interest when there is
some particularly unique situation which has developed.
27243 I would just like to indicate that
the problem is one that perhaps turns on issues
relating to the distribution of program rights and
consequently is not one that is easily solved, but it
is one, I think, that the Commission can address.
27244 If I may then ask for some comment
from Mme de Giacomoni.
27245 Madame, s'il vous plaît.
27246 Me de GIACOMONI: Madame la
Présidente, Madame et Messieurs les Conseillers.
27247 Je représente donc aujourd'hui TF1
ainsi que RFO et France-2, France-3. Je vais peut-être
expliquer ce qu'est RFO. RFO est la voie de la France
en outremer, notamment pour vous à
St-Pierre-et-Miquelon. TF1, chaîne privée -- première
chaîne privée en Europe -- ainsi que les chaînes de
services publics françaises, France-2 et France-3, ont
l'obligation de par leur cahier de charges de donner
gratuitement, d'offrir des programmes -- l'intégralité,
si RFO le souhaite, de ces programmes pour que les
Français en outremer puissent avoir la même télévision
que les Français en métropole.
27248 Contrairement à ce qui se passe
certainement au niveau des chaînes thématiques, TF1,
chaîne généraliste, achète le plus fréquemment ses
droits uniquement pour la France et les territoires
d'outremer et en aucun cas des droits monde et vraiment
pratiquement jamais pour le Canada, notamment face aux
"major" américaines pour les films, le cinéma, mais
même face à des producteurs français qui veulent se
garder les droits hors France.
27249 Le problème est donc le suivant.
TF1, en respectant son obligation de transmission de
ses programmes à RFO, et en se voyant exproprié son
signal à St-Pierre-et-Miquelon, voit ses programmes au
départ ne devant être diffusés que sur les territoires
français, diffusés sur le territoire canadien en toute
27250 Je vais rappeler que l'intention de
TF1, France-2, France-3 et RFO n'est nullement de
priver les téléspectateurs canadiens de programmes en
langue française dès lors que l'accord préalable des
ayants droit aura été obtenu. Le problème principal
est donc un problème juridique d'obtention de ces
droits pour le Canada que nous ne détenons pas.
27251 Me HYLTON: Maître Rioux.
27252 Me RIOUX: Si je peux poser le
problème comme suit en terme du régime actuel
d'attribution de licences qui a été mis sur pied par le
Conseil pour les entreprises de distribution par les
satellites, ce serait le suivant. Les problèmes qui
sont perçus par TF1 et RFO peuvent entraîner des
effets, selon nous, sur les producteurs canadiens qui
seraient néfastes et préjudiciables à l'intérêt public
comme suit -- et ces audiences sont une occasion, selon
nous, pour que le Conseil se penche sur ces problèmes
créés par la rediffusion par satellite, par relais
satellite, à Pointe May, à Terre-Neuve, d'émissions qui
originent de la France.
27253 Alors essentiellement ce que nous
voudrions souligner au Conseil c'est l'absence
d'obligations de la part de ces entreprises qui
diffusent par relais satellite de conclure des
arrangements contractuels avec les ayants droit
étrangers qui sont les producteurs des programmes ou de
la programmation qui est rediffusée en territoire
canadien par les entreprises de distribution par relais
27254 Alors ce régime-là qui n'exige par
que des arrangements contractuels soient conclus, selon
nous décourage le marché canadien, les producteurs
canadiens de langue française, d'exporter leur
programmation vers la France. La raison est comme
suit. C'est que si les producteurs canadiens de langue
française exportent leur programmation en France ces
programmes reviennent au Canada par l'entremise des
entreprises de distribution par relais satellite et
aucun droit n'est payé pour les producteurs canadiens
de langue française qui, jusqu'à la venue de ces
entreprises-là, pouvaient compter sur le paiement de
royautés lorsqu'ils vendaient leur programmation en
27255 Aussi, le régime actuel, selon nous,
décourage la prise de convention de coproductions entre
des chaînes françaises et des producteurs canadiens de
langue française, comme il est décrit dans nos
commentaires écrits. La raison est comme suit. C'est
que ces travaux qui sont co-produits sont à leur tour,
lorsque distribués en France, retransmis au Canada par
l'entremise des entreprises de distribution par relais
satellite sans qu'il y ait de paiements ou de
compensation payée aux ayants droit producteurs
canadiens ou français.
27256 De sorte que ces deux effets-là ne
peuvent que contribuer à décourager la production
d'émissions originales canadiennes de langue française
par des producteurs canadiens, et donc nous comprenons
que ce serait contre l'intérêt public tel que décrit
dans la Loi sur la radiodiffusion pour le Conseil
d'encourager ce régime-là de continuer étant donné que
ça rend la vie beaucoup plus difficile aux producteurs
canadiens de langue française de produire des
programmes originaux au Canada.
27257 Sans parler, bien sûr, des préjudices
qui sont causés aux producteurs étrangers dont les
travaux sont rediffusés au Canada sans paiement de
royautés et qui causent préjudice, bien sûr, aux
27258 En somme, cette importation de
programmation étrangère de langue française par relais
satellite sans compensation équivaut à une
expropriation de droits et de droits qui seraient
payables aux producteurs canadiens de langue française
et aux producteurs français et a l'effet pervers de
décourager, selon nous, la production d'émissions de
langue française originales par des Canadiens.
27259 Donc, nous suggérons que le Conseil
devrait considérer sérieusement cette question dans les
présentes auditions et considérer possiblement
convoquer une audition à l'avenir pour discuter de
cette question où les traités internationaux et les
droits d'auteur seraient également au menu, et où les
intervenants étrangers et canadiens pourraient exprimer
leur point de vue sur cette question.
27260 Pour finir, bien cette situation est
d'autant plus surprenante pour nous puisque le régime
antérieur, lorsque le Conseil était appelé a émettre
des licences pour la diffusion de programmation
étrangère, antérieurement la diffusion par satellite,
exigeait que le diffuseur canadien obtienne les
arrangements contractuels appropriés avec les ayants
droit des travaux à l'étranger, ce qui n'est pas le cas
à l'heure actuelle pour les entreprises de distribution
par relais satellite.
27261 C'était mes commentaires. Je vous
remercie de votre attention.
27262 LA PRÉSIDENTE: Je vous remercie,
Monsieur Hylton, Madame de Giacomoni, et Maître Rioux.
27263 Le Conseiller Demers, s'il vous
27264 CONSEILLER DEMERS: Bonjour, Monsieur
27265 J'ai très peu de questions mais
peut-être pour faire le lien -- ça va en français,
27266 Me HYLTON: Oui.
27267 CONSEILLER DEMERS: Préférez-vous que
27268 Me HYLTON: Bien entendu.
27269 CONSEILLER DEMERS: Pour faire le
lien avec ce que disait M. Bureau tout à l'heure, vous
représentez un radiodiffuser conventionnel.
27270 Me de GIACOMONI: Je pense que ce que
vous appelez conventionnel c'est public. En fait, on
est tous conventionnés que ce soit radiodiffuser privé
ou public, nous sommes tous conventionnés par
l'équivalent du CRTC qui s'appelle le CSA. On a tous
une convention avec le CSA.
27271 CONSEILLER DEMERS: Est-ce que vous
vous considérez comme chaîne spécialisée tel qu'on
27272 Me de GIACOMONI: Nous sommes une
27273 CONSEILLER DEMERS: Merci.
27274 Si j'ai bien compris, votre demande
enfin c'est d'avoir un processus subséquent au
processus actuel, en fait une décision et votre demande
est à l'effet une suite procédurale à votre demande.
Vous référez, évidement, à des questions importantes
comme l'expropriation d'oeuvres et que la politique du
Conseil serait la raison pour laquelle il y aurait
cette expropriation de droits.
27275 Vous indiquez aussi qu'il devrait y
avoir des ententes. Est-ce qu'il en existe? Est-ce
que c'est à ça que Me Hylton faisait référence
lorsqu'il parlait de Bellingham, par exemple, ou de
Calais, Maine, Sault Ste-Marie?
27276 MR. HYLTON: In this particular case,
I would ask Madam de Giacomoni to follow the chain of
the various rights which are causing the problem.
There are contractual agreements and the result of the
signal being received over the air from
St-Pierre-et-Miquelon is that these agreements are
being breached and I would just ask Madam de Giacomoni
to speak to that.
27277 Me de GIACOMONI: La réglementation
française oblige TF1 à ne produire que très peu
d'oeuvres en interne. Pour simplifier, seules les
émissions d'information sont des émissions 100 pour
cent produites en interne, donc sans problèmes de
droits. Tout le reste sont des oeuvres qui sont soit
achetées le plus majoritairement, soit co-produites,
donc où toutes la problématique des droits reprend sa
27278 Comme je l'expliquais tout à l'heure,
face aux "major" américaines on n'a pas le pouvoir
économique de négocier autre chose que les droits
France et même en matière de coproductions de grande
envergure européenne très souvent on a l'Europe mais
27279 Même en matière d'achats de droits,
notamment d'achats de droits d'émissions de variétés,
de fiction, on n'achète que des droits France, on n'a
que ce pouvoir économique-là.
27280 CONSEILLER DEMERS: Est-ce que j'ai
bien compris que s'il devait y avoir des négociations
pour les droits, ce ne serait pas TF1 ou RFO qui sont
les détenteurs de ces droits-là.
27281 Me de GIACOMONI: Non, il faudrait
qu'on les renégocie, qu'on arrive à les négocier au cas
par cas et qu'on revoie notre politique pour l'avenir
pour les autres coproductions, les autres achats de
droits. Ce serait du cas par cas.
27282 CONSEILLER DEMERS: C'est ça. Alors
la personne au Canada qui voudrait les rediffuser
devrait retrouver les propriétaires des droits
27283 Me de GIACOMONI: Oui, c'est ça.
27284 CONSEILLER DEMERS: Merci beaucoup.
27285 Je n'ai pas d'autres questions,
Madame la Présidente.
27286 LA PRÉSIDENTE: Madame Bertrand.
27287 LA PRÉSIDENTE DU CONSEIL: Il y a une
chose que je ne comprenais pas très bien. La
représentation ce matin se fait par rapport à RFO mais
sur TF1 seulement? Le problème n'est pas là pour
France-2 et France-3?
27288 Me de GIACOMONI: En fait, RFO est un
diffuseur très spécifique qui est alimenté en
programmes de TF1, de France-2 et de France-3.
27289 LA PRÉSIDENTE DU CONSEIL: Oui.
27290 Me de GIACOMONI: C'est à ce
titre-là, en fait, que je représente à la fois le pool
privé qui est TF1 et le pool public composé de RFO qui
a une mission de diffusion que sur les DTOM,
départements et territoires d'outremer, et France-2 et
France-3 pour le public, diffuseur public.
27291 LA PRÉSIDENTE DU CONSEIL: Donc vous
représentez RFO ce matin et non pas TF1 uniquement.
C'est que j'avais...
27292 Me de GIACOMONI: Bien je représente
TF1, RFO, France-2 et France-3 mais je suis moi même
conseiller juridique à TF1.
27293 LA PRÉSIDENTE DU CONSEIL: D'accord.
27294 Me de GIACOMONI: Je suis salariée
27295 LA PRÉSIDENTE DU CONSEIL: D'accord.
27296 THE CHAIRPERSON: Mr. Hylton, in our
eligible list at the moment -- assuming I have the very
last edition which may not be the case because it
changes quite often -- would we find RFO on that list?
27297 MR. HYLTON: That's correct, yes.
27298 THE CHAIRPERSON: And doesn't it say
"In the case of signals received
from a licensed SRDU, ASN, the
CBC English and French-language
television services and U.S.
satellite services licensees are
required to enter into the
arrangements for such carriage".
27299 MR. HYLTON: I had understood that to
be the case and, therefore, if that is still the rule
then we don't have very much difficulty here if RFO is
required to give its consent. As I understand it, RFO
did consent at one time and then has withdrawn its
consent and consequently this has caused a particular
difficulty. I believe this was with CANCOM. In other
words, we had an arrangement between RFO and CANCOM at
the time. This application now by BCE is a new
application and to our knowledge there is no
27300 If the Commission has in force that
requirement -- and there was some difficulty on my part
to find out that it was in fact the present rule with
respect to the carriage of RFO -- then we may not have
a particular problem and RFO would have to give its
27301 THE CHAIRPERSON: Subject to this
having been abandoned in the currently applicable
list -- because unfortunately I don't have the last
version in and, as you know, it is altered fairly often
because services are added in, but right now at the one
I am looking at, in Mr. Grant's book -- unfortunately,
as I say, I don't have the very latest version -- there
is an asterisk besides RFO which indicates that it is
received from a licensed SRDU and then authorization
for the above noted services is subject to the
following, and I read you what the rule was.
27302 I leave it to you to check whether
this is still in the very last version of the list.
27303 MR. HYLTON: I want to make the point
too that I would like to be assured that it doesn't
just cover the reception by the cable companies, but
that it covers the reception by the SRDUs.
27304 The reason I say that is that the
uniqueness of our situation is that the signal can be
received over the air in Newfoundland. That is the
geographic uniqueness, so that if there was a cable
company sitting at Point May in Newfoundland, it could
27305 THE CHAIRPERSON: Your problem would
then be narrowed to a small population base.
27306 MR. HYLTON: Indeed, you are
absolutely right, and in this particular case, as we
understand it and subject to what we will hear later,
we believe that the SRDUs are picking that signal up
from Point May which causes distribution throughout
27307 THE CHAIRPERSON: But what I read you
addresses the cable companies who receive signals from
a licence SRDU.
27308 MR. HYLTON: Yes, and it that is in
good standing and if both the companies ExpressVu and
CANCOM are in agreement with that, then my
understanding is that they do not have the necessary
27309 THE CHAIRPERSON: It should give you
some work in the next month or so.
27310 MR. HYLTON: It should give TF1 some
relief, Madam, I hope.
27311 THE CHAIRPERSON: Depending on your
skills at addressing the problem.
27312 MR. HYLTON: Yes.
27313 THE CHAIRPERSON: These are our
27314 We thank you very much.
27315 Oui, allez-y.
27316 Me de GIACOMONI: Je voulais juste
préciser. Au niveau de l'entente entre CANCOM et RFO
que cette entente était soumise à une condition
suspensive d'obtention d'autorisation des ayants droit
et cette condition, cette consigne n'ayant pas été
obtenue, l'entente était devenue caduque au moment où
CANCOM l'a fait valoir auprès du CRTC.
27317 C'était très clair dans la
27318 LA PRÉSIDENTE: Nous vous remercions,
Madame de Giacomoni, et nous vous souhaitons la
bienvenue au Canada. Vous ne repartez pas dès
27319 Me de GIACOMONI: Demain.
27320 LA PRÉSIDENTE: Demain? Alors vous
ne pourrez pas voir tout le pays.
27321 Me de GIACOMONI: Non.
27322 LA PRÉSIDENTE: Merci. Merci,
27323 Me de GIACOMONI: Merci beaucoup.
27324 LA PRÉSIDENTE: Monsieur le
Secrétaire, s'il vous plaît.
27325 M. CUSSONS: Merci, Madame la
27326 Le prochain intervenant, BCE Media
27327 LA PRÉSIDENTE: Good morning et
allez-y quand vous êtes prêts.
--- Pause / Pause
INTERVENTION / INTERVENTION
27328 M. RACINE: Mesdames les Présidentes,
Mesdames et Messieurs les Conseillers, bonjour.
27329 Je me présente. Paul Racine, premier
vice-président, programmation française de BCE Media.
27330 M'accompagnent ce matin, à ma droite
Frédéric Vinzia, directeur général de MultiThématiques
qui représente aujourd'hui le service français Planète
et à ma gauche, Serge Lamagnère, directeur du
département audiovisuel et du développement de Media
Overseas qui agit ici à titre d'agent des chaînes
françaises et européennes, EuroNews, Paris-Première,
Muzzik et Tropic. Et plus à ma droite, Luc Martineau,
27331 Multithématiques est le plus
important éditeur de chaînes thématiques en Europe.
Media Overseas est un distributeur satellitaire
français opérant dans les Caraïbes, l'Océan Indien, le
Pacifique, l'Amérique du Sud et bientôt les États-Unis.
27332 BCE Media salue l'initiative du
Conseil d'examiner la possibilité d'autoriser de
nouveaux services internationaux de langue française
aux fins d'accroître la disponibilité et la diversité
des émissions de langue française au Canada. Trois
raisons principales militent, selon nous, en faveur de
27333 Tout d'abord, cela est important pour
assurer une diversité culturelle francophone au Canada.
Il va de soi que la diversité culturelle ne doit pas
d'office exclure la francophonie internationale.
27334 Lorsqu'on consulte la liste des
services autorisés pour distribution au Canada on
retrouve un très grand nombre de services étrangers
surtout américains mais aussi allemand, japonais,
philippin, polonais, russe, et le seul service étranger
francophone autorisé est RFO.
27335 La deuxième raison est d'ordre
technologique. Les progrès de la technologie numérique
permettent en effet l'importation maintenant de
produits étrangers francophones en plus grand nombre et
à prix abordable. Ces services sont déjà présents dans
les Caraïbes et seront bientôt disponibles ailleurs aux
Amériques, dont aux États-Unis.
27336 Il serait dommage que les
francophones et les francophiles des États-Unis aient
accès à certains de ces services avant les francophones
27337 La troisième raison qui milite en
faveur d'une ouverture plus grande envers les services
étrangers francophones c'est que leur importation passe
forcément par un partenariat entre exportateurs
français et importateurs canadiens.
27338 Ce partenariat a des conséquences
positives à plusieurs points de vue. Il permet de
choisir les signaux les plus complémentaires à l'offre
canadienne déjà existante. Il permet d'exercer un
certain contrôle de la nature de la programmation et
ouvre également des perspectives d'expansion nouvelle
pour nos producteurs.
27339 Je vais maintenant examiner plus en
détail ce troisième point en commençant par une
définition de la notion de concurrence directe entre
services étrangers et services canadiens. Selon nous,
pour qu'il y ait concurrence directe trois conditions
27340 Premièrement, le service devrait
porter principalement sur le même genre d'émissions.
Deuxièmement, le traitement de la thématique serait
largement similaire, et troisièmement, le public-cible
devrait être le même ou très similaire.
27341 Ces trois critères devraient être
cumulatifs. Prenons l'exemple d'un service européen
d'information continue comme, par exemple, EuroNews --
un bel exemple. Si l'information sélectionnée est
analysée dans une perspective principalement européenne
ou s'il s'agit uniquement d'images d'actualité
commentées par une voix hors champs, dans un tel cas,
on pourrait dire qu'il n'y aurait aucune concurrence
directe puisque le traitement de la thématique serait
différent. La clé serait la complémentarité.
27342 D'autre part, nous sommes sensibles
aux réalités commerciales particulières du marché
canadien de langue française, spécialement la question
des droits de programmation. Aussi, nous proposons que
les candidats à l'ajout assurent le Conseil que les
droits de programmation pour le Canada seront libérés.
De plus, ces services s'engageront, ainsi que le
Conseil l'a proposé dans son avis public CRTC 2000-6, à
ne pas détenir ou exercer des droits de programmation
préférentiels ou exclusifs en rapport avec la
distribution d'émissions au Canada.
27343 Nos partenaires sont prêts à prendre
de tels engagements qui devraient assurer qu'aucun
programmeur canadien ne se verra interdire l'accès à un
programme et nous nous porterons garants de tels
27344 Maintenant, je passe la parole à
27345 M. VINZIA: Merci, Paul.
27346 Mesdames les Présidentes, Mesdames et
Messieurs les Conseillers.
27347 MultiThématiques est très fière de
s'associer avec BCE Media pour proposer l'ajout aux
listes de la chaîne Planète et est prête à prendre les
deux engagements que Paul vient de mentionner.
27348 D'emblée, je voudrais souligner que
la programmation de Planète sera spécialement adaptée
pour le marché canadien de langue française. En effet,
notre position d'éditeur de chaînes thématiques nous
permet de commercialiser et d'exporter un service
international qui sera très différencié de l'offre des
entreprises de programmation canadiennes.
27349 Nous veillerons avec beaucoup de
soins à ce que tous les droits soient libérés pour le
Canada. La querelle dont fait état nos amis de TF1 au
sujet de la captation au Canada du signal RFO ne risque
donc pas de se produire ici.
27350 Je tiens aussi à préciser que le
marché des droits audiovisuels concernant le genre
documentaire est un marché très ouvert qui se
matérialise chaque année par de nombreuses rencontres,
des marchés et des festivals internationaux. Les
droits de diffusion se négocient pour chaque pays,
territoire par territoire. Les catalogues offrent
aussi une très grande variété. Chaque année à travers
le monde c'est près d'une dizaine de milliers d'heures
qui sont produites par l'ensemble des producteurs et
proposées ainsi aux diffuseurs.
27351 Les craintes d'éviction ou de
surenchère soulevées par certains intervenants nous
apparaissent donc singulièrement disproportionnées,
d'autant plus que nous nous engageons formellement à ne
pas détenir ou exercer des droits préférentiels ou
exclusifs pour le Canada.
27352 Soyez également assurés que nous
respecterons scrupuleusement les fenêtres d'exclusivité
générées par les accords de coproduction impliquant des
entreprises canadiennes de production ou de diffusion.
Ainsi, ces dernières pourront continuer à diffuser en
primeur sur le territoire canadien les programmes
co-produits avec d'autres pays.
27353 En terminant, je me permets de vous
rappeler que c'est grâce au dynamisme de seulement une
vingtaine d'employés que Planète est devenue
aujourd'hui la première chaîne documentaire dans le
monde francophone. Aussi, après douze ans d'efforts
concertés, nous sommes très heureux de souligner que
Planète est diffusée en France, en Belgique, en Suisse,
en Italie, en Pologne et en Afrique francophone
subsaharienne et que 80 pour cent de sa programmation
est en première diffusion.
27354 Si je me permets d'insister sur ce
réseau international c'est que nous invitons les
producteurs canadiens intéressés à nouer avec nous des
accords de production et de distribution ce qui leur
procurera de nouveaux débouchés internationaux.
27355 Et je laisse maintenant la parole à
mon ami Serge.
27356 M. LAMAGNÈRE: Merci, Frédéric.
27357 Media Overseas représente les chaînes
EuroNews, Paris-Première, Muzzik et Tropic. Media
Overseas veillera à ce que tous les droits soient
libérés pour le Canada et vérifiera également que ces
chaînes ne puissent détenir ou exercer de droits de
programmation préférentiels ou exclusifs pour le
Canada. A ce chapitre, en acquérant des droits de
programmation non exclusifs pour le Canada, nous
n'avons aucun désir ni intérêt à verser des primes aux
ayants droit, ni à faire de la surenchère ou à vouloir
exclure des entreprises canadiennes.
27358 Seulement quelques remarques
27359 D'abord, notre participation à titre
d'actionnaire de Canal Évasion nous permet de miser sur
les synergies de nos partenaires canadiens pour élargir
l'espace de l'univers francophone canadien et
international grâce à notre réseau satellitaire
27360 Déjà, nous étudions la possibilité de
distribuer Canal Évasion l'année prochaine et d'autres
signaux canadiens dans le cadre de nos bouquets
27361 Deuxièmement, je ne crois pas que
l'arrivée au Canada des services que nous proposons, et
que nous comptons notamment distribuer aux États-Unis,
représente une menace pour l'industrie canadienne. La
programmation très largement européenne de ces services
ne bloquera d'aucune manière la fluidité des droits.
De plus, peu de films, sinon aucun, sont diffusés par
27362 Je laisse à Paul le mot de la fin.
27363 M. RACINE: L'ajout de nouvelles
chaînes francophones internationales de qualité à un
prix abordable et disponibles en mode numérique et
analogique enrichira incontestablement l'offre de
services de langue française et constituera une valeur
27364 L'autorisation de nouveaux services
étrangers de langue française assurera un meilleur
équilibre entre les services de langue française et les
services de langue anglaise, répondant ainsi au voeu
formulé par le Conseil en mai 1999 lorsqu'il a créé un
deuxième volet francophone. Cette mesure permettra
aussi de mieux desservir les petits systèmes, quoi
qu'on en dise, ainsi que le minorités francophones hors
27365 De plus, l'ajout de ces nouveaux
services stimulera notre industrie de la production et
de la distribution. Des occasions de nouveaux
partenariats et des débouchés prometteurs seront ainsi
générés pour la diffusion de nos produits audiovisuels
sur la scène internationale.
27366 Les engagements que nous proposons
répondent à l'ensemble des préoccupations exprimées par
le Conseil et divers intervenants à propos de
l'importation, notamment sur la question des droits.
27367 En terminant, il nous apparaît
souhaitable que l'autorisation de nouveaux services
étrangers de langue française fasse l'objet d'une
décision le plus tôt possible de façon à conférer aux
distributeurs canadiens une flexibilité accrue dans
l'assemblage de nouveaux bouquets distinctifs et
27368 Merci de votre attention et nous
serons heureux de répondre à vos questions.
27369 LA PRÉSIDENTE: Merci, Monsieur
Racine, et vos collègues.
27370 Et aujourd'hui et dans votre
intervention écrite, il semble que vous recherchez une
27371 On a entendu ce matin M. Bureau nous
dire qu'il ne recherchait aucun changement à la
politique qui existe en ce moment, qui constitue à ne
pas permettre la distribution de services étrangers
lorsqu'ils sont directement en concurrence avec ceux
qui sont déjà accessibles sur le territoire canadien et
qui sont canadiens.
27372 Au paragraphe 7 vous parlez justement
d'une exception, très clairement vous utilisez le mot
"exception" dans votre intervention écrite, mais au
paragraphe 24, et encore ce matin dans votre
présentation, vous établissez des barèmes quand même
qui devraient être utilisés pour déterminer si un
service devrait être autorisé pour la distribution au
27373 Je n'ai pas eu le temps de les
examiner exactement, mais je suppose que ce sont les
27374 M. RACINE: Oui.
27375 LA PRÉSIDENTE: Alors donc vous
acceptez qu'il devrait y avoir des barèmes ou des
critères quelconques et ça semble basé sur la
27376 M. RACINE: Oui.
27377 LA PRÉSIDENTE: Ce que j'aimerais que
vous nous expliquiez c'est quelle est la différence
puisqu'il s'agit d'exceptions mais que vous acceptez
qu'il devrait y avoir des barèmes, quelle est la
différence entre la politique du Conseil et les barèmes
élaborés à la page 3 de votre présentation et au
paragraphe 24 de votre intervention?
27378 M. RACINE: Madame, lorsque nous
parlons d'exception, il s'agissait tout d'abord de
savoir s'il convenait d'ouvrir la porte à des services
étrangers à ce moment-ci.
27379 Nous croyons, nous, que oui, il y a
lieu d'ouvrir la porte à des services internationaux
francophones à ce moment-ci, que le moment est
particulièrement bien choisi de le faire au moment où
des programmateurs auront à leur disposition en mode
numérique toute une série de nouveaux services et nous
croyons que ça serait bien de pouvoir aussi enrichir,
avoir une valeur ajoutée en ayant des services
internationaux francophones disponibles.
27380 Autrefois, le critère était qu'il y
ait des concurrences, je pense, en tout ou en partie.
Dans l'avis que vous avez émis sur les services
numériques, on parle de concurrence directe. Nous
disons que le critère de concurrence, en tout ou en
partie, franchement c'est quelque chose dans l'univers
où nous sommes avec la multiplication des services qui
est un barème très difficile à maintenir à la lettre et
puis la concurrence directe -- et nous essayons de
l'encadrer parce qu'on sait très bien que ça prête à
interprétation, nous essayons de l'encadrer avec ces
critères-là -- nous croyons que c'est un peu plus
27381 C'est clair que les services
étrangers devraient être complémentaires, devraient
enrichir mais je donnais l'exemple de EuroNews. C'est
clair qu'il y a des services de nouvelles continues qui
sont distribués sur le marché canadien, alors la
nouvelle, c'est la nouvelle, c'est la nouvelle.
Cependant, ce qui est nouveau, ce qui est différent
dans ce service-là c'est la façon, le point de vue et
la formule qui est utilisée.
27382 Alors on dit simplement, on propose
des critères pour encadrer la définition de concurrence
directe pour aider le Conseil à déterminer s'il s'agit
vraiment de quelque chose qui est complémentaire ou de
quelque chose qui va être directement concurrentiel.
27383 Il existe déjà dans les services
existants qui ont été approuvés, que ce soit en
français et en anglais, des recoupements. Il y a des
recoupements dans de nombreux domaines parmi les
services qui existent en ce moment. On le sait, dans
le domaine que quelqu'un mentionnait, les Biographies,
on en retrouve dans tout. On en retrouve dans les
services d'information, on en retrouve dans les
services d'histoire, on en retrouve dans d'autres
27384 Alors qu'il y ait des recoupements à
l'occasion, nous ne croyons pas que ça devrait être le
facteur qui disqualifie automatiquement un service.
27385 LA PRÉSIDENTE: Mais par exemple,
EuroNews, si j'utilise vos critères, le même genre
27386 M. RACINE: Bien ce sont des
27387 LA PRÉSIDENTE: Troisièmement le
27388 M. RACINE: Ce sont les gens qui
aiment les informations.
27389 LA PRÉSIDENTE: Alors à ce moment-là
vous vous accrocheriez sur ce que le traitement de la
thématique ne serait pas similaire.
27390 M. RACINE: Oui. C'est un exemple un
peu extrême parce que dans le cas de l'information
vraiment c'est la même matière brute carrément. On
peut avoir bien des sortes de genres de documentaires
sur plusieurs sujets mais quand on est dans
l'information pour prendre cet exemple-là c'est
vraiment la même matière brute pour tout le monde.
Alors dans ce cas-là la différence c'est la formule.
On pourrait faire aussi des discussions sur la musique.
La musique c'est la musique, mais il y a différents
genres de musique, il y a différentes catégories de
27391 LA PRÉSIDENTE: Donc au départ vous
êtes d'accord qu'on continue à utiliser la politique
qui servirait à trouver si oui ou non il y a
complémentarité aux concurrences, mais vous établissez
des barèmes qui, si on les appliquait comme vous les
comprenez, créeraient une exception. Nous aurions des
barèmes différents en examinant cette question au
Canada en langue française qu'en langue anglaise qui, à
ce moment-là, justifierait le mot "exception" au
27392 M. RACINE: Oui, si vous me demandez
si on devrait faire une différence entre les services
de langue anglaise et de langue française, absolument,
27393 Voici pourquoi. C'est très clair.
On regarde les listes. On voit très bien que pour des
raisons historiques qu'on peut comprendre tous les
services de langue anglaise de quelle qu'importance que
ce soit sont déjà présentes sur les listes. Je dois
dire aussi que historiquement ce n'est pas uniquement
dû à la politique du Conseil. On sait très bien qu'un
grand nombre de ces services-là ont été
"grand-pèrisés", étaient déjà là, on les a maintenus.
27394 Dans les services nouveaux ou plus
récents qui ont été approuvés, je pense à, je ne sais
pas BBC World, c'est un bel exemple. Alors là de toute
évidence ça doit retoucher quelques-uns des domaines
qui sont traités par nos services d'information Canada
mais c'est une formule différente, un esprit différent.
27395 Alors en anglais je pense que tous
les services sont là. J'ai remarqué hier, je pense que
c'est Mme Logan qui disait, elle disait, "Vous savez,
pour les nouveaux services canadiens, je ne vois pas
beaucoup de services étrangers locomotives dont on
aurait besoin". Je pense qu'elle a parfaitement
raison. En anglais ils sont déjà tous là sur les
listes et ils sont déjà présents.
27396 En français, à l'exception de RFO, il
n'y a rien. Il n'y a rien pour des raisons historiques
qu'on comprend très bien. Il y a des raisons
technologiques, des raisons financières qui ont été
résolues, mais le fait est que nous partons avec peu de
27397 Cependant, l'occasion nouvelle est
offerte de le faire maintenant et c'est un marché
international qui est en train de se créer, un marché
international francophone qui est en train de se créer,
et nous pouvons, nous, rester chez nous puis dire,
"Bien, non, nos règles de protection qui ont si bien
marché dans le passé, qui ont marché, qui ont créé un
fort secteur francophone au Canada, devraient continuer
comme ça". Mais je pense que nous avons intérêt à
regarder vers l'avenir.
27398 Le passé était très, très bien décrit
ce matin. Je pense qu'on a intérêt aussi à regarder
vers l'avenir et aux possibilités d'avenir, d'ouverture
de marché et de complémentarité et aussi de
collaboration. Alors voilà.
27399 LA PRÉSIDENTE: Est-ce que vous
rejoignez l'argumentation de M. Bureau quand vous dites
que les critères appliqués doivent être plus flexibles?
La part de son argumentation qui est, nous n'en avons
pas parce qu'il n'y en n'a pas qui sont différents, si
on ne peut pas appliquer les mêmes critères qu'au
Canada anglais, pourquoi? Est-ce que la flexibilité
est requise parce que, de fait, il n'y a pas de
services que nous n'avons pas, ce qui, je crois, a été
un de ses arguments?
27400 M. RACINE: C'est aussi un peu le
mien. C'est qu'à l'étape où nous sommes rendus du
développement du système audiovisuel au Canada et en
France, je ne vois pas, à moins de choses très, très
précises qui ne me viennent pas l'esprit, je pense que
dans l'ensemble, ils ont un peu l'équivalent de ce
qu'on peut avoir ici.
27401 Ce n'est pas vraiment ça, je pense,
la raison d'importer des systèmes européens, des
systèmes français internationaux ici.
27402 La principale raison c'est qu'ils
peuvent offrir... Je suis d'accord, vous savez, que ça
ne soit pas directement compétitif. Il ne faut quand
même pas exagérer.
27403 Ce qu'on essaie de faire ici, ce
qu'on a essayé de vous présenter ce matin, c'est un
point d'équilibre entre présenter quelque chose de
différent, présenter quelque chose de complémentaire,
présenter quelque chose d'enrichissant qui ne vienne
pas tout saborder dans le système canadien. C'est
pourquoi vous avez vu que nous avons porté une
attention particulièrement grande à la question des
droits pour s'assurer qu'il n'y ait pas d'avantage indu
par ces soi-disants colosses européens.
27404 Mais dans ce contexte-là, c'est un
point d'équilibre que nous essayons d'établir.
27405 LA PRÉSIDENTE: Monsieur Racine,
quand vous parlez de la nécessité de libérer les droits
pour le Canada, est-ce que ce n'est pas une des
inquiétudes du Groupe Astral? Justement, c'est que le
besoin de libérer les droits pour le Canada enchaînera,
justement, un problème de droits pour l'acquisition de
programmation dans le futur.
27406 M. RACINE: Bien justement, c'est
pour nous adresser directement à cette inquiétude-là
que nous avons souscrit à une proposition, je pense, du
Conseil, pour que les droits qui seront acquis pour le
Canada ne soient pas exclusifs.
27407 Alors quand il n'y a pas
d'exclusivité sur un marché, c'est très difficile de
procéder par paiements de primes ou de se faire
attribuer des escomptes. Qu'est-ce que vous voulez?
Vous n'avez pas l'exclusivité, vous n'avez aucun
intérêt à avoir recours à ces outils traditionnels du
colosse qui veut dominer le marché.
27408 Frédéric, je pourrais vous laisser
élaborer à ce sujet-là.
27409 M. VINZIA: Oui, je pourrais
compléter la réponse de Paul sur la fluidité des droits
et sur le danger de l'appréhension de droits canadiens
qui serait prise par des entreprises françaises.
27410 N'oublions pas que sur un certain
nombre de domaines de gens, nous intervenons au niveau
international sur un marché très, très ouvert avec, en
termes de stocks de droits, un nombre assez
considérable d'heures qui ont été produites. Ceci est
d'autant plus évident pour, par exemple, des domaines
qui ne sont pas liés à l'actualité. C'est-à-dire que
ces stocks de droits peuvent être régulièrement
ré-utilisés ou diffusés à partir de productions des
années antérieures, ce qui nous donne une très, très
grande latitude et très grande marge de manoeuvre dans
la programmation, et on peut établir une sorte de code
de bonne conduite avec les diffuseurs locaux pour
intervenir en toute complémentarité dans la
27411 Et l'effet de surenchère, moi, je
crois que ça paraît limité dans la mesure où en plus,
il est assez rare de pouvoir dégager des droits en
version linguistique. Je m'explique.
27412 L'habitude -- enfin, d'après la
pratique que je peux avoir depuis une douzaine d'années
sur ce terrain-là, la pratique des acquisitions est
plus -- de la part, d'ailleurs, des détenteurs de
droits -- plus orientée vers une politique
d'acquisition par territoire et non pas par version
linguistique. C'est-à-dire qu'un détenteur de droits
aura plus souvent l'occasion de vendre un droit pour la
France et un droit pour la Belgique, alors qu'il
pourrait très bien faire une vente "package".
27413 Pourquoi il est plus intéressé par ce
système-là? Eh bien, parce qu'il espère que un plus un
fera, dans ce cas-là, plutôt trois que deux.
C'est-à-dire qu'il maximisera sa recette alors que s'il
le vendait par "package", il aura, en général, --
enfin, il peut avoir en général une recette moindre.
D'ailleurs c'est une politique que les détenteurs de
droits américains connaissent bien en Europe. Ils ne
concèdent que très rarement un droit linguistique.
27414 Vous avez les "major" européennes sur
les films. Eh bien, ils ont un représentant en France,
ils ont un représentant en Belgique et ils ont un
représentant en Suisse, et ces derniers ne détiennent
que des droits territoriaux et non pas les droits de la
version linguistique. Le même phénomène peut
évidemment se produire pour le Canada.
27415 LA PRÉSIDENTE: Je comprends votre
engagement sur l'acquisition de droits exclusifs, mais
il reste quand même que même si c'est territorial, je
crois qu'un des arguments est que si -- les droits vont
être très difficiles à obtenir pour le Canada si la
programmation est déjà transportée par l'entremise d'un
service qui est sur la liste canadienne éligible avec
les droits libérés pour le Canada. Je crois que
c'était un des arguments que si les droits sont achetés
pour le territoire français et le territoire canadien,
même si ce n'est pas pour le monde, cette
programmation-là est quand même au Canada avec les
droits libérés et un des arguments est que ça rend tout
à fait difficile à une titulaire canadienne d'obtenir
les droits pour cette même programmation.
27416 M. RACINE: Oui, je devrais préciser
ici quelque chose avant de passer la parole à Frédéric.
C'est que les signaux d'importation dont nous parlons,
ce sont des signaux qui seront préparés pour
l'exportation. Il y a un certain nombre d'émissions
qui seront retirées pour l'exportation, notamment des
émissions américaines ou des choses comme ça, et les
émissions qui seront programmées le seront
spécifiquement pour des marchés internationaux.
27417 Nous avons indiqué que nous n'étions
pas du tout opposés à ce que des Canadiens puissent
acquérir des droits, et si c'était le cas, je pense que
nos partenaires nous ont indiqué qu'ils seraient très
heureux de tenir compte des achats opérés par des
27419 LA PRÉSIDENTE: Voilà, ce serait ces
27420 Maintenant, est-ce que vous proposez
qu'il y aurait une condition rattachée à l'exportation
de tous services à cet effet? Parce que, quand même,
nous avons devant nous aujourd'hui certains services.
27421 M. RACINE: Là, évidemment, vous
savez que nous avons déposé des demandes pour cinq
services. Alors nous avons discuté avec les
responsables de ces services-là.
27422 Pour ces services-là, nous pouvons
nous porter garants que les choses se passeront comme
je viens de vous le décrire.
27423 Est-ce que ça doit être une condition
générale? Est-ce que ça serait... Je vais demander au
directeur de la plus importante chaîne multithématique
de France si ça serait...
27424 M. VINZIA: Je ne peux... A ce
stade-là de l'audition, je ne peux pas prendre
l'engagement au nom de mes collègues français. Ils ne
m'ont pas mandaté pour les représenter devant votre
27425 Je vais dire très pratiquement et
très prosaïquement qu'en fonction des opportunités de
diffusion que pouvait proposer le territoire canadien,
des accords spécifiques pourraient tout à fait entrer
dans ce cadre-là. Et je dirais là aussi, thématique
par thématique, ou service spécialisé par service
spécialisé, en fonction, justement, du domaine traité,
on pourrait arriver encore à ce que je nommais tout à
l'heure un code de bonne conduite avec les diffuseurs
canadiens dans un souci d'équilibre, parce qu'il ne
serait bon pour personne de se lancer dans une
surenchère imbécile de droits.
27426 Nous ne venons pas ici en rouleau
compresseur pour essayer d'imposer un modèle ou un
système. Nous essayons tout simplement d'élargir la
possibilité de diffusion de nos programmes à partir
d'un territoire qui nous semble bien complémentaire
avec le nôtre.
27427 LA PRÉSIDENTE: Monsieur Racine,
voilà une question bien canadienne.
27428 M. RACINE: Oui.
27429 LA PRÉSIDENTE: Vous nous dites qu'il
devrait y avoir un meilleur équilibre entre les
services de langue française et les services de langue
anglaise, et ce serait probablement assez facile de
trouver ces mots-là dans nos documents à nous aussi.
27430 M. RACINE: Internationaux.
27431 LA PRÉSIDENTE: Et vous nous dites
aussi à la page deux, qu'il serait bien dommage que les
francophones et les francophiles des États-unis aient
accès à certains de ces services avant les francophones
27432 Etes-vous d'accord avec nous, par
exemple, et peut-être avec M. Bureau, que nous nous
devons de justement chercher un équilibre qui tient
compte de la réalité de la distribution des services au
Canada français et du désir de protéger ou nous assurer
que ces services canadiens ne soient pas -- n'aient pas
de désavantage indu quand nous essayons d'établir un
équilibre que nous nous devons d'équilibrer -- notre
désir d'équilibrer l'offre dans les deux, mais en
tenant compte des réalités, d'autres réalités.
27433 Je crois que l'article qui nous exige
expressément d'examiner la situation au Canada anglais
et au Canada français en ce qui implique la
radiodiffusion peut être utilisé à cet effet-là aussi,
de dire, on ne peut pas équilibrer les deux parce qu'il
y aurait un déséquilibre dans le tout.
27434 M. RACINE: Merci, madame de nous
donner cette excellente question.
--- Rires / Laughter
27435 M. RACINE: Je répondrai en trois
27436 Le déséquilibre qui existe auquel
j'ai fait allusion, je pense que c'est le déséquilibre
qui existe entre l'offre de produits étrangers en
anglais et l'offre de produits étrangers en français.
C'est clair que c'est 10 à zéro ou dix et demi. Alors,
c'est ça le déséquilibre.
27437 Le deuxième point c'est que ces
services étrangers, nous pensons, en les choisissant
bien puis en s'arrangeant pour qu'ils soient
complémentaires, ça peut être un enrichissement de la
programmation. Mais comme le disait bien M. Bureau
lui-même, ce n'est pas un danger pour la concurrence.
Personne ne croit, au Canada, qu'un service étranger
français va venir au Québec et va détruire un service
canadien. Personne ne croit ça. Et M. Bureau nous a
dit qu'il ne le croyait pas non plus. Alors je le
27438 Troisièmement, il nous a dit que la
vraie question, c'est la question des droits, que ça
c'était la question importante. Il a bien raison
27439 Je pourrais laisser mon collègue
Frédéric expliquer quel genre de colosse est Planète,
par exemple, mais disons que les assurances que nous
donnons quant à la possibilité pour les programmeurs
canadiens d'acheter les droits, les assurances que nous
donnons sur le fait que nous sommes d'accord avec le
Conseil pour ne pas acheter de droits exclusifs, les
assurances que nous donnons que les co-producteurs
canadiens auront le droit d'avoir une meilleure fenêtre
au Canada, qu'on ne viendra pas leur passer sur la tête
et venir dévaster leur marché, toutes ces
assurances-là, nous les avons mises sur la table
justement en pensant à la question des droits qui est
27440 Alors ces trois éléments-là étant
présents dans nos offres, je crois que ça devrait
démontrer que ce que nous cherchons, ce n'est pas de
jeter un gros pavé dans la marre, mais c'est plutôt que
d'ajouter de jolies fleurs aquatiques sur cette marre.
27441 LA PRÉSIDENTE: Monsieur Racine,
maintenant que vous avez reconnu la qualité d'une de
mes questions, j'abandonne!
--- Rires / Laughter
27442 LA PRÉSIDENTE: Conseiller Williams,
s'il vous plaît.
27443 COMMISSIONER WILLIAMS: Good morning,
Mr. Racine. I will ask my questions in English and
trust the interpreters to make the appropriate French
--- Rires / Laughter
27444 COMMISSIONER WILLIAMS: So let me
27445 MR. RACINE: I will try to trust my
27446 COMMISSIONER WILLIAMS: Earlier this
morning, Mr. Bureau of Astral raised the spectre of
U.S. and other foreign service providers taking
retaliatory measures. I think he specifically said, if
the Commission would relax its policy on the French
side, it's difficult to see how it could then resist
pressure from foreign services that would be seeking
the same treatment in the English language market.
27447 I guess I'm interested in your
comments on that point of view.
27448 MR. RACINE: As you know, the
Americans would like to see the whole broadcasting
policy of Canada go down the drain. It's been like
that for a long time. It's nothing new. Most of the
important signals, the ones they would like to export,
are already here on the market. There is not a more
open market in the world to all kinds of American
signals. I mean, it's so open, it's almost incredible.
I fail to see what more they would like to ask for.
27449 But what we're saying basically is
that the criteria that the Commission has proposed,
direct competition, is fine with us. I think it should
27450 I gave, this morning, a few points as
how it could be interpreted, because I believe that it
depends, you know, how you look at it. You can have a
very, very restrictive attitude and say, well, there
is, in this programming compared to this one, a few
similar programs, so that is to disqualify this signal.
27451 I believe that it should be a little
more flexible than that, and I gave the example of
EuroNews. EuroNews is a very good example, because --
and I could go into more detail about some musical
signals that we're proposing, but let's take EuroNews
because it's so crystal clear.
27452 I don't know if you have seen
EuroNews, how it's done. But basically, it's about
news. So the Soviet sub that sinks and what happens in
Israel -- the subject-matter is news. But the way they
treat it, the way it's presented with the European
perspective, with no on-air reporter but just
voice-over, quick graphics, I mean, it's quite
different. It's something different. It's a
contribution of 19 European countries. So I think it's
quite as distinctive, for instance, as BBC could be
27453 So I'm saying, in this particular
case, it should be pretty clear that it's not because
they are treating the same basic subject-matter that
they should be disqualified. It has to be a little
more flexible than that.
27454 But basically, my answer to your
question is that the criteria should be basically the
same. So if the Americans don't like that, well, it's
not the first thing they don't like about the CRTC, as
27455 COMMISSIONER WILLIAMS: I guess I
take it from that you would also support the
Commission's intention to invite applications for
auditions to the eligible satellite service lists in
respect to English language services soon after the
Category 1s have been licensed.
27456 MR. RACINE: Yes, absolutely. My
only point pertaining to the French services is that,
you know, in recent past, the CRTC licensed four analog
services. In that decision, they said, well, you can
enrich this new tier with French services,
international French services. There weren't any
available. So it was not done, despite the repeated
requests from distributors, small and big, who said,
oh, we would like to do that, we would like to be able
enrich this "volet" with international French services.
Do you have any? We didn't have any. Some used the
only one that was available at the time, which is RFO.
27457 We're saying that there's already
this need, unfulfilled on the analog side, and there
will certainly be a similar one which, I hope, will be
fulfilled on the digital side when the decision comes.
27458 COMMISSIONER WILLIAMS: Thank you
very much. I have no further questions.
27459 LA PRÉSIDENTE: Monsieur Racine, un
des exemples que vous avez utilisés, ce sont les
nouvelles. Il faut se rappeler... Moi, je crois
qu'une des raisons pour lesquelles on a CNN, par
exemple, c'est que les services de nouvelles se sont
déclarés expressément satisfaits qu'on garde le service
de nouvelles américain, qu'on le permette. Je ne crois
pas faire erreur en disant que expressément, les
requérants pour un service nouvelles ont justement dit
qu'il n'y avait pas de problème à ce que CNN soit
diffusé au Canada. C'est un des critères.
27460 Évidemment, ce n'est pas seulement
de... Il faut, même si nous appliquions notre examen
de concurrence, je crois que nous avons toujours aussi
pris en ligne de compte la possibilité que la
requérante soit satisfaite qu'un certain service qui
est finalement concurrentiel soit diffusé quand même.
Donc, il y a toujours eu, je crois, deux aspects, deux
volets à l'exercice.
27461 M. RACINE: Oui, je dois dire qu'en
ce qui concerne... Là, évidemment, aujourd'hui,
j'étais prêt à discuter les principes généraux, mais
cependant, en ce qui concerne, par exemple, ce domaine
particulier de l'information, on peut regarder, nous
avons fait des études comparatives entre les projets
qui sont proposés pour distribution au Canada et nous
allons incidemment verser ces études en appui à la
27462 Nous avons regardé quels étaient les
regroupements dans les programmations qui ne sont pas
très grandes, et là où il y avait -- en ce qui concerne
les nouvelles, il y a une tendance à la diminution. Et
nous avons déjà dit que toutes les informations, toutes
les émissions d'information qui sont rendues
disponibles en ce moment par Europe à des services
canadiens seraient maintenues sans problème. Même
s'ils veulent les augmenter, ils peuvent les augmenter,
ça va nous faire plaisir.
27463 Mais jamais les extraits qu'ils vont
prendre ne rendent compte de l'esprit et de la forme de
la chaîne. Ils donnent des extraits, mais ça n'a
vraiment rien à voir avec l'esprit de la chaîne en son
27464 Alors je suis conscient de ce que
vous dites, madame, et nous faisons ce que nous pouvons
pour nous assurer que ça ne dérange en aucune façon le
fonctionnement des chaînes existantes.
27465 LA PRÉSIDENTE: Madame Bernard.
27466 LA PRÉSIDENTE DU CONSEIL: Merci.
27467 J'avais trois questions à vous poser.
D'abord, vous parlez de la question des droits que vous
seriez prêts à reconnaître la politique, demander des
exceptions en créant plus de flexibilité alentour des
critères d'exceptions, et aussi de donner des garanties
quant à la non-exclusivité des droits dont il est
27468 Cependant, dans la réalité
d'affaires, ce n'est pas simplement l'accès, c'est le
coût auquel on peut avoir les droits. On sait que le
marché francophone étant plus petit, les équilibres de
coûts qui font en sorte qu'on puisse avoir une santé
financière qui permet, par ailleurs, la production
d'émissions canadiennes, l'encouragement et les
fenêtres nécessaires au talent canadien seraient donc
menacés d'une certaine façon si on ne peut pas en même
temps... Parce qu'on sait bien que le jour où la
concurrence joue, il demeurerait, j'imagine, que ces
services satellitaires ou ces chaînes thématiques-là
seraient intéressées à avoir des parts de marché.
Elles ne viennent pas ici, j'imagine, comme nous, si on
avait la chance d'être reçus par le CSA, j'imagine
qu'on ne veut pas aller sur les territoires simplement
dans un esprit de missionariat. On veut faire des
27469 Donc, dans la mesure où on a des
marchés plus petits ici au Canada qu'il en existe en
France, je comprends bien la question de
27470 Mais qu'en est-il de l'impact sur les
coûts qui immédiatement ont un impact sur les revenus
de ces chaînes-là qui ont des pourcentages liés à la
production canadienne? Est-ce qu'il n'y a pas un
danger d'amoindrir la capacité de faire qui est
vraiment l'essence du système de la réglementation
canadienne dans la Loi sur la radiodiffusion?
27471 M. VINZIA: Sur cette question, je
voudrais apporter deux considérations.
27472 D'abord, il ne faudrait pas
sous-estimer la taille du marché francophone canadien
par rapport à la réalité du marché des chaînes
thématiques franco-françaises. Les ordres de grandeur
sont assez comparables, aussi bizarre que cela puisse
paraître, puisqu'on évoque ici, je crois, pour une
chaîne thématique de langue française, un potentiel, je
crois, d'environ un peu de deux millions de foyers qui
peuvent bénéficier, donc, de cette chaîne. C'est, je
crois, un ordre de grandeur moyen.
27473 En France, une chaîne thématique,
quand elle se lance, elle ne se lance pas sur le marché
des 22 ou 23 millions de foyers. Elle se lance sur le
marché du câble et elle se lance sur le marché du
bouquet satellitaire français, les deux bouquets
27474 L'ensemble de ce marché, câble plus
deux bouquets satellitaires français, ne dépasse pas à
l'heure actuelle les quatre millions de foyers.
27475 Pour vous donner un autre
paramètre -- et pardon de faire encore référence à la
situation française -- mais sur des genres qui peuvent
apparaître aussi, je dirais mineurs par rapport au
cinéma ou par rapport au sport, des genres comme le
documentaire, sachez qu'en France, il y a 10 chaînes
documentaires. Je dis bien 10 chaînes documentaires
qui se partagent ce marché, ce marché, donc, d'à peine
quatre millions de foyers.
27476 Ce qui fait qu'une chaîne
documentaire, quand elle arrive en France -- et je
reviens sur le problème des droits et de la surenchère
sur le coût de droits -- eh bien, a l'habitude de
traiter avec cette réalité-là. En comparant le
potentiel de diffusion francophone sur le réseau câblé,
je mets à côté les opérateurs satellites qui viennent
encore renforcer ce potentiel -- je pense à Bell
ExpressVu et à l'autre bouquet -- eh bien, nous
arrivons dans des ordres de grandeur comparables. Ça
veut dire que l'unité de mesure pour le coût à l'heure
des droits est, à quelque pour cent près, le même.
27477 Donc, il ne faudrait pas exagérer la
force de frappe que posséderait une chaîne française
par rapport à une consoeur canadienne, parce qu'elle
joue à peu près dans le même terrain et les mêmes
règles du jeu.
27478 Et l'avantage, justement, -- le
formidable avantage que l'on a sur des genres
spécifiques comme le documentaire, c'est que nous avons
un vivier d'approvisionnement énorme. Nous pouvons, à
partir des mêmes sources de programmes, et je dirais
même à partir des mêmes fournisseurs de programmes,
considérer que, pour un même territoire -- j'ai pris
l'exemple des chaînes françaises puisqu'il y en avait
10 -- eh bien, les fournisseurs, ces mêmes fournisseurs
peuvent vendre à des coûts comparables différents
programmes à l'ensemble des services qui veulent
exploiter, donc, leurs programmes sur le genre qu'ils
recherchent, sans provoquer en cela un déséquilibre
financier important, parce que le marché n'étant pas un
marché malthusien, étant un marché ouvert, eh bien, la
fluidité et tout simplement les relations commerciales
que nous entretenons avec les détenteurs de droits font
qu'il n'y a pas de dérive ou de surenchère économique
qui mettrait à mal les exploitations.
27479 Vous avez raison, tout à fait, de
souligner que quand nous nous présentons devant vous
pour une diffusion ici au Canada, nous ne venons pas
non plus dans un esprit de missionariat.
27480 LA PRÉSIDENTE DU CONSEIL: Vous me
27481 M. VINZIA: Voilà. Et...
27482 LA PRÉSIDENTE DU CONSEIL: Ça nous
est déjà arrivé ça.
--- Rires / Laughter
27483 M. VINZIA: Et c'est en tenant
compte, justement, de cette réalité économique, avec
justement l'appréhension du marché et sa photographie
que nous pouvons vous assurer que nous ne sentons
vraiment un déséquilibre flagrant par rapport à la
situation qu'on peut trouver même en Belgique ou en
Suisse, puisque nous avons les mêmes ordres de
27484 LA PRÉSIDENTE DU CONSEIL: Mais je
comprends bien par ailleurs que c'est une opportunité
d'affaires et que vous la regardez en ce sens-là. Nous
aussi. Et je pense bien que c'est ce dont on parlait
quand on parle de la question des droits. Il y a une
question noble de s'assurer que les ayants droit sont
respectés, mais il y a aussi une question d'affaires et
nous, dans un marché qui est plus petit, on a un
ensemble -- madame la Présidente parlait des questions
d'équilibres, ce sont des équilibres fragiles.
27485 Je remarquais, tout en vous écoutant
converser avec madame la Présidente, -- j'allais voir
la liste des Catégories 2, parce que les Catégories 1,
maintenant, on les connaît bien par coeur dans le
marché français, et je ne voyais pas aucun des titres
qui sont ici en partenariat dans des Catégories 2.
27486 Par ailleurs, la démarche dans
laquelle nous sommes engagés depuis le début de l'avis
public pour la recherche d'un choix judicieux de
chaînes numériques mettait quand même de l'avant en
termes d'objectifs, avant d'importer des signaux
étrangers, donc de toucher à la liste d'éligibilité,
mettait quand même de l'avant les radiodiffuseurs
canadiens et encourageait, plus particulièrement par la
Catégorie 2, -- puis je m'adresse plus à M. Racine
maintenant parce qu'il connaît mieux ces questions que
vous, on peut revoir que dans... C'est-à-dire,
l'objectif de la Catégorie 2 était de créer des
partenariats avec les chaînes étrangères pour faire en
sorte que, oui, on accueille les chaînes étrangères,
mais en même temps, on s'assure qu'il y ait une portion
des contenus qui soient canadiens et qu'il y avait
aussi espoir, dans cette provision-là, qu'il y ait, non
pas simplement une place ici au Canada pour les
contenus canadiens, mais qu'il y a une espèce de
réciprocité à travers les chaînes existantes sur
27487 Alors quelque part, j'avoue qu'il
faut prendre l'âge, si on veut, des chaînes
francophones là où il est. On a une historique. C'est
vrai qu'on n'a pas la même pénétration de chaînes
étrangères qu'en langue anglaise, mais au moment où on
s'en parle, on s'en parle pendant l'audience concernant
une sélection de signaux numériques à faire, et au
fond, qu'est-ce qui est mieux pour le système canadien,
qu'est-ce qui est mieux pour le téléspectateur, parce
que j'aimerais toujours le remettre en termes du
téléspectateur parce qu'on peut épiloguer longtemps sur
ce que les uns et les autres, soit des intérêts
d'affaires, soit des intérêts de réglementation,
peuvent rechercher, mais ce qui est important, c'est
qu'on travaille ensemble pour le téléspectateur.
Qu'est-ce qui est le mieux.
27488 Et c'est là où je me pose la question
des craintes qui sont exprimées par certaines
intervenantes, mais dans le soin qui incombe au Conseil
de s'assurer qu'on poursuit les objectifs de la loi de
la façon la plus harmonieuse mais aussi la plus
27489 Est-ce que c'est la solution qu'il
faut à ce moment-ci dans notre système, c'est-à-dire
entretenir l'idée d'exceptions dans l'esprit d'une plus
27490 M. RACINE: Tout d'abord, madame, je
dois dire que nous sommes tout à fait en faveur des
partenariats. Nous l'avons prouvé dans le passé, et
nous pouvons nous vanter d'avoir été parmi les premiers
à avoir convaincu des intérêts français non seulement à
nous vendre les choses, mais à nous en acheter en
retour et à investir dans des signaux canadiens. Et ça
continue et ça va continuer. Alors de ce côté-là, nous
27491 Nous avons bien mentionné aussi dans
notre présentation qu'il est en train de se créer un
marché international des produits francophones. Je
crois personnellement que nous devrions en faire
27492 Le marché québécois n'est pas, comme
le disait Frédéric, dans la francophonie, si petit que
ça. Nous avons plus de francophones au Québec qu'il y
en a en Suisse et en Belgique réunies. C'est le
deuxième marché francophone dans le monde. Et nous
savons très bien qu'il y a des opportunités pour la
distribution de services francophones un peu partout
autour de la planète, y compris aux États-unis.
27493 Alors si nous voulons entrer dans ce
marché-là, je pense qu'il doit y avoir, pour utiliser
une expression bien française, un peu de "give and
27494 Mais troisièmement, ce que nous
proposons, d'une certaine façon, c'est un peu
différent. Ce n'est pas de refaire TV5. TV5, c'est
ça. C'est, on prend du contenu international
francophone, suisse, belge, français, on met ça avec un
peu de canadien et on fait un signal "canadianisé" avec
beaucoup de contenu étranger.
27495 Ce qu'on propose de faire, ce n'est
pas de refaire TV5. Je pense que c'était une très
bonne formule à l'époque où cela a été fait, pour les
raisons que cela a été fait, dans le contexte où cela a
27496 Mais aujourd'hui, avec ce marché
international de produits étrangers qui sont distribués
partout, ce que nous disons, c'est qu'il y a une partie
des consommateurs, une partie des consommateurs -- ce
ne sera pas, je pense, une majorité de consommateurs.
Ce ne sera pas un mouvement général avec des
démonstrations dans les rues disant nous voulons
Planète. Non, non. Mais il y aura une partie des
consommateurs qui voudra avoir accès à quelque chose de
différent, fait dans un esprit différent, dans un
contexte différent. De la même façon que c'est un
plaisir pour certains maniaques des nouvelles, de
regarder la BBC. Pas qu'on s'ennuie de Bernard Derome,
27497 LA PRÉSIDENTE DU CONSEIL: Il y a
longtemps que vous n'avez pas regardé Radio-Canada,
--- Rires / Laughter
27498 M. RACINE: Alors donc, c'est parce
qu'on voit quelque chose d'une saveur différente.
27499 Alors c'est dans ce contexte-là qu'on
veut importer des signaux étrangers. Alors évidemment,
dire, est-ce que vous ne devriez pas faire un
partenariat au Canada et puis "canadianiser" un peu ça,
bien ça ne serait pas exactement l'esprit dans lequel
27500 Alors ce qu'on essaie de faire, c'est
combiner deux choses. C'est d'une part, donner ce
supplément, cette différence, cet enrichissement, mais
d'une façon qui tienne compte des préoccupations bien
réelles qui existent sur le marché canadien.
27501 Alors s'il y a quelque chose qui
marque ce chef-d'oeuvre d'équilibre qu'était notre
présentation, c'est bien cette tentative de dire, bon,
offrons quelque chose de différent sur le marché
canadien qui est disponible à travers le monde de plus
en plus, et en même temps, faisons-le d'une façon qui
ne vienne pas pénaliser indûment, injustement les
distributeurs et les producteurs canadiens.
27502 LA PRÉSIDENTE DU CONSEIL: Merci.
27503 LA PRÉSIDENTE: Madame Wilson.
27504 COMMISSIONER WILSON: Mr. Racine, the
Chair of the Commission asked Mr. Bureau this
morning -- and by the way, I think when Commissioner
Williams was talking about the French connection, he
was referring to your co-panel members, not to you.
27505 MR. RACINE: I'm not a member of any
--- Laughter / Rires
27506 COMMISSIONER WILSON: I'm sure he was
just making a joke, but...
27507 Madame Bertrand had a discussion with
Mr. Bureau this morning about the idea of taking a
system that we use in English Canada and to sort of
putting it into the French market in a slightly
different way, and that's the system of simultaneous
substitution, and whether or not that might be one way
of putting the existing French Canadian broadcasters at
ease with respect to the issue of rights.
27508 I'm just wondering if you have any
comments on that. Have you thought about it? Is it
something that you have considered, and if you haven't,
would you consider it right now and share your views?
27509 MR. RACINE: Yes. Thank you for this
other very good question.
27510 In fact, in one of our many
submissions to the CRTC, I remember that we have
offered since the very beginning that if there was
eventually a program that would be on a Canadian signal
and on one of the imported French signals, we could
technically proceed to simultaneous substitution.
27511 We have already offered to do that.
I think it's technically feasible. I have checked with
Frédéric. If, for instance, they have the habit of
starting the program at the hour or five minutes later
or ten minutes later, he tells me that now they are
doing like us and they are starting, certainly for the
export program anyway, they will start at the hour, so
it will be possible technically to do it.
27512 So, yes. The answer is yes, we are
ready to do it. If you ask me will it be used very
often, will it happen very often, I don't think so, but
if it happens, we are ready to do it. I think the
better guarantees are in the non-exclusivity of rights,
but yes, we are ready to do it.
27513 COMMISSIONER WILSON: Thank you.
27514 Maître McCallum.
27515 Me McCALLUM: Merci. Juste une
question de clarification, si je peux.
27516 A la page 3 de votre présentation de
ce matin, vous avez fait une suggestion pour la
politique du Conseil en disant que vous proposez que
les candidats à l'ajout assurent le Conseil que les
droits de programmation pour le Canada seront libérés.
27517 Ma question est, est-ce que cette
assurance serait applicable non seulement aux
productions venant de la France, mais aussi des
versions françaises de productions américaines ou
27518 M. VINZIA: Sans aucune difficulté,
parce que si je me réfère à notre programmation
originale française, comme vous le savez, nous
respectons un cahier des charges qui nous a été édicté
par l'équivalent du CRTC, c'est-à-dire le CSA, et nous
obéissons à une règle qui fait que nous diffusons plus
de 60 pour cent d'oeuvres européennes déjà.
27519 Nous, nous faisons mieux, puisque
nous diffusons plus de 73 pour cent d'oeuvres
européennes. Et la partie des oeuvres américaines que
nous diffusons représente aujourd'hui, sur le programme
documentaire, par exemple, une proportion d'environ 15
pour cent maximum, ce qui fait que nous n'avons aucune
difficulté pour, effectivement, au cas où ces
programmes nous intéresseraient pour le marché
canadien, à négocier des droits pour le territoire
canadien, et si ce n'est pas possible, eh bien, nous
remplacerions ces programmes par des programmes d'autre
provenance et des programmes français, par exemple.
27520 N'oublions pas non plus que nous
produisons, nous co-produisons un certain nombre
d'heures par an et nous avons aujourd'hui en stock à
peu près 200 heures de co-production avec lesquelles
nous pouvons très facilement constituer un matelas de
substitutions pour certaines heures qui poseraient
problème pour la libération de tel ou tel territoire.
27521 Me McCALLLUM: Donc, juste pour
compléter, les droits seraient libérés à
non-préférentiels et non-exclusifs. C'est l'assurance
que vous suggérez.
27522 M. VINZIA: Oui, oui, tout à fait.
27523 Me McCALLUM: Merci, madame la
27524 LA PRÉSIDENTE: Merci M. Racine,
M. Vinzia et M. Lamagnère. Bien que nous débattions si
nous sommes prêts à souhaiter la bienvenue à vos
services, vous êtes tous les deux très bienvenus au
27525 M. RACINE: Ils y viennent depuis
--- Rires / Laughter
27526 LA PRÉSIDENTE: Nous prendrons
maintenant une pause de 15 minutes.
27527 We will take a 15 minute break. I
would remind everyone that is the case, unfortunately,
for today, that there may be a separation. Lunch may
intervene in between. We have no choice.
--- Upon recessing at 1055 / Suspension à 1055
--- Upon resuming at 1110 / Reprise à 1110
27528 THE CHAIRPERSON: Welcome back.
27529 Mr. Secretary, please.
27530 MR. CUSSONS: Thank you, Madam Chair.
27531 Our next intervention is by the
Canadian Association of Broadcasters.
INTERVENTION / INTERVENTION
27532 MR. McCABE: Good morning Madam
Chair, Madam Chairperson, Commissioners. The Canadian
Association of Broadcasters is pleased to have this
opportunity to appear before you in this digital
27533 My name is Michael McCabe, President
and Chief Executive Officer of the Canadian Association
of Broadcasters. With me to my left is Sylvie
Courtemanche, who is our Executive Vice-President,
Policy and Regulatory Affairs.
27534 To my right is Sean Kiely, the CAB's
recently appointed Vice-President, Specialty and Pay
Services. Mr. Kiely comes to us with extensive
experience in the specialty television sector, having
served in an executive capacity at YTV and, most
recently, as Vice-President, Consumer Markets at Fundy
27535 This proceeding marks an important
development in the history of Canadian television. The
Commission has received an unprecedented number of
applications for the new digital services. A great
many of these applications have substantial merit and
would make a significant contribution to the Canadian
27536 In May 1999, and again in July of
this year, the CAB presented comprehensive submissions
to the Commission which, we hope, helped establish the
framework that is now driving the licensing of new
Canadian digital services. Both of these submissions
were built on our FuturePlan blueprint for the digital
27537 The digital licensing hearing enables
us to address the opportunities and challenges of --
27538 THE CHAIRPERSON: Mr. McCabe, you
don't have to rush.
27539 MR. McCABE: I'll slow down.
The digital licensing hearing enables us to address the
opportunities and challenges of bringing to Canadians a
multitude of new Canadian programming choices in the
27540 The CAB believes that the key
elements for a successful launch of digital specialty
services are the need to provide choice and value to
Canadian consumers, the need to ensure equitable access
through an industry code, and the need to address
important launch issues as soon as possible. These are
the three fundamental issues that our presentation will
focus on today.
27541 In our July 7 submission, the CAB
"...the promotion and marketing
of affordable and attractive
programming packages will be the
best means of continuing the
current success of Canadian
specialty and pay services and
the best means of providing
choice and value to Canadian
27542 We believe that providing both choice
and value is critical to success.
27543 Given the unprecedented quality of
the applications and the repeated assurances by
distributors that digital capacity will not be an
issue, the CAB encourages the Commission to consider
licensing more than the ten Category 1 services you
27544 It is in the interest of the Canadian
viewing public to ensure that the greatest amount of
diversity in the system is achieved as a result of this
licensing round. The Commission is in a position to
ensure diversity by licensing Category 1 services in
all remaining significant genres. Choices made by
others may not serve the interests of diversity, and
may well result in U.S. services occupying genres that
could be filled by Canadians.
27545 Providing real choice to consumers is
ultimately based on providing the best opportunities
for programming services to succeed and providing
maximum value to consumers. To date, the best means of
providing choice and value has been through an approach
that gives priority to promoting all-inclusive packages
and then theme or general interest packages at
affordable and attractive prices.
27546 As part of their July 7 submission,
the Canadian Cable Television Association presented a
survey promoting à la carte marketing as the ultimate
form of choice. The CAB disputes the value of the CCTA
27547 Perhaps the most serious problem that
we have identified is the lack of any attempt to
provide respondents with an understanding of the
serious cost implications of pick and pay programming.
As well, we noted that CCTA research entirely ignored
the nearly one million DTH households that represent
the vast majority of the current digital subscriber
27548 Canada's most successful distributor,
Bell ExpressVu, provides an impressive example of how
innovating packaging and pricing has driven the
penetration of Canadian specialty services.
Approximately 80 per cent of their subscribers choose
to receive all Canadian specialty services.
27549 In the U.S., AT&T Broadband is, as we
speak, abandoning à la carte distribution for theme or
general interest packages that provide more choice and
value to subscribers. Attractive packages drive
penetration and keep prices low for consumers.
27550 Pick and pay could not have sustained
existing Canadian services and is not, in fact, the
ultimate option for consumers. It will prove even more
problematic for new digital services since these will
be essentially unknown programming options for
27551 Since packaging, marketing and
pricing are vital to ensuring the success of the new
digital services, it is essential that programmers have
an opportunity to meaningfully negotiate these elements
with the distributor and not be forced into
unacceptable à la carte arrangements.
27552 The negotiations will only be
successful if the Commission redresses the current
imbalance by expressly specifying that any à la carte
distribution be tied to the completion of an
affiliation agreement between the programming service
and the distributor. Where the proposed packaging,
marketing and pricing options are equitable, then à la
carte becomes an acceptable means of distribution.
27553 The CAB firmly believes that if
distributors truly intend to offer choice and value to
subscribers, the à la carte option should only be made
available if it reflects the true cost of the
individual take-up of programming services. Value
packaging and pricing is a better deal for Canadian
subscribers and Canadian services.
27554 Mme COURTEMANCHE: La deuxième
question qui nous préoccupe aujourd'hui, c'est celle de
l'accès équitable. Le Conseil a, dans son règlement
sur la distribution de radiodiffusion, inséré une
disposition traitant des préférences ou désavantages
indus conférés par les distributeurs.
27555 Il a également affirmé son intention
d'instituer un règlement réciproque qui aborderait la
question des préférences indues conférées par les
27556 La question de l'accès équitable sera
un facteur clé du succès des nouveaux services
numériques. Les services numériques non-affiliés
doivent avoir la possibilité de négocier un contrat
d'affiliation équitable. Cet objectif sera réalisé par
la mise en place d'une série de normes industrielles
clairement définies et comprises qui s'appliqueraient
tant aux distributeurs qu'à leurs services affiliés.
27557 De l'avis de l'ACR, il serait
possible de régler la question de l'accès équitable en
créant un code d'industrie qui inclurait les principes
et les directives régissant la répartition de l'accès
équitable à tous les services dans une environnement
27558 Lorsque le Conseil aura approuvé un
tel code, les titulaires de licence devraient y
27559 Suivant l'exemple choisi par le
Conseil concernant les questions liées à la migration
des services analogiques vers une plate-forme
numérique, un groupe de travail de l'industrie
accrédité par le Conseil pourrait élaborer une code
régissant l'accès équitable. Un tel code serait publié
au même moment que les décisions concernant des
licences de services numériques et le Conseil devrait
en assurer l'application rapide et efficace.
27560 Ce code devrait être complet et
prendre en compte les éléments suivants: Un, les
conditions équitables de distribution; qu'il n'y ait
aucun service à la carte sans entente d'affiliation; un
partage équitable des coûts et des risques de
lancement, et enfin, un accès équitable au guide
électronique de programmes et aux disponibilités
locales des services provenant des États-unis.
27561 MR. McCABE: The introduction of
digital services next year will represent the single
largest and most complex launch in the history of
Canadian television. Many issues will need to be
addressed in advance of the launch if it is to prove
successful and avoid the mistakes of the past.
27562 These issues include such critical
questions as launch coordination, packaging and pricing
models, the sharing of marketing costs and free preview
27563 The CAB is reiterating its call for
the creation of a Joint Marketing Committee to be made
up of representatives from both the distribution and
programming sectors. This committee will work to
achieve an orderly launch of the new services in a way
that will share the costs and risks of this undertaking
and ensure the best chance of success for all parties
involved -- most importantly, the Canadian viewing
27564 The Joint Marketing Committee should
begin its activities at the same time as the Commission
announces its digital licensing decisions. This will
provide approximately six to eight months of solid
planning and will ensure that the launch of Canadian
digital specialty services in the fall of 2001 is the
most successful in the history of the industry.
27565 We urge the Commission, at the time
it licenses digital services, to support such a joint
27566 In conclusion, I would like to
briefly recap the main points of our presentation
27567 First, we strongly urge the
Commission to licence Category 1 services in all
significant remaining genres to ensure diversity and
pride of place for Canadian programming.
27568 Second, choice and value will be key
to the success of digital specialty television in
Canada. These will only be realized by making the new
services available to Canadians in attractive and
affordable packages. We urge the Commission to
require signed affiliation agreements before à la carte
offerings can be made.
27569 Third, the CAB urges the Commission
to initiate a process for the creation of an industry
code to ensure equitable access for all digital
services. This code should be put in place at the same
time as the Commission announces its digital licensing
27570 And, finally, the CAB is calling for
the early creation of an industry-wide Joint Marketing
Committee responsible for overseeing the efficient and
equitable launch of these exciting new Canadian
27571 Madam Chair, Commissioners, thank you
for the opportunity to appear before you today. We
would be pleased to respond to your questions.
27572 THE CHAIRPERSON: Thank you,
Mr. McCabe, Madame Courtemanche.
27573 Madame la Présidente.
27574 LA PRÉSIDENTE DU CONSEIL: Merci.
27575 Alors comme Madame la Présidente
l'indiquait, we could interrupt our dialogue to pursue
it at two o'clock. Before we enter into really what is
the core of your presentation, which was really part of
your written intervention as well, I just want to touch
upon a few elements and just seek your comments, if you
have any, in terms of what we have been discussing with
most applicants in terms of the presence of independent
production, the elements of competitiveness, the
elements of the importance of Canadian program
expenditures. Do you have any, you know, comments to
make to that?
27576 The other question is the one we have
been discussing this morning abundantly, which is in
the French market, the addition of foreign services. I
don't want to force because I realize that your
presentation is very focused this morning, but I
wouldn't want to, you know, not give you the
opportunity of commenting on some elements that have
been largely discussed with the applicants.
27577 MR. McCABE: So this is sort of a
free-flow answer you would like. We can handle that.
I will count on Sylvie and Sean to kind of give me the
subject matter here as we move along.
27578 First of all, you raise the question
of independent production. I recognize that the Act in
fact talks about the independent production. This has
been one of the concerns of the Government of Canada
and of this Commission over the years.
27579 We have built in this country a very
powerful independent production industry -- I was going
to say company, maybe that's right too --
27580 CHAIRPERSON OF THE COMMISSION: It's
like the broadcasters.
27581 MR. McCABE: We have built a very
powerful independent production industry that indeed
has served us very well. Our members who have appeared
here before you have made commitments with respect to
how much of their programming they will in fact get
from independent producers.
27582 I guess what they can't say, because
it's difficult for them as applicants to talk about
this because it may tend to undermine your faith in
their belief in independent production, is something I
27583 You have seen from our strategic plan
that we are very concerned about the globalization of
media. We are very concerned about the ability of
Canada to continue to compete. We have in our approach
to the years ahead said that we will have to look to
building strong, integrated companies that are able to
engage in broadcasting, production, distribution.
27584 This will continue, I think, to be a
theme that we will press. It's one that I think we
have got the attention of the Government of Canada on,
in particular the Department of Canadian Heritage. I
think it's important that we now think beyond the sort
of silo approach that we have taken in public policy
where we have said these folks are the producers and
these folks are the distributors and these are the
broadcasters over here.
27585 I don't think that's going to work
very well much longer. I think there will continue to
be independent producers. They will continue to be an
important supplier to us. It is fair that commitments
be made with respect to amounts of programming.
27586 It is also important for public
policy and for this body and, I think, for us too as
public policy players to begin to think about how we
strengthen Canadian players with integration so that we
can in fact continue to have a strong Canadian presence
in the communications world that is emerging.
27587 One particular aspect of that
obviously is one of the things that's clear in a market
this size is that obviously services will want to, if
you licence them, look to foreign markets. That
becomes more difficult if the services are -- if the
programming is not in fact owned by the service
27588 That's a concern we should be looking
at as we are looking at these applications. I think
it's a policy concern we have to have going forward,
that we begin to think about the evolution of -- the
necessary evolution of the industry and not merely
stick with the tried and true formula of we must have
large commitments to independent producers. Elizabeth
MacDonald will not like me for that.
27589 What's the second subject here?
27590 MS COURTEMANCHE: Could I just add on
the independent production, we are not advocating a
particular percentage. You have heard everything from
zero to 34 per cent. We wouldn't necessarily go there.
27591 I guess one of the things that the
Commission needs to look at is what is the actual
definition and then how is that definition applied. In
some types of programming, obviously it makes much more
sense for the -- to have a higher level of in-house
27592 The Commission has showed that kind
of flexibility in the past with, you know --
27593 CHAIRPERSON OF THE COMMISSION: News,
27594 MS COURTEMANCHE: Exactly. We would
expect that that flexibility should continue. It may,
as Michael has said, for greater purposes -- for
purposes of selling your content world-wide, you may
need even more flexibility in that area on a going
forward basis. I just wanted to add that, certainly
27595 MR. McCABE: Competitiveness. You
are talking again of the licensing of services and
whether they are -- what we have said in our brief, as
you will recall, is that we think that the way you do
it now works very well, and that is what we recommend
for this round. That is, that you examine the
programming proposals of the applicant. You can take
into account the impact no existing services and on
other applicants, and that in your wisdom make the
judgment as to whether they are indeed directly
27596 We thought through -- spent some time
trying to think this through in other ways. We were
not able to find a way that is better than the way you
do now. I don't think it's possible to in fact derive
some easy rules that you can say, "well, just follow
these rules." We have put them on the grid and we have
sorted them all out.
27597 We think that in the marketplace, as
we see it today, you have applied your judgment well
and the system has benefited from that. We have had,
as we have indicated in our brief, been able to find
two different kinds of news services in each language,
different kinds of sports services and so on.
27598 I think that you should be looking at
it in the same light in which you have addressed it in
27599 CHAIRPERSON OF THE COMMISSION: But,
as you know, the wisdom of the Commission is always
enlightened by the comments and suggestions of
applicants and intervenors.
27600 MR. McCABE: Indeed.
27601 CHAIRPERSON OF THE COMMISSION: So I
am trying to -- you know, the case by case is certainly
an approach that is valid, but in a world where we know
there has been many more services the analysis becomes
more delicate, might we say. When I see that you are
putting forward in your intervention this morning value
and choice for consumers --
27602 MR. McCABE: Yes.
27603 CHAIRPERSON OF THE COMMISSION: --
what will be the value and choice for consumers? We
might talk here about many elements that we know have
been at the basis of the regulatory system and the
broadcasting system in Canada, but does it turn itself
into a value and choice proposition to the consumer?
Have you got any ideas on how we could do it?
27604 I will have to stop here. Is that
what you are saying?
27605 MR. McCABE: I was just about to
27606 THE CHAIRPERSON: I knew one day I
would find a way to silence the Chairman.
27607 Alors, Mr. McCabe, we hope you have a
27608 MR. McCABE: Thank you.
27609 THE CHAIRPERSON: We will resume at
27610 Nous reprendrons à 2 h 00.
--- Upon recessing at 1140 / Suspension à 1140
--- Upon resuming at 1400 / Reprise à 1400
27611 THE CHAIRPERSON: Welcome back to the
27612 Just to show you that we also think
having fun is important, I have been asked to remind
those of you who may be not detained tonight because
you are intervenors who may want to join our Ottawa
Chapter or the Regional Capital Commission Chapter of
the Canadian Women in Communications at the Hard Rock
Cafe in the market -- I believe it is York Street --
between 5:30 and 9 o'clock to say goodbye to summer.
Some of us I guess saw some summer.
27613 Alors pour vous montrer que nous
sommes aussi en faveur d'avoir du plaisir, on m'a
demandé de vous inviter, le Chapitre de la Région de la
Capitale nationale de l'Association canadienne des
femmes en communication, qui célèbre la fin de l'été au
Hard Rock Cafe au marché -- je crois que c'est sur le
rue York -- entre 17 h 30 et 21 heures.
27614 Maintenant ce n'est pas une excuse
pour ne pas être là pour votre intervention évidement.
27615 We are not that much fun.
27616 Madam Chair.
27617 LA PRÉSIDENTE DU CONSEIL: Alors les
intervenants vont me permettre avec fierté et la chance
d'être en ondes cet après-midi, parce que nous avons
demandé une longue heure de lunch parce que nous avions
à participer à un déjeuner offert par l'Institut
d'administration publique du Canada et nous revenons
avec le premier prix, et je pense que l'occasion est
vraiment en or de pouvoir remercier tout le monde qui a
27618 The Institute of Public
Administration of Canada presented the CRTC the award
today at IPAC's annual conference. The theme of this
year's award was collaboration, new approaches to
policy and management.
27619 The CRTC won for developing a
collaborative approach to creating solutions for
problems and issues in the telecommunications industry
through the CRTC's Interconnection Steering Committee,
known as the CISC Committee. The CISC group comprised
industry representatives, consumer and public interest
groups and CRTC staff.
27620 I want to say thank you to all of
27621 Je pense que c'est une façon
intéressante, novatrice, d'attaquer des questions qui
sont nouvelles et qui sont aussi complexes.
27622 Nous avons d'autres initiatives de
même ordre. Le groupe qui a été créé pour la migration
des services du côté analogique vers le numérique et
certainement depuis que nous avons entrepris l'audience
présente, des hypothèses ont été mises sur la table.
Nous aurons la chance de pouvoir en discuter plus avant
dans les prochains jours et certainement au moment de
l'analyse aussi, mais je pense que c'est important de
dire que le succès de ces initiatives est important
pour l'avancement des dossiers au CRTC, réclame
vraiment la collaboration de tous. On se rappellera
que dans le premier plan stratégique du Conseil en
1997, on parlait d'une approche moins réglementaire au
sens traditionnel du terme et de miser sur une approche
27623 Je pense que le prix que nous avons
reçu aujourd'hui démontre que le Canada est capable de
cette approche à condition, bien sûr, que tous les
intervenants et tous les participants se donnent la
main et je veux féliciter, encore une fois, tout le
monde qui ont participé et plus particulièrement toute
l'équipe du CRTC sous la direction de M. Léo Melville.
27624 Alors merci, et merci, Madame la
Présidente, de m'avoir permis ce message publicitaire.
27625 LA PRÉSIDENTE: Merci.
27626 Monsieur le Secrétaire, s'il vous
plaît. Ou simplement nous continuons avec
l'intervenant qui a déjà été présenté avant le lunch.
27627 We will proceed, then, with the
intervenor that we rudely interrupted to go and get
27628 Go ahead, Madame la Présidente.
27629 CHAIRPERSON OF THE COMMISSION: Do
you remember where we left off? Probably you know
better than I where we were.
27630 MR. McCABE: Perhaps I could, before
we start, congratulate you on this award. I can say
from where we sit that this Commission has been
innovative. Sometimes it has been painful, but we have
greatly appreciated the fact that you have been
innovative and collaborative. This has been for us a
great ride over these past few years, and it is good to
see that you are being recognized for the innovation
you have brought to the process. It has opened it up,
and I think it made a significant contribution to the
capacity of the Commission to move effectively and
relate to albeit the incredible changes that are
occurring in the industry.
27631 Congratulations and we hope that the
spirit will carry into the CISC-like exercises in the
migration of analog to digital and also a new fairness
code which we have mentioned.
27632 That is my commercial.
--- Laughter / Rires
27633 CHAIRPERSON OF THE COMMISSION: This
is directly at the core of your presentation this
27634 Et j'avais voulu laisser ce point
pour cet après-midi -- because I think you are putting
forward in your written intervention already the idea
of the code, but you are kind of adding to that code
today and building on what you heard, I suppose, since
the beginning of the hearing, the idea of a committee.
27635 I would like to hear how you see that
developing concretely. What are your ideas? What are
you expecting? What kind of code would be helpful?
27636 Definitely by the framework that the
Commission has put forward for those digital licences
there is a need and an understanding coming out of the
public process that kind of led to that framework the
necessity to embark in that new world; not denying the
past but really keeping the heart and the soul of the
past, in terms of the Canadian content of the
broadcasting system, yet embarking in this new world
with a new approach and new eyes and really allowing
this new world to deploy. Otherwise, it would not
happen. And a lot of flexibility was required.
27637 How do you see the fit of that
approach with what you are proposing?
27638 MR. McCABE: I think I might start
and then ask Sylvie if she would complete it.
27639 As we have looked at this new world,
we recognize the spirit in which you have approached it
in the sense that it has to be new; we have to
recognize that there is a new kind of competitiveness.
But I think in any competitive situation a couple of
things are important.
27640 One of them is to have some rules, to
know what they are and to all agree that we are going
to follow them, number one.
27641 And number two, it seems to be
important that there be some balance as among the
players because then your chances of coming to a
mutually satisfactory approach to that marketplace that
can benefit all of us and in which we can compete
effectively and fairly is more likely.
27642 In proposing a code, in some senses
it is part of a broader approach which we have before
you here. It is in many ways the first part.
27643 What we are saying is -- if I may,
the three parts would be: the code, the fairness code;
the need for affiliation agreements; and third, a joint
marketing committee and joint marketing effort.
27644 Our approach to the code has been
that you have in your call laid out the basis for
Category 1 and Category 2 service. In Category 1 you
have said, in effect, that services must be carried --
if they are to be carried on an à la carte basis, they
must be carried as well in a package. And in Category
2 you have laid out your five-to-one rule. We think
these are good starts.
27645 You have, as well, in recent years
put into the regulation the prohibition against undue
27646 It is building on these that we think
what we need to do is to, in negotiation and discussion
with the distributors, agree upon first of all in
respect of the provision in the regulation with respect
to undue preference -- agree upon what that means in
detail so that we can approach this marketplace with
some sort of balance between us.
27647 The distributor is, after all, still
the gatekeeper here. Even your requirement with
Category 1 licensees that there must be carriage in a
package first still leaves the distributor in a
position to in effect put the services on in a package
chosen by the distributor and in a manner that may not
be acceptable to the licensee, which is why we have
said: Let us look to -- and this would be incorporated
into a code. Let us look to the requirement for an
27648 Then building on that we have
suggested that there could be other aspects of a code
that we could agree between us. I don't think this is
something that we need the Commission to set for us.
Nor are we in this kind of marketplace, the more
competitive marketplace that you are suggesting,
proposing that you set any particular requirements on
your own for that code, but rather that you, in a
CISC-like process if you will, tell us to go away and
get ourselves a code and come back and have you bless
it at a time prior to the launch of the new services so
that it is in place at that time, and that that code be
binding, by condition of licence if you will, on both
programming services and on distributors.
27649 We think that is an essential element
of a fair marketplace going forward.
27650 I would like Sylvie, I think, to just
add to that to give you some broader sense of what it
is we are talking about in terms of the nature of the
27651 MS COURTEMANCHE: What we are looking
for are guidelines and parameters that will basically,
from an industry perspective, set out what is not an
acceptable practice. At the end of the day I think it
will be very difficult to sit down and create a code
that says "This you cannot do", but at least it sort of
sets forth the rules of the game as to how we should
sit down and talk, how we should negotiate a fair
package, you know, what is a fair package and how do
you go about constructing that.
27652 Fair negotiation pricing, as we
know -- and we have said many times that packaging and
pricing are going to be key to the success. Everybody
understands that there has to be a multitude of
options, but can we lay those options out in a way that
ensures the best circumstances of success for the
programming service and the distributor as well, as
well as what offers an opportunity for Canadian
consumers as well as having various options.
27653 I think the other thing we would like
the code to do as well is to remove from the
Commission -- because the Commission is looking at in
the fall of 2001 the single most comprehensive launch
in Canadian history, and in that context if there was a
framework that was established by the industry as to
what is fair play and what doesn't constitute fair
play, you would end up having to -- well, you would
have, I think, far less disputes or that nature of
complaint that would be set forth to the Commission.
27654 People, if they feel that they are
not being treated equitably prior to the launch, are
going to say to the Commission "Guess what, they are
just not giving me a fair deal. What they are offering
just does not work. There is no way I can make my
business case", and you would have to resolve all of
those disputes. There could be very many, given the
number of services that you are likely to license as a
result of this process.
27655 So if we can all get together and
agree to what is an acceptable practice and what isn't,
then at that point we think that it will be -- well, it
will help the launch but, more importantly, it will
help the Commission in having to avoid getting involved
in all of the details with respect to --
27656 MR. McCABE: I think it would be
helpful if you gave some more specific examples of what
you are talking about so I could understand it.
27657 CHAIRPERSON OF THE COMMISSION: Yes,
what you have in mind.
27658 MS COURTEMANCHE: Just moving on to
that, we had -- we looked at some of the issues or
areas that could cause specific areas of concern, but
the key elements that we think the Commission should
hit on are the fact that services should have an
opportunity to be carried on terms that are no less
favourable than -- a nonaffiliated service should have
an opportunity to be carried on terms that are no less
favourable than an affiliated service.
27659 So a practice or guideline could be
the industry, the distributors commit that they will
not carry an affiliated service on terms that are less
favourable than a nonaffiliated service or it would be
on terms that are less favourable than an affiliated
service. So that would be an example of a practice, a
guideline that they would have to commit to.
27660 Another example --
27661 CHAIRPERSON OF THE COMMISSION: But
isn't it what undue preference means?
27662 MS COURTEMANCHE: Well, you see, the
problem with undue preference is what constitutes
27663 I mean, we all agree that in the
environment today there can be preferences. For
instance, subscribers who lived in a multi-unit
dwelling might benefit from a lower cable rate for
economies of scale for instance, and that constitutes a
preference, but it won't be an undue preference.
27664 So the issue is: When do you cross
that line of undue preference?
27665 If we can sort of agree that the line
in the sand is here, well that will certainly avoid a
lot of requirements for the Commission to sort of delve
in a case-by-case basis. It won't resolve all of the
issues. That is not a possibility. There will always
be cases and circumstances that differ, or whatever,
but it will at least attempt to draw a line in the sand
that says "Okay, once you have carried me on terms that
are less favourable, then that constitutes an undue
preference. Let's agree that is an industry objective
and, okay, that won't happen". So you avoid a lot of
27666 CHAIRPERSON OF THE COMMISSION: But
isn't there a new situation going into the digital
world where you have more players, and actually the
player in the digital universe as we know it that has
the most subscribers is somewhat of a new player in the
game, but there are alternatives.
27667 Isn't there larger broadcasting
undertakings than there used to be that has more power
of negotiation than there used to be, because there is
like a portfolio of undertakings that allows for a
better positioning in terms of the negotiation. So
some would say that given the way that the broadcasting
universe has been developed in Canada, that the
maturity of all the players allows for the forces of
the market to operate better.
27668 MR. McCABE: I think that it is that
maturity that leads us to a code. I think it is
possible for us to sit down with these players in
particular -- because there is some more competition in
the market on the distributor's side now -- and agree
in advance how to specify what is meant and what we
mean by "undue preference".
27669 So that it becomes a problem -- a set
of problems that we deal with in advance rather than --
as we have today, despite the competition that is
increased competition in the marketplace, we still
had -- at the end of the last term we still had
services not carried that ought to have been carried,
we still had a great deal of concern about some of the
judgments made by distributors about their carriage and
their terms of carriage.
27670 So we have ongoing problems with --
and I have never been able to figure out whether they
are real or unreal -- about the use of local avails.
27671 It seems to us that the industry has
matured. We have now created -- you have, in a sense,
created a situation in which we can sit down and in
advance of this launch and sort through some of the
guidelines so that we all agree in advance that we
aren't going to battle about these things, about the --
27672 MS COURTEMANCHE: The launch costs,
the making -- you know, the launch costs and making
sure the risks are equitably shared and also that
distributors are accountable for those launch costs,
because they are looking to programmers to provide some
of those launch costs, but those have been provided in
the past and there was no accountability. This time
programmers would say "Yes, we are prepared to help
with launch costs. We want some accountings of those.
We would like the industry to agree that that would
27673 But let's just go back a bit on the
maturity of the industry and where we are going.
27674 We are still in a very narrow digital
distribution environment, and so a programmer that is
going out there, for the most case, is going to need
not just one little piece of that digital environment,
but most if not all. So, you know, there will be some
difficulties to face.
27675 But looking at it the other way,
which is what you were bringing up, you know, the
reciprocity, I would envisage such a code to be
reciprocal so that the obligations are not just on the
distributor but there would be obligations on the
programmer not to act in an unduly preferential manner
as well. So it would be a two-way street.
27676 I agree with you that we are at that
point in the industry where we can both play games and
let's just agree to play a fair game.
27677 CHAIRPERSON OF THE COMMISSION: When
you talk about sharing the costs of the marketing and
the launch, certainly it is a valid proposition out
there, but isn't it somehow getting into the business
of what is the distributor's business?
27678 How would the broadcasting
undertakings react if the distributors would go and say
"Well, the program you should choose in order to please
my customers should be this one". Isn't there
somehow -- although I can see the merit and the
validity, because it is going to be a very challenging
launch and although we can hope that the Commission --
and I know we will make a wise choice, at the end it
will still be a very challenging launch.
27679 But when you are talking about that,
on one hand it could be "séduisant l'idée de" --
sharing the costs, but isn't it infringing somehow on
the business of the distributor itself?
27680 MS COURTEMANCHE: Well, I guess what
we are not -- we are not advocating a code that would
say you can only package one service in a specific
manner across the industry. That does not make sense.
It doesn't allow for a competitive distribution
industry and it would be, quite frankly, unworkable.
So that is certainly not what we are advocating.
27681 What we are advocating is that we
think the programmers do have some ideas as to how to
market, not just exclusively distributors, and that
they should have an opportunity to have a meaningful
input and be in a position to meaningfully negotiate.
That is what we are trying to construct with a code, is
that they do have an opportunity to say. Now they have
no opportunity. How fair is that?
27682 Yes, you could say at the end of the
day that the distributor knows best, but I think that
in some cases there have been enormous successes and in
other cases there have been some failures.
27683 Where somebody is achieving 80 per
cent penetration on a tier, they are not the ones that
are arguing. Where there are the problems is where you
are having penetration rates substantially under 50 per
cent. Why wouldn't a programmer -- shouldn't have the
opportunity to speak to the distributor and say "Do we
agree that this particular packaging formula is not
working? Let's talk. Let's work something out. Maybe
there is another option here that will make it work and
I will help you with those promotion costs and let's
market this thing in a different manner if it's not
working." If it's working, great.
27684 But in a digital environment it is
not going to be clear what will or will not work and
there may have to be some risks to take, you know,
well, we will try this or we will try that. Maybe a
distributor would say "Well, let's try this the first
time" and the programmer will say "Sure, but if it
doesn't work, if within a year we don't achieve
penetration rates in excess of whatever, let's try it
my way the next time." It's give and take we are
talking about here.
27685 CHAIRPERSON OF THE COMMISSION: Let's
leave the code. I understand more what you are
27686 But one thing I'm not clear about is
the idea of the affiliation agreement. Do you have the
same perspective put forward for -- I think it is
Astral who talked about it first and then CHUM came.
27687 Is it in the idea that nothing should
be done until the affiliation agreement is done that
there should be like a six month -- or what is your
view of the affiliation agreement? Do you see it as a
condition strictly before we talk about a possibility
of an offer to the consumer as a stand-alone once the
affiliation agreement is signed? I wasn't sure.
27688 MR. McCABE: Yes. I think you have,
in a sense, created the base when you have said in
respect of Category 1 services that they cannot be
carried à la carte unless they are part of another
27689 Our concern is -- and there is no
such provision in respect of Category 2 -- our concern
is that it is still in the hands of the distributor in
effect to construct the packages at the price it wishes
and without benefit of agreement, go ahead with that
and then sell it à la carte as well.
27690 Our view is that in order to
rebalance the marketplace here, you should require that
there be, in respect of both Category 1 and Category 2,
an affiliation agreement signed prior to the
distributors being able to in effect put the
27691 It seems to us that that's normal
business practice, but that it is not always followed
in this industry. There is an ability on the part of
the distributor to be able to, as I say, proceed as
they wish with a package, whether the broadcaster likes
it or not, and on that basis put him in a particular
kind of package, put him on à la carte.
27692 As we thought this through, we felt
that in respect of both Category 1 and Category 2, the
instrument that gave some balance in the marketplace
but required you to intervene the least is just the
requirement that there be an agreement. It seems to be
normal that if you are going to put my service on, I
should have to agree to doing that.
27693 I guess we are talking about what we
think should be a normal business practice, but has not
necessarily been in our industry. They are asking that
you require that.
27694 CHAIRPERSON OF THE COMMISSION: Am I
reading rightly that you don't see that as part of what
could be a code of ethics, that it has to be included
as a specification in the decision of the Commission,
or can it be in the code of ethics?
27695 MR. McCABE: It could be part of the
code as long as you were prepared to make the code
binding upon both distributors and broadcasters.
27696 CHAIRPERSON OF THE COMMISSION: Well,
are there other ways? If you are proposing a code of
ethics, if it's not to be binding for all parties
involved, what's the value of the code of ethics?
Isn't the challenge of a code of ethics that everybody
is bound by it?
27697 MR. McCABE: Yes, and that's what we
would -- we would hope that that would be the nature of
the code and the nature of the arrangement. It
certainly could be the requirement that there be an
affiliation agreement. It could be part of that. Yes.
27698 CHAIRPERSON OF THE COMMISSION: As
far as the timing goes, we thought about it and we
said, you know, requiring that these affiliation
agreements be signed six months ahead of time may be
very difficult, given that the licensing is probably
going to occur late this year or, at the latest, early
27699 MS COURTEMANCHE: We have cancelled
27700 CHAIRPERSON OF THE COMMISSION: Oh,
you have cancelled Christmas. Okay.
27701 MR. McCABE: Are you the Grinch?
27702 MS COURTEMANCHE: That would only
leave a three month window of opportunity to negotiate
all of these affiliation agreements. That might be a
27703 What we looked at was, you know,
under your broadcasting and distribution regulations,
if there are to be changes in character, whatever, you
have a 60 day window. We said if we also need to
incorporate a 30 day window in case there needs to be
resolutions of disputes that could occur, then we
thought that if the affiliation agreements were
completed 90 days before the launch, that would be more
workable. It would give people more time to actually
have a meaningful negotiation before the actual drop
27704 CHAIRPERSON OF THE COMMISSION: Isn't
there any downside to the affiliation agreement in
terms of the day we recognize that undue preference can
work both ways or it can be a reality both ways? Isn't
there a danger that the affiliation agreement doesn't
get signed and it's harmful to the potential launch
date for one thing, but also in terms of the success,
all the conditions for that launch.
27705 MS COURTEMANCHE: That's why you
would have that 30 day window for the dispute
resolution because if you get to that period 90 days
before it starts and you haven't come to an agreement,
that's why you need that 30 day window to work out an
agreement. At that point you would have to exercise
your discretion, but probably you would have to work
towards some kind of baseball type of arbitration in
which case, you know, the two parties would put their
proposals on the table and you would pick A or B and
bang, the launch goes ahead.
27706 We are not trying to prevent a launch
here. We think the launch needs to go ahead. We think
that with that kind of incentive -- if people know that
at the end of the day "If I don't agree by such and
such a date and then my only recourse is a 30 day
window to do baseball arbitration, in which case I
either win big or I lose big", it's a huge incentive to
negotiate and come up and strike a deal.
27707 CHAIRPERSON OF THE COMMISSION: Well,
let me be very upfront about something. There have
been cases in the past where -- I will say some
cases -- where the perception, rightly or wrongly, is
that sometimes not the best effort is made out there in
the market to resolve the problems. There's a kind of
a waiting that goes on in saying "Well, we will get to
the dispute resolution and the Commission will be the
referee and will decide".
27708 What's the comfort in this approach
you are proposing given the environment that we are all
trying to design together? What's the level of comfort
that those ideas today would be more successful than
what seemed to have worked in the past?
27709 The concern we have is before the
launch we might have so many people at our door and not
enough people like Leo Melville and his team to do the
dispute resolution mechanism. Isn't there some kind of
a danger there?
27710 MR. McCABE: It seems to me, as you
have suggested, you are faced with that problem today
and those people may be on your doorstep. What we are
trying to do with the trio of measures here, that is a
code, affiliation agreements and a joint launch
committee, is to try to cut down the incidence of those
27711 What we are trying to do is in effect
have you say in an assist-like proceeding, if you will,
"Go way and work out a code here". The existence of
that code and the discussion that arrives at some
agreement starts to first of all sort out some of those
problems in advance.
27712 A joint marketing committee in
which -- if you were to say, for instance, in a Public
Notice that often accompanies a lot of decisions that
you favoured -- expected a joint approach to this,
even without that I think we can pull such a committee
27713 It seems to me that starts again to
create another circumstance in which you -- I would
hope we would help you avoid having a lineup of folks
at your door. The affiliation agreement is another
piece of that, in other words, a negotiation, a
requirement that there be such an agreement as a normal
business practice so that again as another measure
which says -- none of these in a sense are ways in
which you intervene. You are telling us to get on
27714 Can I give you comfort that these are
going to in effect shorten the line at your door of
those who have problems? No. But I do think that they
have the potential to in fact ensure that we work
together as an industry to achieve what we want, the
successful launch of this, without intervention.
27715 With all due respect, some of the
time we say "Maybe we better sort this out ourselves
because if we hand it to the Commission, who knows what
they will do?" It scares the hell out of them
sometimes, I will tell you.
27716 MS COURTEMANCHE: One of the elements
of the code, if we could get the industry to agree to
this, and certainly I would be prepared to put this on
the table, is have the industry be its own arbiter and
not go to the Commission and say "We agree with the
90 day date and we will go to commercial arbitration at
that point and we will not involve the Commission".
27717 That's something that could be an
element in the code. At that point you would be
guaranteed not to see us. That's another way of, you
know, removing that burden from your shoulders.
27718 Michael's right. That burden is
there today. You are facing it. In absence, something
more than what's there today. I'm not sure how it is
going to be manageable. That's why we are trying to,
you know, construct these processes that will hopefully
help you in that regard.
27719 MR. McCABE: Because we are deeply
concerned that as we head into this new world, we take
the opportunity to see if we can't -- recognizing the
difficulty of it and the greater competitiveness --
that we take the opportunity now to see if we can't
create the instruments that are not onerous, don't
require you to do an awful lot but create the kind of
playing field in which we all have a chance to succeed.
27720 From the consumer's point of view,
there is a successful launch of these services.
27721 CHAIRPERSON OF THE COMMISSION: The
last question is about the joint marketing committee.
You see that as separate, on one hand a group to
develop a code. One element of the code could be an
affiliation agreement and you are proposing to the
Commission to kind of signal the necessity of an
affiliation agreement. That's what I understand.
27722 On the other hand, the position, not
necessarily to the Commission, but rather to the
industry at large to say it might be helpful to get
into a joint marketing initiative. Am I hearing you
27723 MR. McCABE: I think that is correct.
They happen at different points in time, if you will.
To start with, the code has to be ready before launch
or at the time of licensing so that the discussions may
proceed with some surety.
27724 But the marketing process, it becomes
difficult to get the process under way without knowing
what the product is, but it seems to me that once that
is known it then becomes incumbent upon us and indeed
the distribution industry to work together to do this.
27725 You will recall the problems that
flowed from the last launch and those need not be
27726 My sense is that while there is
always reluctance I think in a situation where one
party the distributors have had a fairly free hand in
these things, always reluctance to give that up, but I
think there is a sense that we could come together and
have a joint approach to this that is satisfactory to
both of us.
27727 I think it would be helpful, as these
things always are, if you were to signal that this
would be a useful thing from your point of view and you
would favour it.
27728 CHAIRPERSON OF THE COMMISSION:
Because the options offered to the Commission are
already kind of entrenched in the framework we have put
forward, which is really not necessarily forgetting
everything we have done, but kind of a change of
approach no doubt.
27729 Frankly, I am trying to understand
what are your propositions and really inviting other
intervenors to react to them because I think that's how
we will get what kind of consensus is developing and
from there to see how we can be supportive of what has
to come from the "les premiers intéressés" who are the
players themselves because both the broadcasters, the
distributors have really an interest to seduce the
viewer, unless the viewer is not really part of the
equation, the Broadcasting Act is certainly not served,
but certainly there is no business either.
27730 MR. McCABE: Yes, we both have that
interest, but we both have other interests too and
that's in a sense my concern, that those other
interests interfere. It may be that distributors feel
that, "well, it is not in our economic interest to move
forward as rapidly with the next generation of boxes
because our business is just fine today and the
technology is still kind of emerging. Maybe we can
just put that off somewhere."
27731 When all of a sudden the business
cases of a lot of the people you have licensed are in
27732 It seems to me -- so that I say there
are other interests or other factors that have to be
taken into account and are taken into account by both
sides of the equation.
27733 It seems to me that what we are
asking you to do is in a sense quite minimal and that
is in respect of the joint launch committee to indicate
your expectation that we would work together. So that
does put pressure on people. It puts it on us. I know
it will put it on others.
27734 It's useful pressure on behalf of a
licensee that you will have licensed to provide
services that have certain amounts of Canadian content,
et cetera, et cetera, and provide some diversity in the
27735 The second thing that we are asking
you to do is in respect of a code, that our view in
coming to this table had been that we would ask that
you in your Decision require, in respect of a code,
that following this proceeding that you in effect call
together, in the same way as you have done in the
migration issue, and we will carry out the process and
bring something to you. We would like at that point
for you to in effect embed that in the conditions of
licence of the players.
27736 The third part, the affiliation
agreement could be embedded in the code, as you have
suggested, but if not, we would ask that you require it
in your Decision.
27737 CHAIRPERSON OF THE COMMISSION: And
in that industry initiative or kind of joint effort do
you see a place for consumers?
27738 MR. McCABE: Absolutely. I think
probably it's admission on our part. I think in
respect of both processes the consumer should be at the
table through some organized, either PIAC or some other
27739 CHAIRPERSON OF THE COMMISSION: My
last question, I forgot to ask you, the same way you
are seeing a joint marketing effort or partnering, do
you see joint sharing of interactive revenues? You
know, in the deployment of those set-top boxes there
will be enhanced boxes. Do you see a possibility of
the revenue sharing?
27740 MS COURTEMANCHE: With respect to
delineating commitments and the benefits of interactive
programming, I guess I would see that as a possibility.
27741 I would probably venture to tell you
that the first version of the industry code could not
solve those questions. It's the early days yet. We
would probably have to wait a year and a half to two
probably before we would have a subsequent process.
The industry would have to get together and discuss
27742 But if we are going to make this
work, we are going to have to share the risk, but we
should also share the benefits and that's the best way
of going about it.
27743 CHAIRPERSON OF THE COMMISSION: Thank
you very much. Merci, Madame la Présidente.
27744 THE CHAIRPERSON: Thank you.
27745 Commissioner Williams.
27746 COMMISSIONER WILLIAMS: Good
afternoon, Mr. McCabe, Ms Courtemanche.
27747 Given that distributors and service
providers have many similar goals and interests, mutual
co-operation would certainly appear to be a key success
27748 How about another form of binding
arbitration, where each side would select their own
representative, but then mutually select a neutral
third party. They meet and decide by a majority
decision and the parties live with that decision.
27749 This would be more of an
industry-based solution, rather than getting the
regulator involved. In effect, you resolve your issues
together or you cast your fate to a neutral third party
and then live with the result, with perhaps time frames
that could forces these issues to be resolved prior to
the September 2001 launch.
27750 If the Commission took the view that
it would be preferable that the industry solved their
own difficulties, how would you feel about that?
27751 MR. McCABE: We would agree to that.
I think that may be a very good way to go. Sylvie put
on the table the sort of final offer approach to
arbitration and this is another approach, which may
indeed provide some more flexibility and I think that
would be a good way to go at it.
27752 COMMISSIONER WILLIAMS: Thank you.
27753 THE CHAIRPERSON: Commissioner
27754 COMMISSIONER WILSON: One quick
question. Are you proposing to extend the terms of the
code to Category 2 services as well? You talked
about -- I heard you talk about having a very big
lineup of services at our door just prior to launch.
27755 Well, if we only licence 10
Category 1s, or approximately 10 Category 1s, then we
would have only 10 people at our door, since we were
quite clear about how the Category 2s would be dealing
with one another and the distributors in more of an
open-entry approach. So I was just curious as to
whether or not you were suggesting that the code would
apply to Category 2 services as well?
27756 MR. McCABE: Yes. In our
proposition, yes, it would. Our sense has been that
while they come into the world with a different
regulatory approach, as you have set out with respect
to Category 1 and Category 2, at the end of the day
they are all in that world together, competing for the
27757 I think the rules of fairness ought
to apply within the strictures that you have applied to
1 and within the provision you have made with respect
to Category 1 services. So I think they are all in
that world competing together and in effect would have
to see the same code applied to them.
27758 Again, sort of casting ourselves
forward a bit further when the migration group has done
its work, we are going to see a world in which we are
all digital services in that same market and we are
going to have to think now about impacts on that
future. So I think as we did the work of this task
force, yes, it would be applying itself to the services
that are to be licensed in this proceeding, but we will
have to keep our eyes on the services that are
eventually to come into the digital world.
27759 MS COURTEMANCHE: Just to be clear
though, we are not advocating that there is a must
carry requirement, not at all. What we are saying is
that in the context of if a distributor is interested
in carrying a particular Category 2 service and
everybody or there seems to be a good consensus at this
hearing that the best success for both the Category 1s
and Category 2s is that there be a joint launch at the
same time, if you are buying into that kind of a
premise, then to the extent that those two services,
the ones that the distributor chooses to carry, then
they should have fairness applied to them as well. Why
27760 As Michael said, in a digital
environment a subscriber will not know the difference
between a Cat 1 and a Cat 2. It will still come down
to issues of packaging and pricing.
27761 MR. McCABE: Those issues of
packaging and pricing, as I say -- our sense is that
packages are not going to be just Category 1s. They
will be Category 1s and 2s and presumably some foreign
services as well.
27762 Our sense is going to have to be that
they are going to have to be looked at together to make
sure that indeed the packaging and pricing is fair in
respect of those services and that in fact the real
cost of pick and pay, for instance, is taken into
account in respect of the prices that these services
are offered in the marketplace or packages are offered
in the marketplace, and other such issues.
27763 COMMISSIONER WILSON: I guess it
leads me -- you know, I sort of sit here with a bit of
a smile on my face, because it leads me to think that
here are the Commissioners sitting around a table
proposing an open entry approach for Category 2
services, and we have the private sector essentially
coming to us and saying: No, we don't want open entry.
We don't want market forces to work. We want
regulatory oversight. We want protection.
27764 That is the message that I am
27765 I remember a memorable exchange
between the Chair of the panel and one of our
broadcasters who talked about being a private
enterprise; you know, let us know what you want and
then get out of our way.
27766 In the framework the Category 2
services, when the Chair of the Commission talked about
moving to this new environment where we have the
transition of the Category 1 services and the
regulatory support that we bring to those, and then the
Category 2 services where the best and the brightest
will survive, the viewer will choose.
27767 That is the Commission giving the
viewer a very real role in deciding what programming
they want to see.
27768 Doesn't that help build the quality
of Canadian programming if it is the best and the
brightest of those that will survive? Some will fail;
maybe many will fail. But it is more of the
marketplace decides. It amuses me, when I sit and
listen, that the regulator is saying we will take open
entry, and the people who are in the marketplace are
saying: No, don't.
27769 Is it your view -- this is a very
long preamble. But is it your view that we are ever
going to be able in this country to have programming
services that are not given significant regulatory
support in order to survive?
27770 MR. McCABE: If the marketplace were
going to decide this issue, I would be right there
alongside you on this. But there are no perfect
marketplaces, and the one that we are launching into is
27771 It is not the market that is going to
decide. It is the cable industry and the satellite
industry that is going to decide. All we want to do is
have a hand in that decision. Marketplaces only work
when there is some balance. When there is imbalance,
as there is today, marketplaces don't work.
27772 COMMISSIONER WILSON: Are you happy
with what DTH has done in their marketing?
27773 MR. McCABE: Yes, we are.
27774 COMMISSIONER WILSON: And they are
the dominant supplier in the digital universe.
27775 MR. McCABE: Yes. But we have also
engaged in heated discussions with LOOK, who go an
entirely different way, and seem, at least to date in
discussions, determined to pursue a way that doesn't
work from the point of view of the services in respect
of one of the major cable companies we are faced with
ongoing -- and I may use the term again -- heated
discussions and exchanges of correspondence which seem
to suggest that they are going in the same direction;
that they are going to go in a direction which
demonstrably doesn't work.
27776 Why? Well, they say it is for
competitive reasons; we have to compete with apparently
LOOK. Why, I don't understand.
27777 And then we see a study from the
Canadian Cable Television Association which in effect
says: We are going to go with this. This is the
ultimate form of choice.
27778 So it does not make a lot of sense to
us. It seems to us that the best interests of the
distribution industry, the production industry, and
indeed of the viewers is served by an approach similar
to ExpressVu's, which seems to offer a value there at a
price. And people like both the value that is offered
and the price.
27779 If we were in fact thinking -- if we
thought we could enter into a reasonably balanced
marketplace, fine. But what we are trying to do here
is create the conditions in which the marketplace will
27780 I don't think we are going to
guarantee the success of any of these services. I
think we are trying to get a hand in the game.
27781 MS COURTEMANCHE: Let's understand.
Even with Category 2 services, you did not create a
strictly marketplace-type service because you do have
undue preference rules that apply. In addition, you
have the --
27782 COMMISSIONER WILSON: And the
27783 MS COURTEMANCHE: You have carriage
five-to-one, and you have Canadian content and Canadian
programming expenditure requirements where you say you
don't get on the system unless you do this much. So if
it were truly an open marketplace system, it would be
open on both sides, not just one side.
27784 That is what we are talking about, an
imbalance. It is an imperfect system, and we are just
trying to redress a little bit that imbalance so that
it makes it easier to shine and to contribute to the
system and provide that diversity.
27785 Like you say, it won't guarantee that
everybody will be a winner and a star but it will be
more conducive to the success. We know this because of
the experience that happened in the early 1980s when
there was nothing.
27786 We are saying that as we are making
that transition -- because everybody agrees we are in
that transition where we are moving to a more open
marketplace system -- let's not just throw away
everything that happened before. Let's take the best
of the past, carry it forward until they can truly fly
on their own.
27787 COMMISSIONER WILSON: I think that is
consistent with the framework that we put out.
27788 MS COURTEMANCHE: Yes.
27789 COMMISSIONER WILSON: The only
conclusion I would reach after this discussion is that
the rumours of the CRTC's demise have been greatly
exaggerated. It sounds like there is a role for us
--- Laughter / Rires
27790 MR. McCABE: There may be more awards
in your future.
27791 THE CHAIRPERSON: Thank you,
Mr. McCabe, Madam Courtemanche.
27792 Mr. Secretary, please.
27793 MR. CUSSONS: Thank you, Madam Chair.
27794 I would now like to invite the
Canadian Cable Systems Alliance to come forward and
present its intervention, please.
--- Pause / Pause
27795 THE CHAIRPERSON: Good afternoon.
27796 MR. WECKERS: Good afternoon.
INTERVENTION / INTERVENTION
27797 MR. WECKERS: Madam Chair,
Commissioners, I am Walter Weckers, President and CEO
of the Canadian Cable Systems Alliance Inc. It is with
pleasure that we take part in this important hearing to
add some brief comments to our written submission.
27798 First, permit me to introduce my
27799 On my immediate right is Alyson
Townsend, who is General Counsel and COO of CCSA.
27800 On my immediate left is Jan Pisko,
who is Vice-President and General Manager of Monarch
Cablesystems in Medicine Hat, Alberta.
27801 On my far right is David Baxter,
President and CEO of Westman Communications Group in
27802 CCSA has consistently been supportive
of the creation of quality digital programming with a
minimum or regulatory requirements. CCSA agrees with
the fundamental goal noted in the Licensing Framework
Decision: that new services should enhance diversity
and choice for viewers.
27803 The customer has been promised
quality and choice through the implementation of
digital technology. CCSA Companies are committed to
fulfilling this promise.
27804 CCSA is, incidentally, a buying
group, not a regulatory lobby agency, of about 91 cable
companies active in every province of the country. We
represent the commercial interests of independent
distributors often serving communities distant from
large metropolitan areas.
27805 These independent operators are
committed to delivering to the Canadian consumers the
best possible technology and services at affordable
cost. They are seeking and finding ways to provide
their communities with the connectivity and the choices
that the Canadian consumer expects and deserves. These
companies represent, in our view, the independent
27806 There are great challenges for CCSA
companies in this new world of digital technology. Of
the 410 systems represented by CCSA, only 22 are
currently large enough to be considered Class 1
systems. From a pure economic point of view, most CCSA
companies are too small for the acquisition and
operation of their own digital television platforms.
27807 Yet, all of these companies, without
exception, are urgently defining the manner in which
they will distribute the new channels the Commission
will license. They must do so for strategic
competitive reasons, not because of regulation.
27808 Today, the manner in which they will
do so is unclear, as are many of the commercial
variables they confront. Some have already invested in
their own digital head-end equipment. Others are about
to do so. Some are forging new alliances with
neighbouring systems to share a common digital
27809 CCSA companies are struggling with
technology, the pricing, and the fact that they must
rely upon a direct competitor for transport of digital
27810 In spite of the challenges, all
distribution undertakings, no matter how small, must
find their own digital solution.
27811 While a great deal is unknown, CCSA
is mandated to seek commercial parameters to assist in
planning. We hope that these parameters will foster
the beginnings of mutually successful partnerships with
new digital licensees.
27812 MS TOWNSEND: To establish an
effective partnership, CCSA considers the following
principles paramount to their ability to serve their
27813 There should be no requirement for a
"digital basic" package. Digital offerings must
provide true choice to the consumer.
27814 There should be no packaging
restrictions expected by contract or license.
Consumers have consistently stated since the Structural
Hearing that they want flexibility and choice.
Stand-alone pricing should be available and reasonable.
27815 Satellite transponder positions must
be co-ordinated to make efficient distribution
possible. CCSA suggests that this be done through a
Technical Implementation Committee.
27816 Programmers must be responsible for
delivering the signal to the head-end in a suitable
format. Any costs of "transport' should be a cost of
the programmer's business, including pay per view
27817 CCSA will request a Master Agreement
to be available to all CCSA companies, aggregating all
CCSA subscribers and providing for its standard
27818 If there is to be penetration-based
pricing, the penetration must be based upon the
universe of digital subscribers -- not the total number
of analog subscribers.
27819 CCSA will seek a strong commitment to
marketing from new licensees.
27820 CCSA is concerned that a number of
successful licensees will have ownership in existing
analog services. In negotiations, we have already seen
distribution and terms for one service tied to
distribution and terms for another service.
Concentration of ownership potentially limits choice
for distributors and consumers. This hearing is an
opportunity to introduce new voices in Canadian
27821 We are pleased to confirm the
statements made here earlier by Stornoway
Communications and our commitment to new voices is
illustrated by way of a fully executed distribution
agreements that will take effect as and when Stornoway
is granted one or more licenses by the Commission.
These agreements served as a litmus test that CCSA's
commercial framework is reasonable and respectful of
the needs of the programmers.
27822 MR. BAXTER: Westman serves 28,000
cable customers in 35 cable systems throughout western
Manitoba. We were the first small cable company in
Canada to offer its customers the benefits of digital
distribution. We have been asked to speak to the
practicalities of digital implementation.
27823 In the fall of 1999, Westman made a
significant capital commitment by purchasing digital
head-end equipment. This substantial cost, which is
similar in magnitude regardless of system size, must be
recovered from a relatively small digital customer
base. It is critical that our digital customer base
grows to justify our investment. Westman's digital
investment is reliant on the approval of strong
Canadian digital services that set the stage for other
future new services, including those that are fully
27824 While the continuing costs for
digital set-top boxes are significant, the deployment
of these devices means we have a customer willing to
purchase digital services, providing a new source of
27825 Yet costs are still unknown. For
example, an interactive program guide was implemented,
the cost of which is uncertain and our bargaining power
is limited as there is currently only one supplier.
Transport costs to deliver many of the digital signals
to our head-end -- such as paying for the delivery of
critical pay per view channels -- virtually eliminate
any opportunity to achieve a margin.
27826 We launched digital technology
knowing that it is the future of distribution even
though our challenges are very different than those
faced by large, consolidated and vertically integrated
distributors. We must plan carefully and translate our
vision into business reality as soon as possible.
27827 MS PISKO: Monarch Cablesystems Ltd.
launched its digital offering last Friday, August 25th.
With significant unknowns Monarch, like Westman, is
certain that the capital risk is necessary to the
future of our company.
27828 We are here today, however,
representing not only Monarch and Westman, but also
many smaller CCSA companies. Monarch, having 21
Class 3 systems is well acquainted with the fact that
the economics and uncertainties increase exponentially
as subscriber numbers decrease. CCSA represents 387
Class 2 and 3 systems. By current definition all under
27829 The issue CCSA takes with the
framework outlined by the Commission is the stringent
distribution requirements and limitations for small
systems. The economics of digital are so overwhelming
for these systems that "must carry" requirements
discourage digital implementation if it is mandated in
a manner that requires an "all or nothing" approach.
27830 Small systems must have the
flexibility to add services on a schedule that meets
the financial and technical resources available. The
CCTA has made a proposal to limit mandatory carriage to
Class 1 systems serving over 20,000. We wholeheartedly
support this position.
27831 In the licensing framework decision,
only Class 3 systems would be allowed to distribute
these new services in analog format. This limits the
distribution of these new services in Class 2 systems
that have not yet an economically viable digital
27832 The framework decision also requires
digital distribution in systems interconnected with a
Class 1 or 2 system. This again penalizes these
systems, and their customers, that truly cannot afford
the digital investment at this time. The simple fact
of interconnection does not create a business case for
digital distribution. The focus for small systems must
be flexibility and not technology. Real, affordable
digital options for small systems do not exist at this
27833 MR. WECKERS: We have presented to
all applicants the principles we propose that should
guide distribution agreements. We have focused these
parameters on creating an environment that we believe
reflects the objectives of the Commission as well as
the expectations of programmers and the needs of small
27834 But, in the end, most central to our
vision is the desire to afford the customer quality,
affordability and true choice.
27835 Thank you.
27836 THE CHAIRPERSON: Thank you,
Mr. Weckers and your colleagues.
27837 Commissioner Demers, please.
27838 COMMISSIONER DEMERS: Thank you,
27839 Good afternoon. I think my questions
will start first with your written observations that
were already with us, but I could see from your oral
presentations that they are all knit together, but you
may wish to refer me to your oral presentation if I
tend to forget about it.
27840 The first -- and it is something you
have underlined today -- the digital challenge of small
cable systems that you represent.
27841 In your written intervention you note
the challenge faced by small cable companies in rolling
out digital services given the uncertainties in market
demand, revenues and expenses, and you have of course
underlined that today, and you said and that:
"The successful convergence of
affordable technology and
desirable programming is
fundamental to the
implementation of the digital
services." (As read)
27842 Can you provide us your views on what
steps the Commission can take to ensure that this
successful convergence takes place?
27843 MR. WECKERS: As we said today, we
are in support of the initiative that you are
27844 The reality is that there is an
appetite in the investment community and probably in
the marketplace for a wide selection of services. So
we believe that they should be funded, they should have
an opportunity to exist, and we encourage that.
27845 What we are trying to say -- what we
did say in our written submission was that this is a
true -- the word is overused today perhaps, but it is a
true partnership. There is a programming content side
to the equation and there is a distribution side, a
retail side to this equation and one cannot live
without the other.
27846 So we believe that your initiative to
license, presumably a large or potentially a large
number of services, is in our interest, is in the
interest of the programming community, but it should be
and it is done with an eye on what kind of services
should Canadians have access to.
27847 Beyond that, we quickly start to
diverge sometimes it would seem, but when we read these
things, sometimes I think -- I'm saying the glass is
half full and someone else is saying the glass is half
empty. At the core of it lies a true coming together
of programmers and distributors who must make this
work. We are all trying to grapple with how is that
27848 We like to think that the competitive
marketplace has achieved greater inroads in this whole
equation than it is sometimes given credit.
Ironically, it is perhaps because of the vertical
integration of these services and these companies that
this is taking place.
27849 One would assume that a large company
that is vertically integrated will have an interest to
support and form the launch of its own services. They
will be persuaded in some form and are persuaded in
some form to bring along services of others. That then
all of a sudden creates a marketplace, or at least a
presence in the marketplace, of these new services.
27850 If you accept that, and that is in
fact the truth, then you can look beyond that launch
scenario at companies like those represented within
CCSA's bargaining unit, if you will, and look at how
they would react to that. In reality, they would react
to it by having to assess a decision not to distribute
the service that is readily available from a direct DTH
or an MDS competitor in their own marketplace. They
would have to make very careful assessments dealing
with the risk of either introducing or not introducing
a given service.
27851 If the decision is not to introduce
it, it has to be because they believe the marketplace
will let them not introduce the service, but my
prediction is that in most cases, if not in all cases,
the desire on the part of a small independent cable
company is to provide as many services as possible.
27852 This is why we have made the
argument, for example, that pay per view services that
are not available today in any of the small cable
systems in Canada at all should be made readily
available at their cable head end in analog for analog
or digital distribution so that they in fact have a
small measure of economic benefit from doing that.
27853 It may be worth noting, for example,
that in today's environment it would cost a small cable
company -- well, any cable company that receives these
pay per view channels over the air or by satellite
rather, would have to pay approximately $1.92 per
set-top box, be that analog or digital, which exceeds
the margin of a movie.
27854 If you assume a 100 per cent buy
rate, in other words, there is a negative margin before
you have costs of selling, marketing, collecting
orders, billing orders, et cetera, et cetera. It's
those elements in the marketplace that we are trying to
27855 I know I have been drifting away from
your basic question. We believe it is an issue that we
work together with the programmers. The vertically
integrated companies are in fact going to be
responsible for the launch, will in fact create a
certain imbalance in the marketplace that we will have
to respond to.
27856 COMMISSIONER DEMERS: Thank you. We
will get to some of the ingredients, I think, as we go
along. The first point, and this is something you have
covered in your presentation today, is the package. It
was quite clear that you have clear ideas about what
the Commission should do in the case of the package.
27857 Could you elaborate on what your
concerns are in this regard and why you feel it is
necessary for the Commission to clarify this matter.
27858 MS TOWNSEND: In relation to the
packaging, what we are suggesting is that the services
be available on an à la carte basis. Now, the reality
of the marketplace may well be that there are options
of all kinds, but this is an option that the consumers
have been saying that they have wanted since the early
27859 The companies that we represent are
absolutely positive that this is something that they
need to be able to offer. Insofar as the clarification
goes, perhaps that was an overstatement, but already
the marketplace was talking in terms that echoed analog
distribution rather than digital distribution. They
were talking about digital basic.
27860 We knew that because we were
negotiating agreements and possibly that was not
necessarily common knowledge, but already there was
talk of digital basic, digital tier.
27861 When the Commission came out with the
decision about the Category 1, that became equated in
the marketplace with digital basic, so we wanted to
bring that to your attention. It may well be that that
was never the intention of the Commission.
27862 MR. WECKERS: I would like to add
that while we say that there should be à la carte
distribution available, it doesn't automatically mean
that that's the only way that it can be bought. We do
favour packaging. We believe there is an absolute need
for intelligent, smart packaging.
27863 We finally got through to you.
27864 THE CHAIRPERSON: We did an
impeachment last week. Now it's the Senate.
27865 MR. WECKERS: It's another awards
calling in. These things come in threes, you know.
27866 We believe that there will be
packaging. What we really are saying, though, is that
there has to be a decision made that we are confident
as a group or as a Commission or as programmers that
the programming that's going to be created by these new
licensees is relevant and is of a good quality.
27867 I have to admit that it sounds almost
like a little bit of fear on the part of some of the
licensees that perhaps they are not as good and they
need some protection here. Well, if our customers
perceive that we are in fact limiting choice, as they
have been telling us for the last ten years, thanks to
the nature of analog trapping, they have been telling
us that this is not a suitable solution for them.
27868 If we are going to be in tune with
our marketplace, then we cannot say that lack of
flexibility that is mandated is something that is good
for us and, therefore, good for the consumer. We don't
even think it's good for the programmers.
27869 We say give a customer the chance to
buy something if that is really all they want. If you
look at some of the genres that have been proposed here
as Category 1, I would say there are some that an
individual may say "That's the one I want and I don't
want to buy the other ones".
27870 If we are perceived as the party that
limits that choice, not the programmer but us, then we
have a problem. Only recently -- last week in the Star
Jim Bodel was writing about this. You know, the cable
guys are loath to give up their packaging rights.
Well, we are not.
27871 We have been saying for quite a while
now that we believe that the customer should have the
choice. We also agree at the same time with the
programming community that intelligent packaging is a
natural. It is already proven, by the way, with
ExpressVu where apparently, I'm told by CAB today,
80 per cent of their customers take all.
27872 In spite of giving that opportunity
to choose, the majority of their customers buy
everything. Well, if that is the truth in the
marketplace today, then why are we afraid of offering
choice? We shouldn't be.
27873 COMMISSIONER DEMERS: Thank you very
much. I will move along. On the number of
Category 1s, you have indicated in your presentation
today that there should be quite a few. How many would
be the question today?
27874 MR. WECKERS: Actually, we would like
one category only, all the Category 2s, to be honest
with you, but we are not going to get that.
27875 We are practical. We do bring your
attention, as Ms Pisko mentioned, that to impose as a
must carry to smaller cable systems who are still
grappling with the very investment that they have to
make in digital technology, it serves more as a
distraction than it is a help.
27876 I think with that by and large, with
the exception of that important statement, we have
passed that bridge. We are not fighting that battle.
27877 We do like a lot of programming
choice. We hope it is good. We hope it is affordable
to both us and to our end user and that it will be
presented in such a way that it in fact supports the
digital investment that we have to make.
27878 It serves repeating or it bears
repeating that we make the investment in an enormous
distribution that is competitive with the DTH business.
We will ultimately in the small communities be the way
in which diversity can be offered at the retail level.
27879 COMMISSIONER DEMERS: So the
suggestion that the Commission made in its Public
Notice of approximately ten Category 1s is not -- what
would you say to that?
27880 MR. WECKERS: Go ahead.
27881 COMMISSIONER DEMERS: You have
particular comments on the Category 1s in the French
language as to the number that the Commission --
27882 MR. WECKERS: I respectfully,
regretfully, would like to not answer that question.
The reason is at this point in time the CCSA companies
do not include any companies from Quebec. Actually I
made a mistake in my presentation by saying "all
provinces". I apologize for that.
27883 On the basis that we do not represent
the commercial interests of companies in that
community, it would be presumptuous on my part to offer
comment and I apologize for that.
27884 COMMISSIONER DEMERS: Thank you. As
far as the launching date, I don't recall any comments
that you made in your presentation on that.
27885 So on the launching really,
generally, the launching date, the time between the
Commission's decision and the launch, do you have
comments on that as to make it a successful launch?
27886 MR. WECKERS: Yes. The comment that
we have specifically singled out is one to take a look
at what digital streams these new channels will be
travelling on. It would make it far less attractive
financially for smaller companies to launch digital
service if each of the, say, 10 services were to take a
position on a transponder that requires us to buy one
of these so-called digital pods.
27887 Whereas, they could all be,
theoretically, accommodated on as few as two. So that
is the first problem, that if left unattended, for
argument's sake, this could surprise us.
27888 It would not be of any great
consequence to larger companies, but it would be quite
substantial to smaller companies.
27889 That is a little bit compounded by
the nature of the business. If I was one of the
programming licensees who has a number of analog
services today and was successful in getting new
digital services, I would take a hard look at my
compression rate for the analog service and see if I
could squeeze out a few more -- a little bit of
bandwidth to accommodate the digital service.
27890 If that were to be the case and you
look at how these existing incumbents are positioned on
the satellite and, in fact, the likelihood of the
smaller companies having to invest in multiple pods for
a handful of services is more likely to happen.
27891 I have perhaps already identified the
crux of the matter here, that it's nice to have the
theory but in practice this is a bandwidth that these
companies are buying already. If they can make the
best use of that they will try and do that, but it
would be at our expense to make a greater investment at
the head end.
27892 MS TOWNSEND: Excuse me, you know
it's interesting that the talk here has been about a
launch, as if there is going to be one particular
period of time this is all going to come down, but
there are two companies represented here that have
actually already launched digital, who are standing by
waiting for the product. I know because they keep
phoning me and asking me when we'll have agreements and
that sort of thing.
27893 But I have heard Dave Baxter say that
it's as soon as possible. And when the product is
there, I believe it will be launched.
27894 MR. BAXTER: Maybe I can provide some
follow-up to Alyson's comment. We, as I indicated in
our opening remarks, are extremely interested in
increasing the deployment of digital services. We made
the investment in a digital head end and now it's a
matter of getting a critical mass of services that our
customers want, they desire, they can afford and offers
27895 I think with those components and
providing that additional source of services on a
digital box will make them more receptive to wanting
one, to introduce that technology into their homes, and
with that critical mass then comes the ability to
really expand it
27896 I think that's both to the
programmer's benefit and to ours because having more
people with digital technology at their disposal I
think builds a stronger business case going forward,
both in advertising and subscription revenue bases and
for us growth in our customer services' revenues.
27897 As far as actual launch dates, that
would depend on in part when the suppliers, the
programmers, are ready with a quality product, the
27898 As well, there is a certain ideal
window for launch and that tends to be not in the
summer, for example. So, we would like to see it,
certainly if it is not before January, February, we
would like to see it in the fall, but certainly time is
of the essence and we are keenly interested in
launching those additional services.
27899 COMMISSIONER DEMERS: Thank you.
27900 Do you have any comments to make with
respect to some of your members who would not be "à la
page" as the two that you have with you, as far as
launching is concerned?
27901 MS TOWNSEND: I think as far as those
companies are concerned the critical question is when
they can afford the equipment and whether there are
ways that in particular the small Class 2s, part 3s,
even the small Class 1s will be able to afford the
27902 So their concern right now is not
launch, but how to actually technically do this.
27903 MR. WECKERS: If I may add to that,
the cable industry is really the industry that has to
deal with the transition of the technology. The new
licensees, the DTH, MDS, of course, are by nature
27904 So it means that the relative cost
and relative profitability of the new services is of
great importance to us.
27905 We believe these services will be
launched some time in the fall of next year.
27906 Most of the CCSA companies,
therefore, use that as a yardstick and as a deadline to
say "I'd better have my act together between now and
then." Because it is not the fact so much that they
are launching, but that they would be instantly
available in my territory through at least two
competitors and sometimes three competitors that will
give them the absolute need to make their decisions and
have us help them make their decisions from a financial
and from a commercial point of view.
27907 So we expect that the launch will
take place in the fall of next year.
27908 COMMISSIONER DEMERS: Thank you.
27909 You have recommended a technical
implementation committee. Do you think that this
committee needs to be established by the Commission?
27910 MR. WECKERS: Not by definition. I
believe that it's possible for industry groups or large
players to get together if they agree on the need
27911 As I pointed out in my small
diversion on that particular topic, there will be some
obstacles even to have that group work effectively
because of what I see as a vested interest on the part
of some licensees.
27912 That apart, I would hope -- there's
always a chance for the players to get together and not
to rely on the Commission to start out. That may be
wishful thinking on my part, but it's the first option
I would prefer.
27913 COMMISSIONER DEMERS: Thank you.
27914 On packaging and marketing you have
of course made reference to that, but the point I want
to raise is that in your written intervention you state
that contractual agreements must permit cable
distributors to match the degree of packaging
flexibility offered by competing DTH and MDS. Could
you describe the discrepancies now existing in the
27915 MR. WECKERS: At this time there are
a number of analog services that are packaged
differently by the DTH providers than we do, by virtue
of the fact that they have an addressable digital
technology and we have, say, two or three unscrambled
analog tiers. The very nature of an analog tier limits
choice, as you know.
27916 That's already working at our
disadvantage. We hope to bring more flexibility to
that particular situation as a result of the migration
from analog to digital, which is a different topic, and
we certainly would expect that with any future
licensees when we are using the same technology anyway
that the same level of flexibility be afforded to us.
27917 Not necessarily more, but we hope, as
we said before, that there would be a stand alone "à la
carte" option for a customer, given that we believe
overall packaging would be still beneficial to the
27918 COMMISSIONER DEMERS: Thank you.
27919 I have a last point on interactivity.
You touched on this subject today.
27920 In your written intervention you
refer to the open and non-proprietary tenders. In what
ways are you contributing to the development of such
standards, your association or your members?
27921 MR. WECKERS: CCSA itself does not.
It's not our mandate to participate in those
activities. A number of our companies are members of
CCTA, as you know, and a number of them are also member
of CableLabs and participate there, but it is not
within our mandate to make a direct contribution.
27922 COMMISSIONER DEMERS: Thank you.
27923 Are there any -- and maybe this is
for the two members of your team that are already
digital, are there any particular interactive features
that have been proposed that your current or proposed
set-top boxes will not be able to support? I am sure
you have followed the hearings.
27924 MR. BAXTER: I am glad you prefaced
it with that because I haven't followed the hearings in
that much detail to note what the different
interactivity plans are.
27925 I think I would, though, caution the
Commission that while we are keenly interested in more
expanded forms of full interactivity, as are the
programmers, I think that's still some time away.
There's the development of standards that needs to
happen for there to be a broader commercial roll-out of
the technology which enables it.
27926 From our standpoint, I should
mention, as well, there are some head-end type
solutions, server-based solutions, that are starting to
emerge as ways of providing interactivity.
27927 For a smaller cable operator, such as
ourselves and Monarch -- and there's a lot of CCSA
members that are much smaller than us -- we don't have
the capability to make the investment in the
head-end-type servers. Our preference is to have an
advanced digital box which, in essence, makes that,
then, a variable cost, because of the low number of
digital customers that we have to spread that cost
27928 So we are waiting for a
standard-spaced inter-operable digital box which will
have additional processing power, memory capabilities,
which, then, can result in more advanced applications
which integrate more fully with a programmer's plans
and their programming.
27929 COMMISSIONER DEMERS: We have asked
all the applicants whether distributors should be
obliged to carry the interactive set-top box components
of the services that would receive Category 1 licences.
27930 So, what is your opinion on this
27931 MR. WECKERS: We have identified that
in our submission by saying that the interactive
aspects of the service ought to be the subject of
subsequent negotiations as and when there's more
27932 It's our hope -- and I think it's the
programmer's hope -- that, indeed, there is a positive
revenue stream there, which they should benefit from
because they would create the content and the demand
and we would contribute to by providing them with the
infrastructure to collect all that information.
27933 So there has to be a balance and,
hopefully, a negotiated approach to solving that issue.
27934 But, fundamentally, of course, we are
in favour of interactive programming and the commercial
opportunity that that should represent for us.
27935 COMMISSIONER DEMERS: It has been
suggested that the Commission hold a process to address
issues such as cost sharing and access to the set-top
27936 Do you agree with this suggestion for
a separate process? And if so, a time frame, if you
have? But, first -- the first question first.
27937 MR. WECKERS: No, we don't agree with
that. We think that this is something that leads us
down to more regulation rather than market forces.
27938 We believe that we should have an
opportunity to look at the business proposition that
exists and that even -- it doesn't exist today, by the
way. It's too easy to come to the Commission and say,
"You fix it". I fundamentally don't believe in that --
and many of our members are of the same view.
27939 Although, just to be perfectly
complete with that answer, that is not something that
has been thoroughly canvassed within our group. But it
is our fundamental attitude to support less regulation
and to recognize that the marketplace is having a very
strong influence and that this will likely also apply
to interactive services.
27940 COMMISSIONER DEMERS: Thank you very
27941 Thank you, Madam Chair.
27942 THE CHAIRPERSON: Commissioner
27943 COMMISSIONER WILLIAMS: Good
27944 Last week, when questioning the
Stornoway proposals, they indicated that they had
reached an agreement with your Association -- as you
also mentioned in your remarks today -- on the
packaging distribution issues surrounding the new
Category 1 applications.
27945 Would you be prepared to share the
details of this agreement and comment on the strengths
and advantages that it provides to both parties to it?
27946 MS TOWNSEND: I would really like to
do that but, unfortunately, as in all of our
agreements, there are confidentiality provisions that
we cannot discuss the particular contents.
27947 However, what I can say --
27948 COMMISSIONER WILLIAMS: Then talk,
maybe, about the framework of it and the strengths and
the advantages that would be offered to both parties,
as opposed to the exact nature.
27949 MS TOWNSEND: Well, I think that much
of it would have been covered in what we talked about
as our proposed parameters for negotiations. Those are
the parameters that we are going to sit down with every
digital licensee and we are -- those are the principles
that have been mandated to us by the companies that we
27950 So, in the broadest terms, there were
our issues, and we have reached a satisfactory
27951 COMMISSIONER WILLIAMS: Okay. Thank
27952 My other comments were -- I have been
listening, with interest, to your concerns about the
challenges of funding new services and the boxes and
head-end equipment and -- it's not a new -- it's not a
27953 In the early 1980s, when the pay
television services were being introduced across the
country, many of these same questions arose.
27954 I know, at that time, I was involved
in the 2,500-subscriber Yellowknife cable company, very
small, northern ,isolated, but we wanted our customers
to have the same or better entertainment options as our
southern counterparts. Our bankers, understandably,
were nervous. It's a new service. We were a small
company. We were in a remote area. The decoder box
that we selected and the associated equipment came out
to about $70 a unit, based upon the quantities that we
were buying. We had determined that we would need
400 subscribers to make a profitable business case,
$28-30,000, which we didn't have. But we still wanted
to bring this service to our customers. We felt that
they would enjoy it as much as anyone, maybe even more
so because of the northern remote location.
27955 So, I sent our marketing manager out
with the challenges of raising a $75 deposit from
400 customers, who would knock on their door and say,
"Look, if you give us $75 and I'm able to convince
400 of you to do so, we are going to order the
equipment, we are going to introduce pay television to
this community and you have to do it in two months"
because we wanted to participate in the launch along
with everyone else and we needed the time to order the
27956 Well, the challenge was daunting. It
was July 1. This guy goes out and starts asking for a
cash deposit for a service that may or may not be
introduced unless the target of 400 was achieved.
27957 Well, to make a long story short, we
succeeded and launched pay TV along with the rest of
27958 So I guess my point to that is, in a
small system, where flexibility and innovation have to
be the rule in order to achieve the success, you can't
go by the cookie-cutter arrangements that have worked
in other places because you have to do it differently,
and that was in the early eighties.
27959 A few years later -- fast forward --
it's 1990, and the company is now a
4,500-basic-sub-company and it's offering more
television services than any other cable company in the
country -- and that's on 4,500 subscribers.
27960 So, I'm of the view that a small
cable company, because of its innovation and
flexibility and lack of bureaucracy and agility, can
succeed very well in this type of environment, provided
that the creativity is there and the will and the
27961 Now, I recognize it's a little more
complicated now because you have got competitors, like
Look and ExpressVu, looking over your shoulder and they
have got their national pricing plans; so you start
bumping up financial concerns relatively quickly if you
are not careful. But you do have the bulk of the
customers in all these small communities, now, and if
you don't keep up, then that will change. But you do
have to keep up.
27962 MR. WECKERS: Well, that's why we
said our companies want to be in the business and they
are not sitting there saying, "We should sell out".
Some of them do, by the way -- and you see it happen on
a fairly regular basis. But there's still a large
number of them there that are fulfilling a local need,
that are local businesses and they want to continue
that. So they are not throwing in the towel and they
are looking very much toward us to try and aggregate
their business and get reasonable commercial deals so
that they can, in fact, move forward. But that
underscores, basically, our belief that there should be
flexibility, light-handed regulation, which we hear so
much about, is always welcome and they will deliver,
and they will compete -- given a chance.
27963 THE CHAIRPERSON: And you thought all
of us were boring, non-entrepreneurial regulators!
--- Laughter / Rires
27964 MR. WECKERS: We never would think
anything of the kind.
27965 THE CHAIRPERSON: Not now!
--- Laughter / Rires
27966 MR. BAXTER: If I can just add to the
remarks that Mr. Weckers provided.
27967 I think the circumstances in our
industry have changed a great deal, over the years. We
are in a competitive environment, no longer a monopoly
environment. We now -- as we do digital upgrades, we
upgrade our systems to additional channel capacity to
effectively compete in a 150-plus-channel universe,
there's no guarantees that all of the customers in that
community are going to go with our service. So the
population of potential customers, digital customers,
is somewhat lower. The digital head-end is much more
expensive, by several magnitudes, compared to the
analog pay TV head-ends. Similarly, the $100 analog
box is now a $500 digital box, and with very
27968 In Westman's case we have done it,
and I am not here to complain. We certainly made that
decision to make that investment with our eyes wide
27969 On the other hand, I would not point
to the rest of the small system operators in Canada and
say that this is an easy decision to make this
investment. They are certainly motivated to be
competitive. They want their businesses to thrive and
grow in a competitive environment. If they can
possibly find a way, any way they can, they are going
to do it. Certainly they are business people who see
the need to expand their services and become
competitive. They are looking at all kinds of
different options to achieve that.
27970 We intend to get there some day. We,
by the way, have systems that are not digital. We are
striving to find a way in those smaller systems, even
smaller than the systems where we have launched
digital, to find a solution to that.
27971 I think, though, that in the medium
term that is not going to all happen overnight. I
think one of the things we are asking for is some
flexibility in smaller systems, some leeway to give us
that opportunity in the meantime to compete.
27972 THE CHAIRPERSON: Thank you very
much, Mr. Weckers and your colleagues. We appreciate
27973 MR. WECKERS: Thank you.
27974 THE CHAIRPERSON: We will now take a
well-deserved break of 15 minutes.
27975 Nous reprendrons dans 15 minutes.
--- Upon recessing at 1545 / Suspension à 1545
--- Upon resuming at 1600 / Reprise à 1600
27976 THE CHAIRPERSON: Welcome back to our
27977 Nous vous resouhaitons la bienvenue.
Je voudrais vous avertir que nous avons l'intention de
finir la liste des intervenants qui sont à l'agenda
pour aujourd'hui. Donc nous allons siéger possiblement
jusqu'à huit heures ou un peu plus tard.
27978 Nous prendrons une pause vers
6 h 30 pour une demi-heure. Je voulais vous avertir à
l'avance pour que vous puissiez aller vous chercher du
café ou ce que vous voulez avant que tout ferme ici.
27979 Je suis certaine que le panel lui
sera libéré avant le temps. Donc vous ne pouvez pas
vous lever et aller vous acheter un sandwich.
27980 We will complete the agenda today,
which may require us to sit until possibly 8:00. We
will take a break at 6:30 for about half an hour. I
wanted to let you know so that you can get a sandwich
or coffee, if you need, before everything closes --
except for the panel, of course. They are not allowed
to get up.
27981 Mr. Secretary, please.
27982 MR. CUSSONS: Thank you, Madam Chair.
27983 We will now hear the intervention by
the Canadian Cable Television Association. We have
Ms Janet Yale and her colleagues.
27984 Ms Yale.
INTERVENTION / INTERVENTION
27985 MS YALE: Thank you and good
27986 Before I proceed to the formal
presentation, I just wanted to add our note of
congratulations to the award that you won earlier
today. As many of our members are, and have been,
active members in CISC processes for a long time, it is
certainly encouraging to see that all of our hard work
has been recognized.
27987 My name is Janet Yale, and I am
President and CEO of the Canadian Cable Television
27988 Allow me to introduce our team.
27989 With me today at the front table are,
starting at my far left, Colette Watson,
Vice-President, External Relations, Rogers Cable Inc;
Ken Stein, Senior Vice-President, Corporate and
Regulatory Affairs, Shaw Communications Inc.; Pierre
Gagnon, Vice-President, Public and Regulatory Affairs,
Vidéotron Communications Inc.; and Tom McCutcheon,
Vice-President, Marketing and Communications, Cogeco
Cable Systems Inc.
27990 At the back table we have, again
starting on the left: Mike Lee, Vice-President General
Manager of Interactive Television Services, Rogers
Cable Inc.; Chris Kelly, President, The Strategic
Counsel; Chris Taylor, Senior Vice-President, Law and
Regulatory Affairs, CCTA; Michèle Beck, Vice-President
Regulatory Engineering, CCTA; and Lysline Parenteau,
who is Director of our Francophone Systems at the Cable
27991 As we have watched and listened to
the hearings over the past few weeks, we have been
struck by two things.
27992 First, we have been impressed by the
creativity and enthusiasm of the applicants and the
quality of their proposed services. Clearly, Canadian
television viewers can look forward to seeing some
tremendous new digital services in the near future.
27993 Second, it has become increasingly
clear to us that we are no longer operating in the old
analog world. Indeed, the emergence of the Internet
has both fundamentally changed consumer expectations
about how information and entertainment are received
and has created incentives for traditional broadcasters
to replicate the cutting edge innovations of new media
27994 We are pleased to note in this
respect that CPAC, the Cable Public Affairs Channel, in
addition to televising this hearing, is streaming the
video on its Web site in real time.
27995 Your digital framework decision has
clearly brought us to a new and exciting era in
Canadian broadcasting. And frankly, we can't wait to
get on with it.
27996 Selon des rapports récents publiés
par l'industrie, actuellement au Canada il y a plus de
1,25 millions d'abonnés aux services numériques dont la
majorité est abonnée aux services par satellite.
27997 Au cours des dix dernières années,
les membres de l'ACTC ont consacré six milliards de
dollars pour mettre à niveau leurs réseaux analogiques.
Aujourd'hui, plus de 5,5 millions de foyers sont en
mesure de recevoir les services numériques.
27998 L'industrie du câble est très fière
des réalisations accomplies pour permettre à ses
abonnés de bénéficier de la technologie numérique.
27999 We believe that the Commission got it
right when it established the policy framework for the
licensing of new digital services. A balanced and
creative approach, it recognizes that ultimately the
key drivers for increased penetration of digital
services will be consumer appeal, reasonable prices and
28000 The framework also recognizes that
the very nature of the digital environment demands a
regulatory approach that reflects its inherent risks
and opportunities. An overlay of analog rules in the
digital world would prevent both programmers and
distributors from being able to fully deliver to
consumers the many advantages of digital distribution.
28001 For this reason, the Commission has
set out a framework that is not predicated on detailed
codes and regulations. Instead, it provides a few
specific rules and some broad guidelines within which
distributors will have the necessary flexibility to
respond to competitive pressures and customer demands.
28002 Some of the parties in this
proceeding are asking the Commission to revisit both
the spirit and the letter of the digital framework. We
strongly urge you not to do so. This is, after all,
the new frontier and we must all share in the risks and
rewards that accompany a new and uncertain endeavour.
28003 In this respect, the Commission's
existing approach to allegations of undue preference is
more appropriate than trying to devise a detailed code
of behavioural "dos and don'ts".
28004 The key rules have been established,
and beyond this specific allegations of undue
preference can be addressed by the Commission under the
28005 With respect to the launch of the new
services, we want to emphasize at the outset that we
are committed to working co-operatively with the
licensees to ensure that the new services are launched
successfully. Obviously, it is in everybody's best
interest to launch as many new services as possible, to
package these services as attractively as possible, and
to promote them as aggressively as possible.
28006 In this regard, we note that several
applicants have suggested that launch issues could be
worked out in a joint industry forum or CISC-like
28007 In our view, although CISC is a very
useful tool for working out technical or administrative
issues of common industry concern, it is a process
ill-suited to the negotiation of commercial agreements.
In a highly competitive environment, these contracts
will necessarily have to be negotiated on a bilateral
basis in response to market conditions.
28008 As we noted earlier, there will be
every incentive for all the players to ensure that the
new services are launched in a co-ordinated and
co-operative fashion. In the event of an impasse, the
Commission can deal with the dispute in an expedited
manner under its dispute resolution process.
28009 In terms of a launch date, we note
that Canadian viewers have already waited a long time
for new attractive digital content. In "Internet
time", a year is awfully long.
28010 We think it would be unfair to
consumers to make them wait to receive a new Canadian
digital service that is ready to launch.
28011 Il nous fait plaisir de souligner que
pour le lancement des services numériques, après avoir
investi d'importantes sommes dans la mise à niveau des
réseaux, les plus grands systèmes de câble seront en
mesure d'offrir tous les services de Catégorie 1 ainsi
qu'un grand nombre de services de Catégorie 2 à la
condition, bien sûr, que le nombre de services de
Catégorie 1 demeure dans les limites annoncées par le
28012 La situation est cependant différente
pour les petits systèmes. Dans la plupart des cas, au
moment du lancement, et sans doute pour quelques années
à venir, la capacité de ces systèmes ne sera
probablement pas suffisante pour satisfaire aux
exigences actuelles et futures du Conseil en matière de
28013 Par conséquent, nous proposons que
l'obligation de distribuer tous les services numériques
de Catégorie 1 soit limitée aux systèmes de Classe 1
qui desservent 20 000 abonnés ou plus.
28014 Il est évident que plusieurs petits
systèmes, particulièrement ceux situés dans des régions
éloignées, subissent d'énormes pressions de leur
28015 Ces petits systèmes sont déjà forcés
de trouver une solution le plus rapidement possible de
façon à pouvoir distribuer les services numériques.
28016 In assessing the various
applications, it is our strong view that the primary
licensing criteria must be consumer appeal. The
Commission has the opportunity in this proceeding to
solidify and augment the production of strong, high
quality Canadian programming. To do this, however,
services have to be attractive to consumers.
28017 You have heard much about the promise
of interactive technology during the course of this
hearing. It is evident, however, that underneath all
the hype, interactivity in the near term will be
limited to Web site interactivity.
28018 Fully interactive programming is
dependent on the development of inter-operable,
non-proprietary standards, which is still several years
off. Next generation set-top boxes capable of advanced
functionality are not yet in the market and will not be
widely deployed until at least the middle of the first
28019 Don't get us wrong. We are excited
about the opportunities for interactivity that will
emerge through the use of digital technology over the
course of the next five to seven years. We just want
to make sure that expectations don't get ahead of
reality. As was the case with the Internet, it will be
important to let the market for interactivity work
itself out over time.
28020 With respect to the issue of
packaging, as the Commission has noted on numerous
occasions, one of the key advantages of digital
distribution is addressability. In a digital
environment, individual consumers will expect and
demand the ability to choose customized packages of
28021 As indicated by consumer research
undertaken for the CCTA, there is strong demand among
Canadian consumers for choice in the selection of new
digital services. More significantly, the likelihood
of penetration of services increases with enhanced
choice and control in the selection of new digital
28022 Having said that, it is impossible to
predict at this point how individual distributors will
choose to package and market the new digital services.
Theme packages, pick-packs and standalone offerings are
all possibilities. But ultimately, distributors must
deliver services in a manner that responds to
competitive offerings and viewer preferences.
Consumers want to choose and distributors need to offer
choice. That is the reality of the digital era.
28023 In conclusion, the cable industry is
ready and eager to move quickly to bring fantastic new
digital services to Canadian television viewers. The
Commission has established a workable, balanced
framework for digital licensing and the Canadian
broadcasting industry clearly stepped up to the plate
with innovative plans for new digital services. We
thank them for their efforts and their ideas. Now it's
our turn to bring these services to our subscribers.
So let's get on with it.
28024 Thank you. We would be pleased to
answer any questions that you might have.
28025 THE CHAIRPERSON: Thank you, Ms Yale.
28026 Commissioner Wilson.
28027 COMMISSIONER WILSON: Good afternoon.
28028 MS YALE: Good afternoon.
28029 COMMISSIONER WILSON: Welcome to you
all. I am going to take you through some of the
questions that we have been asking the intervenors and
we will sort of work our way up to the more interesting
topics as we go through those questions.
28030 In your intervention and again in
your opening remarks, Ms Yale, you talked about the
criteria that -- the selection criteria that you think
we should use. You have emphasized both times that
consumer appeal, including research and reasonable
wholesale rates, were critical in terms of ensuring
that you would be able to roll out your digital
services to subscribers.
28031 I noticed -- I didn't notice in your
intervention, but I noticed in your remarks that you
included Canadian content. I was going to ask you if
that was implicit in consumer appeal. I'm wondering if
you could just talk to us a little bit about -- you
have heard a lot of different views expressed over the
course of the last two and a half weeks. I wonder if
you could just talk to us a little bit about why you
put your emphasis on these particular criteria.
28032 MS YALE: I would be happy to. I
guess first and foremost we emphasize consumer appeal
because for us the digital environment is really
fundamentally different than the analog environment.
It is really the attractiveness of the services in the
marketplace that is going to drive their success.
28033 Each service is going to have to be
independently of significant consumer appeal to be
successful. That's another key departure from the
analog world where we were limited from a technological
perspective to a one size fits all solution, so that as
long as some services in a package were appealing,
consumers would be interested in taking the entire
28034 In a digital environment where the
technology allows much greater packaging flexibility,
it's really significant for each service to have a
broad consumer appeal as a critical success criteria.
28035 Having said that, you could then say
"Well, what does that really mean from a practical
perspective? How do we know what's appealing?
Everybody is putting forward services to you that they
think are appealing".
28036 I guess from our perspective we think
it's important to think about appeal in terms of
services that have clearly defined genres so that
consumers clearly understand from the service that's
being offered what it's about.
28037 Implicit as well in that, as you
pointed out, is the contribution to the Canadian
system. I think that there is this perhaps ongoing
fallacy from a public policy perspective that what is
good for public policy may be at odds with what is
appealing to consumers and somehow for promoting
Canadian and somehow we are not promoting what's
28038 I think there are more than
sufficient applications before you that prove that
what's appealing is also strong from a Canadian content
28039 COMMISSIONER WILSON: I guess we have
had at least two views presented to us over the course
of the hearing the applications about what constitutes
consumer appeal and what will drive people to switch to
digital, whether that's purchasing or renting on a
monthly basis the set-top box or deciding to buy a
28040 One view was that a significant level
of Canadian content was what would attract subscribers.
The other view was that having services, and I guess
this goes to what you were saying about services that
have clearly defined genres, drawing together all the
programming in a certain genre and putting it together
in one place where subscribers can find it.
28041 In your view, what's going to be the
more successful model in terms of attracting the
subscriber? I mean I would think as a viewer that you
have got to have channels where I feel like I am going
to see something that I absolutely can't see in the
analog world, so I have got to go out and get the box
and sign up for the services.
28042 MS YALE: I hate to say that's a good
question because we have heard that a lot today. I
guess it is -- I think the short answer is yes, it's
all of the above. Some of the services that you may
choose to licence have more emphasis on one thing than
28043 From our perspective as cable
distributors, and that would be different from
satellite providers who are all digital, our dilemma
has been what's going to drive the rollout of digital
boxes? As you pointed out, it has to be something that
you don't already get.
28044 They have to make that first decision
that they are prepared to make the investment in the
box, whether they lease or buy it, and then move to the
second question of "Well, what services will I take?".
28045 So there has to be something
significant they don't already have.
28046 But picking up on another point that
you made, I think the Internet is really changing the
way people think about content. If you think about
searching the Web, you don't want to just have one
site, one Web site for any particular kind of
information you are looking for. You really like to
think that you are getting -- when you search the Web
you think of multiple sources of a particular kind of
content is what you are looking for, whether it is
travel or something else. You don't want to just have
one place and that is the only place you get that
28047 So you can imagine if you translate
that to this environment where you are talking about
digital programming services that it may well appeal to
consumers to have thematic packages that build on each
other and that there are multiple kinds of content in a
28048 That doesn't necessarily mean that
those are all Category 1 services. It may be a mix of
Category 1s and Category 2s that together create an
interesting thematic package that really kind of
responds to consumer expectations in an Internet world.
28049 COMMISSIONER WILSON: We will pursue
the issue of packaging a little bit later.
28050 Mr. Znaimer of CHUM suggested that we
should consider licensing, since this is sort of the
last chance that -- in his view the last chance that
services will be licensed with some regulatory support,
that we should consider whether or not the services are
socially useful and that that should be one of the
criteria that we use in licensing.
28051 For example, we might want to license
services that might not be able to attract carriage or
negotiate carriage otherwise.
28052 MS YALE: Well, our view on that is
that services that do not have consumer appeal will not
succeed in a digital environment and that our
interest -- and I think here we have a coincidence of
interests with those who receive licences -- is that we
want to see these services succeed and we want to drive
the roll-out of digital boxes and the only way to do
that, from our perspective, is to focus on consumer
28053 COMMISSIONER WILSON: Now, when you
say "reasonable wholesale rates", what is the range
that you are looking at as being reasonable?
28054 MS YALE: What is the range of
28055 COMMISSIONER WILSON: We have seen
everything from 19 cents to 65-70 cents service for the
Anglophone market. Of course, they are quite a bit
higher on the French side.
28056 MS YALE: I'm not sure that there is
an absolute number from a wholesale perspective
because, of course, it depends on the kind of content
that someone is proposing. Certain kinds of content
are much more expensive to produce than others.
28057 COMMISSIONER WILSON: I just thought
since it is one of your criteria that you might have a
range in mind of what, as a distributor, you would
consider, or as the representative of the distributors
you would consider, or they would consider was to be a
reasonable range if they are building a package based
on those rates.
28058 MS YALE: I think that the kinds of
ranges that we are seeing are reasonable. I think it
is a question, as I said, of value for money in the
sense that the higher prices should presumably be
related to programming services that have much higher
production costs because of the nature of the
programming that they are offering.
28059 When you get to prices, what we are
thinking about is at the retail level what we are able
to offer to customers, and their customers in the
marketplace are going to make that calculus in terms of
looking at the kinds of packages that are available and
making their own judgment about whether or not they get
good value for money based on the size of the package
and the overall price at which it is being offered.
Different groups of customers are going to have
different preferences along that continuum.
28060 COMMISSIONER WILSON: In terms of the
number of services that we should license, you have
heard, I'm sure, the range of discussions that we have
had on this issue, everything from the 10 -- or
approximately 10 that we talked about in the
framework -- to as high as 22 or 25 Category 1
28061 I'm not clear when the 22 or 25 was
suggested whether or not that included French services,
but what is your view about the magic number and how
many would be in English and how many would be in
28062 MS YALE: I would say that the kind
of expectation that the Commission has set around the
licensing of 10 or so Category 1 services and a smaller
number of French services is a good guideline, but I
would suggest that if at the end of the day when the
Commission reviews the applications they believe that
there are other deserving applicants that suggest that
they should go beyond the 10 that we would be
supportive of going beyond the 10 as long as the
Commission keeps in mind the criteria that each of
those services must have the kind of consumer appeal
that is going to allow them to be successful in the
marketplace, because at the end of the day these
services are must-carry from a distributor perspective
but not must-take from a customer perspective.
28063 COMMISSIONER WILSON: It has a whole
different meaning in the digital world, the notion of
28064 With respect to the issue of direct
competitiveness, you have recommended in your
intervention that the Commission take a broad approach
to genre competition. You refer to the need for a very
high threshold that would have to be met prior to
finding the service to be in direct competition, and
I'm just wondering if you could expand on what you mean
by a "high threshold". How high?
28065 Again, we have heard a range of
suggestions from 5 per cent to 25 per cent to
30 per cent.
28066 MS YALE: I don't know that I have a
specific percentage to propose to you.
28067 I guess the reason for our
recommendation really flowed from the comments I was
making earlier about the way in which we believe
customers are going to make purchasing decisions for
digital services in this new environment, which is
driven by customer expectations, we believe, that flow
from their expectations from how they search the Web
and the Internet environment.
28068 So, for example, coming back to the
idea of a theme package, if you want to build on a
Category 1 service that may have been licensed with
some similar but related Category 2s to create an
interesting mix, within the same theme for a niche that
is particularly attracted to that, say in the area of
health. You can imagine a variety of sub-genres, if
you will, within the health category.
28069 So our concern is that if the
Commission is overly restrictive in the way it
approaches this, that some of the very interesting
opportunities for packaging and offering services to
consumers in this new environment will be missed.
28070 COMMISSIONER WILSON: Let me ask you
a question: Do you think that we should be looking at
the notion of direct competitiveness in a different way
as between the digital services and the analog
services? Because there have been interventions made
and comments made during the hearing, most of which
assume that the digital services will be direct
competitors with analog.
28071 I guess I'm talking about the cable
world here because it is still split, there are two
platforms, the analog and the digital.
28072 Do you think that the digital
services within their first license term are going to
be able to pose a threat to analog services which have
had the benefit of being in the system a long time with
brand recognition and equity that they have built up
over a long period of time and very strong business
plans and the ability to sort of maintain the loyalty
of their viewers? And if that is the case, should we
be more lenient in the digital environment in terms of
evaluating direct competitiveness?
28073 MS YALE: I agree with the idea that
directly competitive has to mean something different in
the digital world for the kinds of reasons you have
28074 That sort of builds on what I was
getting at in the description that I gave you of the
kinds of packaging arrangements you might contemplate,
which would be precluded if you continued to apply the
old test, if you will, or the analog test of what
constitutes a directly competitive service.
28075 It seems to me that the applicants
have come in knowing and understanding that they are
moving into a different environment, which is much
riskier from a business perspective and in which the
ability to count on certain levels of penetration just
doesn't exist the way that it did in the past.
28076 I don't know if I have answered all
of your question.
28077 COMMISSIONER WILSON: Yes. I'm not
sure if you have answered all of my question either.
Maybe you don't want to, maybe you can't.
28078 MR. STEIN: Well, just to try to add
something, I think the most important thing here is
that as we move into this world, clearly, we are in a
different situation because we aren't the dominant
distributor. Most of our subscribers are analog
subscribers at the moment.
28079 The challenging thing here is that
whatever date is picked for a launch, whether there is
a date that is picked for a launch, most of our
subscribers when we say "hey, September 1st we've
launched all these services," they won't see them
because they won't have boxes.
28080 It's a very different situation then
for the satellite people who will be able to launch it
in much the way we have done previous launches, where
they are there and then they can go at it.
28081 So we are going to have to find in
that set of services a very distinctive way of
marketing it and making it attractive to people. We
are going to have to do that from the start.
28082 So what we need -- to us I think what
is more important than the competition, the
competitiveness between the genre, is to make sure that
we have a distinct set of services, so that people will
feel, yes, I want to get that service. And to do that
I will buy the box.
28083 Whether that's because a different
service in terms of documentaries or parents, or
computers or whatever, it has got to be something
different than now exists.
28084 I think that's what is important. It
is sort of -- to me the more appealing criteria is that
diversity criteria rather than the competitiveness
criteria. It has got to be something that our
marketing people can go out there and sell as being
something that you can't get this on ordinary
television. This is distinctly different.
28085 The other things that has to happen
is that it has to be good from the start. It can't be
something where we say we have got two to three years,
find your feet and launch this.
28086 This has to be high-quality product
because people are going to have a box, they are going
to look at it and if they aren't impressed from the
start they will send the box back. That is not
something that we want to see because in our systems
they will have that opportunity of saying "well, I like
my analog television, thank you very much, here it is."
28087 So I think we are going to have to
forge a partnership with the programming services that
are licensed to make sure that we can go out there and
have a launch that may be an ongoing kind of launch
that's going to be this is a distinctive package. This
is something you can't get anywhere else.
28088 People are used to that, as Janet was
indicating with the Internet, people are used to
finding distinctive Web sites.
28089 I think this is Janet's story. You
don't go on the web and look for one travel site. You
want lots of travel sites. You want a richness in that
kind of experience and to that extent people's
expectations are going to be quite high. With the
digital set-top box they are going to have something
that is very different and very diverse and that's of a
very high quality and that's relevant to their needs.
28090 That's going to be the most important
criteria I think in terms of making this successful.
28091 COMMISSIONER WILSON: And taking that
into account, Mr. Stein, in terms of I guess part of
what I am hearing you saying is you want diversity, but
you want lots of product to go to the marketplace with,
so that you have lots to use to attract subscribers to
the box in the first place.
28092 But if we take that point, I guess
what I am trying to get at, considering that in the
framework we have said that we are not going to license
Category 1 services that are directly competitive with
existing services or Category 2 services that compete
with Category 1 or existing services. You have talked
about having a very high threshold in terms of
establishing what is directly competitive.
28093 Part of what I am trying to work out
in my mind is if you have an analog service like YTV,
and we have an application for Girls TV and clearly
there is overlap in those genres of programming in the
way that they are going to target programming, because
YTV has such a huge base of subscribers in analog and
even if they go out and get the digital box, they are
still going to have those subscribers. Is that a part
of what we look at in defining direct competitiveness?
28094 I don't know if I am explaining
myself well enough, but I actually read this in one of
the interventions, saying the analog services they have
such a jump on these digital services and the digital
services will have such a small number of subscribers,
relatively speaking, over the course of their first
28095 So does that give the Commission
room, more room than they might have if these services
were launched in an analog environment where there was
8 million subscribers and they might go to 5 million
very rapidly? Am I explaining myself?
28096 MS YALE: Yes, that was helpful.
28097 I think the short answer is that with
a more limited penetration level, obviously the
potential harm to the existing licensees is
substantially reduced, compared to if they were
launching in the old analog world. That can give the
Commission, I suppose, some comfort that if there was a
service that seems to have the kind of consumer appeal
and to add diversity in the way that we have been
talking about that there may not need to be the same
concerns about competitive harm as would apply if these
services were being licensed on an analog basis.
28098 Having said that, given the other
things that we have said, the more distinct the
services are and, therefore, the less directly
competitive they are, the more likely consumers are
going to react to say "you know what, this is something
I don't already get, in whole or in part, from
somewhere else and, therefore, I am more likely to sign
up for digital."
28099 So I would think that from a
Commission perspective the more the services have
consumer appeal and the more distinct they are from
what's already available on analog, certainly from the
cable industry perspective, the better served we
believe the consumer will be.
28100 COMMISSIONER WILSON: You said in
your opening remarks, if I understand you correctly
with respect to the launch, we have had, I would say,
fairly wide consensus amongst the people appearing
before us that September 1, 2001 was a good time to do
a co-ordinated launch and that a co-ordinated launch
would greatly assist in the roll-out of the services
and likely digital distribution into the homes in the
28101 You don't seem to agree with that.
You seem to think that -- I think you have said as soon
as you get product you will want to roll it out, that
people have been waiting for it and you want to give it
28102 MS YALE: I'm glad to have the
opportunity to elaborate on what's necessarily kind of
a cryptic comment in the opening remarks.
28103 We have no problem with the idea of
having a co-ordinated launch as sort of last date, if
you will, by which we should expect services to be
ready to go.
28104 So, if it is September 1, 2001 and we
say by then the Category 1 services should be ready and
if one or two aren't that's their problem. We don't
have to hold up any longer to wait.
28105 So from that perspective to have sort
of a focus on a hard launch date of September 1, 2001
doesn't trouble us.
28106 However, if there are Category 1
services that are ready to go sooner than that, then we
would like to see the ability to do what I would call a
soft launch. In other words, from our perspective
anything we can do to drive the roll-out of digital
boxes in advance of the hard launch makes the sell on
September 1 that much easier because you have more
boxes and homes and people aren't making that first
decision, do I want a box, as opposed to the next
decision, which package would I like, now that all the
services are up and running.
28107 So it seems to me that we shouldn't
hold back the ability to get started sooner if some
services are ready to launch that much sooner. That's
the only point we are trying to make in our submission.
28108 COMMISSIONER WILSON: Do you think
that Category 2 services that are ready by September 1,
2001 should be allowed to march as well?
28109 MS YALE: Absolutely. Absolutely.
28110 I think it is important that the
packages that we are able to put forward in the
marketplace include a mix of Category 1 services,
Category 2 services, perhaps some additional distant
Canadian services if they are not already out there,
four plus ones, foreign services.
28111 I think that creativity in packaging
is really going to drive the success of this launch.
28112 COMMISSIONER WILSON: There has been
quite a lot of discussion about the notion of setting a
deadline by which time all affiliation agreements would
have to be concluded between Category 1 services and
the BDUs. It has been suggested that is three months
or six months prior to the common launch date.
28113 I probably don't need to ask this
question, I can probably guess what your views are, but
I would like to hear what you have to say.
28114 MS YALE: Well, we don't support the
idea of sort of pick a line in the sand and say
everything has to be done by such and such a date.
28115 From a practical perspective, if you
think about six months, for example, it's hard to
imagine that if the Commission comes out with a
licensing decision late fall, if you work back six
months from September the 1st, it leaves you, maybe,
two months to conclude affiliation agreements -- and if
you think about it, this is very different than
previous launches. We have many different
distributors, not just cable distributors -- the
dominant distributors, as you have heard, many times,
is satellite. There are several different satellite
providers, there's Look, there's cable companies. So
you have a multitude of distributors, on the one hand,
you have another multitude of service providers, on the
other, and I just don't think it's realistic to think
that's going to happen, in that kind of time frame.
And, frankly, I just don't see the point.
28116 It's not clear to me that those
processes, in terms of preparing for launch and
negotiating affiliation agreements, can't happen in
parallel. I don't see why they have to be sequential.
I haven't heard anything that suggests to me that
there's an inability to proceed to prepare for launch
without a signed affiliation agreement.
28117 COMMISSIONER WILSON: I guess it's
tied to the notion that there would be a co-ordinated
launch on September 1 and that, in order for you to be
able to carry the services, you would have to have an
28118 MS YALE: Well, we have agreed that
there should be a co-ordinated launch September 1. I'm
not sure what turns on having a signed affiliation
agreement six months in advance of that date.
Certainly, the objective will be to have affiliation
agreements concluded prior to the launch of the
services. But, as you know from past experience, even
that isn't always possible and it hasn't kept us from
having successful launches. So it's not clear to me
that that, in and of itself, is a pre-condition to
working on launch plans.
28119 COMMISSIONER WILSON: I think the
suggestion was that that would allow more time for the
services and the BDUs to get together and to talk about
how to most successfully launch the services.
28120 MS YALE: And we intend to be having
those discussions. As you would also note from our
submission, we would intend to be having those
discussions, on a bilateral basis, very early on, to
ensure that we meet the launch date.
28121 So, all I'm saying is that I don't
see that the one has to precede the other.
28122 Certainly for Category 1 services,
they must carry services; it's not -- you know, it's
not like that there aren't things that can't be done in
parallel. That would be our only comment on that.
28123 COMMISSIONER WILSON: With respect to
your research, I hadn't read Mr. McCabe's intervention,
nor had I heard his opening remarks when I prepared my
questions and I thought I had been very clever to
notice that you didn't test any price points on pick
and pay. And, of course pick and pay has been talked
about for years and there's considerable consumer
pent-up demand for pick and pay. I guess I want to
talk about the reality of pick and pay and the notion
that that's where you are driving, that that's what you
want to do, and that's only what you want to do, which
is what's been suggested here, and in terms of how the
research drives you to that point, and so, I'm going to
offer you and Mr. Kelly the opportunity to correct me
if I'm wrong, but it seems to me that if a subscriber
wants choice and they are being asked about it, in
theory, during a survey, that they are going to say, "I
want the ultimate in choice". It's kind of like
motherhood. You know. For sure, pick and pay would be
the best. But pick and pay costs. There's a cost
associated to it that can sometimes be a disincentive
to take up in the marketplace where they might look at
a package if they actually see what the cost might be
associated with pick and pay they might say, "Gee, if
I'm going to pay three bucks a service for three
services and I can get a package of 10, including those
three services, for $5 why would I pay $9?" You know.
"I will get those three services that I want, plus six
others, for just over half the price."
28124 I think it raises some question as to
whether or not -- I mean I can certainly agree with the
notion that pick and pay is very popular, and you
tested, but if you don't go that next step and test
with your respondents what the actual cost implication
of that might be, how might that affect the research?
28125 And have you done -- I know not in
this particular survey because I, you know, read
through the questions and looked at the results -- but
in any of the other work that you have done, in terms
of digital television, have you looked at the cost
implications of pick and pay and talked to people, in
focus groups or in any other way?
28126 MS YALE: I'm going to kick it off
and then I will turn it over to Chris Kelly who, I'm
sure, has some comments he would like to add.
28127 Let me start by saying that one of
the things we have heard about from our customers, for
many years, is their frustration with their inability
to choose in the current environment. They are very
frustrated with what they consider to be the
"one-size-fits-all approach" of the analog world. And
we have had to explain to them that, from a
technological perspective, that with analog technology
and the limitations of trapping, we had no choice but
to offer one-size-fits-all packages.
28128 Now, along comes digital technology
and, for the first time, we are not constrained in that
same way to a single offer as services comes available.
And so, what was very important to us to present to
you, in this proceeding, was a prospective all on the
kind of flexibility that consumers are looking for
coming out of this proceeding. And so, I think it's a
bit of a mischaracterization to suggest that that's our
preferred marketing approach. All we were trying to
demonstrate, through the research, is that customers
would like to see a variety of options, and so, we
tested the variety of options that come to mind as the
potential ways in which services might be packaged and
offered, in a digital environment, and what the
research clearly demonstrates is that people like the
opportunity to customize and exercise some control over
the packages and the way they are offered to them, and
the implication is that if that's not one of the
options available to them, they are going to be very
angry because they know, technically, for the first
time, that it's certainly possible to do it.
28129 Having said that, I think that any
customer, any consumer, knows that with any product and
service on the marketplace, when you buy things one at
a time, you don't get as good value, you pay a premium,
compared to buying in bulk. It applies to any product
or service you might choose to buy. Why wouldn't it
apply in the case of digital television services?
28130 So, consumers implicitly recognize
that they pay a premium for the privilege of buying à
la carte and it's not the best value.
28131 And then, the final comment I would
make before I turn it over to Chris is to say that it
isn't our preferred marketing approach. We haven't
made a decision, yet, about the way in which we are
going to market and package these services. But what
you can expect us to do is offer a variety of packaging
arrangements, ranging from à la carte, pick packs,
large packages, theme packages and so on, and we just
want to make sure that that flexibility is preserved
coming out of this proceeding and that we certainly
know and understand that the kinds of "take rates", if
you will, for the privilege of à la carte will be
substantially lower than the percentage of interest
that might be expressed without price points and it was
really more about making sure that the flexibility is
there coming out of this proceeding than trying to
suggest that there is a preferred marketing
28132 But I would like to let Chris --
28133 COMMISSIONER WILSON: If I can just,
before we go to Mr. Kelly -- I'm just wondering if I
can maybe ask you to explain when you say that the
flexibility is preserved.
28134 What we said in the framework was
that no Category 1 could be offered on a stand-alone
basis without also being offered in a package.
28135 So, from that, what would lead you to
believe that we had to be convinced that -- I mean
considering that the current digital distribution
undertaking, satellite, is offering services in all the
ways that you talk about in your research, what would
lead you to think that we would not extend that
flexibility to the cable distribution undertakings?
28136 MS YALE: We had been led to believe
that some intervenors and some applicants might insist
on being packaged exclusively in packages of minimum
sizes or in a large all-inclusive package, at the
expense of the opportunity to also be offered à la
carte. And we absolutely believe that your role is
more than sufficient to preserve the flexibility.
28137 So it was nothing that was coming
from the Commission that led us to conduct the
research, it was more a concern that some of those who
were going to come before you were going to suggest
that that option not be available.
28138 So maybe I can turn it over to Chris.
28139 MR. KELLY: Thanks, Commissioner
28140 As you pointed out, we have seen for
some time that consumers have been demanding choice in
the selection of services and part of what we wanted to
achieve with the research was to demonstrate that that
in fact continues to be the case.
28141 We looked at a number of different
options and you will see that there is clearly a
hierarchy there in terms of their level of interest.
Where choice or input into the selection of new
services increases overall interest increases. Not
only that, interest in the consideration of digital
increases if that preference is available.
28142 One of the things that we wanted to
find out was: Did that kind of choice in fact have a
positive influence on the penetration of the box? I
think the research is quite clear in that.
28143 You are right in saying that price
will have a significant influence on how consumers view
this, and there may well be a scenario where a large
package that is value-priced is the consumer preference
even though they want choice.
28144 I think what is particularly
important out of the research is that element of choice
needs to be there to encourage consideration of the
digital box. If consumers hear that a new package of
services or a new tier of services -- of digital
services is being offered and there is no choice in the
selection of those services, the level of interest I
think in digital will diminish.
28145 They have to know going in that there
are choices there. They may decide to pick packages
that are value-priced, but that element of it I think
is essential to be there.
28146 COMMISSIONER WILSON: In fact that,
according to BC Media, is what has happened with their
subscribers. The majority of their subscribers take
the large packages.
28147 I think CAB referred to 80 per cent,
but I believe that Monsieur Gourd said 70 per cent of
their subscribers have subscribed to large packages.
28148 MR. KELLY: Yes, that is correct as I
28149 But on that as well, I think what is
important to understand about those subscribers is they
are what we would call premium subscribers. So they
are most interested in those services anyway, so they
are the most likely to be taking those services.
28150 What we want to ensure is that all
consumers have access to that kind of choice and may
well, as you say again, choose to buy a large package,
but they want the option of being able to go other
routes as well.
28151 COMMISSIONER WILSON: I see some
hands poised over the buttons.
--- Laughter / Rires
28152 MR. McCUTCHEON: I just might add to
28153 I mean, in the real world it is hard
for me to imagine that our company would not offer a
big package to customers who wanted to buy everything
that we have. I mean, that's what we do. Most of our
subscribers are in high-valued bundles and highly
penetrative tiers. So we do that well.
28154 We see flexibility as really -- I
think the Commission has laid it out as well -- has a
way to maximize those penetrations. So we have big
packages, we have theme packages, we have à la carte,
we are going to have subscribers in a number of
different pools which will create higher penetrations,
higher revenues for all concerned.
28155 The à la carte or small packages also
is an entry level position for -- whether it is an
affordability issue or whether it is a potential
upgrade to a bigger package, it serves any number of
purposes, as well as the example you gave, Commissioner
Wilson, of demonstrating value. So if you add up the
services and you save 50 per cent buying a bigger
package, it makes a whole lot of sense.
28156 So we are not suggesting pick-and-pay
as a prime method, I think it is required by customers,
we have to address that, but it fits into the whole
goal of maximizing penetrations and revenues and giving
a choice at the same time.
28157 MR. STEIN: I think it's kind of
ironic that the competitors say packages is work and in
all their advertising they argue -- they point out that
cable doesn't offer you the choice. So it seems to me
that there is a little bit of a self-interest on their
part in terms of trying to say, yes, we think it should
be stuck to -- you should be stuck to these packages.
28158 I think that what we have to
recognize in cable is that we do not have a large base
of digital subscribers out there. In the digital world
we are not the dominant distributor and we are going to
have to sell boxes. We are going to have to be able to
say to people "Here is a great mystery/suspense channel
and if you people phone in and say `I want to get that
channel' and we say `Well, that is part of this
package', they will say `Well, I thought you people
were changing. I thought we had a new technology here.
What is going on?'"
28159 So I think we do have to have that
28160 Now, I do think that the number that
Bell ExpressVu used is right in the sense that once
people look at services and they see one service and
then they look at the other services and they say "Wow,
this is a great package of things, I would like to see
that", then that becomes successful.
28161 But you don't sell top-down. You
know, you don't go in there and sell the Cadillac
first, you go in and sell a basic product first and
then you build on that with the customer and then get
their -- they are then attracted to the other sets of
services and then they purchase them.
28162 I think that is a hurdle that we have
to go through as an industry in terms of the sister
services that we have to offer because of the kind of
technology that we have had. So it is a different set
28163 The other point too is: Why would a
really good programming service want to be fenced in?
I find this an interesting argument that their
associations seem to be putting forward that we all
want to be part of the same package and all go
28164 What if it is just a fantastic,
terrific service that everybody in the country wants to
get and we have lines coming down the street trying to
get boxes because they want this service. I would
think that they would want to be able to break out of
the box to be able to really show to people what great
service it is.
28165 COMMISSIONER WILSON: Okay. Thank
28166 I want to move on to the issue of
interactivity. I just have a couple of questions,
maybe some very short little questions, from the
28167 There have been a lot of proposals
for interactive elements which, as you noted, Ms Yale,
in your opening remarks, are mostly Web-based even if
they are offered through the set-top box.
28168 Did you see any interactivity
proposed in any of the applications that would not be
possible right now or do you think that the programming
services the applicants have pretty much pegged where
the technology is right now and have proposed
interactive elements that are appropriate? Did you see
anything that can't be done?
28169 MS YALE: I'm going to let Mike Lee
take that question.
28170 COMMISSIONER WILSON: I figured.
28171 MR. LEE: All in all I was quite
encouraged by the amount of support that interactive TV
is going to have over the next few years. For most of
the applicants who have proposed some sort of
transitional strategy where they started off with a
Web-based presence to complement the programming
service and then transition into sort of a
single-screen experience, I think for the most part the
expectations were fairly real.
28172 I would say that if I had to pick and
choose and isolate a single example where maybe the
expectation of what the environment would be may not be
matched to what the reality would be when they actually
go too deeply would be something like TVtv, which is
the concept of having an electronic programming guide
that is facilitated or delivered through a browsers
technology. The premise being that I think I heard
statements of the nature of all set-top boxes have
access to the Web today, that all set-top boxes have
modems and that this would have little to no impact on
the resources, whether it be from a bandwidth
perspective or from a head-end perspective.
28173 I think that there are a lot of ideas
out there and technology is able to foster a lot of
imagination from people, but at some point you do have
to hit some of the realities of what technology will or
will not allow you to do.
28174 In the particular case of something
like TVtv it is a great example of something that would
not be easily facilitated if at all possible. I think
they reflected that in their remarks in the sense that
it was impractical and, in certain cases, impossible.
28175 COMMISSIONER WILSON: Okay. I
wonder -- actually, maybe while Mr. Lee has his
microphone on I will ask him the questions about -- I
assume that you have read the CableLabs Report
yourself. I'm just wondering if you could clarify.
There were two or three things that were mentioned in
the report that I had never heard of and I was
wondering if you could enlighten me.
28176 What is "Wink"?
28177 MR. LEE: Okay. What I will do is I
will take a first shot at that answer and then Michèle
Beck may want to comment as well.
28178 COMMISSIONER WILSON: Okay.
28179 MR. LEE: "Wink" is a technology that
has been in the market for about three to four years
now which provides sort of a store and forward-type of
technology for interactive television. What I mean by
that is that it provides the ability for a programmer
to actually enable interactive buttons onscreen, but
that when the user presses that button the interaction
is not directly back live with the server back at the
programmer or some centralized location. What it does
is it stores that response in a set-top box.
28180 COMMISSIONER WILSON: Right. And
forwards it later.
28181 MR. LEE: And forwards it later.
28182 It was built in a time, or conceived
of in a time when there was no guarantee of this return
path directly to a set of services so that you would,
at the end of a day say, be able to use a modem that
dials home and downloads all of those transactions.
28183 So it is what we would probably
classify as a technology that is something that can be
deployed today to provide some of this utility.
28184 It doesn't provide all of the
functionality that -- sort of the second generation,
sort of what we would look at that the Transport A or
Transport B would provide you, but can simulate some of
the elements of interactivity in a world where we don't
have perfect system.
28185 COMMISSIONER WILSON: Okay. That
answer is pretty clear.
28186 There was also a reference to the
fact that the U.S. direct broadcast satellite companies
are deploying a certain level of interactivity, and I'm
wondering if anybody can comment on the kinds of things
that they are doing?
28187 MS BECK: Yes. I think it's
primarily a broadcast-type interactive application,
very similar to what Mike had just described. A lot of
it is downloaded to the set-top box and the interaction
takes place between the user and information that gets
stored in the box.
28188 DBS services do have a return path.
Typically it is via a telephone line. So while you can
do some level of interactivity back to a server or some
type of location to do e-commerce, that sort of thing,
it is done today via a dial-up modem.
28189 COMMISSIONER WILSON: Okay. What
about carousel-based services?
28190 MS BECK: Carousel-based services is
very similar to a broadcast service.
28191 A carousel, if you can imagine,
basically downloads a bunch of services and it time
shares over this delivery medium. So you have a
carousel, you know, it sends down information relating
to one service, another interactive service, and the
consumer basically picks. But it has to wait for that
information to be downloaded through that carousel so
there might be a slight time lag from the head-end or
the central point where it comes down.
28192 It's very effective if you don't have
a return path, but a lot of applications currently were
developed that way when return paths, especially high
speed return paths, you know, didn't seem like a
28193 COMMISSIONER WILSON: Thanks for that
28194 MR. LEE: I would just like to add as
well. You will see in the U.S. marketplace right now
with DBS providers that it's a great example of where
we are with regards to standards in this industry where
you have single companies like EchoStar, Direct TV,
supporting three and four competing initiatives,
competing interactive initiatives.
28195 It's as a result of the fact that we
are at a very immature stage with regards to the
technology and it's a very competitive marketplace from
a technology perspective.
28196 We are moving towards
standardization, but there's going to be a lot of forks
in the road as we go along.
28197 COMMISSIONER WILSON: Thank you.
With respect to the sort of policy implications
regarding interactivity, it was suggested that we
actually conduct a separate process to talk about the
distribution of interactive elements that are related
to a programming service. There was a lot of
discussion about the early stage interactive elements
that didn't require a lot of bandwidth and the more
advanced stage interactivity which could eat bandwidth
or require as much as an entire separate channel's
worth of bandwidth.
28198 What's your view on how that should
28199 MS YALE: Let me make a couple of
preliminary comments and then I am sure there are a
couple of people in the back who are going to want to
28200 Generally speaking, from an
interactivity perspective, we are prepared to pass
through program-related data subject, as you have
mentioned, to some of the capacity issues that arise as
well as to the interofferability of that information
with the set-top box.
28201 As Mike has noted, we really are in
early days. One of the things that is really exciting
about this marketplace is that it's evolving. From our
perspective, we would be really reluctant to start to
assume that there are policy issues that can't be
worked out and that might actually limit the kinds of
market opportunities that we see emerging through
28202 For example, some of the technical
standards around the ability to offer once, for
example, and I will pass it back to the technical
people to talk a little bit about some of those cable
28203 The standards are being developed.
The entrepreneurs in the marketplace are starting to
figure out how to play in that marketplace. So I think
it's really almost too soon to launch any kind of
proceeding because it's not clear to me that there are
issues that are ready to be addressed from a regulatory
perspective as opposed to a marketplace perspective.
28204 Maybe I can just let my two technical
colleagues make a comment each.
28205 MR. LEE: I would concur with a lot
of what Janet said. We are in very early stages right
now. To a degree, a lot of what we are seeing and will
see with interactive TV does not bear any relationship
to what's happened on the Internet and in certain cases
28206 Business model and revenue model and
value creation for both the programmer and distributor
and the consumer will be something that will work out
over time. It has to have a certain amount of
flexibility. I think it's one of the great
opportunities right now for us to really align
interests between all parties through the process of
working together at a business level.
28207 If we create structures which don't
allow for that flexibility and the ability to change
quickly, I think that we are going to run into a
certain amount of problems going forth just because, as
we have seen on the Internet, a company's business
model can change dramatically from the start of a
planning year to the end of a planning year.
28208 We have to have structures and
processes and relationships between the organizations
to be able to reflect the ability to make those
28209 COMMISSIONER WILSON: Thank you.
28210 MS YALE: There was something I
forgot to say, and I apologize.
28211 COMMISSIONER WILSON: It happens to
all of us.
28212 MS YALE: There is a joint industry
group already looking at some of these issues. That's
the CDTV group which has representation from every
sector in this industry, including broadcasters, all
distributors, equipment manufacturers and so on.
28213 That group has just agreed to focus
on three issues over the next little while, one of
which has to do with the interactivity. The CRTC staff
are observers in that process.
28214 There is a forum. While it is early
days, it is going to be taking on this issue on a sort
of cross-industry working group basis to look at these
issues as they arise.
28215 COMMISSIONER WILSON: With respect
to -- thank you for that, Ms Yale -- with respect to
foreign services, you have recommended that the CRTC
open up its list of eligible services as soon as
possible. I am just wondering what your views are on
the suggestion made at this hearing that additional
foreign services should not be allowed to launch before
Category 1 services are launched.
28216 MS YALE: I think our view is that
those services should be available for inclusion in
packages at the time of the launch of the digital
services in order to ensure that there are interesting
and creative packages out there.
28217 That's not to say that these
services, the new services, won't be interesting and
entertaining. It's just to say if we are going to have
a coordinated national launch for these digital
services, it seems to me that the time is right to make
sure that we as distributors have the opportunity to
put together packages that reflect the full array of
services that might be possible rather than sort of
launch and then launch again in terms of adding
services to the mix over time.
28218 Once the Commission has made its
licensing decision about which genres of Category 1
services that it wants to see licensed, it seems to me
that we have more than enough information to figure out
which foreign services can be added to the list of
28219 COMMISSIONER WILSON: I don't know if
you listened to the discussion that we had this morning
with respect to French language services, but I wonder
if you could tell us what you think about whether or
not we should maintain our current approach or adopt a
more lenient approach.
28220 MS YALE: I'm going to turn that over
to Pierre Gagnon.
28221 COMMISSIONER WILSON: Okay.
28222 MR. GAGNON: Yes. I listened with
interest to the presentation this morning. What we
have -- well, first of all, there are some issues that
need to be considered. Certainly the rights issue is
something that should be considered.
28223 After listening to representations
from the services themselves, I think there are ways to
come to grips with that particular issue. I sensed at
least a willingness at that level to work cooperatively
so that issue can be resolved with some kind of
satisfaction to all parties involved.
28224 There remains some issues with
respect to other types of foreign services that may
want to come into our markets in Canada. I'm certainly
not in a position to really comment on those issues
28225 I sense that there were some
issues -- the World Trade Organization, free trade
agreements -- that could have an impact and it should
be looked at carefully.
28226 That being said, one of the
experiences that we have in the French market with
respect to digital services is a lack of distinctive
French services which result, quite honestly, in our
subscribers -- a significant portion of our subscribers
switching back to analog because essentially they do
not find on the digital box a significant difference in
terms of services to what they were used to, and since
navigating on that box is somewhat different than what
you experience on an analog box and for those
considerations, some of them decided to switch back to
28227 So that illustrates to a certain
extent the need for distinctive French specialty
services that would be available in digital format, so
that we can get the box out and complement the offer.
28228 We will be complementing the offer
with some additions like Net TV or interactive
television that we plan to launch within the next few
weeks, but still there is certainly a need for
additional services in the French speaking -- the
28229 What we also have to consider in this
particular context is the fact that in this market what
attracts viewers is content that is linked to their
reality. That's why we never experience much
difficulty meeting Canadian requirements in the French
specialty services or in the French regular television,
if I should say, because of that specific need in this
market to have a content that is directly linked to the
reality of the French-speaking community or the French
28230 Those services, we have to recognize,
are foreign services. They are somewhat niched. They
will attract viewership probably to a lesser extent
that a more generalized or services that is more linked
to our reality, but still it would be from our
perspective a valid addition to the offering that we
can present to our consumers.
28231 The concern we have with respect to
this particular issue is the issue of sponsorship. We
are in a situation in this particular case where one
Canadian company is sponsoring those particular
services, which is also a competing distributor with us
and we have some concerns with respect to undue
preference with respect to that. We would certainly
support this issue of undue preference because the
regulatory harm that the Commission would have in such
a situation is pretty light.
28232 We would probably suggest that as a
condition being added to the list that those services
treat all distributors with no undue preference.
28233 So that's a concern that we have in
the back of our mind with respect to that particular
arrangement that we are seeing in the marketplace.
28234 If it was our company that was
sponsoring some new specialized or new digital
services, foreign digital services, we would certainly
have no problem agreeing to some undue preference
mechanism in the same context.
28235 That's in a nutshell what our view is
at this point.
28236 COMMISSIONER WILSON: What do you
mean you would have no problem agreeing to some undue
preference mechanism in that context?
28237 MR. GAGNON: As a sponsor, obviously
if we were Vidéotron sponsoring some services and act
like the sort of exclusive agent in Canada of this
service, we would have no problem if the services in
question would be subject to treat all distributors
with no undue preference. That's the point I am trying
28238 What I am saying, essentially, is
that if I suggest it should be a consideration in the
case of that particular contractual relationship, I am
also consistent in saying that I would have no problem
agreeing to the reverse if that was the case in similar
circumstances applying to us.
28239 COMMISSIONER WILSON: Thank you.
28240 I will just say that actually your
comments on undue preference lead me right to the last
area I am going to discuss with you.
28241 You talked in your opening remarks
about some of the suggestions that have been made
during the course of the hearing with respect to the
CAB, for example, suggesting the joint marketing
initiative and establishing an industry code and some
of the suggestions that SPTV made as well.
28242 You have said that it's your view
that no additional measures, in addition to what we
have already set out and the undue preference provision
of the BDU regs, that no additional measures are
28243 You said there will be every
incentive for all the players to ensure that the new
services are launched in a co-ordinated and
co-operative fashion, but clearly they don't feel that
way. Their argument would be that the fact that you
say that no additional measures are needed is
completely predictable, since the view is that the
flexibility benefits the gatekeeper.
28244 So, I guess what I am trying to sort
of find out from you, we have the CAB and SPTV on this
side and you on this side and in the spirit of the
prize which we won today for collaboration, what
comfort can you give us? I mean, Ms Logan said
yesterday that she couldn't get to first base with the
cable association and I don't know what the status
of -- well, Mr. McCabe said he had exchanged some
heated correspondence I think.
28245 So clearly this is not a love-in for
the cable industry and there is a lot of discomfort
with how you might proceed in launching the digital
28246 So how do you convince us that we
should not be prescriptive and not get involved, aside
from saying we think it's sufficient, it's in the
spirit of what you have said in the framework?
28247 MS YALE: I have a number of comments
to make on this issue, as you might imagine.
28248 First of all, let me say and I know
Ken Stein has said it already, we are not the dominant
distributor for the launch of these services. So we
have to keep in mind that in terms of the successful
launch of these services it's our competitors who have
sort of an upper hand relative to us.
28249 Having said that --
28250 COMMISSIONER WILSON: I will
acknowledge that. I will accept that. We know that
there seems to be more movement on their side to
establish some kind of an industry code, so they are
looked after from that perspective.
28251 MS YALE: We have never said we are
not prepared to have an industry code. I think our
position on this has not been accurately reflected in
terms of the reference "we never got to first base".
28252 We are certainly prepared to work
collectively on a number of issues. Let me just start
by saying which issues we think should not be the
subject of a code or a joint process. Those are issues
that are of a competitively sensitive nature. Those
have to do with the issues that we believe are going to
be the subject of business negotiations between the
parties which are appropriately conducted on a
bilateral basis. Those are issues around price,
packaging, marketing and advertising.
28253 The reason I say that is that I think
it's unreasonable to think that we are going to sit
down in a room with our competitors and have a
collective discussion around issues where we are going
to be striving to differentiate ourselves from our
28254 Let me give you an example of the
kind of situation that could arise. With respect to
Category 2 services, as you know, there is no must
carry obligation. So say one cable company thinks: I
have looked over the applications out there and there
are a few Category 2s that I think are real winners in
this marketplace and I am going to try and make a deal
to bring them on, whether in a theme pack or a general
interest package or whatever.
28255 I may not even want the other
distributors to know I am having those negotiations
because I don't want to give them a heads up that I
think this one is a winner and that at launch I may
want to put this one out and have something that
differentiates me, if you will, from the satellite
provider in that marketplace.
28256 So that's the reason I say that those
kinds of issues are more appropriately dealt with as
business negotiations on a bilateral basis. So I would
leave those aside.
28257 With respect to a code, we struggled
with this question very hard. In the meeting that Jane
Logan referred to, I indicated that we had been
thinking how could we put some sort of meaningful code
of conduct together that would deal with this issue of
is there something over and above the undue preference
standard that we could put forward that would be
28258 What I said at the time and what I
would say to you now is that it's very hard to think of
anything that would be of any practical benefit.
28259 So say, for example, with respect to
the issue of packaging, we say let's agree that there
would be in the code a standard that says there can be
no preferential packaging arrangements or packaging
arrangements shouldn't be done in an inequitable way.
28260 If you look at the SPTV kind of list,
those are the kinds of words and that's the kind of
language that appears, preferential, inequitable.
28261 My concern with that is that -- I
mean, we may well be prepared to agree to it. I just
don't know what that says, other than the undue
preferences standard. Because, at the end of the day,
if there's a rule that says you cannot engage in
preferential packaging arrangements, we propose a
packaging arrangements, we propose a packaging
arrangement to a particular service provider, they say,
"That's preferential", we say, "No, it isn't". Then
what happens? We end up in front of the Commission, in
a dispute, and the Commission will rule on all the
facts and circumstances of the case as to whether or
not that packaging arrangement violates the undue
preferences standard. So, we are certainly happy to
sit down and work together.
28262 But what I said, at that time, and
what I would suggest, now, is that we had a hard time
coming up with anything that would actually be a
practical benefit and provide substantive guidance that
wouldn't actually just say, "You can't do an undue
preference, but say it in a different way". So, then,
unless you get really, really, specific -- so, then,
say we are going to get really specific, and I look at
the CAB list and they say, "Well, you can't do
something like have a package that only involves the
services of one service provider", because that would
be -- prima facie, that would be preferential.
28263 Well, say, for example, a service
provider like CHUM, for example, comes forward and
says, "We have a really interesting idea and it
involves one of our Category 1s" -- assuming they get
one -- "and a bunch of 2s and we have a really
interesting idea for a theme package we would like to
put to you". And a cable operator says, "That sounds
like a great idea". Then Alliance Atlantis comes along
and says, "We have one, too. Here's our 1 and here's
the 2s we would like to do". And we say, you know, "We
don't think that one will win in the marketplace. We
don't want to have that as a separate theme package."
Well, the rule, as put down by CAB, if it was a rule
that was set up in advance, would prohibit that kind of
arrangement because it would say it's preferential.
28264 Is it preferential?
28265 I mean you would have to look at all
the facts and circumstances of the case. It seems to
me, that when you get too specific you can kind of take
out of play certain kinds of very interesting packaging
arrangements in advance, and we don't even know what's
going to be licensed.
28266 So, I'm prepared to work together and
work on a code, I just -- what I was concerned about
six months ago, when we had the first conversation, is
that I'm concerned the code would be either too high a
level to be of any practical level or so specific that
it might end up unnecessarily constraining the
marketplace in ways that are unintended.
28267 Those are caveats I put forward, at
the time. Those are still the concerns that I have.
But it's not because we don't want to work together to
see its success. It's because we -- I haven't been
able and, collectively, we haven't been able, to come
up with anything that would actually help give them the
assurances they are looking for. But we are absolutely
prepared to work together and see if we can make some
28268 COMMISSIONER WILSON: Okay. Thank
you, Ms Yale.
28269 I think that concludes my questions,
and I will turn it back to the Chair and she can
28270 THE CHAIRPERSON: Madame la
28271 CHAIRPERSON OF THE COMMISSION: Good
afternoon -- or good evening.
28272 That's definitely one element that is
very important. It's important to you. You call
yourself the non-dominant but, you know, who knows,
with the optimistic scenario, you will be the dominant
again, eventually, and given -- well, yes, but -- and
StarChoice is not too far from the cable distribution,
you know, family.
28273 So, for me, that element is valid,
but is not really what we are debating or really
struggling with. I think what we are struggling with
is give consumers the choice, because new technology is
there and there is new ways of taming the beast, in a
sense, and there will not be really a great possibility
to deploy digital unless that flexibility is there, and
I think that's what the Commission has recognized by
the framework we established.
28274 But what Mr. McCabe was saying,
earlier this afternoon, is give the consumer choice
goes through a channel, that is the BDU, whether we
talk about the dominant in the digital world today or
the one of tomorrow, and good luck to you, still, it's
not really first and to the consumer. It has, like in
many other industries, to go through a distribution
route and that is where -- because, for cable and
satellite and for broadcasting undertakings, contrary
to other businesses, there's been, like, a pact, a
regulatory pact, in order to, all together, provide the
assurance that, in Canada, the broadcasting system
would meet some objectives that were of importance to
28275 And in this, was the production and,
really, the sustainability of the Canadian program
industry, if we can call it that way, that kind of
takes everybody under the roof, and the concern, and
what I'm debating while we are discussing that aspect
of the question in front of us right now, is: how do
we try to harmonize, recognizing the new world,
recognizing the flexibility needed, recognizing the
value at a right price we want to provide to Canadians
but, yet, recognizing the importance of quality,
Canadian production, in the future, and allowing not
one company to survive or to be a success but the,
really, possibility of Canadian programs to develop and
be strong and be capable of even appealing more, even,
to Canadians in the future but, also, to other public
outside of the boundaries of Canada.
28276 So that's where, when -- I hear you.
I hear that the technology will provide the choice and
you want to be capable of doing that. What is the
guarantee or the comfort you can give us, in terms of
this will be an important element of your consideration
and of your "démarche", because, at the end of the day,
you can sell the boxes with a lot of foreign services
and news and sports, or film and sports, and what we
have had in front of us is a lot of diversity, much
more diversity, in all the genre of Canadian programs.
So, what kind of, you know -- in terms of the choice,
what will be -- really, other than, really, a
partnering with all the players, what will be the
comfort to allow the flexibility as if, really, at the
end of the day, it is really the consumer that will
choose, where we know that, for the time being, there
is, like in any other industry, a distributor that will
make the choice?
28277 MS YALE: Well, I really believe, and
I think we all believe, that what makes digital
different is that we are all in it together in a way
that really is different, in the following sense:
28278 We have made -- from a cable side, we
have made the investment, up front, to upgrade our
networks to support digital services and we have, as
you may be tired of hearing, over 5.5 million homes
that are digital-ready and, yet, we have something less
than half a million digital customers, and the shortage
is content. We need the content to drive the
penetration of digital boxes.
28279 And so, we really believe that we are
in a partnership on this, together with the programming
services, because it's only through the delivery of
that content that we are going to be able -- that we
are going to be really able to succeed in our business
and help them succeed in their business. It is truly a
parternship, in terms of ensuring the success of the
services. The more services we sell, the more boxes go
out there, the better off everybody is.
28280 I really think it's as simple as
that, that what -- we have made the investment, up
front, we have been content-starved, if you will, for
some period of time, waiting for these digital licences
and so, we find it, you know, a little bit frustrating
that there isn't that sense that we are in it together,
because it is in our common interest to see these
services thrive. It really is.
28281 CHAIRPERSON OF THE COMMISSION: Madam
Yale, there is a difference in this new world too. The
Commission has allowed equity of the distribution
28282 So you are in there together, but
with a different interest or more interest than you had
in the past, which is in a sense an incentive to be
really even better partners in a sense. But that
really raises all the kinds of concerns that we have
read, that we have heard and that I am sure that we'll
hear some more on.
28283 So I am trying to get from you how --
you know, I was writing down when you said, "you know,
it's very difficult. We sat down and it's very
difficult to get substantive guidance in what is undue
28284 And, as you know, I am not a lawyer,
and when I heard you say that I said "that's my point
and that's my concern."
28285 As a regulator, in order to put, you
know, no undue preference, how can I get not too many
people at our door knocking for dispute resolution is
to make sure that the rules are clear, or that either
there is no rule and, you know, the market takes it
all, or there is a rule that is clear enough that it's
clear for all the partners involved and the consumer
because we cannot forget him or her.
28286 And to really make sure that it's
clear for everybody, so that, you know, the attention
of everybody is put where it should be, which is really
providing the best services possible, you know.
28287 So when I hear you say it's difficult
to get a -- to agree or to define what could be
substantive guidance and undue preference, I feel like
saying that's my point, that's my concern and please,
if you have any element to give me some comfort that
would be -- I think in terms of what the concern has
been in terms of what has been raised by other
intervenors, but also what I can, you know, foresee as
being one of the elements of discussion in the analysis
after the hearing is definitely around that element.
28288 MS YALE: Let me make three very
brief comments and then I think there's a lineup of
people from the various members who would like to say
28289 When I said that it was hard to come
up with it, if I look at some of the things that SPTV
has described, all I meant was if I was a member of
SPTV I would not take much comfort from the examples
that are provided in their list because all they say is
you can't do something in an inequitable way. They
don't get more specific than that.
28290 And I agree that we wouldn't do it
because, of course, you can't do anything in an
inequitable way. That would contravene the undue
28291 The question is: What specifically
are we talking about? And so having said that I
wouldn't take much comfort if I were them.
28292 I am happy to sit down and try and
work together to do that and there are a couple of
forums in which we are working co-operatively. For
example, the working group that has been established on
migration issues has said that they are going to work
on these very questions in the context of analog
28293 So we are happy to see if we can make
some progress on that, but the more fundamental
question is what assurance do you have about the
behaviour because at the end of the day the thing
that's most important, it seems to me, is not having
the kind of behaviour that will cause you to have to
engage in dispute resolution and the real discipline is
28294 That's what fundamentally makes this
launch different than others. We have two major
competitors on the satellite side and a major
competitor from Look who are going to be the best
discipline there can be because if there is a service
that we don't offer in a way that's appealing to
consumers they will go to our competitors. It's that
28295 We have a huge discipline on us that
didn't exist before in the absence of competition. I
think at the end of the day the marketplace is always
the best way to ensure that we focus on what customers
want and deliver it to them in a way that maximizes
value for them and for all of the players.
28296 So, with those preliminary comments I
will turn it over first to Colette Watson.
28297 MS WATSON: Thank you.
28298 I think what I am hearing is, if I
can create an analogy, as the Vice-President of Public
Relations at Rogers customer complaints get escalated
to me. So when they get to me they are angry.
28299 So at the end of some days I can go
home thinking all of our customers really hate us.
28300 And so, if you apply that analogy --
and they don't, you know, because we go out and meet
our customers and out of the 2.5 million that we do
most of them like us.
28301 So there are a number -- you know, at
Rogers we have I think 52 affiliation agreements. That
means 52 relationships with different suppliers. You
may hear -- you hear it at the end of an escalation
process. So you may have the perception that all the
relationships at antagonistic, which has created this
element of distrust between the supplier and the
28302 Certainly the groups preceding us,
SPTV and CAB, demonstrate that they don't trust us.
The last thing a Rogers person is going to do at a
hearing is say "don't worry about it. Trust us."
28303 But it's covered under your undue
preference framework. It's covered in there. There's
nothing new here that isn't already covered in your
28304 If I go back to Commissioner Wilson's
question to Michael McCabe, it is a new world and so we
need to put the analog world aside and start thinking
in terms of new distribution, new relationships.
28305 This licensing process kind of has a
foot in one camp and a foot in the other, with respect
to you are going to grant a licence. Some will have
preferential carriage over others. You may or may not
mandate a wholesale fee, so the negotiation really is
kind of moot.
28306 You know you have to carry it. You
know what you are going to have to pay for it. What
else is there to negotiate? Thank God in the digital
world you don't have to talk channel placement, but
then there's packaging.
28307 We just don't want to limit options.
We heard Daniel Lamarre say he would like to see a TVA
pack. Well, maybe we would too, but under these
constraints we would have to say no, forget that,
that's not in the code. That contravenes the code.
28308 What if Alliance came to us with a
package, to further Janet's point and their channel,
say it's the book one, would be great with the Global
mystery one, books, mysteries. It might be a neat
combination, but they want to have their package --
they want to be packaged with their stuff.
28309 It's not undue preference. It's
trying to figure out, trying to anticipate what a
28310 If I can address your Canadian issue,
there are many new Canadians to this country who may
want to take a foreign ethnic channel just so they can
stay in the Canadian system, that they don't have to
get a grey market dish and buy from Echo Star the
Lebanese channel that comes across. They want to stay
in the system. They want to be Canadians, but they
wouldn't mind having access to this and wonder why they
28311 So, perhaps we would want to have a
list of services that are à la carte because there is a
niche market for that. We just don't want to limit
ourselves with that.
28312 So to that point I would say it's
hard to have this discussion without knowing what you
are going t licence and what the variety is going to be
and what the possible combinations could be because we
just don't want to limit those options ahead of that
decision coming out.
28313 CHAIRPERSON OF THE COMMISSION: We
don't know yet, we are not at the end -- and far from
being at the end of the process.
28314 En français.
28315 M. GAGNON: c'est ce que j'allais
28316 Et je veux juste mettre l'emphase sur
une chose. Il est vrai que dans le marché dans lequel
on s'en va on est en concurrence et on peut dire ce
n'est pas vraiment une réalité. Je pense que ça va
générer des relations contractuelles totalement
différentes avec les distributeurs avec lesquels on est
habitués de faire affaires.
28317 Je peux comprendre à la limite une
certaine méfiance de certaines situations ou incidents
passé puis une certaine "angoisse" de certains
distributeurs ou de certains diffuseurs, mais je pense
sincèrement que notre plus grand angoisse à nous c'est
de trouver un équilibre et une équité dans le marché
par rapport à l'ensemble des concurrents avec lesquels
on va être confrontés et je prends le pari que si on en
arrive à une entente qui rencontre le critère de
préférence indue, c'est probablement une entente qui va
nous défavoriser dans le marché, qui va être perçue
soit par nos consommateurs ou qui va être facilement
combattue par l'ensemble de nos concurrents.
28318 La meilleur façon, je pense, de
s'assurer d'une discipline dans le marché c'est
justement le fait qu'en ce qui nous concerne -- et
c'est le cas de tous les autres -- on va avoir trois
autres concurrents aguerris dans le marché de la
distribution numérique avec lesquels on va essayer de
jouer d'astuce pour pouvoir trouver la meilleure
combinaison d'offres qui va attirer la clientèle chez
nous et qui va bénéficier d'un ensemble des services
qu'on va avoir à offrir.
28319 L'autre solution -- et c'est
peut-être une solution intermédiaire et puis j'y vais
un peu "on top of my head", sans en avoir parlé aux
autres -- mais attendons donc de voir...
28320 LA PRÉSIDENTE DU CONSEIL: Il parle
--- Rires / Laughter
28321 M. GAGNON: Je veux dire un processus
de conciliation ça peut se mettre sur pied assez
rapidement. Attendons donc de voir ce qui va être
autorisé, attendons donc de voir s'il semble apparaître
dans les relations entre les distributeurs et les
radiodiffuseurs des problèmes qui pourraient amener de
la préférence indue et à ce moment-là essayons dans un
contexte peut-être plus rapide, mais essayons de voir
avant de trouver, d'essayer de trouver tout de suite
une solution à un problème si on a véritablement un
28322 Je prends le pari qu'on n'en aura pas
28323 LA PRÉSIDENTE DU CONSEIL: Je compte
28325 THE CHAIRPERSON: Commissioner
28326 COMMISSIONER WILLIAMS: Thank you
28327 So if I have heard you right, it's
viewer choice, entertaining and attractive content,
flexible and innovative packaging, value pricing,
28328 Mr. Stein and Ms Yale, would these
words accurately summarize digital market success à la
28329 MS YALE: I think it would be a
challenge to meet all of those, but I think that would
be pretty accurate in terms of what it will take to
28330 COMMISSIONER WILLIAMS: Okay.
28331 THE CHAIRPERSON: Counsel.
28332 MR. STEWART: Thank you, Madam Chair.
28333 Do you have any comments on the
operation of the access rules with respect to bilingual
Category 1 digital services that may be licensed?
28334 MS YALE: Well, understanding that
you have a process under way with respect to those
licences, we would propose in those markets where we
have customers warranting that need that it would be
certainly something we would consider right off the top
with respect to offering services that would appeal to
the customer base in that market.
28335 As far as the access guidelines go,
we will be submitting our comments in the parallel
28336 MR. STEWART: I don't know if
Mr. Taylor wishes to make a further contribution.
28337 MR. TAYLOR: Let me rephrase the
question and then we will see whether or not we have an
28338 The question is actually if the
service itself is bilingual and therefore would be a
must carry Category 1 service in both an
English-language market and in a French-language
market. Is that the question?
28339 MR. STEWART: Yes, and would you
consider that it should be I guess a must carry in both
of those markets. I am just seeking comments, again,
on the operation of the access rules with respect to
those bilingual digital services that may be licensed
and that we have before us.
28340 MR. TAYLOR: I think it raises
difficult issues of characterization so that I think it
would be preferable if in licensing a service, the
Commission could characterize it as one or another, and
I am just thinking, if there are going to be
multilingual channels, we don't necessarily know where
28341 So in general, I would have thought
that it would be for clarity of negotiation and
carriage, et cetera, more appropriate for the
Commission to indicate with respect to a particular
service that this service is being licensed as an
ethnic service, a service being licensed as an
English-language service or a French-language service.
To give a double character to a service, to be very
frank, is not something that I particularly turn my
mind to, but I could see it leading to some confusion
or difficulty. It certainly could lead to some
marketing challenges and things of that sort.
28342 MR. STEWART: So you would appreciate
clarification from the Commission when it came to the
licensing of the service.
28343 MR. TAYLOR: I mean, in the absence
of clarification from the Commission, if there is a
service that would wish to characterize itself as being
both a Category 1 French and a Category 1 English, I
think you could anticipate that you would be asked to
clarify it some time in the following months.
28344 So it would probably preferable for
the Commission to do so at the beginning and save us
all some time.
28345 MS WATSON: Does it double the
28346 MR. STEWART: Thank you very much.
Thank you, Madam Chair.
28347 THE CHAIRPERSON: Thank you very
much, Ms Yale and your colleagues.
28348 Right on the dot at six.
28349 We hear one more intervention before
breaking for dinner.
28350 Mr. Secretary, please.
28351 M. CUSSONS: Merci, Madame la
28352 Le prochain intervenant,
l'Association des producteurs de films et de télévision
INTERVENTION / INTERVENTION
28353 Mme SAMSON: Merci. Madame la
Présidente, Mesdames, Messieurs les Conseillers.
28354 Je suis Claire Samson,
présidente-directrice générale de l'Association des
producteurs de films et de télévision du Québec. Je
suis accompagnée de M. Jacques Blain, producteur et
président de Cirrus Communications, membre du conseil
d'administration de l'APFTQ.
28355 Comme vous le savez, l'APFTQ
représente plus d'une centaine d'entreprises
québécoises de production qui réalisent environ 95 pour
cent de toute la production indépendante en cinéma et
télévision au Québec.
28356 Depuis plusieurs années, nos membres
ont largement contribué à offrir une programmation de
qualité au public de plus en plus nombreux des chaînes
28357 Dans un premier temps nous tenions à
intervenir sur la demande de licences numériques
francophones de Catégorie 1. Nous nous prononcerons
ici sur les principes généraux qui, selon nous,
devraient guider le Conseil dans l'octroi de nouvelles
28358 Les décisions du Conseil auront des
répercussions importantes sur le système canadien de
radiodiffusion. Par ses choix et ses exigences, l'un
des rôles du Conseil consiste selon nous à assurer le
maintien d'un équilibre essentiel entre producteurs,
télédiffuseurs et distributeurs.
28359 Dans un deuxième temps, nous
expliquerons la teneur de notre vive opposition à un
traitement préférentiel pour les services non-canadiens
de langue française qui souhaitent être distribués au
28360 Au sujet des nouveaux canaux
spécialisés numériques, je ne vous cacherai pas que nos
membres sont inquiets. Un grand nombre de demandes de
nouveaux services spécialisés francophones ne pourrait
évidement être absorbé par notre petit marché.
28361 Même une faible augmentation du
nombre de services créera une pression accrue sur les
fonds publics et privés des sources limitées mais
indispensables au financement de la production
28362 Un plus grand partage de la même
tarte risque de se faire au détriment de la qualité des
émissions canadiennes, et en ce sens, sur les dizaines
de canaux de Catégorie 1 que le CRTC compte octroyer,
les services francophones ne devraient, selon nous, pas
dépasser 30 pour cent du nombre de licences accordées
en tenant compte du pourcentage de Canadiens de langue
28363 M. BLAIN: Nous croyons que ces
nouveaux services spécialisés numériques devraient
répondre aux mêmes exigences et mêmes critères que les
services spécialisés analogiques. Voici nos six
recommandations à cet effet.
28364 Le Conseil doit s'assurer que les
distributeurs respecteront des règles d'accès équitable
aux services spécialisés canadiens de langue française.
Le Conseil doit, dans le cas de tout détenteur de
licence de télédiffusion, veiller à limiter son
intégration verticale pour qu'il ne soit pas à la fois
producteur, télédiffuseur et distributeur des produits
qu'il programme. Et enfin, restreindre son intégration
horizontale quant à la propriété de licences de réseaux
conventionnels et de services spécialisés.
28365 De plus, un tel télédiffuseur devrait
garantir des droits distincts évalués à leur juste
valeur marchande pour l'acquisition et la production
d'émissions diffusées à la fois par son service
conventionnel et par ses services spécialisés et que
cela soit inclus dans sa condition de licence. L'APFTQ
s'attend à ce que le Conseil accorde préséance aux
demandeurs qui proposent un haut niveau de contenu
canadien de qualité dans sa programmation.
28366 Le Conseil devrait exiger des
requérants des engagements en matière de contenu
canadien et de dépenses de programmation canadienne qui
soient proportionnels et réajustés en fonction de
l'évolution du nombre d'abonnés ou des recettes, et ce
de façon à ce qu'à mesure que le nombre d'abonnés et
les recettes -- je m'excuse, je recommence.
28367 Il faudrait que le nombre d'abonnés
et des recettes soit réajusté en fonction de
l'augmentation des abonnés et de l'augmentation des
revenus, et à ce moment-là que les critères et les
conditions qu'on impose aux canaux spécialisés
ressemblent aux canaux conventionnels à mesure que les
revenus et les abonnés ressembleront à ce qu'ont les
28368 Le Conseil doit exiger de tous les
détenteurs de licence de services spécialisés lorsqu'il
souhaite acquérir les droits d'exploitation sur
Internet de payer des droits distincts établis à leur
juste valeur marchande pour l'acquisition de ces
28369 Cette exigence devrait faire partie
des conditions de licence de ces services et devrait
également s'appliquer sur chacune des fenêtres de
28370 Le Conseil doit s'assurer qu'aucune
licence de services spécialisés ne sera accordée à une
entreprise de télévision conventionnelle ou à une
entreprise de services spécialisés sans que celle-ci
s'engage à produire ou à faire produire par une
entreprise de production qui lui est affiliée un
maximum de 25 pour cent de son budget de programmation
originale destinée à ses services spécialisés, autres
que les nouvelles, les affaires publiques et les
28371 En bref, l'APFTQ considère que le
cadre de réglementation doit favoriser l'émergence de
services spécialisés qui soient à la fois viables et de
qualité, qui contribuent à la diversité de la
programmation offerte au public, qui offrent un
pourcentage de contenu canadien important, qui
consacrent une part significative de leurs recettes
brutes aux dépenses de programmation canadienne, qui
confient une large part de leur programmation en
pourcentage de contenu et de budgets aux producteurs
indépendants canadiens, qui ne concurrencent indûment
ni ne menacent la viabilité des services existants,
enfin, qui tiennent compte de la spécificité des
systèmes de radiodiffusion de langues française et
anglaise, de leur relative fragilité ainsi que de la
capacité de supporter une augmentation du nombre de
28372 Mme SAMSON: Quant aux services
non-canadiens de langue française, nos membres
s'opposent vivement à ce qu'un traitement préférentiel
leur soit accordé pour une diffusion au Canada. Ce
traitement irait directement à l'encontre des objectifs
de la politique canadienne de radiodiffusion inscrits
dans la Loi sur la radiodiffusion. Il menacerait le
caractère distinct du marché de la radiodiffusion de
langue française au Canada et se traduirait par un
affaiblissement des entreprises de radiodiffusion de
langue française qui sont la propriété de Canadiens ou
sous leur contrôle.
28373 Cet affaiblissement des services
canadiens ferait diminuer leur contribution globale à
la programmation canadienne et au développement des
ressources créatives canadiennes.
28374 L'APFTQ est d'avis que le système
canadien de radiodiffusion actuel offre déjà toute la
flexibilité nécessaire pour permettre aux services
étrangers de toutes langues et de toutes origines
d'offrir le meilleur de leur programmation aux
28375 Cela est possible à travers les
ententes de partage de propriété avec des entreprises
de radiodiffusion canadiennes ou de fourniture de
28376 En autorisant les services
non-canadiens à distribuer au Canada leur signal, et ce
même s'il entre en concurrence avec des services
canadiens dûment autorisés, le Conseil ferait du Québec
un marché intégré au marché française, autrement dit un
marché domestique pour la France.
28377 Cela obligerait les entreprises
canadiennes à acquérir leur programmation étrangère des
diffuseurs français seulement si ces derniers ont
choisi de ne pas les exploiter eux-mêmes au Canada.
28378 Les conséquences très préjudiciables
que nous entrevoyons pour le système canadien de
radiodiffusion nous poussent à nous oppose
catégoriquement à un tel traitement de faveur pour des
28379 Voilà qui résume notre position. Il
nous fera plaisir de répondre à vos questions.
28380 LA PRÉSIDENTE: Merci, Madame Samson.
28381 Madame Bertrand.
28382 LA PRÉSIDENTE DU CONSEIL: Alors
28383 J'ai très peu de questions parce que
votre intervention cet après-midi reprend
essentiellement votre intervention écrite qui était
assez claire. Mais quand même, je vais y aller de
quelques points d'interrogation.
28384 Vous parlez en terme de nombre de
services francophones, pas plus de 30 pour cent de ce
qui pourrait être l'offre, de faire attention aux
28385 Dans l'hypothèse d'un 10 ou 12 ça
voudrait dire trois ou quatre services numériques à
licencier -- pas à licencier, mais à licencer. Est-ce
que c'est suffisant pour avoir un volet ou un bouquet
numérique pour amener les abonnés supplémentaires à la
voie numérique ou c'est une question qui ne vous
28386 Mme SAMSON: Honnêtement, on pense
que trois ou quatre c'est à peu près ce que le marché
peut accepter et dépendant, naturellement, de la nature
des licences, il pourrait certainement y avoir un
intérêt assez important de la part des consommateurs et
des téléspectateurs francophones.
28387 LA PRÉSIDENTE DU CONSEIL: Disons que
le dernier lancement n'est pas nécessairement concluant
à cet égard-là dans les marchés francophones.
28388 Mme SAMSON: Non, en effet.
28389 LA PRÉSIDENTE DU CONSEIL: Dans
quelle mesure une offre numérique qui n'aurait que
trois ou quatre services de plus sera suffisante?
Est-ce qu'il n'y a pas là, à ce moment-là, un certain
risque qu'il y ait un encouragement à plus d'écoute du
côté anglophone où il aurait une plus grande diversité
ou une plus grande offre? Est-ce que ça ne vous
inquiète pas cette possibilité?
28390 Mme SAMSON: Il y a toujours le
danger qu'une partie de l'auditoire s'échappe vers une
programmation anglophone bien qu'on peut dire qu'à
l'heure actuelle les francophones ont accès, les
abonnés au câble et au satellite ont accès à une
multitude de services anglophones et il semble que, en
tout cas, les francophones continuent de préférer
consacrer la plus vaste partie de leur temps d'écoute
aux émissions françaises et particulièrement
28391 LA PRÉSIDENTE DU CONSEIL: Et
particulièrement presque conventionnelle aussi, la
télévision conventionnelle qui a encore un très grand
28392 Mme SAMSON: Un très grand espace,
malgré qu'on voit les améliorations constantes des
28393 LA PRÉSIDENTE DU CONSEIL: Cet été en
28394 Mme SAMSON: Cet été en particulier,
et il faut dire que dans les sondages qui sont sortis
sur les marchés francophones les émissions comme
"Survivor" et "Who Wants to be a Millionaire" ne
figurent pas. On croyait que tout le monde les avait
regardées, mais non.
28395 LA PRÉSIDENTE DU CONSEIL: Ça prend
des versions canadiennes.
28396 Mme SAMSON: Oui.
28397 M. BLAIN: Peut-être un commentaire,
Madame Bertrand, là-dessus.
28398 LA PRÉSIDENTE DU CONSEIL: Oui.
28399 M. BLAIN: On n'est nullement contre
le progrès et puis on souhaiterait qu'il y ait plus de
canaux francophones, mais on veut aussi être cohérents
avec notre position. Si on veut que ces canaux-là
diffusent un important contenu canadien, ça signifie en
partie de la production originale et le système de
financement actuellement est déjà étiré au maximum, et
on ne veut pas se retrouver dans une position où tous
les canaux auront des petites émissions à très petits
budgets qui ne seront regardées par personne.
28400 Donc c'est un effet pervers --
peut-être que le mot est fort -- qu'on essaie d'éviter
en prenant une telle position.
28401 LA PRÉSIDENTE DU CONSEIL: Je pense
qu'il y a un consensus de la part de toutes les
requérantes qu'on a entendues et les intervenants qui
ont commencé à venir à l'audience et tout ce qu'on a lu
précédemment à l'audience comme telle, il y a un souci
d'amener de la qualité. Il n'y a pas de doute c'est
très important, sinon le consommateur ne sera pas au
rendez-vous, il va sans dire.
28402 J'avoue qu'il y a des choses que vous
dites cet après-midi qui m'apparaissaient pas si
claires dans votre intervention écrite et ç'a trait à
lorsque vous dites qu'il faudrait limiter l'intégration
verticale, limiter l'intégration horizontale.
28403 Il me semble que ces éléments
n'étaient pas vraiment mis en lumière dans votre
intervention écrite. Est-ce que j'ai la berlue ou si
vous pouvez répondre.
28404 Mme SAMSON: On peut répondre, mais
on ne peut pas répondre oui. Non, vous n'avez par la
berlue. Peut-être que dans notre mémoire écrit c'est
moins une mise en force,mais c'est une préoccupation de
la part des maisons de production qui est constante et
il y a la question, bien sûr, que les maisons de
production indépendantes veulent produire. Je pense
qu'elles ont démontré au fil des ans qu'elles
contribuent un apport important à la qualité de la
télévision de langue française et il a maintenant avec
les nouveaux canaux ces intégrations qui se font.
28405 Le soin qu'on veut apporter à ce que
les diffuseurs, lorsque les diffuseurs vont acquérir
des productions indépendantes, que chaque fenêtre de
diffusion fasse l'objet d'une négociation distincte
parce que, naturellement, il y a un risque et ça donne
au diffuseur qui détient multiples chaînes un pouvoir
de négociation assez important et on sait que pour les
producteurs indépendants sans lettre de diffuseur il
n'y pas de production puisque le diffuseur est toujours
un déclencheur d'un mécanisme de financement.
28406 Donc il y a certainement une
inquiétude, un souci d'assurer qu'il y ait le plus
grand nombre de joueurs possible du côté des diffuseurs
pour permettre au marché de s'équilibrer entre l'offre,
la demande et les forces de négociation.
28407 LA PRÉSIDENTE DU CONSEIL: Mais dans
les faits, on a vu peu de nouvelles figures, de
nouveaux visages se présenter dans les requérantes. On
en a davantage du côté anglophone, mais du côté
francophone on a davantage des joueurs établis et c'est
certainement lié à la remarque que vous faites
vous-même de dire attention, la réalité francophone et
anglophone est différente, c'est une fragilité.
28408 Mais au fond, comment réconcilier
votre idée de limiter l'intégration verticale et
horizontale quand on observe que la plupart des
requérantes -- en fait, les requérantes des services
francophones -- sont des joueurs existants.
28409 Mme SAMSON: Les requérantes sont
déjà des exploitants d'un service, en effet, et on l'a
vu et on l'a remarqué, et c'est pour ça qu'on demande
au Conseil de mettre, si dans les chaînes que le
Conseil acceptera de licencer, que des conditions de
licence spécifiques y soient rattachées, justement des
conditions de licence qui reflètent cette particularité
peut-être du marché francophone où les émissions qui
sont acquises doivent faire l'objet d'une négociation
différente pour chacune des fenêtres d'opération, que
ce soit pour un canal traditionnel, spécialisé ou
l'Internet parce que c'est aussi le devoir du
producteur comme entrepreneur culturel vis-à-vis de ses
investisseurs, publics et privés, de voir à maximiser
la valeur de son produit et de maximiser ses ventes
dans toutes les fenêtres, dans tous les marchés
possibles, et on pense qu'il serait raisonnable que les
détenteurs de licence qui souhaitent élargir leurs
champs d'opération acceptent des mesures qui
garantissent qu'effectivement les producteurs
indépendants on l'opportunité d'exploiter au maximum
28410 LA PRÉSIDENTE DU CONSEIL: Sans par
ailleurs nécessairement être un frein aux synergies
possibles, effectivement. On peut s'imaginer qu'il y a
des possibilités et des avenues qui peuvent être très
porteuses pour les diffuseurs à détenir plus d'une
licence. On veut juste s'assurer que ça peut être
porteur pour tout le monde et qu'effectivement chaque
fenêtre doit présenter un potentiel de
commercialisation pour le diffuseur, mais aussi pour le
producteur et pour ses investisseurs.
28411 LA PRÉSIDENTE DU CONSEIL: Le
producteur indépendant il en a été question beaucoup à
travers les journées où on a rencontré les diverses
requérantes et on était préoccupés de deux questions.
Une première, comment déterminer ou définir le ou la
productrice indépendante mais d'un point de vue
non-affiliée, "at arm's length", pour parler chinois.
28412 Comment le définissez-vous de votre
côté? Quel est pour vous la définition d'une
entreprise de production indépendante qui serait
28413 Mme SAMSON: Pour nous une entreprise
qui est non-liée est une entreprise de production qui
ne détient pas plus de 30 pour cent d'intérêts chez un
diffuseur, et vice versa, et un diffuseur qui ne
détient pas plus de 30 pour cent d'une maison de
28414 LA PRÉSIDENTE DU CONSEIL: Et vous
proposez que le Conseil établisse que pas plus de
25 pour cent de la production dans les heures
originales canadiennes soient confiées ou acquises par
ces productions ou ces compagnies de production qui
seraient liées à la chaîne spécialisée...
28415 Mme SAMSON: C'est ce que nous
souhaitons et à ce chapitre-là je dois dire qu'on est
assez cohérents puisque c'est la même recommandation
que l'APFTQ a faite dans la présentation du dossier sur
le Canal des Arts où, effectivement, il y a un
producteur indépendant qui va détenir un certain
pourcentage et ça existe dans d'autres dossiers au
Canada anglais, il y en a d'autres, où effectivement
l'APFTQ a toujours demandé à ce qu'il y ait un maximum
d'acquisitions qui proviennent des compagnies liées à
la détentrice de la licence.
28416 LA PRÉSIDENTE DU CONSEIL: Ne
voyez-vous pas le besoin que dans certains genres on
ait une flexibilité qui serait plus du cas par cas?
Est-ce que certaines requérantes -- et c'est aussi dans
certaines interventions -- ont fait état qu'on ne peut
pas avoir une espèce de règle universelle qui
s'applique à tous ou à toutes, qu'il y aurait des
genres qui seraient différents.
28417 Pour prendre l'exemple ultime,
peut-être, prenons RDI, un Canal Nouvelles ou Newsworld
évidement, ont des réalités différentes, LCN. Ce sont
des licences qui opèrent dans un univers différent que
si par ailleurs on se retourne vers une licence comme
Canal D, par exemple.
28418 Mme SAMSON: Tout à fait, il y a des
particularités, des spécificités et quand on demande à
ce qu'il n'y ait pas plus de 25 pour cent des budgets
de programmation qui soient alloués à des compagnies
liées, nous faisons toujours l'exclusion en disant, "A
l'exception des sports, des affaires publiques et
l'information" puisque, effectivement, les diffuseurs
ont tous des facilités de salles de nouvelles, de
productions de nouvelles ou de sports, et c'est
peut-être là où les synergies sont les plus évidentes
pour eux et je pense qu'on peut tout à fait comprendre
que RDI puisse s'approvisionner beaucoup plus à
Radio-Canada que chez un producteur indépendant. La
même chose pour RDI.
28419 LA PRÉSIDENTE DU CONSEIL: Donc dans
la plupart des cas, vous recommandez ce 25 pour cent,
mais vous reconnaissez qu'il peut y avoir des
exceptions dans certains genres.
28420 Ça complète les questions que j'avais
28421 Madame la Présidente.
28422 LA PRÉSIDENTE: Madame Samson, quand
vous avez défini un producteur non-lié vous vous êtes
penchée sur deux situations. Là où il y a une maison
de production qui 30 pour cent ou plus des actions
d'une titulaire de licence et là où la titulaire de
licence a plus de 30 pour cent de la maison de
production. Il y a une autre possibilité, c'est que
non pas la titulaire de la licence qui soit actionnaire
dans une maison de production mais un de ses
28423 Est-ce que vous établiriez la même
règle? Comprenez-vous? Par exemple, il peut y avoir
la titulaire A qui a les actionnaires B, C et D, qui
elle comme société ne détient pas 30 pour cent d'une
maison de production, mais un de ses actionnaires A, B,
C ou D, peuvent l'avoir. Vous établiriez la même
28424 Mme SAMSON: Un exemple pourrait être
le Canal Histoire où on avait Alliance et Astral qui
étaient tous les deux actionnaires.
28425 LA PRÉSIDENTE: Et si Historia, par
exemple, est une société distincte peut-être qu'elle
n'a pas 30 pour cent comme société, mais quant à ces
actionnaires-là vous établiriez la même règle?
28426 Mme SAMSON: Je dois dire que du côté
des producteurs, si un producteur, une maison de
production voyait sa maison-mère détenir plus de
30 pour cent d'une titulaire de licence, cette maison
de production-là ne serait plus admissible à être
membre de l'APFTQ.
28427 LA PRÉSIDENTE: Ou un de ses
28428 Mme SAMSON: Ou un de ses
actionnaires détenait plus de 30 pour cent d'intérêt on
considère que c'est lié.
28429 LA PRÉSIDENTE: Oui, donc vous seriez
d'accord que les trois situations sont définies pour
vous comme étant 30 pour cent des actions.
28430 Mme SAMSON: Des intérêts.
28431 LA PRÉSIDENTE: Que ce soit la
titulaire ou un de ses actionnaires.
28432 Mme SAMSON: Ou un de ses
28433 LA PRÉSIDENTE: Dans une maison de
28434 Merci. Je crois que ça complète nos
questions. Nous vous remercions tous les deux.
28435 Mme SAMSON: Merci beaucoup.
28436 LA PRÉSIDENTE: Et nous vous
souhaitons une bonne soirée.
28437 Nous allons, comme prévu, prendre une
demi-heure de pause et nous reviendrons donc à
28438 We will be back at 7:00 after a
28439 We have five intervenors left on
today's list and the Independent Film and Video
Alliance has kindly to be here in case we were able to
hear them. So we will hear them as well.
28440 So we have five intervenors left on
today's agenda and the Alliance who is already here.
28441 Thank you very much.
--- Upon recessing at 1825 / Suspension à 1825
--- Upon resuming at 1900 / Reprise à 1900
28442 LA PRÉSIDENTE: Nous vous
resouhaitons la bienvenue à notre audience.
28443 Welcome back to our hearing.
28444 Thank you very much for accommodating
our late hour.
28445 Mr. Secretary, please.
28446 MR. CUSSONS: Thank you, Madam Chair.
28447 We will now hear the intervention by
the Canadian Conference of the Arts.
INTERVENTION / INTERVENTION
28448 MS WILLIAMS: Good evening, and thank
you for breaking for dinner before meeting with us.
That was great.
28449 The Canadian Conference of the Arts
appreciates the opportunity to present our views to the
CRTC on the Category 1 digital specialty services.
28450 I'm Megan Williams. I'm the National
Director of the Canadian Conference of the Arts.
28451 I am accompanied, this evening, by
Alexander Crawley, who is an actor, musician and
performer, and a member of the CCA, and by Monica Auer,
who is our researcher and adviser.
28452 The CCA is an arts advocacy and
service organization whose members first met in 1944 --
long before the CRTC existed. We represent artists,
cultural workers, arts organizations, producers, who
span the nation from every province and every territory
and every arts discipline. We, therefore, welcomed
your last call, in February, for the new digital
28453 Canadian viewers, and our own
members, may both benefit if new services are licensed
through new programming choices and employment
28454 The overwhelming number of
applications that you received is clear evidence of the
economic strength of Canada's broadcasting sector.
28455 As the new services began to
solicitor CCA's support, we decided that most
interesting approach, for us, would be to produce a
ranking, based on our own criteria.
28456 Given the CRTC's decision to grant
licences to the applicants for Category 2 services
which met basic minimal criteria, we focused our
attention on the 89 applications for Category 1
28457 We support the licensing criteria
that the Commission set out in its February call,
particularly, with respect to exhibition and
expenditure commitments for Canadian content.
28458 We also agree that services' business
plans must be reasonable. In this context, we
considered the financial performance of existing
specialty services distributed on analog to a large
28459 We found that though there will be
fewer digital subscribers for some time to come, both
WETV and The Justice Channel proposed annual average
revenues that would be higher than those now earned by
existing specialty services with a much larger
subscriber base and audience reach.
28460 Since we agree that business plans
must be realistic, we, therefore, decided not to
support these two applications.
28461 We also considered the impact of new
specialty services on existing services.
28462 Canadians already enjoy a wide
variety of programming, particularly, with respect to
news and sports. We believe that licensing still more
news and sports services contributes little to program
diversity but will fragment the audiences to existing
services and reduce their advertising income.
28463 This would be especially hard on
Newsworld and RDI since the CRTC and the public alike
expect more from these services rather than less. We,
therefore, dropped the news and sports services from
our assessment, as well.
28464 This left us with only 85
applications to consider.
28465 We then looked at the applications,
in terms of their ownership.
28466 Over the last 30 years, more services
have been licensed to fewer and fewer owners. In the
case of Canada's existing pay and specialties, eight
companies now control 54 of the 64 services and, last
year, accounted for 93 per cent of this sector's total
28467 In theory, consolidating ownership
may strengthen broadcasters' financial wherewithal, but
it may also limit the opportunity for new voices to be
heard and reduce opportunities for Canada's independent
28468 To give new entrants a kick at this
can, while acknowledging the role that stronger
companies can play, we decided to give the new
applicants a small competitive advantage by awarding
them one extra point.
28469 In the end, we used 19 different
factors to rank the Category 1 applications, most of
which involve Canadian content, technology and audience
28470 We also assessed applicants'
contributions to Canada's performing arts, to
children's programming and to schools.
28471 The final results of our analysis
confirmed what many who are watching this process may
have already concluded: that the majority of the
applications are of extremely high quality.
28472 All three of Craig's applications,
for instance, ranked among the top 10 of our results.
But, since we believe that diversity should be
maximized in both programming and ownership, we
narrowed our selection of the top 10 applications we
could support by dropping applications that duplicated
programming offered by existing services and by keeping
only one application per ownership group.
28473 Based on our analysis of the
applicants' proposals, the CCA, therefore, supports the
following applications, in this order: The Dance
Channel, Stornoway Communications; The Book Channel,
Alliance Atlantis; Festival, Craig/Lions Gate; TVtv,
CTV; Cinefest, Astral; The Canadian Documentary
Channel, Corus; Digipix, TVA; Biography Canada, Rogers;
13th Street, CanWest; and PrideVision, Levfam.
28474 These results are available for
viewing on our Web site.
28475 Apart from the obvious benefits of
licensing channels that deal, specifically, with
Canada's performing, literary and media arts, these
services would benefit the broadcasting system in
other, more tangible ways. The services plan to spend
$265 million on Canadian programming, of which
$176 million would be spent on programs acquired from
other Canadian producers.
28476 The total cost of this package of
10 services comes to $3.67 a month, in Year 1, with no
increase up to Year 7.
28477 We also considered the applications,
in terms of the criteria outlined by the CRTC in its
licensing framework and call for applications.
28478 We took the liberty of coming up with
a series of measures for these criteria and, again,
applied them to the 89 applications.
28479 Half of our choices -- TVtv; 13th
Street; Festival; PrideVision; Cinefest; and The Dance
Channel -- also did well, in terms of measurable
factors that fit the CRTC's own licensing criteria and,
although our guess at what you will finally decide to
do is just that, a guess, we notice that our package of
services does slightly more for the system, in terms of
total Canadian programming expenditures, at the same
monthly rate for subscribers, while generating
commensurate profits before taxes for the 10 services
28480 I will turn to Sandy, now.
28481 MR. CRAWLEY: In closing, we have
several recommendations. The first has to do with the
arts -- not surprisingly!
28482 In brief, we urge you to license new
Canadian services that maximize the artistic and
creative input. Canadians already enjoy the
programming offered by six sports services.
28483 Although choosing sides is
challenging, for any referee -- and we thought,
perhaps, you should actually all take a quick course at
the "École du Circle", in Montreal, so you can keep
89 balls in the air -- we ask that you level the
playing field, or at least tilt it, slightly, in
28484 Secondly, we applaud the use of
technology in business.
28485 We noticed that many applications in
this hearing forecast interactive costs that were not
covered by interactive revenues. This suggests that
broadcast subscriber revenues might be used to cover
the costs of interactivity, even though the direct
benefits to subscribers, viewers and the Canadian
broadcasting system, as a whole, are still far from
28486 Failing specific conditions of
licence to prevent this from happening, we recommend
that the Commission monitor this situation closely.
28487 Obviously, we would like to see more
of that money going into producing programming than
28488 Third, we would like to tell you how
much we enjoyed participating in this proceeding.
28489 Our pleasure could only have been
enhanced if the CRTC's application forms for these
services had included one extra column, a totals
column, summarizing figures presented for each year of
the seven-year licence.
28490 We also strongly recommend that
specific lines within the financial forecasts indicate
amounts proposed for licence fees and intellectual
property rights and that the form include a specific
area to indicate the hours of independent production
that licensees plan to acquire and present.
28491 Madam Chair, that concludes our
28492 We welcome any questions you may
28493 THE CHAIRPERSON: Thank you,
Mr. Crawley and Miss Williams.
28494 I will now turn you to Commissioner
28495 COMMISSIONER WILLIAMS: Thank you,
28496 Welcome to the hearing.
28497 I see you represent virtually every
not-for-profit artist and cultural organization in the
country, from sea to sea; for example, in the east,
from the Newfoundland Independent Film Co-Operative to
the Sandspit Artists Council on the far western shores.
So, I have looked through your list of 200-plus members
and see that you are a very large lobby group, indeed.
28498 I have also spent a bit of time on
your assessment and ranking of the various
applications, and I see your mention of "Survivor" last
week -- actually last Wednesday; same day as today.
28499 I liken this process of weeding them
out to the television program "Survivor" and, since
then, I have had the opportunity to give the process a
bit more thought.
28500 I guess we are now in the process of
evaluating 87 Category 1 applications and in the next
while must decide which 10 or more services will be the
participants in the September 2001 launch of the
Canadian digital television era.
28501 During the course of this hearing it
occurred to me that the possible combinations of
services could be potentially quite large. I then
inquired as to whom on the CRTC staff would be
considered as our most talented mathematician or
statistician. Well, Mr. John Traversy, our Director of
Research and Analysis was recommended.
28502 So as I, like Ms McQueen of CTV
indicated earlier, do not like to perform mathematical
calculations on live television, I asked John to please
calculate the total number of possible service
combinations assuming 87 applicants and a package
28503 His reply is as follows:
"The number I provided you did
not consider one per genre, nor
did it consider limiting the
number of licences one corporate
group could obtain. However, it
is accurate if you want to know
the number of combinations that
are 10 that are possible from 87
applications. For example, the
odds of winning Lotto 6/49 is
equal to how many packages of 6
from 49 possibilities.
Therefore, I was not surprised
at the four trillion number."
--- Laughter / Rires
28504 COMMISSIONER WILLIAMS: The answer:
"In fact, the answer is over
four trillion combinations. It
is four trillion, seven hundred
and fifty one million..."
28505 COMMISSIONER WILSON: Billion.
28506 COMMISSIONER WILLIAMS: Million.
"...four, forty-five thousand,
two hundred and twenty-six."
28507 So now you have a better appreciation
of the magnitude of the task before the Commission.
28508 A multi-digital challenge indeed.
28509 Thank you, Madam Chair. I will now
go into my questions.
28510 THE CHAIRPERSON: Enough to drive you
--- Laughter / Rires
28511 COMMISSIONER WILSON: Now, in your
analysis, which I assume did not go through the four
trillion possibilities, you have come up with a few
different priorities that have not always included all
of the same criteria that the Commission had issued in
28512 I guess I would like you to comment
on the licensing of Category 1 criteria that you have
heard us discuss throughout the hearing.
28513 And would you rank the relative
importance of the other criteria: Attractiveness,
affordability, diversity and interactivity? If you
could rank those, please, and speak to them if you
28514 MS WILLIAMS: Well, all those
criteria were part of the ranking system that we used.
28515 Maybe I will just refer to you,
Monica, to be more precise about that.
28516 MS AUER: Thank you very much.
28517 I guess in terms of the CCA's
perspective, one of the most important criteria would
have to be that already clearly laid out by the
Broadcasting Act, in this case commitments to Canadian
programming, Canadian content, Canadian cultural
reflection. That is not to say that popularity of the
services would not be important, but I don't think
Parliament has explicitly laid out a requirement that
services only be licensed if they are popular.
28518 Nor would it be easy, I think, to
combine the notion of popularity with the notion of a
niche service. At what point should a niche service
require widespread -- an appeal in popularity before it
no longer becomes a niche-oriented service?
28519 So, in brief, we included all of
those criteria in our small assessment.
28520 But I would have to say that in terms
of the importance within our ranking Canadian content,
Canadian commitments to programming expenditures,
commitments to viewing or to programming provided
throughout the prime time period in the broadcast day,
those all came out as being dominant within our system.
In fact, they made up over half of the factors all
28521 MR. CRAWLEY: If I could just add,
just to take your exercise, I think I can safely say
that interactivity would certainly be at the bottom of
that list and diversity probably at the top from the
point of view of the arts community.
28522 The more opportunities there are for
diverse voices, the better it is for creative people.
That is why ownership was a factor for us.
28523 But in terms of interactivity, I
think as some of the intervenors that you have just
spoken with, including the cable people, have
indicated -- at least I take from their remarks -- it
is going to be a long time, I think we would all
recognize, before the digital television is anywhere
near the computer as we know it in terms of its
interactivity and the applications thereof, and there
are a lot of twists and turns, forks in the road, I
think was the term that the gentleman used, before we
know how that is going to roll out.
28524 I think it would be a matter of
concern to the arts community for sure if a lot of the
resources available from the system went into
investigating and exploring interactivity as opposed to
creativity and human expression.
28525 MS AUER: Commissioner Williams, if I
might just add, one thing that I didn't address was the
whole notion of what we would have liked to have
included as measurable criteria in our small assessment
28526 We would have like to have included,
for instance, the total number of original independent
productions that would have been provided each year of
the licence or over the total seven year period.
Unfortunately, different applicants provided that
information in different ways and it was sometimes
difficult to ascertain exactly what specific commitment
they were undertaking.
28527 We would have also liked to have
seen, I suspect, some greater detail on the notion of
licensing fees for independent productions, or for any
other production acquired from Canadians, to find out
whether in fact programming is getting more resources
over time or less. Unfortunately, we weren't able to
ascertain that from some of the application forms,
hence we couldn't include all of the applications and
rank them in a fair and systemic way, which is why we
are appealing to have several small lines added to your
application form to indicate that information in the
28528 COMMISSIONER WILLIAMS: I appreciate
the clarification that you are providing us, because in
reading your intervention and the replies by some of
the others, many suggested that there were problems
with the ranking system, maybe not the most appropriate
criteria, some elements were overlooked, focus on
selected criteria only failing to reflect the broader
range of considerations. These are just some of the
criticisms that I'm sure you are aware of that the
respondents to your intervention filed with the
Commission as well.
28529 So I wanted to give you the
opportunity to balance that up as to detract the
Category 1 criteria and you would be able to speak as
to why you feel the way you have ranked as the most
28530 MS WILLIAMS: If I may?
28531 COMMISSIONER WILLIAMS: Sure.
28532 MS WILLIAMS: If you look at the
table we have provided, our criteria are very, very
close to the CRTC's own criteria and we are approaching
this from the point of view of working artists and
producers. So of course we look at it through that
28533 COMMISSIONER WILLIAMS: Through their
eyes, yes. I appreciate that.
28534 MS WILLIAMS: Also, the small -- I
think in terms of the CRTC's licensing criteria, there
were some specific areas which were different because
this is the CCA. We are missing those other three
letters "RTC", otherwise we would be up there and you
would be down here.
28535 But, in any event, the main
differences lie, in fact, with things like programming
28536 I gather that some of the applicants
were somewhat concerned that perhaps we were
emphasizing something that the Commission itself had
not emphasized. On the one hand, this isn't a concern
of the CCA that children's programming be made
available to that very important niche audience of
ages, even though there are a number of services that
already provide some programming targeted at that
28537 But, secondarily, it is one point out
of a possible 19. So the idea that having children's
programming or not having children's programming,
perhaps on a news services for instance, just pulling
that out of the air hypothetically, it would not
invalidate the ranking system entirely.
28538 Indeed, many of the services did not
appear to include within their applications specific
references to children's programming. That didn't stop
them from doing very well in the ranking system.
28539 COMMISSIONER WILLIAMS: Okay.
28540 In your written intervention you have
provided a comprehensive analysis of all the Category 1
applications with respect to the nature and amount of
their Canadian content.
28541 Do you consider this to be the most
important element to be considered in our
28542 MS WILLIAMS: Yes. Yes.
28543 COMMISSIONER WILLIAMS: Okay.
28544 MS WILLIAMS: Canadian content and
diversity of Canadian content, yes.
28545 COMMISSIONER WILLIAMS: How many
Category 1 applications should the Commission consider
licensing at this time?
28546 Should it license more than
10 English Category 1 applications?
28547 How many French Category 1
28548 Those are three questions.
28549 MS AUER: If I could -- you will have
to repeat the three questions, I was trying to --
28550 COMMISSIONER WILLIAMS: Sure.
28551 MS AUER: I stopped listening after
the first two because we were debating who would pick
up the baton, as it were.
28552 In terms of the package, I think most
of the applicants have come in with the clear
understanding from the Commission's first announcements
in this matter that there would be 10.
28553 COMMISSIONER WILLIAMS: Ten or more.
28554 MS AUER: Ten or more, but most
people were going in with 10.
28555 As I think one of the Commissioners
has already mentioned, the Commission has not yet faded
into the black. It is going to be around for a while.
There are going to be more licensing rounds.
28556 The Commission has also indicated
that it will be licensing a number of Category 2
services, so it isn't as if there are only going to be
10 digital services, there are going to be 10-plus. We
just don't know exactly where the 10-plus will be.
28557 The cable industry, and I think the
other distributors, have indicated that they need
programming content, so it is not as if they are simply
going to ignore the Category 2 services that are going
to be licensed.
28558 So that was one question, and I have
forgotten the other two.
28559 COMMISSIONER WILLIAMS: Okay. Just
on that, though, wouldn't limiting it to 10 also limit
diversity which you rank high?
28560 MS AUER: The brilliance of our
assessment system is that we have something for
everyone in our package. So no, we wouldn't be
limiting diversity, indeed --
28561 COMMISSIONER WILLIAMS: I will have
to study it more closely.
28562 MS AUER: Indeed I think we will
actually be enhancing it.
28563 For example, we strongly supported
the notion of a books channel. I think it is a rather
interesting concept that you actually use TV to promote
literacy, authors, reading. It's a good thing, as
Martha Stewart would say.
28564 COMMISSIONER WILLIAMS: Okay. So
28565 MR. CRAWLEY: If I can just add, I
don't think amongst the membership of the CCA there
would be any great cause for alarm if you were to
license more than 10. We have other issues that we
would like to see represented in the choices that you
make and certainly there are other very worthy
applications that didn't make our top 10, so I don't
think we would have any great objection if you elected
to go for 12 or 14, as long as they were good ones.
28566 COMMISSIONER WILLIAMS: Okay.
28567 You have answered -- that's two. Two
out of three.
28568 So how many French Category 1
applications do you think the Commission should
28569 MS WILLIAMS: In our ranking there is
only one channel, Cinefest, that is one of the
bilingual channels, and we have listened today to two
intervenors who spoke about the time that is required
for services in Quebec to get up to par and to take
their place among the digital channels. So we would
respect their interventions and urge you to follow
28570 COMMISSIONER WILLIAMS: Could I get
your comments on two other areas of diversity: One,
diversity of ownership in the Canadian broadcasting
system and, the other, the concept of regional
diversity brought up in an example by Salter Street
Films and, I guess, the Alberta application.
28571 MS AUER: In terms of diversity of
ownership, I guess again we are guided by Parliament
and the Broadcasting Act and I think there is a clear
expectation within section 3 that diversity of use be
enhanced rather than restricted because that's the
nature of a democratic country such as our own.
28572 In terms of regional diversity,
certainly in terms of ensuring that Canadian culture
and Canadian performers across the country have a fair
share in the broadcasting system, it seems like a
reasonable idea to spread the wealth. I think one can
look at some of the marvellous programming that has
come out of CBC from the east coast. I'm sure we will
see more from the north and from the west if you
licence a number of different services.
28573 As you will note from our ranking
system, one of the things we did do, going back to the
whole notion of concentration of ownership, is that we
limited one application per owner, so to speak. The
reason is so that we could ensure that the profits and
the income that will be generated by these wonderful
services will be spread more widely across a broader
range of people.
28574 If it's simply restricted to one
group of owners, they will be well financed for the
global market, but they won't necessarily have the
natural inclination to become far more competitive with
respect to choosing those who provide programming to
28575 In a competitive marketplace such as
our own, wouldn't it be a good thing to enhance that
competitive entrepreneurial spirit.
28576 COMMISSIONER WILLIAMS: So in effect
you might be able to think global, but not necessarily
be able to act global then.
28577 MS AUER: Maybe we should act
regional, think global and do local. I don't know.
There are many combinations of that one too.
28578 COMMISSIONER WILLIAMS: This is a
little bit outside, but I noticed it in the response
from your group. Earlier today we discussed issues of
flexibility and packaging amongst distributors and some
of the associations that represent them. Do you have
any thoughts in this area?
28579 MR. CRAWLEY: Well, certainly I think
you explored the context quite well, as you usually do.
I think again this is a question of educating the
consumer to realize because I think that the pick and
pay concept has been floated for so long without being
available that people think it's going to be a panacea.
It's clear to us from our point of view that it's not.
28580 In terms of -- I must admit I felt
some concern on the issue that brought me back to our
brief and my support for the concept of diverse
ownership. The concept of packaging by owner, as it
were, that was floated by the CCTA, it made me a little
nervous to think that, you know, people might go out
and buy a package that was all from the perhaps
persuasive or prevalent philosophical point of view of
one broadcaster in the country.
28581 It wouldn't be best for our
constituency if that were the dominant format that
finally emerged that, you know, that people will buy
the Alliance Atlantis channel package or they will buy
the CHUM channel package. I hope we can trust the
consumer to have a little bit more diverse interest
28582 It's not a huge matter of concern. I
can certainly see that from a business point of view
people will be looking to maximize that way. Again, as
we always do when we come here, we would urge the
Commission to remember its responsibilities under the
cultural mandate that it's got under the Act.
28583 Everyone knows that broadcasting is a
business. It has to be run well and prudently and so
on. But, from the point of view of the arts community,
it often seems that distributors and even programmers
are more concerned with maximizing their profits than
they are with creating excellent programming. If it
weren't for the existence of the Commission, they might
not produce what we would recognize as a Canadian
artistic creative program at all because it would be
too busy making money selling works from elsewhere.
28584 I would say it's not a huge matter of
concern to us because, again, we trust the Canadian
public will want diversity, but it's got to be offered
to them in the first place. We will be happy if in
your decisions you can also give some guidelines in
terms of how these things will be marketed.
28585 Certainly the Category 1, from our
point of view, exists primarily to assure that we won't
have one or two dominant players swamping some of the,
you know, perhaps more adventurous people who might
come up with a more distinct program that we haven't
28586 MS AUER: If I might add,
Commissioner Williams. One of the reasons that I think
the Commission is so well respected, as it indeed is
everywhere, is that you have set up a very nice system
of access rules. You have tried to establish your
policy interests or the Commission's policy interests
in ensuring that Canadian services have equitable --
however that's defined -- access to subscribers and to
Canadian viewers in the long run.
28587 One of the nice things though is when
you are talking about a playing field, it's just a
game. You are going to have winners and losers. You
shake hands at the end and you walk away. It's true
that in this business we generally talk about having
players on the field.
28588 Players need a referee from time to
time, otherwise fights break out. Referees have to be
fair, independent, impartial and the rules have to be
well known beforehand. But in fact, this isn't a game.
This is big business. Money is at stake. People don't
just walk away. They go out of business or they lose
their mortgages or their houses or whatever. That's
why it's critical.
28589 It's absolutely fundamental, I think,
that the Commission ensures that all those engaged in
the industry have an equal opportunity.
28590 COMMISSIONER WILLIAMS: Thank you.
Thank you, Ms Williams, Mr. Crawley and Ms Auer. I
have enjoyed this time learning more about your
intervention. It's late. I am going to pass you back
to the Chair. Some of my colleagues may have
questions. Thank you.
28591 THE CHAIRPERSON: We don't have any
questions, but perhaps we will phone you and negotiate
a price for your system.
28592 Thank you very much. We appreciate
how you accommodated us by staying us so late. We hope
you have a good end of evening nevertheless.
28593 MS AUER: Our sympathies are with you
because you are going to be here much longer than we
28594 THE CHAIRPERSON: Thank you very
much. Good night.
28595 Mr. Secretary, please.
28596 MR. CUSSONS: Thank you, Madam Chair.
28597 I would now like to invite the
Canadian Film and Television Production Association to
come forward and present its intervention, please.
28598 THE CHAIRPERSON: Mr. Ellis and your
colleagues, as soon as you are ready.
INTERVENTION / INTERVENTION
28599 MR. ELLIS: Thank you, Madame Wylie,
Madame Bertrand, Commissioners. My name is Stephen
Ellis and I am the Chair of the Canadian Film and
Television Production Association. I am also the
President of Ellis Entertainment, a Toronto based
company that has been a Canadian independent producer
and distributor for over 35 years.
28600 At various times my company has been
affiliated to broadcasting interests as well as a part
owner of one, although today we are independent,
unaffiliated and arms length from broadcasting. I have
a hunch you will be asking a little bit more about
28601 On my right is Marie Christine
Dufour, Vice-President of Public Affairs of Cinegroupe.
Marie Christine is a member of the association's Board
of Directors and an active participant on our Broadcast
28602 As you know, Cinegroupe is one of
Canada's leading producers of children's and animation
programming for television, cinema and new media.
28603 On my left is Guy Mayson, the CRTPA's
Executive Vice-President. Guy has had a long
association with the production sector and during his
time in government helped to develop a number of
important initiatives in the area of production
financing, tax incentives and foreign investment policy
for the cultural sector.
28604 On my far right is Tricia Arthurs,
the CRTPA's Director of Research and Development.
28605 We are pleased to have this
opportunity to elaborate on the issues that we raised
in our written intervention. The CFTPA is the national
trade association that represents the interests of
close to 400 production companies engaged in the
production and distribution of television programs,
feature films and multi-media from every region of
28606 Because a number of CFTPA members are
involved in some of the applications before you, we
wish to state that these oral remarks, as well as our
written intervention, were developed on the basis that
excluded input from CFTPA member companies with
interests in any of the digital pay and specialty
applications that are before the CRTC or existing CRTC
28607 We are encouraged that matters
dealing with the creation and exhibition of Canadian
programming have been front and centre in your
deliberations. Indeed, many applicants have embraced
the fact that their future success, like that of the
already existing Canadian pay and specialty services,
will depend on the diversity of domestic programming
that they offer.
28608 In our book, the diversity of
Canadian expression achieved so far as been the result
of your regulatory foresight, which has required a
significant commitment to both hours and spending on
original Canadian programming.
28609 We link much of that diversity and
output to the contribution of independent producers to
the system. And like broadcasters, our end user is the
Canadian viewer and, ultimately, if the viewers do not
like what we create, we do not exist.
28610 That is why we put forward five
recommendations in our written submission as criteria
to help guide the selection process.
28611 One, that the Commission give
considerable weight to those applications proposing the
most significant contributions to the creation and
exhibition of Canadian programming, the greatest
diversity of Canadian expression, and the greatest use
of independently produced productions.
28612 Two, that priority should be given to
those services that can demonstrate that they can add
diversity to the system, expand the audience base and
provide new outlets and financing for Canadian
28613 Three, that programming decisions
must be made in Canada; development dollars spent in
Canada; and partnerships with foreign parties must
respect the existence of a separate Canadian program
28614 Four, that clear and unequivocal
safeguards to limit self-dealing for
producer-affiliated broadcasters or
broadcaster-affiliated producers must be implemented to
ensure fair and reasonable access to the system by
28615 And five, the CFTPA recommends that
there is a need for separate compensation for the
28616 MS DUFOUR: The licensing framework
that the CRTC made public in January of 2000 addressed
many of the concerns of the association.
28617 We believe that diversity is one of
the most important selection criteria.
28618 Another essential criterion is a
maximum commitment to the creation and exhibition of
original Canadian programming. We believe that this
public process provides a unique opportunity to create
a strong Canadian presence in the digital world. To
that end, we encourage you to look at those applicants
who are willing to go the extra distance.
28619 We agree with you that interactivity
will be critical to driving the consumer acceptance of
these services. Many of our members are already
creating innovative "cross-platform" products. As an
example, at Cinegroupe we approach every project with
an interactive application in mind.
28620 Recently, we produced an animated
series for Radio-Canada called "Princess Sissy" and
subsequently produced "Princes Sissy" games for the
Radio-Canada Web site, creating a complete
28621 Multi-platforms for programming raise
serious rights issues. While "cross-media" promises
tremendous opportunities, there is also a risk that
licensees of digital programming services, as
gatekeepers to the digital platform, will have
considerable leverage over content creators to yield
intellectual property rights such as Internet use.
28622 Producers have only one thing from
which they derive their revenues -- intellectual
property. It may be intangible, but it is the basis of
our business. If we are forced to cede global Internet
rights to the programming we create for these new
services, the future of this industry will be severely
28623 The Association has always
represented the interests of creative entrepreneurs
and, in terms of small, medium and large enterprises
and we continue to do so.
28624 We are convinced that what has been
proven true in the broadcast realm will also be true on
the Internet. Working with independent producers makes
sense in terms of meeting Canada's cultural and
28625 MR. MAYSON: Throughout this hearing,
various definitions of affiliated, unaffiliated, arm's
length and non-arm's length production companies have
been proposed. The CFTPA has also been struggling with
these definitional issues.
28626 In our written intervention, we
recommended that you ensure that appropriate safeguards
be in place to prevent "self-dealing" or "undue
preference", in order to preserve access to the system
28627 We are not here to debate legal
definitions of "control". We would like to refocus the
issue on how to achieve true diversity.
28628 Attempting to monitor these
relationships or levels of investment through
definitions of "affiliated", then to in turn define
programming levels by what is affiliated and what is
not, appears complex and problematic. It is for this
reason that we have suggested that the type of
safeguards should relate to an area that is clear and
unequivocal and for which you have readily available
information. We have suggested that you have two
alternatives that are based on programming.
28629 The Commission could either implement
a cap limiting the amount of Canadian programming that
can be produced in-house and obtained from affiliated
producers; or the Commission could require a licensee
to obtain a minimum of programming from unaffiliated
28630 Both of the options proposed leave
plenty of room for broadcasters to produce material
in-house and acquire from affiliated companies. Given
this latitude, a simple and clear definition of
unaffiliated company is required. Essentially, there
should be no economic interest between the two
28631 The clarity of this approach would
allow you to stick to your objective for 2000-2003 to
"reduce the regulatory burden". The alternative of
attempting to regulate specific ownership levels seems
overly cumbersome and time-consuming to enforce.
28632 We are certainly not opposed to
equity interests being taken by licensees in production
companies and indeed this can be vital to helping to
underwrite ongoing production activity.
28633 We are also not opposed to a certain
portion of a licensee's schedule being produced by
entities in which they have an ownership interest. We
would simply maintain that such clear limits would
ensure diversity of creative view and an open,
competitive market for Canadian programming.
28634 Where we think the flexibility should
be applied would be with regard to the particular
conditions of licence applied in respect of services in
28635 MR. ELLIS: In conclusion, Madam
Chair, we would suggest that the Commission: Put a
heavy emphasis on the commitments made by applicants to
the creation of Canadian programming, their spending on
such programs and their commitments to the licensing of
programming from the independent production sector.
28636 To promote an environment that will
respect intellectual property rights, and to set clear
and workable safeguards concerning self-dealing.
28637 We believe that this approach will
ensure that we all reach our common goal to offer the
Canadian viewer the best programming in the world.
28638 It has been a pleasure for us to
appear before you today and we are now ready to answer
28639 THE CHAIRPERSON: Thank you,
Mr. Ellis, and your colleagues for being patient
waiting for us and looking still wide awake.
28640 Commissioner Demers.
28641 COMMISSIONER DEMERS: Thank you,
28642 Well, I thought you would not answer
all the questions I had, so I have just a few. Of
course, by commenting on the fact that it may be
difficult to find percentages of ownership and of
production it forces me to ask the questions anyway
because they are the questions and this is the
discussion we had up to now, but maybe your answers can
be related to the position you take here.
28643 So I will start with independent
films which you haven't dealt with in your oral
presentation. What would you consider to be the most
appropriate way to define an independent film?
28644 MR. ELLIS: Well, actually, this is
an area where it is somewhat easier, certainly within
the Canadian production industry because we generally
find that it's easier to define independents with
respect to particular production, than it is to define
it in relation to a particular company.
28645 I know there have been a number of
definitions floated, but particularly with regard to
independence of a film regardless of its nationality
and I know there has been some focus on the Hollywood
studio output as opposed to independent. Our concern
would be I think with respect to independents within
the Canadian market, which would tend to eliminate the
Hollywood studio issue.
28646 Is your question, though, aimed at a
definition that takes into account the world of film or
just the Canadian independent production of --
28647 COMMISSIONER DEMERS: Here I was
thinking more of what is an independent film because,
as you have indicated, some reference has been made to
the fact that an independent film is one that has not
been produced by a Hollywood studio. Others have said
that it's a film that is on Variety's list of 100 --
that has some reference to Variety's Top 100 Films.
These were the words that were around and I was
wondering if you have comments on that or not?
28648 MR. ELLIS: All I would add there is
that there are, I know the Commission is aware that
there are different concepts of independent,
particularly in relation to companies. I think there
are existing sort of ownership levels required for the
current tax credit system, for CRTC regulation.
28649 Telefilm in turn maintains quite a
stiffer definition in terms of what they call
independents and with regard to their own equity
investment, so because of some of the confusion over
some of this we felt that the APFTQ has a definition of
independent producers and so we felt the issue was
becoming kind of bogged down a little bit in the
discussion of independents and it might be better
focused on the issues of affiliated and non-affiliated.
28650 COMMISSIONER DEMERS: Okay. Let's,
then, talk about an affiliated producer, in the context
of the applications that we have heard -- and you have
made comments on that. But would you be able to be
more quantitative in your remarks than you have been
here in your oral presentation? I suppose because, if
we have to answer that question, we probably will have
to describe it in relation to something, maybe at
least -- the discussion here, in the last weeks, was
that there would be a percentage, in the case of
affiliation and in the case of independent producers.
So it's in this context that I ask, now, the question.
28651 MR. ELLIS: Well, I think it's
important, first of all, to appreciate that where we
would propose to make the distinction is not so much in
the context of a given company's ownership structure,
in relation to a broadcast licensee.
28652 What we are proposing is to, to some
extent, sidestep that question and to, instead, look at
proposed licensees' total Canadian production, to then
draw a line between in house and all affiliated
production, regardless of whether that affiliation is
at a 1 per cent level all the way up to a 100 per cent
level -- and on the other side of that line would be
28653 In terms of where that line should
be, what percentage would be on either side of that
line out of the total production, Canadian production,
for a given channel, we think that is where there needs
to be, just as a practical matter, some flexibility, on
the part of the Commission.
28654 And when we looked at the various
applications, it seemed to us that, in the context of
this hearing -- which is a very competitive one, within
genres of programming and in terms of the limited
number of Class 1 licences that might be available --
that each applicant is putting their best foot forward,
in terms of what they think they are going to be able
to do, in terms of Canadian production, given the
rigors of the marketplace that they are facing. And,
therefore, I guess our suggestion is that the
Commission look at what is appropriate for a proposed
licensee's production output for that genre of
28655 Clearly -- and I think our colleagues
in the APFTQ made this point, as well -- there are
certain types of programming -- news, current affairs,
sports -- which are not really the focus of the
independent production sector, which tends to be
focused on priority programming or the so-called
under-represented categories of programming, which is
where we have a demonstrable kind of track record in
producing at a level that Canadians watch and which win
awards and are exportable around the world.
28656 And so, if the Commission first looks
at the appropriate balance of in house and affiliated,
versus independent, if we were to start with the line,
I think our thinking is that, in a theoretical model,
you would draw that line at 70 per cent -- 75 per cent
unaffiliated, 25 per cent for in house and affiliated
production. But where the flexibility is needed is
that, clearly, certain applications would tend to lend
themselves more to one type of production or the
other -- and that's been reflected in the applications
28657 COMMISSIONER DEMERS: Thank you.
28658 You gave me a percentage. At least
28659 And you have indicated, in a sense,
that it could vary with genre; the genre could make it
more flexible, in some cases, rather than in others.
28660 The applicants -- many applicants
have indicated at -- I turn to another matter.
28661 Applicants have indicated that they
should own their own content.
28662 Could you comment on that?
28663 You have made reference, I believe,
in your oral presentation. But, to be more clear on
this, what are your comments on that? And this is in
the context of interactivity, as you will recall.
28664 MR. ELLIS: Well, certainly, our
concern is that the independent sector, primarily, has
one source of revenue, which is the exploitation of its
rights in the programs that it creates; whereas,
broadcasters, typically, have multiple alternative
sources of revenues, such as advertising, fees for
carriage in various forms of distribution. And so,
again, what we are promoting here is the notion that we
reserve a significant amount of space, you know, a very
substantial majority of the programming, for
independently-produced programming that is created
largely by unaffiliated producers who would retain
copyright ownership with the intention of building
their companies, their businesses -- as they have done.
28665 And I think it's important to
remember that broadcasters, typically, fund at a level
of 25 per cent of the cost of a given production, or
less, and it's the production industry that's had to,
over the past 15 years or more, go out and find the
missing financing in order to create productions that
Canadians will appreciate, and some of that's come from
public sources and incentives that the government has
put in place, but a lot of it comes from other private
sector sources and international sources, such as
exports and what have you.
28666 So, it's vital that producers are
able to maintain control of that exploitation because,
in a sense, they are able to produce more and supply
more to the system, if they are able to do so.
28667 MS DUFOUR: I think to complete what
you say is that we are not looking at 100 per cent
independently produced. We are looking at a proper mix
and a diversity in the systems and the different
sources of production, which means that broadcasters
can own part of their content.
28668 And the interactivity, what we are
saying is there are some producers that will negotiate
because they will have the facilities to do the
interactive applications. Others don't. And we are
asking that the two be separate, in terms of
negotiating rights; otherwise, we will go and we will
say, "We will pay you less for this; we will do
that" -- and that's just commercial negotiations.
28669 COMMISSIONER DEMERS: But the
approach taken in some cases where it's -- when you own
the whole -- all the rights, it's easier to go on the
international market with it.
28670 Do you have comments on that?
28671 MS DUFOUR: We totally agree. That's
our position, too. It's a fact. I mean once you have
all the rights.
28672 That's why we want to make sure that
we are capable of separating the rights and conserving
some of this.
28673 MR. ELLIS: Perhaps I could just add
to that, because it relates back to the question of the
degree of independence that you have been exploring
throughout the hearings.
28674 I think it's important to remember
that it's not just the equity ownership of production
companies that can be bargained within the system
amongst the various players, but it's also the equity
ownership of the programs themselves.
28675 And so, one of the reasons we are
recommending a fairly simple approach whereby it's the
unaffiliated producers that contribute the lion's share
to these new licensees is that even if you were, you
know, a 2 per cent owner of a broadcaster, or vice
versa, a broadcaster was a 2 per cent owner of your
company, they still have the ability to offer you, in
connection with each of your individual productions, a
significant equity investment. And, ultimately, I
think, your question, taken to the extreme, is that if
they offered you enough money, you would give up the
copyright and they would become the owner of your
production, as well.
28676 So this is one of the reasons why we
think it's a more complex issue than purely the
shareholding structure of the companies. But,
important to remember, the ownership of the programming
is also at stake here.
28677 COMMISSIONER DEMERS: Thank you.
28678 A last question on what, maybe, we
could call a benchmark.
28679 Would you have particular comments on
the amount of Canadian programming expenditures that
the Commission should require or the basis on which
these things should be -- the calculations should be
28680 There were discussions, during the
hearing, on different formulas on that.
28681 Do you have comments on that?
28682 MR. ELLIS: Now, are you referring to
some of the ideas put forward that there should be more
flexibility within the seven-year licence term? Or --
28683 COMMISSIONER DEMERS: Yes. Partly.
And, also, the Commission's own way of figuring out the
Canadian programming expenditures. Other people have
suggested different ways of doing it.
28684 MR. ELLIS: In our discussions we
certainly felt that there is considerable flexibility
in the way you do things now and there are certain
tolerances, I think, in the first year of the licensees
existence, and what have you, in an averaging system
that allows for fluctuations in the income streams that
a channel would experience from year-to-year.
28685 It seemed to us -- although, you
know, I can't say that our view on it is totally
expert, but we have consulted various individuals and
felt that the flexibility is there in a system that
works, that has worked historically, and we didn't see
any reason, even in the context of the new digital
environment, for that to be particularly overhauled.
28686 COMMISSIONER DEMERS: Yes, go ahead.
28687 MS DUFOUR: I'm sorry.
28688 Part of the answer too, which we have
said in the oral remarks, for us ideally instead of
number of hours to calculate the programming we would
prefer to have it done on dollars spent, if that
answers your question more.
28689 COMMISSIONER DEMERS: Thank you,
28690 I have no more questions.
28691 THE CHAIRPERSON: Mr. Ellis, you
posit something slightly different, but I want to see
whether you agree with me that it also raises a
28692 We have a number of applications
where producers are part of the shareholding of the
licensee, the proposed licensee company. So assuming
that a producer owns a third or a quarter or 40 per
cent of a proposed licensee and we license them,
particularly -- presumably the idea is that there will
be some synergies there that may well be positive for
the system, and suppose that producer is specialized in
a certain type of programming, in your view -- suppose
we use the hypothetical 25/75, that company could
produce 25 per cent of the so-called in-house
production of the licensee company of which it is a
shareholder and up to 75 per cent or all of the
independent production of its competitor, or a similar
program genre. Wouldn't that be one of the results?
28693 MR. ELLIS: I think --
28694 THE CHAIRPERSON: If you don't
address it at the ownership level of the licensee and
you say zero ownership, which is quite seductive
because you don't -- and instead, if I understand you,
limit the amount of in-house and put in affiliation
through any level of economic connection between the
two, that production company can produce 100 per cent
of the in-house of a non-affiliated licensee who may
well be in competition with the licensee in which it is
28695 You don't have a problem with that as
28696 MR. ELLIS: I think you --
28697 THE CHAIRPERSON: You know, if you
accept ownership as a good idea, synergies, whatever,
that the Commission should not discount ownership by
producers, but then it attempts to do something to
limit the closed shop possibility?
28698 MR. ELLIS: Well, if I understand --
28699 THE CHAIRPERSON: There is also a
counter argument where the synergies disappear and in
fact a possible problem for that production company may
exist, in which case it will discourage ownership by
producers and licensees.
28700 MR. ELLIS: Well, if I understand
your hypothesis here correctly -- and I think it is
correct based on the model that we are proposing -- is
that a producer with that cross-ownership would be
producing within whatever cap is placed on the in-house
and affiliated production for the licensee to which it
is related, but would also, in the open marketplace, be
in a position to compete with other independent
producers for shelf space, air-time on any number of
28701 But it seems to me --
28702 THE CHAIRPERSON: Which may well be
buying some programming in a type of programming that
this producer specializes in.
28703 It may not be a problem, but it would
appear to me limiting.
28704 MR. ELLIS: In terms of --
28705 THE CHAIRPERSON: In terms of the
ability of producers to get involved into ownership of
broadcasting undertakings, particularly of specialty
services, that they may find themselves capped with
regard to the broadcaster with whom they entered into a
shareholding situation and then trying to produce --
their production company trying to produce programming
28706 It may not be a problem. You are the
28707 MR. ELLIS: Well, I'm not sure that
it's a problem, because what we are trying to promote
here is -- and we are clearly acknowledging that there
is a value to affiliated production as well as a
significant one from independent production, which
contributes more to the diversity part of the equation,
but it seems to me -- and my colleagues should feel
free to jump in and correct me if they think I'm
wrong -- that if such a company is able to compete in
the open marketplace with other producers that would be
members of our association, and to the point where they
are in fact able to play substantial amounts of
programming, then I think that is healthy competition.
That is something that our members --
28708 THE CHAIRPERSON: My question was
more related to the licensee with whom it is
28709 Suppose you have an Exploration
Channel and a Discovery Channel and you can only
participate up to a cap in the Exploration Channel and
if you sell your good programming to similar
programming, like Discovery, the licensee with whom you
are affiliated may not be too pleased that you are
producing the same type of programming to make the
other service, which is somewhat competitive, more
28710 It is more the relationship within
the ownership of the licensee than the problem of the
producer competing to produce programming --
28711 MS DUFOUR: At the same time -- I'm
28712 At the same time, if you have a
15 per cent ownership in a channel we are giving "you"
the possibility of selling 25 per cent of the
programming of this channel. But also --
28713 THE CHAIRPERSON: Of course, that is
28714 MS DUFOUR: -- you have to look at
the other side.
28715 THE CHAIRPERSON: Yes. Other
ownership arrangements I think were made before any of
this type of rule was contemplated.
28716 But do you know what I mean? There
is a limit and if you are two shareholders how would
you feel if your shareholder's company is producing
terrific programming that makes another service more
competitive with the one in which you are associated.
Your partner may find that difficult.
28717 I think it is one of the fallouts of
ownership by producing companies in licensees and then
attempting to limit, by whatever method, especially if
the ownership is zero.
28718 It is seductive at first glance, but
it wouldn't be as limiting if you put the relationship
a bit higher before you say that is in-house because
there is an economic interest. You may spread the
advantages a little better.
28719 MS DUFOUR: I agree, but at the same
time we have seen alliances in the broadcasting system
of companies that are doing competing -- or competing
channels in the specialties.
28720 THE CHAIRPERSON: Yes. Of course in
the case of Alliance --
28721 MS DUFOUR: Alliance Atlantis with
28722 THE CHAIRPERSON: -- there would not
be the type of --
28723 I was thinking more of your
production company, Mr. Ellis, which is more
28724 MR. ELLIS: Well, in fact our own --
28725 THE CHAIRPERSON: -- rather than as
broad as the capacity of Alliance Atlantis.
28726 MR. ELLIS: In fact our own
experience over a long period of time, because we at
one time had a significant shareholding in our
production company by McLean Hunter, which had a number
of media interests including broadcasting.
28727 Our experience, however, was that
because we chose to position ourselves as an
independent in terms of our profile in the industry and
to make our programming available throughout the
system, that we were able to place our programming on a
variety of different competing services.
28728 But I think that is a matter of a
producer and their co-operating broadcaster interest
working out that balance. Once you put a system such
as the one we propose in place, then those become the
28729 I think you are right, it will
affect, perhaps, the level of shareholding in a given
situation, it will all relate to specialization of a
producer, the goals of that company, but when there
is -- though I think it is also important to remember
that in this area when it comes to individual programs
broadcasters and producers are working together to find
the right program for the right channel for the right
28730 I think if you were co-operatively
owned by another broadcaster, you would inevitably
offer them a show first. If they were to decide it is
not appropriate for them, then you would naturally say
"Well, it is in our joint economic interest to find the
appropriate home for this in the system."
28731 I think by virtue of the
cross-ownership both parties would tend to recognize
that once they had exhausted the possibility of working
28732 THE CHAIRPERSON: Thank you.
28733 I believe those are our questions.
Again, thank you for staying with us so late.
28734 MR. ELLIS: Thank you very much.
28735 THE CHAIRPERSON: Mr. Secretary,
28736 MR. CUSSONS: Madam Chair, we will
now hear the intervention by WIC Premium Corporation.
INTERVENTION / INTERVENTION
28737 MR. ROBERTSON: Madam Chairperson and
Commissioners, my name is Paul Robertson, President,
Corus Television. With me today is Malcolm Knox,
Vice-President of Operations, Corus Premium
Corporation, and Kathleen McNair, Vice-President,
Regulatory Affairs of Corus Entertainment.
28738 Corus Premium Corporation was
formerly WIC Premium TV Ltd. We own and operate
Superchannel, Moviemax! and Viewer's Choice Pay Per
View which are licensed general interest pay television
services in Western Canada.
28739 Since 1983, these services have
featured all appropriate Canadian films mixed with
foreign features. The vast majority of the content on
our services is theatrically released films.
28740 Our pay services are proving to be an
important driver in digital roll-out. Today, over
70 per cent of Superchannel's subscribers and 81 per
cent of MovieMax! subscribers receive these services
via digital technology.
28741 While we embrace the exciting new
world of choice that digital offers, we are in total
agreement with the Commission's licensing framework
that establishes that new services cannot be directly
competitive with any existing pay or specialty service.
28742 MR. KNOX: Now we will comment on the
independent film channel applications.
28743 We are not opposed to the licensing
of an independent film channel provided the service
complements the existing movie services and truly adds
diversity to the program offerings available to digital
viewers. Unless clear and easily enforceable
conditions of licence are imposed on an independent
film service, it could easily morph into a first run
movie channel that would be directly competitive with
our movie services.
28744 All the applicants appear to believe
that a service featuring independent films would not be
competitive with our licensed pay channels. In our
view, any such determination will ultimately hinge on
the definition of an independent film.
28745 Most of the independent film
applicants have suggested that any film other than
Hollywood studio releases should be considered an
independent film. CHUM has suggested that it be
permitted to air a proportion of films that are major
studio releases, up to 10 per cent of its schedule.
This would be very damaging to our services.
28746 Each year Superchannel offers
approximately 370 new movies on the service. Last year
the major Hollywood studios only released 121 movies.
Assuming Superchannel exhibits virtually all of these
new movies, 249 new titles, or over two third of its
total offerings would fall within the definition of an
independent film proposed by the applicants.
28747 In an effort to facilitate the
licensing of a truly complementary independent film
channel, we have developed and filed with the
Commission draft conditions of licence that would
provide the freedom and flexibility to operate a
non-competitive independent film channel.
28748 While contemplating the appropriate
limits to propose in respect of an independent film
service, we were drawn to the Commission's decision,
released last January, renewing the CBC's French
language television licence.
28749 In that decision the Commission used
Variety magazine's annual list of top 100 films to
define non-Canadian commercial blockbuster movies. We
believe that this definition remains appropriate and
should be applied to an independent film service to
ensure it does not become a blockbuster movie service.
28750 Blockbuster movies are essential to
the success of our movie services. If an independent
film channel is permitted to exhibit such films, it
would be directly competitive with our existing
28751 Additionally, we believe that any
definition of independent film must exclude films that
are released for distribution by one of the major
Hollywood studios, currently being MGM, Paramount,
Columbia/Tristar, Universal, Fox, Dreamworks, Warner
Bros. and Disney, including Hollywood Pictures and
28752 Since the foregoing definition for
independent films would include all Canadian feature
films, the exhibition of feature Canadian films is also
an issue that must be addressed.
28753 Superchannel has committed to exhibit
all appropriate and available Canadian feature films.
Our pay television customers expect, since we are
providing a pay service, that the first time they see a
theatrical film on television, it will be on our
service. If the new specialty licensees obtain a first
window on Canadian features, it would reduce the
perceived value of our pay services to our viewers.
28754 In our written intervention we had
proposed that an independent film service should not
run Canadian feature films that are copyrighted less
than seven years prior to the year in which they are
28755 After reviewing and considering the
written responses to our intervention, we now feel that
this condition could be approached differently in order
to maximize distribution opportunities for Canadian
producers while ensuring continued access to Canadian
films for our services.
28756 We propose the Commission impose the
following condition of licence on any independent film
service. The licensee shall not acquire any Canadian
feature film on an exclusive basis and that has not
completed its pay television window. We note that all
applicants have endorsed the continuation of an orderly
marketplace with the appropriate window for pay
28757 In summary, we endorse the addition
of a truly alternative film channel to the Canadian
broadcasting system provided the licensee (1) does not
exhibit any non-Canadian feature film from
Category 7(d) that (a) has been listed within the top
100 films of Variety magazine's annual list of top
grossing films of the year in the United States and
Canada, (b) was released for distribution by one of the
eight major studios, (2) does not acquire any Canadian
feature film on an exclusive basis and only once such
film has had a pay window.
28758 With the foregoing conditions of
licence, we believe that a Canadian independent film
service could complement our existing pay services.
28759 MS McNAIR: Most Category 1 and 2
applicants have included feature films, Category 7(d),
as part of their nature of service definition. We
consider it essential that some boundaries be
established to ensure that as these services evolve
over the years, they will stay true to their
definitions of service and do not transform into
something else. Therefore, we applaud the Commission's
approach during this hearing to examine very closely
each Category 1s nature of service in an attempt to
establish clear programming limits.
28760 We believe clear and enforceable
limits need to be placed on both Category 1 and
Category 2 services, particularly in respect to feature
28761 Given the number of services
proposing films, the cumulative effect on our pay movie
services would be very detrimental. If a number of
services are licensed without clear limits on movies,
the net result would be that feature films would be
carried in competition with Corus Premium's existing
services. This would lead to a death by a thousand
28762 It has long been the Commission's
practice to limit the exhibition of feature films by
specialty services, both by time and by genre. For
example, the recent decision concerning The Food
Network limits the licensee to one feature film per
broadcast week and requires that "all films must have
food as a central theme". The MuchMoreMusic licence
limits the use of movies to one music related feature
film per week.
28763 We agree with this approach.
Therefore, we suggest that if Category 1 and Category 2
applicants have proposed programming from
Category 7(d), conditions of licence be imposed
limiting the amount of feature films.
28764 We propose that the Commission impose
the following conditions: No more than 10 per cent of
the overall schedule in any broadcast week may include
feature films. Two, no more than 10 per cent of prime
time, 6:00 p.m. to midnight, in a broadcast week may
include feature films. Three, all programming must be
consistent with the theme, format or genre proposed by
the respective applicant.
28765 We believe that these limitations
will allow flexibility and offer a reasonable
opportunity to feature genre-specific feature films
without making the service directly competitive with
our movie offerings.
28766 We would also note that similar
restrictions must be imposed in respect of Category 2
applications. In fact, we believe that such a
restriction is perhaps more important since the nature
of service of those applications have not been closely
examined in an open and public proceeding such as this.
28767 MR. ROBERTSON: In conclusion, Corus
welcomes the licensing of attractive digital services
that will add more diversity to the Canadian
broadcasting system and increase opportunities for the
exhibition of Canadian programming while respecting the
Commission's framework that these services not be
28768 We would be happy to answer any of
your questions now.
28769 THE CHAIRPERSON: Thank you,
28770 Commissioner Wilson, please.
28771 COMMISSIONER WILSON: Good evening,
Mr. Robertson, Mr. Knox and Ms McNair. Thank you for
hanging in there with us.
28772 I know the hour is late and I don't
want you to think that because of that I am not taking
all of this very seriously because of course I am.
28773 I am forced to admit that I did have
a bit of a chuckle when I read in paragraph 4 of your
intervention the phrase "freedom and flexibility"
followed by the condition of licence that you set out
because the two -- it occurred to me that the two in
the minds of the applicants for independent film
channels might not go together, that their definition
of freedom of flexibility would quite likely be quite
different than yours because it seemed that -- and I
note that you have changed the third proposed
condition, but in combination the three proposed COLs
are quite restrictive.
28774 I guess what I want to do is just
pursue with you in two contexts, one with reference to
the independent film channels and one with reference to
your other intervention which touched on all of the
other services that are proposing to use the feature
28775 I guess what I want to understand
is -- and maybe we can talk a little bit about your
experience in the analog world in order for me to
understand this issue a little bit better, but I guess
I am trying to understand whether or not this is your
opening position. Sort of saying, okay, here's what we
really want, all three of these things, or is the sky
really going to fall if we don't do this with the
independent film channels and with all of the digital
28776 I mean, what has been your experience
in terms of analog specialties, for example, beating
you to the punch on rights for movies that you carry on
your pay services?
28777 MR. ROBERTSON: I will begin and then
I think Malcolm would like to add in. I will make an
overall comment before getting to the analog question
that you had.
28778 These services that we run are
blockbuster movie services. That's what they do and
Superchannel and MovieMAX! in particular, it's totally
7(d) for MovieMAX!. So there is no other programming.
28779 We exist now almost totally on
digital. Therefore, the competition that's about to
come on the scene will be on exactly the same platform
as us and could be pretty quickly up to the same kind
of subscriber numbers.
28780 COMMISSIONER WILSON: Has your
penetration increased on digital?
28781 MR. ROBERTSON: Yes, it has.
28782 COMMISSIONER WILSON: It has. Okay.
28783 I'm sorry to interrupt you, but I was
just curious about that.
28784 MR. ROBERTSON: Yes, it has increased
primarily as a result of direct-to-home.
28785 COMMISSIONER WILSON: And has it also
increased because I think in some of the Shaw systems
they were swapping out the decoders, which is the old
set-top box for the new addressable set-top box and
they moved pay TV and that was part of the whole
program to introduce digital?
28786 MR. KNOX: Yes, that's exactly what
28787 COMMISSIONER WILSON: Right. You
were the first phase offering?
28788 MR. KNOX: Yes. Growth in cable for
us has been flat everywhere except Shaw, who has very
aggressively rolled out digital and also approached it
in a very creative pricing approach. That has made
quite a difference and we have seen a nice rise in
subscriber levels with Shaw.
28789 But just to comment on the
programming for a moment, with respect to Superchannel,
Superchannel is the premier pay service in the west.
Today there is an orderly marketplace that sees movies
moved from theatrical release to the video store,
pay-per-view, et cetera. That's very much intact, so
we really don't have a great deal of difficulty getting
movies for Superchannel.
28790 In fact, when we talk about the top
100, we air virtually every movie in the top 100 list
and that represents one of the cornerstones of our
28791 The only movies that are not
available to us in the top 100 are really movies
primarily owned by Disney, which are destined for video
release and they are just not available to us.
28792 COMMISSIONER WILSON: Right.
28793 MR. KNOX: MovieMAX!, however, is a
different animal all together. MovieMAX!, as Paul
said, is limited to feature films and theatrical
release films, 7(d).
28794 We acquire a lot of films on a
non-exclusive basis for MovieMAX! and we are starting
to have some difficulty in getting enough Canadian
movies and we are competing for foreign titles as well.
28795 COMMISSIONER WILSON: Remind me what
your COL is with respect to Canadian movies for
28796 MR. KNOX: It's 20 per cent.
28797 COMMISSIONER WILSON: Twenty per cent
28798 MR. KNOX: Yes.
28799 COMMISSIONER WILSON: Okay.
28800 MR. KNOX: Granted that's very low,
but at the time it was recognized that it's difficult
to go back in time and create Canadian content because
MovieMAX! is restricted to movies that are at least
five years old.
28801 COMMISSIONER WILSON: In your opening
remarks you talked about how many movies you run every
year and Hollywood only released 121 and the other 249
you had to get from other sources and that included the
Canadian films. Everybody talks about how movies are
one of the big digital drivers.
28802 MR. KNOX: Right.
28803 COMMISSIONER WILSON: So would you
not say that the reason that people are purchasing your
service is because they want to see those 121 films, or
the top 100 films that are released each year. They
are buying it for that reason. They are not
necessarily buying it for the other movies?
28804 I know when I bought it, I bought it
because I stopped going to theatres as much as I used
to because of parking in Toronto and traffic was so
awful and I thought I would rather sit in my living
room and not listen to people talking all through the
movie, which really annoys me, so pay TV was the
perfect solution. But it was for the new release
28805 I mean I might have dipped in and out
of the other movies that were offered.
28806 MR. KNOX: Certainly.
28807 COMMISSIONER WILSON: Is it your
experience from having been at Superchannel that people
would buy the service for those top 100?
28808 MR. KNOX: Certainly. Yes, that's
what they are looking for, the popular movies. They
don't have to rent them from the video store. Mind
you, we are a little later than video, but certainly
that's what they are interested in.
28809 COMMISSIONER WILSON: And of those
100, what percentage of those would actually be
28810 MR. KNOX: Well, we had a look at the
top 100 from 1999 and we found 12 titles on it for last
year that would be considered independent.
28811 COMMISSIONER WILSON: So there might
be an overlap of 12 movies between you and an
independent film channel if they were going to take
them from the top 100?
28812 MR. KNOX: Correct. If they were
allowed to, yes.
28813 MR. ROBERTSON: I might just build on
that. Twelve out of a hundred may not seem to be a
huge amount. I guess I would reinforce that we would
agree with you totally that this is why these movie
channels are purchased is because of the top 100, the
28814 One could take 12 titles and very
effectively schedule them in prime time and do some
serious damage to our services. So even understanding
that we are talking about 12 movies out of 100, we
think that that would have a serious impact on our
28815 COMMISSIONER WILSON: Okay. I guess
maybe I am a Pollyanna, but it just seems to me that
people who are interested in independent film it seems
to be a philosophical commitment to independent film.
Again, I said call me Pollyanna, but their proposals
are for independent film channels and they seem
committed to that genre and they seem to know very
clearly what they think an independent film is and that
that's what they want the service to be and God knows I
would love that because I am not sure that Hollywood
always makes the best movies. You can always tell what
the ending is before it even happens.
28816 What do you think would motivate them
in the absence of all three of those restrictions?
What would motivate them to become a general interest
movie service such as you have described, such as you
28817 MR. ROBERTSON: Let me begin and then
Malcolm perhaps would add to it.
28818 I think that any service would be --
despite the genre, it would be looking to maximize
ratings. And, in this instance, what they would be
able to do is take the independent, the, you know,
non-Hollywood majors that were on that top 100 list and
aggressively schedule them in prime time and that would
be our major concern, that they could use those select
titles. I mean we are talking about films such as
Austin Powers, for example, which, you know, would
definitely hit, you know, as No. 4 on the list of top
100. One could spend a lot of prime time on movies
like Austin Powers, and we think that that, you know,
is not really -- it doesn't really give life to the
idea of an independent channel which, if you look at
the applications of all the applicants who applied for
an independent channel, what they were talking about
is, really, movies that don't get seen currently on the
air. Well, these movies are getting -- I mean they are
in our top 100; they are constantly on the air. So, we
don't know how, you know, adding these films to an
independent channel would really add to the diversity.
28819 COMMISSIONER WILSON: All right. I'm
not sure, Mr. Knox or Mr. Robertson, that you answered
my question about the analog specialty services and
whether or not they had scooped you on rights -- if
that's been your experience in the analog world.
28820 MR. KNOX: To some extent, we have
had some difficulty with Showcase getting some -- tying
up some movies.
28821 COMMISSIONER WILSON: But,
essentially, only with one channel?
28822 MR. KNOX: That's correct.
28823 COMMISSIONER WILSON: Okay. I did
have a very pointed question about the third condition
but, considering the comments that you made in your
opening remarks, I will pass over that question.
Because I had read, as you did, the responses to your
intervention, with respect to the independent film
channels, and found the argument with respect to
Canadian movies convincing. I don't make decisions by
myself, but I, personally, when I personally read it,
thought that there was a good argument, in terms of
providing extra windows for Canadian feature films
because it is a sector of the industry that faces some
28824 If we were going to impose only one
of the COLs -- only one of the independent film
channels has said that they thought both were a good
idea, and that's Cinefest.
28825 If we were going to impose only one
of those COLs, which one?
28826 Let me be a little more specific
because I think they were listed sort of separately
before but, now, there's the one with two parts and
there's the second one.
28827 If we were only going to do the
variety list, the top 100, or the release for
distribution by a major Hollywood studio, which one
would be more effective, in terms of protecting your
28828 MR. ROBERTSON: Well, that is a
pointed question, and we have certainly talked about --
28829 COMMISSIONER WILSON: That wasn't the
one that I intended to --
28830 MR. ROBERTSON: Yes, well, that's
also a pointed question.
28831 Thank goodness you saved the other
28832 We think that the core of our movie
service is at the top 100. And when we look to protect
our interests, it's certainly the top 100 that we are
most concerned about.
28833 I think that what the Commission
might consider is a combination of the two, with some
flexibility, in the sense of restricting the top 100,
and also putting a limit on access to studio -- and we
were talking about a number of, perhaps, of 5 per cent
of the studio list.
28834 So, you know, clearly, we feel that
we would be most comfortable with the application of
those safeguards and that, then -- but if the
Commission feels they need to find some middle ground
on this, perhaps that's an approach that you might
28835 COMMISSIONER WILSON: And with
respect -- if I can just go to the other intervention
that you filed, No. 62, and if you look on page 5 of
your opening remarks, where you summarized that, you
talk about two things.
28836 First of all, in the second
paragraph: the one feature film per broadcast week.
And then you say no more than 10 per cent of the
overall schedule in a broadcast week. And no more than
10 per cent of prime time hours in a broadcast week.
So you are averaging that over the week.
28837 Does that work out to more than one
28838 MR. ROBERTSON: It works out to two,
in the evening period.
28839 COMMISSIONER WILSON: Okay. And why
did you decide that you could live with 10 per cent
there instead of the one feature film per week that had
been imposed on the Food Network and MuchMoreMusic?
28840 MR. KNOX: We were using the one film
per week as an example of a mechanism that you have
employed. We felt that because some of the services,
obviously, were having a higher level of drama, that
two, in prime, would be a more appropriate number.
28841 COMMISSIONER WILSON: Okay. Thanks
28842 Those are all my questions.
28843 THE CHAIRPERSON: Mr. Robertson,
would you be less concerned if, of the list of
independent film applicants, it were a combination of
film and documentaries? Or would your concerns be as
high? Because there are eight competing applicants.
Some are film only, the way I understand it, and some
combine the two.
28844 Would it create a certain level of --
would it be of decreased concern for you because there
would be less need to fill the schedule with films?
28845 MR. ROBERTSON: I don't think this
fundamentally changes our concern about --
28846 THE CHAIRPERSON: It would make no
28847 MR. ROBERTSON: -- running the top
films in prime, which is probably the --
28848 THE CHAIRPERSON: Because they could
still put the films -- but, except that I think there
have been limitations put on feature films and prime,
if I recall -- and have documentaries in prime. If
that were the case, presumably, it would be less of a
concern, would it not?
28849 MR. ROBERTSON: If --
28850 THE CHAIRPERSON: Because I'm
surprised that you didn't address this. But one
limitation would be to not -- if it's a film and
documentary channel -- not to have film in the hours
that are your prime hours.
28851 MR. ROBERTSON: Well, the main
restriction that we saw for the film and documentary
channel was that the three safeguards that we
mentioned, which is the major Hollywood studios, would
be restrictive in the top 100 box office and --
28852 THE CHAIRPERSON: Well, I understand
that. I thought, over and above, there may be a
greater level of comfort in non-competitiveness if
documentaries were shown in prime hours, that are prime
for your exhibition of film.
28853 But, anyway, it doesn't seem to be
28854 Thank you very much.
28855 MR. ROBERTSON: Thank you.
28856 THE CHAIRPERSON: Mr. Secretary,
28857 MR. CUSSONS: Madam Chair, our next
intervention will be presented by Canadian Satellite
28858 THE CHAIRPERSON: Good evening. More
--- Laughter / Rires
28859 MR. GIBSON: I have to say that at
about eight o'clock we started to regret requesting an
oral appearance in this hearing. But nonetheless, we
28860 THE CHAIRPERSON: Go ahead.
INTERVENTION / INTERVENTION
28861 MR. GIBSON: Madam Chair,
Commissioners. Thank you for giving us the opportunity
to appear before you today to present our general
intervention on the applications for new digital pay
and specialty services.
28862 My name is Scott Gibson. I am the
VP, Legal and Government Affairs for CANCOM. On my
left, Bruce Barr, Senior Vice-President, StarChoice
residential services and on his left is Linda Ahern,
Vice-President, Quebec of our StarChoice DTH
28863 On my right is David Lewis, Senior
Vice-President and Chief Technology Officer of CANCOM
and on his right is Wendy Herman, Vice-President,
Marketing of StarChoice.
28864 Bruce Barr will begin our
28865 MR. BARR: Thank you, Scott.
28866 CANCOM's StarChoice subsidiary is one
of two licensed DTH services in Canada. We have made
significant investments in StarChoice to introduce
effective competition among BDUs. Our investments to
date have exceeded $400 million and we have accumulated
operating losses of almost $300 million.
28867 These losses are a sign of our
success since they reflect the rapid growth in our
subscriber base. From our launch just two and a half
years ago, we now have about 450,000 subscribers to our
fully digital service. We have proven that we can sell
our programming services effectively. We have a
significantly higher penetration from our premium
services and have a market-leading response to our new
recent launch of new French services. There can be no
doubt that we are proving to be effective competitors
28868 Most of our subscribers to date have
been in rural areas. We have not been as successful in
urban markets. Why is this the case when our digital
service is clearly superior to cable offerings? The
number one answer is that residents of urban areas
simply do not see us as having a significantly
28869 We must offer more services and cable
to differentiate our program, but we do not yet have
access to sufficient services even though we have
substantially more capacity than cable. We need lots
of new services and we need them now so that we can
persuade more Canadians that there are clear advantages
to choosing digital.
28870 We have made the investments to
address this competitive challenge. CANCOM has
committed to expand more than one billion dollars in
satellite distribution facilities. By next February,
for example, with the launch of ANIK F1 and the
deployment of our elliptical dish, our channel capacity
will grow to 300. With the launch of ANIK F2, we will
be able to offer our subscribers up to 400 channels.
28871 We have also made investments to
incorporate interactivity in our set-top boxes so that
interactive services may be included in these channels.
28872 David Lewis will be pleased to give
you more information on this technology in the question
28873 MS HERMAN: Our 300 to 400 digital
channels will create intense competitive pressure on
cable. They will have no choice but to digitize
aggressively and when they do, we like our chances.
When consumers have a choice among digital suppliers,
our packages, features and prices will be superior.
28874 We need to do a few things to make
28875 First, we need fabulous, attractive
services, with superior content that people want to
buy. Viewers buy content, they don't buy empty
28876 Second, we need lots of new services.
We need to have sufficient new services to achieve a
critical mass and offer compelling packages to our
28877 Finally, we need these new services
soon. We will have 100 channels to fill up beginning
as early as February of next year. But for the delay
in the launch of ANIK F1, we would have had that
capacity within the next few weeks.
28878 To achieve these goals, the
Commission must maximize the competitive pressure on
the successful applicants in this proceeding. They
must be prepared to make up-front investments quickly,
as we have, and face the realities of a competitive
28879 Competition among program suppliers
is a good thing. As the Commission knows from all of
its recent accomplishments in telecommunications and
broadcasting, competition drives innovation and
imagination, improvements in quality, choices of
service and price reduction. Competition brings out
the best in all of us.
28880 Mme AHERN: Le Conseil peut adopter
un train de mesures afin d'optimiser la pression
concurrentielle entre les différents fournisseurs de
28881 Tout d'abord, les critères
d'évaluation d'une concurrence directe devraient être
assouplis. A notre avis, vous devriez baser votre
évaluation sur la disponibilité et la diversité de la
programmation d'un même créneau plutôt que du créneau
en soi. Nous croyons que votre premier objectif
devrait viser l'augmentation d'une programmation
distinctive auprès des téléspectateurs canadiens.
28882 Si les titulaires peuvent démontrer
le caractère distinctif de leur programmation à
l'intérieur d'un même créneau, alors ils ne sont pas en
concurrence directe. S'il subsiste un doute qu'une
titulaire entre en concurrence avec une autre, nous
croyons qu'il devrait être résolu en laissant place à
28883 Deuxièmement, le nombre de licences
de Catégorie 1 qui sera attribué dans le cadre de cette
instance, devraient être limitées. Les titulaires de
Catégorie 1 sont assurés d'un accès préférentiel à une
distribution numérique. C'est donc dire que tous les
services de Catégorie 1 obtiendront une garantie
d'accès équivalente aux services spécialisés et payants
actuels puisque StarChoice utilise une plate-forme de
28884 Bien que la pénétration des services
numériques des entreprises de distribution terrestres
soit actuellement limitée, cette réalité est appelée à
changer. Ainsi l'accès privilégié à une distribution
numérique deviendra alors aussi significative que l'a
été l'accès privilégié à la distribution analogique
dont plusieurs autres services bénéficient à l'heure
28885 Nous ne sommes pas d'accord avec
l'avis exprimé par plusieurs que soient accordées dix
licences de Catégorie 1. Nous croyons que le Conseil
devrait étudier la possibilité d'accorder très peu de
licences de Catégorie 1 s'il en est. Le Conseil a
favorisé un environnement concurrentiel pour les
entreprises de distribution. La notion de droits
d'accès privilégiés est incompatible avec un tel
28886 Nous sommes d'avis que de tels droits
ne devraient être accordés qu'aux services qui sont
incapables de survivre sans une aide réglementaire et
qui desservent l'intérêt public ou social. Nous nous
interrogeons quant à la capacité des services proposés
de répondre à ces exigences.
28887 Troisièmement, nous avons besoin de
façon pressante de services étrangers additionnels pour
distribution numérique au Canada. Les services
étrangers ont contribué et continuerons de le faire de
façon significative à la disponibilité et à la
diversité de la programmation distribuée aux Canadiens.
28888 Plusieurs services étrangers
n'entrent pas en concurrence directe avec des services
canadiens et ils diffusent une programmation qu'aucune
titulaire canadienne ne serait intéressée à diffuser.
28889 Plus précisément, nous avons besoin
de plus de services de langue française tant
domestiques qu'étrangers. StarChoice n'a pas accès à
un nombre suffisant de services de langue française.
Les services étrangers de langue française énumérés à
l'avis public 2000-68 offrent des émissions que nos
clients francophones de partout au Canada trouveraient
28890 Nous sommes donc d'avis que l'entrée
de ces services au Canada pour une distribution en mode
numérique ne devrait pas être indûment retardée ou
28891 MR. GIBSON: There must be a sanction
on the licensees to ensure that their commitment to
offer distinctive digital programming to Canadians is
real. We have made our investments in digital capacity
and the other BDUs have made their investments.
28892 Our great fear is that some Category
1 services and many Category 2 services licensed in
this proceeding will not launch promptly or indeed will
never launch at all.
28893 We therefore urged in our
intervention that all licences should be subject to a
condition requiring launch within six months of
28894 A number of participants in this
proceeding have suggested that the appropriate deadline
for launch should be September 1, 2001. There has also
been a suggestion that Category 2 service should have a
longer deadline. Some say up to three years after
28895 We do not agree with the September 1,
2001, for Category 1 services. We have been waiting
for these services for a very long time and we will
have empty satellite capacity available in February.
This is very important. We have to pay for the
capacity starting in February, whether or not we are
28896 If the Commission's decision in this
proceeding were issued as early as October, our
suggested deadline of six months after licensing would
allow for launch by March 1, 2001.
28897 We certainly do not agree with a
longer deadline for Category 2 licensees. Category 2
applicants have known since the beginning of this year
that they will, provided they meet specific criteria,
receive a licence. If their applications are serious,
they would recognize that the first to market advantage
is critically important in a competitive world. We
would think that they would already be making the
investments and preparations required for a quick
28898 Category 2 services will also receive
protection against directly competitive foreign
services being allowed into Canada in the future. We
think it is unreasonable and contrary to the best
interest of the broadcasting system to extend such
protection to services without requiring them to launch
at an early date. They can choose to launch whenever
they like, but they cannot sit on their licences and
expect that foreign competitors will be denied access
28899 Our view, therefore, is that Category
1 service which does not launch within six months of
licensing, which we trust will be very soon after the
conclusion of this oral hearing, should become a
Category 2 service. A Category 2 service which does
not launch within six months of licensing should no
longer bar the admission into Canada of a foreign
service which is directly competitive with it.
28900 The launch deadline should not
prevent services from launching before that date if
they are able to do so and distributors should not be
prevented from distributing services, including
eligible foreign services, as soon as they are
28901 On the issue of new foreign services,
CANCOM believes that the process outlined in Public
Notice 2000-6 should be expedited. It should be
possible to identify now those foreign services which
are not directly competitive with existing services or
with any of the services proposed in this proceeding.
28902 In our view, the Commission should
issue a call for new foreign services now and consider
submissions in response to the call at the same time as
it deliberates on the licensing services. Thus, the
licensing decision and the approval of new foreign
services could be released at the same time.
28903 MR. BARR: If the Commission adopts
the measures outlined by Linda and Scott, we will have
the means to provide the broadest possible menu of
digital services to Canadian viewers at the earliest
opportunity. This will be good for viewers, will
enhance competition between DTH and cable and will
benefit the new licensees in this proceeding. As Wendy
has said, competition brings out the best in all of us.
28904 MR. GIBSON: Madam Chair,
Commissioners, this concludes our presentation. We
hope that our comments today will assist you and we
would be pleased to respond to any questions that you
28905 THE CHAIRPERSON: Madam Bertrand.
28906 CHAIRPERSON OF THE COMMISSION: Good
evening and thank you for being patient with us and
having waited for tonight. We hope you had something
to eat so that you have some energy for some questions,
although I don't have that many because your position
in the oral presentation this evening is very similar
to the one I had read before coming to the hearing.
28907 It is a different type of position,
if I may say, from certainly the applicants we have
heard throughout the hearing, but also from other
28908 My first remark or comment would be
where's the Canadian content in your consideration? I
understand that you are there with an investment,
wanting to really benefit from the investment and be
capable of offering to consumers, possible customers of
28909 The Broadcasting Act by which you are
licensed and for which we have a responsibility in
order to implement the objectives has a very definite
and central part which is about Canadian content. In
resume, if worst comes to worst in the kind of scenario
you are putting forward is well, if Canadians are not
ready, can I really get on to it in the six months? We
will go for foreign services and please put on the
eligibility list foreign services as soon as possible.
28910 That's somewhat the message I am --
am I exaggerating? That's what I'm hearing. Where
should I be corrected? Please feel free to correct me.
28911 MR. GIBSON: Thank you, Madam Chair.
28912 I think that it's important to
characterize our position as we are completely
committed to creating a vibrant Canadian digital
28913 The reason that we have put the kind
of intervention that we have put together in front of
you today has as its sole purpose driving the
participants in the industry into jump-starting the
Canadian industry. There is a great benefit to the
Canadian broadcasting system in making sure that, for
example, the level of service that's now available on
American DTH systems, the grey market and the black
market, does not outpace that that's available on the
28914 What all of our proposals are
designed to do is to say the competitive market needs
to be put into place fully so that the Canadian digital
marketplace will flourish. If we don't do that, we run
the danger I think of the concerns that you have.
28915 What we are saying is look, we have
stepped up to the plate and we put the money on the
table. It's time for the Canadian programming industry
to start taking some risks, to start investing and to
really start moving on providing the kind of
programming that the viewers want.
28916 I would ask Bruce actually to comment
on the kind of advantage that having Canadian
programming and vibrant Canadian digital services has
in selling the service.
28917 MR. BARR: Just really to build a
little bit on Scott's point. What differentiates us in
the marketplace is the depth of our programming.
Clearly there is no indication from any of our services
that consumers don't want to consume large amounts of
quality programming, Canadian or foreign.
28918 What this intervention really does is
simply say, as Scott has detailed, we really need to
make sure there's an impetus to allow us to get the
services we need as quickly as we can get them. As I
say, there's nothing in our research and there's
nothing in our plans in terms of the services we will
be offering as we move to 300 and 400 channels that
would do anything other than be most respectful of the
broadcast rules that we operate under.
28919 CHAIRPERSON OF THE COMMISSION: Well,
I find somewhat of a contradiction. On one hand, you
say we have made lots of investment to increase our
capacity, yet with that capacity you are telling us,
for example, that Category 1, where in our framework
it's quite clear that we said more or less ten
channels, you are saying no, no, no, not ten channels,
closer to one and two and probably you would have
preferred zero and do you know some Category 2 and
28920 That's what we are hearing. The
capacity, it's almost as if you are saying and, you
know, maybe I'm wrong, but what I read into your
intervention is almost as though we have enough
Canadian, we don't need any more.
28921 What we need, though, is immediate
services to be launched to offer new packages, and in
order to do that we need more foreign services.
28922 Because there is somewhat of -- I'm
posing the question: Is it realistic what you are
proposing here, a decision in October?
28923 I have been seeing that the
Commission is being pushy a bit when I ask for a
decision by Christmas, October is quite -- like
tomorrow we will be still in the hearing for another
eight days. So the realism of being capable of having
a decision in October and a launch in March -- it is
not as in deciding on something that is already there
on the shelf, it is deciding among applications and
then there is negotiations and projects to be put --
comment dire donc -- d'être -- I'm getting tired, I'm
losing my English -- but to be borne in a sense that
they have to be put together.
28924 It is not something that is already
there and, you know, it is not in a catalogue or in an
inventory and you just put it on the shelf. That is
not how it can be played.
28925 So is it realistic, the kind of
calendar schedule you are proposing here, from your
knowledge of the system?
28926 MR. BARR: Let me address your first
question, which is: Is our intervention directed to
disadvantaging Canadian services? The answer is:
28927 What we are saying in the call for a
limitation of Category 1 services is simply we want the
marketplace and our customers to be the arbitrators of
choice. And it is nothing more than that. It is not
an agenda that does anything more than that.
28928 I think on the second question
regarding timing, most respectfully I think what we are
saying is we want to be able to be in a position to
launch these services as quickly as possible and that
the notion of a simultaneous launch date a year from
now just to us doesn't fit with either our capacity
availability or, frankly, our customers' needs and our
desire to be competitive in the marketplace.
28929 Again, it is not designed to
disadvantage a service in favour of an available
foreign service. That was not the intention and if you
interpret that intention I would respectfully again say
that is not what we meant.
28930 CHAIRPERSON OF THE COMMISSION: Tell
me -- I'm pushing you here so that we are all keeping
on our toes.
28931 What is the problem of having two or
twelve Category 1s if they are presented in packages?
And, yes, you have an obligation to carry them, but
having all that capacity that is not a problem. It is
always at the end the consumer who will have the choice
of the package. There is not necessarily an obligation
to "you take one, you take them all".
28932 It seems that what we have heard or
what has been as interventions, there has been all
forms of what the framework was saying is an obligation
to carry, not necessarily to be packaged in only one
package. You know, it is open to discussion and to
28933 So you seem to make a direct
relationship with the number to be carried with the
fact that at the end of the day the consumer has no
choice. Especially with 200 at first and then
300 channels, it seems to me that you are really
well-equipped to offer all the choices to your
consumers that they can be interested in getting.
28934 MR. GIBSON: I think to respond to
that question, it is important to understand when we
talk about why the marketplace should decide and why
there shouldn't be a large number of Category 1 service
must-carries. It is important to remember that this
negotiation and the launch of these services is going
to be quite unlike anything most of the intervenors and
applicants that you see in front of you have ever
28935 The reason is this: There is an
equality of interest and a commonality of interest
between the distributors and the programmers. We are
in it together. The programmers have what we need. We
need that content and we need it desperately.
28936 Our fear if there is an inordinately
high number of Category 1 services licensed is not
related to channel capacity at all, it is related to
understanding that in the digital environment the
playing field has levelled and this launch or this
roll-out as it happens over time is going to be
constructed in a conversation among equals.
28937 CHAIRPERSON OF THE COMMISSION: The
equals being whom?
28938 MR. GIBSON: Being the
distribution -- the digital distributors, ourselves and
ExpressVu and the rest, and the programming industry.
28939 CHAIRPERSON OF THE COMMISSION: Where
is the consumer?
28940 MR. GIBSON: As Bruce said quite
eloquently, our position will be informed 100 per cent
by the consumer. It has to be. Because if we don't
have what our consumer wants, then they are going to go
across the street to our competitor.
28941 CHAIRPERSON OF THE COMMISSION: Last
question, because I don't have much question about
that, as I said. It was really a mirror of your
28942 You haven't commented about an
ethical code or ideas that have been put forward by
some intervenors or applicants. Certainly you were
here earlier this afternoon when we had the discussion
with the CCTA, and I don't know if you were already
here this morning but with the CAB.
28943 Do you have any point of view to put
forward? Do you feel that you are talking about a
level playing field between programmers and
distributors? Am I to conclude that you don't see any
need to define any undue preference or to have a code
of ethics? Let the market decide and you feel that the
distributor will decide and the market will react and
if they are not happy they will go to the competitor.
Is that your answer?
28944 MR. GIBSON: That is very close to
28945 I mean, obviously we will operate
completely within the undue preference regime. But
absolutely, you have characterized it very well, Madam
28946 The discipline that we need as
commercial players in the marketplace comes to us and
it comes to us very loud and very clear from our
28947 CHAIRPERSON OF THE COMMISSION: Well,
28948 I don't have any other questions.
28949 THE CHAIRPERSON: Perhaps it's late,
but I don't understand the logic.
28950 The mantra of the consumer should
decide. The Commission said "Well, we will license at
least 10 Category 1 which the distributors must
offer" -- "offer to the consumer for the consumer to
choose from and then a whole array of Category 2s that
the distributor may choose to distribute or not, i.e.,
offer or not." Where is the consumer?
28951 Because your proposition is to
offer -- unless you are not responding truthfully when
you say that you want to offer as many -- to provide as
much Canadian content as possible, you want us to
license maybe none, maybe one, maybe two of the
services that you must, as a distributor, offer for the
choice of that consumer. So there would be none of
28952 The Category 2s you have full freedom
to offer five, ten. I don't understand the mantra "the
consumer should decide". Offering the widest array
possible should be the aim if the consumer wants
28953 So we help by forcing some services
that we feel enhance the achievement of the objectives
of the Broadcasting Act and you must offer them.
28954 I know there is packaging and so on,
but we hope some choice will be offered to the
28955 I just don't understand this at all.
Maybe it's late. Where is the consumer? You don't
even want us to help in having the widest array of
Canadian services possible. I just don't understand.
28956 MR. BARR: The message is very simple
and that is we endorse Category 1s that meet the
Commission's criteria for social need or public policy.
Beyond that the consumer mantra is what takes over.
28957 We believe it's not for us or the
Commission to choose what the consumer wants to watch.
We believe it's the consumer's choice.
28958 THE CHAIRPERSON: But are you
planning to offer services that aren't licensed? If we
are not going to license any Category 1, what is it
that you are going to have to offer to the consumer who
wants a lot of choice?
28959 MR. BARR: An array of 385 Category 2
services that we believe meet --
28960 THE CHAIRPERSON: That you are going
28961 MR. BARR: No, no.
28962 THE CHAIRPERSON: You the distributor
under the framework we have you are going to decide
somehow or other what it is among those, that 30 or 25
or whatever, you as a distributor will decide which
ones you think the consumer will want; whereas the aim
is to ensure, for us as the regulator, that there is an
array of offer. But it is late perhaps and so I will
28963 MR. BARR: I would really like to
address the comment. Today we live or die by consumer
activity, the number of new subscribers we add and the
revenue that we receive from those subscribers.
28964 Every decision that we make regarding
programming we consult our consumer. We don't make
decisions and will not make decisions on future
services in the absence of consumer input.
28965 I would submit that I'm not smart
enough, despite my grey hair, to know what the full
array of consumer choice is in these 384 new services.
We will not be the gatekeepers. The consumer will be
the one that decides.
28966 THE CHAIRPERSON: Thank you.
28968 MR. McCALLUM: Yes. Just one
question, if I may.
28969 Some of the Category 1 applications
that have been heard in this hearing process propose
regional distribution. Can StarChoice's DTH service
restrict the distribution to the regions proposed by
28970 MR. GIBSON: I would ask David Lewis
to address that question.
28971 MR. LEWIS: We certainly have the
capability to regionally blackout or geocode or postal
code a region, deliver the programming only to a
28972 The downside effect would be the fact
that the new satellites that we are going to in January
don't have any more regional beams, so we would be
offering that service on a geographic basis to all of
Canada, yet only selling it into a certain marketplace.
So in terms of efficient use of the capacity or the
bandwidth that we have in the satellite footprint, from
that perspective that would be the downside.
28973 But as far as being able to target or
sell only into a certain marketplace and restrict that
sales into a certain marketplace, we have the ability
in our software and the set-top boxes today
addressability to do all of that.
28974 MR. McCALLUM: Thank you. Thank you,
28975 THE CHAIRPERSON: Madam Bertrand has
28976 CHAIRPERSON OF THE COMMISSION: I was
just wondering, is your position coming from what we
had heard not so much in this hearing, but maybe more
at the time when we have adopted the framework we have
adopted, where we heard that it was necessary for DTH
and MMDS to get immediate services, so that they can
take advantage of their position of being digital ready
in a sense and more capacity to offer, especially in
the DTH. Do you see that as related or is your
position very much one that would be the same a year
from now and two years from now more inspired by the
digital technology or the digital universe as you see
it? Am I clear?
28977 MR. GIBSON: I think I understand
your question to be --
28978 CHAIRPERSON OF THE COMMISSION: Are
you trying to keep a competitive advantage over --
because even the CCTA this afternoon said that this
launch will be done especially by the DTH and MMDS
player, that you will be very significant in terms of
how that launch will be done.
28979 So in that universe you are call the
dominant by the CCTA. Is that your perception and is
the position you are having here is related to that
fact that you would like to remain in that position
after the launch? I am trying to understand if your
position is related to that or to the digital context
or environment per se.
28980 MR. GIBSON: Our position is related
primarily to establishing digital as a purchase option
in the consumer's mind. The promotion of the category,
as opposed to the promotion of StarChoice itself is
critical to incenting the growth of the digital
28981 If that doesn't happen, if as Bruce
said earlier if we can't say to the vast majority of
Canadian households that we have something different to
offer, then the digital-installed base is not going to
grow. We are not going to be able to support the kinds
of Canadian services that we are licensing in this
28982 Our position is related to moving the
digital offer into a space that says to the consumer
"we have something dramatically different to offer and
you should go out and investigate this."
28983 I will say this even crossing party
lines, Look and ExpressVu and the digital cable guys
would all say the same thing.
28984 Bruce, do you have anything to add?
28985 MR. BARR: I would just add that the
notion of dominance is an interesting one. Our sites
are set on two large customer bases. One, those
customers that are unserved and, as I said in my
opening remarks, that's where the majority of our
business is today.
28986 But, secondly, there are 8 million
cabled households. We have not successfully penetrated
those households to the same level that we have with
rural customers. That's where the big opportunity
28987 I would think ExpressVu and Look --
28988 CHAIRPERSON OF THE COMMISSION: To
get there before cable?
28989 MR. BARR: Clearly, we want -- well,
I don't think we will get there before cable. They are
there now and moving, but we have made the investment.
We are ready to go and we want to move as quickly as we
can because we think that again first move or advantage
in any marketplace is key to continuing to win.
28990 CHAIRPERSON OF THE COMMISSION: Thank
you. Thank you very much.
28991 THE CHAIRPERSON: Thank you very much
and thank you for staying so late.
28992 MR. GIBSON: Thank you for having us.
28993 THE CHAIRPERSON: Goodnight.
28994 Mr. Secretary, please.
28995 MR. CUSSONS: Thank you, Madam Chair.
28996 We will now hear the intervention by
28997 THE CHAIRPERSON: Proceed when you
INTERVENTION / INTERVENTION
28998 MR. HEMINGWAY: Madam Chair,
Commissioners and ladies and gentlemen, my name is Mark
Hemingway. I am the Senior Vice-President in charge of
Legal and Regulatory Affairs and the Secretary of Look
28999 To my left if Gary Kawaguchi. He is
the Senior Vice-President of Sales, Marketing and
Customer Care for Look.
29000 To his left is John Medline, the
Director of Regulatory Affairs.
29001 To my immediate right is Gord
Corlett, Look's Vice-President of Programming.
29002 To his right is Tim Penner, our
Director of Broadband Operations.
29003 I first want to say thank you very
much for allowing us to participate in this hearing,
and we are delighted to be here, despite the late hour.
29004 As both a 100 per cent digital
distributor and as a new entrant in this industry, we
followed the proceeding, obviously, with great
29005 We, unequivocally, support the
addition of approximately 10 new high-quality digital
networks to the Commission's eligibility lists.
29006 We trust that the Commission will
approve Category 1 applications that demonstrate that
they clearly have the ability to appeal to their
respective niche audiences.
29007 The quality and the audience appeal
of such networks is of vital importance to Look. Our
scarcest resource is channel capacity.
29008 The ability of such networks to
attract their audience is, therefore, of crucial
importance to us.
29009 As you know, however, we have chosen
not to support or oppose any particular application to
this proceeding. We believe that the Commission and
the other parties who you will hear, over the course --
have heard, and will continue to hear, are best placed
to conduct this exercise.
29010 We would like, however, to comment
briefly on the post-licensing period, which is
absolutely critical to the successful launch of these
29011 I think it's important, before doing
that, however, that we look backwards and go back to
1993, where the Commission identified universal
addressability as a distinct public policy objective,
"The implementation of universal
addressability will allow all
cable households to be served
and identified individually, and
will permit greater flexibility
in packaging programming
services, thereby providing
greater choice and customization
29012 And, later on:
"The Commission considers that
the spirit of the guidelines
should, to the maximum possible
extent, respect the fact that it
should be subscribers, who, by
their choices, determine the
popularity and success of
29013 In the public notice governing this
proceeding, the Commission, again, listed the
advantages of digital distribution, including the
ability to deliver more services and increased
flexibility in the way that programming services may be
29014 Since our launch, in southern
Ontario, just two years ago, Look has always provided
customized packaging and championed consumer choice.
29015 We have the most extensive experience
providing customized packaging. We believe that
individual customers are best able to decide what it is
they want to watch. If customized packaging
flexibility of the sort used by Look were denied or
rendered impossible, due to punitive network
penetration tables that charge us more for a less
popular channel, one of the best and most obvious
advantages of digital technology would be lost.
29016 Throughout this proceeding, the
Commission has heard all about network Internet
strategies, advanced corollary Web sites, interactive
television -- all made possible by digital technology.
29017 It follows that packaging models that
are based on the inherent limitations of analog
technology must not form the basis of the Commission's
29018 We urge the Commission to recognize
that digital technology fulfils a long-standing policy
objective of flexible packaging and to carefully
examine the whole rates, the assumed penetration levels
and associated penetration tables that form the basis
of the Category 1 applications.
29020 MR. KAWAGUCHI: Thank you, Mark.
29021 One week ago today, Look launched
29022 Looktvi.com is an Internet portal
that allows visitors to watch clips of their favourite
movies or shows, listen to an array of music, ranging
from jazz and classical to country and hip hop, or
watch live up-to-the-minute specialty broadcasts and
29023 The content is streamed directly to
the computer. The portal sets itself apart from more
traditional portals by searching and delivering content
that is 100 per cent streamed audio and video.
29024 Convergence of the Internet and
broadcasting is not the future; it is here. It is the
reason for BCE's purchase of CTV. It is the reason for
AOL's purchase of Time-Warner. It is the reason for
Look's merger, last year, with Canada's largest
independent Internet provider: Internet Direct.
29025 This convergence of Internet and
broadcasting provides a level of choice and
customization that was impossible until today.
29026 This is the environment into which
these new channels will launch.
29027 Yet, it has been suggested, by some
parties, that consumer's don't really want to customize
their own packages and they prefer pre-set or themed
29028 Indeed, it has been suggested, in
this hearing, that the Commission should express a
preference for larger pre-set packages and that
networks should be permitted to opt out of any method
of distribution that they don't like.
29029 We believe that the choice packaging
currently used by Look is a viable method of selling
these networks and should not be foreclosed by the
29030 Moreover, providing networks with the
right to opt out of choice packaging, while mandating
that the network be carried, unacceptably tips the
balance of negotiating power for distribution towards
29031 The notion that consumers don't want
such choice packaging flies in the face of recent
studies, our experience and common sense.
29032 The first evidence to the contrary
comes from the CCTA, which we heard this afternoon,
which commissioned a survey from The Strategic Counsel
to examine consumer preferences in the purchase of new
29033 The survey overwhelmingly confirmed
the common-sense view that consumers want to customize
their own television line-up. Sixty-eight per cent
found pick packs appealing -- Look calls this the
"choice package". Then there's the big fall-off to
themed packages -- only 37 per cent found such packages
appealing. And only 29 per cent found a large package
29034 Still, some parties to this hearing
have questioned the relevance of the survey that did
not include associated consumer costs.
29035 Look has operated its choice package
for over two years, with such associated costs.
29036 For example, in southern Ontario,
Look currently offers 40 discretionary specialty
channels. A consumer can take all 40 specialty
channels, for $20. On a per-channel cost of 50 cents,
it is Look's best consumer price deal per channel, and
just over one-quarter of our customers choose this
29037 On the other hand, Look's smallest
discretionary specialty package consists of 10
channels, and it sells for $10 a month. This equates
to a $1 per-channel rate, or double the per-channel
cost of the larger package, yet about half our
customers choose this package.
29038 In other words, most consumers do not
judge value on a cost-per-channel basis; they judge
value on the ability to design and pay for a package of
specialty channels they want.
29039 Most consumers at Look do not want a
large package, even if it offers the best supposed
value. They want the ability to choose, as long as
their customized packages are offered at a reasonable
29040 A critical side benefit of choice
packaging is the associated increase in pay television
29041 A Look customer can choose our basic
plus the 10 specialty channels of his or her choice for
29042 In southern Ontario, TMN is offered
for only $10.
29043 The majority of Look customers take
basic plus the 10 specialties of his or her choice plus
TMN, for a monthly bill of $40.
29044 A typical cable bill of basic plus
all three specialty tiers comes to about $40, without
29045 So, we are seeing a shift in purchase
patterns, but not a shift downward in average revenue
per customer. That remains relatively constant.
29046 Indeed, we may be seeing that a
typical consumer has in mind a set amount that he or
she is prepared to spend on television services. When
offered more services, they don't increase that
spending amount; they choose, from among the greater
number of services now offered, the ones that are most
valuable to them.
29047 We believe that up-selling Canadians
beyond their current budget will happen in small steps,
with incremental channels added by customers, based on
29048 Looks also understands that several
networks favour themed pre-set packaging as a
compromise position. They believe it offers consumer
choice within a set package model. It is the model
currently employed by Canada's two DTH companies.
29049 To this suggestion, Look borrows a
quote from Ottawa Citizen television reporter, Tony
Atherton, who stated:
"The only company that has come
close to having what subscribers
really want would be Look TV
which has offered a program with
a basic service that includes
the rental of the equipment and
then a sort of pick-and-pay
option on an increasing basis.
That is what, if you put
subscribers down in a corner and
forced them to answer, they're
going to tell you that they
want. They want that ability.
Cable hasn't been able to
deliver it for technological
reasons...Satellite has been
able to do that, and hasn't for
29050 I would be remiss if I did not
respond to the written comments of the Specialty and
Premium Television Association, or SPTV.
29051 The SPTV intervention boldly states
that pick and pay and pick a pack -- the SPTV's term
for Look's choice packaging -- are factors in Look's
allegedly disappointing sales results.
29052 SPTV's conclusions are simply not
29053 Look at sales records throughout this
summer. In June alone, look at it, over 7,000 video
29054 Despite operating only in southern
and eastern Ontario and Quebec, despite directly
competing with Canada's four largest and wealthiest
cable companies in largely urban markets, despite the
constraints of line of sight technology and despite the
fact that we only started launching new markets in the
past two years, Look has already attracted over 60,000
digital video customers by the end of Q2, almost double
our year end 1999 total.
29055 On a digital apples to apples basis,
Look is over half the size of Rogers digital customer
base. Not bad for a new company. To suggest that
Look's choice packaging model is unappealing to
consumers and has somehow driven down Look's subscriber
basis is simply not true.
29056 Look's growth will triple our
subscribers this year over 1999. Look is prepared to
let the market decide. We believe that we have a
winning choice package and strategy that will continue
to be supported by customers and investors. Specialty
channels should be willing to be judged on the same
29058 MR. CORLETT: The Category 1
applications before the Commission are niche by nature.
Book channels, pet and specialty, music channels,
channels about video games. These networks are not
designed to and will not appeal to the general masses.
29059 The Commission must ensure that the
networks business models do not assume high
penetrations and charge higher fees for lower and more
realistic penetration levels.
29060 The applicants knew the realities of
the digital environment when they prepared their
applicants. It is not the distributor's responsibility
to guarantee the success of the new networks.
29061 Look recognizes that choice packaging
may impact penetration levels of some specialty
channels. Look has pledged to work closely with the
networks and their associations to help promote, market
and increase the number of subscribers to each of the
networks in a choice environment.
29062 We recognize the mutual benefits for
the networks for Look and the Canadian broadcasting
system from such promotion, marketing and sales
initiatives. Look has already begun discussions with
the SPTV, the Canadian Association of Broadcasters and
network representatives to further cooperative
opportunities. Indeed, the choice packaging model
lends itself perfectly to individual network
29063 To date the Commission has focused
much of its attention on basic rates. Look believes
the Commission must shift its attention to
discretionary rates when the networks receive mandatory
carriage. These digital networks are true
discretionary channels and are unlikely to be placed on
basic. As such, the Commission must closely examine
the discretionary rates in the applications and the
penetration expectations associated with such rates.
29064 The Commission should forbid
penetration tables and guaranteed floors and should set
a rate for all distributors, regardless of the package
model chosen or the penetrations received. However,
Look believes the Commission should permit reasonable
29065 We suggest up to 10 per cent for high
volume digital subscribers. Such discounts are normal
business practice. The discounts would be applied to
the Commission's set or recommended wholesale rate.
29066 MR. HEMINGWAY: Thanks, Gordon.
29067 Look notes that the Category 1
networks have already achieved significant regulatory
29068 First, despite their niche nature,
they will be granted mandatory carriage on digital
systems. This is especially significant for digital
MDS systems with limited channel capacity. Ten
mandatory carriage channels equates to one fifteenth of
our total maximum number of channels. That is our
29069 Second, Category 1 networks receive
the treasured gift of one per genre exclusivity,
amounting to unchallenged ownership of a particular
programming type. This really equates to a sanction
monopoly in an era of choice and competition.
29070 Third, distributors such as Look must
adhere to the Commission's distribution and linkage
rules which mandate a preponderance of Canadian
services in a given package of channels.
29071 Fourth, distributors already
subsidize Canadian programming initiatives through
hefty contributions to the programming funds. In
Look's case, 5 per cent of our gross annual revenues in
southern Ontario and 7 per cent of our gross annual
revenues in Quebec and Eastern Ontario.
29072 Look also believes that a minimum
package size for choice packages, in Look's case ten
channels, offers significant protection to these
channels. To allow them to opt out of choice packaging
would be a step too far, which brings me to affiliation
agreements which were discussed at some length earlier
29073 It was suggested to the Commission
that it's normal business practice to enter into an
affiliation agreement. It was suggested to you that
it's common to enter into these agreements with the
American channels such as A&E and other channels.
29074 I think it's important to note that
there's an important distinction between the A&E
situation or the other American channel situation and
the situation before us today. Those American channels
do not receive mandatory carriage on our system. The
channels that are before you today are receiving
29075 Second, to say that there must be an
agreement of the sort that was described by the CAB and
the SPTV yesterday is another way of saying that
channels have a veto over the business practices of
broadcast distribution undertakings such as Look. They
are effectively saying that if they do not like the way
in which we propose to market their service, they won't
sign the affiliation agreements. That would be the
equivalent of us saying to them that we must have the
right to force them to put on programs that might make
the channel more appealing to our customers -- clearly
not an acceptable outcome either way.
29076 There seems to be an unwritten
assumption among the CAB, the members of the CAB, and
SPTV that Look does not have an interest in achieving
broad penetration. The Commission must remember that
we have a scarce resource. We have no more than
150 channels. We are highly incented to obtain the
greatest return possible on each of them.
29077 Here we are obliged to carry ten --
approximately ten new channels and we will want to
achieve the broadest penetration possible, but we --
29078 MR. CUSSONS: Sir, I'm sorry to
interrupt, but we are just past the 15 minute mark and
I believe we ask people to try to stick to ten minutes.
29079 Thank you.
29080 MR. HEMINGWAY: Fine. Would you like
me to finish my sentence or shall I stop?
29081 MR. CUSSONS: Madam Chair?
29082 THE CHAIRPERSON: Yes, of course.
29083 MR. HEMINGWAY: But we must be
allowed to do it in a way that makes sense to us. That
includes allowing us to having choice packaging.
29084 Thank you for listening to our
comments. We would be pleased to answer any questions
that the Members of the Commission may have.
29085 THE CHAIRPERSON: Thank you,
Mr. Hemingway, and your colleagues.
29086 Commissioner Demers, please.
29087 COMMISSIONER DEMERS: Good evening.
A few questions.
29088 The first one would be on your
presentation. It concerns your suggestion that the
Commission must closely examine the discretionary rates
and the applications and the penetration expectations
associated with such rates.
29089 Probably the question is how and in
what way and what really do you mean -- what is the
work that you think the Commission would do, especially
29090 MR. CORLETT: I think what we are
looking for is some direction from the Commission.
Most of the applications have suggested some wholesale
rates based on their business plans.
29091 In order for us to market them
successfully, we need rates that are somewhat set.
What we need are rates that are not based on
penetrations. That would be almost a make whole
29092 For example, if it's a 25 cent rate
and we are trying to retail a package of services for,
say, $5 to $ 10, then that's fine. But if it's based
on a penetration scale where if we only have a 20 per
cent penetration, we end up paying $1.50, then it is
impossible for us to continue offering the Look model
29093 So I think that it is important for
Look to continue to be able to offer the services, the
new services the way we have been offering them, which
is, in our opinion, the most consumer-friendly way of
offering new services.
29094 MR. KAWAGUCHI: Excuse me. If I
could just add to that.
29095 The perspective is, we heard prices
ranging from 19 cents to 65 cents for carriage, but
they had attached penetration rates that were somewhere
in the 60, 70, 80 per cent range -- quite high.
29096 To put that in perspective, 35 per
cent of our programming channels today have a cost less
than 19 cents. Only 10 per cent of our channels today
have a cost greater than 65 cents. That is assuming,
of course, we met that kind of penetration table. When
we are talking about channels of this sort, it is going
to be very difficult to hit 60, 70, 80 per cent
29097 What hasn't been discussed is the
price point for carriage with penetration rates that go
below that. That is the source of the business
discussions, the source of a lot of grief, I will call
it, in negotiating for carriage.
29098 The difficult aspect of all of that,
to put it in perspective, is we accept the notion of
mandatory carriage. We are willing to do that. But
when the network has the ability to opt out of our
packaging and to offer punitive rates for carriage,
rates that would take the cost to us for more realistic
penetration levels well above $1, starts to put it into
a price point that becomes very difficult for us to
29099 Again, final point, today we charge
$20 for all 40 specialty channels. Adding 10 at
65 cents, for argument's sake, is $6.50 in cost or
32 per cent of our revenue. We would have to start
taking price points to the consumer to a level that
would hurt, we think, ultimately the penetration and
the success of the marketing of these channels.
29100 COMMISSIONER DEMERS: Thank you.
29101 I would go back to your written
intervention, but also you have carried some remarks
tonight, and it concerns packaging and marketing.
29102 The question you have indicated, if I
put it in my own words, really that the Commission
should not interfere very -- that it should act very
lightly on packaging and marketing.
29103 Let's put the question more from the
Commission's perspective: Should the Commission be
more explicit on rules or guidelines with respect to
packaging or marketing Category 1?
29104 MR. KAWAGUCHI: We believe at the end
of the day that packaging is one of the fundamental
weapons we have, if you will, to compete in this
marketplace. Therefore, we would prefer not to see a
lot of guidelines put on forms of packaging. Again, it
is one of the central positions we have as we market.
29105 COMMISSIONER DEMERS: Thank you.
29106 So up to now the Commission has
published, as you know, in its public notice that the
Category 1 should not be offered in pick and choose
unless they are part of a package first. Have you read
29107 MR. KAWAGUCHI: Just for
clarification, when we offer -- in our current
packaging model, every channel -- any one of these
channels would be available. All of them would be
available in our pick them all package.
29108 So, in essence, we have a large
package, it is the pick them all package that all the
specialty channels are included for one set fee. So
they are in fact there and, as we mentioned, 25 per
cent or greater than 25 per cent of our customers
currently take that.
29109 We are not a pure pick-and-pay model.
We are a model that starts off with a package of 10
selected by the consumer, but the consumer is staring
off with a base package of 10. Incremental to that,
every package beyond that is a package of 11, package
of 12, et cetera, going all the way up to pick
29110 So again, we think we comply with all
of the requirements. It is offered in our largest
package, pick them all, and it is offered in every one
of our other packages, if you will. They just happen
to be chosen by the consumer.
29111 COMMISSIONER DEMERS: Thank you.
29112 I only have one other question and it
relates to the interactive set-top box, which of course
you are familiar with that more than others are.
29113 We have asked applicants whether --
and some have suggested that the Commission hold a
process to address issues such as cost-sharing and
access to the set-top box. Do you agree with this
suggestion for a separate process?
29114 MR. HEMINGWAY: We think it is
premature at the moment to consider such a process.
29115 The whole question of interactivity
is some way away and the form of interactivity that
will be offered by the various channels is not decided.
It is impossible, I think, today to say what form that
interactivity will take.
29116 I think that our position is that the
channels and the distributors should be given the
opportunity to work through those issues as and when
they arise and if there is a need for Commission's
intervention at some point in the future, come back to
the Commission then.
29117 COMMISSIONER DEMERS: Thank you
29118 Thank you, Madam Chair.
29119 THE CHAIRPERSON: Madam Bertrand has
a question, but Mr. Kawaguchi, you made the point,
which I understand, about the relationship between
penetration, and used figures that are very high.
29120 I'm looking very quickly through the
very large number of applications we have for Category
1, but have you counted how many have a penetration
rate that is above, let's say, 40 per cent? I thought
the figures you were using were very high. For first
and second year more of them are in the 30, 35, 40
29121 Did I hear right when you said one of
the problems you had is so many of the Category 1s have
expectations of penetration that are unrealistic and I
thought I heard you use 60, 70, 80?
29122 MR. KAWAGUCHI: Yes. In fact, my
understanding is when you go beyond the first year or
two of the introduction, where they in fact claim they
will have lower penetration rates. Their expectation
is for significantly higher penetration rates and
that's really the basis before me, their wholesale
29123 THE CHAIRPERSON: But you would agree
that the penetration rates at the beginning of the
process and at launch and so on are quite a bit lower
than 60? They are more in the 35 range?
29124 MR. KAWAGUCHI: Yes, but it really
comes down to when you get into the business
discussion, now understanding their business plan and
their expectations down the road, it forms the basis
for how they want to set penetration rates and
29125 THE CHAIRPERSON: Over time in
29126 MR. KAWAGUCHI: Over time.
29127 THE CHAIRPERSON: -- in their
affiliation agreement. I understand. Because the
penetration rates in the early years are really not in
that range. They are mostly in the 35, but I
understand your point now.
29128 Madam Bertrand.
29129 CHAIRPERSON OF THE COMMISSION: Good
29130 I would like some information. You
gave verbally to Commissioner Demers some information
about 10 per cent of the services were over a certain
rate and can you repeat those figures? That would be
29131 MR. KAWAGUCHI: I quoted some numbers
based on our current contracted rates, without naming
any networks and I said 35 per cent of our current
channels that we carry have a wholesale cost to us of
less than 19 cents, which was the opening number for
the Category 1 channels, and 10 per cent of our current
networks that we carry have a wholesale cost greater
than 65 cents, which was the high-end number quoted for
the Category 1 channels.
29132 So just for perspective, where does
it put these new channels in the pricing grid? Bear in
mind, as I mentioned, that pricing grid is anticipating
on the basis of a pretty high penetration rate.
29133 CHAIRPERSON OF THE COMMISSION: Your
35 per cent current that are less than 19 cents, are
29134 MR. KAWAGUCHI: The majority of them
would be Canadian.
29135 CHAIRPERSON OF THE COMMISSION: But
you have kind of inherited a partnering that had been
going on in the analog world for quite a long time,
where high penetration or good penetration numbers have
been achieved and it has allowed to kind of bring a
lower rate I suppose to the distributor first and
eventually that is transferred to the consumer.
29136 In this universe, I would tend to
agree with you that the penetration will not be that
high. Do you think that there will be really a
possibility of bringing good quality Canadian
programming and is it a concern to you and your
consumers for the kind of range you are providing us
with here, which is between 65 cents and 19 cents, and
especially when I think about in francophone markets
where, of course, we are talking about totally
different figures, if we want to even talk about
francophone service in the digital format.
29137 MR. KAWAGUCHI: If I could, I will
take a start at it and maybe, Gord, you might want to
29138 I think I understood two parts to
your question. One part focused on the need for a
certain price point to drive quality programming.
29139 CHAIRPERSON OF THE COMMISSION: Yes.
29140 MR. KAWAGUCHI: I guess I would start
off by answering we all want quality programming. But
given our position in the marketplace, where we are
saying we have limited channel capacity, we want every
opportunity to go and sell the maximum number of
consumers onto these networks and thereby driving up
the penetration rate, thereby creating the largest
possible pool for the programmers, for the system in
total to continue to generate the kind of quality
program to sustain itself.
29141 Starting off with high wholesale
rates and leading quickly to punitive wholesale rates
puts us onto a treadmill that perhaps never really --
it's not a helpful treadmill to put the whole system in
a positive -- gaining some momentum for subscribers.
29142 So I guess what I am saying is we are
starting off knowing that these price points are at the
high end. It's going to make it difficult to market
and that's in essence the most difficult aspect of it
because we should be trying to make it the simplest to
market. Because again, we want to maximize the value
of our channel and the networks have to help us. We
are looking for them to help us, as we are going to be
helping them drive the penetration rate.
29143 CHAIRPERSON OF THE COMMISSION: Does
that mean you would accept to work in a kind of
industry type of setting that has been proposed, kind
of working in a partnering mode with the programmers --
you know, ideas that have been floating around either
in the written interventions or during the hearing? Is
that an approach that you see would be conducive to the
success of all the partners involved?
29144 MR. KAWAGUCHI: Absolutely. We have
had, quote "heated discussions" as has been referenced
with some of the associations and, in fact, Gord
Corlett, has led the way in offering, if you will,
putting forward a proposal to work together to come up
with a creative solution.
29145 We have been innovators in packaging
and we are not saying this is the only packaging model
going forward. We are willing to work with all of the
associations in a collaborative effort to come up
with -- if there is a better way of doing it we would
be the first ones to step up and do that.
29146 CHAIRPERSON OF THE COMMISSION: You
think an ethical code would be welcome or
"superfétatoire", not necessary.
29147 MR. KAWAGUCHI: I don't think an
extensive code is necessary. I think, fundamentally,
we are asking for one thing and that is in the
licensing of mandatory carriage that the networks not
have the opportunity to leverage us by opting out and
to leverage pricing. That's the extent of what we are
29148 CHAIRPERSON OF THE COMMISSION: So
you would be welcoming some parameters that would talk
about undue preference on the two sides of the fence,
from the programmers' point of view and from the
distributors' point of view?
29149 MR. KAWAGUCHI: Yes.
29150 CHAIRPERSON OF THE COMMISSION: Thank
you very much, gentlemen.
29151 THE CHAIRPERSON: Thank you. We
appreciate again your patience in waiting. It's very
difficult for us to plan exactly how the day will
unfold and we would have one more party who would have
to stay overnight unless we heard them.
29152 So we certainly thank you very much
to have kept your good humour up to this late hour.
29153 MR. STEWART: Madam Chair, I am
29154 THE CHAIRPERSON: Sorry. Counsel.
29155 MR. STEWART: Just two very quick
questions. You suggested that the Commission should
set a rate for all distributors and have you got any
criteria to suggest to the Commission as to how that
rate should be set?
29156 MR. CORLETT: Well, I think,
obviously, the Commission has to look at the business
plans from the networks and what they recommend as a
rate. You know, we are not against, you know,
recommended rates. I mean we deal, like everybody
else, with every single network out there, and they all
come forward with rates anywhere from seven cents to
$1.50. So we will negotiate, in good faith, with
whatever rates the CRTC recommends, based on the
29157 I think, you know, what we are trying
to say here, today, is that, you know, we are willing
to pay fair and reasonable rates to ensure that these
networks can fulfil their Canadian content
requirements, but they shouldn't have, you know,
attachments to them that state that if they only get
20 per cent penetration, in Year 1, that we are paying
the equivalent of a higher rate because of that so that
they get the guaranteed income from us.
29158 So, you know, base it on their
business plans and make it fair to the distributors
29159 MR. STEWART: Basically, you disagree
with the business plans that have been proposed which,
as I understand it, are based on penetration rates?
29160 MR. CORLETT: Yes. In a situation
like this -- I mean we have been through it already,
with the launch of the four French services, in Quebec,
and, you know, four quality services that, you know,
were launched in a set package, not really -- unproven
services that our consumers weren't aware of, and, you
know, the rates were tied to penetration and, you know,
we have worked very, very hard to build the penetration
of this package but, you know, it's a tough sell. It's
a tough sell to the consumers. And, you know, maybe
they are doing well, at 25 per cent, you know, 29 per
cent. But, if we are doing well, at that stage, after
three or four months, our rates are punitive, you know.
We are being asked to pay them based on a "make hold"
type of scenario.
29161 So, yes, if their business plans
state that they need rates based on penetration, we are
29162 MR. STEWART: Thank you.
29163 MR. MEDLINE: Gord, if I can add one
thing to that, and that was that, at the time of the
four French channels, when they launched, the assumed
rate, wholesale rate, was going to be $2.79.
29164 We have never seen anything close to
that rate, on a wholesale basis, because of the
punitive penetration tables, and that was what the
assumption was, going in, and that's why we are seeing
lower penetrations now, because the rate is so high, at
29165 MR. CORLETT: And it's a vicious
circle, you know. Because of us having to pay higher
rates, we, obviously, have to charge our customers
higher retail; and when you do that, you make less
sales. So, it just goes around in circles.
29166 MR. STEWART: My second question is
the same one that I put to the CCTA -- I'm not sure if
you were in the room at the time -- but do you have any
comments on the operation of the "must carry" rule,
specifically, with respect to bilingual Category 1
services that may be licensed as a result of this
29167 MR. HEMINGWAY: I think, like CCTA,
we would like to have some clarification as to where
they must be carried.
29168 You know, to say that it's -- I guess
our view is that we should come out of this hearing
with approximately 10 must carry channels, and we will
carry those 10 channels. But if there's a thought that
those channels should only be carried in some areas or
should be carried in other areas, then that should be
29169 MR. STEWART: And, essentially, it's
up to the Commission to decide and -- that's your
29170 MR. HEMINGWAY: Yes.
29171 MR. STEWART: Thank you.
29172 Thank you, Madam Chair.
29173 THE CHAIRPERSON: Madam Bertrand...?
29174 CHAIRPERSON OF THE COMMISSION: I
apologize. I don't want to keep you unduly late.
29175 But your last comment -- and I
understand that the rates are, in terms of what has
been proposed in the application, higher than what we
have seen in the analog world, but I would like to know
what's your point of view.
29176 The services, from what we could
understand of the applications -- and it's true, of
course, in French and English, but more so in French --
you know, it is in the bargaining, the regulatory
bargaining, of providing Canadian content and providing
a real choice to consumers of the best programming that
can be. And even with the rates you are talking about,
what we see from the average applicants, in French, is,
after the fourth year, they are still not really
breaking even and they still have PBIT that is
negative, you know. It depends whether we take the
average or the most optimistic, or pessimistic, but, in
French, you have probably no more than 400,000
29177 So, would that mean that, in order to
get a price that would be more interesting, from your
point of view -- and, eventually, to the consumer --
the only solution is turn our attention when "la loi du
nombre" will play and, eventually, there will be no
French, we will go for English, and we won't have any
English, we will go for American, because it's always
where there is a larger market that, of course, the
price will always come down.
29178 Isn't there, in your comment, the
exact problem of how difficult it's been, over the
years, yet how successful we have been, over the years,
to develop the kind of broadcasting system we have been
able to develop in Canada?
29179 MR. KAWAGUCHI: I will take a crack
29180 We have acknowledge that, in the
Province of Quebec, cost of programming is going to be
higher -- and that's one of the reasons why, when we
look at our program fund contribution, we have got
7 per cent, as opposed to 5 per cent, and it comes down
to: there's a need for probably greater subsidization
for quality French content. It's a question of who
pays for that subsidization.
29181 We are contributing to it also
through the program fund, also as a distributor, as a
BDU. We are contributing to it in more than we would
really like to. The punitive wholesale cost -- we are
now operating to the point that wholesale costs are at
or above our retail price point and we think that again
is another subsidy.
29182 And I guess at the end of the day
there is a need to subsidize the industry. How much
can the BDU subsidize it because there is only a
certain price point --
29183 CHAIRPERSON OF THE COMMISSION: The
consumer, you mean, because at the end of the day --
29184 MR. KAWAGUCHI: At the end of the
day, the consumers --
29185 CHAIRPERSON OF THE COMMISSION: --
it's the Canadians.
29186 MR. KAWAGUCHI: But there is a limit
to how much a consumer is going to pay.
29187 CHAIRPERSON OF THE COMMISSION: Thank
29188 THE CHAIRPERSON: Thank you,
Mr. Hemingway and your colleagues.
29189 MR. HEMINGWAY: Thank you, Madam
29190 THE CHAIRPERSON: Have a nice rest of
29191 We will hear one more before we
29192 Mr. Secretary, please.
29193 MR. CUSSONS: Thank you, Madam Chair.
29194 Our last intervention this evening,
the Independent Film and Video Alliance.
29195 THE CHAIRPERSON: Mr. Sandmark,
29196 MR. SANDMARK: Yes.
29197 THE CHAIRPERSON: We apologize for
being so late. Somehow by being cooperative and being
here on the second day rather than the first day of
interventions you are being punished by being hear at
ten o'clock. We appreciate your staying and we are
certainly happy to hear you, considering you have to
29198 MR. SANDMARK: It's a fascinating
day, and actually we are happy to be on prime time. We
probably have a larger viewing audience.
--- Laughter / Rires
29199 THE CHAIRPERSON: There's a positive
way of looking at life.
29200 MR. SANDMARK: Our goal is to get
independent film content on national prime time TV and
here we are.
29201 THE CHAIRPERSON: That's what we like
INTERVENTION / INTERVENTION
29202 MR. SANDMARK: So my name is Peter
Sandmark. I am the National Director for the
Independent Film and Video Alliance.
29203 To my left is Barbara Ulrich, the
Quebec Regional Director on our board of directors.
Also she is in the employ of the Conseil québécois des
arts médiatiques, which is an association like the
Alliance for Quebec Film and Video Artists which is
fairly recent so it's a very good thing.
29204 I'm not going to stick to the script.
I'm going and try to cut to the chase and so apologies
to people. You will follow along a brief overview.
It's an association -- we are essentially a lobby
association representing 47 film cooperatives, video
centres across Canada -- every province, I might add.
29205 We have a regional board of
directors. We estimate we represent about 7,500
creators. Those are individual members of the
organizations and so I actually estimate the community
to be much larger because for every person who actually
have dues-paying members they have a couple of friends
that work with them to make their work. So we are
looking at a much larger community.
29206 Actually, Barbara, would you say a
few words about the Conseil québécois des arts
médiatiques because in Quebec it's a whole community in
29207 MS ULRICH: Yes. I think there is
some commissionaires here -- Madam Chair is already
aware. I will just say very rapidly that the Quebec
Council for Media Arts is a provincial mandated lobby
group which supports and represents, individual
independent creators, independent organizations in
film, video and new media and there are about 18
artists centres or coops or distribution organizations
or dissemination organizations and they are in general
about 2,000 individual creators within Quebec and I
would say that if the Quebec Council for Media Arts was
born, it was because -- and we have to thank the
Alliance for being there before and we found it was
important to create regional organizations because
there were regional problems.
29208 We know Quebec has this sort of
special cultural identity problem, so that sort of
helped it. But I mean, we have our plate full just as
Peter has his plate full on the federal level.
29209 MR. SANDMARK: So we are a special
interest group and we are here to defend our vested
interests. We are specifically commenting on an
independent film channel. I mean, that is our
expertise. We are not going to comment on the Home and
Garden Channel and all that stuff.
29210 All our comments are addressed to the
different applications we saw as being independent
film-oriented and we are really happy to be here
because I went through my old notes looking at this,
and a couple of years ago I made the recommendation to
the CRTC that they make the establishment of an
independent film channel a priority.
29211 So I'm very happy to be here. Things
have changed quite a bit and we are on the imminent
launch of an independent film channel, I think. So we
definitely have some recommendations. I will point to
number 3 on the list.
29212 For example, we think that the CRTC
should develop criteria for the acquisition of arm's
length produced independent film and video productions
and require even a minimum percentage of works acquired
by the channel to meet such criteria, above and beyond
the criteria for Canadian content.
29213 Now this, of course, brings us to the
crux of the matter: What is an independent film? And
you are fielding all kinds of answers to it. Well, we
29214 MS ULRICH: We have answers.
29215 MR. SANDMARK: I'm going to turn it
over to Barbara because we have something to say
29216 MS ULRICH: Yes, since we have been
here and we have read the propositions, it's very
strange because Canada has been a model in defining
independent film and video production, what it is, how
it works and how it's funded.
29217 Currently Canada Council distributes
$9 million annually to independent film and video and
new media artists to create independent works. It sort
of irritates me to see that there are proposals here
requesting the licence to distribute or to become the
digital independent film and video channels. They are
using American definitions of what "independent" is
whereas in Canada an independent film or an independent
video is a work in which the director or the creator
has complete editorial control over the work at all
stages of production.
29218 Such criteria is recognized by Canada
Council. It is recognized by SODEC in Quebec and they
have two programs. It is equally recognized by an
unofficial fund. It hasn't been officialized at
Telefilm Canada. That's the fund under $1 million for
29219 These criteria of independent film
and video works are known. We find it sort of strange
that the cable carriers and these proposals sort of
pussy-footed around a definition. We wonder whether
perhaps the definition is not convenient to them.
29220 We also noticed because -- when we
look at their schedule we noticed that they continually
confuse in-house programming to be independent
productions and they confuse that with independent
29221 We are here to thank the CRTC for
considering the final opening of a window for
independent film and video. As such, we know that
there are actually currently 10,000 works sitting on
shelves across Canada ready to be shown.
29222 Insofar as figures go for theatrical
distribution, they are very low. In Quebec it accounts
for 2 per cent. This includes independent commercial
productions, independent independent productions and
independent foreign productions. We can estimate that
across Canada the percentage probably of a window of
independent works is even lower.
29223 We consider the final choice of the
CRTC to be one of vital interest, not economic but
creative interest, to independents.
29224 MR. SANDMARK: There's some reference
to it in some of the applications where they talk
about, you know, creative control, but the definitions
aren't hard. Right? That's the problem. We are
proposing one, it's in the thing, where the creator
retains control of the work, you know.
29225 Perhaps this definition is going to
be difficult to monitor, I would say, but I would think
that the spirit is there. I think we are seeing it
from some of the applications, so the potential is
there. You know, we are a watchdog organization too.
If you look at percentages of in-house production, if
that becomes a -- like if you can put down a percentage
of independently produced work that they can acquire,
that's something we can really watch and determine.
It's not a problem for us to do that.
29226 As I read here, what we are looking
at is what are the conditions of licence that you could
apply to an independent film channel as a genre because
you are looking at different genres, right, one of each
different genres for the ten Category 1 licences.
29227 I mention here even we are looking at
like how would you preserve the nature of an
independent film channel if it even changes ownership.
What if they sell it? What's the definition? How are
you going to assure this?
29228 I would even argue that independent
film is almost a brand already, even before you
designate it. I remember one comment earlier in the
hearings -- I was watching it on TV -- that it's
considered one of the popular -- potentially popular
program offerings. I agree with that and I think I
agree with some of the surveys that show that there
would be a lot of interest in the independent film
29229 If you give that to someone, what the
consumer, the audience, wants, they say "In an
independent film channel I want independent films".
What do they want? They want, I believe, the spirit
that we are trying to define here, that this is
somebody's creation. This is not just a commercial
product. It's somebody's heart and soul, whatever.
It's their creative thing. That's what they are
wanting to buy. How does the Commission assure that
the channels that you define in that genre live up to
29230 I almost feel like I have a question
for you. Can it be done? Is there something that can
29231 MS ULRICH: I just wanted to add that
within the independent genre, the independent mode of
production, there exists documentaries, there exists
fiction, there exists experimental works and there
exists educational works, social intervention works. I
mean you run the whole gamut of types of works that can
be shown and that do exist and that have -- currently
there are very few windows.
29232 I think Peter's concern is a very
legitimate one. How can we be assured there was all
these new windows opening up? There will be at least
one devoted to 100 per cent Canadian production,
Canadian imagination and Canadian content.
29233 MR. SANDMARK: Point number four, we
recommend that CRTC limits the amount of in-house
productions. I heard the figure of 25 per cent, you
know. It could be 15 per cent or 10 per cent.
29234 We also think that co-productions in
which the owner of the channel is a partner. That
shouldn't be counted as an independent production. I
think that's pretty straightforward.
29235 I also -- I'm trying to run through
my comments. I think I have got 30 seconds left. I
think we dispute the idea that there is not enough
Canadian content for such a channel. Some points were
brought up from some applicants that there wasn't
enough Canadian content. There would have to be, you
know, recycling of old stuff.
29236 We dispute that because there's so
much stuff we know of in the catalogues of the
independent distributors that has never gotten on to
TV. I think that would fit into the, you know, type of
programming an independent channel would put together.
29237 Or you can look at the survey. We
did a sort of very quick informal survey of
distributors. I think that's again perhaps an
underestimation of what's available in some cases.
29238 In fact, even if that was true that
there is not enough work to reach the minimum 50 per
cent that you have proposed for Canadian content, then
why aren't all the independent films and videos that
are being produced getting on? There's a logic that's
lacking there. That's just not the case.
29239 I think that if an independent
channel is certainly going to bring a lot of new
content to the audience that they can say "Well, this
is something different". Every time I see the few odd
works on TV, we mentioned -- I don't know if we
mentioned it, Robert Morin's "Yes, Sir, Madame" -- I'm
struck by how different it looks from regular -- most
29240 MS ULRICH: I would also like to make
a comment that came back to us from the Chief of
Section Officer of Canada Council's Media Arts.
Because the Indie trend is becoming so popular, they
find that they have had to sit down and determine and
really determine what an independent work is because
there are a lot of commercial producers that are trying
to cash in on the independent trend.
29241 They have just produced some research
material which is very interesting. I think that you
must pay particular attention to see who is a true
independent and who is an independent getting on the
band wagon because it's really trendy and it's going to
work and they are going to sell shows and they are
going to sell programming whereas independent work has
a tradition, it has a style, it has a quality.
29242 I would once again mention that
Canada has been one of the first countries in the world
to be quite unique in setting forward and in promoting
and having worldwide recognized independent creators
within film and video.
29243 I implore upon you to research this
very, very carefully.
29244 MR. SANDMARK: So there are a few
other recommendations hidden in our text here that a
channel, an independent film and video channel develop
partnerships with the existing independent film
community. We even suggest they could have filmmakers
on the board. They could certainly reach out --
29245 MR. CUSSONS: Mr. Sandmark, I am
sorry, you were correct about those 30 seconds some
29246 MR. SANDMARK: I was.
29247 Let me just say also then that
No. 11, that so far the proposals we have seen do not
demonstrate enough dedicated program slots for the
purchase of already made independent films. So the
CRTC should demand a commitment from the selected
independent film channel that they create more windows
for the acquisition of independently produced films and
29248 Thank you very much. We are
delighted to be here and we are more than happy to
answer any questions.
29249 Thank you for staying. I want to say
on national TV what a good job you are doing because we
are very impressed by what you have to listen to and
29250 THE CHAIRPERSON: Thank you,
Mr. Sandmark and Ms Ulrich.
29251 MS ULRICH: You are starting again in
less than 10 hours.
29252 THE CHAIRPERSON: Shush.
29253 COMMISSIONER WILLIAMS: And some of
us have to travel to Ontario tonight to sleep.
--- Laughter / Rires
29254 THE CHAIRPERSON: In all fairness,
the convolutions about characterizing an independent
film using American criteria or manner of determining
it was for the purposes of the foreign part,
29255 I understand you think we should have
100 per cent Canadian, but if not then those services
which already are film services and have foreign
content are quite anxious to ensure that the foreign
content that is independent is independent, and that
there is a control over that, which is another story
from what you are speaking of I gather.
29256 Now, tell me, when you say you
represent video makers as well, is that used in a sense
of a term of art or almost the whole range of
29257 MS ULRICH: There are independent
video makers that create the same gamut of work. They
are documentary, they are experimental, they are
fiction. They are educational. They are social
intervention and I must say that the first artist run
video centre, video co-op, was created in Montreal and
was an offshoot of a National Film Board effort which
was called Challenge for Change in the 1970s.
29258 Then, when the Film Board ceased to
fund that, a group of independents took it over and it
became a non-profit organization. So independent video
creation has a very long history and you have the same
type of directors, cineographers, screen writers, as
you do in the film industry.
29259 THE CHAIRPERSON: So it would cover
most programming genres except sports and news?
29260 MS ULRICH: Absolutely. Yes.
29261 THE CHAIRPERSON: And most other
categories could be covered, including children's
programming as well?
29262 MS ULRICH: Absolutely.
29263 THE CHAIRPERSON: What you would like
to see is much more than what has been discussed today.
You would want a 100 per cent Canadian channel?
29264 MS ULRICH: No. I don't know. I
think we would -- Utopia, you know.
29265 THE CHAIRPERSON: Yes. But as high a
Canadian content as possible and your view is that
there is existing works that would fit a definition of
independents and yet be sufficient to create enough
product for a very highly Canadian service?
29266 MS ULRICH: And it's also the fact,
as I said in Montreal when we were doing the
presentation for the arts channels, these works are
already subsidized by governments and they are not seen
in theatres. So we feel that they should be seen --
29267 THE CHAIRPERSON: Where?
29268 MS ULRICH: Somewhere in Canada.
They should be broadcast somewhere in Canada.
29269 THE CHAIRPERSON: Of all the services
you have looked at, of course we have heard 87 of them,
so I am not sure which one, was it Digipix who
addressed something more closer to experimental videos
and is that not closer to independent production? I
think it was Digipix.
29270 MS ULRICH: Yes, and TVA.
29271 I would have to say that our sort of
overall impression of Digipix was that they are like
10 years behind and what they term experimental video
it has been, been there, done that away before.
29272 But there was one proposal that
didn't seem too bad to us, but was incomplete, was the
Alliance. Was that one?
29273 MR. SANDMARK: None of them are
perfect and that's why we are not going to come out and
say which one and we think that there should be
29274 THE CHAIRPERSON: I was just trying
to understand the types of things that would get closer
to your goal, since we are not going to reach Utopia by
29275 MS ULRICH: No.
29276 THE CHAIRPERSON: Maybe November, but
29277 MS ULRICH: Sixty per cent?
29278 MR. SANDMARK: Well, Salter Street
aims for 60 per cent Canadian content and I have got to
admit that they are the only ones who made reference to
the independent film and video community in their
actual application. I only heard about Digipix about a
couple of weeks before the headline when they wanted a
letter of support from us, and we had never heard of
29279 They talk about putting five --
29280 THE CHAIRPERSON: Probably you are
going to bring them into the 21st century.
29281 MR. SANDMARK: Well, if they make it.
29282 They talk about $500,000 over the
seven-year term investment into experimental video
artists. That's like $70,000 a year. I mean the
Canada Council gives out $60,000 grants to individuals.
I mean it's almost a joke -- sorry, but that's why we
make recommendations that there should be a commitment
to working with the community.
29283 There is a lot of groups and centres
out there and there should be more commitment to
windows for acquiring that work, and not such a meagre
29284 THE CHAIRPERSON: Is that something
that your organization has enough time for, to try
to -- I was being facetious because of your comment of
being there, been there, done that, of an attempt to
advertise yourself and the product you know more about
more to broadcasters who may not be in the 21st century
with regard to this particular type of programming?
29285 MS ULRICH: We very often -- that's
the work of independent distributors. Independent
distributors very often will hear the comment "it all
depends on the consumer," except that they decide what
the consumer would like and we have heard that here
today, and that's why we appreciate a lot of the
remarks that you made and the questions that you asked.
29286 So it becomes very difficult because
they function in a function of ratings, and if they
don't get the ratings then they just won't try it.
They won't even try it, but then again if the consumer
has never been exposed to it because they don't see it
anywhere, there has to be a trial period of adjustment.
29287 I know that both on a provincial and
a federal level, as far as our budgets permit us to do,
we do do public relations work and try and do
29288 In Quebec, Télé-Québec has purchased
independent works, Radio-Canada to a lesser degree. I
am sure Madam Bertrand knows Télé-Québec has purchased
independent works and TVA never ever. They have never
purchased independent works.
29289 So, I mean we know them.
29290 If you would like us to do this, what
we could do, since we do know the milieu, is furnish
you with sort of a list, what is independent, what are
the funds being given out, actually, and so on and so
forth, if you think that would help you in your study,
you know, because this is our milieu; we know the
29291 THE CHAIRPERSON: I don't know if
either of you watched "Survivor" --
29292 MS ULRICH: No.
29293 THE CHAIRPERSON: -- especially
towards the end, but I'm sure, like me, you have seen
the newspaper coverage.
29294 MS ULRICH: Yes.
29295 THE CHAIRPERSON: I must say you two,
as "Survivors", have a better sense of humour and a
more civilized approach, even surviving to this late
day, than the one on the "Survivor" program.
--- Laughter / Rires
29296 THE CHAIRPERSON: I don't know if
that's of any interest on your curriculum vitae.
--- Laughter / Rires
29297 THE CHAIRPERSON: But you certainly
have kept your good humour. And we are certainly --
you tried to accommodate us, we were happy to
accommodate you, and we hope you have a good trip back.
29298 MS ULRICH: Okay. Thank you.
29299 MR. SANDMARK: Thank you very much.
29300 THE CHAIRPERSON: I hope you have
some good music in the car, or you can entertain each
other about what you heard today.
--- Laughter / Rires
29301 MS ULRICH: We were just asking
ourselves, "How can we explain this to our member
base?" -- and we haven't found the answer yet.
29302 THE CHAIRPERSON: It's difficult.
29303 Commissioner Williams...?
29304 COMMISSIONER WILLIAMS: Perhaps you
should play the longer, uncut and subtitled version of
this hearing; it would certainly preserve the integrity
of works of CPAC and --
--- Laughter / Rires
29305 CHAIRPERSON OF THE COMMISSION: The
--- Laughter / Rires
29306 MS ULRICH: Thank you very much.
29307 THE CHAIRPERSON: I want to thank you
29308 I certainly want to thank my
colleagues and the staff, as well, to have "survived"
to this hour, and we will be ready to be here at 8:30.
29309 You turn on CPAC tomorrow; we will be
--- Laughter / Rires
29310 MS ULRICH: We are going to sleep
--- Laughter / Rires
29311 THE CHAIRPERSON: Thank you very
much. It was very helpful. Thank you for your
presentation. Have a good trip back.
29312 Nous reprendrons à 8 h 30 demain
29313 So we will back here at 8:30 tomorrow
29314 CHAIRPERSON OF THE COMMISSION: At
nine in English; at 8:30 in French.
--- Laughter / Rires
29315 THE CHAIRPERSON: Bonsoir.
--- Whereupon the hearing adjourned at 2222, to resume
on Thursday, August 31, 2000 at 0830 / L'audience
est ajournée à 2222, pour reprendre le jeudi
31 août 2000 à 0830