ARCHIVÉ -  Transcription - Hull, QC - 2001/04/24

Transcripts

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
Contents.

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
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Transcription

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.

BEFORE / DEVANT:

ALSO PRESENT / AUSSI PRÉSENTS:

Hull, Quebec / Hull (Québec)

--- Upon resuming on Tuesday, April 24, 2001 at 0830 / L'audience reprend le mardi 24 avril 2000 à 0830

8449 THE CHAIRPERSON: Good morning, ladies and gentlemen. Welcome back to our proceeding. We will continue on with the interventions respecting the licence renewal applications for CTV and Global.

8450 Before we start, I would just note for the record that both CTV and Global filed a statement of principles and practices respecting the issue of cross-media ownership between television and newspapers. Global filed a revised memorandum clarifying the local programming with respect to the group licensing application with respect to news and non-news local programming on their individual stations.

8451 With that, Mr. Secretary, the next intervenor.

8452 MR. CUSSONS: Thank you, Mr. Chairman.

8453 Our first intervenor this morning is the Canadian Conference of the Arts, Ms Williams.

8454 MS WILLIAMS: Thank you.

INTERVENTION / INTERVENTION

8455 MS WILLIAMS: Thank you, Mr. Chairman, Commissioners.

8456 Our formal submission to the CRTC is on record entitled "Clear, Significant Unequivocal: Where have all the benefits gone?" The question it asks is whether, loosely put, bigger is better for Canada's broadcast system.

8457 My name is Megan Williams. I am the National Director of the Canadian Conference of the Arts. With me today is Monica Auer, the CCA's consultant for this hearing.

8458 The CCA is a non-profit arts service organization which represents artists, cultural workers, cultural industry organizations as well as Canadians interested in the arts.

8459 Over the last week several references have been made to the magic of television production. We would like to preface our comments with a brief digression, using another kind of magic, a less expensive magic perhaps, the magic of our imaginations.

8460 Picture this: It's April 2, 2008. It's the morning after the night before because yesterday the CRTC celebrated its 40th birthday. Happy birthday, Mr. Chairman and Commissioners.

8461 Having spent the night with wine, friends and song, this morning in the spring of 2008 you face the prospect of yet another television hearing, this one to renew the CTV and Global licences. The question you may be asking is how have these two large broadcasters performed over their last licence period? In other words, has it been good for you?

8462 Based on the applications that CTV and Global made in 2001, by 2008 these companies, representing half or more of Canada's privately owned conventional television system, will not have increased the amount of Canadian content they carry, will have spent $2 billion on Canadian programming and 42.8 billion on non-Canadian programming.

8463 They may have reduced the hours of original local programming to the communities they serve and will have made $1.8 billion in profits after expenses.

8464 Meanwhile, the broadcasting industry may now be even more concentrated. Some local originating television stations may now be rebroadcasters. Thanks to the economies of scale, employment levels in private television may still be declining.

8465 Thirty companies controlled Canada's private television stations 1968, 20 controlled them in 2001 and now there may be even fewer editorial boards overseeing the mass media than there were before.

8466 In brief, the problems you faced in 2001 have simply gotten worse, not better. And, of course, the industry is, as always facing new, dramatic changes in competition, technology or the economy. So you may want to consider taking an entire bottle of aspirin with you on your way to the office.

8467 But, of course, this is just a fantasy. Better still, through the Act, your mandate and legislative authority to impose conditions on the way licences are used, you have a certain amount of influence over how the future will really play out.

8468 The CCA has made a number of recommendations about these applications and this proceeding in our written submission. We stand by these. Moreover, we would like you to go on record in support of the specific recommendations submitted by ACTRA, the CFTPA, the Directors' Guild of Canada, the Independent Film and Video Alliance, the Writers' Guild of Canada and the Independent Film Caucus.

8469 Also for the record, because to our knowledge neither CTV nor Global have filed network applications, we recommend short-term licence renewals for all of the CTV and Global stations, not simply because levels of Canadian content and hours of local programming reflection or both have declined, but also because neither of these MSOs has been able to answer questions about what exactly they plan to be doing seven years down the road.

8470 Despite healthy revenue and profit forecasts, each has simply told you that its early days yet and they don't quite know how the synergies among media interests will play out.

8471 Bigger may well be better. Yet, if even the clear, significant and unequivocal benefits that industry consolidation was supposed to bring to Canada's culture sector, to Canadian programming, to our drama, to children's production and to our local communities are difficult to find, it takes little imagination to consider how some ill-defined and poorly measured synergies will actually work.

8472 We agree that fair and equitable regulation reduces risks and uncertainty for everyone. When the CBC in the early 1990s was unable to forecast even seven years ahead thanks to yet more federal budget reductions, it received short-term licences.

8473 In this case, CTV and Global have the money but haven't shared their plans. They should come back in one or two years when they have a better idea of what they will be doing with the airwaves that Canadians own.

8474 We are also concerned about the new rationale being used to explain CTV and Global's Canadian programming and scheduling decisions. It seems to place the responsibility for the success or failure of these decisions on viewers rather than on those who actually own and control more and more of the stations involved.

8475 Rather than blaming Canadians for a lack of interest in local programs whose budgets have declined or vanished or the drama series carried in fits and starts over the years, we think a more businesslike approach is to invest the money needed to reflect communities to themselves, to develop new talent, to fund more program pilots and to allow independent producers to retain the rights to their programs and to promote and cross-promote more than non-Canadian product.

8476 I will just draw your attention to this chart that we prepared that is in our press release that shows that every day over the months of April and March, there was a quarter page ad in The Citizen advertising Global's programming. Every image except one is for American progressing. You can guess which Canadian program it is.

8477 To be perfectly blunt, we think it odd that in describing their commitment to Canadian programming, neither CTV nor Global has mentioned their even greater commitment to non-Canadian programming.

8478 If they are passionate about Canadian content, they must be head over heels for non-Canadian product since their plan for the next seven years is to use 23 per cent of their total income for Canadian programming and 31 per cent for non-Canadian.

8479 This must change for if not now, when? When will we see more regularly scheduled Canadian drama, performing arts and children's programming? When will consolidation finally pay off for those who don't happen to control a television station?

8480 With respect to the idea of change, we again strongly recommend that the Commission re-examine its policy of destroying licensees' examination files after 15 years. How will we know when things are getting better if the past has been erased?

8481 We also would like to reiterate our recommendation that more useful financial statistics about Canadian television stations and their licensees be made available.

8482 We have appreciated the opportunity to appear before you today, Mr. Chairman and Commissioners. We would have liked to provide you with more specific comments about the individual stations involved, but given the unusually short amount of time available both to asses these applications and to comment on them in person, we have opted for a kinder, briefer approach.

8483 We welcome the opportunity to discuss with you.

8484 Thank you.

8485 THE CHAIRPERSON: Thank you, Ms Williams. I will turn the questioning to Commissioner Grauer.

8486 COMMISSIONER GRAUER: Thank you.

8487 I would like to thank you for your presentation today, but also for your written brief which I must say was very extensive and detailed and obviously the result of a great deal of work. I read it with great interest.

8488 You have made a number of recommendations. If I can put them under the umbrella of monitoring and assessing, both with respect to the Commission's files and the information we make available, both financial information and other information relating to the broadcasters and on the reporting activities on which we are now doing more monitoring reporting.

8489 They are a work-in-progress and I really appreciate your recommendations in this regard. I wonder if you could just elaborate a bit on specifically the kind of information that you would find it helpful to be assessing the areas of concern to you.

8490 MS WILLIAMS: Thank you for your comments on our submission.

8491 It was a great deal of work and we started back in September. I will pass the question over to our consultant, Monica Auer, but I know that if we hadn't been able to start working in September accessing the quantity of files that are in the archives and so on, it would have been impossible for us.

8492 I know that some intervenors who wanted to put in more detailed briefs just had trouble with the volume of material and the type of information that was available through the CRTC Web site, so I will just defer to Monica on this.

8493 MS AUER: Thank you, Commissioner.

8494 Our first concern is the fact obviously that the database which one might want to use to assess how the industry is performing, that's the original source, the original licensing application files, is gone.

8495 To the best of our ability, we were unable to find any other files from before 1978. Anything in terms of the public record between 1968 and 1978 insofar as the CRTC is concerned is going to be difficult to find unless one were to go to the licensees themselves and since there has been a number -- since there has been a substantial amount of change over the years it may be difficult even for the licensees to pull out their files from say 1969.

8496 Perhaps the most important element of information that would be interesting to have perhaps posted on the CRTC's Web site since the broadcast policy monitoring report is already available there. It might be the actual performance statistic with respect to the broadcast day, evening broadcast period prime time for Canadian content and hours of original programming as well as original local programming.

8497 As you all know through your questioning last week, there may be a certain amount of concern that non-news local programming is disappearing. Almost 90 per cent of all programming expenditures for local programming are going to news. That begs the question of how much is left for non-news local programming?

8498 So hours of local programming, hours of Canadian content. We pointed out in our comments with respect to the Commission's notice on which financial information might be placed on the public record, that it is interesting to know what licensees are spending on Canadian programming by program type.

8499 Since the Act speaks to the notion that Canadian content should predominate, it seems difficult to figure out whether Canadian content is predominating if you don't actually have the parallel statistics for non-Canadian programming expenditures.

8500 As we went through the licensee files it became clearer that licensees do have a certain legitimate interest in protecting some elements of their financial reports.

8501 On the other hand, we are curious to know exactly what financial harm a licensee will incur if we happen to know how much they spent on Canadian and non-Canadian programming by program type in 1995.

8502 The Commission was publishing and asking for this data in the 1980s. So some of that information is already available on the public record, and moreover information is also available with respect to actual profitability levels, actual revenues, actual real financials as opposed to just programming expenditures for Canadians by program type.

8503 COMMISSIONER GRAUER: As I said, especially with the broadcast policy monitoring report, as you have mentioned, this move to making more of this information public and making it public in a way that people can understand is, as I say, a work in progress for the Commission.

8504 Can you give me any more recommendations you have there in terms of what an overall information might look like.

8505 MS AUER: A handy-dandy guide perhaps to Canadian content.

8506 We went through and we found the Canadian content statistics for the different stations involved from 1989 on. This took us two pages. Couldn't this kind of thing be posted on the CRTC's Web site? Why wouldn't it be? Why would you have to go to 50 different files some of which perhaps your staff are aware, that are that thick to find these various pages?

8507 COMMISSIONER GRAUER: Ms Auer, as I said earlier, I mean I was really impressed with your --

8508 MS AUER: Yes, I agree.

8509 COMMISSIONER GRAUER: And I was impressed with your submission and this is a work in progress and I think it's really helpful for us to get suggestions from you how we might make it more helpful to intervenors and more helpful to the public.

8510 MS AUER: One-stop shopping.

8511 COMMISSIONER GRAUER: One-stop shopping. Okay.

8512 In terms of the information we might make available and what we might be looking to broadcasters to report on, what would be your view of the timing in how we might assess some of this information with respect to going forward over a number of years, meaning the information that you are looking for that we may make available, or what we do make available already in terms of report. You have concerns about a seven-year licence term, but how would one assess the performance, over a period of what years?

8513 MS AUER: Well, of course, it's not our place to suggest to the Commission how it should regulate.

8514 However, if you hand out a three-year licence and presumably people might want to know from one year to the next how a station is performing with respect to Canadian content levels.

8515 If the Canadian content level in year one goes down to year two and again to year three, perhaps there would be a concern by the end of the licence term that the licensee might be encouraged to do a little bit more for Canadian content.

8516 So I suppose that it depends to a certain extent on the licence term, but given that the Commission collects the information on -- not so much the Commission collecting the information, but that the licensees, for example, frequently write in to ask for a six-month update on how they are doing, I think at least once a year, and certainly by the end of the licence term if intervenors and the public are interested in the information.

8517 COMMISSIONER GRAUER: Perhaps I didn't make myself clear. What I was really getting at was do you think -- certainly we look at information once year, but there are a number of areas in which perhaps looking at a period of two or three years, or however many, might give us a better overall picture of assessing performance.

8518 MS AUER: I'm sorry. I haven't benefitted from my first cup of coffee this morning.

8519 Are you thinking, for example, in terms of something like diversity of information because --

8520 COMMISSIONER GRAUER: I'm saying anything that we might monitor. Some are easy, it's a figure.

8521 MS AUER: Sure.

8522 COMMISSIONER GRAUER: You know, you have a requirement that is, you know, 50 per cent in the evening period, 60 per cent overall for Canadian content. We don't have expenditure requirements. We have hours of peak programming.

8523 Are there other measurements we should be taking and should we assess overall on a number of indices how the licensees are performing?

8524 MS AUER: Well, this may be something that Megan would like to say something about, but I can think of two areas that are perhaps not specifically directed to culture, clear, pure culture per se. The one might be the whole issue of diversity of views.

8525 As you know yourselves, in the 1980s the Commission did an extensive amount of work on social issues such as gender portrayal. At that point it did baseline quantitative content analysis in 1984 and then was able to use those baseline studies to assess progress or changes several years later.

8526 It might be useful to consider with respect to the specific issue of diversity of use and information a similar type of study, a broad-based study that can be used as a baseline because otherwise if you don't know where you are now in terms of diversity it's going to be difficult to assess things ten years down the road. I mean, that's in the Commission's own interest to be able to say, "Look, diversity has actually increased over time thanks to our stringent codes of conduct and conditions of licence or requirements or expectations".

8527 A second bit of information. In the CCA's submission, there is a concern expressed with respect to licence fees, equitable licence fees, and the notion of actually ensuring that independent producers obtain a fair and equitable amount for the work that they are doing.

8528 There has been some discussion that the CCA has taken part in which suggests that to a certain extent independent producers are now being treated as non-employee contract workers. In other words, you end up making virtually nothing on your programming.

8529 Of course, this is something that the CFTPA may likely comment on more extensively in their submission, but unless one actually knows what is being paid -- and I don't think that anybody would want to know the private financial negotiations between parties, but perhaps on an anonymous basis, as the Commission does sometimes with program costs, one could perhaps learn, for example, what is the median licence fee paid for a one-hour documentary or a one-hour drama.

8530 Unless one knows, let's say median as opposed to average figures, then it's difficult to know what is happening in the industry as a whole.

8531 Megan, did you want to say something?

8532 COMMISSIONER GRAUER: That's very helpful and I don't have any more questions, but I just want to tell you how much I appreciate the suggestions and recommendations you have made to us.

8533 Quite genuinely it is a concern of ours to improve our monitoring and reporting information, and it's helpful to hear from people. I mean that very seriously in terms of improving it.

8534 MS AUER: I don't doubt the Commission's interest. I mean, the fact is we are here. You haven't closed the door on intervenors by any means.

8535 I would like to point out -- and I think we pointed this out in our submission with respect to the financials that we are being considered for the public record.

8536 This report is just excellent. It has been very useful to find the information. I would note, however, that a number of the charts don't have any numbers so you are sort of left in the dilemma of saying, "Well, this bar is bigger so they must be doing more", but we don't know how much because there are no numbers, there aren't any descriptive numbers as well or financials or figures of any kind in the text.

8537 So you are left saying, "Well, the blue column is bigger than the white column". It might be a really good idea to put the numbers in so that people actually know as a whole what is happening. Bigger might be better.

8538 COMMISSIONER GRAUER: I think you for that suggestion and maybe there is a better way we can be engaging with the public too in terms of improving these reports we are making.

8539 Thank you.

8540 MS WILLIAMS: I would just like to say one thing before we close this session that the real message that we are dealing here is that Canadian content has not increased over the license period of these two broadcasters and we are interested in seeing more Canadian content.

8541 THE CHAIRPERSON: Thank you, Ms Williams and Ms Auer.

8542 I would just note again with respect to monitoring report that was our first sort of cut at it and we expect to continue to improve over time and we appreciate your comments and those of any others in terms of how best we can do that. Thanks again.

8543 Mr. Secretary.

8544 MR. CUSSONS: Thank you, Mr. Chairman.

8545 I would now like to call upon the Canadian Film and Television Production Association to present its intervention, please.

--- Pause / Pause

8546 MR. CUSSONS: They don't seem to have joined us yet, Mr. Chairman. So that being the case I will call upon the Alliance of Canadian Cinema, Television and Radio Artists, ACTRA, to present its intervention, please.

--- Pause / Pause

8547 MR. CUSSONS: I know Mr. Neil was here just a few minutes ago.

8548 THE CHAIRPERSON: Well, I know that. But they had asked to go third and I presume it is because they were waiting for their whole team to be here.

8549 MR. CUSSONS: Okay. Canadian Motion Pictures Distributors Association, Mr. Frith.

8550 Oh, I think ACTRA just came into the room, Mr. Chairman. So we will hear the Alliance of Canadian Cinema, Television and Radio Artists.

--- Pause / Pause

INTERVENTION / INTERVENTION

8551 MR. BISHOPRIC: Thank you, Mr. Chairman and Commissioners.

8552 I am Thor Bishopric, an actor, director and writer from Montreal. With me is Garry Neil, ACTRA's policy advisor.

8553 For more than 30 years I have worked professionally in Canada's film, television and radio business. That is my full time job. In my spare time I am the nationally elected president of ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists, an organization that represents the interests of professional Canadian artists, the actors, singers, dancers, hosts, voice, stunt and myriad other performers who appear in the recorded media products Canadian watch and listen to on the public airwaves, cable and other distribution systems.

8554 Today, more than 16,000 artists from Victoria to St. John's are proud to be members. Our industry has grown and developed substantially since ACTRA's predecessor was first created in 1942. We were initially around -- we were organized initially around radio and movies. Over the years we have witnessed the emergence of Canadian television. First merely as a conduit to bring in foreign programs and then as something more meaningful for Canadians.

8555 We are an integral component of using the media to tell Canadian stories and provide a Canadian perspective on world events. All of us involved in the television industry, the public and private sectors, producers, broadcasters, regulators and artists have much to be proud of for we have created a Canadian industry.

8556 But ACTRA believes we can and should be doing more. We still can't choose to watch Canadian television programs whenever we want. We still don't have enough Canadian drama that tells Canadian stories on our screens. The CBC recently changed its prime time schedule to be fully Canadian. We applaud this change. We also applaud the creation of a feature film fund that we hope will allow us to produce and distribute more and better Canadian movies.

8557 Now, we are here to discuss with you what part CTV and CanWest Global can and should be doing to further the public objectives they must adhere to as a consequence of their use of public airwaves and benefitting from other public programs for the private profit of their shareholders.

8558 Obviously, I will not review the details of the intervention ACTRA has filed with you. It is available and on the record of these proceedings and we would be delighted to discuss any aspect of it with you, the applicants or anyone else involved in the process. But let me reiterate briefly three of its central points.

8559 One, conventional television continues to be the cornerstone of the system. Canada's largest private broadcasters are profitable and this position will likely continue or get better in the near term. In this environment ACTRA believes the Broadcasting Act requires CTV and Global to improve their performance to produce more Canadian programs, to spend more on them and to schedule them when Canadians are most likely to be watching television.

8560 For this reason we have recommended that you impose a condition of licence obligating each of the licensees to broadcast a minimum level of 50 per cent Canadian content during the peak viewing hours of 7:00 p.m. to 11:00 p.m. commencing in the third year of the licence term. We appreciate this departs from the obligations you imposed in the 1999 TV policy, but believe our proposal is fair, doable, reasonable and required by the Broadcasting Act. To those who believe our proposal to be too onerous we say, if not now, when?

8561 Two, the members of ACTRA are also concerned about declining levels of production of television drama series and about the changing nature of those series. Since your TV policy was introduced, we have seen the apparent replacement of distinctly Canadian drama with long form documentaries and other types of programs, like comedy.

8562 While these are also very important for the Canadian system and for my membership, surely we all recognize the critical importance of having drama series that tell our stories, that are about our myths and legends about Canadians in all walks of life. Stories that transmit to our citizens and global audiences what it is like to live in Canada. Stories that challenge us to think about who we are and what we can become.

8563 In this connection, we look with dismay at the original drama schedule outlined in Global's application where we see only Andromeda, the Outer Limits and the Queen of Swords. Our colleagues in the Writers Guild of Canada tell us that creative impetus does not come from Canadian creators and we know they are not transmitting fundamentally Canadian messages.

8564 To respond to this situation we have previously proposed to you and to the government that it is time to review the CanCon point system. We propose to increase the number of points awarded to performers and to increase the overall -- increase overall the number of points needed to have a program recognized by the CRTC as Canadian for purposes of content regulations.

8565 We also support the proposal of the Directors Guild of Canada that 70 per cent of the priority programming obligation of each licensee should consist of drama. In ACTRA's view, this has become a critical issue that requires urgent and decisive action by you and other public agencies and institutions.

8566 Three, like others at these hearings, we share concerns about the consequences of media integration. BCE owns CTV along with newspapers, production companies and companies heavily involved in the Internet. Global has holdings in all these media as well. This raises important issues of editorial independence and self-dealing. While others are addressing aspects of this problem, we wish to emphasize with you the dimension of the problem that is perhaps most critical, vertical integration between television broadcasters and the internet.

8567 While predictions about the internet are notoriously unreliable, there are now few who doubt that within the coming decade, the integration of the home computer, television set, telephone and sound system as well as all other household equipment will be complete and consumers will be receiving news, information and entertainment through this system.

8568 When programs are transmitted through the computer, as they will be according to your new media decision, they will not be subject to the regulatory obligations you impose on broadcasters. Yet, we have a situation where these same broadcasters will control some of these programming services.

8569 In effect, CTV and Global will be competing against internet broadcasters which they own and control. They will be regulated and their internet children will not be. Other arms of the companies will act as distributors with an ability to give clear preference to their related programming services.

8570 Within the seven year licence term we fully expect to see both of them file applications with you arguing for the removal of remaining conditions of licence and regulatory requirements on account of these unregulated competitors. In our view, this is a recipe for the end of Canadian content.

8571 We urge you to launch a public review of these developments with a view to reconsidering aspects of your new media decision.

8572 Thank you for giving me this chance to outline the views of the 16,000 members of ACTRA. We want to be helpful to you and would be delighted now to answer any questions you may have.

8573 THE CHAIRPERSON: Thank you, Mr. Bishopric.

8574 I take it from having read your submission that there's elements -- we went through the TV policy and the Canadian content criteria just over a year ago and stated our new policy. I assume there's elements of the new policy that ACTRA probably didn't agree with and still doesn't agree with. Would that be your view?

8575 MR. NEIL: In a word, yes, Mr. Chairman. We do note that even since the time that the new television policy was being developed and hearings were held, we had new players in the game, substantially larger players. There have been substantial aggressive steps by some of the players to assume ownership of other media enterprises.

8576 The competition from other sources perhaps has not been as quick in developing as was contemplated at that time.

8577 In that environment we tend to want to look back to the obligations of the Broadcasting Act itself which are very clear and talk about the requirement for programming undertakings to spend on Canadian content according to their ability to do so.

8578 When we look at that requirement and look at the current state of CTV and Global, we conclude that it is appropriate to introduce new regulations at this time. We are looking at two, three years in the future where we say the obligation should be imposed.

8579 Finally, we would note that it doesn't really change the 60-50 obligation for Canadian content except that it redefines the period in which the 50 per cent Canadian content ought to be calculated.

8580 THE CHAIRPERSON: Well, you just referred to expenditures. I mean that was one of the fundamental issues, I guess, that we tried to look at in the new policy, not to focus on expenditures but on, you know, Canadian content and not necessarily the amount of money that would be spent to develop that with the philosophy being that if you have to put on Canadian programming and attract an audience that you will spend the money to do that.

8581 I guess we aren't even into the new policy yet. I was struck by your comment about this issue about, and I forget the precise recommendation here, but you talked about getting the 50 per cent by the third year.

8582 Mr. Bishopric, I take it from your intimate involvement for some time in the creative side of this business you would have a sense of the amount of time it takes to come up with a concept, develop it, produce it, have it acquired, get on the air, this sort of life cycle of a program.

8583 What do you think would be a reasonable time and, I suppose, picking up on some of the issues that Commissioner Grauer raised with the conference, appropriate measures to determine how effective the new policy is being because I mean reasonably we can't measure it yet because it hasn't even started yet. It's not going to start until September.

8584 What would be a reasonable period of time for the Commission to then take and say yes, it seems like the policy is working or not, given your experience with developing programs?

8585 MR. BISHOPRIC: As I have stated, we believe that within three years we should have a view to hitting that 50 per cent threshold. We are strong believers in the power of the CRTC to bring regulatory change and to influence the creative process among broadcasters and producers in Canada.

8586 We believe that by setting a benchmark which these producers can work toward, and the broadcasters, we will see more focus on developing creative properties which meet our objectives of telling Canadian stories, of employing Canadian artists, of producing high quality programs which the whole world wants to see.

8587 THE CHAIRPERSON: So do you think it would probably take -- why did you pick year three?

8588 MR. BISHOPRIC: Well, we recognize that it's a new policy and it's going to be introduced over a period of time. We believe that the bar should be set high and we believe that the industry should be working toward telling more Canadian stories.

8589 The strategy here is to work with the rest of the Canadian industry to bring about these changes in the most -- in the quickest possible timeframe, recognizing that new capacity has to be developed in order to tell these stories effectively.

8590 THE CHAIRPERSON: So do you think that probably by about the fourth year you could look back on three years and have a reasonable sense of whether the policy was working?

8591 MR. BISHOPRIC: Garry?

8592 MR. NEIL: We think so. It's certainly unreasonable to review it after one year. Clearly it requires in our business a couple of years lead time to redirect programming decisions and that kind of thing to develop new concepts, new ideas and get them up and running.

8593 I think the three years is not at all onerous. On the other hand, it gives sufficient time to allow for a review of where we are. We think that the target should be established at this point for three years out which gives lots and lots of time for the broadcasters to reorient their programming schedules.

8594 THE CHAIRPERSON: Now, in the case of drama, you are recommending that we require 70 per cent drama. How did you arrive at that percentage? The reason I'm asking that is because, as I have often said, we are trying to balance a lot of competing interests all the time when we regulate the industry and, of course, in front of us we often see independent documentary producers who want more documentaries and not enough of this particular genre or that genre of television.

8595 Of course, you have a particular interest in drama. How do we approach this from the point of view of developing that, particularly when we struggled in the TV policy with providing an opportunity for flexibility so that broadcasters could differentiate as among themselves in the marketplace in competing for viewers, that they all wouldn't be required to do this much documentary, this much drama and come with that sort of strict regulatory regime.

8596 How did you arrive at the 70 per cent then? Would you apply that across all broadcasters and how does that provide then for the opportunity for comedy and entertainment and documentaries to be there as well?

8597 MR. NEIL: A couple of comments. First of all, you will note in our brief that it's support for a recommendation that was proposed to you by the Directors' Guild of Canada at the 70 per cent level. We didn't develop the figure ourselves, but are rather supporting our colleagues. We believe that it's an appropriate figure, it's a fair figure.

8598 As we all know, drama is the form of programming that is most needed by the system. This has been our challenge for many, many years. It's most needed by the system and the most expensive to produce.

8599 That's why historically in this country we have had to impose regulatory requirements or incentives of one kind or another in order to try to ensure that we can mobilize the resources we need to produce that genre of programming.

8600 I think as your TV policy itself notes, you don't need to regulate the news and sports programming because that's relatively lower cost and there doesn't need to be an incentive or an obligation on the part of broadcasters to produce, but there does need to be with respect to drama simply because of the nature and the costs involved in that programming.

8601 Finally, we note that somehow over the years the Canadian content minimum requirements and the minimum requirements for this and for that are really not that at all. They really aren't minimum requirements at all. They are the actual requirement. It's actually what is achieved by the system.

8602 If it were truly a minimum requirement, then presumably you would have in a competitive environment, presumably you would have some people at the minimum, some people 10 per cent beyond, some people 25 or 30 per cent beyond, but that's not what happens in Canada. That's not what happens in our broadcasting system.

8603 In that environment where the minimums are actually the maximum, where the only way we can get the drama production is by having solid regulatory underpinning to require it, you know, the concept of the minimum becomes rather absurd. That's why we have concluded that we must continue to have regulatory requirements in these areas.

8604 THE CHAIRPERSON: But again, to use a phrase that has been used a lot in this proceeding, it's early days. We still don't have a sense going into the new policy what that balance is going to be. I guess getting back to this three or four years, one would want to take a look at it.

8605 MR. NEIL: In our view, the early signs are not positive in that respect. We saw the end of an awful lot of drama series that were being produced. We don't see the new series in development.

8606 With respect, the early signs we believe are solid indications to us that our fears will be realized.

8607 THE CHAIRPERSON: So I take it you are not comfortable with what you heard from the applicants last week.

8608 MR. NEIL: No.

8609 THE CHAIRPERSON: You talked about the Internet and this notion of -- when you said in your closing comments that competition has not been quick in developing, were you talking about competition from the Internet as competing against over-the-air broadcasters. Is that what you had in mind there?

8610 MR. NEIL: A whole range of competition, but certainly the direct competition from the Internet has not been as quick in emerging as perhaps some thought four or five years ago, but we do think that this is a very, very major point in these hearings that certainly has not been in the forefront because, as I think Mr. Bishopric pointed out in the opening statement, we think that over the next seven years you will in fact see that convergence of the various media in the home entertainment system.

8611 That's why we are really alarmed at the possibility of creating an environment in which the regulated broadcasters will be competing directly with unregulated essentially broadcasters that they themselves own and control.

8612 We are absolutely convinced that over the next seven years you will see the emergence of real programming services on the Internet. Jump-TV and I-crave were perhaps early indications of that process, but certainly over seven years we will see it develop more and more.

8613 We believe that this is the question of vertical integration that really needs to be tackled by this Commission and that too is very, very urgent in our mind.

8614 THE CHAIRPERSON: But I don't understand your concern about that aspect. I know what you said in your presentation, that you are concerned as that competition develops, the applicants and other broadcasters will request a relaxation of their commitments which I guess would beg from your point of view to keep those commitments for a longer period of time indeed.

8615 MR. NEIL: Personally, I don't see how you could sustain the regulatory commitments in a broadcasting system if alongside that broadcasting system you had an unregulated environment in which you don't impose any regulations, any content requirements, any limitations on advertising.

8616 If that competitor is entirely unregulated, then how do you propose to maintain regulation on the broadcasting side? It seems to me that the conclusion I reach from that analysis is that you ought to be regulating the Internet side.

8617 THE CHAIRPERSON: I take your point on that when you say the threats start to grow, your worry is that these people will come forward and ask to be relaxed on their existing commitments. I presume at a minimum you would want to ensure that those commitments continue.

8618 MR. NEIL: As a minimum, yes, but frankly, I don't see how you would be able to continue those in the longer term if our analysis of the likely developments is accurate.

8619 THE CHAIRPERSON: Now, what's your particular concern as it relates to vertical integration here then?

8620 MR. NEIL: The particular concern here, once again just to be as simple as we can be, CTV through its ownership and its cousins and children will be competing with an Internet broadcaster which is entirely free of regulation, has no requirements for any kind of Canadian content, has no limitations on advertising.

8621 You are setting up a situation in which the entity is regulated will be in absolute control of an entity that's competing for the same audience that's entirely unregulated.

8622 The other aspect of it is, of course, the question of particularly with BCE's ownership of Internet portals, what is an Internet portal? Well, an Internet portal is akin to a distributor. While they cannot limit where you can go on the Internet, they can surely give priority to certain things.

8623 When you sign on to your service and you see a first screen or on your second screen, a range of choices, you are more likely to go to those than perhaps to go elsewhere.

8624 So they will also be in a situation as distributors where they will be able to give priority to their own broadcasting programming services on the Internet and once again I point out that those services, the broadcasting element will be unregulated according to your new media decision.

8625 THE CHAIRPERSON: I take your point on that, assuming that that happens. It was not clear to me about the fact that they own them as opposed to other ones competing with them. So I think I understand your concern a little bit better given CTV's approach in particular because that is the one you are referring to independent production and the comments you made with respect to that last week.

8626 Would your concern about preferential treatment in that respect be alleviated in any way?

8627 MR. NEIL: We didn't hear -- I must say I didn't hear what CTV's comments were with respect to independent production, but we have noted in our brief that in our view in the recent past CTV's record has been better with respect to acquisition of product from the independent sector.

8628 Global has been more inclined to use its connection with Fireworks Entertainment.

8629 THE CHAIRPERSON: Okay. Well, I thank you very much, gentlemen. I appreciate your presence here today.

8630 Mr. Secretary.

8631 MR. CUSSONS: Thank you, Mr. Chairman.

8632 We will now hear from the Canadian Film and Television Production Association.

8633 MR. BAKER: I oppose the licence renewal of CHBC and I would like to have my say, please.

8634 THE CHAIRPERSON: Well, we will give you an opportunity to have your say. If you could arrange --

8635 MR. BAKER: You will give me a chance to have my say now, sir?

8636 THE CHAIRPERSON: Well, we have an order of a lot of the people who followed normal procedure.

8637 MR. BAKER: I followed normal procedure, but Mr. Cussons has refused to --

8638 THE CHAIRPERSON: We have a schedule for today. I would ask you to work out an arrangement with Mr. Cussons and we would be pleased to hear you today. If you have hitchhiked for 3,000 miles, you have taken a long time to get here, and I presume you could wait a little bit longer then and hear the other people who we had already scheduled for the day to hear.

8639 MR. BAKER: The only reason I came forward --

8640 THE CHAIRPERSON: We will give you an opportunity.

8641 MR. BAKER:  -- is because there was one person who stated that intervenors were not being obstructed. Of course, Mr. Cussons has obstructed me from speaking to your fine organization and I would appreciate the opportunity.

8642 Mr. Cussons, can we talk outside?

8643 MR. CUSSONS: By all means, sir.

8644 MR. BAKER: Thank you.

--- Pause

8645 THE CHAIRPERSON: Before you step out in the hall, Mr. Cussons, did you --

--- Laughter / Rires

8646 THE CHAIRPERSON: I guess you did call the next --

8647 Good morning, Ms Mcdonald.

INTERVENTION / INTERVENTION

8648 MS McDONALD: Good morning, Mr. Chair, Members of the Commission and Commission staff.

8649 My name is Elizabeth McDonald and I am the President and CEO of the Canadian Film and Television Production Association.

8650 The Association represents the interests of content producers of English-langue television programs, feature films and interactive media products in all regions of Canada.

8651 Before starting our opening remarks, I would like to introduce our panel.

8652 To my immediate right is Stephen Ellis, Chair of the Board of the CFTPA, President of Ellis Entertainment and producer of a large number of award-wining documentaries.

8653 Besides Stephen is Ira Levy, Chair of our Children's Committee. Ira is the President of Breakthrough Films and Television, a producer of drama, documentaries and children's programs including "Little Miracles" and "Dudley the Dragon".

8654 Some of you may remember his introduction of Dudley at the Television Policy Hearing. Unfortunately, Dudley couldn't join us today.

8655 To my left is Guy Mayson, Executive Vice-President of the CFTPA.

8656 Reading the press coverage of this hearing, one would think that the only issue at play is the cross-ownership of newspapers and television stations. We are here today to speak to what we believe is the central issue of this hearing -- the programming plans of Canada's two largest private broadcasters.

8657 We support the renewal of the all of the television station licences before you at this hearing. Our support is based on ensuring that two of our largest broadcast partners play the role in the system that their size and resources permit and their application say that they want to fulfil.

8658 In preparing our intervention and our appearance today, we looked at the changing landscape of the conventional television industry. Two fundamental developments shaped our approach to this hearing. First was the emergence of two private national broadcasters, each with a potential reach of over 95 per cent of English-speaking Canadians.

8659 The second was the Commission's Television Policy which we believe set the baseline or floor for the performance of conventional broadcasters.

8660 The Policy set minimum requirements for any broadcaster with the potential to cover at least 75 per cent of the Canadian audience. We believe that this hearing provides the opportunity to look at the specific circumstances of CTV and CanWest in the context of the policy. We must bear in mind that the conditions and expectations that the CRTC will set for them in this proceeding year will cover the next seven years.

8661 The CFTPA does not oppose growth and consolidation in the broadcasting and production sector. Large companies can bring the resources to bear to create attractive Canadian programming in a very competitive environment. CTV and CanWest can make a real difference in ensuring the availability of the highest quality Canadian programming to all Canadians and their presence in every region of the country makes it easier to bring regional stories to national audiences.

8662 Consolidation does raise two fundamental concerns that must be addressed. One, the promise of consolidation must be met beyond the benefits promised in recent ownership transactions. The incredible privilege that each of these companies has been granted must result in a quantum leap forward in the broadcast of Canadian programming.

8663 Two, we must be sure that consolidation does not mean homogenization. Clear mechanisms are needed to ensure that a wide diversity of sources of programming can reach Canadian audiences.

8664 In our written brief, we made ten recommendations, all of them based on those two fundamental principles.

8665 I would like now to call upon Stephen Ellis to highlight our recommendations.

8666 MR. ELLIS: Today we would like to focus on a number of our recommendations concerning priority programming, children's programming and the relationship between producers and broadcasters.

8667 First, we note that the applicants do not propose any priority programming from categories other than drama, music and variety, performance and entertainment magazines. We believe that the Commission should take them at their word and require that all of their priority programs come from Categories 2b, 7, 8 9 and entertainment magazine programs.

8668 Second, both companies discuss their commitments to distinctively Canadian drama programs such as "Big Sound" and "Blue Murder" on CanWest and the "Associates" and "Canadian Movies" on CTV.

8669 We believe that with their national coverage should come a responsibility of reflecting our country. We therefore recommended that both companies should commit to a minimum amount of Canadian ten-point drama each week.

8670 Third, we don't believe that a six-point drama is the appropriate threshold for these national broadcasters to be credited with a 125 per cent bonus. Any bonus reduces the overall number of priority programs in peak time and we don't believe that the loss of shelf space is warranted for six or seven-point drama.

8671 Therefore, we have asked that CTV and CanWest have access to the 125 per cent credit only for drama programs that reach eight points.

8672 Fourth, given the expressed focus on increasing viewing to Canadian priority programs, we believe that they should be equitably available in peak viewing times throughout the year. Therefore, we suggest that the Commission require compliance with the eight-hour priority requirement in each six-month period.

8673 I would now like to ask Ira Levy to outline our children's programming recommendations.

8674 MR. LEVY: About a quarter of Canadian homes don't choose to subscribe to cable or to satellite, whether for economic or for other reasons. Relying on specialty services to ensure service to children only goes part way to meeting the needs of kids and youth, and relying on public and educational broadcasters is not sufficient to ensure that this need is addressed.

8675 Canada's children's programming is recognized around the world for its creativity, non-violence and pro-social messages. Moreover, government policy supports children's programming as a priority.

8676 Both CTV and CanWest run kids' programs in their schedules. We believe that they should have a place for new quality Canadian programs in this mix.

8677 In the United States, each television station in major markets is required to provide at least three hours per week of non-violent children's programming. Ironically enough, this has created a new market for Canadian producers who produce for all the major U.S. networks who broadcast quality children's programming.

8678 We urge the Commission to find a place for children's programs in the schedules of all of our national broadcasters by requiring a minimum of three hours per week of Canadian children's programming and children's viewing hours, and to give broadcasters an incentive to invest in new programs by restoring the 150 per cent credit for first-run Canadian children's programming.

8679 Stephen.

8680 MR. ELLIS: To ensure creative dynamism in the system, there should be a significant place for independently produced programs in the schedules. Both CanWest and CTV have outlined the success that their Canadian programs have achieved, a success that they share with independent producers.

8681 To continue the momentum in this area, we have recommended that 75 per cent of the priority programming from each broadcaster come from non-affiliated independent producers. This means six hours per week of peak time programming out of the required 28 hours of prime time Canadian programming.

8682 When producers negotiate with large broadcast entities they are often under pressure to include rights beyond the initial licence fee for exhibition. The building of a catalogue and exploitation of downstream rights, including Internet rights, is how we grow our companies.

8683 Producers should not be required to give up rights at less than market value purely because the holder of a broadcasting licence has the clout to insist upon it.

8684 We have undertaken to negotiate Terms of Trade Agreements with a number of broadcasters, including the CBC and Corus, and we are pleased to report that we started negotiations with CTV. We believe that the leadership of national broadcasters like CTV and CanWest can create a precedent for the rest of the industry to move this agenda forward.

8685 Terms of Trade Agreements benefit not only producers but broadcasters as well since they provide a transparent framework for negotiation. We ask the Commission to reinforce its belief in these instruments by enshrining them in your renewal decisions along with an expectation that we all report back to you within a year.

8686 MS McDONALD: Thanks, Stephen.

8687 In conclusion, Mr. Chair, we are here today because CTV and CanWest are significant partners of both individual producers in the marketplace and of our Association, through their support of our Mentorship Program. Without the relationship between producers and these broadcasters, Canadian audiences would not have seen programs like "Cold Squad", "Blessed stranger", "Lucky Girl", "Bob and Margaret", "Blue Murder", "Popular Mechanics for Kids" or "Monster by Mistake".

8688 There has been some speculation recently that we should no longer have Canadian programming expectations of private broadcasters but rather reinforce more publicly minded broadcasters through programming expectations and significant increases in public funding.

8689 With respect, we disagree. While we recognize that private broadcasters must respond to shareholders and pay attention to the demands of the marketplace, the Broadcasting Act rightly calls for "all" broadcasters to contribute to the creation and presentation of Canadian programming. In a multi-channel environment, high-quality Canadian programming must be available across a wide variety of platforms, including the Internet and not restricted just to a few public channels.

8690 Private broadcasters have become increasingly important in attracting Canadian audiences to Canadian drama and comedy programs.

8691 In fact, in 2000 private conventional broadcasters derived almost as many hours of tuning from Canadian drama and comedy in peak viewing periods as the CBC.

8692 CTV now has a national convention reach with stable ownership and the ability to provide a full schedule to all Canadians. With its strong and high performing range of specialties we believe that we can expect great things from this management team. Similarly, CanWest's ability to provide a full schedule to all Canadians and a second one to most of the major English-language markets opens incredible opportunities to Canadian audiences and producers.

8693 It's international reach and its ownership of specialty services also gives it unprecedented opportunity.

8694 Both broadcasters have placed ambitious plans on the file. Our recommendations have been made in this context, to ensure that the promise is fully met and to ensure a place for all content providers and their stories for the next seven years in our broadcasting history.

8695 Thank you for your attention and we would welcome your questions.

8696 THE CHAIRPERSON: Thank you, Ms McDonald, gentlemen.

8697 I will turn the questioning to Commissioner Pennefather.

8698 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

8699 Good morning. I see you did some fast editing as you were reading there. Even with all modern technologies that we have, editorial glitches do pop into the text.

8700 I guess I would like to start with a general discussion which you yourself raise, I think, in some respect on page 3 of your presentation this morning, really focusing our attention on the two main aspects of both your written intervention and your comments here today, and throughout both you certainly are addressing some very major points which I would like to get back to, but also your are raking an approach to the TV Policy which -- today and in your written submission -- are looking at changes to that TV Policy.

8701 Now, in reference to your comments as well and the comments that the Chairman was just -- the exchange which the Chairman was having with ACTRA previous to your presentation, we are in early days of that TV Policy and as you reflect as well, the promises of consolidation must be met. We are in early days.

8702 You have taken an approach however to recommend changes to that policy at this stage. Why have you done so, and in your reflection, have you considered what might be a timing where we would be able to see the results of this TV Policy because it is early days and it would seem to be a position that you have taken which would assess the results rather early in the process.

8703 Have you considered what might be an appropriate timing to asses the results of the TV Policy, in light of the points you have also raised regarding consolidation and the quantum leap forward that one is expecting.

8704 How could we assess that in such a short time frame?

8705 MS McDONALD: I guess I have to take this in parts.

8706 I think the way we viewed the TV policy from 1999 is that it set minimum requirements and quite clearly was open to growth beyond it. The challenge, I think, for all of us is to try to deal with these licence renewals in the seven year context of the Broadcasting Act. So it is that kind of combination.

8707 We felt that given the size of the broadcasters now and the changes that have taken place in the broadcasting environment and the fact that beyond the policy the Commission can actually impose conditions of licence to further reinforce the policy that are appropriate, as we understand it, to each distinct licensee. So these licensees have changed significantly since 1999 in terms of their power within the system. They are now close to reaching 95 per cent of Canadian audiences. That wasn't the case in 1999. We had another broadcaster in the picture. So we took that into consideration.

8708 We also debated the issue about the appropriate length of period of time for renewal. From our perspective, we tried to be reasonable. One of the problems is that if a short-term renewal of three or four years sends a signal to another judge of the broadcasters, which is the market, and that could have an impact on them and their financing arrangements, et cetera. So we were trying to find a way not to be punitive but at the same way to ensure the potential over the next seven years is possible. So we were looking at ways to impose certain conditions that we thought were appropriate to these broadcasters.

8709 Stephen.

8710 MR. ELLIS: Yes. As we understand it, the policy is a general framework for the entire industry and I don't think what we are suggesting is that you go back and make changes to the policy itself. But we are suggesting, in certain areas, that you apply some higher tests when it comes to these specific licensees when you issue them with new broadcasting licences, which we understand is entirely a normal procedure in the Commission's activities.

8711 But with some of our recommendations we are trying to address shifts in the marketplace that we see going on around us. One of them is in the children's programming area where we have seen a rather precipitous drop over the past couple of years in the amount of original Canadian children's programming being commissioned. It's very difficult to say what the cause of that is, whether it is a short-term phenomenon or an indication of problems in the system.

8712 So we are not suggesting that this -- or not trying to suggest that this is a function of the TV policy because as you say it's early days to be assessing what the impact of the policy is on the system. But the fact is there has been a drop and when we look at these two licensees and their capacities and resources to generate programming it seems appropriate that there be in their specific cases the condition that we have proposed.

8713 COMMISSIONER PENNEFATHER: Well, that is a good example and you can understand why I'm trying to get a better handle on how you came about for looking at the children's programming recommendations because the problem I have is that and some other points that you have raised are changes -- recommended changes to the TV policy, some of the specifics, a policy which as the Chairman just noted, attempted to set a framework to support Canadian programming but also to allow a certain degree of flexibility in the interests of the development of viewership, the development of programming along the lines that we are all very familiar with.

8714 It would appear from what you are saying that you have already assessed that there are problems with children's programming. Yet at the same time you say that we are early into the process and we haven't been able -- we won't really understand what the effects of the current environment of the TV policy are.

8715 So I'm just trying to get a better handle on why and on what basis you came forward with, for example, at this stage, between the TV policy and now, you would want to make a recommendation regarding children's programming or any of the other components that you raised on changing the approach we took in the TV policy, an approach which was founded on the idea of greater flexibility?

8716 MS McDONALD: Ira Levy will address the issue on children's programming. I would just like to be clear also on the issue with regard to bonusing.

8717 I think one of the issues there where we raised some concern about the bonusing of six and seven out of ten programming, when we were here, before the television policy review, we made a strong cultural story -- I'm not sure -- we also made the economic story. In terms of our concerns there, it is not only that we believe that distinctly Canadian programming deserves a place, we also believe that there is an economic story, that six and seven out of ten programming actually means less Canadians are working.

8718 So we feel that we must support the writers, directors and Canadians actors. When we get into those lower bonusing, in fact, what we do is take programming that have a more economic viability, are easier to finance and provide jobs for non-Canadians and so that, we have felt, has been a concern. Certainly, Guy can address why that is happening. So we can either go to Guy or Ira if you want to do children's program or continue on this.

8719 COMMISSIONER PENNEFATHER: Well, it wasn't specifically on that although I took an example because Mr. Ellis raised it.

8720 It's really a question I had that -- now you have clarified, you are recommending changes to the TV policy and my thoughts were that it was, in fact, a little early. So if we get to the broader question, it is early in the process of the TV policy and yet you have taken a tact which would recommend changes.

8721 My first question was at what point -- rather than now, at what point would you recommend we might take a look at these and other aspects of the policy down the road? What would be a fair timing in which we could assess the impacts?

8722 If you take the argument that it is a little early in the process, do you have a recommendation or a thought on when it would be more viable, considering the environment and considering the changes ahead and considering the kind of discussion we have had with the applicants over the last week and in their applications. If we look forward, what would be a timing that would be --

8723 MS McDONALD: My understanding of the policy is it is a policy and at this point we are at a licence renewal and the policy sets the framework. But a licence renewal offers the Commission an opportunity to set conditions of licence and those conditions of licence can take from the policy or build beyond the policy.

8724 So we saw this as an obvious time when we had to express our views on these issues, particularly in light of the fact that both the broadcasters have changed significantly since 1999 in terms of the resources available and the stations added, et cetera.

8725 That being said, I guess our understanding is that clearly I believe the Commission could have a policy hearing at any time and that would be one thing. The other -- I heard the exchange the other day, I would also understand that the soonest -- or you could give the broadcasters a short-term licence. But I am not sure -- the problem with a short-term licence is it is punitive and we didn't see any reason to recommend punitive licensing to either of these broadcasters.

8726 So I heard you talk about three or four years and in my experience in the system that has been considered punitive. So we were trying to come up with recommendations that recognized the growth of these broadcasters, the changes in the environment and we felt could sustain them over the next seven years.

8727 COMMISSIONER PENNEFATHER: Okay. I hear you. I think you can see the -- at least the two discussions that we are having at the same time here. As we try to balance out all the issues in front of us and look forward, it is important that one gets a fairer chance to assess as well the impact of what that TV policy is as it grows, as it develops over the course of time.

8728 One of the areas you mentioned, the discussions we had last week and one of the areas we discussed was regional reflection which you include in your recommendations. Certainly both with CTV and Global and with yourselves and other organizations and Canadians across the country, it is very clear that we expect our system, broadcast system to reflect all regions of the country. Certainly that is a basic tenant of the Act and the television policy.

8729 During our discussions over the last week, both CTV and Global indicated their willingness to report annually on their licenses and their licensing activity across the country on the condition that any assessment or measurement be made over a longer period of time, and as such, would accommodate the cyclical nature of programming, the ups and downs of viewership and the realities of scheduling, which you yourselves have reflected on in your submission.

8730 However, at the same time the networks were resistant to making commitments to certain level of quotas and so on in terms of regional production and I believe you make a comment on that as well.

8731 Now, you have proposed requirements, the bonus comment that you made, the combination of hours, a specific amount of hours to dramatic programming and so on. You have also proposed in your paragraph 76 of your written application measuring this activity over a longer period of time. So there we are in terms of what you are saying and what we discussed with the networks over the week in terms of our question regarding this hearing, mechanism which would assure regional reflection.

8732 Do you have any comments on the discussion that we had with the networks, with Global and CTV last week, and could you elaborate on your proposal in paragraph 76 of your written submission?

8733 MR. ELLIS: This is an area where the association is attempting to reflect its membership which in fact is spread right across the country from coast to coast, over 400 member companies, the bulk of them probably -- at least 80 per cent of them not affiliated with broadcasters. It is a challenging area. We recognize that and that is why we didn't quantify our recommendations, and we have heard some of the other intervenors who are regionally based make recommendations as well.

8734 But at the same time you have had an opportunity to canvass the applicants. I can't say that I looked at all of the transcripts but it wasn't entirely clear to us that a picture has emerged of a specific commitment. It is an area where -- the other challenge is that, and this is something that we have found in our -- to draw from our discussions with the CBC in our terms of trade negotiations, we found that there are different standards that are applied as to how you define regional production.

8735 For instance, we discovered that the CBC counts a regional production as one that is produced out of a particular region, whereas Telefilm has a standard by which they measure where the application comes from. So if a Toronto company is producing out of Vancouver, then they would call that  -- they would not call that a regional production.

8736 So it is a very complex area and one where we understand that the purpose of the policy is to give broadcasters the flexibility to promote excellence and to find the right projects to draw audiences to Canadian programming, and that in that context we are all hopeful that there will be regional reflection. It's certainly an area where we are willing to work with the broadcasters to try and find that right mix, but clearly it has been difficult to come up with the magic formula for exactly what the right number of hours per week let's say would be.

8737 One of our suggestions was that that performance should be measured over the entire term of the licence, over the seven years, rather than on a tight sort of weekly or annual basis.

8738 COMMISSIONER PENNEFATHER: I think, if I am correct, that is an approach, at least part of the approach that we were exploring, the balancing act between the end goal, which is that programming is truly reflect of this country, means it is produced in the various parts of this country. The concerns expressed by producers all across the country, individually or through yourselves, but particularly recently by the western producers and in the course of this discussion.

8739 Certainly the idea of sitting down together and working out a way which would monitor that careful balancing act, which you yourselves say is difficult to quantify but at the same time we must find a way to assure that on a going forward basis there is production across the country and that at a minimum we sit down and look at monitoring the licensing of product across the board on a longer period was what, I think, was discussed here.

8740 So if I understand it, you are saying that is an approach which you would agree with and which in essence you were addressing in your paragraph 76, that there would be a working together to look at a way which would monitor and assess the licensing agreements across the country to see how the balance is working out in deference to the flexibility required, in deference to the changes in programming schedules and so on, but that you would agree to participate in such an effort.

8741 MS McDONALD: Yes, indeed, we would and I think in addition to that we would like to add -- we were actually discussing this yesterday in preparing for this hearing.

8742 One of the other environmental issues that needs -- there's other parties at the table and those, particularly the provinces and the provincial agencies, all of who have different programs. For example, in British Columbia they have recognized the need for development. It's not only the tax credit, there is the development dollars there.

8743 I think if we could work together to point out that environment, then with your help and support to ensure that there's regional reflection and regional programming through monitoring and working with the broadcasters and producers, it might also be worthwhile then to bring provincial agencies and government in to see -- I think there's a reason why there has been an increase in indigenous program production in British Columbia.

8744 Part of it was a deliberate strategy on the part of the government, not only to put tax credits in, but to invest in development. That then coupled with broadcasters becoming -- getting to know that environment.

8745 We play a role, you play an important role, the broadcasters are critical, but I think if we can also bring that in the mix it would be very important to help the regional producers take their cases also back to make their environment friendly to broadcasters.

8746 COMMISSIONER PENNEFATHER: Thank you for that.

8747 Getting back to your specific recommendations in priority programming then, I'm having trouble reconciling those recommendations which, for example, put an emphasis on dramatic programming which say that all priority programming must come from categories 2(b), 7, 8 and 9 which would appear, as I think CTV said in their reply, to limit the possibilities for regional programming which don't put an emphasis on regionally produced programming, which is one of the priorities, and which perhaps again put an emphasis on drama, again this question to the possibility of putting as less important documentary and other vehicles which regional producers could have to express -- to bring diversity to our screens.

8748 How do the two jive together with your principle that regional programming -- regional reflection is part and parcel of the responsibility of broadcasters, at the same time seeming to limit what the priority programming should be --

8749 MS McDONALD: My understanding, and this where I get a little bit weak on the numbers so the staff can smile benignly at me as I fall into this, is that this is in the area of game shows, religious programs, spiritual programs, et cetera, and that our investigation of the applications of both broadcasters indicated that they didn't have any plans to do programming in that area.

8750 What we were saying, and it's not just a focus on drama, it is a focus on drama and documentaries and music and variety. It is the kind of programs like game shows, et cetera, and religious programming which don't necessarily tell stories or do the kind of regional reflection we think the Act and what you meant in your policy, but all we were saying is you haven't -- don't appear to have any plans in that area. That's great.

8751 That's supposed to be reinforcing the work you are going to do with independent producers, so if that's what your plans say then require that they -- take them at their word and give it as a requirement and then should help meet the goal.

8752 These programs can certainly be created -- we are not saying there shouldn't be regional programs. What we are saying is that there were certain types of programming that they were allowed the flexibility to do and appear to have no interest in doing.

8753 That was a concern that we had with the television policy, but we are pleased to hear that our broadcasting partners don't intend that programming, so we are just saying let's just make sure that that's where we are in seven years.

8754 MR. ELLIS: Just to clarify as well. Obviously the programming definition is a minimum. It's not to say that, as Elizabeth pointed out, the applicants haven't proposed to do any programming over the term of licence outside these particular categories, but that doesn't prevent them from doing so during the term. It would just mean it wouldn't count towards their priority programming minimum.

8755 COMMISSIONER PENNEFATHER: I think I understand, although I think in the discussion we had during the week in which we were able to discuss not only programming that's seen nationally, but programming produced in the local stations, programming which occasionally in fact grows from a production locally to a national program.

8756 Apart from the drama and the classic drama and documentary, these programs can bring sense of another part of the country situated where they are in another city.

8757 I was curious to know, apart from the fact that you are commenting on what you think are being proposed by the applicants, what your position was on the availability of this kind of programming to develop talent, to bring different points of view to the screen. I wasn't sure where you were heading with that.

8758 On the matter of independent production, in paragraph 98 of your written intervention you recommend that the Commission require that at least 75 per cent of priority programs come from unaffiliated producers. You repeat that today.

8759 What is your reaction to CTV's commitment that a preponderance of priority programs would come from unaffiliated producers?

8760 MR. ELLIS: The preponderance, this was something that came out of the discussions during the hearing or was this in their written --

8761 COMMISSIONER PENNEFATHER: Yes, and it's in the application.

8762 MR. ELLIS: It's in the application.

8763 COMMISSIONER PENNEFATHER: Yes.

8764 MR. ELLIS: I guess we had made a specific numeric, you know, recommendation of 75 per cent and the proposal is a preponderance, meaning presumably anything over 50 per cent.

8765 I think the reason we have set the number in specific terms and at the level that we have takes into account the fact that over the past six months or so there have been a number of Commission decisions which have clearly defined what an affiliated producer is as opposed to an unaffiliated one.

8766 As we understand it, that definition is -- draws an ownership line at the sort of 30 per cent mark, that in fact a producer would still be considered unaffiliated if they were up to 30 per cent owned by a broadcaster that was acquiring programming from them.

8767 That being the case, there's clearly plenty of scope in the system now for producers to be supplying the broadcasters that have a financial interest in them, a significant financial interest, so on a given programming decision where a broadcaster is able to say "Well, shall I acquire something from Producer A in which I have no financial interest or Producer B in which I own 29.9 per cent of the company".

8768 There's clearly a financial benefit to working with the affiliated -- with the producer in which they have an interest but would still be considered unaffiliated. When we say 75 per cent unaffiliated, we are taking into account the fact that that would still include producers in which the broadcaster owned up to 30 per cent of that company.

8769 MS McDONALD: The other issue for us, Commissioner Pennefather, is in the television policy it states that, you know, there were supposed to be safeguards in regard to unaffiliated, accessed by affiliated broadcasters.

8770 It seems to us that the production companies who have been involved in moving towards broadcasting have actually been acquired and those have been reinforced in recent licence decisions to ensure that they don't self-deal.

8771 I think what we are saying in this case, it is as important, you know, in one case one company owns 100 per cent and in another there is I believe a 50 per cent ownership in a production company, plus ownership with many other smaller pieces. Those are obviously important to those production companies so that they become more financially stable, but it's trying to balance out.

8772 To ensure diversity in the system and also I think one of our concerns is we look at the American system and with the end of the SYN/FIN rules we saw the death of many independent producers. Now when you look at television coming from the United States, you will see George Smith in CBS productions or, you know, those combinations or the companies have disappeared altogether.

8773 Without any guarantees that there will be some access for the marketplace, then we could get into a situation which is really to a large degree reduce the number of production entities to about seven. There are some others, but it's a tough ride. They are all part of larger entities that own significant broadcast holdings.

8774 COMMISSIONER PENNEFATHER: I wasn't questioning, Ms McDonald, the rationale behind this whole approach. I was questioning and interested in the 75 per cent and where it came from and your rationale behind that particular number in reference to one other proposal which said preponderance.

8775 I think between yourself and Mr. Ellis I have a sense of why you picked 75 per cent as opposed to if you should have such a percentage.

8776 One other question that's of interest, if I'm correct, that proposal relates to peak time programming. Have you any suggestions or any comments or have you considered unaffiliated producers should also form -- have some form of guaranteed access during the broadcast day. Has that been considered?

8777 MR. ELLIS: We didn't develop a specific position on that. Clearly the focus for these major networks is on the peak viewing periods when the more expensive types of production tend to get aired and the opportunity exists to reach large audiences.

8778 I think without sort of running down the value of prime time periods, one of the trends that has resulted from a consolidation of the system in terms of broadcasting ownership is the disappearance of what one might have called at one time the syndication market in Canada in the same way that in the U.S. there is a syndication market. After a network release, you have sort of local station sales.

8779 That has kind of disappeared in Canada in some respects. My own observation is that the specialty networks have become the breeding ground for new talent in terms of production of new programming. That has obviously been a very successful development.

8780 There is an importance to having a place for emerging producers to hone their craft outside of the glare of prime time, so we think it's important to have the flexibility during the daytime periods to allow for, you know, other models.

8781 COMMISSIONER PENNEFATHER: Thank you for that.

8782 I had a question on the terms of trade agreement, but I see in your comments this morning you are saying that in fact you have begun discussions.

8783 Is there anything further you want to say about where you are at on the terms of trade agreements?

8784 MS McDONALD: On the CTV ones we are just at the beginning both -- I mean they take significant resources. I would say we have -- we are looking forward to concluding them with the CBC. Certainly with Corus they have -- they also became very interested. Then CTV was definitely interested.

8785 We have begun discussions. We have established a team. We will be meeting with them. We are hoping that CanWest will be equally interested. These are amazing instruments that allow for an honest discussion outside the glare of the regulatory light.

8786 From our perspective, make it more transparent, get rid of some of the mess and help us work together on frameworks that then can be applied in the business environment. They work for all parties. Everybody has been enthusiastic.

8787 With CTV, I know Trina was really pushing to get it going. We both had the same resource problems, so we both resolved our resource problems and meetings are taking place. I think we will have something to announce.

8788 People, once they get into it, actually become enthusiastic. They work for the broadcasters too.

8789 COMMISSIONER PENNEFATHER: Well, indeed, everything doesn't have to be done in the glare of the regulators. To be precise then, I was asking about CTV and CanWest. You started with CTV and yet to start with CanWest on the terms of agreement because they do cover certain areas such as the whole issue of licence fees and multi-platforms.

8790 We can be assured and you have put a self-imposed deadline here I think to report back within a year. We can be assured that you are proceeding with those networks.

8791 MR. ELLIS: Well, the short answer is yes. You are quite right. The scope of these agreements will give us an opportunity to flush out a number of standard areas of doing business, but also some of the newer ones that we are all grappling with.

8792 Internet rights in particular is an area where currently our observation is that negotiations take place almost in an atmosphere, a mutual atmosphere of fear about what's going to happen. Broadcasters are nervous and rightfully so given some of the startups that have occurred like icrave.com, short lived as it was.

8793 Broadcasters naturally want to protect their exclusivity and that's an area where rights can be threatened by the Internet which is a global phenomenon at the moment without sort of borders.

8794 Similarly, it's an area where producers and a great number of our members are new media producers. In fact, during the past year we have kind of re-engineered the Association so that we have a particular class of membership for new media producers, we have a new media committee which meets regularly to develop policies to help build a new media sector.

8795 So we are definitely now trying to position ourselves as content producers and that's another element of Terms of Trade that we think it's important to develop on that basis.

8796 COMMISSIONER PENNEFATHER: Thank you.

8797 Those are my questions.

8798 Thank you, Mr. Chairman.

8799 THE CHAIRPERSON: Thank you, Commissioner Pennefather.

8800 Just one footnote on that last discussion in terms of trade. It seems to me the issue for you even with respect to the CBC has been going on for quite some time, from the time we first discussed this, and I gather from your comments it must be at least three years.

8801 MS McDONALD: With the CBC, we have had regular meetings and we are very close to concluding -- as it was for our confreres in the United Kingdom. The Producers' Association there is very big. We don't expect to see such a significant document with the private broadcasters or the specialty broadcasters. It's extremely large and has had a lot of people involved, but we are even hoping to make an announcement at Banff that it's concluded.

8802 That being said, the CBC as a result of beginning those negotiations have now got a special Internet site for independent producers. A lot of it reflects where we separated the weak. I mean, we sat and sort of educated the CBC about the kind of calls and complaints and issues that came forward with such a large corporation. It was almost unintended results of somebody some place would make a deal thinking that's what they were supposed to do and someone in the network would say, "Well, that's not the kind of deals" and it allowed us to have a conversation in a way that didn't put a producer in a situation where they felt threatened.

8803 To a large extent, interestingly enough, just with the Terms of Trade Agreement almost completed and these discussions having taken place, and the existence of Web site, the number of phone calls we are getting have diminished significantly and there was a rise of a certain concern about rights at one point and they appear to have been addressed at the most recent negotiating meeting and they seem now to be settling down again.

8804 So it really is quite interesting. The other part of it is the CBC explaining themselves, and I think they didn't realize how difficult a corporation they are for outsiders. So hopefully, Commissioner Colville, by Banff.

8805 THE CHAIRPERSON: I guess I was just getting at implementing a new framework can take a considerable amount of time.

--- Laughter / Rires

8806 MR. LEVY: I suppose for anything to be good sometimes it takes a little bit of time to happen, but with a number of the issues that we have discussed with the CBC -- and it has been a long process and at times a very painful process from the point of independent producers. However, I think that if the template is there and then there is the willingness of both CTV and CanWest to come to the table to do a Terms of Trade, we can use that template really to expedite a much quicker Terms of Trade Agreement with both CTV and with CanWest.

8807 MS McDONALD: Also it has always been my reflection that the private broadcasters are a little more nimble than the CBC is on these sorts of things. So it may be the unusual circumstance of dealing with the private broadcaster that is making it take longer.

8808 THE CHAIRPERSON: I wasn't meaning to be critical to you or the CBC.

8809 Thank you very much for your presentation.

8810 COMMISSIONER PENNEFATHER: Thank you.

8811 THE CHAIRPERSON: Mr. Secretary.

8812 MR. CUSSONS: Thank you, Mr. Chairman.

8813 Our next intervention will be presented by the Canadian Motion Picture Distributors Association, the Honourable Douglas C. Frith.

--- Pause

8814 MR. CUSSONS: I guess Mr. Frith has not joined us just yet, so that being the case I will call upon the Canadian Independent Film Caucus to present its intervention, please.

--- Pause

8815 THE CHAIRPERSON: Could you turn your microphone on, please?

INTERVENTION / INTERVENTION

8816 MR. WINKLER: Earlier this morning you heard from the fellows who wanted more drama, well here comes the guy who wants more documentary.

8817 Good morning, Mr. Colville and fellow Commissioners.

8818 My name is Don Winkler. I'm a documentary filmmaker and I have been making documentaries both that the National Film Board and in the private sector for some 30 years.

8819 My most recent film was an account of the life and career of the great Canadian contralto Maureen Forrester which was aired last fall on CBC's "Life and Times" and in French on TV5.

8820 I am here today to represent the Canadian Independent Film Caucus. This is the national association of documentary producers, filmmakers and craftspeople which was founded in 1983 and now has over 450 members in chapters from B.C. to Atlantic Canada.

8821 For documentary filmmakers, these can be the best of times and the worst of times.

8822 Digital technology is having an impact on all aspects of documentary production. and in some respects it has never been easier to make a documentary.

8823 We are busier than ever, but not necessarily making a living as filmmakers or making the documentaries we want to make.

8824 Documentaries are the fastest growing genre on television. However, the increase in English-language viewership appears to be going more to American documentaries than our own. While we are not sure why this is so, we are aware of a growing gap between the budgets of foreign and Canadian documentaries.

8825 We seem to be moving to the super low budget one-person program while importing the high budget prestige documentaries.

8826 We are not opposed to any documentary style, but we are concerned that the investigative, in-depth social documentary is being squeezed out by assembly-line series or the pseudo-documentary game shows called, oddly enough, "Reality TV".

8827 What should be done? We would like to supplement the points raised in our brief to you with a couple of modest proposals.

8828 First, we need to be sure that all the major private networks are broadcasting independent documentaries, including some prestige documentaries on important subjects.

8829 Second, we need to ensure that the major private networks are allocating sufficient resources to long-form independent documentary.

8830 Third, we need to fund the kind of research that is needed in a world of global commercialization, concentration of ownership, vertical integration of media conglomerates and accelerating technological changes.

8831 What about this research? First, we want to commend the CRTC for responding to the trend towards concentration of ownership by making more financial information from the licensees available to the public. This new policy is a tremendous step forward and should be expanded. However, groups such as ours which are largely voluntary can be overwhelmed by the sheer volume of data.

8832 We -- the people at the bottom of the media pyramid -- need the resources to examine and analyze this mountain of information so we are not playing last minute catchup on an uneven regulatory playing field with ever larger and more powerful applicants.

8833 Therefore, we ask that the CRTC require licensees to finance independent, arm's length research into all aspects of the Canadian broadcasting system on a regular ongoing basis.

8834 This research could be financed by all licensees through a special fund or an existing funding mechanism. We are not suggesting a specific amount, but it should be more than a total of one million dollars annually.

8835 This would allow universities, NGOs, research institutes, associations and a variety of organizations to improve the quality of their work and make better use of the information which the Commission is now beginning to release.

8836 As we stated in our brief, we also want to commend the CRTC for its decision to include documentary in its categories of prime-time priority programming. We can now see exactly how many documentaries are being broadcast and how much each broadcaster is spending or promising to spend on documentary.

8837 And what do we see? TVA promises to spend zero dollars on long-form documentary over the next seven years. CanWest Global promises to spend $2.2 million per year on documentary or about 0.6 per cent of its average annual program budget.

8838 CTV promises to spend $5.4 million per year or 1.7 per cent of its total program budget on documentary.

8839 Are these promises good enough? What should be the minimum documentary benchmark for the largest private broadcasters?

8840 We would like the CRTC to establish a minimum level of spending on documentary by each of these major broadcasters. We suggest that level should be 1.5 per cent of total program budget.

8841 Why 1.5 per cent? This number represents the percentage of total viewing in person-hours of the documentaries on Canadian stations in both languages. It is also a modest enough proposal.

8842 Applying the 1.5 per cent solution would mean that TVA should increase its documentary budget from zero to over $1.3 million per year. Global should increase its documentary budget by $3.6 million. On the other hand, CTV has surpassed the 1.5 per cent minimum benchmark. This demonstrates that the 1.5 per cent solution is not unrealistic or unattainable.

8843 Therefore, we are requesting a total increase in documentary spending of at least $5 million per year from TVA and Global. We also want to congratulate CTV on taking the lead among the major private networks in funding documentary.

8844 While these broadcasters are allowed to show zero documentary under the 1999 TV policy, they can afford to do better and the public deserves better. After all, radio frequencies are public property and we suggest zero or 0.6 per cent spent on documentaries is not in the public interest.

8845 Thank you very much.

8846 THE CHAIRPERSON: Thank you for your presentation, Mr. Winkler.

8847 I will turn the questioning to Commissioner Pennefather.

8848 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

8849 Hello, Mr. Winkler.

8850 MR. WINKLER: Hello, Commissioner Pennefather.

8851 COMMISSIONER PENNEFATHER: On your presentation this morning -- a couple of questions for clarification -- actually you raised some comments and asked some questions and answered them immediately, so I may just push you a little further on some of the points.

8852 When you say that "documentaries are the fastest growing genre" and "the viewership is going more to American documentaries", you attribute that more to budgets.

8853 Can you expand on this pint a little bit?

8854 MR. WINKLER: Well, what we say is --we want to be clear on this, we don't actually know and these aren't analyses that I have made personally, but this does seem to be the indication.

8855 But certainly one of the factors -- it's clear that our budgets tend to be quite a bit lower than what we are seeing now in the United States. I was talking to a colleague who attends documentary festivals in the United States. He was at the New York Film Festival and he spoke to some of the people, American producers and directors who had films in the festival that were quite impressive, and he would go up and ask them, "It's a very nice film. How much did it cost you to make it?", and he was very, very impressed with the amount of money that they had in order to do the good work they are doing.

8856 I think there is -- again I don't have statistics, but as a working filmmaker one senses this and one sees what is going on around you -- that with the increased number of windows for documentary, it provides people with all sorts of new opportunities, but the money is spread very thin and the budgets tend to be very low and I think this is a concern. I believe that possibly if it were possible to have more money available then it would be possible to do more prestige documentaries of the sort that get a lot of attention and have a great influence in the United States.

8857 It's interesting to note how important the image of documentary has become across the border in the past few years. We all grew up with the knowledge and the awareness that American culture and American mythology was transmitted to the populace through Hollywood. Now we see that public broadcasting documentary series such as those by Ken Burns and so on have had quite an enormous impact in propagating the history and the mythology of that country. We have always done that in our own way, but I believe that just attests to the importance of supporting our documentary in the public interest.

8858 COMMISSIONER PENNEFATHER: Thank you.

8859 I think you are referring as well to a kind of programming that we may be calling documentary but is slipping into the realm of a short form or even reality TV. I think behind your comments is keeping an eye on what documentary is from your point of view and what the expectations are for both the filmmaker and for the audience in terms of what you getting.

8860 MR. WINKLER: Yes.

8861 COMMISSIONER PENNEFATHER: The research you refer to -- and by the way, I should note before I continue that this hearing is addressing CanWest Global and CTV, not TVA. So we will not be discussing that broadcaster.

8862 MR. WINKLER: No, I understand that. It was just to help to put things in context.

8863 COMMISSIONER PENNEFATHER: The research that you mentioned, precisely what would this research address? I wasn't clear on that.

8864 MR. WINKLER: Well, I believe that -- I think other people have made reference to this that you have had a new policy of making available much more data and information and you seem oh, so eager to get feedback from we people out there on how we assess it and how we analyze it, what it really means, what we can actually -- what it implies for the future and how -- what we can do about improving matters.

8865 I think you know better than anyone else how voluminous this research can be and how easy it is to be overwhelmed by that if one does not have the resources to sift through it and analyze it properly.

8866 So this is just food for thought that if you want to carry through and ensure that the feedback that you get on the information you make available is properly analyzed and assessed in terms of its implications for broadcasting and for documentary film making, perhaps some means should be found to provide various NGOs, academic people, organizations such as ours with the resources to properly digest the information.

8867 So we are presenting that now as food for thought. We think it is a logical outgrowth of what you will already be doing and are welcome to discuss the possibilities as time goes on.

8868 COMMISSIONER PENNEFATHER: Thank you for that, and thank you for your proposals.

8869 As Commissioner Grauer said early and Chairman Colville, it is early days but we appreciate your suggestions in terms of information and the analysis of that information.

8870 I have one other question on your proposals regarding documentaries, both in your written comments and today. Obviously with many intervenors and with the applicants we have addressed how our programming -- documentary, drama, variety -- in fact, our TV policy looks to really putting out there many different forms of programming. But it also addresses the point that this programming should reflect the country as a whole, and that in this particular case you are addressing documentaries, those documentaries should really reflect the views, the comments, the opinions, the stories of Canadians from coast to coast to coast.

8871 Have you any comment on the discussions we have been having with CTV and Global regarding ways, approaches to assure, in fact, our television screens are witness to, not just documentaries, but documentaries that reflect the regions of Canada?

8872 MR. WINKLER: I am not personally exactly privy to the nature of the discussions that you had with them. All I can say is that, of course, this is basic. This is extremely important and representing this association of independent filmmakers who are spread all across the country from coast to coast, many of whom, as I have found, a lot of them young filmmakers who are extremely dedicated to exactly the principles you are enunciating and often, at some sacrifice, struggle to carry them forth and speak for their own regions in terms of reflecting them but also in terms of issues of social justice, for instance, that are proper to their particular region reflecting our cultural heritage in different ways, proper to their particular region.

8873 All I can say is that the raw material is there and the people are there with the desire and the will to put these -- all of these factors on our television screens. I just hope that everything possible can be done to have their efforts bear fruit.

8874 COMMISSIONER PENNEFATHER: Thank you. Those are my questions.

8875 Thank you, Mr. Winkler.

8876 Thank you, Mr. Chairman.

8877 MR. WINKLER: Thank you all. It was a pleasure to be here.

8878 THE CHAIRPERSON: Thank you, Mr. Winkler.

8879 We will take our morning break now and reconvene in 20 minutes.

--- Upon recessing 1030 / Suspension à 1030

--- Upon resuming at 1050 / Reprise à 1050

8880 THE CHAIRPERSON: Welcome back to our proceeding, ladies and gentlemen. We will continue now with the interventions, and I will turn it over to Mr. Secretary.

8881 MR. CUSSONS: Thank you, Mr. Chairman.

8882 Our next intervention is by the Canadian Motion Picture Distributors Association, represented by Ms Susan J. Peacock.

8883 THE CHAIRPERSON: Good morning, Ms Peacock.

INTERVENTION / INTERVENTION

8884 MS PEACOCK: My name is Susan Peacock and I'm Vice President of the Canadian Motion Picture Distributors Association. The CMPDA's members are the seven film and television studios often referred to as the Hollywood majors. They are among the largest international producers and distributors of television programming.

8885 The CMPDA does not oppose the applications that the Commission is considering in this hearing. We are concerned, however, about attempts to reduce competition for non-Canadian program rights. In Decision CRTC 2000-221, the Commission prohibited CHEK and CHCH, two CanWest Global stations, from competing with CHUM stations in the same markets for three categories of television programming that are substantial portions of our members repertoires. These three categories are feature films, syndicated weekly series programs and all programs broadcast on the mini nets in the United States.

8886 The decision prohibits CHEK and CHCH from broadcasting any program that falls within these categories even though CHUM stations could not possibly need or want all of those programs. Ironically, CanWest Global has now asked the Commission to allow the importation into Canada of its four foreign signals, which contain a substantial amount of U.S. entertainment programming, including programming of the categories that CanWest cannot license for CHEK and CHCH.

8887 If the Commission allows the addition of these signals to the eligible satellite list, CanWest will have succeeded in an end-around run to the detriment of virtually all Canadian television broadcasters, not just the CHUM stations in B.C. and southern Ontario.

8888 Our members' commercial interest in Decision 2000-221 are obvious. In addition, that decision may be a violation of Canada's obligations under the General Agreement on Tariff and Trades, commonly known as the GATT. The Office of the United States Trade Representative shares our concerns.

8889 Specifically the GATT requires that Canada accord national treatment to these programming types. That is treatment no less favourable than that accorded to like products of national origin. In addition, the GATT disallows any prohibitions or restrictions other than duties, taxes or other charges on any product imported from a contracting party.

8890 Furthermore, the restriction in Decision 2000-221 is arguably a violation of the GATT requirement that Canada provide most favoured nation treatment to products from any member country.

8891 All of these GATT articles could give rise to a trade complaint, not only from the United States but from any other country that is a signatory to the GATT. Therefore we have two requests today.

8892 The first, we ask that you rescind that portion of Decision CRTC 2000-221 which requires CHEK and CHCH to refrain from competing for non-Canadian programming. Second, we ask that you forebear from imposing similar restrictions on other broadcasters.

8893 That concludes my remarks. I would be happy to answer any questions you may have.

8894 THE CHAIRPERSON: Thank you, Ms Peacock. I will turn to Vice-Chair Wylie.

8895 COMMISSIONER WYLIE: Good morning, Ms Peacock.

8896 Ms Peacock, this was a commitment that was offered by Global.

8897 MS PEACOCK: Yes.

8898 COMMISSIONER WYLIE: As a means of responding to CHUM's concern about its ability to fulfil its broadcasting commitments, and, yes, it was endorsed by the Commission and the Commission wanted to ensure that the agreement that had been made would be followed. I'm not so sure if prohibition imposed by the Commission is, in this circumstance, quite correct.

8899 MS PEACOCK: I guess if I were a licensee and the Commission told me that they expected me to behave in a certain way, I would see that as a promise to the Commission, as an expectation of the Commission. I think that absent the language in that decision, Global and CHUM could have renegotiated that deal. I don't think they can do so now and I think that is -- as the Commission is an instrument of the government, I believe that it is, therefore, a government action.

8900 COMMISSIONER WYLIE: You have also mentioned that via the distribution of foreign signals via satellite, that programming would come into Canada anyway?

8901 MS PEACOCK: Programs of that -- in that category and others, of course.

8902 COMMISSIONER WYLIE: Is your concern that CHUM then would intervene against that happening?

8903 MS PEACOCK: I don't know what CHUM has done or is likely to do.

8904 COMMISSIONER WYLIE: Because that should alleviate your concern.

8905 MS PEACOCK: My concern is about the language -- maybe we can agree to call it an expectation -- in Decision 2000-221. My comment about the importation of the four foreign Global signals was an observation that it would be ironic if Global could accomplish in that way, if the Commission would allow Global to accomplish in that way what they have promised not to do in the other context. My objection is to the language in 2000-221.

8906 COMMISSIONER WYLIE: In that circumstance if it is a concern -- if CHUM has the same concern, you would expect them to express it?

8907 MS PEACOCK: I wouldn't be surprised if they expressed it.

8908 COMMISSIONER WYLIE: You would want us to not take it into consideration. To be consistent.

8909 MS PEACOCK: I'm sorry. To not take what?

8910 COMMISSIONER WYLIE: If CHUM were to object to this new importation, which you see as Global doing indirectly what it can't do directly, if CHUM objected to that, you would also, I think you mentioned you wanted us to not react in the same manner to anyone else complaining about the situation.

8911 MS PEACOCK: That request of ours is a request to the Commission to not in these proceedings or in other proceedings --

8912 COMMISSIONER WYLIE: Impede.

8913 MS PEACOCK:  -- to impede the free negotiation of program rights.

8914 COMMISSIONER WYLIE: Thank you. Your position is clear. I don't have any other questions.

8915 Thank you, Mr. Chairman.

8916 THE CHAIRPERSON: Thank you, Commissioner Wylie, and thank you, Ms Peacock.

8917 MS PEACOCK: Thank you.

8918 THE CHAIRPERSON: Mr. Secretary.

8919 MR. CUSSONS: Thank you, Mr. Chairman.

8920 I would now like to call on the Communications & Diversity Network to present its intervention, please.

--- Pause / Pause

8921 MR. CUSSONS: Okay. In that case we will move to the Directors Guild of Canada and we have Mr. Buchanan.

INTERVENTION / INTERVENTION

8922 MR. GOLUBOFF: I will just take a moment here while my associate joins us here.

8923 Mr. Chairman, Commissioners and staff, good morning. Thank you for having us here.

8924 My name is Alan Goluboff and I am President of the Directors' Guild of Canada. With me today are Pamela Brand, our National Executive Director, and Grant Buchanan of McCarthy Tétrault.

8925 We are pleased to appear before you today. We have filed more extensive comments in our written brief, but today we would like to focus on several key issues which relate to these first ever station group licensing proceedings for CTV and Global. The focus of these recommendations is the creation and airing of more Canadian drama.

8926 We were disappointed with the renewal applications. Global and CTV both recently earned CRTC approval in respect of major acquisitions. Both are thus in the early stages of implementing benefits packages. Both have already adhered to the Commission's TV policy of June 1999.

8927 Both are huge successful media conglomerates. Both have recently announced blockbuster deals with print powerhouses. Both have been allowed to bulk up and are now ready to face international challenges.

8928 And, returning to the purpose of this hearing, both would apparently like to get through this hearing without having to do anything more than they have already committed to do in other proceedings.

8929 The applicants appear to be suggesting that you should not make any changes to your TV policy, yet comments for the TV policy were filed in June 1998 with a public hearing in September and October that same year. The TV policy which followed in June 1999 was based on that record.

8930 If seven year licences are granted in this proceeding, they will run until August 2008, assuming no administrative renewals. That is ten years after the public hearing which spawned the television policy.

8931 We do not take seriously the suggestion that your TV policy was meant to remain absolutely unchanged in the name of consistency for a decade. We are also unaware of any regulatory vehicle that could be used to bring these licences back in front of you until five years have gone by, by commencing next September 1.

8932 We are encouraged by your detailed questioning last week regarding possible new conditions of licence regarding a range of issues. Clearly, we share the view that some fine-tuning of your television policy is in order and today we would like to outline five recommendations in order to maximize broadcaster contributions to the Canadian broadcasting system.

8933 These recommendations do not consist of a complete overhaul of TV policy and are not premature. This public hearing is a watershed hearing and of great importance to the future broadcasting.

8934 In our respectful view, the following requirements should be mandatory in respect of Global and CTV.

8935 One, grow the eight hour commitment to eight and a half hours in September 2003 and to nine hours in September 2006.

8936 In CTV's case those would be the base lines against which its 175 hour transfer commitment from the BCE takeover would be measured. When the current eight hour commitment is measured against the five hour requirement in 1995 and 1996 and when seen in light of developments since the fall of 1998 TV policy hearing, this growth of one additional hour over the next licence term seems eminently reasonable, if not too little.

8937 The Commission's public notice initiating the TV policy proceeding stated that the station group licensing approach would:

"-- permit the Commission to ensure that each group made an equitable contribution towards increasing the quality and quantity of Canadian programs."

8938 If you do not raise the bar, how will the quantity be raised? Moreover, the first increase of 30 minutes per week would be in September 2003, more than four years after the TV policy was announced.

8939 Our second point, begin to differentiate between categories of priority programming.

8940 While the Commission opened the door to regional programming and entertainment magazines, the Guild has recommended that a limit of such programs of one hour per week be imposed. We have also recommended that 70 per cent of priority programs should be drama programs, an essential component of the Canadian broadcasting system. In addition, we would not be opposed to a system that included extra incentives for long-form drama.

8941 Three, increase expenditures on Canadian priority programs by 5 per cent per year.

8942 This isn't a question of putting the Commission back into the same old dollar measurement game it was in before. Rather, we are only recommending measures measuring the dollars spent on the all-important priority programs, i.e. eight or nine hours per week, rather than the 76 hours week previously tracked.

8943 Global and CTV are both measuring dollars now to prove incrementality of benefits packages and the Commission has insisted that television licensees keep filing annual returns with Canadian expenditures broken out by genre. The monitoring of expenses will, therefore, not take any flexibility away from the broadcasters.

8944 Further, it would be a simple thing to require a 5 per cent annual increase in priority program expenditures and to ensure that a proper benchmark be set out by a condition of licence. We note that in Global's application it proposes to increase expenditures on Canadian programming by 2 per cent to 5 per cent annually.

8945 Four, ensure that 90 per cent of the drama, music and dance programs featured as priority programs consist of independent productions.

8946 While broadcasters' abilities and ambitions to bring more production in-house have increased, there must remain a diversity of voices and choices in the system. This is particularly important given the heightened level of convergence that is taking place in Canada today.

8947 We understand that both applicants seem to appreciate the need for a threshold. While CTV suggests a preponderance figure, Global agreed to at least 50 per cent with the real number apparently yet to be decided upon. You have our recommendation.

8948 Five, require that Global's promise of $12.7 million on script and concept development be matched by CTV.

8949 This step in the creative process is central to a strong broadcasting system. We are very surprised to hear the suggestion from CTV that because BCE has offered so much script and concept development moneys as a transfer benefit, CTV doesn't have the infrastructure to deal with more.

8950 To allow CTV to stay at the lower level while having BCE's script and concept moneys count as significant benefits is unacceptable. CTV is not shy about seeking regulatory parity with Global when it wants to.

8951 Pamela.

8952 MS BRAND: Thank you.

8953 The Guild has not forgotten that the Commission allowed control of the CTV network to pass to Baton against the strength of big future promises to be unveiled when the CTV network came up for renewal.

8954 We are now at CTV's renewal hearing and, regrettably, a stop-payment has been placed on the large cheque the system was promised. It is our respectful view that the Commission should clearly indicate that it expects a few more commitments from CTV than it chose to put on the table in this station group proceeding and the same is true of Global.

8955 Takeovers are matters that are separate from licence renewals and the acquisitions have already been dealt with in other proceedings. We must avoid the kind of "we already gave at the office" mentality such as that exhibited by CTV with respect to script and concept development.

8956 The remaining question is whether living up to the June 1999 TV policy is all that should be expected of these now mammoth station groups. In our respectful view, the TV policy should be a floor, not a ceiling and it should be adjusted, not overhauled. We have called it fine-tuning.

8957 We note in passing that CanWest seems to feel that the current process is sufficiently broad to allow you to seriously amend, if not jettison, your television advertising policy. Surely then you are free to also tweak your TV policy.

8958 Since your policy was announced, CanWest bought Hollinger, BCE acquired CTV and the Commission has approved of Global's acquisition of the WIC television assets and CTV's acquisition of Netstar.

8959 One of the policy reasons for accepting the increased risks that such concentration and consolidation brings is that these bigger entities can deliver the goods. Moreover, they can use some of the much-vaunted synergies of their acquisitions for the benefit of the Canadian broadcasting system and not just for their shareholders.

8960 If these two huge station groups are not required to do more, will we eventually look back and see eight priority hours a week in prime as the high water mark? Will we look back and think that maybe we ought to have put a few fences up within the priority programs?

8961 Will we look back and wish that we had carved out a defined niche for independent producers? Will we wish that we had provided for parity in script and concept expenditures. We hope not. Rather, we hope this opportunity to deal with these issues is seized upon by the Commission and acted upon in this hearing.

8962 While CTV has encouraged you not to "regulate the magic", we would suggest that the magic would be if either of the applicants emerges from this hearing with nothing other than the requirements of the 1999 TV policy to live up to. That would be magic, at least for them.

8963 Thank you. That concludes our remarks.

8964 THE CHAIRPERSON: Thank you very much, Ms Brand, Mr. Goluboff and Mr. Buchanan. I will turn to Commissioner Grauer.

8965 COMMISSIONER GRAUER: Thank you, Mr. Chair. Welcome.

8966 I read both your submissions with great interest and saw that you had a number of suggestions to make. You know, I guess in listening to you here today, I think sometimes what gets lost in the context of the station group renewal is the fact that we are in fact renewing the licences of individual stations in this proceeding.

8967 That's something that we need to be focused on and in fact how those individual stations in different parts of the country are reflecting the communities and the contribution to the whole is made through that mechanism.

8968 I guess what I would like to first of all with respect to your written submission, and here today you touched on it, but I wonder if you could elaborate on your comments with respect to the independent production sector. I'm speaking here of vertical integration and the recommendation that you have given us.

8969 How did you come to that number and also how you rate the importance of the broadcaster commitment to small and medium size producers of drama and how that can -- where that fits into the overall issues that are front and centre for you.

8970 MR. GOLUBOFF: I will start. The specifics of certainly our position I will let Grant get into.

8971 Independent production is certainly key we think to the broadcast system. It's something that the Guild has spoken to on a number of fronts in this room or before the Commission. Independent production is what allows that diversity of voice from across the country.

8972 Independent producers need access and need the windows that these broadcast giants offer. That's what is certainly important to us. It's important to the Guild, it's important to the industry, it's important certainly to my membership who, as representatives of directors in this country, work for the independent producer.

8973 Directors and film-makers don't work generally for the broadcaster. They work for the independent production community and that's what is key for us and that's why we -- certainly it's an important element of our position. The specifics of it, how we get to certain numbers, I suggest that Grant maybe you could dip into that, please.

8974 MR. BUCHANAN: With respect to the differentiation between small and medium size producers and large producers, the Guild took no position. The Commission has been through that and come up with its rule, the up to 30 per cent rule in terms of ownership. The Guild chose not to differentiate its comments that way.

8975 With respect to how it got to the 90 per cent number, which is the 90 per cent of drama, music and variety, all of this is a bit of an art, not a science. We noticed it was less than the 95 per cent on the BCE-CTV transfer where that started out I think as 80 and the Commission elected to impose a 95 per cent requirement that it be spent with independent producers.

8976 It was lower than that. It was a number which drilled down only into the eight hours, so it wasn't reflective of the whole schedule. It was simply the drama and music and dance portion of the priority program, so it's 90 per cent of a much smaller figure. That was how we came about it. Is that responsive?

8977 COMMISSIONER GRAUER: Yes, that's good. There has been a considerable amount of discussion over the past week and certainly you touch on it in your written submission about the importance of monitoring and the release of information from the Commission and its usefulness to you and other intervenors in assessing the performance of the broadcasting system and our regulations in meeting certain objectives.

8978 If we look at the TV policy, and we have talked a bit about it this morning to the extent that it has barely had a chance to -- it really doesn't -- it just doesn't even come into effect and we are looking at seven-year terms.

8979 I wonder if you could elaborate a bit on what kind of information that you think we should be requiring in terms of reporting and releasing information and monitoring in order to help assess the performance and when you think would be an appropriate time to, you know, do an overall assessment of how the Policy is working?

8980 MR. GOLUBOFF: Well, we have certainly spoken about it, the group of us here and at our office, and I know Grant, you are again better served to speak to this than I.

8981 MR. BUCHANAN: We do indeed have a recommendation for you -- and by the way, we greatly appreciate the information that was ordered divulged in January, I think it was late January, that allowed intervenors to use it in compiling thoughts for this process.

8982 Unfortunately, it is still cut based on the old way of doing it which is Category 7, 8 and 9. So what it shows is in column form, dollars broken out by Category 1 news, Category 2, and so on down the list.

8983 What we would like to see is priority programs broken out. What is being spent on priority programs? That is now your focus and you can appreciate when it's cut that way, it may be Category 7 drama, but we have no idea whether it ran in the 7 to 11 category to know whether it counts as part of the expenditures on programming that you have deemed the most important. So I think it would be a very useful addition.

8984 We know it's all prepared that way. It would have to be prepared in order to fill out the forms the way we have them, and we are saying cut it sideways so that you can also see what is being spent within those shows on the priority programs.

8985 That would be a very useful addition and it probably should start immediately. It's already being costed. There is no reason not for it to start right away. People know what they spend on the programs. They have to because my recollection is they did not want to continue to file annual reports based on revenues, on the assumption that now you are only regulating hours, and the Commission took the view that it was appropriate to continue to monitor the spending even if it wasn't a regulatory requirement, and so since it is all being done, let's just display it in a different way that is useful to you and useful to us since your focus is now those eight hours.

8986 COMMISSIONER GRAUER: And over what period of time should we be assessing this and at what juncture would you --

8987 MR. BUCHANAN: Well, we think it has to be annually starting immediately, and the problem I guess -- and you mentioned in passing that it's early days -- we have been listening to the conversation and we agree with you, it is early days. The question is: What do we do about it? We have a problem now where you are facing a licence renewal of the two biggest groups for seven more years.

8988 It's early days, however seven years from now is late days. It's too late. The horse is out of the barn and our approach had been to suggest that you consider erecting these barriers or start putting fences up now because we cannot see how you can bring them back in front of you in two or three or four years.

8989 Once you have issued your decision, there is no regulatory vehicle that we are aware of that allows you to bring them back.

8990 COMMISSIONER GRAUER: Let me go at this a different way.

8991 Let's set aside for the moment the issue of whether there is or isn't a regulatory vehicle. What is an appropriate time frame in which to make an assessment of performance against the Policy, to measure our own objectives and many of the ones that have been outlined by intervenors against performance? What do you think, given that we want to give -- you know, the new Policy had certain goals and we really felt that by giving the broadcasters the flexibility that the investments would be made.

8992 So what would be an appropriate time to assess whether that Policy is meeting the objectives we stated?

8993 MR. GOLUBOFF: Just one comment from me.

8994 The Television Policy that was designed in 1999 was for an environment that doesn't exist any more in our view. The environment is totally different today and has changed dramatically, as we are all aware, in the last year and may again change in the coming year. So that's number one. We are dealing with a Policy that was designed for an environment that isn't quite the same any more. So we have to, I think and we think, be very careful about that and that is what Grant's point was -- eight years is too late.

8995 Exactly what time frame would be best to put in place to review it, Grant?

8996 MR. BUCHANAN: Probably fall 2003 would make the most sense in the sense that that's five years after we all went to the hearing. It's four years after your Policy. We all agree, it's very early days now. The shows that we are talking about take a while to germinate, we all understand that. 2003 gives enough breathing room. It gives you a meaningful sample. You already were holding up charts showing last year. We have last year, this year, next year and 2003, presumably, and that ought to be a sufficient sample to say it's working or it's not working.

8997 COMMISSIONER GRAUER: You have made comments about the regional programming category and your concerns that in terms of priority program it may direct the broadcasters away from doing drama.

8998 If we accept that that category was introduced to give flexibility to broadcasters to be originating more programming outside the large centres, really to me the objective stated in the Act and in the Policy of achieving more regional reflection and also extending to -- presumably, when I look at your membership it comes from across the country. You have councils from Atlantic Canada to British Columbia.

8999 Is there a way for us to -- are you satisfied that if -- the broadcasters seem to have a commitment to developing drama across the country. Their conscript and concept development money is allocated across the country. They have certainly spoken. They have indicated a willingness to do that. That would satisfy perhaps some of the concerns that have been expressed about that regional programming category.

9000 In other words if we were to see over a period of time that that was manifested, that that would presumably satisfy some of the people who argued for quotas, regional quotas or whatnot. I would just appreciate your views on that aspect.

9001 MR. GOLUBOFF: Again -- and I know that I have said this in the past in other hearings -- what is important to us, and I think what is ultimately important to the public, is they want to have access and the ability to view quality Canadian programming.

9002 Now, wherever that quality Canadian programming comes from, I think to a degree is academic. I understand and we understand that the regions deserve the opportunity and if there is an environment that we can help create where that regional production environment is healthy that's a good thing, providing we are producing quality program because that is what the Canadian public, I believe and the Guild believes, needs and wants. And that's the only way to build a healthy industry over time, is you have to produce programming that people want to watch.

9003 We have had that dilemma and that battle. We fight that battle every day in this country, both on the broadcast side and the theatrical side. How do you produce programming that people want to watch or pay to see?

9004 So it's quality programming that concerns us, wherever it gets made, and we know that quality programming can be made in any part of this country, and there are shows coming from independent production elements across this country.

9005 Certainly, yes, I have a membership across the country and they work in all of the regions, and we all work and we traverse the country back and forth because that is the nature of the work that we do.

9006 So again, just to reiterate, from my standpoint and our standpoint, it's quality programming wherever it comes from. As far as putting limits and quotas onto it, I certainly don't think that is somewhere that we want to go.

9007 Grant, do you have anything --

9008 MR. BUCHANAN: Not unless you want to pursue it.

9009 COMMISSIONER GRAUER: No, I mean, I think that the question really is that I think everybody wants to see quality programming for wherever it's from. I think the flip side of it is the investment has to be made where the talent is to develop that kind of quality programming fundamentally, and that is certainly what -- I mean, it's like you can have a diamond in the ground, but it no one is mining it you are not going to have a diamond.

9010 I just wanted to explore whether that was an issue for you, but it doesn't seem to be.

9011 That's all. Thank you.

9012 THE CHAIRPERSON: I think Vice-Chair Wylie might have a question, but I have one.

9013 Can you explain to me but for the newspaper piece, what has changed since the TV Policy came out or the information that led to the TV Policy that the Commission hadn't indicated in its policy statement that we anticipated happening in any event?

9014 MR. BUCHANAN: But for the newspaper piece, what has happened is they have all come out and become part of much larger entities now.

9015 THE CHAIRPERSON: Didn't the Commission indicate in its TV Policy statement that we expected that to happen?

9016 MR. BUCHANAN: Yes, yes. I'm not sure you were clear on the magnitude. I think at that point we were talking about the companies that got taken over, perhaps acquiring some of them, what we call "Mom and Pop shops" across the country, more in line with the traditional sorts of acquisitions that have been going on to date and I think everything that came out thereafter, starting with AOL/Time Warner, completely surprised all of us and allowed a lot of consideration that none of us anticipated.

9017 The words are there, that's correct. I don't know that any of us anticipated the magnitude and how few players would be left standing and how quickly.

9018 THE CHAIRPERSON: Vice-Chair Wylie.

9019 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

9020 But you have to admit that some of these changes have in fact added resources into the areas that are of interest to you through the benefit.

9021 MR. BUCHANAN: Yes.

9022 COMMISSIONER WYLIE: In fact, there will be more money pumped into the system than there was when we didn't have a TV Policy. So it has not all been negative for your interests.

9023 Now, there are those before us who want us to change the policy -- people speak of early days, seven years is too long -- we should review all this in your recommendation in 2003.

9024 Do you see a difference between the monitoring and reporting on what occurred, and actually the Commission being in a position to do something about it? We have legislation that we have to abide by, and we can test and see if they are working or not, but even if it's not in 2003, short of giving a renewal to 2003, we will have no mechanism, legal mechanism, unless the licensees agree that they are not a good job and offer more.

9025 So my question to you is, is it important that we be in a position at that time to do something or you simply want to monitor to see how badly or how well it's working?

9026 MR. BUCHANAN: Our first position is you do something upfront now. The second position is despite what Elizabeth McDonald was saying I think you could probably find a way to sculpt the decision that made it clear to the markets it was not a punitive measure, but rather because you are five years into your TV policy that it's appropriate to give licences which correspond to a review which you are scheduling in advance or something that says, "This isn't because they have done anything bad, it's because we have no idea of what is going the landscape in a few years and right now is too early, but 2008 is too long".

9027 The next alternative, I guess, is to impose conditions of licence with very low thresholds because what you can do under the Act is amend conditions of licence of your own volition after five years. You can't impose new conditions of licence, you can't invent things that aren't there. You can only amend conditions of licence which already exist after five years, and that's a fairly important distinction. If you elect at this time not to put on a condition of licence in a certain area, you are going to have a lot of trouble, I would think, or you might, in trying to call them back after five years to put on a condition of licence relating to something that was never addressed in the original condition of licence.

9028 That would be five years out and the worst of all would be to do nothing, just to monitor and hope everything turns out okay and in 2008 look back and say, "Boy, maybe we should have put up a few fences. We never anticipated this happening".

9029 COMMISSIONER WYLIE: I'm surprised that one of your options is not, for example, a five-year renewal which would mean that you could have some monitoring in between, but then there would be a hearing in 2005 for a renewal in 2006.

9030 Since the implementation has begun in 2000, then it would be about five years from the implementation.

9031 MR. BUCHANAN: That would be yet another one and I take your counsel on that.

9032 The 2003 option would be five years after we all came before you. It would be four years after the TV Policy was announced, but yes that is indeed the one you suggested, a five-year licence, to 2006. We are here in 2001. That seems a long way out. We were hoping we might have data that you could base a refreshed decision on in 2003 based on several years of implementation, but 2006 would indeed be another window. It's farther out than we would like.

9033 COMMISSIONER WYLIE: And short of -- as far as we are concerned there are still areas, I think, that need to be explored, that we didn't provide for or didn't think of.

9034 The scheduling is something that was brought up which to me, if not properly scheduled, goes against the very premise of the Policy which was to expose Canadian content at high viewing hours as often as possible and not to find ourselves towards the famous "beaver bin" where programming appears to be placed in areas where if it works it works and that's good and if it doesn't, well we will do something else in the same spot next year.

9035 Apart from that which was not addressed in the policy and may need to be addressed, we really have little idea, as the Chairman was pointing out on the table, as to whether this is going to work or not. When I cast my mind back to the TV policy, the CAB, I believe, pressed the point that the measurement would be, are people watching? Is more effort being put into promoting, scheduling, programming and that people do watch.

9036 So it is difficult to say well, it's not going to work. Therefore we must immediately say in three years you have to do this much more, in five years you have to do this much more. So you would see and that gives a bit of a forewarning as well for the applicants, in reply that may be an answer to many of the intervenors and the argument of early days, a balance would be to not have a full renewal and have a full loan, look at what is happening in between.

9037 But to assume or conclude right away that it is not going to work is a little difficult. We don't have much evidence to place that on some -- we will say especially the applicants.

9038 MR. BUCHANAN: We appreciate that and we noticed that as you went through the questioning last week there were a number of areas where you asked detailed questions, would you accept conditions of licence related to cultural diversity, regional, local, described video, closed captioning. I mean there is a long litany of scheduling.

9039 There was a lot of things that you thought maybe we should get their views on whether we should fine tune and we are saying this is our list. Here are the things that are of most interest to us. We hear what you are saying. We heard Mr. Frith on, I think, say that you can bring us back at any time if you are not happy with the performance. We aren't getting next day transcripts so I couldn't check that. I thought that was what I heard. If that was correct, I don't think -- a correct recollection, I don't think that is a correct statement. I think we need to pay a lot of attention to when they would be back in front.

9040 COMMISSIONER WYLIE: When one is pressed with a list of conditions of licence and requirement, it is natural to say, "Oh, well, you have the power to bring us back." The question is what is the mechanism available under the legislated framework to act on what is not -- what may not be working. There is always a value in investigating but it is nice to put yourself in a position where there are also instruments to correct what you may find is not producing what you expected.

9041 Thank you.

9042 Thank you, Mr. Chairman.

9043 THE CHAIRPERSON: Thank you very much. We appreciate your presentation here today.

9044 Mr. Secretary.

9045 MR. CUSSONS: Mr. Chairman, we will now hear the intervention by the Friends of Canadian Broadcasting.

--- Pause / Pause

9046 THE CHAIRPERSON: Good morning, Mr. Morrison, I notice in the official agenda, we have you listed twice here. I don't know where your clone is this morning.

INTERVENTION / INTERVENTION

9047 MR. MORRISON: Mr. Chair, my leader is Professor Noreen Golfman of Memorial University. I will defer to her.

9048 MS GOLFMAN: I'm not sure I can answer the clone question.

9049 Bonjour Monsieur le Président et Conseillers. Merci de nous offrir cette occasion de comparaître aujourd'hui.

9050 Je suis Noreen Golfman, professeure à l'Université Memorial et Présidente du comité de direction des Amis de la radiodiffusion canadienne. Je suis accompagnée de deux autres membres du Comité directeur: Ian Morrison, notre porte-parole et Daryl Duke, de Vancouver, cinéaste et réalisateur de renommé, et aussi fondateur et ancien propriétaire du poste de télévision CKVU à Vancouver. Nous avons aussi avec nous M. Tim Woods.

9051 CTV et Global sont les moutons noirs de la radiodiffusion canadienne. Ils vous ont demandé des chèques en blanc jusqu'en 2008. Comme vous devez vous en douter, nous avons quelques conseils pour vous au sujet de leurs requêtes.

9052 In this short presentation we wish to focus on two issues: cross-media ownership and high-quality Canadian programming in peak viewing periods.

9053 Ian.

9054 MR. MORRISON: Thanks, Noreen.

9055 In the public notice you asked two very pertinent questions:

9056 Is it necessary for steps to be taken to address autonomy and editorial independence between the applicants' broadcast and print media interests? Secondly, if so, what safeguards can be put in place to keep the information gathering functions separate within the various newsrooms, on both the local and the national levels?

9057 What we have witnessed in the past week is a clash between the business interests and the public interest with the CRTC as an "experienced umpire." I'm quoting you, Mr. Chair, in that phrase. The stakes are big. Financial synergies for the cross-media owners and diversity of sources of news and information for Citizen readers and viewers.

9058 If only one journalist is sent to cover an event for print and television, it will not matter to the public how many clear and distinct management structures there may be, or whether the presentation of news remains separate. Diversity of voices will dissipate in communities all across Canada, including Victoria, Vancouver, Calgary, Edmonton, Saskatoon, Regina, Toronto, Ottawa, Montreal, Charlottetown and Halifax.

9059 Our advice, focus on maintaining the independence of news gathering by each of the television licensees before you. The statement of principles and practices, which CTV and CanWest have colluded to present yesterday fails this test.

9060 You have the jurisdiction and responsibility to ensure diversity of voices among licensed broadcasters. In the words of the Broadcasting Act, "The programming provided by the Canadian broadcasting system should be varied and comprehensive" and "provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern."

9061 Friends recommends that you require the applicants to delete clause 1 of their statement of principles and practices and substitute in its place, "We, that is the applicant, undertake to ensure that our television newsrooms will gather information independently from the newsrooms of newspapers in which we have a financial interest."

9062 A code satisfactory to the Commission should be a condition of licence.

9063 As you know, Parliament is taking an interest in this file. The House of Commons Standing Committee on Canadian Heritage is undertaking a ten-year review of the Broadcasting Act, and that Committee's Chair has indicated that media concentration and cross-media ownership are on its agenda.

9064 If you were to stand aside and permit these mega-media companies to amalgamate their print and television news-gathering activities, separating them again at a later date would be no less difficult than unscrambling an egg.

9065 Nous vous recommandons donc d'agir avec précaution en exigeant des conditions de licence pour prévenir la diminution des voix indépendantes, et en accordant la priorité aux communautés où la concentration des médias est la plus forte, en commençant par Vancouver et Victoria.

9066 You should require independent audits, based on a code satisfactory to you, on an annual basis, during the licence term. Any substantive failure detected by these audits should trigger a Commission order, or, at your discretion, a public hearing. Alternatively, you should require both CTV and CanWest Global to return in two years time to face your questions on the status of the independence of their television and print newsrooms. This could be achieved by reducing the terms of their respective group licences to expire on August 31st 2003.

9067 Daryl.

9068 MR. DUKE: Thanks, Ian.

9069 Commissioners, I would like to remind you of a few highlights of the data you recently released on TVA, CTV and Global.

9070 In 1999, 68 per cent of the audience TVA, the French language network, assembled during prime time watched Canadian shows; 12 per cent of CTV's prime time audience watched Canadian shows and only 5 per cent of Global's prime time audience watched Canadian shows. That means 19 out of every 20 viewers Global attracted during prime time in 1999 were watching American TV with Canadian ads, of course.

9071 By comparison, 86 per cent of CBC Television's prime time audience watched Canadian shows.

9072 As they say, money talks. The station group financial data you released in February reveal that Global consistently spent less than 20 per cent of its revenues on Canadian programs. By comparison, TVA spends 30 per cent of its revenues on CanCon and CTV, 33 per cent.

9073 When you released the new television policy almost two years ago, Friends called it a "Trust us" policy. That is because during the 1998 television hearings, you responded to the CAB lobbyist, Michael McCabe, who came before you said, quote:

"Viewing is what really counts. Not just how many hours we have, or how many dollars we spend. These are just proxies for what should be the real goal -- more Canadians watching, being informed by and, most importantly, enjoying Canadian television. That is why we have said increased viewing to Canadian television is our key goal for the system."

9074 CBC Television achieves McCabe's goals. So do all the French language networks. So do all the Canadian specialty channels. Only the private conventional television station groups, which Noreen aptly called the "black sheep" of Canadian broadcasting, fall short. The results have been getting steadily worse in recent years.

9075 As you know, the Broadcasting Act says that "each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming."

9076 That is your compass. The new television policy will pressure CTV and Global to put more back into Canada. At least eight hours of priority Canadian programming are required each week -- in each week's 28 hours of prime time.

9077 We look to you to push Global and CTV to become more Canadian in prime time and to hold their feet to the fire. We also look to you to insist that both licensees air local programming that speaks to the hearts and minds of the communities they are licensed to serve.

9078 When all is said and done, the Commission should stand for the conviction that each of us carries within us the content of a new nation. It is this sense of our own content, which goes increasingly unexpressed in the Americanized, commercial scenarios of Canada's conventional television empires. We have lost our own content.

9079 In a recent issue of "Tikkun," Rabbi Mordechai Gafni wrote, quote:

"We all have sacred stories, with great mysteries within us ... The essential question of living is whether you will be the hero of your story -- or, tragically, a minor character in your own drama."

9080 For Friends, nothing could be more fundamental, or compelling, than to ensure Canadians become once again -- and remain -- the heroes of their own story.

9081 Noreen.

9082 MS GOLFMAN: We have chosen to focus on two issues that for us stand out among all the others. Of course, there are other matters of importance. For example, Global has asked you to cast aside the television policy's limit of 12 minutes of ads each hour to -- I will try to quote this with a straight face -- quote:

"...provide us with the flexibility needed to increase our ability to meet our full revenue potential."

Unquote. They asked this knowing full well that scrapping ad limits would be opposed by almost everyone, including leaders from the advertising industry.

9083 Our sense is that CanWest did this as a diversion. Asking something outrageous so that it could be refused while still giving them what they really want -- a continuing licence to print money by importing ever-more Hollywood programming, wrapping Canadian advertising around it, while squeezing editorial resources and diversity from integrated television and print newsrooms all across Canada.

9084 Let's not forget that the two private national broadcasters arrive at these hearings boasting a 5 per cent and 12 per cent viewership of Canadian programs during prime time.

9085 If you keep in mind the various subsidies provided to fund Canadian content, and the protection we Canadians provide them through simultaneous substitution and Income Tax Act preferential treatment of ads on Canadian versus U.S. stations, it makes you realize why the essential message from you Commissioners to CanWest Global and CTV must be "you can and must do better."

9086 Mr. Chair and Commissioners, you have some decisions to make and we wish you well.

9087 THE CHAIRPERSON: Thank you, Ms Golfman, gentleman.

9088 I didn't appreciate when I made the allusion to cloning we would be talking so much about sheep through the presentation this morning.

9089 I will turn the questioning over to Commissioner Cardozo.

9090 COMMISSIONER CARDOZO: Thanks, Mr. Chair, and welcome Professor Golfman and colleagues.

9091 Thanks for your written submission and the submission today. It is always useful to get your submissions which are always well researched and you have clear and strong positions which really assist us in coming to terms with the issues that we have to deal with at the end of the day.

9092 Let me start with the issue of Canadian programming and Canadian viewing and in your closing statement, Professor Golfman, you talked about the viewing to Canadian programming being at 5 and 12 per cent with Global and CTV respectively.

9093 In your written submission you said "the challenge before the Commission is to craft licence renewal conditions which will improve" the viewing numbers. I appreciate your defining the challenge, but I'm not sure what the solution is.

9094 We can press them to do more Canadian programming. How do you get the viewer in a living room to watch that? What are the things you want us to be looking at most clearly?

9095 MR. MORRISON: Commissioner Cardozo, I will begin to answer and I will call on my colleague, Daryl Duke, to supplement this intervention.

9096 First, we trust your television policy. We came before you and we had a chance to talk about it. Not everything that appeared in it met our criteria, but it is Canada's television policy and we would like to be helpful to you to make it work.

9097 We think the television policy in and of itself addresses some of these concerns. The data that we are looking at preceded the advent of the television policy and we have had interesting conversations this morning, for example, with the Directors' Guild and others concerning measures to evaluate progress towards your goals.

9098 If I could just suggest some specific things that you might keep in mind on the viewing of Canadian content. One is a suggestion that was made in our original submission that magazine shows in order to be priority programming ought to be open to all sources of content and not just self-promotion for the organizations that are running them.

9099 Another thing that you can do, and I am sure you intend to do it but you have asked the question, make very, very sure that all of the WIC and the BCE benefits are incremental to the requirements of the policy. Strict monitoring is required as well. We have noticed occasions, for example, where your staff have identified deficiencies in Global's airing of original regional television news programming in the recent licence period.

9100 It's very, very important that conditions of licence be there so that you have the capacity to track what is going on and that the quantities that have been promised in these applications are in fact supervised in some way.

9101 We are very sympathetic to the ideas of others about increasing the floor for Canadian priority programming in prime time, the Directors' Guild suggestions.

9102 It's also very important that the promotion of Canadian programming be done at a high level. If there were more time, I would take you through the details of our research about the statements that Global made about "Big Sound", but it's there fully, in our submission, promising you directly that it would be on the air at a certain time and then moving it all over the place despite the lecture about the importance of appointment programming.

9103 Daryl.

9104 MR. DUKE: Commissioner Cardozo, it's a subject in which we all could explore for many hours. I find that the usual lowest common denominator of programming that many intervenors decry and all of us, including ourselves, decry, I contrast it with some of the most provocative shows of this winter such as "Survivor" and the "Weakest Link" and "Who Wants to be a Millionaire".

9105 To me those are quite instructive because they were not developed in the huge entertainment mills of Los Angeles where millions upon millions were poured into them. They came from relatively small countries, Holland and Britain and in some cases some of them have come from Germany.

9106 What those had in their beginning were knowledgeable people who put money into development, who stuck with ideas for a long time, who stuck with the hosts of programs like Ann Robinson of "Weakest Link" and who saw that there was an aggregate of talent around these ideas for a sufficient period of time to both pilot them and make them work long before they ever saw the light of day in the United States.

9107 Now, that kind of process and those kind of shows are open to Canada. There is nothing in them that a Canadian broadcaster such as the two applicants that we are considering here right now, there is nothing in those shows that could not be developed by either of those broadcasters. They are all -- all of them are rich, wealthy and full of resources and studios, some studios unused.

9108 A "Weakest Link" or a "Survivor" or "Who Wants to be a Millionaire" could easily have been a product of Canada and I'm only talking about three popular game shows. I'm not talking about the whole panoply of other kinds of production.

9109 So often we give up on ourselves and the broadcasters would have you give up on the Canadian system, saying it is not possible, we have no stars, the French language television has stars but we don't and all this kind of thing. I find that total rubbish and very, very negative because it is open to us to do.

9110 When you think about it, English Canada doesn't even have on the air each evening something as simple and basic as a "Charlie Rose" show which comes from PBS and brings night after night the highest quality, most interesting array of guests and with a man who is engaged, erudite, always curious, sensitive to his guests and produces what has been a long running and popular program.

9111 What are its costs? A set made of black velour and a round table and two chairs, but somebody says -- I mean we don't have anybody like a Charlie Rose. This means somebody has to have the talent to find such a man somewhere and groom him and get him ready and put him on the air.

9112 I find a lot of -- you ask me how can it be done. I think it could start being done by next week if people have the will. It is not an overwhelmingly difficult thing to tackle.

9113 COMMISSIONER CARDOZO: Besides "Charlie Rose", the three shows that you have talked about are game shows. I don't know what your thoughts are, the Friends' thoughts are in terms of the kind of programming, but we certainly had a number of other interventions that game shows be limited to one hour out of eight, for example.

9114 How do we take drama like "The Associates", "Cold Squad", "Blue Murder" and get those to get the kind of ratings that you could get with "Millionaire"?

9115 MR. DUKE: I find it strange in Canada that we always define drama as -- we pick the most expensive form of story telling, that is the form of story telling developed by the Hollywood studio system. There are many other forms of drama that are possible and can lead to very successful and ultimately commercial and popular forms.

9116 How to get two cop shows, "Cold Squad" and "DaVinci's Inquest", good as they are, how to get them means development and means writers and means a long term commitment. It may mean having several things in development and only one works.

9117 COMMISSIONER CARDOZO: From what you have told me, in terms of our role that we can play, some of the advice that you are talking about I suppose is directly to the broadcaster, but in terms of what can the Commission do, what can the regulator do to push viewing numbers, I suppose you are suggesting that we address issues of promotion and scheduling. Is that what you would like us to be addressing?

9118 MR. DUKE: I have heard you, Commissioner, and Commissioner Grauer and all of you on the panel talk about diversity and yet, you know, Canada is a very diverse country and yet these two applicants would often have you -- from what we see on the air, it's a homogeneous country.

9119 Two years ago, for instance, I was present at a fundraising evening for the Chinese charity group in Vancouver called Success. It was very interesting. There were 13,000 people at GM Place, a huge variety show that had been flown in from Hong Kong, top Asian stars who had many CDs out in their name, teenage girls screaming over these stars when they appeared. The place was filled to the rafters.

9120 It was one of the most energetic, energized evenings I have been at in a long time. I was amazed. The next day on television there wasn't one moment of notice to that event.

9121 Drama doesn't just come out of, you know, deciding to do a cop show. Drama comes out of having an attitude about our life and about the background of our life. Drama comes out of a multitude of approaches to human beings and stories. We haven't even begun to look.

9122 I give that evening and success as an example. Probably some of you on the panel, I know I do, watch the Americas Cup Races from New Zealand. They have those marvellous miniaturized cameras and microphones on board. The races become fascinating over a period of a week or two.

9123 I have never seen a Canadian race like that, the Swift Shore Race, which is dangerous and takes place in rip tides and storms. I have never seen a camera on board. I have never seen it made into an event that we should be part of.

9124 All of these, even though I am speaking right now of events or documentary material, often give rise to then the impetus towards drama.

9125 COMMISSIONER CARDOZO: You are saying the quality of program is also an issue or how it reflects society is one of the issues about how you get programming that people will watch.

9126 MR. MORRISON: Commissioner Cardozo, at a macro level, you as a Commission don't have a lot of choice. There's a limit to how much you can intervene in the details of how broadcasters present themselves. The tools that they have that create quality programming include money and scheduling and imagination.

9127 There are some pretty good promises on the table. My summary would be to say try to craft your decision in such a way that none of that stuff can slip off the table.

9128 COMMISSIONER CARDOZO: Okay. Can I ask you what your thoughts are about the scheduling of Canadian programs that have been put forward to us. I don't know if you have seen this particularly, but the top one is Global where there are several shows more or less every night and CTV has most of theirs on Friday and Saturday. As was pointed out earlier, there are three nights on CTV that wouldn't have Canadian programming.

9129 Is that the kind of thing that's important, that we should be concerned about?

9130 MR. MORRISON: The last time I saw that chart, Commissioner, it was in the hands of Vice-Chair Wylie. I think the CTV was sitting over here at that point.

9131 When you, for better or worse, craft a television policy and you say eight hours of prime time priority programming, I guess you leave it in the hands of the broadcasters when they schedule it. To an extent, I guess you decide whether you trust them. You made that decision two years ago to schedule it when they will get the maximum audiences.

9132 Those two charts there reflect a couple of strategies and it would be very interesting -- the proof will be in the numbers when we find out how those strategies are doing. A Monday night viewer is of no more or no less value than a Saturday night viewer and there are arguments about audience share and running programming against the best stuff that the American audiovisual system can throw up.

9133 It's a complicated world and it's hard for many of us to fully understand it. We have to keep focused on the results.

9134 Noreen.

9135 MS GOLFMAN: I would just say there isn't that much red there. I think it's important for, we would believe, the Commissioners to keep a very vigilant eye on the nature of that scheduling because I think the argument that it is always finally the viewer is going to make those determinations about what's important is in some ways a specious one.

9136 As a professor, teacher, educator, writer, researcher, I spent a lot of time with my colleagues arguing this very point, that tension that interests so many of us between whether the system makes the viewer or the viewer makes the system. Obviously it's a relationship.

9137 It's a dynamic which I think your august body has an absolutely vital role in entering, in determining, or helping to determining.

9138 COMMISSIONER CARDOZO: Just before we close off on this topic, Mr. Duke, I wonder if I can get your thoughts -- there has been quite a discussion, as you noted, over the past week on cultural diversity, and one of the things both applicants have offered to do, if we asked, was to file a detailed plan on how they were going to implement diversity issues ranging from news programming, hiring of people, a number of different aspects, and they were prepared to file such a plan within a few months and report annually and also participate in an industry/community-based task force.

9139 Do you think those are the kinds of things that can help us move along that road?

9140 MR. DUKE: I certainly think they can help, and I think that, more importantly, you can help as a Commission. Those things are all out there and it's like the clicks on the geiger counter when you are in a radioactive field. Those kinds of stories are not hard to find. It seems very hard for the broadcasters to find them.

9141 It reminds me of when I worked at the Universal Studios in L.A. for a long time. We did our shows, I sat and worked in a bungalow at Universal Studios and we didn't care about what anybody thought about our shows in Freeport, Louisiana or Ohio. We just wanted to please the network heads and get the show done.

9142 But Canada is a quite different entity and Canada has not a television, to my mind, that can be left to the market system, and it needs affirmative action, and without affirmative action there is no Canada, and without affirmative action, there is no television that reflects that Canada.

9143 So I think to get to that diverse kind programming needs not just such as you were talking about, but it also needs hiring at senior levels at these networks.

9144 If I can tell another short quick anecdote. I was asked an evening to meet an Indonesian author who had been kept ten years in jail by Suharto, had his manuscripts burned, had been unable to travel since 1959, had been in the New York Times, had had a special weekend dedicated to his writing when he finally came to North America at Fortham University.

9145 He came to Vancouver sponsored by over 20 groups and the hall was packed until the fire marshals stopped people from entering. I looked around as his speech was about to begin. There wasn't one camera there. There wasn't one microphone there and the event might as well not have happened. It might as well have happened on an island 10,000 miles away. It was a non-event in Vancouver.

9146 There are too many, when you speak of cultural diversity, there are too many events like that. That was to me really such a outrageous symbol of the blindness that is within this industry and the life that we are leading around us that does not get reflected, and how many people are disenfranchised by the failure to change our programming and have our programming reflect the kind of lives we are leading?

9147 COMMISSIONER CARDOZO: Well, certainly finding the diversity of stories is part of what we had been talking about. So thanks for that.

9148 Let me move on to cross-media ownership, the other favourite topic that you have outlined in your submission.

9149 You noted that the Code -- you suggested that Section 1 or that the Clause 1 of the Code was not to your satisfaction and you suggested another to replace it which deals with news gathering.

9150 First off, do you have a problem with the first clause?

9151 MR. MORRISON: Very briefly, it's somewhat like my coming before you and saying I will evade the law. The broadcasters don't have the option of ignoring clauses in the Broadcasting Act. Quoting them back to you is part of some statement of principles. It might be okay as a preamble. It's not substantive, and we are proposing something in its stead that would address the problem that we believe is fundamental and that your public notice originally raised, which of course is around the maintaining a separate gathering of news between the television licensees and the newspaper newsrooms that the licensees have financial interest in.

9152 COMMISSIONER CARDOZO: Yes, but if they put in one, they would only have six points. This way they get seven.

9153 MR. MORRISON: You are on your own, Commissioner, there.

9154 COMMISSIONER CARDOZO: So news gathering is an important item to you.

9155 The other issues, I guess the key parts of that, the ones I had listed, were 2, 3, 4, 5 and 7, which are separate news management, broadcast news managers will not sit on editorial boards, number 4 is internal complaints mechanism, number 5, the CBSC role, and number 7 is increased public relations for the CBSC and press councils.

9156 Why is the news gathering important to you recognizing the issues they have talked about? For example, if you are covering an accident that takes place outside the city, a traffic accident, does it make a lot of difference to people whether it's one journalist or two, or does it become more important when you have one journalist as opposed to two covering a press conference on a contentious issue? Is there a difference when two is more important than one?

9157 MR. DUKE: Can I just jump in? It may not be the traffic accident or the fire engine that rescues a cat from a tall tree. We are all in favour of that. It's like an event such as we witnessed this last weekend in Quebec, or that the West Coast witnessed with APEC, that you can have enormous differences of policy as to whether those are covered or not, and are covered properly, or covered in advance, and whether the issues and the protesters are given studio time and air time or whether they are only acknowledged when a policy pepper spray goes in your face or some teargas goes in, or whether seriously the issues which are very important to the members of this society get entrée to the cameras and the studios of the broadcaster.

9158 If you just have one source for newspapers and TV, and you just have one judgement, you could seriously maim what the public is going to see about those events.

9159 COMMISSIONER CARDOZO: Let me you challenge you on that. Let's take that particular situation.

9160 Let's take the Globe and Mail and CTV owned by the similar structure. The chances are that the people who head up those organizations, the news directors, may come -- and for the sake of argument let's say they are of relatively the same world view, either they are both pro-FTAA, or they are both really against the fence because of the limitations to free speech it poses.

9161 So let's say they both take a similar viewpoint, one side or the other. Does it really make a difference if you had two or one? They are going to take the same position.

9162 One of the things I found missing in the statement of principles was one of the things we talked about which was right of response programming. What about the people who have no relation to either of these people or may not share that possibly similar view they have? How do they get their voices heard? Right now you have letters to the editor in the newspapers, but as these two bodies, these two media come under one owner, isn't it possible that the views that are different on something like the Summit of the Americas may not be heard, and is it important at least that television have right of response programming, either through debates or people coming on air, you know, mechanisms that are similar that you have in newspapers now whether it's columns or letters to the editor.

9163 MR. DUKE: I was trying to indicate that by saying that we must give them access to studios, and if you have the same judgements running both corporations or both entities, the public who is on neither side might not get a balanced view at all, or it might just be an unbalanced view from one side in both media.

9164 So it's very important that they not be in an interlocking direction given --

9165 MR. MORRISON: And not just a direction. Right from the go, the CanWest document, if I properly recall, talked about separate management structures. That was always there and they are never in contention. What they opposed most strongly, and what we are due to require them to address, is the separation of news gathering, and if I might do so we have not tabled with you research around the level of trust in national newspapers, although such data exists.

9166 We tabled with you a poll about the level of trust and confidence in CTV's and Global's news operations. It's in our brief, it was an appendix.

9167 COMMISSIONER CARDOZO: I didn't want to talk about that simply because the level of trust in defending Canadian culture was higher for the two applicants than for us, so I didn't want to go through that many detail.

9168 MR. MORRISON: A different survey, sir. I'm talking about a survey attached that's a different process, that's around cable ownership of analog specialty channels which I promise not to talk about. I'm talking about something appended on March 23rd, but which the Chairman, I noticed, quotes at length by the way.

9169 But on March 23rd, we appended a brief study about the level of trust in CTV and Global as news organizations and CTV has a much higher level of trust from the public in them as a source of news than Global. The reason I mention that, I happen to know from other publicly available and other information that there is a gap between the National Post and the Globe and Mail and the public's regard as well. The National Post is lower than the Globe and Mail.

9170 So what you have, even though it's a relatively small share of the market, is two highly trusted news organizations that would, in cases at their discretion without your intervention, amalgamate and condense the gathering of news. We see that as a reduction in the diversity of points of view, and that is the diversity factor that you, under the Broadcasting Act, have a mandate to address.

9171 But of greater importance than that -- and I am shifting from your example to another city -- take the City of Vancouver. I could hardly contain myself sitting in the audience when one of the Global so-called experts tried to explain to you that the City of Vancouver had a less concentrated media environment than Francophone Montreal and gave you statistics comparing the outreach of le Journal de Montréal compared with the combined Vancouver Sun/Vancouver Province. Do you remember that? At the same time giving you data about audience share for CHAN in Vancouver compared with the Montreal station that Vidéotron owns, completely neglecting two things.

9172 One, that two-thirds of all the viewing in Vancouver is to American programming anyway, and that what really counts on the news issue is what is on the air and is viewed between 6:00 and 7:00 p.m. when CHAN currently has a 60 per cent audience share. And so that city is the most concentrated news environment right now in the western world. We are not the only ones to draw that to your attention and even with respect to the most mondaine of stories in the City of Vancouver, it is most important that you not allow the applicants to reduce the diversity of points of view that will be expressed by different journalists evaluating gathering, preparing material not just, as CTV likes to say, presenting it separately and not just through management structures that are distinct, but the actual work of the practising journalists.

9173 If we lose that, the number of independent and diverse voices in the City of Vancouver is greatly reduced, and as we pointed out through anecdotes in our brief, this is not theoretical. It's happening right now.

9174 COMMISSIONER CARDOZO: Is it your view that we should look at different markets differently, for example Vancouver differently from say Toronto where the diversity of voices is different?

9175 MR. MORRISON: The consequences of failing to do so are more severe where the concentration is most strong, and clearly in our view the lower mainland of British Columbia is the area where the impact is largest, but we have listed, I will not repeat them, quite a number of other markets, and by no means all the markets, where this issue is real and we think that you should insist upon principles that will ensure diversity in all of those markets.

9176 The consequences of your so insisting will be more beneficial to residents of the lower mainland than anywhere else, but the benefits exist to some degree everywhere.

9177 COMMISSIONER CARDOZO: What are your thoughts about the converged Web site that I think is planned at the end of the day? Will you be able to go to say Bell Globemedia Web site or a CanWest Web site and get on there any or everything that was in a newspaper and on television plus more and the "plus" being all the stuff that fell on a cutting room floor from news footage, original documents, speeches, stuff like that?

9178 I mean, if you think of the Summit of the Americas, you could have had tons of speeches on there, press releases from each of the governments, from each of the organizations protesting, tons and tons of stuff on a Web site that you couldn't possible get into a newspaper or a television station. That is one of the great advantages of consolidation -- I think you would agree -- and how do you balance that off with the kinds of issues you are addressing in terms of restrictions, I suppose?

9179 MR. MORRISON: The Chairman used an image in his speech a couple of weeks ago which we liked, that at the CRTC the metaphor was an "experienced empire". Of course, an experienced empire keeps his or her eye on the ball, and the ball here is the broadcast television and newspaper daily presentation of events. Anything that involves the Internet drops to much smaller audiences and is much less important.

9180 So though we, as citizens, might have some concern about it, it pales by comparison with the issue that we are here addressing, and in any case, under the leadership of some of your colleagues this Commission has decided that for the moment it does not wish to regulate the Internet.

9181 COMMISSIONER CARDOZO: The point I am getting at more is if all this information is available in one site in the medium of the Internet, what have we achieved by the separation of management?

9182 MR. MORRISON: The same difference as that between availability and viewing of programs on television.

9183 COMMISSIONER CARDOZO: But that's going to change over time, isn't -- the Internet?

9184 MR. MORRISON: Maybe, but anyone who knows for sure will be wrong on that subject.

--- Laughter / Rires

9185 MR. MORRISON: Do you remember Will Rogers -- "it's not what he doesn't know that bothers me, it's what he knows for sure that just ain't so". It's that kind of issue. So that is speculative.

9186 What I would urge you to keep at the very front of your mind is the very great importance of the conventional television broadcasts to the formation and information of public opinion in this country and that of major newspapers in each community that we have mentioned and that is just by a factor of a hundred fold more important than anything that the Internet might represent.

9187 COMMISSIONER CARDOZO: Two quick questions then on the cross-media issue.

9188 From what I understand it's really the one paragraph you would like added. The rest is okay with you.

9189 MR. MORRISON: It was the omission which obviously is a significant omission. One of the applicants accused us of bias in our comments. He accused B.C. Film of being snide. They tossed a lot of adjectives around and we thought, "Well we studied their respective codes and our opinion of both of them was the same" and that was that they had a significant omission and that's what we would urge you to focus on. It is not that there is anything wrong in what is there, it is rather that it is insufficient.

9190 I am aware that I cut off a comment from my colleague a moment ago.

9191 MR. DUKE: I just have a very brief one. I guess we face that there are going to be not two markets in a sense, but coming down to one, or not four, but coming down to two.

9192 I always worry about the writers and the editorial opinions and if you are persona non grata in one, you are now going to be persona non grata in the other and that can have a very damaging effect on those who write, who write opinion pieces, who want feature stories, who wish to market things either to television or to print.

9193 If you are down to two markets instead of four, you narrow the field and you have to be very careful about your choice of enemies.

9194 COMMISSIONER CARDOZO: And if you choose to write about those very organizations, that's really your bad luck.

9195 MR. MORRISON: Mr. Duke was not referring to himself, of course.

9196 MR. CARD: The paragraph you suggested is a bit more general than the one in the Quebecor-TVA suggested code in terms of separation. People are talking to each other at separate computer systems and all that kind of stuff, but is it covering the same sort of thing or do you feel this more general approach is the way to go?

9197 MR. MORRISON: We crafted this as a suggestion for your consideration. Nothing less general than that would be satisfactory. You might decide to require something much more specific, but I would say that this effort was intended to be put forward in the spirit of your trusted Television Policy. Perhaps these people will rise to the occasion and do what they say they will do.

9198 Your challenge is to get them to accept a reasonable condition -- well, it's not necessarily a challenge, it is something that you can impose if you choose. So this was our simple lay approach to it.

9199 Something else that might be better would be highly acceptable to us, but we are trying to suggest that this is not an impossible task if there was a will to maintain the separation of news gathering between the television and the print newsrooms.

9200 COMMISSIONER CARDOZO: Thanks.

9201 Let me just ask you a couple of questions about local and regional issues. As I recall, two years ago local programming was one of your if not your top priority and you don't seem to have addressed it much, and you talked about it in passing. Is that because you are satisfied with what is being suggested here which is about 15.5 hours that CTV has suggested locally and Global ranges from something like 10 to 42 but an average of about 23 or 24 hours per station.

9202 Is that range and type of programming satisfactory?

9203 MR. MORRISON: We came before you in 1998 and we tried to put all our emphasis into persuading you that the issue of local and regional coverage in the audiovisual system was a major gap.

9204 We think that you listened to us and others at that time and we think that the Television Policy expresses that and by your courageous behaviour on the CBC licence renewal process, you further demonstrated that.

9205 So number one, we think your focus is good and we decided because of the limits on time and energy that are permitted through your process to focus on what we consider to be the problem areas. If notwithstanding that you wanted a short comment, I would say keep your eye on non-news local programming and keep your eye on peak viewing periods. Those are the major gaps that we are concerned with.

9206 COMMISSIONER CARDOZO: The non-news is an interesting one because in several cases there was a suggestion from the applicants that what they sometimes count as news is really -- some of it is non-news and that is it soft human interest stuff which could well be characterized as non-news.

9207 When you say non-news, is that what you are talking about or you are looking at -- I'm careful to use the word now, Mr. Duke, but drama?

9208 MR. DUKE: I'm looking at it, yes, everything but soft news really because those can be -- we can have soft stories in a news broadcast that are shot by the same techniques and the same quick and easy research and presentation. But I think we are looking at programs that need development and need writing and need research and need extensive shooting and produced for the Canadian audience, a finished and thought out product that demands other responses than that which comes from simply viewing a news broadcast, no matter how soft or how hard.

9209 So there are many, many stories that grow out of different parts of Canada that can easily be translated into a motivation to present a different kind of music or present a documentary on the overseas Chinese or present a special documentary or a special musical presentation at the time of "Carnaval." Things that are not coming out of the American milieu.

9210 Just as the Americans were quite happy to see "Survivor," to get back to my opening example, they were quite happy to see and pick up "Survivor" and we were quite happy to simulcast it in this country. But there are many other sources of program information that are not news that we can take and bring into our orbit that aren't news but are just as fascinating and needed by our audience because we have a global population. We, in a sense, should be a borderless society when it comes to culture and the arts and information, and all of those stories are not news.

9211 COMMISSIONER CARDOZO: Can I ask Professor Golfman and Mr. Duke about regional production, whether you have concerns about -- any suggestions here about -- we had some fairly detailed submissions that we should press for three out of eight hours to be produced in the west, for example. What is your sense of how regional production is seen to come from Newfoundland and British Columbia, and, Mr. Morrison, your views on Toronto are not really necessary on this one.

9212 MS GOLFMAN: I would say that there is a sense of rather uneven practice across the country as there is in almost every other form of cultural expression.

9213 I have been living in Newfoundland for almost 20 years and have seen a remarkable thriving of the television production, creativity, much of what we take for granted, I suppose, in Maritime and Atlantic Canadian culture is starting -- has been certainly in the last five to eight years -- to get into production and circulation. But I know on the ground there is still the kind of thing that Daryl was talking about, a great deal of frustration by writers and producers about how to access private and public funding, how to get their stories told.

9214 The pressure to play into the system is so oppressive, that people are often and do consider leaving and changing careers. It is an old story, but I have witnessed in the last couple of years in particular, enormous pressure in the region and frustration and notwithstanding what appears to be more representation of specific regional content.

9215 So I think there is a paradox here. The 22-minute syndrome, the stars that have been created by virtue of certain kinds of highly popular shows, I think in some ways masks the reality of the pool of talent that is really not getting out there and is squeezed out by a star-making system. It's the writers and producers, in particular, who feel that way.

9216 I'm sure, I couldn't speak on behalf of the independent producers and writers in my region en masse, but I know from living there, I think it is safe to say that -- they would want me to say here today that they want more access, more time, more regulation that allows them to be aired, to have access to that system.

9217 COMMISSIONER CARDOZO: Mr. Duke, do you have anything to add?

9218 MR. DUKE: Well, I guess in a way what Noreen says about Newfoundland is mirrored in British Columbia. From my perspective I see a lot of aspects of -- and producers who come to me, and a lot of aspects of our life that is not being carried into the screen.

9219 I am a great cynic about news. I find news the lowest form of broadcasting. You can hire the most minimum wage people and go out with one camera and really do disservice at times to what a community and what an area of Canada is about.

9220 I see great heroes of Canada dying and their work and honouring their life never takes place. Such as, probably a person we all know, such as Jack Shadbolt, the painter, he should have -- he is a non-news event who should have been honoured with a program detailing his remarkable life and work and opinions. One can go on and on about such events that are not news and not soft news stories either, but things that require poetry and music and thought and going through an intelligent stage to put them on the air. Bill Reid, the Haida carver, when he died, why wasn't he honoured with something.

9221 COMMISSIONER CARDOZO: Oh, but he was. First, CTV ran a two-part series on First Stories.

9222 MR. DUKE: Did they? Well, that was good. But did they do his work?

9223 COMMISSIONER CARDOZO: They did it on his work and on his -- the burial, the whole ritual.

9224 MR. DUKE: I know that cable covered the eleven hours of his memorial service. I was at that but I didn't see anything else. That was my oversight then.

9225 But that is an example of what I mean that we have a lot to do to make the exciting society that we live in exist on the air and get the audiences that it deserves.

9226 COMMISSIONER CARDOZO: Thanks very much.

9227 Mr. Morrison, I didn't mean to cut you off. If there is something you would like to add, please do. That covers my questions. Are there any issues we didn't cover that you would like a last word at?

9228 MR. MORRISON: That is the most generous question I have ever received from the CRTC.

9229 COMMISSIONER CARDOZO: In the next 30 seconds I would like to add.

9230 MR. MORRISON: One of the applicants came forward and proposed a million dollar PSA fund to promote awareness of codes and standards, et cetera. We would like to see a real fund. PSAs are often things that you throw away. You can attach a dollar value to them but you don't write cheques.

9231 We would like to see a real fund, say in the order of a million dollars from each of the applicants, to finance a study, an ongoing evaluation of cross-media diversity. We think that would be an appropriate stepping up to the plate, to use the Chairman's metaphor.

9232 We also, should it ever arise, would be delighted to pursue more strongly with legal advice, responses to any threats to your jurisdiction around imposing on broadcasters' limits, on their flexibility in their newsrooms. We are -- informal advice is that doesn't have a leg to stand on and we would urge you to proceed quite vigorously.

9233 We did -- this morning Commissioner Pennefather turned a comment by one of the applicants into a phrase that I thought was a rather good thing and that was the "glare of regulators." I think we need more glaring by regulators, particularly at this point in this process.

9234 Finally, we did submit behind a piece of data showing and confirming some of the statements of the Canadian Conference of the Arts this morning, the decline in spending in real terms on Canadian programming over the last five years for your data, whereas spending on American programming has increased.

9235 Then finally, some statement about the TV business being "a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs." And it says at the bottom, "There's also a negative side." We can't attribute that. We think it was Hunter S. Thompson, Commissioner Cardozo, but the conclusion we give you is we know for sure that it was St. Luke who said, "To them to whom much has been given, of them much will also be expected." We urge you to keep that in mind in your deliberations on the fate of these applications.

9236 COMMISSIONER CARDOZO: On that Biblical note, I thank you.

9237 Mr. Chair, those are my questions.

9238 THE CHAIRPERSON: Thank you, Commissioner Cardozo. I think Vice-Chair Wylie has a question here too.

9239 COMMISSIONER WYLIE: Yes. We are not going to have yet "Blessed are the Broadcasters."

9240 MR. MORRISON: That might go into the -- did you call it the "beaver bin" earlier?

9241 COMMISSIONER WYLIE: I can't remember.

9242 Your response to Commissioner Cardozo in your most recent comment about the jurisdictional issue is a good springboard to ask you for some more pointed comments or details about your view of these codes.

9243 You have appended to your written intervention a translation of the Quebecor TQS code, which was applied twice, as far as I know, when they first had approval of the transfer of TQS to Quebecor and then it was recently renewed and it has been under scrutiny again, of course, and revised somewhat at the recent hearing into the transfer of TVA to Quebecor.

9244 Do I take it that the paragraph that you have put in your presentation would be sufficient to achieve what you insist this morning and in your written presentation about the need to have what I would call the gathering structure at the bottom of the pyramid restricted and not only as you go up to editorial and management structure. Is it your view that this paragraph would be sufficient and could take the place of the detailed separation at that information gathering level that we see in the Quebecor code?

9245 In other words, if we plugged in this paragraph, would that be sufficient? Since you have also said that we should impose no less restrictions between the respective newspaper and television newsroom than was found in the Quebecor code.

9246 MR. MORRISON: It would appear that the Quebecor code might have been written by lawyers. Would you agree? It's possible. Yes.

9247 COMMISSIONER WYLIE: Not according to Mr. Asper.

9248 MR. MORRISON: I see.

9249 COMMISSIONER WYLIE: Since it is unconstitutional.

9250 MR. MORRISON: Well, that imposes a higher standard on lawyers than the one I am familiar with.

9251 But in essence, what we were proposing to you is something -- I think I would call it a "trust us" version -- I may have said that to Commissioner Cardozo -- a "trust us" version of the essence of the Quebecor instrument and one that might be appropriate to institutions whom you expect to perform as they say they would perform. This would be a minimum, but sufficiently high hurdle for them to cross to meet the public interest concerns which you personally and other members of this panel have expressed in your questioning of the applicants.

9252 So we are putting it forward as a suggestion and no doubt you could improve upon it but we think that it might be possible to find appropriate wording in a few -- in one or two sentences rather than in how many clauses on how many pages that would accomplish what is really essentially needed.

9253 COMMISSIONER WYLIE: In light of your recent comment about the jurisdictional issue being rubbish, I think that is what you said, would you -- it would be a "trust us" approach rather than there being some concern about having details such as you can't be in the same room, you can't have the same computer, you can't be technologically connected to each other. You would see that as inherent or integral or part and parcel of the clause that you suggest?

9254 MR. MORRISON: We also believe that it would be possible, and I link this comment to the one that I offered a moment ago to Commissioner Cardozo, it might be possible to create the tools which we think should be funded by these applicants to have an objective third party which would evaluate and study the outputs of their print and television media and would identify evidence of news gathering deficiencies.

9255 But let's take the case that you are to accept, in essence, the view that we put before you and that you were to impose, require, otherwise force these applicants to live by this standard. If they were to decide, if one of them were to decide or both of them, to take you to court to challenge your jurisdiction, it wouldn't be the first time that we would have intervened at the Federal Court of Canada to try to defend the jurisdiction of the CRTC against applicants who are trying to box you in.

9256 The essential argument would be that their argument would fail, and their argument would fail because the courts in this country and south of the border have recognized a legitimate role for government in responding to concentrations of power in our society.

9257 The courts have generally been quite responsive to concerns by properly constituted regulators in that regard. There are many analogies. They may not be exact, but you know what would happen to somebody who sets interest rates at the Bank of Nova Scotia if they just casually decided to call up the Bank of Montreal and discussed such a thing.

9258 There are all kinds of legitimate prohibitions for public policy reasons of what would otherwise be considered the freedom of speech in our society. Should it come to that, we will be there along with a lot of others defending the jurisdiction of this Commission.

9259 I think it's pretty redundant knowing your reputation, Commissioner Wylie, to suggest that you would ever be intimated by such a thing, but if that were to be the case, I would urge you to just bury that thought.

9260 COMMISSIONER WYLIE: Is there any reason why the Commission shouldn't take a trust us attitude vis-à-vis TVA and Quebecor should it be inclined to approve it?

9261 MR. MORRISON: I really didn't understand your question.

9262 COMMISSIONER WYLIE: Well, what we have here is a code that has been, with a bit of variation but which makes it even more restrictive than has been imposed by this Commission twice on a Quebec broadcaster and has been discussed at length and accepted as something that could be reimposed should it own an even larger broadcaster in Quebec.

9263 It has very precise drilling down, as Mr. Fecan taught me to use, of the clause that you have put forward. You say well, we can trust these broadcasters in English Canada. Do you see any reason why we can?

9264 We would have, for example in Quebec, in Montreal, CanWest owning CKMI, CJNT and The Gazette with this code and Quebecor owning TVA, et cetera, with another code that is very detailed. I'm curious about -- but you are not backing off from these details because of a jurisdictional concern. That is going too far.

9265 MR. MORRISON: I think the Quebecor code in its level of detail is an expression of what would be required to achieve what is stated in one or two sentences in our brief.

9266 I'm conscious that I -- since you as a Commissioner have asked the question, I am reminded that Commissioner Pennefather made very clear that we are not here to discuss TVA today, but since you have asked it would appear to be somewhat strange for one level of specificity to apply to CanWest in that 40 to 50 per cent of the greater Montreal market that is speaking English and another standard to apply to TVA on the other side of it.

9267 The Broadcasting Act does provide for that lack of symmetry when circumstances are different, but I think if you did the numbers I doubt that you would find that the concentration that CanWest represents in Montreal is all that different in degree from what Quebecor has on the francophone side.

9268 COMMISSIONER WYLIE: I know we are not discussing TVA but this code is appended to your intervention. It was also put forward to the applicants as the latest thinking of the Commission. Much was made about distinguishing the Quebec situation from, let's say, the Vancouver situation which you don't particularly take seriously.

9269 MR. MORRISON: I think that that is just not correct. You have access to staff and experts who can gather objective information for you. There was a lot of smoke screen activity taking place at this table when some of those presentations were happening, but I won't go over information I have already put before Commissioner Cardozo in his questions.

9270 COMMISSIONER WYLIE: So you would -- basically one -- I'm just trying to advance this issue. You would see the possibility of having this clause and then perhaps something that is not a thou shalt not but examples of how it is achieved.

9271 The reason why I am saying that is if there is a mechanism then to allow complaints as to what it is that's not permitted and that one can complain about as not respecting the code, this is very broad and may not be helpful to the average person who would want to say they are not doing what they are supposed to because they are doing "X".

9272 You haven't made any comments about the proposal in these codes which are quite similar, although they do differ in clause 7 with regard to the complaint mechanism, but it seems to be an internal mechanism rather than what the Quebecor TQS situation provided for and which again you appended to your intervention where there would be an independent committee entertaining complaints from both the people who are working in the area as well as anyone else from the public.

9273 You don't have to comment if you don't want to. I'm just --

9274 MR. MORRISON: I was going to say by way of approaching your comment that perhaps there is some problem somewhere in some elements of the Quebecor code where they are preventing journalists in their newsrooms, their print newsrooms, from doing certain things because it seems to me that that's a bit of a stretch of the CRTC's jurisdiction, to control what a print journalist does.

9275 It wouldn't take that much of a rephrasing to make it clear that the issue is a one way valve in a sense, but the responsibilities have to be focused on the licensed broadcasters' newsrooms over which you have jurisdiction.

9276 With respect to how these things are evaluated, I am aware that Quebecor has brought this document to the table and you have imposed it, but not against their will, at least not in the most recent transaction. You may well impose it, but not against their will.

9277 In the case of the English language station groups, it's our minimum advice that they would accept this principle and that you would initially trust them to implement it, but that you would create the verification upon which any longstanding trust should be founded to evaluate whether the trust was warranted.

9278 That's consistent with the whole tone of the television policy it seems to me.

9279 COMMISSIONER WYLIE: Yes. We will, of course, review the code with our lawyers, but it has been drafted in most cases as to receive -- the newsroom of the TV shall not receive. It may have an indirect effect, of course, on the other journalists, but we certainly recognize that we only speak to the newsroom and the journalists of our licensees.

9280 On scheduling, do I take it from your comments that you have no concern with either of these groups of licensees to schedule as they wish according to the strategy they may devise?

9281 I remember, Mr. Morrison, that this manner of exposing Canadian content for the red squares was invented by you to criticize Global.

9282 MR. MORRISON: I believe in giving credit --

9283 COMMISSIONER WYLIE: You wouldn't mind Global scheduling in that manner either.

9284 MR. MORRISON: I believe in giving credit where credit is due. I think the concept originally came from the English television network at the CBC. Of course, they had a --

9285 COMMISSIONER WYLIE: Don't count their public. We are talking about private. You were the first one in the private --

9286 MR. MORRISON: Scheduling is another area, trust us area. You may be familiar with the lawsuit underway at the moment between Mr. Asper Sr. and the renowned television and movie leader, Robert Lantos, who has appeared here many times which in part --

9287 COMMISSIONER WYLIE: You mean --

9288 MR. MORRISON: One of the parties apparently keeps delaying. That lawsuit is in part over allegations about scheduling deliberately to decrease the viewing of Canadian programming.

9289 We did some research on one occasion about Global, now that you mention it, where it was very difficult to get the people who were selling ad space at Global to even quote a cost of advertising on Canadian programs. The response would come back "No, no, no, no, you don't want that. What demographic do you want to reach? We will package something together where you get an ad on this American show, this American show, that will cost you so much and we will give you an ad on "Traders".

9290 We have legitimate ground, we believe, to question whether in the past Global has, and this might apply to CTV, has always scheduled their programs in a way to try to maximize the audiences. We gave you concrete evidence in paragraph 14 of our original submission where Global said -- this is speaking about the new program "Big Sound".

9291 Now every night they could see the program "Big Sound", every night at 9:30 p.m. on a Monday. We know we can build audiences with a consistent scheduling. This is why we plan to continue the approach and then we listed for you all the times where "Big Sound" had been hopscotched around the Global schedule coming through to the date when we had to file this document.

9292 We are not convinced. When we ask the question why would only 5 per cent of the audience that Global assembles between seven and eleven p.m. in the 1999 broadcasting year be watching Canadian programming, we are not sure it's entirely because of extrinsic factors.

9293 We would like to believe that you knew television policy may address some of those concerns and may press them to do better. I suppose ultimately that's in answer to a question Commissioner Cardozo posed to me about an hour ago.

9294 COMMISSIONER WYLIE: Thank you, Madam and gentlemen.

9295 Maybe, Mr. Duke, it's because we are looking for a man to replace Charlie Rose that we can't find someone. Maybe if we look for a woman we would find one.

9296 MR. DUKE: The point is very well taken. Maybe there is one right at hand. Thank you, Commissioner Wylie.

9297 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

9298 MR. DUKE: A new task for the Vice-Chair.

9299 THE CHAIRPERSON: Thank you, Ms Golfman, gentlemen.

9300 We will take our lunch break now and reconvene at two o'clock.

--- Upon recessing at 1257 / Suspension à 1257

--- Upon resuming at 1400 / Reprise à 1400

9301 THE CHAIRPERSON: Good afternoon, ladies and gentlemen. Welcome back to our proceeding.

9302 We will continue on with hearing the intervenors with respect to the group renewals for CTV and Global and the individual television stations of CTV and Global.

9303 For the next intervenor, Mr. Secretary.

9304 MR. CUSSONS: Thank you, Mr. Chairman.

9305 We will now hear the intervention by Mr. Dennis Baker, Penticton, British Columbia.

9306 Mr. Baker.

INTERVENTION / INTERVENTION

9307 THE CHAIRPERSON: Good afternoon, Mr. Baker.

9308 MR. BAKER: Good afternoon. I would like to thank the members of the CRTC for giving me the opportunity to speak on this issue.

9309 As you are aware, I'm speaking in opposition to the renewal of the licence for CHBC Television.

9310 I understand I have been limited at ten minutes. This is a small issue in a larger battle that I am in, and I have been asked actually to --

9311 THE CHAIRPERSON: I would just like to make it clear that all the intervenors no matter how big or small get ten minutes.

9312 MR. BAKER: Oh, okay.

9313 So I am just going to run off from the cuff here on this.

9314 You have my written submission and I have been asked to steer clear of that for some reason, but I'm going to oblige with that.

9315 THE CHAIRPERSON: You don't have to steer clear of it, but I mean this is an opportunity for you to expand on it. But you can --

9316 MR. BAKER: Okay.

9317 Like I said it's a larger issue and it involves some environmental technology that I have designed and all the media in Canada has participated in keeping it quiet the theft and suppression of it.

9318 Although it was difficult in me speaking here, at least it wasn't like at the House of Commons Standing Committee on the Environment and Sustainable Development which I was arbitrarily imprisoned on speaking on.

9319 I did design a portable wheat starch paint removal system to replace chemical paint strippers which as well has use in nuclear waste clean up and since it replaces chemical paint strippers which are precursors to ground-level ozone, the use of it will reduce the incidence of childhood leukaemia as well which I think is quite a bonus.

9320 Since I am limited to ten minutes I can't speak on some of the positive aspects so I have to stick to the negative ones. Certainly I ran in those elections, which I mentioned, to bring that issue to light and again I wasn't covered properly or fairly and I don't believe there is much option left to you people on the CRTC in regards to the licence renewal because what you see from my complaint is that it's not an isolated issue, but a repetitive complete disregard for the rules and regulations of the CRTC regarding the coverings of elections by CHBC Television, and go quote Blaine Gafney, "This is the Okanagan. We do what we want".

9321 Now, the reason behind what I suggest is the theft and suppression of the environmental technology was to prevent my gaining credibility because I spoke out so vocally on what I believe was a complete misinterpretation and in fact hate crimes by the media in pursuing the changes to the Young Offenders Act.

9322 The media is quite clearly -- if a kid breaks a window in Newfoundland they will cover that page after page after page and all the politicians get up and scream and yell, but when the Commissioner of the RCMP commits a perjury in front of the Senate on the DNA databank which I filed a complaint against, there was no mention of that whatsoever. I guess if had asked somebody for some sex the media would have been interested in covering it such as they did with Mr. Clinton.

9323 For myself, I don't mind the opposition in the road to getting this technology out. What I do mind quite a bit is the fact that my three children have had to live through some pretty severe poverty for a year or so while this went on and all these media moguls, or whatever else, are fully aware of this issue and have kept it all silent.

9324 As far as the actual issue which is before you today, the facts are straightforward in my intervention. I request, please look into it. It's a repetitive and complete disregard for the rules and regulations of the CRTC and when I questioned CHBC Television about it they told me they didn't care about your rules and regulations. They had no interest, they had no fear.

9325 Now, the main issue for me again is the necessity of getting this environmental technology out. The media certainly covered a lot of the farmers' complaints when in fact a new global market for wheat product would be a bonus to Canada and to the farmers.

9326 Again, it's not just the one television station, but all print media, all radio stations have worked together to keep this suppressed and out of the limelight, be it going to the ombudsman of the CBC. They are not interested. Nobody is going to cover it. Nobody wants to cover this issue.

9327 As far as me personally being vindictive or angry about my not winning the election that is not the case. I ran in the election to get the other issues out, but the electorate we are not able to make an informed decision and that is certainly anti-democratic.

9328 I think that is the reason that the CRTC must, in my opinion, revoke the licence of CHBC Television because without an informed electorate then we don't have a democratic process, we don't have a democratic country, and we could be the next Cuba excluded out of the Summit of the Americas whether it's held in Quebec City or not.

9329 So what I bring before you today is nothing personal about me. There is vengeance, no vindictiveness. I am not out for retaliation. I honestly believe that this issue is quite large and apparently the last time there was something similar to this one in the Okanagan Valley, the only way the Canadian media would cover it was after someone took an embassy hostage in Lebanon.

9330 If you only cover issues once there is violence, then you have no credibility and I'm not going to resort to violence. I will not be brought down to that level so I will just keep plugging away and plugging away. There are serious issues at stake here and that's why I have come forward and made the effort to bring it to your attention and I just please request that you all show due diligence and responsibility that you hold on behalf of all the citizens of this country and that's my submission.

9331 I thank you very much and I welcome any questions on any issue.

9332 THE CHAIRPERSON: I presume from your note the main focus of your concern is the election coverage issue.

9333 MR. BAKER: Yes, sir. That's the only part of the issue that you can actually deal with, but since I'm here and I have an opportunity to bring the entire war into the picture, not just the one battle, then I am going to use that opportunity.

9334 THE CHAIRPERSON: Well, I thank you very much for your presentation and particularly for your efforts to get here.

9335 MR. BAKER: And I thank you all for taking the time to listen to me. It's legitimate concern and I will ask you to show it due diligence.

9336 THE CHAIRPERSON: Okay.

9337 MR. BAKER: Thank you.

9338 THE CHAIRPERSON: Thanks, Mr. Baker.

9339 Mr. Secretary.

9340 MR. CUSSONS: Thank you, Mr. Chairman.

9341 Our next intervention is the Independent Film and Video Alliance, Mr. Peter Sandmark.

INTERVENTION / INTERVENTION

9342 MR. SANDMARK: Good afternoon.

9343 My name is Peter Sandmark, I'm the National Director for the Independent Film and Video Alliance. It has been in existence for 20 years now.

9344 I want to start by thanking you for the opportunity to present our views on behalf of the Alliance and I would like to mention that this presentation has been approved by our board of directors, eleven-member board of directors who represent the five regions we identified across Canada, Atlantic provinces, Quebec, Ontario, Prairie and Pacific regions.

9345 The 50 film cooperatives, video and increasingly new media centres that constitute our membership represent, we estimate, over 8,500 Canadians working in the media arts. We increasingly use the term "media arts" because we are concerned with the fact that it's creator controlled and so that is what we are concerned about, that is part of our definition of the term "independent film" where the author retains the right and creative control over the project.

9346 We represent an important segment of the public interest since the centres that comprise our alliance are all non-profit organizations supported by public funds and accessible to the Canadian public for the creation of independent films and videos.

9347 Furthermore our members, in as much as they support the principle of freedom of expression embedded in the very practice of independent media production, are concerned viewers as well who feel that the Canadian broadcast system should present a broad diversity of voices from the Canadian public.

9348 Indeed the airwaves belong to the public, the Broadcast Act clearly states so in Section 3(1)(b) -- bear with me, I know you probably all know this very well:

"The Canadian broadcasting system, operating primarily in the English and French languages, comprising public, private and community elements makes use of radio frequencies that are public property and provides, through its programming, a public service essential to the maintenance and enhancement of national identity and cultural sovereignty".

9349 The key concept, I feel or we feel, is that although it is comprised of three elements -- public, private and community -- they all have an obligation to provide a public service and I think this is part of the thrust of our presentation.

9350 It is through the government via the CRTC that this public property is essentially loaned to the private and public companies to fulfil the aims of the Broadcast Act.

9351 Are the broadcasters fulfilling the aims of the Broadcast Act? This is perhaps our point of departure for any evaluation of their licence renewal requests.

9352 What's on the table? The renewals for the two largest multi-station owners in the English language, Global and CTV, and the question we have looked it: Have the ownership mergers resulted in consolidated the promised synergies and efficiencies supposed to enhance the contributions of these multi-station owners to the broadcast system?

9353 In Public Notice CRTC 1999-97, it was stated that quote:

"The Commission expects that the consolidation of broadcasting, production and communications companies will continue to the benefit of Canadian audiences, the Canadian broadcasting system and the public interest".

9354 And in Decision CRTC 2000-727, the Commission wrote that the positive consequences of this restructuring include, "increased efficiencies, new synergies", and most importantly, "the greater investment in Canadian program production that they generate".

9355 So the Independent Film and Video Alliance agrees with the CRTC that any new efficiency should result in greater investment in Canadian programming, and hence we recommended in our brief that the two multi-station owners increase the amount of expenditures on Canadian independent productions.

9356 This same recommendation, or a similar one, was also made by the Canadian Film and Television Producers Association, the Directors Guild of Canada, the Alberta Motion Pictures Industries Association and the Writers Guild of Canada.

9357 However, CTV responded to this recommendation by saying quote:

"We do not believe that such commitments are either necessary or appropriate within the context of the Commission's well-defined Television Policy".

9358 That's page 11 from their April 9th letter.

9359 They go on to state that they have always been strong supporters of the Canadian independent production community and the question we ask is: If that is so why would they not make a clear commitment?

9360 To be quite frank we find it somewhat disconcerting that the broadcasters must be regulated in order to present a minimum of Canadian content. In fact, the overall level of Canadian content carried by private broadcasters affiliated with the CBC from 1994 to 1999 declined by 0.53 per cent during the 6:00 p.m. to midnight slot.

9361 Moreover the expenditures on Canadian programming expressed as a percentage of the multi-station owners advertising or overall revenues is even more telling. They declined over 16 per cent in each case, at the same time as expenditures on American programming, as was noted earlier on by the Friends of Canadian Broadcasting, had increased.

9362 It is equally disconcerting that the MSOs should complain about making any kind of increased commitment to Canadian programming especially in light of their increased revenue, increased synergies and efficiencies. Finally, in light of the spirit of the Broadcast Act itself that states in section 3(1)(f) that "each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming."

9363 To us, "in no case less than predominant use" seems to mean at least 50 per cent. So the way we see it, the broadcasters are doing the minimum right now. We are sure that they can do better.

9364 But the other key issue involved in ownership consolidation is ensuring a diversity of voices in the Canadian broadcasting system. In this we agree with the views of MP, Loyola Hearn, from St. John's West and member of the Standing Committee on Canadian Heritage as expressed in his written intervention, that "Media Concentration could also pose a threat to democratic institutions including freedom of the press and diversity of broadcasting."

9365 In our view, freedom of the press includes the freedom of documentary filmmakers to present issues, and access to the airwaves for a diverse range of opinions expressed in documentaries.

9366 The Commission itself asked the question in the Notice of Public Hearing: "Where a broadcasting licensee owns a production company, do safeguards need to be imposed to deal with potential undue preference?" To which we respond emphatically, yes.

9367 What safeguards can be developed to ensure a diversity of voices, or let's look at it as, what is the solution? I put it to you that the solution is independent production.

9368 This is why we support the proposal put forward by the Canadian Film and Television Producers Association in their intervention that:

"The CRTC should require CTV and CanWest to ensure that at least 75% of the priority programs broadcast on their stations come from unaffiliated producers and that at least 75% of the spending on priority programs be allocated to programs from unaffiliated producers."

Recommendation No. 9 in their brief.

9369 We would like to see CTV and Global not only increase spending on independent productions, but also to make a commitment to diversity in terms of the range of viewpoints, subject matters and perspectives. Canada is made up of many different cultures and the best way to represent this diversity is to show the freely created works of a wide range of Canadian filmmakers. This idea is in the CIFC's presentation where they suggested a minimum of spending on documentaries.

9370 The problem of restricting diversity arises when the broadcasters commission works to reflect the broadcaster's own perspective. We have a problem with the way broadcasters at this point in time actually even control the production in the Canadian system. As you probably know, Telefilm funding for documentaries, and the same goes for a lot of provincial agencies like SODEQ or the CTF, funding is triggered by a license fee. In some cases with documentaries 10 per cent. This is too small an amount to pay to control what will eventually get produced in our opinion.

9371 In fact, we really think that production should be -- production funding should be accessible without any license fee and that the productions will go through the process of selection that Telefilm or other agencies set up and then will be shopped on the free market to broadcasters who we hope are obliged to purchase a certain amount of unaffiliated productions.

9372 I think that the effect of this would be to increase the market value of these films and would counter the decline in license fees that we see.

9373 We feel that the independent film and videomakers that the IFVA represents are contributing to the objectives of the Broadcast Act, "enriching and strengthening the cultural, political, social and economic fabric of Canada" and reflecting "Canadian attitudes, opinions, ideas, values and artistic creativity."

9374 To give but a few examples of artists and their works that have garnered some acclaim, and I don't want to slight anyone who we don't mention, but just as examples, Nettie Wild, her documentary "Chiapas" is about Indians in Mexico, the Chiapas Indians; Velcrow Ripper, his documentary "Bones of the Forest," about clearcutting in B.C -- both films Genie award winners -- Harry Killas' film "Babette's Feast," screened at Cannes; or Denis Villeneuve's "Maelstrom," a Jutra Award winner; Jeremy Podeswa's "5 Senses," winner of best Canadian film at the Toronto International Film Festival; Gary Burns' "Way Downtown," winner of the Best Canadian Film at the Vancouver festival. All these from the Independent Film Production community.

9375 The list can go on but I think you get the idea. We feel there is a lot of talent out there that is not getting air time.

9376 So we feel it is the quality of the Canadian content that is important and not just the quantity and this is why we feel there ought to be more work shown on Canadian television by independent producers. It is our position that the track record of the multi-station owners obliges us to recommend that an increase in expenditures on independent productions must be enforced by regulation.

9377 Vertical integration will not bring more diversity of programming to the Canadian public, but less, with the recycling of content from one medium to another. Financial synergy for the owners, but not for the public. The more that consolidation happens, the smaller pool of opinion that the public will have to draw on.

9378 Just to give you an anecdotal example, for example, in the Vancouver Sun, owned by CanWest owner, Izzy Asper, I believe, gave a glowing review of "Titans," a program shown on Global, also owned by CanWest. Meanwhile the Globe and Mail, owned by Bell Globemedia, trashed the show in a review but their own TV critic gave a glowing thumbs up to a CTV show. This is but a small example.

9379 So does the public get any independent thought when there is only a small amount of players? Is there going to be space for a diversity of views and non-mainstream perspectives?

9380 The airwaves are a public resource and the companies granted licences to broadcast must recognize that they have been given the privilege of broadcasting in order to fulfil the mandate of the Broadcast Act.

9381 Thank you very much.

9382 THE CHAIRPERSON: Thank you, Mr. Sandmark, for your presentation.

9383 I note that, as you acknowledged, we have had today the Canadian Film and TV Production Association appear before us and we also have the Canadian Independent Film Caucus and the Independent Film and Video Alliance.

9384 How do you and your members distinguish yourselves from the other associations representing independent producers?

9385 MR. SANDMARK: It is quite complementary actually. The Independent Film Caucus or filmmakers own their own companies. Our member centres are non-profit centres, not individual private companies. That is one of our stipulations of membership that they be non-profit centres. So they are public access centres, publicly funded where people can join, rent equipment and start producing a film or video. That is not to say that the individuals can then have their own company perhaps and go on and exploit.

9386 I think in a lot of cases we are a complement to the Canadian Independent Film Caucus because their members are privately owned small companies. The CFTPA are simply larger privately owned companies.

9387 THE CHAIRPERSON: So is it just size, and I don't mean this to sound like an insult, is it also sort of relative maturity?

9388 MR. SANDMARK: No.

9389 THE CHAIRPERSON: I mean would your association be more sort of new players, up and comers?

9390 MR. SANDMARK: No, as a matter of fact, some of our member centres are 25 years old, quite old. The Newfoundland Independent Filmmakers Cooperative for example, celebrating its 25th anniversary soon. Videograph in Montreal has just celebrated 25 years. The Alliance itself is 20 years old.

9391 THE CHAIRPERSON: No, I understand the centres themselves might be quite old, but the people who would come through the centre, would they be coming there as part of a development process and then sort of move on as they become perhaps more skilled?

9392 MR. SANDMARK: In many cases, yes, that is true. The centres operate in two ways, as some times a stepping stone to the industries and many people have gone on and formed their own company. I am a founding member of Main Film in Montreal. A lot of the people that I helped start it with have gone on to work in the business. My brother is an editor is an editor for CTV, the affiliate in Montreal, CFCF, for example. A lot of people work in the business.

9393 Some filmmakers choose to continue working in an independent production style and stay and do it differently. So there is a wide range of age.

9394 But for sure it does form an important developmental platform. In a lot of way we see it as a stepping stone for filmmakers for sure.

9395 THE CHAIRPERSON: Your statement here today, is this more a matter of principle for you and your members or is this something that would get more immediate and direct benefit to the people who are members of your association in terms of getting their own productions on the screen, the ones they are doing as members of your group, as members of these individual cooperatives or centres?

9396 MR. SANDMARK: I think that there has been a great deal of growth in the milieu and we see a lot more professionals. I think a lot of projects should get on TV that are not if that is answering your question. Perhaps you --

9397 THE CHAIRPERSON: Well, let me take it a different way.

9398 You raised the issue about licence fees in your presentation this afternoon. Now, my understanding going back to the development of Telefilm and the cable fund issue was that the notion of the licence fee as a trigger was because the money was being loaned to actually support the development of productions that were actually going to get on the air and broadcast, not just productions that might sit on a shelf somewhere. So one of the measures or triggers for that was the license fee.

9399 I guess indirectly it tended to be perhaps a proxy or a measure of quality as well, and to the extent that you can link that together with it getting on the air I don't quite understand your concern or this licence fee issue.

9400 MR. SANDMARK: Well, with a coalition of documentary filmmakers we have made some presentations to Telefilm and we are recommending that documentary filmmakers be able to apply for funding and get funding without a licence fee. There are cases that we can demonstrate where people have produced a documentary film, released it theatrically, for example, then gotten it on TV and had higher audience ratings because it has had a theatrical play. It has had some promotion and some circulation.

9401 We don't think it is necessary that it just be produced directly for TV. The feeling that TV is the major or the only market in some cases that is the response we get. Television is the only market for documentaries. But we think that that is sort of backwards.

9402 The intention was good. I understand why it was set up. But the problem is now, it's like the tail wagging the dog. I mean we are talking about diversity and what this hearing is about is diversity of voices. We are saying let the project get produced and I think we have enough faith in the system that quality work will get funded. I don't think we have to be worried about funding going to projects that aren't of quality and I think once they are produced they are going to find an audience.

9403 A problem facing many independent filmmakers and producers is that they don't have the reputation yet and so they have a harder time to pre-sell their projects to broadcasters. Quite often they are able to do it when they have got a final cut and they can go and show something, and we see a lot of cases, Telefilm putting in funding at the end of a project because they see where it is going at that point. So we just take it to the next step.

9404 I think it's not to say that there should be no licence fees. It's just that there should be the opportunity for some projects to be made without the necessity of a licence fee and the concern that a broadcaster will exercise control over what is getting made and additionally that filmmakers will tailor their projects to the perspectives and interests of broadcasters in order to get that licence fee, because that is going to trigger all the rest of the funding, even when it is only 10 per cent. They can get 90 per cent of the funding for the project, but they have to first pass through that gatekeeper's objectives with what they want to broadcast.

9405 I realize it -- I think the point here that we are trying to make in our presentation is that the broadcasters have a public -- they have a public obligation to show works and we are hoping that CRTC will regulate, in a way that is enforceable, expenditures on independent productions and acquisition of non-affiliated productions so that the producers can sell their works to the broadcasters in a more free market. We don't really have a free market system.

9406 THE CHAIRPERSON: Part of your concern or a substantial part of your concern revolves around the amount of independent production that CTV and Global broadcast and there has been some discussion about that over the past week and you used the -- you referenced the word "predominant" out of the Act and we have had some discussion about whether it be predominant amount or more than 50 per cent. You have suggested 70 or 75 per cent, I guess it was.

9407 Is it your view that CTV and Global both don't do enough in terms of acquiring and broadcasting independent productions.

9408 MR. SANDMARK: No. I don't think they do enough. Obviously they are not the same. The statistics are there. They could do more. I mean we took a very principled approach in this. We are not going to argue numbers. I think the Broadcast Act is very good actually, very clear.

9409 I think the point I wanted to try and emphasize earlier is that it's not just up to, say, the public broadcasters to fulfil this mandate. It's up to the private broadcasters as well.

9410 THE CHAIRPERSON: I take it most of your members are in the documentary business.

9411 MR. SANDMARK: No. Well, there's a wide range, drama, animation, experimental films, video, everything. There's a wide world out there that is not accessible to the Canadian public over the broadcasters because they are not showing, that's for sure, but there's a wide range of stuff.

9412 It's a really growing milieu. We are estimating the growth -- well, it's hard to even keep track of it. There's greater demand on funding programs.

9413 Documentaries is a specific issue right now because there's kind of a squeeze here. The broadcasters are the main market for documentaries and they are triggering the funding. There is no possibility to get funding without the trigger, without their approval.

9414 We have lobbied Telefilm and gotten funding for independent feature films, fiction films, drama without any kind of -- without even a distributor's deal. Film-makers can go, it just started this year, it started in January and I think by all means it's a success. They have already given out funding for the first round. That means film-makers can make something and then try and sell it later.

9415 Let me put it like this. When a film-maker produces something and then goes to a festival like, let's say, Sundance. One of our Board of Directors, Jorge Manzala, made a film called "Johnny Grey Eyes". It was shown at the Sundance Festival.

9416 If he doesn't have a distributor or a broadcast licence in advance, he is in a much better position to shop that film around and sell it and get a better fee. If everything is sold in advance, you are not getting the best value for it.

9417 THE CHAIRPERSON: Would much of the production that your members do be what you would characterize as the sort of programming that should appear in prime time?

9418 MR. SANDMARK: I'm sorry, I don't quite understand what you mean. Prime time, like not suitable for prime time.

9419 THE CHAIRPERSON: No, no. Is it your view that it is prime time type of programming?

9420 MR. SANDMARK: Yes, absolutely. I don't see why not. I think that it's a question of daring -- it's a question of taking some chances and not copying what has been done.

9421 I will give you an example, MuchMusic, MusiquePlus, these were stations that I think people had no idea. I know that when they came out, the idea of broadcasting short music video clips, which was a new form at the time, seemed kind of crazy. There was no programming, you know, not a clear programming structure, but they were great successes.

9422 In a lot of cases it drew away a lot of the talent that was in independent film-making. I know a lot of people who are making experimental films and the only work they could get was making music videos. The form and what you see in music videos is much more experimental than what you get in drama or news programs certainly. That's where the innovation in form has happened.

9423 Now it has become in its own way a bit more regulated and programmed and less innovative than it once was, but there was a form of programming that broke the rules that just took off and worked.

9424 I don't see -- I think that a lot of independent programming would gain an audience, certainly among the younger viewers who are supposedly the sought after demographic. When I helped organize this film cooperative in Montreal, we put on a lot of screenings and we found that there was like a hungry desire for something different. They were always like sold out or quite popular. It varies.

9425 It has to be programs in a time slot where people will look at it. It has to be promoted adequately. A lot has to do with how the broadcaster will promote it within its own ranks. With the increased synergies, they can certainly cross-promote their own programming.

9426 I'm here today because I believe in all the independent production.

9427 THE CHAIRPERSON: Notwithstanding your comment about the newspapers towards the end of your presentation, you do see a value in cross-promotion here.

9428 MR. SANDMARK: I think that that's what they are doing. I think it's difficult to block it, I mean unless you want to try and block purchases of channels and mergers. I don't know. I see that the question earlier about technology and sharing of technology, if a reporter can just e-mail the journalist at the TV station their article, I don't see how that's going to prevent the cross-over of different companies. If they are owned by the same company, it's pretty obvious that they are going to cross-promote.

9429 THE CHAIRPERSON: But one of the main criticisms about -- I don't know if it's criticism, but perhaps one of the things that has been lacking in terms of enhancing the value in the audience levels for Canadian programs is we haven't put as much into promoting them as Americans do with theatrical films or television programs.

9430 In that sense you just raised the issue. Do you see that as a value to getting more audience for perhaps helping to create a star system in Canada?

9431 MR. SANDMARK: Yes. We welcome promotion of Canadian works. Absolutely. I think that was one of the features of the Heritage's new feature film policy, was to have increased funding for marketing for films.

9432 We watch every week. We all know from television ads what the latest Hollywood release is whether we want to or not. I mean it's all over the TV in advertising. How many Canadian films get advertised on TV? Not enough for sure.

9433 THE CHAIRPERSON: Thank you for your presentation, Mr. Sandmark.

9434 MR. SANDMARK: Thank you very much.

9435 THE CHAIRPERSON: Mr. Secretary.

9436 MR. CUSSONS: Thank you, Mr. Chairman. We will now hear the intervention by the Communications and Diversity Network.

INTERVENTION / INTERVENTION

9437 MR. RASALINGAM: Good afternoon, ladies and gentlemen. Bonjour, mesdames et messieurs. My name is Raj Rasalingam and I am the President of the Pearson-Shoyama Institute which houses the Communications and Diversity Network. I am here to speak in that capacity.

9438 Canada is a nation of immigrants. A lot of us or our parents or grandparents came from somewhere else. When our parents or grandparents arrived in the new world, the first thing they was to try to learn English or French as fast as they could. Some could never get the hang of it, but they worked and scrubbed and pushed so that their children could learn English or French. In so doing, the farsighted people of the fading photographs brought a second dimension for Canada united from sea to sea.

9439 As we continually expand our systems of communications in this country, we might reflect that they depend on a core of common language. We need to assure that every permanent resident of this great land can speak at least one of its official languages. Only then will it be open. Only then will all the newspapers and the television and radio and all the rest be acolytes of the Canadian dream.

9440 At the same time, however, Canadians need to see, hear and believe that the media reflects the changing face of Canada.

9441 You have before you two important licensees who, besides having the power to communicate from coast to coast, have the ability to influence attitudes about how Canadians embrace and reflect change.

9442 Commissioner Colville's opening remarks asked the question: Will the initiatives proposed accurately reflect the cultural and ethnic diversity that exists in the local and national communities.

9443 In a democracy, the citizen is entitled to ask and have answered two basic questions concerning any piece of public policy. First, what is it that the policy is designed to accomplish? Second, what evidence is there that this goal is being achieved?

9444 The Communications and Diversity Network of the Pearson Shoyama Institute request the Commission to ensure that broadcasters develop and file a comprehensive plan with the early report for cultural diversity which covers ensuring cultural and racial diversity on air, the broadcast of stories about minority individuals and communities, inclusion of minority individuals in mainstream issues.

9445 The inclusion of minority individuals in mainstream issues as guests and commentators is an area that needs a strong focus. Take the case of Ottawa-Hull, the Silicon Valley North, with Nortel as a world leader in technology.

9446 Nortel's second in command world wide is Clarence Chandran, a Canadian of south Asian descent. If you were to conduct an analysis of high tech news items on the local and national networks, you will find that interviews with individuals such as Clarence Chandran are non-existent. Now, I grant you due to the stock market crash he might not be happy to come, but still I made the point.

9447 CTV has outlined to you the initiation of a comprehensive plan. We believe that this a step in the right direction and would commend CTV's proactive approach. The Institute has yet to see a comprehensive plan for Global to comment on today.

9448 Our recommendations for the term ahead are that licensees be encouraged to build upon the initiatives taken in recent years to develop a more comprehensive approach to cultural diversity; that licensees adopt the CAB guidelines on cultural diversity; that the CRTC adopt CAB guidelines as mandatory code for all conventional and specialty broadcasters; that Global be required to undertake comprehensive training of news departments, drama producers and programmers; that the licensees be required to continue a comprehensive employment equity program of on-air and off-air personnel.

9449 We submit these recommendations based on two beliefs. The Commission through its policies must become relevant in the lives of the cultural communities and their reflection and advancement in Canadian society. This goal eventually strengthens Canada as a nation.

9450 The broadcasters, besides gaining new audiences in Canada, will develop the ability to market their programs to the rest of the world.

9451 Thank you. Merci.

9452 THE CHAIRPERSON: Thank you, Mr. Rasalingam.

9453 Actually I do recall having seen the story about Mr. Chandran, if I am pronouncing his name right, about a month or two ago as a possible successor to Mr. Roth. As you note, perhaps these days he is quite happy to have Mr. Roth be in the limelight about the current woes facing Nortel.

9454 I turn to Commissioner Pennefather.

9455 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

9456 Good afternoon. Thank you for joining us and for your comments, both written and oral today.

9457 I just wanted to note -- I'm not sure if you have had a chance to become aware of the document tabled by Global, their reply document dated April 9 in which they do lay out quite a lengthy section on their approach to cultural diversity. It does address some of the points that you raised. I wasn't sure if you had had a chance to look at that.

9458 MR. RASALINGAM: No, I have not.

9459 COMMISSIONER PENNEFATHER: You might then want to look at it and in so doing, I wanted to ask you a question not only about Global's approach, and let's assume you have gone through it in fact. It touches on a number of the points that you have raised with us this afternoon and previously. You made some comments about CTV.

9460 You may be aware as well that during the discussion with both CTV and Global last week, Commissioner Cardozo asked both networks and they agreed to in fact table plans which would be comprehensive strategies in three to six months and to report annually.

9461 I believe this afternoon you began to address my question, but I would appreciate some expansion on it. In your view, what elements would you look for in such a comprehensive plan?

9462 MR. RASALINGAM: In terms of the elements that we are looking for, I think the first area that we would look for, has research been done, adequate research through the plan that CTV has outlined, which is priority setting round tables to determine what the priorities are in the cultural communities, a round table on critical issues to identify the issues arising from those and to put into perspective.

9463 Once the research has been done, the area that we are looking for is how does it translate into professional development for programmers, professional development for news departments that can translate from research into action at both the production level as well in the newsrooms.

9464 In terms of the CTV plan, certainly what is very good on that one is the best practices study which can be utilized as a reference guide both for the Commission as well as for other broadcasters to adopt.

9465 Those are some of the elements. I think the second generation of new Canadians are not really satisfied with just the notion that you portrayed a cultural event with which they are familiar because their parents take them to those events anyway. Just the mere fact of seeing that on the news and saying that you have done your share is not sufficient. They want to see themselves reflected on mainstream issues and that's a key area.

9466 I think this kind of approach and elements built into the compliance structure will facilitate a monitoring of the program.

9467 COMMISSIONER PENNEFATHER: You mentioned representation in mainstream issues and used an example. I assume that you are addressing other forms of programming, drama, documentary and so on.

9468 MR. RASALINGAM: Yes, I would.

9469 COMMISSIONER PENNEFATHER: And do you have any comments on what steps you would recommend to assure greater diversity in programming choices?

9470 MR. RASALINGAM: In terms of my comments to that, I want to reserve that until the proper research is done. I think it would be fair to the Commission that the proper research be done by the institute and submitted as a document rather than prejudging what is out there.

9471 COMMISSIONER PENNEFATHER: In raising that, I am wondering if you are referring to paragraph 123 in our TV policy which does discuss the importance of a task force which brings together the various players from the communities, broadcasters and producers to discuss in fact research and what steps can be taken.

9472 Have you participated already or do you intend to in the creation of this task force?

9473 MR. RASALINGAM: I certainly would be open to participating that and we think it would be a good mechanism to air what needs to be done. I think certainly it has to have the cooperation of the policy makers plus the broadcasters and the different institutes that look into issues like that, so we would be very open to that. Yes.

9474 COMMISSIONER PENNEFATHER: You mentioned as well in your written brief regarding both networks -- one of your comments was that they should expand, both networks should expand on the CAB guidelines. Can you tell us a bit more what you meant by expanding on the guidelines.

9475 MR. RASALINGAM: Well, we believe that the CAB guidelines would be of the bare minimum. In terms of any guidelines, we believe that once guidelines are set, they sort of benchmark certain standards, but certainly the change that is reflected outside in Canada is happening at a much faster rate than guidelines can serve.

9476 Broadcasters should make an effort to keep up with the pace of change because after all, when they reflect reality outside, the change is happening faster than policy documents or guidelines.

9477 COMMISSIONER PENNEFATHER: I understand that point and I also understand that you are concerned to do proper research, hopefully as part of a joint task force as well.

9478 In looking at expanding on these guidelines and in fact seeing them as looking for something more, what do you view as the most crucial first steps? What are the most crucial first steps that should be taken?

9479 MR. RASALINGAM: In terms of as a Commission?

9480 COMMISSIONER PENNEFATHER: Well, we could get to that as well. Obviously that may be part of the results of our discussions during this hearing today. I am interested in your comments on -- since you said we should expand or the broadcasters should work the guidelines, in so doing we are looking at working towards a plan which really improves cultural diversity.

9481 In your estimation, what are the most important things that should be done? If these guidelines aren't enough, what are the most important things that should be addressed?

9482 MR. RASALINGAM: Certainly the important things that we feel should be outlined would be the filing of a plan with yearly monitoring, of adherence to the plans that the broadcasters are proposing so that both the public and broadcasters have a mechanism to go back and check. We would see that as a key component, crucial important step in the policy.

9483 COMMISSIONER PENNEFATHER: Okay. I notice in your comments as well, your written comments, you refer to issues of Canadian content and local programming are of considerable importance to the CDN. Why do you mention local programming and what do you mean it's important to you in this context of cultural diversity? Why is local programming important?

9484 MR. RASALINGAM: Well, because we believe that local programming, especially in the major urban areas, is reflective -- should be reflective of the events and the lifestyles that are happening in the demographics of Canada where the nature of Canada is changing in the big urban centres.

9485 The less local programming that you have from these cities, the less likely it is that issues of cultural diversity are going to be represented.

9486 COMMISSIONER PENNEFATHER: Are you talking about what we see on the screen?

9487 MR. RASALINGAM: Yes.

9488 COMMISSIONER PENNEFATHER: The reason I'm asking that is the guidelines refer to community outreach. Obviously stations across the country have demonstrated considerable efforts and very important involvement by many if not most of the stations in their local communities and presenting local events.

9489 Is this something that you also feel is important?

9490 MR. RASALINGAM: Certainly. However, I go back to my earlier comments, Commissioner, about the reflection and community involvement in terms of just the cultural or festival events. Certainly when you talk to cultural communities outside, a frequent comment that one tends to hear, and this is anecdotally, it's not based on scientific research, is that -- well, the only time we get to see ourselves is when we are celebrating something or there is a Caribana festival and so on and that's not good enough.

9491 I think community involvement for any corporation is a good initiative and it should be encouraged. However, the reflection of those events should not just be purely restricted, especially in the cultural communities, to just what is called festivals and galas. That's really what our viewpoint is.

9492 COMMISSIONER PENNEFATHER: Thank you. Those are my questions. Thank you, Mr. Chairman.

9493 MR. RASALINGAM: Thank you.

9494 THE CHAIRPERSON: Thank you very much.

9495 Mr. Secretary.

9496 MR. CUSSONS: Thank you, Mr. Chairman.

9497 We will now hear the intervention by the National Federation of the Blind. Mr. Chairman, I guess I will call them a little later.

9498 Perhaps now we could hear the intervention by the Writers Guild of Canada.

INTERVENTION / INTERVENTION

9499 MS PARKER: Good afternoon. Hello. My name is Maureen Parker. I am the Executive Director of the Writers Guild of Canada. With me are Jim McKee, the Guild's Director of Policy and Communications and Tim Southam, a Montreal based writer and Director.

9500 The Writers Guild of Canada is the national association representing professional screen writers working in English language film, television, radio and new media in Canada. Our members create the stories that become the series, movies and documentaries on the screens.

9501 We are here today to comment on the licence renewal applications of CTV and Global. In particular, we will be using our intervention to talk about the importance of drama on the schedules of these two broadcasters.

9502 We have reviewed the applications of both CTV and Global and support the renewal of their licences, but we are asking the Commission to incorporate into their individual conditions of licence special provisions that would lead to a modest increase in the volume of priority programming aired by CTV and Global over the course of their licence terms.

9503 Specifically, we join with the Directors' Guild of Canada in recommending that CTV and Global be required to increase their weekly priority programming from eight hours a week to nine hours over the next seven years.

9504 We are recommending that a minimum of 70 per cent of this priority programming be drama and to strengthen the incentive to broadcast truly indigenous drama, we are asking the Commission to eliminate the 125 per cent time credit for drama productions earning less than eight points on the Canadian content scale.

9505 We are also asking the Commission to set a minimum threshold of three hours a week for children's programming outside of the prime time priority programming requirement.

9506 Finally, we are asking the Commission to consider certain adjustments to the content policy that would encourage the broadcasters to ensure that programming classified as Canadian has in fact been created by Canadians.

9507 Since the Commission announced its television policy in June of 1999, both broadcasters have undergone significant changes. Both are now part of major cross-media enterprises with far greater resources than was the case just two years ago.

9508 We believe both broadcasters have more than adequate resources available to meet a modestly higher quantity of priority programming in prime time, nine hours a week. We support the DGC's proposal to move to this higher threshold in a staged fashion over the broadcasters' seven year licence terms.

9509 Since the new television policy was announced, it has become more difficult to produce Canadian drama. When the policy was announced in June of 1999, there were 12 indigenous hour series in production in our jurisdiction. One year later that number had fallen to just six. This year there are only seven indigenous drama productions in development.

9510 Because development cycles generally begin months or years before a program goes into production, writers are the first to experience a downturn in the industry. We do not attribute the decline in hour drama solely to the Commission's television policy. However, we are concerned that the policy has failed to function as a positive counterweight to other forces at work within the industry.

9511 For one, the severe funding cuts imposed on the CBC have meant that it can no longer play a leadership role in the area of drama. At the same time, there are fewer Canadian distributors than at any time in recent years and they are demonstrating less inclination than ever before to distribute distinctively Canadian dramas.

9512 Meanwhile, export-oriented dramas, mostly of the science fiction, fantasy and action adventure variety, have continued to thrive. Over the past three years there has been an average of 16 export series in production in our jurisdiction at any given time.

9513 We refer to these programs as export-oriented because they have been fundamentally conceived for the international market, in particular the American market. Because these programs are driven by foreign pre-sales, the licence fees for Canadian broadcasters are significantly lower than for indigenous drama series. Economically, they are already an attractive programming proposition for broadcasters.

9514 For this reason, we are asking the Commission to eliminate the 125 per cent time credit for export-oriented drama that earns less than eight points on the Canadian content scale.

9515 The reference to the point system raises another problem with the majority of this type of export programming. Much of it is Canadian only by the strict technical definition of the point system. Many of these series are created in the U.S. and produced for the U.S. market.

9516 The current definition of a Canadian program requires only that a program earn at least six points on the Canadian content scale, so many of these programs meet their requirements by hiring Canadian directors while the writing is done mainly by U.S. writers.

9517 Television drama is a writer-driven medium. In television, if you have control over the story department, you have control over the series. In an environment where less and less truly indigenous drama is being produced and export-oriented production is thriving, Canadian writers find themselves in danger of being excluded from their own industry.

9518 If Canada is to maintain and build a strong indigenous culture, it must maintain a community of writers capable of creating our own stories. Who will tell these stories if there are no Canadian stories left?

9519 Tim Southam will now discuss this issue from the perspective of someone who has worked both as a writer and as a director in this country.

9520 MR. SOUTHAM: Greetings. I wouldn't want you to think I am the only writer left, but here we go.

9521 My name is Tim Southam. I have written and/or directed -- excuse me, I'm losing my voice. If you miss any words, please assume the words "Canadian content".

9522 I have written and/or directed the television films "The Tale of Teeka", "Drowning in Dreams" and "Satie and Suzanne". I have also written and directed episodes of "Traders", "North of 60" and "Blue Murder". I am currently collaborating with David Adams Richards on a feature film adaptation of David's novel "The Bay of Love and Sorrows".

9523 These are all Canadian projects and I am proud of all of them. They were great training and they continue to be a great way to do film and television in this country. They have done well critically. Three of them have found a broad audience at home and around the world. To me this means they are both indigenous and export-oriented.

9524 I am here to thank all the intervening parties and the taxpayers of Canada for working for several generations now to ensure that Canadian voices find a place on bookshelves, stereos, galleries, stages, airwaves and screens around the world. This hard work is the reason a person like me exists.

9525 Certainly the reason I and many other writers and directors live and work in Canada is because we wish to build a unique body of work which will be seen by viewers in Canada and around the world.

9526 All the programs I mentioned share two qualities. They were originated in Canada by Canadian writers and would likely never have been originated or made anywhere else.

9527 Most Canadian viewers know the difference between a Canadian program and one which is not, and for the first time in history we live in a generation which is not automatically dismissing the Canadian programs on the basis of quality or other considerations; on the contrary.

9528 I, and most Canadian writers, believe the nationalist principles and the privileges underlying the protection of broadcast licensing an distribution ownership in our country apply just as strongly to the creation of content. I do not believe that the emergence of new media in any way challenges these principles, although it will inevitably challenge their application.

9529 By content, I mean productions originated and written, directed and crewed by Canadians. I do not believe this pride in Canadian popular culture to be elitist. The decision to favour Canadian content is no more top-down than the decision to limit violence or sexual content in a program. It's a decision you make as a creator and as an exhibitor.

9530 My outlook on Canadian content in drama versus other types of programming comes down to the difference between pride and relief.

9531 Relief is what I feel when I get a job, any job. I was recently offered the opportunity to rewrite and direct a U.S. originated horror film set in New York, which for the record is a Canadian film. This was a fun job. I did my very best on the film. I learned a lot, as much as I could from it and I got to work with excellent actors. I was happy to receive the attached fee. In every way, this film is an example of what crew and directors and writers in this country have derived from working on programs that have emanated from other places like the U.S. There is a great benefit to them.

9532 I was mainly relieved, but I knew that ultimately this film could have been made just about anywhere and ultimately by just about anybody. The more brutal fact, however, is that writers resident in Canada do not get very much work on U.S. originated productions or productions run in part by U.S.-based story departments.

9533 I, and many fellow writers, would like to stay focused on material closer to home. Pride has got to do with getting to do your best work in an idiom that feels like you. Part of it has to do with creative control. The Canadian content system and ancillary funding mechanisms have made this possible despite the tiny size of our domestic marketplace. We should do more of it. If you look at how Canadian novels and popular music are doing, you would be crazy not to think it can work for Canadian TV.

9534 For me as a writer it means building a body of work I can share with fellow Canadians and people around the world. From the perspective of all Canadians, it means building a national body of work.

9535 We know that a national body of work matters. Pride in self and place and collective culture is in fact what makes us something more than merely relieved to have a job. It is certainly our argument for promoting the creation and priority broadcasting of more and better Canadian drama.

9536 Back to Maureen.

9537 MS PARKER: The role accorded to drama by the large conventional broadcasters is more important than ever before, and for this reason we have concentrated our comments in this presentation on the current environment for indigenous drama.

9538 We believe that the Commission, through the conditions of license it will set for CTV and Global, can be instrumental in ensuring that Canadians continue to have a healthy supply of drama that explores issues and experiences unique to Canadians. We hope the Commission will take advantage of this opportunity.

9539 Thank you for listening to us and we would be pleased to answer any questions.

9540 THE CHAIRPERSON: Thank you, Ms Parker and Mr. Southam and Mr. McKee. I will turn to Commissioner Grauer.

9541 COMMISSIONER GRAUER: Thank you. Welcome.

9542 I have a couple of questions, first of all, on your written submission and in particular you mention the broadcasters, and you have talked about it today as well, as distributers of indigenous Canadian programming and that you think this would strength the production of indigenous drama, I gather. I just wonder if you could elaborate on that?

9543 MR. McKEE: Well, as we indicated we are pretty much facing a distribution crisis in this country when it comes to indigenous Canadian drama and there has been a fair bit of discussion within the industry about how to address that. One option possibly is to encourage broadcasters themselves to move into this role as distributors. The issue that arises there is the nature of the agreement between the producer and the broadcaster and perhaps the framework that could be set out through the terms of trade agreement that the CFTPA has been discussing, would be one option.

9544 Another possibility that we raised in our paper is the notion with respect to specific drama productions, encouraging broadcasters to take a modest equity position in the production. To a degree, the model set out by CTV BCE as part of the benefits package where they will be extending series run from 13 to 18 episodes, and in so doing, to my knowledge, taking an equity position offers a good model to achieve a couple of things.

9545 One is to extend series cycle runs that, you know, the evidence is that if you can get series runs to a length comparable to the American series, you have a much better chance of building and holding an audience for your program. They can find it. They can develop a loyalty to it and the off season in between is much shorter.

9546 Also with the prospect potentially of having broadcasters take equity positions, they would share the risk with the independent producer and with the other funding agencies, such as Telefilm, taking equity positions, and so on would be in a similar motivated position to market it international.

9547 I think with CTV in particular, certainly their state of intention in all their documentation around the license renewals and BCE transfers that they believe that Canadian indigenous drama can be successful on the international market. So we think it's a model.

9548 COMMISSIONER GRAUER: I take it you see these very much as being interrelated, the whole issue of distribution? Really what I am getting at is the whole then question of rights, I mean is this not an important issue for the independent producers with respect to distribution.

9549 MR. McKEE: Yes. It very is a concern. I think we had several discussions with writer/producers before preparing our brief and a number of these issues were raised. At the same time the caveat always was on what kind of terms could such arrangements be worked out. So to us some type of clearly demarcated framework for such arrangements would be the appropriate route to go and to us the CFTPA terms of trade agreement is a starting point.

9550 COMMISSIONER GRAUER: I wonder if you could also expand on your views on vertical integration because I guess that is kind of integral to all this whole area as well, or is it not? I wonder if you could --

9551 MS PARKER: I will only speak to it with respect to the Global proposal to use Fireworks as the sole independent producer of their programming.

9552 It's our opinion that that would not promote a healthy production community. Diversity requires the input of several or more, of course, independent producers. So we would not be in favour of production being funnelled through one particular production entity.

9553 COMMISSIONER GRAUER: Well, if I recall they weren't talking about solely, but they did also talk about it with respect to being a distributor, that Fireworks would act more as a distributor. I just wonder, I'm not talking so much about Fireworks specifically, but what is your view of the approach we should take with respect to vertical integration?

9554 MR. McKEE: Well, I guess maybe there are a couple of questions there or a couple of answers. I understand you have a competition to stump the intervenors and this may be one of them.

9555 COMMISSIONER GRAUER: No, I assure you it's not stump the intervenors. The better informed we are, the better informed our decisions will be and this is your business.

9556 MR. McKEE: For us, I guess, the issue is that we know that the creation of Canadian drama doesn't take place solely within the confines of what the broadcasters do. There are several equations to it. The international market is increasingly important and we have an issue as well of -- in the course of a month we have lost one of the -- we have three largest distributors so we are down to I think two at this point.

9557 In the meantime some of those distributors are also acquiring broadcasting holdings on the specialty channel front, and in the meantime conventional broadcasters, such as both Global and CTV, have acquired producers.

9558 I guess we see with respect to sort of diversity the issues of -- the role of the independent production community or the place in this new environment, we still see that community as central to providing a wide range of ideas and creative -- creative possibilities and also expressions of regional diversity.

9559 So in our brief, similar to recommendations made by the Directors Guild and the CFTPA, we have talked about specifically -- we have focused on drama and documentary -- but emphasizing the importance of relying fundamentally on the independent production -- on affiliated independent production companies to generate 90 per cent of the prime time priority drama and documentary programming. So that has been sort of our main point in that area.

9560 COMMISSIONER GRAUER: How would you define unaffiliated?

9561 MR. McKEE: I think the figure previously discussed was 34 per cent or under. That seems reasonable.

9562 COMMISSIONER GRAUER: Just to make sure I understand this. Sometimes it's stump the Commission too.

9563 Just to make sure I understand, the issue of distribution from the perspective of the producers is the more competition there is among distributors for rights, the stronger the position of the producer to negotiate a better arrangement and more retention of rights for themselves. Is this a fair assessment of it?

9564 MR. McKEE: That would be one part of it and certainly a very positive part of it, and the other would be having more distributors genuinely committed to getting indigenous Canadian programming on the international market. That is very important if these programs are going to continue. We have had several instances where programs might have continued if the domestic broadcaster was interested in continuing. But the distributor indicated that they didn't see a market for it and so the program fell.

9565 As a result, essentially you have decisions being made about what Canadians are going to get to see based on what the international market will buy. If you have a greater range of distributors pursuing that market with greater energy or conviction that may now be the case, the environment could improve for Canadian drama.

9566 COMMISSIONER GRAUER: So distributors with some equity ownership which gives them a greater incentive to go out and market the products is a good thing.

9567 You talked about lower licence fees and I know some of the other intervenors have as well with respect to the drama series which are mostly export driven given that they are originally licensed for the U.S. markets. I just wonder if you could give me some examples.

9568 MS PARKER: What we are referring to there are the export-oriented dramas and usually in that particular type of production there are U.S. partners involved in that production who bring in a fair amount of the financing if not the majority of the financing. So therefore that, of course, affects the licence fee paid by the Canadian broadcaster.

9569 COMMISSIONER GRAUER: Can you give me any examples?

9570 MS PARKER: You want a specific show?

9571 COMMISSIONER GRAUER: No. I am sure there are -- but just --

9572 MS PARKER: What the average percentage are in terms of --

9573 COMMISSIONER GRAUER: Yes. What is the difference between these and is this is consistent or --

9574 MS PARKER: I don't have that. Do we have that readily available? No.

9575 MR. McKEE: We could you that figure.

9576 COMMISSIONER GRAUER: But it is pretty much anecdotal then when you say lower licence fees?

9577 MS PARKER: Well, it is a well known industry fact. We could certainly get you that figure with a bit of research.

9578 MR. McKEE: I can name like several or at least two or three programs where they are Canadian, they have gone into production, they don't even have a Canadian broadcaster and after the fact that can be picked up because it's not essential to the financing of the production. Whereas with the Canadian series, with an indigenous series, obviously that is central to triggering all of the funding through the Canadian Television Fund. But it also essential to the core financial picture of the production.

9579 COMMISSIONER GRAUER: One last area I just want to explore with you.

9580 We have had a lot of discussion over the past week or so about the extent to which we were really just getting started with the new television policy and a number of intervenors have suggested that we make changes to it going in. There have also been a number of discussions about monitoring and reporting and how we might assess the performance. What are the criteria we should be looking at and how and when we might assess how the licensees are doing against the policy. I just wonder if you have any -- can give us any further thoughts on that?

9581 MS PARKER: If I could just go back to our presentation for a second.

9582 We are already seeing the effects as I quoted in our presentation. We think of ourselves as the canaries in the coal mine. What happens in the industry happens first to us, to the screen writers. They are the ones developing the shows that will go into production.

9583 In 1999 we had 12 indigenous series set for production. Last year we had six and now we have seven in development. I mean it's hard to say at this point how many will go into production, probably six or seven, so we will be back down at the 50 per cent levels.

9584 That is a hard hit for a guild such as ours where, of course, we like to put all of our efforts into supporting Canadian resident writers, writers who stayed in Canada and are trying to make a living here.

9585 Of course we do represent writers from other countries. Twenty-five per cent of our membership are American residents. This is an interesting stat for you. Forty per cent of our one hour drama contracts are written by American residents. That's 40 per cent of one hour drama written by Americans.

9586 You ask us, getting back to your question, about changing the television policy. I know that it's not certainly not the answer that you would like to hear, but we are afraid. We are afraid of the consequences of that television policy.

9587 We believe that if you wait seven years and set conditions of licence for Global and CTV that don't address these issues that we are bringing forward that there will not be an indigenous writing community in Canada.

9588 I know I sound dramatic. I'm not even a performer. You know what? We just really believe this. We have been compiling stats for the last ten years or so. We actually take great pride in our statistical database. I think we are one of the few organizations in the industry that do have comprehensive data readily accessible.

9589 We have been able to track the trends. We see danger on the horizon. So in terms of if you are not going to have a look at the television policy, then we would ask you to definitely reconsider -- sorry, we would ask first that you set these terms in the licence applications for Global and CTV.

9590 If you feel that you cannot do that at this time, then we would ask you to look at a shorter time.

9591 COMMISSIONER GRAUER: What we are here trying -- what we are here doing is in fact talking to the applicants, the licensees and the intervenors about a number of various options which is why I am exploring it with you.

9592 Certainly one thing that has been raised is the issue of perhaps a shorter licence term. It's really to solicit from you what are the various ways we can look at this. Even if we were to look at the shorter licence term, my question is what are the most -- if we are going to have annual reporting and if we are going to be monitoring certain indices, what to you are the most critical areas we need to be monitoring, you now, over a one, two, three, four year period that can help us assess the performance of the broadcasters and our policy for that matter.

9593 MR. McKEE: I think both broadcast hours for different genres and programming and I think within the envelope of priority programming, it really does need to be broken down by genre so a clear eye is kept on drama.

9594 Spending, again by different categories separate from licence fee spending or production spending. Some attention spent on how much is being spent on development specifically in the area of drama, to a degree also in documentary programming but development ratios.

9595 Basically the spending with respect to what turns up on air and with respect to what's being prepared for the years to come.

9596 COMMISSIONER GRAUER: So just so I am clear then, and certainly you talked about it in your written submission, development spending is a key in your view to, you know, the development of Canadian writers and then identifying the genres so that we can identify where indigenous drama is in terms of the broadcasters ongoing activities.

9597 That's all. Thank you very much.

9598 THE CHAIRPERSON: Thank you.

9599 I would just like to say that we do want to hear what you really believe in. That's really helpful from everybody. It isn't to stump the intervenor.

9600 We had a little bit of humour last week around the issue that we know that the applicants, whether it's a competitive application or licence renewal, spend a lot of time rehearsing and trying to anticipate every conceivable question that the Commission could ask and rehearse their answers, so it is somewhat refreshing for us to find out sometimes that we can ask a question that they hadn't thought of. That was why that comment was made last week that might have led you to think about trying to stump the intervenor.

9601 I would just pick up on one thought. You noted in your presentation and your discussion with Commissioner Grauer this business of 12 projects being worked on and it was reduced to six last year and seven this year.

9602 We struggle with this issue because we hear from the documentary people that, you know, there's not enough documentaries on the screen so you have got to get more of that. We hear from the music people there's not enough music and variety and entertainment programming and that's what our people do well and we need more of that on air. Perhaps from the comedy people that, you know, we need comedy and variety entertainment on television.

9603 How should we deal with this issue that it's 12 one year and six the next? We struggle with how to get this balance between various genres of programming on television over the year. We struggle because we know you really believe in what you do and want to have lots of it on air.

9604 This morning we had a gentlemen representing the documentary group. He really believes in what he does too, so we have to struggle with this issue about how do we draw the balance from a regulatory point of view in terms of how much drama versus how much documentary and so on.

9605 For any one group, well, this is the measure we think you should take, but that measure serves your interest.

9606 I'm not trying to be critical of your self-interest here. I understand that, but how do we draw that?

9607 MS PARKER: Perhaps I should just clarify that the Writers Guild of Canada represents not only dramatists, but documentary writers, comedy writers, variety writers, information, magazine writers. We represent the whole gambit of writers.

9608 We are coming in with this as a position for all members of the guild. We are not certainly trying to be exclusionary in any way. All of the membership of the guild is behind our particular stance.

9609 The reason we focus on drama is manyfold. I think Trina McQueen said it herself, it's the most popular form of programming. If you look back through the years, Shakespeare, Grimm's Fairy Tales, that's how we tell stories to our people, dramatic tales.

9610 You know, I'm all in favour of information and magazine programming, but not at the expense of dramatic programming. When you afford such flexibility to broadcasters, you have to ask I think why, why are there more amounts of information, magazine? It's not simply for promotional purposes. I believe it's because it's cheaper and dramatic programming is more expensive to produce, but it's how we promote our culture, it's how we tell our own stories.

9611 THE CHAIRPERSON: We understand that in terms of the drama piece of this. You did focus on the 12 down to the six or seven now. That was drama, right?

9612 MS PARKER: Yes. That was one hour drama. Just speaking to the other figures, there really hasn't been an increase, a corresponding increase in any other genre. Whereas we are looking at a decrease in drama, we didn't see an increase in documentary production, for example, to compensate for that decrease.

9613 THE CHAIRPERSON: Okay. all right. Thank you for that.

9614 MR. McKEE: We also saw Global's commitment to 36 documentaries over the term of this licence as a very positive development and also CTV has formatted "W-5" to focus on long-form documentaries and have also been using long-form documentaries often coincident with major movies or mini-series.

9615 It has been I think a positive movement by both broadcasters in that area. I think this has affected documentary. The particular area that they are experiencing a lot of difficulty with now is that separate from the primary broadcasters, the documentary genre and the specialty channel world has really kind of mutated into episodic information programming. It's much more difficult in other stations to get long-form documentaries produced.

9616 MR. SOUTHAM: If I may just jump in as well. The dilemma as I understand it to exist for people like myself, writers, focuses more on the issue of the Canadian content, the points system.

9617 The dilemma is consistently who am I asking -- who am I approaching to get the next job. Am I approaching someone with whom I have a relatively well-established professional relationship close to home based in Toronto or am I now developing professional relationships with show runners in Los Angeles and, if so, what exactly are the shows these people are writing? Am I trying to get a job on a U.S. show in which case all's fair, let's go for it.

9618 However, does this effort also involve shows that became of a co-production arrangement or because of the use of the CAVCO system, the Canadian points system, is a Canadian show. Is my primary relationship on these Canadian shows with a show runner based in Toronto or Montreal or is it with someone outside of the country?

9619 I don't really mind either way. I just like to know because the investment of time and energy in terms of getting the next job and in terms of deploying myself as a professional and getting an agent elsewhere is significant.

9620 In answer also, it dovetails with the question of three versus seven years review. Seven years is basically the life cycle of a drama writer in this country so I would like to know now. My fellow writers would like to know now who will we be approaching for our next job as writers in drama and where will they be based.

9621 The point system has a lot to do with that and how it's deployed, so I believe it's not just competition within genres within the umbrella of Canadian content but what exactly are the shows that are qualifying as Canadian.

9622 I think it's a very important issue for writers. I don't think it's a moral issue, but I do believe it's a strategic one for all of us and we have to know who we are going to be getting our next job from.

9623 THE CHAIRPERSON: Well, we hope you have another life cycle. We really appreciate hearing what you really believe in.

9624 MS PARKER: Thank you.

9625 THE CHAIRPERSON: I think it's probably a good time for our afternoon break. We will take our break now and reconvene in 20 minutes.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1550 / Reprise à 1550

9626 THE CHAIRPERSON: We will resume our proceeding, ladies and gentlemen. We will return to hearing from the intervenors.

9627 Mr. Secretary, the next intervenor, please.

9628 MR. CUSSONS: Thank you, Mr. Chairman.

9629 The next intervenor is the Communications, Energy and Paperworkers of Canada.

INTERVENTION / INTERVENTION

9630 MR. MURDOCK: Thank you, Commissioners, for giving us the opportunity to address you.

9631 My name is Peter Murdock, I am Vice-President, Media, with the Communications, Energy and Paperworkers Union of Canada. Beside me on my right is Dave Lewington, the national representative for Communications, Energy and Paperworkers Union of Canada, with a specialty in broadcasting.

9632 Commissioners, we are here today with a different voice, a voice which offers some diversity to this very hearing we think. Ours is not the corporate voice, but rather the voice of thousands of Canadians who work in the media at Global and CTV stations, at CanWest newspapers and community weeklies, at the Globe and Mail, at CHUM stations, at the CBC, at independent productions and a whole host of others in communities large and small from coast to coast.

9633 Our voice is often marginalized. We are described as an interest group in hopes of diminishing our credibility, but our voice today is from the shop floor and is a voice raised in protection of our craft which, when exercised well, is work in aid of an informed public.

9634 Commissioners, we have focused on two issues for the purpose of these hearings: local programming and cross-media ownership. I want to first turn the mike over Dave Lewington, a CEP National Representative, who has a long resume both in working in the broadcast area and in representing workers in the broadcast field.

9635 Dave will discuss issues relating to local broadcasting and then I will talk about cross-media ownership.

9636 David.

9637 MR. LEWINGTON: Thanks, Peter. Thank you, Commissioners.

9638 We are genuinely surprised that these two companies won't be putting more in local programming. We expected that one of the benefits, and I'm not referring to the benefits which were imposed and supposed to be incremental to the sale of CTV to BCE or WIC to Global, would be the revitalization of local programming in stations across the country.

9639 There has been a rich tradition of local programming associated with these very licences. Programming of local and regional interest in every genre from children's programming to variety, music, educational, sports and non-news information programming. This programming sadly is no longer being produced. It has been discontinued in the regions and at local television stations across the country.

9640 Appended to this document are lists from our members at just a handful of local stations across the country. It is a shocking testament to the extent to which local programming has been discontinued in regional markets.

9641 These are the names of local shows, many very successful, which are no longer being produced. We believe the lists speak not only to the past successes but also to the hope, and we hope you will agree, that there is promise for the potential of a revitalization in these local markets.

9642 We are appalled that neither Global nor CTV is promising to do very much more than what they have been doing to enhance their service in local communities.

9643 The requirements which the CRTC has placed on Global in terms of local program commitments in Hamilton and Victoria should not be an exception in Canada. It should be the minimum requirement for original local programming in local markets.

9644 The public interest is not served by allowing the two largest players in conventional television in Canada to deliver audiences to national advertisers without committing additional resources to serving the local viewers.

9645 Balance in the Canadian broadcasting system between local, regional, national and international sources will not be created by allowing Global and CTV to abrogate this responsibility to others.

9646 Commissioners, we represent approximately 1,500 workers in the independent film production arena. We are happy to see the burgeoning independent production sector and have every reason to believe that it will continue under your policies. But we cannot fail in our commitment to local programming.

9647 The comments that Trina McQueen has made about what constitutes local reflection in CTV stations has pointed directly to the need for the CRTC to again define what local programming is.

9648 We heard Ms McQueen say to you last week that anything the News Director deems to be put in local news, regardless as to whether the source is international, national, network prepackaged or other, constitutes local programming because the local person has made the decision to put the program on the air.

9649 This is absurd even on its face. However, what these and other comments made over the course of last week have brought clearly to light is the requirement for this Commission to define local programming. Our proposal to define local programming is as follows:

9650 Programming that reflects the particular interests and aspirations of the community. Programming that provides a forum for the voices and a stage for the talent in that community and programming that promotes the people and places within the geographic area that it is intended to serve.

9651 CTV has said that news programming is all the local reflection they intend on doing to honour local commitments and I suppose the new broadcast policy opened the door for CTV to choose to take this approach. These are the choices Ivan Fecan talked about.

9652 But when the CRTC approved the sale of CTV to BCE, it did so with the proviso that the rich benefits packaged promised by the broadcaster and its parent company last fall would be incremental to the other conditions of licence and obligations it had.

9653 Clearly, the ball is in your court to remind the broadcaster of the incremental nature of its benefits commitments and to require, where it will not do so willingly, additional hours of programming to ensure that this is so. We would urge that much of this investment be in those local markets.

9654 Allow me to give you some perspective on one of the presentations you heard last week.

9655 ATV's Mike Elgie called the video-journalist in the Maritimes a tremendous success. It's an example of convergence and from a reducing-cost point of view, we suspect it is a success.

9656 In terms of community service and quality journalism it is a dismal failure. Both CTV and Global rely on video-journalists or photo-journalists almost exclusively to collect local and regional content in the maritimes.

9657 Two years ago ATV eliminated all the news camera operators outside of Halifax and Saint John. This meant seven local reporters went from working with camera operators to doing it all on their own and the quality of their work suffered as a consequence.

9658 Because of the technical demands of the job, there was little time left over for editorial duties or to maintain contact with sources in the community. Corners have to be cut on virtually very story.

9659 All three women reporters outside of Halifax left ATV for other jobs because they simply could not meet the excessive demands of the work. Since then, one woman has been found as a replacement for the three who left.

9660 On ATV the "Live at 5" program once contained news and feature stories from around the maritimes. During this hour viewers could count on six or seven fresh regional stories each evening. Last fall when the "Evening News" was expanded to one hour, "Live at 5" had its regional content cut back to three or four stories per day.

9661 Those original regional contributions that once went into the "Live at 5" were transferred to the "Evening News". In their place the station runs prepackaged segments called "Dr. A.J", which is a medical segment, "Pete's Frootique", a segment the Chairman referred to last week, and "Mrs. Fix-it", a segment on home repairs produced in upstate New York. So the "Evening News" content has increased at the expense of "Live at 5" which in turn has had its daily original content replaced with generic prepackaged filler.

9662 In terms of original non-news programming, ATV not so long ago produced programs like "Up Home Tonight", a half hour maritime music variety show with performers from all over the region and a children's science show called "Wonder Why" which aired across the CTV network.

9663 These are appalling tales from Atlantic Canada, but the story is much similar out west. The CRTC has stopped regulating local news content because it believes the broadcasters should be allowed to define their own local reflection and brand their products.

9664 In respect of Global in Winnipeg, Regina and Saskatoon, non-news local programming amounts to an amalgam of hosted breaks between programs or what are called interstitials. That's it. That's the commitment.

9665 We believe these local communities deserve more than this from companies who have accepted to take the lead at the forefront of the broadcasting industry in Canada over the next five to seven years. The proposal for documentaries is welcome, but what was there and what needs to be revitalized is truly local shows, identifies as such and within the parameters that we have set out for local programming.

9666 The two largest markets in English Canada are poorly served by Global. Toronto and Vancouver are lucrative advertising markets and while we understand the power that fuels the Global engine are their highest rated shows, we believe the viewers in these markets deserve in terms of non-news local reflection.

9667 Commissioners, we propose that the Commission should regulate, in addition to the local news commitments which these companies have chosen to program, at least a minimum of two and a half hours of original continuous non-news local reflection per week at each station market. Should the Commission deem it appropriate to grant licences for more than four years, that minimum should be increased to five hours per week in the fourth year.

9668 Peter.

9669 MR. MURDOCK: Thanks, David.

9670 Commissioners, I now want to speak briefly about some of the issues involving cross-media ownership. Let me begin by responding to a couple of points made by the corporate teams and then follow up with some suggestions of our own.

9671 The history of how we got here today is short and I believe uncomplicated. I am going to give you what I have described here as a headline view. It's not quite headlines, but it's very short.

9672 First of all, concentration of media ownership is allowed to occur over a ten year period to unprecedented levels in both print and broadcast. Some critics over this time, I'm sure you have read the press over the years, have referred to this as dangerous. Nonetheless, it has been accepted by the Competition Bureau and there it is, we have had it.

9673 Getting there is not half the fun for journalists as most newsrooms saw serious reductions in staff over this period, very little of this in my view is attributable to technology. It had to do with economic reasons and I think a search for profit. It certainly came at the cost of the communities and journalists involved. As a result, community based journalist nose dived, diversity of voice seriously reduced and this happened despite boom times in the economy.

9674 Print and television empires merge under a buying spree of CanWest and BCE and convergence becomes a mantra for media corporations. Tech sector starts to falter on stock markets. Both mega-corporations, I'm moving up to today now, appear in front of CRTC for licence renewals of their television stations in hopes of convincing the Commission that it is okay to merge news outlets.

9675 I'm concerned that the code of conduct here by Quebecor/TVA cited as a possible model to ensure diversity of voice within these media empires remain to the extent that they are there now.

9676 CTV and Global balk, and this has happened in the past number of hours I guess, and design of what I refer to as a light weight statement of principles as counter which, even if they were part of the condition of licence, would do little in our view to protect the diversity of voice within our media.

9677 That's the headline view with a little editorial comment.

9678 Let me add that the world as described by media corporations is not as we know it on the ground.

9679 There are not journalists, as Mr. LaPointe suggested, and I too have been at the journalism schools over the past while, biting at the bit to switch media formats. Quite the contrary. There are high-quality journalists across the country who fear the kind of brave new world that was described by Mr. Asper where people are a sort of media one-person band.

9680 To suggest a journalistic brain drain if we fail to converge media is patent nonsense. In fact, the opposite is true. If we maintain what little diversity of voice we have left in our media, we may have hope of encouraging you people to remain interested in the profession.

9681 We realize that CTV would like to brand their newscasts with the Globe and Mail logo, but I can assure you that what made the Globe the paper it is today is that for some time the Globe has allowed its reporters to b reflective on issues. It is a serious minded newspaper that allows its reporters to do quality journalism.

9682 To undermine such a culture by suggesting journalists work for two media, not one, is abhorrent not only to the ethics of journalism but the standards set for quality of work.

9683 MR. CUSSONS: Sir, excuse me. I'm sorry to interrupt. We asked intervenors if they could perhaps limit their presentations to ten minutes. We are now well in excess of the ten minutes, sir.

9684 MR. MURDOCK: I have just got a few more pages. Is that too much to ask? We will take up more time talking about it.

9685 THE CHAIRPERSON: Probably you could get through to specific comments you might have with respect to this issue and then perhaps through the questioning we can pick up some of the --

9686 MR. MURDOCK: All right. Interestingly, Mr. LaPointe pointed out that CTV is going to expand its foreign bureaus, good, though the commitment is only for the short time. This announcement got more than its fair share of coverage.

9687 What wasn't covered was that while the announcement was being made, the Globe and Mail was reducing its news staff. This is not so good. And, even while it was reducing its staff, it posted a job that read as follows: "will also be expected to initiate and develop a relationship with CTV". And therein you find the diminishing of voice.

9688 Further in our union's current bargaining with Global, the company is seeking the unfettered right to transfer work and people out of television stations and into print newsrooms or Internet operations. More voices gone.

9689 Let me do some self-editing here. I am moving to paragraph No. 36. Granted, the threat in the CanWest arena is more easily defined given the enormous number of markets where they own both a major station and the home-town newspaper. Here the potential for reduction in voice is just too much of a seduction for a corporation burdened by debt.

9690 It is cute of CanWest to raise as an example the stories of cross-media ownership, the story of how both news outlets in Vancouver did stories and shared resources on a story on school yard bullying.

9691 How can that be bad, we ask. Well, Commissioners, it is because it is bullying this time out, but on all too slippery slope this enormous power of influence can go from school yard bullies to attacking laws on the environment, immigration policy or, dare I say it, CRTC regulations. I will skip ahead here.

9692 All right, on 39. The corporations have further raised that under the banner of convergence this kind of shared sources and resources are competitively necessary. There is absolutely no evidence of this whatsoever. Indeed, many media outlets are now downsizing or getting out of the .com biz altogether.

9693 More probable is that major corporations have made major mistakes, as did almost the entire tech sector of the investment market. Indeed, in the U.S. the telcos, once heavy investors as is BCE, have almost completely abandoned their strategic alliances with Hollywood and have abdicated their position of making conventional media the cornerstone of their information projects.

9694 In Canada our fear is if allowed under the umbrella of convergence, the media giants will be given the green light to correct this investment strategy through the old-fashioned method of reducing costs, reducing service and, in the case of media, reducing voice. This cannot be allowed. We would suggest that shareholders can make their own decisions.

9695 I'm going to 43 now. Finally, by way of comments on the so-called statement of principles and practices. It is our view that these toothless documents are nothing short of bargaining tactics. The companies yell out "Whatever you do, do not make these a condition of licence" when of course these companies could quite easily live with them as a condition of licence.

9696 While the separation of such things as management structures and editorial boards are important, they are not at the heart of the threat. The danger point has been addressed by the Quebecor/TVA code. The threat is on the street where journalists work and from where diversity of voice is born.

9697 I will now go to our recommendations.

9698 In wrap-up on the issue of cross-media ownership, we encourage you to do three things: Adopt the Quebecor code across the country. It is needed desperately. The dangers before us are incremental. Let us draw the line now.

9699 We see absolutely no justification for having a stricter code for Quebec media than for the rest of Canada. In fact, there are inherent dangers in such a policy.

9700 The Quebecor code enshrines the status quo for a democratic society. The only addition we would add is to give more thought to the penalties for infractions. We would note that exceptions for polling alliances, et cetera, which was mentioned I think can easily be dealt with.

9701 Global has raised the spectre of a constitutional challenge on the basis of freedom of speech regarding this code. In our view, this is nothing short of an exercise in legal muscling, an attempt to chill your decision.

9702 The second thing we would urge is for you to go back to old principles to the raison d'être of the Broadcast Act. The language of the Act is clear and well formulated. It will serve as a guide both in terms of local programming and diversity of voice. Canadians speak through the principles espoused in this Act.

9703 The third point is that in this changing climate we urge you not to grant an extended licence. Two years is adequate, review is critical. We do have the government panel in front of us and the world is changing quickly. We cannot allow these mammoth and highly influential corporations to head down a long road which poses a threat to our culture and democracy.

9704 You know, Commissioners, there are now more media-watch organizations than ever before in this country. The public is growing increasingly leery of big media. We would ask you not to add to their reason for fear.

9705 Canadians are counting on you and we as representatives of thousands of Canadian journalists and media workers are counting on you as well. Good luck. It is a weighty decision.

9706 I apologize for the length of the presentation.

9707 THE CHAIRPERSON: Thank you, Mr. Murdock and Mr. Lewington.

9708 At the outset I wouldn't consider an interest group as an attempt to marginalize. I don't mean this as a criticism to you or anybody else, but I guess we kind of look at many if not most of the people who appear before us as an interest group. They are here to represent their interest, whether it's an association or whatever.

9709 We recognize that and we don't see it as an attempt, certainly on our part, to marginalize anybody.

9710 Why don't we take your last issue first, that being the cross-media ownership issue. Your view, if we come through to paragraph 47, and by the way I know you had to skip over paragraphs here in order to try and summarize, but this document will form part of the record so it's all on the record.

9711 I guess essentially for you then the bottom line for you then is to adopt the Quebecor code across the country. You have taken a look at the Quebecor code.

9712 MR. MURDOCK: Yes.

9713 THE CHAIRPERSON: You are satisfied then that that fundamentally addresses the issues that you are concerned.

9714 MR. MURDOCK: I think, as we know, we have a panel from the -- a parliamentary panel that will be dealing with a similar issue. I guess I will have an opportunity to look at it more in depth, but given that you have dealt with the issue in Quebec, we viewed that. We do not think that there should be two different codes for the country. We are satisfied that that at least maintains the status quo which is what we are after right now until the parliamentary committee can have a look at the issue.

9715 THE CHAIRPERSON: I don't know whether you had an opportunity to take a look at it or not, but the Friends recommended a change in this statement of principles that CTV and Global had put forward. Did you have an opportunity to look at that? It's on page 4 of their presentation where it says:

"We undertake to ensure that our television newsrooms will gather information independently from the newsrooms and newspapers in which we have a financial interest." (As read)

9716 Mr. Morrison said that in his view that was trying to capture a lot of the elements in sort of one statement. I guess he was somewhat critical of the lawyers who put the Quebecor statement together.

9717 Perhaps I can ask the question in this way. What is it about the difference between the statement of principles that we got from CTV and Global and the Quebecor code that from your point of view strikes to the heart of this issue and addresses the concerns that you have?

9718 MR. MURDOCK: Well, I think that the Quebecor code, even more than the Friends paragraph, clearly delineates in a physical way and in a professional way where the line is. It suggests look, we have a television newsroom, we have a newspaper newsroom, and we are not having sharing of resources, we are not having sharing up at the top of editorial boards or management structures.

9719 It is as the world is now in some ways -- they are saying and that's the way it should stay. They have been very careful to delineate that. Clearly the CTV and the Global principles have some suggestion about management structures, but there's not that clear kind of delineation and I don't see them in any way backing off what is their thrust here, which is to say that convergence of newsrooms working on the same stories together, as I said at a street level, is where they want to go.

9720 That is the very nature of diversity of voice. If we get rid of half the people covering these hearings, we have just got rid of a large part of diversity of voice. Those of you know here now if you have read the press clippings that they have been watching the same proceedings, but they get different spins on it.

9721 That's at a ground level. That's without -- never mind the editorial boards or the managements structures. I think that the Quebecor code does a very good job of trying to ensure that those so-called firewalls remain in place.

9722 THE CHAIRPERSON: I take it this is more than just a jobs issue for you.

9723 MR. MURDOCK: Oh, yes. I think there is some pressure as a result of markets and as a result of these purchases, et cetera, for the companies to find some cost savings. I am concerned about job loss.

9724 The job loss that we have seen in newsrooms over the past five or six years in both broadcast and print have been substantial. In many ways I sort of think can they do more. Well, I think they can do more, but it's not a question of job loss in terms of, you know, we lose dues-paying members and that's a kind of self-interest there.

9725 The job loss is really two things. One is the issue of diversity of voice and the other is the issue of opportunity. It's very well and nice for these people to come out and say "Boy, we have -- if we get these folks on the Internet or they want to work out on television and then do", that's what they want to do, what they want are jobs.

9726 These corporations have taken jobs out of those newsrooms and I think they will continue to do it. We are suggesting -- it has nothing to do with dues-paying memberships. We are interested in the crap. For instance, we are here speaking on behalf of journalists the way teachers speak on behalf teachers and what's going on in the classrooms, the way nurses and doctors talk about what's going on in their health care system.

9727 We are here talking about it in that style, not in the sense of more dues.

9728 THE CHAIRPERSON: I understand that. I wasn't really focusing on the dues to much. I mean your job is to represent the interests of the union and I understand that.

9729 If Mr. Fecan or Mr. Monty or Mr. Asper came to you and said "Listen, I absolutely guarantee there will be no job losses" you would still have a concern I assume.

9730 MR. MURDOCK: Absolutely.,

9731 THE CHAIRPERSON: Now, do you see no benefit at all in the opportunity of people in one medium to be able to work with people in the other medium or perhaps do work that would appear in both mediums. You don't see any benefit in this at all.

9732 MR. MURDOCK: First of all, I see no reason for it. Right now we have different organizations that have worked successfully in providing information to the Canadian public. It is only through ownership that now we are suggesting well let's have some cross-sharing of these news outlets.

9733 I don't see any reason for it. The newsrooms have operated well. As you know, they get good audiences and the papers are doing well, so I don't see any real reason for it.

9734 The idea of sharing resources happens now. To the degree which newspapers file to CP and then CP files to BN, they have access to these stories to that degree, but they don't have them like this. They have them over here at arm's length which is where they should be.

9735 To the extent I suppose that people might get a flare for another media, there might be some benefit, but the benefit comes at such a cost or such a possible cost to the information in a democratic society that I don't like to think about it, I guess.

9736 THE CHAIRPERSON: Mr. Lewington, did you want to add something on that?

9737 MR. LEWINGTON: Thank you.

9738 I was just going to say, you know, in the same way that Kirk LaPointe can make the transition from newspapers to broadcast, storytellers can go in either direction or go to Internet as well.

9739 If it's quality of work that you want and the broadcasters come here and say "Hey, it's quality of work that causes viewers to watch us and it's the quality of work that we want in our newsrooms", you can't be doing both all the time. It just doesn't work that way. It's not going to be quality if you are concerned about doing half a dozen things at the same time.

9740 THE CHAIRPERSON: What about the Internet? Is this a middle ground that provides an opportunity for both? It seems a lot of this has been generated around the Internet. What started a lot of this was the AOL/Time Warner thing which was largely focused on the Internet.

9741 MR. MURDOCK: Well, absolutely. I think some of it was generated by the Internet. I think there was a large hope, and it wasn't just by these corporations, by corporations across the world, who thought a new day has arrived and there's gold in that field. There doesn't appear to be gold in that field.

9742 The globeandmail.com, for instance, is incredibly successful and a very well put out Web site, but it generates, you know, very little income, so there's a problem for them as a corporation. The people that work there enjoy it. They enjoy working on the Internet to a large degree.

9743 I know a number of our members across the country that are working on Web sites and enjoy that kind of work. They enjoy the immediacy of it. For the most part they specialize in it.

9744 Now there are people that complain when they are drawn out of a newsroom and told "Look, just before you finish that story, can you come over here and file three paragraphs or a couple of lines whatever for our Internet". That becomes a problem for them.

9745 I think the big thing with the Internet is that it was seen as something that these companies had to do in order to compete. As it turns out, there is no money in them. If they find a way to make money, maybe we will all be better off, but at this point that they haven't.

9746 Now that they haven't, they have got this huge investment and some competitive reasons to continue it, but it's a drain, so you look for where else are we going to find the money. Well, we are going to find it through convergence.

9747 THE CHAIRPERSON: The issue in the code, would you draw any distinction between, let's say for example set aside the Toronto edition of the Globe, between the CTV-Globe and Mail situation where the Globe and Mail would be a national newspaper and the global situation where there are a lot of local newspapers involved in addition to the National Post?

9748 MR. MURDOCK: Well, clearly in some ways there is more danger in the local situations because, you know, the competition isn't there.

9749 But on the issue of principal and journalistic standards and even to some degree on shaping the agenda, the news agenda of the day it becomes more dangerous if we have that agenda similarly on CTV and at the Globe and Mail at the same time. Because the sweep of those is huge.

9750 So if we start sharing that agenda, let's suppose it's a political agenda for whatever reasons -- and I'm realizing I'm putting up threats here that are a bit extreme -- but let's suppose it's a political agenda, the sweep of that is enormous compared to perhaps a sweep of say in a municipal election in Hamilton or wherever.

9751 So I think there is as much concern if not perhaps more concern on the national level despite the fact that the market share for what particular city, say Toronto, is not as great. But on the national field the amount of influence is enormous.

9752 THE CHAIRPERSON: So it would be your view that we should have the Quebecor code applied in both instances here and in the Quebecor situation regardless of the national, local situation --

9753 MR. MURDOCK: Absolutely.

9754 THE CHAIRPERSON:  -- with respect to the newspapers or the television?

9755 MR. MURDOCK: Absolutely.

9756 THE CHAIRPERSON: Okay. By the way, it would appear that people are quite happy to criticize the Commission and its regulations regardless of who owns the newspaper.

9757 Switching back to your other main issue which is local television programming, your brief today was much more extensive than your original written brief and that is quite helpful to explain your position.

9758 I was struck by one of the comments, at the very bottom of the first page of your original written brief where you said -- where you were dealing with this issue of local reflection you said, "However, such growth notwithstanding," and you were talking about television programming, "attention to the independent producers has come at a cost to community and local programming."

9759 I was wondering whether you would expand on that a little bit?

9760 MR. LEWINGTON: I mean it's fairly obvious and it is quoted in some of your decisions as well. I mean when you tell the broadcasters that they need to take a certain priority focus on programming in peak viewing hours and you amplify the requirement for drama to be produced, which is all very good for the Canadian broadcasting system, something has got to give, and in the last number of years it was local programming.

9761 All the eggs in the basket went in one direction and the basket back at the station suffered. The result is that you find a list at the back of oral presentation today with dozens and dozens of local programs that aren't produced in the regions any more. That is a result, I guess, of the policy that has been developed by the CRTC and the response of the broadcasters to it.

9762 THE CHAIRPERSON: Again, that is the problem. I mean I think I said in the opening comments, I mean our job is just balancing these interests all the time. Every day that is what we do.

9763 MR. LEWINGTON: But you saw a need. You saw a need to develop priority programming in peak viewing hours and you encouraged the broadcasters to do it. They willingly accepted the challenge. The only thing that has changed from then to now is the emergence of these two very large companies.

9764 And when I say at the beginning of our oral presentation that we are somewhat surprised they are not proposing to do more, it is because they have the wherewithal to do more. That is the difficult part of your task because this interest group and all the others that have come before you in the last couple of days have said, "Hey, we all want a piece of them," and we all can't get a piece of them. That is obvious.

9765 THE CHAIRPERSON: That is what I wanted to get at is because you just said if you get them to do more peak programming in prime time and more from independent producers then something has got to give and what gave was local. If we go back to push more local, would you be worried something else is going to give?

9766 MR. LEWINGTON: Look at our recommendation, it's pretty incremental. We talked in terms of a new licence period for local programming to increase by two and a half hours a week. So it's effectively a half hour a day. Then we talk about as things go on, and, of course, if the bottom fell out of the market, so to speak, and there was some difficulty with these companies, they could come back to you for an adjustment. But we did talk about an incremental increase over time to increase local non-news programming to four hours after four years -- sorry, five hours after four years.

9767 THE CHAIRPERSON: If you were following last week, we almost had a commitment out of Mr. Noble. I don't know whether you saw that or not.

9768 MR. LEWINGTON: Global is proposing to do some very interesting things and we commend them for the proposals that they have in Hamilton for example and we were thrilled to hear the comments of Mr. O'Hara about the 90 per cent local news content in his local news shows. But at the same time we kind of are concerned about the statements that CTV makes about their being only interested really in local news programs and that is their local reflection. I am putting that aside obviously from the documentary projects that they have.

9769 THE CHAIRPERSON: Well, you focused a fair bit on "Live at 5." I don't know whether that was for my benefit or not. But is the kind of programming that used to be on "Live at 5," in your view, the sort of program that meets your test, your three point test here that was in paragraph 12?

9770 MR. LEWINGTON: Minimally it does. I mean it's local reflection or it's regional reflection. So it's good from that point of view. I suspect in terms of the resources that we talk about being put back into the community, I think that to some extent photo-journalists or video-journalists have been a bit of a mistake. It's a very thin way to cover community interests. It's a thin way to produce local programming and I think that in some cases should be reviewed.

9771 THE CHAIRPERSON: Well, that is a little bit of a different issue though and I circled that when you said "that has been a dismal failure."

9772 How would we as a regulator ever deal with that sort of issue, in sort of measuring the quality? I mean ATV has still cornered the market there in terms of viewers and how then do we, from a regulatory point of view, trade off efficiency against quality when apparently the viewers are there for the program. So how would we judge whether that sort of thing has been a dismal failure especially if the viewers are there.

9773 MR. MURDOCK: Yes, I think it is a difficult issue for us but we wanted to point it out that it didn't come sort of without cost and we think that the cost was quality. Now, whether or not the audience is still there, which apparently it is, is a bit of a problem, I guess, conceptually.

9774 But I think more importantly, and I am not out of the broadcast field myself, but as I sort of reviewed sort of as much as I possibly could over the past few months, one of the things that became clear to me is that there is an absence of local programming and maybe it is hard to nail down. When I saw some of these shows that had been made ten years ago and were now being claimed as local programming and there had been no sort of local programming in a real sense for ten years, I thought, how do people get away with this and what is the real commitment.

9775 I don't know to some degree how it is that you deal with that. All I do know is sort of as a Canadian looking at these issues it should be dealt with because clearly what I can read is the Broadcast Act, and I think that the Broadcast Act had something more in mind than shows which were done ten years ago being continually rebroadcast and nothing put in its place that was new.

9776 THE CHAIRPERSON: Yes, that again was a large -- a bit of a balancing act I guess in that because I was somewhat involved in working with the film community in Halifax and Nova Scotia a number of years ago and I remember the broadcasters dealing with some of them and, "Well, we will put your program on but you don't expect us to pay you for it. The exposure is sort of what you are going to get." The real struggle for a lot of the independent producers was to get to the network because that is where you could really make a business out of this thing.

9777 So there was this tension as well about even the local producers who wanted to make a business out of producing film and television product, wanted to get on the network, not just on the local stations. So again there is tension between those two.

9778 If I can focus on your specific recommendation on paragraph 22. When you say "at least a minimum of two and a half hours of original, contiguous, non-news, local reflection per week," and I guess your non-news would fit your definition of your three points in paragraph 12, what is the point you are trying to make when you talk about contiguous here?

9779 MR. LEWINGTON: Not interstitials. In other words, there might be reasons why Winnipeg and Regina and Saskatoon are doing interstitial programming and it counts. It counts for Canadian content and it is local in nature. But I guess we are somewhat concerned again about the quality issue and is it really a decent local reflection for people.

9780 The advertisers sat here yesterday and talked about people with commercial avoidance, and I don't have the figures on it, of course, and they probably do, but wouldn't part of that commercial avoidance be avoiding the interstitials. Will someone really tune into CKND all day to see their interstitial programming? I don't think so. They are going to be flipping between this, that and the other thing.

9781 THE CHAIRPERSON: Yes, I assumed when you said that you meant not interstitials because you had referred to that in your comments. But again I am struggling with from a regulatory point of view how would one deal with this. I mean we could write a regulation or an expectation or a condition of licence that would have contiguous in it but in terms of --

9782 MR. LEWINGTON: Good suggestion.

9783 THE CHAIRPERSON:  -- measurable, how would we deal with that?

9784 MR. LEWINGTON: Well, I mean you have to monitor it, right. If the broadcasters are going to come and talk about their wonderful interstitial programming, then I think it is a serious flag. I think it's a red flag that they are not doing more. They are doing specials.

9785 We heard about the Red River flood and this sort of thing going on and some unique types of programming going on in Winnipeg and so they are doing something. But hosted programming is one thing, one technique that broadcasters have that to try and grab retain audiences and it is very common in the children's genre. Since I don't live in Winnipeg or Regina or Saskatoon, I don't know how really successful it is in terms of the local programming that is going on there.

9786 But it seems to me that if you are going to reflect a community to itself and try and attract an audience to it, you are going to want to put something out of a more contiguous nature. Otherwise it is kind of like having a successful Canadian programming and moving it all over the schedule during prime time. Who is going to find it, and who is going to watch it and is anyone going to be loyal to it? Then the broadcaster will say, "Geez, we couldn't attract an audience. So it's down the dumper."

9787 THE CHAIRPERSON: So we can easily say what is not contiguous. I mean it is a little more difficult to say what it is.

9788 MR. LEWINGTON: Oh, what is contiguous?

9789 THE CHAIRPERSON: Contiguous, yes. I mean is it -- given the nature of television programming is it 30 minutes?

9790 MR. LEWINGTON: Well, if it is 30 minutes of local reflection or 28.50 with commercials, then it is 28.50 of local reflection.

9791 THE CHAIRPERSON: So you are talking minimum sort of half hour program.

9792 MR. LEWINGTON: Yes.

9793 THE CHAIRPERSON: All right. Well, I think that explains your brief and your written submission earlier. I thank you for your presentation.

9794 MR. MURDOCK: Thank you very much. I just want to say one word about that.

9795 I want to thank CPAC for broadcasting this. It's a real service to the Canadian public and I appreciate it.

9796 COMMISSIONER WYLIE: I know all the insomniacs in town now.

--- Laughter / Rires

9797 THE CHAIRPERSON: Before you leave, don't go. Commissioner Cardozo had indicated to me he had a question. I apologize.

9798 COMMISSIONER CARDOZO: I just wanted to ask you about how your members feel about working in a consolidated world. The applicants had indicated to us time and again that they feel that all the journalists in print or broadcast are fiercely independent thinkers, are professional and I think you would probably agree with that too.

9799 So is the issue then that two voices are better than one because you might get one journalist covering a particular story, or is there any effect on the independence of journalists in a consolidated world?

9800 MR. MURDOCK: Well, there can certainly be -- there are certainly dangers, whether it is one, two, three or 20 outlets in terms of interference from ownership. But if we have one through 20, perhaps we have one or two that are interfering. But if we only have one and that person or persons interfered, we have got a real problem in terms of information getting to a democratic society.

9801 My sense is that yes, journalists are independent and as one of the corporate spokespeople said, they would be the first to squawk. I think I mentioned in the brief, when they have squawked they have tended to be penalized for it.

9802 I think there are concerns, certainly coming from the membership about this now shared ownership. I haven't had anybody come up to me or those who sort of through the stream and say, "Boy, isn't this delightful. We are going to be able to appear in front of a camera now and do all these wonderful things." It is just not happening, particularly at the major dailies and at the major broadcasters.

9803 These people are fiercely independent and enjoy doing their particular craft very well. They don't want to take on any more. They want to do what they do well and that is why, as I say, papers like the Globe and Mail and a variety of others are good news outlets.

9804 COMMISSIONER CARDOZO: So is the converged reporter then not going to -- I gather from what you have said -- is not going to have time to do a proper story. I think you were talking about reflective pieces in the Globe and Mail. Is that the kind of thing that you are most worried about that they will be on the run and not be able to reflective pieces of journalism?

9805 MR. MURDOCK: Well, two things. One is that yes, there are people who are certainly concerned that they will be on the run and have to sort of get this story finished and then appear or file for television or file for the net or whatever. That is going on now. Those concerns are going on now.

9806 But the other concern is the concern for the craft. Again I sort of -- the comparison is to the health-care system. People are concerned that if there is direction from a paper or from a broadcaster, that now what we have is the direction from one person and one media outlet, one corporation. It will come on the street. It won't -- it might emanate and sort of filter down through editorial boards, et cetera, but what you end up is an erosion of diversity of voice. That is of concern. That is a professional concern that journalists have.

9807 COMMISSIONER CARDOZO: Do journalists, who work within these particular organizations, have the abilities they had before to question the issue of consolidation? Is there an open debate? Can they write or speak about or are they comfortable discussing or debating the issue of consolidation?

9808 MR. MURDOCK: I guess there is some spirit of debate. But as we have had this mass concentration of ownership, I firmly believe that people are more worried, even perhaps silent about speaking up against the employers they work for because there are only one or two big ones left in the country, that if they run afoul of them, they are in deep trouble in terms of their working lives.

9809 So there isn't this kind of -- I don't -- I mean I'm not suggesting in some ways that people are cowering in closets or anything. They aren't. But I think there is certainly knowledge about what are the public interests or what are the corporate interests of the companies they work for. Absolutely. There is some concern about that.

9810 COMMISSIONER CARDOZO: But at this point you haven't got any actual cases you could cite where that it is of more concern about possibly that happening in the future?

9811 MR. LEWINGTON: Well, there has always been concerns in newsrooms about interference from above. I myself was a news director in a small market television station and there were pressures that came down through the vice president or manager of news about covering this story or that story because the sales department had an angle on a sale. I mean stuff like this was discussed.

9812 It might not be a topic in the Global newsroom in Toronto or it might not be a topic in the CFTO newsroom in Toronto, perhaps not. But people are more readily interested in discussing these issues with their union than they are with their employer. So we are likely to hear about these concerns and I think that there are concerns about what is coming and that would be a reduction in voice and diversity of voice.

9813 MR. MURDOCK: Let me just add, clearly the largest example of this was voiced by the people in the newsroom at the Calgary Herald in a very nasty and long strike that ended badly for people. But the key issue in that strike was editorial integrity. Certainly that is what they felt brought them to the union and that is what they were concerned about was the issue of the craft of journalism.

9814 COMMISSIONER CARDOZO: That was under the previous owner of the Calgary Herald?

9815 MR. MURDOCK: Indeed it was under the previous owner and it alarmed me somewhat to hear Mr. Asper suggest that editorial policies were not going to change from the previous owner.

9816 COMMISSIONER CARDOZO: That covers my questions. Thank you.

9817 THE CHAIRPERSON: Well, thank you in coming and expressing your interests here today.

9818 MR. MURDOCK: Thank you very much.

9819 THE CHAIRPERSON: Mr. Secretary.

9820 MR. CUSSONS: Thank you, Mr. Chairman.

9821 Our next intervention will be presented by the National Federation of the Blind.

9822 THE CHAIRPERSON: Good afternoon. My name is David Colville. There are five of us sitting across the table in front of you, straight in front of you, I'm in the centre. With me is Commissioner Cindy Grauer and Andrew Cardozo on my right, your left and on my left, your right, is Vice-Chair Andrée Wylie and Commissioner Joan Pennefather. Please proceed when you are ready.

INTERVENTION / INTERVENTION

9823 MS. LAMBERT: Is it on? Yes.

9824 Thank you, Mr. Chairman, and ladies and gentlemen of the Commission.

9825 I would like to just correct one small error at the moment in that the name of our organization is the National Federation of the Blind Advocates for Equality and that "Advocates for Equality" is extremely important because that distinguishes us as being our Canadian organization and not the American one. For us that is very important.

9826 My name is Irene Lambert. I am a member of the board of directors of NFBAE. I have with me another member of NFBAE, Allen Dean and two friends, Diane McLeod and Rick McLeod who were the first two people to ever let me know how great descriptive voice services was on the television.

9827 The NFBAE, as I said, is a Canadian organization. It's national. Our members can be found across the breadth and width of our country. Our main focus at the moment in advocating for equality is access to information. We have submitted a number of briefs to the CRTC advocating for better access to information that we are not able to get as blind people from the television screen. Today, of course, we are here to discuss the descriptive voice services or audio description.

9828 Just to sort of set the scene, I know that you have been told last week, because I watched you every day last week, as long as I possibly could, that there are now over three million people in Canada with diagnosed vision loss that is uncorrectable. This means they either have sight that is low vision or right up to total blindness. These people are found in all corners of our country.

9829 Blindness is no respecter of persons, nor does it consider geography or age.

9830 Because blindness does not respect any of these factors, our members and other blind people because obviously they are not all members of our organization come from every culture, they speak almost every language you can find in Canada, they are of any race, any colour and they also are of any age.

9831 Now, the facts are today that seniors are experiencing the most vision loss of any other age group in Canada and the U.S. Their numbers are growing by 10 per cent year and the number of seniors with uncorrectable sight loss is twice the amount the number of all the other age groups put together, meaning children, teens and adults.

9832 Like any other cross-section of our society in Canada, our TV choices and our likes, our dislikes, our tastes in television are not uni-dimensional. They are as diverse as our society is. Our watching habits are probably very much like the watching habits of most any other group in Canada, any other people in Canada.

9833 There are those of us who will be sitting watching TV with our families, with our children, with our parents. There are some of us who like to watch sports programs with our friends or art programs or music programs. There are many of us who also live alone. Even though we control the remote, which is an advantage I must say, we watch television alone and we have no input from friends or family to tell us what is on that scene.

9834 I would ask you sometimes when you are watching TV to just close your eyes, especially during an action scene, and when it's over, try and guess what happened. It's not easy these days. But there's one common thread that those of us have who are all visually impaired, blind, deaf-blind, and that is that all of us, no matter how much sight we still have, we all have difficulty, we all are frustrated with watching television these days. We all are hungry for better access to that TV screen.

9835 Now, if this means descriptive voice, we are not unmindful at NFBAE that the technology is changing rapidly. The technology is changing rapidly. Technology is expensive. We appreciate the cost for implementing DVS. We know that it's taking time.

9836 After watching this Commission all last week and listening to the testimonies of CTV and Global, I was so ecstatic when I heard CTV had a plan and when Global came to the mike and said "Gee, I didn't realize there were so many viewers with vision problems", but the next day they came up with a plan that seemed to outdo the plan for CTV.

9837 Then I listened to MBRS talk about their alternative plan. I thought to myself "Oh, my goodness, I have got to rewrite my speech for CRTC. What else do we have to say?" In reflecting over the weekend, I thought perhaps there would be a couple of things that would be of interest to you as Commissioners.

9838 I notice that CTV and Global talk about evolving their plans for DVS over seven years. That's an awful long time. To think that our friends in the Maritimes are not going to get any descriptive voice at all for another six or seven years, that our friends in Ontario are going to have it all right from the first year and then Bob Trimbee from MBRS said "Why not wire the whole country in the first year and then everybody would have access to DVS?"

9839 Now, that's something that appeals to us of course. Why not? We would like DVS sooner rather than later. We would like all of our friends right across the country to have equal access to descriptive voice as well as those in Ontario. Even I from Montreal, I might be able to wait for the second year, but I would feel guilty watching DVS in Montreal knowing that the maritimes aren't going to get it for another five or six years.

9840 I noticed that Global talked about four hours a week. I noticed that CTV in their proposal to Commissioner Pennefather did not say the word "week", four hours a week. I presume that she meant four hours a week, but that was not at all clear to me.

9841 However, I do know that MBRS said they were willing to compromise with two hours of new television per week with two hours of repeats. I guess if you want our personal opinion from NFBAE is two hours seems like an awful, pitiful little access to a television program. How long is going to take at that rate to have mostly all the programming done in Canada?

9842 I heard CTV and Global talk about creative and innovative programming. I heard them talk about developmental programming. If they are going to make new programs for Canadians, I hope that they can have some greater awareness of what we as visually impaired people really need in the way of access to information.

9843 Sometimes it doesn't take a whole descriptive voice to tell us what's happening. If they would only put a few more words in the script, if the director would be a little more sensitive, if the producer knew that he had three million blind people or possibly whatever percentage of those three million would be watching that program -- I don't know. We are going to have to work to make these people more sensitive to what our needs are, like announcing the name of the play or the drama or the story or the film that's coming on.

9844 Very often today they don't even announce the name of the program coming on or the movie. During action scenes, of course that's where we depend on the descriptive voice, but sometimes, if you notice at the beginning of most dramas or documentaries, the dialogue doesn't start for several minutes into the film because they have got music, they have got announcements of credits, they have got sound effects.

9845 Okay, I learned for a good many years how to interpret or try to interpret music at the beginning of a film, what is trying to tell you, what are the sound effects telling you, but since I have been watching descriptive videos and descriptive movies, descriptive programs from PBS, I find I had never realized how much I really was missing.

9846 It is bringing to me as a totally blind person who has been blind for a number of years now a whole new dimension of emotional involvement, a whole new dimension of awareness of what is on that screen, a whole new appreciation for the plot that is to follow any particular movie. It makes a tremendous difference. It makes a tremendous difference to people watching with families where they don't have to ask and interrupt a program to find out what is happening.

9847 Talking about where do you start with DVS, whether it's two hours, four hours or whatever, I think that prime time from our point of view probably is a good idea, to start with prime time because there you have got younger and older people watching. You have got the number one rated programs in the country I hope. That would give us a sense of being included.

9848 We are not really interested in having some odd-ball documentary done in DVS if we can't sit and watch prime time important movies that appeal to most everybody else without it. We would say that probably prime time programs are the place to start to do DVS or audio description.

9849 The other side of that coin is that these programs that will carry the descriptive voice or the audio description will have to be promoted because right now as blind people, we don't have very much access to the TV program listings. There is no TV Times accessible to us. We cannot read the menus on the screen because they are all in print. We can't even use our menus because they aren't accessible in voice.

9850 The broadcasters are going to have to promote which programs are carrying DVS so that we will know, so that our friends will know, our families will know, so that it's accepted. It will become known and accepted by both the blind and sighted viewers.

9851 I would like to say something about captioning, that we are absolutely thrilled that close captioning, now open captioning, has been so successful. We are so happy for our hard of hearing friends. We are so delighted that a multipurpose use is being made of captioning, but we are utterly astounded that the networks are making so much profit on it. A million dollars profit on each network. That is just beyond comprehension.

9852 Naturally, when we are talking among ourselves and we are saying "Hmm, why can't they put some of that million excess profit into DVS?" I don't know if that's possible, but I hope CRTC will look into that.

9853 I think it was CTV that said when they looked into DVS that their research showed that perhaps funding DVS would take away from the funding for captioning. I find that very hard to accept. I think if they put as much effort into finding funding for DVS, it would be there also.

9854 I think just as captioning became a multipurpose valuable service to all viewers, I think there are unforeseen potentials for descriptive voice. We don't know what some of that potential is yet, but I think that it could be found.

9855 I would like to say in closing that NFBAE really believes that the CRTC is the place to carry forward the work of making television accessible to all Canadians. We like the policies you are putting forth. We are impressed with how in one week you can get commitments from major network broadcasters that takes us years to advocate for with seemingly very little success. We are so happy that the possibility of descriptive voice is on its way.

9856 I would like to say in closing a word to the broadcasters. I heard terms that I think they have a wonderful opportunity to have right now. They can build an audience, they can grow an audience and they can connect with many more Canadians with descriptive voice services.

9857 Thank you, Mr. Chairman.

9858 THE CHAIRPERSON: Thank you very much, Ms Lambert. Imagine what we could do if the hearing went on for another week. Maybe we should do that.

9859 I think you and your colleagues at MBRS and Mr. Clark have done a tremendous job over the past few weeks, indeed going back to Montreal at these hearings, to raise awareness of this particular issue.

9860 I would like to turn to Commissioner Pennefather just to perhaps pursue a few issues with you.

9861 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

9862 Good afternoon, Ms Lambert, Mr. Dean and Mr. and Mrs. McLeod. Ms Lambert, I am sitting slightly to your left.

9863 Thank you for your presentation -- to your right, I'm sorry, to my left, but you are right now. You are correct. You have obviously been listening very carefully and watching, as you said, over the last week. You have in fact picked up a great many of the details that we discussed with the broadcasters and the MBRS. You have covered a number of the questions that I had.

9864 I must say though in your thinking over the weekend, you did come up with some new ideas that I would like to explore with you just a little bit this afternoon.

9865 As a general comment first, please be assured never hesitate to come forward. There is always some new points of view and some new visions that we need to hear, both at this table and I'm sure amongst our colleagues in our room. This is a partnership amongst all of us to make change. Your participation is essential to that.

9866 You mentioned a couple of things that I found very interesting. One was the kinds of programming that you suggest are of interest. You did sort of towards the end of your presentation nail that down, if you will, at least for the start to the prime programming with a note to us that the principal audience perhaps we should be thinking about first are seniors simply by virtue of numbers in terms of visual impairment.

9867 Could you expand a little bit on the kinds of programming then within prime time that you are thinking about. Is it the dramatic programming which Mr. Eden mentioned to us the other day as sort of programs which everybody is talking about, the most popular shows, or is it the sports your mentioned? You mentioned musical, you mentioned other kinds of programming. Is it principally the dramatic programming that you are addressing here?

9868 MS LAMBERT: I guess my point would be that we need a choice just like everybody else needs a choice. I know descriptive voice is amenable, most amenable, to programs like dramas, documentaries and films, but I would hope that it would not be limited to those choices because we are so many in number and so diverse and have different tastes like everybody else does that it would not be limited to only one kind of programming.

9869 I don't know what seniors watch particularly because one of my problems is that having lived alone for several years now, I stopped watching a lot of TV. What happens when I do take an evening to sit and watch by myself, I end up watching specialty channels rather than conventional programs because I don't follow the sequences.

9870 I think that the important factor is a choice. I think that we don't just watch -- just because we are visually impaired we don't just watch one kind of programming.

9871 COMMISSIONER PENNEFATHER: Thank you. That's an important clarification and I really appreciate that.

9872 When we come to the next steps, here's where again you have made a comment this afternoon and you followed the process, the various plans presented to us. If I have understood you correctly, you are pleased that the costs matter is off the table, that we are going to proceed, that there is a plan for increasing availability of audio descriptive programming across the country.

9873 If we understand what you said this afternoon though, it would be to move faster along that road.

9874 MS LAMBERT: Yes.

9875 COMMISSIONER PENNEFATHER: Is that correct?

9876 MS LAMBERT: Yes.

9877 COMMISSIONER PENNEFATHER: As you can see that's a little bit why I have asked you as well what kind of programming is of interest so that in choosing what course we will take as we try to balance out all the different aspects of this, we have a real understanding of what your needs are.

9878 It's on that point -- have you a suggestion as to how as we go forward, in addition to the work that your organization, NFBAE and MBRS and others are doing, how we keep in touch with the ongoing needs of the community we are discussing so that we don't get also trapped into assuming we know what kind of programming you are interested in.

9879 Have you some suggestions about how that could happen?

9880 MS LAMBERT: Well, certainly NFBAE has a national office which is in Kelowna. We have a list serve and we have a Web site. We also have chapters across the country of our members in different provinces.

9881 That would be something that would be a great project for all of our members to undertake, whether at the chapter level or the Web site level. I mean this is something that we would enjoy doing.

9882 COMMISSIONER PENNEFATHER: Thank you for that.

9883 I have one other question. You noted the importance of -- perhaps I didn't understand, but when you were talking about development of programming, here you were talking about new programs.

9884 MS LAMBERT: Yes.

9885 COMMISSIONER PENNEFATHER: Over and above the audio description of those programs, were you also referring to bringing greater sensitivity to those who are creating the programs about the needs of those who are visually impaired? Is that what you meant?

9886 MS LAMBERT: Yes. That's what I meant, with the hope that with this new Canadian programming, which hopefully we all are going to look forward to, is that perhaps right at the origination of the production of these films or programs that greater sensitivity towards the needs of visually impaired people could be built right into the development of the program.

9887 COMMISSIONER PENNEFATHER: Thank you.

9888 So as a final thought, we understand you are pleased that we are proceeding with the plans to have audio description. Both networks have proposed a ramp-up of markets in programming available and with the understanding that MBRS have also made a comment on that, you do want to proceed a little faster.

9889 As we look at all the aspects of this at the Commission, we will certainly keep that in mind, but as a general statement, you are pleased that we are proceeding with what looks like an increasing availability of audio descriptive programming.

9890 MS LAMBERT: Very much so. We just are hungry for it. We are anxious to have it and the sooner the better.

9891 COMMISSIONER PENNEFATHER: Well, those are my questions. I don't know if you have any final statement you would like to make or answer a question I didn't ask, but please feel free to do so.

9892 MS LAMBERT: I think getting back to choice, I think this is important not to treat us as a singular or uni-dimensional kind of viewer. I had a friend which perhaps some of you know, Chris Stark in Ottawa, who said his wife likes to watch Formula One racing.

9893 I don't know how amenable that is to description, but I do know that watching hockey games or basketball games on TV is almost a useless endeavour for a totally blind person because the TV moderators or narrators seem to just think that everybody who is watching can see exactly what is happening and they only add colour. Well, maybe they could add some more facts or some more commentary on what is happening on the court or on the rink or on the circuit.

9894 I don't know how amenable it is from Bob Trimbee's point of view for doing it, but sports are something that blind people like too. We like -- there's practically no kind of programming that visually impaired or blind people don't like because there are so many of us and we all are living our lives with families, friends or whatever our status is.

9895 We hope that the descriptive voice won't just single out one aspect of the program agenda.

9896 I do thank you very much for hearing us.

9897 COMMISSIONER PENNEFATHER: Thank you very much.

9898 Thank you, Mr. Chairman.

9899 THE CHAIRPERSON: Thank you, Ms Lambert. We appreciate your enthusiasm here today.

9900 Mr. Secretary.

9901 MR. CUSSONS: Thank you, Mr. Chairman.

9902 We will now hear the intervention by Epitome Pictures Incorporated.

INTERVENTION / INTERVENTION

9903 MS SCHUYLER: Good afternoon and thank you for the opportunity to amplify our submission and to respond to some of the issues that have been raised during this hearing.

9904 I'm Linda Schuyler, the President of Epitome Pictures. Our corporate perspective is very much that of the small to medium size production company.

9905 We have a history of working on one project at a time, beginning nearly 20 years ago with the various permutations of the original "Degrassi" series, continuing with numerous documentaries, the dramatic "Liberty Street", the soap opera "Riverdale" and now returning to our children's programming arena with "Degrassi, The Next Generation", our new project and which starts shooting and has its Web creation is starting this summer.

9906 With me is Stephen Stone, who is my partner at Epitome Pictures and is Executive Producer of "Degrassi, The Next Generation". Stephen is also one of five lawyers in the entertain firm Stone, Abramovitch and acts as Executive Producer for some other projects which are not produced by Epitome, including Canada's music award show "The Juno Awards", and the lifestyle sitcom series "Room Service" and "Savoir Faire".

9907 Stephen.

9908 MR. STOHN: Chairman Colville, near the beginning of this hearing you asked the CTV panel about what the future held for converge in programming. The panel's answer to that question was I think the right one, namely that the future is so uncertain that the best plan is to have a structure and a team that can rapidly adapt to a changing environment. Of course, the technical and creative expertise and the physical systems with Bell Globemedia's different divisions should well provide that core ability to adapt.

9909 Today we would like to respond to your question, but our answer will be a little bit different because we do have a single view of what the future may hold for convergence in programming, particularly in dramatic programming.

9910 There is no telling today whether our view is the right view. Nevertheless we are investing hand in hand with both CTV and our brilliant partners, Raja and Roma Khanna and their team at Snap Media what to us is enormous time, energy and financing to pursue our vision into reality.

9911 If the future does unfold as we have forecast, then we will be in the fortunate position of being in the right place at the right time at a leading edge of convergence. If we are wrong, then we assure you that we will fail boldly and with all the power and vigour and strength we can muster.

9912 Our particular view is that the future will unfold with television and the Internet remaining essentially separate media. This could well sound odd because one oft repeated maxim, and indeed it was stated earlier today on another panel, is that one day soon the television and the computer will become one, that we will surf the Net and watch programs as well as performing other household functions via one huge box which is both a computer and a television set.

9913 We believe the contrary. We believe that television will remain an essentially linear experience while the computer Internet experience will remain essentially non-linear.

9914 In the context of dramatic programming, this means that storytelling on television will continue to have a beginning, middle and end whereas via the Internet storytelling will advance out of sequence or at least in different sequences, depending upon the surfer's choices.

9915 In saying this, we are not denying that television sets will become more intelligent and interactive. Interactive TV will have its niche as will TiVo and replay TV type systems to automatically and intelligently store and replay programming. We are not denying that computers can and will become destinations for some video screening of programming.

9916 What we are saying though is that we believe that the television, and we will soon be talking in the context of large screen, high definition television, will be the medium of choice to sit back and relax with your family and a box of popcorn to experience traditional linear storytelling while the computer will be the medium of choice to sit forward, 18 inches away from the screen and often physically alone to actively participate in storytelling experiences.

9917 MS SCHUYLER: "Degrassi, The Next Generation Project" has a traditional television component which is being produced in a traditional television way. As before, the new "Degrassi" will project an honest view of the students' experience promoting equality regardless of culture, economic, sex or lifestyle. The "Degrassi" mantra will remain to assure young people that as they grow and change, you are not alone.

9918 "Side by Side" however, with the traditional television component, will be the online component of "Degrassi, The Next Generation".

9919 We are going to be creating a Web site where viewers can register to become students at a virtual Degrassi school. In association with Snap Media, we have developed six different methods of online storytelling so that each viewer can enjoy the sensation of interacting with television characters as if the viewer and the characters were actually attending the same school together. Each viewer's experience of the story will be different as it will be pieced together like gossip running through the school corridors.

9920 Stories told by the two components, television and the Internet, will be related but not the same. Importantly though, they will be in timed relation. As the stories and the characters develop by the television component, the online stories will develop in tandem.

9921 This has required the development of a brand of new type of Web interface software so that different viewers watching the television show in different countries at different times can each enjoy the online experience synchronized to their own particular television experience, which is something we might like to talk about in a minute vis-à-vis the intervention that just came right before us.

9922 While the Web site is intended to be primarily fun and entertaining with clubs and games along with storytelling, one vital component of the online experience will be the guidance counsellor. We envision that it will be an easy and non-threatening way a viewer might navigate the "Degrassi" Web site, go down the hall to the guidance counsellor's office. There the viewer will have access to a variety of issues.

9923 I am pleased to say that tomorrow Stephen and I will be joining our Snap counterparts and representatives from many government departments, including Health Canada, HRDC, School Net Exchanges Canada, Department of Industry and Northern Affairs, Official Languages, the Cultural Human Resources Council and the Human Resources Partnership in an all day brainstorm retreat organized under the auspices of Heritage Canada.

9924 We are very hopeful that this will result in "Degrassi, The Next Generation" Web site becoming a powerful medium of communication for Canada's youth about the many important issues that they face today.

9925 MR. STOHN: The innovation which the "Degrassi" online component represents comes at a large financial cost. The production and maintenance of the Web site for its first season will be in excess of $1.2 million.

9926 We have been extremely fortunate to have CTV as a partner. They have provided some of the development funding for the Web site and will also be providing a cash investment towards part of the production and maintenance of the Web site.

9927 CTV is also committed to contribute very significant advertising and promotion of the Web site through it's various television channels. This involvement of CTV has not come just because it meets regulatory requirements for Canadian programming. While the television component will certainly form part of CTV's required priority programming, the Web site is over and above those regulatory requirements.

9928 To us, it is evident that CTV is partnering with us because Bill Mustos, Tecca Crosby, Ken Murphy, Susanne Boyce, Trina McQueen, Ivan Fecan, and the rest of the CTV team see in the new "Degrassi" project a way to pioneer new story telling techniques which might become a model for future programming while doing so in a way that has the chance to be of significant benefit to Canada's youth.

9929 In conclusion, our view of the future of dramatic programming projects is that the strengths of each of the television and internet media will be used to reveal and access a core story telling experience in timed relation between the two media. It is our hope that those viewers who otherwise might be tuning less to television and turning more to the Web for entertainment, might be encouraged through converged projects such as ours to return to television so that the ultimate aggregate audience is stronger and more committed than the sum of its parts.

9930 We are very grateful to all our partners, including the Canadian Television Fund and Telefilm Canada who have been early supporters of this new method of story telling, and there are many more partners as well. But today it is most appropriate to single out CTV and thank them for their commitment from the earliest stages of development. We thank you again for the opportunity to make this submission and would be happy to answer any questions you might have, whether now at this hearing or in the future as our new project becomes reality.

9931 THE CHAIRPERSON: Well, thank you, Ms Schuyler and Mr. Stohn. Interesting project. I will turn the questioning to Vice-Chair Wylie.

9932 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

9933 Your presentation is very clear and it's easy to see what it is you are trying to accomplish so I don't have too many questions.

9934 But we have heard a number of comments about just, I think, to the Energy Union about the difficulty of underwriting or getting revenues out of Web sites and so on. What is your view about when and how that may occur? Because I see now the money is basically subsidies. It is not going to -- and although I realize that getting revenue and financial viability from programming is a complex matter, it is a determined one that we know about. What do you foresee will happen with these Web site enhancements if revenue that is generated by them can't be achieved?

9935 MR. STOHN: You have gone right to a very core question, and it is one that we have dealt with from the very beginning. I don't know that we can answer you entirely today. I will certainly give you some indication of what our thoughts are. We may well have to wait until the future and we will see how accurate that comes out.

9936 First of all, I should make it clear since our programming is -- I mean we are aiming now at a core audience of 11 and 12 year olds. These are children. So we do not intend to have billboard advertising on the Web site. The entire premise of the Web site it's as though you were going to a school. Schools don't now have a predominance of banner Web site advertising on their sites and, indeed, banner advertising hasn't proven to be all that successful in any event.

9937 We do see a few different ways of sponsorship revenue. Corporate sponsorship and this is in the sense that we sometimes have in public television where, for example, our video club might be made possible thanks in part to a grant from, for example, the Sony Corporation, or we will have a media club that could be helped made possible by a grant from another sponsor.

9938 But internationally, "Degrassi" in the past has had some success on the television side. We will have to see whether the new project will have a similar degree of success. But we have had some ongoing discussions with a few broadcasters in other territories, notably the BBC in Britain and ABC in Australia, both of which you have very significant online components to their broadcast mandate.

9939 They have been quite intrigued by the possibility of adapting the "Degrassi" Web site to their own particular country. So that, for example, the guidance counsellor for British viewers could have a bent towards the National Health Organization in Britain rather than to Health Canada as it would in Canada, and similarly in Australia a similar type of adaptation of the Web site.

9940 So they have been intrigued by the synergies that the Web site can bring to their broadcast side and vice versa. That is something, of course, that CTV is very interested in and that is an indirect benefit of the synergies that go back and forth as the audience becomes more committed by having a richer experience.

9941 But what we have discussed with our investors on the television side is that a component, and we have come at the figure 10 per cent, of the licence revenues that in the past would have been thought as simply distribution revenues from export -- in effect export revenues, that a portion of that will be coming because of the enhanced experience which is provided by the Web site. For that reason we have proposed to our investors and they have accepted that 10 per cent of the foreign broadcast revenues will be ascribed to the Web experience and 90 per cent to the television experience.

9942 So this is a form of revenue that has never existed in the past. We are pioneering a bit in this and I think we are all just trying to figure out what the template might be. But it is a new form of revenue which recognizes the converged nature of this project.

9943 COMMISSIONER WYLIE: Would your answer be very different if this were not a children's program in terms of what you may expect this type of enhancement may bring? How will it break through the difficulty of underwriting it?

9944 MS SCHUYLER: I think one of the costs of our Web sites -- and I mean you are quite right. To work on this new innovation with the children's program is actually a very good place to start. Because first of all, the kids this age are fearless in all media and if your kids are anything like our 17 year old, they are working on the net, listening to TV, talking on the telephone, doing it all at once and seem to manage quite well, thank you very much.

9945 The big component though of what we are creating here, which is something very new, is the fact that as our story telling will unfold on the Web, it is in a timely release with what is happening on the television. This is actually something that the BBC and Australia, ABC, that Stephen mentioned about, are most interested in this development. That is actually a large chunk of what our budget is all about.

9946 We think this is going to have some ongoing other effects. As we were listening to the submission from the visually impaired, Stephen and I were saying to each other, if we could really perfect this notion of having a timely release, why couldn't you run an audio track on the internet at the same time that the television show is going, which would be at absolutely a really minimal cost because all you would virtually need is a reader for the script. So if somebody then was to turn on their computer, have it running simultaneous with the TV show, you might be able to hear a track.

9947 So what we feel, and as Stephen said at the beginning, we know that this is a noble experiment that could not have a noble conclusion, but Snap Media, who I think actually you have met Roma and Raja before, they are very certain that what they have got here is something that really can work. I think that the fact that we are launching it with a kid's show is probably the right place for it to start. If it can do, what we are hoping it can do, I am just thinking that the implications might be much greater.

9948 Because I know business models on the Web are very difficult, and you are quite right to ask that question. But maybe this is something that will have some other spin-off from application. We certainly hope so.

9949 MR. STOHN: If I could just add, your question related to the difference between a children's program and an adult program. We have a --

9950 COMMISSIONER WYLIE: The reason I was raising that was you were saying there were limitations for the generation of money because it is a child's program.

9951 MR. STOHN: Yes, and just to address that, there is both a direct and an indirect limitation. We are very reticent to be data mining our -- the surfers who come to our site. Really the only information we want from them are their e-mail address to make sure that things are set up properly, and also where they are watching the television program so that we can ensure that their experience is in timed relation.

9952 In an adult program, let's say it was a "DaVinci's Inquest," and there was a similar set-up, two things would happen. First of all, we would not have the reticence to advertising on the Web site and direct advertising that we do have because children are involved. Secondly, we would not have the reticence to data mining information about the surfers and that information in itself has a strong value to the advertisers. It tends to build on itself and have a very strong value.

9953 COMMISSIONER WYLIE: That is very good. The only thing that concerns me is my 12-year-old granddaughter going to the internet for advice rather than phoning me.

--- Laughter / Rires

9954 COMMISSIONER WYLIE: "The Next Generation" will be shot on HDTV? The format, if I recall, you were equipped for "Riverdale," but what does it mean for this program?

9955 MR. STOHN: This is an interesting debate which will be going on over the next two weeks. With "Riverdale" we were using digital cameras but not high definition cameras. Whether we shoot in high definition, which is something we have been looking at over the past year and a half and different parts of the team have different views, or definitely we would shoot in super 16mm, not ordinary 16, so that we would end up in a 16x9 picture, the so-called "letterbox" format. Because that at the very least is going to be the format in the future for a show that we hope has a long shelf life.

9956 We may well -- we have budgeted to shoot in high definition and it is a question now of whether we feel we can get the message across best this year in high definition or in super 16.

9957 COMMISSIONER WYLIE: Thank you very much, and thank you for sharing your experiences or at least your projects or your vision for "Degrassi: Next Generation."

9958 Thank you, Mr. Chairman.

9959 THE CHAIRPERSON: Commissioner Pennefather.

9960 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

9961 Don't go yet. Just that title, "Next Generation," got to me. As you know, I'm a bit of a Trekkie. So you caught my attention.

9962 But you caught it for another reason actually and just to follow-up on getting an understanding of the two types of programming, the virtual school, is it a real school or is it just with the characters who appear in the show and you can chat with them? When you first look at it, you would expect that maybe kids would stay home and go to the virtual school.

9963 MS SCHUYLER: No, that is not our intention. The idea is that the art direction and design of the virtual school on the Web will be that of the television show.

9964 So the conceit is that our young viewers can sign up and become a student at "Degrassi." They will be assigned their own locker, which in turn will become their home page. There will be then in the virtual school of Degrassi -- halls of Degrassi will be the characters from the show as well as all these other people who have joined and have become members of the virtual school. They will be assigned home rooms. They will be joining clubs and then there are different ways that the characters from the show will interact from them in the Web experience.

9965 But it is no. If they tell you they are staying home and attending the virtual "Degrassi," this is not a good excuse.

9966 COMMISSIONER PENNEFATHER: I won't go on because it is a very interesting discussion to have, but in effect what you are describing virtually is perhaps a school experience which is maybe more pleasant than some of the experiences kids are having at the concrete school these days. It will be interesting to see the impact on going to school in the two different worlds: their real world, their television world and their internet world.

9967 MS SCHUYLER: Well, we like to think about it that what we are building is a "Degrassi" community whereby they have access to characters that we will see in the traditional manner on the television screen. Then they will have the opportunity in the virtual school to interact with each other, with the characters.

9968 There has been a lot of discussion, as you can well imagine, about how we deal with issues of policing and censorship. We are working with the media awareness network here in Ottawa who have been terrific in terms of helping us with some of these issues. There is many, many issues and we are very mindful of this going in. But anyway, we could talk forever about it. Now, is not the place.

9969 COMMISSIONER PENNEFATHER: Thank you. It is a bit of my Film Board de formation slipping in here. So thank you.

9970 THE CHAIRPERSON: Thank you, Commissioner Pennefather. It sounds mind boggling to me. I'm going to stick to Formula 1 Racing like Ms Lambert. Thank you very much.

9971 Mr. Secretary.

9972 MR. CUSSONS: Thank you, Mr. Chairman.

9973 Our next intervenor from Carleton University, Mr. Christopher Dornan.

9974 THE CHAIRPERSON: Good afternoon, Mr. Dornan.

INTERVENTION / INTERVENTION

9975 MR. DORNAN: Good afternoon. Thank you very much for having me. I know you have had a long day so I will try to be succinct in my remarks.

9976 Newspapers are not regulated by the CRTC. I can't help but wonder what it would be like if they were, if they had to apply for licences to operate, if they had to make promises of performance in terms of content and how much they planned to spend on what aspect of their affairs, if their ownership and management structures were subject to detailed review.

9977 So if you can imagine for a moment that Conrad Black would have had to seek the approval of a state regulatory agency before being permitted to launch the National Post in 1998. Imagine the sort of reception he would have received had he been forthright about his intentions. The new paper would give robust editorial voice to a brand of conservatism Mr. Black found regrettably absent in the national media discourse. It would be launched on the back of the existing Southam dailies whose newsrooms, advertising, marketing, distribution mechanisms would support the new national venture.

9978 Surely a responsible agency of the state would have sought guarantees of editorial diversity in the paper. It would have wanted assurances that the local Southam dailies would not suffer as a consequence. It would have worried aloud that the new paper would merely increase the concentration of media ownership, providing a single proprietor with yet another means of public address.

9979 Then, I suspect, it would have granted the licence anyway. Because in the end, Mr. Black would have been promising to invest in the Canadian newspaper industry. He would have been creating jobs and invigorating competition. Even if you are no fan of the National Post, it would be difficult to deny that it has enlivened journalism and political discourse in this country.

9980 My point is not to in any diminish the serious and necessary work that this Commission performs. It is my opinion that the Canadian private sector media have never been more vital, more healthy, more plentiful and more varied than they are today and that that is due in no small part to the diligence of this Commission.

9981 My point, rather, is that whatever the conditions the Commission may attach to the applications of CTV and CanWest Global, they should not necessarily restrict either company's latitude to coordinate the efforts of its own constituent elements when it is clearly in the public interest to do so, even, and especially in ways that we today cannot anticipate.

9982 Now, my appearance before the Commission was prompted by Quebecor tabling its proposed code of conduct, a document that apparently would prohibit its own employees from even talking to one another about their jobs. Sort of a corporate official secrets act designed to compartmentalize the various holdings of a multi-media company.

9983 This strikes me as a misguided impulse. But if Quebecor wants to fashion such a code for itself, who am I to object.

9984 However, I would not want what Quebecor proposes to become a model for the governance of the other multi-media enterprises that are emerging in this country. So just to put this into perspective, let me read something into the record. This is taken from the Cleseau(ph) lecture which was delivered in November last year at the University of Western Ontario by Andy McFarlane who was the founding Dean of Western's Graduate School of Journalism on the occasion of the school's 25th anniversary.

9985 Andy McFarlane's previous career had been as the managing editor of the Toronto Telegram, the feisty and ultimately doomed city broad sheet that was owned by John Bassett, who also owned CFTO, the dominant private TV affiliate in the Toronto market.

9986 Now, the Telegram, according to McFarlane, outperformed the Toronto Star, its major competition in every respect except the two that mattered. The Star had the bigger circulation because it had the larger and more lucrative classified ad section. It had the bigger ad section because it had the larger circulation.

9987 So keenly aware that this plainly could not go on indefinitely, the Telegram beavered away at schemes that might give it market advantage over the Star. So in 1970, 31 years ago, Andy McFarlane was given the title, Director of Product Research and Development at the Toronto Telegram and made part of a team that was mandated to think creatively about the future of the newspaper.

9988 On this basis he makes, sort of tongue in cheek, but nonetheless I should say, legitimate claim to be a visionary of convergence. This is his recollection of what happened. I will read a portion of the lecture.

"The first thing we proposed at the Telegram was integration of functions between TV and print. We felt print was the best medium for explanation, features, in-depth examinations and so forth. TV was a better medium for breaking news but needed help explaining it. So we wanted Bassett to interconnect the newspaper and television news and ultimately the people who produced it, so that, for instance, when CFTO broke a news story, the item would point people to a detailed analysis of the situation in the next day's Tele. Similarly, if we produced a take out on say a dangerous situation in aircraft handling at Toronto International, we would point to and provide background material for discussion of the issue by the experts and others in that night's TV newscast.

It was a very modest proposal ..." (As read)

This is still McFarlane speaking:

"... but it didn't get off the ground or on the air because of Bassett's fear that cross-referencing his two media outlets would jeopardize his TV license. Bassett ..." (As read)

McFarlane says:

"... was so sensitive about even a whiff of media monopoly that he hermetically sealed each enterprise from the other to the detriment of both and the ultimate demise of one." (As read)

9989 Now, myself, and this is me speaking now, I doubt that the inability to hot link CFTO and the Toronto Telegram back in 1970 was a factor that led to the paper's demise. Nonetheless, it was a really good idea and well ahead of its time. The fact that it was never tried -- the fact that it was precluded purely because of an anticipation that the regulatory agency would have disapproved, is in hindsight, most unfortunate.

9990 By the way, if anybody thinks the outcome of convergence is going to be single reporters filing print stories and broadcast reports simultaneously, Andy McFarlane also has a salutary lesson from the past. If I can quote him once again. He remembers that:

"We did integrate poor Fred Nossil(ph), a wonderful reporter and correspondent who ran our Hong Kong bureau. Fred signed a contract to write news columns and newspaper and magazine features for the paper and our syndicate and to provide television coverage and specials for CFTO and the network and shortly thereafter had a nervous breakdown." (As read)

9991 So to conclude, CTV, the Globe and Mail and a variety of internet operations have come together under a common corporate marquee. The synergies these particular companies are all looking for will not come from requiring double duty of local reporters. That is just a self-defeating means of saving money in the short term. It is not a long-term plan to develop information markets that don't yet exist.

9992 The synergies will come in other ways, most likely in ways that will take even the people involved by surprise. But they will not come at all if the partners are prohibited from talking amongst themselves.

9993 I am happy to answer any questions if the Commission pleases.

9994 THE CHAIRPERSON: Well, thank you for your presentation, Mr. Dornan, and I will turn to Commissioner Pennefather.

9995 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

9996 Good afternoon.

9997 MR. DORNAN: Good afternoon.

9998 COMMISSIONER PENNEFATHER: Thank you for coming and thank you for contributing to this very important discussion.

9999 As I am sure you are aware, there many different opinions on both the advantages of synergies and the possible disadvantages and I'm sure you have been following the debate here and the debate that occurred -- has been occurring over some time and you quoted, in fact, some history, more recent history in terms of the discussions in the Province of Quebec and La Commission de la Culture's debate amongst journalists themselves about cross-media ownership and its impact.

10000 We will start by obviously agreeing with you that our business is the regulation of the broadcast media. But in this particular case we obviously have a situation in which as a result of cross-media ownership there is an impact, an impact which you see as positive, but others may see as negative.

10001 I am wondering, in fact, as a start if you could clarify for us if I have just been correct in what I have said, that you see only positive results of the synergies created by the cross-media ownership that we have before us in this particular case and that you see no negatives?

10002 MR. DORNAN: I wouldn't go that far. My position is that it really depends on the management of the companies by the proprietors concerned that conscientious, dutiful, corporate ownership devoted first and foremost to the public interest will manage these companies and the future to the greater collective benefit. Basically the history of the media in North America and the United States and Canada basically bears this out.

10003 I mean there are companies that are being extremely well managed that have conducted their work in the greater good. Some of these have been, for example, independently-owned newspapers, family-owned newspapers. Others have been multi-media conglomerates. There equally have been independently-owned or family-owned newspapers that have been absolutely dreadful and that have displayed very little commitment to the communities that they serve. By the same token, there have been very large media corporations with multiple holdings that have been quite exemplary in their professionalism and their devotion to public duty.

10004 So I wouldn't appear before the Commission and insist that only good can come from these corporate mergers. I think it has to do with the companies that own -- the corporations that own these companies and how they go about running them.

10005 COMMISSIONER PENNEFATHER: I was struck by a phrase in your written intervention, however, which -- I will go right to it.

"The advantages should not be foreclosed by arbitrary regulations drafted in the shadow of a phantom threat to editorial diversity." (As read)

10006 Does this mean that you see no threat at all to diversity of voice? Obviously that is the concern that we have been addressing to a great extent for the last week. I was struck by that that it would appear that you then say that -- and we understand the advantages of cost saving and the advantages that have been outlined by the applicants. But obviously others have concern about diversity of voices and you say that is a phantom threat or a non-existent threat.

10007 MR. DORNAN: If the companies concerned are given assurance that, as they have, that the constituent elements of what is now a multi-media company will indeed be run separately from one another, then I don't see where the threat to editorial diversity comes from.

10008 COMMISSIONER PENNEFATHER: Let's see how far that separation goes. I think in your letter you also say "I'm satisfied that the operations of Bell Globemedia," because your intervention addresses that, "must not and will not be integrated." So I took it from that you do have a concern and you have just articulated it that there must be some form of separation. As I understand it, you say those assurances should be at the management level.

10009 But as was discussed with other participants and just this afternoon with another intervenor, is that sufficient? Because it has been -- one could consider that where -- what you call "collaboration" becomes a risk to diversity of voices is at the street level, at the actual gathering of information level, where rather than have two voices working on a story of importance in our society, there would be one. There would be a collaboration which reaches the level of a single point of view or a single approach to that particular story, albeit many platforms. But several platforms, several opinions do not necessarily make I would assume.

10010 So do you not think that it is important as well to look at how the separation which you say and the integration which you say is not acceptable, why it should stop at the management level and why it should not go further to where the actual gathering of information, the gathering of stories and the articulation of opinion and fact occurs.

10011 MR. DORNAN: Well, I think if the separation is installed at the level of management of what are separate sort of sub-units of one multi-media company, then you are not going to get at ground level, a single individual sort of answerable to two corporate masters and having to, in the case of a journalist, file to CTV News and to the Globe and Mail newsroom. Because basically the Globe and Mail will have its own staff and resources and CTV will have its own staff and resources and CTV will have its own staff and resources.

10012 What troubles me about what Quebecor has placed on the table is that it would forestall even -- it would forestall forms of collaboration that would be manifestly in the public interest not to say in the interests of the companies themselves. It might prevent, as is perfectly common at the moment, from print journalists being interviewed in the form of double-enders about stories that they are covering interviewed by television networks.

10013 But if the -- I mean how one actually goes about assuring that there will not be the type of consolidation of roles and labour that say the Communication, Energy and Paperworkers Union worries about. It's probably not for me to say, but my suspicion is if you can install that level of separation at the management level, then the rest flows down.

10014 COMMISSIONER PENNEFATHER: Well, there were some that say that not necessarily so and practically speaking, one has to go further to assure that in fact what you say is important, that is two separate operations, assuming that supports diversity of voice, could be in trouble and let's not even look at the union comment, there are also others that said that could be challenged if not in danger by the fact that the nature of the synergies that we have heard are counter to that.

10015 The whole point of the synergy is a gathering together of forces, is a use of the same resources, not to the point of a ridiculous vision of one person being overburdened by too much and not being able to do it, but to the point of saying that it is more efficient in the eyes of synergies to have fewer voices available to bring the stories to Canadians and in fact that would be the result. There's the rub, I guess, is where the consolidation moves into an area of a challenge to diversity.

10016 Where would you put the bar? You seem to have left it at the management level. Don't you think that should reach further into the operations of broadcast?

10017 MR. DORNAN: I think this would be a difference of interpretation. It comes from a different reading of the impulse to look for these things.

10018 If new media of communication did not loom imminently on the horizon, if one was talking about precisely the situation 15 years ago and this was just a television company and a newspaper coming together, then presumably the synergies would indeed come at the level of sort of cost savings or cross-branding, but that would exhaust them.

10019 That is not my understanding of what has propelled these media mergers in the first place which is essentially that they are gathering their resources and their expertise for something that is perhaps -- perhaps it is not looming as quickly as companies like AOL/Time Warner. I imagine that it would. Nonetheless, it is coming.

10020 There will be new mechanisms of the delivery of information and entertainment. There will be new genres of content. Those new genres of content, those new information markets will come about as a result of groping our way forward and experimenting and capitalizing on the background and experience and the expertise of people who have worked in the traditionally separate older media of print, radio, television, magazines.

10021 But my major concern is that with the Quebecor code of conduct is that if applied universally across the country and across this industry, it would effectively foreclose on the possibility of that type of consultation, collaboration that will bring new forms of media into being.

10022 COMMISSIONER PENNEFATHER: Have you had a chance to look at what Friends of Canadian Broadcasting proposed as -- I'm sure you have seen the statement of principles tabled by CTV and Global and today we received a proposed amendment to that statement from the Friends of Canadian Broadcasting. Have you had a chance to look at that?

10023 MR. DORNAN: I haven't seen the proposed amendment. No.

10024 COMMISSIONER PENNEFATHER: Basically it would be to change the first clause of the statement and to substitute in its place:

"We undertake to ensure that our television newsrooms will gather information independently from the newsrooms of newspapers in which we have a financial interest." (As read)

10025 Do you have any comment?

10026 MR. DORNAN: Sure. What do you do with the Web operations then? I mean what do they mean by newspapers and television? Do they mean an employee of globeandmail.ca can't talk to the people who are providing content for CTV's online operation?

10027 If that's what they mean, then I fear it's short-sighted.

10028 COMMISSIONER PENNEFATHER: If I understand then, your principal concern with either that proposal or the Quebecor proposal is that to you it precludes collaboration amongst journalists on stories. Is that what your concern is?

10029 MR. DORNAN: That's part of it, yes. I mean others have cited such examples. Just to reiterate, I think there are occasions when it would be in the clear public interest for organizations such as the CBC and CTV to collaborate on major investigations and that once those journalistic investigations are concluded, to bring them to public attention with the greatest fanfare, to hit in the Globe and Mail and in, you know, an outlet such as CTV's "W-5".

10030 COMMISSIONER PENNEFATHER: I understand that and what you have described as examples would appear to be the occasional and well conceived collaborative project, but what we are talking about too, and I am sure you would agree, is the day to day operations of broadcasting news operation and how that will be influenced by the fact that what you are describing and what others have described is more than just a collaboration on certain projects, but what some consider to be the integration of the newsrooms themselves on a day to day basis.

10031 In that sense, that's the genesis of safeguards which would assure that there would be the ability of diversity to exist by virtue of a separation of those newsrooms down the line. It's not on the level of the occasional collaborative project. It's on the level of perhaps being concerned that the synergy that is termed "the same content in multi-platforms" means the same content.

10032 If that is the synergy that is pushing the idea of bringing together the newsrooms and bringing together the editorial activities of these organizations, we have to be concerned about the impact that will have obviously on the broadcasting component and what that will mean for the ability of that broadcasting component and operation across this country to provide variety of points of view and how it would impact on what you say is a phantom threat to editorial diversity.

10033 MR. DORNAN: Oh, no. I appreciate the complexity of the task that the Commission faces. You know, draw too restrictive constraints and, you know, at the peril of stifling what may in fact be a proliferation of editorial diversity in new forms of information delivered in new ways.

10034 On the other hand, sort of turn a blind eye to perhaps unscrupulous or unconscientious media proprietors who use the occasion to precisely downsize newsrooms and do a disservice to the country as a whole.

10035 I mean if I can use sort of CanWest Global as an example, not that they have asked me to, but there is -- CanWest Global now owns broad-sheet newspapers in not all, but many urban markets across the country. These newsrooms have resources far beyond what traditionally local television newsrooms have had in urban markets.

10036 It's conceivable that if one could allow these operations to collaborate in a way that is beneficial that for the local Global Television newscast, to be able to draw on the resources of a newsroom like the Edmonton Journal might indeed make for infinitely better local television news coverage in Edmonton, but if they are flatly prohibited from doing so, we may have actually squandered an opportunity.

10037 COMMISSIONER PENNEFATHER: I appreciate that and there certainly is another side to that double-edged sword that others have seen that the potential there is not the squandering of that opportunity, but the squandering perhaps of the diversity of opinion that could exist in an operation that remained distinct, despite the force of the synergies that you have proposed.

10038 That's I think a lot of the reason why one has to take some concern, the size of the force, the future as we go forward and the pressure that will be on the players to in fact bring more and more of these activities together as opposed to the separate operations.

10039 One final point then just so I'm clear. Beyond your suggestion that there be structural separation at the management level, do you not think that although you don't seem to want to go as far as the Quebecor code that there should be other safeguards, particularly considering the nature of the world ahead as you have just described it. There should be other safeguards to assure the editorial diversity within the broadcast undertaking.

10040 MR. DORNAN: Let me put it this way. I think whatever such safeguards might be envisaged, one has to be careful that they will not have unanticipated effects that -- how on earth one does that, you are in a much better position to know than I -- but as I say, one would not want to burden this industry with strictures that would turn out to be in the long run counterproductive.

10041 COMMISSIONER PENNEFATHER: Thank you. Those are my questions.

10042 Thank you, Mr. Chairman.

10043 THE CHAIRPERSON: Thank you. Vice-Chair Wylie.

10044 COMMISSIONER WYLIE: You realize, Mr. Doran, the code applicable to Quebecor has been in place for almost five years.

10045 MR. DORNAN: I didn't know that actually.

10046 COMMISSIONER WYLIE: It was first imposed in 1996 or offered by them as a -- in fact drafted by them as what they saw would be the way to achieve or alleviate the concerns that we expressed.

10047 I only have one question. Both you and I guess a colleague I guess at the University of British Columbia use the or emphasize the value and the desirability and the availability of forms of communication as something that we should take into consideration.

10048 You have said today, you have used forms of consideration -- of communication and the desirability of achieving the delivery of information in new ways. Is there not a danger that one can confuse the form, the platform, whatever with the content, that you can have the same content delivered in a reformatted or repurposed way to fit a different platform?

10049 How does that answer the concern of diversity by virtue of consolidation of resources fairly low at the pyramid so that these are the ingredients, the news, the information, the project, the investigation, the research that you have and then you format it in a different way.

10050 We know enough about broadcasting to know it's not like newspapers and then the newspaper can put it on a Web, so can the television, but if they have all gathered the same thing, addressed the same thing, researched the same thing, investigated the same thing, it will be the same thing in a different form with regard to content.

10051 MR. DORNAN: The development of the Internet is still the new means and mechanisms of communication that will come from it. It is still very much in a nascent stage, so it's very difficult to imagine how it's going to develop.

10052 Certainly at the earlier stages when newspapers, for example, moved on line in the mid-1990s and much faster than the broadcasters interestingly enough, but when they did move online they did exactly what you are describing. As you know, it was known as "shovelware". Basically it was just shovelling the same content from the newspaper into an online presentation.

10053 One might argue that there were nonetheless advantages to that because I could from my work station in my office flick to a newspaper and get news. I didn't actually have to go out and purchase a newspaper, so there is a sort of advantage to the news consumer. Nonetheless, the content is not new.

10054 However, that is, as I say, a very early stage in the development of the medium or media that are coming. All new media develop new forms, new genres of content that are only dimly anticipated, if at all, at the earliest stages of the development of those media.

10055 The same will happen in the multi-media future. We are going to get new genres of content, new means of delivery and indeed, and this is the real trick which has formed part of the discussion this afternoon, we will get new ways of paying for it that they haven't figure out yet.

10056 There will be various sort of inventive schemes to do so, but it will come. So what in my view -- I am trying to sort of step back and look at the bigger picture -- what is propelling all this is not a short term or short sighted attempt to leech more money, more profits out of the same content. I think what is at stake is much bigger than that.

10057 COMMISSIONER WYLIE: Thank you, Mr. Chairman.

10058 THE CHAIRPERSON: Mr. Dornan, I may have missed this in the discussion with Commissioner Pennefather, what is your view on the code or the statement of principles that has been put forward by CTV and Global?

10059 MR. DORNAN: I think it asserts what I would hope that they would assert, which is essentially give assurances, not only to the Commission, but to the country that they are not going to collapse CTV and the Globe and Mail into a single operation and the same with CanWest Global. That they will keep them as separate but complimentary ventures within the same -- within, in this case, Bell Globemedia.

10060 THE CHAIRPERSON: So you would agree there could be a concern?

10061 MR. DORNAN: A concern about what?

10062 THE CHAIRPERSON: About that very collapsing. But this is granting an assurance it wouldn't happen.

10063 MR. DORNAN: Oh, yes. Yes. In my written submission I am quite clear about the fact that I think that type of overt collapsing of the two operations would be detrimental.

10064 THE CHAIRPERSON: Okay. Thank you very much. We appreciate your being here today.

10065 MR. DORNAN: You are welcome. Thank you.

10066 THE CHAIRPERSON: It's a very important issue.

10067 Mr. Secretary.

10068 MR. CUSSONS: Thank you, Mr. Chairman.

10069 We still have a number of interventions to consider but just one more for today, that being by CEP Local 614 - CFCF 12.

INTERVENTION / INTERVENTION

10070 MS LEA: Good evening, Commissioners.

10071 My name is Susan Lea and I'm President of CEP 614M, which represents approximately 140 employees at CFCF 12 in Montreal, and beside me is Doug Kelly who is Secretary/Treasurer of Local 614.

10072 First, Commissioners, let me say how delighted I am that our original reason for appearing before you has changed dramatically. We would like to take this opportunity to express our relief that after our languishing under trusteeship for almost two years, it now appears our long wait is over.

10073 In my written intervention I expressed the frustration of being owned by our competitor who had long term interest in CFCF 12. What I didn't express was the impact of going through this process four times in five years.

10074 This constant revolving door could have compromised CFCF dramatically and in some ways it did, as budgets, staff and local programming were slashed. Most of these cuts happened to CFCF 12 as they happened to local stations and communities across the country. Thankfully, the Commission is acknowledging this reality by expressing its concern over the lack of local reflection and local resources at this hearing.

10075 I am going to digress for a moment.

10076 Frankly, I was a bit frightened by the previous intervenor because he talked about a journalist having a nervous breakdown because he had to file for some many different stories and platforms and everyone laughed. But I have seen that reality. I see that reality daily and I know about burnout and I know about reporters and workers within the media wearing a whole bunch of different hats all at the same time, and I remember a few years ago people saying in some contract negotiations, "Oh, they are never going to ask you to do two things at the same time." Oh, they are going to ask you to do three things. That is reality and I had to say it. Now, I will go back.

10077 However, today, I would like to address you and our potential new owners with some positive news.

10078 Despite our experiences over the last few years, CFCF 12 remains Montreal's one to watch and as one Gazette reporter noted in an article which ran last week and I quote:

"Montrealers who watch TV, 900,000 anglos and allophones, plus enough bilingual viewers to push the market up toward 2,000,000 have been intensely loyal to Pulse, and that loyalty extends into prime time." (As read)

10079 CFCF 12 and her employees have also remained a constant supporter and promoter of many charitable groups and community service organizations.

10080 Commissioners, CFCF 12's Pulse News remains a market leader and is number one with a 60 per cent market share of our target audience. In light of the agreement CTV has made to buy CFCF 12, I was delighted to hear Ms McQueen express CTV's pride in being number one in news and public affairs across the country and their commitment to maintain and encourage that leadership role.

10081 I am only hopeful that CTV's commitment will translate into an infusion of support for and pride in CFCF 12, which has recently celebrated 40 years of service to Montrealers, and I hope you will enjoy this very brief video presentation which commemorates some of that 40 years of service.

--- Video presentation / Présentation vidéo

10082 MS LEA: Thank you, Commissioners, for giving me this opportunity.

10083 THE CHAIRPERSON: You are welcome and we wish you a Happy Birthday. I note there are probably more sellers than buyers in the room here. I just hope the sellers don't change their mind as a result.

10084 I know you have been here most of the time this proceeding has been going on and I know you came here with a different intention than you had today because you didn't know that --

10085 MS LEA: I came here with a good foot as well.

--- Laughter / Rires

10086 THE CHAIRPERSON: So we don't really have any questions. I guess we will follow up on this issue as we deal with the acquisition proceeding.

10087 MS LEA: Thank you very much.

10088 THE CHAIRPERSON: Thank you.

10089 So, Mr. Secretary, that concludes our work for the day.

10090 MR. CUSSONS: Yes, sir.

10091 THE CHAIRPERSON: We thank all the intervenors who appeared today. We had a good day and a thorough discussion of the issues.

10092 We will reconvene tomorrow morning at 08:30 where we will hear the remaining intervenors and after lunch tomorrow, we will hear the replies from CTV followed by Global.

10093 We will see you tomorrow at 08:30.