ARCHIVÉ - Transcript / Transcription - Gatineau, Quebec - 2002-05-08
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TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
APPLICATIONS FOR TELEVISION LICENCE RENEWALS
DEMANDES DE RENOUVELLEMENT DE LICENCES DE TÉLÉVISION
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Portage IV Portage IV
Outaouais Room Salle Outaouais
Gatineau, Quebec Gatineau (Québec)
May 8, 2002 Le 8 mai 2002
Volume 3
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 spoken by the participant at the public hearing. 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.
Canadian Radio-television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
APPLICATIONS FOR TELEVISION LICENCE RENEWALS
DEMANDES DE RENOUVELLEMENT DE LICENCES DE TÉLÉVISION
BEFORE / DEVANT:
Charles Dalfen Chairperson / Président
Andrée Wylie Commissioner / Conseillère
Cindy Grauer Commissioner / Conseillère
Andrew Cardozo Commissioner / Conseiller
Stuart Langford Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
William Howard Legal Counsel /
Leanne Bennett Conseillers juridiques
Michael McWhinney Hearing Coordinator /
Coordonnateur de l'audience
Pierre LeBel Secretary / Secrétaire
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Portage IV Portage IV
Outaouais Room Salle Outaouais
Gatineau, Quebec Gatineau (Québec)
May 8, 2002 Le 8 mai 2002
Volume 3
TABLE OF CONTENTS / TABLE DES MATIÈRES
PAGE / PARA
PHASE III
REPLY BY CHUM LIMITED / 700 / 4020
RÉPLIQUE PAR CHUM LIMITÉE
Application No. / No de demande 2001-1327-5
Application No. / No de demande 2001-1323-3
Application Nos. / Nos de demandes 2001-1326-7, 2001-1388-7
Application No. / No de demande 2001-3121-7
Application No. / No de demande 2001-3125-9
Application No. / No de demande 2001-3124-1
Application No. / No de demande 2001-3122-5
PHASE I
PRESENTATION BY TELELATINO NETWORK INC. / 729 / 4189
PRÉSENTATION PAR TELELATINO NETWORK INC.
Application No. / No de demande 2001-0226-0
PHASE II 870 / 5029
PHASE III
REPLY BY TELELATINO NETWORK INC. / 872 / 5049
RÉPLIQUE TELELATINO NETWORK INC.
PHASE I
PRESENTATION BY
CABLE PUBLIC AFFAIRS CHANNEL INC. (CPAC) /
PRÉSENTATION PAR
LA CHAÎNE D'AFFAIRES PUBLIQUE PAR CÂBLE INC. 876 / 5070
Application Nos. / Nos de demandes 2002-0127-8. 2002-0128-6
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1 Gatineau, Quebec / Gatineau (Québec) 2 --- Upon resuming on Wednesday, May 8, 2002 at 0930 / 3 L'audience reprend le mercredi 8 mai 2002 à 0930 4 4015 THE CHAIRPERSON: Order, please. À 5 l'ordre, s'il vous plaît. 6 4016 Mr. Secretary. 7 4017 MR. LEBEL: Thank you, Mr. Chairman. 8 4018 We have now reached Phase III of the 9 hearing of CHUM's application. During Phase III CHUM 10 will be asked to respond to all of the interventions 11 submitted on their application. 12 4019 Gentlemen and ladies, you have 13 10 minutes to reply. 14 REPLY / RÉPLIQUE 15 4020 MR. SWITZER: Mr. Chair, Members of 16 the Commission, for the record my name is Jay Switzer. 17 We have already filed written reply comments and 18 therefore our comments today will be brief. 19 4021 In response to the issue raised by 20 several intervenors about the issue of a major 21 multi-station group, we have discussed at length the 22 dilemma of balancing the Commission's Television Policy 23 of priority programming with the long-standing CHUM 24 goal of intensely local stations, particularly in the 25 case of CITY-TV.
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1 4022 You have heard about the fact that 2 funding agencies have not supported our distinctly 3 Canadian dramatic series proposals in large measure, we 4 believe, because of our lack of national reach. That 5 fact alone must support our view that we should not be 6 required to carry the same levels of priority 7 programming as the larger groups. 8 4023 In our discussion with Vice-Chair 9 Wylie, we discussed the quandary of being required to 10 offer eight hours of priority programming on CITY-TV at 11 the expense of our innovative local magazine shows. 12 These productions are precisely the type of programs 13 that help make CITY-TV the unique station it is. We 14 don't want to lose them. 15 4024 But even by the Commission's count, 16 CHUM is not a major multi-station group. Perhaps we 17 could suggest that in the case of CITY-TV we could 18 commit to the eight hours of priority programming, with 19 the stipulation that up to two hours per week of our 20 unique genre magazine shows would, for this purpose, 21 qualify as priority. 22 4025 Turning to the intervention of the 23 Directors Guild, we would like to make a few brief 24 points. 25 4026 First of all, we can see no reason to
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1 use this proceeding as an opportunity to re-argue 2 issues that were settled at the CKVU decision. As I 3 confirmed in discussion with Commissioner Grauer and 4 the Vice-Chair, we are currently working with staff to 5 arrange verifiable reporting procedures to ensure the 6 incrementality of the CKVU transfer benefits, a 7 procedure referred to in the transfer decision. 8 4027 We hope we have put to rest the DGC's 9 concern regarding finding a home for B.C. drama. Our 10 commitments are clear, $7.8 million in license fees for 11 B.C. independent producers. 12 4028 There is some concern that not all of 13 this programming is guaranteed exposure by CHUM in 14 Ontario. All programming produced through our feature 15 film initiative of $7 million will be seen across the 16 country, and in the case of Vancouver's other stories, 17 an amount of $800,000, we expect that at least some of 18 these programs will be of intense and specific local 19 interest and we do not feel we should automatically 20 reject proposals of interest to Vancouver simply 21 because may have no appeal in Toronto. That is not 22 what this initiative is about. 23 4029 Finally, we are asked to ensure that 24 at least 75 per cent of our priority programming comes 25 from independent producers.
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1 4030 As we have been discussing for the 2 past two days, CHUM stations are different. That is 3 precisely because, as the CFTPA pointed out, unlike the 4 major station groups, we produce some of our 5 programming in house. Prem Gill described how in 6 Vancouver we are developing the first in house 7 production team dedicated to multicultural and 8 aboriginal programming. Some of these programs may 9 well qualify as priority programming, and we cannot see 10 ourselves accepting a condition that could have the 11 effect of discouraging us from running this programming 12 that is most unique to us. 13 4031 We genuinely believe that our support 14 for the true independent production community is 15 frankly unparalleled. Moreover, as Diane Boehme 16 pointed out yesterday, 95 per cent of the projects we 17 actually supported over the license term came from 18 small and medium-sized producers. 19 4032 Letters of support from across the 20 country attest to this fact. Unfortunately many of the 21 producers who have supported us in this proceeding were 22 unable to be here. But two quick notes should 23 demonstrate this point. 24 4033 First, from Phil Jackson from 25 Danforth Studios in Toronto, and I quote:
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1 "We have found the CHUM 2 Television Group of Broadcasters 3 have been an important, 4 consistently relevant, positive 5 force in an otherwise cynical 6 and contrived marketplace..." 7 (As read) 8 4034 And I continue: 9 "...CHUM television is alone in 10 embracing, acquiring, buying, 11 and pre-buying, genuinely 12 independent Canadian product." 13 (As read) 14 4035 End quote. 15 4036 From Christine Haebler of Crescent 16 Entertainment in Vancouver, and again I quote: 17 "In our working with CKVU, 18 CITY-TV, we have found there 19 response unparalleled in 20 promptness and professionalism. 21 If they choose not to support a 22 project, their executives give 23 very relevant, respectful, 24 critical feedback which allows 25 us to re-think our approach. If
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1 they choose to support a 2 project, the response is equally 3 prompt, as is their financial 4 support. There is no comparison 5 to them in the Canadian market, 6 much less the Vancouver, B.C. 7 market." (As read) 8 4037 End quote. 9 4038 We are proud of both the 10 relationships we have developed and the films that have 11 resulted from our work with independent producers 12 across Canada. We value the input and advice we 13 received from Professor Lumb last night. Some of his 14 advice has already been reflected in our corporate plan 15 filed last week, and we thank him for continuing to 16 make us better broadcasters. 17 4039 We would also like to thank all of 18 the other local interveners who have supported these 19 applications, especially those who were able to be with 20 us here yesterday as well as many who were forced to 21 leave early. Many of these speakers came a great 22 distance to tell you there stories, and it is these 23 intervenors who reflect the diversity and commitment in 24 the communities we serve. 25 4040 Mr. Chair, that ends our oral reply.
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1 4041 THE CHAIRPERSON: Thank you 2 Mr. Switzer. 3 4042 I hope you won't mind a few 4 questions. 5 4043 I took your point on CKVU about 6 incrementality and sorting out the base with staff, as 7 you will eventually do, but I was wondering, on the 8 Directors Guild chart -- I don't know whether you have 9 their written intervention, Do you have it? 10 4044 MR. SWITZER: Just give us about five 11 seconds and we will pull it out. 12 4045 THE CHAIRPERSON: Sure. This is 13 page 12. 14 --- Pause 15 4046 MR. SWITZER: Please continue. 16 4047 THE CHAIRPERSON: The question is: 17 After all is said and done the way I am reading these 18 two charts is that what they are saying is that at the 19 time of the takeover application CKVU's projections 20 were filed to show that they would be doing a total of 21 some $7.75 million of drama, excluding benefits. If 22 you go to the bottom of that page, the current filing, 23 the current projections without benefits again, that 24 the combined categories of drama and comedy would 25 represent a total of $4.562 million of expenditures.
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1 4048 I guess I am asking the question they 2 asked: Where is the missing $3 million? 3 4049 MR. MILLER: Mr. Chair, the DGC's 4 analysis is wrong in two fundamental respects. 5 4050 First of all, as you will see the 6 charts on the left-hand side have different categories. 7 On the initial, they say "Category 2 to 5". On the 8 second they say Long Form 2b. They omitted all of our 9 2a to 5 categories in their revised analysis, which is 10 a sum total of $4,275,000 over the license term. 11 4051 The second failure on their analysis 12 is to take into account the fact that our first year 13 operation with CKVU is not a full year. As you know, 14 we only took possession of the station November 1st, 15 and so what we did in our financial is a full seven 16 year term which took it over to the following period. 17 4052 The third thing -- and this is I 18 think very important -- in all of our work with staff, 19 and in our filing in our CKVU transfer decision, it was 20 acknowledged that the historic baseline of CKVU was 21 completely irrelevant for the purposes of our 22 commitment to those categories. 23 4053 In other words, CKVU was a $70 24 million station and CanWest had allocated whatever 25 aspect of their priority programming to that station in
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1 accordance with its revenue. 2 4054 Under us we had projected on filing 3 that it is was a $27 million station and had an 4 appropriate allocation. It went down because things 5 were not the same, and we actually launched in the 6 Vancouver market is very different including now the 7 addition of a new ethnic service, to roughly 8 $24 million on filing and Friday we refiled at 9 $22 million. 10 4055 So we feel the only appropriate 11 measure of our commitment, which was our understanding 12 of how Commission staff felt we should go, was a 13 percentage of revenue base. So what we made sure is on 14 the percentage of revenue basis our base commitment to 15 those categories of programming remains consistent. 16 4056 THE CHAIRPERSON: So the answer to my 17 question is that in the drama category the new combined 18 totals of four five six two should be taken by the 19 Commission as your commitment, not withstanding the 20 earlier seven-fifty for the reasons you have explained? 21 4057 MR. MILLER: No. As I said, on the 22 drama side, if you want to isolate on drama, the 23 difference is twofold. 24 4058 First of all, again, we had never 25 assumed that there would be a fixed time of the base
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1 commitment by a specific revenue amount. We assumed it 2 would be calculated on the percentage of revenue basis. 3 4059 So what we are saying is, that number 4 that was there is now different on a percentage of 5 revenue basis. 6 4060 We will have to look at this again 7 with staff, we understand that. I'm sorry I am not 8 more prepared to fully go through the details because 9 we thought this was going to be handled in a different 10 process, but what we tried to do and tried to do on our 11 refiling on Friday is be consistent on our percentage 12 of revenue basis. 13 4061 THE CHAIRPERSON: I am just looking 14 for what your commitment is in drama and comedy, and 15 then I was going to ask you -- perhaps you could just 16 file these with us -- to split out that four five six 17 two between drama and comedy for the projected period, 18 as to what the Commission in assessing your application 19 can take as your projected expenditures on those two 20 categories. 21 4062 Then what I hear you saying is that 22 the $7,750,000 was from another time and another place 23 and that you, from the point of view of a commitment 24 going forward and excluding benefits, that isn't what 25 you are speaking of, for the reasons you have
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1 explained. 2 4063 MR. MILLER: The final difference is, 3 of course, these numbers were based on our initial 4 filings and we refiled on Friday. 5 4064 So what we will get for you in the 6 next short period is those revised break downs, as you 7 have requested. 8 4065 THE CHAIRPERSON: Thank you. 9 4066 I wanted to also ask you about your 10 Windsor proposal where you are proposing what you refer 11 to, I think, as a two-year condition of license calling 12 for 1.5 hours per week of separate local programming 13 for CKNX and seven hours for CHWI. Condition of 14 license was what you meant? 15 4067 MR. MILLER: We were prepared to do 16 that to show our minimum commitment. We understand 17 that in most previous instances the Commission has just 18 mentioned these as commitments, not as COLs, but 19 because we felt that this was a very important signal 20 to send to you we are prepared to accept the two year 21 condition of licenses if that is the route you chose. 22 4068 THE CHAIRPERSON: Yes. The problem I 23 have I suppose is, it is sort of when somebody says to 24 you "I will be quite honest" the implication is "up to 25 now I haven't been".
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1 4069 Fred Sherratt goes back a long way 2 and said, I think correctly, that we have taken this 3 company as honouring its commitments over time. So 4 when you see a condition of license put in you suddenly 5 say "Well, wait a minute. Does that downgrade 6 everything else?" 7 4070 MR. MILLER: Not in the least. 8 4071 THE CHAIRPERSON: So I had a hard 9 time particularly following why you would request a 10 condition of license instead of saying "We commit to 11 doing that amount of programming" and seeing it on the 12 same level as your other commitments. 13 4072 MR. MILLER: At the risk of losing my 14 job, can I confess to an error on my part, in that I 15 had, as we were preparing that revision, not confirmed 16 back in your previous licensing decisions as to how you 17 would enforce those commitments on CanWest and Global. 18 I had just assumed when I wrote that that they had been 19 COLs and then when I looked at it afterwards I realized 20 they weren't. So don't read anything into it. 21 4073 Having said that we are prepared to 22 accept a COLs, we are prepared to, but there wasn't a 23 suggestion that the other commitments were not equally 24 firm even if they were not COLs. 25 4074 THE CHAIRPERSON: Well the good news
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1 and the bad news, I think, Mr. Miller, is that if you 2 look at the CITY-TV, CKVO opening statement on page 8, 3 you will find that -- I think it was Stephen Tapp, but 4 I am sure that we don't want to blame him for what 5 might be a legal or regulatory -- 6 4075 MR. MILLER: I can be blamed for that 7 as well. 8 4076 THE CHAIRPERSON: He refers to: 9 "These commitments will 10 significantly exceed our current 11 conditions of license for local, 12 35 per cent higher than the COL 13 currently in place." (As read) 14 4077 When I look for a condition of 15 license on local I don't find one. 16 4078 So I guess there is a loose parlance 17 that I'm sure you now going to tidy up. 18 4079 MR. MILLER: It won't happen again. 19 My error there. I apologize. 20 4080 THE CHAIRPERSON: Because it brings 21 us to the larger issue here. As I listened to the 22 debate between yourselves and a number of the 23 Commissioners yesterday, when I read your earlier 24 decisions and the Commission's general decisions, I 25 read about expectations of fulfilling commitments. So
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1 it had a kind of surreal quality, the entire debate, 2 because it was as though there was a fight over form 3 rather than substance. 4 4081 I mean, what is at issue here is you 5 have put forward certain commitments, they are reduced 6 commitments from what you would have done had no 7 license been issued in Toronto, is what I take you to 8 be saying. The Commission has a choice of either 9 accepting that on the basis of all of its analysis and 10 saying "We expect you in the normal course, subject to 11 a debate about a conditions of license", if one removes 12 that, expecting you to fulfil those commitments or 13 saying "Well actually, having assessed the environment, 14 and having assessed your capabilities, we actually 15 expect you to do more than those commitments." 16 4082 Now, as a legal matter your situation 17 doesn't change much, but what you would be getting back 18 from us is a signal that we expect you to honour your 19 commitments, you have made a commitment, and now we are 20 expecting you to raise the bar, if indeed we go that 21 way, because we think you are capable of doing more. 22 4083 That seems to me to be what the 23 nature of the debate was and remains about and not 24 about any hard and fast rock solid positions. It is 25 open to you, as you have, to tell us about the
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1 conditions you find yourselves in, the challenges you 2 face, and so on, and it is our job to assess the entire 3 environment and to see whether or not we accept 4 those -- without doubting your word. This at the end 5 of the day is a different day is a different judgment 6 about the nature of the environment you work in -- and 7 to possibly up the bar for you. 8 4084 So I come at the end of it to say: 9 What I have just said, does that sound unfair or 10 inaccurate as to the nature of the debate? 11 4085 MR. SWITZER: Mr. Chair, it is 12 absolutely accurate and very fair and has been part of 13 our discussion and perhaps part of what we are talking 14 about here. 15 4086 We would hope of course that any 16 decision would also make reference to or in some way 17 note our areas -- our activities in other areas, in 18 areas of cultural diversity, in our development of 19 Canadian drama, our development of Canadian series, our 20 local reflection. 21 4087 And, yes, in doing so, we would hope 22 that you also might note our record of 23 over-achievement, particularly with CITY-TV in Toronto. 24 In fact, we have in some of our current licences, 25 particularly with CITY-TV right now, there are
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1 references to notations of commitment, the fact that 2 our proposed local commitments going forward are 3 absolute minimums and that we have committed to 4 continue to exceed those levels if market conditions 5 allow. We would expect that notations in a decision 6 would be absolutely reasonable about our commitments in 7 these areas. 8 4088 THE CHAIRPERSON: I regret myself, to 9 some extent, that we didn't dwell more on your positive 10 achievements in so many areas. I don't know how that 11 happened, but it was flow of the game as it were and we 12 got into areas that perhaps were harder than they 13 needed to be, the edges were harder than they needed to 14 be, in my view, because we were talking about a company 15 that has fulfilled its commitments over time and has 16 done some pioneering work in broadcasting and we expect 17 it to do so. 18 4089 So I just wanted to make those points 19 about tone, if you like. 20 4090 MR. SWITZER: Mr. Chair, you have put 21 it most eloquently. 22 4091 I couldn't help but think, in a very 23 short period of time this morning you have captured the 24 entirety of where we feel we should go and the approach 25 we want to take to it.
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1 4092 I guess it is the terminology, and 2 you hit it bang on a moment ago, a condition of license 3 is a legal phrase and if it is a condition of license 4 and you are in breach, then you are breaking the law. 5 That is something we never want to be in a position 6 that we might have to do. That is why I think the team 7 have been pushing these last two days that they are 8 minimums and they are not what we want to do. 9 4093 You have captured it. I hope 10 somebody -- well, there is a transcript of that and I 11 hope you take some of it and put it in the decision. 12 4094 THE CHAIRPERSON: I guess we take 13 conditions of license to an entirely different way, as 14 you know, at the Commission. I suppose the issue of 15 the eight hours of priority programming would emerge as 16 a condition of license out of this, but I'm not sure 17 about the local. I guess it was that it was initially 18 your request to do so that puzzled me. 19 4095 In any case, thank you. Those are 20 all my questions. 21 4096 Commissioner Langford. 22 4097 COMMISSIONER LANGFORD: I have just 23 one question which is completely unconnected to the 24 debate or the discussion that you just had with the 25 Chair.
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1 4098 But as this is reply to 2 interventions, there was many interventions of course 3 that you couldn't mention specifically, but there was 4 one I wanted to bring your attention to which seems a 5 little bit off the wall in terms of the process here, 6 but I don't think that it is off the wall in terms of 7 the sense of concern that underlies it and in terms of 8 your unquestionably model commitment to cultural 9 diversity and to cultural sensitivity. 10 4099 I am referring to Intervention No. 37 11 from the Tamil Coordinating Committee. 12 4100 Really this is, as I say, just a bit 13 odd in terms of this process because it deals with 14 radio. The intervenant clearly says, the writer on 15 behalf of this, that she knows that in a strict sense 16 radio is not on the table here in any way. 17 4101 However, she has concerns with one of 18 your radio stations and notes that its home is in 19 precisely the same building as your television and that 20 she would ask that some investigation of her concerns 21 be undertaken. 22 4102 I would ask you the same thing today, 23 that you would make some best efforts to contact this 24 woman and to this association and to deal with her 25 concerns.
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1 4103 MR. MILLER: I remember the 2 intervention and I have made some inquiries and we will 3 follow up. 4 4104 COMMISSIONER LANGFORD: Thank you 5 very much. 6 4105 THE CHAIRPERSON: Counsel. 7 4106 MR. HOWARD: Thank you. 8 4107 You mentioned that you couldn't 9 accept the 75 per cent for independent production. Is 10 there any level at which you would be more comfortable? 11 4108 MR. MILLER: Our difficulty, counsel, 12 is with the use of the term "independent production". 13 We are not, for any circumstances, considered 14 independent producers from the perspective of the 15 funding agencies, but large vertically integrated 16 competitors, be they Nelvana, now owned by Corus, or 17 Alliance Atlantis, are considered independent producers 18 for certain circumstances. 19 4109 So until there is a more reasonable 20 definition of "independent producer", we feel unable to 21 make that commitment because it puts it as a major 22 disadvantage and in a sense requires us to use our 23 competitors for production. We are simply not prepared 24 to put ourselves in that position. 25 4110 We have a strong track record of
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1 commitment for small and medium-sized companies in 2 independent productions. We would be happy with a 3 notation in the decision that refers to that strong 4 commitment to small and medium-sized companies, but we 5 are unable to accept a commitment to independent 6 production as it is currently defined. 7 4111 MR. HOWARD: At a D level I think you 8 are saying. 9 4112 MR. MILLER: That is correct. Thank 10 you. 11 4113 MR. HOWARD: There was a discussion 12 on Monday about the calculation of the potential reach 13 of the group, remember there was 67 per cent. You have 14 mentioned today for example that -- I think your phrase 15 was -- "even by the Commission's count" I know there 16 were discussions between Commission staff and your 17 staff. 18 4114 Have you received enough information 19 to understand how the Commission calculates its figure? 20 4115 MR. MILLER: We have had some very 21 useful discussion. We have not had the opportunity to 22 verify mathematically yet whether using the precise 23 Commission methodology we would come up with the same 24 number. We will try and do that. I suspect that there 25 is no issue with the mathematical application of the
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1 Commission's approach. 2 4116 Our comments in this regard were 3 merely to indicate that that doesn't tell the full 4 story, that there are other measures that, while not 5 the precise measure, the Commission has chosen to use 6 that also tell something else about our real coverage 7 and our real reach. 8 4117 So that is something we will get back 9 to you. If indeed we feel for some reason there is a 10 difference of opinion on the mathematical calculation, 11 we will get back to you, but I suspect that your 12 colleagues are completely competent to make that 13 calculation, so I suspect that we are unlikely to find 14 a difference on the mathematical side. 15 4118 MR. HOWARD: Basically our 16 calculators are as good as your calculators. 17 4119 I will pass you on to my colleague. 18 4120 MS BENNETT: Thank you. 19 4121 I just have a couple of follow-up 20 questions, particularly on the CKVU renewal application 21 and the CHRO. 22 4122 The first question relates to the 23 commitment for CKVU for airing of feature films. 24 4123 In the renewal application, CKVU made 25 a commitment to air all Canadian feature films suitable
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1 for broadcast, to air a minimum of 100 hours of 2 Canadian movies. 3 4124 Could you comment on the possibility 4 of the Commission imposing that commitment as a 5 condition of license. 6 4125 MR. MILLER: You may recall, counsel, 7 yesterday we had a discussion, I think in regards to 8 CITY-TV, about the 100 hours of movies and we had some 9 discussion about what that meant. We want to make sure 10 that includes feature film, long-form documentary and 11 made-for-television movies. 12 4126 With that proviso, we would accept 13 the 100 hour commitment on both CITY-TV and CKVU as a 14 condition of license. 15 4127 The other matter would be something 16 we would expect you to note. 17 4128 MS BENNETT: Thank you. 18 4129 The second question relates to the 19 exhibition of programs created by B.C. independent 20 producers as a result of the financial report, support 21 that the producers receive from CHUM's B.C. Independent 22 Production Benefit Initiative. 23 4130 Could you comment on the possibility 24 of the Commission imposing that as a condition of 25 license?
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1 4131 MR. SWITZER: Yes, counsel. We 2 reviewed earlier this week that we are fully prepared 3 to make the transfer benefit specifics conditions of 4 license as part of the new CKVU. 5 4132 Do you want to go into specifics? 6 4133 MR. MILLER: Yes. I think your 7 comment was an exhibition question. Is that correct? 8 4134 MS BENNETT: That is correct. 9 4135 MR. MILLER: To be clear, you are 10 asking whether we are prepared to commit by condition 11 of license to air what we fund on CKVU? 12 4136 MS BENNETT: That is correct. 13 4137 MR. MILLER: We will. Again, the 14 Commission could certainly note the other comments we 15 made today about our desire to air any such productions 16 funded by the benefits across the Canadian broadcast 17 system on our other stations such as CITY-TV, 18 recognizing that there is a distinction between the 19 $7 million feature film initiative and the other 20 stories. I think the record is clear on what we have 21 stated there. 22 4138 MS BENNETT: Thank you. 23 4139 Now, just dealing with issue of the 24 local programming benefits. You have indicated earlier 25 in the hearing, just now and in your application, that
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1 you are expecting the proposed benefits for the 2 incremental broadcast of local programming on CKVU to 3 be reflected in conditions of license. 4 4140 MR. MILLER: My understanding -- and 5 to look at the precedent you set with other such 6 acquisitions -- is that, yes, for the first term of 7 license it is appropriate for those commitments to be 8 as conditions of license. My understanding it would be 9 the complete commitment, not just the incremental but 10 the complete commitment would be the condition of 11 license. 12 4141 MS BENNETT: Okay. 13 4142 MR. MILLER: Unless Jay corrects me, 14 the total number of hours was 27 and a half, which was 15 split between news and non-news. 16 4143 MS BENNETT: So 15.5 hours of local 17 news and 12 hours of non-news. 18 4144 MR. MILLER: Precisely. 19 4145 MS BENNETT: Okay. Just as a 20 follow-up, if the Commission did impose conditions of 21 license, how should local programming be defined? For 22 example, in the Decision 2002-81, new television 23 station for Toronto and Hamilton, the Commission 24 outlined a definition of local programming. Would that 25 be -- I could read it if you --
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1 4146 MR. MILLER: I have a copy if you 2 will give me two moments to find it. 3 4147 MS BENNETT: Sure. 4 --- Pause. 5 4148 MR. MILLER: It wouldn't hurt for you 6 to read it while I am looking for it. 7 --- Laughter / Rires 8 --- Pause 9 4149 MS BENNETT: Thanks. 10 "Substituting Vancouver for the 11 CKVU situation, it would be for 12 the purposes of this condition, 13 `local programming' means 14 station productions or 15 programming produced by..." 16 (As read) 17 4150 In this case: 18 "...Vancouver-based independent 19 producers that reflects the 20 particular needs and interests 21 of Vancouver residents." 22 (As read) 23 4151 MR. MILLER: No. That seems to be a 24 very different kind of application of the term "local". 25 4152 For the purposes of those commitments
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1 we would expect the Commission's traditional definition 2 of "local" which is locally produced, either by the 3 station or, in the case of an independent production, 4 by a local independent producer. 5 4153 MS BENNETT: Thank you. 6 4154 MR. MILLER: Could you just refer to 7 the clause number, because I am going to look for it 8 just right now. 9 4155 MS BENNETT: Do you got the clause 10 number? 11 --- Pause 12 4156 MS BENNETT: I don't have the clause 13 number handy, but we can -- 14 4157 MR. MILLER: If we need to get back 15 to you on that we will. I will look at it subsequent 16 to the hearing. 17 4158 MS BENNETT: Okay. Thank you. 18 4159 The next question also relates to 19 CKVU and it relates to the transfer of control to CKVU 20 to CHUM in Decision 2001-647. 21 4160 In that decision, the Commission 22 noted a number of safeguards that CHUM offered to 23 preserve programming diversity between CKVU and CKVI. 24 Those safeguards were set out at paragraph 6 of the 25 Decision and the Commission noted them at paragraph 24.
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1 4161 Again, I can read them if that would 2 be helpful. 3 4162 MR. MILLER: I have that in front 4 of me. 5 4163 MS BENNETT: Okay. So there were six 6 safeguards that were set out. 7 4164 Could you comment on the possibility 8 of the Commission imposing those safeguards as a 9 condition of license? 10 4165 MR. MILLER: I recall that again the 11 Commission faced the same issue with respect to the 12 safeguards on CHCH and CHEK. I can look at it, but if 13 the Commission was paralleling that in terms of the 14 implementation of safeguards, that would be 15 satisfactory to us. 16 4166 MS BENNETT: Thank you. 17 4167 My next question relates to CHRO, and 18 specifically the split feed application. It is just a 19 couple of details on the application. 20 4168 On page 6 of the application you 21 listed three programs that would be used as part of the 22 split feed strategy. That was a morning show, a news 23 program and an 11:00 p.m. news program. In the 24 application you have provided some detailed 25 calculations showing the incremental revenue that you
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1 would generate from the morning show and the 6:00 p.m. 2 news, but you didn't provide similar calculations for 3 the 11:00 p.m. news. 4 4169 Are you in position to tell us on an 5 annual basis how much additional advertising revenue 6 you would expect to generate from the 11:00 p.m. news 7 program? 8 4170 MR. MILLER: I am wondering, counsel, 9 whether you are missing a page. I have Attachment 2 to 10 our filing which, was initially filed confidentially 11 but the Commission asked that we place it on the public 12 record. There is a Part A that deals with the morning 13 show, a Part B that deals with 6:00 p.m. news, and then 14 a Part C, which is on a second page, that deals with 15 the Sunday news at 11:00 -- Monday to Sunday news at 16 11:00 p.m. 17 4171 Just to read for you, it suggests 18 that without the split the advertising revenue would be 19 $348,000. With the split feed the advertising revenue 20 would be $438,000. Then when we added all of these 21 three calculations together we came up with a total 22 benefit of the split feed of $803,000. So we set that 23 $800,000 as our potential benefit from this split feed 24 proposal. 25 4172 MS BENNETT: Okay. Thank you.
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1 4173 Also in relation to the split feed 2 you have indicated that this split feed advertising 3 would be within locally produced programming. 4 4174 Could you comment on the possibility 5 of the Commission imposing that as a condition of 6 license? 7 4175 MR. MILLER: We would accept that as 8 a condition of license. 9 4176 MS BENNETT: Okay. Thank you. 10 4177 Those are my questions. 11 4178 THE CHAIRPERSON: Thank you 12 very much. 13 4179 Thank you, ladies and gentlemen. 14 4180 We will take a brief five-minute 15 break while we have the next panel. 16 4181 Perhaps you could call that now, 17 Mr. Secretary. 18 4182 MR. LEBEL: The next application will 19 be the Telelatino Network Incorporated application. 20 --- Upon recessing at 1006 / Suspension à 1006 21 --- Upon resuming at 1018 / Reprise à 1018 22 4183 THE CHAIRPERSON: Order, please. A 23 l'ordre, s'il vous plaît. 24 4184 Mr. Secretary, call the next item. 25 4185 MR. LEBEL: Thank you, Mr. Chairman.
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1 4186 We will now hear the application by 2 Telelatino Network Incorporated, to renew the license 3 of the national specialty television service known as 4 Telelatino expiring the 31st of August, 2002. The 5 licensee provides ethnic programming directed to 6 Italian and Hispanic Spanish audiences. The licensee 7 also proposes amendments to its condition of license 8 numbers 1a) and 1b). 9 4187 Mr. Aldo Di Felice will introduce his 10 colleagues. 11 4188 Gentlemen and lady, you do have 12 20 minutes to make your presentation. 13 PRESENTATION / PRÉSENTATION 14 4189 MR. JOHNSTON: Thank you, 15 Mr. Secretary. 16 4190 Good morning, Mr. Chairman, Members 17 of the Commission. 18 4191 I wonder before Mr. de Felice 19 introduces the panel if I could speak to a procedural 20 matter. 21 4192 Last Monday we filed on behalf of TLN 22 revised seven-year financial projections. The 23 projections that were filed originally with the 24 application were prepared in late 2000 and were clearly 25 out of date so we thought it would be more useful for
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1 the Commission to have an up-to-date picture of how TLN 2 sees the next seven years unfolding. 3 4193 So those were filed Monday. 4 Yesterday we had a request from CRTC staff to provide 5 the assumptions under which the new projections were 6 forecast. So we have prepared a revised Schedule 18, 7 which has the amended assumptions. I have provided 8 those to the Secretary today. 9 4194 So my request to the Commission is 10 that these two documents be added to the record of the 11 proceeding. 12 4195 THE CHAIRPERSON: Any comments? 13 4196 MR. HOWARD: No comments. 14 4197 I would think that intervenors should 15 have 10 days to make any comments they wish, and 16 perhaps three days for reply. 17 4198 Would that be suitable? 18 4199 MR. JOHNSTON: That would fine. 19 4200 Thank you, counsel. 20 4201 THE CHAIRPERSON: Go ahead, 21 Mr. Di Felice. 22 4202 MR. DI FELICE: Good morning. 23 Mr. Chairman and Commissioners. 24 4203 My name is Aldo Di Felice, President 25 of Telelatino Network Inc. With me today are, from my
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1 far left, Agatha Pezzi, our Head of Production; John 2 Montesano, our Head of Network Development. 3 4204 On my right is our Head of Finance, 4 Rehaz Subdar, and beside him our legal counsel, Chris 5 Johnston. 6 4205 We are also pleased to have in the 7 audience representatives of long-standing shareholders 8 at Telelatino, Ms Patricia Rosati, Mr. Joe Vitale, and 9 Mr. Romeo Di Battista. 10 4206 Our Chairman, John Cassidy is unable 11 to be here and sends his regrets. 12 4207 TLN went to air on December 10, 1984. 13 Eighteen years ago, TLN was a small network in a large 14 country. Today, the service provides Spanish and 15 Italian programming to over three million homes across 16 Canada. 17 4208 Over the years, TLN has steadily 18 increased the quality, quantity and diversity of its 19 service. It now provides continuous, 24-hours per day, 20 seven-days per week of news, information, sports, 21 drama, children's shows and general entertainment 22 programming to Canadian audiences of Italian and 23 Hispanic ethnic origin and those who enjoy these 24 cultures and languages. 25 4209 TLN has renewed its commitment to
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1 Hispanic and Italian Canadians and has taken steps to 2 change the way people think about ethnic broadcasting 3 in Canada: 4 4210 By investing in modern broadcasting 5 technology to improve the look of the station and its 6 programs; 7 4211 By dedicating ourselves to community 8 outreach initiatives; 9 4212 By building a wide range of top 10 programming from Canadian and international sources; 11 and 12 4213 By pursuing programming and 13 promotional campaigns that make it more accessible to 14 all Canadians. 15 4214 Despite the many accomplishments and 16 development of TLN as a network over the years, there 17 continue to be dramatic and exciting changes sweeping 18 over our communities and our industry which the service 19 must continually address. 20 4215 Our main guiding principles are meant 21 to enhance TLN's impact and include: 22 4216 Making and finding quality 23 programming; 24 4217 Extending the accessibility and reach 25 of ethnic programming;
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1 4218 Involving and interacting with our 2 communities; and 3 4219 Practising diversity on many levels. 4 4220 Time and time again, our audiences 5 have told us -- as the many supporting interventions in 6 this matter underline 7 --- Laughter / Rires that these principles or 8 "touchstones" at TLN, namely, quality, diversity, 9 community commitment and accessibility, are reshaping 10 people's views of TLN's importance. These initiatives 11 have proved to be a unifying force, both between the 12 various Latin ethnocultural groups that TLN serves, as 13 well as between these groups and mainstream Canada. 14 4221 All of these principles have served 15 as ingredients to TLN's Canadian recipe for success -- 16 blending great Latin television from around the world 17 with Canadian sensibilities, Canadian context, Canadian 18 enhancements and, of course, thoughtful, relevant and 19 enduring original Canadian content. 20 4222 We were pleased to see the article by 21 John Allemang in today's Globe Review section of the 22 Globe and Mail newspaper, recognizing the very type of 23 programming and initiatives that we are talking about. 24 We have left copies of that article this morning with 25 the Secretary of the hearing for your reference.
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1 4223 MR. MONTESANO: Good morning. 2 4224 With these objectives in mind, TLN's 3 accomplishments over the current license term of which 4 we are most proud and wish to underline, include the 5 following: 6 4225 First, improved programming. TLN has 7 built an international network of relationships and 8 alliances in the world television marketplace. New 9 deals and relationships have been struck with Univision 10 Network, Telemundo Network, CNN en Español, Televisa 11 Group in Mexico, Venevision in Venezuela, Artear in 12 Argentina, RCN in Columbia and others. 13 4226 Even on the Italian programming side 14 where TLN has, and still remains, highly dependent on a 15 single foreign program supplier, TLN has introduced new 16 sources of programs from Italy. These international 17 relationships have been multi-layered in relation not 18 only to programming supply, but also special live event 19 joint ventures and the partnerships involved in our 20 newly approved Canadian digital ethnic channels. 21 4227 At the same time, TLN has sought to 22 contextualize and enhance many of its international 23 shows with a Canadian perspective. And so, many of 24 TLN's international specials have TLN-produced studio 25 commentary. For example, earlier this year TLN's own
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1 personalities added colour and commentary to the 2 San Remo Song Festival from the Italian Riviera. 3 4228 The results: The week long Festival 4 attracted over 600,000 Canadians, while the Saturday 5 finale alone was watched by 336,000 viewers. 6 4229 TLN is also "Canadianizing" many of 7 its other international shows, including the addition 8 of English subtitles to its weekly telenovela, 9 "Calypso", and Canadian-made English play-by-play to 10 many of the Copa America soccer tournament games 11 broadcast last summer. As well, we will be adding 12 Italian play-by-play to World Cup games next month. 13 4230 But more than just much appreciated 14 Canadian context, TLN's Canadian content efforts have 15 sharpened their focus and resulted in extended reach, 16 appeal and impact. Although, as the CRTC knows, our 17 recent history has included financially challenging 18 years -- indeed TLN's cumulative deficit was only paid 19 off in 1999 -- we have steadily increased both hours 20 of programming and the amount of dollars devoted to 21 Canadian-made programs. 22 4231 In fact: 23 4232 Canadian programs now make up over 24 25 per cent of TLN's overall schedule; and 25 4233 TLN has spent approximately
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1 $9 million on Canadian programs during the current 2 license term. 3 4234 Further, we propose to increase our 4 Canadian program expenditures by 1 per cent per year 5 starting in year four of our new license term, rising 6 to 20 per cent in year seven. This represents a total 7 commitment of over $16 million to Canadian content 8 production, or a 132 per cent increase over the last 9 license term. 10 4235 We are also excited to report that 11 TLN's popularity has been growing as measured by recent 12 industry standard audience measurement services. As of 13 fall 2001, TLN had achieved record average weekly reach 14 of over 1.1 million viewers. Much of that growth has 15 included some younger demographic groups. For 16 instance, 77 per cent more adults 18 to 24 and 39 per 17 cent more adults 18 to 34 were watching TLN this past 18 fall than the year before. 19 4236 MS PEZZI: Good morning. 20 4237 Community outreach is very important 21 to TLN in the context of its Canadian content programs. 22 TLN has focused its activities, in part, on daily 23 television coverage of many community events and 24 activities. 25 4238 For instance, in the past 15 months
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1 alone TLN has publicized more than 1,500 community 2 events through its "Appunti" and "Apuntes" daily social 3 calendar segments. TLN videographers and producers 4 have prepared and broadcast more than 500 segments as 5 part of TLN's "Nota Bene" and "Informese" segments. 6 4239 Besides these community 7 micro-programs, TLN has developed a half-hour program 8 to showcase important events in the Hispanic and 9 Italian communities. We call it "TLN Spotlight". 10 Twenty-four "TLN Spotlights" have been produced over 11 the past 15 months. These specials have brought to 12 Canadian TV such rich ethnocultural events as the 13 Toronto Hispanic Day Parade, a tribute evening for RCMP 14 Commissioner, Giuliano Zaccardelli, the "Valigia D'Oro" 15 tribute ceremony to immigrants, and the 16 Canadian-Italian National Awards for the National Arts 17 Centre in Ottawa. 18 4240 As well, TLN continues to produce and 19 broadcast various other Canadian, community-oriented 20 weekly programs throughout the year. These include 21 "Viva Domenica", an Italian lifestyle show, "Usted 22 Decide", Hispanic issues segments, "Graffiti", a 23 youth-oriented music program, and others such as 24 "Hispanos en Canada" and "In Conversazione". 25 4241 In April 2000, TLN launched a special
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1 production effort, a collection of original 2 documentaries exploring the Latin-Canadian experience 3 we are calling the "Latin Heritage Series". The series 4 kicked off with an original 90-minute documentary 5 entitled, "Pier 21: A Life Torn in Two", a program 6 shot in close collaboration with the Pier 21 Society in 7 Halifax. 8 4242 A fund-raising dinner in Toronto to 9 support the Pier 21 Society, that was organized in 10 collaboration with TLN and the Canadian Broadcasting 11 Corporation, subsequently followed the broadcast. The 12 evening was co-hosted by TLN's Alf De Blasis together 13 with CBC's Hana Gartner and audiovisual "recollections" 14 were collected from visitors to be permanently 15 enshrined in the Pier 21 Museum library video archives. 16 4243 Pier 21 is just one of many primarily 17 English-language original programs being produced by 18 TLN, in most cases with the cooperation of independent 19 producers within our communities. A glimpse of 20 upcoming instalments of the "Latin Heritage Series" is 21 included in our video presentation today. All in all, 22 TLN's innovative and attentive approach to its ethnic 23 mandate is allowing TLN to evolve with the 24 Latin-Canadian community itself and actively creates 25 new connections and opportunities
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1 4244 TLN's community focus includes 2 assisting community charitable work. To begin with, we 3 have worked with the Red Cross on several campaigns in 4 relation to Latin American relief efforts. We also 5 provide ongoing promotional, production and programming 6 support to many other charities. These include Villa 7 Charities and the Centre for Spanish Speaking Peoples 8 in Toronto, Villa Marconi in Ottawa, the Leonardo da 9 Vinci Centre in Montreal, and Costi Immigrant Services. 10 As well, TLN's annual "Caritas" telethon, in support of 11 substance abuse programs, has itself raised over 12 $1 million through awareness campaigns and the 13 telethon. 14 4245 MR. DI FELICE: As part of this 15 license renewal, TLN is asking the Commission to permit 16 an increase in the amount of non-third language ethnic 17 programming from 15 per cent to 25 per cent. The 18 nature of this request is not revolutionary, but 19 evolutionary. TLN is seeking to follow the demographic 20 developments of the Latin communities it is mandated to 21 serve. 22 4246 We have filed statistics confirming 23 what we already see around us in our communities. The 24 vast majority of Canada's 1.2 million Italian-Canadians 25 do not identify Italian as their home language
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1 according to Statistics Canada. The same holds true 2 for the majority of Canadians of Hispanic/Spanish 3 origins. 4 4247 The response to the TLN's "Latin 5 Heritage Series" which features programs produced 6 primarily in English, has shown us that our 7 communities, and especially second, third and fourth 8 generation Latin Canadians, crave and respond to unique 9 stories that reconnect them with their cultural 10 heritage. 11 4248 At the same time, mixed language 12 programming -- i.e., programs that mix Italian with 13 English or Spanish with English -- more accurately 14 reflects the every day reality of both immigrants and 15 their descendants. An increase in the non-third 16 language programming allowance would permit TLN to 17 broadcast more mixed language ethnic programming. Of 18 course, TLN would remain overwhelmingly a third 19 language service, as the license condition would still 20 require a minimum 75 per cent level. 21 4249 A further amendment sought in this 22 license renewal is the establishment of a minimum level 23 of Canadian content to be broadcast during the evening 24 broadcast period. TLN proposes to introduce a minimum 25 15 per cent level of Canadian content during this
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1 period. Although TLN will need to balance a series of 2 challenges, including the potential disruption to 3 viewers' long-standing programming expectations, 4 scheduling for two separate third language audiences -- 5 Spanish and Italian -- and the impact of unusually long 6 Italian show formats, we believe this level is 7 appropriate during the evening period. 8 4250 At this point, we would like to show 9 you a short video presentation that illustrates some of 10 the initiatives we have described. 11 --- Video presentation / Présentation vidéo 12 4251 MR. DI FELICE: In conclusion, TLN 13 wholeheartedly supports the introductory statements 14 made by the Commission in its revised 1999 Ethnic 15 Broadcasting Policy. The Commission enunciated the 16 goals of: 17 4252 Ensuring access to ethnic programming 18 to the extent practicable given resource limitations; 19 4253 Providing a framework for 20 broadcasting that fosters opportunities for greater 21 understanding among people with different cultural 22 backgrounds; and 23 4254 Responding to the evolution within 24 ethnic groups and in Canadian society at large. 25 4255 All three of these principles have
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1 guided and will continue to guide TLN's development 2 over the next license term. 3 4256 Thank you, Commissioners. 4 4257 That concludes our oral presentation 5 and we would be happy to answer any questions. 6 4258 THE CHAIRPERSON: Thank you. 7 4259 Vice-Chair Wylie. 8 4260 COMMISSIONER WYLIE: Good morning, 9 Mr. di Felice and your colleagues, Mr. Johnston. 10 4261 This is perhaps not going to be an 11 easy process in timing so we will have to make sure 12 that we are looking at the same pieces of paper. 13 4262 To put this in context, Telelatino's 14 license was expiring at the end of 2001 and there was 15 an application for transfer of its control to Corus, 16 which was approved in July of 2001. The Commission 17 then renewed the license administratively to 2002, so 18 expiry is this coming September. 19 4263 So what we have on hand is an old 20 application for renewal when Corus was not in control. 21 In the decision of July the Commission postponed to 22 this renewal the discussion of issues and concerns that 23 were raised by intervenors and by the Commission during 24 the transfer decision. They were to be revisited at 25 this renewal hearing.
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1 4264 We are in agreement as to how this is 2 working? 3 4265 So I will be discussing with you 4 those issues and concerns, which also were in the 5 deficiency process between the Commission and 6 Telelatino leading to what would have been a renewal 7 for 2001. So that is still on our books. 8 4266 That included a possibility of 9 increasing Cancon both all day and during the evening 10 period, so we will discuss that. 11 4267 It included a possibility of 12 increasing the CPE requirements, so we will discuss 13 that. 14 4268 It also included complaints re the 15 adequacy of programming on Telelatino, particularly by 16 the Hispanic speaking or the Hispanic community, so we 17 will discuss that. 18 4269 There were also questions about 19 commitments to service to the hearing and visually 20 impaired in the deficiency process. 21 4270 So I hope that you have with you that 22 application. 23 4271 Now, you have no problem to date with 24 these dates and the process. 25 4272 So financial projections were filed
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1 originally in January 2001 when the application for 2 renewal was filed. They were revised in March in a 3 first round of deficiencies, the 12th of March. They 4 were revised the month after, the 12th of April 2001 in 5 a second round of deficiencies. This morning, as 6 Mr. Johnston highlighted, a new set dated 3 May -- that 7 is when I got them anyway -- projections were filed. 8 4273 So the only set of projections filed 9 under Corus control was the 3 May ones after the -- 10 4274 MR. JOHNSTON: That is correct. 11 4275 COMMISSIONER WYLIE: Now you have 12 filed this morning -- at least that is when I first 13 have seen them -- the underlying assumptions for the 14 3 May projections. 15 4276 MR. JOHNSTON: That is correct. 16 4277 COMMISSIONER WYLIE: So obviously I 17 have had a chance to look at the 3 May projections but 18 not very much at the financial assumptions so you may 19 have to help me orally when I ask questions as to how 20 it is supported because I won't have had time to really 21 absorb it. 22 4278 The first question I -- well, to 23 really put this in context, what I have done is I have 24 taken the 12th March projections and compared them with 25 the 3 May projections, only to find out as I pursued
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1 further into the file that they had been upgraded -- 2 well, they are always going up on the 12th of April. I 3 had done all my little calculations by then as to what 4 the differences were. 5 4279 So if you don't mind, I will use the 6 12 March projections attached to the first deficiency 7 letter 12 March to compare with May. 8 4280 The April ones were raised further, 9 so the difference between them and May in increases 10 will be less, but if you will indulge me we will use 11 the 12 March. 12 4281 It is simply to contextualize our 13 discussion, because your responses to the Commission's 14 prodding to improve and to how to meet the Spanish 15 community's concerns were based on what you thought 16 your ability financially would be according to the 17 projections filed before the transfer and certainly 18 before the 3rd of May. 19 4282 By focusing on the improvement of 20 course we will now ask you why can't your answers be 21 different since your financial projections are so 22 different? 23 4283 MR. JOHNSTON: That is why we wanted 24 to -- it has been a steadily improving situation and we 25 thought it would help the process if you could see what
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1 the picture looks like today based on the actual fiscal 2 year 2001 results that of course were filed last 3 November. 4 4284 But we, in preparing, have been 5 looking at these various sets of projections, Madam 6 Wylie, so whatever way you want to proceed is fine. 7 4285 The trends are the same, they are 8 just a little bit better. 9 4286 COMMISSIONER WYLIE: But it would be 10 probably good for the record to examine just how a 11 little bit is. 12 4287 In those two sets of projections your 13 first line is 2001-2002, so that would be a mixture. 14 4288 Do you have the projections with you 15 now, the 12th of March ones and the 3rd of May ones, 16 the ones you just filed? 17 4289 We of course have confidentially the 18 actuals for 2001 by now with a PBIT or -- yes, PBIT 19 because there is interest in that period, which is 20 about the same or just 1 per cent higher than 2002. 21 4290 Now, you have 2001-2002 as year one. 22 I suspect I would call that a mixture of actual. Year 23 one will actually be 2002-2003, which is year two, not 24 that it matters a lot. You see, those projections, 25 your first year in the new term will end in 2003, so it
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1 is not year one really. 2 4291 You would agree that the first year 3 2001-2002 is a combination of actual and prediction to 4 August. Correct? 5 4292 MR. JOHNSTON: Yes. I believe in the 6 projections that we filed recently, the May 7 projections, that year one -- correct me, Rehaz, here, 8 but is year one based on the actual fiscal 2001 9 results? 10 4293 MR. SUBDAR: Correct, yes. We have 11 upgraded them. 12 4294 COMMISSIONER WYLIE: Well, in part, 13 and in part projections. Correct? 14 4295 MR. JOHNSTON: In part, okay. 15 4296 COMMISSIONER WYLIE: Because it is 16 the end of the year, the added year to your term. 17 4297 MR. SUBDAR: Correct. 18 4298 COMMISSIONER WYLIE: The first 19 year is what you called year two of the projections 20 would be -- 21 4299 MR. SUBDAR: Yes. This year is 2001. 22 Year one is August 31st. 23 4300 To keep it consistent with what we 24 initially submitted in the original application under 25 section 6, the year one was 2001-2002 and we kept that
748
1 consistent with this new one. 2 4301 COMMISSIONER WYLIE: Okay. 3 4302 MR. SUBDAR: So this year one is 4 comparable to the original submission we did under 5 section 6. 6 4303 COMMISSIONER WYLIE: I am just trying 7 to be sure that we don't talk about actuals when we are 8 talking about projections. 9 4304 So you agree that 2001-2002 is a 10 mixture of actuals and projections? 11 4305 MR. SUBDAR: We based that based on 12 our actual numbers of 2001. 13 4306 COMMISSIONER WYLIE: Okay. And not 14 by looking at your actuals to date, to May. 15 4307 MR. SUBDAR: No. 16 4308 COMMISSIONER WYLIE: Because that 17 year will end in August. You run to an August 18 broadcast year? 19 4309 MR. SUBDAR: Yes. 20 4310 COMMISSIONER WYLIE: Yes, okay. So 21 now to put this in context, we will use the year one, 22 year two, year three, because it will be easier. 23 4311 MR. SUBDAR: Correct. 24 4312 COMMISSIONER WYLIE: The difference 25 between the March and the May revision in revenue, by
749
1 my calculation, increases by 11.5 per cent in year one 2 to 40.8 per cent in year seven. 3 --- Pause 4 4313 COMMISSIONER WYLIE: Anyway, you can 5 take my word for it for the moment and do the 6 calculations. 7 4314 I simply took -- if you look at year 8 seven, your projection in March was $10 million and it 9 is $15.4 million in year seven in revenues. 10 4315 MR. JOHNSTON: It was $10.9 million 11 in March. 12 4316 COMMISSIONER WYLIE: That's right, 13 $10.9 million. 14 4317 MR. JOHNSTON: And you are correct, 15 $15.4 million now. 16 4318 COMMISSIONER WYLIE: Just so we are 17 looking at the same pages. 18 4319 MR. SUBDAR: I would just like to 19 make -- 20 4320 COMMISSIONER WYLIE: The result of 21 that of course is a profit, a PBIT in the first year 22 but then there is no interest so we will call it profit 23 before taxes, which is 35 per cent in 2001, 34 per cent 24 in 2002, 28.3 per cent in year three, 27.8 per cent in 25 year five and 26.7 per cent in year seven.
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1 4321 MR. SUBDAR: Yes, correct. 2 4322 COMMISSIONER WYLIE: I did a simple 3 calculation of taking the estimated or projected, which 4 compares to, in March, 18.2 per cent in year one, 5 16.3 per cent in year three, 13 per cent in year five 6 instead of 27.8 per cent, and 10.1 per cent in year 7 seven compared to the revision 26.7 per cent. 8 4323 MR. SUBDAR: Yes. I would like to 9 make a comment, if I may, please. 10 4324 On the Schedule 1d, that schedule was 11 based on an annual forecast revision on the assumption 12 that there is a zero per cent growth in advertising 13 revenue. 14 4325 I have to refer back to why this was 15 done with respect to the what the question was. 16 4326 COMMISSIONER WYLIE: Yes. At the 17 moment I just want to put the context financially so 18 that it forms a basis for our discussions about 19 answering the issues and the concerns. 20 4327 MR. SUBDAR: Okay. 21 4328 COMMISSIONER WYLIE: Also, we can 22 look at how this has increased. 23 4329 Now, this is great of course, it is 24 looking better every time, on the fourth time. 25 4330 I don't know what you mean by -- oh,
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1 I see. You have a Schedule 1d. I call this 6.1, but 2 that is the same thing. The March ones are not 3 identified. But it is clear that we are looking at the 4 same thing. 5 4331 So if I look at your revision, for 6 example, I see that you have factored in what you are 7 prepared to accept in CPE. If I do the calculation it 8 comes exactly to 17 per cent -- 16 per cent in years 9 two, one, three, 17 per cent in year four, going by 10 one per cent, 18 per cent in year five, 19 per cent in 11 year six and 20 per cent in year seven. 12 4332 MR. SUBDAR: Correct. 13 4333 COMMISSIONER WYLIE: That 14 nevertheless gives us the profit before taxes that I 15 just read into the record. Right? Even though there 16 is obviously a large increase in the expenditures 17 on the Canadian content by virtue of the fact that 18 the revenue is much higher and you apply 16 per cent 19 and then 17 per cent, 18 per cent, 19 per cent, 20 20 per cent. 21 4334 MR. DI FELICE: If I may, just with 22 respect to the numbers we are comparing, I believe we 23 are taking the numbers that you have cited just 24 recently, the raw numbers on gross revenues from 25 Schedule 1d to our March 12th supplementary
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1 information. 2 4335 That schedule wasn't an update of our 3 projections. What it was was a schedule responding to 4 a particular question indicating that we should make an 5 assumption that Telelatino's -- what were the 6 consequences of a denial of Telelatino's proposal to 7 broadcast a minimum of 75 per cent Italian and Spanish 8 language programs and a maximum of 25 per cent English 9 or French-language ethnic programs. 10 4336 That schedule was prepared as part of 11 the response and it was described as a schedule 12 forecast based on zero advertising sales growth as 13 opposed to the average 5 per cent growth originally 14 forecast. That was -- 15 4337 COMMISSIONER WYLIE: But it is 16 nevertheless projections which underlaid or supported 17 your response to questions by the Commission of any 18 improvement in Canadian content, et cetera. I suspect 19 that May is simply your revised view based on what is 20 happening at Telelatino of what your revenues will be 21 for the seven years. Wouldn't that be fair? 22 4338 MR. DI FELICE: Actually I think I am 23 questioning that assumption, because I think these were 24 prepared in response to a question saying theoretically 25 what if we changed one of the parameters, what are the
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1 potential consequences on your revised financials and 2 this was the potential consequence. 3 4339 COMMISSIONER WYLIE: Mr. Di Felice, 4 if I had done this exercise using the January 1 5 projections the difference would have been far greater. 6 Isn't that correct? 7 4340 MR. DI FELICE: I'm not sure, but 8 what I am suggesting is that -- 9 4341 COMMISSIONER WYLIE: Yes. Take my 10 word for it. 11 4342 MR. DI FELICE: -- the numbers that 12 we are comparing -- I think Rehaz will be able to 13 indicate -- 14 4343 MR. SUBDAR: If I may, the difference 15 would have been less because in our initial projection 16 we had factored in a growth percentage. 17 4344 This specific schedule assumes a 18 zero per cent growth in advertising revenue, so 19 advertising revenue is flat all across the seven years. 20 So I think what we are trying to say is a proper 21 comparison would the one that we just filed compared to 22 our initial projection when we initially submitted it 23 in January of 2001. 24 4345 MR. DI FELICE: And the one that was 25 most recently filed was an update not of the
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1 Schedule 1d to the March 12th response, but an update 2 to the last filed revised statements, which were -- 3 4346 COMMISSIONER WYLIE: So the point you 4 are making is -- 5 4347 MR. DI FELICE: The original schedule 6 in the original application. 7 4348 COMMISSIONER WYLIE: -- the 8 comparison should have been made from the 19th of 9 January 2001 and May? 10 4349 MR. DI FELICE: Right. Correct. 11 4350 COMMISSIONER WYLIE: Your point is 12 that because you were not factoring these other 13 assumptions the difference would have been less. 14 4351 But you would agree that the numbers 15 are higher? 16 4352 MR. SUBDAR: Yes. I can walk you 17 through the changes. 18 4353 COMMISSIONER WYLIE: Well, the 19 revenue is higher -- yes, the revenue is higher in 20 large part because there are a greater number of 21 subscribers, which I suspect that -- I take your point 22 about some aspects of comparing March 2001 and May 23 2002, but not subscriber projections. 24 4354 Subscriber projections are what they 25 were then and what they are now based on reality. I
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1 would like to know where the increase comes from in 2 subscribers which then yields more revenue. It is an 3 increase of -- I again was using the March numbers, but 4 it is certainly an increase in subscribers. 5 4355 MR. DI FELICE: Yes. When it comes 6 to subscriber revenues I believe there might not have 7 been a change between the originally filed numbers and 8 the Schedule 1d in March on subscriber revenues. So I 9 think it would be fair to compare numbers other than 10 the advertising revenue numbers which were specifically 11 generated on the assumptions that we were asked to 12 generate them on. 13 4356 COMMISSIONER WYLIE: There is some 14 increase between -- do you have January handy, the 15 first 6.1 that you want me to go back to? 16 4357 MR. SUBDAR: I can read the numbers. 17 4358 Year one for discretionary service it 18 was 3574, year two 3681, year three 3792, year four 19 3792, all across to year seven. In the Schedule 1d the 20 number is just not rounded off but it is the same, 21 3573, 3976, 3681, 3792, 3792, 3792 all the way across 22 to year seven. So in terms of discretionary service 23 cable revenue, it is the same, there are no changes in 24 the numbers from January 19, 2001 and from the March 25 numbers here.
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1 4359 COMMISSIONER WYLIE: Perhaps then if 2 you want to make the comparison between January 2001 3 and 3 May, since I haven't read the changes in your 4 assumptions, what is the increase caused by? 5 4360 MR. SUBDAR: Yes. We have revised to 6 include both the changes that we projected based on our 7 actual numbers that took place in 2001. Most 8 specifically, in the last six months of 2001 we felt 9 that we could reasonably revise our forecast for the 10 next seven years because we have an anticipated revenue 11 on Bell ExpressVU which resumed paying TLN in January 12 of 2001. 13 4361 So when we prepared these numbers in 14 December of 2000 that we submitted in January 2001, we 15 never had any revenue from Bell ExpressVu. They only 16 started paying us in January 2001. At that time it is 17 important to note that TLN was carried "a la carte" on 18 Bell ExpressVU. 19 4362 So as a result of that and the change 20 in status that we have taking place since January 2002 21 which now TLN is carried in a tier, we felt that the 22 changes should be reflected in the projected forecast. 23 That is why we have made the changes. 24 4363 So going back to the number of subs, 25 we have assumed that we shall end up with 175,000 subs
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1 as of the end of 2002 and it will grow to about 250,000 2 by the year seven. That will translate into an average 3 subs growth rate of 6.2 per cent, an average growth 4 rate of revenue of 16.7 per cent. We believe that is 5 realistic. That is direct-to-home service. 6 4364 MR. DI FELICE: Direct-to-home subs 7 we are talking about. 8 4365 COMMISSIONER WYLIE: I take your 9 point that the 12 March financial projections were 10 based on certain assumptions. The January ones, 11 though, are based on similar assumptions, not factoring 12 in what the Commission wanted you to illustrate. 13 4366 MR. DI FELICE: The major difference 14 between those two was that the original projections 15 were our projections and then the second set -- 16 4367 COMMISSIONER WYLIE: And so are the 17 May ones. 18 4368 MR. DI FELICE: The May ones are as 19 well. Schedule 1d, though, assumed zero per cent 20 advertising growth and so the only significant change 21 in assumptions on Schedule 1d was that major 22 assumption: What would happen if you had zero per cent 23 advertising growth? That would also impact our 24 Canadian program expenditures, but that was the 25 major change.
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1 4369 So, for instance, now that you have 2 asked a question about sub revenues, I think Rehaz has 3 pointed out that sub revenues, though, we didn't change 4 on Schedule 1d because it was specially prepared with 5 respect to one critical assumption being made. That 6 wouldn't be the assumption we would make if we weren't 7 asked to make that. 8 4370 COMMISSIONER WYLIE: Do you have a 9 problem, however, with the profit before taxes? By the 10 time we get into year one of the next term we don't 11 have interest. So do you have a problem with the PBTs 12 that I read out for 2001, 2002, 2004, 2006 and year 13 seven, which range from 35 per cent in 2001 to 26.7 per 14 cent in year seven, factoring in your acceptance of 15 starting to have 17 per cent CPE in year four. 16 4371 MR. SUBDAR: Correct. 17 4372 COMMISSIONER WYLIE: Those are 18 correct. Okay. 19 4373 MR. SUBDAR: That translates into an 20 average of 28 per cent. 21 4374 COMMISSIONER WYLIE: I am just trying 22 to -- it is a very old filing and a lot has happened in 23 between, control has changed and certain matters were 24 raised in the decision, so I am just trying to 25 contextualize. I appreciate your explanation of the
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1 perhaps not helpful comparison between the March 2 projections since they were prepared for special 3 reasons. 4 4375 So that sets up at least the context 5 we are discussing. 6 4376 I would like to now proceed to look 7 at your programming. 8 4377 Oh, also I want to confirm that I 9 have a revised schedule that was filed in the last 10 10 days or two weeks, or very recently, and that would 11 be what is currently on Telelatino? 12 4378 MR. DI FELICE: Yes. Commission 13 staff asked us to refile based on the current schedule 14 and I believe that is probably last weeks' schedule. 15 4379 COMMISSIONER WYLIE: At the top of 16 the sheet I have, to make sure we have the same one, is 17 written "CRTC Schedule B, Block Program Schedule". 18 Correct? Okay. 19 4380 So first, I noticed in your 20 presentation that you acknowledge at the end of your 21 presentation that you support wholeheartedly the new 22 Ethnic Broadcasting Policy. 23 4381 So for the record, we are in 24 agreement that there is a change now where your 25 commitments are for 85 per cent third language
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1 programming and a 15 per cent English programming 2 directed to the communities you serve and the service 3 is 100 per cent ethnic. 4 4382 MR. DI FELICE: I think the one 5 clarification on that is that I think our current 6 license limits the 15 per cent to a combination of 7 former Categories C and D. 8 4383 COMMISSIONER WYLIE: Yes, but now -- 9 yes. Which ends up believe, I believe in English 10 language. 11 4384 MR. DI FELICE: Either what we call 12 mixed language programming or unilingual English or 13 French-language ethnic programming. 14 4385 COMMISSIONER WYLIE: Yes. So now 15 what you would accept is 100 per cent ethnic divided 16 55/45 between Italian and Spanish, or Hispanic 17 communities. I know that you are asking for a change 18 to 75 per cent in third language, but currently under 19 the Ethnic Broadcasting Policy you would be at 85 per 20 cent third language and 25 per cent C and D. Right? 21 4386 MR. DI FELICE: Yes. We just 22 referred to -- 23 4387 COMMISSIONER WYLIE: What you are 24 proposing then is 75 per cent -- 100 per cent ethnic, 25 75 per cent third language and 25 per cent non-third
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1 language, or English-language directed to the 2 communities you serve and your programming would be 3 directed to the Italian and Hispanic communities in a 4 ratio of 55/45. I read that in part from your Nature 5 of Service, except that we would have to agree to 6 reduce the amount of third language programming by 7 10 per cent and increase the English-language or mixed 8 programming to 15 per cent. Is that correct? 9 4388 MR. DI FELICE: Yes. We would 10 increase the -- 11 4389 MR. JOHNSTON: Could I just huddle 12 for a second? 13 4390 COMMISSIONER WYLIE: Yes. 14 --- Pause 15 4391 MR. DI FELICE: Just in terms of the 16 actual wording of the conditions of license, I believe 17 the only two changes we are asking to make are the 18 change to non-third language programming and the 19 consequent change to third language programming. So 20 the 85 per cent going down to 75 per cent and the 21 consequent increase in the non-third language 22 programming and the introduction of the Canadian 23 content during the evening broadcast period at 24 15 per cent level. 25 4392 Those are the only two specific
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1 changes to the existing conditions of license. 2 4393 COMMISSIONER WYLIE: Yes. I was 3 trying to confirm that you understand that under the 4 ethnic policy the conditions of license look different. 5 We don't talk about Type A and Type C and D any more. 6 4394 MR. DI FELICE: Understood. 7 4395 COMMISSIONER WYLIE: If we were to 8 allow an increase from 15 per cent to 25 per cent 9 non-third language programming, how do you propose to 10 allocate it as between Italian and Spanish groups or 11 speakers? 12 4396 MR. DI FELICE: Well, generally we 13 have striven to achieve a balance. I don't think there 14 is a specific allocation as to that 10 per cent. As 15 you can see from -- 16 4397 COMMISSIONER WYLIE: My question 17 now would be the 25 per cent, if we allowed the 18 25 per cent. 19 4398 MR. DI FELICE: Right. Well, 20 generally speaking we are achieving a balance between 21 Spanish and Italian. With respect to the Canadian 22 content programming that we produce, we generally 23 mirror what we are doing on the Spanish side with what 24 we are doing on the Italian side. 25 4399 With respect to the actual type of
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1 programming that we would do, we would continue to do 2 what we have already commenced doing, which is sort of 3 a two-pronged approach, both our community level 4 programming, our every day community segments, our 5 community spotlight programming, and then the more 6 ambitious documentary programming, our "Latin Heritage 7 Series" type programming. 8 4400 Both of those two branches are 9 generally equally balanced. Not precisely balanced, 10 but generally we maintain a balance between Italian and 11 Spanish with respect to all parts of the service. 12 4401 We are in a challenging position 13 because of the very nature of Telelatino's mandate. We 14 are a shared channel and so in some respects we can 15 never be fully satisfying to anyone who is looking only 16 for Italian programming or Italian-oriented 17 programming, or fully satisfying to anyone who is 18 looking for only Spanish or Hispanic programming. 19 4402 So as a result, this is one of the 20 sensitivities that we are very attentive to. 21 4403 COMMISSIONER WYLIE: First let's 22 finish the comment you are making about how you would 23 split the increased -- not only the increased 10 per 24 cent, but the whole 25 per cent as between the two 25 communities.
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1 4404 You have made various comments about 2 the difference between the Hispanic communities and the 3 Italian communities and the argument for increasing the 4 English-language programming is what is often called a 5 generational difference between the two, et cetera. I 6 see, for example, in your supplementary brief at 7 pages 4 and 5 where you discuss the landscape and the 8 demographic challenge. 9 4405 I am wondering whether in light of 10 this you wouldn't choose to have more Spanish-language 11 programming in third language and more Italian-language 12 programming in English in dividing that 25 per cent and 13 then perhaps satisfy more the needs of the Hispanic 14 community, which I gather from your comments is not as 15 mature chronologically whereas you make a point about 16 the Italian community not having increased by 17 immigration for a number of years in any substantial 18 way whereas the Spanish-speaking community has. 19 4406 MR. MONTESANO: Yes. I think the 20 overall strategy speaks to a sensibility that we find 21 in most immigrant communities. I mean, I can speak 22 personally to this. My parents came to this country in 23 1965. I was born in 1966. I was raised in a 24 predominantly -- probably 100 per cent Italian-speaking 25 home, yet went to school every day and spoke English.
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1 4407 So I think even though there are 2 newer immigrants on the Spanish side, I think this 3 strategy embraces the reality of the new family in 4 Canada, which is a multilingual reality. I think we 5 feel very confident that with our 75 per cent we can 6 continue to provide the high quality international 7 programming and the Spanish-language and 8 Italian-language Canadian content programming that 9 we do. 10 4408 But there is something with the way 11 our communities have embraced these community segments, 12 these documentaries and series that we have been doing, 13 the "Hispanic Canadians", which is one of the titles 14 that you saw in that video presentation. When you see 15 this documentary -- it will be on Telelatino hopefully 16 in the fall. We are just finishing the packaging of 17 that -- it is in both languages and we ask people 18 specifically to speak in whatever language they feel 19 comfortable. There are people in that video who have 20 been in this country for decades and there are people 21 who have been in the country for months and they are 22 all telling similar stories about what it -- well, not 23 similar stories, I guess diverse stories about their 24 experience in this country. 25 4409 I think we really are trying to cast
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1 a net that really can encompass that complexity. So 2 this is really what that increase is about. It is kind 3 of venturing into that territory where you are going 4 beyond -- where you are kind of embracing the family 5 experience as opposed to just a number you would read 6 on a piece of paper. 7 4410 COMMISSIONER WYLIE: So when you say 8 in two languages, you mean Italian and English or 9 Spanish and English? 10 4411 MR. MONTESANO: Yes. Yes. 11 4412 COMMISSIONER WYLIE: And you don't 12 see any need, based on demographics and how recent some 13 communities are compared to others, to divide this 14 25 per cent, if it were allowed, more towards the 15 Italian community and increasing the third-language 16 Spanish programming based on the more recent 17 immigration? 18 4413 MR. MONTESANO: That might be part of 19 the strategy. I think what this will allow us, though, 20 is the flexibility to do both. Because I think what 21 people are asking -- I think the reason why much of 22 this programming has really touched a nerve is because 23 it doesn't -- it allows different generations to get in 24 front of the TV and share an experience together. 25 4414 I think when younger people --
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1 younger Hispanics, let's use the example of 2 Hispanics -- are hearing their story told in English as 3 well as Spanish -- because again, we are not trying to 4 exclude one from the other. I think sometimes its 5 position is "Well, you want to do more English which 6 means you want to abandon your core communities." I 7 mean, I think that doesn't speak to, I think, the 8 success of the strategy and how people have gone out of 9 their on both sides to say - 10 4415 I think the most telling thing is 11 always we often go out of our way to say to people, you 12 know, they say "Should we speak Spanish or Italian" 13 because they understand that sometimes we are trying to 14 tell these stories to all of Canada. It is a really 15 important part of our development strategy, is don't 16 just tell stories to your own community. These stories 17 are relevant enough to the country, important enough to 18 the country they should be shared with all. 19 4416 We don't tell them they have to speak 20 in English as a result of that because we go out of our 21 way to subtitle. Anyone who is speaking in the third 22 language is in regards to this type of strategy. But I 23 think that 15 per cent to 25 per cent just allows us 24 that extra bit of flexibility to not have to worry 25 about overcoming that 15 per cent and not being in
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1 compliance. 2 4417 COMMISSIONER WYLIE: You wouldn't 3 want, from what I hear, any particular restriction in 4 meeting your 55/45 how you allocate that 25 per cent as 5 between the two communities. You would want the 6 flexibility to respond yourself to the communities? 7 4418 MR. DI FELICE: I think we would want 8 that flexibility and I think there is good reason to 9 have it. I think the demographic statistics that you 10 referred to quite correctly refers to obviously the 11 maturity of the Italian-Canadian population and the 12 relative newness of the Hispanic-Canadian population. 13 4419 That being said, however, I think 14 those same statistics, that same census, indicated that 15 in both cases a majority responded that they live their 16 lives bilingually, they live their lives mixed dual 17 language and in both cases a majority indicated that 18 their home language was not of a third language. 19 4420 So that being said, I think there is 20 an appreciation for programming on both sides, but you 21 are correct that the one population has been here and 22 been in Canada longer and perhaps has more people of 23 second, third and fourth generations, 24 4421 But, as John has said, the response 25 to unilingual and bilingual programming, whether in
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1 English or in mixed language on the Hispanic side has 2 been as positive as it has been on the Italian side. 3 4422 Many of the intervenors in this 4 matter were from the Hispanic communities and went out 5 of their way to praise our efforts at making our 6 programming accessible. It has engendered a level of 7 pride in the community that I think unilingual 8 programming doesn't necessarily always do. So I think 9 that for reasons of that kind that flexibility I think 10 is appropriate. 11 4423 I think our performance as well has 12 demonstrated an attentiveness and a responsibility to 13 the type of concern that I think you are expressing by 14 seeking to define whether or not there should be strict 15 limitations on the split between our service to English 16 and our service to Italian and Spanish communities. 17 4424 COMMISSIONER WYLIE: You speak of 18 support and of course I spoke of complaints, that is 19 usually how these processes develop. 20 4425 We have had complaints from the 21 Spanish community about service and they were 22 officially filed as interventions, some were sent to 23 the Commission as form letters and the Commission has 24 asked Telelatino to respond to them. As far as I know 25 there was no response.
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1 4426 I am wondering how are complaints 2 handled if you say you are trying to meet the needs of 3 the community? How are complaints handled, number one? 4 4427 Why is there no response when there 5 is a complaint? The Commission asked for a response? 6 4428 What is or what are your feedback 7 mechanisms at the moment to respond to the Spanish 8 community's expression of concern about service that 9 they see diminishing in value to their particular 10 community? 11 4429 That was picked up in the transfer 12 decision at paragraph 17 and the Commission said that 13 it was: 14 "...encouraging TLN's management 15 to maintain and strengthen its 16 ties with the communities to 17 ensure that the service and its 18 programming are fully responsive 19 to their needs." (As read) 20 4430 So number one, what is the process 21 for handling complaints and what are the mechanisms in 22 place to achieve this feedback that I just read from 23 paragraph 17 of the transfer decision? 24 4431 MR. DI FELICE: Perhaps I can address 25 the feedback mechanisms portion of the question and
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1 John will address the complaints handling procedures 2 that we do. 3 4432 In terms of complaints feedback -- 4 and I do want to step back for a moment and acknowledge 5 that although there were letters filed in intervention 6 on this matter and in the previous matter, as you quite 7 rightly acknowledged in some cases form letters from 8 several intervenors, they were extremely outnumbered by 9 letters from all sectors of the Hispanic society in 10 Canada, including culture representatives, individuals, 11 independent producers, community representatives, 12 community social groups and consulates and foreign 13 cultural representatives as well. 14 4433 So I would want to make that comment 15 in relation to the impression that there are complaints 16 coming out of the Hispanic community on an ongoing 17 basis. I think that there is much more praise, and 18 certainly in recent years much more praise for 19 Telelatino and the letters have gone out of their way, 20 I think several -- many of the Hispanic community 21 intervention letters in this matter have pointed out 22 the improvements at Telelatino and referred to the 23 concept of improvements in our Spanish programming 24 schedule, our selection, our scheduling and our 25 promotion of Spanish programming.
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1 4434 Having said that, feedback 2 mechanisms, both formal and informal, are things that 3 we do. 4 4435 Formally, we have undertaken focus 5 groups with Italian and Spanish speakers. We have also 6 undertaken, approximately 18 months ago, a major 7 telephone survey of 600 Italian speakers and Spanish 8 speakers in both Toronto and Montreal. It was an 9 extensive survey looking into audience tastes, 10 preferences, demand for new channels, demand for new 11 programming, and generally exploring their consumption 12 of ethnic media and their reactions to some of the 13 strategies that were demonstrated in our demo reel and 14 our opening statement. 15 4436 Those are the kinds of formal 16 feedback mechanisms that we have pursued and will 17 continue to pursue. 18 4437 Informally, the very nature of our 19 channel is that we have constant contact with community 20 groups and representatives. The "Appunti" and 21 "Apuntes" and "Informese" and "Nota Bene" segments that 22 we talk about in social calendars are all built with 23 community involvement and they provide all the content 24 and they provide all the information. 25 4438 So on a daily basis Agatha Pezzi or
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1 her staff, both on the Italian and Spanish side, are 2 talking to people in the community and we have really 3 become a beacon for anybody who is involved in any 4 fund-raiser, any community event, any dinner, any 5 social group gathering, any genealogy work and people 6 trying to find their own relatives are putting their 7 messages on Telelatino through our calendar service, 8 through our 3,000 per week e-mail newsletters that we 9 have set up tlntv.com. 10 4439 So I think the informal mechanisms 11 are part and parcel of our entire strategy, our 12 programming strategy, which is to take the community 13 and put it on camera and take their events and 14 publicize them, both pre-event and post-event. 15 4440 So I think I would answer the 16 question in that way. 17 4441 COMMISSIONER WYLIE: Do you have an 18 answer as to how you handle complaints, because there 19 have been some expressed and normally the Commission -- 20 you are not a member of the CSBC so it comes directly 21 to us? 22 4442 MR. MONTESANO: We are. 23 4443 COMMISSIONER WYLIE: You are? 24 4444 MR. MONTESANO: We are a member, yes. 25 4445 COMMISSIONER WYLIE: And in some
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1 cases these were interventions I guess. 2 4446 But the form letters, were you a 3 member of the CSBC at that time? 4 4447 MR. DI FELICE: I believe it was only 5 recently, in the last fiscal year, maybe the last six 6 months. 7 4448 COMMISSIONER WYLIE: Ah, so you were 8 not. So they came directly to the Commission. 9 4449 But whether they come from us or from 10 the CSBC, how do you handle complaints? 11 4450 MR. MONTESANO: I can take that. 12 4451 The first wave is generally receiving 13 phone calls. We don't receive a lot of complaints, but 14 we do have dedicated people at the station who take 15 calls from community members on an ongoing basis, both 16 positive and oftentimes people calling in with 17 concerns. 18 4452 We are not sure what the reality is 19 at other TV stations. There is a real passionate 20 relationship with the station. People do not like to 21 leave their names on machines at Telelatino, so we have 22 really gone out of our way again to ensure that there 23 is community relations people that are on the phone 24 taking in calls, writing down what people are saying. 25 4453 We also use that as an opportunity to
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1 not only write down what people are saying, but also to 2 ask them questions about what they would like to see on 3 the station. In the last six months we have initiated 4 a monthly kind of informal meeting of some managers and 5 some staff who are taking in these calls to just go 6 through the ongoing reactions to what we do on the 7 channel, for one. 8 4454 Secondly, when we do get a formal 9 complaint from CSBC we go through -- we usually bring 10 this up at management meetings, kind of review the 11 concerns and put together a formal reply, which we 12 recently did on a matter that was not specific to the 13 Hispanic community but there was a formal procedure in 14 place in terms of how we meet on a weekly basis to kind 15 of respond to any of those concerns. 16 4455 Our overall strategy has been not to 17 kind of -- not to kind of passively wait for complaints 18 to take place. When they do, if they are in the form 19 of a letter we tend to reply in the form of a letter. 20 We often get people writing in asking us questions and 21 stating some concerns through web sites, especially on 22 the Hispanic side. 23 4456 The Hispanic side is generally a bit 24 younger, a bit more kind of media-computer savvy, very 25 plugged in, so they are writing in e-mails. We have
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1 people who actually go through those e-mails on an 2 ongoing basis and reply whenever possible to those 3 types of questions on an ongoing basis. Whenever there 4 is something that kind of steps beyond a quick 5 response, those are passed on to us as well and that 6 tends to go to a manager and a manager tends to kind of 7 get involved and get back to people directly. 8 4457 The other thing we have done in terms 9 of trying to encourage that ongoing reaction is we now 10 have a three-minute program that we have put in at the 11 back end of our telenovela, which is one of the most 12 popular things that Telelatino puts on its station, and 13 what this is is the show "Usted Decide" and a show that 14 actually encourages people to send in their responses 15 on an issue of the week. As well, it also encourages 16 them to give us feedback. 17 4458 So those are also monitored on an 18 ongoing basis and we specifically put that into a time 19 slot evening broadcast where we knew a lot of people, 20 tens of thousands of people would be watching the 21 program. That has turned out to be a fantastic success 22 and that is a community member who is hosting that show 23 for us. 24 4459 So it really depends on how people 25 raise the concern. We usually respond in -- if it is a
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1 letter, we will respond in a letter, if it is something 2 through CSBC we will respond through the CSBC and 3 onward. 4 4460 COMMISSIONER WYLIE: I was dyslexic. 5 I should have said CBSC and now I have you corrupted. 6 4461 It remains that we have complaints on 7 our files about your service to the Spanish community 8 and after the break I will want to go through the 9 schedule with you. 10 4462 I have highlighted on the block 11 schedule that you have provided in the last 10 days 12 what is identified as Spanish programming and I will 13 raise with you the fact that there is no Spanish 14 programming from 7:30 to midnight during the weekdays, 15 or on the weekends, and that the Spanish programming, 16 never mind Canadian or foreign, there is none, and that 17 the Spanish programming is very early in the morning 18 and during the night and ask you -- certainly during 19 the week days there is more on Saturday, none on Sunday 20 until after midnight. 21 4463 I will ask you to identify what these 22 programs are and to what extent that serves the 23 Hispanic community to the level of 45 per cent if you 24 think that scheduling has any importance and if you 25 were a Spanish speaker whether no Spanish programming
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1 between 7:30 and midnight is 45 per cent service of 2 your specialty. 3 4464 Thank you, Mr. Chairman. 4 4465 THE CHAIRPERSON: So we will start 5 with your answer in 10 minutes. 6 --- Upon recessing at 1130 / Suspension à 1130 7 --- Upon resuming at 1143 / Reprise à 1143 8 4466 THE CHAIRPERSON: Order, please. A 9 l'ordre, s'il vous plaît. 10 4467 The answer? 11 4468 MR. DI FELICE: In relation to 12 Spanish-language programming and in particular its 13 scheduling. 14 4469 First of all, as to the quantum, just 15 as in introduction, the 45/55 split is in fact 16 exceeded, has been exceeded certainly over recent years 17 by Telelatino. On average over the last six and 18 12 months I believe that is closer to 50/50 our actual, 19 so we are exceeding the 45 per cent minimum on the 20 Spanish-directed program. In many cases it actually 21 exceeds 50 per cent, depending on what we are doing 22 during the year. 23 4470 But as to scheduling, compared to 24 historical schedules that I have looked at from years 25 gone by and during the earlier years of the current
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1 license term, we have actually increased the amount of 2 Spanish-language programming in the fixed schedule that 3 you see here by half an hour Monday to Friday in the 4 evening. 5 4471 In addition, we introduced this past 6 year late-night programming after the 11 o'clock news 7 also in Spanish on Monday and Tuesday. Those are both 8 Spanish-language shows. 9 4472 But the bulk of our activity on the 10 nesting of Spanish-language programming within our 11 schedule isn't actually apparent from the block 12 schedule that we filed, which is actually very, very 13 frequent and substantial and has been referred to by 14 many of the intervenors. 15 4473 John I think can provide some of the 16 details regarding the Spanish-language programming we 17 actually do broadcast both during the evening broadcast 18 period and in prime time. 19 4474 MR. MONTESANO: Well, what doesn't 20 appear in the block program schedule are the community 21 segments that we do throughout the week. These are 22 interwoven throughout our international programs, 23 generally about 90 seconds long. They both include the 24 "Nota Bene", "Informese", community event-type 25 segments, plus the community calendar segments. Those
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1 have been very successful because, again, they are 2 running at peak viewing periods attached to programs 3 that are widely popular. 4 4475 As well as that, what doesn't appear 5 on this because much of our programming is special 6 event-driven programming, particularly on the Spanish 7 side. What we have been doing over the last -- let me 8 just give you an example of the types of specials. We 9 are talking two-three hour specials, these are not half 10 hour programs, they are major international events from 11 around the world that have appeared in prime time, in 12 evening broadcasts and prime time throughout our 13 schedule. 14 4476 They include the "El Premio ASCAP 15 Music Awards" out of Miami, "Viña del mar" that is a 16 24-hour music festival out of Chile and we broadcast 17 one hour in late night throughout a week and then we 18 put the three hour finale in prime time during a 19 weekday. 20 4477 Currently we are in the midst of a 21 four-week series of specials called "Latin Beauties 22 Series". Last night was Ms Venezuela -- last week, the 23 week before was Ms Columbia, the week before that was 24 Ms Mexico and next week is Mr. Venezuela, appearing 25 Tuesday night, nine o'clock, prime time, and they
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1 include creative captioning. We have been getting some 2 wonderful media on that initiative and that is again a 3 Spanish-language program. 4 4478 Last year we had programmed in our 5 Saturday night slot, we had an international film slot 6 that included half the films in Spanish, half the films 7 in Italian language, all of them subtitled. 8 4479 Last summer we featured the "Copa 9 America" throughout our programming, hours upon hours 10 of Spanish-language play-by-play Copa America games 11 including all the way up to the final. 12 4480 In a few weeks we are going to have 13 the Latin Billboard Awards on Telelatino in prime time, 14 again a three-hour special. 15 4481 In June we are going to be providing 16 perhaps up to 75 games coverage of the World Cup, a 17 preeminent international sporting event. Probably 18 about 95 per cent of those games are going to be in 19 Spanish language. In the first two weeks alone from 20 seven o'clock to nine o'clock every day for two weeks 21 there will be a Spanish language play-by-play game. 22 4482 So it is difficult to put that in a 23 block program schedule because they kind of pop in and 24 pop out and our attitude is always try to do something 25 special on an ongoing basis and whenever we have an
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1 opportunity we include it. 2 4483 The other thing that we have done in 3 terms of a programming shift to address some of these 4 concerns was, we put our telenovelas back to back 5 because what we have found through surveys was that a 6 lot of our Spanish-language viewers who loved 7 telenovelas were watching the Italian telenovela and a 8 lot of our Italian-language viewers were watching 9 Spanish telenovelas. There was a crossover audience 10 there. 11 4484 So we actually moved the news that 12 used to split those two audiences after the telenovela 13 and put those back to back so that we can have an 14 extended telenovela audience that could flow more into 15 prime time. 16 4485 COMMISSIONER WYLIE: Those specials 17 you mentioned that would be integrated into the 18 schedule and presumably preempt the programming that is 19 there, does that occur for Italian programming as well? 20 4486 MR. DI FELICE: We do have various 21 specials in Italian as well, but as John pointed out I 22 think most of our special event programming happens to 23 be Hispanic-oriented special event programming. 24 4487 What I would add as well is that we 25 are always keeping in mind the balancing act that I
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1 referred to earlier, their expectations on both sides, 2 on the Hispanic side and the Italian side. The 3 long-standing schedule, specialty scheduling of 4 9:00 p.m. two hour programs in Italian, primarily from 5 RAI in Italy, is an expectation among our viewers and 6 our advertisers that is difficult to resist. 7 4488 We have taken the approach of 8 periodically interrupting that flow and thereby 9 introducing Spanish-language programming in prime time 10 in the manner that John described. I think that is the 11 least disruptive because, of course, once again there 12 is a tension. Each time we do broadcast 13 Spanish-language programming in a traditional Italian 14 programming slot we get the opposite reaction that you 15 are referring to, which is the Italian community 16 commenting on the drastic increase in Spanish-language 17 programming. So it is a balancing act. 18 4489 COMMISSIONER WYLIE: Does it remain, 19 however, that other than the micro-programs which I 20 will discuss with you next, that this schedule tells me 21 that if I am a Spanish speaker on an ongoing basis I 22 will not have the assurance or the scheduled assurance 23 that I will have programming in Spanish between 7:30 24 and midnight? 25 4490 MR. DI FELICE: I think that in
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1 fact -- 2 4491 COMMISSIONER WYLIE: This schedule 3 doesn't lie, in other words, that that is Italian block 4 programming between that period and early morning and 5 overnight is Spanish programming during the week and 6 some afternoon as well? 7 4492 MR. DI FELICE: This schedule is 8 actually -- I mean, a good example of how the -- 9 there are two pages to this schedule, the block 10 program schedule, the CRTC Schedule B, and then the 11 accompanying more detailed TLN schedule that comes 12 with it. 13 4493 For instance, on Tuesday, April 30th, 14 in the week that this schedule represents, there is a 15 special that is a Spanish-language special that is 16 interrupting two hours of what is normally an Italian 17 prime-time slot from 9:00 p.m. to 11:00 p.m. Tuesday, 18 April 30th. 19 4494 So in terms of answering your 20 question as to what Hispanic viewers can come to expect 21 from TLN's evening broadcast period schedule or 22 prime-time schedule, I think that in recent years they 23 have actually come to expect that these specials are 24 regular and are continuing. I think there is a long 25 list of specials that we referred to that comprise a
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1 large number of hours of Hispanic programming in 2 prime time. 3 4495 COMMISSIONER WYLIE: I would like to 4 go back to these micro-programs which I was going to 5 ask you how long, but I understand they are 90 seconds. 6 They would be in both Italian and Spanish and will 7 presumably connect that as well to the Canadian 8 content. 9 4496 You use them, you say, to Canadianize 10 or contextualize the foreign programming. How many of 11 those would one normally see between 6:00 and midnight, 12 of these 90 -- I guess they are like interstitials or 13 they are inserted in reasonable spots in the 14 programming. 15 4497 MR. MONTESANO: Yes. 16 4498 COMMISSIONER WYLIE: How many 17 90-second ones would there be between 6:00 and 18 midnight? 19 4499 Next, how many would be in Spanish, 20 considering that it is mostly Italian programming? 21 4500 MR. MONTESANO: Well, each week there 22 are three -- the strategy is that they appear 18 times 23 throughout our schedule. From 6:00 to 12:00 three 24 different types of Spanish-language interstitials 25 appear in the schedule, using during the Spanish time.
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1 They are "Usted Decide" which is the call-in show. 2 4501 COMMISSIONER WYLIE: When there is no 3 Spanish, then what happens? 4 4502 MR. MONTESANO: That is why they 5 appear -- 6 4503 COMMISSIONER WYLIE: Oh, between 6:00 7 there is the news. 8 4504 MR. MONTESANO: They appear from 6:00 9 and 7:30, yes. 10 4505 COMMISSIONER WYLIE: But from 7:30 on 11 let's say? 12 4506 MR. MONTESANO: From 7:30 on the 13 Italian ones will appear, except for Monday and 14 Tuesday. These are pre-scheduled, titled programs that 15 are cast in our telecasts every week and they are 16 packaged in with programs. So on Tuesday late-night 17 you might get one because there is a Spanish show late 18 night and Monday late night you might get one because 19 they are kind of worked in and interwoven into the 20 shows. 21 4507 But I can tell you that on average 22 three -- I believe it is three to four appear between 23 6:00 and 7:30, and then from 7:30 to 11:00 I think 24 another three to four Italian language ones will 25 appear. That is generally how it works out.
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1 4508 COMMISSIONER WYLIE: But you are 2 saying that there would be some, for example, at 2:00 3 in the morning when there is Spanish content? 4 4509 MR. MONTESANO: There is also that, 5 yes. They actually appear 18 times. Every single one 6 we do appears 18 times throughout the schedule, which 7 is the benefit of these, because what they actually are 8 is, as well as contextualizing our international 9 programs, they actually are cameras out in the 10 community so they are often promoting, reflecting, they 11 are actually supporting initiatives that go on in the 12 community. 13 4510 So the reason they are so successful, 14 and people call us time and time again, it is because 15 they want them to appear often throughout the schedule 16 so people who are watching them in the morning can see 17 them and they will see them again in the afternoon and 18 they will see them again in the evening and it kind of 19 reinforces either the promotion of an event or 20 information that was gathered out of an event or some 21 educational work that was done in the community, so 22 they are kind of interstitials that run through our 23 schedule often culturally driven. That is the idea. 24 4511 They run generally three to four 25 times during the Spanish -- the Spanish language ones
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1 run three to four times between 6:00 and 7:30 and the 2 Italian ones run three to four times during the 3 Italian evening. 4 4512 COMMISSIONER WYLIE: So they are 5 connected. The language is connected to the language 6 of the program? 7 4513 MR. MONTESANO: Yes. 8 4514 COMMISSIONER WYLIE: Do I understand 9 correctly that they are a minute and a half each and 10 they are calendar-like of information-like as to what 11 is going on in the community? There is no time in 12 90 seconds to develop a program about how to understand 13 the labour law in Canada to a new immigrant or this 14 type of programming, or it is not a variety program 15 either from the community? They are more like a 16 calendar, almost a text? 17 4515 MS PEZZI: Well, actually on the 18 Spanish side we have three different micro-segments or 19 community segments. There is the Apuntes, which is the 20 daily calendar and it is basically a voice over with 21 some graphics explaining to people -- basically a 22 promotion vehicle for organizations that have to 23 promote their upcoming events or book launches or 24 fund-raisers and things like that. So that runs. That 25 is Apuntes. That is our daily calendar.
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1 4516 We also have "Informese", which is 2 more of a community segment. That is where our cameras 3 are going out into the community covering more events 4 more of the time. We found that the only way that we 5 could use our limited resources to address the needs of 6 the community to adhere to -- or to respond basically 7 to the calls we get to come out and cover all the 8 events that are happening is to produce these 9 micro-segments. 10 4517 But another added layer to the 11 "Informese", if I may say, is that we don't just go out 12 and cover the events. Our cameras don't simply go, 13 shoot and come back. Our on-air personalities, our 14 producers and our camera people are basically PR 15 people. They go out, they shake hands, they share 16 bread, they build relationships with the community so 17 now all of our on-air personalities are on a 18 first-name basis with heads of community groups 19 and things like that. 20 4518 So what we have managed to do is 21 embark on an ambitious outreach campaign, and that is 22 what has made "Informese" so popular with us. 23 4519 COMMISSIONER WYLIE: So you have 24 facilities to that extent at least. I know you have a 25 condition of license that prevents you from doing news,
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1 information and actualities. If that condition of 2 license were removed would you then have the 3 wherewithal to expand these 90-second micro-programs to 4 a larger information program, which from what I read 5 from the complaints of the community is what the 6 Hispanic community finds is lacking and that some 7 programs that they had in the past have been reduced 8 dramatically. 9 4520 Because in 90 seconds, yes, you can 10 announce a book launch, et cetera, but you are not 11 going to have a program with any depth. Even if you 12 had a 15-minute newscast there is a lot of foreign news 13 in Spanish. Could you, with the equipment and the 14 capacities you have now, benefit from removal of that 15 condition? 16 4521 MR. MONTESANO: I am going to throw 17 to Aldo in terms of -- 18 4522 COMMISSIONER WYLIE: Beat the 19 complaints. 20 4523 MR. MONTESANO: Yes. Yes, I am going 21 to throw to Aldo in terms of answering the news 22 question. 23 4524 I just wanted to add a bit more 24 information in regards to the work that we do to expand 25 some of those community segments.
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1 4525 Oftentimes we do go to an event, and 2 that is generally what becomes our spotlight shows, 3 which are longer form. If we are at an event and there 4 is a lot of material and it becomes something really 5 substantive, or if we know ahead of time that it is 6 going to be -- most recently we actually produced a 7 half hour program in conjunction with the Ontario Art 8 Gallery in regards to a Latin American arts and craft 9 show that was at the gallery for an extended period of 10 time. So that was something that was substantial 11 enough. We do this on a weekly basis so we kind of 12 pick and choose which micro-segments to take above and 13 beyond. 14 4526 The other story I wanted to tell 15 before I throw to Aldo is the issue of longer-form 16 shows becoming community segments or these smaller 17 segments. I just wanted to pass on a story about how 18 these segments have really provided, in our opinion, 19 oftentimes a better service to the community. 20 4527 "Usted Decide" used to be a 21 longer-form show. We sat down with the host of the 22 show and said "Look, how would you like to do something 23 that is spread across micro-segments throughout the 24 week? We feel this would really -- we can interweave 25 this with our more popular shows and we feel the
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1 response from viewers would be a lot -- it would be a 2 lot more successful". 3 4528 He agreed with the test. At first he 4 was like "I'm not sure, you know, it sounds like less". 5 But we said "Well, look, let's test this out, because 6 every time we have done this it has been wildly 7 popular. More people call, more people are connecting 8 with us." 9 4529 So he tried this out. He has been 10 doing it now for a year, because they are more than 11 just segments on TV. He is attached to our web site so 12 he is using it as a way to kind of get to a lot of 13 viewers and share with them information through 14 tlntv.com, through his own personal contacts, and he 15 has gone out of his way a couple of times to stop us in 16 the hallway and say "Thanks for coming up with that 17 idea", because it is achieving what he wants to 18 achieve, which is reach people and share information as 19 opposed to just have a longer-form show. 20 4530 I will throw to Aldo for the news 21 question. 22 4531 MR. DI FELICE: And I think that show 23 does actually do a lot of what you referred to, Madam 24 Wylie, the immigrant services or those types of social 25 issues are what "Usted Decide", Mario Bianci does in
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1 his three-minute segment. 2 4532 With respect to your question on 3 news, these segments aren't news segments, they are 4 community happenings of various nature. When they are 5 worthwhile doing in a longer format we do, and we have 6 produced I think 24 half-hour spotlights over the past 7 year or so. So we do a longer format program when it 8 warrants. 9 4533 With respect to news itself, though, 10 we have never been set up to do news and, as you know, 11 as you have pointed out, there is a condition 12 prohibiting us from doing news and actualities. 13 4534 Having said that, we haven't 14 determined -- as a result of the condition being there, 15 we haven't determined, nor has there been any great 16 request for a TLN-produced Canadian news show from the 17 people in the community that we talk to. 18 4535 We understand that there are some 19 intervention letters that have referred to a news show 20 and have referred to a previous news show that used to 21 be aired years ago, not on Telelatino but on another 22 network, but we would have to look at the feasibility, 23 we would have to look at the demand, we would have to 24 look at the logistics and technical infrastructure. It 25 would be a departure, through, from the production and
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1 Cancon strategy that we have related to you here today. 2 4536 COMMISSIONER WYLIE: But you would 3 have no problem with removing the condition? It 4 doesn't mean that the Commission would require you to 5 do news. 6 4537 MR. DI FELICE: No, a removal of the 7 condition is not something that we would object to. 8 4538 COMMISSIONER WYLIE: Now, Canadian 9 content in Spanish, what is currently the Canadian 10 content between -- I am just looking at the Canadian 11 content in Spanish on the block schedule between -- I 12 have difficulty -- 6:30 to 8:00. 13 4539 What is that program currently in the 14 two-hour block? 15 4540 MR. MONTESANO: In that from 6:30 to 16 eight o'clock? 17 4541 COMMISSIONER WYLIE: Yes. 18 4542 MR. MONTESANO: Those are flagship 19 Canadian programs that have been dubbed into Spanish. 20 So they are children's programs for the most part. 21 4543 COMMISSIONER WYLIE: What is it in 22 particular? 23 4544 MR. MONTESANO: Oh, the programs 24 are -- the names of the shows? 25 4545 COMMISSIONER WYLIE: Yes, in English.
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1 4546 MR. MONTESANO: In English. Shows 2 like "Richard Scary", "Little Lulu" and "White Fang" 3 are presently what is there. 4 4547 COMMISSIONER WYLIE: Okay. Then 5 there is "Passions" from the U.S.A. 6 4548 The next Canadian is 8:30. What 7 is that? 8 4549 MR. DI FELICE: Monday morning. 9 4550 MR. MONTESANO: That includes -- yes, 10 Monday morning. 11 4551 COMMISSIONER WYLIE: That is Monday 12 to Friday in both cases? 13 4552 MR. MONTESANO: Yes. Monday morning 14 is a community-oriented showed called "Hispaños en 15 Canada", it is a Canadian content show. From Tuesday 16 to Saturday is another Canadian-made program called 17 "Food Essence" dubbed into Spanish. 18 4553 COMMISSIONER WYLIE: It is in English 19 dubbed into Spanish? 20 4554 MR. MONTESANO: Yes. 21 4555 COMMISSIONER WYLIE: Then at 8:30 you 22 have the Spanish religious on Monday and Thursday and 23 then a telenovela from Mexico. 24 4556 The next Canadian, then, after 9:30, 25 after the religious program, is after midnight.
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1 Correct? 2 4557 MR. MONTESANO: Yes. 3 4558 COMMISSIONER WYLIE: The next 4 Canadian in on Thursday -- 5 4559 MR. MONTESANO: Yes. 6 4560 COMMISSIONER WYLIE: -- at midnight. 7 What is that? 8 4561 MR. MONTESANO: That is often our 9 specials that we have produced throughout the year. So 10 right now we have "Carnival", "TLN Carnival", so it is 11 highlights from our Carnival music festival that 12 took -- 13 4562 COMMISSIONER WYLIE: And when you 14 don't have a special? 15 4563 MR. MONTESANO: Those are ongoing 16 specials because we produce them throughout the year. 17 4564 COMMISSIONER WYLIE: There is one. 18 4565 MR. MONTESANO: Yes. 19 4566 COMMISSIONER WYLIE: Then there is 20 Canadian Spanish from two o'clock in the morning until 21 really -- it goes through the night and starts in the 22 early morning. 23 4567 What is from two o'clock in the 24 morning to 6:30? 25 4568 MR. MONTESANO: From three o'clock in
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1 the morning? 2 4569 COMMISSIONER WYLIE: Yes, three 3 o'clock, excuse me. 4 4570 MR. MONTESANO: From three o'clock 5 until six o'clock I believe are repeats of our morning 6 programs. 7 4571 COMMISSIONER WYLIE: Of "Emily of New 8 Moon" and "White Fang" and your cartoons, et cetera. 9 4572 MR. MONTESANO: And "Food Essence". 10 4573 COMMISSIONER WYLIE: Then you have 11 some -- 12 4574 MR. MONTESANO: And some different 13 ones as well, excuse me. 14 4575 COMMISSIONER WYLIE: How many of them 15 are dubbed cartoons? 16 4576 MR. MONTESANO: Three-quarters at 17 this point. 18 4577 COMMISSIONER WYLIE: Then on Saturday 19 you have quite a bit of Spanish programming in the 20 forenoon, sports news, Spanish news, et cetera. What 21 else is in there, because that is a big block of 22 Spanish. 23 4578 MR. MONTESANO: A lot of that is 24 information-based programming from CNN en Español, so 25 finance news, travel, health.
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1 4579 COMMISSIONER WYLIE: The Canadian 2 portions? 3 4580 MR. MONTESANO: No, those are the 4 non-Canadian portions. The Canadian portions are 5 "Hispaños en Canada", the community show, a repeat of 6 "Hispaños en Canada", the community-based show. The 7 other ones are more children's programming. 8 4581 COMMISSIONER WYLIE: On Sunday, one 9 o'clock in the morning. Film. Would that be Canadian 10 film? 11 4582 MR. MONTESANO: That is a film. No, 12 international film. 13 4583 COMMISSIONER WYLIE: What about the 14 one at 6:30? 15 4584 MR. MONTESANO: Six-thirty is a 16 repeat of one of the Saturday shows. 17 4585 COMMISSIONER WYLIE: Now, it is no 18 secret that when the transfer was approved the 19 community thought, ah, you know, this is an opportunity 20 to say we want better service, specifically from the 21 Hispanic community. Of course the transfer decision 22 and the Notice of Public Hearing for this exercise 23 repeated what the Commission would look at and what 24 the complaints had been and what the promises were that 25 had been made.
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1 4586 In your supplementary brief at page 2 2 you talk about alliances that have been made with 3 companies like Nelvana, et cetera. Is that what that 4 is, they are cartoons that are already owned and are 5 dubbed into Spanish and then become a large portion of 6 the Spanish-language programming on the service? 7 4587 MR. DI FELICE: Well, we have 8 acquired Canadian content, both live action, both 9 family and children's Canadian content from Sunar, from 10 Nelvana, from Salter Street, from Alliance Atlantis, 11 and perhaps one or two others whose names escape me. 12 4588 Those are Canadian-made programs, 13 Canadian content programs that have been dubbed into 14 Spanish. There are also some Canadian-made programs 15 that we are trying to acquire in Italian as well. 16 4589 COMMISSIONER WYLIE: And some of 17 these programs would be on other Corus services, right, 18 and then simply dubbed and run in Spanish on 19 Telelatino? 20 4590 What is the proportion of those and 21 where do these cartoons come from and sports? 22 4591 MR. DI FELICE: These cartoons were, 23 I think -- 24 4592 COMMISSIONER WYLIE: Do you buy them 25 directly --
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1 4593 MR. DI FELICE: Yes. 2 4594 COMMISSIONER WYLIE: -- from Nelvana? 3 4595 MR. DI FELICE: We actually bought 4 most of -- I think all of this material prior to Corus 5 taking control of Telelatino. In fact prior to Corus 6 having the 20 per cent interest in Telelatino we did 7 pursue and acquire and schedule and program Canadian 8 content, high level Canadian content that was not first 9 run but that -- 10 4596 COMMISSIONER WYLIE: Yes, but was it 11 cartoons? 12 4597 MR. DI FELICE: -- but that was 13 second run. 14 4598 COMMISSIONER WYLIE: Because, you 15 know, to the extent that -- 16 4599 MR. DI FELICE: It included cartoons, 17 it included live action, kid's shows, and it included 18 live action family. 19 4600 COMMISSIONER WYLIE: To the extent 20 that it does now as compared to the Italian? 21 4601 MR. DI FELICE: Yes. Yes, it did. 22 4602 COMMISSIONER WYLIE: In your 23 deficiency response at page 8, the first deficiency 24 response, the March one, you talk about a Canadian 25 series being bought from a Halifax-based production
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1 company. Is that from Salter Street -- 2 4603 MR. DI FELICE: Yes. 3 4604 COMMISSIONER WYLIE: -- "Emily of 4 New Moon"? 5 4605 MR. DI FELICE: Yes. 6 4606 COMMISSIONER WYLIE: What is the 7 other one? 8 4607 MR. DI FELICE: I'm sorry, the 9 other -- excuse me? 10 4608 COMMISSIONER WYLIE: It says, "two 11 Canadian series". 12 4609 MR. DI FELICE: Oh, "Food Essence" I 13 think was also a Salter Street program. 14 4610 COMMISSIONER WYLIE: "Food Essence"? 15 4611 MR. DI FELICE: "Food Essence". 16 4612 COMMISSIONER WYLIE: So your view is, 17 if I pulled out a schedule of Spanish programming, you 18 have been on -- service has been going on for quite a 19 long time, since 1984. If I pulled one out from eight, 20 nine, ten years, seven years, six years ago, I would 21 see no reduction as claimed by the Spanish community in 22 the Canadian content programming that is not dubbed but 23 that is produced for the community? 24 4613 MR. DI FELICE: I think we are 25 producing more -- I am quite certain we are
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1 producing -- like when we are talking about only our 2 original Telelatino-produced Canadian content in 3 Spanish, we are producing more than we were six 4 years ago. 5 4614 But I think to provide further 6 clarification, the same explanation that we provided 7 earlier relating to the nature of our schedule and the 8 special-driven scheduling of our programming applies to 9 Cancon. 10 4615 So we could go through I think a list 11 of Canadian original Telelatino-produced content in 12 Spanish that has appeared on our schedule in the last 13 year, and more specifically has appeared in the evening 14 broadcast period. We previously referred to the 15 TLN spotlights, some of which are in Spanish, some of 16 which are in Italian. There are several that we can 17 talk about that have appeared recently. They appear 18 during the evening broadcast period. 19 4616 Furthermore, our "Latin Heritage 20 Series" programs are all broadcast in prime time and 21 those include both Italian and Spanish-oriented 22 programs. 23 4617 COMMISSIONER WYLIE: At paragraph 14 24 of that decision, of the transfer decision, the 25 Commission said it:
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1 "...expected the management to 2 find constructive solutions to 3 the concerns about Spanish 4 programming raised by the 5 Canadian Hispanic Congress." 6 (As read) 7 4618 What would be your reaction to a 8 requirement of a certain percentage of Spanish 9 programming from 6:00 to midnight, which is all 10 devoted to the Italian community when your condition of 11 license is a division 55/45? Suppose we didn't apply 12 exactly that ratio, but you say that there are programs 13 over time. 14 4619 Perhaps after lunch you can suggest 15 what would be a reasonable imposition of a percentage 16 of programming directed to the Hispanic communities in 17 the timeframe that people watch more TV, which is not 18 2:00 or 3:00 in the morning, or six o'clock either. 19 4620 Anyway, you can come back -- 20 4621 MR. DI FELICE: Thank you. 21 4622 COMMISSIONER WYLIE: -- as to what 22 you would feel is, for all I know, reflective of what 23 you do now, because your response is, "We do some 24 specials and they are not shown in the block schedule." 25 Well, I suppose there are the Italian ones too, is my
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1 point, and where does that leave the Spanish community 2 in those hours. 3 4623 Just a few questions before lunch. 4 4624 You talk at Schedule D about the 5 production of a series of historical programs with 6 English subtitles or in English, which you mentioned 7 today. How many of those will be Spanish and how many 8 Italian that are already in the works? 9 4625 MR. DI FELICE: The "Hispanic 10 Heritage Series" is -- 11 4626 You would like to talk about that? 12 4627 MR. MONTESANO: Yes. Presently there 13 is a series of 14 programs, documentaries and specials 14 in development. These include a wide range of topics. 15 The exact number, let me just -- because we really try 16 to kind of develop projects that whenever possible -- 17 well, there were two strategies here. 18 4628 One was let's create Canadian content 19 that is enduring that we can put into prime-time 20 schedules that our community can kind of embrace, that 21 all of our viewers, our advertisers, everyone that kind 22 of is connected to the station, our community groups 23 could really embrace. So the emphasis was on quality 24 and accessibility. 25 4629 Once we started with that we said,
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1 "Okay, well let's come up with a couple of ideas that 2 have crossover appeal." so stories like a one-hour 3 special on Father Jenny Caporelli, who works for an 4 organization called Caritas which organizes substance 5 abuse programs specifically for the Italian and 6 Hispanic communities, and I believe also the Portuguese 7 communities. That is something we felt had crossover 8 appeal. So although it is about -- because we find 9 there is just a lot of crossover between the 10 communities that we serve, on the one hand. 11 4630 Secondly, there is another -- there 12 is the Hispanic Canadian, so we did the Italian 13 Canadians, produced, broadcast. We are at the back end 14 now of producing, set to broadcast in the fall, the 15 Hispanic Canadians long-form documentary as well. So 16 there was that. 17 4631 But I would say, you know -- I'm just 18 trying to look here at a breakdown. I didn't actually 19 do a percent. 20 4632 COMMISSIONER WYLIE: Well, perhaps 21 you can come back with that as well. We have to break. 22 4633 MR. MONTESANO: You bet. Okay. 23 4634 COMMISSIONER WYLIE: There is also a 24 Schedule 1c I would like you to look at which is from 25 March. These are the documentary series in process.
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1 If I remember, they were filed in response perhaps to 2 closed captioning, I'm not sure. 3 4635 But when I go down the list of these 4 documentaries, there aren't too many Hispanic ones. 5 There are a couple that I can't tell which it is. I 6 would like you to look at that and see what is your 7 view about how this 55/45 should guide you in your 8 efforts. 9 4636 Thank you. 10 4637 THE CHAIRPERSON: Thank you. 11 4638 We will break now and resume at 2:15. 12 --- Upon recessing at 1213 / Suspension à 1213 13 --- Upon resuming at 1415 / Reprise à 1415 14 4639 THE CHAIRPERSON: Order, please. A 15 l'ordre, s'il vous plaît. 16 4640 Madam Wylie. 17 4641 COMMISSIONER WYLIE: Welcome back and 18 thank you, Mr. Chairman. 19 4642 When we last saw each other we were 20 looking at that Schedule 1c and those are documentary 21 series in process at the moment. 22 4643 MR. MONTESANO: Recently completed. 23 4644 COMMISSIONER WYLIE: Recently 24 completed. 25 4645 MR. MONTESANO: Yes.
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1 4646 COMMISSIONER WYLIE: Those I will 2 have a couple of questions about the benefits later, so 3 those were in the course of production. They are not 4 related to the $1.1 million benefit? No. 5 4647 So some of them are clearly 6 identified as Italian and some clearly, not many, 7 identified as Hispanic and some I don't know. So when 8 you do a count of those, what would the ratio be 9 between the two groups? 10 4648 MR. MONTESANO: There are 11 13 projects. One of them is purely related to the 12 Hispanic, two of them are related to both and the rest 13 are all Italian. 14 4649 This was a pilot project series, this 15 group of 13. There are more to follow. There are more 16 in development right now. 17 4650 What we aimed to do at this stage was 18 to mirror on the Spanish side the word we have done on 19 the Italian side. So let's a few of them. 20 4651 "Persona" is one example, the 21 biography series. We have now in development a similar 22 series on the Spanish side. 23 4652 The same thing with "Regarde", 24 Memories, on the Spanish side there is a similar 25 series.
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1 4653 So I think we intentionally came up 2 with ideas that we could mirror as the projects 3 unfolded. 4 4654 So the idea here was -- again I am 5 not talking about the benefits. These are 6 unprecedented series at Telelatino. 7 4655 How we launched them was, we went to 8 independent producers, we went to our advertisers, we 9 went to people who would get excited about helping 10 these become a success, because the concept was that we 11 wanted to create long lasting programming for 12 Telelatino that would speak to our constituents. 13 4656 This is one of the reasons as well 14 they were a bit more heavily slanted on the Italian 15 side. We were successful with the first few series. 16 The first two were "Pier 21" and "Persona" and we got 17 advertising -- for "Pier 21", which was the first, we 18 did get a major Italian advertiser to support it and 19 put money into it. So we are really happy to see that. 20 This had really led to more development, more 21 discussion, more work with independent producers. 22 So the eventual goal is to balance these out and to 23 get 50/50. 24 4657 COMMISSIONER WYLIE: Yes. Is there 25 something as interesting as the Italian wedding in the
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1 Spanish community? 2 4658 MR. MONTESANO: Yes. 3 4659 COMMISSIONER WYLIE: Do you have a 4 Spanish wedding? 5 4660 MR. MONTESANO: You know what, there 6 are things like the inordinate number of Salsa dancing 7 clubs that have sprung up in urban centres. 8 4661 COMMISSIONER WYLIE: That you could 9 use, yes. 10 4662 MR. MONTESANO: Absolutely. 11 4663 COMMISSIONER WYLIE: I don't know if 12 you have seen -- is it "Monsoon Wedding"? There is 13 something particular about the effect of weddings in 14 each culture probably. 15 4664 But obviously the point of the 16 questions is to respond to this concern that this is a 17 55/45 service and the Hispanic community deserves a 18 similar look. 19 4665 With independent producers, is it 20 easier to find producers in the Italian community 21 because of the generational or completeness of the 22 immigration patterns, et cetera, more established in 23 Canada than it is to find Spanish producers? Does that 24 have anything to do with it, the age of the 25 immigration?
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1 4666 Because you are serving two groups 2 which I see as old immigrants that have stratified very 3 much like the mainstream and newer, and not only that 4 but from varied communities simply combined by the 5 language they speak, not by their source. 6 4667 Is it easier in the Italian community 7 to get producers? 8 4668 MR. DI FELICE: If I may, I don't 9 think it is actually easier. We have found that there 10 is a deep well of different people who have audiovisual 11 production experience in both communities. 12 4669 On the Hispanic side actually, we are 13 working with a few freelance independents who have 14 extensive experience in their home countries and a 15 number years of experience. 16 4670 On the Italian side we are working 17 usually with younger people who do have all their 18 experience in Canada as opposed to all their experience 19 in Chile or Peru or Argentina. 20 4671 So there are very talented people who 21 were Hispanic who were available to us in Toronto that 22 we were discovering over the last 24 months. In fact, 23 we hired one of those people actually in the last year 24 to be our Broadcast Operations Manager, a 25 Peruvian-Canadian who has about 25 years of production
811
1 experience, senior production experience in Peru. 2 4672 COMMISSIONER WYLIE: So there is no 3 reason, then, to believe that it won't be -- that it 4 will be difficult to have a Schedule 1c that would have 5 a greater ratio of product aimed at the Hispanic 6 communities? 7 4673 MR. DI FELICE: That is our intent. 8 4674 COMMISSIONER WYLIE: Because what I 9 believe may have been a problem you say is not. You do 10 have access. 11 4675 Now, we talked about types of 12 programming that are being purchased from Salter 13 Street, cartoons, from Nelvana. Does Telelatino 14 purchase other types of programming exception 15 children-oriented programming, Canadian programming? 16 4676 MR. DI FELICE: Canadian, no. 17 4677 COMMISSIONER WYLIE: There is no -- 18 4678 MR. DI FELICE: Can you think of -- 19 is there is maybe we can think of some isolated things. 20 4679 COMMISSIONER WYLIE: For example, 21 from CFMT or CJNT. Is there no possibility there of 22 acquiring rights? 23 4680 MR. DI FELICE: Acquiring 24 programming? 25 4681 What I can imagine is that there
812
1 could be possibilities of co-licensing independently 2 produced programming. That has never happened before. 3 4682 Telelatino, although a specialty 4 channel, isn't perhaps like other specialty channels 5 taking second or third-run programming. Our viewers 6 have expectations that we operate like their own CBC so 7 they want to see a lot of original programming, 8 first-run programming, whether our original programming 9 or acquired programming. So no, we don't license 10 programming from CJNT or CFMT and haven't really ever 11 talked about it. 12 4683 But there would be an issue there of 13 who takes the first run. Our viewers from time to time 14 will complain about seeing the program repeated. They 15 are not used to having repeats of programs. Repeats, 16 though, are obviously standard operating procedure with 17 specialty channels in Canada, but for our audiences 18 they have come to expect minimal repeats for example. 19 That is, I think, one obstacle. 20 4684 COMMISSIONER WYLIE: Since you seem 21 to be able to dub children's programming, is there no 22 other Canadian programming that you could dub that 23 would be other than cartoons and "Emily of New Moon"? 24 4685 MR. DI FELICE: We don't actually dub 25 the programming. That would be a very --
813
1 4686 COMMISSIONER WYLIE: Well, it gets 2 dubbed somehow. 3 4687 MR. DI FELICE: Yes. Yes, it gets 4 dubbed. 5 4688 COMMISSIONER WYLIE: But are there 6 other types of programming that could have a place as 7 easily on your schedule that would not be 8 children-oriented or cartoons but would be acquired as 9 a second window and dubbed that would have as 10 meaningful and addition to the screen as a cartoon for 11 adults? 12 4689 MR. DI FELICE: Right. Besides 13 "Emily of New Moon", besides "Jake and the Kid", 14 besides big miniseries that have been broadcast on CBC 15 like "Million Dollar Babies" that we did acquire dubbed 16 into Spanish, and other miniseries and movies as well 17 that we put into our schedule, usually during special 18 occasions that were actually originally Canadian made. 19 Yes, there are possibilities in all genres, but what we 20 have already acquired though does include various 21 genres. It isn't only animation and it isn't only 22 children's programming. 23 4690 COMMISSIONER WYLIE: Give me an 24 example of a Canadian program that was dubbed. 25 4691 MR. MONTESANO: "Food Essence" is one
814
1 example. 2 4692 COMMISSIONER WYLIE: Oh, "Food 3 Essence". 4 4693 MR. MONTESANO: It is currently on 5 our schedule. 6 4694 MR. DI FELICE: Or "Jake and the 7 Kid". "Jake and the Kid" is a series. 8 4695 COMMISSIONER WYLIE: It is not a 9 cartoon, but it is -- 10 4696 MR. DI FELICE: "Emily of New Moon". 11 All these are family series. 12 4697 COMMISSIONER WYLIE: In the decision 13 the Commission repeated that as one of the benefits, 14 intangible I suppose, of the Corus ownership of 15 Telelatino was that Corus planned to make YTV's 16 state-of-the-art facilities and mobile unit available 17 to TLN to enhance and increase the programming that is 18 produced for the service. Has any of that occurred? 19 4698 MR. DI FELICE: Yes. We have used 20 the YTV mobile unit to cover a Latin festival that we 21 produced. It resulted in a number of hours of special 22 programming, but we did use their mobile to do that. 23 That was a summer festival we did last year. 24 4699 COMMISSIONER WYLIE: Do you foresee 25 any more activity in that area to improve your ability
815
1 to serve -- 2 4700 MR. DI FELICE: On the technical 3 side, yes. 4 4701 COMMISSIONER WYLIE: -- with Canadian 5 programming? 6 4702 MR. DI FELICE: Yes. Especially on 7 the technical facility side. We have traded technical 8 information, facilities information, staffing as well. 9 We have had our staff back and forth in order to find 10 opportunities for us to see whether there are segments, 11 or shows, for example that we would produce in their 12 studios if they have equipment, cameras, editing 13 equipment that we don't have, and we have in fact 14 continued to supplement the infrastructure program that 15 we have at Telelatino in view of the infrastructure 16 that works at Corus. 17 4703 So our own broadcast operations 18 manager has been to the YTV plant, for example, several 19 times looking at there equipment, testing it, and then 20 buying compatible equipment for us. So it has been 21 beneficial, both in terms of information, and in terms 22 of assistance. 23 4704 COMMISSIONER WYLIE: Now this morning 24 I said we would look at issues of the complaints by the 25 Spanish community about the extent of the service it
816
1 gets in prime hours and the Canadian content. I asked 2 you if the Commission were to find it appropriate to 3 require that in the evening period between 6:00 and 4 midnight, as we define it, there should be a minimum 5 amount of programming directed to the Spanish 6 communities what would be a reasonable response? 7 4705 MR. DI FELICE: We did take a look at 8 that. In doing so, I mean, I think I can underline our 9 attentiveness and sensitivity to the Spanish community 10 when it comes to programming, scheduling their 11 programming appropriately. 12 4706 Doing the numbers based on our 13 current schedule that we are looking at, we calculated 14 that we have currently 10.5 hours during the evening 15 broadcast period per week out of 42 evening broadcast 16 period hours. Ten point five of those hours are 17 Hispanic, Spanish-directed programming. That is 25 per 18 cent, approximately. 19 4707 That is on a regular basis, alone. 20 That doesn't include -- 21 4708 COMMISSIONER WYLIE: How would you 22 calculate it? 23 4709 MR. DI FELICE: It is 1.5 hours every 24 evening, Monday to Friday, plus an additional two hours 25 on Saturday, plus an additional hour between Monday and
817
1 Tuesday late-night, based on the current schedule. 2 4710 COMMISSIONER WYLIE: But during this 3 6:00 to 12:00 period, that is because I don't see some 4 of the specials on the block schedule. 5 4711 MR. DI FELICE: No. No. That -- 6 4712 COMMISSIONER WYLIE: That is what 7 you -- 8 4713 MR. DI FELICE: Excuse me? I'm 9 sorry. 10 4714 COMMISSIONER WYLIE: Yes. Go ahead. 11 4715 MR. DI FELICE: That is just to 12 finish the -- that is on a regular basis, exclusive of 13 the specials we talked about earlier which, for 14 instance that doesn't include, for example, that 15 two-hour special we looked at that just happened to be 16 broadcast in this schedule last week and the one that 17 was broadcast last night in the same time slot, Tuesday 18 at 9:00 p.m., as part of our "Latin Beauties" series. 19 4716 So that would not include the 20 specials that we talked about, and those are fairly 21 frequent. They are not weekly, but they are frequent. 22 I think we went through a list of them earlier. So 23 beyond the specials we regularly now are broadcasting 24 25 per cent Spanish-directed in the evening broadcast 25 period. That is more than in the past.
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1 4717 In terms of what can we do, what do 2 we want to do, the direction obviously is we have 3 increased it, but we have to keep in mind that any 4 increase on one side is a decrease on the other. 5 4718 COMMISSIONER WYLIE: Are we still in 6 a world where it is more difficult to sell advertising 7 in programming to the Hispanic communities than the 8 Italian? 9 4719 MR. DI FELICE: Well, that is exactly 10 right. We looked at our advertising revenues and over 11 two-thirds of our advertising revenues come in on the 12 Italian side, on the Italian programming side. That 13 has historically been the case. That is actually an 14 improvement over the past where it was even higher on 15 the Italian programming side. 16 4720 COMMISSIONER WYLIE: But you are to 17 tap the Hispanic advertisers for the Hispanic 18 communities more easily now you mean? 19 4721 MR. DI FELICE: Well, two things. 20 4722 Number one, there is more Hispanic 21 community-owned business that is coming in. But mostly 22 in fact it is Italian businesses that we have 23 encouraged to book advertising in both parts of our 24 schedule. They have found that the viewership, the 25 people actually watching the spanish programming, do
819
1 respond to the advertising. So part of it is actually 2 Italian-owned businesses advertising in Spanish 3 programming. 4 4723 COMMISSIONER WYLIE: As well. 5 4724 MR. DI FELICE: The end result is 6 that Telelatino continues to be dependant on 7 advertising revenue, first of all. That is the bulk of 8 our revenues. I believe it is about -- that continues 9 to be, I think, 70 per cent of our revenue base. That 10 is mostly on the Italian side. So, it is 11 cross-subsidising, I think, the Spanish side. 12 4725 COMMISSIONER WYLIE: Are these 13 numbers that you are giving us now that you say is an 14 improvement from what appears if you just look at the 15 block schedule numbers for Spanish programming that you 16 would be prepared to live with by condition of license, 17 to have a minimum of Spanish-directed, Spanish 18 community-directed programming measured over a week, a 19 month. What do you think? If you were us and you were 20 trying to respond to this complaint? 21 4726 MR. DI FELICE: Well, I think we 22 should look at our actual performance. Our actual 23 performance has exceeded our minimum requirements under 24 our conditions of license. Our actual performance is 25 that --
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1 4727 COMMISSIONER WYLIE: Well, there were 2 never conditions of license, I don't think, that said 3 any more than directed 55/45 to the two communities. 4 What we are facing is one community saying, "That 5 doesn't mean that mine has to be overnight and at six 6 o'clock in the morning all the time". 7 4728 MR. DI FELICE: Right. 8 4729 COMMISSIONER WYLIE: You haven't had 9 a condition of license in that fashion. 10 4730 MR. DI FELICE: Yes. When I referred 11 to the condition of license it was exactly that, the 12 55/45 with respect to the -- yes. 13 4731 COMMISSIONER WYLIE: It still is, but 14 do you think that to respond to the complaints there is 15 a need to get a minimum? 16 4732 MR. DI FELICE: I think that, I agree 17 there has been no minimum requirement for the evening 18 broadcast period. I think we have shown our best 19 efforts by virtue of what we have done, which is to 20 gradually increase Spanish programming without 21 disrupting both our advertising revenue base and our 22 Italian expectations from our Italian viewers. 23 4733 I think we have been very, very, 24 creative in terms of achieving this 25 per cent regular 25 evening broadcast period Spanish content, at the same
821
1 time supplementing it over the last couple of years. 2 There has been a big response from the community. 3 There are 50 intervention letters in this matter that 4 have gone out of there way to talk about the 5 improvement in the Spanish programming quality and 6 efforts. 7 4734 We have gone out of our way to 8 creatively nest Spanish specials in prime time. We 9 have talked about a couple of them. We have done that 10 on a financially negative basis. We have lost money on 11 each and every one of those specials, The "Latin 12 Billboard Awards", the "Viña del mar" festival, the 13 "Latin Beauties" contest. We don't bring in the 14 advertising money to pay for those specials. 15 4735 COMMISSIONER WYLIE: Yes. So do I 16 hear you well that you have creatively achieved this 17 level and you see no reason why it should decrease? 18 4736 MR. DI FELICE: No, we intend to 19 continue doing -- 20 4737 COMMISSIONER WYLIE: Of Spanish, of 21 Hispanic communities-directed programming in the 22 evening hours -- 23 4738 MR. DI FELICE: Evening broadcast 24 period. 25 4739 COMMISSIONER WYLIE: -- when there is
822
1 more listenership. 2 4740 MR. DI FELICE: That is certainly our 3 intention. 4 4741 COMMISSIONER WYLIE: Yes. It is 5 pretty obvious why I started my questioning by looking 6 at the projections that you had in January 2001, which 7 would have given you an average PBIT margin of 23 per 8 cent which, we all agreed this morning, was now 29 per 9 cent with the revised. So in that context, of course, 10 there is always the question: Well, you certainly can 11 continue doing what you are doing now, when you were 12 projecting that you would do less well financially over 13 the period. 14 4742 MR. DI FELICE: Yes, I understand. 15 4743 COMMISSIONER WYLIE: Okay. Now we 16 get to the crux of this now in terms of actual 17 measurement. 18 4744 One is the Canadian content component 19 and one is the CP, the level of your expenditures on 20 Canadian content, which are measured by condition of 21 license and by exhibition in one case and by money in 22 the other. You have been asked various questions 23 about -- and there are two components to the Canadian 24 exhibition: Do we raise the 25 per cent overall; and 25 you are prepared to except 15 per cent in the evening
823
1 period should that be higher, considering every reason 2 to believe that you are successful in that you have 3 more optimistic projections one year later than you 4 had. 5 4745 So let's begin with the overall. 6 You are at 25 per cent. If you look at other ethnic 7 specialties, it is low. You have been asked whether 8 you could do more and the answer, of course, has 9 been: Well, we don't think we can afford it. Maybe we 10 now can. 11 4746 One interesting comment in your 12 deficiency response is -- the March ones at page 1 -- 13 is you said "Well, even if we did 30 per cent overall 14 it would not result in any increase in Cancon buy or 15 produced for Telelatino." 16 4747 What would actually be there, 17 then, if the Commission, in its wisdom, decided to 18 increase it? 19 4748 MR. DI FELICE: Well, I think that we 20 are always spreading limited resources over the amount 21 of programming that we have to do. 22 4749 Our preference has been, the strategy 23 that we have followed, is to try to concentrate those 24 resources in our Canadian content programming to bring 25 it to a level that is competitive with mainstream
824
1 broadcasting. On that I think we have showcased here 2 today. 3 4750 Increasing the broadcast requirement 4 I think I am merely pointing out doesn't necessarily 5 mean that we would increase production if that were to 6 result in the negative consequence of reducing the 7 quality of our production, especially given the 8 direction that we have taken, which is to increase the 9 level of ethnic programming quality to a point where it 10 is competitive, where it can compete with other 11 entertainment and information sources that our 12 viewership has. That started to become their 13 expectation. 14 4751 So I think that comment is merely a 15 reflection of the reality of how would we fulfil an 16 increased broadcast requirement. A repeat of a program 17 would be one way to do it. 18 4752 COMMISSIONER WYLIE: I think you said 19 in the deficiency letter that it would amount -- this 20 is for overall. 21 4753 Now, for the evening period, if it 22 were 25 per cent instead of 18 per cent, it would 23 amount to 1.5 hours daily. Am I correct? 24 4754 MR. DI FELICE: Yes. 25 4755 COMMISSIONER WYLIE: If the
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1 Commission agreed to reduce the 25 per cent -- to 2 increase rather from 15 per cent to 25 per cent the 3 programming that is not in third language, would it 4 ease the difficulty? Would it be easier or would it 5 free some more ability to have Canadian, ethnic 6 Canadian, because it could be in English then? 7 4756 In other words, if we gave you the 8 increase of 10 per cent in non-third language, would it 9 not make it more flexible for you to be able to deal 10 with an increase of 25 per cent in the evening, or 11 30 per cent overall instead of 25 per cent, or a ramp 12 up. 13 4757 MR. DI FELICE: Well, there are a 14 number of challenges we face there. I can take you 15 through them. 16 4758 The first one is that our intention 17 was to in fact use the increased non-third language 18 allowance to produce programming that would go into the 19 evening broadcast period. That would be programming 20 that most likely would go in after our 11:10 p.m. news 21 break, 11:00 to 11:10 p.m. news break in the evening, 22 because that programming would (a) be able to address 23 the needs of our changing audience and likely be dual 24 language or mixed language programming that would be 25 quoted as non-third language programming. I believe
826
1 most of it would be Canadian content, original content 2 that we would create. 3 4759 As well, it would deal with the 4 issues that we grapple with every day in terms of 5 serving our audiences, which is that they already have 6 expectations relating to what programming we are 7 scheduling between 6:00 p.m. and midnight. The 8 challenge there is that we are a shared channel. We 9 are trying to provide a full complement of programming 10 to both the Italian audience and to the Spanish 11 audience during that evening broadcast period. 12 4760 So, we are trying to provide the 13 staples that they are used to, the staples of their 14 programming diet, which include news, a telenovela, and 15 in the case of the Italian audience, the nightly 9:00 16 to 11:00 p.m. foreign Italian programming slot from 17 RAI. That has been a long-standing scheduling 18 practice. 19 4761 COMMISSIONER WYLIE: Yes, of course. 20 4762 MR. DI FELICE: So we are trying to 21 grapple with that. I think we are -- 22 4763 COMMISSIONER WYLIE: That is the 23 practice that the Hispanic community is beginning to 24 rumble about. So it is not an answer. 25 4764 I know there are struggles and
827
1 challenges in scheduling, but you are aware, are you, 2 that Telelatino's overall Canadian content is 25 per 3 cent, Fairchild is 30 per cent, granted you would 4 probably would say it only has one community to program 5 to. TalentVision is 31.5 per cent and Odyssey is 6 16 per cent. 7 4765 In the evening Fairchild is 40 per 8 cent and TalentVision 33 per cent, Odyssey is 16 per 9 cent. Those are where Canadian programming 10 expenditures that compare Telelatino's 16 per cent to 11 Fairchild's 29 per cent and TalentVision 29 per cent 12 and Odyssey 27 per cent. 13 4766 So another thing I am looking at, 14 too, is, with the revenues that are projected to be 15 higher that of course even at 16 per cent for the first 16 three years generates more money for Canadian 17 programming. Why can't it generate more hours? 18 Because the 16 per cent is applied to a larger number 19 so it generates a larger sum. 20 4767 MR. DI FELICE: Yes. You are right 21 that we are projecting that we would have higher gross 22 revenues and, as a result, higher Canadian programming 23 expenditures. 24 4768 COMMISSIONER WYLIE: So why not more 25 hours then?
828
1 4769 MR. DI FELICE: It probably will 2 result in more hours potentially. 3 4770 COMMISSIONER WYLIE: So how much more 4 than 25 per cent overall? 5 4771 MR. DI FELICE: But the number of 6 hours we originally produce I think is -- I think the 7 point I am trying to make is the number of hours we 8 originally produce isn't necessarily related to the 9 Canadian broadcast requirement percentage by 10 percentage. 11 4772 COMMISSIONER WYLIE: It is also for 12 purchasing foreign, yes. 13 4773 MR. DI FELICE: And it also involves 14 repeats. There is programming we produce, programming 15 we acquire, and then the question of how often we -- 16 4774 COMMISSIONER WYLIE: Well repeats 17 count into exhibition. 18 4775 MR. DI FELICE: Yes. I understand. 19 Exactly. 20 4776 So I guess the issue we always have 21 is: Do we make a program better by spending more on 22 making it or do we make two programs with the extra 23 money we are spending. 24 4777 COMMISSIONER WYLIE: Yes. It is 25 always after telling us what good quality programs are
829
1 on there schedule applicants usually say, "But if I 2 make more money I will make them better", rather than 3 "Don't ask me for more". 4 4778 You are aware that your Canadian 5 content is low. Now which is more difficult for you to 6 handle, a rise to 30 per cent overall or 25 per cent in 7 the evening period, instead of the 15 per cent that you 8 agreed to -- 9 4779 MR. DI FELICE: Yes. 10 4780 COMMISSIONER WYLIE: -- even with 11 your lower projections 12 4781 MR. DI FELICE: I think the -- 13 4782 COMMISSIONER WYLIE: Or something in 14 between, a combination? 15 4783 COMMISSIONER WYLIE: Well, increasing 16 the evening broadcast period, broadcast requirement for 17 Canadian content to 25 per cent would be the much more 18 challenging option. There are a number of reasons for 19 that. 20 4784 We are highly dependant on ad 21 revenues and they constitute -- I think earlier I said 22 70 per cent. I will correct myself. I think it is 23 about two-thirds, more or less, of our overall gross 24 revenues. 25 4785 They are inherently less stable then
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1 other national specialty networks. Our churn rate is 2 about 35 per cent, meaning that we lose about 35 per 3 cent of the advertising each year in the subsequent 4 year and have to replace it with new advertising. 5 That, as I understand it, is a rate that is higher than 6 other networks. 7 4786 Being a channel that is trying to 8 please both audiences and being mostly slanted on the 9 revenue side on the Italian side, increasing -- 10 displacing Italian programming that our viewers and our 11 advertisers have come to want and know, will 12 necessarily result, I think, in problems in achieving 13 the revenue projections on the advertising revenue side 14 that we have made. 15 4787 Our advertisers, I should point out 16 as well, happen to be among our viewers. We have a 17 very intimate relationship with our advertisers and 18 they tend to pick their shows they advertise in based 19 on their own personal preferences and based on the 20 preferences of those around them, as opposed to based 21 on empirical data. So losing a show to make space for 22 another program that is required to be put into the 23 evening broadcast period I think can have a negative 24 impact both on our viewer relations, our expectations 25 of our audience, and our advertising revenue. That is
831
1 the problem. 2 4788 COMMISSIONER WYLIE: Mr. Di Felice, 3 you may have churn with your advertisers, but you are 4 in a pretty good position with your subscribers, where 5 from what the numbers you have filed you are on 6 extended basic which is pretty churn-free in millions 7 of homes. 8 4789 MR. DI FELICE: I think you are 9 correct. 10 4790 COMMISSIONER WYLIE: Which is steady, 11 doesn't require effort, except an accounting 12 measurement right? You don't have to pay people to go 13 and sell advertising and deal with the churn. So you 14 are in a very strong position in your subscriber 15 revenues, despite the fact that it may be what I see as 16 about half of your revenues. 17 4791 MR. DI FELICE: Yes. 18 4792 COMMISSIONER WYLIE: Is that correct, 19 about half? 20 4793 MR. DI FELICE: I believe it is much 21 closer to a-third, our subscriber revenue. 22 4794 COMMISSIONER WYLIE: Well, on the May 23 hearing, discretionary services residential and bulk, 24 there is four million plus 233,000. I was looking at 25 the 2001 numbers.
832
1 4795 The first year, year two 2003 2 numbers, 4.3 million. Is that correct? Plus 350 DTH? 3 Compared to 3.7 million and 3.4 million. Isn't that 4 the division between your subscriber revenue and your 5 advertising revenue? Correct? 6 4796 MR. SUBDAR: Based on the new 7 projection? 8 4797 COMMISSIONER WYLIE: Yes. I was 9 looking at the May projection. 10 4798 MR. SUBDAR: The division is 36 per 11 cent, an average of 36 per cent revenue on sub-revenue. 12 It is about two-thirds -- one-third. 13 4799 COMMISSIONER WYLIE: Two-thirds? And 14 two-thirds on advertising. 15 4800 MR. SUBDAR: Correct. 16 4801 COMMISSIONER WYLIE: But it is still 17 very strong compared to some of these other services I 18 was referring to. 19 4802 Now, with regard to the CP you did 20 come up with at least a ramp up from year four, 17 per 21 cent in year four, 18 per cent in year five. Maybe at 22 the reply stage -- we do have an intervenor -- you can 23 come up with some imaginative way of dealing with this 24 possible increase in Canadian content as between what 25 we do with the evening period and what we do with the
833
1 overall that would eliminate status quo that would be 2 something more imaginative as to what you can live 3 with. 4 4803 MR. DI FELICE: Thank you. 5 4804 COMMISSIONER WYLIE: With regard to 6 the CP, depending of course on what you do with 7 exhibition, or if you prefer if we wanted to try to 8 generate more Canadian content for this service in line 9 with your growing financial ability, you could raise 10 the 16 per cent higher instead. You can also discuss 11 that. 12 4805 In any event, what you have now, 13 which is beginning at year four, would be at a minimum 14 acceptable as a condition of license, to start ramping 15 up in year four with the 16 per cent CPE, ramping it up 16 to 17 per cent and 20 per cent by year seven. Correct? 17 4806 MR. DI FELICE: Would you like me to 18 respond to that or to consider that -- 19 4807 COMMISSIONER WYLIE: Yes. Whether or 20 not this is -- I read that from the calculation of your 21 3rd of May. The calculation I make generates 16 per 22 cent in year one, two, three and in year four, 17 per 23 cent, 18 per cent, 19 per cent, 20 per cent. This 24 would be your commitment by condition of license as 25 opposed to the 16 per cent.
834
1 4808 MR. DI FELICE: That's true. 2 4809 COMMISSIONER WYLIE: At a minimum. 3 Now, you are going to come back and see whether there 4 can be improvement in exhibition as well or improvement 5 in considering that these were commitments you were 6 prepared to make even when your projections were lower. 7 4810 Benefits. $1.1 million was for 8 license fee top up. That is in paragraph 5 of the 9 transfer decision. 10 4811 Since the calculation generates 11 16 per cent, 17 per cent, as I just described, where is 12 that money shown in your financial projections? 13 4812 MR. DI FELICE: We haven't, I don't 14 believe, unless you would like to correct me, Rehaz. 15 We haven't shown any of that money in our financial 16 projections. 17 4813 COMMISSIONER WYLIE: Why not? So you 18 probably would calculate this faster than me, but 19 $1.1 million would be an average of more than $100,000. 20 Well, it doesn't have to be each year. 21 4814 But why is it not shown in those 22 projections? It is supposed to be incremental to -- 23 4815 MR. DI FELICE: Understood. My 24 understanding, and I have talked to the person who is 25 preparing the rules relating to the establishment of
835
1 this fund, which we hope to have established soon, is 2 that the fund will fund the production of Hispanic and 3 Italian programming, ethnic programming, but that those 4 monies wouldn't necessarily come directly to us. They 5 may be in the form of license fee supplements that 6 don't come directly to Telelatino, may go directly to 7 independent producers or freelance producers. 8 4816 COMMISSIONER WYLIE: No, but my 9 question was more where does it show that it will come 10 from Telelatino to producers, since the line showing 11 programming expenses for Canadian, is there something 12 that shows there? Where is that money? Under Canadian 13 programs I made my calculations of course total 14 Canadian programming as a percentage of revenues of the 15 year before and I get 16 per cent, 17 per cent, 18 per 16 cent, 19 per cent, so incremental to that should be 17 that benefit. Where does it show in the projections 18 under programs to be telecast, Canadian program? 19 4817 MR. DI FELICE: It is in an 20 incremental benefit, I think you are correct, but it 21 doesn't come from Telelatino, it comes from Corus. 22 4818 COMMISSIONER WYLIE: Ah, so it would 23 show on their books? 24 4819 MR. DI FELICE: I presume it would 25 show on their books, but we don't --
836
1 4820 COMMISSIONER WYLIE: Presumably, 2 Mr. Johnston, apart from what they are supposed to do 3 for themselves in their other services? 4 4821 MR. JOHNSTON: Yes. I think the 5 proposal was that the $1.1 million would go for license 6 fees, top up license fees to produce programming which 7 might -- which Telelatino might license, but other 8 ethnic broadcasters might license as well. 9 4822 In other words, it wasn't a benefit 10 that was exclusive to -- it wasn't money that was going 11 to flow directly to Telelatino. 12 4823 COMMISSIONER WYLIE: So to you 13 that -- it says: 14 "...the benefits of $1.1 million 15 will be distributed..." 16 4824 This is paragraph 5: 17 "...in license fee top up 18 funding for the production of 19 programs directed to Canada's 20 Italian and Hispanic 21 communities." (As read) 22 4825 So they may not end up on Telelatino 23 at all. So that is Corus money. 24 4826 MR. DI FELICE: That is correct. 25 4827 COMMISSIONER WYLIE: Not necessarily
837
1 to the benefit of -- 2 4828 MR. JOHNSTON: The hope is that 3 Telelatino would be able to license that, but it wasn't 4 meant to be exclusive to Telelatino. 5 4829 COMMISSIONER WYLIE: No, but 6 somewhere in Corus' financials it will show as an 7 increment -- 8 4830 MR. JOHNSTON: It should, yes. 9 4831 COMMISSIONER WYLIE: -- as a benefit. 10 4832 MR. JOHNSTON: Yes. 11 4833 COMMISSIONER WYLIE: Okay. 12 4834 Cultural diversity. Corus has a 13 corporate plan. Is Telelatino going to be involved 14 in -- or covered? 15 4835 MR. DI FELICE: In terms of 16 employment equity, we would -- now having Corus 17 Entertainment as our controlling shareholder we would, 18 I think, quality to be covered under the provisions of 19 the Employment Equity Act. 20 4836 COMMISSIONER WYLIE: No, I meant more 21 are you aware of the fact that now the larger 22 broadcasters are involved as well -- 23 4837 MR. DI FELICE: In the Diversity Task 24 Force through the CAB? 25 4838 COMMISSIONER WYLIE: Yes.
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1 4839 MR. DI FELICE: Yes, I am aware of 2 that. 3 4840 COMMISSIONER WYLIE: Then for 4 employment equity as such you would be under the 5 Employment Equity Act through Corus, but the other 6 diversity plan, and so on, is Corus involved, 7 Mr. Johnston? 8 4841 MR. JOHNSTON: I don't know. 9 4842 COMMISSIONER WYLIE: No? 10 4843 MR. JOHNSTON: I don't know the 11 answer to that, Madam Wylie. 12 4844 COMMISSIONER WYLIE: I'm not sure I 13 do either, whether it was only for conventional 14 television stations or specialties as well 15 4845 MR. JOHNSTON: I could undertake to 16 find that out for you. 17 4846 COMMISSIONER WYLIE: Yes, perhaps the 18 counsel will know whether someone who doesn't have a 19 conventional station is involved or not in that. We 20 will both be fired. 21 --- Laughter / Rires 22 4847 COMMISSIONER WYLIE: But obviously 23 that is something of importance to you as well. 24 4848 Sensitivity is also necessary, 25 perhaps even more. Do you have an ongoing
839
1 sensitization information package for producers or 2 employees to ensure that any group is properly covered 3 and portrayed on the air? 4 4849 MR. DI FELICE: Well, I think in 5 terms of on-air portrayal we adhere to the standards we 6 talked about earlier. 7 4850 In terms of our practising diversity 8 and our hiring, I think we are very much in line, I 9 think, with expectations, both in terms of, I think 10 visible minority hiring in terms of the percentages of 11 our staff that are visible minorities according to our 12 filed information and I think in terms of our on-air 13 diversity I think it speaks for itself. 14 4851 COMMISSIONER WYLIE: Not only in 15 terms of exhibition but the treatment of minorities, 16 which have come up in your programming like anyone 17 else's. 18 4852 Closed captioning. You were asked by 19 the Commission what is possible. In light of the 20 recently ownership changes in Telelatino and what 21 appears to be a very optimistic term financially coming 22 up, would it not be possible for you to close caption 23 maybe 90 per cent of all your English programming, 24 let's say by the end of the sixth year of your term? 25 4853 MR. DI FELICE: I think there might
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1 be some possibilities in that regard. I think John can 2 speak to our closed captioning practices and efforts. 3 4854 MR. MONTESANO: I will answer your 4 specific question. 5 4855 In regards to our English-language 6 programming, the only challenge that we foresee is the 7 issue of dual language programming, because we want to 8 go in this direction of encouraging dual language 9 programs. Whenever people speak Italian or Spanish we 10 can subtitle it. Oftentimes our communities are 11 speaking in a dialect, so to actually get the expertise 12 that is necessary to caption much of that is a bit of a 13 challenge. It is a challenge for us also to encourage 14 many of our suppliers to provide captioning. 15 4856 So I think it really depends on the 16 type of English-language programming we are talking 17 about. Because again, if we are talking about a show 18 that is 80 per cent English and people slip in and out 19 of Italian or Spanish, captioning that 80 per cent is 20 not difficult, but captioning that 20 per cent and 21 getting someone to kind of get the Spanish, capture it, 22 have the expertise to be able to caption it, it is 23 expensive. Oftentimes that potentially could be more 24 than what we are paying -- 25 4857 COMMISSIONER WYLIE: What if my
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1 question was: Could you commit to captioning all of 2 the programming that is totally in English? 3 4858 MR. MONTESANO: I think we can strive 4 to do that. I think that is very -- 5 4859 COMMISSIONER WYLIE: Could you do 6 that from year one if it were limited to the 7 programming that is totally in English? 8 4860 MR. DI FELICE: I think what we would 9 be comfortable with would be striving to do 90 per cent 10 of it by the end of the license term. 11 4861 Having said that, all of the "Latin 12 Heritage Series" programs that we talked about earlier, 13 of which there are the equivalent of, I believe, 14 60 half-hour episodes that we have produced now that 15 will start to go to air in the fall, all of those are 16 closed caption. The English portions of those are 17 closed captions. 18 4862 I think John is relating to you some 19 of the difficulties we encountered when we went to 20 close caption them on the Italian or Spanish portions 21 of those programs. 22 4863 COMMISSIONER WYLIE: Mr. Johnston, we 23 have just saved you some work. Corus will file a plan 24 and the specialties will all be included. 25 4864 MR. JOHNSTON: Thank you,
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1 Madam Wylie. 2 4865 COMMISSIONER WYLIE: My colleague may 3 have other questions, he is more knowledgeable than I 4 am about the closed captioning situation. I 5 understand, of course, with multiple languages it is 6 difficult. 7 4866 That leads us to descriptive video 8 and the use of the SAP for other language rather than 9 descriptive video. 10 4867 I gather from your response in a 11 deficiency letter that you have no plans to provide 12 descriptive programming. 13 4868 Perhaps you can expand about why 14 there is no possibility -- 15 4869 MR. DI FELICE: Yes. It is not 16 something we have -- excuse me. 17 4870 COMMISSIONER WYLIE: Are you 18 technically equipped now to have a SAP channel? 19 4871 MR. DI FELICE: Yes. 20 4872 COMMISSIONER WYLIE: What do you use 21 it for? 22 4873 MR. DI FELICE: We have been quite 23 innovative in using the SAP to do dual language tracks 24 to some of our programming. For instance, our Italian 25 soccer, about 20 or 30 of our Italian soccer games this
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1 year on Sunday afternoons I believe were the SAP 2 channel -- correct me if I'm wrong. The SAP channel 3 was used for Spanish audio and the primary audio was 4 done from our TLN studio, our own studio commentary to 5 an international soccer game. 6 4874 Which, by the way, also, just as a 7 coincidence, as a result of I guess a quirk in some of 8 the rules that apply to recognition of Canadian 9 content, that effort wasn't recognized even on a 10 partial level as Canadian content because it was an 11 international game being dubbed or versioned into 12 English as opposed to a foreign language, but we used 13 the SAP for that. We used it over a whole month last 14 year during the "Copa America" tournament to a language 15 tracks as well, doing both English and Spanish audio 16 commentary to soccer games. 17 4875 We had a series of 22 episodes run 18 this broadcast season that just finished a few weeks 19 ago, a drama series of 22 episodes in prime time that 20 ran with Italian in the primary audio. It was an 21 original dual language series, dual language being it 22 was double shot, It was shot and dubbed over with 23 English, although it was originally shot in Italian. 24 The first audio was Italian, the second audio was 25 English.
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1 4876 So we have used our SAP capability 2 from time to time to do dual audio, two different 3 languages. 4 4877 COMMISSIONER WYLIE: Those are my 5 questions. Thank you for your cooperation, Madam, 6 gentlemen and Mr. Johnston. 7 4878 We will hear from you in reply as to 8 what your responses are in light of the financial 9 context about the Canadian exhibition, both all day and 10 in the evening. 11 4879 The CP, whether it remains at that 12 level and what could it be combined with exhibition to 13 show some improvement with regard to Canadian content 14 approaching a little more the other specialty services 15 considering your success, which of course we 16 congratulate you for. 17 4880 It is always nice to see projections 18 going up of course, it always puts the panels appearing 19 before us in an awkward situation of being asked for 20 more, but that is life. 21 4881 Thank you. 22 4882 MR. DI FELICE: Thank you very much. 23 4883 THE CHAIRPERSON: Thank you. 24 4884 Commissioner Langford. 25 4885 COMMISSIONER LANGFORD: Thank you.
845
1 4886 I just have a few questions, one 2 factual and one a little bit of blue-skying. 3 4887 I am picking up on your comment from 4 your opening statement with regard to your request to 5 move from 15 per cent to 25 per cent -- can I call it 6 English ethnic programming? I'm not quite sure how to 7 define it. 8 4888 Obviously implicit in this "it is not 9 revolutionary but evolutionary" is what you see as a 10 sensitivity to demographics and the notion of different 11 generations of immigration. 12 4889 But I'm wondering, if you have been 13 studying the demographics, where this ends. Do you 14 have any sense, are you going to be back in seven years 15 saying: "Well, it is not revolution, it is evolution 16 and we want to go to 35 per cent or 40 per cent". Then 17 in 14 years saying -- and that may not be a bad thing. 18 That may be the reality. 19 4890 So there is no trick to this 20 question, I am just wondering whether in your study of 21 the demographics and coming up with this kind of cute 22 but also perhaps telling slogan, there is more to this 23 than just simply moving after so many years one notch 24 more in one direction. 25 4891 MR. DI FELICE: I think it is a sort
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1 of a sociological fact in terms of immigration that 2 subsequent generations tend to become assimilated and 3 tend to lose the original home language. 4 4892 As to what will be the statistics 5 when the next census is done in seven years from now, I 6 think that our position is that we are established as a 7 third language channel, we are predominantly third 8 language, continue to be, I wouldn't foresee that 9 changing. I don't think there will ever come a day 10 where we would be an all-English ethnic channel because 11 the language is something that I think subsequent 12 generations do end up craving. 13 4893 I have actually read some sort of 14 sociological studies out of the U.S. and Italian 15 immigration in the U.S., which perhaps there is a 16 bigger Italian-American population in the U.S., but 17 that is also consisting mostly of more subsequent 18 generations than in Canada. It is an earlier immigrant 19 population there. 20 4894 And subsequent generations tend to 21 want to recapture their language. In fact, I think 22 there is a dip in the interest in the language in the 23 second and third generation and then a dip up, but in 24 terms of a response to sort of blue-skying what might 25 happen in the future, I think that would be my --
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1 4895 COMMISSIONER LANGFORD: So when you 2 come before us in 30 years you may be wanting to go 3 back to 50 per cent. I intend to be here, so be 4 careful on how you answer this question, I am going to 5 hold you to it. 6 4896 You may want to go back to the more 7 Italian and Hispanic. I mean, that is conceivable, I 8 am not being facetious. If you follow the American 9 example it is conceivable you could come in in seven 10 years and say "A little more English", and in 14 years 11 "A little more English" but in 21 years you might come 12 in and say, you know, "No, we want to go back the other 13 way". Is that a possible timeline? 14 4897 MR. DI FELICE: Yes. I think, yes, 15 it would -- I think anything is possible and I think 16 that is just as possible a scenario as any other. 17 4898 COMMISSIONER LANGFORD: Another 18 approach to this, of course, would be to say that a 19 kind of subset of your mandate or vision might be to 20 cross generational lines in a way and to somehow make 21 your programming an opportunity for a kind of a family 22 bonding across a number of generations so that the 23 ideal would be to have the program in Italian or 24 Spanish for grandma and grandpa and having it subtitled 25 in English for the children.
848
1 4899 MR. DI FELICE: Those techniques are 2 precisely what we do. Those are some of the techniques 3 that we use. 4 4900 COMMISSIONER LANGFORD: So are you 5 saying that would be included in what you are calling 6 the English portion, the 25 per cent? 7 4901 MR. DI FELICE: No. 8 4902 COMMISSIONER LANGFORD: No? 9 4903 MR. DI FELICE: But those techniques 10 are what we have used and we have demonstrated 11 subtitling is one way to make programming accessible 12 and to overcome a language barrier. 13 4904 COMMISSIONER LANGFORD: What type of 14 programs, can you give me an idea, if you move from the 15 15 per cent to 25 per cent, and I were to say you are 16 going to, our order will be effective tomorrow and you 17 are granted your wish, where would you see yourselves 18 buying these programs or what type of programs would 19 you be making to make this change? What goes out the 20 door? What comes in the door? 21 4905 MR. DI FELICE: Well, in terms of 22 produced programming, as I mentioned before, I think 23 our intent would be to produce programming for the 24 younger demographic that is dual language programming 25 that would therefore be coded as English, for the
849
1 late-night slot from 11:00 to 12:00. We have talked 2 about various ideas about programming that we either 3 have done before to bring it back on a more regular 4 basis or to do all new programming, but mostly 5 youth-oriented. 6 4906 The nature of our audience, 7 especially our 9:00 to 11:00 p.m. Italian audience, 8 that it is a loyal, long-standing audience that is 9 mostly older generation and doesn't tend to watch after 10 11:00 p.m. So it dovetails nicely with not disrupting 11 the viewing patterns of our loyal viewers and also at 12 the same time trying to attract younger viewers. That 13 programming I think in most cases would primarily be 14 dual language. That is on the original content side. 15 4907 On the acquired content side, there 16 are a number of shows out of the States, because of 17 their large Hispanic population, that are being 18 produced now of various genres that are described as 19 "Spanglish" type of shows where they -- once again what 20 we have been describing as mixed language or dual 21 language shows where they are talking both languages 22 within a drama or within a variety show or whatever 23 else and there are opportunities on the Hispanic side 24 to acquire that kind of programming. That apparently 25 is doing well and crossing over well cross
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1 generationally in the States. 2 4908 COMMISSIONER LANGFORD: So it is very 3 much entertainment. We are not talking about "Let's go 4 shopping -- let's shop healthy at the St. Lawrence 5 Mall" or something like that. There is nothing wrong 6 with entertainment, I like to be entertained, but this 7 is definitely what we are talking about is this kind of 8 a slightly later slot and entertainment of some sort? 9 4909 MR. DI FELICE: Yes. I think I have 10 spoken that way, but it doesn't necessarily have to be 11 that and it doesn't necessarily have to be that every 12 night. So the opportunities for doing English-language 13 or dual language programming applies to any genre and 14 we would look at all of it depending on what our 15 audience tastes and reactions are. 16 4910 COMMISSIONER LANGFORD: That brings 17 me now to the one where I am a little less focused, if 18 you can believe it, than I was on the first one. 19 4911 When we are talking, as Commissioner 20 Wylie was a moment or two ago, about moving from 21 foreign third language or foreign -- yes, third 22 language programming to Canadian third language 23 programming, in other words upping your Canadian 24 content, I think there is sometimes a sense that the 25 CRTC is what my grandmother used to call an endlessly
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1 greedy boots when it comes to Canadian content, but we 2 do care about quality as well. It is not just an 3 endless search for higher numbers. We are very 4 concerned about high quality as well. 5 4912 I wonder, as I heard the reluctance 6 in your voice, whether if we pushed too hard we might 7 be forcing you into buying programs you really might 8 not be quite as happy to have on your lineup. 9 4913 I am not trying to open a huge escape 10 hatch for you here or anything, but I am cognizant of 11 some of the remarks we heard from the last applicant, 12 the CHUM Group, which is a bigger group than your 13 standalone, although perhaps not bigger than your whole 14 family at this point, who told us in no uncertain terms 15 that even they, though they are becoming quite a large 16 player, are not big enough necessarily to compete for 17 the very top level, the highest costing shows. 18 4914 I wonder what your feeling is. This 19 is a bit of a touchy-feely question and I apologize for 20 it, but where do we leave you in the competitive 21 equation if we push you higher on the Canadian content 22 side? 23 4915 MR. DI FELICE: For an ethnic 24 broadcaster, what we have done I think over the last 25 license term, certainly over the last few years and I
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1 think it has been recognized by a lot of people, is we 2 have overcome a lot of the stigma I think attached to 3 the quality of ethnic programming, that it is low 4 production value programming, that third language 5 programming or ethnic programming is low production 6 value programming. That hasn't been -- and I think 7 that ghettoization of ethnic programming is a real 8 stumbling block, a real obstacle to Canadians embracing 9 that kind of programming. I think we have overcome it 10 in many ways. 11 4916 Still with limited resources, 12 certainly not in the league of the media group that you 13 are talking about. The resources that we are talking 14 about are much more limited, but even with those 15 resources we have been able to focus them on doing what 16 we consider to be mainstream competitive programming 17 that is ethnic though. 18 4917 That is what we are really proud of. 19 That is what people have actually reacted to. We would 20 like to continue to be able to do that, so increasing 21 volume requirements I think is a concern, not because 22 we don't want to do more, but because we want to 23 maintain that success. 24 4918 COMMISSIONER LANGFORD: What are we 25 liable to get if we ask for more, more "Emily of New
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1 Moon" in Italian or Spanish, or are we more likely to 2 get something originally produced by you or ordered and 3 purchased by you? 4 4919 MR. DI FELICE: Our intention is to 5 continue to originally produce sort of trailblazing 6 programming like that "Latin Heritage Series" that we 7 are talking about. So we will be doing more of that in 8 any case. 9 4920 We will continue to be doing more as 10 well of the community-oriented daily segments being out 11 in the community. 12 4921 But, as I said before, I think the 13 way to satisfy a condition of doing more is to, yes, 14 either make it, buy it or, whether it is bought or 15 made, repeat it more often. Because specialty channels 16 do repeat their programming on a wheel, we just have 17 never typically done that at the same pace and our 18 audiences have come to expect a service that doesn't 19 repeat their programs often. 20 4922 COMMISSIONER LANGFORD: Thank you 21 very much. 22 4923 MR. DI FELICE: Thank you. 23 4924 THE CHAIRPERSON: Thank you. 24 4925 Commissioner Grauer. 25 4926 COMMISSIONER GRAUER: Thank you.
854
1 4927 Just a quick follow-up to Commission 2 Langford's question. 3 4928 You are making quite a tidy profit 4 these days at your station. It has been my experience 5 that you have obligations to return to your 6 shareholder -- to maximize shareholder value. It is 7 generally my experience that broadcasters will do what 8 they have to do. That is not to diminish what you do, 9 but if we want to see more put in, whether it is more 10 money for better production values or more in terms of 11 more quantity it's kind of the way it goes, it is the 12 push-pull isn't it, between what you have to do for 13 your shareholders and what we try to do for the public. 14 4929 MR. DI FELICE: I think that's true. 15 4930 I would point out that it is only 16 very recently, in 1999, that our cumulated deficits 17 have disappeared. 18 4931 COMMISSIONER GRAUER: I understand 19 that. I completely understand. I didn't mean to 20 suggest anything other than that. 21 4932 One thing that I must say I have 22 wondered about for some time, and I should know the 23 answer to this, but I have several different reports 24 about your carriage and where you are carried. What I 25 wondered is, are you carried anywhere on basis?
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1 4933 MR. DI FELICE: No. As an ethnic 2 service I think that according to the regulations we 3 are required to be discretionary. 4 4934 COMMISSIONER GRAUER: It is that I 5 have you listed as on basic here, but perhaps it is 6 extended basic. 7 4935 MR. DI FELICE: Yes 8 4936 COMMISSIONER GRAUER: To your 9 knowledge you are not carried on basic anywhere? 10 4937 MR. DI FELICE: That is correct 11 4938 COMMISSIONER GRAUER: I notice it is 12 fairly extensively through Ontario and through western 13 Canada, in particular what has always struck me is that 14 you had extended basic carriage in Victoria of all 15 places. 16 4939 Do you know how that came about, what 17 the criteria that was used to -- were you involved in 18 negotiating carriage on the extended basic tier? 19 4940 MR. DI FELICE: No, not for Victoria. 20 I think that at the time those Rogers systems added -- 21 4941 MR. SUBDAR: At the time. In 22 Vancouver we are on Special Pay, but I think those 23 systems were Rogers systems. 24 4942 COMMISSIONER GRAUER: Actually they 25 are Shaw systems.
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1 4943 One of the reasons that it has always 2 struck me as odd is that I think there are 2,400 -- or 3 1,100 people who speak Italian and 1,200 who speak 4 Spanish and you have 43,000 subs, and then if you look 5 at the demographics there are, I think, 7,000 Chinese, 6 2,500 Punjabi. In a perfect world I guess we could be 7 delivering the ethnic services in a limited analog 8 world to those communities where you had the large 9 groups of population. It is just our big challenge, I 10 guess, is to try to sort out getting the services to 11 those communities, and it is a big one. 12 4944 Okay. That's all I have. Thank you. 13 4945 THE CHAIRPERSON: Thank you. 14 4946 Commissioner Cardozo. 15 4947 COMMISSIONER CARDOZO: Thank you, 16 Mr. Chair. 17 4948 Just a few things I wanted to 18 clarify. 19 4949 On closed captioning, then, you are 20 prepared to go to what in English programming? 21 4950 MR. DI FELICE: I think that what we 22 said was if it is English programming and not dual 23 language, distinguish English from dual language, mixed 24 English, so English I think would be what was formerly 25 Type C programming, then we would be prepared to commit
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1 to closed captioning 90 per cent of that programming by 2 year seven of our licence. 3 4951 COMMISSIONER CARDOZO: Okay. And for 4 programming in other languages, in Spanish and Italian? 5 4952 MR. DI FELICE: For Spanish and 6 Italian, I think we have indicated that we think we 7 need the ability not to close caption that programming 8 for various reasons that I think John has described in 9 terms of the difficulties. 10 4953 COMMISSIONER CARDOZO: Our approach 11 isn't you have to caption so much percentage because we 12 think you must, it is because there are consumers out 13 there who require it. I am not aware that people who 14 are hard of hearing have any different levels than any 15 ethnic communities. It crosses all ethnic boundaries. 16 So there are obviously people who are Spanish-speaking 17 or from the Spanish and Italian communities who would 18 benefit by closed captioning. 19 4954 Are you saying the technical 20 difficulties are insurmountable? 21 4955 MR. MONTESANO: There are a few 22 issues. 23 4956 One of them is the fact that we get 24 many of our programmings off satellite, the turnover 25 time required to get them on TV oftentimes within
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1 hours, because most of our news and information 2 programs that come in day-in/day-out, whether Spanish 3 or Italian, the turnover time is really quick, on the 4 one hand. 5 4957 Secondly, just the regular closed 6 captioning expense is usually more than what we are 7 paying in many cases for license fees. The fact that 8 you add the expertise of someone being a Spanish 9 speaking or Italian speaking person who happens to work 10 at a closed caption shop, that makes it, in many cases, 11 much more cost prohibitive. 12 4958 COMMISSIONER CARDOZO: Do you think 13 that the programming you buy from American services in 14 Italian or Spanish would be captioned? Are you aware 15 of that, whether there is? 16 4959 MR. MONTESANO: It is not. We are 17 talking to them about including closed captioning and 18 it is -- interestingly enough, as I said, sometimes 19 there was a soap opera recently that came in from RAI 20 from Italy that was open captioned for months, and then 21 it disappeared. So their service kind of comes and 22 goes. 23 4960 COMMISSIONER CARDOZO: Did you get 24 any feedback on that, whether people found that useful? 25 4961 MR. MONTESANO: No, we didn't. I
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1 think, you know, strangely enough, I think the limited 2 feedback I did get was people who were trying to learn 3 the language who said it helped them learn the 4 language. You know, reading along helps them learn 5 Italian or Spanish. Because we get a lot of people who 6 are trying to learn these languages who watch 7 Telelatino. 8 4962 COMMISSIONER CARDOZO: In terms of 9 descriptive video you said the SAP is used from time to 10 time. Is there any pattern that it is used? Is there 11 any time period you think you could on a regular basis 12 be doing descriptive video so that you wouldn't be -- 13 the SAP wouldn't be in a conflict with some other 14 programming? Could it be your afternoon programming, 15 for example, every day would be available. You 16 wouldn't be using the SAP for the most part at a 17 certain hour in the afternoon? 18 4963 MR. DI FELICE: Well, that's true, it 19 is not being used full time. So that is a possibility. 20 4964 However, I think the same 21 considerations apply to some extent, logistics and 22 costs in terms of accomplishing that kind of 23 initiative. 24 4965 COMMISSIONER CARDOZO: In terms of 25 cost, have you looked into sponsorships?
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1 4966 MR. DI FELICE: No, we have not. 2 4967 COMMISSIONER CARDOZO: Let me ask you 3 about audio description, which is describing 4 alphanumeric stuff that goes up on your screen like 5 phone numbers, names of people. Do you have any 6 practices in that area where you train your staff to 7 make sure they are reading out alphanumeric text that 8 pops up? 9 4968 MR. DI FELICE: Just from my 10 recollection -- and perhaps John or Agatha can speak to 11 that in terms of our production staff and our own 12 programs -- but I think I have always seen our people 13 always read the keyed on graphics in all of our 14 productions. 15 4969 COMMISSIONER CARDOZO: Can I ask you 16 a couple of things about your English-language 17 programming. I have more or less understood where you 18 are going now given everything you have submitted to us 19 in your discussion with my colleagues. 20 4970 What English programs do you have 21 now? At this point you can do 15 per cent. Are you 22 using that 15 per cent English? 23 4971 MR. DI FELICE: Most of the time we 24 are close to using all of it. A portion of that, the 25 majority of that, has been an added revenue source to
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1 Telelatino in the last two years and assisted in the 2 financial success that we have talked about today. 3 That has been in the form of paid programming and 4 infomercials. We will need to preserve that in order 5 to preserve the projections that we have made 6 financially. 7 4972 COMMISSIONER CARDOZO: Okay. Assure 8 us that you are not talking about sort of strip 9 programming that may have an Italian-American actor 10 on or a Latino person in an American strip comedy 11 that you could run. That is not what you are talking 12 about, is it? 13 4973 MR. DI FELICE: That is not what I am 14 talking about. 15 4974 COMMISSIONER CARDOZO: Okay. It is 16 sort of interesting as you ask for more, and just 17 following up from Commissioner Langford's discussion, I 18 was struck also that you are sort of -- in a sense we 19 are trying to get the mainstream services to be more 20 attentive to diversity and you are demonstrating that 21 the ethnic services want to become more mainstream in 22 the sense of English and there is an interesting 23 meeting of the ways and it isn't our intention to keep 24 people in boxes so I think yours is a fair request. 25 4975 The question is: Do we at least then
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1 have certain needs met? I guess that is a question 2 that we have to decide in the end and that is the 3 question that some people have intervened on for or 4 against that. 5 4976 MR. DI FELICE: Yes. 6 4977 COMMISSIONER CARDOZO: When you ask 7 to do more, 15 per cent Canadian content in the 8 evening, it is a very odd request for us to say, 9 "Please can we do more Canadian content during 10 prime time". Was this a quid pro quo you were looking 11 at? You could just do this on your own, but was it 12 part of your quid quo pro that you will do 15 per cent 13 Canadian content in the evening and you would like, in 14 exchange, 10 per cent English? 15 4978 MR. DI FELICE: I think it was part 16 of the process of preparing our application and 17 responding to requests and offering more than the 18 status quo. 19 4979 COMMISSIONER CARDOZO: So that is 20 based on what you are asking for and the incredible 21 lucrative position that has been talked about today 22 that you find yourselves, just not knowing what to do 23 with all this money you have? 24 4980 MR. DI FELICE: I think I should 25 point out as well, as I have pointed out before, that
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1 what you have described as an incredibly lucrative 2 position perhaps in percentage terms might be true, but 3 in real dollar terms I think it is -- we certainly 4 continue to be dwarfed by most mainstream specialties 5 and our cumulative deficits really did, as I said 6 before, only get recouped in 1999 and our own 7 shareholders have not received a dividend. 8 4981 The profits we are projecting, the 9 operating revenues we are projecting, we do have plans 10 for which relate to the potential launch of services 11 that are complementary to Telelatino that are all 12 Italian and all Spanish. So we do intend to do more 13 for our communities and we think it is a natural 14 extension of Telelatino to do that. 15 4982 COMMISSIONER CARDOZO: I have two 16 more questions. One is on the quality of Hispanic 17 programming, and you will be happy to know the other is 18 on the quality of Italian programming, just so we don't 19 forget about that part of the equation. 20 4983 Certainly just so you understand when 21 we talk about the concerns about quality of Hispanic 22 programming we have certainly seen the letters in 23 support of the improved quality that you have 24 demonstrated, but we also look at the kinds of things 25 that are raised in terms of the concern for more
864
1 programming in the Spanish language, and then we look 2 at your license and we look at the Act and we look at 3 requirements for high standard, and so that is the 4 context in which we pursue this issue. 5 4984 It is sort of interesting when you 6 have stuff like Nelvana productions and "Emily of New 7 Moon" dubbed into Spanish, it is kind of interesting to 8 provide mainstream programming to people who are 9 Spanish speaking, especially kids who may be growing up 10 in homes that are Spanish speaking, they won't have 11 missed out on that opportunity, so there is a certain 12 integration aspect to it. 13 4985 But the flip side of it is that maybe 14 there isn't enough Canadian-made Spanish programming 15 that is made in the Spanish language in the first 16 place. 17 4986 Could you tell me what you consider 18 to be your best quality Spanish-language programs, 19 Canadian-made? 20 4987 MS PEZZI: In addition to our 21 community segments that we have already talked about, 22 our community calendars and our "Informese" segments, 23 which our cameras go out to the community to record -- 24 4988 COMMISSIONER CARDOZO: Those are the 25 short --
865
1 4989 MS PEZZI: Those are the 90-second 2 that run throughout our weekly schedule, as well as the 3 "Usted Decide", which is a cumulative nine-minute per 4 week issues-based show. We have mentioned this before, 5 but our TLN spotlight basically is an expansion of the 6 "Informese", of the 90-second. So we have produced, on 7 the Spanish side in the last year, six of those. And 8 we continue to do more. 9 4990 COMMISSIONER CARDOZO: But which 10 would be -- or do you have Canadian-made Spanish 11 programs that are half an hour or one hour in length, 12 like a full program? 13 4991 MS PEZZI: Yes. This is one the 14 TLN -- this is what the "TLN Spotlight" is one. 15 4992 COMMISSIONER CARDOZO: This is the 16 "TLN Spotlight", okay. 17 4993 MS PEZZI: And we are going to 18 continue to do more of those as the year progresses, as 19 well as we have the "Hispaños in Canada", which is the 20 half hour program. That is basically a community talk 21 show. We plan to do more of the community segments as 22 well. 23 4994 COMMISSIONER CARDOZO: Do you have 24 anything more in terms of half hour or one hour 25 programs that you are planning?
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1 4995 MR. DI FELICE: Well, I think in 2 terms of sort of what we would consider probably to be 3 our best foot forward, I think that will be coming up 4 this fall with the "Hispanic Canadians". That is one 5 of the "Latin Heritage Series" projects that -- 6 4996 COMMISSIONER CARDOZO: Then for the 7 rest of the six and half years, is it that type of 8 programming you are talking about? 9 4997 MR. DI FELICE: Right. We 10 distinguish -- 11 4998 COMMISSIONER CARDOZO: Just tell me 12 in a sentence -- 13 4999 MR. DI FELICE: In terms of 14 quality -- 15 5000 COMMISSIONER CARDOZO: -- how you 16 would define the kind of high quality Spanish-language 17 programming that you are planning over the course of 18 the license term. 19 5001 MR. DI FELICE: We will continue with 20 "Latin Heritage Series" type programming on both the 21 Spanish side and on the Italian side. That is, for us, 22 ultra high-quality programming with enduring value, 23 with lasting value that people responded to. 24 5002 Nonetheless, though, the quality and 25 the production values and the response to the community
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1 programming, whether it is the half hour "Spotlights" 2 or just the micro-programming, it is a different genre 3 of programming, but the overall quality, the overall 4 packaging, the overall content and the execution, is 5 what we would call our highest quality. 6 5003 COMMISSIONER CARDOZO: Okay. Could 7 you see yourself doing a news or current affairs or 8 some kind of program in Spanish? 9 5004 The question that Commissioner Wylie 10 talked to you about in terms of relieving you of that 11 condition of license in Spanish is an interesting one, 12 because if you go back historically it was probably 13 there in a sense defend the turf of CFMT, but CFMT does 14 good Italian news, Italian-language news, but doesn't 15 do Spanish language news and so the Spanish speaking 16 community doesn't have any other opportunities, as far 17 as I know, to get any form of Spanish news, even a half 18 hour a week. 19 5005 So I would see that there is more of 20 an imperative for you to think about that as something 21 to do than anybody else in the system. 22 5006 MR. DI FELICE: Well, it is something 23 that we will think about. I'm not sure that a Spanish 24 language newscast won't be done in the future, given 25 the new conventional multiculturals in Toronto. We are
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1 a -- there are different considerations that we would 2 have to talk into account, a local conventional versus 3 a national specialty, our striving to usually not be as 4 "Torontocentric" as people have told us. 5 5007 One of the criticisms in the past was 6 that we were Torontocentric and we have gone out of our 7 way to include segments from Calgary, Vancouver, 8 Montreal. When it comes to newscasts, that would be a 9 factor. A local newscast would obviously be a local 10 newscast. I would think that would be one of the 11 factors in exploring the feasibility of pursuing it. 12 5008 COMMISSIONER CARDOZO: Even if you 13 just did news footage with voice over. That 14 provides -- and I don't mean to be too cheap about 15 this, but even that would provide -- if it was done 16 well with perhaps one or two analysts who come on from 17 to time you provide -- I'm thinking of what can be 18 provided to that community that is not there now. 19 5009 MR. DI FELICE: Right. 20 5010 COMMISSIONER CARDOZO: Can you just 21 tell me what you would consider to be your top Italian 22 language shows currently? 23 5011 MR. DI FELICE: Once again I would 24 refer to the "Latin Heritage Series", I think the shows 25 that we did there are probably sort of the top quality
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1 in terms of the amount of time we spent making them and 2 the amount of money we spent making them. 3 5012 COMMISSIONER CARDOZO: And ongoing? 4 5013 MR. DI FELICE: Ongoing, the 5 equivalent of our "Hispaños in Canada" would be our 6 "Viva Domenica" weekly variety talk show in Italian. 7 5014 COMMISSIONER CARDOZO: Okay. Do you 8 want to add anything more, Ms Pezzi? 9 5015 MS PEZZI: Yes. In addition to the 10 community segments we talked about we have "Viva 11 Domenica" and as well "Graffiti" which is a 12 youth-oriented entertainment program weekly. 13 5016 As well, again on the Italian side, 14 is the expanded version of the "Nota Bene" community 15 segment which is "TLN Spotlight" and we have produced 16 18 of those in the last year and a half. 17 5017 COMMISSIONER CARDOZO: So the 18 benefits of the transfer go towards some of these 19 programs? 20 5018 MR. DI FELICE: You mean the Corus 21 benefits package? 22 5019 COMMISSIONER CARDOZO: Right. 23 5020 MR. DI FELICE: Well, there is 24 potential for them -- 25 5021 COMMISSIONER CARDOZO: But they
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1 haven't -- 2 5022 MR. DI FELICE: -- this type of 3 programming, but -- 4 5023 COMMISSIONER CARDOZO: They haven't 5 kicked in as yet. 6 5024 MR. DI FELICE: -- it would be, I 7 think, a license fee supplement to the license fee we 8 would pay for them to be produced. So programming of 9 this type could be one of the genres that are produced. 10 5025 COMMISSIONER CARDOZO: Okay. Thank 11 you very much for that. 12 5026 Thank you, Mr. Chair. 13 5027 MR. DI FELICE: Thank you. 14 5028 THE CHAIRPERSON: Thank you. 15 5029 Is Mr. Magaly San Martin here, the 16 intervenor, because that would be the next item on the 17 agenda. If he is not here, then we will proceed to the 18 next item. 19 --- Pause 20 5030 THE CHAIRPERSON: Mr. Secretary, have 21 you any information? 22 5031 MR. LEBEL: No, Mr. Chairman, he has 23 not reported to me. 24 5032 THE CHAIRPERSON: Okay. 25 5033 Then I will assume that a
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1 representative of the Latin American Coalition Against 2 Racism is not present and give you an opportunity 3 now -- do you have any reply to the intervention? 4 5034 MR. DI FELICE: Excuse me. We did 5 file a written reply. 6 5035 THE CHAIRPERSON: There is no need to 7 elaborate on it if you don't want to, but I am giving 8 you the opportunity to if you wish to. 9 5036 MR. DI FELICE: I believe it is -- 10 5037 THE CHAIRPERSON: You can assume we 11 will read your reply. 12 5038 MR. DI FELICE: Understood. 13 5039 THE CHAIRPERSON: It's up to you. 14 5040 MR. DI FELICE: I believe 15 Commissioner Wylie asked me to respond to some 16 questions after the reply, to come back again. I'm not 17 sure if you would like us perhaps to confer and then 18 return to the questions that you left us with? 19 5041 THE CHAIRPERSON: Why don't we do 20 that then. 21 5042 We will take the break and then if 22 you want to take the microphone after that we will do 23 that and then we will immediately follow that with the 24 next item. 25 5043 Is that suitable?
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1 5044 MR. DI FELICE: Thank you. 2 5045 THE CHAIRPERSON: Great. 3 5046 We will resume in 15 minutes, at four 4 o'clock. 5 --- Upon recessing at 1545 / Suspension à 1545 6 --- Upon resuming at 1602 / Reprise à 1602 7 5047 THE CHAIRPERSON: A l'ordre, s'il 8 vous plaît. Order, please. 9 5048 Mr. Di Felice, it is your microphone. 10 REPLY / RÉPLIQUE 11 5049 MR. DI FELICE: Thank you, 12 Mr. Chairman. 13 5050 In terms of addressing Commissioner 14 Wylie's questions regarding our considering 15 improvements from the status quo from the current 16 license term to the next license term, I will talk very 17 briefly about the three key issues that she mentioned. 18 5051 The evening broadcast period Canadian 19 content broadcast requirement of 15 per cent that we 20 proposed represents the establishment of a minimum 21 where one did not exist before. It is something that I 22 think for the reasons we have tabled we would be 23 comfortable with. That does represent an improvement. 24 5052 With respect to Canadian programming 25 expenditures, ramp up, the reasoning behind the
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1 graduated ramp up of 1 per cent per year starting in 2 year four, it did dovetail with our plans to use our 3 operating cash flow to help establish viable digital 4 ethnic channels, all-Italian and all-Spanish versions 5 of Telelatino. That was part of our reasoning for 6 starting the 1 per cent per year increase in year four 7 moving up to 20 per cent. 8 5053 To total impact compared to the 9 current license term of that proposal, that improvement 10 on the status quo, is an increase, an extra $9 million 11 in the Canadian content expenditures over the next 12 license term compared to the current license term. 13 That represents $9 million or 132 per cent. 14 5054 What we are prepared to do is to 15 further improve that proposal by, as Commissioner Wylie 16 suggested, starting the 1 per cent per year increments 17 in year one of the license, increasing by year seven to 18 23 per cent. The result would be that what was 19 previously offered as a 132 per cent improvement in 20 Canadian content expenditures, an extra $9 million, 21 will become 168 per cent improvement over the current 22 license term and will amount to a total Canadian 23 content expenditure over the next license term of, as 24 we calculated based on the May 3rd financial 25 projections we tabled of $18.6 million total versus the
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1 $16.1 million total that we previously tabled which, in 2 and of itself, as I have mentioned, was already an 3 extra $9 million over the current license term. So we 4 believe that that is a major improvement. 5 5055 In terms of the third issue, Canadian 6 content broadcast requirement which stands at 25 per 7 cent in our overall ethnic programming, our view is 8 that in the interests of our audience, and in order to 9 preserve the integrity of our schedule as we have 10 pointed out during this afternoon, the integrity of our 11 schedule with our viewers and advertisers, and in view 12 as well of the various type of Canadian enhancements 13 and contextualization work that we do that was referred 14 to in the demo reel and that we have referred to from 15 time to time in the course of this hearing, there is 16 various work that we do that is Canadian in nature, 17 whether it consists of subtitling programming, whether 18 it consists of dual audio tracks where TLN-produced 19 commentary to a soccer game doesn't count as Canadian 20 content, there is work that we do that is not counted 21 as Canadian content, Canadian broadcast when it is 22 done, and Canadian production, and we want to keep that 23 in mind. 24 5056 So, as a result, we would prefer to 25 keep the Canadian content broadcast requirement at a
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1 25 per cent level for the next license term in view of 2 the significant improvement in the proposal we have 3 made to the Canadian programming expenditure levels and 4 to the establishment of the evening broadcast period 5 requirement of 15 per cent content. 6 5057 As well, I can separately address the 7 Latin American Committee on Race Relations. 8 5058 We have filed a written reply which 9 addresses all of the issues raised by the letter, but 10 beyond that I do want to point out that the letter did, 11 and we do appreciate, the support for Telelatino and 12 Telelatino's seven year license renewal that the letter 13 expresses at its outset and the expressions of 14 Telelatino's importance to the community. We are in 15 agreement with that and we appreciate those statements. 16 5059 We have replied in detail to the 17 written interventions regarding the complaints in that 18 letter and we leave it to the Commission to review that 19 letter. 20 5060 Thank you. 21 5061 THE CHAIRPERSON: Thank you very 22 much. 23 5062 Next item, please. 24 5063 MR. LEBEL: Thank you, Mr. Chairman. 25 5064 We will now hear Item No. 9 on the
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1 agenda, which is applications by Cable Public Affairs 2 Channel Inc. to renew the broadcasting licences for the 3 English-language and French-language satellite-to-cable 4 programming undertakings expiring 31 August 2002. 5 5065 The licensee also proposes amendments 6 to its broadcasting licence as outline in the agenda. 7 5066 Mr. Ken Stein will introduce his 8 colleagues. 9 --- Pause 10 5067 COMMISSIONER LANGFORD: You are 11 flattering our sense of youth if you think we can read 12 that from here. 13 --- Laughter / Rires 14 5068 COMMISSIONER LANGFORD: We appreciate 15 the flattery, but it is all going to catch up to us 16 soon. 17 --- Pause 18 5069 MR. LEBEL: You have 20 minutes to 19 make your presentation. 20 PRESENTATION / PRÉSENTATION 21 5070 MR. STEIN: Thank you, Mr. Chairman, 22 Commissioners, Madam Vice-Chair. 23 5071 My name is Ken Stein. I am pleased 24 to be here today as CPAC's Chairman. 25 5072 Allow me to introduce my colleagues,
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1 all of whom are known to you, but some perhaps in 2 different capacities. 3 5073 To my left is Colette Watson, CPAC's 4 President and General Manager. 5 5074 To my right is Phil Lind, 6 Vice-Chairman of Rogers Communications Inc. Phil 7 played the key role in building the support in the 8 cable industry that was necessary to allow us to launch 9 CPAC in 1992. Phil has served on the CPAC Board since 10 that time. 11 5075 To Colette's left is Yves Mayrand. 12 Yves is the Vice-President, Legal Affairs and Corporate 13 Secretary for Cogeco Inc. He is also a director of 14 CPAC. 15 5076 On the far right of the front row is 16 Jim Deane, President of Access Communications of 17 Regina. Jim is a director of CPAC and represents 18 western Canada. 19 5077 Behind Jim is Dean MacDonald, also a 20 director of CPAC, and a Senior Vice-President of Rogers 21 Communications, who represents the Atlantic Canada 22 region on CPAC's Board. 23 5078 This represents all of our Board of 24 Directors, with the exception of Pierre Karl Péladeau, 25 who has just recently been elected to the Board of
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1 CPAC. 2 5079 In the back row, we have the team 3 that has helped to prepare our license renewal 4 application. 5 5080 Starting on my left is Patricia 6 Hutton, CPAC's Director of Finance and Administration. 7 5081 To Patricia's right is Joel Fortune 8 of Johnston & Buchan. 9 5082 Next to Joel is Robert Buchan of 10 Johnston & Buchan, who is CPAC's Corporate Secretary. 11 5083 To Bob's right is Chris Kelly of the 12 Strategic Counsel who prepared the market research 13 included in our application. 14 5084 Mr. Chairman, I would note that 15 today's proceedings are being streamed live on the web 16 in video by CPAC and are also being taped for broadcast 17 at a later date. 18 5085 Mr. Chairman, Commissioners, our 19 application is predicated on the assumption that CPAC 20 will continue to fulfil for a further seven years its 21 primary mandate: The distribution to Canadians of live 22 "gavel-to-gavel" coverage of the proceedings of the 23 House of Commons, in both official languages. I am 24 sure we all agree that this is the raison d'être and 25 programming cornerstone of CPAC's service.
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1 5086 But it is also clear from the wide 2 support CPAC has received from Members of Parliament, 3 provincial political leaders, educators, Canadian 4 citizens and advocacy groups, that CPAC's service is 5 also highly valued, because for 10 years CPAC has 6 provided unfiltered, balanced coverage of the civic 7 life of this country. In addition to the daily 8 proceedings of the House of Commons, CPAC has provided 9 the place for civil discourse and discussion of the 10 political issues of the day, on a full channel, 11 24 hours a day, seven days a week. 12 5087 CPAC plans to continue to build on 13 this blend of Parliamentary and other public affairs 14 programming over the course of the next license term. 15 5088 In a few minutes we will outline 16 CPAC's objectives for the license renewal term and the 17 most important elements of our application. First, 18 though, I would ask Phil Lind to briefly review how 19 CPAC has developed since 1992, from a two-year 20 experimental service into a highly valued national 21 public service that is now present in approximately 22 nine million Canadian households. 23 5089 Phil. 24 5090 MR. LIND: Mr. Chairman, in the 25 mid-1980s a few of us conceived the concept of a
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1 specialty programming service like CPAC that would be 2 offered by Canada's cable companies. We prepared an 3 application that was considered in the 1987 round of 4 licensing hearings for specialty services. We were 5 unsuccessful on that occasion, but our proposal to 6 combine wrap-around programming, public affairs 7 programming with live, unedited, TV coverage of the 8 proceedings of the House of Commons, caught the 9 attention of Members of Parliament and the President of 10 the CBC, Pierre Juneau. 11 5091 Mr. Juneau recognized the possibility 12 of a public/private partnership with the cable industry 13 in the operation of an enhanced Parliamentary Service, 14 and he worked hard with us to achieve that goal. A 15 further license application was prepared, based on that 16 unique joint venture, and the proposal received "all 17 party support" in the House of Commons. 18 5092 However, in the spring of 1991 the 19 CBC, under a new President and facing continuing 20 financial constraints, unexpectedly announced to 21 Parliament and to the cable industry that it would no 22 longer be able to underwrite even its own share of 23 costs associated with the proposed joint venture 24 Parliamentary Services. 25 5093 Immediately after this,
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1 representatives of the cable industry entered into 2 direct discussions with the Speaker of the House -- The 3 Honourable John Fraser -- because we were determined to 4 save and improve upon the House broadcast service that 5 had been available to cable subscribers since 1979. 6 5094 It is a matter of considerable 7 professional satisfaction for those of us in the cable 8 industry that the Speaker, and all Members of 9 Parliament, all put their faith in our industry and 10 have supported the establishment of CPAC service. 11 CPAC's first agreement with the Speaker of the House 12 was completed in 1992, with a term of only two years. 13 5095 Since that time it has over the past 14 decade built a relationship of trust and good faith 15 with the House of Commons. The House has demonstrated 16 its confidence in CPAC in the renewed agreement between 17 CPAC and the House which is included in this 18 application. 19 5096 MR. STEIN: Thank you, Phil. 20 5097 I would like to give the Commission a 21 sense of the scale of CPAC's achievement since it was 22 launched. Since 1992 CPAC has broadcast: 23 5098 Every sitting day of the House of 24 Commons, without exception; 25 5099 3,000 original hours of CPAC's own
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1 public affairs programming; 2 5100 5,500 additional original hours of 3 other Parliamentary programming; and 4 5101 30,000 hours of "long-form" coverage 5 of public events and enquiries. 6 5102 All of this has been achieved from 7 the outset with funding provided initially by CPAC's 8 shareholders and then through revenue contributed by 9 its affiliates. The vast majority of this funding has 10 come directly from the cable industry. 11 5103 Over the past decade, CPAC's cable 12 affiliates have contributed more than $40 million to 13 create and operate CPAC as a public service and support 14 its operations on a not-for-profit basis. 15 5104 As a result of this support, CPAC now 16 provides a valuable public service that makes a 17 significant contribution to diversity in the 18 broadcasting system and serves as a unique platform for 19 a collection of voices across Canada. 20 5105 We now have a short video that will 21 give the Commission an idea of CPAC's current 22 programming and on-air presence. 23 --- Video presentation / Présentation vidéo 24 5106 MR. STEIN: For the future, we 25 have identified three key objectives for CPAC:
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1 5107 First, to provide better, more 2 relevant and timely public affairs programming; 3 5108 Second, to become more accessible to 4 all Canadians; and 5 5109 Finally, to secure stable funding to 6 ensure the continued success of the service. 7 5110 For the first objective, we see 8 CPAC's public affairs programming continuing to provide 9 a forum for the civil, balanced and in-depth discussion 10 of issues of national importance 11 5111 CPAC's long-form coverage provides a 12 platform for the participants in Canadian public life 13 to speak directly to Canadians and to have their entire 14 message delivered -- unfiltered by journalistic 15 conventions. 16 5112 CPAC's more in-depth and neutral 17 public affairs programming builds on this same 18 principle. The objective is to allow participants in 19 Canadian public life to present their own views, 20 in-depth, to a broad audience. 21 5113 CPAC's round table call-in 22 programming also permits any Canadian who wishes to do 23 so to become involved in the discussion. 24 5114 All of this programming is provided 25 subject to CPAC's governing programming principles as
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1 set out in our first experimental license and in our 2 renewal, namely to: 3 5115 1) respect the letter and spirit of 4 House of Commons agreement; 5 5116 2) to maintain editorial 6 neutrality; 7 5117 3) to present a balance of diverse 8 points of view; 9 5118 4) to reflect Canada's dual 10 linguistic nature; 11 5119 5) to complement the public affairs 12 programming of other programming services; and finally 13 5120 6) to contain no commercial 14 content. 15 5121 CPAC is uniquely situated to enhance 16 the diversity of voices in the Canadian broadcasting 17 system. In this era of convergence, CPAC stands alone, 18 and is independent of any other newsroom or editorial 19 pressure. 20 5122 This is why it is important to the 21 Canadian broadcasting system that CPAC continue to 22 provide a full range of complementary public affairs 23 programming and continue to improve both the relevance 24 and the quality of this programming wherever possible. 25 5123 Given the importance with which
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1 Canadians view CPAC, we have outlined numerous specific 2 commitments in our application that are intended to 3 meet our second objective, to increase the 4 accessibility of the CPAC service for all Canadians. 5 5124 I would ask Colette Watson, CPAC's 6 President and General Manger, to review these 7 commitments. 8 5125 Colette. 9 5126 MS WATSON: Thank you, Ken. 10 5127 In preparing our license renewal 11 application we focused on how CPAC could provide a 12 better public service. Clearly, as a public service 13 CPAC should be made available to all Canadians, not 14 only in terms of the programming offered, but also in 15 the way in which this programming is offered. 16 5128 En notre qualité de service national 17 mettant l'accent sur les activités du parlement du 18 Canada, nous sommes d'avis que CPAC devrait présenter 19 toute sa programmation dans les deux langues 20 officielles. 21 5129 À cette fin, nous avons élaboré un 22 plan visant à créer et offrir davantage d'émissions 23 originales en français. Parmi nos projets, citons la 24 diffusion quotidienne de « Revue Politique », une 25 émission en français d'affaires publiques actuellement
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1 présentée sur une base hebdomadaire, et la recherche 2 d'un plus grand nombre de colloques en français. 3 5130 Nous estimons que la mise en oeuvre 4 de ces engagements coûtera environ 12,5 millions $ pour 5 la période couvrant la prochaine durée de licence. 6 5131 CPAC appuie également la politique du 7 Conseil de s'assurer que toutes les délibérations de la 8 Chambre des communes soient présentées dans les deux 9 langues officielles à la grandeur du pays. Nous avons 10 donc réservé un budget do 300 000 $ pour aider les 11 systèmes de classe 3 à se doter des modulateurs qu'il 12 leur faut pour distribuer le second canal d'émissions 13 sonores (SCES) du service CPAC. 14 5132 CPAC has an impressive record in 15 providing full coverage of public hearings, 16 conferences, political conventions and other events 17 from all over the country. Over the next license term 18 CPAC is committed to enhance this service by 19 broadcasting at least one public affairs program from 20 each of Canada's provinces and territories per year. 21 5133 CPAC's long-form coverage is, by far, 22 the most expensive programming that CPAC produces. 23 This commitment, therefore, represents a substantial 24 allocation of CPAC's resources to ensure regional 25 representation on CPAC's channel.
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1 5134 We estimate that an incremental 2 $7 million will be spent over the license term on this 3 initiative. This expenditure on regional programming 4 represents approximately 40 per cent of CPAC's 5 long-form programming budget. 6 5135 To provide better service to deaf and 7 hard of hearing Canadians, CPAC will increase its 8 closed captioned programming to the level of 90 per 9 cent for CPAC's own English-language programming by the 10 sixth year of the license term. CPAC will also 11 endeavour to achieve at lest 50 per cent closed 12 captioning for French-language programming in the same 13 time period. This represents an incremental cost of 14 $4.6 million over the license term. 15 5136 CPAC est généralement reconnue comme 16 étant « la fenêtre du Canada sur le parlement » et sur 17 d'autres délibérations à caractère public. Notre site 18 web pourrait éventuellement servir à la diffusion des 19 événements que nous ne sommes pas en mesure de 20 présenter à la chaîne principale. 21 5137 CPAC a su exploiter ce potentiel 22 depuis les deux dernieres années en diffusant toutes 23 ses émissions sur le web, dans les deux langues 24 officielles. 25 5138 Les nouvelles technologies, y compris
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1 l'archivage sur le web et la diffusion en direct sur 2 l'Internet du signal de CPAC, multiplient les occasions 3 pour rendre encore plus accessibles les travaux du 4 parlement et de nombreux autres événements publics dans 5 les deux langues officielles. 6 5139 CPAC juge que ce sont là des 7 engagements de taille qui, réunis, reflètent les 8 efforts de la chaîne pour devenir plus accessible, à 9 titre de service entièrement bilingue, pour tous les 10 Canadiens. 11 5140 Yves. 12 5141 MR. MAYRAND: Merci, Colette. 13 5142 Mr. Chairman, Commissioners, as you 14 know, CPAC has proposed that the Commission approve, 15 for the first time in its 10 years of operation, an 16 authorized wholesale rate. CPAC is entirely dependent 17 for its operation on a single source of revenue, which 18 is: payments from affiliates. 19 5143 CPAC's Board of Directors 20 established the wholesale rate at the lowest level 21 we believe possible if CPAC is to continue to provide 22 a high quality, highly valued public service, and to 23 meet its commitments throughout the next seven year 24 license term. 25 5144 There are two portions to the
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1 proposed rate: 2 5145 First, we have proposed a three cent 3 public service portion that would be used to support 4 the backhaul, assembly, uplinking and transmission of 5 proceedings of the House of Commons and other 6 Parliamentary programming. This portion would be 7 funded by CPAC's affiliates and not passed through 8 directly to subscribers. 9 5146 Second, we have proposed a 10 pass-through portion to provide CPAC with a stable 11 source of funding in order to fulfil its commitments 12 and to realize its full potential as a public service. 13 We are proposing that this portion of the wholesale 14 rate be set at seven cents in the first two years of 15 the license term, rising to eight cents in the third 16 year. 17 5147 All of the revenue generated from 18 this pass-through portio would be used by CPAC to 19 support the production of high quality, long-form and 20 in-depth public affairs programming from all regions of 21 the country, and to fulfil the significant commitments 22 that CPAC has made to increase the accessibility of its 23 service to Canadians. 24 5148 Nous sommes convaincus que le tarif 25 de gros que nous proposons est raisonnable et justifié.
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1 Nous soulignons à cet égard deux facteurs 2 significatifs. 3 5149 D'une part, nous avons reçu un grand 4 nombre d'interventions favorables qui reconnaissent 5 qu'un service offrant une programmation d'affaires 6 publiques de grande qualité, équilibrée et sans parti 7 pris éditorial implique des coûts importants et mérite 8 d'être appuyé. 9 5150 D'autre part, aucune intervention n'a 10 été reçue de quelque association de consommateurs ou de 11 nos concitoyens en opposition au tarif de gros que nous 12 proposons. 13 5151 MR. STEIN: Thank you, Yves. 14 5152 Mr. Chairman, Madame Vice-Chair, 15 Commissioners, CPAC now operates in a totally different 16 broadcasting environment than when it was first 17 licensed. Over the past decade the sheer number of new 18 programming services that have recently launched, and 19 others that are available to be launched, have placed 20 pressures on all existing programming services to 21 improve the content of their respective services in 22 order to remain relevant. CPAC is no exception. 23 5153 Competition has also placed 24 significant pressure on all distributors to decrease 25 costs and to improve services. It has become apparent
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1 to CPAC, and to its Board of Directors, that the 2 continued funding of all of CPAC's operations by its 3 affiliates, without the ability to recover at least a 4 portion of that contribution from subscription revenue, 5 is simply not a realistic option. 6 5154 CPAC itself does not compete in the 7 conventional sense with other services for viewers. 8 CPAC carries no advertising, and it is not dependent on 9 audience ratings. But CPAC does compete for 10 credibility among viewers and for the respect of the 11 Canadian public. 12 5155 CPAC is proud to provide a service 13 that does attract viewers, that is relevant, that 14 provides high quality, balanced and informative 15 programming and contributes to diversity in the 16 broadcasting system. 17 5156 We believe CPAC is on the right track 18 to maintain and increase its relevance for all 19 Canadians and to preserve its role as a platform for 20 the balanced and civil discussion of matters of public 21 importance. 22 5157 Clearly CPAC has established itself 23 as an important service to Canadians and should be 24 encouraged to continue to provide its highly valued 25 blend of Parliamentary, long-form and public affairs
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1 programming. 2 5158 We believe the proposals in our 3 license renewal application point the way to CPAC's 4 success for the future. 5 5159 Mr. Chair, We welcome any questions 6 that you may have. 7 5160 Thank you. 8 5161 THE CHAIRPERSON: Thank you very 9 much. Merci beaucoup, Madame Watson, Monsieur Mayrand. 10 5162 First of all Mr. Lind, 11 congratulations on 20 years later. I know you were 12 there at the beginning and I know that the service has 13 been an extremely good one for a long time. We are at 14 a bit of a crossroads. In fact, it is essentially, as 15 I understand it, two services combined together, an 16 exempt undertaking of the House of Commons and then the 17 wrap-around programming that is the licensed service in 18 English and in French. 19 5163 So keeping those two in mind 20 throughout the proceedings may tax my abilities from 21 time to time, so I am going to ask our counsel to 22 assist me in some of the questioning, particularly in 23 regards to carriage, and pass-through details and the 24 reconciliation of your proposal with the BDU regs. 25 Commissioner Cardozo will be assisting me with a number
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1 of the social issues arising from your application. 2 5164 I would like to begin, if I may, with 3 some financial questions. I am trying to separate out 4 the two services, if you like, from a financial point 5 of view. As I look forward seven years with you, try 6 to look forward at the sourcing of the revenues, so to 7 speak, and the expenditure of those revenues of the 8 period. 9 5165 So if you will bear with me I will 10 try to go through it. 11 --- Pause 12 5166 THE CHAIRPERSON: If I look at your 13 financial projections on the revenue side I see a rough 14 figure of some $92 million dollars of projected 15 revenues over the seven year period, all sources. Is 16 that correct? 17 5167 MR. STEIN: What was the number, 18 I'm sorry? 19 5168 THE CHAIRPERSON: About $92 million. 20 5169 MR. STEIN: Yes. Right. 21 5170 THE CHAIRPERSON: Of that $92 million 22 I see approximately $66 million or about 72 per cent 23 coming from cable subscribers and $25 million, or about 24 28 per cent, coming from your affiliates, of that 25 $92 million. Is that correct?
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1 5171 MR. STEIN: Yes. 2 5172 THE CHAIRPERSON: Okay. Now, looking 3 at those revenue numbers and comparing the revenues in 4 the current year with the next year first, which would 5 be year one of operation and, if I can find it, I am 6 seeing a change in revenues from your affiliates going 7 down from a total of roughly $6.7 million down to 8 $3.8 million. That is 2002 to 2003? 9 5173 MR. STEIN: Yes. 10 5174 THE CHAIRPERSON: Are those correct? 11 5175 MR. STEIN: Right. 12 5176 THE CHAIRPERSON: So that 13 represents the drop in funding of, if you like, your 14 affiliates, the cable industry and DTH providers, from 15 2002 to 2003. 16 5177 MR. STEIN: Yes 17 5178 THE CHAIRPERSON: That line from 2003 18 would carry on at approximately the $3.8 million level 19 per year all the way out to get our $25 million at the 20 end. 21 5179 MR. STEIN: Yes. 22 5180 THE CHAIRPERSON: Okay. On the 23 expenditure side I am trying to get an equivalent 24 relationship, if there is one. The $25 million that 25 your affiliates would spend is your estimate of what
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1 the House of Commons programming would cost? 2 5181 MR. STEIN: Yes. 3 5182 THE CHAIRPERSON: That would total 4 what over seven years? I don't know that I have that 5 figure. 6 5183 MR. STEIN: Colette, do you want 7 to -- 8 5184 MR. WATSON: If I am looking at the 9 same chart you are, it would be the top line of three 10 cents revenue contribution HOC. If you follow that 11 through to the end, the total for seven years is 12 $25,742,000. 13 5185 THE CHAIRPERSON: Right. Okay. 14 5186 MS WATSON: Une petite précision. It 15 is $3.4 million in 2002-2003, not $3.8 million. 16 5187 THE CHAIRPERSON: It is either my 17 handwriting -- no, you are absolutely right. 18 $3.48 million? 19 5188 MS WATSON: Yes. 20 5189 THE CHAIRPERSON: It was my 21 handwriting. Thank you. 22 5190 Okay. Did you build these statements 23 in that way, you estimated what the cost of the House 24 of Commons proceedings would be and then you backed 25 that over to what your affiliates should come up with
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1 and then divided by the number of subscribers and got a 2 per-subscriber fee of about three cents? 3 5191 MR. WATSON: We started out with the 4 principle that the distributers would continue to 5 provide as public service the distribution of the House 6 of Commons programming service. So we then, that being 7 said, built out the cost of what is required to deliver 8 that. It worked out to three cents per subscriber, and 9 then built the rest of it. 10 5192 THE CHAIRPERSON: Okay. So what has 11 been transferred over really, the chunk, if you like, 12 of expenditures that has been transferred from the 13 cable operators to the subscribers, is the existing, 14 let's call it wrap-around programming. 15 5193 MR. WATSON: That is correct. 16 5194 THE CHAIRPERSON: And the new 17 wrap-around programming added on to the existing is the 18 sum total of what the subscribers will be asked to foot 19 the bill for going forward. 20 5195 MR. STEIN: Well, it is the existing 21 wrap-around programming plus the improvements in the 22 service with respect to what we think is necessary for 23 improved public affairs programming, but also in terms 24 of the objectives we laid out in terms of regional 25 coverage, French-language and closed captioning.
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1 5196 THE CHAIRPERSON: I hope that is what 2 I had said. So we are on the same wavelength. 3 5197 Those breakdown roughly in about 4 $30 million each over the seven year period, $29 or 5 $30 million? That is the existing programming as is 6 and the improvements, each have a price-tag or 7 roughly -- to get up to our totals roughly $30 million? 8 Give me the correct figures. 9 5198 MR. WATSON: The two combined, 10 but the percentage proportion is very -- it changes 11 after year three, but yes, the two combined would 12 create the rest of the money. 13 5199 THE CHAIRPERSON: Yes. I guess 14 another way to look at it is simply to say that if you 15 just take the affiliate revenues from this year and you 16 drop them roughly in half, which is what we are talking 17 about, then -- 18 5200 MR. WATSON: There is no money to do 19 anything else. 20 5201 THE CHAIRPERSON: -- the costs 21 associated with those revenues. 22 5202 MR. WATSON: Yes. 23 5203 THE CHAIRPERSON: As you have said, 24 you geared the amount you should be as an industry 25 responsible for to what you thought the House of
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1 Commons proceeding would cost period. 2 5204 MR. WATSON: Yes. 3 5205 THE CHAIRPERSON: All the wrap-around 4 now goes into existing plus new for the balance of the 5 amount. For your total operating expenses over the 6 period I make about $84 million? 7 5206 MR. WATSON: Yes. 8 5207 THE CHAIRPERSON: Is that about 9 right? The balance is depreciation and so forth to 10 come to the balance back to our $92 million. 11 5208 MR. WATSON: Yes. 12 5209 THE CHAIRPERSON: Okay. Thank you. 13 5210 Okay. So with that cleared out of 14 the way let me ask you a number of policy questions 15 relating to that. 16 5211 I guess the first question is that on 17 the face of it your application would seem to show that 18 you politely declined the Commission's strong 19 encouragement of the cable industry to continue to 20 finance all programming of CPAC. Is that correct. 21 5212 MR. STEIN: I think we took a more 22 balanced approach then that. 23 5213 I think that what we felt was 24 important was to continue the commitment to the House 25 of Commons and to commit to continue in terms of the of
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1 the wrap-around programming, but I think as members of 2 the Board of CPAC what we were concerned about was that 3 this had to be put on a sustainable basis. We felt 4 that the best way to this was to be able to establish a 5 rate. 6 5214 Now, how the distributers choose to 7 pass through that rate will be up to them, but we felt 8 in terms of the service itself the three cents that -- 9 in using the round numbers, the three cents for the 10 coverage at House of Commons and then the additional 11 seven cents for the first period of license term and 12 the eight cents would allow us, as a responsible Board 13 for the CPAC service itself in its totality, put it on 14 a stable funding basis. That was the basis for it, 15 regardless of what the distributers do. 16 5215 THE CHAIRPERSON: What do you mean 17 "regardless of what the distributers do"? 18 5216 MR. STEIN: Well, we recognized that 19 over time a number of things were happening in the 20 environment. One is that the whole environment was 21 becoming very competitive on a distributer point of 22 view. Distributers were faced with, as they are now, 23 cutting costs. 24 5217 I mean, the CRTC's own reports point 25 out that in terms of the cable industry its revenues
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1 have been rather flat and its operating income has 2 become negative, and that for the satellite side of it, 3 because of the massive investments involved, there are 4 significant losses. So that as that whole distribution 5 environment becomes more competitive the ability for 6 our service over the next seven years to depend on that 7 continuation would not be, in our view, wise. It would 8 put it at risk. 9 5218 So we felt that the best thing to do 10 was to look at the budget, which we went at quite 11 thoroughly, and to say "Okay, what do we need to run a 12 good public affairs service -- a lean service, but a 13 good public affairs service, and meet the obligations 14 that are out there that we think will be out there over 15 the license term." So that was the basis of it. 16 5219 It was a realistic assessment of the 17 fact that it is a very competitive environment out 18 there and that we have to put this on a firm 19 foundation. 20 5220 THE CHAIRPERSON: Right. So the 21 House of Commons service, if you like, is not on a 22 sustainable basis in an economic sense, but you are 23 contributing to that. 24 5221 MR. STEIN: We understand that. That 25 has always been a commitment.
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1 5222 It is kind of interesting because 2 when we first got into this, those of us who remember 3 Phil's entreaties at the beginning to get us all into 4 this, if I can put it that way, it was a commitment of 5 about, I think we estimated about $4 million for your 6 couple of years. That was the commitment for two 7 years. 8 5223 Somehow Phil got everybody to come 9 along for about 10 years and $40 million. The 10 circumstances were different then. We didn't have the 11 massive number of new services. If you look at Peter 12 Grant's new volume, it is quite impressive to think 13 that that yellow book would have probably been about 14 20 pages when we launched this service. 15 5224 So the number of new services that 16 have been launched, the competition in the distribution 17 side that is there. The world has changed 18 significantly over that period of time. The cable 19 industry and the satellite industry are now required to 20 contribute 5 per cent. That didn't exist at that time. 21 5225 So there are a lot of very changed 22 circumstances that are putting pressures on the 23 distributors, both satellite and cable, and what we 24 think is really important is that, as you pointed out, 25 Mr. Chairman, we are at a crossroads and we want to
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1 make sure -- we are the policy wonks of the business 2 and we wanted to make sure that what we felt was a 3 really important service was going to be able to 4 survive over the next number of years. 5 5226 THE CHAIRPERSON: Thank you. 6 5227 The Commission is, of course, always 7 concerned about approving steps that will increase the 8 cost of basic service. This proposal would add $1.20 a 9 year per some and going up, wouldn't it? 10 5228 MS WATSON: It would be 84 cents. It 11 is seven cents, not 10. 12 5229 THE CHAIRPERSON: It is seven cents, 13 not 10. 14 5230 MS WATSON: Three cents of the 15 10 cent rate is not borne by subscribers, does not show 16 up on the basic cable bill. 17 5231 THE CHAIRPERSON: Oh, I'm sorry. You 18 are quite right about that. No, that is quite right. 19 So my math was wrong. I was multiplying 10 and I 20 should be multiplying seven. 21 5232 MS WATSON: Yes. 22 5233 THE CHAIRPERSON: What is it then, 23 84 cents? 24 5234 MS WATSON: Eighty-four cents. 25 --- Laughter / Rires
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1 5235 THE CHAIRPERSON: Thank you. 2 Eighty-four cents going to 98 cents. 3 5236 MS WATSON: Yes. 4 5237 THE CHAIRPERSON: Phew. 5 --- Laughter / Rires 6 5238 THE CHAIRPERSON: Okay. So that is 7 an issue that we should talk about a bit. Of course, 8 you know, I asked you to help us with a number of 9 scenarios. 10 5239 What if we were to say "Denied. You 11 can't have the proposal you are putting forward"? What 12 is Plan B here? 13 5240 MR. STEIN: I'm not sure we have a 14 Plan B. 15 5241 Well, I would think that what would 16 happen is that the viability of the service would 17 really be quite in question. Because I think what we 18 are looking for is the members of the Board of CPAC is 19 we are looking for a guaranteed wholesale rate. We are 20 looking at a rate that as we move forward in this new 21 kind of circumstances what we are saying is that as we 22 negotiate with the distributors we want to have a rate 23 that says: This is worth 10 cents. 24 5242 I found it was quite interesting when 25 we were talking to -- when members of the Board and
904
1 Colette Watson and myself went around and talked to 2 Members of Parliament and to the leaders of all the 3 parties -- I thought actually, without being political 4 about it, it was put best by Mr. Reynolds, the leader 5 of the Alliance Party who said he thought this was the 6 best bargain in broadcasting at 10 cents. 7 5243 I think when people have seen the 8 dedication and effort of the 40 people who run this 9 service, it is an important and it is an essential 10 service. I think that we believe that the 11 indications -- from the interventions that we did 12 receive in support and from the comments made and from 13 the surveys, the research that Chris Kelly undertook 14 for us, that we are prepared to say to Canadians that 15 this is the right thing to do. This is an important 16 essential service, it is the only service of its kind, 17 and we expect to be able to sell it on that basis. 18 5244 THE CHAIRPERSON: Right. But my 19 question was, for whatever -- just as you politely 20 declined our invitation to continue to fund, if we were 21 to politely your application, what then? 22 5245 MR. STEIN: It is in jeopardy. 23 Frankly, it is in jeopardy. It is -- 24 5246 THE CHAIRPERSON: What is in 25 jeopardy?
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1 5247 MR. STEIN: The service. 2 5248 THE CHAIRPERSON: Which of the 3 services is in jeopardy? 4 5249 MR. STEIN: The House of Commons feed 5 would still be there, but I think that the service 6 would not continue. I mean, to be blunt about it, we 7 couldn't, as a Board when we looked at the other 8 options, the ability of this service to stand on its 9 own, would not -- it just wasn't -- it was not viable. 10 5250 THE CHAIRPERSON: So are you saying 11 that you would still spend the $25 million on the House 12 of Commons service, but you would not spend the 13 $30 million on wrap-around or any part of that? 14 5251 MR. STEIN: We don't have a 15 commitment from all the distributors for the 16 $25 million. 17 5252 THE CHAIRPERSON: So do you have a 18 position to share with us as to the consequence of 19 that, other than the service going -- 20 5253 MR. STEIN: We have some distributors 21 who say that, yes, they would carry the House of 22 Commons, but one would have to look in the kind of 23 environment that we are looking at exactly how that 24 is paid for. 25 5254 THE CHAIRPERSON: And?
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1 5255 MR. STEIN: They haven't -- in other 2 words, they have not made a commitment. The commitment 3 that has been made has been on the basis of the support 4 for this application. We haven't gone to them and said 5 "Okay, if we don't get this" -- 6 5256 I guess my problem is, when I started 7 out life as a salesperson with IBM we were always 8 taught that there was no alternative to buying a 9 computer. So I think that in our discussions with 10 distributors what we basically have talked about is 11 this application and moving forward with this 12 application. In terms of this application not being 13 approved and not being able to get the pass-through, 14 then I would say the service is definitely in jeopardy 15 and it is just not a viable service. 16 5257 It is like any other service. No 17 service out there is viable without a rate that is 18 provided to it. 19 5258 Part of the problem is that if you 20 look at the Commission's own numbers, you know, you 21 look at the significant revenue increases in the pay 22 and specialty services over the past number of years, 23 the significant improvements in operating income, they 24 have not been matched on the distributor's side, so to 25 expect the distributors to continue to support this in
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1 this way would be questionable. 2 5259 But in terms of the question of -- I 3 think what would really influence people in all this is 4 really where the subscribers are on this. 5 5260 Maybe if Chris could talk about the 6 market research that he undertook for us it might help 7 to shed some light on why we feel confident that we can 8 do this. 9 5261 THE CHAIRPERSON: Right. No, that is 10 not my question right now. You are free to address 11 that later on. 12 5262 As you know, last November, 13 November 6, 2001 in Public Notice 2001-115, the 14 Commission announced that it was going to amend the 15 regulations requiring all Class 1 and 2 BDUs to 16 distribute the proceedings of the House of Commons as 17 part of basic service. That reg will be in force I 18 gather by the 1st of September and will be released for 19 final comment I assume fairly soon. 20 5263 So there will be an obligation on the 21 part of BDUs. Are you saying that they may have an 22 obligation to carry but there won't be anything to 23 carry? 24 5264 MR. STEIN: I think that the House of 25 Commons will provide a feed, they do that now, and it
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1 will be available to individuals. Depending on this 2 application individuals would be free to pick up that 3 feed and carry it as they see fit. That is one of the 4 options that the regulation would leave open. 5 5265 THE CHAIRPERSON: So presumably on 6 behalf of its members the CCTA would negotiate with the 7 Speaker for the terms of carriage, bypassing the 8 middleman, is that what -- I'm just trying to 9 understand -- 10 5266 MR. STEIN: It hasn't worked that way 11 in the last couple of years. It is a much more 12 competitive situation than it has been in the past and 13 so the ability to come to those common commercial 14 arrangements has not always been there. 15 5267 THE CHAIRPERSON: But you are not 16 saying that -- you are saying the feed will exist and 17 the obligation will exist and the question is what will 18 be the nature of the service. Will it be anything more 19 than the House of Commons. 20 5268 What I'm hearing you say is you don't 21 have any commitment to go beyond -- at all to go beyond 22 that if the pass-through should not be approved? 23 5269 MR. STEIN: The commitment that we 24 have from the cable distributors, because that is where 25 the pass-through comes into play, it doesn't apply on
909
1 the satellite side, but the commitment we have is for 2 this application, that this application, after many 3 discussions and some further discussions we have yet to 4 have and hope to keep people together on this, is on 5 the basis of this application. Because it is felt that 6 the value of this service is a total service. 7 5270 I don't know how to put it -- we 8 don't want to contemplate the alternative -- maybe I am 9 going around this a bit, but the thing is that we don't 10 want to contemplate the alternative because we think 11 that just having a single feed House of Commons service 12 up there, which we totally agree with you should be 13 mandatory, should be covered, carried, there is no 14 issue with that at all. The House of Commons service 15 is in fact the core of this service so it should be up 16 there and carried, but what we are saying is that a 17 service like that without the wrap-around programming, 18 the committees, the other proceedings, the inquiries, 19 that is what makes this a distinctive service and that 20 is what we would like to have. 21 5271 THE CHAIRPERSON: I take that point. 22 The Commission has said that it is a valuable service 23 so there is no issue there. We are just quibbling over 24 the price I think at this point. 25 5272 MR. STEIN: Well, it is a good thing
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1 to quibble about. 2 5273 THE CHAIRPERSON: I guess now the 3 issue is that you say you don't have a commitment. So 4 what I want to ask you is, I mean what if the 5 Commission granted part of your request in respect of 6 the pass-through and said "Well, in our estimation you 7 said it was lean and mean, we are saying make it leaner 8 and meaner. We are prepared to grant you, for argument 9 sake, 50 per cent of your pass-through". You can pick 10 any number in between there. What then would the 11 service consist of? 12 5274 MR. STEIN: We actually, as a Board, 13 spent quite a bit of time going through this. We had 14 subcommittees and we spent a lot of time with Colette 15 Watson going through the numbers and we had other 16 discussions of CEOs in terms of what this rate should 17 be. Recognizing the competitive situation the 18 instructions we had were to keep it as low as possible. 19 There were in fact, to be blunt, suggestions that it 20 would be lower than it is. 21 5275 But recognizing that what we -- we 22 wanted to have a service that we felt would meet the 23 needs that are out there over the next number of years. 24 We felt there were certain programming principles that 25 we really weren't doing as good a job at as we would
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1 like to do in terms of the French-language service, in 2 terms of closed captioning services, et cetera, that we 3 wanted to do a much better job at that. 4 5276 We essentially, when we looked at a 5 lower priced alternative -- and we would be willing to 6 talk to you about that in detail as to exactly what 7 would come out of the service if we didn't get every 8 little penny -- but we just felt this was the tightest 9 number we could come up with and one which we said we 10 really wanted to put forward and we felt that that was 11 important. 12 5277 The other thing is that it is really 13 important that this be a credible service. We have 14 built it up to a kind of a level of credibility, but it 15 is interesting in one of the pieces of research that we 16 filed that was undertaken by Barry Keifl on public 17 affairs programming. 18 5278 Public affairs viewing in Canada has 19 grown significantly over the past decade. What is 20 really interesting is that the viewing of the American 21 public affairs programming has really grown over the 22 past 10 years, triple the rate of the Canadian viewing 23 of public affairs programming. There isn't enough good 24 Canadian public affairs programming. We think that 25 what we proposed was the leanest, meanest proposal with
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1 not a big increase in terms of the staff increases and 2 the other increases. This money is going to very 3 clearly allocated proposals so if we don't -- like if 4 you said "Okay, well, what if we took off two cents?" 5 I would say "Well, there goes regional productions". 6 Well, I think in terms of the credibility of the 7 service to Canadians regional productions is an 8 essential part of the future of what this is all about. 9 5279 French-language goes without saying. 10 We just have to do a better job on the French-language 11 side. 12 5280 THE CHAIRPERSON: Right, so -- 13 5281 MS WATSON: I'm sorry, if I could add 14 one more thing. 15 5282 CPAC has been in operation for 16 10 years at the same rate, so if you were to grant it 17 50 per cent it is essentially another seven years at 18 the same rate. Costs go up, expectations go up over 19 20 years, things like rent, hydro, staff salaries, 20 insurance, tape costs. 21 5283 The equipment is 10 years old. At 22 some point it is just going to die. So then we won't 23 be able to do a thing. So, you know, now it is in the 24 end of its life cycle so maintenance costs are higher. 25 We won't even be able to maintain what we do now in the
913
1 out years without this amount of money. 2 5284 THE CHAIRPERSON: I appreciate that 3 costs go up. I guess what we are seeing is 4 simultaneous having of the commitment, as we discussed 5 before, from $6.8 to $3.4 million on behalf of the 6 industry at the same time as costs are going up and you 7 want more funding for all of the programming that you 8 say would be so enriching for the service. 9 5285 So I am wondering why it would be 10 unreasonable for the Commission to say something like 11 "Well, maintain the trajectory of commitments that you 12 have been maintaining a the $6.7-$6.8 million level 13 rather than dropping down to the $3.4 million and 14 possibly we will approve a pass-through for the balance 15 to get you where you want to go" as, for example, a 16 scenario. Why would you back away from that? 17 5286 MR. STEIN: I think it is important, 18 first of all, that the historic commitment was to the 19 carriage of the House. The historic commitment has 20 always been to what we estimate to be the three cents. 21 That has been the commitment. 22 5287 The second is that the circumstances 23 for distributors have changed markedly over the past 24 number of years and we have to face the reality that 25 for the cable sector there is no growth and an
914
1 increasingly negative cash flows in terms of basic. On 2 the satellite side there are huge investments that are 3 being made and will probably continue to have to be 4 made over the next time period. 5 5288 There already are other contributions 6 that are being made by those sectors in terms of the 7 Television Production Fund, as one big example, 8 copyright fees, there are a whole range of things that 9 have increased dramatically over the past number of 10 years. As we looked out over the future, we just did 11 not feel that to expect that level to continue would be 12 realistic. 13 5289 THE CHAIRPERSON: Have you explored 14 other methods of funding of the service than the two? 15 5290 MR. STEIN: Not popular ones. 16 --- Laughter / Rires 17 5291 THE CHAIRPERSON: Other models or 18 approaches? 19 5292 COMMISSIONER LANGFORD: I'm sorry, I 20 just missed that answer. Excuse me. 21 5293 THE CHAIRPERSON: Not popular ones he 22 said. 23 5294 COMMISSIONER LANGFORD: Oh, not 24 popular ones. Thank you. 25 --- Laughter / Rires
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1 5295 COMMISSIONER LANGFORD: I'm sorry. 2 5296 THE CHAIRPERSON: Were other models 3 or approaches canvassed? 4 5297 MR. STEIN: Well, we did look at 5 other funding sources, but we felt that -- credits, for 6 example, but they weren't areas that we felt -- I think 7 what we felt was important in this was that there is 8 very much a government policy to look at -- for public 9 services to look at stable funding. It is an issue for 10 the CBC, it is an issue for the Canadian Television 11 Fund, and we felt what was most important was to put 12 this on a sustainable basis. This is the cost of 13 providing a good service. 14 5298 That is why we asked Chris to 15 undertake the research that is to say: Is this an 16 important -- do people think it is an important 17 service?" So if it is an important service and people 18 want it and feel that it is essential to have and that 19 the wrap-around programming is essential -- I recognize 20 the Commission has already said that and we appreciate 21 that support, but we wanted to really find out what 22 people felt and they did. 23 5299 That is what one of the charts that 24 Mr. Langford is going to come over and look at later 25 says, that it is really important that we have this
916
1 kind of service and so we feel on that basis that this 2 was the most appropriate funding model rather than 3 going to, you know, take a percentage off the 4 Television Fund contribution or out of the other 5 services we operate. We felt this was the most 6 appropriate way to go. 7 5300 THE CHAIRPERSON: If your license 8 were not coming up for renewal this year, let's say it 9 was two years away, presumably the cable industry would 10 continue to fund the service, wouldn't say we need an 11 urgent amendment to our license now because the money 12 is running out. You would presumably fund it for 13 another two or three years at that $6.7 or $6.8 million 14 level. 15 5301 MR. STEIN: I think in a certain way 16 you are correct. There are a number of things that 17 were happening. 18 5302 One is the renewal of the agreement 19 with the House of Commons. 20 5303 Second was, the Commissioner of 21 Official Languages Review and the court cases involved 22 in terms of official languages. 23 5304 Third was that as people became more 24 involved and aware of it -- I mean it is quite 25 impressive the list of people that had been involved
917
1 from the multicultural community, aboriginal 2 communities have become involved, and so we felt we had 3 to move forward this way. 4 5305 THE CHAIRPERSON: Mr. Stein, you made 5 the point and it is not that I have a large problem 6 with it, but I am interested in that you mentioned that 7 this programming, I think words to the effect that this 8 isn't available from other broadcasters. I wanted to 9 go through your schedule at a high altitude level so 10 that you could help me zero in on those programs that 11 you don't think are or would be likely to be available 12 on other services that are available and will be 13 available on CPAC. 14 5306 Do you have that schedule? 15 --- Pause 16 5307 THE CHAIRPERSON: I appreciate that 17 coverage of the House of Commons obviously, and of 18 extended coverage of committees but for urgent 19 situations, emergencies, crises are probably unlikely 20 to be. What else? What other aspects of programming 21 would -- Supreme Court? I'm starting you off. 22 5308 MS WATSON: Essentially we would 23 reduce -- to begin with we would reduce with the 24 long-form programming. So there would be fewer 25 opportunities to go to cover conventions or political
918
1 conventions or inquiries. It is extremely expensive to 2 send a crew across the country to go cover the 3 Walkerton Inquiry or the Blood Inquiry, the Somalia 4 Inquiry. These are long. They last for months. They 5 require remote location television coverage which is 6 more expensive. So we would cut back there. 7 5309 There are things that are -- we would 8 have to cut back on the number of staff we have. We 9 would cut back on the amount of programming we have 10 simultaneously interpreted. SI, as we call it, is 11 incredibly expensive. Having come out of a monopoly I 12 have now entered myself in -- I have now encountered it 13 on the other side as a consumer and they being a 14 supplier. There is no bargaining there. So captioning 15 is expensive. So these things, rather than eliminate 16 all together, we would just reduce overall. 17 5310 I'm not sure if you are looking for 18 me to tell you I would cancel this program or that 19 program. 20 5311 THE CHAIRPERSON: I was looking -- 21 let me ask it another way. 22 5312 I look at the schedule and with the 23 exception of the extensive coverage of the House, the 24 Supreme Court and committees that are not at the high 25 newsworthy level, there is no question, but when I look
919
1 at "Talk Politics", "Prime Time Politics", "Rockburn 2 Presents", and so on, "One on One", those are programs 3 of a genre that one might find on other services, CBC, 4 Newsworld and others, so I guess I am looking for the 5 case for distinctiveness here. 6 5313 MS WATSON: Right. But if you take 7 "Prime Time Politics" for example, that program is 8 really a collection of -- a condensation of long-form 9 programming, but is very different from a news program. 10 For example, on "Prime Time Politics" is where you will 11 find scrums, is where you will find press conferences, 12 is where you will find the round table discussion of an 13 issue. 14 5314 If I were to break down that 15 programming, 5 per cent of that program is the host, 16 15.5 per cent of it is news conferences, and 61 per 17 cent of "Prime Time Politics" is the round table 18 discussion, either with three or four guests providing 19 the balance on the issue or with Canadians through the 20 phone-in segment. So that would disappear. 21 5315 That happens to be very, very popular 22 and it is also the way to include Canadians in the 23 public policy discussion. 24 5316 THE CHAIRPERSON: Right. My only 25 point is, could one not find a program like that on
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1 Newsworld or one of the other newly licensed services? 2 5317 MR. STEIN: No. Could I just jump in 3 on this? 4 5318 I think that what Colette has tried 5 to do over the last year in terms of this is to try to 6 create an environment where people may not have watched 7 long-form or may not have been watching during the day 8 and being able to bring the scrums and other events 9 into a context so that it is there. 10 5319 It is not that it is -- I don't 11 want -- it's not that it is news items per se, it is 12 but it is not covered in a news way, it is: This is 13 what is happening today. This is long -- and even 14 these shows are still focused on long forms of 15 discussion. 16 5320 I know that when we went and talked 17 to MPs, they thought that the opportunity to sit at the 18 round table and be able to put out their views, their 19 own views, even with other members of other parties, 20 they thought that that was a very important way to 21 reach out to Canadians and involve them in a very civil 22 discussion about important issues. They thought that 23 that ability to do it -- it is not that you have 24 somebody reporting on it or that you have an interview 25 that might be rather intrusive, it was pretty much
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1 freewheeling allowing them to do it. 2 5321 I think that for those of us who are 3 public affairs addicts in this, you have to try 4 different experiments in terms of trying to see how we 5 deal with issues like immigration and, you know, health 6 care and that type of thing, and how do you stimulate 7 those kinds of discussions in an informed way. Using 8 "Prime Time Politics" and other talk, "Legal Talk", 9 those types of things, are ways we are trying to find 10 out how to do this. 11 5322 I think Colette has really shown us 12 that we can do these kinds of things in that kind of a 13 way and it is complementary to the kind of programming 14 that you get, say on Newsworld or NewsNet. 15 5323 THE CHAIRPERSON: That is what I am 16 missing, because a lot of what Colette was saying I 17 would have thought -- and I haven't done the exercise 18 to check it -- would have been part of the applications 19 of those who were seeking the kind of license that 20 Newsworld originally got. That would be the kind of 21 programming that they would have described as being 22 shown on their further long-form news service so to 23 speak, as distinct from the headline. 24 5324 So help me draw the distinction 25 between that and what you are saying here.
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1 5325 MS WATSON: I would be happy to. 2 5326 We air the entire scrum, the entire 3 press conference. Newsworld, NewsNet, not to be 4 critical of them, but just as an observation, will cut 5 away. So they will run five-six minutes of an 6 exchange, a minute and a half perhaps of an exchange, 7 which gives a different impression, gives the viewer 8 not as much opportunity to form their own opinion. 9 5327 If I can give a case in point, CPAC 10 covered the "Gavel to Gavel", the Canadian Alliance 11 Leadership Convention earlier this year. During the 12 convention there was a letter written by Joe Clark to 13 the new leader. On "The National" that evening the 14 clip with Joe Clark was seven seconds long. The clip 15 with Joe Clark on our coverage was in its entirety, 16 about 20 minutes. 17 5328 So you get the difference. You get 18 to see the entire story. We are not going to tell you 19 what to think about it, but we are just going to put it 20 out there for you to create your own opinion. That is 21 how we differ from the other channels. 22 5329 THE CHAIRPERSON: I know it was 23 inadvertent, but the Commission not too long ago went 24 through a dispute resolution process where minutes 25 became the issue and length of bits became -- and I
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1 don't think it is an experience that too many people 2 want to repeat. So any kind of criterion based on 3 whether a thing is on minutes, although there are some 4 of those in the regulations and in the guidelines, 5 going in that is something that ought -- I think it 6 would be desirable to try to avoid if we could and 7 reach our distinctions on other grounds. 8 5330 But I take your point. 9 5331 MS WATSON: Rather than assign a 10 quantity to it, the principle is we will air from 11 beginning to end that particular press conference or 12 scrum, whereas others take pieces. 13 5332 THE CHAIRPERSON: Okay. 14 5333 Mr. Stein, when you made the point 15 about competitive issues regarding the funding of the 16 service, are you saying -- if you did it on a 17 per-subscriber basis, let's say, or a per-revenue 18 basis, some uniform criterion, what is the funding 19 method that you now use to fund CPAC in terms of 20 dividing up the -- 21 5334 MR. STEIN: We have an affiliate 22 affiliation fee. 23 5335 THE CHAIRPERSON: Right. Is it on a 24 per-sub basis? 25 5336 MR. STEIN: Yes.
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1 5337 THE CHAIRPERSON: Right. So from a 2 competitive point of view there is a wash, or are you 3 saying that anybody who saves the cost of CPAC is that 4 much farther ahead? 5 5338 MR. STEIN: Distributors do negotiate 6 pretty hard in terms of what rate they actually pay. I 7 think that what we felt was it was important at this 8 juncture to establish a rate. That is also related to 9 our points about dual status. But we thought that it 10 was important to establish a rate and have it out 11 there -- 12 5339 THE CHAIRPERSON: That is the 13 wholesale rate for the service? 14 5340 MR. STEIN: Yes. 15 5341 THE CHAIRPERSON: But I guess I was 16 asking about the funding of the service from the point 17 of view of your affiliates as distinct -- am I missing 18 what you are saying? 19 5342 MR. STEIN: The way we fund it now is 20 on a rate. We basically set a per-subscriber rate and 21 then we enter an affiliate relationship on that basis. 22 5343 THE CHAIRPERSON: Right. That is the 23 same for all affiliates, is it not? 24 5344 MS WATSON: Yes. The difference 25 between our service and another service is that there
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1 is a clause in the affiliation agreement that says not 2 to pass the rate on to customers. 3 5345 THE CHAIRPERSON: Right. But it is 4 the same rate per sub for all affiliates? 5 5346 MS WATSON: There is a 1992 rate and 6 then it went up over the course of the term. 7 5347 MR. STEIN: There are different 8 rates. 9 5348 THE CHAIRPERSON: Why would that be? 10 5349 MR. STEIN: We have different rates. 11 In 1997 we increased the rate that we charged to 12 affiliates, so that affiliates that joined since 1997 13 are charged a higher rate than the six cents. 14 5350 THE CHAIRPERSON: Okay. So that is 15 an issue. 16 5351 MR. STEIN: Yes. 17 5352 THE CHAIRPERSON: Right. If you were 18 to fund it on a per-subscriber basis -- I'm trying to 19 address the competition point and I'm just suggesting 20 that except for the saving that not participating would 21 entail for somebody, on a competitive basis if it is 22 per-subscriber that is a kind of a uniformity of 23 measure. If you have 1,000 subs you pay 1,000 times 24 the rate, if you have a million subs you pay a million 25 times the rate.
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1 5353 MR. STEIN: Can I have Yves address 2 that? 3 5354 MR. BUCHAN: Mr. Chairman, can I just 4 clarify? I think I know partly where you are coming 5 from. 6 5355 On the going-forward basis with the 7 business plan it is one rate for all affiliates after 8 September 1, 2002. There is a differential and it is 9 explained in an answer to a Commission deficiency, but 10 that is part of the issue. 11 5356 THE CHAIRPERSON: Right. 12 5357 MR. BUCHAN: Then you are wondering, 13 I think, where does the competition come into it. 14 5358 I think what Mr. Stein is speaking to 15 is the issue of if that rate going forward is 16 established, the business plan is built on the 17 assumption it will be dual status with an established 18 rate, then we won't get into negotiations of that kind 19 with those distributors. 20 5359 THE CHAIRPERSON: This is for 21 carriage or for funding of the services, or in a 22 sense both? 23 5360 MR. BUCHAN: For the funding of the 24 service. The business plan was built on the assumption 25 that there would be a rate established by the
927
1 Commission and the carriage arrangements would be that 2 way and then that is how the model was built and those 3 were the assumptions. 4 5361 THE CHAIRPERSON: Right. I guess 5 whatever you set that going-forward uniform rate at 6 would be applicable to all affiliates? 7 5362 MR. BUCHAN: Correct. 8 5363 THE CHAIRPERSON: So therefore I am 9 wondering what the competitive issue is there? 10 5364 MR. STEIN: Can I ask Yves to talk 11 to that? 12 5365 MR. MAYRAND: First of all, just to 13 be absolutely clear, all affiliation agreements -- all 14 affiliation agreements are up for renewal coincidental 15 essentially with the new license term. So what this 16 public service is going to be facing is negotiations 17 with all its distributors. 18 5366 I guess the whole concept behind this 19 proposal is really signalling a clear rate structure, a 20 predictable one. It has been publicly reviewed and 21 discussed and exposed and questioned by the Commission 22 as part of a public process and that we don't end up in 23 a few months arguing on what is the appropriate rate 24 with this and that distributor and possibly ending up 25 in disputes which tie up resources, of course, of the
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1 participants and the Commission. 2 5367 To refer to your past experience, it 3 might not deal with seconds, but it would certainly 4 deal with very thorny issues. So we think that it is 5 very key to provide some signalling, clear signalling 6 from the outset that is clear to all distributors 7 concerned. 8 5368 THE CHAIRPERSON: I take that point. 9 I guess you could set -- if the Commission approved a 10 rate of seven cents instead of 10 cents let's say, 11 everything you say would still apply. You may not feel 12 that it is enough to fund the service, but -- obviously 13 not -- in terms of going forward, in terms of the 14 competitive issues among each other, those would not 15 arise. 16 5369 MR. KELLY: I take your point. If we 17 are looking at a clear signal at a reduced level from 18 the outset, then it forces -- because this is our 19 single source of revenue, it forces a very difficult 20 decision of where to cut in the program. 21 5370 THE CHAIRPERSON: I understand. I 22 understand. 23 5371 I am going to move now to the survey 24 and I was going to ask this question that the survey 25 was done by Strategic Counsel I gather and a vast
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1 majority of Canadians believe that it was important for 2 Canadians to have access to the daily proceedings of 3 the House and other public affairs programming and that 4 CPAC was found to be a valuable service. 5 5372 Now, the audience share of CPAC, do 6 you know what that is in the fall of 2001? 7 5373 MR. STEIN: Colette. 8 5374 MS WATSON: Do I have share or do I 9 have reach? I have share or reach? I have reach. 10 5375 THE CHAIRPERSON: Oh, okay. What is 11 reach? 12 5376 MS WATSON: Are you looking for a 13 specific month or are you just kind of -- 14 5377 THE CHAIRPERSON: Well, when was the 15 survey done? Is it fall BBMs? 16 5378 MS WATSON: We track through CMRI 17 Nielsen's on a monthly basis using people meters. 18 5379 THE CHAIRPERSON: Okay. Well, I 19 guess I have a share number from BBM for the fall of 20 2001 at 0.014. Is that about right? 21 5380 MS WATSON: That would be about 22 right. We don't register high on the viewership scale. 23 5381 THE CHAIRPERSON: Right. I guess it 24 is a question about ratings and surveys and marketing 25 studies overall, but I guess what do you draw from
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1 statements of an overwhelming majority saying it is a 2 valuable, important service and a 0.014 per cent share? 3 5382 What do we conclude from juxtaposing 4 those figures? 5 5383 Perhaps Mr. Kelly would like to 6 comment. 7 5384 MR. KELLY: Yes. I think that is 8 exactly the point on the survey is that in fact what is 9 deemed to be value is the existence of the survey and 10 its coverage of both the House and the wrap-around 11 programming. The survey does not suggest that 81 per 12 cent of Canadians are watching the service at any one 13 time, but the fact that the survey exists and is 14 available to them is what is deemed to be important and 15 valuable. 16 5385 THE CHAIRPERSON: But the survey is 17 available to them? 18 5386 MR. KELLY: The service is available, 19 yes. 20 5387 THE CHAIRPERSON: That the service is 21 available to them. I see. 22 5388 I gather in the survey that the 23 10 cent monthly fee, willingness to pay was what, 24 50 to 46? 25 5389 MR. KELLY: Fifty-two per cent
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1 nationally indicated that they were willing to pay the 2 10 cents and, yes, that's right, 46 per cent reported 3 that they were unwilling. 4 5390 THE CHAIRPERSON: So does this give 5 you strong confidence in the level of support behind 6 your application? 7 5391 MR. KELLY: Well, I think there are a 8 couple of things that emerge from the research. The 9 question that was posed initially was "Would you 10 support or oppose a fee of 10 cents per month for the 11 service?" and we did get 52 per cent indicating that 12 they would support that. Opposition in fact was well 13 below that at 29 per cent. 14 5392 In any circumstance where consumers 15 are being asked to pay more for a service there is 16 going to be opposition and there is some unwillingness, 17 but I think the fact that we are continuing to see, 18 even when we ask the question "Are you willing to pay 19 it?", more than one out of two consumers indicating 20 that they are, that is a relatively strong number and 21 an indication of the support for the continuation of 22 the availability of the service. 23 5393 THE CHAIRPERSON: Do you have any 24 surveys that you have conducted where you perhaps have 25 asked the same sets of questions for other, say,
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1 specialty service providers to give us some sense of 2 the fact that, say, 52 per cent willing to pay 3 represents strong support and is not followed by 4 resistance on the street as it were? Do you have any 5 kind of track record in that regard that you could 6 share with us? 7 5394 MR. KELLY: No, I don't, 8 Mr. Chairman. There is lots of data on what consumers 9 are prepared to pay, I think, for different types of 10 services, but the CPAC one I think is an exception and 11 I don't know that there is any comparable data or any 12 normative data on that that would give us a sense of 13 what is an acceptable amount to pay for any given 14 service? 15 5395 THE CHAIRPERSON: Again I haven't 16 done the exercise, but I would have thought that the 17 many, many, many applications for specialty services 18 over the past year or so would have contained the kinds 19 of surveys which showed consumer reaction and track 20 willingness to pay with take-up, and I wonder what your 21 view as an expert would be on the correlation. 22 5396 MR. KELLY: Well, yes, there has been 23 lots of survey research done on specialty services. 24 They tend to be tested on different amounts, you know 25 $1 is typically an amount that is looked at where you
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1 would see levels of support or opposition. 2 5397 But again, I think the distinction 3 here is that this is CPAC, it is a service for which 4 there has not been a fee and I would argue that the 5 willingness to pay here among one out of two Canadians 6 suggests in fact that that is quite strong. 7 5398 It is, as you pointed out, a service 8 that is not necessarily viewed, those other surveys 9 would have been testing demand for the service based on 10 likelihood of viewership. So I think there is a 11 distinction there that doesn't apply to this particular 12 question. 13 5399 THE CHAIRPERSON: Right. Is there 14 not also a distinction in that this is seen by most 15 Canadians as the House of Commons service. 16 5400 Let me ask that as a question: Did 17 you ask that question, how is the service perceived? 18 5401 MR. KELLY: Yes. We asked both: Is 19 it important to have the service available? We limited 20 that to exclusively the House and question period and 21 in fact there we got very high levels of importance. 22 We also looked at it in terms of value: Is it a 23 valuable service? Again we got about eight out of ten 24 Canadians saying: Yes, it is valuable. 25 5402 There I think what does stand out is
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1 the strength of opinion on that. You do get very 2 strong proportions indicating that it is both very 3 important and very valuable to them to have the service 4 available. 5 5403 MR. MacDONALD: Could I just add as 6 well on the survey because we may cast the numbers a 7 little differently here, is that in addition to the 8 52 per cent that support it there is 16 per cent that 9 neither do or don't. So if you look at the numbers, 10 29 per cent of the sample say they oppose a rate. So 11 to say one out of two, it is much less, really it is 12 only less than a third of the people who expressed any 13 concern about a rate. Everybody else has said either 14 they support it or they don't feel strongly about it 15 one way or the other. 16 5404 THE CHAIRPERSON: And you didn't get 17 a reaction that said "Pay for the House of Commons?" 18 and then "Isn't that our right as Canadians to get 19 that", or even less kindly than that, depending on 20 party affiliation? 21 5405 MR. KELLY: No, Mr. Chairman, we 22 didn't. That is not a specific question that we 23 looked at. 24 5406 We did look at the two issues that 25 you pointed out, willingness to -- or support for
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1 payment at the 10 cent per month amount and willingness 2 to pay, but we did not get significant opposition to 3 that 10 cent fee. We did see one out of two continuing 4 to report that they were willing to pay for that 5 service. 6 5407 THE CHAIRPERSON: Thank you. 7 5408 I think we will break at this point 8 and resume at 9:30 tomorrow morning. 9 5409 Thank you very much. 10 5410 MR. STEIN: Thank you. 11 --- Whereupon the hearing adjourned at 1735, to resume 12 on Thursday, May 9, 2002 at 0930 / L'audience 13 est ajournée à 1735 pour reprendre le jeudi 14 9 mai 2002 à 0930
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