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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Delta Bow Valley Delta Bow Valley
209 4th Avenue SE 209, 4th Avenue SE
Calgary, Alberta Calgary (Alberta)
February 13, 2007 Le 13 février 2007
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Michel Arpin Chairperson / Président
Rita Cugini Commissioner / Conseillère
Barbara Cram Commissioner / Conseillère
Stuart Langford Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secrétaire
Peter McCallum Legal Counsel /
Marie-Claude Mentor Hearing Manager /
Gérante de l'audience
HELD AT: TENUE À:
Delta Bow Valley Delta Bow Valley
209 4th Avenue SE 209, 4th Avenue SE
Calgary, Alberta Calgary (Alberta)
February 13, 2007 Le 13 février 2007
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I (Cont'd)
PRESENTATION BY / PRÉSENTATION PAR:
MVBC Holdings Limited 309 / 2327
CanWest MediaWorks Inc. 420 / 2928
INTERVENTION BY / INTERVENTION PAR:
Crossroads Television System 495 / 3363
Rogers Broadcasting Limited 499 / 3380
MVBC Holdings Limited 504 / 3404
INTERVENTION BY / INTERVENTION PAR:
Joe Media Group Inc. 545 / 3582
Fellowship of Christian Assemblies of Canada 551 / 3607
Alberta Motion Picture Industries Association 553 / 3615
CHUM Limited 562 / 3667
CIM Canada Media Services Inc. 580 / 3753
Toronto Somali Television & Radio 583 / 3768
Fresh From the Yukon Inc. 585 / 3776
James Jacuta 589 / 3813
Southern Alberta Heritage Language Association 592 / 3824
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE III (Cont'd)
INTERVENTION BY / INTERVENTION PAR:
Committee on Race Relations and 599 / 3860
Cross Cultural Understanding
Ploty.com/Interwizja.tv 615 / 3935
Canadian Polish Congress 617 / 3944
Catholic Charities, Catholic Social Services 623 / 3986
Sign of Hope
Central Alberta Women's Emergency Shelter 626 / 3995
Alberta Children's Hospital Foundation 627 / 4002
Alan Weenink 633 / 4030
Alberta Motion Picture Industries Association 638 / 4066
REPLY BY / RÉPLIQUE PAR:
CanWest MediaWorks Inc. 641 / 4081
MVBC Holdings Limited 650 / 4115
Rogers Broadcasting Limited 655 / 4138
The Miracle Channel Association 661 / 4166
Crossroads Television System 672 / 4233
Calgary, Alberta / Calgary (Alberta)
‑‑‑ Upon resuming on Tuesday, February 13, 2007
at 0830 / L'audience reprend le mardi
13 février 2007 à 0830
LISTNUM 1 \l 1 \s 23192319 THE CHAIRPERSON: Good morning, ladies and gentlemen. We will resume the hearing.
LISTNUM 1 \l 12320 Ms Secretary, would you introduce the next item?
LISTNUM 1 \l 12321 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12322 We will now proceed with items 7 and 8 on the agenda, which are applications by MVBC Holdings Limited for licences to operate a multilingual ethnic television programming undertaking in Calgary and Edmonton.
LISTNUM 1 \l 12323 The new station in Calgary would operate on channel 38 with an average effective radiated power of 21,000 watts (maximum effective radiated power of 30,000 watts/antenna height of 170 metres).
LISTNUM 1 \l 12324 The new station in Edmonton would operate on channel 45 with an average effective radiated power of 32,000 watts (maximum effective radiated power of 50,000 watts/antenna height of 121 metres).
LISTNUM 1 \l 12325 Appearing for the applicant is Mr. Bob Lee who will introduce his colleagues. You will then have 30 minutes to make your presentation.
LISTNUM 1 \l 12326 Mr. Lee.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12327 MR. LEE: Thank you, Chairperson and members of the Commission.
LISTNUM 1 \l 12328 My name is Bob Lee and I am Chair of the Board of Directors of Multivan Broadcast, operating as channel m. In addition to my role as Chair of Multivan, I am also Chairman of Prospero International Realty and UBC Property Trust.
LISTNUM 1 \l 12329 Before we start our opening remarks, I would like to introduce the members of our panel.
LISTNUM 1 \l 12330 In the front row and going from your right to left are:
LISTNUM 1 \l 12331 Larisa Sembaliuk, Chair of our Advisory Council in Edmonton;
LISTNUM 1 \l 12332 Peter Gillespie, Vice‑President of Operations at channel m;
LISTNUM 1 \l 12333 Dianne Collins, our News Director;
LISTNUM 1 \l 12334 John Michel, Vice‑President of Program Production and Promotion;
LISTNUM 1 \l 12335 Art Reitmayer, our President and CEO;
LISTNUM 1 \l 12336 Farnaz Riahi, Vice‑President of Finance at channel m;
LISTNUM 1 \l 12337 Bruce Hamlin, Vice‑President of Sales;
LISTNUM 1 \l 12338 Paul Denys, who is a member of channel m's Advisory Council in Calgary.
LISTNUM 1 \l 12339 In the second row with me, again going from your right to left:
LISTNUM 1 \l 12340 Jeff Keeble, Senior Manager of Deloitte Touche, who will be available to speak to reviews of Calgary and Edmonton TV markets and projected revenues of channel m proposed stations;
LISTNUM 1 \l 12341 Jane Ha, Associate Vice‑President of Ipsos Reid;
LISTNUM 1 \l 12342 Greg Kane, our legal counsel, and relative to this community, a member of the Board of Directors of Glenbow Museum;
LISTNUM 1 \l 12343 Janet Callaghan, partner of the firm Callaghan‑Osborne and author of the study prepared for channel m on Advertising Market Demand;
LISTNUM 1 \l 12344 Mark Burko, who is the Vice‑President of Airtime Television Sales.
LISTNUM 1 \l 12345 I am also pleased to recognize in the audience my partner and fellow Director, Doug Holtby and James Ho, in the front row on the right there.
LISTNUM 1 \l 12346 Our other partners Geoffrey Lau and Joe Segal are, unfortunately, under the weather and unable to be here.
LISTNUM 1 \l 12347 Gary Segal is representing his father Joe Segal. We are all very proud to note that Joe was recently named to the Canadian Business Hall of Fame.
LISTNUM 1 \l 12348 I will now begin the introduction of our application.
LISTNUM 1 \l 12349 Tomorrow, February the 14th, is Valentine's Day for many. However, it is a much more significant date in the channel m family because it is the anniversary of the Commission's decision in 2002 to issue us a licence to provide a new ethnic television service in Vancouver.
LISTNUM 1 \l 12350 We are extremely proud of what we have accomplished at channel m in Vancouver and building upon that success we are very excited by the opportunity of establishing new over‑the‑air television service in Edmonton and Calgary.
LISTNUM 1 \l 12351 Art Reitmayer, our President and CEO of channel m, and the exceptional group of staff and advisors he has assembled will now assist me and place before you our vision for two vibrant ethnic and multicultural television stations, each reflecting the unique ethnic makeup of Edmonton and Calgary.
LISTNUM 1 \l 12352 Art Reitmayer.
LISTNUM 1 \l 12353 MR. REITMAYER: Thanks, Bob.
LISTNUM 1 \l 12354 There are many reasons we believe there couldn't be a more appropriate time to introduce ethnic television into Edmonton and Calgary.
LISTNUM 1 \l 12355 Alberta has become Canada's new economic and ethnic powerhouse. Its evolution to become Canada's fastest‑growing province has resulted in a phenomenal influx of new immigrants which add to the already diverse ethnic landscape of Alberta. These vibrant ethnic communities, established and newly arrived alike, offer an abundance of culture waiting to be reflected.
LISTNUM 1 \l 12356 For example, Alberta is host to over 40,000 arts and cultural events per year and cities play host to spectacular community events such as Edmonton's Heritage Festival where over 58 different ethnic communities come together to showcase their cultural heritage.
LISTNUM 1 \l 12357 In preparation for this application we met many of the senior leaders of Alberta's ethnic communities. Whether it was the Ukrainian Cultural Centres and Congress, the Canadian Polish Congress, the German Canadian Club, the Sikh Federation of Northern Alberta, the Chinese Bilingual Education Association, the Austrian Society or the Pakistan Canadian Association, to name a few, the resounding message was that there is currently no local television programming to support and reflect their communities' expressions and values.
LISTNUM 1 \l 12358 Joining us today on our panel are Larisa Sembaliuk and Paul Denys, two prominent community leaders who will help us to explain this void in the Alberta landscape.
LISTNUM 1 \l 12359 Larisa.
LISTNUM 1 \l 12360 MS SEMBALIUK: Mr. Chairperson, Commissioners, I am delighted to welcome you to another beautiful winter day in Calgary and I am honoured to be asked to say a few words as an involved representative for the Ukrainian community in Edmonton.
LISTNUM 1 \l 12361 As an artist and active participant in the arts and cultural community I can tell you that Albertans are excited about the prospect for bringing multicultural broadcasting into our homes.
LISTNUM 1 \l 12362 It is particularly important to me that channel m is committed to local programming. Their proposed local programming facilities, support for the independent producers and producing programs for Edmonton's multicultural audience will facilitate interaction with the community and ensure that most locally relevant events are broadcast in a timely manner.
LISTNUM 1 \l 12363 I have listened to channel m's philosophy, I have researched their performance in Vancouver and I had an opportunity to ask them some tough questions. With the benefit of this information I have agreed to be head of the Advisory Council for Edmonton, a pledge that I do not take lightly.
LISTNUM 1 \l 12364 channel m have proven their commitment to fund and mentor local ethnic producers, to produce quality ethnic programming and to be community leaders. As such, I foresee that the ethnic communities in Edmonton and Calgary will take pride in seeing their communities reflected in similar quality programming, cultural event coverage and sponsorships.
LISTNUM 1 \l 12365 Paul.
LISTNUM 1 \l 12366 MR. DENYS: Thank you. Like Larisa, I am delighted to welcome you to Calgary.
LISTNUM 1 \l 12367 As the Manager of the Polish Canadian Cultural Centre, I have close ties to Calgary's Polish community. I too believe that the time has come to introduce multicultural television stations into Alberta.
LISTNUM 1 \l 12368 Since the time of settlement in Alberta, Calgary is the fourth most common destination for immigrants, and Edmonton is home to the fifth largest ethnic community in Canada. Statistics Canada immigration trends forecast significant expansion of Alberta's multicultural communities within the next five to 10 years, and yet surprisingly, there is no local ethnic television broadcaster operating in the province.
LISTNUM 1 \l 12369 I too have listened to channel m's philosophy and reviewed their commitments. Based on this information I have also agreed to be an Advisory Council member on their Calgary Advisory Board. Our Chair, Dr. Harjat Singh, is in India and is unable to attend, as she will explain in the video you will see in a moment.
LISTNUM 1 \l 12370 There is a definite need for multicultural television in Alberta as it will promote diversity and bring our communities together. I am confident that the ethnic communities will take pride in seeing themselves reflected in the type of quality programming that channel m will provide.
LISTNUM 1 \l 12371 Art.
LISTNUM 1 \l 12372 MR. REITMAYER: Thanks, Paul.
LISTNUM 1 \l 12373 Our application is based on three simple values: quality, by presenting the best possible product to our viewers; community, by supporting and becoming an integral part of the communities we serve; and local, by ensuring we operate within and produce programming for our ethnic viewers.
LISTNUM 1 \l 12374 These values have guided our vision for channel m's answer to the call for a television undertaking in Alberta by leading us to provide separate and distinct programming schedules to service the local needs of Edmonton's and Calgary's audiences.
LISTNUM 1 \l 12375 In each of these schedules, we offer:
LISTNUM 1 \l 12376 ‑ 86 hours or 68 percent per week of ethnic programming targeting the multilingual and multiracial communities of Edmonton and Calgary, respectively;
LISTNUM 1 \l 12377 ‑ 73 hours or 57 percent per week of programming in a third language aimed at the diverse ethnic communities of Alberta;
LISTNUM 1 \l 12378 ‑ at least 60 percent of programming overall and 50 percent during the evening hours of 6:00 p.m. to midnight will be dedicated to Canadian programming;
LISTNUM 1 \l 12379 ‑ a commitment to 100 percent ethnic in prime time between 9:00 and 11:00 p.m. seven days a week;
LISTNUM 1 \l 12380 ‑ over 60 hours per week of local ethnic programming will be produced in Alberta;
LISTNUM 1 \l 12381 ‑ a commitment to expend $4.64 million in direct benefits in Alberta for independent productions, script and concept development, and educational initiatives;
LISTNUM 1 \l 12382 ‑ a commitment to quality ethnic productions using local ethnic writers, directors and producers;
LISTNUM 1 \l 12383 ‑ the creation of approximately 100 new local television production and broadcast technology jobs for Albertans.
LISTNUM 1 \l 12384 Showcasing quality local programming on the screen is our highest priority.
LISTNUM 1 \l 12385 To do this, we will first ensure new program ideas are encouraged and developed through our commitment to spend $650,000 over our seven‑year licence term on program script and concept development. This seed capital will help create compelling first‑rate Canadian product through our local independent writers and producers for generations to come.
LISTNUM 1 \l 12386 Secondly, it is vital that our independent production community receive the support they need to get their programs on the air. We plan to support them in a very realistic way by committing no less than $3.7 million to license programming from our independent production community over the licence term.
LISTNUM 1 \l 12387 And finally, to ensure the viability of the ethnic broadcast system, it is important that we develop the next generation of broadcasters. As such, we will assist ethnic students by committing to spend at least $280,000 over the licence term in support of their educational endeavours.
LISTNUM 1 \l 12388 But this is just the beginning. We have demonstrated that we can provide compelling quality programming to our Vancouver audiences and we will now describe in more detail our exciting plans to continue this proud record through our programming in Alberta.
LISTNUM 1 \l 12389 Johnny.
LISTNUM 1 \l 12390 MR. MICHEL: channel m's outstanding programming will reflect both Edmonton's and Calgary's vibrant ethnic communities. Our passion for quality coupled with our desire to serve our local communities has resulted in a budget of over $40 million for ethnic programming in Alberta over our seven‑year term.
LISTNUM 1 \l 12391 What makes the channel m programming model different, however, is our focus and understanding of how to produce quality local community‑based ethnic programming tailored to the different communities we will serve.
LISTNUM 1 \l 12392 Working directly with the local communities in Alberta, we will produce programs directed towards a minimum of 17 distinct ethnic groups to be broadcast in 17 different languages. Of the 17 languages, 13 will be produced in Edmonton or Calgary. Combined, over 60 hours per week of channel m's ethnic programming will be produced in Alberta.
LISTNUM 1 \l 12393 Before we put forth a program schedule, we discussed our philosophy with the ethnic communities and producers in Calgary and Edmonton. These consultations were very helpful and they confirmed our view that the two communities are very different, with a different mix of ethnic groups in the two cities all having different programming needs.
LISTNUM 1 \l 12394 We realized that the best way to serve them would be to derive separate and distinct programming schedules for each market. So that is what we have proposed.
LISTNUM 1 \l 12395 Edmonton's program schedule will consist of a minimum of 8 hours a week devoted to Ukrainian language programming as Edmonton boasts an historic and extensive Ukrainian community. To address the flourishing Asian and South‑Asian population, we will produce 6 hours per week of local Cantonese and six hours per week of Hindi news.
LISTNUM 1 \l 12396 These will be locally produced newscasts out of our Edmonton studio, with Edmonton anchors, writers, reporters, editors and camera people.
LISTNUM 1 \l 12397 In addition to the news information and educational programming, channel m will produce, finance and/or license representative third‑language local programming that recognizes the many fascinating and diverse ethnic groups that are such an important part of Edmonton. These programs are in a one‑hour magazine format style and reflect each community back to its constituents.
LISTNUM 1 \l 12398 Third‑language programming produced by Edmonton producers will include programming for the Arabic, Dutch, Italian, Polish and Filipino communities.
LISTNUM 1 \l 12399 Calgary's program schedule, in contrast to Edmonton, will consist of a minimum of 8 hours a week devoted to German language programming. The Calgary program schedule will also provide a major commitment to 6 hours a week of news in each of Mandarin and Punjabi.
LISTNUM 1 \l 12400 The survey done for channel m by Ipsos Reid indicated that the most influential factors for increasing viewership in the new station would be the local news with a focus on ethnic communities in the respondent's mother tongue. Again, these will be locally produced newscasts out of our Calgary studios.
LISTNUM 1 \l 12401 In addition to the news and information and educational programming, channel m will work with Calgary talent to produce third‑language programming for the Polish, Danish, Dutch, Italian and Spanish communities.
LISTNUM 1 \l 12402 These independent producers in Edmonton and Calgary, respectively, will be responsible for producing over 10 hours a week of original third‑language television programming.
LISTNUM 1 \l 12403 In an era where there are few outlets for multicultural producers to apply their craft and where no industry funding sources are available to them, it is amazing that any multicultural shows are produced at all.
LISTNUM 1 \l 12404 channel m's model, on the other hand, ensures success because for third‑language programming to be successful it is of paramount importance that meaningful working relationships are developed with our independent producers, directors and technical personnel. In this way, channel m excels.
LISTNUM 1 \l 12405 We form synergistic relationships with our production community through such avenues as helping them set up their own production companies, supplying camera and editing equipment to them, assisting them with seminars on how to tell stories, how to shoot, how to edit, and by generally being a partner with them in their communities.
LISTNUM 1 \l 12406 The result is that the programs produced for us by our independent producers meet the highest standards possible, dispelling any myth that ethnic programming is somehow of a lower quality.
LISTNUM 1 \l 12407 One of the greatest rewards we get from speaking to our viewers in Vancouver is the pride they feel from watching programming directed to their communities that is of the same or higher quality than conventional English services. That same high standard will be brought to our stations in Edmonton and Calgary.
LISTNUM 1 \l 12408 Art.
LISTNUM 1 \l 12409 MR. REITMAYER: At the heart of our consultative process are separate local advisory committees in each of Edmonton and Calgary. Based on our experience in Vancouver, which you will see in a moment in our video, our advisory councils are professional working committees that take an active role in guiding decisions at channel m.
LISTNUM 1 \l 12410 There are eight representatives each in Edmonton and Calgary comprising members from the Ukrainian, German, Polish, South‑Asian, Chinese, Ismaili, Dutch, Scandinavian and Arabic communities. Individually and collectively they are an impressive group and our programming and overall broadcast operations will benefit enormously from their ongoing advice.
LISTNUM 1 \l 12411 From inception channel m was intent on building bridges with our ethnic audiences, celebrating our differences and fostering understanding in Vancouver's communities by actively promoting a broad range of community programming that celebrates Vancouver's diversity. We said we would be inclusive and we are. Our track record speaks for itself.
LISTNUM 1 \l 12412 Since its inception channel m has consistently produced over 56 hours of local programming per week in over 22 different languages. This represents the highest local production requirement and most aggressive language count for any broadcaster in any Canadian market.
LISTNUM 1 \l 12413 We service the needs of five of our ethnic groups with third‑language news, promote dialogue by offering call‑in interactive shows in three different languages and produce no less than 12 separate ethnic productions out of our Vancouver studios.
LISTNUM 1 \l 12414 While our licence commitment was to work with five independent producers, we currently work with 11. We also understand that being an integral member of the community means being an active champion in their community.
LISTNUM 1 \l 12415 In an area of community support, we actively participate in over 75 multicultural events each year, air public service announcements valued at over $2.5 million since our launch and serve on over 14 charity, non‑profit and community organization boards.
LISTNUM 1 \l 12416 Most importantly, we have achieved success without sacrificing quality. The industry has recognized this commitment by presenting us with international, national and regional awards from prestigious organizations such as Promax, BDA, the New York Film Festival, the Canadian and British Columbian Association of Broadcasters.
LISTNUM 1 \l 12417 All of this has been accomplished in three short years that we have been on the air but don't think that is the length of our experience. The management team at channel m has in total over 115 years experience in television broadcasting in Alberta and British Columbia, including extensive experience with startup operations.
LISTNUM 1 \l 12418 We now seek the approval to bring our brand of high quality programming commitment to local communities and western‑based leadership to Calgary and Edmonton markets.
LISTNUM 1 \l 12419 Our team is no stranger to Alberta's landscape as many of us have lived and been part of our communities in Red Deer, Vegreville, Edmonton and Calgary. Working in Alberta has given us a clear understanding and appreciation of the people, the communities and the businesses that we would like to serve.
LISTNUM 1 \l 12420 The Ipsos Reid survey of the Alberta market found that western‑based ownership of the new television undertaking in Edmonton and Calgary was extremely important, with respondents confirming that western‑based ownership was of utmost importance to them. The stations that will be most welcome in Alberta will be western‑based such as channel m.
LISTNUM 1 \l 12421 We are confident that our vision for vibrant ethnic multicultural and multiracial, multilingual over‑the‑air television services will make a difference in Alberta's rich ethnic landscape.
LISTNUM 1 \l 12422 Now we would like to share a little of our exceptional channel m brand of broadcasting with you. This short video starring some of our staff and produced entirely in‑house will introduce some of our advisors, our philosophies and the channel m vision for Alberta.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 12423 MR. LEE: When we appeared before the Commission at the 2001 public hearing, we gave you our commitment that we would meet or exceed all the promises we made to you and the citizens of Vancouver. We asked you to trust us and you did.
LISTNUM 1 \l 12424 We have not let you down with our services in Vancouver and today we once again ask for that trust so that we can provide the same exceptional service in Edmonton and Calgary.
LISTNUM 1 \l 12425 In this era of ever‑increasing consolidation and in order to meet the requirements of our Broadcasting Act, it is extremely important to maintain as many independent voices as possible in the Canadian broadcasting system.
LISTNUM 1 \l 12426 We are a strong western voice with a responsible business plan, with reasonable assumptions that we have verified. We have the passion, the commitment, the resources and the experience to ensure that a channel m service in Edmonton and Calgary will be a complete success, contributing to setting a new standard of excellence for ethnic television in Canada.
LISTNUM 1 \l 12427 Thank you for your attention. Art Reitmayer will be happy to respond to any questions you may have or direct them to the appropriate individual on our panel.
LISTNUM 1 \l 12428 THE CHAIRPERSON: Thank you, Mr. Lee. I will ask Commissioner Cugini to ask the first questions.
LISTNUM 1 \l 12429 COMMISSIONER CUGINI: Thank you, Mr. Chairman.
LISTNUM 1 \l 12430 Mr. Lee, Mr. Reitmayer and to your panel, good morning and welcome to these proceedings.
LISTNUM 1 \l 12431 Because I believe that every good idea starts with what viewers will end up seeing on the screen, my first line of question will involve programming.
LISTNUM 1 \l 12432 In your application in response to question 7.3, you say that your broadcast week will be 154 hours but your sample schedule submitted with your application shows 126. Can you confirm whether your broadcast week will be 154 or 126 hours?
LISTNUM 1 \l 12433 MR. REITMAYER: What we were looking at there, Commissioner Cugini, was basically the on‑air time period for the station versus the 6A to midnight time period. So the 6A to midnight is obviously the 126 hours and the balance of that would be the time period to where we would actually sign off.
LISTNUM 1 \l 12434 COMMISSIONER CUGINI: So all of your programming commitments are based on 126 hours?
LISTNUM 1 \l 12435 MR. REITMAYER: That is correct.
LISTNUM 1 \l 12436 COMMISSIONER CUGINI: And that, of course, includes the 68 percent of ethnic programming?
LISTNUM 1 \l 12437 MR. REITMAYER: That is correct.
LISTNUM 1 \l 12438 COMMISSIONER CUGINI: And you will accept that as a condition of licence?
LISTNUM 1 \l 12439 MR. REITMAYER: That is correct.
LISTNUM 1 \l 12440 COMMISSIONER CUGINI: It is good to get those things out of the way.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12441 COMMISSIONER CUGINI: Now in terms of U.S. programming on your schedule, is it fair to assume that the 35 hours classified as English is primarily U.S. programming?
LISTNUM 1 \l 12442 MR. REITMAYER: I think what you see on the schedule, there probably is, you know ‑‑ again, it was a presentation schedule that was put together with a significant amount of consultation with the various members of the communities in both Calgary and Edmonton and then looking at the balance of that with English, and that could go up or down but a good portion of that would be the U.S. programming that would come in to assist in cross‑subsidizing the overall programming that would be offered on channel m in Calgary and Edmonton.
LISTNUM 1 \l 12443 COMMISSIONER CUGINI: So these 35 hours are not necessarily a maximum?
LISTNUM 1 \l 12444 MR. REITMAYER: No. We would look at some range up to ‑‑ the maximum, I believe, that is allowed in the policy is somewhere around 63 in English and that would not all obviously be foreign programming because we do often offer programming that is cross‑cultural that is dealing with initiatives that arise within the community.
LISTNUM 1 \l 12445 We have numerous examples were we have done ‑‑ for example, within the Vancouver market, early on there was an opportunity for us to broadcast a Lunar New Year Parade or the Chinese New Year Parade in Chinatown downtown and initially we offered that program. When we first broadcast it, it was done in Cantonese, thinking that that was really the market that we were looking at.
LISTNUM 1 \l 12446 In subsequent years we felt the best way to actually do some cross‑cultural programming on that was to offer the parade in English and do a number of vignettes around that that brought the broader community into that event, and so that was done in English and continues to be done in English.
LISTNUM 1 \l 12447 The success of the event now has gone from where we are at ‑‑ it initially started at 18,000 people at the parade and last year there were 60,000 people at the parade that are celebrating Lunar New Year with the broader community.
LISTNUM 1 \l 12448 So that would really be a flexible number that we would need to at least have some flex and wouldn't lock down at 34.
LISTNUM 1 \l 12449 COMMISSIONER CUGINI: But you have now committed to 68 percent of ethnic programming. Let us make it easy, will you accept a condition of licence that no more than 32 percent of your programming schedule would be in English?
LISTNUM 1 \l 12450 MR. REITMAYER: Could I just take a quick moment to review that?
LISTNUM 1 \l 12451 COMMISSIONER CUGINI: Certainly.
LISTNUM 1 \l 12452 MR. REITMAYER: Can you repeat that please, Commissioner Cugini?
LISTNUM 1 \l 12453 COMMISSIONER CUGINI: In my previous question, you committed to 68 percent of your schedule being ethnic ‑‑
LISTNUM 1 \l 12454 MR. REITMAYER: Correct.
LISTNUM 1 \l 12455 COMMISSIONER CUGINI: ‑‑ leaving 32 percent of your schedule, and will you accept a condition of licence that no more than 32 percent of your programming schedule will be in English?
LISTNUM 1 \l 12456 MR. REITMAYER: In English?
LISTNUM 1 \l 12457 COMMISSIONER CUGINI: Yes.
LISTNUM 1 \l 12458 MR. REITMAYER: Well in fact though, I think the example that I just provided is that you would see some crossover between ethnic that would also be in English. So to restrict it back to 32 percent in English would be difficult because, again, within that 68 percent you would find some English ethnic programming as well.
LISTNUM 1 \l 12459 COMMISSIONER CUGINI: How much of your programming schedule will be U.S. programming?
LISTNUM 1 \l 12460 MR. REITMAYER: I believe at present you are looking at somewhere around 40 hours and we can get the exact number on that. It would not exceed what is currently allowed under the Broadcast Regulations.
LISTNUM 1 \l 12461 COMMISSIONER CUGINI: Your financial projections in terms of advertising revenue, how many hours of U.S. programming have you included in order to come up with your financial projections against advertising?
LISTNUM 1 \l 12462 MR. REITMAYER: Again ‑‑ perhaps I will ask our Vice‑President of Sales, Mr. Hamlin, and Johnny Michel to also assist on that but I believe it is mid‑forties that we have got in the schedule that we provided with our projections.
LISTNUM 1 \l 12463 Bruce, maybe you can provide some additional detail.
LISTNUM 1 \l 12464 MR. HAMLIN: The number of hours in the financial projection is 48 but it is not all U.S. that is based upon those 48 hours. I believe it is about 40 hours is actual U.S. hours and the other 8 are other language offers like the movies and things like that that we would obviously attain some ratings then as well.
LISTNUM 1 \l 12465 COMMISSIONER CUGINI: Yes, I was looking for the specific number of U.S. hours that were used to calculate your financial projections.
LISTNUM 1 \l 12466 MR. HAMLIN: I believe the number is 40.
LISTNUM 1 \l 12467 COMMISSIONER CUGINI: Forty hours, okay. Perhaps legal counsel could take this under advisement and come up with an appropriate COL before the end of the question period. Thank you.
LISTNUM 1 \l 12468 Now in terms of the 40 hours of U.S. programs, do you anticipate that the titles will be the same in both Edmonton and Calgary?
LISTNUM 1 \l 12469 MR. REITMAYER: That would be the plan, yes.
LISTNUM 1 \l 12470 COMMISSIONER CUGINI: Are they the same as they are in Vancouver?
LISTNUM 1 \l 12471 MR. REITMAYER: That would be ideal if we could arrange that. Obviously, there are synergies in acquiring U.S. programming and foreign in general. Obviously, the more capacity that you can bring to the market, the better the type of arrangement that you can negotiate. So that would be definitely something that we would look to do.
LISTNUM 1 \l 12472 Whether we could do that in all cases, because of the differences and the magnitude of our company, we are not of a scale that would really allow us to ensure that that would happen.
LISTNUM 1 \l 12473 COMMISSIONER CUGINI: But you anticipate that ‑‑ I mean clearly it would be an advantage if you were able to leverage those synergies and amortize the cost of the U.S. programming across all three markets?
LISTNUM 1 \l 12474 MR. REITMAYER: No question.
LISTNUM 1 \l 12475 COMMISSIONER CUGINI: I want to move now to the specifics of the 86 hours of ethnic programming. Of the 17 ethnic groups you propose to serve in Calgary, the primary languages are German, Mandarin, Punjabi, Ukrainian, followed by Cantonese and Hindi.
LISTNUM 1 \l 12476 According to statistics that we have from Stats Canada only 0.1 percent of the population in Calgary identified German as their home language and only 1.5 percent of the population identified German as their mother tongue, and the stats for Mandarin‑speaking are 0.2 and 0.4, respectively.
LISTNUM 1 \l 12477 So the general question is: What factors did you take into consideration in determining what languages your services would feature?
LISTNUM 1 \l 12478 MR. REITMAYER: The process that we took to arrive at our programming schedule was really a combination and it was consultations with the communities, both Calgary and Edmonton, and we had dialogue with them and looking at what languages ‑‑ it was a combination of what languages were ascending with respect to new immigrants and what communities were currently within the market and looking to see themselves reflected on the television screens and their cultures.
LISTNUM 1 \l 12479 When you look at statistics sometimes with respect to home language, I think sometimes they can be somewhat misleading. I am also going to ask Larisa to assist or at least expand on this but first I would like to give my own personal example.
LISTNUM 1 \l 12480 My parents were European immigrants and initially when I was growing up my parents spoke German in the home and that was the case for a number of years until my sisters and I started attending public school. Then the language that was in use in the home became English and I suspect that had my parents at that time filled out surveys with Stats Can they would have said that the home language at that time would have been English because that was the language that was used in the home.
LISTNUM 1 \l 12481 That doesn't mean that the German language has stopped being spoken in our home. I continue to speak and understand it. I watch the German program that we produce in Vancouver. My daughter also speaks German. My parents continue to watch the programming, as do my relatives.
LISTNUM 1 \l 12482 So when you look at that expanded base ‑‑ but yet, I suspect all of them would identify as home language in use would be English. So that statistic may not be as revealing with respect to what the community is looking to see as what is really the case.
LISTNUM 1 \l 12483 Perhaps, Larisa, I could ask you to expand on that a bit.
LISTNUM 1 \l 12484 MS SEMBALIUK: Certainly. Commissioner, my personal background is Ukrainian and I was able to bring to the Advisory Council a perspective that it doesn't often show up in statistics.
LISTNUM 1 \l 12485 There are a lot of groups in Canada that came over 120 years ago, Ukrainians, Germans, Polish, Chinese, that are referred to now often as old‑comers or integrated ethnic groups, and we have been around here for almost four or five generations but the language isn't dead.
LISTNUM 1 \l 12486 Using Ukrainian as an example, 30 years ago in Edmonton, the Ukrainian bilingual program was established and has been followed by ‑‑ seven other languages are now being hosted in the Edmonton public school system. The Ukrainian bilingual program has had over 4,000 graduates that have gone from kindergarten to grade 12, gone through the university Ukrainian program, have become active in the community using actively the Ukrainian language.
LISTNUM 1 \l 12487 When Chernobyl happened, within 48 hours Ukrainian‑speaking doctors and medical technicians from the University of Alberta were able to respond.
LISTNUM 1 \l 12488 When Ukraine became independent we didn't just have tourist agents who could speak Ukrainian, we had Ukrainians from the legal profession from the Canadian Institute of Ukrainian Studies at U of A that helped in the formation of the Ukrainian Constitution, so an active language.
LISTNUM 1 \l 12489 Grant MacEwan Community College has the Ukrainian Resource Centre that is actively translating university and college textbooks for nursing, dentistry and pharmacology to be used in Ukraine.
LISTNUM 1 \l 12490 So the language is active, it is alive, and we have got students from our bilingual program who have gone through the technology that Canada's education system has to offer, which includes learning how to use Camcorders, digital formats that 12‑year‑olds can now use in doing a Ukrainian presentation in grade seven, so that we are really excited about the opportunity to work in the broadcasting format and make our language that is alive come forward.
LISTNUM 1 \l 12491 In addition, there is a demographic that is often ignored and that is our seniors in nursing homes. We have got 80‑year‑olds, 90‑year‑olds, sons and daughters of the first pioneers, who have integrated. They use English as their first language but their most comfortable language is Ukrainian, German, Italian, and their link to the community now is the TV.
LISTNUM 1 \l 12492 Every room in a nursing home, in an old folks' home, has a television and they are delighted to have programming in a language that they are most familiar with. It gives them opportunities to see their children, their grandchildren, their great‑grandchildren come into their home at times that they are not allowed to go out.
LISTNUM 1 \l 12493 So the choice of including programming for the old‑comers, for the integrated ethnic groups, I think, is a very solid opportunity that channel m is offering.
LISTNUM 1 \l 12494 MR. REITMAYER: I believe Paul has some additional comments.
LISTNUM 1 \l 12495 MR. DENYS: The situation with the Polish community is quite similar with English becoming very predominant with youngsters. Nevertheless, parents still see it as a very important advantage to their children that they continue to speak Polish.
LISTNUM 1 \l 12496 Between Edmonton and Calgary there are three Polish language schools, one full‑time, two part‑time. I myself am a graduate of such a school and thanks to that I continue to be fluent in both Polish and English. I graduated with what is an equivalent of a Polish high school education as well.
LISTNUM 1 \l 12497 Oftentimes in my job I meet people of Polish descent who are quite saddened by the fact that their parents or perhaps the community at large wasn't able to somehow help them foster the language that they have lost forever and perhaps programming such as what is being proposed by channel m will be able to keep those people in touch with the language and we won't have to talk about the fact that a particular language is dying or dead. Thank you.
LISTNUM 1 \l 12498 COMMISSIONER CUGINI: Is there any programming in those three languages currently available in the market on either another television service or radio and even in print? Are those languages prominent in the market?
LISTNUM 1 \l 12499 MR. REITMAYER: When you look at ‑‑ there is a couple of things.
LISTNUM 1 \l 12500 First off, there is some that you do see on some of the higher‑tier services but they really are not localized programming in any way, shape or form. They really reflect communities either often from Ontario or in many cases even more distant.
LISTNUM 1 \l 12501 It really would be a situation where you have got similar to what we encountered when we came into the Vancouver market, where you had "producers." I don't really think they were producing much but what was happening is you had videos, poor dubs of videos being pushed over to a service and then being distributed in the community and it would be old movies that they may have picked up and distributed or programming from years and years and years ago that really isn't relevant to anyone.
LISTNUM 1 \l 12502 So there may have been some language product but there really wasn't anything that was locally relevant and the number of hours that would be offered is considerably less than what we would look to offer to those significant communities.
LISTNUM 1 \l 12503 And perhaps, Larisa, is there anything you wanted to add to that?
LISTNUM 1 \l 12504 MS SEMBALIUK: I just wanted to say that there are a couple of Ukrainian programs that are produced in eastern Canada and one of the most frustrating things for us in Alberta is to see a show with material that doesn't reflect what is happening in our communities, promoting a program or a concert or an interview with someone who is appearing in Montreal or Ottawa next week. It is interesting but not locally relevant.
LISTNUM 1 \l 12505 Or advertising for Buduchnist's Credit Union in Toronto, where we do have our own ethnic‑based business institutions in Edmonton that would make way more sense to have the local advertising come to us.
LISTNUM 1 \l 12506 A lot of times people just turn off the information coming from the east because it is not relevant and so we are looking forward to getting information that is pertinent to our situation.
LISTNUM 1 \l 12507 COMMISSIONER CUGINI: And there are no radio programs in those languages?
LISTNUM 1 \l 12508 MR. REITMAYER: In some cases, Edmonton more predominantly so than Calgary. There is CKER in Edmonton that was just recently acquired by Rogers that does have some programming in some of the languages that we are discussing here but our belief is, as always, these can only complement as opposed to compete for individuals and increase the opportunities.
LISTNUM 1 \l 12509 COMMISSIONER CUGINI: Thank you, that was a very thorough response.
LISTNUM 1 \l 12510 Again, of the 86 hours of ethnic programming, how many of those hours will be exclusive to each market?
LISTNUM 1 \l 12511 MR. REITMAYER: The majority actually would be exclusive. In language or in production? Because, again, in some cases what we ‑‑ you know, through consultation, again, with the communities, what we found is there is a desire to have like languages in both markets, Calgary and Edmonton, but what we have undertaken is to ensure that they reflect the local communities.
LISTNUM 1 \l 12512 So again, the communities of Edmonton and Calgary having operated ‑‑ initially when I was in Alberta I spent extensive time in Red Deer. So I was between both cities and saw the competition that exists between those markets and then spent time in Edmonton as well and they are different cities and communities.
LISTNUM 1 \l 12513 So it was our undertaking that to the degree possible we wanted to ensure that the model that we built in Vancouver that reflects local communities is what individuals will see in Calgary and Edmonton. So there is like language programming in some markets still locally produced. So again, there is a distinction there.
LISTNUM 1 \l 12514 COMMISSIONER CUGINI: Okay. Can you make that distinction a bit more clear for me? What I want to know is 86 hours of ethnic programming in both markets, does this mean that 86 hours will be exclusive to Calgary and a second 86 hours will be exclusive to Edmonton, in other words, 86 hours in each market?
LISTNUM 1 \l 12515 MR. REITMAYER: No, there is some overlap and I will ask Johnny Michel perhaps to take you through language programming.
LISTNUM 1 \l 12516 COMMISSIONER CUGINI: That would be great, thank you.
LISTNUM 1 \l 12517 MR. MICHEL: Commissioner Cugini, the local programming aspect is 30 hours that is exclusive to Edmonton and 30 hours produced in Edmonton; 30 hours that is produced in Calgary. Some of that programming that is produced in Edmonton will actually run in Calgary as well, not all of it. Some of the programs that are produced in Calgary will run in Edmonton as well, not all of it.
LISTNUM 1 \l 12518 Some of the local independent productions ‑‑ for example, we are committing to five local independent production hours in Calgary, five in Edmonton, three of which are the same language but there will be two distinctive productions.
LISTNUM 1 \l 12519 COMMISSIONER CUGINI: Sorry, is that in addition to the 30?
LISTNUM 1 \l 12520 MR. MICHEL: No, that is including.
LISTNUM 1 \l 12521 COMMISSIONER CUGINI: That is part of the 30?
LISTNUM 1 \l 12522 MR. MICHEL: That is part of the 30, yes.
LISTNUM 1 \l 12523 COMMISSIONER CUGINI: Okay.
LISTNUM 1 \l 12524 MR. MICHEL: As far as languages is concerned, we are committing to 17 languages in Calgary, 17 languages in Edmonton, 16 of which are the same languages, not necessarily the same program, with the one difference in language. One has got Arabic and one has got Spanish.
LISTNUM 1 \l 12525 COMMISSIONER CUGINI: What makes up the balance of 56 hours then, 86 minus 30?
LISTNUM 1 \l 12526 MR. MICHEL: As I mentioned, 30 hours will be local to each TV station. Some of the local stuff that would be produced in Calgary would run in Edmonton. That would be acquired Canadian as far as the two stations are concerned. Others would be foreign in third‑language programming, about 10 hours in each market. And the rest would be Canadian acquired, some of which would be from channel m.
LISTNUM 1 \l 12527 COMMISSIONER CUGINI: Do you have a number as to how many hours would come from channel m?
LISTNUM 1 \l 12528 MR. MICHEL: Yes, about 16 hours.
LISTNUM 1 \l 12529 COMMISSIONER CUGINI: About 16 hours?
LISTNUM 1 \l 12530 MR. REITMAYER: Yes.
LISTNUM 1 \l 12531 COMMISSIONER CUGINI: Is that all of your Canadian acquired or do you have other sources for acquiring Canadian ‑‑
LISTNUM 1 \l 12532 MR. MICHEL: There may be some but that pretty much is the bulk of our Canadian acquired. This is a starting point and our hope, as we have done in Vancouver, is to do as many local hours as possible.
LISTNUM 1 \l 12533 As Art mentioned in our opening comments, in Vancouver our commitment was for five hours from independent producers. We currently have 11. Next month it is going to go up to 12 and in about six months it is going to go up to 13.
LISTNUM 1 \l 12534 So that is our strategy, is to continue to develop local talent and turn all the Canadian acquired ‑‑ not all, as much as we can Canadian acquired into locally produced programming. That is our commitment, that is what we feel audiences want and this is the best way we can serve the communities.
LISTNUM 1 \l 12535 COMMISSIONER CUGINI: Thank you. The 30 hours that you will produce in both Calgary and Edmonton, what will be the genres of those 30 hours and in which languages?
LISTNUM 1 \l 12536 MR. MICHEL: The 30 hours that we are doing in Calgary, there is going to be German language programming and the German program that we are doing is going to be a live program and it is going to be a newsmagazine style program. This is going to be the same format that we started in Vancouver.
LISTNUM 1 \l 12537 In Vancouver we recently launched, in the fall, the first ever live Hindi program with phone‑ins, entertainment stars, you name it.
LISTNUM 1 \l 12538 This is our plan in terms of what we will be producing out of Calgary. This will be a live German language program. There will be some English in there as well but predominantly it will be in German. It will have a news element to it. It will have a community affairs element to it. It will have coverage of festivals and community activities. It will have an entertainment style to it or segments. So that would be produced in Calgary.
LISTNUM 1 \l 12539 We are also producing 6 hours a week of Mandarin news in Calgary and we are doing 6 hours of Punjabi news in Calgary.
LISTNUM 1 \l 12540 On the other hand, in Edmonton we are producing the same style of program as the German program but in Ukrainian and we are doing 6 hours of Cantonese news in Edmonton and 6 hours of Hindi news in Edmonton.
LISTNUM 1 \l 12541 We are also producing weekend people in the news programs in both Edmonton and Calgary. In Calgary it will be in German people in the news and in Edmonton it will be Ukrainian.
LISTNUM 1 \l 12542 We are also really excited about ‑‑ we are going to be doing 26 one‑hour to learn German and learn Ukrainian and that is the one thing that we have always gotten from feedback from the communities that we serve, is that they don't want to lose touch with their language and they want their children and grandchildren to learn the language. So we plan on developing a series that will do just that.
LISTNUM 1 \l 12543 Yes, go ahead.
LISTNUM 1 \l 12544 COMMISSIONER CUGINI: I was just going to ask will that be station‑produced?
LISTNUM 1 \l 12545 MR. MICHEL: Yes. That is part of our local commitment, yes.
LISTNUM 1 \l 12546 COMMISSIONER CUGINI: Thank you. So at least for the first license term, you think that the majority of the local programming will be in fact news and information programming?
LISTNUM 1 \l 12547 MR. MICHEL: And educational as well.
LISTNUM 1 \l 12548 COMMISSIONER CUGINI: Okay. And in both cases you will be using local talent in both markets.
LISTNUM 1 \l 12549 MR. MICHEL: Absolutely. Yes.
LISTNUM 1 \l 12550 COMMISSIONER CUGINI: Do you anticipate any synergies between the two news services between Calgary and Edmonton?
LISTNUM 1 \l 12551 MR. MICHEL: Well, I will let Mr. Reitmayer or Dianne maybe handle that specific to the news with respect to how that would work.
LISTNUM 1 \l 12552 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 12553 MR. MICHEL: Thanks.
LISTNUM 1 \l 12554 MR. REITMAYER: We would anticipate that there would be some. There are stories in any news organization when you look at it. We currently in Vancouver, even though we don't have operations in other parts of the country, we do source stories from those markets because they are of interest and relevant to Canadians living in ‑‑ whether it is Vancouver.
LISTNUM 1 \l 12555 So the same would be the case with Calgary and Edmonton but it is not our intention to have one producing news for the other. They are two distinct news services and news operations that would operate independently and make those determinations as to the stories that would go on the air independently.
LISTNUM 1 \l 12556 COMMISSIONER CUGINI: Do you anticipate any synergies with your news production in Vancouver?
LISTNUM 1 \l 12557 MR. REITMAYER: Again, to the degree that you have the ability to source stories through your local operation that are relevant to the communities in Calgary and Edmonton, yes. Other than that the operations are independent.
LISTNUM 1 \l 12558 There are some things that obviously from having operated a news operation in Vancouver for a number of years now ‑‑ and our News Director Dianne has vast experience in production of news. So a lot of the guidelines, the practices and whatnot that we developed in Vancouver, we would obviously offer those to the individuals responsible for the newsrooms in Calgary and Edmonton but that would be the extent of it.
LISTNUM 1 \l 12559 Those newsrooms are independent and they are going to make decisions and determinations on the stories that go to air that are relevant to those local communities and those will be made in the market by individuals operating in those stations.
LISTNUM 1 \l 12560 COMMISSIONER CUGINI: Would that be true as well for the national and international news segments of your newscasts?
LISTNUM 1 \l 12561 MR. REITMAYER: Yes, our segments ‑‑ and perhaps I will ask Dianne to weigh in on this one ‑‑ but we don't have the same kind of structured approach. I mean ours is really relevant to what is going on in the local community and that really drives the rundown for how our news is really delivered over the course of the day.
LISTNUM 1 \l 12562 Maybe, Dianne, I can ask you to just expand on that.
LISTNUM 1 \l 12563 MS COLLINS: Thank you, Art.
LISTNUM 1 \l 12564 Mr. Chairman, Commissioners, good morning. We in Vancouver ‑‑ again, as Mr. Reitmayer said, are very strong on the local community and one of the advantages that we have is that we have a news partnership with CTV.
LISTNUM 1 \l 12565 Now there may be a day, for example, where ‑‑ there is an organization in Vancouver called Success, so they may be doing a news conference to talk about something that is going on, an initiative that they are putting forward for the Chinese community, and there may also be a news conference at the very same time where, say, the Education Minister in the province is talking about some initiative in schools.
LISTNUM 1 \l 12566 Now both of those would be relevant and interesting to our audience but at channel m we would send our reporters out to the Success news conference because we know we can talk to them in language, we can get clips from the various newsmakers and present those on our newscast, whereas with our partnership with CTV, if we talked to them in the morning and they said, well we are going to go out and cover this news conference that Shirley Bond is doing today, we can take their video and then translate it for the various newscasts so that they are able to use those stories.
LISTNUM 1 \l 12567 So we try as often as we can to be local. Our reporters and our assignment people have tremendous contacts in the community, so they are always coming up with interesting ideas for stories.
LISTNUM 1 \l 12568 And then we also have Associated Press as well as CTV and Asian Television where we can get stories from either India or from China so that we can present those as well to our audience.
LISTNUM 1 \l 12569 COMMISSIONER CUGINI: According to your schedule, in particular in Calgary, you have selected to provide your news only in Mandarin?
LISTNUM 1 \l 12570 MS COLLINS: No, the news in Calgary will be in Mandarin and Punjabi.
LISTNUM 1 \l 12571 COMMISSIONER CUGINI: Right, okay. You are right. So let's go to your Mandarin newscast. According to Stats Canada there are more Cantonese‑speaking people in Calgary than there are Mandarin, so I am curious as to why you would provide news only in Mandarin.
LISTNUM 1 \l 12572 MR. REITMAYER: Again, that was the result of extensive community consultation and what we found ‑‑ again, when you are trying to develop schedules ‑‑ and it obviously harkens back to one of your earlier questions where you asked if what we see on the schedule today will be the case for our licence term.
LISTNUM 1 \l 12573 Sorry to go back that far but in all honesty, what we try to do ‑‑ and if you looked at our schedule when we started in Vancouver, the schedule that you see today is different. I mean it is a very dynamic process. The reason that we have an Advisory Council here with us today and the reason we have advisory councils in Vancouver is to assist us to ensure that that schedule reflects the community as we go forward and continues to reflect the community.
LISTNUM 1 \l 12574 And the other part of that is really capacity‑building. When we first originated in Vancouver there wasn't really a lot of producers around to offer other types of programming. We felt it was important to offer news programming at that time. But as you can see now, Johnny explained, we do a live daily program in Punjabi that is really talking about entertainment and everything else. It is offered in the afternoon.
LISTNUM 1 \l 12575 Could we have started the schedule with that? It would have been difficult at that point in time but we find ourselves now in the very fortunate position where we have the talent and the desire to go forward with that.
LISTNUM 1 \l 12576 And would we bring that same kind of determination to Calgary and Edmonton? Yes. And would the schedule continue to evolve and reflect the communities' needs, wants and desires? Yes.
LISTNUM 1 \l 12577 So I mean that is really where we come from and coming back to the question of whether it is Mandarin or Cantonese in Calgary, when we were having our consultations with members of the community what was indicated to us was that the significant growth in the community was in the Mandarin language.
LISTNUM 1 \l 12578 And additionally, many of the Cantonese speakers were moving towards the Mandarin language in an effort ‑‑ because of the trade issues and everything else and so there was a strong desire to see Mandarin news on the schedule. So we felt that was the appropriate place to begin with respect to a proposal.
LISTNUM 1 \l 12579 Does that mean that Cantonese would not exist on that schedule? Not at all. We would have to continue to work with our consultations as we bring the schedule to air and as we go forward.
LISTNUM 1 \l 12580 And it is the same kind of thing we encountered in Edmonton. We had extensive meetings up there and we were originally led to understand that the majority of the community up there would appreciate programming in Cantonese.
LISTNUM 1 \l 12581 And speaking even to your earlier home language question, we encountered a number of individuals up there that are Cantonese speakers and they are encouraging their children to learn Mandarin.
LISTNUM 1 \l 12582 So their question to us was why is there no Mandarin news daily in Edmonton? And we explained to them that the community there, we understood, was stronger in Cantonese and everything else. And he said, yes but they are all learning Mandarin as well and we would like to see some Mandarin. Our kids ‑‑ in our home we actually speak English and when they go to see their grandparents they can't communicate with them because they are teaching them Mandarin and their grandparents speak Cantonese.
LISTNUM 1 \l 12583 So you have got all these different dynamics at play and I think the important part of what we do is we try to make sure that we reflect that through the schedule that we offer in the communities that we operate in.
LISTNUM 1 \l 12584 COMMISSIONER CUGINI: So does that mean that although the schedule only shows Mandarin news, if licensed, by the time you get to air you may provide news in Cantonese in Calgary?
LISTNUM 1 \l 12585 MR. REITMAYER: We would have to undertake consultations and, you know, would we like to, if that is what the community is looking for, that is what we would look to offer.
LISTNUM 1 \l 12586 COMMISSIONER CUGINI: I appreciate that it is a sample schedule but I hope you can appreciate that it is the indication to us as to whether or not you understand fully the market that you want to enter and you understand the needs and wants of the communities that you are proposing to serve.
LISTNUM 1 \l 12587 MR. REITMAYER: And we do, and I hope that we have done ‑‑ and when you look at the appendix even in our original submission it demonstrates the number of individuals that we spoke with in the community and that was very early on in the process. We have assembled an entire advisory council and part of that was, again, to guide us as we were trying to put together our schedules for Calgary and Edmonton.
LISTNUM 1 \l 12588 Does that mean the process ends at that point? No, I mean that really is just the beginning. It is an indication of some of our thinking at that point in time but we continue to meet and have dialogue on that and should we be successful in securing the licences, those schedules are going to continue to evolve over the time of the licence and going forward because, again, there is capacity within the community that assists and allows us ‑‑ as Johnny indicated earlier, we started with five independent producers in Vancouver and I remember our early meetings before we even went to air. We were going, five languages, five independent producers, boy, that is going to be a bit of a tough nut.
LISTNUM 1 \l 12589 And if you look at us today, it is 11 and growing and we have got some phenomenal programming on the air because of that.
LISTNUM 1 \l 12590 COMMISSIONER CUGINI: Thank you. I want to move to your commitment of $4.36 million to independent productions over the seven‑year term of the licence.
LISTNUM 1 \l 12591 Is this an independently administered fund or is it a fund that will be administered by channel m?
LISTNUM 1 \l 12592 MR. REITMAYER: No, it is a fund that is administered by channel m.
LISTNUM 1 \l 12593 COMMISSIONER CUGINI: And what will be the criteria for determining which project will get funded?
LISTNUM 1 \l 12594 MR. REITMAYER: I will ask Johnny to expand on that a bit, but again, it is really to work with and build capacity within the ethnic communities for production of programs that are relevant to the ethnic communities.
LISTNUM 1 \l 12595 I will maybe ask Johnny to expand on how that whole working relationship is structured.
LISTNUM 1 \l 12596 MR. MICHEL: We work with our independent producers on many different levels. As Art mentioned ‑‑ I am not going to sit here and tell you it is a cakewalk to work with independent producers from various ethnic communities. It is not, it is a very difficult process. It is very difficult to find the right people, to find the right frame of mind, people that are connected to the communities that are not going to use the show as their soapbox and people that are respected by their own communities. But we have done it and we are committed to doing that here.
LISTNUM 1 \l 12597 So with respect to our licensing and our fund and how we support the independent producers, there are many different levels in terms of how we license. The criteria for the selection is certainly third‑language programming, some English‑language programming as well but the majority of it would be third language because that is what the communities want. We want that local reflection. That is very important to us. That is something that we keep hearing from the communities all the time.
LISTNUM 1 \l 12598 And again, that is why what we have done in Vancouver, we keep going, taking a lot of the Canadian acquired ‑‑ as Larisa mentioned, nobody wants to have a Ukrainian program that comes from back east and play here. What people want to do is feel connected to their own community and find out what is going on in their community.
LISTNUM 1 \l 12599 So our priority is to do third‑language programming that is local. So that would be the priority. From there we take a look at licensing other cross‑cultural programming as well. That may be in a third language or it could be in English as well.
LISTNUM 1 \l 12600 COMMISSIONER CUGINI: How many hours of programming do you anticipate will be generated through this fund?
LISTNUM 1 \l 12601 MR. MICHEL: At this point, we have the 10 hours that are going to be produced by the independent producers.
LISTNUM 1 \l 12602 COMMISSIONER CUGINI: And those 10 hours will be produced using this money exclusively?
LISTNUM 1 \l 12603 MR. MICHEL: Absolutely.
LISTNUM 1 \l 12604 COMMISSIONER CUGINI: Okay. Will the shows produced with these funds end up on your Vancouver schedule?
LISTNUM 1 \l 12605 MR. MICHEL: If the programs work in Vancouver and audiences are looking for that kind of content, then absolutely.
LISTNUM 1 \l 12606 COMMISSIONER CUGINI: Thank you. Of the $4.36 million you also allocate $280,000 for the funding of educational initiatives directed at ethnic students resident of Calgary and Edmonton.
LISTNUM 1 \l 12607 Have you identified educational institutions in these markets that provide such educational initiatives?
LISTNUM 1 \l 12608 MR. REITMAYER: We have had preliminary discussions with organizations such as NAIT and SAIT. We haven't spoken with them about the magnitude of the dollars. Again, we felt it was very preliminary but we have set up a similar type funding situation in Vancouver and we have got scholarships and a number of different types of relationships where we actually work with students.
LISTNUM 1 \l 12609 So they would receive a scholarship whether it is looking to work in the technical side of broadcasting or the journalistic and then we also encourage them that once they complete the program to actually come and spend a practicum period with the station so they can actually experience firsthand the situation that they are looking to get into and then if there is something with us, we work on that and if not, then we encourage them and work with them to try and find employment somewhere else.
LISTNUM 1 \l 12610 So I mean it is a cross and very involved working process that we have but we do offer scholarships and we have had some preliminary discussions in the market only.
LISTNUM 1 \l 12611 COMMISSIONER CUGINI: In each of Calgary and Edmonton?
LISTNUM 1 \l 12612 MR. REITMAYER: Yes.
LISTNUM 1 \l 12613 COMMISSIONER CUGINI: Do you anticipate that you will be involved in some way in selecting the students who will receive these scholarships?
LISTNUM 1 \l 12614 MR. REITMAYER: We haven't typically. We have been there to recognize them when they are handed the scholarship and given the cheque. I mean we are always there to happily do that. It is a great time.
LISTNUM 1 \l 12615 But we haven't typically. What we have set up, and really we believe that the educational institutions are the best at determining those students that are the ones that should be receiving those types of rewards.
LISTNUM 1 \l 12616 COMMISSIONER CUGINI: Eighty‑six hours of ethnic; 73 hours, you say in your application, will be in a third language, which of course leaves 13 hours. So what is the nature of these 13 hours and in what languages will they be broadcast?
LISTNUM 1 \l 12617 MR. REITMAYER: Again, I will ask Johnny to give you the details but there is a crossover within that because again, within ethnic you could have English language as well and that would be some of the programming that is on our schedule.
LISTNUM 1 \l 12618 But perhaps, Johnny, I can get you to explain some of the different programs that are there.
LISTNUM 1 \l 12619 MR. MICHEL: What we put in our schedule right now is just some English‑language ethnic programming that is currently produced out of Vancouver. We continuously produce programming in Vancouver and the plan is to be doing the same in both Edmonton and Calgary and utilize our facilities to their fullest capabilities.
LISTNUM 1 \l 12620 The shows that we have on our schedule right now that are English language that make up the 13 hours that you were talking about, we do a cooking show. We have done almost 360 half‑hours. These cooking shows are ethnic cooking shows. In each and every episode we celebrate a different culture and we have cooks that come ‑‑ and these are not chefs even though we do have a chef's edition.
LISTNUM 1 \l 12621 We did one that was all grandmas and mothers that came on. People come on and bring costumes and they bring the flag and they bring all kinds of things from their own country and they talk about their stories from their homeland. We think this is wonderful cross‑cultural programming.
LISTNUM 1 \l 12622 We also did a series on Tai Chi and Yoga. But throughout the year ‑‑ and those would be the kind of opportunities that we would look for once we are operating in the market, as we have done in Vancouver. I will give you an example just to illustrate what I am talking about.
LISTNUM 1 \l 12623 When we go home this weekend we will be producing the Fourth Annual Chinese New Year Parade that happens in Chinatown. Now this is the fourth year that we will be doing this and we do it in English. It is going to be hosted by actually my Programming Manager, she is Chinese, and it is going to be hosted by a South‑Asian host that we have at the station called Turanum (phon.). So a Punjabi and a Chinese are going to be co‑hosting and the roving reporter is going to be Spanish and we bring it in English.
LISTNUM 1 \l 12624 We get tremendous response from the community and when you watch the show you get perspective, you get relevance, you get context and understanding about the lunar new year, you understand why they give the red packets to each other, why they have new clothes, what are the traditions, what is the lunar calendar, why is this year the Year of the Pig as opposed to Year of the Dog, and that is the kind of programming that we produce.
LISTNUM 1 \l 12625 We air that ‑‑ we are going to be producing that during the day and then we turn that around and cut a one‑hour special that runs at 7:00 in prime time on Sunday.
LISTNUM 1 \l 12626 Two hours later we are going to be premiering a show that we helped support from a script concept and ultimately we went to licensing it, called "I am the Canadian Delegate." It is the story of the first Chinese Canadian MLA, Douglas Jung, who passed away in 2003.
LISTNUM 1 \l 12627 A fascinating story about how he was born in Canada but never had the rights of a Canadian until after he went and fought in World War II. After that he became a lawyer and actually became the first Canadian Chinese representative at the United Nations. When he showed up at the United Nations to take his seat the usher told him, sorry, sir, this is reserved for the Canadian delegate, and Douglas Jung said, I am the Canadian delegate.
LISTNUM 1 \l 12628 So this is the story that we are going to be running on Sunday. So that is the kind of programs that we do produce and that is the kind of programs that we want to produce here as well. That is what we have done in Vancouver. There are many other examples that we have done. I can go on and on about the programs that we have produced.
LISTNUM 1 \l 12629 What you see in the schedule here right now is just what we have produced in Vancouver but we want to leave a lot of room so that we can develop programs here that tell Canadian stories, immigrant stories from both Edmonton and Calgary with local independent producers.
LISTNUM 1 \l 12630 COMMISSIONER CUGINI: Well it is too bad or too good for you, I don't know, that this isn't the Year of the Rat because according to Chinese astrology that is what I am.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12631 COMMISSIONER CUGINI: So is it fair to say ‑‑
LISTNUM 1 \l 12632 COMMISSIONER LANGFORD: And we sort of agree with that around the Commission.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12633 COMMISSIONER CUGINI: I set myself up. Yeah.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12634 COMMISSIONER CUGINI: So all kidding aside, is it fair to say then that those 13 hours for the most part are English primarily focused on your cross‑cultural, cross‑generational philosophy in terms of programming?
LISTNUM 1 \l 12635 MR. REITMAYER: That is what is in our current schedule. I do want to come back to the cross‑cultural, by the way. I don't think cross‑cultural only exists at the language level of English.
LISTNUM 1 \l 12636 One of the things that we have had that is quite exciting for Vancouver that we have seen is as more and more of our independent producers have come on line and started working with us, we have them all coming together at regular points throughout the year to try and work with them. We offer seminars and whatnot, again, because of the whole capacity‑building initiative that we believe is important in the market.
LISTNUM 1 \l 12637 Just one example is our Romanian producer who now is out at all manner of events and reporting on things going on in the South‑Asian community in Romanian language to the Romanian community. That also is cross‑cultural and I think it is an important aspect of the kind of the service that we offer.
LISTNUM 1 \l 12638 MR. MICHEL: If I may just add an anecdotal story.
LISTNUM 1 \l 12639 COMMISSIONER CUGINI: Please.
LISTNUM 1 \l 12640 MR. MICHEL: The producer that Art is talking about, when the Dalai Lama was in Vancouver, she was front and centre with her media pass and did an interview with him and ran it on the program as well.
LISTNUM 1 \l 12641 COMMISSIONER CUGINI: In terms of primetime on your schedule you show that you plan on scheduling ethnic programming from 9:00 p.m. to 11:00 p.m. What are the advantages of scheduling ethnic programming at this time as opposed to the 8:00 to 10:00 p.m. slot, for example?
LISTNUM 1 \l 12642 MR. REITMAYER: It is a combination. Quite honestly, when you look at it, we feel that the 9:00 to 11:00 p.m. with the types of programming that are in there, you are going to see the Ukrainian and German communities with lifestyle combination programming in the 9:00 time block, and then at 10:00 you will see primarily news programming depending on the market you are in, whether it is in Mandarin, Punjabi, Cantonese and Hindi, which is not an inappropriate time.
LISTNUM 1 \l 12643 The other side of that is that within the Alberta community, recognizing the type of model that this is with respect to cross‑subsidization with other English programming, you do have Spokane that comes in at a different time period and it does tilt the opportunities that are available. Under where we looked at from a revenue perspective, our opportunities with respect to repatriation and whatnot were definitely enhanced by moving to a 9:00 to 11:00 time period in this market.
LISTNUM 1 \l 12644 COMMISSIONER CUGINI: We will get to the repatriation question a little bit later on but will you accept as a condition of licence that from 9:00 to 11:00 p.m. you will be 100 percent ethnic?
LISTNUM 1 \l 12645 MR. REITMAYER: Yes, we will.
LISTNUM 1 \l 12646 COMMISSIONER CUGINI: Okay. I am going to move on a little bit to the area of HD programming. On page 19 of your application you talk about:
"...building a facility that will be a fully digital SDI plant and that the amount of HD equipment included in the facility will be determined largely by the availability at the time of the building."
LISTNUM 1 \l 12647 And that is quoted directly from your application.
LISTNUM 1 \l 12648 What is the issue with accessing HD equipment? Is it not true that for the most part HD equipment is what is being sold by the major manufacturers?
LISTNUM 1 \l 12649 MR. REITMAYER: I may actually ask ‑‑ I will begin the answer but I will also ask Peter Gillespie maybe to come in on that one. He has been to a number of hearings with me and hasn't had a chance to speak and I know he is just itching to get on here.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12650 COMMISSIONER CUGINI: You are sure about that?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12651 MR. REITMAYER: I am pretty sure.
LISTNUM 1 \l 12652 When you look at the whole migration to HD, I mean our current facility is digital and SDI, and when you look at HD equipment there is no question that as the market continues to evolve the pricing on a cross‑section of the equipment is decreasing as we go forward.
LISTNUM 1 \l 12653 So obviously, we would look at the most opportune time to try and invest in that kind of equipment to ensure that we are getting good quality equipment but not at a point where we can't afford it with respect to our overall business model.
LISTNUM 1 \l 12654 And Peter, maybe you would like to speak to some of the plans there.
LISTNUM 1 \l 12655 MR. GILLESPIE: Sure, thank you.
LISTNUM 1 \l 12656 Commissioner, what Art said is exactly true. As we built the plant in Vancouver, it is built on an HD backbone and for the most part it is HD‑capable.
LISTNUM 1 \l 12657 What we mean by equipment being available is there are still a very few areas that it is not cost‑effective. Either it is not cost‑effective or the equipment simply is not there yet to be cost‑effective to buy HD.
LISTNUM 1 \l 12658 An example of that at this immediate point in time is news cameras where you would have to buy such an expensive camera for news that it wouldn't be worth buying an HD model. That by the time we get on air may change. Of course, technology moves at a very rapid pace. Prices are coming down and technology is being developed.
LISTNUM 1 \l 12659 So certainly it would be folly of us not to buy HD in all the areas that we can buy HD if it is available and it does make sense cost‑wise at the time to do that.
LISTNUM 1 \l 12660 COMMISSIONER CUGINI: So in making the statement "determined largely by the availability at the time of the building" has more to do with cost than it does with the actual equipment being available?
LISTNUM 1 \l 12661 MR. GILLESPIE: Well, yes ‑‑ both, yes.
LISTNUM 1 \l 12662 COMMISSIONER CUGINI: Okay. Will any of the programs on either station be in high definition or in wide screen?
LISTNUM 1 \l 12663 MR. REITMAYER: Wide screen is certainly something that is far easier to access in the initial stages but quite honestly, it would be our desire to move to high definition as quickly as possible. So that really would be something that we would obviously endeavour to do but obviously the 16X9 wide screen is something that would be in the plans automatically.
LISTNUM 1 \l 12664 COMMISSIONER CUGINI: Automatically, being year one?
LISTNUM 1 \l 12665 MR. REITMAYER: Year one, you would have to ‑‑ going at this point, acquiring gear that isn't 16X9 at a minimum wouldn't be wise.
LISTNUM 1 \l 12666 COMMISSIONER CUGINI: You, like the other applicants in these proceedings, have applied for an analog channel for both Calgary and Edmonton. I know you followed the TV review proceedings and you know that a considerable amount of time was spent during those proceedings in talking about digital transmission and the consequences of the U.S. shutting down analog in 2009.
LISTNUM 1 \l 12667 Do you have a digital transition plan in place for Calgary and Edmonton?
LISTNUM 1 \l 12668 MR. REITMAYER: Our facility ‑‑ and Peter may actually get a second one here. This is good.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12669 MR. REITMAYER: Our facility will be digital from the outset. Yes, we are aware and the discussion that occurred at TV policy, I think, is important and obviously we look forward to seeing the results that come forward from that with respect to how that transition will roll out.
LISTNUM 1 \l 12670 In Vancouver, the transmitter that we purchased, actually it is a board switch and that transmitter switches from analog to digital. Those are the same kinds of plans and thinking that we would deploy in Alberta depending on the type of decision that comes from the Commission with respect to analog to digital transition and what the time frame the Commission actually sees.
LISTNUM 1 \l 12671 Peter, is there anything you want to add on that?
LISTNUM 1 \l 12672 MR. GILLESPIE: Sure, just a quick one. We made sure also that when we applied for the NPSC frequency that the associated DTV paired channel was also available and clear of interference. So we have done all the technical analysis on the DTV migration.
LISTNUM 1 \l 12673 COMMISSIONER CUGINI: And is digital transition reflected in your financial projections as filed?
LISTNUM 1 \l 12674 MR. REITMAYER: At present the capital that would be required for an additional transmitter is not but again, we are looking at somewhere in the neighbourhood, depending ‑‑ prices continue to decrease on that. Our last look at Vancouver was somewhere in the $250,000 range for a transmitter if we had to replicate so that we are running coincident equipment on both analog and digital.
LISTNUM 1 \l 12675 COMMISSIONER CUGINI: And that 250K is not currently in the financial projections ‑‑
LISTNUM 1 \l 12676 MR. REITMAYER: That is correct because again, the time period was indeterminate at that time. We know that it is coming very quickly. It was just a question of what is coming, the awareness of TV policy and everything else with respect to ‑‑ and we knew that was a significant item that was up for discussion at the time of filing. So we didn't reflect it. But again, it is not a consequential number to that degree.
LISTNUM 1 \l 12677 COMMISSIONER CUGINI: Okay. Now that we are talking about the TV policy it calls to mind another question I was meaning to ask you. I don't know if you were in the room yesterday ‑‑ you are smiling, you know what I am going to ask you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12678 COMMISSIONER CUGINI: I don't know if you were in the room yesterday when Rogers responded to the question in relation to your joint submission at the TV review wherein you asked us to consider relaxing the restriction on scheduling of ethnic programming in primetime. I want to give you an opportunity to comment.
LISTNUM 1 \l 12679 MR. REITMAYER: Yes, I was in the room. That was a fun presentation actually.
LISTNUM 1 \l 12680 When you look at what happened at policy, and I think Alain articulated it quite well in that it was really to highlight issues that were across the board for all broadcasters and when you look at the genre that we broadcast in, the time restrictions with respect to a hard lock on that time period is a restriction that doesn't exist for many other broadcasters.
LISTNUM 1 \l 12681 That doesn't mean that we have plans that it would automatically go away in the event that we had that discussion at a future licence renewal hearing that says we would still like to see some relief.
LISTNUM 1 \l 12682 We have no plans at this point in time but sometimes the frustration that we find in programming a service such as ours is often the creativity that you can put into a programming schedule is eliminated because it really becomes a math matrix. There are so many different things that we are required to measure up to and perform on because of conditions of licence that the actual ability to respond to the community and actually have a creative schedule that is compelling to the local community is taken away from us.
LISTNUM 1 \l 12683 So I think really the intention at policy was to try and initiate that discussion that hopefully will be more fulsome down the road at licence renewal hearings.
LISTNUM 1 \l 12684 COMMISSIONER CUGINI: Thank you. I just wanted to give you the opportunity to get your response on the record.
LISTNUM 1 \l 12685 I want to spend a little bit of time talking about your advisory council. Thank you for bringing members of both here with you.
LISTNUM 1 \l 12686 Just generally speaking, what is the role of this council going to be?
LISTNUM 1 \l 12687 MR. REITMAYER: I can speak very definitively about what happens in Vancouver. The advisory council there is comprised of members of a cross‑section of the community. They meet three to four times a year and that is at their determination. There is a separate chair. You saw Dr. Saida Rasul on the screen. She has been our chair pretty much since inception of channel m in Vancouver.
LISTNUM 1 \l 12688 They receive reports from the station with respect to our community initiatives, our programming initiatives, every six weeks. So we have to say that the contact face‑to‑face is three to four times a year. There is continuous contact, you know, technology nowadays. Dr. Rasul is with her husband working in Pakistan, in Karachi.
LISTNUM 1 \l 12689 So oftentimes we are communicating by email with the entire advisory council but we are updating them on our plans and the initiatives that are under way in the community, the program changes that we are contemplating. We have feedback from the council and the input from the advisory council is taken very seriously. We have initiated a number of changes in our programming because of advice that came back from that council.
LISTNUM 1 \l 12690 We see that same kind of structure and situation in Calgary and Edmonton and that is why in our estimation we had to have advisory councils and we tried to establish them early on so they could feed into this process for us as well. But they guide us in the program decisions that we make, the community initiatives that we undertake, all very important aspects of the type of station that we operate.
LISTNUM 1 \l 12691 COMMISSIONER CUGINI: What is your criteria for the selection of the members?
LISTNUM 1 \l 12692 MR. REITMAYER: It is a combination, quite honestly. We look to the advisory to also determine who is on the advisory. It is not something where we just select those members.
LISTNUM 1 \l 12693 They look at ‑‑ they are aware of what the requirements of the service are and then there is a determination to invite additional members onto the advisory to ensure that we are properly representing the communities that are in the market and that they are properly representing back to us what is happening in the market.
LISTNUM 1 \l 12694 So it really is not just us appointing individuals. It mostly operates to some degree as a separate board and they actually select members. We will put forward names that have expressed an interest and then the advisory actually determines the new members that would go on.
LISTNUM 1 \l 12695 In the case of Calgary and Edmonton we spoke with a number of individuals and invited them on but that really was for an establishment phase and then it really becomes ‑‑ the dynamic becomes that separate advisory council board, if you like.
LISTNUM 1 \l 12696 COMMISSIONER CUGINI: Thank you. Okay. So we spent part of the morning talking about how you are going to spend your money. So now we are going to move on to how you are going to make your money.
LISTNUM 1 \l 12697 In your financial projections you anticipate that 52 percent of your advertising revenues will come from existing off‑air stations and you say that includes the repatriation of advertising expenditures currently targeted to the four U.S. border stations.
LISTNUM 1 \l 12698 To your knowledge, do you know whether or not the Spokane, Washington stations have sales representatives in Edmonton and Calgary?
LISTNUM 1 \l 12699 MR. HAMLIN: The belief is that there is definitely representation in Canada for those stations. As a matter of fact, Mr. Burko, who is our National Representative with Airtime Television Sales, previously did represent, if not one, a number of services in Toronto.
LISTNUM 1 \l 12700 COMMISSIONER CUGINI: In Toronto?
LISTNUM 1 \l 12701 MR. HAMLIN: That is correct.
LISTNUM 1 \l 12702 COMMISSIONER CUGINI: Do you have any idea as to what the amount of both local and/or national advertising is currently lost to these stations?
LISTNUM 1 \l 12703 MR. HAMLIN: The estimates that we have got through Mr. Burko is that there is a range. We don't have a definitive hard number but the estimates are somewhere around 3‑5 percent of each of the Calgary and Edmonton markets can migrate to these four services out of Spokane.
LISTNUM 1 \l 12704 COMMISSIONER CUGINI: Okay. How much of the 52 percent of revenue that you anticipate coming from existing off‑air, how much of that 52 percent do you anticipate will come from repatriating advertising revenues from the Spokane stations?
LISTNUM 1 \l 12705 MR. HAMLIN: Our calculations are somewhere in the area of about $1.8 million per market would come to Calgary and Edmonton. It would represent about 25 percent, give or take, depending on the exact revenue calculation, but about 25 percent of our revenue.
LISTNUM 1 \l 12706 COMMISSIONER CUGINI: Of your total revenue ‑‑
LISTNUM 1 \l 12707 MR. HAMLIN: Yes, that is correct.
LISTNUM 1 \l 12708 COMMISSIONER CUGINI: ‑‑ not just of the 52 percent?
LISTNUM 1 \l 12709 MR. HAMLIN: That is right.
LISTNUM 1 \l 12710 COMMISSIONER CUGINI: Okay, thank you. Excuse us for just a second.
LISTNUM 1 \l 12711 COMMISSIONER CRAM: I was taking notes. What percentage was it of the total of your revenues, the $1.8 million?
LISTNUM 1 \l 12712 MR. HAMLIN: Approximately 25.
LISTNUM 1 \l 12713 COMMISSIONER CRAM: Thank you. Sorry.
LISTNUM 1 \l 12714 COMMISSIONER LANGFORD: You know, Barb, we have transcripts here.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12715 COMMISSIONER CUGINI: Since when do we interrupt each other?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12716 COMMISSIONER CUGINI: We warned you we were in a good mood when we started.
LISTNUM 1 \l 12717 You project that $6.76 million will come from English‑language programming aired in Calgary and $5.94 million in Edmonton and you did confirm that these projections are based on 40 hours of U.S. programming on your schedule.
LISTNUM 1 \l 12718 The $6.76 million to come from English‑language programming, is that the 40 hours of U.S.?
LISTNUM 1 \l 12719 MR. HAMLIN: To be honest, the number of hours that I am calculating in the financial projections are closer to about 47‑48 but they are not all U.S. programs.
LISTNUM 1 \l 12720 COMMISSIONER CUGINI: In the English‑language programming component?
LISTNUM 1 \l 12721 MR. HAMLIN: Yes. There are some programs that have subtitling, in particular movies, that are revenue opportunities and they have been for us at channel m in Vancouver. So those are in that calculation as well.
LISTNUM 1 \l 12722 COMMISSIONER CUGINI: So you anticipate that if you have language movies with English subtitles or English movies with language subtitles?
LISTNUM 1 \l 12723 MR. HAMLIN: Language movies with English subtitles.
LISTNUM 1 \l 12724 COMMISSIONER CUGINI: Will generate the same level of revenue as your U.S. programming and that is why they are included?
LISTNUM 1 \l 12725 MR. HAMLIN: They won't necessarily generate the same revenue. It depends on whether those English programs are running in primetime or in fringe time.
LISTNUM 1 \l 12726 COMMISSIONER CUGINI: Sure.
LISTNUM 1 \l 12727 MR. HAMLIN: But they generate some rating points in the market which then that is what the community will buy.
LISTNUM 1 \l 12728 COMMISSIONER CUGINI: Okay. In terms of revenues from third‑language programming, which language groups do you expect to play a significant role in generating that revenue?
LISTNUM 1 \l 12729 MR. HAMLIN: The main language communities that we see that will be the easiest to develop in the first stages are going to be the Cantonese, Mandarin, Hindi and Punjabi because those are already established communities in many other markets, especially Toronto and Vancouver, and we think that the opportunity from both a local/regional perspective as well as a national perspective will be easier because the bulk of creative that has been developed for those communities can migrate into those communities a lot easier. So we see that as being a larger percentage of the ethnic sales.
LISTNUM 1 \l 12730 COMMISSIONER CUGINI: Okay. In your detailed financial projections I notice that you don't provide us with any revenue figures for 6:00 a.m. to 1:00 p.m. In fact, your day part starts at 1:00 p.m. with no revenue allocated to 6:00 a.m. to 1:00 p.m.
LISTNUM 1 \l 12731 MR. HAMLIN: Yes, there will be some revenue there. We haven't calculated it in because we don't see it as being a significant part of the revenue stream there but obviously there are a number of hours on our schedule that aren't represented on there as well and those are principally our third‑language opportunities, some of our third‑language opportunities.
LISTNUM 1 \l 12732 COMMISSIONER CUGINI: And those would be?
LISTNUM 1 \l 12733 MR. HAMLIN: From the program schedule in the morning ‑‑ Johnny, could you give us a hand on the programs in the morning?
LISTNUM 1 \l 12734 MR. MICHEL: Sure. I guess you would be talking about some of the third‑language programming that we would have. Tai Chi and Yoga, that would be certainly ‑‑ sorry, in the English language. But some of the Spanish, Vietnamese, Swedish, those types of programs.
LISTNUM 1 \l 12735 COMMISSIONER CUGINI: So you anticipate that while they will play a role in your schedule they will not play a role in significantly generating advertising revenues for you?
LISTNUM 1 \l 12736 MR. HAMLIN: That is correct.
LISTNUM 1 \l 12737 COMMISSIONER CUGINI: Okay. On page 28 of the Deloitte Touche report it says that:
"Multivan's established sales force, distribution network and valuable relationships with western Canada's advertisers could be leveraged, allowing for synergies and selling airtime on the proposed TV stations."
LISTNUM 1 \l 12738 What are the synergies that you anticipate in the selling of airtime?
LISTNUM 1 \l 12739 MR. HAMLIN: Well in particular over the last three and a half years the relationships that we have built with the agency community as well as the significant advertising community about the opportunity to reach out and be more inclusive in their advertising strategy has been developed by the station both nationally and locally.
LISTNUM 1 \l 12740 So we see this as a very positive approach to the overall advertising community as a way that we have gained a lot of knowledge, we have done a lot of research, we have been able to quantify and qualify the opportunity about them building their business because at the end of the day that is what advertising really is all about. It is about why is the Ukrainian or the German or the Polish or the whatever community significant to them.
LISTNUM 1 \l 12741 We have been able to demonstrate that through our Ipsos Reid research, through our target analysis, our target market analysis of what communities are representative around a certain trade area and this has been very significant in allowing them to have more credibility and more accountability in putting and in placing money into these types of directions because at the end of the day if they don't have measurability and they don't have the confidence that these actual audiences are watching our programming, then there is really no transaction that is going to take place there.
LISTNUM 1 \l 12742 COMMISSIONER CUGINI: Will you have a sales force and traffic department in each of the three markets?
LISTNUM 1 \l 12743 MR. HAMLIN: The plan is to have two distinct sales forces in both Edmonton and Calgary.
LISTNUM 1 \l 12744 COMMISSIONER CUGINI: Right.
LISTNUM 1 \l 12745 MR. HAMLIN: The traffic department, I believe, would be centralized out of Vancouver.
LISTNUM 1 \l 12746 COMMISSIONER CUGINI: Okay. One of the things that struck me in that quote was, of course, relationships with western Canada's advertisers. Are these primarily local? Were they referring primarily to local advertisers?
LISTNUM 1 \l 12747 MR. HAMLIN: Well, not necessarily just the local advertisers. I spend a great deal of time in both Toronto and Montreal as well as in Vancouver because of the concentration of where advertising dollars actually come out of.
LISTNUM 1 \l 12748 Edmonton, for instance, The Brick's home office, I go up to Edmonton and talk to the advertising people at The Brick about their decision‑making process. So it really varies as to where those head offices are and where those decision‑makers are that are educating that strategy.
LISTNUM 1 \l 12749 COMMISSIONER CUGINI: I also ask this because the Callaghan‑Osborne report says that it interviewed "key decision‑makers, marketers, agency management, media planners or media buyers" and that 26 percent of those interviewees are based in Manitoba, Alberta and B.C., and 74 percent are based in Montreal, Ontario and Toronto.
LISTNUM 1 \l 12750 So I am just trying to get a handle on who are these western Canadian advertisers and what are the advantages that therefore you bring in having this relationship with these advertisers in light of who the Callaghan‑Osborne report interviewed in order to gather data for that.
LISTNUM 1 \l 12751 MR. HAMLIN: Okay. What I believe Janet Callaghan was getting at was that there is obviously a concentration of media buyers in the Toronto/Montreal region but there are also agencies and advertisers that don't reside in Toronto and Montreal and are obviously in either Winnipeg, Calgary, Edmonton, Vancouver and other areas. But there is obviously an imbalance in that.
LISTNUM 1 \l 12752 You can see that with the numbers there is a concentration towards Toronto. It doesn't mean that there isn't in Vancouver. There is a significant agency community in Vancouver as well as Calgary as well as in Edmonton, as well as a local advertising community here as well.
LISTNUM 1 \l 12753 COMMISSIONER CUGINI: Okay, thank you. As you know, one intervenor, namely, CanWest stated that:
"Applicants have grossly understated their impact on both the Calgary and Edmonton markets in their application." (As read)
LISTNUM 1 \l 12754 I did say "applicants," not just you.
"CHUM in its intervention anticipates that the majority of the impact will be borne by the CHUM station since it isn't likely that ethnic stations such as the one proposed by MVBC would go after the top 20 U.S. shows such as those on Global and CTV."
LISTNUM 1 \l 12755 Would you care to comment?
LISTNUM 1 \l 12756 MR. REITMAYER: Yes, I think oftentimes it is interesting when you see the size and scope of these organizations intervening that there is going to be significant impact.
LISTNUM 1 \l 12757 We truly believe ‑‑ I think Bruce has articulated quite well the level of revenue that we will be able to repatriate. When you break down the revenues that will be derived from the local stations in the market, you are talking in the order of ‑‑ if it is shared evenly, and it may be skewed slightly one way or the other but there are always opportunities to suggest that it is only top 20. Top 20 for CanWest or CTV exists in the primetime block U.S. scheduling that they are acquiring, so there are also daytime opportunities.
LISTNUM 1 \l 12758 If you look at the nature of our schedule it actually has got fringe properties as well. So when you look at it and the impact on those types of organizations, if you look at it in pure dollar terms it is somewhere around $400,000 to $500,000 per station. I would like to think that that is not going to take down Global or CTV in the near future.
LISTNUM 1 \l 12759 COMMISSIONER CUGINI: Thank you. Rogers in its intervention has said that:
"MVBC has failed to discount cost per rating point assumptions by between 30 and 40 percent, consistent with what Rogers feels is appropriate for ethnic TV stations and that this has resulted in a significant overestimate of projected revenues." (As read)
LISTNUM 1 \l 12760 MR. REITMAYER: I realize this isn't intervention or reply phase but since it was raised in that fashion I would note back that it is interesting that in Rogers' submission, under assumptions for revenue one would think that a key assumption would be that discount factor that is in place and it is not mentioned or noted anywhere in their application. It is only raised at the time that you can actually see that the revenues are significantly understated for their application.
LISTNUM 1 \l 12761 We did extensive research and when you look at even the Vancouver application it was never mentioned there in the competitive hearing when we went through that with Rogers as well, nor did we experience that.
LISTNUM 1 \l 12762 In Vancouver we sell at the market rate. We are not the high ‑‑ we are not the market leader, I would not suggest that, but we do sell at market rate. We are not looking to take down the market and we did extensive research in Calgary and Edmonton to ensure that the rate that we went forward with was the rate that was reflected in the market.
LISTNUM 1 \l 12763 We have documentation that supports our rate and I think, in fact, the Commission has that type of documentation already on file, in fact, with one of the applicants.
LISTNUM 1 \l 12764 When you look at the cost per rating point that was advanced by CanWest in its application to bring CH into Calgary and Edmonton, the rate is in fact higher than our net rate in our proposal.
LISTNUM 1 \l 12765 So I would suggest that in some cases that kind of submission may be just a lot of mischief and in fact that they may be understating what in fact ‑‑ and I think CanWest has suggested that ‑‑ in fact understating the revenues that they will achieve and succeed in achieving in this market.
LISTNUM 1 \l 12766 COMMISSIONER CUGINI: So it has not been your experience that in Vancouver you discounted your CPRs by 30 or 40 percent or anything even less than 30 percent?
LISTNUM 1 \l 12767 MR. REITMAYER: No, it hasn't.
LISTNUM 1 \l 12768 COMMISSIONER CUGINI: Okay. In the Rogers intervention they also state that you have not taken into account a 15 percent reduction of projected revenues, consistent with agency commissions.
LISTNUM 1 \l 12769 MR. REITMAYER: I think if you look at ‑‑ in sometimes assembling an application it is often a process where you are dealing with so many different documents, I will agree that on the top caption there it says gross and it should say net but the number and the extension and the calculation that is there and the rate that is used is in fact the correct rate, and in fact, again, it is lower than the rate in net dollar terms that is in the submission that CanWest has on record at this proceeding.
LISTNUM 1 \l 12770 So if you look at that error ‑‑ and I am happy to point out errors in everyone else's application with respect to typos as well but if you look at it, the only error that only exists there is in the captioning, not in the quantum.
LISTNUM 1 \l 12771 The dollars that we have submitted with our application, we stand by those. We feel strongly about those.
LISTNUM 1 \l 12772 I worked in this market a number of years ago, in fact, scary, 10 years ago, and the rates that we achieved at that time ‑‑ and we were selling Red Deer at that time because there was a different kind of situation in the market but we were able to sell into Calgary and Edmonton at that time. The rates we achieved at that time ‑‑ we are talking 10 years ago ‑‑ are close to what Rogers has submitted in their application today. I suggest that those rates have increased.
LISTNUM 1 \l 12773 COMMISSIONER CUGINI: Thank you very much. I will move on very quickly to the issue of channel allocation.
LISTNUM 1 \l 12774 You have proposed the use of channel 38 in Calgary, channel 45 in Edmonton. In light of the fact that other channels have been identified by other applicants in this proceeding, would you consider using alternative channels?
LISTNUM 1 \l 12775 MR. REITMAYER: It looks like Peter gets lucky No. 3.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12776 MR. REITMAYER: We have done extensive investigation to determine the available channels in both markets and we have determined that those really are the best.
LISTNUM 1 \l 12777 And perhaps, Peter, I can get you to expand on that.
LISTNUM 1 \l 12778 MR. GILLESPIE: Thank you, Art.
LISTNUM 1 \l 12779 I can give you the long story or the short story.
LISTNUM 1 \l 12780 COMMISSIONER CUGINI: It is your first time, you choose.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12781 MR. GILLESPIE: I will start with the short one and if you want more information, please ask.
LISTNUM 1 \l 12782 We worked with a technical consultant and we believe that over‑the‑air NTSC analog frequencies are in scarce demand in these two markets. So we believe that there are no other NTSC frequencies we could go for that would be made available to us.
LISTNUM 1 \l 12783 COMMISSIONER CUGINI: Well that is pretty clear, thank you.
LISTNUM 1 \l 12784 Shaw in its intervention has stated that any new licensee must waive its right under the BDU Regulations to distribution on the basic band on a non‑restricted channel and I wanted to give you the opportunity to comment on that intervention.
LISTNUM 1 \l 12785 MR. REITMAYER: All these fun topics. Again, I look at it ‑‑ it is interesting. I haven't seen that the Broadcast Distribution Regulations have been withdrawn, so it is interesting that they would request that we withdraw our entitlement to priority carriage and basic band.
LISTNUM 1 \l 12786 I think when you look at what local broadcasters offer, and I think that was really ‑‑ when you look at why these Regulations were put in place, the premise on which that was formed was that local broadcasters need to be situated in a channel where viewers can easily access them.
LISTNUM 1 \l 12787 There is a significant service that we provide to the community and there is a significant investment that we make into the community and to suggest that it would be overly disruptive to somehow move a U.S. service to a different level, I would suggest is, again, a lot of mischief.
LISTNUM 1 \l 12788 I have experienced in Vancouver ‑‑ I am not sure why they would suggest that putting any localized Canadian service would be overly disruptive when just recently they went through an entire channel realignment so that they could bring one of the Corus services onto basic band from digital and removed CNBC.
LISTNUM 1 \l 12789 So it is an interesting issue when they raise it in that light that for us to be granted that kind of carriage and entitlement is disruptive but a service that they partially own isn't disruptive.
LISTNUM 1 \l 12790 I think we would be happy to dialogue on it. I would suggest that if it is framed in the fashion that it be an equal negotiation ‑‑ I would suggest that it isn't, we are in no way equal. I mean it is far more the whale and the minnow and I would suggest that we are the minnow in that case.
LISTNUM 1 \l 12791 So we would request that the entitlement to priority carriage be there but we would be open to discussing it and exploring with them what their thoughts are on that matter. But it certainly wouldn't be in anyone's best interest, neither ours, nor the communities, for us to find ourselves placed on channel 300.
LISTNUM 1 \l 12792 COMMISSIONER CUGINI: Thank you. Last line of questioning.
LISTNUM 1 \l 12793 Again, if you were in the room yesterday you are probably anticipating this. Is it fair to assume that you built your business plan on the assumption that you would be the only one licensed in each market?
LISTNUM 1 \l 12794 MR. REITMAYER: Yes, and that said, there are obviously different impacts from different applicants to this hearing and you can go through them all. I mean when you look at it, I think a service such as ours relies on certain amounts of foreign programming to support the overall model.
LISTNUM 1 \l 12795 I think, as you have heard from us and other applicants previous, the ethnic advertising market is an evolving one. We have worked very hard to ensure that it continues to develop and evolve. We undertake proprietary research every year to ensure that advertisers can feel comfortable because that has been a comment, that there isn't sufficient research, and the measurement organizations certainly aren't undertaking that of their own volition.
LISTNUM 1 \l 12796 So when you look at that as your primary source for funding your operation and making it whole and being able to provide the services, on the other hand, that you are looking to provide, any applicant that is here that is looking to basically receive funding from that same stream is going to have an impact on our business plan.
LISTNUM 1 \l 12797 One could suggest that The Miracle Channel would be least impactful but again you have to look down the road, that applying for a digital service today is applying for the service where we will all be down the road. And then it really is the determinant of what will that service look like once it is there, will it modify to become something that also runs U.S. syndicated programs? We don't know but that would definitely be the least impactful of the applicants at this hearing.
LISTNUM 1 \l 12798 COMMISSIONER CUGINI: And in your opinion, is each market robust enough to sustain the licensing of one of the religious services, one of the ethnic services and grant CanWest their request?
LISTNUM 1 \l 12799 MR. REITMAYER: I can probably make that a fairly short answer, I would suggest not.
LISTNUM 1 \l 12800 COMMISSIONER CUGINI: If we in our wisdom ‑‑ we love to use that phrase too ‑‑ decided that either market, we shouldn't license anything in one of the markets but license Calgary only, for example ‑‑ this is a severability question ‑‑ which of the two would you prefer? In other words, would you prefer the Calgary market or would you prefer the Edmonton market?
LISTNUM 1 \l 12801 MR. REITMAYER: Is there a third door?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12802 THE CHAIRPERSON: Red Deer.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12803 MR. REITMAYER: I was going to say if I can go to Red Deer and start from there again, who knows?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12804 MR. REITMAYER: I think our preference ‑‑ in the application that we filed we hope that from your review you have got an appreciation for the amount of work and care that we have put into this. We have undertaken the research and provided the support for what we look to offer in the markets of Calgary and Edmonton.
LISTNUM 1 \l 12805 If it was determined that only one market was to receive the service, I would feel sorry for the market that doesn't. Our consultations indicated that both markets have strong communities that are looking to have our type of service brought in.
LISTNUM 1 \l 12806 We met with the economic development offices. So it wasn't just the ethnic communities but the economic development offices in both markets and if you go to our supplementary brief, they are both quoted there. For those organizations to say, yes, we encourage you, please come into our communities, we think it is important, so do we.
LISTNUM 1 \l 12807 We believe it is important that both markets receive that service and it would be difficult to suggest that the application that we have is just take any one and that would be a model that would fit. We would have to go back and revisit the business plans that were submitted with this application.
LISTNUM 1 \l 12808 So we hope that in the Commission's wisdom that they will see that it is really best to license for both markets and that both markets really deserve a service such as channel m.
LISTNUM 1 \l 12809 COMMISSIONER CUGINI: Well, Mr. Reitmayer and to your panel, thank you very much.
LISTNUM 1 \l 12810 Mr. Chairman, thank you, those are my questions.
LISTNUM 1 \l 12811 THE CHAIRPERSON: Thank you, Commissioner Cugini.
LISTNUM 1 \l 12812 Commissioner Cram will ask you some questions.
LISTNUM 1 \l 12813 COMMISSIONER CRAM: Thank you, Mr. Chairman.
LISTNUM 1 \l 12814 I would like to probe a little further on this revenue issue and the discount. You say, Mr. Reitmayer, that you don't discount in Vancouver. Would it be fair to say though that if you had it to do over again you would have discounted for the first year of operation?
LISTNUM 1 \l 12815 MR. REITMAYER: That is an interesting question. I am hoping we do have it to do over again in Calgary and Edmonton.
LISTNUM 1 \l 12816 No. I think when you go into a market ‑‑ and when we went into Vancouver, I mean there is a period of time that you have to look at and go it is much more difficult to move an advertiser that has come to your service up after they have invested in your service in the second year than to sit there and ensure that you are supporting the market rate in year one.
LISTNUM 1 \l 12817 We did that in year one in Vancouver. I have no regrets. We would look to do that and that is reflected in our business plan for Calgary and Edmonton as well.
LISTNUM 1 \l 12818 Increases to take a rate down by 50 and 60 percent and then assume that the advertiser next year is going to move up, I haven't experienced that in my years in broadcasting and they are getting significant at this point.
LISTNUM 1 \l 12819 COMMISSIONER CRAM: Well I am looking at your confidential data in terms of your gross income and I am going to suggest to you that that is your experience. Based on the year ending 2004‑2005 there was a substantial increase in your gross income.
LISTNUM 1 \l 12820 So then I go to the letter that is attached to Rogers ‑‑ and if you look at your results you will find that. I go to the letter that Rogers attached from MBS to their reply to CanWest intervention, the last paragraph. Ms Shelton with MBS says at the last paragraph:
"The stations will be entering the market with no track record and unproven ratings. There will a lack of high‑profile programming." (As read)
LISTNUM 1 \l 12821 Wouldn't you accept that as a rationale for initially there being lower gross income? Because what you are doing in year one and two in your projections is you are looking at an increase of a million gross income and that is not what happened with channel m. So would it not be fair to say there should be a discount, at least in the first year?
LISTNUM 1 \l 12822 MR. REITMAYER: I don't know which point you wish me to speak to first. I can speak to the Vancouver situation if you like ‑‑
LISTNUM 1 \l 12823 COMMISSIONER CRAM: Sure.
LISTNUM 1 \l 12824 MR. REITMAYER: ‑‑ because the Vancouver market when we were licensed was predicated on certain situations and we have been before the Commission on this issue a number of times. When you look at it, there is an additional service operating in that market and it has only changed recently again when Omni acquired a religious service.
LISTNUM 1 \l 12825 A religious service is expected to affect the market in a certain fashion and that is negligible. So when you look at what is happening out there you now have a "religious" service that really is offering an extensive line‑up of U.S. syndicated programming that has affected the market.
LISTNUM 1 \l 12826 So to suggest that that is a reason that we should discount, I would disagree. We reflect in our business plan in Calgary and Edmonton growth from year one to year two that is significant and that reflects the fact that there will be an uptake because the sellout factors and the success of the station with viewers and everything else will improve a station.
LISTNUM 1 \l 12827 To suggest that there is no proven track record ‑‑ there is an impact to a station that has no track record in the market and that is why it does grow.
LISTNUM 1 \l 12828 The other factor though is every year stations have programming that has no track record. That is a standard operating procedure for television. We come into a market ‑‑ and in our case actually it is even less so because we tend to buy syndicated programming that most advertisers are quite comfortable with.
LISTNUM 1 \l 12829 So when you go forward and say ‑‑ I think yesterday you spoke that "Law and Order," I believe, was one of your favourite programs. Well going back to Helena back at MBS and suggesting that she doesn't know what "Law and Order" is, she does and she will buy that program because she does know what it is and typically what it can do.
LISTNUM 1 \l 12830 But that said, again, to suggest that everything has to have a proven track record would suggest that every new program that is ever introduced into the market would sell for nothing and it doesn't. What you try and do is put estimates against it and you sell to those estimates and then you sell based on the cost per rating point in that market.
LISTNUM 1 \l 12831 That is the business we are in. Sometimes it is a little bit of this and a little bit of that but that is how it works and that is the experience we have had in Vancouver and we believe that we are correct. And again, we do have documentation. I am not going to suggest that MBS purchases airtime at the top of the market but there are a number of buyers that make a market and MBS is but one.
LISTNUM 1 \l 12832 COMMISSIONER CRAM: So what is different about the Vancouver market? You say it is because there is, I am going to call it a near‑ethnic station in the market, but that doesn't explain why your gross revenues from your first full year of operation to your second full year of operation went up about 33 percent.
LISTNUM 1 \l 12833 How can you distinguish that situation, an increase in revenues between year one and two, with the market in Calgary or Edmonton when you have not done that, you have started off high?
LISTNUM 1 \l 12834 MR. REITMAYER: No, we started off ‑‑ you see, the fact in Vancouver when you look at that growth and the revenue ‑‑ and I just want to come back, it is not a near‑ethnic service, it is a U.S. syndicated service, that other service we are talking about.
LISTNUM 1 \l 12835 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 12836 MR. REITMAYER: So I want to be very clear on that.
LISTNUM 1 \l 12837 The revenue growth in Vancouver ‑‑ I mean there are a couple of things that come into play. In Vancouver we had that growth because, again, there was an anticipated ‑‑ when you look at it, we held the rate.
LISTNUM 1 \l 12838 It was important for us that we not go in and discount the rate, to sit there and basically come back to the agencies next year and try to move them up, because the interesting thing that would have really answered the second part of the question is to ask Ms Shelton from MBS, what would happen if I sold to you this year at $102 and came at you next year and said I want $180 a point, I would suggest that she would laugh and not buy.
LISTNUM 1 \l 12839 So when you look at it, in Vancouver we accepted the fact that we may have sellout factors that vary from what were planned to maintain that rate and move forward. We were a new company operating in the market and we were also sitting there with no track record for establishing, first off, whether we could acquire the programming, whether or not ethnic broadcasting was anything that would really work in the markets.
LISTNUM 1 \l 12840 There was no proprietary research. I mean many of the discussions that we had early on with the advertising community, that was one of the frustrations that they told us. That is why we have committed to doing research every single year that supports the business model that we have.
LISTNUM 1 \l 12841 So when you come to that, coming into Calgary and Edmonton, we are a different company. We have got a proven track record. We have been in existence and operated for four years. So there is a difference between operating here and when we started up in Vancouver.
LISTNUM 1 \l 12842 COMMISSIONER CRAM: Okay, I get your distinction. I have got that now, that you have established your track record and so you have got your reputation already.
LISTNUM 1 \l 12843 Okay, what about ‑‑ and maybe you should ‑‑ if you have got that with you I would like to address her third paragraph in her letter. Have you got the interventions with you?
LISTNUM 1 \l 12844 MR. REITMAYER: I'm sorry, the letter from?
LISTNUM 1 \l 12845 COMMISSIONER CRAM: This again, Ms Shelton.
LISTNUM 1 \l 12846 MR. REITMAYER: That wasn't submitted to us, so I am sorry, I don't have a copy of that.
LISTNUM 1 \l 12847 COMMISSIONER CRAM: It is in the reply to interventions.
LISTNUM 1 \l 12848 MR. REITMAYER: The reply submitted by Rogers?
LISTNUM 1 \l 12849 COMMISSIONER CRAM: Yes, to CanWest though.
LISTNUM 1 \l 12850 MR. REITMAYER: Yes. I didn't receive a copy of that, sorry.
LISTNUM 1 \l 12851 COMMISSIONER CRAM: Okay. Well then I will ask you to look at that paragraph. The paragraph starts:
"We also reviewed Deloitte and Touche's report." (As read)
LISTNUM 1 \l 12852 I would like you to provide us with your reply to that, I would ask, in Phase II.
LISTNUM 1 \l 12853 MR. REITMAYER: Certainly.
LISTNUM 1 \l 12854 COMMISSIONER CRAM: Because it is on the public record.
LISTNUM 1 \l 12855 MR. REITMAYER: I am more than happy to do that.
LISTNUM 1 \l 12856 COMMISSIONER CRAM: Yes. Mm‑hmm. Now your projections, were they also predicated upon DTH coverage ‑‑ carriage?
LISTNUM 1 \l 12857 MR. REITMAYER: No. We have been somewhat frustrated in Vancouver with our inability to secure appropriate DTH carriage. So while we would hope that would be the case for our services in Calgary and Edmonton because when you look at comparable services ‑‑ and it was something, again, that we spoke of at the policy hearing ‑‑ we felt it would have been difficult to anticipate that into our revenue projections for this market.
LISTNUM 1 \l 12858 COMMISSIONER CRAM: Mm‑hmm. And the markets are different, Vancouver, and Calgary and Edmonton, notably in the absence of, as you call it, a U.S. syndicated programming entity and so thus you are, in fact, more optimistic about Edmonton and Calgary; is that fair to say?
LISTNUM 1 \l 12859 MR. REITMAYER: I am not sure I understand the point on U.S. syndicated. There is a U.S. service that comes in. It comes in on a time‑shifted basis and I think, in fact, when we were in the discussion earlier we reflected that in our business model. So I think that that is part of what we have anticipated.
LISTNUM 1 \l 12860 There are U.S. services that come in and there are opportunities for simulcast and we have anticipated that, and the whole issue of 9:00 to 11:00 was part of our foundational planning.
LISTNUM 1 \l 12861 COMMISSIONER CRAM: Okay. I couldn't find it in the application but in our factum it says that your 6 hours in Cantonese in Edmonton and your 6 hours in Mandarin in Calgary will be in a cross‑generational format.
LISTNUM 1 \l 12862 Is it right that that is what you are saying and what does it mean?
LISTNUM 1 \l 12863 MR. REITMAYER: I am going to ask Johnny to also speak to this one.
LISTNUM 1 \l 12864 I think it was really just that we are looking to address programming as we have found in Vancouver ‑‑ we have heard the stories reflected back to us a number of times where our Punjabi news, the entire family sits down to view the programming. So we look at that as another opportunity for families to come together. Language is a reason to celebrate and come together and we found that. The Punjabi community has expressed that to us a number of times, as have the Cantonese and Mandarin communities.
LISTNUM 1 \l 12865 I just go to the Punjabi because we do our news in Vancouver in Punjabi and it is interesting to note that we have enormous, 80+, share because of that and it really is a coming together for the family because of that factor. So that was really, I believe, what we were trying to get at with that.
LISTNUM 1 \l 12866 Johnny, is there anything?
LISTNUM 1 \l 12867 MR. MICHEL: Mr. Reitmayer, once again, so eloquently described it that he really leaves me nothing to add.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12868 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 12869 Ms Sembaliuk, you were talking about immersion in Edmonton with the Edmonton schools being in seven different languages. What languages are they?
LISTNUM 1 \l 12870 MS SEMBALIUK: I will just refer to my notes.
LISTNUM 1 \l 12871 MS SEMBALIUK: Currently there are seven different languages in addition to French that are being offered from kindergarten to grade 12. They include Ukrainian, which was the first, followed by German, Mandarin, Hebrew, Spanish, Arabic and Cree.
LISTNUM 1 \l 12872 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 12873 Thank you, Mr. Chair. Thank you, panel.
LISTNUM 1 \l 12874 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 12875 I have one last question for you, Mr. Reitmayer.
LISTNUM 1 \l 12876 When we discussed visible broadcast, I think ‑‑ did you say that you are planning your ‑‑ where will your master control be located? Will you have a centralized unit, say, in Vancouver and do the on‑air for Calgary and Edmonton from Vancouver or will you have an on‑air master control in each of the locations?
LISTNUM 1 \l 12877 MR. REITMAYER: It is interesting when you start looking at what is evolving in technology, our planning was that it would be a centralized master control emanating from Vancouver. We did build the station with the capacity and the intention that hopefully at some point in the future we would add additional services but when you look at technology as it is evolving, it may be a different kind of model, again. But our intention would be to use a centralized master control, yes.
LISTNUM 1 \l 12878 THE CHAIRPERSON: Our legal counsel has a few questions for you.
LISTNUM 1 \l 12879 MR. McCALLUM: That is right, just very briefly.
LISTNUM 1 \l 12880 Earlier, Commissioner Cugini, I think, was attempting to design a condition of licence around the 40 hours of non‑Canadian English‑language programming that you used in your projections.
LISTNUM 1 \l 12881 So if the Commission were inclined to impose such a condition of licence, that a maximum of 40 hours per week of non‑Canadian English‑language programming be in your schedule, would you have a problem with such a condition?
LISTNUM 1 \l 12882 MR. REITMAYER: I think that would not reflect the opportunities that are actually there for a service such as ours because if the intention of that is to look at U.S. syndicated programming, I would certainly hope the condition wouldn't be put in place to protect other broadcasters from us. I am not certain that they really need that protection, in all honesty.
LISTNUM 1 \l 12883 The other reason is that when you look at foreign programming, because the classification within the Regs is not U.S., it is foreign, and we do offer a number of foreign movies, dramas and whatnot to the community, and those also come out of that count. So when you look at our schedule as it currently is proposed for Calgary and Edmonton, it does include those kinds of opportunities.
LISTNUM 1 \l 12884 So when you start taking back from all of that, it would make it a very difficult model to operate if the condition was imposed at something different than the 40 percent overall foreign that is contemplated under the Regs.
LISTNUM 1 \l 12885 MR. McCALLUM: Well if I asked the question and used 50 hours, would the answer be the same?
LISTNUM 1 \l 12886 MR. REITMAYER: I believe 50 hours is close to the 40 percent, so we would accept that condition.
LISTNUM 1 \l 12887 MR. McCALLUM: Thank you.
LISTNUM 1 \l 12888 Secondly, in its written intervention Fairchild suggested there be a maximum of Chinese‑language programming and impose a condition of licence and it proposed 7.1 percent maximum of Chinese‑language programming. Could that be imposed as a condition if the Commission were so inclined?
LISTNUM 1 \l 12889 MR. REITMAYER: I could be glib and say I guess the Commission could but I prefer they not.
LISTNUM 1 \l 12890 When you look at conditions, again, I look at the licensing that has happened within the past year and you have seen a number of foreign services and foreign‑language services come in and specifically you have seen the licensing of, I think, in excess of, just recently, nine services from China, and by limiting a Canadian service that is trying to reflect back its community in language and saying that we impose caps on those services, while at the same time encouraging the entry of services that don't reflect any of those local communities, one would have to question what the intention would be.
LISTNUM 1 \l 12891 I understand that Fairchild would look to seek protection but I certainly don't think they need protection from us. They have a higher opportunity to program foreign language than we do. We have a very high local Canadian content commitment. We also have a very high level of service and commitment to multiple languages. We cannot become a competitive threat in one single language to Fairchild.
LISTNUM 1 \l 12892 All of that said, I think if there is a determination on the part of the Commission to impose a condition on channel m that it should be something that reflects overall the types of conditions that have been put in place on other services.
LISTNUM 1 \l 12893 Seven percent would seem extremely low and based on a proposed schedule that you see currently would allow no flexibility to respond to the community. I think part of what we have discussed here today is the fact that our service is responsive and it is reflective and it is local and we need to have at least some flexibility as programmers and television service providers to respond to those communities.
LISTNUM 1 \l 12894 So I would look at something ‑‑ if you are determined to go there, I would hope that it is something that reflects what was done back in the Ontario market. You are looking at, I think, 15 percent by language, not language groupings because language groupings can be very difficult to limit in that fashion as well because surprisingly sometimes there are a lot of languages that get caught up in that one grouping. But if 15 percent is the starting point, I think that is a reasonable approach.
LISTNUM 1 \l 12895 MR. McCALLUM: That would be 15 percent for Chinese or 15 percent separately for Cantonese and Mandarin?
LISTNUM 1 \l 12896 MR. REITMAYER: The conditions that were imposed in Ontario were Cantonese ‑‑ by language, Cantonese, Mandarin, as opposed to by language groups, because again, language groups ‑‑ I mean Cantonese and Mandarin are distinct and we have heard that expressed a number of times in the Vancouver market and we actually applied to the Commission to try and have some relief on the 20 hours that is there because we are unable to respond to the desires of members of our community, and still, we are far below any kind of threat that would be in place for Fairchild, who has the opportunity, interestingly enough, as a specialty service to do local programming and local advertising.
LISTNUM 1 \l 12897 So when you look at it, at some point we need to support services that are operating locally and providing the kind of service that we do, that is multicultural. We are not single‑language specific. So I would hope that in the Commission's wisdom they would see that language caps on our service are really not required. We are not the threat. We haven't proven to be. We have enhanced the market. We do research. We do a lot of good things and hopefully that will be encouraged.
LISTNUM 1 \l 12898 MR. McCALLUM: Thank you.
LISTNUM 1 \l 12899 Thank you, Mr. Chair.
LISTNUM 1 \l 12900 THE CHAIRPERSON: Thank you, Mr. McCallum.
LISTNUM 1 \l 12901 Now, Mr. Reitmayer, Mr. Lee or anyone of your team, you have two minutes to tell us why the Commission should grant you the licences you have applied for.
LISTNUM 1 \l 12902 MR. REITMAYER: Thank you, Mr. Chair.
LISTNUM 1 \l 12903 I am going to take the liberty of closing and I hope that I can keep myself to two minutes. If not, please don't shut me off.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 12904 MR. REITMAYER: When I think about the channel m applications that we have presented here for Calgary and Edmonton, I think of four words and they mean a lot more than those four words but they come to mind.
LISTNUM 1 \l 12905 And it is commitment, commitment on the part of our partnership group. We are committed to growing this television service that we started in Vancouver and our partners have indicated to you that they are committed to the investment that is required and committed to staying with broadcasting.
LISTNUM 1 \l 12906 There were many that when Vancouver was licensed questioned our commitment to the type of landscape and broadcasting that we were entering and we have proven ourselves. We have been there on the air now coming up on four years, operating for five. Commitment at the level of the partnership.
LISTNUM 1 \l 12907 Commitment on the part of our staff. Our staff every day come in and work very enthusiastically. You saw the video there. This is just a small part of what we do every day at channel m to ensure that we are offering the highest‑quality programming and production that reflects our local communities.
LISTNUM 1 \l 12908 When we were coming here to do our presentation to the Commission, we almost felt like we were the team that was going out to win the big game. We had our staff coming up to us all and congratulating us and wishing us the best of success when we were in Alberta and that is a kind of special place and that is commitment to the kind of service that we provide.
LISTNUM 1 \l 12909 Passion. We are passionate. I hope you have gotten that from listening to us today. We definitely can get enthusiastic about the business of broadcasting and the business of ethnic broadcasting and multicultural broadcasting and that is reflected from our partnership group right through the entire organization. And we are also committed to community and that is reflected from our partnership group right through the entire organization.
LISTNUM 1 \l 12910 The other word is experience. We have heard experience thrown out a number of times and it was flashed on the screen even yesterday and to suggest that experience is 25 years of one type of experience, you could suggest that is really just one experience 25 times over.
LISTNUM 1 \l 12911 Our group has had experience. We have all worked in broadcast operations in different parts of the country and for different kinds of companies, in radio, in specialty, in conventional broadcasting for dominant news organizations and maybe for wannabe news organizations but we have had a vast amount of experience.
LISTNUM 1 \l 12912 We mentioned that there are 115 years of experience and I think that is just the limited number of people here at this table. If you go through our organization in Vancouver it is even higher.
LISTNUM 1 \l 12913 We also have experience living lives of individuals and children of individuals that came to Canada and that is also an important experience and you don't just get that being in broadcasting, you get that living and walking around every day.
LISTNUM 1 \l 12914 The other word is trust. Four or five years ago when the ownership group for channel m appeared before you they asked for trust. You invested in that. You gave them the licence for Vancouver and they have lived up to that. The promises and commitments that were made have been exceeded in every, every single way. We work with more languages, we work with more independent producers, we provide more local programming than was committed.
LISTNUM 1 \l 12915 We have a facility in Vancouver that is state‑of‑the‑art. We have had broadcasters from other services in Canada come to our facility to see how we put that facility together.
LISTNUM 1 \l 12916 You invested. You trusted. We ask again for that trust. We are a passionate and committed group of broadcasters and we believe that we can do the right job for Calgary and Edmonton.
LISTNUM 1 \l 12917 Thank you for your time, we appreciate it.
LISTNUM 1 \l 12918 THE CHAIRPERSON: Thank you, Mr. Reitmayer. Thank you, Mr. Lee. Thank you to all the members of your panel.
LISTNUM 1 \l 12919 We will take a 15‑minute break. We will be back at five past 11:00 for the last item.
‑‑‑ Upon recessing at 1050 / Suspension à 1050
‑‑‑ Upon resuming at 1110 / Reprise à 1110
LISTNUM 1 \l 12920 THE CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.
LISTNUM 1 \l 12921 Mrs. Secretary, could you introduce the next item. Thank you.
LISTNUM 1 \l 12922 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 12923 For the record, The Miracle Channel has filed seven‑year projections for their Calgary and Edmonton applications as well as a clarification on their program schedule, Appendix 5A to their application. These documents are available for review in the examination room.
LISTNUM 1 \l 12924 We will now proceed with items 9 and 10 on the agenda, which are applications by CanWest MediaWorks Inc. to amend the licence of the television programming undertaking CHCA‑TV, Red Deer, Alberta. The licensee proposes to add TV transmitters in Calgary and Edmonton to broadcast the programming of CHCA‑TV, Red Deer, in order to serve the population of Calgary and Edmonton.
LISTNUM 1 \l 12925 The transmitter in Calgary would operate on channel 38 with an effective radiated power of 76,000 watts (non‑directional antenna/antenna height of 206 metres) and the transmitter in Edmonton would operate on channel 17 with an effective radiated power of 92,000 watts (non‑directional antenna/antenna height of 232 metres).
LISTNUM 1 \l 12926 Appearing for the applicant is Ms Kathy Dore who will introduce her colleagues. You will then have 30 minutes to make your presentation.
LISTNUM 1 \l 12927 Mrs. Dore.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 12928 MS DORE: Thank you. Good morning, Chairman Arpin, commissioners and Commission staff.
LISTNUM 1 \l 12929 My name is Kathy Dore and I am President of Television and Radio for CanWest MediaWorks.
LISTNUM 1 \l 12930 I will begin today by introducing our panel.
LISTNUM 1 \l 12931 To my immediate left is Barbara Williams, Senior Vice‑President of Programming and Production.
LISTNUM 1 \l 12932 To my immediate right is Charlotte Bell, Vice‑President of Regulatory Affairs.
LISTNUM 1 \l 12933 Next to her is Stan Schmidt, General Manager and General Sales Manager of CHCA.
LISTNUM 1 \l 12934 And sitting next to Stan is Chris McGinley, Senior Vice‑President of Station Operations.
LISTNUM 1 \l 12935 In the row behind us, starting from my far right, your left, is Brett Manlove, Senior Vice‑President of Broadcast Sales and Marketing.
LISTNUM 1 \l 12936 Next to him is David Rathan, Research Manager for our Television Operations.
LISTNUM 1 \l 12937 Next to him is Christine Cook, Vice‑President, Finance.
LISTNUM 1 \l 12938 Seated next to Christine is Karen Clout, Coordinator, Regulatory Affairs.
LISTNUM 1 \l 12939 And next to Karen is Jim Moltner, Technical Engineer with Teknyk Ltd.
LISTNUM 1 \l 12940 We are pleased to appear before you today to discuss our proposal to add transmitters of CHCA Red Deer in Calgary and Edmonton.
LISTNUM 1 \l 12941 Today we would like to outline to you:
LISTNUM 1 \l 12942 ‑ first, the quality of the service that CHCA provides to central Alberta;
LISTNUM 1 \l 12943 ‑ next, the ongoing financial difficulty that challenges our capacity to provide this service as well as the challenges to the CH brand of stations across the country;
LISTNUM 1 \l 12944 ‑ third, our proposal to remedy this situation by deriving national revenues from Calgary and Edmonton; and
LISTNUM 1 \l 12945 ‑ fourth, the new commitments we propose to ensure that CHCA and CanWest expand their contribution to Alberta.
LISTNUM 1 \l 12946 To lead off, I would ask Stan Schmidt, General Manager and General Sales Manager of CHCA to tell you how this small market station continues to play a large role in the community it serves.
LISTNUM 1 \l 12947 MR. SCHMIDT: Thank you, Kathy.
LISTNUM 1 \l 12948 Commissioners, in December of this year CHCA will celebrate its fiftieth year. Indeed, for half a decade CHCA has been operated as a dedicated local station serving the needs of central Alberta.
LISTNUM 1 \l 12949 We provide a high quality local service to our community with significant hours of local programming. Each day of the week we provide a suppertime news program and a late evening newscast. These programs are intensely local. On average the suppertime newscast is 75 to 80 percent local and the late night newscast is approximately 95 percent local. And when we say local, I mean central Alberta, which is very important to the whole Red Deer region.
LISTNUM 1 \l 12950 Red Deer is in central Alberta with a large agricultural community around us. To meet their needs we produce and air the province's only regular agricultural program, "AG 21," a half‑hour program aired every morning of the week.
LISTNUM 1 \l 12951 In total we provide a minimum of 9 hours and 45 minutes of local programming each and every week, which is more than most stations in similar size markets.
LISTNUM 1 \l 12952 But our commitment goes well beyond this. Our management and staff continue to take a leadership role in the community we serve and we are proud of our accomplishments. Whether through donations of free airtime for PSAs, chairing or attending community events, lending support to local fundraising drives or getting involved in joint projects to help address social issues that affect our community, we have made it a priority to lend a helping hand wherever possible in our community.
LISTNUM 1 \l 12953 As an example, for many years our station has been a dedicated supporter of the Central Alberta Women's Emergency Shelter, raising funds to expand their services and facilities to women in need in central Alberta. Our annual Celebrity Waiter dinner, including such busboys in the past and waitresses as Ron Maclean, Brian Sutter and Mayor Gail Surkan has raised over $100,000 a year since 1995.
LISTNUM 1 \l 12954 As you are aware, in Alberta the population of Aboriginal people by far exceeds the national average; 5.3 percent of the Alberta population is Aboriginal while the national average is 3.3 percent. With this in mind and in recognizing the special place of Aboriginal people in our community, we have broadcast a number of special features highlighting the successes and the challenges faced by Aboriginal groups in our community in the past.
LISTNUM 1 \l 12955 In November of 2005, we broadcast a two‑part feature entitled "The Beat of a Different Drum" which showcased an innovative training program organized the by the cadet corps in the Hobbema community to encourage young people to take part in sports and recreation activities as an alternative to turning to drugs and alcohol.
LISTNUM 1 \l 12956 The program, which has been a success in Saskatchewan and Manitoba, was extended to the Hobbema community and CHCA reporters attended the training sessions and interviewed participants and members of the community who supported the program. Through our reporting of the training program and raising awareness of the issues, 300 youths from the Hobbema community enlisted in this new program by late November of 2005.
LISTNUM 1 \l 12957 Our reporting of this positive story allowed us to build a stronger relationship of trust with the Hobbema community. As a result, in the spring of 2006 we broadcast several other stories about this community to update our viewers on the progress being made.
LISTNUM 1 \l 12958 In particular, reporter Shannon Pasiuk produced a three‑part series on a local drilling safety training centre located just outside Red Deer. The programs demonstrated how members of the local Aboriginal community were being trained to safely work on oil and gas drilling rigs, allowing them access to lucrative employment in a booming sector of the Alberta economy.
LISTNUM 1 \l 12959 We have also made serious efforts to get ourselves up to speed so we can better reflect this important aspect of our society. In September of 2006 Robert Laboucane of RippleEffects, an Aboriginal awareness training consultant, led the Alberta CanWest management team which consisted of 19 managers from Calgary, Edmonton, Lethbridge and Red Deer, and one attendee from Global British Columbia in an intensive half‑day training session discussing culture, traditions and current Aboriginal issues.
LISTNUM 1 \l 12960 We are proud of our history of service and would like to continue and amplify our contribution but we face ongoing problems.
LISTNUM 1 \l 12961 I would now ask Chris McGinley to provide some of the background.
LISTNUM 1 \l 12962 MS McGINLEY: Thanks, Stan.
LISTNUM 1 \l 12963 At one time the station could depend on revenues derived from favourable placement on cable in Alberta's two largest markets in order to generate additional national revenues to help subsidize local service in Red Deer. In addition, as a CBC affiliate the station received affiliation revenues from the Corporation.
LISTNUM 1 \l 12964 About five years ago our model started to fall apart. The CBC approached us wishing for us to disaffiliate; we were moved up the dial in Edmonton and Calgary to much less desirable positions; and DTH satellite services started to increase their penetration of our market, bringing many new choices but not offering our service.
LISTNUM 1 \l 12965 In 2003 we filed an application to disaffiliate while at the same time looking to find a way to compensate the loss of revenue by requesting transmitters in Edmonton and Calgary. The Commission approved the disaffiliation but denied our transmitters.
LISTNUM 1 \l 12966 Since then our situation has declined further. We no longer have the CBC affiliate payments, a loss of about half a million a year. In fact, the CBC's signal joins the other English signals available in our market and has added a new competitor for local revenues. DTH penetration continues to climb; it is now at 47 percent of central Alberta households. A new fragmenter, digital cable, offering multiple program choices and time shifting is making inroads, now at 11.4 percent.
LISTNUM 1 \l 12967 We face two Edmonton stations competing for local revenues in our market, none of which provide local programming. Both are on satellite, meaning that they reach a larger portion of the market than we can.
LISTNUM 1 \l 12968 While we do have a bit more inventory to sell, the increased competition has meant decreased revenues, and without Calgary and Edmonton to offer national advertisers, our national revenues have significantly declined.
LISTNUM 1 \l 12969 To further compound the problem, given CHCA's status as a distant signal, cable carriage in Calgary and Edmonton is neither mandatory nor guaranteed. Consequently, the distribution of CHCA in those markets remains precarious and at the option of cable companies who can either move it up the dial at will or simply remove it at their discretion.
LISTNUM 1 \l 12970 We have already experienced the negative effects of being moved from favourable channel positions below 13 to channel 50 in Calgary and 54 in Edmonton. This is compounded by the fact that as a distant signal we do not have access to simulcast rights. Consequently, revenues have steadily declined for the station over the past five years. The net result is that CHCA has posted average annual losses in excess of $1.7 million since 2001.
LISTNUM 1 \l 12971 The situation in which CHCA finds itself is a local example of the problems facing the conventional television industry in general.
LISTNUM 1 \l 12972 Our CH stations across the country provide a separate stream of 8 hours per week of priority programming and they provide significant amounts of local programming in each of the markets they serve, in most cases well beyond what our competitors offer.
LISTNUM 1 \l 12973 Yet, as you know from the confidential annual returns we file with the Commission each year, most of the CH stations are showing losses and in some cases significant losses. Collectively, despite the significant contributions these stations make, they are operating at a loss.
LISTNUM 1 \l 12974 We must buy national rights for the CH programs. That means we have paid for rights for all of Alberta for these programs but because of our precarious status on cable in Calgary and Edmonton and the lack of simultaneous substitution, U.S. stations from Spokane with better placement on the dial are credited with tuning for programs for which we hold the rights.
LISTNUM 1 \l 12975 Our proposal aims to address this situation. It will do the following:
LISTNUM 1 \l 12976 First, generate sufficient revenues through transmitters in Calgary and Edmonton to ensure CHCA's ability to maintain its high‑quality local program offering;
LISTNUM 1 \l 12977 Second, provide programming diversity for the 10 percent of residents in Calgary and Edmonton who do not subscribe to cable, satellite or other technology by providing another viewing option;
LISTNUM 1 \l 12978 Third, mandate carriage of CHCA as a priority signal in Edmonton and Calgary to ensure that residents in those markets have guaranteed access to our Canadian priority programming and primetime foreign schedule;
LISTNUM 1 \l 12979 Fourth, allow CHCA to derive revenues for the programs we have paid for through simulcast opportunities that are not currently available by repatriating Canadian viewing;
LISTNUM 1 \l 12980 Fifth, to create a $10.5 million independently administered programming fund for priority programming from Alberta producers;
LISTNUM 1 \l 12981 Sixth, respond to the needs of Alberta's growing Aboriginal population through a number of innovative programming and internship initiatives; and
LISTNUM 1 \l 12982 Last, to reduce the impact on incumbent broadcasters by not soliciting or accepting local advertising in Calgary or Edmonton.
LISTNUM 1 \l 12983 Barb Williams will now speak to the specific new programming initiatives that this application will provide.
LISTNUM 1 \l 12984 MS WILLIAMS: Thanks, Chris.
LISTNUM 1 \l 12985 Commissioners, the revenues that approval of this application will bring will permit us to expand our contribution to the system in two distinct ways: through an expanded involvement with the Aboriginal communities in Alberta and by financing increased Alberta independent production.
LISTNUM 1 \l 12986 Our involvement with the Aboriginal communities will have three components.
LISTNUM 1 \l 12987 Last year CanWest was the first private broadcaster in Canada to join forces with APTN to produce and broadcast the National Aboriginal Achievement Awards. The awards are a celebration of achievements from Canada's Aboriginal communities and we are working again with APTN this year to bring the awards to Canadians from coast to coast this coming March when the awards will be held in Edmonton.
LISTNUM 1 \l 12988 Now while our application originally anticipated extending SHOUT magazine, a Saskatchewan‑based youth‑oriented magazine to television, we regret that our CanWest‑based publications in Saskatchewan is no longer in partnership with the venture with the First Nations University of Canada and MGM Communications.
LISTNUM 1 \l 12989 As a result, it is our intention to replace this initiative with a bolstered and multiyear commitment to continue to produce and air the National Aboriginal Achievement Awards for the next three years. As part of this commitment, we will substantially increase our financial participation toward the production of this program and we will air it on all our Global and CH station in primetime.
LISTNUM 1 \l 12990 We will also produce and air a series of vignettes on our airwaves highlighting the achievements of the award recipients each year and we will make these vignettes available to APTN and to all the other Canadian broadcasters at no charge in order to highlight the positive stories of young Aboriginal role models for all Canadians to celebrate.
LISTNUM 1 \l 12991 As part of this application, we are committed to expand on the programming initiatives that Stan touched on.
LISTNUM 1 \l 12992 We will include a regularly scheduled weekly feature on Aboriginal issues in our supper hour newscast. This program will seek out events and issues of importance to the Aboriginal community and share their stories with all of our viewers.
LISTNUM 1 \l 12993 Twice a year we will produce two 30‑minute documentaries highlighting the most important features covered in these weekly stories and these documentaries will be aired on all our CH stations across Canada and again will be made available to APTN to broadcast on their station.
LISTNUM 1 \l 12994 In order to help train young broadcasters of the future from the Aboriginal community we have also made a commitment to establish three paid four‑month internships at one of our Alberta television stations for young Aboriginal students enrolled in postsecondary programs in media and communications or journalism each year.
LISTNUM 1 \l 12995 We anticipate working closely with the Aboriginal Multi‑Media Society of Alberta which is located in Edmonton in order to set up the criteria for eligibility for this program and shortlist the candidates. Over seven years this new training program will result in 21 internships for Aboriginal students to obtain firsthand training in broadcasting.
LISTNUM 1 \l 12996 We are proud of this initiative as it builds on our existing "Broadcaster of the Future" scholarship program that was established many years ago by our founder Israel Asper.
LISTNUM 1 \l 12997 Last but certainly not least, as part of our ongoing commitment to support the Alberta independent production community we will set up a $10.5 million fund that will be independently administered by the existing Independent Production Fund, the IPF, for the production of priority programming. The funds will be accessible to all broadcasters who meet certain eligibility criteria and will be disbursed over the seven‑year period.
LISTNUM 1 \l 12998 As the Commission knows, the IPF has had a long and successful history of working closely with the Alberta independent production sector in managing the funds. They have agreed to assign a dedicated person in Alberta to act as liaison with the production industry and we are confident that they will administer these monies in a fair, responsive and efficient manner.
LISTNUM 1 \l 12999 Now as you know, we had originally planned to direct these funds to produce programming exclusively for our CH stations but we are now responding to questions raised by both AMPIA and the CFTPA concerning the incrementality and local management of these funds.
LISTNUM 1 \l 13000 It is worth mentioning that this initiative represents 17 percent of the value of approval of this application to CanWest and is truly incremental to our current spending on priority programming.
LISTNUM 1 \l 13001 Kathy.
LISTNUM 1 \l 13002 MS DORE: Commissioners, in closing, we have presented you with a plan to revitalize CHCA in order to breathe new life into this station in an increasingly challenging marketplace for small market television.
LISTNUM 1 \l 13003 By refraining from accessing the local advertising market in Edmonton and Calgary we will cause minimal impact to the marketplace.
LISTNUM 1 \l 13004 Approval of this application will ensure that CHCA will maintain its 50‑year heritage of service to central Alberta.
LISTNUM 1 \l 13005 It will also contribute to strengthen the CH group of stations by enabling them to receive full value for the program rights that we have purchased nationally which we cannot currently monetize in Alberta.
LISTNUM 1 \l 13006 We have proposed a number of programming and other enhancements to support the Alberta independent production community as well as the Aboriginal community of Alberta.
LISTNUM 1 \l 13007 As you heard at the TV Policy review, conventional television faces substantial challenges at present and these challenges are growing in number and impact each day. The challenges that the industry faces hit even harder in smaller markets.
LISTNUM 1 \l 13008 Small market broadcasters at the TV Policy hearing outlined their ongoing difficulties: fragmentation from DTH and digital cable; competition for viewers' attention from YouTube and YourSpace; and means to bypass advertising from direct downloads to PVRs. The independently owned stations demonstrated clearly that only the CAB small market fund has kept them from increasing losses.
LISTNUM 1 \l 13009 We believe that approval of this application is one way to stem the tide without causing too much damage to others while making contributions to the objectives of the Act. We are confident that this proposal is in the public interest.
LISTNUM 1 \l 13010 I would now like to ask Charlotte Bell to lead in the question and answer period of this hearing.
LISTNUM 1 \l 13011 We thank you for your attention and are prepared to answer your questions.
LISTNUM 1 \l 13012 THE CHAIRPERSON: Thank you, Mrs. Dore. Thank you to your team.
LISTNUM 1 \l 13013 I will ask Commissioner Williams to ask the first questions.
LISTNUM 1 \l 13014 COMMISSIONER WILLIAMS: Thank you, Mr. Chair.
LISTNUM 1 \l 13015 Good morning, Ms Bell and CanWest panel. I guess where I would like to start is given your application is very similar to the one we denied in CRTC 2004‑98, could you please describe or explain what has changed in the marketplace during the past few years that would perhaps result in us coming up with a different decision on this application?
LISTNUM 1 \l 13016 MS BELL: Well, I will begin and I think Kathy Dore may want to chime in and also Chris McGinley who is the person who runs our television station.
LISTNUM 1 \l 13017 Commissioner Williams, I guess we in 2003 had to a certain extent the same issues as we have now, except I would say, for lack of a better term, they have just amplified over time. The marketplace has changed since that time.
LISTNUM 1 \l 13018 As you will recall at the time Craig was operating two stations in the market. Since then CHUM bought those stations and now there is another transaction in play.
LISTNUM 1 \l 13019 There have been significant changes in the marketplace overall. There has been a significant increase in digital penetration across Canada and including in this market, which adds more fragmentation, more competition for viewers. This is putting a strain on all conventional stations across Canada.
LISTNUM 1 \l 13020 One of the issues for us and what we have discussed in our opening remarks is the fact that there are certain markets in Canada that really are the engine that help subsidize the smaller markets and the markets that lose money.
LISTNUM 1 \l 13021 As part of a large station group, our Red Deer station certainly benefits from synergies and resources that come from being part of a larger group but at the same time it also has to meet higher regulatory obligations and I think that it is fair to say that the station is continuing to lose money.
LISTNUM 1 \l 13022 DTH penetration has increased. I think it was somewhere around 30 percent in 2003; it has increased to 47 percent. And as I said, overall digital penetration is also increasing, putting additional strain. We are also dealing in all markets with increased competition from other regulated and non‑regulated television sources.
LISTNUM 1 \l 13023 So there are a variety of reasons why we think this is very timely and appropriate.
LISTNUM 1 \l 13024 Perhaps Kathy Dore would like to add something to that.
LISTNUM 1 \l 13025 MS DORE: I would just echo that I think all of those issues are more extreme today than they were three years ago. There is higher DTH penetration. There is greater fragmentation. Our programming costs have increased significantly and we are not able to monetize those costs in Alberta.
LISTNUM 1 \l 13026 COMMISSIONER WILLIAMS: If I can just get some clarification on that particular last statement, Ms Dore. Would that not affect the incumbents in the marketplaces of Edmonton and Calgary as well?
LISTNUM 1 \l 13027 MS DORE: The incumbents in Edmonton and Calgary would be able to monetize their program rights in those markets.
LISTNUM 1 \l 13028 COMMISSIONER WILLIAMS: I was thinking more along the lines of the increased fragmentation and other competitive forces.
LISTNUM 1 \l 13029 MS DORE: Certainly, increased fragmentation impacts all of us. DTH carriage happens to impact only those networks that aren't carried on DTH and Red Deer is one of those. So that would not impact all of the other competitors in the marketplace.
LISTNUM 1 \l 13030 COMMISSIONER WILLIAMS: Thank you for that clarification. I am sorry, Ms Bell, please proceed with your answer.
LISTNUM 1 \l 13031 MS BELL: We are done with that answer.
LISTNUM 1 \l 13032 COMMISSIONER WILLIAMS: Okay. Can you comment on the financial impact to the incumbents? I think it was raised by CHUM who stated that they would bear the brunt of the financial revenue if your application be approved.
LISTNUM 1 \l 13033 MS BELL: Commissioner Williams, as you know, as part of our application we provided a breakdown in terms of how we think this proposal would impact on incumbents, including ourselves, and I would like to ask Brett Manlove to walk us through that impact.
LISTNUM 1 \l 13034 MR. MANLOVE: Thank you, Charlotte.
LISTNUM 1 \l 13035 Commissioner Williams, Vice‑Chair and panel, the impact position is always an interesting one. When you look at introducing something of this type into the market, we are going to have an effect, we know.
LISTNUM 1 \l 13036 In the case of our competitors what we have attempted to do, by taking a look at eliminating our ability to solicit local and looking at one of the strongest markets in the country, it would appear that we would be able to keep those impacts to a minimum at the same time as achieving the goals that we have set out to achieve for our station in Red Deer.
LISTNUM 1 \l 13037 COMMISSIONER WILLIAMS: Okay. Talking about your station in Red Deer, how will you ensure that the station's local programming orientation, specifically its commitment to broadcast a minimum of 9 hours and 45 minutes of local programming each week, will remain dedicated to the community of Red Deer?
LISTNUM 1 \l 13038 MS BELL: If I get the question correctly, you are asking us if we are going to maintain that local orientation and not begin to target Edmonton and Calgary?
LISTNUM 1 \l 13039 COMMISSIONER WILLIAMS: That is correct.
LISTNUM 1 \l 13040 MS BELL: You have our commitment on that but I will ask Chris McGinley and Stan Schmidt to expand on that.
LISTNUM 1 \l 13041 MR. SCHMIDT: Certainly, Commissioner Williams, our ongoing emphasis with our local news in Red Deer will be central Alberta. That is the audience that we have served for 50 years and it is the audience that we are going to continue to serve.
LISTNUM 1 \l 13042 Certainly, we will continue to provide events of provincial interest as it relates to the Legislature that is in Edmonton and other events that are of importance to central Albertans that happen in Calgary and other parts of the province but as I said earlier, 75 to 95 percent of our local content will be devoted to central Alberta.
LISTNUM 1 \l 13043 COMMISSIONER WILLIAMS: So ‑‑ I am sorry, Ms McGinley.
LISTNUM 1 \l 13044 MS McGINLEY: I was just going to add that this is the same model that we have with respect to our station in Victoria. It serves ‑‑ its local market is the Vancouver Island even though we are on the lower mainland of British Columbia. It is the same model that we serve in Kelowna; it covers the Okanagan Valley. And the same model in Hamilton, which covers Hamilton/Niagara.
LISTNUM 1 \l 13045 All of their local programming is between 75 to 80 percent local to reflect strictly the markets that they serve, the same commitment that we are making for Red Deer to serve the central Alberta market.
LISTNUM 1 \l 13046 COMMISSIONER WILLIAMS: So if we were to approve your application, would you have any difficulty accepting the local programming commitment we just spoke about as a condition of licence?
LISTNUM 1 \l 13047 MS BELL: I guess the only issue with that is that all of our conventional stations are coming up for renewal in probably the next 12 to 18 months and at that time we will have a better sense of where the Commission is going with its TV Policy review, because in fairness we really don't know what the landscape is going to look like after the Commission rules on the TV Policy.
LISTNUM 1 \l 13048 The other issue is in this market we are maintaining that level of local orientation, we are going to continue to do that, and in fact we have been overperforming on the hours and we have no intention of reducing those hours.
LISTNUM 1 \l 13049 But I think that there are a number of factors that are unknown to us at this point that will be clear by the time we come up for our licence renewal. So we feel that perhaps a condition of licence is not necessarily warranted at this time.
LISTNUM 1 \l 13050 We can certainly agree and we are fully committed to maintain the local orientation that is unquestioned.
LISTNUM 1 \l 13051 If you are suggesting a condition of licence on the hours that we are committed to at this point, we feel that that may not be warranted at this time.
LISTNUM 1 \l 13052 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 13053 MS BELL: Commissioner Williams, may I go back to your previous question ‑‑
LISTNUM 1 \l 13054 COMMISSIONER WILLIAMS: Absolutely.
LISTNUM 1 \l 13055 MS BELL: ‑‑ on impacts because I feel that we didn't answer that correctly or with as much detail as I think you were asking?
LISTNUM 1 \l 13056 We did provide a breakdown as part of our supplementary brief ‑‑ it was on page 10 ‑‑ and in terms of the impact on CHUM's station specifically, we projected that 14 percent in Calgary of the impact of this proposal would be borne by CHUM, which would represent about $1 million, and 7 percent in Edmonton, which would represent about less than half a million dollars.
LISTNUM 1 \l 13057 COMMISSIONER WILLIAMS: Okay, thank you. I would like to talk about your programming initiatives. You stated that you would spend $10.5 million over seven years on priority programming originating from independent producers in the province of Alberta.
LISTNUM 1 \l 13058 Can you provide us some specific details regarding how this increased funding would be allocated and the type and number of additional hours of any priority programming that would be produced?
LISTNUM 1 \l 13059 MS BELL: I am going to ask Barb Williams to provide that information.
LISTNUM 1 \l 13060 MS WILLIAMS: Sure. I have actually had a number of conversations at this point with Andra Scheffer who runs the IPF, the Independent Production Fund, who we are proposing would run this fund for us.
LISTNUM 1 \l 13061 I will say, to begin, that she was delighted when we came to her and suggested that her organization could help us out with this initiative. They clearly have a ton of experience and success in managing funds and they are very well known and trusted by the independent production community. So right off the bat, we think we are in good shape working with them.
LISTNUM 1 \l 13062 We have been discussing the criteria and we have been discussing how to best manage the funds and we have not locked all the details yet but let me tell you sort of where we are at.
LISTNUM 1 \l 13063 Firstly, we see that this fund would be dedicated to priority programming and specifically to drama and to documentary, which we believe are the two categories which are most ‑‑
LISTNUM 1 \l 13064 COMMISSIONER WILLIAMS: Would this be in addition to your current priority programming commitments?
LISTNUM 1 \l 13065 MS WILLIAMS: That is additional dollars but understand that this fund is being proposed to be available to all broadcasters. So this is not just about us accessing this money to provide hours for us, this is really about focusing on the opportunity for independent producers in Alberta to have access to some more money to help them get some of their bigger drama and documentary projects under way.
LISTNUM 1 \l 13066 So to the extent that we were a successful applicant at the fund then this would generate hours for us. But this is incremental spending that we have committed to support the Alberta community, not incremental spending specifically to us. This fund is accessible to all broadcasters.
LISTNUM 1 \l 13067 So it would be specifically for Alberta producers and Alberta producers only. It would be for priority programming, specifically drama and documentary. It would be seen as an additional funding source, not to replace a broadcast licence fee but as an additional funding source to help close financing scenarios for producers.
LISTNUM 1 \l 13068 It is hard to say at this point exactly how many hours it might generate but we would expect, given that dramas and documentaries are the more expensive kind of television to make, that likely we are talking about 100 additional hours over the term, which is a significant number of hours in those categories of programming.
LISTNUM 1 \l 13069 The other sort of key point is that the IPF agreed with us that it would be really important to put somebody on the ground in Alberta to be the face of this fund, someone who the Alberta producers could interact with directly and face to face, who would understand their issues and their concerns. So the IPF has agreed to support a person in Alberta who would be that liaison for this fund.
LISTNUM 1 \l 13070 And we believe that by going with the IPF, who are already administering many funds, that we can really contain the costs of fund administration and be sure that as much money as possible goes to the screen.
LISTNUM 1 \l 13071 COMMISSIONER WILLIAMS: And so that would be the method of funding disbursement then, it would be through the fund and through this identified person?
LISTNUM 1 \l 13072 MS WILLIAMS: Exactly.
LISTNUM 1 \l 13073 COMMISSIONER WILLIAMS: What is your view on imposition of a condition of licence requiring the expenditure of $10.5 million on priority programming to be produced in Alberta? I assume there is no problem.
LISTNUM 1 \l 13074 MS BELL: We would accept that. That is the criteria that we set up with the IPF.
LISTNUM 1 \l 13075 COMMISSIONER WILLIAMS: Would CanWest submit annual reports outlining its activities on independent production?
LISTNUM 1 \l 13076 MS BELL: I suspect that what we would do is ask the IPF to provide us with a report and then we would file that with the Commission on an annual basis.
LISTNUM 1 \l 13077 COMMISSIONER WILLIAMS: Thank you. You have talked about a news feature called "Aboriginal Focus" and to develop two annual 30‑minute documentary programs from the highlights of these features.
LISTNUM 1 \l 13078 Could you please provide some information on the duration and scheduling of these features and the proposed day of broadcast and the number of features it tends to commit to within the broadcast year?
LISTNUM 1 \l 13079 MS BELL: I am going to ask Stan Schmidt to answer that question.
LISTNUM 1 \l 13080 MR. SCHMIDT: Commissioner Williams, I think we have committed in our application and reiterated again today that we will do a weekly feature in our supper newscast, so in other words, 52 distinct different features on Aboriginal activities in the central Alberta marketplace.
LISTNUM 1 \l 13081 COMMISSIONER WILLIAMS: And these would all be produced in your Red Deer studio?
LISTNUM 1 \l 13082 MR. SCHMIDT: Yes, they would, sir. Out of those 52 special reports that we would do on a weekly basis, we would select the highlights, I guess, of those special reports to develop the two documentaries that we would air each year, so I am thinking one every six months, something like that.
LISTNUM 1 \l 13083 We haven't really made that determination yet but certainly those documentaries would also air on the other CH stations in Canada as well as they would be made available to APTN.
LISTNUM 1 \l 13084 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 13085 To what extent, if any, does CanWest expect some of its incremental revenues to come via repatriation of audience and advertising revenues lost to U.S. border stations?
LISTNUM 1 \l 13086 MS BELL: I am going to ask Brett Manlove and David Rathan to address that.
LISTNUM 1 \l 13087 Brett.
LISTNUM 1 \l 13088 MR. MANLOVE: Thank you very much, Charlotte.
LISTNUM 1 \l 13089 Simultaneous substitution is a very important part of a few criteria that are going to be important to the generation of the revenue. Simultaneous substitution, according to the work we have done, represents about 45 percent of the increase to our audience but about 62 percent of our revenues.
LISTNUM 1 \l 13090 Higher rated shows largely in primetime, higher rate and ‑‑ we have 29 hours of programming scheduled that would get simulcast. So 8 to 10 hours would be in prime. So that would be the extent of how it breaks down.
LISTNUM 1 \l 13091 David.
LISTNUM 1 \l 13092 MR. RATHAN: Sixty‑two percent is a good number.
LISTNUM 1 \l 13093 MS BELL: Thank you.
LISTNUM 1 \l 13094 Commissioner Williams, I think your question is in terms of the impact of the new stations, how much of that might come from other sources as opposed to the incumbents; was that your question?
LISTNUM 1 \l 13095 COMMISSIONER WILLIAMS: That is the question, exactly.
LISTNUM 1 \l 13096 MS BELL: Thank you.
LISTNUM 1 \l 13097 MR. MANLOVE: I can continue. Thank you.
LISTNUM 1 \l 13098 For the total revenue package, the bulk of that amount of simultaneous ‑‑ what would be the amount that the simultaneous substitution then would equal? Commissioner Williams, is that what we are ‑‑
LISTNUM 1 \l 13099 COMMISSIONER WILLIAMS: Yes, the incremental revenues to come via repatriation of audience and advertising revenues currently lost to U.S. border stations is what I am looking for.
LISTNUM 1 \l 13100 MR. SCHMIDT: Mr. Williams, I think that one thing we can say is that we are estimating that somewhere around 25 percent of our revenue will come from other sources and that being repatriation from U.S. stations, some coming from other forms of media such as radio, internet, newspaper, and the other 75 percent, the bulk of that coming from the incumbents in the marketplace, including ourselves.
LISTNUM 1 \l 13101 COMMISSIONER WILLIAMS: Okay. Did you do a breakdown on to what extent does CanWest see revenues from other media?
LISTNUM 1 \l 13102 MS BELL: We didn't break down the 25 percent in detail.
LISTNUM 1 \l 13103 COMMISSIONER WILLIAMS: You didn't break down the 25?
LISTNUM 1 \l 13104 MS BELL: No.
LISTNUM 1 \l 13105 COMMISSIONER WILLIAMS: What specific programming strategies might CHCA‑TV use to facilitate audience and advertising revenue repatriation?
LISTNUM 1 \l 13106 MS BELL: I will ask Barb Williams to discuss this.
LISTNUM 1 \l 13107 MS WILLIAMS: Actually we are quite proud of our CHCA schedule. We think it is a great schedule that has a great strong mix of local programming and some of Canadian viewers' favourite primetime American shows.
LISTNUM 1 \l 13108 I think the challenge for us in terms of making that schedule successful is being sure that all of our viewers have full access to it and so what we are trying to do here is accomplish taking back those viewers that are currently enjoying those shows on American stations and getting them back to our station where they can not only enjoy those shows but we can then share with them all the other elements of our schedule that they may not be aware of and move that audience around through primetime and then into our local shows as well and through our other Canadian primetime shows to make the whole schedule as successful as possible.
LISTNUM 1 \l 13109 Now obviously, some additional support in terms of promotion would be important to be sure that there was awareness that this station was now available to them in a better, more favourable position if we were able to achieve that.
LISTNUM 1 \l 13110 But really, I think our frustration at the moment is that we have a great schedule that maybe isn't being as fully enjoyed as it could be.
LISTNUM 1 \l 13111 COMMISSIONER WILLIAMS: You are currently applying for an analog channel for both markets. However, broadcasters are adopting digital transmission technologies to be used in the provision of broadcasting services. The United States will shut down their analog transmitters perhaps in 2009 and post‑transitional digital television plans are already under discussion between Industry Canada and the FCC.
LISTNUM 1 \l 13112 Do you have a digital and post‑transitional plan for your proposed station, and if so, what can you tell us about your plans for digital?
LISTNUM 1 \l 13113 MS BELL: I can begin and Kathy Dore may want to add to that.
LISTNUM 1 \l 13114 We have not established a definitive plan for digital rollout. We are also awaiting the Commission's determination in terms of its TV Policy for viewing. We made a number of recommendations in terms of how we thought the rollout may occur in Canada. I don't know if the 2009 cutoff date is actually going to occur at that point in the U.S.
LISTNUM 1 \l 13115 COMMISSIONER WILLIAMS: It may be later, yes.
LISTNUM 1 \l 13116 MS BELL: It may be a little later. In Canada, I think most broadcasters seem to agree that 2011 or two years following the 2009 or the U.S. shutoff might be an appropriate time.
LISTNUM 1 \l 13117 In any case, it is a bit of a dilemma when you are applying for a television station under current rules and trying to anticipate what might be happening later. This is why we have applied for analog transmitters at this time.
LISTNUM 1 \l 13118 We are hoping that by the time we file our licence renewal next year that we will be able to give you a better idea of our rollout plans for HD.
LISTNUM 1 \l 13119 COMMISSIONER WILLIAMS: Thank you, Ms Bell.
LISTNUM 1 \l 13120 In the event the Commission decides not to license you for the frequency for which you have applied, have you considered the use of another frequency, and if yes, which one, and if no, why not?
LISTNUM 1 \l 13121 MS BELL: Yes, we think there are all alternatives. I will ask our engineer Jim Moltner to provide more information.
LISTNUM 1 \l 13122 MR. MOLTNER: Commissioner Williams, I assume you are talking about Calgary since we are not in competition in Edmonton?
LISTNUM 1 \l 13123 COMMISSIONER WILLIAMS: That is correct.
LISTNUM 1 \l 13124 MR. MOLTNER: Yes, in Calgary, we have identified a total of four available channels, not including the digital channels applied for by Miracle. So if in your wisdom, as you say, you were to license everybody, there would be enough channels available for everybody.
LISTNUM 1 \l 13125 COMMISSIONER WILLIAMS: Would you having to change to a different frequency have any kind of punitive effect on your business plan?
LISTNUM 1 \l 13126 MR. MOLTNER: Not really. The class of channels available is roughly equivalent to what we have applied for, so the coverage would be roughly the same.
LISTNUM 1 \l 13127 COMMISSIONER WILLIAMS: In your experience, Ms Bell, in CanWest's experience, how many new stations can the Edmonton and Calgary markets support? We asked the last presenter, the m channel, what would be the impact on their application should we approve CanWest, an ethnic service and a religious service. What would be your answer to a similar question?
LISTNUM 1 \l 13128 MS BELL: I will begin and others, I think, may want to chime in.
LISTNUM 1 \l 13129 As you know, in the intervention phase prior to the hearing we intervened against the two ethnic applicants, based on the fact that we think that it will have an impact on our operations.
LISTNUM 1 \l 13130 We heard the two religious applicants yesterday and we don't feel that there is a significant impact on our operations if either of the two are licensed, as long as they remain truly religious services and they don't being to go into other areas of more mainstream programming and start to compete head‑to‑head with us. So on the religious applicants, we don't feel that there is really a significant impact.
LISTNUM 1 \l 13131 In terms of the ethnic services, it is our belief, and we have stated this in our intervention, that we feel that Rogers has understated its revenues. We feel that Rogers through this application also will grow into what we could call a quasi‑network, which would also give them the ability to start bidding for national program rights and that is also an area of concern for us. So it is not just the revenue impact in the Alberta market.
LISTNUM 1 \l 13132 I think we tend to focus inward or on the smaller market but the fact is when you start moving pieces around, in the television broadcasting system everything is connected and if you move one piece, it has an impact on the other pieces.
LISTNUM 1 \l 13133 In the case of Rogers, I think there are other considerations, not only the financial impact in those markets.
LISTNUM 1 \l 13134 In terms of the m channel proposal, we looked at it carefully and we believe that that proposal has actually ‑‑ that they have actually overstated their revenues by a significant amount. We feel that the m channel would have less of an impact on our stations and of course we would have an impact on our own operation.
LISTNUM 1 \l 13135 COMMISSIONER WILLIAMS: Thank you, Ms Bell.
LISTNUM 1 \l 13136 That concludes my line of questioning, Mr. Chair.
LISTNUM 1 \l 13137 THE CHAIRPERSON: Thank you, Commissioner Williams.
LISTNUM 1 \l 13138 I will ask Commissioner Cugini to ask you a few questions.
LISTNUM 1 \l 13139 COMMISSIONER CUGINI: Thank you, Mr. Chairman.
LISTNUM 1 \l 13140 Ms Bell, you did mention a couple of times the TV review proceedings and one area that we did discuss at length with you in particular was your Red Deer station situation and the fact that it is not currently carried on DTH.
LISTNUM 1 \l 13141 If you were successful, either through your own negotiations or anything we might decide as a result of the TV review, to be granted DTH carriage, would that in any way mitigate the situation of that Red Deer station such that you would withdraw your application for retransmitters in both Calgary and Edmonton?
LISTNUM 1 \l 13142 MS BELL: Actually, it wouldn't. There is no doubt that obtaining DTH carriage would help but at the same time it certainly does not address the issue of national advertising in Calgary and Edmonton. It doesn't address the fact that the channel placement is above 50 in those markets and that we are not getting simulcast, which is to a large extent what we need in order to generate national advertising revenues.
LISTNUM 1 \l 13143 The experience that we have seen from other small market stations who eventually obtained DTH carriage, we have noticed it is a very slow and gradual increase in terms of viewership because it takes time. If you weren't up in the first round, once you do get up on satellite it does take a fair amount of time before viewers become aware that you are actually there.
LISTNUM 1 \l 13144 So would it have an impact? It would have a small impact. It would take, I think, a significant amount of time and it certainly would not alleviate all of the issues that we are dealing with because Red Deer has issues as a local station but it is also part of a large group of stations, which is the CH stream, and our ability to access Calgary and Edmonton through cable would generate significant revenues for us and is much more beneficial than getting DTH carriage for Red Deer alone.
LISTNUM 1 \l 13145 MR. SCHMIDT: Commissioner Cugini, I think you heard in the last presentation from Mr. Reitmayer that when he was at our station in Red Deer that they were selling a fair bit of advertising into the Edmonton and Calgary markets at a fairly decent cost per rating point and that was based on us being on channel 5 in Calgary and channel 22, I believe, in Edmonton.
LISTNUM 1 \l 13146 Since that has changed, in 2001 we went to channel 50 in Calgary, channel 52 in Edmonton, and they bumped us again in Edmonton to channel 54, those revenues have gone away. People can't find us, so people are not watching us. We can't simulcast, so our national revenues that Mr. Reitmayer talked about are nonexistent anymore.
LISTNUM 1 \l 13147 COMMISSIONER CUGINI: And those are currently the channel positions of the stations in the two markets?
LISTNUM 1 \l 13148 MR. SCHMIDT: Yes, channel 50 in Calgary and channel 54 in Edmonton.
LISTNUM 1 \l 13149 Just on the DTH issue as well, I think we can speak to a little bit of experience. Before coming to Red Deer, I was at our station in Saskatoon and we are on both DTH providers in Saskatoon but it was probably about six years after DTH came on the scene that we arrived there and it has been a very, very slow audience growth, for people to find us there.
LISTNUM 1 \l 13150 I think Mr. Rathan might even be able to tell you a little bit about what has happened in Lloydminster, who is also up on the bird now.
LISTNUM 1 \l 13151 MS BELL: I think Barb Williams can also add another perspective to this in terms of our priority programming commitments and how that ties in.
LISTNUM 1 \l 13152 MS WILLIAMS: Sure, and it may be worth also going back to David's words on Lethbridge (sic), as Stan just suggested, because I think there is ‑‑ or Lloydminster, I am sorry ‑‑ because I think there is an interesting example there.
LISTNUM 1 \l 13153 But I guess the other thing we are really trying to accomplish with our CH stream is to live up to our commitment to do 8 hours of priority programming on the CH stream, which is separate and distinct from Global.
LISTNUM 1 \l 13154 We take those commitments very seriously and we see them as a real opportunity to generate some great new Canadian priority programming. We are actually in the midst right now of doing a couple of new dramas for CH, and frankly, there hasn't been new drama done distinctly for CH in quite a while.
LISTNUM 1 \l 13155 So we are really trying to bolster the priority programming initiative on CH and in an effort to make that programming as successful as it can be across the country, we are really looking for the stations themselves, obviously, to be successful and to be profitable but we are also looking for the opportunity for Canadian viewers to enjoy those priority programs to be as great as possible.
LISTNUM 1 \l 13156 So we see a real win for priority programming in general by extending the success and the reach of the station.
LISTNUM 1 \l 13157 COMMISSIONER CUGINI: What percentage of the population in both Edmonton and Calgary currently receive their signal off air? I ask that just in relation to the fact that you are currently carried via cable in both markets, on analog. Therefore, what percentage of the population in both of those markets receive their signals off air?
LISTNUM 1 \l 13158 MS BELL: In Calgary it is 8 percent of the central market and 10 percent of the extended market, and in Edmonton it is 10 percent of both.
LISTNUM 1 \l 13159 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 13160 Thank you very much, Mr. Chairman.
LISTNUM 1 \l 13161 THE CHAIRPERSON: Some of my other colleagues also have questions but one that directly follows Commissioner Cugini's question is: Have you ever got the benefit of simulcast substitution in Calgary before?
LISTNUM 1 \l 13162 MS BELL: Not on this station, no.
LISTNUM 1 \l 13163 THE CHAIRPERSON: Not on that station?
LISTNUM 1 \l 13164 MS BELL: No.
LISTNUM 1 \l 13165 THE CHAIRPERSON: And the same for Edmonton?
LISTNUM 1 \l 13166 MS BELL: That is correct, because we are a distant signal in both, so we don't have ‑‑
LISTNUM 1 \l 13167 THE CHAIRPERSON: In both?
LISTNUM 1 \l 13168 MS BELL: Yes.
LISTNUM 1 \l 13169 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 13170 I will ask Commissioner Langford.
LISTNUM 1 \l 13171 COMMISSIONER LANGFORD: Thank you, Mr. Chair.
LISTNUM 1 \l 13172 I guess I will just ask the worst question of all and really get going and I want this in words of one syllable so I can understand it.
LISTNUM 1 \l 13173 What happens if we say no? Realistically what happens, what do you do?
LISTNUM 1 \l 13174 MS DORE: Well, I think we are very disappointed, first of all, and ‑‑
LISTNUM 1 \l 13175 COMMISSIONER LANGFORD: We always produce sad people, so that is not news.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13176 COMMISSIONER LANGFORD: We do happy and we do sad, that is what we do because there aren't enough frequencies on earth. So clarify my mudification on your sad level.
LISTNUM 1 \l 13177 MS DORE: I think it requires a rethinking of our strategic planning for CH overall and certainly, depending on what might or might not come out of the TV Policy review, we consider Red Deer to be in dire straits, frankly, and we would need to rethink, certainly, our commitment to that community given that we are only reaching a little over half of them.
LISTNUM 1 \l 13178 As well, I think if you continue that reasoning and you look at Alberta as being really a necessary precondition to having a viable national network, then it certainly causes us to rethink some of the more expensive programming commitments that we are making for CH as a brand.
LISTNUM 1 \l 13179 I don't think any of that would take place overnight but certainly over time if the CH stream is not viable and we can't command simulcast in Calgary and Edmonton, two of the big five markets at this point in the country, then it requires a very different kind of look at the business and a very different business plan.
LISTNUM 1 \l 13180 COMMISSIONER LANGFORD: You are not suggesting that you would close it, give us back the licence or anything like that?
LISTNUM 1 \l 13181 MS DORE: Again, I don't think that we would do anything precipitous but I certainly wouldn't rule that out long term if we continue to have a money‑losing operation, that that is certainly a possibility, although not one that, given the 50‑year history and the kind of service that we provide there, we would not ‑‑ we could certainly think long and hard and things would have to continue to be quite bad for us to do that.
LISTNUM 1 \l 13182 COMMISSIONER LANGFORD: So cutbacks but not necessarily cut and run?
LISTNUM 1 \l 13183 MS DORE: Certainly, that would be our first approach.
LISTNUM 1 \l 13184 COMMISSIONER LANGFORD: Now you are doing pretty well according to your own figures on your existing Edmonton and Calgary conventional stations. It seems to me, if I read them correctly, that you are the market leaders in those two cities on your existing conventional signals.
LISTNUM 1 \l 13185 Would that be right? Have I misread that?
LISTNUM 1 \l 13186 MS BELL: Brett can provide some ‑‑
LISTNUM 1 \l 13187 MR. MANLOVE: I would say we would be probably the No. 2 station in the markets.
LISTNUM 1 \l 13188 COMMISSIONER LANGFORD: Number 2?
LISTNUM 1 \l 13189 MR. MANLOVE: Right after CTV.
LISTNUM 1 \l 13190 COMMISSIONER LANGFORD: Okay. When did you file this application? Refresh my memory on dates.
LISTNUM 1 \l 13191 MS BELL: It was filed in August after the second call for applications.
LISTNUM 1 \l 13192 COMMISSIONER LANGFORD: Okay. The impact of what might be coming down the road on the figures that we have discussed today and the bright future you would have if we said yes, on the new situation with Bell Globemedia and CHUM should that go through, what impact would that have on the figures you have filed with us in this application? Can you guess in any way?
LISTNUM 1 \l 13193 MS BELL: We actually didn't take ‑‑ it is very much in the back of our minds. We did not bring it up in the context of this hearing because we know it is something that is before you and we can't predict what the outcome is, although it is something that is of concern to us.
LISTNUM 1 \l 13194 We have not factored that into our projects but there is no doubt that if that were to come to pass and the Commission said no to us ‑‑ and also just to be very clear, you asked the question what do you do if we say no. What if you say no to us and you say yes to others also and you approve the Bell Globemedia/CHUM deal, those all have different implications that clearly those are things that we have thought of.
LISTNUM 1 \l 13195 We have not estimated what the financial impact would be but ‑‑
LISTNUM 1 \l 13196 COMMISSIONER LANGFORD: Let us talk about it a little just in narrative terms.
LISTNUM 1 \l 13197 Let us assume ‑‑ because you have given us some figures assuming that we say yes and you have spoken today about what this will do to you and how your simulcast will help you generate some revenues and you will take some of that revenue and you will spend it on independent production and do things like that.
LISTNUM 1 \l 13198 So fine, let us assume just in narrative terms ‑‑ I don't expect figures here, obviously, and there is more than us involved in the future of this elephant in the room, if we can call it that. The Competition Bureau is looking at it. We are going to be looking at it. We are looking at it now and we will be looking at it publicly later. So there are unknowns.
LISTNUM 1 \l 13199 But assume just for the sake of argument that the CTV/CHUM, if we can call it that, Bell Globemedia/CHUM deal goes through with regard to this market, so that you have a double presence of this new entity in Calgary and Edmonton and then we have a double presence of you in Calgary and Edmonton, what happens to the sort of figures that you have given us?
LISTNUM 1 \l 13200 MS DORE: I am not sure that the figures actually ‑‑ that our projections change dramatically. I guess what I would say is that in filing this application it was prior to the Bell Globemedia announcement of their acquisition of CHUM and we considered that getting the Red Deer signal into Calgary and Edmonton was a necessary and a very significant event in terms of the continued viability of that station and of our CH brand.
LISTNUM 1 \l 13201 We certainly consider the Bell Globemedia acquisition to be creating, assuming that is it approved, a much stronger competitor to CanWest and we anticipate that that competition in the marketplace will increase and would therefore think that the approval of this application would serve to certainly even the playing field a bit more than it would without it.
LISTNUM 1 \l 13202 COMMISSIONER LANGFORD: Do you see, in general terms, your expenses going up perhaps for program purchases? Taking on this new and large competitor, do you them going up, do you see your revenues coming down?
LISTNUM 1 \l 13203 I am trying to get a sense ‑‑ I mean you filed some figures with us and they are interesting figures but I have no way of knowing and perhaps you don't either but you are the experienced broadcasters. We are just meddlesome regulators, as you continually tell us.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13204 COMMISSIONER LANGFORD: So what do you see just in general narrative terms in the sense of what happens to what you have filed with us? I am sure it was your best guess when you filed it. I am not in any way trying to poke holes in what is in this book but what I am trying to figure out is where it goes should this new entity, at least in these markets, come to pass?
LISTNUM 1 \l 13205 MS BELL: I wanted to make one clarification, Commissioner Langford.
LISTNUM 1 \l 13206 When you said that if the Commission approved the BGM/CHUM deal, they have two and you have two. Technically, yes, except we would have two more signals in each of ‑‑ or one more signal in each of Calgary and Edmonton. We are not establishing new local television stations and we would not be getting any local advertising revenues from those transmitters and that would be a big difference between us and ‑‑
LISTNUM 1 \l 13207 COMMISSIONER LANGFORD: I know the differences, what I am trying to figure out is the impact on the revenues you do anticipate getting.
LISTNUM 1 \l 13208 You anticipate getting some substantially more national advertising revenues; am I not correct?
LISTNUM 1 \l 13209 MS BELL: Yes, we are.
LISTNUM 1 \l 13210 COMMISSIONER LANGFORD: If you are successful here today. So will those numbers go down and will your expenses go up if you are facing this new competitor? What is your view? I don't ask you for numbers but I do ask you for trends, impacts.
LISTNUM 1 \l 13211 MS DORE: I think that certainly, programming cost increases are a concern in the new world that you identify and we would anticipate and make some prediction that there will be programming cost increases. I would not anticipate a dramatic shift in terms of our revenue projections as they apply to this particular market in this particular applications.
LISTNUM 1 \l 13212 MS WILLIAMS: I would only add to that that if that concern of rising programming costs were to come true, it would become increasingly important for us to be able to simulcast those program rights in Alberta in order to compete successfully on the revenue side of those program costs.
LISTNUM 1 \l 13213 COMMISSIONER LANGFORD: Well that is a good ‑‑ did you want to add something?
LISTNUM 1 \l 13214 MS WILLIAMS: It is just a further indication of what the key difference is between potentially CTV having two in one market and us having two in one market.
LISTNUM 1 \l 13215 COMMISSIONER LANGFORD: That is certainly what I am driving at.
LISTNUM 1 \l 13216 MS WILLIAMS: Yes. I mean the two ‑‑ it is very different once you take into account simulcast and local revenue, and if our second station didn't have simulcast and wasn't accessing local revenue, then it is not an apples‑to‑apples at all of us having two and them having two. We would be at a significant disadvantage from that perspective.
LISTNUM 1 \l 13217 COMMISSIONER LANGFORD: Well that shows why I am not in television because your answers surprise me, actually. I am pleasantly surprised but I would have thought that you would have been saying the impact would be much higher, for some reason, that you have this organized twin stick going up against you and you would have yours in there as well but it is a fairly large force.
LISTNUM 1 \l 13218 But you are telling me here today that the impact on revenues shouldn't change, that the plan you have put in front of us is pretty well solid. That is interesting to me and I am grateful for the answer.
LISTNUM 1 \l 13219 MS DORE: I think just to clarify Barb's point, were we not to get approval of this application, then I think the revenue situation deteriorates pretty dramatically from what it is currently.
LISTNUM 1 \l 13220 COMMISSIONER LANGFORD: I understand that. Just one more area. I am sorry to prolong this.
LISTNUM 1 \l 13221 MR. SCHMIDT: Commissioner Langford, if I can just maybe add a little something there.
LISTNUM 1 \l 13222 COMMISSIONER LANGFORD: Absolutely.
LISTNUM 1 \l 13223 MR. SCHMIDT: Certainly, if the CHUM/CTV Globemedia deal goes through, certainly it provides CHUM with the opportunity, I think, for better program buying opportunities and certainly that would add to the current problems that we have in the Red Deer market itself, along with what it could possibly do in Calgary in Edmonton.
LISTNUM 1 \l 13224 But currently, all of those stations are available off air, on cable, and most of them on satellite in the Red Deer marketplace. So if you saw CHUM become a stronger signal in the Red Deer marketplace, CTV is currently selling local advertising against us in the marketplace and I could see City starting to do that as well.
LISTNUM 1 \l 13225 So it could certainly hurt us there and I think there would be some impact here in Edmonton and Calgary as well, especially if we remained a distant signal.
LISTNUM 1 \l 13226 COMMISSIONER LANGFORD: I must say I expected more of that type of answer. I wasn't trying to encourage it. I am glad to have your answers from all of you and I am interested in them.
LISTNUM 1 \l 13227 But I think from my point of view anyway ‑‑ I can't speak for my colleagues ‑‑ it is important for us to have an understanding of your reaction. It is important for me to have an understanding of your reaction to how this market may change.
LISTNUM 1 \l 13228 It is not speculative anymore. I mean there is an actual possibility that there may be a significant change and it is interesting to me to hear you react to that and to hear how it might impact on what you have filed in front of us.
LISTNUM 1 \l 13229 MS BELL: Just one point on that and Kathy alluded to it. We filed this irrespective of the fact that this other transaction is before you. We filed this because it is necessary for us to do this and we filed this application in 2003.
LISTNUM 1 \l 13230 So regardless of what happens on this other transaction, that may be something that we have to deal with down the road and we will have to deal with it as it comes, but this is important regardless of what happens with that other transaction.
LISTNUM 1 \l 13231 COMMISSIONER LANGFORD: Oh, I have no doubt of that. I think you have made that lucidly clear.
LISTNUM 1 \l 13232 Just one other area of questioning. I thought your answer to Commissioner Williams on the notion of the focus of this channel, these stations was just a little vague for me. Sometimes I need clearer words.
LISTNUM 1 \l 13233 When I look at the language that you use with regard to the focus of this thing, you talk about how you are dedicated to local news and local issues and you talk about your 9 hours and 45 minutes of local Red Deer news but you also talk about keeping your focus on central Alberta.
LISTNUM 1 \l 13234 And then when you were asked if you would accept some sort of COL to kind of quantify that to ensure that this sort of focus would continue, you spoke about an upcoming licence renewal and how that might be a more appropriate time. That confuses me, frankly. It confuses me a little bit. I don't want to be difficult but it confuses me.
LISTNUM 1 \l 13235 I don't understand why we couldn't figure out a way to establish what the focus of this service would be once ‑‑ assuming we accept your application and we give you the rebroads that you seek and the opportunities you seek to grow your revenues, clearly, we want to keep something for Red Deer here. So I just don't quite understand why you can't go a little farther than wait for the licence renewal in 18 months.
LISTNUM 1 \l 13236 What could we structure here? Help us out. I mean what can we structure? Give us something that we can hang on you as a COL that you can live with for the next 18 months.
LISTNUM 1 \l 13237 MS BELL: You really want a COL, don't you?
LISTNUM 1 \l 13238 COMMISSIONER LANGFORD: I love COLs because they are so clear and it gives our counsel things to do.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13239 COMMISSIONER LANGFORD: Sometimes he gets so bored.
LISTNUM 1 \l 13240 MS BELL: It gives me something to do too.
LISTNUM 1 \l 13241 COMMISSIONER LANGFORD: Excellent. So write us up a COL. What can we do here?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13242 MS BELL: We could propose something and file it with you a little later but just to be very clear, I think when we were talking about COLs and our licence renewal I was specifically referring to the COL on the amount of hours that we were committed to doing, I was not referring to the orientation of the programming. If the Commission would like, we can file something with you.
LISTNUM 1 \l 13243 COMMISSIONER LANGFORD: Okay, well let's just talk about it for a couple more minutes before you start writing.
LISTNUM 1 \l 13244 MS BELL: Let's.
LISTNUM 1 \l 13245 COMMISSIONER LANGFORD: Okay.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13246 COMMISSIONER LANGFORD: I can just see the news in the Calgary Herald saying, Ottawa meddlesome regulator doesn't know where our two biggest cities are, but I will take a chance.
LISTNUM 1 \l 13247 You speak of central Alberta, your focus on central Alberta. Would you say that Calgary and Edmonton are in central Alberta?
LISTNUM 1 \l 13248 MR. SCHMIDT: Mr. Commissioner, absolutely not. The central Alberta corridor has a population, according to BBM, of approximately 223,000 people. So it goes from Red Deer to Wetaskiwin in the north, which is quite a ways from Edmonton, and goes to an area of around Innisfail, Bowden, which is not near close to Calgary, and then of course we go to west and east of the city of Red Deer as well.
LISTNUM 1 \l 13249 In fact, we do have a coverage map that we could leave with you.
LISTNUM 1 \l 13250 COMMISSIONER LANGFORD: You might want to stick that on the back of your COL ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13251 COMMISSIONER LANGFORD: ‑‑ because what I am going to suggest here now is that I ‑‑ and I am grateful for that answer and I am willing to take my chances with Frank magazine and my knowledge of geography.
LISTNUM 1 \l 13252 What I am going to suggest when you are crafting this COL is that you recollect what has just been described as central Alberta to help us people and that you recollect your continued commitment to Red Deer and what you are doing there now. And then we will leave it to you. And when can we expect this purple prose?
LISTNUM 1 \l 13253 MS BELL: I would think after the lunch break.
LISTNUM 1 \l 13254 COMMISSIONER LANGFORD: That is excellent. I absolutely know I will have no heartburn thinking of that.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13255 COMMISSIONER LANGFORD: Those are my questions, Mr. Chairman.
LISTNUM 1 \l 13256 THE CHAIRPERSON: Thank you, Commissioner Langford.
LISTNUM 1 \l 13257 I will continue on Commissioner Langford's line of questions.
LISTNUM 1 \l 13258 You describe the Red Deer station as a station that serves the agricultural community in central Alberta but if we were to approve your plan, you will be generating over $100 million over a seven‑year term from both Calgary and Edmonton.
LISTNUM 1 \l 13259 What do you bring to Calgarians or Edmontonians for $101 million other than investing $10.5 million into the Independent Production Fund?
LISTNUM 1 \l 13260 MS DORE: Well I think we are certainly bringing programming to that 10 percent of the population that doesn't subscribe to cable, satellite or other technology. We are bringing 8 hours per week of priority Canadian programming and we are ‑‑ in terms of having access to simulcast we are repatriating, certainly, some Canadian dollars to Canadian broadcasters.
LISTNUM 1 \l 13261 THE CHAIRPERSON: That I understand very well. That is your plan, to repatriate the money. I am asking you what do you bring and you said 8 hours of priority programming. I guess that if I am a cable subscriber in Calgary or Edmonton or a DTH subscriber, I am getting them anyhow through time‑shifting because one of your CH stations somewhere is carried by one of those BDUs.
LISTNUM 1 \l 13262 So the priority programming, I can get if I am a BDU subscriber; am I right or am I making a statement that doesn't stand?
LISTNUM 1 \l 13263 MS DORE: Yes, you could access that programming if you are time‑shifting on another station. I think perhaps it is a good idea to clarify a bit your $102 million estimate because all of that does not get taken out. That is a gross number, not a net number.
LISTNUM 1 \l 13264 I guess what I would say is the point you are making is certainly also true of the Edmonton signals that come into Red Deer and I guess my question would be what are the Red Deer citizens getting from CTV and CBC coming out of Edmonton?
LISTNUM 1 \l 13265 THE CHAIRPERSON: That is a fair question. I think that we will surely have to deal with it at the time of renewal. That is a fair question but my question now is to you because I have an opportunity to hear you. So what are you bringing to Calgarians and Edmontonians?
LISTNUM 1 \l 13266 MS WILLIAMS: Some others may want to add from the local perspective but I think the other things that we are bringing forward ‑‑ in addition to the production fund, which obviously will enhance Canadian programming across all of the services for viewers in Calgary and Edmonton, not only on ours but we are sharing that wealth, if you will, with our competitors in an effort to bring more and better Canadian programming to Calgarians and Edmontonians.
LISTNUM 1 \l 13267 But additionally, our commitments to the Aboriginal community, I think, are important to the extent that we can add to the coverage of those stories and those events and those issues and we can more proactively share their concerns and their perspectives with a larger group of people in Edmonton and Calgary, which we understand, you move a channel down the dial and more people access it more frequently and with more dedication.
LISTNUM 1 \l 13268 So the opportunity there as well is to continue to work at extending the stories and the issues of that community into markets that it is very relevant for. So all of our initiatives that way to support the Aboriginal community, I think, are additional important changes for those larger markets.
LISTNUM 1 \l 13269 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 13270 I will ask Commissioner Cram.
LISTNUM 1 \l 13271 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 13272 I will just keep moving on that, Ms Williams, because I wasn't entirely sure when you were replacing "SHOUT" what you were going to do. So if I can take you to page 12, the first part, the first paragraph:
"As part of this commitment we will increase our financial participation towards the production of this program and will air it on Global and CH."
LISTNUM 1 \l 13273 How much?
LISTNUM 1 \l 13274 MS WILLIAMS: Actually, we have been in conversation with Roberta Jamieson who heads up the Aboriginal Achievement Awards about that because we wanted to be sure that we could put something substantial forward to them that would make a real difference to their ability to produce a quality program for the country. So we are talking to them about doubling the commitment that we have made in the past year to them on a go‑forward basis.
LISTNUM 1 \l 13275 COMMISSIONER CRAM: What was your commitment?
LISTNUM 1 \l 13276 MS WILLIAMS: It was $50,000 this year. We would double that to $100,000 for the next three years, each of three years.
LISTNUM 1 \l 13277 COMMISSIONER CRAM: And that is acceptable to you that we would write the CTD as that?
LISTNUM 1 \l 13278 MS WILLIAMS: Mm‑hmm.
LISTNUM 1 \l 13279 COMMISSIONER CRAM: Okay. Next, you would produce and air a series of vignettes. How many?
LISTNUM 1 \l 13280 MS WILLIAMS: It would depend on how many winners there were. The idea here is to take the number of winners, which I think roughly 12 to 14 has been our experience in the last couple of years, and do a profile vignette on each of them. So however many there were in the awards and, as I say, do a profile vignette on each which we would then broadcast ourselves as well as share for others to broadcast.
LISTNUM 1 \l 13281 COMMISSIONER CRAM: So the CTD would be written that you would produce and air vignettes on each award‑winner in these awards. The vignettes to be how long, 30 seconds?
LISTNUM 1 \l 13282 MS WILLIAMS: No, I would think more likely to be between a minute and two minutes in order to substantially tell a story.
LISTNUM 1 \l 13283 COMMISSIONER CRAM: So the CTD would read vignettes to be in between one and two minutes long?
LISTNUM 1 \l 13284 MS WILLIAMS: Yes.
LISTNUM 1 \l 13285 COMMISSIONER CRAM: Okay. Then I didn't understand the last paragraph on page 15 of your oral presentation:
"While we had originally planned to..."
LISTNUM 1 \l 13286 Oh, now I understand. Initially the funds were going to be only for your CH stations, now they are available for every broadcaster?
LISTNUM 1 \l 13287 MS WILLIAMS: That is correct.
LISTNUM 1 \l 13288 COMMISSIONER CRAM: Okay. You said, Ms Bell, that Rogers underestimates their potential revenue and you think channel m overestimates. There is the controversy of the 30 percent discount that you, of course, heard going through here.
LISTNUM 1 \l 13289 Is there a 30 percent discount at CJNT in Montreal?
LISTNUM 1 \l 13290 MS BELL: Brett will answer that.
LISTNUM 1 \l 13291 MR. MANLOVE: The answer to that would be no. We manage our rates to our audience performance and compete with that market, as we do with all the stations, and no, we don't discount.
LISTNUM 1 \l 13292 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 13293 MS BELL: But it is not a new station coming on either.
LISTNUM 1 \l 13294 COMMISSIONER CRAM: That is true.
LISTNUM 1 \l 13295 MS BELL: I think that is a clarification.
LISTNUM 1 \l 13296 COMMISSIONER CRAM: You have been around for ‑‑
LISTNUM 1 \l 13297 MS BELL: Many years.
LISTNUM 1 \l 13298 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 13299 I was listening to your discussion with Commissioner Langford about CTV having a twin stick and that it really wasn't going to impact you in terms of revenue, operation costs. Why then would the ethnic stations impact on you? Is it their national revenue?
LISTNUM 1 \l 13300 MS DORE: They are new to the market and inherent in my comments on CTV and CHUM was certainly that the overall performance of their programming doesn't increase and ours does, and that is certainly a subjective judgment, but they are in the market and not new to the market, so they are not taking dollars out that ‑‑
LISTNUM 1 \l 13301 COMMISSIONER CRAM: Yes, but you are not going to take any local sales, so it would really be the national advertising in that market?
LISTNUM 1 \l 13302 MS DORE: That is correct.
LISTNUM 1 \l 13303 COMMISSIONER CRAM: And you don't think the growth of the market is sufficient to cover an ethnic station and yourselves?
LISTNUM 1 \l 13304 MS DORE: We don't believe that the growth of the market will fully cover even what we would take, as you can tell by our projections. So certainly not two.
LISTNUM 1 \l 13305 COMMISSIONER CRAM: Okay. Now my last question is that inherent in this system, and as my colleagues in the majority said in the DTH decision, the big guys have got lots of stations and profitable markets and so they can afford to subsidize the smaller markets, it is the independent smaller markets that we should be worrying about.
LISTNUM 1 \l 13306 If I look at potential for Global coming down the pipe, you might also have the potential for cross‑subsidization from an animal called Alliance Atlantis and their wonderful PBITs.
LISTNUM 1 \l 13307 So at what point do we say that the original plan on conventionals, conventional cross‑subsidization from the large to the small, and the new plan of specialty cross‑subsidization to conventional, at what point do we say the cross‑subsidization is too much?
LISTNUM 1 \l 13308 You know, losing $1.7 million since 2001, well you probably picked up a fair chunk of change in Toronto, Chuck and Chan or what used to Chuck and Chan in Vancouver. So what is wrong with subsidizing? Isn't this what local service is about and being a network and providing local service to people?
LISTNUM 1 \l 13309 MS DORE: I think it is certainly a matter of opinion. What I believe is that any small station that can't see any path to break even or profitability is a good place to start in terms of when cross‑subsidization isn't enough.
LISTNUM 1 \l 13310 Also, I would say that in a sense, given all the conversation that we have just had, that we are asking for an even playing field in the conventional space with our primary competitors and no more and no less than that.
LISTNUM 1 \l 13311 So although those are, again, subjective opinions in terms of what is enough and what is too much, I think given the information that we have provided in the application and in our answers here today that we really do believe that this does not give us a significant competitive advantage in the Alberta market but it makes our Red Deer station viable.
LISTNUM 1 \l 13312 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 13313 Thank you, Mr. Chair.
LISTNUM 1 \l 13314 MS McGINLEY: Excuse me. May I just add that you had mentioned $1.7 million. We have lost in excess of $1.7 million per year. So that is annual, not over the seven years.
LISTNUM 1 \l 13315 COMMISSIONER CRAM: Okay, I am sorry.
LISTNUM 1 \l 13316 MS McGINLEY: And one other clarification. With respect to what are we providing for Edmonton and Calgary, I think we shouldn't forget that we also provide programming diversity for the 10 percent of residents in Calgary and Edmonton who do not subscribe to cable, satellite or other technology. So we are providing another viewing option.
LISTNUM 1 \l 13317 MR. SCHMIDT: Also, Commissioner Cram, when Commissioner Langford asked the question of what would happen if we didn't get these licences and Ms Dore said that we would have to reevaluate that situation as to what we would do, I guess it is very similar, yes, CanWest is a very big company ‑‑ it is very much similar though, the way I look at it, to someone like the Hudson Bay Company that has been around for well over 100 years.
LISTNUM 1 \l 13318 When I lived in Prince Albert we used to have a Hudson Bay Store there. When it came to the point where it wasn't a profitable enterprise anymore, it doesn't matter how big the company is, and yes, you have got 10 big stores in Toronto, they closed the Prince Albert store down and the staff lost their positions.
LISTNUM 1 \l 13319 I am not saying that would happen here but certainly it is something that you would have to have a look at.
LISTNUM 1 \l 13320 COMMISSIONER CRAM: Mr. Schmidt, I agree with you. My colleagues in the majority don't in the DTH decision, that is all.
LISTNUM 1 \l 13321 MS WILLIAMS: If I could just add one thought and that would just be that one of the ways that we can continue to take advantage of the fact that we are a big company in an effort to help support the smaller market stations is by being sure that when we invest in those national program rights we have the opportunity to monetize them with simultaneous substitution, which is also one of the sort of underlying understandings of the way the business works in Canada.
LISTNUM 1 \l 13322 So it is a great way for us to be able as a larger company to take advantage of what we can do in order to support those smaller stations. So simulcast is a key part of this story, I think.
LISTNUM 1 \l 13323 COMMISSIONER CRAM: Thank you, Mr. Chair.
LISTNUM 1 \l 13324 THE CHAIRPERSON: Thank you, Commissioner Cram.
LISTNUM 1 \l 13325 We asked all the other applicants if their applications were severable. So what are your views on the severability of your two applications?
LISTNUM 1 \l 13326 MS BELL: I think we may have a different view than some of the other applicants. Our programming enhancements and other enhancements and our financial projections are based on obtaining approval for both transmitters.
LISTNUM 1 \l 13327 There is also a practical reason in terms of how advertising is bought in Alberta.
LISTNUM 1 \l 13328 I will ask Brett Manlove to provide some background in terms of why it would be an issue for us to sever the applications from that standpoint.
LISTNUM 1 \l 13329 MR. MANLOVE: Thank you, Charlotte.
LISTNUM 1 \l 13330 The business model as it is applied by our national advertisers, which would be the entire stream that we would be looking at, there are very few exceptions to where only one of the cities is purchased versus two. I think when Alberta is bought it is 99 percent of the time looked upon as Calgary and Edmonton.
LISTNUM 1 \l 13331 It is very, very difficult for us to ‑‑ in fact, it was almost impossible. We found only one exception to where the two cities were not purchased together when buying Alberta. So that would lead us to that ‑‑
LISTNUM 1 \l 13332 THE CHAIRPERSON: I will go with the usual wisdom of the Commission and I will make you an assumption and please comment on that.
LISTNUM 1 \l 13333 What will happen to your Red Deer station if the Commission was to say no for Calgary and yes for Edmonton? Will you be able to repatriate as much as you are expecting from the Spokane stations?
LISTNUM 1 \l 13334 MR. MANLOVE: Well, I will jump in. There would be some math we would have to do. As Charlotte mentioned, our application is entirely based on the two and by not being able to offer the two, there is a pro rata loss that we will get by just being able to offer one.
LISTNUM 1 \l 13335 So although there will be some revenues gained, they will be measurably less than the division of the two, if that makes sense. Clearly, Calgary or Edmonton would be much less and in fact in most cases would fall off the map in terms of being purchased.
LISTNUM 1 \l 13336 MS BELL: I think the other point to make here is that we are not applying for local stations and because we wouldn't be drawing any local ads, it would put us in a precarious situation, I think. I don't think it would ‑‑ I don't think the revenue addition from getting only one of the two transmitters, given the situation with the national advertisers in Alberta, would be as helpful as one might think.
LISTNUM 1 \l 13337 THE CHAIRPERSON: I understand that you are not eligible for the CAB small market fund but if that fund was extended to include markets such as Red Deer, could it become an alternative for you to licensing you in rebroad in Calgary and Edmonton?
LISTNUM 1 \l 13338 MS BELL: As we mentioned earlier, I mean does it help? Every little bit helps. However, it doesn't address some of the bigger issues that we have and Red Deer, as we mentioned earlier, is part of the CH stream of stations and because it is part of a large station group it has higher commitments. It has higher local commitments but it also has priority commitments and we have to find a way to be able to fund that.
LISTNUM 1 \l 13339 Commissioner Cram, we were talking about the fact that you might be losing money in Red Deer but you have stations in Toronto. I would invite you to look at the annual returns that we have filed the last couple of years for our other CH stations in larger markets and take a look at those losses.
LISTNUM 1 \l 13340 So there is a bigger picture here than just the local market and I think that small market fund was created for independent small market stations that weren't affiliated to large groups and specifically dedicated for them to be able to produce local programming. I think the issues that we are facing are a little larger than that.
LISTNUM 1 \l 13341 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 13342 Well now you have 10 minutes ‑‑ not 10 minutes ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 13343 THE CHAIRPERSON: ‑‑ two minutes to sum up your presentation and tell us really why we should grant you the licences that you have asked for.
LISTNUM 1 \l 13344 MS DORE: Thank you.
LISTNUM 1 \l 13345 Well first of all, you have heard Stan and Chris discuss the quality of service that CHCA has provided to central Alberta for the past 50 years as well as the ongoing financial difficulty that challenges that station and the CH brand across the country.
LISTNUM 1 \l 13346 We believe that the proposal we have put forward causes minimal disruption to Calgary and Edmonton by our refraining from accessing local advertising there.
LISTNUM 1 \l 13347 At the same time it provides programming diversity to residents of Calgary and Edmonton who don't subscribe to cable, satellite or other technology.
LISTNUM 1 \l 13348 In addition, the commitments we are making to the independent production community and to the Aboriginal community are significant.
LISTNUM 1 \l 13349 While we have not opposed the religious station applications, we have expressed concern about the ethnic station applications and we would urge the Commission to make the existing problems faced by CHCA its first priority in this licensing process.
LISTNUM 1 \l 13350 CHCA has much higher commitments to the system than independent small market stations and we believe that this is appropriate given its position as part of a large station group but we want to be able to continue the tradition of high quality programming that has defined CHCA and our other CH stations for decades.
LISTNUM 1 \l 13351 Approval of this application is the most effective means to reach that goal for us and for the system.
LISTNUM 1 \l 13352 Thank you for your time.
LISTNUM 1 \l 13353 THE CHAIRPERSON: Thank you very much. Thank you, Mrs. Dore, Mrs. Bell, Mrs. Williams, Mr. Schmidt and all your team for this presentation.
LISTNUM 1 \l 13354 This is the end of Phase I. We will begin Phase II after lunch.
LISTNUM 1 \l 13355 Applicants that wish not to appear at Phase II shall meet with the Secretary of the hearing and inform her.
LISTNUM 1 \l 13356 We will come back at 2:00. So we will adjourn for lunch and we will back at 2:00.
‑‑‑ Upon recessing at 1250 / Suspension à 1250
‑‑‑ Upon resuming at 1608 / Reprise à 1608
LISTNUM 1 \l 13357 THE CHAIRPERSON: I have to apologize for being late, but there are too many events occurring all at the same time. But we are now moving with Phase II of this proceeding.
LISTNUM 1 \l 13358 I want to say to all the interveners that the Commission not always has questions after the intervention, it is because when the intervention is clear then there is no need to have further discussion. We, generally speaking, do not have questions, but we surely are recording what you say and it is part of the public record. It is not because we haven't asked questions that we are not giving it serious consideration.
LISTNUM 1 \l 13359 Ms Secretary.
LISTNUM 1 \l 13360 THE SECRETARY: I would just start with reminding everybody to please turn off your cell phones, beepers, blackberries and other text messaging devices as they are an unwelcome distraction for participants and commissioners and they cause interference on the internal communication system used by our translators.
LISTNUM 1 \l 13361 We have now reached Phase II in which applicants appear in the same order to intervene on competing applications if they wish.
LISTNUM 1 \l 13362 The Miracle Channel Association and CanWest MediaWorks have indicated that they will not appear in Phase II. Therefore, Crossroads Television System will intervene on the competing application. You have 10 minutes to make your presentation.
LISTNUM 1 \l 13363 MR. GRAY: Thank you. Chairman and members of the Commission, we wish to respond to comments made during the presentation yesterday and questioning in the competing application. And I am asking our Chairman, Fred Vanstone, to respond.
LISTNUM 1 \l 13364 MR. VANSTONE: Mr. Chairman, we believe it is necessary for us to respond to the doom and gloom scenario painted by The Miracle Channel with respect to the potential Commission decisions on our applications to operate English‑language religious television program undertakings in Calgary and in Edmonton.
LISTNUM 1 \l 13365 While the applications are being heard together, it is important to keep in mind we are talking about applications for each of Canada's fourth and fifth largest cities.
LISTNUM 1 \l 13366 It is difficult to understand how CTS, who doesn't receive any donations in any scenario, could create a major threat to the base of support for The Miracle Channel in these markets. These are markets that neither CTS nor The Miracle Channel currently serve other than on DTH.
LISTNUM 1 \l 13367 It is difficult to understand how Miracle Channel's current sale of time to broadcast ministries will be adversely affected by decisions concerning markets they don't currently serve. It is difficult to understand their quote, and I do quote:
"Even worse, The Miracle Channel will stand to lose the many viewers and supporters who rely upon satellite and streaming video on the internet to receive The Miracle Channel." (As Read)
LISTNUM 1 \l 13368 That suggests all the DTH viewers and internet followers of The Miracle Channel reside in Calgary and Edmonton. This defies logic, particularly at a time when The Miracle Channel is purchasing increased signal distribution outside their broadcast area, even outside the country. We support The Miracle Channel's ministry. We do not support The Miracle Channel's assertions and arguments.
LISTNUM 1 \l 13369 CTS has not applied for and does not intend to compete with The Miracle Channel in its licensed Lethbridge, Alberta market. In fact, CTS has provided, with Miracle Channel's endorsement, the inclusion of Miracle Channel's two flagship programs in our schedule should we be licensed for Calgary and Edmonton.
LISTNUM 1 \l 13370 What we are discussing at this hearing is the need and who is best able to provide a 24/7 religious broadcast undertaking to serve each of Calgary and Edmonton. With these applications before you, you were provided with two very distinctive models. They are distinctive in three ways. A local station with local programming commitments or a rebroadcast of a distant signal. Number two, a commercial religious television undertaking funded by airtime sales to religious broadcasters and the sale of commercials or a donation‑based fundraiser devoting a significant portion of its income to expanding the distribution of its service outside its local market. And number three, two very different perspectives of the Commission's definition of balanced program obligations of conventional licensed religious broadcasters.
LISTNUM 1 \l 13371 We then come to the reasons for the application. We believe that as Canada's fourth and fifth largest cities these communities are underserved with respect to faith‑based broadcast services. With a rapidly growing population and diminished primetime religious program offerings from VisionTV ‑‑
LISTNUM 1 \l 13372 THE CHAIRPERSON: I apologize, Mr. Vanstone, but I think you are going a step forward. This section of your presentation shall surely go at Phase IV, when you will have an opportunity to rebut everything that has been said against your application.
LISTNUM 1 \l 13373 MR. VANSTONE: Thank you, Mr. Chairman. May I just make one further comment then?
LISTNUM 1 \l 13374 Not to be overlooked, it is important to clarify a quote attributed to us by The Miracle Channel with regard to our preference for re‑broadcasters in Ontario. CTS was successful in gaining rebroads in Ottawa and London only after it was proven no local religious broadcaster was coming forward. In the current circumstances we are the first in coming forward with a local service application.
LISTNUM 1 \l 13375 Thank you, Mr. Chairman.
LISTNUM 1 \l 13376 THE CHAIRPERSON: Thank you, Mr. Gray. Thank you, Mr. Vanstone.
LISTNUM 1 \l 13377 Ms Secretary, the next applicant.
LISTNUM 1 \l 13378 THE SECRETARY: I will now ask Rogers Broadcasting Limited to intervene on the competing application.
LISTNUM 1 \l 13379 Please reintroduce yourself for the record. You have 10 minutes to make your presentation.
LISTNUM 1 \l 13380 MR. STRATI: Good afternoon, Mr. Chair, members of the Commission.
LISTNUM 1 \l 13381 I am Alain Strati, Vice‑President, Regulatory and Business Affairs for Rogers Media. To my right, to your left, is Leslie Sole, CEO, Rogers Media Television; then Madeline Ziniak, Vice‑President, General Manager for OMNI Television; and Malcolm Dunlop, Vice‑President, Programming and Marketing. We also have David Campbell, President of Media Buying Services.
LISTNUM 1 \l 13382 MR. SOLE: I have not read this prior. Mr. Strati just lost his voice and asked me to read this.
LISTNUM 1 \l 13383 As part of the written phase of the public hearing process, we filed a detailed intervention requesting clarification about errors we thought channel m had made in the calculation of their revenue projections.
LISTNUM 1 \l 13384 In this phase of the intervention process we would like to further comment on revenue projection issues as well as a number of other flaws we seen in channel m's proposal.
LISTNUM 1 \l 13385 Our intervention will focus on four key issues: programming, revenue projections, tangible benefits and conditions of license. First, dealing with the programming. channel m claims to separate and distinct stations for Calgary and Edmonton. In reality, the proposed programming schedules for the two markets are almost identical.
LISTNUM 1 \l 13386 In addition to a few hours of programming, the main area where there is a difference is with respect to news. Here their proposal shows a real misunderstanding of the local markets. They propose to air Mandarin news in Edmonton only and Cantonese news in Calgary only. Similarly, they propose to air Hindi news in Edmonton and Punjabi news in Calgary. These decisions needlessly deprive the Cantonese and Punjabi language communities in Edmonton and deprive the Mandarin and Hindi language communities in Calgary from seeing their valuable news programming on a regular basis.
LISTNUM 1 \l 13387 This mistake is all the more telling because of the high level of interest that language communities in each city have in news and the events and the happenings in their cities and in the province.
LISTNUM 1 \l 13388 Revenue forecast. We would like to return to the revenue forecast by channel m. Their own expert, Deloitte & Touche, states that news stations and ethnic stations have a discounted cost per rating point. The Deloitte report recommends that channel m should count on a cost per rating point, which is much lower than the market rate.
LISTNUM 1 \l 13389 In their presentation today channel m has not in anyway addressed those expert comments. They have not clarified why their revenue calculations did not use the cost per rating points stated in their own expert report.
LISTNUM 1 \l 13390 Furthermore, channel m denies that they forgot to deduct the 15 per cent agency commission. I assure you, Rogers is not a company that reviews government documents and applications looking for typos. When there is a financial document in front of us and it says gross or it says net, we are inclined to believe that word, we are in no way mischievous.
LISTNUM 1 \l 13391 If the actual revenues that channel m receives reflect the appropriate discount and agency fees, channel m will sustain very large losses over the course of the seven‑year license term.
LISTNUM 1 \l 13392 Conditions of license. Again, we remain confused about the makeup of the channel m programming in terms of what are the conditions of license. If an ethnic station commits 68 per cent to ethnic the language of the programming is irrelevant. Ethnic programming is ethnic programming and so is the origin of that programming irrelevant. What it means, to us at least, if 68 per cent is ethnic, then 32 per cent must be non‑ethnic.
LISTNUM 1 \l 13393 We have dealt with this subtraction for many years. U.S. programming has been traditionally defined by that which is left after your commitment to ethnic programming.
LISTNUM 1 \l 13394 Tangible benefits. Again, we only seek clarity. Public benefits should always be clear, unequivocal, incremental to the ordinary course of the television operation. They should be all of those things to your regular business expenditures. Again clear, unequivocal, separable and incremental. The wisdom of these principles derives from the transformational or the multiplier effect that they have on the system. They have to be outside of daily operations.
LISTNUM 1 \l 13395 The vast bulk of channel m's proposed benefits are neither clear, unequivocal or incremental to their ordinary course of spending. The only promise that seems to be unequivocal and incremental is the commitment of $900,000 to script development and scholarships. The remaining commitments may be used to subsidize their independent producers or to produce everyday run‑of‑the‑station programming.
LISTNUM 1 \l 13396 Independent producers are an essential part of channel m, in fact, our hybrid production model. Usually the independent producer produces a show at their cost, the station shares in the revenue and tries to decrease the risk for that producer. That is not unequivocal, incremental, but it is clear.
LISTNUM 1 \l 13397 channel m is proposing to subsidize their independent producers, but have made no commitment with respect to revenue sharing. It would be relatively straightforward if they wanted to recover the benefit by retaining a higher share, if not all, of the advertising revenues from any given independently‑produced program. In fact, they have included this spending as part of the normal operating expenditures. In their financial projections there is evidence that the spending is in fact not incremental.
LISTNUM 1 \l 13398 As one last point, our intervention was not in opposition to channel m, it was to seek clarification for today's proceeding.
LISTNUM 1 \l 13399 Thank you, Mr. Chair.
LISTNUM 1 \l 13400 THE CHAIRPERSON: Thank you, Mr. Sole, Mr. Strati, to your group, thank you very much.
LISTNUM 1 \l 13401 Ms Secretary.
LISTNUM 1 \l 13402 THE SECRETARY: I will now ask MVBC Holdings Limited to intervene on the competing application.
LISTNUM 1 \l 13403 Please reintroduce yourself for the record. You have 10 minutes to make your presentation.
LISTNUM 1 \l 13404 MR. REITMAYER: Thank you, Chairperson, members of the Commission panel.
LISTNUM 1 \l 13405 For the record, I am Art Reitmayer, President and Chief Executive Officer of channel m. With me are Peter Gillespie, channel m's Vice‑President of Operations and Bruce Hamlin, Vice‑President of Sales, sitting behind me is our legal counsel, Greg Kane, and Jeff Keeble, Senior Manager at Deloitte, Touche.
LISTNUM 1 \l 13406 I will respond to the issue Commissioner Cram raised at the end of this intervention, ethnic applications. We submit that Rogers' application should be denied for a number of reasons, including the fact that the proposed service is not responsive to the distinct multicultural communities in Edmonton and Calgary. A careful reading of the Rogers application will show that they are not proposing to offer local services in Edmonton and Calgary, but rather to provide an Alberta outlet for OMNI programming.
LISTNUM 1 \l 13407 Rogers sets this scene on the cover of their supplementary brief where we find the subheadings, OMNI Television Alberta and OMNI Television Ontario, rather than what would be more appropriate titles of OMNI Television Calgary and OMNI Television Edmonton.
LISTNUM 1 \l 13408 What is OMNI Alberta? Firstly, it is a regional, not a local, service. For example, on page 16 of OMNI's supplementary brief they describe their service as two separate stations with one programming schedule. They go on to say that their daily newscasts are to be produced only out of Edmonton, with no local news being produced in Calgary. There is no more important reflection of the local community than news programming. A news program produced in Edmonton for broadcast in both Edmonton and Calgary simply does not meet the high standard that the Commission should require for local expression.
LISTNUM 1 \l 13409 There is no other broadcaster licensed in this country which provides local news programming for one major city to serve yet another major city in a particular province. In fact, in the early 1990s the CBC in Alberta made an attempt to deliver its newscasts to the cities of Edmonton and Calgary from Calgary. This experiment was cancelled nearly as quickly as it was started due to the precipitous drop in ratings experienced in the Edmonton market and the lack of satisfaction expressed by the Calgary viewers.
LISTNUM 1 \l 13410 Suffice it to say, Rogers' overall programming philosophy follows this regional, all productions originating in Edmonton or Calgary will be broadcast in both markets. As Rogers has stated in its supplementary brief, the ethnic broadcasting policy requires the provision of programming services that reflects and serves the local community. Regional news and regional and national programming do not serve the needs of the local community.
LISTNUM 1 \l 13411 Secondly, it does not appear to us that OMNI is fulfilling the ethnic mandate for minimum hours of third‑language programming. It is somewhat confusing to calculate how many languages and indeed how many hours of language programming OMNI is proposing. For example, in the broadcasting notice for this hearing dated December 14, it states that as part of the service Rogers will direct programming to 25 ethnic groups in 19 languages. In OMNI's supplementary brief, however, they state they will serve 20 ethnic groups in at least 20 languages. Conversely, the detailed program schedules provided by Rogers with their application called for 20 ethnic groups and 19 languages, which includes English.
LISTNUM 1 \l 13412 Yesterday Rogers agreed to a COL of 20 and 20. We would point out that 20 languages includes English and is not all third language.
LISTNUM 1 \l 13413 Further, in regards to the number of hours of third‑language programming provided, and in question 7.7 in their application, Rogers states that they will provide a about 75 hours per week of ethnic programming, 50 of which will be available in "third language". This works out to approximately 40 per cent of their program schedule.
LISTNUM 1 \l 13414 In Schedule 7.1(8) however, Rogers demonstrates that 45 per cent of total programming will be provided in third language. While Rogers provides conflicting calculations, neither are above the requisite 50 per cent or 63 hours they must provide under the ethnic broadcasting policy.
LISTNUM 1 \l 13415 Thirdly, Rogers has demonstrated a lack of sensitivity to the ethnic communities in Edmonton and Calgary. This is confirmed both through the third‑language programming they propose to broadcast and through how they plan to form their advisory councils.
LISTNUM 1 \l 13416 Despite the prominence of German, Ukrainian and Polish communities in the markets Rogers' service to these groups is negligible. For any one of these significant communities they intend to broadcast only two hours of programming per week. This is astounding considering these language groups are the ethnic pioneers of the Alberta landscape and continue to be the most prominent.
LISTNUM 1 \l 13417 In regard to advisory boards, Rogers is proposing to utilize boards that are already in existence for their radio services. Rogers' radio stations in Calgary are not ethnic and, as such, the boards certainly wouldn't provide independent advice on ethnic television programming.
LISTNUM 1 \l 13418 Finally, it is difficult to determine if Rogers will be setting up separate advisory councils in Edmonton and Calgary at all.
LISTNUM 1 \l 13419 We also question a number of inconsistencies in their operational proposals. For example, from section 4.3 of Rogers' application we note that their studio in Edmonton will be larger than their studio in Calgary. At first glance it doesn't appear their capital model is in alignment with this. In section 6 of their application Rogers details that their capital spending will be the same in each location.
LISTNUM 1 \l 13420 However, up on closer examination of the financial assumptions submitted, we observe that Edmonton studios will be more capital intensive, as they have allocated $3.8 million in capital to Edmonton and only $1.9 million to Calgary, excluding transmission. This would seem to be consistent with their statements on page 16 and 17 of their supplementary brief that all OMNI newscasts will originate out of Edmonton.
LISTNUM 1 \l 13421