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                       SUBJECT / SUJET:


HELD AT:                TENUE À:

Conference Centre       Centre des conférences
Outaouais Room          Salle Outaouais
Place du Portage        Place du Portage
Phase IV                Phase IV
Hull, Quebec            Hull (Québec)

September 25, 1998      25 septembre 1998
                           Volume  3



Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.

                 Canadian Radio-television and
                 Telecommunications Commission

              Conseil de la radiodiffusion et des
                télécommunications canadiennes

                  Transcript / Transcription

              Public Hearing / Audience publique

              Canadian Television Policy Review /
               Examen des politiques du Conseil
             relatives à la télévision canadienne


Andrée Wylie            Chairperson / Présidente
                        Vice-Chairperson, Radio-
                        television / Vice-
                        présidente, Radiodiffusion
Joan Pennefather        Commissioner / Conseillère
Andrew Cardozo          Commissioner / Conseiller
Martha Wilson           Commissioner / Conseillère
David McKendry          Commissioner / Conseiller


Jean-Pierre Blais       Commission Counsel /
                        Avocat du Conseil
Margot Patterson        Articling Student /
Carole Bénard /         Secretaries/Secrétaires
Diane Santerre
Nick Ketchum            Hearing Manager / Gérant de

HELD AT:                TENUE À:

Conference Centre       Centre des conférences
Outaouais Room          Salle Outaouais
Place du Portage        Place du Portage
Phase IV                Phase IV
Hull, Quebec            Hull (Québec)

September 25, 1998      25 septembre 1998

                           Volume  3



Presentation by / Présentation par:

Saskatchewan Communications Network               623

ACCESS, Learning and Skills Television            650
of Alberta Limited

Télé-Québec                                       674

Friends of Canadian Broadcasting                  707

Council of Canadians                              758

Western International Communications Limited      786

Mr. Chris Stark                                   871

Association of Canadian Advertisers,              907
Canadian Media Director's Council and 
Institute of Canadian Advertising


                           Volume 1
           September 23, 1998 / Le 23 septembre 1998

Page    Line /  

 10     16      "Crop Four of"
                should read / devrait se lire
                "Crop for"

226      6      "your ship objectives"
                should read / devrait se lire
                "your viewership objectives"

229     20      "We have argued"
                should read / devrait se lire
                "MR. MILLER:  We have argued"

233     23      "l'histoire du côté"
                should read / devrait se lire
                "l'auditoire du côté"


 1                              Hull, Quebec / Hull (Québec)
 2     --- Upon resuming on Friday, September 25, 1998
 3         at 0905 / L'audience reprend le vendredi
 4         25 septembre 1998, à 0905
 5  2663                 THE CHAIRPERSON:  Madam Secretary,
 6     would you please invite the next participants.
 7  2664                 MS BÉNARD:  Thank you, Madam Chair.
 8  2665                 The first presentation this morning
 9     will be by Saskatchewan Communications Network and I
10     would ask Mr. Benning to introduce his colleague.
12  2666                 MR. BENNING:  Good morning.
13  2667                 My name is James Benning, and I am
14     the President and Chief Executive Officer of the
15     Saskatchewan Communications Network, Saskatchewan's
16     educational broadcaster.  With me today is Richard
17     Gustin, SCN's Executive Director of Programming.  We
18     would like to begin by thanking the Commission for
19     providing the opportunity for SCN to speak to issues
20     concerning the Canadian television broadcasting system.
21  2668                 Television is undergoing a sustained
22     period of great change and growth in Canada.  Not that
23     long ago there were only two or three television
24     stations available in most communities, and now
25     Canadians have so many choices they need "packages" to


 1     keep the numbers of channels to a manageable size.
 2  2669                 Television has become a big business. 
 3     Thousands of Canadians earn their living in television
 4     and Canada has become the second-largest exporter of
 5     television programming.
 6  2670                 SCN is not opposed to people earning
 7     a living or making a profit in the television business. 
 8     However, in the current Canadian television system, the
 9     opportunity for profit has eclipsed the need for public
10     service.  SCN would like to see a system that reflects
11     the vision set out in the Broadcasting Act, and is able
12     to accommodate the needs of viewers to acquire
13     information about themselves, as well as having access
14     to an abundance of high quality made in Canada
15     entertainment.
16  2671                 In the old days, when there were only
17     two or three TV stations in a region, they all had a
18     daily talk show, with a title like "Around the Town"
19     which gave viewers a chance to see themselves and what
20     was going on around them.  Challenged by the CBC, which
21     was taking its public service mandate seriously,
22     broadcasters made an effort to tell us what was going
23     on in our lives.
24  2672                 This truth telling function validated
25     television.  Television became the box with a magic


 1     ability to make the world smaller and tell us stories. 
 2     Over time, the number of channels increased and so did
 3     the number of stories being told.  Most of these
 4     channels and stories were from someplace else.  Local
 5     broadcasters have been absorbed into national systems,
 6     and channels became focused on profitability.
 7  2673                 Saskatchewan has one of the most
 8     dispersed and lowest population densities in Canada. 
 9     It has long and harsh winters.  Community can be a
10     fragile thing when it's 40 below and town is miles
11     away.  Only now are many of Saskatchewan's residents
12     able to receive this television cornucopia via DTH
13     satellite and wireless cable.  What effect will this
14     bounty, which contains almost no Saskatchewan
15     information, have on these people and their sense of
16     community?
17  2674                 MR. GUSTIN:  SCN does not sell
18     advertising.  It does not exist to earn a profit for
19     its shareholders.  Using the cable and closed circuit
20     television networks, SCN strives to provide educational
21     and informational opportunities to the people of
22     Saskatchewan.
23  2675                 SCN is the only television station
24     serving the province which is controlled and scheduled
25     from within Saskatchewan.  SCN seems to be the only


 1     television broadcaster left with a mandate or interest
 2     in addressing the needs of Saskatchewan's viewers. 
 3     With the exception of local news, sports, and weather,
 4     and a couple of charity telethons, the CBC, CTV and
 5     CanWest Global produce almost no local or regional
 6     programming, informational or otherwise, in the
 7     province.
 8  2676                 In particular, SCN regrets cutbacks
 9     to the CBC and the effect this has had on regional
10     programming.  SCN believes that the CBC has a
11     responsibility to provide public information
12     programming throughout its area of service.  We are
13     impressed by the efforts of the CBC regional staff
14     that's left to do more with less, but the fact remains
15     that the Corporation, and the province's commercial
16     broadcasters have steadily reduced the level of service
17     provided.
18  2677                 If there is going to be a public
19     service component to the mix, which the Broadcasting
20     Act stipulates there should be, it is up to the
21     Commission to help create an environment where public
22     service broadcasters and programming have a place in
23     the Canadian broadcasting system.
24  2678                 MR. BENNING:  The majority of SCN's
25     less than $8 million budget comes from the provincial


 1     government.  With this budget, SCN delivers over 5,000
 2     hours of programming on the broadcast network and over
 3     3,000 hours of live televised, for-credit high school
 4     and post-secondary classes on our training network.
 5  2679                 SCN does no in-house program
 6     production, and is one of the leading supporters of the
 7     Saskatchewan and Canadian independent production
 8     industry.
 9  2680                 Saskatchewan has an active production
10     industry, but in order to sell to other markets, and to
11     attract production funds for tax credits, the product
12     must be generic enough to travel beyond the province's
13     borders.  We are proud of the success that these
14     programs have achieved.  This year Saskatchewan
15     productions licensed by SCN have been nominated for
16     Gemini Awards for Best Documentary and Best Children's
17     program or series.
18  2681                 MR. GUSTIN:  But there is a piece
19     missing.  Where is the programming on television which
20     is about us?
21  2682                 In its written submission, SCN
22     proposed that the program category "Regional
23     informational Program" be created and given special
24     status as an underrepresented program area, both in
25     terms of Canadian content rules and production fund


 1     eligibility.
 2  2683                 SCN would define a regional
 3     information program as any commissioned non-dramatic
 4     program or series which has as its primary purpose to
 5     inform rather than entertain.  It is a program whose
 6     target audience is located in a specific geographic
 7     area or region, and which would be of lesser use or
 8     interest to an audience outside the area.
 9  2684                 These programs at present do not
10     qualify for any of the production support systems in
11     place, and are paid for entirely by the broadcaster.
12  2685                 For example, SCN is currently
13     developing a series, which is targeted at Saskatchewan
14     students and their families.  The commissioned series
15     will provide information which helps students
16     understand, plan and make choices regarding their
17     future education and employment.
18  2686                 A regional broadcaster like SCN
19     should be commissioning such series on various issues. 
20     In addition to the education series, the network would
21     like to be able to develop a weekly public affairs
22     program, which in turn might be able to spin off other
23     programs on specific subjects, such as aboriginal,
24     seniors and health issues.
25  2687                 We believe that the Canadian


 1     broadcasting system has to meet a variety of needs as
 2     defined in the Broadcasting Act, not just the profit
 3     and return on investment requirements of commercial
 4     operators.  In its submission, SCN suggests that if
 5     this review is to truly consider the status of the
 6     Canadian broadcasting system, all sources of funding
 7     involved should be looked at.
 8  2688                 SCN suggested the creation of a
 9     production fund dedicated to regional information
10     programming needs.  The fund must have a way to ensure
11     that the regions with the greatest needs, low
12     population densities, and high costs of service per
13     unit of audience have a priority access.  The old
14     Department of Supply and Services fund, precursor of
15     the Canadian Independent Film and Video Fund, was an
16     excellent example of a program with good accessibility
17     to the country's regions.
18  2689                 We recommend that the relationship
19     between the contribution of the broadcaster and the
20     fund remains as it is with the present CTF, but that
21     the cap be raised to a maximum of 50 per cent of
22     budget.  SCN believes that such a fund should be
23     restricted to supporting commissioned programming
24     involving cash licenses, which would encourage the
25     broadcaster to work with the independent producers.


 1  2690                 The regional fund would not have to
 2     involve great sums of money.  For a broadcaster such
 3     SCN, an additional half a million dollars a year for
 4     regional programming would make a huge difference in
 5     our ability to address regional needs.
 6  2691                 MR. BENNING:  SCN must acknowledge
 7     the important role that the CTCPF and Shaw's Children's
 8     Fund have played in the development of the Saskatchewan
 9     production industry.  Programs with a "Made in
10     Saskatchewan" label are showing up in inventories
11     around the world.  And while we are proud of the
12     success stories of series like the "Incredible Story
13     Studio" and programs like "Dad," we still maintain that
14     there are other viewer needs that are not being
15     addressed.
16  2692                 Production funds and drop fees are
17     the result of funding redistribution schemes.  SCN
18     notes that specialty channels from TSN and MuchMusic,
19     to Newsworld and Vision get drop fees and would have a
20     very tough time surviving without them.
21  2693                 The recently announced Aboriginal
22     People's Television Network is requesting a 15 cent per
23     subscriber per month drop fee.  For any regional
24     broadcaster, a similar fee would have a substantial
25     impact.  The fee could be dedicated to regional


 1     information programming, and if this money were able to
 2     be matched by money from a regional production fund, an
 3     even greater programming impact could be made.  If, for
 4     public policy reasons, the CRTC is adverse to allowing
 5     public educational broadcasters drop fees, then some
 6     other method of adjustment should be considered.
 7                                                        0915
 8  2694                 In its submission, SCN raised the
 9     possibility of using Canadian content as a way of
10     encouraging regional programming.  SCN agrees with
11     other ATEC broadcasters and recommends that Canadian
12     documentaries in prime time be also accorded special
13     Canadian content status.
14  2695                 In conclusion, SCN would strongly
15     urge that the Commission reaffirm the role of public
16     and educational broadcasters and the importance of
17     regional and informational programming in the Canadian
18     broadcasting mix.  SCN has no desire to strike down or
19     to take away from the success of commercial
20     broadcasters, but would like to see the vision of the
21     Broadcasting Act made real, with room and opportunity
22     for regional, informational and educational voices to
23     take their place in the Canadian television
24     broadcasting system.
25  2696                 Thank you.


 1  2697                 THE CHAIRPERSON:  Thank you, Mr.
 2     Benning, Mr. Gustin.
 3  2698                 Commissioner Cardozo?
 4  2699                 COMMISSIONER CARDOZO:  Thanks, Madam
 5     Chair.
 6  2700                 Thanks very much for that
 7     presentation.  We also thank you for staying overnight
 8     from yesterday, although we heard your initial thoughts
 9     yesterday, I suppose, with ATEC.  Before we get to some
10     of the issues you have raised in terms of local
11     programming, I wonder if you could just give us a bit
12     more information about SCN and a bit more information
13     about the type of programming you have.
14  2701                 As I understand your licence and
15     mandate, you are licensed as a provincial educational
16     broadcaster and you also call yourself a publicly
17     funded regional alternative specialty service.  I have
18     to read that closely, but I understand the significance
19     of each one of those words.  You provide classes live
20     to post-secondary and high school classrooms, as well
21     as instruction to people in their homes directly.  Is
22     that a traditional academic style or is there also sort
23     of entertainment style education, the "Sesame Street"
24     sort of stuff?
25  2702                 MR. BENNING:  Just a little bit of


 1     background on how we operate, Mr. Commissioner.  SCN
 2     operates what we call our broadcast network, which is
 3     satellite-based.  It goes to all the cable companies in
 4     the province, all 260-odd cable companies in the
 5     province, and that has a mix of educational,
 6     informational children's programs.
 7  2703                 The second network that we operate
 8     and which you refer to which goes to the classrooms is
 9     closed and it goes to about 170 classrooms around the
10     province.  Its mandate is to provide live for credit
11     courses into those classrooms.  A portion of them are
12     high school classes, the larger portion are post-
13     secondary, either for credit university or for credit
14     technical courses.  Those are the 3,000 hours of
15     classes that we beam directly into the schools.  On our
16     broadcast network we provide daily two hours a day
17     during the school year support programs for the various
18     courses K to 12.
19  2704                 COMMISSIONER CARDOZO:  So, most of
20     these classes are -- where are they being shot, where
21     are they being filmed, in classrooms in educational
22     institutions?
23  2705                 MR. BENNING:  We have a number of
24     what we call studio classrooms around the province,
25     both in the two universities, in the Saskatchewan


 1     Institute of Science and Technology and also in two
 2     high schools.  Those classes originate from those
 3     studio classrooms.
 4  2706                 COMMISSIONER CARDOZO:  The first
 5     kind, the broadcast, where does that programming come
 6     from?  The first type of programming that you talked
 7     about on your broadcast service.
 8  2707                 MR. BENNING:  On the broadcast
 9     network?
10  2708                 COMMISSIONER CARDOZO:  Yes.
11  2709                 MR. BENNING:  Our headend is in
12     Saskatoon and the programs that we broadcast are
13     programs that we acquire either locally or nationally
14     or from international suppliers.  On that network we
15     produce virtually no programming ourselves.
16  2710                 COMMISSIONER CARDOZO:  Just to wrap
17     up this part of my questions, how much scope is there
18     for regional reflection within your network?
19  2711                 MR. BENNING:  In terms of regional
20     reflection, if one defines "regional" as Saskatchewan-
21     based, we produce or we acquire about 13 per cent of
22     the 5,000 hours a year is Saskatchewan-origin
23     programming.  Our goal is to reach 20 per cent of our
24     total program mix, Saskatchewan-based.  The chief
25     drawback at present is not the availability, but our


 1     ability to finance it.
 2  2712                 COMMISSIONER CARDOZO:  So, would you
 3     be of the opinion that you provide more Saskatchewan
 4     regional programming to the viewer than the other
 5     networks?
 6  2713                 MR. BENNING:  Yes, clearly so.
 7  2714                 COMMISSIONER CARDOZO:  You have
 8     titled your brief "Voices in the Wilderness", which is
 9     quite straightforward.  Are these voices in the
10     wilderness more a matter of news or entertainment?
11  2715                 MR. BENNING:  It's not so much news,
12     it's a matter of information, information about what is
13     going on, what the issues are in Saskatchewan.  One
14     must acknowledge that the other broadcasters do provide
15     local and provincial news from their stations, but in
16     terms of information programming, that is not being
17     done.
18  2716                 COMMISSIONER CARDOZO:  So, the news
19     you are saying is more or less satisfactory, the local
20     news that you get.  That would be on like the half-hour
21     news at the end of the national news hour.
22  2717                 MR. BENNING:  All three of the other
23     networks carry out that function, that's true, and we
24     have no desire to get into the news business, in
25     fairness.


 1  2718                 COMMISSIONER CARDOZO:  No, I
 2     understand that, but you are not asking them to do more
 3     in terms of news, either?
 4  2719                 MR. BENNING:  No.
 5  2720                 COMMISSIONER CARDOZO:  You have
 6     talked regional, informational programming and thanks
 7     for a bit more of the definition in your presentation
 8     this morning.  Why would you feel it important that
 9     such programming be commissioned as opposed to people
10     doing it on their own and coming and talking to you or
11     sending it in?
12  2721                 MR. GUSTIN:  I think there is a
13     couple of issues here.  First of all, by commissioning
14     this material, it allows us to encourage the
15     development of the local indigenous industry.  SCN has
16     no desire to become -- SCN does not have an edifice
17     complex.  We are not looking at building a large
18     organization.  We would much rather see a healthy,
19     vibrant production industry be developed in the
20     province.
21  2722                 COMMISSIONER CARDOZO:  So, what you
22     are talking about is the stuff being done independently
23     outside your --
24  2723                 MR. GUSTIN:  Exactly.
25  2724                 COMMISSIONER CARDOZO:  But it doesn't


 1     have to be commissioned -- if a producer came along
 2     with a great idea and presented it to you either before
 3     or after they had produced it, would you still be
 4     interested?
 5  2725                 MR. GUSTIN:  Oh, definitely so. 
 6     Since SCN began, we have been involved in over 350
 7     Saskatchewan productions, anything from short form to
 8     series and larger programs.  So, we are very active in
 9     that arena already.  What we would like to be able to
10     do, however, is commission programming on specific
11     issues that are focused on specific regional interests.
12  2726                 Most of the programming that we
13     participate in now has to find other participants so
14     that the producer will come to us.  We are often the
15     broadcaster that provides the development support and
16     then, as the project is developed, the producer will
17     then go to other broadcasters, be it the other
18     educational broadcasters, the specialty channels or
19     wherever, to find the rest of the financing.
20  2727                 What we are saying is -- and this is
21     a very good system.  We have no complaints about that. 
22     What our problem is is when we are looking at specific
23     issues that are specific to Saskatchewan that other
24     broadcasters are not interested in, that does not have
25     that ability to travel outside the province, those are


 1     still important issues and those are the areas that we
 2     really feel there is a need to be able to address.
 3                                                        0925
 4  2728                 COMMISSIONER CARDOZO:  Okay.  Let me
 5     just read you the sentence from your presentation
 6     today.  You say that, in terms of defining regional, it
 7     is a program whose audience is located in a specific
 8     geographic area, or region, and which would be of
 9     lesser use or interest to an audience outside the area.
10  2729                 One of the strengths I think of -- or
11     an argument can be made that one of the strengths of
12     having more regional programming in the system is that
13     people get a chance to learn about different regions. 
14     So you wouldn't want it to be of exclusive use.
15  2730                 This is just a bit of a conundrum as
16     to how you would deal with defining regional
17     programming.  Yes, you want it of a very local nature,
18     but, if you are saying that -- well, you are not quite
19     saying that, but if I sort of extend this from what you
20     are saying that it ought to be of no interest to other
21     people -- you don't want to go that far.
22  2731                 MR. GUSTIN:  There are a number of
23     issues that have that sort of nature.  Going to the
24     educational series that we have talked about, we are
25     particularly interested in focusing on issues about


 1     what happens when we have a rural student trying to
 2     make the transition to an urban learning situation. 
 3     The specifics of funding and education in
 4     Saskatchewan -- and every province has a different
 5     environment that learners have to work in.
 6  2732                 If we were to make a series like this
 7     so generic that it can travel across the country, we
 8     have lost our ability to deal with this, to try to
 9     inform the students and their families on the specifics
10     of getting continuing education in Saskatchewan, which
11     is the real issue that we are trying to address with
12     this series.
13  2733                 COMMISSIONER CARDOZO:  Okay.  In
14     terms of the recommendation that you made in your
15     written brief, the suggestion that 20 per cent of the
16     CTCPF, the CTF, be set aside for regional programming,
17     that would go with the kind of definition that you
18     defined, that you provided us with today?
19  2734                 MR. BENNING:  That is correct, yes.
20  2735                 COMMISSIONER CARDOZO:  On page 13 you
21     suggested that we give 150 per cent credit for Canadian
22     content and 200 per cent if it is played in peak
23     viewing hours.  Do you have a suggestion of regional
24     within that?  When you are talking about Canadian
25     programming in this part you are not focusing on the


 1     regional aspect of programming, are you?
 2  2736                 MR. GUSTIN:  No.  Again, we are
 3     focusing specifically on the regional programming,
 4     saying that, because it is of a very specialized
 5     nature, it does need to be encouraged.
 6  2737                 COMMISSIONER CARDOZO:  Let me pose
 7     one other conundrum to you -- and I don't mean to be
 8     giving you a hard time, but these are the sort of
 9     devils that we have to wrestle with.
10  2738                 The more you give to any kind of
11     programming -- 150 per cent, people talk about 125,
12     200 -- the less there is overall; that means there is
13     less coming out of somewhere else.  And one suggestion
14     is to do away with all this and just have 100 per cent,
15     period.
16  2739                 What are your thoughts about that??
17  2740                 MR. GUSTIN:  The problem is, as was
18     brought out with TVO's presentation yesterday, we still
19     have to deal with Canadian content requirements; we
20     still have the requirements to satisfy and the
21     Commission and our licence requirements for Canadian
22     content.
23  2741                 The problem is that these types of
24     programming, the specialized types of programming also
25     tend to be more expensive.  I can buy sort of generic,


 1     off-the-rack programming that would get me my 100 per
 2     cent Cancon for a lot less money than what I will have
 3     to pay to meet these specific audience needs.
 4  2742                 What we are trying to find is a
 5     mechanism, or what we are asking you to do -- and we
 6     realize that this is a very difficult puzzle that you
 7     have to put together to help us find a way to balance
 8     the meeting Canadian content requirements and
 9     addressing what we see as the needs our audience in the
10     context of the available resources that we have.  We
11     have a finite amount of resources that we can throw at
12     these things.
13  2743                 COMMISSIONER CARDOZO:  I appreciate
14     that, but you haven't helped me in the conundrum at
15     all.  Anyhow, I guess that's one we will continue to
16     wrestle with.
17  2744                 In terms of reflecting Saskatchewan,
18     one of the distinctive aspects of the province is
19     surely the aboriginal population, the growing
20     aboriginal population, both on reserve and certainly in
21     cities more noticeably.  How much does your programming
22     reflect the aboriginal population of the provinces
23     either on the programming side or the broadcast
24     network?
25  2745                 MR. BENNING:  On the broadcast side,


 1     we do have a number of aboriginal programs.  I think
 2     probably the best example is "Indigenous Circle".  That
 3     would be one.
 4  2746                 COMMISSIONER CARDOZO:  Sorry, what
 5     was it called?
 6  2747                 MR. BENNING:  A program called
 7     "Indigenous Circle".  It is produced by quite a well-
 8     known Saskatchewan aboriginal production company,
 9     incidentally the one that is involved in the project
10     Big Bear.  It is the same production house.
11  2748                 COMMISSIONER CARDOZO:  Okay.
12  2749                 MR. BENNING:  So that's part of it.
13  2750                 Now, the second part of your question
14     I think refers to the classes.  I forgot to mention
15     some of the credit classes that we carry into the
16     schools are originated from the Saskatchewan Indian
17     Federated College, a rather large college -- it is a
18     unique college affiliated with the University of
19     Regina.  So there are credit classes originating from
20     that source as well.
21  2751                 COMMISSIONER CARDOZO:  Okay.  Are you
22     aware that the CTCPF has, within its budget, set aside
23     I think it is $1 million for aboriginal producers?  Do
24     you know if that's a source of production that you have
25     looked at or benefitted from?


 1  2752                 MR. GUSTIN:  With the model that we
 2     are using right now, most of the material coming to us
 3     is producer driven, so that we rely on the producers to
 4     put together the funding package that we license into
 5     the project.  We have been working with the aboriginal
 6     producers in the province looking at the projects they
 7     bring to us, and we are encouraged to see that there
 8     are more and more of them coming forward, both in terms
 9     of numbers of producers and numbers of projects.
10  2753                 By and large, we try to become
11     involved in as many of these as we are able to do with
12     our financial resources and which fit the mandate of
13     the network.
14  2754                 COMMISSIONER CARDOZO:  So it is an
15     issue that --
16  2755                 MR. GUSTIN:  Very much.
17  2756                 COMMISSIONER CARDOZO:  -- you keep an
18     eye on, or does it just happen --
19  2757                 MR. GUSTIN:  No.  This is a very key
20     area for us.  This is one of our priority areas.  We
21     are trying to encourage producers to work in this area. 
22     We are very aware that Saskatchewan has a growing
23     aboriginal population and that they particularly are
24     looking for their place in the television sun I guess
25     you could say because, if we look at the amount of


 1     programming that is on that is focused on aboriginal
 2     peoples and their needs, it is disproportionately small
 3     compared to the amount of programming available.
 4  2758                 COMMISSIONER CARDOZO:  Thank you.
 5  2759                 Moving on to your recommendation
 6     regarding dropped fees, I see what you said both in the
 7     written and what you have said today.  I just want to
 8     clarify that we when you talk about drooped fees, you
 9     are talking about the thing that we call subscriber
10     fees.  Is that right?
11  2760                 MR. BENNING:  Yes.
12  2761                 COMMISSIONER CARDOZO:  If you don't
13     use the same terminology, we might just not understand. 
14     They say we live in a bubble, but we try not to.
15  2762                 Lastly, I wanted to ask about the
16     cost of programming, and maybe this is something you
17     can get back to us about if it is too detailed an
18     issue.  You note that for you the cost of programming
19     can be $600 for non-Canadian up to $2,000 for Canadian-
20     made programming and up to 10,000 for Saskatchewan
21     made.  This is on page 7 of your written presentation.
22  2763                 Would you be able to give us a little
23     more detail on the costs involved in licensing a one-
24     hour informational programming?
25  2764                 MR. GUSTIN:  Certainly,  Again, the


 1     problem with such an informational programming is I
 2     don't think we could use the conventional model.  If we
 3     were to take, for example, a one-hour documentary -- 
 4     and for the sake of this discussion we will use round
 5     numbers; this is a hypothetical production, but say a
 6     one-hour project with $100,000 budget.  SCN's licence
 7     may be up to $10,000 for that, which leaves the
 8     producer the responsibility of finding the other 90 per
 9     cent.
10                                                        0935
11  2765                 Hopefully, he will be able to access
12     the fund, be able to access telefilm and get other
13     broadcasters to participate.  Probably other
14     broadcasters may, if they are fortunate, get a national
15     broadcaster to put in a first window licence, leaving
16     us in a second window position.  In that fashion they
17     knit together that $100,000.
18  2766                 If we are going to put together a one
19     hour regionally specific program, and let's say that it
20     is done in a more cost effective fashion or a lower
21     budget fashion so it becomes a $50,000 project, the
22     producer does not have the ability to access telefilm,
23     does not have the ability to access the fund, does not
24     have the ability to access out-of-province
25     broadcasters.


 1  2767                 If we want to see this project
 2     forward, we are looking at finding the entire $50,000. 
 3     This is the situation we are facing right now with this
 4     education series that we are looking at.  Basically, we
 5     either have to find within our budget or find other
 6     pockets to pick to put together this entire budget
 7     within the province.  We cannot go out-of-province to
 8     look for the more traditional funding sources.
 9  2768                 COMMISSIONER CARDOZO:  Do you have
10     recommendations for us, Mr. Gustin?
11  2769                 MR. GUSTIN:  This is where we think
12     that the regional information production fund is
13     crucial.  We're not talking about huge amounts of
14     money.  We are not looking for tens of millions of
15     dollars, but even, as we said in the oral presentation,
16     an ability to put another half a million dollars into
17     the kitty would make a tremendous difference in our
18     ability to address these issues.
19  2770                 COMMISSIONER CARDOZO:  Define
20     informational again.  Is it what you call public
21     affairs programming?
22  2771                 MR. GUSTIN:  Public affairs, I
23     suppose to an extent it would be programming which is
24     not entertainment programming and it is programming
25     which is designed to promote an informed citizenry,


 1     that it allows them to have a context to participate
 2     more fully in the daily lives in the provinces' daily
 3     life.
 4  2772                 COMMISSIONER CARDOZO:  So it is quite
 5     different from current affairs.  It wouldn't
 6     necessarily be like a daily -- your counterpart in
 7     Ontario, TVO, has "Studio 2", which is a current
 8     affairs analysis type of thing.
 9  2773                 MR. GUSTIN:  I think that "Studio 2"
10     might be on the edge of this sort of thing because
11     "Studio 2" is not news.  We do not want to do news. 
12     That came out earlier.
13  2774                 It is the kind of programming that
14     provides the background to the news so that people can
15     understand where some of this information comes from
16     and make informed decisions, for example, in dealing
17     with the specific area, be it health, be it education,
18     be it whatever the subject area is.
19  2775                 COMMISSIONER CARDOZO:  When you are
20     talking about informational, it may or may not be
21     current inasmuch as the issues that are in the news
22     that week or that day.
23  2776                 MR. GUSTIN:  It could be.
24  2777                 COMMISSIONER CARDOZO:  But it may
25     not.


 1  2778                 MR. GUSTIN:  But it may not.
 2  2779                 COMMISSIONER CARDOZO:  Right.  Okay. 
 3     That covers my questions.  Thanks very much.
 4  2780                 Thank you, Madam Chair.
 5  2781                 THE CHAIRPERSON:  Commission
 6     Pennefeather.
 7  2782                 COMMISSIONER PENNEFEATHER:  Thank
 8     you, Madam Chair.
 9  2783                 Good morning.
10  2784                 I have one question.  In your
11     presentation this morning on page 3, you refer to the
12     old Department of Supply and Services Fund.  I assume
13     that's the non-theatrical fund at the time.  A
14     precursor of the Canadian Independent Film and Video
15     Fund was an excellent example of a program with good
16     accessibility.
17  2785                 The Canadian Independent Film and
18     Video Fund still exists.  Are you using this fund?  Is
19     it an example of accessibility?
20  2786                 MR. GUSTIN:  That fund has not been
21     terribly successful for Saskatchewan producers, the
22     Canadian Independent Film and Video Fund.  Saskatchewan
23     producers have not had a great deal of success in
24     accessing that fund.
25  2787                 COMMISSIONER PENNEFEATHER:  Would you


 1     elaborate just a bit.  One of the reasons I'm asking
 2     also is some of the definitional questions that
 3     Commissioner Cardozo was asking are of concern to me in
 4     terms of the needs and the kind of programming that we
 5     are talking about.
 6  2788                 You yourselves have proposed a new
 7     fund.  What are the criteria that make a fund work
 8     then?
 9  2789                 MR. GUSTIN:  I think in terms of this
10     question, the regional accessibility, I think that's
11     the key issue, that the new fund or the Canadian
12     Independent Film and Video Fund seems to have lost that
13     regional specificity.
14  2790                 COMMISSIONER PENNEFEATHER:  Okay. 
15     The definition of its mandate is very much directed
16     towards the kinds of programming you are talking about
17     and your statement that there is little funding for
18     that programming makes it, I think, an important issue. 
19     So it's a question of process then.
20  2791                 MR. GUSTIN:  Yes.  I can't speak to a
21     lot of the specifics of how that fund operates, so yes.
22  2792                 COMMISSIONER PENNEFEATHER:  Thank
23     you.
24  2793                 Thank you, Madam Chair.
25  2794                 MR. BENNING:  Just one final comment. 


 1     If you look at the most recent report from that fund,
 2     there's a big blank in the middle of the map of Canada
 3     in terms of there is nothing going in from that fund. 
 4     Zero.
 5  2795                 THE CHAIRPERSON:  Thank you,
 6     gentlemen.  Thank you for coming from so far to share
 7     your concerns.  We hope you have a good trip back.
 8  2796                 MR. BENNING:  Thank you very much,
 9     Madam Chair.  Thank you.
10  2797                 THE CHAIRPERSON:  Madam Secretary,
11     would you invite the next participant, please.
12  2798                 MS BÉNARD:  Thank you, Madam Chair.
13  2799                 The next presentation will be by
14     ACCESS, Learning and Skills Television of Alberta
15     Limited.  I would invite Mr. Peter Palframan and Mr.
16     Ross Mayot to please come forward.
18  2800                 THE CHAIRPERSON:  Good morning,
19     gentlemen.
20  2801                 MR. MAYOT:  Good morning.
21  2802                 MR. PALFRAMAN:  Good morning, Madam
22     Chair, Commissioners, CRTC staff, ladies and gentlemen.
23  2803                 My name is Peter Palframan and I am
24     the Vice-President of Finance and Administration for
25     ACCESS and Canadian Learning Television.  With me today


 1     is Ross Mayot, our Vice-President of Development for
 2     ACCESS and Canadian Learning Television. 
 3     Unfortunately, Dr. Ron Keast, the President of ACCESS
 4     and CLT, cannot be with us today.
 5  2804                 The mission for both ACCESS and CLT
 6     is straightforward and clear, to provide Canadians with
 7     educational programming and opportunities that support
 8     their lifelong learning needs and interests. 
 9     Affordable access to educational resources, especially
10     distance learning resources, is a key goal for Canada
11     in the new knowledge-based economy.
12  2805                 We are participating in this
13     proceeding, along with our colleagues from ATEC, to
14     urge the CRTC to ensure that educational television is
15     taken into consideration.
16  2806                 Educational programming makes an
17     important contribution to the objectives of the
18     Broadcasting Act and to millions of Canadians of all
19     ages who rely on educational television to enrich their
20     lives and support their learning needs.  It is also
21     increasingly important for small and medium sized
22     independent production companies who rely heavily on
23     educational television for the production and
24     exhibition of their work.
25  2807                 Since our written submission covers


 1     our responses to the key questions raised by the
 2     Commission in the Public Notice for this hearing, we
 3     would like to take our brief time today to focus on two
 4     issues of particular importance, both relating to the
 5     marginalization of educational television; firstly in
 6     terms of access to programming funds and, secondly, in
 7     terms of cable access.
 8  2808                 MR. MAYOT:  The first issue deals
 9     with the fact that the existing regulatory policies
10     concerning Canadian programming have come to favour
11     large, vertically integrated network operations and
12     production houses specializing in the production and
13     exhibition of dramatic adult entertainment.  As a
14     result, educational broadcasters and smaller
15     independent producers are being marginalized within the
16     policy and regulatory framework.
17  2809                 With the changes in the delivery of
18     education, this issue has been compounded and has a
19     great impact on educational television.  Technology,
20     competition and changing interests in lifestyles are
21     reshaping the delivery of education, especially higher
22     education and lifelong learning.
23  2810                 Educators and educational
24     administrators realize that courses have to be marketed
25     and offered in ways that are more flexible and suited


 1     to lifestyles and needs of contemporary learners.  One
 2     of the best ways for educators to accomplish this is to
 3     make better use of television to market, promote and
 4     deliver their courses.
 5  2811                 ACCESS is helping them do that now by
 6     working in partnership with educators, government
 7     officials, independent producers and others to create
 8     innovative and flexible programs for institutions and
 9     learners and to promote lifelong learning.
10  2812                 New series such as "Death:  A
11     Personal Understanding", "21st Century Business",
12     "Building a Nation", "Trouble in Mind" and "Judaism:  A
13     Quest for Meaning", produced by independent producers
14     in co-operation with ACCESS, illustrate how high
15     quality television programs, designed and
16     contextualized to support university and college credit
17     courses, play a key role in the new learning
18     environment.  But these productions have to be produced
19     and financed in the new television environment where
20     there is limited funding for our documentary and
21     non-fiction formats.
22                                                        0945
23  2813                 Each of these productions, and more
24     like them in development, requires financing from other
25     broadcasters to be completed.  While this is positive,


 1     in that it increases the audiences for these programs,
 2     it does illustrate how our educational objectives are
 3     depending on the programming interests of other
 4     broadcasters.  For these reasons we strongly believe it
 5     is necessary to enhance the policies for the production
 6     and exhibition of documentaries and non-fiction series
 7     and we recommend that:
 8  2814                 First, educational programming,
 9     including instructional and how-to programs, created by
10     independent producers and licensed by educational
11     broadcasters, should be eligible to trigger CTF
12     funding.
13  2815                 Secondly, the CRTC should provide at
14     least a 125 per cent credit for 10/10 documentary
15     programming broadcast on educational television
16     services.
17  2816                 MR. PALFRAMAN:  Our second issues
18     relates to the marginalization of education in terms of
19     access to cable carriage and specifically to our
20     experience over the past two years with Canadian
21     Learning Television.  It has given us real concern
22     about the ease with which the spirit and objectives of
23     the CRTC's Priority Carriage, Tiering and Linkage rules
24     and the objectives of the Broadcasting Act can be
25     undermined.  This relates to the fact that, since


 1     September 1996, Canadian Learning Television, the first
 2     and only Canada-wide educational television service,
 3     has been forced to the sidelines, waiting for a digital
 4     roll-out, which itself has been place don the back
 5     burner by most cable operators, while upwards of eight
 6     non-Canadian and exemption or "informercial" services,
 7     that nobody asked for and almost nobody watches, have
 8     been given scarce analog channels that reach millions
 9     of Canadian homes.
10  2817                 Despite its wide-ranging support from
11     educators, public officials, business and community
12     leaders and despite independent research that indicates
13     its appeal to Canadians cost to coast, CLT continues to
14     be shunted aside in favour of these non-Canadian and
15     exempt services.
16  2818                 CLT now faces the impossible prospect
17     of being carried next fall in a limited digital roll-
18     out that has the maximum potential to reach 2 or 3 per
19     cent of cabled Canadian homes or, as part of a slowly
20     dying analog pay TV tier whose declining penetration
21     may reach 10 per cent of cabled homes.  Those are the
22     options we are now being offered by the largest cable
23     MSOs.  These options are both unfair and unacceptable.
24  2819                 We appreciate the context and
25     environment in 1996, in which CLT and others were


 1     licensed as so-called "digital" services.  But that
 2     context only existed because the Commission was misled
 3     about channel capacity.  That fact was never more
 4     evident than last October when cable rolled out a new
 5     analog tier of up to 16 new specialty services, six of
 6     them non-Canadian, and added more exempt services.  So
 7     much for capacity constraints.  But then having decided
 8     there was actually capacity for these new services,
 9     rather than taking advantage of the opportunity to
10     accommodate all of the licensed Canadian services,
11     which would have included CLT, a learning service that
12     would help people to upgrade their skills, get jobs or
13     get a university degree, cable decided to add more
14     fringe American services as part of the new package.
15  2820                 Fringe services that were actually on
16     the eligible list of foreign services primarily because
17     cable had asked for them to be added to help with the
18     roll-out of digital, not for analog carriage.
19  2821                 And now, less than a year after the
20     introduction of the package, it's interesting to note
21     that it's the Canadian services that are proving to be
22     the most popular in the new tier by large margins.  The
23     BBM data appended to this presentation illustrates our
24     point.  The data also reflect the viewership and
25     importance of ACCESS and TVO in their respective


 1     markets, providing an indication of what CLT could
 2     accomplish nationally.
 3  2822                 Madam Chair, you forewarned of these
 4     and other problems in your thoughtful and forward-
 5     looking dissenting opinion in CRTC 1996-600.
 6  2823                 MR. MAYOT:  Given the investment by
 7     Canadian licensees of hundreds of thousands of dollars
 8     in meeting the stringent and competitive test of a
 9     licensing process and the commitments made by them that
10     are significant to the Broadcasting Act, and to
11     programming policies, they should be entitled to a
12     greater sense of fair play.
13  2824                 The CRTC's priority carriage, and the
14     tiering and linkage requirements do not ensure that at
15     present.  Although the current moratorium on the
16     authorization and distribution of any new foreign
17     services is a helpful measure, it's not enough.
18  2825                 Quite simply, it does nothing to help
19     the objectives of this procedure when licensed Canadian
20     services are treated in this way.  Particularly in the
21     case of education, whose importance is singled out in
22     the Broadcasting Act.  And yet, the only nationally
23     available service in the education gene is an American
24     one.  What a sad reflection this is when we have a
25     wide-supported, quality Canadian service sitting on the


 1     shelf with an innovative programming plan that is all
 2     set to launch.  Therefore, we urge the CRTC to use its
 3     full regulatory and supervisory clout to address this
 4     situation without further delay.
 5  2826                 Madam Chair, if the programming
 6     policies and enabling regulations do not effectively
 7     support educational broadcasters and the distinct
 8     programming that they especially contribute to our
 9     broadcasting system, educational television will be
10     even further marginalized and another opportunity will
11     have been missed for our broadcasting system to make a
12     meaningful support to the pressing educational
13     objectives and needs of Canadians.
14  2827                 That concludes our presentation.  We
15     would welcome your comments.
16  2828                 THE CHAIRPERSON:  Thank you, Mr.
17     Palframan and Mr. Mayot.
18  2829                 Commissioner McKendry, please.
19  2830                 COMMISSIONER McKENDRY:  Thank you,
20     Madam Chair.
21  2831                 Good morning.  I would like to ask
22     you a few questions to begin with about your oral brief
23     that you have just presented to us.  I have taken a
24     look at the schedules and charts that you have given us
25     at the end of the brief.  On page 2 you have noted that


 1     educational broadcasters are being marginalized within
 2     the policy and regulatory framework, yet I take it the
 3     point of the charts at the back are to show that in
 4     fact you are doing well.  This seems to demonstrate
 5     that you are quite successfully attracting viewers in
 6     relation to services that you compete with.  My
 7     question is:  How do you reconcile the view that you
 8     are being marginalized with the apparent success of
 9     ACCESS in relation to competing services?
10  2832                 MR. PALFRAMAN:  Commissioner, let me
11     first respond to that and I know that Ross will want to
12     add to it.
13  2833                 I think it is a credit to all of the
14     educational broadcasters that they do get the audiences
15     and achieve the audiences that they do.  One of the
16     reasons is that we are a priority carriage service on
17     basic.  That means that we are accessible to the
18     largest number of viewers in cabled and over-the-air
19     broadcast, so that's one of the reasons.  But I think
20     the other is that it indicates how strong the demand is
21     from people for educational television.
22  2834                 What it doesn't change is the fact
23     that we are being marginalized in terms of the extent
24     to which we can access the programming funds that are
25     available to all the other conventional broadcasters. 


 1     I guess what we have had to do is get really creative
 2     about how we finance some of the productions that are
 3     involved in.
 4  2835                 The growth of specialty services has
 5     been a help to us in fact.  It has meant that there are
 6     other broadcasters that we can work with in terms of
 7     financing and sometimes it means that we don't have the
 8     first window for that programming, but it means that we
 9     do carry that programming.  The first window is not a
10     big issue for us, as I think somebody said earlier,
11     from ATEC yesterday, the first window often is just a
12     promotion for a much wider audience subsequently.
13  2836                 So, we have had to be creative to
14     make sure that we have retained the viewers that
15     educational television has built up, but again as far
16     as I am concerned it just indicates how strong the
17     demand is for educational television and how important
18     it is.  It doesn't change the fact that it is very
19     difficult for us to access some of the production funds
20     that are available to others.
21  2837                 MR. MAYOT:  I think that is entirely
22     true, but I think in fairness if you look at the chart
23     we have chosen us to reflect the capacity of
24     educational programming to draw viewership in relation
25     to other specialty services.


 1  2838                 One could extend this chart upward
 2     from where it is now to include the conventional
 3     broadcast services and the networks and the gap between
 4     those audiences and where we are would be very, very
 5     large, as you know.
 6  2839                 What we are saying is that in the
 7     context of this kind of procedure, where you are
 8     looking at the overall system and looking at ways in
 9     which to enhance programming opportunities for all of
10     the services, including the ones that aren't on this
11     group, we don't want to be left down in this tiny
12     little group that is an aggregate, draws meaningful and
13     important audiences, as an aggregate.
14  2840                 We certainly don't want to see a
15     split between our sector of the broadcasting system,
16     educational broadcaster specialty services, and the
17     networks and the specialty.  Our point is there is a
18     gap now.  There is a bias in favour of networks and
19     large production and drama and that is only going to
20     get wider and these numbers will look even smaller if
21     we are not part of the programming policy changes and
22     helpful ones that you are contemplating.
23  2841                 COMMISSIONER McKENDRY:  Thank you.
24  2842                 Just looking at page 4 and in turn
25     with reference to the funding, you note that at this


 1     point you are dependent or you are reliant on other
 2     broadcasters to assist in the funding of programs and
 3     that you would prefer I guess to be able to access the
 4     fund directly yourself.
 5  2843                 So just to make sure I understand the
 6     issue, the issue isn't really whether or not the money
 7     is available to you today.  It's where it is available. 
 8     You are getting what you need, but you have to go into
 9     partnership with other broadcasters?
10  2844                 MR. MAYOT:  I don't think we have
11     suggested that we want to access the fund directly. 
12     Our commitment upon licensing of ACCESS was to use
13     independent production as fully as possible.  There is
14     very little that is not done through independents.  But
15     as our educational colleagues yesterday and today have
16     pointed out, our ability to provide licence fees that
17     trigger the fund is a large part of the problem.
18  2845                 We work with a lot of independent
19     producers who come to us, want to do the kinds of work
20     that we do, but know that in many cases, both because
21     of genre and because of financing we can't be that
22     trigger mechanism for them, so they have to go
23     elsewhere.
24  2846                 We have not complained about that. 
25     We think that's a healthy thing.  We don't mind at all,


 1     but it does mean that we are not the authors of our own
 2     fate in terms of the kind of programming we want to do. 
 3     We are limited to certain kinds of programming.  It's
 4     all non-formal and there is a limit in terms of the
 5     funding available for the kinds of programming.
 6  2847                 MR. PALFRAMAN:  Commissioner, I want
 7     to be really clear about that.  I think Ross expressed
 8     it up front, that the issue is not that we have to be
 9     able to access it directly ourselves in our own name. 
10     The key is that that genre, educational television, has
11     to be available for the independent production
12     community to be able to access it.  That's the real
13     key.  It is not a question of us having equity in it. 
14     That might be nice, but it's not important to us.
15  2848                 As Ross said, the key is we work with
16     those independent producers and that's an important
17     community to us, but if they can't access the fund,
18     then it is not of much help to us.
19  2849                 COMMISSIONER McKENDRY:  Thank you.
20  2850                 I wanted to ask you a question about
21     on your written submission to us.  Earlier you noted on
22     page 1 of a growing appreciation of the regulatory role
23     of market forces.  I take it from your comments today
24     you don't perceive that the way the cable industry has
25     packaged the new specialty services as market forces at


 1     work?
 2  2851                 MR. PALFRAMAN:  I am not quite sure I
 3     understand your question, but just --
 4  2852                 COMMISSIONER McKENDRY:  To make
 5     myself more clear, I guess one possible argument is
 6     that the cable operators packaged American services
 7     with Canadian services for marketing reasons, in order
 8     to give more appeal to these new tiers.  I take it you
 9     don't agree with that view of the application of market
10     forces, at least in that particular case or you
11     disagree that it is market forces at work?
12  2853                 MR. PALFRAMAN:  Marketing has been
13     important all along the way.  I think that cable have
14     always made the argument that, I think as Mr. Beatty
15     said yesterday, if you put on a Canadian services you
16     put on another American one.  I think that probably was
17     true, but I don't think it is any more.
18  2854                 I think that over the last five or
19     eight years we have seen how successful Canadian
20     specialty services have been and I think there has been
21     a very wide viewer acceptance of the Canadian specialty
22     services.  I think that the idea that you have to have
23     an American service every time you put on a Canadian
24     one just isn't true any more.  I think that in fact
25     some of the data that we submitted with our oral today


 1     certainly supports that.
 2  2855                 I think it was a terrific opportunity
 3     that cable had last October when they brought out, in
 4     the case of Rogers, 16 new services, a terrific
 5     opportunity to recognize the success of the Canadian
 6     specialty services and that opportunity was lost.
 7  2856                 So, yes, I agree with you.  I think
 8     that marketing or it's just to speak to the point we
 9     made in our written submission.  Market forces are
10     important, but the marketing has changed and I don't
11     think cable have recognized that.
12  2857                 MR. MAYOT:  Could I just add that in
13     my view it hasn't been market force that has put us in
14     the position we are in.  If it were, then we wouldn't
15     have anything to complain about.
16  2858                 In our view, the cable industry has
17     used a regulatory loophole really as a means of
18     ensuring that market forces don't come into play
19     entirely.  The fact that there is a suspension of the
20     access rules has been the central issue in why we are
21     not on the air right now.  It is not anything to do
22     with market or audience or anything.  The playing field
23     in this entire cliché is not balanced because there of
24     the suspension of the access rules.
25  2859                 So, it's a regulatory matter that has


 1     come into play in the market.  It is not simply a
 2     matter of the market.
 3  2860                 COMMISSIONER McKENDRY:  On pages 4
 4     and 8 of your written submission you recommended
 5     lowering the 60 per cent Canadian content quota.  I
 6     think you suggest that it should be complemented with
 7     additional measures, similar to those established for
 8     the specialty and pay services.  I am wondering if you
 9     can elaborate on those additional measures that you
10     think would be appropriate?
11  2861                 MR. MAYOT:  I think the concept and I
12     think it appears to be the one that the Commission is
13     struggling to find is quotas and arithmetic around
14     hours of play doesn't seem to be as applicable or as
15     desirable for anybody any more, so the idea of a quota
16     system of content is not properly or fully addressing
17     the issue of quality and the kind of programming that
18     everybody wants to see in our system.
19  2862                 So our view, in terms of trying to be
20     helpful, both in the spirit of looking for alternatives
21     and to be practical is, well, don't make that the
22     measure.  Don't make 60 per cent the measure of whether
23     a broadcaster of any kind is doing their job.  Make a
24     measure of the kinds of things that could stimulate
25     them to do more both in terms of quality and in terms


 1     of quantity.
 2  2863                 If that includes dropping the overall
 3     requirement, but providing incentives that could
 4     include -- and this is just one example -- that
 5     broadcasters that actually do generate more hours
 6     against a previous bench mark, let's say of their
 7     schedule last year, in terms of dollars spent or
 8     exhibit, maybe they can bank some of that.
 9  2864                 Again, in the spirit of trying to
10     provide flexibility and incentive to do new things,
11     maybe it is time to look at ways in which you can -- if
12     you exceed performance measures, you can bank some of
13     that.  You can simply be a little more flexible in
14     terms of the way you broadcast your schedule, rather
15     than get caught up into the 60 per cent.
16  2865                 Really, the spirit of let's find and
17     let's encourage new ways to allow broadcasters to
18     produce and exhibit more programming of a higher
19     quality was what we were trying to get at.
20  2866                 COMMISSIONER McKENDRY:  How long
21     would you be able to bank it for?  Would you have to
22     take it in in the following year?
23  2867                 MR. MAYOT:  Certainly I don't think
24     we have thought that through, but maybe a calendar year
25     might be the threshold.


 1  2868                 COMMISSIONER McKENDRY:  On page 6 of
 2     the written submission you noted that the USA
 3     represents the greatest market for the kinds of
 4     programming that we produce or licence from independent
 5     producers.  What are the problems that are standing in
 6     the way now of taking advantage of that market to the
 7     extent that you would like to be able to take advantage
 8     of it?
 9  2869                 MR. MAYOT:  In a couple of examples
10     we do a lot of work with a company called Sleeping
11     Giant Productions, who have made their own commitment
12     to educational programming, formal educational
13     programming.
14                                                        1005
15  2870                 There are a number of like-minded
16     independent producers and broadcasters in the United
17     States in the public broadcasting system, but
18     increasingly in the private side, the Knowledge TV
19     Jones Network people.  There have been two or three
20     projects that I am aware of where deals between all of
21     us have not been able to be consummated because of the
22     Canadian content rules and who accesses the fund.  I'm
23     afraid I can't provide the specifics.
24  2871                 I'm not acquainted enough with what
25     the specific problems were, but there were a number of


 1     impediments just in terms of cooperation between
 2     producers in Canada and producers in the United States
 3     that didn't fulfil the requirements of CTF funding and
 4     Canadian content, the point system, to allow otherwise
 5     great educational products that would play widely in
 6     the United States and in Canada, put Canadian
 7     independent producers to work, give Canadian
 8     broadcasters interesting product to use.  It just
 9     couldn't be done because of the current point system
10     and the rules on accessing the fund.
11  2872                 COMMISSIONER McKENDRY:  Thanks.  I
12     would like to end up by coming back to a point we
13     discussed a little bit earlier and you clarified for me
14     about your interest in -- as I understand it, you are
15     not proposing to directly access the production funds
16     and I am wondering if you agree or disagree with the
17     SCN proposal that there be a dedicated production fund
18     for regional information programming.  I assume if such
19     a fund was created, then that would be something that
20     would be for the broadcasters to have direct access to.
21  2873                 MR. PALFRAMAN:  We certainly support
22     that idea.  We, from the perspective of ACCESS, don't
23     attach as much importance to it, but we think it is a
24     good idea and if such a fund existed, we would access
25     it.


 1  2874                 In terms of regional programming, we
 2     do a daily one-hour live show that is broken into two
 3     parts.  One focuses on learning and jobs and the other
 4     focuses on a help hot line that deals with a wide range
 5     of issues.  But that's live and it's produced in our
 6     Edmonton studio and it then gets repeated twice later
 7     that day and then once the subsequent day.  So, we have
 8     three hours a day of programming that focuses on
 9     regional matters and we put a lot of our own production
10     money into that.
11  2875                 So, we do deal on a daily basis with
12     regional issues and those have become very important
13     productions and programs within Alberta.  We think that
14     regional programming is important, but what's more
15     important to us is having a national audience for most
16     of the programming that we do.  So, when we get into
17     co-productions and joint ventures, we try as much as
18     possible to incorporate other national broadcasters, as
19     I said earlier.  So, that's important.  I think a
20     regional fund would be important and if such a fund
21     existed, I know we would be able to put it to very good
22     use.
23  2876                 COMMISSIONER McKENDRY:  Thank you
24     very much.  Those are the questions I have for you.
25  2877                 Thank you, Madam Chair.


 1  2878                 THE CHAIRPERSON:  If I may ask, with
 2     regard to lowering the 60 per cent quota, you probably
 3     noticed that the CBC, if I recall, has even suggested
 4     it was no longer necessary.  Do you see that as a quid
 5     pro quo for more focused requirements during peak hours
 6     or simply for you it's a question of flexibility?  You
 7     lower it and then if someone increases it, then as an
 8     incentive they can bank the increase.
 9  2879                 You are looking at lowering it to 40,
10     35.  I don't quite understand what you intend because I
11     didn't hear you or read that you suggested there be
12     requirements in peak hours.  Have you recommended as a
13     quid pro quo simply lowering the 60 per cent and you
14     keep the 50 after 6:00 o'clock or is it the daytime
15     period you feel there should be more flexibility?  To a
16     large extent, I suppose, some of your programming --
17     there would be an incentive to place it in --
18  2880                 MR. MAYOT:  Precisely.
19  2881                 THE CHAIRPERSON:  But you would want
20     that for all broadcasters or just for yourselves, for
21     educational broadcasters?
22  2882                 MR. MAYOT:  Again in the spirit of
23     trying to advance ideas would provide some flexibility,
24     get away from a quota system which has limitations that
25     I think we all acknowledge.  Let's find some new ways


 1     so that performance gives you some flexibility in terms
 2     of quota.
 3  2883                 THE CHAIRPERSON:  And would you
 4     measure performance like the CAB, according to
 5     viewership?
 6  2884                 MR. MAYOT:  No, not entirely.
 7  2885                 THE CHAIRPERSON:  How would you
 8     measure it?
 9  2886                 MR. MAYOT:  Well, I think we would --
10  2887                 THE CHAIRPERSON:  By how Canadian
11     programming was so there was in the under-represented
12     categories that type of measure?
13  2888                 MR. MAYOT:  Certainly.  If there was
14     an increase on 10 out of 10 productions in any of the
15     genres, maybe that's a way to encourage quality and,
16     ostensibly, viewership does flow from that.
17  2889                 THE CHAIRPERSON:  It may create some
18     flexibility, but it will sure require some micro-
19     management of the system.  If you were to actually
20     monitor performance, it would become as when we talk
21     about bringing forward and so on -- it reminds me of
22     the tax system when I lost a lot of money one year.  It
23     would require some serious management of performance.
24  2890                 MR. MAYOT:  I suppose and, to be
25     frank, we haven't looked at the administrative


 1     implications of that.
 2  2891                 THE CHAIRPERSON:  But the spirit
 3     would be to have a lower requirement and find some way
 4     of incenting by promising some relief if something is
 5     done very well.
 6  2892                 MR. MAYOT:  I think so, yes.
 7  2893                 THE CHAIRPERSON:  And the relief
 8     would be less Canadian programming in daytime.
 9  2894                 MR. MAYOT:  Well, it could be. 
10     Perhaps we are being optimistic or just looking at the
11     world from our perspective on what we want to do, but
12     our argument would be that lowering the quota doesn't
13     diminish quality viewership, numbers of projects, money
14     spent.  By definition, none of those are the
15     implications.
16  2895                 THE CHAIRPERSON:  So, why lower it?
17  2896                 MR. MAYOT:  Because the quota now,
18     conversely, doesn't contribute to any of those things. 
19     It doesn't guarantee more money spent -- the quota just
20     becomes an arithmetical requirement.
21  2897                 THE CHAIRPERSON:  I understand what
22     your aim is.  How one achieves that without losing in
23     the process as to what our concerns are is perhaps
24     another matter.
25  2898                 We appreciate your comments and we


 1     certainly hope you had a nice evening last night.  I
 2     don't think you expected to be in Ottawa this long.  We
 3     thank you for your cooperation and we hope you have a
 4     good trip back to where the sun really shines.  Thank
 5     you.
 6                                                        1015
 7  2899                 Madam Secretary, voulez-vous s'il
 8     vous plaît inviter les intervenants suivants.
 9  2900                 Mme BÉNARD:  Merci, Madame la
10     Présidente.
11  2901                 La prochaine présentation sera celle
12     de Télé-Québec.
13  2902                 LA PRÉSIDENTE:  Bonjour, messieurs. 
14     Allez-y quand vous êtes prêts.
16  2903                 M. INCHAUSPÉ:  Madame la Présidente,
17     Mesdames et Messieurs les Conseillers, je me présente
18     tout d'abord; je suis Paul Inchauspé.  Je suis
19     président du conseil d'administration de Télé-Québec. 
20     Je remplace ici le président-directeur général Robert
21     Normand, qui a été empêché et qui m'a demandé de
22     l'excuser auprès de vous.
23  2904                 Je suis accompagné de Mario Clément,
24     qui est directeur général de la Programmation; de Denis
25     Bélisle, directeur général des Affaires juridiques et


 1     secrétaire général; de Jacques Lagacé, qui est
 2     directeur du Développement institutionnel; et, en
 3     arrière, deux personnes qui font partie du service de
 4     Recherche et Planification, Pierre Daigneault, qui est
 5     le chef de service, et Gérald Bourbeau, qui est un
 6     chercheur.  Alors ces personnes se joindront à moi,
 7     vous le comprendrez facilement, pour répondre aux
 8     questions que le Conseil voudra bien nous adresser.
 9  2905                 Nous tenons à remercier tout d'abord
10     le Conseil de donner à Télé-Québec l'occasion
11     d'exprimer ses commentaires lors de ces audiences
12     majeures pour l'industrie de la radiodiffusion
13     canadienne et québécoise.  Nous disons "audiences
14     majeures" parce que nous comprenons bien la
15     préoccupation qui est la vôtre.
16  2906                 Les pouvoirs qui vous sont confiés
17     vous donnent un rôle de régulation déterminant dans
18     l'offre télévisuelle.  Vos interventions passées ont
19     déjà eu des effets structurants sur la diversification
20     de cette offre.  Notamment, vous avez rendu possible
21     l'émergence et la consolidation de chaînes privées et
22     le développement de la production indépendante, ce qui
23     a été bénéfique.
24  2907                 Mais vous êtes devant une réalité
25     nouvelle.  L'expansion sans précédent de l'industrie


 1     culturelle d'une part, celle des technologies de
 2     télécommunication d'autre part, et l'attraction
 3     qu'exercent sur de nouveaux acteurs entreprenants les
 4     développements de ces deux secteurs moteurs, tout cela
 5     transforme la réalité sur laquelle vous devez exercer
 6     vos pouvoirs.  Et, légitimement, vous vous demandez si
 7     les règles que vous avez établies dans un autre
 8     contexte sont encore appropriées, si elles ne freinent
 9     pas les développements et ne devraient pas être
10     supprimées, comme d'ailleurs vous le recommanderont
11     probablement certains, ou s'il ne vous faut pas à tout
12     le moins concevoir un nouveau cadre d'intervention,
13     plus souple sur certains points, plus contraignant sur
14     d'autres, pour mieux assurer la régulation que commande
15     la nouvelle réalité.
16  2908                 Alors nous comprenons cette
17     préoccupation et c'est pour y répondre que nous vous
18     soumettons quelques éléments dont il vous faudra aussi,
19     nous semble-t-il, tenir compte.
20  2909                 Notre champ d'intervention est celui
21     de la culture et de l'éducation, ce qui nous classe
22     dans une position favorisant la diffusion d'émissions
23     canadiennes sous-représentées.  À cause de cela,
24     pensons-nous, notre voix doit être non seulement
25     écoutée, mais entendue.  Car ce qui justifie notre


 1     propos, c'est notre mandat lui-même.  Nous ne sommes
 2     pas simplement un diffuseur; nous devons réaliser une
 3     mission éducative et culturelle au service des
 4     Québécois, et si nous intervenons devant vous sur deux
 5     points, c'est pour que les conditions de réalisation de
 6     ce mandat, mais aussi celles de mandats analogues
 7     d'autres chaînes, soient non seulement préservées mais
 8     aussi renforcées.
 9  2910                 Ces deux points concernent ce qui
10     nous préoccupe et sont l'impact que peuvent avoir sur
11     la programmation une libéralisation complète de l'accès
12     aux chaînes spécialisées et le sous-financement de
13     certaines catégories de produits télévisuels.  Nous
14     dirons un mot sur chacune de ces deux préoccupations.
15  2911                 La multiplication des canaux
16     spécialisés est déjà une réalité.  La télévision
17     numérique décuplera les possibilité d'expansion en ce
18     domaine.  Les forces du marché poussent à la
19     libéralisation.  Il devrait en résulter, selon la
20     théorie même du marché, plus de qualité puisqu'il y
21     aura plus de concurrence, plus de diversité puisqu'il y
22     aura plus de joueurs, plus de production puisqu'il y
23     aura plus de diffuseurs.  Qui peut être contre cela? 
24     Mais est-ce que c'est cela qui adviendra?
25  2912                 Nous sommes portés à en douter, du


 1     moins lorsque nous observons dans le marché québécois
 2     les effets produits par la multiplication des acteurs. 
 3     Ce marché étant petit, les effets s'y manifestent plus
 4     vite:  cette réalité a donc une valeur exemplaire.  Or,
 5     que constate-t-on?  J'indique ici sommairement ces
 6     effets et, à la période de questions, ceux qui
 7     m'accompagnent pourront, si vous le désirez, illustrer
 8     mes propos.
 9  2913                 Alors deux constats sont déjà
10     évidents.  Le premier, c'est qu'en multipliant les
11     acteurs, les sources de financement sont contraintes à
12     se répartir entre des demandeurs de plus en plus
13     nombreux.  Une telle dispersion entraîne une dilution
14     et produira, croyons-nous, à terme, ou risque de
15     produire à terme une perte de qualité.  Mais, faute de
16     masse critique suffisante pour chaque acteur, ce type
17     de situation risque davantage d'entraîner une réduction
18     quantitative de produits canadiens de qualité et donc
19     la cascade des effets suivants:  augmentation
20     d'acquisitions étrangères  et, pour respecter les
21     exigences de contenus canadiens, diffusion du même
22     produit sur plusieurs chaînes.  Mais alors où seront la
23     qualité, la diversité, l'augmentation de la production
24     canadienne?
25  2914                 Le deuxième constat, c'est qu'en


 1     multipliant les acteurs on produit les conditions
 2     d'émergence de concentrations de plus en plus
 3     puissantes qui rendent difficile, sinon impossible,
 4     l'existence de petits acteurs.  Voyons déjà ce qui se
 5     passe.  Exception faite des canaux sportifs et
 6     météorologiques, les canaux spécialisés au Québec
 7     appartiennent à trois entreprises.  Incidemment, ces
 8     entreprises sont à l'origine de la majorité des 21
 9     nouvelles demandes de canaux spécialisés.  Entraînée
10     par ce mouvement de concentration, même une télévision
11     généraliste publique comme Radio-Canada dérive et
12     cherche elle aussi à être propriétaire de canaux
13     spécialisés.
14  2915                 Les poussées vers la concentration et
15     même l'intégration verticale, nous semble-t-il, sont
16     donc déjà manifestes.  C'est là, d'ailleurs, la loi non
17     écrite de la multiplication.  Les fruits qui en
18     résulteront sont évidents:  diffusion du même produit
19     sur plusieurs chaînes, surtout quand les canaux
20     spécialisés sont liés à un diffuseur conventionnel
21     généraliste, achats massifs de produits servant à
22     alimenter l'ensemble des services d'un même
23     propriétaire, et donc limitation de l'accès des autres
24     chaînes à ces produits; possibilité d'une offre globale
25     de temps publicitaire pour l'ensemble des services


 1     spécialisés dont on est propriétaire et donc
 2     possibilité de casser les prix, réduction du
 3     partenariat entre chaînes généralistes puisque les
 4     nouvelles règles favorisent plus la concentration et
 5     non la concertation.  Mais alors où sera la diversité,
 6     et comment les petits joueurs pourront-ils jouer dans
 7     ce nouvel équilibre?
 8  2916                 Alors nous semble-t-il que la réalité
 9     que vous avez à affronter n'est pas celle de savoir
10     s'il faut ou non ouvrir le marché des canaux
11     spécialisés, c'est sûr, mais de savoir quels mécanismes
12     de régulation vous devez mettre en oeuvre pour que
13     cette ouverture ne produise pas les effets nocifs déjà
14     constatés.  Nous ne pouvons, quant à nous, évidemment,
15     donner une réponse exhaustive à cette question, mais
16     c'est pour contribuer à cette tâche que nous avons
17     formulé des recommandations sur:
18  2917                 - la nécessité de la réglementation
19     du contenu canadien du système de radiodiffusion;
20  2918                 - le maintien des engagements des
21     radiodiffuseurs dans leur condition de licence et sur
22     le recours à des modes d'examen du respect de ces
23     engagements;
24  2919                 - sur la nécessité de s'assurer d'une
25     réelle complémentarité de la programmation des canaux


 1     spécialisés par rapport à celle des chaînes
 2     généralistes; et
 3  2920                 - des correctifs qui sont
 4     susceptibles de limiter les effets nocifs de la
 5     concentration, spécialement pour assurer une
 6     compétition équitable dans la quête de revenus
 7     publicitaires et l'accès aux différents produits.
 8  2921                 Je voudrais dire maintenant un mot
 9     sur la deuxième question qui nous préoccupe et qui
10     concerne le sous-financement de certaines catégories de
11     produits audio-visuels.
12  2922                 Les règles de répartition des fonds,
13     nous semble-t-il, déjà établies doivent être
14     réévaluées.  Ainsi, nous estimons que la catégorie
15     dramatiques ne devrait inclure que les dramatiques
16     lourdes et non les téléromans, déjà rentables dans le
17     marché francophone.
18  2923                 Mais nous sommes spécialement
19     préoccupés par les catégories documentaires, arts de la
20     scène, émissions pour enfants, auxquelles nous
21     ajouterions une préoccupation pour des émissions de
22     formation continue grand public.  Ces catégories ont
23     une grande valeur éducative et culturelle à cause de
24     leur possibilité d'ancrage et d'approfondissement dans
25     la réalité nationale ou régionale et à cause aussi de


 1     leur impact sur le développement cognitif, affectif,
 2     social et culturel des téléspectateurs, jeunes ou
 3     adultes.  Et nous savons que c'est l'enracinement dans
 4     le milieu immédiat qui est la condition d'existence de
 5     télévisions comme la nôtre.
 6  2924                 Or, nous sommes bien placés pour vous
 7     dire les conséquences du sous-financement de ces
 8     catégories.  Le directeur général de la Programmation
 9     pourrait vous parler abondamment de ce qui a été vécu
10     cette année à Télé-Québec:  aucun financement du Fonds
11     de production des câblodistributeurs pour  nos
12     émissions jeunesse; financement réduit pour les
13     documentaires et les arts de la scène parce que le
14     Fonds de télévision et de câblodistribution pour la
15     production d'émissions canadiennes ne leur réserve que
16     20 pour cent des ressources du Fonds de production des
17     câblodistributeurs.  Conséquence:  Nous avons dû
18     recourir au marché international au lieu de soutenir
19     une production de documentaires ancrés dans notre
20     réalité et produits par nos artisans.
21  2925                 Si cette situation se perpétue, on
22     réduira la qualité et la diversité de produits à forte
23     référence d'une culture qui nous est propre.  Et nous
24     craignons même qu'une telle dégradation de l'offre
25     télévisuelle francophone dans ces domaines n'entraîne,


 1     à terme, un désintéressement du public à l'égard de la
 2     télévision francophone.
 3  2926                 C'est pourquoi, dans notre mémoire,
 4     nous nous sommes permis d'inviter le Conseil à exercer
 5     son influence de sorte que le FTCPEC:
 6  2927                 - assure, pour la production
 7     francophone, un financement plus important aux
 8     émissions portant sur les arts de la scène, les grands
 9     documentaires, les émissions pour enfants et à certains
10     types d'émissions de formation continue grand public;
11  2928                 - harmonise aussi la procédure
12     d'attribution des ressources du Fonds de production des
13     câblodistributeurs et du Fonds de développement
14     d'émissions canadiennes de télévision de Téléfilm
15     Canada.
16  2929                 Je conclus brièvement.
17  2930                 Notre position se veut pro-active. 
18     Les forces qui poussent à la libéralisation sont
19     majeures, mais laissées à elles-mêmes, elles peuvent
20     produire le contraire des effets positifs annoncés. 
21     C'est pourquoi il faut savoir résister sur certains
22     points névralgiques. Il faut aussi savoir parfois
23     résister à la précipitation.  Quand la situation est
24     urgente, il faut savoir ne pas se presser pour bien
25     saisir les enjeux et concevoir les règles nouvelles qui


 1     assureront la saine régulation du nouvel environnement.
 2  2931                 Vous devez donc -- et cela est notre
 3     conviction profonde -- garder avec plus de soins encore
 4     la maîtrise d'oeuvre de cette régulation.
 5  2932                 LA PRÉSIDENTE:  Merci, monsieur.
 6  2933                 Il est évident et dans votre
 7     présentation de ce matin et votre soumission écrite que
 8     vous êtes préoccupés par les effets de la
 9     multiplication des canaux spécialisés, et
10     particulièrement quand ils sont le résultat de
11     concentration ou d'intégration horizontale ou verticale
12     avec des services qui existent déjà.
13  2934                 Vous avez sans doute lu ou entendu
14     les propos de Radio-Canada au sujet de constellations
15     et la force que ça peut donner pour améliorer l'offre
16     de la programmation, surtout dans un marché plus
17     étroit.  Vous prenez donc une position contraire à
18     celle-là en vous inquiétant de la prolifération d'une
19     programmation qui est répétée sur des chaînes
20     généralistes et sur des canaux spécialisés qui sont
21     sous la même propriété.
22  2935                 Est-ce que je comprends bien vos
23     propos?
24  2936                 M. INCHAUSPÉ:  Oui.
25  2937                 M. LAGACÉ:  Oui, c'est exact.  On


 1     croit que toute une série de contenus qui sont le
 2     propre de chaînes spécialisées comme la nôtre, comme
 3     une chaîne culturelle et éducative, risquent, lorsqu'on
 4     fait une fort concentration, d'avoir un peu le même
 5     effet que la situation qui existait avant les années
 6     quatre-vingt, où le Conseil, pour rediversifier
 7     l'offre, a supporté à ce moment-là la création d'un
 8     secteur de production indépendante et la création des
 9     divers canaux spécialisés.
10  2938                 En reconcentrant peut-être dans les
11     mains de deux joueurs majeurs au Québec, un joueur
12     public et un joueur privé, on pense qu'à travers ça va
13     se reproduire d'une certaine façon la situation qui
14     existait antérieurement aux années quatre-vingt, que
15     des services comme le nôtre risquent à ce moment-là
16     d'être marginalisés et qu'un certain nombre de types de
17     produits risquent aussi d'être marginalisés à
18     l'intérieur de la concurrence qui va s'exercer à
19     travers ces deux grands joueurs sur le marché.
20  2939                 On peut prendre un certain nombre
21     d'exemples là-dessus.  Par exemple, je pense qu'au
22     niveau culturel il y a un certain type de produits qui
23     n'existeraient plus sur le marché si nous, par exemple,
24     on disparaissait.  Par exemple -- et Mario peut en
25     parler plus amplement que moi -- on a constaté que sur


 1     notre marché, par exemple, la chanson francophone avait
 2     à peu près disparu chez les diffuseurs québécois et on
 3     s'est rendu compte aussi qu'à un certain moment donné
 4     toute une partie du documentaire, du court et moyen
 5     documentaire, n'existait à peu près pas comme diffusion
 6     sur les ondes.  Un certain type d'émissions pour
 7     enfants, si Télé-Québec n'avait pas développé une
 8     approche à travers le secteur jeunesse vers des publics
 9     ciblés comme par exemple les 3-5 ans, les 6-9, et
10     caetera, avec Passe-Partout, Robin Stella, et caetera,
11     toute une télévision éducative qui s'intéressait au
12     développement de l'enfant, ce genre de télévision
13     n'aurait probablement pas réussi à se développer à
14     l'intérieur du marché francophone.
15  2940                 Oui, on est, là-dessus, très
16     craintifs par rapport à cette reconcentration-là qui
17     est, paradoxalement, un effet pervers de la
18     multiplication des chaînes, où les grands joueurs
19     veulent se réapproprier le marché.
20  2941                 LA PRÉSIDENTE:  Alors, contrairement
21     à Radio-Canada, même s'il y a l'étroitesse du marché, 
22     cette concentration-là pour vous est nocive, et il
23     vaudrait mieux qu'il y ait moins de services de langue
24     française accessible si la seule possibilité financière
25     ou économique de les obtenir, c'est de les concentrer


 1     dans les mains des mêmes propriétaires?
 2  2942                 Je vois dans votre soumission, par
 3     exemple, que vous suggérez certains correctifs.  Si je
 4     comprends bien, par exemple, les exigences vis-à-vis
 5     soit les dépenses ou la diffusion de contenu canadien
 6     par une chaîne généraliste... elle ne serait pas
 7     comptabilisées pour rencontrer ces exigences-là si elle
 8     était répétée par un canal spécialisé dont la propriété
 9     est la même, pour obliger les canaux spécialisés à
10     avoir une programmation complètement... donc, ce sont
11     les effets de la concentration qui vous inquiètent
12     plutôt que la propriété commune en soi.
13  2943                 Mais possiblement avez-vous songé...
14     nous entendons évidemment toujours ce commentaire que
15     le marché québécois est très étroit.  Est-ce que vous
16     prévoyez la possibilité d'avoir plus de joueurs
17     corporatifs dans le marché si le Conseil ne permet pas
18     ce genre de constellation prévue par Radio-Canada?
19  2944                 M. BÉLISLE:  Un des aspects de notre
20     crainte de la concentration limitée peut-être à deux
21     joueurs est qu'on constate dans le marché, ne serait-ce
22     qu'on en parle un peu dans notre mémoire, sur
23     l'acquisition de nouveaux produits...
24  2945                 LA PRÉSIDENTE:  Excusez-moi, par
25     "deux joueurs", vous voulez dire le joueur public et le


 1     joueur privé?
 2  2946                 M. BÉLISLE:  Oui, les deux.
 3  2947                 LA PRÉSIDENTE:  Mais nous avons quand
 4     même quelques joueurs dans le secteur privé.
 5  2948                 M. BÉLISLE:  Oui, tout à fait.
 6  2949                 LA PRÉSIDENTE:  Allez-y.
 7  2950                 M. BÉLISLE:  On constate, juste pour
 8     l'acquisition de produits, lorsqu'on voit, je citais
 9     l'exemple de Radio-Canada qui va acheter des produits
10     pour sa chaîne sur des reportages et demander pour
11     trois passes, ce qui se fait très normalement pour des
12     chaînes en général, et de demander de se faire donner
13     huit passes à son canal RDI, on reproduit encore une
14     fois le même produit.
15  2951                 On a des ententes présentement avec
16     Radio-Canada sur les D-théâtres (ph.).  On pense qu'une
17     concentration de chaînes spécialisées à Radio-Canada ne
18     favorisera pas qu'on ait éventuellement d'autres
19     ententes sur ce genre de produits là. On ne voit pas la
20     diversité de pouvoir sortir avec un principe de
21     concentration dans les chaînes généralistes.
22  2952                 Sur le marché de la publicité -- on
23     en parle également dans le mémoire -- une autre crainte
24     qu'on a, évidemment, pour les chaînes qui ne
25     possèderont pas une constellation de produits, est que


 1     la concurrence et l'accessibilité à des produits va
 2     être très difficile.  Ça fait partie également des
 3     craintes qu'on a sur la concentration.
 4  2953                 LA PRÉSIDENTE:  À ce moment-là, vous
 5     vous inquiétez pour le système en général...
 6  2954                 M. BÉLISLE:  Oui.
 7  2955                 LA PRÉSIDENTE:  ... et l'effet,
 8     évidemment, que ça peut avoir sur Télé-Québec.
 9  2956                 Mais, malgré ça, à la page 5 de votre
10     soumission vous mentionnez que vous avez quand même
11     réalisé des collaborations ou des ententes avec Radio-
12     Canada.
13  2957                 M. BÉLISLE:  Tout à fait.  Dans le
14     passé on en a fait et on espère encore en faire.  Notre
15     crainte, c'est qu'éventuellement, si Radio-Canada a des
16     chaînes spécialisées, ce type de partenariat là va
17     disparaître.
18  2958                 LA PRÉSIDENTE:  Aux dépens vraiment
19     de la possibilité pour Télé-Québec de continuer d'en
20     profiter, et d'autres joueurs aussi.
21  2959                 Par exemple, dans le cas de Radio-
22     Canada, ou aussi le secteur privé, d'avoir un permis de
23     télévision généraliste et aussi un permis par exemple
24     spécialisé pour nouvelles, qui entraîne une répétition
25     mais qui quand même permet au public d'avoir l'avantage


 1     au moins de revoir cette programmation-là dans un
 2     créneau horaire différent, vous ne voyez pas ça comme
 3     un avantage pour l'auditoire qui vaut le risque que
 4     vous mentionnez?
 5  2960                 M. BÉLISLE:  On peut comprendre
 6     qu'effectivement il y a un avantage pour l'auditoire,
 7     mais il faut voir qu'à long terme, si pour l'auditoire
 8     c'est dans d'autres créneaux que les autres joueurs
 9     vont être affectés, je pense qu'il faut en tenir compte
10     également.
11  2961                 M. INCHAUSPÉ:  Madame, ce que nous
12     voulons dire, c'est la chose suivante:  On n'est pas
13     contre la multiplication des chaînes, on sait que c'est
14     le jeu, sauf qu'un marché, quand on introduit de
15     nouveaux joueurs, a besoin d'un certain temps pour
16     retrouver des équilibres.  Nous constatons au moins
17     dans un premier temps que ce qui est en train de se
18     constituer, c'est la concentration, c'est des formes
19     d'intégration qui détruisent l'effet qu'on recherchait.
20  2962                 Si on introduit encore d'autres
21     joueurs, qu'est-ce que ça va faire?  C'est une loi
22     qu'on dit non écrite, la multiplication entraîne aussi
23     la concentration; c'est aussi une loi du marché; il ne
24     faut pas se faire d'illusions.
25  2963                 Ce que nous vous soumettons, c'est


 1     que relativement à la problématique que vous abordez,
 2     qui est d'abord dans un premier temps celle de
 3     l'ouverture, je pense qu'il faut aussi regarder, comme
 4     quand on joue aux échecs, au deuxième ou au troisième
 5     coup qu'est-ce qu'il peut se passer et peut-être
 6     prévoir des mécanismes de telle façon que ces effets
 7     n'aient pas lieu.  Tant mieux si ces craintes ne sont
 8     pas là.  Nous sentons déjà des phénomènes de cet ordre,
 9     mais peut-être que dans quatre ans, cinq ans, le
10     marché, s'il était le même, se remettrait en place;
11     enfin, l'introduction de joueurs nouveaux peut créer de
12     nouveau des perturbations à l'intérieur du marché.
13  2964                 C'est simplement ça:  ces équilibres
14     qui nous semblent être la perspective qui est la vôtre
15     de l'existence aussi toujours, comme nous, à
16     l'intérieur de cet élément-là, dans l'ouverture qui est
17     faite à l'heure actuelle, au moins dans un premier
18     temps ce n'est pas nécessairement ça qui se passe.
19  2965                 C'est tout.
20  2966                 LA PRÉSIDENTE:  Alors vous préconisez
21     à ce moment-là un frein à la multiplication des canaux
22     spécialisés, surtout quand ils sont sous la même
23     propriété, quand ils représentent la concentration, et
24     deuxièmement, une certaine protection pour vous s'il y
25     avait une meilleure harmonisation de la procédure


 1     d'attribution de fonds pour la programmation et une
 2     distribution plus objective qui, à ce moment-là, vous
 3     permettrait d'avoir plus facilement accès pour ce que
 4     vous, vous considérez comme des catégories sous-
 5     représentées.  Alors ce serait en ce moment des
 6     correctifs qui, pour vous, sont nécessaires au moins à
 7     court terme.
 8  2967                 M. INCHAUSPÉ:  En ce qui concerne le
 9     financement, oui, et je vais laisser Mario vous
10     indiquer les effets qu'on a constatés.
11  2968                 M. CLÉMENT:  C'est parce que ce qu'on
12     observe, nous, dans la multiplication des chaînes,
13     c'est qu'on est en train de superposer des mandats de
14     télévision et ce que devait être l'objectif des canaux
15     spécialisés au départ, c'était une complémentarité dans
16     l'offre.
17  2969                 Ce qu'on est en train d'observer, et
18     particulièrement avec les joueurs publics, c'est que le
19     concurrent, par exemple, de Télé-Québec pour
20     l'acquisition de certaines émissions, pour le cinéma,
21     et dans le développement de certaines émissions
22     culturelles, c'est Radio-Canada, c'est éventuellement
23     TVOntario.  Alors on est dans des champs, nous autres,
24     qui ne sont pas rentables comme tel.  On fait de la
25     télévision dans des catégories sous-représentées, et


 1     ensuite de ça ce financement public là, maintenant, on
 2     est en train de servir une concurrence entre ces
 3     joueurs-là.
 4  2970                 Les effets pervers que ça a dans un
 5     type de programmation comme celle de Télé-Québec, par
 6     exemple, c'est qu'en bout de ligne nous, il y a cinq
 7     ans, on avait 52 semaines de production originale à
 8     offrir aux téléspectateurs, il y a trois ans on l'a
 9     baissée à 40 semaines, cette année c'est rendu 31
10     semaines; ceci veut dire que dans les 20 semaines qui
11     vont suivre les 31 semaines entre le 1er septembre et
12     le 1er avril, ça va être de la répétition.  Si ça
13     continue comme ça, si d'autres chaînes qui viennent
14     superposer leur mandat à celui de Télé-Québec, c'est
15     bien évident que ce sera 26 semaines la prochaine fois.
16  2971                 Alors nous, on est en train d'essayer
17     de structurer une programmation autour de produits qui
18     ne sont pas rentables, et ensuite de ça on va créer
19     d'autres joueurs qui vont venir s'agglutiner autour des
20     mêmes financements, et à ce moment-là le rôle que nous
21     autres, on est supposés jouer, on le joue d'une façon
22     moins pertinente.
23  2972                 Alors c'est le problème actuellement
24     de croissance que nous autres, on vit.
25  2973                 M. BÉLISLE:  Si vous permettez, il y


 1     a également la question -- et je pense que c'est
 2     indissociable -- d'ajouter des canaux spécialisés avec
 3     le mode de financement actuel et la capacité des fonds
 4     publics; on est inquiets, on ne pense pas qu'il va y
 5     avoir un ajout de fonds publics, pas à court terme à
 6     tout le moins.  Et les effets qu'on a constatés cette
 7     année dans notre programmation, je pense que le Conseil
 8     a été très sensibilisé:  on est arrivés au fonds, et en
 9     dedans d'une heure il n'y avait plus de sommes d'argent
10     disponibles.
11  2974                 Dans cette perspective-là, on se
12     demande comment est-ce qu'il y a de nouveaux joueurs
13     qui s'ajouteraient avec encore la même masse
14     financière, qu'on va améliorer la qualité des émissions
15     canadiennes et même les contenus canadiens.
16  2975                 LA PRÉSIDENTE:  Quand vous parlez de
17     nouveaux joueurs, vous voulez dire des vraiment
18     nouveaux joueurs et des permis accordés à des joueurs
19     existants?
20  2976                 M. BÉLISLE:  C'est exact.
21  2977                 LA PRÉSIDENTE:  Vous voulez dire des
22     nouveaux services.
23  2978                 M. BÉLISLE:  Oui.
24  2979                 LA PRÉSIDENTE:  Maintenant, vous
25     recommandez à la page 13 que le Conseil ne devrait pas


 1     permettre à Radio-Canada d'exploiter d'autres licences
 2     de canaux spécialisés.  Est-ce que cette
 3     recommandation-là s'étendrait aussi à ceux qui oeuvrent
 4     dans le domaine en ce moment et qui ont eux-mêmes aussi
 5     un permis de télévision généraliste ou est-ce que c'est
 6     un problème que vous identifiez pour Radio-Canada en
 7     particulier?
 8  2980                 M. INCHAUSPÉ:  Je pense que, s'il y a
 9     eu ceci, c'est parce qu'il y avait une question
10     spécifique qui concernait... et c'était une réponse à
11     une question spécifique.
12  2981                 LA PRÉSIDENTE:  Maintenant je vous en
13     pose une autre spécifique, qui est:  Est-ce que vous
14     avez le même problème avec le secteur privé?
15  2982                 M. LAGACÉ:  Oui.  Là-dessus, on est
16     très sensibles à l'équilibre qui doit exister entre le
17     secteur public et le secteur privé au Québec.  En ce
18     sens-là, sur cette question-là, on a longuement
19     discuté, et le problème qui nous touche le plus, c'est
20     le phénomène de la concentration.  On ne voudrait pas
21     que notre intervention fasse que le secteur public et
22     Radio-Canada soient comme émasculés de ces capacités
23     d'intervention sur le marché de la télévision
24     francophone.  Si c'était le cas, ce serait pour nous
25     négatif.


 1  2983                 Ceci dit, on est conscients qu'il
 2     faut être particulièrement attentifs et vigilants par
 3     rapport à la Société Radio-Canada, qui, elle, reçoit
 4     des fonds publics et des mandats spécifiques, et c'est
 5     normal que notre vigilance là-dessus est plus grande à
 6     cause de ces modes de financement.
 7  2984                 Ceci dit, on est très sensibles à
 8     l'équilibre, et si notre souhait était clair, ce serait
 9     d'être très vigilants par rapport particulièrement à
10     l'intégration des diffuseurs conventionnels ou des
11     chaînes spécialisées avec des distributeurs, et
12     caetera, qui fait qu'il se mette à y avoir des
13     contrôles de parts de marché.
14  2985                 LA PRÉSIDENTE:  Je crois que ce qui
15     devrait nous intéresser, évidemment, c'est que vous
16     concluez dans votre soumission écrite, particulièrement
17     par exemple à la page 5, qu'il y aura une dilution de
18     la qualité -- non, c'est à la page 7, je crois -- que
19     l'effet sera éventuellement de diluer la qualité de la
20     programmation offerte parce que les nouveaux services
21     verront la nécessité de répondre à une demande toujours
22     accrue.  Donc il y aura le même argent, mais la
23     programmation sera moindre.
24  2986                 C'est évidemment une position
25     différente de celle de Radio-Canada, par exemple, qui


 1     dit que les constellations, c'est le futur, et nous
 2     pourrons donner plus de qualité si nous avons plus de
 3     force de base économique pour y arriver.  Évidemment,
 4     vous avez un mandat différent et vous voyez le
 5     développement différemment.
 6  2987                 Ce matin dans votre présentation
 7     écrite à la page 2, le dernier paragraphe avant la
 8     partie où vous discutez des effets de la multiplication
 9     des canaux spécialisés, pouvez-vous me dire, quand vous
10     dites:
11  2988                      "Ce qui nous préoccupe, c'est
12                            l'impact que peuvent avoir...
13                            une libéralisation complète de
14                            l'accès aux chaînes
15                            spécialisées..."
16  2989                 Quand vous parlez de l'accès aux
17     chaînes spécialisées, vous voulez dire l'accès aux
18     permis des chaînes spécialisées...
19  2990                 M. CLÉMENT:  Oui.
20  2991                 LA PRÉSIDENTE:  ... pas l'accès des
21     abonnés aux chaînes spécialisées.  Je comprends.
22  2992                 Je vous remercie, messieurs.  Nous
23     vous remercions d'être venus de Montréal nous voir et
24     nous espérons que vous aurez un bon voyage de retour. 
25     Et je suis certaine que Mme Bertrand est aux écoutes.


 1  2993                 Me BLAIS:  Madame Wylie, j'aurais
 2     quelques petites questions, si vous me permettez.
 3  2994                 LA PRÉSIDENTE:  Oh, pardon, Monsieur
 4     le Conseiller juridique.  Allez-y.
 5  2995                 Pardon, maintenant M. le Conseiller
 6     Cardozo a une question.
 7  2996                 CONSEILLER CARDOZO:  Je m'excuse. 
 8     Merci.
 9  2997                 J'aimerais savoir votre point de vue
10     clairement sur la question de multiplication.  Vous
11     avez des problèmes avec la concentration verticale et
12     aussi des problèmes avec la multiplication des canaux
13     spécialisés.
14  2998                 Est-ce que c'est correct que vous
15     préférez le statu quo pour quelques années?
16  2999                 M. INCHAUSPÉ:  En ce qui concerne le
17     problème de la concentration, c'est un problème nouveau
18     qu'on vous soumet.  Je pense que de toute façon, ce qui
19     a lieu là va avoir lieu.  Donc, en conséquence, vous
20     aurez à affronter cette question pour savoir comment
21     faire en sorte que vous n'obteniez pas, en libéralisant
22     le marché, l'effet contraire de ce que vous cherchiez.
23  3000                 En ce qui concerne la question des
24     canaux spécialisés, là-dessus, on vous donne un certain
25     nombre de conditions qui sont nécessaires pour avoir


 1     ces permis dont il faudrait tenir compte.  Maintenant,
 2     si vous apportez un problème de jugement global, nous
 3     constatons le fait suivant; c'est que l'introduction
 4     des canaux spécialisés s'est faite en trois temps. 
 5     Entre le premier mouvement et le deuxième mouvement il
 6     y a eu sept ans; le marché a pu se faire organiser; le
 7     deuxième a eu deux ans.  Nous, nous n'avons vu
 8     concrètement les effets que cette année relativement à
 9     la programmation... ce qui nous préoccupait, c'était la
10     programmation.
11  3001                 L'existence de nouveaux joueurs a
12     créé un certain nombre de problèmes; on va se
13     réajuster, mais enfin, ça a créé un certain nombre de
14     problèmes et nous craignons, s'il y a de nouveau, très
15     rapidement, une ouverture encore complète sans que des
16     règles précises que vous avez établies pour l'accès ou
17     des éléments de cet ordre, que ça ne fasse que
18     perpétuer le phénomène que nous avons vécu.
19  3002                 C'est une question de sagesse et de
20     jugement à la fois sur les configurations et sur le
21     rythme.  Il y a déséquilibre.  L'introduction très
22     rapide... les joueurs, il leur faut un certain temps
23     pour s'ajuster.  C'est comme ça, la réalité dans
24     laquelle on est.
25  3003                 C'est la raison pour laquelle on


 1     soumet à votre jugement et à votre sagacité -- vous
 2     êtes des sages -- ce problème, qui est d'abord à long
 3     terme, celui de la concentration qui s'en vient, qui
 4     est l'autre étape, que vous ne pourrez pas éviter, et
 5     la deuxième, c'est les effets de la multiplication, les
 6     sources de revenus étant les mêmes, et caetera, ces
 7     phénomènes-là, qui est dans quel rythme on introduit et
 8     à partir de quels critères.
 9  3004                 Je n'ai pas plus que ça.  On voulait
10     en tout cas vous donner quelques indications des
11     préoccupations que nous avons et suggérer quelques
12     moyens, nous semble-t-il, qui pourraient le faire,
13     mais, comme on vous le dit, ce n'est pas exhaustif,
14     nous n'avons pas la vue générale, mais simplement à
15     partir de l'observation que nous avons faite, nous
16     avons déjà constaté ces mouvements.
17  3005                 Donc c'est ça que nous voulions vous
18     dire.
19  3006                 M. CLÉMENT:  Moi, je voudrais donner
20     un exemple concret de ce que ça a produit, par exemple,
21     cette année.
22  3007                 Il y a deux ans il y a eu une
23     émission de quelques cinq ou six licences pour le
24     Québec.  La première année, les gens ont eu le temps
25     de... c'est-à-dire qu'ils étaient beaucoup plus


 1     préoccupés à préparer l'entrée en ondes que se
 2     structurer en termes de programmation.  Alors on a fait
 3     une programmation qui était balancée en contenu
 4     canadien et en acquisitions pour respecter les règles,
 5     mais ensuite de ça les gens ont voulu arriver avec des
 6     projets plus structurants.
 7  3008                 Télé-Québec, avec le même budget il y
 8     a deux ans que cette année, a un manque à gagner en
 9     termes de financement, c'est-à-dire de valeur de
10     production, d'au-delà de 7 millions de dollars. 
11     L'exemple concret de ça, c'est que, pendant que nous,
12     on était en train de travailler sur des projets, par
13     exemple, documentaires... on voulait avoir une case
14     documentaire pour être capables de vitaliser un milieu,
15     le milieu du documentaire, qui souffre énormément
16     actuellement de ça.
17  3009                 On avait un projet, nous autres, qui
18     était de 26 documentaires originaux, par exemple, dans
19     une case de documentaires sociaux.  Avec ce qui est
20     arrivé au Fonds des câblos, nous, on a eu six projets
21     qui se sont réalisés sur 20 pour une raison très
22     simple; c'est que ce qui passait au Fonds des câblos,
23     naturellement, c'était du produit qui n'avait pas
24     besoin d'être analysé ni chez nous, ni à Téléfilm
25     Canada.  Donc ce qui s'est classé là-bas, ce qui est


 1     allé chercher du financement, c'est un type
 2     d'émissions, je dirais que ce sont des projets moins
 3     structurants que ce que nous, on voulait mettre de
 4     l'avant.
 5  3010                 Ceci fait qu'on a pris l'argent qui
 6     était disponible pour nous en termes de licence pour
 7     ces documentaires-là puis on est allés sur le marché
 8     international pour acheter ça, ce qui fait qu'on a pris
 9     l'argent des Canadiens et on est allés le dépenser à
10     l'extérieur; on n'a pas pu être des leviers économiques
11     pour être capables de mettre sur pied des projets que
12     nous, on considère comme vitaux.
13  3011                 Alors c'est un peu l'effet qu'on a. 
14     Et on se dit si jamais on est devant le même phénomène
15     dans deux ans, on va exactement être à la même place. 
16     Et comme nous, le rôle qu'on a à jouer dans le secteur
17     de la jeunesse, dans le secteur culturel, dans le
18     secteur documentaire, dans le secteur du cinéma, du
19     court métrage, on ne sera plus capables de le jouer,
20     alors que les projets qui vont être faits ailleurs en
21     contenu vont être, je dirais, moins structurants.
22  3012                 Pour nous, c'est important de dire
23     que l'argent public doit servir à vitaliser ces
24     milieux-là parce que ce n'est pas dans l'industrie
25     privée qu'ils vont le faire, c'est à nous de le faire. 


 1     Alors s'il y a moins de financements qui sont
 2     disponibles, c'est clair que le rôle qu'on va avoir à
 3     jouer maintenant va être moins structurant.  Pour nous
 4     autres, c'est une inquiétude, ça.
 5  3013                 M. INCHAUSPÉ:  Non seulement une
 6     inquiétude de ce point de vue, c'est aussi une
 7     inquiétude de la mission d'une télévision éducative;
 8     nous pensons que c'est l'enracinement qui est important
 9     et que les acquisitions extérieures ne nous permettent
10     pas cet enracinement et qu'à terme, ils ne soient pas
11     intéressés si ce sont des émissions qui sont faites
12     ailleurs, dans lesquelles on ne se retrouve pas.  On a
13     cette double inquiétude.
14  3014                 CONSEILLER CARDOZO:  Merci beaucoup.
15  3015                 Merci, Madame la Présidente.
16  3016                 LA PRÉSIDENTE:  Maître Blais.
17  3017                 Me BLAIS:  Quelques petites questions
18     de précision.
19  3018                 Je remarque qu'hier l'Association des
20     télévisions éducatives ont fait des recommandations
21     relativement à des documentaires en général, tandis
22     qu'aujourd'hui, vous, vous mettez l'emphase sur ce que
23     vous appelez les grands documentaires.
24  3019                 Est-ce qu'il y a une spécificité du
25     marché francophone qui vous amène à mettre l'emphase


 1     sur cette catégorie plutôt que les documentaires en
 2     général?
 3  3020                 M. CLÉMENT:  Non.  Moi, je ne vois
 4     pas de différence.
 5  3021                 Me BLAIS:  Mais, quand même, vous
 6     soulignez la notion de grands documentaires; vous
 7     utilisez cette phrase dans vos soumissions.
 8  3022                 Est-ce qu'on doit comprendre une
 9     définition particulière pour ce genre de documentaires?
10  3023                 M. CLÉMENT:  Écoutez, le
11     documentaire, ce sont des budgets qui peuvent varier
12     entre 100 000 $ et 300 000 $ à 400 000 $.  Le grand
13     documentaire, pour nous, c'est une question finalement
14     budgétaire.
15  3024                 Fondamentalement, ce qu'on voudrait
16     éventuellement développer, c'est le grand documentaire,
17     c'est-à-dire un produit qui, au niveau de son contenu
18     et de sa forme et de la production qu'on peut y mettre,
19     des coûts de production qu'on peut y injecter, un
20     projet qui va être durable.
21  3025                 Alors, quand on parle de grand
22     documentaire, pour nous, c'est beaucoup plus sur sa
23     durabilité, sur sa capacité d'exportation, des choses
24     comme ça.  Fondamentalement, on a le même phénomène. 
25     Qu'on parle de documentaires ou de grands


 1     documentaires, pour nous, il y a une difficulté, et
 2     elle est aussi bien pour le documentaire que pour le
 3     grand documentaire et encore plus du côté du grand
 4     documentaire.
 5  3026                 Me BLAIS:  Dans vos recommandations
 6     aussi vous utilisez l'expression "dramatiques lourdes". 
 7     J'ai eu la discussion avec Mme Baillargeon hier à
 8     savoir comment définir ce qu'était une dramatique
 9     lourde et je lui ai demandé de déposer une définition
10     d'ici le 15 octobre.
11  3027                 Est-ce que ce serait possible pour
12     vous aussi, étant donné que vous faites des
13     recommandations reliées à cette notion, de nous fournir
14     une définition de ce que vous entendez par "dramatique
15     lourde"?
16  3028                 M. CLÉMENT:  Écoutez, on va vous en
17     fournir, une définition.  Moi, je vous dirais
18     spontanément que la définition d'une dramatique lourde,
19     c'est des valeurs, en fait, budgétaires.  Une
20     dramatique lourde, ça vaut à peu près entre 800 000 $
21     et 1 million de dollars l'heure; les semi-lourdes,
22     qu'on appelle -- c'est la nouvelle tendance qu'on a
23     développée; à la place de le tourner en cinéma, on le
24     fait en vidéo -- c'est aux alentours de 400 000 $,
25     500 000 $ l'heure.  Alors pour moi, le vocabulaire de


 1     ça, il est moins philosophique que très pragmatique en
 2     termes budgétaires.
 3  3029                 Alors on pourra éventuellement
 4     ajouter un peu de chair autour de cette définition-là,
 5     mais globalement, c'est cette approche-là qu'on va
 6     avoir, nous.
 7  3030                 Me BLAIS:  D'ici le 15 octobre si
 8     c'est possible?
 9  3031                 M. CLÉMENT:  Tout à fait.
10  3032                 Me BLAIS:  Par ailleurs, quand vous
11     parlez des fonds et de l'accès aux fonds, vous demandez
12     que d'autres genres d'émissions ou types d'émissions,
13     puissent y avoir accès, dont les documentaires, les
14     arts de la scène et les productions d'émissions pour
15     enfants.
16  3033                 Est-ce que vous aviez des
17     pourcentages en tête spécifiques pour ces catégories? 
18     Est-ce qu'on doit les voir globalement ou est-ce que
19     vous recommandez que le fonds mette X pour cent pour
20     chacune de ces trois catégories de production?
21  3034                 M. LAGACÉ:  Honnêtement, là-dessus,
22     la discussion était plutôt sur les émissions sous-
23     représentées, et on n'a pas vraiment travaillé en
24     termes de pourcentage identifié pour chacune des
25     catégories.  On pense que les trois catégories sont


 1     sous-représentées et on était intéressés dans les trois
 2     catégories.  Alors on n'a pas discuté sur des
 3     pourcentages exactement dans le fonds.
 4  3035                 Me BLAIS:  Merci.
 5  3036                 LA PRÉSIDENTE:  Je vous dis au revoir
 6     une deuxième fois.
 7  3037                 M. BÉLISLE:  Merci beaucoup.
 8  3038                 LA PRÉSIDENTE:  Nous allons
 9     maintenant prendre une pause et nous reprendrons à
10     11 h 10.  We will be back after a coffee break at ten
11     after eleven.
12     --- Short recess at / Courte suspension à 1055
13     --- Upon resuming at / Reprise à 1115
14  3039                 THE CHAIRPERSON:  Madam Secretary,
15     would you invite the next participant, please?
16  3040                 MS BÉNARD:  Thank you, Madam Chair.
17  3041                 The next presentation will be by
18     Friends of Canadian Broadcasting and I would invite Ms
19     Golfman to introduce her colleagues.
21  3042                 MS GOLFMAN:  Good morning, Madam
22     Vice-Chairperson and Members of the Commission.  My
23     name is Noreen Golfman.  I am a Professor of English
24     literature and film studies at Memorial University in
25     St. John's, Newfoundland.  I am also President of the


 1     Association of Canadian College and University Teachers
 2     of English and in my spare time I chair the Steering
 3     Committee of the Friends of Canadian Broadcasting.
 4  3043                 I would like to introduce my
 5     colleagues to you today.  To my left is Maggie Siggins,
 6     noted Canadian journalist, writer and member of the
 7     Friends' of Canadian Broadcasting Steering Committee
 8     from Regina; to my far right is Arlan Gates, former
 9     President of the University of Winnipeg Students'
10     Association, currently studying law at the University
11     of Toronto and principal author of the research report
12     appended to Friends' submission entitled "What's on
13     TV"; and Ian Morrison, our spokesperson, to my right.
14  3044                 We applaud the way you have
15     positioned this hearing in your Vision Action Calendar. 
16     The broad scope of your public notice is both
17     appropriate and timely.  We have also been highly
18     impressed by your willingness and capacity to reach out
19     to the interested public in advance of this hearing,
20     including the substantial series of experimental public
21     forums you organized in June and your intention to
22     encourage informal public input following the end of
23     this formal hearing is a positive step, entirely
24     consistent with your outreach strategy.
25  3045                 Nous applaudissons le positionnement


 1     de ces audiences au calendrier des activités publiées
 2     dans le cadre de votre Vision.  L'envergure de votre
 3     avis public est tout à fait à propos.  Nous avons été
 4     très impressionnés de votre ouverture et de votre
 5     détermination à inclure les membres du public, surtout
 6     lors des consultations et réunions que vous avez tenues
 7     à travers le Canada au mois de juin.
 8  3046                 Nous voyons également d'un oeil très
 9     positif votre initiative en invitant les citoyens à
10     vous soumettre leur opinion formellement à la suite de
11     ces audiences.  Cette initiative colle parfaitement à
12     votre stratégie d'ouverture et d'écoute du public.
13  3047                 In this brief presentation we want to
14     highlight two key issues: threats to local programming
15     and what you describe as "equitable" financial
16     contributions by major station groups.
17  3048                 Maggie?
18  3049                 MS SIGGINS:  To comprehend the wide
19     world, we must understand our own communities, how they
20     are built, how we play a role in them.  Television is
21     the most powerful instrument I can think of in
22     providing us with a sense of our own unique environment
23     and showing us how we belong.  It is a crucial home
24     team training ground for those creative people, the
25     actors, writers, set designer, journalists, who would


 1     surely leave a small city like mine if their talents
 2     were neglected.  Yet in recent years budget cuts have
 3     greatly diminished the presence of the CBC in regions
 4     such as Saskatchewan.
 5  3050                 Certainly CBC programs have been
 6     Canadianized, but at what expense to local viewers? 
 7     The schedule is now driven by national programming,
 8     supplemented, if necessary, by repeats.  We note with
 9     regret that the CBC's brief does not even refer to its
10     local and regional responsibilities.  Over the past 15
11     years viewing of CBC's local television programming has
12     declined from ten per cent of all Canadian viewing to
13     just three per cent.  In prime time, the audience is
14     virtually non-existent.
15  3051                 Many private broadcasters and multi-
16     station owners like Canadian content about as much as a
17     kid does broccoli.  It is eaten under duress and only
18     so dessert can be served; in this case, high-
19     profit/low-cost American programs.  Scheduling regional
20     or local product during prime time would be like
21     putting broccoli on the dessert menu.  The most
22     important message which Friends wishes to convey is
23     that the local and regional programming is threatened.
24  3052                 Through the Broadcasting Act,
25     Parliament has clearly indicated that it recognizes the


 1     importance of local television and that it intends the
 2     broadcasting system to pay careful attention to the
 3     regions.  The Act states that the program should "be
 4     drawn from local, regional, national and international
 5     sources."  Each has equal weight.  "Local Canadian
 6     stations" are given priority in the distribution
 7     system.  The national public broadcaster is charged
 8     with reflecting "Canada and its regions to national and
 9     regional audiences while serving the special needs of
10     these regions", and the Act specifically directs the
11     Commission to "take into account regional needs."
12  3053                 So, in what ways is local and
13     regional expression threatened?  Friends undertook to
14     find out by commissioning original research.  We picked
15     Winnipeg as a typical Canadian television market and
16     focused on local choices available to viewers in south-
17     central Manitoba from Winnipeg-based conventional
18     broadcasters.  We also gathered some comparative data
19     from the lower mainland of British Columbia.
20  3054                 Arlan?
21  3055                 MR. GATES:  Our report measured and
22     assessed the availability of local and regional
23     programming on conventional television channels in a
24     representative six-week period last autumn and winter
25     and compared their availability with compatible data


 1     from 1986/87.  Here are a few of the report's principal
 2     findings.
 3  3056                 The overall quantity of available
 4     local programs declined by 20 per cent over the 11-year
 5     period in Winnipeg, while non-news programming dropped
 6     by 38 per cent.  In 1986/87, news represented only 42
 7     per cent of local programs.  By 1997/98, news accounted
 8     for 55 per cent of a smaller universe of local shows.
 9  3057                 Local and regional programs aired on
10     Winnipeg conventional television stations dropped from
11     21 per cent of programs in 1986/87 to 16 per cent last
12     winter, but these 16 per cent of programs attracted 19
13     per cent of the conventional stations' audience, even
14     though very few of these local programs were broadcast
15     during prime time.  In Winnipeg, the availability of
16     locally-produced under-represented categories of
17     programming, drama, music and variety, declined sharply
18     over the 11-year period.  Thirty-eight non-news
19     indigenous program titles were produced in the Winnipeg
20     area each week in 1986/87, but only 16 were produced
21     last winter.
22  3058                 En terminant, presque deux-tiers des
23     bulletins de nouvelles locales étaient diffusés aux
24     mêmes heures que d'autres émissions locales.
25  3059                 Ian?


 1  3060                 MR. MORRISON:  Thanks, Arlan.
 2  3061                 Among English-speaking viewers in
 3     Canada, one-third of total viewing is devoted to
 4     Canadian programs.  This Canadian viewing has three
 5     components:  44 per cent is conventional television
 6     network programming, 28 per cent is specialty channels,
 7     and fully 28 per cent is local programs.
 8  3062                 From this study, Friends concludes
 9     that Canadians are demonstrating a major, sustained
10     appetite for local programs.  Yet the evidence we have
11     collected suggests that the supply of local programming
12     is skewed away from convenient listening and viewing
13     times.  It's decreasing even in non-peak viewing
14     periods and a substantial share, perhaps the majority,
15     of local programs are competing for audience with other
16     local programs.
17  3063                 We draw your attention to the
18     schedules of English-language conventional broadcasters
19     in several Canadian cities this past March.  Let me
20     illustrate briefly for the National Capital Region. 
21     This will be very brief, so you won't stretch your
22     necks.
23  3064                 The logic of this is during the first
24     two weeks of March of 1998, Monday through Sunday,
25     taking each of the conventional channels available in


 1     this television market in English and giving you what's
 2     on the air between 5:00 p.m. and midnight.  I just want
 3     to draw to your attention that the blue represents
 4     local programming.  So, you will see the competition
 5     between local and local.  Of course, some of the
 6     channels, as a result of, if I could say, your
 7     predecessor's policies come in, of course, with no
 8     local programming whatsoever.  You will also see on
 9     that chart that the white boxes represent foreign
10     programming and the red boxes represent Canadian, but
11     non-local programming.
12  3065                 What I wanted to highlight is that
13     Canadians are seeking out local programming.  They are
14     continuing to do so.  The choices are diminishing in
15     number, in variety and they are concentrated in two
16     off-prime time periods.  Those data are available in
17     our handout today.  They are the first two pages of a
18     number of charts and we have also made available to you
19     similar data for Halifax, Montreal, Winnipeg, Edmonton
20     and Vancouver.  This is not some aberration in the
21     National Capital Region.
22  3066                 Friends urges the Commission to make
23     the strengthening of local programming a high priority
24     and to focus on this issue in forthcoming licence
25     renewal hearings for CBC Television, CTV and the major


 1     station groups.  The second message we have for you
 2     concerns equitable financial contributions.
 3                                                        1125
 4  3067                 In the May 6 public notice, the
 5     Commission stated that "most would appear to agree that
 6     the regulatory framework should ensure that the
 7     contributions of private conventional broadcasters to
 8     Canadian programs are equitable".  Friends is among the
 9     "most" to whom you refer.
10  3068                 We restate here our recommendation
11     first made to you at the conclusion of the third
12     Network Hearing last year that 33 per cent of on-air
13     revenues be adopted as a minimum threshold for major
14     station group spending on Canadian programming.
15  3069                 We also support the recommendation of
16     others that within this, 7 per cent of on-air revenue
17     is an appropriate minimum threshold for spending on
18     under-represented categories.  However, as we pointed
19     out in our June 30 comments, in order to respond
20     substantively to the important questions that you, the
21     Commission, posed in paragraphs 12 to 26 of the public
22     notice, Friends and other public interest groups need
23     to study aggregate information on existing spending on
24     Canadian programs by each of the major station groups.
25  3070                 The next illustration I want to give


 1     you is on the chart to my right, but this is also
 2     reproduced in the second last page of the handout that
 3     we gave you this morning.
 4  3071                 This chart shows the revenues and the
 5     program expenditures of the major station groups in
 6     English language and French language conventional
 7     television in this country.  On May 6, and with minor
 8     corrections on May 15, you released these data which we
 9     have shadowed in blue.
10  3072                 These data show, for example, that of
11     the total revenue of $1.7 billion of the conventional
12     television system, the spending on Cancon was $475
13     million or 28 per cent.  That was the average for the
14     year ending August 31, 1997.
15  3073                 Within that, by the way, the
16     conventional broadcasters as a whole spent just 5 per
17     cent of the revenues on the under-represented
18     categories, so the existing data for the system as a
19     whole is 28 per cent and within that 5 per cent for
20     under-represented.
21  3074                 On August 5, the Commission released
22     further data which we have here shaded in red which
23     shows the major station groups program expenditures on
24     Cancon.  From this data, these data in red, and from
25     other publicly available information, Friends has


 1     determined TVA, for example, spends fully 40 per cent
 2     of its revenues on Canadian content, Baton spends 33,
 3     WIC spends 30 and Canwest Global only 18.
 4  3075                 Without Canwest Global dragging down
 5     this average, the other conventional broadcasters'
 6     average Cancon investment exceeded 30 per cent last
 7     year.  If Canwest Global were spending at that level,
 8     44 million new dollars would be available to finance
 9     new Canadian programs each year.
10  3076                 We are not surprised by Canwest
11     Global's failure to spend on Canadian programming. 
12     It's a consistent pattern in their corporate behaviour,
13     but it is the Commission's responsibility to ensure
14     that major station group licensees make equitable
15     contributions to finance Canadian content and your
16     Commission has clearly failed until now to do so in the
17     case of Canwest Global.
18  3077                 I noted that the Minister of Small
19     Business, Tourism and Recreation of British Columbia
20     appeared to agree with us in this regard last night.
21  3078                 We also recommend in the strongest
22     terms that the Commission make public the data in each
23     of the blank boxes on this chart on a timely basis each
24     year, beginning now.  Your public discussion with the
25     station groups in the coming weeks should be based on


 1     that information being available in public.
 2  3079                 Why is it so difficult to obtain
 3     these data?  We believe that someone is trying to
 4     conceal something.
 5  3080                 The CAB brags that 60 per cent of its
 6     members' programming is Canadian.  If they claimed 61
 7     per cent, we would congratulate them because that would
 8     be 1 per cent more than the law requires.
 9  3081                 Consistently over the years the
10     conventional private broadcasters have turned floors
11     into ceilings.  Their extreme reluctance to reveal
12     these data makes us even more sceptical when we listen
13     to their essential message at this hearing.  "Trust
14     us", they said.  Our message to you is "Trust, but
15     verify".
16  3082                 Over many years, this Commission, the
17     CBC and the taxpayers have struggled to build a
18     presence for Canada in our audio-visual system.  Your
19     challenge is to build on that achievement.  After all
20     this work, it's no compliment that Homer Simpson is the
21     most accessible character in our English language
22     audio-visual system.
23  3083                 En conclusion, Madame la Présidente,
24     nous vous demandons de souhaiter à Mme Bertrand un
25     prompt rétablissement et nos meilleurs voeux.


 1  3084                 Nous attendons vos questions.  Merci.
 2  3085                 THE CHAIRPERSON:  Thank you, ladies
 3     and gentlemen, Mr. Morrison.
 4  3086                 We understand, of course, the point
 5     you are making.  It has been made to us, as you pointed
 6     out, in some of the town hall type meetings we had
 7     across the country earlier, so I am not going to dwell
 8     on that but rather look at the specifics of your
 9     submission.
10  3087                 I hope when you are talking about our
11     predecessors you don't mean the BBG because the
12     Commission is the Commission is the Commission.  If you
13     criticize the Commission's judgment of before, it's
14     still the Commission.  You don't mean the BBG, do you?
15  3088                 MR. MORRISON:  For the record, I
16     don't mean the BBG.
17  3089                 THE CHAIRPERSON:  I hope the
18     pagination won't be a confusion.  I am using the
19     pagination at the top of your written submission where
20     it says "Public Notice CRTC98-44 page 10".  Will that
21     be the same as your pagination?
22  3090                 MR. MORRISON:  I hope so, Madam
23     Chair.
24  3091                 THE CHAIRPERSON:  Let's check.  There
25     is pagination from the faxing, I guess.  I may not have


 1     the same copy.  I am looking at your comments about
 2     some of the causes of the loss of local and regional,
 3     particularly local, programming in Ottawa, although you
 4     have stated that in your view, Ottawa is not an
 5     aberration.
 6  3092                 You say that the Commission's
 7     balancing decisions among private players in Ontario
 8     resulted in taking something away from Ontario viewers'
 9     access to local programming.
10  3093                 MR. MORRISON:  Yes.
11  3094                 THE CHAIRPERSON:  We have the same
12     page?
13  3095                 MR. MORRISON:  Yes.
14  3096                 THE CHAIRPERSON:  If you look at
15     Ottawa, I'm curious as to what you mean by that.  If
16     your conclusion is that local programming is popular,
17     couldn't one argue that by allowing further stations in
18     who do not have local programming as it relates to
19     Ottawa, but have Hamilton or Toronto programming, that
20     the result would be for Global in Ottawa to do even
21     more or more relevant local regional programming, not
22     less, since the other stations don't offer it, that to
23     distinguish itself and to make itself more popular, the
24     result of our decision on the face of it would seem to
25     me from a market perspective even to understand that


 1     dropping the local programming may make them more
 2     vulnerable, or is it because you haven't given Baton
 3     the results of your surveys?
 4  3097                 How do you reconcile this?
 5  3098                 MR. MORRISON:  You will see no blue
 6     on the chart opposite Global in Ottawa because Global
 7     operates from a common base in south-central Ontario,
 8     the Toronto market, a channel which your Commission --
 9     we won't go into the line about your predecessors,
10     Madam Chair -- has authorized to be distributed in
11     markets throughout the province of Ontario.
12  3099                 As a result, Global, and this applies
13     to WIC's channel as well, enter the Ottawa market
14     without any local obligations or any substantial local
15     programming whatsoever.
16  3100                 That places stations like CJOH at a
17     competitive disadvantage as it would other Baton
18     stations in other parts of Ontario who are trying to
19     serve local markets, like Sault Ste. Marie, Sudbury,
20     where the principal competition from other conventional
21     broadcasters is coming from a single stick operation in
22     the Toronto-Hamilton area.
23  3101                 THE CHAIRPERSON:  So when you talk
24     about the Commission's balancing decisions, you are
25     talking about the seventies when Global was licensed


 1     more than the permission given to the other
 2     participants here who do not provide local programming
 3     to enter the Ottawa markets since this is Ottawa.
 4  3102                 MR. MORRISON:  Global was licensed in
 5     1972 and it was the first time the Commission gave what
 6     they called a regional licence.
 7  3103                 Our concern is about the presence of
 8     local programming, so the decision to allow Global and
 9     then WIC, these are 1990 decisions, to extend their
10     territory throughout Ontario without any corresponding
11     obligation to program locally by the very nature of it,
12     it's a distant signal, has undermined in our view local
13     programming throughout the province of Ontario.
14  3104                 THE CHAIRPERSON:  How does that
15     answer my question as to why that would have the effect
16     on CTV, who was already in the market everywhere in
17     Ontario, to reduce its local and regional programming
18     if it's popular and is able to generate funds.
19  3105                 Are you saying that the competition
20     was such that CTV or Baton was put in a position, since
21     that's what we are talking about particularly here,
22     where it had to do the same thing as these services
23     because they were doing it and making money out of it
24     and it made them move away from being different rather
25     than emphasizing it?


 1  3106                 MR. MORRISON:  Yes.  The cheapest
 2     type of programming, of course, is imported programming
 3     from the United States.  If a major station group runs
 4     it on all its stations at the same time, that's the
 5     lowest expenditure to fill that time.  More expensive
 6     is any type of Canadian programming, even distant
 7     programming, and still more expensive is to have all of
 8     your 10 or 20 stations programming at the same time
 9     their own programs.
10  3107                 Inherently it is the case that local
11     programming is popular, but it is also relatively
12     expensive when it is averaged over the whole station
13     group's efforts.
14  3108                 You have given a substantial
15     advantage to WIC and to Global by -- your predecessors
16     have -- by allowing them access --
17  3109                 THE CHAIRPERSON:  The BBG, of course.
18  3110                 MR. MORRISON:  Yes. -- the entire
19     market of 10 million or 11 million people from a single
20     source where their competitor was operating a series of
21     independent stations, but as to the details, ask the
22     competitor.
23  3111                 We noted with a great deal of
24     interest the heartfelt recommendation from some
25     gentleman from CJOH who said at the end of his


 1     representation "I hope I don't lose my job over this"
 2     about what is happening to the availability of local
 3     shows in Ottawa.
 4  3112                 I would also commend your attention
 5     to a quite incisive article by Tony Atherton in the
 6     Ottawa Citizen.  I think we refer to it in our brief.
 7  3113                 THE CHAIRPERSON:  Yes.  I have read
 8     it.  We will come back to that.
 9  3114                 You focus on this page on the Ontario
10     situation.  We have the Ottawa evening schedule before
11     us.  You said in your remarks that that is not an
12     aberration.  What causes it in other areas, causes the
13     moving away from?
14  3115                 Is it because the same owners have
15     these stations and other markets because the Global
16     situation that you are focusing on does not necessarily
17     repeat itself in the same manner across the country?
18  3116                 If this is not an aberration,
19     although it is an illustration of the problem, what
20     causes it in other markets?
21  3117                 MR. MORRISON:  I would urge you to
22     retain that question and to pose it to people who have
23     a direct fiduciary interest for programming.
24  3118                 THE CHAIRPERSON:  You mean the
25     licensees themselves.


 1  3119                 MR. MORRISON:  Yes, starting with WIC
 2     this afternoon.  Okay?
 3  3120                 We have attached to the document
 4     which we handed here today data which parallels the
 5     data on that wall for seven cities.  I have mentioned
 6     them.
 7  3121                 THE CHAIRPERSON:  Yes. I am asking
 8     you what the cause is there since you have identified
 9     one, particularly in Ontario, that illustrates it.  You
10     blame it on our decisions to allow early in the
11     seventies and in the nineties further importation of
12     signals that do not carry local programming and in your
13     view has a domino effect on the broadcasters.  What
14     happens in the other markets?
15  3122                 MR. MORRISON:  I am delighted to
16     respond on the issue of why, that is the causes of it,
17     but I would like to say that I think the important
18     thing is for groups like the Friends and for your
19     Commission to address that question very seriously.
20  3123                 What we have presented here today is
21     not an explanation of why it has happened, but
22     objective, substantive evidence that it is happening. 
23     We have used the Winnipeg market to do that and
24     everything that my colleague, Arlan, has said here is a
25     summary of several months work that has made that case.


 1  3124                 To move from what has happened to why
 2     it has happened in markets throughout the country and
 3     to leave aside -- well, Global in fact is present in
 4     most of these markets, except until the near future
 5     probably in Alberta.
 6  3125                 What we imagine, and I am I guess
 7     repeating, is that it is the hierarchy of expense of
 8     local programming over national programming over
 9     American programming.  Without strong conditions of
10     licence from this Commission, we have witnessed a slow
11     and steady reduction, diminution, to the availability
12     of local programming.
13  3126                 You heard this morning from the
14     Saskatchewan Public Broadcaster a quite passionate
15     statement about the results in Saskatchewan.  We have
16     no Saskatchewan data to give you.  I noticed Maggie
17     Siggins nodding when they spoke.
18  3127                 It is not so much that we have the
19     answer, Madam Chair.  It is rather that we think it's a
20     fundamental question and we are asking you to consider
21     the defence of local programming as a prime
22     responsibility for this Commission in its new
23     television policy.
24  3128                 THE CHAIRPERSON:  Oh, yes, I
25     understand that.  Its just that you are here, you have


 1     done some research and you have focused on the problem,
 2     so I don't think it's in any way surprising that we
 3     would like to discuss with you what you think are the
 4     causes of that which would presumably help in resolving
 5     the results you put before us because that's not the
 6     most difficult thing to do, to expose the results, but
 7     to then look at the causes of it is the only thing that
 8     would lead one to find mechanisms to correct it.
 9  3129                 You would obviously have a great
10     concern with the proposition of the CAB which is to
11     emphasize prime time in certain categories of
12     programming because you would have a concern, I assume,
13     that that would be at the expense of -- would just
14     reinforce what seems to be happening.
15  3130                 Even if that would go some ways into
16     producing more Canadian content, which is usually red
17     in other charts, your concern, which we appreciate
18     because it has been made by other parties and is a
19     concern, is to add some blue in there.
20  3131                 MR. MORRISON:  If you look hard at
21     that, you will see just about no blue in what we call
22     prime time, what the FCC calls prime time and what you
23     would call the centre of peak viewing hours.
24  3132                 The only, I think, exception is a
25     short program that is aired by the CBC called "On the


 1     Road" on Friday nights, but it's really a network
 2     program that happens to come out of Ottawa, so you have
 3     no local programming at times when people are most
 4     likely to be watching in this market.
 5  3133                 I would like to relate that back to
 6     the financial side, if I may.
 7  3134                 THE CHAIRPERSON:  Yes.
 8  3135                 MR. MORRISON:  That is to say if we
 9     knew, and press reports indicate that as senior people
10     in our broadcasting system as Mr. Asper have said that
11     there are reasons for Global spending so little.  If we
12     knew what all the station groups were spending on the
13     various categories that are outlined on the chart
14     behind us, we could have an intelligent discussion
15     about the reasons.
16  3136                 We know that you know that
17     information because you need it in order to get the
18     aggregate.  We know that they know that information but
19     we, and I think I could say the other 30 million
20     Canadians, do not have that information.  We would have
21     a much more intelligent discussion about news,
22     spending, spending on under-represented categories,
23     everything, if that information were on the table.
24  3137                 THE CHAIRPERSON:  Yes.  It would be
25     more informative, but we wouldn't be able to have the


 1     very dramatic comparisons that are made without the
 2     reasons why, which we will go into, I suspect.
 3  3138                 Right now what is the comparison that
 4     you are making is the strict percentage of expenditures
 5     without looking into who spends on what category and
 6     what returns, et cetera, because you feel you don't
 7     have the data that is sufficient.
 8  3139                 MR. MORRISON:  Well, it's not a
 9     feeling.  It's actually not on the table.  We and about
10     20 other organizations who went through the formal
11     process asked you for the data.  We feel we need it to
12     intelligently comment on the questions.
13  3140                 For example, I am just looking at the
14     issue of one to five information programming.  It would
15     be wonderful to know what Baton and Global and CHUM are
16     spending on that or what they are spending on seven to
17     nine, but the information is not in the public domain. 
18     We don't see a public policy reason to withhold it.
19                                                        1145
20  3141                 THE CHAIRPERSON:  And I presume you
21     would also want to know what revenues flow from each
22     category you spend it on to have a complete picture?
23  3142                 MR. MORRISON:  Yes.  In some ways
24     that is part of the CAB's spin, which is that they want
25     Canadian programming to be profitable, maybe.  I have


 1     nothing against Canadian programming being profitable,
 2     but since the dawn of the broadcasting age and the age
 3     of television there has been a certain cross-subsidy of
 4     profits from lower cost American programming into
 5     Canadian programming.
 6  3143                 So, the CAB effort in the press
 7     release that you made public -- the facts that you made
 8     public on August 5 to position the Canadian spending in
 9     relation to the revenues derived from those programs
10     obscures the larger picture which we put before you in
11     terms of their effort related to their total capacity,
12     their total on-air revenue and other revenue.
13  3144                 THE CHAIRPERSON:  Now, solutions. 
14     You know that now we have quantitative commitments for
15     the broadcasting local news programming and you would
16     want, I suspect for at least that as a minimum, to be
17     maintained for services that are anchored in the market
18     concerned?
19  3145                 MR. MORRISON:  Yes.  We are not here
20     demanding Fraser Institute like deregulation, Madam
21     Chair.  Appropriate regulation is necessary.
22  3146                 Nor are we in a position to really
23     tell you exactly how to do your job.  It's a broken
24     record perhaps, but I on Friends' behalf have often
25     said that we trust the judgment of the Commission.  Our


 1     role we feel is to try to draw certain subjects to your
 2     attention, so that they get a little larger share of
 3     mind in your attention.  This local issue is going to
 4     require a lot of thought.
 5  3147                 THE CHAIRPERSON:  In your examination
 6     of this problem that you perceive and that is
 7     illustrated on this chart, do you make a difference
 8     between regional and local programming?
 9  3148                 MR. MORRISON:  Yes, of course, but I
10     am reminded of a comment by one of the people who
11     preceded you in that chair, Pierre Juneau, who at the
12     time of huge cuts to the CBC six or seven years ago --
13  3149                 THE CHAIRPERSON:  You are trying to
14     intimidate me.
15  3150                 MR. MORRISON:  I look forward to some
16     day when we can say that are quoting Madam Wylie.
17  3151                 In any case, he said once, "Who can
18     say that southern Alberta is not a region," when the
19     CBC decided that they would turn region into province,
20     six or seven years ago as a way to try to deal with
21     budget problems.
22  3152                 No one in this country can understand
23     the meaning of the word "region" as it exists in the
24     statute books of this country, could think that the
25     province of Ontario, for example, is a region.  Eastern


 1     Ontario is a region.  The Golden Horseshoe is a region. 
 2     The Greater Winnipeg area is a region.
 3  3153                 So, we would not accept for a moment
 4     the notion that regional equals something like the 11
 5     million people who happen to live in Ontario and
 6     certainly not the seven point something million people
 7     who happen to live in Quebec.
 8  3154                 THE CHAIRPERSON:  One of the reasons
 9     I am pointing this out is you mention the CBC's
10     legislative mandate and it does not refer to local.  It
11     refers to regional.  But you feel that the private
12     sector's responsibility for local-local programming is
13     greater, you would agree with that and that
14     regionalization by the CBC is perhaps a little more in
15     tune with their mandate, although it does carry
16     problems as well, which obviously will be looked at.
17  3155                 MR. MORRISON:  Everything we have
18     said about local with regard to the CBC applies to
19     regional with regard to the CBC, by any reasonable
20     understanding of the word "regional."
21  3156                 I would just point out to you that
22     turning that around and to say if, as you have, the
23     responsibility to try to interpret Parliament's goals
24     into active public policy, the instruments at your
25     disposal to provide incentives and the variety of


 1     things you do, the private conventional television
 2     stations are your most powerful instrument there and it
 3     is where the lion's share of your attention, in our
 4     view, should be directed.
 5  3157                 THE CHAIRPERSON:  What is your view
 6     as to whether intervention by the regulator could
 7     possibly bring some solution to the problem you
 8     perceive without preventing the greater concentration
 9     of the players and allowing more competition among the
10     large parties in one market, and this is a good
11     example.  Do you think there is something inherently
12     wrong with that if you could intrude from a regulatory
13     perspective and ensure by this intrusion the
14     responsibility of the local broadcaster to provide
15     local programming?
16  3158                 MR. MORRISON:  My colleagues on the
17     Friends' steering committee as a matter of policy
18     decided that it was far beyond the capacity of
19     ourselves or perhaps yourself to prevent concentration
20     in the broadcasting system.  Instead, our goal --
21  3159                 THE CHAIRPERSON:  Is that what you
22     think?
23  3160                 MR. MORRISON:  Instead, our goal is
24     to make the concentrators pay.  In other words, those
25     to whom much has been given --


 1  3161                 THE CHAIRPERSON:  Our significant
 2     benefits test.
 3  3162                 MR. MORRISON:  Well, someone said
 4     that that sounded a little bit of Karl Marx, but as you
 5     see we were quoting St. Luke in this brief.
 6  3163                 Having said that and recognizing that
 7     some type of restructuring in the system is inevitable,
 8     that very restructuring provides you because of the
 9     immense power and authority that your Commission has
10     under the Broadcasting Act and you can pick the verb,
11     supply the one you want, but I would say extract
12     certain commitments from concentrators.
13  3164                 It is not so much a question of the
14     diversity of voices, provided you maintain, and we
15     think it is a key thing, the one station per language
16     per market policy.  It is rather a question of
17     providing -- we trust your discretion -- a mixture of
18     incentives, expectations, conditions to ensure that the
19     phenomenon that we and so many others are bringing to
20     your attention is addressed.
21  3165                 By the way, in your agenda, I suppose
22     it's possible, people have speculated that WIC on the
23     chopping block will come to your attention before the
24     CBC hearing, but those are the two first opportunities
25     you are going to have to address this specifically.  We


 1     very strongly urge you not to let the CBC off the hook.
 2  3166                 THE CHAIRPERSON:  I hope you will be
 3     watching.
 4  3167                 Would it be fair to say that one of
 5     your concerns is that as we allow concentration and we
 6     extract benefits from it, that we be very careful not
 7     to demand so much in the so-called underrepresented
 8     categories of drama, et cetera, which is not really
 9     local and regional programming generally, that all
10     monies are spent in that area through regulatory
11     requirements and are taken away from local and
12     regional, which is something that has been expressed to
13     us if we ask during the town hall meetings what is your
14     concern.  The concern is there.  If there is too much
15     demand on that side.
16  3168                 So you see this as a balancing act
17     that the Commission has to do to respond since your
18     organization, like many others, is alarmed by the lack
19     of high level or drama type of programming which is
20     mostly American.  We want the production of that.  We
21     need financial strength and monies spent to replace
22     that, but we also have to balance against that not
23     dropping the local and regional reflection on the
24     airwaves.  Would that be fair?
25  3169                 MR. MORRISON:  It would and your


 1     question brings up several things on which I would like
 2     to comment briefly.
 3  3170                 THE CHAIRPERSON:  Yes.
 4  3171                 MR. MORRISON:  One is around the
 5     local and regional dimension of underrepresented.  I
 6     would like to draw to your attention, I hope the pages
 7     are the same, but page 25 of our brief to you contains
 8     a graphic which shows the hours of Canadian drama,
 9     music and variety programs available weekly on Winnipeg
10     conventional television stations.
11  3172                 THE CHAIRPERSON:  Except yours is in
12     colour?
13  3173                 MR. MORRISON:  No.
14  3174                 THE CHAIRPERSON:  No, it's not?
15  3175                 MR. MORRISON:  This is in the brief
16     that was submitted.
17  3176                 THE CHAIRPERSON:  Mine is
18     photocopied.  I have the same limitations as you.
19  3177                 MR. MORRISON:  Yes.
20  3178                 I am just drawing to your attention
21     that there is a huge amount of different stuff under
22     drama, music and variety.  Arlan found in the research
23     that he undertook on our behalf, which was quite
24     thorough and exhaustive, that there used to be a
25     certain amount of underrepresented programming


 1     available in the Winnipeg area in 1986, but almost not
 2     any longer the case.
 3  3179                 We also want to draw to your
 4     attention just by tracking what those four Winnipeg
 5     stations did during a six-week period of 1997-98 -- I
 6     think that's this particular chart, Arlan -- that some
 7     underrepresented categories are more underrepresented
 8     than others.
 9  3180                 So have said that, we think that the
10     best measure of effort by station groups on the under-
11     represented categories is money.  So, we have noted
12     what the CFTPA said to you and we have read most of the
13     briefs and, in fact, even tried to analyze them.  We
14     note that there is a substantial body of opinion that
15     agrees with us.
16  3181                 Indeed, we took the advice from
17     others, that one thing you could do would be to track
18     the performance of the station groups and I bring you
19     back to this chart.  It would just be a question of
20     knowing what the total line for revenue is and then
21     applying it to 7, 8, 9, if those data that you know and
22     they know were available to the rest of Canada.  We
23     still think that that 7 per cent figure is a realistic
24     target and we would like to put it before you.
25  3182                 It does compete with local


 1     programming.  We don't think it is more important than
 2     local programming or we would not have led with the
 3     local programming.  We think local programming is the
 4     biggest threat in the English language television
 5     system right now.
 6  3183                 THE CHAIRPERSON:  Mr. Gates, on that
 7     page, page 25, how do these stations in Winnipeg, in
 8     your view -- take the private stations -- how do they
 9     meet their 60/50 requirement?  It is not showing a
10     whole lot of the underrepresented categories either and
11     I think your research has shown that there is not a lot
12     of local programming either.  If you assume that they
13     are in compliance, what is your general view as to how
14     they meet their Canadian content of 60 overall and 50
15     during prime time or six o'clock?
16  3184                 MR. GATES:  They do this in a couple
17     of ways and without getting into extensive detail you
18     see in the appendices to the report we provide numbers
19     that should flesh this out, but just in embryo to
20     respond to your question.
21  3185                 THE CHAIRPERSON:  Like your general
22     view  because you must have one.
23  3186                 MR. GATES:  The general view is that
24     there is a fair amount of the evening broadcast period
25     requirements covered by local news, some of which is


 1     repeated, some of which is original broadcast and
 2     during the rest of the day there is some rebroadcast of
 3     that news and then you also find a fairly large
 4     selection of Canadian content in times that may be
 5     appropriate for certain types of programming, but not
 6     necessarily at the time of day when the most viewers
 7     are watching.
 8  3187                 I would cite children's programs
 9     coming early in the morning and other types of
10     programming, talk shows, soap operas coming in the
11     afternoon.
12  3188                 MR. MORRISON:  Could I supplement by
13     just drawing your attention, Madam Chair, to the pages
14     on Winnipeg, the colour charts which respond to the
15     Ottawa charts because we have great detail on the
16     Winnipeg market.  We picked it because we felt it was
17     in many ways representative of a lot of -- I have even
18     been able to get away with that statement in Edmonton. 
19     People nodded and said, "Yes, I suppose Winnipeg might
20     be representative."
21  3189                 But if you were to look at the four
22     conventional channels in Winnipeg, again not letting
23     the CBC off the hook, you can do some counting and it
24     is rather interesting.  For example, let's take CKY.
25  3190                 CKY, as you know, is currently


 1     affiliated during the 40-hour time period with CTV, but
 2     it is not to my knowledge a Baton station.  Just look
 3     at the 7:00 to 11:00 period there and count.  In 1998
 4     in the first two weeks of March, I am looking at the
 5     red programs and I see one, two, three, four hours and
 6     then five and a half, including that local material in
 7     prime time out of 28.  So, five and a half hours of
 8     that station's 7:00 to 11:00 programming is Canadian in
 9     the first two weeks of March of last year.  Therefore,
10     22.5 hours is foreign.
11  3191                 So, I am not accusing them of not
12     meeting the 60/50 rule, but we understand a lot of
13     techniques that stations use.  I am sure your staff can
14     give you an exhaustive briefing on it.  One, you load
15     up in the summertime when audiences are smaller.  Two,
16     you take advantage of every opportunity with 150 per
17     cent, et cetera, which adjusts your percentages and the
18     end result is that you typically have and that CKY
19     first two weeks of March is completely typical of what
20     we have seen on the Baton stations and indeed on the
21     Global stations.  We don't see much difference between
22     them in prime time.
23  3192                 I am told by my friends at Global
24     that some of the data the CBC gave you yesterday
25     understated their contribution this current autumn.  I


 1     am looking forward to seeing their correction of that.
 2  3193                 THE CHAIRPERSON:  I know, Mr.
 3     Morrison, you always say you are exposing the problem
 4     and we are supposed to solve it, but you do have some
 5     particular comments.  So I will use that as an excuse
 6     for asking you particular questions.
 7  3194                 One very specific comment is, for
 8     example, that there should be a 200 per cent drama
 9     credit for drama exhibited between 8:00 and 10:00, so a
10     much shorter peak-peak time.  I notice that this
11     perceived problem of loading in the months that are not
12     heavy viewer would be corrected by only giving this
13     credit between October and March.  So, it is a very
14     specific comment that would result in Canadian drama
15     being aired in the peak-peak hours.
16  3195                 MR. MORRISON:  If I could
17     parenthetically just say you should file that more as a
18     suggestion than a specific recommendation because you
19     have greater capacity to examine the effects of all of
20     these things and you might detect some reason that that
21     particular proposal should not be implemented.  It is
22     an example of the kind of thing that may be needed to
23     address the question.
24  3196                 We don't support the idea of a 500
25     per cent credit that some people have --


 1  3197                 THE CHAIRPERSON:  No, no.  It's a
 2     suggestion from you.  It's an excuse for me to pick
 3     something recommended that is very specific to try to
 4     ask you more specific questions about how you solve the
 5     problem you have outlined.
 6  3198                 You focus on spending and that there
 7     should be 33 per cent of revenues spent on Canadian
 8     content.
 9  3199                 MR. MORRISON:  At least.
10  3200                 THE CHAIRPERSON:  Of which -- yes. 
11     So, rather than floors and ceilings, you would like a
12     split level at least?
13  3201                 MR. MORRISON:  Well, call it a floor,
14     if you want to use the image.
15  3202                 THE CHAIRPERSON:  Floor and ceiling. 
16     What did I say?
17  3203                 MR. MORRISON:  You said -- I'm sorry,
18     the record will know what you said.  What I was trying
19     to suggest was that the word "floor" is an appropriate
20     synonym for our word "threshold."
21  3204                 THE CHAIRPERSON:  Yes, yes, but the
22     split level would presumably drive you above the floor?
23  3205                 MR. MORRISON:  Yes.
24  3206                 THE CHAIRPERSON:  You suggest 33 per
25     cent, of which 7 per cent on the underrepresented


 1     categories.  Are you envisaging this retaining the type
 2     of regulatory direction we have at the moment where
 3     there are exhibition requirements, spending
 4     requirements, the 60/50 formula and some perhaps --
 5  3207                 MR. MORRISON:  The options?
 6  3208                 THE CHAIRPERSON:  -- more particular
 7     focus on demanding local programming, or are you
 8     thinking of a complete revision of the way Canadian
 9     content is regulated?
10  3209                 MR. MORRISON:  We read your Public
11     Notice, your May 6 Public Notice, in the context of
12     your September 1997 Vision document and we note that
13     this is the first time since the early 1980s when you
14     have taken such a catholic comprehensive look at
15     television policy.  So, as a preliminary response I
16     would say if you are ever to take a look at what are
17     appropriate rules, incentives, the package, now is the
18     time and you have certainly stated in the agenda that
19     it is within the purview of your concern.
20  3210                 So having said that, we have observed
21     over a long period of time, with I am sure some
22     significant but limited exceptions, that the private
23     conventional television industry has never yet done
24     anything substantially more than what you required of
25     them for Canada.


 1  3211                 So, times may change when they may
 2     have a strong incentive to do that and I have heard
 3     some of their leaders say that this is their business
 4     plan.  We would, as Hamlet says, "so have I heard and
 5     do in part believe."  It's a question of degree, but
 6     our strong advice to you is you ought to take a look at
 7     other models now.
 8  3212                 You were listening in detail to the
 9     CAB model and you, in my judgment, exposed through your
10     questioning certain limitations to the ethicality of
11     what they proposed.
12                                                        1205
13  3213                 We think that spending is an
14     appropriate indicator.  In other words, you have to be
15     concerned with the inputs.  You cannot be concerned
16     only with the outputs for the system.  It's just not on
17     and, as you pointed out yesterday, it's not consistent
18     with the Broadcasting Act.
19  3214                 THE CHAIRPERSON:  I think that the
20     only focus on any recommendation you made that has to
21     do with scheduling is the credit.  To resolve the
22     problem, you have outlined that the Commission would
23     make recommendations that would go beyond spending and
24     also be directed to exhibitions.  You made the point
25     that local programming is not even anything that


 1     resembles even shoulder time in many cases, if there is
 2     any.  So, would you find it important that exhibition
 3     be also focused on?
 4  3215                 MR. MORRISON:  Yes.  I think that if
 5     I were you, I would think that in the policy statement
 6     that is the output of this hearing you should be
 7     establishing the framework for a series of conditions
 8     of licence and expectations that would be negotiated,
 9     extracted, the appropriate verb, from the major players
10     as they come before you in a cycle which will evolve in
11     the next year or two.  We hesitate to try to pound the
12     table and say it should be done exactly this way.  We
13     would be very pleased to accept your leadership and
14     hope that you would accept the judgment that we and a
15     lot of other public interest groups have put before you
16     about the problems that need to be addressed.
17  3216                 THE CHAIRPERSON:  You have already
18     expressed the view that there isn't something
19     inherently problematic with concentration -- am I
20     correct -- or even vertical integration from looking at
21     page 35 of your presentation and your views on allowing
22     broadcasters to have access to funds and to make
23     distributors advances and I think you talk about an
24     out-moded view of the dangers inherent in that.
25  3217                 I gather from that that


 1     concentration, vertical integration, none of that is a
 2     problem -- I do think you say in some circumstances
 3     there should be safeguards -- as long as the result of
 4     that goes to improving what is offered to the public
 5     and, in your view, it must include local regional
 6     programming as well, but that if the result with
 7     regulatory intervention is to get more out of the
 8     bigger parties, then you have no problem with
 9     concentration or even vertical integration.
10  3218                 MR. MORRISON:  One image that comes
11     to mind is of King Canute ordering the sea not to rise.
12  3219                 THE CHAIRPERSON:  That's not our
13     predecessor.
14  3220                 MR. MORRISON:  So, there are forces
15     at work that are substantial forces and maybe beyond
16     your or our control around restructuring in the
17     Canadian audio-visual industry.  Some of those things
18     can bring positive benefits and negative benefits and
19     one of your roles is to try to steer towards the
20     positive and away from the negative.  Obviously, if I
21     were inside your boardroom, that would be what I would
22     be saying to you.
23  3221                 So, it is not so much that
24     concentration is good or bad, it is, rather, that as
25     concentration takes place, you are uniquely well placed


 1     to ensure that the concentrators pay something back to
 2     the broadcasting system and it is an opportunity not to
 3     be squandered.  It is the same with vertical
 4     integration.  It is not necessarily a bad thing and
 5     some of it may strengthen the broadcasting system, but
 6     it is precisely in your question -- to evaluate it, it
 7     is neither good nor bad.  It is what it does back to
 8     your purposes and goals.
 9  3222                 To give an example -- otherwise, I
10     would be inconsistent with other documents we filed
11     before you -- vertical integration between big cable
12     and specialty channels, in our judgment, in a limited
13     capacity system, is a very bad thing.  I would commend
14     you for the Sportscope decision, by the way, which
15     seemed, in our judgment, to recognize that there are
16     inherent problems in vertical integration.
17  3223                 But in the broadcasting industry,
18     with respect to the other part of your question which
19     related to treating broadcasters in a manner that is
20     more consistent with the way that independent producers
21     are treated, recognizing that some of that is beyond
22     your immediate jurisdiction, you have a voice to be
23     heard.
24  3224                 I think we used the example in a pre-
25     Atlantis Alliance age of June 30th pointing out to you


 1     that, in our view, as we have been advised, if Baton
 2     Broadcasting were to come along and through a stock
 3     swap acquire Alliance, all of a sudden the Alliance
 4     structure of companies would be prevented from
 5     accessing certain Telefilm funds, but if Alliance
 6     Communications came along through a stock swap and
 7     acquired Baton Broadcasting, everything would continue
 8     as usual.  We didn't like that very much.
 9  3225                 THE CHAIRPERSON:  So, mainly that the
10     rules wouldn't be adjusted.
11  3226                 MR. MORRISON:  Yes, and those rules
12     are under the influence of the Telefilm people.
13  3227                 THE CHAIRPERSON:  Or that even the
14     swaps would be acceptable.
15  3228                 MR. MORRISON:  Yes.  Am I answering
16     your question?  I hope so a little bit.
17  3229                 THE CHAIRPERSON:  Sorry to interrupt.
18  3230                 MR. MORRISON:  I am happy to stop.  I
19     have seen a few other witnesses who did not answer your
20     questions, Madam Chair, and I don't want to be among
21     them.
22  3231                 THE CHAIRPERSON:  You not suggesting
23     I didn't notice?
24  3232                 MR. MORRISON:  Well, once when you
25     asked the same question ten times, I thought they might


 1     have gotten the hint.
 2  3233                 THE CHAIRPERSON:  What you are
 3     saying, obviously, is vertical integration, if it's
 4     properly managed and gets the result that we want --
 5     some people have emphasized under-represented
 6     categories, you are emphasizing local regional
 7     programming as well -- can be managed.  Other types of
 8     vertical integration, you seem to think that any
 9     advantage that could flow from it you would agree over-
10     balances the disadvantages when they are weighed, one
11     against the other.
12  3234                 MR. MORRISON:  And you can count on
13     us and they can count on us being back here when you
14     consider matters on a case-by-case basis to express our
15     views in detail.
16  3235                 THE CHAIRPERSON:  My colleagues may
17     have some questions, but these are my questions, unless
18     you have something else to admonish us about before
19     leaving.  We certainly appreciate the amount of work
20     that has been put into this.  It is very helpful.  We
21     urge you to remain friends of the Commission, as well
22     as of the industry.
23  3236                 MR. MORRISON:  I personally, as our
24     spokesperson, am not at liberty to not be a friend of
25     the Commission because again the Steering Committee, as


 1     a matter of policy, said that defending the role of the
 2     CRTC is critical to our vision of the future audio-
 3     visual environment that we want to see happen.
 4  3237                 THE CHAIRPERSON:  So, it's an imposed
 5     friendship, not a chosen one.  It's okay.
 6  3238                 MR. MORRISON:  Imposed by them.
 7  3239                 THE CHAIRPERSON:  Commissioner
 8     Cardozo.
 9  3240                 COMMISSIONER CARDOZO:  Thanks.  For
10     those who think that we are running out of things to
11     do, we need friends like that, I suppose.
12  3241                 I have a question for Professor
13     Golfman and Ms Siggins, the English majors on your
14     panel, and the other two maybe as well, but you didn't
15     tell us.
16  3242                 THE CHAIRPERSON:  You are not talking
17     about my grammar, I hope.
18  3243                 MR. MORRISON:  This one talks about
19     it and this one does it.
20  3244                 COMMISSIONER CARDOZO:  It goes to the
21     issue of the sources of raw material for Canadian
22     programming.  My observation over the last decade or
23     two has been that we have had an immense explosion of
24     very high-quality Canadian literature, fiction and non-
25     fiction, and it grows.  It reflects the culture and


 1     people very well, it reflects regions quite well.  In
 2     some of the work you have done, Ms Siggins, some of the
 3     issues you have covered recently reflects the diversity
 4     of people, of dreams, of visions, that sort of stuff.
 5  3245                 I am just wondering whether you would
 6     agree with that -- you are nodding, so I assume you
 7     agree with that -- about whether you think there is
 8     enough crossover between Canadian literature and
 9     programming, whether there should be.  I am not
10     suggesting that all novels or written works should
11     become TV movies, but are we seeing a lot of what is
12     written on TV and is there enough other sorts of
13     coverage of Canadian literature, whether it's
14     interviews with authors and coverage of literary
15     conferences and those sorts of things?
16  3246                 MS SIGGINS:  Many of us feel that one
17     of the reasons that we can have three meals a day these
18     days is that so many of the novels and non-fiction
19     works are, first of all, being optioned and, secondly,
20     produced by independent producers.  I will just think
21     of two.  In my province the very famous Guy Vanderhague
22     novel that won the Governor General's Award that I
23     think is a wonderful reflection is now in the process
24     of being made into a movie and he is writing the
25     script.  Now, how far he will get with that I'm not


 1     sure, but, yes, I feel that there really is a wonderful
 2     thing happening there.
 3  3247                 The problem is, of course, that it's
 4     hard for prose writers to switch over into television
 5     and film writing and that, of course, is where the real
 6     money is.  So, that's a process that has to -- and
 7     that, of course, is also in the documentary area, too. 
 8     It's very hard to find documentary writers where I come
 9     from because there still is a bit of a stigma about a
10     good prose writer not wanting to work for this thing
11     called television even though the money is very good.
12  3248                 But I think it is very slowly
13     happening and the more that it happens, in my mind, the
14     more you are going to get really good quality Canadian
15     programming.
16  3249                 MS GOLFMAN:  I would just extend in
17     some ways the question and the answer to a
18     consideration of the cultural vitality in general,
19     cultural practices in the regions.  Writing is the
20     obvious.  Institutionalized writing, writing that
21     sells, clearly in the last, I would say, even 20 years
22     has become an accepted vital aspect of our national
23     health.  The same is increasingly true for film
24     production, but I would say that it would be important
25     to think outside of those economically accepted


 1     categories as well and think about the local theatrical
 2     productions.
 3  3250                 I am living in a culture that has
 4     perhaps a disproportionately high creative output, some
 5     of which is now travelling beyond the island's borders. 
 6     There is so much evidence at the local for creative
 7     possibility and I guess what we are arguing in general
 8     -- and your question in some ways presumes it -- is
 9     that we need the avenues to have those cultural
10     expressions expressed more widely.
11  3251                 So, I would say it's healthy to think
12     in terms of literature and literary production
13     certainly when it is being internationally recognized
14     these days, but we need not to just limit to so-called
15     high art, I think, considerations or more traditional
16     considerations of culture.  It's important to think
17     more broadly as well.
18  3252                 COMMISSIONER CARDOZO:  Do you think
19     that broadcast media or production gives enough
20     coverage to Canadian literature talking to authors?  I
21     am thinking of the kinds of shows you get on
22     entertainment out of the U.S. or elsewhere.  I think
23     you see a lot more in the French media in Quebec where
24     there are entertainment shows where you see a lot of
25     artists and writers being interviewed, the star system. 


 1     Does that happen here enough?
 2  3253                 MS SIGGINS:  Not very much at all and
 3     I never can figure out why because a lot of writers and
 4     artists are so entertaining.  There are few people in
 5     society that still have some individuality perhaps, but
 6     not nearly enough.  I think that it's partly what has
 7     been expressed, that we think of literature somehow as
 8     a high art and that ordinary people wouldn't be
 9     interested.  If you look at the number of Canadian
10     novels that are bought every year for your grandmother
11     and your aunt, this always astounds me.  But, no, I
12     don't think, of course, that there is nearly enough
13     programs related to the arts.
14  3254                 COMMISSIONER CARDOZO:  Thank you.
15  3255                 Thank you, Madam Chair.
16  3256                 THE CHAIRPERSON:  Not only aunts and
17     grandmothers read those novels, I hope, because there
18     aren't that many aunts and grandmothers.
19  3257                 I have thought of one other question. 
20     In looking at this lack of local and regional
21     programming problem, do you have a view as to whether
22     other means may begin to be used to fulfil that
23     requirement, such as the Internet or perhaps regional
24     specialized services like Pulse24 for news in the
25     Toronto area, that in the future the satisfaction of


 1     this demand may be made in that way as well?
 2  3258                 MR. MORRISON:  That's a very good
 3     question and it's a very important question, one of the
 4     reasons I think we shared with you -- we certainly
 5     shared with journalists -- an analysis of many of the
 6     briefs that you have received according to ten topics
 7     that we thought were important in 75 interventions. 
 8     Topic number two, which was largely not addressed by
 9     the intervenors, was the question of the community
10     channel and the cable system.
11  3259                 So, I take your question as an
12     opportunity to say -- if memory serves, Madam Vice-
13     Chair, you were in Vancouver --
14  3260                 THE CHAIRPERSON:  Yes, and that is an
15     intervention when you say intervenors didn't address
16     that.  What you heard in those regional town hall
17     meetings are interventions and they are part of the
18     record.
19  3261                 MR. MORRISON:  I am glad to hear that
20     and I believed that to be the case.  I wanted to add
21     that I was not present, but it was reported to me by
22     people I trust that quite a bit of the time at your
23     five-hour session in Vancouver was devoted to issues
24     around the community channel, in particular I think the
25     Rogers community channel in Vancouver.  We have in our


 1     brief referred to the fact that we believe it to be one
 2     of the best of community channels.  By the way, it's
 3     the first time I can think of this decade that I have
 4     ever said anything about Rogers in this room that was
 5     positive.
 6  3262                 What I wanted to say to you, however,
 7     is that we have examined the community channel in many
 8     parts of the country as part of our ongoing effort and
 9     we think it is a valuable service.  We see certain
10     threats to its local origination, particularly some
11     policies of Shaw Communications that we are keeping a
12     close eye on, but I would just like to -- maybe it's
13     too strong a word -- insist that, in our view, the
14     cable company community channel is no way an adequate
15     response to the threat that we have shown you.  Even at
16     its best, it provides insufficient reflection of the
17     life and the issues of local communities in this
18     country.
19  3263                 We certainly need the capacity that
20     well-produced local television on the major television
21     stations can generate to address the question.  CBC
22     research has given us data about the audience of the
23     combined community channels across the country on a 24-
24     hour basis.  You may have seen it.  It is very rare
25     that it exceeds 100,000 Canadians.  We are talking


 1     about something that hovers below one per cent often of
 2     the viewing.  So, it is a valuable thing, it is not
 3     sufficient.
 4  3264                 New initiatives -- when you mention
 5     Pulse24, that's a Toronto initiative.  The station
 6     group CHUM seems to have some of the most skill in
 7     developing some of these things and others could learn
 8     from them.  You are going to see some of the examples
 9     this autumn on CHRO in the Ottawa area which will
10     probably change the data on this chart favourably.
11  3265                 So, all of those things are
12     necessary, but recognizing the importance of
13     flexibility -- every one of the big players has to
14     address that question in their own way.  It is not a
15     question of whether they do local, it is what kind of
16     local they do and that is the plane on which we think
17     you should address the question.
18  3266                 THE CHAIRPERSON:  Thank you, Mr.
19     Morrison.  With regard to the use of "insist", why stop
20     at suggest if you can insist?
21  3267                 MR. MORRISON:  Madam Chair, if I
22     could just add one thing, the government got around two
23     days ago to confirming reports in the Financial Post of
24     your appointment and on behalf of the Friends of
25     Canadian Broadcasting, we wish to congratulate you as


 1     the new Vice-Chair of Broadcasting of this institution.
 2  3268                 THE CHAIRPERSON:  Thank you, Mr.
 3     Morrison.  I don't know what to make of the fact that
 4     you did that at the end rather than at the beginning. 
 5     Thank you very much, ladies and gentlemen.
 6  3269                 We will now adjourn for lunch and
 7     resume at a quarter to 2:00, just to keep people on
 8     their toes.  Alors nous reprendrons à deux heures moins
 9     quart.
10     --- Luncheon recess at / Suspension pour le
11         déjeuner à 1224
12     --- Upon resuming at / Reprise à 1347
13  3270                 THE CHAIRPERSON:  Good afternoon.
14  3271                 Madam Secretary, would you please
15     introduce the next participant?
16  3272                 MS BÉNARD:  Thank you, Madam Chair.
17  3273                 The next presentation will be by the
18     Council of Canadians.
20  3274                 THE CHAIRPERSON:  Good afternoon,
21     gentlemen.  Go ahead when you are ready.
22  3275                 MR. BLEYER:  Thank you very much.
23  3276                 I would like to introduce myself.  My
24     name is Peter Bleyer.  I am Executive Director of the
25     Council of Canadians.  My colleague with me here today


 1     is John Urquhart who is our Communications Director.
 2  3277                 Right off the top I would like to
 3     present apologies from our Chairperson, Maude Barlow,
 4     who very much wished to be here, given the importance
 5     of the hearings that you are holding.  Unfortunately,
 6     she was detained elsewhere.
 7  3278                 We will make a brief presentation. 
 8     We have seen you work over the morning.  We know it's
 9     important work that you are doing and we don't want to
10     take too much of your time.  We will try and be as
11     focused as possible.
12  3279                 THE CHAIRPERSON:  Whatever time is
13     required.
14  3280                 MR. BLEYER:  Thank you, Madam Chair.
15  3281                 The Council of Canadians is a
16     national non-profit, non-partisan public interest group
17     with more than 100,000 members from coast to coast. 
18     The Council was formed in 1985 and since then we have
19     been active on a variety of key national issues,
20     including promoting Canadian culture.
21  3282                 MS BÉNARD:  Mr. Bleyer, excuse me. 
22     Could you --
23  3283                 MR. BLEYER:  Slow down, yes.
24  3284                 MS BÉNARD:  Thank you.
25  3285                 MS BÉNARD:  My apologies to the


 1     translator as well on that front.  Thank you.
 2  3286                 The Council has a vital interest in
 3     this review.  Our members have long been concerned
 4     about protecting Canada's cultural sovereignty,
 5     promoting the interests of Canadian creators and
 6     artists and encouraging greater diversity in the media.
 7  3287                 In fact, in 1996 we helped launch the
 8     Campaign for Press and Broadcast Freedom, a network of
 9     groups concerned about the increasing concentration of
10     media ownership in this country.
11  3288                 In our submission we express our
12     concern about the state of television in Canada today,
13     television broadcasting.  We highlight the fact that
14     Canadian programming at all levels is getting weaker
15     with the effect that Canadians are seeing less of their
16     own country and communities on their television
17     screens.
18  3289                 Some of the specific issues and
19     recommendations raised in our submission include the
20     following.  We recommend strengthening Canadian content
21     regulations for conventional television, particularly
22     during a new definition, we think, of peak viewing
23     time, i.e. eight to ten p.m.  Maintaining ownership
24     regulations since we believe that an increase in
25     television ownership concentration would have an


 1     adverse effect on local programming and diversity of
 2     content.
 3  3290                 Concern that an export oriented
 4     regulatory framework for Canadian television could
 5     threaten to further erode local and regional
 6     programming.  Concern that budget cuts to the CBC have
 7     hurt local programming and created a gap between the
 8     public broadcasters' mandate and the resources
 9     available to fulfil that mandate.
10  3291                 I would like to take a little bit of
11     time to provide you with some details on these issues.
12  3292                 The Commission has asked specifically
13     for comments on the adequacy of current Canadian
14     content regulations for conventional television. 
15     Despite regulations which are intended to create a
16     greater space for Canadian programming on the air
17     waves, in an effort to maximize their profits, private
18     conventional stations have simply aired the least
19     expensive programming available, which is imported
20     American programming.
21  3293                 In the case of English language
22     private television broadcasting, Cancon rules have not
23     been anywhere near as effective as they were intended. 
24     This is because they are too evasive.  As peak viewing
25     is actually between 8:00 and 10:00 p.m., Canadian


 1     content rules defining prime time as 6:00 to midnight
 2     have failed to ensure that private stations offer
 3     Canadian programming during real peak viewing hours.
 4  3294                 I won't give a whole series of
 5     examples.  That was done, I think, by our colleagues
 6     previously, the Friends of Canadian Broadcasting, but
 7     one specific example.  During the fall 1997 schedule in
 8     Toronto, the public broadcaster, the CBC, aired over 96
 9     per cent Canadian content per week while CTV and Global
10     broadcast between zero and just over 7 per cent.  Given
11     this, it is really little wonder that Canadians know
12     more about life in Miami or Los Angeles than they do
13     about life in their own communities or Canadian
14     communities such as Halifax or Victoria.
15  3295                 The Council urges the Commission to
16     take a strong stand on this issue and require private
17     broadcasters to live up to their public
18     responsibilities as they are set out under the
19     Broadcasting Act.
20  3296                 Stricter Canadian content rules are
21     required, particularly during peak viewing time.  You
22     have heard this already.  Private broadcasters
23     undoubtedly will resist any increase in Canadian
24     content regulations.  They will cite cost as the
25     principal roadblock.


 1  3297                 However, according to your own data,
 2     private broadcasters' contribution toward Canadian
 3     programming as a share of their operating profits has
 4     fallen in recent years.  Since 1993, commercial
 5     broadcasters have seen their profits soar by 52 per
 6     cent, and yet their expenditures on Canadian drama,
 7     music and variety programs has increased just 1 per
 8     cent, a decrease in real terms.
 9  3298                 Reducing current requirements for
10     Cancon is clearly not an option.  It is virtually
11     impossible to find Canada on the dial during prime time
12     as it is.  If private broadcasters are permitted to
13     reduce their existing requirements, a bad situation
14     will simply be made worse.
15  3299                 The Commission states that it is
16     interested in exploring "the best ways to ensure the
17     availability of Canadian programs that serve the needs
18     and interests of Canadian viewers that succeed in
19     international markets and that are profitable for
20     broadcasters and producers alike".
21  3300                 The Council would suggest that the
22     first two objectives as stated can run contrary to each
23     other.  The needs and interests of Canadian viewers
24     will in many cases be unique for Canadians and are not
25     easily exported to foreign markets.


 1  3301                 The danger is that by redesigning
 2     requirements to focus on success in international
 3     markets, the Commission may inadvertently encourage
 4     broadcasters to supplant local and regional programming
 5     that is more distinctly Canadian with much more generic
 6     forms of programming that is geared for export to
 7     foreign markets.
 8  3302                 The Commission has asked whether it
 9     may be necessary to ease existing ownership
10     restrictions in order to ensure the ongoing viability
11     of the private broadcasting sector.  The Council
12     submits that increased ownership concentration is not
13     in the public interest.
14  3303                 The danger of ownership concentration
15     is not only that it leads to increased market power,
16     but that it also results in the loss of diversity as
17     larger media corporations "rationalize" -- I should
18     give that the inverted commas -- their operations.
19  3304                 In television, the result is that
20     larger station groups abandon local programming and
21     produce more programs in central Canada that are then
22     broadcast to local audiences.
23  3305                 In the area of concentration, the
24     Council is also concerned about the increasing
25     concentration across different distribution systems


 1     and, as well, the trend toward greater vertical
 2     integration.
 3  3306                 To protect the public interest, the
 4     Council urges the Commission to develop clear rules
 5     governing cross-ownership concentration and vertical
 6     integration.  This policy is particularly urgent given
 7     the increasing tendency on the international stage to
 8     further deregulate trade and investment rules.
 9  3307                 The Commission has also asked for
10     comments on how CBC television can "best complement"
11     the private sector.  The Council strongly believes that
12     this is fundamentally the wrong way to frame the issue.
13  3308                 We believe the basic role of the CBC
14     should not be to complement private television, but to
15     form an essential element of the bedrock of a Canadian
16     broadcasting system.  However, the CBC has been
17     crippled in its ability to fulfil its public service
18     mandate by recent budget cuts.
19  3309                 Funding reductions have had a huge
20     impact on the CBC's capacity to produce local Canadian
21     programming.  Local newscasts have been scaled back and
22     shows have been cancelled.  The CBC has come to rely
23     upon repeat programs to fill the programming schedule. 
24     The Council believes that the CBC must continue to play
25     a major role in broadcasting that is not subordinated


 1     to the private system.
 2  3310                 To sum up, the Council of Canadians
 3     is concerned that Canadians are not seeing enough of
 4     their own country and of their own communities on the
 5     television screen.  Local programming has suffered on
 6     both the private and on the public networks.
 7  3311                 Canadian drama and documentary
 8     programs are chronically under-represented with private
 9     networks showing continuing reluctance to develop and
10     exhibit Canadian programming, as of today at least. 
11     Cuts to the CBC's budget have clearly weakened the
12     overall broadcasting system.
13  3312                 The Council urges the Commission to
14     adopt a regulatory framework that better fosters the
15     development of Canadian expression and a wide range of
16     programming that more accurately reflects the diversity
17     of Canada.  Television broadcasting in Canada is far
18     too important to be driven by a never-ending quest for
19     maximum profit.
20  3313                 As a country, as communities and as
21     citizens, we need this critical means of communication
22     to reflect our lives, our realities, if we are to
23     survive and to thrive.
24  3314                 Thank you very much.
25  3315                 THE CHAIRPERSON:  Thank you,


 1     gentlemen.
 2  3316                 Commissioner Cardozo.
 3  3317                 COMMISSIONER CARDOZO:  Thank you very
 4     much, Mr. Bleyer.
 5  3318                 From what I can tell, this is the
 6     first time in a long time since the Council last
 7     appeared before the CRTC and hopefully your experience
 8     by the time we have finished with you will make you
 9     decide whether it will be the last time you will be
10     back again.  Hopefully you will be back again.  We
11     welcome all sorts of interventions, especially by
12     citizens' groups like yours.
13  3319                 One of the specific recommendations
14     you have made in your written brief and which you
15     talked about here was the peak viewing hours between
16     eight and ten.  You have suggested a 35 per cent
17     minimum Canadian content as a regulation.  A couple of
18     questions on that.
19  3320                 Would you prefer that as a regulation
20     which is a firm across-the-board regulation that
21     everyone has to live with or would you suggest we do it
22     as a condition of licence where we would put it on one
23     by one and have more flexibility in doing it, the
24     advantage of which is that we then make an assessment
25     as to whether the particular licensee has the economic


 1     ability to do that because sometimes there are
 2     increased costs in running Canadian content during
 3     prime time.
 4  3321                 What are your thoughts about whether
 5     it should be an across-the-board regulation or a
 6     condition of licence?
 7  3322                 MR. BLEYER:  I think we would limit
 8     ourselves to a general comment on that question which
 9     would have to do with the fact that if we look at the
10     status quo today, we are facing a very problematic
11     situation in terms of the presence of Cancon in peak
12     viewing time.
13  3323                 The question is can we achieve a
14     reversal -- can you achieve, it is your role obviously
15     -- a reversal of that situation with conditions of
16     licence.  The situation is so dramatic today that one
17     wonders whether across-the-board is not more
18     appropriate.
19  3324                 I'm not clear on the details between
20     the two options, but if we were to look as an overview
21     at the situation, the concern we have is so grave, the
22     situation is so dangerous, perilous we think, in terms
23     of the lack of Canadian content, the problem of
24     continuity of decision making, despite the fact the
25     Chair today, the Vice-Chair, has pointed out that the


 1     Commission is always the Commission, the differences in
 2     how the Commission's mandate is interpreted and what
 3     rulings the Commission makes over time change, the kind
 4     of variability that is more likely to come in with
 5     conditions of licence, I can only assume with an
 6     across-the-board regulation.
 7  3325                 Can we afford to risk that at this
 8     point in our history?  Those would be the concerns we
 9     would raise, I would think, between across-the-board
10     regulation and conditions of licence.  Of course, you
11     have to deal with the very specific requests and that
12     is something that I can't comment on.
13  3326                 COMMISSIONER CARDOZO:  It's
14     interesting that you have raised this suggestion
15     because I think you are the first one or maybe the only
16     to be raising it in this hearing, but it has been
17     talked about in the past.
18  3327                 One of the problems with it was if we
19     were to put this regulation or condition of licence on,
20     broadcasters might simply run news or might move their
21     news hour into that slot or run sports, where Canadian
22     sports comes a lot easier.  Would that be okay if they
23     did that or would you want us to prescribe what type of
24     programming?
25  3328                 MR. BLEYER:  That would not be okay. 


 1     In our brief and we do speak as well in our submission,
 2     we speak to the issue of under-represented categories,
 3     so we would want -- we would hope that the Commission
 4     would consider more than just Canadian content, but the
 5     issue of what types of programming are
 6     under-represented.
 7  3329                 Obviously, were it to be another
 8     program on how Canada's businessmen are feeling this
 9     morning on television, we think there's probably enough
10     of that kind of programming.  The types of categories
11     which I assume is news, but it's even more restricted
12     than news, it's business news.  We would want there to
13     be stipulations around what kind of Canadian -- what
14     categories within Cancon.
15  3330                 COMMISSIONER CARDOZO:  One of the
16     other issues you have raised is the issue of
17     concentration or consolidation.  Depending on how one
18     approaches this question, one uses the term
19     accordingly.
20  3331                 The counter-argument to what you have
21     suggested is a problem, that concentration allows
22     greater efficiencies of scale, sharing of resources,
23     deeper pockets.  In this world where we are trying to
24     get good quality programming that is going to compete
25     against the high budget American content, having this


 1     type of deeper pockets approach allows us to have
 2     higher quality, higher expenditure programming.
 3  3332                 What do you think of that argument? 
 4     You talk about danger of increased market power.  What
 5     is the danger of increased market power?  Is there a
 6     benefit to increased market power as well?
 7  3333                 MR. BLEYER:  The short answer would
 8     be yes, there is a benefit to increased market power. 
 9     Some of that benefit accrues only to the holder of that
10     market power and some of it accrues to society at large
11     and more of the risk I think is for society for the
12     public interest and more of the benefit is for the
13     holder of that power.
14  3334                 Let me just draw a bit of an analogy.
15     The Council is concerned about concentration of
16     ownership not only in the area of communications.  We
17     are concerned about concentration of corporate
18     ownership in general, banking for example and in other
19     areas.
20  3335                 It's not so much that these areas are
21     analogous, but there is the question of in a society is
22     it safe, is it constructive, is it productive for a few
23     hands to hold so much power?  In the area of
24     broadcasting, this is even more problematic potentially
25     given the role that broadcasting plays in


 1     communications.  It is about communications.  It is
 2     about people seeing images, understanding their
 3     country, perspectives on their country and so forth, we
 4     hope on their country mostly and not on other
 5     countries.
 6  3336                 For us, there is the broader public
 7     interest of concentration in this sector as a partially
 8     corporate sector, corporate-driven sector.  There is
 9     that specific problem.
10  3337                 Certainly, as in the case with banks,
11     there is a certain level of concentration,
12     consolidation, that provides economies of scale and so
13     forth.  The question is when do you go too far and when
14     do you move to a point where that has more of a
15     negative impact on the public interest and where the
16     benefit largely accrues to the holders of that market
17     share.
18  3338                 We see the kind of so-called
19     consolidation, as they would call it, and perhaps
20     concentration as we would call it, in many instances
21     today the benefits are accruing simply to the
22     corporations who are doing that consolidation.  They
23     are not accruing to the Canadian public in terms of
24     seeing themselves, the communities, having more access
25     to local programming and local news.


 1  3339                 We can only base our perspective on
 2     the reality, on the status quo, and the reality is that
 3     in many instances concentration has been a bad thing. 
 4     We have looked also at the printed media and worked on
 5     that issue and we can see what is happening already in
 6     this country in that area.
 7  3340                 That's not to say that there aren't
 8     debatable, important debatable points within that
 9     frame.
10  3341                 COMMISSIONER CARDOZO:  Let me put to
11     you the position that the witness before you was
12     talking about.  The position of Friends was that they
13     are not against concentration, but make the
14     concentrators pay, I think is what Mr. Morrison's term
15     was.
16  3342                 Does it give you any satisfaction
17     that the Commission has the ability to say "Okay, you
18     can consolidate but these are the things you have got
19     to do in exchange of Canadian programming or whatever
20     else".  Does that offer you consolation?
21  3343                 MR. BLEYER:  Consolation is the right
22     word.  It is not ideal.  What we would like to
23     challenge, among other things, is the notion of the
24     inevitability of this concentration, that it is
25     inevitable that we move in this direction.  We are not


 1     clear that it is.
 2  3344                 Again, if we are moving in that
 3     direction and if the Commission can place stringent --
 4     I think the previous witnesses point around making the
 5     concentrators pay is quite substantial consolation to
 6     us probably if that were to happen.  The question is
 7     would that actually take place.
 8  3345                 COMMISSIONER CARDOZO:  I would like
 9     to discuss this a whole lot more but we have another
10     major one of these coming down the pipe in the next few
11     months.  Perhaps we shouldn't get too far into that
12     because there will be a proceeding.  Maybe you can come
13     to that hearing and we can carry on this discussion in
14     detail.
15  3346                 Let me talk about the other issue you
16     raised with regard to export and the other issue in
17     terms of you challenging another of, I suppose, the
18     conventional thoughts which is the export focus on
19     production, I think is the way you put it.
20  3347                 You were suggesting today and in your
21     written brief that if we export too much, we run the
22     danger of having stuff that doesn't have a lot of
23     Canadianness to it, I think is how I could paraphrase
24     that.
25  3348                 The other argument is this. 


 1     Producing television content is very expensive.  We
 2     don't have a very big market in Canada that pays for
 3     it.  When you divide it into English and French, you
 4     have even smaller markets and you have got shrinking
 5     government subsidies or public subsidies.
 6                                                        1410
 7  3349                 So one of the ways to -- and you have
 8     got shrinking government subsidies, public subsidies. 
 9     One of the ways to fund that programming is through
10     export revenues, so you produce programming that will
11     be shown here and will be exported and you have got
12     additional revenues there.  Again, that is the way you
13     can get enough money together to make the kind of
14     quality programming that Canadians will be interested
15     in watching.  So, it is again one of these conundrums. 
16     What are your thoughts on that?
17  3350                 MR. BLEYER:  First of all,
18     unfortunately, it is not the purview of this Commission
19     to make decisions on public subsidies, but we hope we
20     can turn the corner on the reductions in public
21     subsidies to broadcasting that --
22  3351                 COMMISSIONER CARDOZO:  You are
23     counting on that, are you?
24  3352                 MR. BLEYER:  Well, we are working for
25     that.  That's our role, to stay optimistic and to work


 1     and to work with Canadians to move in that direction. 
 2     We are not counting on it certainly.
 3  3353                 As for the importance of exporting
 4     quality programming, that's an interesting point and
 5     one of the ways that we could ensure that more top
 6     quality Canadian programming was developed would be to
 7     impose stricter regulations around peak viewing time.
 8  3354                 We would oblige, therefore, Canadian
 9     stations to be producing or to be working towards the
10     kind of programming that not only would attract
11     Canadians during peak viewing time, but which they
12     could also export.
13  3355                 We are not opposed to the export of
14     Canadian products.  We are just raising a warning flag
15     to the Commission that if we move too far in the
16     direction of putting an export-driven model in place --
17     I could point to a lot of export-driven models around
18     the world that in the last few months, not necessarily
19     with regard to broadcasting that are falling apart.
20  3356                 One of the ways in which they fall
21     apart, quite aside from the economic instability that
22     export-driven models have, is the fact that they can
23     undermine our ability to reflect our communities to
24     ourselves, if all we are doing is producing generic
25     fare that could be filmed anywhere really, but it just


 1     happens to be done here.  We are not actually doing the
 2     job that we think broadcasters should be doing of
 3     reflecting local communities to themselves and
 4     providing quality broadcasting.
 5  3357                 So one of the solutions would be to
 6     impose the kind of regulations or conditions of licence
 7     that would imply more Canadian programming during peak
 8     viewing time.  That would provide the kind of programs
 9     that would then be easily exportable.  But we are just
10     saying let's watch out, let's not set export driven as
11     a huge priority here.  Maybe that could be a
12     consequence of good quality programming produced for
13     Canadians.
14  3358                 Some of that programming produced for
15     Canadians will not be, you know -- we could use an
16     example like "This Hour Has 22 Minutes."  Now, of
17     course it is on CBC, Salter Films.  Without getting
18     into the details, there is a bunch of stuff that is
19     produced that is high quality, that's good, that's very
20     Canadian and nobody anywhere else would understand it
21     or want to watch it.
22  3359                 COMMISSIONER CARDOZO:  Okay.  So you
23     are not opposed to it, but you are raising a warning?
24  3360                 MR. BLEYER:  Yes.  We think the
25     notion of the export driven model is a problem.  If


 1     that is the top priority that is a big problem, but
 2     exporting quality Canadian programming is one of the
 3     things that Canadian produces need to do in order to
 4     make revenue.
 5  3361                 COMMISSIONER CARDOZO:  The producer
 6     or the head of Salter Street was here with another
 7     presentation I guess yesterday.  She was making the
 8     point that they have done -- three of their top
 9     productions are "22 Minutes," "Emily of New Moon" and
10     "Lexx."  "22 Minutes," as you know, doesn't have
11     exportability.  "Emily of New Moon," which is based in
12     P.E.I. actually does have a lot of exportability, but
13     at the same time is quite clearly Canadian.  "Lexx" is
14     not and perhaps more generic, to use your word, but is
15     also good exportability.  Is that sort of okay?
16  3362                 MR. BLEYER:  Far be it -- a company
17     that produces "This Hour Has 22 Minutes" is okay by me,
18     on a personal level.  They can do anything else they
19     want after that.  That's my personal opinion of course.
20  3363                 The notion that you can produce
21     quality programming that is relevant to Canadians -- if
22     we are going to reflect Canada to Canadians and we are
23     also going to reflect Canada to the rest of the world,
24     more power to us.
25  3364                 But it is when we use the downtown


 1     streets of Toronto or Vancouver to reflect New York
 2     back to New York or L.A. back to L.A. because it is
 3     cheaper to do it here and that's just about the only
 4     reason and also it fulfils requirements around Cancon
 5     or what not.  That's a different kind of export-driven
 6     model.
 7  3365                 So, as you describe the Salter Street
 8     Film model, that's a very interesting -- hopefully we
 9     can have more small -- relatively small or medium-size
10     enterprises that are doing that kind of work.
11  3366                 COMMISSIONER CARDOZO:  So, Maude
12     Barlow has been skewered by "22 Minutes" or not?  Would
13     you like us to suggest anything?
14  3367                 MR. BLEYER:  I guess not yet because
15     I said it was my own personal opinion.  I am sure she
16     would love to be skewered by Rick Mercer.
17  3368                 COMMISSIONER CARDOZO:  One of the
18     recommendations you have made on page 15, you said that
19     broadcasters should do more to reflect aboriginal
20     people's cultural diversity in local programming.  Do
21     you have any more thoughts, any specifics in that area? 
22     I believe it was page 15.
23  3369                 MR. BLEYER:  Yes, I think you are
24     right.  You have page numbers and I don't.
25  3370                 COMMISSIONER CARDOZO:  It's the


 1     section entitled "Diversity," No. 8.
 2  3371                 MR. BLEYER:  Yes.
 3  3372                 I think we made some pretty general
 4     recommendations there.  We didn't make specifics. 
 5     Obviously, if you look at what is going on right now in
 6     terms of cuts to the CBC and to a reorientation,
 7     perhaps because of refocusing on commercial revenues at
 8     the CBC, for example on the Newsworld Business News and
 9     so forth, the ability even of the public broadcaster to
10     reflect these other voices is compromised by a
11     dependence on revenues.  We know that the way you get
12     revenues is by selling advertising if you are dependent
13     on advertising.  The way you get advertisers is through
14     the sort of niches of people who theoretically can buy
15     products and, generally speaking, the voices that
16     aren't heard, the faces that aren't seen are of people
17     who aren't in those categories.
18  3373                 So, there is a whole bunch of things
19     that are taking us in the wrong direction right now
20     that we could stop -- for example, what is going on in
21     terms of public subsidies, which again I realize is
22     within a different context that would stop us from
23     heading in the direction of undermining our ability to
24     see those voices at this point, but I don't think we
25     made any specific recommendations on those matters.


 1  3374                 COMMISSIONER CARDOZO:  My last
 2     question has to do with I think the last other big
 3     issue you raised, which was the CBC and the issue of
 4     complementary.  You have noted in your comments today
 5     that you felt that the CBC is an essential element of
 6     the bedrock of Canadian television.
 7  3375                 In terms of complementary and the use
 8     of that word there are two approaches to it.  One is to
 9     say that in the early days the CBC was the largest --
10     was the only national broadcasters and, therefore, the
11     private sector was developing and it complemented the
12     CBC.  Today there are a couple of budding or new full -
13     - they are networks however you look at it, station
14     groups and the private sector overall is probably
15     larger than the CBC -- I am pretty sure it is. So, in a
16     sense there is that issue of which one is complementary
17     to which.
18  3376                 The other aspects of complementarity
19     is that complementary is the opposite of competing and
20     that too often the CBC, it is felt, has been competing
21     with the private sector in bidding for some of the big
22     ticket items, like the Olympics or sports.  What are
23     your thoughts about what this means, that you don't
24     feel that the CBC is complementary to the private
25     sector?


 1  3377                 MR. BLEYER:  Again, as with so-called
 2     consolidation or concentration, what we believe is that
 3     the relative size today of public and private
 4     broadcasters was not something that was brought down
 5     from the heavens.  It is a process that has taken place
 6     between different forces in our society.  The inability
 7     or unwillingness of successive governments to maintain
 8     a strong public broadcaster.  There is no particular
 9     reason why we should have that current balance.
10  3378                 The balance is different if you look
11     at the roles they play in our society in terms of
12     reflecting Canada back to Canadians and so forth.  Then
13     you have to move the stick right back to the public
14     broadcaster.
15  3379                 In terms of the presence overall,
16     clearly it has shifted.  So, we wouldn't want to accept
17     that as a given.
18  3380                 Certainly it is a given today, but it
19     is not written in stone that the public sector should
20     be forever shrinking and that the private sector should
21     grow dramatically through consolidation or however, the
22     agreement to new networks and so forth.
23  3381                 In terms of the notion that the CBC
24     competes with the private networks and, consequently
25     deprives the private networks unfairly of revenues, for


 1     example, in the area of sports and so forth, we would
 2     hate to see the CBC limited to a place where it did not
 3     connect with some of the things that Canadians do want
 4     to see.  There is no doubt we think there is too much
 5     sports and not enough of several other underrepresented
 6     categories, but hockey, for example, is not only a key
 7     element of the Canadian reality for a lot of Canadians
 8     and for me until the Montreal Canadians are eliminated
 9     from the Stanley Cup playoffs every year, but it
10     also --
11  3382                 COMMISSIONER CARDOZO:  That may
12     change too.
13  3383                 MR. BLEYER:  But it is also a revenue
14     source.
15  3384                 We can't have it both ways.  We do
16     think that there should be more public support, but at
17     the same time we are hacking back at the CBC and then
18     we have the private networks saying you can't have
19     access to this because it is unfair competition for us. 
20     Well, if it is a source of revenue for the CBC -- so I
21     don't think we would like to see the CBC ghettoized,
22     that it should be full service.
23  3385                 I don't know, full service, I am
24     thinking of banks again -- full service banking. 
25     Hopefully the CBC won't be run like a bank or any of


 1     the other broadcasters, but that a full-service network
 2     and my apologies if it is not the correct terminology,
 3     to really provide -- if we are going to reflect Canada
 4     back to Canadians, then it includes some of these
 5     things.  It is the balance between them that may be
 6     off, but the balance is mostly off across the whole
 7     spectrum of English language television broadcasting.
 8  3386                 Within the CBC it is a much more
 9     interesting balance between -- the underrepresented
10     categories are not quite so underrepresented.
11  3387                 COMMISSIONER CARDOZO:  So what is
12     your vision of what the CBC can do which the others
13     cannot or don't do?
14  3388                 MR. BLEYER:  Well, the areas that the
15     others -- we think that you -- we believe it is within
16     your power and that you have shown an understanding and
17     a willingness to do the kind of regulating that would
18     see other broadcasters be more responsible in terms of
19     what Canadians want to see.
20  3389                 But for the CBC, you know, the issue
21     of local programming, the presence of local stations in
22     communities is one.  We have communities where the CBC
23     shuts down and often you either have no local news or
24     you have the incredibly low budget local news that you
25     don't know how they manage to pull it together.  So


 1     there is that whole issue of local communities seeing
 2     themselves.
 3  3390                 All the problems that you see with
 4     lax in terms of Cancon and community representation,
 5     the question of diversity, all of those issues should
 6     be dealt with without excluding the CBC from areas like
 7     -- I used hockey as an example, so I will stick to
 8     hockey.  My diversity includes hockey I guess.
 9  3391                 COMMISSIONER CARDOZO:  My Canada
10     includes the Montreal Canadians.
11  3392                 MR. BLEYER:  There you go.  The Expos
12     is where the problem arises.
13  3393                 COMMISSIONER CARDOZO:  That covers my
14     questions.  Thank you.
15  3394                 Thank you, Madam Chair.
16  3395                 THE CHAIRPERSON:  Thank you,
17     gentlemen.  Have a nice weekend and give our regards to
18     Ms Barlow.
19  3396                 MR. BLEYER:  We will, absolutely, and
20     our regards to the Chair for a full recovery and we
21     will come back most certainly, if invited of course.
22  3397                 THE CHAIRPERSON:  Madam Secretary,
23     would you invite the next participant please.
24  3398                 MS BÉNARD:  Thank you, Madam Chair.
25  3399                 The next presentation will be by WIC,


 1     Western International Communications Limited and I
 2     would invite them to come forward.
 3  3400                 THE CHAIRPERSON:  Good afternoon,
 4     gentlemen.  Proceed when you are ready.
 6  3401                 MR. MACDONALD:  Thank you very much,
 7     Madam Chair.
 8  3402                 Members of the Commission and staff,
 9     my name is Jim Macdonald.  I am President and CEO of
10     WIC Television Ltd.  With me today in the front row on
11     my right is Grant Buchanan, Vice-President, Corporate
12     and Regulatory Affairs for WIC and on my left is Nic
13     Wry, Senior Vice-President, WIC Entertainment.  In the
14     back row are Ric Davies, Vice-President, Programming
15     WIC Premium Television; Will Graber, Special Projects
16     Manager, WIC Television Ltd., and Ken Goldstein,
17     President of Communications Management Inc.  Also
18     present in the audience today is our President and CEO,
19     Tom Peddie.
20  3403                 While the general focus of this
21     hearing will be on conventional television, we would
22     like to begin by re-emphasizing a point made in the CAB
23     submission, that being the importance of this hearing
24     looking at the entire broadcasting system as well as
25     those factors which will impact directly on


 1     conventional television and which go beyond the issue
 2     of audience fragmentation.
 3  3404                 We discussed a number of these
 4     serious environmental factors in our written materials
 5     and which included:  Changes in the way television is
 6     sent and received; in the way we pay for television; in
 7     the economic linkages inside and outside the Canadian
 8     television system; in our ability to promote Canadian
 9     programs; in our ability to regulate effectively; in
10     the changes in ownership that have occurred from
11     family-controlled companies to publicly owned; and
12     changes in the international trade environment.
13  3405                 We also share the belief espoused by
14     the CAB that, with the tremendous increase in both the
15     investment and exhibition of Canadian programming made
16     by the specialties, the key focus of this hearing must
17     now be on how to improve the viewership to Canadian
18     programming.
19  3406                 While we have said it before, it
20     cannot be stressed enough that the old paradigm of
21     cross-subsidization of Canadian programming from high
22     margins on U.S. shows is at the back end of the life
23     cycle because increased competition for national rights
24     is driving program costs up while audience
25     fragmentation is driving margins down.


 1  3407                 We have now completed three years of
 2     the present seven-year licences that resulted from the
 3     most recent round of television renewals.  The
 4     flexibility accorded broadcasters as between exhibition
 5     and expenditures has spawned a variety of approaches to
 6     Canadian content, both within corporate groups and as
 7     between them.  The resulting diversity in strategies
 8     and in Canadian content programming is not accidental. 
 9     The regulatory design currently in place rewards
10     different genres of programming and has not created a
11     disincentive for certain genres of programming on a
12     system-wide basis.
13  3408                 Thus, we view with concern the notion
14     of devaluing certain types of programming in favour of
15     others -- most particularly the idea of focusing
16     exclusively on Categories 7, 8 and 9.  We would like to
17     repeat once again that other categories like news
18     should not be taken for granted.  Contrary to the
19     popular view that news is profitable and thus a "sure
20     thing," this is very often not the case.  The
21     Commission has heard a great deal about the importance
22     of local service in its town hall meetings.  It also
23     has become a theme at this hearing and WIC is sensitive
24     to the concerns raised by others in this regard,
25     including the preceding intervenors.


 1  3409                 In summary, as we move forward, it
 2     will be even more important for conventional
 3     broadcasters to be able to differentiate themselves
 4     from each other.  Not only is this important for the
 5     broadcasters themselves; it is also important for the
 6     system.
 7  3410                 For WIC, news is a core competency in
 8     many of our stations.  The development of strong prime
 9     time Canadian drama is also, by necessity, a key focus. 
10     As the Commission is aware, however, WIC Television is
11     comprised of CTV affiliates, CBC affiliates and
12     independent stations.  In Alberta, while three of our
13     stations are independent, we have a commitment to
14     purchase all programming which is aired on the Global
15     Television Network in Ontario and thus those stations
16     could be considered as Global affiliates and maybe more
17     as we move forward.
18  3411                 As a result of the inability to fully
19     control the schedules of the television stations we
20     own, we have developed an approach to production which
21     is unique amongst Canadian broadcasters in that the
22     Canadian programs that we develop and license through
23     WIC Entertainment do not always run on WIC stations. 
24     "Emily of New Moon," as an example, runs on the CBC,
25     while "Kleo," "Billy The Cat," "Nilus the Sandman" run


 1     on Family Channel.  "Donkey Kong Country," airs on
 2     Teletoon and "Strangers," now runs on Showcase.
 3  3412                 Our licensing focus, on the other
 4     hand, has only one objective; finding projects with
 5     high production values which we believe can attract a
 6     competitive audience level.  As a result, many programs
 7     that we have licensed, such as "Stargate," or "Night
 8     Man" and "Amazon" with Atlantis or "Total Recall" with
 9     Alliance, are projects that have international
10     production partners thus assuring competitive
11     production budgets.  These programs do not require
12     Telefilm and CTCPF funding and do not qualify for a 150
13     per cent credit.
14                                                        1430
15  3413                 We believe that the greatest
16     diversity is created in the system by establishing the
17     simplest possible rules to ensure equitable
18     contribution from each of the players and then allowing
19     the individual entities in the system to find their own
20     niches.  That said, the Commission will need to
21     exercise great care in its efforts to create a level
22     playing field with equitable contributions from each of
23     the "large, multi-station ownership groups and
24     networks".
25  3414                 For example, while the total costs of


 1     acquiring or producing an equal number of hours of same
 2     genre programming would be very similar for each group,
 3     the revenue base over which those costs would be
 4     amortized is very different.  In other words, the
 5     smaller groups would bear a cost in percentage terms
 6     relative to revenue that would be significantly higher
 7     than for the larger groups.
 8  3415                 In summary, while WIC intends to
 9     schedule primarily Canadian drama in prime time, we do
10     not feel that broadcasters should be required to have
11     their scheduling options so constrained.  Competitive
12     forces will ensure diversity.  Indeed, we believe that
13     this approach is consistent with the section of the
14     Broadcasting Act relating directly to the obligations
15     of programming undertakings, as well as to the findings
16     of the Crop Study which you placed on the file
17     Wednesday.
18  3416                 In reviewing the public file, we have
19     noted that a number of groups suggest that you find a
20     way to make television groups do "more".  We are here
21     today, however, to try to provide a "reality check" as
22     opposed to a blank cheque for the forces of "make them
23     do more".
24  3417                 The fact is that the industry is now
25     comprised almost exclusively of licensees controlled by


 1     public companies.  While the industry has been
 2     profitable in the past and has had a few good years
 3     recently, industry pre-tax profits are still below 10
 4     per cent.  Investors look really only at two factors,
 5     risk and return, and for this reason maintaining the
 6     opportunity for the conventional broadcasting industry
 7     to grow back to previous levels of profitability is the
 8     only way to ensure that equity investment in the
 9     industry will continue.  This is especially true at a
10     time when the industry needs to find half a billion
11     dollars to convert to digital over-the-air
12     transmission.
13  3418                 So, when we work through the CFTPA's
14     10/10/10 proposal, for example, the impact on WIC is to
15     reduce the profit of WIC television by a minimum -- and
16     I stress minimum -- of $20 million per annum.  The
17     Commission will recall that WIC's entire profit -- now,
18     this is the corporate profit -- last year was $10
19     million.  So, the "do more" proposals you have heard
20     are simply not consistent with the economic viability
21     of the engine that pulls the system.
22  3419                 So, let us end where we began.  The
23     increases in both hours and dollars of Canadian
24     programming in the broadcasting system have been
25     significant.  We are not advocating that you move away


 1     from any of the present regulatory tools available to
 2     you, nor are we suggesting a change to existing
 3     conditions of licence.  We simply need your leadership
 4     to change the focus, to change the currency, to change
 5     the viewership, which, in our view, is the only number
 6     that really matters.
 7  3420                 Just before we finish, we would like
 8     to take a minute to address a couple of issues related
 9     to our pay and pay-per-view television services.  While
10     the emphasis so far in this proceeding has seemed to
11     focus almost entirely on conventional over-the-air
12     broadcasting, the Public Notice clearly included pay
13     and pay-per-view within the definition of broadcasters. 
14     This raises a few concerns when we hear proposals being
15     worded that "all broadcasters" should be required to do
16     certain things, many of which are simply not applicable
17     to pay television.
18  3421                 In addition, there are suggestions
19     contained in various submissions for "first run"
20     requirements for conventional broadcasters.  We have
21     discussed this issue with producers and believe that
22     they agree with us the concept of "first run" should
23     not preclude a prior run on pay or pay-per-view, where
24     appropriate, and where the timing and conditions allow. 
25     We must confess to disappointment in hearing the CBC's


 1     comment on this issue yesterday.  These airings are
 2     very important to pay television, offer incremental
 3     licence fees to producers and have little effect on the
 4     conventional television side.
 5  3422                 We thank the Commission for the
 6     opportunity to present our views and look forward to
 7     your questions.
 8  3423                 THE CHAIRPERSON:  Commissioner
 9     Wilson?
10  3424                 COMMISSIONER WILSON:  Good afternoon,
11     gentlemen.
12  3425                 MR. MacDONALD:  As I was watching you
13     sit in the audience, I noticed that you did have one
14     woman with you and I thought, "Okay, one woman and all
15     these guys.  How am I going to address them, 'lady and
16     gentlemen'?"  But this makes it easy.
17  3426                 MR. MacDONALD:  Duly noted,
18     Commissioner Wilson.
19  3427                 THE CHAIRPERSON:  We are making up
20     for it.
21  3428                 COMMISSIONER WILSON:  That's right.
22  3429                 What I would like to do with you
23     today as the first broadcaster to appear since the CAB
24     appeared is take you through really the most
25     significant component of that proposal, which is the


 1     viewership targets, and ask you some specific questions
 2     about how that's going to work.
 3  3430                 I guess the second thing that I want
 4     to do is talk to you about some of the comments that
 5     were raised in the CFTPA submission and then I would
 6     like to go through some of the statements that you made
 7     in your submission and just ask you some clarification
 8     questions and just get your views on some of the ways
 9     that, when I read it -- obviously, you wrote it, you
10     have a view of what it means.  I read it, I might see
11     it a little bit differently and I would just like to
12     try and reconcile those.
13  3431                 With respect to the CAB system goals,
14     in their submission the CAB has proposed that the
15     Commission establish a target of viewing for Canadian
16     programs across the entire conventional broadcasting
17     system, including the CBC.  I think we all agree that
18     this is a very important measure of how successfully we
19     are meeting the objectives of the Broadcasting Act, but
20     in order for the Commission to really be able to
21     evaluate whether or not this is the way for us to go in
22     the future, I think that we need more specifics about
23     how it's going to work.
24  3432                 I guess my fear is that we say,
25     "Okay, let's choose viewership as the target", and then


 1     we might spend two years trying to figure out how we
 2     are going to measure it, how it's going to work.  So,
 3     I'm hoping that during the course of the time that you
 4     were preparing the submission you were thinking about
 5     what some of the general parameters of that system
 6     might be.  There are so many different ways, so many
 7     different factors that you have to take into account
 8     with respect to the ratings of a program and where it's
 9     scheduled and how it's made.  Maybe I could just ask
10     you sort of a series of questions and you can do your
11     best to give me some answers.
12  3433                 MR. MacDONALD:  Sure.
13  3434                 COMMISSIONER WILSON:  So, let me just
14     -- I will ask you the questions before you give me the
15     answer.
16  3435                 MR. MacDONALD:  I had the answers for
17     your questions.
18  3436                 COMMISSIONER WILSON:  You already
19     have the answers.  Okay, that's good.
20  3437                 How would your company make specific
21     commitments to contributing to the achievement of these
22     goals?  Would you propose specific targets for each of
23     your licensees or would you present a target for the
24     entire corporate group?
25  3438                 MR. MacDONALD:  Well, I would like to


 1     just back up one step, if I could, for a second and
 2     that is to re-emphasize your earlier point regarding
 3     the fact that this is the first time we are really
 4     looking at a qualitative goal and what becomes
 5     difficult is we have typically looked at quantitative
 6     goals because, by their very nature, you can count
 7     them.  So, here we are looking at a qualitative goal,
 8     but at no point are we suggesting moving away from the
 9     existing tools of measuring our performance in the
10     system.  We are not talking about getting rid of A, B. 
11     We have actually recommended a third option, a C.
12  3439                 So, we are not suggesting that
13     stations should move away from any of the existing
14     quantitative goals that they are currently measured on
15     by the regulator.  What we are simply saying is that as
16     we move forward, if we don't change the focus to what
17     really counts, which is viewers, then we believe we are
18     going to have some serious trouble.
19  3440                 So, the question is a very good one: 
20     How would it practically work?  This is one of the
21     areas where the fact that we are consolidating as an
22     industry into relatively small groups in fact can make
23     it work because we are not dealing with all kinds of
24     ownership issues, we are dealing with a relatively
25     small group of people.


 1  3441                 What I am going to share with you is
 2     how WIC thought it could go about this.  Now, I am not
 3     sure that our thoughts will be echoed by all of our
 4     colleagues, but we look at it like attacking any other
 5     business problem.  The problem --
 6  3442                 COMMISSIONER WILSON:  We are just
 7     trying to get a clearer idea of how that's going to
 8     work.  So, your model, even if it may be slightly
 9     different than another multi-station group, is still
10     helpful for us in terms of figuring out how it's going
11     to work.
12  3443                 MR. MacDONALD:  Well, we start in any
13     situation with doing a SWOT analysis, what are the
14     strengths, weaknesses, opportunities and threats, and
15     we build business plans on a collective basis.  So, we
16     would start by working with each of the stations
17     because we have to really build it from a bottom-up
18     basis.  We have to determine what the overall goal
19     means in each of the markets collectively, we need to
20     know exactly what the responsibilities of WIC are to
21     the overall national goals and then we have to figure
22     out how we are going to get there.
23  3444                 COMMISSIONER WILSON:  When you say
24     you would have to establish what WIC's contribution
25     would be, do you envisage a possibility that each


 1     multi-station group would make a commitment to the
 2     national goal?
 3  3445                 MR. MacDONALD:  Yes, because we have
 4     to start from somewhere.  WIC currently has a share of
 5     tuning in each of its markets and the only way in which
 6     we are going to collectively move the bar is if we all
 7     move the bar.  So, we think that the way to do that is
 8     to create a business plan on a market-by-market basis
 9     that is then brought together into a WIC business plan
10     that would be developed over the first three years.  It
11     would be a three-year business plan to how we are going
12     to move the bar forward.
13  3446                 Now, you will recall at the CAB
14     presentation we suggested that even though these be
15     five-year goals, we really needed a three-year
16     implementation window with reports that would be
17     submitted on an annual basis.  So, we felt that the
18     first submission to the Commission would be a business
19     plan that would have to look at not only the viewing,
20     because that's just identifying the problem, the bigger
21     issue is how are we going to close the gap.
22  3447                 The business plan, therefore, would
23     have to get into the promotional components, the money,
24     the advertising, the cross-promotion that we would want
25     to do, the marketing.  One of the things that we have


 1     never done a very good job of, quite frankly, is moving
 2     advertisers into the support of Canadian programming. 
 3     How could we do that?  What is the role of our Internet
 4     sites in promoting that?  So, I think that, as I said
 5     earlier, what gets measured, gets done.
 6  3448                 When you put the focus on it like
 7     that and you have each of the major companies as a
 8     basic objective of their company from top down looking
 9     at this one issue, there is a tremendous amount of work
10     that can go into it.  But I see it as a business plan
11     emanating from the station level to the national level
12     and then we bring it together at that point.
13  3449                 COMMISSIONER WILSON:  Actually, when
14     I read that phrase in your submission, "what gets
15     measured gets done", I thought of the 60/50 and how
16     true that is.  If you say 60, you do 60.  If we say 50,
17     you do 50.  So, I guess there are two ways of looking
18     at that phrase.
19  3450                 MR. MacDONALD:  Well, that's true.
20  3451                 COMMISSIONER WILSON:  You are saying
21     if we measure the viewership or you set the targets,
22     then that will get done.
23  3452                 MR. MacDONALD:  I think in our in-
24     chief earlier I said that what we are looking for is
25     leadership because it is the leadership that drives


 1     everything.  The Commission's responsibility is to the
 2     Canadian broadcasting system, but we are still looking
 3     at this whole process as involving a number of
 4     different players.  There is the Commission, there is
 5     Heritage, there is Industry Canada, there is Finance.
 6  3453                 There is a whole bunch of different
 7     components that have to come together if we are going
 8     to be really successful.  Revenue Canada is obviously
 9     involved from a tax point of view.  Finance is very,
10     very involved because one of the things that we keep --
11     the concern that keeps being brought up over and over
12     is the Fund and how critical the Fund is to producing
13     the indigenous Canadian programming.
14  3454                 So, when you are dealing with
15     something that we are told is so critically important,
16     that every $1.00 of that Fund creates $5.00 of
17     production, thousands of jobs -- I mean think about the
18     GST and the income tax coming back on that investment,
19     far less the cultural side of it.  There is just a
20     number of players that all have to work together to
21     make this work.
22  3455                 COMMISSIONER WILSON:  So, when you
23     said on page 4 of your opening remarks "by establishing
24     the simplest possible rules", you were probably kind of
25     understating it.  It's not really simple at all is what


 1     you are saying.  Michael MacMillan made that comment
 2     yesterday.  He said it's a very complex web of
 3     interrelationships and I think that that is very true.
 4  3456                 MR. MacDONALD:  Absolutely, but I
 5     think that at the CAB presentation we tried to make it
 6     clear that the viewing goals we saw as being very
 7     difficult to license, to set as a condition of license,
 8     to set as an enforceable entity, and that's why we
 9     stated over -- and this is very, very important.  We
10     are not asking or suggesting that the Commission in any
11     way, shape or form should move away from the
12     quantitative benchmarks that currently are used to
13     measure performance.  We are simply saying --
14  3457                 COMMISSIONER WILSON:  Don't change
15     those.
16  3458                 MR. MacDONALD:  We are not suggesting
17     that they be changed, but let's change the focus and
18     let's try to move the focus over to the one thing that
19     in the longer term is going to be very, very important.
20  3459                 It was characterized by one of the
21     intervenors today as the CAB position was:  Trust us. 
22     No, that's not the CAB position at all because we are
23     not asking you to move away from any of the existing
24     rules and guidelines.  We are simply saying:  Work with
25     us to move the focus through your leadership away from


 1     strictly hours, strictly dollars, to the one thing that
 2     we haven't been measuring that we really need to, which
 3     is viewers.
 4  3460                 COMMISSIONER WILSON:  When you say
 5     the one thing that we haven't been measuring -- and
 6     maybe this will sound like a naive comment to you.  Of
 7     course, I ran a break-even operation at CPAC, so you
 8     will forgive me if I don't have the appropriate profit-
 9     driven approach to this, but I guess I just find it
10     hard to understand why all of a sudden we have twigged
11     to the notion that viewers are important.  Aren't
12     viewers the only reason you are doing -- well, no, I
13     guess maybe your shareholders are, but aren't they the
14     reason that you are doing television?
15  3461                 When I first read that -- I don't
16     disagree with it at all, but when I first read it I
17     thought:  Well, yes, we are going to focus on viewers
18     because viewers means reach or share means ad sales
19     means profit.  So, that's the business case.  That's
20     the business incentive for it.
21  3462                 MR. MacDONALD:  And you have
22     concluded that these guys are all of a sudden rocket
23     scientists.  Right?
24  3463                 COMMISSIONER WILSON:  Yes.  I
25     thought:  Gee, I have been in the wrong business all


 1     these years.  I should have been working in
 2     conventional broadcasting, I guess.
 3  3464                 MR. MacDONALD:  Then let me back-step
 4     a little bit because it's not that all of a sudden the
 5     light went on.  The business paradigm has changed
 6     rather dramatically and what I was referring to in the
 7     text of our presentation where I said that the classic
 8     cross-subsidization paradigm is in the back end of its
 9     life cycle is that traditionally we had U.S.
10     programming that was making enormous margins and it
11     cross-subsidized Canadian programming that we lost
12     money on.
13  3465                 It was acceptable, I suppose, at the
14     end of the day because the margin was there at the
15     bottom of the page that made shareholders happy and
16     everybody got along just fine, thank you very much, but
17     that paradigm is gone because the competition has
18     raised prices.  As I said, it has introduced a new
19     level of audience fragmentation.  Those two factors
20     have really flattened the margins on U.S. programming
21     and, as a result of that, I think that broadcasters
22     have looked very clearly and said, "We can't have 60
23     per cent of our schedule where we just simply say it's
24     a tax, it's a cost of doing business."
25  3466                 So, certainly as we moved forward, we


 1     said, "What is the long-term goal that we have to have? 
 2     What is the one thing that we are really not achieving
 3     with some of our Canadian programming?"  The one thing
 4     on a consistent basis was viewers and that was why it
 5     became so important to us.
 6  3467                 COMMISSIONER WILSON:  I just want to
 7     grab a slide here.
 8  3468                 When you were talking just now, you
 9     talked about how the margins are flattening out on the
10     U.S. programming and I think I recall that Coopers &
11     Lybrand presented a slide that showed for every dollar
12     of air time revenue you bring in how much you spend or
13     how much you earn.  Yes, how much you earn on
14     programming.  I think it showed it was $120 for every
15     dollar.
16  3469                 MR. MacDONALD:  Yes, I believe that
17     was the Coopers & Lybrand number.
18  3470                 COMMISSIONER WILSON:  So, maybe you
19     have to give me a bit of a lesson here.
20  3471                 Yes, that's it, $120.  Thanks, David.
21  3472                 You lose $75 on Canadian domestic,
22     you earn $20 -- it's actually operating margin per
23     hour.
24  3473                 MR. MacDONALD:  That's correct.  The
25     one thing, Commissioner Wilson, that is not reflected,


 1     of course, in that number has only been in the last
 2     relatively short while, that margins on U.S. started to
 3     take a tumble.
 4  3474                 COMMISSIONER WILSON:  How short a
 5     while would it be?
 6  3475                 MR. MacDONALD:  Well, I would think
 7     really over the last two to three years.  So, moving
 8     forward is where we think that we will see the greater
 9     impact.
10  3476                 COMMISSIONER WILSON:  Thank you for
11     that.
12  3477                 Let me just go back to the system
13     target, the viewership targets, and just ask you -- I
14     think, actually, that Commissioner Wylie asked this
15     question of the CAB when they were up here, but I'm not
16     sure that we got an answer.
17                                                        1450
18  3478                 What action should the Commission
19     take if it becomes clear that the targets are not being
20     met?  You said you will give us an annual report and we
21     really need three years to sort of see how things are
22     working; it is a five-year plan, and it will take us
23     three years to see how it is working.  What if it
24     doesn't work?
25  3479                 MR. MACDONALD:  Well, I guess the


 1     first question I would have is, what has really been
 2     lost by trying?  Because you haven't really given up
 3     any of the regulatory tools that are there, as I said
 4     earlier.  We haven't asked you to walk away from any of
 5     the stations that are on dollars, none of the stations
 6     on hours would be any different.  So those commitments
 7     would continue, stations that are on hours will go to
 8     six and a half and then seven hours, and the stations
 9     that are dollars will move in the normal course of
10     averaging.  So I don't see any downside, quite frankly.
11  3480                 So at no point have we asked the
12     Commission to sort of shake the dice with us and back
13     off significant commitments that would put the system
14     or the regulator at a loss.  What we are simply saying
15     is, without losing any of the existing commitments,
16     let's focus rather on more, more, more of the same
17     thing, spreading our resources thinner and thinner;
18     let's focus on the one thing that we need to try to
19     focus on together, which is audience.
20  3481                 It has to be a partnership goal, it
21     has to be an industry goal, but I don't believe that
22     there is any downside to it.
23  3482                 COMMISSIONER WILSON:  Okay.  I am
24     going to think about that.
25  3483                 MR. BUCHANAN:  Maybe I could add


 1     something, Commissioner Wilson.
 2  3484                 COMMISSIONER WILSON:  Okay, Grant.
 3  3485                 MR. BUCHANAN:  What do you do with
 4     local reflection?  A few years ago the Commission
 5     decided to stop measuring it.  It is still there.  You
 6     said when we came back for renewals you would still
 7     hold us accountable for it.  We were still supposed to
 8     be focusing on it, and "We will see you at your licence
 9     renewal."
10  3486                 I guess it is the same kind of
11     approach to it.  You still would like us to be doing
12     it, you don't want us to walk away from it, we share
13     our plans and our goals with you when we come before
14     you, and when it is over, it is an additional layer
15     that you can talk with us about when we come before
16     you.  But, as Jim said, we are not suggesting it
17     replace anything or become the sole barometer of how we
18     are doing.
19  3487                 MR. MACDONALD:  The point is that if
20     we don't produce results it will be an experiment that
21     was a complete waste of time, but if we do produce the
22     results, then there is upside for everybody.
23  3488                 COMMISSIONER WILSON:  Okay.  I would
24     like to go now to I guess one of the issues raised in
25     the CFTPA submission.  There have been a lot of numbers


 1     quoted just in the last few days, and we have three
 2     more weeks of this, so it will be interesting to see
 3     how many more are presented.
 4  3489                 I am sure you are all aware that
 5     Michael MacMillan, when it appeared for the CFTPA,
 6     recalled for us that one of the strongest arguments
 7     offered by broadcasters in favour of consolidation was
 8     that the development of these multi-station ownership
 9     groups would result in greater production and
10     exhibition of Canadian programming because the cost can
11     be amortized over a larger revenue base and there would
12     be economies of scale, efficiencies of resources or
13     whatever you want to call it.
14  3490                 I think it was during the CAB
15     presentation on Wednesday that the phrase was used that
16     there is no pot of gold at the end of the consolidation
17     rainbow, and while we can certainly point to the
18     economic factors and continuing audience fragmentation
19     as the causes -- the figures that the CFTPA quoted, and
20     maybe you want to dispute those; this is your chance --
21     between 1993 and 1997, when much of this consolidation
22     was taking place, the broadcaster margins, according to
23     CFTPA's figures, increased from 12.7 to 17.3 per cent,
24     and during the same time period Canadian programming
25     expenditures by broadcasters dropped from 30.4 to 26.6


 1     per cent.
 2  3491                 Then I would like to just point you
 3     to a statement that you make actually on the very first
 4     page of your submission.  It is a phrase, actually,
 5     that you use that struck me; maybe it is because I am
 6     such a new Commissioner that it struck me.  In
 7     reference to your licence renewals which took place, I
 8     believe, a couple of years ago you say, "The regulatory
 9     bargain is complete."  I guess partially I have
10     difficulty with that phrase because it makes it sound
11     like this is just a big negotiation, "We are going to
12     sit down and you say what you want, we say what we
13     want, then we will decide and we will give you a period
14     of time, and off you go to do it."
15  3492                 I guess I want to ask you if you feel
16     that the Commission allowed you to go ahead and
17     consolidate and develop multi-station groups, and that
18     was, to use your phraseology, their end of the bargain,
19     and your end of the bargain was to go off and to do
20     more programming and make a more significant
21     contribution.  Yet the numbers that the CFTPA presented
22     to us would dispute that.
23  3493                 MR. MACDONALD:  I don't propose to
24     dispute the numbers, not because I don't have other
25     numbers, but the comment was made in a general sense


 1     relative to why consolidation has happened in the first
 2     place.
 3  3494                 Consolidation has happened in the
 4     first place because of the erosion of profit margin,
 5     because programming has become a national game.  You
 6     can trace consolidation way back and you can see what
 7     has been happening, not just in this industry but in a
 8     number of different industries.  And if others made
 9     different commitments, then Mr. MacMillan is well
10     within his right to expect those companies to come
11     forward.
12  3495                 As to WIC, WIC's expansion and its
13     growth, at every point in the turn it has paid
14     significant public benefits for the transaction which
15     have always been considered by the Commission because
16     the Commission has approved it to be suitable to the
17     size of the contribution.
18  3496                 There was a comment this morning
19     about how WIC had expanded in Ontario without any kind
20     of local contribution, in Ottawa as an example.  Well,
21     that was really by choice and design because there was
22     a concern raised about providing local coverage.  But,
23     more importantly, WIC put $5 million in incremental
24     spending on the table as part of that transaction. 
25     Similarly, when we applied to purchase Montreal, there


 1     were significant public benefits attached to that.  So
 2     in no case did we think that we were just acquiring
 3     stations and not making a suitable commitment to the
 4     transaction.
 5  3497                 So I guess, from our perspective, we
 6     paid each step along the way to that consolidation, and
 7     we did not certainly want to be conveying that, now
 8     that we have paid, paid, paid, paid, paid, we are now
 9     ready to do all kinds of extra over and above that.
10  3498                 I know what WIC, as does the
11     Commission, spends as a percentage of our revenue on
12     Canadian, and we are only slightly behind CTV Baton. 
13     So I have no qualms about what we are doing and how we
14     are doing it, but at no point I think from a WIC
15     perspective did we ever suggest that there was going to
16     be this big increase in what we were doing,
17     specifically as a result of consolidation.
18  3499                 COMMISSIONER WILSON:  I guess in some
19     ways that question is unfair because I am asking you to
20     comment on an industry-wide phenomenon and sort of
21     relate it back to your own experience, but that's --
22  3500                 MR. MACDONALD:  Well, you know, there
23     have been some commitments made in certain other
24     transactions.  In fairness, you should talk to the
25     other broadcasters who made those commitments.  But,


 1     from a WIC perspective, I think that first of all we
 2     have continued to invest more and more, we have
 3     continued to increase the number of projects that we
 4     are doing on a national basis through WIC
 5     Entertainment, and we have used each of our
 6     acquisitions to in fact do more, but not in response to
 7     anything -- "Allow us to consolidate and then there is
 8     this big pot of gold."  We never said that.
 9  3501                 COMMISSIONER WILSON:  Thank you.
10  3502                 I would like to move now to your
11     submission.  One of the things that you talk about a
12     fair amount is the whole notion of scheduling of
13     Canadian programming.  You suggest that whatever
14     regulatory approach we adopt going forward we should be
15     flexible enough that broadcasters aren't forced to
16     schedule Canadian programs at times when they will have
17     to compete with the much more popular U.S. programs.
18  3503                 In making the case for scheduling
19     Canadian programming in other prime time or access day
20     parts, I think it is in paragraph 66, you draw the
21     distinction between available audience versus homes
22     using television.  Yet, over a long period of time, it
23     has been quite well documented that the most people
24     watch the most television between 8:00 and 11:00, or
25     7:00 and 11:00 if you want to widen that.  Even the


 1     viewing between 6:00 and 7:00 is significantly lower.
 2  3504                 So, given the fact that so many
 3     people work during the day and many of them aren't
 4     sitting down to do really serious television watching
 5     in the morning unless they are kids, how do you expect,
 6     through creative scheduling in alternate day parts and
 7     promotion, that you can build the kinds of audiences
 8     that will ultimately drive overall viewing to Canadian
 9     programming to 35 per cent and viewing to entertainment
10     programming to 10 per cent, which were the goals that
11     were set by the CAB?  I mean, if people aren't watching
12     television, then they are not really available.  They
13     may be in the house, they may be available in the sense
14     that they are at home, but they don't watch at that
15     hour.
16  3505                 MR. MACDONALD:  First of all, I would
17     say we agree with you.  We are not advocating trying to
18     create corridors where Canadian programming is
19     basically put out to pasture; that's not what we are
20     suggesting at all.  But we are suggesting that there
21     are time periods beyond 8:00 to 11:00.  As an
22     example --
23  3506                 COMMISSIONER WILSON:  "Mike Bullard"
24     I think is one of the examples that was offered on day
25     one.


 1  3507                 MR. MACDONALD:  I wasn't going to use
 2     that because it is a good example -- it is a good
 3     example, but it is sort of an exceptional example.  I
 4     would have used the 7:00-to-8:00 time period, a little
 5     bit more of the WIC style argument.
 6  3508                 If you look at a 2-plus PVT, in other
 7     words persons viewing television, at 8:00 p.m. it is
 8     33.3; at 7:00 p.m. it is 28.1.  So what we are saying
 9     is, we agree with Mr. MacMillan's notion of fish where
10     the fish are, but let's recognize that when you have 84
11     per cent of the fish at seven o'clock, it might be a
12     good place to go putting your line in.
13  3509                 COMMISSIONER WILSON:  So is that why,
14     on your Edmonton schedule, for example, the one that
15     was provided to us this morning by Friends of Canadian
16     Broadcasting -- I mean, you do have big name programs
17     that are scheduled at seven o'clock; they are all U.S.
18     programs, but they are programs that draw I think a
19     fairly significant share:  "Chicago Hope", "Star Treck
20     Voyager", "Beverley Hills 90210".
21  3510                 Maybe you are demonstrating by
22     scheduling in that hour that that time block is
23     actually a good time block for programming.
24  3511                 MR. MACDONALD:  Of course, in
25     Alberta, we are dealing with a time zone difference


 1     anyway --
 2  3512                 COMMISSIONER WILSON:  That's true.
 3  3513                 MR. MACDONALD:  -- which is a bit of
 4     a habitual thing.  In Ontario, of course, we are
 5     running primarily access programming in the 7:00-to-
 6     8:00 time period.
 7  3514                 COMMISSIONER WILSON:  What do you
 8     mean by "access programming"?
 9  3515                 MR. MACDONALD:  Access is called
10     "prime access" between 7:00 and 8:00, and access
11     programming would be shows like --
12  3516                 COMMISSIONER WILSON:  "Wheel of
13     Fortune" and "Jeopardy".
14  3517                 MR. MACDONALD:  -- "Wheel of
15     Fortune", "Jeopardy", "Hard Copy" and things like that. 
16     We felt that, up against those strip shows, really good
17     Canadian shows could do very well.
18  3518                 COMMISSIONER WILSON:  I would agree
19     with that.
20  3519                 MR. MACDONALD:  That's why we
21     suggested that that was a corridor.
22  3520                 I used the example I think the other
23     day, at six o'clock on Sunday, with one of our Canadian
24     shows a few years ago, we had experimented going up
25     against news, counter programming.  So at six o'clock


 1     we win the time period, as opposed to taking the same
 2     program and putting it at that time at eight o'clock up
 3     against "Murder She Wrote".
 4  3521                 COMMISSIONER WILSON:  Right.  CHRO in
 5     the National Capital Region has done the same thing.
 6  3522                 MR. MACDONALD:  So those are the
 7     kinds of circumstances that we envisioned.  We are not
 8     suggesting that development of a show like "Mike
 9     Bullard" shouldn't count, not at all.  That's
10     innovative.  But at no time were we suggesting that
11     broadcasters be allowed to move away from prime time
12     commitments by running in day parts where there is no
13     audience.
14  3523                 It is simply that I think you would
15     agree that at seven o'clock, where there is 80-plus per
16     cent of the available audience -- at seven o'clock 84
17     per cent, to be specific, of the 8:00 p.m. audience --
18     then that's a significant audience and it shouldn't
19     just be thrown away and counted as nothing.
20  3524                 COMMISSIONER WILSON:  Maybe I could
21     just ask you, I think one of the viewing shares that
22     was quoted was a 4 share versus the 20 share that
23     "E.R." got, by CAB -- I can't remember the specific
24     show that they were talking, "Traders" maybe.  What do
25     you consider a successful viewing share for Canadian


 1     programming?  Currently I think it is like between 3
 2     and 4, isn't it, for most --
 3  3525                 MR. MACDONALD:  It can get very
 4     confusing between share and rating points.  I would say
 5     that the average -- I think we are doing fairly well
 6     with a Canadian show that does better than a 3 rating,
 7     which would be a per cent of that particular
 8     demographic in that particular market.  "Outer Limits",
 9     as an example -- which is the number one Canadian show
10     in Toronto according to Nielsen -- would do a 6 rating. 
11     By comparison, "North of 60", which is the 17th ranked
12     show, would do a 3.5 rating; and that's against adults
13     25 to 54.  If you look at our show that's on CBC,
14     "Emily of New Moon", against that same target group it
15     does a 2.2 rating.  So that essentially says that
16     "Emily of New Moon" is seen by 2.2 per cent of the
17     adults in the Toronto DMA between the ages of 25 and
18     54.
19  3526                 So that's the range that we are
20     seeing.
21  3527                 COMMISSIONER WILSON:  And what would
22     allow you to break even on a Canadian program?  Of
23     course, I know that there are a lot of things that go
24     into that, like convincing the advertisers to buy spots
25     and to pay more for them and all of that, but --


 1  3528                 MR. MACDONALD:  Well, an advertiser
 2     won't pay more for a spot because it is a Canadian
 3     program.
 4  3529                 COMMISSIONER WILSON:  No, but for the
 5     share or the rating.
 6  3530                 MR. MACDONALD:  Right.  The general
 7     notion -- I mean, advertisers will pay for rating
 8     points and they will typically want to make sure that
 9     there is a rationale to the basis of the estimates that
10     are  done.
11  3531                 COMMISSIONER WILSON:  Do they pay the
12     same amount, though?  I think one of the examples that
13     CFTPA presented was that the ratings for "Chicago Hope"
14     and "Cold Squad" are identical; they are between 11 and
15     15, ratings or share, I can't remember, I am sorry, but
16     they were identical.
17  3532                 Would an advertiser pay the same
18     amount for an ad spot in "Cold Squad" as they would for
19     "Chicago Hope"?
20  3533                 MR. MACDONALD:  I can answer that
21     specifically by telling you that the audience level for
22     "Chicago Hope", again against the same demographic, is
23     a 6.5 rating versus "Cold Squad" at a 4.4.  So the
24     answer is, no, they would pay more for "Chicago Hope".
25  3534                 But if they were the same --


 1  3535                 COMMISSIONER WILSON:  If they were
 2     identical?
 3  3536                 MR. MACDONALD:  -- sure, they would
 4     pay the same.
 5  3537                 COMMISSIONER WILSON:  They would.
 6  3538                 MR. MACDONALD:  Advertisers are in
 7     the business of buying rating points and they will
 8     consider the environment for their clients -- certain
 9     environments are more conducive than others, but
10     certainly I think that we are well beyond the issue of
11     advertisers penalizing Canadian programming.
12  3539                 COMMISSIONER WILSON:  We are beyond
13     that?
14  3540                 MR. MACDONALD:  I believe so, but
15     there is still going to be an element of show me and
16     prove it.  So, if we had a legitimate number, would
17     Baton be able to go out and sell "Cold Squad" at 4.4
18     ratings, and the answer would be, well, they would
19     round it down to 4, but they would get paid for a 4
20     rating.
21  3541                 COMMISSIONER WILSON:  Okay, thanks.
22  3542                 Another one of the areas that you
23     deal with in your submission is the whole issue of the
24     value of news and public affairs programming.
25  3543                 I am not usually giving long


 1     preambles, but I am going to kind of do a long preamble
 2     on this one.
 3  3544                 Would you agree that, as a
 4     conventional broadcaster -- no, actually, I am going to
 5     ask you a question first and then I am going to do some
 6     preamble.
 7  3545                 Would you agree that, as a
 8     conventional broadcaster, your strongest link to your
 9     communities is through news?  In fact, that is the
10     thing that differentiates you as a conventional
11     broadcaster from pay services, from specialty services. 
12     That's the thing that allows you to establish some kind
13     of a relationship with your community, your audience,
14     and develop a loyal viewership.
15                                                        1510
16  3546                 MR. MACDONALD:  Absolutely.
17  3547                 COMMISSIONER WILSON:  Okay.  So at
18     paragraph 86 --
19  3548                 MR. MACDONALD:  Now that you have got
20     me into the trap, I'm ready.
21  3549                 COMMISSIONER WILSON:  At paragraph 86
22     of your submission, you say:
23  3550                      "News Hour at BCTV is the third
24                            largest news cast in North
25                            America and Pulse News at CFCF


 1                            generates a significant share of
 2                            tuning.  With the exception of
 3                            Ontario, WIC stations rank
 4                            number one or two in news in
 5                            each of their markets."
 6  3551                 Then at paragraph 63 you state WIC
 7     currently generates unacceptably low margins in its
 8     news.  The CAB shows that on a direct basis, news as a
 9     category generates a 16 per cent profit margin.  I
10     don't know if you want to give us this figure right now
11     or later.
12  3552                 I am interested to know what your
13     direct cost margins are in comparison to that.  I was
14     interested to know what unacceptably low meant. 
15     Considering the high praise that you gave your
16     newscasts in paragraph 86, I just wondered what
17     unacceptably low meant.
18  3553                 MR. MACDONALD:  Well, if you wouldn't
19     mind, Commissioner Wilson, I would like to file that
20     with you confidentially.
21  3554                 COMMISSIONER WILSON:  Okay.
22  3555                 MR. MACDONALD:  But I am more than
23     happy to give you the number.  I think that the margin
24     that is of concern to us is you have got two leaders in
25     CFCF and BCTV.  As we said in our comments on TV, it is


 1     quite a different circumstance.
 2  3556                 COMMISSIONER WILSON:  Sure.
 3  3557                 MR. MACDONALD:  It's effectively
 4     competing in the Toronto market without any of the
 5     clients or the resources of the Toronto market and,
 6     quite frankly, there aren't that many people in Toronto
 7     that are typically going to look to a Hamilton station
 8     for their news, to say nothing of the fact that we made
 9     a commitment to the Commission when we expanded
10     Hamilton to keep the local newscasts focused locally.
11  3558                 There are stations where we are not
12     making money on news, but we will file with you the
13     specific, both direct and fully allocated costs for
14     news in the margins.
15  3559                 COMMISSIONER WILSON:  Okay.  I guess
16     the second part of that for me is in paragraph 63.  You
17     also say it is by no means guaranteed that WIC would
18     continue would continue with its chosen strategy of
19     news excellence if the currency of that chosen category
20     were to be devalued by the Commission.
21  3560                 You said yes, that you have  a strong
22     business incentive to do news, that's one of the ways
23     that you develop loyalty in your community.  How would
24     that be in your business interests not to do a really
25     good job on news?


 1  3561                 MR. MACDONALD:  We have said that
 2     that has been one of the factors that WIC has tried to
 3     use to try to differentiate ourselves from everybody
 4     else.  Even though we have tried to create a branding
 5     which associates each of our stations with the parent
 6     company, with WIC, we have never tried to develop WIC
 7     as a parent brand, so to speak, or the primary product.
 8  3562                 We are not CTV, we are not Global. 
 9     We are ITV.  It's ours.  We are CITC, the spirit of
10     Calgary.  We are BCTV, TV for B.C.  That has been the
11     primary focus.  There would be absolutely no reason we
12     would back off our news commitments in those areas
13     where it made sense to do so.
14  3563                 We are not profitable in all of the
15     markets.  If all of a sudden we had to by direction be
16     told "Okay, your percentage on 7,8 and 9 is X and it
17     needs to go to Y", we have to look at that in the
18     context of the overall business plan because at the end
19     of the day, we can only do as much as we can do based
20     on the margins that we are going to be able to present
21     to our shareholders.
22  3564                 Either revenue goes up, and it
23     certainly -- you know what's happening with revenue --
24     or expenses go down and we have completely restructured
25     the company so we have been able to absorb new


 1     competition in three of our key markets, but we are
 2     quickly running out of tricks.
 3  3565                 If all of a sudden we were told that
 4     incremental to our news spending was going to be
 5     another 3 or 4 per cent of revenue that had to be spent
 6     on 7, 8 and 9, that would be a significant amount of
 7     money.
 8  3566                 COMMISSIONER WILSON:  I guess the
 9     feeling that I got because that point was made numerous
10     times in the submission was like, you know, we might
11     not do it.  In fact you are required to do it.
12  3567                 MR. MACDONALD:  I'm sorry?
13  3568                 COMMISSIONER WILSON:  You are
14     required to do this.
15  3569                 MR. MACDONALD:  Absolutely.
16  3570                 COMMISSIONER WILSON:  So it's not
17     like it's a choice you could just automatically make
18     yourself to say no, we are not going to do news.
19  3571                 MR. MACDONALD:  No, but everything I
20     think was put within the context of the existing
21     licence term.  We made very firm commitments.  We have
22     lived up to those commitments.  We will continue to
23     live up to those commitments.
24  3572                 We were talking about the going
25     forward position.  We have to -- if the rules change,


 1     then maybe nothing changes.  Maybe we simply say we
 2     have to figure out a different way to cast this, but
 3     clearly, as soon as there are business reasons that
 4     change the dynamic of how your business runs, then you
 5     have to go back and look at the sum of the parts.
 6  3573                 Our concern, quite frankly, was that
 7     the focus seemed to be so singularly on three
 8     categories that --
 9  3574                 COMMISSIONER WILSON:  The focus in
10     the public notice or just in sort of the trend.
11  3575                 MR. MACDONALD:  The trend and the
12     interveners and the tom-toms and the notice was
13     certainly indicative of that.  We just didn't want the
14     focus to be lost on the importance of exactly the
15     points that you made earlier, that it is the connection
16     that we have with our local audience, it is what makes
17     us unique from everybody else.  Otherwise, why have a
18     local station?  You can beam it in by satellite or
19     cable or whatever.
20  3576                 COMMISSIONER WILSON:  At paragraph 52
21     of your submission you say:
22  3577                      "The system will only be able to
23                            meet national public policy
24                            objectives if the participants
25                            in the system are allowed to


 1                            focus their resources on
 2                            targeted areas, and to maintain
 3                            sufficiently large audiences in
 4                            those areas so that there is at
 5                            least the potential for
 6                            promotional leverage to other
 7                            areas within the system."
 8  3578                 Then you go on to say in paragraph
 9     54, and this is similar to the question that I asked
10     you when you appeared as part of the CAB presentation,
11     that broadcasters should be allowed to concentrate
12     their efforts on the specific genres of Canadian
13     programming that they can do most effectively and that
14     those genres may not be the same for each broadcaster.
15  3579                 I think I asked you if what you were
16     suggesting was sort of a hybrid conventional specialty
17     service, at least in prime time.  I should have made
18     that distinction.
19  3580                 I just wonder if you could explain to
20     me how this would work.  I mean, what would your
21     stations look like compared to what they look like now 
22     if you were going to choose a different genre besides
23     drama?
24  3581                 MR. MACDONALD:  In our case they
25     wouldn't look a lot different because we have decided


 1     to concentrate on the two areas of news and drama.
 2  3582                 COMMISSIONER WILSON:  Okay.  Pretend
 3     that you didn't choose that.  Pretend that you are
 4     choosing documentaries or another category.  What would
 5     the channel look like?  I am just trying to figure out
 6     what would other broadcasters do.
 7  3583                 MR. MACDONALD:  Well, then you would
 8     have a lot more documentaries, that's for sure.
 9  3584                 COMMISSIONER WILSON:  I love
10     documentaries.
11  3585                 MR. MACDONALD:  We clearly supported
12     the idea that documentaries be included in the
13     satisfaction of 7, 8 and 9 but they tend to be one off
14     programming as opposed to a series.
15  3586                 COMMISSIONER WILSON:  Right.
16  3587                 MR. MACDONALD:  But that provides its
17     own promotional opportunity.
18  3588                 COMMISSIONER WILSON:  Right, but
19     that's not answering my question.
20  3589                 MR. MACDONALD:  But I think that it
21     depends on which genres different people go after and
22     Commissioner Wylie asked a number of questions related
23     to diversity in the opening day.  We feel that in many
24     ways the singular focus on 7, 8 and 9 -- I mean 7, 8
25     and 9 are fairly broad categories, so we are not


 1     suggesting that you move away from 7, 8 and 9.
 2  3590                 We are really suggesting that there
 3     be some expansion, but the competitive factors between
 4     the groups are going to make sure that everybody is not
 5     doing the same thing.  We are all going to be looking
 6     for certain genres.
 7  3591                 Mr. McCabe said is there going to be
 8     a lot of expansion in sports and news and I think that
 9     generally the conclusion we came to was no, there
10     wouldn't be because it wouldn't make any competitive
11     sense to do that.  There are two 24 hour news services,
12     two 24 hours sports services or will be very shortly.
13  3592                 Where do we fit in?  We felt that
14     many of the stations would focus on hopefully the
15     broader categories of 7, 8 and 9 but documentaries will
16     change the look very significantly.  More will do
17     movies.  I mean one of the things that we had started
18     to do with in WIC was the vertical integration between
19     our pay operation and our television operation, so we
20     have committed to several movies that will have their
21     first home on pay and then move to WIC because we
22     decided to introduce another movie --
23  3593                 COMMISSIONER WILSON:  They will roll
24     our in the orderly marketplace.
25  3594                 MR. MACDONALD:  That's right, such as


 1     it is or such as it may be for WIC.  The point is that
 2     we had chosen to do more movies because we felt it made
 3     sense for us to do that and the kind of movies that we
 4     were doing were very different from the kind of movies
 5     offered by some of our competitors.
 6  3595                 I'm not sure that the differences
 7     will be enormously obvious, but I think that there will
 8     be subtleties that will change quite differently.
 9  3596                 MR. BUCHANAN:  It really depends on
10     what you believe the problem you are trying to fix is
11     if you think there is a problem to be fixed.  In your
12     case, if you think there aren't enough documentaries,
13     then we can fix that by making it something that gets
14     measured as part of the commitments that we already
15     have to you to do 7, 8 and 9 in the stations where we
16     have chosen 7, 8 and 9, for example.
17  3597                 COMMISSIONER WILSON:  Okay. 
18     Paragraph 81 in your submission.  I just have three
19     more questions for you.  You suggest that U.S.
20     specialties and certain commercially-driven exempt
21     services should be required to contribute to the
22     Canadian broadcasting system and you attach as Schedule
23     3 a document that addresses both closed circuit video
24     programming and teleshopping undertakings, but it
25     doesn't explore the notion of extracting a contribution


 1     from U.S. specialties.
 2  3598                 I wonder if you could just expand on
 3     this suggestion.  Do you have any ideas about how you
 4     might do it or how much it might be?
 5  3599                 MR. MACDONALD:  If you look at -- if
 6     we look across the board at subscription revenues that
 7     are currently going into the U.S., we see that in 1997
 8     there was about $78 million of subscription that went
 9     south.  Over and above that, I believe that we are
10     seeing approximately $20 million in Socan fees that are
11     going as distant signals.
12  3600                 I will just check with Ken to make
13     sure that's -- Ken says more like $35 million, the
14     point being --
15  3601                 COMMISSIONER WILSON:  Did you have
16     your mike on when you said that because we will need
17     that for the transcript, the 35 I mean.
18  3602                 MR. BUCHANAN:  We might want to
19     correct it before it gets too far on.  The number going
20     south would need to be explored out of the Copyright
21     Board regime because it's not only Socan distant
22     signal.  It's a blend.  It's not all attributable to
23     the U.S. signals.  It's attributable to programs on
24     Canadians and so on so it wouldn't want to go too far,
25     but this is a real number.


 1  3603                 COMMISSIONER WILSON:  Okay.
 2  3604                 MR. BUCHANAN:  This one is the
 3     subscription fees paid by Canadian cable for the
 4     carriage of U.S. signals on the eligible list in
 5     Canada.  That's real money.
 6  3605                 MR. MACDONALD:  We look at that and
 7     say what would the Commission expect from a Canadian
 8     broadcaster in terms of contribution to the system.  We
 9     are no different -- I mean, this is not an original
10     idea because many have suggested it, but we think that
11     if we are able to extract a contribution to the cable
12     fund from specialty services going on in the future,
13     then that can be a major contribution.
14  3606                 We recognize that there are trade
15     issues.  We recognize that it can't be done by the
16     Commission arbitrarily, but as we move forward to the
17     digital era, we suppose that there will have to be a
18     new licensing approach to digital and we believe that
19     may open up the opportunity for the Commission to say
20     to themselves is there an opportunity here for us to in
21     fact extract some kind of a contribution from those
22     U.S. specialties that are gaining enormous benefit out
23     of Canada and not contributing anything.
24  3607                 COMMISSIONER WILSON:  How would you
25     feel if you had to make a contribution to the U.S. in


 1     the opposite circumstance if you owned a specialty or
 2     pay television service --
 3  3608                 MR. MACDONALD:  Well, most of them
 4     can't believe their good luck in coming into this
 5     country with absolutely no cost whatsoever.  It is
 6     brought in and all they get is a cheque.  In fact, I
 7     think the funniest story I will recount to you was from
 8     a U.S. shareholder that was involved in a Canadian
 9     application who went through the entire process of
10     filing the application, going through all the meetings,
11     all the hearings and everything else, finally to be
12     given a licence, not to be able to initially get
13     launched and then find out that a service they owned
14     100 per cent of was added automatically when they got
15     back to the shop.
16  3609                 I would say that most of these
17     services can't believe their good luck.  I think that
18     nobody is wanting to give away more than they need to
19     do.  The question is should U.S. services be able to
20     come in here with no commitments whatsoever to the
21     Canadian broadcasting system.
22  3610                 Since we are extracting a tithe from
23     each of the Canadian broadcasters and since we are
24     really going more and more to an open border situation,
25     we simply look at this and say we have to be cognizant


 1     of every opportunity to put more money into our system
 2     and that's one that we would suggest.
 3  3611                 As far as the teleshopping, I am
 4     going to ask Grant to talk about that.
 5  3612                 MR. BUCHANAN:  I think we did that.
 6  3613                 COMMISSIONER WILSON:  That was
 7     covered.  That was good.  I don't really need to know
 8     any more about the teleshopping.
 9  3614                 MR. BUCHANAN:  To finish that answer,
10     yes, if we could get the kind of carriage in the U.S.
11     that they get here for our services, we would be
12     delighted to pay a tithe.
13  3615                 COMMISSIONER WILSON:  Okay. 
14     Infomercials, I have just got to ask you, in spite of
15     what Commissioner Wylie said about how much she likes
16     infomercials.
17  3616                 THE CHAIRPERSON:  I like to be
18     educated.
19  3617                 MR. MACDONALD:  It's educational
20     programming now.
21  3618                 COMMISSIONER WILSON:  Yes.  It's a
22     new category.
23  3619                 I can certainly, and I should say
24     finally because someone had to explain this to me, I
25     understand that counting infomercials as Canadian


 1     content might satisfy industrial objectives, but I need
 2     a bit of help on the issue of how that might satisfy
 3     cultural objectives in the system.
 4  3620                 I'm just wondering, or is anybody
 5     purporting that counting infomercials as Canadian
 6     content is going to satisfy any cultural objectives at
 7     all?
 8  3621                 MR. BUCHANAN:  Thank you for the
 9     question.
10  3622                 Yes.  They come in so many varieties
11     it boggles the mind.  What started out as slice and
12     dice late night fare has graduated to the point now
13     where major corporations are doing infomercials that
14     are better than half hour shows that you watch that do
15     qualify as programs.
16  3623                 Some of the stuff you see that is
17     produced by these corporations that are infomercials
18     that describe their charitable works and so on have
19     nothing other than their logos at the beginning and the
20     end.  They are not pitches all the through with the
21     seven minutes sales.  There is some wonderful
22     programming out there.
23  3624                 Now, that is not all infomercials,
24     but I tell you, when you see the demographics of the
25     people who watch them and use them -- I won't speak


 1     directly to the Chair here -- it is not at all what you
 2     would expect.  There are all kinds of people who enjoy
 3     them.  It is quite a wide range.  We did a lot of
 4     research when we brought those applications forward.
 5  3625                 If the Commission was concerned for
 6     some reason that they might not satisfy the kind of
 7     objectives, put a cap on it, but to totally preclude it
 8     we thought was wrong for a considerable period of time.
 9  3626                 COMMISSIONER WILSON:  How many of
10     these are being produced by Canadians right now?  Do
11     you have any idea?
12  3627                 MR. BUCHANAN:  Very few because the
13     way it's set up now is you can't count it as Canadian
14     content.  What you effectively do is you have to trade
15     off the half hour.  You have to take your lowest rated
16     U.S. program and decide whether you are better to take
17     a Canadian infomercial and put it on.
18  3628                 MR. MACDONALD:  Don't you think that
19     the floaty did a nice job?
20  3629                 COMMISSIONER WILSON:  What is that
21     like, some kind of spray-on hair or something like
22     that?
23  3630                 MR. MACDONALD:  No.  That's the
24     cutter that you hook up to the vacuum cleaner.
25  3631                 MR. BUCHANAN:  We should finish this


 1     thought.
 2  3632                 COMMISSIONER WILSON:  Well, actually,
 3     you know what I was going to -- no, we probably
 4     shouldn't.
 5  3633                 MR. MACDONALD:  We don't do the other
 6     side.
 7  3634                 MR. BUCHANAN:  Not that thought.  The
 8     thought that there's a lot of room for genres other
 9     than 7, 8 and 9 that have an appeal to people.  That's
10     really the central message we are trying to deliver
11     today.  Don't direct someone here because you will end
12     up neglecting over here.
13  3635                 COMMISSIONER WILSON:  That message is
14     received loud and clear.
15  3636                 MR. BUCHANAN:  Thank you.
16  3637                 COMMISSIONER WILSON:  I wonder if I
17     could ask you to put on file with us one of these
18     wonderful infomercials you have seen as you were doing
19     your research.  I would love to see something that you
20     would consider better than some other programming.  I
21     need to be able to visualize that on a concrete basis.
22  3638                 MR. BUCHANAN:  We would be happy to
23     do that.
24  3639                 COMMISSIONER WILSON:  Thank you.
25  3640                 This is my final question and this


 1     one does have a big preamble.
 2  3641                 I just want to ask you about your
 3     comments about direct access to the equity investment
 4     program by broadcasters or broadcaster controlled
 5     production funds.
 6  3642                 You state at paragraph 149:
 7  3643                      "It is incongruous that large
 8                            producers with significant
 9                            ownership interests in
10                            broadcasting undertakings are
11                            permitted to access these funds
12                            and yet broadcasters with
13                            production interests are not."
14  3644                 Interestingly, I guess it was Ian
15     Morrison from Friends who made a comment about this and
16     said this is really not the same thing as the cable
17     companies being prevented from holding specialty
18     licences and that kind of thing.  I guess you guys do
19     have something in common from time to time.
20  3645                 You go on to say:
21  3646                      "The Americans have clearly made
22                            a policy decision to enable
23                            their massive integrated
24                            production, broadcasting and
25                            distribution entities to


 1                            dominate the world marketplace."
 2  3647                 Earlier in your submission at
 3     paragraph 11 you also raised the issue of the
 4     integrated U.S. networks, but there you talk about the
 5     potential negative effects that this move could have on
 6     the Canadian broadcasters' ability to purchase
 7     programming rights.
 8  3648                 I guess it struck me listening to the
 9     CFTPA's concerns about the gatekeeping role of
10     broadcasters in Canada that you might well find
11     yourself in a similar position with the U.S. networks
12     that whereas the independent producers in Canada see
13     you as a gatekeeper to their profitability as an
14     industry, the U.S. networks could well become
15     gatekeepers to your profitability as an industry.
16                                                        1530
17  3649                 On the one hand, you recognize the
18     inherent difficulties associated with what has happened
19     in the U.S. because it could have a very direct effect
20     on your bottom line, but on the other hand you would
21     like some of the same thing to happen here.
22  3650                 I guess it just kind of reminded me
23     of that old picture of the big fish eating the littler
24     fish, eating the littler fish and the only way -- there
25     are a lot of analogies being thrown around during this


 1     hearing as well.
 2  3651                 MR. MACDONALD:  There are a lot of
 3     fish stories.
 4  3652                 COMMISSIONER WILSON:  A lot of fish
 5     stories.  It was this big.
 6  3653                 I am wondering if you could comment
 7     on that?
 8  3654                 MR. MACDONALD:  And what would appear
 9     to be a totally hypocritical comment?
10  3655                 COMMISSIONER WILSON:  Yes.
11  3656                 MR. MACDONALD:  I would -- first of
12     all, we stand by the comments made about the U.S.  That
13     happens to be reality.  I think it is a very good and a
14     very fair comment to be saying if it's a problem there,
15     why wouldn't it be a problem here.
16  3657                 In fact, if you look back and say why
17     did we get into this issue of independent producers in
18     the first place, it was really because of the vertical
19     integration that existed at that time in the
20     broadcasting industry in Canada.  We started and we
21     created an independent production sector, which was
22     quite different than it is today.  The independent
23     producers back then were very different than what
24     independent production has evolved to, at least in
25     certain sectors.  We now have some fairly large


 1     publicly owned independent producers.
 2  3658                 We say in recognition to the point
 3     that you bring up that it would be fair to put some
 4     kind of a cap on it, but that we certainly don't
 5     believe that we should be precluded from making those
 6     kinds of investment or becoming distributors.  In fact,
 7     we would be prepared to put more money in.
 8  3659                 Right now we are dealing with a
 9     situation that if we get anything back from investments
10     that we have to respend it if we are on dollars and
11     that seems pretty obtuse, quite frankly.  Why would
12     anybody do it?  You have to spend it until you lose it. 
13     It is sort of like doing it in Vegas.
14  3660                 Our view here is that we would like
15     to see some of those rules changed for the singular
16     purpose of getting more money into the system. 
17     Producers have become broadcasters and broadcasters
18     should be able to get into the distribution and
19     production side.  We think that it's fair.  WIC feels
20     that it is certainly fair to put some kind of a cap on
21     it.
22  3661                 COMMISSIONER WILSON:  Have you
23     thought about what kind of impact that might have on
24     the independent production sector in Canada, I mean the
25     small to medium-sized producers?


 1  3662                 MR. MACDONALD:  I think if you look
 2     at the licensing of when Alliance was licensed for
 3     their specialty services there were commitments that
 4     were undertaken in terms of that integration.
 5  3663                 COMMISSIONER WILSON:  Right.
 6  3664                 MR. MACDONALD:  I think the same kind
 7     of thing happened with --
 8  3665                 COMMISSIONER WILSON:  They are not
 9     really a small or medium-sized company though.
10  3666                 MR. MACDONALD:  Atlantis.
11  3667                 COMMISSIONER WILSON:  Now they are
12     big.
13  3668                 MR. MACDONALD:  That's our point. 
14     But they were asked to enter into commitments that made
15     sure that there was access for other people and I think
16     those are good guidelines to start.
17  3669                 Do we think that the overall impact
18     on the smaller producers -- it's difficult to really
19     identify that because if you adopt 7, 8 and 9, the
20     expanded 7, 8 and 9 as recommended with documentaries,
21     that's going to open up a whole new opportunity for a
22     lot of the regional producers and a lot of the smaller
23     producers.
24  3670                 A lot of the major projects are done
25     by the bigger companies now.  So, there is no question


 1     that there would be less, quote/unquote, "shelf space"
 2     for independent producers under that regime and it
 3     would be made more competitive, but we are suggesting
 4     that a cap, or at least allow broadcasters the
 5     opportunity to get in is fair.
 6  3671                 We are not suggesting that you go and
 7     again I am speaking for WIC here, I am not suggesting
 8     that you go to the extent that the U.S. model has,
 9     which is the full -- they can go to 100 per cent if
10     they want.  The truth of the matter is that independent
11     producers produce damn good projects and you would be
12     very silly to try to put all the development,
13     everything in your camp.
14  3672                 When we do projects with Atlantis or
15     Alliance, it is because they have got an amazing
16     development operation because they have got good
17     projects, they have got good writers, they have got
18     good talent.  We have to really look at that very
19     carefully because it is easy to say, "Well you just do
20     it," but the investment that each of these networks is
21     having to make is enormous.  So, I do think that we
22     would get into some projects on our own, but the vast
23     majority in our case would still be through independent
24     producers.
25  3673                 COMMISSIONER WILSON:  I want to thank


 1     you for the time.  I know I kept you a lot longer, but
 2     I felt that in view of where you are headed that you
 3     would feel maybe a little less constrained about
 4     sharing your views with us at this point on this
 5     particular topic.
 6  3674                 MR. MACDONALD:  Do you know where we
 7     are headed?
 8  3675                 COMMISSIONER WILSON:  I have no idea.
 9  3676                 MR. MACDONALD:  It would help us
10     here.
11  3677                 COMMISSIONER WILSON:  I am new here. 
12     But thank you very much, that was very useful.
13  3678                 THE CHAIRPERSON:  Commissioner
14     Pennefather.
15  3679                 COMMISSIONER PENNEFATHER:  I just
16     wanted to be sure that I got the message, as you were
17     saying before.  Throughout your presentation and in
18     discussions with Commissioner Wilson and again even in
19     the Executive Summary, we see that our view would be to
20     allow the broadest possible flexibility, so that the
21     system can enjoy the broadest possible diversity. 
22     Example, broadcasters should be required to have their
23     scheduling options so we do not feel broadcasters
24     should be required to have scheduling options so
25     constrained.


 1  3680                 The gist of this then is greater
 2     flexibility and do you feel that this will result in
 3     more Canadian programming?  Is that Canadian
 4     programming going to be throughout the day or in prime
 5     time?
 6  3681                 MR. MACDONALD:  First of all, I don't
 7     think that anything we are recommending is going to
 8     result in more Canadian programming.  We have looked at
 9     more on a system-wide basis and we have said that more
10     has come from the specialties, the more hours the more
11     dollars.  We are trying to focus on making a smaller
12     number of programs work better.
13  3682                 COMMISSIONER PENNEFATHER:  In any
14     time where you think it works best?
15  3683                 MR. MACDONALD:  For us, we have tried
16     a number of different things.  We have tried, as an
17     example, the development of daytime talk shows.  We
18     developed the "Jane Haughton Show" and we made it
19     successful.  We jointly did it with WTN, but it was a
20     show that was perfect for WTN and they were able to
21     give it the wings and move it forward.
22  3684                 We decided at that time that really
23     where WIC had to compete was in prime time.  That's
24     where we needed to put our resources.  So, we decided
25     to focus in that area.


 1  3685                 It is also fair to say that WIC has
 2     concentrated on more international-type projects or
 3     global projects, as the Commission has referred to
 4     them, which means that we are ultimately going to run
 5     more because the 150 doesn't work for us as well as it
 6     works for other companies.  So I guess in that sense
 7     there is going to be more.  But overall we are not
 8     advocating more.  We are advocating doing it better. 
 9     For WIC it will be primarily in prime because that's
10     where we are focused.
11  3686                 We are just saying that out of this
12     whole hearing has come sort of a clamouring for do
13     more, make it more specific, make it more this, make it
14     more that, which we believe is in sharp contrast to the
15     strategic plan that the Commission outlined.  We are
16     saying work with us, don't give up anything you have
17     got in terms of current controls, but work with us to
18     get to the point that really is critical.  We have got
19     to have more viewers.
20  3687                 COMMISSIONER PENNEFATHER:  Therefore,
21     that flexibility is required.
22  3688                 MR. MACDONALD:  Yes.
23  3689                 COMMISSIONER PENNEFATHER:  One quick
24     question, Commissioner Wilson brought our attention to
25     your schedule here and you said you would run a


 1     Canadian show well in the 7:00 to 8:00 period against
 2     the shows that are here, "Star Trek" and -- what kind
 3     of show would you be looking at to do?
 4  3690                 MR. MACDONALD:  Are you looking at
 5     the Calgary schedule or the Edmonton?
 6  3691                 COMMISSIONER PENNEFATHER:  The
 7     schedule that Commissioner Wilson brought just as an
 8     example in Edmonton, where you said that you felt that
 9     running a Canadian program -- if I understood you
10     correctly, running a Canadian program from 7:00 to 8:00
11     would be good, would work well in terms of getting
12     audiences, viewers for Canadian programs.
13  3692                 MR. MACDONALD:  You will notice as an
14     example, if we are working on the same schedule, that
15     "Stargate" which is running on Thursday at eight
16     o'clock could probably do very well where "Star Trek
17     Voyager" is.  "Night Man," which is also running at
18     eight o'clock on Saturday could probably do better in
19     an earlier time slot.
20  3693                 All we are really saying is let's be
21     mindful of the fact that you have to have -- there has
22     to be an audience there period, but there are different
23     corridors where there is a significant audience and not
24     necessarily the same competition.  All we are really
25     looking for is asking the Commission to familiarize


 1     themselves with those kinds of corridors and allow us
 2     the flexibility to go after them.
 3  3694                 COMMISSIONER PENNEFATHER:  Okay.  I
 4     can say too that Commissioner Wylie admitted she was
 5     interested in infomercials.  I happen to be a trekkie,
 6     so I notice a theme here moving into the audiences who
 7     are following "Star Trek".  Thank you very much,
 8     gentlemen.
 9  3695                 MR. MACDONALD:  Thank you.
10  3696                 THE CHAIRPERSON:  Commissioner
11     McKendry.
12  3697                 COMMISSIONER McKENDRY:  Thank you,
13     Madam Chair.
14  3698                 When I was listening to the
15     presentation by the Canadian Association of
16     Broadcasters I was perplexed and rather than direct
17     this question to the Association, I am directing it to
18     the people who are actually out there doing it because
19     I think you are the people who can best answer the
20     question for me.
21  3699                 I think actually in your comments
22     today you have cleared up for me a lot of what was
23     causing me to be perplexed, so I want to clarify that
24     with you and then I have a question that flows from
25     that.


 1  3700                 Why I was perplexed when I was
 2     listening to the CAB presentation was that there were a
 3     number of overhead slides that showed significantly
 4     increasing expenditures on Canadian programming over
 5     the last few years, an increasing number of channels
 6     and so on.  But the one that I found most interesting
 7     in relation to that was the one that was headed
 8     "Canadian Viewing Shares Flat" and the Canadian viewing
 9     share, according to this, has been flat over several
10     years.
11  3701                 What I asked myself was, to be frank,
12     what were you guys doing?  I mean, you are in the
13     business of getting audience and all that money is
14     being spent and audience share is just staying flat.
15  3702                 Now, I think what you said today is
16     that in effect there was benign neglect.  You could
17     subsidize or cross-subsidize some very profitable U.S.
18     programming and you really didn't need to worry about
19     that because your bottom lines were sufficient in light
20     of the high margins on U.S. programming.  Your
21     shareholders were happy as things went along.
22  3703                 I understood you to say to
23     Commissioner Wilson that things have now changed, that
24     isn't the situation any more.  The market is
25     fragmented, the margin on U.S. programming has fallen


 1     due to competition, so now you need to get audiences.
 2  3704                 I guess what I am going to ask you,
 3     assuming -- have I described the situation correctly?
 4  3705                 MR. MACDONALD:  Yes, but I want to
 5     come back to the words "benign neglect" because I think
 6     that my colleagues at Global, as an example, have done
 7     an exceptional job in their promotion of "Traders" and
 8     Baton have done an exceptional job on "Cold Squad." 
 9     Those are projects that are I thin more recent, but the
10     Canadian paradigm that we are talking about goes back
11     several years.  It is not just the last -- it goes back
12     a long time.
13  3706                 So, you are correct, but I just want
14     to make sure that you knew that we have been starting
15     to move towards improvement over the last couple of
16     years.
17  3707                 COMMISSIONER McKENDRY:  Now, if it is
18     market forces that are changing the situation, market
19     fragmentation, competition, why do you need me and
20     seven other government officials to come in and say
21     here are the audiences you should attract?  Why
22     wouldn't you do that on your own?  Why do you need help
23     or incentive from us to attract audiences if this is
24     what the market is telling you?  Why wouldn't you as
25     managers of this business say we are going to go out


 1     and get some audience?  Why do you need us to tell you
 2     what size that audience should be?  Isn't the incentive
 3     there?  Isn't the market creating the incentive for
 4     you?
 5  3708                 MR. MACDONALD:  I think what we are
 6     saying is that there is one thing that has in addition
 7     to what I outlined to you, the business reality of
 8     margins, there is another reality that is very, very
 9     important and that is that Canadian programming has
10     gotten a heck of a lot better.
11  3709                 I think that we have proved very
12     clearly that when Canadian producers and directors and
13     talent are working with similar budgets we can produce
14     a very, very competitive product.  So, that's a big
15     change in the dynamic as well.
16  3710                 What we are saying is in response to
17     the clamouring to make them to do more, make them do
18     more.  We want to focus on exactly the issue that you
19     brought up and that is to recognize what we have got to
20     do and get on with doing it.  So much of our problem
21     has been that our resources are spread so thin because
22     we have had quantitative commitments that we have
23     always had to meet and then we are trying to ensure
24     that the quantitative commitments don't continue to
25     escalate, so that we can't really work on the


 1     qualitative aspects of what we have got to do.  That's
 2     it in a nutshell.
 3  3711                 We just want to get on with making
 4     the audience development happen, as opposed to have to
 5     deal with more and more and more tonnage, which just
 6     continues to exacerbate a problem that is already
 7     there.
 8  3712                 COMMISSIONER McKENDRY:  If I
 9     understand correctly your views, you ultimately would
10     like -- I realize you are not throwing out the existing
11     regulatory system, but as I understand it you would
12     like to have evolve a regulated target for audience
13     share.
14  3713                 What I am driving at is given the
15     market that you have described to us, why do you need
16     me and my colleagues to do that for you?
17  3714                 MR. MACDONALD:  Well, it comes back,
18     Commissioner McKendry, to the leadership issue that I
19     brought up at the beginning.  I mean, what happens in
20     any company is driven from the top and whatever the
21     priorities of that company are established from the
22     top.  We are hoping that the Commission will establish
23     audience as an important priority because if the
24     Commission establishes it as a priority, then it will
25     be a priority for your licensees.  It will be a known


 1     priority to your colleagues in other ministries and
 2     that we tried to move the bench marks forward on that
 3     basis.  Certainly audience is measurable.
 4  3715                 We think that unless we put it up on
 5     a pedestal and that we move forward with that as an
 6     underscored part of what we are trying to do together
 7     that it will just get lost in the shuffle.
 8  3716                 COMMISSIONER McKENDRY:  Thank you,
 9     Madam Chair.
10  3717                 THE CHAIRPERSON:  Commissioner
11     Cardozo.
12  3718                 COMMISSIONER CARDOZO:  Thanks, Madam
13     Chair.
14  3719                 I have a couple of questions that I
15     am just trying to sum up in my mind, the core of your
16     message.  If you move -- focus on to the issue of
17     audience and viewers, do you want at some point -- and
18     you talk about the ultimate goal being doing away with
19     regulation I think when you were part of the CAB
20     presentation.  Do you see a time coming up fairly soon
21     where there would not need to be regulation dealing
22     with the content issues?  That the issue of quality --
23     and I guess this is part of what has been the concern
24     of some of the other people who disagreed with your
25     model, that we wouldn't be interested in not just


 1     Canadian, but also the quality of the programming, but
 2     only on the issue of audience and number of viewers?
 3  3720                 MR. MACDONALD:  I think that whenever
 4     you try to put together a proposal you have to look for
 5     anybody, but particularly the regulator, you have to
 6     put yourself in the shoes of the regulator and say, "If
 7     this guy came before me and said trust me, is that
 8     really going to fly?"
 9  3721                 I think that what we have tried to do
10     is come before you with an idea that we think can fly
11     and we have asked you not to move away from any of your
12     normal tools.  I think that the only time that we can
13     legitimately come before you and say, "Now we would
14     like to move to the next step of deregulation," is when
15     we have proven to you that we can do the first part.
16  3722                 So, again, we are asking you to move
17     into looking at this from a qualitative point of view,
18     recognizing that quality is so damn difficult to try to
19     measure.  But it does translate, we hope, into quantity
20     of audience.
21  3723                 So, we are suggesting that all the
22     measurement tools are still there and would continue to
23     be there, but that the leadership from the Commission
24     moves us towards a different currency that says viewers
25     are important.  Viewers are really an important part of


 1     this, so we are going to control and make sure that the
 2     system moves forward with our traditional tools, but we
 3     are going to adopt the viewership concept.  We are
 4     going to embrace the broadcasters' commitment to
 5     develop a viewership plan, a business plan for all of
 6     Canada to bring viewership as an important component.
 7  3724                 Everybody that has been here -- this
 8     is one of the exciting things is that people have maybe
 9     misinterpreted or misunderstood or whatever.  That will
10     be solved by the end of this hearing, but nobody has
11     said that generating more viewership to Canadian
12     programming is a bad idea.  In fact, everybody said it
13     is a good idea.
14  3725                 So, from our perspective we say we
15     are not asking the regulator to move off the
16     regulator's tool bag, but we are asking you to adopt a
17     different strategy.
18                                                        1550
19  3726                 COMMISSIONER CARDOZO:  But I'm not
20     clear then as to why you say this is qualitative when
21     in fact you are really talking about quantity of
22     viewers and your view is that the Commission has
23     focused on quantity of programming.  The issue I don't
24     hear you talking about is the quality of the
25     programming.


 1  3727                 MR. MacDONALD:  The quality -- I am
 2     making the assumption, and maybe this is wrong, that
 3     quality attracts viewers.  So, if I look at hours, it's
 4     a very quantitative measurement.  If I look at dollars,
 5     it's a very quantitative measurement.  If I get into
 6     quality or, as the Act calls it, standard, it's very
 7     difficult because we all have different standards and
 8     what is a popular program is not necessarily a quality
 9     program, and we can get into those semantics.
10  3728                 But, in general, we are working on
11     the assumption that if we can build quality into the
12     system, we can build audience into the system and the
13     way that we can ultimately bring this nebulous issue of
14     quality to bear in such a way that it can be measured
15     is by turning what we are trying to do into more
16     audience.
17  3729                 COMMISSIONER CARDOZO:  I guess my
18     reading of the situation is that -- and I give the
19     credit to people who have been here before me, but my
20     sense is that we moved from tonnage, if you can call it
21     that, to quality over the last number of years as we
22     added on requirements around prime time and around
23     expenditure for the precise purpose that it would
24     result in viewers.  So, it seems like the Commission
25     have the idea already in those two things.


 1  3730                 MR. MacDONALD:  Well, I don't
 2     disagree that that was the objective, but thus far as a
 3     system we haven't been able to generate the additional
 4     audience.  I think we are close, but I think that's why
 5     we feel that if the Commission adopts it, we can bring
 6     all the pieces together, because we are that close.
 7  3731                 COMMISSIONER CARDOZO:  I will just
 8     read one sentence here from your presentation today.
 9  3732                      "...the 'do more' proposals you
10                            have heard are simply not
11                            consistent with the economic
12                            viability of the engine that
13                            pulls the system."
14  3733                 So, I just want to understand the
15     core of your presentation, which is that more
16     flexibility will get us better quality, more
17     competition and then more viewers and that you
18     definitely do not want to see any higher levels or any
19     more specificity in how those levels should be
20     implemented.
21  3734                 MR. MacDONALD:  If you could write it
22     up just like that, I would be very happy.
23  3735                 COMMISSIONER CARDOZO:  I got it then. 
24     Thanks.
25  3736                 THE CHAIRPERSON:  I have two


 1     questions.  The first is I don't know if all of you
 2     were here when Mr. Morrison was here this morning, but
 3     I heard you say, Mr. MacDonald, that complementarity is
 4     brought on by competition and what he exposed to us was
 5     by using the schedules of the broadcasters that exist
 6     or that transmit in Ottawa, competition had actually
 7     worked against complementarity in that local and
 8     regional programming was disappearing because stations
 9     had to compete doing the same thing if they were going
10     to survive.
11  3737                 I understood you to say competition
12     would have the opposite effect.  So, why is it that
13     with the introduction of CHUM, CFMT and your Hamilton
14     station into Ottawa, it would appear that local and
15     regional programming is disappearing and that the
16     schedules are presumably looking more and more the same
17     because, so their research says, people have to compete
18     with the additional stations that are now available in
19     that market?
20  3738                 MR. MacDONALD:  Madam Chair, it's a
21     very good question.  I don't have the charts and I
22     haven't studied them specifically, so I am probably not
23     capable of answering your question.  I would have
24     thought that CJOH, as an example, has a wonderful news
25     reputation in this market.  They also have, of course,


 1     the ability to sell locally.
 2  3739                 When we did a lot of research about
 3     coming into Ottawa, one of the things that we found was
 4     dramatically underserved was the local market in terms
 5     of local programming.  So, I can't understand why the
 6     station wouldn't move forward against that core
 7     competency, because it is a niche that clearly is
 8     underserved and Ottawa is a major market for news.
 9  3740                 But generally it has been our
10     experience that people don't all clamour to do exactly
11     the same thing in the spirit of competition.  They tend
12     to go off and develop different kinds of projects with
13     different kinds of companies.  So, they are developing
14     a uniqueness to the market.
15  3741                 The fact that we have all been asked
16     to focus on 7, 8 and 9 does narrow the gap somewhat and
17     I do believe that if you in fact expand the categories
18     somewhat that will help dramatically, but I can't
19     answer your specific question about information
20     programming because that would seem to fly --
21  3742                 THE CHAIRPERSON:  I said local and
22     regional.  So, it doesn't necessarily mean not news,
23     local and regional programming.  Perhaps we can ask
24     Baton whether they agree with the chart that shows a
25     decrease in serving the local regional market and


 1     whether they feel that it's as a result of having
 2     competition in a market, albeit not necessarily local
 3     because neither you nor CHUM do local, but his thesis
 4     was that the reason why it is disappearing is because
 5     we made the wrong decision in allowing competing
 6     services who now feel they all have to compete with
 7     each other in the same areas and there is no money left
 8     for the local regional.
 9  3743                 But it's perhaps not fair to ask you. 
10     I just wanted your comments on the principle, which is
11     completely at odds with his.  He seems to be able to
12     demonstrate a result that would support his.
13  3744                 MR. BUCHANAN:  We will follow that
14     discussion with interest.  It would also be interesting
15     to know whether those stations were on hours or dollars
16     and whether they channelled their dollars and hours
17     into 7:00, 8:00 and 9:00 in the evening and so on and
18     out of the local and regional as a result of what
19     happened in the last round of licensing.  So, we will
20     follow that.
21  3745                 THE CHAIRPERSON:  Of course, Mr.
22     Buchanan, you live in Ottawa, so you should be most
23     interested in seeing "On The Road Again" and clogs and
24     so on.
25  3746                 On a more jurisprudential basis now,


 1     in the Preface to our Public Notice the first paragraph
 2     was:
 3  3747                      "The attached public notice sets
 4                            out the issues and concerns the
 5                            Commission wishes to discuss as
 6                            part of a broad and fundamental
 7                            review of its policies relating
 8                            to television..."
 9  3748                 And at paragraph (iv) of the same
10     Preface to the Public Notice announcing this hearing,
11     the Commission says that its:
12  3749                      "...goals for this review of its
13                            regulatory and policy framework
14                            for television are
15                            straightforward - further the
16                            development of a strong and
17                            viable programming industry..."
18  3750                 And later on in the Preface, at
19     paragraph (xii), the third last bullet, the Commission
20     asks as one question:
21  3751                      "What framework is necessary to
22                            allow for different, but
23                            equitable contributions by all
24                            broadcasters?"
25  3752                 The second last bullet:


 1  3753                      "What framework would best
 2                            encourage the production,
 3                            acquisition and exhibition of
 4                            commercially viable Canadian
 5                            programs?"
 6  3754                 You have participated in the hearing
 7     and you have appeared today, but you felt it necessary
 8     at paragraph 4 of your Executive Summary to say that:
 9  3755                      "The regulatory bargain is
10                            therefore complete..."
11  3756                 And:
12  3757                      "...absent perhaps moving to a
13                            group licensing regime for
14                            administrative efficiency, the
15                            regulatory status quo should be
16                            preserved.  This is not only an
17                            issue of regulatory fairness."
18  3758                 Not only that:
19  3759                      "We are at precisely the wrong
20                            time to make fundamental changes
21                            on the regulatory front given
22                            the uncertainties outlined in
23                            this submission."
24  3760                 Now, let's leave aside the
25     uncertainties that you have outlined.  Are you


 1     suggesting that the Commission is having this review
 2     and it can't do anything at the end of it because you
 3     have a bargain for seven years and it would be
 4     regulatory unfairness if anything were to be changed?
 5  3761                 MR. MacDONALD:  I will speak to the
 6     first part of that question and then throw it to my
 7     lawyer.  First of all, it's very clear that,
 8     notwithstanding the fact that we have seven-year
 9     licences, the Commission can call us back to have a
10     little discussion, a fireside chat, as the case may be,
11     at five years.  It's also very clear that the
12     Commission can change the television regs whenever it
13     wants to.  So, I would say that you can pretty much do
14     what you want.
15  3762                 THE CHAIRPERSON:  Except that we be
16     unfair.
17  3763                 MR. MacDONALD:  Well, I was getting
18     to that part.
19  3764                 I think that we have in fact put
20     together a business plan that we shared certainly with
21     our board and others and it's predicated on certain
22     assumptions.  We think that there is no question that
23     the Commission can make changes, but we think that we
24     entered into the renewal process in the spirit of that
25     process and that length of time and we think that major


 1     changes to it certainly prior to the end of five years
 2     would be unfair.
 3  3765                 But, Grant, you have some comments, I
 4     am sure.
 5  3766                 THE CHAIRPERSON:  Let me ask you
 6     first whether this is the principle WIC would like to
 7     be applied with regard to any application it brings to
 8     the Commission during its seven-year licence term?
 9  3767                 MR. MacDONALD:  Touché.
10  3768                 MR. BUCHANAN:  You don't need a
11     lawyer.  I have nothing to add.  You are absolutely
12     right, the point is made in the Broadcasting Act and in
13     the regs.  You are perfectly welcome to bring us back
14     to have our chat, but it was interesting, Commissioner
15     Cardozo's question, about the future of the Commission
16     and so on.  I think we will hear lots more in the new
17     media hearing from a lot more people who haven't been
18     in front of you before, who have different views about
19     your future.  We have been sitting noodling about our
20     own and not just WIC as the industry.
21  3769                 You mentioned at the beginning of
22     this hearing we are 50 years into it and don't all of
23     us wish we could look forward and wonder how many more
24     years we have in the same kind of point to multi-point
25     distribution kind of mode or whether we are undergoing


 1     significant changes to our landscape that we need to
 2     deal with in both these hearings.  So, it wasn't just a
 3     regulatory fairness thing.  So many of these things
 4     that we highlighted are going on and for the first time
 5     they are all happening together at the same time.  So,
 6     we are just looking all over the place to find answers
 7     to these things, as we know you are.
 8  3770                 But that's what made it -- we have
 9     entered into these production commitments.  We think we
10     have the stations that are 7, 8 and 9.  There are
11     germination periods, as you well know, for these big
12     projects.  They are going to satisfy those.  We didn't
13     want radical shifts right now and, to be honest, when
14     we finally got the Crop Study the other day, they
15     didn't seem to be pushing for a whole lot of radical
16     change, either, the people at least that were asked
17     when the Commission went out to find what Canadians
18     wanted.
19  3771                 THE CHAIRPERSON:  Thank you very
20     much, gentlemen, and have a nice weekend.
21  3772                 Oh, legal counsel.
22  3773                 MR. BLAIS:  Just three points which I
23     think I need to clarify.  The first on is on page 24,
24     more particularly at paragraph 83 of your submissions. 
25     You say there:


 1  3774                      "We certainly believe that the
 2                            Commission should make every
 3                            effort to ensure that each
 4                            broadcaster is making a
 5                            contribution which is fair and
 6                            equitable so that no one company
 7                            is left with a regulatory
 8                            spending advantage over
 9                            another."
10  3775                 Can you expand on this?  How do you
11     suggest this be accomplished?
12  3776                 MR. MacDONALD:  We think that -- I
13     mean equity is an interesting concept and it can come n
14     many shapes and sizes, but I used one illustration of
15     that in our presentation where I said in a situation
16     where two companies were doing an equal number of same
17     genre hours, the amortization base of revenue would
18     make it significantly different between a smaller group
19     and a larger group.  I just wanted to make sure that
20     those kinds of factors were taken into consideration
21     when the equitable contribution that was made by each
22     of the companies was looked at.
23  3777                 MR. BLAIS:  But you don't have a
24     specific more than that generally it should be
25     equitable and fair?  You don't have a specific way for


 1     us to do that?
 2  3778                 MR. MacDONALD:  No, we are not
 3     advocating a particular percentage of this or a
 4     percentage of that or anything else.  We just wanted to
 5     make sure that we demonstrated that there was certain
 6     potential for inequity given certain circumstances and
 7     that was one example.
 8  3779                 MR. BLAIS:  There is another point --
 9     maybe it's after lunch and I couldn't follow the
10     discussion, but we had discussions about this audience
11     potential between 7:00 and 8:00 p.m. and you were
12     saying that there was potentially interesting audiences
13     in that time frame and that it could be a place for
14     Canadian programming to get audiences.  But it would
15     seem that, despite that potential, you are still
16     putting mainly U.S. programming in that time slot and I
17     want to make sure, have we put a regulatory burden --
18     not a burden, but an obstacle in your way from
19     exploring those options?
20  3780                 MR. MacDONALD:  Not for WIC, you have
21     not.
22  3781                 MR. BLAIS:  So, it would make good
23     business sense for you to explore that right now to put
24     Canadian programming between 7:00 and 8:00?
25  3782                 MR. MacDONALD:  Yes, and we are.


 1  3783                 MR. BLAIS:  Yet there is a suggestion
 2     that we should go even further and hold your hand to
 3     get you to do that in your submissions.
 4  3784                 MR. MacDONALD:  No.  There are some
 5     licensees that have core prime commitments and we were
 6     really speaking in support of expanding the notion of
 7     core prime from 8:00 to 11:00 to 7:00 to 11:00, that's
 8     it.  But to be specific, there are no particular
 9     regulations that affect WIC.  Most of our stations are
10     on hours.  It's very clear when those hours have to run
11     and that's it.
12  3785                 MR. BLAIS:  My last question comes to
13     your oral submission on page 4.  Commissioner
14     Pennefather quoted from your submission there in the
15     middle of the page, where you stated:
16  3786                      "In summary, while WIC intends
17                            to schedule primarily Canadian
18                            drama in prime time, we do not
19                            feel that broadcasters should be
20                            required --"
21  3787                 Underscoring "required":
22  3788                      "-- to have their scheduling
23                            options so constrained. 
24                            Competitive forces will ensure
25                            diversity."


 1  3789                 Then you go on and you say:
 2  3790                      "Indeed, we believe that this
 3                            approach is consistent with the
 4                            section --"
 5  3791                 In the singular:
 6  3792                      "-- of the Broadcasting Act
 7                            relating directly to the
 8                            obligations of programming
 9                            undertakings..."
10  3793                 I was wondering if you could tell me
11     which is that one section of the Broadcasting Act which
12     relates directly to the obligations of programming
13     undertakings as opposed to any other section of the
14     Broadcasting Act.
15  3794                 MR. BUCHANAN:  3(1)(s).
16  3795                 MR. BLAIS:  So, are you suggesting
17     then that if 3(1)(s) is the only section that deals
18     directly with the obligations of programming
19     undertakings, when we look at 3(1)(e), 3(1)(f) --
20  3796                 MR. BUCHANAN:  Before we go through
21     the litany, that section refers specifically to what we
22     were talking about here.  There is all kinds of
23     sections that govern programming undertakings.  You
24     don't have to go through and find them all.
25  3797                 MR. BLAIS:  So, you would agree with


 1     me then that when the Commission, in the exercise of
 2     its jurisdiction, looks to the obligations that each
 3     element of the system and each broadcaster must
 4     contribute in an appropriate way to some of the
 5     objectives, we can look to other sections to reach that
 6     goal?
 7  3798                 MR. BUCHANAN:  You certainly may.  I
 8     guess the point to be made here is this section has a
 9     preamble to it that says what programming undertakings
10     should do is, to an extent consistent with the
11     financial and other resources available to them, do X,
12     Y, Z.  Our concern was that in the discussions so far
13     this week, that part has been overlooked.
14  3799                 There have been lots of suggestions
15     about a percentage of this and the percentage of that
16     and another percentage of this.  Let's read that and
17     make sure that that is factored into the discussion
18     when we consider the proposals put forward by other
19     parties is consistent with the financial abilities of
20     the licensees who are being asked to do them.  But your
21     point is well taken.  There are lots of other sections
22     of the Act that refer to broadcasters.
23  3800                 MR. BLAIS:  I will certainly read
24     subparagraph (s) if you will also read subparagraph
25     (f), which talks about, "each broadcasting undertaking


 1     shall make maximum use and no less than predominant use
 2     of Canadian, creative and other resources."  So, we
 3     will read all of section 3 together then.
 4  3801                 Thank you.
 5  3802                 THE CHAIRPERSON:  I say au revoir.
 6  3803                 We will take a 15-minute break and be
 7     back for those who are appearing later on.
 8     --- Short recess at / Courte pause à 1610
 9     --- Upon resuming at / Reprise à 1625
10  3804                 THE CHAIRPERSON:  Good afternoon
11     again.
12  3805                 Madam Secretary, would you call the
13     next participant, please.
14  3806                 MS BÉNARD:  Thank you, Madam Chair.
15  3807                 The next presentation is by Mr. Chris
16     Stark.
17  3808                 THE CHAIRPERSON:  Good afternoon,
18     Mr. Stark.  You can start when you are ready.
20  3809                 MR. STARK:  Good afternoon,
21     Commissioners.  Thank you kindly for this opportunity
22     to spend 10 minutes or so with you talking about our
23     perspective as people who are blind who use the
24     television system.  We are not viewers but we are the
25     audience as well.


 1  3810                 I think that it is important at the
 2     beginning to acknowledge the assistance of the
 3     Commission staff in helping some of us blind people who
 4     have taken an interest in some of your processes,
 5     helping us to understand those processes and to have
 6     some access to them.
 7  3811                 As I will mention later on, we find
 8     that the Commission's processes are somewhat difficult
 9     to access, and I as an individual would say I have
10     about as much access to it as what you see of an
11     iceberg above the water.  But I did want to, before
12     going into all of that, acknowledge that the staff have
13     been very courteous in making sure that we get on this
14     dance card and I get into this dance hall and have a
15     chance to share a few words with you because I, like
16     many persons with disabilities in general and blind
17     persons in particular, see some good melodies in terms
18     of decisions and signals from the CRTC that we have the
19     right to full and complete access to the television
20     system, whether we access it through vision or hearing
21     or both.
22  3812                 I think that the other point that I
23     would openly make in the beginning is that we have had
24     experiences with the CRTC that show us that the
25     television industry is not an island unto itself, there


 1     is more integration and more linkages between the
 2     various services and systems you regulate and there is
 3     a great deal of interdependency and more and more
 4     interaction.
 5  3813                 I think it is worth looking for a
 6     second at how we became involved in this, my wife and I
 7     and others.  We heard through the grapevine that Bell
 8     Canada was going to ask the CRTC to allow it to charge
 9     blind people for getting telephone numbers while at the
10     same time not agreeing to provide us with telephone
11     books we can read.  Fortunately, the Commission allowed
12     the service of directory assistance for free to blind
13     people to continue.  So it is not all a bleak picture. 
14     We have to acknowledge some of the moves that the
15     Commission has made, and they have been helpful.
16  3814                 Heaped on the top of that was a thing
17     called "negative billing".  The first I knew about it
18     was when my automatic deduction for cable service
19     through the bank resulted in an increase in my monthly
20     expenses without a great deal of warning or information
21     or knowing that I had to call in and say I didn't want
22     it.  Fortunately, the Commission as well there has
23     upheld our right to know what we are paying for.  For
24     those things, we must offer you significant
25     appreciation.


 1  3815                 However, in this case of looking at
 2     television there is a great deal more that we need. 
 3     You have our brief before you.  It is one that says,
 4     "Us too, please".  It talks about integration and talks
 5     about blind people as customers.
 6  3816                 If you realize that blind people -- 
 7     when we use the systems, we are also encouraged to use
 8     the supporting system.  I notice WIC mentioned their
 9     websites, and websites are one particular area that
10     blind people have had some difficulty in using
11     connected to television services.  The CBC's website
12     has been particularly difficult for people who use
13     speech-readers to access.  My wife is in fact a
14     Formula 1 fan and follows the career of Mr. Villeneuve
15     quite closely, and every race we are told to go to the
16     TSN website and see what Gerry Donaldson has to say in
17     extra information, but it is almost totally impossible
18     for us to access that.
19  3817                 Then we move on to the idea of using
20     1-800 numbers to call in, for programs to call in for
21     comments or in fact for advertising that I guess the
22     next presenter will talk about, advertising using 1-800
23     numbers that say, "Call 1-800" and then a name.  Well,
24     it is difficult for blind people to do that.
25  3818                 Those interactive things that affect


 1     the quality of our use as an audience of the television
 2     medium are things which I think we can't overlook.
 3  3819                 Moving on from that to the issue of
 4     exactly what programming is available and whether we
 5     can use it, most of the stuff I guess that we are
 6     recommending, we believe to be low cost/no cost; we are
 7     some of the "do mores", and I don't apologize for that,
 8     but I don't come with a blank cheque and an expectation
 9     of huge expenditures by industry.  I think the fears in
10     terms of access for blind people are based more on lack
11     of knowledge and understanding.  After all, I pay cable
12     bills and I pay eventually for the products that have
13     been advertised on the television as consumer; so I
14     don't want my bills to go up any more than anybody
15     else's.
16  3820                 So my point is that, in my reality
17     check, the reality is that people with disabilities
18     have some degree of difficulty getting the full benefit
19     of television service in Canada.  It could be from
20     solutions as simple as announcing 1-800 numbers once
21     with their voice with the word extension and then once
22     with the number extension.  It could be as simple as
23     announcing some of the temperatures and some of the
24     sports scores and some of the other visual information
25     that is presented on the screen without comparable


 1     audio access.
 2  3821                 If you think that this is not a
 3     serious problem, let me tell you that during the ice
 4     storm we lived through this winter, for a substantial
 5     amount of time until the local radio stations began 24-
 6     hour coverage, it was difficult to get weather forecast
 7     and temperatures for Ottawa that we could understand
 8     because The Weather Network was simply giving the
 9     general global picture and then scrolling all this
10     information and inviting us to read it.  I am afraid I
11     can't read it and I don't think that I should have to
12     read it visually only.
13  3822                 That's part of why I am here to ask
14     for your help, understanding and support in a more pro-
15     active way than the Commission has been able to offer
16     in the past.
17  3823                 We look on to the whole area of
18     programming in terms of knowing what's on the systems. 
19     If I am in Vancouver or if I am in Halifax, the channel
20     for Newsworld is not the same always in every
21     community.  So it is difficult to find a channel.  We
22     don't have access to nine or ten different program
23     sources like a television guide in the newspaper or the
24     channel on the television cable system that broadcasts
25     advertisements and shows the program listings.  Those


 1     things can be resolved in a way which doesn't cause
 2     industry commercial calamity.  They can be resolved
 3     through planning, through thoughtfulness and through
 4     concern for all customers, not just viewers, but for
 5     the entire audience.
 6  3824                 What I am suggesting as well here is
 7     things like an awareness and a consciousness that
 8     people with disabilities want our place in the
 9     boardrooms and on the screens and behind the cameras
10     and in the production teams.  So there is the equity,
11     as I keep hearing -- and it amazes me how many people
12     now use "diversity" and "equity" to mean a lot of
13     different things beside "inclusion".  I think that what
14     we are asking is to be included in the economic, social
15     and other benefits of the television system.
16  3825                 As one of my friends, Mr. Ray
17     Barfoot, wanted me to be sure to tell you today -- he
18     says that he really appreciates being able to get
19     Braille channel line-ups from Rogers Cable, but he
20     really feels quite degraded and discouraged when every
21     time there is a channel line-up change of the service
22     they don't send it to him in advance, he has to call up
23     and ask for it over and over and over; and he doesn't
24     feel, and I don't feel, that that's customer service. 
25     Sighted people get it in the mail, they don't ask for


 1     it.  They are told when the changes are coming, and we
 2     don't have to discover it by accident and go back.
 3  3826                 I am nearly through these anecdotal
 4     remarks that I wanted to make to you in support of our
 5     brief and rely on your questioning of me if there is
 6     anything that is unclear, because I think that what I
 7     wanted to do and my wife wanted to do and our friends
 8     wanted to do was to give you some experiential
 9     information and anecdotal information about what it is
10     like to pay for services that we don't get the full
11     benefit of for no fault of our own.
12  3827                 I heard a lot about business plans as
13     I have sat here this afternoon and basic assumptions
14     that shouldn't change.  From our perspective there
15     seems to be some basic assumptions that it is quite
16     adequate to compete for the market without regard for
17     all of the market, without regard for all of Canadians.
18  3828                 This is best expressed I think by
19     some material I read for the Royal National Institute
20     for the Blind in England, which you could probably
21     obtain as well from their website, which talks about
22     the increased predominance of allowing more freedom in
23     the marketplace and encouraging competition and concern
24     for economic viability, which has been used,
25     incorrectly in their view and my view, to justify not


 1     providing equitable service for all users of a service,
 2     whether it be telephone or television.
 3  3829                 I was particularly disturbed -- and I
 4     have expressed it to the Canadian Cable Television
 5     Association, to see in their initial brief not a
 6     mention of people with disabilities and our concerns. 
 7     You will recall that they were involved with the
 8     Commission in several of the matters we brought to your
 9     attention for review.
10  3830                 So my point is that without your
11     involvement and without your support and without your
12     public demonstration of a commitment to us, I don't
13     think the situation will improve.  I cited one
14     particular example, and that example was of a group of
15     Canadian veterans who had written you, the Sir Arthur
16     Pearson Association of War Blinded Canadians, and asked
17     the very same question a year ago about -- "Please help
18     us get access to sports scores, stock market prices and
19     the like", and the reply was, "Well, intervene licence
20     by licence."
21  3831                 These people have given their vision
22     for this country; they don't need another war to go up
23     against well-heeled commercial undertakings for what
24     you take as your everyday service.  These people and I
25     and all other Canadians who are blind want equal access


 1     to information.
 2  3832                 This lack of information and lack of
 3     ability to access this information is one of the main
 4     reasons why there is an 80 per cent unemployment rate
 5     among blind people, and it is not going to change
 6     unless public institutions realize that they have the
 7     legislative mandate -- and you have had, in my view,
 8     for considerable time the legislative mandate -- to
 9     help us have full access and full participation.
10  3833                 Websites is a good example of a brand
11     new technology that's installed with barriers against
12     people who are blind.  It is not an expensive retrofit,
13     it is failure to consider us as customers; it is
14     failure to include us in the business plan.
15  3834                 So don't do it because somebody
16     wanders in off the street and asks you to do it or I
17     sit here and demand it or you think blind people are
18     objects of charity or you believe that we need special
19     services.  Do it because it is the human thing, do it
20     because it is the right thing, do it because it is your
21     legislative mandate.  Please give us full access.
22  3835                 Thank you, and I will entertain
23     questions.
24  3836                 THE CHAIRPERSON:  Thank you,
25     Mr. Stark.


 1  3837                 Let me introduce myself and my
 2     colleagues to you before we ask questions.
 3  3838                 MR. STARK:  Thank you.
 4  3839                 THE CHAIRPERSON:  There are five of
 5     us here.  I am Andrée Wylie and I am presiding.  There
 6     is also Commissioner Joan Pennefather, Commissioner
 7     Andrew Cardozo, Commissioner David McKendry and
 8     Commissioner Martha Wilson.  Ms Wilson will ask you
 9     questions, and we may as well.
10  3840                 MR. STARK:  Thank you.  Fine.
11  3841                 COMMISSIONER WILSON:  Thank you very
12     much, Mr. Stark.  I appreciate the efforts that you
13     have taken to be here with us today, and thank you for
14     waiting.  I am the person at fault for your waiting so
15     long because I was the one who was going on and on with
16     the previous interveners.
17  3842                 You made the point in your submission
18     that as a blind person it is much more effective
19     presenting your views orally, and you indeed are very
20     eloquent, but I did find your submission both clear and
21     informative and I did want to compliment you on that.
22  3843                 At the beginning of the submission
23     you make a number of recommendations about how the CRTC
24     itself could become more proactive in ensuring that
25     persons with disabilities in general, and blind persons


 1     in particular, receive the same level of access as all
 2     other Canadians to both our public processes like this
 3     one here today and to television, which is what this
 4     hearing is all about.
 5  3844                 You also make a number of
 6     recommendations with respect to the Canadian
 7     broadcasting system covering everything from the
 8     representation of persons with disabilities on
 9     television and how you are, or are not in most cases,
10     able to access new media like the Internet as well as
11     with respect to employment opportunities in the
12     industry.
13  3845                 What I really want to explore with
14     you this afternoon -- and my colleagues may have
15     questions on other areas -- is the whole issue of how
16     television can better serve your needs, particularly
17     the issue of descriptive video.  I have only been at
18     the Commission for four and a half months and I am
19     certainly not an expert of any kind in this area, so I
20     appreciate the opportunity to share with you whatever
21     knowledge or experience you might have in terms of
22     helping me and some of my other colleagues to
23     understand this.
24  3846                 I wonder if you could tell me -- I
25     just want to ask you a few questions about this -- how


 1     much descriptive video is currently available in
 2     Canada, or are you aware of how much is available?
 3  3847                 MR. STARK:  I think that the National
 4     Broadcast Reading Service would probably be the better
 5     ones to tell you the exact quantity.  What I can tell
 6     you is that there is very rarely descriptive video
 7     available.  I know that the Commission, in its letter
 8     to the Sir Arthur Pearson Association, mentioned some
 9     measures that were undertaken.  It is my understanding
10     that that has resulted in very little descriptive
11     video.
12  3848                 I don't have access to it on a
13     regular basis, not because I wouldn't use it, but
14     because I don't know where it is, when it is.  I know
15     there have been some programs like the
16     "Ira Arrow" (ph.) program on the CBC that have been put
17     on as tests, but what I am talking about is more not
18     tests but part of the common garden everyday fare that
19     every station in the country might make some
20     descriptive video available.
21  3849                 It doesn't always have to be the
22     special production; it can be a simple, as I told you,
23     of saying telephone numbers, of giving sports scores
24     and working it into the regular programming.
25  3850                 Two quick examples, if I might.


 1  3851                 If you think of the origin of the
 2     term "colour commentator", it was at a time when radio
 3     stations were the primary coverer of events, and people
 4     like Max Ferguson would have their colour commentators
 5     to tell you about what the crowd was doing, what the
 6     weather was like and all of these things which sighted
 7     people needed and wanted, and so did blind people, to
 8     understand the radio broadcast because sighted people
 9     didn't have a television screen to convey that, so we
10     had colour commentators.
11  3852                 Now the situation is reversed, and I
12     don't understand, personally, as an individual, why it
13     is such an uproar now and such a problem for the
14     industry to provide descriptive video for blind people
15     when the radio industry did it for decades for sighted
16     people because they were part of the audience -- and we
17     are part of the audience.  That's the first point that
18     I would make to you.
19  3853                 The second point that I would make to
20     you is that we rose this issue, some of us, with the
21     CBC and CBC Newsworld on several occasions.  We were
22     told that, you know, we couldn't take the time to read
23     sports scores or temperatures or some of the stuff that
24     scrolled across the screen because it takes too long. 
25     So we said, "Well, yes, but you are playing music." 


 1     They said, "Oh, the audience needs that music in order
 2     to have the right ambience to watch Newsworld."  I am
 3     afraid I don't know anybody and nobody has ever come
 4     forward to me and said, "I watch Newsworld for the
 5     music."  "I watch The Weather Channel for the music." 
 6     I don't think so.  So that's my point.
 7  3854                 There is time.  There is a lot of
 8     descriptive video that can be done in existing program,
 9     and then there is probably the descriptive video that
10     you are referring to, and that is where a whole program
11     is described.  And it is helpful and it is beneficial,
12     particularly to totally blind persons and partially
13     sighted persons, who miss a lot of the action and rely
14     on sound.
15  3855                 So the short answer to your question
16     is, descriptive video is not a reality in my TV
17     experience at the moment.
18  3856                 COMMISSIONER WILSON:  I am glad that
19     you made the distinction for me between descriptive
20     video as it pertains to full productions and
21     descriptive video as it pertains to weather or news or
22     really what most people would consider the most basic
23     of information and really critical to their lives every
24     day.
25  3857                 Just by way of an anecdote of my own,


 1     I used to run a channel that people watched for the
 2     music; it was at that time known as the Parliamentary
 3     Channel.  It wasn't on the air very much, so they did
 4     play music all the time.  We actually got into a lot
 5     of -- well, we got a lot of complaints when we took the 
 6     music off.
 7                                                        1645
 8  3858                 But that was my line.  You don't
 9     watch this channel to listen to music.  It's a TV
10     channel.  It's not radio.
11  3859                 I am aware that the National
12     Broadcast Rating Service is engaged in discussions with
13     broadcasters on the whole issue of described video.  Do
14     you ever participate in any of those discussions?
15  3860                 MR. STARK:  No.  I haven't been asked
16     to.  We did participate in some discussions with the
17     cable companies with respect to getting some of the
18     access to some of their services line channel lineups
19     and so forth.
20  3861                 In general the feeling, and I do know
21     some about it because there is some information shared. 
22     Thanks to the Internet, there's lots of lists now where
23     blind people from Victoria and Halifax can chat
24     together when we want to.  There is some programming
25     over that service as well.


 1  3862                 It's my understanding, and this is my
 2     only third party off the central track understanding,
 3     that it is really a perception that the industry feels
 4     that it's too much of a financial burden, probably akin
 5     to the arguments that are used about closed captioning.
 6  3863                 Frankly, to give Bell Canada a kudo
 7     here, when they talked about the Bell Radio Relay
 8     Service and its expense, they added 13 cents to
 9     everybody's bill and paid for it.  I have no problem
10     with sharing that cost across the whole system.  I
11     think it's a societal cost to that extent and it may
12     very well be very expensive in some respects, but WGBH
13     in Boston has produced a lot of movies with descriptive
14     video available on them and with the SAP service on
15     channels, you can provide that without disturbing the
16     ambience for people who don't want it.
17  3864                 I think that when you come to digital
18     television, which I also heard and I did enjoy the
19     presentation this afternoon because it gave me more to
20     talk about, not that I don't have enough to talk about
21     as it is, but it gave me more to talk about.
22  3865                 The issue is with digital television
23     you are going to be, as I understand it and from
24     presentations I heard in Los Angeles this spring, you
25     are going to be able to broadcast a movie with an


 1     English language track and a French language sound
 2     track and half a dozen other language sound tracks.
 3  3866                 The potential for diversity of
 4     mediums with digital programming and digital CDs, and
 5     you know better than I do whether the whole potential
 6     for that diversity will come across the cable or
 7     television or both, but certainly with a little bit of
 8     room for descriptive video that I can use and closed
 9     captioning that the deaf can use and not interfering
10     with the enjoyment of those who don't need it is quite
11     within our technology today at costs which are
12     insignificant when you talk about $10 million profits.
13  3867                 COMMISSIONER WILSON:  Actually, I am
14     glad that you raised the issue of costs because the CAB
15     in its comments on Wednesday indicated that the cost of
16     producing described videos between 500 and 1,000 times
17     as expensive as closed captioning.  Do you have any
18     information to confirm that or disabuse us of that
19     notion?
20  3868                 MR. STARK:  I guess I have to go back
21     to a basic point.  I don't have any facts and figures
22     because really I am here as a consumer who wants
23     access.  If you ask me, I don't care about the cost.  I
24     want the access.  I pay for the products, as I said
25     before.


 1  3869                 In trying to respond faithfully to
 2     your question, I think that the first thing you have to
 3     think about is that approximately 20 per cent of the
 4     Canadian audience is disabled in one form or another. 
 5     It's not the disability that causes the problem, it's
 6     the handicapping effects of the system.
 7  3870                 COMMISSIONER WILSON:  Are visually
 8     disabled?
 9  3871                 MR. STARK:  No.  They may be
10     cognitively disabled, they may have hearing
11     disabilities.
12  3872                 COMMISSIONER WILSON:  Okay.
13  3873                 MR. STARK:  They may have visual
14     disabilities.  The point is that that whole market is
15     at least 18 to 20 per cent of the audience the
16     advertisers are trying to reach, the audience that the
17     television broadcaster wants.  Finding ways to meet
18     those needs are important.  I don't think they are cost
19     prohibitive when you look at it in that type of scale.
20  3874                 When you look at it in the scale of
21     everybody having to do it, costs will come down.  Just
22     remember what it cost years ago to provide some of the
23     things that are cheap today.
24  3875                 The other thing people sometimes say
25     is well, you know, who would really use it?  Well, I


 1     think a lot of people other than blind people from time
 2     to time might use descriptive video.  I have to give
 3     you two examples if I might.  I am purposely dodging
 4     your question because I'm not an economist.
 5  3876                 COMMISSIONER WILSON:  That's okay.
 6  3877                 MR. STARK:  From my perspective, it's
 7     not the cost issue.  If you tell them they have to do
 8     it, they will make sure it doesn't cost five times as
 9     much.  They will make sure it costs the same as
10     anything else.
11  3878                 I made once a suggestion to Rogers,
12     and I am reluctant to make suggestion because when you
13     make suggestions, everybody says they are wrong.  I use
14     on my machines, and I have one right here, I use voice.
15     --- Demonstration / Démonstration
16  3879                 Now, you probably understood most of
17     that without even any training in using voice.  Some of
18     this material could be used with synthetic voice.  The
19     action back was "Well, the broadcast quality wouldn't
20     be sufficient".
21  3880                 I make my living through my ears. 
22     It's good enough to earn a living and pay taxes.  My
23     point is that while you look at descriptive video as
24     costing much more, the other question I would ask you
25     is what do they say about producing material in both


 1     official languages?  What's the difference between
 2     descriptive video and two or three Inuktituk or
 3     whatever the Arctic language you may have to use in the
 4     north or what is the difference meeting that need and a
 5     language need or meeting that need a descriptive and a
 6     closed captioning need.
 7  3881                 The cost is so great because it isn't
 8     in widespread use.  I would suggest the Commission ask
 9     people like the public broadcasters in the States that
10     produce some descriptive video.  Find out from them.  I
11     can't answer that question, but from my point of view
12     it's not really as an important question.
13  3882                 If it costs so much, do one or two. 
14     Start gradually.  Work it into the system.  I can say
15     to you now that it isn't and it isn't a part of my
16     life.
17  3883                 COMMISSIONER WILSON:  Is there any
18     programming at all in Canada that has described video?
19  3884                 MR. STARK:  There are movies we can
20     borrow and there are movies we can buy with descriptive
21     video.  There probably are.  I think there are some
22     movies on the family channel, but it's not the kind of
23     thing I watch.  I'm not really your expert on that
24     whole area.
25  3885                 From time to time, as I mentioned,


 1     there is a special on the CBC, but on a day to day
 2     basis there are very few, and I am not aware of any
 3     programs that I could go home tonight and watch
 4     descriptive video on.  I'm not aware of most of the
 5     programs that are on television tonight.  I surf. 
 6     That's the only way I find out what's on.
 7  3886                 COMMISSIONER WILSON:  I just wanted
 8     to comment on something you said.  You are not an
 9     economist and you can't really answer my question.  You
10     are just a consumer, but "just a consumer" is a pretty
11     important person to be.
12  3887                 MR. STARK:  Thank you.
13  3888                 COMMISSIONER WILSON:  In fact, you
14     are the very person that the CAB and many other
15     broadcasters would like us to focus on in terms of
16     building audience around programming.
17  3889                 MR. STARK:  I'm happy to build an
18     audience.
19  3890                 COMMISSIONER WILSON:  In an ideal
20     world we would have described video for all
21     programming, but as I am sure the captioning experience
22     has shown you, it does seem to take a long time to move
23     things forward.
24  3891                 MR. STARK:  Yes.
25  3892                 COMMISSIONER WILSON:  In the absence


 1     of even a basic level of described video, what category
 2     or programming would you suggest be the first focus of
 3     this initiative if we are going to take it step by
 4     step.
 5  3893                 MR. STARK:  Sure.  I mean, you know,
 6     I'm happy to hear that.  You said we are going to take
 7     it step by step.
 8  3894                 COMMISSIONER WILSON:  I said if we
 9     are.
10  3895                 MR. STARK:  I didn't hear the "if".
11  3896                 COMMISSIONER WILSON:  I can't decide
12     that all by myself.
13  3897                 MR. STARK:  I understand.
14  3898                 COMMISSIONER WILSON:  I am just one
15     person.
16  3899                 MR. STARK:  My issue is that is just
17     one element of access to television service for blind
18     people.  It's an important element.  What I have tried
19     to say in my presentation to you is that there's a lot
20     you can do with descriptive video before you start
21     talking about the production.
22  3900                 If you had to tell me what's the
23     number one thing I would like, it's a way for me
24     individually to know what's on television every night. 
25     It occupies one of my basic cable channels.  I have got


 1     no choice but to pay for it, but it's totally useless
 2     to me.  Totally.  Even the ads will not mention the
 3     telephone numbers most of the time.  You can't even
 4     watch it for the ads.
 5  3901                 COMMISSIONER WILSON:  There are times
 6     when those listings are useless to me too because I
 7     can't see very well that far across the room.
 8  3902                 MR. STARK:  Maybe there should be
 9     descriptive video on ads too.
10  3903                 COMMISSIONER WILSON:  And bigger.
11  3904                 MR. STARK:  And bigger.  Oh, well,
12     yes, sure.  You see, that was part of what I was trying
13     to say to you.
14  3905                 My mother was the other example I was
15     going to use earlier about who can benefit from some of
16     this stuff.  My mother in her eighties had lived all of
17     her life as a sighted person.  She wouldn't use talking
18     books like I use.  She wouldn't do those things because
19     it would mean she was identifying herself as a blind
20     person.  As long as her book print kept growing, kept
21     getting bigger, she was happy because she could do it
22     the old way she had always done it.
23  3906                 That was my point about the 20 per
24     cent market.  There's a lot of people out there,
25     particularly seniors, who would use it who may not want


 1     to identify themselves as a person with a disability
 2     and, secondly, may not want to tell you they use it.
 3  3907                 If you look at ramps, wheelchair
 4     ramps these days, the people that use wheelchair ramps,
 5     the least amount of people that use them are people who
 6     use wheelchairs.  People who have baby strollers,
 7     people that make deliveries, people that have trouble
 8     walking up stairs, all those kings of things.  I will
 9     bet you in 30 years --
10  3908                 COMMISSIONER WILSON:  People with
11     rolling briefcases.
12  3909                 MR. STARK:  Sure, sure.  Suitcases. 
13     In 30 years you are probably going to find that some
14     people may choose descriptive video as a pleasant way. 
15     What's the difference between that and the old radio
16     programs?
17  3910                 COMMISSIONER WILSON:  Yes.
18  3911                 MR. STARK:  Sighted people grew up
19     with them until television.
20  3912                 COMMISSIONER WILSON:  What would be
21     your next two categories after the TV listings?  News
22     and weather or --
23  3913                 MR. STARK:  Well, TV listings, news,
24     sports, some of the stock market stuff, some of the
25     weather, all those public affairs, and also some of the


 1     material that is presented for the sports.  That would
 2     be helpful too.  Just those basic information things.
 3  3914                 That doesn't say that I wouldn't like
 4     to be able to sit down once a week on each of the basic
 5     television services and watch one movie with
 6     descriptive video.  Is that too much to ask?  You said
 7     you wanted to go step by step.  One movie or one
 8     program, you know.  I would know where it is and it
 9     would be promoted and advertised and the television
10     service would advertise it on their television station,
11     you know, "Watch the sinking of the Titanic on Sunday
12     evening" and if you have got SAP, you can hear the
13     descriptive video of it.
14  3915                 It's available now.  I can buy it. 
15     If I can afford to buy it -- WGBH has done a lot of
16     movies in the States.  I don't know what the revenue
17     kind of costs are incurred when a television station
18     buys the descriptive video version from the people in
19     the States, but you know, there are hundreds and
20     hundreds of movies available now.
21  3916                 In fact, when I talked to you about
22     Los Angeles, and unfortunately I couldn't stay for it,
23     the Titanic was being shown on Sunday afternoon at a
24     local theatre.  People had the choice of listening to
25     it in descriptive video or regular sound track.


 1  3917                 COMMISSIONER WILSON:  We will make
 2     sure that -- the National Broadcast Rating Service is
 3     appearing before us.  We will make sure to ask them
 4     some of these questions.
 5  3918                 It occurred to me as I was reading
 6     through your submission, and I have had some experience
 7     in the broadcasting industry and in telecommunications
 8     in dealing with some of the issues surrounding the deaf
 9     and hard of hearing.
10  3919                 One of the reasons that they have
11     been very successful in encouraging -- in fact they
12     might say prodding -- the various industries into doing
13     captioning and providing them with services is that
14     they have a number of extremely well organized lobby
15     groups.  Are there similar groups for people who are
16     blind or visually impaired?
17  3920                 MR. STARK:  I mentioned to you
18     earlier the high unemployment rate of blind people
19     which some will argue is a bit less than that, but it
20     certainly is significant.  Also, many people who are
21     blind are blinded later in life and are learning a lot
22     of things at once and the resources are scarce.
23  3921                 Do you choose between spending your
24     money on advocacy or spend your money on teaching
25     people Braille.  Those are the kinds of hard realities


 1     that blind people have to cope with.
 2  3922                 No, there are not the same level of
 3     advocacy groups among people who are blind.  There are
 4     a number of blind people who do speak out and there are
 5     a number of organizations who can speak from time to
 6     time, both organizations of the blind and both
 7     organizations cross disability like the Council of
 8     Canadians with Disabilities.
 9  3923                 There are lots of organizations, but
10     they are nowhere sophisticated enough to bear the costs
11     of a lot of these hearings.  That was my point with the
12     Sir Arthur Pearson Association.  If you want that kind
13     of level of intervention, you are going to have to look
14     at intervener funding because we have enough difficulty
15     just maintaining a quality of life and earning a living
16     and looking after eye-dogs and going to the grocery
17     store and shopping where not a price in the store is
18     readable and doing all these other things that putting
19     that kind of burden on us, it is a burden for us,
20     whereas --
21  3924                 COMMISSIONER WILSON:  I'm not
22     suggesting that that's the way to go, but I just wanted
23     your views on that.
24  3925                 MR. STARK:  I wanted to try to give
25     you an academic answer.  I am leading to one point. 


 1     There's a book by Gail Fawcett called "Living in Canada
 2     with a Disability in Economic Profile".  It's published
 3     by Human Resource Development Canada.  It talks about
 4     disability and it talks about the severity of
 5     disability and the handicapping effect of society.
 6  3926                 I think it's fair to say that the
 7     information deprivation that blind people deal with on
 8     a daily basis is one of the reasons why there aren't no
 9     strong lobby groups.  However, with the technology of
10     the computer and access to information that we are
11     getting, we are coming.  We will have in the next
12     millennium strong advocacy groups that can do this kind
13     of lobbying.
14  3927                 I guess most blind people look
15     towards impartial regulatory bodies like yourself to
16     ensure that the public interest is protected by
17     ensuring that when people talk about viewers, they
18     really mean audiences.
19  3928                 I guess I have to leave that one with
20     you by not in a sense saying that there are groups,
21     strong lobby groups.  There are some groups, but
22     resources are scarce.  You know, frankly, our view is
23     that -- my view anyway is that this is a role that is
24     best performed by the regulator.
25  3929                 The final comment I would make on


 1     that subject is I think as we say in our brief, the
 2     voluntary approach has been in existence as far as
 3     services for blind people for quite some time.  It has
 4     not produced significant customer service for us from
 5     the television system.  I think some minimum standard
 6     and leadership from the Commission would improve our
 7     quality of life.
 8  3930                 You can't deregulate something that
 9     ain't regulated.  I'm not aware of, maybe you are, but
10     I'm not aware of any Commission standard or statement
11     on a basic level of access for all people with
12     disabilities.  I am aware of some of the good policy
13     papers put out on the question of access for people who
14     are profoundly deaf.
15  3931                 I stand to be pointed in the
16     direction of that material because I would like to read
17     it.  The answer is I don't think this is something that
18     should be put on the shoulders of blind people to lobby
19     and to, you know -- frankly, and let me finally answer.
20  3932                 Given all of the things, it's easier
21     for me to file a complaint with the Canadian Human
22     Rights Commission than it is to start a lobby group and
23     sit through more meetings.  You know how hard it is to
24     sit through a meeting.  I don't want more meetings.  I
25     want musical decisions that allow me to sit home and


 1     enjoy my television.
 2  3933                 COMMISSIONER WILSON:  I want to thank
 3     you for answering my questions.  My colleagues may have
 4     some, but you have certainly helped expand my
 5     understanding of this. I want to thank you again for
 6     being with us.
 7  3934                 MR. STARK:  Thank you.
 8  3935                 THE CHAIRPERSON:  Mr. Stark,
 9     Commissioner Cardozo has some questions for you now.
10  3936                 MR. STARK:  Thank you.
11  3937                 COMMISSIONER CARDOZO:  Thanks, Madam
12     Chair.
13  3938                 Mr. Stark, first just a rather basic
14     question.  If you can give us some more information on
15     descriptive video.  You talked about providing I
16     suppose a voice-over or sound for things that are
17     written on the screen such as temperatures, perhaps
18     other types of information that appears in a written
19     alphanumeric form.
20  3939                 Would it also provide a sound track
21     for movies and stuff where it will describe the scenery
22     that you are not seeing?
23  3940                 MR. STARK:  You are quite correct. 
24     Your assumption is accurate.  Somebody -- you hear
25     "bang, bang", fall down.  The descriptive video would


 1     say the gentleman fell over the garbage can.
 2  3941                 COMMISSIONER CARDOZO:  Okay.
 3  3942                 MR. STARK:  The next thing you would
 4     hear me swearing about that and you both would hear
 5     that because it's easy to understand.  You understand
 6     what I mean.
 7                                                        1710
 8  3943                 The point is it gives me your visual
 9     context, in the same way as the colour commentators did
10     on the radio years ago.  That is basic descriptive
11     video, you know, the carriage is coming down the street
12     and it is pulled by four white horses and the carriage
13     is black and there is a gentlemen in a very well-
14     pressed uniform on the back, standing on the back
15     runningboard of the carriage.  Those things we all
16     miss.
17  3944                 I used to use an example -- and I
18     still can and maybe even coming in here today.  I came
19     in here today, your staff greeted me and said who they
20     were.  That's helpful because I don't know who is in
21     the room.  I don't know who is here and it was very
22     helpful to have you tell me who was at the front table
23     as Commissioners because I don't know.  That's a form
24     of descriptive video, if you will, or starting a
25     meeting by saying, "Let's go around the table and say


 1     who's here," even though we know each other, so I know
 2     who's here.  It's inclusive.
 3  3945                 So, when you talk about television,
 4     it is the action that is described, whereas in the case
 5     of people who use closed captioning it is the audio
 6     that is described.
 7  3946                 COMMISSIONER CARDOZO:  So, of the
 8     things you see on TV from what you are describing is
 9     the commentary on a hockey game perhaps the closest
10     thing to descriptive video, the hockey commentary?
11  3947                 MR. STARK:  The hockey game, the
12     baseball game.  The problem with a lot of that though
13     is today the announcers, as my wife is frequently
14     bemoaning, will talk at great length about all kinds of
15     things, including where they went to dinner while the
16     pitches are thrown and she misses.  She is quite a
17     sports fan and she likes the Montreal Expos and she
18     likes Formula One and she's an avid sports fan.
19  3948                 She sometimes will even prefer the
20     radio because the description is better, but you can
21     even see colour.  People ask us why we go to the
22     baseball games in Montreal.  Well, it's to hear that
23     ambience, the crack of the bat and people singing "val
24     de ri," "val de ra" while the concrete shakes and the
25     same time you have got an earphone in your ear and you


 1     are listening to Dave Van Horne upstairs describing the
 2     game.
 3  3949                 The same is true of what we would
 4     look from television, is to experience visual ambience
 5     because even though we don't see well or we may just
 6     see colours or we may just see movement, we still want
 7     that visual reality.
 8  3950                 I mean I don't want to come here
 9     today wearing a pink suit coat and a purple tie that
10     doesn't go together.  It's that basic sort of thing.
11  3951                 So, we view information as part of
12     our quality of life.
13  3952                 COMMISSIONER CARDOZO:  It's a good
14     think you can't see my colleague, Commissioner
15     McKendry's clothes, because they are usually not that
16     well co-ordinated.  That's not on the record I hope.
17  3953                 MR. STARK:  They look fine to me.
18  3954                 COMMISSIONER WILSON:  You can tell
19     it's Friday afternoon at five o'clock.
20  3955                 COMMISSIONER CARDOZO:  So I guess
21     Foster Hewitt was the best devious guy around.
22  3956                 MR. STARK:  Yes.
23  3957                 COMMISSIONER CARDOZO:  I should
24     mention a couple of things.  You have talked about the
25     obligations we have, legal and otherwise.  My sense is


 1     that the Commission has a history of dealing with some
 2     of the issues concerning which we could sort of put
 3     into a grab bag called disability issues perhaps, but
 4     in terms of television I think we have gone quite a
 5     good distance in things like closed captioning.
 6  3958                 We have done a lot on the telephone
 7     side of things and there seems to be quite a bit of
 8     action there over the years and part of it has to do
 9     with intervenor funding because under the
10     Telecommunications Act which governs our telephone
11     stuff intervenors can claim costs against other --
12     which are then awarded from other intervenors, namely
13     the corporations.
14  3959                 We don't have that ability on the
15     broadcasting side, which is why we are not able to
16     provide intervenor funding in broadcasting and, who
17     knows, that may have something to do with why we have
18     done more on the telephone side.
19  3960                 But just on this hearing, I want to
20     let you know that we have heard from the Council of
21     Canadians with disabilities when we had our town hall
22     meetings.  One of the meetings was in Winnipeg and the
23     Council is based there and a couple of the members were
24     there.
25  3961                 The NBRS is appearing.  I seem to


 1     think and I'm pretty sure we have had a brief from the
 2     Sir Arthur Pearson group and there are a few other
 3     individuals who have written too.  So, we certainly
 4     hear what you are saying and I just wanted to show you
 5     that you are not saying it in a vacuum, that there are
 6     various others who made these points to us too.
 7  3962                 MR. STARK:  That's why I wanted to
 8     come today because I know -- I think you are concerned
 9     and interested and my bottom line message is I think
10     that the accountability should be shifted from the
11     consumer to the service provider and that's really --
12     if you had to sum everything we have said up, it's that
13     as consumers we can't be held accountable for why we
14     need descriptive video.  There is no argument.  We need
15     it.  Whether we can have it all at once or step-by-step
16     that's fine.  That's the reality check.
17  3963                 COMMISSIONER CARDOZO:  Thank you very
18     much.
19  3964                 MR. STARK:  Thank you, sir, for your
20     questions.
21  3965                 COMMISSIONER CARDOZO:  Thank you,
22     Madam Chair.
23  3966                 THE CHAIRPERSON:  Thank you very
24     much, Mr. Stark.  We hope you have a nice weekend.
25  3967                 MR. STARK:  And the same to you all.


 1  3968                 THE CHAIRPERSON:  I don't think your
 2     friend found us very interesting.
 3  3969                 MR. STARK:  No, no.  He enjoys
 4     carpets.  I once had a boss who said to me that after
 5     the meeting she always judged whether or not the
 6     meeting had gone well by whether or not the dog was
 7     happy.  If he wags his tail on the way out you will
 8     know we had a good meeting.
 9  3970                 THE CHAIRPERSON:  He is a beautiful
10     dog.
11  3971                 MR. STARK:  Thank you.  Thanks for
12     your time.
13  3972                 THE CHAIRPERSON:  Madam Secretary,
14     would you call the next participant, please.
15  3973                 MS BÉNARD:  Thank you, Madam Chair.
16  3974                 We will now have a joint presentation
17     by the Association of Canadian Advertisers, the
18     Canadian Media Director's Council and the Institute of
19     Canadian Advertising.
20  3975                 THE CHAIRPERSON:  Good afternoon,
21     ladies and gentlemen.  Proceed when you are ready.
23  3976                 MR. LUND:  Good afternoon, Madam
24     Chair, Commissioners.
25  3977                 Thank you very much for the


 1     opportunity to appear at this important public hearing. 
 2     We wish you well, as many people have done before us in
 3     your deliberations and are very pleased that we are
 4     able to contribute today.
 5  3978                 I am Ron Lund.  I am the President of
 6     the Association of Canadian Advertisers and let me
 7     introduce you to the delegation.
 8  3979                 To my left here I have Janet
 9     Callaghan.  Janet is the Chair of the Canadian Media
10     Director's Council.  She is also the Vice-President,
11     Corporate Media Director, The Media Company.
12  3980                 Judy Davey on my right here is the
13     ACA's Broadcast Committee Chair and Judy is also in
14     another life the Director of Media and Sports
15     Properties for Molson Brewery, so we have an advertiser
16     her.
17  3981                 To my far left we have David
18     Harrison.  David is a Director with the Institute of
19     Canadian Advertising and he is also President and CEO
20     of Harrison, Young, Pesonen & Newell.
21  3982                 Lastly, handling the slides for a
22     little while is Bob Reaume.  Bob Reaume is a media
23     consultant that works with us at the Association.
24  3983                 MS CALLAGHAN:  Our three
25     organizations represent the advertising buying side of


 1     the business.  We are advertising agencies and their
 2     clients.
 3  3984                 Collectively, we are responsible for
 4     the placement of at least 85 per cent of the $2 billion
 5     that is spent on television annually and, as such, we
 6     are the largest financial stakeholder in this vibrant
 7     business.
 8  3985                 Our Associations are appearing
 9     together because our interests and our positions are
10     compatible.
11  3986                 These positions are that we support
12     universal choice and access.
13  3987                 We recommend that non-simultaneous
14     substitution and advanced program substitution be
15     examined further.
16  3988                 We believe that any changes to the
17     station ownership limitation policy should be made with
18     caution.
19  3989                 And we would like you to consider the
20     benefits of an adequate electronic television audience
21     measurement system.
22  3990                 Finally, we wish to register our
23     strenuous objection to deregulation of commercial
24     minutes per hour.
25  3991                 Our first point on universal choice


 1     and access is to reiterate that advertisers are always
 2     seeking new services that reach their target markets. 
 3     As such, we have been strong supporters of each new
 4     specialty tier.
 5  3992                 Unfortunately, Canadian audiences are
 6     being lost to foreign services at an alarming rate.  In
 7     just two years the U.S. specialty channel share of
 8     English hours tuned has gone from 3.3 per cent to 12
 9     per cent.  These are viewers that are inaccessible to
10     Canadian advertisers.
11  3993                 Accordingly, we would like you to
12     examine opportunities to regain these lost audiences.
13  3994                 Our second point is to encourage
14     further examination of non-simultaneous and advanced
15     program substitution.
16  3995                 We endorse simultaneous program
17     substitution and recommend that this protection of
18     program rights should in fact be extended to include
19     specialty channels.
20  3996                 We acknowledge the significant
21     financial opportunity that non-simultaneous
22     substitution represents to broadcasters in terms of
23     repatriating advertising dollars, but there are key
24     implications that we believe must be examined before
25     proceeding further.


 1  3997                 These include the spectre of
 2     increasing advertising rates, either through the
 3     further limiting of competition or the splitting of
 4     audience ratings via multiple runs of popular programs.
 5  3998                 Other implications include
 6     measurement.  We need to know if a split signal can be
 7     measured.
 8  3999                 And lastly, whether Canadian
 9     programming will be marginalized by this move.
10  4000                 Again, we believe more dialogue on
11     this matter before moving forward.
12  4001                 Our third position concerns the
13     emergence of the media behemoth, both globally and in
14     Canada, whereby the television industry is dominated by
15     fewer and more powerful media conglomerates.
16  4002                 We understand the economies of scale
17     and the need for our broadcasters to compete in a
18     global marketplace, but we do believe that this can be
19     achieved without creating monopolies or duopolies in
20     individual Canadian markets.
21  4003                 Competition is the adrenaline that
22     fuels advertising investment, but continued competition
23     in broadcasting is as important a business imperative
24     as critical mass.
25  4004                 Our fourth point concerns the


 1     measurability of performance in a fragmented
 2     environment.  We in our industry face huge increases in
 3     TV business complexity.
 4  4005                 In Toronto alone, there are 30,000
 5     spots available for purchase weekly.  For us to manage
 6     this system, we must be able to measure it well.
 7  4006                 Indeed, the pressure we have from our
 8     client base, comprised of both multinationals and
 9     Canadian companies, is to adhere to global advertising
10     effectiveness standards.
11  4007                 We in Canada must deploy best
12     practices in our TV audience measurement system to
13     benefit from increased investment.
14  4008                 The CRTC and its constituency could
15     benefit immensely, too, by being provided a more
16     accurate picture of the viewing habits of Canadians.
17  4009                 We recommend that consideration be
18     given by the CRTC to help fund a superior measurement
19     system in Canada.
20  4010                 MS DAVEY:  Our fifth and very
21     important point is we would like a reaffirmation of the
22     12-minute limit regulation.  We strongly believe that
23     clutter diminishes the value of our commercials.
24  4011                 In 1990, the Television Bureau of
25     Canada set a maximum of 30 interruptions per hour to,


 1     as they said at the time, "preserve the integrity of
 2     the television medium of the future."  The Canadian
 3     Association of Broadcasters endorsed this principle.
 4  4012                 While a 12-minute limit is officially
 5     in place in Canada, this limit is frequently exceeded. 
 6     The result is considerable non-programming clutter.  As
 7     you can see, the effects of expanding the amount of
 8     non-programming time was dramatic under U.S.
 9     deregulation, where non-program clutter levels reach as
10     high as 20 minutes per hour.
11  4013                 To gain a better picture of the
12     Canadian experience, the Association of Canadian
13     Advertisers conducted studies in 1993 and 1998 to
14     measure the degree of clutter.  Nielsen Media Research
15     provided the data for both studies.
16  4014                 Each study measured five major
17     markets and close to 7,000 hours of programming across
18     all day parts.  And in 1998 we included the addition of
19     three specialty channels.
20  4015                 The studies reveal that non-
21     programming clutter has increased dramatically in that
22     five-year period from 1993 to 1998.
23  4016                 The key findings showed that dramatic
24     increases in both minutes and messages per hour.  For
25     example, in 1993, 49 per cent of all hours had greater


 1     than 12 minutes of non-programming content.  And in
 2     1998 this grew to 77 per cent.  That's an increase of
 3     57 per cent in just five years.
 4  4017                 The average minutes per hour over 12
 5     grew from 13.42 minutes in 1993 to 14.52 minutes in
 6     1998.
 7  4018                 Also, in 1993, 47 per cent of all
 8     hours measured contained over 30 messages.  In 1998
 9     this climbed to 58 per cent.
10  4019                 At the same time, the average number
11     of messages per hour over 30 grew from 35 in 1993 to 37
12     in 1998.  Now, you need to remember that these are the
13     averages.
14  4020                 When you look at some worst case
15     scenarios, back in 1993 -- in the 1993 study, the worst
16     incident of clutter occurred in Montreal French.  From
17     11:00 p.m. to midnight, where there were actually 46
18     messages, totalling 28 minutes and 30 seconds of non-
19     programming content.
20  4021                 If you go to the more recent study,
21     the 1998 study, a couple of examples in one Vancouver
22     incident on August 21st, 35 individual messages were
23     shown between 12:30 p.m. and 1:00 p.m.  This would be
24     the equivalent of 70 messages per hour.
25  4022                 Looking at another incident in


 1     Calgary on June 23rd, between 2:30 and 3:00 in the
 2     afternoon, 13.58 minutes of non-programming content
 3     occurred, or the equivalent of 27 minutes per hour.
 4  4023                 In summary, we can see that the 12-
 5     minute limit is regularly exceeded and it continues to
 6     grow at an alarming rate.
 7  4024                 Staying with the 1998 study, let's
 8     compare the conventional and specialty channels.  What
 9     we can see here is that we find that 80 per cent of the
10     hours on conventional stations carried over 12 minutes
11     of non-programming time, while for the specialty
12     channels 51 per cent of the hours carried more than 12
13     minutes.
14  4025                 Clearly, the conventional stations
15     are at severe clutter levels.
16  4026                 Looking across the markets that we
17     surveyed, you can see that clutter is evident in all of
18     the markets and in this case here Montreal English and
19     Calgary were the worst offenders.
20  4027                 To conclude, the present situation
21     obscures the value equation.  We don't know what
22     environment we are buying.  Is it 12 minutes, 16
23     minutes, 24 minutes or even more minutes?  We don't
24     know.
25  4028                 Broadcasters are pressing to include


 1     even more minutes and more messages per hour.
 2  4029                 We buy an environment and clutter
 3     devalues that environment.  It reduces the
 4     effectiveness of our advertising messages.
 5  4030                 You watch TV.  You know how many
 6     messages are on there.  You see them.  We believe what
 7     is happening.  We have more than enough messages that
 8     are on there and to increase the number of commercials
 9     for non-programming time isn't fair to the viewer or to
10     the advertising.
11  4031                 We don't need more commercials on the
12     outlets we have.  We need more outlets with fewer
13     commercials.
14  4032                 MR. LUND:  Thank you, Janet and Judy.
15  4033                 As major stakeholders of the Canadian
16     broadcast industry, advertisers want access to all
17     Canadian audiences to most effectively and efficiently
18     target consumers through the ever-growing viewer
19     choices that they have.
20  4034                 I am sorry about that -- we want to
21     ensure a competitive environment, whereby pricing and
22     product will fairly serve the advertiser.
23  4035                 We also believe we must have the best
24     measurement system.  We need the ability, more than
25     ever, to demonstrate and be accountable for the


 1     significant amount of dollars that are being spent in
 2     this ever-fragmenting marketplace.
 3  4036                 But above all, we believe that we
 4     must have some respect for the Canadian television
 5     viewer.  We must do this by providing a strong
 6     programming environment that is not overly cluttered
 7     with commercial messages.
 8  4037                 So, once again, we thank you for
 9     allowing us to present our perspective for your
10     consideration and we wish you again well in your
11     deliberations.  We would be pleased to answer any
12     questions you may have now.
13  4038                 THE CHAIRPERSON:  Thank you.
14  4039                 Commissioner McKendry.
15  4040                 COMMISSIONER McKENDRY:  Thank you.
16  4041                 Good afternoon.
17  4042                 MR. LUND:  I like your suit, by the
18     way.
19  4043                 COMMISSIONER McKENDRY:  Thanks.  Tell
20     Commissioner Cardozo that.
21  4044                 There were two written submissions
22     provided to us earlier in this proceeding, so I am
23     going to ask some questions that are particular to each
24     written submission and some I suppose that are communal
25     questions, but what I will probably do is send the


 1     questions over to you and you can sort them out amongst
 2     yourselves how you would like to respond to the
 3     questions or who would like to respond.
 4                                                        1725
 5  4045                 I would like to start off by
 6     challenging one of your statements and I don't do this
 7     for the sake of just challenging you.  It's important
 8     that we understand how the broadcasting system work
 9     from an economic point of view.
10  4046                 You make the claim or the Association
11     of Canadian Advertisers makes the claim that, and I
12     quote, "advertising is the primary resource sustaining
13     the Canadian broadcasting system".  It struck me that
14     there are three resources that sustain the Canadian
15     broadcasting system: advertising, appropriations from
16     government -- for example, the CBC appropriation -- and
17     subscription fees paid directly by consumers for
18     broadcasting services.  When I added up the
19     subscription fees paid directly by consumers for
20     broadcasting services, I got $2.5 billion and I
21     included in that subscription fees paid for specialty
22     services, for pay TV and subscription fees paid to
23     cable television operators.
24  4047                 So, I guess what I would like to get
25     your reaction to is what I see as a growing force in


 1     the economics of television broadcasting in relation to
 2     advertising is direct consumer payment and through
 3     subscription fees for programming.  Does that emerging
 4     trend, which is seemingly quite a large trend, have any
 5     implications for the role of advertising in the
 6     television broadcasting system?
 7  4048                 MR. REAUME:  It certainly does have
 8     implications for advertisers and in many other media a
 9     similar type of situation exists and advertisers, of
10     course, if you will pardon the slang, just go with the
11     flow.  If that's how consumers want to consume their
12     media, we will adapt our advertising targeting to that
13     method and if we can in this case, we certainly will.
14  4049                 I still think, though, our assertion
15     that advertising is the primary resource supporting the
16     Canadian broadcasting system is true and I think if you
17     look in CBC's submission, they have a chart -- I wish I
18     had it with me, but they have a chart where they have
19     calculated the entire funding, including private
20     investors, the CTCPF fund, of course, Parliament's
21     contribution to the CBC and every other funding source
22     for the television, and air time sales, even in their
23     equation, is still 51 per cent.  So, we really are
24     still the primary funder.
25  4050                 This trend, though, that you suggest


 1     and bring to our attention that consumers seem to be
 2     willing to pay directly to consume their media is a
 3     trend we have noticed and I guess are keeping our eye
 4     on.
 5  4051                 MS CALLAGHAN:  One small point there. 
 6     I believe that that is true in terms of the trend, but
 7     if you remember some years back NBC showed the Olympics
 8     and they had part of it on a user-pay system, which was
 9     a horrible financial disaster.  So, I think it needs
10     proving in terms of really big events that the masses
11     want to see.  It's questionable whether or not they
12     will pay.
13  4052                 MR. HARRISON:  I might also add that
14     I think what you are describing is in many ways
15     analogous to other media.  To this point, I think
16     Canadians and most people in the free world have
17     received their television services for no direct cost,
18     unlike a newspaper, which you pay for, or a magazine
19     which you may subscribe to.  I think you are lumping
20     commercial and non-commercial subscription revenues in
21     that $2.5 billion, so perhaps television is simply
22     becoming more like other media and people are prepared
23     to pay for their editorial, as well as getting
24     advertising support.
25  4053                 COMMISSIONER McKENDRY:  In any event,


 1     I should take it that this growing trend isn't a threat
 2     to advertising revenues as a sustaining force to the
 3     broadcasting industry.
 4  4054                 MS CALLAGHAN:  No.
 5  4055                 MR. HARRISON:  But it is important to
 6     remember, though, for television to be successful, it
 7     must have a great reach available for advertisers.  If
 8     the reach of consumers were to diminish from a
 9     commercial point of view, then the position of
10     television in the equation of which medium would be
11     chosen to advertise in would diminish.
12  4056                 COMMISSIONER McKENDRY:  The Baton CTV
13     submission that we received in this proceeding
14     describes advertisers as CTV's customers and customers
15     typically play a pretty big role in somebody's
16     business.  One of the things I would like to understand
17     is what role advertisers play in Canadian content on
18     television apart from the economic role that we have
19     just discussed.  Is there any influence that
20     advertisers have by virtue of being the customers of
21     the networks on Canadian content that we should be
22     aware of?
23  4057                 MR. LUND:  I think you have heard it
24     several times.  Our interest, as we gave you in our
25     submission, is primarily a commercial one.  Basically,


 1     what we go for is the audience.  I think you have heard
 2     it a couple of times today and it's just really
 3     something to reiterate it.  Our view is as long as the
 4     audience is there, we will purchase and if it's
 5     Canadian content, we feel even better about that, but
 6     that's kind of outside of our purview.
 7  4058                 COMMISSIONER McKENDRY:  You would pay
 8     the same amount for Canadian and a foreign program
 9     under the similar circumstances?
10  4059                 MR. LUND:  Absolutely.  The example
11     that was given, if there are 2 share points that are 6,
12     we don't see the program other than in an environment. 
13     It may be an environment we wouldn't want to be in if
14     it was maybe a violent one for one advertiser or there
15     was another environment that was more closely aligned,
16     but the rating point is what speaks.
17  4060                 COMMISSIONER McKENDRY:  Let me ask
18     you another general question before I get to more
19     specific questions related to your submissions.  One of
20     the things that has been presented to us in this
21     proceeding is data by the Canadian Association of
22     Broadcasters that shows, in spite of significantly
23     increasing expenditure by the broadcasters on Canadian
24     programming over the last few years, Canadian viewing
25     share is flat.  It has seemingly been flat for at least


 1     five years hanging in at 40 per cent.
 2  4061                 One of the focuses of the private
 3     broadcasters in this proceeding is they need to get
 4     more audience.  Now is the time where we have to get
 5     more audience.  It seems to me that you are the people
 6     that are specialists in selling things and selling
 7     services.  Do you have any thoughts on whether or not
 8     Canadian programming can be promoted effectively, as
 9     such, in order to increase audience and attract more
10     viewers?  Will a marketing campaign do it?
11  4062                 MS CALLAGHAN:  A big part of
12     attracting viewers is scheduling and it's my belief
13     that in the past the prime time scheduling -- and
14     that's key day parts -- have not been used to promote
15     the best of Canadian programming.  I think all of us
16     would endorse the fact that there is more money or a
17     higher quality of Canadian content programming now than
18     there has been in the past, but it is important in
19     terms of scheduling against popular U.S. shows.  That's
20     very hard for a Canadian show to compete.
21  4063                 So, from our perspective, I don't
22     know that promoting it would make such a big
23     difference.  It's really scheduling it and making a
24     consistently high quality of Canadian content.
25  4064                 COMMISSIONER McKENDRY:  I guess what


 1     I was thinking of was when the CFL was struggling --
 2     and perhaps it is still struggling to some extent --
 3     they launched an advertising marketing campaign to
 4     promote Canadian football as something that people
 5     should consume.  What I'm thinking of is that kind of
 6     solution.  Is that a solution that applies to TV or
 7     it's more particular to individual programs and when
 8     they are scheduled?
 9  4065                 MR. LUND:  I have already hit it. 
10     It's like "Reach For The Top".  I beat you.
11  4066                 I think programming, frankly, is very
12     similar to any other product or service and that is in
13     this particular case the viewer will be the judge of
14     what they want to watch.  If you promote it more and
15     it's a bad product, it will go down the tubes quicker
16     if it's not a product that's acceptable.  So, as Janet
17     has said, the quality is very much a part of the issue
18     and promoting a product that isn't a good product won't
19     really help.
20  4067                 David?
21  4068                 MR. HARRISON:  I would just observe
22     that it's extraordinarily difficult for Canadian
23     broadcasters or producers to compete against the sort
24     U.S. compact of media propaganda that's available from
25     People Magazine to "Entertainment Tonight" to, you name


 1     it, celebrity horoscopes.  It's incredibly difficult. 
 2     It's as difficult to compete in a marketing sense as it
 3     is just in the production sense.
 4  4069                 MR. REAUME:  Just for the record, we
 5     should probably say that we do all believe, though, in
 6     marketing and advertising.  So, if there was a product
 7     and a show, we probably think we could increase its
 8     audience through some advertising campaign of some
 9     sort, yes.
10  4070                 COMMISSIONER McKENDRY:  Well, that
11     was almost my next question.  You pointed out how
12     difficult it was.  I was going to say, "but possible". 
13     So, it is possible and I just want to come back to the
14     scheduling point.  Quality is essential, I take it, but
15     there needs to be some changes in the scheduling.  Is
16     that what you are saying?
17  4071                 MS CALLAGHAN:  I did say that where a
18     program is scheduled, what we have read -- and if I
19     take this to the U.S. example, when "Seinfeld" goes off
20     the air, what is the next huge dual to put in that
21     slot.  The Thursday night slot has been very important. 
22     So, everybody knows how you program and how you count a
23     program and one of the things is:  Are there positions
24     in the weekly schedule that you can put your Canadian
25     program to build an audience?  That is done, but more


 1     of that needs to be done.  It's obviously an art.
 2  4072                 COMMISSIONER McKENDRY:  I don't know
 3     whether or not we are artists, but in this proceeding
 4     we could narrow the prime time window that broadcasters
 5     must show Canadian programming in.  In and of itself,
 6     is that a solution?
 7  4073                 MS CALLAGHAN:  I think it would help. 
 8     Yes, I think it would help.  What we have brought up in
 9     this discussion here is the whole simulcasting when
10     U.S. programs run.  The slot that a Canadian show must
11     actually begin in and build an audience in and build a
12     following, that takes a lot of nurturing and protecting
13     from a much stronger show.  So, you have got to build
14     your programs and I think Canadian broadcasters have
15     tried to do that, but it's difficult with the amount of
16     signals that are coming in and the strength of many of
17     the U.S. shows.
18  4074                 MS DAVEY:  The only thing I would
19     like to add is again it goes back to a qualitative
20     thing and as long as the quality is there, that's
21     important.  Even if you do narrow the time period, if
22     you don't have the quality, the viewer won't tune in.
23  4075                 COMMISSIONER McKENDRY:  Let me turn
24     to some of the more specific matters that you have
25     raised with us in your submissions.  One of them is


 1     obviously a concern about clutter.  You have provided
 2     us with data about the extent of clutter and so on. 
 3     What I would like to know is do you have any studies or
 4     are there any studies that you are aware of that show
 5     that increased clutter reduces, one, the effectiveness
 6     of advertising and, two, the rates that are available?
 7  4076                 MR. REAUME:  I don't believe we have
 8     any studies that we could file with the Commission on
 9     this, but I do believe that there are some U.S. studies
10     available.  The Association of National Advertisers and
11     the AAAA, the Advertising Agency Association of America
12     I believe they are, both organizations are very
13     concerned about this issue in the United States,
14     particularly since commercial advertising material per
15     hour was deregulated in the mid to late 1980s in that
16     country.  I would suspect that they have data on that.
17  4077                 MR. HARRISON:  I think, though, that
18     if we were to study individual companies' awareness
19     trackings of their commercials -- I don't have any here
20     to share with you, but, anecdotally, I would say that
21     there is a general trend to a lower level of awareness
22     for each commercial over time and I think that would be
23     indicative of the fact that clutter and more
24     fragmentation have hurt our ability to communicate.
25  4078                 As to rates, so far as we know, the


 1     same rates are being charged for 14 minutes as we
 2     thought would be correct for 12 minutes.  So, I guess
 3     it's working to the broadcasters' advantage at the
 4     moment.
 5  4079                 COMMISSIONER McKENDRY:  If we did
 6     eliminate the limit on advertising, is there an
 7     argument to be made that competition would limit the
 8     number of advertisements?  I notice you have given us
 9     an overhead with respect to what has happened in the
10     U.S.  Is there a peak that's going to be reached there,
11     do you think, through the forces of competition?
12  4080                 MR. LUND:  The data that we quoted
13     out of the AAAA and the A&A Study in fact consistently
14     say it's becoming an increasingly scary situation. 
15     It's something they are continuing to monitor.  To the
16     best of my knowledge, that particular study, because
17     they have been doing it for a number of years, did not
18     indicate that there seemed to be a limit.
19  4081                 MR. REAUME:  The evidence, I think,
20     is that they all started at 12, at least in one day
21     part, and that is daytime in the United States.  They
22     are 20 minutes now of commercial time per hour.  I
23     don't know what percentage or how much cause and effect
24     is at play here, but I might also point out that
25     viewing to conventional and network shows in the United


 1     States and revenues have been on a down slope also. 
 2     I'm not saying it's all related to clutter, but that is
 3     part of the problem in the United States also.
 4  4082                 MR. HARRISON:  I might just add that
 5     one of our group observed a little earlier that what we
 6     are seeing in clutter gives "This Hour Has 22 Minutes"
 7     new meaning.
 8  4083                 MS CALLAGHAN:  It was me.
 9  4084                 COMMISSIONER McKENDRY:  That was much
10     earlier in the day.  It's still early.
11  4085                 MR. LUND:  We figure if you can do
12     this for three weeks, we can do it for one day.
13  4086                 COMMISSIONER McKENDRY:  Let me ask
14     about something that caught my attention on the
15     overhead that's titled "The effects of deregulation -
16     U.S. Evidence" where the curves are generally still
17     headed up.  I was intrigued at the one for local news
18     that is headed down and seems to have been headed down
19     for some time.  Why is local news less attractive as an
20     advertising vehicle?
21  4087                 MR. REAUME:  I don't know.
22  4088                 MR. HARRISON:  Well, I think it may
23     be that there is less of it available.  I think it may
24     have been replaced by network news in the States.  It
25     could be.  I'm not certain of that, but that would be


 1     my opinion.
 2  4089                 COMMISSIONER McKENDRY:  Would that
 3     explain the clutter issue because --
 4  4090                 MR. HARRISON:  I think it has been
 5     pushed to less attractive times, so it's not as
 6     attractive from an advertising/purchase point of view.
 7  4091                 MS CALLAGHAN:  I also think the
 8     effect of CNN News and the major broadcasters of the
 9     networks have taken over the local news.
10  4092                 COMMISSIONER McKENDRY:  Do you think
11     it's the same situation here in Canada with respect to
12     local news and advertising?
13  4093                 MR. HARRISON:  I don't think so
14     myself because so much of local news is a showcase for
15     Canadian broadcasters.  Still there is a very strong
16     news period scheduled somewhere between 5:00 and 7:00
17     each evening.
18  4094                 COMMISSIONER McKENDRY:  I wanted to
19     say it's quite refreshing to have somebody say to us,
20     "I don't know."  It may be the first in regulatory
21     history in Canada.
22  4095                 MR. REAUME:  But I am going to find
23     out now that you have asked, though.
24  4096                 COMMISSIONER McKENDRY:  Thank you.
25  4097                 I wanted to talk a bit about the


 1     meter-driven audience measurement that's referred to. 
 2     You ask us, particularly the submission of the Canadian
 3     Media Director's Council and the Institute of Canadian
 4     Advertising, to focus on the business infrastructure
 5     issues, the meter-driven audience measurement and find
 6     ways to alleviate the complexity of meter-driven
 7     audience measurement.  Now you ask us for some money,
 8     which you will have to check with Madam Wylie about
 9     before you leave.  What specifically do you think we
10     should do, apart from money?
11  4098                 MR. HARRISON:  Well, money would be
12     fine.
13  4099                 COMMISSIONER McKENDRY:  Assuming we
14     don't have any money.
15  4100                 MR. HARRISON:  Well, nobody does. 
16     This is a difficulty.  You know, so much of what we
17     have heard today centres on what view is a view and
18     fantastic statements are made and generalizations based
19     on the data that we have.
20  4101                 We are moving from an era of
21     measuring viewing as a way that people remember what
22     they might have viewed and recorded in a diary to
23     assist an electronic system where there is a better
24     chance that we are going to be able to measure what
25     they actually watch.  Now, I think there is big news


 1     potentially here for Canadian programming because one
 2     of the trends that we are seeing now that we have some
 3     electronic measurement is that, indeed, the big named
 4     shows actually don't do as well as we thought they did,
 5     that they do closer to the average.
 6                                                        1745
 7  4102                 With diary measurement, people
 8     recorded what they thought they viewed, and that was
 9     probably a popular show.  They would write it down --
10     "I must have watched Seinfeld" because they keep
11     hearing about Seinfeld.  But we are seeing that there
12     is in fact a much smaller gap between both shows that
13     were considered to be enormously popular and the rest.
14  4103                 While we don't, again, know, there is
15     an assumption that I am making that perhaps we are
16     going to find that there is more viewership to Canadian
17     programming than we thought because, as we are not
18     marketing Canadian programming in quite the aggressive
19     way that American programming is being marketed, it
20     could well be that people are forgetting or did forget
21     to record what they watched in their diary.
22  4104                 So I think that it is something that
23     we will undertake, to start looking at whether Canadian
24     programming is in fact doing better than was heretofore
25     the case.  And we think, therefore, you have an


 1     interest -- and if you could make it a financial
 2     interest, we would be very grateful -- in making sure
 3     that we had enough and frequent-enough data to do this
 4     analysis.  You know, it is about a $20 to $25 million
 5     business in Canada, people are always fighting and
 6     scrapping to find the money to do it.  We don't cover
 7     every week, we don't cover every market, we don't have
 8     enough meters really to do the job, but I think it is
 9     absolutely vital for you and the broadcasters, as you
10     strive to make promises that they must keep, that we
11     have the information that will show us that the viewing
12     is in fact occurring or not, as the case may be.
13  4105                 So if you did have a little extra at
14     the of the year, please throw it in the pot.
15  4106                 MR. LUND:  The evidence, just to
16     support David's hypothesis, came through when the first
17     local electronic metering with Nielsen came out.  We
18     found that news broadcasts, which were heralded as
19     heavy watched programs, were there because it is good
20     to watch the news, but what we found out
21     electronically, as people watched the first 10 minutes
22     of the news, the headlines, they weren't watching 20
23     and 30 minutes later.  So the halo effect that David
24     refers to may in fact prove true for some of the
25     Canadian programming, or maybe it is not as nice to say


 1     you watched Program A, B or C.
 2  4107                 The other thing, just to speak in a
 3     bit more detail what David referred to, we do have at
 4     least one national metering service and soon to be two,
 5     but with the fragmentation to make those statistically
 6     have integrity and stable at smaller levels, with the
 7     fragmentation there has to be a lot more meters put in. 
 8     Four hundred and fifty meters in the Toronto area, for
 9     instance, is just not -- there are 450 meters with one
10     company in Vancouver and 450 meters with another
11     company in Vancouver, kind of measuring the same thing. 
12     So there is lot of work to be done because there is
13     accountability to be had in this area; we are spending
14     a lot of money.
15  4108                 MS CALLAGHAN:  Just very quickly, to
16     bring this full circle -- listening here today,
17     everything is about Canadians, viewers, demonstrating
18     that there is an audience for Canadian programming. 
19     Everybody talks about that.  We listen to this or the
20     quantitative measures and the qualitative ones -- and I
21     am assuming the qualitative ones are the percentage of
22     Canadian content, the amount of money spent, but who is
23     tracking the audiences and the growth of audiences?
24  4109                 Really, when we talk about audience,
25     we are not talking about that kind of audience, we are


 1     talking about an audience that we can target.  And with
 2     not enough meters the data isn't statistically stable,
 3     but if you are going to make Canadian content
 4     programming, it isn't necessarily for everyone.  Make
 5     many programs that have different targets.  There are
 6     the children as targets, senior citizens or young
 7     people or teenagers, but that's what the programming
 8     is; it is about the small portions of the whole
 9     Canadian population versus something that just
10     satisfies the masses.
11  4110                 COMMISSIONER McKENDRY:  How many
12     meeters do you need?
13  4111                 MS CALLAGHAN:  It is our belief --
14     and I am not a statistician, and that's being very,
15     very difficult to come to terms with how many meters we
16     need.
17  4112                 The entire United States at one time,
18     the whole networks, that enormous amount of money that
19     goes into network programming, they had 1,800 meters on
20     which they would base the national viewing.  And then,
21     of course, there would be diaries market by market, and
22     they are on now household diaries.
23  4113                 It would seem to me that that number
24     of 1,800 probably would provide us statistically a
25     stable number regardless of the universe.  So probably


 1     you would need something like that in, say, a market
 2     like Toronto; and again, in a market like Montreal and
 3     another one in Vancouver.
 4  4114                 MR. LUND:  To give you an idea,
 5     Nielsen right now has about 1,200 meters, I believe,
 6     across Canada.  That's for a national number again,
 7     that's not market by market.  To basically beef up the
 8     numbers in the individual markets, they have 450
 9     additional meters on top of the 1,200 in Vancouver and
10     in Toronto.
11  4115                 So you are looking at -- again, I am
12     not a statistician, but you are probably looking 3,000
13     or 4,000.
14  4116                 MR. HARRISON:  Fifty thousand meters!
15  4117                 COMMISSIONER McKENDRY:  I find it
16     odd, to be honest with you, because presumably the
17     metering business is somebody's private business, and
18     if there was money to be made in this business,
19     presumably they would be investing in the business.
20  4118                 The message I get from you is that
21     there is not money to be made in it, so the government
22     should subsidizing it.  For some public policy
23     objective, is that that esentially what it boils down
24     to?
25  4119                 MR. HARRISON:  I don't think we are


 1     seriously believing the government should subsidize it,
 2     but I do think that you should have an interest in it. 
 3     I think one line in our brief says, if you can't
 4     measure it, you can't manage it, and you are in the
 5     business of managing.  So it would seem to us that you
 6     should be really quite concerned with the quality and
 7     quantity of audience measurement in this country.
 8  4120                 COMMISSIONER McKENDRY:  Let me turn
 9     to paragraph 5.4 of the Canadian Media Directors
10     Council brief.  Quite frankly, I didn't quite
11     understand what you were driving at there.  Let me tell
12     you  what I think you are driving at.
13  4121                 It seems to me that you are proposing
14     non-identical substitution as well as non-simultaneous
15     substitution.  Have I got that right?
16  4122                 MR. HARRISON:  At the moment, so far,
17     as I understand it, program services and  PSAs are
18     allowed to exploit that time in commercial sections
19     that are in U.S. signals, and I guess if we had a
20     choice we would like to exploit that opportunity
21     because, as we have demonstrated earlier in our
22     presentation, we are starting to lose audience to the
23     American specialties.
24  4123                 COMMISSIONER McKENDRY:  I want to
25     make sure I understand this.  You are suggesting that,


 1     where there is a U.S. show coming in on a U.S. service,
 2     somebody would substitute a Canadian program for that
 3     that isn't identical.
 4  4124                 MR. HARRISON:  Or a Canadian
 5     advertisement.
 6  4125                 COMMISSIONER McKENDRY:  Are you
 7     talking about just the advertisement or are you talking
 8     about the whole show?
 9  4126                 MR. HARRISON:  In this case it would
10     be -- yes, it is the show as well, yes.
11  4127                 COMMISSIONER McKENDRY:  So that's
12     what leads you to talk about the potential
13     inconvenience to the viewers.
14  4128                 MR. HARRISON:  Yes.  I think our main
15     point is that we think that investigating non-
16     simultaneous opportunities could provide great
17     advantages.
18  4129                 COMMISSIONER McKENDRY:  You are going
19     beyond non-simultaneous, you are going to non-identical
20     too.
21  4130                 MR. HARRISON:  Yes.
22  4131                 COMMISSIONER McKENDRY:  One show
23     about fishing could be replaced by a show about
24     anything except that, or even fishing as long as it was
25     Canadian.  We would be blacking out the American


 1     programming --
 2  4132                 MR. HARRISON:  Yes.
 3  4133                 COMMISSIONER McKENDRY:  -- and
 4     putting in place a Canadian program.
 5  4134                 As far as I know, you are the only
 6     group that has made that proposal to us in this
 7     proceeding
 8  4135                 MR. HARRISON:  Fortunately, we are
 9     not regulated.
10  4136                 COMMISSIONER McKENDRY:  -- or are you
11     aware of anybody else that's supporting that?
12  4137                 MR. HARRISON:  I would like to think
13     a bit more about that paragraph, to be perfectly
14     honest.
15  4138                 COMMISSIONER McKENDRY:  Okay, thanks.
16  4139                 Just let me ask you a question about
17     advertisers' purchase decisions -- and I am taking this
18     out of the submission of the Association of Canadian
19     Advertisers.
20  4140                 There is a reference in paragraph 6
21     to the quality of viewers, and that that's a factor in
22     the decisions that you make.  Can you just explain for
23     me what you mean by "quality of viewers" and what is
24     the relative importance of quantity versus quality?
25  4141                 MS CALLAGHAN:  The quality of viewers


 1     is generally the targeting, but very often there are
 2     certain kinds of programs we might choose where we
 3     believe that managers, owners, professionals might
 4     watch if we have a business target.  It all goes into
 5     targeting the quality of viewers.  It is in essence
 6     what  makes up a show and does it have a large quantity
 7     of a desirable demographic.
 8  4142                 MR. REAUME:  I might also add to that
 9     in that specific paragraph, I think we were referring
10     to also that a commercial within a 16-minute
11     environment -- the quality of the viewer receiving our
12     message is much diminished from an environment that is
13     12 minutes.
14  4143                 Perhaps we haven't made the point
15     clear enough here.  There are a number of exceptions to
16     your regulations from time to time that create a quite
17     legal situation whereby 13, 14, 15, 16, 17 and 18
18     minutes of non-program content are included in an hour
19     of TV programming, and in at least a dozen submissions
20     at this hearing many broadcasters are asking for
21     extensions into other areas, new exceptions to that,
22     which would take us from what I believe right now is a
23     14.5-minute universe to something like a 16.5-minute
24     universe.
25  4144                 That is a quality viewer.  Capturing


 1     a quality viewer back in the old 12-minute days was a
 2     certain value equation; capturing a viewer in today's
 3     environment, which is a 14.5-minute environment, is a
 4     different value equation, and there has been an erosion
 5     there.
 6  4145                 MR. LUND:  To give you an idea, I
 7     won't have the dates right -- probably before I was
 8     born -- at one point in time the number of minutes was
 9     eight minutes and they were basically 60-second
10     commercials.  Then it moved to 10 minutes and then 12
11     minutes, and commercials went from 60 seconds to 30s,
12     to 45s, to 20s, to 10s.
13  4146                 If you look at some of the programs
14     that we actually analyzed, a couple of the real
15     offenders on this last run that was just from the
16     summer, and when you go through that, in one part of
17     commercials there could be eight commercials in a row. 
18     And if you buy into the idea that there should have
19     only been four or five, you could be lost to that
20     viewer.
21  4147                 So what we are trying to do is
22     understand, as Judy spoke earlier, what environment are
23     we in fact buying.  And that excludes -- because we
24     can't tell how that splits out; and that excludes -- we
25     are not in an election right now.  If that was an


 1     election, all that would be on top of that and we could
 2     watch some of the people two or three times in one
 3     little podge.  "Click, next channel, there goes your
 4     commercial."
 5  4148                 So the environment is very, very
 6     important to us.
 7  4149                 COMMISSIONER McKENDRY:  Are there any
 8     specific changes you would like us to make to the
 9     existing regulations with respect to clutter -- because
10     you are indicating that the 12 minutes really isn't 12
11     minutes, it is higher than that.  Is there any specific
12     regulation that we have in place that you would like to
13     see changed in order to achieve your goal?
14  4150                 MR. LUND:  Just before Bob starts,
15     because Bob is the real expert in this area, one of the
16     things I think we have to recognize -- and the
17     Commission I am sure is aware of this, and if not, it
18     should be.  One of the problems that the broadcasters
19     do have, and consequently so do we, is in fact the
20     numbers that you saw from the U.S.  Part of the reason
21     that ours is now increasing is because the U.S.
22     programming that we are buying in fact has these
23     spaces; so there are new things created in the media
24     world called "interstitials", and there can be two
25     minutes gone that we have to make up for.


 1  4151                 So what we would like is to make sure
 2     that we negotiate this environment, because it is blank
 3     time and you don't want the screen to go blank, but is
 4     that now where you get the PSAs, is that where you put
 5     the promo spots and that?
 6  4152                 What we are really worried about is
 7     that trying to go from 12 to 14, we are going to have
 8     that same problem and create another one or two minutes
 9     of commercials per hour, which will just be unbearable.
10  4153                 Sorry, Bob.  Go ahead.
11  4154                 MR. REAUME:  I guess we have asked,
12     specifically in our ACA submission at least, for a
13     reaffirmation or a return to a strict delineation of
14     the 12 minutes.  That may not be possible for you, it
15     may not be possible for Canadian broadcasters, but
16     certainly, at a minimum, don't increase it any more.  I
17     mean, some of the requests in several of the
18     broadcasters' submissions at this hearing are for you
19     to allow them to not count paid advertising as
20     advertising.  That's beyond fair at this point.
21  4155                 We understand the rationale behind
22     allowing promos for Canadian programs to not be counted
23     as advertising material; it is one of your major goals
24     as an institution.  And we are as patriotic business
25     people as anyone else.  So we understand those goals.


 1  4156                 I will leave it at that.
 2  4157                 COMMISSIONER McKENDRY:  Let me end my
 3     questions with a question that will lead us into the
 4     next intervener as well.  I want to ask you about the
 5     impact of digital TV on the Canadian TV market and I
 6     suppose the economics of the market.  As I am sure you
 7     are well aware, digital TV is arriving in the U.S. very
 8     soon, this year, and the Canadian Association of
 9     Broadcasters have told us that they face huge
10     expenditures to convert to digital, and I guess the
11     cable, the infrastructure does as well.
12  4158                 Is there anything on your minds with
13     respect to the transition to digital TV and the speed
14     with which the Canadian industry is making that change?
15  4159                 MR. REAUME:  Aside from the
16     technology itself, it is obviously something that has
17     to come, and there is one thing that we can be sure of
18     on this side of this table, and it is that probably we
19     will fund it; it will be our money, our advertising
20     money that will create it.  I mean, that's where they
21     are going to get the funds for it.
22  4160                 MR. HARRISON:  I think in the short
23     term it is hard to see what the net benefit is from our
24     point of view.  There may well be benefits down the
25     road once bandwidth has improved, I don't know.  It is


 1     lots of speculation about that.
 2  4161                 COMMISSIONER McKENDRY:  A concern
 3     that some people have expressed is, given that it will
 4     light up on November the 1st in the U.S. in some border
 5     cities and be available to Canadians over the air,
 6     assuming they buy digital TV sets, that there will be a
 7     shift of Canadian viewers to American over-the-air
 8     stations.  I also understand that a direct satellite
 9     service will be offering two channels of high
10     definition television in October.  The concern is that
11     Canadian viewers will move away.
12  4162                 MR. HARRISON:  That would have a
13     great effect on us.  It would have a great effect of
14     everybody appearing at this hearing.
15  4163                 COMMISSIONER McKENDRY:  But you don't
16     seem to be too concerned that the emergence of digital
17     TV soon in the U.S. could cause that.  Is it fair of me
18     to conclude that?
19  4164                 MR. HARRISON:  I guess I am thinking
20     more from a production point of view than from an
21     audience point of view.  Certainly, if it takes away
22     audiences from Canadian broadcasters, that will be bad. 
23     We have woven this intricate web of substitution using
24     the cable system, and I hope we are using substitution
25     with our own direct-to-home satellites.  I am not quite


 1     sure what the status of that is.  But, without that, we
 2     have a very fragile system to contend with.
 3  4165                 COMMISSIONER McKENDRY:  Unless
 4     something has changed, the reason it is not on the
 5     radar screen for us yet, it is our understanding,
 6     speaking to our U.S. counterparts, that, well, yes, it
 7     is here, but it will be sometime before it is rolled
 8     out, because the other half of it is, someone has to
 9     buy that TV set, and that's not a convergence that is
10     going to happen overnight as our understanding is. 
11     Yet, it is certainly something that we would be
12     discussing in the future; it is one of the reasons, is
13     it is just not on our screen right now, quite honestly.
14                                                        1805
15  4166                 MS CALLAGHAN:  It seems to me that
16     there are so many changes and one thing that -- many of
17     us have worked for multinational clients and
18     multinational agencies.  We are quite a mature market
19     in Canada.  Whilst the fragmentation that is happening
20     in Europe, in Asia and many other countries, we have
21     had fragmentation since the seventies since cable
22     really first began.
23  4167                 When anybody looks at Canada, whilst
24     we are fragmenting, whilst there is an erosion of that
25     steady viewer, we have been at a plateau.  It is rising


 1     upwards, but it certainly isn't the kind of cataclysm
 2     that is happening in many other countries.
 3  4168                 When digital comes along, when more
 4     specialty comes along, when satellite comes along, we
 5     are accustomed to that fragmentation and have adjusted
 6     to it.  In the same way for digital, I don't think any
 7     of us are looking as if this is Armageddon.
 8  4169                 COMMISSIONER McKENDRY:  Thank you
 9     very much.  Those are the questions I had for you.
10  4170                 Thank you, Madam Chair.
11  4171                 THE CHAIRPERSON:  Commissioner
12     Pennefather.
13  4172                 COMMISSIONER PENNEFATHER:  Thank you.
14  4173                 One quick question.  I appreciate
15     understanding better your definition of quality of
16     viewers, but I will go back and just be sure I
17     understand very clearly what you mean by quality in
18     terms of program.
19  4174                 You mentioned several times, all of
20     you, earlier quality is the issue.  From your point of
21     view, what's a quality program, just so I know against
22     what I am comparing it.
23  4175                 MS CALLAGHAN:  That's a very
24     interesting question and it is used constantly in our
25     business.


 1  4176                 Quality is really getting the target
 2     that you are interested in from a particular placement
 3     of your advertising.  I think it is pretentious and
 4     many of us say well, if it's quality then it must be
 5     highbrow or if it is there to satisfy the viewer.
 6  4177                 I think if you could compare the best
 7     of CBC's programs or the best of their dramas with some
 8     of the best of the MuchMusic specials and that kind of
 9     thing, they are both perfectly targeted and they
10     deliver the audience they said they would, but if you
11     took it to the television quality terms, then they may
12     not be equal.
13  4178                 COMMISSIONER PENNEFATHER:  So from
14     your point of view, the term quality means placement or
15     getting the target audience.
16  4179                 MS CALLAGHAN:  A show that draws an
17     audience that it is intended to draw, yes.
18  4180                 MR. HARRISON:  I would think, if I
19     may just say, quality is a term that is bandied around
20     a lot.  I think it's euphemistic.  I think you would do
21     well to strike it from any questions and answers and
22     force people to sort of say what they mean and mean
23     what they say.
24  4181                 I don't know what quality means. 
25     Quality for a lot of our advertisers means top ten


 1     shows.  Well, it probably doesn't mean that to you.  We
 2     salute this notion of quality, but no one can describe
 3     what it is.  I urge you, as I say, to strike it from
 4     these proceedings --
 5  4182                 THE CHAIRPERSON:  That's hard to do.
 6  4183                 MR. HARRISON:  Yes, and insist that
 7     everybody try to articulate what they mean without
 8     using that word.
 9  4184                 COMMISSIONER PENNEFATHER:  I want to
10     be sure I understand it though.  I know it's difficult
11     and I don't want a long conversation about it because
12     it's the end of the day, but I think it's key we have
13     the definition that it means drawing the audience so
14     the advertiser is happy if "X" show drew the audience.
15  4185                 Then you get into the vicious circle
16     of what kind of shows are drawing audiences in prime
17     time and it becomes pretty well formats, doesn't it,
18     that are selling?
19  4186                 MR. LUND:  No.  I think Janet hit the
20     nail right on the head.  If you want to hit a fisherman
21     and there's a fisherman show, that show may draw only
22     .2 share, but it's very effective against that target
23     audience.
24  4187                 Just for your deliberations, that's
25     the other interesting thing about Canadian productions. 


 1     Not everything has to be an eight rating, a six rating
 2     point or a five or a four.  They can be very effective
 3     at what they are trying to hit.  That could be very
 4     effective for us consequently.  Not everything has to
 5     be "the biggest show".
 6  4188                 THE CHAIRPERSON:  Commissioner
 7     Cardozo.
 8  4189                 COMMISSIONER CARDOZO:  Thank you,
 9     Madam Chair.
10  4190                 I just have a request actually, not
11     so much a question but a request if you could get us
12     some more information.  I am coming back to the issue
13     of quality despite your request.  See, we don't listen
14     to anybody.
15  4191                 MR. HARRISON:  I don't like your
16     suit.
17  4192                 COMMISSIONER CARDOZO:  I guess I owe
18     you lunch, David, at some point.
19  4193                 Have you looked at, and I am sure you
20     do, the issue of quality of advertising which we
21     haven't talked about today.  I'm just wondering if you
22     can send us some stuff later on because it would open a
23     whole long discussion.
24  4194                 I am interested in stuff like to what
25     extent you are looking at issues of whether its sexism


 1     in advertising, as the previous witness' reflection of
 2     disability, reflection of racial minorities, et cetera,
 3     the kinds of images portrayed through advertising,
 4     whether there is material of that kind or whether
 5     that's an issue you deal with and if you could file any
 6     stuff on that.
 7  4195                 MR. LUND:  I will send you some
 8     material.  There's an association called Advertising
 9     Standards Canada.
10  4196                 COMMISSIONER CARDOZO:  Right.
11  4197                 MR. LUND:  On Advertising Standards
12     Canada we sit respectively our organizations on the
13     Board.  In that there are things on gender --
14  4198                 COMMISSIONER CARDOZO:  We have a
15     relationship with them too.  What's your relationship
16     to them?
17  4199                 MR. LUND:  I sit on their executive. 
18     A member of ICA also sits on their executive.  We are
19     very much partners in the policies set at Advertising
20     Standards Canada.  We very much believe in those
21     standards.
22  4200                 MR. HARRISON:  I think great strides
23     have been made generally in this area.  Again, I don't
24     have measurements here, but I know that we were guilty
25     perhaps of having our eyes closed a few years ago.  I


 1     think we have really come a long way in terms of gender
 2     and gender portrayal diversity in advertising.
 3  4201                 I suspect, though I don't know, that
 4     you would be getting fewer calls and letters
 5     complaining.  You would have to tell me that, but that
 6     would be my suspicion.
 7  4202                 COMMISSIONER CARDOZO:  Thanks.
 8  4203                 THE CHAIRPERSON:  Commissioner
 9     Pennefather, you have another question.
10  4204                 COMMISSIONER PENNEFATHER:  Sorry. 
11     Very, very quick.
12  4205                 Perhaps you can also get back to us. 
13     I was just thinking of another kind of production value
14     and that is the cost of making the commercials and the
15     level of special effects and so on, watching the best
16     commercial shows, et cetera.
17  4206                 You look at what looks to me to be a
18     growing pressure to really jazz up even a 15 second. 
19     In relation to Commissioner McKendry's point about
20     Canadian programming, the level at which one would have
21     to work to really have an impact is related to that to.
22  4207                 If there is any background on that
23     and what's really happening on that and what the
24     standards are again, both international and domestic,
25     against which we must work, I would appreciate knowing


 1     about that.
 2  4208                 MR. LUND:  I will collect some
 3     generic numbers.  The short answer is they are
 4     skyrocketing.
 5  4209                 MR. HARRISON:  Part of the reason
 6     they are skyrocketing is because of clutter.  You have
 7     to shout to be heard.
 8  4210                 THE CHAIRPERSON:  Commissioner
 9     Wilson.
10  4211                 COMMISSIONER WILSON:  I will keep
11     this really quick too.
12  4212                 Infomercials.  Why don't we just get
13     rid of advertising and have infomercials?  I'm just
14     kidding.  One of the proposals that the CAB has made is
15     that we legalize infomercials as Canadian content as
16     advertisers.  What's your opinion on that?
17  4213                 MR. REAUME:  We have some member
18     companies who do produce infomercials, many of them
19     multinational companies who would love to have them
20     broadcast in Canada.  We think it's not a bad idea if
21     you allow infomercials to be counted as Canadian
22     programming content.
23  4214                 MR. HARRISON:  It may well be that it
24     would inspire production by advertisers. You know,
25     Canadian advertisers are generally out of the picture


 1     when it comes to program productions.
 2  4215                 COMMISSIONER WILSON:  Do you have any
 3     samples, any of you, of infomercials?
 4  4216                 MR. HARRISON:  Do we have samples?
 5  4217                 COMMISSIONER WILSON:  Any sample of
 6     an infomercial.
 7  4218                 MS CALLAGHAN:  We can get them.
 8  4219                 COMMISSIONER WILSON:  Could you?
 9  4220                 MS CALLAGHAN:  Sure.
10  4221                 COMMISSIONER WILSON:  And maybe send
11     us something just so that we can sort of see what's out
12     there, not necessarily the slice and dice kind of --
13     well, I don't know.
14  4222                 MR. HARRISON:  There you go.  You are
15     probably thinking about quality there.
16  4223                 COMMISSIONER WILSON:  That's right. 
17     I'm sorry.
18  4224                 Thank you.
19  4225                 THE CHAIRPERSON:  If I may return to
20     this issue of quality which appears very simple to you. 
21     You go to Coca-Cola or whoever.  You are selling
22     products in advertising.  You have a measure of quality
23     which is "Am I reaching the demographic that this
24     company wants", but surely you appreciate  that we have
25     a different songbook about what quality is which is the


 1     Broadcasting Act.
 2  4226                 To suggest that we can strike the
 3     concept of quality in the sense of are we getting the
 4     broadcasting system we are supposed to get is rather
 5     radical to me.  Why should you have your measure of
 6     quality in the business you are in and not acknowledge
 7     that there can be a different approach because the
 8     goals are different.
 9  4227                 Therefore, if we are told that we are
10     supposed to have a diversity of Canadian programming,
11     reaching a diversity of audiences, et cetera, et
12     cetera, it's not a question just of a high standard. 
13     When you look at the system or any part of it you ask
14     yourself well, this is what my aim is, am I achieving
15     it.
16  4228                 The measurements or the reference
17     points are going to be very different from yours, and I
18     tell you not easily measured.
19  4229                 MR. HARRISON:  When you talk about
20     measurement, you and we when we talk about measurement,
21     are really talking about quantity, not quality.  They
22     are quantitative measures, not qualitative measures.
23  4230                 THE CHAIRPERSON:  No, but the quality
24     of the system can also have something to do -- I know
25     it's difficult to measure whether or not -- who are we


 1     to say whether a CBC program appealing to only
 2     professionals is a better quality than a very simple
 3     child program.
 4  4231                 We are looking at it from the quality
 5     of the system, of the quality of what each sector
 6     brings to it and one of the measures of quality there
 7     would be is there diversity, is there something for
 8     everyone.
 9  4232                 MR. HARRISON:  Isn't that a question
10     of counting, whether there is diversity?
11  4233                 THE CHAIRPERSON:  Well, I am just
12     looking at quality as a much broader concept which is
13     driven by one's reference point.  Yours is are you
14     reaching the demographic, did you sell or buy properly.
15  4234                 MR. HARRISON:  There where we call
16     that quality, it's really quantity because we are
17     really counting.  Can we count the number of people we
18     reach.
19  4235                 THE CHAIRPERSON:  Well, so are we
20     probably.  Is there local news?  Is there programming
21     for a diverse audience?  That's also quality of the
22     system.
23  4236                 The idea, as we explored earlier,
24     that the mere measurement of how many people listen to
25     what program and are they the only programs we are


 1     showing because that's what the most people watch, I
 2     would suggest may or may not be quality of the system.
 3  4237                 Even if there are programs that fewer
 4     people watch, we are supposed to try to see to it that
 5     every sector of society has --
 6  4238                 MR. HARRISON:  It's the range isn't
 7     it.
 8  4239                 THE CHAIRPERSON:  Yes.
 9  4240                 MR. HARRISON:  Making sure there's a
10     range of offerings that meets that definition in the
11     Act.
12  4241                 THE CHAIRPERSON:  The danger if you
13     suggest only levels of viewership will tell you whether
14     you are doing well puts quality and level or quantity
15     of viewers --
16  4242                 MR. LUND:  We are not suggesting
17     that.
18  4243                 THE CHAIRPERSON:  No, no.  I am
19     reacting to the suggesting that the word quality should
20     be stricken from the record.
21  4244                 MR. HARRISON:  It is undoubtedly a
22     facetious recommendation to you, but I believe that
23     there is an element of truth to it.
24  4245                 THE CHAIRPERSON:  It reminds me of
25     participating in the early eighties with the task force


 1     on sexual stereotyping which your organization, Mr.
 2     Lund, was very involved in.
 3  4246                 Somehow, despite the fact that you
 4     tell us you can measure whether you reach your
 5     demographics, maybe you succeeded better now, the fact
 6     of the  matter is commercials that were aimed at women
 7     managing a household were extremely offensive to women
 8     managing a household.
 9  4247                 It took months of argument to even
10     get that across.  Measurements are not perfect.  One
11     tries to do what one can, but I don't know if you can
12     measure better now whether you offend the very
13     demographic that you are reaching, that people watch
14     because there is nothing else of the type of program
15     they watch, they are offended.
16  4248                 Presumably it could be shown that
17     women were offended by the advertising, but they were
18     watching the program.  Maybe they weren't buying the
19     product.
20  4249                 MR. LUND:  The measurement is how
21     many people complain now versus complained then.  I
22     think you would know that the complaints have
23     significantly gone down.
24  4250                 THE CHAIRPERSON:  No, but my question
25     is why did it take eight months of task force arguments


 1     to get the advertisers --
 2  4251                 MR. LUND:  Because it was a task
 3     force.
 4  4252                 THE CHAIRPERSON:  -- to get the
 5     advertising world to realize that maybe women did not
 6     wax poetic about whether the shirt collars of their
 7     mates were white or not.
 8  4253                 MR. LUND:  Could I make one comment
 9     on quality.  I would like to make a suggestion to the
10     Commission, if I may.
11  4254                 There is one definition of quality. 
12     That is whether or not -- it's not a universal
13     definition from trying to be academic or anything --
14     that is the individual viewer will decide the quality
15     on any of these segments you are looking at.
16  4255                 If  you are trying to persuade person
17     "A" to watch this type of program because it's Canadian
18     or from some place else and they don't want to watch
19     it, they will turn it off.
20  4256                 I think the quality is not ours to
21     impose from our perspective, nor the Commission's to
22     impose.  The viewer will be the ultimate judge of
23     quality.
24  4257                 What we speak very much about in
25     quality isn't that we want quality equals six points of


 1     rating.  You can have a program, for instance, like
 2     "The Simpsons" that may have a five rating point and
 3     you can have "Little House on the Prairie" have a five
 4     rating point.  The type of audience that would watch
 5     "The Simpsons" has a very much different psychographic
 6     behind it than "Little House on the Prairie".
 7  4258                 That particular advertiser if they
 8     want to hit "Little House on the Prairie" won't
 9     necessarily buy "The Simpsons".
10  4259                 It's not just a quantity argument as
11     it relates to quality.  Quality is in the eyes of the
12     consumer.  They turn it off, the broadcaster doesn't
13     win, the advertiser doesn't win.  It's not always about
14     the highest rating only.  It's got to do about quality. 
15     Sorry.
16  4260                 THE CHAIRPERSON:  You spoke of
17     offending stations. Is your research in that area
18     sufficiently extensive for you to be able to have
19     measured whether the stations you have identified as
20     offenders suffered from the increased clutter.  Is it
21     refined enough to know whether it appeared to have
22     caused a drop in viewership?
23  4261                 MR. LUND:  No.
24  4262                 THE CHAIRPERSON:  You don't know.
25  4263                 MR. LUND:  No.


 1  4264                 THE CHAIRPERSON:  You can't measure
 2     that or you haven't done that.
 3  4265                 MR. LUND:  We haven't measured that. 
 4     We will ongoing be measuring this in the future.  This
 5     came from a 1993 study.  It just became more intuitive
 6     or imperative that this was happening, so what we did
 7     was we measured.  We started measuring in the lowest
 8     months where there is supposed to be low TV inventory.
 9  4266                 We actually didn't expect it to be
10     quite that high, to be very honest with you.  Hopefully
11     we will be able to tie those together at some other
12     future date.
13  4267                 THE CHAIRPERSON:  You mentioned 12
14     minutes and then rising to more likely fourteen and a
15     half minutes.  Assuming that one is in compliance,
16     those additional minutes would be to promote other
17     Canadian shows, considering there may obviously be
18     offenders.
19  4268                 You could be in compliance and have
20     12 minutes of actual advertising and have additional
21     non-programming.  Considering that you purchase air
22     time on Canadian programs, is there not a point at
23     which some of that is helpful to you because you may
24     have bought air time on a program that is being
25     advertised in this program.  If I am making any sense.


 1  4269                 MR. HARRISON:  Yes.
 2  4270                 THE CHAIRPERSON:  There could be a
 3     cross point.
 4  4271                 MR. HARRISON:  There is a quid pro
 5     quo.  What we are asking for is not only a sort of
 6     reaffirmation of the 12 minute rule but a reaffirmation
 7     by the industry who only a few years ago themselves
 8     thought that 30 messages was enough messages in any
 9     given hour.
10  4272                 THE CHAIRPERSON:  So it's a question
11     of balance.
12  4273                 MR. HARRISON:  Yes.
13  4274                 THE CHAIRPERSON:  You do acknowledge
14     that when the Commission exempted from the definition
15     of advertising, advertising Canadian shows could be to
16     your advantage.  Right?
17  4275                 MS CALLAGHAN:  Especially on the U.S.
18     specialty channels.
19  4276                 THE CHAIRPERSON:  Yes, on A&E for
20     example where you suddenly see the CBC.  It's a
21     question then of how excessive it is so that the
22     clutter becomes annoying.
23  4277                 MR. LUND:  We didn't make a big point
24     of it because we didn't have enough evidence, but I am
25     sure that you have had complaints because my members


 1     have told me they have complained to the CRTC.
 2  4278                 What worries me about that is in fact
 3     that they use the time not only for promoting their
 4     cable network, but then sometimes they might also have
 5     a competitor.  Then they start to slide into other
 6     products and services.  Again, we haven't monitored
 7     that, but we know that some of our members are doing
 8     that.
 9  4279                 THE CHAIRPERSON:  Yes, we have dealt
10     with some of these complaints.
11  4280                 Thank you very much for your
12     appearance and for patiently waiting until this late
13     hour to appear before us.
14  4281                 Legal counsel.  I will be impeached
15     any minute.
16  4282                 MS PATTERSON:  Thank you, Madam
17     Chair.
18  4283                 In your presentation this afternoon
19     you referred to a number of ACA Canadian clutter
20     studies.  I just wondered whether it was possible for
21     you to file those with the Commission.
22  4284                 MR. LUND:  I certainly will.
23  4285                 MS PATTERSON:  Would it be possible
24     to file them by the 15th of October 1998?
25                                                        1830


 1  4286                 MR. LUND:  The 1998 one is only the
 2     summer wave, but we will file that much.  We won't have
 3     the second wave completed by then, but we will file
 4     what we have shown as statistics today.
 5  4287                 MS PATTERSON:  Thank you.
 6  4288                 The same going for the additional
 7     information requested pursuant to Commissioners
 8     Pennefather's and Wilson's requests?
 9  4289                 MR. LUND:  Yes.  What I have recorded
10     was -- I am not quite sure if you still wanted
11     information on Advertising Standards Canada, but we can
12     certainly send you some -- the cost of making
13     commercials, where it has moved and, lastly, some
14     examples of infomercials.
15  4290                 MS PATTERSON:  Thank you.
16  4291                 COMMISSIONER CARDOZO:  The
17     Advertising Standards you would have access to, I am
18     just wondering if there is anything on those subjects
19     from your organizations?
20  4292                 MR. LUND:  We dialogue as a multi-
21     partite industry member in that regard.
22  4293                 COMMISSIONER CARDOZO:  That's fine.
23  4294                 MS PATTERSON:  Thank you.
24  4295                 MR. LUND:  Is that a no then to ASC?
25  4296                 COMMISSIONER CARDOZO:  That's right. 


 1     Yes.
 2  4297                 MS PATTERSON:  Thank you.
 3  4298                 Thank you, Madam Chair.
 4  4299                 THE CHAIRPERSON:  Thank you, ladies
 5     and gentlemen, and have a nice weekend -- a quality
 6     weekend, whatever that means, for each of you, but all
 7     I can tell you is we will be here tomorrow.
 8  4300                 Madam Secretary, would you invite the
 9     next participant, please.
10  4301                 MS BÉNARD:  Thank you, Madam Chair.
11  4302                 The next presentation will be by
12     Canadian Digital TV, Mr. Michael McEwen.
13  4303                 MR. McEWEN:  Madam Chair, do you want
14     to hold this for tomorrow?  You have had a long day.
15  4304                 THE CHAIRPERSON:  It is up to you,
16     Mr. McEwen.
17  4305                 MR. McEWEN:  I am quite prepared to
18     do it now or I cam quite prepared to come and do it
19     first thing in the morning.
20     --- Off record discussion / Discussion hors
21         transcription
22  4306                 MR. BLAIS:  It is also for the
23     translating staff and stenographers, they may be also
24     tired.  So, if that's not too inconvenient maybe that
25     would be an idea.


 1  4307                 THE CHAIRPERSON:  Do you have any
 2     objection to being the first appearing tomorrow morning
 3     at 9:00?
 4  4308                 MR. McEWEN:  At 9:00?
 5  4309                 THE CHAIRPERSON:  Yes.
 6  4310                 MR. McEWEN:  Done.
 7  4311                 THE CHAIRPERSON:  We are resuming at
 8     9:00.  I am sorry, we should have negotiated this
 9     earlier, although I am sure you are most interested in
10     what was going on.
11  4312                 MR. McEWEN:  I found the discussion
12     very interesting.
13  4313                 THE CHAIRPERSON:  Thank you, Mr.
14     McEwen, and have a quality evening.
15  4314                 MR. McEWEN:  That's going to be the
16     line of the hearing.
17     --- Whereupon the hearing adjourned at 1832,
18         to resume on Saturday, September 26, 1998
19         at 0900 / L'audience est ajournée à 1832,
20         pour reprendre le samedi 26 septembre 1998
21         à 0900
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