ARCHIVED -  Transcript - Hull, QC - 1998/11/30

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Place du Portage Place du Portage

Conference Centre Centre de conférences

Outaouais Room Salle Outaouais

Hull, Quebec Hull (Québec)

November 30, 1998 Le 30 novembre 1998

Volume 6

tel: 613-521-0703 StenoTran fax: 613-521-7668



In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of


However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.



Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.



Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et des

télécommunications canadiennes

Transcript / Transcription

Public Hearing / Audience publique

New Media / Nouveaux médias



David Colville Chairperson / Président


Telecommunications /



Françoise Bertrand Chairperson of the

Commission / Présidente du


Martha Wilson Commissioner / Conseillère

Cindy Grauer Commissioner / Conseillère

Joan Pennefather Commissioner / Conseillère

David McKendry Commissioner / Conseiller



Carolyn Pinsky / Commission Counsel /

Karen Moore Avocates du Conseil

Ted Woodhead Hearing Manager / Gérant de


Daphne Fry Manager of Convergence

Policy / Responsable de la

politique sur la


Diane Santerre / Secretaries / Secrétaires

Carol Bénard



Place du Portage Place du Portage

Conference Centre Centre de conférences

Outaouais Room Salle Outaouais

Hull, Quebec Hull (Québec)

November 30, 1998 Le 30 novembre 1998


Volume 6






Presentation by / Présentation par:


Independent Film & Video Alliance / Alliance 1545

de la vidéo et du cinéma indépendants

Téléfilm Canada / Telefilm Canada 1592

Canadian Independent Film & Video Fund / 1631

Fonds canadien du film et de la vidéo indépendants

Cogeco inc. 1676

Canadian Anti-Racism Education and Research 1717


African CanaDian Legal Clinic 1733





1 Hull, Quebec / Hull (Québec)

2 --- Upon resuming on Monday, November 30, 1998,

3 at 0902 / L'audience reprend le lundi

4 30 novembre 1998, à 0902

5 6645 THE CHAIRPERSON: Good morning,

6 ladies and gentlemen.

7 6646 We will return to our proceeding,

8 taking a look at the issues surrounding new media and

9 much of the focus so far as been on the Internet.

10 6647 I would just like to remind, as I

11 think I indicated at the start of last week's session,

12 that due to the Quebec election today and to provide an

13 opportunity for those people involved in the proceeding

14 who live in Quebec to have an opportunity to vote, we

15 will be adjourning at four o'clock this afternoon.

16 6648 I don't think there's anything else

17 we need prior to starting.

18 6649 Madam Secretary, if you could

19 introduce the first party.

20 6650 MS BÉNARD: Thank you, Mr. Chairman.

21 6651 The first presentation will be by

22 Independent Film and Video Alliance.


24 6652 MR. SANDMARK: Good morning.

25 6653 We have some extra copies if the




1 translators need a copy of our presentation.

2 6654 I am Peter Sandmark, the National

3 Coordinator of the Independent Film and Video Alliance.

4 I would like to introduce my colleagues. On my right

5 is Penny McCann, who is the President. On my left is

6 Sheila Urbanoski, who is one of the members of the

7 Board of Director and also an acclaimed new media

8 artist already whose Web sites have garnered some

9 attention and awards.

10 6655 I am going to allow Penny McCann and

11 ask her to introduce our organization to you.

12 6656 MS McCANN: Good morning.

13 6657 Let me first thank you for allowing

14 us to have the opportunity to present to the

15 Commission.

16 6658 Let me give you a little bit of

17 background on our organization. The Independent Film

18 and Video Alliance was founded in 1981 at the Yorkton

19 Independent Film and Video Festival in Saskatchewan.

20 At that time the independent film and video makers

21 decided that they needed a national organization to

22 lobby on their behalf. As a result, we were born.

23 6659 We are a non-profit organization of

24 42 film, video and new production distribution and

25 exhibition co-ops and centre, primarily co-operatives.




1 We estimate the total number of individual members in

2 our member centres to be about 7,000 members across

3 Canada.

4 6660 For instance, we have ten centres in

5 Quebec who in turn represent over 1,200 individuals.

6 Our film video makers and new media artists -- the film

7 video makers are broadcast. We do feature films. We

8 do short work. It has an industrial edge, but

9 primarily its content driven media art.

10 6661 The alliance is principally funded by

11 our own membership fees, the Canada Council for the

12 Arts and the National Film Board, along with various

13 federal and provincial project and job creation grants.

14 6662 Our mandate is to coordinate

15 independent film, video and new media efforts. The

16 IFVA works to promote the improvement of means and

17 access for independence at every stage of production

18 and distribution.

19 6663 In 1993 our members voted to add

20 electronic media to our mandate. It's the IFVA policy

21 to promote the creation and dissemination of new media.

22 We lobbied for and got the creation of a new media

23 funding program at the Canadian Council for the Arts.

24 Now they have both creative development grants for

25 research and development in new media as well as




1 production grants.

2 6664 With regard to how new media has

3 changed our own organization, since 1995 we have run a

4 Web site for the alliance on which we publish our

5 newsletter and we are hoping to turn that into a

6 "webzine" on independent film, video and new media in

7 Canada.

8 6665 About 1,200 people read our Web site

9 every month, along with about 200 subscribers who

10 receive it by e-mail or fax. Now only a dozen people

11 receive it by regular mail. That's gone the way of the

12 dinosaur.

13 6666 It is said that Internet years are

14 like dog years. I guess that means we have been in the

15 web business for about 28 Internet years.

16 6667 In terms of our member centres, the

17 production and exhibition and distribution centres

18 themselves, they have been on the front lines of

19 technological change. All are struggling to adapt to

20 digital technology and have adapted it

21 6668 The majority of production centres

22 have acquired digital editing technology in the last

23 two, three, five, some a little bit more over those

24 many years. Distributors are putting their films and

25 videos on the web and exhibitors are including new




1 media in their programming.

2 6669 New centres have joined that are

3 devoted solely to the production of new media. The

4 potential of the Internet has enabled us as an

5 organization to expand our vision beyond national

6 borders to connect with an international community of

7 media artists working independently of industry and

8 current broadcasting limitations which on the whole

9 does not show independent work and our definition of

10 independent, our creators maintaining the copyright of

11 their work and full editorial control of their work.

12 6670 Access to the Internet has

13 essentially strengthened our community. Three years

14 ago few of our member centres were online. Now only

15 one of our 42 member centres are without e-mail. It

16 has completely changed the internal information

17 exchange within our organization.

18 6671 Three years ago our national

19 structure was a burden. Communication was expensive

20 and slow. We faced funding cutbacks. How could we

21 continue to communicate with our members?

22 6672 The Internet -- now we communicate

23 readily and often. Thanks to the Internet, we are now

24 a true alliance of Canadian independent arts

25 organizations.




1 6673 Peter.

2 6674 MR. SANDMARK: This is just a comment

3 to start with. We are very positive about the impact

4 the Internet is having on media arts because

5 traditional broadcasting has been a bottleneck for our

6 member centres. We really do feel that this is going

7 to open up a lot of opportunity for media artists.

8 6675 It is the World Wide Web particularly

9 that is revolutionizing the way that media is produced

10 and distributed. The accessibility of the home video

11 cameras and desktop PC video editing is revolutionizing

12 media production. We are only seeing the tip of the

13 iceberg now.

14 6676 The independent media is the first to

15 see the effects. We are in the midst of what we call a

16 pyjama revolution in which more and more artists are

17 creating content for the net right out of their homes.

18 It's a real thing that's happening and we see it.

19 6677 What does it mean? I am going to use

20 a little example here. In the United States, Disney

21 owns ABC, as you know, one of the largest networks. In

22 Canada there is not even an independent film channel.

23 In the United States, Disney has a Web site. In

24 Canada, the lowly and underfunded Independent Film

25 Video Alliance has a Web site.




1 6678 Why? In fact, I even personally have

2 a Web site of my own. On my screen, it is the same

3 size as the Disney Web site. I know Disney has a

4 bigger promotional budget than we do. I will give them

5 that. The point here is with PCs and the Internet,

6 independent producers can compete in the new media

7 marketplace.

8 6679 The scale of web based new media

9 technology favours small production companies, even

10 individuals working out of their homes. You do not

11 need the enormous revenues of a multinational media

12 company to have a presence on the web.

13 6680 Comparing the Internet to TV is like

14 comparing apples and oranges. News media is just that,

15 new media. It is not TV, not the telephone, not

16 publishing. Therefore, the use of broadcast laws to

17 deal with regulating new media is inadequate.

18 6681 It's incorrect to draw comparisons

19 between TV and the net and thereby assume that we can

20 transfer the regulations governing broadcast to the

21 Internet. It is a one to one, one to many or many to

22 many medium. It's transactional nature makes it a form

23 of telecommunications.

24 6682 Also, the audience on the Internet

25 is qualitatively different from TV. Television viewing




1 statistics are measured in a passive way. If a TV is

2 in a house being monitored by Nielsen, it counts. I

3 know many people, myself included, who have their TV on

4 like background ambience.

5 6683 To look at the Web site is a much

6 more active gesture. You have to seek it out. Another

7 reason why the Internet should not be regulated in the

8 same way as broadcasting.

9 6684 In two minutes I can surf past all

10 the channels on the cable dial. It's simply impossible

11 on the Internet. It is more like a combination of the

12 phone and the library. You can pick out a text for

13 audiovisual work out of a vast collection that happens

14 to be spread out on computers all over the world.

15 6685 I may run a Web site from my home but

16 host it on a server in the United States. I could run

17 my Web site from an Internet cafe. It would be

18 difficult for a regular to know where I am making my

19 Web site from.

20 6686 The focus of regulation certainly

21 could not be on the physical location of a Web site,

22 i.e. where the server is that it's hosted on, because

23 the Web site can be hosted, and in fact many are,

24 hosted on many servers existing in different

25 jurisdictions.




1 6687 There are other Internet activities

2 that simply could not fall under the broadcast law.

3 What about an interactive videoconferencing connection?

4 Should that be regulated? No. It would be as silly as

5 calling a voice mail message broadcasting. You simply

6 can't compare the net to a radio or TV broadcast.

7 6688 The Internet also creates niche

8 markets, another distinction in terms of the economic

9 market of the new media. With the enormous variety of

10 content that's already available on the Internet, the

11 audience is split into small niche markets. This makes

12 it more difficult for TV companies, media companies,

13 used to large scale mass media advertising to continue

14 operating in the same way, in need of broad audience to

15 draws the advertising dollars that pay for the high

16 salaries and the big-time production values.

17 6689 The 75 channels found on many urban

18 cable packages split the broadcast audience and the

19 hundreds of thousands of Web sites offering content are

20 already splintering the audience even further.

21 0910

22 6690 I would like to stress the point that

23 what we are talking about is not just the future but

24 the present. New media work is already happening

25 largely in video streaming, audio, radio stations on




1 the net.

2 6691 Erosion of the large broadcasting

3 audio share towards the creation of large scale

4 portholes, usually associated with large media

5 corporations, Yahoo!, or things like that. In Canada,

6 Sympatico, and things like that. They are trying to

7 offer advertisers large numbers of Web surfers starting

8 from their sites.

9 6692 But the fact that we can see how many

10 people visit a site and how many people click through

11 on a banner to go to the advertiser's home page will

12 mean that, in the long run, advertising spent on the

13 net will become much more focused and will most likely

14 not follow trends set by TV advertising. It is still

15 not sure how advertising will shake down as a form of

16 revenue. It is there.

17 6693 I have read actually that most of the

18 -- the majority of the advertising on the Internet goes

19 to the top ten visited sites. So it is not a serious

20 form of revenue for most of the other sites.

21 6694 Before the Internet emerged as the

22 main electronic data network, companies like Microsoft

23 and AOL thought they could establish private networks

24 that would charge people for their proprietary content.

25 That just did not work. People shied away from having




1 paper content when there was so much for free on the

2 Internet.

3 6695 Now MSN is another Web site and AOL

4 is just another large Internet service provider.

5 6696 In fact, the economic model of

6 shareware which essentially turns conventional business

7 practice on its head, giving away the product and

8 asking for customers to pay for it if they are

9 satisfied has become a widely successful and durable

10 example of net based commerce, far more successful than

11 the proprietary content that Microsoft and AOL tried to

12 sell.

13 6697 Sometimes we call it the Worldwide

14 Wait. We need to look at the success of the Internet

15 to understand what the future will hold. Why would

16 this medium hold so much interest for people when

17 things like computer crashes, long down load waits,

18 difficulties hooking up to the Internet are common

19 occurrences? Obviously, television has great picture

20 and sound. Pretty much every one has one and they how

21 to use one.

22 6698 PCs are not in every household, they

23 have jerky little images and intermittent sound and

24 they are difficult to use. Yet it is the growing

25 medium and TV is in decline especially among the youth.




1 Why? Because of the content. And we say only because

2 of the content. Why do so many people look at other

3 people's home pages? They are curious. It is human

4 nature. It is a desire to communicate and connect with

5 other people and ideas.

6 6699 The Web empowers people to create

7 their own content and give voice to their own concerns.

8 This has been particularly the case with people who

9 have remained under represented in the mass media.

10 6700 In terms of protection of Canadian

11 culture, we are a cultural group that is not calling

12 for regulating the net to protect Canadian content.

13 Nonetheless, I support the concern of the Canadian

14 conference of the arts that broadcasters could make an

15 end run around Canadian content by moving their

16 broadcasting, quote/unquote, to the Internet. And I

17 also recognize the intent of SoCan in their

18 presentation to protect the interests of music

19 composers in their call for new media broadcasters

20 distributing music over the Internet to be regulated

21 under the Broadcast Act.

22 6701 However, as much as the IFA totally

23 supports efforts to support the production and

24 dissemination of Canadian content, we feel it will not

25 be technically feasible to police Canadian content




1 quotas on Canadian based Web servers. We recommend

2 strongly that the CRTC avoid any attempt to regulate

3 content on the Internet. If we wish to protect

4 Canadian culture with our regulatory policy we must

5 start with the creator.

6 6702 International copyright law protects

7 works of all kinds. If a Web site is transmitting a

8 copyrighted work without permission, then it is

9 infringing international copyright law. A simple

10 Internet search can turn up Web sites that may host

11 works and it would be possible to find sites that are

12 illegally using copyrighted work.

13 6703 At that point, a creator or rights

14 holder or the representative could take action against

15 the Web site producer infringing their work. There

16 needs to be stronger international protection of

17 creators' copyright.

18 6704 When discussing the regulation of the

19 Internet within the context of protecting Canadian

20 cultural content, it is important to put the creators

21 first. Canadian content policies have aimed to protect

22 Canadian creators by assuring a place for their work on

23 Canadian airwaves under the regulations of the

24 Broadcast Act.

25 6705 We feel the Internet should not fall




1 under the Broadcast Act because it more closely

2 resembles telecommunications than broadcasting. To

3 some extent, the Canadian content quotas imposed on

4 radio and TV serve to address the limited band width of

5 broadcast media to ensure the very existence of

6 Canadian content on the airwaves.

7 6706 How then are we to ensure the

8 existence of Canadian content on the data waves, or the

9 Internet, to use a made up term. The Internet does not

10 have a limited band width. The solution lies in the

11 direct support of Canadian content creators. Through

12 the creation of new media funding programs, the very

13 technology of the Internet favours small scale

14 producers. If the intent of regulation is to ensure

15 and remuneration for creators, then the solution lies

16 in refining international copyright law to allow

17 creators or their representatives to protect themselves

18 against copyright infringement. Since the internet is

19 global, we must use tools of law that have

20 international support in order to protect the rights of

21 creators.

22 6707 The use of national broadcast laws to

23 supposedly protect creators will only lead to companies

24 using the international nature of Internet technology

25 to avoid national laws.




1 6708 The important thing in terms of

2 Canada's cultural objectives is to ensure that

3 Canadians have a chance to create their own media and

4 distribute it on the Internet.

5 6709 Now, as I stated earlier, the

6 Internet does not privilege large companies. And there

7 is something going on called the pregenerative

8 revolution where on people produce new media in their

9 homes. Any government policy aimed at developing new

10 media content should strive to assist the individuals

11 and small and medium-sized companies and not give funds

12 to large media companies, as we have seen recently with

13 Discreet Logic receiving $9 million to set up computer

14 animation equipment. That is a form of corporate

15 welfare.

16 6710 Public access and the Internet as a

17 forum for non-commercial activity. The medium is the

18 message, a famous Canadian once said. It is

19 shortsighted to think of the Internet only as a

20 disseminator of television or electronic commerce. The

21 Internet is not television nor is it strictly the

22 written word. Any regulations must determine the

23 written word. Any regulations must enable the medium

24 to determine the content that it itself most

25 effectively conveys.




1 6711 While the Internet revolution is

2 driving the globalization of culture, and we certainly

3 feel it offers a great opportunity for the export of

4 Canadian culture, we are also concerned about the flip

5 side of the equation. And that is the public's

6 affordable access to these powerful communication

7 tools.

8 6712 In some sense, a driving motivation

9 for our own film cooperative movement was access to

10 film making tools, offering our members inexpensive

11 rentals, film cameras that otherwise would have cost

12 thousands of dollars a day.

13 6713 The Canadian government should assure

14 its citizens a public commercial free access to the

15 Internet and services privileging the exchange of

16 information over the exchange of commerce, just as the

17 Canadian government established the CBC to ensure

18 public access to broadcasting, the government should

19 universe by making funding available to not for profit

20 ISPs, free net providers, alternative servers, for the

21 creation of Aboriginal language Web sites, schools,

22 public libraries and to provide comprehensive low cost

23 access to the Internet.

24 6714 The issue is no longer scarcity of

25 the spectrum as it was with broadcasting, but access to




1 the system. Not only is training needed to teach

2 people how to use new media technologies, but training

3 and content creation is also vital to ensuring Canadian

4 content on the Web.

5 6715 In that sense, communication over the

6 Internet is a freedom of speech issue. Our Charter of

7 Rights and Freedoms specifically protects the freedom

8 to communicate "other media of communication". And as

9 an international phenomenon, the Internet should be

10 protected by the UN Declaration of Human Rights.

11 6716 To summarize our recommendations,

12 one, the IFA does not support any mechanisms that

13 regulate content on the Internet. That is censorship.

14 Two, a broad enabling framework for new media should

15 ensure the development and protection of content

16 creators through the creation of a new media fund. For

17 example, we support the CCAA recommendation that

18 Internet carriers, ISPs and IAPs which have gross

19 revenues above $750,000 be required to contribute 5 per

20 cent of their revenues to the fund, similar to the

21 cable protection fund, now the Canadian Television

22 Fund.

23 6717 Three, the protection of Canadian

24 cultural interests must be assured through strengthened

25 copyright law.




1 6718 THE CHAIRPERSON: Thank you for your

2 presentation this morning and I will turn the

3 questioning over to Commissioner McKendry.

4 6719 COMMISSIONER McKENDRY: Good morning

5 and thank you for your presentation. We saw you not so

6 long ago in the TV policy hearing.

7 6720 I wanted to just ask you a couple of

8 questions about your oral presentation this morning.

9 And early on you referred to the international

10 community of media artists and you also say that access

11 to the Internet has strengthened our community.

12 6721 And we have not heard a lot so far in

13 the hearing about the role of the Internet in creating

14 communities and communities, in fact, that may only

15 exist in cyber space. Could you just talk for a minute

16 about the role of the net in terms of community

17 building with new media artists?

18 6722 MR. SANDMARK: I would just like to

19 say first, because I started working for the Alliance

20 four years ago and was seeing the net starting to

21 develop. And it has been great for our organization.

22 It is ideal for a national organization because it is a

23 way of communicating easily, quickly, cheaply across

24 the country.

25 6723 We have a board of directors that




1 spread out and we have a board of directors from every

2 region in Canada. It was extremely costly to meet. We

3 now hold regular electronic meetings for no cost. We

4 are able to consult our members on issues like this

5 quickly. We are only starting to reap the benefits of

6 international connections. I think there is a huge

7 world opportunity opening up.

8 6724 There has been quite a lot of

9 activity in the eastern part of Europe on the Internet

10 because there they are also seeing -- using the

11 Internet as a low cost way of producing work and

12 distributing connecting.

13 6725 Maybe, Sheila, actually could you

14 talk about the syndicate and other groups like that

15 that are out there?

16 6726 MS URBANOSKI: One of the things we

17 could talk about is the Internet specifically has

18 allowed us to collaborate and share information and

19 experience with other media artists throughout the

20 world, literally, and that has been tremendously

21 important for us. Definitely and historically one of

22 the great benefits of the Internet is an ability to

23 move beyond geography. And this, of course, is a major

24 issue in Canada that we are no longer restricted by the

25 physical geography of this very large country. I




1 should say, being from Western Canada having to come

2 all the way out here.

3 6727 So it has definitely benefited our

4 specific community, but this can also be applied to the

5 Internet generally, that there are literally thousands

6 and tens of thousands of anecdotes and stories of

7 people who have been able to connect with and

8 communicate with members of their own specific

9 interests or really people -- meeting people through

10 the Internet who share their experience and in that way

11 come to develop a community on the Internet.

12 6728 This has been tremendously important

13 for us as an organization, but also of great import to

14 all of our individual members.

15 6729 MS McCANN: I would just like to say

16 that many of our members produce work that is

17 marginalized, that is not seen on traditional, on

18 broadcasting or other traditional forms of content

19 delivery.

20 6730 Our members produce queer work,

21 Aboriginal work, quite controversial work, video art.

22 You do not see that on television.

23 0925

24 6731 So, with the expansion of the

25 Internet our members are finding other communities of




1 artists equally marginalized in other countries, in the

2 United States, in Europe, elsewhere and we are a niche.

3 The Internet helps niche markets to flourish. It's a

4 pretty simple thing and our work is starting to be --

5 it's being broadcast across the Internet now to the

6 people who want to find that work because the

7 broadcasters -- some of our work is broadcast, but the

8 majority of it isn't and that's where it is being seen

9 now or found, on the Internet.

10 6732 COMMISSIONER McKENDRY: Last week we

11 had a presentation from IBM and they showed us a video

12 clip and one of the elements of the video clip was a

13 printmaker who was using the Internet to sell his

14 prints globally. He would then, if he got an order,

15 use the mail or I guess a courier service to deliver

16 the print. Is that kind of experience shared by any of

17 your members as well, the commercial aspect?

18 6733 MR. SANDMARK: Almost all our

19 distributor members have fairly large Web sites and

20 their catalogue of films is on the Web site, so that

21 when they get calls for information they refer people

22 to their Web site. They don't have to print out

23 expensive, bulky catalogues. They can keep their Web

24 site up-to-date and people can order directly from

25 their Web site. So, it's starting to work.





2 that vein ask you a question that goes to the comments

3 you made about Disney and their Web site and your Web

4 sites, and I take it the point you are making is that

5 the Internet is a great leveller here, that in a sense

6 you have the same status on the net that Disney does.

7 6735 My question to you is: Is there an

8 issue? Disney has a very high profile, a high brand

9 name, people. Disney probably doesn't have a lot of

10 trouble with people finding the Disney Web site. For

11 your members is that an issue? How do you alert people

12 to go to your sites and see what's there?

13 6736 MS URBANOSKI: I'll take this one.

14 One of the things that you have to remember is that the

15 Internet is run on computers and computers are run on

16 code. Code can be manipulated by an individual.

17 6737 I am not going to address hackers to

18 any great extent, but that is a common example of how

19 one person can actually impact on a very large

20 organization.

21 6738 That being said, having access to a

22 familiarity with high-level coding you can in fact

23 position yourself on search engines higher than a

24 corporation. The code actually will give an individual

25 the tools to position themselves on the Internet, and I




1 mean that in terms of being able to be found on search

2 engines quite easily. So, that's one thing it will do.

3 6739 MR. SANDMARK: There is another thing

4 too. What you see on the Internet is sort of a word of

5 mouth, like I guess you would call it a digital word or

6 something, but Web sites can suddenly become very

7 popular just because they offer something interesting.

8 Check out the little movie on "".

9 There you go, I said it, now you can look up the

10 address that simply. It's a little animation and it's

11 really funny. It's about a woman who moves to New York

12 and tries to rent an apartment. It's that simple.

13 6740 But, you know, like things can get

14 around and a site can draw thousands of hits very

15 quickly. The same goes for journalistic efforts on the

16 net. Something can suddenly hit.

17 6741 Now, Disney has a brand name, of

18 course, and people will go to their Web site without

19 even hearing -- they'll just assume it's ""

20 or something, but they have to -- they need that brand

21 name to draw people because they need to make a lot of

22 money. They have a lot of staff.

23 6742 So, you know, like I don't need to

24 make as much money because I don't even have an office

25 and I already paid for my computer. But, you know, the




1 point is there is wide variety here of economic models

2 that we are talking about and it's apples and oranges.

3 6743 MS URBANOSKI: One of the things we

4 mentioned in the presentation and that we will continue

5 to emphasize is that the individual content producer

6 has as much status, very much so, as any corporation of

7 any multinational of any size. What Peter referenced,

8 the fact of word of mouth, is not to be underestimated.

9 The impact of lists served and e-mail and ancillary

10 communications that run alongside Web sites is

11 tremendous, huge and rapid and that's the other thing

12 that is interesting. It's very efficient and very

13 fast.

14 6744 COMMISSIONER McKENDRY: Let me ask

15 you a question about your comments with respect to the

16 protection of Canadian culture. I want to make sure

17 that I understand what you are suggesting to us now. I

18 think I am clear that you are recommending that we

19 don't make any attempt to regulate content on the

20 Internet. But, on the other hand, I notice that you

21 say you support the concern of the Canadian Conference

22 of the Arts that broadcasters can make an end run

23 around Canadian content by moving their broadcasting to

24 the Internet. How would you suggest we deal with this

25 potential problem that you are identifying, the end-run




1 problem?

2 6745 MR. SANDMARK: The CCA is identifying

3 -- I think, first of all, that TV is not going to go

4 away. I think part of what we are trying to say here

5 is that the nature of it is different. I don't think

6 that the issue is the same when you move to broadcast.

7 6746 The point we were trying to make is

8 that there is not the limited spectrum any more. If

9 the CBC wants to have a Web site and broadcast only

10 American content, that's fine in a way because other

11 Canadians can broadcast their work on the Internet.

12 There is no restriction. We are not restricted any

13 more from broadcasting on the Internet.

14 6747 So that the end run, there is a

15 certain possibility, but I think the technical -- if

16 you do that, you are just going to push companies out

17 of Canada, in terms of -- they will just operate what

18 they want to do on the net. They will just operate it

19 elsewhere. They will set it up in the Cayman Islands

20 or something. They will have their office in Toronto

21 and the bank account in another country. So, I don't

22 think it's useful, in other words, and it's technically

23 difficult. And we don't -- maybe we just don't share

24 the same kind of fear of the end run.

25 6748 I don't believe that the broadcast




1 world is going to be dismantled by the Internet. It's

2 another medium. It's a corollary to some degree. I

3 think the broadcast company should stick to broadcast

4 and do what they do good there.

5 6749 If they want to try and go on the Web

6 that's fine, but we are not that worried about the

7 competition.

8 6750 COMMISSIONER McKENDRY: Just to make

9 sure I understand then, you don't see a shift of so-

10 called conventional broadcasting to the Internet?

11 6751 MR. SANDMARK: It can't happen

12 tomorrow, just because the broadband is not there yet.

13 6752 I think I made the point in there

14 about the cost. When a Web site attracts hundreds of

15 thousands of hits, its cost goes up enormously because

16 it is absorbing bandwidth and it's on a pay per use

17 basis bandwidth.

18 6753 So, a large company that is trying to

19 broadcast in a mass form like we see on TV would be

20 extraordinarily expensive and slow. So right now it's

21 not -- maybe in 20 years when every home is connected

22 to fibre optic maybe the world is going to be very

23 different and we will come back to the CRTC then.

24 6754 It's not going to happen right now.

25 There is stuff already happening.




1 6755 Do you want to add anything to that,

2 Sheila?

3 6756 MS URBANOSKI: Yes. I just wanted to

4 say that I am always reluctant to get into speculation

5 on the future. Okay? There is a tremendous amount of

6 discourse on the future of broadcast on the Internet

7 and why we feel compelled to see the PC as a very over-

8 priced VCR is kind of beyond me. Again, I would argue

9 that we are missing the point if all we think about the

10 Internet is as a medium of broadcast.

11 6757 They are, as we said in our

12 presentation, completely different animals. The

13 Internet is not television. It's not radio. It's not

14 a library. It's a new medium because it is a new

15 media.

16 0935

17 6758 I think to take our past relationship

18 with broadcasting and try and apply that to the

19 Internet is shortsighted and probably not effective.

20 6759 COMMISSIONER McKENDRY: Let me ask

21 you about the protection of rights for creators, a

22 subject that I assume is very important for your

23 members.

24 6760 I take it that you are suggesting

25 that the solution lies in effective international laws




1 and presumably effective international enforcement

2 mechanisms.

3 6761 Some people have argued that given

4 the nature of the Internet and the chaos of the

5 Internet that that kind of approach may be very

6 difficult to implement and the solution may be more in

7 market driven and technical driven answers to protect

8 the rights of creators, direct interaction between the

9 creator and the person that is using what the creator

10 has made.

11 6762 Do you have any comments on the view

12 that the approach you are suggesting may be very

13 difficult to achieve in the world of the Internet?

14 6763 MR. SANDMARK: There are several

15 things. One of the problems with international

16 copyright law is that it serves mainly large companies

17 that are huge rights holders. They are the ones with

18 the legal clout to act on it.

19 6764 If you look at what's going on in

20 China, they are under pressure from the west or from

21 the United States to crack down on piracy there.

22 That's a national effort.

23 6765 I think what we are looking for is

24 that there would be some teeth in international

25 copyright law that would allow individuals to exercise




1 their rights. We are talking about copyright.

2 6766 I don't think it would be that

3 difficult. If we are talking about companies that are

4 commercially exploiting a work, they have to be

5 registered, I assume, unless they are total pirate

6 operations, which is maybe what we are going to see,

7 high seas Internet broadcasters.

8 6767 If they are registered businesses,

9 then they exist under some national law somewhere in

10 some country. If that country is a signatory member of

11 the international copyright treaties, then they are

12 liable to that law. I don't think it should be that

13 difficult to exercise that.

14 6768 This is something we will have to

15 present to the Copyright Board. It's not your

16 jurisdiction, I realize. But I believe there are ways

17 it could be done.

18 6769 At the same time, if we look at the

19 model of creators distributing directly their own work,

20 as you are suggesting, and I believe electronic

21 commerce will come and be developed and people will be

22 able to directly, you know, do transactions with the

23 creators. I mean that's a direct economic model right

24 there.

25 6770 What we are talking about in terms of




1 the copyright is legal use of your work for business

2 and for making money, so there's two things. I totally

3 agree that e-commerce is going to function eventually.

4 On the other hand, we are just trying to say well,

5 let's use the existing international law if we want to

6 protect content and creators.

7 6771 I realize some people can see some

8 difficulty in it, but I would see the difficulties

9 mainly in the ability of individuals to use the law to

10 their extent because we don't all have a team of

11 lawyers that have offices in other countries.

12 6772 COMMISSIONER McKENDRY: Just to make

13 sure I understand, there are two elements to the

14 solution you see. One is the international copyright

15 law enforcement that will deal essentially with

16 corporations, businesses using creators' works for

17 profit and then there is the interaction between the

18 individual consumer end user of the works that your

19 members create and the creators in an electronic

20 commerce environment.

21 6773 Is that essentially how you see the

22 world unfolding?

23 6774 MR. SANDMARK: Somewhat, although I

24 would say on the large side, the large companies are

25 rightsholders. They purchase the rights to a lot of




1 materials. In some sense the law favours those large

2 companies right now.

3 6775 Hopefully in the next phase of

4 copyright they will recognize that inasmuch as the law

5 must cover the Internet because it is global that they

6 give a bit more teeth -- I'm not sure of the exact

7 mechanism it is going to take, but something that is

8 going to allow individuals to exercise their rights.

9 6776 COMMISSIONER McKENDRY: Let me ask

10 you for a moment about the use of French on the

11 Internet.

12 6777 We have heard some concerns that the

13 Internet is overly dominated by English and that there

14 isn't a sufficient amount of French content on the

15 Internet. Is that something that your members have

16 thought about?

17 6778 MR. SANDMARK: We are a bilingual

18 organization. Our Web site is French and English. Our

19 newsletter is. So it's an official policy for us.

20 6779 I can speak for the groups in Quebec

21 that are actively pushing to support the creation of

22 content in French. I think the reason that it is

23 English comes from where the Internet originated. It's

24 for sure an American invention as developed.

25 6780 Now it has become totally global and




1 I think that we are seeing a transformation of that. I

2 don't think it's nearly as English as it used to be.

3 6781 You can also translate your work on

4 the Internet. It's a fairly rough translation. You

5 had better be familiar. I actually use it to

6 translate. I received an e-mail in Italian. I didn't

7 know what it said, so I translated it. Alta Vista has

8 a translation device on their page. I translated it

9 into English. "Oh, that's what they're talking about".

10 6782 I think computer translation software

11 is only going to get better. The Internet may actually

12 break down language barriers and not simply become an

13 English dominated medium.

14 6783 COMMISSIONER McKENDRY: I have used

15 that translation feature as well. It has a way to go,

16 I think, in terms of being an effective translation

17 tool, although it is obviously a start.

18 6784 If I just revisit your answer for a

19 moment. I take it you see as the Internet expands

20 globally and becomes more widespread, in fact other

21 languages than English will start to find their place

22 on the Internet.

23 6785 MS McCANN: I think one way of

24 looking at Canadian policy, government policy, around

25 the Internet is ways of stimulating presence, so




1 presence for French language content on the Internet,

2 presence for aboriginal language content, and what

3 things can be put in place in order to ensure that.

4 6786 Rather than to regulate it, to

5 stimulate the presence, given the unlimited bandwidth.

6 6787 COMMISSIONER McKENDRY: Do you have

7 any thoughts about what can be done to stimulate the

8 presence? Is it merely just the expansion of the

9 Internet will be a sufficient stimulation or are there

10 other initiatives that one could take?

11 6788 MS URBANOSKI: Well, the Internet is

12 going to expand whether we want it to or not. It's

13 beyond us to attempt to discuss that. To stimulate

14 content is probably the most important thing that can

15 be done.

16 6789 I use this analogy of how in real

17 estate they say "Location, location, location". On the

18 net we say "Content, content, content". It doesn't

19 matter who you are or where you are positioned on the

20 web or how big your budget is for promotion, if we

21 don't have good content, if what you are saying isn't

22 relevant, it won't fly.

23 6790 The encouragement of content creation

24 presence is extremely important. We referenced earlier

25 the creation of a fund from a percentage of ISP




1 profits. That would be a very tangible way to

2 encourage original content and Canadian content.

3 6791 MR. SANDMARK: Can I just add. This

4 is an important issue for us. I think just in terms of

5 our recommendation about creating a fund that we leave

6 it to you to really see where that levy should be

7 placed. It's not quite clear. It should be placed

8 where it's affordable, like who is making the large

9 profit. That's the question.

10 6792 It is going to expand. There is a

11 lot of money being made at some point. It may not be

12 with some of the ISPs because a lot of the Internet

13 service providers are not that large. That's why

14 there's a limit on it. Also, the problem is that it's

15 a very competitive business, the Internet service

16 providers, so the margins of profit are smaller and

17 smaller.

18 6793 I suspect that it may actually be

19 more with the actual carriers, the telephone companies

20 and the cable companies, that are going to be having

21 the high traffic on their backbones. I suspect that's

22 where the money should come from. They're profiting

23 off of Canadians looking at content from around the

24 world.

25 6794 If we want to return something back




1 to Canadians to produce Canadian content, I think

2 that's something you should look at.

3 6795 MS URBANOSKI: I just want to add,

4 although I said I don't like to make predictions, I

5 will say that one way that the Internet, unfortunately,

6 appears to be going is to an increasing amount of

7 so-called portals which are often also called gateways.

8 6796 Portals are large Web sites that are

9 basically indexes of material that has been gathered by

10 one particular corporation or group of individuals that

11 address a particular mandate or editorial policy.

12 6797 I have a particular problem with

13 portals in that they do tend to be censored. They tend

14 to, as I said earlier, fill a particular mandate. They

15 tend to be primarily pulled together in order to get

16 those advertising dollars and make money.

17 6798 What's happening in terms of how do

18 we encourage production of content is often how do we

19 discourage things from happening like the amassing of

20 huge portals of Web sites that are just indexes of

21 thousands of lives spent or supposedly fulfilling the

22 Canadian content mandate, but are in fact bypassing any

23 creative control or copyright -- well, creative

24 control. I will leave it at that.

25 6799 We could talk about that later.




1 6800 There is some concern about the lack

2 of diversity that we see on portal sites. They do tend

3 to be homogenized. I find it interesting because the

4 portal sites are often used as an example of how we can

5 encourage content.

6 6801 I would argue that yes, perhaps they

7 encourage production of content, but it's content that

8 is of a very specific generally non-diverse and very

9 homogenized manner. Okay?

10 6802 MS McCANN: What would be the

11 solution then to the problem you are identifying with

12 portals?

13 6803 MS McCANN: With new media fund, for

14 instance, it could be encouraging the creation of

15 intelligent, broad ranging, diverse -- imagine portals

16 that stimulate, that create links to aboriginal

17 language Web sites, that create links to all sorts of

18 things, so they can be specific presences.

19 6804 But working under notions of free

20 speech and anti-censorship and principles and

21 principles that are responsible and intelligent rather

22 than market driven.

23 6805 COMMISSIONER McKENDRY: Just on the

24 portal issue, help me with this a bit. A subscriber to

25 an Internet service isn't bound to any particular




1 portal. As I understand it, one can use as a home page

2 literally any Web site.

3 6806 Is that something the more education

4 of people that use the Internet so that they understand

5 that they're not bound to the particular portal? Is

6 that a solution?

7 6807 MR. SANDMARK: Sure. That's

8 certainly good. I think what our concern is someone

9 might come forward and say "Well, what you need are

10 portals to direct people to Canadian content and we are

11 the people that do it for you and this is the portal".

12 6808 We are just a little concerned about

13 portals being, say, funded as a solution to Canadian

14 content.


16 understand then. Your primary concern is we might

17 recommend that particular portals or portals in general

18 should receive some funding as opposed to the actual

19 content.

20 6810 MR. SANDMARK: As opposed to let's

21 fund the content creation and let's let the portal

22 thing solve itself. I believe people are intelligent

23 and can figure out that a portal is just one way of

24 finding content on the web.

25 6811 Generally people after a little while




1 turn off the Netscape home page or go to something

2 else. Also, I think the problem is that portals will

3 sort of pitch themselves, what Sheila was saying, as

4 the one-stop shop for the Internet. "You can come to

5 us and you we'll find everything".

6 6812 I think people will discover they are

7 not getting everything through this portal. That's

8 what Penny was also saying to.

9 6813 It's a subtle form of censorship or

10 could be. That's our concern.

11 6814 COMMISSIONER McKENDRY: So you are

12 not suggesting we regulate portals if we do make

13 ecommendations to support Canadian content, that we

14 direct our efforts towards funding of the content.

15 6815 Just let me finish up with a question

16 about that. Some have suggested to us that if ISPs are

17 required to contribute to their profits to the fund

18 that some ISPs might decide to operate from the United

19 States, for example, from some other country than

20 Canada. Do you see that as a concern?

21 6816 I noticed earlier you talked about

22 well perhaps we should reconsider the ISP and look at

23 cable companies and telephone companies. Is that where

24 you are headed now?

25 6817 MR. SANDMARK: I hope that you have




1 access to all the information. It's a complicated

2 equation. I don't feel I have all the facts. It's a

3 shifting business. At one point I might have said

4 ISPs. Now I'm not so sure.

5 6818 It has become extremely cut-throat

6 competitive and the prices dropped down. We are not

7 against low cost access. I do suspect and I think that

8 you probably have access to the financial information

9 you need to make that decision, where in this economy

10 from ISP to the carrier to the advertiser -- I don't

11 know exactly.

12 6819 I suspect that eventually once the

13 traffic is high enough and once the networks are in

14 place, I mean we mustn't forget the government has

15 invested quite a lot in building a broadband network.

16 Once those networks are in place and companies are just

17 collecting fees for the traffic on them, it seems to me

18 they should be able to return something to the Canadian

19 public.

20 6820 MS URBANOSKI: I also wanted to add

21 that the concern about ISPs going south is a bit moot

22 because it always comes down to the fact that we use

23 e-mail specifically so that we use a local phone

24 number.

25 6821 There are some American based or even




1 Europe based ISPs that offer the services in Canada, or

2 actually they used to, but you have to dial up a 1-800

3 number. Of course, they found that they lost so much

4 revenue by having everybody dial up the 1-800 numbers.

5 That idea kind of fritzed.

6 6822 Let's make it clear that even if an

7 ISP is based in another country, they still require a

8 local phone service in order for an individual to dial

9 up. Right? That might be an avenue to explore in

10 terms of funding.

11 6823 There has been a lot of speculation

12 as to where money could come from, a combination of

13 public and private sector, perhaps accessing some of

14 the tremendous revenues from e-commerce and also from

15 search engines. I would argue you would have to have

16 an entire Commission on that issue alone.

17 6824 Whether the ISPs or IMPs, whether the

18 telecommunications systems, whether the search engines

19 that are out there, there's definitely some possibility

20 of a fund being pulled together to create original

21 content.

22 6825 COMMISSIONER McKENDRY: I said that

23 was going to be my last question. It wasn't. This one

24 will be though. Perhaps it's a good way of ending our

25 conversation.




1 6826 I take it from your perspective in

2 recalling what you talked to us about in the TV policy

3 hearing that in a sense the conventional broadcasting

4 system is a bottleneck for your members and the

5 Internet is really just the opposite of that. It is a

6 widening of horizons, almost limitless horizons for

7 you, and that's the essential difference perspective of

8 your members with respect to the Internet. Is that

9 right?

10 6827 MR. SANDMARK: Yes, and to go just

11 one step further. We think this offers a great

12 opportunity for Canada, if I can just -- like if we get

13 on the ball and support creators creating work, we are

14 going to be exporting it around the world.

15 6828 It's a question of presence and

16 getting the work created out there and made and shown.

17 I think it's a great opportunity but we shouldn't sit

18 on it. We should act.

19 6829 COMMISSIONER McKENDRY: Thank you

20 very much.

21 6830 MR. SANDMARK: Thank you.

22 6831 We wanted to say a lot of this at our

23 last presentation, but we thought we better save some

24 for today.

25 6832 COMMISSIONER McKENDRY: I'm glad you




1 did. Thanks.

2 6833 MR. SANDMARK: Thank you very much.

3 6834 THE CHAIRPERSON: Thank you,

4 Commissioner McKendry.

5 6835 Just one question from me and I think

6 counsel might have a question or two.

7 6836 Picking up on this last point that

8 you discussed with Commissioner McKendry on the issue

9 of this fund or creating a fund or adding to additional

10 funds for the creation of content.

11 6837 Have you thought about the issue of

12 by what authority the Commission would levy some sort

13 of a fee against ISPs or other undertakings in order to

14 contribute to this fund?

15 6838 MR. SANDMARK: I guess it wouldn't be

16 under the Broadcast Act. The Telecommunications Act?

17 1000

18 6839 I sort of feel that that would be the

19 hard work to do.

20 6840 THE CHAIRPERSON: So it would be your

21 view that we should levy a fee under the

22 Telecommunications Act to support the establishment or

23 creation of funds for that purpose?

24 6841 MR. SANDMARK: I really feel that you

25 must be in a better position than I am to make that




1 decision.

2 6842 THE CHAIRPERSON: Okay. Fine, we

3 will leave it at that.

4 6843 MS McCANN: I actually have a

5 comment. I think the fact that you are asking this

6 question shows the difficult position in a sense the

7 CRTC is put in. And I have a question regarding the

8 role of Canadian Heritage within this whole purview and

9 funding the stimulation of content creation on the

10 Internet. And it seems to me that the Canadian

11 government has a fundamental role to play.

12 6844 I know that you cannot do anything

13 about that, but I just wanted for the record to state

14 that, that it puzzles me and concerns me that there is

15 no leadership in this area from the Canadian government

16 in that regard.

17 6845 THE CHAIRPERSON: Counsel?

18 6846 MS MOORE: Thank you, Mr. Chairman.

19 6847 You state that although currently in

20 Canada there are a number of private and public funds

21 available to people for the development of multimedia,

22 these funds are not easily accessible to independent

23 and individual artists. Could you please elaborate on

24 how independent and individual artists are excluded

25 from these funds? And could you also indicate whether




1 there should be, in your view, specific new media funds

2 dedicated to artists?

3 6848 MS URBANOSKI: Well, I would like to

4 make the point that there are some funds that are

5 currently available for individual artists who work in

6 new media, to access, for example, through the Canada

7 Council for Creative Development and Production a new

8 media fund. Although that is limited. And it is

9 problematic in that it often -- it is more effective

10 with people who have a long background in new media

11 which has been almost an impossibility.

12 6849 In terms of public -- sorry, private

13 funding, this is news to me. I know that there are

14 some initiatives taken by certain groups like Sympatico

15 to fund the creation of original content. I know that

16 Microsoft Network used to do that.

17 6850 But I am hardpressed to come up with

18 many examples of how the private sector has funded

19 truly original content.

20 6851 MS McCANN: The Stentor fund offered

21 great promise. However, it tends to -- it funds

22 national, large, large projects that individual artists

23 cannot access. But what recently happened, an exciting

24 initiative is the Banff Centre for the Arts access

25 money through the Stentor fund in order to create, in




1 order to in turn fund individual artists to create

2 content for the web.

3 6852 So that is a particular initiative

4 that turned disadvantage for individuals to advantage

5 and so that has just been announced in the last month.

6 6853 MR. SANDMARK: Another example is the

7 Telefilm Canada. They have a multimedia fund.

8 However, it is difficult for artists or individuals to

9 access and you have to be a corporation. Second, it

10 was aimed to assist companies in producing a corollary

11 multimedia product in association with a feature film

12 or television show.

13 6854 So it was not designed only for

14 multimedia content creation. And so that made it,

15 again, very difficult for individuals. I mean,

16 independent film makers are not making a CD-ROM game to

17 go along with their film.

18 6855 So, so far, we are not seeing -- that

19 fund just helps Alliance Alanis to create a CD-ROM game

20 for Urban Angels -- I don't know. Anyway, does that

21 answer your question, somewhat?

22 6856 MS URBANOSKI: We could always access

23 venture capitalists which is, you know, when we are

24 talking about people who will seriously say to me:

25 Well, I am interested in your product, if you can show




1 me that next year you are going to have a $1 million

2 profit, and I am saying: Well, this is an artist

3 creative project and does not have a product at all,

4 then let us say that I am shown the door pretty

5 quickly.

6 6857 We do not get a tremendous amount of

7 support for creating original artistic content for the

8 web, okay.

9 6858 MS MOORE: If I can just clarify for

10 the record, one of the concerns that you have are firms

11 which have an eligibility criteria stating that the

12 applicant must be a corporation. And you see that as a

13 concern from the perspective of individual artists.

14 6859 MR. SANDMARK: It runs counter to the

15 concept we introduced the pyjama revolution. Like, we

16 are serious about this. Individuals, the computer and

17 the Internet really empower individuals to produce

18 content that can be seen around the world.

19 6860 So I have to incorporate. You know,

20 I am on the verge of incorporating. As an individual,

21 I have to incorporate in order to access certain

22 funding. I do not think that is really necessary.

23 6861 I think also that we like to point

24 out that a lot of the innovative work that has happened

25 in the last few years in this whole computer




1 revolution, I am talking about software and content

2 creation stuff came from small groups of people. And

3 that is where the innovation and the -- that is what is

4 driving a lot of this Internet revolution, small groups

5 of people, later they become a large corporation and

6 all the original members sell out their shares and make

7 millions and they are all funding arts programs down in

8 the States.

9 6862 That is where the individual -- the

10 initiative that people can create just on their own is

11 extremely remarkable. And I think that is something

12 that has to be recognized and supported.

13 6863 MS McCANN: So in other words, any

14 fund should not be based entirely, should not be profit

15 for profit content. It is content. It does not have

16 to be linked to a dollar -- to revenue earned from it.

17 6864 And I think that that is the critical

18 point that we support. We support artistic creation of

19 work for the Web and not solely product creation.

20 6865 MR. SANDMARK: If I can just add one

21 point to that, I know that we are over time, but very

22 simply that because of the international, and creative

23 niche market, we are involved in a whole different

24 economic model.

25 6866 In other words, I think that is the




1 problem here, that the economic models that these

2 funding programs are based on are larger scale. And

3 what we are saying is that it is possible for

4 individuals to reach the audience they need to support

5 themselves internationally. I only need to have 50,000

6 people paying me a dollar a year to see my work and I

7 can live and create and continue to create work. That

8 is certainly feasible. And that is what we are -- that

9 is what we are faced with. The potential is there, but

10 not if our only model that we are looking at

11 economically is the corporate model of a multimillion

12 dollar company.

13 6867 MS MOORE: Thank you. Those are my

14 questions.

15 6868 THE CHAIRPERSON: Thank you counsel.

16 Well, appreciate you making your point here this

17 morning.

18 6869 As it happens, we have Telefilm

19 appearing next. So you may want to stick around to

20 hear their answers and they may wish to address the

21 concerns that you have raised here this morning.

22 6870 Thank you very much.


24 6871 M. deREPENTIGNY: Bonjour, Madame

25 Bertrand, Messieurs et Mesdames les Conseillers. Mon




1 nom est Guy deRepentigny. Je représente aujourd'hui

2 Téléfilm Canada à titre de directeur des Politiques, de

3 la Planification et de la Recherche. Je suis

4 accompagné, à ma gauche, de M. Gilles Boulet,

5 spécialiste en multimédia, clairement un de nos experts

6 à l'intérieur de la boîte.

7 6872 Le directeur général par intérim,

8 Peter Katadotis, vous prie d'excuser son absence

9 aujourd'hui. Il est allé voter, et vous savez sans

10 doute que dans l'univers de la télé ces jours-ci il se

11 passe plein de choses qui captent beaucoup l'attention

12 de Peter et qui mobilisent beaucoup de ses énergies.

13 Vous en saurez plus long sans doute dans les prochaines

14 semaines à ce sujet-là.

15 6873 Je voulais vous remercier de nous

16 offrir l'occasion de comparaître devant vous pour

17 partager nos vues et notre expérience sur les nouveaux

18 médias tels que nous les avons développés au cours des

19 trois dernières années avec l'appui de notre conseil

20 d'administration.

21 6874 Permettez-moi de vous rappeler que

22 notre programme expérimental mis en place il y a trois

23 ans en vue d'aider la production et l'édition d'oeuvres

24 multimédias canadiennes, s'est avéré une des premières

25 sinon la première initiative fédérale pour assurer la




1 création de contenus multimédias destinés au grand

2 public canadien et évidemment à l'étranger.

3 6875 We are here today in our capacity as

4 the administrator of the federal government's new

5 multimedia fund created in July 1998, by the Honourable

6 Sheila Copps. As we said in our written submission to

7 the Commission, the industry is in its infancy, but

8 this is an exciting time for creators of new media

9 content. Exciting because, as one observer noted, we

10 are living in an interactive age and the creators of

11 new media content are the new storytellers of this age.

12 Exciting also because more and more Canadian new media

13 content is being developed with the help of Telefilm's

14 fund and other funds.

15 6876 We have supported over the past three

16 years approximately 70 projects so far at the

17 development stage, production stage as well as

18 distribution and marketing.

19 6877 In addition, we have supported the

20 Canadian participation to major international events

21 such as Melia, in France, and E-3, which we feel is an

22 industry initiative that brings more promotion and

23 visibility to our content producers and distributors.

24 6878 Our experience to date tells us that

25 Canada has the creative talent to become leaders in




1 this industry. There are, of course, many challenges.

2 6879 First, it is our view that

3 development support is critical if producers are to

4 attract financing for projects both domestically and

5 internationally.

6 6880 Second, multimedia producers require

7 access to additional financing for production via

8 private and public funds, venture capital funds and

9 perhaps a tax credit as now exists for film and

10 television production.

11 6881 Third, there is the issue of access

12 by producers to distribution channels. Imaginative

13 solutions are needed in terms of marketing and

14 promotion strategies to ensure that there is shelf

15 space for Canadian content on the Internet and retail

16 stores.

17 6882 Nous sommes en accord avec le

18 principe que tous les joueurs impliqués dans les

19 nouveaux médias contribuent au développement et à la

20 production de contenus canadiens. Comme nous le

21 mentionnions dans notre mémoire, les distributeurs en

22 ligne ont besoin de contenus multimédias de grande

23 qualité. Il est donc dans leur intérêt de veiller à ce

24 qu'une masse critique de contenus soient produits et

25 rendus accessibles.




1 6883 À cet égard, nous croyons que c'est

2 le rôle du Conseil d'identifier, dans les limites de

3 son champ d'intervention, les sources de financement

4 possibles qui pourront alimenter la croissance de

5 l'industrie canadienne.

6 6884 One of the goals of Telefilm's

7 multimedia fund is to assist in the growth and

8 development of a Canadian multimedia production and

9 distribution industry that is competitive in national

10 and international markets. We believe that new media

11 products must be competitive internationally and that

12 partnerships are essential. Co-productions should be

13 fostered with other countries and continued promotion

14 of Canadian new media products in international markets

15 which provide Canadian companies with access to foreign

16 markets should be strengthened.

17 6885 As the commission is aware, when we

18 talk of the new media marketplace, we are really

19 talking about a global new media marketplace. The

20 Internet is, after all, borderless. Therefore, it is

21 important when developing public policies for new media

22 that we develop them in the context of this global

23 marketplace which we believe can contain distinctively

24 Canadian new media content but which is also

25 universally appealing and viable.




1 6886 En terminant, j'aimerais vous dire

2 que le présent forum constitue bien sûr une façon des

3 plus appropriées pour le Conseil d'obtenir les vues de

4 l'industrie sur les nouveaux médias. Mais plus encore,

5 j'estime qu'il fournit à l'ensemble des joueurs une

6 occasion -- ma foi, une première -- exceptionnelle de

7 partager entre eux leurs connaissances de ce secteur.

8 En bout de piste, je suis convaincu que tous, non

9 seulement le CRTC mais tous les autres, y trouveront

10 des bénéfices significatifs.

11 6887 Au nom de Téléfilm Canada, nous vous

12 remercions à nouveau de nous avoir offert l'occasion de

13 comparaître et de vous faire part de nos vues sur ce

14 secteur rempli de promesses mais aussi d'incertitudes.

15 6888 Thank you and we will now answer your

16 questions. Merci.

17 6889 THE CHAIRPERSON: Thank you for your

18 presentation. I will turn the questioning to

19 Commissioner Bertrand.


21 messieurs. Ça me fait plaisir de commencer la journée

22 avec vous ce matin, puis en français.

23 6891 Je ferais le lien tout de suite... je

24 n'avais pas l'intention de vraiment explorer cette

25 question, mais faisant suite à la question du




1 conseiller McKendry tantôt par rapport à l'Alliance,

2 quelle est la situation des nouveaux médias en langue

3 française?

4 6892 M. BOULET: Si on se fie, bien sûr,

5 ou si on regarde un peu ce qui s'est passé au niveau

6 des projets qui ont été reçus au Fonds pour les

7 multimédias ou au programme expérimental à Téléfilm

8 Canada, nous avons reçu un très grand nombre de projets

9 à ce niveau-là en langue française. Il faut bien dire,

10 cependant, qu'une assez importante partie des projets

11 que nous avons reçus en langue française sont en fait

12 également produits en langue anglaise.

13 6893 Donc une importante partie de la

14 production du Québec est produite en français et en

15 anglais, et ce, c'est particulièrement vrai, bien sûr,

16 pour les productions hors ligne de type CD-ROM. Les

17 productions en ligne sont souvent davantage destinées

18 pour le moment à un marché local, mais on peut

19 constater cependant aussi, de par le grand nombre de

20 projets que nous avons reçus et la diversité des

21 maisons de production, donc des producteurs

22 multimédias, que ce potentiel de production en langue

23 française existe très certainement de par la capacité

24 de production de l'industrie.

25 6894 Beaucoup de ces maisons de




1 production -- et ça je pense que ça vous a été dit --

2 produisent également ou en fait vivent en quelque sorte

3 économiquement de productions corporatives, mais le

4 potentiel de production est très certainement là.


6 6896 Quand vous regardez... et je viens là

7 puiser à même vos connaissances, parce que vous

8 connaissez bien sûr là où vous êtes impliqués en termes

9 des investissements que vous avez faits, mais aussi

10 vous avez une place de choix en termes de témoins du

11 développement des nouveaux médias. Alors, c'est un peu

12 ça que je viens chercher.

13 6897 Certains estiment à peu près à 3 pour

14 cent la proportion en langue française de sites à

15 l'Internet. Quelle est votre évaluation de la

16 situation?

17 6898 M. BOULET: C'est-à-dire que oui, 3

18 pour cent; un pourcentage est exact. Si on a un

19 contre-pourcentage, 3 pour cent de quoi? Est-ce que

20 c'est 3 pour cent de la production internationale?

21 Est-ce que c'est 3 pour cent de la production

22 canadienne? À ce niveau-là, c'est plus difficile:

23 Est-ce que 3 pour cent de la production mondiale, je

24 dirais de l'offre globale d'Internet est en langue

25 française?




1 6899 Je n'ai pas de données. Je ne peux

2 pas vous fournir de données précises à ce niveau-là

3 immédiatement, mais très certainement, en termes de

4 production francophone, je pense que c'est assez

5 documenté à ce niveau-là que la production francophone

6 en langue française, qui est produite, qui émerge, qui

7 émane du Canada est, elle, très importante en fait.


9 proportion de ce qui existe en français.

10 6901 M. BOULET: En français, exactement.


12 statistique... et c'est un des problèmes d'ailleurs que

13 plusieurs ont mentionnés au cours de l'audience et dans

14 les mémoires écrits, qu'il y a peu de données fiables à

15 ce moment-ci. Il n'y a pas de mesures. Statistiques

16 Canada évidemment ne nous donne pas l'état des choses

17 et il n'y a pas de statistiques internationales non

18 plus. Donc on est un peu dans le doute quant aux

19 chiffres qu'on avance. Mais il y aurait, selon

20 certains, 5 pour cent de sites canadiens au plan

21 international.

22 6903 Est-ce que c'est votre appréciation

23 des choses? Est-ce que ça ça semble plus précis comme

24 donnée?

25 1015




1 6904 M. BOULET: Effectivement, comme vous

2 l'avez très bien dit vous-même, il est très difficile

3 d'avoir des données extrêmement fiables à ce niveau-là,

4 mais si on fait le recoupement d'un certain nombre de

5 données, oui, c'est plausible que ça se situe à ce

6 niveau-là, effectivement, si on parle bien sûr de la

7 production ou de l'offre de produits en ligne,

8 Internet.


10 votre point de vue, vous qui tentez de venir soutenir

11 cette industrie naissante, avez-vous l'impression,

12 comme plusieurs disent, qu'il n'y a pas avec les

13 nouveaux médias de problème d'accès, il n'y pas de

14 problème d'offre? Il peut y avoir des petits

15 ajustements pour lesquels il pourrait y avoir des

16 petites mesures légères, mais de penser à une approche

17 un peu plus complexe et, disons, structurée comme on

18 connaît celle qui a prévalu dans le domaine de la

19 radiodiffusion des télécommunications, ce ne serait pas

20 nécessaire compte tenu de l'abondance de l'offre.

21 6906 M. deREPENTIGNY: A ce sujet-là,

22 Madame Bertrand, une des choses qu'on observe -- et je

23 pense qu'il y a un point de vue assez partagé parmi les

24 intervenants que vous avez rencontrés -- c'est que le

25 modèle d'affaires en quelque sorte n'est pas encore




1 parfaitement façonné, contrairement au stade de

2 maturité dans lequel on retrouve aujourd'hui l'univers

3 de la télé et celui du long métrage, où les liens

4 d'affaires, le modèle économique est bien développé.

5 6907 Ici, dans l'univers des nouveaux

6 médias, en tout cas dans ce que nous, on contenait, les

7 produits multimédias tant en ligne que sur support CD-

8 ROM, le modèle n'est pas encore parfaitement façonné.

9 Pour cette raison-là, on estime, bien que ce ne soit

10 pas dans notre champ d'intervention, que la prudence

11 s'impose. C'est ce qui nous a guidés d'ailleurs dans

12 notre intervention il y a trois ans d'accompagner, à

13 titre de joueur gouvernemental, le développement de

14 l'industrie, de bien s'assurer de voir à partager les

15 enjeux et de bien s'ajuster à la situation. Quant à la

16 façon d'assurer un accès, ça nous semble, de façon

17 générale, je dirais un peu prématuré.

18 6908 Ma réponse est prudente, mais je

19 pense qu'elle est un peu en ligne avec ce qu'on voit de

20 l'industrie et des signaux qui nous sont lancés de nos

21 relations avec les joueurs.

22 6909 LA PRÉSIDENTE DU CONSEIL: Dites-moi,

23 vous avez, vous dites, financé au cours de ces trois

24 années là 70 projets. Dans le mémoire écrit vous dites

25 que ce sont essentiellement des produits CD-ROM, très




1 peu d'initiatives vraiment en ligne.

2 6910 Quels sont ces projets-là et combien

3 étaient en ligne, c'est-à-dire combien de files

4 d'attente aviez-vous, pour utiliser un terme qu'on

5 connaît dans le domaine de la télévision.

6 6911 M. de REPENTIGNY: Qu'on connaissait.


8 est de quel ordre? Et j'aimerais savoir un peu qui

9 sont ces joueurs-là, pour qu'on apprenne un peu à

10 profiter de votre expérience.

11 6913 M. deREPENTIGNY: Je vais vous faire

12 un petit commentaire général et je laisserai le soin à

13 Gilles de vous donner un peu de détails sur les

14 projets.

15 6914 Une grande observation du côté des

16 produits en ligne -- et je reviens à ce que je vous

17 disais il y a une minute à peine à propos du modèle

18 d'affaires -- c'est que, contrairement au CD-ROM, il

19 est particulièrement difficile de prévoir l'état de la

20 demande et donc d'actualiser en quelque sorte les

21 revenus possibles d'une telle initiative d'affaires.

22 6915 Contrairement au CD-ROM, qui est un

23 modèle d'affaires qui est quand même un petit plus

24 développé -- ça fait quand même plusieurs années

25 maintenant qu'il y a de tels produits sur les




1 tablettes, il y a une expertise qui s'est développée

2 là-dedans et il y a des institutions financières qui

3 sont mieux en mesure d'évaluer le risque -- ce qui se

4 produit du côté de l'Internet, c'est que pour financer

5 grosso modo le modèle qu'on voit en télévision à

6 travers la commandite, la publicité ne s'est pas encore

7 parfaitement reproduite. Pourquoi? Parce que, bon, la

8 pénétration du marché n'est pas encore très, très

9 forte, les annonceurs possibles ou les commanditaires

10 de tels produits qui, dans le fond, sont les financiers

11 principaux d'une telle aventure, n'ont pas encore

12 vraiment embarqué de plain-pied dans ce secteur-là.

13 Donc, de façon générale, la difficulté de financer de

14 tels produits explique en bonne partie les proportions.

15 6916 Là, je laisse le soin à Gilles de

16 vous dire un peu, dans les projets que nous avons

17 reçus, les proportions et ce qui s'est passé.

18 6917 M. BOULET: Allons-y d'abord, si vous

19 me le permettez, par des données quantitatives très

20 courtes.

21 6918 Pour le Fonds pour le multimédia,

22 combien de projets avons-nous reçus à Téléfilm Canada

23 depuis l'annonce de ce fonds en juin 1998? Nous avons

24 reçu 116 projets pour des demandes totales d'un plus de

25 8 500 000 $, 8 600 000 $ pour être très précis. Donc




1 c'est la situation actuelle au niveau du fonds comme

2 tel.

3 6919 Ces demandes-là, ça varie puisque le

4 programme a trois volets. Elles sont soit en

5 développement, soit en production, soit en mise en

6 marché.

7 6920 Pour ce qui est du type de

8 productions ou du type de projets que nous avons reçus,

9 il est exact de dire que, si on se reporte à il y a

10 deux ans, au moment de la première année du fonds, du

11 programme expérimental, la très grande majorité des

12 projets qui nous ont été soumis étaient des projets

13 effectivement de production sur CD-ROM.

14 6921 On remarque, et on remarque

15 constamment depuis ce moment-là -- et c'est

16 particulièrement vrai avec le Fonds pour le

17 multimédia -- une augmentation du nombre de projets sur

18 Internet, de projets en ligne, ou de projets hybrides,

19 c'est-à-dire de CD-ROM, ce qu'on appelle des CD

20 branchés généralement. Donc, il y a eu une

21 augmentation quantitative importante. Alors que la

22 première année c'est peut-être au maximum 10 pour cent

23 des projets qui avaient un volet réseau, actuellement,

24 dans l'état actuel des choses, c'est environ 35 pour

25 cent des projets qui sont déposés qui sont soit en




1 ligne complètement ou soit CD branchés, donc qui ont

2 une composante locale réseau. Donc il y a eu une

3 évolution à ce niveau-là.

4 6922 Ça s'explique bien sûr aussi puisque

5 le programme de Téléfilm est un programme de prêts,

6 donc il y a un aspect rentabilité commerciale, bon, qui

7 fait partie inhérente des projets qui nous sont soumis.

8 Et, comme M. deRepentigny l'a dit, il est certain que

9 le modèle commercial pour la production en ligne en ce

10 moment est moins bien défini, moins clair.

11 6923 Qui sont les producteurs? Qui sont

12 nos clients? Généralement ce sont, dans la très

13 grande, très, très grande majorité des cas, des

14 entreprises qui font exclusivement de la production

15 multimédia. Ce sont de petites, enfin, ce qu'on

16 définit comme de petites et moyennes entreprises,

17 davantage petites. Je vous dirais, en termes de nombre

18 d'employés, ça peut varier un peu; ça peut aller de 15

19 à 50 employés permanents environ, mais c'est à peu près

20 la taille des maisons de production qui soumettent des

21 projets au Fonds pour le multimédia.

22 6924 Ce sont souvent des producteurs qui

23 ont un volet de production corporative, si je puis

24 dire, production de sites Internet ou de CD-ROM pour

25 des clients corporatifs, et qui désirent bien sûr




1 diversifier, si je puis dire, leur expertise et leur

2 offre de services en allant vers la production grand

3 public, la production culturelle.

4 6925 Quant au type, maintenant, quant au

5 genre de production, le genre de demandes que nous

6 avons vues, les types de projets que nous avons

7 soutenus, c'est assez vaste à ce niveau-là. Je vous

8 dirais que ça va des applications davantage ludiques,

9 ludo-éducatives, à des ouvrages de référence sur des

10 sujets canadiens, que ce soit peintres, ouvrages de

11 référence, ouvrages documentaires interactifs; donc

12 c'est assez large à ce niveau-là, au niveau de la

13 brochette, si je puis dire, des genres ou des projets

14 que nous avons soutenus.

15 6926 De même, pour les publics, on a eu un

16 bon nombre de projets pour jeunes publics

17 particulièrement dans le créneau ludo-éducatif, trois à

18 cinq ans, cinq ans à dix ans, un peu pour les

19 clientèles adolescentes, jeunes adultes, et clientèles

20 davantage adultes, et à ce niveau-là davantage, sans

21 doute, au niveau des ouvrages de référence. Donc c'est

22 assez large au niveau des genres qui ont été présentés.

23 6927 Donc voilà à peu près, je vous

24 dirais, rapidement tracé, le portrait.

25 6928 LA PRÉSIDENTE DU CONSEIL: Dans votre




1 expérience est-ce que vous avez vu des associations,

2 disons, avec le genre de productions que vous

3 connaissez au chapitre des activités par exemple en

4 télévision au cours des années? Est-ce que vous voyez

5 que ce sont les mêmes joueurs, d'autres filiales? Est-

6 ce que c'est alentour d'émissions existantes, des

7 produits audiovisuels existants, ou si c'est assez

8 divorcé comme réalité... enfin, pas divorcé au sens

9 qu'il n'y aurait pas eu mariage, mais je veux dire deux

10 univers mutuellement exclusifs d'une certaine façon?

11 6929 M. BOULET: Les univers ne sont pas

12 nécessairement et par définition mutuellement

13 exclusifs, mais il est certain que dans les projets que

14 nous avons reçus la très, très grande majorité des

15 projets étaient des projets purement multimédia, si je

16 puis dire, avec des maisons de production, des

17 demandeurs qui étaient effectivement essentiellement

18 des boîtes, des maisons, des entreprises de production

19 multimédia.

20 6930 Nous avons eu quelques projets qui

21 effectivement avaient une composante télévisuelle ou

22 cinématographique et où il y avait des partenariats qui

23 avaient été tissés entre des producteurs multimédia et

24 des maisons de production soit de télévision ou films,

25 long métrages ou autres, mais ce n'est pas, très




1 certainement, la grande majorité des projets que nous

2 avons reçus.

3 6931 Notre programme tel qu'il s'est

4 dessiné, si je puis dire, dans l'état actuel des

5 choses, en fonction des demandes, des projets qui nous

6 ont été soumis, est vraiment un programme qui sert une

7 clientèle multimédia, une clientèle qui est autre que

8 la clientèle traditionnelle de Téléfilm, si je puis

9 dire.


11 que vous voyez d'univers qui va maturer quand les

12 modèles d'affaires se préciseront et que, donc, il y

13 aura des modèles d'affaires et qu'il y aura de la

14 profitabilité, qu'est-ce que vous voyez au bout de

15 cette ligne-là? Est-ce que vous voyez encore les CD-

16 ROM? Est-ce que vous voyez que tout sera en ligne?

17 Est-ce que vous voyez une plus grande association du

18 monde conventionnel de la radiodiffusion?

19 6933 M. BOULET: L'évolution

20 technologique, d'une part, bien oui, plusieurs

21 disent -- et je pense que c'est fondé, que c'est

22 justifié -- que le support physique au fond a assez peu

23 d'importance, que c'est un état transitoire et que,

24 avec le déploiement éventuel des réseaux à large bande,

25 il n'y a pas véritablement de raison ou de besoin




1 d'avoir les objets physiques. On peut peut-être,

2 comment dire, tempérer un petit peu ça, c'est à dire

3 que les objets physiques pourront très certainement

4 exister, mais de moins en moins en objets fermés, de

5 plus en plus en réseaux ouverts.

6 6934 Pour moi, je pense que, oui, la

7 tendance réseau est une tendance lourde en ce moment.

8 Donc quel sera le modèle commercial à ce niveau-là qui

9 émergera? Je pense que nous irons inévitablement vers,

10 effectivement, une approche de plus en plus réseau.

11 6935 Est-ce que les réseaux de télévision

12 ou les producteurs indépendants ou enfin l'industrie de

13 la télévision ou du long métrage aura une plus grande

14 participation? Je pense qu'on peut le prévoir. Si on

15 regarde aussi ce qui se passe soit du côté américain,

16 soit du côté européen aussi, on voit quand même de plus

17 en plus de liens qui se tissent entre les productions

18 interactives et l'industrie du cinéma -- ça on le voit

19 particulièrement bien -- et entre l'industrie de la

20 télévision aussi, très certainement, et l'industrie des

21 médias interactifs. Je pense que ça aussi, c'est une

22 tendance lourde.

23 6936 Est-ce que ces partenariats se

24 développeront? Oui, ça, très certainement. De quelle

25 façon? C'est difficile de le dire pour le moment.




1 Quel sera le modèle, finalement, de partenariat ou

2 quelle sera la façon dont ces médias interactifs seront

3 développés? C'est un petit peu difficile, je pense, à

4 ce stade-ci de le prévoir mais très certainement on

5 peut prévoir des rapprochements; ça, oui, ça me semble

6 clair.

7 6937 M. deREPENTIGNY: Je vous dirais

8 aussi, Madame Bertrand, là-dessus -- et ça a été évoqué

9 durant l'audience précédente sur l'avenir de la télé

10 par certains joueurs; l'ACR entre autres l'a rappelé,

11 mais plusieurs autres -- que je pense qu'il est clair

12 que les nouveaux médias sont, dans le plan d'affaires

13 ou dans le plan stratégique, des joueurs avec qui vous

14 faites affaires dans les milieux plus conventionnels.

15 C'est sûr qu'ils sont campés dans leurs activités mieux

16 connues et c'est là qu'est le coeur de leurs affaires,

17 mais nos interlocuteurs du cinéma et de la télé sont,

18 on le sent, de plus en plus préoccupés par la question

19 de la convergence des médias et à plus long terme.

20 1030

21 6938 Quand on observe la production

22 canadienne à travers le Fonds canadien de télévision,

23 par exemple, il est certain que les modèles vont avoir

24 à se développer, pas dans les deux, trois prochaines

25 années mais après.




1 6939 D'abord, en termes de consommation,

2 qui est une préoccupation qu'on a, on décèle chez les

3 jeunes qui sont branchés à l'Internet une consommation

4 moindre de la télé. Alors ça, c'est la génération de

5 demain. Si cette génération-là regarde moins la télé,

6 que la fragmentation est davantage poussée, l'effet sur

7 les revenus des radiodiffuseurs, leur façon de livrer

8 la marchandise à leur clientèle tant en termes du

9 public que des commanditaires... on a du travail de

10 part et d'autre à faire là-dessus pour garder les yeux

11 bien ouverts. A long terme, c'est clairement une

12 préoccupation en tout cas chez Téléfilm Canada.


14 vous que ça devrait amener le Conseil à se questionner?

15 Plusieurs... enfin, les deux points de vue sont

16 présentés devant nous. Certains disent que le

17 pourcentage de contenu canadien et les argents qui sont

18 dévolus à ça dans le Fonds des câblos, par exemple,

19 pourraient aller ou bien au support de contenus de

20 nouveaux médias comme le support plus conventionnel.

21 6941 Est-ce que vous êtes de cet avis-là,

22 qu'on doive en effet encourager le mariage des deux

23 mondes de cette manière ou si encore, pour l'instant,

24 on doit... vous l'avez séparé, vous, chez Téléfilm,

25 mais...




1 6942 M. deREPENTIGNY: On l'a séparé pour

2 l'instant. Je vous dirais d'un côté que l'expérience

3 des dernières années en télé, en dépit des sommes qui

4 ont été consacrées, les fonds suffisent à peine à

5 répondre à la demande. Ça s'est traduit par

6 l'expérience connue le printemps dernier, et bien que

7 toutes les mesures seront mises en place pour éviter

8 une répétition des événements de l'an dernier l'an

9 prochain, parce que je pense que le système mis en

10 place va bien fonctionner, il en demeure pas moins que

11 les sommes qui sont consacrées à la télé, compte tenu

12 de la demande... et vous le savez, vous êtes à l'aube

13 d'accorder des licences à de nouveaux services

14 spécialisés qui vont accentuer les pressions qui vont

15 s'exercer sur le Fonds canadien de télévision

16 puisqu'ils y ont accès.

17 6943 Ma réponse, en clair, ce serait de

18 dire, oui, éventuellement, à terme, ça pourrait se

19 jumeler, la même convergence pourrait s'appliquer au

20 niveau des fonds, mais si ça se traduit par un effet

21 de... j' exagérerait en parlant de cannibalisation des

22 sommes existantes; je serais plutôt réticent. Je pense

23 qu'il faut plutôt penser à mêler les choses mais avec

24 des ressources additionnelles qui tiennent compte des

25 réalités du marché; autrement, ça va se traduire par un




1 saupoudrage encore plus accentué qui ne servirait pas

2 bien ni l'industrie du multimédia, des nouveaux médias,

3 ni celle de la télé conventionnelle, qui compte une des

4 grandes forces canadiennes.


6 les argents de côté et pensons, par rapport à vos

7 connaissances des deux mondes, est-ce que c'est à

8 encourager, disons, cette préoccupation pour aller

9 jusqu'à l'investissement du monde de la radiodiffusion

10 conventionnelle vers le monde plus nouveau de

11 l'Internet et des...

12 6945 M. deREPENTIGNY: Ce que je suis

13 tenté de dire -- et Gilles pourra compléter là-

14 dessus -- c'est que dans les discussions qu'on a pu

15 avoir avec nos interlocuteurs de la télé en

16 particulier, il n'y a jamais eu formellement un échange

17 de nos préoccupations à plus long terme. Pour des

18 bonnes raisons, on est généralement arrivés aux

19 réalités d'un renouvellement de fonds rapidement, à

20 s'assurer de mise en place de principes appropriés.

21 6946 Quant à favoriser l'accès, je pense

22 qu'à plus long terme la réalité d'affaires des

23 télédiffuseurs va se transformer de telle façon. Le

24 jour où les TVA, les Baton, les WIC de ce monde vont

25 distribuer leurs produits par des canaux autres, que




1 les réalités d'affaires vont être bien campées autour

2 de ça, je pense qu'on va être de mèche avec eux sans

3 aucun problème.


5 ne pensez pas qu'on a besoin de soutien à ça?

6 6948 M. deREPENTIGNY: Je vous dirais à ce

7 stade-ci, un peu comme nous, d'être particulièrement

8 attentifs à cette réalité d'affaires qui se développe

9 et qui va bouger extrêmement rapidement. Je pense que

10 Ken Goldstein, entre autres, qui est un des

11 observateurs de l'industrie, rappelait aux gens de

12 l'ACR à Vancouver dernièrement et disait: "Si vous

13 n'avez pas déjà un plan d'action très clair en matière

14 de convergence et de nouveaux médias, vous avez

15 littéralement quelques semaines pour vous y prendre

16 parce que la réalité de demain est définie aujourd'hui

17 et il est trop tard." Donc nous, je pense, à la fois

18 comme agences fédérales, tant le Conseil que Téléfilm,

19 on doit être très vigilants là-dessus et suivre ça.

20 6949 Encourager? Je suis prudent à ce

21 stade-ci.


23 Parlons des autres fonds. Sortons du fédéral et allons

24 vers les fonds privés. Vous dites que le Conseil

25 devrait trouver des façons de permettre... enfin,




1 permettre... d'encourager que les fonds Bell, Stentor

2 et les fonds de nouveaux médias deviennent permanents,

3 que ce serait important que ce ne soit pas que des

4 initiatives temporaires qui ne soient que l'espèce de

5 démarreur mais de faire en sorte qu'il y ait une

6 certaine pérennité de ces fonds-là.

7 6951 Quand vous suggérez au Conseil de

8 voir à mettre en place des mécanismes, auxquels pensez-

9 vous? Par quels mécanismes voyez-vous que le Conseil

10 pourrait faire en sorte que ces fonds-là soient

11 permanents?

12 6952 M. deREPENTIGNY: Notre imagination

13 ici est mise à contribution sérieusement. Nous, on

14 apprécie le modèle que le Conseil a institué de concert

15 avec les autres partenaires en télévision, avec une

16 contribution qui est instituée, je pense, et m'apparaît

17 comme à la fois très juste, très porteuse, très

18 structurante.

19 6953 Ce qu'on voulait exprimer, c'est une

20 espèce de grand cri du coeur, de la même façon que de

21 dire, si on pouvait reproduire de tels effets

22 structurants dans le secteur des nouveaux médias et que

23 ça se fasse à l'intérieur de nos champs d'expertise, de

24 celui du Conseil, de votre champ d'intervention, on

25 pense que le principe d'une contribution des joueurs




1 qui sont impliqués là-dedans est celui qui est à la

2 fois juste et porteur.

3 6954 Si on pouvait reproduire ça -- encore

4 là, ce n'est pas notre domaine d'expertise; c'est à

5 vous d'évaluer, je pense, au cours des prochains mois

6 si c'est à l'intérieur de votre champ de juridiction,

7 mais si ça pouvait se faire -- nous, on pense que c'est

8 un principe qui doit être maintenu.

9 6955 En complément, on le suggérait là-

10 dedans... et on sait très bien que ça se développe. Je

11 pense qu'en Ontario prochainement il y aura des crédits

12 d'impôt... c'est hors de la juridiction du Conseil mais

13 plus au niveau du ministère du Patrimoine canadien, des

14 Finances et d'Industrie Canada d'avoir des crédits

15 d'impôt qui soutiennent, qui viennent compléter les

16 sources de financement. Ça nous apparaît --

17 l'expérience est tout à fait valable dans les médias

18 conventionnels -- une avenue à explorer qui peut donner

19 un bon coup de pouce.

20 6956 D'ailleurs on sent à travers la

21 répartition régionale de nos investissements que quand

22 les provinces contribuent à leur manière là-dedans,

23 pour nous ça constitue un élément-clé du succès dans

24 nos projets.

25 6957 LA PRÉSIDENTE DU CONSEIL: Je pose ma




1 question... et je ne veux pas vous arracher une réponse

2 s'il n'y en a pas, mais je veux juste voir si au niveau

3 de votre réflexion vous êtes allés aussi loin que ça.

4 Lorsque vous émettez l'hypothèse qu'un pourcentage

5 équivalent avec un fonds pourrait être créé, comme on

6 l'a fait en télévision, ça suppose qu'on fasse cette

7 perception-là quelque part, et au titre de la Loi sur

8 les télécommunications et de la Loi sur la

9 radiodiffusion, à qui impose-t-on ce pourcentage pour

10 créer ce fonds? Est-ce que vous avez songé à ça, ou

11 vous voyez le fonds et la distribution du fonds et non

12 pas ce qui est derrière?

13 6958 M. deREPENTIGNY: Je suis tenté d'y

14 aller de la réponse la plus facile, que comme

15 administrateurs du fonds on veut bien recevoir le

16 chèque et l'administrer de la façon la plus efficace

17 possible. Mais franchement, Madame Bertrand, outre le

18 fait que ce n'est pas notre champ d'expertise, mes

19 connaissances des fondements et des détails de la Loi

20 sur les télécoms ne nous permettent pas, je dirais,

21 d'avancer une réponse qui soit bien, bien tablée et je

22 préfère m'abstenir de pousser plus à fond.


24 vais pousser dans un autre sens par ailleurs. Entre,

25 disons, une perception qui est faite sur un pourcentage




1 de revenus quelconque des individus en fonction d'une

2 juridiction... il y a aussi celle que vous mentionnez

3 vous-même du, comment on dit ça en français...

4 6960 M. deREPENTIGNY: Le crédit d'impôt?


6 d'impôt, voilà... et qui n'est pas, lui, nécessairement

7 lié à de la réglementation. Et on sait qu'il y a

8 beaucoup de gens qui sont venus et qui ont écrit pour

9 dire qu'on souhaitait une approche beaucoup plus légère

10 et que la question des crédits d'impôt serait plus

11 intéressante.

12 6962 Quelle est votre vue compte tenu, non

13 pas cette fois-ci l'agence fédérale, mais davantage des

14 gens qui sont en interaction avec ce milieu-là du

15 multimédia et qui donc ont des connaissances et des

16 idées sur ce qui serait le plus florissant pour cette

17 industrie-là?

18 6963 M. deREPENTIGNY: L'industrie a

19 exprimé à plusieurs occasions, et depuis quelques

20 années déjà, deux préoccupations majeures. La première

21 préoccupation, de façon très large, était celle du

22 financement et une deuxième, tout aussi majeure, qui

23 eétait exprimée était celle d'avoir une distribution ou

24 un marketing de ces projets-là qui soit à la hauteur.

25 6964 Ce sont vraiment, si on a deux clés




1 de voûte à identifier et si il y a un trait commun à

2 tous les mémoires que vous avez reçus... certains vous

3 disent: Non, ne réglementez surtout pas, jamais, non,

4 non, vous ne devriez pas faire ça. La façon est un peu

5 allégée, mais un trait commun de tout ce que les gens

6 ont dit, ou presque, c'est le soutien à la production

7 de contenu et assurer une promotion, une mise en marché

8 qui soit adéquate. Ça, je pense qu'il y a un consensus

9 là-dessus.

10 6965 Partant, la forme d'aide, les sources

11 d'aide, que ce soit les banquiers qui vont apprendre à

12 connaître davantage le secteur, qui vont y aller avec

13 des capitaux de risque, des garanties de prêts, que ce

14 soit à travers nos propres prêts non garantis, le

15 soutien des provinces, c'est un peu là l'amalgame de

16 toutes ces sources-là et les crédits d'impôt, qui sont

17 une mesure automatique et universelle pour les

18 producteurs... c'est l'amalgame, c'est cette espèce de

19 grappe de raisins, pour reprendre une expression

20 portérienne (ph.) des années antérieures, qui va

21 contribuer, je pense, à identifier une source

22 particulière.

23 6966 Une préoccupation que j'ai et que je

24 partage avec Gilles, c'est de ne pas multiplier

25 indûment les sources et de saupoudrer des fonds. Je




1 pense qu'il faut maintenir une certaine concentration

2 là-dessus, mais c'est cet amalgame de sources de

3 financement qui va faire en sorte que des contenus

4 canadiens de toutes les régions, qui reflètent enfin

5 toutes nos préoccupations communes de diversité

6 régionale, multi-culturelle, linguistique et tout ça

7 qui va faire en sorte en bout de piste qu'on va

8 aller... les moyens comme tels.

9 6967 Je pense que c'est classique, les

10 outils financiers que nous, on administre à Téléfilm,

11 en définitive, complétés par des crédits d'impôt comme

12 mesure automatique... parce que nous on est dans une

13 partie de l'univers, mais l'univers est beaucoup plus

14 large. Même si on pense que celui dans lequel on est

15 est bien important, et ça on le maintient, il y a quand

16 même d'autres réalités d'affaires, et je pense qu'au

17 plan économique il y a cette combinaison; enfin, ce que

18 je mets, c'est une combinaison en bout de piste qui

19 m'apparaît un élément de succès important pour cette

20 industrie-là dans les prochaines années.


22 identifiez de façon très intéressante dans votre

23 mémoire, et vous y reveniez ce matin, la question de

24 l'accès à du capital de risque. En fait, vous dites

25 ici dans votre mémoire écrit que c'est très important




1 parce qu'il n'y a personne qui finance des prototypes

2 puis, évidemment, si on n'a pas de prototypes on ne

3 peut pas se faire valoir.

4 6969 Ça, c'est vrai davantage des CD-ROM,

5 c'est moins vrai des sites en ligne. Là, c'est plus

6 une question de comment attirer l'attention; on

7 référait aux questions de branding, aux questions de

8 notoriété, de visibilité.

9 6970 De fait, plus on ira vers une

10 industrie qui sera davantage en ligne, est-ce qu'on

11 n'aura pas éliminé certaines des barrières de mise en

12 marché qu'on connaît dans les grands réseaux de

13 distribution pour le CD-ROM?

14 6971 M. deREPENTIGNY: Mais -- Gilles, tu

15 voudras qualifier peut-être davantage -- la réalité ne

16 sera pas nécessairement très, très différente au sens

17 où à l'origine il faut attirer des gens qui vont

18 injecter des ressources financières dans le projet.

19 Or, que ce soit un CD-ROM ou un projet en ligne, pour

20 attirer des commanditaires éventuels, un peu comme ça

21 se fait en télévision, il y a un projet qui est

22 développé, et c'est ce projet développé qui par la

23 suite est déclenché, pour reprendre le jargon de

24 Téléfilm, par un diffuseur et qui est amené au petit

25 écran par la suite.




1 1045

2 6972 Cette même réalité risque de se

3 reproduire dans l'univers des nouveaux médias et c'est

4 la raison pour laquelle on accorde une importance

5 énorme à la question du développement parce que c'est

6 là que les joueurs de l'industrie se donnent les moyens

7 d'aller convaincre que ce soit diffuseurs ou

8 distributeurs de signaux éventuellement ou diffuseurs

9 plus conventionnels des mérites de leurs projets.

10 6973 D'ailleurs, c'est un des traits

11 distinctifs du fonds qu'on a mis en place d'agir non

12 seulement au stade de la production mais dès les tout

13 premiers stades du projet, là où les risques, en

14 définitive, sont les plus risqués. Pour nous c'est une

15 préoccupation constante, et ça va être vrai pour les

16 services en ligne parce qu'il y a quelqu'un qu'il faut

17 attirer. Avant de diriger le projet vers les

18 consommateurs il y a quelqu'un qui doit dire: Ça,

19 c'est bon; je l'accepte et je le diffuse, par un canal

20 ou un autre.

21 6974 Gilles, tu voudrais peut-être

22 commenter davantage.

23 6975 M. BOULET: Oui, tout à fait,

24 j'appuie entièrement.

25 6976 On peut dire, bien sûr, que pour une




1 production en ligne, si on le met en ligne il n'y a pas

2 à proprement parler d'étape de prototypage au sens où

3 on peut l'entendre au niveau du CD-ROM, ce qui est

4 exact, mais il faut bien voir aussi qu'au niveau des

5 productions en ligne il peut y avoir une forme de

6 prototypage, bien sûr, et ça dépend à ce niveau-là de

7 la complexité technologique du projet comme tel.

8 6977 On a vu un certain nombre de projets

9 où il y a des innovations technologiques importantes;

10 donc elles doivent être prototypées comme tel. Ce

11 n'est pas une mise en forme, comment dire, de pages

12 assez classiques avec du code HTML standard.; donc à ce

13 niveau-là il y a un élément de prototypage et surtout,

14 donc, il y a une partie de développement technologique

15 et il y a aussi une partie de développement de marché.

16 6978 Ne développant qu'une partie de ce

17 qui sera éventuellement une offre beaucoup plus grande,

18 un site beaucoup plus vaste, il y a quelque chose

19 d'intéressant à ce niveau-là pour le producteur

20 puisque, d'une part, les investissements à son niveau

21 sont moins grands, le risque financier est moins

22 important et, d'autre part, il peut aussi aller tester,

23 si je puis dire, en ligne la réaction de son public ou

24 du public ou des utilisateurs à l'offre en question.

25 6979 Il peut aussi intéresser des




1 partenaires éventuels, soit des partenaires financiers,

2 soit des partenaires au niveau de la commandite, soit

3 des partenaires au niveau de la publicité

4 traditionnelle, bandeaux et autres, de sorte qu'à ce

5 niveau-là, même au niveau de la production en ligne, je

6 dirais que la composante développement est importante.

7 Elle ne se définit pas ou elle ne se vit pas ou elle ne

8 se concrétise pas tout à fait de la même façon que pour

9 les médias sur objet physique, CD-ROM, mais il y a une

10 composante développement qui est importante. Elle peut

11 être technologique et elle peut être aussi au niveau de

12 l'intérêt ou de la levée d'intérêt envers des

13 partenaires éventuels ou envers des commanditaires,

14 annonceurs ou supporters, investisseurs au sens très

15 large, éventuels.

16 6980 Ça, ça fait partie aussi d'une

17 composante développement de projets pour des

18 productions en ligne comme telles puisque le projet,

19 dans l'esprit, c'est évident, du développeur, doit

20 pouvoir se développer, doit pouvoir vivre, doit pouvoir

21 survivre.


23 6982 Une dernière question... enfin peut-

24 être qu'il va y avoir une sous-question à cette

25 question-là, mais pour compléter notre tour d'horizon




1 avec vous et profiter pleinement de votre expérience,

2 il y a toute la question des super sites -- Radio-

3 Canada en a parlé et l'Association des canaux

4 spécialisés en a parlé -- en lien avec, justement, pas

5 tant la question des prototypes et le besoin de

6 financement mais davantage la question de mise en

7 marché, soutien, effet structurant la mise en marché.

8 6983 Comment voyez-vous cette idée de

9 super site canadien dans le monde, disons, futur du

10 nouveau média? Est-ce que vous voyez ça comme une

11 proposition valable? Comment recevez-vous? Est-ce

12 qu'on doit encourager? De quelle manière?

13 6984 M. BOULET: Moi je pense que oui,

14 effectivement, c'est une proposition valable.

15 L'approche comme telle, elle existe, elle se développe.

16 Il est intéressant de voir qu'est ce qui se passe

17 ailleurs aussi; ça nous donne un recul critique sur

18 notre propre action, si je puis dire, ou des idées.

19 6985 À ce niveau-là, oui, ça devient

20 intéressant parce que, en termes ne serait-ce que de

21 l'utilisateur... il est certain, c'est une des

22 caractéristiques de l'Internet lui-même, que l'offre

23 est particulièrement éclatée. Et il semble que ce qui

24 peut être intéressant pour un utilisateur, c'est

25 effectivement un super site, un point de rencontre




1 d'où, là, il pourra se diriger à d'autres endroits sur

2 la toile.

3 6986 Donc effectivement, particulièrement

4 au niveau de la mise en marché, je pense que ça devient

5 une hypothèse qui est intéressante de par l'intérêt, de

6 par son aspect de convergence, c'est-à-dire que de

7 telles approches permettent effectivement de faire

8 converger sur ce site un grand nombre d'utilisateurs et

9 sans doute probablement les utilisateurs qui sont les

10 moins familiers, si je puis dire, avec la navigation

11 sur Internet.

12 6987 Quelqu'un qui navigue sur cette

13 grande toile depuis cinq ou six ans, l'éclatement, ça

14 va bien, on l'a apprivoisé. Cependant, si on pense à

15 une nouvelle catégorie d'utilisateurs qui seraient des

16 nouveaux utilisateurs, à ce moment-là, oui, je pense

17 que l'idée de super site -- appelons ça comme ça -- ou

18 l'idée de point d'entrée, je dirais, où on peut aider

19 l'utilisateur à naviguer et l'orienter vers d'autres

20 points et qui aurait, comment dire, pas unr

21 concentration mais qui aurait un focus très canadien à

22 ce niveau-là, je pense que c'est très certainement,

23 oui, une hypothèse intéressante.


25 finance-t-on ça? Est-ce que ça devrait être Radio-




1 Canada, ou est-ce qu'on finance ça par des fonds

2 publics où on demande une taxe à tout le monde pour les

3 joueurs de nouveaux médias? Comment voyez-vous ça? Ou

4 Téléfilm paie?

5 6989 M. deREPENTIGNY: J'allais le dire.


7 alliez l'offrir?

8 6991 M. deREPENTIGNY: Le mandat qui nous

9 a été confié par le ministère du Patrimoine canadien

10 est centré autour du projet. De telles initiatives

11 d'envergure industrielle, j'oserais dire, et enfin

12 selon les discussions que je peux avoir avec nos

13 interlocuteurs du ministère du Patrimoine canadien, qui

14 ont toujours vu la création du Fonds multimédia comme

15 une première initiative véritablement en matière de

16 contenu canadien... je pense que vous soulevez-là

17 quelques idées qui pourraient mener vers une deuxième

18 étape du soutien gouvernemental.

19 6992 Ce n'est pas à l'intérieur du mandat

20 qu'on a actuellement, mais je conviens avec Gilles que

21 ça peut avoir des effets particulièrement structurants

22 pour l'industrie et surtout avoir un effet rassembleur

23 autour de ces grandes questions-là. Certainement que

24 les joueurs d'abord et avant tout... oui, nous, on peut

25 réfléchir sur de quelle façon on peut les soutenir,




1 mais les joueurs eux-mêmes qui feraient partie de ces

2 super sites devraient être les premiers à y contribuer.


4 question.

5 6994 Dans la définition qui requiert si on

6 est pour financer... enfin, peu importe les méthodes.

7 Le jour où on s'adresse à cette question de nouveaux

8 médias, qu'on prenne les crédits d'impôt, qu'on prenne

9 les super sites, qu'on prenne une espèce de taxe sur

10 les intervenants -- pas les intervenants à l'audience

11 mais les intervenants dans l'industrie des nouveaux

12 médias -- la définition des nouveaux médias devient

13 très importante, et vous en proposez une dans votre

14 mémoire à la page 2.

15 6995 Est-ce que c'est la définition que

16 vous utilisez présentement par rapport à vos gestes

17 d'investissement? Je comprends que oui par votre

18 acquiescement de la tête. Est-ce que je comprends que

19 ça devrait être aussi celle qu'on devrait adopter, que

20 vous trouvez la plus large, ou si on devrait la pousser

21 plus loin, l'agrandir, la rétrécir? Avez-vous une

22 opinion là-dessus?

23 6996 M. BOULET: Bien, les définitions

24 elles sont faites pour être toujours améliorées, je

25 crois. Mais je pense qu'une variable très, très, très




1 importante dans la définition opérationnelle qu'on

2 utilise pour analyser nos projets multimédias -- et je

3 pense que plusieurs intervenants l'ont dit aussi --

4 c'est la variable d'interactivité. Interactivité, pour

5 nous, égale, si je puis dire, ou se traduit en terme de

6 contrôle donné à l'utilisateur. C'est ça,

7 essentiellement.

8 6997 Ce qui distingue les médias

9 interactifs des médias plus traditionnels est

10 effectivement le niveau de contrôle qu'on peut donner à

11 l'utilisateur. Donc la variable interactive devient

12 très importante à ce niveau-là. C'est ce qui distingue

13 ces médias-là, effectivement, des modes de diffusion

14 plus traditionnels.

15 6998 Le contrôle donné à l'utilisateur, ça

16 veut dire non-linéarité ou réticularité, accès non

17 linéaire à l'information, ça veut dire possibilité

18 d'aller chercher, ça veut dire possibilité de modifier,

19 d'annoter, d'échanger. Voilà. Dans état maximum, je

20 dirais, d'interactivité, ça veut dire aussi système qui

21 analyse jusqu'à un certain point les gestes de

22 l'utilisateur pour lui faire des conseils, le cas

23 échéant, ou pour ajuster l'offre en fonction des choix

24 de l'utilisateur.

25 6999 C'est une variable très importante et




1 c'est ce qui, nous en tout cas, nous permet de

2 distinguer qu'est-ce qu'est un nouveau média ou un

3 multimédia ou un média interactif par rapport à un

4 média plus traditionnel. C'est vraiment la variable

5 qui distingue ce médium-là.


7 beaucoup, messieurs.

8 7001 Merci, Monsieur le Président.

9 7002 M. deREPENTIGNY: Merci à vous.

10 7003 LE PRÉSIDENT: Merci beaucoup.

11 7004 We will take our mid-morning break

12 now and reconvene at ten past eleven.

13 --- Short recess at / Courte suspension à 1055

14 --- Upon resuming at / Reprise à 1110

15 7005 THE CHAIRPERSON: Order please,

16 ladies and gentlemen.

17 7006 Madam Secretary.

18 7007 MS BÉNARD: Thank you, Mr. Chairman.

19 7008 The next presentation will be by the

20 Canadian Independent Film & Video Fund, le Fonds

21 canadien du film et de la vidéo indépendants.


23 7009 MS RUTTER: Good morning, Mr. Chair,

24 CRTC Commissioners and staff. I am Ellen Rutter. I

25 have a very sore throat. I apologize in advance.




1 7010 I am the Co-Chair of the Canadian

2 Independent Film & Video Fund or CIFVF and an

3 independent producer from Manitoba. With me today are

4 Robin Jackson, our Executive Director of the CIFVF and

5 Adam Froman, a member of the Board of Directors of the

6 CIFVF and President of MultiMediator Strategy Group.

7 Adam has been responsible for helping the CIFVF move

8 into the area of new media and understanding the

9 different funding requirements for new media.

10 7011 The Canadian Independent Film & Video

11 Fund is a private sector non-profit organization

12 dedicated to supporting the development of non-

13 theatrical industry through the creation of films,

14 videos and new media projects which promote lifelong

15 learning and are produced by Canadian independent

16 producers and developers. In addition, we have been

17 administering the Stentor New Media Fund and the Fundy

18 Communications Production Fund.

19 7012 The CIFVF has made a number of

20 submissions to the CRTC over the years, most recently

21 at the Television Policy Review Hearings.

22 7013 The CIFVF is the only national

23 funding organization in Canada working to support the

24 program production sector that specializes in Canadian

25 lifelong learning programming. Our clientele base




1 comprises 2,800 producers from all parts of Canada. Of

2 this number, 500 are multimedia producers and/or

3 developers.

4 7014 The CIFVF's origins are in the film

5 and video area. In this respect, the CIFVF provides

6 assistance to three types of programming: the

7 documentary which has a point of view; educational

8 programs that do not necessarily have a specific point

9 of view but do educate the viewer and information

10 programs the subject matter of which is usually

11 practical in nature, and is often hosted and broken up

12 into a magazine format.

13 7015 MS JACKSON: The CIFVF began funding

14 new media projects because it was our observation that

15 educational/informational programming ideally lends

16 itself to new media.

17 7016 The CIFVF funds new media projects

18 that are Canadian in content, have small budgets, are

19 produced by companies that are newly founded and may

20 not have an established financial position. As with

21 the film and video side of the CIFVF's program, our new

22 media program is often the opening door to the industry

23 for many companies who will then move on to bigger

24 projects.

25 7017 Based on our experience of reviewing




1 more than 200 multimedia applications to date, we are

2 of the opinion that Canada has the talent base to have

3 a vibrant new media industry. We also believe that new

4 media is the way of the future. We believe it has had

5 and will continue to have important implications for

6 how Canadians communicate. It also represents a

7 significant opportunity for the Canadian production

8 community and those involved in using new ways of

9 creative expression.

10 7018 In the broadcasting area, we are

11 beginning to see instances where traditional

12 broadcasters have embraced the new media and have made

13 the commitment to investing in the digitization of

14 content and development of new interactive digital

15 content.

16 7019 The new media industry is very much

17 in its beginning stages and we realize that many of the

18 issues that we are commenting on will change rapidly as

19 the industry evolves. We also wish to state that while

20 the CIFVF administers the Stentor and new Fundy

21 programs, the CIFVF does not speak for either of these

22 companies. Our observations and comments are our own.

23 7020 Based on the applications we have

24 seen to date, the new media industry is composed of

25 small and medium-size companies that are either newly




1 established or have relied on corporate-fee-for-service

2 work in order to survive. Many of these companies have

3 not had the opportunity to develop their own

4 intellectual properties and are only beginning to do so

5 now.

6 7021 Most of the companies which have

7 submitted applications to us have high debt to equity

8 ratios. In many instances, the monies being requested

9 by the applicants are often greater than the revenues

10 being generated by these firms. Due to the size of the

11 companies, many do not have the internal cash flow to

12 fund the balance of the development costs. The

13 distribution guarantee usually found in the television

14 and film industries does not exist in the new media

15 sector.

16 7022 We have examined the marketing plans

17 in the applications we have received to determine the

18 challenges associated with potential distribution and

19 revenue flows. In the case of CD-ROMs and the emerging

20 DVDs, in 99 per cent of the cases there is no

21 distributor in place. Applicants report that many

22 distributors are not willing to commit up front until

23 they see the product. This is a very different mode;l

24 (sic) of functioning from the usual film/video model.

25 In the case of CD-ROMs, the economics of distribution




1 in terms of generating revenues is similar to the film

2 industry.

3 7023 MR. FROMAN: This is why, in the case

4 of the CIFVF's New Media Fund, there is a third area of

5 funding for prototyping. This provides the developer

6 funding to get a product to a demo or pilot stage in

7 order to pursue the distribution relationships. It is

8 almost impossible to get a CD-ROM distributor to sign

9 in advance of completion of the project. It is

10 difficult to find a Canadian distributor and, for that

11 reason, neither the CIFVF nor Stentor requires that the

12 distributor be Canadian.

13 7024 There is also a lack of monies

14 available for marketing and promotion. Even though a

15 Web site may be available on the Internet, this does

16 not guarantee that people will know to go to it. There

17 is a need for monies to ensure that a Web site or a CD-

18 ROM or DVD is properly marketed. This is a problem

19 that has been paramount in the film and television area

20 from which we all can learn.

21 7025 There are only a few funding sources

22 for new media such as Telefilm's New media Fund, the

23 CIFVF, the Bell Broadcast & New Media Fund, the Stentor

24 New Media Fund, the SaskTel New Media Fund, B.C. Tel's

25 New Media and Broadcast Fund and the Fundy




1 Communications Production Fund. Only Stentor, the

2 CIFVF and the Fundy Communications Production Fund

3 offer non-repayable contributions. We are distressed

4 to have to report to you that due to the corporate

5 changes, the Stentor New Media Fund will not continue

6 next year. This is of great concern as Stentor has

7 been doing some ground-breaking work in the area of new

8 media. It also means one less available funding

9 source.

10 7026 The CIFVF is of the opinion that the

11 CRTC has a role to play in helping to foster the

12 development of Canadian new media content. If the

13 Information Highway Advisory Council is right that

14 lifelong learning must be a key element of Canada's

15 Information Highway, we believe they are, it is

16 important that Canadian material and content be made

17 available to Canadians. Lifelong learning helps

18 determine who we are as individuals, and consequently,

19 as a nation. In a sense, we are the stories that we

20 tell. If we can't consume our own stories, then what

21 will happen to Canada? Canadian values and

22 perspectives are communicated to Canadians through

23 educational materials. The potential for the Worldwide

24 Web to effectively facilitate this communication is

25 enormous. The CIFVF supports the statement of the




1 February 1998 Final Report of the CanCon New Media

2 Sessions prepared by my company, which states:

3 "It is acknowledged however that

4 there is a need to create

5 products that serve the needs of

6 consumers of Canadian

7 information, that is to say,

8 Canadian stories, information

9 about Canadian subjects and

10 institutions."

11 7027 We do not believe that the CRTC can

12 regulate the new media industry in the same fashion as

13 it does the broadcast industry. There is no feasible

14 way to restrict or control distribution and access to

15 the Internet given its technology. The lack of clear

16 business models requires significant research and

17 development type investment in the development of new

18 media content with a long-term focus on building the

19 industry sector both in Canada and globally.

20 7028 MS RUTTER: We propose that the CRTC

21 should do the following: If BDUs and broadcasters,

22 both who are currently regulated under the Broadcast

23 Act, are considered to be an integral stakeholder of

24 the creation and distribution of new media in Canada,

25 it would seem logical for them to contribute to its




1 development. In the current state of the new media

2 industry where legitimate business models are still

3 emerging, this investment becomes much more like an

4 investment in research and development or cultural

5 content with limited viability.

6 7029 We think that broadcasters who create

7 new media content, as opposed to using new media for

8 promotional purposes, should be given credit for the

9 creation of Canadian new media content. Perhaps a

10 percentage of monies dedicated by broadcasters and

11 broadcast distribution undertakings to the creation of

12 Canadian programming could be directed to the creation

13 of new media content development.

14 7030 This is not unlike the flexibility

15 provided by the Broadcast Act to allow Class 1 BDUs who

16 can put 20 per cent of their 5 per cent contributions

17 into local programming. This would not require

18 defining new media as programming, rather, it would

19 create an incentive for BDUs to invest in research and

20 development as it relates to content. It would not

21 require them to do so.

22 7031 More specifically, we recommend that

23 the requirement of a broadcast licence in CRTC Public

24 Notice 1997-98 on Contributions to Canadian Programming

25 by Broadcast Distribution Undertakings, be removed.




1 Ultimately, the winner would be the new media industry

2 where BDUs would be provided incentives to participate.

3 7032 If it is agreed that there has to be

4 some kind of Canadian cultural content in the new media

5 area, it then requires some financial assistance.

6 While we applaud the government for making $30 million

7 available over five years through TeleFilm, we feel

8 that there needs to be a variety of different kinds of

9 direct and indirect funding which different types of

10 content projects can access. This could be provided

11 through tax incentives for new media production as

12 Quebec has done in new media and the federal government

13 has done in the area of film and television applied

14 through the structure of general revenues.

15 7033 Any additional taxes on either

16 existing industry players or the Canadian public will

17 only have a negative impact on the new media industry

18 as a whole. From the standpoint of content producers,

19 we feel that the issue of access to capital will be the

20 most striking universal concern emerging from these

21 hearings.

22 7034 Just as we mentioned in our

23 submission to the CRTC on television policy, we

24 emphasize that it is important to have Canadian

25 cultural content in the area of new media, that this




1 content be diverse and not sacrificed at the expense of

2 more commercially viable programming. Commercially

3 viable new media content will receive funding from

4 TeleFilm and other loan or equity programs. New media

5 content that is more restricted in its market appeal,

6 such as that which may be more obviously "Canadian" in

7 its subject matter, as well as those new media

8 companies which are just starting out and may not be

9 able to readily access these sources. That is why

10 funds such as the CIFVF and the Fundy Communications

11 Production Fund must continue to exist for the

12 development of new media content and ideas.

13 7035 In conclusion, the CIFVF agrees with

14 the MultiMediator Report which states that the arrival

15 of the "interactive age" is indeed a boon to the

16 information economy. It is important that the Canadian

17 new media content be created and that the CRTC play a

18 role in ensuring its creation. Thank you.

19 7036 THE CHAIRPERSON: Thank you very much

20 for your presentation.

21 7037 I will turn the questioning to

22 Commissioner Pennefather.


24 morning and welcome back to this hearing from another

25 hearing and from this hearing to this hearing. I am




1 glad to see you and thank you for your ideas and

2 suggestions.

3 7039 I would like to start with some basic

4 facts and figures, a similar line of questioning to the

5 one which Madam Bertrand took with Telefilm Canada just

6 to situate clearly for us what kind of projects you are

7 working with. You have had considerable experience in

8 the funding of new media projects, both through your

9 own fund and administering the other funds.

10 7040 Could you describe to us what kind of

11 projects -- could you give us an example of the new

12 media content we are talking about and who is producing

13 this content? Are these new players in the Canadian

14 cultural milieu or are they existing film and

15 television players moving on to new media?

16 7041 MS JACKSON: Do you want to know

17 about CIFVF projects as well as Stentor projects?


19 Absolutely. Basically, from your experience so far

20 what kind of projects are we talking about. You can

21 take examples from the three funds.

22 7043 MS JACKSON: In terms of the CIFVF we

23 have -- we are a small organization, as you heard the

24 last time, we have allocated about $200,000 to about 13

25 new media projects. We have just had a November 18




1 deadline and we will be allocating about $50,000 to

2 $70,000 more.

3 7044 In terms of the applicants because we

4 started as a film and video fund, we have a requirement

5 and because our resources are limited, we have a

6 requirement that the applicant in the case of the CIFVF

7 have some film and video background, so that is

8 limiting in that respect.

9 7045 The types of projects we are getting

10 in the CIFVF are educational informational. We have

11 had a combination of CD-ROMs and Internet sites.

12 Things such as la Boîte à musique, which was a CD-ROM

13 done by les Productions Pandor, which is for children

14 three to six-years old on learning sounds, different

15 types of sounds, as well as musical sounds.

16 7046 Glenn Gould, which is -- well, about

17 Glenn Gould.

18 7047 COMMISSIONER WILSON: How curious.


20 could be about Bach.

21 7049 MS JACKSON: They happen to be new

22 media producers from Vancouver.

23 7050 We have had a smaller project which

24 is called "When the Night Fades", which is about the

25 art work and art therapy related to Palestinian and




1 children from Canada doing an exchange.

2 7051 And another one on "Beaver Pond". I

3 have to say the "Beaver Pond", and it's ecology -- we

4 also on these 13 projects had about four projects that

5 have fallen off, simply because they haven't been able

6 to be funded. The "Beaver Pond" was one of them. It

7 doesn't sound all that dynamic, but it's a very useful

8 educational project and, unfortunately, we had offered

9 them a fair sum of money and they weren't able to bring

10 the financing together. So that's an example of how

11 difficult funding has been.

12 7052 On the Stentor side, the criteria is

13 larger. The applicant has been primarily, I would say,

14 new media people, as opposed to people with film and

15 video background.

16 7053 They have been larger companies, for

17 the most part, and they have had a combination of --

18 primarily, right now, they have done educational

19 projects, one on eco-kids and another one on a

20 literature program, another one on inventors. They

21 also do R&D, as you know, and training and education as

22 well. Their grants have been larger than ours have

23 been on the whole.


25 say that to have access to your fund the applicant has




1 to have film and video experience?

2 7055 MS JACKSON: In the case of the

3 CIFVF, not in the case of Stentor.


5 would -- did you want to comment on the point raised

6 earlier by the Alliance, that in fact funds are not

7 available to people for individual artistic projects?

8 Could you give us your comments on that?

9 7057 MS JACKSON: I would have to agree

10 with the Alliance, mainly because the Alliance people

11 do primarily artistic-type projects, media arts.

12 7058 We are specializing in lifelong

13 learning and so, as you know, there is a difference.

14 So, we haven't been able to help out a lot, probably

15 very few of the people that belong to the Independent

16 Film and Video Alliance.


18 projects that you have described, are they largely

19 CD-ROM?

20 7060 MS JACKSON: The majority of our

21 projects at the beginning have been CD-ROM. With our

22 last deadline, approximately 43 per cent of the

23 applications are for CD-ROMs, 32 per cent are for Web

24 sites, 19 per cent are hybrids and 6 per cent, which is

25 actually just one project, is for DVD





2 combination of Web site and CD-ROM is the third

3 category you mentioned?

4 7062 MS JACKSON: Yes.


6 see a trend moving more towards what we call new media

7 as new media designed for delivery through the

8 Internet? Is that shifting, as Telefilm said to us

9 earlier?

10 7064 MR. FROMAN: Absolutely. I think you

11 have to also understand the guidelines for the CIFVF's

12 new media fund came out in '95 when CD-ROM was sort of

13 the predominant delivery platform for sort of new

14 media, interactive sort of more than just text and only

15 pictures. So, it was obvious that when the

16 applications came in they were mostly CD-ROM.

17 7065 I think we could probably say that

18 the balance is shifting to more Internet-type projects

19 now, which has been an interesting transition because

20 it has followed the industry.

21 7066 If I could also comment on the type

22 of people who have been applying. When I came onto the

23 Board three years ago, or that sort, the constituency

24 that the fund, the new media guidelines were promoted

25 to were the existing database that CIFVF had, which was




1 film and video producers.

2 7067 I did open that up into -- I was

3 President IMET at the time and I opened it up to the

4 larger community. We saw a lot of sort of the new

5 media players coming in.

6 7068 The interesting thing is that the

7 people moving into the new media are the new media

8 players. A lot of them do have video film background

9 and you can guarantee they did say they did. But a lot

10 of them genuinely had already made the transition

11 prior, but it was still a lot of the smaller players

12 and new players who had made the transition already who

13 were coming to apply, as opposed to the traditional

14 players trying to move in.


16 then to the distribution issue, as is so often the

17 case, we can talk about producing the product, but do

18 Canadians get to see that product and in this

19 particular instance I think we are talking about a

20 global audience.

21 7070 You have noted the distribution

22 challenge for those producers creating CD-ROMs. Does

23 the fact that they will create now more for on-line

24 delivery change the distribution problem? Does it

25 improve the situation for the producer in terms of




1 access to an audience?

2 1135

3 7071 MR. FROMAN: I think, sort of harping

4 on an old point that I have been saying, that it has

5 definitely changed it. In the CD-ROM world, you are

6 trying to get access to distribution and preferably

7 someone who will promote that as well as provide you

8 access to the market.

9 7072 The Internet changes the dynamics

10 because you don't have a problem getting the access,

11 but the promotion is still the challenge. Getting

12 people to see it definitely becomes the challenge.


14 some comments on what the best kind of promotion should

15 be for online products such as your particular kind

16 with your lifelong learning or educational projects?

17 In the panoply of Web sites available, how do we focus

18 attention on the Canadian sites that you fund?

19 7074 MS JACKSON: I could give you one

20 specific example which I think is very creative. The

21 problem we are finding is a lot of the applications,

22 and no disrespect is meant here, but a lot of the

23 applications are not very sophisticated in that they

24 haven't thought through distribution and promotion

25 in the case of Internet sites.




1 7075 When we were first getting

2 applications, they were saying "Well, we're on the web,

3 that's fine, that's all we need" and it's not.

4 7076 This is an example of a Web site that

5 is for fitness. It's geared towards -- the target

6 audience for the project is women aged 25 to 45.

7 "Additional markets to be

8 targeted after will be seniors

9 and males. The site will create

10 a relationship with its female

11 user by offering gifts of

12 personalized workout schedules

13 and videos. The applicant

14 reports that other fitness sites

15 are dedicated to the promotion

16 of certain health club chains or

17 sports, but there is no similar

18 products on the Canadian side.

19 Promotion will be done using

20 online magazines and journals

21 such as 'Maclean's' and 'Go

22 Girl'" [whatever it is] "banner

23 exchanges where similar venues

24 swap banner space with each

25 other in order to promote their




1 sites will be used. Link

2 exchange where sites will be

3 linked to and from already

4 popular sites such as Sports

5 Canada or Participaction. A

6 site sponsorship will be swapped

7 for offline advertising. For

8 example, Kellogg's might agree

9 to display the Web site address

10 on the back of their cereal

11 boxes in exchange for an ad on

12 the Web site. Postcard

13 advertising in sports medicine

14 and physiotherapy clinics, gyms,

15 spas will be undertaken.

16 Advertising will be sold which

17 features the advertiser on the

18 printed workout sheet of the

19 site member. Fitness centres

20 and trainers will be charged to

21 be registered on the sites.

22 Individuals will not be

23 charged." (as read)

24 7077 It's just an example. There are some

25 very creative things happening. I think this site,




1 they are not just sitting back and saying "We're on the

2 Internet, here we are". You have to be fairly

3 aggressive and, I think, innovative, but it can be

4 done.


6 was raised earlier that it puts an individual at the

7 same level as the Disney Web site. Do you agree with

8 that?

9 7079 MR. FROMAN: I think from the access

10 point, you know what I mean, the fact that you can get

11 it up on the Internet removes -- if someone can find

12 it, then you have got an audience of one.

13 7080 The issue of having people actually

14 reach that site comes to a branding and promotion

15 issue. I think Robin displayed in that example that

16 it's very much a cross-medium or multimedia approach

17 campaign, that it's over various media.

18 7081 Anyone in the new media sect

19 recognizes that it's not a finite area, that you are

20 not on the Internet and it is only the Internet where

21 you promote yourself. You reach an audience. You are

22 building up a new audience in this environment, so you

23 want to reach where those potential customers or

24 audience will be, so you have to have an integrated

25 approach to the marketing.




1 7082 It separates marketing very much from

2 the distribution.


4 fact offer such new challenges in the way to market

5 your product, that a certain kind of training is

6 required for that? It seemed in many instances during

7 these hearings people say just go sit down at the

8 computer, put your Web site together and, bingo!,

9 you're in business.

10 7084 I think you are saying it's a little

11 more complex than that if you are going to have a

12 successful Web site, particularly in line with the kind

13 of projects you are talking about where you are

14 receiving funding and where you are assuming that there

15 will be some audience for that site.

16 7085 MR. FROMAN: I think the challenge

17 will be now that's there's more of an opportunity for

18 the producer to play a more active role in the

19 promotion marketing. It changes the economics of many

20 of the businesses that exist out there.

21 7086 You see it in the music industry.

22 You are seeing it now with independent artists who are

23 promoting themselves.

24 7087 It places a new challenge for them as

25 opposed to just being an artist, now you become a




1 promoter. It's a new skillset that they haven't had in

2 the past. What the Internet has provided is an

3 opportunity that they can play that role and at lower

4 cost. They weren't beholden to the traditional

5 distributors and promoters.

6 7088 It has changed it. I don't see it

7 being an impediment. It's just a challenge, a shift in

8 the skills required for people to be an artist and to

9 be able to promote themselves.

10 7089 MS RUTTER: I was just going to say

11 that traditionally the problems we have always had in

12 Canadian film and video production, for instance, have

13 been a lack of shelf space. Trying to get yourself

14 into the store at all has been our biggest challenge.

15 You can create your own shelf now.

16 7090 Suddenly your eyes opened. Now that

17 I have got it, how do I get people to stop by? I think

18 that is new. I personally don't know what to do about

19 it. It does put people all in the same store, if that

20 makes sense.


22 but I am wondering as the myriad sites continue to

23 increase as we have been told it will and also we have

24 been told by many people that we have to think about

25 this new medium in a completely new way, the Internet,




1 as a delivery system. Some would call it also content.

2 7092 Let's say we separate those two and

3 content is one of the projects you have described for

4 us, developed for online. The whole concept of

5 delivering it to a user is totally different.

6 7093 I did note earlier that one

7 intervenor said you have to interest someone to carry

8 your project via the Internet. It sounded like an old

9 paradigm being placed on the delivery of this new

10 project.

11 7094 I wonder if you could talk a little

12 bit more about this point because I think it's

13 important for us to understand what exactly we mean

14 when we talk about delivery via the Internet. We have

15 a tendency to see it as just another mechanism of

16 delivery.

17 7095 Do you see it as different? What are

18 the components that make it different? Is it as simple

19 as I create a Web site and I put it there and it will

20 promote itself? What else is required?

21 7096 MR. FROMAN: From my perspective,

22 it's very different in the sense, and I appreciate

23 those who have been in the traditional sort of

24 broadcast in different areas, their perspective.

25 7097 As someone who has been in the new




1 media sector, the control that's been placed on the

2 user is different than anything else prior. The

3 control is totally up to the user.

4 7098 I think some of the confusion exists

5 around the ability to create the means that a user can

6 actually reach the content is new. There is not a

7 problem with getting a Web site up and having somebody

8 actually reach that.

9 7099 In the traditional physical sense,

10 and I will take CD-ROM that has been an example, that

11 has been a huge challenge. Getting the shelf space,

12 just getting your product to the shelf has been a

13 challenge to reach that consumer.

14 7100 That access to distribution has

15 changed. The change in the mew media as opposed to

16 many of the traditional ones is that the consumer has

17 total control. How do you engage that consumer to (a)

18 come and find your content and also to consume it as

19 opposed to just having a limited spectrum or a limited

20 amount of shelf space in the physical world, that they

21 come in that place where they actually go and find the

22 content or look for content. They have a limited

23 choice.

24 7101 Here they don't have a limited

25 choice. There is a navigational role that is changing




1 in the new medium as opposed to sort of many of the one

2 way physical medium.


4 suggested that that whole business of being noticed,

5 being found, having shelf space, yes, you have the

6 shelf space but will you be found on the shelf would be

7 helped by a super Canadian site which would in fact put

8 a very strong emphasis on Canadian media content.

9 7103 Do you think that such a site would

10 be helpful in terms of the marketing of individual

11 projects?

12 7104 MS RUTTER: Okay, I'll bravely try.

13 7105 I would say sure, that sounds like a

14 wonderful idea, but going back to this morning's

15 conversation, who is going to decide what is on the

16 super Canadian Web site?

17 7106 From my presentation, I would be

18 happy to get myself on to it, but I would not be

19 willing to be one of the people deciding who is there.

20 7107 MR. FROMAN: I think the concern I

21 have is around what's behind it. The super site to me

22 just becomes another billboard. So you create another

23 billboard and then why will people consume that

24 content?

25 7108 I think we are seeing -- you know,




1 the CBC has been very aggressive in what they have been

2 doing in the new media. They potentially provide a

3 portal for Canadian content for the world to see it.

4 7109 You are seeing a few other players in

5 Canada such as the Simpaticos of the world that are

6 also creating a portal to the Canadian type content.

7 7110 I think what the challenge will be

8 will be the promotion afterwards. It is not just about

9 creating a super site. It is about how are you going

10 to create content that people will engage in, will want

11 to use.

12 7111 How they reach it will be a separate

13 thing. If it's a branding, I wouldn't necessarily limit

14 it to a super site, but maybe a super brand. We take

15 that and brand that Canadian, the quality of Canadian

16 content around the world, that people actually use it.

17 7112 I think the separation is if we just

18 create a Canadian site, it presupposes that everyone

19 will come to it. I think that is not the correct way

20 of looking at it. I think it's about how are we going

21 to brand Canadian content, make sure that Canadian

22 content is well promoted.


24 individual project, once past the gateway, how well is

25 the individual project, the Beaver Pond project online




1 promoted?

2 7114 MR. FROMAN: As well as creating why

3 people would even look for the Beaver Bond in the first

4 place. I think you see this around Hollywood. You

5 know, Hollywood in the film industry has created a

6 presence for itself in terms of the film industry

7 because they have branded it.

8 7115 In the computer animation industry,

9 you have San Francisco for the capability of computer

10 animation. It's about branding the Canadian content

11 experience as world-class content and not necessarily

12 the one site to be able to get to it.


14 you used different examples, then when you got to

15 Canada you said the Canadian brand as opposed to a

16 brand about animation or a specific expertise that you

17 could find.

18 7117 What's a brand to you? I have heard

19 it often referred to just when we get to Canada as "the

20 Canadian flag". I think I heard you say there are

21 other kinds of brands we should be concerned about that

22 says "This is the place to go for the best N, X or Y".

23 Is that right?

24 7118 MR. FROMAN: I was responding to your

25 question about the Canadian super site. I was




1 responding specifically to that.

2 7119 I think you can brand based on a

3 number of different levels, whether it is the type of

4 content, a particular functionality of the content or

5 the use of it. There are many different ways to brand

6 it. It's just a recognizable name or theme that people

7 can recognize and go to. That to me is what the

8 branding is.


10 go back to funding, which is the nature of your

11 business, and look to your experience to tell us about

12 the importance of development funding.

13 7121 There are the mechanisms that your

14 fund represents, but are there other kinds of funding

15 mechanisms that you would recommend to support both

16 development and the creation of the project?

17 7122 I gather from our conversation to

18 this point that marketing is also important. Do you

19 see the value of marketing funds and, if so, where will

20 they come from?

21 7123 MS JACKSON: I think we feel that the

22 development of funding is very important simply because

23 we tend to get projects that are perhaps harder to

24 finance, that may not have the commercial viability and

25 exportability that a fund such as Telefilm or B.C.Tel




1 might be looking for, a loan or equity fund.

2 7124 Stentor has been a grant program with

3 CIFVF. It has been a grant program and that has helped

4 a lot of people to be able to access our funds more

5 easily I think. They have not had to go through as

6 rigorous a due diligence process. We think that is

7 important.

8 7125 The marketing issue is extremely

9 important. We have never had enough money to put into

10 a marketing program. It has really been an academic

11 discussion on our part. I think, as Adam has alluded

12 to, that is going to become more and more important.

13 7126 We certainly are going to have to

14 look at our situation in terms of what we do about it.

15 I don't know if you are asking where the money is going

16 to come from.


18 7128 MS JACKSON: I think Ellen may want

19 to say something on that.

20 7129 MS RUTTER: I have been elected to

21 say something.

22 7130 We are interested, of course, in the

23 more money being put into content development, in

24 particular our interests, the better. I would also say

25 that we are not here specifically here today to suggest




1 that you impose or for us to specifically recommend a

2 tax or very specific way of doing that at this time.

3 7131 I think that at this time we are

4 interested in encouraging, you know, as we tried to lay

5 out today, encouraging BDUs to put their money perhaps

6 in this area rather than recommending specifically that

7 they be regulated to do so.


9 wanted to get to that point because it is one of the

10 main components I would suggest in today's oral

11 presentation and your written submission on page 8.

12 7133 I would like you to expand a little

13 more on this suggestion. On page 8 of your submission

14 you propose:

15 "-- that the definition of

16 programming be enlarged to

17 include new media only as it

18 applies to the usual BDUs and

19 broadcasters."

20 7134 Are you proposing in saying that that

21 broadcasters and BDUs be allowed to direct a portion of

22 their expenditures on Canadian programming to new media

23 content?

24 7135 MS JACKSON: Yes. This is a

25 difficult question, you know. One tends to appear too




1 greedy to even suggest this.

2 7136 We have had a lot of debate among

3 ourselves. Varying opinions from don't suggest it to

4 do suggest it. This is why we are sort of hesitating.

5 7137 MS RUTTER: Yes. We apologize for

6 the hesitation. Let me try and put it this way.

7 7138 When we were set up to deal with film

8 and video, what compelled us to look at new mediums?

9 We started looking at the new mediums because we

10 realized that some of our existing clientele would

11 eventually start heading that way.

12 7139 We also realized that there was a

13 whole other group of people out there with things to

14 say and educational products that they were trying to

15 figure out how to manufacture using these new mediums.

16 7140 As they started coming closer

17 together or learning more about one another, that's

18 what sent us into this area.

19 7141 As we tried to look to the future

20 ourselves and figure out what may eventually become of

21 it, we just think that it's reasonable to assume that

22 broadcasters might be also heading into that direction

23 as they feel their way through it too.

24 7142 That's our rationale which is also

25 part of our difficulty in being specific.





2 just ask another couple of questions. You can answer

3 them the way you feel is appropriate.

4 7144 You made the second suggestion that

5 the broadcasters be permitted to credit expenditures on

6 Canadian new media towards the Canadian programming

7 commitment.

8 7145 Have you any concerns that this will

9 impact negatively on Canadian programming for the

10 traditional broadcasting milieu?

11 7146 MR. FROMAN: I think we looked at in

12 a larger scheme in terms of from the point of view of

13 the new media sector. It gets down to the definition

14 of Canadian programming. I think that is a contentious

15 issue, depending on where you are sitting and what

16 perspective you have.

17 7147 I think our intention of this

18 suggestion was the fact that a broadcaster is a

19 stakeholder in this new industry, and we don't deny

20 that. Speaking specifically to the CRTC, they are the

21 group that the CRTC has some jurisdiction over and they

22 do have a commitment to funding Canadian type

23 programming.

24 7148 Those of us who want to create

25 incentives for investment in new media saw this as an




1 opportunity to not enforce broadcasters into the new

2 media and invest but create an incentive for them to

3 invest.

4 7149 There was one suggestion saying how

5 would you create an incentive for a broadcaster if they

6 are putting money into programming? How would you

7 create an incentive for them to put some of that into

8 new media without them, the broadcast community, saying

9 we are worried about our own traditional programming.

10 7:\ We had to say where are the

11 tradeoffs? This was where sort of the idea came to say

12 well, if there is going to be a tradeoff, you know, a

13 lot of broadcasters would like to have control of how

14 much Canadian programming they have in their

15 traditional broadcast, so that would be a negotiating

16 point for them that might be of interest.

17 7151 We haven't polled the broadcast

18 community to see if they would be interested in this at

19 all. This was simply from our perspective, saying we

20 see this as a logical incentive for them to take some

21 of the money that they are already committed to putting

22 into programming, to siphon off some to the investment

23 in the new media sector.

24 1155





1 not decrease the amount of expenditure in the

2 programming?

3 7153 MR. FROMAN: Personally, my personal

4 view on that is someone who is in the new media sector

5 who fights every day to remain in Canada in the sector,

6 I think we are committed to producing content that is

7 by Canadians and particularly for Canadians. I think

8 the guidelines of how that money is committed, the

9 CIFDF in particular is committed to lifelong learning

10 for Canadians. So any money that we would have to do

11 with it, would have the possibility of accessing would

12 be focused on helping build Canadian type products,

13 culturally significant Canadian type products. So we

14 saw that. It does not matter, it would happen in the

15 new medium.

16 7154 So would it have a negative impact?

17 I don't know, I do not think we are qualified to answer

18 that in the traditional broadcasting sense.


20 I noticed on page 3, paragraph 4.7, is that you say:

21 7156 "In the broadcasting area, we think

22 that here there will be a shift away from traditional

23 broadcasting content towards new media programming, or

24 at the very least broadcasting programming will be

25 supplemented by new media programming on a regular




1 basis."

2 7157 Which brings me back to this point

3 about this mix of broadcasting and new media. Are you

4 saying by that that we will find broadcasters moving

5 into the new media world, or are you saying new media

6 will become part of the current broadcasting world? I

7 am not sure I understand.

8 7158 MS JACKSON: I had a conversation

9 with someone from Life Network and she was saying

10 eventually, because they do a lot of programming that

11 is similar to ours, educational type and informational

12 programming, and primarily informational. And she was

13 saying eventually she sees with each of her series a

14 Web site and the Web site will contain additional

15 content and will be merchandising because, you know,

16 gardening shows you want to buy the latest gardening

17 book, et cetera, et cetera. So she feels that there

18 will be this kind of coupling and that that will

19 automatically happen.

20 7159 And I also refer to an article that

21 quoted Keith Kocho where he said that informational

22 programming was much easier to adapt to the new media

23 than drama.

24 7160 I suppose that is another discussion,

25 but I think for the type of programming we are involved




1 in it will become a natural thing.


3 to or a substitute for?

4 7162 MS JACKSON: I do not think -- excuse

5 me, I do not think it will be a substitute. I think

6 for the immediate future it will be a supplement. I

7 don't think unless anyone disagrees.

8 7163 MR. FROMAN: I think we can argue

9 that there are probably different audiences now and

10 there is overlap, but I think in new media there are

11 very different people using it, watching television,

12 they might be the same people in some instances.

13 7164 I think one of the opportunities for

14 broadcasters is that we are seeing in the production

15 side of broadcasting many are going digital, their

16 properties are becoming digitized anyways, their

17 content.

18 7165 So to think about creating an

19 interactive product for a new distribution medium is

20 not that big of a stretch because they have got the

21 digital properties. Now, it is a stretch in terms of

22 thinking about how you create that medium, but I think

23 you if you are thinking from the production standpoint

24 it is not just one shooting a film or shooting to video

25 tape and that is where it ends. It is coming in, being




1 digitized, being changed and then they have these

2 properties that can be leveraged into the digital

3 environment and created into an interactive product as

4 opposed to just a broadcast product.


6 me out here. With the mixing and converging of these

7 two discussions, I can understand it and see it from a

8 production point of view and from an audience demand

9 point of view. And we are learning so much from people

10 who are in the business and who tell us what that means

11 what this is. As one of the intervenors said, I think,

12 tell us what this is I think we should really

13 understand. But you are mixing the two, you are

14 bringing the two worlds together. At the same time we

15 are told it is a totally different world, totally

16 different paradigm and one of which there should be no

17 content regulation. And yet, in the other world, for

18 reasons that historically and socially, culturally and

19 from many points of view has been a very important part

20 of the development of content in this country to have

21 regulation.

22 7167 How are these two mixing together now

23 when you decide -- when you propose a world in which

24 you have broadcasters, BDUs and content providers from

25 the new media world together where we are also asking




1 for support from new media production, encouragement of

2 new media production, or easing your delivery access

3 to? Regardless of the fact that technically everyone

4 can have access to your site, we are looking at a

5 couple of problems such as content aggregators and

6 others who may step in the way of that access.

7 7168 There are a number of issues which

8 some may say still remain hands off and others may say,

9 well, there may be a point to some form of regulation.

10 Can you help me clarify that?

11 7:\ MR. FROMAN: I think part of it comes

12 down to I tend to see the broadcasters almost getting

13 picked on a bit and focused on because of the nature of

14 what they do.

15 7170 We are seeing, you know, we are

16 seeing veterinarians moving into the area of new media

17 who do not have a broadcast background and are building

18 up new companies.

19 7171 I think what we are seeing here is

20 the scope of the people who are moving into the

21 production of new media is much larger than the

22 broadcast community. I think we also have to look at

23 the Internet is a separate medium from the broadcast

24 medium.

25 7172 So from a distribution medium it is




1 separate. And I think it is building its own audience.

2 People are trying to understand why people are

3 consuming content over the Internet. And it is a very

4 different world from the broadcast community. I think

5 we see the broadcasters as being one logical group,

6 moving into that area, and the BDUs having some role in

7 it.

8 7173 But I also want to, you know, expand

9 on the other group on the other side that are moving

10 into the sector very quickly as well that are creating

11 the individual who is creating their own Web site at

12 home. They do not come from the broadcast world. And

13 you see very popular sites in environments -- like,

14 Yahoo! was not based on, from a broadcast environment.

15 Groups like Microsoft have struck alliances and they do

16 not come from a broadcast environment.

17 7174 Even, which is a

18 transactional Web site, is a brand -- a place where

19 people are going on the Internet. I don't know how

20 that separates how you -- look at simply the

21 broadcasters in the review and say it is their

22 responsibility of where they fit into this in light of

23 everyone else. This is why the issue of the Internet

24 becomes a very challenging issue. Because it does not

25 -- is not controlled or is the lineage of one group




1 transitioning into this. There are a number of

2 different sectors that are moving into it at the same

3 time.

4 7175 So I guess I struggle with the

5 providing you with a question that focuses just on the

6 broadcasters and the BDUs.


8 you that the content we are talking about called new

9 media could be existing in a traditional broadcasting

10 world, but it also exists in another world of the

11 individual or the pyjama revolution, I think it was

12 called this morning in terms of creation.

13 7177 Thank you for your comments and

14 clarification. I wondered in closing if you had any

15 remarks or suggestions that we have not discussed,

16 questions that I have not raised and you have answers

17 for which could underline what role you see us playing

18 in terms of your saying encouraging the development of

19 new media.

20 7178 MS JACKSON: The suggestion that we

21 made about public notice 1997-98, I think could help.

22 In the short term, some of the smaller funds that are

23 dealing with -- who want to deal with new media and can

24 do it, I think, fairly quickly. I think that would be

25 an immediate and useful help to encourage without




1 upsetting the apple cart in the larger view, perhaps.

2 7179 And also I think just to -- I have

3 had the impression that people somehow think that new

4 media is a very lucrative area and from the

5 implications we have seen, maybe it is the kind of

6 applications we are getting. But I don't know. But it

7 is not.

8 7180 And I would hope that people would

9 realize that or, not realize, but perhaps agree that

10 there is a lot of developmental work to be done and

11 there needs to be some kind of assistance given that

12 there is not a bank loan and that it is a little bit of

13 a Wild West right now and that is okay. But we just

14 have to recognize it, I think.


16 7182 THE CHAIRPERSON: Thank you,

17 Commissioner Pennefather.

18 7183 Counsel?

19 7184 MS MOORE: Thank you, Mr. Chairman.

20 7185 You noted this morning that in your

21 view it is important to create incentives with respect

22 to the creation of new media content rather than

23 imposing obligations on creators and service providers.

24 And at the top of page 4 of your oral comments, you

25 refer to public notice 1997-98 and make a suggestion




1 with respect to that.

2 7186 I wonder if you could just elaborate

3 on how in your view that recommendation would

4 contribute to achieving your vision of creating

5 incentives rather than imposing obligations.

6 7187 MS JACKSON: I think that in terms of

7 the 5 per cent of the gross annual revenues that BDUs

8 are expected to contribute to the creation of Canadian

9 programming, the funds such as the Fundy fund that we

10 have has a provision, would like to have a provision

11 for new media. And, I mean, I think that that could --

12 is an incentive to a BDU such as Fundy 2. Because they

13 are a full service company now. They are looking to

14 the Internet, they are looking to find product. And I

15 think that this could benefit everyone in terms of

16 product for them down the road, assistance to --

17 because the Fundy fund is for specifically for the

18 Maritimes to help the community there, to get going and

19 I think everyone wins.

20 7188 MR. FROMAN: I think part of the

21 problem that we stand from, from our funds point of

22 view is that the need to -- the ability for a new media

23 producer to be able to access a number of the other

24 emerging or existing funds now, like we said, there are

25 only a couple of funds there are non-repayable. And




1 Stentor, which is one of them, will not exist next

2 year.

3 7189 We see this as a opportunity to

4 continue sort of the work our fund has been doing in

5 the sense that in order to help new media producers,

6 and we see a lot of the applications that come in that

7 need further development and understand that they need

8 to be able to work through their business models and be

9 able to get prototypes developed in order to access

10 these other funds, there needs to be assistance with

11 that and we saw this as a logical mechanism for that to

12 be able to allow the BDUs to provide that support.

13 7190 MS MOORE: So just to clarify for the

14 record, you are suggesting that there should be no

15 obligation, per se. The obligation should be removed

16 and the BDUs should be able to choose where to direct

17 their contribution?

18 7191 MR. FROMAN: Well, no, I think they

19 can choose whether to direct. The obligation is to

20 have a broadcast licence associated with the projects

21 that go after that percentage.

22 7192 MS MOORE: Thank you. Just one last

23 question: At page 9 of your written submission, you

24 refer to the final report on the Cancom new media

25 sessions prepared by a multimediator and in particular




1 you are referring to appendix 5 with respect to how

2 Cancom could be defined.

3 7193 I do not believe that that report is

4 on the record and I was wondering if you would be in a

5 position to file that on the record by the end of this

6 week. Thank you.

7 7194 Those are my questions, Mr. Chairman.

8 7195 THE CHAIRPERSON: Thank you Counsel

9 Moore.

10 7196 I just have one important question

11 Mr. Froman. Will you be attempting to beat Mr.

12 Goldstein in terms of winning the CRTC award in terms

13 of the most appearances with different intervenors or

14 is this your final appearance?

15 7197 MR. FROMAN: I would not even begin

16 to compete with Mr. Goldstein. I will be able to say

17 on the record that the reason I am here today is not as

18 a consultant in the industry. I have chosen to be on

19 the board of this fund because I believe in what it

20 does and it is a challenging -- you know, and I see it

21 has been a bright light in terms of three years ago

22 funding new media.

23 7198 So to duck around that question, no,

24 I will try not to.

25 7199 THE CHAIRPERSON: Your participation




1 is appreciated, nonetheless.

2 7200 Thank you very much for your

3 presentation this morning. We will take our lunch

4 break now and reconvene at 1:30.

5 --- Recess at / Suspension à 1200

6 --- Upon resuming at / Reprise à 1330

7 7201 THE CHAIRPERSON: We will return to

8 our proceeding now.

9 7202 Madame la Secrétaire.

10 7203 Mme BÉNARD: Merci, Monsieur le

11 Président.

12 7204 La prochaine présentation sera celle

13 de Cogeco inc.


15 7205 M. MAYRAND: Monsieur Colville,

16 membres du Conseil, bien le bonjour.

17 7206 Mon nom est Yves Mayrand. Je suis

18 vice-président, Affaires juridiques, de Cogeco inc. Je

19 suis accompagné de M. Jacques Bégin, vice-président et

20 directeur général de Câble Québec. Nous vous

21 remercions de l'occasion que vous nous donnez de

22 comparaître aujourd'hui dans le cadre de cette audience

23 publique sur les nouveaux médias.

24 7207 We have filed a short submission as

25 part of this initial stage of this hearing which




1 clearly states our views on the basic issues that the

2 commission has raised for comment by the interested

3 parties. It seems to us that our views are quite

4 similar to those of the great majority of parties who

5 have filed comments or made presentations at this

6 public hearing. We also wish to point out that we

7 share the views already expressed by the CCTA, which of

8 course we don't propose to repeat today.

9 7208 Jacques Bégin will provide you with

10 an overview of our interest in, and involvement with,

11 new media. I will later conclude our presentation with

12 a brief summary of our position on the suggested

13 regulatory approach with respect to new media.

14 7209 Jacques.

15 7210 M. BÉGIN: Bonjour.

16 7211 Notre expérience avec les nouveaux

17 médias remonte principalement au projet pilote

18 d'autoroute de l'information que nous avions mis sur

19 pied dans la région de la Mauricie il y a déjà quelques

20 années avec l'appui du Gouvernement du Québec. À

21 l'époque, ce projet constituait une première en

22 Amérique du Nord. Nous avions fait le pari que

23 l'Internet serait le forum commun des nouveaux services

24 interactifs et que l'ordinateur personnel serait

25 l'outil privilégié pour accéder à ce forum à court et à




1 moyen termes.

2 7212 Bien sûr, la réalité a dépassé nos

3 prévisions les plus optimistes. La diversité, la

4 vitesse de développement et la vigueur des nouveaux

5 médias ont de quoi étonner les observateurs même les

6 plus avertis.

7 7213 Nous avons tiré plusieurs

8 enseignements précieux de notre projet pilote.

9 L'Autoroute de l'information du Centre du Québec est à

10 la source de notre service d'accès Internet à haut

11 débit par modem câble connu sous le nom de marque

12 Rapidus au Québec et sous la marque Wave en Ontario.

13 Ce service compte au moment où je vous parle quelque

14 18 000 clients. Non seulement le nombre de clients de

15 notre service d'accès Internet à haut débit est-il en

16 croissance rapide mais leur satisfaction pour ce

17 service est très élevée.

18 7214 Au cours des trois dernières années,

19 le Groupe Cogeco a principalement dirigé ses efforts et

20 ses ressources disponibles vers le développement de

21 l'infrastructure requise pour offrir l'accès aux

22 nouveaux services interactifs. Nous avons, année après

23 année, réinvesti la majeure partie de nos fonds

24 autogénérés pour moderniser nos réseaux, accroître leur

25 fiabilité et les rendre bidirectionnels, ce qui est




1 nécessaire lorsque l'on pense offrir de nouveaux

2 services interactifs par câble. Nos réseaux sont

3 présentement bidirectionnels à plus de 60 pour cent et

4 nous comptons bien qu'ils soient entièrement

5 bidirectionnels pour l'an 2000.

6 7215 Nous devons cependant relever

7 concurremment d'autres défis importants au plan de

8 l'infrastructure, plus particulièrement en ce qui a

9 trait à l'accroissement de la capacité de certains de

10 nos réseaux, le déploiement de la compression vidéo

11 numérique et l'offre d'un service téléphonique local et

12 interurbain sur IP, le protocol Internet. Nous sommes

13 donc appelés à accroître considérablement notre

14 investissement total dans une infrastructure qui se

15 doit d'être la plus polyvalente et performante qui

16 soit.

17 7216 L'ampleur et la complexité des

18 efforts requis au plan de l'infrastructure réseau et

19 l'offre d'un service d'accès Internet à haut débit par

20 modem câble ont fait en sorte que nous avons été

21 comparativement moins impliqués dans le développement

22 de contenus multimédias ou interactifs. Nous avons

23 cependant contribué à des projets importants avec des

24 partenaires de renom. Notamment, nous avons collaboré

25 avec l'Université du Québec à Trois-Rivières au




1 développement et à la diffusion en primeur d'un

2 véritable cours multimédia de niveau universitaire

3 dûment accrédité, un cours qui fait encore école

4 aujourd'hui, si vous me permettez l'expression. Nous

5 avons également établi des programmes de bourses

6 reliées au multimédia avec l'Université du Québec à

7 Rimouski ainsi que l'Université du Québec à Trois-

8 Rivières.

9 7217 En plus d'être un membre actif du

10 projet de câbloéducation dans les zones de desserte où

11 nous sommes, nous nous sommes par ailleurs impliqués

12 dans le soutien de nombreux organismes de promotion

13 sociale, économique et culturelle de nos régions en les

14 hébergeant gratuitement sur nos serveurs.

15 7218 Il y a quelques mois à peine, nous

16 avons annoncé notre prise de participation dans @Home

17 Canada, avec pour objectif de pouvoir offrir un service

18 d'accès Internet encore meilleur non seulement au plan

19 technique mais aussi au plan des contenus.

20 7219 Plusieurs autres joueurs importants

21 nous talonnent déjà avec leur infrastructure

22 concurrente de transmission filaire ou sans fil et

23 l'offre de services d'accès Internet à vitesse élevée.

24 La politique de concurrence sur l'autoroute de

25 l'information est donc déjà solidement implantée sur le




1 terrain et les forces du marché sont à l'oeuvre.

2 7220 Dans ce contexte de vive concurrence

3 et de libre entrée sur le marché, rien n'empêche tout

4 nouveau joueur qui le désire de mettre en place ses

5 propres infrastructures pour l'offre des services

6 associés aux nouveaux médias. Il appartient aux

7 actionnaires de chaque joueur de décider s'ils veulent

8 prendre le risque financier qui en résulte. Nos

9 actionnaires ont pour leur part choisi de le faire. Il

10 est cependant primordial que la réglementation ne serve

11 pas à détourner ou transférer les risques financiers

12 d'un joueur à l'autre ou autrement récompenser les

13 joueurs qui prennent le moins de risques.

14 7221 D'après nous, il faut faire le même

15 constat de vive concurrence du côté des fournisseurs de

16 contenus ou de services à valeur ajoutée que l'on

17 retrouve sur l'Internet. Il y a présentement une

18 floraison de services développés par des entreprises de

19 taille et de provenance différentes. Le milieu est en

20 pleine ébullition et des partenariats voient le jour à

21 un rythme accéléré.

22 7222 Or, toute cette activité, toute cette

23 effervescence, que ce soit dans notre cas ou dans le

24 cas d'autres intervenants du milieu des nouveaux

25 médias, est survenue dans un contexte d'absence d'un




1 cadre de réglementation défini. De plus, les

2 entreprises canadiennes et les Canadiens ont

3 manifestement réussi à tirer leur épingle du jeu dans

4 les circonstances.

5 7223 Le premier bénéficiaire de ce nouvel

6 environnement de choix individuel à l'échelle

7 planétaire et en temps réel est sans contredit le

8 consommateur. Pour notre part, nous avons décidé de

9 prendre résolument le parti du consommateur et toutes

10 nos interventions récentes traduisent ce parti pris

11 fondamental. Notre intervention dans la présente

12 instance n'y fait pas exception. Or, les consommateurs

13 qui vous ont exprimé un point de vue ont montré combien

14 ils chérissent un environnement de libre choix sur

15 Internet malgré les inconvénients ou les imperfections

16 que cette liberté peut comporter. Ceci nous amène

17 évidemment à la question du cadre de réglementation.

18 7224 Yves.

19 1340

20 7225 MR. MAYRAND: In a nutshell, based on

21 our own experience with traditional as well as new

22 media, we feel that the new media: Firstly, constitute

23 a novel phenomenon that has very little in common, if

24 anything, with the traditional broadcast media;

25 secondly, they are still in their early development




1 stage and are evolving very rapidly; thirdly, they

2 cannot be readily categorized in accordance with

3 existing categorizations under the current regulatory

4 frameworks for either broadcasting or

5 telecommunications; fourthly, they do not appear to

6 have at this time a critical adverse effect on

7 traditional broadcasting or telecommunications

8 services; and fifthly, they would prove very difficult

9 to regulate effectively for a number of reasons.

10 7226 Therefore, in our opinion, the best

11 policy approach for the Commission at this juncture

12 would seem to us to refrain from regulatory

13 intervention under the traditional statutory schemes

14 and to allow the market forces to shape the new media,

15 while continuing to monitor their development and the

16 extent of their real impact, and I emphasize "real

17 impact", on the traditional media and services that the

18 Commission currently regulates.

19 7227 This does not mean that the

20 Commission would be remiss in the fulfilment of its

21 responsibilities. Quite the contrary, well before the

22 new paradigm of the information highway as fully

23 acknowledge and discussed, Parliament was already aware

24 of the convergence phenomenon and saw the need to

25 ensure that the Commission had the necessary discretion




1 to refrain from regulating in circumstances where

2 regulatory intervention would not serve the public

3 interest or would prove to be impractical.

4 7228 Also, while there may be some issues

5 arising with respect to the applicability of current

6 statutory schemes to certain specific new media

7 services, the Commission should not see itself as being

8 required to take the most all-encompassing

9 interpretations that can be suggested in the

10 circumstances, particularly where this would clearly

11 lead to impractical results.

12 7229 It is worth noting that in spite of

13 the current statutory ambiguities, which have been

14 widely acknowledged for quite some time already, the

15 various players in the field of new media are working

16 hard at making their case in the Canadian marketplace

17 rather than in the Canadian courts.

18 7230 M. BÉGIN: Il ne faudrait pas déduire

19 non plus que la prudence et la réserve dans l'approche

20 réglementaire envers les nouveaux médias mineraient le

21 rôle que le Conseil joue en ce qui a trait à la

22 radiodiffusion et aux télécommunications au Canada.

23 7231 D'une part, le Conseil a toujours pu

24 jouer un rôle important pour ces deux secteurs

25 d'activité bien que d'autres secteurs complémentaires




1 ou concurrents de grande envergure comme, par exemple,

2 le cinéma, l'édition ou la vidéo n'aient pas été

3 réglementés. D'autre part, le rôle du Conseil dans les

4 secteurs de son ressort exclusif a déjà évolué en

5 grande mesure de la réglementation détaillée à la

6 supervision générale au fur et à mesure du

7 développement des forces du marché dans ces mêmes

8 secteurs.

9 7232 À notre point de vue, l'absence de

10 réglementation des nouveaux médias s'inscrit

11 naturellement dans le sens de cette évolution. Il vous

12 revient d'en faire part au gouvernement fédéral et de

13 lui recommander par ailleurs de prendre les mesures qui

14 sont de son ressort, comme la mise à jour de ses lois,

15 l'application des sanctions qu'elles comportent, la

16 conclusion de conventions internationales et les

17 encouragements fiscaux ou financiers pour les produits

18 ou services canadiens des nouveaux médias.

19 7233 Nous vous remercions de nous avoir

20 reçus aujourd'hui et nous sommes prêts à répondre à vos

21 questions.

22 7234 LE PRÉSIDENT: Merci beaucoup. I

23 will turn now to Commissioner Pennefather.


25 Mr. Chairman.




1 7236 Good afternoon, gentlemen.

2 J'aimerais commencer avec quelques clarifications vis-

3 à-vis la présentation orale que vous avez faite et

4 retourner à la soumission écrite, qui a été répétée

5 dans vos commentaires aujourd'hui d'une façon plus

6 précise.

7 7237 Monsieur Bégin, vous vous êtes

8 prononcé sur certains aspects de vos efforts avec les

9 nouveaux médias, les expériences, projets pilotes, dans

10 la région de la Mauricie, et caetera, et vous avez

11 utilisé le terme de forum commun des nouveaux services

12 interactifs, et que l'ordinateur personnel serait

13 l'outil privilégié pour accéder à ce forum. C'est un

14 terme qu'en anglais on avait entendu comme "electronic

15 commons", mais dans un contexte un peu différent.

16 7238 Pourriez-vous expliquer ce que ça

17 veut dire, le forum commun?

18 7239 M. BÉGIN: En fait, il faut juste se

19 souvenir que l'industrie du multimédia dans notre cas

20 est jeune. On a débuté le service à haute vitesse en

21 novembre 1995, début 1996 -- donc on a à peine trois

22 ans, deux ans et demi -- et nous devions à l'époque

23 choisir entre l'aspect d'offrir l'ensemble de nouveaux

24 services via le téléviseur ou l'ordinateur.

25 7240 Il y a des entreprises de câble qui




1 ont choisi à l'époque de fonctionner par le téléviseur.

2 Il y avait un projet pilote aussi au Québec qui

3 s'appelait UBI (ph.) et qui devait fonctionner au

4 Saguenay, et nous avions choisi à l'époque l'ordinateur

5 comme étant le média privilégié pour offrir des

6 services à haute vitesse.

7 7241 Nous avions besoin de cette haute

8 vitesse là particulièrement dans le cadre du cours

9 multimédia que nous avions bâti avec l'Université du

10 Québec à Trois-Rivières, un cours qui comprenait 500

11 vidéoclips de 30 secondes que l'étudiant pouvait avoir

12 de son domicile; donc pour transmettre du serveur de

13 l'université jusqu'au domicile du résident, il fallait

14 avoir de la grande vitesse. On ne pouvait pas

15 transmettre du vidéo à 28,8, c'était impossible. Nous

16 avions aussi 11 000 hyperliens sur les différents sites

17 Internet qui existent à travers le monde pour permettre

18 à l'étudiant d'obtenir ses crédits au niveau de ce

19 cours universitaire.

20 7242 Donc pour nous il devenait impératif

21 au moment où on se parlait -- et on parle de 1995 --

22 d'avoir un médium qui permette à l'étudiant de pouvoir

23 avoir accès aux multimédias, et le seul qui rencontrait

24 nos objectifs à l'époque était l'ordinateur. C'est de

25 là que vient le passage dans le texte.





2 commun, c'est un forum de communication et d'accès à

3 certains services dans l'expérience que vous avez

4 faite, mais en général quel type de services -- vous

5 parlez des nouveaux services interactifs -- est la base

6 de votre intérêt dans l'Internet?

7 7244 M. BÉGIN: En fait tous les services

8 interactifs, par définition d'Internet, sont

9 accessibles à notre clientèle. Nous sommes un

10 transporteur de services; à ce niveau-là, nous donnons

11 accès à très grande vitesse à la clientèle.

12 7245 L'expérience pilote qu'on a eue avec

13 l'université nous montrait à quel point l'interactivité

14 pouvait être importante pour l'étudiant. Juste pour

15 vous donner un exemple, nous avions deux groupes

16 d'étudiants: un groupe d'étudiants qui suivaient le

17 cours de façon magistrale à l'université et un groupe

18 d'étudiants qui suivaient le cours à la maison. Les

19 résultats sont à peu près identiques entre les deux.

20 7246 Ce qu'on a constaté, finalement,

21 c'est que le produit, la consommation multimédia était

22 accessible, mais que l'interaction entre l'étudiant et

23 le professeur demeurait quelque chose qui manquait.

24 Donc ça nous permet de nous adapter et de voir à quel

25 point c'est important que les gens se parlent entre




1 eux. Mais l'avantage était que les étudiants pouvaient

2 suivre le cours à l'heure de leur choix, les fins de

3 semaine ou le soir, alors qu'ils n'étaient pas pris

4 pour se présenter à une heure précise.

5 7247 Donc il y a un mixage qu'on doit

6 faire à ce niveau-là.


8 être claire aussi, c'est via le câble chez Cogeco qu'on

9 peut avoir un accès aux services interactifs qui

10 existent sur l'Internet aujourd'hui et demain. L'autre

11 jour on avait une personne qui était avec Telus qui a

12 parlé du fait qu'en plus de l'Internet en soi il y a

13 possibilité d'avoir accès aux services interactifs par

14 le câble, un câble plus avancé disons, "expanded cable"

15 comme il a dit en anglais.

16 7249 Est-ce que c'est clair que la façon

17 dont vous travaillez, c'est d'avoir l'accès à

18 l'Internet ou c'est l'accès directement à certains

19 services interactifs? Est-ce que l'Internet est

20 toujours impliqué dans le processus?

21 7250 M. MAYRAND: Je peux peut-être tenter

22 d'amorcer la réponse à cette question-là.

23 7251 Effectivement -- malheureusement je

24 n'étais pas présent lors de la présentation -- je crois

25 comprendre qu'on fait ici référence à la tendance que




1 nous avons comme câblodistributeur, ce que d'autres

2 dans des entreprises concurrentes ont également

3 tendance à faire, de développer une infrastructure à

4 grand débit et des sites résidents ainsi que des

5 contenus propres à leurs serveurs de façon à accroître

6 généralement la qualité de l'expérience que vit

7 l'utilisateur des services.

8 7252 Alors effectivement il y a moyen de

9 complémenter le réseau Internet général avec des

10 investissements additionnels, voire même certains ponts

11 ou circuits parallèles, et ainsi tenir compte de

12 l'augmentation de la demande, des besoins croissants de

13 rapidité et dégorger les goulots d'étranglement qui

14 commencent déjà à se produire bien qu'on soit, comme

15 Jacques le disait, encore dans l'enfance de l'art.

16 7253 Alors effectivement il y a une

17 tendance qui se dessine, et nous n'y faisons pas

18 entièrement exception puisque nous avons développé au

19 fil des années, en même temps que notre service d'accès

20 Internet à haut débit, une infrastructure interurbaine

21 d'interliaison par fibre qui n'est pas spécifiquement

22 axée sur les besoins de l'Internet, elle sert plusieurs

23 besoins, dont évidemment l'acheminement de signaux

24 conventionnels de télévision pour les fins de nos

25 réseaux, mais qui a l'avantage aussi de favoriser le




1 développement des nouveaux services et d'éviter les

2 problèmes d'engorgement.


4 discussions que nous avons eues ce matin avec the

5 Canadian Independent Film and Video Fund, on a parlé de

6 l'importance, dans la définition de "nouveaux médias",

7 de l'interactivité. Est-ce que pour vous c'est

8 primordial en faisant une définition de ce type de

9 services?

10 7255 M. BÉGIN: C'est clair, et d'ailleurs

11 l'expérience qu'on avait mise de l'avant allait dans ce

12 sens-là de permettre vraiment aux gens de pouvoir

13 interagir et de développer le réseau de distribution,

14 de câblodistribution, en étant bi-directionnels. Je

15 pense qu'on a été dans les premières entreprises de

16 câble dans les années 1993-94 à recâbler, à moderniser

17 les réseaux pour en faire des réseaux bi-directionnels.

18 7256 Donc l'objectif qu'on poursuivait

19 était l'interactivité. On pouvait l'apercevoir en 1993

20 pour placer des commandes ou des choses comme ça. Elle

21 a évolué en 1995-96 vers les services multimédias, et

22 aujourd'hui on parle d'une interactivité complète qui

23 peut même aller jusqu'à la téléphonie. Donc on voit

24 l'évolution de ce que le réseau de câble peut faire au

25 niveau de l'interactivité comme telle de chacun des




1 citoyens qui est branché sur le système.


3 services nouveaux qui peut-être est interactif, est-ce

4 que d'après vous ça peut être appelé un programme? À

5 titre d'exemple on parle d'un film qui aura une couple

6 de possibilités comme fin et on peut faire le choix.

7 Est-ce que pour vous ça rentre plus dans la zone de

8 programmation? C'est une discussion qu'on a avec

9 beaucoup de monde autour de la table.

10 7258 M. MAYRAND: Effectivement, il y a

11 des parallèles qui peuvent être tracés pour certains

12 types particuliers de contenu qui présentent des

13 caractéristiques qui à première vue ressemblent à des

14 choses qu'on peut retrouver sur les médias qu'on dirait

15 traditionnels de la télévision et de la radio, par

16 exemple.

17 7259 Il y a, je pense, bon nombre de

18 participants à cette audience qui vous ont fait

19 remarquer, cependant, qu'il y a une réalité fort

20 différente en-dessous des apparences. La réalité est

21 différente à laquelle ont fait face lorsqu'il y a

22 acheminement de ce type de contenus, et principalement

23 de ce type de contenus, c'est qu'en fait on a vraiment

24 des échanges de paquets de données dans une relation

25 interactive qui implique un individu avec un serveur ou




1 des serveurs ou un très petit nombre d'individus.

2 7260 Alors il y a des questions

3 importantes qui se posent au point de vue de

4 l'interprétation de l'intention législative en ce qui a

5 trait à la notion de "programme" et de "programmation".

6 Il est clair que ce genre de manifestations ne

7 constituent pas une programmation dans le mesure où

8 elle n'est pas assujettie à un horaire prévisible, à

9 une structure prévisible de diffusion, à une séquence

10 particulière, à un endroit particulier. Alors on

11 trouve très peu, en pratique, de parallèle véritable

12 avec ce qu'on peut retrouver sur les médias

13 traditionnels de plus large diffusion.

14 7261 Le deuxième aspect d'interprétation

15 délicat qui se pose, c'est de savoir si ce type de

16 programmes, si on convient de les appeler des

17 programmes, est effectivement offert au public et si

18 c'est bien la notion que nos législateurs avaient en

19 tête lorsqu'ils ont parlé de programmation offerte au

20 public parce qu'on parle encore une fois d'une relation

21 très, très pointue, individuelle et interactive d'un

22 individu avec un ou des serveurs.


24 la suggestion qui a été faite dans le même contexte de

25 discussion qu'à un moment donné est-ce que ce sera




1 possible, à titre d'exemple... j'imagine que vous serez

2 d'accord qu'à un moment donné il sera acceptable de

3 visionner un film, un vidéo sur l'Internet. On a des

4 opinions différentes sur le quand, mais ça sera

5 possible à l'avenir. C'est dans ce contexte-là qu'on

6 demande est-ce que c'est possible que ce même film,

7 même avec un aspect d'interactivité, puisee être vu en

8 même temps, disons, par plusieurs personnes.

9 7263 ici je vois que c'est "one on one"

10 dans ce sens-là; ça a été présenté dans le contexte

11 qu'il y aura la demande de plusieurs personnes

12 d'utiliser l'Internet en même temps.

13 7264 Est-ce que ça change un peu l'opinion

14 de la définition de "réception" que vous venez de nous

15 donner?

16 7265 M. MAYRAND: Je pense qu'il y a là

17 aussi peut-être une difficulté pratique sur ce qu'on

18 entend vraiment par "en même temps" parce que, si vous

19 voulez être rigoureusement précis -- et d'aucuns

20 n'hésiteront pas à l'être si on leur suggère que ce

21 type d'échange constitue un échange ou du moins une

22 diffusion d'émission en même temps à un ensemble ou

23 sous-ensemble du public consommateur -- en fait les

24 critiques vous diront, non, il s'agit d'échanges

25 séquentiels de paquets de données. C'est toujours la




1 réalité fondamentale de ce nouveau moyen de consommer

2 des contenus de divers types. Alors il est assez

3 difficile de s'en sortir probablement sur cette base-

4 là.

5 7266 En pratique on semble vraiment, dans

6 ce genre de scénario, s'orienter vraiment vers un mode

7 de consommation et de diffusion qui s'apparente

8 beaucoup plus à l'édition et au commerce de détail

9 qu'au concept de radiodiffusion auquel nous sommes

10 habitués et que, manifestement, le législateur visait

11 lorsqu'il a modifié sa loi pour la dernière fois il y a

12 déjà un bon nombre d'années.


14 don't mind, I will switch to English, Mr. Mayrand,

15 because I would like to talk about some of your

16 comments in the written submission and come back to

17 your oral submission.

18 7268 But continuing along the same lines,

19 certainly we are talking about one of the major points

20 of our discussions throughout this hearing and

21 certainly the demand -- one of the consensus we are

22 hearing is the need for certainty in this area.

23 Although I recognize that you feel there is no need for

24 the Commission to act in a regulatory fashion at this

25 time, could you suggest any other ways which we could




1 convey greater certainty about new media content as to

2 it's not being programming, it's not being

3 broadcasting? Could you just clarify for us

4 specifically how you would address this?

5 7269 MR. MAYRAND: Well, I think we have

6 quite directly stated in our written submission that

7 there are some issues that have been lying out there

8 for quite some time already with respect to the

9 applicability of certain definitions and this

10 uncertainty that you are just referring to.

11 7270 We noted that the Commission was

12 already well aware of that some years ago and in

13 issuing its convergence report quite appropriately

14 suggested that there is some effort and thinking that

15 ought to take place where it all starts from and that

16 is within the statutory framework.

17 7271 You know, this whole new environment

18 and the new media phenomenon through the Internet, and

19 through other means also is evolving extremely rapidly.

20 It shouldn't come as a tremendous surprise that there

21 is some further overview that ought to be done with

22 respect to our basic statutory schemes.

23 7272 There hasn't been, we feel until this

24 point, an overwhelming degree of pressure to yet

25 revisit the issues of what should be the appropriate




1 definition of broadcasting, for example, but those

2 uncertainties have been there for quite some time.

3 They will continue to manifest themselves in particular

4 instances, unless the powers that be take the matter

5 seriously and look at whether some changes are needed.

6 7273 We also pointed out that you have a

7 very difficult task in applying to a certain extent

8 policy objectives under the Telecommunications Act and

9 a different set of policy objectives under the

10 Broadcasting Act in a converging environment because it

11 is quite obvious to the reader of the two policy

12 statements that if there is some blurring or some

13 potential confusion between the two objects that are

14 being targeted by either one, the policy objectives are

15 not necessarily always consistent in all respects.

16 7274 We pointed out that certainly under

17 the Broadcasting Act there is considerably emphasis on

18 cultural and social objectives and the emphasis under

19 the Telecommunications Act are much more so oriented

20 towards economic considerations and cost considerations

21 and efficiency considerations.

22 1400

23 7275 That's not something that in the

24 present circumstances you can do much about. It's just

25 something that has to be thought over again by those




1 who have the power and the authority to look at those

2 statutory schemes.


4 take you into a couple of areas, one on your point

5 about there is no pressing demand at the moment. I

6 think you state in paragraph 23 of your written

7 submission:

8 "There is no empirical evidence

9 demonstrating regulatory

10 intervention. To prevent or

11 curtail that impact is either

12 necessary, justified or feasible

13 at this time."

14 7277 Yet you have heard, as we have, that

15 broadcasters are concerned. One intervenor, namely

16 Telus, stated:

17 "New media will become the

18 primary source of information

19 and entertainment for

20 consumers."

21 7278 There was also a discussion at that

22 panel, the Telus panel, expressing the view that:

23 "-- the shift of advertising

24 dollars from traditional

25 broadcasting to the Internet




1 won't be a gradual and

2 incremental shift. Instead, the

3 shift of advertising dollars

4 will happen more quickly and

5 dramatically than we expect or

6 may have seen in other media

7 transitions. There is in effect

8 a dam waiting to be broken."

9 7279 I would like you to comment on this

10 latter position as one of the indicators that there

11 will be a fairly dramatic effect in their thinking on

12 the traditional broadcasting milieu and that it is

13 something that should concern us sooner rather than

14 later in terms of how one area is affecting the other.

15 7280 MR. MAYRAND: We would acknowledge

16 there is some important element of truth in that

17 statement, but to us it's not the entire reflection of

18 the reality. Let me explain.

19 7281 Clearly, operators of so-called

20 traditional media are somewhat concerned about the very

21 rapid and fast evolving growth of services from the new

22 media, mostly on the Internet.

23 7282 Now, most of those players, I would

24 say the very large majority of them from what I could

25 gather from the record of this proceeding, readily




1 acknowledged that this phenomenon is inevitable and you

2 might as well work with it.

3 7283 Certainly the attitude has been and a

4 number of broadcasters, I believe, have told you "Oh,

5 yes, we are jumping on the new media bandwagon. We are

6 not making tons of money. Some broadcasters have

7 managed very aptly actually to develop new profitable

8 businesses using the new media, but you could sense

9 that there is an attitude that yes, of course, there is

10 a shift, yes, of course, there is an evolution. It is

11 inevitable.

12 7284 Nobody knows when that dam will

13 break. We are beginning to see some leakage, some

14 cracks, but we are not yet ready to evacuate the whole

15 valley and we might as well start using what we can in

16 the possibilities of this new environment.

17 7285 In our view, this is clearly the

18 better way to go about this issue.


20 watch it evolve.

21 7287 MR. MAYRAND: Not wait and watch. Be

22 proactive.


24 way?

25 7289 MR. MAYRAND: Canadian businesses




1 have both established and you have opportunities to

2 seize with the new media. A number of them are already

3 doing precisely that. There certainly isn't a better

4 hedging strategy than to proactively pursue these

5 opportunities. That's what we suggest to you should

6 remain the preferred course of action.


8 area of concern raised to us is on the access side.

9 Some ISPs, for example, have appeared at the hearing

10 arguing that the lack of availability to high speed

11 services, which Mr. Bégin mentioned earlier as crucial

12 to presenting new services, and that availability at

13 reasonable rates is a barrier to the growth and

14 development of new media.

15 7291 They have stated among other things

16 that third party access to cable networks is a

17 deterrent to competitors and end users in accessing and

18 distributing new media services.

19 7292 Can you comment on these concerns and

20 provide us with any information that would clarify

21 that?

22 7293 MR. MAYRAND: I suppose the first

23 comment I would wish to make is that some Internet

24 service providers have appeared before you and actually

25 stated the tremendous growth that they have been able




1 to experience in the current environment with respect

2 to the offer of their own services and in some cases to

3 their own facilities.

4 7294 We are somewhat mystified that there

5 could be this tremendous growth opportunity for further

6 growth, that most Internet service providers would

7 readily agree, if not all of them, that there has to be

8 essentially no regulatory intervention preventing

9 market forces from playing their full role.

10 7295 At the same time, they are saying

11 that the Commission ought to involve itself very, very

12 immediately and in a very determining way in securing

13 access to certain facilities for certain of those

14 providers.

15 MEDI That's essentially why, and I don't

16 want to get into a proceeding that is before you. The

17 Commission has an ongoing process dealing with this

18 very specific issue. Of course, there are ongoing

19 discussions on how to accommodate exactly access by

20 third parties with respect to cable facilities.

21 7297 We think it's appropriate for us to

22 make the comment which we made in our verbal

23 presentation today that really there are announcements,

24 even over the last few days, of new entrants saying

25 that they are coming up with high speed Internet access




1 service offerings.

2 7298 Some of those options are not wired

3 line, they are wireless. This clearly demonstrates

4 that there is some considerable degree of rivalry and

5 this rivalry will increase inevitably.

6 7299 We pointed out in our presentation

7 today that essentially all the players interested in

8 any number of options for high speed Internet access

9 service have certainly the ability or the option,

10 should they wish to do so and be prepared to take the

11 risk, to set competing facilities. A number of them

12 are actually moving in that direction.

13 7300 I guess the only impediment is that

14 some of these players don't meet Canadian ownership

15 requirements for carriers. That's obviously a very

16 specific regulatory policy issue. It doesn't, I think,

17 have to do with the particular issue of access per se.

18 7301 Certainly from the vantage point of

19 our own shareholders who have reinvested the better

20 part of all their generated cash flows over the last

21 five years or so in developing a modern broadband

22 bidirectional infrastructure to accommodate these

23 services through a wired line facility, which is our

24 particular type of infrastructure.

25 7302 It would certainly be very much a




1 concern to us if we had to tell our shareholders ex

2 post facts "Well, you know, we have taken these risks.

3 We weren't sure of the cash flows from new services

4 that this would generate. We are in a competitive

5 environment, but there are some players out there that

6 can have access to these facilities that you have

7 financed at set terms". We think that is a real issue.


9 your point of view, it makes more sense to keep some

10 form of limitation on that access. From where you

11 stand, it would not be an appropriate business plan to

12 not promote your own access networks and your own

13 services.

14 7304 I see in the @home discussion you are

15 getting into the content side as well.

16 7305 MR. MAYRAND: We are not suggesting

17 that there ought to be limitations to access. I guess

18 with the development of a variety of broadband options

19 and as the market takes hold, economics will dictate

20 access to a large extent. That's essentially what we

21 are saying.

22 7306 We have some concerns with the notion

23 that in this market-driven environment, there ought to

24 be very narrowly defined and set terms for this access.





1 context, you suggest in your recommendation (d) that

2 the Commission:

3 "-- let Canadian communications

4 companies involve themselves

5 freely in the new media, subject

6 only to reasonable safeguards

7 against dominance,

8 discrimination or undue

9 preference by any particular

10 group."

11 7308 Do you have any suggestions in this

12 regard how this would be handled then?

13 7309 MR. MAYRAND: I think it would be

14 difficult for us to make very detailed suggestions in

15 that regard. In a submission, actually an intervention

16 that we filed in the context of an upcoming hearing on

17 new specialty services, we have indicated that in our

18 view the Commission can start looking at criteria of a

19 more economic nature and there are examples in place

20 that apply to other industries in this country and

21 elsewhere.

22 7310 There may be better models, but we

23 think that the Commission as we all evolve towards more

24 market-driven circumstances has to look more with

25 respect to dominance in terms of fairly objective




1 market share criteria for the relevant market.

2 7311 That's something, as I mentioned,

3 that is currently being used in analysing market power

4 in a number of other industry sectors.

5 7312 Essentially what is happening is that

6 we are moving towards an increasingly dynamic and

7 competitive market in the broadcasting and Telecom

8 arena. It would appear to us as quite logical that you

9 would increasingly look towards those types of

10 criteria.

11 7313 The exact threshold, the exact areas

12 of concern, I don't think really it's up to us to tell

13 you what they should be, but we have certainly pointed

14 out the direction in which we think this should be

15 evolving.


17 have, and you have been very clear in your position

18 with respect to how the Commission should resolve some

19 of the uncertainties in these areas.

20 7315 I think you have also made a

21 suggestion which you may want to clarify in your oral

22 presentation today, how you see us, what our role would

23 be:

24 "Il vous revient d'en faire part

25 au gouvernement fédéral et de




1 lui recommander par ailleurs de

2 prendre les mesures qui sont de

3 son ressort..."

4 7316 And you name a few areas.

5 7317 Why have you indicated:

6 "... sanctions qu'elles

7 comportent, la conclusion des

8 conventions internationales et

9 les encouragements fiscaux ou

10 financiers..."?

11 7318 Would you like to elaborate on why

12 you think these are important steps and what our role

13 would be in that regard?

14 7319 MR. MAYRAND: If I may, let me take

15 these elements one by one.

16 DIA\ The first element that we mentioned

17 earlier this afternoon was the updating of the statutes

18 that can apply to the activities that we are all

19 looking at here.

20 7321 Certainly there will come a time when

21 some updating is required. We have pointed out in our

22 written submission that you had already quite aptly

23 indicated in your convergence report that the

24 government could look at some of those things.

25 7322 It certainly wouldn't be outlandish




1 that you considered making the same kind of comment or

2 recommendation coming out of this hearing if you see

3 that indeed there is a good case to be made that some

4 of the ambiguities are preoccupying increasingly so and

5 that there is a need for statutory clarity.

6 7323 The second element that we mentioned

7 was the enforcement of various laws. That certainly to

8 me has been an important sub-theme of this particular

9 proceeding.

10 7324 A number of parties have suggested

11 that we really have some issues, difficult issues, with

12 respect to certain uses of the new media. However, I

13 think a very wide body of interested parties, a very

14 wide cross-section of parties have recognized that

15 there are almost invariably some statutory requirements

16 that can find the proper application to curtail these

17 issues and problems, but the enforcement is always the

18 issue.

19 7325 What we are suggesting here is

20 certainly there are going to be increasingly

21 enforcement issues in the area of criminal law, for

22 example, hate propaganda, privacy, copyright and

23 enforcement will have to be under these various schemes

24 -- will have to be very seriously looked at.

25 7326 Certainly that does not mean that you




1 ought to put that burden on your shoulders under

2 communications law and attempt to provide that

3 enforcement. That's essentially what we were

4 suggesting.

5 7327 We also mentioned the conclusion of

6 international agreements. I think also a number of

7 parties to that extent have said well, the Internet is

8 already a global phenomenon, it is very difficult to

9 contemplate any particular domestic statutory scheme

10 being developed by one of the international players in

11 the global scheme of things.

12 7328 There has to be some international

13 consensus. That's really the domain to a large extent

14 of foreign affairs and the conclusion of international

15 framework agreements.

16 7329 There again there certainly is the

17 ability for the government to be actively involved in

18 seeking the consensus that is required to ensure

19 policing of what all of us would consider as being very

20 legitimate public order and public policy issues for

21 all the countries concerned.

22 7330 The last one was tax and financial

23 incentives for production and new media. There again a

24 number of new parties have said "Well, there certainly

25 would be some merit in having additional funding




1 schemes or tax incentives".

2 7331 I should point out in the Province of

3 Quebec the Government of Quebec has been quite

4 proactive in setting up a particular incentive scheme

5 for new media. There is certainly the possibility of

6 other provincial governments doing the same. There is

7 the possibility of a number of private and public

8 funding initiatives taking place.

9 7332 What we are saying is there again we

10 have difficulty seeing that it belongs to the

11 Commission to effect some form of funding transfer or

12 collection of funds or remittance of funds directly or

13 indirectly in order to pursue these goals.

14 7333 We are really there in the domain of

15 tax and outright subsidy encouragements or enticements.

16 There again there is no limit. I suppose subject to

17 trade agreements, there is very little to what one can

18 think of.


20 7335 However, I do notice how you

21 described these funding mechanisms. From what you have

22 said in your oral presentation, I assume that you do

23 not mean that the system that carries Internet or new

24 media services or other sectors.

25 7336 You refer in your remarks this




1 afternoon to the fact of the -- I'm translating.

2 That's why I am taking a little time. The CRTC does

3 play a role in terms of broadcasting,

4 telecommunications and has also played an important

5 role in supporting complementary sectors, cinema,

6 television, et cetera.

7 1420

8 7337 I take it that it is your position

9 that you will not take the same approach in media

10 whereby the broadcasting system has been an important

11 supporter of content in that position. Your point is

12 that does not work when it comes to this new content

13 delivered over sometimes the same systems.

14 7338 MR. MAYRAND: Quite rightly that is

15 indeed our view. And let me explain very briefly why

16 it is our view. We are quite convinced that measures

17 that would purport to effect a particular cross

18 subsidization in this environment for the very same

19 factors that we briefly outlined in our written

20 submission, ubiquity, global reality, ever changing

21 format origin, use, would make it very difficult if not

22 impossible to set up a scheme that would be reliable

23 and fair and equitable for all parties concerned.

24 7339 Secondly, I think we have pointed out

25 in and a number of parties have pointed out to you that




1 the case for cross subsidization is certainly not at

2 all clear, not at all evident. And certainly there is

3 considerable evidence that without specific cross

4 subsidization requirements between players, a number of

5 players have evolved with their own initiatives. We

6 have provided you some examples of our own. There are

7 a number of examples out there depending on the players

8 and their particular area of interest.

9 7340 Of course, available resources are

10 never sufficient to do what one ultimately wants to do.

11 We live with that on a daily basis. We would love to

12 have -- Jacques would be tremendously happy to double

13 his capital expenditure envelope. We cannot do that.

14 We all live in an environment where resources,

15 financial resources, human resources, by definition

16 have some limits but within those limits, if the market

17 really works and we think it does work already in this

18 area, interested players will find ways to

19 differentiate themselves by taking initiatives that

20 they feel are the most productive, the most appropriate

21 to their circumstances and provide the bigger bang for

22 the buck.


24 feel that through this free market system and some of

25 these incentives there will be enough money in the




1 system to provide the content which you have built your

2 infrastructure for?

3 7342 MR. MAYRAND: As I mentioned, it is

4 going to be certainly a constant struggle. And just

5 get us right here, we are empathizing very much with

6 upstart businesses that are trying to get their

7 products on stream and working. But it is going to be,

8 unfortunately, the tough reality of the environment we

9 all will have to live in.

10 7343 And just to complete my remarks in

11 that regard, in our capacity as a cable operator,

12 having to manage in a very short time span a transition

13 towards full competition on a variety of core services

14 and new services such as local telephony, for example,

15 and the roll out of digital video compression, we have

16 our work cut for us.

17 7344 And what we have said in our

18 presentation here is that we have some huge priorities

19 to deal with here. So, obviously, in that context, we

20 are concerned with the notion that we might be required

21 to fund some other initiatives while we have these

22 pressing priorities and pressing needs for capital

23 reinvestment.


25 complete my questions. And may I wish that both of you




1 travel home safely. Do not rush too much.

2 7346 THE CHAIRPERSON: Thank you,

3 Commissioner Pennefather. Before you rush off, though,

4 I would just like to clarify for me, for us, the issue

5 you were discussing with Commissioner Pennefather

6 regarding the third party access to cable sites, being

7 infrastructure.

8 7347 In answering the question, you were

9 indicating that -- and to use your words -- there was

10 some considerable degree of rivalry in this high speed

11 access business. And I assume that you are referring

12 to the announcement that Look TV made last week that it

13 was going to be providing Internet access and perhaps

14 some others.

15 7348 I guess it had been the Commission's

16 understanding that the cable industry was working on

17 resolving both the technical and the economic issues

18 with respect to providing third party access to its

19 infrastructure so that ISPs could get access to that

20 for the purpose of their business.

21 7349 What is the status of that, given

22 your comments about the alternatives that may exist in

23 the marketplace? I guess -- do we still understand

24 that the industry is, and you in particular being one

25 of the key players in the industry are working to




1 resolve those technical and economic issues?

2 7350 MR. MAYRAND: Yes, most definitely.

3 We are involved in the industry process. As you know,

4 it is an industry process involving certainly -- well,

5 more than two key industry groups. And that process we

6 are very much involved in. There are meetings that

7 have taken place, I believe as recently as last week

8 and that are ongoing on specifically some of the

9 technical problems that must be resolved in that

10 regard. We are working in that direction.

11 7351 I was not suggesting that we were

12 challenging the processes. Actually I referred to that

13 process as being ongoing. I guess I was only conveying

14 the sense that, you know, there are a number of

15 alternatives, certainly statements indicating that

16 these alternatives would be quite substitutable to the

17 one that we can offer that are being already promoted

18 and I was not suggesting that this means that we should

19 not be pursuing the process that is underway for third

20 party access with respect to the cable industry.

21 7352 THE CHAIRPERSON: I got the

22 impression from several of the representations that we

23 had last week that this is kind of an ongoing process

24 with no particular end in site from the view at least

25 of some of the ISPs.




1 7353 Can you give us your assessment of

2 when we might see a conclusion to this process that

3 would be satisfactory to all the parties?

4 7354 MR. MAYRAND: I am in a bit of a

5 difficult position to comment very specifically on the

6 degree of that, because I have not been personally our

7 representative in that process.

8 7355 Clearly, my understanding in the

9 sense that I gather through the accounts of meetings

10 and submissions and exchanges that the parties have

11 that the process is certainly not a moot process and

12 that there is, really, quite a considerable effort

13 being deployed to address the concrete issues and to

14 come up with an acceptable solution.

15 7356 I could certainly attest that there

16 have been proposals made and one can certainly envisage

17 that some parties might wish to improve proposals by

18 using regulatory leverage that is certainly to be

19 expected some how. But there have been concrete

20 proposals and I guess all I can say is that the process

21 is certainly still ongoing. It hasn't been terminated.

22 While some particular players might argue that it is

23 not going fast enough, it is ongoing and there are very

24 real efforts and money expended into it.

25 7357 THE CHAIRPERSON: Okay. Well, I




1 guess we will leave it at that for now.

2 7358 Thank you very much, gentlemen, we

3 appreciate your participation this afternoon.

4 7359 MS BÉNARD: Thank you, Mr. Chairman.

5 The next presentation will be by the Canadian

6 Anti-Racism Education and Research Society.

7 7360 THE CHAIRPERSON: Good afternoon.

8 Please proceed when you are ready.


10 7361 MR. DUTTON: Good afternoon. My name

11 is Alan Dutton. I am with the Canadian Anti-Racism

12 Education and Research Society. It is a small

13 non-profit society that is devoted to tracking and

14 monitoring hate groups on the net. There are a small

15 number of groups across Canada that provide the same

16 function.

17 7362 I am presenting here today, and I

18 thank you for the opportunity to speak with you, about

19 our concern about hate on the Internet. And I think we

20 perhaps express a different -- somewhat different

21 perspective than you have probably heard so far.

22 7363 Our concern is with the extent of the

23 racism, the anti-gay, anti-lesbian and anti-abortion

24 sites that are proliferating on the net and the

25 consequences for Canadian youth and for Canadians as a




1 whole and for Canadian unity.

2 7364 Hate crime is a serious problem in

3 Canada because it divides communities and it divides

4 the nation. It creates serious harm and has a very

5 serious impact. So our concern is with the need to

6 regulate.

7 7365 Now, you have heard a number of

8 arguments in the past week or so about the difficulty

9 of regulating hate on the net, the idea that perhaps

10 the CRTC is not the body that can regulate the net, and

11 that, in fact, perhaps the CRTC should not regulate the

12 net.

13 7366 You have also heard that the CRTC may

14 have little jurisdiction and I think even in the last

15 presentation the idea was presented that there are

16 other agencies, other law enforcement agencies and

17 bodies that can better regulate the net. We have also

18 heard, I think, that there is no specific expertise

19 within the CRTC to regulate the net.

20 7367 Now, I want to go through those

21 arguments just a little bit and then perhaps answer

22 questions if that is what is useful for you. And I

23 will start with the last, first, the idea that there is

24 no expertise in the CRTC to deal with hate on the net.

25 7368 I should still say from the very




1 beginning, from the outset, that in our view, there is

2 very little expertise to deal with hate on the net in

3 any agency, any government body in Canada.

4 7369 It is one of the issues that we have

5 been discussing with both the federal government and

6 with provincial governments is the need to develop

7 expertise, the need to understand the severe problem

8 that hate represents on the net.

9 7370 We have heard the other idea that the

10 sections of the Criminal Code 318, 319 and perhaps 320

11 are more appropriate mechanisms or tools for dealing

12 with hate on the net. But, again, I think when we

13 examine those legislative tools, we find that there are

14 serious problems in terms of definition and certainly

15 in terms of enforcement, but also in terms of the way

16 that the wording of the various sections are

17 constructed.

18 7371 We have also heard that there are

19 provisions within the Canadian Human Rights Act,

20 section 3, to deal with hate on the net, but as we also

21 know, as we have heard over the last few days, the

22 broadcast -- and my words -- broadcast of materials on

23 the net is increasingly taking and using a variety of

24 platforms besides the telephone. It is, for example, a

25 higher speed communications can be attained through use




1 of cable and also by satellite and fibre optics.

2 7372 So the question would be whether or

3 not section 13 of the Canadian Human Rights Act would

4 apply since that section deals with the telephonic

5 communication of hatred.

6 7373 There are also concerns for how the

7 CRTC would approach the regulation of hate on the net.

8 And I am sure that there were similar debates when the

9 Broadcast Act and the Telecommunications Act was

10 brought into force about exactly how to regulate

11 television and broadcasting in general.

12 7374 And so I think we are at the

13 beginning of a very long process. And it is our view,

14 I think, that there needs to be an exploration of a

15 variety of ways that hate can be regulated. Whether it

16 is the provision of licensing agreements with carriers

17 or whether filters can be used by carriers, there seems

18 to be a variety of instruments that could be adopted

19 and should be adopted.

20 7375 So it is our view that it is not

21 simply a matter of -- hate on the net is not simply a

22 matter that can be dealt with in terms of Criminal Code

23 or the Human Rights Act. Those are the last steps that

24 we need to follow to regulate hate on the net. The

25 first steps must be in terms of every agency that is




1 involved in overseeing communication broadcasting

2 publications and so forth.

3 7376 I just want to point out that there

4 are some innovative steps on the part of service

5 providers both in Canada and internationally and they

6 have adopted policies to prevent hate through their Web

7 pages and services. And I think that is very

8 important. And perhaps when we are talking about

9 funding for Canadian content, we will look at the

10 innovative directions that some of the ISPs are

11 providing and we can perhaps think about directing some

12 of the funds that business would like to have in terms

13 of the development of interactive media devoted to that

14 side of cultural content which is the side that

15 promotes human rights.

16 7377 So having said those few words, I

17 would certainly like to address any questions you may

18 have.

19 7378 THE CHAIRPERSON: Thank you, Mr.

20 Dutton. And I will turn the questioning over to

21 Commissioner Grauer.

22 7379 COMMISSIONER GRAUER: Thank you. I

23 have a few questions of clarification with respect to

24 your written submission and I think you maybe covered

25 some of it in your oral remarks but maybe if we could




1 just go through to make sure I understand what you are

2 proposing with respect to your reference to the

3 Criminal Code and the human rights statutes federally

4 and provincially.

5 7380 And your view that they should be

6 last steps, you clearly anticipate a proactive role for

7 the CRTC with regulating hate. Regulating speech, I

8 think is the way you put it in your written submission.

9 1440

10 7381 I am just wondering -- I guess you

11 are concerned that the laws of general applicability

12 are not sufficient to deal with new media and hate on

13 the Internet. Is that --

14 7382 MR. DUTTON: I think that is true,

15 but further I think we need to think of amendments. I

16 think the Minister of Justice has met with the various

17 AGs across the country I think a few weeks ago, and

18 there were some proposals for amendments at least to

19 the Criminal Code. But even with those amendments, I

20 still see that there may be problems in dealing with

21 hate on the net.

22 7383 For example, there was a suggestion

23 that the Code be amended to prohibit the possession of

24 hate material for the purpose of distribution. If that

25 wording or similar wording is used, we would be




1 concerned about the definition of possession.

2 7384 It is not entirely self-evident that

3 a service provider who stores hate material on the

4 server and through that allows other people to have

5 access to that, whether that is possession per se.

6 7385 Also, with respect to the defences

7 with the Code, if the person is not wilfully promoting

8 hate, which is going to be partially taken care of in

9 terms of possession for distribution, if that person is

10 not aware or claims they are not aware of the material

11 on the net, then I think there may be some difficulty

12 in utilizing even that amendment to prohibit the

13 distribution of hate propaganda. Now, those are some

14 of our concerns.

15 7386 In Germany, I understand there has

16 been new legislation specifically designed to prohibit

17 hate on the net. So, I think we might look to that

18 jurisdiction.

19 7387 Also, in the United States just

20 recently, the Attorney General in Pennsylvania laid

21 charges against the owner of an ISP and not the

22 carrier, but the owner of the ISP for allowing the

23 distribution of materials which were racist and

24 constituted serious threats to some human rights

25 commissioners. So, I think that is a very important




1 sort of precedent for us to look at.

2 7388 Again, the idea here is that one

3 presentation talked about the idea of education as

4 being a solution to the problem. I think the use of

5 legislation is in itself an educational vehicle. I

6 think the example of being prosecuted for carrying and

7 transmitting hate is critical.

8 7389 COMMISSIONER GRAVER: I was going to

9 ask you about amendments. You do think then that

10 amendments to the Criminal Code and the Human Rights

11 Act are in order to deal with some of the issues you

12 are concerned about to update this legislation to deal

13 with hate on the Internet?

14 7390 MR. DUTTON: I think it can be

15 useful, but again pointing to the example of Germany

16 perhaps what we need is a much more thorough going

17 piece of legislation to deal with the full range of

18 hate on the net and not just racism, but the anti-gay,

19 anti-lesbian materials, the anti-abortion materials,

20 those materials which constitute threats to particular

21 communities.

22 7391 COMMISSIONER GRAVER: I guess --

23 well, I might as well ask you now. I didn't know where

24 I was going to fit this in. You are aware that, number

25 one, we would have to find that in fact within the




1 Broadcasting Act that new media fell within the

2 jurisdiction of the Broadcasting Act. That in and of

3 itself we have had many different views on that subject

4 for starters.

5 7392 But let's assume for the sake of this

6 discussion that we were to find that new media fell

7 within the jurisdiction of the Broadcasting Act. What

8 specifically would your recommendations be to us to

9 deal with hate on the Internet? Do you have a specific

10 -- I am not sure I understand how we would go about

11 regulating this and enforcing it because I think you

12 would probably agree that if you are going to regulate

13 something you need mechanisms and enforcement tools.

14 7393 MR. DUTTON: I think there are a

15 number of ways of approaching this and it's a complex

16 matter, as you said, and it depends if you define this

17 as a broadcast and so forth and where it would fit in

18 terms of the regulatory framework.

19 7394 Again, as I mentioned, I think the

20 debates around communication or broadcasting on

21 television and the use of the telephone when those acts

22 were first introduced governing those means of

23 communication, there were similar kinds of concerns

24 about how to develop a regulatory framework which would

25 govern speech.




1 7395 But in the context of the Internet,

2 as I said, I don't think that the present legislation

3 is sufficient and certainly the help of the CRTC in

4 providing a framework, a policy and also of course

5 enforcement. But if the Internet was defined as a

6 broadcasting mechanism, and there are certain aspects

7 of it which clearly are. Spamming, for example, the

8 broadcast in which a message is sent out to a variety

9 of people, sometimes targeting people because their

10 name is of a particular -- or may represent a

11 particular ethnic group, and spamming of those

12 individuals based on the spelling of their last names

13 can be a serious problem.

14 \NEW So, a way -- I think we can define

15 the Internet as a type of broadcasting medium and also

16 the other new media as forms of broadcasting and,

17 therefore, would fall under even the present CRTC

18 regulations which I still think are relatively weak,

19 but nevertheless something is better than nothing.

20 7397 Perhaps through these discussions

21 will come a heightened awareness about the importance

22 of dealing with hate, both in terms of radio broadcasts

23 and also in terms of transmission of communication by

24 satellite also on the Internet.

25 7398 So, my initial foray into this is to




1 say in my view it's a type of broadcast, in many

2 respects, not e-mail, that's a different form of

3 communication, but certainly some of the chat rooms and

4 newsnet services and certainly some of the -- obviously

5 the web pages. As broadcasts those would, in my view,

6 fall under present CRTC guidelines with respect to

7 offensive comment.

8 7399 COMMISSIONER GRAVER: Thank you.

9 7400 I don't know if you were here last

10 week. We had the Media Awareness Network. Are you

11 familiar with the Media Awareness Network?

12 7401 MR. DUTTON: No, I'm sorry, I am not.

13 7402 COMMISSIONER GRAVER: They are an

14 organization who are dedicated to educating and

15 heightening media literacy and they have also quite a

16 well respected, in fact internationally recognized

17 program of education for young people and children,

18 particularly to recognize hate on the Internet,

19 offensive content.

20 C\NE I think their view is that while

21 there is some filtering mechanisms that are effective

22 and various -- I don't know, many of the ISPs, as you

23 know, have codes of conduct and there are mechanisms in

24 place to deal as best they can with much content, that

25 the real tool is to educate particularly children and




1 young people as to how to recognize this kind of

2 content and to deal with it and not -- I guess the

3 question is the vulnerability of young people to not

4 recognize what is happening and whatever.

5 7404 I was just curious to know. I was

6 going to ask you for your comments on the role of

7 education and awareness and literacy in these matters

8 as an important tool to combat hate on the Internet.

9 7405 MR. DUTTON: Certainly education is

10 the first line of defence. I think education is

11 critical in helping young people understand how hate

12 groups function, how young people are recruited into

13 hate groups, how to recognize hate and the kind of

14 arguments that can be mounted against the materials

15 that are all too present on the net.

16 7406 But to say that education is the

17 solution is a problem. For one thing, groups like the

18 one you mentioned and other groups that are coming

19 before you to present on new media will tell you that

20 the resources to provide education just aren't there

21 and that the non-profit sector that is trying to deal

22 with hate on the net is unable to do so.

23 7407 COMMISSIONER GRAVER: Yes. It was

24 not so much that it was a solution, but that it was one

25 important tool in a toolbox of combatting hate.




1 7408 MR. DUTTON: Exactly. I would agree

2 with that totally.

3 7409 But I would add, as I said before,

4 that the prosecution of those individuals that are

5 responsible for promoting hatred on the net is also

6 educating.

7 7410 COMMISSIONER GRAVER: I have one last

8 question actually -- or two, sorry. Just in the area

9 of self-regulation of Internet providers and some

10 parties have pointed to a number of self-regulatory

11 measures that can be taken to address this kind of

12 content. ISP codes of conduct, ISP logging of hate

13 sites, hotlines for reporting of potentially illegal

14 content, control over domain names in order to monitor

15 the origin of offending sites and the promotion of

16 rating and filtering tools.

17 7411 I want to know which of these

18 initiatives or combination would you advocate -- or

19 where would these initiatives or combination of

20 initiatives fit in your view of dealing with this

21 matter of hate on the Internet?

22 7412 MR. DUTTON: I think those tools that

23 you mentioned are really essential because I think most

24 of the work, most of the expertise in dealing with

25 hate, apart from the Canadian Security Intelligence




1 Service and various law enforcement agencies, most of

2 the expertise lies within community organizations that

3 are presently actively monitoring hate, both in the

4 community, on the street and also on the net.

5 7413 The filtering mechanisms I think may

6 be useful to some extent. I think the education of

7 youth is really critical, but I think that we need --

8 and the reason why I came in the first place is to

9 convey our sense of the seriousness of the problem.

10 7414 The net is not being overrun by

11 racists and bigots. It's a small percentage. It's a

12 very significant part of the net that needs to be

13 regulated. So my response to the question is that we

14 have to do everything that we can, and that we need the

15 partnership, just as business needs the partnership

16 with government. Also, the non-profit sector needs a

17 closer relationship with the regulatory agencies in the

18 federal and provincial governments to deal with the

19 serious social problems that hate creates.

20 7415 COMMISSIONER GRAVER: So, to get back

21 then to the issue, you would see the regulatory body,

22 governments, non-profit organizations and ISPs

23 together, a partnership of some formal arrangement to

24 combat these --

25 7416 MR. DUTTON: Right. And I think even




1 then that's where education has to start, is the

2 understanding of the importance of that relationship

3 and that partnering.

4 7417 When we hear business talk about

5 support for developing the Internet, we have to say

6 that that partnering has to provide a certain amount of

7 support for the work that is going on in the community

8 at present to aid and facilitate the social content of

9 the net and the social responsibility that the net

10 implies and entails.

11 7418 COMMISSIONER GRAVER: Do I take it

12 then, and I don't mean to put words in your mouth, that

13 you would like us to take the lead in this area, that

14 you think we have a particular mandate?

15 7419 MR. DUTTON: I think that anybody

16 should take the lead that can.

17 7420 COMMISSIONER GRAVER: And do you

18 think we can?

19 7421 MR. DUTTON: There has to be some

20 leadership.

21 7422 COMMISSIONER GRAVER: I guess what I

22 am trying to get a sense of is you want to see some

23 leadership and perhaps you think we can carve out a

24 place.

25 7423 MR. DUTTON: And if you provide any




1 kind of leadership whatsoever, we would be very

2 supportive and very happy and helpful in any way that

3 we can be to you.


5 really you don't think there is maybe enough working

6 together out there to deal with these issues?

7 7425 MR. DUTTON: Absolutely. I think,

8 for example, there has been discussion in some of the

9 presentations and recommendations about dealing with

10 hate on the net and the non-profit sector, the groups

11 that are actually monitoring and tracking hate on the

12 net and there are differences between those groups. I

13 am sure you will probably become more aware of those

14 differences as the hearings proceed.

15 7426 So, in a sense what I am saying is

16 that just as much as the business sector, the sector

17 that wants to make a profit and run business on the net

18 and profit from their business on the net, there are

19 other sectors that need the help and need some

20 infrastructure to be able to provide more adequate

21 advice and consultation about the appropriate role of

22 both the non-profit sector and the partnership that

23 should be created with the CRTC and governing, really

24 governing the net.

25 7427 COMMISSIONER GRAVER: Thank you very




1 much. I really appreciate you coming all this way. It

2 is a very important issue and I don't know if you have

3 anything you would like to add before we finish, but

4 those are my questions.

5 7428 MR. DUTTON: Thank you.

6 7429 THE CHAIRPERSON: Thank you very

7 much.

8 7430 Thank you, Mr. Dutton. We appreciate

9 you coming here today.

10 7431 I think we will take just a quick

11 five-minute break. We will reconvene in five minutes

12 and hear the last presenter for today.

13 --- Short recess at / Courte suspension à 1457

14 --- Upon resuming at / Reprise à 1503

15 7432 THE CHAIRPERSON: We will return to

16 our proceeding now.

17 7433 Madam Secretary.

18 7434 MS BÉNARD: Thank you, Mr. Chairman.

19 7435 The next presenter will be the

20 African Canadian Legal Clinic.

21 7436 THE CHAIRPERSON: Good afternoon.


23 7437 MS WILLIAMS: Good afternoon.

24 7438 Michelle Williams. With me is J.R.

25 Richards of the African Canadian Legal Clinic.




1 7439 We are very pleased to be here today.

2 We hope actually that it will be the first step in an

3 ongoing dialogue on access and equity issues with the


5 7440 The African Canadian Legal Clinic is

6 a not-for-profit legal organization established to

7 address anti-Black racism and other forms of systemic

8 and institutional discrimination in employment,

9 housing, health care, education and other spheres of

10 society, including the media.

11 7441 Generally the term "African Canadian"

12 includes indigenous Canadian Black persons and people

13 from the Caribbean and African continent in Canada,

14 regardless of their immigration status.

15 7442 The latest census figures indicate

16 that there are about 600,000 Blacks in Canada,

17 representing about 18 per cent of all visible

18 minorities. The ACLC, therefore, reflects the concerns

19 of a constituency who may otherwise be unheard by the

20 CRTC.

21 7443 Also, generally we are talking about

22 issues of race discrimination so the actual number of

23 visible minorities or racialized groups is obviously a

24 lot higher than the 600,000 African Canadians that we

25 have referred to here.




1 7444 To begin, I would just like to point

2 out that, as I mentioned, Canada is a diverse nation.

3 We have already a fairly comprehensive legal framework,

4 including the Charter, Human Rights Codes and the

5 Multiculturalism Act which are part of a network of

6 legal rights designed to promote equal participation in

7 Canadian society and protect vulnerable groups from

8 race discrimination and hatred.

9 7445 The broadcasting policy does itself

10 include the statement:

11 "-- the Canadian broadcasting

12 system should, through its

13 programming and the employment

14 opportunities arising out of its

15 operations, serve the needs and

16 interests, and reflect the

17 circumstances and aspirations of

18 Canadian men, women and

19 children, including equal

20 rights, the linguistic duality

21 and multicultural and

22 multiracial nature of Canadian

23 society --"

24 7446 We will touch briefly on whether or

25 not the Act is applicable in the context of this




1 hearing. Obviously that is an issue that you are

2 dealing with.

3 7447 I would like to point out that it is

4 clear that the new media, like other forms of media,

5 should allow for the free flow and exchange of ideas

6 and opinions in a way that enhances democracy. In

7 reality, however, most types of media remain to some

8 degree inaccessible and non-representative of the

9 multicultural nature of Canadian society.

10 7448 Just to mention some of the barriers.

11 In the past it has been sort of a non-existence or

12 weakness of some self-regulating mechanisms. The

13 difficulty in participating in the policy and

14 regulatory process is due to the complexity and cost of

15 lobbying.

16 7449 We feel very privileged to be able to

17 speak with you today. We are a fairly young

18 organization. I can tell you that there are a lot more

19 people who are interested in this issue who just

20 weren't able to sort of put the resources together to

21 come before you. We don't have big lobbying budgets or

22 anything.

23 7450 The issue of access even to

24 participate in policy making is a big one.

25 7451 We note also that some of the other




1 intervenors have indicated there are probably about 2.5

2 million Canadian households right now that have access

3 to the Internet. That leaves a lot more households

4 that don't have access to the Internet right now. Mr.

5 Richards will touch on access aspects a little later.

6 7452 There have also been numerous studies

7 that have document the under-representation and

8 misrepresentation of racialized groups in traditional

9 media. Often we are not represented at all or if we

10 are, it is negatively. We have also been to some

11 degree shut out from employment in the media. That is

12 within traditional media organizations.

13 7453 There is one author who has written

14 on Canadian broadcasting and multiculturalism entitled

15 "Attempts to accommodate ethnic minorities". He notes:

16 "-- the economic imperative in

17 broadcasting poses a threat to

18 ethnic and racial minorities,

19 with the goals of the

20 Broadcasting Act being

21 undermined by seeing media

22 consumers in economic terms

23 only."

24 7454 Again, we are here to highlight other

25 principles that you may not otherwise get to hear




1 sometimes when economic interests may dominate the

2 debates.

3 7455 Therefore, it is part of the CRTC's

4 role, in our submission, to ensure that principles of

5 equity embedded in the Broadcasting Act and other

6 regulations and the Telecommunications Act and the

7 overlying legal framework, including the Charter and so

8 on, are translated into reality.

9 7456 In applying the principles of access

10 and equity to the issue of new media, it is our

11 submission, one, that the CRTC has jurisdiction over

12 new media, or in the alternative, should explicitly

13 establish jurisdiction. We would be happy to discuss

14 that further if you have questions on our position

15 there.

16 7457 Two, that the regulation of new media

17 and its service providers would contribute materially

18 to the attainment of the objectives set out in the

19 Broadcasting Act and the Telecommunications Act.

20 7458 Three, that the CRTC should develop a

21 regulatory framework that responds to concerns raised

22 by the new media and specifically address the

23 proliferation of racist hate content in the new media.

24 7459 Four, that the CRTC should promote

25 universal access to the new media through regulatory




1 and voluntary mechanisms and that such promotional

2 initiatives explicitly include measures to promote

3 access to racialized groups who, as I mentioned, are

4 both under-represented and misrepresented in the

5 Canadian media.

6 7460 It has been mentioned that the

7 Internet has expanded more rapidly than any other forms

8 of media in our history. This expansion is likely to

9 continue as is the overlap with more traditional forms

10 of broadcasting and telecommunications.

11 7461 Looking historically, it's our

12 position that the CRTC has in fact enhanced

13 broadcasting in Canada. Indeed, in evaluating

14 traditional broadcasting, the convergence report of the

15 CRTC information highway proceeding stated that:

16 "-- exclusive reliance on market

17 forces in the broadcasting

18 sector would threaten the

19 economic underpinnings of our

20 cultural industries. Regulation

21 and funding for program

22 production have resulted in more

23 real quality and diversity in

24 the services on our television

25 screens than anywhere else in




1 the world."

2 7462 Waiting for the future to apply

3 meaningful regulation to such a powerful force as the

4 Internet risks not being able to ensure equal benefits

5 for all Canadians.

6 7463 These are important principles

7 underlying regulation which includes override, in our

8 submission, reliance on pure market forces. The same

9 principles underlying current regulations are

10 applicable and should be applied to the new media.

11 7464 Canada's unique cultural traditions

12 and the need to maintain them as well as our commitment

13 to anti-racism, multiculturalism and the development of

14 an equitable society demand that the CRTC ensures that

15 universal access is provided to new media.

16 7465 In this instance, it's our submission

17 that it's not prudent to wait but rather to begin

18 promoting the principles underlying the Broadcasting

19 Act and Telecommunications Act in the context of new

20 media.

21 7466 We, therefore, commend the CRTC first

22 for engaging in the initial process this wide public

23 consultation.

24 7467 As I mentioned, one area that we

25 think requires the attention of the CRTC, and it was




1 mentioned by the previous speaker, is the regulation of

2 racist hate content in the new media. It's our

3 submission that providers of new media services,

4 including Internet service providers, have an

5 obligation to create policies and procedures to prevent

6 and remove hate speech that is a breach of Canadian and

7 international law.

8 7468 The CRTC has already undertaken

9 leadership I note on a variety of international issues.

10 As a first step, we suggest that you could develop

11 further a working group or initiative that would look

12 specifically at regulating hate content on the Intenet.

13 7469 This group should include anti-racist

14 community participants who again, as mentioned by the

15 previous speaker, are in the forefront of dealing with

16 the issue and also should consider the international

17 comparative study that has already been done and other

18 research in this area.

19 7470 Generally the CRTC should have as one

20 of its goals the development of strategies to combat

21 hate content in the new media. Traditional laws might

22 not adequately deal with many issues inherent in

23 attempting to combat hate speech in the new media.

24 7471 It's our submission that the CRTC has

25 a responsibility to ensure that concerns about racist




1 speech are adequately addressed.

2 7472 Mr. Richards will speak further about

3 the issue of access.

4 7473 MR. RICHARDS: Good afternoon.

5 7474 My name is J.L. Richards.

6 7475 I think the Internet, as many

7 understand new media, they take it to mean the

8 Internet. The Internet embodies the hopes and

9 aspirations of many, many people in Canada as a whole.

10 7476 Universal access to new media is a

11 stated goal of the Government of Canada as part of its

12 information highway strategy.

13 7477 Universal access to new media is

14 necessary if Canada is to make meaningful the network

15 of legal rights designed to promote equal participation

16 in Canadian society. New media holds a promise of

17 incredible economic and social benefits. It is

18 essential that these benefits are integrated into the

19 whole of Canadian society.

20 7478 Firstly, an example of one of the

21 problems of access can be found in the demographic

22 makeup of the interventions on the McLuhan Web site

23 which inform this proceeding. We commend the CRTC for

24 even having the McLuhan Web site for holding so wide a

25 public consultation.




1 7479 However, when you look at the makeup

2 of the interventions, you notice that English speaking

3 men contributed 80 per cent of interventions, English

4 speaking women 15 per cent and French speaking

5 participation was basically 5 per cent.

6 7480 We see already that some of the

7 access issues there are cropping up when you see that

8 the percentages of the interventions are already sort

9 of skewed. I mean there might be different reasons for

10 the interventions being the way that they are, but when

11 you look at the fact that 80 per cent of the people

12 contributing interventions are English speaking men,

13 you already see some problems of access cropping up.

14 7481 Access to many areas in Canadian

15 society as well as the media reflect systemic barriers

16 in Canadian society. The goal of universal access must

17 factor in the historically disadvantaged groups and

18 reflect the multicultural nature of Canadian society.

19 7482 Universal access includes access to

20 dialogue in new media services as well as tremendous

21 business opportunities that exist with new media

22 service provision and businesses.

23 7483 Market forces alone will not ensure

24 universal access to new media. The cost of basic

25 hardware necessary to access new media services, as




1 well as traditional systemic racist barriers to

2 business opportunities, work to frustrate attempts by

3 many in the Africa Canadian community to access new

4 media.

5 7484 Support for universal access needs to

6 remain a public priority. Partnering with a private

7 enterprise often provides much needed capital.

8 However, public funding for access initiatives removes

9 reliance on the market and assures public

10 accountability.

11 7485 Many new media services are rapidly

12 becoming essential services. Anyone who has had to do

13 any sort of a job search recently can attest to that.

14 You know, any sort of a meaningful job search is sort

15 of meaningless unless one is wired in.

16 7486 There is a rapidly growing gap

17 between the information rich and the information poor,

18 with the information poor being truly disadvantaged.

19 7487 Universal access to new media by

20 groups and businesses is necessary to ensure the

21 equitable and universal benefit of new media.

22 Regulation and initiatives, in our submission, are

23 necessary to encourage the development of the public

24 lane. The creation of Web sites and businesses must be

25 encouraged and these Web sites and businesses must




1 reflect the multicultural and diverse nature of

2 Canadian society.

3 7488 The ACLC wholeheartedly supports

4 existing initiatives in the area of universal access to

5 new media, including Industry Canada's Computers for

6 Schools Program and MNet's online and CD-ROM education

7 programs.

8 7489 The ACLC advocates for the expansion

9 of such programs and calls on the CRTC to guarantee

10 support and funding for such initiatives. Programs

11 such as these, however, should remain public with

12 limited partnering with the private sector.

13 7490 It is in the public interest to have

14 a completely online nation and such a public interest

15 should be supported by the public purse.

16 7491 As a summary of our recommendations,

17 the ACLC recommends that the CRTC develop a regulatory

18 framework that responds to concerns raised by the new

19 media and specifically addresses the proliferation of

20 racist hate content in the new media and promotes

21 access to the new media.

22 7492 The CRTC should promote access

23 through regulatory and voluntary mechanisms and such

24 promotions initiatives should include specific measures

25 to promote access to racialized groups who are both




1 under-represented and misrepresented in Canadian media.

2 7493 That the CRTC increase funding to

3 existing programs and initiate new funding to programs

4 designed to promote access to the new media. These

5 programs should include an emphasis on education and

6 cross-cultural and anti-racist initiatives.

7 7494 Importantly, consultation with

8 community groups and interested parties should also be

9 a part of any program to ensure full community

10 participation.

11 7495 Development of the public lane

12 through the funding of Internet access centres and

13 encouragement of the use of such centres as well as

14 subsidized access services and hardware should also

15 remain a priority.

16 7496 Funding of programs ensuring

17 infrastructure and community access should remain

18 public. Public funding lessens reliance on market

19 forces and ensures public accountability.

20 7497 Thank you.

21 7498 THE CHAIRPERSON: Thank you, Mr.

22 Richards, Ms Williams.

23 7499 I turn the questioning over to

24 Commissioner Wilson.

25 7500 COMMISSIONER WILSON: Good afternoon.




1 7501 I was actually going to start by

2 asking you about the definition of access because in

3 your written submission you used it in two different

4 subheadings and it seemed to me in two different ways.

5 I think you have kind of refined your definition of it

6 in your oral submission today.

7 7502 I do want to talk to you about the

8 whole notion of universal access. Obviously you are

9 familiar with the various public programs because you

10 mentioned Industry Canada's Computers for Schools

11 Program.

12 7503 You are also familiar, I guess, with

13 the Community Access Program that Industry Canada has

14 whereby they provide funding to communities in order to

15 help them establish community access points for the

16 Internet. At least theoretically every community in

17 Canada has an access point.

18 7504 What specifically do you think the

19 Commission can do? I notice that you say in your

20 recommendations that we should increase funding and

21 initiate funding. You also say in paragraph 4.6 "with

22 limited partnering with the private sector".

23 7505 I am just wondering if you are aware

24 of the fact that we don't really have the power to

25 earmark public funding for that kind of initiative.




1 Usually that's done through the departments themselves

2 through Industry Canada or Canadian Heritage.

3 7506 In terms of private enterprise, there

4 have been some funds that have been initiated by the

5 CRTC that have flowed out of various regulatory

6 mechanisms. We seem to have a bit more flexibility on

7 that side.

8 7507 What would you suggest the CRTC do

9 specifically in terms of guaranteeing universal access?

10 7508 MR. RICHARDS: It has already been

11 stated that universal access is a priority. What we

12 basically are submitting is that universal access has

13 to take into account the multiracial nature of Canadian

14 society and stating that as a priority.

15 7509 Basically, when allocating funds or

16 developing programs, the way in which consultations are

17 done, different groups that you speak to, finding out

18 basically which communities need basic help in getting

19 online or having access to new media.

20 7510 That's as important as providing the

21 funds themselves or sort of setting up programs where

22 different agencies of departments will provide the

23 funds. I understand that you don't necessarily have

24 control over the funds themselves. I think the way in

25 which you consult with those agencies, how you




1 prioritize things, is really important as well and

2 maybe working to kind of get some control over some

3 more funds. I'm not quite sure how.

4 7511 This is wide open for everybody.

5 This is new for everybody. I think it's great what the

6 CRTC is doing on consulting on this. You know, sort of

7 pat answers "Well, we can't do that because we haven't

8 done that in the past", I'm not quite sure they will

9 work here because it's all new and there are some new

10 and novel things that can be done.

11 7512 MS WILLIAMS: Can I just add to that?

12 7513 I think just as a general proposition

13 in terms of equity and access throughout the work of

14 the CRTC generally, where you are able to infuse

15 initiatives with the specific recognition that access

16 and equity and the reflection of Canada's multicultural

17 society and multiracial society is important, that you

18 sort of just keep that in mind throughout the work of

19 the CRTC so that when you have particular programs.

20 7514 It's just sort of that extra step to

21 say how can we ensure that this is accessible across

22 the board, particularly to racialized groups but other

23 historically disadvantaged groups that may have

24 otherwise never known about the programs.

25 7515 How can we ensure that that is




1 accessible? Just keeping those things in mind and

2 providing to the degree to which you are able to within

3 your framework leadership for private industry to say

4 we think these initiatives are important as reflected

5 in our current policies and legislation.

6 1525

7 7516 COMMISSIONER WILSON: I have actually

8 been very interested in the hearing thus far to realize

9 there are a number of parties out there, and I think

10 Commissioner Grauer referred to this earlier, that look

11 to the CRTC to play that kind of leadership role when

12 Mr. Dutton was appearing just a few minutes ago and he

13 was talking about the whole notion of hate over the net

14 and we will go there in a minute. He suggested that

15 certainly CRTC had some kind of leadership role to play

16 in that sense. And it certainly is within our purview

17 to make recommendations to people in various government

18 departments.

19 7517 On page 5 of your submission, you

20 state that the creation of set aside funds by private

21 enterprises in new media fora which could be accessed

22 for educational purposes would aid in disseminating

23 information about access to end use of rapidly changing

24 technology. What did you have in mind for that, just

25 establishing some kind of separate fund?




1 7518 MR. RICHARDS: Yes, I think someone I

2 forget who it was, what presenter it was today that had

3 already stated --

4 7519 COMMISSIONER WILSON: Mr. Dutton also

5 made a comment on that.

6 7520 MR. RICHARDS: Right. Someone stated

7 that the Internet is not all money, it is not as

8 profitable as people think it really is. I beg to

9 differ. There are some companies who make tremendous

10 amounts of money off our new media services and others

11 who do not.

12 7521 I think it is sort of -- those

13 companies have some sort of responsibility or the CRTC

14 has some sort of responsibility to create programs

15 where funds are collected -- I don't know of a

16 diplomatic or nice way to say it -- get the money from

17 somewhere to set it aside in order to subsidize public

18 programs, educational programs, programs promoting

19 access to new media services and programs designed to

20 sort of get historically disadvantaged communities

21 involved in this new technology.

22 7522 So, I mean, if it comes down to

23 saying: Hey, tax the money and put the money somewhere

24 else, then sure, let us just say it. That is basically

25 what we mean by that by the creation of set aside




1 funds. Funds out of the public purse set aside to do

2 those sorts of things.

3 7523 COMMISSIONER WILSON: Let us look at

4 the issue of hate propaganda. I want to start by

5 asking you is it your feeling as it was the feeling of

6 Mr. Dutton and I think we have heard at least in

7 writing from a number of other parties on this same

8 issue, but is it your feeling that the existing legal

9 framework is insufficient to deal with this issue?

10 7524 Because you may or may not know from

11 having monitored the hearings thus far, your position

12 about regulating the Internet and establishing

13 jurisdiction over the Internet and if there are

14 questions to be pursued on the whole notion of

15 jurisdiction, I will allow our legal counsel to do

16 that, because I am not I am not a lawyer myself. But

17 there are very few parties who have suggested that we

18 regulate the Internet. So your sort of in a minority

19 in that sense.

20 7525 So I am interested in that. And I

21 guess one of the things that we heard in a submission

22 by the Centre for Research Action on Race Relations was

23 they, too, said that the Commission should devote

24 special attention to hate propaganda on the Internet

25 separately from such issues as pornography and other




1 sexually explicit material.

2 7526 Why do you think the whole issue of

3 hate on the Internet requires more special attention,

4 for example, than child pornography or sexually

5 explicit material?

6 7527 MS WILLIAMS: I will start with that

7 and then just go back generally to the issue of

8 jurisdiction, if that is okay. Just since we are sort

9 of one of the only voices who appears to be saying it,

10 I might as well say it.

11 7528 First of all, in terms of hate

12 propaganda, it is not our position that necessarily

13 hate propaganda is any more or less harmful than other

14 problems on the Internet. Certainly, if there is harm

15 to children, we are not trying to create a hierarchy of

16 issues here. It just happens that our expertise is

17 more in the area of hate propaganda so that is why we

18 have chosen to address it.

19 7529 In terms of the existing legal

20 framework to govern hate propaganda, it is not

21 sufficient, frankly. Every step and it has been

22 mentioned by the previous speaker every step that you

23 can take is helpful and also, again, this kind of goes

24 to the general framework of what the CRTC decides if

25 anything to do about new media. If you are going to




1 wade into the issue of new media in some sort of either

2 regulatory function or promoting sort of

3 self-monitoring by businesses involved in the new

4 media, then as part of whatever initiative you take,

5 the regulation or self-monitoring of hate propaganda

6 should be included therein.

7 7530 The other part about it, though, is

8 the CRTC is in our submission the one organization most

9 squarely centred to deal with the issue of hate

10 propaganda on the Internet. Again, it goes part and

11 parcel with our submission that you should and it is a

12 perfect opportunity to look at wading into the new

13 media at this point. And part of that includes hate

14 propaganda because the other mechanisms are very

15 limited. And going back, again, to first --

16 7531 COMMISSIONER WILSON: Are you talking

17 about the self-regulatory mechanisms?

18 7532 MS WILLIAMS: Sorry, the legal

19 framework, so the code and that sort of thing, the

20 Criminal Code and the Canadian Human Rights Code.

21 Sorry, I just lost my train of thought. Going back to

22 first principles.

23 7533 So, again, if you are going to talk

24 about and seriously look at the principles underlying

25 Canada's legal framework generally and also reflected




1 in the broadcast regulations and legislation that I

2 have discussed earlier, then part of the work will

3 involve looking at are there issues of equity that

4 arise when we take on the new media?

5 7534 And I submit that that sort of

6 thought process should be part of all consideration in

7 wading in in this area. So if you are going to look

8 seriously at where do issues of equity arise, where do

9 issues of protecting and promoting the multicultural

10 nature of Canadian society and multiracial nature

11 arise, then hate propaganda is one of those areas.

12 7535 Because if we are floating around on

13 the net and that is a mechanism used to cause harm to a

14 significant percentage of Canadian society, then surely

15 that falls within the CRTC's jurisdiction if you choose

16 to take that jurisdiction. And even if you don't,

17 there is room for sort of lesser initiatives that the

18 CRTC could take.

19 7536 COMMISSIONER WILSON: A leadership

20 role.

21 7537 MS WILLIAMS: Right, thank you.

22 7538 COMMISSIONER WILSON: Well, let me

23 just sort of come back at you with this. We had a

24 presentation last week by Palestine Heritage who

25 described the Internet as the ultimate democratic




1 instrument. And what they meant by this I think became

2 clear when they compared the notion of balance and

3 freedom of expression between traditional and new

4 media.

5 7539 And with respect to traditional

6 media, you know, they said there are a limited number

7 of stations and the messages received by the audience

8 are very much controlled by the producers or the

9 stations. I mean, there are rules about balance and

10 all of that, that govern how those messages are

11 communicated.

12 7540 But they said, you know, while there

13 is an opportunity under law and regulation to respond

14 to abusive comment in traditional broadcasting, there

15 is no real practical opportunity to correct the record.

16 Whereas on the Internet, it is possible. It is so

17 limitless in capacity, it is practical and easy and

18 rapid to respond. Anyone can be a publisher.

19 7541 So I mean you kind of -- in your

20 submission you sort of, on pages 2 and 3, in paragraphs

21 6 and 7 where you talk about electronic and print media

22 as major transmitters of society's cultural standards

23 and then it is in paragraph 7 you talk about the media

24 having in many ways reinforced and reproduced racism

25 through negative stereotyping.




1 7542 It has been argued to us that the

2 Internet is the perfect solution for this. Because it

3 is so accessible to virtually anyone who wants to go on

4 it and make their statement.

5 7543 MR. RICHARDS: I think the argument

6 there sort of assumes that we have this universal

7 access which we submit really does not exist. There

8 are communities that are not as wired in as everyone

9 else. I think -- I mean, it has been said that the

10 only -- how does it go, again, the only thing that

11 combats bad speech or evil speech is more speech. I

12 forget how the quote goes.

13 7544 When you look at traditional forms of

14 media that is just not the case. The fact is that in

15 Canada, we have adopted standards, we have norms, we

16 have community standards, hate is defined. Hate speech

17 is defined. To say that, you know, it is so wide open

18 that individuals can go and respond and that that, in

19 effect, combats hate speech, I think, is maybe a step

20 that is not even necessary to take when we do have, you

21 know, we understand what hate is, hate has been

22 defined. From the outset, we can prohibit certain

23 kinds of speech or take action against certain kinds of

24 speech while we wait for the individual to come along

25 and say: Well, okay, here is a Web site. There is a




1 hate site, I am going to respond to that and that

2 should be enough, assuming that there are enough voices

3 that are online that are going to drown out that

4 particular speech. I think that is a pretty big

5 assumption given what we know about access to new media

6 and given what we know about historically disadvantaged

7 groups in Canadian society.

8 7545 MS WILLIAMS: The reason why we have

9 legal mechanisms to deal with hate is because it is

10 harmful. That has been proven. So to sort of -- and

11 it just happens that we did read the Palistinian

12 Heritage submission. And if the burden is then upon,

13 presumably, the victims to go and respond to

14 outrageously harmful hate messages on the Internet,

15 that is incredibly unfair. And it is also something

16 that I certainly, you know, in our work, it is not

17 something that we would prioritize we would ever go on

18 and encounter all the hate spam that is out there on

19 the Internet.

20 7546 Instead, I think it makes more sense

21 about how we can be proactive in preventing harmful

22 language, not preventing free exchange of information

23 and so on, and how do we -- then this goes back to one

24 of your our initial suggestions -- how do we work

25 together to ensure that we strike that balance?




1 7547 In particular cases the court has

2 said, you know, the Supreme Court, yes, we recognize

3 that this is an infringement of section 2 of the

4 Charter which is freedom of expression, but we have

5 section 1 that allows us to balance that in a free and

6 democratic society to see whether that infringement, as

7 minor as it is, may be justified to promote other

8 principles including equity and freedom of everyone to

9 live in Canada.

10 7548 COMMISSIONER WILSON: That is an

11 interesting point that you have raised. Because

12 actually when B'nai Brith appeared, they made the point

13 -- I will read you this quote:

14 7549 "The Internet has the potential for

15 broadening a number of cracks in our society into deep

16 chasms, between youth and their elders, between the

17 computer literate and others, between those with online

18 access and those who cannot afford it, between those

19 who value freedom of expression above all else and

20 those who see freedom of expression as one value which

21 must be weighed against others."

22 7550 And then they went on to say:

23 7551 "Many Canadians may not be aware of

24 the fact that according to the Supreme Court of Canada,

25 it is the latter approach which prevails under Canadian




1 law."

2 7552 Sometimes I think with all of the

3 American programming that we have on our airwaves

4 sometimes we get freedom of expression and freedom of

5 speech from the U.S. confused. And I think that

6 freedom of speech is the primary freedom as outlined in

7 the Charter.

8 7553 But I guess I am just curious to

9 understand why you feel that in view of the sort of

10 body of opinion that has been developing over the

11 course of the last five days, why would you feel that

12 self-regulatory model in terms of new media is not an

13 appropriate one?

14 7554 For example, a lot of people have

15 suggested that, you know, this whole industry is really

16 going to be a huge economic driver, not only for

17 Canada, but for the entire world. And that if you

18 start trying to rein it in with regulation, that you

19 will hinder the development of the industry.

20 7555 MR. RICHARDS: To interject, with the

21 creation of automobile standards in the automobile

22 industry that was another argument that was used. You

23 know, you cannot interfere with automobile

24 manufacturers because huge employer, you are going to

25 limit it, you know, profits are going to go down and




1 people will lose their jobs.

2 7556 It is just not so. Automobiles are

3 still on the road, the automobile industry is still a

4 huge employer with all kinds of government regulation.

5 So I think the argument does not hold water that we

6 cannot wait and that at this point we are going to

7 start hindering, start interfering.

8 7557 Competition, sure, it is valuable.

9 But, you know, in all sorts of instances market forces

10 are tampered and interfered with by government and

11 nobody says anything. Governments bail out banks and

12 huge institutions all the time. That is interfering.

13 That is regulating.

14 7558 So in this instance, regulating, I do

15 not see how regulating for the public good at this

16 stage saying it is going to, you know, create all sorts

17 of damage, I just do not see how that argument holds

18 water.

19 7559 MS WILLIAMS: Again, I think it just

20 goes back to balancing interests. It is not

21 necessarily such a strict dichotomy as perhaps it has

22 been made out to be. You can encourage economic

23 growth, you can encourage industry and still have

24 respect for the principles of equity and access in

25 Canada.




1 7560 Again, to even mention another

2 industry, you know, there are a lot of businesses who

3 could probably make a lot more money if we decided to

4 deregulate in some way health care and go the way of

5 the American system. But there are particular

6 principles, instances and institutions that we have in

7 Canadian society that we think are important and that

8 we are not going to sort of sacrifice those to profit

9 to the nth degree in every instance.

10 7561 But we are going to look for a

11 balance that does support the principles across the

12 board that we hold true and dear as Canadians, not just

13 profit.

14 7562 COMMISSIONER WILSON: Thank you.

15 Those are my questions.

16 7563 THE CHAIRPERSON: I am not a lawyer,

17 either. However, being from lower Canada, I have never

18 been afraid to challenge the Law Society of Upper

19 Canada.

20 7564 The first sentence of paragraph 211

21 of your oral presentation today, I was not sure whether

22 you skipped over that one or not, I was trying to

23 follow along. You say:

24 7565 "The CRTC has the jurisdiction and,

25 if not, at least the mandate to regulate new media."




1 7:\ How did you arrive at that

2 conclusion?

3 7567 MS WILLIAMS: Well, I guess sort of

4 perhaps the same way that other people arrived at the

5 opposite conclusion. That is that when we first looked

6 at it, it was more of a common sense proposition than

7 anything else.

8 7568 If the CRTC does not have the

9 jurisdiction to, you know, wade in and to some degree

10 govern or take seizure of the convergence of

11 telecommunications and broadcast, we are not quite sure

12 who does.

13 7569 We did not undertake -- we could if

14 you want us to, a legal analysis of the particular

15 legislation to say here is -- you know, here are the

16 underlying principles in the Broadcasting Act that

17 suggest that you could fit it in here, you could fit it

18 in there. Because we think if you do not think it

19 already exists, then you are certainly in a position to

20 say we are going to make it exist or we are going to

21 recommend that we wade in on this area and ask for the

22 tools that you need to do that.

23 7570 And so at the end of the day it is

24 our submission that you should wade in in that area and

25 if you want to, there is a way to do it.




1 7571 THE CHAIRPERSON: So had you drawn

2 any conclusions then -- you have probably heard there

3 has been considerable debate over the definition of

4 broadcasting and whether certain elements of new media

5 fit within that. I take it that you haven't drawn any

6 particular conclusions in that respect, or have you?

7 7572 MS WILLIAMS: At this stage, again,

8 other than the general principles that we think that

9 underlies the Broadcasting Act, I could not at this

10 stage take you to a particular section to say: Well,

11 you know, subsection 5(a) suggests that really if you

12 look at this aspect of the new media that would,

13 involve televising programs through the Internet

14 therefore you could take jurisdiction there.

15 7573 I think, again, if you want to, then

16 there are lots of ways that you can. The arguments are

17 squarely there. It is not just legal technicalities

18 here. In fact, the policy underlying the development

19 of the CRTC, I think, suggests that this is squarely

20 within your jurisdiction.

21 7574 Again, if it is not, I don't know

22 where it would go. So I don't know if that is helpful.

23 7575 THE CHAIRPERSON: Thank you very

24 much. I think those are all our questions. Again,

25 thank you for your presentation here today.




1 7576 MS WILLIAMS: Thank you.

2 7577 MR. RICHARDS: Thank you.

3 7578 THE CHAIRPERSON: And that concludes

4 our work for today to allow those who live in Quebec

5 here an opportunity to vote in the election. And I

6 would encourage all of you who live here to do so.

7 7579 We will reconvene tomorrow morning at

8 9 o'clock.

9 --- Whereupon the hearing adjourned at 1545, to resume

10 on Tuesday, December 1, 1998 at 0900 / L'audience

11 est ajournée à 1545, pour reprendre le mardi

12 1er décembre 1998 à 0900
















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