TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
MULTIPLE BROADCASTING AND OWNERSHIP APPLICATIONS/
DEMANDES DE SERVICES DE RADIODIFFUSION MULTIPLES
ET DE PROPRIÉTÉ MULTIPLE
Centre de Conférences
September 19, 2000
le 19 septembre 2000
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.
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bilingues en ce qui a trait à la page couverture, la liste des
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Toutefois, la publication susmentionnée est un compte rendu
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participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Multiple broadcasting and ownership applications/
Demandes de services de radiodiffusion multiples
et de propriété multiple
BEFORE / DEVANT:
Chairperson of the
Commission / Présidente
Commissioner / Conseillère
Commissioner / Conseiller
Commissioner / Conseillère
Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTES:
Hearing Manager and
Secretary / Gérante de
l'audience et secrétaire
Legal Counsel /
Centre de Conférences
September 19, 2000
le 19 septembre 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
INTERVENTIONS BY / INTERVENTIONS PAR
Hill and Knowlton Canada Limited
The Honourable Thelma J. Chalifoux
Canadian Film and Television Production Association
Communications, Energy and Paperworkers Union of Canada
Global Television Network
Association québécoise de l'industrie du disque,
du spectacle et de la vidéo
Centre for Research-Action on Race Relations
National Capital Alliance on Race Relations /
L'Alliance de la Capitale nationale sur les
Directors Guild of canada
Barna-Alper Productions Inc.
Ryerson Polytechnic University
University of King's College
The University of British Columbia
Canadian Film Centre
Institut national de l'image et du son
Banff Centre for the Arts/Banff New Media Institute
School of Journalism
M. Roger Tassé
Writer's Guild of Canada
TABLE OF CONTENTS / TABLE DES MATIÈRES
INTERVENTIONS BY / INTERVENTIONS PAR
Alberta Motion Pictures Industries Association
Association of Canadian Advertisers
Robert Douglas Morrice
Big Firm Productions Ltd.
REPLY BY / RÉPLIQUE PAR
1406236 Ontario Inc.
3649091 Canada Ltd.
(CanWest global - CJNT-TV)
Hull, Quebec / Hull (Québec)
--- Upon resuming on Tuesday, September 19, 2000
at 0900 / L'audience reprend le mardi
19 septembre 2000 à 0900
1526 LA PRÉSIDENTE DU CONSEIL: Mesdames et Messieurs. A l'ordre. Bonjour. J'espère que la nuit a été réparatrice pour tous et je voudrais peut-être rappeler some guidelines that we have given ourselves yesterday when we started the hearing.
1527 We have said that with the intention of hearing as many intervenors as possible we won't be engaging really in questioning, unless the position or some points are not totally clear. In order to clarify we will be asking questions. So please don't be insulted if we don't pursue the conversation.
1528 The interventions are very important, they are on the public record and they will be really considered at the time of the analysis by staff and by the panel.
1529 I would like also like to remind everyone that it is important to turn the cell phones and pagers off. We know that it is difficult to be away from the office and from activity, but in order to really pay attention to what is going on here, to listen carefully to what intervenors and applicants have to say, it is really requested that you collaborate with us to allow us the most concentration possible.
1530 Now I would ask Madame la Sécretaire to introduce the next intervenor.
1531 Thank you.
1532 MS POIRIER: Thank you, Madam Chair.
1533 Before I do, I would like to remind everyone that all intervenors are given 10 minutes to present their interventions.
1534 There is a slight change in the order of appearance this morning because some intervenors requested to come first because they have to leave earlier.
1535 So the order should be No. 7, Pearson-Shoyama Institute; No. 12, Hill and Knowlton Canada Limited; and No. 23, The Honourable Thelma Chalifoux. We will return to the normal order after that, No. 3.
1536 So I would like to ask the representative for Pearson-Shoyama Institute to come to the table, please.
1537 Thank you.
1538 CHAIRPERSON OF THE COMMISSION: Bonjour and welcome.
INTERVENTION / INTERVENTION
1539 MR. RASALINGAM: Good morning. Bonjour.
1540 I won't be offended if you don't ask any questions.
--- Laughter / Rires
1541 MR. RASALINGAM: Madam Chair and Commissioners, thank you for giving us the opportunity to appear before you to present our views on the application by BCE to purchase CTV.
1542 My name is Raj Rasalingam and I am the President of Pearson-Shoyama Institute, an organization that promotes dialogue among Canadians and conducts research on a number of public policy issues.
1543 You may be familiar with the Communications and Diversity Network (the CDN.), which has appeared before the Commission in past years, most notably when you reviewed your television policy, at the new media hearing and at the CBC license renewal hearing. The network is housed in the Institute and includes many people and organizations outside the institute who are interested in issues concerning Canada's ethnic and racial diversity vis-à-vis our communications systems. Our submission for this hearing was put together in consultation with members of the Institute, and for reasons of efficiency was submitted on behalf of the network by our Institute.
1544 One of the key members, Professor Karim H. Karim of the school of journalism at Carleton University, is unable to be here today due to his teaching schedule, so I will present our views even though media issues are not a direct area of my own expertise.
1545 I am here to say clearly that I support some key aspects of the Benefits package put forward in this application, most notably, the "Diversity in News Initiative" described in "Schedule 10: the supplementary brief".
1546 The Broadcasting Act clearly requires the broadcasting system to reflect the multicultural and multiracial nature of Canadians. I also acknowledge your Commission's policy that requires broadcasters to present their plans on reflecting this diversity.
1547 This initiative by BCE and CTV clearly goes to the next step to put resources behind the general objective, without which the objective could remain hollow.
1548 I have had the chance to talk to representatives of BCE and CTV to discuss some of our thoughts on this matter and have indicated our interest in working with them.
1549 We are prepared to do this primarily by helping to identify priority areas of work and identifying experts and resources to undertake the work in this area. In the years ahead this work covers issues such as personnel training, student scholarships, seminars, workshops, research on problem areas and "best practices" and the development of a Web site to provide resources for news personnel.
1550 As you may recall from past appearances, the CDN encourages broadcasters to better reflect diversity and include all aspects of Canadian society in entertainment programming and in news. The initiative here is focused on diversity in news and I want to put the following points forward as to why this is important.
1551 In a multiethnic society such as Canada, the following are important in news coverage:
1552 - minorities should be portrayed fairly, and certainly not overly or disproportionately reflected in a negative manner;
1553 - the wider community should be able to see the reality of minorities in society, to better understand their contributions and their challenges;
1554 - Canadians of all backgrounds should be accorded the opportunity to learn about each other;
1555 - media should fairly reflect the contributions that immigrants and minorities make in matters as diverse as sports, medicine, the economy, technology, science, Canadian literature, music and culture.
1556 To realize this, television news should include minorities in the ranks of reporters, anchor persons, editors and other off-screen roles. Just as important, is the need for all news staff to better understand the reality of the society they cover, as well as to be aware of the challenges, the sensitivities, the hopes and aspirations of all its citizens.
1557 Finally, on this subject, I would like to make the observation that CTV news has, in just the last year, made some notable improvement in the reflection of Canadian diversity in its news anchors and reporters, especially on CTV NewsNet. Their minority on-air personnel obviously have demonstrated considerable merit and skill in the work they do, in addition to which they allow CTV, especially NewsNet, to look like a real Canadian television network. In our view, this is a good first step to reflecting diversity in a comprehensive and meaningful way.
1558 In closing, I would like to indicate that I have been impressed in the way that the Benefits package has reached out to various aspects of our society.
1559 I want to make special mention of issues that relate to the Aboriginal peoples Television Network (APTN), Aboriginal production training, the National Broadcast reading service to assist people who are sight-impaired, and Canadian Women in Communications. While I do not want to dwell into the specifics of each initiative, I do want to say that putting significant financial resources in each area is laudable. Having goals and objectives is always a good first step -- putting money behind lofty goals is what can turn these goals into realities.
1560 I will now ask -- well, Professor Lumb is unable to be here, so -- thank you.
1561 CHAIRPERSON OF THE COMMISSION: You were speaking on behalf of both.
1562 MR. RASALINGAM: Both, exactly.
1563 CHAIRPERSON OF THE COMMISSION: Thank you very much.
1564 It is very clear.
1565 MR. RASALINGAM: Thank you.
1566 CHAIRPERSON OF THE COMMISSION: Thank you very much.
1567 MS POIRIER: The next intervention will be presented by Hill and Knowlton Canada Limited.
--- Pause / Pause
1568 CHAIRPERSON OF THE COMMISSION: Good morning and welcome.
INTERVENTION / INTERVENTION
1569 M. RITCHIE: Bonjour, Madame la Présidente, Commissioners.
1570 LA PRÉSIDENTE DU CONSEIL: Bonjour.
1571 MR. RITCHIE: Thank you for the opportunity to share a few brief thoughts on this transaction.
1572 I should note, I have no official commercial or financial involvement, and I should also make clear that I and my old colleague, Tim Reid, are appearing in strictly personal capacities, not representing any corporate organization.
1573 Just a few quick observations.
1574 The CRTC historically has contributed to promoting and preserving a current of Canadian content in Canadian news and entertainment amid the flood of American imports, not that the American product is bad, although it often is appalling, but it sees the world through American eyes and that is often a very different perspective from a Canadian perspective.
1575 Two of the major obstacles you have faced have been technology and money. This transaction, it appears to me, at least offers the promise of putting deep pockets behind an important Canadian broadcaster and combining that with an effort to ride the wave of the convergent technologies.
1576 Two ancillary observations based on my own experience.
1577 First, I do not share the fears that have been expressed that the transaction will suppress competition to serve the Canadian audience.
1578 Again, one has to put this in a broader perspective. While the new organization will admittedly be big by Canadian standards, it will not be alone with competing directly with other large and efficient organizations such as CanWest, Rogers and Quebecor and, of course, the Canadian Broadcasting Corporation.
1579 But all of these entities are, as you know, small by North American standards, although they do offer at least the possibility of effective competition by Canadian media in a world in which scale is of increasing importance and thus the possibility of offering channels for Canadian cultural producers to find expression.
1580 So I would see this transaction as making a positive contribution to competition in Canada and by Canadians.
1581 Second, I have been increasingly dismayed by the damage that financial constraints have wrought in Canadian media coverage of the broader world. Foreign bureaus have been closed by public and private broadcasters and by print media, leaving us at the mercy of the feed principally from American sources.
1582 Back many, many years ago when I was a journalist, at the time of the Vietnam war, I was appalled by the extent to which our newspapers were prisoners of American accounts of that incident, which were indistinguishable from propaganda. The situation in broadcasting has, in my view, become, if anything, even worse over the years.
1583 I have not been a fan of benefits packages, I must admit, since back in the days when I oversaw their negotiation in the industry department. But in this instance I welcome and would particularly draw your attention to the commitment to open and maintain five foreign news bureaus as an important if small step towards reopening Canadian windows on the world.
1584 Now I hand you over to my colleague Mr. Reid.
1585 M. REID: Madame la Présidente, I would like to start by saying it is simply not good enough that the viewing of English language Canadian programs as a percentage of all viewing of English language television increased by only 1 percentage point a year during the last decade of the 20th Century.
1586 We must, as a country with a rich and diverse culture, stretch our objectives much further. I believe that the BCE acquisition of CTV and the 230 million innovative tangible benefit package enables us in Canada to lift our sights much higher.
1587 What they have laid out demonstrates some vision, I believe, but also takes some risks. Because they have done that, there is a real chance, not a risk-free but a real chance, BCE can make a valuable difference with these proposals.
1588 Many of the initiatives being proposed ring true to me. For nine years as head of the Canadian Chamber of Commerce, I crisscrossed this incredible diverse country, meeting and talking with many members of the 400 local community chambers of commerce from St. John's, Newfoundland to Squamish and Howson(ph) Sound in B.C., to Chibougamu in Quebec, to Churchill, Manitoba.
1589 I was privileged to experience their rich community life and to listen to the wonderful storytelling of their unique histories and local life.
1590 These are Canadians needing and deserving a strong voice in the affairs of our country in the ever-shrinking world around us. These are people counting on their local television stations, local news and artists of their own.
1591 The community journalism initiative, the placing of specialists in local newsrooms, the ground-breaker entertainment series produced in regional locations, the enhancing of regional and local news information programming, the additional funding the National Screen Institute, are I believe excellent initiatives to enhance the relevance of Canadian programs to local communities and indeed to capture the interests of Canadians wherever they live.
1592 When I was Dean of Business at Ryerson, I believed it was very important to set up partnerships with community colleges, alliances and joint ventures with business groups, in other words, to harness talent across interest groups to create added value in the service of the future. This is something that is not necessarily easy to do at all until you realize what you can accomplish if you insist on doing it.
1593 I am impressed, therefore, with the creation of the Canadian Media Research Consortium, which by the way includes Ryerson, and the BCE Content Innovation Network. Finding the best people and getting them to work together is simply the best formula for generating even greater diversity and creativity in Canadian programming.
1594 I know also very well from experience in the academic world what a difference it makes to have Canadian research as opposed to generic or, indeed in our case in Canada, American research. The physical location that researchers live in and their day-to-day living experiences make a tremendous difference to the realism and relevance of their questions and conclusions.
1595 This benefit package will allow our country's top media academics to create half a million dollars a year for the next seven years to basic media research. The advanced film and television skills in Montreal, Toronto and Banff will be networked to share the best models and learning and to stimulate one another creatively. I am very doubtful that this would happen without this kind of funding.
1596 To conclude, the proposals on the table in the BCE benefits package represent good, imaginative, creative thinking. It seems to me, as someone now in the business world in Toronto, they get at the core long-term competitive issue for us in Canada, and that is the creation of diverse and high quality, relevant Canadian programs which can, in the judgment of Canadian viewers, beat out programs, foreign programs, in peak times. Winning this competitive competition at home will result in even more competitive exports as well. This is simply a winning Canadian business model, if you like, which can bring a return on investment sufficient to be used to sustain and create even more Canadian programs.
1597 Yes, it is entirely possible that a proposal to spend money in more traditional, what I call, short-term ways would result in higher short-term returns, but it is not a time for these old models. At the end of the day, I believe the American conglomerates would just swallow up our media companies and push aside what is valuable to us and our unique self-expression.
1598 I see this transaction as a very effective move to make sure we have Canadian choices, and I also strongly agree with Gordon and his remarks: we need strong competitive and global competitive companies if we want to continue to thrive as a distinct entity.
1599 Thank you.
1600 CHAIRPERSON OF THE COMMISSION: Thank you very much, Mr. Ritchie. Mr. Reid, thank you.
1601 MS POIRIER: I would now like to invite the Honourable Thelma Chalifoux.
1602 Bonjour et bienvenue.
INTERVENTION / INTERVENTION
1603 HON. THELMA CHALIFOUX: (Native language spoken...) bonjour (native language spoken...)
1604 I am an aboriginal woman who has been involved in aboriginal communications for more than 30 years. I, in the late sixties, with the noted aboriginal leaders and visionaries of that time, saw a great need for the inclusion of aboriginal people in the media industry. We started with a 15-minute radio broadcast with Eugene Steinauer(ph) and Les Healey(ph), one from the north and one from the south, and that was in the middle sixties.
1605 Through the years, we developed the Alberta Native Communications Society. Under that society, and I was on the executive for over 11 years, we developed many, many programs because we saw the great need for aboriginal people to become involved with the communications industry in this country. That was more than 30 years ago. We developed a drama school, we developed a radio school, we developed television. We did many, many things. We even were included in the experiments for the satellite programs in the seventies, which was very, very exciting.
1606 Our people were trained very well. We have the likes of Tantoo(ph) Martin, Tom Jackson. These were students of our in the seventies, and they have made it.
1607 I support this proposal for many, many reasons. With the struggles that we have faced as aboriginal people in the broadcasting industry all throughout the years, even though we have had training programs, even though we have had many good students come out of our programs, they have not had the opportunity or were not given the opportunity to work in mainstream television, radio or broadcasting of any kind.
1608 Our students belong in the mainstream. When you look at what is happening today you see all kinds of minority people within the industry, but do you see an aboriginal broadcaster? Do you see an aboriginal TV newscaster?
1609 I was a newscaster for CKYL Radio in the early eighties and I was the first aboriginal woman in commercial broadcasting in northern Alberta. That was right up until the eighties. Then it was a challenge. They said, "If you can do it, fine; if you can't, you're gone." I accepted the challenge.
1610 This is what has been happening to our people in the broadcasting industry. The benefits package that is presented here I think has come the full circle. With all the struggles that we have had to be included in this industry, I think this proposal now gives us the opportunity for our young people to become directly involved in mainstream broadcasting.
1611 I commend the people that have done this proposal. I commend them for what they have seen as something very, very necessary and very important for aboriginal Canadians in this country. It is sad when we have to look at the likes of Graham Green who have had to go done to the United States to become recognized as a narrator and as a broadcaster.
1612 With this program, with this proposal, I see that we will be able to have our young people involved in the broadcasting industry in this country, here.
1613 I would like to thank you for giving me the opportunity to state all these reasons why I support this proposal, because when you look at the industry as a whole, it has not been very kind to our people.
1614 Yes, we have the Aboriginal Peoples Television after all these years, but we also have a lot of television and a lot of radio that could benefit by the graduates that would come out of some of these benefit packages here, not just Aboriginal Peoples Television. We don't need to be segregated, we need to be included.
1615 One of my researchers said to me, she said, it's interesting, Senator, she said, when a minority person goes for a job, they are given the benefit of the doubt, and when an Aboriginal person goes for the job, they are not given the benefit of the doubt. We must break the stereotype.
1616 And this package here, I think, will give us the opportunity to break the stereotyping of our Aboriginal people here in this country.
1617 I strongly support this proposal for those reasons.
1618 I would like to thank you very much for giving me the opportunity to say so. Thank you.
1619 CHAIRPERSON OF THE COMMISSION: Thank you very much, Madam Senator. Merci.
1620 MS POIRIER: The next intervention will be presented by the Canadian Film and Television Production Association, represented by Elizabeth McDonald, Julia Keatley and Stephen Ellis.
INTERVENTION / INTERVENTION
1621 CHAIRPERSON OF THE COMMISSION: Good morning. Welcome.
1622 MS McDONALD: Thank you.
1623 Madam Chair, members of the Commission, my name is Elizabeth McDonald and I am the President and CEO of the CFTPA, the national association that represents the interests of close to 400 production companies involved in the production and distribution of television programming, feature film and interactive media in every region of Canada.
1624 With me today are Stephen Ellis, Chair of the Association as well as President of Ellis Entertainment of Toronto, and Julia Keatley, Chair of CFTPA's Broadcast Relations Committee and President of Keatley Films of Vancouver. Both are well known independent producers who have collectively created some of Canada's best known documentary and drama programming.
1625 CFTPA members recognize that CTV and the various broadcast licenses that fall within its control have been outstanding partners for producers. They have made an excellent contribution to the broadcasting system overall in terms of developing, exhibiting and promoting Canadian stories.
1626 In terms of showcasing Canadian programming and talent, today's CTV has set benchmarks that would never have been dreamed about a decade ago. For that reason, the CFTPA, on behalf of its members across the country, supports this application.
1627 That being said, it is true that because of its magnitude and other mergers and acquisitions in the market place today, this transaction and its implications have been the focus of much speculation, debate and discussion among Canadian producers. Recognizing that, prior to filing its application and right up until this hearing, the BCE-CTV team have held numerous discussions with producers across Canada in order to identify their needs and concerns. We applaud them for their efforts.
1628 As the media continues to tell us and as the BCE-CTV team stated at this hearing, this transfer of ownership is quite clearly a major industrial transaction responding to global pressures. While it is popular to say that content is king, for the moment and from our perspective, it actually seems that content platforms are the crown jewels.
1629 Our goal at this hearing is not to create obstacles in terms of this undertaking. Rather, we want to make sure that the framework that will govern it becomes a point of reference in the system that will allow Canada to participate in the global communications environment without compromising the diversity of programming that we can create.
1630 MR. ELLIS: We have examined this application very carefully and agree with Trina McQueen that it's bold and innovative and has the potential to make a profound and lasting difference.
1631 Given that the programming elements of this transaction are exclusively destined for exhibition on CTV, our recommendations have been designed to make the result measurable, accountable and to the benefit of the Canadian broadcasting system as a whole.
1632 They are that the Commission raised the issue of rights protection and rights management with the applicant in order to ensure that the strength that the newly combined BCE-CTV will not undermine the important principle of right to protection.
1633 That BCE-CTV commit to clear percentages in terms of the level of independent production that it intends to commission from totally unaffiliated production companies.
1634 That BCE-CTV establish clear public policies that ensure that its program acquisition practices will encourage diversity of programming and avoid self-dealing.
1635 That the Commission require the applicant to develop a terms of trade agreement with the CFTPA similar to the one now in the final stages of negotiation between CFTPA and the CBC.
1636 That the Commission require the filing of an annual report with the CRTC outlining separately the benefits expenditures over the next seven years.
1637 In terms of benefits, the Association asks that the Commission ensure that no unintended benefit occur wherein the expenditure on the applicant's specialty channels could be met by the use of programming funded through these benefit commitments.
1638 And that the Commission consider whether it's appropriate for distribution advances to be considered as a public benefit.
1639 While the applicant has indicated that the share of profits returned from distribution would be reinvested, the issue for our members is the appropriateness of building a new business with public benefits monies.
1640 A common thread through all of our recommendations has been to ensure that independent producers can continue to access programming platforms available through the new BCE-CTV. Our issues are not unlike those of the conventional or specialty broadcasters when they raise the potential for undue preference with broadcast distribution undertakings.
1641 This is always of concern to our members in terms of broadcast licensees' commissioning practices. It is all the more relevant when we are dealing with the expenditure of public benefits dollars.
1642 MS KEATLEY: We have considered the reality and the opportunity that this transaction offers. We recognize that the protection of Canadian culture and the ability to tell our stories can no longer count on regulatory protection alone. More than ever, partnerships and strategic plans need to be formed that will exist beyond the regulatory framework.
1643 This transaction offers a real opportunity to create exciting, cross-platform content. BCE, through the Bell New Media Fund, has already shown its commitment to fostering this type of important creative activity in Canada. Many of our members have singled out that fund as providing the impetus that has permitted them to more fully exploit programming concepts. This transaction will alow our industry to build on that experience and we can all expect to see exciting results.
1644 This year, broadcasters and producers worked together to stop icravetv. We worked together because we shared a common goal, ensuring rights protection.
1645 This transaction marries traditional media with interactive media. For producers to be able to fully exploit the opportunities that this marriage will create, we need to be assured that the rights for the programming that we create for interactive media are seen as separate from those for television.
1646 If we are forced to cede Internet rights for the programming that we create, our future will be severely impacted. This is because the Canadian market place, including public subsidy, does not normally support more than 50 to 60 per cent of the cost of production.
1647 At the moment, little is known about the potential value of these Internet rights. Having seen the hearing presentation and having listened to some of the earlier questioning, it would seem that this potential was a crucial element in BCE's decision to acquire the CTV assets.
1648 When we appeared before you for the renewal of the CBC licenses, we asked and received your support for the negotiation of a terms of trade agreement. We have nearly completed that process. It has been a very constructive exercise providing clarity for both the broadcaster and producers. We are coming to you once again seeking the CRTC's support for the negotiation of a similar agreement with CTV.
1649 Beyond delivering clarity, we believe that a terms of trade agreement between producers and CTV-BCE will serve to reduce friction between negotiating parties, foster a stable working environment and provide a tool will help level the playing field between small and large players in the system.
1650 MS McDONALD: We would be remiss not to thank CTV for supporting the CFTPA-APFTQ mentorship program as part of its benefits package.
1651 We noted earlier that the Bell New Media Fund has led to the creation of innovative cross- platform programming. Now we have an opportunity to collaborate with the a private sector partner that will allow young interns to work with already experienced producers such as CFTPA board member, Roma Khanna, of Snap Media and others like her.
1652 Based on the success of our program to date, we are certain that this alliance will help train the Canadian producers of the future who will have the tools to be successful both at home and abroad in as many platforms as possible.
1653 We thank you for this opportunity to appear and we will be pleased to answer your questions.
1654 THE CHAIRPERSON OF THE COMMISSION: Thank you. We have a few questions.
1655 I guess we have missed you, Ms McDonald, at the digital hearing so we want to have our chance today to kind of catch up on the conversation that was missed at the time.
1656 MS McDONALD: I have discovered if you go on vacation because you have a great team behind you that you become the centre of much speculation. It's good to be back.
1657 CHAIRPERSON OF THE COMMISSION: Yes, indeed. But Mr. Ellis was there and did a brilliant appearance.
1658 It's important to understand what you see. First, you have been following the day yesterday I suppose in terms of the exchange we have had and in terms of, for example, independent production, the definition and how CTV is proposing to manage the envelope and what they see first.
1659 You will remember, Mr. Ellis, about the definition of what is an affiliate and a non-affiliate. And then how much of the envelope will be to the non-affiliate.
1660 Were you satisfied that the precisions that were brought by the team of CTV yesterday was an interesting one? Because they were talking about between 30 and 34 per cent. They did prefer 34 per cent to define what was an affiliate which would be the threshold and in terms of the percentage to go to an non-affiliate, it was as high as 80 per cent.
1661 So do you wish to comment? I don't have the transcript, but those are my notes.
1662 MS McDONALD: I am going to let Mr. Ellis --
1663 CHAIRPERSON OF THE COMMISSION: Actually, I am looking at the members of the panel. Maybe it's in the room. I should look.
1664 MS McDONALD: I am going to ask Mr. Ellis to begin to answer this question because we debated it for about three hours last night, and so it is not unexpected.
1665 CHAIRPERSON OF THE COMMISSION: He has practised it.
1666 MS McDONALD: And then I believe Ms Keatley may have some input.
1667 LA PRÉSIDENTE DU CONSEIL: Merci.
1668 MR. ELLIS: First I would just like to clarify because I think my understanding of what was said yesterday was that 80 per cent of the production would be allocated to independent producers, but that BCE-CTV's definition of independent producer would include a company in which they held up to a 34 per cent interest.
1669 Is that correct?
1670 CHAIRPERSON OF THE COMMISSION: That is the correct understanding so you are on the right track.
1671 MR. ELLIS: Well, I think, as you know, at the digital television hearing we advanced the view that partly in the interest of simplicity that there should be a line drawn between totally unaffiliated production and sort of everything else, if you like, from in-house down to a very minor level of cross-ownership. And I think it this particular proposal because of the fact that what is being contemplated are notionally public benefits that our concern remains the same, that this funding, certainly the notion of 80 per cent was something that sort of answered one of our recommendations which is that he applicant come forward with a specific percentage and 80 per cent is a number certainly that I think CFTPA is happy with, but we would tend to define that 80 per cent as totally unaffiliated production.
1672 MS KEATLY: And I would like to just add further this has been an issue that at the CFTPA we have debated to quite an extent at our most recent board meeting at the beginning of September.
1673 The issue of unaffiliated, why we came down with this simplistic answer, is that obviously our membership has sometimes quite conflictive rules and it becomes very difficult to sometimes wade through that and so this seemed like a very clear and simple way to define it.
1674 Also on this application, because the benefits are to be derived by CTV, we felt that essentially these benefits should be essentially a 100 per cent to independent production.
1675 CHAIRPERSON OF THE COMMISSION: But let me be somewhat trying to get a better understanding. You talk about the necessity in the new world of partnering and that you recognize it is different, it is an evolution of the system and to recognize that need.
1676 What CTV was saying yesterday is that if they were to have a higher threshold or to devote more percentage to totally non-affiliated, like no tie whatsoever, then it would be harmful for some of the independent producers themselves who at times have had some need of capital investment and have come to either CTV or other players.
1677 So you know, what do you respond to that that on one hand it might be understandable the kind of position you are proposing, but what do you make of the argument that it might be harmful for other independent producers who have been partnering with and will be kind of deprived from the possibility of participating to that as recognized by many as being a unique opportunity of trying something different, a new model that is sought, as was explained yesterday.
1678 MS McDONALD: There are a couple of issues. I think the first issue is we are talking about the benefits package here and there was a lot of debate among members of our association and certainly at our most recent board meeting, and the issue was from a producer's point of view, this has been a different kind of proposal because the programming will be aired on CTV, clearly a prominent broadcaster, clearly serving a lot of Canadian needs.
1679 So from our viewpoint, in terms of the benefits package, we believe that because it had a public benefit, because it was somewhat different, and that we were supporting it, that it was based, in our understanding, that 100 per cent would be expanded with non-affiliated production companies.
1680 Moving to the more broad strategic issue. We are not saying that production companies can't -- broadcasters can't invest in production companies or production companies can't invest in broadcasters. I am afraid I am going to start a rumour on something if I say that, but anyway we aren't saying that. What we are trying to do is make sure that for those people who chose the business strategy not to affiliate with a broadcaster, then they won't be shut out. That is the issue. It is not unlike the undue preference issue.
1681 I mean, we sit here very patiently and listen to our broadcaster friends talking about the specialty services and access onto cable systems, et cetera, and they worry about undue preference. It's an undue preference. If you choose a business strategy among the 400 members we have and the 140 members that the APFTQ has, will those people who choose not to have investment by a broadcaster be shut out?
1682 So what we have said is: In terms of your overall programming, not the benefits programming, tell us what part of it is going to be available for independent producers and that they will have an opportunity with, and what will be for affiliated or in-house productions.
1683 CHAIRPERSON OF THE COMMISSION: And your proposal is 100 per cent.
1684 MS McDONALD: One hundred per cent of the benefits. I think, yes -- 100 per cent of the benefits, the reason being that these programs are going to air on the CTV airways and so, therefore, how do you keep them arm's length? It's unique that they will be on the broadcaster who is also the applicant.
1685 We agree with that because the programming opportunities are outstanding. However, in debating how we would support it, it was with an understanding by many producers or by ourselves that that would be for independent production, production companies.
1686 CHAIRPERSON OF THE COMMISSION: You would define it as no percentage invested in those companies at all.
1687 MS McDONALD: We have spent a lot of time talking about the issues of ownership. We have talked about the issues of control. We have talked about a whole lot of other issues and we have seen many transactions go by where people have convertible debentures. They only own a small percentage and it may be under 10, but they actually have convertible debentures and if you convert them, it's actually 35 per cent.
1688 So the issues of control and ownership, et cetera, are so complex and have the involvement of Revenue Canada's set of rules, Investment Canada has a set of rules, the Competition Bureau has a set of rules. At a certain point how many people are going to rule on this?
1689 So from our point of view, what is consistent, either you are affiliated or you are not, but we are not saying that affiliated production companies cannot create programming. We are not saying that Fireworks cannot create programming for CanWest/Global.
1690 CHAIRPERSON OF THE COMMISSION: But not independent.
1691 MS McDONALD: What we are saying is we want and expect that CanWest/Global -- well, I am using this example only to take it out of this that what we are saying in the same way, we expect --
1692 Well, I don't think that it will be a surprise that at the same time -- I mean, Fireworks is, as many other companies are, a member of our association -- we expect that other unaffiliated production companies will also produce for CanWest/Global.
1693 CHAIRPERSON OF THE COMMISSION: Oui, Mr. Ellis.
1694 MR. ELLIS: I was just going to add something. Under the terms of the packages as proposed, there's a sizeable sum that's going to be devoted at the producer's option, as I understand it, to equity investments in the productions themselves that will become funded under the proposal. That in itself represents a significant form of investment which has the potential to return to the applicant as well.
1695 When we have been talking about equity, and I think we raised this at the digital TV hearing as well, there are also opportunities for broadcasters to invest in the programming as well as the company. To some extent, that is still part of the proposal and one that we support.
1696 CHAIRPERSON OF THE COMMISSION: Thank you. We will see what the CTV people think about your proposal. They will be replying later on.
1697 Let me move to the area of rights. You are saying it's very important that we keep a strong protection over rights in this country and this transaction opens the door more massively because the strategy is about another platform and to really exploit it, of course.
1698 The Commission didn't say that those activities are not broadcasting. There are some activities that are broadcasting, but we have exempted from a regulation up to now, media. How do you see our role and what also up to now, I suppose, has occurred that you have had some discussion. If it's not pertinent or relevant to this hearing, probably around the digital discussion.
1699 You know, is it a question you are putting here saying this is a red light, let's be careful, it's a new world, we should have a separate approach for it, or are you saying something out of experience we have now established guidelines already.
I'm not sure.
1700 I recognize the matter of principle, but does it go beyond that and what are you seeking here?
1701 MS McDONALD: Well, I think first of all we are responding to the CRTC's own strategic plan recently that you have rolled out that indicates that you share our concern with rights. While we acknowledge that there are other bodies involved, we become concerned about whether we can maintain those rights.
1702 The problem you have is licensing "X" program and included in the deal will be Internet rights, global Internet rights, for the next five years and is the producer going to be in a situation where they are going to have to sign this away as part because we will be dealing with a very significant entity in the broadcasting world.
1703 What we are proposing -- I know both Steven and Julia want to address this -- is we are looking for your support to try to find new structures to try to have those discussions. We are, as I said, almost completed the terms of trade agreement that we have had with the CBC. It's not unusual in countries like the United Kingdom, their terms of trade agreements with private broadcasters as well.
1704 What that does is clarify the situation and set up a structure under which we can negotiate those rights and that both parties understand their role, but I think it was said quite clearly. If we have to see those right at the beginning as part of the negotiating process, we will have no opportunity for what might be called downstream revenues to reinvest in our businesses and in our own productions.
1705 MS KEATLEY: Just to add to that. I think that essentially a terms of trade would truly deal with a lot of these issues, but then there are really different issues, depending on whether it is reuse of a program, an existing program, or whether you are creating new content in a cross-platform way. It's essentially dealing with the rights separately and having that entrenched within a very large conglomerate.
1706 CHAIRPERSON OF THE COMMISSION: But I guess from what we were understanding yesterday, but also in terms of what we have heard during the digital hearing, it's still a very virtual world despite the technology that is evolving. I think it's Monty yesterday who was using the term "transition and evolution".
1707 I suppose there will be a lot of trial and error in the coming years. There seems to be an understanding that it will be any time between three and seven years before it really turns into a real profitable or commercial reality.
1708 What exactly are you looking for here? What if the Commission were to authorize the transaction? Say that would be, in your view, helpful. I understand you would like a basis by which there will be a favourable climate. That's more what I understand you are seeking.
1709 MS McDONALD: We would certainly appreciate your support for going ahead with this proposal that we have, as you did in CBC. It certainly got the ball rolling.
1710 I think part of it is what we need at this point is recognition that the Internet rights are distinct from the television market. This is important not only to us, but this will be important to later intervenors that will come up. You will be talking to the Directors Guild of Canada, the Writers Guild and others.
1711 The producer needs those rights. We need to recognize them separately. There's an expectation among the creators that we will do that and it will then be incumbent on us to sit down and talk to them about what that impact will have.
1712 It puts the -- the producer has a responsibility to ensure that those rights are secured and represent -- seen as distinct.
1713 CHAIRPERSON OF THE COMMISSION: I am not a lawyer, as you know, so I am not too clear. It seems to me that it would be maybe more the authority of the Copyright Board who is involved in those issues. Could we interpret that what you are looking for is that in terms of an agreement, that could be one element of the terms of agreement to further discussion and that could be included in that kind of solution.
1714 MR. ELLIS: Oh, absolutely. I think what we have been able to accomplish with the terms of trade discussion with CBC is quite a significant number of protocols that a producer would expect in negotiating program deals with the CBC and that the CBC would count on as well. This is precisely the kind of area that could be worked out between ourselves and with the Commission's kind of blessing on the process, it's very helpful I think to encourage us to develop workable models, particularly given that it is a transitional time.
1715 Because producers have generally been very successful in the export markets to supplement or cover their total production budgets, as Julia mentioned in her oral remarks, the Canadian system, even including public subsidy as an average, doesn't usually cover more than 50 to 60 per cent of the cost of production.
1716 To a great extent, a lot of what BCE-CTV has put on the table is an effort to get beyond those sorts of figures in terms of what producers can expect from the Canadian market. To the extent that a producer might opt for just a straight licence fee situation under this new proposal, then they would want the ability to exploit their rights internationally.
1717 What's happening right now, because we are in this transitional phase, is the Internet breaks down the traditional territorial barriers that have allowed producers to derive revenue from individual markets around the world, as you know, so it's important for the producer to retain as much control as possible and the ability to bargain as they see fit with those rights, not just to enhance their revenues and their abilities, the ability to pay for high cost production, but to protect the deals that they have done in other parts of the world where broadcasters elsewhere may obviously be concerned about the same programming coming in over the Internet into their territory.
1718 MS McDONALD: I guess it will become more real when in the next couple of months we can come and put in front of you the copy of the terms of trade agreement that we have with the CBC. I think we are looking for similar language and I think what we want to do is have your endorsement because this is a policy issue, it's not a tariff issue, as some of the things that are normally discussed in front of the Copyright Board.
1719 It's essential for the future of our element of this industry. One of the goals is it provides clarity and that's every important. The negotiations that we have had so far have gotten us where -- we have got past the mist to the realities and then we have gotten to solutions that work for both the broadcaster and the producer. It's been a win-win on both sides.
1720 Frankly, and this isn't something we say should just apply to CTV-BCE, but the size of this undertaking and the size of this new means that it becomes an important issue here.
1721 But I think, as we have said in our oral remarks, this is something that CTV has shown a lot of leadership over the last decade as a private broadcaster and we are inviting them to be part of these negotiations and again show some leadership because we think it is a model that will work with other broadcasters as well.
1722 CHAIRPERSON OF THE COMMISSION: But have you had an opportunity to talk to them about that idea, or have you had any feedback on your written intervention about it?
1723 MS McDONALD: Yes, we have.
1724 It's interesting because, of course, it becomes one of those issues of what does this exactly mean. I didn't get the feeling -- and I don't want to speak for the applicant -- that they were closed to the idea, but I think they would like to sit down and discuss with us what it means.
1725 Again, these are agreements that are actively used in the United Kingdom and in Australia quite successfully. Actually, more successfully in the U.K. with the private sector than it is with the public sector. It's hard when you are dancing with the BBC I think. So they have worked quite successfully in that way.
1726 But timing did become an issue. I did not have the feeling that this was something that they were uninterested in, and I think we are quite intrigued with the fact that it works for the broadcasters well. That has been one of the clear outcomes of the discussions we have had to date with the CBC.
1727 I think, as some of the CTV team may know, there are a lot of myths about the CBC and a lot of myths about relationships and once we got our sort of -- our teams, which has representatives from across the country, we tabled them and they actually developed a better understanding of some of the issues that the producers were dealing with. That, for example, has led to they have a special Web site now for independent producers to use and to clarify. That is part of the commitment of the terms of trade and sort of came as part of that project.
1728 In fact, now the CBC is looking beyond the terms of trade to other places where we can again develop other areas of clarity between our sector and the independent film caucus has been part of the discussions as well between producers and that broadcaster.
1729 CHAIRPERSON OF THE COMMISSION: Well, thank you.
1730 That covers the questions I had for you. I don't know if my colleagues have any. No?
1731 Well, thank you very much.
1732 Certainly in the strategic plan, not only this year but in '97 too, we are of the same view as you, the dialogue is important. And whether it is written in a decision or not, it is welcome with us and between parties and the public.
1733 MS McDONALD: Thank you very much.
1734 CHAIRPERSON OF THE COMMISSION: Thank you.
1735 MS POIRIER: The next intervention will be presented by the Communications, Energy and Paperworkers Union of Canada, represented by David Lewington.
--- Pause / Pause
1736 CHAIRPERSON OF THE COMMISSION: Good morning.
INTERVENTION / INTERVENTION
1737 MR. LEWINGTON: Good morning.
1738 CHAIRPERSON OF THE COMMISSION: Bienvenue.
1739 MR. LEWINGTON: Thank you.
1740 Madame Chair, Members of the Commission, my name is David Lewington, I am a national representative employed by the national union. I service many of the broadcast bargaining units within the Province of Ontario and a few of them are CTV locals. I also service bargaining units belonging to CTV's competitors.
1741 The Communications, Energy and Paperworkers Union of Canada is no stranger to you. Our union directly represents 150,000 Canadian workers in various industries, including resource based, industrial and technological industries. About 20,000 of our members work directly for the news media at newspapers, television stations and radio stations. At CTV we represent about 850 journalists, technicians and administrative employees right across the country and 12,000 of our members work for Bell Canada.
1742 On the whole, we are in support of this application. We agree with Mr. Fecan that BCE's purchase will provide CTV with the stability it needs to survive and compete in broadcasting in Canada today.
1743 Our support is qualified though. The resources of BCE offer great promise to CTV, and if you add to that the merger with Thomson and the Globe and Mail the resources are considerable indeed.
1744 Mr. Monty and Mr. Fecan talk about building a communications conglomerate in service to Canadians and something that is uniquely Canadians, and these are high-minded goals and we support them.
1745 With such stability and resources behind them we say it is time for CTV to reverse the service cuts to Canadians in local markets across this country and begin to put back resources which will again allow citizens to see themselves reflected on their local television stations.
1746 The new company will have the resources to allocate proportionately greater resources to broadcasting to improve the quality of Canadian programming and to enhance local service.
1747 In very recent years we have witnessed a huge decline in staffing and resources at local stations across Canada as CTV centralizes its technical operations. Local programming has been cut too. Stations across the country produce little else but news and the resources they have to serve their communities are very thin indeed.
1748 Local news programs contain too much filler material: commentaries, political and entertainment segments which are not local in origin but arrive prepackaged from the network centres, further diminishing the availability of air time for local content, and the local stations' ability to report on events and stories in their own communities.
1749 In recent times, for example, the connection between local stations and its communities was well served. Stations existed in Sydney, Nova Scotia and Charlottetown, Prince Edward Island where only video-journalists are assigned today. There were news bureaus once in Windsor, London and Owen Sound, Ontario and there are none today.
1750 Trina McQueen said that a successful television operation is one that is watched. Local stations are watched. CTV stations and its affiliates have traditionally been market leaders in terms of audience.
1751 Ms McQueen says that a successful television operation is one that is commercially successful and, of course, Gordon Pinsent said "You've got to have money to allow Canadians tell their stories."
1752 Madam Chair, there can't be any question that this transaction brings a lot of money to the table, but changes in the way CTV allocates financial resources to its stations has meant that it is difficult to show the network just how successful its local conventional television stations really are.
1753 Our members have told us that changes in the way the network allocates air time availability means that local stations are hard-pressed to demonstrate their commercial success. There isn't the commercial availability in network programming to sell local advertisers and stations don't share in national revenues the way they used to. Without other local programming, local news is essentially the access that local advertisers have so it is difficult to demonstrate the commercial success Trina McQueen talked about.
1754 Perhaps it should be enough to say that the local station is watched, but unless viewers have a reason to watch the local station, they won't. The only way for BCE-CTV to protect its No. 1 Brand is to reflect communities back to themselves through their local stations.
1755 The CRTC is the guardian of the public airwaves and through broadcast license renewals you have the regulatory authority to mandate conditions of license. Those conditions should continue to include strong commitments to serve local communities through news, entertainment and other programming. Where else will Mr. Monty find the content to put on his Web sites that Canadians will go to?
1756 In the clip we saw yesterday, the presentation by CTV, Lloyd Robertson talked about the independence of journalists, and of course that is critical to the credibility of that profession and also in the preservation of our democracy. However, it won't be enough for newsrooms to have independence, it is important that local, regional and network managers be accountable for the independence of its journalists for their station's programming and for the reflection of each community to itself.
1757 The opportunity with this transaction will exist for the new company to converge and rationalize its operations, administration and its management. But we believe -- and I will use the term -- "fire walls" should be created between various components of the new company to ensure accountability and to prevent the kinds of unfair advantages that some of the intervenors have talked about.
1758 In the same way Ken Thompson says he will remain at the head of the Globe and Mail to preserve its integrity, so too should broadcasting remain at arms length from Bell ExpressVu and the company's other components. We ask that the CRTC require a corporate arms length relationship between the new companies various operations to ensure independence, accountability and competition in the market.
1759 The CRTC has chosen, for the time being, not to regulate the Internet. It is an emerging medium and perhaps some day it will make the conventional transmission and distribution system redundant. The ultimate content for BCE's portal, Web sites and satellite distribution would of course be all of its television signals.
1760 While this may not be in the foreseeable future, the CRTC should ensure the preservation of over-the-air transmission and public access to free broadcast signals. As these technologies continue to converge, the CRTC may have to revisit its decision of last year to ensure that the public interest in the Canadian broadcasting system is maintained.
1761 What would we say about the benefits package? It is certainly impressive and it is all good. However, as BCE-CTV provides training opportunities, scholarships and grants to many deserving institutions, we wonder where the training, team building and career opportunities are for CTV staff. There is a huge training deficit within the company itself, and it would have been encouraging to see a plan to share some of the benefits of this transaction with existing staff.
1762 As the Commission has already noted, the benefits are finite. Seven years from now, where will it have taken us? Will BCE-CTV continue to invest in these areas in the future? We think they should.
1763 There is good reason to support this application, because the new entity will have the financial resources to continue to make such contributions to the larger industry and in its own self-interest. It may be good business to do so, but it should also be because the public regulator requires it to do so.
1764 It is our recommendation to the Commission that in the public interest companies like BCE-CTV be compelled to continue to provide such benefits as part of every group licence renewal, along with commitments to local and regional programming. If they are compelled to do it by regulation, the business imperatives may take over and the goodwill that we have seen by this application may be lost.
1765 Thank you.
1766 LA PRÉSIDENTE DU CONSEIL: Merci.
1767 I would ask Commissioner Wilson to ask our questions.
1768 MR. LEWINGTON: Thank you.
1769 COMMISSIONER WILSON: Good morning, Mr. Lewington.
1770 MR. LEWINGTON: Good morning.
1771 COMMISSIONER WILSON: Thank you for being with us this morning.
1772 In both your written intervention and the comments that you have made this morning, your focus really is on the issue of local programming.
1773 MR. LEWINGTON: Yes.
1774 COMMISSIONER WILSON: In your written intervention you did talk about regional reflection. I am just wondering, I am assuming that it concerned you that there was no mention of it in the application, no real mention of local programming?
1775 MR. LEWINGTON: It seems to be a bit of an anomaly that when you are looking at producing content for the Internet or any other kind of medium that you are not talking about where the content is coming from. If your interest is truly to connect Canadians with content, then the content has to be meaningful and relevant to them. They have to be able to find it, they have to be able to debate it, they have to be able to interact with it. It seems to me, and history has proven, that the best way to attract local audiences is with local content.
1776 COMMISSIONER WILSON: Certainly the message that was delivered to us during our new media hearing is that that is what attracted people to the Internet because it gave them a comfort level when they were entering into that huge wide world of the Web.
1777 I guess what I wanted to ask you was if you thought that perhaps -- you talk about the benefits and how they are allocated. One of the comments that you make is with respect to training and the fact that nothing has been allocated to that. I am sure you understand from our discussions that in a transaction such as this we are generally looking for benefits that are incremental to what is already being done.
1778 I am wondering if you thought that some of these issues are issues that really should be addressed at their licence renewal as opposed to at sort of the larger --
1779 MR. LEWINGTON: Transaction.
1780 COMMISSIONER WILSON: -- transaction level.
1781 MR. LEWINGTON: I think it needs to be said here, and I think it does need -- of course a lot of these issues have to be addressed at the time of licence renewal. Initially, I guess we thought that this September we would be dealing with the group licence renewals, and of course that has been put off for some time. But, yes, these are important issues to be dealt with at all of these times.
1782 The benefits in this package are fabulous. I mean, they are great for the overall industry. I guess my comments are that there does need to be incremental training improvements within the company itself. I mean, if we are to generate the content that the employer thinks is necessary, we need people trained. I mean, we already have trained journalists and trained technicians. These people are career crafts people. They know they their job. They may be a little light on the skills that some of the kids coming out of colleges have and some of the training opportunities that are out there. So these types of initiatives need to happen in the workplace as well, and it will provide employees at CTV with those skills that are required to make the convergence along with the company.
1783 COMMISSIONER WILSON: I notice in your written intervention, and this morning you actually updated your view for the record, you had raised some concern about whether or not this transaction would actually result in stability and an increased commitment to programming and improvement in the delivery of international news through Canadian eyes. I take it from your comments this morning that you are more satisfied now than you were at the time that you wrote your intervention that those things would accrue from this transaction.
1784 MR. LEWINGTON: I am more hopeful of course. The benefits are good.
1785 I guess some of the criticisms I might make in a constructive way or that some of the bureau operations that are maintained by CTV are pretty thin on the ground. At times they may have, for example, a person in Quebec City and they will fly in and out people that need to be there to cover certain events. Well, it seems to me Quebec City is a pretty important place at this time in history for Canada and it is likely, in my view, CTV should staff that bureau fairly well.
1786 Now, monies have been set aside for these five international bureaus around the world. That is a good thing, at the time when the CBC is pulling back its resources for many of these international venues, it is important that CTV or someone be there to give a Canadian perspective. I guess my concern is just what does it mean?
1787 There seems to be some money allocated there. Of course we need to be vigilant that these bureaus, these international bureaus, will in fact provide the service they are intended to.
1788 COMMISSIONER WILSON: The other issue that you raise has to do with really the convergence of content provider and distributor through this deal. You said, in both your written intervention and in your comments this morning, that you believe that firewalls should be created, and you go on to describe that as a corporate arm's-length relationship.
1789 What exactly are you suggesting in terms of firewalls? Are you talking about -- this is the second time I am asking this question -- are you talking about structural separation?
1790 MR. LEWINGTON: Yes, exactly.
1791 The companies today -- and it's not just CTV and BCE that are doing it -- are talking about brands. We hear this term "branding" a lot. I have heard it a lot with the CHUM stations and their various specialty channels and broadcast outlets. If these brands are so important and if they are valuable to own because they are what they are, then surely there should be some integrity about them.
1792 So to some extent it doesn't really make sense, if the brand is important and needs to maintain integrity, to homogenize them with other brands that the companies may own.
1793 So, yes, I think that in light of some of the comments that were made here yesterday, for example, by the cable industry, about the necessity to have fair play and access with these various distributors, there needs to be corporate arm's-length relationships between some of these organizations so that they remain accountable to you the regulator.
1794 COMMISSIONER WILSON: In your written intervention you say that a firewall should be established to ensure that news gathering resources are independent of BCE's distributorship operations.
1795 Why news gathering resources in particular? What is your concern there?
1796 MR. LEWINGTON: I guess our concern is that the resources that are out there now become even thinner than they are, and in some cases, I mean, they are ridiculously thin as it is. We think, if anything, they should be going in the other direction.
1797 For example, there has been a big push on, I guess because of the cost of doing business, for journalists to be both videographers, camera operators and journalists and to report on communities.
1798 Well, it seems to me that if the intent is to improve content, if your intention is to attract audiences locally to local stations, then there needs to be a separation there too between the people who are behind the camera and the people who are in front of it -- not because they can't proficiently do the work. I mean, it is proven with the advent of technology that you can have one-man bands or one-woman bands and the operate very effectively. That is not my comment. My comment is that if you are going to be meaningful and relevant to local communities, you have to have people -- in the same way that the company needs ITV specialists who interface with the Internet, you need specialists in many of these communities to deal with the community and to provide meaningful and relevant content. I don't think you can do it when you split an individual so many different ways with so many different responsibilities.
1799 COMMISSIONER WILSON: Okay. Just help me with one last area that I want to ask you about, that is, again, on page 5 of your written intervention. I don't know if you have that with you.
1800 In the third paragraph, again talking about the cross-ownership issue and the potential effects of that, you say:
"It is important that if the CRTC is to approve this deal it first establishes some rules and guidelines to prevent BCE from developing an undue advantage over other broadcasters that would lessen competition in the news media, limit the access of both advertisers and the public to the airwaves, and potentially result in even greater monopoly ownership." (As read)
1801 What I need your help with in terms of understanding your point is that we are not talking about a merger of two broadcasters, so we are not lessening the voice in that way. We are talking about a telecommunications company buying a broadcaster, so there is not a convergence of voices in that sense.
1802 That is what I'm asking, I guess, if you can explain to me what you mean. How would this potentially lessen competition in news media and limit the access of both advertisers and the public and result in even greater monopoly ownership?
1803 MR. LEWINGTON: I guess it is a trend that we saw even as we prepared the written intervention. We saw the CanWest Global deal with the Hollinger papers, for example, and it is a huge concern to us. Gail Lamer(ph), our Vice-President of Media, has appeared before you and other regulatory bodies to talk about this concern.
1804 We are concerned that the broadcasters or the communications companies are expanding their scope to encompass all of the media industry, all of the communications industry, and it is a real concern to us that without strong individual players there won't be competition.
1805 COMMISSIONER WILSON: I assume you are communicating these views to the government as well.
1806 MR. LEWINGTON: Everywhere we can. To the public, most importantly.
1807 COMMISSIONER WILSON: Okay, thank you very much, Mr. Lewington. That concludes my questions.
1808 MR. LEWINGTON: Thank you.
1809 CHAIRPERSON OF THE COMMISSION: Merci. Thank you very much, Mr. Lewington.
1810 MS POIRIER: I would now ask Global Television Network to come forward.
1811 They are represented by Gerry Noble, Kevin Shea, Charlotte Bell and Ken Goldstein.
INTERVENTION / INTERVENTION
1812 LA PRÉSIDENTE DU CONSEIL: Bonjour.
1813 MR. NOBLE: Good morning, Madam Chairperson and members of the Commission.
1814 My name is Gerry Noble and I am the President and Chief Executive Officer of Global Communications Limited. With me today, on my left is Kevin Shea, President and Chief Operating Officer of Global Television Network. On my right, Charlotte Bell, Director of Regulatory Affairs, Global Television Network, and finally, on my far right, Ken Goldstein, President of Communications Management Inc.
1815 I should start by making it clear that CanWest Global does not oppose the approval of the application by BCE to acquire CTV.
1816 Our intervention is focused entirely on addressing the need for certain safeguards to ensure that the benefits offered by BCE are truly incremental, that they benefit the whole broadcasting system and are not simply self-directed to benefit BCE and CTV, and to address concerns arising from the potential combination of BCE and CTV to misuse their market and financial power.
1817 The CRTC must recognize that a Goliath -- namely, BCE -- is now joining the Canadian broadcast sector. The broadcast sector has a history of success due to the economic balance of foreign program purchasing and revenue that in turn allows for the production and presentation of high quality Canadian programming. Maintaining that balance is critical.
1818 For example, CanWest Global is much smaller than BCE. However, in its recent acquisition of WIC stations, CanWest was prepared to offer safeguards to ensure a balanced foreign program-buying market.
1819 As Canada's largest company, BCE, through CTV and its nine specialty networks, has the potential to severely destabilize the foreign program market for the Canadian television industry. If that were to happen, then private TV broadcasters that are not under the BCE umbrella might be force to come back to the Commission to seek regulatory relief.
1820 We don't want that to happen. The CRTC must ensure that BCE respects this cultural economic balance and that this is noted in your decision.
1821 This application brings CTV, Canada's largest private television company, under the control of Canada's largest telecommunications company. The combination is unprecedented in the Canadian communications sector. And, I must say, it's unprecedented around the world, from where CanWest has experience.
1822 CTV will now be vertically integrated with Canada's largest telephone company, Bell Canada, and with Canada's largest DTH operator, Bell ExpressVu. CTV will also be vertically integrated with Canada's largest Internet service provider, Bell Sympatico. BCE will be a significant gatekeeper at every level of conventional and digital media platform distribution. The potential for undue preference to the detriment of the Canadian broadcasting system is staggering.
1823 As a BDU, Bell ExpressVu has over half a million digital subscribers at present, making it the largest distributor of multichannel television to digital subscribers in Canada, and therefore, it is a dominant player in digital distribution.
1824 The regulatory issue that arises is the extent to which Bell ExpressVu can or would likely prefer CTV services over other services in its digital lineup. Clearly, it will have every incentive to do so, if BCE acquires CTV.
1825 While we recognize that Bell ExpressVu has announced a Voluntary and Equitable Treatment Code, that Code gives the ultimate discretion on all packaging and marketing decisions to ExpressVu, with no process for expeditious dispute resolution. In a word, we think it is short. It does not protect properly the interests of Canadian broadcasters. And I expect that is why the cable companies yesterday were quick to jump on it and accept it as their Code as well.
1826 We think that potential discrimination issues should be addressed before rather than after the fact. And these rules should apply to all BDUs.
1827 Accordingly, we urge the Commission to conduct a process looking into this issue as soon as possible, to ensure that the rules are clear with respect to access, marketing and packaging, and that an expedite process for resolving discrimination complaints is also established.
1828 Another matter of concern relates to the potential for Bell Sympatico as Canada's largest ISP to give preference to BCE owned media services with respect to interactive television and enhanced media services.
1829 We have noted that similar concerns have been voiced in the United States by Disney and NBC concerning the emergence of AOL Time Warner as a dominant interactive distribution network, ready and eager to favour its own content brands, including CNN, HBO or CNN/Sports Illustrated, to the detriment of competing programming services. Obviously, we don't want to see that happen in Canada.
1830 I would now like to ask Charlotte Bell to address our concerns relating to the proposed benefits package.
1831 MS BELL: Thank you, Gerry.
1832 Bonjour. With regard to the BCE benefits, our first concern relates to the question of incrementality. BCE has proposed significant new hours and dollars in the area of Canadian priority programs for CTV, but these benefits will be meaningless if they simply substitute for what CTV would have done anyway.
1833 This would be contrary to the Commission's stated policy regarding priority program requirements in its new content policy, where it explicitly stated that the eight-hour requirement excludes any benefit commitment made in connection with a transfer of ownership or control.
1834 We think two safeguards would be appropriate here.
1835 The first is to establish that the number of additional hours is truly incremental to what would have occurred anyway. To demonstrate that 175 hours of new Canadian priority programs are truly incremental, we think that CTV should be required to schedule at least nine hours, instead of eight, of Canadian priority programs per week, between seven and 11 p.m. on its conventional TV stations over the next seven years.
1836 The second safeguard should ensure that CTV's expenditures on Canadian programs are incremental. In this regard, CTV should be subject to the same test or a similar test as was applied by the CRTC to CanWest Global in Decision CRTC 2000-221.
1837 Let us be clear. We are not suggesting that the Commission reintroduce spending requirements, as CTV suggested in its response to our intervention.
1838 We propose that CTV be subject to the same incremental spending test as the Commission imposed on us.
1839 While we applaud BCE's $140 million fund to support priority program production, we believe that the fund should be administered independently.
1840 In the CanWest Global benefits package to acquire the WIC television assets, we also included a fund to support Canadian priority programs.
1841 However, the CanWest Global Fund will be managed and run on a basis that is completely independent of CanWest Global, whereas the BCE-CTV proposal explicitly gives the authority to dispense the fund to CTV's own management. The result is that instead of benefiting the broadcasting system as a whole, the BCE-CTV proposal is designed to benefit CTV and those producers it selects to produce for it.
1842 We submit that this $140 million fund also be administered independently.
1843 MR. SHEA: Madam Chairperson and members of the Commission, in closing, we are proposing the following safeguards for your consideration.
1844 First, the CRTC must be prepared to monitor the conduct of BCE-CTV in the foreign program purchasing market, to ensure that the delicate balance within the market place is not disrupted. The proposed acquisition of CTV by BCE cannot be characterized as just a routine transaction. In the context of the Canadian broadcasting system, this is big.
1845 Second, CTV should be required to move to nine hours of Canadian priority programming per week to ensure that the benefits are actually incremental.
1846 Third, the $140 million production fund must be independently managed to ensure that it is a true benefit to the entire broadcasting system.
1847 And fourth, the Commission should review carriage rules for all BDUs in light of the changing marketplace and this transaction.
1848 Fifth, there must be no discrimination against unaffiliated Canadian content providers in the way content is accessed or delivered on Bell-owned and regulated media outlets or platforms.
1849 We thank you very much for this opportunity for us to make our views known, and we look forward to your questions.
1850 CHAIRPERSON OF THE COMMISSION: Merci.
1851 I would ask Vice-Chair Wylie to ask the questions.
1852 COMMISSIONER WYLIE: Good morning, Mr. Noble, Mr. Shea, Ms Bell and Mr. Goldstein.
1853 You are almost stretching your luck by being late when you are not an officer of the company.
1854 Mr. Noble, welcome. I think it is the first time that you appear before us.
1855 MR. NOBLE: Thank you. It is the first time in 14 years.
1856 COMMISSIONER WYLIE: I hope you were impressed by the fact that I was so anxious to not have BCE take your name in vain yesterday.
1857 MR. NOBLE: Thank you.
1858 COMMISSIONER WYLIE: You have a number of problems with this transaction although you are in support of it, and a number of problems for which you have suggested some solutions. I would like to go over those. They include the incrementality question, the value of the code as a response for vertical integration concerns, anti-competitive behaviour possible or access problems on platforms that are controlled BCE-CTV, and then the more immediate problem of if this application were approved of the possible foreign programming purchasing clout that could be exercised.
1859 On the first question, incrementality, it seems to me, as we discuss this, that there are two issues related to our policy. One is whether it's incremental to what would have been done anyway, but creeping into that is whether it's self-serving, which detracts, I suppose, from incrementality. But do you see those as two distinct problems?
1860 MR. NOBLE: Yes, we do.
1861 COMMISSIONER WYLIE: Do you see your solution as solving both?
1862 MR. NOBLE: I think it goes a long way to solving both, yes.
1863 COMMISSIONER WYLIE: Could you explain to me how you perceive it as solving the self-serving concern -- to require your 9 hours and to require financial reporting?
1864 MR. NOBLE: I think in the first instance, in terms of self-serving, it's hard to separate if the programs are going to be aired and broadcast on CTV. That in my view would be a self-serving exercise. However, I am willing to accept that aspect of it if it is truly an incremental program to what CTV would be going to do in any event if this transaction did not occur.
1865 So we would have to get a fairly clear understanding of what the baseline is so that we can then apply the incrementality test above that.
1866 MR. SHEA: I think in addition, Commissioner Wylie, if the $140 million fund is truly separate and managed independently --
1867 COMMISSIONER WYLIE: Yes, 140, don't ask for more.
1868 MR. SHEA: I don't think we are suggesting more. I think our issue is simple, that the CanWest Fund, for example, is going to be separately managed and CTV can appreciate the benefit of our fund. These are funds that are to be put there for the entire broadcasting system and for producers to benefit across all broadcasters, and especially services. This is a major fund and I think, as we pursue the reality of economics in the years ahead, I think we envisage that government maybe backing off of funding which argues even more for the fact that this fund should be independently managed and there should be some reciprocal right if our fund can be used by all members of the system that we too should be able to benefit, as a consequence of working with independent producers, to this fund. That clearly, I think, addresses the question of incrementality and accounting.
1869 Secondly, with respect to 9 hours, this is a major, major field. The fact that we have the powerhouse of Bell Canada, which I think is terrific, investing in our Canadian broadcasting system. I think it is only fair that that is demonstrated by Bell that they make a significant commitment to do something different, to go beyond what is the base requirement.
1870 We all have to do 8 hours. I think the benefit of Bell Canada now joining the broadcasting system, the tribute to that should be we are now going to 9 hours. That is what we are going to do for the Canadian broadcasting system.
1871 COMMISSIONER WYLIE: I am not sure that I clearly understand your position. There are three issues under the priority programming fund. One is incrementality, is it more than would have been done otherwise, and you will appreciate, as a broadcaster, that it is a little difficult to apply exactly the test that was applied through the Global/WIC transaction because of any transition to a new television policy in part. Secondly, whether it is self-serving because it will all come back to their benefit, and thirdly, independently administered.
1872 Is it your understanding that as it is proposed now, all the programming that would be produced would be produced for CTV, for airing on CTV?
1873 MR. NOBLE: That's correct.
1874 COMMISSIONER WYLIE: And when you say "independently administered", you could still have it independently administered and flow back to CTV. What you are saying is you want it to be a fund accessible for programming that would end up being aired on other stations as well.
1875 MR. SHEA: I think it should parallel all existing funds, whether their the McLean-Hunter Fund, the Rogers Fund, the Shaw Fund, the CanWest Fund. It is quite clear that this fund is exclusively for the use and total determination of CTV.
1876 Secondly, we heard yesterday from Ms McQueen that a lot of this investment is going to be related to new media aspects of production. We don't think that that is something that this Commission regulates, that it is something that the Commission should necessarily endorse vis-à-vis the use of the fund. We think it should be purely for the under-represented categories and applicable and available to all broadcasters, including CTV.
1877 COMMISSIONER WYLIE: Are we speaking now of the $140 million directed to priority programming?
1878 MR. SHEA: Yes.
1879 COMMISSIONER WYLIE: That you are concerned that a part of that would flow to new media as well to enrich ordinary or conventional type of programming.
1880 MR. SHEA: I think it was quite clear in the responses to questions yesterday that there will be a variety of aspects of new media, ITV, associated with the production of this 175 hours.
1881 COMMISSIONER WYLIE: Now, if the $140 million is independently administered, you would still -- and therefore not necessarily flowing back to CTV, but some of it could end up on Global producers may have access to produced programming -- you then still would require them to have 9 hours for the reason that this is a big transaction and more should be offered.
1882 MR. SHEA: That's correct.
1883 COMMISSIONER WYLIE: Because that would be more than what has been presented and that is your position. Nine hours reporting to account for the expenditures and the fact that it's more and the $140 million is aside and some of it may flow back to CTV, some not, is your position.
1884 MR. SHEA: That's correct, Commissioner Wylie. I guess we are taking the position that the benefits that have been proposed are at the baseline of 10 per cent overall. Such as CanWest appeared before you on the WIC stations and went well beyond the 10 per cent, 15 per cent in two markets, what we are saying is that this is a major transaction and that it should be reflected in the benefits to ensure that you really have some sense of two things. Fairness -- we think the fund should be independent. Incrementality -- I think the easiest way to track incrementality is by doing it by hours, by moving it from 8 to 9, and that should be I think, I will say it again, the tribute that Bell Canada pays to entering the broadcasting system.
1885 COMMISSIONER WYLIE: If we were to accept that the $140 million is an independently producing fund well beyond seven years in the usual experience we have had with such funds over the years, then the 9 hours, how would you track the expenditures on that, whether they do 8 or 9 hours is obviously not that difficult.
1886 MR. SHEA: I think we are moving to simplicity in suggesting that you don't then have to track the investment. You are simply tracking 9 hours and if the fund is independently administered, the administrators of that fund would report to the Commission on an annualized basis that the fund was dispersed.
1887 It's much easier to track and it's much more relevant to see the incrementality of benefits to the broadcasting system.
1888 COMMISSIONER WYLIE: Now, if the Commission were to look at the fund only in your suggestions in that regard, it would be a fund that would be reporting itself. The nine hours then would be a return to what was described as a lack of regulatory equity by some parties before the TV policy.
1889 We would now somehow have one large broadcaster going beyond the TV policy as a requirement over the term of the licence.
1890 MR. SHEA: I guess that the policy is one aspect of determining the quality, conditions of licence, benefits that are imposed by various broadcasters. I don't think the environment will ever stay static, that we will always be identical, and nor should we, particularly in light of the numbers and types of transactions that are before us.
1891 I think it's important that there be a base line. We, CanWest Global, going forward for the next seven years are going to have safeguards quite different and quite distinct from that of CTV. For example, the one that we have proposed with respect to how we would treat the programming and respectability of CHUM. That's different. That's an inhibitor one might be able to say that we have that CTV does not have.
1892 I think that there are going to be in years ahead a number of situations that create certain aspects of not total equality, but that's because we are involved in transactions.
1893 COMMISSIONER WYLIE: You raised CHUM, so I will deal with what I was going to deal with last. That is the potential of foreign programming purchasing clout by BCE-CTV combination, if this deal were approved.
1894 In the case of the WIC-Global transaction, there was a relatively simple way of satisfying CHUM's request with regard to purchasing, which would be easily checked and you agreed to it and there we are.
1895 What do you consider the Commission can do in that regard even if it had a concern about the ability of a more commercially powerful integrated entity to outbid everyone? You have heard all these allegations levied against you in the past. What were the -- did you ever think of something for the Commission to do that would be anathema for you at the time so we could now impose it on BCE? We always like help.
1896 MR. NOBLE: Well, we have debated this issue to some extent. We are not in favour of additional regulation in that area. We put it on the record so the Commission is aware that --
1897 COMMISSIONER WYLIE: You are not dead yet.
1898 MR. NOBLE: We are not dead yet. We put it on the record to let the Commission know that it's a concern to us and we would like you to recognize that and hopefully reflect it in your decision.
1899 The concern isn't that we expect BCE to do it. It's that they can do it. In our experience in the foreign marketplace -- in fact, CanWest has benefited from this activity in the foreign marketplace because we have picked up bankrupt television operations in Australia and New Zealand and launched one in Ireland.
1900 These companies were bankrupt as a result of this aggressive foreign program acquisition of new owners by television stations who thought they knew how the business operated. They essentially put the television operations into bankruptcy by overbuying and overpaying for foreign programs.
1901 We do not want that to happen here. Again, I must emphasize it, I don't expect BCE to do that, but they have every ability to do so.
1902 Just to give you some facts. It's estimated that the combined BCE-CTV earnings will be $7 billion operating income. That's three times the amount of the revenue generated by the Canadian Broadcasting System. To spend a few more million dollars on programming in order to take competitive advantage is not all that difficult.
1903 One thing that -- I heard their comments yesterday about being good corporate citizens and all the rest of it.
1904 COMMISSIONER WYLIE: Yes.
1905 MR. NOBLE: They promised not to be silly, but actions speak louder than words. At the present time in the area of sporting rights in Canada, there is an inability by non-affiliated CTV broadcasters to purchase effective sporting rights. CTV has agreed that sporting rights are high margin programs and benefit the system by making profits.
1906 CTV has effective control of the only two sports cable networks in the country which means they can effectively bid and pass off rights between their free to air network and their cable networks. No one else can do that because they can't deal with the other two sports networks.
1907 As an interim measure, I would encourage the Commission to make a ruling that CTV should not be allowed to bid on any sports rights until they dispose of one of their sports networks. That's one thing that can be done.
1908 The other thing that can be done is with this acquisition, CTV getting, and I will read them out -- BCE is getting as part of the CTV package: CTV NewsNet, Talk TV, The Comedy Network, TSN, RDS, The Discovery Channel, SportsNet -- which they are required to dispose of but don't seem to be willing to do so. There are active buyers out there -- Outdoor Life, Canal Évasion, and they have 50 per cent of the ROB TV which, as I understand it, they want to get the other 50 per cent as well, and they have minority interest in three other cable channels.
1909 That is a huge list of television properties in the Canadian broadcasting system. One thing that would satisfy us a little bit would be that they would be disallowed from purchasing any more specialty channels for a period of five years until we see how BCE acts as a corporate citizen in the Canadian broadcasting system.
1910 Don't misunderstand me. I'm not suggesting that BCE is a mean, ugly corporate citizen. They are not. They are truly a well regarded Canadian company, Canada's largest company. We would like the experience of finding out how they plan to be good corporate citizens in the Canadian broadcast market before you allow them to get any bigger and effectively put a severe imbalance in the Canadian broadcasting system.
1911 Now, we could also say that perhaps CTV should not be allowed to purchase foreign programming and leave it on the shelf, which is what broadcasters have done in other territories where we operate. They buy programming just so that we cannot get it.
1912 That would be a good condition of licence. I just don't know how you monitor it. It's possible, but it's complicated. As I said before, I'm really not interested in introducing new regulation in this area. However, it's one thing that you might want to consider.
1913 Ken, I think you have got some more comments.
1914 MR. SHEA: Madam Wylie, just one sort of closing observation. You asked -- I'm pretty certain it was Vice-Chairman Wylie -- asked Mr. Monty how he would determine or judge success as to how this acquisition worked. He indicated that there were three key things.
1915 The first was to ensure that they are number one in their sector. The second was to ensure that there was a healthy return to shareholders. The third was that they would ensure that they respected the regulatory environment with which they had now joined.
1916 I think what we are suggesting is the Canadian broadcasting system is an incredibly fragile system. It's no big secret how it works. If we are all successful in selling foreign programming and making a profit from that, it is the driver that makes Canadian television possible.
1917 Our concern is that Mr. Monty pay particular attention to the third item, and that is that he respect the full regulatory environment to which he is joined and that there is a broadcasting system and along the way we all have to ensure that we assist and protect our friends in the sector, as we did CHUM, as others have done in past iterations.
1918 It is a frightening potential that with just the profits from just pay phones in Ottawa, they could undermine the broadcasting system by doing what Mr. Noble suggests, and that is buying more programming, putting it on the shelf, keeping it away from ourselves, CHUM, the Craigs and other specialties and in one feint moment, this rather fragile broadcasting system has taken a significant hit and that's what we are concerned about.
1919 COMMISSIONER WYLIE: Mr. Noble, explain to me how simply the fact that programming is not aired and that the shelves are too large that CTV would be a test. Because isn't a lot of programming purchased exactly in that fashion, where it is packaged and some of it is not aired but you must buy it along with -- that may not be true when you buy Seinfeld, but --
1920 MR. NOBLE: We try to avoid that. In our companies there is very little programming that does not get aired. In fact, I can't think of anything off the top of my head that does not finally make it to air.
1921 CTV has the packaging ability, with all of their specialty channels, to acquire hours and hours of programming, which they can also acquire the conventional broadcast right to and air it on their specialty channels. The conventional broadcast right is denied us to air on our conventional broadcast system.
1922 COMMISSIONER WYLIE: Who is between us and you is more likely to know that this is occurring?
1923 MR. NOBLE: Who else in the market?
1924 COMMISSIONER WYLIE: No, as between -- you want the Commission to monitor this. I would love to go to Los Angeles often --
--- Laughter / Rires
1925 COMMISSIONER WYLIE: -- but who is the most likely party as between the Commission and you, the industry, to know whether this is occurring?
1926 MR. NOBLE: It would be the industry, and we would be willing --
1927 COMMISSIONER WYLIE: And so you are putting us on notice that you would come and tell us?
1928 MR. NOBLE: We would be willing to provide an annual report that indicates, in our view, what is happening and how it is affecting the industry.
1929 COMMISSIONER WYLIE: Or a report of what is allegedly abuse of purchasing clout.
1930 As a businessman surely you realize how difficult this is.
1931 MR. SHEA: We will know when we get to Hollywood if we get down there and there is nothing left and the Commission would find out in short order because I think it would be written up in the business pages.
1932 Commissioner Wylie, it is difficult to put, in all fairness, a safeguard around this. I think what we have suggested is that in your decision you capture this notion that we hope that the players will act responsibly. We hope that they will respect that there has been an ongoing 30-year old tradition in our sector to ensure that people do not try to simply buy out shelf material -- pardon me, buy and put on the shelf that which is required for the entire system to benefit from, or overpay in one strategic year to the detriment of others.
1933 Now, I know that Mr. Fecan will say in his rebuttal that what CanWest -- because he refers to us as CanWest-WIC -- is two conventional networks and that we, in all likelihood, we are probably going to be buying more U.S. programming, conventional, than he is.
1934 He also suggested that there still is a discerning difference between conventional rights and specialty rights.
1935 Two fundamental myths.
1936 We are not two networks, not yet and not ever. The secondary stations of WIC will never have the buying clout of CanWest.
1937 Secondly, and most importantly, the differentiation between conventional rights and specialty rights is very quickly disappearing -- very quickly disappearing. We are buying Canadian rights, as is the case with TSN, which is a specialty service that has a lot of conventional sports rights and first run rights on its service, and we are seeing more and more of that.
1938 But the key here, Commissioner Wylie, I think, is to reference in the decision that we anticipate and hope that BCE will respect the sector that it is now joining.
1939 COMMISSIONER WYLIE: You may have noticed yesterday that I did ask Mr. Monty whether he would temper his business interests by the existing regulatory requirement. I think they were their words in their Executive Summary.
1940 So basically what you are telling us on this issue is you would like this clever question repeated in a decision.
1941 MR. SHEA: Absolutely.
1942 COMMISSIONER WYLIE: Mr. Noble.
1943 MR. NOBLE: Yes?
1944 COMMISSIONER WYLIE: Oh, I thought you had something else to add.
1945 MR. NOBLE: No, Kevin said it.
1946 COMMISSIONER WYLIE: On the other issue, which is the issue of -- I guess the simplest way to talk about it is vertical integration between content and the distribution sector.
1947 There has been, of course, a lot of talk during the digital hearing and during this one about ExpressVu being a minor playing, having its subscriber base spread around the country as compared to the cable operators, and being a small player in distribution, and especially with the prospect of cable also digitizing.
1948 On the other hand, you and some other parties say "No, no, the digital subscriber base is what one looks at and they are dominant." You want a code of conduct that requires or demands equitable treatment. Bell ExpressVu has offered a code to meet this concern during the digital hearing and has re-offered it or filed it yesterday.
1949 You seem to -- you have read that code, you have seen it. Do you think that it responds to the concerns which you describe at page 5 as the discretion they have to discriminate with regard to packaging and marketing?
1950 MR. NOBLE: It's a good start, but it doesn't go all the way. It still leaves in the hands of the BDU complete control and ultimate decision-making in that area.
1951 COMMISSIONER WYLIE: Since access is required but the Commission at the moment doesn't really have any rules about pricing, tiering, what they advertise more than anything else, do you see this code as addressing these issues and, if not, how could it be bolstered to address them? Are they addressable issues without going to a more restrictive regulatory system for discretionary services?
1952 Do you know what I mean? Once you package them and you sell the package for a price -- at the moment I don't think we know who gets what portion of that. Each program owner, I suppose, knows what he is getting as the wholesale, but he doesn't know in the package how much the retail part flows back to certain programmers more than to other programmers. The mark-up is unknown to the consumer and I suppose to the program owner as well --
1953 MR. NOBLE: Yes.
1954 COMMISSIONER WYLIE: -- and service owner.
1955 MR. NOBLE: Yes. Again in that area we are not looking for extensive regulation. I think we heard lots of description yesterday about fair and equitable treatment and that is what we are looking for, equal access fair treatment, along -- commensurate fees and commensurate access with the affiliated services of the BDU owner, that we shouldn't expect any more and we don't expect any more.
1956 There should be a system to ensure that has happened, it is auditable and we are able to monitor it. The code doesn't -- at present, its current language does not go far enough to ensure that happens.
1957 COMMISSIONER WYLIE: Do you have any concrete suggestion as to how these other matters would be addressed, which to me would be of greater concern? Access is ensured -- well, I guess it's not in the digital services, but in the analog services that ExpressVu provides in digital form and in the whatever number of Category 1 services that will be licensed access is ensured.
1958 MR. NOBLE: Yes.
1959 COMMISSIONER WYLIE: What is the problem, I suspect, is how these are treated once they are made available or offered to the consumer. How are they offered and when they are offered, how the money flows between them.
1960 MR. NOBLE: How they are packaged, how they are marketed and how they are priced, exactly.
1961 COMMISSIONER WYLIE: How to price and whether the mark-up within the tier, which is not regulated at the moment, is such as to advantage that distributor's own services. How do you resolve that without getting into very micro-management of financial and commercial negotiations between the parties?
1962 MR. NOBLE: I think the code is a good start and some of the discussion yesterday between Mr. Shaw and Rogers and the Commission had some ideas that would go even further to help ensure that it is fair and equitable. That is a process that we are encouraging the Commission to support and perhaps --
1963 COMMISSIONER WYLIE: So you are getting some level of comfort in how --
1964 MR. NOBLE: We are moving in the right direction, but we are not all the way there yet.
1965 COMMISSIONER WYLIE: And I notice that you would also like us to ensure that if BCE buys CTV it not be allowed to increase is stable of discretionary services.
1966 MR. NOBLE: Yes.
1967 MR. SHEA: Madam Wylie, if I may --
1968 COMMISSIONER WYLIE: Yes. Go ahead.
1969 MR. SHEA: If I may give you a very practical example on ExpressVu and one of our concerns going forward.
1970 Currently, ExpressVu carries most if not all of the CTV affiliates across Canada. Currently, ExpressVu does not carry all of the Global affiliates.
1971 We were approached by ExpressVu about two or three months ago and asked if we would agree to tape delay by one hour our Regina feed so that it could be a differentiated service on ExpressVu. We said, "That is contrary to the Broadcasting Act because it is interfering" -- whatever the actual legal words are -- "with the signal. We cannot do it."
1972 Our signal is not now on ExpressVu but the CTV signal is, and when the hours change in October, apparently the CTV Regina signal is going to be delayed by an hour. We are going to know a lot more when this deal is actually approved and closed.
1973 But from a very practical point of view, back to the tenderness of conventional broadcasting, I think that the Commission has to ensure that all conventional broadcast services in markets are treated fairly by Bell ExpressVu. In other words, if in a market they are putting up CTV-owned channels, let's take Toronto, then they have to ensure that all conventional services are carried in that market and they are carried and treated equally, which also means the level and extent of promotion of Canadian programming.
1974 I think there has to be some protection and fairness going forward. Those kinds of issues aren't currently captured in this code because it principally deals with digital services, not analog and not basic services. There is a revolution going on with respect to how conventional broadcast services are carried and marketed on DTH. This is something I think the Commission has to be made well aware of and ensure that ExpressVu acts in a mature and fair way.
1975 COMMISSIONER WYLIE: So you are speaking here of the up-linking of local signals.
1976 MR. SHEA: Correct.
1977 COMMISSIONER WYLIE: There are other problems, of course, involved in that, because then it makes Regina available in Nova Scotia --
1978 MR. SHEA: That's correct. That is currently the case.
1979 COMMISSIONER WYLIE: -- possibly to the disadvantage of some other local owners or in areas where CHUM has.
1980 So this is a question at the moment of abiding by the regulations, I guess, by carrying the network but up-linking more services.
1981 The code, I don't think, is only applicable to the new digital services. It would be applicable in the case of ExpressVu with regard to its carriage of analog services, albeit in a digital form, and presumably what we heard from the cable operators yesterday was if this code would be applicable to the analog world as well.
1982 MR. SHEA: And the basic cable world.
1983 COMMISSIONER WYLIE: Yes, with over-the-air signals.
1984 The last area that I wanted to ask you about is the possibility of anti-competitive behaviour, Internet-type platforms. We heard BCE-CTV on that matter yesterday. I have read your view of the matter in your written intervention and your presentation today.
1985 Could you, again, in light of what was said yesterday, explain to me exactly how BCE would be a significant gatekeeper at the level of digital media platform distribution?
1986 MR. NOBLE: I will open some comments and then pass it to Ken Goldstein, who is our Internet expert.
1987 We have just talked about the ExpressVu aspect on the Internet side, on the Sympatico side. Sympatico is Canada's largest ISP and it has, I'm told by the technical expert, the ability to filter out program enhancements that it may be carrying or filter in, allow to filter in, program enhancements that it may be carrying on its own programming streams, while if someone clicks through and accesses using Sympatico ISP access as a global stream or another competitor's stream, technically the enhancements that we may be providing could be blocked out.
1988 Ken, I will ask you to elaborate on that.
1989 MR. GOLDSTEIN: Thank you.
1990 The question that we are now faced with, I think, particularly in the context that BCE has set for us, which is connectivity, content and commerce, is how they are all going to work together. It is not simply a matter of "We are going to be in each of these three fields", but obviously the added value to BCE comes from how those pieces work together. So we are moving beyond questions of just simple access: Will I be on? We are into questions of: Will I be on at the same level of quality; will I have access to data about the consumers that is being gathered by the BDU or the ISP; will the interactive stream that I want to embed in my signal for my e-commerce purposes be passed through?
1991 In other words, aside from simple access, there are now many shades of grey that will determine the ultimate success of all of those three things working together.
1992 We saw yesterday a chart put up that showed the relative ranking in BCE's view of the BDUs. If one were to put up a chart of ISPs, then Sympatico would rank where Rogers ranked in the BDU chart as the very largest with I think roughly the same percentage of the market.
1993 Although in theory one can say everybody should be open and everything should be carried and everything should be passed through, we note for the record, because it is part of the record, that the agreement between Sympatico and CTV NewsNet, which leads, if I happen to be a Sympatico high-speed subscriber -- I might even be the poster boy for high speed because I'm 6.1 kilometres from the central office and it works -- the fact is the CTV NewsNet picture there is bigger. It's better quality. They have done some very good things with it, and so it is presenting a better face than anybody else's picture that comes on that screen.
1994 I note in the news release of March 31st, between BCE and CTV, that the agreement is that future programming of CTV will be available on the Internet only through the Internet portal sites operated directly or indirectly by BCE.
1995 Clearly, there is some notion of exclusivity in some way being introduced into this business at the Internet level. You have the whole agreement I believe filed in confidence. We don't have it. So I think we have to look beyond questions of simple access and start looking at these qualitative shades of grey as well.
1996 COMMISSIONER WYLIE: My last comment on this issue is I noticed, Mr. Shea, that your fifth point in your conclusion, at page 10, is:
"The Commission must ensure, that there is no discrimination against unaffiliated Canadian content providers in the way content is accessed or delivered on Bell-owned..." (As read)
1997 And you added verbally the words, "regulated media outlets or platforms", which is not in the written text but which will show up, I guess, in the transcript.
1998 What is the difference?
1999 MR. SHEA: I think the difference is quite simply some of the Thomson media outlets are not regulated, for example. I don't think we are trying to put any more onerous work on the Commission to start regulating things that they currently don't regulate.
2000 So it is essentially respecting, I guess, those aspects in the broadcasting rules and regulations and those aspects on the telecom side where you regulate. We have to ensure there is fairness.
2001 COMMISSIONER WYLIE: I am not the expert on the extent to which we regulate new media on the Internet at the moment, so I will leave it at that. But I gather from Mr. Goldstein that if such discrimination is engaged into, that is discernible.
2002 We thank you very much.
2003 Mr. Noble, welcome back after 14 years. I hope it takes more than another 14 for your hair to get like Mr. Fecan and Mr. Shea after appearing before us.
--- Laughter / Rires
2004 MR. NOBLE: Thank you. Actually, it is starting to fall out. I'm going the opposite way.
2005 COMMISSIONER WYLIE: Oh, you may join Mr. Monty, then.
--- Laughter / Rires
2006 CHAIRPERSON OF THE COMMISSION: We have one more question, I think.
2007 Commissioner Wilson, please.
2008 COMMISSIONER WILSON: Good morning, Mr. Noble, Mr. Shea.
2009 Mr. Shea, you talked about U.S. programming. I want to go back and just ask you one question about the $140 million priority programming proposal.
2010 You talked about U.S. programming being the engine of profits in the Canadian broadcasting system and you have been very successful in the simulcast business, or to use a phrase that has been bandied about during the hearing, the current broadcast paradigm.
2011 What about the argument that this would be an opportunity to shift that business paradigm for Canadian television? In the way that you sort of said, you know, set up an independently managed fund and handle the whole thing differently, are you saying that there is no merit to that argument?
2012 I mean, it could be argued that it's very Canadian to put the money into a fund, independently administered, shared by all and on we go. And, you know, Canadian television doesn't earn the profits and the U.S. programming does and we continue to quote Gordon Pinsent from the video B, the tenants of our culture.
2013 So if you continue to do things the same way, can we ever break out of this box that we are in, or are you saying that no, we can't? Because if we hope that Canadian programming can be the engine of our Canadian broadcasting system, shouldn't we do something that has the potential to shift that paradigm?
2014 MR. SHEA: Commissioner Wilson, we could take hours on the response to this question. I think we should take, first, great pride in our broadcasting system, where there are certain elements, such as news and sports, children's, that are highly profitable. Drama is becoming more profitable, but it still needs the economic support through funds, through government assistance, because of the mere economics of making dramatic television.
2015 But I think collectively as a system, we all hope, in the next number of years, as we see broadcasting systems develop from a multi-channel perspective around the world and have an appetite for more and better programming, that we can see that trend be altered significantly.
2016 We, broadcasters, have now started to invest for the first time in companies that make programming and make programming to sell both domestically and internationally. I think that is going to see potentially the tide change on the economics of Canadian drama.
2017 But let me come back to your fundamental question, and that is, should this fund be independently administered. I think, in fairness, Commissioner Wilson, I think what we all need in our sector is a bit more clarity benefits. Because I think if we were now to revisit our benefits that we put forward in CanWest after we saw or will see your decision, we might have said, well, we will put up a fund and we will spend it all with ourselves. I don't think that that is the tradition of this Commission, because I do not believe that you have ever approved a fund where you spend it all with yourself, but it's there to help under-represented program areas and it's there to help independent producers.
2018 COMMISSIONER WILSON: We don't use that word any more, "under-represented".
2019 MR. SHEA: So I think the punch line for us, perhaps, is maybe we all need a bit more clarity in the way we devise and define benefits overall so that there aren't these debates at this hearing, so that there aren't the debates that we went through in Vancouver with the Commission.
2020 However, you better hurry because there is not too many companies left to go. So the sooner we can have clarity, I think the better for the system.
2021 COMMISSIONER WILSON: Well, thank you for telling me what you would like in the way of the clarity in terms of benefits. But I'm not sure you really answered my question.
2022 I guess what I heard you say was that you think it could be done, that we could create a system where Canadian drama, in particular, would be more profitable but that it should be done by all, not just by one in the context of a transaction like this.
2023 MR. SHEA: Yes, that's correct.
2024 MR. NOBLE: Commissioner Wilson, if I could just add, it would be my desire to have nothing but Canadian content on our stations. Let me explain why that is so.
2025 I have spent the last 10 years in the South Pacific broadcast operations, and without exception, the top 10 -- in fact, most weeks -- to 20 programs in each of those markets is locally produced.
2026 COMMISSIONER WILSON: They don't share a border with the U.S.
2027 MR. NOBLE: The issue I'm coming to is they don't have this big huge U.S. neighbour where all of the signals leak across the border. In fact, they are carried by all the cable companies.
2028 If we could somehow put up a wall and tele cable companies not to carry...
2029 CHAIRPERSON OF THE COMMISSION: Or speak French.
--- Laughter / Rires
2030 MR. NOBLE: Or speak French. And deny carriage of all of the cable companies of the U.S. networks -- I mean, the system is ridiculous. Time Warner has more channels on the Canadian cable system than we do. If we could eliminate all of those, we could progress to that new paradigm a lot quicker than it's going to take us. We may never get there.
2031 COMMISSIONER WILSON: Well, we can't, obviously, eliminate those signals. But it's how to do it within that context. I guess that's the backdrop for my question to you, which is, here is an idea which is thinking outside the box and arguments about whether or not it's self-serving, take those points.
2032 But it's a different approach. Is it worth trying? Is it worth taking the risk to try and... I mean, you have to accept the context that is the Canadian broadcasting system. We can't put up a wall.
2033 I mean, Madame Bertrand said to speak French, because the Québec experience is exactly what you experienced in the South Pacific, because they have a unique culture and language.
2034 MR. NOBLE: In response to your question, you know, I applaud CTV for thinking outside the box and it's something we will be watching closely, and in fact, we will be investing, as you well know, more and more in Canadian content and hopefully, to make it work as well.
2035 COMMISSIONER WILSON: We will be watching in anticipation.
2036 MR. NOBLE: Good.
2037 CHAIRPERSON OF THE COMMISSION: Commissioner Wylie.
2038 COMMISSIONER WYLIE: Mr. Noble, since you were not in Vancouver at the CanWest Global WIC hearing, I think you should know that the CanWest panel looked a lot more cheerful.
--- Laughter / Rires
2039 MR. NOBLE: I'm a lot better dealing with positive issues.
2040 COMMISSIONER WYLIE: Yes. My grandmotherly advice would be, cheer up!
--- Laughter / Rires
2041 COMMISSIONER WYLIE: Or else, even Ms Bell may end up with white hair!
--- Laughter / Rires
2042 CHAIRPERSON OF THE COMMISSION: Thank you very much. Thank you, Mme Bell, Mr. Noble, Mr. Goldstein.
2043 We will take a break and we will be back in 15 minutes.
--- Upon recessing at 1118 / Suspension à 1118
--- Upon resuming at 1140 / Reprise à 1140
2044 LA PRÉSIDENTE DU CONSEIL: Alors nous poursuivons.
2045 Madame la Secrétaire, s'il vous plaît.
2046 Mme POIRIER: Merci, Madame la Présidente.
2047 La prochaine intervention est présentée par l'Association québécoise de l'industrie du disque, du spectacle et de la vidéo, l'ADISQ, représentée par Mesdames Solange Drouin et Annie Provencher.
INTERVENTION / INTERVENTION
2048 LA PRÉSIDENTE DU CONSEIL: Bonjour, Mesdames.
2049 Mme DROUIN: D'abord je me présente. Solange Drouin, vice-présidente aux affaires publiques et directrice générale de l'ADISQ.
2050 Je suis accompagnée de Annie Provencher, agent de recherches aux affaires publiques.
2051 D'abord, Mesdames et Messieurs les Conseillers, merci de votre invitation à comparaître dans le cadre de cette audience, audience qui, on l'a vu nous aujourd'hui -- on n'était pas là hier, malheureusement, on avait autre chose sur le feu -- soulève une foule de questions fondamentales, notamment en matière d'accès des producteurs indépendants à ces nouvelles structures et aussi plus largement l'impact de plus en plus grandissant de l'intégration verticale que ça suscite et ces questions-là évidement ont été abondamment traitées par CFTPA ce matin et des arguments aussi qui ont été invoqués au même effet par l'APFTQ.
2052 Comme le partage des juridictions entre l'ADISQ et l'APFTQ fait en sorte que c'est l'APFTQ qui représente les intérêts des producteurs de variétés en matière notamment de financement et de réglementation. L'ADISQ n'a pas l'intention d'ajouter quelque argument que ce soit aux arguments qui ont été invoqués ce matin par Mme McDonald, CFTPA, et l'APFTQ, sauf pour exprimer notre appui face à ces interventions-là.
2053 Mais comme vous le savez, le partage de nos juridictions fait en sorte que l'ADISQ a conservé son intérêt plein et entier d'intervenir afin de s'assurer que la chanson et les variétés en général puissent occuper la place qui leur revient dans l'ensemble du système canadien de radiodiffusion.
2054 L'ADISQ on a toujours limité nos interventions par le passé aux invitations du CRTC en matière de politique et aux demandes, aux invitations qui mettaient en cause des services francophones de radiodiffusion.
2055 Mais à cette occasion on a dû faire exception à cette tradition-là. Évidement, on a déjà beaucoup de travail juste à répondre à ces invitations-là, mais malheureusement en regardant le dossier public de CTV on a conclu qu'on n'avait pas le choix d'intervenir dans le cadre de cette audience qui, évidemment, intéresse plus un service anglophone que francophone, bien entendu, étant donné qu'il y a certains aspects particuliers qu'on considérerait qui ne seraient pas traités beaucoup, ou sinon pas du tout, par les autres intervenants que nous-mêmes.
2056 Plus précisément on s'est intéressés dans notre mémoire à regarder les investissements de BCE en matière de bénéfices tangibles pour s'apercevoir que malheureusement, encore une fois, ces investissements traduisaient une attitude face aux variétés -- traduisaient plutôt un manque de considération face, encore une fois, au secteur des variétés.
2057 Vous le savez, nous avons comparu à plusieurs reprises devant vous à ce sujet-là. A chaque fois, que ce soit en juin 1998, lors des audiences sur la politique TV, en mai 1999, lors du renouvellement de Radio-Canada et encore cet été, il n'y a pas si longtemps à Montréal, renouvellement de TQS, et à chaque fois nous avons déploré, chiffres à l'appui, le peu de place qu'accordaient les TV privées et publiques aux émissions consacrées à la musique et aux variétés, évidemment les investissements conséquents.
2058 Le CRTC, lors du renouvellement de la -- lorsque vous avez émis la nouvelle politique sur la télévision, vous vous êtes montrés sensibles à notre préoccupation en déterminant justement ces émissions de Catégories 8(a) et 9, pour ne pas les nommer, comme étant des émissions prioritaires.
2059 Malheureusement dans le cadre de la transaction qui est devant vous aujourd'hui, le fait que ces émissions aient été déterminées prioritaires ne s'est pas traduit comme étant par des investissements prioritaires de la part de BCE. Sur les 230 millions qui constituent les bénéfices tangibles de la part de BCE, il y a seulement 10,5 millions de dollars qui est consacré au secteur des variétés, soit 4,5 pour cent du total.
2060 Bien sûr, il s'agit d'un effort fort louable de la part de BCE -- on ne le se cache pas -- d'investir 1,5 million de dollars pour une émission par année dédiée aux artistes canadiens de la chanson et des variétés. Je peux en témoigner évidement, car vous savez qu'à l'ADISQ on produit chaque année, et on co-produit avec la Société Radio-Canada, une émission de cette envergure-là chaque année, une fois par année alors il y a vraiment des impacts qui découlent de ces événements-là. On en est bien conscients.
2061 Mais lors de ces événements-là qui arrivent trop peu souvent -- c'est donc de façon trop ponctuelle -- on est obligés de limiter la vitrine à quelques artistes, souvent les artistes établis, et finalement ces vitrines-là ne servent plus au développement des carrières de nouveaux artistes, artistes qui pourraient justement nourrir encore la programmation de CTV, par exemple.
2062 Donc par le passé, et encore maintenant -- ça se traduit dans la demande de BCE -- il y a donc un manque flagrant d'investissements consacrés pour une émission régulière présentant des prestations d'artistes et non seulement des "talkshow" où on invite des artistes.
2063 Bien sûr, dans la programmation de CTV -- on l'a regardée à fond -- il y a des émissions qui s'intéressent aux artistes mais il y en a très peu qui offrent une vitrine leur permettant d'offrir des prestations aux artistes. Si c'est le cas, c'est encore une fois les artistes seulement établis qui peuvent en bénéficier. Les artistes qui arrivent à se faire inviter à des "talkshow" pour donner une prestation, ou la prestation, dans le cadre du "talkshow", ce n'est souvent que des artistes établis. Les artistes, les jeunes artistes de la relève sont vraiment laissés pour compte, tandis qu'il faudrait y avoir un investissement pour stimuler la carrière de ces artistes-là qui pourraient encore une fois, je l'ai dit, alimenter finalement la programmation de CTV.
2064 Les raisons évoquées souvent pour ne pas faire un investissement massif dans le secteur des variétés, on nous dit que ce genre d'émissions-là n'attirent pas le public. Malheureusement, selon nous, le problème est très mal posé quand on le situe comme ça parce que le fait que ces émissions n'attirent pas le public telles qu'on les connaît maintenant -- les émissions de variétés -- c'est que les investissements consacrés à ces émissions-là ne sont pas assez importants.
2065 On est toujours surpris un peu d'entendre cet argument-là parce que dans d'autres secteurs on l'a compris. On a compris, par exemple, que dans le secteur des dramatiques pour retenir le public on a consacré des sommes importantes. Dans les documentaires encore, dans la demande de BCE, on veut consacrer des sommes importantes, on veut même consacrer la somme de un million de dollars pour stimuler justement la façon d'attirer et de retenir le public pour les émissions documentaires. On comprend donc très mal pourquoi on n'applique pas la même logique dans les secteur des variétés où les investissements devraient être à la même hauteur.
2066 On aurait souhaité le voir traduit dans les propositions de BCE -- surtout on l'a vue cette semaine -- ou la semaine passée plutôt -- que M. Monty avait déjà manifesté son intérêt pour acquérir peut-être TQS. Alors on verrait sûrement peut-être d'un meilleur oeil la transaction s'il y en avait une de TQS s'il y avait un pas dans la bonne direction qui était fait dans le cadre de cette transaction-là, mais bien sûr c'est toute une autre histoire. On verra quand on sera là.
2067 Mais pour l'instant, tenons-nous en à CTV. On souhaite donc que le CRTC demande à BCE de consentir dans le secteur des variétés, plus particulièrement aux émissions de Catégories 8 et 9 des investissements beaucoup plus importants que les sommes qu'il propose présentement.
2069 LA PRÉSIDENTE DU CONSEIL: Merci beaucoup.
2070 Madame Noël.
2071 CONSEILLÈRE NOËL: Je pense que la présentation était claire. Je n'a pas de questions. Peut-être une petite question. J'ai remarqué dans votre intervention écrite -- excusez-moi, j'ai des chats dans la gorge, c'est le cas de le dire.
2072 LA PRÉSIDENTE DU CONSEIL: Elle a aussi trois chats, il faut le dire.
--- Rires / Laughter
2073 CONSEILLÈRE NOËL: J'ai remarqué, et ça m'a un petit peu surprise, que vous étiez un peu déçue non seulement avec le montant accordé aux émissions dites de variétés, mais encore est-il que c'est un montant additionnel, c'est un montant qui s'ajoute à ce qui est déjà consacré par CTV à ce genre d'émissions. Il s'agit-là d'un bénéfice additionnel.
2074 Mais vous avez noté qu'il n'y avait pas de dépenses faites pour le marché francophone, et malheureusement j'ai de la misère à comprendre que vous puissiez demander à CTV qui est une entreprise anglophone -- en fait, vous mentionnez ici: Le peu de place qu'accordent les télévisions privées et publiques francophones -- oh, ce n'est pas ça.
--- Pause / Pause
2075 CONSEILLÈRE NOËL: Vous dites que vous n'intervenez pas dans les demandes francophones mais que dans celle-ci vous intervenez -- dans les demandes anglophones ou dans celle-ci vous intervenez. Est-ce que vous voudriez qu'il y ait une --
2076 Mme DROUIN: Non, pas du tout.
2077 CONSEILLÈRE NOËL: D'accord j'ai mal compris.
2078 Mme DROUIN: C'est sur le principe. On se dit, bien sûr on ne serait pas intervenus n'eut été justement de ce manque flagrant-là. On aurait poursuivi notre tradition là-dessus. Comme je vous le dit, on a déjà assez de travail à répondre aux demandes de services francophones. On ne voulait pas ajouter ça, mais ce qu'on souhaitait montrer au CRTC c'est que, bien sûr, on fait partie de la grande famille des variétés canadiennes. Il y a des artistes qui sont produits par des producteurs membres de l'ADISQ qui se produisent aussi en anglais.
2079 Alors on voyait quand même un intérêt à faire valoir au Conseil justement le peu d'investissements consacrés dans ce secteur-là parce que ça sert non seulement dans une part plus minime les producteurs membres de l'ADISQ et les artistes qui leur sont associés, mais de façon générale en variétés on le sait qu'à la télévision anglaise il y a beaucoup de chemin à faire.
2080 Il y en a à faire au secteur francophone mais il y en a beaucoup à faire aussi au secteur anglophone.
2081 CONSEILLÈRE NOËL: Maintenant, juste peut-être une dernière question. Vous dites que 4,5 pour cent du budget des bénéfices ce n'est pas beaucoup, mais est-ce que en chiffres absolus le montant de 10,5 millions n'est quand même pas une somme intéressante?
2082 Mme DROUIN: C'est sûr. Quand on le regarde de façon absolue, c'est ce que le gouvernement du Canada nous donne par année. On comprend très bien ça. Mais la façon que c'est -- puis une émission, comme je vous l'ai dit, une émission de cette envergure-là ce n'est pas à dénigrer mais il y a un coup de barre à donner si on veut passer à une autre vitesse et qu'on donne toujours de l'argent aux variétés de façon à ce qu'il y en ait toujours un peu mais jamais un coup de barre significatif pour qu'on fasse un bon et qu'on puisse finalement offrir aux Canadiens accès à des émissions de variétés qui retiennent le public et qu'on donne le goût aux radiodiffuseurs finalement d'investir en leur prouvant que s'ils investissent, ils retiendront le public. C'est un peu l'oeuf avant la poule.
2083 On nous dit tout le temps, bien non, ça ne marche pas, alors on n'ira pas. Mais vous n'allez jamais vraiment jusqu'au bout pour prouver, justement, que c'est possible de retenir le public en offrant, en donnant les moyens à ces émissions-là de faire quelque chose de vraiment original.
2084 COMMISSAIRE NOËL: On prend bonne note de vos commentaires. Merci.
2085 LA PRÉSIDENTE DU CONSEIL: Merci, mesdames.
2086 MS POIRIER: The next intervention will be presented by the National Capital Alliance on Race Relations, represented by Sonia Brereton.
--- Pause / Pause
2087 MS POIRIER: Is Sonia in the room? I guess not, so we will move on to the next one, the Center for Research-Action on Race Relations.
--- Pause / Pause
2088 CHAIRPERSON OF THE COMMISSION: Good morning. Welcome. Bonjour.
2089 Mme POIRIER: Pourriez-vous ouvrir votre microphone, s'il vous plaît. Merci.
INTERVENTION / INTERVENTION
2090 M. NIEMI: J'aimerais vous présenter des excuses pour l'absence de Mme Roth qui ne peut pas se joindre à nous ce matin, étant donné qu'elle a des cours à l'Université Concordia ce matin.
2091 Je voudrais profiter de cette occasion aussi pour vous remercier de nous avoir invités à présenter nos points de vue et nos commentaires sur le projet de BCE-CTV.
2092 We are particularly pleased to be able to --
2093 MS POIRIER: Excuse me. For the court reporter's benefit, could you please introduce yourself.
2094 I'm sorry. I thought you already have it on record. My name is Mr. Fo Niemi. I am the Executive Director for the Centre for Research-Action on Race Relations, based in Montreal.
2095 Le nom en français, c'est le Centre de Recherche-Action sur les relations raciales. J'ai une voix très grave, mais je vais essayer de le faire de façon moins sérieuse.
2096 We are very pleased to be contacted and invited by BCE-CTV to participate in this process and to comment on some of these excellent initiatives, particularly in the area of diversity and how the investment of $330 million will impact on communities from coast to coast.
2097 Many of the initiatives are basically an example of the kind of corporate social responsibility and corporate leadership affecting the Canadian broadcasting industry and Canadian culture and, of course, the Canadian economy of this present century and beyond.
2098 We must commend BCE and CTV in its proposed investment in a wide range of measures to address the needs and interests and aspirations of groups such as aboriginal people, women, young people and young adults in the benefits package.
2099 Since last year in our travel to discuss with communities, some different cities, on diversity and broadcasting in the media, we have heard stories and we have situations which we would perhaps share with you in this presentation today.
2100 We would like to focus particularly on the issue of diversity, racial and ethnocultural diversity on BCE-CTV. In light of the various statutory regulations and the framework for employment equity and multiculturalism, we are very pleased that BCE-CTV takes into account the need to do something about diversity in the package.
2101 However, we also believe that it needs to describe a clear plan of action, how it will ensure that the network eventually reflects in a very comprehensive and very accurate fashion the diversity of this country, particularly at the regional level and at the national level.
2102 Let me take this opportunity to go straight to some of the issues that we have raised. Notwithstanding the excellent spirit and also the excellent description of the initiatives that BCE-CTV has outlined in its benefits package, after analysis we have looked at some of the aspects of this plan and would like to perhaps bring to your attention some of the issues that we believe that as a federal regulator needs to be raised or to be examined in closer detail.
2103 For example, we have three points. First, we find, unless our analysis is wrong, we find very few specific references to initiatives that target racial minorities. Racial minorities now represent more than 12 per cent of the Canadian population. It's a number that is growing as immigration is changing the face of this country.
2104 Some of the initiatives related to race or cross-cultural relations outlined in the plan are not necessarily those that truly involve racial minorities at all levels. We believe that this needs to be taken into account because the communities and people in different cities who will come from racial minorities tend to complain or bring to our attention the fact that most cross-cultural initiatives may sound good on paper, but in practice there is a hierarchy and they are usually not involved from the outset or integral active partners in the decision-making process.
2105 We, therefore, recommend and invite BCE-CTV to develop strategies and means to truly ensure that racial minorities in specific regions of the country are full beneficiaries and partners in programs initiatives related to diversity.
2106 Here we would like to bring your attention to some cities such as Halifax, Montreal, Toronto and Vancouver where there are community infrastructures that already exist and they would welcome such a partnership. For example, some of the training program at Kings College is trying to do with the African-Canadian community in Halifax. We notice that Kings College will participate later, so we hope that you have an opportunity to inquire exactly what is being done to encourage African-Canadian journalists or potential journalists to be more active and visible in the broadcasting industry in that part of the country.
2107 Secondly, we are concerned about the geographical and regional accessibility and the adequacy of some of these excellent initiatives proposed by BCE-CTV. For example, regarding the investment in Capilano College, we are concerned in a country as diverse and vast as Canada, one institution in one part of our country may not be sufficient and accessible for communities and individuals in other regions.
2108 We believe that this country is founded and evolves on a notion that no region should be marginalized and that equitable allocation of resources based on needs and other sociodemographic factors is an essential element of our public policy.
2109 We, therefore, recommend that both the CRTC and BCE-CTV take into consideration the reality of some groups in communities across this country from coast to coast and to the coast of the north so that some of the special regional realities in communities may be better served by the excellent package.
2110 La troisième préoccupation que nous avons concerne toute la question de l'allocation de ces ressources pour le Québec.
2111 A titre d'exemple, suite à l'analyse du plan, il est un peu difficile pour nous de comprendre comment, pour une métropole comme Montréal, les collèges ou les universités qui offrent des programmes de radiodiffusion ou de formation en journalisme puissent profiter de ces investissements ou des ces plans d'action que proposent les entreprises concernées, notamment au niveau du développement des talents canadiens, la culture et l'innovation.
2112 A moins que nous ayons raté l'analyse du plan des entreprises concernées, nous croyons que Montréal peut-être devrait avoir un peu plus d'attention dans le plan proposé, specially when Montreal is becoming in the global sense the heartland of cultural diversity, the centre for advanced education and media studies.
2113 We would like to take this opportunity to say that Montreal has the only interuniversity doctorate program in communication in Canada. It is also the only city that can be the heart of the Francophonie of the Commonwealth. Therefore, we believe that we need a little bit more for Montreal. We would like perhaps this matter to be examined a little bit more.
2114 En résumé, nous aimerions féliciter BCE-CTV d'avoir proposé aux Canadiens un plan d'action qui affirme de nouveau son engagement au développement socio-culturel, économique et technologique du Canada.
2115 Si ces questions que nous avons soulevées aujourd'hui puissent être examinées et prises en considération de manière beaucoup plus adéquate et peut-être beaucoup plus claire, au moins pour des groupes comme le nôtre, nous sommes confiants du fait que le nouveau réseau, le "new CTV", sera sans doute un leader national dans le domaine de la radiodiffusion, de la télévision et du développement culturel pour l'ensemble du pays.
2116 Je vous remercie, mesdames, monsieur le Conseiller, de cette opportunité pour que nous puissions apporter une voix essentielle et peut-être indispensable dans cette démarche qui serait extrêmement importante pour l'avenir de la culture canadienne. Je vous remercie beaucoup.
2117 LA PRÉSIDENTE DU CONSEIL: Merci infiniment, M. Niemi. Merci.
2118 I am sorry. Don't go away. I just didn't look on my left. Commissioner Wilson has questions for you. I apologize to both of you.
2119 COMMISSIONER WILSON: Good morning, Mr. Niemi. It's nice to see you again.
2120 MR. NIEMI: Good morning.
2121 COMMISSIONER WILSON: You thought you were going to get away without any questions, but I just have a few.
2122 You have raised, in my mind, two major points. You say there are three, but two major points. One is with respect to the approach to diversity and the other addresses the issue of the benefits to the Montreal area and Quebec.
2123 Would it be fair to characterize your position as you like the diversity and news initiative but a broadcaster isn't necessarily looking after the issue of diversity by writing the name "Diversity and News" on an envelope and putting $3.5 million in it. It is something that is a much broader concern that needs to be addressed.
2124 MR. NIEMI: Well, our position is, first of all we are very grateful and very happy that we were transmitted the information, because this is one of the very few times that a major broadcaster and major corporate citizen takes the time and the effort to reach out to a part of the community.
2125 One of the concerns we have is in the diversity in the news is the word "diversity" can mean a lot of things these days.
2126 It basically -- and as we mentioned earlier, we find numerous references to aboriginal peoples, to women, to youth and to young adults, but we have some problems putting our finger on what is it exactly that there is there for the racial minorities and the ethno-cultural communities, because cross-cultural relation is a concept, or cultural diversity, cultural communities can mean a lot of things to a lot of people depending where they are or where they come from in terms of the geography of the country.
2127 Secondly, when one looks at some of these initiatives one has to be very careful not to "ghettoize" the specific initiative within the entire package as a whole.
2128 For example, in the on-screen initiative, just because there is about $2 million it represents about 1 per cent of the $140 million allocated to on-screen initiatives, then that $2 million would go to cross-cultural development. It doesn't mean that cross-cultural development shall be restricted only to that $2 million budget.
2129 COMMISSIONER WILSON: That is the point I was trying to get at --
2130 MR. NIEMI: Exactly.
2131 COMMISSIONER WILSON: -- if it is the $3.5 million for diversity in news or the $2 million for cross-cultural doesn't mean it is taken care of.
2132 MR. NIEMI: No. We would prefer a more horizontal approach which is in line with the spirit of the multicultural legislation. It has to be broadly based, it has to be comprehensive, otherwise we risk "ghettoizing" these initiatives and what we end up with is we risk -- when I say "we", in terms of everyone involved in this process -- raising false expectations as to what concrete benefits there will be out there for the communities.
2133 COMMISSIONER WILSON: I spoke this morning with the Communications, Energy and Paperworkers Union about the issue of local programming and I asked them if they thought that that particular issue was more properly dealt with at the license renewal of CTV. Would you be of the same view, that it is a license renewal issue?
2134 MR. NIEMI: It is a matter of -- the issue is, I believe I heard this morning, a lot of incrementality or clarity of some of these initiatives. It is a matter of timing.
2135 What we have found in some other instances is usually with the licensing framework and the length of the licensing, the life of the licence of a broadcaster, often once you get to the license renewal time some of these funds may have already been earmarked or invested or at least a strategic plan has already been developed and implemented and it could be too late in order to change certain infrastructure or programs.
2136 So what we will suggest is, yes, license renewal is an ideal time to do it, but it is not the only time to gauge the progress.
--- Fire alarm / Sonnerie d'incendie
2137 MR. NIEMI: I may have said something wrong.
2138 COMMISSIONER WILSON: No.
--- Laughter / Rires
2139 COMMISSIONER WYLIE: We are not burning yet. Certainly not.
2140 M. NIEMI: Mon Dieu! Il nous reste encore beaucoup de choses à dire. L'important c'est de savoir c'est que peut-être il faut trouver un moyen pour pouvoir surveiller la chose.
2141 COMMISSIONER WILSON: Hold on.
2142 COMMISSIONER WILSON: We are just trying to find out --
2143 CHAIRPERSON OF THE COMMISSION: We will find out what is happening.
2144 MR. NIEMI: It is a burning issue and this room is very hot, if you notice, but we have cool heads so I'm sure we can get through this.
2145 COMMISSIONER WILSON: It seems to happen at least once every hearing.
2146 COMMISSIONER WYLIE: It must be somebody's cell phone.
2147 LA PRÉSIDENTE DU CONSEIL: Non, c'est l'Angélus qui est en retard de dix minutes.
2148 M. NIEMI: Où c'est le chef qui vous attend dans un restaurant.
--- Pause / Pause
2149 COMMISSIONER WILSON: I guess they will come and tell us if we need to --
--- Pause / Pause
2150 CHAIRPERSON OF THE COMMISSION: We will be back at quarter to 2:00.
--- Upon recessing at 1215 / Suspension à 1215
--- Upon resuming at 1400 / Reprise à 1400
2151 LA PRÉSIDENTE DU CONSEIL: Bon après-midi. Désolé d'avoir interrompu abruptement ce matin les échanges avec les intervenants. Sorry about the fire alarm. Peut-être que Madame la Secrétaire pourra nous dire ce qui s'est passé. We were curious.
2152 But before introducing the next intervenor, could you please let us know what are our plans for this afternoon so that we can inform everybody of what is coming today and what will wait until tomorrow.
2153 Mme POIRIER: Merci, Madame la Présidente.
2154 We will continue today with the remainder of the interventions for the BCE-CTV application, followed by the reply from the applicant. Then we will hear the application presented by 3649091 CANADA LTD. for the acquisition of assets for CJNT.
2155 There has been a slight change to the order of interventions as well.
2156 If you recall this morning, I called on the National Capital Alliance on Race Relations and they weren't in the room. They are in now so we will start with them, followed by No. 17, the Directors Guild of Canada. Then we will go back to the order of appearances in the agenda, No. 10.
2157 So if Sonia Brereton would like to come forward, please.
INTERVENTION / INTERVENTION
2158 MS BRERETON: My name is Sonia Brereton. I am the Executive Director of the National Capital Alliance on Race Relations.
2159 The National Capital Alliance on Race Relations is an organization that exists to fight racism and discrimination. It is to further equality on all issues. It is to deal with all the inequalities within the system, within society and to build positive relations between generations and communities and cultural groups.
2160 I am here today because I do watch a lot of Canadian television. I find television plays a key role in informing and entertaining us. In doing so, it is a very powerful medium that creates and reinforces attitudes and impressions of who we are as a society, who plays a positive role and who does not.
2161 Television news tells us what to think. How often have we heard the claim: But I saw it on TV? That is an awfully powerful statement that reinforces facts or turns fiction into fact. We all say this at some time, whether consciously or unconsciously, and we do it more readily on subjects that we are not familiar with.
2162 As an educator originally from Montreal, when I watch something on the news about a school in Notre-Dame-de-Grâce, I can critically analyze it and determine whether the news story is fair or not. But if I watch a news story on the fishing dispute in New Brunswick, I'm more apt to believe it as I see it on TV.
2163 The same goes for racial and religious minorities, the key clientele of our organization. Each community is best understood by members of that community. For example, if there is a story about Somali Canadians in the Ottawa area who may be on welfare, most people outside that community, other visible minorities included, have little ability to critically evaluate the story.
2164 This is an even greater cause of concern as news has become an entertainment commodity and thus may appear to have some prejudices that exist in our society and is used to sell it as a product -- news is now being used as a product or sold as a product.
2165 This is why I support the diversity and news initiative put forward in the benefits package of the Bell Canada Enterprises-CTV application. News editors need to understand the complexity of the story, reporters need to understand how to cover it critically and fairly, and camera technicians need to understand the power of the TV image.
2166 Are all Somali Canadians in Ottawa on welfare or some? For those who are not, what kinds of jobs do they have? What are the educational qualifications of taxi drivers and parking lot attendants from this community? What kinds of jobs did they have in Somalia? What are the education pursuits of young people in this community? Are there skill differences between men and women? Is the most appropriate video image of one person in this community outside a government office, driving a taxi or in a lab coat?
2167 We can go through a similar set of questions for any community or situation in cities and towns across the country. As immigrants and non-immigrants, each minority community and the rest of society work towards mutual adjustment. We all need to understand each other better. This goes for big cities as well as small rural communities.
2168 Our country is changing fast and we should have all the opportunity to better understand this change. TV news can help in this and, just as easily, it can hinder.
2169 Television is not only a very powerful medium but it can be a very shallow medium because it is based on constant variety. Viewers want a quick overview of all the day's major stories when they sit down to watch the evening news. While there are opportunities for detailed documentaries and some conventional specialty channels, the daily news is where most information is disbursed and attitudes are formed. It is mass media to the fullest.
2170 So the challenge is to make the news, in all its brevity, as comprehensive as possible. I hope that this fund of $3.5 million will be used wisely to address all aspects of news coverage, to train all personnel in the production of news, to increase minority participation in the news business and to improve the chances of fair coverage.
2171 I hope also that the opportunities that this initiative creates will be open for news personnel from other television broadcasters, and to ensure this BCE-TV must work with neutral third parties, helping them provide training all around.
2172 Given the news of last week, I cannot pass up the opportunity to encourage BCE to provide similar resources for its print medium, the Globe and Mail. The paper does not have a bad record for misrepresenting minorities. On occasion it has published some very thoughtful articles. Yet this record is partly because it does not cover minorities and the issues relevant to our multiracial society nearly enough.
2173 I would like to thank you for appearing on this matter, and I would be happy to take any questions.
2174 LA PRÉSIDENTE DU CONSEIL: Merci. Thank you very much.
2175 MS BRERETON: Thank you.
2176 CHAIRPERSON OF THE COMMISSION: Your position is quite clear. Thank you.
2177 MS POIRIER: The next intervenor is the Directors Guild of Canada represented by Pamela Brand, Alan Goluboff, and Peter Grant.
INTERVENTION / INTERVENTION
2178 MR. GOLUBOFF: Good morning, Madam Chair. My name is Alan Goluboff and I am President of the Directors Guild of Canada. With me today are Pamela Brand, the Guild's National Executive Director, and Peter Grant, a partner at the law firm of McCarthy Tétrault.
2179 The Guild is a national organization with over 3,000 members. We represent directors, as well as individuals involved in all areas of production, editing of films and design of film and television programs.
2180 We appreciate the opportunity to appear before you today. This hearing deals with a significant event in the history of the Canadian broadcasting system: a proposal by Canada's largest telecommunications enterprise to acquire our country's national English-language private television network, CTV.
2181 Given the pace of the merger and consolidation announcements in the past two months, many people are increasingly concerned about the fact there will be fewer players in the system, and less and less room for diversity of ownership and expression.
2182 We share these concerns, but we also recognize that there can be benefits in consolidation.
2183 So the real issue for us is to ensure that if players are to be allowed to become larger and more dominant, there must be safeguards in place to ensure that more resources are put into diverse Canadian production. The Guild has reviewed the BCE application in light of these concerns.
2184 In summary, we very much support this application and BCE's proposed benefits package, provided there are safeguards to ensure that it is truly incremental and that it contributes to the diversity of independent production. We think that this transaction, if approved, with appropriate safeguards, will have a tremendously positive impact on the Canadian broadcasting system.
2185 I want to begin by speaking to the issue of the proposed amount of the applicants' benefits package. The Guild fully supports BCE's proposal to spend $230 million on the initiatives that it set out in its application. We are of the view that this is a substantial commitment that will inject much needed resources to a number of areas relating to the creation and presentation of Canadian television programming.
2186 We have proposed that the $230 million benefits proposal be made a condition of your approval and that the conditions specify that the $230 million must be spent within seven years of a favourable CRTC decision. We note that the applicant has agreed to such a condition in response to a CRTC deficiency question.
2187 I want to turn now to the issues of Canadian dramatic programming. These types of programs are the life-blood of the Canadian broadcasting system. It is through this type of programming that Canadians truly have the opportunity to learn about themselves, past, present and future.
2188 The Guild supports the applicant's proposal to direct at least half of its $140 million Canadian programming expenditure benefit, that is $70 million to drama projects. Due to the important role that drama plays in our system, we suggest that this commitment be explicitly set out in CTV's licence as a condition. We note that the applicant indirectly agreed to this when it stated that it would accept a condition of licence requiring it to fulfil the proposed benefits that it set out in this application.
2189 Pamela Brand, our National Executive Director will now make some comments about the need for safeguards to ensure the incremental nature of both the proposed programming expenditures and the 175 hours of original Canadian programming being proposed.
2190 MS BRAND: Thank you, Alan.
2191 With regard to the portion of the benefits package that relates to expenditures on Canadian programming, the Guild is concerned about whether the proposed $140 million in Canadian programming expenditures will be incremental to spending that CTV would have incurred had this transaction not taken place.
2192 In the absence of safeguards, there would be nothing to stop CTV from simply reducing its regular Canadian programming expenses so that the new money would simply replace the old.
2193 The same issue came up in the Global acquisition of the WIC stations and the Commission adopted a benchmark test to ensure that the new money was in fact incremental.
2194 Yesterday, CTV put forward its own proposal for a benchmark, namely, to use the expected expenditures by CTV's conventional network and owned and operated stations on priority programming in the current year as the base amount. That amount, we are told, is $24.9 million.
2195 So under this approach, CTV would file annual reports to show that its conventional network and stations have expended at least $20 million a year more than the base amount of $24.9 million for the next seven years.
2196 We have carefully considered this proposal and the Guild finds it an acceptable way to ensure that the $140 million is incremental to CTV's existing spending in this area. So we applaud BCE for this proposal and urge the Commission to incorporate it in your decision.
2197 A second area of concern for the Guild relates to the applicant's proposal to create 175 hours of original Canadian priority programming. The applicant has stated that these hours of programming would be incremental to the eight hours per week currently required under the TV policy.
2198 We also note that CTV has said that they could identify the new programming with a special code so that the logs would distinguish between those programs and the eight hours a week otherwise required by your policy.
2199 We applaud CTV for this proposal and ask that it be reflected in your decision.
2200 Finally, I would like to turn to the issue of double-counting and recoupment. The Guild is concerned about the manner in which CTV will report its Canadian programming expenditures to the Commission, and whether it will be in a position to double-count or recoup a portion of these expenditures.
2201 We raise this concern, as a lack of safeguards in this respect could lead to a smaller amount of financial resources injected into the system.
2202 In response to our concern, BCE has stated in its written reply that CTV will redirect any and all profits derived from the distribution of this additional priority programming to foreign broadcasters or to Canada pay or specialty services back to the on-screen priority programming envelope of the proposed benefits package.
2203 BCE also states in its supplementary brief that it will set aside all returns on equity participation for other projects incremental to this package.
2204 We do appreciate these statements. However, we remain concerned with the fact that there is no definition of the word "profits". The term is one of the most ambiguous terms in the business.
2205 However, we also note that CTV is not wedded to its wording and has undertaken to work with the CRTC staff to come up with better wording.
2206 We applaud CTV for this commitment and to assist in the process, we would like to propose the following wording to address our concerns:
"Any and all consideration that is received by CTV or any related company from the sale or distribution of the 175 hours of new Canadian priority programming to entities other than CTV's conventional stations, net of reasonable sales expenses actually incurred in respect of the distribution of such programs to unaffiliated companies, shall be added to the $140 million fund and shall be used to fund additional Canadian priority programs on the same basis."
2207 That wording will make it clear that only reasonable sales expenses incurred to make sales to unrelated companies can be treated as a deduction from sales or distribution revenue.
2208 That will ensure that the rules are clear and that a maximum of new funding will be directed to the enrichment and enhancement of the Canadian broadcasting system.
2209 I will now turn the floor back to Alan Goluboff, who will address a final issue for the Guild, that of independent production. Thank you.
2210 MR. GOLUBOFF: Thank you, Pamela.
2211 In BCE's application as filed, there were no safeguards that would limit CTV from directing a significant portion of the $140 million earmarked for the creation of original Canadian priority programming to CTV's related production company.
2212 It is our view that the Canadian broadcasting system is richer and more diverse when a broader range of voices are available in the system.
2213 We were therefore pleased to hear from CTV yesterday that they are prepared to abide by a rule requiring at least 80 per cent of the $140 million Canadian programming benefits to be allocated to independent producers, that is, producers that are not affiliated with CTV.
2214 We think the 80 per cent rule is a fair compromise.
2215 For the record, it is the Guild's position that an independent producer consists of a production company in which the broadcaster showing its program does not have more than a 10 per cent interest in any class of shares.
2216 In closing, we would like to reiterate that the Guild supports BCE's application to acquire CTV. We are very encouraged and optimistic about the proposed benefits package and applaud the applicant for its efforts.
2217 We urge the Commission to accept this application, with the safeguards that we have proposed here today. If those safeguards are adopted, we are of the view that this application would translate into significant benefits for Canadian viewers, our creative communities, as well as our broadcasting system as a whole.
2218 Thank you, Madam Chair and members of the Commission. We would be pleased to respond to any question you might have.
2219 CHAIRPERSON OF THE COMMISSION: Thank you.
2220 I would ask Commissioner Wilson to address our questions, please.
2221 COMMISSIONER WILSON: Good afternoon. Nice to see you again.
2222 I had a little chuckle when I heard you say, in your fourth paragraph, about the pace of the merger on consolidation announcements in the past two months and I actually crossed out the word "months" and put the word "days" in there instead, because it seems to be happening faster and faster as we go along.
2223 I guess there are a couple of areas, really, that I want to cover with you. I have three or four questions.
2224 The $230 million, I don't know if you were here this morning, but you said that you are satisfied with that amount. Global suggested that, given the size and the nature of this transaction, the convergence of telecommunications and broadcasting, that they thought that it was a little thin. I am wondering if you have a view on that. They said they had offered 15 per cent when they did the WIC transaction.
2225 MR. GOLUBOFF: Yes, I mean I was here this morning. I did hear Global's comments on that. We are of the view that the $230 million is a fair and sizeable amount that will make a difference within our industry and it is the amount that is equal to the 10 per cent ruling that the Commission has already established based on the purchase and sale of CTV.
2226 So as far as we are concerned, we feel that it is a huge amount of money and it will make a difference provided that the safeguards that we have outlined end up in place.
2227 COMMISSIONER WILSON: Now, in terms of those safeguards, you said that you find CTV's proposal based on expenditures speaking to the issue of incrementality and how do we establish that? You said that their proposal whereby they would use the expected expenditures for the conventional network and owned and operated stations on priority programming as the base amount. That is the $24.9 million and then the incrementality would be the $20 million.
2228 The challenge with this particular way of doing it is that obviously they said they are going to do 8.5 hours a week, that is what it would translate into. They are not going to spend $20 million on a half an hour programming a week. So the $20 million must be somehow ending up increasing the quality over all of the programming -- all 8.5 hours a week.
2229 Would that be your understanding and if that is your understanding of -- I mean maybe it is a very simplistic way of looking at it, but if that is your understanding, how then do you actually measure the incrementality of the spending?
2230 MR. GOLUBOFF: Well, I will speak to a part of that question and then I am going to ask Peter Grant here to speak more directly to the figure.
2231 But we are certainly of the view that more money spent on priority programming is going to end up with higher quality programming and higher quality programming -- and I think I said this a few weeks ago when I was here speaking at the last set of hearings on the specialty channels and the Guild believes that more money in the system, more money spent on Canadian priority programming, we will end up with a higher quality of product, a higher quality of product will end up attracting a greater audience.
2232 I think that is what this is all about.
2233 COMMISSIONER WILSON: But someone said to me, "Well what about Survivor"? I mean, they spent a lot of money on that and how do you measure the quality of that?
2234 MR. GOLUBOFF: Well, I have certainly a personal opinion on Survivor --
2235 COMMISSIONER WILSON: Don't we all!
2236 MR. GOLUBOFF: -- as I suspect everybody else in the room does, and I would hate to think that we want to talk about the Canadian broadcasting system as it relates to Survivor. That is one program that had obviously huge success, but not everybody was watching it. Most people were, but not everybody was.
2237 COMMISSIONER WILSON: If they were watching it, they were certainly talking about it.
2238 MR. GOLUBOFF: Well, that is a different issue. I mean, I am hoping that certainly we don't go down that road and I think a lot of people hope that we don't go down the road of producing more Survivor's hour upon hour of Survivor as I don't know that we would survive that.
2239 But certainly the Guild is of the view that this is a substantial amount of money. Twenty million dollars per year above and beyond what CTV has already said that they are going to spend is a sizeable amount that will come into the system and it will give us a higher quality programming, and I think that it raises the bar and I think the other broadcasters and the producers across the country will have to elevate themselves to be able to produce programming of a level that people want to watch, which is what I think we all want.
2240 COMMISSIONER WILSON: Mr. Grant.
2241 MR. GRANT: I was just going to add that the amount of $140 million is to be spent on a 175 hours. Now, that is around $800,000 per hour. That is much higher as per hour amount than has been traditional in broadcasting where a typical licence fee for an hour is no more than $200,000, $225,000, for say a film or a major project in the drama area which is the most costly.
2242 I think the difference is accounted for because we now have a situation where what CTV is proposing is not just the licence fee. It is also substituting for the top-up fee that would otherwise come from CTF. It's putting an equity investment that might otherwise come from Telefilm and it is putting a distribution advance that would typically come from a distributor.
2243 So that is what takes it up, as I understand it, to the high number that we are looking at as an average. And that is just an average, of course. They have mentioned, I think in their supplementary brief, the instance of a Movie of the Week which would cost $3.5 million and they suggested that in that particular project their money could account for $2.5 million. Now, that is just two hours and $2.5 million is, of course, the accumulated amount of their licence fee, their equity investment, their distribution guarantee, and so forth.
2244 And that really is because it substitutes for all of the other funding and makes it so much easier. You could see that could easily account for the $140 million being focused just on 175 hours.
2245 COMMISSIONER WILSON: So you are not of the same view as Global then that a better way of doing this and a better way of measuring the incrementality would be to ask them to do 9 hours a week as opposed to measuring it on the basis of the $20 million over and above the base amount?
2246 MR. GRANT: Well, no. I think the position as expressed here for the Guild is that both benchmarks or both measures are required. The benchmark assures us that the money will be spent but then, in addition, if they are logging these 175 hours with some kind of special code and you just take that into account in your logs, then you can easily see you would not include those logged hours as being part of the eight hour requirement.
2247 It seems to me when you put those two together, you have got a package that assures that you are going to get the bang for your buck.
2248 COMMISSIONER WILSON: What about the administration of the money? Do you have any concern about the fact that it is being administered by CTV itself and that the benefit of those benefits are accruing to CTV?
2249 MR. GOLUBOFF: No. We don't have a problem with that. I mean -- as long as the programming is being produced, as long as the dollars are -- the majority of those dollars are ending up in the hands of the independent producer, which CTV is suggesting that they will do to the tune of 80 per cent, we are comfortable with that -- you know, that they will do what they say they are going to do and it will be administered equitably.
2250 COMMISSIONER WILSON: The final thing that I wanted to ask you about is with respect to your comments on independent production on page 6. You said that you were pleased to hear from CTV yesterday that they are prepared to abide by a rule requiring at least 80 per cent of the $140 million be allocated to independent producers. That is, producers that are not affiliated with CTV.
2251 I know there was an exchange between Madam Bertrand and a nodding head, Mr. Fecan's nodding head in the audience, when you attempted to clarify this. I believe that their definition is different than yours.
2252 I believe that the 80 per cent could go to a producer in which they had a 34 per cent or 30 per cent, they would accept that, or less interest, which would make them affiliated.
2253 MR. GOLUBOFF: Right. Certainly, our position as to the definition of the independent producers, as I have stated, and stated some weeks ago, is that we feel that 10 per cent ownership -- to a maximum 10 per cent ownership of a company will make that company an independent producer.
2254 COMMISSIONER WILSON: And your expectation is that 80 per cent would go to those companies?
2255 MR. GOLUBOFF: That's correct.
2256 COMMISSIONER WILSON: And they are saying 80 per cent would go to companies that are 34 per cent or less.
2257 MR. GOLUBOFF: I mean, the problem with the 10 per cent or the 30 per cent, or whatever that percentage of ownership is, is just a figure. So certainly, I mean, I think initially our position is I would love to see -- we would love to see -- an independent producer be 100 per cent independent of the broadcasters.
2258 So our compromise position is, because we had to pick a figure out of a hat, effectively, that 10 per cent is a figure that we feel that we are comfortable with.
2259 COMMISSIONER WILSON: And does it affect your support of the transaction if that figure turns out to be 34 per cent or 30 per cent?
2260 MR. GOLUBOFF: Well, no. I mean, we would probably not be as happy if it was 10 per cent, but certainly it is about, again I have to reiterate, the expenditure of dollars on production that I think is paramount to us.
2261 COMMISSIONER WILSON: Thanks very much. Those are my questions.
2262 CHAIRPERSON OF THE COMMISSION: Thank you very much, Madame, Messieurs. Thank you.
2263 MS POIRIER: The next intervention is presented by a panel of three groups, Sarrazin/Couture Productions, represented by Suzette Couture, Cochran Communications by Andrew Cochran, Barna-Alper Productions Inc. by Laszlo Barna.
2264 CHAIRPERSON OF THE COMMISSION: Maybe you count remind the intervenors of the rule of appearing together.
2265 MS POIRIER: Yes. We would like to remind you that you have a maximum of ten minutes to present your intervention.
INTERVENTION / INTERVENTION
2266 MR. COCHRAN: G ood afternoon, Madam Chair and fellow Commissioners. My name is Andrew Cochran of Halifax based Cochran Communications. With me today are two of Canada's most prolific and respected independent producers, Suzette Couture of Sarrazin/Couture Productions and Laszlo Barna of Barna-Alper Productions.
2267 Each of us filed written interventions separately in support of the BCE-CTV transaction and we are pleased to have this opportunity this afternoon to appear before you.
2268 I would ask you for a moment to picture with me the following scene, a three metre by three metre convention cubicle, plastered in a collection of the best of the moment posters, a smattering of temporarily stylish chairs on top of "expires in five days carpet".
2269 It is our unlikely home away from home, our selling space at MET-TV, as you know, one of the key marketplaces where the TV shows of the world are bought and sold. Like the rest of our industry, reaching out for international partnerships and sales are a key ingredient of our business. The next few days will have a direct impact.
2270 Across from me is a leading executive for one of the large German television networks, recently specializing in new media production. I'm pitching to gain his interest in our slate of convergence production. I know he is about to ask the question.
2271 Now, in the blossoming Internet world over the last six years, the question has always been "What's the revenue model?" Today the question that's show stopping, "Will this conversation really go any farther?". The question today is "Whose your domestic broadcaster? Who in Canada is behind these projects?"
2272 The subtext, of course, is twofold. Are we credible at home and, mostly, who in Canada has the commitment, the wherewithal and the platforms to help make these projects we are talking about happen? Of course, this particular day I am happy to tell him of our three planned productions of convergence.
2273 Two of our customers are already committed. They are Discovery Canada and CTV, both newly part of the company embarking on a concerted conversion strategy. He's intrigued, wants to know more. We sent a schedule for further contact. The purpose of the meeting has been achieved.
2274 It's a discussion repeated many times that week, helping us become a leading provider of convergence programming world-wide. We see a convergence production advancing quickly around the world. The U.S. in front, Europe close behind, Canada right now in a catch-up position.
2275 In this new global marketplace of convergence programming, Canadian producers can be competitive, but know-how begins at home. We need a strong domestic marketplace that fuels production, utilizing and challenging these multiple platforms, not as "Gee whiz demonstration projects", but as a place for ongoing, engaging storytelling, storytelling that connects with the audience.
2276 There are scores of issues to be solved. We heard about it this morning. Rights issues, technology issues, creative issues, all they need to be worked out and worked out they will be. But the lawyers and theorists can only take us so far.
2277 The emerging format of convergence production needs to be established by the practitioners of production. We want to see that happen in Canada to the benefit of Canadians.
2278 With the interactive components running through many of the plans that they have outlined and with the scale advanced in their benefits package, we believe BCE-CTV can become an important crucible for convergence programming with a distinctly Canadian voice, both for viewers in Canada and the world. We think it's time to get on with it.
2279 As well, as a company that depends on a healthy broadcaster supplier relationship, we are greatly encouraged by CTV's plans to move toward what we see as a true marketplace model and its licence fees and participation and production financing.
2280 The discrete funds, many of which I know are a consequence of work here at the Commission, have been and continue to be of great importance to our industry. They are appreciated. But now, we believe, is the time to take the next logical step and have the broadcasters pay more for the programs they want. If a broadcaster wants a program produced by an independent producer, why can't they just be able to buy it?
2281 MS COUTURE: I'm Suzette Couture. I wrote the script for "Jesus" the Emmy nominated --
2282 MS POIRIER: Please use your microphone.
2283 MS COUTURE: I should know that after all this time. Sorry.
2284 I'm Suzette Couture. I wrote the script for "Jesus", the Emmy nominated miniseries for the American network CBS that aired in May. Much of my work as a writer is American. That's often how it goes in Canada. You cut your teeth here and then you leave.
2285 Despite the success of Love and Hate, Conspiracy of Silence and Million Dollar Babies in Canada, it seemed to be clear to me that if I were to continue as a writer, I would have to follow the well born trail south, yet I am still here, and CTV is the reason.
2286 In the past few years, CTV has demonstrated a commitment to quality Canadian programming that has transformed Canadian television. Canadian viewers are tuning in to CTV and seeing dramatic series and movies for television that are identifiably and unabashedly Canadian.
2287 In the past two years, my company, Sarrazin/Couture Entertainment, has produced 33 hours of the dramatic prime time series The City for CTV as well as the movie The Sheldon Kennedy Story, which was recently given the Telephone Canada Award for best English language production of the year and it got great ratings too.
2288 LA PRÉSIDENTE DU CONSEIL: Est-ce que vous pouvez ralentir, parce que j'ai l'impression que les interprètes will have some problem following you.
2289 MS COUTURE: I timed myself for three minutes, Madam.
2290 CHAIRPERSON OF THE COMMISSION: I will give you the extra minute.
2291 MS COUTURE: When you say three minutes, I obey.
2292 CHAIRPERSON OF THE COMMISSION: I appreciate that. Thank you.
2293 MS COUTURE: Shall I start again? I apologize too. All right. I will slow down.
2294 For me and my partner, Pierre Sarrazin, there has never been a better time to be associated with CTV in Canada, but we believe that the BCE package of benefits will create an even better climate for writers and independent producers.
2295 With $5 million allocated for a new drama development initiative, CTV will be investing directly in Canadian writers, giving experienced writers free rein to tell their stories as well as developing a new generation of writers. This, as CTV understands, is the cornerstone of great programming.
2296 The benefits package will also allocate $45 million to produce movies for television. An added benefit for independent producers is that this fund means CTV can guarantee 70 per cent of the movie's budget. It's a very different scenario and I would like to give you an example.
2297 Our most recent CTV movie, Wild Geese, while it seemed to have everything going for it, it is based on a seminal Canadian novel by Martha Ostenso. It's required reading on many Canadian studies courses. It is being directed by Genie Award winning director, Jeremy Pedeswa. The cast features the best young actors in Canada, among them Leon Balaban, the star of New Waterford Girl. As well, it stars the brilliant American actor, Sam Shepherd. You can't get better than this, yet it almost didn't happen.
2298 Despite CTV's Green Light, Pierre Sarrazin and I, along with our Alberta co-producing partner, Doug McLeod, had to go from one fund to another, tap dancing our way through different and sometimes contradictory guidelines, lighting candles to St. Jude, the patron saint of lost causes, all the while fearing that even if we had most of the pieces, if only one fund dropped out, we would have to cancel the movie.
2299 Under the BCE initiative, CTV will provide one-stop shopping. I think you have heard that. If they like the project, they will fund it. It's a great story, a committed broadcaster and the money is there. It's a "go" picture. Somebody please yell "Action".
2300 In closing, let me say that Pierre Sarrazin and I are a privately owned company. We have three full time employees and an office, a lovely office whose windows overlook the stage door of the Princess of Wales Theatre in Toronto. We rent. We aren't funded by anyone, not by a network nor a vertically integrated company. We are going it alone, not that we want to. Frankly, we would need a larger company's investment if we are to survive and to grow.
2301 In the meantime, it's a risky business. If we are to succeed, if all the independents out there who care about what they do, what they say, a body of work that is meaningful, important, entertaining, for all those who have committed themselves to telling Canadian stories to Canadian audiences, the BCE benefits package goes far beyond merely waving a flag.
2302 It's smart, it's savvy, it's flush with cash that will go right on the screen. I believe it's a direct descendant, conceptually speaking, of CTV's belief that Canadian dramatic programs are world-class.
2303 MR. BARNA: I don't know if I should bring this up, but I had a strange experience. Last night I fell asleep with the television on. The last CRTC hearing I came to were the digital hearings. Over at the Chateau Laurier they forgot to wake me up and I got this panic call that I was late and I should run. So I went to sleep fearful that I wouldn't make it. I wake up and I hear Trina testifying on the television.
--- Laughter / Rires
2304 THE CHAIRPERSON: What we want to know is, who put you to sleep.
--- Laughter / Rires
2305 MR. BARNA: Yes.
--- Laughter / Rires
2306 MR. BARNA: In any case, I was here punctually for 8:30. I didn't want to miss a thing.
--- Laughter / Rires
2307 MR. BARNA: So there was time to reminisce and think back. One of the things, I was daydreaming, I think it was over somebody from Global talked about New Zealand and what a wonderful example, they didn't have to worry about signal. And then I remember -- I think it was Martha who said "Well, how are you going to change the signals".
2308 I remembered this old professor I had, Dallas Smythe at Simon Fraser University said "Gee, I have to ask Graham Spry how they did this thing, why they thought of it, before he dies." I had gone to Simon Fraser communications program.
2309 I will get to the point in a minute.
--- Laughter / Rires
2310 MR. BARNA: I think I woke up. I'm not sure, I might just be on tomorrow's broadcast in somebody's hotel room.
--- Laughter / Rires
2311 MR. BARNA: I went to communications at Simon Fraser thinking that it was a film school, and to my shock and amazement it was a school that looked at regulatory policy and really focused on Bell.
--- Laughter / Rires
2312 MR. BARNA: Twenty-five years later, here I am. But I know how to spell the initials now.
2313 But it is good when you are considering change to look back to how it used to be, to remember those old days.
2314 In 1975 through 1978 I remember being in film production in Vancouver and what a different world it was. If you made two calls in a day you were done for the year.
--- Laughter / Rires
2315 MR. BARNA: Which is not altogether a bad thing, because you could go back to sleep. You know, it was a --
--- Laughter / Rires
2316 MR. BARNA: Eventually we sort of attached ourselves, Barna-Alper attached itself to the National Film Board and you would do a film every other year.
2317 And then things started to change. The environment changed. You were very critical to the entire process of change because the CRTC embraced it. By embracing it -- and I mean the licensing of all those channels that people were --
2318 MS POIRIER: Excuse me.
2319 MR. BARNA: Yes?
2320 MS POIRIER: Over here.
2321 MR. BARNA: Who? Oh, hi.
--- Laughter / Rires
2322 MS POIRIER: I hate to tell you this, but could you speed it up.
--- Laughter / Rires
2323 MS POIRIER: Could you please conclude?
2324 MR. BARNA: Okay.
2325 The one thing that happens when I'm interrupted, I lose my place.
--- Laughter / Rires
2326 MR. BARNA: So I was in bed this morning --
--- Laughter / Rires
2327 MR. BARNA: Okay, never mind the introductions, let me cut to the --
--- Pause / Pause
2328 MR. BARNA: It's a good deal.
--- Laughter / Rires
2329 MR. BARNA: It's awful when -- I don't know if I can do this.
2330 It's awful when the broadcasters are not in great shape, sometimes when they are in worse shape than the independents. They need deep pockets, they need to be there to pick up the slack vis-à-vis the subsidy system that is unravelling. The BCE-CTV benefits package is great. It's complete. It promises to be a very thorough fund.
2331 One of the examples I was going to tell was that, you know, it relates to the one-stop shopping notion.
2332 How much time do I have?
2333 MS POIRIER: You are done.
2334 MR. BARNA: I'm done?
--- Laughter / Rires
2335 MR. BARNA: I'm toast.
2336 We like this deal.
2337 The only other thing I would -- the one last thing I want to say is that there were a number of people who have come up here who said it is a bad thing if the independent is owned by more than 3 per cent, 7 per cent, 20 per cent.
2338 I ask those people to look around. What are the smart companies doing? They are associating themselves with other companies to makes themselves stronger. It is absolutely detrimental the well-being of the independent community to be in a prejudicial situation and not have access to capital to grow, to develop, to submit programming and to be "ghettoized" simply because there are minority shareholders that participate in that company.
2339 With that, dah-dah-dah-dah, I'm done.
--- Laughter / Rires
2340 CHAIRPERSON OF THE COMMISSION: Well, there is definitely great talent in this country for storytelling.
--- Laughter / Rires
2341 CHAIRPERSON OF THE COMMISSION: Merci beaucoup à tous les trois.
2342 Thank you very much.
--- Pause / Pause
2343 MS POIRIER: The next group is formed of four representatives, the Carleton University, Christopher Dornan; Ryerson Polytechnic University, Vince Carlin; University of King's College, Stephen Kimber; and The University of British Columbia, Donna Logan.
--- Pause / Pause
2344 CHAIRPERSON OF THE COMMISSION: Alors, Madame, Messieurs, welcome.
2345 So the same rule applies. I will be saying go slow and Madame la Sécretaire will say speed it up, but you have 10 minutes.
2346 UNIDENTIFIED SPEAKER: And you have to be funny.
2347 UNIDENTIFIED SPEAKER: It's a hard act to follow.
INTERVENTION / INTERVENTION
2348 Mme LOGAN: Madame la Présidente, Mesdames et Monsieur les conseillers, seated before you are people who have university journalism schools from coast-to-coast.
2349 Starting in the west, I am Donna Logan, Director of the School of Journalism at the University of British Columbia; Vince Carlin, who is on my far right, runs the Journalism School at Ryerson Polytechnic University in Toronto; Chris Dornan, to his left, heads the School of Journalism and Communications at Carleton here in Ottawa; and Stephen Kimber, on my immediate right, is Director of the Journalism School at the University of King's College in Halifax.
2350 We come before you to address specifically the direct benefits to journalism contained in the overall benefits package presented as part of the application.
2351 Each of us will speak to a different aspect of those benefits. I will deal with the regional specialists, the journalists of the future. Stephen Kimber will talk about those benefits that address diversity. Chris Dornan will talk about the initiative for teenagers and young adults. Vince Carlin will deal with the proposal to open five new foreign bureaus.
2352 In the comprehensive package that has been placed before you, there is no benefit more bold and innovative than the one to create regional specialists in an area of health and safety and science and technology.
2353 As a former journalist and broadcast executive, I can honestly say to you that this is stuff journalists have only dreamed about. It is unheard of in this country for a media organization to provide formal journalistic training for people schooled in the field of science and technology and, conversely, to provide academic training for journalists who may wish to specialize in these areas.
2354 Further, for any reporter to be allowed, never mind encouraged, to attend conferences and gather background without having to file a report is truly trailblazing.
2355 The fields of health and safety, science and technology are increasingly important in this age of technology, yet very few journalists have an academic training the sciences. They have tended, by an overwhelming majority, to come from a humanities or a social science background. The result has been that reporting on the sciences has often fallen short in the eyes of the professionals in these fields.
2356 When the Graduate School of Journalism opened two years ago at UBC, some of the first people to turn up on my doorstep were professors in the Departments of Health, Science and Technology. They wanted to make a case for better science journalism and they were offering to help in any way they could.
2357 To make a long story short, we have since graduated four specialists in science and health issues, and all have found excellent jobs as journalists. These people will make a difference and so will the people who benefit from the CTV proposal before you.
2358 Yesterday, members of the panel were asked why they would place these trainees in local newsrooms across the country rather than at the network centre. The answer was that the majority of the issues that arise in these fields are local. That is a compelling argument.
2359 But let's not overlook the fact that this enhancement to local news will be the first in many years. The trend in the last several years for regional news has been steadily in the opposite direction. These regional specialists will file reports to the network as well as to local news, and in that way the entire broadcasting system will be better served.
2361 MR. KIMBER: Thank you.
2362 You have been hearing a lot about multimedia convergence, interactivity. Those are all important and exciting developments. But at the end of the day, television is still all about storytelling, about our ability as Canadians to tell our stories to each other. The problem has been and is that not all voices, not all stories, are heard equally.
2363 The media, multi or otherwise, still don't reflect the racial, cultural and ethnic diversity of this country. That is especially true when it comes to the voices of traditionally disadvantaged minorities, First Nations people and African Canadians, but it is also true for those who come to Canada from other places to live in the many ethnic communities that survive and thrive in our largest cities. Their stories too are absent from mainstream media.
2364 That is why I'm encouraged by BCE-CTV's public benefits package. The $3.5 million diversity initiative will, I hope, do two things: provide training for those not now represented in the media and educate current reporters about the issues facing those communities as well as the context in which those issues play themselves out.
2365 Coming from a region where tensions between natives and non-natives are particularly high right now, I am especially interested in BCE-CTV's plan to provide $3 million to help support the Aboriginal People's Television Network establish regional news bureaus across the country and another $250,000 for training native producers.
2366 CTV's support will not only help native journalists speak directly to their own communities, but it will also, I believe, help train a new generation of aboriginal journalists who may ultimately take their place in the mainstream media as well.
2367 I suppose one could argue that these sorts of initiatives should be part and parcel of the job of any communications company. They should. But those things aren't being done now. That is why I think that BCE-CTV's news and information programming benefits packages and especially those benefits that serve to encourage diversity deserve to be supported.
2368 Thank you.
2370 MR. DORNAN: Thank you.
2371 I am delighted to speak to the young people's initiative in the benefits package, the program 2-Way Hot, because I consider it not only an investment in programming but an investment in the future in more ways than one.
2372 As you know, the proposal calls for a weekly current affairs program to be produced by and for young people. The program will be accompanied by interactive Web moments. The program will have a budget of $11 million spent over seven years.
2373 I believe this initiative will pay dividends far beyond its obvious merit as programming. First of all, it is current affairs programming aimed at young people. Anything that further engages the interests of young Canadians and the world around them and the imperatives that drive it should be applauded. That is not to say that young people are somehow disengaged from the worlds of politics and commerce.
2374 It has become almost mandatory in the news industry to bemoan the fact that young readers and viewers demonstrate little interest in the traditional offerings of mainstream journalism. Why should they demonstrate such interest? For the most part, they are not yet taxpayers or homeowners or parents or career track employees. If young people are not much interested in traditional journalism, it is not because the are not interested in the larger world; it is that their interests have different emphases from those of middle-aged Canadians.
2375 2-Way Hot promises an opportunity to capture and address precisely those interests specific to the current generation.
2376 Secondly, the program is an investment in the future in that it will be staffed and produced by bright young Canadians launching their careers in the news media. A program like this will become a hothouse for the cultivation of journalistic talent. The competition to work on what amounts to a network showcase will be fierce. It is perfectly possible that a program like this will establish a pedigree, such that its staff will go onto positions of consequence and prominence in Canadian broadcasting.
2377 Finally, the venture is an investment in the future in the sense that it will be charged with the task of marrying on-air programming with associated interactive Web elements. Almost everyone is figuring out how to do this, so far with limited success, unless you enjoy playing along at home on the computer as you watch "Who Wants to Be a Millionaire?"
2378 At the same time, it is not at all clear how best to adapt the Web as a means of delivering current affairs journalism, because what the Web is especially good at is interactivity, whereas journalism is about a centralized source speaking to a dispersed audience with the degree of authority and reliability.
2379 The evolution and development of broadcasting in a new media environment is actually in the hands of the current generation of young people. They are the ones who are going to determine the shape of things to come. By creating this program and placing it in the hands of young people, CTV will have built a laboratory for experimentation that may well contribute to the shape of media content tomorrow.
2380 Thank you.
2381 MR. CARLIN: All around us, in North America, we see a not so gradual degrading of broadcast journalism. Owners are treating their networks and their newsrooms as merely servants of the marketplace instead of as components of a public service.
2382 In both Canada and the United States, we have seen a decline in foreign news reporting. The U.S. networks with their rich resources and their commercial values have virtually ceased covering foreign news that does not directly involve U.S. foreign policy interests.
2383 Historically, CTV has had fewer resources to use on international coverage than the other major Canadian network. In recent years, it appeared that the resources for both of those networks would be getting even thinner, and they have, but the initiative before you today I think is significant. An investment of that size, $12 million, to establish new outposts for Canadian eyes and ears is a very significant one.
2384 Canada is a trading nation. Canada is a peacekeeping nation. Canadians must make judgments on their place in the world, on the actions of their leaders, and they can only do this based on accurate information provided to them in a proper context. The current fashion of agency coverage provides pictures and sometimes stories on international happenings, but the pictures and the stories are homogenous, designed to serve at the same time the needs of networks in Britain, Canada, the Unites States, and various English-speaking parts of the world.
2385 They provide no context, no reference to the Canadian experience, and quite often represent the political and cultural bias of the dominant partners in the agency, usually American or British.
2386 For those of us interested in journalism, we can only applaud this significant commitment to international coverage, a commitment made against the tide of the North American broadcasting environment.
2387 I should add that for my own students this is indeed good news. So many of them have expressed the interest when they come in to become international foreign correspondents and it was sad for me, and I'm relatively new to the world of academia, to tell them that the opportunities were getting fewer and fewer, even from the organization for which I worked for so long, the CBC. To have the chance to tell them that there will be new opportunities for them to go out and to reflect on international issues as Canadians is truly heartening.
2388 Before I close, I should note with genuine thanks the positive impact that the regulatory regime has had on ensuring that this country is not treated only as a marketplace but also as a civil society. The privilege of a broadcast licence carries with it obligations to the public as citizens, not just as consumers. I think the BCE-CTV initiative, within the Commission's regulatory framework, will make a significant contribution to that feeling.
2389 Thank you for the opportunity of addressing you. If there are any questions, I'm sure my colleagues and I would be happy to answer them.
2390 I appreciate the opportunity to participate in the Laszlo Barna comedy workshop that was here today.
--- Laughter / Rires
2391 CHAIRPERSON OF THE COMMISSION: I think it is quite clear. Thank you very much. Good communicators.
2392 MS POIRIER: The next intervention is presented by the Canadian Film Centre, Wayne Clarkson; Institut national de l'image et du son, Louise Spickler; the Banff Centre for the Arts/Banff New Media Institute, Sara Diamond.
INTERVENTION / INTERVENTION
2393 M. CLARKSON: Madame la Présidente, mesdames et messieurs, on behalf of the Canadian Film Centre and our partners, l'Institut national de l'image et du son and the Banff New Media Institute, thank you for providing us with the opportunity to participate in this intervention.
2394 My name is Wayne Clarkson, and I am the Executive Director of the Canadian Film Centre.
2395 With me, on my extreme right are Anna Saranno, Director of Bell Habitat at the Canadian Film Centre, and Susan Kinard, Producer of the Banff New Media Institute.
2396 Regrettably, Louise Spickler, la Directrice de l'Institut national de l'image et du son is unable to attend because she has Board meeting this afternoon.
2397 Today, we would like to assert the importance of the BCE benefit package to our proposed BCE content innovation network, a national educational and digital production program that will link the Canadian Film Centre in Toronto with our partners in Banff and Montreal and will enable television, new media producers and artists to develop and commercialize original Canadian content for digital broadcast delivery.
2398 As you may know, the Canadian Film Centre is Canada's pre-eminent national training institution in film, television and new media. Founded by Norma Jewison 12 years ago, the centre is committed to training the finest Canadian talent with production as a major component or our training initiative, that is to say to learn by doing, by making films, short films and feature films, developing television scripts or new media prototypes.
2399 Over 100 short films, eight feature films and 16 digital media prototypes and hundreds of scripts for film and television have been produced by the centre.
2400 Though younger than the Canadian Film Centre, Linis, in Montreal, is similarly positioned as one of Québec's major centres for film, television and more recently, new media, and is equally successful in serving the training needs of Québec's entertainment industry.
2401 New media industries working in both official languages, the Banff New Media Institute has made a name for itself in the television and new media industries through their highly successful workshop series and incubator environment where alliances between researchers, artists, producers and technologists from all over the world are forged, and for their productions and co-productions in television, video, new and interactive media.
2402 The proposed BCE content innovation network originated from the Canadian Film Centre's Bell Habitat. Involved in 1997, the Centre formed a partnership with Bell Canada, and through this partnership, we have graduated over 50 alumni and produced 16 new media prototypes. Seventy per cent of these alumni are in top management positions across the country and are actively involved in the creation of digital television and new media start-up companies.
2403 Half of the prototypes we have produced are currently in commercial development. With achievements such as these, combined with the international co-production accomplishments of the Banff New Media Institute and the emerging talent from Linis, we collectively recognized that only through increased collaboration and partnerships between our organizations could we provide the necessary resources and opportunities to meet the obvious appetite of Canadian talent from coast to coast to develop and produce Canadian television and new media content. The idea for the BCE content innovation network was born.
2404 The need to develop original interactive content that will take advantage of opportunities afforded by our increasingly converging world is imperative. Convergence has become a necessity if Canada wants to compete in this network global economy with the likes of AOL Time Warner and Vivendi Universal.
2405 But mega mergers alone will not guarantee Canada's position as a competitive nation. Innovative content development is the battlefield upon which the new economies will be won or lost.
2406 The BCE content innovation network is an education and production infrastructure that will greatly enhance the learning opportunities for Canadian talent working in both French and English through an advanced level of prototyping for television and new media projects. To the Centre's expertise in production and story telling and Banff's international reputation and network of television and new media artists, the BCE content innovation network will strengthen and increase the creative talents, business skills and market opportunities of Canadian content developers, artists and producers and will allow them to bring their products to audiences nationally and around the world.
2407 The BCE content innovation network is also about creating innovative companies that will have the required business skills, resources, talent and ideas to compete in the digital content market place. Whether content is creative or interactive television, Internet TV or some additional digital delivery channel, we need to ensure that Canada is well positioned as a nation that creates intellectual property as opposed to simply servicing those countries who had the foresight and resources to create their own content.
2408 The BCE content innovation network will bring together the combined resources of the three leading institutions through a sophisticated infrastructure that includes high speed video-conferencing, collaborative software and technology enabled shared work processes.
2409 Through long-term incubation residencies, combined with short-term public workshops, Internet enabled think tanks and knowledge sharing, we will engage both start-ups and small to medium enterprises in the creation of interactive content as well as engaging the Canadian public in the central issues surrounding convergent media.
2410 Thank you, and if you have any questions for myself or Susan or Ann, we would be glad to answer them.
2411 CHAIRPERSON OF THE COMMISSION: No, we don't have any questions. Thank you very much for participating.
2412 MS POIRIER: The last group is presented by the School of Journalism, University of British Columbia, Donna Logan; York University, Fred Fletcher, and Laval University, Daniel Giroux.
INTERVENTION / INTERVENTION
2413 CHAIRPERSON OF THE COMMISSION: Bonjour.
2414 Mme LOGAN: Madame la Présidente, we are pleased to be here on behalf of the Canadian Media Research Consortium.
2415 As you know, my name is Donna Logan and I am Director and a Professor at the Graduate School of Journalism at the University of British Columbia.
2416 My colleague, Professor Fred Fletcher on my right is Director of the York-Ryerson Graduate Program in Communications and Culture.
2417 And Daniel Giroux, on my left, secrétaire général du Centre d'étude sur les médias, is representing Florian Sauvageau who cannot be with us.
2418 Commissioners, we are very grateful for the CRTC's benefits policy. Without it, we doubt very much that we would have been able to realize the dream of funding independent media research that is truly Canadian. The need for such research is abundantly clear.
2419 Our Consortium, should you approve the benefits to fund it, would put Canada on the global map in this leading edge field and it would reduce our dependence on foreign -- mostly U.S. -- research for decisions that affect the way we plan and use our own media environment.
2420 This initiative is most timely and original. We have come together as a Consortium from across Canada with committee members from Halifax, Québec City, Ottawa, Toronto and Vancouver.
2421 The Consortium will be an integrated pan-Canadian approach to research, scholarly training and dissemination. Our work will promote open public discussion, improve the quality of media and journalism, provide current topical and useful information to media industry players, policy makers and the Canadian public.
2422 The Consortium would respond to a strong need for concerted media research in this country. The technological possibilities of media are evolving extremely rapidly, as you have heard. We need Canadian experts and specialists to track and analyze these changes and to study their meaning for Canadians in every sphere of activity, commerce, industry, society and culture.
2423 BCE's leadership role in establishing a research consortium is truly making a difference. We would not be able to fund this research over seven years without this benefit. There are successful examples of this kind of initiative in the United States, where there is a long tradition of research foundations, endowed centres of media scholarship and academic networks working on collaborative projects. This of the great work done by the Poynter Institute, the Freedom Forum and Harvard's Joan Shorenstein Centre.
2424 Here in Canada, while there has been increased activity in media research in recent years, there is still no major national centres of well developed networks undertaking collaborative research in the area of media and communications.
2425 Many of the academic programs in this field are relatively new. In addition, what media research there is in Canada tends not be not multidisciplinary enough.
2426 We propose to focus on important economic, social and cultural issues related to technological change in media, with particular attention to informational and cultural needs of Canadians. Our work will be useful and relevant, and we will make sure that is true by disseminating it widely.
2427 We will stimulate public debate through the Internet -- via a dedicated Web site and an electronic journal -- as well as through more conventional means such as lectures, television specials and conferences.
2428 We would pay particular attention to issues that matter to citizens in their role as consumers of media. The journal will combine the values of a peer-reviewed, independent scholarly journal with those of a professional publication that speaks to media professionals, community groups and the general public.
2429 The Consortium's principal activities can be separated into two specific areas. One, research and scholarship; two, dissemination and public events. We will adopt an integrated approach towards research, training and dissemination. A considerable share of the funding will be devoted to graduate fellowships and research training.
2430 My colleague, Fred Fletcher, will tell you about some of the kinds of projects we might undertake.
2431 MR. FLETCHER: Thank you. T he proposed Canadian Media Research Consortium would undertake and disseminate leading-edge, socially relevant research in areas such as the following: The impact of technological change on the media industries and public policies; the implications of structural changes in the media industries for values such as pluralism, diversity and access; new opportunities for democratic discourse created by new media; the impact of new communications technologies on content creation, including news and information, particularly broadcast news which remains the most important and trusted source of news for most Canadians; audience responses to new technologies and content formats; and the applicability of new theories of public and community journalism to Canada, especially in broadcast news through local and specialty services.
2432 Our mission statement includes some broad general categories of work. Providing funds for collaborative research, involving specialists and multidisciplinary teams at the partner universities, and other universities as appropriate, as well as media and professionals and outside professionals; encouraging the development of research groups that would include faculty and related programs across the country in cases where they would bring regional insights and other skills to the work; funding and training graduate students in media research to help develop a network of young media scholars in Canada and developing new mechanisms for disseminating media research to the media industry policy makers and the public, that is through a dedicated Web site and electronic journal, annual lectures and thematic conferences, as Dawn has already mentioned.
2433 The Consortium's research would provide a national focus on current and projected media structures and practices and their social, economic and cultural impact on Canadians.
2434 The Canadian Media Research Consortium will be governed by a Board composed of representatives of the partner institutions and other academic institutions, industry figures and members from the community. This structure will foster independent academic research that responds to issues in the industry and the community with respect to the role of the media in Canadian society.
2435 We hope and expect that the research will influence what appears on the screen in the coming decades and beyond.
2436 Now, Daniel Giroux will speak about the partner institutions.
2437 M. GIROUX: Merci, Fred.
2438 Le Consortium canadien de recherches sur les médias permettra de réunir des partenaires de régions et de langues différentes, des partenaires qui sont des institutions d'excellence dans le domaine de la recherche sur les médias.
2439 Le Consortium permettra aux plus connus et aux plus renommés chercheurs et professionnels engagés activement dans la recherche sur les médias au Canada de travailler ensemble.
2440 Quatre institutions sont devenues partenaires du Consortium: Le Centre d'études sur les médias, auquel j'appartiens et que dirige le professeur Florian Sauvageau à l'Université Laval de Québec, et qui est déjà un lieu de recherches de rayonnement international dans le domaine des médias. Le Centre d'études travaille en étroite collaboration avec l'École des Hautes Études Commerciales de MOntréal et il a développé également au fil dans ans des liens avec des chercheurs d'autres universités québécoises ainsi qu'avec l'industrie des médias.
2441 Le programme conjoint York-Ryerson d'études graduées en communication et en culture dont les activités viennent tout juste de débuter. Il s'agit de la seule école offrant des diplômes de maîtrise et de doctorat du genre au Canada. Elle est dédiée à la fois aux études sur les médias et à la recherche dans le domaine du multimédia. A titre de coordonnateur du programme, le professeur Fletcher coordonne le travail d'une vingtaine d'enseignants de York et de Ryerson qui ont d'éloquentes feuilles de route, tant dans la recherche que dans le milieu professionnel.
2442 L'École de Journalisme de l'Université de Colombie-Britannique que dirige Donna Logan et qui offre une maîtrise professionnelle d'une durée de deux ans, tout en étant active dans le domaine de la recherche sur les médias.
2443 Enfin, le quatrième partenaire, le Canadian Journalism Foundation, qui fait la promotion de la recherche et organise des débats publics sur des questions relatives aux médias et qui, dans le Consortium, aura la responsabilité de diffuser les résultats de nos recherches et d'organiser les divers éléments publics que nous voudrons tenir.
2444 La Fondation gérera étalement le site Web du Consortium qui permettra de faire connaître les résultats de nos travaux ainsi que les sondages et les résultats de groupes de discussion que mène la Fondation pour mieux connaître les attentes du public.
2445 En langue française, petite exception, c'est le Centre d'études sur les médias en collaboration avec la Fondation qui aura la responsabilité de la diffusion des travaux en langue française.
2446 Donna, à nouveau, pour le mot de la fin.
2447 MS LOGAN: BCE's support for the establishment of a Canadian Media Research Consortium will help promote innovative and socially relevant research into a rapidly changing media environment, from a number of disciplinary perspectives.f
2448 This benefits package provides a timely opportunity to promote more concerted research activity and media feedback which is so important for Canada in the context of conversion and globalization.
2449 Madame la Présidente, Commissioners, we believe you, with your important role in defining the rules under which this system operates, will be the first to benefit from the results of our work.
2450 We hope you agree that this is a most important and fitting initiative.
2451 Thank you and we would be happy to answer any questions.
2452 CHAIRPERSON OF THE COMMISSION: Thank you very much. Merci beaucoup.
2453 Mme POIRIER: Je demanderais maintenant à M. Roger Tassé de venir présenter son intervention.
INTERVENTION / INTERVENTION
2454 M. TASSÉ: Mesdames et Messieurs les Commissaires.
2455 Je vous remercie de l'occasion que vous me donnez d'expliquer les raisons de mon appui à cette transaction très importante.
2456 Mon nom donc est Roger Tassé. Je suis avocat. Je pratique à Ottawa, de l'autre côté de la rivière.
2457 Les réflexions que je veux partager avec vous me sont inspirées par l'expérience accumulée au cours des 20 dernières années de ma vie professionnelle auxquelles j'ai eu à me confronter et à participer à la résolution de plusieurs questions d'intérêt public.
2458 Ma perspective, ou la perspective que je vais partager avec vous, est différente mais je crois qu'elle est complémentaire de celle que vous avez entendue de mes prédécesseurs qui ont comparu jusqu'à maintenant avec vous -- ou devant vous.
2459 Le thème principal de mon témoignage c'est l'importance de cette transaction pour l'ensemble des Canadiens dans le contexte des grands changements, des bouleversements, pourrais-je dire, qui sont actuellement en cours dans le monde des communications au Canada et ailleurs, spécialement aux États-Unis.
2460 Mais auparavant permettez-moi de vous dire un mot des raisons qui m'amènent à me présenter devant vous aujourd'hui.
2461 Dès l'annonce de cette transaction, je me suis posé la question traditionnelle: l'acquisition de CTV par BCE est-elle dans l'intérêt public? Est-ce que cette transaction bénéficiera au système de la radiodiffusion canadien? Est-ce qu'il ne faut pas craindre qu'il en résultera une trop grande concentration de pouvoir au détriment des Canadiens --questions qui sont, évidemment, au coeur de vos propres délibérations.
2462 En tant que sous-ministre de la Justice, et plus tard après avoir quitté la Fonction publique, j'ai participé comme conseiller principal du gouvernement canadien à partir de 1979 jusqu'en 1992, à toutes les grandes entreprises de renouvellement de notre constitution.
2463 J'ai alors été amené à mieux comprendre notre pays dans toute sa diversité, dans sa complexité ainsi que ses aspirations. J'ai aussi été amené à mieux saisir les nombreux défis auxquels il est confronté dans notre monde en constants et profonds changements, changements et défis qui au cours des dix dernières années n'ont cessé de s'amplifier avec la mondialisation des échanges et l'explosion des technologies de l'information.
2464 Les Canadiens ont un sens profond d'appartenance à leur pays, et en même temps ils chérissent leurs différences, les valeurs et l'histoire qui distinguent chacune des régions qu'ils composent, et malgré l'admiration et l'attraction qu'ils éprouvent pour leur puissant voisin du sud, ils ne sont guère prêts à se fondre culturellement, ou autrement, dans le grand tout américain. Ils tiennent à leurs différences.
2465 L'histoire de notre radio et de notre télévision depuis leurs tous premiers moments en témoigne éloquemment. Les Canadiens ont toujours tenu à maintenir une personnalité distincte qui leur est propre sans jamais, jamais fermer totalement la porte à ce qui venait de l'étranger, une réalité que reconnaît la politique canadienne de radiodiffusion.
2466 Dans le secteur privé, après avoir quitté le gouvernement, j'ai été vice-président exécutif, affaires juridiques et environnementales à Bell Canada pendant trois ans. C'était le moment des grands débats qui ont éventuellement mené à la concurrence du marché de l'interurbain dans les télécommunications, ouverture qui a été le début d'une transformation radicale du domaine des communications au Canada.
2467 La réglementation laisse de plus en plus la place à la concurrence depuis près d'une décennie, comme modèle économique capable d'assurer un plus grand éventail de choix aux consommateurs, et des prix plus concurrentiels, et en même temps d'encourager l'innovation et la recherche et le développement. Cela est vrai non seulement des télécommunications mais aussi de la radiodiffusion.
2468 Mon passage à Bell a avivé mon intérêt personnel et professionnel d'abord pour les télécommunications puis la radiodiffusion, la convergence des technologies de communications, éventuellement l'Internet et le commerce électronique. J'ai coprésidé un groupe de travail fédéral sur le financement des périodiques canadiens et j'ai été membre du groupe de travail -- certains d'entre vous s'en rappelleront -- sur la diffusion directe à domicile par satellite, deux domaines où les progrès technologiques et la mondialisation des échanges mettaient en cause nos manières traditionnelles de faire. Pour tout dire deux domaines où se manifestait la précarité des instruments réglementaires traditionnels pour la mise en oeuvre des politiques culturelles canadiennes.
2469 Il y a deux grandes tendances de front à mon sens qui marquent les changements en cours présentement dans le monde, l'une provoquée par l'explosion des technologies de l'information et des communications, la mondialisation des échanges, et l'amenuisement de plus en plus considérable des frontières entre les pays qui en découle.
2470 L'autre tendance, on dirait en contrepoids contre l'uniformisation portée par la première, cherche à renforcer les identités aux plans social, politique et culturel.
2471 Au plan plus particulièrement de la radiodiffusion comment, tout en nous ouvrant à la mondialisation des échanges et aux nouvelles technologies, pouvons-nous assurer la survie et le renforcement de notre personnalité et de notre identité nationale particulière? C'est face à ces tendances que je me suis posé la question: Cette acquisition est-elle dans l'intérêt public, est-elle susceptible de bénéficier aux Canadiens et voici pourquoi, selon moi, la réponse va être oui.
2472 Pour tout dire ce qui me plaît dans la proposition de BCE et CTV c'est qu'elle vise à solidifier les acquis et qu'elle prépare l'avenir. La proposition de BCE vise d'abord à renforcer CTV qui est déjà une entreprise de télévision canadienne de premier plan.
2473 L'entrée en scène de BCE, une entreprise imposante par ses ressources financières et son savoir-faire, constitue une garantie que CTV continuera de jouir d'une solide stabilité financière et continuera de contribuer au cours des prochaines années de façon encore plus importante que maintenant à la culture et au contenu canadien par le bouquet important des bénéfices qu'apporte la participation de BCE.
2474 Pour cette raison seule, je ne puis qu'applaudir le projet de BCE.
2475 Particulièrement intéressantes, en mon sens, sont les initiatives de développement inter-culturel inspirées par le succès de l'émission racontant la vie du Dr. Lucille, l'enrichissement des fonds dédiés à la production de commentaires, la formation de journalistes de l'avenir dans les domaines de la santé, de la sécurité, en science et en technologie. Il y en a une multitude d'autres aussi intéressantes auxquelles ont a fait allusion cet après-midi.
2476 But there is more to BCE's proposal than just improving the quality of CTV programming and Canadian content in the immediate future. No one knows for sure how traditional TV will fare in the future with the advent of the Internet.
2477 We are all aware of the vital role that broadcasting and television have played in building our national consciousness and social cohesion.
2478 Government policy and CRTC decisions have been, over the years, major contributors to the development of strong Canadian broadcasting and television sectors that are second to none and that have helped shape the character of our country.
2479 Personally, I believe that traditional TV is likely to be around with us for many years yet. But no one really knows, and for that reason, we must continue to nurture what we have and we must start building the future.
2480 We should expect that as we head into a digital environment, the efficiency of the regulatory instruments that we have traditionally relied upon to support our broadcast and television sectors will be reduced, and indeed, sometime in the future, we may find that they have become obsolete.
2481 The challenge, then, will be to ensure that in the world of the new media and Internet, we will have a strong presence so that Canadians can continue to see themselves reflected in the services they can access on the Net, they can continue to see and hear their stories and see the world, not exclusively through the eyes of others, but also through their own eyes.
2482 This challenge, we will meet if we can increase the attractiveness of Canadian programming to Canadian audiences in an era of increasing choice in competition largely without the assistance of regulatory instruments. This will require the contribution of substantial financial resources that generally, only large companies can afford. The market place will not be Canada alone in this new area. It will be the whole world.
2483 In the new world, borders do not exist any more. Canadian firms will compete in their own market more and more with the rest of the world for the attention of Canadians and we will need, in Canada, firms strong, large, rich enough to compete with the richest, the largest in the whole world.
2484 Canada needs firms like BCE and CTV with substantial means and vision which are prepared to take up the challenge of the transition to the new world. BCE and CTV, while large overall by Canadian standards, will be small compared to the conglomerates that are being created in the U.S. and in Europe with which they will more and more have to compete with.
2485 For me, the benefit package attached to this transaction is attractive not only because it is designed to improve CTV programming and Canadian content now, but also because it looks to the future with a strategic vision that would help to build the transition to the new world.
2486 Mme POIRIER: Monsieur Tassé, est-ce que vous pouvez conclure, s'il vous plaît? Vous dépassez les 10 minutes. Merci.
2487 M. TASSE: Oui, je conclus en disant que if BCE and CTV can overcome all the challenges on the way toward this new world of convergence and integration of content, they will have made an enormous contribution to the viability and vitality of the Canadian presence and content on the Net to the benefit of all Canadians, including particularly Canadian artists, creators, writers and all others who participate in it. Thank you.
2488 LA PRÉSIDENTE DU CONSEIL: Merci, M. Tassé.
2489 Puis-je me permettre une question, s'il vous plaît, compte tenu votre vaste expérience?
2490 M. TASSE: Certainement, je vous en prie.
2491 LA PRÉSIDENTE DU CONSEIL: J'avoue que je suis curieuse d'une question. Vous regardez les choses en disant, compte tenu, au plan mondial ce qui arrive dans l'univers des communications, cette transaction s'inscrit dans cette foulée et c'est intéressant de ce point de vue-là. Vous allez plus loin en disant, misons sur le passé et construisons l'avenir.
2492 Est-ce qu'il y a possibilité, compte tenu votre expérience et ce que vous avez pu voir de plus près, d'un peu ralentir ou même arrêter cette vague-là par rapport à des choix que nous avons à faire ici, au Canada? Est-ce que c'est envisageable? Est-ce qu'on doit simplement se rendre compte à l'évidence que c'est une vague qui ne peut être arrêtée ou si c'est un choix que nous avons à faire comme pays?
2493 M. TASSE: Je crois que nos choix à cet égard-là sont très limités. En fait, je pense que ça serait difficile, étant donné la nature des nouvelles technologies, étant donné la nature des phénomènes qui sont en cours actuellement à travers le globe, ça serait très difficile pour quelque pays que ce soit, sauf un pays qui est prêt à vivre avec des barrières, avec des murs, avec des murailles, comme certains actuellement le font vis-à-vis l'Internet. Ce n'est pas le choix, je pense, que les Canadiens vont adopter.
2494 Je pense qu'il faut trouver le moyen de nous situer vis-à-vis ces grands changements-là. Je pense que cette transaction, justement, en mettant l'accent sur le contenu, en mettant l'accent sur une présence positive et en ne comptant pas d'abord -- j'ai peut-être un peu exagéré dans le sens de la compétition. Je n'ai pas noté dans ma présentation les difficultés qu'il peut y avoir d'autres. Et peut-être que vous-mêmes, vous allez régler les détails en ce qui concerne justement le nouveau paradigme qui est en train de se manifester.
2495 Je pense que les entrepreneurs qui vont faire le contenu, qui vont créer le contenu, ce sont les alliances dont nous avons parlées et d'autres ont parlées cet après-midi. C'est la formation de nouveaux techniciens, de gens qui sont capables de produire, des créateurs qui vont être autant à la télévision conventionnelle qu'avec les nouveaux médias.
2496 Il faut essayer de voir pour l'ensemble des Canadiens, avec l'aide du secteur privé dans toutes ses manifestations, comment on peut, justement, trouver notre place. On n'a pas à avoir peur. Je pense qu'on a des créateurs de première qualité, autant au Canada français qu'au Canada anglais. Nos émissions sont de très grande valeur et peuvent attirer l'attention certainement des Canadiens et je dirais même éventuellement -- et déjà ça se fait -- des étrangers.
2497 Alors c'est là-dessus qu'il faut miser et se rendre compte que les mesures réglementaires, les instruments réglementaires, à cause de la nature des nouvelles technologies, vont être très difficiles à utiliser.
2498 Je n'exclus pas pour autant le rôle des gouvernements. Les gouvernements ont encore d'autres rôles. Mais ce n'est peut-être pas par la voie du CRTC que les gouvernements vont pouvoir exercer ce rôle de façon à faciliter l'éclosion davantage de talents et davantage de produits de qualité.
2499 LA PRÉSIDENTE DU CONSEIL: Merci beaucoup. Donc, vous dites que la vague est inévitable et il faut la transformer en une opportunité.
2500 M. TASSE: Oui, ce n'est pas nous qui la créons. On y participe beaucoup. Certains de nos créateurs, de nos techniciens, de nos inventeurs y participent.
2501 Mais je me demande s'il y a, en fait, dans le monde, quelque part, une puissance, un état qui pourrait freiner cette... Je pense que ceux qui vont pouvoir, dans l'avenir, dénicher leur place et profiter de façon positive des changements qui se produisent dans le monde, ce seront ceux qui auront déniché l'endroit, la place où ils peuvent apporter une contribution.
2502 Et je pense qu'une acquisition comme celle qui est devant vous présentement justement permet de commencer à élaborer de nouvelles expertises, de nouveaux talents pour au cas où ça pourrait se produire.
2503 Ce n'est pas certain que tout ce qu'on nous promet aujourd'hui va devoir se produire au point de l'Internet qui remplacerait, selon certains, la télévision ou qui deviendrait interactive, qu'il y aurait l'Internet -- convergence avec l'ordinateur et l'appareil de télévision. Peut-être qu'on verra cela dans quelques années, mais ce n'est pas certain que ça se produira de la façon dont nous pensons aujourd'hui que ça se produira. Il y aura probablement quelques surprises en cours de route.
2504 Mais il faut quand même commencer à penser à nous situer et à pouvoir tirer notre épingle du jeu, parce qu'on ne pourra pas arrêter cette vague. Il faut essayer de nous y impliquer et d'y tirer le meilleur bénéfice possible pour l'ensemble des Canadiens.
2505 LA PRÉSIDENTE DU CONSEIL: Et qui sait? Il y aura peut-être un rôle pour le CRTC dans cet univers.
--- Laughter / Rires
2506 M. TASSE: Oui, c'est fort possible.
2507 LA PRÉSIDENTE DU CONSEIL: Différent, peut-être.
2508 M. TASSE: Vous avez encore un rôle certainement pour quelques années encore.
2509 LA PRÉSIDENTE DU CONSEIL: Bien en tout cas, pour quelques semaines.
2510 Merci, M. Tassé.
2511 M. TASSE: Merci.
2512 LA PRÉSIDENTE DU CONSEIL: Nous allons prendre une pause. Nous reviendrons dans 15 minutes.
--- Upon recessing at 1535 / Suspension à 1535
--- Upon resuming at 1553 / Reprise à 1553
2513 MS POIRIER: The next intervenor is the Writer's Guild of Canada, represented by Maureen Parker, Jim McKee, Jack Blum and Andrew Wreggitt.
2514 CHAIRPERSON OF THE COMMISSION: You can go now.
INTERVENTION / INTERVENTION
2515 MS PARKER: Good afternoon, Madam Chair and the Commission. My name is Maureen Parker. I am the Executive Director of the Writer's Guild. With me today are two screenwriters, Jack Blum of Toronto and Andrew Wreggitt of Calgary, as well as Jim McKee, our Director of Policy and Communications.
2516 The Writer's Guild of Canada is the national association, representing more than 1,500 professional English language screenwriters. We are here today to speak in support of the proposed acquisition of CTV by BCE because we consider BCE to be making major commitments towards new Canadian programming, most notably in drama and documentaries. All told, they are committing to create at least 175 new hours of original programming. We believe this to be a unique commitment by one private commercial broadcaster.
2517 We also think the benefits approach set out in this proposal is preferable to the creation of another fund because rather than simply committing money to the system, they are according Canadian stories a more prominent place in CTV's schedule.
2518 CTV has already made an important commitment, developing truly Canadian stories, including drama series such as Cold Squad, Power Play and The City, and new series such as The Associates. It has also expanded its slate of movies and miniseries such as Milgaard and the Sheldon Kennedy story, written by our friend Suzette Couture.
2519 When the CTV team talks about their desire to bring more Canadian stories to Canadians, we believe them. They have already demonstrated their commitment. This proposal allows them to tell more Canadian stories and we support it.
2521 MR. BLUM: Hi. I slept in yesterday. I'm going to tell you all about it. Not really.
2522 I have been a writer and producer of television series and movies in this country for the past 20 years with my partner, Sharon Corder. I had a major hand in creating such series as Traders and Power Play. I have also had an extensive career as an actor and writer, produced and directed a feature film which was honoured with a world premiere at the Directors Fortnight in Cannes.
2523 More unusually perhaps for a Canadian resident, I have had extensive experience writing for shows such as Catwalk, Alfred Hitchcock Presents and Kung Fu, The Legend Continues. These are the shows we refer to as industrial, created for and driven by the U.S. and international markets.
2524 It's hard to convey to those who haven't actually worked on these programs how crucial the script is in defining the show, how vehemently the foreign based producers or distributors or broadcasters fight to control what is on the page because that is where the show really comes into being, on the page.
2525 To be a Canadian writer on these made for export programs is to experience stunningly ludicrous battles about language and ultimately about culture that go right down to whether a character name is too Canadian or references to food products with which Americans might not be familiar.
2526 I personally have received orders from a Los Angeles producer to set a scene in Toronto Harbour, to be shot in January, and to make sure there is no snow or ice.
2527 I bring this up to emphasize the aspects of the BCE-CTV proposal that are most encouraging to Canadian screenwriters, namely the Drama Development Fund of $5 million, to be accessed directly by writers, and the impressive commitment of $70 million for new Canadian drama production.
2528 I cannot say strongly enough how important it is for writers to have a chance to develop their series and television movies and direct partnership with the broadcaster. The reason for this is simple. Both this network, happily, and Canadian writers share a common cause and that is to create Canadian stories for Canadian audiences.
2529 We are certain that if programs are nurtured toward this end, allowing the creators to be less mindful of the demands of the international market at the earliest stages of development, the most crucial stages of development, then we will be able to create shows that are truly worthy of being seen all over the world. Frankly, we hope that other broadcasters will see the advantages of this development approach and will follow suit.
2530 Furthermore, the money that CTV is committing to the production of these programs means that Canadian writers, alone or in partnership with independent producers, can feel confident that the scripts that are developed with the help of the Drama Development Fund will be made and seen by their primary intended audience, which is the Canadian audience.
2531 Another important piece of the proposal is the money earmarked for extending a series run from 13 to 18 episodes. The 13 episode cycle which has been imposed on Canadian series really just simply for lack of resources has been a serious impediment to building Canadian audiences.
2532 According to ratings research, drama series consistently reach their top audience numbers just as they are concluding their 13 episodes. Meanwhile, the American counterparts run 22, 24 episodes, giving them more time to find new viewers and hold viewers. By contrast, Canadian series suffer protracted off seasons when there are no new programs, making it harder to hold on to the viewers they have won, so a longer 18 episode season could be the difference between life and death for a new series. That's very significant.
2533 Finally, I want to add our endorsement of the team of executives who devised and will execute this proposal. These are the same people who have done so much to turn CTV from a major purveyor of the kind of industrial shows that I was mentioning earlier to a significant contributor of original distinctly Canadian programming. This proposal is clearly devised by people who want to strengthen the fabric of Canadian broadcasting and we applaud them.
2535 MR. WREGGITT: My name is Andrew Wreggitt. I have been a professional screenwriter for the last 15 years. I have worked in series television on shows like Destiny Ridge, North of 60, Black Harbour and back in the old days on The Beachcombers. More recently I have been writing long form, all three of the North of 60 movies as well as the Joanne Kilborn Mysteries for TV.
2536 Some of those 15 years have been better than others, but none of them have been easy. The way television is financed and produced in this country can lead to some wild and unpredictable turns for a writer. Ideas can get sculpted and get redefined as new financing partners get introduced into the mix. The distinctly Canadian idea can turn into a sort of Euro quitting script that reflects its financial partnerships better than its own story.
2537 I have always longed for a simpler process, a process that is about the story first. For the first time, CTV is in a position to offer the necessary development money to get a script written. If the writer and the creative team at CTV share the same vision, CTV gets exactly what it wants from the script and the writer is telling the distinctly Canadian story he or she started out to tell.
2538 For the first time, the writer is able to approach the broadcaster directly without involving third parties or government agencies. The writer, the script, the end user, that's a good thing for writers.
2539 Obviously the infusion of this new money will result in more Canadian stories reaching more Canadian as well as audiences around the world. Ten new movies over five years beyond CTV's current commitments, all of this means a busier, more productive indigenous industry, Canadian writers, directors and producers working on Canadian stories for Canadian audiences, a good thing for everybody.
2540 Freeing these projects from the current financing calendars of Telefilm and CTV, CTF, deadlines can only streamline the process and allow the creators to concentrate on the real work, another huge benefit.
2541 The specifics of how the partnership between CTV, the writer and the independent producers will work in the context of these new movie projects are yet to be seen, but we are confident that CTV will maintain a strong and fair relationship with Canada's writers and producers.
2542 The BCE acquisition of CTV is going to cause major changes in our industry, more Canadian programming produced in a more efficient way. That has to be good for everybody in the long run.
2544 MS PARKER: In our brief we have emphasized the positive impact of CTV's approach to development as well as their production commitments to series, drama, movies, miniseries and documentaries.
2545 In conclusion, the Writer's Guild supports the application because we believe it will give Canadians a strong, stable, private broadcaster, dedicated to bringing high quality, popular stories to the country's screens. We also believe its approach will help distinctively Canadian programs reach Canadian audiences as well as succeed in the international market.
2546 Canadian writers want their stories to reach the largest audience possible and we welcome the opportunity to work directly with a network that wants this as well.
2547 Thank you.
2548 CHAIRPERSON OF THE COMMISSION: Thank you very much, Mesdames, Messieurs. Thank you.
2549 MS POIRIER: I would now like to invite the Alberta Motion Pictures Association, Leon Lubin and Connie Edwards.
2550 CHAIRPERSON OF THE COMMISSION: I'm starting to wonder if there is another person because you are always supposed to come as a duo and you always are the loyal one that comes to every hearing.
2551 MS EDWARDS: I always draw the short straw.
2552 CHAIRPERSON OF THE COMMISSION: Mind you, it's always a pleasure to see you. Welcome.
INTERVENTION / INTERVENTION
2553 MS EDWARDS: Thank you.
2554 You will forgive me, I have a cold.
2555 Madame Chair, Commissioners, my name is Connie Edwards, I am the President of the Alberta Motion Picture Industries Association.
2556 AMPIA is very pleased to be here today as we intervene in support of the acquisition of CTV by BCE. We are extremely grateful that the Commission has allowed us the opportunity today to present our views.
2557 For 26 years, AMPIA has represented independent producers and members involved in all aspects of the film and television industry in Alberta. The indigenous industry at the producer, technical, talent and craft levels, we are here to ensure the mandate aren't -- to ensure the mandate, boy.
2558 We are here to ensure the growth and development of this indigenous industry. Central to our mandate is maintaining an environment in which Alberta producers can initiate, develop and produce films and programs over which they have creative and financial control.
2559 As you know, during the last several appearances before the Commission, we have stressed the importance of adequate funding and shelf space nationally for Alberta productions.
2560 We would like to comment on the very positive relationship that AMPIA and its members have had with the CFRN-TV and CFCN-TV in Alberta. These stations, through their Alberta commitments and funds, the CFRN Television Fund and the CFCN Production Fund, and through relationships with people such as Fred Filthaut, Pat MacDougall, Alan Brooks and Bruce Nelson, have allowed for the development and growth of many of Alberta's producers.
2561 Relationships with broadcasters at our regional levels have allowed stories from Alberta to be told to the rest of Canada and throughout the world. I would like to stress to you the tremendous difference that these two funds have made in the development and production of stories from our province, in our voices.
2562 It is our understanding that the benefits that are currently being proposed in this transaction are incremental to the benefits that are in place re development and programming commitments of the local stations across the country.
2563 AMPIA would like to commend BCE/CTV on proposing the largest benefits package in Canadian broadcasting history through its $2.3 billion transaction. We applaud that fully 92 per cent of the $230 million will end up being directed to the television screen and firmly believe that this will have a positive impact on the Canadian production community.
2564 One of the most exciting initiatives of the package is the one-stop shopping for financing of new MOWs and documentaries. As you are no doubt aware, there has been an over subscription to the Canadian Television Fund for the past several years. This initiative would help take the pressure off the CTF, and some other funds, and would allow producers more flexibility to produce their programs throughout the year instead of during a concentrated number of months.
2565 Another initiative that is quite interesting to us is the groundbreaker proposal. We are told that this benefit will put significant additional dollars into the regions for development and production of innovative, interactive new programming.
2566 The broadcasting industry is changing almost daily with advances in technology and through consolidations. We read about that this morning. With this proposed acquisition, BCE/CTV positions itself well in the new landscape while offering significant contributions to Canadian programming.
2567 As we did in our last appearance before the Commission, AMPIA would like to comment in general about our concerns in relation to these consolidations to vertical integration.
2568 Again, I wish to be clear, we are not opposed to vertical integration or mergers or consolidations. Some of our production companies will benefit from ownership by broadcasters or other production entities, but AMPIA does believe that unless great care is taken, bigger does not always mean better. We must remember the value of each individual human spirit and we must remember to leave the door open for those voices that perhaps begin as a whisper, but grow and swell and bring to Canadians a story that is unlike any other.
2569 Unless each broadcaster takes care to preserve the diverse voices from across this country through firm commitments to develop and license original works from a variety of writers, producers and directors, whether on television screens or on the Internet, we will not have true creative representation of Canadians speaking to Canadians.
2570 AMPIA represents over 55 production companies that produce high-quality, award-winning programming. In past years these companies have relied on shelf space on our local CTV stations as an opportunity to present programs that were of local or regional interest. In recent years it has been difficult for independently produced Alberta programming to find shelf space on the national CTV network. However, we look forward to working with BCE/CTV in developing and producing quality programming in Alberta that all Canadians can enjoy.
2571 Therefore, AMPIA recommends that the Commission continue to ensure, through their licensing decisions, that a diversity of voices from across this country continue to be heard. We encourage BCE/CTV to continue to have initial development decisions come from the regions where producer/broadcaster relationships and an industry knowledge base have been well established.
2572 I am pleased to tell you that I spoke with BCE-CTV last night and Louis Clark, head of development, is in fact going to have regular visits to Alberta and I see that as a very commendable effort and a sign that there is a commitment to us.
2573 I also was going to speak about the commitment of providing 175 hours of priority programming. In our written intervention we asked for clarification as to percentages of the programming in this benefits package that would be commissioned from independent producers.
2574 It is my understanding from hearing the proceedings this morning that they are offering an 80/20 split. Ideally -- ideally we would like to, of course, see 100 per cent of these public benefits go to truly independent producers.
2575 As we are now seeing, broadcasters are becoming producers or have interests in production companies or producers are becoming broadcasters, so again we would ask the Commission to establish for all broadcasters, clear public policies that avoid self-dealing practices. We also do recommend exploring reasonable limits in company ownership so that independent producers truly remain independent.
2576 In closing, AMPIA would like to congratulate BCE/CTV on its comprehensive and broad-based benefits package. We were pleased that our members had the opportunity to meet with representatives from BCE/CTV to discuss these initiatives prior to our written intervention.
2577 We again thank the Commission very much for the opportunity to express our views and I am happy to answer any questions that you may have.
2578 CHAIRPERSON OF THE COMMISSION: Thank you.
2579 No, I don't think we have any questions, but I wish to say you would like a condition of license that would require Mr. Fecan to go and visit you regularly in Alberta. Is that what I --
2580 MS EDWARDS: Only if he brings his pocketbook.
--- Laughter / Rires
2581 CHAIRPERSON OF THE COMMISSION: I was surprised when you kind of said in closing that you did like to congratulate BCE-CTV. I thought it would be the CRTC, but I suppose it will be in your press release at the decision time.
--- Laughter / Rires
2582 MS EDWARDS: Well, we must remember that it is because of the CRTC that we are seeing the gracious benefits programs that are before us and of course I congratulate the CRTC.
--- Laughter / Rires
2583 CHAIRPERSON OF THE COMMISSION: Ms Edwards, thank you very much for having taken the time to come and really be with us today.
2584 MS EDWARDS: Thank you very much.
2585 CHAIRPERSON OF THE COMMISSION: Give our best regards to Mr. Lubin, and have a safe trip home.
2586 MS POIRIER: The next intervention is presented by the Association of Canadian Advertisers, represented by Ronald Lund, Robert Reaume, Judy Davey and Susan Charles.
--- Pause / Pause
2587 CHAIRPERSON OF THE COMMISSION: Good afternoon.
INTERVENTION / INTERVENTION
2588 MR. LUND: Good afternoon.
2589 CHAIRPERSON OF THE COMMISSION: Welcome.
2590 MR. LUND: Madam Chair, Vice-Chairs, Commissioners, Commission staff and counsel, we very much appreciate the opportunity to appear before you today to elaborate on our written intervention of support for the BCE/CTV application you are now deliberating.
2591 Before I begin, as usual, I would like to introduce my team.
2592 On my left here we have Judy Davey. Judy is the Vice-President, Media with Molson Breweries and she is also the Chair of the ACA's Broadcast Committee.
2593 On my right is Bob Reaume, Robert Reaume, as the note says here today, Vice-President, Media and Research.
2594 To his right is Susan Charles, the ACA's Vice-President, Membership Services.
2595 The Association of Canadian Advertisers has been exclusively representing advertisers' interests since 1914, and counts among its members a very broad cross-section of major companies who advertise their products and services in Canada. In total their sales exceed $250 billion a year. Our member companies come from many industry sectors, including manufacturing, retail, packaged goods, financial services, communications, just to name a few.
2596 In fact, we do feel somewhat obliged to point out that the applicant before you today, BCE, is itself one of Canada's largest advertisers, spending an estimated $100 million last year, and that two of their affiliated companies, Bell Canada and Bell Actimedia, are members in good standing with our advertiser association.
2597 I am sure also that it will come as no surprise when I tell you that television broadcast advertising is very important to our members, the advertiser. After years of using this medium to promote our products and services, advertisers feel that we have made a substantial investment in television, an investment as an advertising medium.
2598 MR. REAUME: Advertising is still the primary funding resource sustaining the Canadian broadcasting system. In all its forms, advertising is estimated to represent an annual $10 billion investment in the Canadian economy. Of this amount, approximately $2.3 billion is invested annually in television. Of all the diverse sources of funding that support the Canadian television broadcasting system, advertising remains the single largest contributor.
2599 Indeed, the applicant in this matter before you today, through all its affiliated companies, last year alone contributed over $40 million in television advertising to the Canadian broadcasting system.
2600 Considering these substantial revenues, the role of advertising is critical to a healthy and vibrant television broadcasting system in Canada. For many advertisers, conventional broadcasting is still the workhorse of brand building, and that in spite of increasingly reduced viewing shares.
2601 At the same time, a healthy broadcasting system is critical for advertisers in Canada. Advertising is the engine that drives television in Canada. It is what pays for content. Advertisers are silent financial partners in the system.
2602 In this regard, we believe that after years of shifting and unsettled ownership of CTV, BCE will bring a much-needed stability to this important national English-language TV network facility.
2603 This will be especially critical now, in light of CanWest's evolution into a national English-language TV network -- with the recent acquisition of WIC's TV assets -- and its new status as a formidable multi-media advertising supplier -- with the pending acquisition of Hollinger's Canadian newspaper and Internet assets.
2604 Therefore, we believe that continued competition in the supply of advertising media must remain at least as important as the creation of conditions to facilitate Canadian-based global media entities. A strong and stable CTV will be much better able to provide some of this important competitive counterbalance.
2605 Also of interest to advertisers in this deal is the potential for positive synergies with several on-line new media properties and rich content sources. Advertisers in Canada have embraced the Internet and will spend somewhere in excess of $100 million on-line this year advertising their products and services. As all media continue to converge on the Internet, advertisers will increasingly focus more attention there.
2606 MS DAVEY: However, at the same time, we do want to raise a few notes of caution.
2607 First, advertisers continue to use the television medium to reach their target markets because, on careful reflection, the amount and quality of viewers for the price paid remains acceptable.
2608 It has not escaped our notice that the price paid for this acquisition is quite substantial. That will have to be cost-recovered. Advertisers do not want to pay for this acquisition with excessively higher rates. Advertisers will monitor market pricing closely in the months ahead, and if they find that the price/value equation from CTV is diminished too much, some of their revenues will only naturally flow to other options.
2609 Secondly, with the Canadian Broadcasting Corporation the CBC, currently debating a move to reduced commercialization, security of supply of advertising inventory, as well as its effect on market pricing, is of concern to all advertisers. The existence of strong, stable and, most importantly, competitive entities, can help address this concern, along with the creation of new commercial outlets for our use.
2610 And finally, we must raise one last note of caution in regard to the notion of synergy. Innovative, creative and, most importantly, appropriate use of multiple media to cross-promote and reach target markets will always be welcomed, embraced by advertisers. But forced buys of any sort that don't make marketing or media sense for the advertiser, will not.
2611 MR. LUND: So as you have heard, we support this application before you. We support it because we believe it will bring stability to an important component of television advertising media in Canada.
2612 This is an industry that is vital to advertisers, and one that advertisers play a critical role in funding. We support it because there is also the potential for many positive and beneficial exchanges in this new multiple-media world.
2613 Above all, we support it because advertisers in Canada want to reach Canadian viewers. We feel that BCE and CTV seem to want to achieve the same thing and appear committed to providing substantial resources to do it.
2614 So it is for these reasons that advertisers strongly support the application of BCE to acquire CTV.
2615 Once again, thank you for allowing us to present our perspective for your consideration. Of course we wish you well on your deliberations.
2616 If you have any questions, we would be more than happy to answer them.
2617 CHAIRPERSON OF THE COMMISSION: Yes, we have a few. Thank you very much for being with us this afternoon.
2618 I would ask Vice-Chair Colville to address our questions.
2619 COMMISSIONER COLVILLE: Thank you.
2620 Good afternoon, ladies and gentlemen.
2621 A couple of questions. There were a couple of sentences that were in your written brief and the same sentences were in your oral presentation this afternoon. It kind of struck me, when I read them, that I would like to pursue them and then ask a couple of questions related to the broader issue of the fundamental rationale, I think, underpinning this proposal.
2622 The sentences were at the second last page of your presentation this afternoon, the second full paragraph.
2623 The first one is the first issue you raised, and it is the first sentence there:
"First, advertisers continue to use the television medium to reach their target markets because, on careful reflection, the amount and quality of viewers for the price paid remains acceptable."
2624 I was struck by two phrases in that sentence: first of all, the words "on careful reflection", like you really had to think about this -- and I don't mean that as a criticism, it just struck me that perhaps you did have to think about it; and, then it was the last two words "remains acceptable".
2625 I wonder if you might explain what you were meaning by that sentence?
2626 MR. LUND: I will start off and then I will turn it over to Bob.
2627 In actual fact, it was careful consideration. The television medium for us as advertisers eludes us with its specificity in terms of what targets we are hitting sometimes. The measurement of television is still quite poor overall. With the ever-fragmenting media, we had to look at it and say: Does this still make sense?
2628 The words meant not much more than that. We said: Do we still put a lot of money? Well, the evidence is we do, but the evidence is that it is starting to flow into other areas as well, whether it is new media or a resurgence in radio.
2629 That is really, I think, where that statement came from, that we did actually reflect back and say "under careful consideration".
2630 CHAIRPERSON OF THE COMMISSION: And the "remains acceptable", is that a reflection also of the -- how shall we say -- adequacy of the measurement in terms of identifying the target?
2631 MR. LUND: It is something we believe we can make improvements. We continue to have talks with two suppliers necessarily, one BBM and the other one being Neilsen. Despite the fact that we have these tremendous technologies of meters, the absolute amount of metering in Canada is pretty poor overall. I don't want to get too technical, but once you get below very broad demographics, the amount of meters to determine a sample of that, it's just not there.
2632 But we believe that we are making inroads and we will continue to work with these people to try to understand better what value we are getting for our dollar.
2633 COMMISSIONER COLVILLE: If we go to the last sentence in that same paragraph:
"Advertisers will monitor market pricing closely in the months ahead, and if they find that the price/value equation from CTV is diminished too much, some of their revenues will only naturally flow to other options."
2634 MR. LUND: Maybe I should let an advertiser speak to that.
2636 MS DAVEY: I would just like to back up and, before addressing that, just add a few more comments to what Ron started to say.
2637 We mentioned at the beginning of the topic that we treat advertising as an investment. So anything we do, our advertising, is an investment and that's why it's important to carefully reflect upon where we are placing our dollars and it is critical that we step back and do take a good look at our investments.
2638 Competition is a great thing. I think as long as there is strong competition out there, we are going to be able to analyze and take a look at our options. So by you folks allowing to preserve strong competitors and strong entities, we will always have the option of having choice and looking at where we can make our investments.
2639 We monitor what goes on in terms of the price/value equation on a regular basis by looking at the audience delivery of properties and programs and by reflecting the cost benefits and the cost per thousands that we get from our investments. It is important, as an advertiser investing our money, that we are making the wise choices.
2640 So as long as we keep looking at it and continue to evaluate the choices, and as long as they remain competitive, then the dollars will stay there.
2641 When things become reduced in terms of their value or importance, then we have to protect our investment and look at other options.
2642 COMMISSIONER COLVILLE: It seems to me one of the fundamental pieces of this proposal, coming from BCE-CTV, is the benefits package. I don't know whether you were here yesterday to follow any of the discussion that we had with them. There is $230 million in benefits, $140 million of which is to go into priority programming. Their proposal is that they will control and spend this money to, as they put it, take their programming, their system, to a new level.
2643 Commissioner Wylie said if she heard the term "paradigm shift" again she was going to throw something at somebody.
--- Laughter / Rires
2644 COMMISSIONER COLVILLE: I think that term has been used several times over the last couple of days to sort of break out of the old mould that we had in terms of funding Canadian priority programming, and this would be an injection of major new funds to get good quality programming that is going to attract more audience and, presumably then, you are going to follow with more money.
2645 So instead of finding that the price/value equation has diminished too much, some of the revenues will only naturally flow to other options, the proposal here is that the price/value equation is substantially increased, I presume, such that more revenues will flow to CTV and to Canadian programming so that we can break out of this and the money will be there to fund more programs, and we can get ourselves out of this spiral that we have been in.
2646 What is your take on this?
2647 MR. LUND: We think the package is wonderful. We, in fact, concur with your perspective. Our comment was just if it --
2648 COMMISSIONER COLVILLE: This is their perspective. I'm trying to get your sense of --
2649 MR. LUND: We liked it interpreted by you as well.
2650 No. We think that it is a great package. We do think it is going to enhance Canadian programming. We are always accused of being mercenary, and we are, and that is, we want the eyes. If they have the eyes on the programming we are going to buy the time on those spots.
2651 So we think it is good. We are delighted in all their efforts that will bolster not only programming but Canadian programming. So we were happy with that package, very delighted. It doesn't impact us directly. We kind of are the derivative. They deliver the television audiences; we buy the time.
2652 COMMISSIONER COLVILLE: So there is not much doubt in your mind, then, that this $140 million can increase that price/value equation for you, such that in fact you would be -- rather than diminishing the revenues or revenues to them, expenses for you, they would substantially increase.
2653 MR. REAUME: I think the answer is yes.
2654 The only qualifier that we might put on it is that we hope that they can pay for some of this investment through international syndication and revenues other than from advertising. We don't want to have to end up paying the full $140 million in increased rates to advertise in those programs. It is the only qualifier I would put on it.
2655 MS DAVEY: Just to put it in simplistic terms, we would hope and expect that the infusion of cash will create stronger programs and larger audiences. However, if an audience went up, say, 50 per cent, but the cost to participate in the program went up 200 per cent, then we would have to take a look at it.
2656 COMMISSIONER COLVILLE: Back to the price/value equation.
2657 Now, would you have a comment, because the issue has been raised, as to whether or not it would have been more appropriate to put this money into a fund that would be ongoing beyond the seven years as opposed to the CTV's proposal that they would spend $140 million over seven years or $20 million more per year on average? Would you have a view in terms of your involvement as to which would be preferable?
2658 MR. LUND: We have not examined --
2659 COMMISSIONER COLVILLE: I guess I am thinking of that in the context of the relative quality of programming that might come out of it.
2660 MR. LUND: The only comment I can have is that I think the whole package that has been put forward demonstrates a tremendous commitment. You know, to comment on whether it should be put into seven years, nine years ongoing, I have not really looked at it strongly enough.
2661 I suspect, from a personal basis that doing things up front tends to get the impact going and good things will happen and then they will perpetuate. I think if you try to take that -- which is a business comment -- if you try to take that and spread it over too many years, maybe you are never really going to get started. Kind of not a real opinion, but my own perspective would be: sooner is always better in terms of infusion versus over periods of time.
2662 MS DAVEY: I would just add that, for me personally, I think seven years is great. So much is going on in this industry and changing that seven years from now is a long way away. So I think having it allocated within that makes a lot of sense.
2663 COMMISSIONER COLVILLE: So on careful reflection, it's a good deal. Okay. Thank you very much.
2664 MR. LUND: But on reflection, we just think it's a wonderful deal, period.
2665 MR. REAUME: We did refrain from any mother or hair jokes.
--- Laughter / Rires
2666 CHAIRPERSON OF THE COMMISSION: Thank you very much, mesdames et messieurs. It's very important... You are often present with a written intervention, but you have, as you know, and you have well said, an important role in that broadcasting system and we appreciate having had the opportunity of discussing with you. Thank you.
2667 MR. LUND: Thank you very much.
2668 MS POIRIER: The next intervention is presented by ExtendMedia Inc., represented by Keith Kocho.
INTERVENTION / INTERVENTION
2669 CHAIRPERSON OF THE COMMISSION: I never thought we would see you again after the new media when we had said, we exempt from regulation.
--- Laughter / Rires
2670 CHAIRPERSON OF THE COMMISSION: It's a pleasure to see you again. I'm not sure you...
2671 MR. KOCHO: It's mutual. Thank you very much.
2672 CHAIRPERSON OF THE COMMISSION: You thought that you wouldn't have to come back to the Commission. But we are happy to see you back.
2673 MR. KOCHO: I thought I had escaped forever. One exemption equates for years of freedom, but not...
--- Laughter / Rires
2674 CHAIRPERSON OF THE COMMISSION: No one is totally free.
2675 MR. KOCHO: No, no.
2676 Thank you very much for the opportunity to appear.
2677 I understand that you are informed that I'm not exactly an arm's length party to this transaction by virtue of my relationship with BCE as well as CTV. I thought I would state that from the outset.
2678 I thought I would start off... First of all, I should apologize if I look at all anxious. I'm somewhat nervous. My wife and I are imminently expecting the birth of our first child, so I'm currently wearing two pagers, have my cell phone turned on. If they go off... They're on.
--- Laughter / Rires
2679 MR. KOCHO: That just goes to show the extent to which I felt that these proceedings were extremely important.
2680 I thought I would start off by just sharing a short story with you. It started about four and a half years ago when I was visited at my offices by -- at the time, I think we had about 15 employees. We are now at about 160 -- by two people who are present here, today, Sheridan Scott and Elizabeth Ostiguy, who conveyed to me a vision which is, to some extent, it's come to fruition in a number of ways, including this transaction which was for the Bell Broadcasting New Media Fund.
2681 At the time, they were exploring very specific ways that they thought the areas of -- pardon the term, "traditional media", and the new media could collaborate in ways that would be of practical support to the burgeoning new media industry. That fund obviously was born a little over three years ago.
2682 As an organization, you will note in the submission that I made, we have benefited from it directly on a number of occasions, and I want to applaud the vision of both of these organizations in a package that I think is wonderful.
2683 It's great from a number of different perspectives, not only in the grassroots benefits that it provides to various communities. In the business that I'm trying to survive in on an ongoing basis that changes very rapidly, I think there are kind of two evolving modes of thought with respect to the economics of new media, one of which is localism, which is played out extremely well in the benefits package, the support that they will be providing to local communities, and as well, the extent to which globalization will have an impact on this industry. I would concur with most of the other presenters here at these proceedings that size is of great importance, but as well, vision and articulation of that vision and moving on it quickly as well.
2684 The fund itself does not have a peer, as far as I know, in the U.S. market, which is something I often talk about. The extent to which a private organization has gone to enforce in some ways collaboration between two communities that in the past might not have wanted to collaborate I think is a wonderful example of vision.
2685 I would also like to command the approach that has been taken to support education, and particularly, applied education in the space. I am a Ryerson graduate myself and I'm quite thrilled to see that the endowment is being proposed for Ryerson in the area of new media.
2686 I have also sat on the Board of the Film Centre and participated in an advisory capacity in the Banff New Media Institute and others and I would applaud the recommendations that they have made there as well.
2687 Clearly, the importance of programming investments is absolutely critical. I couldn't trumpet that more loudly. I think that we do face increasing pressure from our neighbours to the south to create higher quality programming with decreasing budgets, and the financial commitment that has been made is a wonderful indication.
2688 The only other point that I would make might sound a bit odd, but the fact that these two organizations are coming together gives them a mutually vested interest to very quickly explore the areas of interactive television and the diverse economies, I guess, that exist there and to face some other programming challenges. I think that vertical integration in this regard is actually quite helpful.
2689 One of the things that we are experiencing as a company in this space is that there is a reticence to take the first step; who pays for the infrastructure and the programming and so on, which ultimately should result in a greater choice of programming and functionality for consumers.
2690 I think we are likely to see, through this union, a greater speed and an approach to the market which will be very beneficial to the independent production community that I am certainly a representative of.
2691 I think that's about it. Other than that, you can probably tell that I think it's a good deal.
--- Laughter / Rires
2692 CHAIRPERSON OF THE COMMISSION: Thank you very much.
2693 MR. KOCHO: You are very welcome. Thank you.
2694 CHAIRPERSON OF THE COMMISSION: We appreciate your coming.
2695 MS POIRIER: Mr. Robert Douglas Morrice.
INTERVENTION / INTERVENTION
2696 LA PRÉSIDENTE DU CONSEIL: Bon après-midi. Bonjour.
2697 MR. MORRICE: Good day. My name is Robert Morrice and I am delighted to be here, Madam Chair and Commissioners. Thank you for this opportunity to present an intervention supporting BCE's acquisition of CTV.
2698 I'm a former banker who now heads a Toronto based firm that provides financial advisory services to the media and entertainment community. I am recognizing that appearing late in the day is probably a disadvantage when attention spans and energy levels are perhaps flagging.
2699 It reminded me of a time when I got on a flight to Los Angeles late in the day after spending the day in the office, and I was just settling into my seat and Lazslo Barna boarded the plane.
--- Laughter / Rires
2700 MR. MORRICE: How much time do I have?
--- Laughter / Rires
2701 MR. MORRICE: As a career specialist in financing the banking for film and television producers, I have extensive first-hand knowledge of the ongoing struggle for funding experienced by many contract traders. In these remarks, I hope to detail some of the problems faced by producers and describe how the proposed BCE benefit package will positively impact the Canadian production industry.
2702 Most identifiably, Canadian programming is extraordinarily difficult to finance and requires that producers navigate a patchwork of funding guidelines and deadlines in order to assemble the required funds.
2703 I believe the one-stop shopping package proposed by BCE will tremendously increase the efficiency of the program financing system over the next seven years and will result in more and better programs for Canadian viewers.
2704 Content creators who might have otherwise been frustrated by the funding maze will now have an opportunity to produce and screen their projects.
2705 Over the last 13 years, I have been involved with hundreds of film and television productions and have helped provide billions of dollars in financing to Canadian producers. For the last eight years, I led Canada's largest media and entertainment financing group at a major Canadian bank. We provided loans to producers for as little as $50,000 and for as much at $500 million.
2706 In addition to financial services, producers often solicited general business advice. In fact, I once served on the Board of Directors of the Canadian and Television Production Association to better provide advice and guidance to the industry, including commentary and recommendations on the patchwork of Canadian funding for Canadian programs.
2707 I believe my experience has given me a unique perspective of the challenges faced by independent producers in Canada.
2708 The industry has matured over the last decade, but financing production continues to be the biggest challenge faced by independent producers. Only the most established producers enjoy bank operating lines of credit. The vast majority fund their activities on a project-by-project basis. Most small Canadian content traders are chronically under-capitalized. Monies spent on development and overhead are not recouped unless the project goes into production. Even then, producers often defer recoupment in order to bridge budget shortfalls.
2709 Producer deferrals are a frequent source of financing for projects which results in producers' money being tied up in productions for long periods, restricting their further development and production activities.
2710 In addition to chronic under-capitalization, producers wishing to access Canadian production funds face a heavy administrative load preparing and filing applications. The process of securing funding for an identifiably Canadian project is fraught with many detours and delays.
2711 Once a producer has interested a broadcaster in a project, he or she must finance the balance of the budget. Domestic broadcast licences often account for just 25 per cent of the production costs of the Canadian project. Provincial film agencies, Telefilm Canada, the Canada Television Fund, labour tax credits, equity investments, equity deferrals and foreign sales are used to generate the balance of required funding.
2712 It is not unusual for a producer to have more than a dozen sources of financing for a single project. The financing process is difficult, time consuming and costly. In addition, the time spent raising these incremental amounts can detract from the quality of the end product.
2713 Like most entrepreneurs, content producers must take financial risks in order to succeed. Rights must be acquired, scripts need to be written and rewritten and key creative personnel need to be retained.
2714 These developments costs must be borne by the producer, occasionally with the assistance of a funding agency or a broadcaster. In addition, they sometimes have to incur pre-production expenses in order to meet very tight delivery deadlines in the event the project is green lit.
2715 These expenses often need to be underwritten by the producers prior to any agency funding decisions. It is not uncommon for a producer to have invested as much as 10 to 20 per cent of the budget already committed or spent prior to receiving funding approvals.
2716 The producer often needs to make these comments in order to get the project to the point where applications can be submitted.
2717 In order to secure funding from Telefilm, the CTF, provincial agencies and/or private agencies, the producer will have to submit a qualifying application prior to the various program deadlines.
2718 The producer must then wait for funding decisions to find out if the project has qualified and, if so, for which funds. While the equity investment program licence fee program decision process has recently improved, producers are still faced with great uncertainty as to whether and when their projects will be financed.
2719 Given the amounts of money expanded, or often expanded, to ready a project for production, production companies can face financial ruin due to an adverse decision by a funding agency, this in spite of the fact that they have proven demand for their project in the form of a broadcast licence. This was the case detailed by Suzette Cadieux when she spoke of Wild Geese. Fortunately, it worked for her.
2720 BCE's proposed one-stop shopping would provide substantial benefits for producers. Being able to obtain up to $2.5 million or 70 per cent of a production budget from a single source will greatly reduce the producer's administrative burden while simplifying and accelerating the approval process.
2721 Instead of dealing with as many as 12 different parties and their lawyers, with different application forms, deadlines and reporting requirements, producers will virtually fully finance their production with one party. Producers accessing up to 70 per cent of the production budget may not have to defer their fees or overheads as they could qualify for tax credits equal to 30 per cent of the budget. The result: more money faster with less uncertainty for producers. This level of support and commitment is a massive step above any other program offered in Canada.
2722 Now, producers often have to bridge the timing of production expenses and the receipt of licence fees and other revenues. Bank fees, interest charges and legal fees are costly extras that are incurred when monies are not cash-flowed. In fact, these charges can amount to over 5 per cent of the total budget for many projects.
2723 The new BCE monies will be cash-flowed or paid during production, meaning less money will be spent on bank charges and more money will hit the screen.
2724 The flexibility of the one-stop shopping package is commendable. The fact that a producer can pick and choose which of the BCE funding options they would like to access shifts a tremendous amount of bargaining power back to the producer. The producer can obtain the best deal from licence fee to equity investment to foreign distribution, a rare opportunity in a market where large buyers can link these funding sources and force the producer to take it or leave it.
2725 Finally, the fact that the priority programming to be financed is incremental to existing levels means that Canadian producers will move an additional 175 hours of programming from development into production. These new hours will help producers recover existing investments in development which will improve their capitalization and stabilize their financial health. Stronger producers are able to spend the time and invest the resources necessary to create better programs.
2726 In summary, BCE's one-stop shopping proposals may be the catalyst required to put Canadian programming on the map. Producers will be faced with less uncertainty, their financial risks will be moderated, and their time will be free to, rather than waiting in queue to learn the faith of their various applications, producers can spend their time improving the quality.
2727 I believe that the BCE proposal will result in more and better identifiably Canadian programming and a healthier Canadian production industry.
2728 Thanks again for the opportunity to present today.
2729 I will be happy to answer any questions.
2730 CHAIRPERSON OF THE COMMISSION: Thank you very much. It has been very helpful.
2731 Thank you for being with us this afternoon.
2732 MS POIRIER: The last intervention to complete this Phase is presented by the Big Firm Productions Limited, by Alyson Feltes.
INTERVENTION / INTERVENTION
2733 CHAIRPERSON OF THE COMMISSION: Good afternoon.
2734 MS FELTES: Good afternoon.
2735 My name is Alyson Feltes. I am a writer and producer based in Toronto and I have been working in film and television for the last 13 years in various capacities.
2736 This is my first time here so I will tell you a bit about me. While I was at the American Film Institute, I co-wrote and produced the fictional drama Oka, much to the surprise of the people in L.A. who had no idea what Oka was, but we told them.
2737 More recently, I co-developed the television series Traders which I wrote and executive produced for three seasons. I wrote and executive produced the television movie Justice, part of which was shot right around it actually, and I am presently working as co-creator, writer and executive producer on the one-hour drama The Associates, which is produced by Alliance Atlantis for CTV to be broadcast in January of next year.
2738 So I hope that my experience in those capacities will assist you to giving your blessing to this union because I think, as a writer, it is a union made in heaven.
2739 I have been observing the metamorphosis of CTV kind of from afar since Ivan Fecan became President and I took note, as many others did, of the people he hired and the positive stories that they tended to tell, and I also noted as a person myself trying to tell Canadian stories that CTV consistently paid higher licence fees for those programs than they were mandated to.
2740 I peaked at one of their broadcast licences several years before I ever worked with them and also saw the creative participation that they insisted upon right down to the type of film stock to be used. So I knew then, before I began working on the development of The Associates a year ago, that CTV is serious about their Canadian content, not to satisfy you, but to satisfy me as a Canadian viewer.
2741 In an era where Canadian content rules have been relaxed allowing broadcasters to work to a minimum standard sometimes, CTV has not relaxed. We have been working together for a year, and it's a rigorous year during which the demands they made upon is as storytellers and writers have made our scripts better -- and I hope you will see in January.
2742 They have encouraged us to represent Canada as a diverse place and they have with us developed the legal stories on our legal show that take on issues affecting minorities and First Nations within the first five episodes.
2743 Today, I wanted to address specifically the new development initiatives which demonstrates to me an extension of CTV's existing commitment to diverse Canadian storytelling and they also indicate to me that BCE shares that commitment and endorses that commitment, and that is a big deal for writers in Canada.
2744 It's the kind of creative promise that makes people like me who are dual citizens and who work on both sides of the border feel as if we are on the cutting edge if we stay at home. It's a creative to people who are non-white and middle class or who don't have a long relationship with an existing producer. It means access for new talent and that's a big deal.
2745 You don't need me to tell you that you can't have drama without a good story, good stories come from anywhere. I remember Alex Rose, who was one of my producing teachers at the American Film Institute, telling us how she, as a young film student at UCLA, would go into the university library and examine back issues of the New York Times, trying to find a great story that would have some interesting twist to it.
2746 One day she came upon a small piece about a scrappy southern cottonmill worker who took on the powerful mill boss and created a union. She found that young millworker somewhere in South Carolina, I think, and asked her to tell her story and the movie Norma Rae was born.
2747 We have those stories in Canada, stories of heroes and heroines and stories of people succeeding against personal odds and cultural odds. It simply takes time and effort and money and will to dig them up or to make them up.
2748 Prior to the creative gift of the proposed development fund from CTV and BCE, young writers, minority writers and writers who are not established or connected would have had to take their interesting story, as others before me have said, through a development process that was daunting and exhausting. For the most part, you had to know somebody inside. I'm not sure whether Norma Rae would have seen the light of day in Canada.
2749 I remember returning to Canada from the United States feeling a sense of absence here. I mean who in Canada is going to make a program based solely on the story and not because of the deal in place or a political objective that had to be fulfilled? Who will ever tell the story of the unlikely hero, especially when the unlikely story might come from an unlikely source? That may change now.
2750 The writer based development fund is, I think, the first of its kind in Canada. It makes the development executives that CTV has in Toronto, Vancouver and Halifax all very smart people, all people who have known for quite a while. It makes them accessible to story tellers who don't have connections but who have a great story. That can only make the television -- the drama that we produce better. It's that simple.
2751 There's a young woman I work with named Tessa Barlow. She's an amazing woman with a sense of story and a great idea. If the acquisition of CTV by BCE is approved, she will have a place to take that idea without me and without necessarily a big production company fronting her. She can develop it directly with some proactive and experienced people.
2752 There's a terrific actor who I worked with on Traders named Rick Roberts. He has a fantastic screenplay that he has written. He would get a meeting in the new scenario where he might not otherwise. I wonder whether the story of Julie of the Wolves, which is a traditional Inuit coming of age story -- did that ever get developed into a screenplay? It could and it should and it may now.
2753 Tessa Barlow should not need me, even though my agent is kicking me under the table right now. She should not need me or a production company or a financial underwriter to bring her idea to the attention of the people who put it on the screen.
2754 The basic rule must be the story first and it should be possible for anyone to go to the library in Toronto or Truro of Tuktoyaktuk and uncover the gem and know that there's a chance that it may become a screenplay, whether by their own hand if they are a writer or in conjunction with the right writer for the story. The development executives at CTV are well placed to put those two people together.
2755 The CTV-BCE proposal may not change the way we as Canadians look at ourselves, but it's an invitation to do so. The Canadian storytellers that I have polled, new in experience, culturally and ethnically diverse, really want to RSVP a resounding yes to that invitation.
2756 That's all I have to say.
2757 CHAIRPERSON OF THE COMMISSION: Thank you. I think Commissioner Wilson has a question for you.
2758 MS FELTES: Oh, no.
2759 CHAIRPERSON OF THE COMMISSION: Oh, yes.
2760 COMMISSIONER WILSON: It's an easy one.
2761 MS FELTES: I wasn't supposed to get any questions. That was the deal.
2762 COMMISSIONER WILSON: Wait until you hear this question. You will probably be glad.
2763 Ms Feltes, you talked about watching Mr. Fecan from afar and you talked about the people that he hired who were so committed to telling Canadian stories. I actually broached this idea to the Chair a little earlier today. She laughed at me, but I will ask you anyway.
2764 As part of this transaction, do you think we should impose a condition of licence that they keep those people there for the next seven years?
2765 MS FELTES: That would make me happy. It would make me very happy.
2766 COMMISSIONER WILSON: I told you it was an easy question.
2767 CHAIRPERSON OF THE COMMISSION: Thank you very much.
2768 MS FELTES: Thank you.
2769 MS POIRIER: This completes Phase II of this part of the hearing.
2770 We would now like to invite the licensee to come forward with a reply.
REPLY / RÉPLIQUE
2771 MR. FECAN: Before we begin, we wish to correct the transcript of yesterday's proceedings at page 159. The amount assigned to the Benefit and the New Media Centre of Excellence should read $1.5 million.
2772 We also feel it necessary to apologize for the hubbub in the back of the room a couple of hours ago. We just received word that we got 85 Gemini nominations, the most we have ever got, 50 per cent more than last year, 48 of which are in drama. The two out of the three top nomination categories for us were for Dr. Lucille and the Sheldon Kennedy story, both produced under benefits packages over the past while.
2773 Madame la Présidente, mesdames et messieurs les Conseillers --
2774 COMMISSIONER WYLIE: I thought the hubbub was Mr. Shea's telephone.
2775 MR. FECAN: Perhaps he got his numbers then.
2776 We are pleased to present a reply to interventions. My name is Ivan Fecan and I am President and Chief Executive Officer of CTV. With me on my right are Alain Gourd, Président et Chef de la direction de BCE Média, and Jim Macdonald, Senior Vice-President and Chief Media Services Officer, BCE Media. To my left, Trina McQueen, Executive Vice-President of CTV and Sheridan Scott, Chief Regulatory Officer, Bell Canada.
2777 Behind me on your right are Robin Fillingham, Executive Vice-President and Chief Financial Officer of CTV, Kathy Robinson of Goodman, Phillips and Vineberg, and Martine Turcotte, Chief Legal Officer of BCE.
2778 We note for the record that we have filed the detailed written response to the interventions which should be read in conjunction with our statements here today.
2779 First I would like to thank everyone who took the time to intervene and, of course, the more than 3,000 letters of enthusiastic support from all across Canada, from communities, creators, academics, aboriginal groups and many others. We are pleased to receive 600 letters of support from the creative community.
2780 I would particularly like to thank our supporting intervenors, many of whom travelled a great distance to give you thoughtful comments and excellent suggestions today.
2781 MS McQUEEN: We would like to thank the CFTPA and the Director's Guild and the producers who appeared before you for their belief in our dream and for their support of the priority programming proposals. We would like to thank their membership and producer individuals across the country who all provided input as we were designing the benefits package.
2782 The producers' association intervention this morning suggested that unaffiliated production companies should be defined as companies in which we have no investment at all. We are sensitive to the views of independent producers, but we do respectfully disagree with the CFTPA position on this. Like Laszlo Barna, we believe that this suggestion would be prejudicial to independent producers who require capital to grow.
2783 We think that defining "unaffiliated" as no more than 30 or 34 per cent level of ownership is both fair and reasonable and we note that you did not have much objection to that from the Director's Guild. That definition of "unaffiliated" is also consistent with the Commission's recent decision on The Food Network, 2000-217.
2784 The CFTPA also suggested a terms of trade agreement. We are interested in this suggestion and believe that it may be useful to include a discussion of this industry-wide issue at the licensing hearing next spring.
2785 We also note that we do agree with the wording from the Director's Guild on page 5 of their intervention today regarding recoupment.
2786 We would like to thank Senator Chalifoux and the three other intervenors on diversity issues for their comments. They have raised excellent ideas about implementing our diversity proposals and we would certainly take advantage of them. We appreciate their valuable input.
2787 The CEP expressed concern about local news. There have indeed been cuts over the last five years everywhere in the Canadian news universe. However, we believe the fact that we are Number One among viewers in every local market we serve, except our new station in Vancouver, demonstrates that our local news remains relevant to the community. We would like to say that we do see this transaction creating opportunities across Canada.
2788 We would also like to point out that the incremental training and development benefits in our diversity in news and journalism of the future initiatives will certainly provide opportunity for CTV staff and for local programming reflection.
2789 We would like to thank CEP Local 720-M, which represents CTV's national news personnel. This local, which knows us well, filed a positive intervention letter. They said:
"Each of us takes great pride in the product we deliver to Canadians and we believe our product and reach can be enhanced with BCE as a partner. The BCE deal is a natural fit with no competing interests. A true symbiotic relationship combining two strong teams, each with a recognizable strong brand, and each with rich traditions. This combination is a winning formula that we feel will best serve the interests of Canadian viewers...."
2790 With regard to the CCSA, at the NetStar hearing we did give the Commission our assurance that we would accept them as the agent to bargain, and we have.
2791 We have sent them a draft master agreement, and negotiations are taking place. We are and will work very hard to come to an equitable solution.
2792 With respect to CanWest Global's intervention, we have the following points:
2793 Global suggested that $140 million for priority programming should be put into a fund. This would release CTV of any responsibility to ensure that any of the programs are actually produced. It would not guarantee any additional priority programs. It would not respond to the producers' need for simplicity and certainty. It would do nothing to create a breakthrough for Canadian programming. The massive support from the production community attests to the validity of our approach.
2794 Second, on incrementality. We understand, and we said this yesterday, that we must satisfy you that our proposals are incremental. Yesterday, we proposed an "expenditure monitoring mechanism". For greater certainty, we believe that that proposal can best be implemented by taking the monitoring mechanism applied to Global in paragraph 59 of Decision 20001-221, the CanWest Global/WIC Decision, and adapting that to reflect our proposal for priority programming, which begins in this broadcast year 2000-2001. We have attached the suggested wording as Schedule A.
2795 Global suggested that the Commission should impose an obligation on CTV to do nine hours of priority programming. We believe that this suggestion would reintroduce a level of regulatory inequity that the Canadian programming decision carefully removed.
2796 To be clear, and for the record, our commitment to ensure incrementality is both on hours and on dollars.
2797 First, our 175 hours of priority programming will be in addition to our existing requirement of eight hours of priority programming, and clearly logged as such.
2798 Second, the dollars spent on this program, $140 million, will be incremental to our 2000/2001 spending on priority programming, used as a base amount.
2799 We also note that this use of benefit monies by a licensee is consistent with past Commission decisions, including the news and other programming commitments made by CanWest Global in the WIC benefits, and our own CTV Canadian Literature Initiative and Signature Series. As Ivan has pointed out, the Commission can be proud of the legacy of wonderful television that has resulted from benefit initiatives, including The Sheldon Kennedy Story, Milgaard, and Dr. Lucille.
2800 The DGC did note that part of the benefits package substitutes for money for other funds. This is another point. This frees up the money from these funds for other projects. As a result, the money is clearly incremental to the entire broadcasting system.
2801 MR. GOURD: CanWest has also alleged that BCE will be able to engage in anti-competitive behaviour with respect to the availability of CanWest's content on the Internet. This is simply not the case. BCE's portal cannot possibly act as a gatekeeper, since it has no market power. In July of this year, Canadians spent only 1 per cent of their Internet time on sympatico.ca.
2802 No matter which ISP they buy their dial-up or high-speed Internet access from, customers will be able to access content on BCE's portals. And customers on BCE's ISP will be able to surf to CanWest content that is available on non-BCE portals.
2803 Further to the CCTA's intervention, yesterday Janet Yale said that the Commission's public notice for this proceeding invited public comment on cable ownership of specialty services. Nowhere in the public notice does one find any such invitation. Page 2 of the public notice clearly states that the Commission wished to discuss the impact of this transaction on the Canadian broadcasting system.
2804 We concur with Vice-Chair Colville, who noted, as it can be found on page 310 of the transcript, that:
"...there are many parties who are not a party to this proceeding who would have an interest in this issue that you have raised today."
2805 Therefore, if you there is to be a reconsideration of this policy issue, it is only fair that such parties be afforded an opportunity to comment in a separate proceeding.
2806 Nous sommes heureux de noter que l'Association canadienne des câblodistributeurs s'intéresse au code volontaire de Bell ExpressVu.
2807 Cependant, ce code a été conçu spécifiquement pour la distribution numérique. La distribution analogique soulève, toutefois, tel que l'Association le reconnaît, des questions additionnelles très différentes telles que le placement de canaux et l'assemblage.
2808 Tout code qui s'appliquerait aux distributeurs analogiques devrait évidemment traiter de ces sujets.
2809 Finally, with respect to Global's statement that the combination of CTV and BCE is somehow unique in the world, we respectfully disagree. As Gordon Ritchie noted this morning, we are a small country in a global landscape, which has large, integrated players. We must have globally competitive Canadian companies which can champion Canadian content both at home and around the world. Your approval of this transaction would help do that.
2811 MR. FECAN: I am given the privilege of a few points in final summation.
2812 First, I would say to you, Madam Wylie -- you said that you would like to visit L.A. -- you are welcome to join us there on our next buying trip any time, and bring the rest of the Panel with you, and see for yourself what goes on.
2813 Several have raised the issue of our size. Yesterday, to illustrate their point, Jim Shaw mentioned a Mike Bullard ad for ExpressVu at the Canadian Open. ExpressVu's agency, of course, hired Bullard and paid him independent of CTV. Yes, Mike is a CTV personality, but he also worked at one time for the phone company, which his fans know. It was a good idea and it proves Bell employees have a real sense of comedy and entertainment.
--- Laughter / Rires
2814 MR. FECAN: Bell ExpressVu bought the show, bought time in the show at the going rate; and, as Mr. Colville noted, Shaw also bought time in the show -- at the same rate, by the way.
2815 However, I am actually delighted that Jim brought this up because it gives me an opportunity to share a story with you.
2816 Last week's CTV's Canadian Millionaire aired to the highest audience for a Canadian entertainment show on CTV on record, 4.1 million viewers. The advertising bidding for the show was highly competitive and Bell was one of the bidders. Who wound up being the main sponsor who was the lifeline for dial-a-friend? Bell's competitor Telus. Why? Because they outbid everybody else, including Bell.
2817 If that doesn't say we are open for competitive business I don't know what does.
2818 On a personal note, I would like to say that it has been a long road for us, and by "us" I mean not only we at CTV but you at the Commission. From a small group of stations to the proud company that CTV is today, I believe we have together made an important and wonderful contribution to the Canadian broadcasting landscape.
2819 Along the way I have learned a lot, and through it all I have been and I continue to be grateful for your patience, fairness and guidance.
2820 Now one chapter closes and with your approval another one opens. BCE shares our vision, our passion, and our dream that the Canadian programming will ultimately drive our great Canadian broadcasting system. I really believe CTV will be in good hands. Therefore, it is with great hope and expectation for the future that I ask the Commission to approve BCE's acquisition of CTV.
2821 Madame Bertrand, Madame Wylie, Madame Noël, Ms Wilson and Mr. Colville, merci de tous vos efforts et pour votre patience. Merci aussi à l'excellent personnel du Conseil que nous apprécions beaucoup.
2822 Thank you.
2823 CHAIRPERSON OF THE COMMISSION: Thank you very much.
2824 If you will allow, I know that it has been not only a long two days but a long journey for you, but we still have some clarification, if you would accept to answer our questions.
2825 First, Vice-Chair Colville, and then Vice-Chair Wylie will have some.
2826 COMMISSIONER COLVILLE: Picking up on the issue we discussed yesterday. You have commented in your closing remarks, Ms McQueen, and I guess I have been thinking about this issue, of the $140 million and this whole issue about incrementality that we talked about yesterday and others have referred to.
2827 I take the points that you have raised today and also the point about being mindful about whether or not one would reintroduce a level of regulatory scrutiny that we were very careful to take away.
2828 I am just asking this, really, I guess, in terms of giving us something, another option to think about after the hearing is over and we have to wrestle with how best we deal with this whole question.
2829 So I note what you have said here, and perhaps, given that, I can predict what answer you might have to this suggestion.
2830 I noted also yesterday that when we were talking about the hours here, and we talked about eight hours plus, you had said, well, maybe eight and a half hours might be reasonable.
2831 So let me just put this to you. What if we simply imposed, next year, when you come back for your licence renewal but coming out of this exercise, we said we accept these benefits, we think this is a good idea and we expect them next year when you come back for your licence renewal, mindful that these benefits kick in the year after that in any event, that you would propose a condition of licence for CTV's priority programming that will be two parts. The first part will be expenditures, a minimum of $45 million a year -- that might have to be adjusted, mindful of a ramp-up for the first year or two, I recognize that -- and the second part would be nine hours per week, which includes repeats, perhaps no set percentage, mindful of the comments that you made yesterday, Mr. Fecan, about the market would dictate what you could deal with in terms of repeat.
2832 Now, in proposing that as an option to consider, I am mindful that it does reintroduce expenditure, but at the same time, we have to wrestle with, somehow or other, expenditures have to come into to this in any event. Whether we talk about it as $45 million or whether we talk about it as $140 million over seven years, we're still dealing with expenditures one way or another, and we're still going to be dealing with hours one way or another. It's either 175 hours or it's nine hours a week.
2833 So rather than get into the minutia of measuring, would this be a simpler way to deal with it, giving you the flexibility within that? I put that to you. What is your reaction?
2834 MR. FECAN: If you could give us a second to caucus. This is an important question.
--- Pause / Pause
2835 CHAIRPERSON OF THE COMMISSION: Could we help... We realize that we're coming with, you know... As you see, we're evolving. As Mr. Monty was saying yesterday, we're in a transition here.
2836 So maybe it would be better if Vice-Chair Wylie would ask her question too and maybe we can give you 10 minutes to kind of think about it and talk about it and come back.
2837 COMMISSIONER WYLIE: My question is not as serious -- it is serious.
--- Laughter / Rires
2838 COMMISSIONER WYLIE: It is serious, but I think it begins with a little story of being at Air Canada to travel, and two older ladies with an enormous suitcase are right in front of me, and the female attendant immediately calls her male colleague to help her lift this onto the belt, at which point, both of them fall backwards because the suitcase is empty.
--- Laughter / Rires
2839 COMMISSIONER WYLIE: The male attendant winks at them and said, "Going shopping, ladies?".
2840 I want to know, Mr. Fecan, if you do bring me to Los Angeles, whether I will need an empty suitcase.
--- Laughter / Rires
2841 MR. FECAN: That's between you and Canada Customs.
--- Laughter / Rires
2842 COMMISSIONER WYLIE: And Global.
--- Laughter / Rires
2843 COMMISSIONER WYLIE: To bring back all this programming, then, will be put on the shelf to prevent other broadcasters from airing it.
2844 The serious part of my question is what assurances are you prepared to put on the record with regard to a concern that you have expressed before yourselves in other circumstances that the shelf space in a sense of air time, because of the number of outlets or windows that you have, plus the purchasing clout, can, on the short term, at least, could equal buying clout that may be punishing in the early years but may give you an edge in the mid years, depending on the term that you decide upon in your boardroom.
2845 So what assurances are you prepared... You expected assurances before. What assurances can you give now? You have heard one of the large broadcasters in the country express that concern and I think advance some idea about what would provide comfort.
2846 MR. FECAN: I didn't...
2847 COMMISSIONER WYLIE: I notice it's not addressed in your rebuttal.
2848 MR. FECAN: I didn't actually hear them with any ideas of how to actually regulate it.
2849 COMMISSIONER WYLIE: It wasn't that good.
2850 MR. FECAN: Yes. And I note that only a broadcaster that expressed concern. The smaller broadcasters such as CHUM or the Craigs or others have not expressed any concern whatsoever.
2851 So what I would suggest to you is, I think, you were very wise and you gave me a frisson by playing back my words to me from Vancouver, and clearly, we have a concern about the effective twins that CanWest has. CanWest has a concern about what they imagine to be Mr. Monty's largesse, which I don't think is justified. And I think there's a mutual, an interesting balance there. I think both of us will work hard to make sure that the balance is maintained because I don't think the consequence of not maintaining that balance would be helpful and, shorter or long-term, frankly to either company or the system.
2852 COMMISSIONER WYLIE: If you will recall -- and hopefully, I am translating correctly what they said. They wanted some good will assurance from you, the words of which we could repeat in our decision as an expectation of your recognition of the problem. It took a while to come, but there are some words at the end that could be useful.
2853 MR. FECAN: And I think that would be really appropriate to discuss it at a group licensing hearing where we're both in front of you, because I think whatever words there are, I should be involved.
2854 COMMISSIONER WYLIE: We are now looking at a transfer and it raises some concerns which are legitimate and it, I think, is also appropriate to ask for reassurances in that...
2855 MR. FECAN: You have our reassurance to be responsible business people. And I note that the group...
2856 COMMISSIONER WYLIE: Tempered by the regulatory environment.
2857 MR. FECAN: And I would remind everyone, of course, that the group licensing hearing will be before the buying trip, which is the next opportunity to buy.
2858 COMMISSIONER WYLIE: When is that?
2859 MR. FECAN: May.
2860 COMMISSIONER WYLIE: So that I can get my suitcase.
2861 MR. FECAN: The last two weeks of May.
--- Laughter / Rires
2862 COMMISSIONER WYLIE: I am to leave with a very small suitcase. No shopping!
--- Laughter / Rires
2863 COMMISSIONER WYLIE: Well, perhaps between your words and mine, we'll have something for the decision if we were to approve this application. Thank you.
2864 MR. FECAN: Life is full of unrealized fears!
2865 COMMISSIONER COLVILLE: Mr. Fecan, Ms McQueen, I have been presuming, perhaps incorrectly, that the priority programming, the $140 million was going to be prime time and that, when we talked about the half-hour yesterday, that that was a bit of a confirmation for me. Was I correct in my understanding?
2866 MR. FECAN: Absolutely.
2867 COMMISSIONER COLVILLE: If I am not correct, then I understand that for other reasons, it might be problematic, but it would be if I was incorrect on that point too.
2868 MR. FECAN: It is absolutely prime time.
2869 COMMISSIONER COLVILLE: It is prime time. Thank you.
2870 CHAIRPERSON OF THE COMMISSION: We will come back in 10 minutes. Thank you.
--- Upon recessing at 1723 / Suspension à 1723
--- Upon resuming at 1735 / Reprise à 1735
2871 LA PRÉSIDENTE: Alors on reprend.
2872 I just wanted to make clear that the question is meant to help us go through the analysis and understand, and I have said it many times in other occasions there are only indiscreet questions.
2873 The answers are only the indiscreet part, so it's really for your own judgement and knowing your proposal that you are asked about that question.
2874 MR. FECAN: Thank you.
2875 You can imagine this is a very important question to us, and you can imagine it is a very important question to our shareholder.
2876 So we haven't had a lot of time -- we have had 10 minutes -- and I guess we are balancing a bunch of things. I mean, we are balancing on one hand the dream that we have and we hope -- we along with the various intervenors -- have convinced you of the validity of the dream and even the advertisers are saying, "Yes, if you make that breakthrough it's going to work". We are balancing that against your need, and we understand your need, to be comfortable and show that we have demonstrated that it's incremental and we appreciate that you have that duty. But we also have a duty to ensure that our business model in our company would not be un-fundamentally uncompetitive to our major competitor and we need to balance these various things and they all have an awful lot of validity because I don't know that the system benefits by making us fundamentally uncompetitive with CanWest if that is what all the good intention ends up bringing us to.
2877 So here our thought in the same spirit of the question was asked, and we have tried to be as thoughtful as we can in the time allotted. You imposed a monitoring mechanism for Global on their expenditures in your decision on the WIC acquisition, and in the spirit of fairness we feel that we are as trustworthy and that the same should be applicable here. We have proposed wording which we think is fair.
2878 We have a problem with a COL for two reasons, and I don't know that you would be particularly surprised, but I feel compelled to tell you precisely, and it is as you would expect, because it introduces a level of re-regulation which the Canadian programming policy hearing carefully removed, and on creative grounds, frankly, because we are not sure that the expenditure of hours will be spread exactly evenly over the 7 years. I mean, some years there may be more, some years there may be less, and we are trying to let very little get in the way between the creative and getting on air and I just don't know that it's helpful to lock step it that particular way.
2880 MS McQUEEN: I guess, when we came before you with 175 hours and the notion that we could make some breakthrough in the financing model, we had to have a lot of things that really worked differently than they work now, and one of them, I guess, is the ability to throw things out that don't work and to keep the things that do work, and that is why we are very, very concerned about the 9 hours versus the 8.5 hours.
2881 Yes, there is a business reason for not doing the half hours, and that is a big time business reason. It means that we have to take extremely lucrative programming out of our schedule to replace it with programming that has not been as lucrative. That is the business reason, but also the creative reason is that if we are really going to turn this around and give viewers the best possibilities out of this 175 hours, we have to be free to say, "That didn't work, it's going in the dustbin. You will never see it again".
2882 We also creatively don't want to have to say to a producer, "You must deliver this on deadline even though you have good creative reasons for being three months late or six months late. But you must deliver this on deadline because we have committed, as a condition of licence, that we must have so many hours at a specified time". That kind of takes away from the creative ability.
2883 I guess what we are saying is that there are big time business reasons, but also to make this kind of proposal work, we have to be able to have a little bit less concern that a condition of licence gives us, because a condition of licence is the highest form of discipline that you can impose. It is kind of capital punishment, not in a bad way -- not in the bad way of capital punishment, but --
--- Laughter / Rires
2884 But that is the most draconian thing you can impose, and we have to take it absolutely seriously and we can't expect your indulgence for whatever good reason we may have of not delivering.
2885 So that is what scares us about a condition of licence. Not that we have no objection to any kind of expectation of a delivery mechanism or a monitoring mechanism or a reporting mechanism, or anything else that you want to impose on us. We are not afraid of that. But we are very concerned about restrictions on the ability to do the best we can to deliver as a partnership between the creative community and the broadcaster the best possible Canadian programs which will achieve something that will make a difference for a long time.
2886 MR. FECAN: So in the spirit that the question was asked, we would accept an additional monitoring mechanism on the hours which would come out to an additional half hour a week averaged over the licence terms so in the R&D thing we don't have to repeat something that doesn't work.
2887 But the average is really critical to us accepting an additional monitoring mechanism. We are trying to be helpful and assure you of our desire to change the way things work and make a breakthrough.
2888 We know you have a duty and maybe that will be helpful in fulfilling your duty.
2889 COMMISSIONER COLVILLE: That's fine. I mean, I appreciate your answer and that's helpful and I would rather have it now than be debating this back at the ranch and wondering what the answer would have been, or whatever.
2890 I guess I am to understand then that on a going forward basis, CTV would be spending, if we take this year's numbers, $25 million on 8 hours of programming, and on average going forward another $20 million on the other half hour.
2891 MS McQUEEN: I know it sounds extraordinary, but remember that is the 8 hours contains repeats, the 8 hours can possibly contain programming that is not as costly, but what we really are committing to doing -- and Peter Grant pointed it out -- this is $800,000 an hour that we are putting into these programs versus $200,000 an hour that we would put into our normal licence fee, and the hope is that this, as we have said, is a research and development project which will allow us to give creators all the tools they can need to make the best possible programs and to do that in close connection with us.
2892 And yes, it is a lot of money for an extra half hour a week, but it is an extra half hour a week. It's 25 hours a year in 175 hours. It's not inconsiderable. It is a big bulk of Canadian programming.
2893 COMMISSIONER COLVILLE: That's fine. I have my answer.
2894 Thank you very much.
2895 CHAIRPERSON OF THE COMMISSION: Well, that concludes the time we spent together.
2896 Thank you very much. It has been very helpful and we know you have been working very hard and we can assure you we will be working hard too and debating and doing our analysis and rendering the decision as soon as possible.
2897 MR. FECAN: We appreciate that.
2898 Thank you very much.
2899 CHAIRPERSON OF THE COMMISSION: Thank you.
2900 Have a good evening and a good night.
--- Pause / Pause
2901 LA PRÉSIDENTE DU CONSEIL: Madame la Secrétaire, pourriez-vous nous présenter la prochaine phase de notre audience, s'il vous plaît?
2902 Mme POIRIER: Nous passons maintenant à la demande présentée par 3649091 Canada Limitée, une filiale à part entière de CanWest Global Communication Corporation qui souhaite acquérir les actifs de l'entreprise de programmation de télévision CJNT-TV Montréal, appartenant à Raymond Chabot Inc., syndic de la succession de CTEQ Télévision inc., en faillite, et elle demande une licence de radiodiffusion pour poursuivre l'exploitation de l'entreprise.
2903 La requérante propose également de modifier ou de supprimer certaines conditions de licence, et elle demande en plus que son service de programmation soit distribué dans tout le Québec sur une base obligatoire à un volet numérique des entreprises de distribution de radiodiffusion de Classe 1 et de Classe 2, ainsi que des entreprises de distribution par SRD et SDMM.
2904 I would also like to note for the record that CanWest Global in respect to the CJNT application has filed at the beginning of the week additional information, namely a new market study performed by Média Vision that more adequately represents the proposed programming of French language foreign programs and also revised financial projections.
2905 They have been asked to provide intervenors with copies which they did. A copy is also available in the hearing examination room and on public file.
2906 Intervenors wishing to comment on this additional material may file a written comment by Tuesday, 26 September, with the Commission, copying the applicant. CanWest Global. The applicant will have the right to file a written reply with the Commission, copying the intervenors, no later than Friday, 29 September.
2907 Do you agree with that?
2908 MR. O'FARRELL: Yes, we do.
2909 MS POIRIER: All right. You can go ahead with the presentation.
2910 Thank you.
PRÉSENTATION / PRESENTATION
2911 M. O'FARRELL: Merci. Bonjour, Madame la Présidente. Bonsoir.
2912 LA PRÉSIDENTE DU CONSEIL: Bonsoir.
2913 M. O'FARRELL: Mesdames et messieurs les conseillers et membres du Conseil, mon nom est Glenn O'Farrell. Je suis vice-président principal, services spécialisés et nouveaux médias de Global Television Network.
2914 Permettez-moi tout d'abord de vous présenter notre équipe. A ma droite, Charlotte Bell, Directrice aux relations publiques et aux affaires réglementaires; à sa droite, Véronique Verthuy, qui est responsable de la programmation de CJNT; à ma gauche, Patrick O'Hara, Directeur général de Global Québec, et à sa gauche Pierre-Louis Smith, Consultant. Derrière moi, Gerry Noble, Président et Chef de la direction de Global Communications Limited. A sa droite, Beverley Oda, Consultante pour le fonctionnement, et la programmation d'une station à caractère ethnique n'a pas de secret. A la gauche de Gerry, Gilbert Marin, Vice-Président Média Vision qui a réalisé l'étude dont on vous a parlée. Et enfin, Greg Treffy, notre Directeur du développement chez Global.
2915 Madame la Présidente, we are here today to seek Commission approval for the transfer of ownership of CJNT, Montreal's ethnic over the air station.
2916 As the Commission is well aware, CJNT has suffered numerous setbacks. It has been plagued with financial hardships, compounded by shareholder disputes, and has had more than its share of litigation.
--- Pause / Pause
2917 MR. O'FARRELL: In the end, the station's trouble led it to bankruptcy, more hardships still. In our view, the unfortunate reality of the situation is that unless the station can turn to an incumbent broadcaster in the Montreal market that is prepared to enthusiastically dedicate infrastructure and expertise to rescue CJNT and offer long term stability, the station will cease to exist.
2918 We find ourselves here today as a byproduct of having inherited WIC's former ownership interest in the station on a rescue mission, to revitalize CJNT TV. Why, you might say? Well, because we strongly believe that this station deserves a second chance.
2919 Before addressing the merits of our application, allow me to step back for a few moments and talk about the past.
2920 CJNT's financial difficulties are not an isolated phenomena in the history of ethnic broadcasting in this country. In fact, the history of ethnic broadcasting is a story marked throughout the years by financial hardship, followed by successful rescue missions. In fact, even CFMT in Toronto, the biggest ethnic market in Canada, was on the verge of receivership back in 1985 when Rogers Broadcasting bought the station.
2921 While there have been difficult times for ethnic programming services, we believe that their relevance to the Canadian broadcasting system cannot be overlooked.
2922 Our system has and should continue to contribute to the development of Canada's multicultural character by promoting social harmony, acceptance, understanding and the exchange of knowledge, culture and beliefs.
2923 In our view, the revitalization plan we have submitted for CJNT will offer viewing audiences in Quebec relevant and attractive ethnic programming that will continue in that tradition, as stated in the Broadcasting Act in which we firmly believe.
2925 MR. NOBLE: Thanks, Glenn.
2926 While we believe that it will be a significant task to revitalize this important station, we also strongly believe that CJNT has its place in the Montreal market and in the Canadian broadcasting system.
2927 No television station has gone black during the course of the history of the Canadian broadcasting system and having inherited WIC's interest in the station, we feel it is our responsibility to do what we reasonably can to ensure that CJNT won't be the first one to fall.
2928 CanWest has a rich tradition of providing successful rescue missions here and abroad, transforming ailing stations into vibrant television operations. The Commission knows this story well. We believe we can have the same success with CJNT.
2929 Furthermore, we believe Montreal deserves a solid, financially viable, ethnic broadcast service that provides quality programming to serve the needs of its ethnic population. Ethnic groups represent more than 350,000 people in Montreal. The ethnic communities are part of the demographic growth of the market. They represent an important and vital part of the future of the Montreal region.
2930 That is why we feel it is important and incumbent on us to provide this rescue mission in order to ensure the survival of CJNT's television service, but this won't be an easy task given the history of the station.
2931 I would now ask our Global Québec Station Manager, Patrick O'Hara, to tell you how we intend to proceed.
2932 MR. O'HARA: Thank you, Gerry.
2933 Our plan to revitalize CJNT is twofold. First, we will provide the station with all the possible operational synergies available through Global Québec's infrastructure to make it a more economic operating proposition.
2934 Second, if approved by the Commission, we will introduce a programming schedule that, while remaining predominantly ethnic, will also include conventional programs, up to 40 per cent in French and in English, this to help the station find new sources of revenue.
2935 Madame la Présidente, from access video archive materials to modern laptop editors, from digital broadcast facilities and production knowhow to promotional and sales credibility, the plan to harness the synergy between Global Québec and CJNT and revitalize the licence will be demanding, but feasible.
2936 Here are some of the highlights on how Global Québec will foster the success of this challenging project.
2937 Global Québec's infrastructure spans the province with a full complement of studios and field production equipment in Quebec City, Sherbrooke and Montreal. It is our commitment to make available our full range of broadcast facilities, from remote microwave truck production to electronic graphics post-production, and all on a daily basis.
2938 New production values will enhance programming and, consequently, audience appeal will increase, but Global Québec's undertaking to provide services to CJNT will go beyond the role of mere equipment supplier. We understand that the key ingredient to enhancing ethnic programming is not just access to the hardware, but the expertise, the producers, directors and crews bring to the creative process.
2939 It is this production knowhow that Global Québec will bring to the revitalized service, an in-house experience resource readily available and dedicated to the success of this project.
2940 Global Québec will also initiate a strategic internship program designed to introduce talented ethnic producers and directors to our energetic environment. Working alongside our Global Québec staff, we will offer ethnic producers and directors a hands-on opportunity to enhance their creative production skills from our staff in the field.
2941 In addition, mentoring will help further development by introducing ethnic production staff to establish Quebec independent producers. These seasoned producers are currently commissioned to produce a minimum of 14 one hour program specials on a yearly basis for Global Québec. They will host creative workshops for the ethnic production communities, helping them discover new production methods and values.
2942 Mme BELL: Comme Patrick l'a mentionné un peu plus tôt, le deuxième pôle autour duquel s'articule notre plan de relance concerne la programmation offerte by CJNT. Nous sommes d'avis que pour survivre et contribuer à l'épanouissement du système canadien de radiodiffusion, CJNT doit bénéficier, tout comme CFMT à Toronto, d'un assouplissement de ses conditions de licence.
2943 Il est impératif, en effet, que CJNT puisse explorer de nouvelles sources de revenu afin de maintenir et d'améliorer la qualité des émissions à caractère ethnique. Pour ce faire, nous proposons d'intégrer à la grille de CJNT une composante d'émissions dites conventionnelles en anglais, bien sûr, mais aussi en français, de façon à mieux traduire le caractère spécifique du marché de Montréal.
2944 Je vais maintenant céder la parole à Véronique Verthuy pour qu'elle vous explique plus en détail nos projets concernant la nouvelle grille de programmation à caractère ethnique que nous proposons pour la station.
2945 Mme VERTHUY: Merci, Charlotte.
2946 Bonjour, Madame la Présidente, membres du Conseil.
2947 Tout d'abord, j'aimerais souligner que j'oeuvre au sein de CJNT depuis fort longtemps. Et à ce titre, j'ai été témoin des efforts consentis sans succès pour assurer un service de qualité financièrement viable en fonction des conditions d'exploitation actuelles de la licence.
2948 Il faut dire que, par comparaison, le marché de Toronto, dont la population ethnique est plus du double de celle de Montréal, soutient actuellement une station à caractère ethnique, CFMT, qui dessert un nombre nettement inférieur de communautés à celui de CJNT, soit 18 groupes ethniques en 15 langues.
2949 C'est pourquoi, en plus de la demande de transfert de propriété, le nouvel acquéreur propose de convertir CJMT en une version modifiée du modèle développé par CMFT à Toronto, afin de mieux refléter le caractère spécifique du marché montréalais et québécois.
2950 Avec le temps nous sommes convaincus que la valeur de notre grille, de nos émissions techniques, produites tant part des producteurs indépendants de Montréal que celles produites par la station elle-même, feront leur marque auprès de nos téléspectateurs.
2951 Ainsi, nous serons en mesure de mettre en valeur des émissions porteuses produites ici pour les besoins culturels des auditoires ethniques d'ici. Enfin, grâce à la collaboration de Global Québec, nous pourrons miser sur un meilleur encadrement pour nos artisans afin que la station puisse servir de tremplin et d'incubateur pour développer le talent de producteurs compétents émanant du milieu des communautés ethnoculturelles, et en bout de ligne mieux servir nos téléspectateurs, ce qui est finalement le but ultime de cette démarche.
2952 M. SMITH: En ce qui a trait à la programmation dite conventionnelle de la grille que nous proposons pour CJNT, nous croyons qu'il est important que cette composante reflète la réalité du marché montréalais où la vaste majorité de la population est d'abord francophone.
2953 En ce sens, nous sommes d'avis qu'une transposition intégrale du modèle de CFMT, qui recourt exclusivement aux émissions américaines en version originale, ne serait pas appropriée aux besoins et à la spécificité du marché montréalais.
2954 C'est pourquoi Global a plutôt l'intention d'offrir un équilibre entre émissions de langue anglaise et de langue française de façon à mieux traduire les particularités linguistiques et culturelles qui caractérisent Montréal.
2955 Par exemple, en offrant au public ethnoculturel la possibilité de découvrir ou de redécouvrir des émissions québécoises en français qui traitent de leur réalité, comme Ces enfants d'ailleurs ou Jasmine, CJNT assurera un rôle important dans la création d'une meilleure compréhension entre les membres des communautés ethniques et la communauté francophone.
2956 Nous sommes convaincus que cette approche unique et originale, transposée dans le cadre d'une station à caractère ethnique, est respectueuse du contexte propre à la métropole du Québec.
2957 Enfin, l'ajout de programmation conventionnelle à CJNT ne nuira pas à la viabilité des autres acteurs du système de radiodiffusion oeuvrant à Montréal puisque son impact sera minime et sera réparti de façon équitable entre les marchés publicitaires francophone et anglophone.
2958 Cette démarche de programmation sert donc, selon nous, l'intérêt public et devrait être approuvée par le Conseil.
2959 MR. O'FARRELL: Madame la Présidente, we appear before you today on this application without any pretence as to our unique ability to make this station successful, nor do we entertain any false sense of the magnitude of the task ahead.
2960 While we inherited WIC's position, ownership position in this station, albeit as a result of a larger transaction, we have devoted considerable attention and invested significant resources to the effort of sustaining this Montreal ethnic station. With the help of our advisory committee, consisting of its Chair, Bev Oda, the Honourable John Caccia, Cynthia Lamb, Farese Khouri, and Jonathan Goldbloom, we are confident that it can be done.
2961 In a word, we are pathological believers in rescue missions. Our corporate track record has been largely defined by rising to challenges that others have written off. We fundamentally believe that this station deserves another chance. Granted we were in the obvious minority holding that view as evidenced by the fact that the trustee in bankruptcy, Raymond Chabot, received only one bid on the assets of CJNT -- our own -- yet we are optimistic because it would be, in our view, most unfortunate not to give the CJNT dream a second chance.
2962 Finally, please allow me to thank the 300 or so supporting intervenors for their encouragement, which we sincerely appreciate and will obviously need.
2963 We welcome any questions you may have.
2964 Thank you.
2965 LA PRÉSIDENTE DU CONSEIL: Merci beaucoup pour cette présentation.
2966 As we have informed earlier on this afternoon, we all need a rest and we will be coming back tomorrow morning with a fresh start on the questioning to really understand all the ramifications of your proposal -- et rencontrer tous les intervenants qui ont des intérêts particuliers à venir poursuivre le dialogue avec le Conseil.
2967 Alors à tous une bonne soirée et à 9 heures demain matin.
2968 M. O'FARRELL: Si vous me permettez juste une information pour le dossier pour vous, comment dirais-je, éclairer ce soir. Vous savez qu'il y avait beaucoup de litiges entre les anciens actionnaires de cette compagnie. Nous voulons tout simplement vous informer qu'il y a eu un règlement hors cour final vendredi soir à 10 heures.
2969 LA PRÉSIDENTE DU CONSEIL: Merci de l'information.
2970 Alors bonne soirée et à demain matin. A 9 heures nous reprendrons les travaux de l'audience.
--- L'audience est ajournée à 1810, pour reprendre
le jeudi 20 septembre 2000 à 0900 / Whereupon the
hearing adjourned at 1810, to resume on Thursday,
September 20, 2000 at 0900