TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES AVANT

                CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                          SUBJECT:

REVIEW OF THE OVER-THE-AIR TV POLICY /

EXAMEN DE CERTAINS ASPECTS DU CADRE RÉGLEMENTAIRE

DE LA TÉLÉVISION EN DIRECT

HELD AT:                              TENUE À:

Conference Centre                     Centre de conférences

Outaouais Room                        Salle Outaouais

Portage IV                            Portage IV

140 Promenade du Portage              140, promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

November 27, 2006                     Le 27 novembre 2006

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

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

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

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

           REVIEW OF THE OVER-THE-AIR TV POLICY /

     EXAMEN DE CERTAINS ASPECTS DU CADRE RÉGLEMENTAIRE

                 DE LA TÉLÉVISION EN DIRECT

BEFORE / DEVANT:

Michel Arpin                      Chairperson / Président

Rita Cugini                       Commissioner / Conseillère

Richard French                    Commissioner / Conseiller

Elizabeth Duncan                  Commissioner / Conseillère

Ronald Williams                   Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Chantal Boulet                    Secretary / Secrétaire

John Keogh                        Legal Counsel /

Valérie Lagacé                    Conseillers juridiques

Shelley Cruise

Peter Foster                      Hearing Manager /

Gérant de l'audience

HELD AT:                          TENUE À:

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

Portage IV                        Portage IV

140 Promenade du Portage          140, promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

November 27, 2006                 Le 27 novembre 2006

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

CBC/Radio-Canada                                    9 /   45

TQS                                                98 /  514

CanWest MediaWorks Inc.                           211 / 1088

CTV Inc.                                          335 / 1723

                 Gatineau, Quebec / Gatineau (Québec)

‑‑‑ Upon commencing on Monday, November 27, 2006

    at 0900 / L'audience débute le lundi

    27 novembre 2006 à 0900

LISTNUM 1 \l 11                THE CHAIRPERSON:  Order, please.

À l'ordre, s'il vous plaît.

LISTNUM 1 \l 12                Well, good morning, ladies and gentlemen and welcome to the public hearing.

LISTNUM 1 \l 13                My name is Michel Arpin, I am the Vice Chair of Broadcasting for the CRTC.  I will be presiding over this hearing.

LISTNUM 1 \l 14                Joining with me on the panel are, to my right, my colleagues: Richard French, Vice Chair of Telecommunications and Rita Cugini, Regional Commissioner for Ontario.  And to my left, Elizabeth Duncan, Regional Commissioner for the Atlantic and Ron Williams, Regional Commissioner for Alberta and the Northwest Territories.

LISTNUM 1 \l 15                The Commission team assisting us, including hearing manager Peter Foster who is also Manager of Conventional Television; John Keogh, Valérie Lagacé and Shelley Cruise, legal counsel and Chantal Boulet, hearing secretary.  Please speak with Mrs Boulet if you have any questions with regard to hearing procedure.

LISTNUM 1 \l 16                During this hearing, we will be discussing a number of issues as part of our review of the regulatory framework for over‑the‑air television in Canada.

LISTNUM 1 \l 17                Le cadre réglementaire qui en résultera devra contribuer au maintient de l'équilibre entre les objectifs sociaux et culturels énoncés dans la Loi sur la radiodiffusion et les conditions favorisant la rentabilité du secteur privé.

LISTNUM 1 \l 18                Puisque les grands groupes de propriété de la télévision en direct devront prochainement soumettre leurs demandes de renouvellement de licence, les résultats de cet examen leur permettront de les préparer, en tenant compte des enjeux qui leur sont communs largement motivés par des changements qui surviennent dans leur industrie.

LISTNUM 1 \l 19                D'entrée de jeu, je tiens à remercier tous ceux et celles qui nous ont fait part de leurs observations.  Votre participation à cette instance est primordiale pour aider le Conseil à réviser son cadre réglementaire sur la télévision en direct afin que nous soyons en mesure de faire face aux nombreux défis actuels et futurs.

LISTNUM 1 \l 110               Since the Commission adopted its policy framework for Canadian Television in 1999, there have been a number of changes in the environment in which the over‑the‑air television stations operate.  In particular, this industry is experiencing an unparalleled technological revolution.

LISTNUM 1 \l 111               Television programming is now offered on different platforms.  Canadians are quickly adopting high definition television and the need to make the transition to digital technology which promises to be costly is becoming more and more of a pressing issue.

LISTNUM 1 \l 112               The economic factors governing the industry are also changing, just like the production of programming and the expectations of citizens and television consumers with regard to television products.

LISTNUM 1 \l 113               Moreover, since 1999, there had been a large increase in the diversity of service offered to Canadians.  The number of Canadian specialty pay paper view and video on demand services as a significant growth and has the availability of foreign television services.

LISTNUM 1 \l 114               The audience share of specialty and paid services has been increasing steadily in recent years, reaching a level almost equal to that of conventional television.  The wide array of services offered also reflects the country's growing cultural diversity.

LISTNUM 1 \l 115               D'autre part, pour contrer la tendance à la baisse des dramatiques canadiennes télévisées qui se dessinaient, le Conseil a adopté des mesures incitatives pour encourager leur production et leur écoute.

LISTNUM 1 \l 116               Comme indiqué par le Conseil, lorsque ces mesures furent annoncées, leur impact fera l'objet d'un examen périodique.  Dans l'ensemble, l'Industrie canadienne de la télédiffusion en direct est demeurée rentable particulièrement dans les grands centres.

LISTNUM 1 \l 117               On observe, toutefois, une fragmentation de l'auditoire et une pression exercée par les nouvelles technologies sur les messages publicitaires traditionnels qui demeurent la principale source de revenus de la télévision en direct.

LISTNUM 1 \l 118               Face à ces nombreux bouleversements, nous devons nous préparer à l'avenir.  À cet égard, je souligne que les informations fort utiles soumises par les intervenants en réponse au Décret du Gouverneur en conseil émis conformément à l'Article 15 de la Loi sur la radiodiffusion font partie du dossier public de cette instance.

LISTNUM 1 \l 119               Le Conseil est donc d'avis que cette revue aidera à mieux définir les enjeux et les moyens d'assurer le succès de l'Industrie de la télévision en direct, tout en se mettant au diapason de l'évolution des besoins des téléspectateurs canadiens.

LISTNUM 1 \l 120               The objectives of this proceeding, therefore, are two and sure that over the year television licensees contribute in the most effective manner possible to the production, acquisition and broadcast of high quality Canadian programming that attracts increasing numbers of viewers.

LISTNUM 1 \l 121               Provide Canadian over‑the‑air television licensees with greater clarity regarding regulations that affect certain costs and revenue so that they are in position to propose maximum contribution to the production, acquisition and broadcast of high quality Canadian programming.

LISTNUM 1 \l 122               Examine options for the most effective means of delivering Canadian digital H.D. television to Canadians.

LISTNUM 1 \l 123               Examine the current and future economic status of small market television stations and review overall approach to close captioning.

LISTNUM 1 \l 124               Finalement, nous notons que certaines parties ont soulevé des enjeux qui débordent la portée de la présente instance.  Par exemple, nous avons reçu des commentaires traitant de la vidéo description et des incitatifs pour les dramatiques canadiennes.

LISTNUM 1 \l 125               Le Conseil traitera de ces enjeux lors des audiences de renouvellement de licence.

LISTNUM 1 \l 126               Following this public hearing and after listening to the statements made during the hearing, parties will have the opportunity to file brief final written comments.  These submissions must be no longer than ten pages in a 12 point font or larger and must be filed no later than December 20th 2006.

LISTNUM 1 \l 127               Before we begin the hearing, I will ask the hearing secretary, Mrs. Chantale Boulay, to explain the procedures we will be following.  Ms Boulay.

LISTNUM 1 \l 128               LA SECRÉTAIRE:  Merci, monsieur le président.

LISTNUM 1 \l 129               Nous aimerions souligner quelques points d'ordre pratique qui contribueront au bon déroulement de cette audience publique.

LISTNUM 1 \l 130               Firstly, the simultaneous translation is available during the hearing.  Receivers are available from the technician at the back of the room.  The English translation is found on channel 7 and the French on channel 8.

LISTNUM 1 \l 131               Veuillez noter que l'interprétation gestuelle sera également disponible durant cette audience.  Par contre, je demanderais à toute personne qui désire avoir recours à ce service de m'en aviser afin d'en informer les interprètes.

LISTNUM 1 \l 132               When you are in the hearing room, we would ask you to please turn off your cell phones, beepers and blackberries as they are unwelcome distraction and they cause interference on the internal communication systems used by our translators.  We will appreciate your cooperation in this regard throughout the hearing.

LISTNUM 1 \l 133               We expect the hearing to take approximately one and a half week.  Starting tomorrow, hearing will begin at 0830 a.m. and finish approximately at 1900 or 1930 p.m.  We will take one hour for lunch and a break in the morning and in the afternoon.

LISTNUM 1 \l 134               Given the number of participants and the scope of the issues to be discussed, it may be necessary to continue the hearing beyond this time in the evening.  We will let you know of any schedule changes that may occur.

LISTNUM 1 \l 135               Pendant toute la durée de l'audience vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen qui se trouve à la Salle Papineau située à l'extérieur de la salle d'audience, à votre droite.

LISTNUM 1 \l 136               Tel qu'indiqué dans l'ordre du jour, le numéro de téléphone de la salle d'examen est le : 819‑953‑3168.

LISTNUM 1 \l 137               I would like to point, given the number of participants in the room this morning, there are extra chairs in the examination room for those who wish to sit.  You won't be able to see the hearing, but you will definitely be able to hear the proceedings.

LISTNUM 1 \l 138               Une transcription des comparutions quotidiennes sera affichée sur le site internet du Conseil peu après la fin de l'audience.  Les personnes qui désirent acheter des transcriptions peuvent s'adresser au sténographe qui se trouve à la table à ma droite, durant la pause ou directement auprès de la compagnie Médiacopie.

LISTNUM 1 \l 139               For the record, an additional study on satellite services has been added to the public file for these proceedings.

LISTNUM 1 \l 140               In addition, Canwest Mediaworks Inc. has filed updated figures with respect to the report they have submitted entitled "An analysis of the over‑the‑air television market in Canada" and that information was filed in order to account for the latest data from Statistic Canada.

LISTNUM 1 \l 141               These documents have been posted on the Commission's web site and copies are available in the examination room.  If parties wish to comment on the documents, they may do so in their final written submissions.

LISTNUM 1 \l 142               Finally, the Canadian Music Publishers Association has informed us ‑‑ has informed the Commission that they will not be appearing at this hearing.

LISTNUM 1 \l 143               We will now proceed with the presentations in the order of appearance set out in the agenda.  Each participant will be granted a specific time to make its presentation.  Questions from the Commission will follow each presentation.

LISTNUM 1 \l 144               J'inviterais maintenant le premier participant, CBC/Radio‑Canada, à faire sa présentation.  Monsieur Robert Rabinovitch comparaît pour le participant.  Il nous présentera ses collègues, après quoi vous disposerez de 15 minutes pour votre présentation.  Monsieur Rabinovitch.

PRÉSENTATION / PRESENTATION

LISTNUM 1 \l 145               M. RABINOVITCH:  Monsieur le président, messieurs et mesdames les conseillers, je me présente.  Robert Rabinovitch, président et directeur général de CBC/Radio‑Canada.

LISTNUM 1 \l 146               J'ai à mes côtés aujourd'hui, Sylvain Lafrance, vice‑président principal des services français et Richard Stursberg, vice‑président principal de CBC Television ainsi que Ray Carnovale, vice‑président et chef de la direction technologique et Michel Tremblay, vice‑président de la stratégie et au développement commercial.

LISTNUM 1 \l 147               Nous sommes très heureux d'être ici aujourd'hui pour présenter les commentaires de CBC/Radio‑Canada dans le cadre de cette importante audience sur l'avenir de la télévision conventionnelle.  Nous vous avons distribué des copies du document présentant nos commentaires ainsi que de la documentation de références que j'ai utilisées au cours de mon exposé.

LISTNUM 1 \l 148               I wish to state at the outset that our September 27th filing and today's interventions focus solely on your particular call for these hearings on convention television policy.  We have not used this as an opportunity to foray into other important issues.

LISTNUM 1 \l 149               Your determinations in this proceeding are extremely important for the entire Canadian Broadcasting System as conventional television continues to be the cornerstone of that system.

LISTNUM 1 \l 150               At CBC/Radio‑Canada, we are proud to be a part of this sector and to have contributed to its historic success.  This success has been the product of both the public and private elements of our industry working under the Broadcasting Act and your direction for its common public policy objectives.

LISTNUM 1 \l 151               This combination of public and private interests to promote common goals is fundamental to our Canadian Broadcasting System and is enshrined in the Broadcasting Act.

LISTNUM 1 \l 152               And as I am sure you are well aware, in order to pursue these goals, each one of us in this industry, whether we are public or private broadcasters, rely on a business model that is driven by a significant financing from both government and advertising sources.

LISTNUM 1 \l 153               So, how do we measure this public private success story for the Canadian conventional television industry?  The facts speak for themselves.  Each week throughout the year, 90 per cent of Canadian T.V. viewers tune into Canadian conventional t.v. station.

LISTNUM 1 \l 154               Conventional television is the face of local television, the home of original Canadian drama and entertainment programming and the primary source of local news and public affairs.

LISTNUM 1 \l 155               As you have seen from our September 27th filing, conventional television broadcasters, both public and private, are now responsible for the creation and first window airing of nearly all of the most popular Canadian series and specials shown in prime time.

LISTNUM 1 \l 156               And let us not forget the crucial role of conventional broadcasting in providing Canadians with international news and current affairs and a Canadian perspective and interpretation of news and current affairs.

LISTNUM 1 \l 157               In addition, we are the major force in the funding of all original Canadian television programming.  We provide 75 per cent of total financing to original Canadian drama and comedy programming.  It is therefore not hype when we describe conventional television as the cornerstone of a Canadian television industry.  It is a fact.

LISTNUM 1 \l 158               Given the central role played by conventional television, it is critical of the Commission's next t.v. policy creating framework that supports the ongoing health of conventional television by recognizing the current challenges facing this sector.

LISTNUM 1 \l 159               I would like to focus on two that we consider the most fundamental : the weakening business model for conventional television and the transitional to digital television and the role of over‑the‑air broadcasting.

LISTNUM 1 \l 160               First, our business model.  It is well‑known that conventional television is highly dependent on advertising to generate revenues.  This is to private conventional broadcasters as well as CBC/Radio‑Canada.

LISTNUM 1 \l 161               Indeed, over 50 per cent of CBC's television funding comes from commercial revenues and the vast majority of this amount is derived from advertising.  Similarly, over 40 per cent of Radio‑Canada's television funding comes from commercial revenues and the vast majority comes from advertising.

LISTNUM 1 \l 162               In light of this business reality we, like our private conventional broadcasting counterparts, are extremely concerned about any weakening in the advertising revenue stream.  The combination of audience fragmentation and technological advances in how programming is delivered and accessed has caused and is continuing to cause advertisers to rethink their attitude towards advertising on conventional television.  As a result, the advertising model that has supported conventional television broadcasters for decades is weakening and this, again, is a fact.

LISTNUM 1 \l 163               Numerous parties in this proceeding have referred to the June 2006 PricewaterhouseCoopers' report that identifies television broadcasters as the most challenged Canadian media industry in terms of future revenue growth over the next five years.  Equally alarming is the fact that in the last two years PwC have cut their five‑year forecast revenue growth for conventional television by 50 per cent.

LISTNUM 1 \l 164               PricewaterhouseCoopers is not alone in holdings this view.  Scotia Capital predicts that Canadian conventional TV revenues will decrease by 2 per cent next year.  Similarly, in the United States Kagan Research predicts that the primetime upfront ad sales for conventional broadcasters will decline by 1 per cent this year.

LISTNUM 1 \l 165               All of these analysts as well as other analysts such as TD Newcrest and the Yankee Group identify fragmentation and the effect of new technologies and new platforms as the causes of this challenging environment for conventional television.  Unfortunately, as revenues will be weakening, conventional broadcasters' programming costs will continue to rise as they have historically as we meet our programming and operational commitments.  This combination of these two factors, stalling revenues and rising costs, suggests a dim future for conventional broadcasters.

LISTNUM 1 \l 166               We have put this data together for you at page 1 of your reference material.  This chart, which relies on PricewaterhouseCoopers' five‑year revenue data that no party has disputed and which in fact numerous BDUs have cited in their own submissions, demonstrates that the combination of weakening advertising revenues as forecast by PwC and the historical growth in costs will have conventional broadcasters incurring significant losses before the Commission conducts its next TV policy review.

LISTNUM 1 \l 167               I should point out that this chart simply reflects historical cost trends.  Essentially, the weakening advertising market will make it impossible for conventional television broadcasters to advance the Commission's goals with respect to original Canadian programming, including local programming, HD programming, drama, etc.  The future does not look promising if conventional broadcasters continue to rely on advertising revenues as the major source of funding.

LISTNUM 1 \l 168               What is to be done to remedy this situation?  First, it is important to understand that we are not suggesting the Commission establish specific financial remedies in this proceeding.  There is simply insufficient data to permit a specific and complete solution to be established at this time.  What is needed right now, however, is a clear policy statement from the Commission that conventional television broadcasters are eligible to access subscriber revenues generated by BDUs.  Given the record of this proceeding, there is simply no good reason not to do so.

LISTNUM 1 \l 169               This policy statement would effectively put conventional broadcasters on the same broad economic footing as specialty broadcasters that have access to both advertising and subscriber revenues.

LISTNUM 1 \l 170               A statement of eligibility would not, however, guarantee conventional broadcasters a share of subscriber revenues.  The purpose of such a statement would be to provide the Commission and conventional broadcasters with the future tools, as required, to enable conventional broadcasters to continue to lead the Canadian broadcasting system and meet the Commission's policy objectives.

LISTNUM 1 \l 171               Whether such tools would be required would be determined by the Commission at the broadcasters' licence renewal proceeding taking into account such factors as the broadcasters' regulatory commitments and its proposals to pursue new initiatives that will continue to advance the objectives of the broadcasting system.  We believe that this approach would be both pragmatic and fair. It would permit a case by case examination of each broadcasters' situation and would not require a one‑size‑fits‑all approach.

LISTNUM 1 \l 172               It would also address the current situation that has BDU subscribers paying for access to conventional broadcaster signals without the associated subscriber revenue being shared with these broadcasters.

LISTNUM 1 \l 173               If you turn to page 2 of your reference material, you will see the results of a survey CBC Radio‑ Canada recently commissioned and which has been tabled with you today.  These results show nearly 90 per cent of Canadians believe they are paying for conventional broadcasting services when they pay their cable or satellite bills.  Canadian BDU subscribers see clear value in the conventional broadcasters' television signals that they receive from their cable and satellite distributors despite the free over‑the‑air availability of these services.  I suspect that they would be surprised to learn that not a penny of their cable and satellite bills is passed onto the broadcasters who created and provide these signals.

LISTNUM 1 \l 174               We believe it is entirely appropriate for the Commission to include in its revised television policy a policy statement indicating that conventional television broadcasters are eligible for a share of BDU subscriber revenues, revenues generated by the programming supplied by conventional broadcasters.  Again, given the record of this proceeding, there is simply no valid reason not to do so.

LISTNUM 1 \l 175               Let me now turn to the second issue I mentioned at the beginning of our presentation, the transition to digital HD and the role of over‑the‑air broadcasting.  As we all know, the communications world is now a digital world and conventional broadcasters must keep pace.  Recognizing this fact and for efficient spectrum management reasons, we have recommended that the Commission and Industry Canada help encourage this transition by establishing a target date for conversion of analogue television services to HD.

LISTNUM 1 \l 176               The issue is not therefore whether Canadian conventional television should transition to digital, the issue is how best to do this, how is it to be funded and how quickly are we able to move to digital?

LISTNUM 1 \l 177               In the early 1970s the government asked CBC/Radio‑Canada to embark on an accelerated coverage plan designed to ensure that all communities with a population of 500 or more would have access to our over‑the‑air television signals.  As a result, CBC/Radio‑Canada over‑the‑air infrastructure was expanded significantly using money specially allocated by government to CBC/Radio‑Canada for this purpose.  At that time, over‑the‑air reception was a significant and important vehicle for distributing television broadcast signals to Canadians with the vast majority of Canadian households receiving their TV programming in this manner.

LISTNUM 1 \l 178               However, if you turn to page 3 of your reference material, you will see a dramatic decline in over‑the‑air reception that has occurred from 1972 to last year.  As you can see, over‑the‑air delivery has dropped from over 60 per cent penetration to just over 10 per cent in the space of approximately 30 years.  Meanwhile, CBC/Radio‑Canada's analogue television transmitters are coming to the end of their useful life and limited funds are available for their replacement.  In fact, no funding has been provided to CBC/Radio‑Canada to replace these transmitters.  Based on the current reception levels, we believe it would be fiscally irresponsible for us to try to replace our entire analogue transmitter infrastructure with a digital one.

LISTNUM 1 \l 179               However, we also need to bear in mind that while Canadian over‑the‑air reception levels have come down dramatically, in a number of places across the country many people still rely on over‑the‑air technology to receive their television programming.  Surprisingly, because satellite delivery of television has become very popular in rural areas, most of these over‑the‑air viewers reside in urban centres.

LISTNUM 1 \l 180               To address this overall decline in over‑the‑air reception levels while recognizing off‑air's continued importance in many Canadian markets, we have developed a hybrid approach that would see 44 digital over‑the‑air transmitters installed in major markets with other areas served by another distribution technology, namely satellite or in some instances cable or eventually perhaps IPTV.

LISTNUM 1 \l 181               If you turn to page 4 of your reference material you will see a chart illustrating CBC/Radio‑Canada's current over‑the‑air coverage and the coverage that would be achieved under our hybrid approach.  From our perspective, the hybrid model is not a difficult choice, in fact, it may be the only option for CBC/Radio‑Canada for the transition to the digital HD environment.

LISTNUM 1 \l 182               Determining the speed of this transition is a financial question and brings us back to conventional broadcasters' weakening business model.  While we will continue to devote resources to the digital HD challenge, our industry simply does not have the financial wherewithal to undertake this transition in a timely and effective manner in support of Canadian programming.  For its part, CBC/Radio‑Canada estimates that with PricewaterhouseCoopers' advertising revenue projections it will take us another 12 years to achieve full digital HD conversion of our English and French television services.  Access to supplementary funding, particularly subscriber revenues, is therefore crucial.

LISTNUM 1 \l 183               Encore une fois, notre proposition vise à rendre les télédiffuseurs conventionnels admissibles aux revenus d'abonnement ‑‑ sans toutefois en faire une garantie ‑‑ afin de contrebalancer le modèle économique actuel, fondé sur la publicité et de plus en plus affaibli.  Ce nouveau modèle donnerait aux télédiffuseurs conventionnels les ressources financières nécessaires pour assurer la transition au nouvel environnement numérique multiplateformé, qui pourrait offrir des contenus de qualité au niveau local, en haute définition ou en dramatiques, selon les décisions du Conseil.

LISTNUM 1 \l 184               We are proposing an approach that would allow conventional broadcasters to operate on the same financial footing as specialty services.  We believe it is crucial, it is critical that the Commission take action now in order to provide an environment over the next several years in which conventional broadcasters can continue to make a substantial contribution to the Canadian broadcasting system.

LISTNUM 1 \l 185               Thank you for the opportunity to present these comments.  We would be very happy now to take your questions.

LISTNUM 1 \l 186               THE CHAIRPERSON: Thank you, Mr. Rabinovitch.

LISTNUM 1 \l 187               I am asking Commissioner Rita Cugini to initiate the questioning.

LISTNUM 1 \l 188               COMMISSIONER CUGINI: Thank you, Mr. Chairman.

LISTNUM 1 \l 189               Mr. Rabinovitch and gentlemen, good morning and welcome to these proceedings.

LISTNUM 1 \l 190               Mr. Rabinovitch, I will address my questions to you and then you can decide if you are going to answer them or if anybody else on your panel will answer them.

LISTNUM 1 \l 191               I am going to start my line of questioning with fee for carriage for conventional broadcasters.  In your written submission you suggested that fee for carriage should be assessed at the time of licence renewal and today you ask us to make a policy statement that conventional broadcasters are indeed eligible.  But I do want to run through what that policy statement should include because, in your written submission, you say that it may be in relation to the net costs of attaining specific and discreet public policy objectives.

LISTNUM 1 \l 192               So I just want to explore further what, in your opinion, are those discreet public policy objectives?

LISTNUM 1 \l 193               MR. RABINOVITCH: Thank you for the question.

LISTNUM 1 \l 194               I believe that this already determined to a certain extent in your call where you talk about the need to move into HD in an accelerated fashion, the need to enhance drama production, local and regional programming.  I think it will vary from, and it should vary, from licensee to licensee and that would be as a function of the discussions we would have with you at the hearing.

LISTNUM 1 \l 195               COMMISSIONER CUGINI: Do you think such a policy statement should include an expectation that minimal commitments would be expected in the areas, for example, of original HD programming and/or a minimum number of local hours or original Canadian programming with specific genres?  You did mention drama, but should we also include the other priority programming categories?

LISTNUM 1 \l 196               MR. RABINOVITCH: The answer is yes.  I believe that it would vary from licence applicant to licence applicant and it should be in addition to the services we already provide and it should have measurable specific targets per undertaking.

LISTNUM 1 \l 197               COMMISSIONER CUGINI: Since we are talking about assessing all of this at renewal time, is it your position that these commitments should be incremental to what the broadcaster is doing at the time of renewal?

LISTNUM 1 \l 198               MR. RABINOVITCH: Yes, madam.

LISTNUM 1 \l 199               COMMISSIONER CUGINI: If a fee for carriage is granted, would it be reasonable to impose a spending requirement as well, an overall spending requirement on Canadian programming?

LISTNUM 1 \l 1100              MR. RABINOVITCH:  I believe an overall spending requirement is something that would have to be discussed again at a hearing ‑‑ and I can only answer on behalf of CBC ‑‑ where in effect all of the money we generate beyond the need to service the corporation is spent on programming.

LISTNUM 1 \l 1101              All of our intention is to enhance the money we put into programming.  So we would have no concern with that

LISTNUM 1 \l 1102              COMMISSIONER CUGINI:  Does that mean that if fee for carriage is granted you would not use the incremental revenue to fund HD transition?

LISTNUM 1 \l 1103              MR. RABINOVITCH:  That would be a decision to be made between you, the Commissioners, and ourselves in terms of conditions of licence.  If in fact you desired and we desired to use part of that funding to enhance and speed up the process of moving to HD, then that would be a condition of license with particular measurable objectives against the fee for carriage.

LISTNUM 1 \l 1104              COMMISSIONER CUGINI:  Would you ask us to apply that to all over‑the‑air broadcasters or just to the CBC?

LISTNUM 1 \l 1105              MR. RABINOVITCH:  I would suggest that it would be applied to each broadcaster as a function of their own license renewal.  Different broadcasters may wish to stress different things and have different objectives.  That's why we believe the opportune place for this is in a license renewal hearing.

LISTNUM 1 \l 1106              COMMISSIONER CUGINI:  What would your reaction be if we were to exclude expenditures on foreign programming in this assessment?

LISTNUM 1 \l 1107              As you know, there have been suggestions from other participants in these proceedings that warn us really that any additional revenues earned through a fee for carriage will simply drive up the cost of foreign programming, creating nothing more than a bidding war among Canadian broadcasters.

LISTNUM 1 \l 1108              MR. RABINOVITCH:  We can agree with that.  We would have no problem with that.

LISTNUM 1 \l 1109              When we purchase foreign programming, it is either because it fits our concept the best in the world where it is not really a bidding issue, because most of the stuff will not be shown on other Canadian channels, or Canadian conventional channels, and when we do bring in foreign programs such as movies it is to enhance the money we have to put back into programming, Canadian programming.

LISTNUM 1 \l 1110              COMMISSIONER CUGINI:  Does profitability have a place in the overall assessment of the level of wholesale fees to be established?

LISTNUM 1 \l 1111              MR. RABINOVITCH:  Again I can only talk for CBC.  In our case the answer is no.

LISTNUM 1 \l 1112              COMMISSIONER CUGINI:  Categorically?

LISTNUM 1 \l 1113              MR. RABINOVITCH:  Categorically.

LISTNUM 1 \l 1114              COMMISSIONER CUGINI:  All right.

LISTNUM 1 \l 1115              Rogers has suggested that it would not be reasonable for BDUs to contribute to Canadian program production, both through their existing CTF obligations and through a new fee for carriage.

LISTNUM 1 \l 1116              Would you comment on this position?

LISTNUM 1 \l 1117              MR. RABINOVITCH:  Yes.  Our feeling is that the contribution made by cable operators is a contribution made to all broadcasters, not just conventional broadcasters, others are eligible as well.

LISTNUM 1 \l 1118              Perhaps, Richard, you want to say a couple of words on that.

LISTNUM 1 \l 1119              So we see them as two different demands that are to be made on the system.

LISTNUM 1 \l 1120              MR. STURSBERG:  I would just say that as far as the cable companies are concerned, I think the evidence that was tabled earlier on today is very interesting, because what it clearly indicates is that Canadians believe that they are already in fact paying for conventional television through their cable bills.

LISTNUM 1 \l 1121              The other thing is, as Bob says, I think you have to distinguish quite clearly the Canadian Television Fund is there to finance programs in particular areas and to buy down the costs essentially for the independent producers.

LISTNUM 1 \l 1122              What we are saying in this case is something quite different, which is that these revenues would come back to the conventional broadcasters to be able to do the sorts of incremental things that the President was talking about.

LISTNUM 1 \l 1123              COMMISSIONER CUGINI:  If fee for carriage is indeed granted, could the CBC increase license fees such that the CBC's CTF envelope could be greatly reduced or perhaps even eliminated?

LISTNUM 1 \l 1124              MR. RABINOVITCH:  The answer is no.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1125              COMMISSIONER CUGINI:  They told me never to ask a question if you don't know what the answer is.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1126              MR. STURSBERG:  I might just add that were we to do that then we would not hit the incrementality test, because say, for example, we said:  Let's make an undertaking with the Commission with respect to doing more by way of drama.  If, in making that undertaking, we vacated the CTF, the net effect would be to reduce the total quantity of drama we are producing rather than to achieve the goal of increasing the total amount of drama.

LISTNUM 1 \l 1127              COMMISSIONER CUGINI:  What is your position on the 12‑minute per hour limit on advertising?

LISTNUM 1 \l 1128              MR. RABINOVITCH:  We believe that it should remain at 12 minutes for everybody.  We believe that what we are talking about here is a pie which is not growing, in fact is shrinking, and if we were to change the limits all we would do is reallocate the funding, and as well ‑‑ sorry, the access to that pie, and in particular you will enrich the use of American programming since that is the programming that draws the largest audience and hence would be in greatest demand by advertisers.

LISTNUM 1 \l 1129              Hence, increasing the number of minutes would be counterproductive to the CBC.

LISTNUM 1 \l 1130              COMMISSIONER CUGINI:  Your position on product placement.  Is there a place for it in the programming on CBC?

LISTNUM 1 \l 1131              MR. RABINOVITCH:  Yes, there is a place for it, together with ourselves and the independent producers that work with us, but there has to be ‑‑ in our opinion, and we do have strict editorial limits to make sure that product placement does not have an impact on the editorial programming.

LISTNUM 1 \l 1132              Do you want to go on?

LISTNUM 1 \l 1133              MR. STURSBERG:  Can I just take one moment to expand on the point the President made earlier about the 14 minutes.

LISTNUM 1 \l 1134              Not all eyeballs are of equal value.  The ones that are of most value to advertisers, that claim the greatest premium, are eyeballs on the largest and most successful American shows, whether that is CSI or Lost or whatever it happens to be.  They command a premium in terms of their value.

LISTNUM 1 \l 1135              So that if you were ‑‑ and it is one of the things we were a little bit concerned about when the ad incentive was put in place in the first instance ‑‑ if you allow an increase in the total number of minutes in the American programs, given that the pie is fixed and that's where all the advertisers want to go, then what may well happen is that you will draw money out of Canadian programs and you will devalue them as a result, which is of course precisely what it is we would like not to accomplish.

LISTNUM 1 \l 1136              COMMISSIONER CUGINI:  You said it at paragraph 132 of your submission and you repeated it today, that given their key place in the broadcasting system, conventional television, and it being a cornerstone, you added that:

"No change in the other carriage conditions for conventional television stations need be made if fee for carriage is granted.  Conventional television would continue to be on the highest possible carriage priority mandatory on basic.  There are of course those who disagree and have suggested that we should also consider eliminating simultaneous substitution and other such provisions."  (As read)

LISTNUM 1 \l 1137              Could you provide your views on the prospect of the Commission reducing or eliminating certain regulatory requirements currently placed on distributors in the event that a fee for carriage regime was introduced and what effect would that have on the CBC?

LISTNUM 1 \l 1138              MR. STURSBERG:  I take it, Commissioner, you are referring essentially to the question of whether it should be mandatory on basic.

LISTNUM 1 \l 1139              Our view would be that all of the current arrangements with respect to conventional carriage should be retained whether we receive a fee or not, but that in receiving the fee what would happen is that we would simply carry on the way we are carrying on now.  We would stay on basic, the privates would continue to enjoy the value associated with simultaneous substitution and everything else, so we would not see any changes in status, or any changes in the way in which we are carried.

LISTNUM 1 \l 1140              COMMISSIONER CUGINI:  But you do know that the distributors in particular who have commented in these proceedings have said that if a fee for carriage is granted, then conventional television becomes nothing more than discretionary, or should be discretionary, just as specialty television is right now.

LISTNUM 1 \l 1141              MR. RABINOVITCH:  I think we have shown quite specifically in our submission and in my oral comments, that in fact conventional television is not comparable in many, many ways.  It is the driving source, it is the primary funding source of Canadian drama and Canadian programming and we want to maintain that, we want to continue to have that situation.

LISTNUM 1 \l 1142              MR. STURSBERG:  But I would add that I think that the mere fact of giving the conventional broadcasters a fee, as Bob says, does not change their status.

LISTNUM 1 \l 1143              It is completely up to the Commission to decide what status the conventional broadcasters will continue to enjoy in the future.  It is really not up to the cable companies.

LISTNUM 1 \l 1144              MR. TREMBLAY:  In fact, if I may add, what we are proposing is to add an additional policy instrument that the Commission can use to further the objective of the Act.  Because we know right now there are considerable challenges to be faced across the industry, and obviously making a gain on that front in exchange for no trade‑off in reducing the effectiveness of conventional broadcasters would not generate any positive results.

LISTNUM 1 \l 1145              COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 1146              We do know, or we suspect, that the cost of cable and DTH to Canadians is going to increase.  Let's assume that is what is going to happen, that these will be pass‑through fees.  Currently the price paid monthly for basic service between DTH and cable ranges from $20 to $30 a month, depending on the provider.

LISTNUM 1 \l 1147              Do you have any evidence that Canadians are willing to pay more for services that they are currently receiving?

LISTNUM 1 \l 1148              I know you cited your survey that says that 89 percent of Canadians think that they are already paying for conventional television, however it is one fact to think you are paying for something and then find out that you are not and be charged for what you thought you were already paying for.

LISTNUM 1 \l 1149              So how do we reconcile this?

LISTNUM 1 \l 1150              MR. RABINOVITCH:  First, I would contest the assumption that the fee must be passed through.

LISTNUM 1 \l 1151              What we are asking for as conventional broadcasters is a fair share of the basic fee that is now being collected and has been going up significantly every year by at least 4 to 5 percent.  We believe that there is a more equitable sharing available that need not have a negative impact upon the consumer.

LISTNUM 1 \l 1152              This is a decision the cable companies will make.  Since you have deregulated pricing, it is the cable companies which may decide to pass the costs on to the consumer.  But we contest the necessity of doing that.

LISTNUM 1 \l 1153              MR. STURSBERG:  I might just add a couple of things.

LISTNUM 1 \l 1154              On the issue of affordability with respect to basic cable service, I take it this is not a matter of particular concern to a number of cable companies, certainly the third and fourth largest cable companies, which are Vidéotron and Cogeco, support the notion that there should be a fee for conventional broadcasters, despite the fact that their broadcasting businesses are smaller in revenue terms than their cable businesses.

LISTNUM 1 \l 1155              I would say two other things that I think are important.

LISTNUM 1 \l 1156              One is that we had a little look at the CRTC's own data and over the past five years basic cable rates have risen about 25 percent, but through that period of time there has not been an erosion in terms of basic cable and indeed penetration has continued to grow.

LISTNUM 1 \l 1157              Finally, I would say one other thing, which is there was a lot of concern in the past, I know, about the black market and so on and so forth in terms of satellite reception.  But despite rising costs for basic service, the black market seems actually to have declined.

LISTNUM 1 \l 1158              So I don't think, frankly, that the Commission need be particularly concerned about the affordability issues surrounding this given what we have seen in the last little while.

LISTNUM 1 \l 1159              COMMISSIONER CUGINI:  In that time frame, however, is it not true that additional services were added to the basic tier, things like TVA and APTN, which would have increased the cost of basic to the distributors and therefore to the subscribers.

LISTNUM 1 \l 1160              So there is a direct correlation between the increase in price of basic to the increase in the number of services offered on the basic band.

LISTNUM 1 \l 1161              MR. STURSBERG:  Certainly.  I absolutely grant that.

LISTNUM 1 \l 1162              My only point was that despite the increasing price we have not seen a fall off in subscription.

LISTNUM 1 \l 1163              COMMISSIONER CUGINI:  It was reported in the press on Friday that Rogers has been quoted with a study that said, I believe, 20 percent of Canadians would cancel, if I have my figures right.  One was 20, one was 37 percent of Canadians would cancel their cable if the costs were to increase.

LISTNUM 1 \l 1164              MR. STURSBERG:  I don't propose to comment on the Rogers study since I'm not an expert in the area.  I presume it will get examined in some detail here.

LISTNUM 1 \l 1165              But again, I would just simply note that despite the rising costs of cable and satellite services over the course ‑‑ not just the last five years, but a fact of many years ‑‑ the level of penetration has increased very substantially.

LISTNUM 1 \l 1166              COMMISSIONER CUGINI:  What, in your opinion, is the public relations campaign that both the CRTC and the CBC will have to launch in order to justify to Canadians that they will now be charged a monthly fee, or that a portion of their cable bill will go to the CBC, in addition to their tax dollars?

LISTNUM 1 \l 1167              MR. RABINOVITCH:  Well, in addition to their tax dollars.

LISTNUM 1 \l 1168              I would suggest to you that there isn't a conventional broadcaster producing Canadian programming that doesn't get benefits at least equal to or comparable to the benefits we get directly from the taxpayer in terms of our appropriation, whether it is simultaneous substitution, whether it is Bill C‑58 or what is now called section 19.1 of the Income Tax Act, whether it is tax credits, we all get support and the industry needs the support at a minimum given the size of our market.

LISTNUM 1 \l 1169              So it is not a question of the CBC getting extra money, dipping twice, it is all of us would be dipping but we are dipping because we need the funds if we are going to achieve the objectives of the Broadcasting Act to enhance and produce more Canadian content and also to achieve other objectives that you have such as moving to HD.

LISTNUM 1 \l 1170              COMMISSIONER CUGINI:  And would you see any of the funding being directed to social policy objectives, for example, increasing programming that is described video and/or increasing the quality of closed captioning?

LISTNUM 1 \l 1171              MR. RABINOVITCH:  I think this is a function, again, of the licence hearing because I think each broadcaster achieves these objectives in different ways and to a different extent.  We are quite confident and comfortable that within our existing operation we are achieving the objectives as set out by you, including closed captioning, but I think it is a matter really for discussion.

LISTNUM 1 \l 1172              That is the beauty of what I think we are proposing, is that it should be tailored to each broadcasting undertaking.  It should not be an automatic fee.  It is not a grab for money.  It is funds for the purpose of enhancing and meeting the conditions that you would like us to meet.

LISTNUM 1 \l 1173              MR. LAFRANCE:  To me ‑‑ if I can speak French.  Votre question sur la question des relations publiques qu'on devrait faire, je pense que les francophones du pays, en tout cas, qui suivent actuellement l'industrie de la télévision, ou tout le monde, en fait.

LISTNUM 1 \l 1174              Il n'y a pas une semaine dans les médias québécois où on ne parle pas des problèmes du financement de l'industrie de la télévision pour plusieurs raisons, à cause de la fragmentation.  L'enjeu, par exemple, des dramatiques canadiennes, ou ce qu'on a appelé au Québec les séries lourdes, est un enjeu qui est bien connu de tous les téléspectateurs parce que c'est un enjeu dont il est largement question.

LISTNUM 1 \l 1175              Donc, je pense que personne ignore actuellement le problème de fond de l'industrie de la télé et le danger que cette industrie là recule sur certains grands aspects rassembleurs que sont les dramatiques canadiennes ou d'autres choses.

LISTNUM 1 \l 1176              Donc, je pense que tout le monde s'attend un peu à ce qu'il se passe quelque chose dans l'industrie de la télévision qui vienne corriger ces problèmes‑là.  Il y aura peut‑être des surprises pour personne.

LISTNUM 1 \l 1177              COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 1178              Now in terms of digital distribution, your hybrid solution ‑‑ we will get into details about that later, in fact, Chairman Arpin will be asking you more specific questions on that issue ‑‑ the net effect is that there will be some Canadians who currently rely on off‑air viewing who will have to subscribe to a distribution service if they are to continue to enjoy the CBC.  What do you tell those Canadians because they will have an additional cost?

LISTNUM 1 \l 1179              MR. RABINOVITCH:  Again, the reality from our point of view is that we do not have the funds, nor do we think it is necessarily the appropriate public policy to go back to the model that was put in in the seventies of having transmitters in all communities of 500 or more.

LISTNUM 1 \l 1180              Also, the observed behaviour of Canadians in areas outside urban agglomerations is that they have already moved to BDU delivery to a very, very large extent.

LISTNUM 1 \l 1181              So with our hybrid model, we are trying to recognize the fact that in urban areas there is a significant proportion still who do not have or do not want to go to a BDU, who don't want more than the signals that they can get off air and we wish to serve them through a digital platform which is also obviously an HD platform.

LISTNUM 1 \l 1182              But yet, we realize that financial we cannot afford to go beyond that even with the type of assistance we would hope to get from you in a subscriber fee.  Again, it is possible that government might say differently, that everybody must get coverage over the air but there is no evidence to that effect at the present time.

LISTNUM 1 \l 1183              COMMISSIONER CUGINI:  In the United States there will be a voucher program to subsidize those remaining households who cannot receive over‑the‑air digital broadcasts.  Do you think that a comparable program for Canadian households should exist if the analog transmitters are indeed shut down?

LISTNUM 1 \l 1184              MR. RABINOVITCH:  If I may, it is ‑‑ if I understand the voucher program, it is to make it possible for Americans with their existing TV to receive a digital signal which is then converted to analog.  So you are not imposing on a consumer the need to buy a new TV.

LISTNUM 1 \l 1185              COMMISSIONER CUGINI:  Right.

LISTNUM 1 \l 1186              MR. RABINOVITCH:  We will give you a voucher to allow you to do this and the logic of it, as I understand it, is the government is repatriating all of those analog signals which it will then put to auction, will generate a very significant amount of money, and a relatively small amount of money will then be available for these tax benefits.  I think it is going to be done as a tax credit.

LISTNUM 1 \l 1187              This is, again, a matter of public policy, of government policy, and to the extent the government wishes to have an earlier rather than later conversion date then it would be eminently logical, if the government so desires, to assist the individual consumer in receiving the signal by some program because after all the government will be repatriating those analog signals.

LISTNUM 1 \l 1188              COMMISSIONER CUGINI:  So the answer to the next question of funding and where that would come from, in your opinion, is from the government?

LISTNUM 1 \l 1189              MR. RABINOVITCH:  I believe if the government desires to do that it has to come from the government as the government has done in the past when they gave us the ACP.  Now it is a different process.  It is a process of moving, for very good managerial reasons, moving to a digital system but in the process it opens up a tremendous amount of spectrum which the government can then auction off.  So there is a funding source as well.

LISTNUM 1 \l 1190              COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 1191              New entrants.  How do you suggest we license new entrants in the world of over‑the‑air broadcasters?  Should we require them to build analog transmitters or should we require them to automatically build digital transmitters and is there a difference between a major market new entrant and a smaller market new entrant, in your opinion?

LISTNUM 1 \l 1192              MR. RABINOVITCH:  That is a very interesting question I had not thought about but I know ‑‑ any of us had thought about in terms of new entrants.  Here we are talking about a system which we believe is shrinking rather than growing but if a new entrant comes in, my advice would be that they go digital.

LISTNUM 1 \l 1193              COMMISSIONER CUGINI:  Any difference between a small market or a large market?

LISTNUM 1 \l 1194              MR. RABINOVITCH:  I think it is the same.

LISTNUM 1 \l 1195              COMMISSIONER CUGINI:  Okay.

LISTNUM 1 \l 1196              MR. RABINOVITCH:  Eventually I think they are going to have the same problems and ‑‑ the same problems in respect of availability.

LISTNUM 1 \l 1197              COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 1198              You have suggested that the Commission establish August 31st, 2001 (sic) as the mandated shutoff date ‑‑

LISTNUM 1 \l 1199              MR. RABINOVITCH:  Two thousand and eleven.

LISTNUM 1 \l 1200              COMMISSIONER CUGINI:  Two thousand and eleven.  What did I say?

LISTNUM 1 \l 1201              MR. RABINOVITCH:  Two thousand and one.

LISTNUM 1 \l 1202              COMMISSIONER CUGINI:  Thank you.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1203              COMMISSIONER CUGINI:  And this would be just over two years past the mandated shutdown date of analog television in the U.S.  Some parties have left the precise date open for further discussion.  What, in your opinion, are the factors we need to consider in order to establish this issue?

LISTNUM 1 \l 1204              MR. RABINOVITCH:  I think what you have to consider will be the disruptive effect of how the analog and digital environment will be managed between the two countries.  Remember, we share a border and we share an overlay from one country to the other of hertzian waves and it will be quite messy, in our opinion, our technical opinion, if we are still on analog for any significant period of time while the United States have moved and are beginning to license services which may interfere with out analog signals.  So from a technical point of view we have a concern with that.

LISTNUM 1 \l 1205              I think you also have to watch very carefully the extent to which there are programs to assist financially and otherwise the move from analog to digital.  Even in the United States the original cutoff date was 2006 and ultimately it moved to 2009.  We believe that it is a good target date, 2011, two years after the Americans.

LISTNUM 1 \l 1206              I think it makes eminent sense but if you in your deliberations or Industry Canada in its deliberations decided that the movement wasn't fast enough because the funds weren't available or for other reasons, it may slip.  We say it is a target.  We don't say it is absolute.

LISTNUM 1 \l 1207              COMMISSIONER CUGINI:  You did bring up the issue of border towns.  As you know, some have suggested that while we should shut them down in border cities that there is really no need to ever shut down the analog transmitters in rural Canada.  Would you care to comment on that?

LISTNUM 1 \l 1208              MR. RABINOVITCH:  Yes.  The problem with that is the cost of transmission.  We would therefore have to duplicate our transmission system and have a transmission system for analog and a transmission system for digital.

LISTNUM 1 \l 1209              Ray, perhaps you want to say something about that but I think that adds significantly to our costs.  We are trying to reduce costs so that we can put more money into programming.

LISTNUM 1 \l 1210              MR. CARNOVALE:  And a lot of the transmitters that we have in service, as Mr. Rabinovitch indicated, went into service during the ACP.  So they have a finite life and at some point they will be impossible to stretch any longer.

LISTNUM 1 \l 1211              COMMISSIONER CUGINI:  Do you think it is necessary for the industry to submit their plans to us for re‑review or should we continue with the market‑driven approach and establish the firm shutoff date whichever way is most convenient for each party?

LISTNUM 1 \l 1212              MR. RABINOVITCH:  Again, it is a personal thing.  From the point of view of the CBC we would be more than willing to discuss with you our comprehensive plans to move in the direction as defined and any broadcaster who wishes to receive financial assistance in the move though a subscription fee should obviously have to put a measurable objective to you that would then be incorporated as part of the licence operation.

LISTNUM 1 \l 1213              COMMISSIONER CUGINI:  Thank you.

LISTNUM 1 \l 1214              Just one final line of questioning.  The CBC has quite a robust broadband presence and, as you know, the CFTPA has advocated that all broadcasters should enter into a terms‑of‑trade agreement, especially to deal with the ever‑increasing demand on producers for broadcasters to buy all rights, including, of course, those on broadband.

LISTNUM 1 \l 1215              So firstly, does the CBC currently have a terms‑of‑trade agreement in place with the CFTPA?

LISTNUM 1 \l 1216              MR. RABINOVITCH:  Yes.  We do, don't we?

LISTNUM 1 \l 1217              MR. STURSBERG:  Yes, we do.

LISTNUM 1 \l 1218              COMMISSIONER CUGINI:  And it is current and updated and ‑‑

LISTNUM 1 \l 1219              MR. RABINOVITCH:  Given the models, it is current as it can be.

LISTNUM 1 \l 1220              MR. RABINOVITCH:  Yes.  The terms of trade change as the business changes.  We have a terms‑of‑trade agreement that was entered into sometime ago and we have had some conversations with the producers about what the best way is to deal with these emerging platforms, particularly broadband platforms.

LISTNUM 1 \l 1221              Our view was that what we should do is we should say neither of us really understands these platforms yet.  We don't understand fully the costs of them and we certainly don't understand the revenues associated with them.

LISTNUM 1 \l 1222              We do understand, however, that if there are going to be ancillary platforms over and above the broadcast program itself that the broadcast program is inevitably going to be the big driver to those other platforms, it will remain the largest component of expense and, if you like, it will be the big bullhorn that pushes people out to the other platform, whether they are mobile or internet or whatever.

LISTNUM 1 \l 1223              So the model that we had proposed was to say, look, we don't know, you don't know but what we do know is that the best way to plan these going forward is to plan them on an integrated basis so that we would say, here is the broadcast piece, let's build the broadband piece, let's build the mobile piece so they all fit together and they all can push one to the other.

LISTNUM 1 \l 1224              So we said to the producers, maybe the best way of doing this is just to use a traditional sort of program sales model and what we would say is we will distribute on your behalf to those platforms and we will split the associated revenues 50‑50 between us, let's try that for a year and a half or so, see how it goes and learn together as to what is going to make sense.

LISTNUM 1 \l 1225              Unfortunately, the producers declined the offer and said no, they didn't really want to do that, and so now the rule within the television fund is that the way it has to work is we negotiate the licence fee and then once the licence fee is negotiated, at that point the negotiation begins with respect to the ancillary platforms.

LISTNUM 1 \l 1226              Our view is that that is not the most effective way of doing it.  We thought the other model was better but for the time being people have declined it.

LISTNUM 1 \l 1227              M. LAFRANCE:  Peut‑être en ajouter un peu sur le marché québécois.  On a des discussions avec la PFTQ, qui est l'équivalent, et ça se passe un peu différemment, mais ça se passe quand même bien.  Tout le monde est conscient qu'il faut qu'on trouve une façon, surtout quand on a une valeur importante, la valeur importante des séries comme * Vice Caché + à TVA ou comme * Les invincibles + à Radio‑Canada, qu'il faut qu'on puisse discuter up front de la façon dont tout le monde va investir et de la façon dont les revenus vont être distribués, quand il y en aura éventuellement, et c'est clair que c'est un enjeu majeur parce qu'on ne peut pas continuer à être pour les 10 prochaines années qu'une première fenêtre de diffusion, parce que les télés, particulièrement les télés conventionnelles, sont les principales créatrices de valeur, et c'est elles qui créent les marques.

LISTNUM 1 \l 1228              Alors, c'est clair qu'il va falloir discuter de tout ça pour qu'on puisse, dès le départ, s'entendre sur les formes d'investissement.

LISTNUM 1 \l 1229              COMMISSIONER CUGINI:  So negotiations are ongoing?

LISTNUM 1 \l 1230              MR. LAFRANCE:  Yes and will be for a while.

LISTNUM 1 \l 1231              COMMISSIONER CUGINI:  Well, Mr. Rabinovitch and gentlemen, thank you very much.

LISTNUM 1 \l 1232              Mr. Chairman, thank you, those are my questions.

LISTNUM 1 \l 1233              THE CHAIRPERSON:  Thank you, Mrs. Cugini.

LISTNUM 1 \l 1234              My first question is really in following up with a prior discussion that you had with Mrs. Cugini and it has to do with the fee for carriage.  Some intervenors expressed a concern that if you were to be  granted a fee for carriage that the government could reduce your appropriation.

LISTNUM 1 \l 1235              Do you have any comments to make for those who are making that assumption?

LISTNUM 1 \l 1236              MR. RABINOVITCH:  I can be very cynical here, sir, and to remind to people that the government has not increased the CBC's appropriation in 32 years and just given the natural rate of inflation, they are doing a good job of reducing our real appropriation like whether they would take advantage of this and reduce it even more, I really don't know.

LISTNUM 1 \l 1237              MR. STURSBERG:  But perhaps I might add one thing.  I think in fairness, in terms of the model that we have proposed, if we were to make a proposal to the Commission to do something that would then be covered by the fee, that even if the government reduced the appropriation, it would be inappropriate for us to reduce our commitment to the Commission with respect to fee and, therefore, would have to take it out of some other activity of the corporation.

LISTNUM 1 \l 1238              THE CHAIRPERSON:  Thank you.  You have, this morning, filed a survey that you've titled "Value of Canadian Television Stations and that's a filing that was made this morning for the first time, so ‑‑  and it's in that survey that you say that some close to 90 per cent of the viewers are of the view that they are already paying for over‑the‑air services when they are paying their cable bill.

LISTNUM 1 \l 1239              Similar surveys have been conducted by other interveners.  I think TQS has one by CROP if my memory serves me well, which comes to very similar conclusions.

LISTNUM 1 \l 1240              And that being said, CROP in *l'Actualité+ of ‑‑ which is, I believe, dated December 1st 2006 has also its own survey question, which is not that one, but it's a question relating to the fact that people will have to pay to buy a HD TV set and I will say that 75 per cent have the respondents and it's about the same size of sample.

LISTNUM 1 \l 1241              So, 75 per cent of the respondents are saying that they are not interested to pay for HD.

LISTNUM 1 \l 1242              How do you relate in a way all these answers?

LISTNUM 1 \l 1243              Some are saying that they are not ready to pay something that they are paying; some others are of the view that there is no need to change for a new technology.  What's your view?

LISTNUM 1 \l 1244              MR. RABINOVITCH:  If the question was specific to HD, it is precisely why we have a problem in moving to HD.  Advertisers are not willing to pay for HD.  There is no economic case for moving to HD  We cannot generate, there is no business case for moving to HD.

LISTNUM 1 \l 1245              And so the numbers there are consistent with the attitude that advertisers have had towards HD.  They see it as superfluous to their objectives.

LISTNUM 1 \l 1246              But we, as a country have made a decision or in the midst of making a decision because we look at the quality of the product and we say if we don't move to HD as quickly as we can, we will lose ever more audience to Canadian programming to American programs.

LISTNUM 1 \l 1247              But let's not fool ourselves; right now, there is no business case and as I think the CROP survey confirms that and while the advertisers are acting rationally, when they refuse to pay us more for an HD show.  Michel, I think you want to add to that.

LISTNUM 1 \l 1248              M. TREMBLAY:   Oui.  Monsieur le président, j'ajouterais que, effectivement, au‑delà des chiffres, des sondages, si on regarde la réalité, on a déposé au 1er septembre les résultats d'une étude élaborée auprès de 12 000 Canadiens sur les patterns de consommation des nouveaux médias.

LISTNUM 1 \l 1249              En 2005, il y avait déjà 14 pour cent des Canadiens qui avaient un téléviseur numérique haute définition et, évidemment, avec la croissance de la programmation, on va assister à une croissance soutenue de cet intérêt.

LISTNUM 1 \l 1250              Évidemment, à l'heure actuelle, on n'est pas en présence d'une offre haute définition très large, donc ce n'est pas surprenant d'une partie qui est encore un peu septique quant à la nécessité de faire cet investissement, mais je pense que plus les diffuseurs auront la capacité d'augmenter cette présence, ça va de soi que c'est la tendance que devront suivre les consommateurs, de la même manière qu'ils l'ont fait avec les lecteurs DVD ou CD, ce sont des tendances inéluctables.

LISTNUM 1 \l 1251              LE PRÉSIDENT:  Il faut aussi tenir compte, je présume, des ventes du commerce en détail qui ferait en sorte que les principaux détaillants d'équipement électroniques domestiques vendent de plus en plus, sinon même exclusivement, des téléviseurs qui ont... des récepteurs qui ont la capacité de réception HD.

LISTNUM 1 \l 1252              C'est un peu en contradiction.  Ce qui contredit les résultats du sondage, c'est que les gens disent qu'ils ne sont pas prêts à en acheter, mais quand ils vont... parce qu'ils doivent changer leur appareil, c'est à ce moment‑là qu'ils en achètent un.

LISTNUM 1 \l 1253              M. TREMBLAY:  Absolument.  Et les prix sont en net déclin, donc...

LISTNUM 1 \l 1254              LE PRÉSIDENT:  Oui.

LISTNUM 1 \l 1255              We will talk about off air ‑‑ we will move now to the transition to digital even if that question was somehow introductory to that.

LISTNUM 1 \l 1256              Off air transmitters can deliver programming and data services to mobile and portable receivers that are beyond the reach of cable and satellite distribution undertaking.

LISTNUM 1 \l 1257              Do you see a business case for over‑the‑air delivery of multimedia service to such receivers?

LISTNUM 1 \l 1258              MR. CARNOVALE:  While the technology is there of ‑‑ right now, there is a lack of devices which will actually receive data from a television station that's distinct from DVDH where you take a channel that has been given up and you convert it to deliver to specific devices that are meant to receive DVDH, but not over‑the‑air television signals or the main broadcast program.  So, I am not aware of any devices yet.

LISTNUM 1 \l 1259              The other thing is that it's difficult to have a business case for ancillary data when we have ‑‑ there is no requirement for that ancillary data to be carried by BDUs, for example.  Only the main channel is mandatory carriage.  So, it's difficult to again come up with a business case that sees us utilizing ancillary bits in the absence of receivers and in the absence of any requirement to carry the signal, the ancillary signals.

LISTNUM 1 \l 1260              THE CHAIRPERSON:  Obviously, you're only operating a few of those over‑the‑air services for now, so I could understand that there is no current business case, but in the future, mid‑term or long term future, do you see also an area for growing revenues for an organization like yours that is covering all of Canada?

LISTNUM 1 \l 1261              MR. RABINOVITCH:  It is conceivable and it's something perhaps that the private broadcasters might be able to take advantage of.  I would be concerned to be deflective from our primary responsibility, and that is serving Canadians with quality Canadian programming.

LISTNUM 1 \l 1262              This could be a source of revenue, perhaps it's something we should be doing, but I really don't believe it should be a priority for the public broadcaster.

LISTNUM 1 \l 1263              MR. CARNOVALE:  If I may add one other thing and that is that our preoccupation is with delivering a single best quality high definition signal all the time and any ancillary services would come at the expense of that main program service.

LISTNUM 1 \l 1264              THE CHAIRPERSON:  You have said that rather than constructing parallel digital facilities, there are some assumptions, not necessarily all of yours, but that broadcasters could upgrade their analog facilities directly to digital and at the end of the transition period.

LISTNUM 1 \l 1265              And during that transition period, cable and satellite undertakings will distribute the high definition programming to viewers.  After the transition, they will distribute the low definition analog programming to viewers at least for a certain period.

LISTNUM 1 \l 1266              What are your views regarding that potential scenario?

LISTNUM 1 \l 1267              MR. CARNOVALE:  If I understand the question correctly, you're talking about the need to have in effect dual carriage?

LISTNUM 1 \l 1268              THE CHAIRPERSON:  Yes, exactly.

LISTNUM 1 \l 1269              MR. CARNOVALE:  Even in the absence of an analog signal?

LISTNUM 1 \l 1270              THE CHAIRPERSON:  Exactly.

LISTNUM 1 \l 1271              MR. CARNOVALE:  That is an interesting question and we actually haven't talked about an answer to it.  It is a conundrum, particularly as it relates to foreign signals which will by definition only be available as digital signals.

LISTNUM 1 \l 1272              And should they be converted to standard definition analog on cable, is there an entitlement?  That's a very interesting question.

LISTNUM 1 \l 1273              THE CHAIRPERSON:  For which you don't have a specific reply.

‑‑ LAUGHTER / RIRES

LISTNUM 1 \l 1274              MR. CARNOVALE:  Right.

LISTNUM 1 \l 1275              THE CHAIRPERSON:  So, you're leaving it to us to come up with a ‑‑  But do you think it would be cost effective to do such a ‑‑ to have such a policy or we should totally escape going into that direction?

LISTNUM 1 \l 1276              MR. STURSBERG:  At the risk of wandering back into old territory on my part, you know, clearly what ‑‑ it creates significant cost pressures particularly on the satellite providers if they have to duplicate their infrastructure.

LISTNUM 1 \l 1277              They are already going to be under capacity pressures as a result of the requirement to carry high definition signals because they simply chew up more bandwidth, which is also true for the cable industry.  And if you were then to layer on to that, a requirement could essentially double the number of signals they were requiring, by requiring them to continue to carry the analog signals, I think they are going to find themselves in a challenging circumstance.

LISTNUM 1 \l 1278              THE CHAIRPERSON:  Thank you.  The task force on the implementation of digital television submitted its report in October 1997, all over the ‑‑ close to nine years, broadcasters have had nineties to plan their digital transition and it will also be at least another two to three years before the analog facilities are shut down or at least, even if we're talking ‑‑ that's in the U.S. obviously ‑‑ and here, according to your proposal, we are talking another, an extra five years.

LISTNUM 1 \l 1279              Given this time frame and the declining costs of digital equipment, how much of the cost of the digital upgrades will have had to be spent in any case to maintain the analog equipment as part of the normal depreciation and replacement cycle?

LISTNUM 1 \l 1280              MR. RABINOVITCH:  That is part of what we are trying to avoid and that is to make investments into analog equipment which would not be used after a particular date and to see that as a duplication of investment, so we would like to avoid that and having a relatively fixed conversion date would be a good guidance to us in terms of how we move ahead.

LISTNUM 1 \l 1281              This is precisely also why we have already moved within digital in certain communities and will continue to do so at a rate of replacement, et cetera.  But we have only a finite amount of money with which to operate.

LISTNUM 1 \l 1282              MR. CARNOVALE:  There is still a significant premium for both high definition studio equipment and for digital transmitters vis‑à‑vis the corresponding analog equipment.  That premium has been shrinking, but typically for high studio equipment, you're talking about 20 to 25 per cent more.

LISTNUM 1 \l 1283              So, obviously, if we are replacing according to the normal capital attrition, you actually never quite catch up.  So, we have to spend additional dollars over what we would be spending if it was just analog equipment.

LISTNUM 1 \l 1284              On the transmission side, it's known at  any or at the lower power levels, digital transmitters at the low parallel level are much more expensive than analog transmitters.  The digital modulator itself is very expensive.

LISTNUM 1 \l 1285              THE CHAIRPERSON:  But you've already started to implement digital transmission equipment?

LISTNUM 1 \l 1286              MR. CARNOVALE:  Yes.

LISTNUM 1 \l 1287              THE CHAIRPERSON:  In remote areas or in major markets?

LISTNUM 1 \l 1288              MR. CARNOVALE:  No.  We've only implemented eight transmitters in five cities.

LISTNUM 1 \l 1289              THE CHAIRPERSON:  That's it.  So, not the locations where you have implemented HD, are they on top of the HD implementation you've made in locations like Montreal, Ottawa, Toronto?

LISTNUM 1 \l 1290              MR. CARNOVALE:  We can deliver, we deliver HD in two forms:  directly to the BDUs.

LISTNUM 1 \l 1291              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1292              MR. CARNOVALE:  Or through these H transmitters.

LISTNUM 1 \l 1293              THE CHAIRPERSON:  I see.  All right.

LISTNUM 1 \l 1294              Broadcasters have recommended that all other stations that originate programming should be carried by satellite in their entirety.  The distribution of just their original programming on omnibus channels will not be adequate.

LISTNUM 1 \l 1295              How much will it cost per year to distribute a typical local station by satellite in high definition across the market, including the uplink costs, the transponder costs and the receiver?

LISTNUM 1 \l 1296              Have you done those studies yourself?

LISTNUM 1 \l 1297              MR. CARNOVALE:  We have the costs for distributing our signals via C‑band transponders to our transmitters.  We can't comment on the costs of what it would be on a direct‑to‑home basis.

LISTNUM 1 \l 1298              THE CHAIRPERSON:  Obviously those are your current costs, or are they the HD costs?

LISTNUM 1 \l 1299              MR. CARNOVALE:  These are incremental costs.

LISTNUM 1 \l 1300              Right now our eight high definition transmitters are being fed strictly by fiber.  We are not distributing on C‑band at this point ourselves.

LISTNUM 1 \l 1301              THE CHAIRPERSON:  How do you do it for network programming if you are not using satellite?

LISTNUM 1 \l 1302              You are using fiber across the country, say from Montréal to Vancouver?

LISTNUM 1 \l 1303              MR. CARNOVALE:  There is no French‑language transmitter in Vancouver.

LISTNUM 1 \l 1304              But yes, from Toronto we are feeding Toronto, Ottawa, Montreal, Vancouver in the English language by fiber.  Similarly, from Montréal we feed Québec City, Ottawa, Toronto by fiber.

LISTNUM 1 \l 1305              If we roll out more transmitters, we will of necessity have to go to satellite distribution and then we are into a scenario where we would have to add transponders, typically one transponder for every three high definition signals, and max out at I think another six for the English Network and two or three for the French network.

LISTNUM 1 \l 1306              THE CHAIRPERSON:  How should carriage priorities be determined in the absence of transmitters?  For example, if a service originates in Halifax, should it be required carriage in Halifax, Dartmouth and all the communities within 50 kilometres, all of the south shore as an example, all of Nova Scotia or all of Atlantic Canada, or even all of Canada?

LISTNUM 1 \l 1307              Where shall it be considered a local signal, where will it be a regional signal and where will it be an extra regional signal and how will these terms "local", "regional" and "extra regional" be defined in the regulations, using, say, Halifax, Dartmouth as an example, or any other location.

LISTNUM 1 \l 1308              If it is easier for you to use Toronto, Montreal or Ottawa, we can also work with you.

LISTNUM 1 \l 1309              M. TREMBLAY:   Je n'utiliserai aucun exemple particulier, Monsieur le Président, mais il est évident qu'avec la disparition de transmission hertzienne, ça va forcer une...  En l'absence de contour de rayonnement, contour A, contour B, il devient extrêmement difficile de fixer ses priorités.

LISTNUM 1 \l 1310              Néanmoins un scénario probable, c'est qu'au moment du renouvellement, lorsque les réseaux vont élaborer leurs plans pour leurs termes de licence, qu'ils indiquent, effectivement, la mesure dans laquelle ils entendent continuer à distribuer ou pas des signaux par voie hertzienne.

LISTNUM 1 \l 1311              A ce moment‑là, je pense qu'il appartiendra au Conseil de déterminer par voie de condition quelles sont les zones dans lesquelles on va obliger les distributeurs, les câblodistributeurs à accorder une priorité.

LISTNUM 1 \l 1312              Il est assez difficile maintenant de déterminer jusqu'où va aller cette obligation‑là, mais je peux présumer qu'on va tenter de refléter les territoires actuels pour ne pas briser l'équilibre dans le système.

LISTNUM 1 \l 1313              Je ne sais pas si on doit utiliser des termes, des définitions de marchés comme on a, les marchés centraux, les marchés étendus selon les normes BBM pour caractériser la zone de desserte qui pourrait déclencher un statut prioritaire.

LISTNUM 1 \l 1314              LE PRÉSIDENT:  BBM n'est pas présent à cette audience, donc on ne peut pas leur poser la question, mais comme vous êtes des membres de BBM et que les autres aussi sont des membres de BBM, croyez‑vous que BBM va être capable de trouver une façon de créer ce que CanWest appelle des contours virtuels ?

LISTNUM 1 \l 1315              M. TREMBLAY:  Effectivement la question mérite d'être soulevée parce qu'on va y faire face assez rapidement, donc certainement on pourra soulever la question.

LISTNUM 1 \l 1316              Je siège au conseil de BBM, donc je m'en charge.

‑‑‑ Laughters / Rires

LISTNUM 1 \l 1317              LE PRÉSIDENT:  Il y a beaucoup de gens, d'ailleurs, qui siègent au conseil de BBM.

‑‑‑ Laughters / Rires

LISTNUM 1 \l 1318              LE PRÉSIDENT:  Donc, je présume que beaucoup de gens vont s'en charger.

LISTNUM 1 \l 1319              M. TREMBLAY:  Du travail d'équipe.

LISTNUM 1 \l 1320              LE PRÉSIDENT:  Nous avons parlé un peu plus tôt, quand on a parlé de redevances, certains intervenants ont suggéré, effectivement, que si vous aviez le bénéfice d'une redevance, que vous deveniez des services discrétionnaires au même titre que les canaux spécialisés.

LISTNUM 1 \l 1321              Je sais que vous avez fait la remarque que vous ne voyiez pas la pertinence de changer la réglementation, mais si le Conseil, dans sa sagesse, arrivait à ce type de conclusion là, quel serait l'impact pour Radio‑Canada de devenir un service discrétionnaire ?

LISTNUM 1 \l 1322              MR. RABINOVITCH:  Well, I think we have to go back to the reality of the existing model where 75 percent of the funding for first windows of new Canadian drama comes from your conventional broadcasters.

LISTNUM 1 \l 1323              Your conventional broadcasters are not identical to the specialty broadcasters.  They have an obligation which you help establish, the Act helps establish, to undertake and to develop new programming, first window programming.

LISTNUM 1 \l 1324              Our reality is very simple:  To the extent that the pie shrinks we will do less programming.  To the extent that the pie shrinks, we will be able to cover less people, and yet we have an obligation to try to maximize the number of Canadians who receive our signal.

LISTNUM 1 \l 1325              I think it could be, in its own way, quite devastating.

LISTNUM 1 \l 1326              M. LAFRANCE:  Je veux simplement ajouter que Radio‑Canada joue un rôle assez singulier dans le système canadien de radiodiffusion.

LISTNUM 1 \l 1327              Si on regarde l'ensemble des émissions d'information, des émissions scientifiques, la quantité de dramatiques canadiennes créées par Radio‑Canada, ça me semblerait assez étonnant en termes de politique publique que Radio‑Canada devienne un service discrétionnaire.

LISTNUM 1 \l 1328              Parce que la diversité de l'offre au Canada dépend, à mon avis, de l'existence d'un service public qui est largement distribué, donc ça me semblerait assez, sinon incompatible, du moins suspect avec les objectifs généraux de la Loi de la radiodiffusion et de l'existence même du système.  Ça me semblerait contradictoire.

LISTNUM 1 \l 1329              M. TREMBLAY:  J'ajouterais, Monsieur le Président, je pense que ce serait un pas en arrière compte tenu de ce que nous tentons d'accomplir et d'autre part reléguer Radio‑Canada, les services principaux, à un rôle discrétionnaire irait à l'encontre, finalement, des prescriptions de la Section 3 de la Loi sur la radiodiffusion qui s'attend à ce qu'on soit disponible le plus largement possible à tous les Canadiens.

LISTNUM 1 \l 1330              THE CHAIRPERSON:  In a hybrid model as you have described, obviously there will be locations where you won't be carrying your service.

LISTNUM 1 \l 1331              I think Industry Canada has already started to make up an allotment plan for the digital distribution.  If you are not taking the spectrum, then it could be possible for others to say that they are going to make use of that spectrum for various matters.  Some may be fairly innovative proposals.

LISTNUM 1 \l 1332              If the decision has been made not to make use of that spectrum, are you conceding that it could be used for other purposes?

LISTNUM 1 \l 1333              MR. CARNOVALE:  Ultimately, yes.  I think that if there is a transition date and broadcasters have a choice to either use the spectrum or not, if that date passes then it would go back to the public, in effect.

LISTNUM 1 \l 1334              MR. RABINOVITCH:  If I may add on that, our plan is a plan which we think is financially sound and rational given the existing technology, given the extent to which Canadians in different areas receive their programming signals, not through Hertzian waves.

LISTNUM 1 \l 1335              It is conceivable the government, in its wisdom, might wish us to duplicate the accelerated coverage plan, so it would be therefore quite premature for us to give up those frequencies at this time, but in the long run, if in fact the plan that we put forward is adopted, by definition those frequencies will go back to government for other uses.

LISTNUM 1 \l 1336              THE CHAIRPERSON:  Some of your local stations are carried by satellite, some others are not.  It has been suggested that the Commission mandate the carriage of all local stations by satellite undertakings.

LISTNUM 1 \l 1337              In view of the fact that there some 124 stations that originate local programming ‑‑ not necessarily all yours but here in Canada ‑‑ how much satellite capacity will this require and what will it cost on an annual basis to distribute all of these stations once they have converted to high definition?

LISTNUM 1 \l 1338              You may not ‑‑

LISTNUM 1 \l 1339              MR. STURSBERG:  Well, you know, obviously our preference would be to have all of the local stations carried by satellite, because if they are not carried then it impacts their ability to be able to raise revenue, which is an unfortunate thing because it puts even greater pressure on our ability to be able to do local programming, local news, local information programming, whatever it happens to be.

LISTNUM 1 \l 1340              The Commission has already looked into this matter, has recognized that there are limitations to the ability of the satellite carriers to be able to do this and has made a judgment on it.

LISTNUM 1 \l 1341              Obviously in a high definition environment, as you point out, if one were to say now you must carry all of them in high definition it puts further pressure on the satellite companies' capacity.

LISTNUM 1 \l 1342              Having said all that, if I could put it this way, it is another example of what the President was saying earlier on about the unattractive economic characteristics of high definition.  High definition layers in more costs, whether they are going to be transmission costs, satellite capacity costs, production costs, whatever they have to be, without at the same time generating any more revenues.  So it creates a squeeze on the system as a whole.

LISTNUM 1 \l 1343              THE CHAIRPERSON:  The report that has been put in the record, the report that came from CIEL, the satellite provider, deals with some of these questions.  Those who didn't have a chance to look at it, it was filed in the public record this morning.

LISTNUM 1 \l 1344              Obviously I appreciate that you didn't have a chance to see that report and we are not planning to have any specific questions regarding that report.  I am only saying that the reason why we agreed to put that report on the record was that it was dealing with some of the issues that we are talking about.

LISTNUM 1 \l 1345              M. TREMBLAY:  Monsieur le Président,  j'aimerais ajouter qu'effectivement sur cette question de distribution par satellite, on est effectivement pris dans un cercle vicieux parce qu'avec la nécessité d'une bande passante plus large avec la télévision de définition et le phénomène que de plus en plus les gens dans les milieux excentriques au grand marché sont abonnés à la distribution satellitaire, on a un sérieux problème, effectivement, de rejoindre nos auditoires avec notre programmation locale et régionale.

LISTNUM 1 \l 1346              Donc, c'est vraiment un Noeud Gordien pour l'ensemble des joueurs et pour les consommateurs.

LISTNUM 1 \l 1347              THE CHAIRPERSON:  We spoke earlier about the fact that you are currently feeding your Montréal to Vancouver through HD transmitters through fiber.  Is it a network that belongs to the CBC or is rented from the carriers?

LISTNUM 1 \l 1348              MR. CARNOVALE:  It is a common carrier arrangement.

LISTNUM 1 \l 1349              THE CHAIRPERSON:  And does that network ‑‑ obviously, they have facilities to cover most of populated Canada wherever there is fibre, I would suspect?

LISTNUM 1 \l 1350              MR. CARNOVALE:  Yes, but the reason for going satellite is also for the signals to be available to cable companies along the way.  So it wouldn't be just to feed our transmitters.  It would be to have the added benefit of reaching all the cable companies, including the very small ones.

LISTNUM 1 \l 1351              THE CHAIRPERSON:  But in the major markets where you are already broadcasting, obviously, you are feeding the cable operators in these markets through fibre as well.  Take Montreal, Videotron is getting your signal probably even within your building or are you bringing your signal to their head‑end?

LISTNUM 1 \l 1352              MR. CARNOVALE:  It depends on the cable company.  Some of them are getting a direct feed from within our premises.  Others are actually able to pick it up over the air.

LISTNUM 1 \l 1353              THE CHAIRPERSON:  I see.  So it varies from one operator to the other?

LISTNUM 1 \l 1354              MR. CARNOVALE:  Yes, and it depends ‑‑

LISTNUM 1 \l 1355              THE CHAIRPERSON:  There's no rules?

LISTNUM 1 \l 1356              MR. CARNOVALE:  Sometimes one cable operator will hand it off to the other but not necessarily.

LISTNUM 1 \l 1357              THE CHAIRPERSON:  It depends on the arrangement they have among themselves.

LISTNUM 1 \l 1358              A number of parties in this proceeding have suggested imposing a fee for carriage and relying on cable and satellite delivery rather than off‑air transmission, so totally cable and satellite distribution.  This will increase the monthly rates that existing subscribers must pay.  In addition, households relying on off‑air viewing will have no alternative but to subscribe to a distribution service if they are to continue to enjoy their Canadian services.

LISTNUM 1 \l 1359              Have you made any estimates as to how many households rely on off‑air viewing?  I know that you have given us some percentages based on surveys that you have conducted but do you have an idea of how many households that percentage represent?

LISTNUM 1 \l 1360              M. TREMBLAY : Monsieur le Président, je n'ai pas de chiffres précis en tête sur le nombre de foyers, sauf que, à l'heure actuelle, 90 pour cent des Canadiens choisissent, effectivement, de s'abonner au câble et au satellite, donc, de payer pour la réception de leur service.  Ça laisse un univers qui est encore servi par le biais de la télévision herzienne, et dans plusieurs marchés, on a observé même des taux de pénétration des distributeurs satellitaires aux terrestres qui est de l'ordre de 97 à 98 pour cent.  Donc, effectivement, il y a un très net déclin.

LISTNUM 1 \l 1361              LE PRÉSIDENT : Il y a, cependant, des différences entre le marché anglophone et le marché francophone.  De quelle nature est cette différence?

LISTNUM 1 \l 1362              MR. RABINOVITCH:  If I remember correctly, there are certain communities such as Windsor, Montreal, where the number of people who still receive or want to receive their signal off air is quite significant.  In think in Montreal the francophone community is about 22‑23 percent.  I don't want to be quoted on the precise number but it is quite significant.

LISTNUM 1 \l 1363              So that is why we feel that we cannot abandon those people and force them to go with a BDU, that we must be able, to the extent that it is financially logical, have over‑the‑air services as well as BDU service.

LISTNUM 1 \l 1364              THE CHAIRPERSON:  Are you of the view that this is a policy that applies to CBC/Radio‑Canada or it is a policy that should apply to all the current over‑the‑air broadcasters?

LISTNUM 1 \l 1365              MR. RABINOVITCH:  Yes, that is a policy that applies to CBC/Radio‑Canada and it will be up to you to decide how much further.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1366              THE CHAIRPERSON:  But you don't have any comments to make?  But they are going to be making comments on your proposals.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1367              MR. RABINOVITCH:  Why am I not surprised?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1368              THE CHAIRPERSON:  Because we have already seen some who are here about ‑‑ in reading the last couple of days papers or even on watching television or listening radio, we are already hearing some comments on your proposal.  But you don't have any comments to make on theirs?

LISTNUM 1 \l 1369              M. LAFRANCE : Vous mentionnez pour le marché francophone qu'il y a certaines différences.  Une des choses particulièrement intéressant c'est que, comme le Président le mentionnait, c'est à Montréal, par exemple, qu'on trouve le plus grand nombre de gens qui captent la télévision de façon traditionnelle, off air, et le modèle hybride vient combler les marchés urbains.  C'est dans les marchés urbains qu'on trouve le plus grand nombre de non‑abonnés qui captent ça.  Alors, le modèle hybride vient régler la grande partie de ces cas‑là.

LISTNUM 1 \l 1370              LE PRÉSIDENT : On va parler un peu de sous‑titrage, closed captioning.  Mes premières questions, à tout le moins, sont en français puis sont spécifiques au marché francophone puisque, effectivement, on vit avec deux réalités, la réalité du marché anglophone et la réalité du marché francophone.

LISTNUM 1 \l 1371              Dans leur mémoire, la majorité des télédiffuseurs s'oppose au sous‑titrage de la publicité et des contenus promotionnels.  Cette question‑là, elle est générale parce qu'elle s'applique également autant à CBC.  Pouvez‑vous élaborer davantage sur cette question‑là, et pourquoi, selon vous, la faisabilité du sous‑titrage de la publicité n'est pas possible?

LISTNUM 1 \l 1372              M. LAFRANCE : Je peux seulement répondre sur la question de la publicité.  C'est qu'on encourage fortement la plupart des annonceurs à sous‑titrer leurs émissions, à sous‑titrer leur publicité.  Donc, on l'encourage fortement, mais ça reste leur production.  Donc, ils sont encouragés à le faire dès qu'ils annoncent chez nous.

LISTNUM 1 \l 1373              LE PRÉSIDENT : Mais certains, surtout les organismes qui représentent les personnes malentendantes, disent que, malgré tout ça, ça devrait être la responsabilité du télédiffuseur de s'assurer que les messages sont codés pour malentendants.

LISTNUM 1 \l 1374              MR. CARNOVALE:  I think when it comes to commercial announcements that it really should be the responsibility of the advertiser to do that because it is their content and to do closed captioning of a commercial properly they would want to control ‑‑ they need to put the effort into where they want the captioning positioned, exactly what it says, exactly what the ancillary information is in terms of music, lyrics or whatever.

LISTNUM 1 \l 1375              LE PRÉSIDENT : Et quel serait l'impact pour ‑‑ what will be the impact for both CBC and Radio‑Canada if the Commission was to make the determination that 100 percent of the programming shall be closed captioned including promotions and advertising?

LISTNUM 1 \l 1376              MR. STURSBERG:  Well on CBC right now 100 percent of the programming is closed captioned aside from the advertising but I think Ray's opinion is the correct one, that really closed captioning there ‑‑ it should be the advertiser's responsibility to make sure that closed captioning reflects what it is they are trying to say in the ad.

LISTNUM 1 \l 1377              MR. CARNOVALE:  There is also a practical problem that with some campaigns the material gets delivered at the absolute last minute and it is in the program log, it goes to air that night, it would just be physically impossible to go through the process of taking a late delivery and then trying to determine how to caption it.

LISTNUM 1 \l 1378              M. LAFRANCE : Sur la question du 100 pour cent aussi, il y a un problème particulier qui se pose.  Je pense qu'en français, on est à 90 pour cent environ.  Le problème se pose avec la technologie qu'on utilise spécifiquement sur les émissions en direct.  Alors, il n'y a pas de problème actuellement.  Toutes les émissions qui ne sont pas en direct sont, donc, en closed captioning.  Mais sur les émissions en direct, il y a un problème particulier, et c'est un problème qui n'est pas simple à régler.  C'est‑à‑dire que le 100 pour cent, la technologie actuellement rend difficile le closed captioning de toutes les émissions en direct pour un certain nombre de questions liées, entre autres, à la langue française.

LISTNUM 1 \l 1379              Voulez‑vous expliquer pourquoi c'est plus complexe?

LISTNUM 1 \l 1380              MR. CARNOVALE:  The closed captioning technology requires specialized ‑‑ the system we use, which is the stenographic keyboard that is linked to a computer, requires people who are specially trained.  There is actually a limited supply in the French‑Canadian market and it gets even more difficult at off‑hours like at 11:00 p.m. when our sports broadcast is on the air.  It is live.  It is a talk show and the availability of closed captioners at that time of the day is difficult.

LISTNUM 1 \l 1381              M. TREMBLAY : Monsieur le Président, j'ajouterais une observation.  Peut‑être si on veut faire bouger les choses rapidement, peut‑être que le Conseil pourrait interdire la diffusion de messages qui ne nous sont pas amenés avec des sous‑titrages.

LISTNUM 1 \l 1382              LE PRÉSIDENT : Et Radio‑Canada serait prêt à se passer des revenus que ça représente?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1383              M. TREMBLAY : Je pense que les messages arriveraient sous‑titrés.

LISTNUM 1 \l 1384              LE PRÉSIDENT : Un des problèmes qui est bien identifié, c'est que, particulièrement au Canada français, à l'interne, Radio‑Canada a sa propre politique de normalisation, et vos concurrents comme TVA et TQS ont les leurs, donc, il n'y a pas de règles communes de l'industrie pour avoir des normes universelles, puis probablement encore moins avec les pays européens qui vous fournissent aussi de la programmation.

LISTNUM 1 \l 1385              Est‑ce qu'il n'y aurait pas une...  Il ne serait pas pertinent qu'il y ait un comité multipartite qui comprenne à la fois l'ensemble des télédiffuseurs, pas uniquement herziens, ça peut être aussi des canaux spécialisés, qui diffusent en langue française pour travailler et pour mettre en place des normes communes?

LISTNUM 1 \l 1386              Je vois par les dossiers qui sont présents devant nous que vous travaillez avec le Réseau québécois du sous‑titrage.  Je vois aussi que TVA travaille avec le réseau québécois du sous‑titrage.

LISTNUM 1 \l 1387              Est‑ce qu'il n'y aurait pas possibilité d'avoir une activité commune qui permettrait, effectivement, de régler peut‑être, une fois pour toutes, cette question de normalisation et probablement aurait aussi comme bénéfice de faciliter les meilleurs moyens pour identifier les meilleurs systèmes pour faire du sous‑titrage à la fois en direct et sur les émissions déjà pré‑produites?

LISTNUM 1 \l 1388              M. LAFRANCE : Je peux vous dire qu'il y a déjà des discussions en cours.  Dans ce domaine‑là, on n'est pas concurrent, en tout cas.  Il y a déjà, donc, des discussions en cours.  Effectivement, tout le monde veut améliorer l'affaire.  On n'a pas les mêmes technologies, ce qui complique la chose, mais il y a déjà des discussions en cours avec ce que vous appelez nos concurrents pour tenter de voir comment on peut, effectivement, essayer de faire avancer la situation.  Donc, ça se fait.  On discute actuellement.

LISTNUM 1 \l 1389              LE PRÉSIDENT : Avez‑vous initié des discussions avec les...  Je vois que... dans la lettre du CSA, je vois qu'on a introduit le sous‑titrage également dans la programmation, la télévisuelle en France.  Eux aussi doivent être confrontés aux mêmes problèmes d'accentuation.  Donc, est‑ce que vous avez ouvert un dialogue avec eux?

LISTNUM 1 \l 1390              M. LAFRANCE : J'avoue que je ne suis pas certain pour les Européens.  Je sais que ça se fait ici, donc, chez les diffuseurs francophones, mais je peux vérifier, puis je vais revenir avec une réponse.

LISTNUM 1 \l 1391              LE PRÉSIDENT : Parce que, effectivement, je sais que...

LISTNUM 1 \l 1392              M. LAFRANCE : Mais ce n'est pas une mauvaise idée, en tout cas.

LISTNUM 1 \l 1393              LE PRÉSIDENT : ...vous oeuvrez sur la scène internationale, Monsieur Lafrance.  Alors, peut‑être que vous pourriez...

LISTNUM 1 \l 1394              M. LAFRANCE : On va leur en parler.

LISTNUM 1 \l 1395              LE PRÉSIDENT : ...leur en parler, puis peut‑être nous tenir informés, puis tenir vos collègues informés aussi puisque c'est d'un intérêt commun d'avoir un système, probablement un système unique.

LISTNUM 1 \l 1396              On a couvert pas mal toutes nos questions.  En fait, moi, j'ai couvert les miennes en tout cas, si mes collègues en ont.

LISTNUM 1 \l 1397              Monsieur French?

LISTNUM 1 \l 1398              COMMISSIONER FRENCH:  Your model for Fee for Carriage seems to me to provide a good deal of flexibility, and I guess that flexibility would, inevitably, be necessary for CBC Radio Canada, which has a number of unique features that are not duplicated by the other players.

LISTNUM 1 \l 1399              But I am asking myself whether the nature of the model doesn't ask too much of the Regulatory Agency, and I suppose, by ricochet, all of the other players.

LISTNUM 1 \l 1400              I repeat, I am not referring to Radio Canada, as such, I am simply saying that if there is this constant, rolling, re‑negotiation or bargaining process, the burden of which is a kind of carrot, represented by Fee for Carriage in return for commitments, how would we ensure horizontal equity in the system?

LISTNUM 1 \l 1401              MR. RABINOVITCH:  I think you have this already in the system, in terms of the negotiation, the explanation, the positioning that goes on in each of the licensing hearings.

LISTNUM 1 \l 1402              What we are suggesting is ‑‑ we are not asking to make a grab for funds, we are asking for funding through Fee for Carriage to enhance and expand services.

LISTNUM 1 \l 1403              You make statements from time to time as to areas you would like to see covered, or have more money put into it.

LISTNUM 1 \l 1404              For example, in this call you talk about HD and you talk about drama programming.

LISTNUM 1 \l 1405              It is up to the licence applicant, namely, ourselves, at renewal time, to come forward to you with a proposal in terms of the areas we would like covered.  And it would have to be in addition to what we would be doing normally.  They would have to be transparent.  They would have to be measurable.

LISTNUM 1 \l 1406              It wouldn't be rolling, it would be a commitment to operate and to perform a certain series of functions over a period of time.

LISTNUM 1 \l 1407              I don't know about horizonal equity.  I think this is a function of each person, and each undertaking.

LISTNUM 1 \l 1408              But, I dare say, our system, and what we are putting forward to you, is distinctive from our colleagues in the private sector, in that we are not making a claim or asking you to help skate us back onside financially.  We are asking you to help us move forward, to achieve objectives that we have under the Act, and to achieve objectives that you have for us.

LISTNUM 1 \l 1409              COMMISSIONER FRENCH:  I do see the virtue of the approach in your case, though I suggest to you, respectfully, that what you are, in effect, asking us to do is not skate you back onside financially, but palliate the failure of public financing, about which you have been eloquent.

LISTNUM 1 \l 1410              You sense is, in our dealings with the diverse and wonderful world of private broadcasters, that this model would not create substantial additional burdens in terms of the kind of information required, in terms of the kind of judgments required by the Regulator, in order to be fair to all of the players; but, rather, that we build some kind of ‑‑ presumably, we would build some kind of quasi‑common law set of principles, as we have in the past in certain other cases, and it would become clear that, by offering something in the nature of X, Y or Z, you could expect something in the nature of so many cents or so many dollars per month per subscriber.

LISTNUM 1 \l 1411              Is that the idea?

LISTNUM 1 \l 1412              MR. RABINOVITCH:  The more guidance you can give us, the better, in terms of what are your objectives, what are your priorities.  Do they dovetail with us?

LISTNUM 1 \l 1413              We would be expected, I believe, to come forward to you with a fully costed request:  This is what it will cost to do X, Y and Z.  This is what we are committing against what we feel a subscriber fee can raise.

LISTNUM 1 \l 1414              From that point of view, I think it would be quite straightforward, in terms of benefits generated by funds generated.

LISTNUM 1 \l 1415              COMMISSIONER FRENCH:  So we are going to import the Telecom model, where we will swear you all in and have you cross‑examined?

LISTNUM 1 \l 1416              MR. RABINOVITCH:  No, you will do worse than that.  You will basically be able to embarrass us, if we are not performing, and I would presume, over time, because we have to come back regularly to you, that you would be able to punish us if we don't perform.

LISTNUM 1 \l 1417              This is the normal way in which we operate with the Regulator.

LISTNUM 1 \l 1418              But it is very much our intention to perform.

LISTNUM 1 \l 1419              COMMISSIONER FRENCH:  The term "punishment" isn't really very realistic, is it?

LISTNUM 1 \l 1420              MR. RABINOVITCH:  You could pull our licence.

LISTNUM 1 \l 1421              COMMISSIONER FRENCH:  We punish people inadvertently, but we never do it intentionally.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1422              COMMISSIONER FRENCH:  Thank you very much.

LISTNUM 1 \l 1423              THE CHAIRPERSON:  Commissioner Duncan.

LISTNUM 1 \l 1424              COMMISSIONER DUNCAN:  Thank you.  I have a couple of questions.

LISTNUM 1 \l 1425              First of all, I want to look at the bar graph that you gave us this morning, at page 2.

LISTNUM 1 \l 1426              You said in your address that the customers already consider that they are paying the BDUs for the over‑the‑air signals.  I am curious, in your study, if you asked the question:  How much do they think they are paying for those signals?

LISTNUM 1 \l 1427              If you didn't ask the question, I would be interested in your opinion as to how much, or what percentage of that monthly fee they feel they are paying for over‑the‑air signals.

LISTNUM 1 \l 1428              MR. TREMBLAY:  From looking at the study now, I don't think we have probed that aspect specifically, how much they think they pay, and whether we have any opinion.

LISTNUM 1 \l 1429              I think that the cable bills of consumers vary a great deal, depending upon the range of service they buy, obviously.

LISTNUM 1 \l 1430              If you are a subscriber to digital cable, or you have bought the whole satellite package, that may not be a very important perception to you, because you are already paying a pretty hefty bill for those services.

LISTNUM 1 \l 1431              The short answer is that, no, we have not measured that kind of price point, and I think it would be very difficult to ascertain.

LISTNUM 1 \l 1432              COMMISSIONER DUNCAN:  In your own view, because I notice that you did say ‑‑ I think the President said that you contest the assumption that it should be a pass‑through charge.

LISTNUM 1 \l 1433              So, I am wondering, in your own view, how many dollars would you suspect should be attributed to over‑the‑air?

LISTNUM 1 \l 1434              I guess it would probably be easier to give us a range than an absolute amount.

LISTNUM 1 \l 1435              Do you have a view on that?

LISTNUM 1 \l 1436              MR. RABINOVITCH:  I find it difficult to go there, quite frankly, because I believe that the model we put forward would determine the amount that we would be able to receive.

LISTNUM 1 \l 1437              And to the extent that you gave us guidance, saying that nobody can expect a fee of more than X, that would help us as we put together the package that we would bring to you.

LISTNUM 1 \l 1438              COMMISSIONER DUNCAN:  I would like to continue on this topic for a few minutes, if you will bear with me.

LISTNUM 1 \l 1439              What you would be expecting, then, is that the BDUs would be giving up that amount of their revenue.

LISTNUM 1 \l 1440              Is that correct?

LISTNUM 1 \l 1441              MR. RABINOVITCH:  What I contested before was, we don't accept the automatic assumption that this cost must be passed through.

LISTNUM 1 \l 1442              We believe that the basic fee is generated, to a great extent, by the services provided, which include our conventional services.

LISTNUM 1 \l 1443              So it doesn't follow for us that there must be an automatic pass‑through, especially given the rate at which conventional services have been increased over the years.

LISTNUM 1 \l 1444              COMMISSIONER DUNCAN:  I think one of my colleagues mentioned that, of course, there were explanations for those increases, at least in basic cable.

LISTNUM 1 \l 1445              I notice in the literature that we have been presented that different parties are saying that the monthly subscriber bill might increase between $2 and $19 a month.

LISTNUM 1 \l 1446              MR. STURSBERG:  In fairness, I think that these amounts of money are completely speculative.

LISTNUM 1 \l 1447              As the President was saying ‑‑ and this is the burden of our position ‑‑ that is completely within your control.

LISTNUM 1 \l 1448              So that you would say yourselves, even if the total quantum was passed through, which, as the President says, need not be the case, then you would decide on the basis of the propositions that you would accept or not accept.

LISTNUM 1 \l 1449              COMMISSIONER DUNCAN:  Thank you.  I appreciate that, I was just trying to get some guidance.

LISTNUM 1 \l 1450              I have another question.  Picking up on Michel Arpin's question about the over‑the‑air stations, the stations that are delivering local programming, which are not carried on satellite, I understand that there are 124.  How many of that 124 would be CBC stations?

LISTNUM 1 \l 1451