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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE 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 29, 2006 Le 29 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 29, 2006 Le 29 novembre 2006
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Independent Specialties 797 / 4305
Vision TV 818 / 4417
APTN 832 / 4513
Stornoway Communications 871 / 4704
High Fidelity HDTV 887 / 4789
Rogers Communications 911 / 4924
Telco TV 1002 / 5448
Canadian Cable Systems Alliance Inc. 1050 / 5732
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon resuming on Wednesday, November 29, 2006
at 0833 / L'audience reprend le mercredi
29 novembre 2006 à 0833
LISTNUM 1 \l 1 \s 42974297 LE PRÉSIDENT : À l'ordre, s'il vous plaît. Order, please.
LISTNUM 1 \l 14298 Madame la Secrétaire. Mrs. Secretary.
LISTNUM 1 \l 14299 LA SECRÉTAIRE : Merci, Monsieur le Président.
LISTNUM 1 \l 14300 For the information of the parties and participants in these proceedings, we would just like to remind you that there is additional information that was filed or added to the public record since the commencement of this hearing. The documents are available in the examination room.
LISTNUM 1 \l 14301 Également, l'interprétation gestuelle est disponible durant la durée de toute cette audience, et sera disponible également sur demande. Alors, on demanderait, s'il y a des personnes dans l'assemblée qui ont besoin de l'interprétation, de m'en faire part. Merci.
LISTNUM 1 \l 14302 We will now proceed with the next presentation of the Independent Specialties. I would ask Mr. Bill Roberts and his team to come forward for their presentation.
‑‑‑ Pause
LISTNUM 1 \l 14303 THE SECRETARY: Mr. Roberts, after the introduction of your panel, you will have 10 minutes for your presentation.
LISTNUM 1 \l 14304 When you are ready, thank you. Quand vous êtes prêt, merci.
PRÉSENTATION / PRESENTATION
LISTNUM 1 \l 14305 M. ROBERTS : Merci. Je reviens.
‑‑‑ Pause
LISTNUM 1 \l 14306 M. ROBERTS : Comme c'est tôt le matin, j'ai une mauvaise présentation. Je suis ici pour deux présentations ce matin.
LISTNUM 1 \l 14307 En tout cas, bonjour, Monsieur le Président, membres du Conseil, personnel et équipe du Conseil.
LISTNUM 1 \l 14308 Je suis Bill Roberts, Président et chef du conseil d'administration de SVOX, qui inclut Vision TV, One: the Body, Mind & Spirit channel, et The Christian Channel.
LISTNUM 1 \l 14309 Avec moi, aujourd'hui, sont mes collègues Martha Fusca de Stornoway Communications; Jean LaRose de APTN; et aussi avec nous est Slava Levin, Président et aussi chef du conseil d'administration de Ethnic Channels Group... mes collègues.
LISTNUM 1 \l 14310 Mr. Chair, the four of us are appearing on behalf of a group of eight independent programmers, services not affiliated with any of the distribution undertakings or any of the large broadcast groups. They are also participating in this process.
LISTNUM 1 \l 14311 Our channels include analog, Category 1 and Category 2 digital and satellite‑to‑cable undertakings.
LISTNUM 1 \l 14312 We offer content in English, French and a range of third‑language services, including Asian, European and Aboriginal communities.
LISTNUM 1 \l 14313 Our programming targets niches that are not being served by other broadcasters. Individually and as a group these independent services enrich the diversity of the Canadian broadcasting system.
LISTNUM 1 \l 14314 While not directly subject to the policies being considered in this proceeding, we are profoundly concerned by the potential impact changes in the regulated system will have on the ability of our services to contribute to the achievement of the objectives of the Broadcasting Act.
LISTNUM 1 \l 14315 As independent channels, we operate on some of the smallest economies in the system. We face substantial competitive disadvantages in our efforts to secure carriage, attract subscribers, market our programming, grow audiences and benefit from opportunities in a multimedia environment.
LISTNUM 1 \l 14316 We exist and compete in an extraordinarily complex system. Without the advantage of a corporate relationship with a broadcast distribution undertaking or the leverage of a large broadcast or large media group, we are more dependent than the other services on the relative stability provided by the CRTC's regulatory system and regulation of that system.
LISTNUM 1 \l 14317 Changes to one area of the regulatory regime may have indirect but serious consequences in other areas of the broadcasting system. Our services are among the most exposed to those consequences.
LISTNUM 1 \l 14318 Given that we will hear from Martha and Jean later today, and you will be hearing from me in a few moments as well on behalf of Vision TV, perhaps I can ask Slava Levin to expand on these introductory remarks.
LISTNUM 1 \l 14319 Slava.
LISTNUM 1 \l 14320 MR. LEVIN: Thank you, Bill, and thank you, commissioners, for this opportunity.
LISTNUM 1 \l 14321 Commissioners, at Ethnic Channels we approach broadcasting primarily from a business perspective. Our goal is to deliver third‑language programming that Canadian viewers want to watch at a cost they can afford. We would like to make a reasonable return on our investment.
LISTNUM 1 \l 14322 We know that the broadcasting industry is highly regulated and that we are expected to uphold our side of the regulatory bargain to carry out our business. There are tradeoffs in the regulatory system but I know from firsthand experience that without appropriate regulations there would be far fewer Canadian television choices.
LISTNUM 1 \l 14323 My friends with me on this panel today each have their own different objectives but I think we all agree on this last point.
LISTNUM 1 \l 14324 In our view, the existing regulatory regime, including the TV Policy, has helped the mature conventional broadcasters evolve into industry leaders. At the same time, it has allowed new entrants to join the system.
LISTNUM 1 \l 14325 New entrants enhance the achievements of the policy objectives of the Broadcasting Act, helping to innovate and fill niches that are underserved. They provide consumers with a wider range of content choices.
LISTNUM 1 \l 14326 One of the policy objectives the Commission has emphasized in recent years is the reflection of cultural diversity in the Canadian broadcasting system. We believe the concept of diversity needs to include diversity of voice in the system. Therefore, the regulatory environment should as a priority continue to encourage the launch and success of independent services.
LISTNUM 1 \l 14327 As independent broadcasters, many of our companies aim to reach diverse communities to deliver programming that would not otherwise be available to individuals from a wide range of cultural backgrounds. As a result, many of our business models are based on reaching subscribers and audiences that number in the low thousands rather than the millions being targeted by the larger conventional networks.
LISTNUM 1 \l 14328 Small changes in the regulatory environment can have a big impact on us. You can appreciate that a big change like the request by the broadcasters for a fee for carriage gives us cause for concern. The implementation of that suggestion poses a very real and materialist risk to the operation of the newest new services in the industry.
LISTNUM 1 \l 14329 The extra cost each year for television is going to cost some subscribers to rethink how they spend their entertainment dollars. Some may accept it as the price that we pay and continue to subscribe to all of the services they had previously selected, but some will choose to stop subscribing to discretionary services to offset the additional cost without giving up TV altogether, and some will walk away from the Canadian broadcasting entirely, turning to alternative media choices, whether legal or illegal.
LISTNUM 1 \l 14330 From the perspective of my company Ethnic Channels Group, I can tell you that the gray and black market already represents direct and significant competition.
LISTNUM 1 \l 14331 How many subscribers and viewers will leave the broadcasting system is speculative but for the sake of discussion let's project as few as 5 percent will make that decision. If 5 percent of Ethnic Channels Group subscribers drop out of the system, then we are out of business because as a new entrant with a narrowly targeted demographic for our services, our channels are designed to run with only a few thousand subscribers.
LISTNUM 1 \l 14332 That is the difference in this discussion comparing over‑the‑air broadcasters and independent services. For the large networks, this is about subsidizing technology or increasing profits without giving up benefits they already enjoy. For independents, it is about staying in business.
LISTNUM 1 \l 14333 We wouldn't have gotten into the industry if we weren't prepared to assume some risk. The risk has already increased over the past number of years with some of the regulatory and other changes we have seen.
LISTNUM 1 \l 14334 At Ethnic Channels we believe, as do our colleagues of the other independent services, that we make an important contribution to the achievement of the policy objectives of the Broadcasting Act and, while particular to the reflection of Canada's cultural diversity, that we already face our fair share of the risk.
LISTNUM 1 \l 14335 As you contemplate updating the policy that sets the rules for the largest broadcasters in Canada, please keep in mind changes you make to the policy are going to impact the smallest broadcasters too.
LISTNUM 1 \l 14336 I may be the newest entrant on this panel but I have been around long enough to know that I should let Martha have the last word. Thank you.
LISTNUM 1 \l 14337 Martha.
LISTNUM 1 \l 14338 MS FUSCA: Thanks, Slava, and greetings to you, Vice‑Chair, commissioners and staff.
LISTNUM 1 \l 14339 It is extraordinarily difficult to start up a new programming service in Canada. The barriers to entry are actually quite high and even if you manage to get your foot in the door, it is not a level playing field once you are inside.
LISTNUM 1 \l 14340 In some ways that makes perfect sense because the mature conventional networks make wonderful contributions to the Canadian broadcasting system. We accept that they are deserving of priority status and that the TV Policy should continue to reflect the important role conventional services play in the system.
LISTNUM 1 \l 14341 As independent services, we have a different reality. What I think we are really asking as you evaluate the framework for the over‑the‑air television is that you keep in mind the important role we play as well. If the system skews too heavily in favour of one sector, others will suffer.
LISTNUM 1 \l 14342 I will add more on behalf of Stornoway later today, so let me just add in conclusion, before we answer any questions that you may have for this group, this is the first time Canada's independent services have worked together like this in a formal proceeding. We appreciate the opportunity and we certainly intend to continue our dialogue as the CRTC proceeds with other planned reviews over the next year.
LISTNUM 1 \l 14343 We will be pleased to answer any questions you may have at this time.
LISTNUM 1 \l 14344 THE CHAIRPERSON: Thank you very much and welcome as a group. I think it is rewarding that you voice your view and we appreciate that you form that group and we wish it long standing.
LISTNUM 1 \l 14345 I will ask Commissioner Duncan to ask you the first questions.
LISTNUM 1 \l 14346 COMMISSIONER DUNCAN: Good morning, Mr. Roberts and panel.
LISTNUM 1 \l 14347 We understand your concern is that subscriber fees for over‑the‑air broadcasters could have an adverse ‑‑ in fact, will have an adverse effect on your bottom line either because subscribers will revisit their buying decisions to offset rate increases or because the BDUs will force down the fees paid to independent specialties.
LISTNUM 1 \l 14348 You indicate that channels not affiliated with a BDU or without the leverage of international brands would be the most targeted, the most likely to be impacted.
LISTNUM 1 \l 14349 I am just wondering if you have conducted any market testing to assess price elasticity and determine at what point subscribers will start to disconnect services.
LISTNUM 1 \l 14350 MR. ROBERTS: No, Commissioner, we have not had an opportunity to conduct those studies but we do understand that in the subsequent process of this hearing there will be an opportunity to submit written comment and we are looking at doing just that in that context.
LISTNUM 1 \l 14351 However, we may have some anecdotal information that we can share with the panel.
LISTNUM 1 \l 14352 Martha, do you have something you can add here?
LISTNUM 1 \l 14353 MS FUSCA: Actually just before we entered the room, Slava and I were sharing misery stories and the one thing that ‑‑ it is not price point related at this stage.
LISTNUM 1 \l 14354 What it was was being shifted into a different package and it wasn't 5 percent. We actually lost somewhere around 25 percent of our subscribers because we were moved from one package to another without anything other than a brief letter of notice and absolutely no discussion at all.
LISTNUM 1 \l 14355 So when you take the notion of price and/or packaging, you also have to understand that we have absolutely no leverage. So we really look to you to think about these things very thoroughly and hopefully comprehensively before making any of these decisions.
LISTNUM 1 \l 14356 COMMISSIONER DUNCAN: So this shift in packaging has happened? You are not speculating, it has happened?
LISTNUM 1 \l 14357 MS FUSCA: It has happened to Stornoway Communications. It happened with ichannel. And the whole pricing issue, you quite rightly pointed out that we are being ground down, and again, when you have no leverage, what option do you have?
LISTNUM 1 \l 14358 We have absolutely no option at all. It is either you try to accept and try to make do with what you have got or you just shut your door down. And after spending millions of dollars and collectively tens of millions of dollars, that is a pretty difficult pill to swallow.
LISTNUM 1 \l 14359 COMMISSIONER DUNCAN: Thank you, I appreciate ‑‑
LISTNUM 1 \l 14360 MR. ROBERTS: Commissioner Duncan, just to add from Vision's perspective, we did experience when Vision itself was moved from Channel 24 to 59, then 61, then 60, that we lost approximately a third of our audience and it took several years to rebuild that audience. So a third is quite significant.
LISTNUM 1 \l 14361 And also I can share with the panel that we experience significant pressure on our subscriber rates as it is from the BDUs.
LISTNUM 1 \l 14362 So those are two facts.
LISTNUM 1 \l 14363 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 14364 So in your written comments you expect to be able to include a survey or some comment on what the price might be, price tolerance, price elasticity?
LISTNUM 1 \l 14365 MR. ROBERTS: If that would be helpful for the Commission, yes.
LISTNUM 1 \l 14366 COMMISSIONER DUNCAN: Thank you.
LISTNUM 1 \l 14367 I am just wondering if the Commission were to develop a framework that establishes fee for carriage for the over‑the‑air broadcasters, are there measures or safeguards that you would like to recommend to us be included that would ensure the viability of independent systems like yourselves?
LISTNUM 1 \l 14368 MR. ROBERTS: I will begin with a general comment and then ask Slava to respond in detail.
LISTNUM 1 \l 14369 The purpose of our presentation here this morning ‑‑ which is a prototype for this group of eight, I must add ‑‑ is that don't forget us is what we are trying to say here.
LISTNUM 1 \l 14370 COMMISSIONER DUNCAN: Uh‑huh.
LISTNUM 1 \l 14371 MR. ROBERTS: There is a ripple effect of any decision made for the over‑the‑air broadcasters that will impact these truly independent entities and help us in dialogue to see the system as a whole.
LISTNUM 1 \l 14372 Just as local television in Trail, B.C. is important to the system or in Rivière‑du‑Loup is important to the system, we, as in a sense local to different kinds of communities, are important to that system and we would like to see the appropriate safeguards in place around a policy that encourages a diversity of those very independent voices in the system.
LISTNUM 1 \l 14373 Slava?
LISTNUM 1 \l 14374 MR. LEVIN: I am sorry, I am actually losing my voice. I am just getting over a cold, so I am just going to pass it over to Martha to answer on my behalf.
LISTNUM 1 \l 14375 COMMISSIONER DUNCAN: All right.
LISTNUM 1 \l 14376 MS. FUSCA: I completely agree with what Bill has said already. In my submission for Stornoway Communications, I will actually ask the Commission to consider putting in some measures.
LISTNUM 1 \l 14377 It's early days in terms of what those measures are and that's why I'm going to encourage the Commission to also take a holistic view of the various proceedings, as opposed to doing them in a piece meal fashion. Having said that, I do have something that might be considered a radical thought, which is that we actually establish minimums.
LISTNUM 1 \l 14378 At a certain point, if the Commission does truly care about cultural diversity and new voices in the system, a little competition within the broadcasting landscape, any number of those kinds of issues, it's really going to be important that there is sort of a bottom line set with what we can actually receive as revenue.
LISTNUM 1 \l 14379 The numbers that I have in mind, which are very early, I would rather not discuss them at this stage, are not in any way, shape or form anything that anybody should be, you know, violently opposed to or even slightly opposed to. But I think that that's where we're going to need to go because we cannot defend ourselves. That's as simple as it gets.
LISTNUM 1 \l 14380 COMMISSIONER DUNCAN: And I appreciate those comments. Mr. Roberts.
LISTNUM 1 \l 14381 MR. ROBERTS: Madam Commissioner, I think Jean from APTN has a few comments to add as well.
LISTNUM 1 \l 14382 COMMISSIONER DUNCAN: Sure.
LISTNUM 1 \l 14383 MR. LAROSE: If the Commission were to decide on a fee for carriage for over‑the‑air, I think that some of the safeguards that the Commission has rightfully put in place in the past years in some of the initiatives you've taken, such as mandatory carriage, such as either a subscriber fee or other initiatives that have ensured that services like APTN have an opportunity to survive and thrive, may need to be maintained and/or expanded.
LISTNUM 1 \l 14384 I think that there needs to be a trade‑off somewhere to ensure that we, as broadcasters, have opportunities to provide the services to the populations we serve.
LISTNUM 1 \l 14385 And as well, I think there needs to be a consideration given to the fact that should that happen, that there will be pressures on the system to actually maintain a basic subscription fee that is reasonable and you quite rightly ask what could be reasonable.
LISTNUM 1 \l 14386 I guess from my audience perspective, reasonable is sometimes a different ‑‑ is at a different level than what might be reasonable for the average Canadian, given the revenue of aboriginal people.
LISTNUM 1 \l 14387 So, certainly the impact on us of a $5.00 to $6.00 per month increase in basic might have quite a significant impact and what it may mean in our attempts to reach our audience in remote and northern communities, communities that are currently under‑served would be much greater than those in the major environment.
LISTNUM 1 \l 14388 So, I think that the Commission, from our perspective, would need to put in safeguards of that nature to ensure that what you have helped us establish by virtue of your past decisions is maintained and enhanced and not lost in the ‑‑ lost in the translation, if I can say.
LISTNUM 1 \l 14389 COMMISSIONER DUNCAN: Thank you. Those are all very useful. Thank you. Those were my questions.
LISTNUM 1 \l 14390 THE CHAIRPERSON: I don't know if you were here to listen when the major broadcasters appeared, but there was a variety of price points that were submitted. CTV suggested $0.10 per service per month, so if you are talking about $5.00, $6.00, CTV was talking about $0.80 for Toronto and, obviously, I will say probably Lethbridge we're talking $0.20 or ‑‑
LISTNUM 1 \l 14391 So, if you had to conduct a survey, obviously if you asked the $5.00 question, well Rogers provided us with the answer. And obviously, to no surprise, Canadians don't support a $5.00 basic rate increase and a $0.20, $0.50 may be something else. The same with the assumptions that ‑‑ CanWest was $0.50 per service and the francophones were talking about $1.00 per service, which is a slightly different situation.
LISTNUM 1 \l 14392 So, I don't know if you have further comments regarding the prices suggested by those who have appeared so far, some as like the CBC has said that it has got something that they're only asking the Commission to make decisions in principle, then they will at the time of renewal come back and suggest a fee, but I don't know, with the various levels that are just provided, if you have further comments.
LISTNUM 1 \l 14393 MR. ROBERTS: There are some members of our panel here that would welcome the opportunity to provide further comment. I also appreciate and we also appreciate the Chair's guidance with regard to the scope of our future research as we will take that very much to heart.
LISTNUM 1 \l 14394 Jean, do you have comments?
LISTNUM 1 \l 14395 MR. LAROSE: But, Mr. Chairman, I think what's interesting in the range that you've just mentioned is that depending on who is making the presentation, the range will be from $0.10 up to $6.00. So, obviously, from our end to try to gauge with the end result would be is a bit of a ‑‑ you know, is a throw of the dice.
LISTNUM 1 \l 14396 And we have to live with the fact because it's anywhere within that range, that the impact on us could be minimal, but it could be ‑‑ it could be fairly substantial.
LISTNUM 1 \l 14397 As an example, when APTN asked for the rate increase that we were given, there were reactions from BDUS and others that this was pretty excessive, you know, from a $0.10 increase that would have to be passed on to customers.
LISTNUM 1 \l 14398 So, if our $0.10 increase is seen as substantial, then an $0.80 increase is what, catastrophic? I just have to go by the ‑‑ you know, the reaction to a player like us, to try to gauge the appropriate reaction to a greater increase.
LISTNUM 1 \l 14399 MR. ROBERTS: Perhaps a subsidiary comment or a complementary comment. The Commission knows better than most that when Vision came forward for a $0.02 increase, that was also considered by many of the BDUs to be onerous with regard to the system and the ability to pass that forward to the consumer at $0.02, so, first point.
LISTNUM 1 \l 14400 And second point is that regardless of the pennies or dollars associated with subscriber, basic subscriber fee increases, if that does become a fee that is actually ‑‑ suppressed the current subscriber rates for Vision and other services, that would be truly catastrophic for those business plants.
LISTNUM 1 \l 14401 MS. FUSCA: May I just add?
LISTNUM 1 \l 14402 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 14403 MS. FUSCA: I just wanted to add that taking pricing outside of the sort of the grander scheme of things, for example such as tearing and packaging, I think it's incredibly problematic as well.
LISTNUM 1 \l 14404 I just want to make that point because, for example, as you know Bill was saying whether it's arranged, whether it's $0.02 or $0.80 and the implications of the pricing, I don't think it can actually be separated from the notion of tearing and packaging. So, I'm going to keep harping away at the notion of a holistic approach.
LISTNUM 1 \l 14405 THE CHAIRPERSON: There was some discussion with the over‑the‑air operators. Some, as you probably know, have suggested that the transition towards HD should be done only to BDU service so there will be no more over‑the‑air transmissions, so to some extent, they will be somehow very like specialty services since there won't be any more over‑the‑air free television.
LISTNUM 1 \l 14406 One of the questions that was arisen was the question of regarding new entrants and how should we define the local market versus the national market. I know that some of your small members are acceding to local revenues. How do you define "local" in terms of some of the members that are part of your group?
LISTNUM 1 \l 14407 MR. LAROSE: I think from APTN's point of view the definition of "local" for us is probably nowhere near what it is for a conventional broadcaster. We currently have three feeds now and for us, local is a full region of the country, i.e. the Western Region, the Eastern Region or the Northern Region, that's how we define "local" for our purposes.
LISTNUM 1 \l 14408 So, obviously, you know, the impact that, you know, our approach has is quite different than what may be CTV or Global has when they have stations in various cities across the country where a local is actually more specific to local.
LISTNUM 1 \l 14409 So, from our perspective in that regard, when ‑‑ the impact that we can see is that from our end as a national broadcaster, as we try to expand our service to all the various markets, we are facing sometimes competition for programming that is being time shifted because the local services offer across the country and that's where, in some areas, that has an impact upon us because it competes against our programming that's specific to a region, but other time shifted programming will come into play and affects some of our audiences.
LISTNUM 1 \l 14410 But that's a broader question that we will address in our presentation to you at a later point this morning.
LISTNUM 1 \l 14411 MR. ROBERTS: Mr. Chair, you began the question with outlining the challenges faced with the HD transition and rather than taking up the panel's time here, that also forms part of Vision's presentation after this.
LISTNUM 1 \l 14412 THE CHAIRPERSON: Well, then, Ms Fusca and gentlemen, thank you very much for your presentation this morning.
LISTNUM 1 \l 14413 Mrs Secretary.
LISTNUM 1 \l 14414 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 14415 We will now proceed with the presentation of Vision TV. Mr. Roberts, when you're ready. Thank you.
LISTNUM 1 \l 14416 Mr. Roberts, lorsque vous êtes prêt? Merci.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14417 MR. ROBERTS: Thank you again everyone. I'm still Bill Roberts and I now have the correct presentation. Thank you.
LISTNUM 1 \l 14418 I would like to change hats now and offer you some perspective on behalf of Vision TV, Canada's multi faith channel.
LISTNUM 1 \l 14419 As I've mentioned, I am President and CEO of Vision TV, which is an hertz voice company and with me is our general council, Mr. Brand Kostandoff, who with the luck of some laws angels will be able to help us with some of the questions.
LISTNUM 1 \l 14420 Mr. Chair, Commissioners, staff, as you know, Vision TV is licensed as a national English language specialty service with a mandate and mission to reflect Canada's multi faith and multi cultural heritage.
LISTNUM 1 \l 14421 As a dual state of service, Vision TV is distributed as part of the basic package in virtually all of the systems in which it is now carried, available in nearly nine million Canadian households.
LISTNUM 1 \l 14422 We are, therefore, especially interested in the implications of the policies we are contemplating in that they will have a basic service operated by the BDUs. There is no question that local broadcasting should remain a central component to the basic package. Television can help citizens connect with their local communities.
LISTNUM 1 \l 14423 Indeed, television arguably remains the most powerful medium for engaging Canadians in a shared experience. That shared reality can be especially important at the local level.
LISTNUM 1 \l 14424 I would, therefore, add to the five principles upon which the 1999 Policy was based. The distribution should continue to encourage and support local expression in the broadcasting system.
LISTNUM 1 \l 14425 As you've heard just now from the independent services, we are not convinced that granting a pass‑through fee to private conventional broadcasters is the best means to accomplish this objective.
LISTNUM 1 \l 14426 One would hope that with two billion dollars in annual revenue they can find ways to deliver on the promise to offer Canadians local programming on a daily basis. Charging consumers more to facilitate as a matter of policy something that should already be happening when vast resources already exist to fulfil that outcome hardly seems fair.
LISTNUM 1 \l 14427 Of course, the basic package is not just about local broadcasting. The basic service should support the achievement of other aspects of the Television Policy and of the Broadcasting Act.
LISTNUM 1 \l 14428 First and foremost the basic service should be predominantly Canadian. Vision TV has recommended in our written submissions in this and in other proceedings that a green space or foundation tier be established as an all‑Canadian basic option delivered to all subscribers.
LISTNUM 1 \l 14429 We have also suggested a high threshold for Canadian program exhibition and expenditure requirements to warrant inclusion in that basic package to ensure that it is predominantly Canadian in all respects.
LISTNUM 1 \l 14430 Outside of that basic offering, if the Commission wants to encourage a more market‑driven approach to broadcasting, it may be entirely appropriate to do so by relaxing the regulatory expectations for those non‑basic or discretionary services.
LISTNUM 1 \l 14431 The CRTC should rightfully impose more stringent requirements on all regulated areas from advertising to captioning to program standards for services in the basic package while using a much lighter touch with licensees outside that group.
LISTNUM 1 \l 14432 Programmers could then apply to be a basic service if they are willing to meet the high standards required or they can develop business models to compete in the more open environment.
LISTNUM 1 \l 14433 The privileges of mandatory distribution and priority channel placement that over the air services have enjoyed for a long time are still extremely valuable and the Commission should not be shy about attaching high expectations to those privileges.
LISTNUM 1 \l 14434 It may be that current commitments to local and priority programming are sufficient to justify the pride of place conventional broadcasters enjoy. But if enhancements to their terms of carriage are to be considered the quid pro quo in terms of contributions to the achievement of the cultural and policy objectives of the act should be similarly robust.
LISTNUM 1 \l 14435 Vision TV's suggestions for Canadian program exhibition and expenditure requirements may not be the only measures to apply to the basic service. In the context of over the air broadcasters it may be appropriate to give preference to those willing to invest in digital and HD transmitters or to include investments made in upgrading transmitters in the CPE calculation.
LISTNUM 1 \l 14436 Give the network the choice. If they want their channel to be a mandatory part of the basic or foundation package, they should continue to ensure that channel is universally available in its licensed area. If they don't want to invest in the necessary upgrades then they should be prepared to vacate that priority status with BDUs.
LISTNUM 1 \l 14437 But whatever approach the Commission adopts in this proceeding, it should assure that the basic package continues to fulfill the fundamental and foundation objectives of the broadcasting act.
LISTNUM 1 \l 14438 A similar approach in the regulation of specialty pay and even VOD services might also help to achieve an appropriate balance between the often competing priorities of cultural objectives and reasonable profits.
LISTNUM 1 \l 14439 Commissioners, as a small independent service operating for the benefit of a registered charity, Vision TV understands better than most the difficulties we face as Canadian programmers.
LISTNUM 1 \l 14440 You have received and heard many thoughtful submissions from our industry peers suggesting a variety of possibilities for addressing the challenges faced by local over the air broadcasters.
LISTNUM 1 \l 14441 While some of these proposals give us cause for concern we certainly recognize the important contributions of local broadcasters and the role of local programming in the Canadian Broadcasting System.
LISTNUM 1 \l 14442 The TV policy must ensure local expression remains a viable component of that system. But the framework must also serve to advance the achievement of a variety of other cultural and policy objectives.
LISTNUM 1 \l 14443 In our submission the best way to do so is by establishing a strong, vibrant and truly Canadian basic or foundation package of services, blending a diversity of local, regional and national programming to engage, to inform and to entertain Canadian citizens.
LISTNUM 1 \l 14444 Thank you again for the opportunity to participate at this hearing. And we'd be pleased to answer any questions you may have.
LISTNUM 1 \l 14445 THE CHAIRPERSON: Thank you, Mr. Roberts.
LISTNUM 1 \l 14446 I'm asking Commissioner Williams.
LISTNUM 1 \l 14447 COMMISSIONER WILLIAMS: Good morning, Mr. Roberts. And I'm sorry, I've forgotten your name, sir.
LISTNUM 1 \l 14448 MR. KOSTANDOFF: Mr. Kostandoff.
LISTNUM 1 \l 14449 COMMISSIONER WILLIAMS: Kostandoff.
LISTNUM 1 \l 14450 MR. KOSTANDOFF: Well said.
LISTNUM 1 \l 14451 COMMISSIONER WILLIAMS: Your earlier appearance of course has answered many of the questions I had prepared when Commissioner Duncan and Vice‑Chair Arpin questioned you. But I do have a few remaining.
LISTNUM 1 \l 14452 You've stated if the Commission grants over the air broadcasters the ability to collect subscriber fees then requiring the highest standards of Canadian exhibition and expenditure from conventional broadcasters becomes even more appropriate when their channels are offered in the basic service.
LISTNUM 1 \l 14453 Could you elaborate on that? Like what do you consider to be the highest standards of Canadian exhibition and expenditure? And please explain what criteria you've used to arrive at these levels.
LISTNUM 1 \l 14454 MR. ROBERTS: I'll begin a response, Commissioner Williams and then ask Brant to contribute to that.
LISTNUM 1 \l 14455 We would have no problem with a commitment with regard to Canadian content of 65 percent Canadian content and an expectation of 50 percent Canadian program expenditure as a starting point.
LISTNUM 1 \l 14456 But Brant, would you like to elaborate?
LISTNUM 1 \l 14457 MR. KOSTANDOFF: Sure. Thank you, Bill.
LISTNUM 1 \l 14458 We're coming from the perspective of a specialty service when we're offering opinions or thoughts on what an appropriate threshold or standard should be.
LISTNUM 1 \l 14459 COMMISSIONER WILLIAMS: That's understood. Yes.
LISTNUM 1 \l 14460 MR. KOSTANDOFF: And far be it for us to suggest how our local colleagues should go about their business. Fortunately we have you as Commissioners to set those standards for the conventional broadcasters.
LISTNUM 1 \l 14461 I think the point that we're trying to get at is the value of being part of that basic service with mandatory carriage and priority channel placement is extremely high. And for you as the Commission in establishing policy to govern that group of channels, it's entirely appropriate to establish a threshold that is similarly valuable to achieving the cultural objectives of the act.
LISTNUM 1 \l 14462 So if we're saying in this proceeding that local programming is an essential part of the broadcasting system, then setting standards and requirements that are high with respect to local content for the conventional services that are part of that mandatory package is entirely appropriate.
LISTNUM 1 \l 14463 If the existing standards are acceptable to meet that test, that's fine from our perspective. But if the conventional services are saying, in fact, we deserve more from the system for the contributions we're making then I think it behooves us all to look at the contributions and the value that they're adding to the system and perhaps increasing the bar for them as well.
LISTNUM 1 \l 14464 COMMISSIONER WILLIAMS: Do you have a view on whether such expenditure and exhibition requirements should be broadly targeted? Like should it be on all Canadian programming or more narrowly targeted to say Canadian drama, for instance?
LISTNUM 1 \l 14465 MR. ROBERTS: Our first cut on this is directed to the overall services that would seek carriage on a foundation or green space tier, so less focus on specific program categories.
LISTNUM 1 \l 14466 But I think it would be completely appropriate and speaking for Vision and S‑VOX, we would have no issue with looking at further requirements dealing, for example, with drama.
LISTNUM 1 \l 14467 Vision has stepped up to the plate on a number of occasions with regard to drama, especially in the diversity field. We've done so with the National Screen Institute; we've done so with the National Film Board. We consider that to be a priority for us.
LISTNUM 1 \l 14468 COMMISSIONER WILLIAMS: In the area of fee for carriage, can you give us some idea and some ‑‑ what measures or safeguards that you would recommend that the interests of smaller independent broadcasters like yourselves are more protected?
LISTNUM 1 \l 14469 MR. ROBERTS: Again I'll begin with a more generic response and then ask Brant to elaborate.
LISTNUM 1 \l 14470 The sense of the first presentation this morning speaks for itself. Vision TV's perspective is that what is largely unique about the Canadian system, or in part unique about the Canadian system is exactly those independent and mission‑driven entities that reflect diversity. And these broadcasters are key as a result to a distinct Canadian broadcasting system.
LISTNUM 1 \l 14471 So we would ask the Commission not to do something for over the air broadcasters and their sort of larger corporate entities that harms or hinders Vision TV and our colleagues in that independent sphere.
LISTNUM 1 \l 14472 Brant.
LISTNUM 1 \l 14473 MR. KOSTANDOFF: I think the best safeguard would of course be to deny the request for fee for carriage. But that is avoiding the question.
LISTNUM 1 \l 14474 It's incredibly difficult to come up with thoughts on how to protect the smallest services in the industry when there is no regulation over the rates that are set by the BDUs. And the playing field, in terms of negotiating carriage and distribution terms is so uneven.
LISTNUM 1 \l 14475 The reality is, to come up with any kind of system that is going to offer protection to both the services that are at the greatest risk and the consumer, takes us back into a system of rate regulation over, at a minimum, the basic service and arguably even more broadly, all packaging and distribution where the Commission ‑‑ we would be looking to the Commission to set the rates for even category 2 services because trying to negotiate those terms as an independent service with the large integrated companies is extraordinarily difficult.
LISTNUM 1 \l 14476 So I think the shorter answer is that the only safeguards that we could really move to would require stronger rate regulation by the Commission.
LISTNUM 1 \l 14477 COMMISSIONER WILLIAMS: Okay. Thank you, gentlemen.
LISTNUM 1 \l 14478 That's my question, Mr. Arpin.
LISTNUM 1 \l 14479 THE CHAIRPERSON: Commissioner Cugini.
LISTNUM 1 \l 14480 COMMISSIONER CUGINI: Thank you, Mr. Chairman.
LISTNUM 1 \l 14481 Good morning.
LISTNUM 1 \l 14482 I have some questions for you with regards to your green space or foundation tier.
LISTNUM 1 \l 14483 Am I right in assuming that this is your recommendation as it applies to a digital basic?
LISTNUM 1 \l 14484 MR. ROBERTS: Yes, we would look at that as a very viable option for digital basic.
LISTNUM 1 \l 14485 COMMISSIONER CUGINI: Okay.
LISTNUM 1 \l 14486 MR. ROBERTS: It was also, Commissioner, I think, also referred in that context as well by the Lincoln Report of 2003, I believe.
LISTNUM 1 \l 14487 COMMISSIONER CUGINI: Now, you use the word:
LISTNUM 1 \l 14488 "...green space or foundation tier be established as an all‑Canadian basic option delivered to all subscribers." (As read)
LISTNUM 1 \l 14489 Does that mean there could be another "option" available to them or is "option" just a bad choice of words?
LISTNUM 1 \l 14490 MR. ROBERTS: I think "option" is meant to provide some flexibility but I probably would retract that now.
LISTNUM 1 \l 14491 COMMISSIONER CUGINI: And make it mandatory. "All‑Canadian basic", are you suggesting ‑‑ because right now the basic tier is predominantly Canadian in terms of the number of services that is offered with the exception of the 4 plus 1 U.S. networks ‑‑ does your proposal include the exclusion of those 4 plus 1 networks?
LISTNUM 1 \l 14492 MR. ROBERTS: It would.
LISTNUM 1 \l 14493 COMMISSIONER CUGINI: Is that the most consumer friendly?
LISTNUM 1 \l 14494 MR. ROBERTS: If the ‑‑
LISTNUM 1 \l 14495 COMMISSIONER CUGINI: Given that they have, that consumers have been watching those 4 plus 1 networks for that past ‑‑
LISTNUM 1 \l 14496 MR. ROBERTS: If the consumer ‑‑
LISTNUM 1 \l 14497 COMMISSIONER CUGINI: ‑‑ 60 years?
LISTNUM 1 \l 14498 MR. ROBERTS: If the consumer option ends up being more flexible and if the packaging of the foundation tier triggers a fee for that tier which is significantly less than the current basic tier cost, the consumer or household, would then have the option of buying into the 4 plus 1, potentially at a rate, cumulative or aggregate rate that would be less than the current basic.
LISTNUM 1 \l 14499 COMMISSIONER CUGINI: So is your suggestion independent of whether or not we grant a fee for carriage to over the air broadcasters?
LISTNUM 1 \l 14500 MR. ROBERTS: It's something we would like you to take very seriously in your considerations.
LISTNUM 1 \l 14501 Brant, other comments?
LISTNUM 1 \l 14502 MR. KOSTANDOFF: Yes. I don't think that the suggestion hinges on the fee for carriage discussion. The possibility of coming up with an equitable balance if the Commission is going to go down the road toward fee for carriage by establishing high standards for that basic service, mandatory carriage priority channel placement, maybe gives an elegant policy solution to how to address the differing views on this issue and the needs of the system.
LISTNUM 1 \l 14503 The concept of it being all‑Canadian I'm not sure changes the offering to the consumer all that much in terms of what they are getting from BDUs now.
LISTNUM 1 \l 14504 The BDU is still going to set the price for the addition of the 4 plus 1 group. And they are still going to want to do that in a way that it is attractive to consumers because those services are highly appealing. There's no question about that.
LISTNUM 1 \l 14505 And engaging consumers in subscription to the U.S. channels is a priority for the BDUs. So there's still going to be access to those channels. It's just that the first buy for any consumer would be a group of Canadian services. That would be a great thing for system.
LISTNUM 1 \l 14506 COMMISSIONER CUGINI: Thank you.
LISTNUM 1 \l 14507 Thank you very much, Mr. Chairman.
LISTNUM 1 \l 14508 THE CHAIRPERSON: Thank you very much, Mr. Kostandoff, Mr. Roberts.
LISTNUM 1 \l 14509 Miss Secretary.
LISTNUM 1 \l 14510 THE SECRETARY: Thank you, Mr. Chair.
LISTNUM 1 \l 14511 We'll now call on APTN to come forward for the next presentation.
‑‑‑ Pause
LISTNUM 1 \l 14512 THE SECRETARY : Mr. Larose, when you are ready you can introduce your panel and you will have 10 minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14513 MR. LAROSE: Good morning, Mr. Vice‑Chair, commissioners and staff.
LISTNUM 1 \l 14514 First off, I will be introducing the group. I thought today would be an ideal opportunity to actually put other faces besides mine in front of the Commission and give you an idea of who and what APTN is all about.
LISTNUM 1 \l 14515 So let me introduce the panel before we begin. To my left is Joanne Levy, Director of Programming for APTN; and next to her is Wayne McKenzie, Director of Technical Operations; Jamie Veilleux, APTN's Chief Financial Officer sitting to my right; and beside him, is Lea Todd, Director of Creative Services and Scheduling.
LISTNUM 1 \l 14516 Behind me are Monika Ille, Monique Rajotte and Peter Strutt, each of whom is a Regional Programming Manager, as well as Joel Fortune from Johnston & Buchan, our Regulatory Advisor. So this is not an Indian occupation by any standard, it is just a presentation.
LISTNUM 1 \l 14517 We were asked to appear at this hearing for three reasons. First, APTN is a hybrid network. We deliver our service by satellite to cable systems on a DTH basis and through a network of 96 over‑the‑air transmitters located North of 601. The phase‑out of traditional analog over‑the‑air technology will have a direct impact upon us.
LISTNUM 1 \l 14518 Second, APTN has achieved a level of success within a specific regulatory environment. We know that when one part of the regulatory environment changes other parts will be affected, including APTN.
LISTNUM 1 \l 14519 Lastly, we wanted to be at this hearing to represent at least one voice for Aboriginal peoples. We don't claim to represent all Aboriginal peoples, but we do believe that we can help illuminate for your deliberations the special place of Aboriginal peoples within Canadian society, to borrow from the words of the Broadcasting Act.
LISTNUM 1 \l 14520 MR. McKENZIE: We have been examining the question of whether to upgrade or replace our terrestrial transmitters for approximately three years. Many of our transmitters are located in more northern communities and were operated previously as part of Television Northern Canada. Many of these transmitters are now 15 or more years old and have operated beyond their life expectancy.
LISTNUM 1 \l 14521 Based on a report conducted in 2004 jointly with the Department of Canadian Heritage we have concluded that replacing this network, mostly with low‑powered digital transmitters would cost more than $9 million. It would cost more if APTN took over the ownership and maintenance of all of the towers or if APTN converted to higher power HD‑compatible transmitters.
LISTNUM 1 \l 14522 Right now, we own about one quarter of the towers and the rest are owned and maintained by others. We do not have the financial resources to undertake a project of this size, so we are looking for alternatives. One option, and the only one that is financially feasible for APTN, is to phase‑out our terrestrial transmitters and to deliver our service in the north by cable or through DTH satellite services.
LISTNUM 1 \l 14523 MR. LAROSE: Environics annual North of 601 survey has found that across the Yukon, Northwest Territories, Nunavut and Nunavik 11 per cent of the population rely on over‑the‑air reception, but only 6 per cent of the northern residents preferred to receive television over‑the‑air, and 48 per cent said that satellite is or would be their preferred way to receive TV, while 38 per cent said that cable or digital cable would be their preferred way.
LISTNUM 1 \l 14524 In keeping with our viewers' preferences, we believe that we are moving in the right direction in looking for an alternative to over‑the‑air delivery for APTN in the north. There are many details left to be worked out and still some significant commitments to be made before our terrestrial network can be phased out, but it is something that we are looking at very seriously.
LISTNUM 1 \l 14525 We are pleased to report that one of the DTH providers, Bell ExpressVu, already distributes APTN's northern service, so it is already available for DTH satellite reception in the north.
LISTNUM 1 \l 14526 Personally, I am not sure if APTN's experience is similar to that of other broadcasters. Our terrestrial network is located only in northern and remote communities, so it does not serve a very large proportion of the Canadian population. In my mind, there is a more efficient way to reach the population that we serve now by these transmitters. I do not have all of the facts to fully appreciate what other broadcasters have to deal with, but I can state that in APTN's case there is no business model that is affordable and defendable for replacing our terrestrial transmitters.
LISTNUM 1 \l 14527 MS LEVY: This hearing is about change and how to respond to it and we know that changes and regulation will have an impact on APTN whether intended or not.
LISTNUM 1 \l 14528 APTN has a direct stake in a healthy conventional television sector that is actively involved in producing Canadian programming. We regularly enter into joint production arrangements with conventional broadcasters. Some of our highest‑budget and most popular programming is financially possible only because of these arrangements.
LISTNUM 1 \l 14529 We should add that conventional broadcasters also benefit through APTN's co‑funding dollars. In some cases, without APTN's participation as a second or even third window broadcaster, these productions would not happen. Ultimately, these productions lead to more high‑quality programming on APTN, a greater Aboriginal presence on conventional television, direct support to the Aboriginal independent production industry and great original and exciting programming for Canadian viewers. These projects advance the position of Aboriginal peoples in the broadcasting system and make the system better for all Canadians.
LISTNUM 1 \l 14530 APTN would be concerned if a change in policy resulted in less incentive for conventional broadcasters to produce this kind of programming or to partner with services like APTN. With this background, we would like to address some of the specific proposals being considered at this hearing.
LISTNUM 1 \l 14531 MR. LAROSE: Canadian content requirements have a direct impact on the level and quality of Canadian programming produced in Canada. APTN can see no compelling reason to make material changes to Canadian content requirements for conventional broadcasters. Infomercials, for example, should not count as Canadian content. Also, it seems counterproductive to return as a general rule to the double‑counting or 150 per cent counting of certain types of Canadian programming.
LISTNUM 1 \l 14532 Would it be good or bad policy to reintroduce an expenditure for conventional broadcasters? We don't have the answer. We think though, and we are relatively impartial on this question, that there is merit in the broadcasters' complaint that there are too many out‑of‑market signals in the system now competing for the same viewer. If broadcasters are to make significant programming commitments, then we have to protect the value of their programming rights.
LISTNUM 1 \l 14533 On the issue of benefits policy, APTN has a direct experience with the Commission's benefit policy. We think that the rationale for the benefits policy remains compelling. When a licensee sells its television station it doesn't turn its licenses over to the Commission and ask the Commission to issue a call for purchasers. The licensee sells the stations to the highest bidder.
LISTNUM 1 \l 14534 It is appropriate that a public interest test be met when public frequencies and public franchises are transferred by private parties. Over time, this has lead to the 10 per cent benefits policy for television ownership transfers. We support the continuation of the benefits policy.
LISTNUM 1 \l 14535 There is room to improve how this policy works. The Commission could set a few key priorities for the allocation of benefits dollars and make sure those benefits are administered at arms‑length. Naturally, we strongly believe that the advancement of Aboriginal peoples in the broadcasting system should be one of the priorities for benefits dollars.
LISTNUM 1 \l 14536 MS TODD: On the very controversial question of fee for carriage we are neither for nor against the proposal in and of itself, but we view it as having long‑term implications for how the broadcasting distribution environment now works.
LISTNUM 1 \l 14537 APTN relies on subscription fees and distribution as part of an affordable basic service. Therefore, we are concerned about the potential for a substantial increase in the cost of the basic service. Also, we are not clear on the rationale for a fee for carriage. Why should only conventional broadcasters receive compensation for the damage caused by out‑of‑market signals?
LISTNUM 1 \l 14538 There has been quite a bit of discussion at this hearing about allowing more advertising to be sold by conventional broadcasters in one way or the other. We are in favour of allowing experimentation with television advertising, but one reason for regulating advertising is to ensure that all services that rely on ad revenue have an opportunity to meet their business case and to fulfill their regulatory obligations.
LISTNUM 1 \l 14539 Appropriate limits on advertising ensure that there are more successful broadcasters and result in diversity in ownership and a diversity of voices in the broadcasting system. Some latitude for new forms of advertising is probably appropriate, but the Commission should continue to regulate the advertising market.
LISTNUM 1 \l 14540 MR. VEILLEUX: The final area that we wish to address today is the need for more Aboriginal peoples to be included in the Canadian broadcasting system. The Commission will recall the report of the Taskforce for Cultural Diversity on Television which was released in 2004. The Task Force found that Aboriginal peoples were virtually absent on television with the exception of APTN.
LISTNUM 1 \l 14541 First, we would like to commend Canada's private broadcasters for the willingness that they have shown to foster diversity in television. We regularly review the cultural diversity reports filed by broadcasters and those reports show that broadcasters take the issue of cultural diversity seriously. One concern we have though is that we don't know what impact is being made. We sense that there is some progress, but we don't know for sure. There is activity, but are there results?
LISTNUM 1 \l 14542 The renewal of conventional television licenses would be a good time for the Commission to evaluate the impact on screen and on the ground of broadcasters' cultural diversity initiatives.
LISTNUM 1 \l 14543 MR. LAROSE: The report prepared by the Task Force provides baseline data against which we can measure progress. If we assume that the major conventional broadcasters will be submitting their renewal application sometime in 2007, we need to get moving now to measure where we stand. It takes time to compile and analyze data. We shouldn't lose the opportunity to see whether we have made real progress.
LISTNUM 1 \l 14544 In addition to measuring results, we believe that putting more resources now into the education and training of Aboriginal youth and better coordination of these results will pay significant dividends in the future.
LISTNUM 1 \l 14545 At APTN we are involved in a number of different initiatives, two of them standout. The first is SABAR, the Strategic Alliance of Broadcasters for Aboriginal Reflection. SABAR is a working group of Aboriginal and non‑Aboriginal broadcasters, producers, educators which seek to increase Aboriginal participation in the Canadian broadcasting industry.
LISTNUM 1 \l 14546 The second initiative is the Aboriginal Media Education Fund, which has the objective of providing direct and coordinated funding for educational and training opportunities for Aboriginal peoples in media.
LISTNUM 1 \l 14547 I would be pleased to provide more information about these initiatives in responses to your questions. As we said at the outset of this presentation, we can't speak for all Aboriginal peoples, but we do hope that we have brought an Aboriginal perspective to this hearing for you to consider.
LISTNUM 1 \l 14548 We would now be pleased to answer any questions you may have.
LISTNUM 1 \l 14549 THE CHAIRPERSON: Thank you, Mr. Larose.
LISTNUM 1 \l 14550 I am asking Commissioner Cugini to ask the first question.
LISTNUM 1 \l 14551 COMMISSIONER CUGINI: Thank you, Mr. Chairman.
LISTNUM 1 \l 14552 Mr. Larose, and to your colleagues, good morning and welcome to these proceedings.
LISTNUM 1 \l 14553 Mr. Larose, you said your experience may or may not be unique but, quite frankly, it is quite interesting so we welcome your comments.
LISTNUM 1 \l 14554 The first area that I would like to ask you about is your hybrid situation right now with the delivery of your signal. You did say today that many of your transmitters are now 15 or more years old and have operated beyond their life expectancy.
LISTNUM 1 \l 14555 I don't know if you were here in the room yesterday when we heard from Don Schaefer at Standard who had a similar situation. He has eight years of life expectancy left in his transmitters. Therefore, any shutdown of the analog system would be very detrimental to him.
LISTNUM 1 \l 14556 If we were to accept what some have suggested, that there should be a very specific date by which the analog transmission should be shut down, do you have any comments or suggestions to make in that regard?
LISTNUM 1 \l 14557 MR. LAROSE: In that area, as we state in our presentation, we currently maintain a system of which about six transmitters are now inoperative because they are beyond repair. We can't fix them.
LISTNUM 1 \l 14558 Obviously, we are looking at a plan where, in the next four years, in our case, we hope to be back before the Commission to ask for permission to remove that as a condition of licence.
LISTNUM 1 \l 14559 We are working to develop an alternative system to provide our northern feed to the northern communities, our northern audiences, and that would be through a mixture of DTH and cable.
LISTNUM 1 \l 14560 Because we currently have carriage on one DTH for both the north and south feeds ‑‑ and the east feed now ‑‑ we think that this is a viable mechanism for the north.
LISTNUM 1 \l 14561 And one of the conditions of licence, as well, is that the Commission has asked us to do regular audience surveys and market surveys to support our position and our growing influence in the Canadian broadcasting sector.
LISTNUM 1 \l 14562 We have done a "North of 60" survey, which demonstrated that, in the north, right now, as I said, only 10 to 11 percent of our audience receives their signal over the air. Over the course of the next year, about half of that group expects to switch to either cable or satellite, which means that if these projections were to be maintained, by the time we need to phase out the last of our transmitters ‑‑ because they will, by then, be worthless, they will be inoperative ‑‑ we probably will have 100 percent penetration of our audience through DTH or cable.
LISTNUM 1 \l 14563 That is what we are striving to work towards.
LISTNUM 1 \l 14564 We are working with Heritage Canada in this regard. They are the ones, through the Northern Distribution Program, who set up the transmission towers back in the late eighties, early nineties. They are the ones who are currently funding some part of it, but not all of it, and APTN funds the rest.
LISTNUM 1 \l 14565 We do not see, looking at the actual reaction and the audience expectations up north, that there is a real role for another form of over‑the‑air transmission system, because it is not the audience preference up there.
LISTNUM 1 \l 14566 The report is very clear that they are looking at satellite and cable. Over‑the‑air is, I think, the preferred method for only 2 or 3 percent of the population, which is negligible.
LISTNUM 1 \l 14567 It still represents individuals who need to be served, and we are looking at ensuring that they will get service, but through other methods.
LISTNUM 1 \l 14568 MEMBER CUGINI: You mentioned the impact of distant signals. When you move to 100 percent cable or satellite, how much more of an impact will the carriage of distant signals have on your service?
LISTNUM 1 \l 14569 You will have more of your audience having access to distant signals, because they will now be subscribers to DTH or cable.
LISTNUM 1 \l 14570 MR. LAROSE: Currently, the impact is fairly significant, in that, because they have made the transition, the choice they now have is much broader than what they had with over‑the‑air.
LISTNUM 1 \l 14571 Over‑the‑air, basically, in the north, consists of APTN and CBC.
LISTNUM 1 \l 14572 Right now, through satellite and cable, they have access to the full range of services that anybody down south has.
LISTNUM 1 \l 14573 APTN, in the north, ranges anywhere from the third or fourth preferred ‑‑ or most‑watched network amongst our own audience, to about eighth or tenth for non‑aboriginal viewers. So we are roughly in the middle, when you factor both of those together.
LISTNUM 1 \l 14574 Obviously, there is a need, and there is an expectation that APTN will remain a strong player up north.
LISTNUM 1 \l 14575 There is a strong audience for it. When you consider that in the few‑hundred‑channel universe that we live in, if we still rank anywhere from 4 to 10, I think it is a good reflection that what we are offering meets the needs and expectations of the audience.
LISTNUM 1 \l 14576 We think that we will still be able to, under the current structure ‑‑ and that's where we have concerns about the regulatory environment. As long as there still is a regulatory environment that protects APTN from being either pushed aside or not given the mandatory carriage status it has now, we believe that there will continue to be a strong presence of APTN in the north.
LISTNUM 1 \l 14577 COMMISSIONER CUGINI: You have an eastern and western feed currently?
LISTNUM 1 \l 14578 MR. LAROSE: We do now, yes, as of October 2 ‑‑ I believe that was the date we launched.
LISTNUM 1 \l 14579 We now have split our southern feed into two, to respond, again, to the audience in the south, which, based on the eastern time zone, was totally inappropriate for residents in the western part of the country.
LISTNUM 1 \l 14580 COMMISSIONER CUGINI: Are both of those feeds available on cable and/or DTH now, or soon to be?
LISTNUM 1 \l 14581 MR. LAROSE: DTH could be the subject of a long discussion, but we are working with cable companies to ensure that they, at least, provide the appropriate feed.
LISTNUM 1 \l 14582 We are trying to establish enough of a relationship and a partnership with them to have both feeds offered, if possible.
LISTNUM 1 \l 14583 But, obviously, that remains a challenge, to the extent that there is still ‑‑
LISTNUM 1 \l 14584 I don't think there is unanimity that APTN is a necessary service that should be given the same level of support that other conventional broadcasters may get in having the variety of their signals distributed across the country.
LISTNUM 1 \l 14585 COMMISSIONER CUGINI: Thank you for that.
LISTNUM 1 \l 14586 Ms Levy, you said that APTN would be concerned if a change in policy resulted in less incentive for conventional broadcasters to provide this kind of programming, or to partner with services like APTN.
LISTNUM 1 \l 14587 What is your fear in making that statement?
LISTNUM 1 \l 14588 It is a cautionary statement. Why do you think the broadcasters will no longer have an incentive to continue with the kind of partnerships and co‑productions that you have talked about both in your written submission and in your oral presentation this morning?
LISTNUM 1 \l 14589 MS LEVY: Part of it relates very directly to the Benefits Policy.
LISTNUM 1 \l 14590 As you heard in our presentation, we have managed, in past benefits, to be the recipient of assistance to establish news bureaus, to establish programming, to create those kinds of relationships.
LISTNUM 1 \l 14591 So it is specifically with regard to benefits; that we would be concerned if there was any less incentive to go ahead with that.
LISTNUM 1 \l 14592 Right now we are very, very challenged at APTN, even with the new subscription rate. We have about $12 million to commit to programming, and $500,000 to commit to development.
LISTNUM 1 \l 14593 In this last fiscal year, where that extra money was available, we were able to commission 400 hours of original programming. We do that with help from some of the other broadcasters, in one way, shape or form, and we want that sort of relationship to continue. We want them to be incentivized to continue that sort of thing, and to expand on it, quite frankly.
LISTNUM 1 \l 14594 COMMISSIONER CUGINI: Do you have any specific goals in mind?
LISTNUM 1 \l 14595 I know that in your written submission you say, "A more principled approach to the allocation of benefits dollars..."
LISTNUM 1 \l 14596 Do you have percentages in mind of how much of the benefits money should be earmarked, for example, for such initiatives?
LISTNUM 1 \l 14597 MS LEVY: I believe that some of the statistics that were provided in our brief related to the tiny, tiny percent that has been set aside for APTN in some of the benefits packages we have seen come through in the last few years. It is minuscule.
LISTNUM 1 \l 14598 I guess what we would like to see is something that is more appropriate, at least in percentage impact, to the population of aboriginal peoples in the country, or some other sort of measurement.
LISTNUM 1 \l 14599 And I think that measurement is the key issue here. We are more than happy to report to our conventional broadcast partners, or any other partners, on the impact that their assistance gives us.
LISTNUM 1 \l 14600 And we would note that, if it doesn't get measured, it doesn't get done; and we are quite happy to be very transparent about how we use other people's resources and how we partner with them. We want to see that done, as well.
LISTNUM 1 \l 14601 MR. LAROSE: If I could add to those comments; one of the things that we have given thought to, which I am sure the Commission may have heard in one shape or another from others ‑‑ and maybe even from us in the past ‑‑ is that when there is a 10 percent Benefits Policy applied, two things benefit: the Commission's goals, and also those who are supposed to be the beneficiaries of that policy.
LISTNUM 1 \l 14602 First of all, it would be at arm's length from the conventional broadcaster making the contribution.
LISTNUM 1 \l 14603 What has happened on some occasions is that, while some benefits have been committed, APTN has not directly benefited from them, and we are sometimes hard‑pressed to actually find out who benefited from the arrangement.
LISTNUM 1 \l 14604 Our concern, as aboriginal peoples, is that we believe that we are the best suited to speak about aboriginal peoples. We are best placed to deal with the community ‑‑ with our community ‑‑ and to recognize their needs and expectations, and to work in that regard.
LISTNUM 1 \l 14605 If the Commission were to say that, of the 10 percent, 3.5 percent of any benefits policy should be directed toward aboriginal peoples, then, obviously, I think APTN would like to be the beneficiary of that.
LISTNUM 1 \l 14606 As an open, accountable, and totally transparent network, we report regularly to the Commission, and we report very openly, as well.
LISTNUM 1 \l 14607 We also, with our partners across the industry, demonstrate what we actually do with the money and how it is spent.
LISTNUM 1 \l 14608 I think there is a benefit there for the conventional broadcaster, as well. If we provide specific programming to them that is of benefit to the system, that is mutually beneficial, then I think that all of the parties would better benefit from it.
LISTNUM 1 \l 14609 Certainly, our community would benefit, whether it be through training, or through new opportunities ‑‑ especially our production community.
LISTNUM 1 \l 14610 As well, there would be training for youth, who will eventually be needed to fill some of the positions in the broadcasting industry, in general.
LISTNUM 1 \l 14611 Anybody reading the paper in the past few weeks knows that, all of a sudden, there is a labour shortage in a variety of industries, and that will come to broadcasting very soon, if it is not here already. That is becoming a reality.
LISTNUM 1 \l 14612 And our population is the only population that is growing in Canada, so you have a base of individuals that needs to be given the opportunity to become participants in the industry.
LISTNUM 1 \l 14613 From APTN's perspective, we view it as our mandate, to a great extent, and as our role to ensure that our youth and our peoples have a place in this industry, and that is what we are striving to do.
LISTNUM 1 \l 14614 COMMISSIONER CUGINI: You did mention SABAR in your oral presentation, and, as you know, in my former life I was able to attend a couple of meetings of SABAR. I know that, through that organization, you launched some initiatives with both OMNI and CHUM.
LISTNUM 1 \l 14615 MR. LAROSE: Yes.
LISTNUM 1 \l 14616 COMMISSIONER CUGINI: And since you have offered to elaborate on some of the other successes of SABAR, I am going to give you the opportunity now to tell us how that relationship with the other members of that strategic alliance has worked for you, and for them.
LISTNUM 1 \l 14617 MR. LAROSE: One of the things that is becoming apparent is, in the past year or year and a half, the membership of SABAR is increasing. We now have more and more broadcasters on board, many of which are finally starting to get a better sense of what we are trying to achieve.
LISTNUM 1 \l 14618 We are not looking for quotas. We are not looking for handouts. We are not looking for anything like that.
LISTNUM 1 \l 14619 What we are trying to do is to give life to the cultural diversity reports, which all of them are expected to file with you, and to make it in a way that is actually tangible.
LISTNUM 1 \l 14620 Many of them are turning to SABAR, and they are now part of SABAR. In fact, CBC has now joined SABAR, as well as other key broadcasters, such as CTV.
LISTNUM 1 \l 14621 As an example, CTV, this summer, offered an internship for ‑‑ I believe it was 13 young aboriginal people, and I understand that they hired one or two of them to become reporters in northern Ontario.
LISTNUM 1 \l 14622 This is the type of initiative which we think needs to be supported and maintained and expanded upon, because this is a results‑oriented approach. This is something that actually helps the Commission fulfil the goal that it set for itself, and for the industry, when it put these initiatives forward.
LISTNUM 1 \l 14623 They are the type of results that both the industry and the Commission can look to and say here are specific results, positive results of what we have undertaken and what we set out to do in this specific area ‑‑ and I am speaking to Aboriginal peoples here.
LISTNUM 1 \l 14624 So I think when you look at initiatives such as that, when you look at the fact that our relationship with OMNI right now has provided us with the opportunity to launch series that we couldn't afford on our own, it is a shared programming opportunity in which Aboriginal producers are actually producing the programming, and there are two talk shows. It is in partnership with OMNI.
LISTNUM 1 \l 14625 It has got a holistic view which is spiritual and what have you. It speaks to a range of issues that are not only specific to the Aboriginal population but to other Canadians and a variety of Canadians, a diversity of Canadians, and will air on both networks almost in simulcast.
LISTNUM 1 \l 14626 So I think when you look at such initiatives, those are the tangible results that I think, in my mind, the Special Benefits Policy are meant to address. We are seeking here to correct an imbalance. We are seeking here to provide opportunities and these are the types of results that in fact do it.
LISTNUM 1 \l 14627 Certainly, SABAR with its increasing presence and its increasing participation by other networks has given us the opportunity to really present to them the wide range of opportunities that they can actually benefit from in the long run by not only participating but by creating worthwhile, meaningful projects and incentives and initiatives that will give opportunities to Aboriginal peoples.
LISTNUM 1 \l 14628 COMMISSIONER CUGINI: Well, Mr. LaRose and to your colleagues, thank you. Thank you very much for being part of these proceedings.
LISTNUM 1 \l 14629 Mr. Chairman, those are all my questions.
LISTNUM 1 \l 14630 COMMISSIONER FRENCH: On the question of the earmarking of a portion of the benefits policy, could I just be clear, you would think it would be appropriate that 35 percent of the 10 percent should be earmarked for APTN?
LISTNUM 1 \l 14631 MR. LAROSE: That is the proposal.
LISTNUM 1 \l 14632 COMMISSIONER FRENCH: I just want to understand factually that that was the proposal.
LISTNUM 1 \l 14633 MR. LAROSE: The proposal is, let's say the benefits is 10 percent, which is 100 percent of the benefit, then yes, 35 percent would be, in our view, given how it is currently distributed amongst other minorities and other groups, I think that that would be a fair representation, as a minimum anyways.
LISTNUM 1 \l 14634 COMMISSIONER FRENCH: Thank you.
LISTNUM 1 \l 14635 Just to get back to the question of your northern service, Mr. LaRose, what is happening in those communities where the transmitters are inoperative? I mean how are the residents of those communities receiving the service if they are receiving it?
LISTNUM 1 \l 14636 MR. LAROSE: We have started to actually poll within those communities. Some of the residents there have turned to alternates and that is where satellite is coming into play. A lot of individuals have turned to satellite to receive a basic signal.
LISTNUM 1 \l 14637 Unfortunately, at this time of year right now because of this recent development, it is very difficult to reach some of those communities. We will need ‑‑ in the spring we are planning an actual formal review of those communities and if we get the green light from Heritage we will start to connect those individual residences with DTH units so that they can receive APTN North as they used to but through the DTH system.
LISTNUM 1 \l 14638 So unfortunately, because of the remoteness and because of the climate, it is totally unfeasible at this point in time for us to actually go in and do sort of a site survey, a more intensive and more specific site survey.
LISTNUM 1 \l 14639 COMMISSIONER FRENCH: It could be a long winter for some of those folks.
LISTNUM 1 \l 14640 MR. LAROSE: It could be a long winter.
LISTNUM 1 \l 14641 COMMISSIONER FRENCH: So the ultimate objective is to move to a DTH cable, another kind of hybrid model in which there would be some kind of a headend in the community and then there would be in many cases a cable distribution off the DTH signal; would it be looking like that? I am just guessing. I am just trying to understand what you have in mind.
LISTNUM 1 \l 14642 MR. LAROSE: No, actually what we want to do is to actually ‑‑ in those communities that currently have cable, we have looked. There are 80 communities in the north, and Wayne can correct me if my numbers are slightly off but it is 80 or 82 that are served by ‑‑
LISTNUM 1 \l 14643 MR. McKENZIE: It is 80.
LISTNUM 1 \l 14644 MR. LAROSE: Eighty. Of those, 39 currently have small cable companies and our goal with those cable companies is to develop a process whereas all the houses would be cabled and APTN North offered decoded free of charge. Anything else, obviously, the subscriber would pay for as any other Canadian.
LISTNUM 1 \l 14645 For those communities that have no cable systems, the proposal is to provide a DTH unit, a Bell ExpressVu unit, again, with the north feed only decoded, everything else being left at the discretion of the subscriber. If they wish to subscribe to another tier or what have you, or to a basic service, then it would be at their own cost just like any other Canadian.
LISTNUM 1 \l 14646 Taking into account that over‑the‑air right now what they are getting is APTN, this is what they would receive through a DTH unit.
LISTNUM 1 \l 14647 COMMISSIONER FRENCH: So in effect if I have understood, there is a government subsidy for a technological infrastructure which could be expanded to a very large range of signals but which would only be operative absent an additional financial contribution from the subscriber for your signal; have I got it right?
LISTNUM 1 \l 14648 MR. LAROSE: Well what it is is the current subsidy that operates the transmitters, which is the Northern Distribution Program, would ‑‑
LISTNUM 1 \l 14649 COMMISSIONER FRENCH: Which is a Heritage program? Excuse me. It is a Heritage program?
LISTNUM 1 \l 14650 MR. LAROSE: Yes, it is a Heritage program. It is a Heritage Canada program and initially it was set ‑‑ the program's initial goal was to connect the north to an equivalent measure to what the south was connected because many of the northern communities had no signals whatsoever.
LISTNUM 1 \l 14651 So Heritage ‑‑ and at the time I think it was Secretary of State ‑‑ launched the Northern Distribution Program which provided for service in those communities by installing those transmitter towers.
LISTNUM 1 \l 14652 And now the goal is just to maintain what is established under that program, which is our signal at this point because I am looking at it from APTN's perspective, and provide it for the duration of the time that there currently is a subsidy.
LISTNUM 1 \l 14653 What happens beyond the subsidy will then be something that we would need to look at but there remains four year to this contribution agreement and this is the four years in which we are looking to ensure that there is still service to those residents of our signal as per the contribution agreement we have with Heritage.
LISTNUM 1 \l 14654 We are still waiting for confirmation from Heritage that the contribution agreement language allows for this. If not, then we will need to start looking at communicating with our audience up north and informing them of the various alternatives that exist beyond the transmitter towers.
LISTNUM 1 \l 14655 COMMISSIONER FRENCH: And if the customer who was the object of this subsidy program wanted to expand his variety of services, he would enter into a commercial relationship with Bell ExpressVu?
LISTNUM 1 \l 14656 MR. LAROSE: Exactly.
LISTNUM 1 \l 14657 COMMISSIONER FRENCH: Yes. I have to tell you the first time I ever saw out‑of‑market U.S. signals was in Baffin Island. So it is not entirely new, is it?
LISTNUM 1 \l 14658 Well, those are very important communities from the point of view of the Commission's perception of what is an appropriate object of its interest and concerns, at least where I stand and I am quite confident that I speak for my colleagues.
LISTNUM 1 \l 14659 So I have appreciated your explanation of the situation and I hope that you would feel, in or out of the formal proceedings associated with the Commission, that you would keep us very much informed about what is going on because it is important at least to us to be able to adjust and only you have the requisite information. So we would appreciate it if you would keep us informed.
LISTNUM 1 \l 14660 MR. LAROSE: Yes, and in fact, if I may mention, in past years we always provided the Commission with a newsletter. This newsletter might be hitting your in‑boxes today and will be hitting your mailboxes next week and it does in fact speak, to a certain extent, to this program but there will be a specific one on this initiative as soon as Heritage confirms what we can and can't do on it. But this is a key priority.
LISTNUM 1 \l 14661 As I said, we want to make sure that you remain not only fully informed but that the network is transparent, open and accountable and seen to be so, and we will be providing you with that information in the coming hours and days. Thank you.
LISTNUM 1 \l 14662 COMMISSIONER FRENCH: Thank you.
LISTNUM 1 \l 14663 THE CHAIRPERSON: Mr. LaRose, in the northern service, other than APTN, are those Aboriginal communities receiving the CBC service and other broadcasting services or is it strictly APTN that they are getting?
LISTNUM 1 \l 14664 MR. LAROSE: Well on the over‑the‑air transmitters, they will receive both APTN and CBC. That is my understanding of the current setup. I don't know what CBC's plans are and I can't speak for the CBC but those are the only two that are received over the air. Any other signal that they wish to receive, they have to subscribe to another ‑‑
LISTNUM 1 \l 14665 THE CHAIRPERSON: Are you sharing facilities with CBC?
LISTNUM 1 \l 14666 MR. LAROSE: We are sharing some of the towers with the CBC and we are co‑maintaining them. In other words, we also pay part of the maintenance and operation costs for them.
LISTNUM 1 \l 14667 THE CHAIRPERSON: Now you have alluded that since October 2nd you now have an east and a west feed. Other than being delayed or shown prior, is it the same programming that you have on the two feeds or is there a set of programs for eastern Canada and another set of programs for western Canada?
LISTNUM 1 \l 14668 MR. LAROSE: For the first year it is strictly time delay but our plans, as we outlined to the Commission, as we have started to commission programming already will be to offer regional‑specific programming as well as some scheduling changes that will reflect the particular region.
LISTNUM 1 \l 14669 Some programming may be more appropriate in one region than another in a given time frame. That will be adjusted accordingly. Also, some of the programming that might be in prime time in the north because it is prepared and it is produced in the north may end up in non prime time on the other feeds as well.
LISTNUM 1 \l 14670 So eventually each feed will have quite a level of differentiation amongst each to reflect the regional element of it but also to ensure that we can share those stories from every region to each other and to all Canadians by extension.
LISTNUM 1 \l 14671 THE CHAIRPERSON: You alluded to some sharing of programming that you have done with the major broadcasters. Could you give us some example?
LISTNUM 1 \l 14672 MR. LAROSE: Some of them ‑‑ and Joanne, I will ask you to pick after this. But the first thought that comes to mind is we have done some movies of the week in partnership with CTV, "One Dead Indian," we have done "J.J. Harper Story" with CBC, and there may be others that come to mind.
LISTNUM 1 \l 14673 Joanne.
LISTNUM 1 \l 14674 MS LEVY: Yes. In terms of movies of the week we are participating in two new movies with CTV. One is called "Luna" and it is about the Killer Whale on the west coast. The other is "Elijah." It is a biopic on Elijah Harper.
LISTNUM 1 \l 14675 In both cases those movies are meant to be versioned in Aboriginal languages. So they will be seen on our station, on APTN, in both English and in an Aboriginal language that is appropriate to the area that they are aimed at.
LISTNUM 1 \l 14676 Other programming that we share. One of the big successes has been "renegadepress.com" which is a youth‑oriented program. Originally it started with APTN and TVO. Global has come on board in the last year or so and as a result of their participation ‑‑ with our other partners before we could only afford to do about nine episodes a year. With Global coming on board, we now have an order of a full 13 half hours of that program, which has won Gemini awards and so on. So it is something we are very proud of.
LISTNUM 1 \l 14677 We share with OMNI. We are doing a talk show that is going to be on the winter schedule. We do a lot of cooperating with some of the tele‑educators who band together with us to pull together our resources to create interesting programming, especially documentaries and a little bit of drama.
LISTNUM 1 \l 14678 So those are the sorts of things we have been able to do.
LISTNUM 1 \l 14679 THE CHAIRPERSON: And it is my understanding that you have been doing things with CTV with regard to CTV "Newsnet" and CTV News?
LISTNUM 1 \l 14680 MR. LAROSE: Yes. One of the ‑‑ and that is to show ‑‑ actually, I thank you for that opportunity to mention this because I think this is an example of what I mean when I say that it can go beyond being strictly a benefit.
LISTNUM 1 \l 14681 CTV back in 2000 offered ‑‑ as part of their being purchased had provided a special benefit of $600,000 a year to develop a news component to APTN. Way beyond the terms up to now, this partnership has evolved ‑‑ this benefit has evolved into a partnership.
LISTNUM 1 \l 14682 We are now not only sharing news stories ‑‑ quite often what you will see on NewsNet and even on the National on some occasions are APTN news items as prepared, written and from the perspective of the Aboriginal reporter and the Aboriginal component of APTN, and our very specific initiative.
LISTNUM 1 \l 14683 And looking at the numbers in the past year, CTV has been relying more and more on APTN to provide that network CTV News and NewsNet with news items that are specific to our community to a certain extent or deal with issues that are related to our community.
LISTNUM 1 \l 14684 And right now, on average, I would say that there is between one to sometimes two stories a day that are picked up. We share our news line‑up of the day with CTV, they know exactly what we are working on, which stories we are covering and quite often they'll request the story from us, even before we finalized it and they air it later in the day.
LISTNUM 1 \l 14685 So, I think it's the type of success story of a benefit program that went beyond the program. I mean, the program ended a year and a half ago and yet, we are still committed to developing that partnership and to provide opportunities not only to get Aboriginal stories out, but to get Canadians to understand our perspective on those stories, which is often very different than if it was presented as we were found to say: history would be very different today if it had been reported by APTN.
LISTNUM 1 \l 14686 And we are trying, in fact, to live that motto in partnership with CTV with this arrangement.
LISTNUM 1 \l 14687 MS LEVY: I should add as well that we've talked about the English language programming that we do on APTN but, of course, 15 per cent of our programming is in French and on the French side, we have been able to make some very good progress in partnerships there.
LISTNUM 1 \l 14688 THE CHAIRPERSON: You've read my mind.
‑‑ LAUGHTER/RIRES
LISTNUM 1 \l 14689 MS LEVY: Yes. RDE, Télé‑Québec, Canal D, yes, they have come on board to help us out with programming on the French side as well.
LISTNUM 1 \l 14690 LE PRÉSIDENT: Monsieur Larose, vous nous avez parlé de SABAR et AMF... MF, je pense, peut‑être à l'exception de monsieur French qui est peut‑être moins familier, mais tous les autres ont récemment participé à des audiences de radio et donc, ont eu l'occasion d'être *immersés+ au projet de MF.
LISTNUM 1 \l 14691 Mais, est‑ce que ces programmes‑là SABAR et MF ont des composantes francophones ou si... où est‑ce que vous avez... et est‑ce que vous avez l'intention d'en développer?
LISTNUM 1 \l 14692 M. LAROSE: Oui, SABAR, a des participants francophones pour peut‑être pas tous ceux qu'on aimerait encore, mais on a... à date, je crois que TVA en fait partie et peut‑être TQS aussi. Il y a un autre... Astral, pardon, Astral.
LISTNUM 1 \l 14693 Alors, il y a une composante francophone. MF est aussi dirigé à notre communauté francophone au Québec et ailleurs, la communauté autochtone qui est surtout au Québec d'ailleurs, sauf pour une communauté francophone en Ontario.
LISTNUM 1 \l 14694 Quand je parle de *communauté+, je parle de la communauté autochtone, évidemment.
LISTNUM 1 \l 14695 Alors, il va y avoir une composante francophone, il va y avoir des... il y a déjà des partenariats qui ont été... il y a eu des tentatives de partenariat avec, entre autres, le Collège de Jonquière, je crois, et on va chercher à réanimer ces partenariats‑là avec, justement, les opportunités que MF pourrait offrir à certains jeunes.
LISTNUM 1 \l 14696 Du côté de MF, il y a présentement des initiatives très spécifiques pour rejoindre les jeunes dans leur milieu scolaire lors de différents forums dont ce qu'on appelle en anglais des "job fairs", des initiatives du genre où on se rend dans un endroit et on présente tout ce qui touche à la télédiffusion, pour tenter d'inciter les jeunes à regarder ce domaine‑là et, ensuite, avec MF, l'intention est de leur offrir des opportunités de pouvoir aller... disons, suivre une formation professionnelle qui va leur permettre de travailler dans le domaine.
LISTNUM 1 \l 14697 LE PRÉSIDENT: Monsieur Larose, mesdames, messieurs, je vous remercie de votre participation ce matin.
LISTNUM 1 \l 14698 Nous allons prendre une pause de 15 minutes et, donc, nous reviendrons à 10 h 25. Merci.
‑‑‑ Suspension à 1008 / Suspension at 1008
‑‑‑ Reprise à 1027 / Upon resuming at 1027
LISTNUM 1 \l 14699 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît. Madame la secrétaire.
LISTNUM 1 \l 14700 LA SECRÉTAIRE: Merci, monsieur le président.
LISTNUM 1 \l 14701 Just a small reminder for those who are in the hearing room, if you would, please, turn off your Blackberries. We have had some comments by the interpreters that it is causing some interference.
Thank you very much for your cooperation.
LISTNUM 1 \l 14702 We will now proceed with the next presentation of Stornoway Communications and I would ask Ms Martha Fusca to come forward.
LISTNUM 1 \l 14703 When you're ready, Ms Fusca, you have ten minutes for your presentation. Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14704 MS FUSCA: Good morning, Mr. Chair, Commissioners and staff. My name is Martha Fusca. I am President and Chief Executive Officer of Stornoway Communications.
LISTNUM 1 \l 14705 Stornoway joined the Canadian Television Broadcast sector in September of 2001 as one of the new independent entrance to receive specialty digital broadcast licences. We proudly offer Canadians three Canadian digital specialty services: I Channel, a category 1 service offering analyses of social and public affair issues of interest and concern to Canadians and two category 2 services: BPM‑TV, Canada's only dance channel and the PetNetwork, Canada's only television service devoted to pets and their families.
LISTNUM 1 \l 14706 At Stornoway Communications we not only produce hundreds of hours of original Canadian programming each year. We also acquire hundreds of hours of Canadian content, much of which comes from the independent production sector.
LISTNUM 1 \l 14707 While based in Toronto, we're producing programming from across the country, including Montreal, Vancouver, Calgary and Ottawa. We also work with independent producers to help them finance their projects while they are still in development.
LISTNUM 1 \l 14708 We produce many programs in PSH for educational, charitable and not for profit organizations to help them deliver their message and important information to Canadians. Recent examples include the Canadian Environmental Awards, Canadian Association of Retired People, the Multiple Sclerosis Society, the Canadian Breast Cancer Foundation and the Youth Science Achievement Awards.
LISTNUM 1 \l 14709 I am delighted to have the opportunity to make this presentation to you today as you begin this first stage of your review of Canada's television landscape. While I don't envy you, your task, I applaud you for your commitment to this endeavour.
LISTNUM 1 \l 14710 I also applaud your wisdom in scheduling three consecutive hearings to examine the issues, challenges and opportunities faced by the three pillars of Canada's National Television Service: Over‑the‑air broadcasters, specialty broadcasters and broadcast distributers.
LISTNUM 1 \l 14711 Together, these three pillars provide a vital service to Canadian television viewers and are essential to the continued achievement of the objectives of the Broadcasting Act.
LISTNUM 1 \l 14712 A comprehensive and forward looking regulatory environment is essential to our collective success and only a holistic, timely and coordinated approach in making changes will be effective and enable each part to continue to play its role in providing Canadians meaningful diversity and choice in a sustainable way.
LISTNUM 1 \l 14713 Dealing with one part separately without the benefit of a full review of the potential detriment to the other parts, particularly the specialty services is not, in our view, in the public interest.
LISTNUM 1 \l 14714 Stornoway is signatory to the independent specialty submission, it continues to share the concerns that this submission addresses and the positions that it takes. I'm here today to emphasize the concern that decisions may be made at the end of this first proceeding that may affect negatively what I call the "Classic 2001" because they would be made before the specialty and distribution sectors are reviewed.
LISTNUM 1 \l 14715 Stornoway Communications is enthusiastic about the opportunity to provide its views in each of the reviews envisaged and to appear before you to discuss the issues of importance to its continued contribution to the achievements of the objectives of the Broadcasting Act.
LISTNUM 1 \l 14716 What I fear is that decisions, if made at the conclusion of this hearing, will preclude taking into consideration their full effect on other sectors. For example: how can the Commission make decisions on issues such as the relaxation of advertising restrictions, fees for carriage, the deregulation of priority carriage for over‑the‑air broadcasters, tearing and packaging tears before the completion of the hearing and review of the other sectors.
LISTNUM 1 \l 14717 Moreover, as the over‑the‑air channels migrate from analog to digital format, the packaging and pricing of the services offered will become even more important because, and I cannot stress this enough, for smaller independent operators like Stornoway, the viability of our program services is extremely sensitive to pricing and packaging decisions.
LISTNUM 1 \l 14718 Under the current regulations, even with I channelism must carry channel, we have no leverage with the distributors on the pricing and packages of our services. This means that we are among the most vulnerable to possible negative consequences resulting from decisions on these issues during these hearings.
LISTNUM 1 \l 14719 I believe strongly that it is essential that as these pricing and packaging decisions are made, there must be some regulatory mechanisms to ensure that equitable and meaningful consideration is given to the licence obligations, mandate, interest and viability of the smaller independent channels and their subscribers and that appropriate consideration be given to potential negative impacts.
LISTNUM 1 \l 14720 In many ways, television in Canada is at the cross‑roads. We have more channels, distribution systems, alternative platforms, competition, technological advances and many other challenges. We have media concentration on many fronts as more and more niche and some conventional broadcasters are bought up by the bigger players, a trend that many believe will continue.
LISTNUM 1 \l 14721 If nothing is done to ensure that the expansion of choice provided by specialty in each broadcasting is not protected and afforded some continued place in the system. The result will be among other things reduced diversity for Canadians.
LISTNUM 1 \l 14722 Also, in recent years, we have seen significant changes in broadcast services owned and controlled by the broadcast distribution undertakings. The distributors who started out as essentially common carriers have become conglomerate, with the result that a handful of companies on most of the major distribution undertakings, as well as programming services.
LISTNUM 1 \l 14723 Meanwhile, the independent specialties are left with little or no leverage when they attempt to discharge the role that you licensed them to play.
LISTNUM 1 \l 14724 The complexities of the relationship among the over‑the‑air channels, the specialties in the broadcast distribution undertakings and the need for each of these groups to be individually strong so as to be collectively stronger necessitate the decisions from the CRTC reviews be taken contemporaneously.
LISTNUM 1 \l 14725 Individual sector determinations must be made in the context of the entire broadcasting system and, therefore, most weigh into the results of all of the reviews have been absorbed and analyzed.
LISTNUM 1 \l 14726 While this may be of less concerns for some, it is a fundamental concern to the smaller independent contributors in the industry.
LISTNUM 1 \l 14727 It is essential that the decisions made regarding each of the three industry groups takes into account the possible, probable and possible effects on the other groups and this can only be done with confidence once all of the reviews have been completed and analyzed in a holistic manner.
LISTNUM 1 \l 14728 I referred earlier to the group of digital specialty pioneers who went to the television broadcast arena as part of the bold new wave of digital television services in Canada as the Classic 2001.
LISTNUM 1 \l 14729 Stornoway and the others faced many trials and tribulations of the launch in this new digital world and while we encountered what could be considered a perfect storm to grit commitment and sheer determination we have survived. We have invested millions of dollars and are about to turn the corner and we and our subscribers are very excited about the potential of this new wave.
LISTNUM 1 \l 14730 As the Commission conducts its review, I believe it is my responsibility to draw your attention to one of the essential lessons I've learned from this experience.
LISTNUM 1 \l 14731 The digital specialty industry, specifically the smaller independent broadcasters is still young and needs ongoing support and nurturing to enable it to realize its potential and it's importance to the CRTC mandated contribution of the Canadian Broadcasting System as well as to the Canadian Broadcasting Act.
LISTNUM 1 \l 14732 The Commission must continue to support and strengthen what it helped to create in the first place.
LISTNUM 1 \l 14733 Stornoway and other independents can only succeed when there is a fair and sustainable playing field, particularly since the field has disparate and different parts which should work together fairly to achieve stated general goals such as Canadian choice and diversity in a sustainable manner over time.
LISTNUM 1 \l 14734 I am personally delighted to have had the opportunity to seize and realize a dream of becoming a broadcaster after a lengthy and satisfying carrier as an independent producer and journalist and I thank those who went before us for creating the environment that made this possible.
LISTNUM 1 \l 14735 Today, I appeal to you for your help in securing that environment for the future in which independent broadcasters can continue to provide Canadians with informative and entertaining channels and programs that are independent, speak to our diversity and a proudly and steadfastly Canadian.
LISTNUM 1 \l 14736 Thank you very much for your interest and attention. I will be happy to answer any questions or elaborate on any points made in our written submission or today's presentation.
LISTNUM 1 \l 14737 THE CHAIRPERSON: Thank you, Ms Fusca. If I am understanding well your submission of today, what you are saying, while the distributors and over‑the‑air broadcasters are saying that, please, relax the rules, what you are saying to us is: please, do more rules to make sure that we keep our place in the system. Am I right?
LISTNUM 1 \l 14738 MS FUSCA: Gosh! I hate to disagree with you, but not totally. I am not suggesting that we don't relax certain rules that may need to be relaxed, given the current environment that we find ourselves in.
LISTNUM 1 \l 14739 What I am suggesting is really two fold: one is that these reviews should not be looked at separately because I think that once ‑‑ when we hear one, there are may be implications in the other sectors that may not be accounted for. So, I think the holistic manner is ‑‑ the holistic approach is really critical.
LISTNUM 1 \l 14740 But secondarily what I am saying is that over the last 5 years what I've learned is that people like Stornoway Communications, our company, and you've heard from some of the other folks as well, is that if we don't have some mechanisms that are provided for by the CRTC for this ‑‑ for the small independent players, that our very survival, I believe, is in jeopardy.
LISTNUM 1 \l 14741 If we have no negotiating power, you know, when the Commission says, you know, you go out, here's your category 1, here's your category 2 licenses, you have to go and negotiate, there's a presupposition there that's actually some kind of discussion or dialogue that happens. And there's absolutely none really. You're dictated too and that's what I'm really talking about.
LISTNUM 1 \l 14742 So I'm not suggesting that you don't relax some areas. What I'm suggesting is that you look at is a whole and then look after some of the people that really can't currently look after themselves.
LISTNUM 1 \l 14743 THE CHAIRPERSON: So, to come back to your last point and it was, what you were saying is that we should, before coming up with a public notice or a policy decision on over the air television, we should hold our public hearings regarding both discretionary services and distribution organizations.
LISTNUM 1 \l 14744 MS FUSCA: Yes, that's exactly what I'm saying.
LISTNUM 1 \l 14745 THE CHAIRPERSON: I'm sure that you are well aware that the Commission has already planned to process the renewals of the over the air television broadcasters over the next 18 to 24 months.
LISTNUM 1 \l 14746 And the purpose of this process was to put down the broad policy matters that were of, that will be the basis for the renewal of the over the air broadcasters.
LISTNUM 1 \l 14747 If you're asking us to suspend this proceeding or maybe continue it but suspend releasing our decision, it means that in terms of workload the Commission will have almost nothing to do for the next 24 months but then will be seeking and crying for help to do everything over, in the years after.
LISTNUM 1 \l 14748 And obviously we have to do ‑‑ we've done some planning. I think it's not always what everybody will have wanted it to be but we surely have to cover all the types of licensees that we have before us.
LISTNUM 1 \l 14749 I think we're taking, surely we're ‑‑ just to reassure you that this, we knew from the outset that there were some issues that could be joint issues for all the system.
LISTNUM 1 \l 14750 But nevertheless there is a need, I think the Commission surely is taking into strong consideration the comments that you just made and the ones that those who had appeared before us this morning have made.
LISTNUM 1 \l 14751 And throughout our deliberation I could assure you that we will keep that in mind. But I have to tell you right away that there will be a public notice sometime during 2007 dealing with the issues that are before us.
LISTNUM 1 \l 14752 I have no further questions unless my colleagues have.
LISTNUM 1 \l 14753 COMMISSIONER FRENCH: Ms. Fusca, I understand the general tenor of your argument. Of course we will try to look at it from a holistic point of view and that's never been absent from our mind.
LISTNUM 1 \l 14754 And I recognize perfectly well, because you're not the first person who's suggested to us that the pure logic would suggest that we do it all, all 3 of the sets of players or however many you consider there are in the segments in the industry, that we do them all at once. And it just turns out to be intellectually and logistically and physically for us virtually impossible.
LISTNUM 1 \l 14755 So we're doing it the best way we can, but we're very much aware of the concerns that you raise.
LISTNUM 1 \l 14756 The more general injunction to have mechanisms, to provide negotiating power, et cetera, I mean do you have anything specific to suggest? Or, I mean, am I being unfair in suggesting to you that while I get a general idea of what the point is I'm wondering what, as a policymaker, I'm supposed to about it.
LISTNUM 1 \l 14757 MS FUSCA: Well, I think that, for that example, I mentioned earlier, I think that at some point we will have to look at pricing as a, you know, and establish base minimums.
LISTNUM 1 \l 14758 I mean I think that everyone in this room who's had any experience in managing and running, you know, from one to, you know, multiple channels will tell you that, you know, to run a worthwhile, you know, attractive program, programming service that, you know, people will want to subscribe, it's virtually impossible to do it with 5 cents a subscriber.