ARCHIVED - Transcript, Hearing 13 September 2012
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Volume 4, 13 September 2012
TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-370 and 2012-370-1
Palais des congrès de Montréal
1001 place Jean-Paul-Riopelle
13 September 2012
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.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-370 and 2012-370-1
Anthony McIntyreLegal Counsel
Romy Ochmann St-JeanLegal Counsel
Rachel MarleauHearing Coordinator and Manager, Regulatory Corporate Analysis
Neil BarrattHearing Coordinator and Corporate Analyst
Palais des congrès de Montréal
1001 place Jean-Paul-Riopelle
13 September 2012
- iv -
TABLE OF CONTENTS
PAGE / PARA
TELUS Communications Company (int. #1675)1175 / 6384
Canadian Association of Community Television Users & Stations (CACTUS) (int. #1673)1243 / 6759
Rahul Majumdar (int. #10)1262 / 6860
Sheldon Harvey (int. #1074)1273 / 6921
David Birnbaum (int. #431)1292 / 7038
Alberta Media Production Industries Association (AMPIA) (int. #1646)1309 / 7121
Québec English-language Production Council (QEPC) (int. #1580)1322 / 7191
Ryerson University, National Film Board of Canada and Information and Communications Technology Council (ICTC) (int. #1537)1343 / 7304
On Screen Manitoba (int. #1676)1361 / 7403
Youth eMage Jeunesse (int. #1254)1383 / 7536
The Canadian Media Production Association (CMPA) (int. #1627)1397 / 7615
Producer's Roundtable of Ontario (PRO) (int. #1628)1441 / 7828
Association des producteurs de films et de télévision du Québec (APFTQ) (int. #1515)1459 / 7942
MediaSmarts (int. #1237)1500 / 8247
- v -
PAGE / PARA
Undertaking1450 / 7879
- vi -
PAGE / PARA
Volume 1, 2012/09/10
"...that we don't have core cutting or core shaving"
"...that we don't have cord cutting or cord shaving"
paras 1502-1570 incl:
Volume 3, 2012/09/12
page - vi -:
replace with this page
"...The CRTC has the mandate, jurisdiction and power to ensure that this transaction benefits the broadcasting system by adding original local news to many radio and TV stations across (inaudible), consequently giving many young people the opportunity to launch new careers."
"...The CRTC has the mandate, jurisdiction and power to ensure that this transaction benefits the broadcasting system by adding original local news to many radio and TV stations, consequently giving many young people the opportunity to launch new careers."
"...Thank you for your time. I welcome your questions.
--- Technical difficulties / difficultés techniques
THE CHAIRPERSON: And I take it if..."
"...Thank you for your time. I welcome your questions.
THE CHAIRPERSON: Good morning. Well, thank you for being here.
Well, first, as a more procedural aspect, I am wondering if some of the tables you are presenting here -- they seem new to me -- weren’t part of the original submissions.
MS AUER: These tables have been in most of our submissions before the CRTC for the last five years. They use CRTC... They are not new CEP data brought forward, let’s say, about job losses. This is simply a graphical representation of the CRTC’s financial summaries that it publishes every year.
THE CHAIRPERSON: And I take it if..."
--- Upon resuming on Thursday, September 13, 2012 at 0829
6378 LE PRÉSIDENT : A l'ordre, s'il vous plaît.
6379 Bonjour, tout le monde. Je vais passer la parole à la secrétaire de l'audience.
6380 LA SECRÉTAIRE : Merci. Bon matin.
6381 We will start today with the presentation by TELUS.
6382 Please introduce yourself and your colleagues and you have 10 minutes for your presentation.
6383 Thank you.
6384 MS MAINVILLE-NEESON: Thank you very much.
6385 Merci, Monsieur le Président, de nous donner la possibilité aujourd'hui d'exprimer notre opposition à l'acquisition d'Astral par Bell.
6386 Je suis Ann Mainville-Neeson, directrice générale de la réglementation de la radiodiffusion chez TELUS.
6387 Je suis accompagnée, à ma droite, de David Fuller, premier vice-président et chef du marketing de TELUS, ainsi que Clément Audet, vice-président, Solutions consommateurs pour le Québec.
6388 Je vous présente également, à ma gauche, Blair Miller, vice-président, Solutions de contenu, et Richard Stursberg, conseiller principal, Médias et divertissement.
6389 L'acquisition d'Astral par Bell soulève de grandes inquiétudes. Sa réalisation, conformément à ce qui est proposé, serait très néfaste pour le consommateur et pour la concurrence au sein du secteur canadien de la radiodiffusion.
6390 L'aspect le plus préoccupant de cette transaction a trait à la somme de contenu qui se trouverait concentré entre les mains d'un seul et même distributeur de service.
6391 Bell est déjà la plus importante entreprise de télécommunications au Canada. Elle permet aux consommateurs d'accéder au contenu par l'intermédiaire de toutes les plateformes existantes, à savoir la télévision par satellite et sur IP, Internet, et, bien sûr, les services mobiles.
6392 A titre de plus grande entreprise de communications canadienne, Bell a les moyens de déployer une stratégie abusive et anticoncurrentielle. Ses concurrents, comme TELUS, doivent déjà accepter des conditions commercialement déraisonnables que Bell leur impose s'ils ne veulent pas priver leurs clients du contenu accessible aux clients de Bell.
6393 Le Conseil a déjà déterminé dans la décision annonçant la politique sur l'intégration verticale «que les entités intégrées verticalement ont à la fois l'occasion et l'incitatif de se conférer une préférence indue en s'attribuant des droits d'exclusivité du contenu qu'elles contrôlent sur différentes plateformes de distribution. »
6394 A peine l'encre avait-elle séchée sur cette politique que les prévisions du Conseil sont devenues réalité. Nous avons vu Bell nous refuser l'accès à du contenu ou nous l'offrir à des conditions déraisonnables.
6395 Ce qu'il faut retenir c'est que d'une façon ou de l'autre, Bell gagne, elle gagne toujours, soit parce que certains consommateurs vont transférer leur abonnement aux services de Bell afin d'accéder au contenu disponible sur leur réseau ou parce que Bell aura réussi à imposer des prix exorbitants à ses concurrents, lesquels se traduiront par des hausses tarifaires aux consommateurs.
6396 It has been mentioned by many parties in this proceeding that Olympic coverage on mobile was only available to Bell Mobility subscribers. In fact, no Bell Media video content is widely available on other national mobile providers as a result of the commercially unreasonable terms demanded by Bell for access to this content. To be clear, Bell's offer for mobile content was far more expensive than the $3 million dollars per annum suggested by Mr. Cope on the first day of this hearing.
6397 Similarly, other statements made by Mr. Crull on the first day of the hearing do not reflect reality. Mr. Crull went so far as to say that Bell had never, and I quote, "provided any behaviour in the marketplace that was inconsistent with both the spirit of vertical integration and the letter of it."
6398 And yet, as Mr. Crull is very well aware, Bell denied access to signals to competitors who would not sign its carriage renewal agreement. These channels included the new French-language sports service RDS2 in both standard definition and high definition, and the HD upgrades of existing specialty services such as Animal Planet, Bravo!, BNN, Discovery Channel, and Space.
6399 Bell denied access to these signals despite announcement of the intended regulatory amendments to implement a new "no head start" provision and strengthened standstill provisions. It is especially egregious that one of the services denied, namely RDS2, was not even a service being "renewed." Bell refused to conclude a separate agreement for this newly launched service contrary to the intended new regulatory prohibition on tied selling. Instead, Bell dug in its heels, denying access to content to competitors when they sought legitimate dispute resolution regarding terms which on their face contravene the new Code of Conduct.
6400 As the Commission is aware, the main issue in dispute between Bell and TELUS related to a minimum penetration requirement being sought by Bell with respect to the TSN service. Simply put, Bell's terms would have forced TELUS to repackage TSN to the basic tier.
6401 TELUS subscribers currently enjoy a channel selection model that provides both choice and flexibility by allowing them to chose and pay for only the genres of specialty content they really want. Bell's terms would have put an end to TELUS' sports theme pack and would have forced us to put TSN on basic, which in turn would have forced all subscribers to pay for this premium-priced sports service.
6402 We expect Bell to challenge this assertion by stating that they gave us an option to avoid the minimum penetration requirement. Notionally they did, but in reality they did not.
6403 It is true that Bell included two options for TELUS in the offer filed in final offer arbitration. TELUS could pick the so-called "set packaging" rate so long as it changed its packaging to achieve a penetration rate of 75 percent, which means that 75 percent of all TELUS Optik TV subscribers would have to receive and pay for TSN -- this was well above consumer demand and the natural penetration rate of TELUS' sports package which averages 55 percent-- or TELUS could opt to leave TSN in the current package with its current penetration as determined by market demand and pay on a "penetration-based rate card," which in Bell's proposal scaled fees so high that it would have been completely irrational from an economic standpoint not to move TSN to basic.
6404 Ultimately, either of the options put by Bell to TELUS would have led to the same result, TELUS having to move TSN to basic. Either way, Bell wins.
6405 Further, on numerous occasions, Bell has refused to provide to TELUS a proposal for multiplatform rights -- and that was mentioned yesterday by Rogers. It is hard to reconcile this behaviour with the spirit and the letter of the CRTC's vertical integration framework.
6406 The point of all this is that Bell is already big. It has clear incentive and opportunity to behave anticompetitively to the detriment of consumers and it is clearly making it difficult for the Commission to manage compliance. Adding significant new broadcasting assets to Bell's content portfolio through approval of this acquisition of Astral will only make matters worse.
6407 Given Bell's demonstrated behaviour with its existing content assets, thwarting the Commission's rules and guidelines every step of the way, why would its self-serving behaviour change if allowed to get bigger and more powerful?
6408 Even Bell's conduct with respect to this transaction demonstrates a certain lack of respect for the Commission's rules and practices. Bell's application, despite the rabbits pulled out of the hats on Monday, makes significant departures from Commission policy and applicable precedents regarding valuation and tangible benefits.
6409 And on the more important issue of concentration of media assets, Bell attempts to skew the numbers of its total viewership by changing the methodology and adding foreign services into the denominator. Bell thus manufactures a lower number of total viewership in English-language markets to make the argument that this significant transaction is not even worthy of careful examination.
6410 The fact is that the Commission has never included viewership to foreign services when examining diversity of Canadian services and doing so clearly would require a re-examination of the thresholds established by the Commission's Diversity of Voices policy.
6411 Regardless of what calculation you use for viewership share, it is irrefutable that a combined Bell and Astral entity would be extremely concentrated.
6412 According to the CRTC's latest Monitoring Report, Bell and Astral's combined viewership is 39.7 percent and in that period it climbs to 42.7 percent when one includes the Joint Ventures which are broken out in that report. But what's even more disconcerting is that more than 75 percent of all viewership would be concentrated in the hands of two vertically integrated owners, Bell and Shaw.
6413 Also, studies filed by others in this proceeding show that this would make Canada's broadcasting system one of the most concentrated and vertically integrated by international comparison with G8 countries.
6414 Most importantly, the thresholds set in the Commission's Diversity of Voices policy were set before massive transactions which have created an extremely vertically integrated broadcasting industry. The dynamics of the industry resulting from vertical integration and the incentives for anticompetitive behaviour must now be factored into the Commission's analysis of media concentration to determine how much is too much.
6415 Moreover, TELUS submits that fixing the tangible benefits package is not enough. No temporary injection of cash into the broadcasting system will counter the harm caused by this concentration of content in the hands of one major distributor. In fact, increasing the tangible benefits package will likely make things worse for competitors on two fronts.
6416 First, Bell will no doubt attempt to recoup the cost of this transaction through the imposition of commercially unreasonable terms for access to content, thus imposing cost increases on both competitors and consumers, and second, they would have an extremely large fund with which to control and influence Canadian content developers.
6417 There is no doubt that this proposed acquisition by Bell raises significant policy concerns and TELUS urges the Commission not to approve the transaction.
6418 Regardless of your decision on this transaction, TELUS strongly urges the Commission to more expeditiously and effectively enforce the safeguards adopted in the vertical integration policy.
6419 It is interesting to note that almost 12 months after the announcement of the Commission's vertical integration policy, you can't find a single non-vertically integrated distributor or broadcaster who believes the current framework provides sufficient protection. In fact, the only two parties who seem to believe the safeguards are wholly sufficient are Bell and Shaw, the two largest vertically integrated broadcasting companies in the country. This alone speaks volumes.
6420 Given the record of what we have seen so far, it is clear that significant additional safeguards are necessary to prevent abuse of market power by Bell.
6421 If the Commission considers it appropriate to approve Bell's application to acquire Astral, TELUS submits that it is absolutely necessary that Bell be required to accept a condition of licence on all its programming services and its satellite relay distribution service that specify conduct that would automatically and on a prima facie basis constitute an abuse of market power, including, at a minimum, the following:
6422 - failure to provide interim access to content during a dispute;
6423 - refusal to contract for all content rights, including the linear broadcast rights and the non-linear on-demand rights, each on a multiplatform basis, for one unified commercially reasonable price when authenticated by a subscriber's television subscription;
6424 - insistence on terms which prevent a competitive distributor from providing a differentiated offer to consumers; and
6425 - failure to provide sufficient notice of the launch of new content or to give sufficient priority to negotiating an agreement regarding access to any new content which forces the complainant to launch the content without an agreement in place.
6426 En conclusion, quelle que soit la décision du Conseil dans ce dossier, nous implorons le Conseil de donner plein effet à sa politique sur l'intégration verticale et de mettre fin à la capacité des compagnies intégrées verticalement, comme Bell, d'abuser de leur pouvoir de marché.
6427 Il va sans dire, et vous l'avez remarqué, on le dit toujours, il nous ferait plaisir de répondre à vos questions. Merci.
6428 LE PRÉSIDENT : Madame, Messieurs, merci pour cette présentation. Le vice-président de la radiodiffusion aura des questions pour vous.
6429 COMMISSIONER PENTEFOUNTAS: I kind of feel that we're reliving all week VI, expedited and FOA. It just keeps coming back over and over and over again.
6430 If I can sort of sum up the crux of your presentation, which is not dissimilar from the brief you deposited a few months ago, it sort of goes to the argument that Rogers made that the business model for Bell makes it so that it's to their advantage to cause as much damage as possible to other distributors, to the point where they wouldn't mind losing on the broadcasting front and they could recoup those costs on the distribution front.
6431 I ask you the same question I asked Rogers yesterday. How does that business model work given the $6.5-billion investment over the last 24 months on the part of Bell? Don't you have to recoup those costs? And explain to us again how the numbers work whereby that strategy is a winning strategy.
6432 MR. FULLER: I think it is a valid point that they need to recoup the investment that they've made and that there will be an incentive to make sure that the broadcast side of their business continues to be profitable, but, you know, as I think Rogers talked to yesterday as well, there's two ways in which you can abuse your market power when you own both the retail and wholesale side.
6433 One of them is the one that you just mentioned whereby, to the detriment of your broadcast side, you benefit your distribution side.
6434 But the other one, and one we've seen certainly through the negotiations so far, is that you come up with a set of terms and conditions on your broadcast side that would otherwise be unreasonable to a distributor but have your distribution side, your retail side of your business, agree to those terms, right. That thereby actually moves profit and grows the business on the broadcast side.
6435 That is a win-win situation from Bell's standpoint because it forces us into a position where we can choose to accept those terms and be on a par with them from a content standpoint with our service provider business or we can say, sorry, those terms are too egregious, too expensive, we can't afford those, and then be in a position where they differentially have the content on their distribution side and we don't.
6436 Either way, you know, Bell at the end of day wins, having both sides of the business.
6437 COMMISSIONER PENTEFOUNTAS: All week we have been playing devil's advocate. There's no personal opinion or agenda here.
6438 But if they're offering the content at the same terms and conditions to their distributor, Bell, it's not as if the TELUS customer would have to pay more for the same content.
6439 The argument that states that I'm going to put pressure on the other distributors so that the client will leave that distribution company and come to my company, doesn't that fall by the wayside if you're all paying the same price for the content?
6440 In other words, they're not offering it --
6441 MR. FULLER: Yes.
6442 COMMISSIONER PENTEFOUNTAS: -- to TELUS at $10 a sub or $10 wholesale and they're offering it to themselves at $8 and undercutting you?
6443 MR. FULLER: Correct. Yes.
6444 So in the scenario, the second scenario where they've come up with inflated terms or egregious terms and then their distribution side has agreed to them and we choose to accept those, then you're right, our distribution sides are not differentiated and people aren't going to leave us to go to them.
6445 COMMISSIONER PENTEFOUNTAS: Individually you're all competing on the same footing. I understand that the consumer may be harmed --
6446 MR. FULLER: Correct. Right. That's the concern, is that in doing so -- and our FOA submission, as you know, is a perfect example of that, right? It was a situation where had we accepted their terms we would have driven TSN into the base. So the loser in that scenario is the consumer because there's now less choice for them and their costs rise.
6447 COMMISSIONER PENTEFOUNTAS: Just getting back to TSN, I mean one option was that you drive TSN onto the basic package. The other option is -- and this would be probably Bell's argument -- is that sports content and sports rights are very expensive. There are no depressionary or deflationary pressures on sports rights.
6448 MR. FULLER: Right.
6449 CONSEILLER PENTEFOUNTAS : Ça monte en flèche, as we say in Quebec. It's just all up all the time.
6450 And maybe if your system can't afford to have a sports theme pack at $7 -- I know you bumped it up to $9 -- but if that's unreasonable and people -- if you want to have choice, choice comes at a cost and the cost may not be $7 or $9, it may be higher than that if you don't want to put it in basic.
6451 I mean how do you respond to that? In other words, if TELUS clientele, and you've maxed out at 55 -- I know you were at 59 at some point.
6452 MR. FULLER: Yes.
6453 COMMISSIONER PENTEFOUNTAS: When you were giving it away for free, I think it was at 59.
6454 MR. FULLER: Yes.
6455 COMMISSIONER PENTEFOUNTAS: So that speaks volumes.
6456 But let's say your client base is at 55 percent, and if we follow the rate card, that content for that small a pool, the cost will rise inevitably, and shouldn't those people that are interested in sports pay what the real cost is?
6457 MR. STURSBERG: May I just make a comment on sports rights costs? I actually had the pleasure, I think, of negotiating the largest sports rights contract in the history of the country.
6458 Sports rights costs, when you say they're inevitable going up like that, I don't think that's true. What we've seen, which is very interesting in the last round of the negotiations with respect to the Olympics, is that both in the United States and in Canada, it's very clear that the cost of the Olympic Games for the next rounds are going to come down. And the reason they're going to come down is because people paid too much money in the past.
6459 The -- where the sports rights costs will land, ultimately, is they will land on wherever demand dictates that they must land, so that -- so that there's no reason to believe that somehow or another they're going to go up inevitably.
6460 They can't go up inevitably. They can only go up to the point that the market will actually bear. And if the reality is that the market will only bear 55 percent penetration, that's ultimately where those costs are going to have to land.
6461 CONSEILLER PENTEFOUNTAS: I understand the Olympic experience, and there seems to be -- we're hitting a wall there on Olympic coverage, but that's once every two years or every four years.
6462 But on the league costs -- NHLs, NFLs -- those costs in the foreseeable future over the next, sort of, term -- the next four or five years, and some of those deals have already been cut -- are going to be increasing, and you mentioned the deal you cut with the CBC, Mr. Stursberg. I mean, those rights will be more expensive next year.
6463 MR. STURSBERG: We'll see. I mean -- but ultimately, the amount of money that you're going to pay for rights is going to be a function of demand. And demand is going to be based on two considerations, fundamentally: one, how many people are watching; and, two, what's the penetration of the services that are actually carrying it. That's what's going to determine it.
6464 And when people sit down to decide how much money am I going to pay for these rights, they're going to do it on the basis of making estimates as to where the demand is going to be, both in terms of the penetration of the sports specialty services and in terms of the number of people who are going to watch the Games and the advertising revenue they can generate.
6465 Nobody is irrational. Nobody is going to pay more than that; otherwise, they'd sink their businesses.
6466 CONSEILLER PENTEFOUNTAS: But shouldn't a distribution --
6467 MR. FULLER: I'm sorry.
6468 CONSEILLER PENTEFOUNTAS: Go ahead. Sorry.
6469 MR. FULLER: Well, just to top up on that. I actually think that underscores why it's so important that you actually have a liquid market based on choice. Because if more distributors had the same motto we had where specialty sports was a choice that you could choose to pay, then if you're right and those costs on those rights keep escalating, then the cost of that specialty sports package will keep going up.
6470 And at some point, the market will determine and say, you know what, I like specialty sports, but I don't like it to pay $15. They'll stop paying it, penetration will drop, and the companies that then acquire those rights will go, you know, like they've done with the Olympics and say I'm losing money if I keep, you know, continuing to pay that. That's -- that's a free market; right?
6471 And so I think if you have an environment where, you know, you're not forcing something into the basic where it automatically just gets passed through to consumers, then the market will actually make sure that the rights, you know, come in to a point where people are willing to pay for those, you know, given the content that they're getting -- in this case, sports.
6472 CONSEILLER PENTEFOUNTAS: Just briefly on the numbers, and I don't know that the numbers are -- the actual calculation of the numbers is as important as the market force that comes with the purchase of Astral by Bell.
6473 I mean, if they're at 42 or 40 or 43, I don't know if that's going to be the game changer at the end of the day, but for the sake of argument, I mean, we talk about including American services, and I understand the policy.
6474 But to Bell's argument, why wouldn't we include that 13 percent market share that's enjoyed by American services? All broadcasters are competing against these services, and that's not even including the over-the-top services. Why wouldn't we add that on to the denominator?
6475 MR. FULLER: Well, I think you could add it on. I'll let Ann top up, you know, with her expertise, but, you know, I think our fundamental problem with including them is that the Diversity of Voices policy and the thresholds that were set at, you know, 35 and 45 did not include them.
6476 So I don't think you can change the calculation and say the same thresholds apply to what is, you know, an altered calculation. So, you know, the threshold, then, I would argue, needs to be modified to take into account American channels.
6477 So back whenever that threshold was, what, you know, if 35 would have been equivalent to 25 had you, you know, included the American channels; right? So...
6478 CONSEILLER PENTEFOUNTAS: Great. No, that's the answer.
6479 MR. FULLER: Okay.
6480 CONSEILLER PENTEFOUNTAS: And no one's given it thus far, so it's good, yeah.
6481 MS MAINVILLE-NEESON: Yeah, I completely agree with Mr.Fuller, and I would only add that it's also important to look at the diversity of Canadian voices, because you wouldn't want to be -- if you did revise the policy and decide to include the non-Canadian services, the problem that you might encounter is that you want to look at the diversity of Canadian voices.
6482 These are the ones that you can control, these are the transaction -- you're not asked to consider transactions of non-Canadian services. Therefore, it's extremely important to look at the marketing concentration only for the Canadian services. Whether you also look at the -- the foreign services is a separate question, I think.
6483 CONSEILLER PENTEFOUNTAS: Yeah. No, it's slightly out of scope, but I wanted someone, for the record, to put it down because it hasn't come up all week.
6484 Notwithstanding the calculations, the Bell-Astral acquisition is still within that threshold that was mentioned.
6485 MR. FULLER: That's right, yeah.
6486 CONSEILLER PENTEFOUNTAS: And what do we say -- and it was mentioned yesterday by the Chair, most aptly. We've talked about predictability. And Mr. Cope came in Monday and said, you know, I never would have risked my shareholders and my company's interests had we not been within the thresholds of what is acceptable in an acquisition process. So, clearly, we are within those thresholds.
6487 So what do we say to that argument, that we followed the rules and people here are asking for things that are above and beyond the rules? How do we answer that question?
6488 MS MAINVILLE-NEESON: Well, if you -- if you look at the Commission's Diversity of Voices policy, the thresholds are not the only criteria. It is one among many criteria that the Commission uses, and certainly it takes into account the views of the Competition Bureau, it takes into account vertical integration, and numerous other factors in the policy. And these are all -- and, of course, just the market power that any concentrated broadcasting entity would have.
6489 Therefore, it is not just the thresholds that one looks at, according to the Diversity of Voices policy, and the -- you know, certainly Mr. Cope was advised as much and nevertheless took the risk.
6490 What we're saying is it is -- it's not in the public interest. Ultimately, that's the test, and the guidelines that you've provided in the Diversity of Voices policy are merely guidelines to determine: Is the transaction in the public interest?
6491 MR. STURSBERG: If you don't mind my adding one thing. It's -- the Diversity of Voices decision is really about horizontal integration. It is, as the term suggests, about diversity of voice. It's how many different independent voices do we have within Canada; how many different independent Canadian voices do we have.
6492 That's not -- that decision was not about market power. These are not tests about market power. And the issue that's in front of the Commission today, I think, is different in character.
6493 This is really a decision about market power and whether the vertically integrated company like Bell, particularly if it takes on Astral, has too much power and that it will be able to abuse that power in a way that that's anti-competitive.
6494 So I think we have to be very careful. What we said in our opening remarks is, yes, those are the tests in terms of the diversity of voice, but they now must be seen in the context of what's actually in front of the Commission, which is the whole issue of vertical integration and how far can you go.
6495 So we have to be careful here, I think, not to mix up apples and oranges. Indeed, if you're talking about diversity of voice in the context of vertically integrated companies, then presumably what you would want to say is the tests have to be lower than they were in the Diversity of Voices tests.
6496 CONSEILLER PENTEFOUNTAS: Yeah, I get the argument that it's about market power, not market share, necessarily, so that's why I'm not putting much emphasis on calculations.
6497 You supported the Bell-CTV deal in 2010?
6498 MR. STURSBERG: Telus did.
6499 MS MAINVILLE-NEESON: Yes. On condition that --
6500 CONSEILLER PENTEFOUNTAS: Other interveners yesterday.
6501 MS MAINVILLE-NEESON: -- safeguards were put in place, so we did not oppose. But we certainly --
6502 CONSEILLER PENTEFOUNTAS: I think the safeguards were put in place, but you're telling us they're not sufficient or they're not working?
6503 MS MAINVILLE-NEESON: Certainly, we have seen some issues, we've encountered some issues.
6504 CONSEILLER PENTEFOUNTAS: Well, you heard some of them this morning.
6505 MS MAINVILLE-NEESON: And if we add the Astral assets, then those problems get bigger. And the problems with enforcement at this time certainly simply get greater because it is much more difficult to regulate an entity that has so much power and so much impact on the entire industry that it becomes very much -- much more difficult to impose the safeguards, because you have one party who is telling you what the -- who is attempting to set market terms and it's not a functioning market.
6506 And the Commission must rely on a functioning market, and it will have a lot more difficulty in determining whether things are commercially reasonable in final arbitrations that may ensue if there is no functioning market anywhere. And if this acquisition is approved, we're going to see the loss of a functioning market to the extent that it still does today, which is -- can be debated, but it will make the Commission's job much more difficult.
6507 CONSEILLER PENTEFOUNTAS: Yeah, I got that in sort of a -- I got the feeling that it was sort of a "make-work" project going to Commissioner Denton's comments a few days ago, and one of your paragraphs speaks to the quantity of work that may be coming.
6508 That being said, if it is the case, will any ex-ante or ex-post measures make a difference? I understand your conditions at the end of your document, but will that be sufficient?
6509 MR. FULLER: Yeah, I think we fundamentally believe that if, you know, there is a framework in place that's clearly understood by both parties and in a, you know, very concise and rapid manner is executed on, then eventually the market will understand what the rules are and abide by the rules.
6510 But it needs to be, you know, very timely with a very quick turnaround, particularly given, you know, the temporal nature of the value of a lot of content; right? Things come and go, and if -- if we're in an 18-month process with lots of back-and-forths that's both expensive and time-consuming, then by the time, you know, the resolution is made and the value of whatever it was we were debating is largely passed; right?
6511 CONSEILLER PENTEFOUNTAS: So VI, as it stands now, it's sufficient?
6512 MS MAINVILLE-NEESON: I think what we need to understand as well, for example, there are rules that are absolutely necessary, like the no head start rule and the standstill rule, which have only now really been amended in the regulations, so I understand they are untested and, therefore, the denial of signals that we encountered -- which was against the spirit of certainly the policy that you announced back in 2011 -- was not followed. Hopefully, now that those rules are firmly entrenched in the regulations, we will see all players abide by the rules.
6513 However, the problem with those rules, for example, the no head start, access to content is one thing -- and it's absolutely essential -- but once we've added the content, for example, a mobile content right, if we are unable to negotiate an agreement and we have to invoke the no head start to launch that product, we're launching it to our consumers and selling it to our consumers at an undetermined rate. We have no idea how expensive it might be in the, you know, in the end.
6514 Therefore, ultimately, we know we will pay retroactive rates, but we can't obtain retroactive rates from our consumers; therefore, timeliness, despite these rules of having access to the content, become extremely important.
6515 CONSEILLER PENTEFOUNTAS: So you wouldn't want to wait a year and a half to find out what you'd -- what you're going to be charged?
6516 CONSEILLER PENTEFOUNTAS: You want that to happen more quickly.
6517 You spoke -- and it'd be really interesting in terms of tangible benefits and the arguments that have been made about tangible benefits and finding a number there, and your thesis is that the number isn't important -- is almost as unimportant as the market share in that, contrarily, the bigger the tangible benefit, the bigger the benefit to the acquiring entity. And that hasn't come up before and I found that interesting.
6518 I also found in your last, sort of, sentence in that paragraph that the creative community may be almost held hostage given the funds that are going to be available. Would that -- would you detect some kind of self-interest amongst the creative community? Because they have supported the acquisition, on the whole, with -- a conditional support.
6519 MR. FULLER: Yeah, I would say, Commissioner, it's difficult for us to speak on, you know, what their motives are. What we were trying -- the point we were trying to make is that, you know, if the resolution is that we can have this deal pass but, you know, increase the tangible benefits, we were just trying to point out that that, you know, that has ramifications, right, both in terms of, you know, the fact that eventually, you know, Bell, being a commercial entity just like us, will have to recoup that -- that return, so there's potential, then, for an increase, you know, in costs passed on to consumers in some way.
6520 CONSEILLER PENTEFOUNTAS: Yeah.
6521 MR. FULLER: And, secondly, the point we're trying to make is you will actually increase their market power, right, to what we were talking about earlier. If the concern is how much market power they have here, well, if there's a massive fund now that is solely under, you know, Bell's control to say how it is going to be, you know, doled out, they've now got market power not just over the wholesale and retail side of this but a significant amount of money that they are going to be doling out to the people that actually develop content. That actually increases market power; right? That was the point we're making.
6522 Now, you know, whether the people that have supported the deal, you know, today, the entities that have supported the deal, are self-interested, I -- you know, I don't think we're --
6523 CONSEILLER PENTEFOUNTAS: You don't have to speak to that. I'm sorry about that.
6524 MR. FULLER: Yeah.
6525 CONSEILLER PENTEFOUNTAS: Listen, you also talked about resolving things on a prima facie basis. How do we define that?
6526 We already have reverse onus provisions involved and we have the head start and we have the standstill clauses.
6527 How do we accelerate the process, I guess, that's what you mean by -- by that reference.
6528 MS MAINVILLE-NEESON: Right. Yeah, I think it's providing additional certainty. So we have the code of conduct, which essentially is similar to these conditions of licence to the extent that it is attempting to determine certain instances which are found to be commercially unreasonable. And the Commission lists a bunch of examples in section 1 of that code of conduct.
6529 What we suggest is that make those -- make those crucial provisions. Some of these provisions that we've stated in our opening statement and in our submission are, in fact, similar to what's already in the code of conduct. But we suggest that they be applied by condition of licence, if you decide to approve this transaction, in order to make them even more enforceable.
6530 What we mean by prima -- finding in favour of the complainant on a prima facie basis is that, when you have that instance, it hardly requires the same level of judgment as determining what's commercially reasonable. But if they're denying signals, it's -- that's clear. Either we have them or we don't. And it shouldn't lead to numerous back and forth, either from a reply comment or a whole similar type of -- of comment. And so --
6531 CONSEILLER PENTEFOUNTAS: But by virtue of head start and standstill, signals cannot be denied.
6532 MS MAINVILLE-NEESON: As you might have --
6533 MR. FULLER: Yet they were for a significant amount of --
6534 MS MAINVILLE-NEESON: Yet they were, yeah.
6535 MR. FULLER: -- amount of time. That's our concern.
6536 MS MAINVILLE-NEESON: Yeah.
6537 MR. FULLER: There's --
6538 CONSEILLER PENTEFOUNTAS: Are we referring back to the HD --
6539 MS MAINVILLE-NEESON: Now, we understand that the rules --
6540 CONSEILLER PENTEFOUNTAS: -- the HD issue, or --
6541 MS MAINVILLE-NEESON: Yeah, we are, the HD and the RDS2 issue.
6542 Now, we understand that the rules had not been enacted in the regulations at the time.
6543 CONSEILLER PENTEFOUNTAS: Yeah.
6544 MS MAINVILLE-NEESON: Nevertheless, it is certainly -- the framework had been announced, and so compliance with the spirit of the policy certainly had not been -- had not been done.
6545 But more to the point is we also suggest that there might be other instances which are not covered by what's been enacted in the regulations. And if those instances do occur, we think that we need to be protected against those as well.
6546 For example, Bell also controls another bottleneck facility, that is, the -- it's satellite relay distribution undertaking. It's not covered by the vertical integration policy. So we could, at any time, see Bell deny signals from its SRDU service, and that, we find a concern as well. Hypothetically.
6547 CONSEILLER PENTEFOUNTAS: Is the list exhaustive of things that you'd like to have added? If it is, we'll ask you to sort of perhaps put that down on paper and give it to us before tomorrow morning, if possible. If not, please enumerate them.
6548 MS MAINVILLE-NEESON: I think they were exhaustive.
6549 MR. STRASBERG: Can I --
6550 CONSEILLER PENTEFOUNTAS: They are exhaustive in the --
6551 MS MAINVILLE-NEESON: In our list, if --
6552 MR. STRASBERG: Pretty much.
6553 MS MAINVILLE-NEESON: That's fine.
6554 CONSEILLER PENTEFOUNTAS: Okay.
6555 MR. STRASBERG: Can I just draw your attention to one very particular aspect of this that the Rogers people also put some particular emphasis on, which is the multi-platform linear and non-linear rights.
6556 And that it's -- what's very important as we move forward -- and I think it would be enormously helpful for the Commission to clarify this -- that this entire set of non-traditional rights, if you like, the ones that have been emerging, and the ones that are crucial to everybody's business if we want to be able to make sure that our customers can receive, as everybody has said over and over again, the shows and the channels that they want to see however they want to see them and whenever they want to see them so that we can make sure that our customers are satisfied and that they're not tempted to go off to Netflix, then it's really, really, really fundamental that all of these rights be made available.
6557 The Rogers folks explained, I thought, in a very -- very amusing, interesting way yesterday what the strategy of Bell is in this regard when they said it's "KISS". It's "keep it separate, suckers". And the whole idea is that if you can separate them out, then you can have another negotiation. Now we're going to have a negotiation on the -- on the linear broadband rights, and we're going to have one on the linear wireless, then the non-linear wireless, and so on and so forth, all of which does two things: one of which is drives up the price; and, secondly, it drags out the time.
6558 So one of the things that we've said -- and it's not dissimilar to what the Rogers people have said -- is that a very fundamental safeguard here is to make sure that we get all these rights for one price. And the Rogers people have said essentially the same thing. It's really essential that we get all these rights for one price. That'll stop a lot of gaming.
6559 And I might point out that this is exactly the sort of position that Bell took when it negotiated the terms of trade with the independent Canadian producers. And what it said to them was we have to have all the rights for one price, and that's precisely what they've written into it.
6560 So I think it -- dramatically, it's fundamental to the future of where we're going, it stops gaming, and it dramatically simplifies how it is that we're going to approach the problem.
6561 MR. FULLER: Yeah, and I would add to that, Richard, that it's actually fundamentally what consumers want; right? Like, we know when you go out and ask a consumer what their expectation is is that they pay, you know, for their rights, right, their subscription to their content, once, and that allows them to watch it on any screen, you know, they choose, any device they choose, no matter where they are. But, you know, that's what they want and so therefore, you know, we'd like to see that flow through the system.
6562 CONSEILLER PENTEFOUNTAS: I understand that. And to Bell's argument, Mr. Stursberg, to the effect that, you know, we don't have the value of the rights yet, they don't come as a package? I mean, how do you respond to some of the arguments that Bell puts forward? A lot -- some of that came up this summer, but for the record.
6563 MR. STRASBERG: Yeah. You know -- you know, as a -- I'm sorry that the Rogers' charts aren't here any longer, because I thought the Rogers' charts illustrated the problem beautifully.
6564 By and large, everybody's getting these rights. And they're getting them -- I mean, there may be small instances like the Olympic rights that are historic and then there was a bunch of issues about that, but, by and large, all the -- all the rights suppliers understand that's exactly the way in which they're going to maximize their revenues and that's how it is that they're selling the rights.
6565 And, by and large, when we're buying services from every other supplier, whether it's Shaw or whether it's Rogers or whether it's whomever, they're all providing all of the rights.
6566 So when you saw their -- when you saw their charts, they were very interesting, because they were all green check marks across and all, you know, red "Xs" at the bottom --
6567 CONSEILLER PENTEFOUNTAS: We saw them.
6568 MR. STRASBERG: -- and the truth of the matter is that what Bell says to be the case, it actually -- I've forgotten what it was that Ken Englehart said -- something to the effect that it's a gigantic red herring.
6569 Industry practice now, best practice throughout the industry, whether you're a program producer or you're a service supplier, is to provide all the rights.
6570 CONSEILLER PENTEFOUNTAS: But at the end of the day, the broadcaster is buying the rights as a whole; ergo, they should be offering them to distribution -- bing -- as a whole?
6571 MR. STRASBERG: Yeah. Precisely. And that's exactly as I was saying. That's exactly what it is that Bell has negotiated in the terms of trade with the Canadian independent producers for a very good reason, because that's exactly the right way to do it.
6572 CONSEILLER PENTEFOUNTAS: I look at your sort of four or five asks here, and we've already touched about interim access. We've just talked about non-linear rights; offering a competitive -- differentiated product, we've sort of touched upon that.
6573 But the idea of offering sufficient priority before negotiating the launch, I guess, of -- of content, how would you define "sufficient"? What kind of heads-up are we looking at before we apply the heads-up policy? I mean, isn't that tough to put a timeline on that?
6574 MR. FULLER: Yeah. I think the point we're trying to raise there is that we can't enter in discussions in a week --
6575 CONSEILLER PENTEFOUNTAS: A week before the launch, I understand that.
6576 MR. FULLER: -- give us a proposal three weeks before the launch --
6577 CONSEILLER PENTEFOUNTAS: But how do you regulate --
6578 MR. FULLER: -- where we have concerns about it and need to go back and forth and then speak to you guys --
6579 CONSEILLER PENTEFOUNTAS: I understand.
6580 MR. FULLER: -- and then load the channel.
6581 CONSEILLER PENTEFOUNTAS: And then it's too late --
6582 MR. FULLER: Right.
6583 CONSEILLER PENTEFOUNTAS: -- and they're already up --
6584 MR. FULLER: Yeah.
6585 CONSEILLER PENTEFOUNTAS: -- and you don't know what you're going to be paying down the road. I understand all that. But how do you -- how do you set a --
6586 MR. FULLER: No, no --
6587 CONSEILLER PENTEFOUNTAS: -- time limit on that?
6588 MR. FULLER: Two to three month -- two to three months. Within a quarter, I think, Tom, is fine. I mean, there's technical --
6589 CONSEILLER PENTEFOUNTAS: A quarter?
6590 MR. FULLER: -- there's technical requirements there around just being able to actually, you know, get the channel up and get the feed and whatnot; right? So if there are sufficient, you know, head start and early start rules in place, then, really, what we're just seeing is -- is, you know, we can't be notified of an impending launch, you know, two weeks before you guys launch it and then expected to be able to actually get it up and -- you know, and running.
6591 CONSEILLER PENTEFOUNTAS: Do you want to speak to us briefly -- back to multi-platform rights, because I think it's going to be important going forward.
6592 Mr. Cope mentioned yesterday that there was a $3 million offer for the rights and that Bell themselves is paying, to themselves, $8 million.
6593 MR. FULLER: Yeah.
6594 CONSEILLER PENTEFOUNTAS: It would seem like chicken feed for -- for a distributor with 500,000 subs and growing.
6595 MR. FULLER: Yeah. So let's be crystal clear about what was offered.
6596 The only stand-alone offer we received around Bell mobile services was a total of -- a minimum annual total of $8 million a year. So there was a subscriber fee that you paid per subscriber.
6597 CONSEILLER PENTEFOUNTAS: Right.
6598 MR. FULLER: But the proposal came with a condition that said, you know, at the bare minimum, you're going to pay, on an annual basis, is $8 million. I'll explain how you get to $8 million in a minute.
6599 CONSEILLER PENTEFOUNTAS: Okay.
6600 MR. FULLER: But it's a total of $8 million up until, you know, the number of subscribers times the subscriber fee, you know, supersedes the $8 million, in which case you'll start to pay more; right? But it's a floor of $8 million, and that was the floor that -- that Mr. Cope was referring to when he said $3 million.
6601 We received in April of 2011 a first proposal. It was for all of -- or for Bell's mobile services, on their specialty services like TSN, right? And BNN, and that was a minimum of $5.5 million.
6602 COMMISSIONER PENTEFOUNTAS: April?
6603 MR. FULLER: 2011.
6604 COMMISSIONER PENTEFOUNTAS: 2011? Okay.
6605 MR. FULLER: April, 2011.
6606 COMMISSIONER PENTEFOUNTAS: Okay.
6607 MR. FULLER: A few months later, in August of 2011, we received a second proposal that said you could add CTV and CTV 2 to that, for an additional $2.5 million, essentially; right? There was also an option to buy that alone, but, you know, basically, if you bought the bundle of all Bell Mobile services it would be the 5.5 plus a minimum of 2.5, for a total of $8 million -- minimum of $8 million.
6608 COMMISSIONER PENTEFOUNTAS: Okay.
6609 MR. FULLER: That was the only stand-alone proposal we ever received.
6610 It is true that in the dying days of our final offer arbitration process, literally a couple of weeks before you guys eventually issued your ruling, we received a verbal proposal at a high level that said we could drop the minimum -- they would be willing to drop the minimum down to $3 million; right?
6611 But there was a very significant "but" on that and caveat on that, which is only on the condition that we removed our FOA submission; we settled outside of our arbitration and then agreed to a penetration of TSN -- a minimum penetration of TSN of 75 percent.
6612 So in other words, if we, you know, withdrew it and got TSN to 75 percent, then we could get the mobile side for $3 million.
6613 Obviously, the whole reason to went to final-offer arbitration was around the TSN dispute.
6614 COMMISSIONER PENTEFOUNTAS: Yes.
6615 MR. FULLER: We weren't willing to do that.
6616 But the only offer we ever received, that $3 million, you know, came with a very significant condition to it; to accept on a linear side a penetration of TSN at 75 percent; hence we did not accept that.
6617 The only stand-alone offer with no ties to it that we got was the $8 million offer that I am referring to.
6618 COMMISSIONER PENTEFOUNTAS: Okay; we get it.
6619 MR. FULLER: Okay.
6620 CONSEILLER PENTEFOUNTAS : C'est tout pour moi, Monsieur le Président.
6621 THE CHAIRPERSON: I believe Commissioner Menzies has --
6622 MR. STURSBERG: Sorry; just before we leave, could I just return to one question earlier that the Vice-Chairman was asking?
6623 I think the way you put it was: Well, if Bell Media charges Bell TV a certain price and then they charge the same price to the other BDU's, how is anybody disadvantaged?
6624 And I think that one of the things we should bear in mind is this is turns into a right pocket, left pocket problem.
6625 So, for example, just to make it, you know, just to make it clear; let's say they are going to sell a service that is worth a dollar; alright? But now, they say: Alright, but we are going to charge two dollars for that service and we are going to charge two dollars; Bell Media will charge two dollars to Bell TV, and we will charge two dollars to TELUS.
6626 Now, what happens is Bell Media has two dollars for something that is worth a dollar. So what do they do in terms of managing Bell TV? They can turn around and say: We give you back a dollar; and now, it is only a dollar.
6627 And they don't care, because they are indifferent. Because it is a right pocket, left pocket problem, because it is completely within the same family.
6628 So that is the reason why, in part -- the Commissioner said: Whatever they charge themselves is really completely irrelevant to understanding what is fair in the market, because they can charge themselves anything they want. Because it is just from one pocket of Bell to another pocket of Bell; and I just think that is an important clarification. There is no meaning to any -- there is no value to any test that involves what Bell charges itself, or, for that matter, as the Commissioner said earlier in its vertical integration decision: There is no value to whatever it is that any vertically integrated companies charge each other, because of course there is whole bunch of other considerations.
6629 COMMISSIONER PENTEFOUNTAS: But there is actually a -- there is a very real market example that is happening today around that: their Bell Mobile service today is -- when they first launched it, and still today, it is five dollars, you know, a month; right, for x number of hours --
6630 MR. FULLER: Ten hours, more or less; right.
6631 COMMISSIONER PENTEFOUNTAS: -- hours of service; right.
6632 MR. FULLER: But in their most lucrative plans, in their high-end plans, they have, for the last, you know, I don't know, six months; even longer, included it; right? At no additional cost; right? So they are, you know, to -- you know, they are basically taking and discounting it, if you will, and saying: No; we are throwing it into the package now. And that is actually part of the way that they have driven their subscriber base up to, you know, in the 500,000 range that they had told you.
6633 COMMISSIONER PENTEFOUNTAS: I was talking about your subscriber base.
6634 MR. FULLER: Right.
6635 COMMISSIONER PENTEFOUNTAS: I understand. I only mentioned it in the context of -- strictly on the distribution linear, sort of, cable business or optic or the IPTB(ph) business. If -- it is not as if they are offering TSN at, you know, four dollars and you are forced to offer it at six dollars, and that is how they are stealing clientele away from TELUS or anyone else.
6636 The -- it is not that simple; it is a little more sophisticated than that, the paradox that you have described; right?
6637 MR. FULLER: Right.
6638 COMMISSIONER PENTEFOUNTAS: Okay.
6639 MR. FULLER: Okay; thank you.
6640 COMMISSIONER PENTEFOUNTAS: Thank you.
6641 MEMBER MENZIES: Thanks. Can you respond to Bell's argument regarding the necessity of this sort of scale to compete against the OTT world?
6642 MR. FULLER: Yes; sure.
6643 I actually think they are manufacturing a boogieman to justify this acquisition. I honestly do not believe they need the scale, you know, that they state they do to compete against, you know, Apple and Google.
6644 The reality is the linear rights, you know, for the primary TV service, dwarf the costs of anything around non-linear and tablet rights today.
6645 So when they are down and negotiating the rights to get, you know, the next television show they are going to be broadcasting on the main networks' side; the cost associated with that, the money and the revenue associated with that the studio can make are far, far in excess of what they then would charge for non-linear rights to rule something like NetFlix; right?
6646 So, you know, they already have lots of scale and scope to buy the Canadian rights in those locations; right?
6647 And just, you know, look at, you know, the economics of it, you know, NetFlix costs eight dollars a month; right? If NetFlix starts to buy the Canadian rights at anywhere near the same sort of dollars, you know, that today they are throwing around to buy those rights down in the States, there is no way they could afford to continue to offer it at eight dollars, you know, eight dollars a month to their providers, because the content itself that you, you know, would now get on NetFlix would be worth far, far in excess of eight dollars a month. It has to be just based on what, you know, we pay in terms of wholesale rates today for our optic TV service.
6648 So --
6649 MS MAINVILLE-NEESON: And I think the dynamics of negotiation also enter into it, because there are there negotiating for the broadcast rights; there is no doubt that they are going to get the linear rights, and they negotiate the other rights as a -- as part of that; they are essentially asking the same thing that we are asking for; to negotiate for all rights for one unified price. There is no doubt that they are doing that and they have a benefit in doing that, and the studio is almost constrained in providing that, almost in the same example as provided by Quebecor yesterday when they suggested that - or (inaudible) - when they suggested that they lost their rights to the French-language broadcasting with the Masters, right? Because TSN came in; bought the English rights and said: I want the French rights too; that is what happened.
6650 The same thing goes on with the mobile rights. So they negotiate for the linear rights and: By the way, you are going to give me the mobile rights too and that is how it goes.
6651 MR. FULLER: Perhaps at an incremental cost but it is going to be a small relative into the incremental cost to the linear rights.
6652 MR. STURSBERG: Think of it this way, Commissioner; so if I go down to Hollywood and I am going to buy a television series; so I am going to pay whatever, a number, you know, $200,000 an hour, maybe more, for that series. And you are going to tell me: Oh; by the way, you are not going to get the linear broadband rights, for example. I am going to say: Wait a minute. You are telling me I am going to pay you $200,000 an hour and I am not going to get the linear broadband rights? You are either going to take those rights directly and compete against me or you are going to sell them to somebody else to compete against me? That is not going to happen.
6653 And it was very interesting, the number that Cogeco threw out, which is NetFlix, which doesn't even have any of these kinds of rights, which are really deep catalogs(ph), doesn't take it best; one and a half percent.
6654 So what would be the incremental value of that right? It would be at most one and a half percent. By and large, you are going to throw it under the table and say: Of course, you are going to have it, because you are paying so much money, as Dave says, for the conventional linear television rights, and I am not going to put myself in a situation where you are not going to have it and nor am I going to allow you to put me in a situation where you are going to start selling that stuff off to my competitors for something that ultimately is going to be of trivial value.
6655 Now it may be the case that as the rights winds all shift, then what is going to happen is the broadband rights are going to become more valuable.
6656 But as we shift with our customers and as we continue to be able to provide them those services both on conventional television, on broadband, on tablets, on whatever, then that is fine; then the mix of the rights may change, but you are still going to be buying all the rights as a package, going forward.
6657 M. CLÉMENT AUDET : Et si je peux ajouter; un bel exemple que ce n'est pas la grosseur qui détermine le succès des services over-the-top mais vraiment l'agilité; prenez au Québec la situation de TOU.TV. Vous avez ici une organisation de contenu qui a développé une plateforme hyper intéressante et qui malgré tout, a travaillé avec des fournisseurs comme nous pour la rendre multiplateforme. Si bien que maintenant, les gens qui aiment TOU.TV peuvent l'écouter autant sur le Web que sur des réseaux sans-fil et bientôt même sur des écrans de télévisions.
6658 Par de leur côté, leur vision de contenu; ils permettent à leurs partenaires d'être multiplateformes.
6659 Alors au Québec, vous avez un succès extraordinaire avec de la créativité et de l'agilité.
6660 Alors ce qu'on disait tantôt, c'est que si les fournisseurs de contenu canadien donnent tous les droits sur toutes les plateformes lorsqu'on négocie avec des tarifs raisonnables; au Canada, nous avons la créativité et l'habileté pour réussir contre n'importe quel offre over-the-top.
6661 MR. STURSBERG: And if I recall correctly, TOU.TV was not built by some kind of gigantic, technically sophisticated company. This was a completely straightforward matter that was put together by - God help us - the broken down, sad and impoverished -- CBC!
6662 So it is not -- and to the other issue, this is not a technically demanding thing. This is a thing where in fact what you can -- anybody can do this; you just simply have to round up the right collection of partners and the right collection of rights.
6663 As Clément was saying, it is a very nice offer; it runs across all platforms; and, in fact, it brings in a whole series of parties other than the CBC, in the same way as NetFlix does.
6664 MEMBER MENZIES: Okay. I have one more question -- so you don't chat among yourselves anymore.
6665 The -- you described a -- what you weren't certain was a market; whether a market still exists or an unhealthy or a broken or whatever exists.
6666 And the situation you described was -- left me questioning -- on the premise that in a healthy market exchanges take place between a willing buyer and a willing seller. Your description left me wondering whether, in terms of the seller, we had one that was doing what sellers should, is acting in the best interest of their shareholders and trying to get the best deal; so it was hard-nosed. Or one that was reluctant or one that was unwilling.
6667 And there is a big difference in whether there is a market for it or market price taking place within that.
6668 So in those three areas, where you either have a hard-nosed, a reluctant or an unwilling seller, how would you categorise the situation?
6669 MR. FULLER: Ah; the first. I think they were a hard-nosed negotiator that was trying to get the best for their shareholders and was - and this is the key point - utilizing all of their assets, both their wholesale and their retail assets, to maximize the benefit to their shareholders. And that is what is what is, you know, given the degree of vertical integration, you know, we now find ourselves in and we will find ourselves in if this deal is approved.
6670 The opportunity or you to use both your wholesale and your retail arms to advantage yourself in that hard-nosed negotiation becomes pretty extreme and puts those that, you know, are not in that situation at a disadvantage, which then ultimately has implications for consumers in terms of cost and choice. That is what we meant.
6671 MR. STURSBERG: This is a uniquely difficult situation. I mean what Dave was saying earlier is (inaudible)
6672 MEMBER MENZIES: Your mic?
6673 MR. STURSBERG: Oh; I am sorry. I said this is a uniquely difficult circumstance. Dave was saying earlier: I am Bell Media, so I am now going to try to maximize the rents that I can get for my services; right? So I am going to drive a really hard, hard bargain.
6674 If I drive a bargain that ultimately is above market and Optik TV accepts it, great; I have destroyed their cost structure and they are going to have to pass those costs onto their consumers; and then they are mad; and then who knows? They might come to me.
6675 Alternatively, they say: That is impossible. I can't take that price. Then I go: Wow; sorry about that. And then I am perfectly happy to go and sell them my distribution service, because I don't have that content.
6676 But it is one of the circumstances which is exactly as they have described. If somebody has booked a wholesaler and a retailer; and so either way, they win.
6677 MEMBER MENZIES: Thank you.
6678 THE CHAIRPERSON: Commissioner Lamarre?
6679 CONSEILLERE LAMARRE : Merci, Monsieur le Président.
6680 Deux points; si je comprends bien, là - et je vais d'abord faire une affirmation et arriver à une conclusion, et vous me direz si je suis correcte, Madame Mainville-Neeson.
6681 On fait présentement face, de ce que je comprends de votre présentation et de vos conversations ce matin -- on fait face présentement à des complexités à mettre en ouvre et à contraindre le respect des mesures de protection de la politique d'intégration verticale. Et compte tenu de cet état de fait-là, c'est un élément qui pour TELUS rend la transaction proposée trop risquée pour être approuvée; est-ce que c'est correct?
6682 MME MAINVILLE-NEESON : Absolument.
6683 CONSEILLERE LAMARRE : Maintenant, au sujet des règlements de différends. Je vous réfère au quatrième paragraphe de votre sommaire exécutif de votre intervention.
6684 A la fin -- au milieu du paragraphe, vous dites:
6685 "New rules to address concerns related to vertical integration have been fully enacted in the past few weeks and have yet to be tested."
6686 Les difficultés dont je -- que je faisais référence précédemment.
"TELUS is deeply concerned, however, that the Commission has failed to issue a timely and decisive decision related to disputes by independent distributors in the past year".
6687 Si je comprends bien ce que vous nous dites; sur le fond, le processus de prévention et de règlements des différends du Conseil, sans être parfait, est quand même acceptable, mais que les délais à passer à travers ce processus doivent être raccourcis pour qu'il soit franchement efficace?
6688 MME MAINVILLE-NEESON : Oui; absolument. Les délais, c'est une grande préoccupation. Les -- et je crois que si - et c'est ce qu'on voulait dire par « decisive decisions » - franchement, la décision sur -- dans notre arbitrage final qui indique que les deux offres pour la partie de TELUS; que l'offre de Bell et l'offre de TELUS dans la décision indique que les deux étaient -- avaient des termes qui étaient commercialement raisonnables.
6689 Puis j'ai beaucoup de misère à réconcilier comment c'est possible que l'offre de Bell, disons - puis cela revient à mon point qu'il faut être très -- il faut comprendre les décisions pour créer des précédents qui va ensuite aider les délais si le marché peut bien comprendre quelles sont les règles.
6690 Donc en --
6691 CONSEILLERE LAMARRE : Donc vous aimeriez qu'on soit plus catégorique?
6692 MME MAINVILLE-NEESON : Catégoriques, pour qu'on comprenne les décisions.
6693 A présent, quand on regarde la décision; je vois bien des choses comme « créatif; » une (inaudible) était créative et c'est pour cela qu'elle été choisie.
6694 Mais vraiment, j'avoue que je ne sais pas ce que cela veut dire, cela.
6695 CONSEILLERE LAMARRE : OK. Je vous remercie; ce sont toutes mes questions, Monsieur le Président.
6696 LE PRÉSIDENT : Merci beaucoup.
6697 Vous savez, j'ai pris l'occasion à quelques reprises de demander aux participants - mise à part la transaction devant nous - quelle sera votre vision du système de radiodiffusion et des communications en 2017?
6698 I choose that date because I am focussed on it and I thought perhaps I would get your perspective on what you see the vision is in (inaudible).
6699 MR. FULLER: I was teasing Anne last night that my tongue-in-cheek answer to this question, you know, because we anticipated it; you have asked it of a number of participants this week. It would be: At the current course and speed, we are all going to be owned by Bell.
6700 But the -- my dead-serious answer to the question - because we have put a fair bit of thought into it and I alluded to it a little bit earlier - is, I think, you know, what we want to see unfold, you know, by 2017 - and hopefully before - is the following sort of environment, from a consumer's perspective; and that is: As a consumer, I live in a world where I pay on subscription fee per month for my content and I can gain access to that content, no matter where I am and what screen or device I choose to watch it on; right? So I am the person that controls where and when I watch it, because I have paid for that content once through my subscription, either my broadband subscription or my television subscription.
6701 And I think, you know, it goes further than that, which is -- I would also add to that to say that: Also, as a consumer, I would want a level playing field to exist, where multiple distributor service providers can gain access to that content at, you know, similar prices, similar costs; such that I am not in a position where I have to choose my service provider and change my service provider to gain access to the content that I want; right?
6702 So I want ubiquity in all senses; ubiquity of content access for me, no matter what device I want, and I want ubiquity of service provider, because everybody has access to the same content and I don't have to actually go and pick and choose a service provider for this particular service, because they have that content and another service provider for that content.
6703 So --
6704 THE CHAIRPERSON: You have chosen a corporate strategy - correct me if I am wrong - that involves not purchasing a programming content. You are a purchaser renter of that content.
6705 First of all, I would like to know why that particular strategy was adopted, and second, what would you answer to criticism, potentially, that by not investing in, for instance, programming undertakings, you are not actually contributing to the creation of that Canadian content that you want to offer on several screens and platforms?
6706 MR. FULLER: Okay; well I will answer the -- well, I will answer both questions but --
6707 THE CHAIRPERSON: You said you were ready to answer all the questions.
6708 MR. FULLER: That is it; exactly; that is right.
6709 I will start with the first.
6710 That is correct; our strategy is clearly not to be vertically integrated. We have not pursued any content assets inside Canada or out and don't plan to anytime in the near future.
6711 Our rationale for that I would say is rooted in two things: First of all, I would point out that, you know, we are not alone in that strategy; in fact, most service providers around the world have the, you know, the same view, which is Canada is somewhat unique in its degree and level of vertical integration, as has been pointed out a number of times by, you know, different statistics.
6712 And, you know, fundamentally, our belief is, you know, we are a service provider company that adds value to our consumers through the services in the infrastructure that we invest in.
6713 So we have chosen a very, you know, consciously to invest our cash, our money, back into our infrastructure and the services that we provide to our customers, to ensure that, you know, we offer the latest, greatest Broadband networks and speeds. You know, we have invested $4.8 billion in, you know, broadband investments on internet and wireless in just Alberta, B.C. and Quebec alone in the last three years.
6714 So our view is to invest in infrastructure, as opposed to content. Because that is predominantly what our customers want us to invest in. Our consumers want us to invest in -- because what they are looking for is for us to improve our customer service; the speed of our network; the quality of our network; and the quality and speed capability of our services, like Optik, that we offer to our customers; not the content therein. So a very conscious strategy.
6715 As to, you know, any accusations around, you know, how that means we are, you know, not investing. I would point out that, you know, by renting that content at a very material cost, we are in fact investing back into the Canadian broadcast industry very month. You know, our cost of goods sold; the rental fees that we are paying for that content that we then provide to our consumers is very significant and a material, you know, investment that we make every month, back into, you know, the health of the Canadian broadcast industry.
6716 MR. MILLER: I also think it creates an incentive for us to amalgamate or offer more services to our customers. We build these fantastic networks, platforms and products.
6717 We want to offer more content. So if you look at our track record over the last two years; we have literally turned up hundreds of new services from all providers. We don't have a bias to a select provider. We want to give customers the services they want, the consumers.
6718 MR. FULLER: And the content that they want, no matter where.
6719 And we have that same approach on mobility; right? You will see that we don't develop mobile apps either; right? On a fundamental belief that the market and its creativity and innovation will come up with, you know, lots of great ideas that, you know, we never could if we just owned one company, one content company.
6720 And our job should be to basically, you know, provide all access to all of those content, those applications, those innovations to our customers across a outstanding high quality infrastructure and network.
6721 THE CHAIRPERSON: Analogies are always a little dangerous, but it seems to me when I reflect on your business model and other people's business model, it's a bit like the tension between research pharmaceuticals and generic pharmaceuticals.
6722 You are waiting around for others to invest a great deal of money in the content and then, you reap the benefit of others' investment in that.
6723 MR. FULLER: Yes. I would vigorously deny that, that analogy, you know. I spent a number of years consulting with the life sciences business. There is a fundamental difference in that, you know, in the pharmaceuticals business, you know, a generic, you know.
6724 You actually only reap the revenue of what you produce, right, the RND that you produce and then the generics are replicating that, right.
6725 We are, you know, we are not -- it is not like we have a content arm that wants to then replicate and rip off the content that is provided by other people. We are at a different point in the value chain, right.
6726 We are, you know, a distributor of content, right and we have chosen not to invest and go back and become vertically integrated and buy all of our, you know, our content because we choose to instead want to rent content from multiple suppliers, not just Bell Media, but Bell Media and Shaw and the best of, you know, all the content that's out there and provide that to our consumers, right.
6727 And it's no different than, you know, the analogy would be, and we have not chosen to, you know, on the mobile side of the business I didn't, you know, we have gone around buying OEMS and, you know, don't think we should produce and develop and put RND on our cell phones, right.
6728 We are a service provider, so we take, you know, the content and the services and the products of others at value to them and then provide them in turn to our consumers.
6729 MS MAINVILLE-NEESON: It would seem to me that the analogy is more that we are the retail store, the Shoppers Drug Mart, the Rexall that provides both the pharmaceutical and the generic version.
6730 THE CHAIRPERSON: Danger of analogies.
6731 MR. FULLER: Yes.
6732 THE CHAIRPERSON: Let's get down to some -- down some road.
6733 MR. FULLER: It could take us a long way, yes.
6734 THE CHAIRPERSON: Yes. Thank you very much for your appearance, it's very useful and thanks. Did you have something?
6735 MR. AUDET: Yes.
6736 LE PRÉSIDENT : Vous avez quelque chose à ajouter?
6737 M. AUDET : Oui, s'il vous plaît. Parce que nous avons une préoccupation additionnelle aussi pour le marché du Québec.
6738 Dans le cas d'une acquisition d'Astral par Bell, souvent les gens ont comparé en disant que Bell va devenir à peu près aussi gros que Québecor dans le marché du Québec en terme d'auditoire.
6739 La grande différence entre les deux, c'est que chaque compagnie qui est verticalement intégrée lorsqu'elle négocie avec vous du contenu, elle a deux... je vous dirais deux intérêts.
6740 Le premier, c'est de maximiser la valeur de son contenu, le deuxième, c'est de le distribuer. Dans le cas de Québecor, ils sont incapables de distribuer tout leur contenu dans la Mauricie, la Beauce, les Bois-Francs, le Bas Saint-Laurent, la Gaspésie, la Côte-nord.
6741 Donc, lorsqu'ils négocient avec nous, ils ont besoin d'un distributeur pour plus de deux millions de québécois qui sont en dehors des grands centres urbains, sans compter aussi tous les francophones qui sont dans les Maritimes ou ailleurs au Canada.
6742 Donc, quand Québecor négocie avec des distributeurs, il essaie de faire une... maximiser la valeur de son contenu, mais en même temps il doit avoir des partenariats pour étendre son contenu.
6743 Dans le cas de Bell, c'est le seul fournisseur au Canada qui a un réseau, entre autres, au Québec qui couvre tout le Québec. Dans tous les grandes centres urbains du Québec, les deux plus grands, Montréal et Québec, Bell a des services de télévision sur fibre, mais avec son service de télévision satellite, il couvre l'ensemble de la province de Québec. Et au niveau de son réseau cellulaire, il couvre l'ensemble de la province de Québec.
6744 Alors, demain matin, si lorsqu'on négocie du contenu avec Bell, certaines exclusivités à cause de prix déraisonnables ou de conditions multi plates-formes ne sont pas données à tout le monde, Bell sera le seul capable de distribuer l'ensemble de son contenu à tous les Québécois, ce qui fait de ça une position qui n'existe pas ailleurs au Canada.
6745 Et le dernier point, même lorsqu'on compare les auditoires de Bell et de Québecor, malgré tout le respect que je dois à Anne, négocier du contenu "free over the air" avec TVA, c'est assez facile.
6746 Quand vous excluez e contenu avec les "free over the air" et vous regardez les propriétés que Bell va avoir avec des propriétés comme RDS, avec Super Écran, VRAK-TV, toutes les émissions qui sont chères au coeur des Québécois, c'est plus de 60 pour cent du "viewership" payant qui va être entre les mains d'un distributeur qui est capable de le distribuer sur toutes les plates-formes à tous les Québécois.
6747 Alors, lorsqu'on négocie avec quelqu'un comme ça, vous comprendrez que le rapport de force n'est pas du tout le même et, ça, c'est très préoccupant pour nous.
6748 LE PRÉSIDENT : D'accord. Merci. Voilà la preuve que non seulement vous êtes prêt à répondre à nos questions, mais vous êtes prêt à répondre lorsque je n'ai pas posé de question. Je vous remercie beaucoup.
6749 LE PRÉSIDENT : On va passer à la prochaine intervention. Merci.
6750 LA SECRÉTAIRE : Merci.
6751 We will now proceed with the presentation by Canadian Association of Community Television Users and Stations. They are appearing by tele-conference from Gatineau. Ms Edwards, can you hear me? Hi, Ms Edwards.
6752 MS EDWARDS: Hi!
6753 THE SECRETARY: Can you hear me well?
6754 MS EDWARDS: I can. Can you hear me?
6755 THE SECRETARY: Yes, I can hear you well.
6756 MS EDWARDS: Okay.
6757 THE SECRETARY: You can start your presentation. You have ten minutes.
6758 Thank you.
6759 MS EDWARDS: The Canadian Association for Community Television Users and Stations or CACTUS for short, was created to help ensure that ordinary Canadians have a voice within our broadcasting system.
6760 We represent independent non-profit community TV broadcasters and the Canadians that use and watch them. We also assist Canadians in communities that want to set up new community operated television channels or who need assistance to access the community channels belonging to broadcast distribution undertakings.
6761 My name is Catherine Edwards.
6762 While our mandate as an organization doesn't directly concern broadcasting mergers and we comment mainly on the proposed benefits package, we nonetheless represent one of the three elements in the system stipulated in the Broadcasting Act, that is the community element.
6763 So, that being the case, for the record we state that we do not believe that further consolidation in the Canadian media industries serves the best interest of Canadians. We don't believe the broadcast distribution undertaken should also own content production entities.
6764 And so, it is our view that this sale represents another move in the wrong direction for the long term health of both Canadian broadcasting and Canadian democracy and we support the view of PEAQ and other broadcasting interveners who oppose the sale or have serious reservations about it.
6765 It is not our experience that the CRTC can adequately limit the potential abuse of how that this intensified level of cross ownership enables and we know that the experience of our members is that in the last dozen years, Canada's large cable BDUs have systematically abused their obligations with respect to community channels and the CRTC has lacked the will or perhaps the resources to restrain these abuses.
6766 These companies are simply too large and can't be expected to be all things to all people. There needs to be room for diversity of other players.
6767 This being said, if the CRTC approves the purchase of Astral by BCE, what public benefits would be reasonable to balance the consolidation of power in media that will result.
6768 Bell intervened at the oral phase of the Community Television Policy Review in 2010 advocating for access to non branded community channels for their customers.
6769 Bell also committed, as part of the benefits package when it purchased CTV last year, to carry seven of Canada's nine independent over-the-air community television licence holders in its basic satellite here beginning later this year. These channels fit the non branded model proposed by Bell.
6770 So, for the first time in Canadian history community TV will be available to Canadians, regardless of the method by which they obtain television signals, that is over-the-air, on cable, on satellite and on the internet. Thanks to Bell's carriage, they will soon be able to function at genuine digital town halls.
6771 We are also pleased to note that Bell is proposing to direct 0.5 per cent to the value of the radio public benefits towards the Community Radio Fund of Canada.
6772 In view of the strong commitment by Bell to both the concept of non branded independent community television and its financial support of similarly independent and non branded community radio, we advocate that Bell make a similar financial investment in non branded community television by helping us establish the Community Access Media Fund or CAMF that we advocated at the Community Television Policy Review in 2010.
6773 Specifically, CACTUS advocates that seven million of the public benefits be allocated to CAMF over five years. We believe this is an appropriate and effective use of this money for the following reasons.
6774 Firstly, mergers such as this one represent enormous consolidation of Canadian media under one owner, reducing the diversity of voices within the system going forward. Allocating a portion of the money toward the independent community sector guarantees a grassroots safety valve for free speech outside both this and all other ownership groups.
6775 Furthermore, money directed towards the community sector, because of its reliance on volunteer labour, funds facilities and interest structure that can be used over and over to produce more local programming, more cost effectively than can be produced on a one-off basis by public and private sector.
6776 So, for example, while on-screen benefits directed to the private and public sectors will be spent to you and then will be gone, money directed to the community sector support infrastructure that will balance the negative effects of market consolidation over the long term.
6777 Secondly, a means of funding independent community channels must be found equivalent to the Community Radio Fund of Canada.
6778 The 2010 Community TV Policy hasn't addressed the fact that approximately 80 per cent of cable community channels, those in smaller communities mainly with the least access to media alternatives have been closed over the last decade.
6779 The new policy only seeks to address access problems at a relatively few remaining big city channels.
6780 Although an over-the-air community TV licence class was created in 2002, equivalent community radio licences, that is non-profit and community administered rather than administered by BDUs, there is no funding for them. While public and private sector channels benefit from the Canadian media and other funds, the LTIF, for another three years, the small market local programming fund, value for signal payments and benefit packages such as current proceeding, independent community channels have thus far been excluded.
6781 And as a consequence which was noted in the new community TV policy, but not addressed, only nine such over-the-air community channels exist.
6782 This exclusion seems particularly glaring, given the assignment of funds in this proceeding to the community radio fund of Canada. The transaction primarily concerns TV assets. Surely the same principle should apply to community TV.
6783 If Bell is proposing that 10 per cent of the television assets changing hands amounts to benefits of approximately $140 millions, we propose that TV be treated in the same way as radio and that 0.5 per cent or $7 millions be used to establish CAMF.
6784 Thirdly, community media centres enable the digital economy and bridge the rural divide.
6785 As CACTUS outlined during the Community TV Policy Review and in subsequent presentations before the Standing Committee on Canadian Heritage, infrastructure funding for the community sector is the best way to realize the full potential of the digital transition because it establishes multimedia access centres in every Canadian community where individuals, community organizations and small businesses can leverage digital tools and technologies.
6786 Several of our major trading partners have recommended the establishment of such community access hubs to accelerate the adoption of digital technologies and we know that the shutdown of the CBC's analog distribution network and the cancellation of the LTIF are all weakening rural Canadians access to communication services.
6787 Fourth; independent community TV channels supply Canadians with much needed local programming. There is likely to be a net loss of local programming available to Canadians as the LTIF is phased out. We note that Bell advocated keeping the LTIF and wish to maintain its current level of commitment to local programming.
6788 Although the LTIF is being phased out, Bell's wishes could be honoured in a modest way through the establishment of CAMF. New programming produced as a result of this investment will immediately become available for distribution in Bell's basic satellite package and would enhance the value and magnify the impact of the CRTC's and Bell's 2011 Decision to include independent and non branded community channels in Bell's basic satellite package.
6789 And lastly, we believe that Bell needs local presence in its service areas, we remain concerned about Bell's plan to launch regional so-called community channels which maybe an oxymoron that do not have any bricks and mortar presence.
6790 So, while we applaud Bell's intentions to offer such services, Bell's relatively low market share in many areas means that the funding available is not sufficient to establish the presence expected under 2010-622 Community TV Policy.
6791 The cornerstone of the Commission's Policy has always been that BDU channels should engender a high level of citizen participation and community involvement and community programming and, secondly, actively promote citizen access to the community channel and provide it from all the availability of related training programs.
6792 We refer to the June 12 2012 article in the Telegraph Journal, which we submitted with our written comments as Appendix A, regarding the launch of Bell's new Atlantic community channel. The article discusses how the channel 2 flagship programs will be professionally produced and hosted and how the channel will stimulate local employment by engaging the local independent production community.
6793 In other words, professional companies are the institute, there is no mention of any training or engagement of the general public in production nor where such training sessions might be offered.
6794 We have presented economic analyses in previous Commission proceedings to demonstrate that even if the process of regional BDUs fulfilling their access programming expenditures by sending cheques to producers, we are not de facto a professional production. It is also inefficient and inequitable all such local producers must maintain their own production facilities.
6795 It's much more efficient and accessible to genuine members of the community at large if scarce resources are made available to all at a centrally based production facility that leverages existing resources, so, by communicating with community centres, libraries or existing community media facilities.
6796 Seven million distributed over the first five years of Bell's ten-year proposed benefits package roll-out or just over one million per year is only a small portion of the $120 million annually needed to bring multi media access centres within reach of 90 per cent of Canadians, but it would enable CAMF to firstly strengthen existing community channels and enable them to transition to a full digital multi platform model.
6797 So, for example most of them are not broadcasting at HD yet and, secondly, to establish at least one community access centre in each province that can act as a model and training platform then for other communities.
6798 We attached a copy of the Goals and Operating Principles of the Community Access Media Fund with our written submission. We developed this document in 2010 during the Community Television Policy Review and we have continued to refine it with input from industry partners and our membership.
6799 This document describes the long-term goals of the Fund, how we suggest it should be managed and who could apply to it.
6800 We note, as have many interveners that the proposal by Bell to devote $40 million to improve internet access in the north does not need the usual criteria for tangible public benefits on several fronts.
6801 We also note the comments by the CMPA and others, that 85 per cent of the proposed benefits are expected to be on-screen. There is, therefore, plenty of room within Bell's proposals, that is if the $40 million is reallocated for this initial $7 million investment in CAMF which would contribute toward the on-screen benefits asked for by the CMPA.
6802 By stimulating local production country-wide, we note that local production has always been a priority both of the Broadcasting Act and CRTC policy and that none of Bell's initial proposals fall in the local category.
6803 We also support PEAQ's call that some of the public benefits should top up the initial endowment for the Broadcasting Participation Fund. We very much appreciate the opportunity to comment on the fill process and I'm happy to answer to any questions you might have.
6804 THE CHAIRPERSON: Thank you, MsEdwards. This is the Chair. Commissioner Denton will have some questions for you, I believe.
6805 MS EDWARDS: Okay.
6806 COMMISSIONER DENTON: Good morning, Ms Edwards.
6807 MS EDWARDS: Good morning.
6808 COMMISSIONER DENTON: Hi! It's Tim Denton.
6809 So, basically, the structure of your speech is you think the merger would be a bad idea - the sale would be a bad idea and that approving it would lead to lessen the other diversity of voices?
6810 MS EDWARDS: Correct.
6811 COMMISSIONER DENTON: You support the views of PEAQ and other broadcasting interveners who oppose the sale or have serious reservations about it?
6812 MS EDWARDS: Right.
6813 COMMISSIONER DENTON: And that it is, in your view, not our experience that the CRTC can adequately limit the potential abuse of power that this intensified level of cross ownership enables?
6814 MS EDWARDS: That has been our experience as a small player, yes.
6815 COMMISSIONER DENTON: So, if we take your good advice, the rest of the proposal you're making depends on the approval of the transaction?
6816 MS EDWARDS: That's correct.
6817 COMMISSIONER DENTON: So, here we are faced with the choice and you're faced with the choice.
6818 Of the two proposals, one that we do as you ask and fund as you desire on the one hand, and on the other, to not approve this transaction what do you think is the better public policy?
6819 MS EDWARDS: I think that as we've said in our preparatory remarks, our mandate isn't to keep on top of the details of all the mergers and all the ramifications. You've got plenty of other interveners who are much better informed than we are because they've got more people to put on it and, you know, that's their job. Our business is to track what's going on in community TV.
6820 So, I don't think it's a fair question to ask, but I think you guys have to assess all the data and decide whether the transaction should go ahead, this particular one.
6821 Our comments are general in that over the years as cable BDUs have gotten bigger and bigger and bigger and it's much more difficult for the CRTC to police them, that we suffer as a small organization.
6822 So, in general we think that the trend towards mergers and allowing distribution to also owned production entities hasn't been positive, so that we are not in a position to inform you whether you should approve this transaction or not.
6823 In general, we don't think that's the right direction and we've confined most of our remarks to where we are properly informed and that if it does go ahead, you know, we think for all of the reasons outlined, that community made a significantly balance the negative impacts of media consolidation so the healthy community media sector, the public can find a way to get its messages out, even if they are being throughout all throw out this bottle next with major mainstream distributors.
6824 COMMISSIONER DENTON: Thank you, Ms Edwards. I think that's completely clear and I understand you.
6825 Those are my questions, Mr.Chairman.
6826 THE CHAIRPERSON: Thank you. Just a couple of questions from me, Ms Edwards.
6827 As you know, these transactions are more of an operational nature than a policy nature and as I read your submissions and your -- as I take it, your alternative position that is if the Commission were to approve this, we have to modify the benefits package.
6828 But some of the proposals you're putting forward are actually asking the Commission to change policy direction. Do you think it's appropriate to be doing that in an operational file of this nature?
6829 MS EDWARDS: I don't think it's asking the Commission to change the policy direction at all in fact. The Commission has done a great job recently of making independent Community access channels more accessible.
6830 As we noted, there possibly is going to be up on Bell's basic satellite package in November and in assisting the community radio sector to establish the Community Radio Fund of Canada, so we think it's entirely consistent with recent decisions and the way Public benefits have been allocated in the past that community, independent community television channels should also be recipients.
6831 THE CHAIRPERSON: In the past, Commission has not generally allowed benefits packages to be modified late in the process and the reason for this is due to the public nature of our proceedings.
6832 It's quite -- an applicant comes around and puts a package forward, it's published, interveners get to comment on it. In fact, they can comment at the very last minute on the last day and so, interventions may not be seen by other interveners. And yet, what you are putting forward arguably has an impact on others by suggesting new directions and new ways of doing things.
6833 MS EDWARDS: But we've twice put forward these ideas to Bell well in advance of the hearings and they haven't wanted to meet with us as yet. And there is obvious problems with some parts of the applicant's benefit package as proposed.
6834 For example, and again, others who are much better informed about the details of the transaction than we are have pointed out that there is a -- you know, the $40 million to be directed towards Northern Telecommunications, upgrades are very inconsistent based on previous transactions.
6835 So that means, you know, regardless of -- you know, if that $40 million is not going to be approved, something else needs to be done with it. I mean, that's what all the interveners are having an opportunity to do, to comment on the proposal put together by Bell, say if that makes sense and if it doesn't make sense, what else should the money go to.
6836 We know that the CMPA would like modifications to the on-screen amount. There is a group from Ryerson and the Film Board that would like an amount and my understanding is that we all get a chance to comment on one another's comments at the end of the process as well.
6837 So, I am not -- I am not sure I am really following your reservation.
6838 THE CHAIRPERSON: Well, you shouldn't assume that the Commission will allow parties to comment on each other's comments. That is a possibility in the Rules of Procedure, it's not a given, and it's generally focused on what was said at the hearing that wasn't already on the public record.
6839 What I'm asking is, and I said it in my opening remarks, this isn't a negotiation session where all kinds of things can be thrown on the table. There has to be some order on how we do things. And what I'm putting to you is that the ideas you're putting forward aren't within some of the comments you mentioned, when people are saying, well, there's not enough on screen. Well, that's not a new policy framework, that's how we spin the case.
6840 What you're suggesting is a bit outside of the existing policy rules.
6841 MS EDWARDS: What should be -- if it's not at a public hearing and in fact we all do have an opportunity to comment on one another's proceedings right now, for example, we supported what PIAC said although we didn't know what they were going to say ahead of time. Isn't that why we have an oral proceeding after a written proceeding, so that these things can be aired?
6842 THE CHAIRPERSON: Indeed for that part of it, but the parties that asked to appear at the hearing did not know that you would have and may have decided not to participate in the oral phase, not knowing what your intervention was, because the process is set out in a sequential linear way.
6843 MS EDWARDS: But we said the same thing with our written proceedings, so that means all the parties at the oral proceedings do have an opportunity to comment.
6844 THE CHAIRPERSON: But not the rest of Canadians, who may not have seen your ideas put forward.
6845 Essentially what I'm putting to you, and I think you disagree, is that, in my view, you're essentially asking for some major policy direction changes in this and I'm not sure that the process is conducive to that.
6846 MS EDWARDS: Nothing I have asked conflicts with current community television channel policy. It is consistent with how the community radio sector is treated and previous benefits allotments.
6847 I don't really understand what you're saying because I don't know what -- if Bell won't entertain or decides not to put forth a particular proposal when the public or groups like ours are supposed to make those proposals. I thought that was the point of a public hearing.
6848 THE CHAIRPERSON: It's their application. They choose to put what they wish in it and live and die with it.
6849 MS EDWARDS: And then others have the opportunity to pull it. So this is our comment.
6850 THE CHAIRPERSON: Thank you.
6851 Those are all my questions. Thank you very much.
6852 MS EDWARDS: Thank you for your time.
6853 THE CHAIRPERSON: We will now go to the next intervener.
6854 THE SECRETARY: Just for the record, I would like to mention that Meena Khan and Frédéric Gervais will not be appearing today.
6855 So I would ask Rahul Majumdar to come to the presentation table.
6856 THE CHAIRPERSON: Welcome. Bienvenue.
6857 We're very happy that you chose to participate in this proceeding. Consumers and individual viewers and listeners are always very welcomed at our hearing. Unfortunately, we're seeing a decline of participation from you, so we're very glad to have you participate today.
6858 For the purposes of the record, please identify yourself for the transcript and then make your presentation.
6859 Thank you.
6860 MR. MAJUMDAR: My name is Rahul Majumdar. I am intervening as an individual, as a concerned citizen.
6861 First of all, I want to thank the CRTC, Chairman Blais, the commissioners and staff for permitting my intervention at this crucial public hearing. I am not a professional intervener, nor do I portray one on television. Still, I hope to make a small contribution on behalf of voices that are rarely heard.
6862 Mr. Chairman, Montrealers from all walks of life love their sports. My perspective on this issue is that of a forty-something sports enthusiast who has lived most of his life in this great city and appreciates English Montreal AM radio.
6863 In July, I, like thousands of fellow Montrealers was stunned, disheartened and upset by Bell Media's plan to convert TSN 690 Radio into RDS Radio 690. In light of recent political "noises" directed at Quebec's English-speaking community, the optics of this language conversion plan are bad. Very, very bad.
6864 I am not a media insider, nor a media concentration expert. However, I do know that CBC Radio has cut its sports coverage in recent years; CJAD 800 has sports properties but is first and foremost a news and information station. As for the other three English stations, they play music! Eliminating TSN 690 may help Bell-Astral satisfy CRTC ownership rules, but the price will be a further erosion of Montreal's sports broadcasting scene.
6865 Twenty-four hour sports radio demands a large, diverse population base to succeed. I believe Greater Montreal's English-speaking market, which includes multilingual francophones and "allophones", qualifies in this regard.
6866 However, if the CRTC accepts Bell's proposal, you will deprive Montreal of an important local sports media presence, and deny its rightful place within a national radio network. With smaller populations than English-speaking Montreal, Edmonton, Calgary, Winnipeg, and Ottawa-Gatineau all enjoy 24-hour sports stations. After the demise of CKAC Sports 730 in 2011, French-speaking Montreal certainly merits a new all-sports station, but not in the manner proposed by Bell.
6867 Actually, CKAC Sports' four-year experiment is quite instructive. In spite of a near province-wide monopoly, owner Cogeco saw fit to convert it into a 24-hour traffic station -- aided in part by a Quebec government subsidy.
6868 Bell Media has forecast seven years of losses for RDS Radio. Seven years is a long time in business, and this scenario begs the question: What would prevent Bell Media from pulling the plug on RDS 690 between now and the year 2020, especially if the bottom line demands yet another format change?
6869 We live in the digital media age, a time when individuals can access sports radio from a multitude of sources thanks to the Internet. However, in this multi-channel, multi-platform universe, there remains value in maintaining a strong, local radio presence. TSN 690's survival and growth is a result of nurturing and promoting Montrealers from various backgrounds behind the microphone. In the short-term, Bell Media's proposed language switch will eliminate jobs and voices that listeners have come to appreciate and respect.
6870 Montreal is a bilingual, multicultural city and I believe that its sports fans' must be served in both of Canada's official languages. From humble beginnings, TSN 690 has survived 11-plus years in the face of enormous odds. Its growing listener base is fiercely loyal, thankful for the vital link TSN provides to the local, American and global sports scenes.
6871 Anchored by Montreal Canadiens' English broadcast rights and other sports properties, TSN 690 cannot help but get stronger in the future. Yet, its future is in jeopardy. Why gut a proven formula -- a great combination of local content and international reach -- when better solutions for conforming to CRTC rules exist?
6872 I am dismayed at the manner in which Bell neglects, downplays, and outright dismisses its English clientele and English Montreal sports radio. I support maintaining TSN 690 as an English language radio station, a window to the larger world of professional and amateur sports and, in a small way, a method of staying connected with other parts of Canada.
6873 Closing radio stations for any reason is sad, for it silences important voices and reduces the diversity of opinion and thought. I was saddened when CKAC Sports went off the air. Believe it or not, I also listen to French radio on a regular basis, including French sports radio as it currently exists. Francophones should have a sports station, but it should not happen through the back door of a zero-sum game.
6874 Given that Bell Media was originally granted the 690 AM frequency to better serve Montreal's English-listening community, I would recommend that the CRTC deny Bell Media's language conversion plans on that basis alone. At the very least, Bell should be ordered to surrender the frequency in order to allow another party to bring sports radio to Montrealers.
6875 Even so, it will take months or years for a competitor like Rogers, Cogeco or another Montreal media entrepreneur to essentially reinvent the wheel.
6876 Mr. Chairman, in all honesty, does this specific application really make sense?
6877 I strongly oppose Bell Media's language switch proposal, on the grounds that it will effectively limit choice and reduce local perspectives on the sports world. I fear that, perhaps unintentionally, Bell is ghettoizing the English Montreal sports fan. Make no mistake, this move will hurt all sports fans, regardless of mother tongue. RDS should have a radio voice, but not at the expense of sports listeners, both anglophone and francophone, who support and value the TSN 690 brand.
6878 Thank you. Merci.
6879 THE CHAIRPERSON: Thank you very much.
6880 You did not give a sense that you were inexperienced and we thank you for that. It's a very good intervention.
6881 Commissioner Menzies I believe will have some questions.
6882 COMMISSIONER MENZIES: Congratulations on your presentation.
6883 MR. MAJUMDAR: Thank you.
6884 COMMISSIONER MENZIES: Bell has more or less -- Bell has indicated that if it is denied this switch, it would most likely, at least one of its options would be the Havs broadcast to CJAD where, I believe, my understanding is that Impact and Alouettes games are already broadcast, and then they would sell this license.
6885 Others may take it and run it as a sports station, but a good deal of the sports content, it seems to me, would be on CJAD.
6886 Is that an acceptable compromise to you or is it al all-sports station that -- because we can't make people broadcast things. We can only give them the right to.
6887 MR. MAJUMDAR: Correct. Correct. Certainly the more properties that CJAD would have, the more sports properties, would probably take away from its core purpose, which is news and information. So there again you have to -- I guess from their point of view, it would be a trade-off.
6888 CJAD has a certain core of listeners. Certainly there are sports fans, myself included, who would listen to CJAD if the Canadiens broadcasts are -- or for another matter, any other sports property.
6889 But I guess in terms of this specific station as it is, as I said, I do value the all-sports network. It's a very specific niche, perhaps doesn't have the broad appeal of certain other stations, but having listened to the station from its start, I've seen the evolution, I've seen the growing pains.
6890 I've seen the point when they started there was hardly any local content. So I feel that if we maintain the all-sports network, it doesn't exclude CJAD from having sports properties. They currently have the Alouettes, the Impact. They used to have the Canadiens' games, maybe in the future they might get it and there may be a trade. This is something we can't predict.
6891 But I do feel there is still a place for an all-sports network, certainly in a market like Montreal, where we're talking about I guess potentially, perhaps conservatively, maybe a million, 1.2 million people who actually can listen to English and derive value from a specific sports network.
6892 COMMISSIONER MENZIES: Is it the TSN brand that has most value for you or would Rogers Sportsnet Radio be of equal -- relatively equal interest to you?
6893 MR. MAJUMDAR: I guess, since Bell bought the station, I did listen to the Team 990, its previous incarnation, and when it joined TSN I certainly saw value in that move. We maybe have more access. I think in recent years they've been adding different sports properties. They have the rights to the Canadiens, I believe as of last year. They will broadcast Grand Slam Golf events like the Masters. This year they've started broadcasting English Premiership soccer games.
6894 That's the type of breadth you're not going to get, for example, at CJAD where sports is part of their mix, but it is not their sole purpose or their focus.
6895 COMMISSIONER MENZIES: You realize that Bell didn't apply for an exception to continue to operate TSN radio, so our only option to keep the status quo would be to deny the application entirely in terms of the Bell-Astral deal.
6896 MR. MAJUMDAR: I'll assume that it's a decision you're going to have to make based on their overall application, but certainly my focus is on TSN Radio currently and the conversion. If that's the only solution, then I guess that's what I would prefer.
6897 COMMISSIONER MENZIES: Thank you very much for your participation. It's greatly valued.
6898 THE CHAIRPERSON: Commissioner Lamarre may have some questions.
6899 CONSEILLERE LAMARRE : Merci, monsieur le Président.
6900 Good morning. Bonjour.
6901 M. MAJUMDAR : Bonjour.
6902 CONSEILLERE LAMARRE : Dites-moi, est-ce que vous écoutez TSN Radio à tous les jours?
6903 M. MAJUMDAR : Presque tous les jours, oui.
6904 CONSEILLERE LAMARRE : Donc, depuis une semaine vous écoutez ça sur le 690, j'imagine?
6905 M. MAJUMDAR : Oui. Oui, oui.
6906 CONSEILLERE LAMARRE : Avez-vous remarqué une amélioration la nuit, le soir?
6907 M. MAJUMDAR : Pour moi, dans la partie de la ville où j'habite, c'est plus ou moins la même chose. C'est possiblement ceux qui habitent plus dans l'ouest de l'Ile, peut-être eux autres ils vont noter un changement plus direct, mais pour moi c'est à peu près la même chose. Je suis presque centreville, juste un peu à l'ouest, donc pour nous c'était correct au 990...
6908 CONSEILLERE LAMARRE : Et ce sera toujours bien au 990.
6909 M. MAJUMDAR: C'est ça.
6910 CONSEILLERE LAMARRE: Merci. C'était ma participation au sondage de la matinée.
6911 Merci, monsieur le Président.
6912 LE PRÉSIDENT : Merci bien pour votre participation. Ce sont nos questions.
6914 M. MAJUMDAR : Merci beaucoup.
6915 LE PRÉSIDENT : Bonne journée.
6916 THE SECRETARY: Just for the record, I would ask if Bobby Michael is in the room.
6917 THE SECRETARY: He's not.
6918 I would now ask Sheldon Harvey to come to the presentation table.
6919 THE CHAIRPERSON: Welcome to our hearing, Mr. Harvey.
6920 For the purpose of the transcript, I would ask you to identify yourself and make your presentation please.
6921 MR. HARVEY: Thank you very much. Good morning, everyone.
6922 First, I appreciate the opportunity for a member of the public to appear once again before you and, as you said earlier, I'd like to see more people doing this. It's rather unfortunate that more don't take the opportunity.
6923 My name is Sheldon Harvey. I'm a Greenfield Park resident my whole life, and a listener to radio in general.
6924 Mr. Chairman, Commissioners and CRTC staff, I, like hundreds of others, have chosen to intervene against Bell's proposal to convert the English TSN Radio service into RDS Sports Radio in French.
6925 Mr. Chairman, it is important to remind everyone of your statement on Tuesday where, after reading the 10 volumes of interventions against this proposal, you had determined that there was a lot of anger about this proposal.
6926 I would like to present why I feel the CRTC should reject Bell's proposal. I should first make it clear that I have no objections to Bell's desire to create a French language all-sports radio service in Montreal. I just don't want to see TSN Radio sacrificed to accomplish it.
6927 Last fall, Bell asked for CRTC approval to acquire the clear-channel frequency of 690 kHz, a frequency sought after by several other applicants. With this frequency they would be able to better reach their listeners, particularly in the west end of Montreal, with a clearer, stronger night-time signal, something they claimed they could not do on 990kHz.
6928 Their acquisition of the English language broadcast rights for the Montreal Canadiens for seven years, combined with an increased advertising revenue as a result of their better reach in the evening hours on 690 kHz, would turn around a station that had already been operating at a loss for 10 years.
6929 The Commission approved their request, over all other applicants. Now, less than one year later, Bell is back before the Commission, asking you to grant them approval to convert the station to a French language all-sports radio station. I think it is more than coincidence that Bell began broadcasting TSN Radio on the 690 frequency just 10 days prior to these hearings commencing.
6930 Earlier this year, Bell publicly announced the acquisition of Astral Media (subject to regulator approval), which would include three English language Montreal radio stations. Bell took out two-page spread advertising in Montreal newspapers welcoming the Astral employees to the Bell family, prior to approval of the acquisition. They subsequently announced that they would be closing TSN Radio and creating a French language all-sports radio service, RDS 690, on the frequency they had been granted to operate the former TSN 990.
6931 Bell publicly announced that their hands were tied by CRTC regulations that forced them to have to do this, causing the public to believe that the CRTC were the "bad guys". This caused an immediate public reaction against the CRTC. A journalist for the Montreal Gazette uncovered the fact that Bell had chosen not to explore the possibility of applying for an exemption to the CRTC ownership concentration guidelines; an option that, if approved, would have allowed them to operate both stations. There is a level of arrogance and cockiness that has so many members of the public concerned about the power and strength of Bell and their attitude that, quote, my quote, "we are Bell and we will do and get what we want".
6932 I am of the opinion that Bell, in the CRTC hearings last fall, acted in bad faith and misrepresented their intentions on the use of the clear-channel 690 frequency. The word on the street in the radio business circles in Montreal, was that it was always the intention of Bell Media to get into the French sports radio business, piggy-backing off of their successful RDS television service, particularly when Cogeco closed their CKAC 730 sports station in favour of government financed Radio Circulation. 690 would be the best frequency for them to accomplish this.
6933 This is ultimately a business decision on the part of Bell, but I feel that the methods Bell employed used the CRTC, as well the staff of TSN to get what they wanted, the much sought after frequency, 690, which would easily give them reach to the whole population of Quebec, and beyond, 24 hours a day.
6934 If the Bell takeover of Astral is approved, Bell has indicated here that they will move some of the TSN English sports programming, including the Canadiens games, to news/talk radio station CJAD, creating a hybrid station combining news/talk and sports programming. It should be pointed out that CJAD's night-time coverage on their 800kHz frequency has even worse penetration into the areas which Bell expressed concern about reaching on their 990 frequency. So how well will former TSN 990 listeners in these areas be served by Bell's moves?
6935 Mr. Greenberg of Astral indicated on Monday at these hearings that the takeover of Astral radio properties by Bell would be good for the Astral employees. If Bell's changes to CJAD are implemented, some existing CJAD staff will be eliminated to make room for some TSN Radio staff, not to mention how many TSN 990 staff will be out on the street.
6936 And what about the listeners? Without listeners, radio stations do not exist. It appears, however, that both Bell and Astral really don't seem to care about their listeners. CJAD has an incredibly loyal listenership and is currently Montreal's only commercial news/talk English option.
6937 How will their listeners feel about having approximately half of CJAD's broadcast day dedicated to sports? Nobody is bothering to ask.
6938 Has Bell responded to the anger expressed by TSN Radio listeners to their proposed closure of the station? Rather, Bell chose to issue corporate level instructions to its TSN Radio staff to not talk about the shutdown of the station on the air and to not entertain comments from callers wishing to discuss the topic, for fear of losing their jobs if they do.
6939 Bell and Astral are showing that they really don't care about listener input. As a listener, I get the impression that the attitude is this: We'll decide what we give you on the air and you will like it. As for the hundreds of interventions, well, they don't seem to really mean anything either. They are just listeners.
6940 The CRTC views the English and French radio markets in Montreal as two separate markets. Therefore, a Bell-operated RDS 690 French-language sports station would be a completely new and separate entity from TSN 690 in English.
6941 I would therefore urge the CRTC to require Bell to reapply for the use of the 690 frequency to operate its new French-language all-sports radio station, at the same time allowing any other applicant to apply for the same frequency. Force Bell to play by the same rules as everyone else.
6942 THE CHAIRPERSON: Thank you, Mr. Harvey.
6943 Commissioner Lamarre will have questions on your application, but before I ask her to do that, as I mentioned earlier, it's pretty hard for us to regulate in the public interest if the public doesn't participate in our proceedings, and obviously we have written interventions and that's good, but oral presentations have slightly more impact. Just human nature, I guess. And I appreciate people have jobs and drive kids to soccer and all kinds of other activities and they can't necessarily participate in every phase of our hearings.
6944 But I was wondering how difficult was it from your perspective -- I take it this is the first time you may have participated in an oral -- oh, you've participated in previous phases? Okay.
6945 MR. HARVEY: Correct. Yes.
6946 THE CHAIRPERSON: Could you tell us, you know, from this and previous experience how difficult it's been and why do you think other Canadians aren't taking that opportunity?
6947 MR. HARVEY: I think it's a bit of an intimidation factor possibly. If you watch these hearings on television, on CPAC, or watch them online, there are a lot of suits here and a lot of corporate-level people, and sometimes, you know, the average person on the street feels that maybe, you know, our input is not worth anything possibly.
6948 I learned a long time ago that that's not the case and that's why the CRTC exists and we have this opportunity to do this, and I think if you believe strongly enough in an issue you owe it to yourself and to everybody else.
6949 I was hoping to see a large number of the people who filed interventions, who decided not to appear, to at least be in the room here as moral support to the people who did want to step forward. They're out there. You read through the volumes of interventions. This means a lot to a lot of people.
6950 If I can represent the feelings of a lot of those other people that's why I'm here.
6951 THE CHAIRPERSON: Thank you for that.
6952 Commissioner Lamarre.
6953 CONSEILLERE LAMARRE : Merci, Monsieur le Président.
6954 Good morning, Mr. Harvey.
6955 MR. HARVEY: Good morning.
6956 COMMISSIONER LAMARRE: We meet again.
6957 MR. HARVEY: We meet again.
6958 COMMISSIONER LAMARRE: We meet again. I don't know if it would be a good or bad thing that we make a habit of it every fall but we'll see about that.
6959 MR. HARVEY: I was hoping we wouldn't have to actually. No personal -- nothing personal, but we have to do this.
6960 COMMISSIONER LAMARRE: No offence taken, don't worry.
6961 Monsieur Harvey, if I may speak about a few items in your intervention, both the written one and your intervention this morning, I note you question some of Bell's intent and I'll let them reply to that if they feel they should in the reply phase because as a regulator I can't regulate intent, I have to regulate facts in specific issues.
6962 And to that point, you're talking it's important for listeners and I want to check with you whether or not, if you do listen to CJAD, how the proposal, the sports that would be taken away from TSN 690 if we were to approve that application, that portion of sports that was transferred to CJAD, how it would affect your listenership as a CJAD listener.
6963 MR. HARVEY: I think it's going to have a dramatic impact on CJAD listeners. I listen to a lot of radio, CJAD included. CJAD has a longstanding tradition of being a news/talk leader in this City. As the previous intervener mentioned, the other English-language stations other than CBC basically play music. If the English community wants news/talk information, wants to interact with people through the radio, talk about -- whether it's politics, whether it's everyday life, whatever it is, CJAD is about the only option.
6964 I think there's going to be a lot of CJAD listeners very upset when they find out that perhaps half of their broadcast day is going to be taken away from them and dedicated to sports.
6965 I find it hard to believe that people who are not sports fans, when CJAD had the Canadiens broadcasts, left that radio on that radio station if they're not a hockey fan. They bill themselves as a news/talk leader and that's what they do best. I think they had the Canadiens as a property for a long time. They lost them to Bell for seven years. Now they may end up getting them back again.
6966 I think it just -- it puts too much on one channel, on one frequency. It cannot adequately do the job that it needs to do covering sports or covering news/talk information if it only has half a day to do it for either one of them.
6967 And I think there will be bleed over as well, as I think Mr. Spalding from Astral mentioned at the hearings earlier this week, that the morning show and the drive home show already do include some sports. Well, they do but it's limited.
6968 They're not going to -- I certainly hope they're not going to turn the theme of those shows into, you know, driven by the Montreal Canadiens and what's going on in the locker room and what's going on on the ice and, you know, everything else that revolves around the religion of the Montreal Canadiens.
6969 You cannot do both on one radio station. I'm firmly convinced of that. I've listened to radio long enough through my whole life to know that there needs to be specialty stations for specialty items.
6970 COMMISSIONER LAMARRE: Mr. Harvey, tell me, how did you find out that Bell was proposing to migrate sports programming from TSN to CJAD -- from CKGM, I should say, to CJAD if we approve the application?
6971 MR. HARVEY: Well, we heard that they -- it was publicly announced that they were going to -- they wanted to switch the English station to the French sports station, to RDS.
6972 There was an assumption, I believe, on a lot of people's parts that they had a contractual obligation to the Montreal Canadiens, for one thing, and they had to put them somewhere. The only other place I could see them putting them would be CJAD.
6973 COMMISSIONER LAMARRE: Okay.
6974 MR. HARVEY: So there was nothing announced officially at that time but it was pretty much assumed by anybody who had any sort of understanding of what goes on in radio in this city, that that would be where they would end up as long as the Astral deal with Bell was approved.
6975 COMMISSIONER LAMARRE: Okay. Now, about the remedies, as my colleague Mr. Menzies noted earlier, Bell chose not to ask us for an exception on the common ownership policy, so we can't give them what they're not asking us, and therefore either we approve it or we deny it.
6976 You propose to us some recommendations in your written submission. The first one, you said, a) you should reverse your decision of last November authorizing Bell to move CKGM-AM 990 to 690.
6977 If we were to do that we'd have another problem because we have licensed 990.
6978 MR. HARVEY: Correct. That's Bell's problem.
6979 COMMISSIONER LAMARRE: No, it's our problem because we licensed it. We licensed it and there's a broadcaster who has been making plans for the last year to set up shop on 990 once TSN moves to 690.
6980 But you do also tell us that we should, you know, consider the application void and issue a call for applications for a station in Montreal on the frequency of 690.
6981 So basically, given the regulatory situation, you're asking us to revoke the licence --
6982 MR. HARVEY: Well, I think --
6983 COMMISSIONER LAMARRE: -- if the deal goes through, if we approve the transaction?
6984 MR. HARVEY: Yes, because basically the way I see it is that a French-language station on 690 is a completely new entity. It's not using the frequency for what it was approved for.
6985 As I said earlier, and I believe I'm correct in this, that the English and the French markets in Montreal are viewed as two independent markets.
6986 COMMISSIONER LAMARRE: They are.
6987 MR. HARVEY: Therefore, I don't think there is provision to switch an English station to the French language, that a French-language station on 690 would in effect be a brand-new radio station. So why not have them apply for a brand-new radio station.
6988 COMMISSIONER LAMARRE: So, what you are suggesting is that we do a call for applications in this case like we did a year and a half ago and revisit the issue of who should be using 690?
6989 MR. HARVEY: Well, I think that's probably the route to take because, as I said, I think they wanted 690. They didn't necessarily want TSN 690. Everybody knows that that frequency is historically a landmark French-language clear channel radio station.
6990 COMMISSIONER LAMARRE: You're preaching to the converted on this, Mr. Harvey.
6991 MR. HARVEY: And people who don't know a lot about radio don't even know in many cases who owns what radio station.
6992 If they hear an English-language station on 690 at this point in time, I'm sure there's people now that are confused by that, the same as when the Tietolman station will eventually appear on 940, which is in French, which has historically been an English channel. People are going to be confused by that as well.
6993 COMMISSIONER LAMARRE: It's been off the air for quite a while, though.
6994 MR. HARVEY: True, but people have long memories about radio stations. I hear every day from people who talk about oh, remember CFCF, remember CIQC, remember CFOX. People have attachments, historical attachments to radio stations.
6995 You mentioned Ted Tevan the other day, the outpouring from the listenership when Ted Tevan passed away. People are attached to these broadcasters and those broadcasters have known addresses. I call the frequencies addresses to people who don't understand them. Mr. Tevan lived at 600 for so many years. Mr. Balcan lived at 800 for so many years.
6996 We know 690 is a French-language frequency and I think people will gravitate towards it. A French listenership to an all-sports radio station I think will be very successful, but I think Bell wanted that frequency specifically for that purpose when they applied for it, not necessarily to keep 690 in English.
6997 COMMISSIONER LAMARRE: So, given you recognize that 690 is a clear frequency that has technical value, it has a great coverage --
6998 MR. HARVEY: Right.
6999 COMMISSIONER LAMARRE: -- and we both agree on that, the value of it, wouldn't you rather that we -- you're suggesting that we launch a new call for applications if we do approve the transaction between Bell and Astral for the 690. Wouldn't you rather that we let Bell sell it and someone else take over and offer the English community programming they will enjoy?
7000 MR. HARVEY: Well --
7001 COMMISSIONER LAMARRE: Because you do run the risk, as you mention, that if we do launch a new call for applications that what comes out of that process may be -- it's going to be either a French or an English station but we can't predict that at this point in time.
7002 MR. HARVEY: Right. I would be interested to see what Bell would do prior to that with the TSN Radio property. Would they try to divest themselves of that property before applying for a French-language station on 690 if a call was put out?
7003 There are plenty of other AM frequencies available in Montreal as well that they could apply for to put a French-language sports station on if they didn't get 690. They have other options available, as does everyone else in this city.
7004 COMMISSIONER LAMARRE: But not frequencies that offer that extended coverage.
7005 MR. HARVEY: No. But, you know, there's an important thing to point out here, is that they're going -- the reasons they asked for 690 and they brought a parade of people in here, advertisers who said they would give them more advertising, listeners who said they couldn't hear them in the West Island --
7006 COMMISSIONER LAMARRE: Last year.
7007 MR. HARVEY: Last year. Well, now they're going to -- if this is approved, they're going to put the English hockey broadcasts on CJAD, whose nighttime coverage into the West Island is worse than it was on 990 kHz. So how are they --
7008 COMMISSIONER LAMARRE: Depending on the area. But you're right, there are deficiencies also with --
7009 MR. HARVEY: There are more deficiencies with a station that has to reduce its power at night, as CJAD does, than changing a pattern, which they're doing on 990.
7010 You mentioned to the previous intervener about has he been listening on 690 and there are any differences. Well, we have a lot of technical people in our group of listeners who monitor signals, they test signal strength and what have you. The 690 frequency is not yet running at full power, so we don't know what their full coverage is, but I know for a fact that people all over the United States on the East Coast have heard the signal already.
7011 On 990 the nighttime coverage and the daytime coverage has reduced. We believe that the station is running on reduced power 24 hours a day on 990 right now. Now, is that being done purposely to show that the 690 signal is stronger than the 990 signal? I don't really know. That's pure speculation.
7012 All I know is that the 990 signal already is not what it used to be and the 690 signal is not up to what it should be. I just have a funny feeling that there's some games being played right now with both of those frequencies and --
7013 COMMISSIONER LAMARRE: As a former broadcast engineer I would suspect that they're in a building transition and that's why they had to reduce power, to be able to do the work.
7014 MR. HARVEY: I think they did rush to get it on the air before these hearings, to be honest. That's my opinion.
7015 COMMISSIONER LAMARRE: Okay. Well, merci beaucoup, Monsieur Harvey, and thank you for coming again.
7016 Ce sont toutes mes questions, Monsieur le Président.
7017 THE CHAIRPERSON: Yes, Mr. Vice-Chairman.
7018 COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chairman.
7019 You mentioned they were in a rush to start broadcasting from 690 just before the hearing. What's the speculation there?
7020 MR. HARVEY: I think it looks good that they're there with what they asked for --
7021 COMMISSIONER PENTEFOUNTAS: Okay.
7022 MR. HARVEY: -- not what they intend to stay with should they get the approval, but the fact that they're there and we're doing what we said we would do. But for how long?
7023 COMMISSIONER PENTEFOUNTAS: Thank you. I'm happy to see that you listened in last year.
7024 MR. HARVEY: Pardon?
7025 COMMISSIONER PENTEFOUNTAS: To the hearing. I'm happy to see that you got all the details from the hearing last year. You must have been there every day.
7026 MR. HARVEY: Oh, I was here last year every day and I watched online every day this year.
7027 COMMISSIONER PENTEFOUNTAS: Great! Thanks.
7028 THE CHAIRPERSON: Well, thank you, Mr. Harvey, for participating in the hearing and particularly for making it a little bit more real. So thank you.
7029 MR. HARVEY: Thank you.
7030 THE CHAIRPERSON: We've been sitting since 8:30, so we'll take a little 10-minute break, a health break, and we'll reconvene at, let's say, 10:52.
7031 Thank you.
--- Upon recessing at 1043
--- Upon resuming at 1053
7032 THE SECRETARY: Please take your seats.
7033 LE PRÉSIDENT : A l'ordre, s'il vous plaît.
7034 Donc Madame la Secrétaire, s'il vous plaît?
7035 LA SECRÉTAIRE : Merci.
7036 We will now proceed with the presentation by David Birnbaum. You may start with your presentation. You have five minutes.
7037 Thank you.
7038 MR. BIRNBAUM: Merci.
7039 Bonjour. J'avais compris que j'avais 10 minutes? Cinq minutes? I will talk fast.
7040 Bonjour, Messieurs --
7041 THE CHAIRPERSON: Don't talk too fast because interpretation then becomes an issue. So --
7042 MR. BIRNBAUM: Merci.
7043 Merci, Monsieur le Président, Madame et Messieurs les Commissaires, de cette opportunité d'offrir mes commentaires à titre personnel, sur le dossier devant vous.
7044 Je suis soulagé de voir que je ne suis pas le seul devant vous à témoigner de notre attachement, en étant membre de la communauté anglophone du Québec, au TSN 990.
7045 I understand that is one aspect of a very, very complex dossier before you that I won't presume to fully understand, but it is one that I think touches on some particular obligations, as I understand them assumed by the CRTC. And I would hope, consequently, by broadcasting providers in Quebec and Canada.
7046 I know that you have heard from obviously the conglomerates themselves, Bell Enterprises and Astral Media, and I know that they brought to you all kinds of issues, but we understand quite normally that Monsieur Péladeau, comme Monsieur Cope et -- leurs responsabilités sont aux actionnaires. Et je laisserai à eux de vous convaincre là-dessus sur les bons et les mauvais côtés de leurs positions mutuelles.
7047 But at the same time, I understand the Canadian Radio and Television Commission to be subject to somewhat higher standing, a higher calling than simply profits and audience share, and I am here in the hope that the CRTC will use whatever leverage it has - and I do understand that they do have some in this respect - to respond to that higher calling.
7048 And in doing so, to protect the interests and rights of all Canadians to equitable access to a multiplicity of meaningful and responsive media voices across the country.
7049 And a particular part of that mandate, as I understand it, is to see to it that minority language communities, English in Quebec et français dans les autres provinces et territoires du Canada, see themselves reflected and served by the radio and television stations authorized and regulated by this body.
7050 I do understand the CRT to have responsibilities in this regard under Canada's Constitution and more specifically under Canada's Official Languages Act.
7051 En étant membre de la communauté anglophone du Québec, il me semble que le CRTC, dans ce cas actuel, risque de ne pas respecter ses obligations à cet effet.
7052 I am talking specifically, as I mentioned, about TSN 990, the all-sports English-language station serving Montreal and a much wider audience on the web.
7053 As part of its proposed purchase of Astral Media, including TSN 690, I had understood Bell to have sought an additional radio frequency through an exemption from the CRTC regarding its media concentration rules, and that this would have allowed it to open up a French-language all-sports radio station, which like other interveners I would certainly welcome, but not the detrimental or to the loss of TSN 690.
7054 I will take them at their word and I will tell you why. I had a conversation -- again, à titre personnel, with the special assistant to Kevin Crull, the Chair of Bell Media, who assured me that that was la voie préférée par Bell to leave 690, 990 as TSN, an English station, and to open up further the French market, with bottom line as their goal, surely, which is again legitimate, to open up a French-language radio station.
7055 But my understanding that that is about the bottom line and that, with respect, you respond to a different calling and that is through your -- through Parliament to me, as a taxpayer.
7056 I am here in my own name but I have spent a quarter of a century of my working life in community leadership positions within English-speaking Quebec, as Executive Director of Alliance-Quebec throughout the 90's; Executive Director of the Canadian Jewish Congress - Quebec Region after that; and currently as the Executive Director of the Quebec English School Boards Association. And like anybody else, my personal capacity is (inaudible) part by my professional life and I do, in that context, feel it very important to urge you to play your role as fully as you can in protecting TSN 990.
7057 I am a proud Quebecer, and despite the challenges remain optimistic about our community's rightful place here. We are Québécois à part entière and we will, I am sure, continue to engage the Quebec Government of the day in the defense of our rights and freedoms. I expect to be participating in a meeting with the New Premier; it will be the 7th one that I have helped to organize and meet with.
7058 Mes soucis dits, c'est tout à fait normal qu'on compte davantage sur la protection de nos droits minoritaires linguistiques qui découlent des lois canadiennes.
7059 And it is not just my opinion that the CRTC does have certain obligations with respect to linguistic minorities. I know that the Commissioner of Official language to whom I complained on this matter, Graham Fraser, has stated the same position publicly.
7060 I had my ten minutes here and I do appreciate that the Commissioner does not have specific jurisdiction on this matter before you but I do know, as per a letter I have received from the Commissariat, that Mr. Fraser has written as well to the Chair of Bell Media, noting his understanding of the importance of this English-language radio station to the full and rightful place of Quebec's minority language community; and that being the English community.
7061 TSN, in its short time on the air, in my view and so many others, has become an engaging, intelligent and entertaining voice for sports news comment and event coverage. That coverage includes experts like François Gagnon and Normand Flynn and Denis Casavant. It includes, I am sure - I don't have access to the numbers - but a large francophone-viewing(ph) audience. And I mentioned that in the context of this being part of the tapestry and fundamentally important tapestry of English-speaking Quebec. And the loss of each part of that tapestry is a loss that we feel as a whole, as a community.
7062 So I am also here as a very avid sports fan but I insist that this is about more than that; it is about one further piece, as I say, of that tapestry that allows us, in the face of many challenges - some legitimate; sometimes others that are not - as part of Quebec's linguistic minority.
7063 And I continue to understand that the CRTC does have some leverage with respect to protecting that part of this tapestry.
7064 First of all - and I will leave to the experts the specifics - I had understood that the CRTC might have chosen to grant Bell, pending this transaction and its completion, an additional frequency so that it could open a French-language station while maintaining an English one.
7065 If that is not an option that was possible, I would understand that under the CRTC's more, if not, as I am quite sure, legal obligations to minority language communities, you would find some other way of making a pre-condition of this sale that Bell maintain the operation of TSN 690 in English.
7066 Bon; je conclurais en vous rappelant, comme plusieurs autres écouteurs de TSN 990 ou 690, je suis bien capable d'écouter les nouvelles du sport en français. Je le fais souvent. But that is not the point. Canada's institutional voices, the CRTC being one of them, I feel have a solemn obligation to help me, as a member of that minority-language community, feel comfortable, included and well-served by my media choices in English and in French.
7067 I hope you will honour that obligation by making this frequency remain en English frequency. Thank you.
7068 THE CHAIRPERSON: Well, thank you very much for participating in the hearing. As I mentioned earlier, it is -- we have -- my personal opinion (inaudible) individual participants at the oral phase of the hearing and it always helps our deliberations to have that.
7069 Just to be clear; the Commission does have obligations with respect to official languages, directly under Part 7, among other things, in terms of our operations as well - but those are other parts - but definitely towards the minority -- the minority -- the official language minority communities, under Part 7 of the Official Languages Act.
7070 And interestingly, right within the Broadcasting Act, the -- Section 3.1(b) of the Act says the broadcasting system operates primarily in English and in French, and that is an important aspect; 3.1(c) English and French-language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements; again, Parliament is telling us to take those into consideration. And, as well, to the regulatory policy, in Section 5.2; that the Canadian broadcasting system should be regulated and supervised in any flexible manner that is readily adaptable to the different characteristics of French and English language broadcasting, and service to those communities.
7071 So we are in a situation where yes indeed, the Language Commissioner has a jurisdiction but there is definitely an overlapping responsibility which I think dovetails.
7072 I just wanted to clarify that for you and you may have mentioned -- heard in my opening remarks; I did refer to our obligations under the Official Languages Act being one of the filters we will apply in this and every other proceeding that we have. So thank you for that.
7073 I will take the occasion, before passing on to the Vice-Chair, who may have some questions for you about that issue of public participation in our proceedings.
7074 How could we - to other interveners, I was asking their vision in 2017. This is another way of asking the same question on a more focussed issue. How would you suggest that we maybe encourage greater participation in our proceedings?
7075 MR. BIRNBAUM: Yes; I think it is a really pertinent and important question, and I am not sure I have an answer. It is a preoccupation we often share in the roles I have played, because we often do our best to assume we are speaking for a community and I think we do a fairly good job of it, but it is often hard to have that based on concrete groups of people behind us submitting and writing and offering interventions.
7076 I think part of it might be to make sure that average Canadians understand that they are afforded the absolute and full right to come here without having read all of your statutes and understanding the technicalities, which I won't presume to understand either. And I don't know if in the public offers and announcements of hearings that are, I am sure, legally required; if there is a way for the wording of those to be more sensitive, because I think Monsieur et Madame tout le monde simply flip to the next page and don't understand that those invitations on issues that really matter to Canadians apply to them as well. So I think the offer might be made more clearly; that might be one thing.
7077 I think groups like the ones I have worked with have a larger responsibility to share with their members as one of the avenues of getting our diversity messages across is through the Canadian institutions that respond to them, and maybe we can do more in spreading that message as well.
7078 THE CHAIRPERSON: Well thank you for that perspective. Vice-Chair?
7079 COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chair. Mr. Birnbaum, congratulations on your presentation. You kind of stole a lot of our thunder because you kind of covered a lot of the issues that I wanted to go over.
7080 But in terms of 690 and the sport station and TSN; part of that is -- part of the reason we are here is because there is a common ownership policy and that limits the number of stations that any one owner can have in a market, for obvious reasons; to sort of avoid monopolistic tendencies.
7081 That being said; if we deny the application, there -- Bell's choice, I think, has been quite clear that they are going to hold on to CJAD and they are going to dump TSN, notwithstanding everything they -- all the (inaudible) words they had last year.
7082 So my question is -- one - two-fold - one: What does the English sports station mean to Montrealers? Because before Bell acquired the property, it was -- I think it was Sports 990, and there was a following there as well.
7083 And secondly, can English sports radio survive in Montreal without the TSN content?
7084 MR. BIRNBAUM: Yes; I could certainly offer only my personal opinion here.
7085 My own attachment to 990 or 690 really is to the 'made in Quebec' content.
7086 I appreciate - and I think this is important to their majority-language listeners as well; all of the access that they had, some before TSN and more after, to major sporting events.
7087 I am a 990 fan because of Mitch Melnick and Tony Marino and the excellent, excellent English-language content.
7088 COMMISSIONER PENTEFOUNTAS: Right. But let me give you an example. I mean I have done this myself; I have listened to the game and then switched frequency to listen to the talk post-game or pre-game.
7089 So people made mention, as I think it was somebody from Astral yesterday saying: If you don't have the actual content, you are going to have a pretty hard time making a go of it.
7090 And I am asking you if your commitment to the Mitch Melnicks and the Marinara's and everyone else that is -- I think Randy Tieman is there now as well.
7091 Would you go back to 690 or 990 irrespective if it was owned by TSN or not? It is the personalities that make the station? And is it the personalities that create that engouement, that desire for that station and that sense of community? Or is it the content? And could one survive without the other?
7092 MR. BIRNBAUM: Yes; I would answer emphatically yes to the question. Where I would have worries that I am not equipped to respond to is on the economics of making that happen.
7093 But I would answer emphatically: Yes; the station --
7094 And again, I point to the cross-culture content, if you like, the François Gagnon's of this world, the Normand Flynn's; they were there before TSN was part of this equation.
7095 COMMISSIONER PENTEFOUNTAS: Yes.
7096 MR. BIRNBAUM: So I think that in terms of the kinds of community preoccupations I am expressing from a personal perspective; those are expressed by my attachment to the station before it was a corporate entity associated with TSN.
7097 COMMISSIONER PENTEFOUNTAS: (inaudible)
7098 MR. BIRNBAUM: And if I might - because I know the question has come up already a number of times this morning.
7099 COMMISSIONER PENTEFOUNTAS: Yes.
7100 MR. BIRNBAUM: That kind of attachment would in no way be honoured by (inaudible) promising to move that content to CJAD. I mean -- and it gets to something we deal with every day when one is talking about true equity and accessibility with respect to the Northern(ph) language community in Canada. If you are talking about an equal playing field, the criteria to judge that field have to be the same. And I can't imagine the Commission order to the corporate entities we are talking about; proposing to simply put: bon; TVA and Radio-Canada together will find spots and we will make it all work. It has nothing to do with a meaningful solution to getting rid of an English sports station.
7101 COMMISSIONER PENTEFOUNTAS: It doesn't work? And in terms of -- some of those guys also came up previously this week and earlier this morning; if -- because the English community is also served by CJAD News Talk or News Talk, Weather and Sports, whatever they call themselves these days.
7102 And would you not be denying that listenership their news talk by filling half the schedule with sports talk and sports content?
7103 I saw some of the interveners, in their writing, saying: You know, when I am listening to something and they change topics completely, that is upsetting; right? Because people are used to listening to someone at 7 o'clock in the evening and on the nights when there is a hockey game, well you lose them. I don't know what the CJAD schedule is these days at 7 a.m., but it is like -- you know; people listen to Tommy Schnurmacher and if he was on a seven and on a hockey night you don't listen to him anymore, well that also sucks sort of some of the life out of the English community in the city. Would you agree with that?
7104 MR. BIRNBAUM: Well, I think it is an essential point. I have the dubious distinction of being the sole person who describes, I think, a very negative view of English Quebec that was famously expressed by Gérald Leblanc, a former columnist of Le Devoir. He talked about the "evil troika of English speaking Quebec" and he was talking about The Gazette.
7105 COMMISSIONER PENTEFOUNTAS: Of The Gazette, CJAD.
7106 MR. BIRNBAUM: Alliance Quebec and the Protestant School of Greater Montreal and he put in brackets CJAD.
7107 COMMISSIONER PENTEFOUNTAS: Right.
7108 MR. BIRNBAUM: I have worked for those first three. I am the only person who has. But to flip it around, these institutions are so -- as the speakers before me said, are so much part of the fabric of a shrinking, but I hope still vibrating English speaking Quebec, and we English speaking backers have our attachments to some very established voices and CJAD being absolutely essentially one of those in its present constitution.
7109 So, even if Bell were to ambitiously move towards a great deal of sports content on CJAD, which I personally don't expect would really happen, that as you know, would then compromise some very important other components of English language radio for our diverse community across this.
7110 COMMISSIONER PENTEFOUNTAS: Earlier today we heard allusion to an expanded English, potential English market and I'll explain myself in that and I haven't heard 990 or 690 for a while. But I remember back in the day when Sir Mitch Malneck and gang started things up, there would be an awful lot of francophone listeners that would come on and talk and give their opinion.
7111 Does it serve, because you know, they like -- Mitch Malneck or the like Bob Dylan or, you know, since they are indivisible those two needless to say, but does that create also -- I just find there is a trend sort of border thing happening as well and that was happening for sports, those sports can unite the city, and they raise some other lines between the linguistic semi-duality that exists here.
7112 And so, do you still sense and I haven't heard the station for a while, your listeners, that there is a francophone presence and a francophone listenership?
7113 MR. BIRNBAUM: Oh! without a doubt and I know that kind of qualifications may be difficult to quantify, but in my own view and I do offer humbly, if I might, after 25 years of being a major part of English speaking community institutions in this province, because it's intangible doesn't make it meaningless.
7114 That kind of cross-phonation is part of us finding our place here together -- avec nos concitoyens francophones. C'est d'une importance, je trouve capitale.
7115 Like I say, for a François Gagnon to be part of -- to serve a modest way an English speaking reality, through the avenue of the sports station is just one more little bridge at a time when those bridges are essential. And sports is one of those subjects in Quebec that can transcend language and get us continue to be talking to each other. And, well, TSN right now is a vehicle for that and I think it's really important.
7116 COMMISSIONER PENTEFOUNTAS: Okay. Thank you. Thank you very much.
7117 THE CHAIRPERSON: Thank you very much for your participation.
7118 C'est très apprécié. Nous allons passer au prochain intervenant, madame la secrétaire.
7119 LA SECRÉTAIRE : Merci. I would ask the Alberta Media Production Industries Association to come to the presentation table.
7120 THE CHAIRPERSON: Welcome. And, please, identify yourself for the purpose of the transcript and make your presentation, please.
7121 MR. EVANS: Thank you. My name is Bill Evans and I am the Executive Director of AMPIA, the Alberta Media Production Industries Association.
7122 Since 1973 AMPIA has represented independent producers and members involved in all aspects of the creation of screen based content in Alberta.
7123 The mandate of the Association is to ensure the development of the indigenous industry at the producer technical talent and craft levels. Central to this mandate is maintaining an environment in which Alberta producers can initiate, develop and produce screen content over which they have creative and financial control.
7124 Thank you for allowing us another opportunity to provide comments about this transaction. We agree with others who have intervened that if this transaction is approved, that the applicant must be required to contribute significant benefits to the creation of Canadian content productions by independent producers. We define an independent producer as a producer that is 100 per cent unaffiliated.
7125 AMPIA supports the CMPA position that 85 per cent of the value of this transaction should be directed toward Canadian content production. We recommend that of this production no less than 75 per cent be produced by Canadian independent producers as defined by CAVCO and the CMF.
7126 One of the issues we would like to comment on today is that AMPIA has been and continues to be deeply concerned about the consolidation of and concentration of ownership in Canada's media sector.
7127 Our assessment is that this transaction would concentrate too much market power under one corporate entity and this would inevitably lead to monopolistic practices that would adversely affect consumers as well as harm the public interest.
7128 Mergers and acquisitions in the media sector over the past ten years have had the effect of centralizing English language programming decisions in Toronto as well as diluting or eliminating in centres for regional production.
7129 While the spectrum of channels has increased, the decisions about what programs are made and whose voices are heard and which stories are told, have decreased dramatically.
7130 Meaningful diversity requires more than -- more rather than less competition as well as less centralized decision-making in order to meet the goal of actually reflecting our geographic regions and the changing social, political and economic realities across Canada, not just in one city or one province.
7131 In recent years, Canadian broadcasters have closed development offices in our region, including CTV, resulting in a dramatic reduction in production in Alberta.
7132 At our appearance before the Commission on April 13th 2011, we tabled a report prepared by Nordicity, entitled "Analysis of Canadian Private Broadcaster Expenditures in Alberta and the Prairie Provinces" which covered the period from 2003 to 2009.
7133 From that report we noted several facts that concerned us. CTV licences were in most years lower in the Prairie Provinces than in Ontario and B.C., calculated on a per-household basis.
7134 From 2003 to 2009 CTV's independent production in the Prairie Provinces was 44 per cent lower than the national average. Prairie provinces fall short of the national average on per-household basis in an annual average spending by private conventional broadcasters on independent production in all genres.
7135 Alberta was only one quarter of the national average and the fiction genres spending in Alberta was only one tenth of the national average and children and youth programming Alberta was -- spending was nearly one eighth of the national average and on documentary spending, Alberta was approximately half of the national average.
7136 And Alberta is consistently the most under represented provincial jurisdiction, with the exception of Newfoundland, New Brunswick and Prince Edward Island.
7137 The report also noted that Alberta provides a very supportive environment in which to produce television programming. Since 1998, we have had a Provincial Film Fund that provides financial in centres that are competitive with other provinces. We have great locations, great facilities and great crews.
7138 So, why is there such little licensing in Alberta by CTV, Bell Media?
7139 Albert's robust production environment exists in part ironically due to past benefits that flowed to Alberta through development funds such as the CFCN and CFRN, SUNWAP development funds. These funds helped establish and develop producers, directors, writers, actors and crew to the world class quality that we have today.
7140 Those funds did what they were meant to do, they developed storytellers with distinctive voices in Alberta, storytellers that now export their products to the world and win international awards for their excellence.
7141 Unfortunately, these benefit packages expired long ago and these regional broadcast funds were eliminated as a result of consolidation of ownership to move to group licensing and the centralization of development and program licensing in central Canada.
7142 Now, when one takes a look at the recent productions made by independent producers in Alberta which are on CTV Bell Networks, they are few and far between.
7143 With further concentration of ownership by the purchase of Astral where some of our members have been able to sell their programming, we are understandably nervous about the effect of this transaction on our membership.
7144 What is not being supported now in Alberta are our local producers, directors, writers and performers, the next generation of storytellers. This critical area of expression has been foregone by private broadcasters included in CTV-BCE.
7145 Well, not wanting to play back to- the-future, we would like to take this opportunity to offer some ideas that might help to ensure diversity of voices. We propose that as part of the benefits package attack to this transaction, if it is approved, that BCE commit, as a condition of licence, to the creation of a Revolving Development Fund in Alberta.
7146 We suggest a Revolving Development Loan Fund of $500,000 with the loans to be repaid on the first day of principal photography. We have precedents and templates from funds that currently administers that can provide a structure that could be utilized.
7147 Our thinking is this: If BCE invests in talent in Alberta, there is a very good chance that programming from Alberta for the Bell Media Network would then be licensed and broadcast, should it have merit. This creates a win-win for both AMPIA and our members and BCE.
7148 Let me be clear. This fund would not be a charity fund. This fund is simply meant for Alberta producers and writers with great programming concepts to bring them to fruition and the programs that result from this initiative would provide value to Bell Media schedules. This benefit could be attached to CTV-2, which is an Alberta based broadcaster.
7149 We would be remiss if we did not acknowledge the positive impact that our local television stations have had on the Alberta production community and our producers have had positive relationships and strong support from both CTV Edmonton and CTV Calgary.
7150 In fact, CTV-2, when it was branded as Access made it a point not only to licence programming from Alberta producers, but many of our producers and crew began their careers and were trained there before they took those skills and moved to independent production to create first class programming.
7151 We believe that our stories bind us together through mutual understanding, stories shared on a national stage allow our broader exposure to people across the entire country.
7152 We see tremendous value in that and given that the airwaves are a public trust, government has a role to play to create an environment so broadcasters can do their part, not just because it is public policy, but because it can also be good business as regional programming has demonstrated time and again that it garnished high ratings from Canadian audiences.
7153 We also believe that if a single broadcasting entity wishes to attain a large concentration of ownership on our national airwaves, then it is incumbent on that entity to ensure the voices from all provinces and territories of this country are available to Canadian viewers in a meaningful and comprehensive way.
7154 Thank you.
7155 THE CHAIRPERSON: Thank you very much for your presentation. Commissioner Denton will have some questions for you.
7156 COMMISSIONER DENTON: Good morning, Mr. Evans.
7157 MR. EVANS: Hello.
7158 COMMISSIONER DENTON: I again we are in the situation where you're basically telling us in terms of public policy "don't do this", that it would resolve in excessive concentration of buying power, particularly in the East.
7159 Is it against the interest of Alberta film producers that we approve this transaction?
7160 MR. EVANS: I don't believe we are saying that we are against it. We are just saying that we are expressing concern about the concentration of ownership, hence identifying that if the transaction goes forward, that we would like to see some tangible benefits for our members as part of the package.
7161 COMMISSIONER DENTON: Yes. That's perfectly understandable and I understand where you are coming from in that regard.
7162 But that the -- you say that mergers and acquisitions in the media sector over the last ten years since have the effect of centralizing English language production and programming decisions in Toronto. And this is another one less producer and buyer of.
7163 Does Astral have any connection to the Alberta film industry, for example?
7164 MR. EVANS: I am not aware currently of any programming that is -- that has been licensed by Astral directly, but I know that there are some projects that have been -- that received support through the L. Greenberg Fund.
7165 COMMISSIONER DENTON: Yes.
7166 MR. EVANS: Specifically feature films, but I am currently not aware of any specific programs licensed on any of the Astral specialty channels.
7167 COMMISSIONER DENTON: So, does AMPIA have direct -- members of AMPIA, do they have direct economic interest in this or is your concern mostly of public policy?
7168 MR. EVANS: We do have -- our members do have potentially -- will potentially be impacted economically by the fact that there is one less commissioning body that would then be accessible to them, that being Astral.
7169 COMMISSIONER DENTON: If we approved it?
7170 MR. EVANS: Yes.
7171 COMMISSIONER DENTON: Okay. And do you have wisdom or a counsel for us in that regard?
7172 MR. EVANS: My concern is mostly on the television side of it. A lot of our members are specifically involved in television production and one thing that I know has happened is that with the closing of Regional Development Offices by CTV and other private broadcasters, that fewer and fewer shows are being developed and produced in Alberta.
7173 So, our thinking with this transaction, if it is approved, is that there is an opportunity potential for our members to benefit by making a condition of licence, the creation of a development fund that would then allow our members to develop and to produce new projects.
7174 COMMISSIONER DENTON: Okay. Thank you, Mr. Evans. I think it's perfectly clear. Those are my questions. That's my question, Mr.Chairman.
7175 THE CHAIRPERSON: Thank you very much. I have one question.
7176 The numbers you have on the second written part of your -- about the amount of activity in Alberta, pre-dates recent decisions in Saskatchewan which has changed the support to the production industry in that province, I was wondering if you or your members or if you are knowledgeable of consequential positive impact that may have had on neighbouring provinces like yourselves?
7177 MR. EVANS: I was just actually discussing this with my colleague from On Screen Manitoba this morning and I don't have any definitive examples, but there are lots of rumours that people are moving to both our jurisdictions.
7178 There is at least one production that I know that is pending, that would be shot in Edmonton that had been slated for Regina. However, that deal has not been finalized.
7179 So, but that's the only one I've heard of. Actually, I haven't heard of any production companies moving at least to Alberta.
7180 THE CHAIRPERSON: I discussed yesterday the -- well at the beginning of the week with BCE, but with others since then, the challenge that we may face of a surge of benefits money for on-screen in a short period of time and BCE had proposed in the original application to lengthen, just moved that out.
7181 There may have been some evolution since then, but from your perspective, what's your view of the potential arrival and I get your point that you would like to have part of the benefit money for your members in your jurisdiction, but I was wondering if you had views on this surge of problem?
7182 MR. EVANS: Yes. Also, I have referred to the Nordicity Report that we presented in 2011 and part of the -- I pulled some pertinent facts germane to this presentation. But the other thing of that report, we were looking into was to find out how many benefits from previous transactions remained unexpended and while I don't have the CTV numbers in front of me specifically, I know that there have been some that remain unexpended.
7183 I can provide that information to you after this meeting. I just need to find the numbers from that report.
7184 However, that is basically the preamble to a concern that we have that if the term of the benefits is allowed to stretch, say, to ten years as they propose, our experience is that the money doesn't get expended until it has to be.
7185 And so, our position is that we're going with some of our colleagues' presentations, we think the term of the benefits package should be no longer than seven years.
7186 THE CHAIRPERSON: Thank you. That's clear. I believe those are all our questions. Thank you very much for being -- participating here.
7187 MR. EVANS: Thank you.
7188 THE CHAIRPERSON: Thank you.
7189 THE SECRETARY: I would now ask the Quebec English-Language Production Council to come to the presentation table.
7190 THE CHAIRPERSON: Good morning. Welcome to our hearing. For the purpose of the transcript, please identify the panel and then make your presentation, please.
7191 M. SPRY : Bonjour. Je suis Jérémie Spry, directeur des Affaires juridiques chez Muse Entertainment. Et à ma gauche, Gary Saxe qui est co-président du Conseil québécois de la production de langue anglaise; Michael Proupas(ph) président de Divertissement Muse; Kirwan Cox, coordonnateur à notre conseil et Ernie Gilbert, président de Gala Film.
7192 Nous apprécions énormément cette occasion de présenter le point de vue de notre conseil sur ce sujet important.
7193 The Quebec English-Language Production Council represents both producers and unions. We are an industry association that is working to increase English language audiovisual production in Quebec.
7194 Our members represent -- well, not too long ago, it was the largest independent language film production centre in Canada. Montreal has been the training grounds for thousands of highly regarded professionals, including notables as David Cronenberg, Haven Writemen, William Shatner and many others.
7195 In support of our desire to preserve and build the English language production community in Quebec, we welcome the Federal Court Decision that the Official Languages Act has concurrent jurisdiction with the Broadcasting Act.
7196 The Federal Court indicated that the CRTC needs to support the development and enhance the vitality of the official languages minorities in its decisions.
7197 The time is ripe for the CRTC to apply the Federal Court standards concerning the official language minority in Quebec. The Bell Media CTV licence renewal decision last year did not consider this issue. Now would be the time to correct that oversight.
7198 Although CTV has a dominant presence in the English Quebec market, we estimate that Bell spends only two per cent of its independent CTV production in Montreal. This is much lower than Global's nine per cent or CBC's 12 per cent.
7199 We need a vibrant English language production industry in Quebec and local news, weather and sports does not fulfil the objectives of Section 41 of the Official Languages Act. We do not believe Bell is fulfilling its obligations to support English Quebec's regional reflection, development or vitality with only two per cent of its independent TV licences spent in Quebec.
7200 This hearing provides an excellent opportunity for the CRTC to begin addressing the needs of the official language minority groups and the objectives of the Official Languages Act.
7201 With that in mind, we would like to focus our comments on the expenditure of the tangible benefits.
7202 We believe both Bell and the CRTC have a special obligation at this hearing to support English language production in Quebec. That obligation is based on Section 41 of the Official Languages Act. The completely inadequate level of Independent English Language Production Commission didn't come back by Bell and the preponderance of Astral Quebec's base operation and assets.
7203 Sur ce, je passe la parole à monsieur Gary Saxe.
7204 M. SAXE: Merci. Le fait qu'Astral est une entreprise bilingue basée au Québec avec la plupart de ses actifs au Québec signifie pour nous que le CRTC a une obligation particulière envers la communauté québécoise dans la reproduction des avantages tangibles.
7205 Dans leurs énoncés de politique de 1993 à l'achat du JumpC TV en 2007, la Commission a déclaré qu'elle était très important que les avantages tangibles significatifs soient orientés vers les communautés locales ainsi que le système de radiodiffusion dans son ensemble.
7206 We take note of Bell's increased tangible benefits offer of $231 million. Therefore, we wish to amend our written intervention to request that the Quebec share of the English tangible benefits envelope should be 15 percent.
7207 At the same time, we also take note of the fact that Bell spends relatively little in English Quebec, therefore we request that, regardless of any other calculations, the English official language minority receive a minimum of $12 million for independent production licenses. That amount is the difference between a minimum license fee CTV should spend over seven years at 6 percent of its national budget and the 2 percent we estimate it is spending.
7208 In our written intervention, we based our linguistic calculations on assets defined by Bell and PricewwaterhouseCoopers. Having now seen many of the interventions submitted to the Commission, we are not sure that this is the best or fairest formula. Some interveners have raised questions about the PricewaterhouseCoopers valuation. Other interveners have proposed an alternative formula based on discounting cashflow, earnings and other calculations.
7209 We are not in the best position to decide among these various methodologies and must leave it up to the sharp pencils of the Commission's experts. You must divide the linguistic public interest fairly. In any case, the Astral English language network, such as TMN, HBPO Canada, Family Channel and Teletoon, are extremely valuable English language assets whose value must be strongly reflected in the allocation between English and French language benefits.
7210 Whatever the amount, this expenditure should be limited to five years. We say this after looking at the track record of BCE after it purchased CTV in 2000. BCE promised to spend its tangible benefits in seven years and after 11 years, they still had $3.6 million unspent.
7211 If we are regulated, we see advantages that the combined entity may provide English and French producers who wish to create quality Canadian productions in an intensely competitive international market.
7212 We heard from the Chair on Monday that the CRTC will refocus its efforts on consumers. This may be a balancing of the Commission's approach to policy, but we would emphasize that consumers are citizens and creators too. English-speaking Canada is always subject to foreign economic pressures that make our own cultural sovereignty very challenging.
7213 We look forward to your vigorous response to this challenge that English Canadian cultural industries face.
7214 To sum up, after the CRTC decides on the total incremental onscreen benefits and their linguistic division, we request that the Quebec official language minority receive enough to encourage our development and vitality. This should be 15percent of the English tangible benefits and not less than $12 million.
7215 Thank you. Merci beaucoup.
7216 THE CHAIRPERSON: Thank you.
7217 I think I may have mentioned a refocus on Canadians, which includes citizens, consumers and creators, so I'm not forgetting anyone in that equation.
7218 MR. SAXE: That's great to mention that.
7219 THE CHAIRPERSON: Mr. Spry, just by curiosity, are you related to the late Robin Spry?
7220 MR. SPRY: I am indeed.
7221 THE CHAIRPERSON: So a long genetic history in you from English language production.
7222 MR. SPRY: Perhaps I could note also that I'm the grandson of Graham Spry, who had a particular role in the establishment of the CRTC and the CBC.
7223 THE CHAIRPERSON: Excellent. It's an honour to have you in our hearing as well.
7224 Commissioner Denton will have some questions for you.
7225 COMMISSIONER DENTON: The 3 billion dollar question is something you addressed but I need your help here: Is it in your interest that we approve this proposed transaction and, if so, how?
7226 MR. SPRY: Well, we're here on behalf of the Council that represents diverse interests. We all acknowledge that there is a sort of unavoidable momentum towards consolidation and we see certain advantages in terms of being able to compete internationally with Canadian products, but our intervention is really based on the assumption that should the transaction proceed, to ensure that regional interests, in particular Quebec language production, be sustained and encouraged in those benefits.
7227 Perhaps others would like to comment.
7228 COMMISSIONER DENTON: Yes, I'd really like to hear from you on the big question.
7229 MR. PRUPAS: I think our group represents diverse interests, so we're somewhat reluctant to pronounce officially on behalf of the entire group. But I would say, speaking on behalf of my company alone, that I do think that this consolidation will in fact be a benefit to the production industry in Canada.
7230 I think that by virtue of the competition that Canadian producers are faced with in the international marketplace, having an organization who is prepared to play a big role in supporting quality Canadian production that is capable of competing at an international level will always be a benefit to us. Rather than the kind of subdivided financial sources that we are constantly looking for in this country, having a strong entity supporting it will be beneficial, certainly from my perspective, representing my company. I do not speak on behalf of all the members of the Council.
7231 COMMISSIONER DENTON: Just for my own edification, Mr. Prupas, what is your company?
7232 MR. PRUPAS: It's called Muse Entertainment. It's listed as the --
7233 COMMISSIONER DENTON: As you listed as production?
7234 MR. PRUPAS: Mostly television production. We're the second or third largest television production company in Canada.
7235 COMMISSIONER DENTON: Anyone else?
7236 MR. SAXE: Yes. My name is Gary Saxe, I'm co-president of the Council as well as an organizer with ACTRA.
7237 I think it speaks to the strength of our organization, the Quebec English Language Production Council, that we bring together both sides of the bargaining table, for example, that we represent three of the larger unions within our industry as well as all of the major producers who are involved in the English language industry. This means that there's some -- while we speak together, that we could develop the industry, sometimes we can't get a consensus.
7238 In this case, we are neither suggesting approval or disapproval of the acquisition, but rather we have flagged some concerns as well as we agree with what Michael just said about the potential benefits that could come help the production industry through this acquisition.
7239 COMMISSIONER DENTON: Okay.
7240 As a former English Montrealer, I don't have any objection to anything you're saying, it was just, is the act that would unleash this torrent of funds going to be good for the whole of the industry and for the Canadian public policy objectives?
7241 MR. PRUPAS: If I may, I think it's not just the act of releasing this torrent of funds that we're addressing, it's the presence of a very strong corporate entity over the long run that could, in the long run, provide a benefit to the production community.
7242 COMMISSIONER DENTON: Point taken.
7243 Those are my questions, sir.
7244 THE CHAIRPERSON: Thank you.
7245 A couple of questions from me. I don't know if other commissioners have questions, but a couple from myself.
7246 You're coming here and making a very valid point. We've also heard from Alberta groups, Manitoba groups, so everyone is lining up for their share of potential benefits money.
7247 It was my impression that obviously production, both film and television production, even on new platform production, is getting more and more difficult to build a financial structure. As a consequence of that, there were more and more not official co-productions that were international but interprovincial co-productions.
7248 How would your proposal to sort of cut up the pie on that basis impact that reality and how might we stickhandle that?
7249 MR. GELBART: I'm Arnie Gelbart, Galafilm in Montreal.
7250 Again, the buyer will decide what projects get made if the transaction goes through, and then we work out whatever relationships we need with the co-producer. It usually comes from the need of financing. If one can make a program that's a Quebec-Alberta co-production, then we would use the benefit of the Alberta producer, we would use the benefits of Alberta while we would maximize the benefits we could get in Quebec, including any of these amounts that are being talked about today and that the Commission in its wisdom may decide to parcel out.
7251 So I don't see how it changes radically what we do now, which is we try to get projects made. If we can't get it made in one province alone and we can get a partnership with another province to make it, then that's the way we'll do it.
7252 I'll give you as an example that there's a current project, one of the most popular programs on Canadian television is a program called Heartland, which is on the CBC, which is a Quebec-Alberta co-production. It's a project that was initiated in Quebec but because of its background, it needed ranches and horses and these kinds of things, it was decided to make it in Alberta. The only kind of ranches we have are in St-Tite, and they weren't big enough.
7253 So it's the kind of project where the funding from Quebec and the funding from Alberta, together with the CBC's help of course, made the program possible.
7254 THE CHAIRPERSON: I don't think Commissioner Menzies, who comes from Calgary, has seen the full value yet of the Festival Western de St-Tit, but I take your point.
7255 THE CHAIRPERSON: But I understand that you'll continue to operate in a similar way. My question was more from our perspective, from a regulatory perspective, when we get down into the details sometimes we ask ourselves questions. So I'll put it to you in the following way: If indeed there is an envelope that gets parcelled out for the community you're speaking about today and down the road there is, I don't know, an 80/20 domestic in Canadian co-production, and assuming the 80 percent spend is in Alberta and not by the English language production sector in Quebec, do we assign the 20 percent as the benefit, or the hundred percent?
7256 MR. GELBART: No, I think it's proportional. I mean, this has been the practice, that it's, you know, if there is a fund and you're a 20percent partner, then you get 20 percent of the funding that would otherwise be available if it were wholly Quebec production, for example.
7257 So I think this is standard practice, both in interprovincial and international co-productions, is that you bring only your share. For example, the tax credits that flow to the system are in a proportional basis as well, so the Quebec tax credit would be 20 percent only, whereas -- and the rest of the money would come from Alberta.
7258 MR. PRUPAS: If I can jump in. I think that the decision that you need to make is, what is the appropriate allocation of the benefits monies on a province by province basis if necessary? And I think the logic that we're putting forward here is the fact that Astral is not only a Montreal based company but the vast bulk of its resources are in eastern Canada, that the acquisition by Bell of this company should reflect in part, in significant part, the source of those assets. That would include, and they've already acknowledge in their application that a significant portion of those spends should be in the province of Quebec.
7259 THE CHAIRPERSON: If you follow your logic, not just yours but also the Alberta group, the Manitoba group, you're taking a perspective vis-à-vis the English language minority community in Quebec. I guess the same could be argued from the side of the French language minority communities in the other nine provinces and territories.
7260 You get a lot of little pieces and I'm wondering if that doesn't lead us down the road of great regulation but answering good ideas and good productions and excluding it. It seems very framed from a more bureaucratic perspective than a creative perspective.
7261 MR. COX: If I could just make a comment.
7262 Maybe about five or six years ago, Toronto represented about 45 percent of Canada media fund English funding. Now, it represents 70 percent. And a consequence of that concentration, not of ownership but concentration of production, in Toronto there is a lot of creativity there and we're seeing a lot of people that used to live in Montreal now moving to Toronto, because that's the only place to get work.
7263 So there is a point, and we're not saying that you have to divide things up -- northern Saskatchewan, eastern Manitoba, etcetera. We're not suggesting that.
7264 What we are saying is that the official English minorities are in a different position, both English and French minorities, a different position legally, a different position in many other different ways, as we pointed out in our intervention.
7265 Hence the responsibility of the Commission not just to say, okay, English Quebec is the same as BC, is the same as Nova Scotia and, gee whiz, there's so many divisions we don't know what to do.
7266 We're saying, insofar as the Official Languages Act is concerned, insofar as your responsibilities are to that Act and to the official language minorities, that there needs to be some division on that basis, and we're giving you some suggestions about what we think is fair in that regard.
7267 We're not saying "therefore you have to have 7 percent here, and 8 percent there, and 2 percent there". There is an overwhelming concentration of production in English language in Canada in one location, and that's Toronto. And if the regulatory regime of funding doesn't find some way of counterbalancing that, then it won't be another five years before 95 percent of production is in Toronto, and then a lot of people will be moving from Vancouver and Montreal and elsewhere to Toronto because that's where the work is. It's just a spiral.
7268 So we feel that the Official Languages Act, as well as the Broadcasting Act, says that there is a public interest that should not simply allow that laissez-faire spiral to continue unabated.
7269 We're coming here at this moment in time and we'll be coming here at the CBC licence renewal hearing, we came here at the CTV licence renewal hearing --
7270 THE CHAIRPERSON: You won't have to come here, it's in Gatineau.
7271 MR. COX: Well then you won't hear us, because we'll be staying here. But anyway, wherever you are, we will follow you --
7272 MR. COX: -- and try and repeat the comments.
7273 COMMISSIONER PENTEFOUNTAS: There are stalking laws!
7274 THE CHAIRPERSON: That's very clear.
7275 I believe the Vice-Chair has a question.
7276 CONSEILLER PENTEFOUNTAS : Juste pour mettre les choses au clair, votre demande a un motivateur très céphalique. D'abord, vous êtes minorité; deuxièmement, Astral a une base et une histoire et une relation avec la communauté québécoise et montréalaise; et tertio, CTV sus-investissent dans des productions montréalaises ou québécoises. Is that the triumvirate you're working on?
7277 M. SPRY : Oui, mais il y a un quatrième point aussi. C'est que parmi les actifs d'Astral, il y a des actifs anglophones très, très importants qui ne devraient pas être sous-évalués dans l'allocation des bénéfices tangibles, à savoir TMN, Family Channel et Télétoon.
7278 COMMISSIONER PENTEFOUNTAS: I'm including that in the sort of the full Astral relationship with Montreal, and that includes the English community.
7279 Okay. Thank you.
7280 THE CHAIRPERSON: Commissioner Menzies.
7281 COMMISSIONER MENZIES: Just in terms of your argument that benefits be distributed based on location, I know you mentioned something about not having a mathematical formula or something, but how else would we do it? Astral has 18 radio stations in British Columbia, for instance, which nobody's taken on the burden of flying down to represent that, but I'm sure they would have if they could have.
7282 Should that proportion of their radio assets, then, be to British Columbia?
7283 MR. PRUPAS: Well, I think it's a question of principles of business valuations. I do think there ought to be an allocation of assets but certainly on the linguistic basis based on some respect for the value of the current Astral assets. In other words, if they've dedicated 50 percent of their assets to English media and 50 percent to French media, then that would be a reasonable allocation.
7284 The question is, what is the fair valuation of the Astral assets? We don't have, as a lobby group, access to the kind of detailed information in terms of their asset allocations and their values.
7285 I know that PwC did do a report that gave a certain valuation. We question that report and we think that there are details of the financial assets of Astral that are not made public because of privacy laws and, you know, confidentiality arrangements that you have within the CRTC but that are available to you. We would encourage an allocation with the clients to reflect the true value.
7286 Certainly what we feel and see is that an asset like TMN, HBO Canada, is truly and has been for a long time the Crown jewel of the Astral assets, and that is -- while there is an equivalent in Super Écran here in Quebec, TMN alone is a preponderant asset in that group.
7287 THE CHAIRPERSON: Thank you
7288 MR. COX: If I could just add one other thing.
7289 We pointed out in footnote 6 of our speech, as you noticed, our speech is in a chunk of blocks with footnotes, and that one points out to CRTC policies in the past that says that in terms of tangible benefits, there needs to be a balance between support for the broadcasting system as a whole on the one hand, and support for the relevant communities on the other hand.
7290 And you're pointing out that in British Columbia there are relevant communities that need to be supported. We fully agree with that and support that idea. At the same time, clearly in the case of Astral there is a community here that should be supported as well, and we have provided you with some guidelines, the 15 percent to $12 million minimum, to give you an idea of what we think is a fair approach.
7291 THE CHAIRPERSON: Thank you. That's very useful and a good reminder that our 2008 policy has not wiped out every policy we'd issued before then as well, so thank you.
7292 MR. COX: We read them all!
7293 THE CHAIRPERSON: Yes, indeed.
7294 So thank you for your participation.
7295 Just so people know where we're going to be heading with the hearing, we're just going to continue to go with interventions. There may be some slight changes of order, but we'll sit `til about 1:00 and then take about an hour and a half break. So that will help people plan the next couple of hours.
7296 Madame Secretary.
7297 THE SECRETARY: Thank you.
7298 The small switch is that we will now hear the Ryerson University, National Film Board of Canada and the International Communications Technology Council right now, and after we'll hear On Screen Manitoba.
7299 LE PRÉSIDENT : Alors, bienvenue.
7300 As I've mentioned to others, it makes it easier for the transcript for you to identify yourselves, then proceed with your presentation.
7301 We'll just take a second to let the court reporter get back to her desk.
7302 MR. FALZON: Should I go again?
7303 THE CHAIRPERSON: Yes. Go ahead, please.
7304 MR. FALZON: Thank you very much, Mr. Chairman, Mr. Vice-Chairman and Commissioners, for this opportunity to address the proposed acquisition by Bell Media of the Astral assets.
7305 My name is Charles Falzon. I'm Chair of the RTA School of Media at Ryerson University, formerly the School of Radio and Television Arts that has been around for over six decades and graduating people into the media field. As well, I've been a producer and a distributor for nearly three decades myself.
7306 It is my pleasure to be here today with my Ryerson colleague, at the far end, Professor Ramona Pringle, who's also a transmedia producer, and with colleagues from our partners in this proposed initiative:
7307 - to Ramona's right is Deborah Drisdell from the National Film Board;
7308 - to my left is Gerri Sinclair, Senior Innovation Strategist at Ryerson University and Principal of The Gerri Sinclair Group as well as a Web producer herself;
7309 - to my right is Norm McDevitt, VP at the Information and Communications Technology Council, and his colleague Meenakshi Gupta, Director of Policy Development and Research at the ICTC.
7310 This partnership is here today to seek your support for the reallocation of some of the resources in Bell's proposed benefits package to a new initiative.
7311 We are proposing, together, to build a new talent development platform that focuses on innovation and leadership. We will create an environment that nurtures the talent, allowing to flourish outside the confines of the status quo, creating new modules and evolving with the audiences and the changing media landscape.
7312 With the right creative leadership we feel that we can together ensure a strong domestic content industry that serves society in a Canadian way and in so doing will be even more successful around the world. We believe we'll be creating leaders and not followers.
7313 The partnership builds on Ryerson's strength in stimulating creative innovation. We have a long history in developing talent from across Canada through industry partnerships and experiential learning.
7314 Our partnership benefits greatly from NFB's well-recognized paths to global exposure and world-leading reputation for creative and technical innovation in storytelling. It will be further enhanced by ICTC's strength in understanding the labour market needs and equipping Canadians with the most in demand digital skills.
7315 While the three-year project will create the capacity to see a very significant number of people progress through this new pipeline, our aim is to plant seeds that will multiply and will be recreated and proliferate among other institutions across the country as well.
7316 MS SINCLAIR: Thank you.
7317 My name is Gerri Sinclair and indeed it's a great pleasure for me to be here today to have the opportunity to speak to you about my favourite topic these days, a topic about which I'm most passionate, and that is focusing on developing digital skills for Canadian talent and creating new models of innovation and entrepreneurship in the digital economy to ensure Canada's competitiveness on the global stage.
7318 As you are well aware, this transaction, under your existing Diversity of Voices rules, will be among the last of major media transactions in Canada for the foreseeable future.
7319 The available resources that will accrue from this transaction may be some of the last money that can be truly incremental for the system for many years to come. How those benefits are used when the broadcasting system is at a crossroads is of utmost importance.
7320 Creators who have embraced digital have the opportunity to create a new generation of content companies that will compete globally. The communications policies and regulations that support our creative enterprises, while remaining important, will eventually be subsidiary to larger, global market forces.
7321 Capitalizing on new opportunities for economic growth as well as richer Canadian storytelling will absolutely depend on having the right talent in Canada to take on this challenge. Old skill sets, if we are to succeed, need to be bolstered with new ones.
7322 The technologies and business models supporting this rich new ecosystem are in a state of constant flux. The skills that our creative enterprises need are a combination of technological, business and creative.
7323 We respectfully submit that if some of the last major benefits money for the system are to be decided in this proceeding, there is no better time to ensure that some is used in the name of skills development for our creative sector.
7324 This will help ensure that Canadians, Canadian citizens, not consumers, will have access to compelling creative digital content from diverse sources on a variety of platforms, not only in the near term but for years and decades to come.
7325 The labour market surveys conducted by ICTC demonstrate a critical shortage of skilled workers in the digital economy. A program such as what we are proposing here is urgently needed.
7326 MS DRISDELL: Bonjour. Mon nom est Deborah Drisdell. Je suis directrice générale de l'accessibilité et les entreprises numériques à l'Office national du film, et ça me fait plaisir d'être ici aussi aujourd'hui. Merci.
7327 Ryerson, l'Office national du film et le CTIC possèdent le savoir-faire pour préparer les étudiants pour les emplois dans les entreprises créatives de demain. Grâce à le mentorat, une collaboration avec de multiples disciplines visées par le commerce du contenu et au programme de stages d'immersion avec l'ONF, nos jeunes créatifs seront outillés pour relever un défi de classe mondiale.
7328 Tirer profit de cette occasion exigera des ressources qui ne sont actuellement pas présentes dans le réseau. Notre mémoire imprimé décrit un programme triennal de 1,3 million de dollars par année pour préparer les étudiants postsecondaires en arts médiatiques à occuper des postes dans un avenir très rapproché.
7329 Nous cherchons à nous inspirer de la longue et riche tradition de la créativité technique et innovatrice de l'ONF et y ajouter un mentorat par des experts en commerce et en technologie provenant de l'intérieur et de l'extérieur du cadre universitaire.
7330 Avec des ressources suffisantes, nous pourrons nous assurer de la participation de la fine fleur des talents en commerce médiatique au Canada. De plus, nous pourrons construire un prototype qui sera échelonnable et transférable à toute l'industrie, et parfois même le monde.
7331 Il s'agit d'un partenariat industriel et universitaire qui mènera à la mise au point d'une plateforme à partir de laquelle on propulsera les talents canadiens dans un marché mondial de l'innovation.
7332 Plutôt que de reproduire des programmes d'alternance travail-études ou de coop qui sont existants, l'intention des partenaires est d'ériger un programme qui fournira aux créateurs de demain un rôle très immersif, pratique et responsable dans la mise au point des produits et leur permettra d'en ressortir prêts à répondre aux demandes du futur marché du travail dans le secteur des médias.
7333 Le Canada compte actuellement pour 3 pour cent des recettes médiatiques mondiales. La possibilité qui existe, si nous possédons les bonnes compétences techniques, commerciales et créatrices, est d'ajouter 12 milliards de dollars à l'économie pour chaque pourcentage de plus de ce marché que nous pouvons saisir. Les compétences et les talents sous-tendent cette possibilité.
7334 MR. FALZON: The proposals made by Bell for the disposition of the required incremental benefits have a great deal of merit. However, we respectfully suggest that the opportunity exists today for the Commission to ensure that the benefits are tweaked so that they are focused on talent, on the innovative people who are going to lead us in the future.
7335 We are excited about the future of broadcasting. We actually think that the potential is greater now than ever before and we feel that we have built an amazing foundation in this country over the years, but now, we must no longer depend only on corporate infrastructure and on regulation. We must focus on the innovative talent that is actually able to do amazing things and will lead the way.
7336 It is time for us, we suggest, to be leaders rather than followers and this is an opportunity and a responsibility.
7337 So thank you very much for listening to us and we are happy to entertain questions.
7338 THE CHAIRPERSON: Thank you.
7339 Commissioner Denton, please.
7340 COMMISSIONER DENTON: Unlike my learned colleague the Chairman, I did not spend my summer reading all the proposals, so I'm going to give you free national airtime to describe a bit further what your program is, where it would take place or what places it would take in, and how it would work.
7341 MR. FALZON: Happy to do so.
7342 In broad strokes what we first bring to the table, as you know, is at Ryerson we have experiential learning and a syllabus and all of that. That's there already. NFB has an incredible infrastructure and creative development already.
7343 We feel that in these pioneer times a syllabus is not enough, a typical university program is not enough, neither is a corporate structure that is limiting.
7344 What we plan to do is to stimulate an environment and have talent that is chosen with ideas and let them be free, working with industry, with partners, with creative talent, but in a way that they can dare to explore, dare to experiment, that they're not suffocated right away as soon as they graduate from a program and then all of a sudden have to earn money in a typical way and feed the pipeline as it is.
7345 It is that environment where the talent within both our organizations and other industry and creative talent with be encouraging, nurturing the dreams and creative visions of the individuals.
7346 Further to that, parallel to that, we will also be helping them in skills as well and as they explore the digital literacy, the digital capacity and the experimentation.
7347 Would you like to add to that, Deborah?
7348 MS DRISDELL: Yes. And I think our view is that the students would be coming and -- support at Ryerson but that with the National Film Board we do have studios across the country. Our digital studios are primarily in Vancouver and Montreal, but we would be able to immerse these young creators into the offices across the country.
7349 COMMISSIONER DENTON: How long would your student be in the program?
7350 MR. FALZON: It will vary depending on the project they propose and we're not even like necessarily limiting it, but it could be as short as a two-month project or it could be a whole year. It depends on the magnitude.
7351 And it's not one student. It could be a student bringing in a team and ideas and an ideation lab to come up with ideas that are actually going to morph and change while they're in the program.
7352 COMMISSIONER DENTON: And what number of students/trainees do you contemplate putting through the program?
7353 MR. FALZON: It's more a question of -- what we assess right now, estimate right now is the number of projects per year. So we're thinking 20 but it could be bigger if they're smaller projects and smaller ideas.
7354 Those 20 would not be individuals. Some would be individuals but they're likely to be, you know, groups of 10 or 15, and very quickly there's the multiplier effect because they will bring in more people to act on something innovative and they can afford to bring this talent in even though it's not necessarily commercially viable at the moment.
7355 The idea is to actually have a place where they can think out of the box, right?
7356 If I may, at the prime time of the CMPA last year we had a panel with half a dozen students or ours, graduating people who were in this space, and they were talking to this whole room of industry people about their ideas. They dazzled them.
7357 What concerned me was, first of all, why are they dazzling them? They have ideas. They have innovative thoughts.
7358 Secondly, what concerned me is in a day or two they're going to go work in that space and will those dazzling ideas be suffocated and stopped?
7359 We're providing a step. We're providing a step to say here's an incubation place where you can do this.
7360 COMMISSIONER DENTON: So, since it would be contrary to your interests for us not to approve this transaction, therefore, your words on the value of whether we should -- your advice on whether we should approve this Bell-Astral transaction would be gratefully received if you wish to give us any.
7361 MR. FALZON: We represent various interests with various points of view, and as a university, academic freedom is diverse on all sorts of issues. Where there is real unity is that any transactions that are accepted and approved have to in a way find some funding supporting not the present but the future and that's what we really are committed to.
7362 So we respectfully, you know, focus on that element rather than the actual intricacies and debates and restraints that you may or may not put on the deal.
7363 COMMISSIONER DENTON: Good catch. Thank you.
7364 THE CHAIRPERSON: Thank you.
7365 As you know, I've been asking questions about vision. I could not not ask this panel those sorts of issues because I think you bring a different perspective, an academic perspective. We've got the Film Board, which is our -- in a sense Canada's research and development arm of audiovisual, and Miss Sinclair, who's done a lot of public policy thinking in the past.
7366 So, as I've been asking others, 2017, what does the Canadian communication system look like? Unfortunately, you have to do it quickly.
7367 MR. FALZON: Okay. Well, I'll start.
7368 It's obviously not going to be the way it is today but we're all going to be at the table. There will be the publishing infrastructures and the importance and needs of these organizations that are delivery systems.
7369 But in reality, today, not in 2017, if you ask the average person that we deal with regularly under 30, they're not just youth connecting in broadcasting through the daily stuff. So the creative opportunity and the creative leadership --
7370 Where did Facebook come from? It didn't come from a typical syllabus. It didn't come from a typical institution. Where did the record companies go wrong, you know, and so on so forth.
7371 We want to be -- we feel there's a responsibility to be at that table and nurture that, and that will -- it's a pioneer time. We don't know exactly what the future is going to be, but we know it will be a greater one if we have talent out of this country that's thinking ahead rather than following either the corporate agenda only or the U.S. strategy as it's developed by the Majors.
7372 MS SINCLAIR: We certainly feel at the Film Board a new technology and this entire change in consumer behaviour and in production values. There's a bit of a democratization of the creative process.
7373 What's really fundamental, I think, in the next five years is that there's still a strong taste for good quality storytelling, perhaps in a different way that we do it now with linear or non-liner, but there's still professionalism to content, it's not all about shooting at yourself and going on YouTube. We need to bring the skill set up so that that storytelling is still there.
7374 I think in 2017 creative media may have a completely different view to it and we have to ensure that our young creators have all that facility to learn that, to innovate in there and also learn to work within a system because the financial survival of this system is key also on giving that structure, of going global, firstly -- you know, there's very few -- much less borders -- and to have that innovation.
7375 So that key to developing the skill set of innovation to us is essential as we move forward because I think media will completely shift, probably at a speed that we're not even seeing yet.
7376 MR. FALZON: Ramona, did you want to add anything to that?
7377 MS PRINGLE: Sure. I'm Ramona Pringle.
7378 I'll add to that last comment perhaps just by commenting on the urgency for innovation in that we're in a world that is, especially in the media landscape, so intertwined with technology, and technology doesn't advance at a linear pace.
7379 Technology advances at an exponential pace, which means that the patterns of the last 10 years won't prepare us for predicting the patterns of the next 10 years. They might prepare us for predictions of the next year and a half because of the way technology grows.
7380 So what's important to note at this stage is even if you look at how the Web has grown, we went from 1.0 in information search to 2.0, which was social networking, and even looking towards 3.0 people were conversing about what Web 3.0 is, but Web 3.0 won't even be the Web.
7381 We're moving so fast that Web 3.0 has actually moved to mobile. We're moving so quickly that this conversation of 2017 isn't looking at the equivalent of what five years behind us were but a much more accelerated model.
7382 And currently the digital media production that we see in our industry is predicated by broadcast triggers, but the thing is that broadcasters still need to use the metrics of today and we can't be limiting what's going to be an industry five years from now based on today's metrics.
7383 So we need to have a space that exists outside of industry whereby we can innovate and we have a space that will prepare content four-five years from now.
7384 MS DRISDELL: My vision of the future is either utopic or dystopic depending on how we prepare our talent for it.
7385 And I think, basically if you want me to talk about what's happening in 2017, the new revolution that's upon us is the revolution of wireless sensor networks that will be even more disruptive than the revolution of the Internet when we not only have people talking to people but people talking to machines, machines to machines, and machines to people.
7386 And so when you talk about the communication ecosystem it's about to go through an exponential explosion that we are not really prepared for at all. And, you know, there are things like robotics and implants and all kinds of things that you can only imagine, that sound like science fiction, but they will be upon us very quickly.
7387 So ultimately the question is will our Canadian citizens be equipped either as participants in this new world, this new digital economy, will they be equipped to participate and to engage, and, from our perspective of this panel here, to create the kinds of experiences that our citizens deserve?
7388 And so I think that we're a bit sleepwalking into the future right now from my perspective, and from a public policy perspective I think Canada has sat on its laurels for too long in terms of ignoring preparing our youth for the digital economy. We do not have a digital economy strategy yet and it's about time that we did.
7389 THE CHAIRPERSON: Thank you very much for that and it's very succinct.
7390 Did you want to add anything?
7391 MR. McDEVITT: Yes. I'm just going to add that we have the same perspective on this. We think the opportunity now is right for this.
7392 The chance for talent to blend not only the creativity of Canadians but use that with the opportunity with the new technology. That intersection point is now for us. As my colleague says, it's an opportunity that's so great right now, a pioneering time.
7393 What we see is Canadians will have the opportunity not only to do this experiment -- and I'm using the language of an experiment -- by working with Ryerson and their innovative and entrepreneurship skills and academic background and an environment in the National Film Board to allow individuals to create a whole new landscape of companies and jobs so that Canada can actually take the market and export it outside of all the creativity that we have.
7394 THE CHAIRPERSON: Ms Gupta, do you want to add something?
7395 MS GUPTA: No, I am good.
7396 THE CHAIRPERSON: You're good? Okay.
7397 Well, thank you. It looks like we may have to wear seatbelts and helmets at future CRTC hearings because it looks like a bumpy ride driving into the future that way. So thank you very much for your appearance. Very useful.
7398 And we'll now go to the next intervention, please.
7399 MR. FALZON: Thank you.
7400 THE SECRETARY: Thank you.
7401 I would now ask On Screen Manitoba to come to the presentation table.
7402 LE PRÉSIDENT : Bonjour et bienvenue. Je vois des visages familiers. Néanmoins, je vais vous demander de vous identifier pour les fins de la transcription et de faire votre présentation.
7403 MME MATIATION : Bonjour. Je m'appelle Nicole Matiation. Je suis la directrice générale de On Screen Manitoba.
7404 M. PAQUIN : Moi, je suis Louis Paquin. Je suis producteur francophone au Manitoba.
7405 MME MATIATION : Monsieur le Président, membres du Conseil et membres du personnel, comme vous le savez, comme vous le savez, On Screen Manitoba est l'association professionnelle de l'ensemble de l'industrie de production des médias de l'écran dans notre province. Nos membres comprennent des scénaristes, des réalisateurs, des producteurs, des guildes, des syndicats, des fournisseurs de services, des festivals de films et autres organismes et individus ayant un intérêt dans le secteur au Manitoba. Parmi nos membres se trouvent des individus des milieux anglophone, francophone et autochtone.
7406 On Screen Manitoba is concerned by the level of concentration of ownership this transaction represents and it urges the Commission to consider appropriate conditions of licence to mitigate this should the transaction be approved.
7407 We believe that conditions of licence concerning this transaction should uphold the Canadian Broadcasting Act in such a way to ensure diversity of voice in terms of both market share and content and to ensure production employment opportunities for Canadians in all regions of Canada in both official languages.
7408 On Screen Manitoba croit que les producteurs indépendants en région, anglophones comme francophones, jouent un rôle clé dans la production d'émissions de qualité et qu'ils contribuent de façon significative à la diversité de la programmation en ondes.
7409 While On Screen Manitoba is concerned by the level of concentration of ownership that the Bell purchase of Astral represents, we are pleased to note that Bell has increased its benefits package by $41 million, bringing the total tangible benefits amount to $241.3 million.
7410 We note also that Bell has suggested a 7-year licence term, which represents an improvement over the 10-year term originally proposed.
7411 On Screen Manitoba recognizes that in its proposal regarding the acquisition of Bell, it seeks to demonstrate a commitment to support Canadian creators. On Screen Manitoba also notes that both Bell and Astral have entered into the terms of trade agreement and welcomes Bell's commitment to uphold the terms of the trade and the program of national interest levels established for each group during the recent group license renewals.
7412 Our particular concern in regard to the English-language portion of this transaction is the loss of an independent buyer of Canadian content, one that is highly valued for its commitment to independent Canadian programming in our genre and in particular in terms of feature film and children's formats.
7413 We are encouraged by Bell's stated commitment to maintain the Harold Greenberg Fund and its programs, and we note that Bell has a strong track record in supporting independent Canadian productions through the Bell Fund.
7414 The Canadian broadcast system has seen a periodic influx of funding as a result of tangible benefits packages in the past, and in its initial submission, Bell cited the need to manage these highs and lows of available funding by extending the period of the license renewal; originally ten years, now suggested to be seven.
7415 It is our belief that a more efficient means of addressing the highs and lows of funding for original content in the Canadian broadcast system would be through the investment of tangible benefits in independent third-party-managed funds with proven track records, such as the Independent Production Fund.
7416 We believe that enhancing a third-party-managed fund would result in a higher level of diverse original Canadian content, as these funds support independent production in both English and French in all regions of Canada.
7417 We also wish to emphasize that all tangible benefits disbursements should be incremental throughout the license period agreement.
7418 On Screen Manitoba urges the Commission to therefore impose an annual transparent reporting requirement on Bell as a condition of license. Through this reporting process, Bell should be expected to demonstrate its commitment to becoming a truly national broadcaster that supports independent Canadian production by clearly demonstrating the benefits flowing from both the recent CTV transaction and the current Astral transaction are resulting in the acquisition and commissioning of incremental independently produced Canadian programming in all regions and in both official languages.
7419 On Screen Manitoba joins many others in urging the Commission to reject Bell's proposed use of tangible benefits to make non-incremental, non-broadcast capital improvements.
7420 Other proposed uses of tangible benefits might fit a social benefits model but should not be considered as On Screen benefits.
7421 The Commission's standard obligation is to direct a minimum of 85 % of tangible benefits to the commissioning and acquisition of original independent Canadian content and we see no reason to meet less than the minimum standard in this case.
7422 On Screen Manitoba agrees with others that On Screen benefits should (inaudible) primarily to independent Canadian feature film and new Canadian programs for children and youth, and in all genres of documentary fiction. These two areas represent the focus of Astral's programming and the Commission requires that benefits resulting from a transfer of ownership must yield significant and unequivocal benefits to the communities they serve.
7423 These are also true of the programming categories that have seen a significant decline, according to the CMPA's most recent annual state of the industry report, profile 2011.
7424 While a number of large ownership transactions have occurred recently, none have resulted in a direct benefit to independent feature film and children and youth production. The purchase of Astral represents a special opportunity to ensure robust support for these two areas of production.
7425 On Screen Manitoba understands that there are several approaches to determining a fair approach to allocating tangible benefits to Anglophone and Francophone production. Telefilm and the CMF, for example, use a 2/3, 1/3 split. Others at this hearing have proposed a 60/40 split.
7426 On Screen Manitoba would support tangible benefits along any of these lines, up to a 50/50, in recognition of Astral's historic ties to Quebec and Francophone production.
7427 But we are not convinced that a Montreal-based all-news service is a good use of Francophone tangible benefits.
7428 On Screen Manitoba is a fervent defendant of local programming, but only if it extends to all genres and includes independent producers living in all regions of Canada.
7429 Speaking frankly for a moment as a bilingual viewer/consumer, if you like, living in a regional centre, I remain unconvinced of the need and indeed of the value of another news service based in a major metropolis.
7430 What I find to be in short supply are big picture stories, whether factual or fiction, produced from the perspective of my region.
7431 On Screen Manitoba firmly believes that the independent producers who choose to live and work outside of major metropolises can produce programs of national interest that will meet every requirement of quality and efficiency.
7432 However, our producers face a geographic handicap and lack of regular access to programming executives.
7433 Primary results of a study we commissioned and look forward to sharing in full once it is completed, appear to confirm a pattern of chronic underspending by public funders in the regions, when we are looking at the Prairie regions specifically. Which in turn suggests a pattern of fewer and/or smaller budget license agreements with broadcasters, whether public or private.
7434 We believe that this pattern could be mitigated through strong action by the CRTC. While in Manitoba and other provinces, we might prefer regionally-based commissioning editors or regionally-based broadcasters, we are most concerned with establishing conditions of license for both Anglophone and Francophone productions that would require -- in this case, Bell to demonstrate incremental spending on the development and production of independent Canadian content in all regions of Canada and the creation of a pre-development fund to be managed by an existing third-party fund, such as the Independent Production Fund.
7435 In fact, the Bell Fund itself provides a potential model for an effective development fund, as explained in a recent annual report. The development program set up in 2001 resulted in 210 digital media projects that have been awarded grants of $7.4 million. The development program relies on interest generated by BCE/CTV benefits endowments, as well as BDU contributions.
7436 En ce qui concerne le marché francophone spécifiquement On Screen Manitoba constate que les producteurs indépendants francophones hors-Québec et vivant dans un contexte de communauté de langue officielle en situation minoritaire font face à davantage d'obstacles pour faire entendre leurs voix sur le plan national.
7437 Nous demandons vivement à la Commission d'imposer une condition de licence qui exige qu'une portion des bonifications destinée au marché francophone soit dirigé vers le développement et la production de long-métrages indépendants et de nouveaux programmes pour les jeunes, en tous genre encore une fois, documentaire comme fiction, réalisée par des producteurs francophones vivant et travaillant (inaudible).
7438 Rappelons que les conditions de licence imposées lors de l'achat de TVA par Quebecor ont établi un précédent efficace pour déterminer un pourcentage raisonnable de bonification à diriger vers les productions hors-Québec.
7439 De plus, suite à notre soumission à la Commission en août et à des discussions avec des producteurs francophones dans les autres régions dans les dernières semaines, On Screen Manitoba a reçu une lettre de la part de l'Alliance des producteurs francophones canadiens soutenant notre position vis-à-vis des conditions de licence prenant en compte les producteurs francophones vivant et ouvrant en francophonie canadienne.
7440 In its original application to the CRTC, Bell proposes to become a leading national media player in both languages and on multiple digital platforms.
7441 In light of this intention and in recognition of the basic principles of the Canadian broadcast system, On Screen Manitoba strongly urges the Commission to direct Bell to invest a minimum of 85 % of its tangible benefits package towards the development and production of independent feature film and children's and youth production, in all genres, by independent Canadian producers, both Anglophone and Francophone, who live and work in all regions of Canada.
7442 To conclude, this package should reflect conditions of license that serve to reinforce the key role played by regional producers who reflect the linguistic and cultural diversity of Canada.
7443 Thank you for the opportunity to speak. Merci.
7444 LE PRÉSIDENT : Merci beaucoup pour votre participation. Le -- Monsieur le vice-président de la radiodiffusion aura des questions pour vous.
7445 CONSEILLER PENTEFOUNTAS : Merci, Monsieur le Président.
7446 Bonjour -- merci.
7447 MS MATIATION : Bonjour.
7448 CONSEILLER PENTEFOUNTAS : D'abord, vous avez mentionné une préoccupation quant à la concentration de la propriété et le fait qu'on était pour perdre un acheteur indépendant dans le cas d'Astral.
7449 Nonobstant cette préoccupation-là, vous pensez que les avantages tangibles peuvent remédier les dommages causés par cette concentration.
7451 MS MATIATION : Excusez-moi.
7452 Oui, on croit que c'est possible d'organiser les bonifications d'une façon à ce que cela réduise l'impact, disons. En prenant en compte les défis particuliers des producteurs francophones et anglophones vivant en région.
7453 CONSEILLER PENTEFOUNTAS : Avant de rentrer dans les détails des avantages et des initiatives proposées par On Screen Manitoba, revenons sur un portrait plus global. Vous avez entendu TELUS aujourd'hui déclarer que c'est même pire. Plus qu'on met envers les avantages tangibles, plus que cela contamine, en quelque sort la santé du marché et le pouvoir du marché que Bell aura, suite à l'acquisition.
7454 Est-ce que vous êtes préoccupée -- au-delà de votre membership, est-ce que vous êtes préoccupée par les difficultés, les dommages que cette acquisition peut -- et les résultats de cette acquisition sur le consommateur et sur le système, et l'équilibre du système dans son ensemble?
7455 MS MATIATION : Je crois que -- d'abord, on revient -- on est obligé de revenir sur comment sont dispersés ces bonifications pour mettre en place un système qui va réduire autant que possible la concentration des propriétés.
7456 Et c'est pour ceci qu'on propose qu'une idée à considérer, c'est que les bonifications soient prises en charge par un fonds indépendant géré par une tierce partie.
7457 CONSEILLER PENTEFOUNTAS : OK.
7458 Vous avez fait mention de cela dans votre document de plus tôt cette année; vous êtes contre l'investissement à Northwestel?
7459 MS MATIATION : Oui, c'est cela. En ce qui -- c'est absolument une excellente idée d'améliorer l'accès à l'internet dans le Grand-Nord, mais en tant que -- du point de vue des bonifications destinées à soutenir la production canadienne, on croit qu'on ne devrait pas réduire le montant afin d'organiser le --
7460 CONSEILLER PENTEFOUNTAS : (inaudible)
7461 MS MATIATION : Oui; c'est cela.
7462 CONSEILLER PENTEFOUNTAS : Dans votre mémoire - cela n'a pas été indiqué aujourd'hui - mais dans le mémoire que vous avez déposé plus tôt cette année, vous avez également exprimé une inquiétude quant à des initiatives vers des festivals de films.
7463 MS MATIATION : Encore une fois --
7464 CONSEILLER PENTEFOUNTAS : Vous voulez élaborer? Oui?
7465 MS MATIATION : Oui. Encore une fois, ce type de bonifications reste plutôt au niveau social, et notre première préoccupation, c'est de s'assurer qu'il y a davantage d'opportunités pour la production de contenu canadien.
7466 CONSEILLER PENTEFOUNTAS : OK.
7467 Et en indiquant que vous voulez qu'une grande partie de ces sommes-là soient dépensées dans des long-métrages et des émissions pour enfants; vous voyez qu'il y a un manque dans ces deux domaines-là? Et c'est cela qui justifie ou motive cette dépense-là?
7468 MS MATIATION : C'est cela, et aussi à cause du fait -- de la longue histoire qu'Astral a à soutenir ce genre de projet et on voudrait s'assurer que cela continue.
7469 CONSEILLER PENTEFOUNTAS : Et d'après vous, cela doit être 50/50 anglais/français, ou est-ce que --
7470 Parce que vous vous êtes -- vous avez pris vos distances avec la façon que ces sommes ont été dépensées de par le passé par 1/3, 2/3 ou 60/40, mais 50/50. Voulez-vous retirer cela?
7471 MS MATIATION : Quand on est dans ces zones-là, on est à l'aise que ce soit un 60/40 ou un 50/50 ou -- on est à l'aise avec ce genre de chiffres.
7472 CONSEILLER PENTEFOUNTAS : Et est-ce que vous voulez qu'une partie de ces sommes-là soit dépensée dans des communautés linguistiques minoritaires, que ce soit les Francophones de Manitoba ou les Anglophones de Montréal, comme nous avons entendu plus tôt ce matin?
7473 MS MATIATION : Oui; c'est cela. Et on voudrait également qu'une partie de bonifications anglophones se retrouvent dans les régions comme le Manitoba ou d'autres provinces.
7474 CONSEILLER PENTEFOUNTAS : Francophone ou anglophone?
7475 MS MATIATION : Les deux.
7476 CONSEILLER PENTEFOUNTAS : Les deux? OK.
7477 Et également, dans le mémoire que vous avez déposé plus tôt cette année, vous avez parlé d'une bonification de 7 million vers la production de programmation musicale en français. Vous n'avez pas fait mention de cela ici, aujourd'hui?
7478 MS MATIATION : Non; je ne suis pas rentrée dans autant de détails, mais on trouvait que cette bonification était tout à fait raisonnable.
7479 CONSEILLER PENTEFOUNTAS : Vous nous parlez un petit peu de comment se porte cette dernière au Manitoba, par exemple.
7480 MS MATIATION : Bien, on n'avait pas réfléchi autant du point de vue manitobain, sauf du point de vue que le Manitoba a une forte industrie musicale donc un soutien pour les émissions de variété musicale est toujours le bienvenu.
7481 CONSEILLER PENTEFOUNTAS : Est-ce qu'on peut -- pour revenir sur les productions, soit de longs-métrages ou des émissions pour enfants; est-ce qu'on peut presqu'exclure Toronto, si on tient compte du fait que Toronto, c'est comme un véritable pôle d'attraction. Un autre groupe a parlé de 70 pour cent des productions qui se font à Toronto.
7482 Est-ce que vous voyez une manière, une recette par laquelle on peut encourager les productions en région?
7483 Vous avez parlé de cette problématique, mais au niveau des solutions, est-ce que vous avez une recette --
7484 MS MATIATION : Oui; c'est quelque chose qu'on a mentionné. On a vu avec des fonds indépendants; on a vu quelques succès. On peut --
7485 Dans le mémoire qu'on a déposé, par exemple, on avait regardé la Harold Greenberg Fund.
7486 CONSEILLER PENTEFOUNTAS : Oui.
7487 MS MATIATION : Et aussi bien, surtout pour les productions anglophones mais dernièrement pour les productions francophones, on a eu du soutien au Manitoba pour les longs-métrages.
7488 Donc il y a potentiellement des modèles de ce point de vue-là.
7489 Mais on est d'accord qu'on voudrait regarder des incitatifs et non pas des obligations qui pourraient suggérer qu'on n'est pas capable de réaliser au même niveau que les gens qui choisissent de vivre à Toronto, Montréal ou un autre grand centre.
7490 M. PAQUIN : Je peux ajouter?
7491 CONSEILLER PENTEFOUNTAS : Oui, oui, certainement.
7492 M. PAQUIN : Peut-être qu'un des points, ce serait comme -- une des préoccupations, c'est des gens hors de Toronto, de Montréal; c'est que la capacité des régions de fournir des contenus dans ces catégories-là. Je pense que si les avantages tangibles puis ces choses-là sont dispersés dans les premiers cinq, six ans plus en région, cela va bâtir les compétences en région. Et dans cinq, six ans, on pourra voir un meilleur équilibre au niveau de fournir des contenus dans ce contexte-là.
7493 CONSEILLER PENTEFOUNTAS : C'est intéressant. Bien, on a commencé au niveau de la durée de ces avantages. On n'a pas commencé à dire si on est peut-être rendu à sept.
7494 Moi, j'ai même fait mention du fait que les renouvellements maintenant se font à cinq ans et ils risquent de se faire à trois ans.
7495 Vous n'auriez pas d'objection à ce qu'on exige à ce que ces sommes soient dépensées dans les cinq premières années?
7496 MS MATIATION : Pas du tout.
7497 M. PAQUIN : Et peut-être même une formule par laquelle on peut dépenser ces sommes en région même plus rapidement.
7498 MS MATIATION : Bien, c'est une excellente idée.
7499 CONSEILLER PENTEFOUNTAS : Une espèce de front-loading, si vous permettez l'expression anglaise.
7500 LE PRÉSIDENT : C'est une très bonne expression.
7501 CONSEILLER PENTEFOUNTAS : Alors merci, Monsieur le Président; cela complète pour moi.
7502 LE PRÉSIDENT : Merci. La Conseillère Lamarre s'il vous plaît?
7503 CONSEILLERE LAMARRE : Merci; bonjour.
7504 Deux questions à la page 4 de votre présentation ce matin.
7505 Vous faites référence à la proposition qu'a faite Bell en début de semaine de mettre en place un service de nouvelles françaises à partir de Montréal et vous estimez que ce n'est pas une bonne façon d'utiliser les bénéfices tangibles.
7506 Est-ce que c'est parce que vous estimez que ce n'est pas une bonne façon de le faire dans le contexte ou que de toute façon, que ce soit un service de nouvelles basé à Montréal en français ou en anglais ou basé ailleurs; fondamentalement, c'est le genre d'activité qui ne devrait pas être financé par les avantages tangibles.
7507 M. PAQUIN : Oui; je pense que c'est cela qu'on dit.
7508 CONSEILLERE LAMARRE : OK; merci.
7509 M. PAQUIN : On ne pense pas que c'est -- ce modèle-là rentre pour financer les nouvelles puis des choses comme cela.
7510 CONSEILLERE LAMARRE : Maintenant, à la page 5, lorsque vous parlez d'avoir un système de développement pour s'assurer que la production indépendante est développée à travers toutes les régions du Canada. Comment vous les définissez, les régions du Canada? Est-ce que vous les définissez par province et territoire ou vous les définissez autrement?
7511 Nous, on a une définition; le CRTC, les conseillers régionaux; on a chacun nos régions. Mais est-ce que c'est comme cela que vous l'envisagez ou c'est autrement?
7512 MS MATIATION : Bien, c'est toujours une question un petit peu pointilleuse, c'est sûr.
7513 Le CMF et Téléfilm ont leur façon de voir les régions et j'imagine que cela pourrait être un départ.
7514 CONSEILLERE LAMARRE : Donc ce serait probablement la même définition que le CMF?
7515 MS MATIATION : Ce serait un point de départ logique.
7516 CONSEILLERE LAMARRE : Ce serait un point de départ logique? Merci beaucoup. Ce sont toutes mes questions.
7517 LE PRÉSIDENT : Merci beaucoup. Une seule question pour moi et plus pour Monsieur Paquin, basé sur votre historique et votre connaissance du secteur de la production francophone en situation minoritaire.
7518 Historiquement, est-ce qu'Astral a été une fenêtre, une opportunité pour vous par le passé?
7519 M. PAQUIN : Ils ont -- personnellement, oui; j'ai eu des relations avec Astral par rapport à quelques projets, puis il y a eu d'autres productions avec Vancouver que je connais; il y a en a eu quelques-unes. Cela n'a pas été énorme mais c'est -- il y a un début. Mais nous, on pense que cet exemple de TVA que le CRTC a fait par rapport à un pourcentage des avantages tangibles était désigné pour la production qui émanait des régions. C'est un incitatif important pour les diffuseurs de commencer à concentrer et explorer ces projets-là qui émanent de l'extérieur de Montréal.
7520 LE PRÉSIDENT : Les exemples auxquels vous pensez, soit les vôtres ou de vos confrères producteurs, est-ce que cela remonte à très longtemps pour c'est plus récent?
7521 M. PAQUIN : Non; c'est assez récent.
7522 LE PRÉSIDENT : OK. Mais vous quand même peur --
7523 M. PAQUIN : (inaudible) de trois, quatre heures, je dirais.
7524 LE PRÉSIDENT : Disons que vous avez quand même peur qu'avec la fusion, que ce comportement-là ne pourrait peut-être pas continuer?
7525 M. PAQUIN : Je pense que s'il n'y a pas de signal de la part du CRTC par rapport à une volonté de voir un contenu qui émane de cet espace-là, que cela risque d'être négligeable, l'impact qu'on aurait.
7526 LE PRÉSIDENT : C'est clair; merci.
7527 Je ne crois pas que nous avons d'autres questions. Donc merci beaucoup pour votre participation aujourd'hui aux audiences. Merci beaucoup.
7528 Now we were going to -- I did say earlier we would go until one o'clock. But the next presenter has a video set up to do, so instead, we will take a break now. We will break for an hour and fifteen minutes. So we will be back here at two o'clock.
7529 Donc nous ajournons jusqu'à deux heures. Merci bien.
--- Upon recessing at 1245
--- Upon resuming at 1403
7530 THE SECRETARY: Please take your seats.
7531 LE PRÉSIDENT : A l'ordre, s'il vous plaît.
7532 Madame la secrétaire?
7533 LA SECRÉTAIRE : Merci. J'aimerais débuter en annonçant que l'Association des professionnels de l'Édition musicale nous ont annoncé qu'ils ne comparaîtront plus à l'audience publique. Ils étaient supposés comparaître aujourd'hui.
7534 So, now, I would ask you Youth Emage Jeunesse to present themselves and you have ten minutes for your presentation.
7535 Thank you.
--- VIDEO PRESENTATION
7536 MR. LÉVESQUE: As you can see, youth need a voice.
7537 La jeunesse a besoin d'être entendue. Ce vidéo est un exemple de ce que les jeunes peuvent faire avec un peu d'encouragement et avec un peu de support.
7538 LE PRÉSIDENT : Je peux vous interrompre deux secondes. Pour les fins de la transcription, c'est bien important de vous identifier.
7539 Me LÉVESQUE : Tout à fait.
7540 LE PRÉSIDENT : Donc, avant de commencer.
7541 Me LÉVESQUE : J'y arrivais tout de suite après.
7542 LE PRÉSIDENT : Ah! O.k. D'accord.
7543 Me LÉVESQUE : Merci bien. Alors, mon nom est Claude Lévesque. Je suis directeur général de l'Organisation Youth Emage Jeunesse et à côté de moi il y a monsieur Michel Canuel, chef de la Direction de Learn.
7544 Youth Emage Jeunesse est un organisme à but non lucratif qui utilise les médias comme moyen, les nouveaux médias comme moyen de dynamiser les jeunes et de leur offrir des opportunités de pouvoir s'exprimer et de participer aussi dans leurs communautés.
7545 La plupart des jeunes avec lesquels on travaille sont âgés entre 15 and et 24 ans et nous travaillons en collaboration avec des organismes publics, privés, dans le milieu scolaire et aussi des organismes para-publics.
7546 What I would like to bring, what we would like to talk about today is, first of all, our position regarding the CRTC. We are not here to be for or against the transaction per se.
7547 What we are here to talk about is the tangible benefits if the transaction goes through. In that regards we want to bring to your attention certain things that we think that you should remember about the tangible benefits, first of all.
7548 Also, we want to make sure that you understand what our message is and, finally, we will explain to you what we bring to the table in terms of possible avenues, as you consider the tangible benefits packages by the parties involved in the transaction.
7549 In terms of what the tangible benefits are or can't be, one thing that we strongly believe is that youth can actually be a tangible benefit for the broadcasting industry and for the broadcasting system.
7550 And that can be done if we use the resources available right now to start building and preparing for the future instead of reacting.
7551 To quote a gentleman that you well know who, in 1998, in a Standing Committee on the Canadian Heritage, monsieur Blais, mentionned regarding a transaction where he mentioned:
"Often times when considering those transfers, talking about mergers and restriction in the industry, it involves significant tangible benefits to the broadcasting industry where money is injected, either in Canadian programming or other objectives that the Act has identified."
7552 And one of those objectives that the Act has identified that we believe that we need to consider not only from the broadcasters' point of view, but also from the public and especially from the youth's point of view is, first of all, the question of strengthening the cultural and social fabric of Canada and youth can be at the forefront of that.
7553 And second of all, encouraging and developing a program that reflects the Canadian attitudes, opinions, values and artistic creativity.
7554 Those are two examples of the things that as a country we have set up as a policy and that we think that youth can be used and can be on the forefront to that effect.
7555 This being said, we have to consider that there has been a paradigm shift over the last few years and consideration of how the internet has affected counting creation.
7556 More specifically, the internet has made it possible for anybody to create content, to publish it and to have a viewership, however small it is.
7557 Youth are at the forefront of that wave of movement. They are really on the web doing that kind of stuff and creating content and one thing that we propose to do is to help them refine and define that creation of content. There is more to a content creation than having a YouTube account and having a cell phone.
7558 However, for that to happen for the youth to be able to use the tools and the resources that are available in the Broadcasting Industry, we need to make sure that their voice is heard.
7559 La jeunesse a besoin d'être entendue. Donc, notre message est quand même assez simple. C'est à l'effet que la jeunesse a besoin d'avoir une voie et d'être entendue parce qu'elle veut participer. Elle veut être écoutée, elle veut être vue et sue. Et si nous utilisons les bons outils pour le faire, nous pouvons créer la prochaine génération de James Cameron ou de Lisa Laflamme.
7560 Mais pour cela, il faut leur donner les moyens de pouvoir le faire, sinon les jeunes vont se retirer et se retrouver, si vous me permettez l'expression anglaise, on the fringes of the media consummation.
7561 Et pour pouvoir changer ce genre de chose-là, une des choses que nous apportons ici c'est notre expérience avec les jeunes. Nous avons eu la chance déjà dans le passé de profiter de sommes distribuées grâce à justement un package of tangible benefits from Québecor a few years ago, where we were able to create programs and activities that use collaborative approaches to bring together members of the industry, producers, writers, cameramen, people on and off the screen to help and develop and nurse your talent.
7562 And with my colleague Marco Canuel, there is a few things that we want to bring to your attention.
7563 MR. CANUEL: Good afternoon everybody. My name is Marco Canuel, I am the CEO or Learn. Learn is a non-profit educational organization with the mandate to serve the educational community of Quebec.
7564 We do this by providing a wide variety of services and resources, many of which are accessed through our on-line Content Management System. Last year, we had over 15 million visits on to our site, we trained over 4,000 teachers, we've provided real time on-line tutorials to over 5,000 students and on a daily basis, we teach hundreds of students across the province of Quebec and urban, rural and remote areas of the province.
7565 As a result of our engagement with educators, parents and students across the province, we have come to know first hand the value of digital resources and how effective they can be in both a learning process as well as a means to build the community.
7566 When your people are engaged in minipill authentic and relevant projects, the results are frequently beyond expectation.
7567 Learn is please to partner with Youth Emage because we share a similar vision, that is to provide young people with the opportunity to fully realize the potential and to build a collaborative community from which all the society will benefit.
7568 MR. CANUEL: A few years ago, when we got the tangible benefit access, to tangible benefit money, we had created our studio, but that was almost ten years ago. Now, we are proposing and offering a strategic same concept of studio, but make it virtual or on-line where we can be able to build -- where kids will be able to build their self-esteem and will be able to promote a healthy dialogue and a sitting where mentorship collaboration from the broadcasting industry and professional will be used.
7569 That virtual studio will be a secured web environment, a place where mentorsher will be structured and where there will be cooperation, where there will be a sharing of resources, where the project approaching teens will be presented and offered to create content and also to help distribute it and have it promoted.
7570 And where there will be also academic opportunities with collaboration with the educational sector can be done.
7571 Our vision ultimately is that this virtual studio will promote and foster talent through a non-partisan approach to bring together broadcasters, producers, writers and so forth and with it to have a national impact.
7572 In conclusion, the bottom line is the traditional way of doing broadcasting is not sufficient. Youth are currently on-line, so why not give them the help and the boost necessary to make that something useful for the broadcasting industry and for all Canadians to enjoy and appreciate.
7573 The tangible benefit package can be -- can help create that next generation of Pierre Bruneau, of Denis Arcand and the like.
7574 Our organization has a know-how to do and the vision to take full advantage of such possibilities. We believe that together organization, the other organization that wants to be working with us and with together, we can have an impact. And with your help we can tip the balance and make this happen.
7575 Somme toute, les jeunes ont besoin d'une voix, ils ont besoin d'être entendus, the Youth need a voice and need to be heard. Together we can make youth a tangible benefit that will be lasting and -- qui pourra durer pour l'industrie de la radiodiffusion.
7577 LE PRÉSIDENT : Merci beaucoup, messieurs, pour votre présentation.
7578 Ce qui me frappe, ça fait plusieurs jours qu'on parle de radio et de télévision et puis je pense que c'est la première fois qu'on voit quelque chose à l'écran, mais c'est la nature du dossier.
7579 La Conseillère Lamarre aura des questions pour vous.
7580 Me LÉVESQUE : Bien sûr.
7581 CONSEILLERE LAMARRE : Merci, monsieur le président. Bonjour, messieurs.
7582 Dites-moi, votre projet, est-ce que vous l'avez soumis à BCE préalablement à l'audience?
7583 Me LÉVESQUE : Oui, tout à fait.
7584 CONSEILLERE LAMARRE : Quelque part au mois de mars ou au mois d'avril, j'imagine?
7585 Me LÉVESQUE : Dans ces eaux-là, peut-être un petit peu plus tard, un peu plus vers le mois de mai.
7586 CONSEILLERE LAMARRE : Et qu'est-ce que vous avez reçu comme réponse?
7587 Me LÉVESQUE : On a reçu une lettre, là, nous disant que pour le moment ce n'était pas un projet qu'ils allaient prioriser.
7588 CONSEILLERE LAMARRE : Qu'ils allaient prioriser. Je ne sais pas si vous étiez là au début de la semaine ou si vous avez écouté au début de la semaine lorsque BCE nous présentait les mérites de ce qu'ils nous proposaient en ce qui concerne, là, la mise à niveau, là, du réseau de Northwest Tel dans le nord et qu'ils faisaient valoir justement que ça pourrait... c'était en soutien à la jeunesse du Nord.
7589 Qu'est-ce que vous en pensez?
7590 Me LÉVESQUE : Bien, écoutez, moi ce que je vous dirais, c'est qu'il y a deux choses à prendre en considération.
7591 Une des manières traditionnelles de voir l'évolution de l'Industrie de la télédiffusion et de la radiodiffusion au Canada a toujours été de la voir comme étant un investissement dans l'infrastructure. C'est pour ça, d'ailleurs, qu'au début c'était sur le Railroad Act que la radiodiffusion puis la télécommunication fonctionnaient.
7592 Et ce que nous nous proposons en fait c'est que, oui, il faut prendre en considération l'infrastructure, mais à l'époque où on est aujourd'hui, ce qui est aussi important que la manière de recevoir l'information c'est comment elle est créée et comment et qui la regarde aussi.
7593 Et ce que, moi, je vous dirais, c'est qu'en matière de jeunesse et de jeunes, la réalité c'est que les jeunes passent de plus en plus de temps sur internet et avec d'autres médiums et on a donc deux options. On peut soit réagir et attendre que les jeunes soient complètement désintéressés ou on peut dès aujourd'hui les ramener vers l'Industrie des télécommunications en les encadrant et en leur disant: bien, écoutez, voici, vous pouvez continuer à faire... à créer ce que vous créez, mais on va vous aider à le faire puis on va en plus vous aider à le promouvoir.
7594 Donc, je pense qu'il y a encore des... je pense que l'idée de Bell est une bonne idée, mais il y a place à amélioration.
7595 CONSEILLERE LAMARRE : Et lorsque vous faites référence à votre studio virtuel, si je comprends bien, c'est que vous voulez offrir aux jeunes un encadrement à l'intérieur duquel ils vont pouvoir développer leurs aptitudes à faire de la production qui pourra être mise en ligne et est-ce que ça vous prend aussi du financement pour assurer l'infrastructure, les serveurs qui vont être nécessaires là pour faire ça?
7596 Me LÉVESQUE : Évidemment. Là, on ne peut pas nécessairement dissocier un de l'autre. Par contre, ce que nous disons, c'est qu'aujourd'hui -- et d'abord si je peux me permettre de faire une petite parenthèse -- il y a le web, mais ce n'est pas... notre idée, ce n'est pas uniquement que ça soit divisé sur le web. C'est de pouvoir aussi ramener ça aussi dans le domaine de la télédiffusion comme telle.
7597 Comme mon collègue a mentionné, une des choses que Learn a fait en collaboration avec des organismes comme le nôtre, c'est qu'on a eu pendant un certain temps accès à du Air Time pour pouvoir présenter des vidéos tels que ceux-ci à la télévision et ça c'est quelque chose qui est primordial parce que, là, ce qu'il faut... ce que nous on nous dit et ce qu'on dit, c'est qu'au lieu de considérer les médias en ligne séparément des médias traditionnels, pardon, on peut les intégrer et avoir une collaboration entre ces différents médiums.
7598 Donc, c'est juste une question de doser et de tenter de créer.
7599 CONSEILLERE LAMARRE : Et dites-moi une chose; les jeunes justement, là, que vos entreprises à but non lucratif là encadrent et aident, vous les trouvez comment ou ils vous trouvent comment?
7600 Me LÉVESQUE : Ces jeunes?
7601 CONSEILLERE LAMARRE : Oui.
7602 Me LÉVESQUE : Ah! bien, écoutez, il y a plusieurs manières puis je peux peut-être laisser Marco parler un peu de...
7603 MR. CANUEL : Actually, it's sure Home network of schools, school board. It's not really very complicated as for example, our organization has an RSS feed and we reach all the teachers, all of the schools, all the school board districts and that's really the easiest way to do it. We never had any problem reaching them and getting across the message.
7604 And we, two years ago, had a television show called "School" that aired for two years on CTV Sunday mornings. We purchased the air time and it was a show for, by and about young people that had the opportunity to discuss issues that were close to their heart. They at the same time were mentored, as Claude was proposing here in Youth Emage. They were mentored, they learned how to do camera work, they learned how to write scrips, they use tele-fronters and for them it was very important and mini pool experience and, in fact, many of them went on afterwards to continue their studies in communication art so it's a wonderful experience and we are just hoping that this could be expanded through Youth Emage.
7605 CONSEILLERE LAMARRE : Okay.
7606 MR. LÉVESQUE : And if I may add one more thing.
7607 CONSEILLERE LAMARRE : Absolument.
7608 MR. LÉVESQUE : The fact that we are using the on-line world as a mean to connect means that youth from up north, from B.C., from Québec, from Ontario, from out east can interact together. So, it's not -- so, it takes in consideration the local flavours and the local way of doing things, but bringing in those people together to have a national impact.
7609 CONSEILLERE LAMARRE : Je vous remercie et merci beaucoup, monsieur le Président. Je n'ai plus d'autre question.
7610 LE PRÉSIDENT : Merci beaucoup. Ça a été très clair. Nous n'avons pas d'autre question. Merci pour votre participation.
7611 Me LÉVESQUE : Merci.
7612 LA SECRÉTAIRE : Merci.
7613 I will now ask the Canadian Media Production Association to come to the presentation table.
7614 THE CHAIRPERSON: Welcome. For the transcript, please identify yourselves and make your presentation, please.
7615 MR. HENNESSY: Good afternoon, Mr.Chairman, commissioners. My name is Michael Hennessy and I am president and CEO of the Canadian Media Production Association.
7616 As you know, the CMPA is a national organization representing hundreds of independent producers across the country. Please, let me introduce my colleagues. On my left is Mark Séguin, our Senior VP Policy and on my right, Mr. Jay Thomson, our VP - Regulatory affairs.
7617 Mr. Chairman, let me be among the last to welcome you into your new post. This is my first appearance at the CRTC in my new role.
7618 THE CHAIRPERSON: In fact, let's us welcome you as well in your new role, then.
7619 MR. HENNESSEY: Thank you.
7620 It is also really my first appearance since the CRTC's vertical integration proceeding over a year ago, last June.
7621 And for the record, while I have not changed the position I took then on the need for vertical integration safeguards, my argument today is that this proceeding is not about carriage; it is about content.
7622 The CMPA recognizes that even if you turn down this deal, Astral will likely be sold to some other vertically integrated broadcaster; so that ship has sailed.
7623 So for us, the number one question here is whether Bell would do a better job than the next potential purchaser in serving Astral's audiences with more and better Canadian programming; we think that is the test.
7624 Given what we have heard so far from Bell, the answer to that question, unfortunately, is no. But it is within your powers to turn that no into a yes by increasing the benefits that flow on-screen and ensuring a more balanced linguistic split.
7625 Mr. Chairman, we appreciate that given Astral's history and presence here, in Quebec, the natural focus of this hearing has been on how a Bell-owned Astral will better serve Astral's French-speaking community.
7626 But at the same time, we urge the Commission to appreciate that Astral is not solely or even predominantly a French-language broadcaster. Astral also serves a sizeable English-language community.
7627 Yes, Astral's offices are based here, in Montreal, but as George Cope emphasized on Monday, this deal is about one national media company buying another national media company.
7628 Also, to our knowledge, this is the first time that the Commission has had to determine how to split benefits along linguistic lines.
7629 In our written submission, we had argued that the Commission should adopt a method used by Telefilm and the CMF. However, we accept that there are other methods for splitting benefits; some better than others.
7630 In its application, Bell relied on valuations to determine how to allocate its benefits, based on valuation. We think that is the wrong approach. Valuation is a highly subjective exercise. It is rife with forward-looking assumptions and can be broadly interpreted based on the inputs chosen.
7631 Just as a for instance; by simply adjusting the risk factor by 100 basis points for -- down, for English, or increasing the risk factor for French by the same amount, you can shift the amount of value in a company by up to $400,000 million.
7632 We submit a better approach for allocating the benefits along linguistic lines is to use subscriber numbers. Subscriber numbers objectively measure the relative size of the actual communities being served.
7633 In this case, it is important that the Commission appreciates that the relative breakdown of total subscribers to Astral's pay-in specialty services is roughly 60/40 in favour of English subscribers.
7634 In other words, the English-language community that Astral serves, as measured by subscribers, is actually larger than its French-language community.
7635 Since the Commission's benefits policy requires that the benefits flow to the communities being served by the undertakings being purchased, this means that the benefits from this deal should flow at least equally to Astral's English-language community as they do to the French-language community.
7636 And even if the Commission were to rely on valuation to determine the language split, the expert advice that we have received is that the market value ratio here is at least 50/50 if not actually weighed in favour of English-language services; again, simply by adjusting risk.
7637 The value split is certainly not 60/40 in favour of French services and it is certainly not 2/3, 1/3 split, as reflected in Bell's new benefits proposal.
7638 So for English-speaking audiences in Eastern Canada, Astral's TMN is their first TV source for new movies. In fact, Canadian feature films make-up 2/3 of TMN's programming.
7639 Consistent with this programming focus, TMN has always played a critical role in financing and promotion of Canadian feature films. In fact, at the premiere, it sponsored at TIIF last week, Astral celebrated its 25 years' present at the festival and proudly pointed to its role as, quote:
7640 "The largest private investor in feature film in Canada over that period."
7641 A well-deserved and well earn boast.
7642 For young English-speaking Canadians and their families, Astral is one of only two large broadcasters in this country that offers programming services specifically for and about them, in The Family Channel and Teletoon and its other kids and youth services.
7643 How does Bell propose to provide incremental Benefits to these communities? Frankly, so far, it doesn't. Under its previously license, TPMN contributed at least 1.3 annually to the Harold Greenberg Fund, for script and concept development.
7644 Bell's proposal represents less than half of that. That is not an incremental benefit. In our view, it is a net loss to the system and will only further erode English-language Canadian feature film.
7645 Bell proposes to allocate less than four percent of its revised benefits package to English-language kids and youth programming. This is a token amount that fundamentally ignores the nature of the services that Bell is acquiring and the kids and youth services these services serve.
7646 Mr. Chairman, as currently proposed, this is a bad deal for English-language communities that Astral serves, but it can easily be fixed.
7647 We appreciate that Bell has now properly included in the jointly owned assets in the value of this deal -- as now properly included jointly owned assets in the value of this deal. But under Bell's proposal, the share of on-screen benefits for English-language programming has dropped to a mere 1/3 overall. There is no new money for films or kids programming. There is 40 million in public broadcasting benefits still going to subsidize private telecom infrastructure, and now another 20 million is allocated to a project that is completely outside the Commission's benefits policy, namely a new proposed all-news specialty service.
7648 To us, it is now clearer than ever that Bell's plan is to convince the Commission to convert its benefits obligations into a war chest to subsidize its competitive battles, primarily with Quebecor but also with other carriers in the North.
7649 Mr. Chairman, we would like to support this transaction. We want to support this transaction. Our members consider Bell a good business partner and we also believe that Canada needs a combination of big and strong media companies as well as smaller, independent ones.
7650 Therefore, we would rather the Commission fix this benefits package than deny this application, or require, for example, that Bell divest the Astral English-language services.
7651 So how then can you fix the proposal? First, by requiring Bell to increases its on-screen benefits overall; second, by striking a fair balance between French and English-language initiatives to better reflect the nature and size of the Astral assets and the communities they serve.
7652 And to get there, the Commission should require Bell to allocate at least 85 % of its TV benefits to on-screen programming initiatives.
7653 We also join the many others who urge you to reject Bell's proposed Northwestelecom subsidy plan and as well, the $20 million proposed for the all-news channel. It should be redirected to initiatives that don't depend upon the Commission approving a totally separate future application. And funding for film festivals should be characterized as social benefits and replaced with benefits that would actually lead to a new and better Canadian programming on-screen.
7654 Mr. Chairman, Commissioners, we see this Bell/Astral deal as a huge and unique opportunity to boost financial support for films and for children's programming.
7655 Because despite the benefits dollars now in the system, there clearly remains a benefits gap when it comes to film and kids.
7656 Astral has been a leader in movies and children's programming. In fact, that is the primary nature of their English-language service, along with edgy drama.
7657 Given these circumstances, it has never made more sense to use benefits to substantially increase the money in the system for film and children's and youth's.
7658 And now, we would be pleased to respond to your questions. Thank you.
7659 THE CHAIRPERSON: Thank you very much, Mr. Hennessey, Mr. Thomson, Monsieur Séguin.
7660 As I have done for some others, I have -- I thought before we got into the transaction per se, I could ask the same question that I have asked of others about the vision for 2017, from your perspective.
7661 And I believe, Mr. Hennessey, you are probably well-suited to contribute to that conversion, in light of the various positions you have held over time, both from the CRTC perspective, the Telco perspective, the cable perspective; and now from the content perspective.
7662 MR. HENNESSEY: Yes; so 2017, that is, you know, certainly easy to start. I will probably have a new job.
7663 THE CHAIRPERSON: Just one?
7664 MR. HENNESSEY: But -- let me back it up for a second.
7665 So for most of this week and last week, I was in Toronto at TIFF and I think the excitement and Buzz in these circumstances around Canadian film that, you know, people in the industry were there, so there was a lot of television people as well.
7666 The buzz in our industry right now, I think; because of programs like the benefits programs; like the CMF; like Telefilm; like tax credits, has never been greater. The quality in the industry has never been greater. These things are beginning to pay off in huge benefits. I think there is a huge promotion gap that we have to address and I know we are working on it with you and Telefilm and CMF. But in my view, if we maintain that course; if we promote better; if we ensure that, you know, there is competition in the system; that we are -- you know, our products are responsive to audience; that we are reflective of consumer demand; and we keep introducing innovative services, not just in the traditional platforms but in digital media as well; then I think we on the age of, you know, really, a golden age when it comes to Canadian content.
7667 And I say that looking at the number of successful films we have seen at TF; looking at Canadian productions, not just in the drama segment, although, you know, if you look at a series like Call me Fitz, for instance; we are starting to see great quality stuff.
7668 But, you know, take Home and Garden TV in the states. The top shows on Home and Garden TV in the States now are all Canadian. And why is that? It is because the system has worked; because of what we have all been contributing to on different sides of this industry for 25 years. We are starting to see real payoff.
7669 And I think given how our markets are sort of shifting, people are thinking about how do we enter international markets, how do we grow the business international, how do we attract international money. If we do the right things, particularly in areas like tax credits so that we don't push out private investment that we attracted, if we chase international businesses, Canada is going to have even more respect in five years in the area of content than it clearly does today when you go to something like TIFF and just see how important we've become to buyers all over the world.
7670 THE CHAIRPERSON: Is it just a question of it being available, or should we be concerned about it being actually watched?
7671 MR. HENNESSY: No. I think, you know, one of the -- when I took this job, one of the things that I did say to our members is that if your programming does not resonate with audience in some fashion then, you know, it doesn't matter how good, you know, a small group of people might think it is it doesn't matter and it's not to, you know, insult people that may feel that they have a particular niche, but you have to resonate with audiences to survive in this world.
7672 That's going to be a critical factor. And what I have seen is, you know, 10 years ago Canadian broadcasting was all about telling our stories to each other, that was the Sheila Copps' mantra -- and, you know, I won't get into some of the comments I made about that in the past, you know them, you can tell your colleagues in the back if you want --
7673 MR. HENNESSY: But that was it, right, it was telling our stories to each other. Not -- you know, not offering our products to the world, not seeking out markets that ultimately give us the scale to be increasingly successful and be able to remain in Canada and create. And I think that's the difference.
7674 So, audience and promotion and the distribution that goes around that are going to be critical factors in determining the success of the industry, as they should. Because if you have no audience, if you're not responsive to delivering your product in the way consumers want it, then they're going to abandon the system.
7675 And, you know, that's bad for everybody and I believe everybody gets that even though everybody knows that that's going to put increasing pressures on the way they used to do business.
7676 THE CHAIRPERSON: Okay, that's useful.
7677 Now, let's get back to the application in front of us, but that actually helps put a bit of context.
7678 You described your association and your membership as I think part of the broadcasting system and you've often, as an association, participate in these proceedings and you've seen these sorts of transactions in the past.
7679 And, indeed, the Commission has in past proceedings tried to smooth out rough edges, but there's a difference between smoothing out rough edges and trying to make a silk purse out of a sow's ear.
7680 What kind of situation are we in now, do you think, in this application?
7681 MR. HENNESSY: In the context of programming or in the context of competition within the system?
7682 THE CHAIRPERSON: I'm talking about --your entire thesis, I think, is things need to be improved with this particular application in terms of the nature --
7683 MR. HENNESSY: Yeah, okay.
7684 THE CHAIRPERSON: -- and direction of the benefits package.
7685 MR. HENNESSY: Yeah. So, I haven't redone the math. I know before the latest proposal earlier this week that only 69 percent of the monies were actually targeted at on screen. And if you're going to have -- you know, what -- I guess let me step back for a second.
7686 So, we've got the largest independent or one or either, I can't remember whether it's Corus or Astral, but one of the largest independent remaining broadcasters in the country that will be leading the system and, as I said, you know, if not Bell somebody else.
7687 And so, you know, the value clearly that Bell is putting on this asset is significant, the opportunity it sees to compete with Quebecor here to, you know, acquire and combine a lot of rights to offer TV everywhere and over-the-top service -- I'm not quite sure how to define it -- is huge. And, you know, I think that that means it's important that significant benefits flow into the system.
7688 And as Mr. Thomson was saying to me over lunch, the reason you have a benefits package in the first place, right, is because you're trying in some way to replicate what parties would have brought to the table if they had been competing for or bidding for an application in front of the Commission in those particular genres.
7689 What would they have promised? And the promises would have been around the genres, you know, the company Astral brings into the market, so, French specialty, English pay, film children that's, you know, edgy drama, that's what they do, that's what an applicant, if they were coming to actually, you know, bid on that type of licence would be required to do.
7690 That's what it's about. But we're not seeing that, we're seeing increasingly, even as people say it's important to have vertical integration to save the broadcasting system, that the allocation of the benefits become more insular, more self-directed and often are perceived by other people in related industries as anti-competitive.
7691 So, I think it's critical, you know, in this kind of a deal that the maximum amount of benefit possible goes on screen.
7692 And so, number one, you know, we believe that's why you have to be at least at 85 percent.
7693 I don't object to 95, that's not a problem for us but, you know, 85 is a traditional benefit and there are, as you've heard some very distinct, including the people just before us have presented ideas on some, you know, significant social benefit, so...
7694 Am I wandering way off topic here?
7695 THE CHAIRPERSON: No, actually I find it interesting because more so in your presentation here than perhaps what I was reading beforehand, that you're actually proposing to get back to first principles of the original policy and that was, we don't ask people who want to purchase broadcasting undertakings to return the licence, so we do a competitive hearing.
7696 So, in a sense, your lens of saying, well, what would somebody who had wanted to buy that licence, what would they have brought to the table and what would we normally have looked at.
7697 Although I am cognizant of the fact that we may have gone down this path a long time ago and I look back at the initial BCE purchase of CTV where there was incremental hours being promised but it was -- the whole debate there was, is it self-serving, is it self-directed. It was above the minimum requirements, but it was going to CTV's programming.
7698 I mean, we've been doing this for a little while; haven't we?
7699 MR. HENNESSY: Yeah, we have. And, so, to be clear, we recognize how things have moved along and we're not coming here and saying, you know, you have to take all that benefits money out of CTV's hands and put it in the CMF so it's totally independent.
7700 We're not saying that. And, in fact, I think if you put it all in the CMF -- to, you know, anticipate a question -- then, you know, you're not putting it into film, because the CMF doesn't put film, so I think Harold Greenberg is a better independent way to do that, and there's no guarantee under the CMF envelope package that it would go into children's programming.
7701 So, I think it's important that, you know, we recognize where we come, you can't just dial everything back, but the more you can focus on the benefit at the end of the day is on screen and it's about broadcasting and, as the policy suggests, predominantly or primarily independent production, you're in the right direction.
7702 I mean, you know, Bell would argue, and I think fairly, hey, you already let Shaw keep control of the allocation of many of the benefits under the Shaw CanWest deal, so why something necessarily, you know, different here?
7703 So, we're not that worried. As I said, you know, it's -- when we've dealt with Bell as an independent producer, they're a good company, Bell CTV is a good company to deal with, we don't have a problem with that -- well relatively good anyways
--- Off microphone
7704 MR. HENNESSY: Yeah. Let me put it this way, it wouldn't really -- you know, Bell relative to most of the other people we have to deal with is a good company to deal with, so...
7705 COMMISSIONER DENTON: Don't go too crazy, Mike.
7706 THE CHAIRPERSON: Some observers might be looking at this and saying -- because we've seen it a lot from the creative industry saying, oh well, we're a bit uncomfortable with the big transaction, but as long as there's enough money on the table we're ready to live with it.
7707 I'm shortening the positions that I've heard.
7708 MR. HENNESSY: I understand the position.
7709 THE CHAIRPERSON: But, you know, broad strokes, headline type of summary.
7710 It was always my understanding that one couldn't buy into the public interest, that just because you threw enough benefits on the table, surely there's a point where the Commission has to say, sorry, no, there's a more fundamental problem.
7711 Would you agree?
7712 MR. HENNESSY: Yes. Now, I'm not saying that that's --
7713 THE CHAIRPERSON: You know, that would have been my -- so there is a fair -- but you're saying in this case we're not at that point.
7714 MR. HENNESSY: Absolutely. No, you have to make that decision, for sure.
7715 THE CHAIRPERSON: And mostly on screen --
7716 MR. HENNESSY: Mm-hmm.
7717 THE CHAIRPERSON: -- from your perspective? Now, there were changes to the benefits package Monday and we're going to probably hear a little bit more about those.
7718 I take it from your presentation that you squarely don't consider an all-news channel as an acceptable benefit? It's an on-screen benefit; isn't it?
7719 MR. HENNESSY: It's an on-screen benefit, but I think it's a totally, you know, self-directed benefit. I'm not sure there's a huge amount in it for independent productions. You know, it's clearly aimed at (inaudible)
7720 And, you know, Bell has a pretty big war chest anyways. I'm not saying that there shouldn't be more competition in Quebec, I think probably that would be a really good thing.
7721 But, you know, really Bell doesn't need a subsidy that would otherwise go to independent producers to launch services to take on the Quebecor empire.
7722 MR. THOMSON: Excuse me as well.
7723 THE CHAIRPERSON: Sure.
7724 MR. THOMSON: If we go back to first principles, as we've discussed, then the policy has always been that the Commission would not accept benefits that are dependent on another application that's not before the Commission and that needs a separate process and a separate approval process as well.
7725 Clearly in this case there's nothing before you. It's speculative at this point whether there will actually ever be an application. You'll still have to consider that application. You may have problems with it, consumers who intervene may have problems with it. We don't know what that end result will be if there is anything at the end.
7726 So it would be inappropriate to base a benefits decision today on something you don't know about in the future.
7727 THE CHAIRPERSON: We've been talking about competitive threat from offshore content distributors that are operating in a sense, whether it's Netflix or others in Canada. Is your view that that threat is overstated and therefore this proposed additional benefit is not worthy?
7728 MR. HENNESSY: Yes, to some extent. I have Netflix, I have Apple TV. Apple TV is still a fairly costly proposition because you're paying on a pay-per-show kind of basis, so it's not really -- it's a different form of competition. It's more competition with Video-On-Demand.
7729 Ultimately, the fact that Apple particularly, or Netflix, may have a lot more scale to buy North American rights, if that increasingly happens, that's a big problem.
7730 The benefit of what I think all the broadcasters are bringing to the table is that -- and I think it is something that you have to work on collectively as well as get scale, is that if you can do TV everywhere, then you do have an advantage because you have virtually all the audience going in as distributors collectively, have virtually all the audience going into the game.
7731 They control the linear window that drive a lot of the demand for the product to begin with, promote the product that create the awareness of the product to the extent that the regulatory system might have to become more flexible.
7732 The biggest problem I think that we have with probably anybody instituting that type of service across all platforms are the genre exclusivity rules or limit exclusivity rules or limits that occur in the subscription video and demand market.
7733 So you are limited as to what kind of TV type services and film you can have because of those. But that's something you can fix. Then you're in a very strong position. So I guess we shouldn't underestimate the impact of people being able to acquire content over the talk.
7734 At the same time, the system has proved very resilient. It gets to one of my issues on the linguistic split about risk. PriceWaterhouse has said the English side of Astral, so the pay channels, are -- there, the discount numbers are higher to reflect the risk of over-the-top and, you know, the specialty channels in Quebec.
7735 But then if you think about it, what has TMN been doing the last couple of years? Well, they launched the HBO Canada brand and, you know, we hear rumours of others, maybe the Showtime brand or whatever. And as a result, it seems the revenues, the wholesale revenues they're getting, have gone up by 10percent. We can get into discount risk later.
7736 I would say what is really the risk right now on the English pay side, given that the powers to operate product across categories if you can start to develop products by people working together on the right side, is that risk really greater than the risk that these specialty channels are going to face if you approve this deal, and Pierre Karl gets into the tank and responds?
7737 It's like assuming that, oh, Bell is going to buy these things, they're going to go after Quebec. Karl is going to sit around and go: Well, that's pretty tough. That's too bad. I guess we're dead.
7738 And I don't think that's going to happen. He'll hammer the hell out of those specialty channels. He controls the massive amount of distribution in this province, he'll be launching new channels to compete with them.
7739 So, is the risk on the specialty side in Quebec less than the potential for over-the-top and the rest of Canada? I don't think so. I think I'd look at it that way.
7740 THE CHAIRPERSON: You're suggesting that there be a greater focus on the on-screen with respect to kids and film. Others have come to the table and talked about documentaries. Do you have views?
7741 MR. HENNESSY: I think there is -- clearly our members also create a lot of content in the other PNI category so, yes, we should be careful not to exclude that. I think documentaries is --
7742 It's interesting. We seem to see a big decline in documentaries in Canada. At the exact moment, there seems to be more of a global renaissance around that category so, yes.
7743 I think what we were really trying to say is there has to be a lot more emphasis on film and kids, because that is the primary genre that they're pushing up, but they do -- when you think about other PNI, whether it's in Teletoon in terms of edgy cartoons, TMN in terms of edgy series. "Call me Fitz" would be a good example, yes, you can't ignore that and we don't want to ignore that for sure.
7744 THE CHAIRPERSON: And indeed, some of the services Astral has, if I'm following your logic that it should reflect what Astral has as services, a number of them are quite importantly in the documentary world.
7745 MR. HENNESSY: M'hmm. And, you know, if you go over to the -- on the French language side of it, which I'm sure Claire and Jean are going to cover off shortly, even more so in the PNI.
7746 I think our point, and the reason we emphasize a bit, because you try to squeeze things into your 10-minute slot, is that there's been all this kind of benefits money in the English market. There's been no benefits money in the French language market, relatively speaking.
7747 And that's right, but by the same token, if you look at what's been going through the CMF pipe, obviously no money is going to films. So there's been no benefits money today to the English market to film. And as far as we can tell in terms of what's being commissioned under the CMFM load system, there isn't money flowing to that either.
7748 For the same reason that you wanted to see benefits money going into French language, I think you also want to see it going to film and kids in the English market, as well as edgier and documentaries which are also probably a little -- well, the edgy stuff probably less so, but the documentaries, yes.
7749 THE CHAIRPERSON: Sure.
7750 Your thesis on how to divide the benefits between the English and French language market, your proposal focuses around subscribers. Is it in part because it's a better proxy of what people are watching?
7751 MR. HENNESSY: Yes. I think what we said is that if you really -- part is to ensure that the communities serve Nunavut. You can define communities as a genre. You can define -- I think, in a consumer audience-driven world, the community becomes a subscriber. I think that's fair. So we used that.
7752 Let me be clear. We originally said that Telefilm CFM test for national services is two-thirds, one third, some of the services, though, are national, some aren't, so it's not a perfect fit. Subscribers is not necessarily a perfect fit. Valuation, as I said, can change the risk factor and you can get to 50/50 very quickly.
7753 I mean, you know, you could ask me what I think -- you're starting to get to the Wisdom of Solomon because --
7754 We've never been down this path. There is no precedent for what the test is. But I would say that it shouldn't be any less than 50/50. And if it never gets more than 50/50, c'est la vie!
7755 THE CHAIRPERSON: Let's remember that story, though: the baby was never chopped in two.
7756 MR. HENNESSY: The baby was never chopped in two, but I would never feel comfortable taking 100 per cent of the monies from my friends behind me.
7757 THE CHAIRPERSON: But following your logic, though, if it's about what people are watching, we know that some of these specialty services have access to the system because of the regulatory rules, not necessarily because people have chosen them. And I know you're not saying, you know, this is not your hill to die on, this methodology, but I find it intriguing.
7758 How do you factor that into --
7759 MR. HENNESSY: And you're quite right, which is why, you know, we keep coming back to the Wisdom of Solomon, whether you're cutting the baby or not -- I'm not sure we can say those kinds of things anyway. That's probably --
7760 But a 50/50 split makes sense and I would say, look, if you start from the Bell premise that it should be valuation and Price Waterhouse, I'm just saying, when you really think it through, they got to that 60/40 or if they pushed it up even higher, they got to that split by saying, English is very, very risky, so your one times multiple, even if your discounts were lower or your discount rate was higher, because they were relatively more risky. What I'm saying is, you change that by one point one time or you change it by 100 bases point to adjust the risk factors, either way you're going 180 million dollars easily on each side. So you suddenly go up to 360 maybe even, a 400 million dollars shift in benefits.
7761 Ultimately you've got to decide, right? You've got to decide. I'm just saying that just looking at two factors in the Price Waterhouse thing, or even one factor, the risk adjustment whether it's a discount factor or even -- just by playing around with risk you can come up with any ratio you want.
7762 THE CHAIRPERSON: Right. But to follow your logic, perhaps we should be focusing more on viewership or even viewership to Canadian as a means to divide. In other words, if you've managed to garner audiences in the past through your Canadian content, maybe that's what we should be going toward in this division.
7763 MR. SEGUIN: If I can answer that. Keeping one thing in mind is that -- can I bring this back to the original one-third, two-thirds traditional split that was allocated to Telefilm many years ago and the CMF since its inception is that from what I know, several factors were taken into account, including kind of a unit cost of production and all of that.
7764 So in recognition of the fact that it costs the same amount to produce a program for an audience of X as it does for an audience of X times Y, so audience could be an approach but I'm not sure I would necessarily limit it to that. Back again to your promotion notion from earlier is that audience is in a way kind of correlated to how much promotion a show gets, so it's not as cut-and-dry as just audience, in my view.
7765 MR. HENNESSY: I guess one of the things that -- the problem you're going to have with viewership is that, and it goes to your point about discretionary, if you look at channels like Family and TMN or on the French language side, they may have less subscribers but the audience that they do get is very much the audience that has chosen that as opposed to its Category 1 service or whatever. So, I don't know.
7766 I recognize the challenge you have and how you figure out that split. It's very difficult because it is, you know, it's Greenfield.
7767 THE CHAIRPERSON: Yes, and luckily in French we slice pears in two rather than babies, which is perhaps an advantage on that, but --
7768 THE CHAIRPERSON: You mentioned, when I was asking you the questions on vision, that there may be a promotion gap, and I'm wondering why, in light of that and understanding the on screen perspective, that you would not have been more advocating money towards promotion.
7769 MR. HENNESSY: I think because we're not there yet. The project, you know, the commission Telefilms, CMF that we've joined in and others, is still a very nascent thing. And I've had conversations with the people that have said, why don't you take more of the CMF money and put it in the marketing and promotion end as opposed to the program development end? The reason that you don't really do that for the most part is because if you take the money out of development, there's nothing to promote. It's simplistic, but that's the problem.
7770 Here's the thing. I think if you took 5 million dollars, whether it's out of Telefilm or CMF or whatever, it you put 5 million dollars to the social media campaign and got many of the young people that aren't in the room to run that campaign and say, we want to find -- and this is one of the things that's a priority for us, not with 5 million dollars because we don't have it, but with our association, they would find you a way to say: We can figure out how to use things like Twitter and Facebook and cross-promote, crosslink sites and target audience and find the right metric, and put out noise and buzz around Canadian product like we've never seen before.
7771 You don't have to take all the money out of the existing pot and put it into traditional forms of advertising to do that. You could make -- with 5 million bucks you could run a social media campaign that probably nobody has seen before that could be incredibly effective unless, you know, there's about 20 of us sitting around the table trying to determine how to run it, that aside.
7772 I absolutely believe that without -- the biggest problem I think for Canadian production is that money goes into the development end and then you're sort of told you're on your own. You're down in the States, you're doing the thing, you know, but half the money there actually goes into financing the project, again goes into marketing and distribution, because that's how you actually get out to audiences. So it's a tougher challenge.
7773 I'd say that is, you know, one of the huge problems we should all be working on over the next couple of years, and I'm glad we are, but do we need to allocate benefits to it right now? If we want to set aside some of the social benefits, that's fine. I'm just not quite sure the shape of what it is we'd be setting aside at this point.
7774 THE CHAIRPERSON: Sure. You raised social benefits. I've been noticing over a number of years where people come to hearings and they do promise social benefits in a sense because they have to as part of the framework, but it's always struck me as odd that when it comes the time to make the announcement, there's never a footnote that says, after the big headline, we are giving this gift to this particular cause or event.
7775 There's never a footnote that says: Oh, and we did not do it out of the goodness of our hearts but because we were obliged to do it from a regulatory perspective.
7776 Would you agree that oftentimes the social benefits are wrapped up and the goodwill goes more to the company making that gift and actually adds value to shareholders rather than acknowledging --
7777 MR. HENNESSY: Sure, absolutely. Absolutely. I'd agree with that. I would think, looking back at some of my corporate experience, that once you're forced to spend the money you might as well just stamp your brand all over it. Good business practice.
7778 THE CHAIRPERSON: On page 59 and following, you're talking about incrementality and the challenge we may be facing because of the transition to group licensing. When we were looking at this, and I take your point in the particular instance here, are we going to face a larger issue going down the road about incrementality because we've changed the group licensing framework and therefore we don't have a base going forward that's as clear as to what was the obligation? Or are you merely making the point with respect to this particular --
7779 MR. HENNESSY: My initial reaction would be yes but I think -- Mark, have you given this any thought?
7780 MR. THOMSON: You can turn to me, and yes we have. It's a very serious issue for all of us on the creative side, if you will, to ensure that we're able to measure not only the changes that are taking place as a result of a new group licensing policy and how the different large groups are shifting their money around, and which shows are getting funded, and which are no longer getting funded, which services are getting more money than the others, but also how the benefits layer on top of that.
7781 It's something that we're having an ongoing discussion with the Commission staff about, how we can ensure that we'll have the metrics going forward that will be available to everyone, transparent and objective, that we can measure. But it is an issue.
7782 THE CHAIRPERSON: I was intrigued. On page 18 of your written submission, more specifically around paragraph 92, where you make a reference to audit,that's interesting. Over the past few days we've been hearing a lot about whether or not the vertical integration framework has worked or not.
7783 This point got me to reflect, and we've certainly heard it on the telecom side with respect to costing, whether costing analyses perhaps need a bit of scrutiny from time to time.
7784 I was intrigued in this case, though, that you're suggesting that audit should occur based on complaints. Would your view be -- certainly it was my experience in departments with respect to grants and contribution programs -- that from time to time you have to do audits, that the government funds audits. Why haven't you gone that far? Why is it not a rotational audit of spending? You're basing it on just a complaints basis.
7785 MR. THOMSON: The reason we raised that particular issue in our intervention goes to the previous question you had about the difficulty of the metrics in ensuring that there's incrementality in the expenditures.
7786 The problems of those of us on the outside, who don't have access to the full range of information that the Commission has that it receives in confidence from the broadcasters, we often have difficulty in ensuring that what has been said in a report is actually what has transpired. So we raised the issue of the audit because there may be situations in the future where the creative industry comes forward to the Commission and says: We're not sure about these numbers; will you please audit them and make sure that they're right.
7787 That's the only reason we put that forward. If the government wants to weigh in and do this on a regular basis, I don't see why we would have any problem with that.
7788 THE CHAIRPERSON: All right. That's interesting. Those were my questions.
7789 Vice-chair Pentefountas.
7790 COMMISSIONER PENTEFOUNTAS: Thank you, Chair.
7791 The Chair was thorough. This is his nature and habit. Just a couple of things.
7792 One thing struck me when you were talking about subscribership, in trying to figure out what the split is in the evaluation of Astral's television properties. I asked Staff to take a look at it and I looked at it in terms of revenue. That was interesting as well because there's a 52/48 split English to French, so despite the fact that the number of services of the French language are much greater than the English number of services, revenues are quite similar and your 60/40 split on subscribers is interesting as well.
7793 That being said, just to get back to something that was raised earlier and the Chair touched upon it as well, and that's trying to reconcile the public interest in the system as a whole with the interest of your members.
7794 You heard the colleagues from your previous professional life, Mr. Hennessy, speak this morning as to the benefits or lack thereof to the system and, in your case, the body is barely warm in the functions you served previously.
7795 How do you reconcile the interests of your membership with the greater interests of the system and everything we've heard from Cogeco, Québecor and specialty earlier today?
7796 MR. HENNESSY: It goes first to the point I made right at the beginning, is that at the end of the day for the broadcasting system as a whole, it's about content, not carriage. It's about how good is the content experience, how engaging is it, because if it's engaging, then you will have -- overall, you will have customers sticking to the system.
7797 And our role -- and it's a role firmly anchored in, you know, section 3 of the Act -- in terms of independent production and creative resources is to contribute to that.
7798 So the number one thing is in my view it's content, not carriage. Carriage is plumbing, okay. Now, I'm going to get into why that's not quite as simple as it sounds. But, you know, carriage is really plumbing.
7799 At the end of the day people are less interested in how all the pieces in the system work to deliver the content experience to them and the content experience itself, unless of course -- and this is where, you know, the issue of competition and everything does come in -- unless of course the end result of a lack of competition is a limit on choice or extremely high-priced.
7800 COMMISSIONER PENTEFOUNTAS: Well, the argument was made that there will be drastic and irreparable damage caused to the balance within the market. There will be an imbalance that will bring down the whole house of cards. I gather you don't agree with that?
7801 MR. HENNESSY: No. You know, when I -- and as I said it's been about a year and a half since, not quite a year and a half but since I've been before the Commission, which was the big June hearing on this, and I did make probably very similar kind of points.
7802 I don't think I sort of said the whole house of cards was going to collapse, but, you know, the principles that we articulated there, and we articulated them in the need for safeguards, that you have to have safeguards so that distributors can get fast access to content on reasonable terms and there's non-exclusivity, that independent broadcasters have access to the system, that producers have a reasonable relationship with the broadcasters that they sell their product to, which, you know, is articulated in terms of trade.
7803 And as you remember, TELUS was the only carrier at the time that was supporting terms of trade with CMPA. Thank God given the circumstances, but --
7804 So what did we get out of that? We got safeguards, and they're quite extensive safeguards. So the issue is now it's not the question do you need more safeguards, although I heard some of the things that TELUS was talking about and wasn't unsympathetic, maybe you do need to tweak a few things, but the fundamental thing is most of the safeguards are in place.
7805 So is there timely enforcement and compliance and is there a penalty for non-compliance, and that's still something I think that has to be worked out.
7806 So in my old job I think we felt -- and I think I heard the TELUS people saying today that it took a long, long time to work through the process and get your hands on those services, and to file an undue preference complaint took an enormously long time given the speed that everybody wants to get to market today. So I think those kinds of things have to be fixed.
7807 But the safeguards, they're pretty comprehensive and they're in place. So it's how do you -- you say this is our intent. How do you make sure that the intent is met quickly?
7808 And I think Bell said that as well today -- or a couple of days ago. George Cope said that the issue is one of timeliness and we recognize that.
7809 So that to me is the more critical issue.
7810 I don't think -- I know that you have a difference in Quebec. Like Quebecor is very strong but they're centred more on conventional and these are the specialities. I'm not sure that that wouldn't be a pretty good fight. You know, I don't sort of look at Pierre Karl as a doormat.
7811 COMMISSIONER PENTEFOUNTAS: But on the issue raised earlier about limitations being placed on the free movement of content between distributors, I mean surely the CMPA would be worried about any kind of roadblocks that may be set up by --
7812 MR. HENNESSY: Absolutely. Absolutely.
7813 COMMISSIONER PENTEFOUNTAS: -- the big giant that Bell may become?
7814 MR. HENNESSY: Yes. We would hate to -- I mean, you know, we would still likely sell our product to Bell based on X size market, but if it's not getting there, then it's limiting in terms of the buzz, the reward from, you know, building off the success of that. So it is an issue. I don't disagree.
7815 So it goes back to the second point I made, which is, you know, Ian Greenberg has made it quite clear, and everybody knows in the industry, Astral will be sold. So this is not an issue of oh, we can go back and they will be an independent. I mean, people say, well, will Michael MacMillan come in and buy it? I don't think that's really -- right now I don't think that's necessarily in his game plan at all.
7816 So more than likely, you know, you're looking -- in the English-language market you're looking at Rogers or Corus-Shaw. Is that necessarily better for our members? Well, you go, if you're looking at children's programming and we move it all over to Corus-Shaw, then, as I said to one of our members, it would certainly be a lot easier for you to try to pitch your product, you would only have one buyer.
7817 So that's what I meant about the ship had sailed.
7818 And, yes, maybe Rogers would be, you know, better -- like if the pay TV thing would -- you know, between the vertically integrated guys because I think they're feeling a little lonely right now.
7819 But, you know, I mean five minutes -- well, not five minutes, but, you know, maybe five weeks after the ink was dry in the terms of trade thing, you know, the head or Rogers Media is standing up at Banff saying, you know, the terms of trade are an awful deal and we've got to redo these, they just don't work.
7820 So you sort of say, well, in a vertically integrated world, like, you know, who's the better partner to go to the dance with, and Bell hasn't been a bad partner.
7821 But am I worried about the level of concentration we see in the industry? Sure. I mean how can you not be? But, you know, it's not -- in my mind the issue is when you look at Bell buying this thing, is that bad or good as compared to what. And I think that's the real issue, is as compared to what, because, you know, it's not going to end up in some independent's hands and therefore in terms of the behaviour we see when we're selling, is that better or worse than -- I don't think so.
7822 I think that, you know, we're kind of -- whether they're a lot bigger or not, obviously there are less windows and that's a big problem, but it's a matter of time before those windows shut if it's not them.
7823 COMMISSIONER PENTEFOUNTAS: Okay. Thank you.
7824 THE CHAIRPERSON: I believe those were all our questions. Thank you very much.
7825 MR. HENNESSY: Thank you, Chairman, Commissioners. Glad to do that.
7826 THE SECRETARY: I would now ask The Producers Roundtable of Ontario to come to the presentation table.
7827 THE CHAIRPERSON: Welcome. Please identify yourself for the transcript and make your presentation, please.
7828 MR. CLARKSON: Bonjour, Mr. Chairman, Vice-Chair, Commissioners and staff.
7829 My name is Wyeth Clarkson. I'm a filmmaker and spokesperson for The Producers Roundtable of Ontario, or PRO for short.
7830 PRO is a caucus and coalition of Ontario-based feature film producers. Our membership currently consists of more than 40 small-to-medium-sized production companies and has been in existence since 2004.
7831 PRO's comments today will touch on the value of the transaction and television tangible benefits, but our focus will be on explaining the important role that the Harold Greenberg Fund plays in supporting Canadian filmmakers and why we think the Fund should receive additional benefits.
7832 I would also like to present a brief case study of the Canadian feature film "The Mountie" and the role television has played in it reaching Canadians.
7833 The Value of the Transaction.
7834 PRO is confident that the CRTC will conduct its customary in-depth analysis of the value of this transaction for the purpose of assessing the appropriate quantum of benefits in this transaction.
7835 In particular, we trust the Commission will be diligent in ensuring that the values assigned to the regulated assets are fair and proper compared to those assigned to the unregulated assets and that the value assigned to the television assets are appropriate compared to the radio assets.
7836 PRO is hopeful that after careful analysis the Commission will conclude that the true value of the television assets is higher than that put forward by BCE.
7837 Television Benefits
7838 PRO submits that BCE's revised television benefits proposal tabled this week still does not meet the Commission's longstanding practice and standards with respect to benefits.
7839 Specifically :
7840 - the proportion of television benefits funds committed to on-screen programming is still well below the Commission's longstanding practice of requiring that about 85 percent of benefits funds flow to on-screen programming initiatives;
7841 - the proposal to direct $40 million in television benefits funds to modernize Northwestel's telecommunications infrastructure in the North fails to meet the Commission's test for television benefits. In short, it has no direct link to the Canadian broadcasting system and will therefore not directly benefit the system as a whole;
7842 - and finally, we believe it would be inappropriate to allow BCE to use television benefits funds to launch a new French-language Category C news service to compete with existing such services.
7843 The Harold Greenberg Fund
7844 It is PRO's understanding that very little television benefits money has been specifically committed to Canadian theatrical feature films of the hundreds of millions of dollars in benefits funds that have been approved by the CRTC in recent years.
7845 We appreciate that BCE has proposed directing $10 million in television benefits money to the Harold Greenberg Fund, but we request that this amount be increased to ensure that critically acclaimed and popular films such as Sarah Polley's "Away From Her," "Goon" and the Academy Award nominated "In Darkness" continue to entertain and inform Canadian audiences.
7846 The Greenbergs identified in the 1970s that there was a demand for well-written Canadian scripts but not enough resources to fund them. In April 1986 they established the FUND (Foundation to Underwrite New Drama).
7847 Since that time, the Fund has directed $90 million in support of 3,700 Canadian feature films, both in development financing and production equity investment.
7848 However, the Fund has been decreasing. Directing additional benefits funding from this transaction to the Harold Greenberg Fund represents a unique and appropriate opportunity to ensure the long-term survival of the Fund.
7849 Additional funding would fill an important need in the Canadian feature film sector.
7850 Right now critical doors to development financing are being closed by Telefilm Canada to both emerging and established Canadian producers. This has only increased the role that the Harold Greenberg Fund plays and will need to play in the feature film landscape.
7851 Some of our members have written us to express how important the Harold Greenberg Fund has been to them.
7852 For example, Tony Wosk, whose recent film "The Samaritan" starring Luke Kirby and Samuel L. Jackson, wrote:
"Recently the Fund made a key equity investment in a film I produced. Without that money we would have most definitely fallen short of our financing goals and had been unable to make the movie... Subsequently the Fund invested in the development of my next feature by loaning development funds towards the option of an award-winning Canadian novel. Without this assistance, we would have never been able to afford to move forward on the project."
7853 Another comment submitted by Best Motion Picture Genie award-winner Anna Stratton reads:
"The Harold Greenberg Fund has made the difference for projects moving forward or not. It has been much more important than Telefilm because of their consistency and their care and depth of understanding of projects - the combination of a board composed of people drawn from the community, and a strong CEO, John Galway, who maintains a dynamic relationship with the filmmakers is a great mix for Canada."
7854 Pierre Sarazin, the producer of "La Florida," which won the Golden Reel Award for the highest-grossing Canadian feature film in its year of release commented:
"La Florida was just an outline for a movie Suzette Couture and I wanted to write. We needed someone to believe in it. And that's when the Harold Greenberg Fund stepped in. The hardest money to come by in feature film is the first money for script development. For me and my partner, and for countless other Canadian filmmakers in both French and English, the Harold Greenberg Fund has been a staunch supporter of Canadian film development and production, so much so that generations of filmmakers have come to depend on its financial and creative support."
7855 The Critical Role of Television to the Success of Feature Films in Canada
7856 Canadian television can and should play a critical role in ensuring that Canadian feature films are available to Canadians.
7857 I would like to touch upon this topic from a personal perspective. A recent film I produced titled "The Mountie" tells the tale of a lone 1894 Mountie sent to Canada's Far North, the Yukon Territory, to investigate whispers of gold.
7858 Inspired by actual events, I wrote and produced this film as a tribute to the RCMP and hoped to inspire younger Canadians the same way I was when I watched the Westerns of Gary Cooper and Sergio Leone. Even then, at an early age, I wondered why I didn't see our Western History on screen.
7859 I completed the film and managed to secure national press and online attention partially because of casting Jessica Paré right before her breakout role in "Mad Men." There was also a strong network of RCMP veterans who were prepared to buy tickets in advance to see the film in theatres. I felt well positioned to share this story with audiences across Canada.
7860 Much to my frustration, on opening weekend I was unable to book the film theatrically anywhere but Toronto and Vancouver. I received angry comments from RCMP vets who rightly were upset that they could not see their history in their hometown. Not even in Ottawa, where the North West Mounted Police was born by Sir John A. Macdonald's decree.
7861 I explained to the veterans that it was not by choice that the film was not playing in their local theatre. The only solution I could offer was that it would be available on TMN and Movie Central in the months ahead. While this did not always quell their anger and frustration, it at least provided them the possibility of seeing the film and sharing their and our history.
7862 As an aside, a group of RCMP veterans actually drove down from Ottawa to Toronto to see the film on its opening weekend.
7863 The point of this example is to illustrate that television was critical to "The Mountie." It allowed me to finance the film and reach audiences I was being denied theatrically.
7864 I can't overstate how many people approach Canadian feature filmmakers after their films have been shown on television versus their theatrical release.
7865 Television, with the help of the CRTC, is still Canada's town square. It's where we go to share stories about ourselves and others.
7866 TV is the lifeblood socially and economically speaking by which Canadians can catch glimpses of their history and share their stories. If we stop telling our own stories to ourselves, who do we imagine will?
7867 Thank you again for your time and attention. Merci, Madame et Messieurs.
7868 LE PRÉSIDENT : Merci beaucoup pour votre présentation.
7869 Mr. Vice-Chair of Broadcasting will have some questions for you.
7870 COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chair.
7871 I thought Jessica Paré's breakout role was "Hot Tub Time Machine."
7872 MR. CLARKSON: Well, in all honesty, the main reason why she did "The Mountie" was she resented the fact that she was constantly being treated as an object and in our film she plays a very wounded woman as opposed to one that's told to get naked in a hot tub that apparently goes through a time machine.
7873 COMMISSIONER PENTEFOUNTAS: I'm not sure that may have even been a Canadian production, but anyway -- I think it may have been.
7874 At any rate, listen --
7875 MR. CLARKSON: No, it wasn't.
7876 COMMISSIONER PENTEFOUNTAS: It wasn't?
7877 MR. CLARKSON: No.
7878 COMMISSIONER PENTEFOUNTAS: Okay. Is there a figure that you've placed on -- or a percentage of the tangible benefits that you would like to see going towards the Fund?
7879 MR. CLARKSON: This is not my area of expertise. If that's a number I can get back to you with after consulting with our caucus, that would be most appreciated.
7880 COMMISSIONER PENTEFOUNTAS: Okay.
7881 MR. CLARKSON: We've talked about some, but again, I --
7882 COMMISSIONER PENTEFOUNTAS: You're not bringing that forth.
7883 Just briefly, it may not be related but did you look into exposing your film through VOD? Given the difficulty for Canadian films in finding a screen in a theatrical release, many have suggested --
7884 MR. CLARKSON: Well, a television licence --
7885 COMMISSIONER PENTEFOUNTAS: Yes.
7886 MR. CLARKSON: Excuse me, sorry for interrupting.
7887 COMMISSIONER PENTEFOUNTAS: No, it's fine. Many have suggested that, you know, VOD may be a better route. It may even create a buzz whereby you get more screens thereafter.
7888 MR. CLARKSON: I will start with one answer, and then answer --
7889 COMMISSIONER PENTEFOUNTAS: Sure.
7890 MR. CLARKSON: -- move on to your next.
7891 Since we had the licence with TMN they have the on-demand window. There's TMN on demand. We tried to get Rogers. They weren't open to it.
7892 So typically to finance a Canadian film, you sell television, you bring on distributors or not, and so the window you're proposing, which makes a lot of sense, in some respects you're restricted from it, but that's an opportunity to sort of move back from that.
7893 Typically you're not allowed to have a film theatrically, which is really where you can get affordable national press coverage. Like unless we open "The Mountie" in theatres, the Globe and Mail isn't going to have myself on the front of its entertainment section.
7894 So from a marketing perspective theatrical is critical because it's how you get national awareness. There are very, very, very few, even HBO VOD shows, that are able to secure that kind of national awareness without being offered theatrically first.
7895 COMMISSIONER PENTEFOUNTAS: Okay. Because I think even "Goon," if I'm not mistaken, was offered on a VOD --
7896 MR. CLARKSON: It's a bit of a different model. You're talking about the Mark Cuban release made by a Canadian in Canada about hockey. It's a fun film.
7897 Mark Cuban, I guess, due to his positioning in the industry --
7898 COMMISSIONER PENTEFOUNTAS: Right.
7899 MR. CLARKSON: I was going to say because he has a lot of money, but I guess it's more he is trying new models, of which, you know, I'm happy to talk a bit about -- I like your five-year question just because I do think that's important, especially for producers in the future -- where he's putting films first on VOD and then actually releasing them theatrically.
7900 There was one recently, "Bachelorette." I think it was the Weinstein Company's first test where they actually put it on iTunes and then I think they gave it a small theatrical release a little bit after.
7901 Is there a big swing in the numbers because of that? Well, I mean I can speak to a person experience.
7902 A film we did, a documentary about the craft of film editing where we mixed Canadian films with Hollywood films and, you know, no one blinked, again, due to licences we had to be careful about how we released it in Canada and where it could -- what platforms it could be available, at what time.
7903 I'll use when we opened it in New York as an example. One thing very early on we did is we just attached the suffix ".com" onto our films. So my first film was "deadend.com." The joke was the ".com" is silent.
7904 So with "Edge Codes," we had a theatre. They booked it downtown New York, "edgecodes.com" on the marquee, and when the film was released and our director was doing his press he was also pushing it, that it was available for download online, sort of a new form of VOD. It wasn't VOD but, you know, something that made it more available.
7905 Well, that theatre owner got so mad he came up to us and said: "I never would have booked your movie if I had known it was available on other platforms." Well, after he held it over for five weeks he wasn't complaining.
7906 So this whole notion of cannibalizing one market from the other, I think it really just boils down to two things, awareness and access. And I think what, exactly as you state, VOD is so valuable to is it allows these films to anybody in Canada who has that service.
7907 COMMISSIONER PENTEFOUNTAS: Well, okay. So that may be a way of getting around the difficulty of finding a screen for theatrical release.
7908 That being said, in the case of "The Mountie," you had a hard time because you cut an exclusivity deal with TMN and it wasn't made available to other distributors. That may be something to think about down the road but it's out of this scope.
7909 MR. CLARKSON: But it is still that press problem, right, because people can't go or VOD it if they don't know about it and that's something that obviously our country and even our culture in some respects should maybe put more emphasis on.
7910 COMMISSIONER PENTEFOUNTAS: I understand.
7911 Another issue that we may have a chance to correct with this particular acquisition and that's exposure on the pay networks. I don't know if your Roundtable has an opinion or a thought on that. It's one thing to get the funding, it's another thing to actually impose X number of hours for Canadian films on the pay TV window as an example.
7912 MR. CLARKSON: The more hours, the better as far as we're concerned, but yes, absolutely, this is something that our membership feels should be pressed upon in terms of -- again, it's just availability and awareness.
7913 I mean I've grown up and constantly heard about how Canadians aren't interested in their own films. And yet, when I made a film that was a western, a down-the-middle western, it wasn't something that had anything risqué in it, you suddenly see that there's this swell of pride, people want to share their stories, first with themselves, and from that I do believe it blossoms out to the world.
7914 Inevitably it's the cultures that start to pay attention to their own cinema -- I'll use as an example. It becomes, you know, more popular elsewhere in the world, internationally. If we aren't interested in ourselves, who do we expect to be?
7915 COMMISSIONER PENTEFOUNTAS: Okay. So you would like to see more money going towards the Harold Greenberg Fund?
7916 MR. CLARKSON: That's the focus of our impetus. Yes, please.
7917 COMMISSIONER PENTEFOUNTAS: Appreciate it. Thanks so much.
7918 Mr. Chair.
7919 THE CHAIRPERSON: Thank you.
7920 Certainly, I appreciate, having been in charge of Canadian film policy while I was at Heritage, the importance of the various other windows to feature film policy.
7921 I think you're dying to answer my five-year question.
7922 MR. CLARKSON: Yes.
7923 THE CHAIRPERSON: So I'm going to give you a chance to do that.
7924 MR. CLARKSON: For me really it's this notion that platforms will probably be antiquated. I mean, again, as an example with films, I mean my first film "deadend.com" that we did in, what, '98, it was released in 2000 -- again, the ".com" was silent -- we were communicating with kids -- it centred around the issue of teen suicide and we were communicating with kids from Brunei. And I don't care what Canadian broadcaster you were then or now, you could not touch these kids.
7925 And so, again, as you see the merging, and I just don't believe in this cannibalization, as by my example of "Edge Codes" being held over for five weeks by the very theatre manager who gave me an earful, it's just everything will be available
7926 And I believe it was during the Rogers presentation that they were talking people expect everything, everywhere, and that will be a fundamental tenet -- if it isn't already, quite frankly, especially with the young -- in five years.
7927 THE CHAIRPERSON: Thank you. That's very good. Thanks.
7928 I don't think we have any other questions and so thank you for your participation.
7929 Just so everyone knows where we're heading we still have two participants, two interventions today before we break.
7930 Je pense qu'on va prendre une petite pause de 10 minutes, qui va permettre à madame Samson d'aller prendre une bouffée d'air frais à l'extérieur du Centre des Congrès.
7931 LE PRÉSIDENT : Et on va revenir peut-être à quatre heures moins 10. Ça va? Merci.
--- Upon recessing at 1538
--- Upon resuming at 1551
7932 LE PRÉSIDENT : Bonjour, Madame Samson.
7933 Je vois que vous avez l'air reposée. Vous avez passé l'été à la campagne?
7934 MME SAMSON : En campagne!
7935 LE PRÉSIDENT : Donc, bienvenue.
7936 Comme est l'habitude, je demanderais de vous identifier pour la transcription et de faire votre présentation.
7937 Oups! Votre micro!
7938 MME SAMSON : Puis-je demander une faveur à madame Roy?
7939 LE PRÉSIDENT : Oui.
7940 MME SAMSON : Madame Roy, puis-je réagir au commentaire sur la politique avant que vous partiez le «timer»?
7941 LE PRÉSIDENT : Inquiétez-vous pas. Faites votre présentation puis on va s'arranger.
7942 MME SAMSON : O.K. Merci.
7943 Alors Monsieur le Président, Monsieur le Vice-président, Madame, Messieurs les conseillers et membres du personnel bonjour.
7944 Je suis Claire Samson, présidente-directrice générale de l'Association des producteurs de films et de télévision du Québec.
7945 M'accompagne aujourd'hui, monsieur Jean Bureau... Pardon?
7946 LE PRÉSIDENT : Parce que j'ai entendu «campagne» plutôt que «compagne»!
7947 MME SAMSON : M'accompagne!
7948 LE PRÉSIDENT : Ah oui! Je suis désolé!
7949 MME SAMSON : Je ferai attention, Monsieur le Président, pour le reste de ma présentation.
7950 M'accompagne donc aujourd'hui monsieur Jean Bureau, président du conseil d'administration de l'APFTQ et madame Suzanne D'Amours, consultante au dossier et spécialiste des chiffres.
7951 Nous remercions le Conseil de nous permettre d'exprimer notre point de vue sur les différents en jeux que comporte la transaction Astral/BCE, particulièrement au niveau des contenus de production canadienne diffusés par les services qui font l'objet de cette transaction.
7952 M. BUREAU : Bonjour. Monsieur Blais, félicitations pour votre...
7953 LA SECRÉTAIRE: S'il vous plaît, ouvrez votre micro.
7954 LE PRÉSIDENT : Oui.
7955 LA SECRÉTAIRE: Merci.
7956 M. BUREAU : Monsieur Blais, félicitations pour votre nomination.
7957 Et bonjour Messieurs et Mesdames les conseillers et Monsieur le Vice-président.
7958 Comme nous l'avons exprimé dans notre mémoire, l'APFTQ appuie la transaction présentée devant vous.
7959 Il s'agit d'une transaction historique dans le sens qu'aucune des transactions en radiodiffusion faite au cours des dernières années au Canada n'impliquait autant le secteur de la production indépendante, une composante essentielle au système de radiodiffusion canadien.
7960 Vous comprendrez que l'APFTQ qui représente plus de 140 maisons de production indépendantes au Québec est donc très préoccupée par cette audience.
7961 La production indépendante au Québec est constituée d'entreprises qui produisent des émissions de télévision et du cinéma dans les deux langues: français et anglais.
7962 Les résultats d'audiences, autant pour les émissions télévisuelles que le cinéma sont exceptionnelles.
7963 Les Québécois aiment les productions télévisuelles et cinématographiques créées par eux et pour eux. Les résultats d'audiences exceptionnelles en font foi.
7964 Le succès de notre télévision rejaillit aussi sur notre cinématographie qui bénéficie du «star system» créé par le succès de notre télévision.
7965 Ce résultat positif découle d'un ensemble de facteurs dont certainement celui de la règlementation, mais aussi de la compétence et de l'expertise des artistes, artisans et producteurs qui ont su développer des contenus originaux qui nous ressemblent.
7966 Les entrepreneurs culturels que sont les producteurs doivent aussi développer des nouvelles applications et de nouvelles exploitations pour les émissions de télévision et les films qu'ils produisent.
7967 MME SAMSON : Nous tenons à préciser qu'Astral a toujours été un partenaire privilégié des producteurs indépendants au Québec.
7968 La décision qu'Astral a prise de ne pas produire pour elle-même ou de se créer des infrastructures de production a permis le développement d'un secteur de production indépendante québécois vigoureux.
7969 Cette décision qui a été bénéfique à l'industrie de la production indépendante a aussi bénéficié aux services spécialisés d'Astral qui démontrent des résultats financiers hors du commun. Ce qui a sûrement suscité l'intérêt de Bell de s'en porter acquéreur.
7970 Nous tenons aussi à informer le Conseil qu'Astral a été le premier radiodiffuseur à négocier et le seul à conclure une entente commerciale avec les producteurs indépendants du Québec confirmant son leadership et son intérêt envers la production indépendante de langue française.
7971 C'est donc dire que les producteurs membres de notre association souhaitent une continuité dans ces relations privilégiées avec le nouveau propriétaire que sera BCE. D'autant plus que ce dernier continuera de s'approvisionner auprès d'eux.
7972 C'est dans cet esprit que nous avons formulé nos recommandations au Conseil afin de nous assurer que cette transaction soit à la fois avantageuse pour l'industrie de la production indépendante, pour les consommateurs, pour les annonceurs et pour le système de radiodiffusion dans son ensemble.
7973 Nous avons pris connaissance avec beaucoup d'intérêts des différentes positions des intervenants dans ce dossier.
7974 Nous souhaitons vivement que le Conseil soit bien éclairé lorsqu'il devra rendre sa décision dans ce dossier fort controversé.
7975 Nous avons identifié trois consensus à l'intérieur de ces différentes interventions.
7976 Un premier se dégage nettement concernant la valeur de la transaction qui devait inclure les services à la propriété partagée.
7977 Le deuxième porte sur les bénéfices tangibles qui doivent être distribués prioritairement aux initiatives à l'écran.
7978 Nous sommes ravis de constater qu'en début d'audience, Bell a confirmé qu'elle modifiait sa demande initiale et acceptait d'inclure ses services en propriété partagée pour l'établissement des avantages tangibles, ce qui revient à remettre dans le système de radiodiffusion un montant additionnel de 40 millions de dollars en avantages tangibles. Une décision sage que nous apprécions puisqu'elle répond aux attentes que plusieurs formulaient.
7979 Le troisième consensus, il n'est pas ordinaire. C'est à quel point tout le monde a plaidé devant vous pour qu'il y ait règlementation.
7980 C'est un discours auquel on n'était plus habitués. Mais il semble y avoir consensus.
7981 Au chapitre des avantages tangibles, Bell propose maintenant de verser 46,2 millions de dollars qui représentent plus de 25 pour cent de la valeur des bénéfices tangibles à des activités qui ne sont pas des avantages à l'écran.
7982 Pour nous, il est clair que le Conseil ne peut acquiescer à cette proposition d'autant plus qu'un montant de 40 millions de dollars est prévu pour faciliter un plan de modernisation de la société Northwestel, une filiale à part entière de BCE.
7983 Doit-on rappeler la politique du Conseil sur les avantages tangibles qui prévoit que ceux-ci iront principalement à des tiers, dans ce cas-ci, les producteurs indépendants.
7984 De plus, Bell a ajouté un apport d'avantages tangibles qu'elle destine à la création d'un nouveau service de nouvelles de langue française.
7985 Nous ne pouvons supporter cette proposition puisqu'il s'agit là d'un autre avantage que Bell s'octroie à elle-même.
7986 Comment peut-on penser que des avantages tangibles puissent permettre de payer un lancement d'un nouveau service de nouvelles qui ne détient pas encore de licence?
7987 L'APFTQ s'attend à ce que le Conseil confirme au terme de cette audience sa politique sur les avantages tangibles. Une politique qui établit que les contributions en tant qu'avantages tangibles doivent représenter au moins 10 pour cent de la valeur de la transaction pour tous les actifs de services de télévision traditionnelle et services spécialisés.
7988 En évaluant les avantages tangibles en fonction des critères établis, le Conseil a fait preuve de constance et de rigueur en exigeant, un, que les dépenses proposées à titre d'avantages tangibles soient réellement des dépenses supplémentaires; deux que les dépenses en avantages tangibles soient attribuées à des projets et activités qui ne seraient pas lancés ou n'auraient pas lieu sans la transaction; et trois, que les demandeurs puissent démontrer que les dépenses proposées à titre d'avantages tangibles iront principalement à des tiers.
7989 Nous réitérons que la nouvelle proposition de Bell au niveau des avantages tangibles ne respecte pas toutes les attentes du Conseil en cette matière.
7990 Les avantages à l'écran ne représentent que 75 pour cent des avantages totaux en télévision. C'est très peu en regard des ventilations généralement proposées ou acceptées par le Conseil.
7991 Celles-ci prévoient que la majorité des avantages liés à la télévision (environ 85 à 90 pour cent) donne lieu à de la programmation à l'écran.
7992 Selon nous, Bell n'a pas encore apporté d'arguments valables pour justifier une part si minime d'avantages tangibles à l'écran.
7993 C'est pourquoi l'APFTQ demande au Conseil qu'il exige que Bell consacre 90 pour cent des avantages tangibles découlant de la transaction aux initiatives à l'écran.
7994 Notre demande est d'autant plus pertinente que les avantages tangibles proposés par la requérante pour le transfert des actifs du volet radio sont entièrement dévolus à des activités de développement du contenu canadien tel qu'exigé par la politique du Conseil.
7995 Quant à la ventilation linguistique.
7996 Concernant la ventilation linguistique des avantages tangibles, nous exhortons le Conseil de s'assurer que ceux-ci seront attribués au prorata de la valeur de la transaction, à savoir au moins 64 pour cent pour des initiatives de langue française.
7997 Ces fonds additionnels, devant servir à augmenter l'offre des services qui font l'objet de la transaction Astral / Bell, ne sont pas des fonds comme ceux du Fonds des médias du Canada, des fonds Bell, Cogeco et Quebecor reconnus par le Conseil comme étant des fonds EDR.
7998 Au contraire, ces argents, nous le répétons, doivent contribuer à augmenter l'offre de production originale canadienne à l'antenne des services qui font l'objet de la transaction.
7999 Une offre qui contribuera à augmenter l'apport de la production indépendante à la création d'émissions originales et l'intérêt des consommateurs pour ces services.
8000 Au chapitre du calendrier des versements, Bell proposait des durées variables de versements des avantages tangibles s'échelonnant de 4 à 10 ans et parfois des versements inégaux d'une année à l'autre alors qu'en radio, les versements doivent s'effectuer sur sept ans en versements égaux.
8001 Nous avons accueilli favorablement la proposition de Bell lors de sa présentation de verser les avantages tangibles alloués à des initiatives à l'écran sur une période de sept ans.
8002 A cela, nous ajouterions que nous souhaitons que des versements égaux au fil des ans.
8003 La production indépendante et les consommateurs québécois.
8004 Le Conseil ne peut ignorer l'importance de la production indépendante dans le succès des entreprises du Groupe Astral qui font l'objet de cette transaction.
8005 Pas plus qu'il ne peut ignorer l'intérêt des consommateurs pour ces services spécialisés qui doivent continuer d'offrir des contenus de qualité.
8006 Puisqu'Astral est une compagnie québécoise et que l'impact de sa vente se fera sentir surtout au Québec, nous demandons au Conseil d'exiger que Bell consacre 100 pour cent des avantages tangibles à l'écran à la production indépendante québécoise et ce, tant pour la programmation de langue française qu'anglaise.
8007 De plus, l'APFTQ s'attend à ce que le Conseil exige que Bell consacre tout son bloc d'avantages tangibles dédié aux émissions d'intérêt national, au financement de la production originale devant être diffusée sur les services visés par la transaction seulement.
8008 Étant donné que nous nous attendons que Bell produise annuellement des rapports concernant l'utilisation des avantages tangibles, ces sommes devraient être administrées directement par Bell pour faciliter la production des rapports.
8009 Comme beaucoup d'intervenants l'ont exprimé dans leurs mémoires, nous avions des inquiétudes concernant la possibilité d'un transfert de la direction de la programmation des services visés par cette transaction vers Toronto.
8010 Nous avons été rassurés d'entendre monsieur Crull lundi matin nous confirmer que monsieur Jacques Parisien se joindra à la nouvelle équipe de direction de Bell Média.
8011 Monsieur Crull nous a rassurés quant aux intentions de Bell de maintenir à Montréal le centre décisionnel lié aux propriétés de radio et de télévision.
8012 Nous souhaitons que le CRTC en fasse une condition de licence.
8013 Nous vous remercions de votre attention et nous sommes prêts à répondre à vos questions sans dire le mot «campagne»!
8014 LE PRÉSIDENT : Ah bon! D'accord! Nous le ferons.
8015 Donc, je vous taquinais un peu au début, Madame Samson.
8016 Je dois vous dire que peu importe les résultats, nous, nous sommes très heureux de vous compter parmi nous aux audiences du CRTC.
8017 MME SAMSON : Merci, Monsieur le Président.
8018 LE PRÉSIDENT : J'ai permis... j'ai invité d'autres participants à l'audience de préface à la discussion de la transaction que nous avons devant nous aujourd'hui de discuter d'une vision qu'ils auraient pour le système des communications en 2017.
8019 Quelle est la vôtre?
8020 MME SAMSON : A partir de récemment, je vous dirais que j'ai plus de facilité à projeter en politique sur 2017.
8021 Je vais laisser le président du conseil d'administration de l'APFTQ vous donner davantage de renseignements.
8022 M. BUREAU : Merci, Monsieur Blais.
8023 Je pense qu'au départ, au point de départ, on doit observer qu'on a une industrie qui est très performante au Québec, une industrie de production qui est performante au niveau des résultats d'écoute, qui est performante au niveau de sa création, qui est performante aussi au niveau de l'emploi des nouvelles technologies.
8024 On le voit par le résultat puis le succès de ces entreprises-là qui sont nos membres, les entreprises qui, aujourd'hui, produisent non seulement pour le Québec, produisent pour le Canada anglais, produisent également pour les marchés internationaux.
8025 C'est une tendance que l'on voit qui se développe rapidement au Québec et ça, c'est rassurant.
8026 Mais cette tendance se développe parce qu'on parle souvent - on y revient à quelques reprises dans notre document. On parle souvent du système de radiodiffusion canadien.
8027 Tout ça n'existerait pas, notre expertise n'existerait pas, les succès qu'on connaît n'existeraient pas si on n'avait pas un système performant de radiodiffusion.
8028 Et quand je parle de radiodiffusion, je l'entends au sens large. C'est-à-dire tout un écosystème réglementé qui permet aux créateurs de créer, qui permet l'existence à côté d'un voisin énorme et très performant, un géant du divertissement, les États-Unis.
8029 Ce système-là permet aux Canadiens et aux Québécois en l'occurrence, de prendre leur place, de développer leur contenu et de les financer, de les exporter aujourd'hui.
8030 Cet écosystème-là est fragile. C'est un écosystème qui aujourd'hui comprend tous les aspects mobiles de diffusion.
8031 C'est un écosystème qui comprend la diffusion par satellite, la diffusion par câble, la diffusion par internet, la câblodistribution, les chaînes spécialisées, les chaînes payantes, les chaînes digitales, les chaînes traditionnelles.
8032 Et qui également bénéficie de la mise en marché par tous les autres médias qui entourent ce système-là.
8033 Donc, on est un peu le fruit. Notre croissance puis notre performance, c'est le résultat d'un système en santé, un système canadien en santé.
8034 Et moi, quand je me projette dans l'avenir et que j'essaie de voir qu'est-ce que ce serait d'ici cinq ans, je pense que si on maintient, puis si on modernise la règlementation du système canadien, et si on continue à y faire attention puis si on continue à avoir des voix, des partenaires, des partenaires corporatifs, puis des partenaires créatifs, sérieux, responsables comme ceux qu'on a, je dirais.
8035 La plupart des partenaires dans l'industrie sont des gens sérieux, sont des gens qui ont prouvé des entreprises qui ont prouvé également leur sérieux.
8036 Bien, je pense que l'avenir est somme toute positif. C'est un avenir qui va être de plus en plus compétitif. On le voit aujourd'hui.
8037 Avec l'arrivée de l'Internet, on produit des films, on les livre. Puis le lendemain, ils sont diffusés en Espagne, le surlendemain, ils sont diffusés aux États-Unis et il en va de même pour différents types d'émission.
8038 Mes compétiteurs et les compétiteurs de nos membres aujourd'hui ne sont pas seulement nos collègues canadiens qui sont dans le domaine de la production, mais le monde entier.
8039 Et lorsqu'on a des réunions comme le MIP, le MIPCOM et d'autres marchés importants de programmes, on s'aperçoit qu'il y a un flot d'idées qui passent à chaque année et que si on veut être capable de développer ces nouvelles idées-là, puis ces nouvelles tendances puis d'avoir des succès en télévision, bien, il faut qu'on ait un système fort.
8040 Et nous, on pense aujourd'hui que la transaction de Bell et Astral va permettre de créer un autre joueur très fort au Canada qui aura les moyens financiers de supporter nos activités de création puis de production.
8041 LE PRÉSIDENT : Pouvez-vous ajouter, Madame Samson? Non? Ça va?
8042 O.K. D'accord.
8043 Vous avez parlé du rôle d'Astral par rapport aux producteurs indépendants, c'est-à-dire qu'Astral n'a jamais tenté de faire de la production interne.
8044 MME SAMSON : Non.
8045 LE PRÉSIDENT : Et évidemment, puisqu'il y avait peut-être une philosophie derrière ça de la part d'Astral, mais il y a aussi une certaine réalité du financement de production particulièrement en langue française au Québec, du fait que, bien que le fonds de médias permet la production interne, selon certaines conditions, le crédit d'impôt au fédéral permet un certain aspect.
8046 Mais le fait est que le crédit d'impôt au Québec ne le permet pas.
8047 MME SAMSON : Provincial, non.
8048 LE PRÉSIDENT : Et donc, est-ce que vous pensez que c'était véritablement un choix ou une conséquence de la réalité de la production québécoise au Québec?
8049 MME SAMSON : Bien, je pense que ça a été historiquement un choix de leur part.
8050 Premièrement parce qu'ils ont bien senti dès leur début qu'il y avait une industrie indépendante qui s'éveillait et qui se développait. Qui, probablement aussi leur permettait de ne pas se développer des infrastructures excessivement lourdes et peu flexibles avec du personnel permanent à temps plein.
8051 Faut se rappeler qu'à l'époque, les stations spécialisées, il y en avait pas d'autres. C'était une petite bibitte nouvelle qui n'existait nulle part ailleurs.
8052 Et j'imagine que c'était une décision d'affaires assez prudent que de ne pas investir dans des studios des infrastructures de production sachant que tout ça était disponible.
8053 Et en plus, je pense qu'ils avaient bien flairé le fait qu'en mettant en compétition 140 entreprises, les chances qu'ils puissent récoler parmi les meilleurs projets s'amélioraient grandement.
8054 Puis, ils pourront me corriger facilement. Je pense ça faisait partie des éléments de décision à l'époque.
8055 Et effectivement, la machine d'Astral, c'est une petite machine performante où il n'y a pas de pertes, il y a pas de temps perdu, il y a pas de «stand by». Sa production est faite à l'extérieur et je pense c'est plus léger comme modèle d'affaires, certainement.
8056 Mais je ne pense pas que même si au Québec Astral, les diffuseurs avaient eu accès au crédit d'impôt provincial, je ne pense pas que ça aurait été un incitatif suffisant pour faire changer leur modèle d'affaires.
8057 LE PRÉSIDENT : Là, nous faisons face à... c'est un peu comme en botanique, un croisement de deux ADN corporatifs.
8058 Avez-vous une crainte que cette philosophie pourrait évoluer dans une entité croisée entre Bell et Astral par rapport au rôle que cette nouvelle entité voudrait se donner dans la production interne?
8059 D'autant plus qu'avec une présence peut-être plus nationale, les contraintes dont on parlait qui découlent du crédit d'impôt québécois pourrait être perdu.
8060 Ça ne vous inquiète pas, possiblement d'avoir à faire face dans une entité mixte plus, la possibilité d'une production interne?
8061 MME SAMSON : Monsieur le Président, le risque existe toujours.
8062 Et je me rappelle en 2001, l'APFTQ s'est présentée devant le CRTC lors de l'acquisition de Vidéotron par Quebecor où nous avions énoncé cette crainte d'une plus grande concentration de production à l'interne chez TVA.
8063 On nous a accusés à l'époque d'avoir peur d'avoir peur. Et on n'a pas beaucoup tenu compte de nos craintes à l'époque.
8064 Le risque existe toujours et il est vrai sur papier qu'une filiale à part entière de Bell en Ontario peut produire et avoir accès au crédit d'impôt de l'Ontario.
8065 Cependant, si cette production-là ne reflète pas les attentes de l'auditoire québécois comme il est habitué de voir ces attentes rencontrées par les gens des programmes d'Astral, ça vaudra pas le coût pour eux de le faire.
8066 Mais, il y a théoriquement, techniquement le risque, il est là. Mais, on pense qu'il y aura des renouvellements de licence des stations d'Astral.
8067 Il y a un bloc de bénéfices tangibles qui est prévu pour une période de sept ans qui, comme on le pense, doit être accordé à des tiers, donc des producteurs indépendants.
8068 On peut penser que le risque, le gros risque, il est quand même pelleté par en avant pour au moins sept ans.
8069 LE PRÉSIDENT : D'accord.
8070 Vous avez l'intention de faire confiance aux activités que le marché va contrôler une situation où peut-être qu'il aurait une tentation de faire de la production interne, et vous avez confiance que ce sera pas le cas.
8071 MME SAMSON : On espère que ça ne sera pas le cas. C'est certainement une situation qu'on va suivre attentivement.
8072 On va voir ce que ça donne. On va pouvoir suivre.
8073 Et comme je vous le disais, il y aura des renouvellements de licence, des chaînes d'Astral.
8074 Si on pense qu'il y aura une tendance à négliger le marché québécois, on sera certainement les premiers à sonner l'alarme.
8075 LE PRÉSIDENT : D'accord.
8076 Vous étiez dans la salle tout à l'heure lors de la discussion avec monsieur Hennessy concernant la ventilation.
8077 Leur thèse était que si on suit les politiques du Conseil, que les avantages - parce qu'en fait, on retourne pas la licence, mais - ça se fait dans certaines juridictions, mais ça s'est jamais fait au Canada.
8078 Donc, lors des transactions de ce genre, on tente d'éliminer le processus d'octroi de licence et donc, les bénéfices devraient être reliés ou ventilés par rapport aux licences que nous avons devant nous dans le cadre de la transaction.
8079 Je crois que vous êtes d'accord avec cette approche?
8080 MME SAMSON : On est d'accord avec l'approche que les bénéfices tangibles devraient être directement proportionnels à la valeur des actifs tels qu'analysés par Price Waterhouse.
8081 LE PRÉSIDENT : Mais votre point de vue, vous êtes en désaccord avec le modèle...
8082 MME SAMSON : Oui.
8083 LE PRÉSIDENT : ... mis de l'avant par monsieur Hennessy ce matin.
8084 MME SAMSON : Oui.
8085 LE PRÉSIDENT : Basé sur les abonnements.
8086 MME SAMSON : Monsieur le Président, on pourrait faire l'analyse sur les cotes d'écoute. On pourrait faire l'ana... si on faisait l'analyse sur les cotes d'écoute, on aurait une autre sorte de chiffres.
8087 On peut le faire sur les abonnés comme il le propose. On peut le faire sur la valeur des actifs qui sont en cause, ce qui semble être, en tout cas, à notre avis, la valeur la plus neutre faite par une tierce partie neutre, experte.
8088 Donc, on peut pas se tromper beaucoup si on se fie à la valeur évaluée par Price Waterhouse.
8089 LE PRÉSIDENT : Mais une tierce partie pourrait aussi, d'une façon, avec beaucoup d'autorité, décider c'est quoi les...
8090 MME SAMSON : Bien sûr.
8091 LE PRÉSIDENT : ... le nombre d'abonnés.
8092 MME SAMSON : Bien sûr.
8093 LE PRÉSIDENT : C'est aussi un test critique.
8094 MME SAMSON : Oui.
8095 LE PRÉSIDENT : Donc, c'est quoi la philosophie sous-jacente de prendre une méthode de ventilation par rapport à une autre?
8096 MME SAMSON : Bien je pense que le Conseil, lorsqu'il a accepté la transaction BCE / CTV, jamais l'APFTQ ou les producteurs de Québec n'ont revendiqué une partie des bénéfices tangibles pour le Québec, pour la production francophone dans le dossier de BCE / CTV.
8097 Est-ce qu'on va aller détricoter BCE / CTV? Faudrait regarder les chiffres. Parce que si c'est le cas, je pense qu'ils nous doivent de l'argent.
8098 Non, mais on est tous comptables à nos heures.
8099 LE PRÉSIDENT : Vous me faites faire étouffer, Madame Samson!
8100 MME SAMSON : C'est mon nouveau rôle de politicienne, Monsieur Blais.
8101 LE PRÉSIDENT : Je vois bien que vous avez appris des choses!
8102 MME SAMSON : On apprend beaucoup sur la route!
8103 LE PRÉSIDENT : Oui, oui!
8104 Toujours est-il, j'ai discuté avec plusieurs gens du secteur de la production que - et d'ailleurs c'était la raison à la base du fait que BCE avait proposé de payer les avantages tangibles sur une longue période, plus longue période de temps qui semblait l'habitude du Conseil.
8105 Vous avez vu que ça, ça a évolué.
8106 MME SAMSON : Oui.
8107 LE PRÉSIDENT : Mais demeure le fait qu'il pourrait y avoir - parce que c'était l'idée d'origine de BCE que peut-être il y a un risque d'arriver avec trop d'argent dans le système en même temps et qu'il y aurait un genre de tsunami de bénéfices tangibles tout en même temps, puis après ça, bien, c'est la sécheresse.
8108 MME SAMSON : Bien, je vous dirais que dans le cas du marché du Québec, les bénéfices tangibles qui demeurent dans le dossier de la transaction BCE / CTV, on les verra pas au Québec, ces bénéfices tangibles-là.
8109 Donc, il n'y aura pas un tsunami de bénéfices tangibles francophones qui va arriver.
8110 Une période - certains ont proposé cinq ans ou même, le Conseil a questionné BCE sur une période de cinq ans, soit une période de licence.
8111 Nous autres, on pense qu'effectivement, sept ans c'est acceptable, c'est raisonnable, ça fait au moins une grosse baloune pendant cinq ans pour après faire le constat que l'industrie va pas bien.
8112 Sept ans, nous semblait assez raisonnable.
8113 Et de plus, sept ans, ça permet aussi pour les industries, de s'apprivoiser mutuellement.
8114 Si les bénéfices tangibles se font sur une période de sept ans, que Bell voit le bénéfice des investissements dans la production originale de qualité québécoise, après sept ans, il va continuer de vouloir maintenir des bonnes habitudes, des bonnes cotes d'écoute puis une business saine ultimement.
8115 Donc on pense que sept ans, c'est raisonnable. C'est un pari raisonnable pour tout le monde.
8116 LE PRÉSIDENT : Lors de votre présentation, j'ai lu au paragraphe26 que vous vouliez que les sommes devraient être administrées distinctement. Sauf qu'oralement, vous avez dit «directement».
8117 MME SAMSON : Qu'ils puissent être gérés par Bell.
8118 LE PRÉSIDENT : Oui.
8119 MME SAMSON : Mais d'une façon distincte pour les fins de reporting au Conseil pour que le Conseil puisse voir éventuellement comment ces sommes-là ont été investies, si les conditions ont été respectées, si ça se fait à chaque année d'une façon raisonnable et à quel type de projet ça a été affecté de façon...
8120 Et ultimement, nous souhaiterions avoir accès à ces rapports. Nous souhaitons que Bell puisse faire rapport sur la façon dont il dispose des sommes réservées aux bénéfices tangibles.
8121 LE PRÉSIDENT : Donc effectivement, vous ne préconisez pas une gestion par une tierce partie.
8122 MME SAMSON : Non.
8123 LE PRÉSIDENT : Comme d'autres le proposaient.
8124 MME SAMSON : Non.
8125 LE PRÉSIDENT : Qu'en est-il des documentaires? On le sait que Canal D avait une présence importante dans le marché.
8126 MME SAMSON : Ils font partie des ÉIN et on demande à ce que la totalité des bénéfices tangibles à l'écran s'applique sur des émissions d'intérêt national.
8127 LE PRÉSIDENT : Et vous êtes à l'aise que les règles qui sont par ailleurs en vigueur qui divise entre productions jeunesse, production documentaire dans l'écosystème actuel, peuvent fonctionner?
8128 Vous demandez pas une protection supplémentaire?
8129 Parce qu'il y a des producteurs de documentaires ou des gens qui oeuvrent dans ce domaine-là qui avaient demandé une production accrue étant donné la présence d'Astral à la fois avec Canal D, Historia.
8130 MME SAMSON : Oui.
8131 LE PRÉSIDENT : Dans le domaine documentaire.
8132 MME SAMSON : A partir du moment où le bloc d'avantages tangibles est affecté à des émissions d'intérêt national dont font partie les documentaires pour accroître le volume et la qualité des documentaires sur les chaînes en question dans notre transaction, je pense que les bénéfices vont apparaître assez rapidement du côté des différents genres.
8133 LE PRÉSIDENT : L'avantage d'arriver un petit peu plus tard dans la semaine, c'est qu'on a déjà déblayé beaucoup d'enjeux, Madame Sanson.
8134 MME SAMSON : M'hmm.
8135 LE PRÉSIDENT : Donc, ce sont mes questions...
8136 MME SAMSON : Bien sûr.
8137 LE PRÉSIDENT : ... pour le moment, de ma part.
8138 Mais peut-être que mes collègues en auraient.
8139 Monsieur le Vice-président?
8140 CONSEILLER PENTEFOUNTAS : Bonjour.
8141 Donc, on apprend des choses sur la route. C'est bien, Madame Samson?
8142 MME SAMSON : Oui.
8143 CONSEILLER PENTEFOUNTAS : Il y a également cette évidence, les voyages forment la jeunesse!
8144 MME SAMSON : Et maganent la vieillesse, je peux vous en assurer aussi.
8145 CONSEILLER PENTEFOUNTAS : Vous avez... une ou deux petites choses. Je vais essayer de pas m'étouffer comme le Président.
8146 Mais vous avez dit paragraphe9 - en parlant de jeunesse, on met nos lunettes!
«La transaction soit à la fois avantageuse...»
8147 MME SAMSON : Oui.
8148 CONSEILLER PENTEFOUNTAS : «... pour l'industrie et la production indépendante», je comprends ça, vous avez clairement fait le point sur ça.
8149 Mais pour les consommateurs, les annonceurs et le système de radiodiffusion dans son ensemble, parlez-en un petit peu plus, comment ça va avantager ces transactions, consommateurs/annonceurs et le système «at large».
8150 MME SAMSON : Mais je pense que...
8151 CONSEILLER PENTEFOUNTAS : En essayant de répondre à ce que nous avons entendu ce matin de Tellus et également de Rogers hier, et de Quebecor avant-hier, je pense.
8152 MME SAMSON : Bien je pense que le consommateur, tant et aussi longtemps que le système vise à améliorer son contenu aux oeuvres qui lui sont accessibles, il gagne le consommateur. Il gagne.
8153 Moi, je ne crois pas au scénario où Bell va augmenter le coût des services à un rythme effarant.
8154 Moi, je peux vous dire que personnellement, à chaque année, ma facture de distribution de télévision, elle augmente.
8155 Et je serais curieuse de savoir c'est quand la dernière fois qu'une chaîne spécialisée d'Astral a eu une augmentation de son tarif de gros.
8156 Mais je peux vous dire que régulièrement, moi, le coût pour les avoir, il augmente. Mais je suis pas sûre que ça s'en va jusque chez eux.
8157 CONSEILLER PENTEFOUNTAS : Ouf! Ouf! Ouf!
8158 MME SAMSON : Je suis vraiment...
8159 Monsieur le Vice-président, j'aimerais qu'on m'éclaire. Parce que je... et il n'y a pas juste à moi que ça arrive.
8160 CONSEILLER PENTEFOUNTAS : En tout cas. On parle de choses qu'on ignore. Alors...
8161 MME SAMSON : Mais je pense que si la qualité du produit est là, la diversité du produit est là, les services sont là, les consommateurs vont y gagner.
8162 CONSEILLER PENTEFOUNTAS : Eh bien! En tout cas, les marges et les bails(ph) de certains pourcentages élevés risquent de vous contredire. Mais continuons.
8163 Le consommateur, oui. Les abonnés qui paient plus cher de toute façon. C'est ça?
8164 Mais là, vous faites un petit peu l'argument à contre les EDR, à l'effet qu'ils chargent trop, puis ça revient pas aux producteurs ou aux diffuseurs?
8165 MME SAMSON : Bien, je ne suis pas sûre que... je ne suis pas certaine qu'à chaque fois que ma facture de distribution augmente, que l'augmentation qui m'est imposée se retrouve dans les poches des diffuseurs. Je pose la question.
8166 Si monsieur le vice-président que... de ne pas m'inquiéter, qu'à chaque fois que ma facture augmente de 0,25 $, que c'est un diffuseur qui a eu le 0,25 $ pour acheter puis de m'offrir un meilleur produit, permettez-moi d'en douter.
8167 CONSEILLER PENTEFOUNTAS : Alors, pour les consommateurs comme tels, la qualité du produit va s'améliorer sur l'écran.
8168 MME SAMSON : Oui.
8169 CONSEILLER PENTEFOUNTAS : Alors, ça les avantage.
8170 MME SAMSON : Ça les avantage.
8171 CONSEILLÈRE LAMARRE : Puis les annonceurs?
8172 MME SAMSON : Bien, les annonceurs, j'ai lu plusieurs mémoires. Vous savez, sur la route des fois, là...
8173 CONSEILLER PENTEFOUNTAS : Il y a du temps mort puis... oh! oui.
8174 MME SAMSON : Il faut manger, entre deux blé d'indes mettons.
8175 CONSEILLER PENTEFOUNTAS : Oui.
8176 MME SAMSON : J'ai lu plusieurs mémoires et il faut dire que la majorité des annonceurs sont plutôt d'accord avec la transaction et j'ai entendu les argumentaires de dumping.
8177 CONSEILLER PENTEFOUNTAS : Oui.
8178 MME SAMSON : Il faut savoir une chose, là, au Québec, le dumping en publicité, là, il s'en fait depuis 35 ans, minimum. Moi, ça fait juste 40 ans que je suis dans la business, mais il s'en fait depuis au moins 35. Peut-être que les cinq premières années j'étais trop niaiseuse, je ne l'ai pas vu.
8179 CONSEILLER PENTEFOUNTAS : Le dumping...
8180 MME SAMSON : Mais il s'en fait depuis...
8181 CONSEILLER PENTEFOUNTAS : Dans le but de?
8182 MME SAMSON : De couper les prix, dans le but d'enlever le million et demi de X annonceurs à son concurrent, on va vendre moins cher puis après ça on va rajouter soit de la radio moins cher ou de l'imprimé moins cher ou du journal ou je ne sais trop quoi. Ça se pratique depuis 35 ans et je suis convaincue que ça se pratique encore de façon courante. Maintenant, ils donnent...
8183 CONSEILLER PENTEFOUNTAS : L'intégration verticale à l'oeuvre.
8184 MME SAMSON : Oui, oui. Là, ça dompe soit de l'internet, ça dompe de l'imprimé, ça dompe de l'affichage. Ça dompe du Publi-Sac, de la radio, mais ça s'est toujours fait.
8185 CONSEILLER PENTEFOUNTAS : Hum, hum.
8186 MME SAMSON : De toute évidence. Et j'imagine que la concurrence va faire en sorte que ça ne disparaîtra pas demain matin. Sauf qu'à partir du moment où il y a des joueurs... et d'ailleurs, à ce chapitre-là, là, moi je pense que le CRTC devrait demander un rapport confidentiel à chaque année "for its eyes only" là.
8187 CONSEILLER PENTEFOUNTAS : Oui?
8188 MME SAMSON : Sur l'évolution du coût par point ou du PEB dans trois quatre marchés type au Canada, de sorte que... parce que c'est trop facile maintenant de dire quand on est des entreprises multi-disciplinaires, c'est trop facile de démontrer, de poster ses chiffres de ventes, là, soit de le ventiler tous en print ou tout en PB ou tout en radio au détriment d'un autre de ses médias, c'est trop facile, là.
8189 Écoutez, même une mauvaise comptable comme moi, je serais capable de le faire, là.
8190 CONSEILLER PENTEFOUNTAS : O.k.
8191 MME SAMSON : C'est trop simple. Mais de façon ne serait-ce que pour voir de quelle fan ça va évoluer. Ce n'est pas long à faire comme rapport, mais ça donnerait une indication certainement au Conseil de la façon dont ça évolue, ne serait-ce que le coût par point entre Montréal, Toronto, Vancouver puis dans quelle mesure les volumes disponibles de points d'écoute sont vendus ou pas vendus ou sous-vendus.
8192 Ça pourrait être... en tout cas, ce n'est qu'une forme d'intelligence qui pourrait ultimement, en tout cas, permettre au Conseil. Je ne demande pas à ce que ces données-là soient rendus publiques puis que les concurrents connaissent les données des autres, mais ne serait-ce qu'éclairer le questionnement du Conseil à l'avenir parce que c'est certainement un topo qui va être récurrent.
8193 CONSEILLER PENTEFOUNTAS : O.k. Ce serait une étude intéressante.
8194 Je veux attirer votre attention au paragraphe 25 où vous dites que l'impact de sa vente se fera sentir surtout au Québec.
8195 MME SAMSON : Oui.
8196 CONSEILLER PENTEFOUNTAS : Et, conséquemment, vous demandez à ce que 100 pour cent des avantages tangibles à l'écran se trouvent dans les productions indépendantes soit dans la langue anglaise ou française.
8197 MME SAMSON : Produites au Québec.
8198 CONSEILLER PENTEFOUNTAS : Un produit...
8199 MME SAMSON : Produites au Québec.
8200 CONSEILLER PENTEFOUNTAS : Mais si on suit ce qui suit surtout dans l'avant-dernier paragraphe où vous êtes contente de voir que monsieur Parisien restera.
8201 MME SAMSON : Oui.
8202 CONSEILLER PENTEFOUNTAS : Et suite aux assurances de monsieur Cope à l'effet que très peu de choses ont changé et puis tout ce qui se passe au Québec va continuer de se passer au Québec.
8203 Mais il n'y aura pas vraiment d'impact. Alors, est-ce que ça n'enlève pas la justification de dépenser 100 pour cent des avantages tangibles au Québec?
8204 MME SAMSON : Bien, ça pourrait être le statu quoi sur les investissements actuels d'Astral au Québec, mais si les bénéfices tangibles ne se traduisent pas en actions supplémentaire au Québec, là, il n'y a plus de bénéfices tangibles pour le Québec alors que cette transaction-là touche majoritairement le Québec.
8205 CONSEILLER PENTEFOUNTAS : De quelle façon ça touche majoritairement au Québec si la structure qui est là présente d'Astral à Montréal restera, d'après les dires de Bell et Astral?
8206 MME SAMSON : Oui.
8207 CONSEILLER PENTEFOUNTAS : Premièrement, il y aura très peu d'impact.
8208 Deuxièmement, si on suit les chiffres qui ont été offerts et par le Conseil et par le CMPA à l'effet que c'est pas mal 50-50 au niveau des abonnés, au niveau des revenus, entre le Canada anglais et le Canada français, alors comment justifier 100 pour cent des avantages tangibles sur l'écran, que ça soit dépensé au Québec parmi les producteurs indépendants?
8209 MME SAMSON : Parce que ces chaînes-là sont des chaînes québécoises avec du contenu québécois et qui sont populaires grâce à leurs contenus. Donc, ça serait vraiment pas juste si Astral maintenant que ses investissements traditionnels au Québec, mais que toute la somme, le portefeuille de bénéfices tangibles soit dépensé à Toronto.
8210 CONSEILLER PENTEFOUNTAS : Oui, mais sauf que la moitié des revenus émane des chaînes de langue anglaise.
8211 M. BUREAU : Si vous me permettez, monsieur Pentefountas.
8212 CONSEILLER PENTEFOUNTAS : Oui, allez-y.
8213 M. BUREAU : Je tiendrais à ajouter à ça qu'il y a un argumentaire de création de valeurs, un argumentaire important au niveau de la création de valeur quand on pense à comment cette entreprise-là est née ici à Montréal. Puis on recule 50 ans en arrière avec les frères Greenberg.
8214 CONSEILLER PENTEFOUNTAS : Non, non, je comprends tout ça.
8215 M. BUREAU : Vous connaissez l'histoire.
8216 CONSEILLER PENTEFOUNTAS : Hum, hum.
8217 M. BUREAU : Nous, on pense que toute cette création de valeurs-là a été faite avant, là, qu'on pense à Movie Network, FirstChoice et puis les actifs qui sont au Canada anglais, là.
8218 CONSEILLER PENTEFOUNTAS : Hum, hum.
8219 M. BUREAU : L'entreprise a été bâtie ici par des Montréalais, par des Québécois avec le soutien de la production indépendante. On pense au départ, au début de ce qu'était Astral dans les premières années, un producteur justement indépendant, propriétaire de laboratoire.
8220 Alors, toutes ces années-là sur 50 ans il y a eu une création de richesse à laquelle a participé la société québécoise; pas juste les producteurs indépendants, mais toute la société québécoise. Et on pense qu'il est juste qu'en regard de ça de penser que les retombées de la vente de cet actif-là au niveau culturel, reviennent au Québec.
8221 Mais on est conscients également qu'il y a des services de qualité qui sont de langue anglaise, mais je pense que c'est un argument de taille quand on pense à la création de la valeur, aux efforts que les Québécois ont faits au niveau de leurs taxes parce qu'il y a eu de la création de contenu qui s'est faite à partir des impôts des Québécois et puis que cette compagnie-là aient pu réussir grâce aux talents québécois.
8222 CONSEILLER PENTEFOUNTAS : Oui, sauf que si on suit les principes qui motivent les avantages tangibles et si on commençait à zéro aujourd'hui, on accordait les licences, mais les avantages tangibles pour le Movie Network puis HBO et autres, on paierait ces avantages ailleurs qu'au Québec nécessairement.
8223 Mais, écoute, je pense qu'on a assez fait le tour de ce jardin-là.
8224 MME SAMSON : Oui. Déjà, monsieur le vice-président, d'entrée de jeu, les conditions de licence d'Astral ne requièrent pas d'Astral de s'approvisionner au Québec. C'est pour sa programmation telle qu'on la connaît aujourd'hui.
8225 C'est une tradition, c'est un modèle d'affaires qu'ils ont développé en partenariat avec les producteurs indépendants, mais ce n'est pas une obligation.
8226 Alors, si en plus,, et là vous nous mettez devant un réel danger, si d'un côté, leur programmation traditionnelle n'est pas nécessairement acquise au Québec et que, en plus, il y a une partie du bloc de bénéfices tangibles qui peut s'envoler ailleurs, il ne reste plus rien pour la production québécoise dans ce "deal".
8227 CONSEILLER PENTEFOUNTAS : Je comprends votre préoccupation, madame.
8228 MME SAMSON : Là, vous m'avez fait peur.
8229 CONSEILLER PENTEFOUNTAS : Merci beaucoup. Non, non. J'ai cet effet sur certains, mais ça va.
8230 LE PRÉSIDENT : Madame la conseillère Lamarre.
8231 CONSEILLÈRE LAMARRE : Merci beaucoup. Bonjour.
8232 MME SAMSON : Bonjour, madame.
8233 CONSEILLÈRE LAMARRE : Madame Samson, une question rapidement, là, pour clarifier le dossier.
8234 Au paragraphe 14 de votre présentation, là, cet après-midi, la dernière phrase: «Comment peut-on penser que des avantages tangibles puissent permettre de payer un lancement d'un nouveau service de nouvelles.»
8235 Pour être claire, vous n'avez rien contre le concept voulant que BCE décide de partir un service de nouvelles continues en français, une fois que la transaction est complétée.
8236 Ce à quoi vous vous objectez, c'est qu'il comptabilise ça dans les avantages tangibles?
8237 MME SAMSON : That's it. Moi, je pense que s'ils souhaitent le faire, ils peuvent le faire. Ça devrait donner lieu à une audience normale du CRTC, permettant à toutes les parties intéressées de se prononcer parce qu'on n'a pas entendu RDI puis LCN nécessairement parler là-dessus puis il n'y a pas de licence qui existe.
8238 Est-ce que le Conseil octroierait une licence?
8239 CONSEILLÈRE LAMARRE : Ça resterait à voir.
8240 MME SAMSON : Ça resterait à voir, mais même si c'était le cas, ça ne devrait pas être financé à même les bénéfices tangibles.
8241 CONSEILLÈRE LAMARRE : Je vous remercie. C'est tout, monsieur le président.
8242 LE PRÉSIDENT : Mesdames, messieurs, merci beaucoup. Ça complète nos questions. Merci pour votre participation.
8243 MME SAMSON : Merci beaucoup.
8244 LA SECRÉTAIRE : Merci.
8245 I would now ask Media Smarts to come to the presentation table.
8246 THE CHAIRPERSON: So, welcome. Again, for the transcripts, please identify yourself and then make your presentation, please.
8247 MS WING: Thank you very much for having us here this afternoon. Good afternoon. Bonjour, Mr. Chairman and Commissioners. I am Cathy Wing, the co-Executive Director of Media Smarts, Habilo Médias. We are a Canadian not-for-profit centre for digital and media literacy and you may remember us as Media Awareness Network which was our name for the past 16 years, until we re-branded in May.
8248 And when we presented our name to the full Commission in February, they were very helpful in helping us choose a French name and I hope they like it. Thank you for your help.
8249 M. CARRIER : Bonjour. Mon nom est Serge Carrier. Je suis le directeur du Développement des affaires et des services sur mesure de la Société de formation à distance des Commissions scolaires du Québec.
8250 Je suis ici parce que depuis plus de 25 ans je m'intéresse aux médias, aux technologies et à l'éducation et en 1996 j'ai eu le plaisir d'être invité à joindre le Conseil d'administration de ce qu'était à ce moment-là Media Awareness et qui s'appelle aujourd'hui Media Smarts. Donc, je vais avoir le plaisir de participer à cette rencontre.
8252 MS WING: In our remarks, we wish to address the importance of digital and media literacy to Canadian Society and the media regulatory system and to explain how tangible benefits for our organization within the context of this application meets the interest of the Canadian Broadcasting System and consumers.
8253 Media Smarts Vision is that children and youth have the critical thinking skills to engage with medias active and informed digital citizens. We work towards this goal by developing resources and programs to educate youth and adults on a wide range of media issues.
8254 We believe in a shared responsibility between the public and private sectors and communities to ensure that the interests of youth and families are best served.
8255 We grew out on the CRTC television violence initiative in the early 1990s. The Commission's policy on this issue stated that while industry codes, classification systems and technology would play a role, public awareness and media literacy programs represented the primary solution to addressing the portrayal of violence in the media.
8256 The Commission also encouraged programmers and distributors to deepen their involvement in media literacy and public awareness stating that it would accept funding from third party organizations directly involved in media literacy as a tangible benefit at the time of transfers of ownership or control of broadcast undertakings.
8257 Since this directive, Media Smarts has been the recipient of tangible benefits packaging totalling $3.3 million. These funds have provided critical core funding for our organization, providing a life line as Federal government funding has decreased.
8258 Our current benefits funding will sunset in two years, leaving Media Smarts with no source of core funding at a time when we are facing increasing demand for our digital literacy programs and resources.
8259 Media Smarts approached Bell for consideration as a recipient of tangible benefits arising from the Astral Media transaction and we note that Bell, historically, a strong supporter of Media Smarts did not include us in the current benefits package.
8260 As the lines between traditional and new media become blurred and digital technologies become increasing essential to full participation in our society, the definition of media literacy has expanded and has now generally built on three principles.
8261 The skills and acknowledge to use the variety of digital media, such as a computer and mobile phone, internet technology, the ability to critically understand media content and applications and the knowledge and capacity to create the digital technology.
8262 It's now widely accepted that people with low digital literacy skills and knowledge are marginalized, economically and socially. The CRTC's 2011 report on convergent stated that Canadians with low digital literacy skills will be challenged to fully participate in a digital economy and they face impediments to engagement and an increasingly digital society.
8263 These people have lower adoption rates for broad band and wireless services, recent work at another length links individuals capacities to engage with technologies with their technology adoption patterns and they are also vulnerable to on-line privacy invasions and security and safety risks.
8264 Conversely, digitally literate citizens and consumers are more likely to have increased confidence and trust in the on-line marketplace, exercise informed choices and on-line in digital media environments, protect themselves and their families from unwanted inappropriate and unsafe content and have enhanced capacity to remain abrasive technology developments and use technology effectively to create and innovate.
8265 In the Government of Canada's consultation on the strategy for the digital economy, many participants spoke about the critical need for inclusion of digital literacy and a national strategy, including the office of the Privacy Commissioner, the internet registration authority, entertainment software association, Ontario media development corporation, Canadian library association, high tech and the list goes on and on.
8266 In fact, it's hard to find anyone that doesn't agree that media literacy skill, digital literacy skills are critical to the health of our economy in society. However, there is no coordinated effort between government, industry and education to support digital literacy, which means that Canada once a pioneer in this field is falling behind.
8267 Over the years, you've seen the sun-setting of various innovative federal government programs, many initiated under Industry Canada ciber wide strategy which supported the development of digital literacy skills, including school mat, community access program and franco-communautaire virtuel program.
8268 Currently, there are various digital media policy areas right across several departments, including ciber security spam, child sexual exploitation, copyright, on-line hate, content creation and work force skills development. But what's needed is a digital strategy to bring all these pieces into a comprehensive approach which includes digital literacy.
8269 There has been increased recognition of the importance of digital and media literacy in the policy agendas of regulators around the world with many appreciating the important role education and awareness play and alleviating more intrusive regulatory involvement and social policy matters.
8270 European regulators, for example, have moved away from censorship as a form of protection and towards the provision of consumer advice and the advocacy of media literacy.
8271 A number of countries have embraced digital literacy as a core component of a Communications Policy and their national digital strategies. For example, the UK's digital strategy digital briden clearly articulates the policy responsibilities of the regulator of com and one of coms key role is to improve media and digital literacy across the U.K.
8272 The Australian government's digital plan future direction identifies the need for a digitally empowered confident and literate community and recognizes the regulators leadership role in supporting digital literacy through research public education and building cooperation between stakeholders.
8273 In the U.S. CFCC's connecting America plan focuses on supporting broad band con activity and digital literacy initiatives to maximize the economic and social games of broad band adoption.
8274 With media content quickly migrating to platforms outside of traditional regulatory frameworks, digital and media literacy skills are more critical than ever before. Canadian parents and consumers need support in adapting to the rapid changes and digital technologies and in understanding the issues of rising from new media digital media platforms and services.
8275 As noted in a recent CRTC commissioned report on over-the-top OTT services, because Canadian content standards for ethic sexual stereotyping violence and equitable portrayal don't apply to these services. Parents by necessity now play an important role as content filters for their children.
8276 The report was on to recommend using Media Smarts to provide information about OTT services for parents.
8277 The CRTC has a long history of promoting digital and media literacy as it did in its television violence directive and again in 1999 with its exemption order on new media broadcasting undertakings.
8278 The public notice that accompanied this order stated that awareness and knowledge of the benefits of the internet as well as the existence of offensive content are powerful tools in the hands of users.
8279 A CRTC commissioned paper in 2011 on convergence trends noticed the important function of regulators in supporting the development of literacy skills, stating governing bodies and regulators have a role to play in promoting digital literacy and encouraging citizens to access and utilize digital information, communications and technologies.
8280 We note that the CRTC's new three-year plan has a strong focus on consumers. We hope that in addition to the protection of consumer rights, that there is an acknowledgement of the need for consumer empowerment through education and awareness efforts.
8281 In closing, we respectfully ask that the Commission recognize the importance of digital and media literacy as it has in the past to encourage media and communication companies to support digital literacy initiatives both through sponsorship and benefits packages.
8282 Over the years, our sponsors and benefit factors have become our biggest champions and in many cases we've worked closely with them to produce programs for their customers. So, we highly value our relationships with them.
8283 We also ask that the Commission support Media Smarts as an appropriate recipient for funding in a revised tangible benefits package in this application, should one be required.
8284 We thank you for the opportunity to express our views on this important matter.
8285 THE CHAIRPERSON: Thank you very much for your presentation. It's true we have put a new emphasis or refocused emphasis on consumers. Commission always has the interest of consumers at heart. But I think we are also thinking about citizens and creators and probably we may think that maybe this is more of a citizenship issue than a consumer issue. Would you agree?
8286 MS WING: It's both and because we focus mostly on children and youth, we don't like to refer to them as consumers, even though lots of people do.
8287 THE CHAIRPERSON: Yes.
8288 MS WING: We think of them as citizens and we want them to grow up to be highly engaged citizens in this new digital environment.
8289 THE CHAIRPERSON: Huh, huh.
8290 MS WING: We know from our own research that they actually aren't actually the whole notion of a digital native. You know, the evidence is showing us that actually youth are not using media in a highly engaged way, in a creative or innovative way or in an informed and safe way.
8291 So, I think that this is a role that we all -- this is an area that we all have a role to play in supporting that kind of education.
8292 THE CHAIRPERSON: Indeed. I believe commissioner Denton will have some questions for you.
8293 COMMISSIONER DENTON: So, I'll be brief. How much do you need?
8294 MS WING: Two million.
8295 COMMISSIONER DENTON: A year?
8296 MS WING: Two million would sustain the organization for five years.
8297 COMMISSIONER DENTON: Okay. And the second question it's not for me to ask and you don't have to answer, but have you spoken to the Canadian Internet Registration Authority?
8298 MS WING: Yes. Actually, they're one of our sponsors.
8299 COMMISSIONER DENTON: Okay.
8300 MS WING: And they are actually supporting our research at this time, yes.
8301 COMMISSIONER DENTON: Okay. Well, it causes just -- I will not ask you further. Thank you.
8302 MS WING: Thank you.
8303 THE CHAIRPERSON: Your funding model, the $2 million you would leverage more funding from other donors. Is that how you work?
8304 MS WING: We have corporate sponsors, a lot of them from the broadcasting and telecom industry and we have a lot of project funding.
8305 THE CHAIRPERSON: Right.
8306 MS WING: So, but we do not have core funding and that is why the benefits have been critical for us sustaining the organization.
8307 THE CHAIRPERSON: Because it's get to core where most departments and agencies have tended its project funding, which cannot any more be core funding.
8308 MS WING: Absolutely.
8309 THE CHAIRPERSON: Okay.
8310 MS WING: Yes.
8311 THE CHAIRPERSON: I see. I remember your housekeep PSA fund.
8312 MS WING: Actually it wasn't ours. I am sorry to say.
8313 THE CHAIRPERSON: Wasn't it? I thought it was.
8314 MS WING: It was concerned and turned to advisors. So, we do work with closely as well, but, yes, they do wonderful PSAs and that was one of their best.
8315 THE CHAIRPERSON: Well, you should just credit for it, then.
8316 MS WING: Okay.
8317 THE CHAIRPERSON: Thank you very much. I think those are our questions and I am sure people have been following your intervention closely.
8318 MS WING: Thank you.
8319 THE CHAIRPERSON: Thank you. I think that ends the interveners that we have to consider today.
8320 Tomorrow will be our final day of hearing, but it will be a long one because we still have a lot of interventions. So, we will resume at 0830 tomorrow morning.
8321 Thank you.
--- Whereupon the hearing adjourned at 1648, to resume on Friday, September 14, 2012 at 0830
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