:
Thank you, Mr. Chairman.
Members of the committee, good afternoon. On behalf of Kirstine Stewart and Sylvain Lafrance, I'd like to thank you for your invitation to talk about the changing media landscape and what it means to the public broadcaster.
Let's begin with new platforms. At CBC/Radio-Canada they are an opportunity. They enable us to reach more Canadians and engage with them in more meaningful ways than we ever could.
As we said in our submission to the government's digital economy consultation in July 2010, CBC/Radio-Canada is becoming a catalyst for both the creation and the consumption of Canadian digital content.
Today I could spend some time giving you big numbers, like 20 million hits to content on CBC/Radio-Canada's YouTube channel, or 7 million unique visitors to our digital platforms every month. But numbers don't really describe the actual transformation that's taking place.
CBC/Radio-Canada is becoming more than a broadcaster. We are now a meeting place. Every day our digital content is bringing Canadians together, creating new links between the public broadcaster and the public we serve.
Last month, for example, Canadians watched our Remembrance Day tribute to Canada's fallen soldiers in Afghanistan with the television documentary We Will Remember Them on our French and English networks. Canadians are still connecting with that program on our cbc.ca website, where each soldier has a web page put together by their families and friends, and audiences can add their thoughts on what that sacrifice has meant.
When we heard last year that the life expectancy of Canadians was declining, we decided to get involved. In January, CBC will be launching Live Right Now, a six-month, multi-platform initiative to help Canadians live healthier lives. We've created it in partnership with eight non-profit organizations like Breakfast for Learning, ParticipAction, and the Canadian Diabetes Association. It's built around a new online social network where Canadians can find advice and inspire each other to reach their goals.
They'll be able to sign up for the Million Pound Challenge, a group pledge to lose a million pounds by Canada Day.
Run Run Revolution will follow middle school students across the country training for a long-distance race.
In January, Village on a Diet will follow the residents of Taylor, British Columbia, who with the help of nutritionists and health experts inspire each other to get healthy.
That's how we're using multi-platforms these days to engage Canadians. But our success depends on that content being accessible. I believe this is where vertical integration poses some challenges.
[Translation]
CBC/Radio-Canada is now the only national broadcaster not owned by a cable or satellite company. We have concerns about the control and distribution of content by these integrated companies: how do we ensure Canadians will have equal access to a diverse range of Canadian content in this new environment?
That's part of the reason why we, at Radio-Canada, created TOU.TV last January. The video-on-demand platform is the only place where Canadians can find an incredible variety of dramas, documentaries, animation and websites from francophone public broadcasters the world over. TOU.TV is the new meeting place.
And the response to this initiative has been overwhelming: it has been critically acclaimed as the best website of the year and well received by Canadians who have watched over 18 million programs in 11 months.
Think about this: with the important exception of radio, virtually all Canadians now depend on cable, satellite, phone and Internet service providers for their information, enlightenment and entertainment.
And strangely, so do we. CBC/Radio-Canada depends on these companies to ensure that our content is available to Canadians. Of course, we've negotiated agreements with some distributors, such as Rogers, Quebecor and Bell, but we still have problems making our local programming available to Canadians.
Local stations are where our connection to communities is often the deepest. We think it is an essential part of our public broadcasting mandate. Yet satellite subscribers in Prince Edward Island can't watch their local Charlottetown CBC station because it's not offered by either Bell Expressvu or Shaw Direct. In Quebec, Radio-Canada has six local TV stations. Bell carries only three of them on satellite. Shaw carries just one.
A strange situation: it's frankly counter-productive when the CRTC is trying to increase the amount of local content through the Local Programming Improvement Fund, but subscribers can't see the content that's created. This is a completely ineffective system.
We know the CRTC is looking at this situation. We believe satellite carriage of these local stations should be guaranteed.
Even the success of TOU.TV depends on the streaming offer by Internet service providers. So what if an ISP feels online video is taking up too much bandwidth on the Internet and starts to throttle back the speed of content? How can one ensure that vertically integrated companies don't give preferential treatment to their own properties?
We believe the only way is through effective regulatory safeguards that ensure Canadians have access to Canadian content regardless of who owns the distribution network.
[English]
We understand why these companies are integrating. They are adapting in order to find their way in the digital environment. So are we. But we also have a statutory responsibility to provide a wide range of programming that informs, enlightens, and entertains Canadians. That's our public service mandate, and it influences everything we do, every decision we take.
We've told you before about the financial challenges we faced and managed. I won't dwell on those issues today. We need to look ahead and invest more of our resources in creating content on all media platforms, so that we can continue to build and nurture this public space where Canadians interact. In order to do that, we needed a road map to guide us in the digital environment. We'll be sharing our strategy with Canadians in the new year.
For now, I will simply tell you that three principles will guide our thinking. Number one, we will create and deliver more original, quality Canadian content. Number two, we will reinforce our presence in Canada's regions. And number three, we will expand how we use our online platforms to engage Canadians.
The bottom line is this: CBC/Radio-Canada is well positioned to be a powerful catalyst in the creation and consumption of Canadian digital content. To achieve this, we would appreciate your help in three areas. First, we require support for stability in our funding, particularly the $60-million envelope that is so crucial to our Canadian programming successes. Second, we would like guaranteed carriage of national and local television signals so that satellite subscribers have access to the local programming we offer. Lastly, we need effective regulatory safeguards to ensure that digital platforms bring Canadians more choice and diversity, not less.
Thank you for your time.
[Translation]
I will be pleased to take your questions.
:
Thank you very much, Mr. Chairman.
Welcome Mr. Lacroix, Mr. Lafrance and Ms. Stewart. It's a pleasure to see you here in this committee again to talk essentially about convergence.
In your presentation document, Mr. Lacroix, you say: "We have concerns about the control and distribution of content by these integrated companies. How do we ensure Canadians..." When you say concerns, I sense that that's a euphemism. Usually when we say we're concerned, our concerns are clear and they are misgivings.
It is also difficult not to talk to you about Quebecor, which is the symbol of convergence in Quebec. That business has been around for much longer than any radio or television broadcasting company even in Canada. The convergence of Quebecor started in the early 2000s, whereas the rest of Canada got into convergence only a few years ago.
Quebecor is established in Quebec, at least as a cable company, where 60% of households are hooked up to Videotron, which is a lot. That doesn't leave a lot of room for the others, which gives it real power, about which some organizations have come to speak to us here.
As we know, Quebecor owns the TVA network and the radio network that is your main competitor, in addition to magazines and newspapers, and the cable undertaking I just mentioned, and is now operating in the wireless field. We sense that this business is extending into virtually all areas of communications and telecommunications.
I would like you to talk to us about the problems you're experiencing because, as I told you earlier, when I saw the word "concerns", I thought there was quite a lot more behind that word. I would like you to tell us not only about the problems, but also about the solutions that have previously been considered in Quebec or that the Standing Committee on Canadian Heritage could consider.
Thank you for coming this afternoon.
This has been a very interesting study. I must say, at the start, that I think the CBC has certainly led the way in many areas in terms of new platforms--i.e., the original iPod downloads. Any show that you want to be able to hear, you're hearing it in multiple platforms. I think we're seeing right across the spectrum with the private broadcasters that they're exploring more and more new ways.
The question of importance for us, in terms of dealing with suddenly very large integrated empires that are dealing with control of the platforms and content, is on the anti-competitive nature and the potential problems.
I always think back to one of CBC's first real experiments, when you made national and international news when you wanted to show Canada's Next Great Prime Minister using BitTorrent. Part of the reason you made international news was that the show was completely throttled by the cable companies, because they saw it as.... Maybe they didn't even know what it was, but the experiment fizzled.
Are you concerned now that many of your number one competitors, and sometimes very hostile competitors, who are running the bandwidths might decide to throttle a little more content if you attempt to use new avenues like BitTorrent?
I want to ask one question on the Quebecor issue. My colleagues have raised it. Certainly we know it's been a bit of a blood feud. You guys fight like dogs for the Quebec market, but hey, that's competition. I think that's great.
I don't really have.... You know, they run almost every newspaper in the country now. As A. J. Liebling said, “Freedom of the press belongs to those rich enough to own one”, and Mr. Péladeau is certainly rich enough to own as many presses as he wants.
My concern is that when I pick up my little local paper, in which we used to have editorialists and we used to have a lot of local content, it's all gone now. We get the same three voices. We have Peter Worthington ranting on about the threat from the Middle East, and a couple of old dinosaurs like that. No offence to Mr. Worthington, but I read him every day, in all the same papers.
But now I'm reading from these little small-town newspapers that the best thing we can do is get rid of the CBC, and I'm thinking, “Why would a small-town paper editorial be writing about getting rid of the CBC? Don't people watch it? Wouldn't you want the content?”
I'm concerned that we have someone who's very hostile to the CBC in terms of Quebecor. Mr. Péladeau has made it clear again and again, and yet he's now in a position where he's got the papers. Quebecor runs the pipes. They want your market.
Do we need some clear ground rules just so that we can set aside personal political agendas from the public interest and make sure that for viewers like me, back home, I will be able to watch my content or read my newspaper and know that it's not being fingerprinted from up high?
:
Accountability is something that starts with us and Parliament in annual reports. It goes into corporate reports. It goes to us in front of these committees. It goes to us in front of the CRTC. It goes to a new website where we now will be posting all of the information that is available and of interest to Canadians.
We were bombarded, as I said, by an inordinate number of requests under ATIP, 400 or so from the same group working for the same organization, in the first months after we became subject to the Access to Information Act. It was so much so that we had to sit down with the commissioner to try to figure out how we were going to deal with this, because this was not only about CBC; it was about the commissioner being swamped, and his office--well, it's now “her” office, but not at that time--not understanding how we were going to do this.
Today, as of November 26, 2010, of the 1,202 requests we've received, we have met 1,202. Since April we have received zero complaints on our timing for the requests that we are receiving. We have improved. We have not always been very good, but we are improving, and we have been learning from the situation.
I would like to remind you that 1,000 or so--because this is the information they've put out to the public--are coming from one office: two people. David Statham was actually in front of the Federal Court again and lost in front of the Federal Court. Both courts, the first court and the second court, actually declined Mr. Statham's request to blame us for our conduct in this file. Not only that, the appeal court endorsed the findings of the first judge and said--and I'm quoting--that Mr. Statham's conduct was less than exemplary.
When you put all of that in context, I would like to tell you, sir, Mr. Armstrong, that we believe in accountability. We're doing a better job. I'm very proud of the work we have done to handle this massive number of requests we have been the subject of.
:
Thank you very much, Mr. Chairman.
Thank you to the witnesses for appearing today.
Mr. Lacroix, with due respect on the answers that you gave my colleague with respect to ATIP requests, I would expect, and I think all members of this committee understand, that if you have a concern with respect to....
We're all public servants, as is the CBC. We're on the public payroll. I think we would all expect that if the CBC wanted to investigate our expenditures, wanted to look into how government was spending money, it would do that with a dogged determination to get the answers for Canadians, because they would see that as being responsible to Canadians. And Canadians deserve the answers.
I think all parliamentarians have worked hard to increase the amount of information that we're providing, in fact to the point where for some folks it's been frankly embarrassing. But as we've said internally, never expense anything that you're not prepared to stand behind. If you're not proud of how you're spending money, then you may have to answer to your constituents for it.
The CBC's constituency is all of Canada. I think it looks very bad on the CBC when it releases ATIP requests that are largely blanked out and that don't actually respond to the answers that the ATIP is looking for.
I think the CBC should be as open as a book. It should be completely transparent. You serve the public. You're owned by the public. When the public hears stories, stories that may be completely untrue, about lavish expenditures that other networks don't make, about folks who might be commuting back and forth to work from remote lakes on float planes that the taxpayer is paying for....
These are stories that have been out in the public. We should be able to push back against it instead of fighting it in court; I think all you do is fuel the fire.
Do you see that you're fuelling the attack against you by taking it to court rather than simply answering the question?
:
Yes; and in terms of vertical integration.
It's important to note that the CBC, beyond any other broadcaster, has the highest requirement for Canadian content in prime time. We embrace that, we enjoy it, and we exploit it to its benefit, because Canadians are now watching Canadian television more than ever. So when it comes to productions, either by Mr. Pope or various producers across the country, we find these to be very advantageous and very beneficial partnerships. We partner with the independent production community across the country, and we enjoy the benefits of their talents in the productions they make for us.
So it's important for us, because we believe we've seen an increase over the last four years in Canadians coming to Canadian content. That increase is something that we want to keep going with. It's beneficial to us, it's good for the production community. It means that Canadians are watching and want, and obviously demand, Canadian content more than ever.
In that light, when it's vertical integration and some of these other companies have lesser Canadian content requirements, and are even looking to perhaps lower those Canadian content requirements, we see ourselves as the Canadian voice, the place for diversity of voice, whether through production or news. It's the place where we can actually focus on Canada and content first.
:
Thank you, Mr. Chair and committee members.
My name is Ferne Downey. I'm a professional actor and the national president of ACTRA. With me today is Joanne Deer, ACTRA's director of public policy and communications.
I'd like to thank you for giving us the opportunity to speak on behalf of our 21,000 professional performers in film, television, sound recordings, and radio and digital media who live and work in every part of our country.
Digital technology has brought Canadian artists a new world of incredible opportunities. Our diverse culture, talented performers, and unique Canadian voices can now be accessed by audiences around the world with the click of a mouse. However, with new opportunities come new challenges, and without adequate support mechanisms Canadian artists risk getting lost in a sea of content from creators around the world.
The fundamentals behind Canada's broadcasters have changed practically overnight. Where once we had an army of broadcasters, now we have been reduced to a mere handful. Vertical integration isn't just a buzzword, it is our new reality.
Four massive private telecommunications companies--Bell, Shaw, Rogers, and Quebecor--now control the majority of Canada's cable, satellite, Internet, and wireless services. As a result, Canadian content is now being controlled by fewer and fewer hands. I know you've already had these companies come before you and tell you how tough it is for them to be in this business. Predictably, they bemoan regulation, but there must be rules to ensure that Canadians have access to diverse voices, independent voices, and most importantly Canadian voices.
We humbly suggest four key fundamentals to make sure Canadian content is not lost: one, effective and enforceable regulation of broadcasting on both conventional and digital platforms; two, maintain Canadian control of our telecommunications corporations; three, increase public and private investment in the production of new Canadian content; and lastly, support independent and local voices.
We do hope the CRTC's new television policy will bring Canadian programming back to our screens when it is implemented this coming spring, particularly the underserved scripted drama and comedy genres. It is a crucial step forward, but by no means is it the end of the journey.
Increasingly, Canadians are turning to their computers, laptops, and mobile devices to watch content. It was an error in judgment for the CRTC to keep its hands-off approach to broadcasting in new media, especially considering how quickly these digital media platforms are starting to mirror their conventional counterparts. CTV's conventional network has to make space for Canadian programming. So why shouldn't their online presence? We understand the issues are different, but to us it makes sense to say that websites like CTV.ca or GlobalTV.ca must present consumers with Canadian options.
The same should hold true for “over-the-top” services like Netflix, Apple TV, and whatever new services that might emerge from the digital jungle. And apparently Shaw now agrees with us on this. Online broadcasters should be regulated.
It's also time that Internet and wireless service providers give back to the system. These companies make a lot of money from hosting broadcast content over their networks. Like their conventional counterparts, ISPs must be made to do their part and contribute to the creation of that content by paying a percentage of their revenues to a production fund.
We're heard the Canada Media Fund say that the revenues from BDUs are declining and will likely continue to do so as more Canadians seek their content online. It is critical that the federal government continue to support the CMF. However, ISPs must also step up and help fill this gap.
Our fear is that vertical integration, combined with weakened or inconsistent foreign ownership rules, will set the table for foreign corporations to come in and snap up our entire communications industry in one fell swoop. If that were to happen, the primary means of producing, promoting,and disseminating Canadian culture will be in the hands of foreign corporate interests.
Some believe that you can sell off telecom without affecting broadcasting. That might be conceivable in some countries, but not in Canada. Here telephone companies own cable, broadcast, and satellite assets and cable companies own telecommunications, satellites, and broadcasters.
Opening up foreign ownership in telecommunications would be disastrous. It would damage Canada's sovereignty over cultural policy and jeopardize Canadian content regulations. Our culture certainly cannot survive, let alone flourish, if decisions about our prime-time TV schedules and online content are being made by executives at NBC Universal in Los Angeles.
I'll now turn the microphone over to Joanne Deer.
My name is Peter Murdoch. I'm CEP's vice-president of media, and with me is Monica Auer, our legal counsel in this area.
CEP is Canada's largest media union. Thousands of CEP members work in broadcasting and telecommunications, and many hundreds of them cover and broadcast the news across Canada and are keenly interested in your work.
Our starting point is the fact that vertical integration is not new. As table 1 shows, the CRTC has allowed BDUs to control radio and TV stations for 30 years or more. Vertical integration matters, because it will affect news diversity and because Canadians and democracy rely on trustworthy and competitive news sources. The CRTC said that the benefits from these ownership structures were “significant and unequivocal”.
Have Canadians and news benefited from vertical integration? So far, programming employment, spending on local programs, and local broadcast hours have all dropped as ownership has concentrated. I refer you to the graphs in our submission. I think you'll find them interesting.
Could vertical integration strengthen our system? After all, BDUs now take in most of the revenues in broadcasting, while the TV programmers they own pay for most Canadian content. But since BDUs are accustomed to exceptional profits, they will fight any suggestion that they do more for Canadian programming. You have already heard Bell tell CTV that it must stand on its own two feet. The idea that more concentrated ownership would direct more resources to Canadian programming has been lost.
While vertical integration could benefit Canada, the CRTC has told you that its default position is to not regulate. It says that Canadians must prove the need for regulation. But since Parliament created the CRTC to regulate on Canadians' behalf, why should they now have to persuade the CRTC to serve their interests?
We have learned that the CRTC has spent $2.7 million on consultants and research since January 2007. Yet, as our table shows, it has not undertaken or commissioned any research on the impact of concentrated ownership, or on cross-media ownership, or on BDU ownership of programming services. It has not researched integration's impact on programming investment, and does not know how many broadcast news bureaus exist, or how many reporters work in broadcasting. It has not measured diversity in news or the impact of diversity of voices policy. So how can the CRTC or Canadians understand the impact of vertical integration? The CRTC won't even release the raw data needed to prove why or when regulation works. This is partly because it cannot. The CRTC recently destroyed most of its own data, from 1968 to 1990. Since 2007, it has opposed requests to access the data it still has.
As for other issues, such as foreign ownership, the CRTC does not track the percentage of voting shares or level of debt held by non-Canadians in Canadian broadcasting. Without research on the impact of increased foreign investment in broadcasting or telecommunications, what convinced the CRTC to recommend increased foreign ownership last spring? After telling Canadians to prove why regulation is needed, it turns out that the CRTC has never assessed the impact of its deregulation, or its own decision to stop regulating ads in over-the-air TV.
Why isn't the CRTC studying these questions? Perhaps it's because the current Broadcasting Act completely insulates the CRTC's policies and regulations from legal review. So instead of a professional, 21st century approach to communications policy, Canadians are getting regulation by guesswork. We know this is not what the government or you want. Its 2007 rules for regulating, that are attached here, emphasize requirements for empirical evidence when its agencies deregulate. We need evidence on deregulation, not only regulation.
This is why we strongly support your current study. It should direct the CRTC to adopt this evidence-based approach.Therefore, instead of asking that integration be dismantled or stopped, we recommend that Canada obtain research explaining the dynamics of ownership, and media content. We propose a creation of a national, independent policy research institute to undertake impartial, quantitative research on electronic media regulation and policy.
Our proposal would not cost taxpayers money. One-tenth of 1% of the billions coming from next year's spectrum auctions could fund this institute. Alternatively, ownership transactions could fund the research. You could recommend that the CRTC direct 1% of the benefits from the Bell-CTV deal to this institute.
This research should begin now. CEP would be very pleased to submit a formal proposal that would give communications regulations a solid, evidence-based foundation. Your committee could then turn to the study in two years to review Canada's communications laws and their possible merger. Mr. Del Mastro has raised this several times, and we support it.
To conclude, vertical integration has so far given Canadians a very poor return on their asset of broadcast spectrum. In our view, the regulatory balance has demonstrably tipped away from Canada's interests--without Parliament's informed consent and without your input.
The CRTC's role in assessing vertical integration must be to determine the facts, to weigh competing interests, but above all to put Canadians first. Restoring balance through effective, efficient, and evidence-based regulation will benefit Canadians, our national interest, and entrepreneurs.
I welcome your questions. Thank you.
:
Good afternoon, Mr. Chairman. Thank you for this invitation.
My name is Marc-Philippe Laurin. I am president of the CBC/Radio-Canada Branch of the Canadian Media Guild.
Our union represents 6,000 workers across Canada, including CBC/Radio-Canada's employees outside Quebec.
[English]
We also represent broadcast workers at TVOntario, TFO, the Aboriginal Peoples Television Network, Shaw Media, and ZoomerMedia.
Our members are committed to the future of public service broadcasting, and we're here today to urge the government and Parliament to be active partners in ensuring that Canadians have a healthy diversity of media voices as our industry continues to change.
The CMG would like to use the opportunity of this important study to make some proposals on what Parliament and the government can do to balance the various interests in our country's media system as the companies in the private element continue to consolidate.
[Translation]
With me is Karen Wirsig, communications coordinator of the Canadian Media Guild.
[English]
She is our director for advocacy, and she will continue this presentation and explain to you seven recommendations that we bring to you today.
I'll just go through our seven recommendations very quickly because we don't have a lot of time, but I thought it would be important to go over them.
They involve three areas. One is the regulation needed to deal with vertical integration. We don't have anything very detailed to offer you, but we do support measures that we've heard proposed to ensure that the new and growing companies aren't able to throttle Canadians' access to content, aren't able to push out smaller independent and public broadcasters from the airwaves and from the Internet. What we're suggesting is corporate separation be instituted to ensure that the pipes remain separate from content in these new big companies.
The second big area is CBC. We think more money needs to be given to CBC for local content on all platforms.
The third main area is that we believe a local content strategy needs to be included in Canada's digital strategy, and we're really concerned so far that content does not seem to feature big in the government's thinking about the digital strategy.
So just to go over the recommendations, the first, as I said, is to implement a rule requiring the separation of operations and management between content distribution and programming elements within a single company, and measures enabling the CRTC to act on infringements against this rule.
The second recommendation is to provide additional funding to CBC for new local programming on all platforms in underserved and unserved communities. Frankly, we don't think stable funding is enough.
Number three is make support for independent local programming on all platforms a priority in cultural and broadcast policy. Further to that, direct the CRTC to undertake a strategy for radio, television, and digital programming in smaller communities that builds on the success of the local program improvement fund and includes community media initiatives. At the moment, the LPIF is only available to public and private broadcasters. We think that the only way local media is going to grow in smaller communities is with the involvement and support of local communities themselves. It doesn't look at this point like major professional media organizations are going to be putting a lot of investment back in the smaller communities of this country. Every time we see consolidation—this is not new, the vertical integration is the newest element of it—we see larger media companies with less interest and less investment, especially in smaller communities, but frankly in local programming across the board. We need to try to reverse that. We need a strategy for that, and I think the heritage committee is a good place to start on a content strategy for our smaller communities.
We also urge the heritage committee to recommend reserving broadband in the coming spectrum auction, or auctions, for public and community broadcasts and other uses.
Number six is include a local media initiative strategy in Canada's digital strategy. Implementation of these initiatives could be funded in part with a small portion of the proceeds from these future spectrum auctions.
Finally, number seven is to establish a coordinated national education campaign on the transition to digital television that among other things will target local communities that stand to lose their over-the-air signals, letting those communities know what they could do to replace this service for their residents.
Thank you.
:
Good afternoon, members of the heritage committee.
My name is Maureen Parker, and I'm the executive director of the Writers Guild of Canada. Also with me today is my colleague Kelly Lynne Ashton, WGC director of policy. Thank you for inviting us.
The Writers Guild of Canada is a national association representing more than 2,000 professional screenwriters working in English-language film, television, radio, and digital production in Canada. We are here to talk about the changing infrastructure of the Canadian broadcasting system and its impact on the creation of Canadian content.
The Canadian broadcasting system is rapidly changing. Broadcast mergers in the last few years have resulted in significant media concentration, and acquisitions have led to vertical integration as cable and satellite operators such as Shaw and Bell have purchased broadcasters. Most recently, we have seen the introduction of over-the-top services such as Netflix and Apple TV. Although they are directly competitive with elements of the Canadian broadcasting system, these services are outside the jurisdiction of the CRTC, because they are non-Canadian and because the legal definition of the Canadian broadcasting system is too narrow to include them.
The regulated players too—like Rogers, Shaw, and Bell—are playing in the unregulated space. Cable and satellite operators have set up their own online broadcasting services offering film and television programming free to subscribers. Moreover, most broadcasters such as CTV and Shaw Media have catalogues of their programming available for viewing online. However, because all of these services are unregulated, there is no obligation for them to carry or promote Canadian content, even though they are owned by regulated businesses.
Why are we concerned? It is because Canadians, through their viewing behaviour, have expanded their traditional concept of the Canadian broadcasting system to include these newer platforms. Canadians have not left the broadcasting television world, but they are increasingly choosing the convenience and portability of online viewing to supplement their broadcast television. According to the CRTC's latest “Communications Monitoring Report”, Canadians watch an average of 26 hours of television per week, and this figure is fairly stable. Anglophone Canadians are spending an average of 14.5 hours per week online, two hours of which are spent watching TV online. This is any where, any time television viewing. However, the regulatory framework created by the Broadcasting Act has not kept up with consumer behaviour.
The CRTC created expenditure and exhibition requirements to ensure that Canadian broadcasters support Canadian programming. Without the CRTC's regulatory framework, Canadian audiences would not have had the opportunity to enjoy Canadian successes such as Flashpoint, Murdoch Mysteries, and Heartland. We need a similar regulatory framework for the digital platforms, which are now part of our broadcasting system.
The CRTC is representing the public interest to the extent of its reach. At the group licence renewal in April 2011, a new TV policy will be implemented for the three private broadcasters with specific programming expenditure requirements for drama and documentaries, among other things. We are optimistic that a return to an expenditure requirement will mean more Canadian drama on broadcast television. However, there is no guarantee that this additional programming will also be available or easily accessible online.
Kelly Lynne.
:
We also don't know that there will be sufficient money at the Canada Media Fund to adequately support the new programs funded under the new TV policy. Each one of the CMF's programs is oversubscribed.
You heard from the CMF that the revenues from the cable and satellite companies used to grow substantially each year, but have now slowed to an expected growth rate this year of only 2% over last year's revenues. They expect the stagnation to only worsen as more people unplug from cable or downgrade to basic packages and take advantage of the opportunities to view content online.
The CMF has been mandated to fund both digital and television content because this government has seen that Canadians are on both platforms and need to have the choice to see Canadian content on those platforms. Both broadcast and digital platforms should therefore be responsible for contributing to the financing of Canadian content.
Is it logical to treat a new media broadcaster such as Rogers on Demand Online, or RODO, differently from VOD? Both services offer Canadians the ability to watch film and television programming at the time of their choosing. The only difference is that one functions through the television set and the other through the computer.
VOD services are required to make Canadian programming available and to help finance its production. Rogers VOD, for example, is required to ensure that not less than 5% of English feature films available are Canadian and not less than 20% of television titles are Canadian. RODO has no such obligation. Rogers VOD has an obligation to pay 5% of its gross revenues to a Canadian program production fund such as the CMF, yet neither RODO nor Rogers, as an ISP, has to contribute to Canadian program production.
The situation is the same for all of the major cable and satellite providers who have both online and VOD services. And let's keep in mind that while Rogers, Bell, and Shaw express concerns about the competitive threat of an unregulated Netflix or Apple TV, as ISPs they are benefiting from consumers' increased bandwidth use due to these services as well as their own online services.
In fact, while Rogers, Shaw, and Bell promote their online services as free to subscribers, use of the services will cost subscribers more if they go over their bandwidth cap. If you watch a few TV shows a month, you will go over your cap. So Canadians are being enticed to use large amounts of bandwidth-streaming television shows, some of which are supported by the CMF. While the revenues to the ISP business units are increasing, they contribute nothing to the creation of the content.
:
With that in mind, I'll be splitting my time with Ms. Crombie.
I think I'm starting to get a common message theme here, or at least a message thread.
When we talk about regulation, the chair of the CRTC alluded to the fact about jurisdiction, a court decision involved in there as well. Is this a final decision? Many of you have expressed your concerns about regulation, to say the least.
ACTRA, you talk about monetary fines, but sovereignty over cultural content. That's a valid point.
Electronic media regulation from the CEP when it comes to...and I think you even went a step further in your recommendation, talking about an independent panel in that regard.
There's also content, and digital strategy, indeed. Some of you talk about corporate separation as well in that one, and that theme tends to come up quite a bit.
The Writers Guild provided some examples of successes under the old framework, as it were.
So I'm just going to throw it to each and every one of you, if you would like to comment further, because you say that this regulation is needed, in this digital age...to the extent that it was before? Would you agree with that statement?
And do you think it's possible, given the proliferation of the technologies that are out there and how the next generation is able to acquire content?
:
First of all, you can't regulate Netflix because it's a foreign company. The CRTC only has jurisdiction over Canadians.
Our own Internet service providers are providing content online, but they're not regulated to support Canadian content, nor are they required to promote it or offer it to Canadians.
Look at what's available and how we consume our content. I think we included a statistic in our piece that in terms of English-language viewing right now, two hours a week are spent watching television online. We want to ensure that some of those eyeballs are going to Canadian content.
There is a fallacy that the Internet cannot be regulated, that it's borderless. It sure can be regulated, absolutely. We can't get Hulu up here. We can't get some American shows up here. Broadcasters are businesses and they need to recoup their costs. To make entertainment programming is very expensive, and you have to recoup that cost usually in your domestic market.
So there are borders. There are regulations. These are businesses. We can absolutely look at this in terms of creating distinct territories in order to recoup investments.
What we need the ISPs to do is invest in content--that's the CMF--and to ensure that they're offering some programming that is available and that they're promoting it.
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I wouldn't hold it against him because it's good to hear him speak French. I'm ready to invest my time so that our chairman speaks more French.
A voice: He did that well.
Ms. Carole Lavallée: Indeed.
So, back to business.
You're a big group of witnesses, and you said a lot of things. I tried to sum them up, to pick out the most interesting things, because we clearly have to orient ourselves toward solutions.
One of you said that the functions of the business should be shared out. I found that interesting because that was the first time, to my knowledge, that we've heard that kind of suggestion.
A second person said that the Internet should be regulated, and, after the Liberals' response, you all seemed to say that was true.
I ask you this question: would merging the broadcasting and telecommunications acts enable the CRTC to regulate the Internet? Would there be other ways of regulating the Internet? I want to hear you say it.
I know I'm asking a lot of questions, but that's good because you'll be able to select one.
The question of the Canada Media Fund is a real problem. Money that was reserved for audio-visual production by general interest broadcasters has been taken and shared with the digital field without any more money being added. You're entirely right. However, are there any other ways to add money to the Canada Media Fund?
Lastly, as the telecommunications union suggested, do we have to wait for a research institute to conduct a major study on the subject, or is it possible to do certain things before that?
My questions are in utter disorder.
Go ahead, Mr. Murdoch.
:
Pardon me, but I was waiting for the translation.
Yes I have another question, but I'm sure it won't take long. Whatever the case may be, thank you for the chance to ask it.
Can we consider other revenue sources? Because cash flow is currently being diverted. Things are being offered on the Internet for which people are paying more. After watching a television series on the Internet, such as Flashpoint, for example, people receive a bill for $47 from their cable company—that's Videotron at my home. I swear this has already happened, in particular to my assistant, who lives in Saint-Hubert. He watched the series Les Invincibles, and that cost him $47. He paid the cable company that amount, whereas, if he had bought the series at HMV, for example, it would have cost him exactly the same price, but the money would have gone to the producer, not to the cable company.
Shouldn't we require the cable providers or the BDUs, whichever they are, to pay any surplus money made from the use of content such as that into a kind of cultural production fund?
:
Thank you. This has been an excellent session.
I want to begin by talking about getting access to data. I've been incredibly inspired by my colleagues and , the Sun Media Conservative party, and their openness for government and their commitment.
You know, I just got an access to information request back from the Conservative government that I waited two years for. It's 150 blank pages--that they made me pay for. Now that I have colleagues who are going to get accountability for the taxpayer, I'm feeling inspired.
I ask this because they certainly have a dog on for the CBC and its accountability. But this past April Mr. von Finckenstein appeared at the industry committee. He stated a number of positions and speculated about raising or changing the foreign ownership requirement.
So I put in a freedom of information request to find out if he had any data. A man of such august stature, stating such an important opinion, would certainly have lots of data to back it up.
It turned out there was nada. There wasn't anything. And I was thinking, “How could this be that he makes policy pronouncements without holding data?”
Now I see, Mr. Murdoch and Madame Auer, in your presentation today....
The last time Mr. von Finckenstein came here, he said, hey, it's way too early to make any pronouncements about vertical integration, the jury's out. So I thought, well, then they must doing lots of data. They must be still crunching the numbers.
Yet you're telling us that they haven't done any integration impact on programming investment, they don't know how many broadcast news bureaux exist or how many reporters are working in broadcasting, they haven't measured diversity in news or the impact of diversity in voices.
Now, I distinctly remember Mr. von Finckenstein saying there's lots of diversity out there, and it's called the Internet.
What should we expect from a public regulator in terms of keeping data and being willing to share that data through access to information with the public?
:
I'm going to have to ask everyone this question.
I've been here since 2004, and long before I came along, the line we always heard was, “Give us this one massive merger and we're going to get you more investment and more content.” And every time I look at the data, I see more people getting fired. I see the same big players getting bigger and bigger. They were just here, and they said, “Oh, my God, you've got to give us deregulation. And filling out those forms about what we do for access to information and so on? That's red tape. Cut it.”
Now I'm learning that under this great vertically integrated system, where we're going to deliver lots of content, the CRTC's decided to cut CanCon from 60% to 55%. They were talking about doing that in the conditions of licence, which would have been appealable, and there might have been some talk about it. But they just put it into the regulations, so it's a fait accompli.
I'd like to ask what the impact is when the national regulator, which tells us that its prime directive is to not get involved, cuts CanCon from 60% to 55% without giving us reasons. What impact does that have on our production sector?
:
Thank you very much, Mr. Chairman.
Thank you to the witnesses today. It's an interesting panel.
Thank you, Mr. Murdoch, for your support of my position. I didn't think anybody was listening to me.
Voices: Oh, oh!
Mr. Dean Del Mastro: I kept on saying it, but nobody was taking any note of it.
I actually believe that it's time that we review that document. It's time that we take a look at it to see what it is we're trying to achieve. I think in some ways, and I think some of the other witnesses have noted it, we may be straying from that in some if not in many regards. I think we should be looking to see what outcome we are trying to achieve.
My discussions with the CRTC indicate to me that they wouldn't mind getting some additional policy direction from Parliament either. So it might be a positive outcome.
A number of you talked about ownership shares, specifically telecom ownership. I just wanted to ask if there was a specific position. What do you think the ownership should be? Should it be 100% Canadian? Should it be 80%-20%? Should it be 51%-49%, with an all-Canadian board and Canadian control ensured? What should it be?
Go ahead, Ferne.
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To understand the government's position on it--and I don't know what your positions are--in order to attract increased competition, because there's a concern that prices in Canada....
It may not be a legitimate concern, but I do hear it. I hear it in the riding. I'm sure even some of your members would talk about the fact that they feel that wireless is expensive. Mobile phones are expensive. Data plans are expensive.
They think that perhaps by introducing additional competition...and it's very difficult to introduce competition in Canada, because the players are large and they're somewhat territorial, right? If you want to go in there, there's a good chance they're going to undertake a predatory practice.
I would. If I had a major share of the market and somebody wanted to come in and take it from me, I'd probably take them on. So it's an understandable process that they're going through.
Do you see any merit in that, that perhaps you could see lower bills for consumers, or do you think that...?
Do you agree with what the telecoms are saying--namely, that essentially we have a very competitive system in Canada, it's geographically difficult to supply service across Canada, and all in all they're delivering a pretty good service?