Skip to main content
Start of content;
EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 16, 1995

.0905

The Chair: Ladies and gentlemen, I know that we're going to be joined by other colleagues soon, but we're anxious to take advantage of the time available to us.

We're delighted to welcome Keith Spicer back. We're going to be seeing him again in early June in the context of our hearings on direct home satellites, but today the reason for his visit is the estimates of the CRTC, which is this blue document.

As usual, I suspect our questions and observations will be wide ranging, as is the nature of these things, but that's why we have these get-togethers, to have a frank and free exchange of views.

In the absence, for the moment, of either member of the Bloc, and Mr. Hanrahan isn't here, I don't know whether, Mr. McClelland, you would like to keep the ten minutes for your side. Or do you have a few questions you'd like to ask Mr. Spicer?

Mr. McClelland (Edmonton Southwest): Mr. Chairman, are we going directly into questions?

The Chair: I am so sorry. You might want to say something to us, wouldn't you? Yes, why not. I was so keen.

Mr. Keith Spicer (Chairman, Canadian Radio-television and Telecommunications Commission): Uncharacteristically, I brought along a little text today. If you'd like to scrap it, I'd be glad to. It's only a detail. Actually, I hoped it might help, because maybe in a slightly and very constructively pre-emptive way, we can get a few facts on the table that will help you ask even more probing questions.

The Chair: That will allow people to come in, which is also good.

Mr. Spicer: I will then thank you, Mr. Chair and hon. members, for this opportunity to appear before you to discuss the CRTC's program priorities and expenditures for 1995-96 to 1997-98. Joining me is our secretary general, Mr. Allan Darling, and our executive director of telecommunications, Mr. Stuart MacPherson.

I have asked that a background document on the commission's priorities and expenditures be distributed to all committee members. I trust you've already received a copy of this.

In a world of accelerating competition and convergence, when the need for regulation is changing and often misunderstood, I think it worthwhile to quote a passage from the Broadcasting Act. I do this as a respectful reminder that the commission's mandate is directed through this act, through Parliament. I'd like to begin with our mandate because it is at the heart of what we do, and we interpret this responsibility very seriously.

Let me briefly quote from section 3 of the Broadcasting Act, which is really the heart of our mandate.

Keeping Canada on its own airwaves - and that's really the definition of our job - and offering Canadians quality and choice at affordable prices is what we're here for. It sounds pretty simple, but in fact our mandate requires us constantly to balance the interests of consumers, creators and distributors in order to achieve this.

.0910

[English]

This means that somebody has to be the referee, and there are not many standing ovations for the referee. Decisions in one case may appear to favour one group; the next decision may appear to favour another. In the end, our raison d'être remains balance. You, Parliament, have created this body to exercise that role. We do this by encouraging competition that benefits consumers, entrepreneurs and producers. We are not looking for ways to slow competition; we are always looking for ways to hasten it.

If those who would like to see us disappear tomorrow - there are one or two, I think - need to be reminded of why regulators exist - and will probably, alas, always exist - let me discuss some of the ways in which we serve Canadians. In doing so, maybe it will become more obvious why regulation remains essential as we adapt to our new communications environment.

Canadian regulators offer Canadians two guarantees: independent judgment and transparency.

First, we serve Canadians by taking the always complex, and usually controversial, decisions of modern communications out of the arena of party politics or personal favour. That is why Parliament established the CRTC as a quasi-judicial tribunal to make often unpopular but necessary decisions that serve the broad public interest as defined by Parliament. Each year we make some 4,600 decisions, small to very large, and in each lie financial interests that must be decided in the public, not private, interest. In many decisions also lie important social and cultural concerns tied to Canadians' cherished and distinctive values. Television violence is just one of them. There are many others.

Second, we make our decisions in the light of day through transparent processes, including our trademark public hearings. This transparency and respect for citizens' views are why each year we receive dozens of ministerial and regulatory delegations from around the world hoping to draw lessons from the Canadian model of regulation. In many countries, unfortunately, such decisions are made secretly, often by bureaucrats who do whatever the politicians in power tell them. Canada makes such decisions for all to see, often live on television.

Parliamentarians and most Canadians rarely have occasion to appreciate how precious other nations consider our openness, and sometimes we forget it ourselves. We are certainly not complaining of being, as the French say, ``badly loved'', mal aimés. I am just observing, with a pretty thick skin, that getting mad at us for a decision on cable or telephone rates - and there are occasions when I don't blame anybody for that - is just a more natural and more pleasurable experience than sending us fan mail for holding scrupulously fair and irreproachably open hearings.

How do we contribute to the public good more specifically?

[Translation]

While the commission deals with licence renewals at foreseeable, regular intervals, most of our workload is demand-driven. This makes it difficult for the commission to forecast a large portion of its workload. Also, as consumers become more aware of new communications technologies, not only do they want more choice and control over the services they receive: they want more choice and control over the way in which they receive them. They want more information about their options, and a better understanding of how these services are regulated. Consumers now, more than ever, are being exposed to a range of new ideas about information technologies. They hear and read about the information highway on a daily basis.

With new technologies, the media, in various forms, play an increasing role in the everyday lives of Canadians. As citizens' knowledge increases, so do their expectations. We recognize this and we welcome their valuable input because it helps us do our jobs more effectively. We also recognize the importance of responding to their inquiries expeditiously and thoughtfully. Let me outline briefly initiatives currently underway to enhance our accessibility to Canadians and to respond to these increasing contacts with our diminishing resources.

Resources available to carry out our responsibilities are decreasing. The 1992-1993 Main Estimates authorized $37.8 million and 454 Full-Time Equivalent (FTE) positions. In the current fiscal year, additional resources of $2.9 million and 25 FTE's were approved to supplement the Telecommunications side of our operations because we are now responsible for regulating 49 additional telephone companies, previously subject to provincial regulation.

.0915

Successive budget reductions since 1992-1993, including the program review last summer, have caused this aggregate resource level of $40.7 million and 479 FTE's to decline by 1997-1998 to $31.4 million and an estimated 413 FTE's. In summary, since 1992-1993, the commission will have absorbed budget reductions of approximately 25%, while our telecom and broadcast activities have increased considerably. Indeed, the reduction in resources to regulate broadcasting is greater, for funds dedicated to telecommunications have actually increased compared to the 1992-1993 level.

[English]

If I refer you to the broadcast document I mentioned earlier, you will see that our volume of inquiries in broadcasting and telecommunications increased substantially between 1993-94 and the current fiscal year, with actual numbers ranging from 65,618 in 1993-94 to 103,708 in 1994-95 just for broadcasting. In telecommunications, complaints and inquiries ranged from roughly 18,000 to 30,000 during those same periods. We anticipate comparable figures for 1995-96.

In order to ensure that we promptly reply to these increasing requests, we've developed a streamlined approach to provide consumers with the information they need, quickly and in plain language. For example, we receive many requests for information concerning cable billing, Canadian content rules, TV violence, or how to file a complaint. We have come up with about 20 ``FactSheets'', and I have made copies available to all members today, which explain our policies in these and other areas in plain English and French. While this approach has gone a long way to simplify the content of our written responses to public inquiries, our workload in this area continues to rise.

We recently became the first institution in the federal public sector to go on-line with a home page on the World Wide Web. Not only do we make archival information available, but we also provide daily updates on all CRTC decisions, public notices and other documents. This information is made available on the Internet usually the same day as it is made public, or the day after. For example, this opening statement will be on the Internet as we speak, and no doubt reports of this meeting will end up there later in the day or tomorrow at the latest. May I draw this to the attention of the members of this committee in particular. I really think this could be a useful time-saving work tool for you. If you are, as I believe you are, plugged into the Internet, the home page code or address is WWW, of course, CRTC GCCA.

We are also currently looking at allowing the public to participate electronically in our proceedings. This will eventually allow consumers to file interventions through the Internet and to voice their opinions during public hearings through teleconferencing, without incurring travel costs. I expect these activities will be operational before the end of this fiscal year.

In terms of interactions with specific broadcast licensees and telecommunications companies, we deal with a large number of applications annually to amend licences. Specific numbers cannot be forecast. What is certain is that once applications are received, we must deal with them expeditiously.

On the broadcast side we regulate 5,633 licensees. On the telecommunications side we are now responsible for 71 companies. As a result we hold an average of 12 to 15 public hearings each year, ranging from a few days to a month. We also issue some 4,600 decisions each year. That's why we are putting in place procedures to receive electronic applications from the regulated industry. By this time next year, I expect to report that a fully electronic filing system is operational, and again this will allow us to do more with less.

The commission has undertaken fundamental reviews of its policy frameworks. We are at the forefront of creating regulatory frameworks for choice, diversity and quality in both telecommunications and broadcasting. It is no surprise that most major European countries and many smaller ones have examined Canada's regulatory frameworks in reshaping their own policies. We have one of the most content-rich, competitive communication industries in the world. Here are just a few examples of how we promote competition.

There has been a regulatory framework in place for master antenna television systems in apartments and condominiums for 20 years. MATVs compete with cable. Of course, we are trying to hasten the arrival of other competitors to cable such as satellite and eventually telephone and other methods, cellular, vision and other techniques.

Since 1982 we have licensed over 30 new Canadian pay and specialty channels and authorized for distribution by cable a variety of U.S. satellite services. In 1992 we opened competition in the telecommunications long-distance market. In September 1994 we opened the local telecommunications market fully to competition.

The entry of telcos and other distribution technologies into the program distribution business is the subject of our report to be released in a few days. In fact, it will be released this Friday if you would like to mark that on your calendar.

[Translation]

Promoting a more competitive environment does not result in abandoning regulation. As our U.S. and U.K. friend have found, it's quite the contrary - in the early stages of change, competition requires more complex assessment in order to ensure long-term viability, and to guarantee the always shifting ``level playing field''.

.0920

Following an extensive month-long public consultation on the information highway in March, we will shortly be presenting our recommendations to the government on, among other things, how to ensure the presence of Canada on its own airwaves as borders disappear in a more competitive multichannel universe.

We have also initiated a number of reviews in order to simplify our regulations - most notably in radio, where we have lessened the regulatory burden through a number of reviews since 1988. The most recent round of revisions is expected to provide significant workload reductions in 1996-1997. These will likely be offset, however, as the introduction of digital radio triggers a new level of activity for the Commission in the near future.

The Commission is also constantly encouraging many components of the industry to establish new structures in order to be more responsive to their customers. Examples are the Cable Television Standards Council and the Canadian Broadcast Standards Council, which resolve complaints and administer a number of broadcast and ethics codes approved by the Commission. That is not to say that we've stepped aside. We reserve the right to intervene when, among other things, consumers are dissatisfied with the resolution of their complaints.

[English]

Mr. Chairman, committee members, you have in the document before you the essence of our plans and priorities for the next three years. I'm sure you have many questions for us, so I will end my remarks here to allow as much or more of our time for you. Thank you very much.

The Chair: Thank you, Mr. Spicer. We've now been joined by colleagues

[Translation]

please proceed.

Mrs. Tremblay (Rimouski - Témiscouata): Good morning, Mr. Spicer. We apologize for coming late. We had an early morning meeting which ended later than we thought.

We were told that you were here for several reasons. It seems that we're allowed to ask you questions on other subjects than just the estimates. So that's what we decided to do, given that, in our opinion, talking about your budget won't change much. You have a budget, you will spend it, and you will probably not have enough money to fulfill all your mandates.

So we will raise some issues which might seem a little strange. I'd like to talk about open line shows, on television and on radio. Does the CRTC intend to take action against those crazy talk-show hosts? I'm referring to the hosts which spend their time provoking people, resorting to verbal violence, saying anything on the air, accusing anyone in a demagogic tone, and withholding information from the public or giving their point of view of events? It's quite legitimate to interpret the news from one's own point of view, but some hosts are very biased and people get the impression that they don't want to inform, but provoke.

We have received many complaints from people who are tired of listening to those talk shows - it seems they are everywhere, in English and in French - which represent an abuse of public airwaves. Do you intend to remedy the situation?

Mr. Spicer: That's an excellent question, Mrs. Tremblay.

Indeed, we are constantly worrying about that problem. You probably know that we must strike a balance between freedom of expression and the abuse of our airwaves. It's partly a problem of perception. There are two reasons why we are very careful before we take any specific action.

First, the Canadian Charter of Rights and Freedoms calls for freedom of expression and, unfortunately some of those shows are extremely popular. You and I are probably on the same wavelength when it comes to these shows. We can all think of examples when a talk show host went too far.

Take the Oka crisis. There was a time when a Montreal talk-show host encouraged people to be aggressive towards the Mohawks. Everyone knows that we intervened against Mr. André Arthur in Quebec City and that we reduced the term of his license from five years to one.

We forced radion station CHRC to keep its indicator slips for a year rather than 30 days and to appear before us in a year. That is very expensive and cumbersome.

.0925

We also forced Mr. Arthur to read the guidelines every morning on the radio before his show. I was told that he did it, however, with a preamble that insulted the CRTC, which really pleased us... We are certainly not going to take action against people who insult us; we wouldn't have the time, because there are too many. However, in that case, the radio host had gone too far and we intervened by shortening the mandate of his license, by forcing him to read the guidelines to remind his public of what he was doing and by forcing him to keep the indicator slips.

We would really hesitate to go any further. Like you and every other committee member, we believe in freedome of expression. It's a terribly delicate issue. I'm not saying everyone thinks we always do the right thing. But I think we were responsible and measured.

If you have any advice, I'm all ears.

Mrs. Tremblay: As for television, you're asking television stations to create a code of ethics for violence. I'm wondering if the same couldn't be done for radion stations. There's no such CRTC guidelines, but perhaps they could give themselves a voluntary code. Despite the popularity of those shows, talk show hosts would not exceed certain limits if they were defined. There could perhaps be an ombudsman to hear complaints.

You should also review your complaints mechanism, because it doesn't work at all. We've received a lot of complaints regarding the way your system works, since nothing ever gets done. I think there should be an ombudsman for public airwaves.

The airwaves are public. Owning a broadcasting license is a priviledge and not a right. People are always invoking the Canadian Charter of Rights and Freedom, but they forget the flip side of those rights. No one ever talks about our obligations, our responsibilities and duties.

Perhaps you can think about it.

Mr. Spicer: Mrs. Tremblay, I'm glad you raised the issue of violence on TV because, indeed, we decided not to procede by regulations, but rather by persuasion and moral authority. It's an informal process.

In fact, I find your suggestion rather - even quite - constructive. I promise you I'll think about it and we could discuss it at some later date.

Mrs. Tremblay: Thank you.

Mrs. Gagnon (Quebec): As requested by Minister Manley, the CRTC is currently holding public hearings on local services. But people are wondering whether these public hearings aren't too expensive. Do you think there could be an alternative to the current system to reduce the cost of these public hearings?

Mr. Spicer: Mrs. Gagnon, it would be hard for me to do anything else. I don't want to wash my hands of the matter, but the process has started and it will last about two months. However, we are studying that very issue. It's a very complex problem with many aspects and I can't really improvise a solution.

But I can tell you that we are constantly thinking of the interests of consumers. Let me remind you that we have, for all intents and purposes, frozen Bell Canada's rates for 12 years. That's a lot. Last year, when we tried to implement a more transparent regime in which the real cost would be paid over three years in a balanced system, the government, as was its right, asked us to review the proposals. That's what we're going to do, since we respect the system and the wishes of the government.

Therefore, I can assure you that our intentions are more than honourable and in the best interest of consumers, but we have to follow the existing transparent process as per the request of the government.

Mrs. Gagnon: Mr. MacPherson, who is sitting beside you, also said that the sums involved were astronomical. I'd like to know what he thinks about the issue.

.0930

Mr. Spicer: He is an astronomer.

Some hon. members: Ha! Ha!

Mr. Spicer: Since he is an astronomer, I will let him answer the question in either official language.

[English]

Mr. Stuart MacPherson (Executive Director, Telecommunications, Canadian Radio-television and Telecommunications Commission): Mr. Spicer threatened to give me the microphone when challenged on that particular quotation.

Indeed, I was quoted as saying the costs were astronomical. In fact, the subject of my exchange with the reporter was the disbursements or out-of-pocket costs, if you will, for the commission versus the costs for the various participants in that process. Our own costs were estimated at something in the vicinity of $80,000 to $100,000, whereas the parties were spending many millions of dollars in participating in that process.

The fact of the matter is that this process is aimed at restructuring a $16 billion industry. The stakes are absolutely enormous. The fact that the parties to that open and public process decide to spend money on consultants and other ancillary costs really demonstrates their commitment to defending their point of view and their interests. We have competing interests literally spending that kind of money to defend those positions. So I don't see that the costs in fact are astronomical compared to the costs of the industry we're trying to re-regulate, if you will.

[Translation]

Mr. Spicer: I don't know if you are convinced, Mrs. Gagnon. I know that my colleague convinced me completely.

But seriously, I think the issue it really whether these so called astronomical costs are not being paid by taxpayers. Of course, ultimately everything comes out of the pockets of subscribers. You can't hide that. The money doesn't come from Santa Claus. A little later, we will talk about a production fund or other issues, and then we can talk about where the money comes from. There is no other source. So we have to look at every aspect of the issue.

In our opinion, and coming back to what Mrs. Tremblay said, it's not completely irrelevant to talk about our budget. Believe me, we try very hard - Mr. Darling in particular - to reduce our expenses.

We can try to spend public funds more wisely and protect consumers when we spend their money, but we can't order stakeholders like Bell Canada not to hire consultants or lawyers. They choose to do so to defend their interests. In my view, $10 million is a lot of money, but when you're dealing with a $16 billion industry, I don't know what percentage that represents. It's actually not that much if you want to uphold an honest and transparent system.

Mrs. Tremblay: Given the fact that it costs more and more money t appear before the CRTC, indeed, it costs almost half a million dollars to renew a radio licence or to apply for one. It just costs too much. How can an average person, who doesn't have any money, or a lawyer or a big company to back him up, and whose expenses are not tax deductible, appear before the CRTC? It becomes impossible.

Mr. Spicer: It can easily be done, by sending us a handwritten letter and by asking to appear. That doesn't cost a penny if you live in Ottawa or Hull. As I said before, in the future, people will be able to call in from anywhere in the country if they want to appear before the CRTC.

So it doesn't cost much for an ordinary person; it costs almost nothing. We're very aware of that. It's the big companies...

Mrs. Tremblay: Well, it all depends on the situation. There isn't much help.

Mr. Spicer: A company applying for a licence has to invest a lot if it is to build a credible case, because our mandate is to issue licences in view of market realities, Canadian content, compliance with social and cultural obligations and so on. So you can see that building one's case is expensive.

However, I know people who made an application for religious channels, such as Radio Ville-Marie or the Fondation Humanité 2000 in Québec City. I'm sure it didn't cost them a half a million dollars. They came to see us in Ottawa. In a very informal setting, we took them by the hand and showed them how to fill out their application. We honestly did everything we could to help them. We would do the same for anyone else who wanted to apply for a licence.

The Chairman: I'm sorry for interrupting, but I have to move on to the Reform Party.

[English]

Mr. Hanrahan (Edmonton - Strathcona): Thank you, gentlemen, for your attendance.

I want to ask a broader philosophical question on the role of the CRTC. Your document here says that you've decreased funding and decreased employment, but increased responsibility. Technology is assisting you in terms of making up for that shortfall.

.0935

Our overall inquiry is looking at the role of the CBC in the 500-channel universe. I would like to have you comment on the role of the CRTC five to ten years down the road. How do you see that changing relative to your responsibilities today?

Mr. Spicer: Mr. Hanrahan, I would really need a very big crystal ball to go beyond five years. Even five years is a lot in this business.

There are three forces at work today in the communication world, and I know you're well aware of this. One is the technological explosion, which is changing the scene almost every five minutes. I don't honestly think that Ted Rogers or Bill Gates could tell you what's going to happen two years from now. They think they have a pretty good handle on it, and we try our best to keep up with the technological literature, but it's tough.

The second force is market forces. There are take-overs of companies, mergers. A telephone company is buying cable companies in the States. There are huge deals, some of which fall apart in two or three months, and others may last - who knows? There are a lot of multibillion dollar deals that are starting because people are operating more on fear than hope.

The third force is the changing and rising expectation of consumers. We all know that consumers are reading these technological reports, believing they already have 500 channels and believing they can pick and pay for whatever they want today. Nobody has told them, and we're starting now to say, wait a minute - this stuff is in the labs now, but it's going to be five years, maybe seven, for some of this stuff. They're aware of the interactive black box. Some of them will roll out late next year, but across the country it may be five to seven years.

So when you ask about the role of the regulator, if I were to make an honest stab at five years, I would say we would be doing three main things. First, of course - and this is the key role - we would be playing umpire and referee in keeping a level playing field among the players. In other words, we would be maintaining an honest, transparent system. Second, we would be standing up for the Canadian identity. I think that is the heart of your mission statement to us. Third, we would dealing with social issues of television violence, for example, gender portrayal, protection of children in advertising and things like that. There may be other things, but I'd be pretty secure in predicting those things.

Mr. Hanrahan: If we look, for example, at identity and whether it happens that we develop this 500-channel universe, do you think that with the development of technology you are going to be able to have any influence whatsoever on that?

Mr. Spicer: Parliament has told us we had better find a way. That is what Parliament's law says we have to do. That's why I read section 3 of the Broadcasting Act at the risk of boring you. That is what you or your predecessors have told us to do.

We are looking very seriously and meticulously to find realistic ways that reflect the realities of Canada and not just textbook slogans or dogmas. The big challenge we are facing in Canada - I'm talking as a country, not about the CRTC - is how to juggle culture and competition. These two are in a dialectic right now. We have to find a way of resolving the dialectic in a way that allows the widest possible freedom and competition. We're totally in favour of that - and we can go into that today if you'd like - but we also want to be able to do what is consistent with our central mandate under the Broadcasting Act, which is to stand up for Canada.

We have spent 230 years building a unique style of civilization in this country in which shared values, which I believe are close to identical everywhere in the country.... I refer back to the little adventure I had four years ago at the Citizens' Forum. We found that whoever the Canadians were, whether they were Québécois, English-speaking Canadians, Sikhs, native peoples or whatever, there were about six central values that everybody shared: peace, non-violence, cooperation, consensus, compromise, things like that. I think we have to make sure that the answers we give to your question, Mr. Hanrahan, include those values. This is not an exact science we're involved in. We have to use a great deal of common sense, sensitivity and concern for a balance of interests here.

But I can assure you, we will not give up on Canada. That's our central role, and we will also take into account - we have to - the realities of the world market.

.0940

I think really we all - you, us, and everybody else - have to beware of simple-minded slogans. This is a terrible danger. In any discussion on communications today, one is to sloganeer and say, we have to have competition no matter what, or we have to have Canadian culture no matter what. We have to balance them.

The other thing is to establish a perspective in time and space. By a perspective in time, I mean we have to make sure we know when the ``gee whiz'' gismos are coming out of the labs and when they're actually going to be in a great majority of living rooms or whatever other rooms. That's going to take a great deal more caution on the part of all of us in public life. When we talk about the 500 channels or the information highway, we'll have to be more cautious. I say this to all of us, to everybody who talks about it. We have to make sure we tell the public that this stuff is coming, but it's not going to be here tomorrow morning. At our best guess it's going to be three, five, seven or ten years. In that way we will not create unrealistic expectations and then have to explain why we're not delivering these miracles tomorrow morning.

The second challenge or perspective is one of space. By that I mean we have to try to relate every issue to the big picture. I spoke of balance. You can take any one of our decisions or any issue you want to raise in the communications world, whether it's telecommunications or broadcasting, and prove almost anything. You can prove, for example, that one week the CRTC is in bed with the telephone industry, the next week it's in bed with cable, the next week it's in bed with the consumers, and the next week it's in bed with the artists. Either we're terribly promiscuous, or we're not bad at finding the balance.

So this is the little essay you asked for.

Mr. Hanrahan: This is a conversation we could carry on for quite some time, but I'll defer to my colleague.

Mr. McClelland: I have a question and I might be ahead of myself, as you're going to be releasing this report.

To follow the thread of what you were discussing about exerting cultural sovereignty in Canada, if Power DirecTv uses an American satellite, it would follow that there's no reason to prevent Expressvu from also using an American satellite rather than using a Canadian or an Anik satellite.

I wonder if you would comment on what would happen to Anik and to the cost of the services remaining on Anik if Pay-for-View and other commercial television migrates to American satellites. Further, how will Canada exert sovereignty over that part of Canada not covered by the footprint of an American satellite? We don't have many means of exerting sovereignty over the vast portion of Canada north of the American satellite footprint.

Mr. Spicer: Thank you, Mr. McClelland. I know you'll understand that since we'll be coming back on June 6 for a more detailed discussion, I'd like to remain a little cautious on this. As a matter of fact, we're doing a little more homework to flesh out our position so that we can give you a lot more information at that time.

To tell you as much as I can, we believe - and I think the government said this in its press release of last September 12 - that our exemption order, which allowed competition in the satellite delivery system - and only one company, Expressvu, has so far decided to take advantage of it - reflects government policy. This is verbatim what the government said. It reflects policy, but they meant government policy.

That much said, we think it also reflects the Telecommunications Act, which says that we should make maximum use of Canadian resources and also make sure the Canadian satellite covers the entire territory of Canada. We are very concerned with making sure every Canadian has access to the same services. This is one of the central values Canadians hold dear - equality. Right or wrong, that's what we believe and that's what we are trying to do.

I've said before that this is a very delicate dossier right now. We are not at all interested in polemics with anybody, and certainly not with the government or with any of you. I'm only here at your request to state facts and to answer specific questions.

Mr. McClelland: May I interrupt so I can have another one in the short time we have?

Mr. Spicer: Please do.

Mr. McClelland: Following up on the sense of Canada as a unit, I've always been struck by the fact that in Canada we have two absolutely distinct and separate news organizations that reflect Canada to itself. In Quebec there is Radio-Canada, and in the rest of Canada there is the CBC or the private networks. Exactly the same story going on at exactly the same time gets diametrically opposed, contradictory reportage. Has there been consideration of having the same news broadcasts or a national news broadcast and having simultaneous translation?

.0945

Mr. Spicer: I thought you would never ask. I love that question because it picks up exactly on what we have been pestering CBC to do for at least three years.

We have specifically been asking CBC in public and in private to subtitle the French news outside Quebec and the English news in Quebec. In Quebec you could watch the French news with no distraction and it would be only French, but if you wanted English news you could see it with a French translation, and vice versa.

That suggestion could do more for intercultural understanding than anything I can think of. I think it's right on target. I think we have to give Mr. Beatty a few weeks to catch his breath, but I can assure you we will come back on that with him and see if he will respond to it.

A voice: I'm sure he will be very pleased.

[Translation]

Mrs. Tremblay: I think that Mr. Beatty will be very pleased with that. In Canada, there is a high demand. It is a frightening thought.

[English]

The Chair: A quick follow-up question - two points.

Mr. McClelland: This has to do with convergence. If a little competition is good, then it follows that a lot of competition is even better. If we want to reduce the cost of communication, telecommunication, and get government out of doing what it perhaps doesn't want to do, or the CRTC out of a delicate situation, why can't we just say to the telephone companies that if they want to be in cable, be in cable, and vice versa? Why can't we say that as of June 1 this is it, it's an open ball game, go to work, may the best company win, and by the way, if anybody else wants to get in on it, there's the door, go for it? Why should the government be setting these competitive standards?

Mr. Spicer: If I could ask your indulgence, Mr. McClelland, in another four days we will give very fleshed-out answers to those questions. I can only say that there's a great jump between, let us say, the headline or the slogan and the more complex realities of the real live Canadian universe.

I'll just give you one figure. The revenues of telephone companies are seven or eight times that of the cable industry. One of the things we have to ensure is that competition will last, that it's sustainable, that it's not just a six- or twelve-month wonder and then one guy gobbles up the other.

I can't tell you what's in our report; I can just tell you that we are trying to be realistic. At the same time, as we have said many times publicly, we are strongly in favour of as much competition as is realistic for the Canadian market.

The Chair: Thank you. I might point out in passing that in the news department of CBC there are some correspondents - I'm thinking of Céline Galipeau in Moscow, whom I believe does double duty - and there are cases on the radio side of people like Don Murray. So there is not simply the possibility of doing subtitles; they're actually in place - switch-hitters, if I can put it that way.

Mr. Spicer: You are right, Mr. Chairman. I think that also gives, at least for international news, the kind of balanced covering you wish.

If I may take another two minutes on this important question, I think it's not a bad thing that we have different interpretations of the same news, in the sense that it would be good if each audience could see the other interpretation. What impressed me so much was to see this system in place in Japan, which is an officially unilingual country. The three major networks in Japan all have simultaneous English channels; it's an oral channel. You can click a button on the remote control and hear the national news in English or Japanese. Why can't we do it in this officially bilingual country? That is what we have been asking the CBC.

The Chair: That's an interesting point.

On this side we have two folks who want to divide the time. We will have Mr. McKinnon after we have done another exchange over there. Let's start with Mr. Ianno.

Mr. Ianno (Trinity - Spadina): Thank you, gentlemen, for appearing.

I want to pick up on some of the thoughts that were mentioned before by colleagues opposite about the term ``competition''. I would like to throw out another perspective and that is protection of the consumer.

.0950

As Mr. McClelland indicated earlier, why not competition if you believe in competition? I understand protecting the small so that they have a chance to grow, etc. You indicated that the telephone companies are earning seven or eight times more than the cable companies, and you want to give them a chance to grow so that they can compete on an equal footing.

My concern is the consumer. We know that Bell has been very profitable, yet when they went for rate increases you stopped them for whatever number of years you indicated. Yet you allowed it through the back door for installations, for $90 plus what was reported per minute charge, etc., as they appear. In terms of the role of the CRTC, I'm a bit confused at times. On the one hand you want to protect the consumer, yet I don't see it.

Let me throw in another perspective. In terms of the other people on the board, a lot of the interaction that I've been seeing in the last year has been with a lot of the stakeholders, except I don't see a lot of interaction with the consumers, whether they be cable users or phone users. Aside from some consumers representing their views by letter, how do you respond to making sure that you and your board are sensitive to what we parliamentarians see in our ridings, and making sure that you have independence but not to the point where you're isolated?

Mr. Spicer: Those are two excellent questions, Mr. Ianno.

First of all, with respect to the $91 installation charge for Bell, which I found rather horrific when I read it in the newspapers, what we are doing there is creating the competition that so many people are asking for. How many people will willingly pay $91 is going to be Bell's problem, because there will be lots of other companies offering it for $60 or $30. I can tell you what company I'm going to go with; it's not going to be with the $91 guy.

Mr. Ianno: What other company is offering it?

Mr. Spicer: They will come to light. Where there's money to be made, they will come to light.

Mr. Ianno: I see. On the one hand, the psychology is to give the small ones a chance to grow. On the other hand, until they grow on the telephone stuff, they will appear on their own. So we don't have to worry about them right now because Bell can offer the service for $91. Some day there will be somebody who can offer it for $30 or $60. Am I understanding it correctly?

Mr. Spicer: Maybe I can ask Mr. MacPherson to go over this for you.

Mr. MacPherson: On the $91 installation matter, the commission has given until February 1, 1996, for that charge to kick in. Between now and February, I think, as Mr. Spicer says, it's a certainty that there will be companies that can compete with a $91-an-hour installation rate. This is simple stuff too.

Mr. Ianno: Okay, we're giving them six or eight months to create.

Mr. MacPherson: Yes. In the meantime consumers get the same prices as obtained before that.

Mr. Ianno: Right, and they have choice at some point.

Mr. MacPherson: Yes.

Mr. Ianno: Okay. Let's go back to the satellite. You decided again, before the government overturned it, to allow just one company to provide the service. Is that correct?

Mr. Spicer: No, sir, that is untrue. May I put the facts before you?

Mr. Ianno: Yes, please.

Mr. Spicer: We created a competitive regime with two doors into competition. In our exemption order of last August 30, we created a competitive regime with two ways into competition.

If you used all-Canadian resources, you could come in without a licence right away. We did that because after our structural hearing the year before - the so-called mother of all hearings - we were told that people wanted competition to cable as quickly as possible. We said the fastest way was to let all Canadian companies in by exemption. So far, only one company has decided, having looked around the market, that it's worth their while to come in. We created a competitive world in which one company has so far decided to come in under door A, the exemption door.

Door B was the licensing route. We said that if you do not have all-Canadian resources, if you don't qualify under all these criteria, you can still come in the front door, have a nice transparent public hearing, and apply for a licence. We said that we were eager to do this. So far, nobody has decided to come in the front door and apply for a licence.

.0955

I must say I am completely mystified when I read stories saying that we created a monopoly by this.

Mr. Ianno: I guess the company that could also qualify is the phone company. Is that correct, that basically Expressvu is where most of the make-up is from the company?

Mr. Spicer: B.C. is one of the.... There are also a couple of other companies. WIC and Tee-Comm are involved in that.

I think you will see that those are the simple facts. We created a competitive regime but we can't force people to compete. We can't give orders to a company and say you must compete, get in there, we've created a regime, now you go and compete. It's as though the government said everybody has the right to create a dry-cleaning business and only one company decided to do so. You couldn't blame the government for setting up a monopoly. Those are the simple facts.

As I say, I didn't come here to argue with anybody and I'm not arguing with anybody, but I guess we have the right to set the facts straight.

The Chair: If I can intervene at this moment to have the other half -

Mr. Spicer: Mr. Chairman, I would like to answer Mr. Ianno's second part, the part about consumers if you'll -

The Chair: Absolutely. We're all for consumers around here.

Mr. Spicer: I'll do it very briefly. We have wrung our hands with despair over the difficulty for consumers to get together to form effective groups. We have reached out over these years to any consumer group we can find, the Consumers' Association of Canada, the Friends of Canadian Broadcasting. One of the first things I did was to take their executive to a nice, informal, low-cost, low-cal dinner to say we wanted them at the table - them and all the other public interest groups, all the citizens - with the same power as the Canadian Association of Broadcasters and the cable guys. The doors are wide open. We'll give them the information they want, like everybody else. Let's make it more effective.

As you know, it's intrinsically difficult to get 20 to 25 million consumers organized. We are not allowed to give grants to consumers, to create the CRTC's private little consumers' group. It would be horrible. We can't do that. If Parliament and this committee can find an arm's length way to fund consumers' public interest groups, that would be wonderful. Personally I would welcome that.

The Chair: We represent consumers.

One quick last question.

Mr. Ianno: This is on the same theme of competition. I understand some licences for multilingual TV have been turned down recently. Is there a reason competition is not desired?

Mr. Spicer: Are you thinking of Chinese radio in Toronto?

Mr. Ianno: There are a couple.

Mr. Spicer: There are a couple of those. The reason in that case and in some others is that it's really the smallest of the Canadian market. There is -

Mr. Ianno: Now you're rejecting these people who basically want to do the service.

Mr. Spicer: At a certain point, all-out dog-eat-dog competition could end up destroying both sides. In other words, you'd have two mediocre stations unable to put on anything of quality.

Mr. Ianno: I see. So Rogers should be protected when they own the one large TV station.

Mr. Spicer: I don't like to use the words ``protect'' and ``Rogers'' in the same sentence, if you don't mind.

Mr. Ianno: Okay, I see.

Mr. Spicer: I'm a little sensitive about that.

Mr. Ianno: They are the only ones that have the service.

Mr. Spicer: As I say, we would like to keep as many valid and useful players as possible alive and well and able to compete, consistent with the Broadcasting Act's goal of quality and diversity in Canadian programming. As I said, it's not an exact science. It's not always symmetrical.

The Broadcasting Act is a little messy in its application and necessarily unpopular. I guess that's one reason why Parliament created a regulator. We cannot make decisions that are each universally popular.

The Chair: I'm going to turn it over to Mr. McTeague.

Mr. McTeague (Ontario): Thank you, Mr. Chairman.

[Translation]

I would like to welcome all the CRTC's officials.

[English]

I'm very interested in the topics of consumers and cable subscribers. I can't think of any better way to unite consumers than to start from where we left off after the cable revolt of January 1, 1995.

Rather than talking about the negative billing and the whole episode, which I think has put a very sour taste in the mouths of most Canadians, I want to talk about something I think many members of this committee are interested in. This deals with the cable programming fund which, tongue in cheek, your department authorized in 1993 and which has had the effect of leaving a lot of us here with a few very unanswered questions.

Of course, I'm dealing with how you justified from a statutory point of view, under the Broadcast Act, charging or continuing to refuse to set aside or to rebate money to consumers, as was expected under the capital expenditure formula of 1986, amended in 1991. More importantly, this program fund, if projected over the years, will mean a $600 million windfall which you, the CRTC, have directed to the Canadian programming fund, and another $300 million unaccounted for in the pockets of the cable companies.

.1000

I can understand the Godzilla versus Bambi scenario that has been presented to me in terms of the plight of cable companies, but I think consumers have to rate here. I'd like to get some of your comments on how you justified what I believe was a hidden tax.

Mr. Spicer: Gladly, Mr. McTeague, and thank you. That's a very important question, which a lot of people are asking, thanks to you, a couple of your colleagues and Mr. Mahar. Let me see if I can set some of your concerns to rest.

We did not create a tax. We do not have the right to do so. Parliament has the right. It is certainly not a hidden tax, because we did it openly. What we created was not a hidden tax. We created a system of voluntary contributions, openly discussed and openly arrived at.

Mr. McTeague: Whose funds are you talking about?

Mr. Spicer: The cable companies have a choice.

Mr. McTeague: But they're getting those moneys from the supplier.

Mr. Spicer: But they would be the ones we would tax. We wouldn't tax consumers.

Mr. McTeague: You're saying you've volunteered money by the cable companies, but the money doesn't actually come from the cable companies; it's a continuation of money taken from subscribers. Is that correct?

Mr. Spicer: As I said to Madam Tremblay, every nickel in the broadcasting system comes eventually from ordinary Canadians.

Mr. McTeague: Did you give notification to Canadians that this was going to happen?

Mr. Spicer: Oh, yes, we did. Can I just finish my answer?

I said this was openly arrived at. It was amply and specifically discussed throughout our one-month hearing in March 1993. We went over this in technicolour with the cable industry, in public and on national television. It was fully discussed and fully ventilated at that time. No one complained at that time. It was only two years later - for reasons I don't know; it's a complex issue - that this became a subject of discussion. It was openly and specifically discussed on national television. It was then fully discussed in a press conference and in ample documentation that we put out at the time.

We explained that this was in two ways a very strong pro-consumer decision. The first way was to hasten the introduction of the interactive black box, that is, the box that would give consumers more control over customizing the services they would decide freely to pay for.

We'll always have packages. I don't think we're going to see, in the next ten years, a total pick-and-peg universe where you can just pick one channel you want and not the others. The Americans don't have it; they're not even talking about it.

As to the ability to customize your own channels and pick the packages you want, at the request of consumers - and that was one of their prime goals - we were attempting to hasten the introduction of these interactive black boxes plus the multiplication of channels through digital video compression to give consumers more choice and to improve the quality of image.

So those were three technical ways of helping the consumers by the only way possible to -

Mr. McTeague: Mr. Spicer, in terms of the addressable digital decoders, you've also assigned consumers an extra charge of, I believe, $75 -

Mr. Spicer: It's capped at $75.

Mr. McTeague: - over the next five years.

Mr. Spicer: Yes.

Mr. McTeague: This brings me back to my original question: where do you believe you have the statutory authority to do that under the Broadcasting Act? We know full well that the transmission of information back and forth between the cable television company and the subscriber is not within the powers vested under the Broadcasting Act and therefore given to you as a regulatory body.

I ask the question again. If you are ultra vires of that act, in both telling subscribers how they're not going to get a rate reduction and in funding this addressable digital decoder, where's this money going to and how do you justify it being taken from Canadians?

Mr. Spicer: If we were ultra vires on this, Mr. McTeague, the government would be too, because their Department of Justice approved this regulation.

Mr. McTeague: It's not the first time the department has found itself in error.

I guess you're also the regulatory body. Your statement at the beginning of your introduction suggests that in some countries politicians in power tell regulatory bodies how to do decisions secretly. In this instance, where members of Parliament and politicians in Canada are getting highly pressured by consumers, where has your department been able to show its accountability, both legally and morally, to consumers in this country?

Mr. Spicer: Could I finish the second consumer benefit?

I'll just tell you what our intentions were so that at least you'll know what we were trying to do, and then we can have an honest disagreement on the legality of it. We think it was perfectly legal, and I've given you the reason for that. All of our regulations are run through the Department of Justice section of the Privy Council.

.1005

The second reason we were helping consumers under the Broadcasting Act was to establish this production fund, in other words to steer $300 million to Canadian producers of Canadian programming so that Canadians would have Canadian choices. That's precisely what the Broadcasting Act tells us to do; that is manifestly our duty.

Whatever one might want to think about hastening the introduction of technology - although I think we can make a strong case for that too - at a time when Parliament and governments are obliged to cut the budgets of CBC, Telefilm and NFB, anybody who can find a way to steer some money to Canadian production is probably helping our respective broadcasting aims.

Mr. McTeague: I have no difficulty with what you've said. My concern is on subsection 3(1) of the Broadcasting Act. It states that you can of course encourage Canadian programming, and that's exactly what you've done. You do it through cable companies. My concern is that there's nothing in subsection 3(1) of the act, if I'm reading it correctly, that would permit the CRTC to require cable television subscribers, the people I have to answer to, to contribute to such a fund.

There are all sorts of philosophical and good reasons for saying we are doing this. I want to ask you again under what authority you have been able to do it. We've challenged you before on this and you've come back, not suggesting there's a legal problem here but suggesting you have that authority. However, you don't have it to charge subscribers. So again, what's your response?

The Chair: This response will have to be the last part of this particular section of question-and-answer.

Mr. Spicer: Mr. McTeague, I'll try to concentrate on your question.

We believe our action was totally in conformity with the Broadcasting Act. We were asked to put high quality and very diverse Canadian programming on the air at affordable prices and to make sure it's distributed everywhere in Canada. That is precisely what we tried to do, and I think we achieved that. The creative community is telling us this is a major contribution to the second part of the contribution we're making. The first part fits in with distributing - making sure all Canadians have access to it. That's the equality factor.

I really take your question very seriously. It's going to be discussed in court, I think, in the Mahar case.

Mr. McTeague: I don't believe there's any relevance to the Mahar case. Mr. Mahar's case is specific in the area of notification. My question to you is on what grounds you are charging subscribers and why they are not getting the rebate they deserve as of January 1, 1995.

The Chair: I think we've already had a discussion of this; perhaps later we can return to it.

[Translation]

Mrs. Tremblay: For the benefit of my colleague, I'd just like to say that people who manage the fund told us yesterday that the overcharge will be $1 billion over five years, so we're dealing with $500 million. The fund managers gave us this information yesterday.

Mr. Spicer, I also want to make sure that I understood what you said in answer to my Reform colleague's question. In the last three years, it seems you think standardizing news within the CBC is a good idea. I guess you basically want French news to be translated into English...

Mr. Spicer: No. Absolutely not.

Mrs. Tremblay: ...and English news translated into French.

Mr. Spicer: How can you imagine that anyone in this room would have said such a thing?

Mrs. Tremblay: That's what he suggested.

Mr. Spicer: He never said such a thing. Absolutely not.

Mrs. Tremblay: Oh, yes!

Mr. Spicer: Mr. McClelland is perfectly able to defend himself and to explain what he said. I understood perfectly well what he meant. He suggested there be two independent and parallel news systems, each interpreting the news from their point of view, but to promote understanding between both linguistic communities, there would be subtitles. That's all he said.

Mrs. Tremblay: Very well. Thank you. I'm glad I asked the question. Now I understand.

I'd like to come back to the question which was raised a little earlier regarding the exemption order you issued for Expressvu. The act stipulates that the CRTC can issue an exemption when it believes it would not have a major impact on the implementation of Canada's broadcasting policy. That's what it says in the act. So when the CRTC authorizes exemptions, it must apply to exceptional circumstances which won't have a big impact on the broadcasting system. How could you believe that the exemption order for Expressvu would not have any major consequences? If you had given them a licence, we wouldn't be in this whole bloody mess.

.1010

Mr. Spicer: I don't know how we should translate that nice little expression. Why don't we just say ``quagmire''. I believe that lady said ``quagmire'', or something of the kind.

We believe - and it was an honest interpretation on our part - that the exemption rule was used in the best interests of Canada's broadcasting system and in a way that was appropriate given the circumstances.

During the 1993 hearings, the public wanted us to introduce competition to cable as soon as possible. This might answer part of Mr. Ianno's question. Everyone wanted there to be competition against the cable industry. Since content wasn't really the issue, we didn't think this exemption order would affect content. We wanted to have services which were basically Canadian. That was our take on the issue.

Mrs. Tremblay: But cable companies have direct access to American satellites.

Mr. Spicer: Only to assemble their services and not to distribute them. There is a difference. I know it's a complex matter. Many people think that cable companies use American satellites. Yes, they do, but not to distribute their product. Cable companies distribute signals in Canada, but they use American satellites to assemble American services. They link those services down to their technical headquarters, then distribute them through cable. That's the difference.

Mrs. Tremblay: Whereas Power DirecTv wants to broadcast directly from satellite.

Mr. Spicer: You would have to ask Power DirecTv precisely what they intend to do.

Mrs. Tremblay: Fine.

According to a document we recently read, I believe you are currently studying this issue. The three wise men said in their report that you have been studying the question of direct-to-home satellite broadcasting for about 10 years now. So, why is there suddenly a crisis, and why did you have to meet the needs of consumers by introducing competition to the cable industry by issuing that exemption order?

Mr. Spicer: I think that has to do with the quick rate of penetration of the Canadian cable system and its infrastructure in Canada. It's really a controversial subject here, but it's the envy of the world.

You have had discussions with the French who have a cable penetration rate of about 3% or 4%, whereas 75% of Canadians have cable and there is a potential 94% penetration rate. Of course, cable companies had to invest a lot of money.

Where did that money come from? Of course, as I said earlier, it didn't come from Santa Claus or from Parliament, but out of the pockets of consumers. That's why over the years there was a gradual increase in cable rates, and I don't have to tell you that it didn't please a lot of people. However, the result is that we have a system or national cable infrastructure resembling the railroad situation in the 19th century. That infrastructure is a priceless asset to our communication network. Even if you hate this or that cable company for whatever reasons, you basically have a country with a fantastic communications infrastructure. But consumers have told us: ``Listen, we've had it with repeated rate increases. We want competition to pressure cable companies''. That's why we did.

Mrs. Tremblay: Thank you.

Let me change the subject. Last April 7, you reached a decision regarding Bell Canada's rates in metropolitan and urban areas and those in rural areas. Did you actually study what ramifications this will have in isolated regions where half the population lives under the poverty line? For instance, in a riding like mine, 30% of people aged 18 to 60 are unemployed. These Canadians are used to having a phone and cable TV. But rates are climbing to the point where these people won't be able to afford cable and phone any more. I really think we are regressing. Does the CRTC intend to break up Bell Canada just like the Americans broke up AT&T?

Mr. Spicer: No, Mrs. Tremblay. But it's generally a good question.

.1015

To answer the first part, I would say that we are very much aware of the need of people living in rural regions and in isolated regions. But if you are talking about the balance between residential and personal phone rates in remote regions, on the one hand, and the interest of small and even large companies, on the other hand, it is a dilemma for us. We want local residential rates to stay as low as possible. Our rates are the fourth lowest of the 24 OECD countries. Iceland has lower rates and Portugal's rates are much higher. Our local residential rates are among some of the lowest in the world.

We have started to allow for a gradual increase of local rates in order to promote long-term job creation. Small and medium-sized businesses create six or seven out of every 10 new jobs in Canada. Some of the hardest costs to support for new businesses are long distance telephone rates as well as local rates, but mainly long distance rates. By lowering long distance rates, we help small businesses hiring people. This will even help remote regions where there are a lot of small and medium-sized businesses and where we encourage people to stay in their region.

We believe that local rates can be raised gradually and carefully. As I said earlier, the rates were in effect frozen for 12 years, which is a very long time. It is really a very only time. We might have created the problem ourselves by defending a bit too vigorously the individual interests, and that is why we must now rebalance the situation. Residential rates may go up a little, but in the end small businesses will be creating more jobs.

The Chairman: You see what it's like to be Chairman?

Mr. Spicer: Indeed.

[English]

Mr. McKinnon (Brandon - Souris): Welcome again, Mr. Spicer, to our table.

I think I told you last time.... I heard you in Calgary in 1988 before you took on this job. Might I say that you have even grown in stature and ability to communicate. I think this is one of the trademarks of a true political or non-political appointment that we have Canadians -

A voice: He's setting him up.

The Chair: This is either the best set-up or he is going to faint from surprise.

Mr. Spicer: I was afraid you were going to say I made more sense then than I do now. But thank you very much for these kind words.

Mr. McKinnon: As I've sat at this table over the last 18 months I've noted some trends that have either happened or are currently under way. We appear to be embarking on the 500-channel universe; we appear to be having a greater fragmentation of the audience as we do this; we appear to be having a long-term trend of reduction of public funding to broadcasting; we appear to be having fewer dollars put in place for Canadian programming - all of which has a major impact on the point that I sense you're stressing today, namely on culture and competition.

I fear for the Canadian programming in the long term, that we are able to provide our unique and contemporary development of what Canadians see themselves as being or becoming. Throughout all of this, I am also sensing that CRTC is trying to regulate all the players, the telephone, direct-to-home companies, and of course the cable. I'm sensing that we are probably peaking at the 75% penetration by the cable companies.

If we are going to go into competition with telephone, that is probably going to add to that level, if it's affordable. As Madam Tremblay has commented, there are people not just in her riding but also in mine that would find that difficult.

.1020

My question really is this: do you sense that we're going to be able, with all this change, to sustain a Canadian-content component that is meaningful? I sense that you said the five things or six things...peace, non-violence, Canadian values, Canadian culture.... This is a very long question, but are we going to be able to keep all of these variables in place? It is a very long question, but I imagine you have a short answer.

Mr. Spicer: My answer is maybe.

Some hon. members: Oh, oh!

Mr. Spicer: You've asked probably the most fundamental question one can ask in this world on Canadian communications. Historically the Canadian strategy has been - why not call a spade a spade - a protectionist one. We have tried as a country in many ways, not just in communications, to build infant industries and to set up various ways of favouring and protecting them.

In the case of the Canadian broadcasting system, which is now under increasing international attack, if I may say so, by satellites and soon the Internet, telephone, we can deliver programs this way from anywhere in the world. Also, because Canadians are cosmopolitan people, they want programming and information from around the world. We have to look at this anew.

The community of people who spend a good part of their lives on this - and that includes people like you, the network people, the artists and consumers - had a television summit three years ago in Montreal. Mr. Beatty chaired it. It was the first time I had seen a real shift in the orthodox thinking toward what I would call the new orthodoxy, that in the long run the only way we can ``protect'' Canadian culture is by creating more of it, of higher quality, and distributing it affordably in Canada. In other words, it is going from a mainly protectionist strategy to a more aggressively positive one of heavier investment in Canadian programming and its distribution.

That makes a lot of sense. I think it makes everybody feel free and warm and modern when I say that. However, the fly in the ointment is money, again. If the answer to relying a little less on protectionism - and we'll come back to that, because I think we have to keep certain parts of it in place as long as we can - if the answer is more money for Canadian programming production, where is the money going to come from at a time when you very well know you don't have the money? The taxpayers don't want to give it to you. We have to find ways.

I hate to mention a cable fund. Mr. McTeague will come back at me. I see him smiling. This is called pre-emptive diplomacy. Before you ask me, I want to tell you, if I can. We have to find innovative ways of steering money to Canadian production - new ways. You have to admit it's new and innovative. So this is the problem we're facing.

In the long run, by accommodation, quotas, using navigational tools, and if you'll wait until our report on Friday you'll see a few more ideas in there, we think that with a mixture of protection - less of it, though, probably - and more and more emphasis on the quality of programming, we will keep Canada on its own screens. We'll keep good Canadian programming there. In the end, no protectionist quotas can force Canadians to watch certain shows. They have to be good; they have to be seductive. That's really the new strategy we would all like to follow.

The Chair: I know you have a quick little follow-up, Mr. McKinnon.

Mr. McKinnon: This is just a comment on over-the-air cable. I know that some applications have come to your attention, one of which is in my riding. What is the feeling of that kind of technology, making sure it's coming through over a wire as opposed to through the air?

Mr. Spicer: This is multipoint distribution system, MPDS. These have been very useful fillers in areas where cable has not been able to reach. This and other technological devices such as cellular vision, which is being developed by WIC in Vancouver, telephone, the Internet - you know they're already offering long-distance telephones with this Israeli invention on the Internet - these things are going to evolve.

We'll have many more technological surprises along those lines that are going to give cable a ferocious run for its money.

.1025

I think technology and market conditions and consumer demands are really what's driving these things. Underlying many of these questions may be the question of what are you regulators doing here, why do we need you? I would say that the world is no longer regulator-driven; it's not government-driven either. Its driven more and more by technology, the market and consumers. The role of the regulator and government, I think, is more to guide and nudge to achieve broad directions. That's the best governments and regulators can do.

The Chair: I hasten to intervene at this moment. It was a brilliant and fine question.

Mr. McClelland.

Mr. McClelland: I'd like to follow up on Mr. McKinnon's point and one that my colleague, Mr. Hanrahan, raised on the role of the CRTC. It's going to be like keeping the genie in the bottle. We haven't even discussed microwave transmission. We're talking about deathstars and the Expressvu and competition to satellite producers. So we should forget about the hardware, because as soon as you get a handle on one kind of hardware there's another piece of hardware going to come out.

If we forget hardware and concentrate on the software, the production of the content, it seems to me that we have to be careful in television not to parallel what has happened in the cinemas. All the first-run movies that get into the cinemas really have to be American because that's where they control the first-run movies. How do we go about doing that?

If you're in a production company, as I understand it, if you get a Canadian movie it will get on because of the Canadian content rules. They absolutely crave movies. How do you go about paying for them? You pay for them through the number of people who view them. Even though we have, as I understand it, 80% penetration on cable in Canada, which is enormous - much different from the United States, or anywhere else for that matter - if pay-for-view and the purveyors of movie channels and that kind of thing don't really get any penetration because the cable companies charge $80 for a black box, or whatever they charge for a black box, when I understand they've already had extra money for a black box, how do the producers or distributors of these movies, like MOVIEMAX, get into the home and bypass the cable company so they can sell their wares? It's very complex.

The bottom line is this: how can we have the telephone companies, the cable companies and everybody else fighting to see who can get their hands deepest in the consumer's pocket? That's really what this is all about. How does the consumer then make a decision, picking up on Mr. McTeague's point of view? How do we as consumers make a decision that we're prepared to pay to see this movie but we're not prepared to pay to see that movie? We want to have choice in what we're paying for. That comes down to the annoyance Canadians had on the most recent cable television thing. We all have things we don't want to pay for. We don't mind paying for what we want, but we'll be damned if we're going to pay for stuff we don't want just because you think it makes you feel good or it has Canadian content. How do we go about doing that?

Mr. Spicer: If we want to implement the Broadcasting Act and have the high standard and diverse Canadian programming we want, and a multiplicity of Canadian choices, we are going to have to explain more the realities of the rather small Canadian market to Canadians. It's a simple fact that the economics of a market of 28 million is not the same as 270 million in the United States. We have two official languages. We're sharing one official language with our gigantic neighbour to the south who forces English-speaking Canada to compete, using their quality standards with their budgets and with many of our best artists going to Hollywood and New York.

We have to look at values such as competition and choice in the light of the realities of the Canadian market and, as I said earlier, not get trapped into slogans that say, let's have unlimited competition.

If you're an American, you can do that. If you're a Canadian and want to have a Canada, then you have to look at 230 years of Canadian history to see how we did this miracle. Canada is not an accident; it's an act of will. We did all kinds of artificial things to create this country and to maintain it. We're going to have to continue doing that if we want a country.

.1030

Madam Tremblay will give another interpretation, and we'll have simultaneous interpretation of her views on this. But that's what I think. We have to tell Canadians, first of all, that even in the United States you cannot choose a single channel and pay for it. They do not have unlimited pick and pay. A lot of people, including editorial writers who should know better and do a little more homework, point to the United States as the homeland of freedom. Yet it's one of the most protected audiovisual markets in the world. Canada is the most open, for heaven's sake.

Mr. McClelland: But you can still pick up one channel, if that's what you want, and pay for it.

Mr. Spicer: I don't think so, unless it's a pay-for-view channel. We have that in Canada, even in this tiny market.

The proof is in the pudding. Certainly we humble, boring regulators don't claim the credit for this. We all should claim this, as a country and those of us who have been involved. This means the politicians, regulators, and above all, the artists and entrepreneurs. Look at what we've produced here. Look at Canadian television for a week, if you live through it. Go through all the channels, and then go to Europe. Pick a country, such as France. Forgive me, but it's not amusing. There's not much there but two or three channels. Germany isn't much better. Britain has three or four high quality channels and that's it. The United States is wall-to-wall O.J. Simpson.

The Chair: Newsworld is wall-to-wall O.J. Simpson.

Mr. Spicer: Yes, I know. I will join you in a well-premeditated attack on Newsworld for running O.J. Simpson. As a consumer, I don't think they should. From a Canadian point of view, they're explaining the difference of Canadian law and blood samples, I'm sure.

To come to your question, I think Canadian situations and policies have to be based on Canadian realities. It's hard for us to explain a lot of things to Canadians when they're getting American slogans all the time. They're getting American law and stories of American competition that do not exist -

Mr. McClelland: I don't expect an answer in the time remaining, but the root of my question is how we go about getting viewers to watch Canadian productions through pay-for-view. We're not getting it through cable companies because of the lack of black boxes, which is because of their cost. The cable companies want to get paid upfront for the black box rather than putting a black box in everybody's home and letting people choose from them. That's why the movie suppliers need to go through Expressvu or Power DirecTv. I'll just leave that as an editorial comment.

The Chair: Mr. Spicer, we have a number of people who want to ask questions of you again. We have some who want to do it for the first time, such as myself and Mr. de Jong.

If I may, I have five questions to ask. The Broadcasting Act says that it allows for the appointment of CRTC commissioners, who are resident in the regions, and for the creation of regional offices. All of the reports say, as well as the estimates, that there are six regional offices: Vancouver, Edmonton, Winnipeg, Toronto, Montreal and Halifax. I got a call yesterday from somebody indicating that on Friday, various people in the Toronto office were laid off and the office was closed. Is that true?

Mr. Spicer: This policy does not ensure that a public-service-staffed office will be there. It ensures the recognition of a regional commissioner. The regional commissioner in Toronto will remain firmly in place as a resident there with office support. For purely budgetary reasons, our entire organization is under severe scrutiny and attack. We have to make some very ruthless decisions, as does everybody else.

The Chair: So you'll be closing all of the regional offices across the country?

Mr. Spicer: No, I'm not saying that at all. We are trying to hold on to the other offices.

.1035

The Chair: But you're going to close down Toronto, in the most populous part of the country?

Mr. Spicer: We got along without a Toronto office for, I think, 24 years. As a matter of fact, the major players in Toronto tend to deal with headquarters anyway. It would be wonderful if we had the money, if we could afford it. We don't take this decision with any glee, believe me.

I guess the people in regions outside the Canadian heartland of Ontario and Québec feel even more isolated and would make a very strong case that their offices in Vancouver, Edmonton, Montreal, and Halifax should be protected. The Montreal office is there, of course, because I think we need an office in the heartland of French-speaking Canada.

The Chair: I have a feeling we may not have heard the last of this.

The next question: there is some suggestion that the cable companies, which are given money to increase their capacity, don't actually want to increase their capacity. Can you explain to me why they wouldn't want to increase their capacity even though you give them money to do so?

Mr. Spicer: I think they would be unwise - I won't say crazy, but close to it - not to increase their capacity and introduce these upgrades of a better picture quality and the interactive black boxes. They're going to be under ferocious competitive assault from DTH, from satellites.

The Chair: Have you detected in the past a certain reticence to increase capacity, despite the fact that you give them money to do so?

Mr. Spicer: No. Take, for example, Maclean Hunter, which was less inclined to invest in infrastructure than Rogers. Rogers spent a great deal of money upgrading its system, as we know. It will be among the first to introduce interactive black boxes. This is an entrepreneurial decision that companies can make. There are a couple of thousand cable companies and they can all make different decisions. I think they can see the handwriting on the wall.

We're moving into a strongly competitive universe. There are going to be four or five different ways of receiving television signals. The picture quality, for one thing, is much higher on satellites, and there is the number of choices being offered by satellites. I think the Power DirecTv people are talking about a couple of hundred channels in a year or two, something like that. Then there is the interactive dimension. All those technological devices are highly recommended by the market. I think cable companies would be very unwise not to invest in them.

The Chair: The third question is, if you were asked by the government to come up with new sources of revenue for the CBC, what part of the system would you look to? Would you look to the distribution system as perhaps the most promising?

Mr. Spicer: I'd look to this committee to find the answer to that.

The Chair: I thought I'd try that. It's just an abstract question.

The fourth question is this one. When there is a reinterpretation of the Broadcasting Act, there seems to be the one route, which we're dealing with for the first time, which is the DTH, the policy directive route, the 40 days, the 40 nights. That's one route. Another way is for a government to issue a policy statement that explains in general terms where the government wishes to go.

When a policy statement is made, as opposed to a policy directive, how do you use that in interpreting the Broadcasting Act? What force does that have for you?

Mr. Spicer: If I'm going to give an example of that, I can say that we have taken to heart over the last 20 years, in the last 15 in particular, the decision of various governments to favour cable. This is an old policy of Canadian governments. They decided for infrastructure reasons that cable was the most appropriate, cost-effective, climate-effective way of distributing television signals in Canada. We have reflected that. The regulatory decisions we have made have reflected government policy.

As for the use of Canadian satellites, we also followed the government's press release put out last September 12. Our exemption order on DTH also reflected government policy.

We take very seriously any government policy statement. We are vividly aware that you are elected and we are not. We're also vividly aware of the reason you set up an independent regulator, so that it would be independent and transparent and would take personal decisions out of the field of partisan politics and personal favour, but leave them under broad political surveillance, such as our appearance here today. I might also add that they were very unpopular decisions, intrinsically unpopular decisions.

.1040

I think there's a balance here that we all try to respect. We respect - indeed revere - the authority of Parliament. We constantly refer back to the Broadcasting Act as our Bible, the act you laid down for us to follow.

To go to your second point about the government's order, this might be a good time for me to make a constructive comment about this. I think we have seen, inevitably, a certain surprise and maybe a little bit of drama injected into the last few weeks because of the first use of a new power under a new Broadcasting Act, which has been in effect barely four years. None of us have seen this animal of government orders before, and therefore we're playing out the normal course of events under this new law.

For the record, the CRTC is not astonished, outraged or upset at all by this. We see the government exercising its legitimate authority under the Broadcasting Act. That's what it says.

The second part of the play under the Broadcasting Act is that we are asked to comment on the government's orders. We did so respectfully, constructively and frankly. The third phase will be June 15 as regards us. We'll come back and you will interrogate us on that. Then I guess the government will come out with a draft order - that's the fourth act - and then they'll consult us, come up with the fifth act and put it out.

I think this is exactly what all of us wanted four years ago, particularly the CRTC. While recognizing and welcoming the government's authority on broad policy and matters of general application -

The Chair: Let me just intervene to say there's a vote in 30 minutes, which gives us 20 minutes, since we are quite fleet of foot.

Mr. Spicer: All right.

We had two reactions then and we have two reactions now to these orders of the government. One, we completely accept the authority of the government to do this. This is an act of a democratically elected Parliament. We had lots of input into it and Parliament listened to us. Therefore the government has the right to issue orders.

Secondly, we lobbied very hard - we pleaded very hard, I should say - to have this 40-day period, to have the chance to appear and to have transparency so that the order would follow what Parliament said - in other words, a broad order of general application.

That's what this is all about; it's the normal playing out of a procedure foreseen by the law. We think this is a rather healthy exercise, which is probably going to end, I would hazard to predict, in a typical Canadian compromise of some sort that's going to make a lot of sense.

The Chair: I'm afraid I have to interrupt myself now, and you. We'll try to get through as many people as we can, but given the time constraint perhaps we could limit our questions to a couple of minutes each for a real zinger.

We'll start with Simon.

Mr. de Jong (Regina - Qu'Appelle): There's no doubt you're aware that this committee has been holding hearings and is now seriously deliberating on its report on public broadcasting and the CBC. Events in some ways have overtaken us, with the budget and the realization that there are major cuts to the CBC and there will continue to be. As you alluded earlier, this committee is also trying to find other possible sources of revenue for the CBC.

One of the concerns expressed by the CBC is that they claim they spend around $15 million per year just on lawyers' fees and so forth, interacting with the CRTC. They also requested a delay in their licensing hearings, given all the major changes brought about by the budgetary cuts, by re-examining their mandate and so forth. Is there some possibility of delaying and streamlining the CBC licensing process so it doesn't have to cost them $15 million a year?

Mr. Spicer: I understand the frustration of the CBC with having a regulator at the best of times. The CBC used to be the regulator. It's never much fun to find out that you, the regulator, have become the regulated. That's an historical problem.

There's a much more acute and serious problem now, and that is funding. We are infinitely sympathetic and infinitely sensitive to the CBC's predicament. We are willing to make all kinds of accommodations and show reasonable flexibility in this. But in the end, Parliament told us to monitor the CBC and ask them such questions as what they are doing about TV violence, what they are doing about gender portrayal and multiculturalism and a whole raft of other things that Parliament came up with.

.1045

We could scrap all of this if you tell us to do so, but I don't think you want to. I really think it's healthy that the public broadcaster also be accountable to somebody. Since we're the only designated arm's length, transparent referees, that's the job we try to do.

I can assure you, Mr. de Jong, we're not looking for ways to complicate the CBC's life. It's the opposite. We told them during recent consultations that although we couldn't backtrack on a whole lot of decisions that were already in the works, if they came back to us a year or two from now and were really in trouble, we would almost immediately program a new procedure to accommodate them. We'll be looking for ways to help them.

Mr. de Jong: Given the budgetary situation and the cut-backs, a concept being bounced around is to relieve the private stations and private broadcasters of any requirements for Canadian content. In turn, they would help contribute to the CBC to ensure there is Canadian production and content on the CBC. In other words, Canadian content would rest more and more with the public broadcaster, and the private broadcasters would be allowed to follow the market forces. Do you feel comfortable with having all of the Canadian content and Canadian culture rest within the CBC, or would you rather see it more spread around?

Mr. Spicer: I'm much more comfortable seeing it spread around the way it is now. I think it could be, in the long run, very dangerous to ghettoize Canada by sticking it on one network whose budget is predominantly under parliamentary scrutiny. Who knows what kind of government you might have in future years? It might say, let's get rid of that. You'd be putting Canada under the guillotine forever. I think it's much healthier to have a number of sources in Canada.

Frankly, the private networks often do superb Canadian programming. They do at least as well as the CBC in many areas. I don't think they should be prevented from doing that. In this new universe of competition, I think the Canadian private broadcasting industry agrees - and I know Mr. McCabe has written about this recently - that their best, most successful and profitable niche is Canada. Canadian programming is the best way for them to succeed.

So I think we should probably leave the basic system the way it is, but fine-tune it as required.

Ms Brown (Oakville - Milton): Mr. Spicer, in your comments and in your answers to the questions, something sticks out for me. I sense a conflict between your own passion for the country and the values you say Canadians share - values like tolerance, fairness, cooperation and all those sorts of things. In your opening remarks you seemed to be trying to show us how much the CRTC has encouraged competition. Later on you talked about how the world is not driven by governments and regulators any more; it's driven by technology, the market and consumers' desires.

Is it possible, from your own personal history and experience, to synthesize the traditional values of Canadians as you listed them - and of course there are more - with this new deregulated world, where the market is everything?

I'm thinking of one decision I'm not particularly happy with. You can use this as an example. It seems to me that as the market drives more and more, society fractures into haves and have-nots. Canada so far has shown less of a tolerance for visible poverty, for example, than other nations have. Yet we now have the CRTC decision that says it could cost you $91 to get a telephone put into your house. That's the market and the new competitive environment the telephone companies are operating in, but for poor people, maybe they've never seen $91 as a discretionary amount of money beyond, say, housing and shelter money.

.1050

Mr. Spicer: Maybe Mr. MacPherson will come to my rescue if I get in over my head, but I don't think you're going to find that $91 as an upfront cost to have a telephone installed. This is the kind of extremely rare expense that would occur if a mouse were to gnaw through your phone wire or you were to have a serious flood in your house. That's the first point.

Ms Brown: It's not just when you move.

Mr. Spicer: No, it isn't.

The second point is that if Bell wants to charge $91, somebody else is going to charge $60, $30. So that is not a real figure. I wouldn't worry about that.

To come to your central question, you're right. What may seem a contradiction is really an attempt to define the balance we have to reach. I would plead a little bit guilty to highlighting how pro-competitive we are trying to be, because I think some people have quite the wrong impression, that we are mired in a protectionist mentality. It's absolutely untrue. It is the opposite. I can produce chapter and verse in both broadcasting and telecommunication.

The fact is, because of the Broadcasting Act, we have to find this constant balance between culture and competition. You're quite right. Competition is not everything. A lot of people say it is. I think the trendy sloganeers who get a good idea rattling around in their heads say competition is great, we have to do it...the Americans say it's everything. Then they forget Canadians are more than consumers. They're also citizens of Canada. If you talk to some guys in Hollywood, they will say they have 28 million Americans up there, an extension of their market. That's all they see. They do not see a country here. We have to remind them.

We're going to get into the cultural exemption here. I see the FCC is now getting involved with some of these things...Mickey Kantor. The big picture here is that Canada is going to be under increasing pressure from the United States, USA Inc., on the whole cultural exemption.

We have to decide how much longer we want to have a country. It doesn't mean we have to be stupidly protectionist. We have to be more flexibly Canadian. But we have to find money to invest, and we have to hang on to certain regulations and restrictions that favour Canada. I make no apologies for trying to favour Canada. That's what Parliament told us to do.

Ms Brown: As one member of Parliament, I would like to encourage you not to feel you have to keep proving how much competitiveness you're encouraging. I think the role of the regulator in government has to be reasserted if we are in fact going to protect Canadian culture and have the country that we have today with these very civilizing values we all share.

I want you to feel the change in mood from the last government to this one, because I think it is very different. Sometimes it's hard for people who are in essence working for the government and working for the public to see that change coming quickly, and to change their way of thinking about it to reflect the new government. There is a sense in the government that we value what you do. We get mad at you too, just like all consumers, but it's important in the long run for the retention of our culture.

Mr. Spicer: It's very encouraging to hear that.

The Chair: We are having a race now between questions and running over to the chamber. We'll have one each quickly, Mr. McTeague and Mr. Ianno.

[Translation]

Mrs. Tremblay: I have both a request and a question. I will start with the request. Could you possibly consider taking a closer look at community television networks when it comes to advertising? There are some markets where community television networks really need funding.

In Quebec, for example, the government is prepared to give them advertising. But in cases where we're talking about 2,000 people and they have 2,003 subscribers, obviously that kind of situation can no longer be tolerated. So, would you consider taking a closer look at community television networks that need money?

Mr. Spicer: Mrs. Tremblay, I undertake today to give you an answer as quickly as I possibly can, in the months to come. That's an excellent question.

Mrs. Tremblay: Moving on now to my question, you will be handing a fairly important decision on the 18th in response to a request made to you by Messrs. Manley and Dupuy. I'm not asking you what your answer is going to be; I am patient enough to be able to wait for it. However, I would like you to explain both the genesis and the purpose of the process you're currently engaged in. Do you intend to provide the committee with your decision regarding Messrs. Manley and Dupuy's request or do you intend to make it public and available to everyone?

.1055

Mr. Spicer: To be precise, Mrs. Tremblay, I believe it will be made public on Friday the 19th. We will be holding a press conference at 12:30 p.m. to present our report to the general public. If I could make a suggestion - and I don't know whether you will have time or not - perhaps if we are able to get through all your questions on direct broadcast satellites on June 6, we could spend some time talking about it then. In any case, I would be delighted to come back before the committee to discuss the report.

[English]

Mr. McTeague: Thank you again, Mr. Chairman.

[Translation]

Mrs. Tremblay: You were going to do that on the issue of convergence.

Mr. Spicer: Yes, that's correct.

[English]

Mr. McTeague: Thank you, Mr. Chairman.

Mr. Spicer, I want to bring us back to 1993. I want to deal with a current reality in Canada before we express the problems down the road, and deal with the question of the cable companies coming before your hearings and proposing to you a Canadian programming fund, as they did in 1993, which of course you accepted. I want to know if you can tell this committee how the cable companies are spending their $300 million, in the case of Madam Tremblay suggesting it was $500 million. How are the cable companies spending that money, since of course it was their proposal to continue that funding?

My other question deals with whether or not since March 30, since we first brought these issues forward to the CRTC and to the Canadian public, you have sought firm legal opinion.

Mr. Spicer: On the second issue, no, apart from talking to our own legal department - and they're as firm as lawyers as any I can think of.

To go back to the first part, we did not try to micro-manage the use of this money by the cable companies. At a certain point we count on common sense and market forces to push the cable companies to do the only thing that makes any sense. They know we are organizing competition from satellites, telephone, microwave, DBS, Internet and cellular vision. They know this. They know that's the future. They're not crazy. They know they're going to be under tremendous assault. They are not going to spend this by buying ten more condos in Florida. They're going to put it into their system to fight these guys off.

Mr. McTeague: But Mr. Spicer, they've had from 1993 to 1986, going backwards, to be able to take from every subscriber in this country an average of $250. They've had a long time and a lot of money, which they didn't have to go on the free market for, to collect.

Do you have any idea how the cable companies, knowing that you've given them the opportunity to build their infrastructure free, at the expense of cable subscribers, are now spending that money, that $300 million to $500 million?

Mr. Spicer: Let's go back to the fundamentals. I think we agree that the money for the Canadian broadcasting system never comes from Santa Claus. It always comes from the subscribers, so it is not a crime that we allow the subscribers to continue doing what only they can do.

As for the use of these funds, we are told, sometimes by the same person on the same day, to stop regulating and to regulate more. If you want to have us micro-manage the use of these funds by companies, I guess we'd become a really intrusive regulator. We are told repeatedly we have to be leaner and streamline and regulate less. So it's very tough to reconcile.

Mr. McTeague: Mr. Spicer, in 1986 and again in 1991 you promised subscribers you would give that money back. You haven't done that.

Mr. Spicer: That is true. However, circumstances do change. We can either pretend they didn't change at all, or we can say look, now there's a new threat to Canadian culture. It's the satellites, the so-called deathstars, although we've stopped using that silly phrase.

At that time nobody had heard the expression digital video compression or the interactive black box. Those things did not exist. Should we have said, because we said that's where the money was going, that we could not possibly serve the public any other way? What we did, through a public hearing, was to ventilate a new idea adapted to radically new circumstances, explain to the public why we thought this was necessary, and then agree to it publicly and sell it. Then for two years nobody thought this was outrageous at all.

Mr. McTeague: Where was the public opinion to support those things?

The Chair: I'm afraid I'm going to have to intervene. I'm very sorry Mr. Ianno didn't get the last question. He will be greatly favoured on June 6. You won't hear anything but Ianno.

Thank you for coming. The meeting is adjourned.

;