HERI Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 1st SESSION

Standing Committee on Canadian Heritage

COMMITTEE EVIDENCE

CONTENTS

Thursday, January 31, 2002

[

0910

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.))

Dr. Gerry Turcotte (President, Communications Research Centre Canada)

Dr. Metin Akgun (Vice President, Broadcast Technology Research, Communications Research Centre Canada)

0915

0920

0925

The Chair

Ms. Betty Hinton (Kamloops, Thompson and Highland Valleys, CA)

Dr. Metin Akgun

Mrs. Hinton

Dr. Metin Akgun

Mrs. Hinton

The Chair

Ms. Christiane Gagnon (Québec, BQ)

0930

Dr. Metin Akgun

The Chair

Mrs. Christiane Gagnon

Dr. Metin Akgun

The Chair

Mr. Gérald Chouinard (Program Manager, Rural and Remote Broadband Access, Communications Research Centre Canada)

0935

The Chair

Ms. Wendy Lill (Dartmouth, NDP)

Dr. Metin Akgun

0940

Dr. Gerry Turcotte

Ms. Wendy Lill

Dr. Gerry Turcotte

Ms. Lill

Dr. Gerry Turcotte

The Chair

Mr. Macklin

Dr. Gerry Turcotte

The Chair

Mr. Gérald Chouinard

0945

Dr. Metin Akgun

Mr. Macklin

Dr. Metin Akgun

The Chair

Mr. Claude Duplain (Portneuf, Lib.)

Dr. Metin Akgun

Mr. Claude Duplain

Dr. Gerry Turcotte

0950

Mr. Claude Duplain

Dr. Gerry Turcotte

Mr. Claude Duplain

Gérald Chouinard

0955

The Chair

Mr. Grant McNally (Dewdney--Alouette, PC/DR)

Dr. Gerry Turcotte

1000

The Chair

Mr. Grant McNally

Mr. Gérald Chouinard

1005

The Chair

Mr. Roger Gallaway (Sarnia--Lambton, Lib.)

Dr. Metin Akgun

Dr. Gerry Turcotte

Dr. Metin Akgun

Ms. Betty Hinton

1010

Dr. Metin Akgun

Dr. Gerry Turcotte

The Chair

Dr. Gerry Turcotte

The Chair

Ms. Christiane Gagnon

1015

A voice

Dr. Metin Akgun

The Chair

Dr. Metin Akgun

1020

The Chair

Mr. Duff Roman (President, Digital Radio Roll-Out Inc.)

1025

The Chair

Ms. Betty Hinton

1030

Mr. Duff Roman

Ms. Betty Hinton

Mr. Duff Roman

1035

Mr. David Garforth (Executive Director, Digital Radio Roll-Out Inc.)

Ms. Betty Hinton

Mr. Ray Carnovale (Secretary, Digital Radio Roll-Out Inc.)

Ms. Betty Hinton

The Chair

Ms. Christiane Gagnon

Mr. Duff Roman

1040

The Chair

Ms. Christiane Gagnon

Mr. Duff Roman

1045

The Chair

Ms. Wendy Lill

Mr. Duff Roman

Mr. Ray Carnovale

1050

Mr. Macklin

Mr. Duff Roman

Mr. Macklin

Mr. Duff Roman

1055

Mr. Macklin

Mr. Duff Roman

The Chair

Mr. Claude Duplain

Mr. Duff Roman

1100

Mr. Ray Carnovale

The Chair

Mr. Grant McNally

Mr. Duff Roman

The Chair

1105

Mr. Duff Roman

The Chair

Mr. Duff Roman

Mr. McNally

The Chair

Mr. Duff Roman

The Chair

Mr. Duff Roman

The Chair

Mr. Jay Thomson

The Chair

Mr. Jay Thomson

The Chair

Ms. Betty Hinton

Mr. Jay Thomson

Ms. Betty Hinton

Mr. Jay Thomson

Mrs. Hinton

The Chair

Ms. Christiane Gagnon

Mr. Jay Thomson

The Chair

Mr. John Harvard (Charleswood St. James--Assiniboia, Lib.)

Mr. Jay Thomson

Mr. John Harvard

Mr. Jay Thomson

Mr. John Harvard

Mr. Jay Thomson

Mr. John Harvard

Mr. Jay Thomson

Mr. John Harvard

The Chair

Mr. Bagnell

Mr. Jay Thomson

Mr. Bagnell

Mr. Jay Thomson

Mr. Bagnell

The Chair

Mr. Grant McNally

Mr. Jay Thomson

The Chair

Mr. Macklin

Mr. Jay Thomson

The Chair

Mr. Macklin

Mr. Jay Thomson

The Chair

Mr. Macklin

Mr. Jay Thomson

The Chair

Mr. Jay Thomson

The Chair

CANADA

Standing Committee on Canadian Heritage

NUMBER 035

1st SESSION

37th PARLIAMENT

COMMITTEE EVIDENCE

Thursday, January 31, 2002

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

The Chair (Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)): I would mention to members that there are a couple of items of business we would like to tackle at the end of the meeting. So after the hearings, please be kind enough to stay for 10 minutes, so that we can complete these things. I don't think they will take that much time. If we could just have your cooperation in staying for a little while after the hearings, I would appreciate it very much.

We are pleased to welcome, from the Communications Research Centre Canada, Dr. Gerry Turcotte, the president; Dr. Metin Akgun, the vice-president of broadcast technology research; and

[Translation]

[English]

So, Dr. Turcotte, I turn the meeting over to you. You know the format. The longer your presentation, the less chance for the members to ask questions, and this is really the idea, that members ask you questions. So please keep your subject reasonably brief, so that we can have a chance to ask you questions at the end.

The floor is yours.

Dr. Gerry Turcotte (President, Communications Research Centre Canada): Thank you, Mr. Chairman, and we'll certainly do that.

First, it's a pleasure to be here. It's also my pleasure to lead the only group in North America that has a broadcast research group, and you should know that it's an agency of Industry Canada. We have provided for those who are interested an annual report that you can have later to peruse. We're meeting you in the context of other meetings you've had; I just want to place that in context. You've already talked to the Industry Canada group, the policy group downtown, and that's on our second slide.

What we're going to try to do is very quickly cover some of the technology issues without getting too technical with you, so you can get the drift of where it's going. We will be followed by DRRI, which is looking at the roll-out of some of these technologies. So I think you'll be able to really understand some of the trends and some of the issues, and therefore be able to ask questions.

So I'd like to now turn it over to Dr. Metin Akgun, who will take you through our presentation.

Dr. Metin Akgun (Vice President, Broadcast Technology Research, Communications Research Centre Canada): Thank you, Gerry.

We have to cover all of broadcasting, which is radio and television. On the third slide you will see that I marked some of them red, because in the area of broadcasting it's the terrestrial broadcasting that is most important, although there are channels on cable and satellite as well. In television it's all of the three systems that will be important. We'll briefly discuss those.

The new technologies that are impacting broadcasting basically involve digital technology, which compromises sound, video, and the transmission aspect. In addition, for radio we have a new broadcast band in the L-band. but this was chosen for other reasons.

What the digital technologies do is provide higher-quality sound and video. As we will discuss a little bit later, it also provides additional programming services capability. You can use the channels much more flexibly, and the quality in the entire [Inaudible—Editor] of the broadcasting is consistent, not changing to low when you are away. Also, digital technology allows you to have this convergence between computer, telecom, and other services. Most importantly, because of the flexible use of the capacity of the channel, you can provide new media or multimedia types of services.

I'm going to start with digital broadcasting, although I said I would discuss the deployment of DAB. I will leave this to DRRI because it would be repetitive.

The new digital audio broadcasting, also sometimes referred to as to digital radio broadcasting, is replacing the AM and FM broadcasting. Eventually it will provide CD-quality sound. It was particularly designed to provide mobile receivers in cars without undesirable fading types of effects.

Technically, up to about five broadcasters can use the same transmitter, although in terms of their programming they will be totally independent of each other. So technically it's better to do it this way. We have about 20% to 30% capacity that can be used for non-programming applications like multimedia.

The system that has been adopted in Canada is based on an International Telecommunications Union standard that has been adopted in Europe and some other countries. On the other hand, the U.S. will use another standard.

With multimedia applications the nature of broadcasting provides you the means to broadcast from one point to everybody, so it's a very efficient means to provide the service to many users. We have about 300 kilobytes per second per transmitter, which is fairly good broadband capability. The interaction will be provided by existing and future telecom services, wired or wireless. We have examples where we have shown that this is quite feasible.

I'll give you some examples of interesting features, and there are many more. One is traffic information and Internet access, which are crossable. And, for example, police forces have shown interest because the broader band allows them to get more information in their work.

On the ninth slide I have an image that shows an example of how this can work. On the lower left side I have the part that can be wired or wireless, which is the service provider. There's a telephone switch, and the caller can access, for example through their PCS cellular phone, and ask for whatever service he or she wants. Then the digital radio broadcast transmitter will provide that service to the caller. So it's a combination of service providers with broadcasters and telecom service with broadcasters. So it is a merger of different technologies.

¿ (0915)

I'll now go quickly to digital broadcasting. We have the same issue here. Again, it is a replacement for NTSC broadcasts. NTSC is the current analogue service we have. It will use the existing VHF and UHF bands, so it does not need additional spectrum. In fact, it will coexist with the analogue service until the analogue service is turned off sometime in the future, and it can essentially be done with less spectrum. It will have high-quality surround sound, and there will be 35 mm-quality images that will recall high-definition TV, HDTV.

To give you an example, in the 6 MHz--which is the current channel capacity where we get one program--it has 20 megabits, and for cable it even has 40 megabit capability. On the transponders of satellites, it's also 40 megabits. This is a huge bandwidth and broadband capability.

We can use it very flexibly. My next slide shows, for example, that I can use under 20 megabits for one HDTV, for more standard definition [Inaudible—Editor] and I can also use standard definition in any multimedia. There's a huge flexibility, and obviously when you get 40 megabits you have even more flexibility, and the same applies for satellites.

It uses an international standard, and it is a standard that was developed jointly between Canada and the U.S. by the Advanced Television Systems Committee. Obviously the U.S. is using the same standard, but there are two other standards in the world, the European and the Japanese standards, which are slightly different, and they are being used in Europe and some other countries.

Again, as I said, there is a flexibility as to what we can use the channel capacity for in addition to programming service, and here I have given some examples, and an example can be doubled or tripled. It's up to the market and user as to what they want to have. Some of them are program-related--for example, an electronic program guide or game and talk show participation, where people can say what they prefer or not instead of just the audience who is in the studio. For example, we can provide multi-camera sport viewing so people can say what part they want to see.

Then there are other things that are not program-related, like video games and video on demand. They can ask for things--additional travel information, even electronic newspapers. So it goes on and on, and the capacity is quite adequate for doing this.

Where do we stand in terms of deploying digital television? The standard was adopted by the FCC in the U.S. in 1996 and by Industry Canada in Canada in 1997. I will now talk about where it stands in terms of terrestrial transmission, cable and satellite.

In the U.S. they have already implemented it, and there are over 200 stations operating, obviously in the larger population centres, and it covers about 70% of the population now. In Canada the broadcasters formed Canadian Digital Television Inc., a not-for-profit organization to support and help the industry to implement digital television. The CRCC works very closely with them, as we do also with DRRI.

The first experimental transmitter is currently operating in Manotick, close to Ottawa, and was done in 1999, and it is to understand technology. The CRCC does most of the technical work on behalf of the industry, but also to benefit our own department's spectrum regulation matters. A second transmitter is now available in Toronto, basically for trying multimedia services, and a third experimental transmitter is expected this year in Montreal.

CRTC asked last fall for comments on how the licensing should be done, and we expect that this spring they will come up with some rules. Therefore, we expect that the first commercial digital television may become available in 2003.

¿ (0920)

Cable television has also gone digital. All the new specialty channels, which were introduced in the fall of 2001, are digital. It does require a new digital set or converter, which is available. The nice thing is that all cable systems, Canadian and U.S., agreed on a single standard, which they call the open cable concept. You can take the converter and go from one place to another and it will work, which is obviously highly desirable for consumer equipment. They all have multimedia capability. Some services are now emerging, and probably we will see more of them in the future.

As you know, we have two satellite service providers: Bell ExpressVu and Star Choice. They are both fully digital, because that's the only way to provide it economically. Unfortunately, the systems use slightly different technology, so they're not compatible. It's a consumer choice. They both provide outputs that are compatible with present television sets, but also with digital television sets, of which quite a large number were sold just before Christmas in Canada. They all provide an interactive multimedia service interface.

Talking about multimedia, there are some technologies that need to be resolved. Obviously one is the return channel. Broadcasting systems as we know them today don't have a channel from the user to the service provider. But as I said before--and these are standards that are now appearing--they can use wireless and wired communications systems. The International Telecommunications Union has recommendations on what the standards are and new ones that are appearing. Therefore, it is not a matter of not being able to have interaction.

The other issue that is also important is the content and how it is technically formatted so that it can be exchanged worldwide, which benefits both the user and the service providers who provide the content.

In North America, the ATSC, Advanced Television Systems Committee, has developed standards. In Europe, the Digital Video Broadcasting Group and also the European Telecommunications Standards Institute have some standards. In Japan, the Association for Radio Industry and Business, or ARIB, also has standards. On the other hand, what the radio communications and telecommunications sectors of the International Telecommunications Union are doing is trying to provide commonality between the different standards so that everyone can easily exchange.

To summarize, all our broadcasting systems in Canada are converting to digital technology. In fact, these services are now available. Consumer equipment is available. Cost is coming down very rapidly. It can provide and is starting to provide interactive multimedia services.

The other thing to note is that there was another task force that looked at broadband. Certainly broadcasting systems have significant broadband, and we expect them to play an important role in the roll-out of broadband service or availability to the Canadian population. As I said before, because of the one-too-many capability, it's very efficient and economic to provide services to users.

Thank you very much. We are here to answer any questions you may have.

¿ (0925)

The Chair: Thank you for your really interesting presentation. I think we all learned quite a lot from it. It was most interesting.

Mrs. Hinton.

Ms. Betty Hinton (Kamloops, Thompson and Highland Valleys, CA): Good morning. Thank you very much for your presentation. I agree it was very interesting.

Could you just answer a question for me? You said the European standard is different. My understanding is that it's superior. Is that accurate or inaccurate? Could you please tell us the differences?

Dr. Metin Akgun: You're right in asking the question, because it is still in hot debate. We've done a lot of testing ourselves in Canada of all the different systems. It depends on what is important to a broadcaster. You need somewhat more power in the transmitter to have the same coverage for the European system, less for the standards we adopted in Canada and the U.S. On the other hand, it has certain features that might be slightly superior for coverage in a downtown area, where you get a lot of the radio waves--

Ms. Betty Hinton: Interference.

Dr. Metin Akgun: Our conclusion is that we cannot say it is much superior. It is not. We have done enough tests, and we have presented the results. People do agree, it is a matter of choice. Sometimes the choice by a country of a particular system is not dictated by the technology's superiority, but maybe some other issues, its compatibility with the existing system, or economic factors.

What you can do better with the European system is mobile reception, but at a heavy price. The 20 megabits we are talking about may shrink to only 4, and then you cannot do anything with high-definition television, for example. And although the European system has this potential capability, so far they have really not used it.

Ms. Betty Hinton: Thank you.

The Chair: Okay.

Madame Gagnon.

[Translation]

Ms. Christiane Gagnon (Québec, BQ): I find the terminology a bit obscure. I would like to know what exactly having access to satellite direct-to-home broadcasting means for the consumer. Does it mean buying Bell ExpressVu and a dish? What exactly does it mean? The consumer who is not up on all these new technologies would like to understand. You say that cheaper access is possible.

For instance, if someone wants specialty channels and has cable, will it be available through cable or is anything else required? Consumers are paying more and more to have access to all these television specialty channels. The more that are added, the more expensive it becomes.

Will only the more well-heeled have access to all these interesting resources, but at a price?

¿ (0930)

[English]

Dr. Metin Akgun: This is a bit of a market issue, because with cable systems, for example, their basic technical infrastructure does not really have to be changed to provide a lot more channels. As I said, you could have only 40 megabits--that is, per 6-megahertz channel, maybe seven or eight programs. So if a system today has, say, a 70-channel capability, you multiply and then you get hundreds of channels.

Obviously there is a cost for the programming, and that has to be, I guess, recovered by the service provider, the cable companies. Today, with the analogue environment, it's just technically easier to provide blocks of channels, that is, tiers of services. So you may want to have one of the programs, but you may have to pay for the rest. Once we have it all digital, there should be the capability for me to pick and choose what I want, because you can encrypt those channels, and therefore you have the capability to decrypt certain channels and not others. Therefore, the cost doesn't have to go up in the future. But we are at the beginning of it, so cable still has to provide the analogue part, and the new services are just coming up.

As I said, it's also a matter of business. They have to pay for those programs, so they have to recover some of their cost.

The satellite is a bit different. There, essentially, you get the whole block of it, but even there you can choose certain parts.

The Chair: Ms. Gagnon.

[Translation]

Mrs. Christiane Gagnon: Digital service is being rolled out faster for radio than for television. In your opinion, how long might it be before it is available across the board? Might it be several years? We know that it is in the fairly early stages right now.

[English]

Dr. Metin Akgun: I think the digital radio part has already been started. As for how it will further be rolled out, I guess DRRI will have a better view because they are running the business.

In television, in the U.S. there has been a deadline set for when they want to turn off analogue service. That is 2006. Everyone realizes it may not happen that fast, therefore I believe Congress has made additional rules that until 85% of the population has access, they cannot turn off the current service.

In Canada we don't have at the moment any rules, but broadcasters say they don't really need the rules because competitive conditions with the U.S. will force them to introduce digital, and it's going to happen.

On cable, it will take some time again before we can allow them to turn off all the analogue channels. You've been able to buy for many years so-called cable-ready sets that don't need converters or anything. If you want to continue to use an old set, you will need a new converter, so there will be additional costs.

For these reasons it may take some time. I cannot say how long it will take.

[Translation]

The Chair: Mr. Chouinard, if you wish to comment, please feel free to do so.

Mr. Gérald Chouinard (Program Manager, Rural and Remote Broadband Access, Communications Research Centre Canada): Thank you, Mr. Chair. I would like to answer the question on radio. DDRI is going to be able to present the roll-out schedule for radio in Canada.

The answer is that, yes, radio will probably be first; the roll-out is already under way. It all has to do with the cost of the receiver. Currently, receivers are fairly expensive, but there is always the issue of volume of production. Things have already gotten off to a speedy start in Europe. They have receivers which cost less to manufacture. Once receivers are affordable by the general public, it will be rolled out.

Digital radio offers better sound quality, and more services, as mentioned in the presentation. To a certain extent, therefore, radio is further advanced. In the end, it will be up to the market.

Thank you.

¿ (0935)

[English]

The Chair: Ms. Lill.

Ms. Wendy Lill (Dartmouth, NDP): Thank you very much for coming before us. I was reading your brief last night and thinking it would be very fascinating to work in your field right now.

What we're doing here is trying to understand what a broadcasting environment is going to look like three, four or ten years from now. We heard the other day that things are moving so quickly that we have to be very imaginative and challenge our own concepts right now. We heard such things as the fact that right now in Japan there is something called the DoCoMo, which is a telephone-cell phone capability, for people to have their entire broadcasting capabilities within their hand.

Knowing that, but really knowing very little, I guess I want to ask you to help us look ahead. Bearing in mind the Broadcasting Act, which says that the system comprises public, private and community elements and makes use of radio frequencies that are public property, and provides through them programming, a public service, I keep coming back to “radio frequencies that are public property”. I have to say that I'm not sure what that's going to mean in the future and I'd like your views on that. I'd like you to help us to try to move this document--which was done in 1991--ahead a bit, just from your own technological perspective.

I'm interested in knowing one specific thing. I think you've answered some questions about when we're going to see the transition to digital in terms of timelines. It depends on a bunch of things, but I'd like to know what will be made obsolete with the transition to digital.

In terms of the Internet, I have a question about the fact that the CRTC did not regulate the Internet because it doesn't broadcast with alphanumeric characters. I'd like to know whether that is in fact the case today and whether it will be the case five years from now, and whether the regulation that they just made will also become obsolete shortly in terms of the arguments they've made.

Dr. Metin Akgun: In the digital radio broadcasting case, they have not, to my knowledge, regulated what the broadcaster can do with the 20% in terms of content and so on. So they left it free. With respect to the Internet, so much information is there, and all kinds of information, that it can be accessed just as well through the broadcasting system. This information is available worldwide. It will be very difficult to make regulations as to what they should be providing.

For us on the programming side, it has a cultural component to it. Therefore, that may continue to be a concern and should be a concern. The other information, some of it strictly technical information...by technical I mean, for example, if you want to market the information, it's not really a cultural thing. It's information which you can access. Or if you are in an area where you want to traffic services, and you can go from one place to another where people can provide this, there should be flexibility.

¿ (0940)

Dr. Gerry Turcotte: I think the major thing you're seeing with the Internet is a change in the people who generate material and go on it. Broadcasting used to be a one-to-many as a provider, and we passively tuned in and received it. The Internet itself is a much more interactive medium, where people in their own time go and access what they want when they want, and they also generate what they want and put it up for other people to get. You can't regulate the Internet, in my view, because you've got everybody involved doing what they want. It's a totally different issue.

It would be interesting to ask DRRI what they see happening with the broadcasters as you go forward. There are many, many brilliant people in the world trying to solve that problem before it occurs and I don't think we understand it all. But I can tell you one thing, you're not going to stop it. You won't stop it because the market factors are driving you there regardless. People want this stuff.

Ms. Wendy Lill: Are you saying the content on the Internet cannot be regulated?

Dr. Gerry Turcotte: No.

Ms. Wendy Lill: In that case, what about child pornography and other criminal operations? Can the content going through Canadian-based Internet services be regulated?

Dr. Gerry Turcotte: There's no question that if you can use major nodes on the Internet to identify who's providing some of this stuff, it can be done, or legal action can be started. We know this today. The problem is that you can move many of these sites. It's very hard, as you're aware, to know where they're actually coming from and it becomes a very difficult issue to control. You can still prosecute, which we're doing in this country right now.

I happen to be very concerned about this, but I believe the only solution is to make people mature enough to know that they shouldn't make those choices. Now, that's probably not solvable either, but I don't believe, as you go forward, that you're going to solve this.

As a matter of fact, I ask people, “Have you been down to your corner store lately to see what's on the shelves?” There is stuff I personally find totally objectionable at your corner store. I would not read it. I would not have it in my house, and yet it's considered to be standard fare. And people think I'm out to lunch for even saying this, but the only views I can control are my own, and I think that's where we're heading. People have to make their own choices.

The Chair: Mr. Macklin is next and then Monsieur Duplain.

Mr. Macklin.

Mr. Paul Harold Macklin (Northumberland, Lib.): Thank you.

It's a fascinating area indeed for all of us as we look at what is being opened up to us. The usual questions will arise. Some of my questions may be better asked of the roll-out group.

First of all, what criteria do you think will be used, other than just a date on a calendar, to determine when we're going to turn off the analogue system?

Dr. Gerry Turcotte: As Dr. Akgun has said, they're going to put an economic test on it in the States to see when a percentage of the population is reached in certain cases. I think the broadcasters will be putting pressure on to prevent some of their money going into an area nobody's using. So I think it's a dynamic.

The big thing will be the availability of receivers at a price people will pay. You have already had the early adopters pick up much of it. That was the early market. We were just talking before--and they can elaborate--about how in England they've just had a sale of 200 receivers at £99, I think they said, and they had waiting lines for them--they went very quickly.

A market is evolving. We see this in all of our technologies. We know for a fact that electronics continues to drive the price point down on anything we build. When it starts to have any volume at all, the price drops. When it drops to the point where people buy it because they want it, the thing takes off. It's an exponential function, as you're aware, and we're not exactly sure where we are in the curve. That would be my reading.

The Chair: Mr. Chouinard.

Mr. Gérald Chouinard: Thank you.

I think there are some previous examples of this. In the United Kingdom in the 1980s, they shut down the 405-line television system, which dated back before the 1960s when the 625-line system, the PAL system, was standardized and started to be used. Colour, the PAL system, was standardized in the 1960s, but it took at least 20 or 25 years before they could shut down an old system that was black and white, actually an earlier one than the black and white 625-line.

So normally it takes a while. However, if we consider the exponential function in terms of maturing of technologies and the public accepting new technologies, this figure of 25 years may shrink. It's still open, but there are some examples in the past of broadcast technology being shut down at a certain point.

Thank you.

¿ (0945)

Dr. Metin Akgun: The question also came up of how to free up the spectrum. Maybe they should subsidize a central convergence of people who cannot afford to buy a new digital set, so they can continue to use the old set.

This hasn't happened. Therefore, the expectation is that the take-up of digital will be faster in the large centres, and in the smaller markets it will take longer. But then again, in the smaller market that has a smaller, less dense population, the spectrum may not be as important an issue as in the larger areas. I think that's the 85% rule that they came up with. Once 85% of people have access, well, maybe that's the time to turn it off.

Mr. Paul Harold Macklin: With respect to programming that we've seen to date on radio, basically you have a set and you receive the programming. There is no cost relationship, unlike in Europe where you pay a licensing fee or something for a particular unit. Are we looking at the future showing us that there may be a cost of programming allocated to the users of digital radio?

Dr. Metin Akgun: I can take an example from the U.S. With their digital television, if they don't provide high definition, which occupies the whole channel, and they provide several programs, they have to provide one free of charge, as it is today. The others may be paid for.

At the moment, there is what they call a simulcast situation. The program is the same in analogue as it is in digital, with some exceptions, and over time they will change. But clearly, because the spectrum is probably good and they are required to provide one over-the-air service free, the others may be charged for. I say "may be", because I don't know what the rules are right now.

[Translation]

The Chair: Mr. Chouinard, we have still have ten minutes. Go ahead.

[English]

With respect to radio, the technology will allow free over-the-air, as we know it now, and it could also bring the possibility of pay radio, if need be. But basically the approach, at least--and DRRI could add to it--is that it's free over the air, as we've known it for many decades now.

[Translation]

The Chair: Mr. Duplain.

Mr. Claude Duplain (Portneuf, Lib.): I have a question which is perhaps a bit simpler. In your report, you talk about partnerships with the industry. How far will those partnerships go?

[English]

Dr. Metin Akgun: In what sense are we talking partnerships here? Do you mean the work we conduct, as the Communications Research Centre, with the industry?

[Translation]

Mr. Claude Duplain: I do not have the exact words used in your annual report. It mentions partnerships with the industry. That is what I would like you to explain. How far will those partnerships go?

[English]

Dr. Gerry Turcotte: The types of partnership we have range from industry actually purchasing some of our intellectual property...and we have an office that sells this and strikes a variety of commercial arrangements with companies.

The second type is where a commercial interest wants us to do some activities specifically for them, and we write a contract to do that. We have rules for doing that, that recognize the laws of the land.

The third way is where we have a joint activity that we want to pursue for common purpose, and the DRRI follows that. We have a broadcasting research group, they have the commercial interests, and we have worked together to try to advance the particular objectives that we jointly hold.

We also work cooperatively with universities under the same thing, or maybe we even have companies, universities, the NRC, and ourselves in other activities. So it's really dependent on the end objective we want to achieve.

In CRCC's case, about 10% of our activity would fall under that rubric. The rest of our activity is either directed at the department itself or at some of our major clients, such as the Canadian Space Agency or Defence. In Defence, we do 25% of our activity with them.

So a variety of vehicles are used to do this, and we're not just commercially out there selling our wares, but we do cooperatively work with a number of folks to achieve our common goals.

¿ (0950)

[Translation]

Mr. Claude Duplain: It says in your report: “The challenge: going through this cycle, which led to departures of research staff during the euphoric business stage”. Would you elaborate on the departures of research staff?

[English]

Dr. Gerry Turcotte: Over the last two years, when there was an enormous increase in demand for researchers in the industry in which we're housed, the salaries offered on the outside escalated dramatically and did cause an awful loss of internal capacity. As you're well aware, the external industry has had to pause for breath, and there are people now available. That will reset itself, in fact it is now doing so, and you'll go back to a more reasonable demand. I've been around for many years in this industry, and it's cyclic. We're now back on the upswing, but I don't think it will become as overheated as it was. It was a little excessive.

[Translation]

Mr. Claude Duplain: I come back to what was mentioned earlier. Is there something incompatible about the regulatory environment we are trying to create and the current evolution of the technology, with the research you are doing and all the possibilities today? This week, we heard about small radio sets on which we would be able to watch television or communicate with others. Today, my son is playing in the Major Junior Hockey League and I can listen to the game anywhere in the province on the Internet. I can listen to radio broadcasts from Africa; the Internet services are open. Efforts are being made to regulate in order to get programming. I have the impression that it is soon going to be possible to broadcast television over the Internet. How will this development work with the current regulations? What will be the connection? The regulations are being rewritten. Will they will be completely outmoded in five years, and we are wasting our time?

Gérald Chouinard: Thank you. That is a very interesting question. It is somewhat related to what Ms. Lill asked earlier. I think it is necessary to step back a bit and return to the basic concept. What the Internet has somewhat lost sight of is the intrinsic value of a program. Radio broadcasters have always had great respect for the intrinsic value of a program. I am talking about the intellectual property of a program. They have always rendered what is Caesar's unto Caesar.

Things are much more relaxed, much more liberal, on the Internet. We saw some extremes in the case of Napster, where intellectual property was completely ignored. We saw Napster grow like a mushroom: there was tremendous Internet traffic. And the reason for this was that intellectual property was ignored. It was total freedom.

Considerable research and development is going on with respect to the technology. I am coming back to the technological aspect. In the 1980s and the 1990s, in the last two decades, there has been a lot of research and development with respect to the digitalization of information. We have now attained a level of maturity allowing us to have hundreds of television stations via satellite, cable, etc.

Now, there is a lot of work being done in the industry that was not being done before, particularly with respect to scrambling, encrypting information in order to preserve the intrinsic value of the commodity information represents. For example, take the film associations in Hollywood. Take the RIAA, the Recording Industry Association of America. Much work is being done to try to control the distribution of information, which is material that has a value.

I think that the regulations should take into account the fact that, in future, in addition to the explosion in the number of channels that it has made possible, technology will also make it possible, if there is a desire to do so, to respect the intrinsic value of a program.

When one respects the intrinsic value of a program, the economic model is much more point-to-multipoint, with respect to the cost of a film, for instance, than point-to-point, as in the case of Napster.

The models are different at this level. The regulations can take this into account, and there will be technical ways, now and in the future, to put this in place. Thank you.

¿ (0955)

[English]

The Chair: Mr. McNally.

Mr. Grant McNally (Dewdney--Alouette, PC/DR): Thank you, Mr. Chair.

I'd like to follow-up on what Ms. Lill and Mr. Duplain were talking about, trying to look into the future. I know it's hard to do, and technologies come up. In fact, we're dealing with a bill in the House later today having to do with rebroadcasting on the Internet, to fix a loophole that wasn't foreseen back in 1991 with the Copyright Act, which you were somewhat alluding to.

I guess there's not a specific answer, but are there things we should be thinking about in respect of legislative framework and regulations in order to be able to catch future technologies? I know it's a part of your job, even as you're developing these technologies, to be looking ahead to what's coming next, and sometimes even what's coming is a transitional technology. In the early 1980s there were video discs that looked like records; they weren't around long, but I imagine they were a transition to CDs.

From your perspective, what do you see that we might need to think about when developing a report that will then be turned into legislation, in order to be aware of what's happening now, but be able to look into technologies that may come in the future?

Dr. Gerry Turcotte: I think the question is an excellent one. It's a very involved one, as you're well aware. What I would recommend we do is actually think about it with colleagues downtown on the regulatory side, the policy side, and come back with a suggestion to you. Because nobody has all the answers in this. There are so many forces, economic and other, loose in the land that I think this is one where we can't just give you an off-the-cuff answer. We're basically on the technology side of the business. We work closely with the policy people downtown. Obviously we're here because of our technology activity.

But I do think that's an excellent question. A number of you alluded to it. I don't think there are any easy answers. We should really study it more. That would be my response.

À (1000)

[Translation]

The Chair: Mr. Chouinard, if you would allow me just a minute, please.

[English]

We've got two other groups to be heard. I know we started late. We've got two or three people who want to ask questions. It's a really important subject. So if you'll agree, we'll keep this going for another quarter of an hour. If we can be disciplined and concise in our questions, maybe we can leave it for another quarter of an hour. We want to give a chance to the other witnesses to be heard. So let's do it that way. Hopefully, both sides will be concise with their questions and answers. We can then just cope with all the questions.

Mr. McNally, have you got any other questions?

Mr. Grant McNally: I have one, actually. I think you wanted to respond to the first one too. Let me finish my second question, and you can add on to that first one. That is, do you foresee digital broadcasting perhaps falling into the same domain as the Internet in respect of regulation?

When the Internet began, it was very easy to regulate, because the technologies weren't there. I remember taking a course on-line in 1989. It was all tech space and very complicated and cumbersome, and no graphics at all. Now look where we are today. Do you foresee down the road, 10 years, 12 years, 15 years, that we might be in the same situation with digital broadcasting, with an inability to regulate?

Mr. Gérald Chouinard: It's not an easy one. Let me perhaps give you some basis from an engineer's point of view.

I think we on the technology side need to be humble, in the sense that our goal with the technology is to make it transparent to the operators, transparent to the users. The ultimate goal would be that the technology not distract or distort the normal behaviour of humans, of users. This means that a program producer who has invested millions of dollars in producing something, a film, will have to find a way to have the program distributed and earn back money from it, by whatever means, including Internet broadcasting. The user at home is likely to want to be entertained, and also to interact with others, interact with the database, and so on.

So for those who say that everything will be Internet-like, bi-directional, is that normal human behaviour, when you sit back at home after work and you want to relax? Not necessarily. Do you only do that? Not at all. You want to interact as well. So a basic principle is that you can read into it some development in regard to regulations, but the human behaviour would be as it should be, as if the technology were totally transparent. You want to be entertained, the producer wants to be paid for his effort, for his program, you want to interact, you want to buy things on-line, and so on.

The future of technology or communication systems will include all these aspects, whether it be broadcasting or Internet. It's going to be an amalgamation. The regulations will have to consider all these options. Saying that you can't regulate at all or you have to regulate all, I think these are too extreme. It's going to be, it should be, related to human behaviour more than the technology. We will try. We'll try our best to make it transparent to you.

Thank you.

À (1005)

The Chair: We'll now move on to Mr. Gallaway.

Mr. Roger Gallaway (Sarnia--Lambton, Lib.): I'll be very quick, Mr. Chair.

In or about 1995 the then chair of the CRTC, Keith Spicer, was travelling the country and in concert with a number of industry associations was saying that we would have DTV by the start of the year 2000, that everybody would have it. There was a lot of talk of it. It was a commitment by certain groups that this would in fact be the case, yet that didn't occur. Why that didn't occur I'm not quite certain, and I'm assuming part of it is technical and part of it is market-driven.

You've talked about American conversion to DTV about the year 2006. It's a much larger marketplace there, and Madam Gagnon has raised the issue of costs. In this country, where broadcasting is very regulated and the marketplace is small, where's the nexus in terms of technological advancement and what people want and what people can afford to pay? Is that going to mix into this, and in your opinion is that going to slow it down?

Dr. Metin Akgun: By having adopted technologies that will benefit from large quantities, Canadians will not suffer a cost penalty in terms of, for instance, DAB. The Americans haven't chosen that, but Europeans and some other big countries have chosen it. Therefore, we will not have a cost penalty. In digital television it's the same thing. Yes, we have maybe only a 10% market compared to.... We have chosen a technology that will benefit from a big market, and in some sense the delay in Canada is usually about a couple of years in the digital television case, although in the U.S. it really is taking off right now. But in between there were technical problems where there were certain deficiencies. We are now working, and right now some corrections have been made. Someone has incurred the costs, but not the Canadian broadcaster, which is an advantage to us.

I think the Canadian market in the television case will be largely driven...you don't want to lose your audience to a better quality. When I say quality, I mean technical quality; the content is another issue. To the U.S.... Therefore, our Canadian broadcasters will make sure that we have the same technology, and we will benefit from the large market in terms of both production equipment as well as receivers. There shouldn't be any cost penalty or delay to us in Canada.

Dr. Gerry Turcotte: If I could say something, it's that we always overestimate the rate of initial take-up of technologies and underestimate the long-term take-up. We're a little overenthusiastic at the front end, we don't believe the back end, and the fact is that these things are going to evolve. We don't know the total answers, but they will, because people want them. It's a market decision.

Dr. Metin Akgun: The other thing is that when we started high-definition television, which was a driving force in the late 1980s, nobody thought that it was going to be digital. Therefore, it was a known technology, and from that you estimated that yes, you could have it by the end of the decade. Then some companies came, and we saw that digital was a lot better choice and could be done. But being a new technology for broadcasting, it took a bit longer, yet it has provided tremendous advantages. We're using the spectrum much better, and we're giving the broadcaster a lot more flexibility, so that's just give and take.

Ms. Betty Hinton: This is more a comment, and I'd like a confirmation.

I asked you earlier about the delivery system, and I asked you for a reason. The reason I asked was about interference. You're talking about larger cities. One of the problems with digital television is that it is easily interfered with via satellite. If there's snow or whatever, you lose your signal. So that was the reason behind asking that.

It also occurred to me that a lot of the discussion that's gone on today might be frightening to the Canadian public. We're talking about the HDTV system, high-definition television system, and we're talking about digital delivery. With a regular television, which is in the homes of most people today, if it's been purchased in the last 10 or 12 years, chances are it has 500 to 750 lines of resolution. When people buy their television, they don't even understand what that's all about, but it's about what it's capable of delivering, because it can only deliver what it can pick up.

The point I'm trying to make is that there may be a lot of people out there right now who are afraid that they're not going to be able to afford to participate in this new technology because they'll have to buy a new television. In fact, they won't have to. If you have 650 lines of resolution coming through your television.... Under the current cable, you're only picking up, what is it, about 200 or somewhere along there at this point in time?

People will not be forced to buy all new equipment in order to take advantage. I just wanted to make that point, because I thought it might frighten some people. If you disagree, I would love to hear from you.

À (1010)

Dr. Metin Akgun: No. The whole reason these set-top converters are there is to make sure your old equipment--and when I say old, I mean whatever its vintage is, so it can be newer--is not disabled from receiving the program. Those set-top converters do have digital output. Television has three primary colours. If you have that input, then you may benefit by a better picture. So it is not that the current generational things are totally disabled.

In radio, initially we expect.... For example, General Motors has announced that in their 2003 models they will have digital audio receivers. They also will have AM and FM, because the additional cost is very minimal. So there will be this transition where you will have all three of them: digital, AM, and FM. Eventually some of them will just be going to disuse, and then we'll turn them off.

Dr. Gerry Turcotte: Mr. Chair, we are going to run out of time, and I'm being cognizant of that.

Could I make an offer? As the only research centre doing broadcast research in North America, we'd be pleased to have the committee come out and visit us.

The Chair: You anticipated what I was going to ask you. You see, we have a problem in Parliament. If we have a visit during the day, during the hours that Parliament sits, we have to ask for permission to leave, obviously, because of debates, duties of parties, and so forth. So it's very complicated to do this.

What I was going to suggest and ask you is whether it would be possible to have a visit in the evening, after Parliament recesses. If that were possible, perhaps we could organize some sort of a sandwich supper or something like that. We could organize it with you and visit your centre. I think it would be really worthwhile. If it could be done in the evening, we can do it very quickly. We wouldn't have to worry about asking Parliament for permission for 10 or 15 parliamentarians to leave, which is a very complicated process.

Dr. Gerry Turcotte: If the clerk could work with my office, we'd be delighted to set that up.

The Chair: We'll do that. Okay.

[Translation]

Mrs. Gagnon, you may speak if you wish, but very briefly.

Ms. Christiane Gagnon: I do not know whether or not this falls within your mandate, but do you have any idea of the development prospects for Canadian or Quebec content for all these technologies on which you are working? Will this have an impact on the Canadian content broadcast by the new technologies? Are there, in your opinion, some contents which should receive more assistance than others in reaching a certain clientele, or does this not fall within your mandate?

À (1015)

[English]

A voice: It's not part of our mandate.

Dr. Metin Akgun: Can I answer this question?

What you have seen--what is happening, for example, in cable and other things--is there is more opportunity for creating programming content. Now, what content there should be is something I cannot answer. I don't think we can answer it here.

We provide the means, and what has happened, really, is that with new technology the system becomes more flexible. We use a given resource--in this case the spectrum--more efficiently, or if you want to preserve the same spectrum, we can put more things into it. This adds flexibility, and that will probably continue into the future. Technology is not stopping here; probably we'll get even more flexible.

As to what content goes onto it, users will, to some degree, indicate their preferences. Perhaps some regulation will say what the model should be and what kind of areas it shall cover, and whether it should be Canadian or non-Canadian. That is something the technology cannot say. We're providing the means to deliver it.

The Chair: We're almost finished with our time. I have a brief question I wanted to ask when I heard you say that in radio the new digital programming will have a separate standard in Canada from that in the United States; then in broadcasting we'll have a different system in Canada compared to Europe and Japan. I understand now even with DVD video, if you use a European disc it can't work in Canada or the United States. Isn't it a terrible pitfall, when you are starting a new technology, to do the same thing as we did in video, with PAL and a separate system in North America?

Isn't it the great tragedy of our age that we, in an age of multimedia and globalization, can't get together to agree on one standard? Is there anything we can do about it? It seems to me ludicrous that with the new media we would leave Canada in a car, for instance, and not be able to pick up a radio station in the United States because there's a different standard? What can we do about it?

Dr. Metin Akgun: Well, there are differences, let's say on the television side, between Europe, Japan, North America, and other countries in whatever they may choose; however, the difference is not entire. For example, the video and the sound are essentially done the same way. It is how you deliver them on the transmission side that is different. We unfortunately will continue to have this difference. The Europeans have an 8 megahertz channel; we have 6 megahertz. Changing it would be very difficult, because you have to coexist with an existing channel.

The other thing is that having multi-standard receivers is becoming less and less of an economic problem. Everything goes on a silicon chip. Those chips can do more things for less cost. Europeans have lived for a while with this issue. They have their PAL and have also had SECAM. In the corner of Switzerland near Germany and France, they have had to have both. Yes, they have paid a premium for it, but that has come down over time.

What has been agreed worldwide is a single standard for program exchange, not for the programming to the user. And that's a very important thing, because our program producers will now be able easily to sell their products worldwide.

As to what I receive locally, on the radio side, it would have been desirable.... Most of the world has selected the system we have chosen in Canada; for various reasons the U.S. has chosen another one. From a technical point of view, it's not as good, and therefore we have not chosen it. Gérald may be able to say more about what consequences this will have, but I was told Canadians generally wouldn't listen to U.S. radio broadcasters, whereas it's not the case in television; therefore, we virtually had to choose the same standard.

À (1020)

The Chair: Thank you very much for a really informative session. We really appreciate your coming.

Dr. Turcotte, our clerk will be in touch with you to set up a meeting in the evening. Thank you very much.

We now welcome Digital Radio Roll-Out Inc.: Mr. Duff Roman, the president; Mr. Ray Carnovale, the secretary; and Mr. David Garforth, le directeur exécutif. You're most welcome here.

You've watched the previous proceedings, so you know how the system works.

The floor is yours, Mr. Roman.

Mr. Duff Roman (President, Digital Radio Roll-Out Inc.): Good morning, Mr. Chairman and members. It is a pleasure to be here today to talk to the committee about digital audio broadcasting. The title of our presentation is “Radio Going Digital”, and I believe you have paper copies of our slides so we can all follow along with this.

With everything else going digital, our industry recognized as early as 1992 that to remain competitive it, too, had to go digital. With the support and encouragement of government, the public and private broadcasters worked together to secure the spectrum, select the technology and provide guidance to the government for the rules and regulations required. The cooperative approach adopted by Canada is recognized and admired worldwide. Canada is seen as a world leader in the transition to DAB, or digital audio broadcasting.

Digital radio technology will dramatically improve broadcast audio quality and reliability. But more than that, the new technology will enable the delivery of more than the traditional audio programming through enhanced program associated data and will facilitate the emergence of radio in the multimedia era with value-added, non-program-associated data services.

Program-associated data services, or PAD, can include the provision of song titles, artists' names, CD numbers, e-commerce opportunities to make the CD available by fulfillment or even direct download, and all of the everyday alphanumeric data pertaining to the station's on-air programming.

Non-program-associated data includes the possibilities of a number of specialized data services. These include, but are not limited to, electronic couponing, concierge services such as GM's On-Star, and full-fledged travel guidance systems.

Radio is vital to virtually all Canadians, and because of its importance to the everyday life of our communities, radio cannot allow itself to be marginalized. Radio cannot remain analogue. The overwhelming majority of radio listening in Canada is via commercial radio. Radio must evolve technically both to better serve the community and to compete for revenue in the marketplace against advancements by other media. By going digital, radio will deliver new and enhanced services. Digital will ensure radio's survival.

As they say, we have the technology. We also have the spectrum and a policy framework and digital audio broadcasting is a reality in Canada. DAB services are up and running in Vancouver, Windsor, Toronto and Montreal. Ottawa is in the planning stage and applications were filed for the national capital region with the CRTC last fall. Coverage maps for the four cities were included with the DRRI brief, probably somewhere with the clerk.

So where is DAB in Canada? Well, 10 million Canadians can now receive service through 57 licensed DAB stations. The national capital region, as I say, will be up and running in 2002, and we are planning for additional markets along strategic corridors. That planning is well advanced.

Regarding the extension of coverage, the corridor-by-corridor roll-out of seamless DAB services is pivotal to the Canadian radio broadcasters' plans. We are undertaking studies and are continuing our technical planning for the roll-out of digital radio in three corridors. Windsor through Toronto through the national capital region through Montreal to Quebec City is one corridor. Another is Edmonton via Red Deer to Calgary and back again. And a third would be Vancouver and the Lower Mainland into the Fraser Valley. The corridor strategy will also ensure that smaller markets in these corridors will be able to go digital as well.

D.E.M. Allan, consulting engineers, have been retained to conduct a comprehensive coverage planning study for each corridor. In fact, a progress report was presented to DRRI members at a meeting last week and the final report is due later this spring. The implementation will be very similar to the cellular telephone roll-out on a market-by-market basis with coverage extension as required. We're also developing new business plans for each of these projects.

À (1025)

With full-time DAB services now launched to ten million Canadians, we have turned our attention to a range of projects focused on raising the awareness of DAB to all Canadians. These activities include a focus on consumers, new programming to fill the 14 hours available under the CRTC's policy on digital radio, infrastructure or corridor development, and the cultivating of partnerships we need to move digital radio receivers out to Canadians--and yes, to listen to DAB services, a new DAB receiver is required. With the radio services available and increasing in number and locations, consumer promotion has started and receivers are becoming available.

As was mentioned earlier, General Motors of Canada recently announced that they would have DAB receivers in their 2003 model cars as early as the summer of this year. These are factory-installed, line-fit receivers, not after-market, dealer-installed. For your reference, some of these special DAB-equipped models will be on display at the Toronto auto show next month.

RadioShack, one of Canada's largest retail electronics chains, has also announced that they will start selling a full lineup of DAB receivers in the second quarter of 2002.

Zoopad, a Canadian company, is starting to produce a Walkman-style DAB receiver for sale in Canada. Many of these receivers are AM/FM/DAB-capable, but I will emphasize again that the full transition to digital will take some time to complete.

More good news on the receiver front is expected during the year, and we can chat about that.

Finally, how do Canadian broadcasters look upon the future of DAB? Last year, DRRI undertook a thorough analysis of existing and emerging radio technologies. The conclusion: radio must become a multiplatform medium to go forward. DAB will be the leader. It will eventually overtake AM and FM as over-the-air radio.

It would be unrealistic to think there will only be DAB. Radio will also have a presence on the Internet, wireless, cable and satellite. But DAB will be the leader for a lot of reasons that make the radio we now have so great. It's local, and programming is free. It's perfect for mobile audiences that are hungry for entertainment and information. It offers a substantial value proposition with its capacity to transmit data. It is, ladies and gentlemen, the future of radio.

That concludes my formal presentation. The three of us are here at your disposal to answer any questions you might have.

The Chair: Thank you very much, Mr. Roman.

Mrs. Hinton.

Ms. Betty Hinton: The information that is coming forward during these hearings is, to say the least, mind-boggling. All these different technologies that you're offering now on radio are things that we read about in comic books when we were kids and thought were far-fetched.

I have in front of me a small new piece of technology, too, which I've just learned how to use, and it speeds up life.

What are we going to do about delivering, through this system that you're talking about, the things that are important to Canadians right now? I realize that the sound is going to be far superior, because it is a superior sound system on digital, but what are we going to do about protecting things like CBC Radio and those kinds of programs? How are they going to be brought into this picture so that everyone is equally accessible?

À (1030)

Mr. Duff Roman: I will invite my colleagues to participate at any time.

We are going to try to stay within our areas of expertise to whatever degree we can, but if it gets a little freewheeling we will clearly identify it as a personal opinion.

First of all, in Canada, essentially the roll-out of DAB is a replacement technology. Most of what is happening is a simulcast of existing programming that you now hear on AM and FM. DAB is licensed, unlike the Internet, so there is provision for the regulator to control and to exercise influence on the kind of programming that we are going to continue to provide. Areas such as Canadian content, local service, and the solicitation of local advertising are all clearly spelled out under the current policy. That policy is being developed, it's evolving. Essentially, we are operating with that principle in mind now as we do the roll-out of DAB.

There will always be, with a barrier to entry through the licensing process, a way for the regulator to deal with us as broadcasters. That's not the same with other media, but it certainly is for now.

On the technical side, there will be a number of things that can happen in the digital world that don't necessarily happen in the AM and FM world now. There is excess capacity.

For instance, it is possible to provide subchannels of specialized information, perhaps not of the high quality of a normal music digital channel, but spoken words certainly could be handled as a specialized subchannel. Then all the other alphanumeric things we've talked about are all going to be made possible because of this very generous data capacity that the Eureka-147 system has in what is called the L-band, and you have probably heard about that in your briefing notes. It is a new piece of spectrum, it is called out-of-channel, rather than on-channel, so that there is no interference, for instance, between existing AM and FM frequencies, and the new L-band frequencies. It is simply impossible for it to happen.

Essentially as broadcasters, and I'm here as a private fellow, and I have Ray here from the CBC, we are very content-oriented. Ultimately, we don't make the technical equipment, the transmitters, or the receivers. We're facilitators, we're trying to put the necessary components together. We're trying to impact and influence manufacturers to bring the price down. But in the final analysis, we produce content, and we will use whatever means is available technically to reach the listener or the end-user with that content.

Ms. Betty Hinton: In that same vein, you mentioned earlier the delivery system. You said that prototypes are out there now, the beginnings of it. Approximately how much are we talking about? When new technology comes forward.... For instance, when the VCR came into play, they were terribly expensive, and now they are very inexpensive. What do you think the cost of the delivery system will be?

Mr. Duff Roman: The same model is at play. Do you mean the receiver system as in what it will cost you as a consumer, or a listener?

Ms. Betty Hinton: Yes, as a consumer.

Mr. Duff Roman: It's very interesting. I can tell you that RadioShack has set as a price the $200 mark, Canadian, for an average receiver. It might be a Walkman-type receiver, or it might be a desktop or tabletop receiver. In the meetings we've had with them, that's the magic mark. If we can bring it in at $199, under the $200, they're telling us that it will fly off the shelves. There will be no problem.

When you look at what you have to pay for in fact your BlackBerry or your Walkman, or any other PDA.... We also had our friends in the previous presentation talk about a situation in the U.K. where 500 receivers were made available at 99 U.K. pounds. It was like the Beatles had come to town. They lined up overnight. They sold out the 500 units in the London area in 30 minutes. They could not handle the demand.

I have a small, little shorthand saying that all of us really use, and that is that there is nothing impeding the roll-out of digital audio broadcasting that a cheap receiver can't fix.

À (1035)

Mr. David Garforth (Executive Director, Digital Radio Roll-Out Inc.): You held up your personal digital assistant there. There is now in Europe a unit that includes a digital radio receiver in the personal digital assistant, so the next generation of PDAs in Canada will potentially have a digital radio built in, which will allow all of the data that is being transmitted through the digital radio, or digital audio broadcasting transmitters, as well as the program service to be downloaded into your PDA and used whichever way you like.

Ms. Betty Hinton: I'm trying to be open-minded about all this new technology, but every time I turn around, and the more I read on the reports and the more I hear, I feel invaded, and I'm sure most Canadians are going to feel invaded. We're going to be overloaded with information, which on one side is really good. It's wonderful. Then the other side is a little bit frightening, especially for the older generation.

I'm just going to listen carefully to what you have to say today, and thank you for coming.

Mr. Ray Carnovale (Secretary, Digital Radio Roll-Out Inc.): If I may answer your question with regard to the preservation of CBC programming, it's important to remember that the allocation plan was determined on the basis of correspondence between existing services and digital services. Therefore, the plan presupposes that there are two CBC services in both official languages. Certainly our priority on the CBC side is to continue to maintain the audio content regardless of the delivery mode.

Ms. Betty Hinton: Thank you. That will reassure a lot of Canadians.

The Chair: Madame Gagnon.

[Translation]

Ms. Christiane Gagnon: You say you want to offer new and improved services, in addition to better sound quality, in the digital universe. Give us examples of improved services; I am thinking in particular of local content. We are hearing that this will encourage local content, but if one is competing with several other markets, how will local content be able to survive and be the consumer's first choice? I would like to get an idea of what you see as a multiplied universe.

[English]

Mr. Duff Roman: I missed the first part of your question here with my device. The localism of broadcasters, particularly on the commercial or private side, where about 90% of Canadian tuning goes, is considered an asset. It is not a liability in the face of competing technologies. It is one of our greatest strengths.

For us to survive in this bombardment of media from both sides of the border, all kinds of technology implications, the localism we have.... Radio is the only electronic medium that can quickly and efficiently serve its local constituency. It is free, it can serve the local mercantile community in terms of ads, it provides public service announcements. We feel that is a huge advantage over services that can't access the local market. For instance, in the U.S., with the introduction of the S-band satellites, XM and Sirius, there is an agreement that these services will not enter the local market with local service or local ad solicitation.

From that standpoint, I think the localism will be maintained and enhanced. What we plan on doing is essentially enhancing the radio experience. We don't want to change the interaction that you now have with your radio. We want to amplify it and improve it.

We like the model we have now. With a 98% penetration level, virtually everyone has a radio. That's a huge advantage. It's not one that anyone in our business would want to abandon to go fully into the Internet, or fully to some other mode, or fully into a national satellite delivery system. We have the ears of the Canadian listening public. Our endeavour here is to improve the listening experience with CD-quality sound and the value-added alphanumeric and other data services that this system will allow us to implement.

À (1040)

The Chair: I just want to inform members and our guests that there's going to be a vote on procedure in the House in 40 minutes. The vote is going to take 15 minutes. I would suggest that we won't be able to take advantage of their presentation and allow for questions within 40 minutes, so if members agree, we'll go and vote and come back here, if our guests will bide with us. Is that okay?

We have one other group to be heard. So we'll go and vote, and we can agree to come back as soon as we can after the vote. The vote will take 15 minutes.

Madame Gagnon.

[Translation]

Ms. Christiane Gagnon: You talk about improved sound quality and services, but I would have liked you to tell us what you mean by improved services for a local community. When I hear improved services mentioned, I think of an increase in information, an increase in the number of listeners, with 90% of people listening to the radio. Are you talking about an increase in local content or in the number of listeners who will tune in to station X because the information is more varied and wide-ranging?

I would like you to explain more clearly what you mean by improving service. Are you talking about more extensive programming, or local broadcasts of better quality?

[English]

Mr. Duff Roman: Primarily, under the spectrum conditions, I'm talking about improving existing programming, but there is some data capacity for additional services. Let me focus on the improvement of service. Right now radio is a singular sensory experience: it is audio. With DAB and the emergence of radio as a multimedia experience, a number of things can happen.

For instance, for a CBC talk show, the alphanumeric screen will allow you to know what the subject is at all times, who the guest is, what the phone number is for an open-line show, what the particular topic is that day. It may also provide information as to how to access the topic from the various regions of Canada. It has tremendous applications.

On the private side, one of the most frustrating things for our listeners is not knowing what song is playing. The song titles or names of the artists can be brought up on the screen and rotated indefinitely. Along with that, for instance, the bio of the artist could be seen as an alphanumeric stream. We could enhance Canadian content by being able to deliver a more complete package.

From the enhancement of regular programming, we see those advantages. Then, because it's digital, you can have an interactivity through a cell phone. In other words, you can close the loop. We can't transmit back with digital radio, but we can close the interactive loop by using a cell phone.

For instance, you could have a referendum; you could have open-line shows; different topics could be discussed. You could transact the delivery of music, for instance. That would take some copyright advancements, but as probably the greatest friend our Canadian talent artists have--the radio presenters who play their music--we would really love to be able to fulfill the listener's desire for the music they're hearing virtually instantly, with digital downloading. We have that kind of capability with digital radio. It is a broadband system and would facilitate that.

So we see for radio a huge advantage and a huge super serving of the listening public. It's radio in a way it's never been used. It's wireless and it's point to multi-point--and this is important to remember.

When you hear about the Japanese system and the use of cell phones, remember that Canadians listen to radio 20 hours a week, and that's been relatively unchanged through all kinds of technology assaults from every angle. Twenty hours of point-to-point cell phone charges sounds pretty prohibitive to me, so I'm encouraged as a broadcaster to say there will always be a place for a point-to-multi-point appliance: a specific device called a radio--regardless of the wired or unwired Internet or the other technical challengers out there today.

We are actually very positive and very firm in our belief that there will be a place for us in the digital world as long as we remember who we are, who our constituencies are, and the kind of program we're noted for. We have a very strong commitment to Canadian talent, and it has worked for us.

We've also proved on the radio side that virtually 95% of the tuning across the country is to Canadian radio, unless you're in a border situation such as Windsor. Even in Toronto there's a five or six or seven percent maximum out-of-Toronto tuning. So localism is very important to us; we'd just like to enhance the experience and bring more satisfaction to the listener.

À (1045)

The Chair: Ms. Lill.

Ms. Wendy Lill: Thank you very much.

You made a comment that the radio must become a multi-platform vehicle involving Internet, wireless, cable and satellite, and then further that the DAB is licensed, unlike the Internet, that there is control over the content and the content is spelled out under the current policy and will continue to be so.

So if it's going to become a multi-platform vehicle, we do have in fact no regulations in place for the Internet, and I'd like to understand how this is going to play out. We've had someone just before you talk with frustration about the fact that it's like the corner store; there's no control over what you see at the corner store. I beg to differ. I'd say that the corner store owner has a bit of control over what he can do with the products in front of him.

We have to try to figure out where it is that we can regulate, or, if we can regulate, what role content providers play, because it seems to me that's a central question. I'd like your answer on that, because I think you're talking about DAB but at the same time you're saying that the boundaries are all disappearing.

So I need to hear more about how we talk about some regulation here, no regulation here, the technology doesn't allow any regulation. Let's be really clear on whether there is no possibility for regulation or whether a certain sector doesn't choose to have regulation.

Could you tell me what you think on that?

Mr. Duff Roman: I'd be pleased to start, and as I say, my colleagues are welcome to join in. But I like what I heard earlier about it not being a black and white choice of regulating everything or regulating nothing. We feel that it is somewhere in the middle.

In simple terms we are the licensed player in all of this, so regardless of the vehicle of delivery we are the bricks and mortars. We're not an Internet service in the Caymans. You know where CHUM is. You know where the CBC is. So as long as you know where we are in a physical sense and as long as we accept a licence under certain conditions, you will as regulators, or as legislators, have control.

The carriage, the delivery system, the way to get to the end user is, as Gérald was saying, transparent. There are many ways of getting to the end user, and frankly, we don't fully have the crystal ball that says how all of this will play out.

So I keep falling back on my position as a broadcaster, saying that I don't make the equipment; I don't even make the infrastructure, in a sense. We are committed to making sure we stay relevant by going digital. That's why we're so involved with it. But ultimately we produce content and we're very proud of the content we produce as both Canadian radio and television broadcasters. Considering the juxtaposition with the U.S. with a sort of dominant influence, a societal influence, to the south, I think we do very well.

A lot of it has to do with the sort of consensual basis on which the public and private people operate. DRRI, for instance, has been in a partnership with the CBC since the very beginning. We feel very comfortable with each other. We recognize that each plays a different role, and we've found that it works out very well.

The model doesn't seem to work for the U.S., but it does work in the rest of the world, where right now over 300 million people can receive DAB signals. We think we're on the side of a world-accepted standard technology called Eureka-147 in the L-band.

I think my colleagues might have some other comments here, but those are my thoughts.

Mr. Ray Carnovale: I think the key is the fact that for DAB the primary channels are licensed and that ultimately is the control mechanism. It does raise the question of how you deal with auxiliary data, but your ultimate recourse is through the CRTC to the broadcaster who has the licence for the primary channel.

À (1050)

Mr. Paul Harold Macklin: Thank you.

This entire area is obviously very fascinating and keeps one wondering. For example, as we see technology change, the question I think the public will ask is how long will this technology be in place before it is supplanted by some other technology? Do we have windows out there where this is a 20- or 25-year technology? Do you have any thoughts or comments on that? I'm certain the Canadian people are concerned about spending their money on something that will be obsolete tomorrow.

Mr. Duff Roman: That is a good question. I also have to buy the same electronic devices you're talking about, so I face those dilemmas myself.

Right now the adoption of a fully digital system is market driven. Particularly, we commercial, conventional broadcasters simply cannot afford to not have the ears we need in order to deliver our business plan. I don't even know that 85% is a good number. What I'm saying is AM and FM programming are pretty well assured for a very long time before we're prepared to abandon them and move to a purely digital format.

In some jurisdictions--in Germany for instance--they have set up a soft banking system. They want to shut off analogue and go digital. That's great, but you have to also put that other piece in place. We can't set that finite date because we haven't got a policy that says there will be a subsidy of the roll-out of DAB. We're doing it within our own business plans. We're doing it because we believe in the technology. We believe radio can't not be digital. It simply can't be an anachronistic AM and FM system in a digital ocean. It just won't work.

Once we're digital, we can then interact with any digital technology. That's why David mentioned the PDA-type unit, which is digital. When it is combined with DAB, you suddenly have a mulit-purpose unit. You essentially couldn't interact and integrate data very easily between, say, an FM-PDA unit. It works much better if it's fully digital.

I don't have a short answer to what you've said. We had some very ambitious goals--about a ten- or twelve-year period, but I think it might be longer than that. The one thing is that, as a replacement technology...unlike the case of someone who is a digital entrepreneur with no AM or FM, there is much more of a desperate business case going on.

For us, it takes as long as it takes. What we do is influence or goad the receiver manufacturers; we push the equipment suppliers to get the prices down--that's our role at DRRI. But ultimately all of our partners are the establishment. They are operating existing business plans and have the luxury of ensuring that it gets done right.

Mr. Paul Harold Macklin: When I was looking at the report you presented, something struck me, and that was your request for assistance from the government. In what ways do you feel the government ought to be involved in giving assistance--that is, in promotion and so forth--in this matter?

Mr. Duff Roman: Again, that's a very good question. Backing up a little bit, we are charged under the Broadcasting Act with a number of responsibilities as licensed broadcasters. Unlike the other high-tech players, or unlike the Internet, we have obligations. We have particular obligations with regard to Canadian talent and Canadian content. We are charged with those responsibilities. We have obligations to the community; we have obligations with a certain period of time being devoted to local service. That's all part of the broadcasting regulations. That's the background.

Essentially we're separating ourselves from those players who are buying spectrum or leasing spectrum and are essentially telcom operators or national operators on a commercial model such as XM or Sirius.

Now, the next part of where I'm going with this is that because of the nature of the Eureka 147 system in the L-band, we think, with radio's nature as this perfect, almost symmetrical, beautiful device people rely on, we would have a way of communicating in a wireless sense with every Canadian in times of national emergency or calamity. We have in fact talked with the government prior to the dreadful episode of 9-11, when people became very aware of how important communication is and how important getting information about the facts right and quickly to every citizen is.

What we've suggested is that somewhere along the way we would like to have a serious dialogue with the government. We'll probably do most of this through the Canadian Association of Broadcasters. We could jointly develop an early warning system. It would be good for weather warnings, national disaster alerts and--heaven forbid--some form of national emergency such as we've seen in recent months.

That's where we were going with this. We are saying we have obligations; we're not just a pure investment type of player; we've been here a long time; we're part of the fabric of how Canadians dialogue with each other; and we have a better way now to improve that dialogue. That's where our conversation with the government was going.

À (1055)

Mr. Paul Harold Macklin: I have just a quick final question. Did I hear correctly that in fact we're talking of two operating systems between Canada and the United States? Since we make a lot of automobiles in this country that go to the United States, are they going to have specific radios that will only work in one jurisdiction, or will there be a chip in there that will permit both jurisdictions to be received?

Mr. Duff Roman: I think ultimately, sir, the answer is that that chip will permit that. In the short term, the hybrid receivers will not deprive anyone. There will be AM, FM and DAB technology. In the U.S., they're trying to develop something called “in-band, on-channel”, a different system that uses the existing spectrum. They haven't cleared the final hurdles with the FCC. It is narrow band, it is very limited, it does not provide the benefits that we and the Europeans and the rest of the world have found with the Eureka system.

So I think the answer would be that ultimately, if it's important, there would be a chip, and it would be reasonable in cost.

I was just talking to my colleagues while we were waiting, and this question sort of came up with the previous presenters. I remember, as a young person growing up on the Prairies with a battery radio, I had a four-band radio. I had long-wave, medium-wave, short-wave, and AM, and boy, that didn't seem to be cost prohibitive. We often listened to short-wave broadcasts from any part of the globe.

I think if there's demand for it, as these chip prices come down.... They're coming down dramatically in cost. These targets of under $200 are going to become under $100, in my feeling, within 18 months to two years, as the competitors in the marketplace kick in, as the offshore suppliers come in.

Incidentally, yes, we do share the same automotive grid, if you will, but really, no one is making receiver products in the U.S. or Canada. They're made in either Japan or Europe. As long as those manufacturers have bought into our system, and as long as we're lined up with the world, we think we're going to be okay.

We also can tell you that with our localism and with our peculiar, particular Canadian approach, there actually is a border between us. We don't necessarily have to have total accessibility to whatever the U.S. is doing.

[Translation]

The Chair: Mr. Duplain.

Mr. Claude Duplain: Sometimes I find all these evolving technologies and almost unimaginable possibilities a bit confusing. We are talking about radio. Your company is regulated. Is the Internet part of the broadcasting system, in your opinion? Is it part of the public domain or should it be excluded from all the regulations?

[English]

Mr. Duff Roman: I think you have a big technical problem in terms of traditional kinds of regulation. As long as you're licensed to provide a certain kind of service, a certain social contract with the broadcaster and the public, through the regulator and through the legislator, you will find the broadcasters will operate very responsibly in this area.

In terms of where the Internet is going to take us in this very sensitive area of regulation, I think my colleagues might be able to contribute to this, but I'm not sure. As I've said before, I essentially can tell you that you know where we are. We operate with bricks and mortar, and wherever our content takes us, you'll ultimately always be able to find the originator. It's not the same with pure Internet providers. It's different, and I think it probably does raise great concerns with citizens about some of the content that is already available on the Internet.

We're going to have discussions about that. I know our association will be dealing with these areas in some policy hearings that are coming up. There are also brighter heads and minds than mine out there who are grappling with this issue, but there's no magic or silver bullet here in terms of your question.

Ray?

Á (1100)

Mr. Ray Carnovale: It is a very difficult question, because the Internet is a unique phenomenon in that nobody is in control and everybody's in control. When you think of how it's structured, there's nothing else like it. To broadcasters who contemplate the Internet as being a replacement for the other traditional forms of broadcast delivery, I've often asked who they're going to call if their signal doesn't get there. It is in fact that kind of strange phenomenon. Calling the Internet service provider doesn't answer the question as to why the signal didn't get to the other end.

So the big difference is that with broadcasting, you're licensing. You have both a technical licence for the spectrum and you have a CRTC licence for the programming. With the Internet, there is no licence for the delivery mechanism, and unless you start to control the telecommunications carriers involved in providing those gateways, you don't have a licence over the delivery mechanism.

Your control over content, when it comes to objectionable content, appears to be the things that have been done through the Criminal Code, for example, but you have two opposite extremes in the spectrum. I think what you're looking for is how to regulate in the middle ground. There's no easy answer, and I don't think there is an answer.

The Chair: Mr. McNally.

Mr. Grant McNally: Thank you, Mr. Chair.

I have a question and a bit of a concern. Obviously I'm very interested in Canadian content and the fact that Canadians have access to lots of our own artists, as others have mentioned, too.

In terms of the satellite system in the United States, in this whole grey area—and I know you allude in your brief, under points 53, 54, and 55, to the fact that we should take note of this—I'm trying to look at this from a market share perspective. Just as we have these grey-area boxes in broadcasting, with the system in the United States, because of their huge market if that's the system they've chosen to go to, will they not be able to get to a receiver more quickly and at a cheaper price? Perhaps even through that, of course, if that happens, Canadians will have access to those same add-ons, whether you're talking about a car radio add-on or a receiver add-on later. Is there not a possibility that this may in fact supersede the technology being developed here? It seems possible that it could happen. Do you see that as a possibility?

Mr. Duff Roman: For certain applications and certain tastes, the U.S. satellites are attractive because they offer a hundred channels with various formats and various talk and music programs. But in my mind, they essentially compete more with your tape and CD players, because they don't have that radio element. They're mischaracterized when they're called satellite radio. Radio, in the commonly accepted vernacular, is something that relates to you as an individual in your community, and it has certain kinds of connotations to it. This doesn't.

On the legalistic side, the grey market could only develop with someone getting a U.S. address, much the same as with DTH television, because both of these are subscriber services. On the technical—

The Chair: Excuse me, Mr. Roman. I'm sorry to interrupt you in full flight, but what happens with this type of a vote is that as soon as there's a quorum, a vote can take place. We should be suspending right now, because as soon as there's a quorum in the House, this vote will take place. We'll resume as soon as the vote is over.

Á (1105)

Mr. Duff Roman: I appreciate that.

The Chair: Thank you.

The meeting will be suspended for now.

.1105

.1151

The Chair: We'll resume the meeting. The other members will come back later, so that we can take advantage of your presence.

Mr. Roman, I think you were busy answering a question from Mr. McNally when you were rudely interrupted. With the 15-minute votes in the parliamentary system, there's always inflation. They always take 40 minutes.

Mr. Duff Roman: Interrupting for the nation's business is never rude, sir.

I think I can actually pick up by saying that on the technical side, we were talking about S-band satellites, XM and Sirius, and the threat that they presented. I had indicated that they didn't really have an effective local portion to their services.

In terms of what's beyond the grey market implications for that system to work appropriately, sir, to actually have a viable business case, it's almost totally dependent on terrestrial repeaters. Without them there, it's essentially an audio service for long-distance truckers, because once you get into any obstruction of line of sight from the satellite, you've lost the service.

So in addition to having to have a policy impact, a change in regulation—in my opinion, that's a fairly complicated process that, through our submission, we flag for the government as something that would be a problem for us—you'd still have to have licensed terrestrial repeaters in order to bring that service into any urban area and, in fact, in any area with a two-storey building. If you park on the wrong side of the street in Estevan, Saskatchewan, you won't be able to get that satellite service. If you go under an underpass or if you go into a tunnel, you have to have that other component.

I'd also like to add that although we think we have an answer to that concern, our colleagues—the conventional broadcasters in the U.S.—have an even greater issue. They haven't rolled out a terrestrial digital system, which is our approach. They're hoping for an in-channel solution, but they're already being impacted, to whatever degree, by XM and Sirius, and they don't have a digital answer.

So in our strategizing, it is our view that what we will try to provide is a high-quality, terrestrially based, digital service that we hope Canadians will find appealing, and we'll provide it in concert with whatever regulatory protections we now enjoy or whatever is fair. And I think we have an excellent opportunity for success.

Mr. Grant McNally: Thank you.

The Chair: Are there any other questions for Mr. Roman or his colleagues? No?

Can I ask you one question before we close up? In your brief, you listed the various components that make up DRRI. That brought to mind the fact that in the days ten, fifteen, and twenty years ago, you had a lot of small radio stations, especially in the smaller cities or the suburban areas of big cities, and they were independent or owned by family groups and so forth. Then, with the merger era coming upon us, they all got swallowed up by bigger partners. Eventually they all became little conglomerates, really, and the independent ones are finding it extremely hard to survive. There's one independent one in my area of Montreal that is finding it very hard to survive.

So now we come to the digital age, when it will require investments such that only the big players can really afford to do this. What is the place in the future landscape of radio broadcasting for any little guy in a small city or in a suburb of a big city?

Mr. Duff Roman: That's a good question, Mr. Chairman.

If we took a snapshot right now under the current policy, every conventional AM and FM broadcaster has an assignment in the L-band, the digital spectrum, waiting for him or her. Unlike it is with the S-band satellites, for instance, on which the spectrum was purchased, every one of those operators has a place to migrate under this digital system as a replacement technology.

The cost of digital in its essential form is very competitive with what it would cost to do a full-blown AM or FM system. The transmitters are very low-power ones. In fact, five radio services share one 800-watt transmitter in Toronto, for instance. Maintenance and operation costs are very low. The capital costs are essentially somewhere from $80,000 to $90,000 per service, times five. It creates a pod of five services, which has 1.5 megahertz or 300 kilobits for each of the services. So in a technical sense, it is not costly for these operators to adopt this new digital technology.

But to approach what the chairman mentioned about the change with the absorption of smaller companies by the larger companies, I think that's again a separate issue. It's an economic issue for the industry. Generally speaking, our industry feels it has been good for our industry. We weren't very healthy in the early nineties. We're much better now.

Finally, to that end, I would just simply to tell you that the Canadian Association of Broadcasters is appearing before you on February 21, and I'm sure you'll be asking that question. They probably can find a much more erudite answer than we can under our mandate at DRRI.

The Chair: I was just interested in the impact of the technology, but I think you have answered my question.

We really appreciate your appearance here, Mr. Roman, Mr. Garforth, and Mr. Carnovale. Thank you very much for coming to meet with us. It was extremely enlightening to the members.

Mr. Duff Roman: Thank you. Again, we appreciate the opportunity.

The Chair: I now invite the Canadian Association of Internet Providers to come forward. Mr. Jay Thomson is the president of that organization.

Mr. Thomson, because of a vote, we have been delayed. Would half an hour do for you, or do you need more time? How much time do you need?

Mr. Jay Thomson (President, Canadian Association of Internet Providers): I certainly don't need more time with respect to my opening remarks. I'm in the hands of the committee in terms of their questioning.

The Chair: All right, thank you.

Mr. Jay Thomson: Good afternoon. Thank you for the opportunity to appear today. My name is Jay Thomson, and I'm the president of the Canadian Association of Internet Providers, which is based here in Ottawa.

CAIP is a national trade association representing companies that provide access to the Internet, as well as various other Internet services, such as website hosting and design, network support, and e-commerce solutions. Collectively these companies are called Internet service providers, the short form being ISP. Our members, which include such large companies as Bell Canada, Telus, and AOL Canada, as well as many, many smaller ISPs from across the country, provide approximately 80% of the Internet connections in the country. We would welcome members of the committee to visit any of our members' offices at a time that's convenient for you. Just let me know, and I'd be pleased to arrange any of those kinds of meetings.

Mr. Chairman, my opening remarks this afternoon can be brief, because I really just have one message to present to you. Namely, regardless of whatever legislative or policy changes you ultimately recommend as a result of your study of the state of the Canadian broadcasting system, please do not do anything that will introduce or lead to broadcasting-style regulation of the Internet.

The Internet represents an opportunity for Canadian broadcasters and the Canadian broadcasting system. It is not a direct threat to either. Far from needing to be reined in in any way by the Broadcasting Act, broadcasting regulations, or policies, the Internet should be free to grow, to be experimented with, and to be exploited by programmers, producers, distributors, broadcasters, and anyone else who can contribute to tapping the full potential of this amazing but still relatively new communications medium.

Mr. Chairman, the CRTC got it right in May 1999 when it decided not to try to impose broadcasting-style regulations on ISPs or Internet content providers. While some—even a growing amount—of Internet content might arguably fall within the definition of “programming” in the act, even if it were practically possible to apply Canadian content or other similar broadcasting rules to that content—which it isn't—there is no need to do so to meet the objectives of the Broadcasting Act. There is plenty of Canadian content of all kinds on the Internet. It's easily accessible and can be created and distributed by anyone with access to a computer and the Internet.

Canada is a world leader when it comes to the Internet. Our industry is both innovative and responsible. Our policies are progressive and enlightened. As a result, we have more citizens on-line than almost any other country in the world. Our high-speed Internet penetration is second in the world. The Internet is a Canadian success story. That being said, there is still much room for improvement. Even though we rank second in high-speed penetration according to a recent study by the OECD, this still only amounts to slightly over six out of every hundred Canadians with a high-speed connection.

We need more competition in the delivery of high-speed services, not just to boost penetration, but also to stimulate innovation in the development of high-speed applications and content. We need to invest in expanding the reach of our high-speed networks outside the urban centres, as the National Broadband Task Force recommended, so that Canadians all over the country can not only benefit from accessing broadband services, but can contribute to their development as well.

Is the Internet having an impact on the Canadian broadcasting system? It certainly is. There's streaming video on the Internet, and Internet radio stations. Other companies, including the incumbent cable TV companies, want to use the Internet to re-transmit broadcast signals.

The Internet is changing how people communicate with each other, how they gather information, how they shop, and how they're entertained. It's also changing how businesses interact with consumers, whether we're talking about selling travel packages to Newfoundland, or promoting the show Random Passage, CBC TV's mini-series about that province's history. But do these changes mean Canada's Broadcasting Act needs changing, too, to restrict what's happening, or to stimulate it? Our answer is no.

Canada's broadcasting policy as set out in subsection 3(1) of the Broadcasting Act remains relevant and appropriate. The regulatory policy in subsection 5(2) already grants the CRTC the flexibility to adapt to scientific and technological change, and subsection 9(4) gives the commission the power to exempt from licensing or regulating where it's not necessary to do so to implement Canada's broadcasting policy. For every challenge the Internet poses to broadcasters and the Canadian broadcasting system there is a corresponding opportunity, which Canada's broadcasting community is increasingly exploiting, to their benefit and to the benefit of Canadian consumers.

That brings me back to my original point. Mr. Chairman, whatever you and your colleagues on the committee do in your review of the Broadcasting Act, we ask you to leave the Internet alone. You can do more to stimulate Canadian communication and expression by leaving the Internet to find its own path than by trying to impose a legislative landscape upon it.

Thank you. I welcome your questions.

The Chair: Thank you very much, Mr. Thomson.

Mrs. Hinton.

Ms. Betty Hinton: Thank you, Mr. Thomson.

As a person who less than a year ago had to holler for one of my children, get me in, get me out, when I went to use the Internet, I've come a long way, but I still am a novice at this. I gather from what you're saying, though, that you don't want any restrictions at all. I hope you would understand that this committee's concern is for cultural content and preservation of Canadian culture. That's the main driving force behind looking into the Internet side of things. I happen to be from the school of thought that says you really would have a difficult time doing anything that would prevent the flow of information. It would be a very difficult task to begin with, and I don't think it's a necessary task. I don't think that we want to have an iron curtain around information in Canada.

That said, there are also some concerns about what comes across the Internet in respect of child pornography and being able to lure children. We've addressed that to a degree in the House of Commons already, but perhaps you could take a bit of time, if you would, and maybe reassure some members of this committee that our main concerns would be covered if there are no regulations. You touched on some things, but could you be more specific about how the cultural aspect of what's important to us in Canada will not be eroded and ruined and how you are going to protect children from the kinds of things that can happen via the Internet?

Mr. Jay Thomson: Thank you for the question, it's an excellent one.

If we focus on the broadcasting-style regulation of the Internet in order to meet Canada's broadcasting policy objectives, which I understand is the mandate of the committee, to focus on the Broadcasting Act and broadcasting policies, then we look at how much broadcasting content is actually on the Internet, it's a growing amount, certainly, but still most content on the Internet is alphanumeric, it's still image, it's not streaming video. There is a fair amount of radio and audio programming, but the vast majority of Internet content is not something that would fall within the parameters of the Broadcasting Act.

The content that does fall within the Broadcasting Act is still very much under development, and for that kind of content to be distributed to a wide enough audience that it would negatively affect the dissemination, creation, or broadcasting of Canadian programming, or Canadian broadcasters themselves, it would require the vast majority of Canadians having access to a kind of distribution system that will work with that content, namely, a high-speed distribution system. Canadians have in almost every one of their homes a TV and a radio. We've heard 98% penetration for radio; television penetration in this country is about 99%. Internet connectivity in the country stands at about 60% of all Canadians, which is very high, number one or two in the world, but high-speed penetration is very low. In order for the kinds of applications to be created and distributed that would be used to compete with our broadcasters, we'd need to have much higher penetration, and we don't foresee that within the next few years.

As for the content that does exist on the Internet, if you wanted any kind of Canadian content, you could access it. Information about municipalities, about museums, about cultural organizations, cultural activities--it's accessible. I'm being rather long-winded here on that particular piece of the question, but I would suggest that there's sufficient access to Canadian cultural content on the Internet already that we don't need to worry about regulating it to stimulate more or restrict access to other kind of content.

Briefly on your other question about protecting children, Canadian laws that apply off-line apply equally on-line. Anything that is illegal in the off-line world will be illegal if it's transmitted or carried out in the on-line world. We at our organization were very supportive of Bill C-15A and introducing clarification that child pornography on the Internet is a crime. The laws apply to the Internet, and they can be applied in a way that will affect the availability of that kind of content.

Finally, very much an issue is education, user empowerment. These are things our organization, the Canadian government, and other governments in the western world have recognized as the best way to address offensive content, as opposed to illegal content.

Ms. Betty Hinton: You said it's basically alphanumeric and still video. Not being really up on the Internet, though we do have the system in our own home, I don't have still video, I have moving video. I could actually access a movie if I chose to.

Mr. Jay Thomson: You certainly can do that, and if you have a high-speed connection, it would actually be something worth watching. If you don't have a high-speed connection, it wouldn't be of much entertainment value. You can access that kind of material if you wish, but the vast majority of content still is static website material, information from newspapers, pictures on websites, and it's not streaming or moving video.

Ms. Betty Hinton: Okay. Thank you.

[Translation]

The Chair: Mrs. Gagnon.

Ms. Christiane Gagnon: Do you not think, for instance, that being able to offer shows produced for television on the Internet would represent value added for the range of products you can offer on the Internet? I can understand that people might not watch a film on the Internet, but that is not the only television programming there is. There could be broadcasts which could be adapted or which one could view on a screen via the Internet. At that point, if I held a copyright as a producer or creator, even if only 4% of the population were listening, well, that would be 4% more in terms of royalties for me. The market is very limited, and in order to ensure the survival of creators and those who buy what they create, market opportunities must be increasingly large.

So there is indeed an entire movement. These are new technologies which are growing at an amazing pace. I think that, in certain countries, there is concern and also a desire for regulations. It is not just in Canada that certain productions can be prohibited and where productions are bought first by television networks.

How, then, do you see copyright holders being protected when they see their product being disseminated by another medium for free? I am thinking, for example, of the production of a quiz show, which could very well be viewed on the Internet.

[English]

Mr. Jay Thomson: The starting point, as you've identified, is that the Internet is a distribution mechanism. It can provide a new opportunity for creators of programs to access audiences they're perhaps not accessing right now.

You've also identified a problem with the Internet, namely ensuring that creators get compensated for their creations when they are distributed on the Internet. That's a copyright issue. I know this committee will likely be reviewing copyright legislation some time in the near future, as a result of a policy review that's currently underway, with respect to digital copyright issues.

Changes to the Copyright Act might be able to clarify who is liable and under what circumstances, with respect to transmissions on the Internet. Nevertheless, the outstanding issue is how to enforce and protect those rights. In order to do that, we need to turn back to the industry itself and technology. The industry creators, producers and broadcasters recognize they need to have a way to control the distribution of their products. They're introducing new technologies to add what are called digital watermarks on their programs--other means of restricting either access or download capability. But these are all being addressed by the industries themselves, through technology.

So I don't see it as a problem. It's a challenge, but I think the programming and broadcasting industry is up to that challenge.

The Chair: Mr. Bagnell had asked me for a question, then Mr. Harvard.

Mr. Harvard.

Mr. John Harvard (Charleswood St. James--Assiniboia, Lib.): Thank you, Mr. Chairman.

Thank you, Mr. Thomson, for appearing today.

Let me start off by saying that your advice to us about eschewing broadcast-style regulation is well taken, but it could be outdated. I say that because in the last 20 years or so we've been living in a sea of rhetoric having to do with markets, less regulation, and smaller government. And while for some people that kind of economic ethos has produced unprecedented prosperity, it also has provided something called Enron, which I'm sure you're quite familiar with. Enrons happen because of government's indifference to regulation. The government is too quick to respond to these kinds of appeals to stay away, stay out of our business--we know what's good for us, and we certainly know what's good for the market and what's good for the people.

Well, because of one Enron in the United States, a lot of people are hurting today. So when it comes to the Internet and your advice for us to stand back and do nothing, I can understand that, and perhaps in the early going of the Internet--and that's where you are really, in the early going of the Internet--from an economic point of view, it makes a lot of sense.

But, we also know, Mr. Thomson, there's a lot of junk on the Internet, and some of it is nothing short of obscene. You tell us that the law off-line applies to that on-line, and you may well be right, but that's not getting us anywhere. There is a lot of awful pornographic stuff on the Internet. I would suggest to you guys who don't want any regulation that if you don't do something about it, then somebody else will do it, and that somebody else will be government. And in this country, it may well start at a committee like this.

So, what are you going to do? It's either one or the other. You do it, or we do it.

Mr. Jay Thomson: I'd respond to that by saying that in many ways we are doing it ourselves already. We're very supportive of industry self-regulation, and we've introduced a number of initiatives along those lines.

We at our association, the Canadian Association of Internet Providers, introduced a code of conduct for our members back in 1996. We're in fact one of the first Internet associations in the world to introduce such a code of conduct. Amongst other things, that code provides that our members will not knowingly host any illegal content. Once we're advised by proper authorities that any content that is on our servers is contrary to Canadian law, we will remove that content.

Now, with respect to content that is not illegal, we're not in the position of regulating our users' tastes. Notwithstanding that some of the material, indeed a lot of the material, on the Internet can be offensive--even highly offensive--to many people, if it's not illegal, it's not illegal.

There are, however, ways to give our customers an opportunity to control their own Internet experience, so they can avoid that kind of material, for example, through education about filtering systems they can add to their hardware and software--providing them with an educational service, which we do. We've launched a portal as part of our website called our protection portal, on which we profile and link to a number of Canadian organizations that are working directly in these fields, such as Media Awareness Network, which deals with media literacy; the Missing Project, which deals with the threat of Internet luring, and the Simon Wiesenthal Centre, which deals with hate on the Internet. And we in fact link as well to the Canadian government's own policy called the strategy on safe, wise and responsible Internet use.

We're involved in the development of a hotline for Canadians whereby if they come across Internet content that they belive constitutes child pornography, they will know who to contact in order to file their complaint. We are involved in establishing that, and we'll be involved in helping to fund it as well.

So between Canadian laws and the industry's self-regulatory initiatives, which are ongoing, we're working to deal with your concerns and the concerns of Canadians.

Mr. John Harvard: May I ask one more question, Mr. Chairman?

Thank you for that, Mr. Thomson. Perhaps then you can help me with this.

I can understand why you speak positively about what the providers you represent are doing, but you do say there is some stuff on the Internet that's still quite repugnant. Unfortunately it's legal, if I understand you properly.

So what do we do with the legal repugnant stuff? You just told us a few minutes ago that we, in government, shouldn't be entertaining a regulation, yet you say there is some repugnant legal stuff there. Where does that leave us then? We're in a catch-22. You say it's not very good for us, but don't do anything. So what do we do?

Mr. Jay Thomson: Well, you continue to work with the industry as you have, to help us develop our self-regulatory initiatives, educational programs, and so on.

Mr. John Harvard: I'm sorry, but are you suggesting that the way things are going, 5, 10 or 15 years from now the Internet will be cleaned up, and there will be a measurable difference between what you will see in Internet content--I'm talking about pornography now--10 years from now, and what we have right now? Is that what you're suggesting?

Mr. Jay Thomson: If we're talking about legal content, then the bottom line is it's not something the government should be legislating against.

Mr. John Harvard: Why not? If you don't like it, why don't we just change the law? If there's something right now on the Internet we don't like, but it's legal, it seems to me we should be changing the law to make it illegal. We do it all the time. When certain laws are not producing results, we change the law.

Mr. Jay Thomson: If you in your wisdom were to decide that a certain type of content that is currently legal but bordering on illegality because of the nature of it...we'll take erotica versus pornography, and I'm not defending either one. But if you can find a line that distinguishes between what is acceptable and what is unacceptable, and you legislate against what you find unacceptable, then the laws will continue to be applied as they are currently applied, and you'll deal with that type of content.

But you're going to find a situation where decisions will have to be made over what is legitimate free speech and what is something that should be legislated against.

Mr. John Harvard: I agree. I hope you support us, though, when that day comes.

The Chair: Mr. Bagnell.

Mr. Larry Bagnell (Yukon, Lib.): I just have one question and it's not on content, but because you're the president, and you're here....

We had an Internet provider--and I'm sure you know about this because I think it was the biggest one in the Yukon--and it went bankrupt. It left all sorts of people holding the bag and gave Internet providers in general a bad name. A lot of people were angry about Internet providers.

Should the government go ahead and regulate a lot stronger on the solvency of such companies, as we do with the banks, or is your association beginning to self-regulate in some way, to make sure this type of thing will be less likely to happen in the future?

Mr. Jay Thomson: I wish there were some way that we, as an association, could ensure that Internet service providers, and in particular our members, would not face financial problems, and ultimately bankruptcy. It certainly has an impact on their subscribers and on us as an association when we lose members, and it tarnishes the image of the industry.

That being said, this is a highly competitive business, and Canadians have benefited from that competition, as they have in other areas where competition exists. Multiple players offering different services appealing to different niche markets is a benefit.

A downside of that, in some cases, is that companies cannot compete. For whatever reason, they find it impossible to continue to operate in that highly competitive marketplace, and they go out of business.

I don't think you can legislate good business practices. I wish there were some way we could create a regime where there was a stronger economy for our members, but I just don't think that's possible.

Mr. Larry Bagnell: What about legislating some type of insurance to cover at least fees that have been paid--legislating insurance is not a new concept--so if someone has paid a year's fees and the Internet provider goes bankrupt the first day of the year, at least the insurance would cover the outstanding commitments?

Mr. Jay Thomson: It's an interesting concept, one that's never been raised with us. I'd certainly be interested in looking at it further. The industry is still very much in its infancy. Notwithstanding the fact that it has been around for a number of years, it's still very much in its infancy. There are a lot of changes ahead of us. There's a lot of consolidation taking place. We want to make sure that any new rules we introduce recognize that those changes are still taking place.

Mr. Larry Bagnell: I don't profess to have any answers. I just want to encourage you to look at that because of the thousands of angry people. What I say to all industry, having been involved in industry, is that if you don't look at the big issues and self-regulate, the government eventually will, and I think most industries would rather regulate themselves and avoid government intervention. It seems to work out better.

Thank you.

The Chair: Mr. McNally.

Mr. Grant McNally: Thank you, Mr. Chair.

I want to begin by maybe rebutting a bit of what Mr. Harvard said. I know he's not here to defend himself, but I think Enron has happened because of greed, deception, and untruth, some of which we sometimes find in governments as well. I don't think the fact that a government isn't there to intervene is the reason those kinds of things happen.

I was a bit concerned--and I don't know that even Mr. Harvard's colleagues would all agree with him, because it sounded a bit as if he was talking about imposing a particular morality through legislation or regulation. We had better get down to the corner store and all the video stores too if we're going to take that approach with the Internet. If there are things that are offensive on there, well, people have a choice not to view or watch those kinds of things or not to pick those products up either at the corner store, at the video store, or on the Internet. I think that we need to keep that in mind.

I want to ask you two specific questions about Canadian content, one more of a philosophical question and then a specific one about retransmitting broadcasts over the Internet.

The first question concerns the fact that you mentioned there's a great deal of Canadian content on the Internet. I concur with you on that. You can do a search of just Canadian websites when you're looking for particular information through almost any Internet provider. This has evolved or taken place in an environment of no regulation, basically, or very little, yet we have huge amounts of Canadian content. Obviously, it's being accessed and viewed by hundreds of thousands of Canadians. How do you see that being applicable to broadcasting?

I wonder if we might look at some straw-dog arguments about Canadian content, given the great deal of regulation we have to increase Canadian content. If there were perhaps fewer regulations, isn't it possible, particularly in the digital world of audio and television we heard about this morning, that there might actually be an opportunity for Canadians to choose more Canadian content? I know it's not particularly aimed at the Internet.

I'll ask the second part of the question too. In terms of retransmitting, we have--and you alluded to it--a bill that's coming before us very soon in the House having to do with the Copyright Act and this whole area of broadcasting over the Internet. I'm wondering if you as an Internet expert, so to speak, might see the possibility of a licence fee--it was mentioned in one of our other meetings--for television. Would it be a way to recover costs for producers if there were to be a licence fee for every individual user of a computer with Internet service, say a yearly fee, that might then be given back to the producers? Is that a way costs might be covered? There's just a sort of broad question there and one particular question. That's all I have.

Mr. Jay Thomson: The first question is, is less regulation a good thing? Would it be a good thing for the traditional broadcasting system? It certainly has worked, as you've said, with respect to the Internet, because it's a very open system and anyone can get access to it. Anyone with some creativity and access to the right software and a computer can create content. Much of the content that is out there is free content; it's easily accessible, it doesn't cost you anything to look at it, and no moneys are flowing back to anyone who's produced it.

It's something of a different world with the conventional broadcasting system. Producers create and need to be paid. Broadcasters broadcast and need to be paid. There is currently a big question mark over whether people will pay for content on the Internet. With the traditional broadcasting system, arguably, you need some form of regulation to ensure that there is a marketplace for Canadian creators and broadcasters, so that they continue to stay in business and continue to provide programming to Canadians. So I think there's still room for regulation on the traditional broadcasting side.

With respect to Bill C-48 and what we see as the clarification that the distant signal retransmission regime applies in a technology-neutral way, we're supportive of the approach that new business models using the Internet will be able to benefit from the retransmission regime and pay royalties to creators for using their product. I think that's a better approach than attaching a fee to an end-user based on the purchase of a computer, which they might use for all kinds of different reasons. It's the BBC model of taxing the radios in order to support the BBC. It hasn't worked in Canada for traditional broadcasting, and we wouldn't support it for the Internet either.

The Chair: Mr. Macklin, the last question.

Mr. Paul Harold Macklin: Thank you. In looking at this entire area, I personally am a supporter of the concept of Internet, but obviously it does need to establish the high-speed process in order to truly be effective. So the first question I would have is this.

In your brief you said you want to see also higher penetration within the marketplace. Yet you say there's a lack of widespread competition, which, I gather, you're suggesting is the reason this is not succeeding. I know you've problems, and again, you speak in your brief about ISPs trying to get access to the telephone company's high-speed systems. Do you believe that as a matter of public policy, the government ought to be intervening in this area, in order to be more effective in helping this competition grow? Is that control of those high-speed lines a major detriment to the expansion of high-speed Internet service?

I'll save my other question until I hear where we're going with that one.

Mr. Jay Thomson: In fact, we have called upon the government, through the CRTC, to intervene in this area to ensure that independent ISPs, those that are not affiliated with a cable television company or a telephone company, get access to those cable and telephone networks, in order to offer a competitive high-speed Internet service. So yes, we have called and will continue to call upon the government for help in this respect.

The Chair: This will be the last question.

Mr. Paul Harold Macklin: I have an interest in seeing more of this within rural Canada. As we commented in our recent budget, we want to see public-private partnerships develop as a way of expanding the network and connectivity throughout this country. Would you have any suggestions as to the creation of the public-private partnerships that might succeed in doing this?

Mr. Jay Thomson: We were a participant on the broadband task force. We attended the meetings and were part of the debates and discussions. We're highly supportive of that task force report, which in fact recommends that kind of partnership between the private sector and the government with some help in funding from the government and matching funds coming from the private sector. The goal is for companies to have the incentive to build out into those rural areas where it's not cost-effective to do so based on the expected returns they would receive.

The Chair: Very briefly, Mr. Macklin.

Mr. Paul Harold Macklin: How would you see that building-out occurring? Are you seeing it as occurring through fibre, are you seeing it occurring through wireless, or are you seeing it occur through satellite development?

Mr. Jay Thomson: It should occur in whatever means will achieve the objective. There should not be a designation as to what kind of technology is used. All opportunities should be explored, all possible proposals should be considered, and the most effective ones should be adopted. That could include satellite in some more northern regions. Wireless in many, many rural areas would be the solution. In other places it would be a hardline fibre optic cable. It's whatever will work under the circumstances.

The Chair: Thank you.

Just before closing, I want to pick up on Madame Gagnon's point. Let's project the Internet 10 or 15 years hence. There's a tremendous revolution just year to year. Let's assume that all providers are using high speed and the users are getting high-speed connections and that you can take a program from CBC or whatever and broadcast it on the Internet so somebody who is just watching wants to...in other words, you would have one unit that is TV, Internet, and everything. They're talking about these Japanese telephones that are telephones, TVs, transmitters, and so forth. So assume that you have a world where you have one instrument that distributes Internet or programs and so forth.

In your view, then, from what I heard you say before, would it be that the only way to ensure that producers and creators are protected and that Canadian content is protected is through copyright legislation and not regulation as such? In that kind of world, projecting ahead a few years.

Mr. Jay Thomson: First of all, in that kind of world, which would ultimately be what is currently called a video-on-demand kind of world, there still has to be a business plan, a business case for making programs available on a one-off basis. People will have to be willing to pay to get access to those programs on a one-off basis. Currently, they don't appear to be willing to do that, so there'll have to be a change in behaviour.

The other side of the coin is piracy of those programs, where someone might pick them up and distribute them illegally without compensating the copyright holder. In those circumstances, we believe that the copyright legislation is the way to address those issues.

The Chair: Mr. Thomson, it's been very enlightening for all of us. Thank you very much for coming today. We really appreciate it.

Members, there are just two items before we close.

Ms. Lill has sent us all a letter about media concentration, which she wanted to discuss with us, but she had to leave. She had a meeting with a minister today. I just want to remind you of the letter. We'll have to discuss it. It would be interesting if you would think about the issue as to whether we should have a separate panel on media concentration that would overflow strict broadcasting and include all the ownership issue, because there's cross-ownership of printed media and also broadcasting media. We'll discuss it as soon as we can get together another time with Ms. Lill there.

The second item, which is very brief, is that the CAB, the biggest grouping of private broadcasters and radio broadcasters, l'Association canadienne des radiodiffuseurs, appears before us on February 21. They have sent us a proposal saying that because of the number of their members and the extent of their presentation, which they want to bring to us in five separate modules, it'll take them a bit of time. They've asked for the session to be from 9 a.m. to 12:30 p.m. and in five modules. I think the content of how they want to present their views is up to them, and I don't see any objection to the five modules, if you don't. As far as time goes, I hope we're going to be able to accept that we give them enough time to present their case. Because they represent so many broadcasters, I think it would only be fair. So unless I hear to the contrary, we will just signify to them that it's quite okay to do this.

With this, I would like to declare the meeting closed. Thank you very much for your participation at this late hour.