HERI Committee Report

MAINTAINING A SINGLE SYSTEM

Chapter 12
The Digital Transition

Canadian broadcasters and distributors have had to cope with serious challenges over the past two decades due to the introduction of new programming services and the dynamics of audience fragmentation. In the years to come, these challenges will be amplified by the digital revolution; that is, the transition from analog to digital technologies.

There is hardly an aspect of human life in developed countries that has not been affected by the introduction and uses of digital technologies. One need only think of the development of personal computers, the Internet, geographical positioning systems, telemedicine, distance education, just-in-time inventory systems, robotics, remote imagining systems, and the personal video recorder as a few examples of services that did not exist 40 years ago.

Broadcasting has not been — and cannot possibly be — immune to the impact of the digital revolution. The most notable example of this has been the introduction of DTH satellite services. On the one hand, Canadians, no matter how remotely located, can now enjoy access to the same services Canadians receive in larger cities. On the other hand, this new reality has created difficulties for some, particularly for those interested in community, local and regional expression.¹

But the delivery of television via satellite is just one of the many examples of how digital technologies can be and will be used. The Canadian Association of Broadcasters (CAB), in its brief to the Committee described this ongoing process as "the digital transition," and argued that the "Canadian broadcasting system is ... at the threshold of the single biggest evolution in its history."²

This evolution will continue over the next 10 to 20 years and will place incredible strains on the Canadian broadcasting system. There are a number of reasons for this. Two of the most important are the cost of the transition and the challenges it will place on the governance of the system (i.e., the system of policies, regulations, programs and accountability mechanisms that are put in place). This chapter describes and discusses these challenges and makes a number of recommendations that the Committee believes will help with this transition.

A. Background

On 29 October 1995, the CRTC released its policy to govern the introduction of digital radio. Seven years later, on 12 June 2002, the Commission announced a licencing policy to oversee the transition from analog to digital, over-the-air broadcasting. Soon thereafter, on 16 August 2002, the Commission issued a call for comments on the establishment of rules for specialty services on fully digital cable undertakings.³

With these various declarations (and others), the CRTC has set in motion Canada's transition from analog to digital broadcasting. Many witnesses told the Committee that we are entering a transitional period during which new digital devices and services will be competing with each other for audience and industry approval. In the coming years, the most significant of these transitions will be:

Witnesses also told the Committee that the transition to the digital transmission of broadcast services is being driven by several key considerations. These include: better quality signals; a more efficient use of transmission capacity; and, the need for new or expanded revenue streams.

But the transition to digital is quite unlike previously witnessed changes in technology. As the Canadian Association of Broadcasters noted in its brief:

... past changes in technology (black-and-white to colour TV; AM to FM radio) have been relatively simple — with standards in place, and usually with only one major change occurring within each industry at a given time.⁴

In this instance, however, all of these changes will be taking place at the same time, and with far less agreement on standards.⁵

The Canadian Broadcasting Corporation in its submission to the Committee also noted that:

The ongoing digitisation of North American broadcasters' production and delivery facilities is the one change in technology that has and will most significantly impact Canadian broadcasting. In future years, the continued digitisation of communications and broadcasting infrastructures will further enhance a broadcaster's production techniques and ability to deliver programming to viewers and listeners.⁶

With these considerations in mind, the sections that follow summarize what the Committee was told about the digital transition.

B. What the Committee Heard

Why Digital?

Several witnesses explained to the Committee the rationale for the transition to digital technologies. Mr. Duff Roman, President, Digital Radio Roll-Out Inc., outlined the advantages for radio as follows:

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.⁷

Mr. Roman also illustrated how digital radio will allow programmers to provide value-added content to audiences:

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.⁸

As for television, the advantages of digital signals were described by Dr. Metin Akgun, Vice-President, Broadcast Technology Research, Communications Research Centre Canada, in the following way:

What the digital technologies do is provide higher-quality sound and video. ... there is a flexibility as to what we can use the channel capacity for in addition to programming service ... 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 ... like video games and video on demand. They can ask for ... travel information, even electronic newspapers. So it goes on and on, and the capacity is quite adequate for doing this.⁹

Similarly, in a paper prepared for the Committee, communications consultant Mr. David Keeble made the following observations about how digital television will change the relationship audiences will have with television:

It's best to think of digital television as a kind of platform that can support various features, which may or may not be present in any viewer's home, and may be an integrated set or may be various linked components. Possible [f]eatures in a digital viewer's home: the ability to receive many channels; an interactive program guide; video on demand; the ability to receive new picture formats, including wide screen and high-definition signals; 5.1 channel surround sound; the ability to display high-definition ...; wide-screen display; the ability to run ... interactive TV applications; the ability to record and play back television on a hard-disk recorder (PVR); the ability to run sophisticated interactive TV applications; video downloaded to the TV from the Internet.¹⁰

Concerning the advantages for cable distributors Ms. Janet Yale, President and Chief Executive Officer, Canadian Cable Television Association, told the Committee that digital technology means:

... more capacity to carry and distribute Canadian programming services. That means more selection and more diversity for Canadian viewers. Throughout the last decade, the number of services offered to our customers has tripled. In 2001 alone, the industry introduced 40 to 60 digital channels. ... with new digital technology we can carry 10 to 12 new services for every old analog channel that we convert.¹¹

Moreover, as Dr. Akgun told the Committee:

Today, with the analog 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.¹²

All told, the main advantages cited by witnesses for the transition to digital technologies include: the ability by broadcasters to offer a better picture and sound, provide more programming choices, more flexible packages and new, non-programming options.

Needless to say, many points were also raised concerning the drawbacks and challenges of the transition to a fully digital Canadian broadcasting system. Indeed, many witnesses were of the view that this transition will create an uncertain environment for the Canadian broadcasting industry. For radio, these factors include: how digital radio is phased in; the cost of equipment; and copyright. For television, the key questions include: how conventional broadcasters will make the move to digital delivery without losing audiences; how digital television (DTV) will be phased in; and how pay and specialty services will be packaged and offered. Finally, for distributors, the main challenges will be standards for set-top boxes and who controls the revenue streams derived from new services, such as interactive television (iTV).

The next sections review what the Committee heard about these issues. Thereafter, proposed solutions are provided.

Economic Considerations

Most Canadians living in border cities can still receive over-the-air signals from United States, just as they did in the late 1940s and early 1950s before Canadian television was officially launched. Beginning in the late 1990s, many American broadcasters started to deliver high-definition television signals over the air. According to witnesses, this reality means that Canadian broadcasters must follow suit. As Mr. Glenn O'Farrell, President and Chief Executive Officer, Canadian Association of Broadcasters, explained:

Canadians ... have access to digital television service, for example, coming to them from across the border. It's a reality that we have to face as an industry. Were it not for our geographic proximity, we may not be looking at transition to digital in the same way. But we have to be cognizant of the fact that the digital signals that will cross the border from American sources will find viewers in Canadian homes, and they will go out and buy those sets simply because of the advantages of the new technology in large part, but the take-up will be there.¹³

Comparable challenges exist for radio broadcasters as they make the transition to Digital Audio Broadcasting (DAB). As Mr. Duff Roman told the Committee:

... 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 ... digital audio broadcasting.¹⁴

But these transitions will be expensive. By way of example, Canadian cable companies have been working on the transition to a digital infrastructure for about a decade. As Ms. Janet Yale told the Committee:

Over the past decade we've changed a great deal. We've made the transition from analog to digital technology and are now on the cutting edge of technological innovation, something that benefits all Canadians. Two-way interactive broadband networks that our companies are building are the engine that will drive the government's innovation agenda. We've built one of the most extensive and advanced cable distribution infrastructures in the world and over the past five years our companies have invested more than $5 billion in network upgrades, technology, and infrastructure.¹⁵

For television, Mr. Kenneth Goldstein, Executive Vice-President and Chief Strategy Officer, CanWest Global Communications Corp., told the Committee that: "Moving to digital will require a very significant investment. For conventional television [including the CBC] the cost of building digital transmitters has been estimated to be up to $390 million."¹⁶

Several members were concerned about the economic implications of the transition on consumers. On this point, Mr. Gérald Chouinard, Program Manager, Rural and Remote Broadband Access, Communications Research Centre Canada, has this to say about digital radio:

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.¹⁷

Furthermore, Mr. Roman told the Committee that one retailer:

... 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. ¹⁸

As for television, Mr. Kenneth Goldstein had this to say:

The consumer is the key, and in terms of being able to respond or wanting to respond, in terms of the price of the equipment falling to affordable levels, there are a number of things that go into this. We often say in this business it's a chicken and an egg issue. Will somebody buy the new device, and therefore there'll be enough people to make the transmission justifiable; will somebody put out the transmission so enough people will be interested in buying the device?

There is a history of consumer electronics falling in price. The fact is, if you adjust for inflation, you can buy a computer or a colour television set or a VCR today all for less money than a radio cost in 1936. But these things take time. The VCR took about 15 years until it was more or less ubiquitous.¹⁹

Seen from another perspective, Mr. David Keeble reminded the Committee that new technologies tend to go through four phases before full adoption by consumers:

1. The invention phase, in which a potentially successful concept is realized in many forms, all incompatible with each other, all vying to become "the standard". Some inventions never graduate from this phase.

2. Those that do graduate become standardized sufficiently for content producers and consumers to have confidence they will last, at which point they begin to acquire the technology. Early adopters want the new thing right away and are prepared to pay high prices and endure teething pains. The early adoption phase is characterized by slowly growing penetration of the technology in the population.

3. Middle adopters wait for volume to grow, prices to shrink, and the technology to settle down. When they are ready to adopt, the curves can grow steeply, by 10% of the population or more every year, so that the middle adoption phase lasts about six or seven years, while penetration grows from about 5% or 10% to more than half the population.

4. Late adopters only enter the market in the consolidation phase, when the new technology has completely replaced the old one, e.g. AM-only radios or LPs are simply no longer available for purchase. They push penetration more slowly up to the natural limit for that technology.²⁰

In other words, the economic impact on Canadian consumers during the digital transition will be felt most by those who adopt the technologies during the early stages of the transition. Thereafter, costs for consumers will, by necessity, drop in order to entice more of the population to adopt these new broadcasting technologies.

Policy Considerations

The Committee notes that running in parallel with economic concerns is the question of how Canada's broadcasting policy objectives can be upheld through the digital transition, and beyond. According to the CAB:

The goals used to guide the development of public policy will not change because of the introduction of digital technology. Public policy will continue to benefit from helping over-the-air television broadcasters maintain and develop the businesses that make the greatest policy contribution. Over-the-air television broadcasters play a unique role in the Canadian broadcasting system: They make the greatest contribution to Canadian viewing; they provide free local service.²¹

A second policy consideration is how Canada's transition to digital broadcasting will impact the production and distribution of Canadian content. As Mr. David Keeble told the Committee:

The digital transition ... will profoundly alter how to use television shelf space to encourage the viewing of Canadian programs. "Scheduling" may no longer be as significant. Currently, regulation encourages the viewing of Canadian content by setting exhibition requirements, including special requirements for exhibition in "prime time." Broadcasters must provide so much Canadian content on a percentage basis, every week; they have a percentage they must meet in prime time; and now a percentage of this must be "priority programming".

In the transition, to the extent that viewers seek and download individual programs — whether from broadcasters via a PVR or over the Internet — the use of exhibition quotas will have less impact, so regulation of prime time exhibition will also have less impact.²²

Similarly, the CBC in its brief told the Committee that:

The broadcasting system in Canada has taken advantage of the rollout of new technologies. Many of these technological developments, such as the digitisation of content and delivery, require a complete review and transformation of the existing program production and delivery infrastructure. The associated financing and engineering requirements are being undertaken by Canadian broadcasters at the fastest possible speed, ensuring that sound and prudent business practices are respected.²³

Furthermore, according to the CAB:

If we approach the digital transition as simply a "spectrum-swapping" exercise, we may run the risk of losing sight of the underlying reason for the Canadian broadcasting system as we know it. For example, if radio or conventional television and specialty and pay services are not permitted to take advantage of the full potential of digital broadcasting and distribution in terms of ancillary revenue streams, then their ability to continue to support quality Canadian programs will have been compromised. Equally, we must remember that, if broadcasters are forced to vacate their analog signals too soon, the value of cross-promotion from analog to digital may be lost. Thus, any proposal for the digital transition must meet not only the test of being consumer-friendly, but also the test of being friendly to the continued investment in Canadian programs.²⁴

For these reasons, the CAB proposed the following policy principles for digital television:

As for pay and specialty services, the CAB suggested many of the same principles and noted that it would make more sense if there were a common standard for interactivity. This way, it will be less likely that smaller players will be squeezed out due to high costs.

But how is the digital transition to be managed by broadcasters and government in the coming years? In the past, the federal government set standards for radio and television reception to ensure that Canadians would be able to receive broadcast signals. As Mr. David Keeble told the Committee:

... we have a standard for over-the-air, but not for the other media by which viewers receive TV. Nine years ago, it might have been possible to create a single standard for Canada out of the various technologies that were on offer worldwide. ... However, the first satellite companies to offer services did not agree; difference with cable became an issue, and Industry Canada did not complete a process for general standardization. The result is a large installed base of non-interoperable set-top boxes, and duplicate digital program streams carrying the same services in order to feed these separate universes of non-interoperable boxes.²⁵

Thus, for reasons such as these, most of the new tuners for digital television (either built-in or in set-top boxes) are proprietary and/or incompatible with competing systems. Not only does this phenomenon risk alienating Canadian consumers, but it could also impede the public interest goals inherent in a smooth digital transition. This is why the CAB told the Committee that: "the Government must give serious consideration to establishing at least some minimum standards for DTV that will govern the new "tuners" that will accompany the roll-out of digital."²⁶ The Committee agrees with these points and notes that this is an important area for government action. As Mr. Keeble told the Committee:

The main missing feature of the Canadian policy model is outside the [CRTC]'s control, i.e. the lack of action on standards. This is a serious omission that may enable anti-competitive gatekeeping behaviour, such as has been seen in Europe for some time.

Since such behaviour could seriously damage the ability of program providers to create successful business models in the digital transition, it is fundamental to the success of the Canadian programming effort that additional policy direction address this issue.²⁷

A second consideration is copyright. Unlike analog, each copy of a program is identical to the original. This means that a television show copied from an over-the-air broadcaster can be copied repeatedly, or sent electronically to anyone, anywhere in the world. Evidence of this has already been seen with Napster and the many other peer-to-peer applications that can be found on the Internet. Consequently, copyright law will also need to be reformed (see Chapter 13).

A third issue is timing. In the United States, the digital roll-out was originally mandated by law for 2006 (although it is unlikely that this date will be met).²⁸ In September 1999, the U.S. Congressional Budget Office (CBO), a non-partisan Congressional agency, produced a report on the transition to digital television.²⁹ This report lists four preconditions for a successful transition to digital television:

1. The technology has to work as promised;

2. Digital broadcasts have to begin as early as possible in the transition period;

3. Digital broadcasts must be available on cable systems; and

4. Consumer demand must be there for the speedy adoption of the new technology.

Within the Canadian context the first question that must be addressed is whether a timetable for analog cut-off is necessary. According to Mr. Keeble:

At a guess, we should be in the "consolidation phase" of digital over-the-air by about 2012. If digital set-tops (to convert older analog sets) are inexpensive, we may see the end of analog over-the-air around 2017-2020. But we should not be too optimistic — AM radio is still with us, and has its uses.³⁰

As for the CRTC, to date, it has taken the position that a mandated transition deadline should not be imposed, for the following reasons:

There was ... broad acknowledgement that the Commission's preliminary proposal for a voluntary, market-driven transition model, without mandated deadlines, would be the most realistic and appropriate approach for Canada to adopt. The Canadian Association of Broadcasters (CAB) emphasized that "the DTV rollout should take place in stages, moving from the largest primary markets to secondary markets over a period of years". It added that, "the pace and degree of market acceptance in larger markets will determine when the DTV rollout can be extended to smaller markets." The Canadian Cable Television Association (CCTA) agreed with the CAB's view that the market-driven model proposed by the CRTC would be the most appropriate approach, and would be far preferable to "...earlier approaches in North America that assumed the abandonment of the analog spectrum."³¹

Furthermore:

Some concern was expressed about the difficult business decisions that confront small market broadcasters in their efforts to weigh accurately the benefits and costs of converting to DTV. Télé Inter-Rives Ltée, the licensee of CIMT-TV Rivière-du-Loup and owner of three other television stations in the Gaspé region of Quebec, proposed a delay in the DTV roll-out of between five and ten years in small markets.³²

Moreover, the CBC's "current programming priorities and limited resources do not permit the Corporation to pursue digital television programming activities in any substantive manner at this time."³³

Thus, given the amount of experimentation and innovation that is still required, the uncertainties about acceptance, the lack of a strong business model, and the need for a coherent public-policy framework, the arguments against a mandated transition deadline seem sensible for the time being.

That said, the CAB notes that at some point it will become necessary:

... to set a reasonable time frame for the full transfer from analog to digital, so that the advantages of reclaiming spectrum can also be realized. But setting those dates will not be a simple process. We must always remember that Canada's radio and television broadcasters operate in value chain continuums, and forcing them out of one part of the continuum before the new part is able to replace it fully could have the unintended effect of weakening Canadian programmers as they face increasing, and unregulated, non-Canadian competitors.³⁴

In short, it seems that the digital "transition" will not be easy for Canada's creators, broadcasters and distributors. The process will be expensive because of the need for to replace equipment, provide new services and the need to work out new arrangements among the different groups involved. Furthermore, a successful transition will require a well-thought-out plan, cooperation among the players, and a well-conceived plan on the part of government and the regulator. Additionally, the digital transition is taking place at a time when profits for Canada's broadcasters and distributors are in flux (see Chapter 8). This, in turn, calls into question how the billions of dollars required for the transition to a fully digital infrastructure will be raised.

C. Proposed Solutions

All told, witnesses were clear on several points. First no one knows exactly how much the digital transition will cost and, second, it is highly unlikely that anything is going to stop the transition from happening. A third point of agreement among witnesses was that the broadcasting system is going to go through an increasingly turbulent period as it attempts to deal with the challenges raised by the digital revolution. This is why all witnesses who spoke about the digital transition urged the Committee to ensure that the government be ready with a plan.

In a background paper for the Committee, Professor Richard Schultz also recognized the difficulties of the forthcoming transition. He stated:

It is ... not an exaggeration to argue that at no time has the CRTC faced such a degree of turbulence as it does today and will continue to do so for the foreseeable future. The significance of the changing environmental conditions for the operations and effectiveness of the CRTC in fulfilling its fundamental responsibilities should not be underestimated for they may challenge the basic efficacy of existing regulatory powers and ultimately the ability of the CRTC to exercise any effective power to "command and control" the broadcasting sector and the participants therein. Consequently, any effort to revise Canadian broadcasting policy that fails to incorporate a full understanding of the enormity of the potential power of environmental forces will be outdated as soon as the attempt is made.³⁵

The Committee recognizes that responding to the complexity of these challenges will not be an easy task. It notes that research provided to the Committee shows that countries worldwide have been struggling to find the right model that balances policy driven and "laissez-faire" approaches to the digital transition.³⁶ That said, in no case has a country allowed the market to totally drive the transition. Indeed, even in the United States, where the policy model is largely governed by a laissez-faire approach, the Federal Communications Commission has had to step in and insist that the industries involved cooperate to accelerate the transition.

That being said, the Committee is also aware that it would take just a few serious mistakes on the part of the regulator, broadcasters or distributors for the entire broadcasting industry to be thrown into economic turmoil. With this in mind, the Committee makes the following recommendations:

Digital Transition Policy Framework

In light of what it has heard, the Committee believes that government should play a central role in the coming years to ensure that a policy framework for the digital transition is developed in such a way that all stakeholders are equally and fairly involved. Accordingly:

Access

The Committee is of the view that the government and the CRTC will need to ensure that broadcast distributors do not devise gatekeeping mechanisms that prevent broadcasters from having fair and equal access to all digital viewers. For this reason:

Standards

The Committee recognizes that a complete absence of standards — particularly for digital television — will likely slow the adoption of certain digital technologies. With this in mind:

Such standards should include clear hardware and software standards (i.e., menuing) for all types of set-top boxes. Furthermore, such standards should ensure that Canadians have clear and easy access to Canadian programming options. Finally, the standards should be designed to maximize backwards compatibility, thereby reducing the premature obsolescence of consumer equipment.

Consumer Choice and Control

As noted in Chapter 8, the Committee recognizes that competition and consumer choice are implicit elements of Canada's broadcasting policy. Within the context of the digital transition, the Committee is concerned by the possibility that anti-competitive practices might impede the ability of Canada's broadcasters to create new programming, or to offer innovative non-programming services.

Such regulations should also allow all broadcasters — whether not-for-profit, public or private — the flexibility to respond to the preferences of viewers for particular features and services offered.

Regulatory Support

As noted in Chapter 9, the Committee is gravely concerned by the situation of local programming in the Canadian broadcasting system. It therefore sees it as essential that certain pre-existing regulatory conditions remain, at least for the duration of the digital transition. To this end:

It was noted in Chapter 8 that simultaneous substitution is a central means whereby Canadian broadcasters are able to maintain the value of the foreign programming they purchase. Simultaneous substitution also protects the value of the advertising for Canada's advertisers. By extension, this regulatory privilege enables Canada's broadcasters to cross-promote Canadian programming and to generate needed revenue to produce or purchase original Canadian programming. In light of these circumstances, the Committee sees it as essential that simultaneous substitution be preserved, at the very least, for the duration of the digital transition.

New Revenue Sources

As noted above, several witnesses pointed out that a major advantage of digital broadcasting will be the potential for new revenue sources derived from services such as:

The Committee is of the view that it is essential that all broadcasters (i.e., public, private, not-for-profit and community) and distributors be allowed to benefit fairly from these potential revenue streams. Therefore:

Privacy

The Committee sees the preservation of privacy rights as being central to the introduction of new broadcasting technologies and services. As such:

Measurement and Reporting

In a paper Mr. David Keeble prepared for the Committee he notes that there is a need to "develop objective measures of the effectiveness of the policy effort" for the digital transition and that the government must "put substantial effort into monitoring the impact of the digital transition." Furthermore, he notes that the digital transition will solve certain measurement problems:

For example, digital receivers can use software to store and upload viewing information from consenting homes; the signals can carry exact information on each title so that measurement of Canadian programming becomes easier, and so on. But it will require the concerted effort of many parties to bring this about, and the will to act from policy makers.³⁷

The Committee agrees with these observations. As noted repeatedly throughout this report, the Committee was frequently frustrated by the absence of proper measurement and reporting techniques. This is why Chapter 19 makes a number of recommendations concerning the need for improved measurement and reporting methods for the system as a whole. As for the digital transition, the Committee sees this as an ideal opportunity to embed certain measurement and reporting practices from the outset. To this end:

These techniques should include ways to appraise the impact of digital technologies on Canadian broadcasting policy objectives. For example, they should be able to tell us what impact PVR use is having on Canadian viewing, and the subsequent impact of any other measures — such as increased promotion for Canadian programs — that we undertake. Indeed, without such measures, the Committee is of the view that it will be very difficult to devise effective policies, not only for the digital transition, but for the Canadian broadcasting system as a whole.

Preservation

As noted in Chapter 10, Northern and Aboriginal witnesses told the Committee that they do not have the needed financial resources to digitize much of the historical footage of their peoples that they have accumulated over time. The Committee was also told on a number of site visits to broadcasters across Canada that the digitization of film and video archives is a costly undertaking. The Committee notes that in its June 1999 report, A Sense of Place — A Sense of Being, that it recommended "that the Department of Canadian Heritage take immediate action to obtain additional resources and to establish a fund dedicated to the preservation of items of national significance that are in danger of being lost through deterioration."³⁸ In keeping with the spirit of this recommendation:

Endnotes