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37th PARLIAMENT, 3rd SESSION

Standing Committee on Official Languages

EVIDENCE

CONTENTS

Tuesday, April 20, 2004

0905

The Chair (Hon. Don Boudria (Glengarry—Prescott—Russell, Lib.))

Mr. Michael Hennessy (Acting President, Canadian Cable Television Association)

Mr. Phil Lind (Vice Chairman, Rogers Communications Inc., Canadian Cable Television Association)

0910

Mr. Yves Mayrand (Vice-President, Corporate Affairs, Cogeco Inc., Canadian Cable Television Association)

0915

Mr. Michael Hennessy

The Chair

Mr. Benoît Sauvageau (Repentigny, BQ)

0920

Mr. Michael Hennessy

Mr. Phil Lind

Mr. Benoît Sauvageau

Mr. Phil Lind

Mr. Benoît Sauvageau

Mr. Phil Lind

Mr. Michael Hennessy

Mr. Benoît Sauvageau

0925

Mr. Michael Hennessy

The Chair

Mr. Yvon Godin (Acadie—Bathurst, NDP)

The Chair

Mr. Yvon Godin

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Phil Lind

The Chair

Mr. Yvon Godin

0930

Mr. Phil Lind

Mr. Yvon Godin

Mr. Phil Lind

Mr. Yvon Godin

Mr. Phil Lind

Mr. Yvon Godin

Mr. Phil Lind

Mr. Yvon Godin

Mr. Phil Lind

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

Mr. Michael Hennessy

0935

The Chair

Hon. Claude Drouin (Beauce, Lib.)

Mr. Yves Mayrand

0940

Hon. Claude Drouin

The Chair

Hon. Claude Drouin

Mr. Yves Mayrand

Hon. Claude Drouin

Mr. Yves Mayrand

Hon. Claude Drouin

The Chair

Mr. Yvon Godin

Mr. Phil Lind

0945

Mr. Yvon Godin

Mr. Michael Hennessy

Mr. Yvon Godin

Mr. Michael Hennessy

The Chair

Mr. Yves Mayrand

The Chair

Mr. Christian Jobin (Lévis-et-Chutes-de-la-Chaudière, Lib.)

Mr. Yves Mayrand

Mr. Christian Jobin

Mr. Yves Mayrand

0950

The Chair

Mr. Christian Jobin

Mr. Yves Mayrand

The Chair

Mr. Yvon Godin

0955

The Chair

Mr. Michael Hennessy

Mr. Yvon Godin

Mr. Michael Hennessy

The Chair

Mrs. Yolande Thibeault (Saint-Lambert, Lib.)

Mr. Yves Mayrand

Mrs. Yolande Thibeault

1000

Mr. Yves Mayrand

Mrs. Yolande Thibeault

Mr. Yves Mayrand

Mrs. Yolande Thibeault

Mr. Yves Mayrand

Mrs. Yolande Thibeault

The Chair

Mr. Yves Mayrand

The Chair

Mr. Yves Mayrand

The Chair

Mr. Yves Mayrand

Mr. Michael Hennessy

Mr. Yves Mayrand

The Chair

Hon. Claude Drouin

Mr. Michael Hennessy

The Chair

Mr. Michael Hennessy

1005

The Chair

Mr. Phil Lind

Mr. Michael Hennessy

The Chair

Mr. Michael Hennessy

Mr. Phil Lind

The Chair

1010

Hon. Claude Drouin

The Chair

Hon. Claude Drouin

Mr. Raymond Simard (Saint Boniface, Lib.)

The Chair

CANADA

Standing Committee on Official Languages

NUMBER 008

3rd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, April 20, 2004

[Recorded by Electronic Apparatus]

¿ (0905)

[Translation]

The Chair (Hon. Don Boudria (Glengarry—Prescott—Russell, Lib.)): I see we have a reduced quorum, which for those of you who don't already know, means that there are four members around the table, so we can now call the meeting to order.

[English]

Pursuant to Standing Order 108(3), we have today the study on the broadcasting and availability of the debates and proceedings of Parliament in both official languages.

[Translation]

Our guests this morning are Mr. Michael Hennessy, Acting President, Canadian Cable Television Association; Mr. Phil Lind, Rogers Communications Inc., my cable distributor; and Mr. Yves Mayrand, Vice-President Corporate Affairs, Cogeco Inc. So, I welcome the witnesses to our committee.

[English]

I wonder if you have an opening statement, Mr. Hennessy or Mr. Lind, and then we will ask our colleagues to intervene afterwards.

[Translation]

Mr. Michael Hennessy (Acting President, Canadian Cable Television Association): Thank you, Mr. Boudria. As you said, my name is Michael Hennessy and I am the Acting President of the Canadian Cable Television Association.

[English]

With me here today are, as you said, Phil Lind, vice-chair, Rogers Communications; and Monsieur Yves Mayrand, vice-president, corporate affairs for Cogeco Cable.

CCTA represents 83 companies, large and small, delivering various entertainment, Internet, and telecommunication services to more than 800 cable systems in over six million households in all regions of the country. The association and our industry members take pride in their leadership within the broadcasting system and now within the telecommunications sector. This industry has contributed to the growth of the Canadian broadcasting system and to the 100-plus channels available to Canadians today.

We still continue to deliver local content in the smallest communities across the country through over 200 community channels, investing nearly $80 million a year directly in these channels. CPAC, the cable public affairs channel, is just one of the cable industry's flagship initiatives.

The cable industry founded the cable television fund in 1994, under the direction of Mr. Lind, which later became the Canadian television fund. This $200-million-a-year program has really become a model for public and private partnerships. Last year, cable, as the largest private contributor to the fund, contributed $67.1 million of the $200 million for production of Canadian programming. Last year as well, the companies here today spent an additional $17.6 million directly between them through their separate production funds on specific genres of programming, from documentaries to children's programming.

Some of you and many of your colleagues may also have the opportunity to utilize the CCTA cable studio just across the street in the press building to tape a program or holiday message for your constituents.

Other initiatives have included cable in the classroom, where the industry, along with broadcast programming services, has spent over $5 million in the last eight years delivering hundreds of hours of copyright-cleared programming and commercial-free programming for schools. We also contribute to children's Internet and broadcast awareness through programs such as the Media Awareness Network.

Over the past three years the cable industry has invested over $6 billion in digital and broadband networks and services to help make us one of the most connected countries in the world. That expansion of broadband has allowed cable subscribers to gain access to high-speed Internet, some two million cable subscribers, as well as digital video services, and these are both now new sources of access to CPAC in both official languages.

These digital cable networks have expanded the number and diversity of cable channels available, allowing consumers a broader choice of services, including Canadian and international sources of news and public affairs.

Today, through our investments, Quebec francophones are among the best-served cable subscribers in terms of the number of specialty channels in their language per capita. This places them ahead of France, the Americans, and English Canadians.

But we are still in transition, and since capacity is constrained, demand for channels will exceed supply in the short term. In addition, competition from satellite, both legal and illegal, will make a transition particularly challenging in smaller communities across the country.

So it's in this context of the challenges facing the rollout of digital and the demand for new services that we are here today to address the issue of the availability of CPAC across Canada.

I'd now like to pass to Mr. Lind.

Mr. Phil Lind (Vice Chairman, Rogers Communications Inc., Canadian Cable Television Association): Thank you, Mr. Chairman.

As the first chair of CPAC, the cable public affairs channel, and as a current member of the CPAC board, I would like to express how proud we are of the cable industry's contribution to CPAC since its conception. In 1992, when the CBC declared that it could no longer afford to televise the House of Commons proceedings to Canadians, it was the cable industry that stepped up to form the consortium to welcome Canadians to their Parliament.

Since 1993, the cable industry has invested over $40 million in CPAC. In 2002, cable exclusively financed CPAC at the rate of more than $5.4 million a year. Following its most recent licence renewal, it will now increase its budget by 7¢ a subscriber, without a decrease in cable's continued contribution.

Over the years, CPAC has been a trailblazer with its now legendary uncut, unfiltered, full format, political and public affairs programming. Through our support, CPAC has continued to broaden its programming in both official languages from all parts of the country, and it is always commercial free.

We believe that the availability of advanced technologies, including second audio programming, SAP, and digital, has broadened and will continue to extend the reach of CPAC and other valuable services throughout Canada. The emergence and rapid growth of DTH, direct-to-home satellite services, has made available to every Canadian home, regardless of how remote, every specialty service, including all of the French language services only otherwise available in Quebec, to be broadcast all across this country. The cost of this technology has continued to decline, so it's affordable to virtually everyone who has a television set.

As well, the cable transition to digital is increasing its capacity to provide more Canadian and international programming services on a progressive basis. Today, over 20% of our cable subscribers subscribe to our digital service, and we expect that penetration to accelerate significantly.

Rogers carries CPAC on digital in both English and French in all of our larger systems in Ontario and New Brunswick. This is in addition to our broad distribution of CPAC on our basic cable service, which we've done since the early 1990s.

Yves.

¿ (0910)

[Translation]

Mr. Yves Mayrand (Vice-President, Corporate Affairs, Cogeco Inc., Canadian Cable Television Association): Thank you.

In May 2001 the Joint Standing Committee on Official Languages issued a report on the The Broadcasting and Availability of the Debates and Proceedings of Parliament in both Official Languages. In this report, the committee recommended the roll out of Second Audio Programming (SAP) technology, or as it is now known, Multi Television Sound (MTS), to make the proceedings of the House of Commons available to subscribers in both official languages.

The cable industry responded and took advantage of this new technology to provide a second audio feed to its customers. The cable industry spent approximately $2 million to integrate this technology in systems across the country.

Since September 2003, the cable industry and CPAC have been conducting an ongoing public awareness campaign to promote SAP technology. This campaign is intended both to raise subscriber awareness of the availability of SAP technology and to encourage its use.

To date, CPAC has spent approximately $55,000 on SAP technology for class 3 systems, the smallest cable networks, with another $35,000 pending completion of the program installation.

A promotional video, which was shown to this committee by CPAC during their appearance, was produced by CPAC in both English and French, and has been airing on CPAC since last fall. In addition, CCTA member cable companies have been airing these spots using the advertising avails within the US satellite services that are used to promote Canadian services and other community channels. We are committed to continuing this promotion.

In November 2001, the CRTC released Public Notice 2001-115. In that public notice, the CRTC laid out a regime under which CPAC would be distributed across the country starting in September 2002.

The CRTC requirements are now included in the CRTC's Broadcasting Distribution Regulations, in the exemption orders that apply to licence exempt BDUs, such as class 3 BDUs, and in the CRTC's Distribution Order 2002-1, which applies to CPAC's public affairs programming service.

In the February 2003 report, Role and Responsibilities of the CRTC in Developments in the Area of Official Languages in Canada, by the Joint Committee on Official Languages, it was recommended that the government issue a directive to the CRTC requiring all BDUs to distribute video and audio signals of the debates of Parliament via CPAC in both official languages, through amendments to the Broadcasting Distribution Regulations.

The Government of Canada provided a written response to the committee's report in August 2003, in which it reviewed the recommendations in detail.

We would also note that the government's report also recognized and reflected the conclusions about small system capacity and future digital capabilities that had been reached by the CRTC in their Public Notice 2001-115 mentioned above.

The CCTA respects the government's conclusions in these areas, which balance the public interest against the impact that a blanket distribution requirement would have on small cable systems with limited channel capacity and often even more limited financial resources to make the transition to digital. This is in a very competitive context, I might add, in which the black market for signal reception is growing, and access to CPAC's services is not available, including to black market users.

¿ (0915)

[English]

Mr. Michael Hennessy: The transition, then, to digital is key to ensuring that the Canadian broadcasting system remains competitive in an increasingly borderless world. As digital continues to grow, the system will ultimately be able to deliver to any Canadian anywhere in Canada not only abundant services in either official language, but also literally connections to thousands of services from around the world.

However, the real challenge of the transition to a fully digital world is converting existing analog channels to digital. This requires capital investments in addition to the $6 billion we have already invested, as well as a flexible regulatory environment that allows us to respond to consumer demand and to competition from satellite—both legal and illegal. Every analog channel we can convert today will mean that we'll have the opportunity to provide 10 to 12 new digital channels. This freed-up capacity means that adding more second language, local, or multicultural channels becomes much less of an issue as the transition progresses.

We're in a state of constant and successful growth when it comes to expanding our service offerings, including CPAC.

[Translation]

So, while we still have debates on how to allocate capacity today, these are short term and our investments are making this debate increasingly moot. Investments by cable have contributed to making the service the programming success it is today.

[English]

Investments in staff have increased ease of access in either official language, and investments in digital will provide even more opportunities to grow this service in the future.

Thank you for your time on this matter. We welcome the opportunity to discuss these areas further.

The Chair: Thank you very much to the three of you for your presentation, and thank you as well for your attendance at the committee this morning.

[Translation]

Mr. Sauvageau, you expressed an interest. The floor is yours.

Mr. Benoît Sauvageau (Repentigny, BQ): Hello, gentlemen. Welcome to the committee. This is a subject we've been studying for quite a while. There seems to be a great deal of difficulty in offering this service, this supposedly basic service, to all television viewers.

I have a small anecdote Mr. Jobin will recall. Approximately two or three weeks ago, we were on the other side of the street, in the CPAC studios, with another colleague. Dyane Adam was also there. We were waiting for our turn, and we wanted to listen to Ms. Adam, who was being interviewed by CPAC. However, we never got to listen to Ms. Adam in French, because she was being interpreted by a man, we saw Ms. Adam, and her voice was being translated by a man. CPAC employees came around with their devices so that we could get SAP, but we never got to listen to Ms. Adam in her own language, and we were in the CPAC studios, across the street. Mr. Jobin was there: he will be able to confirm or deny what I'm telling you. Apparently it was a small technical problem, but as you can imagine it's a bit strange. The same thing happened to Mr. Jobin: we could only hear him in English, and I suppose it was the same for me as well.

I have another anecdote. Yesterday, my friend Sébastien Gagnon, the member for Lac-Saint-Jean—Saguenay, had a question. He had advised the regional weeklies that he was going to ask a question, and that was on CPAC. In Lac-Saint-Jean, the anglophone population is not in the majority, it is not very significant in terms of numbers. However, it was impossible to hear Sébastien in French. In Lac-Saint-Jean, it was available only in English.

So, despite all the nice presentations this committee hears, in reality the situation is quite different. I heard your presentation, you said it could be difficult, specially for class 3 companies, to get both channels, given financial constraints, etc. I will therefore focus on class 1 and 2 companies.

On September 15, 2003, the government in its response to the committee stated:

However, the government did ask the CRTC to require that class 1 and 2 cable companies distribute CPAC on two separate video channels, one for each official language.

In a Library of Parliament report, we read:

However, at the time of writing, the CRTC had not yet directed class 1 and 2 cable undertakings to broadcast CPAC on two separate video channels.

So, there's no CRTC order.

Since September 15, 2003, have you made representations to class 1 and 2 cable companies, which are better off financially than class 3 companies, in order to have two channels, one in French and one in English, as proposed by the committee on September 15, and supported by government?

¿ (0920)

[English]

Mr. Michael Hennessy: Perhaps I could hand that to Mr. Lind. Rogers, as our largest member, covers the largest bilingual parts of the country.

Mr. Phil Lind: As I understand it, sir, the answer is yes. We have service in English and service in French on digital in two separate channels, one in English and one in French.

[Translation]

Mr. Benoît Sauvageau: So, approximately 91% of subscribers subscribe to class 1 and class 2 companies. You're telling us that this 91 to 92% of subscribers can get broadcasting either in English or in French, without using SAP. Is that correct?

[English]

Mr. Phil Lind: In all the class one systems, yes, you can obtain CPAC on the digital in either English or French, depending. For the other service, you go to SAP. In digital you get English and French.

[Translation]

Mr. Benoît Sauvageau: On two different channels?

[English]

Mr. Phil Lind: In different channels.

It's in all our class one systems. There are a few class two systems that don't have this as yet, but all of our class one systems everywhere have it.

Mr. Michael Hennessy: That's in Ontario and New Brunswick.

[Translation]

Mr. Benoît Sauvageau: Earlier on, you said—and you're absolutely right—that when it comes to the black market, when people are pirating the signal, you cannot expect anything from people who commit illegal acts. According to you, and you are in the industry, what percentage of people get the signal illegally by pirating it?

I'll tell you why I ask this question. Class 3 enterprises serve 8% of the population that may not have access to SAP, because 8% of people subscribe to the smallest cable distributors, if I'm not mistaken. Can you give us an approximation, because there are probably no official figures, of the percentage of people who are pirating the signals? Is it 8%, 16 %? Do you know?

¿ (0925)

[English]

Mr. Michael Hennessy: Our estimates of a couple of years ago put the number at 750,000. That's increasing. So you're really talking about a percentage, 8%, fairly well the same as the small class three system. Nobody has done a survey over the last couple of years, but we see the number of dishes growing. Perhaps 8% of Canadians have now abandoned the Canadian system so they do not receive their other service.

At the same time, arguably, any Canadian, even those 8% served by small class three systems, no matter where they are in Canada, if they wish to, could receive every service available to any subscriber in Quebec through a legal Canadian satellite service.

[Translation]

The Chair: Your time is up. Perhaps we can come back to this.

[English]

There's no other name on the list, so I'll ask a question.

Okay, Monsieur Godin, immediately after, then.

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): I didn't know we were giving away our time.

The Chair: Go ahead then, Mr. Godin.

Mr. Yvon Godin: No, you can go ahead.

[English]

The Chair: My question was about something you said earlier.

When you mentioned, Mr. Lind, that all of the class one systems had the two languages on digital.... Did I understand correctly? Did all of them have the two channels, as Rogers does, because I know it does on analog as well?

Mr. Phil Lind: Two separate channels?

The Chair: Yes.

Mr. Phil Lind: No. One channel is in the predominant language and then SAP—

The Chair: Okay, but some of them have actually two independent channels, without using SAP, completely on the analog system?

Mr. Phil Lind: I don't...

The Chair: For instance, don't we have that in Ottawa?

Mr. Phil Lind: No, we used to.

The Chair: I see. So you have to use the SAP in order to access it.

Mr. Phil Lind: Right, but then on digital we have two separate channels.

The Chair: Yes, for the digital users. I see.

Mr. Phil Lind: You see, as Mike said, for every analog channel that's liberated, we can make 10 digital channels for it. So we want to cut down on the analog, which in turn raises the digital number.

The Chair: If I don't ask this question, Senator Jean-Robert Gauthier will be really angry at me, and I don't want that very much. And because it's a good point as well, Senator Gauthier and many others too, for that matter, have asked about the capacity of obtaining the subtitles, in real time, in both languages.

For the hearing impaired, there are some challenges in that regard because what's available in one language is not always available in the other. It's quite obvious when you watch both you see that there's a different quality being offered in two languages, either through the visuals, which is sometimes the way it's done--in other words, sign language--or by way of the subtitle. Is there any effort to ensure that there's some uniformity in which that is offered to Canadians who have a hearing impairment?

Perhaps I should have asked that question to Madam Watson the other day, but—

Mr. Phil Lind: Actually, I'm sorry, sir. I think you have to ask the network what it...because here today we're just receivers of whatever service they give us.

The Chair: Fair enough.

Monsieur Godin.

[Translation]

Mr. Yvon Godin: Thank you for appearing before the committee. I think you have to look at things in a positive light. We asked you to come before the committee because people are interested in listening to parliamentary deliberations on TV; especially in the next little while, I think it will be very interesting to listen to committees.

This gives rise to a lot of questions in the ridings. For instance, in my region, in Bathurst, I don't think we even have access to digital television.

Do we have access to digital television in Bathurst?

¿ (0930)

[English]

Mr. Phil Lind: Yes, sir.

[Translation]

Mr. Yvon Godin: I can assure you that we only get CPAC in one language and then we are forced to use SAP to have access to the second language. Contrary to what you've just stated, we don't get both. What you've just told the committee, Mr. Lind, is that everywhere there is digital service—unless I'm mistaken—there are two CPAC channels, one for each official language. Is that what you're saying?

[English]

Mr. Phil Lind: Yes. In our class one systems like the one in Bathurst, for example, we have CPAC on channel 27. It's in English and you can SAP it to French, but then on digital the English is on channel 93 and in French it's on channel 94.

[Translation]

Mr. Yvon Godin: Perhaps you can explain something to me. If there is digital TV in Bathurst, do people have to pay more to have access to it? Is it digital or analog?

[English]

Mr. Phil Lind: They have to get the digital box and then they get all the digital services. This has been a transition; this is the transition the cable industry is going through right now, from analog to digital. If people have a digital box, to get more channels.... In other words, years ago you just had 12 channels, and then we went to 36 channels, and you had to have a box to get the other channels. Now we're at the end of our analog, so in order to get digital you have to get a box to be able to access all the digital channels.

Mr. Yvon Godin: What happens, then, if in my case I have Super Écran--Super Écran 1, Super Écran 2, Super Écran 3, Super Écran 4--and I get that box, and Super Écran is digital? I'm still on 27 for CPAC and I don't get the CPAC English channel.

Mr. Phil Lind: I don't know how Super Écran is distributed, but I know that if you have the digital—

Mr. Yvon Godin: It's a box and it comes from Rogers; Rogers is in Bathurst.

The problem I have is, how do you explain things to a woman who is 85 years old and living alone at home? I cannot go to every house to do a SAP for them. I'm telling you, I've been getting bombarded with phone calls ever since CPAC was switched from “floor” to French in that community. Now none of the anglophones in Bathurst get CPAC in English; they get the picture but they don't get the audio.

Mr. Phil Lind: Well, if they have digital now, they get it in English and they get it in French, channel 93 and channel.... We can fly there today and see.

Mr. Yvon Godin: Well, let's fly there; I'd like to resolve that one.

I even returned a television because of CPAC.

The Chair: Mr. Godin has a very famous case of returning a TV. It's the talk of the town.

Mr. Yvon Godin: Oh, you heard about it, right? The television was a Sylvania. It was a good TV, I think, but it didn't have sound.

On a serious note, though, you can see that people still buy TVs. Right now we could go to a store and buy a brand-new TV, but SAP would not be not on it. Surely, in our country of two official languages...where people want the services it creates a problem. It surely creates a problem in Bathurst now for all the people who don't have SAP, particularly the anglophones who want to listen to our Parliament. That's why it's so important.

Now, if it's analog the people have, what will the cost be to introduce another channel--if it's analog?

Mr. Michael Hennessy: If I may, I'll answer. The cost is the loss to the system of 10 to 14 new services we could have added, because you can't convert that channel to digital now. We're less competitive with ExpressVu, we're less competitive with Star Choice, and we're less competitive with the people who steal our service and deliver no services to Canadians. That's the fundamental cost; that is the trade-off.

Clearly, we are in a transition today. I think we are moving quite quickly to an environment where everything is digital, just as it is in satellite today. If we look at this over time, we now have a system where... agreed, the SAP technology only works with stereo television sets, but virtually all new sets today are stereo.

CPAC is now available through broadband in both English and French, and there are 5 million telephone and cable customers who have broadband service. Every service in Quebec is now available through Canadian satellite services to every Canadian no matter where they live, something that was unthinkable 10 years ago. Every service in Quebec is now available.

There are problems, but every year the penetration of services in both languages gets better. We have to compete. Some services would, where they're capacity-constrained, actually have to pull off a channel--it might be a popular American channel, for instance--in order to have two analog channels.

We're faced with obligations from the CRTC to carry new high-definition channels locally even though right now they're just the same signal. There are nine paragraph 9(1)(h) other priority language services like APTN and TVA in other parts of Canada.

We have a huge number of obligations and a customer base that, because of modern technology, is starting to reject the Canadian system because it's not responsive overall to their demand. That's our problem; that's our cost, the loss of customers.

¿ (0935)

[Translation]

The Chair: We'll get back to it, if that's all right, Mr. Godin, because we've really gone over your allotted time.

The next question is from Mr. Drouin.

Hon. Claude Drouin (Beauce, Lib.): Thank you, Mr. Chairman. I would also like to welcome you to this committee.

I have two small questions. The first one has to do with the introductory comments. Somebody stated at the beginning that there were occasional problems with the service, in other words, people would be speaking in French and it would be rebroadcast in English. How do you explain that? Is it due to cable, or is there a problem within CPAC? I would like to understand this point.

I will get back to Mr. Mayrand for my second question.

Mr. Yves Mayrand: It's difficult to say what may have happened at a particular point on a given network. I'll just give you a little background about how our industry was first established. Initially, cable was strictly analog. There was no digital distribution, there was no digital broadcasting, and compared to today's standards, there were very few services. Mainly, there was no competition. Redistribution was strictly done via cable or through the use of “rabbit ears”.

So in the industry, we have inherited—and that's certainly the case for Cogeco—a whole series of networks that have been set up in that way, that are analog, and have a given capacity. And over the last 10 or 12 years, we've taken on the challenge of dealing with these networks, different networks with different designs, different capacities, different local services and different quantities; we had to modernize, convert them if possible to digital, and try to connect them as much as possible to the smaller networks, all of this in a competitive context with satellite distribution attracting clients. Satellite systems, however, are fully digital and have a large distribution capacity. So, this is a major challenge, and we are trying to modernize the system as quickly as possible, I assure you, using all of our energy and all available capital.

Essentially, for Cogeco, digitalization technically speaking is our number one priority because we are already in a digital era, and analog technologies are a thing of the past. We have inherited this past. We have to make do during this transition period, but we are already in a fully digital era.

Therefore, any measure which will require a highly inefficient use of capacity on small and disparate networks, particularly those that are not interconnected, will be very punishing to our industry. Why is that so? Because this would replace a dozen or so other services which could be offered digitally. It makes the local cable network, in your respective ridings, less competitive than satellite services and it antagonizes cable service subscribers. It's also an incentive for them to think about getting an illegal satellite dish in order to get American satellite signals, which is even worse, because in that case they don't get CPAC; you can't get it in any language on an illegal satellite dish. And I can assure you that there are many illegal satellite dishes. We did an official check two years ago in our territories in Quebec and in Ontario: the level was quite high in Ontario and it continues to increase.

We are about to redo a study with specific data for southern Ontario, where the problem is far more serious than the figures we discussed earlier would have us believe; the figures are far higher than the national average. Apparently, approximately 20% of households are disconnected from the Canadian broadcasting system, completely disconnected.

So, that is the problem. We are trying to make the transition to digital as fast as we can, in this competitive environment, with legal competition from Canadian satellite services and illegal competition due to the illegal reception of Canadian and American signals. I can assure you that Cogeco is digitizing our large networks and there is a digital channel for CPAC in the minority language. With respect to the other networks which are waiting to be digitized, and competition is forcing us to digitize as soon as possible, we use SAP, which I admit, can cause tuning problems, information problems, temporary and local problems on any given network.

I don't know if I'm giving you a good enough overview of the situation so that you can understand our problem.

¿ (0940)

Hon. Claude Drouin: Thank you.

My second question, Mr. Chairman—

The Chair: It will be your last question, because your time is running out.

Hon. Claude Drouin: Yes.

We understand Cogeco's problem with respect to the integration of small networks in analog areas; what is your percentage of digital services?

Mr. Yves Mayrand: I think the system is about 25% digital now. The rate of digital penetration is comparatively higher for us in Quebec than in Ontario. Things may evolve differently in the years to come, but we are, naturally enough, trying to increase the level of digital penetration as fast as we can and for as many networks as possible.

Hon. Claude Drouin: And in the Beauce region, do you have some idea?

Mr. Yves Mayrand: I would have to get back to you with a precise figure for Saint-Georges-de-Beauce. It would be a pleasure.

Hon. Claude Drouin: I would appreciate that.

The Chair: Thank you very much.

Mr. Godin, it's already your turn for a second time.

Mr. Yvon Godin: Thank you, Mr. Chairman.

This is what happens when there is a 50-50 split between anglophones and francophones. It doesn't matter who gets the service first, because the other one will have a problem. The problem is that they would be interested in listening to Parliamentary deliberations. This is why I'm belabouring the point. This is really causing a problem for us, a real problem.

We just called Rogers in Bathurst and asked them, for instance, if digital services were available. They said it depended on your address in Bathurst. So, the service isn't available everywhere in Bathurst. This is what Rogers in Bathurst just told us. That's one thing. They don't know what percentage of people have access to digital service today in Bathurst either. This is the information I just received from their office.

Let's take an example. If people in Bathurst decided that they were not interested in listening to, say, channel 14, an American channel, would it be possible to eliminate it and to replace it with CPAC?

[English]

Mr. Phil Lind: No. We'd be going back.

Again, I think Yves has stated the case very well. We are an evolving medium. We are in the process of change right now. More and more people are going to get digital, and that's the way it's going to be. That's how television is going to evolve, in cable television. So it would be crazy for us...

We couldn't do it anyway. Under the CRTC, we have to give certain channels. We can never take them off—

¿ (0945)

Mr. Yvon Godin: This is very important. Let's say the CRTC was to tell us, yes, because in Canada there are two officials languages, we'll make something special. We will allow cable television to cancel one American channel, which is not listened to in one area. We will allow you to do it.

I mean, I am at a point where I could tell people right now, “Look, if you don't get it, just go get a dish and go digital directly. You don't need a special box.” I don't think you want me to do that promotion, but I am at that point because I have no answer for those people. People want to listen to—

Mr. Michael Hennessy: There are always questions of balance here. I think if you did that you would unnecessarily outrage the majority of our customers. If you pulled an American channel for CPAC, you would outrage them, and you would contribute even more to the flow of Canadians giving up on the Canadian system.

I think that's a reality we have to address. And you would damage us as businesses.

Mr. Yvon Godin: No, I'm sorry, I don't think you understand the reality here. The reality is that the people here in our country want to listen to their Parliament, and it's important that it be available.

[Translation]

Mr. Michael Hennessy: I understand what you're saying.

The Chair: One last time.

[English]

Sorry, Mr. Hennessy, go ahead.

[Translation]

Did you want to add anything?

Mr. Yves Mayrand: If you will, Mr. Godin, I think that we agree with you when you say that it's important for Canadians to have access to basic distribution services such as CPAC, and in the case of CPAC, in both official languages. We agree on that objective.

What we are saying is that you have to do it within the framework of the technological transition which is underway. If you backtrack, other people would be displeased. I don't have to tell you that when people are unhappy, they don't only call you, but our call centres as well, they jam our phone lines, and they complaint to the CRTC.

There is nothing worse than change which has a domino effect. People are unhappy and in fact what happens is that they have one more reason to vote with their feet and to go for illegal satellite signals. That is basically what we're trying to avoid.

The Chair: We'll get back to that later. Once again, there are other members who would like to speak. It's now Mr. Jobin's turn.

Mr. Jobin, go ahead.

Mr. Christian Jobin (Lévis-et-Chutes-de-la-Chaudière, Lib.): When there was talk about taking the CBC's Hockey Night in Canada off the air, there was a huge outcry from people. We realized that many people in Canada did not even have cable and received their television service through an ordinary antenna. Many people may subscribe to ordinary cable services, but it may very well take several years before they convert to digital service. Often, these are elderly people who want to listen to their television and we are depriving them of a service that is important to them. Since they are ordinary cable subscribers, the solution being offered to them is the SAP service.

I am wondering if there are any other technologies in addition to the SAP solution that exist in Canada or elsewhere in the world that seniors may find easier to use. How much would these other technologies cost? Have you looked into ascertaining whether or not there are any other solutions? Indeed, this technology appears to be complicated to use.

Mr. Yves Mayrand: I will try to answer your question. I think that you are referring to people who are connected to a distribution service. I do not think that you were talking about people who have “rabbit ears” and who are receiving hertzian signals.

Mr. Christian Jobin: No. But we did in fact realize that there were more of these people than we originally thought. Because they went back to watching Hockey Night in Canada with regular sets.

Mr. Yves Mayrand: That's it. So those households that elect to receive hertzian signals using “rabbit ears” obviously do not have the cable channels or the satellite channels provided by satellite, cable or microwave services.

If you are referring to subscribers, namely those clients who have a distribution service, in the case of cable, you're talking about people who have basic service. In all of the networks that we have in our company, we provide basic services in compliance with the CRTC distribution requirements, including CPAC.

However, when you're talking about technological solutions that enable us to provide better service, there's not a very wide range of different solutions. Indeed, the solutions are discovered, explored and refined on an ongoing basis by organizations specializing in broadband network research, such as CableLabs. As far as cable television is concerned, the best solution for this problem and for all kinds of other distribution problems is to have fully digital broadband networks. The only certainty, and it is very important that you understand this, is that we would be shooting ourselves in the foot if we were to focus on reusing an old distribution mode, namely analog distribution, because we would be depriving ourselves of the technological progress currently being adopted by the entire world.

So we are going through a bit of a tough time because we need to make the transition. All is not perfect. There are some minor events, things that are more difficult to provide in one location or another because the quantity of local signals is not the same everywhere you go. This is a complicated equation, but we do need to resolve it. The quicker we are able to do this, the quicker we will be able to put ourselves in a fully digital cable environment, as is currently the case with satellite and microwave distribution. When this happens, everybody will be in a better situation.

I do not think that there is any miracle or exceptional technological solution with respect to cable broadband networks other than distribution and upcoming improvements, such as switched distribution.

¿ (0950)

The Chair: Do you have another question? Go ahead.

Mr. Christian Jobin: According to your forecasts for making the transition from analog to digital, how much time will it take to provide service to nearly all citizens? Until this happens, we will be stuck with the SAP system in most cases.

Mr. Yves Mayrand: I think that every company has various forecasts that it tries to achieve to the best of its ability. I cannot say that there is an exact timeframe, but everyone is certainly hoping that we will be fully digital well before the end of the decade. We are currently looking at various distribution scenarios that are exclusively digital, and the key aspect is the cost of the terminals in the subscribers' homes, which is declining. There are some less expensive options that have just come out on the market. So we are doing some modeling. There are all kinds of considerations that need to be made in choosing the next generation of digital decoders, and they are complicated. I do not think that we could look at each and every one of them today.

But it is clear that we will use every opportunity that we have to become fully digital on each of our networks, obviously starting with the larger networks and then moving on to the smaller ones, and as quickly as possible. This is why we are hoping that we will have to overcome as few practical or regulatory hurdles as possible in order to make this transition quickly.

The Chair: Thank you very much.

Mr. Godin, you still have one question remaining. Go ahead.

Mr. Yvon Godin: Yes, Mr. Chairman. I would like to thank you for your kindness and generosity.

Let's go back to CPAC. I may understand what you're saying, but I find it difficult when you talk about transition, technological change, etc. We are always undergoing technological transition. Our problem is simple: if I want to watch CTV, CBC, Radio-Canada or TVA, I know where I'm going: I can listen to a program in English or in French. New Brunswick, however, is the only officially bilingual province in Canada. So it's not only a matter of seeing Canada present its image. I would like to see it more, and that is why Senator Gauthier is tabling a motion. Mr. Boudria will be presenting a bill in the House of Commons this Thursday, I believe. However, in New Brunswick, we are not asking CTV, ATV, Radio-Canada or TVA to translate their television channel. We are asking that CPAC, Canada's parliamentary channel, be available in both languages. It is totally unacceptable that, in 2004, with the technology we have today, the people in Bathurst are not able to listen to the work done by the Government of Canada and the House of Commons.

My dear Mr. Hennessy, I can tell you that the people living in Bathurst are prepared to send—

¿ (0955)

[English]

They will get it to fly, one channel of the Americans, and they will not leave Rogers for that. But it's serious.

The Chair: We invite you to react.

Mr. Michael Hennessy: The problem there is that the risk at the end of the day is all ours.

To begin with, we are in a competitive environment, and one of the things that arises in a competitive environment is that there is choice.

Mr. Yvon Godin: There's no choice for language. There are two official languages here.

Mr. Michael Hennessy: You can absolutely guarantee any Canadian now, if they elect to go to satellite—if they go to ExpressVu or Star Choice—that they can get every service, including CPAC, in either official language. Every Canadian now, through the competitive market, has the choice to get everything that is offered in Quebec and vice versa anywhere anybody lives in this country. So the issue of access is no longer an issue.

We have a transitional problem. If our customers find that because of that they're not satisfied with our service, then we lose our customers. We are losing our customers today primarily to the U.S. market because we're restricted in what we can offer them, but that's another story, another committee.

If you think about what we have done in terms of the investments we as an industry put into making CPAC happen in the first place, what we continue to put in every year, what we've added with the new rate increase, what we've done with the SAP technology, what we have done with the high-speed Internet, and what we are now doing with the digital transition, we have contributed significant amounts out of our pockets to make this service a success. It's now available in either official language to every Canadian through the competitive market structure, and increasingly available in many forms through our $6 billion—so far—investment in new technology.

[Translation]

The Chair: Ms. Thibault, you can ask the next question.

Mrs. Yolande Thibeault (Saint-Lambert, Lib.): Thank you, Mr. Chairman.

Good morning, gentlemen. I need some clarification. If I want to receive service in my home that is not analog, if I want to get access to the new technology and I am a subscriber of Vidéotron's basic service, do I have to pay an additional cost, at that point, to get digital service?

Mr. Yves Mayrand: It's difficult to speak on behalf of Vidéotron because this company is not a member of our association and it is not here. I can, however, provide you with a general answer about digital service on cable television, the digital platform, otherwise known as the access door, a box. Every company provides boxes. In our case, you can buy it from us or you can also rent it.

So, if your question is as follows: Is the cost zero? I think that the cost with respect to the box is not generally zero, although there are all kinds of promotions to encourage people to get a digital decoder. I can tell you that you'll be seeing more and more promotions, because the industry is trying to push for digital penetration. So there's a platform. Once you have the platform, you have access to all of the basic digital programming, and that includes CPAC.

Mrs. Yolande Thibeault: I understand your point of view. I have Rogers here, in Ottawa, I have the basic service. What concerns me is that, if I recall correctly, according to the CRTC requirements, the CPAC channel has to be provided as part of basic service. What you are saying is that, if I am to get digital service at home, I have to pay an additional cost, one way or the other. When you get right down to it, that is what you are telling me.

À (1000)

Mr. Yves Mayrand: I am just talking about the box. This is the decoder-receiver.

Mrs. Yolande Thibeault: So you're telling me that there will not be any additional monthly costs, for example?

Mr. Yves Mayrand: If your question is whether or not there will be subscriber charges for a basic service, the answer is that there is a cost for any distribution service.

Mrs. Yolande Thibeault: Will there be additional monthly charges? As we speak, do most companies charge an additional monthly fee to have this digital service?

Mr. Yves Mayrand: Regardless of whether we are providing basic service through the analog or digital network, we are governed by a CRTC regulation that states that basic service includes all of the fundamental aspects of the broadcast system that must be provided as part of the basic service. That includes a segment that is provided for one basic rate. Regardless of whether your basic service is digital or analog—at any rate, that is certainly the case with Cogeco—you have basic costs. You have all of the basic services for the same price.

Mrs. Yolande Thibeault: The same price?

The Chair: I think it is important that we all understand this. Would you please repeat what you said? Regardless of whether or not the service is digital or analog, it's the same price for the basic service, except of course for the costs associated with purchasing or renting the little box. Is that the case or not?

Mr. Yves Mayrand: Basically, the difference lies in the cost of the box, whether you buy it or rent it.

The Chair: But once you have purchased the box, as is the case when you have purchased a new television in order to obtain SAP, if that's the case, after you have purchased the equipment, you have basic service for the same price, be it digital or analog.

Mr. Yves Mayrand: I do indeed feel that that is the case.

The Chair: Is that the case for most of your members, is that in fact what you are saying?

Mr. Yves Mayrand: I do indeed think that that is the case.

[English]

I don't know if you want to comment, Michael, on whether the differences of rate between the analog and the digital—

Mr. Michael Hennessy: Nobody is charging extra for that service.

[Translation]

Mr. Yves Mayrand: That being said, in addition to the basic service, the subscriber can, for an additional fee, have access to all kinds of additional services.

The Chair: Mr. Drouin, you have one final question before we conclude.

Hon. Claude Drouin: Thank you, Mr. Chairman. I would like to ask a question along the same lines as the one asked by my colleague, Christian Jobin. You said that by 2010 at the latest, you want to be able to provide the service. In your presentation, you alluded to the fact that there was an illegal service that had been established and that this was most prevalent in southern Ontario. This is one more reason for accelerating the process. Indeed, you have reduced your costs and therefore you are more attractive and you are more accessible in all of the regions. I think therefore that it is in the interest of companies to accelerate the development of digital service everywhere.

Of course, there are costs involved and the company is not there to lose money. But at the same time, it is advantageous for the company to do this because there will be more people who are going to want to subscribe to services at a lower cost. This is more of a comment.

[English]

Mr. Michael Hennessy: It's worth just putting perhaps one number on the table to give a sense of what the ultimate cost of that transition is.

If you were to say that tomorrow we will give everybody a box for every television they have and make everybody digital who doesn't have it today, the cost for the cheapest box—a box that couldn't do high-definition television, couldn't do video on demand, that could just allow you to have digital—would be $1.8 billion. That's the cheapest. That's a lot of due revenues you would need to cover a $1.8 billion cost.

We have been subsidizing the box. The satellite people subsidize the box. That's why we're pushing out the service. And as Phil alluded to, some of the largest systems are now looking at fully duplicating the services they have, which is I think the case in Vidéotron: you can either get everything on digital or everything on analog, certainly in the Montreal area.

The Chair: Thank you.

There's one last question from me. Would I be correct in saying--I'm not trying to put words in people's mouths here--that the bill to toughen up the penalties on illegal satellite reception very much affects your availability to make investments of any kind, presumably investments that deal with this issue as well?

Mr. Michael Hennessy: Absolutely. It's the most damaging competitive force we face right now. I think it's totally undermining the Canadian broadcasting system because we're creating a whole generation of people who have no respect for the rights that the broadcasters in this country have acquired to help carry their obligations to make Canadian programming.

À (1005)

The Chair: In my previous incarnation I was government House leader, and I remember when that legislation was before us, and I personally was pushing it. Where is it now? It's a funny thing that a parliamentarian should ask industry where a bill is, but that's the way it is.

Mr. Phil Lind: Bill C-2 may or may not make it in this session. I think there are other bills ahead of it.

Mr. Michael Hennessy: It's with the industry committee.

The Chair: You're telling us that there could be as many as one million illegal subscribers of that service. Did I hear that correctly?

Mr. Michael Hennessy: Our last estimate two years ago was 750,000. But as Mr. Mayrand pointed out, some of the studies they are doing in southern Ontario indicate that in some locations that could be as high as 20% of the customers along the border.

Mr. Phil Lind: Part of the reason for this, of course, is that the American satellite service offers foreign language programming that the commission in this country does not allow us to carry. For example, Rai, the Portuguese service, and the Spanish service are not allowed by the CRTC to come into this country. So they have to go to the American dish. They can't get it on us, on Bell, or on Star Choice. The commission doesn't allow it.

The Chair: That's a debate you'll have to have with the commission. That's very useful information for us, nonetheless.

[Translation]

In conclusion, I would like to thank you for having come before our committee this morning. I would like my colleagues to stay for another minute, since I have a couple of announcements to make.

First, if Bill S-4, of which I am the sponsor, is studied by this committee, I would ask somebody else to chair the committee while it is studying the bill. I do not think that I should be the arbitrator of debate on my own bill. If we do study the bill, I will sit at the other end of the table to testify. I do not think that I should take advantage of my position as chairman to promote a bill of which I am the sponsor. Nevertheless, I hope that other members will wish to move the bill forward.

Furthermore, tomorrow we will hear from the Fédération des associations de juristes d'expression française de common law. However, I will not be able to chair the meeting tomorrow, since I have to be at the opening of a very important French school. I had committed to being at the event a long time ago. As the chairman of the Official Languages Committee, I have to be there, not the least because—to make things worse—the school is in my riding.

On April 27, the Minister of Justice will appear before the committee to speak to the issue of bilingual judges. Of course, he will also address other matters. As well, on April 27, the Minister of Public Works will appear before our committee. It might be interesting for us to ask him questions about an issue which has been raised recently, namely government advertising in minority areas. Then, in May, if you wish, we can report on that matter.

The Official Languages Commissioner would also like to appear in May, that is, on May 11—on condition that the House is still sitting—to talk about three issues she has investigated and which she has reported on. They are: rental leases, the language of work, and bilingualism at Canada Post. She would like to speak to us about these matters. I know that by then the Senate will have begun working on the issue of rental leases, but we could work on the two other files.

Two other groups have also asked to come before the committee, namely the Réseau des cégeps et des collèges francophones du Canada and the Groupe d'intervention pour la télévision éducative de langue française, which fosters the advancement of TFO's structure. I suggest that we call these groups to appear later on, since we have a lot of work to do in the meantime. We could hear from them later on.

This brings the meeting to an end. I would like to thank all the members for being here this morning.

I see that Mr. Drouin would like to make an intervention.

Mr. Drouin.

À (1010)

Hon. Claude Drouin: Thank you, Mr. Chairman.

Do you think it is too late to postpone tomorrow's meeting? You won't be there and some of our colleagues have other commitments for tomorrow. So there's no guarantee we will have quorum. We would not want the witnesses to come here for nothing.

The Chair: With your permission, I will ask our clerk to immediately call the witnesses, if they have not left already, to see whether the meeting can be postponed. Is that what you are asking for?

Hon. Claude Drouin: If at all possible.

Mr. Raymond Simard (Saint Boniface, Lib.): Mr. Chairman, don't forget that we wanted to hear from them before hearing from the Minister of Justice.

The Chair: If we postpone the one hearing, we will have to postpone the other. We will try to do this, but if the witnesses are already on their way to Ottawa, we will have to find another way to get quorum. I will therefore ask Mr. Simard or Mr. Godin to chair tomorrow's meeting so that I can be present at the event which has been long awaited by the francophone community.

Thank you very much.

The meeting is adjourned.