Canadian Heritage Committee on May 13th, 2008

[Konrad W. von Finckenstein]

If that is what you have understood, then you have misunderstood. That is not at all the case. We want to know whether these new phenomena have an impact on our broadcasting system, what this impact is, whether it is positive, whether we can use the new media to improve our system and achieve broadcasting objectives. Should there be a system of subsidies in order to have sufficient resources?

If it were a matter of adopting regulations, they would be quite different from those now governing broadcasting. I do not know the answer to this question; I only know that we must examine it. One thing is certain: we absolutely do not wish to transfer our regulations from the old broadcasting system to the new one. If we do something—and I do say if—it will be completely different.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Okay. In other words, all the stir around this issue will not necessarily lead to regulation, but you are examining the question so as not to transfer to the Internet an exact copy of the model you use in broadcasting.

[Konrad W. von Finckenstein]

Yes. Our starting point is still the same, that is, the way in which we can achieve the objectives of the Broadcasting Act.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

About the AMPs, the national “do not call list” now entitles you to charge fines. Would you like the two acts governing you to be harmonized so that you had a similar power in broadcasting? Is that sort of what you are saying?

[Konrad W. von Finckenstein]

Essentially, yes. The same type of AMP that figures in the Telecommunications Act and covers a very limited aspect, namely the “do not call” list, is used for all broadcasting issues.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

When you submit your request to the government—at least that is what I understand further to the question asked by Mr. Bélanger—this is the model you are going to follow.

[Konrad W. von Finckenstein]

As I said, the best way to proceed may perhaps be to amend the Canadian Radio-television and Telecommunications Commission Act, which governs us as an agency and stipulates that we can use this kind of power under each of the acts that we regulate or administer, without there being a need to amend the Broadcasting Act or the Telecommunications Act.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Do I still have some time, Mr. Chair?

Ms. Mourani, do you wish to say something?

[Maria Mourani, Bloc, Ahuntsic, QC]

Yes, I would. Thank you, my dear colleague.

I would like to know, Mr. von Finckenstein, why you asked lawyers to produce this big report or study on regulation. Why did you not begin with consultations? Why did you ask them to do a review of the regulatory framework and how much did all that cost?

[Konrad W. von Finckenstein]

I could send you this figure. I do not know it offhand.

As to why I had this study done, the reason is very simple. Everyone is taking a position on what should be done to amend the Broadcasting Act, and naturally everyone does so in order to advance their own cause. So I asked these two lawyers to do a study. They are experts on the Broadcasting Act who have been advising a large number of clients for over 30 years, both small and large companies. I asked them to tell me, as experts, their opinion on the best way of amending the act in order to make it more flexible. I did not order the results. In English, I would say I commissioned the study, I did not dictate the outcome. This is their opinion.

[Maria Mourani, Bloc, Ahuntsic, QC]

What do you think...

[Konrad W. von Finckenstein]

This is the opinion of two of the most neutral experts to be found.

[Maria Mourani, Bloc, Ahuntsic, QC]

What do you think of this report?

[Konrad W. von Finckenstein]

I think that it contains some excellent ideas, some of which I do not share. We held hearings, consultations. In fact there was a major three-week consultation on the [Editor’s Note: Inaudible]. We are now in the process of making our decision. You will see which ideas were kept and which ones were rejected.

[The Chair, Conservative, Gary Schellenberger]

Okay.

Thank you very much.

Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Mr. Chair.

I want to ask the commissioner about the upcoming study entitled Perspectives on Canadian Broadcasting in New Media. I have a few questions, but not specifically about what's in the report. I want to make some comments and then seek his views on my comments.

I think in some ways the train has left the station concerning new media, and we're beyond the point where studies and actions that may flow from those studies are going to make any difference. The technologies exist today, are in use today in Canada allowing people to completely bypass—legally bypass—CRTC rules with respect to Canadian content, with respect to the regulation of Canadian radio stations and the like.

For example, I have friends who have gone out and bought Internet radio devices. They just plug them into the wall and they get automatically on their receiver thousands and thousands of stations that aren't Canadian, that aren't Canadian-regulated, that aren't CRTC-regulated. There are products such as Philips Streamium, or there's a product by a company called Roku. You can go into any Future Shop and buy these products. You simply plug them into the wall, plug them into an Ethernet connection, and boom, you have 2,000 stations for free.

It's just like a radio: you have a remote control; you can surf through about a thousand stations, pick any station you want, and play it on your system. That's coming to television. It's coming to a whole range of devices that, if not there already, are coming onto the market in the next couple of years.

I know that, for example, when you buy a Denon or Yamaha receiver now, you actually can buy this Internet-streaming radio built into the product. If you go to a high-end shop in Ottawa to purchase a Denon receiver, you have the option of buying a Denon product that, in addition to being a receiver and receiving conventional FM and AM signals, actually will receive Internet radio too. You just plug in the Ethernet connection and suddenly you have a whole third spectrum of a couple of thousand Internet radio stations that fall outside the purview of the CRTC.

I think it's only a matter of a couple of years before you're going to see that shift to Internet TV and IPTV. In some ways, I think we're entering a new era here, in which it's going to be almost a moot point to discuss whether or in what context new media fits into the old construct, before the age of the Internet.

I put this on the table because I think it's coming fast and furious, and I already see out there right now that people are using this stuff.

[Konrad W. von Finckenstein]

Let's assume your prognosis is right, that happens. That still begs two questions. Number one, your mindset is control, but that's not mine. Mine is what does it mean? How can we take advantage? How can we use it to further the objective of the Broadcasting Act?

Now, assume it's going the way you are doing it. Canadian radio stations can stream too. But are they streaming? Are there regulatory impediments for them to stream? Are there things that we do in the way we set ourselves up with regulators that actually prevent them from exploiting this opportunity? Then let's get rid of them because they're going that way.

Secondly, you find that notwithstanding globalization, people are actually mostly interested in what's happening locally. They want to know what has happened locally, etc. If you are from Calgary and you're sitting in an airport in Halifax or in Singapore, you want to know what's happening in Calgary. So what are you going to do? You're going to stream the station from Calgary. Now, can you do that? Let's make sure you can do that so the Calgary station gets the benefit of that.

So it opens a whole new panorama. How can we best exploit it to make sure that we obtain the objectives? That's how I'm looking at it--assuming they're going in the way you're suggesting.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I don't disagree with you. I just really put the point that instead of looking at it from the CRTC's end, maybe the other perspective is to say that we're moving into a very different era here with respect to broadcast policy. International formats, international stations--radio and television, movies and the like--are going to be ubiquitous in Canada because of the Internet, and maybe the solution then is to say we're not going to attack it from a regulatory point of view, as you suggested. Instead we're going to maybe take a look at putting more resources into the public broadcaster as a way to counteract the flood of foreign content that I think will be inevitable.

[Konrad W. von Finckenstein]

It could very well be. Mr. Abbott asked me about technological constraints and so on. And while that's your prognosis, I think most people suggest that it may go that way but will take quite a bit of time, because right now there are severe technological constraints for that to happen. They may disappear, but I don't know when.

At least for the medium term, I think you might have a complementary system. You might have both. You may have the traditional system and you have the new media, which fills up the gaps that the traditional system doesn't fulfill. And then maybe someday we will wind up where you suggest, or maybe not. Maybe the two will, in effect, reinforce each other and you will play on both. Most of the operators in the field are betting on both sides--investing in the traditional broadcasting and in the new media, covering both places.

[The Chair, Conservative, Gary Schellenberger]

Okay, thank you for that.

We're going to split a question here, I think, between Mr. Pacetti and Mr. Scarpaleggia.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chairman.

Thank you, Mr. von Finckenstein.

I want to continue the conversation you just had with Mr. Chong. I think I agree with Mr. Chong that we're already there. I don't think it's going to be, I think we're there already. There will have to be decisions made on what the CRTC is going to have to stand for.

I would assume that part of your mandate is to control or to monitor or to police Canadian content. I just don't see how you can do that for all broadcasters who are Canadian-owned, because there's going to be a global competition. Sure there are going to be people interested in Calgary news, like they are for Montreal news and Toronto news, but that's just a fraction of the market. Once you get your half-hour news clip and your newspaper on the Internet, I'm not sure if there's much more demand than that.

Maybe this is simplistic, but how are you going to continue to regulate the Canadian content?

[Konrad W. von Finckenstein]

Obviously we can't make people watch things. All we can make sure is that there is an offering that reflects Canada in all its richness, in all its diversity. People will decide what they watch. If in the world that you picture, with a superabundance of content from various places, and people don't want to watch it, then no matter what we do, they won't.

So far I think the experience has shown that if Canadian content is offered and it's good content, it will be watched, and it has a great and loyal following.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

How do we make sure it's there so people know that it's there?

[Konrad W. von Finckenstein]

Well, that's part of our job. It's partially through the regulations we have, maybe partially through incentives too--

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So you are open to almost anything.