Canadian Heritage Committee on May 6th, 2009

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Sorry, you'd be saving consumers about $5 or $6 a month?

[Mirko Bibic]

As a result of the cost savings we would deliver to the industry, if fee-for-carriage and the local programming fund increases were not implemented, consumers would save $5 to $6 a month, on average.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Sorry, I don't mean to walk over your comments, but I don't have a lot of time.

The other—

[Christopher Frank]

If I could just add to that answer, if there are no transmitters in a particular community, then the viewers who wish to receive TV service would have to pay a monthly fee to either cable or satellite to receive those signals. And effectively, what we're doing, as well as saving the money that Mr. Bibic alluded to, is that we're providing the service and saving the local viewer from having to pay a monthly fee.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Okay, thank you.

You say in your conclusion that “there are in fact many public policy tools available to assist local programming”. This is one of several issues we've been dealing with when it comes to the question of content.

So there are two things here. You want the LPIF to remain at 1%. Do you think the LPIF is a policy tool that will contribute to Canadian content?

And secondly, what can Bell Canada do to contribute to the issue of Canadian content in television? I ask this because it's essentially what we have to get to here, because we are the Canadian heritage committee, so our concern obviously is strictly from a content perspective—at least I think it is. And all of these policy tools and levers that we have should be able to get more Canadian content that's easily accessible. So what is it that Bell Canada provides for Canadian content?

[Mirko Bibic]

Well, Mr. Simms, currently we effectively pay a 6% tax on our revenues today, amounting to close to $90 million a year, which goes directly into programming funds supporting Canadian content. That's a huge direct financial investment we're required to make into the industry. So that's certainly one.

We are also delivering, as I mentioned in my opening statement, over 70 local stations across the country, which is a direct support of local content.

We're also willing to provide FreeSat, which will guarantee access to Canadians to their local stations in their local communities without a monthly charge.

So all of these things are contributions to local content and Canadian content.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

So you want to provide the access, by which—

[The Chair, Conservative, Gary Schellenberger]

Just make it one small question.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Well, I'll have to recalibrate, then.

So when it comes to the LPIF or fee-for-carriage, which way do you think we should be going? Should we be putting more investment into the content structure, like the LPIF way of doing things; or, on the other hand, should we be changing on the margins some of these regulations by which we strangle all the players, whether they be conventional broadcasters, the specialty cable channels, or you as BDUs?

[Mirko Bibic]

We're not supportive of any model—especially given our financial position—that requires the distributors, such as satellite TV, to provide direct cash transfers from our business to the broadcasters, because they are in fact more profitable than we are. We need each other to function. They've been more profitable, historically, than we have. We want to continue to be in this business and to continue to provide a choice to Canadians.

So I think, essentially, we should be able to work these things out, but their outrageous demands that would add over $700 million to their bottom line in direct cash transfers from consumers are simply unacceptable.

Now, what you could look at, as members of Parliament, are some of the ideas I mentioned in my opening statement, such as part II fees, a government tax that is completely unnecessary. That could go to local content.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Madame Lavallée, please.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Further to what you just said about fee-for-carriage, you proposed that the CRTC relax the Canadian and Quebec content requirements in prime time so that general interest television networks can generate more advertising revenues.

Were you correctly understood? Is that really what you said? I'm going to start again.

[Mirko Bibic]

In what text are you reading that?

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

It's an internal text, from here, prepared by the Library of Parliament. I'm reading that you are suggesting that the CRTC soften Canadian—and I add “Quebec”—content requirements so that general interest broadcasters can generate more advertising revenue.

[Mirko Bibic]

Conventional broadcasters are of the view that the CRTC's requirements are too costly. In those conditions, we thought that, if the CRTC was considering relaxing local programming criteria, we would not object. Broadcasters could then cut their costs. However, as regards the appropriate level of local content that should be required, we're not experts on the subject.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

That proposal came from your fund?

[Mirko Bibic]

No. We simply told the CRTC that, if it wanted to continue in that direction, we would not object.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I sincerely think that broadcasting and cable and satellite distribution are a public utility and that the privilege associated with that activity comes with an obligation. I believe that broadcasters have a duty to offer Canadians and Quebeckers Canadian and Quebec content.

When you talk about relaxing content requirements over a matter of costs, we get the impression that Canadian and Quebec culture is being exchanged for money.

Do you think I'm right or that I'm exaggerating?

[Mirko Bibic]

I understand you. I want to emphasize that it was the conventional broadcasters who asked that the criteria be relaxed. We simply said we wouldn't object to that. I understand your point of view. They have a duty.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Do you understand that you too have a duty as a broadcaster?

[Mirko Bibic]

Our duty, above all, is to serve our consumers and then to meet the CRTC's local programming criteria and standards. We meet those criteria. In fact, we exceed them. Today we distribute more than 70 local stations in Canada. That's more than any other distributor in Canada.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Paragraph 7 of your presentation states:

We believe that the government should conduct a review of the broadcasting policy as it pertains to the role and importance of local expression [...]

What do you mean by that?

[Mirko Bibic]

What is important for us is not so much to know who will convey local content to the communities as to ensure that it is in fact conveyed to them. Content delivery is the primary concern. That can be done through television, community channels or the Internet. It is not necessary to proceed as we have always done over the past 50 years. That function does not necessarily have to be taken over by conventional broadcasters. We have to adjust. Technology is evolving quickly. We therefore have to consider how we can use new technologies to ensure that local content in Quebec and Canada as a whole continues to be produced and distributed to the communities.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

It's on that basis that you're proposing free satellite?

[Mirko Bibic]

It's in that spirit, indeed. I'll admit to you that, from a commercial standpoint, Bell TV can't afford to make the transfers that conventional broadcasters are requesting. However, we felt that, to help them, we could provide our satellites. That's where the exchange stands.