Evidence of meeting #22 for Canadian Heritage in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was you're.
A recording is available from Parliament.
Vice-Chairman, Broadcasting, Chairman's Office, Canadian Radio-television and Telecommunications Commission
In fact, there are all the regulatory aspects that go along with that. The quantum has not yet been set definitively.
Vice-Chairman, Broadcasting, Chairman's Office, Canadian Radio-television and Telecommunications Commission
Yes, the amount of money.
Everything should be in place by early September so that the broadcasters can start receiving funding in the following weeks.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
When you appeared the last time, I gathered that this Local Programming Improvement Fund was among the various avenues you were exploring.
Are you now telling me that you have chosen this option?
Vice-Chairman, Broadcasting, Chairman's Office, Canadian Radio-television and Telecommunications Commission
Absolutely.
Chairman, Canadian Radio-television and Telecommunications Commission
Excuse me. Can I comment quickly?
Chairman, Canadian Radio-television and Telecommunications Commission
We have not made the decision, so I cannot share the conclusion with you.
However, the Local Programming Improvement Fund does exist. It is currently set at 1% of revenue, and in actual fact it now totals $68 million. One question that we have talked about and looked at in greater detail is whether this level is sufficient, or whether it should be increased to 2.5% or something like that.
You will get the answer once we have made our decision, in July.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Okay, but do you mean that the decision has not yet been made?
Chairman, Canadian Radio-television and Telecommunications Commission
No, because it is a process, Ms. Lavallée.
We received testimony from approximately 50 people. All this testimony must be considered and analyzed. These people have the opportunity to make additional comments, and the commission will then make a decision.
Vice-Chairman, Broadcasting, Chairman's Office, Canadian Radio-television and Telecommunications Commission
The amount of $68 million that Mr. von Finckenstein just referred to has already been determined. It was set in a decision that we made at the end of 2008, when we established the fund and said that it would be equal to approximately 1% of the distribution undertakings' revenue.
However, many people have told us that this amount was not enough to meet the needs. During our April hearing, the discussion also dealt with the quantum.
Conservative
The Chair Conservative Gary Schellenberger
We have to move on. I'm trying to even things out here.
Mr. Angus, please.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Thank you, Mr. Chair.
Thank you, Mr. von Finckenstein, for coming back. We appreciate you taking the time to work with us.
At this committee we have tried to address the various arguments we're hearing from all political perspectives. Our fundamental desire is to make sure that whatever decisions are made, they are done so that our local television communities remain strong and vibrant, that any re-division of the pie doesn't end up with the broadcasters continuing to run their local stations into the ground and taking the money and spending it elsewhere, or with the cable giants ripping the consumers off, and how to do that.
We have the local improvement fund, we have the fee-for-carriage model, and now you're suggesting this compensation-for-value negotiations that are ongoing.
When we met with you two months ago, the question was asked: Is fee-for-carriage dead? You said “No, of course not.” Now, in your closed-door hearings with CTV and CanWest on April 30, you said discussions for fee-for-carriage were “a dialogue with the deaf” and that the new compensation-for-value model was more fruitful than “hammering the dead horse of fee-for-carriage”. So, is fee-for-carriage dead, or do we need to move on?
Chairman, Canadian Radio-television and Telecommunications Commission
First of all, at the beginning of the hearing I tabled a document saying we all talk about fee-for-carriage and we all mean something different. I said I've actually done impact analysis of what 50 cents per signal would mean, and here it is. Then I asked, are you all in agreement? And surprise, surprise, nobody was in agreement.
That's great, we said, so we're all apparently talking about something different. There were different views on the way you calculated how much each station gets and what the impact would be on the BDU. Tomorrow there's actually a working group meeting with the various participants of the industry to find out what is each person's position, because while everybody throws around the phrase “fee-for-carriage”, they don't necessarily have the same understanding of how you would measure it.
Secondly, as I said here, we, as a commission—and I've indicated that during the hearings—think a much more fruitful way would be to look at really what we're talking about. If you're a cable company, you distribute signals. You distribute them because the viewers want them. The producers of those signals should be remunerated for their value. You do it with specialty channels but you don't do it with conventional. Clearly, as a viewer you want to see conventional as well as specialty channels. So there is a value on it, and to distribute it brings an advantage. What is that value? That value should be established by negotiation. If you can't, we could arbitrate it. But that would then essentially give you a regular income stream for that conventional.
If you want to call it “fee-for-carriage”, call it that. I don't think fee-for-carriage is suggesting one number across the board, regarding what signal and where, etc. As I say, CTV wanted 50%. I think the more logical thing is to value it for what it is worth and then get compensated for it.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Okay, so we're not exactly hammering a dead hors; we're just transforming it into maybe a camel or something else, but it's still going to run at the end of the day. Is that...?
Chairman, Canadian Radio-television and Telecommunications Commission
I think they're trying to create a nice working horse, rather than a dead one.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Okay, because you do know that a camel was a racehorse that was made by a committee.
I'm looking at this model of compensation for value, and I think the question we still have is how it is going to ensure protection for consumers and how it is going to ensure protection for local markets.
Cartt.ca had an article on May 21, where the cable giants in the U.S. are now saying they're being forced to pay up increases of 271% to 300% and they're going to put that onto the cable bills. If you negotiate a value for compensation that's fair, that gives another revenue stream, will you have the tools in your tool box to ensure that the cable viewers aren't unfairly gouged at the end of the day, and that once these prices or agreements are in place either side can't arbitrarily change them? What tools do you have to ensure that there will be peace in our time on the television front?
Chairman, Canadian Radio-television and Telecommunications Commission
I don't know whether “peace in our time” is the right expression. I would certainly hope we will have a much more equitable and a better working system than we have right now.
In terms of passing on costs to the consumer, as long as you don't regulate cable rates, that's always an option. Whether they do it, of course, is a commercial decision, because they will have to make the decision as to whether consumers will put up with it or whether they're going to vote by either reducing their package or by going off cable altogether. There isn't an infinite capacity of BDUs to put costs on the consumer. That again depends on--
NDP
Charlie Angus NDP Timmins—James Bay, ON
But you have the capacity within the act to deal with that if they decide to pass that on.
Chairman, Canadian Radio-television and Telecommunications Commission
What do you want, Mr. Angus? Do you want a free, open market system, which you basically have, with regulation--
NDP
Charlie Angus NDP Timmins—James Bay, ON
No, I want the public interest protected. That's your job. The market handles itself.
Chairman, Canadian Radio-television and Telecommunications Commission
No, that's margins. That's what we have, or you can regulate the whole system.
Don't forget, this is not a self-contained system. There are alternative means of getting television signals and viewing, etc. So you have to be careful how far you regulate so that you don't force people out of the system. It's the same thing that BDUs have to be very careful of, how much they charge, otherwise people will abandon the BDU system altogether, or the television system, and try to get their signals over the Internet.
I think it was more self-regulating.