Canadian Heritage Committee on May 25th, 2009

[Michel Arpin]

That's right, but 10 years later, they are saying that the system they promoted did not produce the expected results. Because of that, producers would like to revert to the system from 10 years ago.

[Roger Pomerleau, Bloc, Drummond, QC]

With respect to the digital transition, many of the witnesses who appeared before us said that it was all well and good to want to convert to digital. But they added that they did not think, because of financial difficulties and timelines, that it could be achieved in such a short lapse of time.

What do you think? What will happen if you are unable to complete the digital transition?

[Konrad W. von Finckenstein]

We will succeed. As I stated, our answer is a hybrid solution. We will find a solution, and not only in major centres. We will purchase broadcasting rights. The only thing required is equipment to capture digital signals, otherwise one would need a set-up box costing $50 or so, or something similar. People living in big cities probably already have access to satellites, and satellite companies are willing to do something like that. Freesat is such a company; you do not need a subscription, but the initial cost is about $500, for the set-up box, the antenna, and installation.

Obviously, we must find a way to finalize costs, and identify a source to pay for the initial cost—not all of it, etc. We are working hard on this... Lastly, if it seems that a government subsidy is required... it is too soon to talk about mechanisms because we have not yet clearly identified the costs and mechanisms in detail. This is on the agenda at our next hearing in October.

[Roger Pomerleau, Bloc, Drummond, QC]

All right.

[The Chair, Conservative, Gary Schellenberger]

Your time is up.

We'll now move to Mr. Del Mastro. Ms. Glover is sharing the time.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Chair.

I want to come back to your point 4(c). You're going to ask them to explore “mechanisms for establishing, through negotiation, the fair market value”. Suppose they can't agree, and you come in and say, “Here's what it's worth”. I understand that somebody in Toronto might pay more than somebody in Montreal, which I think is ridiculous. But if you establish a fee and the cable company doesn't want to pay the fee, are you going to force them to carry the station?

[Konrad W. von Finckenstein]

That's one of the issues we're going to explore. I didn't say we're going to impose it; I said we're going to find the mechanism. As you know, right now every single over-the-air station has to be a carrier--that's mandatory under the BDUs--but they don't pay for it. We don't understand why they're not paying for it, because there's a value for their listeners.

I don't know where your riding is.

[Dean Del Mastro, Conservative, Peterborough, ON]

I live in Peterborough--“Electric City”.

[Konrad W. von Finckenstein]

You have a cable company and it offers you both the local Peterborough signal and specialty channels. How would you feel if tomorrow the cable company said sorry, we couldn't make a deal with the local conventional station, so you're no longer getting it; you'll only get the specialty channels? That's just not on.

[Dean Del Mastro, Conservative, Peterborough, ON]

My local conventional station came here and said they weren't looking for fee-for-carriage; they'd prefer enhancements to the LPIF. That's specifically what they testified at this committee.

[Konrad W. von Finckenstein]

I said we're going to explore this. I didn't say what we're going to come up with. As a point of illustration, I tried to explain to you how these things would work.

[Dean Del Mastro, Conservative, Peterborough, ON]

I'm very concerned, especially when you say it might be different in different parts of the country in different stagings. It sounds like if somebody cuts a better deal than somebody else, Canadians in some areas could ultimately be on the hook for more money than Canadians in other areas. I'm concerned about the model you've set in place. We will be making specific recommendations as a committee around this, and I hope you'll consider them.

I'm going to pass the rest of my time to Ms. Glover.

[Konrad W. von Finckenstein]

Let me explain to you why there are different values. In Toronto you have about ten local signals, and in Peterborough you probably have two. If you take the fee-for-carriage as more or less proposed, that means those in Peterborough would pay one dollar, while the people in Toronto would pay five dollars if they had ten stations. You can't watch programming from all those signals at the same time, so there is a value to it, but what the value is I don't know. That's why we're talking about it that way rather than as a straightforward one-for-one per signal and a certain amount, because it can get to very unjust amounts.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay.

Shelly, go ahead.

[Shelly Glover, Conservative, Saint Boniface, MB]

I'm going to run out of time very quickly.

Welcome back.

[Konrad W. von Finckenstein]

Thank you.

[Shelly Glover, Conservative, Saint Boniface, MB]

To follow up on what Mr. Simms had to say, you said emphatically that you have teeth. You presented us with an example--CBC Bold, I think you said.

What are the consequences, the specific consequences, that we would we look toward if you were to use your teeth repeatedly to make sure that we kept these people in line?

[Konrad W. von Finckenstein]

You suggest, or it's implied in your question, that there's massive misbehaviour and violation of our rules. That's just not the case. Very rarely do we have cases where people stray outside their--

[Shelly Glover, Conservative, Saint Boniface, MB]

No, no; what were the consequences for that?

[Konrad W. von Finckenstein]

Well, as I said, we examine it, we come to a conclusion, we send the conclusion to the broadcaster, and we say, “Look, it seems to us you're not within your mandate. Your mandate is X, and you're way over here. Reform yourself.”

If they didn't do that, then we would issue them a mandatory order. If they didn't obey the mandatory order, we'd go to court, file an order, and start contempt proceedings.

That's the mechanism.

[Shelly Glover, Conservative, Saint Boniface, MB]

I just want to be very clear on this: the teeth you're talking about is simply repeating “Do as you're told”.

[Konrad W. von Finckenstein]

No, the teeth is investigating: if there's a complaint, fix it; if you don't fix the complaint, I'll give you an order; and if you disobey the order, I'll take you to court. The court then will deal with contempt of court.

[Shelly Glover, Conservative, Saint Boniface, MB]

What is the consequence--

[Konrad W. von Finckenstein]

Of contempt of court?

[Shelly Glover, Conservative, Saint Boniface, MB]

Are there fines? Are there...?

I want to get to the crux of this.