Canadian Heritage Committee on Oct. 26th, 2010

[The Chair, Conservative, Michael Chong]

Welcome to the 25th meeting of the Standing Committee on Canadian Heritage, this Tuesday, October 26, 2010.

We're here pursuant to Standing Order 108(2) for a study on emerging and digital media: opportunities and challenges.

We have in front of us this afternoon witnesses from three organizations: from Telus Communications, Mr. Hennessy, senior vice-president of regulatory and government affairs; from the University of Waterloo, Professor Coates, professor of history and dean of arts, and Mr. Wilson, strategic adviser to the university; and from the Canadian Library Association, we have Madam Moore, who is the executive director of that association.

Welcome to all of you.

We'll begin with an opening statement from Mr. Hennessy.

[Michael Hennessy, Senior Vice-President, Regulatory and Government Affairs, Telus Communications]

Thank you, Mr. Chair and members, for allowing Telus to present on issues around the future of digital media in Canada.

I don't have a presentation today, per se. It was short notice, but I really appreciate being asked. We will have our notes translated and sent to the committee tomorrow.

Let me thank you again for presenting on issues around the future of digital media in Canada and what we see as the public policy challenges that massive change driven by the Internet now poses in respect of the achievement of cultural objectives.

The Internet, as we all know, is an open system and it's a system that has irrevocably changed the world of information and entertainment for good. What was once only available through the broadcasting system or in video stores is now easily accessible, not only to Canadians, but to people all over the world. That could be a huge opportunity for our cultural industries.

Companies like Apple, Google, and Netflix are reinventing the world of entertainment and using the Internet as their delivery vehicle, and they're not alone. Companies like Sony and Panasonic are introducing TV sets that connect directly to the Internet, and in response big U.S. broadcasters are pushing programming through Hulu directly to consumers.

Telus, for its part, is responding in turn by investing billions of dollars in world-leading wireless broadband and our new Internet-based Optik TV service to ensure Canadians and Canadian businesses, including digital entrepreneurs, can take advantage of these opportunities that access to global markets through broadband presents.

This brings me to the issue of foreign ownership. Government is currently considering removing restrictions for carriers regulated under the Telecommunications Act, but not for carriers regulated under the Broadcasting Act. This distinction put forward by government simply does not reflect digital realities, and in our view a telecom-only liberalization will lead to legal advantages made available for large foreign enterprises that will not be similarly available for Canadian enterprises. That cannot be considered fair.

Why? Today virtually all communications carriers carry or distribute video over the same physical network used to deliver traditional telecommunications. Digital networks just carry bits and are agnostic when it comes to traffic carried, and in fact they should be agnostic to ensure principles like open access to the Internet. While all networks today carry voice, video, and data traffic, you can't segregate that traffic. However, it's still relatively easy to protect and separate the business of content production and exhibition from digital carriage, even if you liberalize broadcast distribution.

We believe that when it comes to broadcast distribution or carriage you can achieve broadcasting objectives irrespective of ownership. Today, broadcast distributors have little or no discretion regarding the application of broadcast rules. Cultural priorities and fees are set by the CRTC and distributors have to comply. That would still be the same if foreigners ran the physical distribution networks tomorrow.

On the other hand, broadcasters like CTV, Global, or TVA make decisions on what programs to produce, license to independent producers, and exhibit on their channels. These activities are of obvious cultural significance and should remain protected. But for today let me make the suggestion that foreign ownership should not be your primary concern in terms of meeting the objectives of the Broadcasting Act. To Telus, the biggest threat to access, diversity, and choice arises from the unprecedented vertical integration we see in the broadcasting industry, not whether foreign or Canadian carriers actually distribute video under the same rules. After the Bell-CTV deal is approved next year—and it will be—the four largest broadcast distributors in this country will also control virtually all the broadcasters in the country. That is a massive consolidation that has occurred in just less than five years. This vertical integration creates a huge risk for abuses of market power in terms of access.

We are therefore pleased that the CRTC is planning to have a proceeding next spring to deal with the issues related to vertical integration, and we're equally pleased that last week your committee voted to make this a focus of an upcoming study. Foreign ownership is clearly a concern, but the carriage and distribution of content can be easily regulated to ensure that carriage priorities are met, irrespective of who owns the pipe.

A consolidation of control over that content into the hands of only four large players, however, should be a much greater concern. If government cannot ensure that all content producers, independent distributors, and, most important, all Canadians have open access to the system, then we all lose.

In our view, if we lose diversity and choice in the system in order to create larger Canadian enterprises, then debate about the impact of foreign ownership on the achievement of the objectives of the act becomes almost irrelevant.

Mr. Chair, committee members, that finishes my opening comments. I would be happy to answer your questions.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Hennessy.

We'll now have an opening statement from the University of Waterloo.

[Dr. Kenneth Coates, Professor of History and Dean of Arts, University of Waterloo]

Mr. Chair and members, thank you very much for the chance to speak to you.

As you know, the University of Waterloo is very heavily engaged in digital media production and new technologies. I'd like to present my comments to you in three areas--opportunities, challenges, and next steps--as we contemplate going forward.

I'm going to put it to you very clearly that I think digital media and our ability to compete in digital media is essential to the challenge of winning the 21st century on the economic front. This is not a small question.

Digital media has been allowing countries and regions to leapfrog each other economically in a way that's not really been possible in the past. We are seeing remarkable changes in places where they're least expected. The uptake of mobile phones, for example, in Africa is something that people had not predicted 15 years ago but is a reality of that continent.

We're also seeing a remarkable shift away from the digital media technology to digital content and services--not the capacity to use the Internet but in fact what goes over it. And we've seen some remarkable change in very short order from what we call Web 1.0, which was really the posting of information online, to Web 2.0, which is interactive websites, to what we're now describing as Web 3.0, which includes things like the semantical web, where the Internet and computers have the capacity to do an awful lot of thinking for you. And the transformational effects of that are really quite profound.

So what are the opportunities?

Number one, recognize that in Canada cultural production is a major Canadian competitive advantage. We do extremely well in producing content. Whether it's animation, video games, films, or what have you, we do very well.

Secondly, we have a tremendous opportunity in education. Canada's education is of very high quality, and at some point we'll realize that this in fact could be a globally competitive industry. The largest universities in the world are all distance education universities. They have two million to three million students in a single institution. If we can hook up into that, the brains and intelligence of Canada could be spread around the world.

We obviously can use digital media to overcome distance and isolation. And I think there are some tremendous opportunities in the promotion of Canadian cultural understanding. Christie Digital, a Waterloo-based firm, is one of the best immersive technologies in the world of virtual reality chambers, basically. The opportunity to use that technology for heritage sites and national parks has the potential to allow all of Canada to come together very quickly.

We also have a very great competitive advantage in the order of the rule of law and good governance. There's an opportunity for Canada around intellectual property rights and copyright protection. I think the world in fact would look to Canada if we were successful in addressing that major issue.

Finally, bilingualism and multiculturalism present enormous opportunities in Canada and beyond to actually connect up to the linguistic and cultural diversity of this country.

What are the challenges?

Mr. Hennessy and others will know the challenges on keeping up with infrastructure. It's a very significant challenge for us. But I think some of our challenges are more conceptual than they are technical. We have to learn to move much faster and more effectively in digital media. We've actually been moving quite slowly. We are not a fast nation when it comes to digital media. Countries as diverse as Taiwan, Korea--South Korea, in particular--Japan, and Malaysia are moving much faster.

To stick with Asia for a second, there's a very interesting phenomenon happening in digital media in East Asia and South Asia. For the first time in many years, those countries are basically becoming more regionally focused. They are producing digital content for themselves and not for North American markets. They are massive markets--a billion-plus people in China, many hundreds of millions in the region as a whole. And we are actually not well connected.

Some of you may know the name of Matthew Lien. I'm not sure if any of you have ever heard Matthew Lien. He's actually a Yukon-based musician, a very interesting man. I can almost never find anybody in Canada who's ever heard of him, but he's extremely famous in Taiwan and in China.

There's actually a fairly significant group of Canadians who have ignored the Canadian market and are doing very well overseas. We absolutely urgently need to do something about our Asia connections. Canada's Asia connections are weak, and they're getting weaker. They're not getting stronger. And on digital media, there's an enormous opportunity.

There are two other things. Perhaps one is a bit surprising. We're not as well connected up to the new mobile technology--not the technology, we're okay on the technology; it's actually the applications. We're not connecting up there as quickly as we could.

To offer a strange one, loyalty has become a fundamental challenge for Canada. We lose many of our highly qualified personnel. In fact, one of the standard realities of start-up companies in the digital media space is to basically get started in Canada and then leave, either to be sold outside of the country or to move themselves.

In contrast to other countries--and again, I would draw your attention to Taiwan, to South Korea, and to India--we are making very few efforts to bring those Canadian digital media firms and those individuals back home.

What are our next steps?

My suggestion would be that we actually make sure that digital content is more forcefully integrated into our national innovation strategy. Canada is spending hundreds of millions of dollars on national innovation, but cultural content and digital content is not really understood as a major economic force. It is now and will be in the future.

I think we need a major win in the area of Canadian heritage online, a major significant national project that shows that Canada is in fact ready to tackle global leadership in the field. We need to pick up our speed and our focus. Canada has to move faster and in a more targeted way. In digital media winners and losers change place very, very quickly, and we're not moving at the speed that we should be doing. We have seen some very important developments here. The Social Sciences and Humanities Research Council has done a great job of reconfiguring its activities in this regard, but quite frankly, at all levels of governments--municipal, federal, and provincial--our granting system does not move at the speed of the Internet. If you compare what we do in Canada to what they do in Singapore or Taiwan, where a handful of people can make decisions in a couple of days, our processes take as much as two years. Two years is a lifetime in the digital media space. It's not fast enough. We have to change.

We need to issue a loyalty challenge. There's nothing wrong with our country being proud about being Canadian and asking our entrepreneurs and creative people to stay in Canada and to invite those who've gone overseas to actually come back home. Other countries are doing that. They are leaving our country to go back overseas. We need to invite our folks back to this country.

Finally, I think we need a digital brand. We need a substantial digital presence that actually has a global impact. We have to show the world that we're in the game. There's a little bit of branding. Research in Motion and Open Text are two good examples of that, but Canada does not yet have a really truly national presence as a major digital nation.

I thank you for the opportunity to speak to you.

[The Chair, Conservative, Michael Chong]

Thank you, Dr. Coates.

Now Mr. Wilson.

[Ian Wilson, Strategic Adviser, University of Waterloo]

Thank you very much, Mr. Chairman. I very much appreciate this opportunity and I appreciate your interest in this subject.

I'm speaking today on behalf of the Stratford Institute, which is a new entity established with a partnership of the University of Waterloo, the City of Stratford, Open Text Corporation, and the Canadian Digital Media Network.

I've been tasked by the former president of our university to work at the intersection of business, government, and the creative sector. That's why we're in Stratford, a highly creative community with a Shakespeare festival supported by business and supported by several levels of government.

To create new conversations and begin doing linkages across those three areas, we've now twice run the CANADA 3.0 Conference in Stratford. In early May of this year, 2,000 leaders in government, business, the private sector, and our universities gathered in a hockey arena in Stratford to talk about our digital future. Only in Canada would you have digital discussions in a hockey arena. The Honourable Tony Clement came and launched the discussion paper on Canada's digital economy. The Honourable Diane Finley was there to launch discussions on human resource policy.

The consensus out of two days of discussion, first, foremost, and strongly, was that Canada needs to set a comprehensive, compelling national goal--perhaps we might call it “Canada, a digital nation”--to arrive at that point by 2017, our 150th anniversary, and provide that with visionary leadership nationally and regionally. It has to be a powerful, compelling goal that everyone, all of our sectors, can engage in.

Secondly, success in this area requires an unprecedented level of collaboration across government, universities, the private sector, and NGOs. The people gathered there expressed this with considerable urgency.

There was realization in response to the discussion paper that the issue facing Canada is not the digital economy--that's only part of it; the real issue is the digital society. What will that look like? How do we manage it? How do we use this technology? Our workplaces are changing. Our families are changing. Our children are living in a new sphere, the digital sphere. This is a transformative technology; it's not a passing fad. We are still in early days with this technology.

As you recognize in your hearings and in your preliminary report, this has significant impact in all the areas of cultural policy and endeavour. I will focus my remarks on the area I'm most familiar with, libraries and archives.

The Government of Canada has already taken some initiatives to respond to the demands and expectations of the digital world. In 2004 the government amalgamated our National Library and National Archives. The two institutions themselves said we should come together to meet the expectations of Canadians in a digital world. Quebec followed very quickly, and my colleague, Madame Lise Bissonnette, established La Bibliothèque et Archives nationales du Québec on the same model with a broad vision, as we had in Ottawa, to have and use all documentary media to record, to document society, to preserve that properly, and to enable all citizens to have appropriate access to their records of our memory.

We also ran the Canadian digital information strategy from 2006 to 2009. Workshops across the country, research papers prepared, a final national summit in Montebello, Quebec, and a full coalition of research libraries came together as Canadiana.org and several private corporations have become engaged in the issues out of that paper.

One of the key elements in this is to mobilize Canada's existing knowledge resources. I think it has become very clear that government cannot regulate content on the Internet. Our traditional ways of ensuring space for Canadian content in broadcasting, book publishing and distribution, and magazine and newspaper mailing are no longer effective in an Internet world. The only viable strategy, as other national governments are demonstrating, is to put extensive amounts of our national knowledge content online, make it easily and invitingly accessible, and encourage all citizens to use that in libraries, in schools, at home, in all of their reference work, and in continuing education.

For our national knowledge resources from print material, the best estimate at this point is that less than 4% of what Canada has published is currently available online. This is when our youth go to the web and they assume anything of any importance is already available. The best numbers we have in the library community would suggest it's less than 4% of what we've published in this country. Since the first press was in Halifax in 1751, we have less than 4%. For audiovisual material, it's less than 1% for educational broadcasters and our film producers.

In a recent poll, 95% of Canadians indicated they expect online access to their library and archival resources. So 4%, 1%--we just aren't there, at a time when Europe, the United States, Great Britain, and Australia are investing heavily in getting their national content accessible online.

Linked to that, we'd have to emphasize that we have to have a preservation policy and capacity to preserve the electronic materials. As someone has said, in a modern office environment, electronic records last forever or for five years, whichever comes first. Certainly in terms of government records, in terms of the official record of our society, federal, provincial, and municipal, there are real threats to the preservation and maintenance of the national memory. So we need to ensure we have preservation capacity for the electronic age.

Similarly, as a public policy issue, what to preserve? It's clear we are preserving websites of interest--gc.ca, for example. There are other public policy issues around what to preserve out of Twitter, Facebook, YouTube, and the other social media.

For a conclusion, it is very clear, I think, from your deliberations and from this brief outline of what we've already done in the library and archives community that digital technologies are having a substantive if not a transformative impact on our cultural endeavour and the preservation of access to our documentary heritage. We've changed the institutional base. We've rethought methodology and challenged the professions to deal with digital. By the way, we're still preserving all the analog, because that isn't disappearing; that has to be preserved at the same time. We're enabling institutions to reach a public we only dreamt of a decade ago.

In this environment, and the trends are very clear, everyone is both a creator of content and a consumer. We shift from a time of knowledge scarcity to one of abundance. Leadership has passed from toolmakers to tool users.

What do we want to do with the technology? Rural access is lagging behind the urban. Technology enables business models based on micro-payments, tethered content, creative commons licensing, and sharing knowledge and collaboration. Not hoarding, but sharing is the basis of innovation and creativity. A lot of experiments and pilot projects are under way. The whole cultural sector is shifting and changing, as you're seeing, very rapidly.

I would like, simply as my advice, my suggestion, to urge the standing committee to consider whether the time's appropriate to recommend a major study of Canada's cultural policy, including information, humanities, social science, and knowledge policies, to inspire and guide Canada's governments and institutions in the 21st century. It should engage digital natives, take an inclusive view of its role to include all forms of cultural and knowledge expression in a complex and diverse society. It must wrestle with the implications for all cultural sectors and institutions in an information-rich, technology-enabled global society.

It must provide vision and inspiration. I suspect this will require substantial rethinking and repositioning the role of our arts and knowledge champions, recognizing that their skills and creativity are now vital. They are central to Canada's success in the global knowledge economy as a digital nation.

The Massey-Lévesque commission in the early 1950s established the broad cultural map to aid and direct and inspire Canada's cultural development in the post-war years. I think that 15 years into a digital economy, it is time we had a review of those policies, our institutions, our approaches, to rethink these but to have a new generation do it and enable the digital natives to really engage in this.

I think it would be fun. I think it would be fascinating. It will provide real ammunition, real direction, and inspiration for the next 50 years.

Thank you very much.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Wilson.

Now we'll hear from the Canadian Library Association.

[Kelly Moore, Executive Director, Canadian Library Association]

Thank you, Mr. Chair, and thank you for this opportunity to participate in this committee's study of emerging and digital media.

My name is Kelly Moore. I'm the executive director of the Canadian Library Association. CLA is Canada's largest national and broad-based library association, representing the interests of public, academic, school, and special libraries, professional librarians, library workers, and trustees, and all those concerned about enhancing the quality of life of Canadians through information and literacy.

Libraries of all kinds serve two primary functions: to provide access to information in whatever format it is produced or used, and to preserve information to ensure that it may be accessed in future. The digital revolution has caused an explosion in both the quantity of information and the variety of formats being produced, and the rate of change in technology is impacting information in ways we may not even understand. Certainly without strong digital and information policies, we risk losing material simply because we can no longer access it in the format in which it was produced.

Libraries are working to keep pace with the necessary changes to the ways we provide access, the materials we collect, the formats we preserve. Long gone are the days when a library's information was measured by stacks of books and drawers of card catalogues. Today, libraries are true centres of information within communities, schools, research institutions, and public and private sector work environments. In terms of digital information, libraries provide access not just to the Internet generally but also to electronic databases, e-journals, data sets, and other resources that are impractical or unaffordable for individuals themselves to maintain.

Libraries in Canada have some demonstrated successes with emerging and digital media. One key example is the metadata that allows digital images to be retrieved and which was developed by librarians. In Canada, initiatives such as Canadiana.org, already mentioned by Mr. Wilson, and the OurOntario project are using this metadata to help researchers access the digital files of items held in various different collections through a single search. It's no longer necessary to know that you must search for particular items in the holdings of a specific institution; you can find related items located in different physical spaces through a single virtual access point.

I would like to highlight some suggestions that CLA believes will help Canadians to meet the challenges and take advantage of the opportunities presented by emerging and digital media. For the most part, they will speak to questions 4, 5, and 6 in the terms of reference that this committee set out for the study. I will look at the need for a national digital strategy, the effect on copyright, access to broadband services, and the importance of open access to public information.

So what policies can the federal government develop to ensure that Canadians have both access to emerging and digital media and the skills needed to make the best use of the opportunities that these media provide? The first is the development of a national digital strategy. As has been mentioned in earlier submissions, various countries around the world have been investing in national strategies to take advantage of digital initiatives. Canada has no such plan to strategically digitize existing analog material to make it available online and to preserve and provide ongoing access to digitized or born-digital material. At present, there is no comprehensive overview of digitization projects already under way across the country. Efforts to develop and implement the national digital strategy are crucial to ensure that all information of enduring value to Canadians is and will continue to made accessible.

Such a digital strategy must also take into account the need for access to information at all stages of life. Canada's classrooms now have access to an unparalleled assortment of Internet and electronic copyrighted resources that allow for excellent access to information; however, too often access to such resources is limited to students, and there is often little opportunity for similar levels of access after students graduate. So these same resources must become seamlessly available to individuals as they progress through their careers. This will require support for the creation and purchase of digital content available to Canadians through public and academic libraries and in their work environments. In short, we must not let the fact that someone is no longer a student limit their ability to learn.

We must pass and implement a balanced copyright legislation. It is important to underline how decisions we make about copyright today will affect access in the future. CLA has issued a position paper on Bill C-32, and I believe that this committee, in some capacity, will be dealing with it in the coming months, but it is important here to reinforce the need for balanced copyright to truly benefit from emerging and digital media.

While there are elements of the bill that are very good, we are concerned that Bill C-32, as written, is not balanced. It provides copyright holders of material in an electronic format with almost unlimited power to determine the conditions under which people may use the material.

Libraries are built on the concept that most creative and innovative individuals cannot afford to purchase all of the material they must consult during their lives. All copyrighted material should be reasonably available through libraries, and copyright holders should not be allowed to lock out public use. Digital locks will act as a brake on the development of new applications and services. Allowing copyright holders the ability to determine how their products will be used creates barriers to the development of content for the new digital media.

The third point is to ensure access to sufficient bandwidth. In consideration of the impact of digital media, it is important that we think about how this information actually gets to users. There's a need to ensure that all Canadians have the means to access services and cultural content. Certainly access to broadband Internet in rural areas is a challenge that can affect the ability to take advantage of digital media. It is equally important to recognize that while there is sufficient bandwidth in most Canadian cities, cities are also places where the economically disadvantaged, new Canadians, and people with special needs who require services tend to reside. These Canadians often cannot afford broadband access, even when it is physically available to them. In order to participate in the digital environment, many urban residents also need high-speed Internet access in public places.

Libraries are here to fill this role. As Canada develops more digital content, more Canadians, both rural and urban, will turn to libraries for assistance. The reasons are clear. Libraries offer direction, assistance, and access to the technologies people require. For example, it is almost impossible for unemployed Canadians to find appropriate jobs without regularly checking online sites and having the ability to submit resumés electronically. The community access program offers some rudimentary access in this regard but is currently without secure funding. As we move forward, it will be important that CAP is strengthened and guaranteed.

The final point is to implement open access policies for public information and data. Emerging digital media requires content, and quality content can be developed through open access to Canada's public sector information and data. We encourage the government to make its information freely available in machine-readable formats based on common standards that can be exploited without the use of specific software.

There should also be a mandate from all major federal granting agencies that requires open access to publicly funded research. All researchers supported by Canadian taxpayers would be required to make public the published results of their research and the research data, with an embargo period of no more than six months. This initiative has already been undertaken in other national jurisdictions.

I want to thank you again for the opportunity to appear here today, and I will welcome any questions you might have. Thank you.

[The Chair, Conservative, Michael Chong]

Thank you, Madam Moore.

We'll have about 55 minutes of comments and questions from members of this committee.

We will begin with Mr. Rodriguez.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you, Mr. Chair.

Ms. Moore, as far as Bill C-32 goes, An Act to amend the Copyright Act, it will be discussed by another committee. It will not be the industry committee doing the study, but a legislative committee. So even though it is very much related to today's topic, another committee will be carrying out the study. I just wanted to let you know that.

Good afternoon, and thank you all for being here. Mr. Hennessy, we have discussed this issue before. You are here today to talk about emerging and digital media, and the opportunities, challenges and terms of reference that entails. That covers a number of elements. You had the choice of addressing any one or more of those aspects, and you chose to focus on foreign ownership.

According to your logic, if we open up telecommunications to foreign ownership—and we must first decide whether we are going to and, if so, to what extent—then we must also do so in broadcasting.

That concerns me on many levels because I get the sense that there would no longer be any limits at that point. I get the sense that you are willing to open up our companies that operate under the Telecommunications Act to foreign interests. You are also willing to open up companies that operate under the Broadcasting Act to foreign ownership.

Obviously, as you, yourself, said, everything is integrated. There is tremendous vertical integration. Just about everyone today is involved in telephone communications, broadcasting, content and so forth. I am very uncomfortable with the idea of opening things up that way, because I worry about what we would be left with in Canada. What would we be left with in terms of broadcasting companies and ultimately creative companies, those involved in producing content? If I were to apply your logic on liberalization, there would no longer be any limits whatsoever, and just about everything would be open. The way I see it, that would likely harm Canada's cultural industries.

So I want to know whether you envision any limits in your approach. For instance, should we open up only some of the broadcasting sector to foreign ownership, or all of it? In that case, should foreign ownership be limited to 49%, or should full ownership be allowed? Should these companies have to pass certain tests before they could be accepted? I would like you to elaborate a bit more on that, please.

[Michael Hennessy]

Thank you, Mr. Rodriguez.

First I would say I do see limits, so as I suggested, there should be a clear delineation between the production and exhibition of programming content that is broadcasting today--CTV, TVA, Astral--and carriage.

A witness from Rogers earlier on suggested that carriers in many respects are the plumbing. They provide the pipe that signals go over, and the signals that go over that today are really inseparable, as you pointed out. You can't say we will only allow foreign ownership of carriers of voice and data service but not video services, because they all travel on the same pipe. I think they are inseparable.

You have to start from where we started from, which is we do not think it is appropriate for the government to introduce changes to foreign ownership that would only favour, perhaps in their mind, stand-alone carriers, perhaps like the new wireless entrants. I would even argue that today, as we roll out broadband wireless, video that travels over wireless networks will travel over the next-generation satellite Internet networks just as it does today over cable and telecommunications networks.

Our starting principle is if you're going to change the law, you cannot do it in a way that favours foreign carriers relative to Canadian, because if you do that, even if you think you're talking about small entrants, as we saw.... Take the case of Globalive today. Orascom, their Egyptian shareholder, is being taken over by a Russian company. That company, Orascom-VimpelCom, will have 174 million subscribers. That's who we compete with. So if you intend to change the act at all, you have to do it in a way that is at least as fair to Canadian carriers as foreign ones.

That is my starting point, and we can separate carriage from content, because integrated broadcasters today already separate them in terms of their business structure.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Hennessy.

Thank you, Mr. Rodriguez.

It is now over to Mr. Pomerleau.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair. I would also like to thank the witnesses for being here today. I apologize for being late, but something unexpected came up.

My question is for you, Mr. Wilson. To begin with, you pointed out that when it comes to digitizing our written heritage, we are only at 4%, as compared with many others in the world. As for video, we are at 1%. You ranked us against other countries, including Australia.

Last week, I was talking to a member from Halifax. Right now, in the Halifax harbour, the Mi'kmaqs are building a boat made of bark, like the ones they used to build 400 years ago. I am not sure whether anyone is filming it, but it may be the last time they do something like that, and it could be lost.

The Abenakis tribe, one of the 11 nations in Quebec, lives in my riding. Out of the entire tribe, only 2 people still speak the Abenaki language. Once they go, that will be it, the language will never be spoken again. If we do not put in the necessary work, that is what we are on the verge of losing.

Given that other countries in the world are managing to do a much better job than we are, how do you explain why we are where we are?

[Ian Wilson]

I do not know how to explain it. Librarians and records officers have been talking about it for eight years. Eight or nine years ago, we were leading the pack. Lise Bissonnette and I, as well as other colleagues, were ahead of the game. Unfortunately, governments did not heed the recommendations of librarians. We held consultations and workshops to discuss the issue in great detail, and we developed a national strategy. We built a professional foundation to facilitate progress. Unfortunately, however, there is no program aimed at digitizing our heritage.

The situation you described regarding the rapidly disappearing customs and languages of first nations illustrates the necessity to record them permanently and make them available on the Internet. It can be done, it is not that hard. I am saying that, now, it is not a matter of having the technology. Canadian technology is very sophisticated, it is great. We can use that technology to preserve our documentary heritage. That is what Library and Archives Canada, our museums and the National Film Board of Canada are trying to do, but they have very limited budgets. To my mind, this is a crucial project. It is not just another expenditure.

We've just spent how much money on stimulus programs to build buildings? Someone described what we want to do to create the knowledge network to put Canadian knowledge, Canadian detail, online as building the Canadian Pacific Railway. This is building the trans-Canada railway but for a knowledge society for our intellectual capital. This is a whole new world we're working in, and we're still using models that were really good in the 1980s--that was good stuff--but we're in the 21st century. We're dealing with a whole new way of working and we're working in an environment that's highly competitive.

In the United States, the last I heard, the Library of Congress was investing over $100 million in digitization. The French government sent some senators to Waterloo to talk with us at the university and with Open Text, and they're looking at spending 780 million euros over five years on a project to digitize the accumulated material in

the national library and, I hope, the national archives. It is essential for us, for Quebec.

But we are not in that game. What we're describing, what the Canadian Library Association, Canadiana.org, our network of major libraries in this country are describing is a key part of the infrastructure for a knowledge society. We're saying that if you only have to do it once, we should do it well. We should preserve it.

We should put a very powerful Canadian research engine on it. We have it. Between Open Text and in Montreal there's a company called Nstein, and their technology for semantic web and data mining is extraordinary. Why don't we have a very powerful...? This is the way to get Canadians engaged with their memory, with their creative expression, and build on it for the future.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Wilson.

Thank you, Mr. Pomerleau.

Over to you, Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

I thank you all for a fascinating discussion. We could go on for hours with this, but we'll have to limit our questions.

Mr. Hennessy, when I was looking at the Google-Verizon deal on content and non-interference of content, what disturbed me was that there was suddenly talk of the “public” Internet as though wired technology was the public Internet, meaning wireless was not part of the deal. Yet more and more of our content, as you can easily tell us, is being distributed wirelessly, in new platforms.

In Canada now we're looking at a situation where the content creators, who are backed up by hundreds of millions of dollars of Canadian taxpayers' money through the CMF, are now basically being run by a phone company and by a couple of cable companies. How do we ensure that we don't have preference on certain content over other content, or that new digital markets or new digital players are able to access content that might be controlled by, say, Bell-CTV and you're a competitor? If your people want to go on there and watch the CTV movie on Telus, how do we ensure that we don't have these vertically integrated giants using their power in an anti-competitive manner to limit access to content?

[Michael Hennessy]

Yes, a fair question, and I think you're quite right: the Internet doesn't stop with wires; it includes wireless.

Number one, and the CRTC has started that process, you use the powers under section 27 of the act to say that things like exclusivity, giving an affiliated business a preference to advantage you over competitors, is an undue preference. But how you put teeth in that I think is the bigger question. So you need to have a rule against exclusivity across all platforms, because that content has been created by public funding, or it is used.... You know, American programming or foreign programming--that contributes. So it has to be accessible to all Canadians.

The simple thing is an ex ante rule that says exclusivity of programming content from the broadcasting system, whether delivered on a wire or a satellite or a wireless network, is prohibited. This is as a general rule. Then how do you ensure that the vertically integrated carrier doesn't agree to give you the program but at such extortionary terms that exclusivity is pointless? You need transparency into the deals that went on in the past, before exclusivity. You need an arbitration process that is predictable in terms of timeliness, because, as I like to say, there's no point in winning the right to offer the hockey season on your wireless phone if you don't get the decision until baseball season starts. So timeliness is critically important. Then you need the ability of the commission, once they've made their decision or an arbitrator has made the decision, to force compliance quickly. If compliance isn't quick, then the decision has to be filed with the Federal Court so that the vertically integrated carrier knows that if they don't comply immediately, they could be in contempt of court.

If nothing like that works, you can then start talking about fines, but I think most companies at that point usually give up. But you need some ex ante rules to say some things are wrong and they simply will not be done, and exclusivity is a perfect example.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

We've had the example of this great digital realm being like the Canadian Pacific Railway, yet it seems to me we continue to move on the idea that digital culture is something to be contained, as if we didn't want the railway to compete with the teamster horses so we have to limit how many tracks we're going to have.

Ms. Moore, I'd like to go to you on this. It seems to me that the notion of lifelong learning through digital education is crucial, yet we see with the imposition of digital locks. Rights that educators or students would normally have can be erased, and within Bill C-32 we actually see the provision of having to destroy class notes after 30 days because keeping your class notes would be some kind of threat.

I'd like to ask what you think of that. We look at our WIPO-compliant competitors, and within WIPO the digital lock provisions are really clear. Article 10 of the WIPO copyright treaty says that you can't use these measures like digital locks to override rights to normal use of a work. How do you think that allowing a software code designed by a corporation to limit, to deny, to exclude any kind of access arbitrarily will interfere with our ability to set up a truly forward-looking knowledge regime?

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Angus.

Briefly, Madame Moore.

[Kelly Moore]

It's going to be very problematic if you can't get at the material, if you can't transfer it to other formats when you need to, to make it accessible, to preserve it. But that information will have a very limited lifespan and a very limited applicability. So yes, the digital locks are going to be a problem with information going into the future, and we would certainly not encourage having that tool dictate what's going to be available to any information users now and in the future.

[The Chair, Conservative, Michael Chong]

Thank you, Madame Moore.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chairman.

Thank you, witnesses, for appearing today. It's very interesting testimony.

Mr. Hennessy, I like to think not much escapes me, not much gets by me. I like to think that anyway. This is the first time in some time I've had the opportunity to have Telus before our committee, and there was something I needed to get off my chest. I wanted to congratulate you and your company, specifically for being recognized globally for your efforts in philanthropy.

I don't know how many members of the committee know that, but Telus was recognized globally for its efforts specifically in areas like support for our troops and their families and so many other worthy causes. I just wanted to thank you for that, because often corporations get beat up here, but I think you deserve a tip of the cap for your efforts in that regard.

[Michael Hennessy]

That's very kind. Thank you.

[Dean Del Mastro, Conservative, Peterborough, ON]

You're welcome.

Now, specifically on some of your testimony, you talked about vertical integration, and I actually see virtual integration as an opportunity. As much as there are problems around it, I think there are incredible opportunities, because we're getting beyond—and many would argue we've been beyond it some time—far beyond a time when access to content was limited to how far you could push a signal. You've talked about web-based providers who are providing content literally anywhere on the globe. That provides almost a limitless stage. Your stage is now global. Your stage is no longer simply a market. I think it was Mr. Coates who talked about Canadian content and the fact that we are really strong in that regard.

Keeping these things in mind, my own view is that content now becomes so important, not specifically where the content will play, but the actual content itself is where Canada and the government should really be focusing. Would you agree with that?

[Michael Hennessy]

Yes, absolutely. We don't oppose vertical integration, but we do, as I suggested, think you want safeguards to ensure that all Canadians and all independent producers and all competitors have an open access to the platforms, and that's probably a small price to pay for that level of integration. It's a huge global opportunity, but I would say there's one thing critical in all of this. I'll step out of my own business hat for a second and speak on behalf of some of my friends in the independent production sector. As you get into concentration, there are fewer windows of opportunity for an independent producer of film or television to find exhibition space for its wares on the traditional platforms. In today's environment, the traditional platforms still generate most of the money that then helps finance the ability to distribute that content on the Internet. If it doesn't get on television in the first place; it never really gets screen time. So that is a critical thing.

I absolutely believe we have to turn regulation on its head and say that with the Internet you have the operative in broadband; we have the opportunity to reach markets of such scale that we may never have to subsidize businesses again. But you have to start in your own marketplace by ensuring that the producers of the content have access to the networks we have without interference in that for competitive or strategic reasons of the network carriers themselves.