Canadian Heritage Committee on Nov. 25th, 2010

[Mirko Bibic]

No.

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

I will try to repeat it for you, so I hope I get it right. Basically, she said that when a distributor would pitch a production idea, they were asked not to pitch the idea to another broadcaster within 18 months.

I am sure you can appreciate that they would see that demand as unreasonable. She used an expression—I am not sure if my colleague remembers it. She said something to the effect that it was akin to asking for someone's DNA. I do not recall her exact words. She said that the conditions being imposed on producers were clearly unreasonable, that the balance of power was against them, that broadcasters had all the control, and that from now on, producers would have to bow down to the broadcasters because of the size of their market share and the challenges producers would face if they did not do business with those broadcasters.

Now that you are going to be in that boat, do you intend to take advantage of producers, as well?

[The Chair, Conservative, Michael Chong]

Thank you, Ms. Lavallée.

A brief response, please, Mr. Bibic.

[Mirko Bibic]

I do not have any experience with that kind of situation, since we have not put on our broadcaster's hat yet. But our door will always be open.

[The Chair, Conservative, Michael Chong]

Very well, thank you.

Mr. Angus.

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

Gentlemen, I am very pleased to have you here.

I can say that the one upside of merging is that we're going to cut down our meetings from two in a session to one, hopefully. It will be more efficient on that level.

I found the talk very interesting, but I have to admit that I don't really understand why anybody would watch television on a phone. Maybe I'm old school. Then I thought that back in the 1980s—I was only about ten years old then—this guy kept coming up to me wanting to take articles I had been writing and put them on a bulletin board. I asked what the heck a bulletin board was. He told me that people were going on them. I asked him what they were doing. He told me that there wasn't much. They needed content. I asked why the heck they were going on these bulletin boards if there wasn't much there. Of course, that became the Internet, so I missed out on that. That's why I had to get a job as a politician.

I raise this because we are being asked to lay down ground rules for a market that is very much in its infancy, and things are going to change dramatically in the next ten years in terms of delivery of content. For our generation that grew up on black and white TV, then colour TV, and then cable TV, we're still thinking in that paradigm. I'm sure that you guys are already well beyond that, and other people are as well.

When you talk about innovative niche content being what differentiates one company from another, I get that. Rogers gets FIFA. You guys get the Grey Cup. It raises the prices. There's going to be a lot of bidding on those top-notch events. You're always going to want to have things you can offer on your apps and your phones.

I'm interested in what's paid for by the Canada Media Fund. The Canada Media Fund is the Canadian partner at the table. We're paying for content. We want to be able to access content.

Would you have a problem with the Canada Media Fund being directed to have any programs they fund on behalf of the Canadian taxpayer not limited to an exclusive phone deal? If it's available on next-generation platforms, then it's available on next-generation platforms. Would that be a problem for Bell?

[Mirko Bibic]

Thanks for the question.

I think earlier this week another intervener sitting here in this place raised that idea. I found it to be an interesting idea that deserves further thought.

I have to confess that right now, I don't have a formal Bell view on it. But it's certainly something that should get more study. I'm sure that the CRTC will look at it when they have their hearings next year.

I find that it is at least an interesting proposal in the sense that it's targeted and deals with a particular issue. From the standpoint of principle, Canadians have paid into or contributed to these funds indirectly through their BDUs, so shouldn't they have access across all platforms? It at least seems to have the viewer at heart.

I think it's way better than some of the heavy-handed prescriptions some of our competitors are going to come forward and propose, such as a ban on all exclusive arrangements. I think that would stifle innovation dead in its tracks.

You mentioned an infant industry. The worst thing we could do to an industry or a sector of the economy in its infancy is to slap on it heavy-handed rules.

I think it deserves some study, but I'm not quite sure where I stand on it officially yet. But it's interesting, and I think it merits study.

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

I mean, CTV, as a broadcaster, is not going to say that they will pay for this content and it's going to go on Global. There's an exclusivity deal there. Bell, as a distributor, is going to have to say that it wants all kinds of content, otherwise nobody is going to take its satellite. You have two different elements there. I'm interested in the production of content.

At this point, we're still thinking TV. We're still thinking cable satellite. But we're actually going to be talking about a whole next generation. You guys can bid on the World Cup or the Grey Cup. That's your turf. Carve it up however you want, because you're paying a lot money. We, as the Canadian people, are paying a fair amount of money for our content. We just want to know, if we're on Rogers, Telus, or anywhere, that we can watch that content. That's the question. Would you have a problem with the Canada Media Fund making that a direction?

[Mirko Bibic]

The reason I'm not giving you a clear and definitive answer beyond that it's definitely an idea worth studying is the following: If a show that has been partially CMF funded is available only on this phone from Bell Mobility, it doesn't mean that Canadians would be denied access on alternative platforms. There's another device. It's a tablet. It could be a Telus device, a Rogers device, or a Bell device. You can hook up to WiFi in a hotspot, get on the Internet, go on CTV.ca, and watch that show. You may not be able to watch it on a phone like this one if you're a Rogers Wireless customer, but you'd be able to watch it on a tablet through CTV.ca.

The point I'm trying to make is that there would be a lot of ways consumers could get access to CMF-funded programs. That's why I'm saying that we have to think through all the dynamics and impacts on the customer.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Angus, for those questions.

Thank you, Mr. Bibic.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay. First, we need some clarity. I sense skating, and I don't like skating, unless we're playing hockey on the Rideau.

Rogers owns Citytv. It is officially against fee-for-carriage in any form, including value-for-signal. Shaw owns Canwest, and they also have a controlling interest through some kind of ownership agreement in Corus. They're officially against value-for-signal, fee-for-carriage, or whatever you want to call it. Bell wants to buy CTV. It wants assets.

Mr. Bibic, officially fill in the blank.

[Mirko Bibic]

Okay.

Here's what needs to happen. First, we need to take ownership of CTV; that's not yet done. Then we need to see what the court says. If the courts say the CRTC has no jurisdiction, the issue is dead. If the courts say that the CRTC has jurisdiction, then obviously as a business this is what we have to do: we have to bridge the gap between the CTV business unit, which wants it, and the Bell TV business unit, which doesn't. We're going to have to balance those two considerations as an executive team and come up with the best answer for both business units, and for viewers, and consumers, and of course our shareholders. I don't have the answer today.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay. Well, when Konrad von Finckenstein was here, I made it pretty clear to him. I said Bell now owns them, their position was clear, and you can drop the court case. We don't need to go through this; we don't need to continue down.... Because my concern has always been on the side of Canadian consumers, and I've made that clear. I think Canadian consumers are frankly very frustrated. They're very concerned with the amount of money that's leaving their household; they're concerned about bills, debt loads, and all these sorts of things. I'm sensitive to those things.

Just last week we had a whole number of independent broadcasters here who were talking about how we need to open up 9(1)(h) licences. That's a solution for independent broadcasters. I said to them, personally I see where the future's going, and that's not the future. This was really important in 1990, might have been really important in 2000, and in 2010 it might be important until 2012—because the future is going wireless. Everything that CTV plays, I will be able to watch. In fact, when TSN has a great hockey game on, I hope to be able to watch it wherever I am, on a device like the one you have with you, over my wireless network, and it will be streaming in HD. That's the future, and it's not that far away.

So what I need to understand, and this is my position, is that we need an environment in which we're protecting consumers. I think this is what Bell's position was. I hope it's the prevailing position, and I would hope that Bell would indicate to Mr. von Finckenstein that its position hasn't changed, because I thought it was a position of principle.

That's my position on it.

[Paul Sparkes]

Mr. Del Mastro, your position is loud and clear on that, for sure.

Our position is quite clearly that our troubles don't go away just because Bell bought us. They don't. We have a healthy specialty business, which obviously is very attractive to Bell. We have a fragile conventional TV business that needs help, and if you're a businessman and look at the business you just bought and at how they're performing, you're going to want to see on the bottom line that they're going to make money.

From our perspective, we need to have that extra revenue source to be able to continue. The fact that Bell's buying us allows us to get in out of the rain for a short period of time doesn't fix the overall problem for conventional television. And all of the streaming that comes on these devices, or 90-odd-percent of it, comes from television. The majority of people are still watching it.

[Dean Del Mastro, Conservative, Peterborough, ON]

I understand what you're saying, Paul, but I'm Joe Consumer at home and I'm faced with my monthly bills. This purchase of CTV is going to come before the CRTC, and what I'm understanding at home is that ultimately, large corporate titans are going to decide how much money is going to change hands between Rogers and Bell and Shaw for the rights to air Global, CTV, and City, and I'm thinking that nobody's thinking about me. That's a problem, and I think it's incumbent upon Canadians....

Listen, I understand the value of local TV. I think CTV does a fantastic job, especially with its A Channel brand, covering local television. We need to look at that and need to be absolutely supportive of it. I'm just concerned about Canadian consumers.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Del Mastro.

Mr. Bibic.

[Mirko Bibic]

Mr. Del Mastro, CTV's position on this is loud and clear, and it has been consistent. You know what Bell's position is. When we own CTV, all I can tell you is that as an executive team, obviously we're going to have to find a way to bridge the gap between the two business units. We're business people; we're going to have to. And we'll keep the consumer top of mind.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Bibic.

Madam Crombie.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Chairman.

I think I'll change the channel, if I can.

I want to go back to the whole issue of concentration in the industry and to whether or not you believe, as many of us do, that it's going to lead to less viewer choice and further erosion of revenue. And will it possibly lead to further mergers?

[Mirko Bibic]

Certainly the last couple of transactions, which probably precipitated hearings like this, have not resulted in concentration of media.

Canwest was in bankruptcy protection; Shaw stepped in and ensured that it would remain as an independent voice. You've already heard my answer on the CTV transaction. BC doesn't own any content, so we're not concentrating broadcasting assets; we're simply going up from 15% to 100%.

I think transactions like this—I believe my colleague from Corus mentioned this yesterday or Tuesday—give us the scope and scale, as I mentioned in our opening statement, to really do phenomenal things for Canadian content: invest more in Canadian production and showcase it around the world on devices like the one I'm holding, through the Internet. Now it's the entire world that's available to Canadian content in terms of eyeballs. We're really excited to make that happen.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Mr. Sparkes.

[Paul Sparkes]

From our perspective, we're obviously very excited. There are more ownership groups today than there were seven years ago. I think today we have 63 ownership groups in the media space. If you go back 10 or 15 years, that certainly wasn't the case.

What's happening is that our diversity is being protected in this transaction, in the same way as with the Shaw transaction, just to echo Mirko's comments. They were on the verge of going dark, and now they have a thriving partner with them.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

As a consumer, should I be more concerned about the increased concentration in the industry or the vertical integration?

[Paul Sparkes]

Let me be a consumer for a moment—which I am. I have an iPad, like everyone else, and I watch stuff on it. No, I think they should be excited about it. There are so many opportunities now.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I'm concerned that it's going to lead to less choice.