Evidence of meeting #38 for Canadian Heritage in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.
A recording is available from Parliament.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
With that question, you are asking me to speculate on future directions the government might take or advice that I might be providing to the minister in those discussions. Is there another way I could be more helpful with an answer?
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
I apologize, Madam.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
I should be apologizing, but my time is limited and I really want to get some answers.
Of the seven solutions that were suggested by witnesses, are there any that are currently being studied by one of your departments?
February 2nd, 2011 / 4:10 p.m.
Conservative
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
With regard to programs to support the digitization of literature, the Canada book fund provides that kind of support. That fund was renewed with a view to the digital environment, so steps have been taken.
In all our policy work, we always look at the framework, whether it is legislation, institutions, or funding mechanisms. We benefit from the kinds of consultations that you and the CRTC hold. It's difficult for me to be more specific. I think you have heard from your witnesses the key issues being discussed here in Canada and around the world. We are looking at these issues when we provide our policy advice.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Thank you for coming. This has been an excellent presentation. We appreciate the work you've done in providing this information.
Ms. Miller, you talked about the upcoming analog spectrum. That's a prime chunk of real estate, and it's going to bring in billions. I'm not going to ask you if it's going to be spent on digital innovation or if the government is going to spend it on building prisons. That's a policy directive that will come from them.
I am interested in how the spectrum will be divided up and if this has been discussed. There's the issue of the white spaces and the possibility of leaving that open for public use. For example, WiFi was considered junk real estate in the megahertz spectrum back in the 1980s because nobody knew what to do with it, and now we have WiFi everywhere. We don't know what the potential of the analog spectrum is. If we just sell it off lock, stock, and barrel without leaving something for new entrants, new players, we might be limiting future innovation.
Has there been talk about allowing some open use on the spectrum or about what to do with the white spaces?
Director General, Telecommunications Policy Branch, Department of Industry
We have a consultation on this that was launched at the end of November. The consultation period will close at the end of February. It's a wide-ranging consultation. We are asking wide-ranging questions about the state of competition in Canada in the wireless sector and about types of government intervention, such as whether it would be to support rural and remote or whether it would be to support competition for innovation. We asked the questions about open access. It's a very wide-ranging consultation.
There is still time to present views. We're going to be carefully looking at all the views that are put forward.
NDP
Charlie Angus NDP Timmins—James Bay, ON
You talked about a 1.5 megabit standard in establishing our world-class broadband strategy. Australia is engaged in the largest infrastructure project in its history. It will hook up 93% at 100 megabits, right across rural Australia, and the other 7% by satellite.
The people I speak to in my region--and I represent a region bigger than Great Britain--tell me that in order to access distance learning and learning courses in small communities, they need five megabits as a minimum.
Have you started to look at the need to ramp up so that we can meet where our competitors are going in other jurisdictions? That 1.5 megabit standard just isn't going to cut it for long.
Director General, Telecommunications Policy Branch, Department of Industry
We regard 1.5 megabits as the minimum, and we have some good progress to report. According to the CRTC, at the end of December about 82% of Canadian households had access to five megabits.
I think we're already at a good standard. We have done that mainly through private sector investment and pretty minimal government investment. The Australian project has cost about $43 billion, and the government is fronting most of that cost. In Canada we've had a much more efficient approach, and we're relying on the private sector.
As I said, as of December 82% of Canadians had access to five megabits and 30% had access to over 50 megabits. We're projecting that within the next five years, 75% to 80% will have between 50 and 100 megabits. There's quite a lot of progress being made because of private sector investment.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Well, we support the private sector investment. I haven't met anybody in the telco industry who's told me that there's a business for rural Canada, because of the distances, but we don't have time to continue on that.
Ms. Cliff, I'd like to ask you about the Canada Media Fund, because it plays such an important role. A couple of questions have emerged.
One is that the fund is tied to the need to access a broadcaster. It gives them, in terms of trade, enormous power. Not that we're trying to separate them from the broadcasters, but there are questions about whether we need to expand the experimental category so that we can allow innovative ideas and actually make use of things like Facebook and other emerging media sources to actually start to draw audiences. Maybe they would then be in a position to sell a show, as opposed to having to go and beg in a boardroom and be told, “Sorry, but we're not going to do it.”
Has the Canada Media Fund looked at expanding the ability of people to get deals that aren't necessarily initially tied to a broadcaster to access tax credits and funding?
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
The policy framework set out by the government for the Canada Media Fund involves two streams: the convergent stream and the experimental stream.
The Canada Media Fund, which is an independent board and an independent corporation, at this point has decided that the bulk of the funding will go into the convergent stream, and, yes, there you must have a television component. It doesn't have to be your primary platform--it can be your secondary platform--but under the current terms, there is a requirement to have a television component.
In terms of the experimental stream, eligibility is pretty wide open. It's a Canadian-owned and Canadian-controlled company. It is for the leading-edge, non-linear products. They can be content or applications. The amount dedicated to that stream is determined by the Canada Media Fund board, and there is nothing the government has in place that would stand in the way of their enlarging the stream. That's completely up to the board. It's really intended to be responsive to market demand and to give the board the flexibility it needs to respond to that demand. Of course, they carry on pretty extensive consultations with the sector as well, and that's part of it.
In terms of trade, the CRTC, as you know, has put itself out on that one and has a process in place. I understand that the APFTQ and Astral came to an agreement just now in terms of trade. They're going to set up a committee to oversee things, and a dispute resolution mechanism as well.
NDP
Charlie Angus NDP Timmins—James Bay, ON
In terms of a policy decision, I think it would have to come from the government, but in terms of the Canada Media Fund, what we're seeing now is such massive vertical integration that people will be able to tell consumers, “Get our cellphone coverage and you're going to get exclusive access to our shows.”
Given the dramatically changed media landscape, if Canadian taxpayers' dollars are put into a show, will we we ensure that all Canadians are going to be able to access it on whatever platform they want, or are we going to allow Canadian taxpayers' money to be used to create and support the walled gardens that are being set up by the very large telco, broadcast, and cellphone giants?
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Angus.
Madam Cliff, do you want to try to answer that question?
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
Well, I have to be careful, because a lot of this is the prerogative of an independent board. The board is independent of the funders, including the Government of Canada, and independent of the cable and satellite companies. They undertake the measures and set the guidelines that ensure the terms for that content being made available, so I really can't speak on behalf of the CMF in that regard.
NDP
Charlie Angus NDP Timmins—James Bay, ON
I was asking if, on behalf of the government, you have looked at it as a government policy. You're going to have to look at that.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
Access to all content...?
NDP
Charlie Angus NDP Timmins—James Bay, ON
Well, it is because it's taxpayers' dollars. That was my question.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
I think that's an issue that has already been put on the table by the CRTC in terms of vertical integration. It came up in the BCE hearings already this week, and in June we'll be watching that process in particular very carefully.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Angus and Madam Cliff.
We'll go to Mr. Del Mastro.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you very much, Mr. Chairman.
I would also like to echo Mr. Angus's comments. I want to thank the departments for their work on this. I think you took our request very seriously and compiled quite a comprehensive package here for us, and I appreciate that.
It seems the departments are fully engaged with this topic and process, and I'm encouraged by that as well. However, we sit in a period of rapid transition in technology. There are a lot of adjustments that seem to be being made, and a lot of changes in the approach to business and to how Canadians are consuming and posting media.
I do have some concerns. The CRTC came out with a decision this week that went over like a lead balloon here in Ottawa and with Canadians, although I almost half think that some of the decisions they were making may reflect the fact that they feel their hands are tied with respect to maintaining the Canada Media Fund over the longer term. Specifically, I look at products like Netflix or Apple TV, which are usurping the need for a BDU contract entirely. In fact, all you need is an Internet account to watch whatever media you want, and you won't be contributing towards the Canada Media Fund at all.
This is obviously dramatically driving up the amount of data that's flowing over Internet pipelines. In fact, I'm told it's up by more than 20% this year. The threat, to me, is that this continues to grow. I can tell you, just from people I know and friends I know, that in the last number of months a significant number of them have added Netflix at their homes and adapted that into their lives. Many of them are saying that, for instance, they don't need the Movie Network now. It's half the price and it has all kinds of selection on it that they didn't have before.
This is an alarming trend. If people start to unplug from the BDUs and go simply to Internet-based models.... Even our local television networks, in fact our BDUs, could start to broadcast all of their content simply over the Internet and avoid the Canada Media Fund. If we can't tax the Internet--which is what a fee on Internet would be, similar to the fee that's paid right now by BDUs into the Canada Media Fund--doesn't that threaten the Canada Media Fund? Is that something the department has considered--the longer-term effect of these changing platforms?
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
It's part of our policy. We always look at how the money flows and where the money is coming from and how that might be impacted by the changes. In terms of the Canada Media Fund, I understand the concern that the member has expressed, but so far it is a fund unlike most other federal funds. It continues to grow every year. As long as the revenues at the cable and satellite companies continue to grow, the fund will grow as well.
I'm reluctant to get into a conversation about the Internet. It is subject to the cultural groups seeking leave to appeal before the Supreme Court on the CRTC's ruling on ISPs, so I'm reluctant to say much on that point, but I think anybody who's looking at this landscape needs to be looking at how the money flows and what the potential applications are down the road in terms of where that money is coming from and what the market forces are. With regard to the Canada Media Fund, working towards trying to ensure the longer-term sustainability of the sector is also an important objective.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Right. I appreciate that.
We've heard presentations from companies like Telus. We heard from Shaw Media. CTV has also expressed similar sentiments, as has the CBC, on the importance of the local programming improvement fund and the importance of the Canada Media Fund in maintaining a healthy Canadian broadcast sector. However, these funds--the local programming improvement fund and the Canada Media Fund--are predicated on having a BDU hookup. In the world of inexpensive, unlimited data and long-tail industries that are jumping beyond the CRTC and CanCon rules, I'm deeply concerned about what this means for local television--what it means for CHEX TV Peterborough, for A Channel Barrie, for A Channel Windsor, and for all these channels that are reliant upon the various systems that have been put in place. I think it's changing very rapidly, and I'm wondering if any consideration has been given to that shift, because from my perspective it seems to be happening at a very rapid pace.