Canadian Heritage Committee on Feb. 28th, 2011

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

Will they need that as they go digital? I mean, there will be stations like CBC still offering analog until their towers fall down, but at a certain point, analog is not going to be. I mean, it may be a couple of years, but it's....

Is that space going to taken up and sold for other uses?

[Scott Hutton]

The space right now is planned for television broadcasters. What can they do with that space? Well, moving from analog to digital allows a more efficient use. That's why you're clearing up what you're mentioning there. They get to keep a level of spectrum similar to what they were using before, but it's used more effectively. They can use what they have in order to do a variety of things.

Right now most broadcasters are aiming towards providing high-definition television. That's what Canadians and their customers seem to have told them they want. So as opposed to using it for other purposes, they're really aiming at digital television; however, it can be used for a variety of other uses, such as additional TV channels or other forms of communications.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Angus.

Thank you, Mr. Hutton.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

Thank you for your presentation today.

It's interesting; there seems to be....

Frankly, I don't share a lot of the concern that deals with digital transition. If you compare Canada with the United States, for example, when digital transition occurred there, they didn't have the kind of connectivity that we have in Canada between television viewers and BDUs. We know that 93% of all households are connected to a BDU, be it satellite or cable. We don't know what percentage of the remaining 7% even watch television. So I would argue that in Canada we have very good coverage.

Perhaps you could talk a little bit to the committee about this aspect. I'm aware that obviously you're currently reviewing the Bell purchase of CTV. I think that's something we've taken a supportive position on in our party. Certainly when Shaw bought Global they did make specific considerations for digital transitions for customers who could be affected, not just by providing satellite dishes but also by providing the installation at no charge.

Now, when I was kid growing up on a farm, I remember that with a set of rabbit ears we could get one station in, kind of fuzzy. My parents, back in the seventies, put in an antenna, which cost a lot of money, so that we could get channels. So the signal may have been free, but the apparatus was not.

This is even better. Not only will they get a very clear signal, but they won't even pay for the equipment to connect. I thought that was a pretty good gesture on behalf of Shaw, and a pretty good measure that the CRTC took in terms of actually guaranteeing that viewers in those areas would in fact still receive television signal.

Could you expand on that a little bit?

[Scott Hutton]

Certainly.

First of all, compared to the U.S., we are slightly further ahead on cable and satellite penetration, so there is an advantage there. We mentioned that the U.S. converted two years back. That extra time, being a fast follower in this case, has allowed greater penetration of digital TV sets, even further reducing the need for special conversion units and basically opening Canadians up to the advantages of digital that much sooner.

In recent transactions by both BCE and Shaw, both companies had proposed, as part of their tangible benefits packages, plans that address digital transition, and in both cases were speaking about rolling out digital transition to rural areas, effectively. The key one for us, we'll see...on BCE's, we've yet to approve that transaction or come down on a final determination, so I'll reserve myself on that one. But on Shaw, you are quite right: they have earmarked $15 million toward helping to ensure people do not lose service at the end of the day. They will be provided with a clear digital signal from Shaw satellite services, a free box, a free dish, and free installation on that front.

[Dean Del Mastro, Conservative, Peterborough, ON]

In my riding we have a local television broadcaster, and I believe we have a CTV signal that's also broadcast higher up on the band, but I'm really not hearing anything from any constituents on this. This isn't a new issue. It's certainly not a new story. The CRTC indicated that we were moving in this direction quite some time ago.

Is the CRTC hearing or are you hearing from any consumers? Are you hearing from Canadians who are really concerned about this? I'm not. I'm just curious. Are you hearing anything?

I find that in terms of the connectivity, from my perspective, with the exception of some folks who have cottages and who maybe can't position satellites through the trees such that they can get reception, or folks with RVs and so forth who are very seasonal in my region, I'm not hearing anything from anyone indicating that they're really concerned about this.

[Scott Hutton]

We have not had an onslaught yet of consumer requests or information. What we've been trying to do is, in the meantime, minimize the impact on loss of service. That's been our objective to date. We were concerned that Canadians, even if they are few in number, should be able to maintain some level of service, and through the variety of means we've put in place, we are ensuring that.

[Dean Del Mastro, Conservative, Peterborough, ON]

I just wanted to thank you for your concern for those consumers who could be affected. I think you are coming up with a good mitigation plan and I also support the transition to digital. Thanks for everything you're doing on it.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Del Mastro.

Madam Crombie.

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

Thank you, Mr. Hutton.

Thank you to our guests for attending today.

I'm just trying to get a handle on the numbers. There are about one million people affected in the mandatory markets, am I right? Sorry, that's households, one million households. There are 900,000-plus households, and in the non-mandatory markets there are about 100,000 or slightly less. Am I correct?

In the mandatory markets, it will cost about $30 for a converter box--you've found something less expensive than the original forecasts--and for satellite in the non-mandatory, it will be about $300.

Is that correct? Is that what we're looking at?

[Scott Hutton]

That's what we're looking at.

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

So what's the total aggregate cost to consumers that we're expecting?

[Scott Hutton]

Essentially, in the mandatory markets, those for whom the television stations will be converting, we're looking at around the 900,000 number. So in their case, there are various options, but the boxes, thanks to us being a couple of years behind the U.S., manufacturing being what it is, and extra availability from the sets in the U.S., they seem to be as low as $30, whereas in the U.S. they're at $75.

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

So the aggregate cost to consumers in the briefing note we received was about $64 million. Has it come down slightly?

[Scott Hutton]

Yes. That's more or less where we are, but that is a very high number because we're being on the safe side in estimating both, those who will need to purchase equipment or potentially lose service.

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

Last year the CRTC issued a report on the digital transition. You made a number of recommendations that are also in our briefing notes. They were that the government set out a clear policy and coordinate the implementation plan for Canada's digital transition, that it fund and lead a coordinated national consumer education and awareness program, and that it consider funding for a consumer subsidy program for the purchase of digital converter boxes and satellite receiving equipment.

Do you still stand by these recommendations?

[Scott Hutton]

I think the commission has moved away from the third one. Having moved from being a few years behind the United States and boxes as low as $30, we think the latter one is no longer necessary.

What is key right now for us is coordinating. That's what we're working on with the Department of Canadian Heritage and the Department of Industry, along with broadcasters. We want to get the message out to consumers. That's the key thing, and I think we're all working together to that end.

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

Is there a coordinated national consumer education awareness plan? Is it led by you? Is it led by the government? Where are we with it? You said it was the third recommendation that you moved away from.

[Namir Anani]

Certainly, our focus is to make consumers aware of the availability of these converter boxes, of where to get hold of them. Discussions are currently taking place on this with the broadcasters.

[The Chair, Conservative, Michael Chong]

I'm going to interrupt for a minute, Madam Crombie, because everybody is dancing around this, and I think it's important. I won't take from your time.

Anybody with a flat screen TV or a CRT TV that has been purchased in the last couple of years will require no additional equipment. The switch will be automatic.

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

Granted, but not everybody has that, especially in the rural markets.

[The Chair, Conservative, Michael Chong]

I understand that, but I just wanted to put that on the record because I'm not sure if everybody is aware of it. I think the public needs to be aware of it. In other words, anybody with a flat screen TV or a recently purchased CRT TV will require no new equipment. The switch on August 31 will be automatic. They won't notice a thing.

So I'll give the floor back to you. I just wanted to put that on the record as chair because nobody has asked the question. I'm worried that people are going to have the wrong impression.

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

But that's five months away, and not everybody has $1,000 to pay for a new TV.

[The Chair, Conservative, Michael Chong]

Understood--I just wanted to put that on the record so that nobody was misinformed about the situation.

You have the floor.

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

Can you clarify something? You're talking about the people who have those TVs?