Merci beaucoup, monsieur le président.
In front of you, ladies and gentlemen, you should have a dark blue covered deck. I was actually not going to have speaking points, but I will just speak to the deck as we go through. It's about 10 pages. As you know, I don't usually have prepared speeches when I come before you; I just have a conversation with you.
Page 2 just sets out the context of some of the major developments in the history of broadcasting in Canada. You'll see there have been significant events. I do believe the transition to digital is akin to the transition in the sixties of the introduction of colour television, as well as the introduction of satellite distribution in the 1990s. All of this transition flows from the fact that the CRTC, in 2007, set August 31, 2011, as a transition date.
From the very beginning of the Canadian broadcasting system we've always been in analog. It began with radio being in analog, and of course a decade ago we had the transition of distribution by DTH and cable to digital distribution.
What is new here is that this will be the first time we will have over-the-air Hertzian transmission by digital in a permanent manner.
On page 3, I'd like to bring your attention to the two first percentages there: 63.3% of Canadian households subscribe to cable, and if you add to the 29.2% of Canadian households that currently subscribe to satellite, that gives you about 92.5%. That's why you've been hearing the numbers of 92% or 93% of Canadian households being completely unaffected by the upcoming transition, because it'll be completely seamless to them. It happens in the background and they don't see it. So the issue is very much about the potential for up to 7% of the rest of Canadians. But keep in mind that you can't just do the subtraction between the 93% and the 100%, because there are people in that group who don't watch television or who are watching programming through broadband distribution or other means.
So spectrum can certainly be used more effectively, and this is what the transition is about. So many people are now relying on distribution systems, including the Internet, to get their programming choices.
On page 4, it basically says that we must transition to digital in order to use the spectrum more efficiently. We know this public asset, in other words, public airwaves, can be used more efficiently in order to accommodate future generations of wireless and public safety services such as police and fire departments.
It will mean a better picture for Canadian consumers. I am not sure whether anyone at the table has had a chance to watch any over-the-air TV as opposed to through a distribution system, the picture you get with digital is unparalleled. Both the picture and the sound quality are significantly better than before. It also gives you flexibility in terms of high-definition viewing. The content may not always be offered in high definition but oftentimes it is, and this gives you that option as well as other features.
Page 5 basically shows you what we are talking about.
The old broadcasting spectrum that was the old analog from channels 2 to 69 is where television broadcasting used to occur; digital allows compression. Channels 2 to 51 will now be used across the country, so it frees up the wireless and public safety in the 52 to 69 and uses the spectrum in a more efficient manner.
The conversion in Canada, on page 6, certainly puts Canada in the middle of the pack. There are countries we could have added. There is Germany, which was 2010, and Italy in 2012, but essentially the Canadian experience is right in the middle, which makes a lot of sense in light of our North American geography.
The date was set by the CRTC. Many markets, but not all markets, will have to move to an analog shutdown by August 2011.
On page 14 of the deck you'll see an annex that actually lists the various communities and what's happening in those various communities, which I think should be helpful.
The Canadian approach to the digital transition is a shared responsibility.
As I mentioned earlier, on page 7 you'll see that the CRTC set the date and created the regulatory framework for the transition. You heard from the CRTC last week.
My colleague Marc, from Industry Canada, will speak in a moment, and he will talk about the more technical and spectrum management issues around this. Canadian Heritage is responsible for the broadcasting policy.
More importantly, the Prime Minister has asked Minister Moore to have a federal lead with respect to the transition, and we in the department are happy to work with our various colleagues to do that. The overall goal is to ensure there is a smooth and predictable transition for Canadians.
On page 8, as I mentioned earlier, over 90%—actually closer to 93%—of Canadians are completely unaffected by this. And you shouldn't assume that the other 7% are necessarily going to be affected. Some don't watch TV. Some of those Canadian households get their audiovisual content though broadband. Others are part of the black or grey market for distribution of signals in Canada and are therefore off the grid, in a sense. One can't assume that the 7% equates to people who will be necessarily affected.
However, for people who potentially will be affected, which could be up to 7%, there are a lot of choices for them.
Unlike colour television, which was backward compatible—when you had a black and white set you could get colour signals onto your old TV—digital television doesn't work that way. You need a converter box or a digital set. We know a lot of people are buying these new TVs that are digital capable because they are a hot item in the consumer electronic area. And the prices of the boxes are coming down. When we were looking at this a number of years ago, they were in the $75 to $80 range. Here I've cited the price of $45, and I know there are some available for as little as $30.
This is the experience in many markets. As this is coming out, the prices come down because of the market response. Alternatively, there are cable and satellite digital receivers that are also an opportunity.
It's interesting to note as well that the CRTC has made adjustments to its regulatory policy. Canadians are able to benefit from packages to get their local signals only. In fact, in the Shaw-Global transaction, there's a $15 million amount set aside as part of the benefits package to provide receivers for some Canadians in the priority markets.
Now, on page 9, let me speak about the communication activities. I think that's where we're at in this phase right now. Our greatest challenge is that this is a national policy framework, but the impacts are very local. The communication challenge is trying to give individual Canadians the information at the local level.
Broadcasters are in the best position to inform consumers. They know of their detailed plans in their communities. We've been working closely with them, and with Industry Canada, to get that specific information.
You may have seen that we redid our website recently. The architecture of the website provides for detailed knowledge on a clickable map. We don't have the information yet, but we're working closely with the broadcasters to get exact dates of when they're converting and what channels they're converting to, so Canadians will know exactly what to do.
The CRTC has also proposed regulations for a public service announcement, which should be available on-air. The best place to reach people who watch television is through television, though PSAs. The government is also looking at options to supplement that public awareness campaign.
We and Industry Canada have been working closely for over two years, with monthly telephone calls to prepare for this transition, and more recently with the CRTC and broadcasters. We are very much in an information-sharing mode. As I mentioned, we also have a 1-800 number on the website—I don't think it's an 800 number; it's a toll-free number that people can call.
In conclusion, the transition is going to provide better quality for Canadian viewers. It's going to free up a valuable spectrum for advanced wireless and public safety.
The government objective is to make the transition as smooth and as predictable to Canadians as we can make it. Heritage is certainly working hard these days on communication outreaches to make sure that in the coming months the detailed rollout plans are well communicated to Canadians.
I have an annex—and if you have some questions, I can address those—with some diagrams on exactly how this is going to work and which part of the broadcasting system is impacted, as well as the various communities affected.
Those are the introductory comments I have, Mr. Chairman.
