Information & Ethics Committee on Oct. 18th, 2011

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Madam Chairman.

Thank you, Mr. von Finckenstein, Mr. Sheppard, and Ms. Laizner for appearing today. I much appreciate your attendance.

Mr. von Finckenstein, you said four central principles have governed the CRTC during your mandate and you chose to put transparency first. You put that as the overarching principle that's guided your governance of the CRTC, and I want to commend you for that. You said that, as the CRTC is a public organization, members of the public should have the clearest possible picture of how you operate and how they can interact with you as a government institution and that your golden rule was simply this: when in doubt, disclose.

I think a lot of folks would argue that when in doubt the CBC has exercised section 68.1 and forced those seeking access to information to achieve it through the courts. The Information Commissioner has gone to court and in fact won a ruling. You've indicated that if a matter goes to court and the court rules that the information should be released, you'd release it. The CBC has actually taken the next step of appealing that, following a court decision, and not appealing whether it should be released but whether or not the Information Commissioner has the right to see it in the first place. I think it's important to establish that.

Mr. Angus has raised this issue about public versus private broadcasters and talked about what we expect of private broadcasters. I know you request and receive financial filings, and so forth, from the private broadcasters. Do they tend to comply with that? Do you have problems with the private broadcasters complying in that regard?

[Konrad W. von Finckenstein]

No, we ask for all sorts of information from anybody who's licensed. Whether it's a broadcaster or a distributor of cable content, they file it with us. Each year we publish a volume this thick called the Canadian communications report, or something like that.

[Graham Sheppard, Senior Annual Returns Auditor, Canadian Radio-television and Telecommunications Commission]

The Communications Monitoring Report comes each year.

[Konrad W. von Finckenstein]

It is considered more or less the bible by the industry, that is, as reliable data of what's happening in the industry, including how many people are watching, what they're watching, how much they're spending, the times, and how the audience shifts, etc. It's all aggregated so it does not in any way violate confidentiality, but it gives us an overview and gives the whole world an overview of what's happening in the Canadian communications field.

[Dean Del Mastro, Conservative, Peterborough, ON]

And you're building all that off the filings of the various licensees across the country?

[Konrad W. von Finckenstein]

Absolutely.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

I want to point out something else, because it appears that we're often talking about competitors in the Canadian market. First of all, when we speak of CBC and anyone else, I think that when we use the word “competitor” we're somewhat misusing it. You recognized a difference between the CBC and the other broadcasters when you undertook the hearings on value for signal, when you determined that as a public entity the CBC should not be seeking value in that fashion since the public is already contributing toward that.

Could you expand on that a little? You did recognize there was a difference.

[Konrad W. von Finckenstein]

I'd like to deal with the first point about competitors. They clearly are competitors in trying to attract eyeballs. And also, since the CBC lives off advertising for a large part of its money, they compete for advertisers. When we had the value for signal hearings, it was a question as you know of the whether there should be fee for over-the-air signals that are being retransmitted by cable television. Right now they retransmit those signals but they don't pay for the content; they pay for the content of specialty channels. We said that was really for the marketplace and that they should be able to negotiate it. The broadcaster should be able to withhold the signal, or the cable company could refuse to carry it, and let them work it out. That's what we suggested. This has been challenged and is before the courts right now.

We did not apply that to the CBC because the CBC is a public broadcaster; it's supposed to fulfill a public mandate. Therefore, withdrawing it from the public seems to be counter to the mandate. We also didn't think the CBC would have much negotiating power in this thing. We felt that the CBC was, after all, a crown corporation mandated by Parliament for a specific purpose. If it needs funding, that funding should come from Parliament; it should not come through some sort of negotiating rights that we establish.

[Dean Del Mastro, Conservative, Peterborough, ON]

I agreed with your finding on that.

You established six criteria: evidence of audience success; viewer satisfaction; increases in local advertising revenues; increases in original local news stories; the number of local news stories that are picked up nationally; the expansion of news bureaus; and increases in the quantity of the local programming broadcast. These are what you're seeking to see from stations taking advantage of the LPIF program.

Has CBC demonstrated these things, or have they just given you an accounting of where they spent the money?

[Konrad W. von Finckenstein]

CBC, like everybody else, has given us the costs addressing these points. Everybody does it slightly differently, and we have to evaluate.

This LPIF program, as I mentioned, was born in the middle of the financial crisis, when there was a danger of many stations going dark. It's a temporary program. We are going to re-evaluate it this coming spring. As part of that evaluation, we're going to look at all of these things that people have filed in order to determine, first of all, whether the information is meaningful; and if it is, whether in light of it, it makes sense to continue the fund, or whether the fund should be changed, abolished, or.... It will just be to get a feeling for what is happening in local programming, because that's really where the numbers....

[Dean Del Mastro, Conservative, Peterborough, ON]

One of the reasons that we need accountability and financial transparency in this matter is that some, I suspect, will come before the CRTC to argue for a larger LPIF. I suspect that BDUs will come before you and suggest that it's not required at all in some cases. The decision that the CRTC must make will be based on all of the data that you're presented with, and you'll review it in its entirety.

[The Vice-Chair, Conservative, Patricia Davidson]

Thanks, Mr. Del Mastro.

[Konrad W. von Finckenstein]

Thank you.

[The Vice-Chair, Conservative, Patricia Davidson]

We'll now move to Mr. Andrews for seven minutes, please.

[Scott Andrews, Liberal, Avalon, NL]

Thank you very much, Madam Chair.

Welcome to our panellists this morning.

Since we're talking about access to information and freedom to access that information, and since you mentioned that if you're asked for something that you cannot divulge, you'll send it to the courts, I would ask the following. If you were to change any of the access to information laws to free up some of what you see yourself as needing to report, what changes to those laws would you recommend to this committee to improve or grant more information when requested?

[Konrad W. von Finckenstein]

We're talking here about third-party information, that is, information that is not ours but which people have filed with us and they claim is commercially confidential.

This is a very dicey thing. On the one hand, you want to disclose as much as possible; on the other hand, you want to have people file in confidence. You don't want them to be reluctant to file because they're afraid you will disclose it and hurt them financially, or hurt them by releasing data that is extremely sensitive in their view.

I think the present system is fine. You could improve it. You could decide that the Information Commissioner rather than the court should make a decision. You could also mandate time periods, as we have done in other pieces of legislation, so that when there is a claim, it goes before the court and people have so many days to file and that a decision should be made in 30 days, etc. So you could take out the delays.

But the basic principle that a neutral third party has to decide whether your claim to confidentiality is legitimate or not is, I think, correct. I wouldn't want to be in a position of deciding a case in which CTV claims something is confidential and I don't think it is, and so we disclose it and hurt them commercially.

By definition, being the regulator, we have a certain point of view, a certain attitude towards these issues; we don't have the neutrality that's required to decide this issue.

[Scott Andrews, Liberal, Avalon, NL]

So you would like to see someone else take that out of your responsibility?

[Konrad W. von Finckenstein]

It is out right now: as I say, it is with a court.

You asked me how it could be improved. I think procedural improvements could be made and the process could be sped up. But the basic principle that a third party decides is, I think, correct.

[Scott Andrews, Liberal, Avalon, NL]

Okay.

Just at the end of Mr. Del Mastro's questions, you were talking about the LPIF and about how you're going to re-evaluate and re-calculate it. Could you explain that a little? How much more time needs to pass? Is this something that's going to carry on for two or three years?

I'll let you explain that first.

[Konrad W. von Finckenstein]

The fund has now been in operation for three years. As I've mentioned, Canadians really value local television for what it is: it is local and brings to the news what is happening in your local area. We've heard that over and over in our hearings. Yet when you run a television network, you find that it is very expensive and isn't self-financing. Therefore, you try to commoditize it: you try to have general news for a whole region or the whole country, rather than just local news in one locale.

We decided, since this is key for local television and obviously isn't self-financing, that we should make sure that it is improved, that there should be sufficient money. It starts with such things as having decent equipment, having enough reporters, being on the scene, and doing a professional job—not with a more or less amateur video camera, etc.

We had a hearing to examine how much it should be. We first set it at 1% and then we set it at 1.5%. We decided it can only be for the small markets, i.e., the markets that really don't have the size to support themselves in both English and French. We have a formula whereby you have to prove your eligibility: you in effect have so many hours of local newscast in that region and redistribute it. It is a fund that is operated by a law firm.

The question now becomes, has it been successful? It's $100 million per year, which we have provided for three years now. Have we had the desired effect? Has the local programming stabilized? Has it met with receptivity on the part of the viewers? Has there been increased viewership? Is it appreciated? Have some of the local stories that otherwise don't get reported been picked up and broadcast nationally?

As Mr. Del Mastro pointed out, there are two sides. One side thinks it's too little, that we need more. The other one says you don't need it at all; get rid of it. So we said, let's have a review in the spring of 2012 after three years' experience. We'll have a public hearing at which both sides will come forward. Then on the basis of the information we gather and the evidence presented before us, we will decide what to do.

[Scott Andrews, Liberal, Avalon, NL]

In your statement you talked about the indicators that document whether the funds have been put to good use. Are these the only indicators, or are they just a summary? How many indicators do you have?

[Konrad W. von Finckenstein]

These are the ones on which we ask them to report. Obviously, when we have a hearing, people can bring forward whatever evidence they have to show that local programming either does or doesn't work.

[Scott Andrews, Liberal, Avalon, NL]

When you review whether they're meeting these indicators, can you release the information showing that they've met certain indicators, but not another one? Or is that information also not disclosable?

[Konrad W. von Finckenstein]

It's exactly as I said before. Some people may claim it's confidential, in which case I won't release it. If we get a request, and if it has been filed with us..... If it's not filed as confidential, obviously it's public, and it goes on our website. If they file it with me as confidential information, we'll treat it as confidential. If we then get an ATIP request, we'll go through the procedure I just outlined.

[Scott Andrews, Liberal, Avalon, NL]

Thank you.