Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 13 - Evidence - September 25, 2003
OTTAWA, Thursday September 25, 2003
[English]
The Standing Senate Committee on Transport and Communications is meeting today à 10:50 a.m. to examine the current state of Canadian media industries; emerging trends and developments in these industries; the media's role, rights, and responsibilities in Canadian society; and current and appropriate future policies relating thereto.
Senator Joan Fraser (Chairman) in the chair.
[Translation]
The Chairman: Welcome to all — senators, our witnesses, members of the public, television viewers — to this meeting of the Standing Senate Committee on Transport and Communications, that is studying the state of the Canadian news media.
The committee is continuing its study by asking questions on the role that the State should play to help ensure that our news media remain healthy, independent and diverse, in light of the tremendous changes that have occurred in this area in the past few years such as globalization, technological change, convergence and concentration of ownership.
[English]
This week, we are hearing from government regulators. On Tuesday, we heard from the Competition Bureau, and today we welcome representatives of the CRTC, the Canadian Radio-television and Telecommunications Commission.
We are joined by Mr.Charles Dalfen, Chairperson of the commission, Ms. Andrée Wylie, Vice-Chairperson, Broadcasting, and Mr. Marc O'Sullivan, Executive Director, Broadcasting Directorate. Thank you all for being with us. Our format, as I am sure you know, is an opening statement from the people who are appearing, and then a question period.
[Translation]
Mr. Charles Dalfen, Chairperson, Canadian Radio-television and Telecommunications Commission: We are pleased to appear before you as you continue your review of the current state of Canada's media industries.
I have been following the testimony of other witnesses and I understand the difficult challenge you face as a committee.
[English]
A number of the issues you are dealing with are ones that the CRTC must contend with on a daily basis. Because of our limited time together, I will focus today on how the CRTC deals with issues of ownership concentration in broadcasting and cross-media ownership, and how we seek to ensure and maintain a diversity of voices in Canadian broadcasting.
Our mandate is spelled out in the Broadcasting Act, which sets out the broadcasting policy for Canada. The act declares, among its other objectives, that the Canadian broadcasting system and its programming should serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada; encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity; and provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern.
In addressing applications before us that raise issues of cross-media ownership or media concentration, the commission seeks to give effect to these objectives while at the same time trying to balance them against the others set out in the act. Unless an applicant is ineligible to hold a broadcasting licence by virtue of a direction of the Governor in Council issued under the act— for example, a non-Canadian entityor, between 1982 and 1985, an owner of a newspaper in the same market— we must consider each application on its own merits. While cross-ownership and concentration issues are always of concern, in some cases these concerns may be counterbalanced by offsetting advantages. In other cases, such concerns are not outweighed and result in denials.
[Translation]
In July of this year, for example, the CRTC refused approval for TVA, a subsidiary of Quebecor, to purchase seven AM and one FM radio stations from Astral Media Inc. On balance, the commisssion was not convinced that the recovery strategy for AM radio in Quebec proposed by the applicant and its eventual benefits would significantly outweigh the concerns about concentration of ownership and media cross-ownership raised by the application.
On the other hand, in April 2002, the CRTC approved a transaction that transferred control of these stations to Astral Radio Inc.
In this case, in view of the decline in the financial situation of French-language AM radio in recent years, the commisssion was convinced that the synergies that Astral Media identified between its AM and FM operations would revitalize the whole of French-language radio and would ensure greater long-term stability for AM radio in particular.
The commisssion also considered that the applicant's plan to give the local AM station in each market a central role in the collection and processing of news, would better serve both AM listeners and listeners of local FM stations Radio Énergie and Radio Rock Détente.
The commisssion therefore concluded that, all things considered, the benefits to be derived from the transaction, particularly for French-language radio, outweighed concerns related to the increased ownership in the hands of Astral.
And in the summer of 2001, the CRTC issued a decision that transferred effective control of TVA to Quebecor Media Inc. On this occasion, despite concerns over cross-media ownership, the commisssion was convinced that this proposal would ensure the ongoing growth and improvement of TVA's national French-language television network and its other regulated activities.
[English]
In cases where we deem cross-ownership issues to be offset by other advantage, we nevertheless establish safeguards to ensure that ownership concentration does not reduce the number of news and information sources available to the public. For instance, to protect the independence of the various news outlets and information sources that would be affected by the Québecor transaction, the commission also accepted safeguards that were proposed by the applicant that included adherence to a code of professional conduct applicable to TVA, LCN and LCN Affaires, and the establishment of a monitoring committee to deal with possible complaints.
Also in 2001 the commission addressed cross-media ownership issues in regard to the two largest media ownership groups in English Canada when it renewed the licences of CTV Inc. and CanWest Global Communications. In all of these cases, the commission imposed a number of safeguards as conditions of licence. These require maintaining separate and independent news management and presentation structures for TV stations separate and distinct from those of affiliated newspapers; requiring decisions on journalistic content and presentation for television to be made solely by television news management; prohibiting television news managers from sitting on editorial boards of any affiliated newspapers, and vice versa; establishing monitoring committees to deal with complaints from any source; and reporting to the commission on an annual basis on any complaints received.
In addition to trying to prevent a reduction in the number of sources of news and information available to Canadians, we have also been quite active in trying to increase the diversity of voicesinthe Canadian broadcasting system. Over the past five years, the commission has licensed seven new television stations and 35 radio services across Canada. The number of specialty channels is above 100 today.
[Translation]
Last October, in an effort to add to the sources of local programming, the commisssion released a new policy framework for community-based media. The policy sets new requirements for the cable community channel, with particular emphasis on local programming and access for community groups.
It also creates new classes of licence for community television services. One such station, Télémag, has already been approved in Quebec City. Another application for a new community television station in Leamington, Ontario is now being considered by the commisssion. We are confident that our approach will provide communities across the country with opportunities to create new local television services and programming that will reflect their needs and concerns.
[English]
In July of this year, the commission strengthened local, independently owned, small-market television stations by providing access to satellite distribution for most of them and by establishing a new fund to help all of these stations meet their commitments to local programming.
In addition to licensed services, Canadians have numerous foreign sources of news and information available to them by cable and by satellite, and many more sources are available to the almost 70 per cent of Canadians with access to the Internet.
I hope these remarks are helpful. All of us at the CRTC are looking forward to your forthcoming report and recommendations. My colleagues and I would now be pleased to answer questions.
The Chairman: Thank you very much, Mr. Dalfen. Indeed, we do have questions.
Senator Graham: I had at one time a bit of a career, and a very checkered career, that was associated with broadcasting. I have more than a passing interest in the work of the CRTC.
I notice that Ms. Wylie is Vice-Chairperson of Broadcasting and Mr. O'Sullivan is Executive Director of Broadcasting Directorate. How do you differentiate between responsibilities in terms of broadcasting and the broadcasting directorate?
Mr. Dalfen: That is an interesting question and my colleagues may wish to add to whatever scurrilous remarks I make on the subject.
Mr. O'Sullivan is the chief of staff of the Broadcasting Directorate. The commission is divided into five divisions or directorates, telecommunications and broadcasting being the operational and largest chunks.
Mr. O'Sullivan is the head of the broadcasting directorate. As you know, we have two acts that will give effect to and implement the Telecommunications Act and the Broadcasting Act, and so they take their marching orders from the acts and the regulations under those acts. We also have the secretary general, who handles corporate matters, broadly speaking: finance, human resources and so on. We also have a communications branch and, last but by no means least, the legal branch. That is the structure of the commission. Mr. O'Sullivan heads up one of the two major operational branches.
The vice-chair of broadcasting sits at the commission level. Although she does not have nominal executive responsibility, she is a vital assistant to me in my work in discharging executive responsibilities, as well as overseeing many of the files and, under our bylaws, chairs the broadcast committee of the commission that looks into the routine matters regarding the scheduling of hearings and the approval of what we call routine applications. In that sense, she has a very active role in the commission and, in an indirect way, the broadcasting staff reports to her for those activities. Overall, they report to me as CEO.
Senator Graham: The CRTC came into being by an act of Parliament in 1968. Prior to that, your predecessor was the Board of Broadcast Governors, the BBG. Have the terms of reference changed much between the BBG and CRTC? Presumably they would evolve over the years, but could you explain if there are any essential components that we should be aware of?
Mr. Dalfen: I guess the major difference is that the BBG made recommendations to the cabinet while the CRTC makes decisions as to licences that are, in effect, binding under the act. I gather that the BBG held hearings on competitive applications. I think CFTO was licensed by the BBG in 1960 or 1961 on that basis, but they did not have the power of deciding the matter. They would make their recommendation to the cabinet. I could stand corrected, but I would have thought that on major licensing decisions, their advice was followed a good deal of the time by the cabinet.
Senator Graham: On Tuesday, we had the Competition Bureau before us, and reference was made by yours truly to a statement that was made by the Competition Bureau before the Canadian Heritage Committee in the other place in May of 2002. I will quote one line from that testimony. This is from the Competition Bureau. ``At the same time, the CRTC review of broadcasting transactions should focus solely on the impact that mergers would have on core cultural values and the diversity of voices.'' Obviously, the CRTC should not review broadcasting transactions from the perspective of commercial viability.
I was startled, or surprised if not startled, by that conclusion on the part of the Competition Bureau. I remember in another life, in another part of my career years ago, I was the general manager of a news broadcasting station in Ontario. There was an application before the then-BBG by a company to establish a new FM station in the area which some of us thought would impact negatively on the commercial viability of the existing stations, and the BBG ruled in our favour. Yet, the Competition Bureau seems to think that you do not have any role under your mandate to take into consideration the commercial viability or what will happen in the marketplace, but that you should be solely concerned with the cultural aspect of the application.
I am wondering if you have a difference of opinion or whether you would like to make some comments on that point.
Mr. Dalfen: I did read that, and I guess I would make two comments. First, it is inconceivable to me that we could either award new licences or examine the complaints of the kind you just mentioned without having the ability to assess the market's ability to absorb new stations and what the market actually is. We do it routinely and have done it for 35 years. I dare say the BBG did it before us when it looked at these. Indeed, we would actually welcome the Competition Bureau's input into those kinds of proceedings. I gather from the transcript that they choose not to intervene as regards specific applicants, and Ican well understand that, but the threshold issue we look at in a new licensing application is not who should we pick but whether the market can absorb a new licensee or two or three. On that question, I would have thought that the Competition Bureau could be very helpful. Under their own act, they do have the authority to make such representations before us, and we would encourage them to do that.
The second comment is that I think the interface document was referred to, which was an effort by the then-chair of the CRTC and the then-director of the bureau to try to be helpful by describing the relative powers of the two organizations. I will quote that document, if I may, because I think this correctly sums up the situation and possibly the dilemma that we have, because I tend to agree that it ought to be clarified. For all of the previous years, one sought approval of both agencies, whether it was acquisition or change of control in broadcasting. Until 2002, the decisions were ad idem, but in 2002 there was a divergence in respect of the Astral matter that I referred to, and this can only be said to have led to confusion and misunderstanding, so I would second the view that it should be clarified. The quotation is the following, and this is from that interface document of the two organizations:
Under the Broadcasting Act, prior approval of the commission is required for changes of control or ownership of licensed undertakings. Whereas the Bureau's examination of mergers relates exclusively to competitive effects, the commisssion's consideration involves a broader set of objectives under the Act. This may encompass consideration of competition issues in order to further the objectives of the Act. The Bureau's concern in radio and television broadcast markets relates primarily to the impact on advertising markets and, with respect to broadcast distribution undertakings, to the choices and prices available to consumers. The commisssion's concerns include those of the Bureau, except that its consideration of advertising markets relates to the broadcaster's ability to fulfill the objectives of the Act.
They are not two water-tight compartments, even as set forth in that statement, and one encompasses the other. Possibilities for confusion, therefore, arise, and hence the need for clarification. Having said that, we think they do have something to bring to our deliberations and would welcome their participation in assessing the absorbability of a new market for new radio or television stations.
Senator Corbin: I will follow closely on the concerns expressed by my colleague, because I had intended to broach that matter.
Would it be more efficacious and simpler for you to subsume some of the responsibilities now devolved in the bureau rather than having this back and forth exercise between both of you, one checking the other out and criticizing or even ruling, in a sense, totally opposite to what your primary considerations are? Should the government have a look at doing just that and giving you responsibilities? In other words, take the whole field of broadcasting out of the Competition Bureau and give you those responsibilities, adding them on to what you already have?
Mr. Dalfen: I guess I would agree with that. We already play that role, and have to, in order to identify the ability of a market to take new stations.
The issue is whether the Competition Bureau should have a role in these regulated industries. You are probably aware of the regulated industries' defence in criminal proceedings under the Competition Act, where it is a defence to what would otherwise be an offence to say, ``I am a regulated industry and I am doing it because my regulator has either authorized it or required it, and that gives me a defence against the charge that I have committed an offence.''
In effect, it is a carve-out. Probably that should be clarified in both broadcasting and telecom, and that carve-out, as you suggest, should probably be considered by the political decision-makers and by the government.
Senator Corbin: We will pursue that further at another time with other witnesses.
The whole length of the Saint John River Valley down to St. Croix and the Bay of Fundy in New Brunswick has constant parasitic invasion of Canadian airwaves by U.S. broadcasters, who suck in a lot of Canadian advertising. What are you doing about that? Are you monitoring that situation? There seems to be more and more of it.
Mr. Dalfen: Are you talking now about border broadcasting stations?
Senator Corbin: Yes.
Mr. Dalfen: As you know, senator, this has been a problem for years, right across the border. Most notably, a station in Bellingham, Washington, across from Vancouver, was set up essentially to tap into the Vancouver market in television. It has set up offices in Vancouver and has been draining advertising revenues and so on. That is the most notorious one, but radio stations do this right along the border. It has been an ongoing problem.
The Income Tax Act, for many years now, has denied Canadian advertisers who advertise on these border stations the ability to deduct those expenses as legitimate under the act. That has been helpful, but it is not the end of the problem.
We try to ensure that Canadian audiences have good, solid offerings that can compete against those stations in the listening and viewing marketplace, but it is tempting for these businesses to do that and they continue to do it.
Is the situation worse or better? I would say it is no worse. I would say the major impact is still the Income Tax Act provision rather than anything else. We have no other tools to close those stations down. Over the years discussions have been held with the FCC and so forth, but I cannot say that they have amounted to a whole lot.
Senator Corbin: It seems that the American broadcasters are pushing their luck. Is the North American Free Trade Agreement a consideration in this whole issue?
Mr. Dalfen: I do not think so. I will look to my counsel for comfort and reassurance here.
Senator Corbin: I ask this because this is part and parcel of competition and what have you.
Mr. Dalfen: The answer is no. I am not sure I can repeat the good advice he gave me. I got that answer out of it.
Senator Corbin: I appreciate that.
I am sure you do monitor broadcasts, but how well do you monitor broadcasts once you have delivered a licence under certain specific terms and conditions in given markets, and in consideration of the competitiveness and certainly in terms of serving the target public for which a licence was requested of you? How good is your monitoring? Do you sometimes step in to straighten things out when they do not work?
Mr. Dalfen: The last part of your question is the easier part. The answer is yes, we definitely do. The complaint that Senator Graham was referring to is similar to those that we get from time to time. We get complaints both with regard to territoriality and with regard to formats. In the specialty services area, where licensees are licensed as a music or a sports format or whatever, we get numerous complaints about turf encroachment. We try to monitor conditions of licence and adherence to those conditions of licence.
However, as to evaluation, we are largely complaints-driven. That is for two reasons. One is that we are the emanation of the government in people's minds. We find it difficult to take a proactive stance on what people are listening to and hearing and doing and so on. Also, we simply do not have the resources to be able to do that. We rely on complaints that are brought forward to us by licensees or by the public. We get a large number of those, and the ones that we feel are worthy of investigation, we investigate, and proceedings follow.
Invariably, when a complaint comes in about a broadcaster being off his format or whatever, he will get a copy of that complaint and be asked to comment, as a routine matter. However, the bottom line is that we are complaint- and application-driven primarily. The only other tool that we use on an ongoing basis is to gather data for our monitoring report, which we put out annually, on the state of the industry. That report is at a slightly more macro level than the individual kinds of complaints that we get.
Senator Corbin: Finally, can you give us an idea of the number of complaints you receive during a year? The Competition Bureau told us the other day that it receives an average of 80,000, but of course it encompasses a much broader field than you have.
Mr. Dalfen: Yes, several thousand complaints is certainly the answer. We can get back to you if that number is important. I was going to say 3,000, but my staff tells me that that is probably on the low side.
Senator Corbin: Some are frivolous; some are serious.
Mr. Dalfen: Right.
Ms. Andrée P. Wylie, Vice-Chairperson, Broadcasting, Canadian Radio-television and Telecommunications Commission: Senator, besides responding to complaints, of course, if we find non-compliance or difficulties we have the tool of giving shorter licence terms and doing more analysis of the problems that have been found as the result of a complaint. We do respond to complaints, but it may also indeed be followed by closer scrutiny of the licensee concerned.
The Chairman: When you are sending us information about complaints, could you also give us a bit of breakdown/ analysis to indicate the nature of the complaints you get? We are particularly interested in the news and journalism end of things. We would be interested to know how many complaints you get and the nature of those complaints. Are they simply people who are angry because they think some news story should not have been covered or something like that, or are the complaints of a more systemic nature? Do you see what I am driving at there?
Mr. Dalfen: We do have that breakdown and we will get it to you. Incidentally, I mentioned in my introductory remarks that a part of the safeguards that major TV media groups have is these committees that take complaints. On the first period, the reports are in and those did not show that there were complaints regarding the separation of the newsrooms and news management.
The Chairman: How many members of the public know that those committees exist? I did not know it until I was reading a summary of your testimony before the Heritage Committee. Are the people who are affected by these committees required to publicize their existence?
Mr. Dalfen: I do not believe that is part of the condition of licence, but that is a good point. Indeed, that is something I will look into and get back to you with more precision.
Senator LaPierre: Can you remove a licence from someone who breaches the terms of licence and/or who offends you in one way or another, rightly so? Do you remove their licence?
Mr. Dalfen: There is a power of revocation.
Senator LaPierre: How many times has that been done since the birth of this kind of control that we have had through the Board of Broadcast Governors? Could you find that out and let me know?
Mr. Dalfen: I have the answer to that, zero.
Senator LaPierre: Why have a punishment if you never use it? I will not go into that. Thank you very much.
Senator Day: We should let our witness answer the question. He had an answer that I think might be helpful. Did you have something further to add?
Mr. Dalfen: Senator LaPierre's point is well taken on the actual revocations on a compulsory basis. Licences have been given up voluntarily in various cases, but compulsory giving up for offences, not to my knowledge. I do not think we have ever revoked a licence.
The array of weapons is typically short-term renewals, which is a stronger weapon than you might think because it puts licensees under the gun and puts them to the expense of coming back and justifying themselves, and the publicity attended on that is invariably unwelcome. Amending their conditions of licence is another technique. ``You have been a sinner. You will now do the following.'' We have done that as well. The ultimate weapon of revocation denies that service to the public so the threshold is understandably very high.
One point made in the Heritage Committee's report, which I think is worthy of consideration, is that the FCC in the United States and the U.K. regulator in Britain, to name two, has the power to issue fines. This is also something that a large number of agencies in the federal government already have. It probably would be helpful, if our act were being amended, to give us another tool that is short of revocation, the nuclear weapon so to speak, but which would focus the mind fairly well. It is put forward in the Heritage Committee's report, so I underline that. We, like Senator LaPierre and others, are looking for appropriate tools in the arsenal to do our regulatory job without trying to open a pea with a sledgehammer, which is the way revocation is perceived.
Senator Day: Mr.Dalfen, explain a little bit about the cross-ownership issue. You discussed that in your presentation. Between 1982 and 1985, there was a directive from the government with respect to a particular cross- ownership from a daily newspaper owner looking for a broadcast licence. When that was revoked in 1985, what kind of message accompanied that or did you take from that revocation with respect to cross-ownership? You are obviously still applying certain rules with respect to cross-ownership, but the test has to be somewhat less onerous than it was previously in regard to newspapers buying into broadcasting.
Mr. Dalfen: That is correct, senator. We did, and continue to, balance the factors that I set out in my introductory remarks. It is always a concern to us. Where there is concentration, it has to be outweighed. For those three years, it was like the direction on foreign ownership. People were ineligible. We just were not permitted in law to issue licences to people who owned a newspaper in the market, so it was open and shut. It is now not open and shut. We now have to balance all the factors in play. You are quite right.
Senator Day: Did you set up a series of objective standards that some prospective purchaser of a broadcasting entity could go to in order to find out what these objective standards are?
Mr. Dalfen: It is extremely difficult. We have been grappling with it, and I know my predecessors have grappled with that. Canada is not that large a country. You have three or four top-level markets in terms of size. It is hard to provide objective standards that would apply universally in the area of how much concentration you can and cannot permit. How do newspapers, dailies, weeklies and radio stations fit into the mix? It is impossible to actually set a standard that would not appear to be pointing to one particular situation. At least we have not been able to figure out a way of generalizing that.
Senator Day: How does someone who wants to get involved in broadcasting predict how the CRTC might react to an application for a licence?
Mr. Dalfen: I think the decisions set out the considerations very clearly. Because they are very aware of that, they read past decisions. It is a typical legal test. ``Is my situation different? Is it similar, or different? If it is different, how serious a bar will this be to me? Reading the past decisions, how can I outweigh or counterbalance the concerns?'' That is the nature of the exercise.
Senator Day: Does the CRTC feel bound by previous decisions?
Mr. Dalfen: That is a good question. We are not bound in law, but we certainly hope that we do not set forth principles and criteria that we simply abandon in the next decision. We try never to do that, if we can help it. To the extent you have a similar factpattern, you should be able to rely on our past decisions to guide you.
Senator Day: That is a policy from within the CRTC?
Mr. Dalfen: Absolutely, and we have tried to make it as clear as we possibly can for just that reason.
Senator Day: As my final area of questioning in this round, I would like you to comment on section 3 of the Broadcasting Act. In your presentation and your remarks, you outlined some of the objectives. I would like you to look at the third one and comment on it. This is an objective or sort of a guiding principle to provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern. That is a very laudatory objective. When you are doing that, when you are applying that test to a particular factual situation, do you look at the Internet, for example? This is a cross-ownership issue again. Do you look at various other opportunities for the public to obtain expressions of differing views?
Mr. Dalfen: That is a good question. The objective is that the programming provided by the Canadian broadcasting system provides a reasonable opportunity, so you have to look at programs. You have to look at how a licensee presents an issue, perhaps not in one program but across a series of programs, and how they cover various issues. Then you look at the system as a whole and ensure that across the system, this works.
Without being legalistic at all, we do not feel that we would be comfortable if there were imbalance for a protracted period of time at any of those levels in a week of programming in a licensee schedule, or indeed in a market, or indeed across the system, so we try to take that into account. We try to take a broader interpretation. Technically, it only applies in the broadcasting system, but over many years the commission has also looked into media that we do not regulate to look at the diversity of voices in a given market. I brought with me a number of decisions, if you like, but I am comfortable in saying that we always look beyond the broadcasting system.
We would not feel comfortable if it were solved at the level of broadcasting system but, in the market itself, this kind of balance did not exist and there was not an opportunity. Having said that, again, you have to look at all the media outlets available in any given market. When you add into the mix what is available on cable, what is available by satellite, what is available on the Internet, that all helps. Typically, in an application before us, if you are applying and perhaps contributing to concentration, you will try hard to point out all the other media outlets available.
In our monitoring report that I referred to, we did research on a 10-year period, 1991 to 2001, in terms of media concentration in the four major markets of Canada. In every case, in practically every medium, you will find that there are a larger number of owners and a larger number of broadcasting and newspaper outlets over that 10-year period. Even though it may sound counterintuitive, that, in fact, is the case when you focus them in. I am sure you or your researchers have had a look at that monitoring report.
Are we comfortable? No, you have had to be vigilant at all times on this issue. This is a democracy and you need to have a diversity of voices. You also have to look at the facts of any situation.
Ms. Wylie: Having said that, we also expect licensees one by one to provide balance on matters of public concern over at least a period of time so that you cannot, on matters or issues of public concern, be a one-note licensee. We look at the whole system, as Mr. Dalfen has mentioned. Each licensee cannot say, ``I am a one-note person because someone else is providing the other side of this issue.'' This is not program by program but we usually, over a period of time that has often been a year, expect each licensee to be balanced.
Senator Day: What kind of objective standard is there to define balance, as you would like to have it?
Mr. Dalfen: Senator, you have put your finger on what we grapple with all the time. It is impossible to say. When you are looking at media, as you know, particularly a medium as powerful as television, it is not just the words spoken. It is the images that are selected, it is the mood of the program and, at the end of day, it is a judgment call that commissioners try to assess. For better or for worse we come up with conclusions. Again, the only way to govern future behaviour is to read past decisions.
There is also in this mix, as you probably know, the Canadian Broadcast Standards Council, which administers industry codes for the private television and radio industries. The council has a lot of overlapping values to those in the Broadcasting Act. Because, again, we are the government, we feel fairly comfortable with allowing the industry to self- regulate under the aegis of that council, and a lot of their decisions guide licensees as well on issues of balance.
I have never seen that really set out in a way that would be very helpful and that you could not drive a truck through the loopholes of if you tried.
If I may, my counsel has corrected me, and I think I should correct something on the issue of whether the committees are publicized. In both the CTV and Global cases— and I believe the texts are identical for Global and CTV— the commission further notes CTV's commitment to spend $1million a year in announcements to publicize the statement of principles and practices, including the existence and responsibility of a monitoring committee.
That slipped my mind and I am glad to correct the record on that.
Senator Comeau: My question will not deal directly with media ownership, concentration and so on. Since we have you here, I would like to ask a question of the CRTC on how it can help small communities, communities to which I belong. I live in Western Nova Scotia, where my community is divided by two cable providers; one a rather large one and the other a small one. The larger one is connected to another community, which is about 75 kilometres away to another French-speaking community. I am speaking about French-speaking communities now.
The community in which I reside is approximately 90 per cent francophone and, as you know, the francophone communities in Nova Scotia are struggling to maintain their language and their culture. The small cable provider in my community absolutely refuses to provide what we might consider to be channels that would help us, such as RDI and TV5. Even the parliamentary channel, which is broadcast through this cable provider, is funnelled completely in English. If you see your member of Parliament speaking in French you have the voice-over in 90 per cent French- speaking communities. Recently the Minister of Canadian Heritage issued a press release, which I do not have here, saying how she was going to insist that cable providers provide those communities with that kind of service. However, she exempted the small ones. The very communities that need those services are not being provided with them, so the momentum keeps going. This has been going on for years now.
Is there anything at all that the CRTC can do to help communities such as these to get the kind of services they need for their population to know there are other French-speaking communities across Canada — the RDI program would give them that possibility — and to know that their member of Parliament in Ottawa can speak in French on the floor of the House of Commons and that the cable provider, who lives 500 or 600miles away, does not make the decision for our community?
Mr. Dalfen: The objective is certainly to assist communities such as yours in receiving programming services in their own language.
I will ask Mr. O'Sullivan to go into the details of the regulations that may inhibit or assist that situation. We will take it back if you are not satisfied.
Senator Comeau: I would like to find the ones that make it possible. I have heard enough about the ones who inhibit helping our communities. I want to know about the ones who help our communities.
[Translation]
Mr. Marc O'Sullivan, Executive Director, Broadcasting Directorate, Canadian Radiotelevision and Telecommunications Commission: On the issue of CPAC and the debates of the House of Commons, as the Minister indicated in a press release, the government has announced its intent: by way of a directive, the CRTC was asked to require from cable operators that they broadcast CPAC on two video signals, so that everyone could have access to CPAC in both official languages. We are still awaiting the directive. An order-in-council was made to this end. We are still waiting for the directive in order to know exactly how the government will formulate its intent. However, we have attempted in the past to ensure that CPAC be available. Various measures have been taken in past decisions, including using a technology — the so-called SAD, or second audio; it is a technology that is available on TV sets — that has been purchased in the past ten years and that enables the viewer to get a second audio signal, allowing him or her to follow the debates of the House of Commons in the other official language. However, the parliamentary committee, chaired by Mr.Bélanger, tabled a report on this issue. The government has responded and we are awaiting the directive before putting into place these new measures. This is part and parcel of the wider issue of the range of services for Francophone communities throughout the country. The CRTC has tabled a report on that issue a few years ago, reviewing all measures that could be taken in order to ensure a wider range of services in French throughout the country, including the distribution of services such as TVA. This still needs some improvement. In particular on the issue of CPAC, we are awaiting the directive from the government to respond accordingly.
Senator Comeau: I do not find your answer reassuring. I would like to find some way, for a community such as mine, of going to the CRTC and tell them what we could do together in order to ensure that services are offered in our communities. The political will does not seem to exist. Certainly, there is no will on the part of the cable operator. The needs of these communities must be met.
The present situation is quite unacceptable. Perhaps we should reexamine the whole issue of the offer of services to Canadians from minority groups, where assimilation is rampant. If these communities become Anglophone communities in the next few years, which could very well happen, all will be lost. Be it in Newfoundland, in Prince Edward Island or in Nova Scotia, there is not enough of a critical mass in the market as is the case, for example, in New Brunswick and in Quebec. So there must be ways for the CRTC or some other organization to help us. I am sick and tired of hitting a brick wall because nothing has worked up to now. Perhaps you could review your tool box in order to see whether there would be some means to help us.
[English]
Mr. Dalfen: It is always difficult in these proceedings to zero in on individual cases, but I will have someone from our staff meet with you to look at that particular situation to see if anything is being overlooked that might help now and, if there is something more needed, how we might go about doing that. It is certainly an objective of ours, and if it is slipping through the holes, we should try and fix it.
Senator Comeau: Thank you for allowing me to make my pitch for my communities.
Senator Adams: I come from Nunavut, and different languages are broadcast in some of the communities. I want to know how the CBC north and the different stations up there regulate the broadcasting in different languages. We have 27 communities, and every one of them has a local station in their community. We have two stations, one that just started sometime last spring. The CRTC came to some of the communities, and there was not enough publicity as to when that new station would come up. What do you do up in the communities? We have languages, including Inuktitut, and CBC is operating in those languages. My community of Rankin thought it belonged to the municipality or the hamlet. The hamlet has no authority to own a radio station in the community. The people I represent say that it belongs to the municipality. With CBC, you have translating and publicity, and the community is concerned about that new station. There is one station in Rankin and one station in Iqaluit.
Mr. Dalfen: I am not familiar with those. We will have someone get back to you. We usually do not expect to address specific cases that are very graphic from your perspective. We will follow up with you.
Senator Adams: The CRTC would need to have a hearing, would they not?
Mr. Dalfen: For a new licence, there needs to be a hearing, yes.
Senator Adams: To me, it looks like CBC North does not have much regulation as to how they are broadcasting. Anyone who wants to phone the station can say what they want. Are they allowed to say that on the air? There are no regulations to our languages. I heard a lot of people phone in from 1,500 miles away from Iqaluit to wish happy birthday to people in the community through their radio. I wonder about the cost of that kind of communication and the taxpayer paying for people wishing happy birthdays to their families. If you are going to operate a station, you should have some kind of a policy or regulation. Do managers in the communities concerned have rules about how the system works?
Mr. Dalfen: In order to make it easier to have television, particularly for more remote communities across the country, we have eased up on the regulatory requirements, making it much easier to get going and to provide services to those communities. I will have to give you a proper answer. I will have a staff member who knows this material well talk to you and give you information. If you have any follow up, we will happy to deal with it.
The Chairman: In general, could you provide us with rules about requirements on stations, and cable, for that matter, serving smaller communities, bearing in mind again our interest in news? I know that you are aware, as we all are, of the fact that there is a certain sense that local news coverage in smaller communities has been suffering in recent years, or has been reduced. I am not talking about the quality; I am talking about the sheer existence of it. Any information about smaller communities and minority populations, including English minority populations in Quebec would be very useful for us.
Mr. Dalfen: We will be happy to do that.
Senator Phalen: My question is in that same area that Senator Day was questioning about. In your appearance before the standing committee on Canadian Heritage, a Ms. Gagnon asked how the CRTC is ensuring that the diversity of expression, employment, programming and local news are being maintained when such a concentration occurs. Can the CRTC set standards in its licence and enforce them? Miss Wylie answered: ``Like you, we recognize the danger of concentration and the reduction in diversity of expression, but sometimes we must choose between having fewer stations and having more stations belonging to the same owner.''
That raises a question for me. Does the CRTC currently have the legislative authority to refuse licences on the basis of cross media ownership because of its potential impact on the diversity of expression?
Mr. Dalfen: Absolutely. We have done that. In one of the decisions I quoted — the recent decision of this summer on TVA owned by Québecor, who owns a lot of newspapers and is the dominant private television service in Quebec — they sought to go into the radio business by acquiring some AM stations. We turned it down precisely for that reason. The ownership and concentration concerns outweighed any benefit that licence might have. I also said that sometimes, on a given fact pattern, it may be reversed. In that case, it was bang on what you were asking.
Senator Phalen: That raises a second question. Where cross media ownership already exists, does the CRTC have the authority to set standards affecting previously granted licences, or are there any other enforcement measures available to the CRTC in respect to cross media ownership? Do you have the right to go back?
Mr. Dalfen: The answer is that there are certain limitations on our power. For example, the law prohibits us from initiating an amendment to a licensee's licence in the first five years of the term. In the last two years, assuming a seven- year term, we can initiate an amendment and say, ``Change your licence to do that.''
At all times, we are free to issue regulations that we feel are necessary to pursue the objectives of the act, and generally to review the issues. Both the CTV and the Global licence renewals I am speaking about happened after acquisitions of newspaper groups that were not subject to our permission under our act, but we put the safeguards in, including the committee that we were discussing with the chairman.
There are many opportunities for us to patrol this kind of situation. It would be harder for those stations to get approvals for large concentration of ownerships, depending on the timing of when those applications come up. If you get your approval and then you acquire a newspaper, there is little we can do about that except to ensure that on an ongoing basis balance is achieved. That stems from the fact that our authority is over broadcasting undertakings and not newspapers. If, on the other hand, acquisition of newspapers has occurred before they come up for renewal, there is much more one can do. In both of these cases that is what happened and we were able to put the safeguards in place. That will not always be the case, however, depending on the timing of business deals and acquisitions.
The Chairman: Your authority and mandate relate to the broadcasting system. You are responsible for ensuring the health of the broadcasting system. However, in cases of cross-ownership, do you examine the impact of your decisions on the health of the print media over which you have no jurisdiction or do you just say, ``This will be good for the broadcaster and if it is not good for the newspaper, that is too bad''?
Mr. Dalfen: Let me clarify. That is a question that I would answer in two ways. First, we do not focus on the welfare of a newspaper in that decision; we focus on the impact of the broadcasting system of that particular merger. However, in doing that, we do not confine ourselves only to the concentration on the broadcasting side of the shop. In other words, we blow it up to the full issue of diversity of voices in the community and we look at the diversity of voices, taking account of newspaper ownership in that community.
Second, in terms of absorbing a new station or approving a merger, we would look at the total advertising market, particularly where, as in the case of Astral, we found that comparable rates were being offered to advertisers on TV stations, newspapers and radio, particularly in the small communities of Chicoutimi, Three Rivers and Sherbrooke. It was very much a choice of markets. We looked at the entire advertising market and that returns to my earlier discussion with Senator Graham.
On neither of those levels do we confine our analysis to the broadcasters. We look at the entire marketplace in the case of mergers and diversity across the entire marketplace in the case of broadcasting newspaper ownership.
We would not say that we are approving this or turning it down because of the newspaper business, per se. That is not within our mandate.
The Chairman: Mr. Dalfen, you explained earlier in this hearing how Canada has no laws or government directives on cross-ownership any more. Then you went on to explain how it seemed to be too difficult to imagine what such rules might say. That puzzled me.
The United Kingdom has figured out a way, even with its new liberalized system, to have rules that may not be particularly onerous, but they do exist and they differentiate between national, large and small markets.
The FCC, even with its new liberalized rules, differentiates between small and large markets. That department has managed to come up with a set of rules that are tailored to the circumstances of individual markets. Surely they are not smarter than we are?
Mr. Dalfen: I will make two comments in that regard. I am less familiar with the U.K. than I am with the U.S. We have all been reading about the recent imbroglio of the FCC in attempting to have rules loosened in regard to cross- media ownership.
Let us look at the two rules that they tried to change. The first was the newspaper ownership of a television station in the same market. They wanted to do what Canada did in 1985, which was to eliminate that restriction. As a government or a country, we made a decision that that was not a concern of ours in an absolute sense. The FCC maintained that rule and it is still in force because their attempt to change it has been tied up in the courts, and Congress does not like every aspect of it.
The government does not want to re-impose that kind of rule. That is not rocket science, you are quite right. We had it and we decided after three years not to have it as a country.
The other rule is raising the market share of television networks in the country. At present, networks are not allowedtoown more than 35 stations that serve more than 35per cent of market. After a tough fight, they decided to raise that to 45 per cent. Forty-five per cent of the U.S. market— even 35 per cent, which is the current rule— is 100 million people. The low threshold there is that you cannot go above 100million people.
In Canada, by public policy, the CBC, CTV and Global are already at 95 per cent of the Canadian market. We did that for the good reason. We believe that in creating entities of size, when you factor in the English and French markets, a maximum of 25million people can be reached rather than 100million, as in the United States. If we do not do that, we will have entities that are too small to invest in the kind of programming that is the primary goal of the Broadcasting Act to achieve. Again, as a government and as a society, we have said that we want the CBC, CTV and Global. CHUM is now at 70 per cent of the market. We are way beyond the American numbers in percentage terms, much lower in absolute number terms and competitive across the board. In every market you getthose three. CHUM and others have an increasing market.
That is the approach we have taken in this country. Beyond that, those are the two American rules. What would be the next rule that would be the objective standard? It is hard to come up with something. That is what I was trying to get at in my previous answer. What do we now say? What is the proposition that would somehow try to limit that?
The Chairman: Do you prefer the current system where you do things on a case-by-case basis and, basically, everyone else must read the entrails of the decision and figure out what the system is?
Mr. Dalfen: It is clear that we have wanted the spread of these networks across the country. That has gone on for years. That is a national policy. We want these networks to develop. We want services in English and French to be brought right across the country wherever possible, rather than to limit broadcasters to a market share. That has been enacted, unlike the United States.
It is necessary for broadcasters to have that size to create the programming investment. We are putting out a notice today on how to encourage more dramatic programming on English language television. Drama is the most popular genre of programming and is watched by more viewers than any other category by a long shot. In all other categories — news and public affairs, sports — Canadians watch a majority of Canadian programs in those genres. In drama and comedy, the combined category, it is 11 per cent.
In our view, that number is not good enough. We are trying to create the programming that will tell the Canadian stories in ways that will attract the viewers to watch because no one forces youto stop at any point on the dial. Our thrust has been to have a bit of size and synergy so that we can get the investment amounts required to investment in that category.
That has been our national policy for years and years. I think that it is correct.
Newspaper and television in the same market have been on-again, off-again in Canada and it is—
The Chairman: You will apply the law as it is written.
Mr. Dalfen: Exactly.
The Chairman: One of the arguments that has been made quite forcefully here is that given the smaller Canadian market, to which you refer, and given the increasing fragmentation of the broadcast market, the only way for Canadian broadcasters to survive is to permit serious concentration of ownership. Otherwise, the fragmentation eats it all away, and there is nothing left. That is an oversimplification, but is it a general theory to which you subscribe?
Mr. Dalfen: In general terms, we have said we need some synergy and some size to create the entities capable of doing the investing. That is not to say that market-by-market we should not be vigilant about the diversity of voices available to the public. That is primordial. That is the balance you have to achieve.
Again, reasonable people can differ on that. As far as we are concerned, we think we have the analysis. Given the Broadcasting Act, we must continue to do that.
Again, as you said earlier, we are told that you cannot grant a licence to an entity that owns a newspaper. We have lived with that for three years, and we will continue to live with it.
Senator LaPierre: You were doing a thing about drama today?
Mr. Dalfen: I think that it is tomorrow.
Senator LaPierre: You are repairing the damage that you caused in your 1999 decision?
Mr. Dalfen: Is that a question?
Senator LaPierre: I said, ``You are repairing the damage that you did in 1999?'' People have criticized 1999 as having put an end to the development of drama and Canadian content. Am I to gather that this will erase some of the damage that was done or create a new dimension?
I promised the chair that I would not be editorial, that I would control myself. Therefore, I will correct myself.
Does that mean essentially that you wish to give a new outburst of possibility for Canadian drama and comedy by this decision?
Mr. Dalfen: If I share with you the meaning of outburst, yes, I think that is correct.
Senator LaPierre: We have hope.
Mr. Dalfen: I am very hopeful. We have to improve it. There are issues in the 1999 policy that will be fair game for comment in this proceeding. It is open because we are trying to be solutions-oriented. We have to fix this.
Senator LaPierre: We are happy. If I were still at Telefilm, I would kiss your feet.
I would like to talk a bit about cross ownership. I see on page3of your brief all the cases in which the commission imposed a number of safeguards as conditions of licence. You have read them— maintaining, requiring, prohibiting, establishing and reporting.
All of those are window dressing to many people on the grounds that all these guys exist because of the same mother. Second, they all know each other. They probably all went to the same journalism or business administration school. They talk to each other. They see each other. They drink with each other. They talk with each other. Blah, blah, blah.
Do you have a group of inspectors who see to it that none of these five rules are contravened, or do you wait until someone complains about it? In other words, do you have the equivalent of the RCMP or the special services of the CIA to monitor this? Otherwise, it is purely window dressing.
Mr. Dalfen: The window dressing argument was certainly presented to us. Those who simply wanted these transactions de-converged, so to speak, made that point, and we heard it.
On balance, we were persuaded, interestingly enough, by many of the journalists of whom you speak. They argued strongly for this. In some ways it is about jobs. It is about maintaining a job in the TV studio news department and not being taken over by the newspaper guy who is under the same ownership. The unions and journalists, by and large, called for these safeguards and supported them.
On your point about enforcement here, we are not the RCMP. It is a complaint-driven mechanism in two ways. One, the committee is being publicized. The other way is that they can come directly to us; they do not have to go to the committee.
There are conditions of licence, so they have consequences up to and including revocation per our earlier discussion for mandatory orders, which are enforced by the court. A full panoply is available for violation of the conditions of licence. However, we do not have teams of inspectors or investigators.
Senator LaPierre: I am told very often that there is a kind of coming together of the editorial rooms and journalism. A person does a story for the newspaper then appears on television later. I have seen that. You have seen that. If that is not a merger, what the hell is it?
Mr. Dalfen: That is interesting. You would know better than me, Senator LaPierre, as to how it actually works in practice.
A line was drawn between editorial and newsgathering. The broadcasters, and others, said that if you have a merger, there are benefits derived. One of those benefits is presumably that you can get more stories covered and more in-depth coverage by having journalists of both media involved in the story.
We did not try to separate newsgathering resources, but rather editorial decisions. As you read in my brief, the editorial boards are kept entirely separate.
News people tell me that they know what the stories are. It is not rocket science. If there is a SARS epidemic, that is the story. Each will be covering it. How do they optimize and take advantage of symmetries to cover different aspects of the story? One might be better done visually, the other might be better as reportage. They will allocate newsgathering resources that way. However, the angle taken and the decision to cover that story are made independently. That is the theory.
Senator LaPierre: Is it possible for you to have someone look into whatever documents and let the committee know how much time was devoted in the past two years by the Global network to the Palestinian cause as opposed to the cause of Israel? It must be possible to find that out.
Mr. Dalfen: It is possible. Shall I take this as a complaint?
Senator LaPierre: No, I am not, for a moment, complaining. I need information before I complain.
Mr. Dalfen: When a complaint comes in, you have to decide what you want us to do. We engage an entire series of resources to carefully analyze programming of that kind. We prefer to make sure that it is triggered by a bona fide complaint, if it is a serious one.
Senator LaPierre: If it is triggered by an official member of this committee, it is not powerful enough for you?
Mr. Dalfen: It is an allocation of resources. If this committee would like me to do that and would find it helpful, we will do it.
Senator LaPierre: One more question. It has nothing to do with this. It has to do, sir, with new media. You do not regulate new media in any way, shape or form?
Mr. Dalfen: In our new media order, we said that there are certain activities on the Internet that could be considered broadcasting. However, in order to allow the medium to develop and find its own feet, we were going to exempt it for the foreseeable future.
Senator LaPierre: To those of us who think that television is our glorious past and new media is our future, how many people in the CRTC are expert on new media, and is there a division comparable to broadcasting?
Mr. Dalfen: There is not. The new media order, as you may be aware, was issued under both the Telecom Act and the Broadcasting Act, so there is not a discrete department in the organization, but there are people on both sides of the shop who focus on new media.
Senator LaPierre: I am interested in those of content.
Mr. Dalfen: On the content of new media, per se, what would you say Mr. O'Sullivan?
Mr. O'Sullivan: Not in a systematic manner, because of the exemption order. We are keeping track of trends and—
[Translation]
Senator LaPierre: You have nothing to do with this.
Mr. O'Sullivan: In the absence of a specific request or a specific issue, it is more a matter of following the evolution in spirit.
Senator LaPierre: When you made a decision in the issue of Shaw and ExpressVu, did you take into consideration the impact this decision would have on the two or three funds that are attempting to create some Canadian content on the new media?
[English]
Did you really study that or, since it is none of your business, you did not care?
Mr. Dalfen: The answer to that is that a trade-off had to be made on that decision. The decision was made to preserve the money required to be contributed to the Canadian Television Fund in whole. The proposal put forward to us was to reduce that amount, and we said no, the Canadian Television Fund is going to be maintained in full. We did permit them to take monies; the total is 5 per cent, 4 per cent of that — of gross revenues of these broadcasting undertakings — has to be allocated to Canadian programming. Four per cent of the 5 per cent, or 80 per cent of that amount, goes to the Canadian Television Fund, and we said, do not touch that. The remaining 1 per cent goes to a variety of funds, including — not in Shaw's case but in ExpressVu's case — a fund that governs new media. We said that monies could be diverted from that fund, of the compulsory monies. We did not say that Bell could not continue to fund that fund in full, and top it up if it wished to; but in terms of compulsory monies, we said it could be diverted from other funds. In the case of Bell, it happens to be a new media fund. However, we did not look at each and every fund because there is more than that one. I do not know how many, but there are 10 or 12 funds for children's, and other sorts of programs, as well. Again, a decision had to be made.
The Chairman: Could I come back to the convergence issue for a moment? There has been a lot of talk about one specific story or set of stories, namely, the Star Académie event in Quebec, where Québecor created this thing on its own TV network and covered/promoted the dickens out of it in the Journal de Montreal, which is a huge newspaper.
I am not asking youto judge the quality of this event. There are conflicting views on that. We have had an eminent journalism professor suggest that this was a distortion of news values; someone said it drove the Iraq war off the front page of the Journal de Montréal. Other people have suggested that this is a wonderful example of how convergence can be made to work, so I am not asking youto talk about the quality of it. However, when something like that happens, does anyone in the CRTC say, does this conform with the condition of licence that says they have to maintain separate and independent news management and presentation structures, and separate decisions on journalistic content and presentation? Does anyone look at this?
Mr. Dalfen: One of the primary objectives of the Broadcasting Act, as you know, is the promoting of Canadian programming and the promoting of Canadian stars that we can identify with, so that we want to watch Canadian television, because that is what we want. I guess we would see that activity as less a matter of journalism than of the synergies that you do get occasionally with cross-media ownership, where you can promote Canadian programming. Indeed, in all of the proceedings — in the TVA and the Global proceeding, in the National Post,in CTV and The Globe and Mail— one of the advantages put forward was just that, that this will give them an opportunity to do it.
Now, we have had complaints, and from time to time we examine it and have asked them at public hearings, where is the promotion? Normally, the problem is on the other side, that perhaps the CanWest newspapers may be considered not to be doing enough of this to promote Canadian programs that might be carried on their stations. Therefore, when a company is doing it, we kind of feel that, on the whole, that is a positive thing. It promotes the Quebec star system, which a number of observers have agreed is part of why the problem we see in English language drama does not exist to anywhere near the same extent. Indeed, it quite the contrary in French Canada — identifiable stars, promoting these stars, reading about them in magazines, not all of which are controlled by Québecor, helps to promote it.
From our point of view, on the whole, that has been a positive activity. I doubt frankly that that comes from newsrooms, in the sense of what stories are we going to cover. I think that probably comes from the heads of the companies who say, let us use this vehicle to promote our Canadian stars. From our points of view, that is a good thing.
The Chairman: That is very interesting.
Senator Day: One area of questioning I wanted to get into — Senator LaPierre has largely asked the questions and you have answered and clarified — is with respect to the Internet and the World Wide Web and the role of the CRTC. Am I correct that you will be reviewing that policy in the next year?
Mr. Dalfen: In the next year or two, that will come around for review. Our exemption orders always come around for review four or five years after they are issued. Ms.Wylie reminded me that while, in that particular case, the new media funds were diverted from it, at the same time, in the benefits that are required to be paid by parties acquiring broadcasting media over the past few years, a huge amount of that money has been devoted to new media in one form or another — studies, programming, new techniques, institutes and so forth. I do not have the figures with me. I can get the numbers. In that sense, we have been highly encouraging of broadcasters to do this; and, of course, we have tried to promote convergence. It has worked in some ways, and perhaps not in other ways but new media is something that we see as front and centre; something that will develop.
If there is a need to regulate it — and the arguments were, down the road, how you can regulate what Canadians see on television when they can take equivalent programming on new media, and not regulate that? That was the question that was raised, and, on balance, we exempted them. It may come up again, but at the present time I guess you could call us monitoring it, and we do monitor it in our annual report.
Senator Day: I think it is important for Canadians to know that you are not ignoring it, you are monitoring it. It fits into your equation of balance and that kind of thing. You did indicate that you felt that you had jurisdiction, from a broadcasting point of view, if you wanted to exercise it. Is there a need for a change in the law to give you more of a legal basis either for monitoring or for regulating that?
Mr. Dalfen: That is a very good question. I do not think I can be definitive on that. I do not think so, is my initial reply but I want to get a quick word from counsel on whether he might add to that. I think we are okay as we are.
Counsel agrees with that, namely that, on first glance, I do not think it is a matter of expanding authority for us to do that. Again, he reminds us that enforcement will be all the more important on the Internet because it is elusive, as you know. It crosses borders, whereas a broadcasting installation has geographic limits, parameters, and so on. It is in your country in whole or part and you can deal with it; the Internet is much more difficult.
Senator Day: We are seeing that played out now with respect to the downloading of music and motion-pictures. We are seeing that very issue from a copyright point of view in the court system. That will, undoubtedly, provide some direction for you and some assistance when you do your review next year.
The only other area that I wanted to ask you about is one of the conditions that you imposed and you indicated in your remarks here, namely, that of establishing monitoring committees. I understand that the monitoring committee is an independent, neutral committee established by the applicant. Is that correct? They pay for this independent monitoring committee. That was my understanding.
Mr. Dalfen: It is set out in the decisions but I was not so clear on the publicity, so I will check here as to the appointment. These are certainly independent people who are on the committee.
Senator Day: There would be an independent committee for each broadcaster who gets that condition; it is not one for Canada?
Mr. Dalfen: No.
Senator Day: There would be quite a few of them around, and this independent monitoring committee is required to report to the CRTC annually on any complaints filed?
Mr. Dalfen: Yes, once a year.
Senator Day: I understand that there have not been a lot of complaints reported by these independent committees. Has it occurred to you that maybe the public does not know who these independent monitoring committees are and what their mandate is and where to go to complain, or that they exist?
Mr. Dalfen: As I said, the applicant is committed to spending $1 million in publicizing them, but my take away from this meeting is to actually check, first, onwhether it has been spent; and, second, what techniques they are using to make people aware of it. The absence of complaints is either because things are fine or no one knows about it. We will take that away and if we have anything to add to what we said, we will add that to our homework.
Senator Day: Could you update the information we have, which is about a year old, as to how many of these independent, neutral monitoring committees exist? Give us a flavour as to how big they are, what they are and how many, and how many reports are involved.
Mr. Dalfen: I will try to give you as much information as possible because I would like to know that as well. How often do they meet? What is their agenda? We will try to give you a full flavour of that.
[Translation]
Senator Corbin: If possible, I would like the witness to comment on the following three points.
[English]
The Maclean's issue of September 29 of this year has an essay by Kirk Lapointe entitled, ``Losing Faith in the Media: There's so much choice — so why do readers feel starved for accuracy?'' It is basically a comment on the findings of the Toronto polling firm Ipsos-Reid and Washington-based Pew Research Centre for the People and the Press. Kirk Lapointe states that:
...according to the survey, two-thirds believe special interests or a self-serving corporate-political agenda affect news coverage. Many are turning away from traditional outlets because they don't speak to people's values or practices. The disenfranchised include young people, women, and members of ethnic groups — a vast population — who are eagerly sampling alternatives. They are looking elsewhere to specialty channels, to E-zines and newsletters, even to late night talk shows...
I take that kind of comment to be, in a certain way, critical of your licence granting decisions. Now let me go to the other point.
This is from an article published in L'actualité of September 1, 2003.
[Translation]
The article in question, which appeared in a column about books, was penned by Jacques Godbout and is entitled ``Paresse ou Omerta dans la presse''. The word omerta is a reference to the Mafia code of silence. Mr. Godbout reviews a recently published work entitled ``Black List'', a collaborative effort of 15 prominent American journalists. The book is available in English as well as in French. Mr. Godbout quoted the following excerpt from this work:
Of all the trends observed in the world of journalism today, none is more insidious than the pervasiveness of press units and communications groups headed by conglomerates.
I would appreciate your comments on this statement.
The credit for the third saying goes to yours truly.
[English]
Are there not there days when you would like to throw the rulebook out the window and let your preferred view or common sense prevail, and can you give us an example of such an instance? In other words, are current laws as they apply to your mandate laws directives too loose and too constraining in terms of emerging trends and developments in the field of your application?
Mr. Dalfen: I will try to address your questions in order, senator. If I do not get at what you are trying to get at, please let me know.
On Kirk Lapointe's point about disaffection, I think there is disaffection. I think young people are turning away from radio increasingly. They are downloading from the Internet. This is costing the Canadian record industry a lot of money. The record industry, over the last three years, has gone down 10 per cent per year, year after year. It is always tough.
Senator Corbin: Could I interrupt? The comments referred to news contents, reporting, investigative reporting and that kind of thing, not so much entertainment aspects but media.
Mr. Dalfen: From that point of view, though, I think Mr.Lapointe, in his own comments, proves that the system does contain the diversity. Two of the sources that he says people go to as alternatives are specialty services, which were set up precisely to provide niche services in different areas— and there are many news services in the specialties— as well as late night talk shows. What are they on? They are on radio. In effect, they are back in the broadcasting system in another part of it.
People read magazines on the Internet— I am sure we all do. You can check your cable dial, but you have CNN, CNN Headlines, BBC, TV5, and Fox news is now applying. There are hardly any services available anywhere in North America that Canadians do not have access to. Diversity of news sources on television alone is pretty broad. As to disaffection, I cannot really comment beyond that.
We try to accommodate views. In the new digital-category-2 services there are iChannel for information and news, CPAC and many others that try to address that demand; and we encourage it.
You mentioned ethnic viewers and we have just made a presentation to the UN rapporteur on one of the committees. There has been a tremendous amount of fresh licensing of ethnic and specialty services on radio and television in recent years. The curve shot up dramatically in the last two or three years. There is always room for more. Different groups want stations of their own. Our recent efforts have been highly directed to ensuring that that audience gets more and more outlets.
On omerta and the blacklist and conglomerates, we are always vigilant about concentration of ownership because everyone, with their common sense, believes that that has to be continually looked at. We try to do that and balance the costs and benefits of it. We know that it has to be looked at when we see concentration of ownership and media concentration. As a society and an agency we try to figure out how to take advantage of the benefits and not get overwhelmed by the disadvantages.
On common sense, when you regulate, building regulation upon regulation, the structure can often look a little rickety with one thing tacked on another and things pulled out. We try, on an ongoing basis, to tidy up, simplify and rationalize, because no one likes putting out a decision that does not appeal to common sense. We are sometimes bound by what has gone before and we want to ensure that we do not lurch from one set of decisions to another. There are always transitions and in those transitions the rules may not look 100 per cent commonsensical.
I can assure you that my colleagues and I on the commission, and our staff, have a very clear sense of common sense and we try to imbue all our decisions with it. I am sure that views on whether we always succeed differ, but we always aim for clarity and common sense.
Senator Corbin: Finally, how many of your decisions over the years have been legally challenged and brought to court?
The Chairman: Or to cabinet.
Senator Corbin: Yes, to cabinet or court? In other words, what is your popularity rating on a scale of 1 to 10?
Mr. Dalfen: The answer is very few. In licensing decisions involving six applicants, five will be unhappy because they did not win, and the winner may not be all that happy because he may not like the conditions. Five and a half negatives and half a positive is not exactly a winning political formula. Agencies such as ours have transparent, quasi-judicial procedures that adhere to the rules of natural justice.
Appealing to cabinet, to the extent that cabinet grants appeals, of course, attracts more appellants because if they can override us they will be back the next time. As that calls into question the very reason for the agency, that has had a good dampening effect.
There were three or four court cases in the last few years involving Québecor challenging a number of decisionsand, subject to correction, without exception the courts ruled in our favour on the legal issues in the broadcasting cases brought to them.
We are not infallible, by any means, and we try very hard to make our applications as legally correct as we can, both in appeals to cabinet and to the courts. Very few challenges have been successful, and that shows that the system functions. If we were knocked down more times by cabinet and the courts there would be a divergence in the direction we were going, and I do not think that is great public policy.
Senator Graham: I am mindful of the clock and of the old maxim that the mind can only absorb what the seat can stand, so I shall try to restrain myself to one question.
I go back to the first comments by my colleague, Senator Day, when he referred to the Order in Council of 1982 that stipulated that the CRTC may not issue or renew licences to applicants effectively controlled, directly or indirectly, by the owner of a daily newspaper with a circulation of such and such, et cetera. That directive was rescinded, as explained by Senator Day, in 1985.
I do not think anything has consumed our time more in our discussions with our various witnesses than cross- ownership. Would the CRTC find it easier to operate if the government were to give very explicit directions with respect to cross-media ownership?
Mr. Dalfen: I do not think that would be an issue for us if the government felt strongly about that. Foreign ownership is in play now, as you know. It would change our balancing act. We would no longer be able to balance that issue.
In favour of that is clarity. On the other side, we have found cases in which there are benefits on the whole by applications from the synergies. Provided there are safeguards, that may, on the whole, be a good thing, and we have so concluded in a number of cases.
Standing back and looking at broadcasting policy overall, I would not invite such a directive, but we could live with it if that were the government's will.
Senator Graham: I was just thinking in terms of clarity.
Senator Day: Supplementary to that, I am going for clarity. When I asked that question earlier, I assumed that it was clear from the fact that there existed a prohibition and a prohibition was removed, that that was a signal from the government that you apply your general principles to it and it is possible. It is clear that cross-ownership is not prohibited; it can, under certain circumstances, be a good thing for Canadian society.
Mr. Dalfen: That is my interpretation.
The Chairman: Mr.Dalfen, Ms.Wylie, Mr.O'Sullivan, thank you very much. This has been a most informative session. We have, as you know, given you a whole lot of homework to do for us, which will be very helpful to us as we move forward.
The committee adjourned.