:
Welcome to the 43
rd meeting of the Standing Committee on Canadian Heritage. Today is Monday, February 28, 2011.
[English]
We're here pursuant to Standing Order 108(2) for a study of the implementation of Canada's transition to digital television.
In front of us today, from the Canadian Radio-television and Telecommunications Commission, we have Mr. Hutton, the executive director.
Welcome.
We have Mr. Anani, the executive director of policy development and research.
Welcome.
We also have with us Mr. Keogh, senior general counsel.
Welcome.
We'll begin with an opening statement.
:
Thank you, Mr. Chairman.
I'll skip our introductions.
On August 31, 2011, Canada will join the growing list of countries around the world that have made the transition from analog to digital television. The commission established this deadline in 2007 after consulting widely with the broadcasting industry and the public.
At the time, the Federal Communications Commission had already announced a date for the transition south of the border. There was a consensus that Canada should take the opportunity to learn from our neighbour's experience and follow relatively quickly in its footsteps.
The industry also urged us to provide regulatory certainty by setting a firm date. This afternoon, we will review the progress we have made over the last four years to facilitate an orderly transition for Canadians. We will also provide an update on the industry's preparations.
[Translation]
Let me begin by addressing the following question: Why should broadcasters make the transition from analog to digital television?
First and foremost, spectrum is a scarce public resource that must be managed as effectively as possible for the benefit of Canadians. Since the 1950s, analog broadcasting was seen as the most effective way to provide televised information and culture to viewers. With digital technologies, however, the same number of television stations can operate using much less spectrum, and even broadcast multiple services on a single channel. Another important consideration is that we share spectrum with the United States, which went digital nearly two years ago. In order to harmonize spectrum uses, Canadian broadcasters will be required to vacate channels 52 to 69. Some of these channels have been reserved, on both sides of the border, for public safety services. The government has set aside another portion of the spectrum for advanced wireless services.
Canadians have been enthusiastic adopters of smartphones, tablets and other mobile devices. These devices are being used to run more bandwidth-intensive applications, whether it's to make a video phone call, stream a TV show from the Internet or keep in touch with the office while travelling abroad. As we move forward in the digital economy, innovative applications will place increasing demands on mobile broadband networks. A wireless spectrum auction is planned for next year, which will help ensure Canada stays at the forefront of this fast-moving environment.
Finally, the transition will provide Canadian producers and broadcasters with the infrastructure they need to reach viewers with crystal-clear programming in high-definition. This is a key competitive advantage for our broadcasting system, particularly in an age where content from around the globe can be watched on different platforms.
[English]
The digital transition poses an interesting challenge for a country the size of Canada. While the majority of our population is clustered along the U.S. border, many Canadians live in rural or remote areas.
The industry expressed concern that forcing every local station to convert to digital would not be a desirable or practical scenario. As I explained a moment ago, we have no choice regarding the spectrum that needs to be vacated for harmonization purposes; the transition is therefore mandatory for all television stations operating on channels 52 to 69.
The commission also identified 31 large markets where stations will be required to stop broadcasting in analog regardless of which channel they occupy. They include provincial and territorial capital cities, markets with a population over 300,000, and markets where there is more than one local television station.
[Translation]
That being said, we are not insensitive to the fact that it may be more difficult for broadcasters in smaller markets to upgrade their transmission equipment. Stations that are on channels 2 to 51 outside the mandatory markets will have the flexibility to continue broadcasting in analog. Likewise, stations operating on channels 52 to 69 in these markets will be able to hold off on converting their transmitters as long as they move their analog signal to one of the lower channels and there are no interference issues.
Through the establishment of mandatory and non-mandatory markets, the transition has become a manageable task. Rather than having to convert over 700 transmitters, broadcasters need only worry about the 193 transmitters operating on channels 52 to 69 and located in mandatory markets.
In the past few months, we have approved over 100 applications, making it possible for broadcasters to put up digital transmitters or move their signal down on the dial.
[English]
We are confident that broadcasters were given enough time to prepare and will be ready by August 31 at the latest. The operation of full-power analog transmitters in analog markets will not be authorized after that date.
I would like to make it clear that the transition will not cause any local television stations to close. These stations will continue to produce local programming for their home communities. However, transmitters that rebroadcast a station's signal into other communities may no longer be in operation after the transition.
Namir.
While the transition represents a milestone for the broadcasting system, the majority of Canadians won't even notice a change on the morning of September 1. That is because 93% of households currently subscribe to cable or satellite television services.
The only viewers who may be affected are those who rely on rabbit ears or an outdoor antenna to receive their television services. How many of these viewers are there? To be on the safe side, we have included every household in our calculations even though some of them may not have a television set.
In markets where the transition is mandatory, approximately 900,000 households may have to buy a converter box. Some models can be purchased for as little as $30. In non-mandatory markets, as many as 31,500 households could potentially lose access to free over-the-air television. Satellite television is often the only alternative to an over-the-air signal in these smaller markets. A receiver and dish would cost each household $300 plus an installation fee.
[Translation]
Now that we have a better understanding of broadcasters' plans, it appears that our initial estimate of the affected households in non-mandatory markets was overstated. The majority of stations on channels 52 to 69 will stay on the air by moving to a lower channel. As a result, fewer households than previously thought will be at risk of losing access to their local television stations. We are reviewing the applications that we have received in order to provide a more accurate estimate.
The Commission has taken additional steps to ensure viewers maintain access to the local and regional television stations that are currently available over the air. Last summer, we changed our regulations to exempt cable and satellite companies from having to distribute the full basic television package. This change was made so that they can offer affected households a package of local and regional stations at no charge. Certain cable and satellite companies have expressed interest in this option.
For example, we permitted Shaw Communications to direct some of the tangible benefits resulting from the Canwest Global transaction to assist with the digital transition. Shaw will spend $15 million to provide and install satellite receivers and dishes to viewers whose local stations decide to drop their over-the-air signals. Shaw will also have to offer these viewers—which include those living in official-language minority communities—a free local package.
[English]
For the transition to be successful, affected Canadians must not be caught by surprise on the morning of September 1. We believe they can best be informed through a national education campaign led by the industry.
Broadcasters in particular have a vested interest in ensuring that consumers understand the impending changes to their television services, such as the date and time a station will stop broadcasting in analog. They also need to know where they can obtain converter boxes and satellite dishes, as well as about the existence of free local packages.
Although many broadcasters are currently developing public service announcements, we will soon issue new rules making this a formal requirement. The new rules will also include our final determination on the information broadcasters should make available on their websites.
Public service announcements should start airing as soon as possible, since some stations will be switching to digital before the August 31 deadline.
[Translation]
In closing, I want to underline the fact that the vast majority of Canadians will see no change to their television services as a result of the digital transition. The Commission has therefore been collaborating with broadcasters, distributors and government officials with one objective in mind: to find solutions so that viewers maintain access to the television stations they currently watch over the air.
Everyone has made significant progress toward this goal, especially in the last year. We have every assurance that the industry will be ready on time and over-the-air viewers will be well informed. We would now be happy to answer your questions. Thank you.
Mr. Hutton, I was surprised to hear you say to my colleague earlier that no demographic profile has been established. You talked about 900,000 people who have over-the-air television. Many studies have been conducted on the topic. One of them is a study by the Canadian Media Research Consortium that was published in September 2006. The study analyzed all the data collected through a survey conducted in collaboration with BBM.
The study revealed that those who have over-the-air television are low-income individuals, seniors, disabled people, downtown residents, immigrants and rural dwellers. They represent 9% of the population. Downtown residents who watch television on the Internet and people who decide not to have television for all kinds of intellectual reasons make up this percentage. In addition, by focusing on the province-by-province figures, the study found that 14% of people in Quebec used antennas to watch television, which is the highest percentage among all provinces. Regarding your figure of 9%, Quebec's 14% should be taken into consideration because it brings down the percentage for the rest of Canada to 6% or 7%.
This is a big concern for me, since it affects many people in Quebec. You talked about 900,000 people, but I don't know how many of them live in Quebec. If you divide that number by the number of households, what figure do you end up with?
:
First, I would like to finish my remarks.
So, it has been determined that the figure is 14% in Quebec. In other words, the broadcasting mode shift affects more people. You can submit those figures to us. If you cannot do it today, you can send them to the chair soon. What's worrisome is that, in most cases, people who have over-the-air television—aside from the few intellectuals who find other ways to watch television or who do not watch it for intellectual reasons—are low-income individuals, who consequently need more help.
Despite that fact, no measures have been taken to remedy the situation. In the United States, a coupon system was implemented. Perhaps this system has not been very effective, but at least, something was done. In France, low-income people have also been provided with assistance. However, here, this part of the population will be left to fend for themselves. Most big industrialized countries, such as the United States, the United Kingdom, France and Italy, have focused on the needs of low-income citizens and have devised measures to assist them. We have done absolutely nothing about this. We've given the industry free rein when it comes to this. In addition, the ad campaigns are supposed to start airing tomorrow, on March 1. That's what was announced. I see now that this initiative will not begin on March 1. I don't understand how, despite the many studies conducted by the CRTC, you will leave 900,000 people to fend for themselves like this.
:
People in rural municipalities are not forced to go digital. Analog service will still be provided in rural areas, and no changes will occur. This is one of the steps that have been implemented.
A great many television companies that provide services on channels 52 to 69 in rural areas and were slated to move their signal or stop broadcasting for coordination purposes have decided to move their signal in order to continue broadcasting in analog mode.
What we said during our presentation is that, after we talked to Shaw Communications, the company decided to provide service—through satellite receivers and dishes—to people in areas where the service would no longer be available. The old service will be replaced by a completely new one free of charge in order to basically ensure that those people do not lose their service.
Mrs. Carole Lavallée: How many people have you left to their own devices?
I will follow up at the end of our meeting on a motion.
I'm interested in this issue of the national education campaign, because in the United States, there was a big lead-up, a lot of awareness, and a lot of preparation for the public. It seems to me that I don't know anybody who's aware that the transition is coming. I've never heard anybody talk about it. People think television just is television.
So I'm concerned, because it sounds as if we're looking at a number of hodge-podge solutions. For example, CBC might stay on analog, and in rural areas Shaw is going to offer people a box. How are we going to have a coordinated media strategy so that people know what the options are and are given enough time to look at them?
Thank you for your presentation today.
It's interesting; there seems to be....
Frankly, I don't share a lot of the concern that deals with digital transition. If you compare Canada with the United States, for example, when digital transition occurred there, they didn't have the kind of connectivity that we have in Canada between television viewers and BDUs. We know that 93% of all households are connected to a BDU, be it satellite or cable. We don't know what percentage of the remaining 7% even watch television. So I would argue that in Canada we have very good coverage.
Perhaps you could talk a little bit to the committee about this aspect. I'm aware that obviously you're currently reviewing the Bell purchase of CTV. I think that's something we've taken a supportive position on in our party. Certainly when Shaw bought Global they did make specific considerations for digital transitions for customers who could be affected, not just by providing satellite dishes but also by providing the installation at no charge.
Now, when I was kid growing up on a farm, I remember that with a set of rabbit ears we could get one station in, kind of fuzzy. My parents, back in the seventies, put in an antenna, which cost a lot of money, so that we could get channels. So the signal may have been free, but the apparatus was not.
This is even better. Not only will they get a very clear signal, but they won't even pay for the equipment to connect. I thought that was a pretty good gesture on behalf of Shaw, and a pretty good measure that the CRTC took in terms of actually guaranteeing that viewers in those areas would in fact still receive television signal.
Could you expand on that a little bit?
First of all, compared to the U.S., we are slightly further ahead on cable and satellite penetration, so there is an advantage there. We mentioned that the U.S. converted two years back. That extra time, being a fast follower in this case, has allowed greater penetration of digital TV sets, even further reducing the need for special conversion units and basically opening Canadians up to the advantages of digital that much sooner.
In recent transactions by both BCE and Shaw, both companies had proposed, as part of their tangible benefits packages, plans that address digital transition, and in both cases were speaking about rolling out digital transition to rural areas, effectively. The key one for us, we'll see...on BCE's, we've yet to approve that transaction or come down on a final determination, so I'll reserve myself on that one. But on Shaw, you are quite right: they have earmarked $15 million toward helping to ensure people do not lose service at the end of the day. They will be provided with a clear digital signal from Shaw satellite services, a free box, a free dish, and free installation on that front.
Thank you to our guests for attending today.
I'm just trying to get a handle on the numbers. There are about one million people affected in the mandatory markets, am I right? Sorry, that's households, one million households. There are 900,000-plus households, and in the non-mandatory markets there are about 100,000 or slightly less. Am I correct?
In the mandatory markets, it will cost about $30 for a converter box--you've found something less expensive than the original forecasts--and for satellite in the non-mandatory, it will be about $300.
Is that correct? Is that what we're looking at?
:
This is an official request. Please, send these documents to the committee chair.
There are, after all, 31,500 households remaining, which is not totally insignificant. If you cut that into half, there are some 15,000 households remaining. That would account for a little more than two persons per household.
According to the demographic studies conducted by the Canadian Media Research Consortium that I quoted earlier, the homes lacking a television receivers are six-person households. Therefore, there are many people that would no longer have access to television.
You have done a few studies over the years. In 2009, you asked a group consisting of Bell TV, Quebecor, Shaw, Rogers, and so on, to provide you with a report on digital television. Those broadcasters recommended a way to assist the 31,500 people who do not have television receivers. You—the CRTC—published another report in October 2009 in which you provided solutions for helping those people. All of a sudden, you no longer wish to help them; you are placing the burden on the broadcasters by telling them to deal with it. What has happened to the CRTC?
Thank you for your submission. I've enjoyed listening to your answers to the various questions you've had.
Maybe you can just elaborate on some things you've mentioned before and, in particular, talk about the regional aspects of this transition. Being from Atlantic Canada as I am, for example, my riding's very rural. I estimate that there are probably about 2,000 households that may be affected by this. Many of these are cottages or secondary houses. They still have an old television that they've had for 20 years. They bring in CBC to watch golf on Sunday afternoon when they are at their cottages. We're not talking about something that's a drastic change in their lifestyles.
But for those people, can you explain to me, if they're not sure what's going to happen to them and they start seeing these ads on TV, where can they call? Who can they contact? What central government agency can they contact to try to determine what's going to happen directly to them if they're confused?