[Recorded by Electronic Apparatus]
Thursday, May 16, 1996
.1112 
[Translation]
The Chairman: Good morning. I now call the meeting to order. I would ask the representatives of the Canadian Cable Television Association to introduce themselves.
Today's meeting is the committee's last one for the purposes of its study of Bill C-216. During this meeting, we will be hearing from representatives of the Canadian Cable Television Association.
[English]
The Canadian Cable Television Association if represented by Mr. Richard Stursberg, president and chief executive officer.
Mr. Stursberg, could you please introduce your colleagues?
[Translation]
Mr. Marchand (Québec-Est): Mr. Chairman, we had agreed to deal with the motion from my colleague, Gaston Leroux, relating to the appearance before the Committee of the NFB and of the union.
The Chairman: Forgive me, Mr. Marchand. Mr. Bélanger tabled an amendment. If it's all right with you, I promise you that we will discuss it as soon as we have dealt with what I've just spoken about, which won't take very long.
Mr. Marchand: The problem, Mr. Chairman, is that discussion of the motion has been put off several times already for lack of a quorum. It however seems to me that the motion is rather urgent, given that...
The Chairman: That isn't exactly the case, Mr. Marchand. The motion was put aside several times because one or the other of the participants, or the mover himself, Mr. Leroux, was absent. Only once was this done because we didn't have a quorum, and that was at our last meeting. I will be asking my colleagues to stay until the end of today's meeting, which will not be a very long one.
Mr. Bélanger (Ottawa - Vanier): You are correct in saying that the motion was set aside several times out of respect for Mr. Leroux, who wasn't present. We didn't have a quorum at the last meeting, and I had the opportunity to speak with him about it afterwards. He told me that he wouldn't be here today either but that he would present his motion once again on Tuesday, when we come back, at which time he will have the names of the groups he would like to invite for the employees' side. I had thought that we would get agreement on that.
The Chairman: Yes, that was my understanding as well, but Mr. Marchand is saying that he is ready to proceed.
Mr. Marchand: If that is possible, it would be preferable because I have the name of the group. If the matter could be cleared up, it would be one less thing to worry about. We wouldn't have to deal with it again.
The Chairman: I agree, but-
Mr. Bélanger: If it is taking so much time, it is out of politeness towards a colleague. Let's not exaggerate things.
The Chairman: I am perfectly prepared to entertain a debate on that now, but my preference would be that we first hear the witness. I promise you, Mr. Marchand, that we will have a quorum. We will not let this opportunity pass.
[English]
Go ahead, Mr. Stursberg.
[Translation]
Mr. Richard Stursberg (President and Chief Executive Officer, Canadian Cable Television Association): We are completely at your disposal if-
The Chairman: No, it's all right.
Listen, Mr. Stursberg,
[English]
generally we just give you about fifteen to twenty minutes for your presentation in order to allow time for the members to ask questions, if that's all right.
Mr. Stursberg: Sure.
The Chairman: Please proceed.
[Translation]
Mr. Stursberg: Thank you, Mr. Chairman,
.1115
Good morning Mr. Chairman and members of the Committee. I am Richard Stursberg, president of the Canadian Cable Television Association. Appearing with me today are Jay Thomson, vice-president, Legal Regulatory Affairs of the CCTA, and Joel Fortune, of the law firm Johnston & Buchan, our outside council.
The CCTA represents over 600 Canadian cable licensees providing cable TV services to some seven million subscribers nation-wide. We wish to thank the committee for asking us to appear so that we might provide our comments on Bill C-216.
First, we wish to make it clear that the Canadian cable industry is united in its resolve that Canadian consumers should be free to choose for themselves which packages of entertainment and information services they receive in their homes.
The Canadian cable industry is committed to respect consumers' freedom to choose and is also committed to ensure, to the fullest extent possible, that new programming services are offered to cable subscribers exclusively on a ``positive option'' basis.
[English]
This commitment has been confirmed in public by the cable industry numerous times. As you know, a CRTC proceeding is currently under way to consider the licensing of new cable programming services. Last November the Canadian Cable Television Association wrote everyone who we thought might be an applicant at the commission's hearing. In our letter, we told the potential applicants that with respect to any new services that are licensed, ``the cable industry will not pursue consumer unfriendly marketing strategies.'' Specifically, we stated in italics that ``the cable industry will not sell new specialty services on the basis of a negative option.''
More recently, in our written intervention regarding the specialty hearing, we told the commission that ``Canadian consumers clearly value choice and control above all factors when making decisions about paying for new programming services.'' For this reason, we again stated that we would ``market packages of newly licensed specialty services on a `positive-option' basis - whether in a digital format, on a third analog tier, or on a scrambled analog tier.''
We recognize that respect for consumers means that some regulatory solutions and commercial strategies, such as negative-option marketing, are no longer appropriate. New solutions will require a shift from a regulated approach to licensing new cable services to a market-driven approach.
Canadian cable companies welcome this new approach. We are committed to offering Canadians a maximum degree of choice among attractive, high-quality programming at affordable prices. We must if we are to survive in an ever-increasingly competitive environment. Indeed, competition will ensure that service package are offered in the most consumer-friendly ways.
Let there be no doubt. The cable industry supports unequivocally the spirit of the proposed amendment to the Broadcasting Act set out in Bill C-216. We wish to use this opportunity, however, to point out to the committee that the adoption of Bill C-216 in its present form could have serious and, we believe, unintended consequences that would run counter to the broad objectives both of the committee and of the Broadcasting Act.
One of the great strengths of the Broadcasting Act is its flexible framework that can respond to changes in technology and the Canadian marketplace, while ensuring that adequate checks and balances exist between the regulatory and executive functions of the government.
Bill C-216, in its present form, could place in a perpetual freeze-frame the programming services that are currently offered to Canadian cable subscribers. It could also dramatically limit the manner in which cable operators and competitive Canadian distributors of programming services respond to changes in the constantly evolving Canadian broadcasting system.
As the bill is currently drafted, it could have the following, and I believe unintended, consequences.
It appears, for example, that cable operators would not be permitted to replace an existing service - Canadian or non-Canadian - that was carried as a part of a tier or package of services with a new service, even if the new service had more consumer appeal and was less expensive than the existing service.
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In Quebec and predominantly francophone markets outside of Quebec, the roll-out of new programming services cannot be accomplished in an economically efficient manner other than as part of an existing package of services. Therefore, in these markets, it appears that cable operators would be prevented from offering new services to subscribers even if there was a clear demand for them.
It is generally recognized that broadcasting policy objectives encourage the distribution of certain services to the largest possible number of Canadian subscribers. Such services might include the French- and English-language all-news specialty services provided by the public broadcaster. If Bill C-216 had been in place at the time that RDI or CBC Newsworld was first licensed, cable operators would not have been able to add these services to the basic cable service package. We believe the distribution of CBC Newsworld and RDI to a wide number of subscribers as part of the basic service package has contributed to their marketplace acceptance and success.
Lastly, Bill C-216 does not differentiate between a small distributor, such as a cable operator in a small Canadian town serving 700 subscribers, with its counterpart in a metropolitan centre serving a million subscribers. Small operators simply do not, at this time, have either the cable channel capacity or the financial resources needed to offer subscribers a large number of services on a completely discretionary basis. In smaller communities, some give and take is required in order to serve the entire community with a range of services. If Bill C-216 were enacted, it appears that small cable operators would no longer be able to introduce new cable programming services unless virtually every member of the community had agreed to receive them. While future digital video compression technology may permit subscribers to select only those services that they want, we are not there yet. Small cable operators need flexibility to meet the needs of their communities as best they can.
As we said at the outset, the CCTA supports the spirit underlying Bill C-216. However, we strongly believe that the wording of the amendments as currently proposed is deficient because it does not reflect the way in which the cable industry operates. The amendments make reference to the provision or sale of a new programming service - and that is ``service'' in the singular. Cable, however, does not sell individual services. We sell packages, or what we usually call ``tiers'', of services. The consumer backlash in 1995 occurred when cable operators introduced a new tier containing the Canadian specialty services licensed in 1994. Thus, by referring to individual services, the amendments as currently worded would trigger the problems we've just outlined without addressing the real evil, if you will, that you are attempting to address.
On the other hand, if the amendments were to provide that distribution undertakings should not demand or receive payment for the provision of sale of a new package of programming services, they would achieve their goal in the real world in which the cable industry operates. They would do so without unduly and unnecessarily preventing cable operators from making minor adjustments to their packages to respond to ever-changing consumer demands, from introducing new popular or culturally relevant services, or from continuing to expand the service options available to consumers in smaller communities.
An alternative approach to this addition of the word ``package'' to your bill would be to build into the amendment some form of regulatory discretion whereby the CRTC would be able to fine-tune the general rule of opposed in Bill C-216 so that it fits harmoniously within the broadcasting policy framework outlined in section 3 of the Broadcasting Act.
For guidance on this matter, the committee could look to subparagraph 3(1)(t)(iv) of the Broadcasting Act, which permits the CRTC to regulate community programming provided by cable operators in a way that is sensitive to the demands of individual communities and the broadcasting system as a whole.
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I just conclude by saying that I think our strong preference and our strong belief is that the best course by which to achieve what the committee is attempting to achieve is to amend the bill as we proposed by adding the word ``package'' in front of ``programming services'' in both parts of the initiative.
[Translation]
Mr. Chairman and members of the Committee, this concludes our comments on Bill C-216. We welcome any questions the Committee may have on our presentation.
[English]
The Chairman: Thank you, Mr. Stursberg.
Mr. Marchand.
[Translation]
Mr. Marchand: Welcome, Mr. Stursberg.
[English]
The comments you just made in your opening address make me wonder. On page 5 you mentioned, I think, the uproar that was created in B.C. when people discovered that they were being charged for cable services that they didn't want. That is really the fundamental basis for Bill C-216. You say this is attributed to your tier system.
Mr. Stursberg: That's correct.
Mr. Marchand: I don't know if that is really true. I think it was probably because people were getting services that they didn't want. But that's a moot point.
What concerns me is on the first page.
[Translation]
You state, in the third paragraph:
- The Canadian cable industry is committed to respect consumers' freedom to choose and is also
committed to ensure, to the fullest extent possible, that new programming services are offered
to cable subscribers exclusively on a ``positive option'' basis.
In your brief, you say ``to the fullest extent possible'',
[English]
``the fullest extent possible''. That means it's not really dead. There are a certain number of services that you're pushing down the pipe for people to... In other words,
[Translation]
The ``positive option'' you have always used isn't there 100 per cent, and you are still using the ``negative option''.
Mr. Stursberg: I am in complete agreement with you. It would perhaps be preferable to remove the words you have just quoted, ``to the fullest extent possible'',
[English]
``to the fullest extent possible''.
[Translation]
Those words should be removed so that it is absolutely clear. We have no intention whatsoever of using the negative option in the future. I hope that that appeases your fears in that regard.
Mr. Marchand: You are perhaps already aware that we of the Bloc québécois oppose the bill. Our reasons are not the same as yours. In you presentation, it appears that the bill creates problems for you because of the delivery of your services by package.
In order for things to be clear, I wish to state that we do not oppose the bill because of the spirit underlying it, because we are in agreement with that. We believe that the errors committed in the past, those caused by the use of negative options, should not be repeated. If we oppose the bill, it is because it is an encroachment on the jurisdiction of Quebec. In Quebec, it is the government of Quebec that is responsible for trade policy. To support the bill would be to approve of the federal government's intervention in this area.
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As a matter of fact, we already know that Videotron has completely abolished this practice. We are therefore reassured in that respect. I simply wanted to tell you that we oppose the bill.
Mr. Stursberg: We have not had the opportunity to consider the constitutional issues relating to the bill. If you have constitutional questions dealing with the bill, I believe the best thing to do would be to ask the Justice Department or its officials to appear before you to explain the major constitutional issues.
Mr. Marchand: I would like to ask you a question that doesn't really relate to this but rather to the Société Radio- Canada. In a letter you yourself signed - and I have a copy of it - , you suggest that the CBC be divided into three specialized services. You say in your letter that a third of the budget that is presently granted to the Société Radio-Canada, which is already smaller than that given to the CBC, should be used to bring about this transformation.
You are aware that the Société Radio-Canada receives less money than the CBC. So why make such a suggestion?
The Chairman: I would like to intervene. Mr. Stursberg, this question does not relate to Bill C-216. It is therefore out of order. However, if you wish to respond, you are free to do so.
Mr. Stursberg: Frankly, I would like to give a brief response. I never signed any such letter and this hypothesis does not reflect my viewpoint. If you want to discuss it - because I know that you have discussed this with others - I will gladly meet with you following this session in order to explain my opinion concerning the SRC.
The Chairman: Are there any other questions relating to Bill C-216?
[English]
Mr. Hanrahan.
Mr. Hanrahan (Edmonton - Strathcona): Thank you.
Thank you, sir, for your presentation. I have just a couple of questions. First is a point of explanation or clarification. Can you distinguish for me very simply how you perceive a positive option as opposed to a negative option?
Mr. Stursberg: I think what people typically mean by a negative option is that you are given the package of services and then if you do not tell me you don't want them I assume that you do. The reverse of that, a positive option, would be that I will not give you the package of services until you expressly tell me you would like to have them. We take as being a positive option a sale in which the person has to either phone up or write or ask explicitly in some way for the packages of services that are on offer.
Mr. Hanrahan: This gets around the concept of back-door billing and so forth. If in fact these new channels are on for two or three months and I choose not to have them, it is up to you to cut the service off until such time as I phone you and say yes, I'd like to keep it.
Mr. Stursberg: That's exactly right, in general terms.
Mr. Hanrahan: No, I don't want general terms.
Mr. Stursberg: The only way I was going to nuance it is as follows. I think what's really important is this distinction we've made, if I can just expand on it for a minute, between packages and particular services. What caused the controversy in British Columbia was that a new package was made available to customers. Then if they didn't say they didn't want it, it was assumed that they did. That's what people called the negative option.
Our view is that we sell packages of services. We don't sell just one service. So our view is that absolutely the law should apply to packages of new services. What you don't want to do is constrain the ability of the industry, both the cable industry and the television services industry, from making changes to particular packages, such as changing one service inside a package.
.1135
Mr. Hanrahan: But that then suggests that if you put on a new program or a new station packaged in such a way that my favourite station is included, I have to negate my favourite in order to get rid of the one you just put on that I have no interest in. That marketing is still available to you.
Mr. Stursberg: You mean that if we pulled your favourite service out of an existing package you were already taking and put it into a new package, you would then be obliged to take the new package to get your favourite service. Is that your concern?
Mr. Hanrahan: That's right.
Mr. Stursberg: I think under those circumstances, that would be right. Our amendment would not solve that problem.
But it works in reverse too. I'll give you an example of the other concern we have right now. Take, for example, a service like RDI, the French Newsworld service. It's not currently carried in all of the English markets. We couldn't get the service into the various different markets in which it's not carried right now if this amendment were to pass. So it's the reverse of what you're describing. It's not pulling a service out of a package, it's putting a service into a package, if you follow me.
There's no question about the general point you make, that sometimes people are annoyed if services are moved between packages or sometimes things are added and what not. That does annoy customers. We try to do that as little as possible because it annoys customers.
Mr. Hanrahan: But it gives you an enormous advantage in that all you have to do is look at the ratings and lump in the new station with the station that is extremely popular. You're pretty well guaranteed to sell that new station.
Mr. Stursberg: That might have a certain advantage. The disadvantage is that it makes our customers extremely unhappy if we do that. Customers don't like having things taken away from them. They don't mind having things added, but they hate having things taken away.
To come back to the problem in British Columbia, there were really two aspects to it. One was the negative option on the package. The other was that there had been some movement of services between packages, exactly as you described.
I think it's fair to say that we are exceptionally reluctant to move services out of packages and put them into new packages. In fact, the general direction is not to do that. The general direction over the last little while has been to add services to packages rather than taking things away from people.
Mr. Hanrahan: Is there an increase in cost for the consumer?
Mr. Stursberg: It depends on the service. Sometimes there is and sometimes there isn't. In most cases there isn't.
Mr. Hanrahan: You say the positive-option base is... I think you explained it fairly clearly. Mr. Spicer, when he was here last time, said negative option was dead from his perspective, whatever that meant.
If I recall - we didn't have a copy of the speech - he also said these new channels may be free for a period of time, and at the end of that time some charge might be added and the consumer would be informed of that. He also seemed to imply that it would then be up to the consumers to indicate whether they wanted it or not.
Now you're telling me that through this positive option you speak of, this is not going to happen.
Mr. Stursberg: The position we have taken with the commission in this round of specialty licensing is that we are absolutely opposed to doing that and we will not do that. Our proposition, as I mentioned in our opening remarks - and it's what we've told all the specialties - is that once the commission has made a licensing decision and decided how many of them there will be, we'll put them together in a package and we will ask our customers if they would like to have them.
We may give them away free for a few months so people can have a look at them before they decide, but unless they say they positively want to have them, they won't get them and they won't be billed for them. I think we've been absolutely clear about this with the specialties and with the commission.
I think what Mr. Spicer means when he says that the negative option is dead is that, you know, we're in a situation... I don't think anybody ever wants to make customers unhappy. We discovered last year that this was not a practice that customers like.
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It was a big help to the services. It was a big help in terms of making sure new Canadian services got up and got financed effectively, but the customers said no, thank you.
You know we would very much like to have an excellent relationship with our customers. This is particularly true as we move into a more competitive environment, so I can tell you that there is absolutely no desire to do this. I think it was in that sense that Mr. Spicer meant the option is dead.
Mr. Hanrahan: Again, on a point of clarification, looking at this very straightforward and, I think, rather clear Bill C-216, if I am to summarize your presentation, it seems that the only objection you have is the word ``service'' as opposed to ``services''.
Mr. Stursberg: Our only suggestion is this: we would say ``should not demand or receive payment for the provision or sale of a new package of programming services''. That way, it would reflect the fashion in which the industry actually sells things. As I was saying earlier, we don't sell individual services, we sell packages of services.
Mr. Hanrahan: And is that because of technology?
Mr. Stursberg: Yes. That's because of technology. I think it would assist the committee in the sense that it would really get to the issue that you want to get to, and would ensure that the objective you were seeking was fully achieved in the legislation.
Mr. Hanrahan: Thank you, Mr. Chairman.
The Chairman: Thank you, Mr. Hanrahan. Just to clarify, on the government side I have requests from Mr. O'Brien, Mr. Gallaway, Mr. Bélanger and Mr. Arseneault. As you know, you have ten minutes on the first round.
We'll start with you, Mr. O'Brien. If there's still time we'll go over to Mr. Gallaway. If the time runs out, you can come in individually on the second round of questions.
Mr. Hanrahan: On a point of order, Mr. Chairman, I would be quite willing to give up my time on the second round to the Liberal side, given that there is only one of each of us on this side. I don't want to dominate. I think each of those members has the right to express their questions.
Mr. Marchand: There's no problem.
The Chairman: Thank you.
Go ahead, Mr. O'Brien.
Mr. O'Brien (London - Middlesex): Thank you. We appreciate what our colleague said.
The Chairman: I have given you the courtesy. You will guide yourselves accordingly. Don't take too much time.
Mr. O'Brien: Yes, we appreciate that, Mr. Chairman. I'll attempt to be as brief as I can.
Mr. Stursberg, I appreciate your presentation. My first question is about what Mr. Hanrahan just raised, the issue of ``service'' - singular - that you raise on point five of your brief.
Bill C-216 seeks to improve the Broadcasting Act. I don't have the act in front of me, but is it not true that the Broadcasting Act does not speak to tiers or packages of services?
Mr. Stursberg: I believe that's right. I'll let Jay Thomson speak to that issue.
Mr. Jay Thomson (Vice-President, Legal and Regulatory Affairs, Canadian Cable Television Association): Thank you.
That's correct. But that's a matter that could be dealt with by the commission in the regulations that would have to be introduced in order to bring this policy into actual play.
Mr. O'Brien: Okay, but that leads me to my second question. To summarize or paraphraseMr. Spicer's remarks, he indicated that he had no problem with Bill C-216. He said he thought it was unnecessary. As Mr. Hanrahan has said, he thought negative-option billing was dead. So I asked him what the harm was in burying it. Frankly, I'm all the more determined to see it buried after the discussion today, because how dead is dead?
If he, as chair of the CRTC, had no problem and didn't raise this issue of semantics, why the concern on your part?
Mr. Thomson: I don't think we have any problem with the bill either. The only thing we're trying to do here is to make sure that the way you have it drafted captures what it is you would like to achieve and that it doesn't have other kinds of consequences you don't want to have. That's the only reason we suggest this. If you like, this is by way of a technical improvement of the bill that we think would help you achieve what it is that you'd like to get done.
Mr. O'Brien: I appreciate that, but I just wonder why Mr. Spicer wouldn't have noted that shortcoming as I hear you expressing it, and why he wouldn't have brought it to our attention as well. In fact, he said he had no problem with the bill.
Mr. Thomson: I don't know. I wasn't here for Mr. Spicer's presentation.
Mr. O'Brien: Thank you. I'll pass.
The Chairman: Mr. Gallaway.
Mr. Gallaway (Sarnia - Lambton): Thank you, Mr. Chairman. That was quick.
Mr. Stursberg, you've stated right upfront that the cable industry is committed to respect consumers' freedom to choose and also committed to ensure the fullest possible new programming services.
Now you want to add the word ``package''. If I understand you correctly, what you're suggesting is that in the future consumers will have a choice of packages as opposed to a choice of individual channels.
.1145
Mr. Stursberg: No. Where we are right now is that with the current technology, the only way we can sell services is in the form of packages. We don't sell individual services.
We hope that at some point in the future we will be able to roll out a digital service. Although a digital service might in principle allow you to pick and choose individual services, our general sense is that people are still going to want to be offered services in the form of packages. That's because it's more convenient for customers. They may design the packages themselves and say, ``I'd like to have this number of services'', but very rarely will it be the case that a person will say they want only one service. Even in a digital world there are likely to be packages.
As I say, right now this is the only way in which we can sell it.
Mr. Gallaway: If we examine the act, there's reference to ``distribution undertaking''. For example, telephone companies could be a distribution undertaking, direct to home.
Mr. Stursberg: Yes.
Mr. Gallaway: Are you presuming to speak for them in that they are going to operate packages? Or will they be selling individual channels? In your amendment referring to packages, are you presuming to speak for them also in that they will be offering packages?
Mr. Stursberg: I don't presume to speak for them. All I know is that on the basis of what I've seen from the direct-to-home satellite suppliers, whether Expressvu or DirecTv, the marketing offers they've already made are package offers. That's how they are structured. My understanding is that that's how they are going to continue to offer them, but I don't presume to speak for them.
Mr. Gallaway: So it is possible they will offer the choice of a single channel?
Mr. Stursberg: They might, but I've never seen such an offer.
Mr. Gallaway: That's today. Now let's talk about your general sense of what the market is.A year or fifteen months ago your general sense of the market was that it would accept negative-option billing. Is that correct?
Mr. Stursberg: To be honest with you, I wasn't here then.
Mr. Gallaway: Let me quote Mr. Harris Boyd then. Do you know him?
Mr. Stursberg: Yes, I do.
Mr. Gallaway: He's vice-president, I think, of your association. On January 12, 1995 he said that the cable TV companies are against legislation banning the marketing practice that we've been referring to here as negative-option billing. Sometime between January 12, 1995 and January 11, 1996, one year less a day, Mr. Boyd underwent a conversion. I think he did what the French call a volte-face, a flip-flop. He said, ``Our industry has agreed that we won't negative-option again''.
Today you're making suggestions with respect to amendments. Are you going to change your minds?
Mr. Stursberg: No, I think you have our view and-
Mr. Gallaway: Is that your view into the future? Will it be your view a year from now?
Mr. Stursberg: I think that's completely our view. It comes back to something I was saying earlier: we don't want to do anything that is going to make the customers unhappy. It seems to me that is an absolutely crazy, suicidal thing to do.
Mr. Gallaway: Did Mr. Boyd not realize that on January 12, 1995 your customers were unhappy?
Mr. Stursberg: Well, it sounds as if Mr. Boyd now has a deeper appreciation of what the customers want than he might have had previously.
Mr. Gallaway: Do you think you have a complete understanding today of what your customers want?
Mr. Stursberg: We've done a lot of surveying and talking to our customers about these things. I think I can say with a great deal of confidence that the thing our customers would like most is greater choice and greater control over what they get. It's for that reason that in the last year and a half we've taken the position that we are opposed to negative optioning. It's also for that reason that we have supported things such as the V-chip technology to allow people to get more control over what comes into their house. It's for that reason that we've actively supported competition. We've actively said that we think there should be competitors to the cable industry, whether they're satellite providers or telephone companies or something else.
We've been trying very hard over the last little while to pursue what we believe our customers would really like.
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Mr. Gallaway: I have one final question. I believe your brief makes reference to the distinction between ``service'' and ``services''. Is it not correct that the Interpretation Act of Canada would suggest that where the word is singular, it may be interpreted as plural?
Mr. Thomson: Yes, I believe that's correct.
Mr. Gallaway: Okay, so the inclusion of the word ``service'' could also be interpreted to mean ``services''.
Mr. Thomson: Right, but the inclusion of ``package'' would ensure that we're talking about more than one service.
Mr. Gallaway: But I've also asked where either the word ``package'' or ``tier'' is in the Broadcasting Act.
Mr. Thomson: It is not in the Broadcasting Act, but it could be subject to a definition in the regulations that the commission would adopt to put this policy into force.
Mr. Gallaway: All right, but we're not dealing with regulation this morning, and I think you'd agree with that. We're dealing with the Broadcasting Act, isn't that correct?
Mr. Thomson: That's right, you're dealing with a broad policy.
Mr. Gallaway: Okay, thank you.
The Chairman: Mr. Bélanger.
Mr. Bélanger: I have two sets of questions. The first deals with statements that you make in your presentation, and I quote:
- If Bill C-216 had been in place at the time that RDI or CBC Newsworld were first licensed,
cable operators would not have been able to add these services to the basic cable service
package.
Mr. Stursberg: No. We can ask Joel or Jay to comment on this, but my understanding is that the commission would not have been able to order that.
Mr. Bélanger: Again, in your opinion, can you explain why the CRTC would not have...?
Mr. Joel R. Fortune (Johnston & Buchan, Barristers and Solicitors): Mr. Bélanger, that's because under section 5 of the Broadcasting Act, the commission's authority to regulate the broadcasting system is subject to the broadcasting policy, which is set out in section 3.
Mr. Bélanger: Yes, section 3. That's correct.
Mr. Fortune: It is my understanding - and I'm sure the commission's view is correct, and I'm sure the committee would not disagree with that view - that the commission is bound by the policy as it is set out by Parliament in section 3 of the Broadcasting Act. If that weren't the case, then there wouldn't be much purpose in approving this amendment. The commission is bound by it.
Mr. Bélanger: Therefore, you equate a CRTC ruling to include RDI and Newsworld, let's say, in the basic package as a negative-option situation.
Mr. Fortune: Yes, based on how this section is now worded, because it speaks of new programming services. Each specific specialty service would, it appears, be a new programming service.
Mr. Bélanger: I've been receiving contrary advice that, indeed, this would not detract from the ability of the CRTC to do what I'm describing. I'm just trying to understand what's right here. The previous set of witnesses said the CRTC wouldn't be hindered. I have a document that suggests the CRTC would not be hindered. You, however, seem pretty determined that it would be. Who is right?
Mr. Thomson: If we just actually replaced the phrase, ``new programming service'' with ``Newsworld'' or ``RDI'', we could see that the commission, under the Broadcasting Act, would not be able to allow distribution undertakings to demand or receive payment for the provision or sale of RDI without the express prior consent of the purchaser.
Mr. Bélanger: If I may read something here, Mr. Chairman, how do you gentlemen react to the following:
The words added to Canada's broadcasting policy by Bill C-216 are not intended to be prescriptive - that is, to confer a right upon cable consumers, which if violated, would afford them a legal remedy. Rather they are meant to clarify the statutory policy developed by the government to guide Canada's broadcasting system and, specifically, to indicate that negative option marketing techniques used by distribution undertakings to promote and sell new programming services are contrary to public policy.
Therefore, since the CRTC is obligated by section 5 - as you have pointed out - of the Broadcasting Act to regulate, they must then refer to subsection 3(1), which sets the policy. They have, within that, regulatory discretion.
You are suggesting that they have no regulatory discretion. Is that it?
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Mr. Stursberg: No. I think we have to distinguish. What we're saying is that on the reading of this as it's currently drafted, there is very little to interpret, so there's very little discretion required. On its plain face, it says you can't do any of things we've listed in our brief. If you were to say here ``the sale of a new package of programming services'', then there might be some issue about discretion, because they'd have to say what a new package is.
To come back to your observation, the alternative to doing it the way we've suggested is to do the other thing we have proposed in our brief. That is that if you leave this the way it is, you should explicitly give the commission full authority to be able to interpret and manage this particular arrangement. We just thought that overall, in terms of what we understand the committee to want to accomplish, it would have been cleaner and clearer just to put in the word ``package'' and off we go.
Mr. Bélanger: Thank you.
The Chairman: Are there any more question from the members? Mr. Arseneault.
Mr. Arseneault (Restigouche - Chaleur): I just want to pursue a little point here, though not in detail.
You mention, Mr. Stursberg, that the cable industry is in spirit supporting this bill. You mention that from now on you're going to pursue the positive-option basis. I want to pursue that a little bit as to what type of guarantees or sanction there would be. Mr. Gallaway had a similar type of question.
If I have a cable company in Atlantic Canada that decides it wants to use the negative-option billing and it's not against the law because maybe Bill C-216 didn't pass, what would prevent it? What type of sanction are you talking about? What guarantee do you have, other than the clout of the consumer, that this company will not use that?
Mr. Stursberg: Well, we think the clout of the consumer is important now and is going to become substantially more important in the future. As soon as the direct-to-home satellite services are up and operating, then the best possible response on the part of a consumer who doesn't like however it is that he's been treated by the cable company is to say no, thank you, I'm taking my business elsewhere.
We understand that the direct-to-home satellite people will be up and operating relatively soon. There's a series of others on the horizon. The government has called for applications for broadcast cable delivery systems. In fact, people had to file yesterday asking for licences for these kinds of cable delivery systems. That will be a second alternative for the consumers, and we would expect that as soon as the head start rules are concluded, the telephone companies will be offering a cable television service, and that will be a third option for consumers.
I think the real clout will be that if we don't behave in ways that consumers would like us to behave, they will apply the worst possible sanction you can to any business; they'll simply withdraw their business from us.
Mr. Arseneault: But isn't the advantage of a negative-option billing quite often the lack of consumer knowledge? We're talking about small areas and regional areas. How are they to know if they're in a negative-option billing program or a positive-option billing program? How will they know immediately? I know I don't look at my cable bill in great detail. If someone asked me exactly what I have at home, I wouldn't know.
What you're telling me this morning is that there's no mechanism in place to sanction another cable company. You're just going to rely on the knowledgeable consumer. It's not a matter of being intelligent or not intelligent with regard to knowing what cable you have, it's just having that information.
What I'm afraid of is that there will be something like what the tobacco companies did when the restrictions on advertising were dropped. They said, oh no, we're going to take care of the advertising. We have a code. This is what we're going to do. Less than a year later, we're finding these large billboards up appealing to youth. I know it's a different realm and we're not talking of the same industry, but -
Mr. Stursberg: You have a number of things. You have our very strong, clear public statements that we do not want to that.
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Mr. Arseneault: We had that from the tobacco industry.
Mr. Stursberg: Number two, you have our very clear support for this bill. If you pass this bill, as I say, we support it.
Number three, I believe that in the future - and in the very near future - if we don't please our customers, then we are going to have enormous business problems. So for us now to go down paths that are consumer unfriendly strikes me as being just a crazy route to take.
Mr. Arseneault: Now, yes.
Mr. Stursberg: Now and in the future, absolutely.
We have to have a relationship with our customers in which they find what we offer them and the manner in which we deal with them deeply attractive. They have to like us deeply. I don't think there's any doubt about the fact that we have to work much more as an industry on how to build that kind of a relationship, how to ensure that what we're doing is what our customers want us to do.
What's the manner in which we bill them? What's the manner in which we offer the services? What kind of response do they get when they phone us on the telephone because they're having a difficulty? What's the range of choice they get? How much control do they have? Can they block out violent programming for their kids, and so on?
So everything we've been trying to do over the course of the last little while has been very much to take us in the direction of strengthening that relationship.
We have no problem with this bill, either in principle or in fact. Our only concern is to make sure it's drafted in such a way that it accomplishes what you want without simultaneously causing other kinds of difficulties.
Mr. Hanrahan: I want to follow up on what you're suggesting here.
You are saying that competition in the marketplace is going to keep you from displeasing your customers. The tobacco industry was brought up. Without making accusations, we might perhaps look at the oil companies.
What's to prevent the telephone companies, satellite direct-to-home, and you from agreeing that a course of action common to all three of you may be valid? In other words, on the packaging aspect of it, the other two may look at it and say, ``Well, it worked well for the cable companies. Why won't it work well for us?'', thereby decreasing competition and almost getting a whole process involved that is common to each of you.
Mr. Stursberg: I think that if we were to collude with our competitors to -
Mr. Hanrahan: I'm not suggesting colluding in that sense. I'm suggesting a business practice that worked in the past. If it works for company A, why won't it work for companies B and C?
Mr. Stursberg: Let me try to respond to it in three different ways.
First, if we were to engage in any collusive behaviour, obviously it would be a violation of the Competition Act, and we'd hear from the director of competition policy quite quickly.
Secondly, it's not been my experience that if you have that many competitors in the marketplace - MMDS, direct-to-home satellites, the telephone companies, and us - all searching for business, it's going to be very easy for anybody to agree on anything, unless what they're all agreeing on is something that all customers like. In other words, if we discover a practice that everybody likes, it may well be that everybody will try to do that. But I'm not sure that's a bad thing, because it all drives us in the same direction of trying to be customer friendly.
[Translation]
The Chairman: Do you have any further questions, Mr. Marchand?
Mr. Marchand: I would simply like to add something in the context of what our guest,Mr. Stursberg, has told us today.
Earlier on, in response to a question I asked regarding a letter or a memorandum he sent, he said that it hadn't come from him. I would simply...
The Chairman: Mr. Marchand-
Mr. Marchand: Mr. Chairman, on a point of order.
The Chairman: Mr. Marchand, I clearly stated that we were here to study Bill C-216. I allowed you to ask your question and I granted Mr. Stursberg the opportunity to respond, even if your question was out of order.
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He answered that he was willing to discuss the matter with you after the meeting. I do not wish to hear any further discussion of Mr. Stursberg's letters. That doesn't fall under the mandate of this committee. We are here to study Bill C-216. There are members who have other work to do after the meeting. I think the matter is closed.
You may have a discussion with Mr. Stursberg in order to obtain more information and you may deal with the matter as you please, either by asking a question in the House or by making the documents public. It is up to you to decide. However, our role here is limited to discussing Bill C-216. If we open up the discussion on this matter, Mr. Stursberg will give answers, you will ask him further questions and it will go on and on. My role is clear; I must see to it that we pursue our study of Bill C-216.
Mr. Marchand: Mr. Chairman, I raise a point of order because what the witness has stated is not true. He declared that he isn't the author of the letter. I wish to state, for the record, that the facts have been verified and that he is indeed the author of the document I referred to concerning a suggestion he made. That is all I wish to say.
The Chairman: Mr. Marchand, I will ask the clerk and those in charge of transcribing the minutes to ignore the remarks you have just made. I do not believe that it is our place to make remarks on the validity of correspondence from Mr. Stursberg. That is not our role. Our role today is to study Bill C-216.
Mr. Marchand: Mr. Chairman, your role is not to prevent me from expressing my opinion. The witness has just made statements that I believe to be untrue and I would like them to be corrected. That is all I'm looking for. He says that he isn't the author of this letter. It just so happens that I have proof of the contrary. I simply wish to have this rectified, Mr. Chairman.
Mr. Arseneault: Mr. Chairman, on a point of order.
The Chairman: Mr. Arseneault.
Mr. Arseneault: The committee's Order of the day states that the purpose of today's meeting is to study Bill C-216, and it is the only item there is. There is no room whatsoever for further items, such as Stursberg's letters. Your first question was out of order. You asked it and you obtained an answer. It should be left at that, otherwise, we will continue talking about this matter all day, neglecting our primary task which is to study Bill C-216.
The Chairman: Listen, I established at the very outset that the question was out of order, but I nevertheless allowed Mr. Stursberg to answer. His response was that he hadn't written the letter, but that he was prepared to discuss the matter outside this meeting. The matter is closed.
The question is inadmissible and I will order the clerk to ignore all references to the validity of Mr. Stursberg's letter. This does not fall under our ambit. My role is not to pass judgment on the matter nor to listen to comments pertaining to it. Therefore, none of this will appear in the minutes of the meeting.
Mr. Marchand: Just a minute. All of the statements he has made will disappear from the minutes?
The Chairman: No, no. What has been stated thus far will remain.
Mr. Marchand: I do not want to pursue this discussion. All I wished to do was make a comment on his statement. He stated that he wasn't the author of the letter. As it happens, I have proof that he is indeed its author.
The Chairman: Mr. Marchand, I must interrupt. If you do not agree with my decision, then take the matter up with the Speaker of the House. As Chairman of the committee, I am entitled to decide whether a question is admissible or not. I declared that it was inadmissible, but I allowedMr. Stursberg to respond, which he did. The matter was then closed and any further comments are inadmissible and I will not accept them.
This matter has been closed since Mr. Stursberg gave his response. The questions following will not appear in the minutes of the meeting. I am asking the clerk to ignore all references made to this issue following Mr. Stursberg's answer. If you are not in agreement with my decision, then you may call upon the Speaker of the House. As far as I'm concerned, I believe that our role is not to discuss matters of this nature and I do not wish any further discussion concerning the validity ofMr. Stursberg's letter. That has nothing to do with our work here. That is my decision. The matter is closed for now.
If there are any questions relating to Bill C-216, I am perfectly prepared to listen to them. Otherwise, I will declare that we have finished with Mr. Stursberg's presentation and thank him for appearing before us.
[English]
Thank you very much for appearing.
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[Translation]
Mr. Stursberg: Thank you, Mr. Chairman, and thank you, members of the committee.
If you wish, the two of us could discuss this matter together.
[English]
The Chairman: We'll now proceed with clause-by-clause study of the bill.
[Translation]
I will start off by reading the Order of Reference. Yes, Mr. Bélanger.
Mr. Bélanger: Mr. Chairman, I must admit that I am a little lost. You will remember that last Tuesday I asked several questions in order to determine whether or not the Bill restricts in some way the CRTC's ability to designate services such as RDI and Newsworld as part of the basic cable service package. The people who were present at the time assured me that that capability would remain unchanged. I obtained from our research staff, and I am very grateful for it, a small document that says basically the same thing.
I am perfectly prepared to accept that opinion. However, our witnesses today, whose business it is and who seem to know what they are talking about, have categorically said the opposite, namely that Bill C-216, in its present form, will prevent the CRTC from requiring of cable operators that they include RDI and Newsworld in their basic service.
The Chairman: Mr. Bélanger, would you like our witnesses to remain here in case there is additional information you would require from them?
Mr. Bélanger: No, I'm getting there.
Faced with these conflicting views, would it be possible to obtain an opinion from the Justice Department before proceeding with the passage of the bill?
I agree completely with my colleague Mr. Gallaway's objective, namely the prevention of ``negative'' billing. I do not want questions on that. I share this objective and I wish to give my support to it. However, I would also like to give the CRTC room to manoeuvre so that it might in the future have a direct influence on the services that will be included in the basic service. We could inadvertently accept something we don't really want. We should really be clear in our minds on this before proceeding with the passage of the bill.
I am therefore asking if we might hear a delegation from the Justice Department in order to have this cleared up. We might also use that opportunity to clear up the matter brought up by the member from the Official Opposition. Thank you.
[English]
The Chairman: Mr. Gallaway.
Mr. Gallaway: I don't want to presume to answer the question, but I will attempt to anyway at this point. The bill will not be retroactive, if that is your concern.
Mr. Bélanger: No, it's not the retroactivity. It's in the future.
Mr. Gallaway: In the future, according to the bill, the CRTC could not order consumers to receive RDI - or any other channel, for that matter. It would not affect their cable service as received in their home at that time. But in the future, if four cable channels, for example, were authorized in the next round - we're talking about specialty channels now - you would not have to receive all four of them, nor could the CRTC order you to receive all four of them.
In my package, I already receive RDI and I have no choice over that, but in the future it would be on a pick-and-pay basis.
Mr. Bélanger: So you're confirming what the witnesses said this morning. Passage of this bill would mean that in the future the CRTC could not order that RDI or Newsworld, or both, be included in the basic package, if it so desired. Are you confirming that?
Mr. Gallaway: Yes, I'm confirming that. They are already included.
Mr. Bélanger: Not RDI. Not everywhere. Sorry.
Mr. Gallaway: All right, but there's not a uniform cable service in this country as it is.
Mr. Bélanger: Well, the reason I have a little problem with this, Mr. Chairman, is that
[Translation]
RDI appeared last year before the Committee on Official Languages our colleague sits on. The situation that was mentioned at the time was the following. The CRTC refused, about a year ago, to order that the Réseau de l'information be included in the basic package throughout the country. It had asked RDI to first make that request.
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RDI in turn asked that it be granted approximately a year to see what it might obtain by way of agreements with the various cable operators. Its representatives are to reappear before the committee to explain what their success or their failure has been as far as distribution throughout the country is concerned.
If the various agreements do not ensure national distribution for RDI, then its intention will be to ask the CRTC to impose its inclusion in the basic package. If, today, by passing Bill C-216 in the House, we in effect limit the CRTC's authority to impose this requirement, then I would like to see an amendment to the bill so that the CRTC does have this power. Thank you.
The Chairman: We are faced with two issues here. Mr. Bélanger is asking that we heed the orders of the Justice Department. The Research Branch is telling me that the committee isn't a client of the Justice Department and that it may not obtain legal advice from Justice. That being the case, we should perhaps call witnesses, etc. We had planned on holding two meetings for that purpose. We had asked all committee members to supply a list of the people who wanted to be heard.
If further debate is necessary, I have no intention to cut it off. The committee is master of its own activities. As far as reconsidering the matter and holding an extra meeting in order to hear representatives of the Justice Department or other witnesses are concerned, it is up to committee members to decide. After that, we will have to vote.
Up until now, we had agreed on two days of meetings for which we had a list of witnesses. We had asked the different parties to submit their own list and we had all agreed on the final list. If you wish to revisit that, if that is the wish of the members of the committee, then I have no objections whatsoever.
If you succeed in convincing your colleagues, Mr. Bélanger, then I will adapt.
Mr. Bélanger: I am making that request. I would like to get a legal opinion from representatives of the Department of Justice who are experts in the area of communications or on the Broadcasting Act. I would like them to present us with arguments either for or against the power of the CRTC to require that services such as RDI, etc., be included in basic service packages and to tell us if Bill C-216 has any bearing whatsoever on the CRTC's authority in this area.
I am putting this request to my colleagues as a francophone from Ontario where, in small communities - and, as a matter of fact, throughout the country - RDI has not yet succeeded in negotiating agreements with cable operators. The CRTC must have this power. A good many citizens throughout the country - and you may or may not share their opinion - believe that Newsworld and RDI should be included in the basic service.
I would not like to see us inadvertently remove this power from the CRTC.
[English]
The Chairman: Okay, do you have a motion?
[Translation]
Mr. Bélanger: I therefore move that we invite representatives of the Justice Department to appear before us in order to clarify this point.
[English]
I don't want to oppose this, but I don't want to do something that I'm not aware of.
[Translation]
The Chairman: Mr. Bélanger, you asked to make a comment.
Mr. Bélanger: Yes.
[English]
Mr. Arseneault: I think the role of the committee is to examine these bills in some detail. If there is a little hitch, we have to try to correct it before it goes back to the House of Commons.
I think there is a consensus in the committee to promote this bill, but I think Mr. Bélanger has raised a very good point. I see no reason why we can't work on a consensus basis here and hear from further witnesses, but not with the idea that we're going to delay this forever. I would hope, however, that we could have those witnesses in place soon after the break and deal with it.
The Chairman: Mr. Gallaway.
Mr. Gallaway: I think the fact that we've had the alternate witnesses here... The question wasn't asked - or perhaps it was asked - but we were given a conflicting opinion. I think we're mixing and matching specialty services and basic cable packages. The CRTC has in fact regulated for basic cable services. We're talking about add-ons, specialty channels, in this bill. So whether RDI or any other channel is included in a package I don't think is relevant in this bill. It's a question of new services coming on stream. The forty new applicants are the people we're concerned with in this bill, not with those already existing.
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The Chairman: Mr. O'Brien, do you have any remarks?
Mr. O'Brien: Mr. Chairman, I certainly support the bill. As Mr. Arseneault has said, I think with rare exception here there's an intention to support the bill. My colleagues raise an important point, and I'm going to be guided by the parliamentary secretary. I would hope we wouldn't take too much longer, but if colleagues think it's important to have another witness, perhaps my colleague Mr. Bélanger could tell us who he thinks we need to hear from. I hope we can wrap it up in the near future, but I don't want to leave a stone unturned when a colleague has that concern.
Who do you want to hear from, Mauril?
Mr. Bélanger: Justice, I would imagine.
Mr. O'Brien: Okay.
Mr. Peric (Cambridge): I would agree with that, Mr. Chairman.
The Chairman: Before we invite additional people, and before we have another session, I want to be very clear myself. Once you open it up to legal opinions, you invite the Minister of Justice, the Minister of Justice will want to know exactly what the parameters are, which people are going to be heard. Are we then inviting CRTC lawyers, other lawyers? Are the members going to be satisfied with an opinion from the Department of Justice? Will they give it here in categorical terms? I don't know. I'm just saying we might be opening up quicksand here. I don't know.
Mr. Peric: Mr. Chairman, I'm fully supportive of this bill, but I do sympathize with my colleague and his point. I would suggest we call the legal department from the CRTC. If we get in touch with the Department of Justice, I don't think they can come to one and the same conclusion. There are so many of them and so many different opinions. So why don't we call one last witness from the CRTC side and then finish it off?
The Chairman: Mr. Peric, what strikes me as odd there is that Mr. Spicer himself said he felt he had no objection to the bill; it was overkill, maybe, but he had no objection. If he did, it seems to me his lawyers and everything would have told him there were a lot of problems with it.
Before we start inviting people - I'm not averse; if this is the wish of the committee, I'm just there to carry it out - I want to be very precise about who we want, under what format, whether it is a legal opinion, whether it is just the justice committee to appear as witnesses, because I know they're going to be asking me to be very precise. Is it focused on strictly the question of whether RDI can be imposed as a public order service by CRTC or not, relative to Bill C-216? I really want to know exactly what the terms of reference are before we go to the Department of Justice.
[Translation]
Mr. Marchand: Might we give an opinion on the matter?
The Chairman: You personally?
Mr. Marchand: Yes.
I believe Mr. Bélanger's suggestion should be taken very seriously. The issue he has brought up is worth being studied and clarified.
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If this point is not clarified, there could be some very unfortunate consequences. I hope there aren't any. But I believe it would be worthwhile to endeavour to have it cleared up. I do not know what the other member for the Opposition thinks or whether he agrees or not.
[English]
Mr. Hanrahan: Well, I'm guided by two items here. One, the chairman was here, and it was his opinion that there were no further complications with this. He said it's dead. As you suggest, he has access to all of these legal opinions and would have been apprised of any shortcomings in this area. Secondly, the drafter of the bill is with us, and he does not seem to see any need for further opinion.
I don't see any necessity for opening this can of worms. We could go on forever adding more and more complications once we get into the legal end of it. It bothers me that we are going to end up with almost nothing at the end of this if we keep going with more and more.
Mr. Gallaway: I want to respond one more time to Mr. Bélanger's question, because I don't think I answered it adequately the last time.
The example that was used is RDI. RDI is included in many cable services in Ontario, certainly, and across the country, I understand. It was imposed by the CRTC and it was obtained and paid for through negative-option billing.
For those markets in which it already exists, this bill will change nothing. We cannot go back. There may be some markets in which RDI is not included or in fact is not available. If RDI were made available to a cable market where it is not available at this time, this bill would say that the CRTC could not impose that on that market area. Because RDI is already licensed anyway, this bill would say if you want it, you will receive it and you will pay for it. If you don't want it, you won't receive it and you won't pay for it. That's all it does.
Mr. Bélanger: I have to disagree with that. There's not just negative-option billing and positive-option billing. There's also compulsory service, where it's included in the basic service. I think we're lumping together negative option and compulsory.
If the CRTC decides for whatever reason that the CBC is to be on the basic service, CBC will be on the basic service. That's it, that's all. If the CRTC were to decide that RDI or Newsworld should be on the basic service, it would be on the basic service.
I have no opposition to ending negative-option billing, none whatsoever, but I am concerned that the RDI story is not yet played out. It is currently negotiating with some distributors in the country. There's a multitude of small communities in western Canada that do not have the service because the distributors have not agreed to distribute it.
The option is still out there that RDI could go back to the CRTC and say we have tried and we have failed to convince them to include it, and we would therefore ask you to consider putting RDI on the basic service. If, with this bill, we have inadvertently taken away the authority of the CRTC to do that, I would be rather sorry for that.
I just wanted to clear that up. That's one point. I don't want to prolong this endlessly. AsMr. Arseneault has mentioned, perhaps it would be best to call on... Well, I don't know who to call. There's the possibility of Justice, CRTC lawyers, and maybe even the departmental lawyers. I don't know who, but I think we need someone in a position to look at both sides of that issue and say this is the likely consequence of adopting Bill C-216.
I have no hesitation that it will be adopted. It seems to me quite reasonable. All I'm asking is that we not inadvertently do something we're not intending to do.
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Mr. Gallaway: I think we're in some way mixing apples and oranges. About basic cable, the mix of a cable service is not determined by the CRTC. The CRTC only authorizes whether a channel will be on the air or not. The question of the basic cable service is already provided by the cable companies and they decide that. They decide the mix and they decide the price. The CRTC approves the price for x channels comprising basic cable. We're talking only about add-on. If you would like to see in western Canada an add-on to a service -
An hon. member: Basic.
Mr. Gallaway: Okay, basic. It's very difficult to know what's basic and what isn't, though. If you want to see RDI added onto basic in a market area and all of the subscribers in that area paying for RDI, then you are still endorsing negative-option billing, because, I'm assuming, there already is basic cable in that area.
The Chairman: Mr. Bélanger, I'm going to ask the lawyer from the Library of Parliament, who is our researcher, to give an explanation. I don't know if it'll satisfy members, but at least it will clarify things. Ms Alter was the researcher for this committee before when CRTC appeared on the telecom act. She has extensive information and knowledge on it. So I thought rather than my translating her thoughts I would let her give explanations as she feels necessary. It could help members.
Ms Susan Alter (Committee Researcher): I'll make two points here. The first one is historical. When the telecom bill was before this committee when it was the communications and culture committee, the CRTC had very serious concerns about the wording in parts of that bill. They presented a whole roster of technical amendments. From that I think we can conclude that if the CRTC had concerns about the wording of the bill and wanted to propose a technical amendment as was proposed today by the CCTA, they would have felt free to do so.
My other comment - and I don't want to contradict you, Mr. Gallaway -
Mr. Gallaway: I don't mind.
Ms Alter: - is that the CRTC does regulate the basic tier of cable. It does determine what programming goes on that tier. Then it has this other system whereby certain programming is allowed only on a discretionary tier. Other programming can be on one or the other, depending on who consents to it being there, who agrees. It's a system the CRTC set up and clarified through a public notice in 1994. I think it was 1994-60.
The CRTC does regulate the basic tier. It regulates the prices of the programming and so on and so forth. What it does not regulate is the discretionary tier. As far as the discretionary tier goes, it allows the cable companies to set the rates - where they have the latitude, to decide on what programming they will place there. It is that situation, what was happening with the discretionary tier, that led to the backlash in January 1995.
This bill was attempting, through an amendment to the policy provisions of the act, indirectly to put an end to negative-option marketing. Since negative-option marketing was the technique that was being used to sell the discretionary services, again I think one could interpret this amendment as really applying to those types of services.
I guess I'll leave it there. If anyone has any more questions-
Mr. Hanrahan: Is it your opinion, then, that we should call a legal expert in for an opinion on this issue, or are we as far down the road as we're going to get on it?
Ms Alter: I really do not want to comment on that. I think this is a question in the committee's hands, whether they would like further clarification.
Mr. Hanrahan: I am asking simply for your opinion as legal counsel.
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Ms Alter: I think that if the committee feels it requires further clarification of this issue, then it should invite a further witness. I can't speak for what the committee thinks.
[Translation]
Mr. Marchand: Mr. Chairman, from what I know, the Cable Television Association believes that if the bill is passed, it will no longer be able to offer RDI in the basic service package. This bill will prevent cable operators from including RDI. That is what they have told us.
The Chairman: I do not wish to make any comment, but it is obvious that there are various interests involved. In any event, we cannot continue to discuss this endlessly. The issue must be resolved.
[English]
Do the members want to put this to a vote? That's the only way to express... So we'll put it to a vote and members will vote according to how they see it. If the vote is that we should refer it for more clarification, then I'm afraid you'll have to leave it with me, with the clerk, to find out who the best people are.
If we're going to look for black and white answers in these things, I don't know that lawyers will ever provide them. There will always be a caveat. One lawyer will agree; another will disagree. I don't want to prolong this forever, with a battle of lawyers going on. Eventually we'll have to settle our minds. I don't know whom we'll call to settle this thing, whether it will be the CRTC or the Minister of Justice. I'll just have to find out in the best way I can.
I think we'll have to call it a day after that. We just can't carry on.
What is the wish of the members? I'm going to ask the members to show by a show of hands those who are in favour of referring the bill for further study. Those against?
I think the yeas have it. So we'll have to set another session for study.
Mr. Peric: Just one more.
The Chairman: Let's find time for just one more.
So we can't examine it clause by clause. It's very clear that we don't have time. We can't devote months to this study. It'll be just one session for sure, and that will be it.
Would the members stay for a motion that we have to clear up, please?
An hon. member: Is this on the motion?
The Chairman: Yes, it's on the motion. I just want to set the background. If everybody agrees, we can clarify this in two or three minutes. It won't take time.
A motion was presented by Mr. Leroux of the official opposition.
Mr. Hanrahan: I guess we did give our word that we would remain, did we not?
The Chairman: Right.
Mr. Hanrahan: I'm sorry.
Mr. O'Brien: I'm happy to stay. I want to make a point for the record, though. I'm not sure if Mr. Marchand appreciates it. I think that two or three times the committee -
The Chairman: More than that.
Mr. O'Brien: - was prepared to deal with this issue, but our colleague Mr. Leroux was not able to be here. So just so there is no misunderstanding, there was no attempt by the committee -
Mr. Marchand: There is no misunderstanding. I understood that. It's not for any criticism at all on the part of the committee. I wanted it to pass because it's urgent in terms of -
The Chairman: Mr. Marchand, I think we can clarify it and clear it up here and now.
[Translation]
Mr. Leroux tabled a motion with several ``whereas'': there are four or five ``whereas'' as well as a main motion. Mr. Bélanger had tabled an amendment to the motion and the committee's experts tell me that the amendment, as formulated, constitutes a new motion. It must therefore be read as a new motion.
We must therefore vote on amendments and sub-amendments. I would like to suggest something that should satisfy the movers of the motions as well as all of the other members of the committee. Some members also have amendments for the ``whereas'' parts. They don't agree with some parts, which they find subjective, etc.
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Mr. Marchand, I am proposing something that I believe will satisfy you. We redraftedMr. Bélanger's amendment to make it admissible. My proposal is that we retain the motion as is, including in it the institution that you want to invite. I don't know who it is. Perhaps you could tell us. Afterwards, we will vote on that motion and that will be it. Everyone should be happy with that.
Mr. Marchand: I could even table such a motion if you like.
The Chairman: What is the name of...?
Mr. Marchand: It is the Syndicat général du cinéma et de la télévision.
The Chairman: The motion would read as follows:
- Be it resolved that the Heritage Committee invite the NFB and the Syndicat général du cinéma
et de la télévision to appear before the committee to give the latter all relevant information on
the restructuring plan of the NFB and to respond to the concerns of committee members.
In English -
[Translation]
Mr. Marchand: Could some urgency be attached to that? It seems that they are going to be closing their doors or those of the labs between now and June 28.
The Chairman: Let us first vote on the motion. We too wish to hear them as quickly as possible.
[English]
In English:
- Be it resolved, that the Heritage Committee invite the NFB and le Syndicat général du cinéma et
de la télévision to appear before the Committee to give the latter all relevant information on the
restructuring plan of the NFB and to respond to the concerns of the Committee members.
Motion carried
The Chairman: Mr. Marchand, I will have the clerk invite the NFB and the union as quickly as possible, for the earliest possible date. There is also Mr. Gallaway's plan, but we will try to do that as soon as possible.
Thank you very much.
This meeting now stands adjourned.