Transcription, Audience du 20 juin 2025

Les participants et l'endroit

Tenue à :

Centre de Conférence
Portage IV
140, Promenade du Portage
Gatineau (Québec)

Participants :

• Président de l’audience : Nathalie Théberge
• Membres : Adam Scott, Vice président, Télécommunications
  Bram Abramson, Conseiller, Ontario
  Joanne Levy, Conseillère, Manitoba et Saskatchewan
  Stéphanie Paquette, Conseillère, Québec
• Conseillers juridiques : James Wilson, Imene Benaissa, Kathleen O’Toole
• Secrétaire de l’audience : Sonia Gravelle
• Gérantes de l’audience : Sylvie Julien, Jacquilynne Schlesier

Table des matières

Présentations

2034 Corus Entertainment Inc.

2289 Rogers Communications Canada Inc.

2649 Pelmorex Weather Networks

2786 Spotify

2928 Forum for Research and Policy in Communications

3008 Cogeco Inc.

3167 The News Forum Inc.

Engagements

2579 Engagement

2687 Engagement

2768 Engagement

Transcription

Gatineau (Québec)
20 juin 2025
Ouverture de l'audience à 9 h 00

Gatineau (Québec)

‑‑‑ L'audience débute le vendredi 20 juin 2025 à 9 h 00

2033 THE SECRETARY: Bon matin. We will start with the presentation of Corus Entertainment Inc. Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

2034 MR. THOMPSON: Merci, Madame Sécretaire.

2035 Good morning, Vice‑Chairs, Commissioners, and Commission staff. My name is Matt Thompson. I'm vice‑president and associate general counsel, Regulatory, at Corus Entertainment.

2036 Joining me today is Corus' chief executive officer, John Gossling; he's on my left. To John's left is Corus' chief legal officer and chief administrative officer, Jennifer Lee. To Jenn's left is Vice‑President and Associate General Counsel, Rights and Revenue, Sara Chan. And to my right is Drew Robinson, vice‑president, Content Distribution and Revenue Management, and our external counsel, Kevin Goldstein, who I believe you're familiar with.

2037 Corus thanks the Commission for the opportunity to appear at this landmark proceeding, which could not be higher for our company and our over 2,000 Canadian employees. Corus is proud to be Canada's largest independent broadcaster. Through our 45 licensed television stations and services, 36 licensed radio stations, and our suite of digital products, we excel at bringing compelling content to audiences wherever they are. Through our news and other Canadian programming and extensive community engagement, we proudly serve the objectives of the Broadcasting Act every day, and we have done so for over 25 years.

2038 I'll pass it over now to John now to continue with our opening remarks.

2039 MR. GOSSLING: Thanks very much, Matt, and good morning.

2040 Corus comes to this hearing about market dynamics from the standpoint of an independent Canadian programmer. As an independent, we do not benefit from unfettered access to affiliated distribution platforms, bundling with affiliated telecom, technology, or e‑commerce products or any internal cross‑subsidy. Instead, our video products rely on distribution through third‑party cable, satellite, and digital providers.

2041 In the past, broadcast distribution arrangements were often mutually beneficial: distributors needed broadcast channels to fill their cable and satellite subscriptions, and programmers needed access to BDU subscribers to monetize their content investments. Parties engaged in tough commercial negotiations, but they understood they needed one another and generally came to equitable terms. And viewers ultimately benefited from natural competition and ample choice.

2042 Unfortunately, that equitable and fair partnership model is a thing of the past. Today's market dynamics are defined by Canadian programmers' structural disadvantages compared to Canadian BDUs and foreign streamers. That's because the balance has shifted drastically: programmers need distributors more than the reverse. Although broadcasters can now access audiences without going through a traditional BDU, this should not be confused with a pure direct‑to‑consumer model. In reality, the vast majority of video content continues to reach Canadian audiences through third party intermediaries.

2043 By contrast, Canadian BDUs are increasingly looking to replace Canadian programming services with foreign streaming products or affiliated content. And as for foreign VBDUs, they engage with Canadian programmers on their own terms, if they do so at all.

2044 In the regulated space, the competitive dynamic has become characterized by unfair BDU conduct. This includes threats to drop even well‑performing discretionary services, unilateral packaging decisions, and demands for significant annual wholesale rate decreases, all while programming costs rise and advertising revenues decline across the industry.

2045 Regulations provide a modest level of support, but reforms since Let's Talk TV, including the Wholesale Code, have weakened programmers' competitive position. Through these changes, the CRTC solidified BDU control over packaging, eliminated access rights, mandated flexible packages, and prohibited certain wholesale rate structures, all in the name of consumer choice.

2046 This was a valid objective, but the policies have unfortunately shifted greater risk onto programmers, making it difficult for them to absorb higher content costs. The policies have also had the unintended effect of enabling BDUs to dictate and reduce choice for subscribers while providing them with less value. And keep in mind, the wholesale fees of programming services are the only part of the content supply chain that is actually regulated. Generally, the costs of programming to broadcasters and the retail price of the TV subscription packages generally are not.

2047 And all of this was before Rogers acquired Shaw. As the Commission predicted in 2022, that transaction has been transformative for the broadcasting sector, creating the most dominant BDU in Canada by far. Rogers now controls upwards of 50 per cent of the Canadian BDU market in English Canada, and up to 70 per cent of the national subscribership of some of our discretionary services. Clearly, Rogers has the market power to decide which channels succeed and which ones fail.

2048 That level of dominance in the distribution market would be challenging enough for programmers but is worsened by Rogers' vertically integrated status. As the Commission observed in 2015,

“vertically integrated [BDUs] have every incentive to ensure their related programming services are insulated from the financial pressures that come with greater choice ...”

2049 Since the merger, that is exactly what has come to pass.

2050 Over the last year, Rogers has embarked on an aggressive content strategy, obtaining the Canadian licensing rights to popular foreign trademarks and programming that used to belong to Corus and Bell, and launching or rebranding six new discretionary services powered by those rights.

2051 Now it aims to “cut out the middle company,” as its Chief Financial Officer put it last year, and it is using the full weight of its distribution assets to favour affiliated channels and target competing services for removal, de‑packaging, and lesser channel positioning.

2052 To be clear, Corus is not here to complain about losing content rights from any US studios. We've accepted that difficult outcome and we've moved on. Within days of learning that those rights would shift, our teams began sourcing new Canadian and foreign content. And within months, we refreshed the brands of two of our Canadian specialty services, home and food lifestyle services, now Home Network and Flavour Network. We maintained popular Canadian/US shows on both services, and we added some fresh new content to round out our schedules.

2053 Today, those two channels and our home‑grown factual reality service, Slice, are enjoying great success. Home and Flavour are both Top 20 English language specialty services and the number one and number two lifestyle networks in the market. And Slice's audiences are up five per cent this year in the key adult 25‑54 demographic. All three of these services are besting their newly created, direct competitors by considerable margins.

2054 This comeback story has been a defining moment for our company, and it demonstrates the industry‑leading expertise in building resonant brands and our team's resilience in the face of adversity. It is testament to what independent Canadian programmers can achieve, and we are excited for what lies ahead.

2055 Now, I'll pass it over to my colleague Jenn.

2056 MS. LEE: Thanks, John.

2057 To be clear, Corus is not interested in stalling new channels or any competing services. We simply want to compete with others like Rogers on a level playing field and continue serving audiences in the way our channels are doing today.

2058 But through its recent actions and the positions it's taken in this proceeding, Rogers has shown little interest in a fair and competitive marketplace. It simply wants competing channels like ours to disappear. These are not moves designed to meet consumer choice; they are designed to control and limit it.

2059 This is not the story of any one company's challenges with another, however. It is a cautionary tale for the industry as a whole and a matter of larger policy significance. It is about the perils of unchecked vertical integration and market dominance for any independent programming business.

2060 To be sure, the Act speaks loudly on this point. Parliament chose to add a policy objective, emphasizing that “independent broadcasting undertakings should continue to play a vital role” in the system. Faced with an entity that controls 50 per cent of the broadcasting distribution market in English Canada, whose declared intent is to “cut out the middle company” and other structural disadvantages, the only way to realistically fulfill that objective is to maintain strong broadcasting regulations.

2061 In our view, this entails updating the Wholesale Code to support more balanced negotiations, introducing new requirements for BDUs to carry a fixed number of independent discretionary services, and establishing discoverability and prominence requirements for BDUs and VBDUs. It also includes maintaining meaningful undue preference and standstill rules and shifting to more productive dispute resolution processes.

2062 For their part, to varying degrees, SOME VI players advocate a different approach, effectively calling for de‑regulation of broadcasting distribution in Canada. They would do away with the Wholesale Code, enfeeble the standstill rule, and raise the bar for undue preference complaints impossibly high. Improbably, they ask the Commission to do what it has never done before: trust market forces and, indeed, themselves to satisfy the objectives of the Act relating to content distribution.

2063 In parallel, international streamers and VBDUs simply want to maintain their structural advantages and continue playing by their own rules. They refuse to accept the Commission's authority to regulate online undertakings and argue that any regulations affecting them are unnecessary.

2064 While there may be some distinctions in the Act, the law clearly empowers the CRTC to implement measures affecting online undertakings, including undue preference, discoverability, carriage and access requirements, and a duty to negotiate in good faith.

2065 Some intervenors have noted the declines in BDU subscribers in recent years. But these should not be viewed in isolation or considered grounds to deregulate content distribution in Canada. All major Canadian BDUs are integrated with home Internet access services that use the same wireline infrastructure and deliver strong, combined margins. Canadian programmers, especially independent ones like Corus, are in the more vulnerable position.

2066 Some large BDUs and online streamers have wrongly argued that there are no gatekeepers in the system anymore. In reality, it is prohibitively expensive for individual programmers to build and sustain OTT platforms. They lack pre‑existing customer relationships and may not be able to acquire the necessary digital rights. By contrast, BDUs and VBDUs benefit from their existing delivery infrastructure and direct customer relationships, among other things. These factors present huge competitive obstacles for Canadian programmers to go it alone and leave them reliant on distribution through gatekeepers.

2067 John?

2068 MR. GOSSLING: Thanks, Jenn.

2069 In closing, we all know that the online undertakings are here to stay and are very successful. Broadcasting businesses must be active in both the traditional and digital spheres going forward. Corus continues to invest substantially in content, build world‑class brands, and seize available opportunities to reach audiences online. We were early movers in the digital space with STACKTV, and we were the first Canadian broadcaster to offer a multichannel product through a digital distributor. In amongst its many features, our Global TV app allows enables BDUs to offer TV Everywhere products to their customers.

2070 Corus doesn't want acrimonious relationships with our distribution clients. We would like to see the Canadian broadcast sector evolve to a partner‑driven approach that gives all Canadian players, including BDUs, a chance to succeed. But for that to happen, the “fair, transparent, and competitive rules of engagement” that the Commission referenced are badly needed. Only these can support a sustainable “broadcasting system in which Canadians have access to and can discover a diversity of content.”

2071 Canadians deserve no less.

2072 MR. THOMPSON: Corus would like to thank the Commission again for considering our perspectives, and of course, we'd be more than happy to answer any questions that the Panel might have.

2073 THE CHAIRPERSON: Thank you so much for this presentation, and good morning to you all. It's nice to see some familiar faces. You've been very active in our hearing, and we thank you for your commitment and your engagement.

2074 I will turn things over to my colleague Commissioner Paquette, who will lead the question period.

2075 COMMISSIONER PAQUETTE: Good morning. So I would like to start with the topic of online distribution, online discoverability, and then afterwards I will move to the effectiveness of the current regulation, Wholesale Code, ADR process. So, we have a lot to cover, as you can see, so let's start.

2076 First of all, a very basic question. Can you describe to us your audio and video online offer in terms of products that are available and where, on which platform they can be found.

2077 MR. THOMPSON: Maybe I will pass it over to Drew to answer that question.

2078 MR. ROBINSON: On the video side, we've got STACKTV. STACKTV is a 16‑channel linear and on‑demand offering. We make it available exclusively through third parties. Through Prime Video was our launch partner. We have subsequently done deals with Fubo, Bell, and Rogers. We also have a very similar offering available through RiverTV.

2079 And then in addition to that, we've got our Global TV app. Our Global TV app was launched as a TV Everywhere primarily app that was to provide on‑demand and linear services outside of the home to our BDU partners. Subsequently, we have added some in‑front‑of‑the‑wall content that you can watch on demand. We also have some live news streams in front of the wall as well. For the most part, it is authenticated for the specialty outside of some promotional content, and then there's a bit of a window for the global content after it airs on conventional.

2080 COMMISSIONER PAQUETTE: Okay. And can you share your experience in getting access to the VBDU or connected device? Is it easy, difficult? Can you tell us more about this?

2081 MR. ROBINSON: It depends on which partner you are talking about. On the connected device side of things, the challenge typically sits around advertising and the advertising shares. A lot of the connected devices see themselves primarily as advertisers. That's where they make their money and their margins. So in some cases, it's been very challenging to agree on advertising shares, especially when they're looking for not just a large share, but they want to restrict advertising capabilities on those platforms.

2082 For the STACKTV product, I would say that, you know, we have had some very good partners that have continued and actually support our product, and we've been happy with that. We've had some other partners that launched the product but have effectively buried it. And so it can be a challenge with them to try to get the product front and centre when they're offering other products.

2083 COMMISSIONER PAQUETTE: You mentioned in your intervention that Canadian digital services do not always enjoy favourable carriage terms, suffer from limited promotion and discoverability, and, as you just mentioned, face pressure to hand over a significant portion of advertising revenue. Can you explain more how it works, especially on this advertising and discoverability part?

2084 MR. THOMPSON: Maybe I will just start with a general point, and then I will hand it over to Drew to talk about maybe more particular experiences.

2085 In most cases, these are international entities that operate in multiple markets. And as such, what we're faced with are standard terms and conditions that are applicable across many markets. These aren't real negotiations in many cases. These are take‑it‑or‑leave‑it propositions. And a lot of these standard terms are available for the Commission's review because they're published on these platforms' websites.

2086 So maybe I'll hand it over to Drew to talk a little more specifically about experiences.

2087 MR. ROBINSON: Thank you. Maybe I will try to tackle the discoverability part first. The advertising one comes somewhat separate.

2088 I think one thing that is worth noting is that there has been a massive fragmentation of rights. So the same show can be made available to a programmer ad‑supported, ad‑free; it can be direct to consumer, tied to a third distributor. These are all types of ‑‑ so one show can be sold a million different ways to a million different providers. And not always, in fact, quite more and more often, Corus doesn't have access to all those different types of rights.

2089 And so what the result of that is, is that a third‑party distributor carries the same series, the same episode, across and available on multiple offerings. So from a discoverability perspective, you're competing, even if you've got the top show, you're competing with the foreign streamers on that same platform. And in some cases, especially with STACKTV, which is an ad‑supported platform, the platform will prefer from a customer experience the ad‑free version. So the customer is therefore pitched that product first. And so the discoverability has become very complex.

2090 On top of that, you've got the idea of we've got ‑‑ we acquire content that can be ‑‑ and this ties to Matt's comment earlier ‑‑ you have these large multinational companies that are very familiar with the American programming, and they will support the large shows that they are very familiar with. It is harder to convince them at times to support a Canadian program and to get that front and centre and get that the same weight and get them to back it and put it on the main page and where customers typically gravitate to and where most content is discovered.

2091 COMMISSIONER PAQUETTE: Do they monetize discoverability on the platform? Do you have to pay?

2092 MR. ROBINSON: There are merchandisable parts on the various platforms. It's not across the board, but yes, there is a fee typically to get your content in certain merchandised areas, especially on the home page.

2093 COMMISSIONER PAQUETTE: Okay. And you were talking about the advertising revenue, that you need to share the advertising revenues with the platforms?

2094 MR. ROBINSON: Yes. There's two models. There is a rev share or an inventory share. I would say for the most part, digital distributors are gravitating towards an inventory‑share model where they are looking to actually access inventory in your content. And in that case, you are competing directly with them. They're selling the same ad in your show. And that's where there's a bit of an imbalance at times, especially when they're got data and things like that where they can attribute content, report back in ways that we cannot. And it's a very highly competitive space, especially in advertising.

2095 COMMISSIONER PAQUETTE: And you are also available on some Canadian virtual BDUs. Is the experience similar or is it different?

2096 MR. ROBINSON: I would say it's slightly different because you are not dealing with the large multinational aspect of it. In some case the advertising capabilities of those companies are not as advanced as the larger international companies. So I would say currently there are some differences, but I think in the long term, think we should see them all the same.

2097 COMMISSIONER PAQUETTE: Okay. And you also have ‑‑ Corus has a representative of Pluto TV in a FAST service, a FAST channel. Can you tell us a bit more on how FAST channels and virtual BDU‑like platforms work, like who prioritizes the content, how revenues are generated, what's your role in this regard, and how discoverability is managed on the platform.

2098 MR. THOMPSON: Maybe, Commissioner, we will start with John, who can maybe clarify our relationship with Pluto, and then maybe pass it over to Drew to talk a little bit more about the product and how we interact with it.

2099 MR. GOSSLING: Yeah. So we are no longer representing Pluto in Canada, so that relationship has ended as of the end of April.

2100 COMMISSIONER PAQUETTE: Oh. Didn't know, so.

2101 MR. ROBINSON: In terms of the monetization, I'd say it's not quite a standard model is my understanding. Our experience has been primarily with our Pluto or ex‑Pluto partnership. But FAST channels can be delivered, a bunch of assets, video or shows can be delivered, and they will curate the channels themselves. You can deliver your own feed to them, and then they would all have various monetization strategies and preferences. So it's not a one size fits all.

2102 COMMISSIONER PAQUETTE: So you mentioned in your intervention that the greatest barriers regarding access are resulting from entities prioritizing their own services and interests as well as decision‑making regarding the Canadian market being driven by market dynamics outside of the border. You give the example of the recently launched Rogers Xfinity BDU service, which includes, you say in your intervention, 69 live channels, 23 of which are owned by Rogers, and none of the others are Canadian services. First of all, were you approached or have you attempted to be included on the app and its packages?

2103 MR. ROBINSON: We had not been approached.

2104 COMMISSIONER PAQUETTE: And have you attempted?

2105 MR. ROBINSON: It's come up in conversation.

2106 COMMISSIONER PAQUETTE: Okay. And can you tell us what is the obstacle from your point of view to the integration of your service on the app? Is it a question of terms and conditions, or is there more?

2107 MR. ROBINSON: I think, because we haven't had the conversation, I wouldn't know.

2108 MR. THOMPSON: Commissioner, are you interested in that particular application or are you just generally what were the various ‑‑

2109 COMMISSIONER PAQUETTE: Well, I am referring to the example that you give in your intervention, the Xfinity platform, newly launched Xfinity platform.

2110 MR. THOMPSON: Like Drew said, we haven't had the benefit of many conversations about it, so it's hard to speak to any particular barrier that relates to that particular product.

2111 COMMISSIONER PAQUETTE: Okay. So a lot of connected devices and virtual BDUs grant key visibility to the major streaming services like Netflix, Prime Video, Disney. You know, these services are pre‑downloaded on the connected devices, have content prominently featured. They also very often have a button on the remote control. So when you negotiate with the foreign platform, is it something you try to negotiate or not? What's the most you can get most of the time?

2112 MR. ROBINSON: Well, yes, those are part of the negotiations, I guess, is the easier part of that question. And you do your best. I mean, these conversations have become quite complex. It's not just perhaps 10, 15 years ago around a wholesale fee and a package. You're now talking about data. You're talking about, as you pointed out, the marketing and the discoverability on the platform. I would say it depends on the title; it depends on the provider.

2113 I would say that what is the largest challenge we face there is you're now dealing with large multinational distributors who have partnerships with large multinational programmers. And those conversations they are flexible on, and therefore to get your way in, say for a button, or kind of the larger ‑‑ where there's limited spots, it is fairly cost prohibitive.

2114 MR. THOMPSON: And I would just maybe highlight as a general point, something that's quite different about digital distribution. These are also advertising plays on VBDUs. In the traditional sense, distribution relationships we're focused on sharing subscriber revenue, but advertising revenue remained the purview of the broadcaster, the programming undertaking.

2115 But in these new relationships we're seeing the distributor playing in both, in both lanes, and it’s changed the monetization model for broadcasters, and it’s something we’re having to negotiate around.

2116 COMMISSIONER PAQUETTE: Okay. So let’s talk about the ‑‑ let’s jump into more regulatory measures that could apply in the online world. Considering the ‑‑

2117 MR. THOMPSON: Can’t wait.

2118 COMMISSIONER PAQUETTE: Can’t wait? I knew it.

2119 Considering the challenges and barriers that you just identified, do you think and undo preference rule that would apply to online services and VBDU would help reducing these barriers?

2120 MR. THOMPSON: Not only can it, Commissioner, it's imperative. It is a clear piece of authority that Parliament has given Commission with respect to online undertakings. And the under preference remedy exists primarily to address competitive imbalances in the market. And as we’ve discussed there are those in spades today, and we think that it will be increasingly the case in the future.

2121 So robust undue preference framework applicable both in the traditional space and online is a core part of our proposal to the Commission. With clear ex ante guidance about what would constitute undo preference in many cases.

2122 COMMISSIONER PAQUETTE: And how would you articulate an undue preference rule that would apply to the online services?

2123 MR. THOMPSON: Well, I think, you know, and Kevin is free to weigh in as well. I think what we had in mind is one test that would apply. This is a framework has criteria that we think are ‑‑ even in its existing form, that are easily applicable in both spheres.

2124 And again, what would count as an undue preference is ultimately a factual determination. So there may be unique facts that apply in the online space, about the criteria, the framework for an undue preference, we think it can be applied in both spaces.

2125 MR. GOLDSTEIN: Yeah, I think just to add to that, I think what we were thinking, and I think we elaborate on in our submission, is that the Commission would identify as kind of a non‑exhaustive list of examples as to what may be considered an undo preference, perhaps as, you know, expanded or reframed interpretation of the wholesale code.

2126 So the kind of activities that would be deemed to be offside so that at least players going into the situation kind of, know up front what they're dealing with. I think that's what Matt means in terms of an ex ante framework.

2127 I don't think that a scenario where there is an undo ‑‑ you know, the ability to file an undue preference complaint, but everything is decided on a fact specific basis after the fact while the undo preference is allowed to continue, is a particularly effective approach.

2128 MR. THOMPSON: And I'll take note that I'll resist the urge to answer any further questions in Latin going forward for the rest of this appearance.

2129 COMMISSIONER PAQUETTE: And I’m still a bit on the online side of the business. You mentioned that BDUs should have the obligation to distribute a fixed number of independent discretionary services. And I will come back to this idea, but what form could this obligation take in the virtual BDU and connected devices side of the business? Should it be similar? First of all, should it apply and should it be similar?

2130 MR. THOMPSON: We do have in mind that a fixed number of independent ‑‑ carriage of a fixed number of independent Canadian services is appropriate on online platforms. It will depend on the online platform. If the platform is not in ‑‑ is primarily in the on‑demand content distribution mode, you know a carriage of a number of ‑‑ a fixed number of linear feeds isn’t going to be appropriate for that platform.

2131 So we do recognize there are different even online distributors. But if an online distributor is in business of making linear channels available, fast channels with something akin to electronic programming guide, we do think it appropriate to include a certain number of Canadian services. Again, recognizing depending on the nature of the platform, that there may be a significant ‑‑ significantly more content on that platform then in a traditional BDU.

2132 So you know, we do want to be ‑‑ we do want to nod at the fact that there are circumstantial factors that should weigh in on what the requirements should be in particular cases. But we do think it's important as a general rule that online platforms should have some minimum requirements with respect to carriage of independent services.

2133 COMMISSIONER PAQUETTE: So the minimum requirements propose is in terms of number of channels? There are other jurisdictions in the world where ‑‑ which adopted some must carry obligation for the online distributors. Do you think a must carry obligation could work too? If so, which services should be included in a must carry obligation?

2134 MR. THOMPSON: We do think it can work. That is precisely the power that Parliament has given the Commission in section 9.1(1)(i) of the Broadcasting Act. We presume it’s there for a reason, and as we turn our minds to which particular services it would be appropriate to be subject to those carriage.

2135 I think for purely reasons of equity, I think whatever Commission requires traditional BDUs to carry, be it conventional, local conventional stations, or 9.1(1)(h) services call that that's in the future framework. We do think comparable obligations with respect to the similar services should apply on VBDUs.

2136 COMMISSIONER PAQUETTE: Okay. And you also suggest that connected devices should at minimum be required to carry local conventional television stations and 9.1(h) services. I was wondering, for conventional television, is it the access is a problem or more of the discoverability of content online?

2137 MR. THOMPSON: Again, I can maybe hand it off to Drew to speak to any specific experiences we've had this particular connected device platforms.

2138 And I guess maybe I should nuance the position a little. If a connected device has linear ‑‑ carries linear channels as part of their ‑‑ as part of their user interface, as part of their offering, then yes, and then we would equally suggest that there should be some minimum carriage requirements for Canadian and independent services.

2139 But to the question about discoverability, it's very important with respect to connected devices and anything that acts as an online undertaking, just given the sheer volume of content on these platforms. Being one service carrying ‑‑ being one service among thousands is almost akin to not be carried at all. It's absolutely important ‑‑ to carry out the objectives of the Act, which are considerable with respect to discoverability on online platforms to issue some minimum discoverability expectations, prominence expectations for connected devices that act as online undertakings.

2140 COMMISSIONER PAQUETTE: I guess I was interested in getting your point of view on this matter, because we had Bell at the beginning of the week, and Quebecor yesterday, and they ‑‑ we asked some question that the discoverability and what they could manage to get in terms of discoverability on the online platforms and it didn't seem to be a problem for them, for their conventional services. So I was very curious to have opinion on that matter.

2141 MR. ROBINSON: I think if I can just maybe add a little bit to what Matt said, I think the ‑‑ this is about fairness, it's about ensuring that we have equal access, equal chance to be discovered. And then as I was referencing before that, fragmentation of rights and ensuring that our content at least an option and presented amongst the thousands of channels on the platform. So that's all we're really looking for is that piece.

2142 COMMISSIONER PAQUETTE: So you suggest that the Commission should consider going further and mandating equitable prominence requirements as you just mentioned, for Canadian services. But there are more than 100 Canadian services that could ‑‑ that would like to have prominence on the online streamers. How do you think this should be managed between Canadian services?

2143 MR. THOMPSON: Again, I think a lot will depend on the circumstances of the individual platforms. I think one way of approaching it for the Commission would be to invite specific platforms to come forward with specific proposals that are workable for them depending on how they carry services and like.

2144 And you know, again for those who are not necessarily in the business of linear channel delivery, don't deliver a tonne of programming guides for example, you know, maybe prominent placement of Canadian applications, of voice recognition. Anything relating to the searchability I think are areas that we might be looking for some assistance.

2145 But you know, where there are electronic programming guides for example, where they offer linear services, I think channel placement is very important. It may not be all at the top, but it may be a matter of including Canadian services in appropriate channel neighbourhoods thematically on the EPG.

2146 But again, where we recognize that there are different models in the online space and there may be different ways achieving the discoverability goals in the Act.

2147 COMMISSIONER PAQUETTE: And maybe two questions before I jump to the section that I think you're waiting for. But can you tell us a bit more about the cost, the financial cost of being available online on all of the platforms? What does it represent for a company like Corus?

2148 MR. GOSSLING: So for Corus, because we're replicating a lot of what we do in linear space, there's not a lot of incremental cost to deliver the programming. There is some technical cost. But keep in mind, these are generally structured as revenue shares, so the cost to us is the fact that you know, the distribution platform is going to take pretty significant revenue share off the retail price. Which is fine, we accept that and that's what Drew and his team are negotiating.

2149 So it’s a different model in some ways than what we’re used to in the traditional space, but I think it's one that can work, it's just a matter of having enough volume to make it worthwhile.

2150 COMMISSIONER PAQUETTE: Okay. And with regard to discoverability do you ‑‑ are there any technological challenges that we should take into account, or not?

2151 MS. LEE: I think that’s ‑‑ not for us. So I think that that's not actually an argument that makes sense. The technology exists, we've all seen it.

2152 What working for is probably a comprehensive package that looks at, as Matt said, placement, searchability, searchability can come through voice, I'm sure you've all used that. It can come through search text. We have experiences where, you know, clear words don't link, or the search results don't result in what we think they should.

2153 So I don't think though that ‑‑ you know, I don't want to speak specifically for any one other company, but I think it's a pretty safe assumption to say that the technology that you're asking about exists and is quite readily available and usable. I think there needs to be the will to include our channels, Canadian channels, appropriately in all the many features that are already offered.

2154 COMMISSIONER PAQUETTE: Okay. And given that an important part of your business is radio audio, do you have any position or general comments on access, discoverability, effectiveness of the regulatory tool in this field?

2155 MR. THOMPSON: Our business on the audio side is still primarily direct to consumer through over the air transmission.

2156 COMMISSIONER PAQUETTE: Yeah.

2157 MR. THOMPSON: We, you know, maybe John can speak to some experiences we've had through audio distribution, exploratory discussions. But it isn't a primary concern to Corus, and that's why we didn't take many positions on it in our submission.

2158 COMMISSIONER PAQUETTE: Okay. Thank you.

2159 So now let’s discuss about the effectiveness of the existing regulatory tools. You suggest requiring all BDUs ‑‑ we talked about it a few minutes ago ‑‑ a minimum of 70 Canadian French and English independent services. Why do you think the traditional system should support more linear services given the migration of viewing toward online and on demand platforms?

2160 MR. THOMPSON: Maybe I'll just start off and if others have thoughts. I think just we ‑‑ of course there is a certain migration to online activity, but our fervent belief is that there will still be a place for linear viewing in the future ‑‑ in a future world.

2161 I think we’re ‑‑ what we’re ‑‑ the phase in now is the transition phase, right? We’re seeing different players embracing hybrid distribution, both through the traditional means and through online distribution. And the numbers bear this out, right? We still see two thirds of consumption of video content in Canada being done through the BDU system. We're still seeing upwards of 60 percent of Canadians subscribe to BDUs.

2162 Of course, there are declines. We’re all aware of them, we factor them into our business. So we don’t as a general principle believe that turning away from regulating in the traditional sphere is a good idea. We are concerned that that would throw off what we hope is an orderly transition to a hybrid world where Canadian players, and all players indeed, because we're all serving Canadians, can compete in both spaces.

2163 COMMISSIONER PAQUETTE: And what would you respond to the BDUs, including the small independent undertakings that are asking for regulatory relief in order to make their business model evolve and adapt to the changing environments?

2164 MR. GOSSLING: I guess to Matt's point, you know, the BDU ecosystem is under pressure, for sure, especially on the video side. I understand that. The place that's under the most pressure is in our business. So our segment profit is down 60 percent since before COVID. I don’t see that in any of the reported results for any of the BDUs.

2165 So I understand they have other products, we're trying to have other products. But you know, to say that, you know, the business model is not working, I don't think that's a correct statement for a BDU. I think we could actually make that statement, because it's very clear when you read our quarterly reports.

2166 So I think we just challenge that whole notion that there's some major problem here that the BDUs need to be able to fix and have their hands untied from regulation.

2167 MS. LEE: Yes, and I mean, I think it was just publicized yesterday, another BDU has applied for licenses for several new linear channels, and we see those going all the time. I think ‑‑ going on for some time. So I think what Matt and John are saying, and what we want to reinforce is that we understand, I think what you're starting with, Commissioner, is that there is a decline.

2168 I have kids in my household, we all know how we consume. But decline doesn't mean that it's gone, and it also doesn't mean that when we come to regulations and how we look at and how we operate as an industry, that we abandon industry in transition.

2169 You know, I think if you look at just about anything, this is the time when it's most imperative that you have rules, when things are transforming, and there's a lot of new entrants, and when we don't really know the market itself, no matter what people say, do not know what's going to happen.

2170 So you'll see a lot of our positions, we're trying to be quite realistic. We understand what we're looking at, you know, in terms of consumer choice. But what we are asking for is just a better and more fair playing ground as we all enter the transition.

2171 And I think that the other thing that, you know, you mentioned smaller BDUs, a lot of our proposals are also so that all the players can have a fair chance. So I meant a lot of what I said in my statement, was this is not just about one company, one result, one BDU. We really don't enjoy being acrimonious, or any acrimonious negotiations with what are ultimately our clients. What we'd love to see is a healthier and more functioning Canadian ecosystem.

2172 So it should of course have smaller BDU and for opportunities. But I think what John said is absolutely true, we do believe and feel that programmers like ours are really disproportionately disadvantaged right now for a number of reasons that you know, I cede the floor back to your questions, but that are in our submissions.

2173 MR. THOMPSON: if I could just add maybe a general point, Ann just maybe returned to the question of the 70 independent channels, which I think is where you began Commissioner Paquette. Just on the general side, and we've heard this come up in the first two days of proceeding, I don't think a race to the bottom approach to regulation is the way we want to go, just because BDU ‑‑ VBDUs may have a different set of regulations than BDU, or that doesn't mean we should lower the bar for everyone.

2174 I think it means a level playing field for distributors, traditional and online. And there are inequities, absolutely in the distribution space today. So the Commission has robust authority in the Act, and a clear mandate by way in Section 3 of the Act, to ensure that there are reasonable terms of carriage and packaging on virtual distributors as well. The Commission should use those powers that they've been given to enact fair regulations for virtual distributors.

2175 Now, returning to the question of the 70 services, I should just maybe add a bit of nuance. The reason that the 70 services ‑‑ the independent service proposal is designed to replace the current linkage rule, to one to one, VI to independently control, which as the Commission has recognized, it doesn't necessarily work anymore given the change in Corus’ status from vertically integrated to independent. The math doesn't quite work.

2176 So we're proposing something to replace it, and we think that number is fair building off of the number that the Commission came up with in the Rogers Shaw proceeding at 45. And again, in recognition that ‑‑ and this came up in our opening remarks ‑‑ that there is a new objective in the Broadcasting Act that prioritizes a vital role for independent broadcasting undertakings going forward that was not in the Act before and we think it’s there for a reason. And the word vital is a very important ‑‑ it's very important in that clause.

2177 COMMISSIONER PAQUETTE: Okay. You talked about fairness. It’s a good segue to discuss about the wholesale code. Could you share your views on the strengths and weaknesses of the wholesale code, especially considering your position as the biggest independent player? We would appreciate your views.

2178 MR. THOMPSON: Well, I think the code was well‑intentioned. I think it was part of a suite of reforms that came out of Let’s Talk TV and the earlier guidelines that proceeded it. But primarily it was geared towards promoting consumer choice. That was one of the defining themes that came out of the 2015 structural policies.

2179 So that is, you know, we acknowledge that that remains an important objective. Our concern with the code is that it doesn't quite do enough to promote the other core objectives that came out of Let’s Talk TV, including stable and predictable revenues for programming services that allow them to continue to invest in programming, including Canadian programming.

2180 The overall practical impact of the wholesale code, in our experience, has been to give distributors, BDUs, incredible amount discretion over how they package channels primarily. And packaging is ‑‑ I would highlight as a primary concern for us, or a primary challenge for us. Because how a channel is packaged in the BDU environment is ‑‑ will determine how much revenue that Channel can generate. It is crucial. And the code, it gives BDUs a significant amount of power over those decisions.

2181 In addition, we're ‑‑ the code doesn't necessarily give programmers the opportunity to come up with different commercial rate structures that would allow them to mitigate the risk of some consumer choice. There are prohibitions on certain types of rate cards, it casts suspicion on other types of rate card. So it makes it harder to negotiate deals that allow us to mitigate some of the risk of BDU packaging decisions which happen all the time.

2182 And another core issue that we have with the code in its current form is, amongst the fair market value factors that guide a final offer arbitration and should guide negotiations between the parties, there is a glaring omission, which is programming costs. The amount that we invest in programming in a service is core to its value proposition, to our mind. And it’s not part of the conversation, the regulated conversation, that is, when it comes to the fair market value of a channel.

2183 So, that’s another thing we would recommend.

2184 And there are some other issues. The Code does make some effort around redressing some competitive imbalance with respect to packaging between vertically integrated and independent programmers, but there are some gaps there. A couple of the provisions only prioritize equity in fee packs, for example. But we know that packaging models have shifted away from just the packs. We see different packaging constructs.

2185 The amendments that we have suggested to the Code address some of those gaps. But as an overall position, we are not in favour of throwing the Code out completely, casting it aside. While there are some gaps and some weaknesses, we suggest closing them, strengthening it, making it more equitable. We are trying to build on measures that the Commission has in place that would better promote equity in the system and what we think are some of the core objectives in the Act.

2186 COMMISSIONER PAQUETTE: I would like to hear you more on alternative dispute resolution process. You stated that staff assisted mediation currently provides insufficient incentives to engage in good faith negotiations.

2187 Can we hear you more on this?

2188 MR. THOMPSON: Certainly. I think I would start by acknowledging the good faith efforts of CRTC staff, particularly in this area where the job is often quite thankless. These people, they work hard, they have integrity, and they are genuinely interested in helping parties find resolution. So, we appreciate their efforts in this area.

2189 In our experience, it’s not working. It’s not producing optimal results. It’s not leading often enough to resolution of disputes, to new carriage agreements. And I think the core issues that we’re having, or we’ve had with mediation over the years, is there isn’t a strong enough incentive in the room to negotiate in good faith, to actually come to a new agreement. Our experience is that the parties often talk past one another. This isn’t necessarily constructive engagement.

2190 When we received these questions, we thought about why is that? That’s the problem. But when we get underneath it and we start thinking about what’s contributed to that dynamic, some of the issues are really quite small like moving mediation completely into a virtual format. Before the pandemic, we all had to come here, and for some folks who aren’t based in Ottawa, decamped onto the seventh floor of the Commission offices for two days in January is a bit of a deterrent. It has a way of disciplining you and focusing you on the task at hand.

2191 So even a cosmetic change, like bringing mediation back in person, we think could make a difference.

2192 I think more it’s a change of approach that we’re recommending. I think the mediators would benefit from having a clear mandate from the Commission to be active participants in these negotiations, not to be merely passive or mere facilitators, but to actually push the parties on their proposals, to call them out on things that don’t make sense.

2193 We are biased. We’ve tried over the years to negotiate in good faith in those settings. We are absolutely open to receiving constructive feedback, to being pushed back upon by the mediators. We think that would be beneficial.

2194 Another form that we are suggesting on the mediation side is a limited mediation window, a 90‑day mediation period. I think these processes can roll on for too long. I don’t think that’s in anybody’s interest. We’re not interested in dragging things out. So the fact of having a limited mediation period, we think would create some urgency on the part of the parties to come to the table in good faith. And that’s part of why we recommended it.

2195 COMMISSIONER PAQUETTE: Thank you. I will have to stop to leave some time for my colleagues, but maybe one last question on the standstill rule.

2196 I was wondering how could we adapt the existing standstill rule to the new market dynamic? That would be the first part of my question.

2197 And the second part. How could the Commission prevent BDUs from using the threat of ceasing distribution as a negotiation tactic, but at the same time balancing this with the reality that BDUs may have the right to no longer distribute a service?

2198 MR. THOMPSON: Our proposal is to maintain the standstill rule, and we are even open to maintaining the analytical criteria the Commission uses now to determine whether to lift it. Those are on the part of the applicant. You have fair commercial negotiations taking place and are there valid commercial reasons for doing so?

2199 What we’ve recommended is to elaborate further on what those criteria mean. As it stands in the current interpretation bulletin, those criteria are very open. In our experience as a respondent in some of those applications over the years is that it’s a pretty low bar. To establish fair negotiations, very often all an applicant would have to do is demonstrate that they have attended one mediation session which, as I discussed before, isn’t always the most productive conversation. That’s a pretty low threshold to meet.

2200 And then on valid commercial reasons, very often on the BDU side, which are most frequently the applicants in this scenario, pointing to limited viewership data at a limited point in time is what we’ll see as considered sufficient to grant a lift. And viewership is often a function of packaging and marketing, which BDUs control in most cases.

2201 So taken at face value, that can often lead to conclusions that we don’t think are correct.

2202 So what we are suggesting is that the Commission dig a little bit deeper on both of those criteria. So when considering the performance of the service over time, consider how it’s been packaged. When considering whether there are valid commercial reasons for request to remove, consider the commercial agreement. Are there mitigants in the commercial agreement for channel performance that the BDU might be able to realize?

2203 I think the reality of termination requests for programmers is that loss of carriage can be very, very harmful, more harmful in fact for the programmer, to our mind, than the continued carriage in the case of BDUs.

2204 So I think the Commission should respond to requests to remove with a healthy dose of skepticism and recognition that this is a tactic in many cases. It’s not necessarily genuine that a BDU doesn’t want to continue to carry a service. It is a tactic in negotiations, and that it doesn’t necessarily serve consumer choice.

2205 We shake our heads at the idea that removing a channel or giving consumers less options can promote consumer choice. How does it promote consumer choice to have fewer choices?

2206 So, I think that all calls again for a healthier dose of skepticism when the Commission receives these requests. But, of course, we recognize that there are circumstances where it is legitimate for distributors to no longer want to carry a service.

2207 And listen, there are circumstances where we don’t want to continue offering a service. We are not in the business of maintaining under‑performing channels. Corus, when it acquired Shaw Media, began with 45 discretionary services, and now we are down to 30. We do look closely at how these channels perform over time. We examine various factors. We are not interested in guarantees. We are not interested in enforcing carriage. We’re looking for fairness. We’re looking for an equitable set of rules, and our proposals are designed to promote those objectives.

2208 MS. LEE: Just to add to that, Matt, just to maybe wrap it up for our view for you, Commissioners, it’s a comprehensive ‑‑ what we’ve tried to propose is something that works together. So everything that Matt talks about, though, it’s mirrored with some of our proposals –‑ thank you for considering them on time limitations ‑‑ essentially giving teeth to the overall process. So in various points of dispute, in mediation, in undue preference, like as part of that whole set of rules, we’re not just advocating, you know, this in our favour or this go longer. We are thinking of efficiency, and we want to work in a system that has, like I said, more teeth, more emphasis and more motivation for all the parties, including Corus and programmers, to get to a solution. We think that that’s better for viewers. It’s better for the system.

2209 And the last point, just to reiterate on the standstill side, it can just be very circular. Like the reason it’s so important is that the very reasons that can be offered to lift the standstill rules are actually the very reasons that we are having issues and we need time to resolve. So if someone says hey, we’re dropping this channel for low viewership and our very complaint or very issue that we’re trying to negotiate is packaging to get viewership up, it’s just important that we have a meaningful time and ability to actually sort that out and negotiate it.

2210 So I think, just again, we want all these rules to work together so that’s it’s more effective overall.

2211 So when considering, I would just ask everyone, you know not all our positions are meant to be taken together, and we’re not trying to just advocate on one side or the other for a particular item.

2212 MR. GOSSLING: Just a final point to wrap this up. I think, to be clear, Corus is not looking for perpetual carriage of our channels. That’s not what we think these rules are meant to do for us. I think we’ve been very proactive in taking channels down. Matt mentioned the decline in the number of channels that we’ve had since 2016, and we will continue to do so. So, we recognize that some of these channels are not going to be profitable for the BDUs. They are not going to be profitable for us. Yes, there are many factors that drive that.

2213 But for the most part, I think we’re trying to address some of the concerns here. And we are not looking just to keep all of our channels up forever.

2214 COMMISSIONER PAQUETTE: Thank you very much. No more questions.

2215 THE CHAIRPERSON: Thank you so much.

2216 Thank you, Commissioner Paquette, thank you to everyone. I will turn things over to Vice‑Chair Scott, please.

2217 VICE‑CHAIRPERSON SCOTT: Thanks very much. I would like to zoom out a little bit because you describe what we are currently facing as a transitional phase. Others have described it as an existential crisis. And I think a lot actually hinges on which of those two world views we take.

2218 So I would be interested in hearing your thoughts on the proposition that there is a risk that while Canadian BDUs and programmers bicker, the large online streamers with global reach and scale are just going to come in and steal everybody’s lunch.

2219 In other words, are we facing in the wrong direction or spending too much emphasis on old world versus new world?

2220 MR. GOSSLING: I don't think so. For sure the online undertakings have come in. If I look at our business, they have taken our viewers, they have taken our subscribers, and they’ve taken our advertising dollars. So if there is a crisis, yes, we are feeling a crisis, of course, right now. Just the decline in our business that I mentioned is a crisis.

2221 I don’t see that crisis on the BDU side. In fact, I think they are doing quite well, if you look at their numbers.

2222 So, are we looking in the wrong place? No, because I think the BDUs are still a big part of this ecosystem, and they are still very important to the overall picture. As Matt has mentioned, there is still a ton of viewing. More than half of viewing still happens through these traditional platforms. We need to continue to look and modernize what we’re doing on this side, but not abandon it, because it’s still a very important part of the picture.

2223 And yes, we need to figure out how the international and the virtual distributors are going to play in this system too, including some domestic ones. We’ve seen products being launched that basically exclude a lot of Canadian products. So, I don’t think that’s a smart way forward, given what we’re facing. But certainly, I think we need to focus on both, because there’s the new and then there’s the existing that is still an important part of the system.

2224 MR. THOMPSON: Just to reiterate a point we made earlier, Vice‑Chair, the Commission has powers to regulate the online environment. That was the core purpose of the Online Streaming Act. There are meaningful jurisdiction conferring provisions in the Act that allow you to do more in that space, and some very clear policy mandates in section 3.

2225 So again, I don’t think it’s necessarily a matter of one or the other future paths, Vice‑Chair. I think it’s a matter of establishing an equitable set of rules that should apply in both.

2226 VICE‑CHAIRPERSON SCOTT: Maybe then just recast it as how far into the future? Is the regulatory framework that’s going to carry us through the transition likely to be the same regulatory framework that’s going to work in a post‑transition world, or are we going to be back in five years, as BDUs continue to shed 5 percent of their subscriber base every year? What’s the likelihood that a framework designed for transition is going to stand the test of time?

2227 MS. LEE: I will make a general comment. I think that there’s two things: (a) we probably just don’t know, and that’s probably ‑‑ I’m answering the question in a roundabout way.

2228 I think we’re advocating for rules that will allow that flexibility to get through the transition in a way that we don’t have to know right now. A lot of what we’re trying to advocate, at least for our side, is the ability for that flexibility to adapt to the new world to be able to compete.

2229 So, I don’t think that necessarily means in five years you come back because it’s tied to X percentage of viewers. We are asking for things that will make sense so that commercial parties can make their own decisions and make good decisions that will help sustain themselves. I think right now we feel, especially on the independent side, on the programmer side, it’s like a stranglehold, so that you’re not actually making decisions based on a fair and equitable way. It’s not as natural as it would be without a better set of rules.

2230 We are not asking for things that are so prescriptive, I think, that would preclude any of the potential outcomes that you are thinking about.

2231 And just for your earlier comment, Commissioner Scott, I agree wholeheartedly with Matt. It’s not really binary to us. I think the crisis is for, you know, maybe a larger sociological comment, technological comment.

2232 But again here, I think that if people do believe that are getting their lunch eaten ‑‑ and I probably would say that ‑‑ and there’s large dominant multinational corporations out there, it makes it more important that the Canadian system is healthy and functioning.

2233 So again, we don’t have to prescribe necessarily exactly how that will look, but I think as we get there and as we look at it, we should have rules that allow us to work that out and make deals and progress and investments in new products and things that can be competitive in our own ecosystem and with, you know, the large foreign players that you are talking about.

2234 MR. ROBINSON: If I could also just clarify, what we see in terms of the decline, it’s not 5 percent. We are seeing 3 percent. It actually seems to be stabilizing in recent years. So I think the 5 percent decline in Pay TV or BDU ecosystem is exaggerated.

2235 MR. THOMPSON: Again ‑‑ and we have referred to this before ‑‑ BDUs are largely integrated offerings with home internet services. These are services that are using the same technology. They are often combined in retail packages. So, it isn’t necessarily indicative of the health of the BDU business to look at it in isolation. You would have seen our research note prepared by Steve Armstrong in our submission. I think it’s important to look holistically at BDUs to gauge what the health of that business is.

2236 MR. ROBINSON: Sorry, I hate to add, to pile on here, but it is also noticeable that a lot of the BDUs are now expanding out of their footprint and actually growing that business across Canada. So the same BDUs who are saying that it’s declining at a rapid rate and they are terrified that this business is going to zero seem to be investing in expanding it across the country.

2237 MR. GOLDSTEIN: Unfortunately, this seems like a pile‑on, but one other comment, I guess it was at the beginning of your question in terms of the growth of the foreign VBDU platforms, I think what we’re also seeing, and going to see more of in the coming months and years, is the Canadian BDUs venturing into that VBDU ecosystem more.

2238 As Matt indicated, you have an integrated operation that involves both your BDU and internet access services. By offering that BDU platform, it’s a way to help retain that internet customer and not allow the customer to disintermediate you.

2239 So I think that what we need is fair rules that apply across both BDUs and VBDUs such that as the Canadian VBDUs launch, they are in a competitive position but are essentially treated in a similar equitable manner to what the traditional system offers.

2240 VICE‑CHAIRPERSON SCOTT: I wasn't going to have a follow up but Kevin, Mr. Goldstein, you have raised something at the end.

2241 Are Canadian companies big enough to be able to compete against online streamers with a global scale and global reach?

2242 MR. GOLDSTEIN: Yes.

2243 VICE‑CHAIRPERSON SCOTT: Thank you. Thank you, Madam Chair.

2244 THE CHAIRPERSON: Thank you very much, Vice‑Chair Scott.

2245 I will turn to Commissioner Abramson for the last questions.

2246 COMMISSIONER ABRAMSON: Thank you. This will be a bit of a lightning round, I’m afraid. So if you can keep your answers crisp, I’m sure the next intervenor but also my fellow Commissioners will appreciate it.

2247 Let me start with return path data, which is something that we’ve talked a little bit about. We haven’t pressed intervenors until now too closely on, but independents have said there is a problem here ‑‑ programmers, rather ‑‑ and then BDUs and vertically integrated players have tended to say well, we had a working group, we had an arrangement at Numeris. We have a deal. What’s the problem?

2248 So, what’s the problem?

2249 MS. CHAN: Thanks for that question.

2250 I think to levels that it’s been mentioned before, but there was always kind of a bright line between broadcasters owning the advertising space, BDUs owning the subscriber space, and that partnership worked for a long time. That model doesn’t exist anymore, as we know. Our BDU partners are engaged in launching VBDUs. They have direct access to their customer relationships. They have broad access to multiple datapoints to really understand their viewers and their customers, and even more so for online undertakings.

2251 So, we see a lot of themes come up in our submissions around gatekeeping and around reliance on our distribution partners.

2252 COMMISSIONER ABRAMSON: Sorry to interrupt, but because this is a lightning round, what’s not good enough about ETAM?

2253 MS. CHAN: Okay, I’ll be fast.

2254 So ETAM gives us high‑level data. It helps us understand geography and share, but it doesn’t connect household data. So that’s where return path data comes in. In order to build the kind of identity graph or understanding of our subscribers, you need the household data to build the kind of advance advertising solutions that we need to compete in this environment.

2255 COMMISSIONER ABRAMSON: You're asking us not to go through another round of working group and Numeris negotiation but simply to almost rule from the bench, as it were. Correct?

2256 MS. CHAN: I mean, what we are asking is the ability to sustain our advertising business. Right now we can’t invest in these advertising solutions without some guaranteed access to this data, and we rely on those distribution partners for that data.

2257 COMMISSIONER ABRAMSON: How onerous do you think it would be for BDUs if we said yeah, you guys are right, let’s do it?

2258 MS. CHAN: Well, we have evidence where we have partnered with BDUs in the past. We know it’s possible. Again, we’re not asking for them to give this data up for free. We’re willing to negotiate reasonable commercial terms, but we want some rules in place to guarantee some access.

2259 COMMISSIONER ABRAMSON: Thank you. I think that will help advance our conversation on this topic.

2260 Next is discoverability and prominence. First, to the extent we have a route to sail on discoverability, do you ‑‑ and I’ve been sort of testing the idea that our first port of call ought to be around commercial arrangements for preferred placement.

2261 Should we start there?

2262 MR. THOMPSON: Are we are talking about online platforms, Commissioner, or are we talking about ‑‑

2263 COMMISSIONER ABRAMSON: Yes, I suppose I have online platforms in mind.

2264 MR. THOMPSON: On the brain. I think placement counts for a lot, particularly on a landing page, where the first thing that a viewer sees is often indicative of what they will look to first. And, of course, we all have limited time to interact with content, so the less searching required, the more likely it is you will interact with that content.

2265 But, of course, there are other discoverability measures that are important.

2266 COMMISSIONER ABRAMSON: You have proposed revisions to the Commercial Wholesale Code in an appendix to your intervention. The IBG has proposed a set of discoverability and prominence principles. I may not have their title right, but it’s something along those lines.

2267 Do those work together, and do you support IBG’s principles?

2268 MR. THOMPSON: I actually have them here, so I was just refreshing my memory.

2269 I think there is some common ground there. Those proposals are in the same neighbourhood with what we have in mind.

2270 Our revisions to the Code are primarily our proposals on discoverability as it relates to BDUs. I think the Code already does address discoverability to an extent through packaging and marketing provisions, and we proposed some tweaks there to strengthen it in this area.

2271 With respect to VBDUs, again to the earlier conversation I had with Commissioner Paquette, it may not be workable to have a one size fits all approach to discoverability with VBDUs, depending on the nature of the undertaking. We think perhaps a better approach might be to invite them to make proposals on how they would promote the discoverability goals of the Act that are appropriate for their services.

2272 I think the IBG proposals, the principles outlined in the IBG proposals are ones that could help guide the type of arrangements, the individualized arrangements that might make sense.

2273 COMMISSIONER ABRAMSON: Thanks. As you know, our job is to at the end of the day come up with concrete solutions. So anything that you direct us towards that’s a concrete proposal will certainly help advance us in our thinking. And we are of course, and I’m sure the other guys are always happy to be looked to, for those proposals.

2274 Last question, a bit of a curve ball.

2275 We haven’t spent much time talking about over‑the‑air broadcasting. In some ways, over‑the‑air broadcasting remains the linchpin of our system because you, Corus, are a significant operator of antennas, therefore you are on basic, therefor you have to do news, therefore etc. And that’s more on the former Global side of your business, obviously.

2276 Should we be asking more questions about what to do about OTA and how that part of the system fits in? Should we have thought more carefully about free view style systems? Where does that fit into the mental map that we’re trying to paint of how to move our regulatory framework forward?

2277 MR. GOSSLING: Well, I think there are several parallel processes going on right now at the Commission that are trying to deal with those issues around news, around levels of Canadian span. So yes, clearly Global is an important part of the system. Clearly, Global is financially very stressed. Some of that comes from the Canadian obligation that it’s bearing, and that’s bearing on a group basis.

2278 So it’s taking more than just its 30 percent share right now.

2279 But yeah, I think we need to talk about what it means. You know, is over‑the‑air still that relevant from the traditional transmission sense? Operating transmitters is very expensive and isn’t always a good place to invest your money.

2280 So, I think there is something that we need to do there. I don’t know that it needs to derail this process, though.

2281 COMMISSIONER ABRAMSON: Thank you. Those are my questions, Madam Chair.

2282 THE CHAIRPERSON: Thank you very much, Commissioner Abramson.

2283 Thank you to all of you for your generous answers to our generous questions. We look forward to seeing you again.

2284 Thank you. Have a great day.

2285 MS. LEE: Thank you. Have a good day.

2286 THE CHAIRPERSON: Madam Secretary?

2287 THE SECRETARY: Thank you. We will take a break and resume at 10:25.

‑‑‑ Suspension à 10 h 14

‑‑‑ Reprise à 10 h 26

2288 THE SECRETARY: We will now hear the presentation of Rogers Communications Canada Inc.

2289 Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

2290 MR. SHAIKH: Thank you.

2291 Good morning, Vice‑Chair Théberge, Commissioner Abramson, Commissioner Levy, Vice‑Chair Scott, and Commissioner Paquette.

2292 My name is Dean Shaikh. I am the Senior Vice President, Regulatory Affairs, at Rogers Communications and with me today are, to my right: Colette Watson, President, Rogers Media Inc; Susan Wheeler, Vice‑President, Regulatory, Broadcasting; Cynthia Wallace, Managing Counsel, Regulatory; and Peter Kovacs, Director, Regulatory. To my left are: Bret Leech, President, Residential Services; and Jason Fortino, Vice‑President, Entertainment and Product Management.

2293 We are pleased to appear before you today.

2294 Brett?

2295 MR. LEECH: Thank you, Dean.

2296 Good morning. For 65 years, Rogers has been a proud Canadian company, a network builder, and a foundational contributor to the Canadian broadcasting system. Throughout this time, we have connected Canadians through our nationwide networks, delivering programming that has shaped our national identity while making generational investments that are supporting our country’s economic growth and prosperity.

2297 Since the Commission’s last structural review in 2014, our investments include: our transformational acquisition of Shaw Communications; our partnerships with global technology and content leaders, including Comcast, NBCU, and Warner Brothers Discovery; the renewal of our agreement with the NHL to make hockey available for all Canadians on their chosen platform through 2038; and nearly 40 billion in capital expenditures building our national, converged wireline and wireless networks.

2298 Content requires connectivity, and each year Rogers invests billions of dollars to ensure Canadians can access the programming they want, when they want it, on the device of their choice. In just the past year, we have added thousands of hours of premium Canadian and US content to customers’ existing TV packages, while enhancing its discoverability through our award‑winning and accessible voice remotes.

2299 We are investing billions of dollars and taking extraordinary risks to serve Canadians in an intensely competitive environment now dominated by American streaming giants. However, while those American streamers operate without regulatory restrictions, Canadian BDUs face layers of outdated access requirements and multi‑year standstills. These rules force us to carry and package programming in ways that serve outdated business models rather than our customers’ preferences. Meanwhile, our global competitors enjoy total freedom to innovate.

2300 The regulatory asymmetry is not just unfair; it is driving Canadian consumers directly into the arms of foreign platforms. Last year alone, Rogers lost over 200,000 BDU subscribers. Over the past decade, Canadian BDUs suffered losses of over 2.5 million subscribers and traditional linear TV viewership decreased by 41 percent, while viewership of online content has exploded by 600 percent. These declines within the traditional system have resulted in the loss of Canadian jobs and shuttered newsrooms ‑‑ and it has put our cultural sovereignty at risk.

2301 Rogers deeply values Canadian programming and its contribution to our national fabric. But we must be clear: imposing additional obligations risks breaking a system already under extreme pressure.

2302 We urgently need a modernized framework that dramatically reduces regulation on Canadian BDUs; levels the playing field with foreign streamers; and relies on market forces to achieve broadcasting policy objectives, whenever possible.

2303 Rogers has made comprehensive proposals in three critical areas to achieve a sustainable and competitive Canadian broadcasting system.

2304 MR. SHAIKH: Thanks, Brett.

2305 First, as we said at the CanCon hearing, Rogers supports a revised contribution requirement of no more than 5 percent of Canadian ownership groups’ total traditional broadcasting revenues. It has been widely acknowledged in this proceeding that BDUs’ carriage of Canadian programming services represents an enormous contribution to the Act’s objectives. The value of that carriage must be recognized by including the cost of 9.1(1)(h) wholesale fees in the 5 percent contribution and by providing ownership groups with the flexibility to direct their financial contributions to truly at‑risk programming, like local news.

2306 Second, BDUs should only be subject to two major access rules: the preponderance rule; and a basic service requirement that includes 9.1(1)(h) services and over‑the‑air channels. In a competitive environment, consumer demand compels BDUs to carry a rich variety of Canadian programming services ‑‑ affiliated, unaffiliated, and independent.

2307 Maintaining these two core access rules achieves what the complex array of obligations, accumulated over decades, is no longer delivering. They ensure Canadian programming services, both VI and independent, maintain a pride of place on BDU platforms, and they provide broad access to important news and public interest services ‑‑ without artificially sustaining underperforming services or preventing BDUs from responding to our customers’ needs.

2308 The modernized framework must embrace a fundamental reality: Canadians have unprecedented choice in content and delivery options, and through their choices, they will ultimately determine which programming services and distribution platforms succeed ‑‑ whether Canadian or foreign. A regulatory framework that fails to create competitive parity will only drive consumers to foreign alternatives, undermining the entire Canadian‑owned system and the achievement of the Act’s foundational policy objectives.

2309 MS. WHEELER: Third, the Commission must adopt a modernized ADR framework that significantly narrows the scope of its involvement in commercial disputes and promotes timely, efficient, and market‑based outcomes. This can be achieved by: adopting a combined mediator‑arbitrator model that operates with strict timelines and enforces procedural discipline; requiring disputes between large ownership groups to use third‑party mediation/arbitration services; transitioning disputes automatically to Final Offer Arbitration if they have not been resolved within a 30‑day mediation period; expanding FOA to apply to groups of services; and updating the Fair Market Value factors to focus solely on commercial determinants of value, including viewership and programming investments.

2310 Given that the Commission’s authority over dispute resolution does not apply to online undertakings, it must ensure that all uses of its ADR powers under the modernized framework are competitively neutral and do not undermine Canadian ownership groups’ ability to compete with their global competitors.

2311 As the Commission has recognized, the standstill rule is being used as a tactic to delay negotiations and secure de facto access rights. Currently, Rogers is subject to multiple standstills that have frozen carriage and packaging, at expired and highly inflated rates for as long as two years. The standstill was never intended to apply in this manner. It is not serving the interests of our customers nor the objectives of the dispute resolution framework, and is a major source of regulatory asymmetry between BDUs and online undertakings.

2312 The Commission must adopt strict safeguards to prevent the standstill rule’s abuse and limit its applicability in a manner that respects contractual agreements. The standstill rule should only apply to disputes where both parties have agreed to continued carriage and be limited to a 90‑day period that is solely for FOA.

2313 The standstill rule should not be triggered by undue preference complaints. These ADR tools should not apply to commercial matters like BDUs’ packaging and channel realignment decisions, particularly when parties have contractual agreements in place that permit these changes. Furthermore, the undue preference regime should not be used to secure access rights at non‑commercial rates or to prevent BDUs from responding to the demands of their customers.

2314 Finally, the undue preference rules must be reformed by eliminating the reverse onus ‑‑ which is procedurally unfair ‑‑ and applying a much higher standard for what is considered “undue”. The mere fact that a programming service has experienced differential treatment does not justify Commission intervention.

2315 MS. WATSON: A healthy and dynamic programming and distribution market cannot be sustained with the current level of Commission involvement in commercial relationships.

2316 Many Canadian programmers have willingly embraced new innovative economic arrangements with foreign platforms, yet refuse to do the same with BDUs due to regulatory protectionism. This needs to change.

2317 The modernized ADR rules must: (a) respect commercial relationships; (b) encourage negotiations based on the value of the content and the distribution opportunity being offered; and (c) support, rather than impede, innovation and dynamic competition in Canada’s broadcasting industry.

2318 The Canadian broadcasting system has reached a critical inflection point. Canadian BDUs are now serving less than half of all Canadian households. Canadian ownership groups cannot survive another decade of disproportionate regulation.

2319 The answer to these market dynamics is not more regulation. The regulatory tools that once protected Canadian companies are now the source of our competitive destruction. Either we embrace bold reforms, or watch outdated regulations cede our broadcasting system to American streaming giants.

2320 Canadians deserve access to the best content, cutting‑edge technology, competitive prices, and seamless experiences across all platforms. Today, Rogers is delivering all of this ‑‑ and we want to do even more. But we need the opportunity to invest and compete on a level playing field. This requires a new bargain, one that significantly reduces our regulatory burden, promotes equitable competition, and supports the unique contributions that only Canadian companies can make to the system.

2321 Rogers is energized by what is possible and committed to working with you to build a broadcasting system that is distinctly Canadian, globally competitive, and designed to serve Canadians for generations to come.

2322 Madame la Présidente, nous sommes prêts à prendre vos questions.

2323 THE CHAIRPERSON: Merci beaucoup, Madame Watson. Thank you to everyone. I think you almost needed a bigger table.

‑‑‑ Rires

2324 THE CHAIRPERSON: I am going to start with two broad questions, and zoom out, to quote my colleague, Vice‑Chair Scott.

2325 So, your message in both your submission and presentation this morning, as I understand it, is quite clear: deregulation is the solution to the crisis our broadcasting system is facing today. But in my mind, deregulation ‑‑ or regulation ‑‑ they are tools. They’re a means to an end, not an end in themselves. So, what is the end behind the crisis ‑‑ or beyond the crisis? I am interested in hearing your vision of the Canadian broadcasting system in the future, beyond the crisis. That would be my first question.

2326 MR. SHAIKH: I will start with clarifying our position on so‑called deregulation, and then I’m sure you’re anxious to hear from our business people on their actual vision for the future.

2327 We haven’t suggested full deregulation; we’ve actually suggested proportionate regulation. We think with a simple preponderance rule and a basic access requirement for the basic service, requiring the carriage of local over‑the‑air stations, combined with the market forces that compel us to carry a rich variety of programming services, is going to guarantee a desire on our part to carry a rich variety of services including independent services. So, it’s actually a flexible framework.

2328 In terms of the vision, I will turn first to Brett.

2329 THE CHAIRPERSON: But it is a little bit tomato, tomato; right? I mean, if you ‑‑ more flexible ‑‑ the end result of more flexible regulation in effect is a slightly more or less deregulated framework. Right?

2330 MR. SHAIKH: There is no question that our position is with less regulation ‑‑ a lighter hand, greater flexibility.

2331 We’re very optimistic about the future of the Canadian broadcasting system, and Brett will share some of that optimism.

2332 THE CHAIRPERSON: Thank you.

2333 MR. LEECH: Yes, thanks for the opportunity to do that. You know, if you look ahead beyond the situation that we’re in right now, and we talk about what we’d like to see in the future, we very much want to have Canadians as the destination for Canadians looking for content. We think that there’s a great opportunity for Canadians to choose BDUs for the most and best content, and to find that in an accessible and easily aggregated way that would actually merge linear and a variety of serial and OTT programming together.

2334 And there’s a great opportunity for us to compete. Part of the messaging that I’m hoping to share with everybody today, with permission, is just looking for a level playing field against the American streamers.

2335 THE CHAIRPERSON: I am just going to ask you to zoom out even more, because I’m interested in understanding your vision of the broadcasting system as a whole, not just the role played by BDUs. What do you see? What should we be aiming at, as a regulator, to have something that is ‑‑ I hate using the concept of future‑proofing, but that is equipped to handle the opportunities and the challenges of the future? What does that look like?

2336 MR. LEECH: So, in the framework of both providers as well as those that help distribute it, we’d be looking for an environment that’s sufficiently flexible to allow us to respond to Canadian customer needs and the shifting dynamics as they happen in real time. As we all know from our own consumption patterns, and that of our families and friends, things change quickly now, and we would like to have an environment where we can operate so that we can bring the very best to Canadians.

2337 We’re really proud to be a Canadian company that’s invested in Canada, and we want to partner with others so that Canadians can see and engage and listen to the very best Canadian content, no matter where they live.

2338 THE CHAIRPERSON: So, let me build on that a little bit. I mean, obviously Rogers is a dominant force in the Canadian distribution market. So, what does your role look like in terms of furthering the broader objectives of the Act, which include supporting fair, transparent, competitive rules of engagement, and ensuring that Canadian independent broadcasting undertakings continue to play a vital role within the system. How do you see your role?

2339 MR. LEECH: I think on our team, Colette is surely well‑positioned to answer that one, so I would ask her to pick that up, please.

2340 MS. WATSON: We view our leadership at Rogers ‑‑ I end up being the old lady at all these meetings now, but I happened to work for Ted Rogers and absorb the lessons at the hand of Ted Rogers, and he imbued in us an entrepreneur, a thirst, and a patriotic view of who we are, what we do, and why we do it.

2341 Who we are? We are a connector. We bring, whether it’s wireless or cable, or whatever the next thing will be in 10 years ‑‑ we will bring it. We will build it. We will bring it to Canada.

2342 Why we do it? Because we live here, we are Canadian, that’s who we are, and that’s what we want to do. Our vision, to put a bow on this exchange, is to make, distribute, and help foster good Canadian content. In a previous hearing a month ago, we all worried about where local news will come from, where Canadian programs will come from. The system globally, while we’re in three separate processes when we talk to you about it ‑‑ they will all form part of a larger decision. Process number one ‑‑ what role do foreign streamers play? Process number two ‑‑ what are we going to define as Canadian content and how do we keep it going? What do we grow? How do we grow it?

2343 And role number three is, as I read the framework of this process, what’s the regulatory framework required to mediate disputes between parties in the system? There is always a need for many parties. We’ve given you proposals on how we think the process should unfold, but at the end of the day, I hope you will never lose sight that, even though we are using “existential crisis” words, we’re here, as I said last month, raising the flag, going, “Status quo kind of can’t work anymore. We have thoughts on how it can grow and move.”

2344 But we’re here. We are here at the table saying, you know, “Hey, I want what the streamers have.” No, we are here; we recognize we have a different role to play. We believe in the system, we want to play in the system. And some of the moves we’ve made over the last two, three years are meant to grow that system and give it seven to ten years’ runway. And so, our vision is to be a strong Canadian company, and as I said last month, I don’t want to have to apologize for being a strong Canadian company.

2345 We are a strong Canadian company. Our competitor is a foreign streaming giant that is global, and there are three or four or five of them, but we will continue to be here, come to the table, with what I hope you view as constructive suggestions to how to move forward.

2346 THE CHAIRPERSON: All right, thank you.

2347 Let’s zoom in. I will start with access and discoverability. I mean, you’ve read the public record so far. Several intervenors have said that without proper access, distribution, discoverability, and prominence requirements, certain types of services and the content they carry will simply never have the exposure they require to find their audience.

2348 The UK and Australia, and several others, have come to the same conclusion, and have introduced legislation to that effect. I’m thinking of the UK Media Act as an example.

2349 Yet, your position, as I understand it, is that we should not impose such requirements; we should just focus on funding Canadian content, and it will find its way to an audience, relying on market forces. I think that’s the concept that was used in your intervention.

2350 So, why is the situation different in Canada than in Europe, for instance?

2351 MR. SHAIKH: I will start with access, and then maybe Colette and Susan can pick up on discoverability.

2352 You need a simple, flexible rule. I know you are tired of hearing the words “flexible” and “level playing field”, but those are absolutely the concepts that we need to embrace. With a flexible model, as we propose, there will be a rich variety of services delivered by every BDU, including Canadian independent services. That’s the access model we favour.

2353 We don’t favour a model that guarantees access rights for any individual service. People have made a point about what the Broadcasting Act requires. It requires, absolutely, space for independent programmers. Our model will leave a place for lots of independent programmers, but you can’t provide access rights for any individual service. That’s what will actually endanger the broadcasting system.

2354 Discoverability, I think my colleagues will discuss.

2355 MS. WATSON: So, I will start at the zooming out, and then perhaps Jason can talk about how we do it with our platform.

2356 We ‑‑ Susan and I ‑‑ appeared before the Commission ‑‑ and again, I lose track of time ‑‑ maybe a decade ago, to try and encourage in a CMF discussion, or an independent production discussion, to try and surface the importance of marketing, and to bring marketing to the forefront, and to have those producers also participate ‑‑ or have some of those marketing dollars count in the growth and promotion of their products, or joint products that we create.

2357 We didn’t win that argument, but perhaps we can resurface it again ‑‑ that we are joint partners in marketing. We heard from a lot of intervenors yesterday who want us to do all their marketing for them. It has to be a partnership. They have to come to the table and say, “We’re willing to market the product.” They can’t expect large BDUs to do their marketing for them.

2358 And then I’ll let Jason describe how he does marketing on the platform.

2359 MR. FORTINO: Thank you, Colette. I agree it has to be a shared onus. We’ve got a range of tools available to us on the platform that we use to promote all content ‑‑ all content that is relevant to our customers. We have used screensavers, a guide, advertisements within the guide, homepage takeovers, to surface what we believe is most relevant and pertinent to our customer.

2360 THE CHAIRPERSON: So, I am trying to understand. In your view, the conversation around discoverability and prominence is essentially conversation around marketing tools, which is a responsibility that should be shared with the programmers ‑‑ and I’m just trying to figure out, because it’s a little bit at odds with the broader international conversation going on around discoverability and prominence.

2361 You’ve seen UK, you’ve seen Australia ‑‑ Quebec is working on developing some regulations around discoverability. There seems to be a general acknowledgment that discoverability in itself warrants specific action.

2362 So I’m just trying to figure out what is your argument against imposing, for instance, strict requirements regarding discoverability and prominence?

2363 MS. WATSON: So my concern is that the requirements are strict. We can share a philosophy that we need to make Canadian independence, Canadian programming more discoverable.

2364 I don’t know if you had a chance to watch hockey over the last two months. You will have noticed a lot of promotion of CBC and Canadian content promoted on the most watched programming 45 out of 46 nights of the last two months. We lost that 46th night on election night.

2365 So we are happy to promote and create discoverability. What we fear is stringent strict frameworks that box us in and stifle creativity or what the next thing is. Also, I don’t know that it can be applied equally across all distribution platforms and thus, again, we retain more rules than we have today.

2366 And we’re coming to you saying, we don’t want more rules. What are three priorities the Commission has? How can we help deliver on those priorities? And at a 30,000 foot level, I’m okay with direction with expectations. But filling out more reports on how to do things is not something we’re going to look forward to.

2367 We have old tools that were changed. Commissioner Paquette asked a question of the previous intervenor, what can we do to help promote radio or things like that? We have local avails that are available. So there are strict CRTC rules on how you can use those local avails. Perhaps you look at how we can broaden that.

2368 Radio’s no longer allowed on those local avails. Let’s go look at that. Let’s go update those things. So there are tools that at our disposal now that we could maximize. But looking for artificial or a new regulatory and strict, to use your word, framework, is something that makes us nervous.

2369 THE CHAIRPERSON: So does your skepticism around imposing discoverability or prominence requirements extend to connected device?

2370 Because yesterday, we had quite a compelling example coming from Stingray where, you know, Eric Boyko said, “When I use the voice‑assistance system and I say, “musique,” I’m not getting what I’m looking for because another type of content is being pushed to me,” or, “When I say ‘news,’ I’m not getting CTV, I’m getting CNN.” So...

2371 MR. LEECH: We have a good partnership with Stingray. So when I was listening to the proceedings yesterday, I was surprised to hear that. A couple little things I’d like to set just for accuracy.

2372 Xfinity is exclusive to Rogers. So there was some conflation during that presentment around where that actual brand rides and what networks it’s provided on. So I did want to help clear that up. I think that that’s an important point, given the investment we put in to bringing the very best through the Xfinity platform. And we are currently the only BDU to offer that in Canada.

2373 There’s an algorithmic AI platform that allows us to bring information to Canadians. And so it depends on what the person asks for, it depends on how they phrase it. So what we want to make sure we do is that we trust Canadians to ask for information they want. What the formula does is it brings forward information in the easiest way.

2374 As you would expect, when I heard that yesterday, we quickly tested it to see if we had made an error and if there was a mistake. And you can see what the platform is doing, is it will bring up the very top, which actually shows what Canadians are asking for and where Canadians are choosing to get their data. Then right underneath was Stingray.

2375 I also want to mention another thing that I think is quite relevant. Jason touched on it, but I want to just make sure I emphasize it.

2376 We also work with all the different providers to help amplify their voice. So we do see it as a joint partnership, as Colette said. Like, they have to bring great content to life, or great music in this case, to life. Like, that’s part of their role. They also have to invest in themselves to bring that forward. We’ve seen many Canadian success stories, like musicians, have made it on the global scale.

2377 And if I could just please, just finish?

2378 THE CHAIRPERSON: Yes, sure.

2379 MR. LEECH: Is we work with them to bring that to life as well through our home page screens, through our dynamic inserts that we have in our guide. So we see ourselves in partnership with them to bring that, and we’re counting on them to do their part.

2380 THE CHAIRPERSON: Sure, thank you. My question was not meant to be a disguised criticism of Rogers, it was more of a broader question around the appropriateness of considering discoverability requirements for connected device at large.

2381 MR. LEECH: I appreciate that point. I just thought I’d take the opportunity to clarify that.

2382 THE CHAIRPERSON: Thank you.

2383 MR. LEECH: Thank you.

2384 MR. SHAIKH: I mean, if the question is about requirements, it’s obvious our position, that it’s a dangerous slippery slope to consider imposing new regulations, especially in this area. I think there was some discussion earlier about how then do you decide from among hundreds of programming services which ones are discoverable, how they’re discoverable.

2385 This is something that I think is a really dangerous conversation if you’re talking about regulating it.

2386 THE CHAIRPERSON: Let's move on and dig deeper again on your proposal to have a lighter touch regulatory approach. I’m trying to figure out how this would work in relation to the other objectives that we have in the Act, in particular in respect to programming undertaken serving Indigenous communities, OLMCs, equity‑deserving groups, other groups of Canadians, diverse backgrounds.

2387 In your presentation earlier today, you said that “a modernized regulatory framework should rely on market forces to achieve broadcasting policy objectives whenever possible.”

2388 So what would a lighter touch regulatory approach look like, including for how we support those particular equity‑deserving groups? What would need to be tweaked, with what intent? And if you could be as concrete as possible, that would be quite helpful.

2389 MR. SHAIKH: I’m going to be very concrete, and I appreciate the opportunity to answer this question. I think at the CanCon hearing we spoke with some conviction about our commitment to OLMCs and third‑language communities and the Indigenous community.

2390 I want to take the opportunity specifically to address Rogers’ commitment to ethnic and third‑language communities, because there was some discussion earlier this week suggesting that our commitment was less than others.

2391 In fact, Rogers is a leader in providing ethic and third‑language programming services, Canadian and non‑Canadian, across Canada. Something that we take a lot of pride in. And it's largely driven by the market compelling us to deliver that programming to Canadians, not just in competition with foreign streamers, but in this case especially in competition with the pirates, which is quickly becoming one of our largest BDUs in Canada.

2392 So we’re also, in addition to being a leader in providing ethnic and third‑language services, a leader in combatting piracy. We’re leading efforts for site blocking, we’re collaborating with criminal authorities.

2393 I welcome any Commissioner, anyone from the Commission Staff, to come visit us in Toronto to see our piracy lab, to see just how committed we are to combatting piracy on our own initiative. And those efforts are coupled with delivering exceptional ethnic and third‑language programming to Canadians.

2394 There’s a suggestion that we wanted to get rid of the rules protecting those services. We actually only want to get rid of, or eliminate, the one‑to‑one packaging rule. There will be a one‑to‑one carriage rule for ethnic and third‑language services.

2395 However, because we offer so many ethnic and third‑language programming services, we really need packaging flexibility to deliver those services to Canadians in the way they want them, and affordably.

2396 Jason, I think you should probably top‑up our commitment.

2397 MR. FORTINO: Yes. Thanks, Dean. It’s no secret that Canada is one of the most multicultural countries in the world, and we want to serve all Canadians, including new Canadians.

2398 We have done a lot on this front, we’re quite committed to it. We’ve got 200 services, Canadian and foreign, in the third‑language multicultural space. This year alone, we added 70 new channels in this pace in the Rogers cable systems, 140 channels in the former Shaw cable systems. We needed some work to bring that to parity in order to harmonize our offering and serve new Canadians, no matter where they live.

2399 It’s a space that we continue to invest in and, as Dean said, is an increasingly difficult space to compete in, given the prevalence of piracy, particularly related to this space. So flexibility will be paramount in keeping folks in the system and consuming our content.

2400 MR. SHAIKH: Just to wrap it up, this is the perfect story of the balance of market forces and flexible regulation. We’ll preserve a one‑to‑one carriage role, we’ll rely to a large extent on the market forces that compel us to deliver those services to Canadians and combat piracy, and we’ll get a little bit more flexibility on packaging.

2401 THE CHAIRPERSON: So you seem to be doing quite well. What’s the regulatory obstacle then?

2402 MR. SHAIKH: Again, this is the conversation, if we were to eliminate the packaging rule, we would have greater flexibility to deliver those services in a way that Canadians are demanding.

2403 Overall, if the question is, I think as others suggested, are BDUs doing well, what’s the problem? I don’t know if you want to tackle this conversation just in terms of this conversation, or the broader conversation of what is getting in the way of us actually serving Canadians?

2404 If that’s the case, I’m going to ask ‑‑

2405 THE CHAIRPERSON: Maybe we’ll keep this for the end of the conversation ‑‑

2406 MR. SHAIKH: Sure.

2407 THE CHAIRPERSON:  ‑‑ because I still have a rather long list of precise questions I want to ask, and I want to make sure that you guys get the opportunity to put your views on the record.

2408 In your submission, several times you do refer to “underperforming services.” I was wondering, how do you assess performance and identify an underperforming service? Are they different than smaller and niche services? And what is more, generally speaking, underperforming when you’re talking about at‑risk programming?

2409 MR. SHAIKH: I don't want to conflate the conversation of underperforming versus at‑risk programming. In terms of underperforming, I want to make it clear, Rogers is not here because we want to eliminate a large number of Canadian programming services.

2410 On the contrary, we’re committed to delivering as many programming services as we can that are valued by Canadians, demanded by Canadians, and we want to have the packaging flexibility to deliver those services to Canadians.

2411 We also want the ability to negotiate a wholesale rate for those services that’s based on their value to Canadians. In terms of how we identify services and which ones are performing well with our customers, it’s based on our customer relationship.

2412 And I think Bret and Jason, you want to discuss?

2413 MR. LEECH: We spend a lot of time thinking about and listening to our customers about what they’re looking for. Sometimes customers reach out to us directly to convey, you know, commitment to a channel that they’d like us to carry, or confusion around a channel that we’ve been required to carry.

2414 I’ll make it real. So there’s a woman named Debra in Cambell River, and she called. She was extremely confused by some of the changes that occurred recently in the rights swaps. And the reason why I bring her up, is because she was just saying, hey, I really just want to have this particular channel. I really would like this particular information.

2415 So those kind of individual inputs are extremely important to us.

2416 We also then have the benefit of data behind the scenes to see how long people watch channels, and how often people watch channels. And so we combine both the customer firsthand experience as well as the data behind the scenes to give us an assessment of what channels people are interested in and what they’re looking to watch.

2417 THE CHAIRPERSON: How do you spur innovation, how do you push content perhaps that could not ‑‑ that is not necessarily well‑known or demanded by the consumer because it’s new, it’s edgy, it’s innovative? How do you make the determination that the time is right and we should be pushing that sort of content?

2418 MR. LEECH: Well, as a principle, I believe in Canadians and their ability to source and find information that they want to ‑‑ the conversation today excludes half of the Canadian population.

2419 And at the current rate, using the CRTC numbers alone, flashforward to the end of the decade, and we’re going to have about 35 per cent of the people in a regulatory environment, that is very concerning to me, because we want to be the home and the destination for having Canadians choose us.

2420 But, to do that, we need to have a flexible environment so that we can ebb and flow as they find new information that they would like to. The ability to keep up with the technology and keep up with the changing preferences requires a flexible system for us to do that.

2421 MS. WATSON: If I could add ‑‑

2422 THE CHAIRPERSON: Yes, sure.

2423 MS. WATSON:  ‑‑ just another nuance? The math on how do we assess is the consumer demand, the viewership, the usage. But also, when it comes time to negotiating a rate with a channel we have gone, some channels, from 300 original hours a year. So, you know, give or take a few holidays, it’s a new hour a day, worth it. Some of these are creating 20 hours, that’s not a typo, 20 hours a year of new original content. There’s a market value assessed to that.

2424 So we’re trying to put some of that accountability back on the programmer. You have to serve my customers a little better than 20 new hours a year, or we renegotiate the rate. Those are the kinds of things that go into our thought process.

2425 THE CHAIRPERSON: Thank you. Thank you, that's helpful. Ms. Watson, earlier you referred to hockey, so I’ll continue on hockey.

2426 In your intervention, you indicated that sporting events, although they’re important to Canadians, they should not be considered of national or cultural significance. Again, there are experiences out there around anti‑siphoning regimes, you’ve got the UK prominence regime, the Australian prominence and anti‑siphoning bill.

2427 Why are things different in Canada when we know that sports and, again, hockey is a good example, even though we lost the cup, they’ve been historically quite important to, you know, nation building and I’m sure a lot of Canadians would argue, you know, they carry some cultural and national significance.

2428 So why not an anti‑siphoning regulatory framework?

2429 MS. WATSON: We completely concur that these are important to Canadians, important to our audiences, important to us, and which is why we worked really really hard to secure the hockey rights for the next 13 years; if I have one year left on the existing deal, another 12‑year deal.

2430 What concerns me is Year 7 from now, I don’t know what the world will look like. We will be nimble and flexible and move, but I can’t tell you today what Year 7 of that 12‑year deal will look like.

2431 It’s an expensive, I think Madam Théberge referred to that, I lose track of dates, whatever day it was earlier this week, and it’s ‑‑ Ce n’est pas rentable. If we can’t monetize it, it’s very challenging.

2432 So our concern is if there’s a rule that says we have to make it free to Canadians, it’s an expensive proposition for us. So it’s in Canadian hands, we have assets that will allow us to ensure the largest number of Canadians will access it. But I don’t want to say today, in whatever you enshrine as a result of this, that we can’t monetize it. That is a sure‑fire way to make us not bid on things going forward.

2433 So that’s just the balance we’re asking you to look at, is we have to be able to monetize.

2434 The good news is, we’ve kept them in Canada for the next decade and a half. We’re asking you to allow us to monetize it so that we can keep it in Canada.

2435 THE CHAIRPERSON: Thank you. I want to move back to connected devices just for a couple of questions.

2436 So you expressed an interest in the CRTC monitoring the impact of connected devices in the broadcasting ecosystem. But at the same time, you don’t believe that we necessarily have a jurisdiction over connected devices.

2437 So what do you see the utility in having us involved in monitoring over something we don’t necessarily have jurisdiction over, according to you?

2438 MS. WHEELER: So there is no express authority in the Act to regulate the connected devices, unlike in perhaps other jurisdictions, like the UK and Australia. So that was what we were alluding to.

2439 But we certainly believe that they are competitive element in the system. They do compete with BDUs with programming services for subscription and advertising revenue. And, to that extent, they certainly are something that is worth monitoring and gaining a better understanding around.

2440 What you see, and you heard Corus mention it today, and others earlier this week, the model that they use is three‑fold.

2441 One, they host third‑party aps, so in that capacity they’re not retransmitting programming, you know, like a BDU might be. But they are taking advertising inventory from those aps and they are using, you know, their platform to insert their own advertising in there. So, in that capacity, they are retransmitting, they are broadcasting, as it’s defined under the Act.

2442 The other role that they play is as a billing agent. And so there’s a fee that they take as part of the ‑‑ you know, if you are to go on a Roku device or an Amazon Fire device and you were to purchase the ap on that platform, there will be a fee associated with that. And then they’re going to take a percentage of that as you continue your subscription. So, in that capacity, they certainly are monetizing Canadians’ access to the content.

2443 And then, thirdly, they’re creating their own programming services. So FAST channels, and some of them have within them their own, you know, curation of a base programming package. So, in that capacity, we would concede that they are broadcasting and they’re not acting as a connected device.

2444 What we were trying to distinguish between is the actual ‑‑ the internet connected device and the activity of broadcasting, and they’re two different things, as it’s defined under the Act.

2445 THE CHAIRPERSON: So what type of data points would we then be monitoring if we were to take on that responsibility, as you suggest?

2446 MS. WHEELER: I think you would want to understand the type of revenue that they’re making off of that activity, both from a subscription and advertising perspective, and the amount of content that they’re carrying.

2447 THE CHAIRPERSON: From what I understand, Rogers has had some positive experiences negotiating access with the operators of some connected devices.

2448 Could you talk a little bit about that and, you know, the type of Canadian content ‑‑ Canadian programming they’re interested in, how they proceed to give prominence? It would be interesting for the Commission to hear a little bit about your positive experiences, and negative experiences of course.

2449 MS. WHEELER: Sure. I mean, obviously we have an experience from both the programming side and from a BDU side. From the programming side, obviously our only direct‑to‑consumer ap right now is Sportsnet+, and we’re on a number of platforms. We’re not on all of the platforms, because the economics associated with some of the proposals being put forward just aren’t there, at least from our perspective.

2450 So I’ll hand it over to Jason who can speak more to the relationships that we’ve built with some of the larger online streaming services.

2451 MR. FORTINO: Thank you, Susan. It’s a bit of early days for us on the BDU side. We do have some relationships that are forming now, and I would say that they have generally been fair and reasonable. There is an advertising component, as I think was mentioned by one of the parties before us.

2452 But, generally, we’ve been able to strike commercial arrangements and get our BDU platforms up on the connected devices.

2453 THE CHAIRPERSON: Okay. Let me pivot to another section of our consultation around the rules of engagement. So, again, I’m just repeating your words back to you. You advocated for a lesser regulatory burden on traditional broadcasters, on the basis of what you refer to as regulatory asymmetry.

2454 Other parties have argued that the Commission can regulate on online undertakings in areas like priority carriage, equitable contributions, access to digital platforms. They’re worried about the impact of deregulation on various programming services, like independent, 9.1(1)(h), third‑language services, services carrying children’s content were also mentioned several times in this proceeding and in the CanCon proceeding as well.

2455 So I think everybody understands and probably accepts that there is asymmetry between traditional and online players. From what I understand, you would like to address this by lowering the burden on yourselves. But, if we listen, won’t that create further asymmetry and power imbalances in between the virtually‑integrated and the smaller Canadian broadcasting undertakings?

2456 MR. SHAIKH: There’s a lot there.

2457 THE CHAIRPERSON: Yes.

2458 MR. SHAIKH: It’s a foundation of our submission that we compete with the unregulated broadcasting system, we compete with streamers. Every strategy decision we made lately is about positioning us to better compete with online streamers and, as I said earlier, combat piracy.

2459 If we're able to compete with them, if we're able to stem the tide of subscriber losses, that will benefit the entire ecosystem of Canadian programming services to the benefit of those parties that you've discussed. That's our objective.

2460 Bret?

2461 MR. LEECH: Yeah, thanks, Dean.

2462 The reality is, and I am sure we have all been to Amazon or Netflix, you're seeing the industry change. They're aggregating content across multiple ‑‑ you've heard other submissions say that they're partnering with them as well to have their content embedded. And since, it's quite relevant that they're also moving into the live TV business. So our competition is the American streamers. We're looking to level the playing field.

2463 There's been a lot of comments made by some of our partners, some of our competitors about the size of our business and how it's so weighty in the Canadian context. We do have the benefit of publishing our financials, and so I'd like to cite a few of them because I think they're relevant. Let's start with the Canadian Homes Pass. There's about 17 million. About 15 per cent of those take content from me.

2464 So when I hear people say I'm the largest and I'm the biggest, if you add in the pirates and you add in the fact that more than half of Canadians are going to streamers, you'll see that I'm not the dominant player. If you double‑click on that math, you'll also see in some markets I'm not even in the top 10. I just happen to be a national provider.

2465 And so when you add it up and look at it on a national basis, I'm 15 per cent. And that's quite relevant.

2466 Netflix alone, their revenue base is more than double combined all the Canadian BDUs. I need, I think, we need and Canada needs a competitive structure that allows us to compete with those American streamers so we can bring the most and best content that Canadians create to Canadians.

2467 When you asked a vision question at the beginning, I want to bring more Canadians back into our system. I am frightened, just as many of us are, that so many of Canadians have chosen American streamers that they're not getting the benefit of finding this content. We have award‑winning remote. We have great accessibility tools that will allow all Canadians to get access to it, and we just need to have a level playing field, which means that sometimes there's going to be channels that drop content.

2468 If any of you have an opportunity to go and see some of the content that's been removed from the linear channels and taken online exclusively, customers are upset about having to pay twice. I have customers ‑‑ I referenced Deborah earlier ‑‑ Chris from Brantford called me and said, Why am I having to pay twice? The channel's removing content, and now I have to go online to pay. It's not fair for Chris in Brantford. It's not fair for Deborah in Campbell River. Like we need to do something that allows us to compete with the streamers, and that includes, where content has been sliced, to be able to make adjustments to the packaging programming.

2469 THE CHAIRPERSON: One of the things that you say will help Rogers address the issues that you just raised is to get rid of the Wholesale Code. So if we were to keep the Code, or at least some elements of it, in your view, what are the most pressing amendments that would need to be put ‑‑

2470 MR. LEECH: I will let Dean ‑‑ I'm sorry, ma'am, Madam Chair.

2471 THE CHAIRPERSON: Sure, go ahead.

2472 MR. LEECH: I will let Dean comment on those. But just to clarify my point, I'm asking for an environment that allows Canadians to compete in the space, not for Rogers. This is a Canadian comment about having a company that has invested over 70 billion in the past two decades to allow us to bring content to Canadians, and that's what I'm asking for ‑‑

2473 THE CHAIRPERSON: Sure, but right now it is Rogers who is asking to get rid of the Wholesale Code, hence my question.

2474 MR. LEECH: I was making sure that I had an opportunity clarify my perspective ‑‑

2475 THE CHAIRPERSON: Sure, absolutely, it's clear.

2476 MR. SHAIKH: And I will start and then I will ask Susan to add. It was discussed a bit this morning about, you know, when that Code was introduce and what framework. And that was introduced at a time when the Commission was focused on addressing the needs and demands of customers.

2477 And that should have been the focus and the outcome of that proceeding. It should have empowered customers to choose the programming they wanted and empowered BDUs to deliver the programming they wanted in the way that they wanted.

2478 Instead, the Code over time has insulated programmers from any risk. It's been part of the regime that we find overly protectionist. It's not consistent with what Bret is accessing about what he needs to have the ability to compete. So we would ask that the Code be repealed and ‑‑ Susan?

2479 MS. WHEELER: Yeah, so the one element of the Wholesale Code that is still relevant and should perhaps form a future guideline is the criteria around fair market value and how when factors are taken into account, when parties are before the Commission as part of a mediation or a final offer arbitration process.

2480 We don't believe that all of the criteria that are currently used in that fair market value assessment are still relevant, but we do believe that ‑‑ so it can be shortened and focused on what we believe to be commercially relevant determinants of value, and the two main ones being viewership and programming investment. And I think you've heard that from other parties in the past as well this week, that those are clearly the main determiners of value and attractiveness to customers.

2481 There can be other contextual considerations taken into account, like what, you know, is paid by an unaffiliated BDU to a programming service. That could be a relevant factor or other, you know, the rates paid to services of similar, you know, with similar viewing, again, taking into account programming investment. And those, I think, are really all that we need in order to really ascertain what the value is to both the BDU and, ultimately, to its customers.

2482 THE CHAIRPERSON: Thank you. Thank you for this. I want to make sure my colleagues have enough time to ask their questions, but I want to move quickly to ADR.

2483 So earlier this week, and it's in their submissions as well, Québecor emphasized that ADR mechanisms should be accessible to all companies regardless of their size, advocating for an inclusive approach to dispute resolution. And in contrast, you stated that these mechanisms should be reserved for smaller entities.

2484 So given the different perspectives, how do you respond to the concern that limiting access to ADR based on party size might inadvertently restrict fair and effective resolution of disputes, particularly when you're dealing with large and small entities? And can you elaborate how reserving ADR mechanisms for smaller entities would actually enhance fairness in practice?

2485 MS. WHEELER: Certainly. I think there may be a bit of a miscommunication there. What we're suggesting is that when parties ‑‑ first and foremost, we're not suggesting that any party not have access to dispute resolution.

2486 What we are suggesting is that when the dispute involves large players, that, given the complexity, particularly the number of services that are usually involved and the types of issues that are involved, that given, you know, limited CRTC resources and the times involved, time frame involved in resolving those disputes, that those be directed to outside commercial arbitration mediation.

2487 And then for, you know, more straightforward bilateral disputes perhaps with smaller players, that that can certainly be something that remains with the Commission.

2488 But we're trying to find ‑‑ at the core of our proposals around ADR is that we're trying to find a path to have more timely resolution of the disputes. I think one of the things you've heard from us and other parties throughout this proceeding is that the length of time that is taken and through, you know, through no fault of anyone, everyone trying to do the right thing, but there is a number of disputes that are now before the Commission. There's a number of priorities that the Commission has. And so really being able to focus in on how to resolve these disputes in the most expeditious manner is really at the core of our proposals.

2489 THE CHAIRPERSON: Sure. And, you know, efficiency is like apple pie. Everybody wants to be efficient. But time is also relative in that some smaller entities may require just more time because they've got less resources to be able to participate fully. So could you elaborate a little bit on how the 90‑day standstill period would allow for sufficient time for fair, good‑faith negotiations?

2490 MS. WHEELER: So in our proposal, we have two kind of paths, if you will. So in the context of a termination dispute, we're suggesting that the standstill wouldn't apply to that, that that discussion around terminating a service or terminating a carriage agreement, whether it's the programming service doing that or whether it's the BDU doing that, would start six months before the expiration of the commercial agreement.

2491 And in that period ‑‑ and, you know, we can provide more of a detailed timeline. It's in our submission, but we're happy to provide it again. But within that time frame, there is a built‑in period to contest that termination through an undue preference complaint. In that context, we've asked for that to be in, you know, a limited time frame so that that can be determined, whether it is an undue preference or not.

2492 And then once that is made, in a scenario where there is an undue preference that would be found, then it would go straight to an FOA. And at that point, the standstill would be in place on the FOA.

2493 So for an undue preference complaint that is not related to a dispute or in a case where both parties ‑‑ I'll park the undue preference for a second ‑‑ in the case where both parties have agreed to renew their carriage arrangement, we are suggesting that there be a mediation period of 30 days maximum, so that can incent parties to really focus the mind and dig in on what the issues are and how to close the gap between them.

2494 Our experience, the mediation has taken an inordinate amount of time. And so putting a timeline on it really helps focus in on what is important to the parties and understands that, once that mediation period is over, they're into a final offer arbitration that I think everyone will agree is never an ideal situation. There's an inherent risk and a lot of risk involved in being in an FOA proceeding. And so in that context, then, there would be a standstill that would be in place for that until that's resolved, and that's what we're suggesting should be a 90‑day period.

2495 THE CHAIRPERSON: Thank you. Thank you for this. You refer to undue preference, and you propose shifting the burden of proof to the complainant. But historically, the Commission has considered that it is the party that is conferring the preference that has the information. So how would that work? How would that be more efficient to shift the onus?

2496 MR. SHAIKH: I will start, and then maybe Susan will add on. I mean, obviously, the proposed changes to the undue preference regime is because we've seen what we view as a lot of complaints that are without merit, and there's no real gating process to consider whether those complaints should even get vetted. And often those complaints put us in a standstill or tie our hands on packaging.

2497 So there needs to be a higher threshold both for the consideration of complaints at the initial stage and then the consideration by the Commission on the substance of the complaint.

2498 I think we proposed a regime where there has to be real consideration of what harm is, and it has to be material harm. It can't simply be a decision to repackage a service that might cause some harm from the perspective of one party, but that's not real material harm. Obviously, we have to have flexibility to repackage services and choose which services go in packages.

2499 Then we also think there needs to be a higher threshold to consider what the real impact is. And we've suggesting something like a competition test to clearly identify a practice that could arguably be undue with a serious competitive impact or intent to make sure that it's not simply the case that differential treatment, which is often what these complaints are based on, is treated as an undue preference.

2500 And critically, we keep the onus to demonstrate the rationale for any decision that we make, which is to demonstrate that it's based on commercial reasons; it's based on customer demand and a legitimate business case. And we think that more effectively gates what we call frivolous undue preference complaints, often by our largest competitors, one that was here before you today suggesting things about Rogers while they're a large competitor that is eager to game the system by, you know, filing undue preference complaints. We want to make sure that that is not allowed to proceed.

2501 I think we're good.

2502 THE CHAIRPERSON: So when you talk about, you know, a higher threshold, are you thinking about codifying the criterias very, very specifically? I mean, your friends from Corus this morning talked about a non‑exhaustive indicative list of what would constitute undue preference. Would that be something that made sense that the CRTC could rely upon to make a determination around undue preference?

2503 MR. SHAIKH: It is absolutely not what Corus is suggesting. Corus is suggesting ‑‑

2504 THE CHAIRPERSON: I was just quoting what they said, so ‑‑

2505 MR. SHAIKH: No, no, for sure. I don't ‑‑ sorry, I don't mean that that's what Corus is suggesting or not suggesting. It's certainly not what we would support or advocate as being best for the system going forward. That will invite the exact outcome that we're trying to guard against, which is several frivolous complaints that are intended only to handcuff a competitor.

2506 THE CHAIRPERSON: So then, what do you mean by a higher threshold? Just something ‑‑

2507 MR. SHAIKH: When we propose a threshold or we shift the onus to demonstrate material harm and an intent can clearly be demonstrated as being ‑‑ having anti‑competitive impact, shifting that onus to the party making the complaint, and then reserving our onus to demonstrate that even if those two ‑‑ if the Commission accepts that there was a material harm and accepts the intent, we can defend the practice as being a response to legitimate business reasons. So we certainly ‑‑ that would be the new approach to undue preference codified in some form.

2508 THE CHAIRPERSON: Thank you. That is quite clear to me. Thank you.

2509 I am done with my questions, so I will turn things over to my colleague Commissioner Levy. Thank you so much.

2510 COMMISSIONER LEVY: Hello. Thank you very much for being here. We wouldn't be here if we weren't open to substantial changes in a system that is obviously headed for some huge changes, as they have already materialized. But to me, it seems odd that the streamers are really your major source of competition, and yet you seem to want to meet the moment by turning the firing squad internally and coming up with different ways to resolve the disputes you had with domestic players. So explain to me how that furthers your goals of being a proper competition or meeting the competition of the large streamers.

2511 MR. SHAIKH: I will start from the regulatory side, and then I think, Brett, you'll add sort of a business perspective.

2512 Again, one of the ways we're going to be effective competitors to streamers is by offering a rich variety of innovative programming services that are demanded by customers. We have no ability to prioritize or favour our own services. We only have 11. So we really need to rely on the full diversity of programming provided by our industry partners, which include independent services.

2513 We just need a little bit more flexibility to be nimble and dynamic. They are. They have no rules. To be clear, that's going to require, going forward, the ability to more quickly negotiate rates that reflect the value of services that we intend to continue carrying. It also in some cases requires greater ability to drop certain services when they're no longer demanded by our customers, which will free up revenue and eliminates for cost to focus on the services that are demanded by our customers.

2514 And I actually think with a more flexible regime that doesn't include a litany of packaging obligations and uncertainty, there is actually a greater opportunity to partner with new services. And I think this was raised earlier in this proceeding is the inability for new services to enter the market.

2515 You know, previously, you could actually work out innovative deals with a potential independent service and programming partner, kind of work it out where you share some risk. Now, unfortunately, the regulatory framework creates risk because there's a risk once you add a programming service that you'll be subject to lots of rules that protect that service, limit packaging flexibility. So we'd like a regime that actually lets us partner with programming services so we're able to compete with online streamers.

2516 Bret?

2517 MR. LEECH: Just to put some math to it, we spend about a billion dollars on content investment in a given year, and about 85 per cent of that goes to Canadian channels. And we just ‑‑ we're limited by speed. It's the length of time. And preferences are changing. People are consuming content at an even higher rate than ever before. The average Canadian watches 36.4 hours of content a week, yet, today, in Rogers alone, we will lose 550 people out of our part of the system. And that will be multiplied across all of the BDUs. Over the last two years, 400,000 people have left the system through the Rogers part. And that doesn't even include the other BDUs.

2518 I need to have the flexibility to make sure that it's Canadian people facilitating Canadian content. We don't operate outside of Canada. Unlike some other players, all of our capital is invested in the country. All of our emphasis, dollars, focus, it's all here. And we need to have the flexibility to be able to ebb and flow as customer needs change.

2519 And if we can do that quickly, we can then, as Dean suggested, we can then be able to allow other new content providers to come to life. As Colette said, we have a history of innovation and we need the flexibility to be able to do that and bring that to life across Canada.

2520 MS. WATSON: So if I can top up, we are trying to meet the moment. We've made some moves that are intended to meet customers where they are or where they will be.

2521 And so I took great interest in Mr. Boyko's closing comments yesterday when he said, you know, thank you for hearing us out. We spent 40 minutes talking about how we think the system should change, and here are some of the issues we face. But at the end of it, he said, Hey, I built a great global business thanks to BDUs in the country.

2522 Yeah, he did. And many of them are. And so yet they won't come to us. They're going to go to Amazon, and they do go to Amazon, and there's a rev‑share. With us, it's no. It's the wholesale rate. It's got to be a guaranteed CPI on this wholesale rate forever and ever.

2523 So yeah, we do have an army within the system, and but that's what's regulated right now. The other part, where we are playing, is unregulated. And so we are every day innovating to create things that will meet the moment, that will bring customers back to the regulated side of the business. But in the internal battle, to use your analogy we are perceived as big, therefore bad. And so we would just like to rebalance that ‑‑ is we are trying. We are innovating.

2524 And the rules we operate on, some of the wholesale rate rules are from ‑‑ and I shudder to say this ‑‑ 1984. And so, yeah, we need to change it. We want to change it. We would like to come to the table and give you our explanations for why or our thoughts and solutions for what. That's just taking too long.

2525 So our plea here, if anything, is how can we help make it go faster. And by removing some regulations that don't ‑‑ no longer further the objectives, we're thinking maybe that frees up some resources for you to go faster.

2526 COMMISSIONER LEVY: At the end of the day, you talk about 85 per cent being spent on Canadian services. But that doesn't necessarily translate into 85 per cent spent on Canadian programs. So there's still a lot of international programming that's being delivered. And I wonder if, at the end of the day, with the changes that you're asking, how is this going to serve Canadian audiences who want to see Canadian material, not a version of The Price Is Right or Law & Order Toronto, but Canadian material?

2527 MS. WATSON: I appreciate the reference. These are audience‑driven programs to create some cultural references to the country in machines that have already built‑in audiences. And so we're trying to advance it that way.

2528 We have, in the previous proceeding, given ideas on how we can create content and continue to further it. We have shown up in this proceeding saying 9.1(1)(h) is important; here are our thoughts on that. We are innovating all the time and meeting.

2529 But at the same time, customers are abandoning the distribution mechanism in favour of larger bundles. If we isolate ‑‑ and I don't know, and I'm hoping as this process continues, what you mean by what is Canadian versus not Canadian. Canadians are tuning in to Law and Order Toronto, it's the highest rated drama right now. And so maybe that tells us all something, that that’s what they want. We are meeting the moment with things that create large Canadian audiences.

2530 With respect to carrying all of the OTAs, we do. We have no issue with that. They will be the ones who create more drama. And I refer you to my earlier example of, we have a strong partnership with the CBC to help promote their programming and their originals on programming that most Canadians are watching right now to help drive them to see those options.

2531 MR. SHAIKH: I just want to add one point if I can. Because we actually think that can be in program, especially local over the air programming, live programming, is one of the things that differentiates us from the streamers and is going to be critical going forward to our ability to compete. We want that Canadian programming that's demanded by our customers to stay within the system.

2532 So there's been some suggestion about whether you can force that carriage on to the streamers. That's not something we're in favor of. I mean, quite honestly, I don't know that you can force carriage of linear channels, and I don't think that you should.

2533 I want what Colette is describing, our unique contributions including the carriage of 9.1(h) services and local over the air television and distinctly Canadian programming to be recognized as a strength of the system that keeps Canadians in the system.

2534 COMMISSIONER LEVY: I think I will leave it there. Thank you very much for your answers.

2535 THE CHAIRPERSON: Thank you very much, Commissioner Levy.

2536 I will now move to Commissioner Abramson.

2537 COMMISSIONER ABRAMSON: Thanks. And nice to see you all here today.

2538 Let me actually start where my colleague left off. What is the biggest reason people leave the system? When they're cutting the cord, why do they leave?

2539 MR. LEECH: I believe if we have the right content people will stay within the system. I'm trying to bridge the questions if I could.

2540 What’s happening right now, from a practical perspective, and I appreciate there's many people in the room who understand far greater than I the regulatory. But practically, what happens is the channel that might be offered as part of a package slowly takes content away from that and moves it over to the online world.

2541 And from customer perspective, like Beth from Aurora, now she has to go spend money over in the online world as well. Eventually Beth says, wow, most of my content is going elsewhere. And so, she says, perhaps it's not worth being in the system anymore.

2542 And like over half of the Canadians, and as I said earlier, referencing the own CRTC and extrapolating forward, we'll be down about 35 percent. So we have to have rich great content in the system and then people have to be able to access it easily.

2543 COMMISSIONER ABRAMSON: So they are following the content that they love? Is that why people leave?

2544 MR. LEECH: Yeah, that is one of the big reasons why people leave the system. Yeah, that’s right.

2545 And then I think it also is, I think, critically important to mention at least in this audience, that having the ability to get it and the networks that power the content. You know, we obviously, and people have mentioned this in other submissions, are proud network builders in Canada. We put approximately 90 percent of our overall profits go back into improving the lives Canadians by connecting them.

2546 And when I look at American streamers, they are effectively riding on our road, walking on our trails, and they don't have the same in their backpack, where I might have to carry 100 pounds of regulation, which limits my ability to speed as quickly responding to them.

2547 COMMISSIONER ABRAMSON: Are financial considerations another reason that people leave?

2548 MR. SHAIKH: It's a value proposition, certainly. And we want to have the ability with our rules to provide customers with value. And I don't think you should assume that there is a decision that you can make today that completely prevents the flow of these subscribers to the online world.

2549 What we're asking for is the opportunity to compete for those customers, to repatriate them, to capture the attention cord nevers, to build a value proposition with the rich variety of Canadian and non‑Canadian programming services packaged in a way that we can package them, by moving flexibly to compete. We're asking for the opportunity to compete.

2550 COMMISSIONER ABRAMSON: And right now, you don't have that opportunity because you are carrying way too many pounds of regulation?

2551 MR. LEECH: Speed to respond is another part. So mark it moves quickly, right? It's fluid and so we need to be able to move quickly to respond with it. Some of the content that I referenced, we've been in stand stills for over the better part of two years waiting for us to be able to respond to what customers are asking and feedback that they're giving us.

2552 And because of that delay, to your point around the value proposition that Dean made, and your point around cost, it's implied in my Beth example, because eventually the cost us becomes not worth the investment because her viewership, that 36.4 hours is now more consumed elsewhere.

2553 COMMISSIONER ABRAMSON: To cord nevers who have been raised on the internet and who are accustomed to be able to get access to any website or any service that’s online, the idea there's a high ongoing cost to carrying services you no longer want to carry may be hard to understand. Can you help us understand what those costs look like?

2554 MR. SHAIKH: Well, take a look at affiliate fees. As you know revenues have been defining and subscribers have been declining, affiliate fees have been increasing. I think there's a recognition across the world that there has to be a better response to declining viewership, including shared risk, and in some cases affiliate fees that make more sense to the value of the service.

2555 I think Jason, you've had some experience with U.S. services that you know, helps illustrate our point that there's actually understanding of the new commercial relationship that exists.

2556 MR. FORTINO: Yes, thanks Dean.

2557 That’s right. There are a number of examples when we are negotiating with the U.S. counterparts, and even some Canadian counterparts for that matter, in a pure commercial negotiation where rates are are not increasing. Rates are coming down, particularly outside of the world of sports and news, and some of the general interests, general entertainment category where a lot of that has moved online.

2558 And so, we have seen an ability to start to right size some of that when we are negotiating commercially.

2559 COMMISSIONER ABRAMSON: Okay. Let me turn to skinny basic. I think you asked that we act on skinny basic by eliminating the requirement. Can you just flesh that out a little bit? Why is skinny basic no longer required at a time when folks are pretty cost conscious?

2560 MR. SHAIKH: We accept the requirement to offer a basic service that includes 9.1(h) services and local over the air channels. We share the views expressed by others that the price cap should be eliminated or increased given, you know, the time period between when it was introduced and today. And we actually agree with others, and that might be a more important point, Jason, I think you'd agree, is the flexibility to add services the entry level basic.

2561 COMMISIONER ABRAMSON: Don't you have that flexibility now? I mean, people don't have to buy skinny basic, they can buy a fatter basic as it were.

2562 MR. SHAIKH: Yes. There’s a requirement no matter what to provide and entry level basic service is limited to the priority channels. We'd like the ability to add services to the entry level basic and just offer that as the entry level basic service.

2563 COMMISSIONER ABRAMSON: At the same price point? I'm just not following.

2564 MR. SHAIKH: Again, we'd like packaging and pricing flexibility, and I think we'd like to see the price cap eliminated or increased.

2565 COMMISSIONER ABRAMSON: Okay. I think that position is clear. And then something I sometimes hear is folks saying that, you know, basic as a pass through. Is part of the challenge that they have, even where consumers may not understand that all those 9.1(h) and over the air services are not coming at a very high cost from an affiliation fee standpoint? They feel like, look, if they just to get one or two channels, they can subscribe to those online, they can’t do it through a BDU.

2566 Is that a challenge as well, when you talk about that pile of rocks?

2567 MR. SHAIKH: It reminds me of Let’s Talk TV and what we initially imagined was the objective, was to empower BDUs to more directly serve their customers with enhanced flexibility, including to offer pure a la carte. I think it was explained today, unfortunately the outcome of that proceeding that the combination of the requirement to offer service a la carte and included in a small package under 10 services, we think we'd like to eliminate that small package requirement as well as the litany of other requirements under the wholesale code.

2568 And the ability for you know, parties to file any preference complaints, and everything else we've discussed, it's prevented us from doing exactly what you're describing and what we thought was the original intention of Let’s Talk TV, which was to really have flexibility to serve our customers with entry level basic. And beyond that really up to us to determine how we provide value to our customers based on our customer relationship.

2569 COMMISSIONER ABRAMSON: Okay. Thank you.

2570 Last question that I'll have, and I just wanted to continue the conversation that we've been having about data access and Numeris ETAM. You heard from previous intervenor today that ETAM is not good enough, they require more persistent and household level data.

2571 So I wanted to ask you about what that could look like, were we to go that route from a BDU perspective, what the burden looks like? And then perhaps if you can speak more broadly to addressable and targeted advertising in the traditional or the ‑‑ including the ‑‑ well, the traditional environment, including perhaps the linear portion of the traditional environment and whether that's on horizon and where we stand with that.

2572 MR. SHAIKH: This entire industry worked very hard over several years, as you know, a few of us at this table specifically worked very hard on that initiative to develop ETAM in partnership with independent broadcasters, CBC, other BDUs, and of course Numeris and their third party provider to develop what we all collectively understood was going to be improvement to audience measurement.

2573 ETAM marries return path data with people meter data, it provides a single currency to critical to the industry at that time. I think it's a great success story. When the project was initiated, it was unlike anything that had been introduced in the world. It has critical privacy protections, governance rules, rules around cost recovery. If there need to be any improvements made to the system, it should be discussed on an ongoing basis through Numeris.

2574 Apart from that, certainly targeted advertising can provide some benefits, and I think that needs to be ‑‑ potentially be subject of commercial agreements. And you can arrive at commercial agreements that would similarly need to address privacy governance, cost recovery, and everything that goes into a commercial agreement when you’re talking about sharing data, like return path data.

2575 Which is ‑‑ you know, we had this discussion when we were considering ETAM, there's a sense that is really easy to understand data. It's data that needs to be worked on and refined to provide any value to customers. So it's a process that requires a discussion and the commercial agreement.

2576 COMMISSIONER ABRAMSON: Thanks. I think I'm going to leave that discussion there for now.

2577 We talked about skinny basic earlier, and I'm being reminded that I neglected to ask you what proportion of your subscribers take skinny basic?

2578 MR. SHAIKH: And like others, we are prepared to provide that potential information as part of an undertaking or RFI.

Engagement

2579 COMMISSIONER ABRAMSON: We would be glad for that. Thank you. Those are my questions.

2580 THE CHAIRPERSON: Thank you, Commissioner Abramson. And then I will turn to Commissioner Paquette.

2581 COMMISSIONER PAQUETTE: Good morning.

2582 You mentioned at the beginning of this discussion, and I think it was you, Mr. Leech, who has said that you are confident that BDU will remain, BDUs will remain a destination for Canadians in the future, and you envision your TV offer becoming more and more hybrid with channels bundled with apps as an example.

2583 And we see in fact more and more Canadian BDUs or ISPs offering bundles of their own services with American services. And Telus is certainly a good example with their Stream+ service which includes Netflix, Disney, Prime Video. Corus also gave us example of your new Xfinity offer which includes 69 live TV channels and they say that at least 23 of which are owned by Rogers and no other Canadian services.

2584 First of all, I would like to give you the occasion to comment on this. But I guess my question is, does this give us an example of what a deregulated ecosystem would look like?

2585 MR. LEECH: I appreciate the opportunity to circle back. I hope I said at the beginning that we have the right to earn customers over the long period of time. Like we’re here to compete, to win, and to be part of the ecosystem.

2586 We are as we've talked about probably, I don't know if it's too much or not, because it is completely real for us, but the impact of American streamers. Canadians are voting with their feet. You know, if you think about your own CRTC data showing that streamers actually are receiving more money from the average household now than the BDUs are, and if we talk about the need in Canada to have competitive companies to play on the global scale.

2587 And while I don't want to take my business globally, but I want to be able to compete against global players in Canada, you're going to see an increased evolution where you get a combination those over the top streamers and like channels. That is trend of the industry, and it is coming from both sides.

2588 I think I may have mentioned earlier, and apologize if I'm duplicating, but Netflix is a prime example of now inserting live fights. They started with the Tyson fight and so forth, and you're saying that that's a trend. Worlds are coming together. And so, as that happens we want to make sure that we are positioned well to earn the right that Canadians choose us and keep them in the system.

2589 And that is very much an important element for what we're doing and we will continue to do that. Our first foray being some of the items around app TV, and the combination, but I'll refer to Collette on the team here just to talk a little bit more about that on the content side.

2590 COMMISSIONER PAQUETTE: So do I understand that the way to keep the Canadians into the ecosystem is to offer American apps bundled with some of your channels?

2591 MR. LEECH: No, I'm actually saying that we need to be able to be flexible to end flow with where consumer demands are going. And there are some great Canadian OTTS, there are some great linear channels from Canada, and there are also other content that consumers want to have. So in order for us to be successful and keep Canadians in the system, we need to be able to offer a breadth of services and not have Canadians run into the arms of American streamers to get what they need.

2592 Sorry, Collette, I should pass to you.

2593 MS. WATSON: I just wanted to clarify on the math Corus used this morning. I count City as one product, they count it as five. Based on the OTA sticks we have, I count Omni as one product, they count it as four based on the Omni regional licenses we have. So it inflates the math a little bit. I just wanted to make sure you were ‑‑

2594 COMMISSIONER PAQUETTE: And why don't you offer any other Canadian services on Xfinity, on the app?

2595 MR. FORTINO: Yeah, thank you for the opportunity to clarify. We were surprised to hear that commentary. Two thirds of the channels in the app TV package are Canadian channels from BlueAnt and Hollywood Suite, TLN, and many, many others. So we weren't quite sure where exactly that comment was rooted in.

2596 COMMISSIONER PAQUETTE: Okay. And is there a way to make sure that we avoid any undue preference in these kind of bundles?

2597 MR. SHAIKH: Well, again, there has to be a very high threshold for what's considered undo preference. It can't be differential treatment. I'm worried about any situation where someone is included and someone is not included, and the requirement is have to include everything and we have no flexibility. I mean there can’t be a model going forward that everyone has to be included in everything, otherwise there's no due preference.

2598 COMMISSIONER PAQUETTE: Okay.

2599 MR. LEECH: I hope we get the chance afterwards, if willing, to submit some of the information Jason just shared. Because sometimes it's hard for me to reconcile what I hear, and other submissions say, with the data points that Jason just referenced around other partners we've worked with in Canada.

2600 COMMISSIONER PAQUETTE: Of course.

2601 MR. LEECH: I don’t know how it exactly works, but we’d love to share that with you.

2602 COMMISSIONER PAQUETTE: Maybe your final remarks you could.

2603 MR. LEECH: Okay. Thank you.

2604 COMMISSIONER PAQUETTE: Final submissions, sorry.

2605 MR. LEECH: Okay. Thank you.

2606 COMMISSIONER LEECH: I find interesting the explanation you gave on VBDUs and why you think they shouldn't be regulated. Because Rogers as a BDU ‑‑ is a BDU, but is also a content hub, and you are in direct competition with the other content hubs like Apple TV, and the Smart TVs, and you even said that you're not a dominant player in Canada in terms of distribution.

2607 So do I understand that under your proposition the BDUs should remain regulated? I understand that you're asking for less regulation, but still you should remain regulated, while the VBDUs will not at all be regulated?

2608 MS. WHEELER: So our position is affiliated VBDUs should not be subject to regulations, because there should be a recognition of the obligations that we are already making to the system. VBDUs that are unaffiliated certainly would be captured by the regulatory environment.

2609 COMMISSIONER PAQUETTE: Okay. I misunderstood. I thought you were talking about all the virtual BDUs. And can you tell me how you would define a VBDU?

2610 MS. WHEELER: Yeah, so it touches on what I was addressing earlier already connected device. So a VBDU that is re‑transmitting programming, and packaging, and selling it to their own customers obviously is behaving in our view, similar to how a traditional cable company would. So we would see that as clearly and example of a VBDU.

2611 That is different than a connected device, where they are just hosting third party apps and they're not retransmitting that programming. So I think that's the distinction that we're drawing, understand that there is a lot of grey involved in the activity, and that connected devices may be morphing into VBDUs. But at this point I think there is still a clear delineation between the role of a connected device versus the role of a VBDU.

2612 COMMISSIONER PAQUETTE: And do I understand correctly that in any case it's only the affiliated VBDUs according to your proposition, that shouldn't be regulated. Is that what you're saying?

2613 MS. WHEELER: That's correct.

2614 COMMISSIONER PAQUETTE: So connected devices could be regulated?

2615 MS. WHEELER: I think we worry about the Commission's authority to regulate connected devices. As I mentioned earlier there's not an express authority as there is in the UK and Australia for governing internet connected devices. So we think there maybe a limitation on your authority to do that. But certainly, if that is, you know, seen to not be the case, then you know, I guess there's ‑‑ that’s at your discretion.

2616 But you know, in the vein of trying to provide, you know, level playing field and more flexibility in terms of how players are coming, or offering content to customers, we think that there should always be a light regulation.

2617 COMMISSIONER PAQUETTE: And at the moment on these connected devices we see mainly Netflix, Amazon Prime, Disney, Apple TV having prominent placement with icons appearing in the first position, some dedicated rows in user interfaces, pre‑installation on devices. Are these things that you're trying to negotiate for your own apps, and are you getting this kind of placement?

2618 MS. WHEELER: Yeah. And that is I think, one thing that was lost in the marketing discussion, is that there isn't a prominence on any of these devices that isn't coming at a cost. You're paying for that type of placement and that prominence. When there's a button on, you know, the Roku device, you're paying for that, and it is cost prohibitive.

2619 So services like Netflix and Amazon Prime that have a global presence are at a better ‑‑ in a better position to negotiate that kind of placement with global television manufacturers. Because, you know, they can sell it in Canada, they can sell that in the U.S., they can sell that in other jurisdictions, and so they don't have to make a device for each country.

2620 So there are certain limitations on how much Canadian programmers can actually ‑‑ you know, the marketing support that they can actually leverage. But most of the platforms will have standard rate cards for, you know, identifying this is how much you would get to be in this ‑‑ this is how much it would cost to be in this swim lane, this is much it would cost to have your app placed there. And that's how they monetize their platform, it's part of their business model.

2621 COMMISSIONER PAQUETTE: Okay, thank you. And one last question regarding your position on potential anti‑siphoning measures, you announced in April your new agreement, the renewal of your agreement the NHL for an amount of 11 billion Canadian for starting in ’26‑’27. The cost of this new agreement will more than double compared to the current agreement which was, I think, 4.5 billion.

2622 So who will pay at the end for these increases in costs? Is it the consumer that will have to absorb this cost increase? And I guess my concern is where will this stop in terms of increase?

2623 MS. WATSON: Everything gets monetized in sports. So it will be our ad revenue will be a significant part that, our subscription revenue will be a significant part of that, and our DTC will be a significant part of that. We've got partnerships. I won't go into detail about what we ‑‑ what our business model was.

2624 I do believe that it was more important to keep the rights in Canada. And so, leagues dictate pricing, and we found a way to come to a mutually agreeable amount that we think we can monetize. But it would be naive to think that we shouldn't or won't monetize it. That's just the nature of the business.

2625 COMMISSIONER PAQUETTE: But you say you wanted to keep the rights in Canada. But anti‑siphoning measures could help you ‑‑ could help keep the rights in Canada.

2626 MS. WATSON: I just don't have that would work. A league would just go to Amazon, then it would just drive them to the unregulated sector, and they would ‑‑ they're all based in the U.S. I don't know how that could work here. Again, I will defer to lawyers, but I don't know how that would work.

2627 COMMISSIONER PAQUETTE: Okay. Thank you very much. No more questions.

2628 THE CHAIRPERSON: Thank you, Commissioner Paquette. I will leave the last question Vice Chair Scott.

2629 VICE‑CHAIRPERSON SCOTT: So with the last question I'll try to put a bow on a couple of things.

2630 Because we're talking about the future of the broadcasting industry, including the massive disruption caused by huge global players entering the market, and it sounds like all you're asking for is an even playing field.

2631 And I think I heard you say you have no interest in taking your core distribution business global. Do you not run into a brick wall of massive scope and scale and global reach that it can't compete against? Or in other words is an even playing field enough?

2632 MR. LEECH: It’s a really good question. We believe that there's still enough opportunity, given the right regulatory environment to continue to grow and thrive.

2633 You know, practical flexibility just to give an example if I could, some of the channels that we carry have had declines in viewership from 70 to 90 percent. And it works in the benefit of the channel to them as we go to them to renegotiate rates, or we talk about where they should be placed, to put us in stand still, and then we wait.

2634 Practically, what does that do to the consumer? It slows down my investment in things that I know will help me beat these streamers, that matter to Canadian content providers to, like personalization. We're going to be launching a new entertainment interface that will allow greater personalization for Canadians. But because I had costs on one side, I've had to slow that down on the other.

2635 So the system is quite symbiotic in that respect, but we believe with the right regulatory environment being focused in Canada has always been good to Rogers. You know, we believe in the right to have the opportunity to win Canadian customers over, and we think if we have the right framework, will be able to do that and compete against the American giants.

2636 MS. WATSON: On a practical level, for the last seven years we have, as programming operators, secured digital and linear rights to everything we do so that we can ‑‑ for the territory. I would love nothing more than to buy these rights for Canadians, and in a mobile society it would follow them around. But studios still aren't ‑‑ and leagues still don't operate that way, they operate in territory.

2637 And studios make money by carving out territories. It has to be a huge number that would allow a program owner, or creator, IP holder, to give up a territory in favour of a global right. So there's still runway for us. It's a matter of knowing how many rights to buy and making sure you absorb them and buy them, so that you can monetize them a market for which you operate. So we've seen that, we're preparing for it, and we’re comfortable with it.

2638 VICE‑CHAIRPERSON SCOTT: That was informative, thank you.

2639 THE CHAIRPERSON: Thank you very much Vice‑Chair Scott. I'm going to ask legal to confirm the undertaking.

2640 MR. WILSON: Thank you. Please confirm that you undertake to respond to Commissioner Abramson’s question regarding the percentage of your subscribers that take the skinny basic, and if you could respond to that by July 18th.

2641 MR. SHAIKH: Yes, confirmed.

2642 MR. WILSON: Thank you.

2643 THE CHAIRPERSON: Thank you so much. And thank you to all of you for being here today. I think your frankness and generosity in your responses was certainly well appreciated by all of us.

2644 So thank you again, and we wish you a very good lunch and a very good afternoon.

2645 THE SECRETARY: We’ll break for lunch and resume at 12:45. Thank you.

‑‑‑ Suspension à 12 h 06

‑‑‑ Reprise à 12 h 45

2646 THE SECRETARY: Welcome back. We will now hear the presentation of Pelmorex Weather Networks.

2647 Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

2648 MR. EBY: Good afternoon, Madam Vice‑Chair, Vice‑Chair, Commissioners and Commission staff. I am Kurt Eby, Director, Regulatory, Government and Affiliate Relations at Pelmorex Weather Networks, the broadcasting licensee of the Canadian specialty services, MétéoMédia and The Weather Network, Canada’s trusted source for weather forecasts, news and emergency alerts in both official languages.

2649 I am joined today by my colleague Martin Belanger, Pelmorex’s Head of Alerting.

2650 Pelmorex believes that this proceeding is likely to stand as one of the most policy consultations in Canadian broadcasting history, and it must result in a framework that provides prominence for Canadian‑owned and operated programming services and enables all content services to fully monetize engagement.

2651 As this is a large proceeding with more than 60 intervenors, we will focus our comments on matters to which Pelmorex is able to provide a unique perspective and those recommendations that are most relevant to The Weather Network and MétéoMédia

2652 M. BELANGER : Premièrement, voici ce qui nous rend uniques. Depuis 2009, MétéoMédia et The Weather Network sont inclus dans le service de base puisque le CRTC a reconnu leur contribution exceptionnelle aux objectifs de la Loi sur la radiodiffusion. Cette désignation rare garantit que nous pouvons offrir une programmation météorologique locale 24 heures sur 24, 7 jours sur 7 aux Canadiens et Canadiennes pour les communautés à travers le pays. Et, ça, ça inclut notamment les régions rurales et éloignées, et ce, dans les deux langues officielles sur deux services de programmation et sous une seule licence.

2653 La distribution obligatoire sur le service de base nous a également permis de construire, financer et exploiter le Système d'agrégation et de dissémination national d’alertes. C’est l'infrastructure centrale technique du système, de l’unique Système d'alerte public au Canada. Cette réglementation permet à Pelmorex de construire et d'exploiter un système d'alerte de classe mondiale depuis plus de 15 ans, ce qui permet aux gouvernements d’économiser des centaines de millions de dollars. Mais plus important encore, le système ADNA permet de sauver des vies canadiennes, ce qui constitue vraiment une réussite en matière de radiodiffusion.

2654 À Pelmorex, nous avons également été innovateurs dans le secteur de la distribution numérique afin de nous assurer que notre contenu météorologique soit disponible là où les Canadiens le souhaitent, donc, là où ils se trouvent, quand et comment ils le souhaitent. Cela inclut nos sites Web et applications populaires, ainsi que des chaînes de télévision en continu avec publicité, gratuites, soit les chaînes FAST, ou encore des applications de télévision connectée et des applications TVIP avancées et interactives sur des plateformes qui sont détenues par d'autres distributeurs.

2655 Nous avons des décennies d'expérience dans l'exploitation d'entreprises traditionnelles et en ligne, que ce soit sur nos propres plateformes et celles qui sont aussi détenues par d'autres distributeurs. Nous comprenons la nécessité et les défis aussi de trouver des audiences sur de nouvelles plateformes, et nous avons constaté comment les modèles opérationnels et aussi les motivations des plus grands gardiens d'accès au monde ont évolué au fil du temps. Et nous constatons également maintenant que bon nombre de ces gardiens d'accès ici même au Canada cherchent à imiter le modèle qui est davantage, je dirais, fermé, intégré verticalement et contrôlé, ce qui est préféré par les plus grandes entreprises du monde.

2656 MR. EBY: We also see significant untapped opportunity for Canadian programming services and distribution undertakings to reach new audiences and, most importantly, effectively monetize engagement, an opportunity for platforms to succeed by ensuring the success of third‑party content providers, not by squeezing them out.

2657 On that, we turn to our recommendations for key policies to contribute to a sustainable Canadian broadcasting system.

2658 First, we recommend the Commission use its authority under section 11.1 of the Act to establish a Services of Exceptional Importance Fund so all online services contribute to ensuring 9.1(1)(h) licensees have the means to deliver on their regulated mandates of providing essential and diverse Canadian content.

2659 The challenges of services like ours are well documented, but their importance has not diminished. We believe that equitable contributions from foreign streaming services should come in a number of ways and forms, and one should be to help ensure that services of exceptional importance can continue to contribute to Canadian programming, life and culture.

2660 Second, we recommend that the Commission remove existing regulations requiring discretionary services to sell only national advertising. This restriction has become increasingly inequitable since the beginning of these proceedings, with an estimated 45 percent of subscriptions to the major U.S. streaming services now being for plans with ads.

2661 While these advertising regulations were originally intended to provide unique opportunities to conventional broadcasters, we believe that benefits no longer outweigh the negative impact faced by discretionary services. One of the most immediate ways the Commission can level the competitive playing field would be to allow specialty services to better monetize their audience by selling ads on a more targeted or dynamic basis.

2662 Third, to fully enable broadcasters to take advantage of new and untapped opportunities related to their existing audiences, a new regulatory framework must balance access to viewing and tuning data between platforms, distributors and programmers. Another direct way that a new framework can balance market dynamics is by providing all Canadian programmers with equal access to set top box and other tuning data that is currently being used by distributors and platforms.

2663 Pelmorex has felt firsthand the impacts of poor audience measurement. The latest numbers provided by Numeris’ ETAM solution show that The Weather Network’s audience is undermeasured by about 75 percent in the key 25‑54 demographic using traditional measurement. This presents a significant opportunity to better monetize The Weather Network and MétéoMédia, but it also highlights massive historical revenue losses because viewing to our programming was undercounted for so long.

2664 We believe that when combined, the ability to sell targeted ads based on accurate tuning data represents a significant opportunity for Canadian broadcasters going forward. In fact, we are currently exploring an initiative with a large BDU to do exactly that and can attest that actual tuning data to The Weather Network is as much as three times greater than as measured by Numeris’ ETAM system, and the opportunity to sell ads in a targeted and dynamic manner can increase revenue. At the same time, there are real challenges, both technical and administrative, that need to be overcome to make this work. We believe that the result will be worth it.

2665 We also believe that such initiatives should become the norm, not the exception; that they should be supported by a regulatory framework and industry collaboration; and that work to modernize the monetization of licensed broadcasters should move at a pace that counters industry upheaval.

2666 Thank you for your time. We are happy to answer your questions.

2667 THE CHAIRPERSON: Thank you very much for being here with us today. We will certainly have several questions.

2668 I will turn things over to my colleague Commissioner Abramson to lead the questioning.

2669 COMMISSIONER ABRAMSON: Thank you. Thank you for being with us here today.

2670 I was about to say I am going to start at a bit of a different place, and I will get there. It will be the question of data. But before that, I’m going to ask you a question we’ve been asking lots of folks. It’s simply about your big vision.

2671 If we do everything you say, what do you think the media landscape will look like in a few years?

2672 MR. EBY: I think the big vision for us is to have a linear feed, for broadcasters to have linear feeds and to be selling your advertising in a manner the way that Netflix, Amazon and Disney, the way they are selling advertising now, which is targeted and dynamic. So, you know, the big problem we face as a national broadcaster is when you sell an ad, it’s to hit a certain audience. And of course, our entire audience is not that demographic. So, you are really just selling a portion of the audience every time. With dynamic advertising, you are selling to every individual person.

2673 So, that’s part of the big vision.

2674 I think another bigger vision is access to our service on a streaming basis. It’s kind of the one thing we’ve never done at The Weather Network and MétéoMédia, is we’ve never offered the actual linear feed on a streaming basis. I think we would like to do that. We see that Rogers has launched its platform package they’re doing. We did reach out to them, and unfortunately they are not looking to carry us right now. We would love to just be there on the side; that if somebody wanted to click on and add us for 50 cents or whatever, we would get 22 cents of that, the regulated rate, or we could negotiate something.

2675 But just being there ‑‑ you know, if this is about flexibility and letting the audience decide, you have to be there so the audience can decide. And we would love to be there, and we would love to understand ‑‑ you know, we know who our audience is on TV. We would like to know where our audience might be on the big screen but in kind of a new format.

2676 That’s where we would like to see this go.

2677 COMMISSIONER ABRAMSON: So the big vision is put me in coach?

2678 MR. EBY: If it is about consumer choice and flexibility in the new market, you have to be there so they can make a choice, to be available. We would market ourselves. We could say hey, you can go get us over here. If it’s outside of the regulated system, we’re not as part of a mandatory basic package under 9.1(1)(h) or 9.1(1)(i), then yeah, we would love to at least have that opportunity to market ourselves and see how our viewers might want to engage with us. We know they engage with us in a number of ways and see if that’s another way.

2679 COMMISSIONER ABRAMSON: You have talked about having had some success in making your linear feed available on FAST channels, and so on. Do you want to speak a little bit to how that’s going?

2680 MR. EBY: We've had success getting access. Access has not been a huge problem for us on FAST channels. The monetization has not been great. On top of which, it’s not ‑‑ we don’t distribute the full linear feed on FAST. It’s a different linear feed. It has regional weather that kind of goes across the nation. It’s not the local weather feed. It’s not the premium service that was intentional.

2681 And then there’s additional costs to kind of make a service that’s not as good as the good service, and it’s really like it’s not even really a break‑even prospect on FAST right now. We had good success early, but there’s like a thousand FAST channels right now. That’s a tougher market. We don’t see FAST as the future. I mean, that’s not a great future.

2682 COMMISSIONER ABRAMSON: So it's not part of the vision.

2683 MR. EBY: Our vision has always been to be everywhere to see where consumers want us. If they don’t want us in a way that’s profitable, then it’s not part of the long term.

2684 COMMISSIONER ABRAMSON: Fair enough. You talk in your intervention about the costs of developing for different platforms and presumably customizing for each relative type of platform.

2685 Can you tell us either now or, if it’s confidential, by way of undertaking, about some of the concrete costs you face for the different platforms for which you have to develop?

2686 MR. EBY: Yes, we can take that as an undertaking for sure.

Engagement

2687 COMMISSIONER ABRAMSON: That would be terrific. Thank you.

2688 Let me now then do what I promised and go to the data discussion at the head rather than the tail of our conversation for a change.

2689 In your intervention ‑‑ and I was struck by the language ‑‑ you referred to the current situation with Numeris ETAM, which a number of folks at this proceeding have directed us to as an appropriate way of handling things, as an absolute structural failure for the broadcasting industry.

2690 Can you speak to that structural failure and why you think the failure is so total, and I guess what it is you are looking for in terms of more granular household level, more frequent data, that sort of thing?

2691 MR. EBY: To clarify, I don't think ETAM is a structural failure. I think it’s great. It helps us understand what we always thought to be true. It proves it. It’s better that it’s ten years from when it started as a structural failure. I remember being at a meeting before the pandemic when it was like ready to go, and one of the BDUs backed out of it. And we’re talking like another six years, I think, after that.

2692 So where we might be from a revenue standpoint and a sustainability standpoint might be very different today if ETAM had launched when it was originally supposed to launch.

2693 So, that’s a structural failure. I was saying this the other day. It’s kind of like when we get these numbers, and we can’t monetize these until I think September 2026, because that’s when it will become the currency. So it’s kind of like a piece of waxed fruit. Right? It looks delicious, but I can’t eat it. It’s just a tease.

2694 There is some stuff we can do with this. We can go to our advertising partners and say hey, when you buy us, you’re getting a great deal because you’re actually getting a bigger audience than you’re paying for. That could help us fill up our inventory, but it’s not the same.

2695 COMMISSIONER ABRAMSON: In the theoretical universe where we do as you ask, because you are here advocating your position, you would not hope that we follow the same process we did last time, is what I think I’m hearing.

2696 MR. EBY: Yes. Yeah.

2697 COMMISSIONER ABRAMSON: Could you tell us more about what you think we ought to do?

2698 MR. EBY: I have to wrap my head around like where does the CRTC fit in here.

2699 We are working with a BDU right now. There is a commercial arrangement. You heard Mr. Shaikh talk about that. It is the same BDU. So, we are working with Rogers on what is going to be kind of a new project, and we have an agreement with them and we are kind of pushing it through.

2700 But basically, we will run the linear feed through their X1 app and we will use dynamic advertising. So anyone who’s watching on that service will actually be able to test and use and sell dynamically, and then you’re not using your Numeris data to sell anymore. You’re using the information the same as you are selling the same way that we would sell on our website or our app. So, that’s very exciting.

2701 There’s some technical requirements. We’re pretty good technically. We’ll get past it. We have to engage a dynamic ad company to help us with the insertion and figure that stuff out.

2702 There is an administrative requirement that we kind of didn’t really see when we went into this. But like say you’ve got a couple of million viewers tuning to us, or whatever, like through the Rogers X1 app or any other partner we work with, and they are buying, advertisers are buying that differently. They are buying it programmatic direct. If we are selling ads to the rest of our audience, you know, people who are just watching on standard cable or satellite, or whatever, on like a national basis, we have the Numeris ratings, but we can’t sell based on those ratings, because we know a portion of that audience is watching different ads. And nothing exists right now, as far as we know, for us to figure out. We’re going to have to discount the national buy somehow that’s equitable. I think we can figure it out, and we probably have to be overly conservative on it, because you can’t charge a national client for audience that’s not delivered.

2703 So it’s just like, you know, you get into something new, and I think maybe we’re the first or second, like we’re one of the first ones to do this, and the second mouse gets the cheese usually. Like, we’re going to be up there trying to figure it out. But we think it’s worth it, because we’ve kind of got some information, and it shows a lot of upside, which is great.

2704 COMMISSIONER ABRAMSON: That's interesting. Thanks for sharing that.

2705 Is this a scalable model? Is it something that could become an industry approach?

2706 MR. EBY: We think so. We have the same app with ‑‑ like, it is the same app with Vidéotron, and we have an Android app that’s very similar. That’s on Eastlink and Cogeco right now. It’s not on Bell and TELUS. But I think if this worked and it results in, you know, a bit more revenue for the BDU as well, and we come out ahead of where we are now ‑‑ which we wouldn’t do it if we couldn’t do that ‑‑ that might help us get our app launched on the other BDUs. And then we would be covering most of the Canadian audience, ideally. So, it is scalable in that sense.

2707 COMMISSIONER ABRAMSON: Interesting. That follows up on the targeted advertising question on linear and traditional that I asked the previous intervenor.

2708 Some of the changes to the Broadcasting Act include new express responsibilities on us to see to the privacy of audiences.

2709 Can you speak a little bit about how that is built in? And more generally, what should consumers know about the data being collected about them? Should they know where it’s being shipped and stored, for instance?

2710 MR. EBY: To start, we have super high privacy rules at Pelmorex, like much, much higher than is required under PIPEDA and under any other rules. I think the Canadian communications companies do the same. Rogers or Bell, no one is going to engage with us in any way that would ever be anywhere close to being offside any privacy rule. I mean, that’s just not a question.

2711 I don’t know about whether consumers should know where it’s being shipped or stored, what would be required. They would understand it’s totally ‑‑ it’s anonymized data. If you’re doing the program direct placement, the computer is sending the ads where they need to go. Like I’m not picking like oh, that house likes this, or whatever.

2712 But this is all done through a high level of privacy protection.

2713 COMMISSIONER ABRAMSON: Okay, thank you.

2714 We are talking about advertising, and one of your three main asks that you focused in on in your presentation today is around changing some of our advertising rules to allow for all discretionary services, I take it, to be able to not stick to national advertising. I presume, in a way, that would be required to take advantage of targeted or addressable advertising, since by definition it’s not national. I’m not sure. Or maybe it relates to the brands.

2715 Anyway, you tell me where are we at and where are you hoping to take us.

2716 MR. EBY: So at the very least, there’s a bunch of different levels where this could work. Like we have seven programming feeds. So those exist so we could sell ‑‑ you know, we’ve got national English, national French, B.C., Alberta, Ontario. So, we could sell those separately. A lot of programming services don’t have that. They probably have one programming feed.

2717 On top of that, for our local weather feeds, we have like 500 of them. It used to be one signal went out, and this old PMX box put the local weather in at the cable headend. Now it’s all part of a stream that goes to the BDU. So, we could sell like those 500 feeds. We’d have to figure out the technology behind it.

2718 But at the very least, I think a lot of programming services, they could ‑‑ you know, if they’re sending a different feed to Rogers or to TELUS or to Québecor, they could at least sell those, which are generally more regional in nature anyway.

2719 Or they could work with the BDUs to send a different one to Bell Atlantic, Bell in Ontario. So, you could start selling ads at least regionally and not just nationally.

2720 COMMISSIONER ABRAMSON: Is that the sole reason you are looking for changes or would you hope, for instance, to sell different kinds of ad inventory in the shorter term, nothing to do with addressable advertising but simply accessing a broader inventory of potential advertisers?

2721 MR. EBY: That's exactly it. And it really kind of is ‑‑ there are kind of two parts.

2722 One, like when this hearing ‑‑ not this hearing, but when this process started about two years ago, ad tier on streaming services barely existed. I think Netflix launched theirs in November 2022. So, that wasn’t even something we were kind of grasping with. Now it’s like half of subscribers are getting ad tier, and these companies have no rules. They can sell whatever ads they want.

2723 So now we’ve got the conventional services. Obviously, I understand there was a rule, you know, for local advertising for them, and then you have these massive services, foreign services, that are selling whatever ad they want. Now we just kind of have this one category of Canadian discretionary service that is actually being held back, and that is, you know, the definition of an unlevel playing field. So, we see that.

2724 The other thing is we can do this addressable advertising project with BDUs, but it has to be through the app. And it’s taking us out of the regulated system, and it’s a workaround. And I just think it would be great if you could find a way to do it that it wasn’t a workaround and you actually could just do it under the rules.

2725 COMMISSIONER ABRAMSON: Do you have any ‑‑ in order to support the proposals that you are making, do you have any data, projections, anything that we can take into account in modelling some of the economics?

2726 MR. EBY: We don't at this time. I spoke with the sales team, and they said this is great and they would have to kind of wrap their head around it. But their position was there was lots of upside here, but we haven’t modelled it yet.

2727 COMMISSIONER ABRAMSON: No sense of how much money this would bring in?

2728 MR. EBY: No.

2729 COMMISSIONER ABRAMSON: Okay.

2730 Let me change the channel a little bit and talk about events of national and cultural significance, which you talked a little bit about in your intervention. I don’t believe it was one of your big three asks today, but we’re trying to fill out the record, and that’s one where we perhaps have less than other items you discussed.

2731 This is something that has been raised with a few different intervenors in this proceeding. Some of the things we’ve heard have really been around two themes. One has been towards the goal of ensuring that the most Canadians possible have access to particular programming, regardless of whether they are a subscriber or not to particular services, packages, whatever. The other has been about buttressing Canadian sovereignty, so about ensuring that, you know, it’s Canadians or Canadian services that are transmitting those programs to Canadians.

2732 To the extent that there is a problem here that needs solving, should we try and understand it under either or both or neither of those lenses? In other words, when we’re thinking about this, is this a question of availability? Is it a question of sovereignty? Where should we be looking?

2733 MR. EBY: Yeah, I think we have a limited ‑‑ we’re not grasped with this, but I think on its face we think without knowing what an event of national cultural significance is, but if there is an event and it is deemed to be of national cultural significance and it can be televised, then I think we philosophically think it’s an issue of availability. Like it should be available, and people should be able to watch it for free.

2734 I just think as a standard ‑‑ and I don’t know where that bar is set, but I think there’s certain things that may or may not happen that would be televised, and I think generally ‑‑ that’s kind of, you know, we’ve really moved away from that. Like I’m old enough to remember like every Blue Jays game was available on CTV. Right? And like that stuff was always available. It was always free. We had an antenna. And we’ve moved away from that. And to the extent that the Commission would want to define any events like that, I think availability is important. I think if it’s defined that way, then whoever is acquiring the rights would acquire the rights under that knowledge, and that might change how much they pay or don’t pay. Then they would still be hitting a massive audience that they could monetize through advertising.

2735 But this is really more a philosophical debate for us.

2736 We think that weather is of national cultural significance all the time, which is why we like to have our service available to everybody.

2737 COMMISSIONER ABRAMSON: But I suppose it is hard to corner exclusive rights in weather.

2738 MR. EBY: It’s very hard, yes.

2739 COMMISSIONER ABRAMSON: One can always try.

2740 MR. EBY: Yes, we do our best.

2741 COMMISSIONER ABRAMSON: Thank you.

2742 Let me turn back to one of your more central asks then, which relates to the approach that you would have us take on 9.1(1)(h) services, the combination of mandatory carriage, both on traditional and online platforms, appropriate on online platforms you’ve stressed, as well as a fund to make up the shortfall.

2743 Part of that obviously implies that we would then issue mandatory distribution orders as against certain online undertakings. Can you talk a little bit more about what that would look like, including the extent to which you see us enforcing good faith negotiations and what in that case might be meant by good faith negotiations?

2744 MR. EBY: I think we agree with the IBG submission on this with respect to good faith negotiations. I mean, there was a lot of feedback in the RFIs in the other proceeding very specific to this. You kind of get to a point where the question was asked of the streamers: “If they do make payments to 9.1(1)(h) or 9.1(1)(i) services under good faith negotiations, should that count against a contribution?” Ultimately, I think, yeah, that should count against what they have to contribute to a services of exceptional importance fund. Otherwise, if they have to do both, they’re not going to want to negotiate.

2745 So, I think one or the other is fine, and I think if they want to make direct payments, and then that would count against, then that also works. Like, basically you’re just trying to avoid double payment.

2746 COMMISSIONER ABRAMSON: And is there anything from your experience negotiation deals with online platform providers that we should take into account in thinking about how to approach this?

2747 MR. EBY: Well, I think the only experience we have with trying to negotiate the distribution of our linear feed was with one of the massive online distributors. It was they wanted to give our service away for free. Like, they wanted to make it free to all their subscribers. We were fine with that. We said we need to be compensated in a manner that we can show is either the same or similar or equivalent of the 22 cents per subscriber per month that the BDUs are required to pay us, because that was important. Right? Like, you don’t want to come up back for a licence renewal and then all the BDUs say, “Well, these guys are giving it away for free over here, right, and that’s not fair.”

2748 I think a lot of the conversation around this through these proceedings has kind of shown that the BDUs support 9.1(1)(h). They support these services being on online distribution platforms and that there being some kind of alternative compensation through a fund. And so, that opens the door to that. So, I mean, when we had that negotiation and we said what we felt we needed to be paid, it just died. We never heard back. Like, I get it. They wanted to give all news services away for free, but we weren’t available to be given away for free at the time.

2749 Given the potential audience there, maybe we would rethink it now and think, like, we could either monetize that through addressable advertising or even just keeping the PPM tone and that signal would have boosted our audience, so ‑‑ but that’s the experience.

2750 COMMISSIONER ABRAMSON: Okay. Maybe a little bit in the same vein ‑‑ you talked about discoverability challenges, especially when it comes to platforms with what I’ve been calling, in a bit of a throwback, “on‑deck applications” ‑‑ built‑in applications that come with the platform or service.

2751 Did you want to expand a little bit about some of the discoverability experiences you’ve had there, and why the IBG approach makes sense, in your view, as a remedy?

2752 MR. EBY: Yes. So, for us we, have access. We have been able to get access to many connected TV apps, et cetera. Prominence is the more important piece for us, and I will actually use an example outside of the system. I will use our mobile app as an example, because these are the same companies that are in the TV space now. When mobile came and there were apps, they were really just technology providers. They were platforms. It really was the stuff that ‑‑ what they’re saying now, which is not true ‑‑ it was true 10 years ago ‑‑ they were just platforms and you launched an app and people downloaded it. And so, our app was very popular.

2753 Now, all of the big platforms ‑‑ well, then they went out and they made a deal with The Weather Company US, and they put their app preloaded. Now they have their own weather app, Apple has their own, Google has their own. They put their weather app on the device.

2754 The Canadian carriers are not allowed to preload apps anymore either, and so, there’s a whole new level of competition ‑‑ and I’m not saying the CRTC should regulate that ‑‑ I’m just ‑‑ this is the example, but it is a prominence issue, and it is actually specifically a competition issue. And so, we don’t want to see that happen in the regulated broadcasting space.

2755 And we would want the Commission to know that that is what happened, and that that makes it much harder for us. We have to go get every download. It’s the equivalent of if you went to open a store in the mall, and there’s better real estate in the mall, but if they said, you know, “Commissioner Abramson, we love your clothing store, and where we’re going to put it, the customer has to walk through Banana Republic first to get into your store.” And that’s what we have now, with the preloaded apps.

2756 And so, we don’t want to see that become the norm on TV, like, you know, that the Rogers folks brought it up ‑‑ we put it in our submission. I took a picture of my Amazon remote at home that has two Amazon buttons and a Netflix button on it. Right? And this is just the most extreme example of prominence being bought and paid for by the largest companies.

2757 COMMISSIONER ABRAMSON: And just to come full circle, falling out of what you just said, when you are on one of these six or seven major TV operating systems or platform providers, what data do they have access to about people who are using your app?

2758 MR. EBY: Do they have, versus us?

2759 COMMISSIONER ABRAMSON: Yes.

2760 MR. EBY: I assume extremely granular. I mean, they know everything. These platforms are constantly asking ‑‑ the one at my house is asking me to make sure ‑‑ like, can I give them more data and let them track more of what I’m doing? I think in large part for these companies, which are ‑‑ you know, Amazon was a package delivery company and now all of a sudden it’s one of the biggest players in TV; right? Like, it’s because data about every interaction with the consumer is kind of the biggest play, and they and Disney ‑‑ and when we submitted this, built these services. Their programming services were losing literally billions of dollars a year, for years and years and years ‑‑ like, money that the whole Canadian system could not absorb losses like that ‑‑ because they have other ways to make money outside of just people watching their programs, and a big one, I think, is the data they have access to.

2761 COMMISSIONER ABRAMSON: Thanks very much.

2762 Madam Chair, those are my questions.

2763 THE CHAIRPERSON: Thank you, Commissioner Abramson.

2764 I will remember the Banana Republic analogy. That was very visual. Thank you.

2765 Conseillère Paquette, s’il vous plaît.

2766 CONSEILLÈRE PAQUETTE : Bonjour. J’ai deux questions. La première… J’ai trouvé extrêmement intéressant l’exemple du Banana Republic, parce qu’on sait que Weather Network et MétéoMédia ont des activités très, très importantes en ligne. Je pense que votre site Web est extrêmement populaire ainsi que vos applications. Je me demandais : quelle est la portion de vos affaires qui se font en ligne par rapport aux modèles plus traditionnels de la télé linéaire? Si vous aviez à donner un pourcentage.

2767 MR. EBY: Can we provide that in an undertaking? Because, as a private company, we don’t make our financials public, but we would be happy to share.

Engagement

2768 CONSEILLÈRE PAQUETTE : Bien sûr.

2769 And I also wanted to hear you more on the dynamic advertising ‑‑ this topic that you discussed. I wanted to know, can you tell us more about how you see the future in this regard? Like, what would be the perfect model of dynamic ad insertion for the whole TV ecosystem, including online services? And do you think that the experience ‑‑ as an example, what you are doing with Rogers right now, which is to advertise on linear feeds ‑‑ do you think this could be the second chance for linear TV, that it could bring a second wind, or not?

2770 MR. EBY: Yes, from the numbers we got with Rogers, when we looked at it, we see a lot of upside, even when you make a commercial arrangement, we see room for the partner to get paid, and then we come out ahead. So, definitely. I think ‑‑ you know, like I said before, we have this app with Rogers, we have on the same platform with Vidéotron, and we have one on another platform ‑‑ you know, with other BDUs.

2771 Ideally, you could set it up that you’re kind of just handling it through one direct programmatic sales interface, to insert. Because otherwise, you’re going to have to have some staff to traffic the ads for Android versus X1 or versus whatever else, but ideally, if it was the whole audience, that makes it a lot more elegant.

2772 Like I said, when it’s not the whole audience, you’re selling partially with information that’s generated in real time from the digital distribution, and then you’re selling the rest using Numeris data, which is different, and you’re constantly balancing those to make sure you’re getting the right numbers. So, it would be great, at some point in the future, if all sales were conducted this way.

2773 I remember coming to proceedings here ‑‑ I’m not joking ‑‑ like, 15 years ago ‑‑ I think when Konrad von Finckenstein was the Chair at the time, and Rogers and other BDUs talking about dynamic ad insertion and saying, like, you could get a different ad than your next‑door neighbour gets, based on preferences and stuff. And so, this has been discussed for a long time, and it’s real. We see it ‑‑ you know, I don’t know what Rogers does on their SportsNet+ app; like, I watch the baseball game on there; I assume I’m getting different ads than other people. So, people are doing it in Canada. We know definitely the streamers are doing it, and there’s higher value to serve the whole audience.

2774 We have a really interesting audience that both watches the channel, and sometimes people leave it on all day; other people do it in 10‑minute durations. So, you’re verifying the delivery of an ad as opposed to with Numeris, you’re kind of just playing averages. So, that’s where the upside is.

2775 COMMISSIONER PAQUETTE: Okay. Thank you very much. Merci.

2776 LA PRÉSIDENTE : Merci. Je vais demander à nos services juridiques de confirmer l’engagement, s’il vous plaît.

2777 MS. O’TOOLE: Will you please confirm that you undertake to respond to Commissioner Abramson’s question regarding development costs for the different platforms you are on, by July 18th? And additionally, will you please confirm that you undertake to respond to Commissioner Paquette’s question regarding the percentage of your business that is done online as opposed to the traditional broadcasting system, by July 18th?

2778 MR. EBY: Yes.

2779 THE CHAIRPERSON: Thank you very much. Thank you for being here with us today. We appreciate your participation, and we wish you a very good Friday. Thank you.

2780 Madam Secretary?

2781 THE SECRETARY: I now invite Spotify to come to the presentation table, and we will connect to Zoom.

‑‑‑ Pause

2782 For the participant appearing online, can you hear us correctly?

2783 MR. FAUCHET: Yes, I can hear you correctly. Thank you.

‑‑‑ Pause

2784 THE SECRETARY: When you are ready, please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

2785 MS. MANNING : Bon après‑midi. Je suis Xenia Manning, directrice de la politique mondiale pour la Musique chez Spotify. Je suis accompagnée de mes collègues. Ici, à ma droite…

2786 MS. PHIPPS: Liz Phipps, Lead, Artist and Label Partnerships in Canada.

2787 MS. MANNING : Et à ma gauche…

2788 MS. LOTT: Ashley Lott, Senior Legal Counsel.

2789 MS. MANNING : Il nous accompagne à distance…

2790 MR. FAUCHET: Raphael Fauchet. I am Director of Publishing Licensing.

2791 MS. MANNING : Nous vous remercions par avance de nous laisser témoigner devant vous aujourd’hui. Je vais continuer en anglais.

2792 We are pleased to share with you the benefits that Spotify is bringing to Canadian artists, songwriters, rightsholders, and fans. After piracy decimated the music industry for 20 years, the industry is thriving again. Today, Canada’s music streaming market is a success story. Since Spotify launched in Canada over a decade ago, the industry has seen a decade of uninterrupted, record‑breaking revenue growth. Between 2019 and 2024, the royalties earned by Canadian artists on Spotify nearly doubled, reaching 460 million Canadian dollars in 2024 alone. That’s more than the entire commercial radio industry contributed that year. It is proof that when the right service exists, consumers are willing to pay, and artists can thrive.

2793 So, we ask you today ‑‑ don’t fix what isn’t broken. Scale what is working. Spotify is the largest payer of music royalties globally ‑‑ and in Canada. This shared success ‑‑ where roughly two‑thirds of our music revenue goes directly back to rightsholders ‑‑ is fueling renewed investment in Canadian and Indigenous artists. The key point is this: streaming royalties are the primary engine for music production and financing by labels and publishers.

2794 Some describe royalties as simply the “cost of doing business”. We don’t dispute that, but more importantly, they represent the resources that enable producers and publishers to reinvest in Canadian talent. They support artist and songwriter development and allow rightsholders to take creative risks. No grant system can match that scale of investment. To apply yesterday’s tools to today’s platforms risks dulling Canada’s success on the global music stage.

2795 The Broadcasting Act gives the Commission the authority to regulate, but not a mandate to intervene in all cases. It is essential to assess whether a real problem exists that justifies regulatory intervention. In our view, the evidence is clear: there is no market failure in audio streaming that would warrant intervention by the CRTC. And when it comes to the discoverability and promotion of Canadian artists on audio streaming platforms, the data shows that market forces are working.

2796 First, 80 percent of Canadian music streaming service users report that they can easily find music by Canadian artists.

2797 Second, Spotify delivers 1.3 million hours of daily listening for Canadian artists in Canada ‑‑ and 15 million hours globally ‑‑ every day. That level of reach is unmatched by traditional broadcasters and likely any other service that is currently subject to the CRTC streaming levy.

2798 Third, Spotify empowers Canadian artists with free access to audience data, analytics, and promotional tools ‑‑ helping them bypass traditional barriers and take control of their careers. We equip all artists with the tools to find success.

2799 Furthermore, many proposals in these proceedings treat audio streaming services as if they were traditional broadcasters or video distributors. They are not. The business models are fundamentally different, and regulations designed for one cannot simply be applied to the other. Regulating Spotify like a radio station is like regulating Uber like a horse and buggy.

2800 It is also important to acknowledge the Cabinet’s policy directive to minimize regulatory burden. Overregulation in a thriving market doesn’t protect Canadian music ‑‑ it threatens the very foundations and mechanisms that are working. Spotify is not like other broadcasters. It’s an amplifier ‑‑ for every voice, in every corner of Canada, and globally.

2801 We encourage the CRTC to build on the success of streaming. Let’s protect the future of Canadian music ‑‑ not through regulation, but through partnership, innovation, and confidence in the power of artists and audiences to connect.

2802 Merci encore de nous avoir donné l’opportunité d’être ici aujourd’hui. Et nous sommes disponibles pour répondre aux questions. Merci encore.

2803 THE CHAIRPERSON: Merci beaucoup. Thank you very much. We are thrilled to have Spotify in front of us today. Just a reminder of course ‑‑ this is not a copyright hearing, so we will probably not ask many questions about royalties; it’s a different conversation, and we also have an upcoming hearing to deal with audio policy in September. So, we do hope you will be part of that conversation as well, because I think you will probably be quite informative for us.

2804 I will turn to my colleague, Commissioner Levy, who will lead the questions. Thank you.

2805 COMMISSIONER LEVY: Thank you. Thank you very much. Spotify has such an interesting history. Twenty years or so you’ve been in existence, I think. And you’ve been really one of the pioneers in the online system. And I wonder, what insights you have gained over that time and that experience? You are now in 180 countries, apparently. So, what are the key things that you’ve learned create success in the online world?

2806 MS. MANNING: Thank you, Commissioner, for the question.

2807 It has been a great story and a great journey for the music streaming ecosystem starting with Spotify. I want to make sure that everybody understands that Spotify did not invent the model of having access to any music one wants anywhere. Actually, piracy ‑‑ music piracy did.

2808 What Spotify brought to the ecosystem is a legal service that creates a possibility for rightsholders and artists to thrive in an environment where there is access for consumers to any music they are interested in, instantly, anywhere in the world. This is where we pioneered the business model of legal access to streaming. That was very much the mission of our founder ‑‑ to provide that opportunity for creators to find a legal place and a legal business model that works.

2809 So, what we have learned over the 20 years ‑‑ well, almost 20 years ‑‑ is that we need to partner with rightsholders and offer consumers an attractive proposition, and that’s why we have the so‑called premium model where consumers can access Spotify for free, at an ad‑supported tier, discover how good it is at meeting their interests, their discovering new music, personalizing the service ‑‑ and we are trying to convince consumers to upgrade to the paid tier. This has been working so well that, over the course of Spotify’s existence ‑‑ and especially looking at the last decade, the music industry has seen a true renaissance ‑‑ a real turnaround in its fortunes.

2810 So, just looking at the last decade, the revenues of the music industry 10 years ago were basically half of what they are today, not more. For Spotify alone over the last decade, our payouts to the music sector have increased 10 times ‑‑ tenfold. Last year, Spotify paid 10 billion US dollars to music rightsholders globally. That is more than any other single company has ever paid, in the history of the music industry. We think this is a great success, a great testimony to Spotify and streaming working.

2811 And the fact that we now have 678 million users in 184 markets around the world creates great opportunities for artists from Canada and other countries to find new audiences and niches ‑‑ and that opportunity for artists and audiences to connect, and for a business model to work, is the main insight we’ve had.

2812 But this has happened organically, and it’s happened without regulatory mandate for us to reinvest in what we’ve been doing in the form of, for example, reinvesting a lot into the music team of Spotify, and I do want to pass over to my colleague from the music team to tell you a bit about the journey of Spotify in Canada. We’ve been here for 10 years, and we definitely have some lessons to share about how it’s worked for 10 years.

2813 MS. PHIPPS: Thank you so much.

2814 As my colleague alluded to, 10 years ago ‑‑ over 10 years ago, when Spotify launched in the market, the Canadian music industry looked very different. Piracy was still very much a thing, and Spotify came into the market with the mission to raise up the Canadian music industry and give back directly to the artists. And we have done that vis‑à‑vis several programs ‑‑ which I can speak to, of course when the time is right ‑‑ to support a diverse range of voices and creators across the country.

2815 We have a music team of six in Canada, a third of which are francophone, and that team is made up of partnerships which I lead. We are in the market, on the ground every single day, interfacing with our labels, with our artists and managers directly ‑‑ publishers, songwriters, industry associations, and the like. And then, we have our editorial team, and their job is to listen to, I would say, five to six hours of music every single day and empower Canadian artists on platform.

2816 At the end of the day, our common denominator between the two teams that makes up this diverse music team is that we are all huge music fans. We have very different backgrounds coming from labels, coming from journalism, but at the end of the day we are here and we believe in Canadian artists and we want to help support their careers.

2817 MS. MANNING: Just to add, we have also learned that with this streaming model working in Canada, artists and rightsholders in Canada can thrive.

2818 We do want to put on the Commission’s record in these proceedings as well some of the statistics that we already included in our May submission to the audio policy consultation. And, in particular, statistics such as the fact that over the last 10 years the revenues of the recorded music industry in Canada more than doubled.

2819 Now, 80 per cent of their revenues come from streaming and this growth has been driven by audio streaming, and especially the paid version of audio streaming. So this is really testimony to success.

2820 Similarly, Statistics Canada that we alluded to in those submissions, these are statistics showing the recorded and music publishing industry revenues in Canada, and the fact that they grew over the last 10 years, both at the level of revenues and operating profits.

2821 Thank you.

2822 COMMISSIONER LEVY: Thank you. When it comes to statistics and so forth, I wonder about discoverability. Because a lot of artists still claim that they’re having a hard time getting to a place in Spotify where they can really maximize their art.

2823 Do you share data on a regional or national level that could give them some comfort that they are in fact being noticed and noted, and is there data that you can provide that can give them that kind of comfort?

2824 MS. MANNING: Thank you for this question. Discoverability is crucially important to our business model and to the value proposition that we want to bring to both consumers and to artists. Spotify wants to be the best home for creators online.

2825 So what we make available to creators is something called Spotify for Artists, and I will ask in a moment my colleague to talk more about it. But this is a data analytics and insights platform which enables every artist who uploads music or provides music to Spotify to have insights exactly into how their music is streaming, where it’s streaming, different types of data in terms of the demographics, and we will discuss this with colleagues in a moment.

2826 So they have very detailed information about that. And this is so important, because it enables artists to plan their careers in terms of deciding where to channel their resources, their marketing plans, who to partner with, how to plan their touring, and they’re also resources enabling them to actually personalize and market themselves directly to their fans. I will had it over to colleagues.

2827 But I do want to stress that those resources are part of our operating costs. And, as I mentioned, the business revenue share model that we have means that out of every dollar of music revenue we pay out two‑thirds of it to rightsholders. And then we have to live and work on the remaining one‑third to provide resources.

2828 So, Liz, could you talk about Spotify for Artists and the data?

2829 COMMISSIONER LEVY: It's actually not so much for the artists, but in order to show that they can attract audience. The aim is to enable the public to assess and arrive at their own conclusions about what’s popular and so forth. Because, obviously, that will attract more people to listen to certain forms of music.

2830 So it’s being able to show that your music is popular enough that people should give it a listen. So it’s a more overarching look at data than just the artists specifically.

2831 MS. PHIPPS: Yes. Thank you so much, Commissioner, for asking the question.

2832 As I mentioned, we have a team of editors in Canada, they’re also tapped into the global editorial team. And in terms of, you know, we talk about the word “popular,” and I think that has a lot of definitions within the Spotify ecosystem.

2833 Because, truly, at the end of the day, there are humans behind the editorial playlists that are being curated in a lot of cases. And out of Canada alone, they are programming over 100 playlists, and that are getting updated regularly. These playlists cross genres, they cross moods, moments, decades. So, really, there is something for everybody. You can even just search in a series of words into your Spotify search bar and, you know, you’ll be able to find whatever you’re looking for as a listener.

2834 I will say too that over 25 of these playlists are solely Canadian artists, which we’re extremely proud of.

2835 And just to, you know, touch on my colleague’s point about the Spotify for Artists, one of the key buckets of data that helps to inform labels and artists, and really Spotify for Artists is a toolkit, it is a free toolkit available to artists directly, you know, whether you’re going through a label or you’re independent.

2836 One of the things that we can look at is where listeners are listening from, where an artist’s particular songs are being playlisted. So they have full transparency into the journey of a particular song on platform.

2837 I will say that Spotify was the pioneer in providing this level of transparency with data, and we’re very proud to be able to offer that to the artists, but also to the listeners as well.

2838 COMMISSIONER LEVY: So do you publish a list of content that’s available on the platform and identify which is Canadian?

2839 MS. MANNING: We have hundreds of millions of recordings, music recordings, on the platform. So we do not have a way of identifying and listing that content to any one user.

2840 What we do is a deeply personalized experience, which helps the users to discover various types of content that they’re interested in.

2841 I just wanted to come back to this notion of popularity, because it’s really important. I would invite the Commission to have a broader notion of what popularity means in the online context, in the interactive context.

2842 Back in the analogue days, artists who wanted to be popular in Canada, for example, placed on the radio, would likely need to be providing music that is in the mainstream of the music genres.

2843 With audio streaming, with platforms like Spotify, there is actually diversity of voices that has never been as big as now. There are possibilities for artists to stay true to their artistic vision, because they know that their art can be commercially viable because they can find niches and listeners across different countries.

2844 If you look at Spotify for Artists and Spotify Loud & Clear report, and we are the leaders in the market in making this level of information publicly available, you will find that many artists who have had generated over $100 million, or $1 million, in revenues last year they were not amongst the top charts. They were actually having catalogue from early years.

2845 So one doesn’t need to be popular in a chart system in order to succeed in an audio streaming economy, and on Spotify in particular.

2846 COMMISSIONER LEVY: But you still need a lot of listens to make a dollar?

2847 MS. MANNING: It depends on the market but, yes. And we have many many listens, or streams, on our platform. We are aware that Spotify is actually the most ‑‑ users of Spotify are the most engaged, compared to other streaming services. That is testimony, in our view, to the fact that our services are meeting the consumer demand, and this is what we want to invest in.

2848 COMMISSIONER LEVY: How do you define something that’s ‑‑ a song that’s listened to? Does it have to be listened to for the first 30 seconds, the whole way through? How does the meter tick over for a particular song?

2849 MS. MANNING: Yes, for the vast majority of recordings, 30 seconds is the measurement that we use to count that as a royalty bearing stream. There are some variations for specific subgenres like, for example, noise music, the music you sleep to. But, yes, 30 seconds is the basic stream.

2850 I don’t know, Ashley, if you have any additions to that?

2851 MS. LOTT: No, I was going to agree with what you said.

2852 COMMISSIONER LEVY: What is your opinion on making publicly available the international standard recording code chart rankings for the most listened to music, for example, top 10,000 songs in Canada, or top 5,000 Canadian songs, or top 5,000 francophone songs, or top 5,000 non‑Canadian songs listened to in Canada?

2853 Do you have any views about providing that kind of data?

2854 MS. MANNING: Thank you for the question. I think the data disclosures always depend on what kind of insights are we looking for. The main point for us is that analogous streaming is suddenly delivering new reach for Canadian artists, including Indigenous artists, like they’ve never had before.

2855 And I do want to come back to the statistics, the daily statistics, showing that 1.3 million hours of music by Canadian artists are streamed everyday on our platform. That volume in itself is, to us, much more important as a data point, as an insight, than whether the top particular 10,000 recordings have the following ISRC codes or different ones.

2856 This is about growing that exposure, and the royalties with it, for Canadian artists. This is the primary thing that we want to encourage. And we are transparent about the streaming share and the payouts in that respect, that’s why we published the data in Loud & Clear.

2857 COMMISSIONER LEVY: Thank you. I am just going to ask one last question, and it has to do with something you said in your presentation. You said, “We asked you today, don’t fix what isn’t broken, scale what is working.”

2858 So if we’re going to scale what is working, what would be the most important thing that we could do to help scale the industry in a way that would help us to achieve the objectives of the Act, of the Broadcasting Act?

2859 MS. MANNING: Thank you so much. This is a great question. We would love to have an in‑depth conversation about it.

2860 But the two main points where the Commission might be able to help us scale is, firstly, Spotify, as I said, wants to be the best home for creators. And we’d love to have a strong and active music team.

2861 I will pass it to my colleague to talk about what we engage in in terms of working with artists and what we would like to see supported, because we need to get scale.

2862 But, secondly, we will also want to talk about price and the fact that obviously there are many regulations that can impact the way in which we compete. We certainly want to see a friendly regulatory environment that would enable us to keep scaling, keep growing the music business. Because, ultimately, given the revenue share model we have, the main beneficiaries of that growth will be the music rightsholders.

2863 So, Liz, over to you.

2864 MS. PHIPPS: Thank you so much, Xenia. Contributing to the discoverability of artists, especially new and emerging artists, is the core mission of the music team at Spotify Canada. To be able to be out there in the industry, and community is our north star for the team this year, is so important.

2865 Six people on the music team might sound like a lot, but when you’re working across an entire country overseeing not only partnerships, but editorial as well, we always can use more resources.

2866 Just recently, less than 24 hours ago, I was in Montreal where we sponsored les Francos de Montréal, which is the largest free francophone music festival in Canada. And, really, our time there was multifold.

2867 So not only are we a big sponsor where we have a Spotify stage and we have a curated list of 80+ francophone artists that perform on that stage, but it also allows us an extended period of time to be in that market and to meet with our francophone artists and label partners.

2868 The feedback that we get from them is emotional, to be honest, when we’re sitting with labels, whether it be Mothland is one based in Quebec, Coyote Records is another one that we met with this week, and they say to us, thank you, thank you so much for coming, for spending the time with us. They play some new music, and truly it’s the best part of the job.

2869 Having more resources to be able to do that, and we can see and really support our diverse community of artists in Canada, is honestly why we do our jobs every single day.

2870 MS. MANNING: Just to add, we are not asking for any resources from the Commission. But the single best way in which the Commission could help us have the resources for Liz’s team to work on the ground and scale what they’re doing is to rethink the streaming levy.

2871 We are seeing very difficult trade‑offs that have to be made in that space for us to be able to continue investing in Canada at the scale that we want to be able to do it. And we are a pure play music service, by that I mean a service that offers nothing but content. We do not have any other line of business.

2872 We’re not selling hardware, we are not selling other services. So we do not have a different line of business that we could fall back on to essentially cover these costs. This is why trade‑offs, hard trade‑offs have to be made.

2873 Thank you.

2874 COMMISSIONER LEVY: I think that’s all I’m going to ask. I think I have a colleague who wants another question. Thank you. Thank you very much.

2875 THE CHAIRPERSON: Thank you, Commissioner Levy. I will turn to Commissioner Abramson.

2876 COMMISSIONER ABRAMSON: Thank you, and thanks for being here with us today. We’re glad to see you here in Gatineau.

2877 In your intervention you talked about market failure ‑‑ or, sorry, in your speech today you talked about market failure. And, in your intervention, you use different language, I think more around the goals of the Broadcasting Act.

2878 Our job is sort of in between the two, right? We’re tasked with looking at the different goals that the Broadcasting Act assigns to the Canadian system, and seeing how it’s doing. And when broadcasting markets do not result in the conditions described in those goals, then we’re supposed to intervene.

2879 So when you say the evidence is clear, there is no market failure, with that kind of in mind, that our job is to ensure that the conditions in Section 3(1), which is really the one called Broadcasting Policy for Canada, which you talked about in your intervention, when you consider that our goal is to make sure those are being meet, what sort of evidence should we be relying on to ensure that there is no market failure of that type?

2880 MS. MANNING: Thank you for the question. If we are looking at broadcasting undertakings within the online audio streaming world, we think and invite you to look at the competition between those streaming services, which is working very well, as evidenced by the fact that consumer satisfaction with the type of offers they are getting in Canada is very high.

2881 I have referred to the survey of Canadian audio streaming consumers, which shows that 85 per cent of Canadian consumers are satisfied with the audio streaming services with how much Canadian content is available to them on such services and how it’s recommended to them.

2882 In addition, 80 per cent of those users are also satisfied and think that it’s easy to find Canadian content.

2883 So that is, to us, relevant insight into whether these undertakings are meeting some of the main policy goals of the Broadcasting Act.

2884 In addition, we would definitely invite the Commission to look at the commercial results of the recording industry and the publishing industry in Canada, and evidence of uninterrupted growth for over a decade, which is driven by streaming, in the revenues and profits of those rightsholders. That’s very important for the reasons I explained in the written testimony. That’s what fuels reinvestment in Canadian talent.

2885 And having a lot of resources dedicated to investment in Canadian talent, again, is one of those important policy goals of the broadcasting policy. So these mechanisms are working.

2886 Thirdly, the reach, so the fact that regardless of the monetary aspects, there are more Canadian voices, more Indigenous voices, that are reaching an audience, both within Canada and globally, it’s a fantastic testimony to success and to the fact that the objectives of the broadcasting policy are being met.

2887 So there are many data points that, in our view, show that these market forces are working. And, yes, there is obviously the power to regulate, but we hope that it will be used when there is clear evidence that policy objectives are not being met, and the only way to meet them is through no other less intrusive means than regulation, which we submit is not the case here.

2888 COMMISSIONER ABRAMSON: Thank you. I just want to double check. You mentioned some surveys and so on, do we have those on the record of this proceeding?

2889 MS. MANNING: They are in the record of our response to the audio policy proceedings in our submission from May 2025, which I will have to put on the record in these proceedings as well.

2890 COMMISSIONER ABRAMSON: Okay.

2891 MS. MANNING: These are recent surveys, which is why we did not provide them.

2892 COMMISSIONER ABRAMSON: Legal, do we need an undertaking for them to file that, or...? Sorry.

2893 MR. WILSON: We don't need an undertaking. They could file either through an RFI or with their final written submissions, if the Panel is agreeable to receiving those surveys.

2894 COMMISSIONER ABRAMSON: Yes. Maybe if we can just ask you to append it to your final submissions so that, you know, we have what’s from that proceeding on this proceeding to the extent it’s relevant, and I’m sure we’ll admit it. As you know, these are separate proceedings and we’re bound to work based on the record of each.

2895 Let me ask you about sort of Canadian content and your ability to know what it is. You talked about the many pieces of music that you deal with. Luckily, we have computers that are able to deal with large amounts of data quickly these days, so that’s helpful

2896 You know, you work in metadata. Is what you’re really saying that there’s the absence of a particular metadata field that you can adjust somewhere that would allow you to tag ISRC codes to some intermediate field no doubt which would eventually lead you to a definitive tag as to what’s Canadian and what’s not?

2897 MS. MANNING: Thank you for the question, Commissioner. I think it’s a really interesting topic, and I completely agree that metadata is crucially important.

2898 So let me clarify what we can do and what we cannot do. So we can identify, thanks to people like Liz and the music team, the Canadian artists. That obviously does not involve checking their immigration status, but it is through the day‑to‑day work that Liz’s team does that we gain knowledge of at least the professional and the professionally‑aspiring group of Canadian artists about such as the fact that they are Canadian.

2899 And there are ways in which artists can actually provide that information on their Spotify for Artists profile. There are other ways in which that information can be gathered.

2900 What we cannot identify is the Canadian musical selection concept. So that notion, be it through the MAPL definition or even variations of the MAPL definition that are discussed in the audio policy proceedings is not something that we can identify. Why? Primarily, because the metadata that are gathered by the music rightsholders themselves do not include information about artist nationality.

2901 I would like to put on the Commission’s record the admission by SOCAN in the audio policy proceedings that SOCAN does not collect information about the nationality of songwriters and lyricists whom they represent. So that information is not provided to us. SOCAN even does not have that. And that's obviously half of the definition as it stands.

2902 Similarly, the ISRC code, which is assigned to every recording, every sound recording when it's uploaded to Spotify, it does not involve any information about the nationality of the artist who performs on that recording or the nationality of the recording itself, however that would be defined, or the nationality of the composers and lyricists whose composition is being performed in that recording. That is just not part of the existing metadata. And it's not within our control to provide any additional information. It really would have to come from rights holders.

2903 And I do want to stress an equality point here. As I said, music streaming has democratized access to our platform and other streaming platforms. That means that a kid in the northern territories of Saskatchewan or wherever can upload to Spotify indirectly for a distributor their first ever sound recording. They might not have been signed to a record label that tells them how to deal with metadata, what additional information to supply. But that creates possibilities. That creates access. And it's especially important, perhaps, for people who come from minorities. And I will hand over to my colleague Liz to talk about the work that she's doing and her team are doing with Indigenous artists in Canada.

2904 COMMISSIONER ABRAMSON: You know what? While I would like to hear it, maybe you can include it in your final reply. We are a little bit short of time, and I want to focus only on elements that respond directly to my question.

2905 MS. MANNING: Certainly.

2906 COMMISSIONER ABRAMSON: Here what it sounds like is there's a lack of data.

2907 MS. MANNING: Correct.

2908 COMMISSIONER ABRAMSON: And so there is perhaps ‑‑ and Spotify is not the only one, obviously, to highlight this. Many Canadian radio stations have done the same. It sounds like there is a gap in designating trusted publishers of data sets identifying which IPI codes, which IPNs are Canadian so as to have the data set in order to programmatically tag ISRC codes as qualifying as Canadian content, Indigenous content, and so on. So that's a data gap that we'll take back.

2909 Last question: you mentioned music publishers. As you may know, the Association des professionnels de l'édition musicale, the APEM, was up, and they had a fairly specific ask around data access which they were hoping I suppose to collaborate on with platforms like Spotify in order to identify their view, I suppose, of whether or not there was market failure as I described it earlier. Is that something you've had discussions with them about, and is it something that you're able to collaborate with them on?

2910 MS. MANNING: Thank you very much for the question. I want to stress that Spotify is the pioneer of transparency and the information we provide to the music industry as a whole, including the music publishing world, is highest of our peers. We have actually a dedicated subsection of the Spotify for Artists platform dedicated to songwriters where there's a lot of information available at the individual level. But I will hand over to my colleague Ashley to take you through some of the mechanics of that request.

2911 MS. LOTT: Sure. I think it would be very helpful to sort of understand the details of what they are looking for. But I do know that we are very transparent in the data that we provide, as my colleagues have said. Our Loud And Clear Report that comes out every year was the first of its kind from a transparency perspective. Spotify for Artists, all of these different platforms for our various music industry partners all have lots of data for them to access. And so we are very pro‑transparency with our partners.

2912 But of course, we have to be sure that we are staying within the confines of privacy law of other contractual obligations that we have to maintain confidentiality, so there are parameters that we have to keep in mind.

2913 MS. MANNING: So just to confirm, all of the APEM members who represent songwriters who have access to Spotify for Artists, the songwriting account, there's nothing that stops those writers from providing that information to APEM as a trade association, and ‑‑ if they feel comfortable with doing so ‑‑ and that way enabling APEM to obtain the information at an aggregate level.

2914 But we, as a platform, need to respect artist choices and their decisions over how they want their data about their streams to be handled.

2915 COMMISSIONER ABRAMSON: Thank you. I appreciate the transparency. I appreciate your view that data sets that you put out result from the choices that artists have made and communicated to you.

2916 You asked exactly what they're looking for, and I believe, you know, I don't want to get in between relationships between different intervenors in this proceeding, but I see that it's set out at pages 22 to 23 of their intervention in this proceeding. Fortunately, I can confirm that there is no personal information listed on it. But in any case, I leave that to you and to the APEM. And if either of you make progress in that area, I'd invite you to update us in your final replies.

2917 Thank you. Those are my questions.

2918 THE CHAIRPERSON: Thank you very much, Commissioner Abramson.

2919 So I just want to confirm that in your final replies you will provide the surveys that you referred to in this discussion, if that's okay with you.

2920 MS. MANNING: Certainly. We would be happy to.

2921 THE CHAIRPERSON: Wonderful. Thank you so much. It was most informative. This concludes our question period, so we thank you very much for coming here in person. It's always much appreciated. And we wish you a very happy Friday.

2922 MS. MANNING: Thank you, merci.

2923 MS. PHIPPS: Thank you.

2924 THE CHAIRPERSON: Merci beaucoup. Merci.

2925 Madame la secrétaire?

2926 THE SECRETARY: I now invite Forum for Research and Policy in Communications to come to the presentation table. When you are ready, please introduce yourself, and you may begin. Thank you.

Présentation

2927 MS. AUER: Good afternoon, Commissioners and Commission staff. I am Monica Auer, the executive director of the Forum for Research and Policy in Communications.

2928 FRPC is a not‑for‑profit organization that has focussed on the public interest through empirical and legal analyses of broadcasting and other issues since 2013. In this proceeding, we define the public interest in broadcasting by section 3(1) of the Act.

2929 As you have the Forum's written submissions, I will use my five minutes to address concerns raised by comments made earlier in this proceeding.

2930 Madam Chair, you noted on the first day of this proceeding that “l'industrie canadienne de la radiodiffusion se trouve aujourd'hui à la croisée des chemins.” We agree, but note that the introduction of television in the late 1940s, cable TV in the 1950s, videocassette players in the 1980s, and “deathstars” in the early 1990s all raised the same speculative fears and nearly identical arguments for deregulation and incentives.

2931 You also noted, Madam Chair, that the “aim of [today's] exercise is to gain a better understanding of current issues and ... to establish a regulatory framework that is tailored to this new reality.”

2932 From our end, the problem is that understanding any complex question requires not just speculation and argument, but facts: 2025‑2 lacked objective evidence as to where the broadcasting system was before it reached today's crossroads, where the system is now and, above all, where the CRTC, on behalf of Parliament, believes the system should be going. Consequently, participants in this proceeding have no way of knowing the case they must meet.

2933 Yet, as you also said, Madam Chair, this proceeding should “ensure that Canadians have access to diverse programming that is both of the highest quality and representative of the Canadian population in all of its cultural and linguistic richness.”

2934 In the next few minutes, therefore, I will address Canadians' access to programming services, the affordability of that access, and how access disagreements should be resolved.

2935 Programming is clearly the spine of Parliament's Broadcasting Policy for Canada: all but one of its 23 subsections focus on programming for Canadians.

2936 What you have heard this week, however, is that Canadians' access to programming services should depend on commercial considerations as defined by BDUs. BCE, for instance, argues that the Commission's “legacy rules ... constrain flexibility and impair” BDUs' ability to compete with as‑yet lightly regulated online streamers, which include, presumably, their own domestic services.

2937 The Forum's position is that the CRTC's regulatory approach has been generally successful in providing at least some access to Canadian programming in the regulated broadcasting system.

2938 Parliament's passage of Bill C‑11 means that the CRTC must either have evidence that its rules are reducing Canadians' access to Canadian programming, or that specific BDU proposals will do a better job. For example, Rogers and BCE want the CRTC to scrap its 10‑year‑old $25 a month basic service either outright or by letting them add discretionary services to the package.

2939 FRPC disagrees. First, removing the only limit on BDUs' raising the price to access local and mandatory programming services defeats Parliament's objective of “affordable rates” in section 3(1)(t)(ii).

2940 Second, the CRTC's data show that from 2020 to 2023 the number of subscribers to BDU services priced between $25 and $100 fell by 955,000 households, but that subscriptions to the $25 basic service grew by 223,000 subscribers. Demand for the regulated basic service has not fallen, but grown.

2941 Third, eliminating the small‑basic service removes Canadians' option of not having to pay for basic BDU service that by 2015 had “become too large and too costly”, to quote Broadcasting Regulatory Policy CRTC 2015‑96. That is the option and choice that the CRTC returned to Canadians in that decision.

2942 We therefore urge you to retain the small‑basic package as is.

2943 Our last point involves programming services' access to Canadians. FRPC's written intervention set out CRTC data comparing the unusually unprofitable state of licensed discretionary programming services not owned by BDUs, with the generally robust financial health of BDU‑owned discretionary services. We concluded that BDUs' services enjoy greater access to subscribers. In other words, the very highly concentrated ownership of BDUs that also own programming services is an insurmountable barrier to Canadian discretionary services' access to Canadians.

2944 While regulation can overcome this barrier, as it did with the 1987‑260 decision, the CRTC's current approach forces Canadians and independent discretionary services to rely on negotiations for access and, when these fail, to rely on the CRTC's ADR processes.

2945 Our written intervention set out CRTC ADR data obtained under the Access to Information Act. They show that from 2016 to 2021 its ADR processes took an average of nearly eight months to close, while 22 per cent took more than a year. Canada's largest BDUs can easily weather year‑long disputes: independent broadcasters cannot. The Forum therefore agrees in part with BCE that the CRTC's ADR processes should have “a clear and prescribed timeline for negotiation,” after which, FRPC believes the CRTC should intervene. Public decisions by the Commission will provide all parties with much‑needed guidance over carriage issues.

2946 To conclude, Madam Chair, we agree with you that votre “travail consiste à prendre des décisions sur la base du dossier public et dans l'intérêt du public.” However, we ask that your work also address data. To rephrase Cato the Elder, putamus data servanda et publicanda esse ‑‑ or, in English, you must preserve and publish your data.

2947 THE CHAIRPERSON: Thank you so much. I always appreciate a little Latin on a Friday afternoon. That makes my day. Thank you so much. And nice to see you again today. We always appreciate having your organization be part of these conversations.

2948 I will turn to Vice‑Chair Scott to lead the questions.

2949 VICE‑CHAIRPERSON SCOTT: Thanks very much. I was desperately Googling Cato the Elder quotes, but then I gave up after trying to fit in “Carthage must be destroyed” in there ‑‑

2950 MS. AUER: Yes, well, that is the point, yes. Data must not be destroyed.

2951 VICE‑CHAIRPERSON SCOTT: Agreed.

2952 So you did focus a lot on data and data gaps, so let's start there. My questions will do the same. Specifically from the vantage point of people who are trying to inform, analyze, help shape public policy on broadcasting, what are the data gaps that those players are facing? Do you have like a top three or a top five hit list?

2953 MS. AUER: Number one, the destruction of data without public consultation. As you may know, all of your TV logs from before the last 10 years have now been erased and destroyed apparently by the CRTC's decision.

2954 Secondly, the lack of long‑term data. The majority of your data bases in the open data sets cover 10 or fewer years. You've been in existence for over 50 years. Clearly, you have information because the Commission formerly published it.

2955 And third, the general absence of actually useful data. And that's apart from the errors in the data that do creep in from time to time because data are put in by humans. I understand that. But errors should be corrected with notifications so that we understand when and why things are happening.

2956 And in terms of just having the correct data available, as you may know, I enjoy data. I like data. I really dislike your data because it is not particularly useful. The fact that as a highly paid, skilled lawyer I have to spend time entering data from aggregated ownership returns because they're only PDF is an ongoing mystery to me. This is an inefficient use of everyone's time. So, if we could correct the inefficiency, that would be a great help.

2957 VICE‑CHAIRPERSON SCOTT: Thank you. And on the theme of inefficiency, we have heard from other players in the industry ‑‑ Rogers most recently ‑‑ that one of the mistakes the Commission makes is collecting data for which there is little apparent use. That's a different type of data inefficiency. Do you have thoughts on information that we're collecting that's not of use?

2958 MS. AUER: I don't believe that every piece of data is useful; however, I think what the Commission could do, and this is something that the Forum has been asking for for much of its 10‑year existence, is to have an annual meeting of interested parties who regularly use your data so that you could understand what it is we need that perhaps you might have.

2959 For instance, the TV logs are published. The radio logs are not. If I want to undertake any analysis of radio policy, it would be so helpful to have some information about what is actually being broadcast. Otherwise, I am simply waving my arms in the dark for no reason. Data matter. It's evidence.

2960 VICE‑CHAIRPERSON SCOTT: Thanks. So staying with data, but a different angle, could you share any thoughts you have on data asymmetry between various player in the broadcasting ecosystem, notably producers, programmers on one side, and BDUs and streamers on the other? Are there data asymmetries that lead to a misfunctioning marketplace?

2961 MS. AUER: I think the fact that the Commission has allowed concentration of BDU ownership to become so high that you have very large companies who can hold onto data and not share it with other parties that you regulate is a fundamental problem. FRPC is not well qualified to tell exactly what data the programmers lack and that the BDUs have or vice versa. The fact is that data asymmetries exist because that's a testimony you've already received at this hearing.

2962 I understand that the Commission has made great efforts to attempt to correct the asymmetry, perhaps to level it out. It doesn't seem to be helping. Based on our review of the ADR data, for sure, it's not helping. And certainly, in terms of the actual overall impact of having insufficient data I think is manifested through the very low PBIT margins enjoyed by the non‑vertically integrated programming services. Those are the only data we can obtain because the Commission does not report readily on the ownership of TV stations and their profits in terms of vertical integration or independence. There are very few TV stations that are independently owned, but we don't have a breakdown of their data, which would be helpful.

2963 VICE‑CHAIRPERSON SCOTT: Thank you. So you also spoke in your submission about the importance of clear objectives and measurement of those objectives, which is data‑dependent, but it's tough to measure what you haven't yet defined. Do you have examples of clear, measurable objectives or policies that you'd like to see coming out of this proceeding and the data that would support measurement of our performance against them?

2964 MS. AUER: I don't want to sound too eager by immediately leaning in to speak; however, it seems to me that section 3(1) does speak to the notion that Canadian content should predominate in terms of presentation. And yet we have virtually no data ‑‑ in fact, we haven't had data for more than 10 years as to how much Canadian programming is being broadcast.

2965 First of all, we need to have the total number of hours of Canadian programming being broadcast over the total hours being broadcast. Secondly, we need to know how much of that programming is truly first‑run, not broadcast by any other broadcaster, related or not. And third, I would think that in 2025 in the peculiar political circumstances in which our country finds ourself, we would like to know how much actual news, first‑run news is being broadcast in Canada.

2966 I've been attending these hearings ‑‑ and I was very young at the time ‑‑ but since 1983. So it's a very long time that I've been hearing, for instance, that radio is the best source of local programming, and yet we don't know how much local news is being broadcast. Why not? Wouldn't that be helpful in measuring whether the Act's achievements are being implemented?

2967 And the second problem, of course, is the lack of information about employment. It's an economic sector. Employment matters. There used to be 50 per cent more people employed in the sector 30 years ago. It's fallen. Have we seen as a result of the savings from employment reductions and automation more investment in Canadian programming? I don't think so.

2968 VICE‑CHAIRPERSON SCOTT: Thanks. I think that is the end of my data‑centric questions. But moving on to some other themes that you'd raised in your submission, notably regulatory symmetry, which you've advocated for generally, but there's a lot of nuance in the concept of symmetry. And the Act also recognizes that there are differences between the types of services and how they make the programming available.

2969 So how much symmetry is achievable, and to what extent do we achieve that by carrying forward old rules into the new world versus abolishing rules from the old world or imposing new rules on both? What's the mix of adding versus taking away that gets us to symmetry?

2970 MS. AUER: The old rules existed for a reason, and the reason was found in the statute. The statute exists largely unchanged, except that it's been bulked up and grossed up. So in fact you have more duties under 3(1) than you did before.

2971 I don't think it means that every old rule per se must be retained, but surely, the purpose of the rules should be examined to make sure that their elimination does not inadvertently create a secondary knock‑on problem.

2972 For instance, I mean, the evidence are clear that when the Commission deregulated radio in the early '90s, employment plummeted and so did news. So that was an inadvertent thing, I suspect, but that was in the name of deregulation and flexibility and streamlining and reducing administrative burden ‑‑ which is never proven, incidentally, because of the lack of data.

2973 VICE‑CHAIRPERSON SCOTT: Thanks. Just one last theme to wrap up on, and it really is kind of the zoomed‑out big picture, a couple questions.

2974 At the end of your opening remarks, you noted the difference in financial performance of the independents versus the vertically integrated companies. If we focus too much on that discrepancy, are we distracting ourselves from what some might argue is the much bigger discrepancy between the global online streamers who are competing against domestic Canadian companies? And you know, are we going to look domestically while we get crushed by international forces?

2975 MS. AUER: One of the problems in this particular proceeding has been that it is dealing primarily with the dynamics between licensed BDUs and programming services. Yes, we have new online streaming services, but it didn't seem to me from the notice that the Commission had provided any evidence about what it already thought is the problem with respect to Canadian services' access to international online services.

2976 And having just heard the testimony of Spotify, in which they went to pains to explain how much they like Canadian content, I don't think I would want to hypothesize that in fact they are not interested in Canadian content because it's just bad business on their part. That would be bad business on their part.

2977 I think the fact is that if you want to have a strong broadcasting system, the system has two components, distribution and content. I think it's fabulous that we have such an excellent distribution system across five time zones and three coasts, that we have it in the sky and in the ground and in the air, terrific. But if we don't have Canadian content in those pipes, whether they're ephemeral or real, what are we doing? We're just supporting a system of pipes. And while I like pipes, I'm a woodworker. I make them. I do all sort of fun things. If we don't have meaningful substantive content, and in particular news and information on which people can rely, then we are doomed, not to put too much emphasis on that.

2978 VICE‑CHAIRPERSON SCOTT: I think you've answered what was going to be my final question, because ‑‑

2979 MS. AUER: That we are doomed? Let's be positive.

2980 VICE‑CHAIRPERSON SCOTT: We have heard our current situation described as either, you know, a transitional point or we need to kind of negotiate a transition phase, and we've heard it described as an existential crisis. Can I take your doomed message to mean that it's more in line with an existential crisis?

2981 MS. AUER: I think some parts of the system are doing reasonably well. I happened to be glancing at Rogers' 2024 annual return or annual report, rather, and some parts of its business are doing extremely well.

2982 I think the interesting thing is that from about the mid‑'90s to the early 2000s, whenever I came to a hearing ‑‑ and I was much younger then ‑‑ all I heard was convergence, convergence, convergence. Telecom and broadcasting must converge. And now telecom and broadcasting must be separate. We cannot converge them because they are two completely different businesses.

2983 And where I'm going with this is just saying that I think that we are in a natural period of evolution and that the failure to address the mere existence of independent programming services rather than their thriving in the system is a serious problem for all of us. So I would prefer to see that all components of the system are thriving. But employment is dropping. Canadian content does not seem to be thriving. Independent broadcasting services are not thriving. So how is that a successful system and how does it really support 3(1)? If we're not supporting 3(1), why are we all here?

2984 VICE‑CHAIRPERSON SCOTT: Thank you very much for sharing your thoughts today. I'll turn it back to our Chair.

2985 THE CHAIRPERSON: Thank you. I think you are answering good questions. I think we are here to find out what the possible answers are. And I mean, you read back some of my words, so I will read back to you some of your words.

2986 MS. AUER: I hope I remember them.

2987 THE CHAIRPERSON: Because I can do it because I've got them on paper. And so you said: “The Forum's position is that the CRTC's regulatory approach has been generally successful in providing at least some access to Canadian programming in the regulated broadcasting system.”

2988 That's a low bar. That's a very low bar. And so, for me, the bar is so low that it begs the question what else could we do. Right?

2989 MS. AUER: You could publish data to show that the level of Canadian ‑‑

2990 THE CHAIRPERSON: Sure.

2991 MS. AUER:  ‑‑ programming is increasing. Then I wouldn't ‑‑

2992 THE CHAIRPERSON: But data is a tool ‑‑

2993 MS. AUER:  ‑‑ have to qualify the words.

2994 THE CHAIRPERSON: Data is a tool that informs in part good decision‑making. Or at least, it informs decision‑making, and we all hope it's going to be good decision‑making. Right?

2995 So I'm just ‑‑ you know, we're getting a different kind of image from the various intervenors that access is not that great, including from some of the equity‑deserving groups, some of the independent broadcasters. They're actually saying it's not that easy to access the pipes. And the pipes are fundamental. You can have great content, but if it doesn't go anywhere, what's the point?

2996 So I'm just trying to get a reaction from you as to whether truly we should just not touch anything or ‑‑ you know, I'm not saying this is what you're saying, but I just want to press a little bit ‑‑ or if we need to change things besides data so that we can make informed decisions, what are those buttons that we should be pushing on so that we truly make a difference and we're able to sail through this crisis that we are being told we're in the middle of?

2997 MS. AUER: If I may, I will address that in three separate bits.

2998 The first thing is that it has never been clear to me what the Commission thinks a success in terms of 3(1) is. I qualify that to say that my background was in quantitative research methods many, many years ago. And it helped that my father was an economist, although he despised what I did. And my point is that if you are not actually telling us how you measure the implementation of 3(1), then it doesn't really matter what data are available to us, because we can't evaluate whether in fact 3(1) is being implemented. The Act exists so that 3(1) can be implemented, but we don't know what's being measured as that actual outcome.

2999 And in thinking about, for instance, the independent discretionary programming services, I found it interesting when I was analyzing the ADR data ‑‑ that are not generally public but were only available through access to information, and even that was a struggle, because of course the Commission sent me 80 pages of PDF data. And since I wasn't busy one summer, I actually input the data so that I could determine what the Commission was actually saying, and found that in fact some of the ADR processes are not just taking no more than six months. A number of them, one in five, are taking a year or more. Maybe that works for two large players of equal size on both sides of the equation, but I don't think it works for independents who may not have the financial resources to carry on. So timeliness is an issue.

3000 So when we're looking at whether you should simply jettison the entire regulatory framework, I'm not saying that. I'm saying that at this point we don't know, number one, whether any of your policies have ever worked in terms of the 3(1) objectives. And they have not worked in terms of employment. We know that because employment is going down. And it's going down at a faster rate than in the general economy.

3001 So my answer to you is we don't know where the system is now. It's unclear where the Commission would like to take it. And therefore, it's unclear how it's being implemented.

3002 THE CHAIRPERSON: Thank you very much. That concludes our question period. Thank you again for coming before us. It's always a pleasure. And have a happy Friday.

3003 MS. AUER: Have a good weekend.

3004 THE CHAIRPERSON: Thank you. Bonne St‑Jean‑Baptiste.

3005 THE SECRETARY: We will take a short break and resume at 2:35. Thank you.

‑‑‑ Suspension à 14 h 31

‑‑‑ Reprise à 14 h 37

3006 LA SECRÉTAIRE : Nous entendrons maintenant la présentation de Cogeco inc. Veuillez vous introduire et vous pouvez débuter votre présentation. Merci.

Présentation

3007 M. BEAUDRY : Merci. Madame la Vice‑présidente, Monsieur le Vice‑président, membres du Conseil et membres du personnel, bonjour. Je suis Paul Beaudry, vice‑président, affaires réglementaires et corporatives chez Cogeco.

3008 Je suis accompagné à ma droite de Paul Cowling, chef des affaires juridiques et corporatives, Shaun Blake, vice‑président, produits, et Heidi Newman, responsable de l’acquisition de contenu. À ma gauche, Simon Desrochers, directeur, affaires réglementaires – radiodiffusion, ainsi qu’Emmanuelle Baillargeon‑Choinière, chef de produit – monétisation télé.

3009 L’afflux de nouveaux joueurs dans le système canadien de radiodiffusion, combiné à la consolidation et à l’intégration verticale au sein du secteur, a une incidence importante sur le paysage concurrentiel et les dynamiques du marché.

3010 À la lumière de ces réalités, et afin que le Conseil puisse atteindre les objectifs de pérennité, d’équité et de croissance du système canadien de radiodiffusion, il est crucial que le Conseil révise son cadre réglementaire pour s’assurer que les consommateurs puissent continuer à avoir accès à des services de qualité qui répondent à leurs besoins, à des prix abordables.

3011 Face au pouvoir de marché que détiennent les entreprises verticalement intégrées et les grandes entreprises en ligne, les mesures que nous proposons visent avant tout à protéger une offre concurrentielle et diversifiée pour les consommateurs.

3012 MR. BLAKE: As you know, Cogeco offers video services in Quebec and Ontario, but we do not own or produce content. We therefore must bargain with dominant vertically integrated companies to distribute programing. Like other distributors with no content or relatively small market share, Cogeco is at a fundamental disadvantage when negotiating against these VI players.

3013 In contrast, Bell, Rogers and Québecor control Canada’s most valuable content. They also control the majority of Canada’s BDU subscribers and increasingly distribute their content directly to consumers. With dominant positions on both sides of the market, what economic incentives do these players have to deal with us? None.

3014 The threat to consumers is obvious. If independent distributors cannot access content on reasonable terms, they cannot survive. Consumers lose and are deprived of competition and choice. In order to access must‑have VI programming, independent BDUs are forced to shell out unsustainable fees, which undermine their competitiveness and drive Canadians away from the system.

3015 This hurts competition across the board, accelerating the consolidation of all communications services in the hands of Canada’s most dominant providers.

3016 MS. NEWMAN: In our experience, VIs are extreme bullies when negotiating for programming. They waste time and resources by systematically making unreasonable offers and counterproposals that completely disregard the Wholesale Code.

3017 This has worsened significantly with consolidation, as evident in Rogers’ exercising their market power after buying Shaw. The playbook is predictable. There are consistent threats to sue us or cut off customers, even when that clearly violates the rules. We have recent well‑documented evidence of unjustifiable threats and suspensions of service without notice. These tactics are timed deliberately to leverage negotiations when going dark is most damaging to us. The rules must not permit these types of blackouts. Customers must not be taken hostage.

3018 Some VIs have suggested that competition from independent BDUs is irrelevant and that competition can come instead from online platforms. Coegeco fundamentally disagrees.

3019 Cogeco has video operations in the United States, where safeguards are not available to independent BDUs. This has led to higher prices, increased cord‑cutting and some smaller providers exiting the video business altogether. Clearly, this is not a path the Commission should follow.

3020 MR. COWLING: Years ago, the Commission correctly recognized the need for the Wholesale Code and robust dispute resolution mechanisms in order to reduce barriers to competition and choice in broadcasting. It also correctly took steps to ensure a diversity of voices in the media market as a foundation for our democracy. Since then, the market has consolidated, and there is clear and increasing evidence of abuse by dominant providers. Competition, choice and diversity of voices are under threat.

3021 The Commission must restate, update and enforce its rules against dominant players that disregard them.

3022 The Wholesale Code and all dispute resolution mechanisms must apply to all undertakings, whether traditional or online, and must apply at all times, including during mediation.

3023 VIs must be prohibited from withdrawing or withholding services from independent BDUs who wish to distribute them.

3024 Abusive penetration‑based rate card practices must stop.

3025 The Commission must impose rules to prevent programming exclusivity by online undertakings, including prohibitions on anti‑competitive head starts.

3026 There must be an effective ex‑ante ban on content blackouts clearly set out in the Wholesale Code, with timely enforcement. The Commission must act on an immediate same‑day basis. It cannot hesitate when rogue dominant players deny our customers access to content they have paid for.

3027 Il ne fait aucun doute que l'écosystème a changé. Cependant, certains fournisseurs dominants ont interprété ce changement comme une occasion de ne pas respecter les règles, qu'il s'agisse de la règle du statu quo ou de la politique sur la diversité des voix.

3028 Le nombre de distributeurs indépendants et de voix médiatiques au Canada diminue. Sont‑ils toujours importants? De l'avis de Cogeco, aujourd'hui plus que jamais, la réponse est un oui sans équivoque.

3029 Enfin, nous ne pouvons passer sous silence la publication par le Conseil plus tôt aujourd’hui d'une décision profondément troublante en matière de télécommunications.

3030 Le Conseil a rendu une très mauvaise décision en permettant aux trois géants des télécommunications d’utiliser la réglementation pour élargir leur emprise sur le marché. Cette décision menace la concurrence, l'abordabilité, le choix et l'investissement. Elle nuira aux consommateurs et à l'économie canadienne et nous contesterons cette décision jusqu'à ce qu'elle soit corrigée.

3031 La décision d'aujourd'hui nous amène dans la mauvaise direction. Le Conseil détourne l'objectif du régime d'accès de gros, offrant aux fournisseurs dominants du Canada un soutien réglementaire pour devenir encore plus importants, risquant l'existence de joueurs indépendants et régionaux, et ignorant les intérêts des Canadiens.

3032 M. BEAUDRY : Nous nous ferons un plaisir de répondre à vos questions maintenant.

3033 LA PRÉSIDENTE : Je vous remercie beaucoup. Vous comprendrez qu’on ne parlera pas de télécommunications aujourd’hui. Ce n’est pas le propos de l’audience. Alors, on vous inviterait à rester focussés sur les propos d’aujourd’hui.

3034 Je vous remercie beaucoup pour votre présentation. C’est un plaisir d’avoir les gens de Cogeco devant nous. Et je vais me tourner vers ma collègue, la commissaire Levy, qui va diriger la période de questions.

3035 COMMISSIONER LEVY: Thank you very much for appearing here today. A very interesting presentation.

3036 As you say, the independent voices are diminishing. They are just as important, if not more than ever. How do we reverse that? How do we reverse that trend?

3037 MR. BEAUDRY: Thank you, Commissioner. Maybe just a bit about Cogeco.

3038 Cogeco is a company that was born in the city of Trois‑Rivières, Québec in 1957. And throughout our history, there is one constant reality: is we try to serve regions, regional communities, small and medium sized communities across Quebec and Ontario. We proudly serve 600 of them.

3039 As an independent BDU, as my colleagues have pointed out we do not own and produce content. We think that one of the main challenges in the current market dynamics is to ensure that we can continue occupying the role that we play in the system, which is to offer the customers that we serve in these regions of Quebec and Ontario with choice with respect to the content that they access.

3040 There are real obstacles to doing this right now, and they are twofold. One, the VIs have gotten bigger. Post Rogers‑Shaw, the problem has been magnified, and they have continued incentives and ability to abuse their dominant position to either try to foreclose completely access to content or at least make us pay rates that are commercially unreasonable.

3041 So we think there needs to be more adequate protections and an updated regulatory framework so that they are not in a position to abuse their market power.

3042 Obviously, we are also here because of the passage of C‑11 and the reality of online undertakings. We, as a BDU, try to provide additional choice and innovate in the way we offer services to our customers. And obviously, there has been a migration of content from the linear world to the online world. We want a chance to provide this content and resell the content of online undertakings, whether they are VI or not, through our platforms. And we think that there needs to be some access rules that the Commission should implement, which it is empowered to do via legislative amendments that have recently been passed. And we certainly urge the Commission to update its rules so that they apply both in the traditional world, and they apply in the modern online world in which we are now navigating.

3043 COMMISSIONER LEVY: And that’s where I want to go next. I’m going to ask a sort of very big‑picture question, and then we can get into the rules.

3044 A lot of people have come here saying we need fewer rules or we need better rules, or we need streamlined rules, whatever. We’ve heard a lot of that.

3045 In a world where the traditional BDUs are seeing diminished revenues, subscribers, all of the rest of it, look into your crystal ball and how are you preparing for a future where all distribution may be online?

3046 MR. BEAUDRY: I would say that first there is still a role for traditional distribution. We evolve in a system where we still have ‑‑

3047 COMMISSIONER LEVY: For how long?

3048 MR. BEAUDRY: Maybe my crystal ball is not as sharp as yours. I’m not going to forecast this.

3049 But I think today we are before you because we want to plan for this future, and I think you have the ability, Commissioners, to implement some new rules so that we can remain a relevant stakeholder in the system.

3050 And we’re not doing this for our own sake. We pride ourselves in bringing additional choice to consumers. We are involved in the provinces of Ontario and Quebec. In Quebec we promote the discoverability of Canadian content across our footprint but also French language content in Quebec. We want the ability to continue doing this, not only with traditional linear content but do so by reselling online content.

3051 And we have proposed rules that would ensure that we have a meaningful chance to continue providing this additional choice to our consumers. We serve regions that often are forgotten or are of second order to the largest competitors out there. We can provide this link by helping to fulfil the objectives of the Act while providing additional choice to Canadian consumers.

3052 Perhaps my commercial colleagues can talk about ‑‑

3053 MR. COWLING: I am just going to intervene before I pass this down.

3054 I think Paul spoke well about what the traditional system contributes to the system. From the highest possible level from the business perspective, we see continued relevance to the BDU service. We want to be in this business. It is important to our market presence. It is important to our competitiveness from a broader connectivity perspective.

3055 So for the time being, we think this is highly relevant to the market, in addition to serving an important purpose in supporting the system.

3056 So our crystal ball is saying for the time being, while this is certainly not a growth sector, it’s a very important part of our business and will continue to be for the foreseeable future.

3057 COMMISSIONER LEVY: Let's move further into more particular sorts of questions.

3058 You propose that online undertakings be imposed non‑exclusivity conditions of service for content in Canada. So in practical terms, would that involve allowing Canadian BDUs to offer Netflix content directly on a program‑by‑program basis, or would it mean that Netflix would be required to negotiate carriage or access agreements with all Canadian BDUs?

3059 MR. BEAUDRY: I think we've structured the proposal by distinguishing between non‑vertically integrated online undertakings and vertically integrated ones with slightly different obligations.

3060 So for online undertakings that would not be vertically integrated, the obligation to allow independent BDUs and others to retransmit or resell the service that they offer would be imposed when there is one agreement that exists with communication service providers in Canada, whereas if you have a VI online services provider, there would be a blanket obligation to make the service available for resale on our own platform.

3061 COMMISSIONER LEVY: Let's talk about the 9.1(1)(h) services. You propose no new ones. What is your proposal for the current 9.1(1)(h) services? Are you proposing that the current one not be renewed once the licences are no longer in effect? Or what would be the impact on achieving our policy objectives if there was no 9.1(1)(h)?

3062 MR. BEAUDRY: We recognize the 9.1(1)(h) channels are there to ensure the distribution of programs that the Commission has deemed of exceptional importance to Canadians.

3063 Our biggest issue is the fees that we have to pay in connection with these channels for the distribution of the channels, which effectively increase our financial contribution threshold from the 5 percent that we have to pay to effectively something like 7 or 7‑1/2 percent.

3064 What we’ve proposed in our own intervention is that we should be able to get a credit for the amount of wholesale fees that we pay to these channels so that, in total, the threshold that we pay in financial contribution is 5 percent.

3065 We know that some other of our peers in the industry have proposed other potential avenues that the Commission could pursue, including having the onliners contribute financially, but I think that we are happy to provide the distribution. For us, it’s the cost associated with the distribution that effectively raises our costs of operation. Onliners do not have this obligation, and we feel like a better apportionment of the risk and the responsibilities associated with 9.1(1)(h)s has to be implemented.

3066 Our ideal scenario, to be quite candid, is that if this is truly exceptional interest for Canadians, the funding for this should come from the government and from the treasury. However, absent these types of mechanisms, which we understand are beyond your control, we think there should be a way that, at the very minimum, our 5 percent is actually a 5 percent and doesn’t go up above that amount because of the significant fees that have gone up with time because of the tariff increases that are sought at licence renewal, as well as the additional orders that the Commission has implemented in recent years.

3067 COMMISSIONER LEVY: Let's move on to chat a little bit about cross media ownership and our cross media ownership policy.

3068 There have obviously been significant changes in the media landscape since the Commission last reviewed cross media ownership in 2008, particularly with respect to online media.

3069 So how does Cogeco believe the existing cross media ownership policy retains its relevance and effectiveness?

3070 MR. COWLING: I am just going to start here and set it up a little bit for my colleague.

3071 I think you had asked earlier in your questioning, Commissioner Levy, about voices and the diminishing number of voices in the market. And this is also a concern of ours, as we are one of the only voices left in certain regional, small rural areas where we serve. As Paul mentioned, we have a very strong regional identity. That’s where we focus our cable and internet services, but it is also where we have a number of radio stations. In some cases, we are the only radio station in a market.

3072 We understand from that experience how important radio is to local news. The local news market is a distinct market, very different from a national or international market. And when you look at the local market and the concentration of media or the absence of local media, frankly, it’s a very different thing from pointing to a number of online news outlets that don’t provide that local content.

3073 So, that’s the first sort of big picture rationale for why we believe this policy continues to be, if not is more relevant today than it has been in the past.

3074 Simon, maybe you could help round out my comments there.

3075 MR. DESROCHERS: It is still really relevant today and needs to be maintained and applied without restriction or exception, be it in the traditional environment, if you can call it so, or even online. The fact that one media brings its operation online, it still produces local content. I mean, it’s a different point to use something that was said before, but it still has an impact on the local market. And doing without that policy, that would just be for consultation and market power and has fewer players. We know, also, that this would have an impact on the advertising market, which is our bread and butter of most local media players. So can you imagine if these big players also control the advertising market? I mean, the small local ones will just disappear.

3076 MR. COWLING: I think it is obvious, but it needs to be said. I think when rules are disregarded, they need to be enforced.

3077 COMMISSIONER LEVY: The Act limits the Commission’s ability to collect ownership information in respect of all online undertakings, regardless of their origin. So, how would the Commission effectively implement a cross media ownership policy which applies to online undertakings?

3078 You have suggested that it should be expanded.

3079 MR. BEAUDRY: I think in the current context, I think it is important that the cross‑media ownership policy be maintained. With respect to the ownership information, this could certainly be something that we could look at.

3080 Obviously the instances of, in our view, non‑compliance with the rule that we’ve seen currently has to do with the print media sector and the traditional sectors.

3081 So I think we can certainly get back to you, Commission, on the issue of specifically how ownership information could be gathered instead of trying to guess what would be the best avenue. We could certainly take an undertaking and provide you with further thoughts about how you would go about to collect that information.

3082 COMMISSIONER LEVY: We can accept it as an undertaking, or an RFI, or add it to your final submission. What is Legal’s preferred option?

3083 MS. BENAISSA: We can send an RFI with the specific question and a deadline.

3084 MR. BEAUDRY: Okay, that works. Thank you.

3085 COMMISSIONER LEVY: Okay. Housework done.

3086 So, I am going to leave that for the time being, and move to some of the discussion of the mediation issues. You are proposing that the Wholesale Code be applied during staff‑assisted mediation. Does this imply that you are mandating parties to rely solely on CRTC staff for mediation? And if not, how would you envision the Commission enforcing compliance if external mediators are used ‑‑ which are of course possible even now?

3087 MR. BEAUDRY: So, our preference and our recommendation is that this stays within the confines of the CRTC. You are the experts on the Wholesale Code and on broadcasting regulatory framework. So, we believe that it would be preferable to use the CRTC to conduct these mediations and obviously final offer arbitrations. There is nothing currently in the rules that prevent parties from voluntarily agreeing to go to private commercial arbitration, but as a smaller player with limited resources, we fear that this process might be abused by the larger VIs, who have much, much, much deeper pockets than we do. So, the ability to rely on the Commission for us is something that is very important.

3088 With respect to the application of the Code, I think there has been one rare area of agreement between different stakeholders, which is to say that the current style of the staff‑assisted mediation process is not sufficiently directive. And we have felt this as well, where there is generally an invitation to continue talking to your vis‑à‑vis, but without a more directive tone.

3089 And our position with respect to the Wholesale Code is that you shouldn’t have to wait until FOA or any other phase to incorporate the Wholesale Code into the analysis, including the analysis by mediators, of the offers that are made by each party. Numerous times we have been in mediation where the other party, generally much larger than us, is proposing offers that are clearly in violation of the Wholesale Code, and the response we’ve typically gotten from the mediators is, ‘We are not bound by any specific rules on mediation. Parties are free to exchange offers as they see fit.’

3090 Well, certainly, that diminishes the value of the protections for the weaker party in the negotiation. So, this is kind of the spirit of our recommendation that mediators more proactively assess the offers that are crossing the table and are able to get back to some of the parties sometimes when they feel like the rules are not being respected, and ask them to go back to the drawing board.

3091 And ultimately, this would be in the interest of all parties involved because, if the mediators are able to be a bit more directive, the offers would probably be more reasonable, and you would come to negotiated agreements more swiftly than under the current regime, in my humble opinion.

3092 COMMISSIONER LEVY: Thank you.

3093 Let's talk a little bit about something that seems very technical but is highly germane, and that is penetration‑based rate cards. You are clear that there are some cases involving the vertically integrateds where these are problematic. Bragg Eastlink had some proposals to address similar concerns with the PBRCs. You’re not overly prescriptive when it comes to them, but you did mention in your reply that you agree with Bragg Eastlink’s position. I wonder if you have any further comments, and whether you would like to share any experiences that you’ve had with PBRCs?

3094 MR. BEAUDRY: So, I think our view is that PBRCs in the olden days, where there was not as much vertical integration and there was more discretion afforded to BDUs as to how they could package their services ‑‑ they had their relevance. In the current market dynamics, PBRCs are no longer appropriate, and we would support the Commission prohibiting them all together, for the simple reason that increasingly what we are seeing is we are asked to shoulder an inordinate amount of risk when we enter into these agreements with the larger players. This is what they require of us. So, they insulate themselves from the effects of consumer choice, and we are in a position where we need to pay more and more in order to get the content.

3095 We feel like, in an environment where we have little impact on consumers’ decisions to subscribe to one channel as opposed to another, it really is on the programmers’ shoulders to show that they have a good product. Consumers are going to choose. That’s the spirit of the Let’s Talk TV decision of 2015. So, in this context, the PBRCs don’t have much relevance.

3096 And perhaps Heidi, you can talk a bit about our experience with them.

3097 MS. NEWMAN: Yes. What we have seen is many of the VIs and programmers are moving a lot of the exclusive content online, which is just amplifying the cord cutting. And of course, as you know, customers want choice, and many of them are going to find a streaming service that costs less than a typical cable package.

3098 The other thing that we have seen is that the VIs ‑‑ you know, they are really pushing this new revenue stream on their direct‑to‑consumer app, which is allowing them to have guaranteed revenue from their affiliate licensing agreements, at a higher price ‑‑ so, we are continuing to pay a higher price even though the penetration goes down ‑‑ and they are gaining new revenue streams off their direct‑to‑consumer app through either subscriptions or advertising.

3099 So, in that way, we feel that banning the PBRCs would help simplify the negotiation process; it would slow cord cutting, because we could offer a better price to the customers; and perhaps even it could lessen the mediation process and lower the negotiation time that it takes to work with them on a new contract.

3100 Anything you want to add?

3101 MR. BLAKE: And if I may just give a very specific example, so, we heard a vertically integrated company speak earlier today about protection of NHL and Canadian content, and the ownership of Canadian content. In an agreement in which we would be working with this vertically integrated company, we would look to strike a deal around that.

3102 They have already moved exclusive content to a Monday, with Amazon Prime, which was not necessarily mentioned, but they have, and as a comparison to some of the U.S.‑based business that we run, we see things like game protections or other things written into the contracts, all the way up into removal of cost, which of course benefits our business but more likely benefits our customers and our ability to make those adjustments if content is shifted around.

3103 COMMISSIONER LEVY: And finally, I am going to ask a couple of questions about the standstill rule. Your proposal would make the standstill rule exclusive to independent undertakings. How do you envisage this change will level the playing field for independent undertakings, and what regulatory protections do you believe are necessary to ensure fair competition vis‑à‑vis your VI competitors and customers/providers?

3104 MR. BEAUDRY: So, our proposal is indeed that, in a situation where an independent BDU is negotiating with a VI, the standstill be available to us. But more importantly, we do not think that, in the context of a VI affiliation agreement, they should be able to lift the standstill prior to going through the entire dispute resolution process, including FOA.

3105 We’ve seen in recent years instances where the standstill has been lifted before parties have had the opportunity to go to arbitration, and because the VIs have an ability and an incentive to foreclose content either completely or partially, they should not be able to leverage the system and ultimately make use lose access to must‑have content, because this could be significantly negatively impactful on us.

3106 And we were talking about the impact; this is not only an impact on our BDU activities. Increasingly, consumers want a bundle of services. So, not only would this have a negative impact on our BDU operations; it would have a negative impact on our ability to sell broadband internet and other telecommunications services.

3107 And this would also be extended to online undertakings as content increasingly shifts from linear to online, and very often our affiliation agreements with some VIs incorporate both linear content and online content, we cannot be in a position where there are no safeguards with respect to that online content. We cannot be in a position where there could be blackouts of customers with respect to that online content, because that is going to accelerate the migration of content online. The VIs are going to do this, and we actually have lived this. This goes beyond the realm of the theoretical. We have had situations ‑‑ and maybe Shaun, you can talk a bit about it ‑‑ where some content, in the context of a negotiation, has been removed from our customers, with a meaningful impact.

3108 MR. BLAKE: Yes. So, my job as the Vice‑President of Products and Content is to create great products and bring the most content to the most customers.

3109 We know from an experience lived between the U.S. and Canada that the Wholesale Code and the standstill rule have benefitted Canadians dramatically. The devolving system in the U.S. is a great example of what could happen if we were to roll that type of regulation back, in a world in which the FCC and broader communication plans have really said little and have little protections for Americans in that way that you all have protected Canadian consumers.

3110 But the market is evolving, and as my colleague mentioned, VIs and online undertakings continue to move and shift things in which we feel like the Wholesale Code has opportunity ‑‑ and the standstill rule specifically has opportunity to adjust around. In the particular case that we’re mentioning, Rogers enacted and worked with us during a negotiation in an unforeseeable way, and really in an egregious way. They took down certain SportsNet programming to certain customers at the beginning of our NHL hockey playoffs, particularly in a year when there were five Canadian teams, which is incredibly painful for our customers ‑‑ and the folks who suffered during that experience were our customers and, of course, our business. And what we would ask is that these online protections and the standstill rule would also apply in this case.

3111 COMMISSIONER LEVY: If there is a possibility ‑‑ if VIs are prevented from invoking standstill, that the very disruption to viewers, which is of paramount importance ‑‑ that could also create disruption. So, what could we do to mitigate those risks, if it’s only independents that can use the standstill?

3112 MR. BEAUDRY: I think we would say that we often, in a negotiation process ‑‑ and this is something we’ve had to deal with, with VIs ‑‑ we faced a lot of negotiations where there’s effectively tied selling proposals being put on the table, and we’re faced sometimes with the prospect of carrying channels that are not garnering any viewer interest because VIs want a package deal or nothing. So, by allowing only independent BDUs to invoke the standstill, we could also determine which channels we want to continue carrying, and that would circumscribe the breadth of the standstill which would be applied by the Commission.

3113 COMMISSIONER LEVY: Just one final question. We hear a lot from you about great difficulties, and we have heard from an earlier intervenor that their employment is dropping, the amount of Canadian content is dropping, and we, as Commissioners, are extremely concerned about all of that.

3114 So, I wonder, in all of the difficulties, whether you see beams of light ‑‑ innovation ‑‑ either innovation that you yourselves have managed to come up with or that you see in other jurisdictions that could be applied here, because ultimately, it’s the creative and it’s the audience that are going to supply everything that you and others distribute. And I am very concerned about the Canadian audience and how they are being served in all of this.

3115 So, if there are any, as I say, points of innovation or points of light, now is your chance to put them on the record. Thank you.

3116 MR. BLAKE: So I think, again, I am most encouraged by the framework as it’s established today, and that we’re not moving from nothing to something. And so, if I look at it again, the perspective that we can bring ‑‑ again, this cross‑border perspective ‑‑ in a way that ‑‑ you know, we heard many folks talk about how wrong or how bad the situation is, and is it an evolution or sort of dire needs? I think for me, it’s both.

3117 It’s an evolution, meaning like we should feel really proud of where we are, and the ability to make those changes in the regulatory systems that are established here that in many other places aren’t.

3118 On the flipside, I think we have the obligation to relook at ‑‑ in some ways, you can look at the U.S. and say, ‘This is what happens if we don’t make these changes that we have to make.’ So, the silver lining for me is that we have a really great place to start from, and that we should build on that, and I think a lot of proposals that we made today will help in that capacity.

3119 MS. BAILLARGEON‑CHOINILÈRE: If I may ‑‑

3120 COMMISSIONER LEVY: Thank you.

3121 MS. BAILLARGEON‑CHOINILÈRE:  ‑‑ add to that ‑‑

3122 COMMISSIONER LEVY: Oh, I’m sorry. Go ahead.

3123 MS. BAILLARGEON‑CHOINILÈRE: I’m sorry. Another beam of light would be the fact that we’ve seen in recent history that content consumption has not decreased. It increased. It’s the way it’s being consumed that has changed. So I think that with our U.S. experience, and having the current frame that we have in Canadian content, I think that knowing where our customers consume the content, and being able to still provide that to them, is what we’re seeking. Right? We don’t want to lower the Canadian content that we offer to our customers; we want to increase it, and we want to be able to do so where and when they want to consume it.

3124 MR. COWLING: And I am just going to weigh in and pile on, and just ‑‑ Cogeco has a unique perspective, not only because we have a large ‑‑ at least large from our perspective ‑‑ business in the U.S., but we have had operations in other countries, like Portugal, and we’ve seen what happens when there isn't a regulatory framework to ensure that people don’t get squeezed out from accessing content. And that does have an implication on the competitive diversity of the marketplace, and the diversity of voices in the market.

3125 There are reasons to be very optimistic about the Canadian system. There is continued resilience. We see it in our radio business. But we do need the regulator to understand that it has an impact ‑‑ that the regulations have an impact on the flexibility with which we can work ‑‑ and the rules, as they are in place today, need to be enforced.

3126 And so, there is a role for the regulator here, but there are definitely bright spots in the ecosystem worth saving.

3127 COMMISSIONER LEVY: Thank you very much for answering all of my questions. That’s all I have.

3128 THE CHAIRPERSON: Thank you, Commissioner Levy.

3129 COMMISSIONER LEVY: Thank you very much for answering all my questions.

3130 THE CHAIRPERSON: Thank you

3131 Je passe la parole à la conseillère Paquette, qui a quelques questions pour vous.

3132 CONSEILLÈRE PAQUETTE : Bonjour. Je voudrais premièrement m'assurer que je comprends bien ce que vous suggérez pour le statu quo. Si je comprends bien, si Cogeco comme joueur indépendant négocie avec un joueur intégré, il y a un statu quo qui s'applique de facto. Est‑ce qu’on parle bien de ça?

3133 M. BEAUDRY : En effet, ce serait une…

3134 CONSEILLÈRE PAQUETTE : Ce ne serait pas à votre discrétion, là? Donc, ça voudrait dire que Cogeco ne peut pas retirer un service tant que…

3135 M. BEAUDRY : Non, la possibilité d'invoquer la règle ne serait applicable qu'à nous.

3136 CONSEILLÈRE PAQUETTE : Ça serait à votre discrétion?

3137 M. BEAUDRY : Exactement.

3138 CONSEILLÈRE PAQUETTE : Donc, vous auriez le choix de dire : « Je retire le service » ou le joueur intégré a l'obligation de maintenir la distribution?

3139 M. BEAUDRY : C’est‑à‑dire que oui. Puis, évidemment, la raison pour laquelle on cible les joueurs intégrés, c'est que c'est eux qui possèdent la vaste majorité du contenu le plus populaire qu'on veut distribuer à nos abonnés. Et, principalement, le but de ce qu'on propose ici, c'est qu'on ne veut pas qu'il y ait des scénarios où, avant de pouvoir aller en arbitrage d’offre finale, il y a des levées du stand still, de la fameuse règle du statu quo.

3140 Évidemment, c'est l'objectif principal. On ne veut pas avoir des situations où, ultimement, nos consommateurs sont pénalisés parce que le mécanisme de règlement des différends a comme un peu défailli parce qu'on n'a pas pu se rendre à la dernière étape. Évidemment, la levée du statu quo pourrait quand même se passer quand il y a justement cet arbitrage‑là qui pourrait être demandé tant par nous que par l'autre partie.

3141 CONSEILLÈRE PAQUETTE : Ça n’a pas pour effet, vous pensez, de débalancer la force des négos dans la mesure où, vous, vous avez le pouvoir de retirer le service, mais le service, lui, est lié par un statu quo?

3142 M. BEAUDRY : Ça vient rétablir un petit peu de balance dans la relation. Ils sont tellement plus gros que nous, ils ont tellement de pouvoir. Puis, encore une fois, je vous répète, c'était… la raison pour laquelle on propose cela, c'est qu’ils ont des incitatifs réels à agir de façon déloyale avec nous parce qu'ils peuvent ou bien proposer des éléments déraisonnables, ils peuvent tenter de nous soutirer le contenu.

3143 Donc, tout ça, pour nous, ça ramènerait un semblant d'équilibre, pas total, mais ça nous permettrait de le faire. Puis d'ailleurs, ces entreprises‑là sont venues vous voir en disant : « On n'a pas besoin de ces règles‑là. » Donc, je ne pense pas qu'ils en seraient particulièrement désolés s'ils n’avaient pas accès à cette règle.

3144 CONSEILLÈRE PAQUETTE : Puis, dans le cas d'un joueur indépendant, ce serait quoi la règle? Est‑ce qu'il y aurait un stand still ou… dans le cas d'un diffuseur indépendant.

3145 M. BEAUDRY : Oui. Donc, ça serait un peu le statu quo dans l'application de la règle du statu quo avec les joueurs indépendants.

3146 CONSEILLÈRE PAQUETTE : O.K. Très bien. J'aimerais vous entendre un peu plus sur la question du problème d'accès dont vous avez parlé dans votre présentation, là. Ça semble assez important. On entend aussi les diffuseurs indépendants parler d'un problème d'accès aux plateformes. Alors, c'est comme le revers de la médaille, je vous dirais.

3147 Pouvez‑vous nous… Première question, est‑ce qu'on parle plus d'accès à des chaînes linéaires ou à des produits comme des applications? Est‑ce qu'on est plus dans le monde des services en ligne ou, vraiment, à l'accès à du contenu, là, dans le modèle traditionnel?

3148 M. BEAUDRY : C’est‑à‑dire que, l'exemple qu'on vous a donné tantôt par rapport à ce qui nous est arrivé avec Rogers, ça portait sur du contenu en ligne, c’est‑à‑dire l'accès à une… t’sais, une app. Et, dans cette situation‑là, évidemment, c'est pour ça qu'on demande à ce que la règle du statu quo s'applique plus spécifiquement tant aux entreprises traditionnelles linéaires que les entreprises en ligne.

3149 Parce que, comme on le mentionnait, étant donné que, de plus en plus, le contenu va migrer de plateformes linéaires à plateformes en ligne, de plus en plus, les ententes d'affiliation qu'on va devoir négocier vont inclure les droits aux applications. Même, je crois que ce qu'on appelle les droits de TV everywhere, ça devient moins prédominant ces jours‑ci au profit du contenu qui est directement fourni en ligne dans des applications.

3150 Donc, ultimement, pour nous, ce qu'il faut s'assurer dans le nouveau cadre réglementaire du Conseil, c'est qu'on soit dans un monde linéaire ou dans un monde en ligne, premièrement, on puisse avoir un accès raisonnable. Et, deuxièmement, dans le cadre d’une négociation, il ne peut pas y avoir de blackout.

3151 Et, évidemment, si le Conseil n'agit pas pour imposer un statu quo dans le cadre de négociations pour des entreprises en ligne, bien, il va y en avoir, des blackouts, puis on va se retrouver un petit peu comme aux États‑Unis où, beaucoup, il y a un manque de mécanismes pour préserver les droits des consommateurs et des parties les plus faibles dans le cadre de négociations.

3152 CONSEILLÈRE PAQUETTE : Puis, si je disais… vous me direz si je résume bien, là. En ligne, il y a un problème d'accès au contenu. Dans la distribution plus traditionnelle, c'est peut‑être plus une question de coûts et de résultats de négociations. Est‑ce que je me trompe ou pas?

3153 M. BEAUDRY : Je pense que vous avez raison de façon générale. Puis je pense que, comment on s'en sort dans le secteur traditionnel qui est encore très important, comme mes collègues le mentionnaient, c'est qu'on améliore le mécanisme de résolution de différends. Je sais que nos pairs chez Eastlink ont proposé, là, ce qu'ils appelaient le modèle Med Arb, qui faisait en sorte qu’un médiateur ou une équipe de médiateurs‑médiatrices va s'occuper d'un dossier de la médiation à l'arbitrage, ce qui aurait pour conséquence de faire en sorte que le processus est un petit peu plus continu, plus de prédictabilité, plus de… plus de manières de faire en sorte que le Code sur la vente en gros soit respecté dans le mécanisme d'échange d'offres à la médiation.

3154 À notre avis, tous ces éléments‑là font en sorte qu'au final, on aurait probablement davantage de négociations contractuelles qui se solderaient d'une façon raisonnable du côté des deux parties. Puis je pense que c'est un des éléments qu'on a soulevés devant vous cet après‑midi. C'est que je pense que, sur l'élément de l'amélioration du mécanisme de résolution des différends, il y a un certain consensus, si je peux dire, parmi des joueurs qui sont pas mal à l'opposé sur bien des autres questions.

3155 CONSEILLÈRE PAQUETTE : Um‑hum. Oui. Est‑ce que ce sont seulement les joueurs intégrés qui demandent de fortes augmentations puis des grilles tarifaires ou est‑ce que tout le monde, par les temps qui courent, cherche à augmenter ses revenus d'une façon ou d'une autre?

3156 M. BEAUDRY : Je pense que je pourrais peut‑être passer le microphone à Shaun or Heidi who can talk about the phenomenon of price increases and how they affect us with respect to VIs and independent programmers.

3157 MS. NEWMAN: Yes, we've typically seen all of our contracts at the beginning and throughout the negotiation process with pretty hefty increases, specifically when we are working with the larger programmers.

3158 We’ve tried to negotiate based on viewership, and there’s been some pushback on that, as well as channels that are losing their brand and changing names where we don’t have any control over what ‑‑ you know, they’re one network, then they change to another network, then they increase the rate on that network without any historical evidence of viewership or content.

3159 The other thing that I find interesting is that none of our contracts have any programming descriptions, there’s no game minimums, there’s no requirements by the programmers to meet any obligations for the content that they deliver to us, while we have to sign‑up for three to five‑year deals that have, you know, a structured payment period, including a PBRC that even if they don’t deliver any type of content that’s useful and worthy and valued by the customer, we get penalized by that, going back to my comment on the PBRC.

3160 COMMISSIONER PAQUETTE: Okay, thank you very much. Pas d’autres questions.

3161 LA PRÉSIDENTE : Merci à la conseillère Paquette. Merci, monsieur Beaudry. Merci à toute votre équipe. Ça conclut notre période des questions. Alors, je vous remercie pour votre participation. Je vous remercie pour votre présence. C'est toujours très apprécié. Et je vous souhaite un excellent vendredi. Merci beaucoup. Madame la secrétaire.

3162 M. BEAUDRY : Merci beaucoup. Bonne Saint‑Jean.

3163 LA PRÉSIDENTE : Bonne Saint‑Jean à vous aussi.

3164 THE SECRETARY: Thank you. I now invite the News Forum Inc. to come to the presentation table. When you’re ready, please introduce yourselves, and you may begin.

3165 Thank you.

Présentation

3166 MR. STAUTLAND: My name is Tore Stautland, I’m with The News Forum, and with my colleague Tony Greco.

3167 Distinguished Commissioners, historically, distributors and broadcasters shared a mutually beneficial relationship. Distributors needed compelling content to attract and retain subscribers, while broadcasters needed a distribution platform to reach their audience. This partnership fostered fair negotiations and ensured that the system operated in good faith.

3168 At its core, our broadcasting system was built on the principles of partnership and collaboration between distributors and broadcasters. However, the rapid consolidation of the industry has tilted the balance of power heavily in favour large distributors, leaving independent broadcasters at a significant disadvantage.

3169 In Broadcasting Regulatory Policy 2013‑374, the Commission acknowledged the problem of access to the broadcasting system for new Canadian national news services on fair and commercially reasonable terms. The Commission highlighted that such barriers posed a serious threat to the free exchange of ideas on issues of public importance.

3170 Since that time, we’ve seen even greater consolidation across the industry, which has only deepened the imbalance of power. This concentration continues to squeeze out independent and emerging Canadian players, and make it increasingly difficult for new members to gain access and grow.

3171 We need strong, forward‑looking policy measures that restore balance, promote mutual responsibility with checks and balances to ensure the Canadian broadcasting system is sustainable for all members.

3172 One of the most pressing challenges facing the Canadian media landscape today is the diminishing pipeline for the next generation of technical and on‑air talent. The once‑vibrant network of local and regional broadcasters served as critical training grounds, where young journalists and television professionals learned their craft through mentorship and real‑world experience alongside seasoned veterans.

3173 That apprenticeship model has eroded, leaving a significant gap in both opportunity and skill development. In our own experience, when hiring for specialized production roles, we are seeing a steep decline in qualified applicants. As a result, we've had to shift our approach, often accepting candidates who may lack the technical qualifications, but show strong potential and a willingness to learn, and then investing heavily in internal training and mentorship to develop their technical and leadership skills.

3174 This situation underscores an urgent need for renewed support structures and industry frameworks to help young Canadian media professionals enter, grow and thrive in this evolving landscape.

3175 The News Forum is investing in the next generation by fostering opportunities to engage in respectful, solution‑oriented dialogue. Through a politically non‑partisan youth event, attended by just under 1,000 participants aged 12 to 17, we provided young Canadians with a platform to engage constructively on the pressing issues they face in our society.

3176 Last month The News Forum produced and aired a youth‑focused special, during which $500,000 dollars in cash scholarships were awarded to support post‑secondary education for young leaders across Canada. This special drew a significant livestream audience, with several hundred thousand viewers, with 60 per cent aged 20 to 29.

3177 In a time when many young people feel overwhelmed by uncertainty, we believe it is essential to give them space to dream, to hope, and to find their voice. We are proud to be investing in their future and committed to helping the next generation shape a better world through informed and civil discourse. We are launching multiple events in 2026 targeting 10,000 to 20,000 in attendance in Toronto and Vancouver in partnerships with employers and sponsors across Canada.

3178 Large distributors spend a significant amount of dollars on promoting content with high commercial return.

3179 Without millions of dollars to spend on promoting new content, independent broadcasters need access, visibility, and time to connect with audiences. Without this, the system becomes skewed toward the loudest, most familiar voices, often promoting content from outside Canada, while our own rich and diverse Canadian stories are pushed to the sidelines.

3180 This narrows consumer choice and limits the range of perspectives available to Canadians. A healthy, democratic broadcasting system must reflect the full diversity of Canadian voices, not just those with the strongest market positions, but those with meaningful contributions to our shared national interests.

3181 In this context, how do we ensure that a variety of Canadian voices and perspectives are not only heard but also given the opportunity to grow and thrive? The current barriers to entry and discovery are further exacerbated by the rise of foreign‑owned digital platforms with algorithmic prioritization of their own content, drowning out smaller Canadian content creators, diverting advertising dollars away from domestic producers and threatening the sustainability of Canadian news.

3182 One of the key issues is the challenge of discoverability. This is often due to a prolonged onboarding process and the exclusion of these services from being properly introduced, packaged and marketed with its competitors.

3183 For new players in the national news space, access to distribution and visibility is a matter of survival. A lack of discoverability hinders not only viewership, but also the ability to attract advertisers, limiting the revenue streams necessary to sustain ongoing operations and growth in a timely manner.

3184 The objectives of the Broadcasting Act seek to ensure that Canadians have access to a diversity of voices, including a variety of Canadian perspectives on both national and international issues. The CRTC has recognized national news as a distinct genre, deserving of special regulatory support.

3185 New independent services face unique barriers, such as disproportionate bargaining power held by legacy broadcasters, limited access to essential distribution and placing a significant financial burden on producing national news on a limited budget.

3186 A new service must contend with powerful incumbents, which were launched on wide distribution, enjoyed favorable channel placement, substantial subscriber fees and advertising revenue.

3187 An independent news service also struggles to compete with incumbent news services which benefit from legacy, grandfathering and transient packaging in addition to prominent placement and favorable wholesale rates.

3188 It is essential that independent services receive the same level of access and support as their incumbent competitors. This means equitable channel position, adequate distribution across all platforms, and favourable wholesale rates.

3189 To address these challenges, we offer the following policy recommendations, which could help create a more equitable broadcasting landscape.

3190 One, the current 120‑day negotiation period with BDUs often extends far beyond the intended timeline, in our case by years.

3191 Two, new independent news services must be given swift access to distribution and subscriber fees. Delays in onboarding hinders the ability to generate the necessary revenue to build a sustainable programming service.

3192 Three, policies should articulate a path for discoverability of a new service. This would give existing viewers, particularly those over 50+, time to explore and become familiar with the new program offering.

3193 Four, without equitable access to distribution, it is impossible to build an audience to sustain advertising revenue and viewer loyalty. Policies must support the creation of a robust financial ecosystem for independent news services to build sustainable growth and to meet its CRTC mandated programming commitments.

3194 Five, CRTC policy is very clear on the obligations that come with a Discretionary National News License with a 9.1(1)(h) order. The same clarity is needed around timely onboarding, discovery and distribution with equitable wholesale rates for a new and independent service.

3195 Six, Dispute resolutions should be limited to 120 days, with an automatic forced arbitration trigger in the event that either party cannot come to an agreement within the time period.

3196 The Commission could recognize legacy subscribers as a package, given that the legacy package has existed for a decade in some cases, and precludes new independent services from being offered to these hundreds of thousands of subscribers.

3197 As an independent, discretionary national news service, we do not qualify for any news media content funding or the journalism labour tax credits, simply because we are a licensed broadcaster.

3198 Securing a fair and equitable wholesale rate is not just important, it’s essential. It provides the financial predictability we need to sustain independent content creation in an increasingly competitive news media environment.

3199 In closing, the CRTC is uniquely positioned to ensure that all Canadians have access to a wide range of perspectives and that the next generation of media professionals have the support they need to grow and thrive in the Canadian broadcasting system.

3200 Canada’s broadcasting system should continue to be a reflection of our diversity, creativity, and democratic values. The need for Canadian perspectives and diverse news voices is more urgent than ever, especially in an age where misinformation runs rampant across unregulated foreign digital platforms.

3201 Thank you.

3202 THE CHAIRPERSON: Thank you very much for your presentation. We’re happy to have you on this ‑‑ I was going to say sunny Friday afternoon, but I have no clue if it’s sunny outside. We’ve been in here since 8:00 a.m., so you tell me.

3203 I will give the floor to my colleague, Commissioner Abramson, who will lead the question period.

3204 COMMISSIONER ABRAMSON: Thank you, Madam Chair. Thank you, nice to see you here today, so thank you for being here with us.

3205 MR. STAUTLAND: Nice to see you.

3206 COMMISSIONER ABRAMSON: You’ve referred to barriers to gaining access to wide distribution in the sort of traditional system.

3207 Is the problem that we have the wrong rules or do we have the right rules, but the wrong enforcement?

3208 MR. STAUTLAND: I think you have the right rules. It is more about the enforcement being done in a timely manner. Like, there are rules, like we got our 9.1(1)(h) November 1, 2022. We made a connection ‑‑ we made an announcement to all the carriers that this is now in effect, and basically to this day we’re still negotiating with some of those BDUs.

3209 COMMISSIONER ABRAMSON: I should note, for the record, you have an unusual position, in that you’re a national news discretionary service. And so, in a way, we’ve heard other independent services talking about access rights for 9.1(1)(h) services. You’re one of the few that has the sort of access right.

3210 And what you’re telling us, and correct me, is that it hasn’t been sufficient. But the nature of that non‑sufficiency has been largely an enforcement issue. In other words, you’re saying we have the right rules, but they haven’t moved the needle for us. Correct?

3211 MR. STAUTLAND: Correct.

3212 COMMISSIONER ABRAMSON: Thank you. I mean, beyond moving more quickly, which I understand, are there specific measures you’d like to see us undertake in order to address this sort of thing?

3213 MR. STAUTLAND: In reference to that particular point? I think just, you know, again, the policies that, you know, suggest 120 days, you know, so what happens when you go past that number or past that time?

3214 You know, I think an enforcement is kind of ‑‑ I compare it to, you know, we have speed limits, but if there were never any cops I don’t think anybody would be following speed limits.

3215 COMMISSIONER ABRAMSON: So you’re saying if only we could find a way to invest in speed cameras, we’d be set?

3216 MR. STAUTLAND: I don’t know if my colleague has anything else to add?

3217 MR. GRECO: I’d just like to say that it’s not so much enforcement, although that’s important, but it’s also the BDU understanding the definition.

3218 So, for example, in the case of a new 9.1(1)(h) mandatory Canadian national news service, the rule is once you secure that licence, contracts that are in place are still valid, however the packaging and the rate structure, they must be renegotiated.

3219 And so from a BDU perspective is we have a contract in place, and so therefore we don’t have to do it. But of course the rule says the opposite of that. That’s the first part.

3220 The second part is I think the BDU understanding when you get a 9.1(1)(h) national news service, it wasn’t somebody that just rubberstamps it tomorrow morning you’re a different service; you do the same thing, but you’re different, now you have this.

3221 Once we explain primarily to independents that when you get a Canadian national news licence there are certain conditions. You must have, you know, 95 per cent Canadian content, 90 per cent news. But in terms of onerous financial cost, you have to hire reporting staff, you have to open up regional bureaus outside of your region.

3222 So these conditions cost money. And the Commission said, when they put out these rules, that ‑‑ and just to back‑up a bit, BDUs went to the Commission before the rules came in place, said, if you’re going to give another Cat C national news service licence, we want you to make it such that people just can’t apply for it, they’re onerous.

3223 The Commission came back said, great, we’re going to put the COLs higher, we’re going to introduce these regional offices, these carriage rules that increase the costs to that participant. And so when you explain to an independent, saying, we had to incur all of this when we got this, and so therefore that is why the rule says you have to renegotiate some of these things, in fairness.

3224 So, as I said, independents understand the rule now and they have, 90 something per cent of the independents, have worked out an agreement with the News Forum. Larger players, primarily vertically‑integrated players, not so much. That’s the first part.

3225 The second part is if you negotiate a contract, how do you get a fair rate for that? Because there’s distribution and there’s fees.

3226 So when you’re looking at that part, independents, again by and large, recognize the wholesale code, you know, PBRC is particularly for independents. But if you look at the larger players, and especially vertically‑integrated players, they demand PBRCs for all of their services. You cannot do a deal with one of them without incurring a PBRC.

3227 However, when they’re dealing with an independent, like this service, we don’t recognize PBRCs. So we can negotiate as long as you’re not willing to consider a PBRC. And, if we do that, we’re going to offer you onerous conditions as well, but at least we’ll negotiate.

3228 So that’s some of the background, longwinded story, but that’s the background.

3229 COMMISSIONER ABRAMSON: Not at all, and it’s helpful to have some of this colour on the record. It’s interesting, I suppose, you’re saying that you found a marked difference in negotiating as between vertically‑integrated BDUs and those that are not vertically‑integrated. Is that what I’m to understand?

3230 MR. GRECO: Absolutely. Today virtually all independents have an agreement; the larger players, mid‑size players, again, not so much.

3231 COMMISSIONER ABRAMSON: We’ve heard a few proposals at this proceeding from, you know, different groups around different intervenors, service providers, and so on around modifying the wholesale code, getting rid of it, different approaches, tweaking it, strengthening it.

3232 Based on your experience, is there anything you’d like us to think about in that regard? Are there any of the proposals you’ve heard that sort of sound good to you?

3233 MR. GRECO: Well, I think, in general, the wholesale code is well‑intended and it’s well‑drafted. But the wholesale code relied on three things: it wanted to deliver choice of the subscriber; it wanted to deliver flexibility to the BDU; and, it wanted to deliver the ability to forecast revenues and protect distribution, and so that was sort of the three prongs to it.

3234 How do I achieve that? And the Commission said, great, we’ll give the BDUs the ability to have flexibility, customers get choice, and for you, the network, you have a PBRC which puts some leverage, they can’t reduce you, your subscriber base, with penalties, and you can forecast on that.

3235 The problem was it required that everybody participate in fairness. But if you could cherry pick and say, well, I’m gong to take the flexibility that I can have with my BDU, I’m not going to recognize the quid pro quo, which is I’ve got to treat the network this particular way, that’s where it falls apart.

3236 So the answer would be that you could have the wholesale code, but the conditions have to be enforceable so that if you are going to have this flexibility, then the condition is you also accept the PBRC. Or, another way of doing would be, if you have a PBRC and you’re a vertically‑integrated company and you require PBRCs, then independents also are required to have PBRCs.

3237 It’s not brain surgery.

3238 MR. STAUTLAND: I think, just to continue with that, you know, when we started this process, we were motivated by the invitation to provide a different perspective, not just be a copycat of something else, actually dig into the Code, dig into, you know, our society and provide a different perspective, be an independent player.

3239 And you know, so when we looked at, you know, the overall regulation and said, you know, from what we could see from the Commission and from various policies throughout time, there's an attempt with news. This is important behind news to get access to audience. There's an importance in the intent. It's important to the messaging to do this, to have versatility in the system.

3240 So when we looked at those policies, we were going like, Well, obviously, there's a system already that we can plug into so that we can concentrate on this world full of diverse content. I mean, you know, the world is spinning at a high speed. We spend 90 per cent of our time just trying to keep up and provide, you know, helpful content for our viewers, you know.

3241 But at the same time, we're spinning on the backing of this. Basically you got people that are basically going like, Well, we're not going to turn you on, or, We're going to put you in some, you know, some package, you know, that has 10,000 people in it or whatever. And so we have to continue to fight this battle.

3242 And I'm going, saying, well, if the intent of the Commission is clarity around some of these issues, then I'm saying let's maybe become a little bit more clear about it and then put some conditions in place and some timelines that actually helps us not to have to fight this battle for two years. That would be the ‑‑ and I don't see this as a massive start because most of the intent and all the framework is already there. It's just putting some definitions around it.

3243 COMMISSIONER ABRAMSON: Understood. Thank you.

3244 You know, you focused largely on access to BDU distribution. Of course, there is a whole online world out there. Has the News Forum explored online distribution as a means for increasing its audience reach? And you know, so how is that going? And I know the News Forum does its own direct consumer distribution online. You have your own website. But you know, have you looked to integrate with some of the online platforms that we have been discussing here this ‑‑

3245 MR. GRECO: Are you referring to over‑the‑top, for example?

3246 COMMISSIONER ABRAMSON: Sure, yes, over‑the‑op, just, you know, to the different Amazons and Apples and ‑‑

3247 MR. GRECO: I will let Tore answer, but part of what I'd like to contribute is sort of the critical path was let's get all the BDUs done. Once we get that done, then let's go on to those other platforms. We're still working on the BDU side, so.

3248 MR. STAUTLAND: Yeah, part of this was established in the economics. Right? So when we don't have a wholesale rate and we don't have actually penetration in a big chunk of the country, and that process of onboarding is taking so long, then we've had to mitigate, you know, with other type of tools.

3249 But going to a FAST channel, we felt going and exploring other things actually was going to work against us. Going back and saying, Well, you know, to a BDU, Hey, we need distribution on you and we need a wholesale rate. And them going like, Well, you know, by the way, we're bypassing you over here on the FAST channels.

3250 We figured, Well, you know, let's get the primary system in place, and then we can look at what is explored on the side. Because these are not driving. You have to have a pretty large sense of content and volume of content in order for you to generate any kind of, you know, real revenue out of it, from our perspective, what we see, and what we hear.

3251 To your point, we have connected with a couple of FAST channels. I'm still waiting for reports. I don't know what they're doing, and I haven't seen any money from them. So I mean, so again, you know, what do we want to do with that?

3252 In terms of these other initiatives that we're taking, I mean, we spent an enormous amount of money actually investing in building a viewer base, you know, on Meta and on Facebook and on Instagram. And then, as you know, it just went black one day.

3253 So you know, we felt ‑‑ you know, I struggle with vulnerability while spending so much money and focus on foreign platforms only to know that if I said ‑‑ if somebody said something somebody else didn't like, boom, the feed just stops. Or you've been barred because you said something in the news feed that we feel concerning to our audience or some kind of thing. Then I have to go back to them, to YouTube or somebody else, and then say, Oh, by the way, we're a news channel. We talk about troubled issues all day long.

3254 For Meta, for example, it took us four months to register as a news organization in order for them to apply a different filter, I suppose, in order for us to be allowed to have certain content go through. And we're trying to go through that process with Google and other platforms as well. We do obviously recognize the need of that penetration and participation in it.

3255 We have 90 different digital platforms. So we're very engaged in it, but mostly from an audience engagement perspective and from a perspective of being able to communicate back and forth with audiences. So we're very engaged in it.

3256 Like I said, in this last youth special that we just did, I mean, we had just under half a million actual streamers, a couple hundred thousand on one platform alone. So we were very, very pleased with it, and a young audience. So I mean 10 to 29, it's not like we're going to find them on television. So obviously, so it's kind of interesting to see how it's splitting on the 50‑plus on broadcast and then on, for example, on X or YouTube or Direct Digital it actually splits into a very, very young audience.

3257 COMMISSIONER ABRAMSON: Interesting. So it sounds like you're almost building two separate audiences on different media ‑‑

3258 MR. STAUTLAND: One hundred per cent.

3259 COMMISSIONER ABRAMSON: Thank you. You have talked in different ways in your submissions and here today about diversity of voices and perhaps diminished diversity of voices resulting from Ministry consolidation. As you may know, we have a cross‑media ownership policy which seeks to limit the overall concentration that one corporate group may have across different media. And it's something that we've talked about in this hearing. Do you have a view on whether our cross‑media ownership policy is effective? And if so, what we should do to revise it, eliminate it, strengthen it, et cetera.

3260 MR. STAUTLAND: Can you give me an example? Cross‑media?

3261 COMMISSIONER ABRAMSON: Well, I suppose across television and radio and newspapers in the past has been where we've tended to look.

3262 MR. STAUTLAND: Yeah, I mean, I don't think it is so much a question of limitation. You know, I think the more Canadian voices, the better. Right? So I think the issue is basically that's all the people in the same category of licensing, particularly when it comes to the obligations that are placed on a national news service, and with 9.1(1)(h), it comes with significant obligations. And we're very committed to those obligations. We're basically saying that, hey, if we're putting in the same obligations as everybody else, then at least let's level the playing field in terms of the entry level.

3263 I mean, once you get past the entry level, like no news service and no entry organization of any size, you know what I mean?, is going to require or lean on wholesale rates as your primary income. That's not the basis here. You know? You need to grow. You need to expand. And advertising is very important. You know?

3264 But like, you know, we were talking about the PBRCs; we were talking about different things. That's been one of our biggest tensions is the fact that we realize that, you know, packaging and a change of packaging in multiple places have said, Well, you have full access. But I'm saying, you know, it's like if you're going to a BDU that has only packaging, for example, and ‑‑ at Pick Pack, say, for example ‑‑ and they're saying, What's the intent that, hey, here's the rules. The rules is therefore a new player comes into this service. You're welcome. Here you come in. And you're available to all of our people. And you have one person choosing you, so therefore you're available to one. You know. And as a new person, thinking, well, How do I solve this problem? Well, then it's up to you to spend, you know, millions of dollars to market yourself in that region or in that market in order for you to generate new voices.

3265 Well, in the end of the day, then you have to go ‑‑ you know the barrier ‑‑ the amount of money that you have to spend to gain the same leverage as, for example, an incumbent that was launched on wide distribution and with packaging and everything like that. And when the packaging changed in 2015 and 2016, that they were just ‑‑ they didn't just change into viewer choice. They got grandfathered. They got grandfathered into legacy and into wide distribution on those same cases.

3266 Well, we're not available in that. We're not ‑‑ it's not part of the policy for us to be able to automatically, you know, enter into that same legacy package.

3267 MR. GRECO: Yeah, I think Canadian national news service was a victim of timing. So in 2013, when the Commission said Canadian national news is of vital importance to Canadians; it's of vital importance to the Canadian broadcast system; it allows Canadians democratically, socially, economically, culturally to appreciate their regions, their country in a diversity, it went on to say, And because of that, we believe it should be on basic service. Then the Commission goes on to say, However, we don't want to increase the fee to the subscriber, so we're not going to do that at this point in time.

3268 This is 2013. And the Commission's vision would have been there's basic, and there's extended basic. If we'd leave it the way it is, some BDUs will carry it on basic. The rest will carry it on extended basic. But at the end of the day, we still have 90‑plus penetration.

3269 Fast‑forward 2015, Let's Talk TV, 2016, Wholesale Code, and it says, BDUs, you're allowed to just offer Pick Pack. So what you have ‑‑ and it's a unicorn. There hasn't been in a decade a Canadian national news service. You have this unicorn comes through, and it says, We're in Pick Pack. We're in less per cent than one per cent of the penetration in this province, less than one per cent of the penetration in that province. On average throughout the country, maybe four or five per cent penetration. And you compare that to the decision when you gave the 9.1(1)(h) national news service that it should be in every home. We're a far cry from every home. And that's some background again.

3270 COMMISSIONER ABRAMSON: Sure, no, thank you. And of course you are talking about availability for subscription in every home as opposed to mandatory subscription in every home.

3271 Listen, I think you're right in a way. We don't have many services that have stepped forward to become national news, discretionary services. And so we appreciate that you've entered the fray, as it were. And it's been interesting to hear about your ‑‑

3272 MR. GRECO: And as a final point ‑‑

3273 COMMISSIONER ABRAMSON:  ‑‑ your travails.

3274 MR. GRECO:  ‑‑in 2008, the Commission did state, We feel we need another Canadian national news service. And in 2013, these rules were passed. A decade later, the unicorn comes across, but the rules of course did not take that into consideration a decade previously.

3275 COMMISSIONER ABRAMSON: Understood. Thank you for sharing your story with us.

3276 Madam Commissioner, Madam Chair, those are my questions.

3277 THE CHAIRPERSON: Chair, Commissioner, whatever ‑‑ (to‑MAY‑to), (to‑MAH‑to) (phonetic). Thank you, Commissioner Abramson.

3278 Perhaps one last question on a completely different topic is the role of data and to what extent this is something you feel is particularly challenging or helpful. There has been some suggestion that the Commission should play a role, for instance, in publishing aggregated data to help guide the negotiations in between the various actors in the broadcasting system. Do you think this is a role that the Commission should take on? I'm just interested in hearing your views more broadly speaking about data.

3279 MR. STAUTLAND: Yeah, I find data very, very difficult because, you know, a lot of people come to us and say, Well, how many viewers do you have on digital? How many viewers do you have here? How many young viewers? Who viewed what? How many impressions do you have? How long is a view? How long is an impression? You know? You have all these different definitions.

3280 We can go to, for example, on digital platforms, we can go to five, six, seven different services and ask them for the same analysis, and I can have a million view differences in just, you know, one scan. So getting data and real data and good data is very, very, very difficult.

3281 When it comes to television as a whole, Numeristat data, we get spot data. We can't afford a full subscription of that yet, so we get periodic data. But it is interesting, you know, when they say, Well, this is the data. But it excludes this province and that province and because we don't have enough data over there anymore. So I'm saying, okay, so we have, you know, in several of our BDUs' regions, we basically can count on, what, three people or four people representation in the entire place. So we then go and look for other data sources in order to say, Well, how did we get that? But then we go to an advertiser and say, How do you want your data? Well, we only take data from BBM data and that's it. So unless you have it there, see you later.

3282 So clarity, volume, better ‑‑ we need.

3283 THE CHAIRPERSON: But is there a role for the CRTC? That was the gist of my question.

3284 MR. STAUTLAND: Well, if you are not doing it, who would? I'm fine with anybody doing it, as long as somebody's doing it.

3285 THE CHAIRPERSON: All right. Thank you. That's a nice way to end this period question. If not us, who else?

3286 All right, thank you so much. This concludes our question period for today. So thank you for taking the time to come and talk to us. It's always extremely important for us to hear from the various players in the broadcasting system. And we wish you a Happy Friday.

3287 J’en profite, madame la secrétaire, pour souhaiter à tout le monde une bonne Saint‑Jean et une bonne Fête nationale des Québécois et des Québécoises et une bonne fin de semaine, et remercier l’équipe pour tout le travail exceptionnel d’appui. Je suis sûr que mes collègues commissaires se joignent à moi pour remercier tout le monde. Alors, merci beaucoup.

3288 Madame la secrétaire, je vous passe la parole.

3289 THE SECRETARY: Merci. The hearing is adjourned for the day and will resume at 9 a.m. on Wednesday, June 25. Thank you.

‑‑‑ L'audience est ajournée à 16 h 03 pour reprendre le mercredi 25 juin 2025 à 9 h 00

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