8991 Commissioner Noël. --- Off microphone 8992 COMMISSIONER NOËL: I'm not as good as you are in the English language, so maybe my questions will look a little raspy, but I will try my best. 8993 I appreciated your presentation, it was quite amusing, but I will stick to your application if you don't mind. 8994 I have a number of questions and they will be by blocks, so we will start with your experience. 8995 You mentioned that you had some experience in the U.S. with a low power -- 8996 MR. PACHUL: Yes. I had quite a bit of experience. Actually, when I was about 15 years old I got hooked up with this one guy. 8997 COMMISSIONER NOËL: I will ask you my questions and then maybe you can answer. 8998 MR. PACHUL: Oh, okay. You would like to ask the questions first and then I answer them, or -- 8999 COMMISSIONER NOËL: Yes. 9000 MR. PACHUL: Okay. I'm sorry. 9001 COMMISSIONER NOËL: It works better that way. 9002 MR. PACHUL: Okay. 9003 COMMISSIONER NOËL: You mentioned that after you graduated from the Pennsylvania State University you became the Program Director of York Access TV in York, Pennsylvania. In what year was that? 9004 MR. PACHUL: That was 1977, if I recall, just before release of "Saturday Night Fever." Yes, we had -- 9005 COMMISSIONER NOËL: You were in your early 20s? 9006 MR. PACHUL: Yes. I was actually very young for that type of position. I was 22 years old. 9007 COMMISSIONER NOËL: You stayed there for how long? 9008 MR. PACHUL: I was there -- well, what happened was, we ended up getting fired. I got fired along with the founder of the station, and that is why I'm not very keen on this non-profit model. 9009 COMMISSIONER NOËL: I hope it wasn't for cause. 9010 MR. PACHUL: Actually, what happened was, we were a bit too progressive in our programming and the Board of Directors didn't like it. I think that was what it boiled down to. 9011 COMMISSIONER NOËL: Okay. 9012 MR. PACHUL: But we did an awful lot of programming back in those days. 9013 COMMISSIONER NOËL: But those were quiet years, you know, the '70s. Nothing to compare with the late '60s and early '70s. You were in the late '70s. 9014 MR. PACHUL: Well, I actually did it in the late '60s too, when I was 15 years old, that is when I actually got started in it and I worked for a profit-making cable station in the west shore area of Harrisburg, Pennsylvania. I met up with this one guy, he is still my personal friend, Gerry Gilbert. 9015 He actually was one of the pioneers of the early days of live TV. He was the floor director for the Arthur Godfrey Show, if anyone can remember Arthur Godfrey. This is going back many, many years. 9016 Back then everything was live. We got involved in all types of community programming at that time. I was the host of a teenage dance show. We did all types of sports coverage, football, basketball. I think we once even did a snowmobile race in a blizzard. I had quite a bit of experience there. 9017 COMMISSIONER NOËL: Okay, but this was before they had laws to protect children from working too young. 9018 MR. PACHUL: I wasn't working. I was volunteering. 9019 COMMISSIONER NOËL: You were volunteering. 9020 MR. PACHUL: I actually started working -- well, actually back then you could start work when you were 15 years old, but I actually started working for the station when I was 16. 9021 COMMISSIONER NOËL: Because now there's all sorts of regulations against children working. 9022 MR. PACHUL: I was fairly young, yes. I admit it. 9023 COMMISSIONER NOËL: If we sort of wrap it up, you had about a year's experience maybe at the low power -- MR. PACHUL: Oh, no, it was longer than that. 9025 COMMISSIONER NOËL: I'm talking the Access TV. 9026 MR. PACHUL: Oh, no. After that year was up, I still volunteered at that station. What happened was that the people got rid of us, eventually somebody got rid of them and then we were back in again for a few more years after that. 9027 The problem was we alienated the people that were giving us the grant money, so we were out of luck on getting any more money for salary fundings. 9028 COMMISSIONER NOËL: Okay. So you had that experience in your twenties. 9029 MR. PACHUL: Yes. 9030 COMMISSIONER NOËL: Since 1978 you have been working in all sorts of related activities. 9031 MR. PACHUL: Yes. I worked for Televisual Corporation. I sold advertising, local advertising, for about seven years. I also produced all local breaks for Televisual. Televisual at that time had licences to rebroadcast three UHF TV channels out of Philadelphia. 9032 Also, I learned a lot about programming and counter-programming from the Philadelphia independent stations. They are really masters at counter-programming the networks. 9033 COMMISSIONER NOËL: You indicated in your application, and I don't have the exact page, that there about 1,600 local low power stations operating in the U.S. 9034 MR. PACHUL: Actually, there are about 2,000 now. That figure is incorrect. There are actually more low power stations than there are full service stations in the U.S. presently. I have been just reading up on this. 9035 COMMISSIONER NOËL: Could you tell us how these stations differ at all from the community channels operated in Canadian companies. 9036 MR. PACHUL: Well, for one, they are distinguished by local ownership. Another thing, they are separate from any other entity. They are not owned by the cable companies. The cable companies generally do not have any interest in these. 9037 Also, they work on a profit-making model. They are not non-profit stations. They sell local advertising. It's very difficult in the low power business to get any type of advertising agency recognition. 9038 The big stations don't really bother much with low powers because they know they are not really their competition. 9039 COMMISSIONER NOËL: On another footing, do they have operational relationships with cable companies in the sense that low power stations get carried on cable? 9040 MR. PACHUL: Well, it's kind of like a double-edged sword cable coverage there because, for one, they won't give cable coverage if you are not in one of the lower markets. Mandatory cable coverage is cut off at about the 150th market. Also, if you are in a bigger market, the only way you can get on is if you have a certain percentage of the audience. I think it's something like 3 per cent of the audience, but if you are not on cable, how are you going to get the audience to get on cable? 9041 COMMISSIONER NOËL: But they don't have in the bigger markets carriage of cable. 9042 MR. PACHUL: Generally they do, but the cable companies actually provide them with the carriage independent of any government mandate. 9043 COMMISSIONER NOËL: It's not mandatory. 9044 MR. PACHUL: No, but they still do it. You know, I don't think they have the same type of conflict that we are having here with our opposing interventions. There's actually more of a spirit of cooperation. 9045 For instance, a prime example is one station that I can talk about is in Santa Monica, California. It's KPAL. They have only been on the air for six months and they are already carried by about three different cable services. None of the cable services had to carry them at all. 9046 COMMISSIONER NOËL: Now -- 9047 MR. PACHUL: They do it on strength of programming. That's how they do it. 9048 COMMISSIONER NOËL: Okay. Now, if we go back to your experience. You mention in your CV that you established North Star Media in 1985. 9049 MR. PACHUL: That's correct. 9050 COMMISSIONER NOËL: Are you still involved with the -- are you still the owner of North Star Media? 9051 MR. PACHUL: Yes, but the last few months, truthfully, I have been neglecting my business to try to get this station going. 9052 COMMISSIONER NOËL: Okay. Would there be any links between North Star Media and the station -- 9053 MR. PACHUL: No. I plan on closing North Star Media once, you know, we get into the station. There won't be any links at all. They will be closed. Too much of a conflict of interest to try to keep everything going. 9054 COMMISSIONER NOËL: Okay. Let's move to something else. You have proposed a revenue scheme based on advertising. 9055 MR. PACHUL: Yes, that's correct. 9056 COMMISSIONER NOËL: Some of it would be selling advertising and some of the revenues would come from producing advertising. 9057 MR. PACHUL: Yes. 9058 COMMISSIONER NOËL: Can you be more explicit as to how you arrived at your annual predictions of price per spot and sell out rates for advertising? 9059 MR. PACHUL: Well, what we tried to do is we knew that when we first got on the air, we wouldn't have much name recognition, so we would have to come up with a fairly low price to entice people to buy advertising. 9060 Certainly one of the biggest things is that we get some kind of cable coverage because my experience in the U.S. was as soon as you walk into an advertiser, the first thing they ask you is what channel are you on cable. If you can't come up with a positive answer there, you already got a problem. 9061 COMMISSIONER NOËL: So you count that you would be carried on cable. 9062 MR. PACHUL: Yes, but we did come up with a compromise on cable which I think you have in front of you there somewhere. 9063 COMMISSIONER NOËL: Okay. Now, in those projections did you consider at all audience projections and, if so, in what way? 9064 MR. PACHUL: Well, I think the way those projections were done, they were done on a rather simple formula because I felt that if I tried to get into a too complex formula, it may not work. 9065 What I figured we would do, well, initially we would have to produce a lot of spots if we are doing local advertising. Okay? The formula for the financials is very simple. You sell 200 customers a year, you produce their spots to go with it, you keep 50 per cent of them and then sell 200 every year and just keep on doing it. 9066 While the percentage of spot availabilities decline, you start inching up the average price per spot. Now, the average price per spot is based on -- we are on a schedule which means that if there is a specific placement, okay, we would charge more for that. We might charge -- I think the figure we have thrown around is about $50 a spot for a specific placement. 9067 COMMISSIONER NOËL: For what? For a one minute spot? 9068 MR. PACHUL: Thirty second spot. 9069 COMMISSIONER NOËL: Thirty seconds. 9070 MR. PACHUL: Yes. We pretty much base everything on a 30 second spot. I would say my experience has been 90 per cent of all the spots are thirties. 9071 COMMISSIONER NOËL: How would you charge to produce a 30 second spot? 9072 MR. PACHUL: Well, I think what we were doing was we were working on an average of about $1,000 a spot which is fairly cheap, but it's pretty easy to do with new technology, especially if you are working with this new digital equipment. We could come up with very high production values for very low cost. That's mostly a function of the new technology that is out right now. 9073 COMMISSIONER NOËL: Now, could you give us examples of the type of -- I know you don't have national in the first year, but the type of national, regional and local advertisers that you would be targeting and what is the breakdown of revenues between those types of advertisers? 9074 MR. PACHUL: Well, I really don't expect much national advertising at any time. You see that in my projections. We started very low. I think most of it as far as national advertising would probably be more like boutique agencies, smaller agencies. 9075 I have had experience working at large agencies. It is very tough to break into those. Unless you have got an outstanding book, you are pretty much out of luck, especially if you are a new guy here. 9076 On the other hand, I think in general the way television is structured in Toronto, there is a need for local advertising because the only station from my recollection that can sell local advertising in the Toronto market would be CFTO because all the rest are regional stations. 9077 Consequently, if you bought a spot on one of those stations it would have to go on the air everywhere. For instance, you buy at a spot at City-TV, you would be watching it here. That's a rather inefficient method of advertising. 9078 So I think that's why we have such a concentration on local advertising, plus also we found that in the past it's fairly easy to sell your neighbour, you know, somebody across the street. They want to be able to see their spot in maybe 20 square blocks. They don't care of their spot gets on in Ottawa here. 9079 I don't know if I have fully answered your question there. Maybe I should elaborate a little more. 9080 COMMISSIONER NOËL: No. It will do. Okay. 9081 Now, let's go to your audience, your targeted audience. 9082 MR. PACHUL: Yes. 9083 COMMISSIONER NOËL: You have indicated in your plan to target 329,000 persons that reside within your principal marketing area, which is Toronto, Wards 23, 24, 25 and 26. 9084 MR. PACHUL: Yes. 9085 COMMISSIONER NOËL: And up to 1.25 million persons that reside within the Grade B broadcast contour of your proposed service. Can you give us an idea of the portions of Toronto that is included? To me this means nothing, Wards 23 to 26. 9086 MR. PACHUL: Okay. Well, if you look at our broadcast site at Main and Danforth and you go west of there towards downtown, then that would pretty much cover those wards. 9087 The wards that we are specifying are the wards where we have the highest RF signal strength. So, like in those particular areas we will be the best station that you can pick up off the air. That's how we arrived at that calculation. 9088 Also, if you look at those particular wards, they are right in the Beaches area. The Beaches seems to be a rather outstanding community for civic pride. They really get involved in their community. We felt that if we wanted to get something like this going, the Beaches area is the place to do it. 9089 If you read our interventions, it is quite clear what type of community the Beaches is. So, I think that had a lot to do with targeting that particular area. 9090 COMMISSIONER NOËL: Okay. Can you estimate how many persons within both the Grade A and Grade B contours you would expect to reach during the start up of your operations? 9091 MR. PACHUL: What our audience would be like? 9092 COMMISSIONER NOËL: Yes. 9093 MR. PACHUL: Well, I would estimate initially, if we can pull off 3 per cent of the audience I think we would be doing pretty well, which is like probably a little more than what a specialty channel would be looking at in audience. 9094 Independent stations in the U.S. that have a similar style, I would say 3 per cent is probably what they are getting. An outstanding independent station in the U.S. would get 10 per cent audience share all the time. That's probably realistic. 9095 COMMISSIONER NOËL: So, roughly, 10,000 people in the initial stage? 9096 MR. PACHUL: Yes. I would say maybe a little more than that. If I wanted to throw out some figures I'd throw out 25,000 to 30,000, something like that initially. Once we get going, yes, it would be a lot bigger. 9097 COMMISSIONER NOËL: That's a bit more than 3 per cent, according to my math. 9098 MR. PACHUL: Three per cent of -- we are talking 329,000 and 3 per cent, yes, you are right. 9099 COMMISSIONER NOËL: Well, I went to school the old way and we didn't use calculators in those days. 9100 MR. PACHUL: I use Tractenberg's system of speed mathematics. 9101 COMMISSIONER NOËL: Okay. How would that increase over the years until the end of the initial term of seven years? 9102 MR. PACHUL: I would think that the station would not do much better than 10 per cent no matter what we broadcast. I think that is probably the peak and that's fairly similar to the demographics you would see in a U.S. city like Philadelphia or Buffalo, New York or something like that. 9103 COMMISSIONER NOËL: How many hours per week do you think your viewers will watch your channel? 9104 MR. PACHUL: That's a good question. I would be happy if we could get five to ten hours a week. Now, from what I can tell from the people we talked to, there is going to be quite a few people interested in "Public Forum" and quite a few people interested in local sports. 9105 Also, there is a lot of people who expressed interest in the movies as an alternative to watching news. There are other people who share my distaste for news programming. 9106 COMMISSIONER NOËL: Now, I have a question and I don't know what happened to that generation, but it seems to have disappeared from your business plan. You are targeting people from the ages of five to nineteen and then 35 and over. 9107 MR. PACHUL: Yes, that's correct. 9108 COMMISSIONER NOËL: What is the missing link here? 9109 MR. PACHUL: Well, the missing link is stuff other people do. For instance, CityTV targets more of a younger crowd, so does MuchMusic and so do other outlets in the area. So, we figured why duplicate that crowd. 9110 Also, another thing, if we start them young, we have got viewers for life. We don't particularly want to be trendy either. I think that has a lot to do with it. 9111 We have a few built-in constituencies that we wanted to address. One of those constituencies are the hearing impaired and that's a whole story about how I got involved with them too. 9112 COMMISSIONER NOËL: Yes. 9113 MR. PACHUL: In general, it would be prudent for a station to target an older audience that has money. The baby boomers is the largest pool of money you could possibly target right now. 9114 COMMISSIONER NOËL: You are one of the late boomers? 9115 MR. PACHUL: I'm actually one of the early boomers because I'm 45. The late boomers would be about 55 I think. 9116 COMMISSIONER NOËL: For me, early are those born in '45, so I put you in the late boomers category. 9117 MR. PACHUL: Yes, I see what you are saying, yes. 9118 COMMISSIONER NOËL: Now, if we go to your capacity to invest. From your financial projection it appears that you will be profitable from day one, which is a very ambitious plan. But if it doesn't materialize, if your projected advertising revenues aren't there what will you do to make the things happen? 9119 MR. PACHUL: I've got investors calling me every day, but nobody wants to give me a dime without a licence. It's the chicken and egg approach, no licence no money. I got that message loud and clear from Bay Street. 9120 You know, you can't have somebody working out all the financials before the guy has a licence. 9121 COMMISSIONER NOËL: Besides Bay Street where, you know, those people are -- how will I put it -- they ask a lot of questions before they invest into your business. Besides Bay Street do you have any other people in mind who would put in some money in your -- 9122 MR. PACHUL: I have a brother who's a millionaire for starters. 9123 COMMISSIONER NOËL: Pardon? 9124 MR. PACHUL: I have a brother who is a millionaire for starters. 9125 COMMISSIONER NOËL: And does he agree? 9126 MR. PACHUL: Well, so far he has financed me -- 9127 COMMISSIONER NOËL: Will you just spend his money? 9128 MR. PACHUL: To tell you the truth, so far I've spent about $50,000 of his money just to do this, just to appear today. In fact, he even financed this trip right now and the suit I'm wearing too. --- Laughter 9129 COMMISSIONER NOËL: Now, let's go to something else. We will go into programming. There are many similarities between the programming proposals found in your application for a low power TV station and some of the community channels provided by cable operators. How will you propose service will be different from those offered by local communities? 9130 MR. PACHUL: The only similarities I have seen is that we have some talking heads and they have some talking heads. 9131 Now, what we are trying to do is we are trying to get away from talking heads because you look at Rogers' intervention, the only programs they are talking about are talking heads, which I consider a very boring type of programming. We were trying to get away from talking heads. Even in "Public Forum" we hope to break up the talking heads with streeters, which is a man in the street interview that relates to the topic at hand. Also, we plan on using quite a few graphics and other materials to present our shows. 9132 Also, I really don't see the similarities, I think what you could do is you take the Rogers' intervention and you could lump all the shows that they are saying are similar to ours into one show which is "Public Forum". So all we are really doing is doing one show that might cover some of the same ground. 9133 One point I always make is why should a community channel only be available to people on cable? Isn't there like a bigger community outside of cable? 9134 Also, how did this high status all of a sudden been ascribed to a cable station? That's what I would like to know. 9135 COMMISSIONER NOËL: Still talking about that subject, do you see yourself in dire competition with them, with the community cables for your staff, your volunteers, your programming concepts? 9136 MR. PACHUL: No. For one, the people we have run into from Rogers TV were not really taught in the style and the manner that we desire. 9137 For instance, one thing we ran into when we were doing some pilot shows, the people who were volunteering at Rogers, the camera person would think nothing of engaging the on-the-air talent in a conversation on the air. This is totally unacceptable behaviour; yet this is common behaviour at Rogers Television. 9138 You have to realize that our culture is totally different than theirs. We are not into this Rogers superiority thing that they seem to be into. They claim that our programming has to be clearly inferior to theirs. 9139 COMMISSIONER NOËL: So you are not competing with them. 9140 MR. PACHUL: No, not at all. 9141 COMMISSIONER NOËL: You are on another path. 9142 If we go back to staffing, when your proposed station begins to broadcast, how many fulltime and part-time staff will be directly involved in producing the programming? 9143 MR. PACHUL: I think we are looking at nine employees, if you add the fulltime and part-time together -- it would come to nine fulltime. I think that three of them are mostly administrative, and the rest of them would be involved in production; about six. 9144 The model would be similar to a lot of other stations where maybe 80 per cent of everybody that is there is a volunteer. The idea is to have the paid staff be extremely qualified people so they could be teachers and teach other people broadcasting techniques. 9145 Another thing is that the control room operators have an enhanced role in our station, because they also have to direct the live shows. A lot of our programming is live broadcasting. 9146 So the control room operator has an enhanced role. 9147 Another thing you have to realize in the way the station is run is that it is 100 per cent computerized. 9148 For instance, I was just reading some transcripts of a hearing you had just recently with the Knowledge Network, where they are having problems coming up with logs. They could not come up with a proper calculation of what their Canadian content was. 9149 We don't have that problem. We are going to have a custom FoxPro program to keep track of all that. 9150 I hate to say it, but we are eliminating a fair amount of people with the sophisticated computer system. 9151 COMMISSIONER NOËL: Let's go to your programming. You mention in your application that the cornerstone of your programming or your proposal would be the access to the station by the public and independent producers. 9152 You referred to four programs that would be produced by independent producers. One is Tomorrow Today; one is Vibeplus; A Sense of Place; and the Superior Fishing Show. 9153 And we are back into sports. We had a couple of days of sports. 9154 MR. PACHUL: I see. 9155 COMMISSIONER NOËL: Do you still have commitments for these productions at this time? This was also referred to in your previous -- 9156 MR. PACHUL: Yes, we do. Also, we have several extra commitments that came in. If you read the interventions, there are approximately 11 program proposals in the interventions. Since the closing of the interventions, I got three more proposals. 9157 In my response to the CAB, I think I have a sheet that lists the extra commitments that we got. 9158 COMMISSIONER NOËL: What percentage of your schedule would feature independent producers? 9159 MR. PACHUL: As much as we can. What we would like is a model similar to Internet ISP where you are the pipeline for people's content. I think the criteria is to have as many independent people on the air as possible. The less programming we personally produce the better. That is pretty much the concept. 9160 The idea behind easy access was to make it easy. 9161 COMMISSIONER NOËL: Do you have a development plan for the sector to ensure that they continue to have an easy access to your station? 9162 MR. PACHUL: Yes. We are willing to make certain commitments to people. 9163 For instance, let's say you really don't have funding for your show, but we like the idea. We will let you put the show on for maybe three, four months, six months, without any payment. You put on advertising and you keep the money to get the show going. 9164 Those are the types of plans we intend to offer. 9165 Another thing, by allowing people to sell their own advertising, we are also ensuring the financial viability of the station. It is almost like the Avon lady, or Amway. 9166 Then again, there are people like Charlene, who just want to get on the air, period. So we don't have a problem with that. We will put her on the air. 9167 COMMISSIONER NOËL: Your station is supposed to be community oriented, but you have a fly fishing show -- 9168 MR. PACHUL: Yes, that is correct. 9169 COMMISSIONER NOËL: -- that is produced from Thunder Bay. As far as I remember, Thunder Bay is quite a distance from Toronto. 9170 MR. PACHUL: Yes. But it is not produced in L.A., is it? 9171 COMMISSIONER NOËL: Do you have any other producers that are out of town that you have in mind? 9172 MR. PACHUL: Well, this woman I have known for quite a bit of time through North Star Media. There are few other people that we do know. 9173 In her case, if you had seen the show you would know why I would want to put it on. It is so nice and serene. It is such a contrast from the city. It doesn't have any Toronto attitude in it, which I consider quite important. 9174 Also, one thing I want to emphasize is that she is Canadian. She isn't from the U.S. And she is real too. She is not a figment of my imagination. 9175 COMMISSIONER NOËL: You stated that these programs would be provided on a barter basis and that you would share the advertising inventory with the producers on a contract basis; a 50/50 split per hour or as determined by the contract. 9176 MR. PACHUL: Right. 9177 COMMISSIONER NOËL: Could you give us more details about the way you are going to do that. 9178 MR. PACHUL: What happens is somebody comes up with a show idea. They can either hand us the tape and just pay us to run it, which I think a fair amount of people will do. But a lot of people will require production assistance. 9179 What we will do, if the idea is something that we consider viable -- and sometimes, even if it is not viable, we will still take a chance on it. 9180 It is kind of like old vaudeville where they let anybody on, but if the program didn't work or it didn't go over, they got out the big hook and pulled you back. 9181 In our case, let's say you have a program that is on and I can't even schedule one spot on it. Then we have a problem. If advertisers tell me "I don't mind your station but don't put me on that show", well, then I would consider it not to be viable. 9182 If we are on a schedule -- take Charlene, for instance. She comes in there and we produce a show for her and she goes on the air. But she doesn't want to sell advertising; she just wants to do it. That is certainly allowed. She will just become part of our run of schedule advertising and that's how we will make money on it. 9183 COMMISSIONER NOËL: Let's go to advertising for a minute. Will you produce any of the commercials for these programs? 9184 MR. PACHUL: Absolutely; most of them. 9185 In fact, that is our biggest problem the first few months, is producing all the advertising material. 9186 COMMISSIONER NOËL: One little concern that we have is that you indicated you would sell blocks of air time at reasonable cost to producers for programs to meet your guidelines and format. 9187 What are the guidelines to which you refer? 9188 MR. PACHUL: It is right here, the Viewers Bill of Rights. 9189 COMMISSIONER NOËL: The Viewers Bill of Rights. 9190 MR. PACHUL: Yes. 9191 COMMISSIONER NOËL: Would you retain, as the licensee, the responsibility for all programs broadcast? 9192 MR. PACHUL: Absolutely. What we would like to do is, as much as possible, remain at arm's length from the producers. We do not want to influence content. 9193 But if there is a problem with the content, it is not going on the air. For instance, one thing that we are going to be pretty strict on is any type of abusive comment, any type of personal attacks. 9194 For instance, take our open line show when we are on "Public Forum." If there are any types of personal attacks, they are not allowed. You have to stick to the issue. 9195 COMMISSIONER NOËL: You would cut -- 9196 MR. PACHUL: Yes. What we would do is -- let's say somebody made an inappropriate remark. We would immediately rebut the person. We would say: "Sir, this is not allowed on this program. You are off the air." 9197 So there would be immediate rebuttal, and they would be immediately cut off. 9198 Also, as far as independent producers, I think that it would be prudent for us to have the person submit taped shows until we trust them. 9199 COMMISSIONER NOËL: That was my next question, your viewing committee or something -- 9200 MR. PACHUL: Yes. We plan on establishing a committee of the public at large to review this because I don't want to be the final arbitrator of what is going on. I really don't. You know, to have -- 9201 COMMISSIONER NOËL: You don't want to be the censor. 9202 MR. PACHUL: I don't want to be the censor. Yes, that's a better word. Yes. 9203 COMMISSIONER NOËL: Okay. Now station productions. 9204 From your application it appears that station productions by staff and volunteers represent approximately 22 hours on the block program broadcast schedule. There would be 11 hours of original programs repeated once each week. 9205 MR. PACHUL: Right. 9206 COMMISSIONER NOËL: There is another 19 hours of local access time available, 10 hours on weekends and nine hours on weekdays. 9207 You have stated that you have experience with low-power television stations in several cities in the U.S., sufficient experience to transfer your knowledge to a Toronto station. From that experience, who do you think will come forward with proposals to fill those time slots? 9208 MR. PACHUL: I think the easiest way to answer that question is refer you to the proposals that just came in through the interventions. You know, I think the biggest problem we have with proposals for programs is people are cynical, especially in Toronto. They figure: Well, CRTC won't ever give you a licence, so why bother? That is the kind of attitude people have. 9209 In fact, the press is the same way. We never were able to break into the mainstream press other than CBC. That's it. The rest, has been marginal press. 9210 So there has been this cynicism about the operation which I think will totally change once we get a licence. 9211 The same with, you know, finances. It all hinges on the licence. No licence, no nothing. 9212 COMMISSIONER NOËL: Okay. 9213 How many people do you consider will be needed to produce this amount of programming? 9214 MR. PACHUL: Most of that programming is very similar to what we did in Access TV. We had a full-time staff of six and we were doing about 20-25 hours a week of original programming. It wouldn't take much more than what we had called for in the application. 9215 COMMISSIONER NOËL: More or less six people. 9216 Could you tell me why volunteers would be interested to work for free for a profit -- 9217 MR. PACHUL: Mostly for experience. Excuse me? 9218 COMMISSIONER NOËL: -- for a profit-generating enterprise? Because you are not a not-for-profit company. 9219 MR. PACHUL: Well, I think we are a marginal profit-generating enterprise, because if you look at the amount of money that I plan on taking out personally, I must be awfully committed to the operation to only want to earn, after taxes, $12,000 the first year. 9220 Also, another thing, a lot of people will do it to achieve experience. Also, once they have achieved that experience, and we are hiring more people, we always will go back to that pool of volunteers. We won't hire from the outside. 9221 COMMISSIONER NOËL: You have experience in the field. On average, how many hours would it take you to train a volunteer to a point where they can produce programs without assistance? 9222 MR. PACHUL: Without assistance? A lot has to do with how much of a background they have to begin with. But if you go look at all the various applications we have, oh, I would say we have got quite a few applications from people that have already gone through various programs, like, for instance, Ryerson, Seneca College, so they already have some background. 9223 I think what is required more than anything else is they need to know something about the digital equipment we are running, how to do digital editing. But if you start somebody from scratch, obviously it would take years to do it, you know, but, the thing is, most of the people that are showing up already have some background from schooling and they are just looking for hands-on experience. Now, those people, they could be brought up to speed in a few months. 9224 In Access TV, the way we always did it, we always started people out as camera people and work your way up from that, because it is pretty easy to teach somebody how to run a studio camera and then, you know, you work from there. 9225 Some people are fairly gifted. One of the individuals that is going to be appearing, Robert Loucks, he is sitting there, he was able to run the control room after a few hours. But then, he is I think pretty much a techie. 9226 COMMISSIONER NOËL: Okay. 9227 When we discussed programming, you told me that you might have a board to review the programming. 9228 MR. PACHUL: Yes, that's correct. 9229 COMMISSIONER NOËL: What about feedback from the population? Will you have a way of gathering feedback -- 9230 MR. PACHUL: Oh, absolutely. Yes. 9231 There are several methods of getting into the station. For one, we have a videoconferencing server running on the Internet, if you want to use that method. You can call us up on the phone, and I will actually call you back and answer the phone personally, which I doubt would happen at Citytv, that Moses Znaimer would actually answer the phone. 9232 For one, you can send in a press release. It is not going to go into the wastebasket, which is I think what happens at a lot of places now. 9233 I think what is happening is the media in Toronto seems to have this agenda and it doesn't seem to include the local community. They are into this bigger thing where they are national but yet they try to be local when there is no local. Time and time again, we have people telling us they can't get on the air and they can't get coverage for their event. 9234 I think one of the problems we do have, since we have targeted wards versus that larger audience, we have to find a balance between our targeted wards and the larger audience. What we tried to do is come up with programming that would be suitable for the whole market. 9235 For instance, if you take city council coverage, well, everybody that is in the city limits would be interested in that. That's what we try to do, we try to -- 9236 COMMISSIONER NOËL: We will come to city council. 9237 MR. PACHUL: Yes. Okay. 9238 COMMISSIONER NOËL: I have one more question pertaining to your production. The thing we saw on the screen is your studio? 9239 MR. PACHUL: Yes. 9240 COMMISSIONER NOËL: It seems like there is not much space in there. You were rolling on a chair with wheels and stuff like that. 9241 How do you plan to do your Junior Talent Hour and your Oldies Dancing in that area? 9242 MR. PACHUL: Well, for one, that is rather inaccurate because we have an extra 2,000 square feet in addition to that. You see, when that was shot, that was two years ago, we just had the industrial unit that you see there. It's about 1,500 square feet. 9243 Since then, we have taken over a storefront next door which is about 2,000 square feet. 9244 COMMISSIONER NOËL: Which would be big enough for the older people to dance. 9245 MR. PACHUL: Yes. Well, the dance show, there are several venues we can do that at that are just close by. For instance, we have a community room in our co-op because we are running out of the Main/Gerrard Co-Op. We have a facility right across the street from us that we can use, which is Ted Reeves Arena. 9246 COMMISSIONER NOËL: And you just move your equipment there because -- your electronic equipment? 9247 MR. PACHUL: No. We have a truck. We have a truck. 9248 COMMISSIONER NOËL: Oh, you have a truck. Okay. 9249 MR. PACHUL: Yes. We just put everything in the truck and we use a 2.4 gigaHertz low-power transmitter and just feed it back and that's it. 9250 COMMISSIONER NOËL: I see. 9251 MR. PACHUL: I don't know if you are really very familiar -- that video didn't really show very much of what our location is like, but we have a lot of venues right around our area. That's one of the reasons why we picked it. 9252 COMMISSIONER NOËL: My experience, in a previous life, was more with construction and telecommunications. I was a bit surprised about your proposal that the CN Tower might fall down because we actually built it. It is very solid. --- Laughter 9253 MR. PACHUL: I don't think we are referring to that. We were more referring to a lack of electricity, which did occur last summer, when all the Toronto stations were off the air because a substation blew up and there was no power to the CN Tower. We were totally functional. I think we were referring more to that. 9254 Also, if you are looking at it from an emergency point of view, when Hurricane Hazel blew through there it flooded the whole downtown out. We are on high ground. We would still be on the air. 9255 COMMISSIONER NOËL: Going to the City of Toronto, you mentioned -- did you have any further discussions with the City of Toronto concerning the broadcast of the programming from City Hall? 9256 MR. PACHUL: Oh, sure. Sure. I had probably a few discussions with them on several occasions. 9257 COMMISSIONER NOËL: Do you have a feeling that you have an agreement with them, or are you still in preliminary discussions? 9258 MR. PACHUL: I think what it boiled down to is we took it about as far as we could without a licence, you know, because I think a big problem I have with this whole procedure you have here is, you want us to pretty much work out a station before we even have one. How much can you do on speculation? I think that is the big problem I have with this, because we basically build a station on speculation. 9259 COMMISSIONER NOËL: I raise that because, if I counted right, there are 23 to 24 hours that is devoted to City Hall. 9260 MR. PACHUL: Yes. One point I do make, if you look through the intervenors there, we do have two positive interventions from our local city councillors, so that means we at least have two votes already. 9261 COMMISSIONER NOËL: How many do you have to get? 9262 MR. PACHUL: I don't think we will have a problem doing it, mostly because the City of Toronto is quite unhappy with Rogers' television coverage. That's the reason why they are talking to us because they want to produce the program themselves, and they don't really feel that Rogers Television is presenting them in the best light presently. So we hope to alleviate that problem. 9263 COMMISSIONER NOËL: Okay. 9264 MR. PACHUL: Also, another point about city council, Rogers has been cutting them off around 6:30. Usually when city council goes past 6:30 p.m. there is something really heavy going on. This really infuriates the city more than anything else, because the most important things have been occurring after 6:30 p.m. Rogers hasn't been covering any committee meetings at all. 9265 They talk about pool cameras. There is no such thing as pool cameras at City Toronto. They own all the equipment. They don't need Rogers for nothing, other than distribution. 9266 COMMISSIONER NOËL: Now let's go to your other programming, namely movies. 9267 There are more broadcasters and distributors competing for programming. Are you confident that the movies will still be available? You mentioned in your application that there were a number of movies where the rights have expired -- 9268 MR. PACHUL: Yes. 9269 COMMISSIONER NOËL: -- that weren't available. Are you confident that you can find those movies? 9270 MR. PACHUL: Yes. Well, I have new information since that application was written. You have to realize, I wrote that application almost a year ago exactly. 9271 COMMISSIONER NOËL: Yes, December of last year. 9272 MR. PACHUL: Since then I have found many different ways of acquiring public domain films. I have a listing of expired rights of about -- at the present time about 3,000 films. I have found that E-Bay has a very big listing of lasers for sale. At last count I think they had 6,500 lasers. I was able to recognize several hundred public domain titles right there. 9273 Also, since then DVD has come out and I have recognized about 80 DVD public domain films. 9274 Now also, another thing about public domain, a lot of it is trash. So you have to watch a lot of movies to know which ones are good and which ones aren't. 9275 COMMISSIONER NOËL: How do you know when a movie has entered the public domain? 9276 MR. PACHUL: Well, it's a rather complicated process. Most of these movies are in the U.S., okay, so what happens is the original copyright -- that is assuming they copyrighted the movie -- is good for 28 years. Now, in the 28th year they can renew it for an extra 47. 9277 I think the whole thing changed after the year -- I believe 1968. I think that now everything is under the Berne Convention, which means that the original copyright I believe is 47 years. So most of these movies would be prior to 1968. 9278 Now, there are other people that neglected to copyright their movies period, which is the case with American Pictures International. They neglected to copyright almost every movie that they made. 9279 COMMISSIONER NOËL: They probably fired their legal counsel. 9280 MR. PACHUL: Well, they must have fired somebody because -- just to give you an idea of some of the stuff American Pictures International did that they never copyrighted: Did you ever hear of those Bikini Beach movies with Frankie Avalon and Annette Funicello? Can you believe they neglected to copyright that material? 9281 COMMISSIONER NOËL: I am from French origin. I don't know these films. --- Laughter 9282 COMMISSIONER NOËL: Now, when you purchase or acquire a movie like that, does it mean that others won't have access to it or it's more like you are buying it on the shelf and you are putting it in your system and anybody else can show it at the same time? 9283 MR. PACHUL: No. Anybody else could show it, but as a rule I have never really seen many public domain works on the air in Canada other than Citytv. I would say a high percentage of the stuff they run overnight is public domain. I have seen some there. 9284 But, in general, most of these movies have not gotten any type of air play at all in Canada, but it is a big thing for low power stations in the U.S., this public domain. 9285 COMMISSIONER NOËL: Okay. Now, you also have an educational aspect -- 9286 MR. PACHUL: Yes. 9287 COMMISSIONER NOËL: -- to your programming and you were mentioning the NASA programming. 9288 MR. PACHUL: Yes. 9289 COMMISSIONER NOËL: With respect to that feed, is it all the time available or -- 9290 MR. PACHUL: It's on fairly consistent. The educational programming for children that we were referring to at five o'clock is always on and it has to do mostly with space exploration. 9291 A lot of the stuff they have on is live from the shuttle. For instance, they will have kids -- they allow kids to interview astronauts on the shuttle. I think a lot of it is to inspire kids to get involved with the heavens. 9292 Like I am fond of saying that we have real space on rather than fake space like "Star Trek." 9293 COMMISSIONER NOËL: Will you take part of the feed and build an educational program around it, or will you take the whole feed? 9294 MR. PACHUL: We will take the whole feed and there is educational material that goes along with those feeds and we will make those available to the market. 9295 COMMISSIONER NOËL: So you will take the whole program and just air it? 9296 MR. PACHUL: Oh, yes. Oh, yes. 9297 COMMISSIONER NOËL: Now, you mentioned that there were guidelines to follow pertaining to the use of the NASA logo. 9298 MR. PACHUL: Yes, that's correct. 9299 COMMISSIONER NOËL: Do you know what they are and how they -- 9300 MR. PACHUL: Mostly that you do not use the NASA logo for financial gain, which we don't really plan on doing. 9301 COMMISSIONER NOËL: But this is public domain? You don't have to acquire rights? 9302 MR. PACHUL: Yes. Just log onto NASA Web site and it's quite clear there. They specifically state that it's in public domain. 9303 COMMISSIONER NOËL: Okay. Now let's go to more technical considerations. 9304 MR. PACHUL: Okay. 9305 COMMISSIONER NOËL: I have a couple of questions in that regard, not that I am technical myself, but -- 9306 MR. PACHUL: That's okay, I'm a techie so I don't mind. 9307 COMMISSIONER NOËL: You will help me. I have learned how to put the computer on and off. It's not that bad. 9308 Your application is based on the use of a low power UHF television Channel 15, which is a drop-in allotment in Toronto. 9309 MR. PACHUL: Right. 9310 COMMISSIONER NOËL: We have had word that that channel could interfere with a Buffalo channel, a religious station, and maybe it would not be the best -- 9311 MR. PACHUL: No, not really -- 9312 COMMISSIONER NOËL: -- frequency available. 9313 MR. PACHUL: I don't really see the interference, for several reasons. 9314 For one, the station is 90 kilometres away. 9315 COMMISSIONER NOËL: Is not -- I'm sorry, I didn't hear you. 9316 MR. PACHUL: The station is 90 kilometres away. 9317 COMMISSIONER NOËL: Yes. It's across the lake. 9318 MR. PACHUL: Yes. It's about 90 kilometres away. 9319 I don't know if you are familiar with the horizon, they are 1,000 feet up and the average height above sea level of Toronto I believe may be about 200-220 feet. So you have about 800 feet to work with. They basically would hit the horizon at about 45 kilometres. 9320 So the only possible way you could even pick up the signal is if you were at a high point because it would be a combination of both high points, okay. But most of our viewing area is at about 75 metres above sea level. So there wouldn't -- there is nothing there. There is nothing to pick up. 9321 Also, they are low power station and they have applied for a directional pattern -- a non-directional pattern and they are running directional pattern now. 9322 COMMISSIONER NOËL: Now you will have to help me. Which will mean? 9323 MR. PACHUL: Which will mean that they are concentrating on their local audience. Because previously I think their concept was to run a directional signal into southern Ontario and compete against Channel 36 in Burlington, CITS, but since then they abandoned that plan. 9324 After the DTV regulations came out Channel 15 is actually the DTV companion for channel -- I believe it's 43 that doesn't exist in Hamilton. So that means that they would have to protect that frequency. That is in Hamilton. 9325 So I think that -- and the FCC has been pretty strict about low power stations protecting the DTV assignments. 9326 COMMISSIONER NOËL: Let's say that channel is working fine, but you are not protected from interference by a regular station operating on standard channel allotment, whether or not those regular stations are established after you have commenced operation or before. So if in the hypothesis that you have some problems, what would be your solution? 9327 MR. PACHUL: I really don't understand what kind of problems you are talking about. Could you be more specific? 9328 COMMISSIONER NOËL: If you cause interference, you are not protected. You have to locate the frequency. 9329 MR. PACHUL: Well, who are you talking about specifically we would cause interference to? I think that you need to be more specific as to who the interference is being caused to. 9330 COMMISSIONER NOËL: Other broadcasters. 9331 MR. PACHUL: Well, there wouldn't be any because we are running a clean transmitter. We run power mosfet technology. We use extremely tight filtering so there is next to no spillover on adjacent channels. You could be a few miles away from the transmitter and still watch an adjacent channel because the ratio would be about a hundred to one on the adjacent channel. 9332 COMMISSIONER NOËL: I'm not very familiar with that field. Okay. 9333 MR. PACHUL: If I wanted to elaborate on the interference question, the only real possible interference which is totally remote would be to Channel 19, TVO. Now, if there would be a case, if you were really close to the tower and there was interference from us, we would supply a filter to filter out our station. 9334 That's under the Industry Canada regulations. We plan to scrupulously adhere to the Industry Canada regulations. 9335 COMMISSIONER NOËL: Even if your filters didn't work, do you have an alternate channel. You know that you would be required under the regulations to -- 9336 MR. PACHUL: Well, for one, the filters would work. I don't know how familiar you are with RF, but you have got to realize that it would be rather impossible for us to cause interference to Channel 19 because there's such a difference between the power ratios of the two channels. 9337 If anything, we have to accept interference from 19. 9338 COMMISSIONER NOËL: Okay. Let's go to a line of questioning where I feel a bit more at ease than interference. 9339 Coverage. Would you please explain to us the reasons why you have chosen to apply for a licence to operate a low power television station rather than the higher power regular station in Toronto. 9340 MR. PACHUL: Yes, several reasons. For one, we could never afford a high power application. For one, I would have to hire a consulting engineer to do the technical when I can do it myself. Okay? The fee would be, oh, I would say at least $20,000 to $30,000 just for the application. 9341 Also, the transmitter is extremely expensive and the achilles heel of a high powered station is the electric bill. That's usually what gets you, the electricity required to run it. 9342 COMMISSIONER NOËL: Okay. Now, is your object to operate that proposed low power television undertaking a permanent service or is it an interim cost effective solution in your mind? 9343 MR. PACHUL: Well, we would like to go full power and be the biggest station in Canada at some point in history. I think it's more of a stepping stone. You have got to realize another thing too, what is the future going to bring. 9344 If high speed Internet takes off, everything we are talking about right now is going to be irrelevant five years from now. I don't really have a crystal ball as to, you know, what actually will occur. 9345 I will say one thing. If you look at our proposal, we are planning to go digital TV year four. We have a fair amount of money allocated for that. 9346 COMMISSIONER NOËL: We will come to that. Are you confident that your target of coverage area in the grade B contour will be satisfactorily served? 9347 MR. PACHUL: Oh, pretty much. We are going to have a pretty good reception mostly because we have direct line of sight. We don't have anything in the way. If you go on top of 275 Main Street, you will find that it's all low rise until you get to the downtown towers. 9348 For Low power TV, you must have line of sight. We have several efficiencies in the plant which makes our signal fairly good. For one, since we are running off the top of a building, our RF cables are going to be very short. We are looking at about maybe three metres worth of RF cabling. If you are running a tower, you are losing maybe -- if you are running a high UHF channel, you are losing maybe 30, 40 per cent of your signal right in the transmission cable. 9349 You have other problems too with antennas. The way the CN Tower is operating, they are using one main antenna to broadcast everything, which is totally inefficient. They are wasting most of their power going up that stack which we are not having. We have antennas that are designed specifically for the frequency we are using. They are cut antennas. 9350 COMMISSIONER NOËL: Okay. We will go on with another question. Did you conduct any measurements of the off air received signals during the period when you held your development licence? 9351 MR. PACHUL: Yes, absolutely, all over the place. 9352 COMMISSIONER NOËL: And what were the results? 9353 MR. PACHUL: They were quite satisfactory. In fact, two of the people appearing today actually watched our off air signal. That's why they are here today. They watched the experimental licence on the air. They were pretty far away from the station too. 9354 The one individual, Robert Loucks, he watched us with a black and white set with loop antenna approximately, I don't know, six, seven kilometres away on the wrong side of the building. He picked it up and he watched it. 9355 COMMISSIONER NOËL: Those black and white TVs were very sensitive. 9356 MR. PACHUL: Yes. I admit they are extremely sensitive. Yes. 9357 COMMISSIONER NOËL: What means would you employ to rectify any signal deficiencies that might occur within the -- 9358 MR. PACHUL: I tell you, the biggest problem we have in that regard is that Industry Canada is limiting our power. Now, I would be very happy to put on a transmitter power of 500 watts, as you recall in our notice here, but you know that's incorrect, don't you, a transmitter power of 500 watts. It's actually radiated power of 500 watts. 9359 The limit is not me. I would want to run the maximum, but Industry Canada is limiting us to that power at that height. I will say one thing about Industry Canada, if there is the coverage problem that you are referring to, Industry Canada said I can go back and make an argument for more power at that time which I plan on doing. 9360 I wanted to have a 500 watt transmitter power right off the bat, not 500 watts ERP. That would give us an ERP of about 5,000 watts, but they told us we couldn't run that much power at that height. 9361 COMMISSIONER NOËL: Do you have plans to establish any other similar low power TV transmitters or to expand the service to other parts of Toronto, assuming that additional low power TV channels could be found in the area? 9362 MR. PACHUL: Yes, absolutely. We plan on being the flagship station for a nation-wide movement. We wanted to be characterized by local ownership. We don't want to own the stations. We don't mind assisting people, but we don't want to own it. I think there's a real problem with diversity of ownership in Canada. 9363 COMMISSIONER NOËL: Okay. Do you have any future plans to convert your station to a regular high power protected service should the current application be approved and, if so, what time frame do you have in mind? 9364 MR. PACHUL: Well, it depends upon how fast we take off. Now, one thing you have got to realize about the financial plan there. Okay. This is a worst case scenario. Okay? The reason why it's a worst case scenario is because I didn't want to come to you a year after we got the licence saying "Oh, we can't do this". 9365 We thought that our financial plan is doable. On the other point of view, we didn't want to exaggerate what we would be doing because we didn't want you to question "Well, there's no reasonable expectation you are going to come up with it". 9366 The station could take off. You know, we might be coming back here three, four years from now to apply for a full power station. 9367 COMMISSIONER NOËL: Do I understand that all your equipment is already available? 9368 MR. PACHUL: Oh, yes, it's all in place, it's all ready built. What we did was we basically built a station on speculation. That's what we did. 9369 COMMISSIONER NOËL: So the costs of the equipment is not in your -- 9370 MR. PACHUL: No. There is no cost because it is already there. It is basically financed through my regular North Star Media business because I had a studio operation anyhow. Then you see, like Spyro was saying, I had this bug back in 1994 where I wanted to run a station. 9371 MR. VENDOURAS: That's where Jan has his talents of gathering bankruptcy equipment, going down behind, getting the soldering gun out and building it from scratch. It's really nice equipment that he refurbished, I got some of his equipment by bartering with him. "I'll give you so many hours work if you will give me so much equipment". 9372 COMMISSIONER NOËL: I understand. What I would like to know is your North Star company will actually give that equipment away to the new station. 9373 MR. PACHUL: Well, you see, since I am applying for this station as an individual they are still my assets. So even though I am dissolving the company, I've still got the assets of North Star Media. 9374 See, I don't really have the problem of transferring the assets of a corporation because I'm not a corporation. 9375 COMMISSIONER NOËL: North Star Media is not a corporation? 9376 MR. PACHUL: No, it never was. It was a sole proprietorship and so is Star Ray TV, so where is the problem with transferring the assets? That was one of the reasons why I wanted to do it as an individual because I knew I had the problem of transferring the assets. 9377 COMMISSIONER NOËL: Okay. 9378 Now, let's go to some other considerations, one that is the scarcity of the television channel allotment in Toronto. 9379 MR. PACHUL: That's a myth. 9380 COMMISSIONER NOËL: On page 6 of your application in section 8.3.6 you made the following statement: "We plan a migration to a fully digital plan within four years. Our transmission plant incorporates broadband amplifiers and antennas permitting the easy addition of extra digital channel. We plan on being early adopters of digital broadcasting." (As read) 9381 Could you explain a bit more what you mean by this statement? 9382 MR. PACHUL: Well, for one, there is a big movement to go to DTV in the U.S. I believe all the top markets already are on the air with DTV transmitters. What we wanted to do was be one of the first ones that runs a DTV channel in Toronto. We have already looked at some major manufacturers that may be interested in financing such a venture, people that are related to the computer business, -- 9383 COMMISSIONER NOËL: Do you envisage that migration with the low-power station or do you anticipate that you will convert to a high power regular Class C station before going digital? 9384 MR. PACHUL: I think that the digital probably will be full power because I think the original plan, from what I can tell, is most DTV channels will be low power when they first go on air until there is enough TV sets sold. I think the big problem with DTV right now in the U.S., they have a fair amount of stations on air, but so far they have only sold 25,000 sets in the whole U.S. 9385 You see, we have another idea where we can make some kind of deal with the computer manufacturers, so you can watch DTV on your computer off the air. So, I think that's the direction we are planning on going into there, where we do have a convergence between the computer and regular television, but not quite the way a lot of people envision it. 9386 COMMISSIONER NOËL: You mention that were doing your own engineering and so you are not using a consultant? 9387 MR. PACHUL: I am the consultant. 9388 COMMISSIONER NOËL: You are the consultant. Okay. Have you conducted any studies to determine whether or not there is a possibility to add other low-powered TV channels as drop ins in the Toronto area? 9389 MR. PACHUL: Yes, there are quite a few channels available. In fact, there is a lone DTV channel assigned to Toronto. I believe it is channel 21, is it? It's one of the lower end UHF channels. 9390 Also, a point I would like to make about scarcity of spectrum space, that's a total joke because the U.S. doesn't even have the land mass of Canada. Okay? You are looking at 2,000 low-power stations on the air, 1,500 high-power stations. 9391 Now, using CRTC figures that I have in front of me here somewhere, there is a total of 156 stations on the air in Canada. Does that ring a bell? Is that about right, 156 stations of various programming undertakings? And there are 38 in Ontario. 9392 So, if you are looking at spectrum space, you should be able to put on at least as many as the U.S., which is 3,500. So, I think we have got a long way to go there. 9393 As far as the Toronto market, if you go and look at New York City, there are approximately 30 UHF stations on the air there and they are fitting it all in the same spectrum space. Now, they are doing it somehow. 9394 So I don't know where this idea came up with that there is scarcity of spectrum space. There is a bunch of allocated channels that nobody ever applied for in Toronto. Channel 30 recently was allocated DTV to Global. That never was applied for. That's a full service station there. Channel 53, I think it was channel 62, what else, maybe channel 67. There is a bunch of channels -- we are talking assignments. We are not talking about short spacing anybody. This is just assignments. 9395 COMMISSIONER NOËL: Have you ever discussed this with Industry Canada? 9396 MR. PACHUL: Absolutely. Many times. I have a history going back for years. 9397 COMMISSIONER NOËL: What's their feeling about that? 9398 MR. PACHUL: Well, they seem to have given us a broadcast certificate for this frequency. Actually, they like us, mostly because I think techies talk the same language, I think has a lot to do with it. 9399 COMMISSIONER NOËL: We are probably on a different wavelength because I am not exactly a techie here. 9400 Do you anticipate that this proposed low power TV station can be sustained over a long term? 9401 MR. PACHUL: Oh, absolutely, especially in Toronto. 9402 If you go and look at the surveys we did on target businesses, I think the whole market has 45,000 businesses. I think our target market has 10,000 businesses. Now, it is rather ludicrous to think that we can't sell 200 of them a year, which is basically what the whole business model is based on. 9403 Selling 200, having a turnover of 50 per cent a year and producing the commercials to go with them; so I think that's a fairly easy method to make money. It's certainly easier than what I am doing right now. 9404 COMMISSIONER NOËL: Now let's go to something a little bit more contentious. If I read from your supplementary brief on page 3 of section 29.3, you say: "This station will differ from a current and traditional attempts at providing community access is that as a low power transmitter it is rooted in a geographic location." (As read) 9405 Which means what you want to serve are those four wards, if I read correctly. 9406 MR. PACHUL: That's correct, yes. 9407 But then I think what needs to be explained is the balance between those four wards and the larger coverage area, we have to establish some type of balance between the coverage of those four wards and the greater market that we are covering. 9408 COMMISSIONER NOËL: Which is still over the air? What I am aiming at is cable carriage. 9409 MR. PACHUL: All right. 9410 COMMISSIONER NOËL: So we are talking community, at a small level, over the air low power transmitter. 9411 You are aware that under the current provisions of section 17(1)(c) of the Broadcast Distribution Undertaking Regulations all Class 1 and Class 2 cable distribution undertakings are required to distribute the programming of local TV stations on their basic service. Have you had any discussions with any cable distribution licensees in the Toronto area concerning possible future carriage of your low-powered television stations on their cable? 9412 MR. PACHUL: No, we haven't really had any discussions with them, but I don't really think they want to talk to us from what I can tell. 9413 COMMISSIONER CRAM: Have you reached -- no, you haven't reached any tentative understanding. 9414 MR. PACHUL: I think this Star Ray cable TV compromise that I handed out today was an attempt to reach some type of compromise with the cable people. 9415 COMMISSIONER CRAM: Okay. I see what you wrote. From our assessment, the carriers involved would be Rogers and Shaw and they would be required to distribute the proposed station, if approved, on their basic service. Do you think it could be accommodated on basic service? 9416 MR. PACHUL: Well, the only way it could be accommodated on basic service, I don't think Rogers would like too much because Rogers Television is not mandated cable coverage. But I doubt they would give us Channel 10. I don't really see any type of consideration in the Broadcast Act for a cable community channel. This is not a primary service. 9417 But I don't think that will occur. I think that would be about the only accommodation, but I am sure that Rogers would not go for it. 9418 COMMISSIONER NOËL: Would you object to an arrangement with Rogers and Shaw that would exempt them from the requirement of distributing your signal? 9419 MR. PACHUL: We remove about two-thirds of our income if we did that, if we were just an on-the-air service. 9420 COMMISSIONER NOËL: So your business plan is based on being carried on cable. 9421 MR. PACHUL: Absolutely. How else would you do it? 9422 There are a fair amount of people that watch off UHF, but I don't know if there is enough there to increase our programming values. Obviously if we are removing all this money out of the system, what are our programming values going to be like? We are always going to be marginal station. I think we need to have some cable access. 9423 But we are willing to accept any channel, just as long as it is unencoded. 9424 COMMISSIONER NOËL: Let's go back to digital. Your financial assumptions indicate that you anticipate a gradual conversion to a digital plant with digital broadcasting projected in year four. 9425 Conversion to digital is going to be a very expensive proposition for commercial conventional TVs. That is what we hear all the time. 9426 Can you tell us about your plans for digital TV? 9427 MR. PACHUL: For one, we are fairly digital already. We can produce programming 100 per cent digital, right up to going on the air. We can run it off hard drives. In fact, all of our commercials will be 100 per cent digital. 9428 So we already have a fair amount of digital infrastructure. 9429 It is a little early to go 100 per cent digital, because some of the technology is still not in place. 9430 We have a little device here just so people know what it is like these days to do digital. This is a digital camcorder. This thing puts out a picture that is comparable to a betacam. 9431 Do you know how much this thing costs on the market right now? Twelve hundred bucks. That's it. 9432 We can take this picture and feed it directly into a computer using firewire, edit it, and output it, and it is ready to go on the air just like that. We are replacing a million dollars worth of AB roll equipment just like that. 9433 That just gives you an idea of how powerful the new technology is. 9434 I think, in general, we have not found too many broadcasters that are very inclined to do digital. A lot of them are looking for a turnkey solution like Avid, which is big bucks and you really don't get anything for it. 9435 I have been experimenting with digital now since 1995, and I have been pretty much upgrading constantly and continuously. I think in three, four years it will be amazing what we can do. 9436 It is amazing already what we can do. 9437 COMMISSIONER NOËL: Can you tell me what your capital costs would be to convert? I understand, from what you said, that they would be minimal. 9438 MR. PACHUL: Sure. For one, all you would have to do is throw in another transmitter. We would just use the same antennas; just multiplex the antennas. 9439 Initially, I think what a lot of people are going to do is convert their analog stream to digital with the converter. I doubt we will be taking that route. I think we are going to do it exactly the opposite. The analog channel will have an analog converter, and the digital stuff will just run the way it is: digital. 9440 COMMISSIONER NOËL: So you don't see any major capital investments. 9441 MR. PACHUL: Yes. Mostly because we are very advanced right now. I think we are more advanced than most people in Canada when it comes to digital. 9442 COMMISSIONER NOËL: Therefore, you don't have a financing problem. 9443 MR. PACHUL: Not at all. We are looking at standard hardware. With that one camera there, we are replacing a $15,000 betacam. 9444 COMMISSIONER NOËL: Now let's go to our policy and the nature of service and conditions of licence. 9445 The Commission, as you know, does not yet have a policy on the over-the-air TV stations in the urban communities. 9446 MR. PACHUL: Yes. 9447 COMMISSIONER NOËL: To assist us with your proposal, we reference the community radio policy and the policy on low power TV in remote communities contained in Public Notice 1997-8. 9448 Both policies expect community undertakings to be owned by local residents and to offer programming that is relevant to all members of the community. 9449 Therefore, the Commission may wish to impose restrictions or limitations on your undertaking in order to ensure that the basic nature and/or parameters of the stations don't change. 9450 The following items are based on the specifics of your application and could become conditions of licence. 9451 I will read to you a list of possible conditions of licence, and I would like you to tell me if you agree to have these form part of the description of service that could become a condition of your licence if this application is approved. 9452 (a) local ownership of the station. 9453 Could you say it so that -- 9454 MR. PACHUL: Well, I think -- 9455 COMMISSIONER NOËL: It is just that the system doesn't register signs. 9456 MR. PACHUL: I already have local ownership. I live about a block away from the station. 9457 COMMISSIONER NOËL: Would you agree that the station must contribute to diversity in the market and reflect the interests and demographics of what you have called the neighbourhood? 9458 MR. PACHUL: Absolutely. I think that is quite obvious in what we are trying to do. 9459 COMMISSIONER NOËL: When I asked you to answer, it is because the system here doesn't catch your nods. 9460 MR. PACHUL: Yes, I understand. 9461 COMMISSIONER NOËL: And (c), that at least 75 per cent of the programming be from local sources, provides access to local residents and that a high percentage of that programming be directly related to the community. 9462 MR. PACHUL: Yes, agree with that 100 per cent. I really do. 9463 COMMISSIONER NOËL: That the Canadian content broadcast on the station exceed regulatory requirements in both daytime and prime time evening hours. 9464 MR. PACHUL: Yes. I think that the Viewers Bill of Rights makes that quite clear. 9465 COMMISSIONER NOËL: And that any non-Canadian films or other non-Canadian programs have been produced prior to 1975. 9466 MR. PACHUL: Yes, because most of the films would be prior to 1968 in order to quality for public domain. 9467 COMMISSIONER NOËL: Would you accept as a condition of licence the Canadian content percentages you have made in your applications; i.e., 80 per cent in each six-month period, both in daytime and evening broadcast periods? 9468 MR. PACHUL: Sure. We plan on -- this is our guide, this Viewers Bill of Rights. We are not going to deviate from this under any circumstances. We are not going to be like The Knowledge Network. 9469 COMMISSIONER NOËL: We noted in your application in Schedule D that you referred to industry codes. 9470 Would you accept as a condition of licence that adheres to the broadcast code for advertising to children? 9471 MR. PACHUL: Yes, absolutely. 9472 COMMISSIONER NOËL: And the CAB's guidelines on sex role portrayal? 9473 MR. PACHUL: Yes. We are very respectful of women; we are. 9474 COMMISSIONER NOËL: I think I have covered the grounds I wanted to cover. 9475 Thank you. 9476 THE CHAIRPERSON: Commissioner Cram. 9477 COMMISSIONER CRAM: Mr. Pachul, I read your 100 per cent Canadian content during prime time and 80 per cent Canadian content overall, and I recognize where you are coming from, which is a technical background. 9478 You do recognize that Canadian is Canadian, as we define it. 9479 MR. PACHUL: Right. 9480 COMMISSIONER CRAM: And there are all sorts of rules where you have to get a Canadian production number. 9481 MR. PACHUL: Yes, I understand that. 9482 COMMISSIONER CRAM: So we are not having any problem with that. 9483 Do I understand that your projections on viewership and therefore your projections on revenue are based on carriage on cable in a 60s, 70s channel? 9484 MR. PACHUL: Absolutely. I never ever expected to get on basic cable. I have had lots of run-ins with cable companies in the U.S., so I got the general idea. 9485 COMMISSIONER CRAM: Your best-case scenario, then, is to be in the sixties, seventies of -- 9486 MR. PACHUL: Yes. There is another reason, too, because we have gone out of way to ensure a very nice, clean broadcast signal, and we wouldn't like all the interference you get on the lower channels.We would have a cleaner picture on those higher channels. 9487 Also, most people have direct access remote controls. So I don't think it is much of a problem any more. 9488 COMMISSIONER CRAM: The reason you believe you have to have cable coverage is, you say, advertisers won't even take your business card unless -- 9489 MR. PACHUL: Yes. That's the first question they ask you. Yes. Yes. 9490 COMMISSIONER CRAM: It doesn't appear to matter whether the cable number is 999 or 2. 9491 MR. PACHUL: No. No. They just ask you whether you are on cable. That's all they want to know. It doesn't matter what channel, just as long as you are on the cable. The channels are irrelevant. 9492 COMMISSIONER CRAM: Okay. 9493 But you are going to be so very local, you would only appeal to, you know, Mr. Smith's Dry Cleaning in one ward or another ward. Why would they care, then, if you are on cable? 9494 I guess maybe I'm asking what is in somebody else's mind. 9495 MR. PACHUL: What we have run into -- when we had the experimental licence -- one thing that we ran into is a lot of people, they have been so brainwashed by this cable idea that they didn't even know on-the-air TV exists. They say, "Oh, you can actually pick up TV out of the air. How? Is it magic? How does it work." Yes, we have run into this. 9496 COMMISSIONER CRAM: Thank you very much. 9497 THE CHAIRPERSON: Commissioner Noël has another question. 9498 COMMISSIONER NOËL: Would you believe I still have bunny ears. 9499 MR. PACHUL: Excuse me? 9500 COMMISSIONER NOËL: I still have bunny ears. 9501 MR. PACHUL: Well, you are a viewer for sure, then. 9502 COMMISSIONER NOËL: Thank you. --- Laughter 9503 THE CHAIRPERSON: Because Commissioner Noël is moving to Toronto, to the beaches. 9504 MR. PACHUL: Yes. To the beaches, yes. 9505 MR. VENDOURAS: Unless we get really super high-powered;-- to transmit to you. ---Laughter 9506 THE CHAIRPERSON: We have no further questions. 9507 So we will see you again at reply after we have heard the interventions. 9508 MR. PACHUL: Okay. Thank you. Yes. Yes. 9509 THE CHAIRPERSON: For the moment, we will take a well deserved 10-minute break, all of us, including you, no doubt. 9510 MR. PACHUL: Okay. Thank you very much. --- Recess at 1627 < |