CRTC Hearing on Canadian Broadcasting Via New Media

A new tax to promote the production of original Canadian content for the
Internet is not needed. Taxing Internet Service Providers (ISPs) for this
purpose amounts to taxing Canadian consumers, under a false pretext.


"The regulatory exemptions for new media and mobile services must be
maintained," said Pierre Karl Peladeau, President and Chief Executive Officer of
Quebecor. "We also believe it is critically important for the future of Canadian
content to accelerate the deregulation of conventional media, and to refrain
from introducing mandatory fees to finance the production of new media content.
Canadians are paying enough taxes and it would be unconscionable to further
increase the tax burden in the midst of an economic crisis. This would be
unproductive and, in any event, illegal. If we truly wish to promote the
production of original Canadian content, the industry must be freed of the
existing regulatory straitjacket, which is plainly incompatible with the freedom
that prevails in the new media universe."


"We are proud to be contributing to the Canadian economy, in accordance with the
objectives set out in the Broadcasting Act, and to be offering growing numbers
of Canadians improved telecommunications services since the monopoly situation
has been ended," said Mr. Peladeau. Since we began providing Internet access
service in 1985, we have invested $1.9 billion in our infrastructure. "Levying a
new tax on our ISP and wireless telephone revenues would limit our capacity to
accomplish our mission to the benefit of all our customers."


Reinventing our ways of doing things

In Quebecor Media's view, the ongoing revolution in the media universe is
forcing media organizations to rethink their business models, particularly since
the boundaries between print, broadcasting and telecommunications are falling
one by one. "New media have freed citizens from the dictates of the television
schedule, enabling them to watch the programs they want when they want," said
Mr. Peladeau. "Increasingly, content is available on the Internet or on mobile
devices. If they are to go where the audiences are, the media must have the
latitude and the means to become developers and producers of content for all
platforms, including mobile, which promises to become a leading medium."


Help for conventional television

Finally, Quebecor Media again raised the issue of the future of conventional
television, noting the extremely precarious position of conventional
broadcasters and underscoring their importance for expanding the presence of
Canadian content in new media. If broadcasters are to remake themselves into
generators of original content that can go where consumers are and attract mass
audiences, they need to be able to obtain broadcast rights to a production on
all platforms in exchange for their contribution to its financing. This is the
only way to secure the future of Canadian production on both conventional and
new media, for financing is now available only on a multiplatform basis, which
is where the potential for profit exists.


"We believe that instead of trying to impose new controls, the CRTC should
review the requirement for broadcasters to use independent producers and it
should consider the licence fees paid by broadcasters as a real investment that
entitles them to exploit rights to successful programs on all platforms," said
Mr. Peladeau.


"Similarly, the CRTC should review its approach, which is based on quotas and
so-called priority programs, and tells the broadcasters where to spend their
money. At a time when they are facing an unprecedented crisis, Canadian
broadcasters need to invest in successful programs rather than continuing a
practice which makes their investments in content a dead loss, made primarily to
meet regulatory obligations."


Exploitation rights are the crux of the matter

Quebecor Media does not believe that the presence of Canadian content online can
be increased by attempting to regulate the Internet or through more financial
support from the taxpayer. The problem lies primarily in the management of
rights and copyright.


In this respect, the collective agreement signed on February 25, 2009 by the
Union des artistes and TVA helps lay the foundations for the future of
television production, for it defines, for the first time, precise parameters
for the use of content on all new platforms, and demonstrates that TVA is able
to make specific agreements with the various industry players in order to
increase the presence of Canadian content in new media. Terms of trade
agreements (umbrella agreements) are not necessary for this purpose: negotiation
in a free market is a win-win solution.


"We cannot apply the traditional broadcasting model to new media, for in the
digital age its limitations are clearer than ever," said Pierre Karl Peladeau.
"Attempting to do so will only hasten the system's demise and undermine Canada's
chances of success in the new digital age."


Quebecor Media Inc. is a subsidiary of Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B), a
communications company with operations in North America, Europe and Asia.
Quebecor Media owns operating companies in numerous media-related businesses:
Videotron Ltd., the largest cable operator in Quebec and a major Internet
Service Provider and provider of telephone and business telecommunications
services; Sun Media Corporation, the largest publisher of newspapers in Canada;
TVA Group Inc., operator of the largest French-language over-the-air television
network in Quebec, a number of specialty channels, and the English-language
over-the-air station Sun TV; Canoe Inc., operator of a network of English- and
French-language Internet properties in Canada; Nurun Inc., a major interactive
technologies and communications agency with offices in Canada, the United
States, Europe and Asia; magazine publisher TVA Publishing Inc.; book publisher
and distributor Quebecor Media Book Group Inc.; Archambault Group Inc. and TVA
Films, companies engaged in the production, distribution and retailing of
cultural products; Le SuperClub Videotron ltee, a DVD and console game rental
and retail chain; and Quebecor MediaPages, publisher of print and online
directories.
Quebecor (TSX:QBR.A)
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