CRTC COMMISSIONER MICHEL MORIN apparently didn’t like much about his first CRTC hearing.
He disagreed with the companies that got the licenses (Vista Radio and Sun Country Cablevision, instead of CTV, Corus or Deep Waters Media), sharply criticized a cynical format flop ploy by the two ownership groups already in the market and said the whole process of calling for applications and hearing them isn’t transparent enough.
In a scathing dissenting opinion following this month’s decision on granting a pair of new radio station licenses, the former broadcaster unloaded on both Astral Media and Jim Pattison Broadcast for their behaviour as hearing time approached, suggesting such moves (adopting the very formats under discussion at the Commission for two existing stations) be subject to new restrictions going forward.
Kelowna has five private stations and had not seen a new one launch in the town of now 150,000 since 1994. Vista got the ball rolling on the process by asking for country station license and 10 others also submitted applications after the Commission opened its call.
However, between the CRTC’s making public the applications and the hearing itself, Pattison changed one of its stations formats from easy listening to country while Astral swapped its oldies station to news/talk – a format which was being proposed in an application by Corus Radio.
“This tactic was surprising but entirely legal,” wrote Morin. “…We can almost conclude from this that the hearings had lost their point, at least in part. In any event, the actions taken in the weeks leading up to the hearings were prejudicial not only to the proposals submitted by Vista Radio and Corus Radio, but also to the Country format proposed by Radio CJVR (another applicant), and the CRTC, the agency responsible for the Canadian broadcasting system, could not intervene.
“In other words, as far as radio formats were concerned, Kelowna was a Wild West town without a sheriff,” said Morin.
“Clearly, the format changes made by the dominant players were not designed to contribute to the public call for applications process, but rather to destabilize potential competitors.”
If incumbent operators can do this, why should local, regional or national undertakings invest sums often upwards of $100,000 to submit a proposal to the CRTC in the first place, wondered Morin in his dissent, “and by doing so deal a fatal blow to the proposals submitted by undertakings attempting to participate in the public process?”
In fact, Vista’s approved station is a classic hits format, which it changed its application to because of the Pattison station’s flip.
To prevent this from happening again, Morin has proposed some new rules, including a moratorium on format flipping while the regulatory process is under way:
“When the CRTC agrees to issue a public call for applications – i.e., when it decides to invite undertakings to submit proposals for a broadcasting licence – those radio stations already present in the market should be required to immediately freeze their broadcasting formats until the conclusion of the CRTC hearings,” writes Morin.
“As a result, from the time that the call for applications is issued until the conclusion of the hearings, none of the established players could take advantage of the situation in order to introduce a new music or news/talk format proposed by another applicant. In the Kelowna case, this period extended for eight months, from March to November 2007.”
Eight months is a long time, said Morin, “but this may be the price we have to pay to protect the original proposals submitted by new players,” reads his dissent.
And if the Commission really wants to protect the process, it should prevent others from changing formats until the newcomers are launched – which could take as long as 18 months. A time frame which is, in fact, too long, recognizes Morin. “An unduly long freeze could cause irreparable harm to the undertakings,” he said.
“(I)s there not a danger that, once the decision is made, players already in the market may appropriate the radio formats won at great cost by the new licensee or licensees? Of course there is. Once again, established players could take advantage of their position in the market to copy the new formats selected by the CRTC following the public hearing process.
“At this stage in the process, I would therefore be in favour of the CRTC imposing a partial freeze to protect the formats until they begin broadcasting ten months later. Existing players seeking to adapt to the constantly evolving market would still have more than 15 formats to choose from in the English-language market and nearly half a dozen in the French-language market,” reads Morin’s dissent.
“Once the new radio station is on the air, the freeze would be lifted and all formats would once again become available.”
“…Without such a rule, there is a real possibility that more players will have their proposals appropriated with impunity by existing broadcasters. Let there be no mistake about it: such a situation could threaten the diversity of voices. It could also jeopardize the credibility of the CRTC itself and the public call for applications process… It is not a question of reinventing the wheel – the same approach is already used in public calls for tenders for the construction of buildings or roads,” writes Morin.
For the rest of his dissent, including how he took Commissioners to task for approving the two applications from smaller, local broadcasters over large outfits, and how the whole application process needs more transparency and additional information and clarity, click here.
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