GATINEAU – This morning the CRTC will release its policy decision on the levels of media concentration in Canada, Cartt.ca has learned, just four months after holding a hearing, dubbed the “Diversity of Voices” proceeding in September.
While existing rules were used to make decisions in 2007 on Canwest’s purchase of Alliance Atlantis, CTVglobemedia’s acquisition of CHUM Ltd., Astral’s Standard Broadcasting buy and Rogers Media taking over the Citytv network, new rules will apply to any other mergers.
The old rules, for example, prevented CTVgm from taking the Citytv stations in its deal for CHUM as the Commission’s policy of one conventional English language TV station per market meant CTVgm was forced to keep CHUM’s smaller-market A-Channels and give up the large-market Citytv to Rogers.
And, the old rules didn’t stand in the way of American investment bank Goldman Sachs providing most of the cash needed by Canwest to buy the broadcasting assets of Alliance Atlantis, or of Astral Media becoming the country’s largest radio broadcaster with now 82 stations across Canada.
(Whatever these new rules say could certainly affect the future of struggling – and bankruptcy-protected – TQS, whose owners, Cogeco Inc. (60%) and CTVgm (40%) have yet to find a buyer.)
At the hearings, which were covered in depth by Cartt.ca, most large Canadian broadcast and cable companies insisted no new rules judging the levels of media concentration were needed and that consolidation among our media companies was actually a good thing for the industry.
The Commission examined at length the points system deployed in Australia which is designed to maximize the diversity of media voices in its markets.
As Cartt.ca’s coverage of the hearing read:
On a wider level, the CRTC also wrestled with what kind of benchmarks to set for what would be considered unacceptable media concentration. It questioned whether Australia’s points system could be adapted in some way to Canada. A study compiled by Nordicity Group Ltd. on behalf of the Canadian Film and Television Production Association that was submitted to the CRTC takes the Australian points system and applies it to various media markets in Canada (Halifax, Montreal – English, Montreal – French, Ottawa – English, Toronto, Calgary and Vancouver), before and after the three major media mergers.
After the mergers, Montreal’s English and French markets would be in an “unacceptable media diversity situation,” according to the Nordicity study as their English market would fall from six points to four, and the French market would remain below the five-point threshold at four. The Halifax, Ottawa – English and Toronto markets all decline from nine points to seven, the Calgary market from seven points to five and Vancouver from eight points to six.
Under Australia’s system, each media operation (associated newspaper, commercial TV operation and commercial radio operation) is worth one point. An “unacceptable media diversity situation” is deemed to have occurred when a metropolitan area has fewer than five points and regional areas have less then four points. Also, when one owner controls a television station, a radio station and a newspaper in the same city, it is considered an “unacceptable three-way control situation.”
But the CAB and its biggest members that appeared before the CRTC on Monday said applying Australia’s points system to Canada was like comparing apples and oranges.
CAB president and CEO Glenn O’Farrell noted that the Canadian market has far more cable TV channels than Australia, which primarily delivers its TV programming via over-the-air outlets.
CAB chair and CanWest vice-president of regulatory affairs Charlotte Bell told the Commission borrowing from other jurisdictions would be “a huge mistake.”
“Rules developed in other countries speak to the specific conditions in those countries and are not designed for Canadians,” she said, adding that Australia adopted its points system as a result of an easing of restrictions on foreign ownership – a development that hasn’t happened in Canada.
“Australia is separated by the closest land mass by about 4,000 miles. In addition to that, they are a system that only has 24% penetration in terms of cable as compared to Canada where we live in the shadow of the United States and we have 90% penetration on cable and DTH,” CTV president Rick Brace told cartt.ca. “Already we have a great advantage in being able to disseminate a large number of voices, and we are also dealing with the shadow of the giant.”
The CBC, smaller independent broadcasters, and the likes of ACTRA, independent producers and the Writers Guild, suggested the Aussie system has some merit and could be modified for Canada, ensuring that no one, or two, companies could dominate media ownership here.
Again, back to our September coverage:
CBC Television executive vice-president Richard Stursberg said Australia’s system didn’t have to be adopted exactly as is by Canada, but that it demonstrates that in some Canadian media markets media concentration is too high based on some global benchmarks. He suggested it would be prudent to adopt a rule allowing an owner to own only two of three media (TV, radio and newspaper) in one market.
CBC execs also suggested that a company be prohibited from owning two broadcast distribution undertakings in one market.
Stursberg also called on the CRTC to not allow any broadcast distributor to become so powerful that they could dictate carriage terms or tie up the talent of others. For example, he noted, powerful broadcasters might be able to negotiate higher rates with distributors, leaving the smaller ones that are not part of the dominant group with much lower wholesale rate fees.
Stursberg concluded, “The CBC can be an important counterweight to consolidation happening in the private sector.”
But, Canadian broadcasters insisted at the hearings that there are no problems with media mergers and that they are increasing, not limiting, diversity.
Both CTV president Rick Brace and Canadian Association of Broadcasters president and CEO Glenn O’Farrell said there was a “surplus of diversity” in Canada and that the Commission was in search of a solution “for a problem that doesn’t exist.”
Independent ‘casters and others believe there are large problems and that a new policy has to address the serious issues they face when bumping up against the big guys who own so much of the system already they shouldn’t be allowed to own much more.
Some used this hearing as a preview of what will come in this April’s specialty services and broadcast distribution undertaking policy hearings – a proceeding which will surely be influenced by whatever new policy the Commission releases this morning.
As we reported in September:
Stornoway president and CEO Martha Fusca referred to “a shopping list” of distributor practices that go against promoting diversity and Canadian content. She noted, for example, that not all broadcast distributors would carry her bpm:tv dance channel even though data shows subscriber numbers for the Category 2 service would be just as good as MTV.
Also, when one distributor whom she didn’t name repackaged ichannel Stornoway “lost 70,000 subscribers in one swoop – a move that screwed up my business plans for a year and a half,” Fusca said. (Stornoway owns and operates ichannel, bpm:tv and The Pet Network.)…
Ensuring fair and predictable access “requires regulatory intervention to balance against the negotiating strength and leverage of programming conglomerates and the gatekeeping of distribution conglomerates,” said Channel Zero’s Cal Millar, who appeared as a member of the Independent Programming Services group.
Another of the myriad topics the Commission was also looking at was whether or not any single broadcaster should be allowed to own more than 33% of all specialty services.
Watch for Cartt.ca’s coverage of the policy release later today, complete with reaction from industry players.
Click here for our coverage – the most complete coverage of any media outlet – from days 1, 2, 3 and 4 of the hearing back in September.
– Greg O’Brien
