CALGARY – “Put yourself into my shoes,” CRTC chairman Konrad von Finckenstein asked Shaw Cable’s executives.
The chair made the plea during an exchange Monday morning at the Airport Four Points Sheraton in Calgary during the day-long hearing into the western cableco’s applications to renew most of its cable licenses.
Due to a number of regulatory transgressions and questions over the years, (especially concerning advertising messages on some of its community channels that were contrary to the regulations, and treatment of some specialty channels), Shaw was granted only a short term license renewal by the CRTC back in 2008 – and von Finckenstein seemed less than convinced Monday that all was now well enough at Shaw to warrant a normal seven-year term. That point was made more recently clear as the company was found earlier this year to be four months behind in its mandated payments to the Canada Media Fund.
Shaw characterized the non-payment as “an oversight,” said SVP regulatory affairs Jean Brazeau, and that the company paid the amount owing, in full, months ago.
But, assuming Shaw were to get a seven-year licence term and something else happened two years in, for example, “I have to wait another five years before calling you on the carpet,” said von Finckenstein, who lamented the few regulatory tools at his disposal to deal with conditions of licence transgressors.
“At any time, you can bring us back in,” noted Shaw Communications executive vice-president Brad Shaw, who led the Shaw team on Monday.
That caught von Finckenstein’s attention. “I want some flesh on that commitment,” he said, asking if the company would be willing to have some sort of conditions placed on a seven-year license where it can be shortened if some sort of bad behaviour were brought to light. “Is that what you mean?” asked the chair?
“No, it’s not,” said Shaw.
(Ed note: While both Jim Shaw and JR Shaw were in the room, the fact Brad led Monday’s show adds to the ongoing industry speculation that he will soon be the next Shaw fils appointed CEO of the company. Jim, however, assured us he will be the lead Tuesday morning during the Shaw/Canwest merger hearing).
Anything less than the full seven-year term would place the company at a competitive disadvantage, said SVP regulatory and corporate affairs, Ken Stein, adding the company wants to appear less often in front of the Commission. “We seem to be before you more often than not,” he added, and “we did take steps to correct the issues we did have.”
The company assured the Commission that the repeated problems with advertising on the community channels have been rectified, access to community channels has been improved, notice to specialty services of any channel realignments is now 60 days and programming services now all have audit rights.
All of those issues have been subject to various complaints (leading to the short-term license renewal in 2008) and the Shaw executives maintained the company has rectified them.
“Without a doubt, the issuance of the short-term renewal has disadvantaged Shaw, created uncertainty, and placed a significant administrative burden on us,” said Brad Shaw. “While we have been successful in managing this added uncertainty, it is a situation that we do not want to have repeated.”
Telus, on the other hand, Shaw’s primary Western Canadian competitor, told the panel that due to the shifting global media landscape, not to mention what will be talked about the rest of this week and again when the Bell/CTV merger comes before the Commission, that commissioners should be cautious.
“It is important for the Commission to retain its powers to act in a timely manner to respond to unanticipated abuses of market power to the detriment of non-affiliated distributors, broadcasters and producers,” said Telus’ SVP regulatory and government affairs, Michael Hennessy.
“If the Commission were to issue full seven-year licence terms to Shaw now, it would lose the opportunity to implement or amend any COLs for Shaw for a period of five years. The Commission’s only tool then to enforce new policy determinations would be amendments to the various regulations, which involves a very cumbersome and hence slow process,” he explained, pointing to a complaint his company has filed with the CRTC over what it claims are Shaw’s delaying tactics when Telus wins a TV customer away from the cableco.
“While we wait for a Commission decision on our complaint, Shaw has been causing significant problems to the growth of Telus’ television distribution services by continuing to take upwards of 15 days to process some service cancellations, causing customer confusion and brand damage for Telus.”
Under final questioning of Shaw, the chair noted that the CRTC will be hearing group licensing renewals for CTV and Canwest in 2011, which are five year terms and he mused that in the name of symmetry, “wouldn’t that (licence term) make sense?”
Watch for Cartt.ca’s coverage of the Shaw/Canwest merger hearing beginning Tuesday morning at 8:30 a.m. (MT). If you’re a twitterer, you can follow editor and publisher Greg O’Brien’s tweets via @gregobr
