GATINEAU – CRTC chairman Jean-Pierre Blais set a tough tone right at the start of Monday’s hearing into Channel Zero’s specialty channel license renewal and corporate reorganization hearing.
“Ladies and gentlemen, these licenses are very much in jeopardy,” he said in his opening remarks.
The hearing was also a show cause hearing (meaning everyone on the broadcasters’ panel was sworn in, something we had not heard before, but has been done in the past for such hearings), which means the Commission was calling the company on the carpet to make sure that the license holders are actually operating the channels as required, that a court settlement of a dispute between the founding partners had not changed the control of the company prior to the necessary CRTC approvals, and that the channels were airing enough Canadian content.
“Given these apparent non-compliances, the Commission expects the representatives of all four licensees at this public hearing to show cause why: a mandatory order should not be issued requiring the licensees to comply with the Specialty Services Regulations, 1990 and their conditions of licence; the licences of the four services should be renewed, and if so, why the renewals should not be for a short term, and the licences should not be suspended or revoked,” said chairman Blais.
Over the course of Monday, Channel Zero executives were grilled over which entity and which person controls what and does what at the company since different corporate entities control different speciality channels and perform different functions. For example, Drive Publishing Inc. holds the license for the company’s adult channels branded under the AOV name. Parts of the chairman’s line of questioning was to ensure Drive is actually running the channel, as required by its license. Channel Zero president Cal Millar told the Commission panel (which also included commissioners Stephen Simpson and Peter Menzies) that while Drive doesn’t have any assets (beyond the AOV brand name) or employees, it is in control of the license through its board of directors, essentially its ownership partners Doug Rankine (25%), Randy Jorgensen (25%), Anthony D’Andrea (12.5%), Millar (12.5%), Podzyhun (12.5%) and Harold Balde (12.5%).
This left chairman Blais wondering how a division with no employees can run anything during his questioning. Millar noted that the company’s structure was somewhat complicated and added the request for the corporate reorganization is aimed at making it simpler for both the company and the Commission.
In the company’s opening statement, Channel Zero CEO Romen Podzyhun acknowledged the company has grown and adapted as best it could during its first 15 years, but also admitted, “on occasion the pace of change and growth in our business has temporarily outpaced the ability of our infrastructure to keep up. But, as we hope to demonstrate to you today, we have taken steps to ensure that we address these gaps, and to conduct ourselves as a responsible and responsive broadcaster.”
We’ll have more for you on what was a very contentious hearing later this week because to be honest, we need to have a look at the official transcript for more clarity on just what was said on Monday morning and afternoon.
