CCA Bulletin 31/07
August 29, 2007
Concentration of media ownership: who controls what in Canada?
Just the facts
This week, the Canadian Radio-television and Telecommunications Commission begins the first in a series of public hearings that will touch on issues concerning concentration of media ownership, cross-media ownership and the ability of foreign firms to buy into the Canadian broadcasting system. As technological change continues to sweep across the broadcasting and telecommunications sectors around the world, other countries are responding to similar challenges by developing new policies and frameworks. The CCA today releases a short research paper outlining how Europe, Australia and other countries are responding to some of these developments.
CRTC Schedule
First up for the CRTC is an application by Rogers Media to acquire Citytv stations in Toronto, Calgary, Edmonton, Vancouver and Portage la Prairie. This acquisition follows a CRTC decision earlier this summer that rejected the application of CTVglobemedia to acquire these stations as part of its larger deal to acquire all of the assets of CHUM Limited. The CRTC found that since CTVgm already owned stations in each of these markets, allowing the Citytv stations to come under CTVgm ownership would violate its common ownership policy. But, since Rogers already has significant interests in cable television, telecommunications, publishing, ethnic broadcasting and specialty television, its move into over-the-air conventional television raises issues of cross media ownership and vertical integration between broadcasters and distributors and their effects on the production, promotion and distribution of Canadian cultural expressions. .
Next week, starting on September 5, the Commission will hold hearings into the application by CanWest Media to acquire Alliance Atlantis Communications. Since U.S. investment banking firm Goldman Sachs and Company is providing the bulk of the equity investment and debt financing for the takeover, many observers believe this deal is directly challenging laws and policies which require the broadcasting sector to be owned and controlled by Canadians. In addition to acquiring Alliance Atlantis’ extensive holding of specialty and digital television services, the deal also involves the takeover of the distribution arm of Alliance Atlantis, which has the largest inventory of English-language movies and television shows, most of which have been produced with substantial public investment, financing and other Canadian support. According to some sources, the hearing may be postponed to November and the intervention period reopened briefly to allow intervenors to comment on important documents which have been filed with the commission after the end of the call for comments.
Finally, in mid-September, the CRTC will hold its long-awaited hearings into how the changing broadcasting landscape affects the diversity of voices in the system. It will consider whether it needs new rules to address issues of common ownership; vertical integration; cross media ownership, including new media undertakings; and media concentration.
Together, these CRTC hearings have generated considerable interest, with thousands of written interventions being filed with the Commission, reflecting a rich diversity of positions. You can find the CCA’s interventions in these matters on our website.
Broadcasting Policy -The Perfect Storm: A Review of Broadcasting Policies in Selected Countries
Authored for the CCA by Ottawa University law student Susan Deer, in collaboration with Garry Neil of Neil, Craig and Associates, this paper looks at how other countries are responding to similar developments. Here’s a brief overview of the report.
Europe
The European Commission and Parliament have adopted a new Audiovisual Media Services Directive to replace its long-standing policy, Television sans Frontières. The new Directive should come into force before the end of 2007 and Member States will have two years after that to implement the new regulatory regime into national legislation.
The Directive encompasses the Internet and on-demand services by creating two classifications of audiovisual media output: “linear” and “non-linear.” The two types are differentiated on the basis of the push/pull dichotomy: linear “pushes” content to viewers by implementing a fixed schedule; non-linear offers content that can be “pulled” by the user who decides which content to consume.
The Commission intends to limit the regulation to media services in “competition with television broadcasting,” therefore, content produced by private individuals, who do not have an economic purpose, including private websites, is excluded. While regulations will cover both linear and linear services, the extent of the regulations is different.
Regulations requiring that European productions account for at least one-half of all television broadcasts and for independent European producers to have at least 10% of the broadcast time are retained from Television sans Frontiers and would apply regardless of how such services are distributed. The new Directive also modifies rules for advertising delivered via linear services.
While mandatory rules for European content are not required for non-linear services, Member States are given broad discretion to implement measures to ensure that European content is available to be pulled by the user.
Member States are required to restrict harmful content whether this is delivered by linear or non-linear media services. Harmful content includes programs which might seriously impair the physical, mental or moral development of minors, in particular those that involve pornography or gratuitous violence. Also prohibited is content that contains “any incitement to hatred based on sex, racial or ethical origin, religion or belief, disability age or sexual orientation.”
The situation of European content quotas with respect to broadcasting services delivered via the Internet or mobile telephones is unclear. While the new Directive defines linear services as including “scheduled broadcasting (delivered) via traditional TV, the Internet, mobile phones”, the European Commission stressed that the Internet will not be subject to content quotas since the online delivery means that the user decides which content to consume.
Australia
For many years, Australia has also restricted content that “is likely to offend reasonable adults,” and “to protect children.” The codes developed under this law apply both to the Internet and mobile content. Acting on complaints, the Australian Communications and Media Authority can order content hosts to provide a filter restricting Australians from having access to the material.
The Australian government has also initiated measures to relax current rules which restrict foreign ownership in broadcasting and to amend rules that limit cross-media ownership.
With respect to foreign ownership rules, the government intends this year to eliminate the media specific rules found in the Broadcasting Services Act 1992. However, it argues that since the sector would continue to be considered a “sensitive sector” under its foreign investment laws and policies, there remains sufficient scope for government oversight.
For cross media ownership, Australia has developed a points system which, according to an article in the 6 August 2007 Globe and Mail, this system is now in place.
It works as follows: each media operation in a given market, including newspapers, commercial TV stations and radio stations, is worth one point. If any company owns multiple outlets, its entire collection only receives one point combined. If a particular market is found to have less than five points in total, i.e. less than five different owners, it is deemed to have an "unacceptable media diversity situation" and the broadcast regulator can take actions to correct the imbalance, including making requirements on licence holders. In smaller, non-metropolitan markets, the threshold is set at four points.
As well, it is considered to be unacceptable control for any single entity to control a television station, radio operation and newspaper in a given market. Australia's regulator has the right to prevent future media deals in any market it considers to have an unacceptable ownership situation.
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