Concentration of media ownership: who controls what in Canada?

CCA Bul­letin 31/07

August 29, 2007

 

 

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.