Canadian music threatened once again by last year’s CRTC Satellite Radio decision!

CCA Bul­letin 27/06

Ottawa, June 13, 2006

Those of us who objected strongly to the Cana­dian Radio-television and Telecom­mu­ni­ca­tions Com­mis­sion (CRTC) deci­sion last year to license satel­lite radio will find they were right to describe the new ser­vice (and the con­di­tions of license attached to it) as bring­ing a Tro­jan Horse within the walls of Cana­dian Con­tent regulation.

We saw the very first signs of the per­ni­cious effects of that deci­sion at the recent CRTC hear­ing on its Com­mer­cial Radio Pol­icy Review when pri­vate radio broad­cast­ers tip-toed around the issue. This time, they were merely chip­ping at exist­ing Cana­dian Con­tent reg­u­la­tion through the intro­duc­tion of the notion they should get bonus points if they diver­si­fied their musi­cal pro­gram­ming (some­thing that would in effect dimin­ish the over­all amount of Cana­dian music effec­tively played). Their real con­cern at the moment is to ensure that in the name of the prover­bial level play­ing field, they will not be sub­mit­ted to any reg­u­la­tion when they tai­lor their sig­nal for Inter­net and Dig­i­tal Audio Broad­cast­ing (DAB). This is some­thing some of them already do on the Inter­net, where you may well find Cana­dian Con­tent san­i­tized ver­sions of your favourite off-air licensed radio station.

The sec­ond man­i­fes­ta­tion the insid­i­ous nature of the satel­lite radio deci­sion is now to be found in an appli­ca­tion by Rogers Cable to be allowed to dis­trib­ute the sig­nals of both “Cana­dian” satel­lite radio ser­vices to their dig­i­tal cus­tomers. Inter­est­ingly enough, this appli­ca­tion, which could have impor­tant con­se­quences for the Cana­dian music sec­tor, is buried with a lot of other innocu­ous appli­ca­tions in a CRTC omnibus Pub­lic Notice (Broad­cast­ing Pub­lic Notice CRTC 2006–58).

Although the appli­ca­tion is silent on this front, there are rea­sons to expect that Rogers ’ desire to retrans­mit satel­lite radio on dig­i­tal cable has essen­tially one pur­pose: to replace the cur­rent licensed truly Cana­dian pay audio ser­vices Galaxie and Max Trax with one or both satel­lite ser­vices, in the name of con­sumer choice! Were this request to be granted by the CRTC, the impli­ca­tions would likely be con­sid­er­able for the Cana­dian music sec­tor, par­tic­u­larly since Bell ExpressVu has joi ned the fray and is con­test­ing the CRTC staff opin­ion that to dis­trib­ute satel­lite radio, Broad­cast­ing Dis­tri­b­u­tion Under­tak­ings (BDUs, as they are famil­iarly known) need a mod­i­fi­ca­tion to their con­di­tion of licence. Once again, the level play­ing field argu­ment is put for­ward, ExpressVu say­ing “if you give it to cable, you give it to us!” The car­riage of pay audio ser­vices is itself purely optional and left to the dis­cre­tion of BDUs. Satel­lite radio may there­fore well lead to the dis­ap­pear­ance of the only to Cana­dian ser­vices offer­ing a plat­form (and rev­enue) to Cana­dian musi­cians in over 20 con­tem­po­rary formats.

The issue here is sim­ple: if allowed to redis­trib­ute satel­lite radio to their dig­i­tal cus­tomers, cable and direct-to-home satel­lite ser­vices will have access to a cheap alter­na­tive to replace Max Trax (Corus) and Galaxie (CBC). By con­di­tion of licence, those fully Cana­dian ser­vices cur­rently pro­vide 35% of their broad­cast time to Cana­dian artists over the 67 chan­nels pro­grammed here vs the mea­ger 10% require­ment for satel­lite radio, which ghet­toizes Cana­dian artists in 8 Cana­dian made chan­nels. This would also mean that the num­ber of French-language chan­nels avail­able to sub­scribers would drop from the cur­rent 11 to a mere 4. So much for defend­ing con­sumer choice! And in mon­e­tary terms, this would trans­late into a loss of more than $ 3 M a year in roy­al­ties paid to Cana­dian artists, not to men­tion the impor­tant con­tri­bu­tion made to Cana­dian tal­ent devel­op­ment (CTD) by both exist­ing pay audio ser­vices. The table at the end of this bul­letin sum­ma­rizes the real issues in this case.

The CCA has there­fore tabled an inter­ven­tion against the Rogers’ appli­ca­tion. This inter­ven­tion is sup­ported by a num­ber of other orga­ni­za­tions (Our Pub­lic Air­waves, ADISQ, Union des Artistes amongst oth­ers). Because of the posi­tion taken by ExpressVu in this file, the CRTC may decide to post­pone deal­ing with this issue right now. This is the fall back posi­tion taken by the CCA in its inter­ven­tion: fail­ing out­right rejec­tion, we have urged the Com­mis­sion to hold a pub­lic hear­ing in which a com­plete review of the Cana­dian Con­tent Reg­u­la­tions as they apply to var­i­ous kinds of broad­cast­ing under­tak­ings would be under­taken with ref­er­ence to the cul­tural require­ments of the Broad­cast­ing Act.

* Does not include pay­ments for mechan­i­cal repro­duc­tion rights made to CMRRA/SODRAC.