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Winnipeg Free Press - PRINT EDITION

CRTC needs real power

By: Nicholas Hirst

Posted: 03/25/2010 1:00 AM | Comments: 0 (including replies)

The arcane nature of broadcasting television in Canada continues. The Canadian Radio-television and Telecommunications Commission decided on Monday the major broadcasters could charge cable, satellite and telephone companies for their signals.

Except they didn't, not quite, because they weren't sure they were legally able to do so. That means some relief to television audiences because there will be no immediate increase in their cable or satellite bills.

What happens in the longer term is likely to be the subject of a knockdown fight with the cable and satellite companies on one side and CTV and Canwest on the other. The CRTC said the CBC, as a public broadcaster, was in a different position and didn't give it permission to levy charges.

But what a strange position television broadcasters, audiences and cable companies find themselves in. After months of argument, with broadcasters claiming they needed more money to run local news and cable companies arguing any charge on them by broadcasters was an unfair tax, the regulatory body isn't sure it is in a legal position to decide one way or another.

How did this happen? The precise reasons are immensely complex, but CRTC's underlying problem is that the industries it regulates have changed faster than the regulations.

It's not just in television you can see this. When the CRTC applied the rules, as it understood them, to the request from the Globalive mobile phone company that sells under the name Wind, it found that Globalive was "foreign controlled" and therefore couldn't operate in Canada.

But every analyst of the industry, almost everyone in fact except those with a vested interest, believed that Canada needed foreign competition in telecommunications. In the end the federal cabinet reversed the decision on as shaky legal grounds as have ever been seen. The Harper government understood that in the vital telecommunications sector, competition trumped regulation.

In the throne speech it appeared the government would pass legislation to bring foreign ownership rules in telecommunications into the modern era, but in the budget that followed it became less than clear how far and how fast the Tories were going to move. Satellite companies would be open to foreign ownership, but how far the ownership rules would be relaxed was left vague.

That may have been because relaxing rules on ownership of telecommunications companies can affect ownership of broadcasters. Already Rogers, the cable and mobile company, owns City TV. Shaw has made an offer to buy the television assets of the Winnipeg-based Canwest out of bankruptcy protection.

The irony of the CRTC decision is Canwest could be negotiating a carriage fee with its owner: Shaw.

But it's not just ownership changes that are moving faster than the regulator; it's the whole broadcast and telecommunications sector. The era of so-called "free TV" has been over for some time. Most Canadians pay handsomely for the services delivered by cable, telephone or satellite companies. The regulator has decided which broadcast channels can charge the cable companies and which cannot. In a nutshell, the specialties like Slice and HGTV can, and Global and CTV cannot. The distinction between specialty channels and main network channels, however, is fast disappearing. Showcase, which is owned by Global, broadcasts shows that are also shown on its main channel. The Space channel is a secondary broadcaster for CTV shows and the broadcasters' Internet sites stream shows from all their channels.

The regulator, however, faces this changing landscape under the Broadcast Act that was originally passed in 1968 and amended in 1991. It is an impossible task.

Canadian broadcasters lost money last year while the cable companies' profits expanded. The cable companies don't make money without the broadcasters' content, but the CRTC doesn't have the power to even make the two sides negotiate.

Some say the CRTC should be abolished. That's not a good idea. Telecommunications and broadcasting need a regulator, but one that can keep up with the rapid changes that are occurring. The government should make such legislative changes that will allow the regulator to perform in a manner that looks to the future rather than being bound by the past.

Nicholas Hirst is CEO of Winnipeg-based television and film producer Original Pictures Inc.

Republished from the Winnipeg Free Press print edition March 25, 2010 A11

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