CRTC allows cable company purchases by David Paddon
Source : Canadian Press
Jun 07, 2001
by David Paddon
TORONTO (CP) – Canada's big cable TV companies scored a major victory Thursday when a federal regulator said they would be allowed to take control of pay and specialty television channels.
The ruling by the Canadian Radio-television and Telecommunications Commission, released in Ottawa, reversed a long-standing policy that prevented cable companies from owning pay and specialty TV channels.
"The commission has decided, by majority vote, that cable companies and their related entities will be allowed, as a matter of broadcasting policy, to purchase interests, including controlling interests, in Canadian analog pay and specialty programming services," the CRTC said.
Rogers Communications and Calgary's Shaw Communications, the country's two largest cable companies, had been pressing for a change in the CRTC's rules.
The cable companies said that if telecom giant BCE Inc. can own a distribution channel – such as the Expressvu satellite service – as well as specialty channels through its CTV Network then Rogers, Shaw and others should be allowed to do the same thing.
However, others have argued cable companies would be in a position to favour their own TV channels, making it harder for other companies to compete.
"The public can't win every time at the CRTC and today the cable industry won hands down," said Jim Thompson, spokesman for the lobby group Friends of Canadian Broadcasting, which objected to the policy change.
"It's a green light for more consolidation in the industry, ironically at the very time that Parliament has held up its hand and said 'Whoa, we're worried about concentration of ownership in the media.'"
As expected, Rogers Communications was happy with the decision.
"It means that we can own analogue services which is something we've been arguing for for some time," said Jan Innes, the company's vice-president of communications.
"It puts us on a level playing field with BCE, which we're happy with. It's very good news for us.
The CRTC ruling could have a major impact on Rogers, which is interested in acquiring control of CTV's Sportsnet channel, but couldn't do so until the regulations were changed.
"We were always going after Sportsnet so I would assume this clears one of the hurdles," Innes said. "We certainly are interested in it, we would like to own Sportsnet and we're hopeful that that will work out."
The CRTC had earlier approved a request by CTV to appoint a trustee to sell the broadcaster's stake in Sportsnet specialty channel and has given the trustee until June 29 to make the sale.
The regulator is forcing CTV to sell its stake in Sportsnet after CTV bought Netstar Communications, which owns The Sports Network, a rival channel, last year.
Rogers Communications, which owns 29 per cent of Sportsnet and has a further 10 per cent held in trust, claims it has first right of refusal on Sportsnet.
In its decision Thursday, the CRTC said the cable TV industry will be governed by the following principles:
* All specialty and pay services should be supplied and distributed on fair and equitable terms.
* Unaffiliated companies should get terms and conditions that are no less favourable than those with affiliates.
* Any competitively sensitive information should not be shared.
* A programming service is entitled to obtain, at its expense every year, independently verified subscriber numbers for the service in question to validate the basis for programmer compensation.
* Where a programming service contributes to the costs of marketing and promotion, it is entitled to obtain, at its expense, an independently verified accounting in respect of its contributions.
Up to now, the CRTC hadn't wanted cable operators to own specialty channels because they might get special placement on the cable TV service.
However, Rogers, Shaw and other cable companies argued that rapid changes in the communications industry meant the commission had to modernize its ownership rules.
In trading on the Toronto stock market Thursday, Rogers class B shares fell 29 cents to $24.78, while Shaw Communications B shares gained $1.14 to $25.40.
Corus Entertainment, a Toronto-based broadcaster spun off from Shaw Communications in the late 1990s, rose 81 cents to $36.27.
