The Canadian media industry has come face to face with "a new world," in the words of Konrad von Finckenstein, the chairman of the country's broadcast regulator. Now Mr. von Finckenstein and his colleagues have a tough job ahead of them: Figuring out how to make new rules to govern that world.
On Tuesday, the Canadian Radio-television and Telecommunications Commission capped off a six-day hearing that brought the biggest players in Canadian media to Gatineau, Que., to discuss the effects of "vertical integration." That's the industry term for a trend that has seen cable and satellite providers buying more of the TV channels they distribute.
Mr. von Finckenstein asked those who appeared to submit their suggestions for a "code of good commercial practices" the CRTC could use to resolve disputes and keep the newly structured industry in check. Those suggestions are due by the end of next week.
The integrated players – companies such as Shaw Communications Inc., which bought the CanWest TV assets last year, and BCE Inc., which bought CTV and a crop of "specialty" cable and satellite channels including TSN, also last year – argued last week that more video is being watched online and that they need more market power to compete with the unregulated players offering this service, such as Netflix. If they are restricted from using their size and assets to expand their businesses, their existence is threatened, they say.
Companies that have stuck to their knitting, however – whether independent broadcasters not owned by a distributor, such as Score Media Inc., or TV providers such as Cogeco Cable Inc. that do not own broadcast assets – told the CRTC that the integrated giants have a dangerous amount of market power. Competitors are worried they could raise the fees that cable and satellite companies pay for their specialty channels; that they might force competing channels into less desirable cable or satellite packages; and that they could horde TV content for exclusive distribution on their own wireless networks to mobile devices such as smart phones and tablets.
The CRTC must contend with all these concerns. In recent years, its priority has been to deregulate as much as possible. The regulator will begin considering its new code the week after next but it now faces a balancing act: keeping a hands-off approach wherever it can, while also making sure broadcasters and cable and satellite providers - big or small, integrated or not - have a level playing field on which to compete.