CRTC Chairman Konrad von Finckenstein in Ottawa, Nov. 16, 2009.
After years of pushing for more flexibility in the industry, Canada's broadcast regulator should not "turn back the clock" and impose more restrictions on the country's largest media companies.
That was the message executives from Shaw Communications Inc. took to the Canadian Radio-television and Telecommunications Commission on Wednesday. It was the third day of a hearing in Gatineau, Que., on "vertical integration," or the consolidation that has seen cable and satellite companies owning more of the TV channels they distribute.
Shaw's stance against more rules governing the media industry put it in line with two other integrated companies - BCE Inc., which owns CTV and other specialty networks such as TSN; and Quebecor Inc., which owns French-language broadcaster TVA as well as specialty channels.
The CRTC has discussed the possibility of a "code of conduct" governing the industry now that it has become more integrated.
"We're opposed to a code. We're opposed to more regulation that will inhibit our ability to serve the customer, to innovate, and to be creative in the things we need to do that we think Canadians and consumers want," chief executive officer Brad Shaw said. "We believe competition and consumer choice is a big deterrent to anti-competitive behaviour."
Shaw's position leaves Rogers Communications Inc. as the sole outlier among integrated players; even though Rogers owns media properties such as CITY-TV and specialty channels such as Sportsnet, the company argued on Monday that rules are needed to prevent companies from using their market power to squeeze competitors, especially on new devices such as smart phones and tablets. Quebecor head Pierre-Karl Péladeau said he was perplexed by Rogers's position, and Shaw executives were also surprised.
"For Rogers to propose more regulation, I never thought I'd see the day," Shaw senior vice-president of regulatory affairs Ken Stein said in an interview following the presentation on Wednesday.
Mr. Shaw said his company wants the widest distribution possible for its TV stations, and does not need new rules to prevent it from hoarding its content away from competitors' mobile networks. Shaw bought the former CanWest television assets, including the Global TV network and specialty cable and satellite channels such as HGTV Canada and History, for $2-billion last year. That deal, along with BCE's purchase of CTVglobemedia, caused the CRTC to call the hearing to discuss how the industry has changed.
Shaw is content with the current CRTC rules, which do not allow for exclusive deals on traditional TV - Shaw cannot keep HGTV Canada on the cable and satellite services it owns and deny the channel to Rogers cable, for example - but which have left new media platforms such as the Internet and mobile devices largely unregulated.
For the most part, whatever is available on TV, Shaw thinks, should also be available to everyone no matter what wireless provider they have. But it also argued against a "blanket prohibition" on exclusive deals for video on mobile devices.
"If it's mass kind of things, we would want to make sure it's available to everybody ... we want to get maximum distribution," Mr. Stein said in an interview. "In certain cases people may have more niche programming that they want to be able to offer to people and in that case, exclusivity [on mobile]is something they may want explore."
Mr. Shaw echoed the point made by BCE on Tuesday, that content created specifically for new platforms should be permitted to be exclusive. For example, BCE made a reality show featuring the Montréal Canadiens which could only be seen on Bell devices.
"There has to be some opportunity for us to look at what Canadians want and create some exclusive - or not exclusive, but unique content," Mr. Shaw said. "That's what drives investment. And that ultimately is where we need to go."
Shaw asked for the CRTC to regulate disputes that come up because of the new structure of the industry, on a case-by-case basis, and Shaw president Peter Bissonnette said there is no evidence that vertical integration has led to smaller players being treated unfairly.
"I do appreciate the benefits of competition, but I also appreciate that when you have excessive market power there's an incentive to abuse it," CRTC chairman Konrad von Finckenstein told the panel of Shaw executives. "We have, over the last four years, systematically tried to liberalize, remove restriction ... But when you have only four major players basically dominating the industry, there is unfortunately a possibility that the smaller players may not be able to serve the consumer because they are being unduly squeezed by the giants."
Mr. von Finckenstein asked the Shaw team to consider the possibility that a new code might be put in place, and to contribute their own suggestions for what that code could look like.
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THE BIG FOUR
CRTC chief Konrad von Finckenstein says the Canadian media industry is now essentially in the hands of four integrated "giants." Who they are:
BCE Inc.
Services: satellite, IPTV, wireless, Internet
TV channels:
- Broadcast: CTV and A-Channel stations (soon to be CTV Two)
- Specialty: TSN, TSN2, RDS, CTV News Channel, MuchMusic, MTV Canada, BNN, CP24, The Comedy Network, Discovery Channel, Bravo!, and others, purchased last year for $3.2-billion
Shaw Communications Inc.
Services: cable, satellite, Internet (wireless network planned but not launched yet)
TV channels:
- Broadcast: Global Television
- Specialty: HGTV Canada, The History Channel, Food Network Canada, Showcase, TVtropolis, Slice, and others, purchased last year for $2-billion
Rogers Communications Inc.
Services: cable, wireless, Internet, magazine publishing, radio
TV channels:
- Broadcast: CITY-TV, Omni
- Specialty: Sportsnet, Sportsnet One, The Biography Channel, G4techTV, The Shopping Channel, OLN
Quebecor Inc.
Services: cable, wireless, Internet, newspaper and magazine publishing
TV channels:
- Broadcast: TVA, Sun TV (now broadcasting specialty channel Sun News Network on an over-the-air feed)
- Specialty: LCN, Yoopa, Shopping TVA, Argent, and others