Task force report could prompt change in foreign ownership limits for BDUs

Canadian cable operators and other facilities-based carriers could become owned, depending on how the federal government responds to a soon-to-be-released recommendation by the National Broadband Task Force. Insiders tell CCR that an article in the National Post earlier this week was inaccurate in reporting that the task force would call for the elimination of the limits. Although a majority of task force members supported such a motion, there was strong opposition from others, including Alliance Atlantis Communications Inc chair Michael MacMillan. As a compromise, the task force members agreed to call for an "urgent review" of the rules. MacMillan was reluctant to discuss details of the task force’s recommendations until they’re publicly released in mid-June. He acknowledged that the foreign ownership is part of the final report, but stressed that it’s not the main focus. "The task force is about deploying broadband to individuals who cannot afford it and to regions where there is little economic sense in setting up the infrastructure. That’s what the report is about," he notes. On the issue of foreign ownership, however, he says he didn’t see a need for changes to the existing rules. One source told CCR that although broadcast distribution undertakings (BDUs) are classified as carriers under the Telecommunications Act, they also fall under the Broadcasting Act, and often are owners of specialty TV channels and other broadcast licences. If the foreign ownership rules are dropped for carriers, the source says those companies would be able to raise financing under more favourable terms than broadcast licensees that aren’t owned by a telecom carrier. "If you don’t allow changes in foreign ownership for broadcasters, then they’re disadvantaged (when it comes to raising money). That’s a legitimate concern," the source states. Suggestions that Canada’s foreign ownership rules should be eased or eliminated aren’t new. However, those discussions have tended to focus on facilities-based telecommunications carriers more so than BDUs, whether it be cablecos, satellite TV companies or wireless cablecos. It now appears that Industry Canada is prepared to take a broad look at all foreign ownership as it applies to various industries. Documents obtained by Decima Publishing Inc reveal that the government’s upcoming White Paper on Innovation could include funding for such a review. In a draft document, Industry Canada requested $54 million over four years to "create a seamless Can-US border (common standards and physical infrastructure); improve regulatory frameworks, including a review of foreign ownership restrictions…" Industry Canada had also put in a request for $32 million over five years to amend various pieces of legislation, including the Copyright Act, the Competition Act and the Telecommunications Act. Any change in the foreign ownership limits would require amendments to the Telecommunications Act. Michael Helm, director general of the telecommunications policy branch at Industry Canada, confirmed that the Broadband Task Force will be calling for a review of the foreign ownership limits. He stresses, however, that there is nothing currently happening on this file within his department. "If there’s something in the near future that would change it, my guess would be that it would be a recommendation from the Broadband Task Force and seeing how the minister reacts to that," Helm told CCR. The source, who asked not to be identified, also says that senior industry executives have met with a senior Industry Canada official and received confirmation that a review of the foreign ownership rules is likely, based on the recommendation of the Broadband Task Force.

Task force report could prompt change in foreign ownership limits for BDUs

Broadcast | May 24, 2001

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Task force report could prompt change in foreign ownership limits for BDUs

Broadcast | May 24, 2001

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