Heritage committee looking at relevance of Britain’s Communications Bill to Canada

Editor's Note: The House of Commons Standing Committee on Canadian Heritage, which is studying the broadcasting system, had intended to go to London, England; Washington DC; and to host a three-day retreat at Meech Lake to put together its report. But the committee’s request for financing for the travel was turned down by the Budget Sub Committee on December 5. Thus, further to the article below, committee members will examine the legislation in paper form only. Members will not be traveling to England to question Parliamentarians there on the British bill. The House of Commons Standing Committee on Canadian Heritage is giving serious consideration to a proposed new British model to deal with media consolidation here as part of its review of the Canadian broadcasting system. Committee members are heading to England to quiz Parliamentarians there on Britain’s recently introduced Communications Bill (CCR, Dec. 5/02). Ironically, the British bill actually calls for a reduction in current restrictions on media consolidation, although it was brought to the attention of the standing committee by Canadian interests looking for a curbing of cross-media ownership here. The lobby group Friends of Canadian Broadcasting recently told the committee that Canada should adapt two existing rules restricting cross-media ownership that are being retained under the Communications Bill. Overall though, the bill proposes to loosen up current British regulations. The standing committee is currently examining the issues of media consolidation and foreign ownership in broadcasting as part of its broad review of the industry. The Communications Bill was introduced in the British House of Commons on November 19. The two existing rules retained under the bill limit joint ownership of national newspapers and Channel 3, the only commercial television service with access to a mass audience at national and regional levels. Specifically, no one controlling more than 20 per cent of the national newspaper market can hold any licence of Channel 3, no one controlling more than 20 per cent of the national newspaper market can hold more than a 20 per cent stake in any Channel 3 service, and no company can own more than a 20 per cent share in such a service if more than 20 per cent of its stock is in turn owned by a national newspaper proprietor with more than 20 per cent of the market. Second, a parallel regional limitation is being proposed that would prohibit regional Channel 3 licensees from owning more than 20 per cent of the local/regional newspaper market in the same area. The Communications Bill also calls for the introduction of a third rule aimed at ensuring that there are at least three local/regional media voices (in television, radio and newspapers), in addition to the British Broadcasting Corp., in every area that has a range of services. This new rule is aimed at simplifying and relaxing existing complicated rules on cross-ownership of local newspapers and local radio services. "We believe the British government’s rationale for this new cross-ownership policy is instructive for your work … So, how about a 20/20 rule for Canada? Friends commends the new U.K. policy to your sympathetic consideration," Friends spokesperson Ian Morrison told the standing committee on November 26. But according to CanWest Global Communications Corp., media concentration in Canada is a myth (CCR, Dec. 5/02). Also appearing November 26, Kenneth Goldstein, CanWest executive VP and chief strategy officer, told the committee that the Winnipeg-based company controls only 12.9 per cent of Canada’s daily newspaper market – an amount below the 20 per cent restriction level being advocated by Britain. But CanWest’s market share figure is contested by others. In a December 10 presentation before the committee, the Quebec union Fédération nationale des communications made reference to CanWest’s 37 per cent share of the English-language newspaper market. As well, Dean Butler, director of media services and president of the Vancouver Media Directors Council, complained how CanWest’s dominance in the British Columbia market was shutting out advertising to regional companies. Butler pointed out that TV advertising spots were being sold primarily to national advertisers, forcing regional advertisers to turn to the newspapers for their advertising needs. He further noted that newspaper advertising rates were on the incline, but that regional businesses had no real alternative since there was no guarantee that they would be able to actually use the TV time they purchased. According to Butler, the TV ad time, even though it was purchased, was often pulled at the last minute and given to companies advertising on a national basis. But Goldstein said that cross-media ownership trends simply reflect an attempt by Canadian media to counter fragmentation in the industry in order to maintain economies of scale. "…There is nothing in the structure of cross-media ownership that has any structural impact on the expression of diverse opinions. It is a matter of corporate culture, not a matter of corporate structure." But during testimony December 4, it was noted that Jan Ravensbergen was appearing only in the capacity as a member of the Montreal Newspaper Guild because as an employee of the CanWest-owned Montreal Gazette he was under a gag order. Lamenting the fact that cross-media consolidation was getting lost in a parallel examination of foreign ownership restrictions, standing committee member Wendy Lill on December 4 centred her questions on what kind of mechanisms were needed to deconstruct the cross-media ownership that exists in the market today. The New Democrat MP has been a vocal opponent of media-cross ownership (CCR, Oct. 11/01). Arnold Amber, director of the Newspaper Guild of Canada, said that the CRTC should make a "real division" between newspaper newsrooms and television newsrooms owned by the same corporation. That issue was heavily debated during the licence renewals of CTV Inc. and Global Television Network. The CRTC made it a condition of licence that the two networks maintain separate newsrooms (CCR, Aug. 2/01; April 26/01). "There was pressure brought years ago to relax the cross-ownership, and I think one could stop it now that it exists. (You can’t really make companies divest now), but you can definitely decide which horse is in which pasture and make sure they don’t keep going to and fro," Amber said. CanWest, however, argues that cross-media ownership allows Canadian companies to survive in the face of mounting pressure from media conglomerates outside Canada. "Canada is a large country but a small market. The total revenue, from all sources, of the entire Canadian media industry is about the same size as three to four months’ revenue for AOL Time Warner or six to seven months’ revenue for Viacom," Goldstein pointed out. "If we artificially chop the Canadian media market into uneconomic pieces, then Canadian media will not be able to compete with media from everywhere that will be coming into Canada, and that will ultimately lead to a reduced ability to tell Canadian stories to Canadians and to the world." While the British government proposes keeping some rules on media ownership, its general approach to reform is deregulatory. It recognizes that there are "synergies to be gained from some consolidation," primarily around cost savings obtained through economies of scale and scope, such as news collection, record checking, and marketing. The British government notes that under its deregulated approach the existence of publicly-owned broadcasters provides additional safeguards of plurality, and "content regulation will maintain the diversity, quality and impartiality of broadcasting output." The Communications Bill thus recommends eliminating current rules that prevent advertising agencies from holding broadcasting licences and allowing religious organizations to own digital television channels and other media outlets. The bill also proposes removing the upper limit of 15 per cent of the TV audience that any one company may control, the rule preventing joint ownership of the two London ITV licences, and the rule preventing joint ownership of a national ITV licence and Channel 5.

Heritage committee looking at relevance of Britain’s Communications Bill to Canada

News | 12/13/2002 5:00 am EST

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