Heritage committee concerned over review of foreign ownership in telecom

Liberalizing foreign ownership rules for telecommunications firms will ultimately lead to similar changes in the broadcasting industry, most members of the House of Commons Standing Committee on Canadian Heritage believe. The Heritage committee, which has been looking at media consolidation and foreign ownership as part of its broad review of the Canadian broadcasting system, has been warned by key players in the broadcasting sector that such an outcome would threaten Canadian content. Industry minister Allan Rock’s announcement last month that the Standing Committee on Industry, Science and Technology would conduct a review of foreign ownership rules in telecom has caused a stir in the broadcasting industry about the potential impact on the sector (RoW, Nov. 25/02 and Dec. 9/02). Many players believe that the telecommunications and the broadcasting industries are too closely linked to have separate reviews. Industry observers expect the Heritage committee to recommend the status quo on foreign ownership in broadcasting, while many believe the Industry committee will opt for relaxing the rules or even eliminating them altogether in telecom. Heritage committee chair Clifford Lincoln says this is a very tricky situation. "It’s literally a rock in the pond. The timing and everything is very awkward," he said at a communications conference in Ottawa on November 28. "One issue we want to avoid completely is confusion in the minds of the public if the recommendations (of the two committees) are potentially conflicting. Instead of achieving consensus, it would create the reverse. That’s a fear. These two systems are so integrated today that it’s very hard to separate the two." An effort to get the Industry committee working together with the Heritage committee on the foreign ownership file was recently quashed. Lincoln noted that a motion to hold a joint hearing wasn’t passed by the Industry committee. He added that he will try to keep abreast as much as possible with the Industry committee’s study. Lincoln noted that his committee will have a report out by March. Walt Lastewka, chair of the Industry committee, recently told Report on Wireless that his committee’s review won’t be completed until late March or early April, with drafting of the report to begin shortly thereafter. Many in the cultural sector agree with most Heritage committee members that the future of Canadian content is at risk if foreign ownership limits in telecommunications firms are eased. Michael MacMillan, chair and CEO of producer and broadcaster Alliance Atlantis Communications Inc., warned that changes in the rules for telecom players would filter down to the broadcasting distribution undertaking (BDU) business and ultimately to the broadcasters, which control Canadian content. "We know that now. It’s the only possible outcome that could flow from (foreign ownership changes in the telecommunications industry)," MacMillan told the Heritage committee on December 4. Astral Media Inc., CHUM Ltd., Alliance Atlantis and union representatives are supporting the status quo. They contend that if foreign firms were allowed to control Canadian BDUs, they would promote their own content over Canadian content. "Once you introduce non-Canadian BDU control alongside existing cross-ownership of programming services, it becomes far more difficult to ensure continued Canadian control over programming decisions," Alliance Atlantis Broadcasting Inc. CEO Phyllis Yaffe said in her presentation to the Heritage committee. The majority of broadcasters don’t believe any changes should be made to current foreign ownership rules in the broadcasting sector, which limit foreign control to 20 per cent direct investment and 33 per cent indirect investment. For more information on the broadcasters’ perspective on foreign ownership, please refer to the Dec. 5 and Dec. 13 issues of Report on Wireless affiliate publication Canadian Communications Reports.

Heritage committee concerned over review of foreign ownership in telecom

News | 12/20/2002 5:00 am EST

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