CSR, Sirius make concessions as battle continues over satellite radio

A war of words has hit the subscription radio world, as Cabinet is apparently divided on whether or not to refer the licensing of two U.S.-backed satellite radio services in Canada back to the CRTC for reconsideration. A group of English-language and French-language cultural organizations as well as CHUM Ltd., which was licensed for a terrestrial-based subscription radio service along with Astral Media Inc., have appealed the CRTC’s June 16 decisions to licence Canadian Satellite Radio Inc. (CSR) and Sirius Canada Inc. (CCR, July 21/05). One of the reasons the groups are demanding the decision be re-examined is they are unhappy with the Canadian content levels imposed on the two satellite radio services, which are backed respectively by existing U.S. players XM Satellite Radio Inc. and Sirius Satellite Radio Inc. The parties dissatisfied with the CRTC decisions are making their voices heard. "The issue of satellite radio is…about the very real possibility of losing our Canadian voice as a result of U.S. product dumping into Canada. The CRTC should undertake a policy review of this critical issue and do it as quickly as it can," says Stephen Waddell, national executive director of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA). Both CSR and Sirius Canada have indicated they are pushing toward launch, telling the CRTC on September 6 they will carry the eight Canadian channels mandated by the commission. They were required to respond to the CRTC on the matter within 150 days of its licensing decisions. In the past, the two services have repeatedly said they would have to consult with their U.S. partners to see if eight Canadian channels available on a North American basis were feasible. But with the satellite radio debate becoming so highly politicized as Cabinet considers the requests for appeal, both services have voluntarily made concessions. CSR president and COO Stephen Tapp committed his service to adding an additional two Canadian channels if within 36 months from launch subscriber projections are exceeded by 25%. If those two channels aren’t added, then CSR said it would allocate a further 1% of its revenues toward Canadian talent development to reach a total of 6%. Sirius Canada made the same pledge. "We are starting with eight channels but hope to get to 10 in the first three years," says Gary Slaight, president and CEO of Standard Broadcasting, a partner in Sirius Canada. On September 1, the two licensed subscription radio services answered criticisms flowing from Quebec by committing to carry four French-language channels upon launch. The CRTC has mandated that they each carry at least eight channels (double the number of homegrown channels initially proposed by the two services), and that three of them be in French. As well, they said that French and English programming would be equal if new Canadian channels are added in the first 24 months of operating. A group of French-language cultural groups appealing the CRTC’s licensing of CSR and Sirius argued that requiring 10% of the channels to be Canadian and just 2.5% French ignored provisions of the Broadcasting Act that state the Francophone population should be assured of a variety of French-language words and music in keeping with the bilingual nature of Canada (CCR, July 5/05). "We believe the commitment of equal French and English Canadian channels is a positive step in addressing the concerns of the Quebec cultural community about satellite radio," notes Michel Tremblay, VP of strategy and business development at CBC, a partner in the Sirius Canada service. CSR says that two of its four Canadian French-language channels will be devoted to music, and Sirius states that three of its four will be music-based. Both sides are aiming to sway public opinion in their direction, with Future Shop, for example, running full-page ads in the Globe and Mail, arguing that Canadians need satellite radio. The media has also questioned CRTC chair Charles Dalfen’s impartiality. The French-language La Presse newspaper reported that Dalfen served on the board of directors of CD Radio Inc., the predecessor to Sirius Radio and had stock options in the company. Canadian Heritage minister Liza Frulla apparently would like to see the decision reconsidered, but she has yet to convince a majority of her Cabinet colleagues to make that recommendation. The government must respond to the request for appeal by September September 14 (CCR Update, Aug. 31/05). "I think Cabinet is under pressure for sure, but at the same time they’re under pressure from both sides," says André Di Cesare, a Quebec record producer who is acting as a consultant to CSR on French talent and industry relations. "Cabinet and the government chose people that they think are valuable people that decide things for broadcasters. It’s called the CRTC. These guys study broadcasting on a regular basis. My feeling is that if the government thinks their decision was wrong, that means that the people that are in there are wrong, so they should change them too." If the decision is referred back to the commission for reconsideration, it would not be the first time that the CRTC has changed its decisions following a Cabinet appeal. For example, the commission initially denied entry into Canada of RAI International. But amid political pressure, the rules were loosened so that RAI and other third-language general interest foreign TV channels could be distributed here (CCR, Dec. 20/04). And before that, the CRTC had initially denied a licence to Radio-Canada for a French-language specialty arts channel, but granted it one following a directive from Cabinet (CCR, Aug. 25/99).

CSR, Sirius make concessions as battle continues over satellite radio

News | 09/09/2005 4:00 am EDT

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