CRTC should begin auctioning broadcast licences: AIMS

Broadcasters in Canada could one day be bidding for their spectrum in a government-run auction - just like wireless service providers currently do - if Ottawa greenlights a recommendation in a new report from the Atlantic Institute for Market Studies (AIMS)."Traditional distinctions between telecommunications and broadcasting are rapidly blurring and it is a bizarre state of affairs that two federal organizations could use such highly different approaches to assign frequencies that are, in some cases, identical in their technical characteristics," reads Chicken Little Eats Crow: How the Critics Got It Wrong about Spectrum Auctions. "To the extent that the CRTC believes it necessary to attach conditions to broadcasting licences to achieve social and cultural goals, this can be done within an auction framework, so long as these conditions are defined and made known to bidders before the auction."Ian Munro, director of research at AIMS, points to the MDS and MCS spectrum bands (2500 MHz to 2696 MHz) as a prime example of the dual licensing approach adopted by the federal government gone awry. The two bands are technically identical with one allocated for cable TV and the other for fixed wireless Internet access."Yet you have these two completely different regulatory regimes, different processes, different fee and pricing regimes and at the highest level just seems really dumb to be doing," he tells Canadian Communications Reports. MCS spectrum was licensed in a matter of months through a comparative review process, while the CRTC took years to license MDS spectrum and there are still regions of the country with no licensed MDS operators."Currently the CRTC holds lengthy bureaucratic processes to award licensees, generally on a market-by-market basis meaning that the process of selecting licensees for a given spectrum band across the country can take years. As well, the licence fees charged by the CRTC are largely divorced from the market value of the spectrum in question," states the report.Munro says this approach is flawed because prospective licensees are forced to present how Canadian they are to the CRTC and they pander to these "fuzzy, lofty" objectives."People come in, provide their applications and then wrap themselves in beaver pelts and dress themselves in maple syrup, trying to prove they are more Canadian than the next guy," he says. "But there's no real hard benchmark to judge against."Munro suggests auctions would help solve this by forcing "the bureaucrats and the politicians to be much more honest about what they are trying to achieve or about the feasibility of achieving these supposed cultural end goals because right now the system is turned the other way."There are examples across the Canadian TV universe of networks and channels offering programming that might not necessarily fit based on licence conditions. The History Channel broadcasts CSI: NY multiple times during the week and CBC shows Coronation Street in prime time five nights per week.Cultural groups and their supporters would likely oppose any move to a more market-based approach for broadcast licensing, but Munro suggests those concerns could be satisfied through conditions of licence. A broadcasting licence up for auction in Saskatoon for example could come with the caveat that a certain amount of programming is required to meet Canadian cultural objectives. Equally, rules regarding the types of programming could be set in licence terms."If the government thinks it needs to impose these kinds of regulations then they should be more honest about it and say ‘We think that X% has to this or Y% has to be that, and thou shall live by it,'" says Munro. "The point is all these regulations really seem like a game. It allows the regulators, the politicians to make some kind of statement to people who aren't really paying attention that ‘We're doing all this wonderful stuff to preserve and protect our cultural' - whatever that really means at the end of the day. It's really kind of a farce so why bother."

CRTC should begin auctioning broadcast licences: AIMS

Broadcast | October 30, 2008

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