Shaw maintains its position on Section 15 of the Broadcasting Act; CRTC chair calls it ‘hogwash’

Shaw Communications Inc. is standing its ground after the chair of the CRTC dismissed as “hogwash” the company’s recent salvo in the fee-for-carriage debate. Ken Stein, Shaw’s senior vice president for corporate and regulatory affairs, told The Wire Report that Shaw maintains its position that the government must consider the CRTC’s report on fee-for-carriage before a decision can be made. Stein suggested that CRTC chair Konrad von Finckenstein overstepped his bounds when, during hearings last December, the chair said the commission can decide on the issue independently. “Frankly its not up to him to make that determination,” Stein said. Shaw executives presented several recommendations to the CRTC at a hearing on Dec. 9, 2009 as the commission studied fee for carriage—the thorny debate over whether cable and satellite companies should compensate broadcasters for carrying free, over-the-air signals. In addition to policy recommendations, on Dec. 9, Shaw put forward a point on process. It argued that Section 15 of the Broadcasting Act says that if the government requests the CRTC to report on an issue—which it has done in this case through an order in council—the government must to consult with the commission before a decision can be made. Shaw argued this precludes the CRTC from arriving at a decision on fee-for-carriage before the government has responded to its report. Von Finckenstein rejected this position at the Dec. 9 hearing, saying that “there is nothing that I see in this order in council that says, ‘don't do anything until the government has made a decision.’” At a meeting the following day, von Finckenstein recounted the hearing with Shaw, saying that he had told the company that its argument “was a bunch of hogwash, plain and simple.” Von Finckenstein went on to say that if the government wanted to give the CRTC direction, it could do so under Section 7 of the act, which allows the government to issue “directions of general application on broad policy matters,” subject to a lengthy parliamentary review process. “We are an independent tribunal,” von Finckenstein said. “We make decisions when we want and how. The government has the power to give us direction. When they give us direction, they have to use Section 7; it has to be tabled in Parliament; it has to be voted upon; it has to be consulted, and then indeed we will follow the direction.” But Stein emphasized the importance of Section 15 of the Broadcasting Act. “Parliament put in place Section 15 for a reason,” he said. “Our position remains the same. Once the government issues a Section 15 —the reason Section 15 exists—it is to give the government an opportunity to consider the policy implications, which we think are significant.” Stein added: “A government agency can be as independent as it wants, but if it imposes a fee on consumers without discretion, that's a tax.” CRTC legal expert Grant Buchanan, a partner with McCarthy Tétrault in Toronto, suggested Shaw is taking a “unique position” on the Broadcasting Act. “I think we line up squarely with the chairman on this one,” Buchanan said. “You have to read into this that the commission, as an independent tribunal, can't go about its business. Suppose the government doesn't get back to it. There're lots of outcomes.” Buchanan suggested that if the government wanted to push the CRTC in a certain policy direction, Section 7 could apply. Stein rejected this position, however. “Our answer on that is, well, maybe didn't want to tell what they wanted to do, maybe they wanted to hear what view was first. That's what Section 15 exists for.” Shaw has been a longtime opponent of the fee-for-carriage proposal, and is involved in the “Stop The TV Tax” lobby campaign along with Rogers, Bell, Telus, Cogeco and EastLink. The opposing lobby campaign, the “Local TV Matters” coalition of broadcasters, is comprised of CBC, CTV, Canwest, CHEK News and NTV. Broadcasters argue that leaving the regulatory regime in place is an unfair position given the cable companies' ability to create a dual-revenue business model, and that a failure to compensate them for their signals would result in the closure of local TV stations. Cable companies argue that a new pricing regime is effectively a “tax” and should require parliamentary approval. The CRTC is expected to issue its report on fee-for-carriage by March 15.

Shaw maintains its position on Section 15 of the Broadcasting Act; CRTC chair calls it ‘hogwash’

Broadcast | January 19, 2010

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