CRTC denies leak sparked early release of decision on analog channel ownership

The CRTC’s interim chair says the commission’s unexpected and speedy release of a decision related to cableco ownership of analog specialty channels was meant to stave off market speculation, and had nothing to do with another leak. "I haven’t been able to find any credibility to the rumor that there was already some knowledge of the decision," Colville told CCR. "There may well have been a lot of speculation to what the decision might be," he adds, "but the fact is, I think, that speculation was going around at a time when we hadn’t even made the decision." In an unusual move, the CRTC issued an abbreviated decision June 7 that gives cable operators the go-ahead to acquire larger stakes in analog channels (PN 2001-66). A commission vote on the file had only been made the previous day. As a norm, the CRTC releases its rationale with decisions, a process that can delay a ruling’s release by several days, if not weeks. Colville says the commissioners decided to release the new policy on analog channel ownership at the same time as the vote was taken. But an industry source, who requested anonymity, says the commission decided to release the decision when it found out that certain people in industry knew its outcome the day the vote was taken. "(The release of the decision) was primarily a consequence of concern about leakage, not so much to the press but certain commissioners became aware that certain people within the industry already knew the decision," the source reveals. "It was that particular occurrence that drove them to put out the press release. It pretty much mirrors what happened with the digital specialty channels. They felt compelled to put it out to equalize the situation." Last November, a confidential list of Category 1 digital channel winners ended up on the front page of the National Post, about two weeks before the decision was to be released publicly (CCR, Dec. 7/00). Concerns about the extent of leaks from the commission have caused some in the federal government to push the Clifford Lincoln-chaired Standing Committee on Heritage to examine the issue during its 18-month study of broadcasting in Canada, according to an industry insider (CCR May 24/01). But Lincoln says he has been given no official or unofficial instructions from the government to that effect. He adds, "People will probably bring that issue up (during the hearings), but nobody’s asked me specifically to look into anything like that." Avoiding market uncertainty In this more recent decision, Colville says it was important to make an announcement quickly because several of the companies affected are publicly traded. "It’s been quite some time since the issue first landed on our table and there has been a lot of transactions set up that have been pending … We felt it was incumbent upon us to get the decision out fairly quickly," Colville adds. Regardless of what prompted the quick release, Canadian Cable Television Association president and CEO Janet Yale praises the move. "I think in this case, it was a very creative, very smart thing to do. It stopped the speculation and eliminated opportunities for leaks," says Yale. "I think after what happened with the digital licensing decision, the commission was obviously worried that something as highly charged as this taking too long to get out was going to get the rumor mill going at full frenzy," she adds. "I would encourage them to do it in other situations as well." However, CRTC spokesperson Denis Carmel says the commission will not make a habit of releasing decisions before the rationale. The decision is a landmark one for cable operators. The new rules allow them to own a controlling interest in analog specialty channels. Pending further changes, they’ll also no longer require prior approval before increasing their ownership in a channel beyond 10 per cent. But the CRTC has said that cablecos cannot confer on their own services more favourable contract terms than non-affiliated services. As well, any competitively sensitive information relating to a satellite distributor or other competitive distributor that is obtained by a cable-affiliated channel should not be shared with the cablecos. Broadcasters are also entitled to obtain, at their expense, independently verified subscriber numbers for their specialty channels on an annual basis. Some concern has been expressed by broadcasters that no mention was made of safeguards, such as the Competition Bureau’s suggestion in its submission that a cap be placed on the number of analog channels a cable company could acquire. But Yale says that it would be difficult to choose an appropriate number for a limit. "What do you base it on? Is it number of services? Per cent of revenue?" she asks. "The commission does have a very stringent test – which is the undue preference standard," she adds. "If someone feels what has been done constitutes an undue preference, the commission has all the powers it needs to examine all the facts of a particular case to examine whether or not, what has happened is or is not undue preference and take appropriate action." The CRTC is expected to release the reasoning for the decision in mid-July.

CRTC denies leak sparked early release of decision on analog channel ownership

Broadcast | June 21, 2001

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