TelecommunicationsTelecommunications law embraces a wide range of activities referable to the regulated sectors of telecommunications, broadcasting and broadcast distribution. More precisely, it refers to activities regulated by the Department of Industry Canada pursuant to the Radiocommunications Act and the Canadian Radio-television and Telecommunications Commission pursuant to the Telecommunications Act.
Someone looking for the rules that govern restrictions on cross-media ownership in the Canadian market could be forgiven for looking up the Competition Bureau. Their second choice would likely be the Canadian Radio-television and Telecommunications Commission (CRTC) and indeed, that would be more fruitful.
The problem is that there is a hazy jurisdictional divide between the two regulatory bodies, a complication that continues unabated since the CRTC issued its new cross-media ownership policies in 2008.
The policies fall under three rubrics:
- cross-media ownership policy: ownership of only two of three types of media (radio, conventional over the air television, and newspaper) in a local market will be allowed;
- television ownership policy: no one will be allowed to control any combination of conventional, specialty and pay undertakings which have more than a 45 per cent share of the national television audience. The CRTC will closely examine transfers generating a share between 35 and 45 per cent, and will review expeditiously applications for a share less than 35 per cent;
- broadcasting distribution undertakings (BDU) ownership policy: no one will be allowed to control all BDU (cable or satellite TV) in a given market.
While the stated purpose of the new policies is to preserve the diversity of voices in the Canadian broadcasting system including the diversity of editorial voices at the local level and the diversity of programming at the local, regional and national levels, the CRTC expressed no concern regarding the existing state of diversity; rather, it aimed its policies at an expected round of consolidation resulting from the trend to audience fragmentation. The Commission also confirmed its existing policies regarding conventional television and commercial radio ownership.
The policies have raised some important questions, including whether they are actually necessary; what impact they will have on the interface between the CRTC's regulation of the Canadian broadcasting system and the Competition Act's impact; whether they will result in the blocking of potentially beneficial license applications or mergers; and whether the CRTC will inject any real meaning into the words “in general” that are found in the rules and describe their applicability.
With regard to the last question, most observers suspect that the CRTC will stick closely to the rules it formulated, even though the words “in general” suggest that these rules contemplate some exceptions to their own black and white language.
Indeed, among the proposals received by the CRTC were a number of submissions in favour of a case-by-case policy over hard and fast written guidelines. The rejection of these proposals suggests that the new rules will be applied quite strictly across the board.
Still, no one expects that they will be applied arbitrarily. While observers concede that it will be hard to make a case against application of the rules, they also believe it will not be impossible.
At the same time, although critics concede that certainty and predictability — goals espoused by the CRTC — will doubtlessly flow from the articulation of the new policies, they question whether the rules are too blunt an instrument to achieve the purposes intended. To this end, they posit the case of a large city like Toronto where someone who is already into TV and newspapers wants to take a run at the radio market with an innovative product offering. The prohibition against ownership in three media would preclude that offering, they note, and perhaps do some harm to the diversity of voices objective by the elimination of a new player in the market.
These are the same critics who question whether there is a need for new rules in the first place. They point out that the CRTC recognized that none of the transactions reviewed by it during the most recent consolidations would have raised concerns under its new policies.
They also argue that the CRTC's general regulatory powers are broad enough to preserve a diversity of voices in Canada's broadcasting system. But the formal extension of the CRTC's policy to newspapers may raise questions about the Commission's jurisdiction, which appears to be limited to the broadcasting system.