Media monopoly
Media consolidation: Can Aussie model stop the moguls?

Last Updated Sept. 19, 2006
By Armina Ligaya CBC News

Federal bureaucrats and Canada’s media moguls have been hashing it out this week, trying to figure out how many people can play in the country’s news game, and by what rules. They may be looking “down under” for inspiration.

The hearings by the Canadian Radio-television and Telecommunications Commission in Gatineau, Que. — dubbed “Diversity of Voices” — started Sept. 17 and will explore media consolidation and ownership in Canada in the wake of three big industry takeovers that are changing the face of the country’s news and entertainment business.

In the past 14 months, CTVglobemedia, already a huge conglomerate controlling CTV and the Globe and Mail, among others, snapped up CHUM Ltd. CanWest Global Communications, which owns Global Television, one of Canada’s two national private sector networks, bought Alliance Atlantis. Astral Media Inc. took over Standard Broadcasting Ltd., which owns 52 radio stations in 29 markets across the country.

While these mergers may well remain intact, no matter the outcome of this week’s hearings, the decisions made by the CRTC as a result of these talks will likely set the tone for the future of the industry.

The hearings have been looking abroad for potential solutions to the ever-shrinking media ownership pool.

Konrad von Finckenstein, former commissioner of the Competition Bureau and new CRTC head, is said to be eyeing media regulation system used by our commonwealth cousins in Australia, according to The Globe and Mail.

The case down under
The beauty of the Australian approach is its simple points system. Plus, it allows acquisition-hungry TV operators to know in advance just how much of a local market they’ll be allowed to monopolize.

In an attempt to ensure that there are many players — and many views — in any given market, the Aussies divide the country up into geographical sectors and apply a point system.

In larger urban centres, there must be a total of five points: in other words, there needs to be at least five major players in each market. Smaller rural markets are allocated four points.

If an area has less than five points, then the Australian Communications and Media Authority deems it an “unacceptable media diversity situation.”

Each mainstream media outlet, whether a newspaper, radio or TV station, is worth one point.

If any company owns more than one medium in one market, collectively it counts as just one point. However, according to the rules that came into effect on April 7, 2007, one person or company cannot own a newspaper, radio and TV station, which the ACMA labels an “unacceptable three-way control.”

The rules apply only to future acquisitions. Public broadcasters, like the CBC, are exempt.

Apply it to Canada
It’s a “media diversity” test many Canadian cities would fail miserably, says Kim Kierans, director of the School of Journalism at the University of King’s College in Halifax, who has researched media concentration.

“If you look at Vancouver, you’ve got CanWest Global gobbling up most of it,” Kierans says. “Where are the other four points coming from? Where are the four other independent outlets?”

In the mountain-flanked city, CanWest owns two main TV stations and Vancouver’s two major news papers, The Vancouver Sun and The Province.

Under the ACMA’s criteria, Montreal, Toronto, and possibly Calgary, don’t meet the required threshold of five points either, she says.

New Brunswick, one of Canada’s smaller markets, also wouldn’t make the four-point mark, she says.

“All the newspapers, mostly, are owned by Irvings,” she said. “If you take away public broadcasting what do you have in New Brunswick?”

Saint John has satellite CTV and Global stations, but because they aren’t main stations, they wouldn’t earn points, she said. That leaves Rogers and private radio stations, which don’t broadcast news, she added.

While previous media mergers aren’t likely to be affected by the outcome of the CRTC hearings, future changes to Canada’s media landscape must be shaped with strong policies, she says.

“You think that it can’t get any bigger,” Kierans said. “I mean, in 2000 I didn’t think we’d see what we’ve seen this year. So there’s always room for consolidation, isn’t there?”

Another reform scenario bandied about during Monday’s CRTC hearings would restrict companies from owning more than 25 to 33 per cent of Canada’s cable channels. A third proposal would prevent cable companies from owning more than one cable and satellite TV service.

The U.K. faced a similar dilemma — how to moderate cross-media ownership and the potential problem of too many outlets in too few hands – and ended up with a “super-regulator” to determine how much of the “public voice” a company could control.

According to the government’s 2001 rules, a national newspaper could not own more than 20 per cent of a non-satellite TV station, but cross-media merger regulations were loosened after much debate in the House of Lords, and cries from media moguls such as News Corporation’s Rupert Murdoch, who wanted to buy Channel 5.

British super-regulator OfCom was then created to replace each of the five watchdogs for media and telecomm industries.

These alternative systems would not work in Canada, industry executives argue.

But many parallels can be drawn between Canada and Australia, says Lawrence Surtees, an analyst covering the telecommunications sector with IDC, a global market intelligence firm.

“The Australian market is the most similar to Canada in the world,” he says. “And I make that statement on a whole lot of levels… it’s one of the few countries where we’re comparing an apple with an apple.”

Canada and Australia have similar populations and market developments, he said.

The two countries also resemble one another geographically, with concentrated pockets of people in metropolitan areas and vast expanses of uninhabited land, he said.

Similar threads can be seen on more subjective factors, such as culture, because of our shared beginnings in Britain, he says.

“The CRTC knows there are only a couple of relevant models to examine if they’re looking at changing how they do things,” Surtees said.

The wild west
However, the real reach of these hearings remains to be seen.

In order for Canada to head down the Australian route, the federal government would need to empower the CRTC to regulate newspapers, Surtees said.

“It isn’t solely up to the CRTC. They need to have a statutory mandate to do this. Does the Government of Canada have the stomach or desire to wade into a media cross-ownership issue? I would submit that it’s questionable,” Surtees says.

And with media taking new forms online – still an unregulated wild, wild west — changes to the CRTC mandate may have little effect.

“The two wild cards of cross ownership are the internet [and interactive media],” he says. “So we can obsess about cross ownership of traditional media, but if it doesn’t take into account internet and interactive media, which they’ve been trying to avoid, then I don’t think any nation or state can truly govern.”


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