INDUSTRY BLASTS NEW REVIEW OF DIGITAL RADIO Simon Tuck – Globe and Mail If the federal broadcast regulator is forced to conduct another review of subscription radio, it will mean pink slips, millions of wasted dollars, and another year in which Canadian car buyers won't have access to the same digital services enjoyed by U.S. consumers.
Those were the warnings Sunday from the auto industry and satellite radio providers, after weekend reports that Heritage Minister Liza Frulla will ask her cabinet colleagues to send a CRTC decision to issue satellite radio licences back to the regulator for more review.
After intense lobbying from industry and her own caucus, Ms. Frulla has written a proposal that calls for cabinet to tell the Canadian Radio-television and Telecommunications Commission to reconsider after Liberal MPs raised concerns about Canadian and French-language content.
One of the applicants, Kevin Shea, head of Sirius Canada Inc., said the CRTC would have little choice but to start from scratch with a new review if the decision is sent back.
That, he said, could mean another two years, enough time for the blossoming grey market to establish dominance. Sirius says there are already about 100,000 Canadians subscribing to U.S. satellite radio and that the grey market could grow to three million.
John Bitove Jr., head of Canadian Satellite Radio Inc., another successful applicant, said he wasn't surprised to hear that Ms. Frulla is poised to ask for another review. “We had been forewarned that the minister would be the toughest part of this.”
Both satellite players said they'll lose big dollars and eventually will have to cut jobs if the CRTC is forced into another review. “Shareholders are going to review their options,” Mr. Shea said.
The CRTC decision, which saw all three subscription radio applicants receive licences, was issued June 16 after a process that included public hearings and took about two years.
But some business and cultural groups appealed the decision, mainly on grounds that the services will not carry enough Canadian content. The loudest voices for cancellation or reconsideration have come from Quebec because of the small number of French-language channels on the satellite systems.
The Liberal caucus is clearly divided on the issue: Many Quebec MPs want the ruling overturned, while many from southern Ontario — home of the auto sector — and rural areas where there are fewer radio options want the licencees to proceed.
The cabinet will have the options of accepting the CRTC ruling, setting it aside — effectively killing the licences — or sending the issue back to the commission for reconsideration.
Sirius and CSR, each of which is a consortium with U.S. partners, plan to beam hundreds of channels of radio content across Canada. Each is supported by at least one major auto maker, which plans to put satellite radio gear in new vehicles, and both say final approval is needed as soon as possible.
David Patterson, General Motors of Canada Ltd.'s vice-president of corporate and governmental affairs, said Sunday that his company will have virtually no chance of getting satellite radio into 2006 models if the issue is returned to the CRTC. “We've already missed certain models.”
Satellite radio has been available in some U.S. cars for several years, Mr. Patterson said.
A joint proposal by CHUM Ltd. of Toronto and Astral Media Inc. of Montreal also received a licence for a similar service using ground-based transmitters. But the CHUM-Astral group made it clear that their business model wouldn't work if the two competing satellite groups were also licensed. The group filed an appeal to the federal cabinet last month.
Peter Miller, CHUM's head of regulatory affairs, said Ms. Frulla has little choice but to ask cabinet to send the decision back to the CRTC because the ruling contradicted one of the basic tenets of the Canadian broadcasting sector.
The ruling granted licences with only about 10 per cent Canadian content, he said, whereas cable service providers and others have always been required to provide about as much domestic as foreign content. “It's a huge departure.”
But the battle and the intense lobbying have only just begun.
Sirius Canada is set today to release study that it commissioned on the issue that found public support for its position. The study, conducted this month by Veraxis Research and Communications, found that only 20 per cent of Quebeckers want the CRTC decision overturned, while 22 per cent of Canadians said they'd be interested in subscribing to satellite radio.
The study was based on a sample of 1,200 Canadians, including 500 in Quebec. |