CABINET TRIES AGAIN TO BREAK SATELLITE-RADIO DEADLOCK Simon Tuck – Globe and Mail The federal cabinet has taken the unusual step of asking one of its committees to make a final decision on a controversial issue, a move spurred by a looming deadline on an appeal of three prized satellite-radio licences and cabinet's inability to reach a decision itself.
An ad hoc cabinet committee failed earlier in the week to reach a consensus on the Canadian broadcast regulator's ruling on satellite radio.
Cabinet decided yesterday to hand off authority on the matter to its operations committee.
The move is the latest sign that the Liberal government is deeply divided over the issue and that the furious lobbying on both sides of the issue is having an effect.
Both Heritage Minister Liza Frulla and Industry Minister David Emerson -- who share responsibility for satellite radio and other matters that go before the Canadian Radio-television and Telecommunications Commission -- said little yesterday when asked about federal plans for satellite radio.
The government has until next Wednesday to decide whether it will turn back the appeal, or send the CRTC's licensing decision back to the regulator for review.
Ms. Frulla said the issue is now "the main subject" on her desk. Mr. Emerson said simply that "no decision has been taken at this time."
As is often the case, government and broadcast industry sources say, the Heritage and Industry ministers have opposite points of view on a key CRTC matter, which is expected to influence both the economy and Canadian culture.
Key ministers have lined up on both sides of the debate. Those from Atlantic Canada and Quebec are largely in favour of sending the ruling back to the CRTC, while most of those from Southern Ontario and the West are seen to support the regulator's decision to give the okay to three applicants for subscription-based radio licences.
The recording industry, defenders of Canadian-content laws and some artists have been against the CRTC decision, while other artists, business groups and the auto makers (who hope to put satellite radio gear in some of their 2006 models) support the ruling.
The operations committee may meet today or early next week. "It'll get done before the deadline," a senior Liberal source said.
The 13-member committee, chaired by Deputy Prime Minister Anne McLellan, includes political heavyweights such as Ralph Goodale (Finance), Jean Lapierre (Transport), Ujjal Dosanjh (Health) and House Leader Tony Valeri.
The stalemate within government has followed almost two months of heavy lobbying and public debate, after the CRTC gave the nod to all three applicants.
Two satellite-based applicants, Sirius Canada and Canadian Satellite Radio, each have a U.S. partner and plan to beam scores of U.S. satellite stations and a much smaller number of Canadian stations throughout North America.
The third applicant, a joint effort by CHUM Ltd. of Toronto and Astral Media Inc. of Montreal, won approval for a terrestrial-based system that would use more conventional technology to reach urban centres only, but would offer more Canadian content.
But those two companies were not pleased about the CRTC decision because they had hoped that only one, or even neither, of their satellite-based competitors would get a licence and that the requirements for such things as Canadian content and French-language services would be more onerous.
CHUM-Astral and a host of other groups appealed the CRTC decision to cabinet in July. Under federal law, the government has 45 days to respond to that appeal, a period that expires Wednesday.
Since the appeal was filed, CHUM and Astral have won over a large chunk of the Liberal caucus. Their key argument is that the two satellite licences are unfair and threaten the future of Canadian-content laws because they call for dramatically less domestic content than the 35 per cent that is required of conventional radio outlets.
In the past two weeks, the satellite companies have staged a comeback by buying newspaper ads, boosting their own lobbying, and offering to air slightly more Canadian content and French-language services than their licences require.
The companies have already invested millions, and at least tens of millions in potential sales are sitting on the table. The fledgling industry is seen as a chance to get in early in a niche that could prove hugely popular and profitable.
John Bitove Jr., head of Canadian Satellite Radio, said he started making big investments in his business after the ruling, believing that he and the government had reached a deal. "I started spending millions." |