A TEST FOR TORIES' FREE-MARKET MANTRA Opposition politicians, some cultural groups call on Ottawa to conduct review Simon Tuck – Globe and Mail With files from Brian Laghi
Bell Globemedia's proposed acquisition of CHUM Ltd. will kick-start a pair of wide-ranging federal regulatory reviews, while raising fresh questions about the concentration of media ownership in Canada and challenging the ruling Conservatives' free-market principles.
The deal, announced yesterday by the two Toronto-based media companies, could face stiff tests from both the Competition Bureau, which is the federal antitrust watchdog, and the Canadian Radio-television and Telecommunications Commission, which is responsible for regulating the broadcasting sector.
"Obviously, we're going to spend some time on it," said Robert Lancop, an assistant-deputy commissioner of the Competition Bureau.
Opposition politicians and some cultural groups called on Ottawa to conduct a thorough review, or even reject the deal outright. "We've gone too far down the road of media concentration," said Liberal MP Dan McTeague, who sits on the House of Commons industry committee.
The two regulators have traditionally been responsible -- for the most part autonomously -- for reviewing domestic media acquisitions. But Conservative Industry Minister Maxime Bernier, known as a strong advocate of free-market principles, bluntly told the CRTC last month that it needs to get out of the way, except when absolutely necessary.
Mr. Bernier told the commission it should rely on market forces to the "maximum extent feasible" so that consumers can gain greater choice and lower prices.
The Bell Globemedia deal with CHUM, which will likely absorb the two key regulatory bodies for months, could provide a test for those principles.
The Minister's willingness to direct the commission's focus has helped fuel speculation that the CRTC may be in line for an overhaul. As well, chairman Charles Dalfen's five-year term is coming to a close at the end of this year.
While there were already persistent questions about the role of a telecommunications and broadcast regulator in the digital age, a report from the Senate's standing committee on transport and communications suggested that the CRTC should step aside and let the Competition Bureau play the dominant role in reviewing media ownership deals. The job is divided between the two government bodies.
Analysts said Mr. Bernier could have gone even further in pushing market-oriented reform, while opposition MPs said the government had overstepped its boundaries.
For some, however, the two-pronged regulatory hurdle is inadequate.
Senator Joan Fraser, chairwoman of the communications committee, said the government should create a new body designed to ensure that corporate deals don't leave communities with a lack of media voices.
"Somebody has to keep an eye out for the public interest in the continued diversity of news sources."
The Senate committee issued a report on media ownership last month, after spending more than three years examining the state of the industry. That review was started in the wake of several major media deals, including CanWest Global Communications Corp.'s acquisition of most of Canada's major daily newspapers.
Other major deals have included the creation of Bell Globemedia, which owns the CTV television network and The Globe and Mail. In December, BCE Inc. said it would sell a 48.5-per-cent stake in Bell Globemedia to existing partner and Thomson family investment vehicle, Woodbridge Co. Ltd., and to two new shareholders, Torstar Corp. and Ontario Teachers Pension Plan. Approval of that deal is still pending.
Senator Fraser has said the committee didn't call for a particular threshold for how much media one company can own in a given market, but that 35 per cent is a number that is "not far off" and seems to work well in other countries.
Mr. Lancop said the competition bureau's primary focus will be on how the proposed deal would affect the advertising market. The review could take anywhere from a couple of weeks to five months, he said.
The CRTC must automatically review any corporate deal that causes a licence-holder to change ownership.
Bell Globemedia left little doubt yesterday that it's well aware that the proposed deal could cause some discomfort among regulators. The company said it "expects" it will have to sell CHUM's five A-channels, located in Victoria and in the Ontario cities of Barrie, Windsor, London, Ottawa and Wingham.
The company is confident that the regulator will allow it to set up a "two-stick" structure that creates a distinction between CTV's existing television stations and the remaining CITY stations that are now owned by CHUM. Other broadcast industry officials, however, said the company's proposed selloff of the A-channels is simply an opening bid in its discussions with the commission. |