MEDIA BOSSES SIZE UP CRTC HEAD Grant Robertson – Globe and Mail Anyone who glanced around the crowded hearing room in Gatineau, Que., last week where executives with CTV Inc. had come to seek approval from Canada's broadcast regulator for the proposed takeover of CHUM Ltd. would have noticed something unusual.
Stuffed into the back few rows of folding metal chairs was a who's who of the Canadian broadcasting industry. There was Ian Greenberg, the white-haired chief executive officer of Montreal's Astral Media Inc., sitting quietly and listening intently.
Not far away was Standard Broadcasting Ltd.'s Gary Slaight, never known as a shirt-and-tie CEO, who had donned a suit for the occasion. And peppered throughout the crowd were senior officials with CanWest Global Communications Corp., also watching closely.
They had come to size up Konrad von Finckenstein, the former federal court judge who now heads the Canadian Radio-television and Telecommunications Commission. These were Mr. von Finckenstein's first hearings as chairman of the CRTC, and the curiosity in the room was evident.
Beyond CTV's $1.4-billion takeover of CHUM, Mr. von Finckenstein will soon preside over hearings into CanWest's $2.3-billion acquisition of Alliance Atlantis Communications Inc. and the $1.1-billion purchase of Standard by Astral after that.
His influence over the industry in the coming year has broadcasters practically hanging on his every word.
“I rented the suit,” Mr. Slaight later joked. “When you go to that kind of occasion, you try to wear a suit.”
It is a crucial year for the CRTC, and Mr. von Finckenstein has arguably been handed one of the most ambitious mandates of any incoming chairman: the potential reshaping of the regulator itself.
Details of his plans started to emerge this week in an unlikely place far from the corridors of power in Ottawa.
At a speech on Thursday, to members of the British Columbia Association of Broadcasters in the lakeside resort town of Penticton, B.C., Mr. von Finckenstein unveiled plans to begin reworking the regulations governing the industry by commissioning a review of the CRTC itself. The report is to be completed by a pair of communications lawyers, Laurence Dunbar and Christian Leblanc, over the next four months.
“There is no doubt that a new wind is blowing,” he said. “We have a government that is very keen on less regulation, and that has directed us to accept market forces as the default and regulation as the exception.”
He added: “Regulation will always be necessary. The question, however, is what level of regulation?”
What implications those words have for the three major takeovers before the CRTC is not yet clear. CTV, for example is seeking key regulatory concessions in its takeover of CHUM, hoping to be allowed to operate two TV networks in several cities, something the regulations frown upon.
Should the doors be thrown open to an easing of the rules on consolidation or any other topic on which the broadcasters want more flexibility, observers say it will likely come at a cost.
“We call it the regulatory bargain,” said George Addy, a lawyer at Davies Ward Phillips & Vineberg and former head of the Competition Bureau.
Simply put, companies may be asked to boost their investments in Canadian programming if they want to be given the flexibility they argue is needed to compete for rapidly fragmenting audiences that is being caused by the Internet.
However, the broadcasters should not expect an easy ride from Mr. von Finckenstein. Close friends and former colleagues say he is one of Ottawa's best intellects. Conservative and Liberal governments alike have relied on him to oversee key files ranging from free-trade negotiations in the eighties to proposed bank mergers and airline consolidation when he ran the Competition Bureau between 1997 and 2003, before moving on to a federal judgeship. (Through a spokesman, Mr. von Finckenstein declined requests for an interview.) “He is not someone who is easily threatened or intimidated,” said a former colleague at the Competition Bureau. “He just looks at everything intellectually. He's pretty unflappable.”
What executives in the back of the room witnessed last week, when CTV executive Ivan Fecan testified on the CHUM deal, gave them a taste of how he will operate.
It took little time for Mr. von Finckenstein to confront the network boss. With his opening question, Mr. von Finckenstein challenged CTV's argument that mid-sized broadcasters like CHUM can no longer survive in Canadian television. Strapped for cash, CHUM needs to be merged with a bigger player in order to prosper, Mr. Fecan argued.
“I find that sort of difficult to believe,” Mr. von Finckenstein said bluntly. “What is the basis of your relatively categorical demand?” Mr. Fecan went on to describe the difficulties CHUM's television operations were experiencing as it tried to compete with much bigger rivals, Global and CTV.
Some of its stations are “teetering” financially, the CEO said. CTV's plan was to make CHUM's CITY-TV stations a second national network within the company.
Mr. von Finckenstein's next question sent a chill through the room. “Thank you. You made a very detailed explanation why this is in the interests of CTV, but I am not quite sure whether I quite understand why it is in the public interest that this deal be approved,” he said in a rich German accent that has changed little in more than 40 years since he came to Canada as a teenager with his diplomat mother, who was posted to Ottawa.
It was vintage von Finckenstein, said the former colleague at the Competition Bureau. If he doesn't like the answer he gets, ask again. “There are many people who might be intimidated by the top business leaders in the country. He's not. He's pragmatic and he tells you exactly what he feels.”
Other executives scribbled notes. The exchange – not 20 minutes into the proceedings – set the tone for seven hours of questioning.
The debate clearly had an impact. This week CTV came back with an offer to divest itself of CHUM's Winnipeg CITY-TV station, and possibly stations in Calgary and Edmonton, to ease concerns about consolidation – provided CanWest's own secondary network, CH, isn't allowed to expand its reach into those cities. In a filing to the CRTC Friday, CanWest objected to the proposal. |