Satellite Radio and Canadian content

[Harold F. Schiffman]

>>From Globeandmail.com

Top cabinet ministers debate the fate of satellite radio

By JANE TABER AND BRIAN LAGHI

Tuesday, September 6, 2005 Page A4

 OTTAWA -- The federal cabinet is split over a CRTC decision to grant U.S.
satellite radio licences, an issue now so politically charged an ad hoc
committee of senior federal cabinet ministers will debate the fate of
those licences in a conference call today. The results of that debate will
be taken to Prime Minister Paul Martin's full cabinet on Thursday for a
final decision on whether to allow the June 16 decision to stand or ask
the Canadian Radio-television Telecommunications Commission to take
another look at it. It is extremely unusual for a federal cabinet to refer
a decision back to the CRTC.

Heritage Minister Liza Frulla wants the decision reviewed after Liberal
MPs, especially from Quebec and Atlantic Canada, raised concerns at the
recent summer caucus retreat about Canadian and French-language content.
"It would be fair to say there is no consensus view at this point," a
senior government official said. "There is policy versus politics on
this." The amount of attention given to the issue underscores how
politically difficult it is for the Martin government, which is just
months from a federal election. The ad hoc committee was put together very
quickly, the senior official said.

"I think PCO [Privy Council Office] and PMO [Prime Minister's Office] were
having a very difficult time making up their minds late last week as to
where they want to take this," the official said. In an all-out lobbying
war, guardians of Canadian culture are arguing that satellite radio
threatens the domestic recording industry. CHUM Ltd. and Astral Media Inc.
have led the charge, appealing the CRTC decision to cabinet. Ms. Frulla is
championing their cause. "I think this is fair to say this has become a
highly politicized file,"  Peter Miller, CHUM vice-president, said. "For
those of us that are part of the appeal or advocating appeal, it's a
fundamental issue of 'Cancon' regulation and whether we believe it should
continue or whether we believe that new technologies should be used . . .
as an excuse to do away with [Canadian content regulations]. . . . "

Proponents of the satellite stations say a referral to the CRTC would set
the project back at least two years. Canadian Satellite Radio Inc. and
Sirius Canada Inc. are the two consortiums with U.S. partners that won
subscription licences. CHUM and Astral were granted a similar licence, but
have said their business plan won't work if the two satellite-radio
subscription licences go ahead.

John Bitove Jr., head of CSR, said yesterday that jobs will be lost if the
decision is referred back. Since the CRTC granted the licences in June,
Mr. Bitove has increased staff to more than 40 full-time employees from
12. That will go up to 70 or "down to zero," he said, depending on
Thursday's decision. And Liberal seats could be at stake in Quebec and
Atlantic Canada if the issue is mishandled. However, the political
minister for Quebec, Jean Lapierre, who is also the Transport Minister,
indicated to his colleagues last week that he didn't believe this is a
Quebec issue.

"In terms of communication, I do not view this as a Quebec or francophone
issue," Mr. Lapierre wrote. Meanwhile, the government official says the
PMO is concerned about Atlantic Canada. ". . . It's the Atlantic caucus
too that has PMO shaken a little bit," the official said. East Coast
musicians have lobbied the Atlantic Liberal MPs vigorously for the
decision to be referred back. The PMO's "concern in Atlantic Canada is not
the Tories. It's the NDP . . . and so that's their concern that somehow
this would be used by the NDP against them [in an election]."

The ad hoc committee includes high-powered ministers such as Deputy Prime
Minister Anne McLellan, Industry Minister David Emerson, Public Works
Minister Scott Brison, Government House Leader Tony Valeri and Ms. Frulla.
The CRTC's June decision granting the licences after two years of
consideration was unanimous. It allows Canadian Satellite Radio and Sirius
Canada to broadcast hundreds of radio stations from U.S.-owned satellites
to Canadian subscribers. The licence requires at least 10 per cent of the
stations to be Canadian, a figure that many cultural and music industry
groups say is too low.

Current rules require domestic radio stations to have at least 35 per cent
Canadian content. Quebec MPs have complained that there are not enough
French-language channels on the satellite system. Last week, Sirius and
CSR pledged to increase the number of French channels to four from three.


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