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Let CRTC judges be judged

As the CRTC readies to hear applications for new digital TV licences, Matthew Fraser turns a critical eye on the commission itself

In beauty contests, all eyes are fixed on the attributes of the well-endowed, cat-walking contestants, who are often put on the spot with spontaneous questions. But few ever question the qualifications of the anonymous judges who pick the winners.

The high-stakes spectacle of Canada's regulatory politics is not much different. When Ottawa regulators hand out licences for lucrative TV channels, major Canadian media players rehearse their acts and strut their stuff during a ritualized series of public hearings that often resemble the swimsuit segment of a Miss Canada pageant. Hyperbole is always a decided asset.

The government-appointed adjudicators who "pick winners" -- and thus confer enormous economic privileges on a happy few -- never come under the same scrutiny as the candidates who walk away with the lucrative trophies. Maybe it's time the cameras were trained not on the regulated, but on the regulators.

An opportunity to do so comes next week, when the Canadian Radio-Television and Telecommunications Commission kicks off yet another bureaucratic beauty contest. On Aug. 14, the CRTC begins three weeks of landmark hearings to award licences for "digital" TV channels. The regulator has been deluged with more than 450 applications, most of them from the major Canadian media groups such as Rogers, Shaw, CTV, CanWest Global, Astral Media, Alliance Atlantis, CHUM and so on. But only 10 or so licences will be handed out in the priority category -- channels that will receive mandatory carriage by cable and satellite systems.

Once again, a panel of CRTC commissioners is empowered to decide who will -- and who won't -- be first to cash in on television's digital universe. Who are these people behind the arcane bureaucratic process -- and backroom lobbying -- that determines the bestowal of regulatory largesse in Canada? And how did they get appointed to the CRTC?

Appointments to the commission are made at the discretion of the Prime Minister, though they are often delegated to the Minister of Heritage. In practice, though, big media companies lobby hard in political corridors to get reliable proxies appointed. CRTC appointments thus are the result of a complex and opaque process that mixes political patronage, bureaucratic politics and financial interests. The "public interest" is generally not a priority consideration.

Some appointments to the CRTC, to be sure, have been excellent. But over the years, the commission has been stacked with a motley collection of failed politicians, wives and offspring of political bagmen, girlfriends of senior party members and cronies of industry executives. Neither Tories nor Liberals stand out as particularly virtuous in this regard.

In the United States, appointments to the Federal Communications Commission are undeniably partisan, but have the merit of being completely transparent and open to public scrutiny. Though FCC appointments are officially made by the White House, in practice, the two big U.S. political parties share them. Indeed, FCC commissioners are routinely described in the American press as occupying "Democratic" or "Republican" slots at the regulator.

Checks and balances also ensure transparency in the U.S. appointments system. All FCC nominees are subject to rigorous U.S. Senate hearings for confirmation. Senate committees are well staffed and politically powerful. In 1997, for example, Senator John McCain used his clout to make sure the term of FCC commissioner Rachelle Chong was not renewed -- even though she was, like Mr. McCain, a Republican. This could never happen in Canada. In fact, Parliament -- whose committees are notoriously docile -- never scrutinizes CRTC appointments.

The U.S. regulatory system is also more efficient. While the FCC counts only five commissioners, in Canada -- a country with a tiny fraction of the U.S. population -- the CRTC is cluttered with no fewer than 13. Yet for most CRTC hearings, only three or five commissionerssit on the panel.

This surplus can produce the negative effect of slanting CRTC decisions. How? The CRTC chairperson has the statutory authority to hand-pick the commissioners who sit on specific panels to "hear" applications and pick winners. As everybody in the industry knows, panel selections -- often based on known biases, affinities and levels of competence -- can predetermine a regulatory outcome. Put bluntly, it's easy for a CRTC chairperson to "stack" the deck.

Let's look at the four commissioners that CRTC chairperson Françoise Bertrand picked to award new digital TV licences, along with herself. According to insider sources, they are: Andrée Wylie, Joan Pennefather, Martha Wilson and Ron Williams. Who are these people?

Françoise Bertrand, former head of Télé-Québec, is close to Liberal circles in Quebec. She is generally regarded as a weak CRTC chairperson who lacks vision and leadership, and performs poorly in public. Senior industry executives say Ms. Bertrand has compensated by exploiting her power to choose friendly commissioners to sit on important CRTC panels. By selecting two reliable allies on a five-member panel, Ms. Bertrand can secure at least a 3-2 majority decision in her favour.

Industry executives believe that, during the forthcoming digital channel hearings, Ms. Bertrand will count on the support of Andrée Wylie and Joan Pennefather. Ms. Wylie is a bright, intellectually rigorous lawyer whose husband, Torrance Wylie, is a well-connected Liberal. Ms. Pennefather has also been plugged into high-level Liberal circles for many years. A Bertrand-Wylie-Pennefather triumvirate would mean, in effect, that the votes of Martha Wilson (a former Rogers cable employee) and Ron Williams (a bureaucrat from the Northwest Territories) are irrelevant. Ms. Wilson, in any case, can be expected to vote with the majority -- which may in fact be needed if Ms. Wylie breaks rank.

The exclusion of certain CRTC commissioners is just as revealing as who actually sits on panels. Ms. Bertrand could have justifiably expanded the forthcoming CRTC panel -- say, to seven members -- to ensure more regional representation. But the presence of additional commissioners would run the risk of diluting the final vote and, consequently, potentially eroding Ms. Bertrand's sewn-up majority. Indeed, commissioners such as David Colville, Stuart Langford and David McKendry are known for their independence and inclination to write well-worded dissenting opinions. Thus, a seven-member panel could turn Ms. Bertrand's guaranteed 3-2 majority into a 4-3 vote against her. And she knows she's expected to deliver what's known in the industry as "regulatory predictability."

What's more, Ms. Bertrand, whose term expires next year, is entering a lame-duck phase as she prepares this month to preside over a hearing worth millions in profits to the lucky winners. If Ms. Bertrand can't get her term as CRTC chair extended, she will almost certainly be looking for a senior position in the industry she now regulates. Some of these industry interests are the same big Canadian media groups bidding for licences to launch new digital channels.

Surely this Byzantine regulatory intrigue isn't necessary as an adjudicative guarantor of the "public interest." If anything, the public interest risks being thwarted by a regulatory process that, as decades of experience have amply demonstrated, is more about commerce than culture. Make no mistake: Most CRTC commissioners have always put private interests before the public.

At the very least, Canada should adopt a U.S.-style system, in which CRTC appointments are transparent and subject to parliamentary scrutiny -- if only to encourage public debate. If regulatory beauty pageants can't be stopped, Canadians should know as much about the judges as they do about the contestants.

Matthew Fraser is professor of communications at Ryerson Polytechnic University.

High-power cabal snuffs out low-power television

The CRTC again yields to established broadcast interests

Matthew Fraser Financial Post

Jan Pachul is hardly a Canadian media mogul and probably never will be. But Mr. Pachul has seized on an idea whose time surely has come -- intensely local TV stations targeted exclusively at the residents of particular urban neighbourhoods.

Mr. Pachul selected Toronto's east-end Beaches and Riverdale neighbourhoods for his low-power TV station. The Beaches is a trendy, upscale enclave nestled genteelly on Lake Ontario; and Riverdale is a formerly working-class, but increasingly gentrified, residential area made famous in the popular Canadian TV series, The Kids of Degrassi Street.

To impress Ottawa regulators, Mr. Pachul successfully demonstrated his ability to operate a community-oriented television station (on the UHF band's Channel 15) reaching some 129,000 households in Beaches-Riverdale. But he still needed a formal licence from the Canadian Radio-television and Telecommunications Commission to commercially launch his station, which would provide a local outlet to community, volunteer, immigrant, religious and other groups.

Mr. Pachul went to the CRTC with 43 letters of support for his low-power TV station. But a cabal of powerful broadcasting interests -- Canadian Association of Broadcasters, Canadian Cable Television Association, CHUM Television, Rogers Cablesystems, CTV Inc. - resolutely opposed his plans.

On Aug. 21, the CRTC issued a decision closing down Mr. Pachul's low-power TV station. The CRTC's bureaucratic rationale was expressed in predictably opaque language, citing concerns about frequency management, cable carriage arrangements and conformity with existing regulations. The real reason, however, was that a clutch of big Canadian broadcasters with antennas in the Toronto market feared Mr. Pachul's upstart TV station might steal commercial revenues and, worse, could trigger a contagion of similar low-power TV stations across the country.

Mr. Pachul's setback is a sad defeat for "local" expression at a time when big media interests are exploiting concerns about "globalization" to win regulatory approval for industry consolidation. It's also symptomatic of Canada's over-regulated, paternalistic and cliquish broadcasting system, in which the logic of monopoly invariably prevails over pluralism, competition and free expression. The CRTC, while piously evoking the values of "diversity" to justify other agendas, once again has demonstrated its time-honoured reflex of blocking new market entrants.

In the United States, where the values of pluralism are more deeply entrenched, the emergence of low-power broadcasting provides a striking contrast to the Canadian experience. Indeed, the U.S. Federal Communications Commission -- the CRTC's counterpart -- has taken precisely the opposite approach toward low-power television and radio.

The FCC began actively promoting low-power television -- or LPTV -- nearly 20 years ago as a vehicle for local self-expression. Today, some 2,200 LPTV stations are operating in the United States. In 1998, the FCC announced it would follow the LPTV example in radio by licensing thousands of low-power FM stations.

As in Canada, the National Association of Broadcasters -- the powerful lobby for big U.S. broadcasters -- went ballistic and launched a blitzkrieg assault on the FCC's decision. Armed with contestable engineering reports claiming low-power broadcasting erodes "spectrum integrity," the NAB furiously lobbied Congress to derail the FCC. The NAB also appealed the FCC decision in U.S. courts.

The FCC demonstrated remarkable courage in the face of the NAB's hardball lobbying tactics. William Kennard, the FCC chairman, maintained that low-power radio and TV stations provide outlets of self-expression to minorities, women and countless community groups. Last fall, the U.S. Congress passed the Community Broadcasters Protection Act to protect LPTV stations from getting bumped by mainstream broadcasters attempting to muscle in on their frequencies.

In Canada, the CRTC -- whatever it may claim officially -- remains opposed to low-power broadcasting, especially in urban areas where signals threaten the interests of major broadcasters. Accordingly, the CRTC restricts low-power radio licences to "campus" and small stations in remote regions. And last week, the CRTC snuffed out Canada's only LPTV station -- Mr. Pachul's community station in Toronto's east end.

Surely the CRTC, which has rubber-stamped massive consolidation of the Canadian media industries, should aggressively encourage local pluralism as an appropriate trade-off. Let's be clear: Consolidation is necessary and will bring many benefits. But diversity and pluralism are also in the public interest. Yet while the CRTC remains awestruck by towering oak trees, it stubbornly refuses to let a thousand flowers bloom.

To be fair, two CRTC commissioners -- David McKendry and Barbara Cram -- wrote stinging dissents against the majority decision to put Jan Pachul out of business. The CRTC also announced it would undertake a study of low-power television some time in the future. That doubtless is small comfort to Mr. Pachul -- or to the residents of Toronto's Beaches-Riverdale.

But there's good news for Mr. Pachul. Because the CRTC's decision relates to a "licence" application, he can appeal it to the federal cabinet. He should do so promptly. A federal election looms and Cabinet members have local constituents. The Cabinet thus may be inclined to overrule the CRTC -- and force the regulator to think differently about low-power broadcasting.

Matthew Fraser is professor of communications at Ryerson Polytechnic University.