Deciphering the Shaw-Canwest Deal

Shaw’s purchase of Canwest’s broadcasting assets says a lot about the Canadian media industry, but very little about the audiences most affected by it.

Shaw’s purchase of the broadcasting assets of Canwest has been the talk of the town lately – the latest step in the increasing concentration of media ownership in Canada.

Many seem preoccupied with what this means for the future of media in this country. While this is a fair concern, an equally important issue is how Canada’s regulatory policies and the principles that underlie them have made these developments possible. We should consider both questions in making sense of the Shaw purchase.

First, the deal shows us the importance of owning the podium, if you’ll excuse the Olympian term. Since we now access television without an actual television set, and perform a chunk of media consumption online, owning the various means of distribution – and having the content to put in it – is key. As in the case of Rogers’ and Quebecor’s expanding media empires, Shaw’s move makes a big player even bigger. Cable and satellite companies now own television networks, radio stations, and newspapers as part of their media empires.

It also reminds us that computers, iPods, and smart phones have become broadcasting platforms. Canadians can now access television without an actual television set and consume a good chunk of media online. Companies like Shaw and Rogers are racing to be in the position to profit on this.

Second, the purchase likely complicates the fee-for-carriage drama that grabbed a lot of headlines last year. If Shaw, who was against it, owns Global, who was for it, then it seems we’ll have some players changing sides. What was presented as a "war" between broadcasters and cable companies now looks like an intra-industry dispute. On one side are cable and satellite companies who offer access to content through various devices, while on the other is CBC and CTV who need cable and satellite companies to reach audiences. Might this change how the CRTC handles the dispute? We'll find out in the coming weeks.

Third, it shows us that media concentration is a direct consequence of Canada's media policy. To keep the industry from being hollowed out, the ownership of Canadian broadcasters and distributors is restricted to Canadian companies. The byproduct of this is that only a few companies have the economic might to participate.

In other words, in exchange for ensuring the health of the system, we allow for a concentration of ownership. This comes with a big “but” though, as all changes in media ownership come with a significant public benefits package. Shaw has to give money to various constituencies, such as the production sector, for the Canwest deal to pass. Of course, this doesn't stop concentration from happening; it simply softens the blow.

Fourth, the deal further demonstrates the declining influence of the CRTC, the broadcasting regulator many in the media industry love to hate.

Consider recent events. When Shaw and Quebecor temporarily suspended their contributions to a fund that supports the production of Canadian television programs, the CRTC held a hearing and the government remade the fund to their liking. When the networks didn’t like the CRTC’s refusal to consider the “fee for carriage” regime – twice – they simply lobbied federal politicians who then ordered the regulator to revisit the issue. And when the CRTC recently ruled against Globalive’s application to enter the cell phone market, the government overruled them.

This may be a function of politics under minority governments, but it represents a disturbing trend in which the government meddles directly in organizations that are supposed to operate at arm’s length.

So what conclusions can we draw? That there is a shifting balance of power in the industry, that a concentration of ownership is a lesser evil because of the way it supports culture, and that the CRTC has become a place where people talk while the action happens somewhere else.

Is anything missing here? What about Canadian audiences, those most affected by all of this? They only enter the debate in the crudest of terms, usually as being in desperate need of protection from too much American culture. The cost of that protection is greater concentration and, it now appears, less influence over policy decisions.

What is interesting about the Shaw-Canwest deal, like those that preceded it, is how little audiences are being considered. Since many Canadians use a range of digital devices for their media consumption, the policy debate has to shift away from questions about protection and fears of cultural annexation towards questions about ensuring access to a wide swath of digital life.

But doing this would mean revisiting the principles on which the system is built. Revisiting Canada’s Broadcasting Act, last amended in 1991, might be the best place to begin that discussion.