The National Post carried dueling Op Ed pieces debating the merits of the acquisition by Bell of Astral Media.

Supporting approval of the deal was Bell regulatory chief Mirko Bibic, who wrote that the deal provides an alternative to cable giants Videotron and Rogers in an article subtitled: “Astral will make Bell more competitive in a borderless world.”

Canada now has four large vertically integrated companies offering both media and communications services. Of the other three, two oppose the Astral deal, while Shaw supports it. Why the difference? We all compete as broadcasters, but Rogers and Quebecor compete directly with Bell for TV subscribers in Ontario and Quebec. With the launch of Bell’s new Fibe TV service, both are seeing their long-dominant position in the urban TV marketplace under threat.

On the other side of the issue, MTS Allstream’s Chief Corporate Officer Chris Peirce wrote that the CRTC should say ‘yes’ to competition in an article subtitled: “Don’t just say ‘no’ to Bell. Say ‘yes’ to a ­creative marketplace.”

How can this degree of control by a private economic interest possibly serve Canadians and Canadian businesses? At a minimum, the CRTC and Competition Bureau must recognize that the more Bell is allowed to integrate all of these elements, the more direct and enforced regulation will be needed to prevent Bell from putting its economic interests ahead of the public good and, especially, competition that will result in the innovation, growth and leadership Canada is capable of in this emerging digital era. The measures adopted by the regulator have not been strong enough in this regard.

The oral hearing concluded last week in Montreal. According to the CRTC’s revised schedule, participants in that hearing have until Friday to submit their final comments [up to 10 pages], and then Bell has another week [until September 28] to file its final reply.

Michael Godwin observed:

As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1

Regardless of the topic in an online discussion, given enough time some bozo inevitably jumps the shark by making a comparison to Hitler and the Nazis. It is wrong on so many levels, but most fundamentally such comparisons serve to trivialize the unspeakable horrors of 70 years ago.

As the number of eyewitness survivors to the Holocaust diminishes, it is perhaps less shocking to some. Such hyperbole can never be considered acceptable.

GigaOm has an article reporting on comments delivered by Netflix Chief Content Officer Ted Sarandos at yesterday’s Bank of America Merrill Lynch 2012 Media, Communications and Entertainment event at the Beverly Wilshire hotel in Beverly Hills, California. To set some context, Sarandos was responding defensively to a statement by the moderator about Netflix having “a fraction” of the level of content available to Canadian Netflix users. Sarandos  interrupted, repeatedly saying “not accurate” to something that is apparent to almost anyone else comparing the US and Canadian catalogs.

From the webcast [beginning around the 28:00 minute mark]:

Viewing hours are almost… are very similar [in Canada] to the US. The problem in Canada is not content, the problem in Canada, which is one of our strongest markets, is they have almost third world access to the internet. Not because it’s constrained for any reason except for money. They have very low datacaps with all the broadband providers in Canada and they charge an enormous amount if you go over your broadband cap. It made us be much more innovative about compression and delivery technology so we are less broadband consumptive in Canada.

It’s almost a human rights violation what they charge for internet access in Canada.

Whoa! There it is. The Sarandos corollary: When among the well heeled, it is fair to joke about the travails of those far, far away.

For someone sitting at the Beverly Wilshire hotel, speaking just before the bar opened in the hotel’s Royal Suite for “drinks galore”, maybe it was supposed to be poking fun. I might have started with complaining about the hotel charging $33 for a couple eggs, toast, bacon and coffee. From the comfort of the Beverly Wilshire, perhaps it is too easy to avert your eyes away from the suffering of real victims of actual human rights violations.

Almost as disturbing was the uncritical way GigaOm reported the item. But, that is a different matter for another day.

When broadcasting assets change hands, the CRTC assesses the transaction, at least in part on the basis of  “how it will benefit the communication system from a social, economic and cultural perspective.”

In the case of the current hearing that is probing the proposed acquisition of Astral Media by Bell, the CRTC is testing:

• the concentration of ownership in the French- and English-language television and radio sectors
• [compliance with] the Commission’s various policies, including the diversity of voices, the common ownership policy for radio and television, and vertical integration
• the value of the transaction, and
• the proposed tangible benefits package as well as the intangible benefits.

The latter three bullets come together in that “tangible benefits” item. As I wrote in July, tangible benefits are effectively a euphemism for a “tax” on the value of the transaction, used to fund a public benefit, in effect tangibly confirming how the transaction delivers “benefits to the system.”

We can find references to this system operating for at least the past 35 years. Nearly 20 years ago, the CRTC wrote:

Tangible benefits generally fall into three broad categories: operating expenditures, such as in the areas of additional staff or programming improvements; capital expenditures for technical improvements; and grants and contributions to Canadian talent or program development funds.

In many transactions, the majority of funds have been dedicated to “grants and contributions to Canadian talent or program development funds.”

I think this has been a policy failure. Don’t get me wrong. I strongly support the idea of funding Canadian talent and Canadian program development. I trust that the federal government supports this as well – otherwise, such a program has no business being part of the CRTC’s license transfer approval process.

My issue is that if we, as a nation, truly believes this is an important sector to fund, then its funding should not be dependent on merger and acquisition deal flow.

Why not make the tangible benefits cost an explicit tax, with cash payable to the Receiver General and have Canada Revenue Agency perform the audit function on the valuation of the deal? Recent megadeals in Canada’s broadcast sector have seen tangible benefits packages in the hundreds of millions of dollars – breathtaking levels of funds changing hands.

Are we actually administering the funding programs with consistency, transparency and accountability?

Should the Canadian creative community be subjected to feast or famine funding formulae?

The CRTC twitterfeed made the bold announcement about an investigation under the Do Not Call List (“DNCL”) rules:

#CRTC investigates the Conservative Party of Canada’s internal do-not-call-list practices. #DNCL crtc.gc.ca/eng/archive/20…

— CRTCeng (@CRTCeng) September 6, 2012

Uh oh! At first, one might sense that going after the Conservative Party of Canada (“CPC”) would serve to balance the $5000 fine levied two weeks ago against the Guelph Liberal Association.

Such high profile cases can help draw attention to the rules, perhaps serving as a way to encourage greater compliance with the Unsolicited Telecommunications Rules. It is reminiscent of the CRTC reaching settlements with Canada’s three largest wireless carriers (TELUS, Bell and Rogers) under the rules back in 2010 and 2011.

After all, the latest report from the CRTC says that nearly 11 million lines are registered on the National Do Not Call List and the Commission receives about 15,000 complaints per month.

The letter from the CRTC observes that complaints have been filed against the Party for 4 years now. It might be expected that at least some complaints have been somewhat politically partisan in nature. The CRTC’s present concern is described as follows:

In response to our Request for Information letter dated 18 June 2012, you advised that the practice of the CPC has been to maintain two IDNCLs, one for calls made for solicitation purposes and the other for calls made for non-solicitation purposes such as outreach to, or identification of, Canadians. In our view, the facts of our recent investigation revealed that confusion is created by the following two practices by the CPC:

• this maintenance of two IDNCLs, and
• the lack of clarity in scripts authorized by you for calling purposes.

The letter from the CRTC goes on to say

… these practices do not meet the requisites of subsection 41.7(4) of the Act, which refers to the maintenance of a single internal do not call list to ensure that no further unsolicited telecommunications, whether made for the purpose of solicitation or not, are received by the call recipient

Reading this, you might think that the CRTC has landed the big fish – the governing political party – as a showcase for future prosecutions under the Do Not Call List rules. Even better, the release of the letter was on the same day that the CRTC released its three year work plan, which highlights DNCL enforcement under one of its 3 key pillars: “Protect”, enhancing the interests of Canadians by promoting compliance.

But the Conservative Party case is not so clear cut.

One of the problems is that the language of Section 41.7(4) does not really refer to a “single internal do not call list.” The Act says:

Every person or organization that, by virtue of subsection (1), is exempt from the application of an order made by the Commission that imposes a prohibition or requirement under section 41 shall maintain their own do not call list and shall ensure that no telecommunication is made on their behalf to any person who has requested that they receive no telecommunication made on behalf of that person or organization.

Does the singular expression “call list” mean “single internal call list” and preclude the possibility of two lists?

Do all Canadians who ask a political party to stop soliciting for money actually have the intention of asking that party to stop calling for all other purposes?

I may not want to donate to the party, but I don’t mind getting calls to hear about political platforms or get invited to a barbecue. Having multiple databases, or options within a single database, might provide a better opportunity for Canadians to identify their do not call preferences.

In any case, those of us who listened to the parliamentary committee debates on the DNCL heard the MPs express the belief that their political calls would not be stifled by this legislation.

Under the CRTC’s Unsolicited Telecommunications Rules, virtually all references are to Telemarketing type calls, a term defined as: the use of telecommunications facilities to make unsolicited telecommunications for the purpose of solicitation. Was it the intent of Parliamentarians for these rules to be applied for calls that are not for the purpose of solicitation? “Solicitation” is also a defined term, meaning the selling or promoting of a product or service, or the soliciting of money or money’s worth, whether directly or indirectly and whether on behalf of another person. This includes solicitation of donations by or on behalf of charitable organizations.

As I tweeted, the great thing about politicians getting caught in the DNCL web is that our Cabinet and Parliamentarians will get to see the administrative burden they have imposed on businesses for compliance.

Just wait until they get first hand lessons about anti-spam rules.

Three press releases in quick succession from the CRTC might be viewed as a signal that there is a renewed focus on consumer issues at the regulator.

First was the CRTC’s reminder last Thursday that new rules regarding TV commercial “loudness” were coming into effect over the Labour Day holiday weekend (the rules were actually set 4 months ago).

The following day came the announced appointment of the CRTC’s first Chief Consumer Officer, charged with ensuring “that consumer issues are integrated into all aspects of the CRTC’s work and that its decisions are more relevant to Canadian consumers.”

And then yesterday’s Communications Monitoring Report was released with the following statement by the Chair:

This report is used to gauge whether the communications industry is meeting the needs of Canadians as consumers, citizens and creators. The information it contains will help them make more informed decisions in the marketplace and enhance their participation in our public proceedings.

Taken together, these appear to signal that the CRTC is placing a renewed focus on the impact of its work on consumers.

The first major proceeding under new Chair JP Blais will be the Bell-Astral review, with the hearing opening on Monday in Montreal. Among the issues has been the variety of market share numbers getting debated by the parties. The CRTC rules from the “Diversity of voices” proceeding distinguish between less than 35% and more than 45%, with good debate on transactions that fall in between 35% and 45%:

The Commission, as a general rule, will not approve applications for a change in effective control that would result in the control, by one person, of a dominant position in the delivery of television services to Canadians that would impact on the diversity of programming available to television audiences. Specifically,

• as a general rule, the Commission will not approve transactions that would result in the control by one person of more than 45% of the total television audience share – including audiences to both discretionary and OTA services;
• the Commission will carefully examine transactions that would result in the control by one person of between 35% and 45% of the total television audience share – including audiences to both discretionary and OTA services; and
• barring other policy concerns, the Commission will process expeditiously transactions that would result in the control by one person of less than 35% of the total television audience share – including audiences to both discretionary and OTA services.

So what is there to debate? Take the total numbers from the various broadcasters under Bell and divide by the total market, right?

Not really. The opposing parties can’t agree on either the numerator or denominator for that calculation.

According to  press release from Bell, data from the newly released Communications Monitoring Report supports Bell’s view. The coalition opposing Bell read the same CRTC report and issued their own release saying the numbers support their view.

In the oral hearing leading to the Diversity of voices decision, among the key issues upon which the Commission asked parties to focus their comments:

The plurality of commercial editorial voices in local and national markets and the most effective means of ensuring that Canadians are exposed to an appropriate plurality of these voices.

Again, we see a consumer focus. Post merger, do I have access to a plurality of voices?

In examining the various number, I expect the CRTC to ask what are the choices from a Canadian consumer perspective?