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CRTC returns Shea's application; Langford decries "blind eye"

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Advertising and Ratings
CRTC/Regulatory - TV
OTTAWA - Today the CRTC returned an application made by long-time broadcast executive Kevin Shea where he proposed selling Canadian advertising on American specialty channels carried here.

Earlier this year, Shea proposed to launch a new company, 49th Media, which would have been a satellite relay distribution undertaking that delivered U.S. specialties like CNN, A&E;, Headline News, TBS, Golf Channel and SpikeTV with substituted Canadian advertising in place of the channels' usual American ads.

The application was opposed by Canadian broadcasters since they feared the exodus of dollars away from existing Canadian specialty services, despite the fact that Shea promised 25% of the revenue he booked would go to Canadian television production. Shea estimated that over seven years, that sum would be as high as $230 million.

Such a company, offering ad time on a popular stable of channels, would have become the third-largest television advertising vehicle in Canada after CTV and CanWest Global, Canadian Association of Broadcasters president and CEO Glenn O'Farrell told www.broadcastermagazine.com today. He believes the revenue Shea's company forecast would not be added, but simply shifted away from already established Canadian broadcasters.

"It's an old idea that's been kicking around for a long time that hasn't gotten any better with age," he said, adding 49th Media, as proposed, would cause "significant damage and disruption to the system and put very little back in."

However, the Commission never considered any of these factors and sent the 49th Media application back, much to the chagrin of dissenting commissioner Stuart Langford, because Shea could not provide absolute written proof that the U.S. cable channels were on board with the idea.

"In my opinion, the public interest would be best served if the Commission were to declare 49th Media Inc.'s application complete, gazette it and proceed to a public hearing," writes Langford. "Only by so doing can the many issues raised by the 49th Media's proposal be properly analyzed and evaluated. To simply return the application on grounds that it is deficient - a questionable conclusion, in my view - is to deny the applicant the process to which I believe it is entitled and to deny the Canadian public an opportunity to become better informed on issues of pressing importance to it.

"I make no comment on the merits of the 49th Media's application and take no position on either the competing views of stakeholders or the policy issues concerned," he continues. "It seems to me, however, that for the benefit of the Canadian broadcasting system the merits or lack thereof of all questions raised would be better debated sooner rather than later. I see no value in turning a blind eye to them.

"The majority decision places it in a no-win situation. Worried about jeopardizing current business arrangements in Canada, U.S. broadcasters are not willing to commit themselves until 49th Media is licensed. The Majority is unwilling to begin the licensing process until 49th Media obtains commitments," adds Langford. "This seems grossly unfair to the applicant and to the Canadian broadcasting system that can only benefit from having the issues underlying the 49th Media proposal aired publicly.

"There is a lingering sense culled from reading the three letters supplied by the applicant that backroom lobbying has displaced open forum discussion. This is unfortunate. The Canadian broadcasting system requires fresh ideas if it is to continue to serve Canada well. How sad it would be if on a technicality - a technicality, by the way, which appears to be founded upon a misinterpretation by the majority of what 49th Media proposed and what Commission staff requested - the broadcasting system and Canadians in general were deprived of the opportunity to evaluate whether or not the 49th Media proposal is just such an idea."
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