BANFF – Would relaxing the rules on foreign investment in Canada around our communications sector help to create competition which in turn, would benefit consumers with lower prices and more choice, or, would it spell the end of our cultural sovereignty?
That theme was the focus of a spirited panel debate Tuesday at the Banff World Media Festival appropriately titled ‘Foreign Ownership: The Impact on the Communications Business’.
Norm Bolen, president and CEO of the Canadian Media Production Association (CMPA), came down hard, and consistently, on the side of preserving Canada’s unique culture at all costs, something that only Canadian ownership can ensure.
“We’re sticking to the notion that Canadian ownership is fundamentally important to our cultural sovereignty and to continue to have a system that reflects what Canadians are about” he said. “We’re very concerned that foreign ownership and control, not investment, would be deleterious to cultural sovereignty.”
“But there’s a number of metrics you can use to determine cultural sovereignty”, pointed out Duncan Stewart, director of research, technology, media and telecommunications with Deloitte Canada, who took the place of Paul Kedrosky on the panel. “For example, to what extent is your content largely domestically produced? One of the metrics used in non-English speaking countries is what percentage of content is watched with titles, and also, to what extent is the language being corrupted by the penetration of English words. These are all widely accepted metrics.”
Moderator Georger Burger, a media consultant who is currently an advisor to independent ISP TekSavvy, said that while cultural sovereignty is a “legitimate concern”, allowing foreign ownership could work if vertically integrated companies agreed to divide their converged assets to distinguish between carriage (telephone and cable pipes) and content.
Michael Hennessey, SVP of regulatory and government affairs at Telus, tentatively accepted that idea, and suggested that perhaps those companies be provided with the option to do so.
“Maybe we say ‘great, these rules, as long as we keep everything integrated, then nobody can touch them’”, he said. “But for people who want to ensure that if the world changes, there’s not one set of rules for one group of people and another set for another group when you’re under the same circumstances, you should always have that opportunity. We’d worry about asymmetry, but I think that you could structure it so that there continues to be contributions to the Canadian broadcasting system and that’s the critical goal that we should work to.”
Bolen, who joked that he often finds himself having to “play Captain Canuck”, said that the negatives will far outweigh any positives.
“We like money, we like to see money in the system and we’re all for foreign ownership” he reiterated. “But we draw the line when it comes to control and ownership. We think that there are good reasons to seriously consider the negative potential impact of foreign ownership on broadcasting, ISPs and BDUs.”
One man that knows something about the foreign ownership debate is Anthony Lacavera, chairman of Globalive. Sharing his story about the challenges to find an investor to back his new wireless service, Wind Mobile, he stressed the need for clarity in the rules.
“When I started to talk to international investors, what I heard time and time again was ‘these rules in Canada introduce uncertainty and ambiguity to a situation that’s already has a great deal of risk’. And because we already have three well-run (wireless) incumbents (in Canada), they said ‘well there’s already risk to your business plan’”, he detailed.
“Then, when you layer on the uncertainty raised by the foreign ownership question, it becomes something that’s just not palatable for investors. I got a whole lot of ‘no’s’ from the international investors – it was definitely not easy and I think it had to do with the lack of clarity and the lack of certainty. The way it’s played out, we’ve been through the wringer… and this debate is not over, the ambiguity is still there, so we urgently need to update the Telecommunications Act to make it clear for investors what they’re walking into.”
That was something that CMPA’s Bolen could agree with.
“It is important to have clarity and certainty of what the rules are, and right now, all of the rules and regulations are in a state of flux and question, and that does create problems for investors”, he concurred. “That’s clearly the case. We may not all agree on what the precise, clarified rules should be, but we need to get them clarified.”
Stewart, who earlier stressed that Deloitte “has no dog in this hunt”, offered a different point of view.
“Just to give you some global perspective, because we can get awfully Canadian up here on this stage, we are not the only country going through this” he added. “There are dozens of countries looking at these same issues. Although clarity is good and I applaud clarity, it is not currently a competitive disadvantage for Canada.”
Cartt.ca senior editor Lesley Hunter is in Banff this week covering the 2011 Banff World Media Festival
