FOURTEENTH BIENNIAL NATIONAL CONFERENCE SPONSORED BY THE LAW SOCIETY OF UPPER CANADA AND THE CANADIAN BAR ASSOCIATION NEW DEVELOPMENTS IN COMMUNICATIONS LAW AND POLICY APRIL 25-26, 2008 REVISITING CANADIAN OWNERSHIP AND CONTROL OF CANADIAN COMMUNICATIONS COMPANIES by Grant Buchanan and Lorne Salzman McCarthy Tétrault LLP, Toronto, Ontario, Canada Table of Contents I Introduction................................................................................................................ 1 II Origins of the Canadian Ownership And Control Rules in Broadcasting and Telecommunications................................................................................................... 2 (A) Broadcasting ............................................................................................................... 2 (B) Telecommunications................................................................................................... 3 (C) Radiocommunication .................................................................................................. 5 III Canadian Ownership and Control Requirements in 2008............................................ 5 (A) The Broadcasting Act ................................................................................................... 5 (i) Canadian Ownership and Control ....................................................................... 6 (ii) Change of Ownership or Control......................................................................... 9 (B) The Telecommunications Act ........................................................................................ 9 (C) The Radiocommunication Act...................................................................................... 12 IV Application of the Canadian Ownership and Control Rules ...................................... 14 (A) Introduction.............................................................................................................. 14 (B) The Application of the Rules by the CRTC under the Broadcasting Act ..................... 15 (i) Terence Hui ...................................................................................................... 15 (ii) Electronic Digital Delivery Inc........................................................................... 18 (iii) Consortium Cable-Axion Digitel Inc. ................................................................ 19 (iv) Fundy Cable Ltd./ltée ........................................................................................ 24 (v) Primetime Canada ............................................................................................. 27 (vi) Look Communications Inc................................................................................. 31 (vii) Food Network Canada....................................................................................... 34 (viii) CTV/Netstar ..................................................................................................... 36 (ix) Introduction To The Digital Services................................................................. 39 (x) Tech TV (Formerly ZDTV Canada).................................................................. 39 (xi) The Biography Channel..................................................................................... 43 (xii) MTV Canada/Connect...................................................................................... 49 (xiii) TV Land Canada............................................................................................... 56 (xiv) Bell Nordiq Group Inc. (formerly known as Télébec ltée) .................................. 58 (xv) Persona Communications Inc. ........................................................................... 59 (xvi) Sirius Canada Inc. and Canadian Satellite Radio Inc. ........................................ 64 (xvii) TELUS Communications Inc. and TELUS Entertainment Inc. .......................... 66 (xviii) AGI Cablevision Inc.......................................................................................... 68 (xix) Standard Radio Inc............................................................................................ 69 (xx) Aliant Telecom Inc., and Câblevision du Nord de Québec inc........................... 71 (xxi) Saskatoon Radio Broadcasting Ltd..................................................................... 77 2 (xxii) Ten Broadcasting Inc......................................................................................... 79 (xxiii) Outdoor Life Network ....................................................................................... 81 (xxiv) Category 2 Digital Specialty and Pay Services Post-2000.................................... 82 (xxv) Trinity Broadcasting Network of Canada Inc. .................................................... 82 (xxvi) Frank Rogers, on behalf of a company to be incorporated .................................. 83 (xxvii) Seabridge Media Inc. ......................................................................................... 84 (xxviii)Canadian Ethnic Broadcasting Corporation (“CEBC”) ...................................... 84 (xxix) TVA Group Inc. and Première Loge .................................................................. 85 (xxx) HobbyT.V. Inc. ................................................................................................. 86 (xxxi) Alliance Atlantis ............................................................................................... 86 (xxxii) BCE Inc............................................................................................................. 91 (C) Application of the Canadian Ownership and Control Rules by the CRTC Under the Telecommunications Act.............................................................................................. 94 (i) Unitel................................................................................................................ 94 (D) Application of the Canadian Ownership and Control Rules by Industry Canada under the Radiocommunication Act........................................................................................... 106 (i) Telesat Canada................................................................................................ 109 V Commentary on the Canadian Ownership and Control Test and its Application..... 109 (A) Timing .................................................................................................................... 109 (B) Programming Committees ....................................................................................... 110 (C) Working With the Control Test.............................................................................. 111 (D) Proposals to Change the Canadian Ownership and Control Rules ........................... 118 VI To Conclude ........................................................................................................... 122 Revisiting Canadian Ownership and Control of Canadian Communications Companies by Grant Buchanan and Lorne Salzman1 McCarthy Tétrault LLP, Toronto, Ontario, Canada I Introduction Twelve years ago, Eileen Clarke and Lorne Salzman delivered a paper on Canadian ownership and control to the April 1996 conference on New Developments in Communications Law and Policy.2 Entitled “Control in Reality – Identifying Principles of Control in Canadian Communications Law,” The paper explained the Canadian ownership and control rules that applied to communications companies, and explored the meaning and application of the hazy concept of “control in fact.” Six years later, Grant Buchanan, Monique Lafontaine and Lorne Salzman authored a follow-up paper for the April, 2002 Conference.3 That paper reviewed the numerous developments in both the broadcasting and telecommunications spheres, including a significant change in the rules themselves in 1997. Since then, this field has been active. The Canadian Radio-television and Telecommunications Commission (“CRTC” or “Commission”) has released a number of Canadian ownership and control decisions, primarily in the broadcasting sphere. After six years, it is now time to revisit this topic and update our discussion of the rules and their application. In so doing, we draw heavily on the material in the earlier two papers. This paper begins by providing a brief overview of the history of the Canadian ownership and control rules in the communications field, and sets out the regime as it applies today to broadcasting, telecommunications and radiocommunication enterprises. This paper then discusses how the two key regulators, the CRTC and Industry Canada, have applied the rules in various decisions and matters. This analysis explains how these regulators have looked at control, and what factors they have viewed as particularly important to determining where control lies. We conclude with our 1 ©McCarthy TJtrault LLP, 2008. 2 Clarke, Eileen E. and Salzman, Lorne P., “Control in Reality: Identifying Principles of Control in Canadian Communications Law,” New Developments in Communications Law and Policy: Canada and the Global Information Society, A National Symposium sponsored by the Law Society of Upper Canada and the Canadian Bar Association, Ottawa 26-27 April 1996. 3 Buchanan, Grant, Lafontaine, Monique T., and Salzman, Lorne P., “Canadian Ownership and Control of Canadian Communications Companies”, New Developments in Communications Law and Policy; A National Symposium sponsored by the Law Society of Upper