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Satellite Radio’s Shift From Policy to Politics

Appeared in the Toronto Star on September 5, 2005 as Overturning Satellite Ruling Would Signal Lobbyists Reign
Appeared in the Ottawa Citizen on September 8, 2005 as Radio Daze

Last summer, just as Liza Frulla was being installed as Canada’s new Minister of Canadian Heritage, the Canadian Radio-television and Telecommunications Commission (CRTC) issued a controversial decision barring the entry of RAI, the Italian language television network, into Canada.  Minister Frulla faced an immediate political firestorm as critics called on her to quickly overturn the decision.

Despite enormous pressure, the new Minister stood by the CRTC.  In response to criticism from opposition parties, she told the House of Commons that "the CRTC is an independent tribunal and an arm’s length body. Of course we cannot have any political use of that body."

Pressure built throughout the fall as opposition parties continued to focus on CRTC decisions.  When the Minister was asked to intervene in cases involving two U.S. television networks, Fox News and SpikeTV, she again emphasized the independence of the CRTC, noting that "it will make its decision, and we are going to respect that decision."

Fast forward to last week: same CRTC, same Minister Frulla, but a much different message.  At issue now was the CRTC’s decision on satellite radio.  It adapted Canadian content requirements to the digital age by granting licenses to bring the popular U.S. satellite radio services to Canada with new mandates for Canadian content.

The decision was popular with Canada’s automakers, who were planning to install satellite radio receivers in their 2006 model cars, as well as with the large electronics retailers, who anticipated a big seller in the upcoming Christmas shopping season.

More importantly, Canadian artists and the broader public were generally supportive of the decision.  Thousands of independent musicians welcomed the opportunity for new exposure of their work, noting that the CRTC established specific requirements for Canadian content from lesser-known artists.  Meanwhile, many Canadians were simply relieved that satellite radio was finally moving north and that the two-year policy process was complete.

Notwithstanding the backing of a significant body of artists and individual Canadians, Minister Frulla’s actions made it clear that opposition from several Quebec groups, as well as organizations such as the Canadian Recording Industry Association, took priority by hinting that the federal cabinet plans to either reject or demand a reconsideration of the June decision.

Cabinet will reportedly discuss the matter on Thursday, yet Minister Frulla has already signaled that the government plans to intervene, telling one reporter that "our mind is pretty much made up."

Those comments sparked a flurry of lobbying activity featuring dueling press conferences, full-page advertisements, critical editorials, and commitments from two services to equalize the number of French-language channels.

All the sound and fury seemingly did little to sway governmental opinion.  Toronto-area MP Sarmite Bulte, the Parliamentary Secretary to the Minister of Canadian Heritage, implausibly claimed that the CRTC decision was going to "fundamentally destroy Canadian content rules" and then surprisingly dismissed the offer to increase French-language channels by mistakenly claiming that "there’ s no legislative process that allows them to do this."  While the CRTC set minimum Canadian content requirements, there is clearly nothing to stop a provider from exceeding those minimum requirements.

While the parties await the final decision, it is not too early to conclude that the entire satellite radio process has become an embarrassment.  Like it or not, the CRTC held lengthy hearings on the matter and sought to develop a solution that added significant Canadian content to satellite radio offerings, albeit in a different form than on conventional radio.  The two U.S. originating services now plan to offer an equivalent number of English and French channels.  Most importantly, the decision enjoys the support of independent Canadian artists and the broader public.

None of that matters, however, as the lobbying power of Quebec special interest groups apparently hold greater weight in Ottawa than do millions of Canadians.

Should Cabinet follow Minister Frulla’s recommendation, the government will have substituted a lengthy, impartial process with one determined by lobbying power and political expediency. Even if it leaves the CRTC’s decision untouched, the damage will still have been done, since Minister Frulla’ s abandonment of her principled support of the CRTC has vanished and the future relationship with the so-called "arm’ s length body" has been called into question.

Moreover, the complete politicization of the satellite radio issue does not bode well for other key issues involving Canadian Heritage.  Bill C-60, the copyright reform bill currently before the House of Commons, provides a laundry list of new rights and powers to special interests, but does little for individual Canadians.  As pressure mounts from U.S. backed lobbies to eliminate the bill’s few user-focused provisions, there are fears that that process may also shift away from a "Made in Canada" solution to a lobbyist-dominated outcome.

In the aftermath of the CRTC’ s decision last June, I supported its willingness to identify new methods to promote Canadian content and concluded that Canadian artists and consumers would be the ultimate winners.  It seems that I spoke too soon.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at or online at

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