CRTC of Old Re-Emerges in Music Station Case

Taking pot shots at Canada’s national broadcast regulator has practically been a national sport for many years, as observers from across the political spectrum paint the Canadian Radio-television and Telecommunications Commission as too interventionist, too luddite, too slow, or a combination of all of the above.

As my recent technology law column (forgotten with all the copyright activity – Toronto Star version, homepage version) notes, in recent years, the commission has worked to shed its negative reputation by increasingly adopting decisions that favour letting consumers and businesses decide broadcast winners and losers. For example, the recent fee-for-service decision promotes a negotiated settlement between broadcasters and cable companies with the CRTC betting that consumer expectations will provide sufficient incentive to ensure that local programming remains accessible to viewers.  

Yet despite the seeming preference for market-led solutions, that approach appears to have been largely forgotten in a recent decision involving a small new broadcaster devoted to emerging musical artists in Quebec.  Rather than giving consumers the opportunity to decide whether there is a need for such a station, the CRTC blocked the application for a broadcast licence in a decision that featured a spirited dissent from Quebec-based commissioner Michel Morin.

At issue was Glassbox Television Inc.’s licence application for the launch of AUX TV, a national, French-language specialty programming broadcaster that planned to offer programming devoted to emerging music, including assistance for emerging artists. The same company already offers a version of AUX TV in English.

Given the CRTC's focus on the promotion of Canadian culture, this application would seem like a proverbial slam dunk.  While the Astral Group's MusiquePlus has offered French music programming in the Quebec market for years, it provides little coverage of emerging artists.  In fact, even though emerging music videos are required to constitute 50 percent of MusiquePlus programming, those videos are broadcast from 12:30 a.m. to 9:00 a.m. on weekdays and from 1:00 a.m. to 8:00 a.m. on weekends.

Sensing a competitor in the marketplace, MusiquePlus objected to the AUX TV application, arguing the proposed programming would be directly competitive with its existing service.  Avoiding direct competition has been a cornerstone of CRTC policy for many years, but it has typically been willing to define new offerings flexibly to allow for new entrants (CRTC skeptics will rightly note that true reliance on the market would welcome competitive offerings since that is the very definition of a market-led, consumer-driven system.)

Despite a clear opportunity in the Quebec market and a comparable service in English, the commission rejected the application, offering a terse opinion that AUX TV would compete with MusiquePlus and that it was “not convinced that the safeguards presented in the application are sufficient to eliminate this risk.”

That reasoning brought a stinging response from Morin.  Noting the CRTC's concern with marketplace risk, he argued “the commission's role is not to eliminate competition in order to protect a service. Is ours a market economy or a state-controlled economy? This is no longer the 1970s, when the commission worked to establish a regulatory framework designed to protect a budding industry. We are in the second decade of the 21st century. No, thank you. Bring on competition as far as I am concerned!”

Morin's dissent places the spotlight on a decades-long debate on the appropriate role for the CRTC.  Protecting broadcasters from competitive entrants may have seemed like a good idea when there were a limited number of channels and Canada's specialty market was in its early stages, unready to do battle with well-established U.S. giants.  Today, specialty programming is the most profitable marketplace segment and competition comes from not only from other channels but unregulated Internet streaming as well.  The AUX TV decision marks an unfortunate blast from the past and provides a reminder that market-led solutions are still not guaranteed in Canadian broadcasting.


  1. Err…
    Is there mandate to help the consumers or thwart them at any moment? Why would they act to block something positive like this, and then turn around and twiddle their thumbs behind their back allowing something as horrible as UBB to go through? I’m getting sick of these little twerps…

    By the way Michael, just curious, I haven’t seen any coverage of the CRTC’s UBB decision on your blog… is it unrelated to what you usually cover?

  2. Mr. Monopoly says:

    The Chair said so
    “But the Category 2 channel risked competing with Astral’s Category 1 specialty pay channel MusiquePlus Inc., the CRTC said in its decision. Under existing rules, a Category 2 station should not directly compete with a Category 1 station.

    “The Commission recognizes that a proposal to offer an outlet for French-language emerging artists would surely have a positive impact in the current market conditions,” the CRTC said.

    However, the commission said GlassBox failed to prove its proposed service would not directly compete with existing Category 1 pay or specialty services and therefore denied the application.

    So to answer you question, “Why would they act to block something positive like this”? The CRTC chair clearly stated it is to prevent competition in Quebec and to prevent kids from seeing indi musicians/artists in their own province.

    (Sarcasm) Maybe if they were Egyption or American owned Industry Canada would step in and allow it.

  3. Laurel L. Russwurm says:

    The “fee-for-service decision” was another example of an anti-consumer CRTC ruling. The CRTC thinks Canadians can afford to pay more. Clearly it has not occurred to the CRTC that many consumers may choose the internet over cable because some Canadians might not be able to afford both.

    The CRTC’s idea of “market-led solutions” include the recent Usage Based Billing approval. Surely you will recall that the Canadian Government mandated ISP competition and allowed New ISPs to enter the market to provide consumers (like me) ISP choice. Just at the point where these Independent ISPs would have been able to beging expanding out of urban areas, they have been in court battling against this incredible ruling, fighting for their very existence, over the past year.

    But now the CRTC decision will allow Bell Canada to raise my rates even though I am not a Bell Canada customer?

    The UBB decision removes any possibility of flexible pricing from the Independent ISPs. This certainly looks to be a clear intention to “eliminate competition in order to protect a service”.

    I agree entirely with M. Morin, but can’t help but wonder where his voice was on UBB? Especially as UBB increases will make it far more difficult for Canadian emerging artists to reach an audience.

  4. Dying medium
    I find all this controversy over a dying medium quite funny. Young people nowadays don’t watch TV and probably haven’t listened to radio for years. I’m not that young anymore and haven’t had TV for close to 10 years. The endless ad bombardment turned me off a long time ago.

  5. @Mr. Monopoly
    Actually I bet that if it was an English radio station application getting intro Quebec, they would have accepted… however, since it’s french they decided to give the proverbial finger… specially since Harper decided to no longer borther itself(yes it) with Quebec.

  6. hi
    ja ist auch ein gratis chat unter w.w.w.coldtube.c.o.m

  7. Guy Who Sighs says:

    someone please put the CRTC out of its misery already
    “too interventionist, too luddite, too slow…”

    You left out either 1) too stupid or 2) too corrupt.

    I can’t decide which it is though. One of them is surely spot on.

  8. The keywords here are “emerging music” and “emerging artists”
    Would be in direct contradiction of the upcoming “Big Labels” legislation, who already have a backalley deal with the government to control all programming…. If you aren’t signed, you do not play!

  9. @Gregg
    Have a look at the info provided by Mr. Monopoly. Apparently there are rules in place which require the new entrant to prove that they wouldn’t compete directly. It is up to them to prove it, as they are doing the application. If AUX didn’t prove that they won’t compete directly, I can’t see how the CRTC had any other choice but to deny the application. To do so would have invited an appeal from Astral which they likely would have won.

    Now, I can’t say that I agree with the rule in the first place; this is one that should be examined to determine if it is still valid. It is arguable that changing the rules and having it apply to all applications currently under consideration could be considered favouritism. Therefore, if they are going to change the rule, do so with it being used for applications received after the implementation date. This is reverse grandfathering. AUX would then be eligible to reapply under the new rules.

  10. Mr. Monopoly says:

    Prevent and Contain
    This is a fight about kids. Children. “Kids and kartels”.

    Who watches music video’s? What age group the most? Who doesn’t adopt new business models?

    Why and how would independant talent directly compete with established big names at prime time when the kids are awake to see it?

    CRTC is directly working here in favour of big labels and calling kids watching indi music and talant a threat.

    Sound familiar to you? It should.

  11. You have to be kidding.... says:

    I think the CRTC has multiple personalities.
    I find it ludicrous that the CRTC insists on creating additional competition in the Telecommunications Market, and then tries to eliminate it in the Broadcast Market. If competition is good, isn’t it good everywhere? Why would it work in one place and not another.

    Regardless of all that, I would have thought that having more channels for new Canadian content to emerge was the most important thing.