Canadian Cablers Aim to Loosen Regulations

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Toronto-If Canada is going to have a major role in the new economy, it must ease restrictions on foreign investment and ownership.

That's the word from Janet Yale, president and CEO of the Canadian Cable Television Association. She delivered this and other provocative ideas at the CCTA's annual convention, held here last week.

Yale's radical stance-at least by Canadian regulatory standards-is contained in a just-released CCTA study called "E-TV: The Integration of Culture and Commerce." It is aimed squarely at the Canadian Radio-television and Tele- communications Commission (CRTC) regulatory agency.

"The key message is flexibility," Yale said in an interview. "The key message is a world where markets dictate, not regulators and policymakers."

Money is one factor behind the push by the MSOs. "We need a lot of capital" to complete plant upgrades and remain competitive, said Jim Shaw, CEO of Shaw Communications Inc., the country's No. 2 MSO. However, there is not enough money in Canada, partly because Canadians prefer to invest in U.S. firms, which they believe to be less risky.

The biggest foreign investment in Canadian cable came last year when Microsoft Corp. bought 9 percent of top MSO Rogers Communications Inc. for $400 million.

The CCTA's position is sure to raise the hackles of Canadian nationalists. Yale, however, appeared to anticipate any arguments in favor of maintaining the restrictions.

"Those undertakings-however they're owned-certainly have to live and die by Canadian rules and regulations," she said. "Foreign-ownership rules in and of themselves don't add any protection that's of any benefit anymore."

Foreign ownership is not the only area where the CCTA is looking for changes. It also wants the CRTC to stop preventing cable-TV companies from owning broadcasters and vice versa.

That's a position endorsed by Michael McCabe, president and CEO of the Canadian Association of Broadcasters. "The world is now going in the direction of integrated companies," McCabe said in an interview. When it comes to changing the rules, "we essentially take the same point of view that the cable industry does."

The CCTA also wants the CRTC to stop regulating Canada's small cable-TV companies, which Yale defined as any operator not among the country's 10 largest.

She said they're already operating in a competitive environment vying with Bell Sympatico, Bell Canada's direct-to-home service. "It's hard to argue that regulation is serving a purpose other than consuming their time and energy," she added.

The CRTC put on a diplomatic face in reacting to the CCTA's requests. "It's a bit difficult to comment at the moment," CRTC broadcasting vice chairman Andree Wylie said.

Still, the regulator held a closed-door meeting with small cable-TV operators after Yale's speech. The results of that meeting and the MSOs'reaction to the CCTA's E-TV paper will be drawn on to make formal recommendations to the Canadian government later this year.

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