GATINEAU, Que. -- The level of consolidation in the Canadian media industry has reached levels that "in any other country would be considered unacceptable," Canada's public broadcaster told regulators Monday at the start of federal hearings into the state of ownership concentration in broadcasting.

"Our view is, generally speaking, the level of concentration is too high," said Richard Stursberg, executive vice-president of English language operations at the Canadian Broadcasting Corporation.

However, in a sign of just how contentious these hearings are, the CBC's comments were immediately opposed in subsequent testimony by a large industry group, the Canadian Association of Broadcasters.

With the Canadian Radio-television and Telecommunications Commission considering whether new rules are needed to govern media takeovers in the wake of three major deals in the past year, the association warned against reacting hastily by writing new regulations.

"We see no diversity deficit in the Canadian system," said Glenn O'Farrell, president of the CAB, which represents the industry, including commercial broadcasters such as CTV, Global, TVA and others.

He cited the number of cable TV channels, ethnic channels and radio stations that have been licensed in Canada in the past decade as providing more diversity than existed before, despite the shifting ownership landscape.

"We do not believe new rules are required," Mr. O'Farrell said.

Several of Canada's other major broadcasters are also scheduled to testify Monday, including CTV and Global.

The CRTC called the hearings in March after three blockbuster media deals began reshaping the broadcasting industry, starting in mid-2006 with CTVglobemedia Inc.'s $1.4-billion takeover of CHUM Ltd. That was followed by the buyout of Alliance Atlantis Communications Inc. by CanWest Global Communications Corp. and Goldman Sachs Group Inc. for $2.3-billion in January. And then in February, Astral Media Inc. bought radio giant Standard Broadcasting Corp. Ltd. for $1.1-billion.

CRTC chairman Konrad von Finckenstein has said each of those deals would have to be evaluated by the regulator under existing rules on media ownership. However, these hearings are debating whether a new regime is needed to guide the industry on future consolidation.

Leading off the hearings, CBC executives argued public broadcasting serves as a counterbalance to consolidation of large commercial broadcasters. But it needs more funding to fulfill this role, executives told the CRTC.

The CBC receives roughly $1-billion of funding from the federal government, but Mr. Stursberg told the hearings the broadcaster requires more dollars, as public broadcasters in Europe receive. He suggested that giving it more TV channels, as the BBC has in England, would make it better able to offer diversity in its programming.

The CBC considers itself be "an essential counterweight" to the effects of media consolidation, Mr. Stursberg said. "I wouldn't say that you can say leave it [diversity] to us," Mr. Stursberg said. But a better-funded public broadcaster would help, since it produces more Canadian content than commercial broadcasters, he said.

The CBC called for restrictions on the amount of market share cable companies can amass, since they can control access to TV sets and Internet distribution.

"If you're going to have diversity you have to have some sort of rule," Mr. Stursberg said.

However, the CAB objected to new rules, saying clamping down on the ability of companies to get bigger would hinder their ability to compete in a changing industry that is seeing its audiences fragmenting amid new competition from the Internet.

As well, the CAB said it was against trying to import media ownership rules from another country. Federal regulators may consider revamping the rules on media consolidation, using a system pioneered last year by the Australian government.

In Australia, media concentration is measured using a points system. Each media operation in a given market – including newspapers, commercial TV stations and radio stations – is worth one point. If any company owns multiple outlets, its collection of media assets counts as one point combined.

If a particular market in Australia is found to have less than five points in total, it is deemed to have an "unacceptable media diversity situation." In smaller, non-metropolitan markets, the threshold is set at four points.

As well, if any single person or company controls a TV station, a radio operation and a newspaper within a given market, that is considered an "unacceptable three-way control situation."

Australia's government reserves the right to prevent future media deals in any market it considers to have an unacceptable ownership situation.

"Rules from elsewhere will not work," the CAB said, arguing there are too many differences between the Canadian market and Australia.

Australia has a large per cent of its population – more than two thirds – that gets TV over the airwaves. In Canada, cable is the dominant force and Canadians have access to a large amount of U.S. Channels and programming which floods over the border, the CAB has argued.

The CRTC pointed out to the CAB that its views are not shared by many of the parties appearing at the hearings. The regulator also challenged the CBC's assertion that more funding would ease concerns about diversity in broadcasting, since a large portion of its budget goes towards hockey telecasts.

"When I look at the amount of money that goes to hockey for example, it's a huge amount," CRTC commissioner Stuart Langford told the CBC.

"Hockey makes money for the CBC," Mr. Stursberg replied.

© Globe & Mail