Re: Broadcasting Notice of Consultation CRTC 2010-498: Shaw Communications acquisition of CanWest Global's Broadcasting entities

Aug 23, 2010

Mr. Robert A. Morin

Secretary General
Ottawa, ON
K1A 0N2

Dear Mr. Morin:

  1. Friends of Canadian Broadcasting is a watchdog for listeners and viewers supported by 100,000 Canadians. Friends does not seek to appear at the public hearing.
  2. Friends does not oppose Shaw's application to acquire CanWest's broadcasting assets but wishes to offer the following comments intended to assist the Commission in its deliberations and decision.
  3. The proposed transaction is the outcome of a competitive process supervised by the courts.
  4. The applicant's suggestion that keeping CanWest's broadcasting assets in Canadian hands should be considered a public benefit is without merit. By law, only Canadian owned and controlled entities can hold broadcasting licences.
  5. The value of CanWest Global's broadcasting assets exceeds $2 billion. The financial difficulties of CanWest under its former controlling shareholder resulted from factors entirely divorced from the viability of CanWest's broadcasting licences.
  6. In the nine months ending May 31, 2010 operating profit from CanWest's "Canadian television segment", which includes CanWest's "television networks in Canada as well as TVtropolis and five other Canadian specialty television channels" was $99 million, of which $47 million was earned in the three months ending May 31. Operating profit from CW Media in the same nine-month period was $169 million, of which $54 million was earned in the three months ending May 31. [1]
  7. The content and extent of the public benefits package proposed by Shaw Communications Inc. is completely inconsistent with the Commission's public benefits policy.
  8. The Commission should consider appropriate conditions to deal with the increased market power that Shaw would enjoy if this transaction were to be approved, as well as the potential to adopt anti-competitive behaviour, especially in view of the following facts.
  9. In Broadcasting Decision CRTC 2008-234, the Commission reduced the term of Shaw Cablesystems Limited's licence from seven to two years in view of evidence of an extensive and continuing pattern of Shaw's disregard for broadcasting policies and regulations.
  10. Shaw's controlling shareholder is also the controlling shareholder of Corus Entertainment Inc., which controls a substantial portfolio of broadcasting licences in specialty television and radio.
  11. Finally, in view of the critical importance of local programming in the Canadian television system, and CanWest's important role therein, prior to approval of this application, the Commission should obtain substantive commitments from the applicant to ensure that this important public service is protected for Canadian viewers going forward.

We append evidence that this intervention has been faxed to the applicant.

Yours sincerely,

Ian Morrison

cc: Shaw Communications Inc.
enc: fax transmittal sheet

[1] CanWest Global Communications Corp. Interim Management's Discussion and Analysis for the Three Months and Nine Months May 31, 2010 and 2009, July 14, 2010, pages 26/31ff. (Sedar)