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Media Diversity Requires Structural Pluralism

In our submission to the CRTC’s Diversity of Voices hearing, Professor Robert Hackett of Simon Fraser University and I argue that government should not only cap concentration of ownership but that it should also actively encourage the creation of, and investment in, diverse avenues of expression, such as community and public media outlets. If you would like to read more, here’s our submission:

Submission re: Notice of Public Hearing CRTC 2007-5
Diversity of Voices Proceeding

Summary

1. Rising from the principle that media diversity is a key underpinning of democratic self-government, this brief argues that not only should the CRTC cap concentration of media ownership but also encourage the further creation of, and investment in, diverse avenues of expression within the broadcast system. While recognizing the need for more research on the impacts of the various forms of concentration of ownership, it offers some broad suggestions for criteria to evaluate the impact of ownership transactions as well as base line criteria for maintaining diversity. Suggestions for changes to benefits policy, policy surrounding license trafficking, new media, and industry self-regulation, as well as the CRTC’s relationship to the Competition Bureau, are also included.

Preamble

2. Our brief has several premises: the importance of representative diversity in media, as a key underpinning of democratic self-government; the inextricable link between structural pluralism and content diversity in media; and the ongoing tension between democratic principles, and the imperatives of a corporate-dominated commercial media system. Previous research, in the US and elsewhere, has highlighted a number of “democratic deficits” in corporate media systems, including the following:
- shortcomings in the constitution of a viable, representative public sphere;
- homogenization of content and discourses in public circulation;
- exacerbated inequalities of access and representation, along class, ethnic and cultural axes;
- undue centralization of power over public discourse, and hence over public policy;
- shortcomings in helping to build sustainable communities, at local, national and global levels;
- lack of public participation and openness in communications policy-making;
- the transformation of the public commons of knowledge into a private enclosure of corporate-controlled commodities, through restrictive intellectual property rights regimes;
- the erosion of communication rights in cyberspace and other media, especially under the post-9/11 rubric of national security.

3. We recognize that not all these issues fall under the purview of the CRTC, but we feel that CRTC decisions should be constantly guided by the need to protect democratic values, including diversity, from the potential threats posed by a corporate-dominated commercial media system.

Introduction: Basic Principles

3. As pointed out in the Notice of Public Hearing CRTC 2007-5, the importance of diversity and the need to encourage its development is recognized in a number of subsections of Section 3 of the 1991 Broadcasting Act. In the face of scarce resources, rapidly changing technologies, and the requirements of private investment capital, exactly what mechanisms need to be employed to achieve the goals laid out there, however, remains a complicated issue and one that may not be resolved in the context of this hearing alone. However, we want to suggest some principles that might be used to guide the Commission through impending hearings on ownership matters, and lay the groundwork for a more diverse Canadian media system.

4. While we recognize the need for sustainability in a shifting environment, commercial and profit-oriented considerations should not trump democratic requirements. Corporate media are reliant on investment capital and driven by the requirement of increasing share values. But as the history of media development in Canada and other countries illustrates, shareholder interests are not always commensurate with the public interest. While the exact character and impact of media concentration on the structure and operation of Canadian broadcast media requires further research, a number of recent federal studies -- such as the 2003 Report of the Standing Committee on Canadian Heritage, Our Cultural Sovereignty” (Lincoln report) and the 2006 Report of the Standing Senate Committee on Transport and Communications, Final report on the Canadian News Media (Bacon Report) -- have illustrated that lay offs of media workers, the cross-purposing of media content from one medium to others, and the myriad other forms of corporate integration that underlie the synergies sought through corporate convergence have undermined media diversity in Canada.

5. Moreover, while in the interest of creating “strong broadcast undertakings capable of contributing to the Objectives of the (Broadcasting) Act” large, corporate media have been given increasingly free reign within the system, public and community media continue to struggle and founder on the margins, hamstrung by lack of access to capital investment, opportunities to expand services to re-aggregate fragmenting audiences, and regulations that favor private, commercial operations over other types of ownership.

6. Media research makes clear that there is an organic link between media structure (including ownership, financing and control) and media content diversity. Content diversity needs to be underwritten by structural pluralism – not only in terms of different owners, but also different types of ownership, different mandates or governing logics between media organizations (commercial, community, public service), technology, editorial discretion, journalistic independence, flexible modes of financing media organizations, and flexibility in terms of access to production funds .

7. Despite the seemingly boundless choice supposedly offered by the Internet and the World Wide Web, research does not support the idea that broadcast regulation is obsoletein the face of technological change. While there have been shifts in audience share of different types of media – such as conventional television and AM radio -- not only have the hours devoted to consuming radio and television remained relatively constant, but as broadcasting moves to a web –based platform there is every indication that those corporations that now dominate the industry will continue to do so in that venue.

8. Technological development – in terms of both new technologies and refashioning old ones – does present many opportunities for increasing the diversity of perspectives in Canada’s media system. However, left to a corporate logic of development, this range of possibilities will be severely narrowed to only those that promise the greatest economic return. Past enquiries into the structure of Canadian media have recognized this propensity and urged government to not only cap concentration of ownership but also to actively encourage the creation of, and investment in, diverse avenues of expression. These are the basic principles that should guide regulation.

Concerns and Recommendations

Concentrated and Cross-media Ownership

9. As has been made clear in both the Lincoln and Bacon Reports, clear guidelines on acceptable levels of common ownership and cross-media ownership need to be established in all areas of the Commission’s purview. While current policies provide some safeguard of diversity, such as in over-the-air (OTA) TV and radio markets, they are patchwork and need to be extended into the fields of discretionary television and broadcast distribution undertakings (BDUs). From the time of the 1970 Special Senate Committee report on the Mass Media (Davey Report) cross-media ownership has been seen as the most problematic of all ownership forms. Whether in the context of local broadcast and newspaper markets, or BDUs and discretionary services, the range of possible impacts on diversity, such as favoring more the profitable commercial services over the less profitable -- including not-for-profit public and community-mandated media -- make such arrangements best avoided.

10. But while it is clear from previous studies that limits on ownership are necessary, exactly what those limits should be is a complicated issue and might vary between the national, regional, and local levels, as well as between different types of service. The guiding principle needs to be one of not only maintaining, but developing, diversity. There is already evidence that the broadcast system does not well represent the diversity of the “cultural, political, social and economic fabric” of this country, as the Broadcasting Act specifies. Moreover, evidence from other countries such as the United States illustrates a strong link between reducing ownership regulation and the reduction of diversity in both structural pluralism and the range of available broadcast programming. Hence ownership caps that maximize the number of operators at the national, regional and local levels are necessary. Particular attention needs to be paid to cross-media and concentrated ownership in metropolitan centers (like Vancouver), and regions.

11. Where existing concentration exceeds these caps, the CRTC and Competition Bureau should work together to enforce a phased-in divestment of excessively concentrated assets.

12. Moreover, without access to broadcast programming, diversity is a moot achievement. All Canadians need to have access to broadcast service. Hence, price caps on the basic services delivered by BDUs, as well as the maintenance, and enhancement, of OTA service, are essential.

13. Questions of what criteria the Commission might adopt to evaluate the impact of ownership transactions at either the level of common ownership, cross-media ownership, or vertical integration are also complicated. However, section 3 of the Broadcasting Act offers some guidance in this regard, particularly where “synergies” are to be gained at the expense of any of the dimensions of diversity laid out in Section 3 of that Act. For instance, drawing on Section 3 (1)(d)(ii), transactions might be assessed on the degree to which they impact on “the range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity”; or, particularly in cases where news production is concerned, on their impacts on the “opportunity for the public to be exposed ot the expression of differing views on matters of public concern” [Section 3(1)(i)(iv)].

14. In cases where further consolidation is approved, base line criteria for maintaining some level of diversity in the wake of media mergers must also be established. Among these criteria might be: i) limits on the repurposing of all types of content across media platforms; ii) clear, enforceable conditions of license surrounding the separation of newsrooms and editorial decision making within companies holding multiple media properties; iii) clear, enforceable statements of editorial and journalistic independence; iv) conditions of license requiring the broadcast of some degree of local programming, and particularly news programming. As the Bacon Report points out, both the CRTC’s and the Competition Bureau’s approaches to media consolidations do not adequately account for its impacts on news and current affairs journalism. Journalism is the central vehicle through which, as the Broadcasting Act stipulates, Canadians are “exposed to the expression of differing views on matters of public concern.” Hence conditions of license that ensure that conventional television broadcasters air some minimum of local news, such as 30 minutes 5 days a week in the 6 pm to midnight schedule, are essential. Given the propensity for radio broadcasters to fall back on wire service and network news, some measure of regularly scheduled local news throughout the broadcast day should also be a requirement. Moreover, given the propensity of cross-media companies to re-purpose programming from one medium to another, maintaining separation of newsrooms between different types of broadcast media is also essential.

15. At the same time, to help ensure increasing diversity in media voices, measures to support the development and maintenance of public and community expression should also be instituted. Such measures might include: allocations from benefits packages focused on creating infrastructure for community media (both radio and TV) and/or a programming fund for such media; guaranteed spectrum space for community broadcast applicants (both radio and TV) meeting base level requirements; guaranteed carriage on the basic service tier of BDUs. Similarly, to increase access to broadcast programming OTA services should be increased. Digital technology offers opportunities to significantly increase spectrum use, particularly for the public and community elements of the system.

16. As to whether existing conditions of license have been effective in dealing with concern over diversity of editorial voices, as the Bacon Report points out, while the Commission has specified a number of supposed safeguards in conditions of license, it has not always followed up to investigate whether these conditions are being fulfilled. And, at least in the case of Quebecor and the Toronto market, the evidence suggests that they are not. More independent research is required to gauge the effectiveness of these measures. Indeed, what is the point of imposing such conditions without follow-up to ensure compliance? However, as discussed below, industry self-regulation is not a viable option in this regard.

17. As for vertical integration between programming undertakings, production companies, and distribution undertakings, for decades public policy has focused on building a strong and vibrant independent production industry. These polices have met with a large degree of success. However, as the Lincoln Report illustrates, concentration of ownership, and particularly cross-media ownership present a number of problems in terms of both the distribution of independent programs as well as self dealing. Moreover, as the Report also points out, there is no adequate information regarding the impact of ownership concentration on the independent production sector. Consequently, until such time that such impacts can be properly assessed and safeguards protecting the diversity of this industry developed, there should be no further consolidation of these sectors.

18. Finally, the Commission should resist any pressure to weaken its interpretation and enforcement of Canadian ownership requirements, when reviewing applications or transactions. Experience in both Canada and other countries illustrates that opening media to foreign corporate ownership results in large swathes of domestic media, the storytellers of our culture, becoming part of foreign multi-media conglomerates. Such organizations foreground capturing the benefits of economies of scale based upon product produced in their home markets rather than creating original content in, what are for them, foreign markets. As the history of Canadian content regulation illustrates, the economics of private commercial television are such that it is difficult enough to induce Canadian owners to produce and air many genres of Canadian programming. Any meaningful concept of sovereignty must encompass Canadian control of corporations that produce and distribute information to Canadian citizens.

Benefits Policy

19. As currently constructed, benefits policy does provide some impetus to diversity within the system: both directly in terms of program funding; and indirectly through academic research and the creation of various post secondary research chairs, scholarships, etc.. Benefits policy should not, however, be used as a substitute for sound decisions to ensure democratic pluralism in Canadian media structure and there are a number of ways in which it might be made more accountable to both the public interest and the interest of diversity in particular.

20. First, in that all licensees are accountable to the public purposes of broadcasting, there should be an onus on all licensees – including BDUs – to demonstrate significant benefits to the system flowing from any transactions that take place within it.

21. Second, where benefits take the form of a percentage of the value of transactions, the disposition of those funds should be decided by an independent party or organization – not parties directly involved in the transaction. Allowing the parties involved in the transaction to define the specific form of such benefits raises a number of possible conflicts of interest.

22. Third, given that, as both the Lincoln and Bacon Reports point out, there is wide range of research necessary to better understand the impacts of current technological change and media consolidation on the system and, particularly with regard to issues of diversity, some portion of those funds should be devoted to such research.

23. Fourth, a significant portion of the benefits packages should be directed towards a fund to support independent community broadcasting. That would be the most effective way that the benefits policy could ensure diversity of voices.

License Trafficking

24. Issues concerning license trafficking have long plagued broadcast regulation in Canada and finding adequate solutions is another complex problem. To some degree the problem arises out of the system’s reliance on private capital for financing much of its growth and infrastructure. Private capital requires flexibility to meet changing social and economic conditions and, in return for assuming some risk, might expect a reasonable return on investment. Still, the broadcasting system is by definition a public system. Holding a broadcast license is a privilege not a property right, and regulation generally provides a strong hedge against the risks associated with private investment. Moreover, profiting unduly from the sale of a license places a private burden on the public as investors struggle to reap a reasonable return on an inflated investment within the economic confines of that system. From this perspective, transactions should be scrutinized to insure that licensees do not profit unduly from the sale of broadcast licenses and thereby place undue burden on the system to generate a return on that investment. Toward this end, transactions should be audited by an independent party to ascertain either: i) the amount of money a licensee has invested in the broadcast property; or ii) the value of the real property transferred at the time of sale. Then a reasonable rate of return on that investment or property, based upon some standard such as the TSX composite index might be calculated. In any event, the value of broadcast properties should not be calculated based upon their inclusion in a networked synergistic relationship, such synergies are often won at the expense of diversity. Such a scheme would help keep the value generated from broadcast activity within the system.

25. Another mechanism to enhance the integrity of the regulatory process might be to consider that when a licensee seeks to transfer a license that the license is void and its transfer opened to competing applicants.

Ownership of New Media

26. While, as we have noted, technological development does present many opportunities for increasing the diversity of perspectives in Canada’s media system, the Internet is not a panacea in this regard. Investment in infrastructure and developing business models and modes of financing that might sustain media production in this venue present huge hurdles to development. From this perspective, finding ways to encourage the development a greater range of web-based Canadian media content, particularly content produced by independent mandate driven producers, would be desirable.

27. Further, while direct regulation of the development of new media on the web might be difficult and undesirable, perhaps the biggest threat to diversity on the Internet is the undermining of net neutrality. Internet service providers (ISPs) must not be permitted to limit or delay access to particular websites for commercial purposes. Neither should they be permitted to steer subscribers to their own websites or charge users a premium for access to particular sites or parts of the Web. Such control would only hinder the diversity and development of the Web. At the same time, rules and support for original Canadian programming need to be maintained to help ensure that such Canadian content might find its way onto the Internet.

Reflecting Canada’s Diversity

28. Meaningful support for the public and community sectors would be the single most effective way of promoting structural diversity in Canadian broadcasting. BDUs should be required to provide channel space and production facilities for independent community programming, under the direct management of representative community groups. As both the Lincoln and Bacon Reports illustrate the relaxation of rules around mandatory support for community cable channels has yielded a marked loss of diversity in the programming offered by those channels.
29. Another way to increase diversity would be to establish a “must carry” tier of public and community channels on the basic service offered by all BDUs. Such a tier might be supported by mandatory subscription fees as well as other means such as a production fund dedicated to such services and one-time infrastructure development grants from benefits packages. The services offered on such a tier would have to be socially mandated not-for-profit organizations, all dedicated to airing a high percentage of Canadian content and with full access to commercial revenue if so desired.
30. There should also be maximum support for applications by Canada’s national public service broadcaster, the CBC/SRC, given its particular mandate for promoting regional and civic diversity within Canada’s broadcasting system.

Diversity: Other Aspects
31. To contribute to structural diversity, conditions of license should take into account applicants’ performance and policies in supporting employment equity and diversity hiring policies.

32. Moreover, the CRTC’s own structure and practices should reflect its commitment to broadcasting diversity. This should include broad citizen representation, including media workers, on its board; conflict-of-interest guidelines to preclude senior media industry personnel from serving on the CRTC board until several years after their departure from the industry; establishment of local and regional CRTC panels, representative of local communities, to hear license applications and other matters of particular concern to local communities; intervenor funding for public interest groups that wish to participate in CRTC proceedings; and monitoring of media performance to ensure that conditions of license are being met.

Regulation and Relationship with the Competition Bureau

33. We strongly oppose using industry self-regulation (e.g. the Canadian Broadcasting Standards Council) as a substitute for structural diversity in Canadian media. Self-regulation has not proven particularly effective elsewhere (eg. the Press Complaints Commission in the UK) and, as the Bacon Report points out, structural issues – such as the mandate of the CBSC and its distance from normal accountability mechanisms – make such an arrangement unworkable. The CRTC must itself assume responsibility for compliance with its own regulations.

34. As the Bacon report illustrates, there are a variety of ways relations between the CRTC and the Competition Bureau might be improved and the powers of both agencies enhanced to meet with the challenges of media consolidation. Strengthening regulation along these lines is another key to encouraging diversity within the system.

Conclusion

35. The pressures and changes confronting the Canadian broadcasting system are profound and threaten to seriously undermine, if not altogether supersede, the public service objectives that, from the inception of broadcasting, have formed its core principles in Canada. While more research is required into the exact ways in which different types of concentration impact diversity in media products at the organizational level and in different regulatory fields, one thing is clear: regulation of the system should not be abandoned to market forces. Since the 1920’s, it has been apparent that regulation of the system has been necessary to countermand commercial forces that have the tendency to forego both the extension of service and diverse programming that reflects the interests of all Canadians in favour of the profit motive. History shows that in many genres, Canadians have never had significant choice between Canadian and American broadcast programming within the system and, in the face of ongoing consolidation, what choice has been created is threatened. Now is the time to deliver on the promises the 1991 Broadcasting Act makes to Canadians.

David Skinner, Ph.D.
Associate Professor
Communication Program
York University
Toronto, Ontario.

Robert Hackett, Ph.D.
Professor
School of Communication
Simon Fraser University
Burnaby, British Columbia.

ADDENDUM: RELEVANT PUBLICATIONS BY THE CO-AUTHORS

Hackett, Robert A. and Carroll, William K. 2006. Remaking Media: The struggle to democratize public communication. London: Routledge.

Hackett, Robert A. and Zhao, Yuezhi (eds.). 2005. Democratizng Global Media: One world, many struggles. Lanham, MD: Rowman & Littlefield.

Hackett, Robert A. and Uzelman, Scott. 2003. “Tracing corporate influences on press content: A summary of recent NewsWatch Canada research.” Journalism Studies, 4(3): 331-346.

Hackett, Robert A. and Gruneau, Richard, with Gutstein, D., Gibson, T.A. and NewsWatch Canada. 2000. The Missing News: Filters and blind spots in Canada’s press. Toronto: Garamond Press; Ottawa: CCPA.

Uzelman, Scott, Hackett, Robert and Stewart, Jackie. “Covering democracy’s forum: Canadian press treatment of public and private broadcasting.” Critical Studies in Mass Communication 22 (2): 156-169.

Skinner, David.(2006) “Media Democracy in Canada.” Relay. Winnipeg: Open Door Press. May/June, pp. 44-46.

Skinner, David. (2005) “Reform or Alternatives? Limits and Pressures on Changing the Mediascape.” Communiqué. Union for Democratic Communications. Volume 19, Spring. pp. 14-38.

Skinner, David. (2005) “Divided Loyalties: The Early Development of Canada’s ‘Single’ Broadcasting System.” Journal of Radio Studies. 12 (1) August, pp. 136-155.

Skinner, David, James Compton, and Mike Gasher (Eds.). (2005) Converging Media, Diverging Politics: A Political Economy of News in the United States and Canada. Lexington Books.

Skinner, David, and Mike Gasher. (2005) “Chapter Two: So Much by So Few: Media Policy and Ownership in Canada.” In David Skinner, James Compton, and Mike Gasher (Eds.). Converging Media, Diverging Politics: A Political Economy of News in the United States and Canada. Lanham, Maryland: Lexington Books. pp. 51-76.

Skinner, David. (2005) “Alternative Media In Canada.” In Paul Attallah and Leslie Regan Shade (Eds.). Mediascapes: New Patterns in Canadian Communication, 2nd Ed. Toronto: Thomson Nelson. pp. 213-229.