A Report to the CRTC

Media Ownership; Rules Regulations and Practices in Selected Countries and Their Potential Relevance to Canada

Prepared by
Michael McEwen
Media Strategy Policy Limited
July 2007

INTRODUCTION

This report was commissioned by the CRTC in May of 2007 with the following mandate:

Prepare a paper outlining policies and practices with respect to the ownership of media in a variety of jurisdictions.

• Countries to include the United States, Australia, New Zealand, The United Kingdom, Germany, France, Austria and the European Union.
• The information will include the relevant regulations, policies, and evaluation and measurement tools where applicable.
• An analysis of relevance of specific measures to the Canadian broadcasting environment.

CONTEXT

Media ownership is a source of comment, debate, interest group lobbying and government review in most developed countries around the world. Surprisingly however there is little real research, academic review or agreed measurements of concentration and diversity. It seems media ownership/concentration/diversity supply endless grist for the mill but little agreement about how to define it, measure it, regulate it and most of all assure a diversity of voices, opinion, and cultural expression. This notion is best summed up by Ben Bagdikian author of The Media Monopoly and Pulitzer Prize-prize winning journalist and professor:

“Modern democracies need a choice of politics and ideas, and that choice requires access to truly diverse and competing sources of news, literature, entertainment and popular culture.”

The debate centers on whether there is less diversity and choice while media conglomerates continue to grow in both national and international markets within respective media industries and across media. There has been media consolidation over the past two decades in North America and Europe according to many observers including Professors Alan Albarran and Bozena Mierzejewsk at the 6th World Media Economics Conference in Montreal 2004:

“Media Mergers and Acquisitions have become common place over the last two decades, not only involving companies in the United States but also companies around the globe.”

Since that paper was delivered, the mergers and acquisitions continue both with the giants like the GE owned NBC Universal but also in national circumstances including our own national market in Canada. Broadcasting and distribution are not the only media affected, newspapers and publishing continue to part of cross media conglomerate growth. This is all happening within the existing rules and regulations of national and international market places.

Many analysts and observers equate media pluralism with a diversity of ownership and that concentration of ownership will skew public discussion by not exploring all viewpoints and interests. In their view, this can lead to abuse in political and policy decision making.

While ownership is an important criterion in measuring diversity, other factors are important including rural/urban accessibility, number of services available, licensing requirements, etc. In many of the countries under review, the public broadcaster had the mandate to ensure that minority voices were present in public discussion and cultural plurality reflected. However, the role of the public broadcaster has diminished in many countries as the commercial sector has grown and many governments have looked to the commercial sector to deliver the diversity that government policies call for.  Given the reality of the marketplace, commentators ask whether diversity as described above may be adequately reflected by only a combination of marketplace factors and regulation.  This paper will discuss these issues in order to share experiences from several national viewpoints.

Media has essentially been subject to policies and regulation within their individual sectors of television, radio and print with some cross industry rules and over the last few years separately from “new media” markets. However, technological developments are creating new markets and new opportunities, which blur the traditional view. This restructuring presents new opportunities for diversity while at the same time posing challenges for new entrants and traditional media alike. The principle of media pluralism should be technologically neutral and proportionally applied to emergent players. Rules should not confirm a legacy status on existing media; they should allow new structures to emerge.

It is interesting to note that the growth of Internet based companies is now rivalling traditional media for status as media conglomerates. The market capital of companies like Google, Yahoo and Microsoft are in many cases greater than some of their “traditional” media rivals. New entrants often combine all the elements of traditional media including the distribution and display of these services on “new media” devices such as computers, ipod, mobile phones, and similar devices flooding the market, giving rise to new platforms and content formats.

The potential for diversity and pluralism is obvious but the issues of who creates and owns the content and the pipes that deliver it are still the same ones found in the traditional media world and can be subject to the same debate and argument about diversity of sources and concentration of ownership. The technology may be neutral but the content and its accessibility remain the crucial issues.

Media concentration gives rise to national policies and regulations to ensure a diversity of voices nationally, regionally and locally. It is probably fair to say that most jurisdictions around the world are increasingly giving more attention to this issue, as concentration of ownership increases. Newspaper circulation and reading is generally falling in most countries while TV channels, radio, the internet and other media distribution modes continue to expand. Do more channels owned by a few conglomerates mean more diversity?

In the US, more than 80% of US households still derive their news from television stations owned or affiliated to the four major television networks. This in an era where there is many more TV channels supplying news and information services. This viewing statistic is not much changed from thirty years ago when three major networks and no cable or satellite all news channels served the US viewer. When considering the last 30 years of television and media growth the key question is, are citizens more poorly or better served in terms of diversity today than they were?

As to the diversity of content provided by today’s services, the debate is endless but there has been an increase of content availability. Modest deregulation in the US market has served as an example for similar situations in Western Europe and Australia. It is fair comment to note that this deregulation to date has had a modest positive effect on a diversity of sources in the countries reviewed in this paper. There are many more channels of TV available and commercial radio, yet over the last decade, many of these new services have been consolidated into large national and in some cases international media conglomerates.

The diversity gains, which have been made are in danger of slipping, leading commentators to argue that this tendency towards concentration is a direct threat to democracy and informed public debate.  While others argue that concentration has little or no effect on diversity. The truth probably lies somewhere between the two extremes which is why the issue is so contentious and difficult to find consensus on policy and regulation frameworks.

Measuring Concentration

There are no universal measuring methodologies for Media Concentration but there are four, which generally seem to have some acceptance by the countries reviewed in this paper. The first three of these methods are noted by Albarran and Mierzejewska in their previously noted paper as most appropriate for US and Global markets. The European market does not lend itself as easily to these first three measures and relies more on the fourth measure to asses’ media concentration.

1. Concentration Ratios compare the revenues of the top four or 8 companies to the total revenues of that industry. If the top four is higher than 50% or the top 8 higher than 75% of total revenues then concentration may be considered high. This can be also applied to cross communication industry ownership by including all the cross industry revenues and comparing individual conglomerates’ revenue to the whole.
2. The Herfindahl-Hirschman Index (HHI) is used by the US Anti Trust Division of the Department of Justice and is calculated by summing the squared market shares of all firms in a given market. It is more definitive than Concentration ratios but can be tedious in a multiple company market in that each company’s revenue needs to be accounted for and totalled for the total market revenue.
   • The FCC uses a method inspired by the HHI approach called the Diversity Index. This approach identifies all media in the market (radio, TV and press) and then uses a recognized consumer measurement of how they receive news and information from each media to arrive at a percentage of each media share of the market. Then each company of a specific media industry is assigned an equal share of that industry’s total market share. Finally, each company’s market share is added up including multiple and cross ownership shares. If the Diversity Index is high for a company then this denotes a high concentration of ownership. The goal is to determine which markets are at risk for a significant loss of diversity if particular ownership combinations were allowed. The FCC has used this Index to help them decide on threshold levels on multiple television ownership and cross media ownership. These techniques remain a work in progress and they are often used in combination with a “case by case” market/ownership approach.
3. The Lorenz Curve assumes each player of a market has a theoretical equal share of the market and then graphs out the actual share compared to the theoretical model. The difficulty lies in interpretation of the graph and dealing with multiple players in a market.
4. Public Policy as a measurement is applied on a case-by-case basis and is usually applied by the regulator or government. The analysis is based on ownership in one industry and cross industry company(s), diversity of ownership and sources at the national, regional and local levels, economic viability, and license or ownership obligations.

While the reader will note that, there is no generally accepted measure that meets the needs of all interested parties the work continues to refine measurement techniques, which reflect both market realities and public service goals. Since concentration has been an increasing market reality and public concern over the last two decades, attention is being directed by governments, regulators, interest groups and media companies themselves to find mechanisms that preserve and enhance diversity while allowing the economic realities of the market to play out.

It is understandable given their size that much has been focussed on US based media companies so far in this paper and their national and international reach. The nature of the European market makes it difficult for European companies to have a similar global reach. Aside from Bertelsmann, Vivendi (although less so today since the sale of Universal and other assets) and the incursion of US based Media into European markets:

“Other big European media groups are unable to globalize their activities on a larger scale. Due to very segmented media markets with language differences, small size of the national markets, various socio-political traditions and the strong presence of local players, European media are not concentrated on an international level.”(Albarran and Mierzejewska)

It is against this reality that the European Union and Commission have done a great deal of work in the media pluralism area. While this work will be explored in some depth later in the paper, it is important to note that the EC has recognized (in a staff working paper; Media Pluralism in the Member States of the European Union) that measurement is critical to understanding media concentration and its effect on media pluralism. As part of a major review now underway, with results expected in 2008, this working paper has identified three major measuring criteria, which need to be clearly defined with appropriate methodology that will help the Union and the Member States with concrete indicators necessary to measuring media pluralism.

As noted in the working paper in the studies to be commissioned, these indicators fall into three broad areas:

1. Policies and legal instruments that support pluralism in Member States.
   • This work will focus on more than ownership and assess policies which support media pluralism including the independence of public and private broadcasters and other media players
   • It will also assess the quality of implementation and the transparency of monitoring measures
2. The range of media available to citizens in different Member States.
   • These indicators will assess pluralism from the perspective of an end user.
   • Assess and define different types of Media markets, their availability in terms of geography and social groupings, as well as the impact of new technologies on the structure of media will all be part of indicator considerations.
   • A wide variety of profiles will be drawn from the wide variety of experiences found in the markets’ of Member States.
3. Supply side indicators on the economics of the media.
   • Indicators, which would enable the Commission to determine the range and diversity of media available across Member States.
   • They will include the number of media in a Member State or linguistic region i.e. number of television, radio, newspapers, magazines, etc per head of population and their genres.
   • Economic analysis of how new technology is changing the structure of media industries compared with 20 years ago
   • The economies of vertical and horizontal media concentration and their relationship with existing and emerging policies.

Studies on the above outlined indicators are now being commissioned and the results will be published next year with recommendations by the Commission that the stakeholders use these measurement tools to assess media pluralism. The potential result should be recognizable and defined measures that national governments, policy makers, and regulators may feel comfortable and willing to use to create a body of assessment, baseline information and on going evaluation and monitoring of media pluralism.

Competition and Media Regulation

In the main, a mixed bag of tools, policies and regulations guide the debate and decision making both in the US and Europe and indeed, around the world. In most jurisdictions, it is primarily media policy and regulation, which define media pluralism.

The relevant parts of a particular country’s competition and foreign ownership laws and regulations will also play a role but are usually only a floor by which media regulation will add specific requirements to media ownership. Often the competition and media authorities cooperate on questions of media mergers and acquisitions with the goal of preserving competition, access to content and a diversity of choice and source.

The cultural and democratic imperative in most countries demand that media law and regulation define more than a minimum requirement in competition law and regulation. Ensuring a diversity of voices and ideas requires more than economic regulation, they require media rules to ensure that this diversity of voices and views are present.

The United States

The US has gone through a series of deregulation initiatives particularly since the overhaul of the Telecommunications Act in 1996. The Act built on the original 1934 Communications Act and was the first substantial change to the industry in 62 years. Telecom (Cable and Telephone), Broadcasting (Radio and Television), and the Internet were all part of what has been described as enabling “radical changes” in the Industry.

The Telecom changes allowed for cross industry initiatives. For example, phone companies could now acquire and/or provide cable services. New mergers and acquisitions, consolidations, and integration of services across industry, which were previously barred, became legal. Ownership of cable systems by broadcasters also became legal.

Changes in the rules for broadcast ownership of both radio and television were relaxed. Ownership limits on television and radio stations were lifted. Group owners could now purchase television stations with a maximum service area cap of 35% of the U. S. population, up from the previous limit of 25% established in 1985. (This figure rose again in a 2003 review by the FCC to 39 %.) For radio, the cap was set on up to eight stations per market depending on the market size.

There certainly was a significant change after 1996. In 1995 the 10 largest television station group owners owned 104 stations. This increased to 299 in 2005 and more than doubled their revenue. Radio has had a similar consolidation when the largest radio group owned 65 stations in 1995 to today where Clear Channel owns more than 1200 stations.

With the rules relaxed on cable ownership in the 1996 Act, broadcasters aggressively expanded their ownership of cable companies and today ninety percent of the top fifty cable companies are owned by the same parent companies that own broadcast networks. Individual channel diversity in terms of choice and themes remained and continued to expand, however cross ownership of the distribution networks increased beginning in 1996, and continues today.

While the 1996 Act did not allow cross ownership between broadcast and newspaper companies it is interesting to note that newspaper ownership consolidated significantly in the last 20 years and currently less than 275 of America’s 1500 daily newspapers are independently owned.

Ownership regulation was not a major source of political and public outcry in 1996 but it became so when, in a mandated review in 2003, the FCC attempted to further relax the rules.

It is important to understand that the 1996 Act was clearly designed to deregulate and create a new level playing field for both Telecom and broadcast industries. Supporters of this notion would argue this has happened and in fact, more needs to be done. Critics argue that there is less competition and diversity of voices available to the American public and this debate endures to this day.

The FCC is currently embarked on a major review of ownership rules that have their genesis in the review recommendations made in 2003, thwarted by Court intervention and a major public lobby to Congress. In response the FCC began this current process, which includes; public hearings, studies, and consultation with Congress and commercial interests. Results may be available late in 2007. The FCC describes its process and current rules as follows:

“Congress has mandated that the Federal Communications Commission (FCC) periodically review its broadcast ownership rules to determine “whether any of such rules are necessary in the public interest as a result of competition.” In response to this direction, the FCC in 2003 released an order that replaced the existing newspaper-broadcast station and radio-television station cross-ownership limits with a new rule setting a single set of media cross-ownership limits. The FCC also revised the local television ownership rule, retained the dual network rules, and amended its radio market definition and method of counting stations for purposes of the local radio ownership rule. Several parties challenged these new rules in federal court. In June 2004, the court issued an opinion that affirmed some of the new rules, but for others, stayed their effective date and remanded them to the FCC for reconsideration. Therefore, in June 2006, the FCC opened a new phase of its broadcast ownership rulemaking to reconsider the remanded rules and resume its periodic review of all broadcast ownership rules. The rules currently in effect are summarized below.

The six rules in effect and the years of their original adoption are:

Newspaper/Broadcast Cross-Ownership Prohibition (1975)
The newspaper/broadcast cross-ownership rule prohibits common ownership of a full-service broadcast station and a daily newspaper when the broadcast station’s “contour” or service area encompasses the newspaper’s city of publication.

Radio/TV Cross-Ownership Restriction (1970)
The original radio/TV cross-ownership rule prohibited common ownership of a radio and TV station in the same market. The current rule allows common ownership of at least one television and one radio station in a market. In larger markets, a single entity may own additional radio stations depending on the number of other independently owned media outlets in the market.

Local TV Multiple Ownership Rule (1964).
The local TV ownership rule allows an entity to own two television stations in the same Designated Market Area (DMA) (as defined by Nielsen Media Research) provided: (1) the contours or service areas of the stations do not overlap; and (2) at least one of the stations is not ranked among the four highest-ranked stations in the DMA (based on market share), and at least eight independently-owned commercial or non-commercial broadcast television stations would remain in the DMA after the proposed combination.

Dual TV Network Rule (1946)
The dual network rule originally prohibited any entity from maintaining more than a single radio network. A few years later, the rule was extended to television networks. Today, the dual network rule prohibits a merger between or among these four television networks: ABC, CBS, Fox, and NBC.

Local Radio Ownership Rule (1941)
Initially, the FCC’s local radio ownership rule prohibited common ownership of same service radio stations (AM or FM) that served substantially the same area. Currently, the FCC’s local radio ownership rule imposes the following limitations: (1) in a radio market with 45 or more commercial radio stations, a party may own, operate, or control up to 8 commercial radio stations, not more than 5 of which are in the same service; (2) in a radio market with between 30 and 44 commercial radio stations, a party may own, operate, or control up to 7 commercial radio stations, not more than 4 of which are in the same service; (3) in a radio market with between 15 and 29 commercial radio stations, a party may own, operate, or control up to 6 commercial radio stations, not more than 4 of which are in the same service; and (4) in a radio of common ownership market with 14 or fewer commercial radio stations, a party may own, operate, or control up to 5 commercial radio stations, not more than 3 of which are in the same service, except that a party may not own, operate, or control more than 50 percent of the stations in that market.

National TV Ownership Rule (1941)
When the FCC first adopted national ownership restrictions for television broadcast stations in 1941; it put numerical limits on the number of stations that could be commonly owned. The rule has been amended a number of times thereafter to increase the permitted level

Currently, the national TV ownership rule prohibits an entity from owning television stations that would reach more than 39% of U.S. television households. “Reach” is defined as the number of television households in the TV DMA to which each owned station is assigned. All TV households in the DMA are attributed to VHF stations; 50% of TV households in the DMA are attributed to UHF stations.’’

The results of this review could relax concentration rules substantially and confirm many of the initiatives the FCC undertook in their 2003 findings. One area, which there has not been any real movement, is Foreign Ownership of Broadcasting. The US has no rules concerning foreign ownership of cable, satellite, print, or Telecom services but for broadcasting foreign investment can be no higher than 25% of the voting stock of a licensee. Proponents of deregulation argue that this situation is not reflective of the market realities and the emergence of new media platforms.

Australia

The debate about Media Ownership and Diversity in Australia has been highly charged for more than a decade. It was characterized by many studies, strong viewpoints, interest group debate, and failed attempts at new legislation liberalizing cross media ownership and foreign ownership of television stations. The debate was fuelled by new technologies creating new platforms that required new rules. Finally, on April 4th of 2007, amendments to the Broadcasting Service Act of 1992 were passed and new regulations and processes are being enacted.

It is useful to review the ownership landscape prior to the new legislation:

Television Ownership:

“A person must not control television broadcasting licenses whose combined license area exceeds 75 per cent of the population of Australia, or more than one license within a license area. Foreign persons must not be in a position to control a license and the total of foreign interests must not exceed 20 per cent. There are also limits on multiple directorships and foreign directors.

Radio Ownership

A person must not be in a position to control more than two licenses in the same license area. Multiple directorships were also limited.

Print Ownership:

There were few regulatory rules for domestic ownership in the print industry but as noted below there were some strong cross ownership restrictions.

Cross-Media Restrictions:

Under the previous Act, a person must not control:

• a commercial television broadcasting license and a commercial radio broadcasting license having the same license area
• a commercial television broadcasting license and a newspaper associated with that license area
• or a commercial radio broadcasting license and newspaper associated with that license area.

There are also limits on cross-media directorships.

Subscription Television Broadcasting Licenses:

A foreign person must not have company interests exceeding 20 per cent in a broadcasting subscription license, and the total of foreign company interests in any license must not exceed 35 per cent.

Foreign Investment Controls

There are a number of controls on foreign investment in the media in addition to those contained in the Broadcasting Services Act. All direct (i.e. non-portfolio) proposals by foreign interests to invest in the media sector irrespective of size are subject to prior approval under the Government's foreign investment policy. Proposals involving portfolio share holdings of five per cent or more must also be approved.

The maximum permitted aggregate foreign (non-portfolio) interest in national and metropolitan newspapers is 30 per cent, with a 25 per cent limit on any single foreign shareholder. The aggregate non-portfolio limit for provincial and suburban newspapers is 50 per cent.”

Market Situation Television, Radio, and Newspapers

There are three large and dominant private television networks in Australia with a number of affiliated regional stations. The public broadcaster, ABC, has two television networks and two radio networks with local and regional services. Another public broadcaster focussing on cultural and multi lingual diversity, the SBS, has both a radio and television network. There are about 275 commercial radio operators in Australia some of them formed into thematic networks and some 300-community radio stations (publicly funded).

There are 12 major national/state newspapers, some 35 regional dailies and 470 other regional and suburban papers. Ownership is concentrated in two major companies for the national and large regional papers.

Cable and satellite services are just now becoming a market factor but still represent less than 30% of Australian households.

The New Broadcast Services Act:

In making the argument for less stringent control for free to air television and newspapers the government made the case in the spring of 2006 noting that the Treasurer had oversight of all Foreign Investment. Further, that the media was identified as a “sensitive sector” and all material foreign investment was subject to approval by the Treasurer.

The government specifically noted that “there is no compelling reason for singling out newspapers and commercial free to air television as requiring limitations on foreign investment separately than those that apply across the media sector.” The safeguards provided under the Foreign Investment Policy and the media’s “sensitive sector” designation was all that was required. It was further noted that the UK, Germany and New Zealand had no sector specific requirements for foreign investment in broadcasting and print, while acknowledging that other jurisdictions did have requirements the Government felt the above safeguards would be quite adequate.

On the issue of cross ownership, the Government proposed relaxing the rules on TV/Radio/newspaper ownership in a given market subject to a diversity test and the maintenance of the current limits on ownership:

• A person must not be in a position to control more than one TV license in a market.
• A person must not be in a position to control more than 75% reach of the national audience for commercial television.
• A person must not be in a position to control more than two radio licenses in a market

What the government envisaged were commercial media groups that could comprise a TV license, one or two radio licenses or a newspaper in a given market subject to diversity tests that provided for a minimum group of number of these groups in State capitals and regional locations. The Government considered that “media diversity would be best served by clear protection against excessive ownership concentration among traditional media outlets, combined with a liberalization of market entry opportunities and relaxed regulatory barriers for new platforms and services.” It was by this process that the Government believed diversity would be both sustained and enhanced while encouraged investment and new services and platforms.

As noted earlier the Amendments to the Broadcast services Act (BSA) cleared Parliament, commenced April 4th, 2007 and very much reflected the Government view as noted above and specifically:

• “repeal of broadcasting-specific restrictions on foreign investment in the commercial television and subscription pay-television sectors;
• repeal of the cross-media rules in the BSA; and
• Rescission of the newspaper-specific foreign ownership rules under Australia's foreign investment policy (FIP)”.

While this is clearly a liberalization of the old rules, Australia remains highly regulated as suggested in the earlier comments by the Government and according to most observers including international Australian Law firm Allen Arthur and Robinson who noted:

• “compliance with a new media diversity test and a new two out of three rule;
• the need to comply with the statutory control rules (see below);
• confirmed entry of a media group on the Register of Controlled Media Groups (RCMG);
• the potential jurisdiction of the Australian Competition and Consumer Commission (ACCC) under section 50 of the Trade Practices Act 1974; and
• For foreign investors, the continuing application of Australia's FIP that regards media as a sensitive sector under the Foreign Acquisitions and Takeovers Act 1975 (FATA)”.

The Diversity Rules were published by the Australia Communications Media Authority (ACMA) on May 30th, 2007. ACMA has been given additional powers to regulate in this sensitive area; powers of enforcement, remedial direction and the right of injunction in respect to media diversity breeches. ACMA will both apply the rules and enforce them.

Without going into the Diversity Rules in depth, it is important for the reader to understand the basic measurement and application in assessing cross ownership issues. The rules are a point system and the number of points in a market defines acceptability of diversity or not. In metropolitan markets, a diversity factor of five must be prevalent and in regional locations, a diversity factor of four must be maintained. These rules only apply to transactions concerning commercial television, radio and associated newspapers. In summary, a point is attributable to:

• each regulated platform (defined as a media operation) that is not part of a media group; and
• A media group, being two or more media operations under common control in each License Area. Two or more media operations in a License Area under common control is a registrable media group, and capable of being entered onto the RCMG as a registered media group on a confirmed basis.

If the points fall below the designated minimum number in a market then this is considered an unacceptable media diversity situation and ACMA has the authority to take action to remedy the situation. A media group registry is important to making these rules work.

Regulated Platforms refer to licensed Radio and Television broadcasters (in the Broadcast Spectrum) and those listed in the Associated Newspaper Register. If a person is in a position to control a media operation on each of the three regulated platforms in a license area then they are in breach of the rules and the transaction is prohibited. Cross ownership on two platforms is allowed but not on three. This is called, in the Australian context, as the two out of three rule.

The new rules do not apply to subscription pay services or television and radio services licensed in a non-broadcast service bands.

This paper has focussed on Australia because they have been through a process that spanned a decade and resulted in the changes in legislation and regulation above. It is important to recognize that the debate and discussion was not easy, and that real compromises were made to achieve the Government’s liberalization goals in the media sector.

Obviously, the newly amended Act and diversity rules are too new to assess their efficacy. While limits on foreign ownership have been eliminated and cross ownership rules have been eased the new tests on diversity and concentration of ownership are still very substantial and perhaps cumbersome. The Australian regulator, ACMA, has more authority and along with the Australian Treasurer and other aforementioned government bodies that will become central to the management and adjudication of the amended BSA, the monitoring process may prove to be a great deal tighter and tougher than before.

A short note about the Internet in Australia; as in most countries under review, there are no rules concerning Internet ownership and content is not regulated. Australia has set up a co-regulatory scheme to monitor and manage the Internet, which includes:

• Codes of practice for the internet industry
• A complaint mechanism
• Community education about internet safety issues
• A range of supporting activities including research and international liaison

Prohibited Internet material includes the universal concern about sexual abuse, explicit sex, excessive violence, etc. Where the Internet Content Host does not comply with a take down order of prohibited content, the police authorities are brought in.

The Internet as a media platform for traditional broadcasting is not subject to specific legislation except for the normal copyright considerations.

New Zealand

For the purposes of this paper there is little to analyze or report in terms of Media Ownership either foreign or cross media. Simply put there are no foreign ownership rules and there are no cross media restrictions.

Beginning in the 1980s, New Zealand deregulated the entire communications sector (along with a great deal of all their industry and economy). The result according to New Zealand Media Professor Paul Norris is that foreign ownership of the media is “without parallel in the developed world”. He goes on to make an argument familiar to Canadians, which is why would anyone produce New Zealand television when the foreign offerings can be purchased at a fraction of the cost and are sure ratings winners. Without rules, the market place is a free for all for foreign ownership and programming.

New Zealand has a small population (4 million people) in what can only be described as a geographically protected market. The measures taken by the New Zealand government in the eighties and nineties, in many ways, have created truly an isolated market experiment. The results are probably in the eye of the beholder. Most media owners of print and broadcasting companies appear pleased with the circumstances and fiercely defend the system. Predictably, cultural nationalists, academics, and journalists are not so enthusiastic and are encouraging change to a more regulated environment to create better local news and cultural expression.

Even the politicians are beginning to think that something should be done. In the mid nineties the then National Party government Minister responsible for Radio New Zealand noted;

“We do actually want to have stations and programs that are owned by New Zealanders and are uniquely New Zealand, and I’m not sure we want all our stations owned by Mr. Murdoch……..”

Further, in 2003 the Minister of Broadcasting Steve Maharey said:

“For some years from the late 1980s and 1990s, government in New Zealand moved away from a real appreciation of broadcasting as a cultural educative force. In its embracing of market driven policies Government distanced itself from what I believe is its responsibility to ensure that New Zealanders have access to a genuinely indigenous broadcasting system…….”

His prescription was to support the public broadcaster TVNZ with more money and a cultural mandate. This was not achieved for the most part (and in fact, commentators have noted that TVNZ is as commercial as its commercial competitors in seeking revenue for its operations and making the necessary commercial compromises to do so).

The government did go on in November of last year to announce funding for TVNZ to offer two distinct public service digital channels (a news and sports offering to begin in 2007 and a kids channel to begin in 2008, both commercial free with $78 million in funding over 6 years) as part of their digital transition offering. This initiative provoked an angry response from one media company, CanWest, accusing the government of bailing out TVNZs One News and opining why would CanWest commit to putting money into additional digital channels when the government was subsidizing TVNZ.

While the Government has attempted to address the issue of concentration and foreign ownership by these initiatives, they are not structural in nature and the communications sector in New Zealand remains foreign owned and highly concentrated.

For example:

1. Daily newspapers are 81% foreign owned and most readers are served by one daily newspaper in their market. The foreign ownership comes from two international companies and the remainder are New Zealand owned
2. Television comprises six networks, two of which are controlled by the public broadcaster TVNZ and enjoy 49% of audience share. Media Works has two channels (19% audience share) and is owned by CanWest (currently in process of selling) and Prime TV (5% audience share), which is owned by Sky Television (comprised of Rupert Murdoch and Australian interests). The final network is the State funded aboriginal Channel, Maori TV. There is some regional TV and community based stations but they have insignificant commercial or audience value.
3. Sky Television Network owns Pay TV in New Zealand and is a monopoly including terrestrial and satellite services with 84 TV channels, radio and audio channels. Rupert Murdoch owns Sky which enjoys a 23% market share.
4. Radio is comprised of two large commercial networks; an Australian media company and Clear Channel (46% audience share) own The Radio Network with 118 stations and 8 brands. Radio Works has six network brands, operates on 140 frequencies throughout New Zealand, is principally owned by CanWest (70% with minority shareholders) and enjoys a large audience share. Radio New Zealand is a public broadcaster with two networks and modest audience share. There are some community based radio broadcasters.

New Zealand has a Broadcast Standards Authority (BSA) that does administer content standards for radio and television based on codes of broadcast standards and usually involves a process triggered by complaints. However, in terms of indigenous content vs. foreign content there is no requirement. The BSA is starting to touch some of these issues with their mandated research role and two recent papers; The Future for Media Regulation in NZ: Is There One and Issues for Broadcast Content Regulation. These studies indicate an interest in a discussion at the very least.

According to a paper published in June of this year by Bill Rosenberg from the University of Canterbury, which is highly critical of media ownership and concentration in New Zealand and the lack of progress in addressing some of these issues: “in New Zealand the need for changes in the ownership, regulation, and commercialization of our media is exceptional. Change is long overdue.”

Whether Rosenberg’s comments are true or not it, even with the deregulation of all media over the last two decades, the debate in New Zealand remains to find a better balance to ensure media diversity and cultural reflection.

The European Union

Before discussing specific European countries, it is useful to look at the work being done by the European Union its Commission and the Council of Europe. As noted earlier in this paper the EC is embarked on a major review of media pluralism in Europe dealing with ownership and other measures which could help and enhance diversity and the democratic process. Most particularly, they are focused on finding an accepted method of concentration and diversity measurement.

The EU views media pluralism as a cornerstone of democracy, yet at the same time is mindful of the need for pragmatic market decisions. At the European level, they have historically tended to focus on Competition factors and Competition Law leaving the specific content and media diversity protection to Member States. In speech in 2004 the then Director General for Competition, European Commission, noted:

“The marked trend towards concentration in European communications and media sectors in recent years, in our view, entails two dangers. The first danger is the creation of significant market power of undertakings, or even monopoly, that significantly impedes competition, ultimately to the detriment of consumer welfare….The second danger is the possibility for a limited number of media companies to curtail media pluralism, diversity and freedom of information.”

He goes on to note that the EC can respond to the market and economic conditions of the first danger but it is to the national regulator that the citizen must look to manage the second concern. This in fact is a reasonable description of the EU and how it manages the media file generally. They provide EU wide principles reflecting market conditions they would like to see and then national governments provide regulation of their specific national markets. Characteristically, there are creative, political, and regulatory tensions between the EU and some of their Member States on these issues.

It is also important to understand that the driver for Media policy in the EU and for Member States is the Television without Frontiers Directive. Promulgated in 1989:

“The "Television Without Frontiers" Directive (TVWF Directive) is the cornerstone of the European Union's audiovisual policy. It rests on two basic principles: the free movement of European television programmes within the internal market and the requirement for TV channels to reserve, whenever possible, more than half of their transmission time for European works ("broadcasting quotas"). The TVWF Directive also safeguards certain important public interest objectives, such as cultural diversity, the protection of minors and the right of reply. In December 2005 the Commission submitted a proposal to revise the TVWF Directive”

Further, the TVWF goes on to specifically:

“The Directive establishes the principle that Member States must ensure freedom of reception and that they may not restrict retransmission on their territory of television programmes from other Member States. They may, however, suspend retransmission of television programmes which infringe the Directive's provisions on the protection of minors.

In order to encourage the distribution and production of European television programmes, Member States must ensure where practicable that broadcasters reserve for European works a majority proportion of their transmission time, excluding the time allocated to news, sports events, games, advertising and teletext and teleshopping services (Article 4).

Broadcasters must also reserve at least 10% of their transmission time or 10% of their programming budget for European works from independent producers (Article 5).

• The Commission is responsible for ensuring compliance with these two provisions. Member States are therefore required to provide it with a report every two years, including a statistical statement on fulfilment of the quotas referred to in Articles 4 and 5.
• Under certain circumstances, Member States are authorised to lay down stricter rules where necessary for purposes of language policy.”

While the above does not deal directly with ownership it does go to the heart of why media ownership, concentration and pluralism is of a different order than say the United States or other non European countries. Beyond the normal marketplace conditions of Competition, it guides the EU attitude towards media pluralism and the regulations of the Member States. The TVWF has been updated several times since 1989 but it continues with the same core principles.

Public service broadcasters (PSB) enjoy strong support from many EU member countries and many national regulatory frameworks rely on the PSBs to help meet their diversity needs. The EU also recognizes their special role in the media pluralism landscape, but there is some tension concerning PSB subsidies and license fees. While the EU excludes them from many of the funding and competition requirements placed on commercial entities, it is, at times, an uneasy relationship. Some commercial interests argue that the PSBs themselves represent a threat to media diversity and pluralism, but in the main, those arguments seem to carry less weight than they did in the late eighties and nineties because of the growth and expansion of the private sector in Radio and TV in Europe.

There are large Media entities across Europe including Bertelsmann, Vivendi, Sky, (although nothing like the size of American based media conglomerates) and large national companies like Mediaset in Italy that cause considerable concern to the EU and occasionally necessitates EU action. The European Parliament did this in respect to concerns over the duopoly created in TV in Italy with Mediaset and the public broadcaster RAI, since both were controlled by the then Italian Prime Minister Berlusconi. The parliament passed a resolution condemning practices in Italy and calling for direct EU action in regulating and setting the legal framework for media pluralism.

It was in fact a very cranky resolution, which directed recommendations within the current framework for reports, action by both the EC and Italy,   and recommendations for a new media pluralism directive. The resolution served to highlight the issue and redressed some of the issue by moral suasion rather than direct regulatory and legal action. However, it did leave the European Commission and some Member States wondering whether they did indeed have the tools to manage media diversity and take action when required. The EU particularly questioned its own competence to take action if a Member State was unwilling to do so beyond the Competition area and the specifics of the TVWF Directive.

There are a number of studies and updated Directives in the works that will deal with media pluralism and the Audio Visual sector. As these are accepted politically, Member States will take them on and changes will be made in their regulations reflecting the EU Directive(s). All of them will have some impact on content ownership and diversity. For the reader of this paper the most important considerations lie in the Commission’s working paper on Media Pluralism and the initiatives attached to measurement indicators (discussed earlier in this paper), which the Commission hopes will lead to a European platform of assessment which then can be applied to each country’s unique circumstance and incorporated into their regulations.

The EU does not seem to deal with Radio ownership, concentration, or diversity/pluralism issues. If pressed they would probably apply the principles of pluralism enjoyed by their Audio Visual Directives and Competition Laws. However, there is virtually no specific mention of radio issues in this regard and no ongoing monitoring of radio at the pan European level. They do however consider newspapers to be a part of their monitoring mandate.

There is a great deal of useful work being taken on by the EU and its Commission in the ownership and diversity areas. Effectively this work needs to be accepted and applied at the national level. Like any large bureaucracy that has many masters, EU political will evolves through consensus and the wheels grind slowly. It’s is probably axiomatic that no Member State is willing to give up sovereignty over jurisdictions they already manage which is why the Commission is working closely with national regulators.

With the preceding EU context in mind this paper will now focus on some selected EU countries and discuss their ownership and diversity situations. Please note that the EU for their pluralism review has gathered many of the statistics used in this report and these are supplemented by each country’s own media regulation and observations.

The United Kingdom

The UK media are regulated by the Office of Communications (OFCOM). It was set up by a new Act in 2003, which also changed the ownership rules. The UK is arguably the biggest media market outside of the US in the world and as such contributes a great deal to the media pluralism discussion and regulations in the EU.

Ownership Television: Secretary of State can intervene in media mergers that raise public interest considerations. OFCOM and/or the Competition Commission can be asked to investigate any merger that could have damaging effect on plurality, diversity, or standards. This prevents unacceptable levels of cross-media dominance and ensures a minimum level of plurality.

Print Ownership: Under the Communications Act of 2003, any cross media ownership activity will trigger a public interest test that aims to ensure plurality of ownership, economic benefits, and no detrimental effect to the market.

Cross Ownership Restrictions: In every local area, there must be three separate media companies supplying radio, TV, and newspaper services. Nobody controlling more than 20% of national newspaper circulation may own more than 20% of an Independent TV license. Nobody owning a regional ITV license may control more than 20% of the newspaper market in that region. Nobody owning a regional ITV license may own a local radio station with more than 45% coverage of the same area. Nobody owning a local newspaper may own a local radio station where the newspaper accounts for more than 50% of the circulation within the station’s coverage area. (These cross ownership rules were noted in the first of the mandated three-year review by OFCOM provided for by the 2003 Communications Act and they were deemed too complex and may be subject to further clarification and deregulation in the coming year)

Foreign Ownership of Radio, TV, and Newspapers: No restrictions

Restrictions for Political Parties and organizations: Political organizations are not allowed to hold broadcast licenses of any kind.

Market Situation Television, Radio, and Newspapers:

Television

The BBC is the public broadcaster and has a large presence in the UK with two TV networks (with several additional digital services) and many regional stations. There are two large commercial networks ITV and Channel 5 and another quasi-public network Channel 4. BBC had a combined market share of a little more than 35%, ITV a little under 25% share, Channel 4 at 10% and Channel 5 has 7%.

The rest of the market is consists of pay services including Sky Television (26 Sky owned channels offering movies, sports and news) owned by the Murdoch family. Sky satellite television in the UK is subscribed to by more than 8 million UK households. Cable penetration is at 3 million households out of a total market of a little under 25 million UK households and licenses Sky product. Digital television is on a fast track in the UK and is promoted by government and industry.

Radio

BBC radio has five networks and a number of local/regional services and dominates network radio in the UK. Commercial radio has 300 stations and one major national network. Despite the large public broadcasting presence in the UK, listening to private radio is more than two and halves times greater than to the BBC. Interestingly pirate radio remains a factor in the UK and the government is offering community status and five-year licenses to bring them into the overall media regime.

Newspapers

Print in the UK is dominated by ten national papers originating from London with daily circulation of a little over 11 million and 12 million on Sunday. There are many regional and local papers as well. However, national newspaper ownership is concentrated in eight companies with four of them controlling 85% of the national market with similar concentrations in local/regional markets.

Given the above descriptions and the current regulatory regime the UK has made considerable effort to streamline their regulatory process (Communications Act, 2003) while at the same time bringing measured deregulation to their media industries. This process continues to evolve but at its root, there are principles of ownership diversity and media pluralism in every market in the UK; national, regional or local.

France

A law, enacted in 1986 and the subsequent establishment of the Conseil Superieur de l’Audiovisuel (CSA) in 1989 regulates the governance of the communications industry in France.  The CSA also manages issues of media ownership and concentration. While the Competition authorities are obliged to consult with the CSA on mergers and acquisitions in media matters it is the sole responsibility of the CSA to monitor mergers and cross media ownership. Shareholders have the obligation to report to the CSA when their holding exceeds 10% so the CSA can effectively monitor share capital ownership.

Ownership Television and Radio: There are three limits placed on television ownership; capital share, number of licenses and audience share, and participation in more companies in the same sector. This is regulated to apply as follows: an individual person may not own more than 49% of a national TV channel or 33% of a local channel if the average annual audience is greater than 2.5% of the total audience. If a person holds two licenses, they cannot own more than 15% of the second license and if they own three then they cannot own more than 5% of the third license. A person may not own more than one analogue license or seven digital licenses. No more than two Satellite licenses are permitted. The regulations focus on not concentrating ownership in an individual’s hands but shared ownership of companies seems to be permitted.

There is a ban on owning two regional broadcast TV licenses (analogue and digital) or more than one license if the audience area is greater than 6 million.

For radio, an entity may not control one or more stations or network(s) if the aggregate audience exceeds 150 million.

Newspaper ownership: Companies are not allowed to acquire a new newspaper if the acquisition boosts their total daily circulation over 30%.

Cross Ownership: An owner may not be involved in more than two of the following at the national level:

• TV audience area of 4 million people
• Radio audience area of 30 million people
• Cable audience area of 6 million people
• Exceeds 20% share of the national circulation of daily newspapers
• Further restrictions are noted at the local level:
  • Owning a national or local TV license for the area
  • Owning one or more radio licenses with cumulative audiences of more than 10% for that area
  • Owning a cable network for the area
  • Editorial or other control of daily newspapers in the area

Foreign Investment: Non-EU investment is limited to a 20% share of the capital of a daily newspaper, or of terrestrial broadcasting (radio and TV) in the French language. Satellite and Cable foreign ownership is permitted.

Restrictions for Political parties and Organizations: There are no provisions.

Market Situation for Television, Radio, and Newspapers:

Television

France like much of Europe has benefited from media liberalization laws in the last twenty years and has developed a strong commercial sector. The public broadcaster, France Television, enjoys more than 42% of the audience (four channels) with the private sector at 47% with three strong players. This viewing is mostly over the air or retransmitted FTA carriage, with the remainder of the viewing going to subscription TV on cable and satellite platforms.

Radio

The public broadcaster has two full radio networks as well as associated local stations. Commercial radio has seen tremendous growth since the 1980s and media liberalization. Some 1200 stations exist with some 600 of which are associated with generalist networks or thematic brands.

Newspapers

There are ten daily national newspapers owned by ten different companies with printed circulation of over 3 million and readers of over 15 million along with a number of regional papers as well. Circulation and reading of national newspapers have been in decline for some time, however local papers seems to be doing well, and gaining some circulation increase.

France in many ways seems to be an isolated media market within the EU and culturally probably has more relationship to the Francophonie than with all their European cousins. Their ownership and content regulation focuses on France as a market and their strong regulator, the CSA, ensures that there is a diversity of ownership and voices within that framework. To date there seem to be little advocacy for major changes concerning concentration and media diversity.

Germany

Media regulation rests with various state governments in Germany (Lander) as called for by their constitution. However, there has been a great deal of work done in harmonizing their ownership and diversity regulations to create a national policy. The latest update of their consensus and regulatory agreement (Rundfunkstaatsvertrag) was completed in 2005. It is important to note that The German Cartel Office (BKA) and The Commission on Concentration in the Media Industry (KEK) regulate competition in the media environment.

Ownership of Television and Radio: The rules provide for intervention if a company’s media holdings (including newspapers) comprise more than 30% of a viewer share in a year. This is considered a predominate impact on public opinion. For television, exclusively that share is set at 25% of viewers in a given year for a dominate position. There is a system of assessment that provides percentage allowances for regional programming, independently produced programming, and shares of a company’s ownership reducing the impact of the aforementioned percentage thresholds. It is a somewhat complicated system that critics have observed is not easy to use or operate in the public interest.

For radio, there are no aggregate ownership levels for national or regional services.

Newspaper Ownership: No specifics apply beyond the normal Competition rules as noted and administered by the BKA.

Cross Ownership: There are no specific restrictions on cross ownership between radio and television beyond the principle of predominate impact as defined above. It is a bit confusing to understand and the following description by the international legal firm of Bird and Bird is useful:

"If an entity, that intends to acquire a broadcaster, has a dominant position in a media-relevant and related market (which might be the newspaper market or other media-related markets), or if an overall assessment of that entity's activities in the broadcasting and media-related markets suggests that influence is exercised which is equivalent to the predominant impact on public opinion of a broadcaster with viewer levels of 30%, the threshold for the assumption of a predominant impact on public opinion with respect to the TV-market is lowered to a viewer share of 25%.

E.g. a newspaper owner with a predominant market position in the newspaper or other media-related market may only control TV entities with a viewer share below 25%”

There are a number of commentators who argue these rules are not only difficult to use, but have not prevented issues of media concentration. This includes the failed Kirsch conglomerate and the Bertelsmann group from acquiring a dominant commercial position in German media. This criticism assumes they are a problem for German media pluralism and thus far, the authorities have not taken action to address any perceived problem.

Foreign Ownership: No restrictions.

Restrictions on Political Parties and Organizations: These groups are excluded from holding a broadcasting license.

Market Situation for Television, Radio, and Newspapers:

Television

Public broadcasters play a large role in the German media landscape. They are organized by the Lander and receive national distribution based on Lander agreements. Two Channels of ARD and one of ZDF combine to give the public broadcaster almost 50% of the market share. Bertelsmann’s RTL group along with the successor to Kirsch, Sat 1, Pro 7, and Kabel 1 define the commercial market and control about 35% of the market. These companies also have regional stations and over the past years, there has been some growth of independent stations in major metropolitan areas.

It is interesting to note that most viewing to these FTA channels are through cable and satellite delivery with over the air viewing between 5 and 10%. These services also carry the full range of subscription TV including a number of US based theme channels.

Digital television has had a slow take up by commercial broadcasters but the public broadcasters have an additional six channels and more to come. The digital environment is likely to see commercial development because of the increasing viewer take up rate and analogue shut down date on the horizon.

Radio

Radio is regulated by the Lander Media Authorities and they license on principles of plurality and diversity. Depending on the Lander, these goals are met by ensuring external plurality of the licensee or by licensing a limited amount of stakeholder owned stations (internal plurality). There is only one national radio network, which is public and is a holdover from the divided Germany Deutschlandradio and the international service Deutsche Welle. Radio in Germany is fragmented and scattered reflecting the lack of national opportunities.

Newspapers

There is a thriving print media service in Germany with daily circulation more than 21 million with three quarters of that coming from local press. There is considerable diversity in ownership with 138 different newspaper publishers controlling 359 daily newspapers many with local/regional variations. The Springer group controls about 25% of the market but after them, the percentage share of the market does not seem to rise to more than 5%. There is very little cross ownership with radio or TV, although the newspapers along with their counterparts’ in the UK and France have a large presence on the Internet.

It is probably fair to comment that much of the German media landscape is rooted in their constitution after the Second World War, which imposed certain conditions that make national commercial services difficult to manage. It has also been less than two decades since the two Germanys were consolidated into one entity and the focus of their attention has been on those issues. It has been said that Germany is slightly out of step with the EU direction on plurality but with changes made two years ago to their ownership and concentration regulations this may have changed.

Austria

Komm-Austria is the regulatory authority that looks after private and radio television in Austria; licensing, administration, technologies and complaints. It reports to the Federal Communications Board, which supervises the Public Broadcaster ORF. Another federal body called RFR, who also looks after Telecom issues and reports to the Federal Chancellor for broadcasting and the Minister of Transport for telecommunications, supports Komm-Austria administratively.

This all seems top heavy in oversight for a small country with very concentrated ownership. It is worth noting that private television and radio didn’t really begin until 1997 and it wasn’t until 2003 that a private TV network was available. The public broadcaster ORF and the newspaper owners had the market to themselves for a very long time and it is still sorting itself out. There is no regulatory framework for the press although the standards of the Media Law would apply to them (pornography, violence, etc)

Ownership of Television and Radio: One entity may not own more than one radio or TV license in any service area. Media conglomerates who own more than 25% of shares in one another may not hold more than one analogue or digital TV license. Again, it useful to remind the reader the commercial TV and radio industry is not yet a decade old and is considered nascent at this stage of its development. ORF after decades of monopoly still is dominates the electronic market and is separately regulated.

Radio has similar licensing as TV but with one difference, another media company may own 100% of a radio license if their service areas don’t overlap.

Newspaper Ownership: No media regulatory restrictions except for the Cartel Act.

Foreign Ownership: 49% maximum investment from non European Economic Area members (mostly EU countries)

Restrictions on Political Parties and Organizations: They are not allowed to hold a Radio or TV license.

Market Situation for Television, Radio, and Newspapers

Television

The market is dominated by ORF having two channels with more than 50% of the audience. This is not surprising for the monopoly reasons discussed previously. Commercial TV has been slow to take hold with less than 7% of the market.

However, these Austrian Channels compete against German television channels, which spill into the country by cable and satellite TV. German public and private broadcasters enjoy 28% of the market directly through these retransmission regimes and it is estimated the viewing to all German originated programming (including subscription services) is 54%. A huge number that is only analogous to the Canadian viewing situation. (Although French Belgium does have similar problems with programming from France as do the Swiss.) It provides a remarkable challenge for indigenous Austrian programming (no matter the concentration issues) and like in Canada, a truly Austrian film or television production of merit is the cause of considerable public support.

Radio

Like TV commercial radio is still finding its way in Austria. This, in an environment that has two radio networks with regional radio locations from the public broadcaster, ORF. There is now one commercial radio network and a number of commercial regional radio services have been licensed for operation. However even as these operations, which are barely out of the start up phase, are finding audiences issues of concentration are of concern. As a noted European media specialist, Dr. Josef Trappel from the University of Zurich has written:

“Another strand of controversial media policy concerns the unprecedented high degree of media ownership concentration in Austria. The largest newspaper equally owns the only terrestrial national radio channel and in almost all provinces the dominant newspaper publisher also owns the main radio channel and in some cases also the regional television channel. This concentration happened despite the fact, that the cartel law in Austria requires the Cartel Court to check whether the merger or acquisition in question would endanger journalistic and media diversity.”

This would appear to violate the media regulations as noted above, if not legally, then certainly in spirit.

Newspapers

Austria has a very strong regional press, which dominates most regional markets. Sometimes these dominant regional players can dominate an entire region with control of one, two, or three newspapers. There are seven national papers serving the country. There are subsidies for newspapers, where owners receive funding for distribution, regional diversity and journalistic training and development. While there is a number of thriving press companies, the largest seems to be larger than their nearest competitor by at least threefold and they own the only commercial radio network. Clearly, they are in a dominant position.

To be fair Austria is a small country dominated by a large neighbor. Given its history of public broadcasting monopoly and a reasonably protected and subsidized press, it is perhaps unrealistic to expect the comparatively wild competitive style of a UK market situation to take hold. On the other hand, if the lessons of their neighbors and other global communities are meaningful, a more liberalized and fair playing field with enforceable media driven rules may be of both economic and cultural benefit to the Austrian citizen.

Is There Relevance for Canada in Experiences of the Countries Reviewed?

When considering Canada in this discussion it is useful to remember the factors, which characterize our national circumstance:

• Large geography with a sparse population mostly concentrated in a few metropolitan and regional centers.
• Proximity to the United States with a pervasive media and large population and economy
• The electronic media is a mix of private and public services
• Two official languages
• A strong multi cultural policy, reflecting the country’s immigration roots.

Canada is by any standard a media market serving a small population with a large geography, where it is difficult to satisfy all the needs of localism and diversity. Canada is also described as one of the most competitive of media markets in the world. A balance between the economics of a small media market place and the needs of a geographically and culturally diverse population is a challenge for a regulatory framework intent above preserving and enhancing a diversity of voices and views.

As Canada joins this diversity discussion, it is appropriate to reflect on the experience of others. The reality of each country’s experience is to try to find policies and rules, which fit the particular national circumstance and interest. There is no cookie cutter model, which may be adopted by all countries and which would work effectively within all national environments. However, there are principles and tools, which are universal, and they should be at the core of any public policy and regulation initiatives that Canada makes.

These principles focus on media diversity and plurality; the opportunity that media affords different voices and viewpoints of a society in addressing the social, cultural, economic and political issues and events of their community(s). It is at the essence of how a nation helps define its democratic foundations.

For Canada to preserve and enhance pluralism, it needs to define a diversity baseline for measuring over time. This paper has already discussed the importance of measurement and particularly recommends the work being done by the European Union. However, measurement by itself is not particularly useful unless there is a baseline developed about what the marketplace currently offers, and whether the current situation provides for the full expression of the principles of diversity previously noted. These are some of the questions, which need to be part of a baseline assessment:

• Canada has fewer newspapers today than it did 40 years ago but it has many more radio and television stations and channels. Is this a reflection of less concentrated ownership and more pluralism?
• Is Canada seeing a retreat from an electronic media diversity, which expanded from the 1970s through the 1990s and then began to contract in terms of ownership but not in terms of channels available?
• Is access to media services geographically diverse and are all voices and interests given an opportunity to be heard?
• Is the multi cultural reality reflected by Canadian media
• Are there differing roles for the public and private sector?

The other constant in this discussion is the economics of the marketplace. What will the national, regional and local marketplaces support. Many will argue that bigger is better; more efficient and more competitive. They will also argue that ownership has nothing to do with diversity and pluralism and that processes and regulations may be put in place that guarantees a diversity of viewpoints and opinion. These questions may be assessed as part of the baseline case and followed up with appropriate regulations.

Once the baseline for media diversity is completed then a range of regulatory tools may be implemented, which are appropriate and timely to the current needs. As seen in other countries they include foreign ownership, cross ownership provisions, and maximum levels for broadcast media and newspaper ownership. They may include geographic requirements including regional and local reflection and cultural reflection requirements, which include Canada’s multi cultural interests.

The experience of other countries is important in these considerations. Australia has just passed new legislation, which has yet to be tested but seeks to deregulate the media marketplace while maintaining a strong diversity test. The United States has a major review underway and though the Canadian and American marketplaces are very different it matters what happens in the US because of geography and their media industry. Other countries like the UK may also have some tools, which could be useful if case-by-case assessment is considered useful to a regulatory framework.

Once the tools are in place then measuring diversity becomes very important to maintaining relevance. This paper has reviewed a number of schemes but has recommended the EU approach. The measurement system is to be based on the principles of diversity and the tools in place to maintain and enhance diversity in the national circumstance. Australia’s new diversity rules may also be a source of a measuring regime.

One final thought, which all the interested parties in Canada may want to consider is that many countries mix the diversity discussion with a cultural discussion. Ownership and concentration circumstances are not just about access for different voices, opinions, and ideas, they are also about a nation’s music, stories and literature and their accessibility to the citizen. The national diversity discussion is not just about democratic issues and viewpoints but a broad diverse cultural one as well.

Michael McEwen

July 2007

Sources of Material

1. In addition to the sources noted below the writer interviewed industry players, observers, commentators and regulators in many of the countries reviewed.
2. http://www.freepress.net/content/ownership
3. http://www.cem.ulaval.ca/6thwmec/albarran_mierzejewska.pdf
4. Media Pluralism Initiative, Commission working Paper Jan 2007 http://ec.europa.eu/information_society/media_taskforce/doc/ pluralism/media_pluralism_swp_en.pdf
5. http://www.museum.tv/archives/etv/U/htmlU/uspolicyt/uspolicyt.htm
6. FCC Ownership rules and Current review http://www.fcc.gov/cgb/consumerfacts/reviewrules.html
7. http://fpc.state.gov/documents/organization/82491.pdf
8. http://www.stopbigmedia.com/chart.php
9. http://www.fcc.gov/telecom.html
10. http://www.aar.com.au/pubs/cmt/focmtjun07.htm
11. http://www.dcita.gov.au/media_broadcasting/radio/cross-media_and_foreign_ownership_reform/existing_media_ownership _restrictions
12. http://www.dcita.gov.au/__data/assets/pdf_file/37572/Media_ consultation_paper_Final_.pdf
13. http://www.acma.gov.au/WEB/STANDARD//pc=PC_91756
14. http://www.acma.gov.au/WEB/STANDARD//pc=PC_90169
15. http://canterbury.cyberplace.org.nz/community/CAFCA/ publications/Miscellaneous/mediaown.pdf
16. http://www.tki.org.nz/r/media_studies/pdfs/media-ownership-in-new-zealand.pdf
17. http://www.bsa.govt.nz/publications/IssuesBroadcastContent-2.pdf
18. http://www.bsa.govt.nz/publications-booksandreports.php#issues
19. http://ec.europa.eu/comm/competition/speeches/text/ sp2004_002_en.pdf
20. http://ec.europa.eu/avpolicy/docs/reg/modernisation/issue_papers/ ispa_mediapluralism_en.pdf
21. http://europa.eu/scadplus/leg/en/lvb/l24101.htm
22. European Parliament resolution on the risks of Violation, in the EU and especially in Italy, of freedom of expression and information Document # P5_TA (2004) 0373 and related documents at www.europo.eu 
23.  New Audiovisual Directives http://ec.europa.eu/avpolicy/reg/tvwf/modernisation/proposal_2005/ index_en.htm
24. European Journalism Centre, Michael Bromely  http://www.ejc.net/media_landscape/article/united_kingdom/
25. A Ownership Review by International Law Firm Bird and Bird http://www.twobirds.com/English/publications/articles/ FranceMediaBulletin.cfm
26. http://www.twobirds.com/english/publications/articles/ GermanyMediaBulletin.cfm
27. http://www.ejc.net/media_landscape/article/germany/
28. http://www.hans-bredow-institut.de/forschung/recht/co-reg/reports/1/Austria.pdf
29. http://www.ejc.net/media_landscape/article/austria/  Josef Trappel, author
30. http://www.venice.coe.int/docs/2005/CDL-UDT(2005)004-e.pdf

Date Modified: 2007-08-17