Media @ McGill

US Satellite Radio Merger Echoes in the North

Submitted by claire on

satellite radioOn Monday, 19 February, United States satellite radio operators Sirius and XM announced a proposed merger of US $4.9 billion to create a joint entreprise valued at US$13 billion. Due to the enormous dependency of their Canadian subsidiaries, there are strong repercussions for Canada and the Canadian Radio-television and Telecommunications Commission (CRTC) now finds itself in a regulatory bind largely of its own making.

It is safe to assume that not even the most adamant opponent (and there were many) of the CRTC's 2005 decision to allow for two U.S.-based channels with a low level of Canadian content (as low as 10%), could have foreseen such problems arising in less than two years. At its core, the current dilemma calls into question fundamental issues about a nation's right to media sovereignty in an age of globalized communications and the impact of multi-national agreements.

Given their reliance on American-produced content, the US merger, if approved by the Federal Communications Commission (FCC), could leave little option but consolidation for XM Canada, a publicly traded company with businessman John Bitove as the largest investor, and Sirius Canada, which is owned by a private partnership between Standard Broadcasting, the CBC, and Sirius Satellite Radio U.S. Canadian regulators may have little choice but to approve the consolidation since one firm would likely relinquish its licence, paving the way for a monopoly in this struggling new media. The proposed deal was described as “frighteningly anti-competitive” in the Globe and Mail (21 February).

Lost in much of the discussion of the last few days is the one that got away: the proposal tabled to the CRTC in 2004 from CHUM/Astral Media which called for an "all-Canadian" land-based pay-radio service. Though this was technically approved by the CRTC as well, all parties involved knew this Canadian system could not compete against Sirius and XM with their base of American programming. The Chum/Astral proposal was dead as soon as it was approved. But after this week, such a domestically-controlled network should be looking very appealing to the CRTC.

Chum/Astral had some powerful allies in their objection to the 2005 CRTC decision which brought Sirius and XM to Canada. After the announcement, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), Friends of Canadian Broadcasting, the Canadian Independent Record Production Association (CIRPA), and the Society of Composers, Authors and Music Publishers of Canada (SOCAN) took out a full-page advertisement in Ottawa's Hill Times. In it, they publicized results of an opinion poll that showed that 64% of Canadians wanted the Government of Canada to intervene in CRTC satellite radio decisions because the proposed services offered too little Canadian content. No changes were made in the CRTC decision.

The future of satellite radio in Canada now finds itself handcuffed by a regulatory decision yet to be made in Washington, where Canada will have no voice.