The federal broadcast regulator has ordered a review of industry consolidation on the same day it approved cable giant Shaw's takeover of Canwest Global's broadcast interests.
"The broadcasting industry is being significantly reshaped by a series of major transactions," said Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission, in statement Friday.
"As a regulator, it is only prudent that we study the implications to ensure we have the right tools to deal with competitive concerns as they arise."
The CRTC pointed to Quebecor Media Inc.'s purchase of TVA, Rogers Media's takeover of five Citytv stations in 2007 and Shaw's purchase of Canwest Global Communications as evidence of consolidation in the industry.
At the same time, it approved Shaw's purchase of Canwest, saying it "will generate substantial benefits for the Canadian broadcasting system."
Canada's Competition Bureau has already approved the $2-billion deal for Canwest, which was in bankruptcy protection and von Finkenstein said the Shaw deal would provide "stable ownership as they emerge from a period of uncertainty."
Calgary-based Shaw gains control of 11 Global TV stations along with a number of highly profitable cable channels such as HGTV, the Food Network and Showcase.
It has made commitments to the CRTC that it will fund improvements to Canadian broadcasting, among them:
- Convert 67 analog transmitters in smaller markets to digital.
- Install a satellite receiver and dish, at no charge, to viewers who lose access to the over-the-air signals.
- Produce new two-hour morning newscasts in Regina, Saskatoon, Winnipeg, Toronto, Montreal and Halifax.
- Buy more drama, documentary and comedy programs from independent producers.
- Invest in new media content that will support news and other programming.
The deal continues the consolidation of Canada's private sector broadcasters by major telecom players.
In September, BCE completed a $1.3-billion takeover of the rest of the CTV television network it doesn't already own.
Rivals Rogers Communications and Quebecor own a mix of cable, media and wireless interests.
The CRTC said it is concerned that large, integrated broadcasting distributors could act in a manner that would be detrimental to the broadcasting industry.
It has invited comment by March of next year with a hearing scheduled for May 9, 2011.
Shaw has pledged that Canwest will continue to operate as an independent company, with a separate board of directors.
Canwest's newspaper holdings, including the National Post, were sold separately.