January 16, 2008 / 1:21 AM / 10 years ago

CRTC toughens media merger rules

OTTAWA (Reuters) - Canada’s communications regulator imposed new rules on Tuesday restricting cross-media ownership and setting limits on broadcasting mergers to ensure diversity in programming.

<p>Alliance Atlantis executives pictured during a special meeting where shareholders voted in favor of a $2.3 billion takeover offer from CanWest Global Communications Corp. and a private-equity affiliate of Goldman Sachs &amp; Co. in Toronto, April 5, 2007.The CRTC imposed new rules on Tuesday restricting cross-media ownership and setting limits on broadcasting mergers to ensure diversity in programming. REUTERS/J.P. Moczulski</p>

The Canadian Radio-television and Telecommunications Commission said in a statement that private companies will only be allowed to control two of the three media types -- radio, television and newspaper -- serving a single local market.

When reviewing mergers and acquisitions, the regulator will ensure that no single entity controls more than 45 percent of the total television audience and that no owner effectively controls delivery of programming in any market.

The new rules apply only to private broadcasters and to future deals.

The CRTC said it was concerned that consolidation in the television industry could lead some owners to have a dominant position that might lead to a reduction of local or regional programming.

“It is an approach that will preserve the plurality of editorial voices and the diversity of programming available to Canadians, both locally and nationally, while allowing for a strong and competitive industry,” said CRTC Chairman Konrad von Finckenstein.

Companies that could be affected by the rule change include CanWest Global Communications Corp, which won CRTC approval last month for its takeover of Alliance Atlantis Communications.

Other big media players include Quebecor Inc., Rogers Communications, Shaw Communications, Cogeco Inc, Corus Entertainment and Astral Media.

There is already at least one instance where a company owns more than one media outlet in the same medium and in the same market.

For example, CanWest -- Canada’s biggest media company -- controls both the Province and the Sun daily newspapers in the Pacific Coast city of Vancouver. The Sun generates the largest circulation of any CanWest newspaper in a city market.

In addition, the company sells the National Post, a daily national newspaper. As well, it has a television presence through its Global network.

CanWest shares were 7 Canadian cents lower, at C$6.20, on the Toronto Stock Exchange at midday.

Reporting by Louise Egan and Wojtek Dabrowski; Editing by Bernadette Baum

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