Canada eyes road to looser ownership regs

Advisory report recommends a gradual overhaul

TORONTO -- A federal government advisory report released Thursday recommends that Canada gradually overhaul its foreign ownership rules for homegrown broadcasters and phone companies.

The long-awaited report from the Competition Policy Review Panel calls for a gradual loosening of rules that bar majority control of licensed Canadian broadcasters and phone companies by foreign players.

The 134-page report proposes an initial five-year period of limited deregulation, followed by "broader" liberalization of the foreign investment rules.

In the second phase, the panel recommends that liberalization only apply to the carriage side of broadcasting, with Canadian "content" on the domestic airwaves continuing to receive regulatory protection.

Phasing out Canada's foreign-ownership rules was first proposed in March 2006 by another blue-ribbon report commissioned by the federal government, the Telecommunications Policy Review Panel.

U.S. companies already hold minority stakes in a number of Canadian media companies and are expected to raise those holdings as Ottawa eases or ends foreign ownership rules.

The panel report argues that Canadian broadcasters and phone companies already operate in an increasingly global and competitive market, and that liberalizing foreign ownership rules will allow domestic players to innovate by securing additional growth capital from foreign investors.

Loosening or scrapping foreign ownership restrictions on domestic broadcasters will face opposition from smaller Canadian media players and cultural nationalists that fear a loss of control of the domestic airwaves to foreigners and the "Americanization" of popular culture.