Will our cable guys strike gold?

One of the most puzzling questions for the four immensely rich men who control Canada's cable TV industry, is just how rich they will eventually be.

There has long been speculation that Ottawa would make them vastly richer by lifting restrictions on foreign ownership of cable companies, thereby driving up the value of their companies and allowing them to reap huge windfalls when they sell out to foreign interests.

“The possibility of foreign ownership is always a factor in the cable guys' estate planning,” notes Gordon Pitts, author of Kings Of Convergence.

But there's been uncertainty about whether the dream of the cable guys would be realized.

After all, the question of whether foreigners should be permitted to control part of our broadcast sector is potentially sensitive in a country where American media influence is already pervasive.

So, like most other industrialized countries, Canada has laws requiring Canadian control of companies involved in broadcasting and distributing TV programming.

Another obstacle to the cable guys' dream has been Sheila Copps, the former heritage minister, an ardent nationalist who fiercely opposed removing foreign ownership restrictions.

So while former industry minister Allan Rock proposed loosening the foreign ownership rules for the cable and telecommunications sectors, he faced a feisty opponent at the cabinet table in Copps.

Two parliamentary committees also fought over the issue last year, with the industry committee backing Rock, and the heritage committee, in an impassioned report more than 800 pages long, backing Copps.

But the obstacles to foreign ownership are fading with Paul Martin as Prime Minister.

At a workshop during the recent Liberal convention, Martin seemed to favour loosening up ownership rules for the cable companies.

Significantly, Martin dumped Copps from his cabinet, removing from the table the one person with a solid grasp of broadcasting issues and a clear position in favour of maintaining Canadian control.

He replaced her in the heritage portfolio with rookie MP Héléne Scherrer, a newcomer to the issue, best known for organizing the Canadian canoe and kayaking championships.

Martin also appointed Francis Fox as his principal secretary.

Until recently, Fox was an executive for Rogers AT&T, part of the empire of billionaire Ted Rogers, one of the four cable guys (along with J.R. Shaw, Pierre Karl Peladeau and Louis Audet). While working for Rogers, Fox lobbied the government for an end to the foreign ownership restrictions.

Presumably, Fox won't forget all his ideas on the subject, just because he's now working closely on a daily basis with the Prime Minister.

With Fox in Martin's inner office and Copps gone from cabinet, the cable guys might soon find their estate planning much more enjoyable. Ian Morrison, whose group, Friends of Canadian Broadcasting, has long tracked this issue, suspects Martin will lift the foreign ownership ban, but not until after the next election, since polls show Canadians oppose such changes.

If the cable guys get their way, the rest of the broadcasting industry will surely demand seats on the gravy train, too.

In a speech last November, Leonard Asper, CEO of CanWest Global, which owns Global-TV, said that while he favoured the foreign ownership option, he was “bitterly opposed to opening it up for cable, satellite and telecom without opening it up for broadcasting.”

So, if Martin starts tampering with foreign ownership restrictions, it could be just a short hop-step-and-a-jump to Fox and AOL-Time-Warner buying up our TV networks as well as our cable companies.

With Canada's close location and cultural similarity, our broadcasting industry would be uniquely suitable for integration into the U.S. media conglomerates.

Rather than opening this door a bit and encouraging a rush to foreign ownership throughout the media, why not just keep the door closed?

Even the U.S. has rules against foreign ownership in its broadcasting industry; a rich Saudi businessman can't simply buy up Fox News.

The Americans understand the problem.

So do some Canadian businesspeople.

Michael MacMillan, CEO of movie distributor Alliance Atlantis Communications, argues that broadcasting “is not a commodity; it's a cultural influence ... Ownership has a great deal of influence, I believe, over what is produced and why.”

And William Linton, CEO of telecommunications firm Call-Net Enterprises, argues that it matters if the decisions are made in “New York boardrooms where the Canadian region will be just another shaded area on the map, waiting on the whims of executives with a dozen other regions to consider.

“I believe these decisions are much too important to our survival to be left to another country.”

That was a businessman talking.

Imagine if our Prime Minister had that kind of commitment to the national culture.

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