U.S., Canada face battle on who can stop the music

January 09, 1995|By John Maggs | John Maggs,Journal of Commerce

Washington -- The Federal Communications Commission is considering possible action against Canadian companies in retaliation for a decision by regulators in Canada that has evicted an American country music cable television station from 2 million Canadian homes.

The FCC has no formal role in looking out for U.S. broadcasters abroad, but it has been asked by the Clinton administration to review what action might be appropriate in the case, according to a U.S. official.

Presumably that would mean blocking or delaying broadcasting licenses for Canadian companies. Although the FCC may not be compelled to take such action in this case, Chairman Reed Hundt, a Clinton appointee, could persuade his colleagues to cooperate with the administration.

Among other possible targets of such action could be Much Music, the Canadian equivalent of MTV, which is reportedly planning to seek permission to begin selling its services to U.S. cable systems.

The FCC review comes as the Clinton administration weighs possible retaliation options in the country music case. Under a never-before-used Canadian law, Nashville-based Country Music Television went off the air in Canada on Jan. 1 after a Canadian partnership announced plans to start its own country music station.

CMT had spent 10 years building its market in Canada and was predicting its first profitable year north of the border in 1994 before the Canadian Radio-Television & Telecommunications Commission announced last fall that it would grant the request to block the U.S. station.

The eviction of CMT has been portrayed by the Canadian government as one of a number of recent or planned actions against the United States that are intended to preserve what Ottawa calls its "cultural industries."

The argument goes that U.S. broadcasting, publishing and record companies are so large and powerful that they could wipe out smaller Canadian companies in a free market, thus depriving Canadians of a vital source of Canadian culture.

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