Published in The National Post, August 11, 2004, p. FT-15.

Wrong Wavelength
by
Pierre Lemieux

“Liberté!” The white-and-gold-on-black posters were already everywhere on Parliament Hill shortly before 1 p.m. yesterday, when the first of the 55 buses from Quebec City (and a few from other towns) started arriving. During the afternoon, many thousands of people (5,000 according to police estimates reported by the Canadian Press) demonstrated against the Canadian Radio-television and Telecommunications Commission’s order that CHOI-FM stop broadcasting after Aug. 31. Under the legal verbiage of regulatory offences, the CRTC blames CHOI for violating “Canadian values.” Criticizing some comments made on-air, the CRTC ruled on July 13 that “their broadcast on public airwaves does not constitute programming that reflects Canadian values.” The CRTC’s decision adds: “The regulation prohibiting abusive comment that tends or is likely to expose a person or a group to hatred or contempt is necessary not only to avoid harm to the persons targeted, but also to ensure that Canadian values are respected for all Canadians.… This harm undermines the cultural, political and social fabric of Canada...” CHOI is the most popular radio station in the capital of Quebec. It is a rock station, but with politically incorrect and controversial (and anti-nationalist) talk shows and hosts. Its broadcasts attract up to 46,000 listeners, according to Cossette Média data. The CRTC received 9,417 “interventions” in favour of the renewal of CHOI’s licence, and 38 against. On July 22, between 35,000 and 50,000 people demonstrated in the streets of Quebec City against the CRTC’s diktat. By yesterday, the station claims, 209,016 individuals had signed its petition asking Parliament to overrule the CRTC. That so many Canadians don’t hold Canadian values raises a little problem. What are “Canadian values”? According to social choice theory, a major strand of analysis in modern economics, such things do not exist. At the very best, there are the values of a majority who agrees with them, assuming they can be defined simply enough to receive informed consent. As long as Canadians hold different values, there is no non-dictatorial way to add them up into some sort of blob values for the whole society. In fact, the CRTC’s “Canadian values” are, at best, the ill-defined preferences of a majority of Canadians; at worst, the preferences of the political and bureaucratic class, some of their clienteles, and their court intellectuals. Other powerful interests are involved. Cogeco, owner of two competing stations in Quebec City, was a major voice among those asking the CRTC not to renew CHOI’s licence. According to a CHOI spokesman, the CRTC sleeps with large broadcasters, an hypothesis consistent with the economic theory of capture: Powerful regulated corporations capture “their” regulator in the service of their own interests. The Canadian Association of Broadcasters refrains from taking a position “in order to remain neutral on issues where CAB members have taken opposing views.” CAB’s Code of Ethics and other “codes” are nothing but compendiums of politically correct, state-approved “Canadian values.” The CAB as well as the Canadian Broadcast Standards Council, which “self-regulates” the industry ”[w]ith the … approval of the Canadian Radio-television and Telecommunications Commission,” appear to be good compagnons de route of the CRTC. The CRTC justifies its censorship by the fact that the airwaves “are public property,” that using them is a “privilege,” and that broadcasting is “a public service essential to the maintenance and enhancement of national identity and cultural sovereignty.” Disregarding the last point, which is an open plea for state censorship, there is no economic foundation to the claim that the electromagnetic spectrum is a public good that needs to be public property. There is no more reason for a state bureau to allocate frequencies on the electromagnetic spectrum than to distribute forest acreage to those who need wood to make newsprint to publish newspapers. When the electromagnetic spectrum started being exploited in the U.S., in the early 1920s, licences were issued for frequencies that, once allocated, became private property, could be traded, and were legally protected against interference, like any piece of property. A court judgement abolishing this protection created havoc, and led to the establishment of the Federal Radio Commission in 1927, and the actual Federal Communications Commission in 1934. The Canadian licensing system followed a parallel development, with the first regulatory agency created in 1932, although control on private broadcasters seems to have been loose until the creation of the CRTC (under the name of “Canadian Radio-Television Commission”) in 1968. This was probably the real birth of coerced “Canadian values.” Since 1994 in the U.S., part of the electromagnetic spectrum has been auctioned off by the FCC, including now to radio stations. In Canada, the 1996 amendments to the Radiocommunications Act would make auctions possible, too. But, in a study comparing U.S. auctions to allocation mechanisms in other countries, a FCC researcher writes: “This faith in a market-based mechanism has been a key element in the success of this series of auctions. A similar faith is rarely observed in the institutions that control spectrum policy in other countries. Those government officials and regulatory institutions believe that their oversight and judgment in determining the license winners is critical to ensuring a ‘fair’ outcome.” The FCC auction system seems to work well ­- bidding is done, and can be followed, on the Web. The main problem is that the uses of the auctioned frequencies, as well as of the broadcasting equipment, are still tightly regulated. Some economists, such as George Gilder, propose a complete deregulation, only requiring that any user of the electromagnetic spectrum be responsible for finding ways not to interfere with existing users. Here are opportunities for the Canadian government to innovate in liberalization, instead of following in regulation as usual. In the International Journal of Social Economics, economist Barry Keating proposes to “Eliminate government agencies that would have the ability to micromanage communications.” Abolishing the CRTC would be good riddance. Contrary to CHOI, few radio and TV stations dare to violate the CRTC’s “Canadian values,” precisely because they don’t want to put their licences at risk. So, in practice, the CRTC exerts its censorship on the contents of broadcasting from the new licence applications to their periodic renewals, and to the forced auto-censorship in between. The stakes are high in the battle between CHOI and the federal government, and the matter will have to be decided by the Cabinet, if only by default. Yielding before CHOI’s freedom of expression would open the gate to defiance, and hopefully end radio and TV censorship and bring the collapse of this Potemkin village of artificial, state-imposed, anti-liberty “Canadian values.”