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U.S., Canada music TV cos. settle fight

TORONTO, June 22 -- Canada's New Country Network formed a partnership Thursday with Nashville-based Country Music Television, apparently settling a market-access dispute that prompted Washington to accuse Ottawa of virtually 'confiscating' the U.S. company's Canadian business. In February, U.S. Trade Rep. Mickey Kantor launched a Section 301 investigation after the Canadian Radio-Television Telecommunication Commission terminated Country Music Television's access to Canada. The board acted under a Canadian rule that denies market access to foreign-owned TV programming services determined to directly compete with a Canadian-owned operation. Ottawa halted Country Music Television's access after Canadian-owned New Country Network began operations. At the time, Kantor denounced the move as a virtual 'confiscation of Country Music Television's business efforts' over 10 years of Canadian operations. Observers had expected Kantor to release a so-called 'hit list' of proposed sanctions against Canadian entertainment companies on Wednesday. Country Music Television had also retaliated by stopping play of videos made by Canadian artists. But Thursday, New Country Network owners Rogers Communications and RAWLCO Communications Ltd. apparently settled the dispute by agreeing to give County Music Television a 20-percent stake in New Country Network. Under Canadian law, foreign investors cannot own more than 20 percent of a Canadian broadcast company. County Music Television, a subsidiary of Gaylord Entertainment Co. and Westinghouse's Group W Satellite Communications, declined to say whether it paid for the 20-percent stake or got it for free. But Gaylord Entertainment and Group W did ask Kantor suspend his Section 301 probe.

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In Washington, Kantor praised the deal, saying that he hoped the agreement 'will provide sufficient basis to terminate the Section 301 investigation.' However, he added that the Canadian broadcast rule leading to the dispute 'continues, by its very existence, to threaten the security of other U.S. services currently authorized for distribution in Canada.' Under the terms of Thursday's tentative deal, the U.S. and Canadian companies will jointly operate the Calgary, Alberta-based Canadian country network as 'Country Music Television (Canada).' The 24-hour country music channel will reach some 6 million Canadian homes -- 4 million more households than Country Music Television formerly reached. 'The real winners in this agreement are our Canadian country artists,' said RAWLCO president Gordon Rawlinson. 'Not only will they continue to receive heavy airplay on CMT Canada, but they will again have exposure on CMT in the U.S., Europe and around the world.' CMT and its international network plan to resume telecast of Canadian artists' videos once Thursday's deal becomes final. Canadian Trade Minister Roy MacLaren praised the deal, which he said the companies had reached without government intervention. MacLaren and Kantor had discussed the matter at the recent Group of Seven world leaders' summit in Halifax, Nova Scotia. But the Canadian Conference of the Arts denounced Thursday's agreement as '(Neville) Chamberlain-style politics of appeasement in the face of expansionist American ambitions.

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