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UPDATE: HD must-carry for BDUs; cable responds
11/13/2003

QUEBEC CITY - CRTC chair Charles Dalfen used his speech at Tuesday morning's Canadian Association of Broadcasters convention breakfast to announce the Commission will require Canadian cable and satellite companies to carry both the analog and digital signals of local broadcasters.

The Commission issued a public notice outlining a regulatory framework for the distribution of digital (high definition) TV signals and it appears the CRTC can expect a battle from the Canadian cable industry.

"As under the current rules, the framework will give priority to the carriage of over the air Canadian digital television signals," says this morning's press release. "Distribution undertakings will be required to carry both the analog and digital versions of priority services, until at least 85% of their subscribers are capable of receiving digital services, at which point they may apply to the CRTC to stop distributing analog signals."

"This means that the digital signal of a programming service must be carried even though it may be identical in content to the analog signal, which will often be the case during the transition," said Dalfen during his speech. "The transition to digital requires substantial investments. Over the air broadcasters must build and operate digital transmission facilities. Mandatory carriage of their signals will enhance their opportunities to recoup those outlays through increased advertising revenues."

Given that the vast majority of Canadians watch TV through cable or satellite, "for the transition to digital to work, digital services need to be widely distributed so that Canadians can watch them," said Dalfen. "Giving viewers better access to digital signals, including high definition signals, will help drive the transition to digital."

Dalfen added that this measure will give consumers "more incentive" to purchase HDTV sets.

Dalfen's speech did not sit well with Canadian cable operators. "Our issue remains that the CRTC only seems concerned with broadcaster costs," said Canadian Cable Television Association acting president Michael Hennessy in an e-mail to www.broadcastermagazine.com. "We are investing billions yet it is just assumed somehow we will get a return on capacity.

"One of our key concerns remains - a lack of incentives for broadcasters to provide real HDTV. This is critical to driving the transition to digital," he continued. "So is content. We need real HD channels to make the offer attractive. Hopefully now that the policy is out the CRTC will proceed to Gazette our applications to add HDNET and Discovery HD Theatre."

The CCTA applied to the Commission in February of this year to add both of those U.S. high definition channels to the CRTC's list of eligible satellite services but have yet to hear any sort of official response to that application.

The Commission also said Tuesday that it will soon issue a public call for comments on this proposed framework and then launch an additional two-step follow-up proceeding. That process will establish a licensing framework governing the transition to HD of pay and specialty services and the rules for cable distribution of those services when they switch to HD. The second step will be to set rules for HD carriage of specialties on DTH, whose capacity is constrained by its number of available transponders.

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