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DTH companies confident after hearing

TORONTO - While some intervenors took both Star Choice and Bell ExpressVu to task for perceived failings during their first license terms, executives from both companies told that they came away from last week's CRTC license renewal hearings pretty sure their licenses will be renewed to a full term.

At the hearing, as previously reported by, in either oral or written submissions the Canadian Association of Broadcasters, Canadian Cable Television Association, the CBC, cable companies Vidéotron and Cogeco all expressed their feelings that signal security on the part of Bell ExpressVu be a condition of license. Vidéotron has asked that ExpressVu's license term be limited to three years, given the rate of theft of that signal in Quebec.

As well, both the CCTA and CAB want to see carriage and linkage rules harmonized between the cable operators and DTH companies. However, while the CAB wants the Commission to force DTH undertakings to be required to distribute Canadian analog specialty services in accordance with their dual status and modified dual status designations, the CCTA wants to do away with that provision altogether so its members would be free to package those analog specialties as they see fit.

The CAB also wants the Commission to force both DTH companies to add even more local broadcasters to their lineups and to pay higher compensation for those not carried. The CAB saved some particularly harsh words for Star Choice, saying that company "seeks to avoid regulatory and contractual obligations" when it comes to its commitments to carrying local broadcasters and in its lack of structural separation from its parent company's other distribution division, Shaw Cable.

Um, we think we're performing well enough, responded BCE-owned ExpressVu and Shaw Communications-owned Star Choice. To paraphrase them both: We're doing a good job, have added hundreds of millions to the TV industry and don't think we should be punished for that.

"We've invested a billion-two in this business. We've contributed a huge amount of benefits to the Canadian broadcast system and if the Commission truly wants a competitive environment they'll give us a seven-year license," Shaw Communications president Peter Bissonnette told yesterday. "What have we done to warrant a punitive license renewal?"

Both companies have invested over a billion dollars in their respective distribution systems and through that, "we have injected $700 million in net new revenue to Canadian broadcast industry," Bell ExpressVu president Tim McGee told in an interview yesterday.

"We brought big city television, digital television, all the great quality TV to Canadians wherever they are and we continue to do that."

As for changing the rules under which they operate, that's a non-starter, adds McGee. "The digital model is such a preferred model for the delivery of TV… to talk about rolling back the clock in terms of how TV is delivered and the flexibility it brings to Canadians is really nonsensical when it comes to a distribution undertaking."

"You've got to look forward, not back. Why would you restrain what Canadians are looking for… it just doesn't have a very solid rationale that we think anyone can ascribe to," he added.

As for adding more local channels, the CAB and ExpressVu came to an agreement in 2002 on a scheme to add more locals and compensate those not carried. However, when writing it into the DTH framework policy (and applying it to Star Choice, too) the Commission altered the deal, saying it would take too much funding away from TV production.

McGee says he has no interest in opening up the deal, and since the Commission itself changed it – and it's a framework item – the CAB has to take this up with the CRTC and the license renewal hearing was the wrong place for it.

The CAB's intervention also called for a take one take all approach to local broadcasters where if one in a market has been added to the DTH lineup, then all must be carried. Impossible, says Bissonnette.

"We think that's just ridiculous. We'd need to have 15 more satellites to accommodate what they're asking for and we've certainly expressed that to the Commission," he said. "We have a capacity issue now. We can't launch the locals that we've already agreed to until F2 is up."

The CAB, in a separate letter to the Commission, also accused Star Choice of side-stepping the above July DTH decision requiring it to add more local stations. Star Choice says it would certainly like to add more locals but cannot given its satellite capacity issues (the company won't remove services it already carries to make room). Telesat's new Anik F2 satellite, to which Bissonnette is referring, is being manufactured by Boeing and has been plagued by delays. It is now slated for an August 2004 launch into space, says Bissonnette. Star Choice paid for the satellite though, back in 2000.

"We have four channels left and we offered to carry some SRC (Radio-Canada) services - and we said this is totally out of our control," says Bissonnette, referring to the CBC's complaints.

"We're bending over backwards to try and accommodate the small broadcasters and put them up there," adds Ken Stein, Shaw Communications' senior vice-president of corporate and regulatory affairs.

And, added Bissonnette, "quite candidly, the services they want us to carry are redundant," in that most of the programming is the same, region to region. "We made a proposal to the Commission which was to take those SRC signals, which essentially have identical programming across the entire nation - except for news - and we would create a compilation channel for them which would carry the news."

Plus, if a Star Choice customer really wants a local broadcaster not carried by it, they can attach an antenna to the box, a feature not offered by ExpressVu. "With our box, anywhere in Canada, if you're in Winnipeg and want the local station, you can actually put your rabbit ears onto the input of the box, select alternate source on the remote control and that signal will come in. It's a very simple solution."

As for the structural separation issue, where broadcasters say they have been forced to deal with one person on carriage deals for both Shaw Communications and Star Choice, Bissonnette is adamant. "We are structurally separate. We have separate people negotiating for Star Choice, we have separate people negotiating for cable. If a programmer wants to negotiate together, they have that choice. Nobody's being coerced," he said.

"The problem there was that (the CAB is) just totally wrong," adds Stein. "We've put in procedures. Star Choice is in a different building. After we had gone through all the effort to put in place the right kinds of procedures and then to come and say 'oh well, they're not in compliance,' I thought was really an overstatement."

Stein betrayed some of the company's overall frustration with programmers as well, adding, "we've got three suppliers. We've got the guys who supply us with receivers. We've got the guys who supply us with the satellites. We've got the guys who supply us with the programming."

He said relationships with the first two suppliers have been positive, even when there have been problems to work out. "So where do all these programmers come from when they're the ones who benefited the most?" he asks, pointing to the dramatic growth in the subscriber numbers among Canadian specialty services.

And as for HDTV, which Star Choice has also been criticized for in terms of creating their own compilation HDTV channels, Stein responded with a shot of his own. "These guys, the broadcasters, are telling us we're not compliant. Well, what are they doing in HDTV? I haven't noticed them investing tens of millions of dollars trying to produce high definition product," he says.

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