BUSINESS

Is Canada's broadcast policy lost in space?

The CRTC confronts the U.S. satellite challenge

TOM FENNELL May 27 1996
BUSINESS

Is Canada's broadcast policy lost in space?

The CRTC confronts the U.S. satellite challenge

TOM FENNELL May 27 1996

Is Canada's broadcast policy lost in space?

BUSINESS

The CRTC confronts the U.S. satellite challenge

Mike Robins finally ran out of patience. For more than a year, the Ontario businessman has been anxiously awaiting the day when a Canadian company would introduce a direct-to-home (DTH) satellite television service similar to those already widely available in the United States. But in February, one of the two companies licensed for DTH, Power DirecTV of Montreal, abandoned its plans, claiming that government regulations made it impossible to turn a profit. The other, Toronto-based ExpressVu Inc., has been plagued by technical problems and has delayed the launch of its service until 1997. Fed up, Robins purchased an 18-inch satellite dish from a St. Catharines, Ont., dealer last month. After signing up with a U.S. service for $63 a month, he can now watch all the television he wants, roaming up and down a dial that offers nearly 200 channels.

As he channel-surfs, Robins is exposing a major problem confronting regulators: the increasing inability of the Canadian Radio-television and Telecommunications Commission to regulate the nation’s airwaves. For almost as long as television has existed, Ottawa has tried to control what Canadians can watch and which companies are allowed to provide what services. In the days when land-based broadcasting and cable distribution were the only efficient means of distributing TV signals, the CRTC’s rules were relatively easy to enforce.

But now that pizza-sized satellite dishes can pull signals from the sky, the regulatory sys-

tem is breaking down. “There is little that the commission can do about it,” said John Meisel, who headed the agency from 1980 to 1983 and now teaches political science at Queen’s University in Kingston, Ont. Meisel does not mince words. “The satellite dishes,” he says, “are tombstones for the CRTC.”

The pressure on Ottawa is growing stronger by the month. Since the first DTH service began operating in the United States in 1995, at least 50,000 Canadians—some estimates run as high as 150,000—have purchased dishes and pointed them at U.S. satellites. (Although there is no law restricting the ownership of satellite dishes in Canada, broadcasters are not supposed to beam signals into the country without a licence.) On June 1, the makers of the most popular brand of satellite dish, French-owned Thomson Consumer Electronics, which sells under the RCA name, plan to begin selling satellite receivers across Canada for about $1,200. Since there are currently no Canadian satellite TV packages, the buyers of those dishes will presumably subscribe to a U.S. service—the best-known of which is DirecTV, a General Motors Corp. subsidiary based in Los Angeles that also owns 20 per cent of Power DirecTV.

The growing influence of U.S. satellite broadcasters poses a major problem for Canada’s broadcasters and cable companies. They point out that the value of a broadcasting or cable licence is sure to fall as U.S. programming floods into the country illegally. In addition, satellite

signals undermine copyright laws because companies that purchase Canadian rights to movies and other programs may face competition when those same programs are beamed into Canada from space. “There is a huge copyright problem,” said Claude Lewis, executive vice-president of Torontobased Canadian Satellite Communications

Inc., which owns 20 per cent of ExpressVu. “Programmers in Canada are having their products stolen.”

The issue is about to get even more complicated for the CRTC because of a looming shortage of satellite capacity. In March, a technical malfunction knocked out 50 per cent of the capacity of an Anik E-l satellite owned by Ottawa-based Telesat Canada Inc., the only Canadian company now licensed to operate fixed satellite broadcast services. Telesat Canada Inc. now wants to

launch two new direct-broadcast satellites by the end of the year—but to help pay for the $800-million project, it wants to form a partnership with two U.S. companies, Telecommunications Inc. and TelQuest Ventures Inc. Those companies want to use Telesat equipment to broadcast U.S. pro-

gramming back into the United States.

Ultimately, the U.S. Federal Communica-

get a DTH service up and running or foreign firms such as DirecTV will grab an ever-increasing share of the market.

tions Commission is expected to endorse Telesat’s proposal, if only because there is not enough space available on U.S.-owned satellites. But in return, the FCC will likely demand reciprocity with Canada, making it legal for companies like DirecTV to broadcast into Canada. Telesat president Larry Boisvert, for one, says that Canada must

The irony is that there is no shortage of Canadian companies vying to offer satellite TV services. Although Power DirecTV is now sitting on the sidelines, the company has said that it will revive its broadcasting plans if the CRTC agrees to relax the rules and allow Canadian signals to be transmitted from DirecTVs U.S.owned satellite. Meanwhile,

Star Choice Television Network Inc., based in Lindsay, Ont., plans to go before the CRTC in July to seek its own DTH licence. And Edmonton-based Shaw Communications Inc., which lost a bid for a DTH licence last year, is now preparing a new application. Worried that it may not be able to find space on Telesat’s existing satellites, Shaw is also pressing ahead with a plan to

launch two satellites of its own, subject to the approval of federal Industry Minister John Manley, whose department oversees satellite television broadcasts.

Whatever strategy Manley adopts, few doubt that the CRTC is losing its ability to defend Canadian content. In the commission’s Ottawa offices, some employees jokingly suggest that DTH stands for direct-tohell. And privately, one staff member told Maclean’s that there is little the agency can do short of deploying rooftop police to patrol for dishes tuned to U.S. satellite services. Guy Skipworth, vice-president of Star Choice Television Network, says he recently asked a CRTC official if the agency had the resources to take action against the unlicensed DTH operators at a time when there is no Canadian alternative. He claims he received a blunt “No.”

For now, Thomson Consumer Electronics is maintaining a low profile on its plan to sell RCA dishes in Canada. The company’s only public comment to date came in a statement by the firm’s legal counsel in Toronto, Robert Girard, who said the decision was based purely on market considerations. “The expanding availability of digital satellite systems in Canada has put Thomson dealers at a severe competitive disadvantage,” said Girard. True enough, but the dealers’ problems are nothing compared with those now confronting the CRTC.

TOM FENNELL