Business

I WANT MY SATELLITE TV

Pro-choice or pro-territory? A new court battle over U.S. signals shapes up

JULIAN BELTRAME June 10 2002
Business

I WANT MY SATELLITE TV

Pro-choice or pro-territory? A new court battle over U.S. signals shapes up

JULIAN BELTRAME June 10 2002

I WANT MY SATELLITE TV

Business

Pro-choice or pro-territory? A new court battle over U.S. signals shapes up

JULIAN BELTRAME

The first political victim of the Supreme Court of Canadas ruling against U.S. satellite television may have been Richard Pollock. The Liberal candidate in last months Windsor West federal byelection lost the seat held by Herb Gray the past 39 years by 2,478 votes. When he campaigned door to door, he kept getting his ear bent about the courts April 26 decision that effectively makes criminals of the hundreds of thousands of Canadians addicted to the broad range of programs on U.S. satellite signals such as DirecTV and the Dish Network. Worse still, he says, was that Heritage Minister Sheila Copps and Industry Minister Allan Rock hailed the decision against the so-called “grey market,” thereby undercutting his pledge to fight for changes to the law once elected. “I don’t know if it cost me the election,” Pollock says, “but people were very angry.” That anger stems from a clash of two dis-

tinct visions of television broadcasting in Canada. On the one hand, there’s the desire of Canadians to tap into the exploding viewing choices made possible by modern communications technology—everything from religious programs to sports to news broadcasts from around the world. On the other, there’s the federal government’s objective—through the Canadian Radiotelevision and Telecommunications Commission—of boosting Canadian broadcasters and the production of homegrown programming. Both have valid arguments, although few on either side are willing to acknowledge the other’s.

To Luis Alvarez of Windsor, it’s all about freedom of choice. Alvarez says he once subscribed to Bell ExpressVu—with Star Choice, one of the two CRTC-licenced satellite television providers in Canada— and found it wanting. “It’s just a little more than what you get on cable,” he says. DirecTV, however, gives him the full range of specialty programs and movies available

on Home Box Office, or HBO, whose programs include the popular Sopranos series, and the U.S. sports cable network ESPN, which makes available a wide assortment of NFL football, Major League Baseball and hockey games. On top of that, DirecTV offers Spanish-language stations, a key feature for his family. “This is a working man’s town and when we go home we want to relax and watch what we want to watch,” Alvarez says.

The problem with that reasoning is that broadcast rights are sold territorially. HBO sells programming to DirecTV for the DTH (direct-to-home) market in the U.S. It then turns around and sells the rights to certain shows to Canadian broadcasters for the Canadian market. Similarly, a smattering of ESPN sports events can be found on TSN, a Canadian sports network available on cable. Many movies carried by DirecTV have also been bought up by ExpressVu and Star Choice or Viewer’s Choice, a payper-view movie network on cable. “Cana-

dian broadcasters who pay for exclusive rights to a program shouldn’t face competition from someone who hasn’t bought those rights,” argues a federal official, defending the government policy. Express Vu and Star Choice claim the illegal U.S. satellite dishes cost Canadian broadcasters $400 million a year in lost subscribers. As well, says Rock, U.S. satellite providers don’t pay licensing fees that go toward supporting Canadian-made programs. “This is not about consumer choice,” said the minister, “this is about property rights and establishing a fair market.”

Even some on the freedom-of-choice side of the debate concede the Supreme Court was correct in its ruling. “It’s the law that’s stupid,” says Larry Ormodia, CEO of the Toronto-based satellite dish firm CTY Telecom. Richard Rex, owner of Can-Am Satellites in Maple Ridge, B.C. —the firm involved in the Supreme Court challenge—argues that program providers already build in for territorial “spillage” when they sell their programs to satellite providers. He notes that while some Canadians have access to DirecTV or the Dish Network, American residents are in turn tuning into ExpressVu. “HBO and the others deal with a broadcaster in a territory knowing full well the broadcast is not strictly limited to that territory,” he says. He adds that the vast majority of programs available on DirecTV will never be shown by Canadian providers. So where’s the harm? he asks.

That’s especially true with ethnic programming. U.S. satellite firms carry a multitude of ethnic stations originating from Spain, Argentina, Chile, China, Russia and the Arab world that are simply not available in Canada because the population base is too small to support the programming. Paul Fitzgerald, vice-president of the Congreso Ibero-Americano de Canadá, a recently formed lobby group for about 140,000 Spanish-speaking Canadians, says the law denies Canadians a basic right to receive news and information from home, in their preferred language. “When you think about it, it makes no sense,” he says. “It’s not illegal to subscribe to a Spanish language magazine, it’s not illegal to listen to a Spanish short-wave radio station, it’s not illegal to watch Spanish television on the Web. It’s only illegal to watch it over a U.S. satellite television system.” True, says Janet Yale, president of the Canadian Cable Television

Association, “but there’s no reason those services can’t be offered here if someone wants to purchase the rights to that product.” Even then, though, a new channel must first gain approval from the CRTC.

The clashing visions appear irreconcilable, but a remedy may not be far away. Kerry Edmonds, a spokeswoman for Copps, says the government is examining ways to maintain the policy without sideswiping the wide gamut of ethnic programming placed out of reach by the court decision. “It was never the government’s intent that the Radiocommunication Act hinder the diversity” of broadcasting in Canada, she said. Canadian grey market providers are not waiting. They have launched a new court challenge, arguing that the law is in conflict with freedom of expression guarantees in Canada’s Charter of Rights and Freedoms. And even if that fails, technology may defeat whatever roadblocks the CRTC puts in the way. “They feel they can somehow force Canadians to watch what the CRTC says they have to watch,” says Stephen Gallagher, chairman of the Canadian Alliance for Freedom of Information and Ideas, a lobby group formed around the issue. “What they’re doing is forcing Canadians into the black market for satellite.

And then everyone loses, says Gallagher. While subscribing to U.S. satellite services is illegal, Canadians in the grey market do pay for the service. Canadian vendors typically charge a fee—in the case of Can-Am Satellites, $60 a year—to provide them with a U.S. address so they can receive a U.S.-based satellite service, which then bills them upwards of US$80 monthly through their credit card. But Canadians can also purchase decoder cards on the black market to literally steal the U.S. signals without additional monthly charges, a piracy many believe will grow as Canadian vendors are shut down.

And what happens, asks Gallagher, when high-speed broadband Internet makes it possible to watch television on computer? Will the CRTC step in to regulate the Internet as well? “I think the government is stuck on a policy that worked 20 years ago, but doesn’t work anymore,” he says. At the very least, it’s becoming increasingly difficult to manage, both technically and, as Windsor West showed, politically. G3