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Cable vs. Satellite

The Role of the CRTC. Cable vs. Satellite. Telesat Canada. A Canadian public corporation formed in 1969 to deliver satellite services to Canadians ownership: 51% — Canadian federal government 49% — Canadian telephone monopoly (Bell Canada) No development for a decade

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Cable vs. Satellite

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  1. The Role of the CRTC Cable vs. Satellite

  2. Telesat Canada • A Canadian public corporation formed in 1969 to deliver satellite services to Canadians • ownership: • 51% —Canadian federal government • 49% — Canadian telephone monopoly (Bell Canada) • No development for a decade • Federal government does not challenge interests of telephone companies

  3. Cancom • CRTC rules (early 80s) that TV signals be made available to remote regions of Canada • Cancom: Consortium of four private Canadian broadcasters formed in 1981 • André Bureau becomes president in January 1983 • Telesat satellites are used to send TV signals to regions of Canada beyond reach of cable • Company loses money immediately • Offers only four TV stations (3 English, 1 French) + eight radio stations(in 1983, “3+1” policy) • $500,000 monthly revenue & $2 million monthly expenses in 1984

  4. CRTC & Cable • In 1980s, cable had > 60% penetration of Canadian households • CRTC strategy is to deliver universal service via private broadcasters (Cancom) • Establishes a pro-cable regulatory paradigm • Cancom uses Telesat Canada satellites • Sends TV to cable systems (cable companies become Cancom’s customers) • Direct to home (DTH) signals could be sent only beyond cable’s reach • Cable customers provide revenue flow • André Bureau becomes Chair of CRTC in October 1983

  5. Death Stars • Direct TV: a US satellite TV service • In direct competition with cable services • Benefits from 1992 FCC ruling preventing cable operators from withholding channels under their control from satellite competitors • Canadian cable companies lobby CRTC in response to “death star” threat • Direct broadcast satellite (DBS) service can beam signals all over North America • Ted Rogers sings the blues

  6. CRTC & Death Stars • CRTC regulation of 80% Canadian ownership makes Direct TV’s signals illegal • Canadian-owned Power Corporation & Direct TV form Power Direct TV • 80% owned by Power Corp. • 20% by Direct TV

  7. CRTC & Death Stars • Threat of competition to cable • BCE & WIC (Western International Communications) talk to Power Direct • CRTC response • BCE & WIC licenses will not be renewed if talks continue • Direct TV must use Canadian satellites to beam to Canadian homes • Threat of more regulatory action

  8. Death Stars & Cable • Cable Co.’s strategy: • Develop a wholly cable-owned DTH satellite company • DTH Canada created in 1994 • Controlled by cable companies (Rogers, Shaw) • CRTC forces minority ownership on BCE & WIC • CRTC exempts DTH Canada from licensing fees • Regulation: no fees for companies using only Canadian satellites • DTH uses Telesat satellites

  9. The Dust Settles • Anti-trust investigation forces Rogers & Shaw out of DTH Canada • BCE and WIC gain control of the company • DTH morphs into ExpressVu • Anti-competitive regulation by CRTC forces Power Direct TV out of Canadian satellite business

  10. Canadian Satellite Service • ExpressVu • Controlled by telephone industry • Cancom • Controlled by cable industry • Star Choice • What was the role of the State?

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