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plans

Stentor president Jocelyn Cote-O’Hara says the telephone companies don’t plan to get into the broadcasting business one service at a time. On the contrary, the telcos plan to offer a full range of entertainment and educational services two to three years after the crtc lifts the sanctions that prevent them holding broadcast licences.

According to Cote-O’Hara, consumer appetite for service and information dictate the need to offer a complete package to be competitive. While emphasizing there will be a natural transition process in the telcos entering the market, she says it will be far less than the seven-year moratorium on competition in cable services advocated by the cable companies.

In fact, a green light from the crtc will push the telcos’ development of fiber-optic technology into overdrive, she says.

With a green light for broadcasting licences from the crtc, ‘the investors, the shareholders in the phone companies, would accelerate the plan to bring fiber-optic technology to every residence in the country,’ says Cote-O’Hara.

Without that incentive, a fully digital fiber-optic network may take 10 years to complete, bringing Stentor’s Beacon Intiative, a project to upgrade the phone-company networks, in on schedule in 2005. ‘But by then, it would be too late for us to be truly competitive. This way, what might only happen over 10 years, would happen in two or three,’ she says.

It’s too early to predict on fee structure for services offered through the phone companies, Cote-O’Hara says. There’s no standard set for offering a package of interactive electronic services, including telephone, cable, and computer services. But she adds that if the degree to which the phone rates dropped after Bell’s monopoly was challenged is any indication, the fee for broadcast services alone can be expected to drop anywhere from 30% to 50%.

Discussing the specifics of the telcos morphing into broadcasters comes two weeks after Stentor, a consortium of Canada’s nine biggest telcos, threw down the gauntlet, threatening to cancel the $8.5 billion Beacon project to upgrade Canadian telephone networks if the crtc doesn’t move swiftly to let them into the cable broadcasting business.

In contrast, the cable-tv industry is advocating a seven-year moratorium (with a review in five years) on competition in the short term for the distribution of cable services, fearing being eclipsed by the telephone companies which brought in $15 billion last year, compared to the cable operators’ $2.2 billion.

During this time, cable operators will invest approximately $6 billion to $10 billion upgrading the system to digital video compression capabilities, phone service, and interactive service.

A spokesperson for the ccta says the transition to fiber-optic technology and dvc boxes by the cable industry will be completed within 24 to 36 months.

The telcos are also investing in research and development for a dvc box, experimenting with programming it to open standards, meaning it would receive service via any carrier the viewer chose.

The box will cost less than satellite dishes, somewhere in the low $100s range, and possibly leased at the beginning, says Cote-O’Hara.

Stentor is offering a $50 million incentive if the crtc soon opens up the cable industry to competition. Three-fifths of the funds will go toward financing new programs. The other $20 million will be spent on research and development of technology to help Canadians navigate the I-way.

According to Cote-O’Hara, key to encouraging Canadians to choose Canadian services is increased visibility and accessibility of the services on whatever system consumers choose to have in their home.

On the system the telcos propose, Canadian services will be offered up-front, meaning in the lower channels so consumers won’t have to surf up in through the 30s to find a Canadian service. ‘What we would do is create a system where in every city cbc is on channel 2 and ctv is on 5, for example,’ says Cote-O’Hara.

Also key is a more aggressive marketing approach aimed at raising the profile of Canadian programs in Canada. The telcos would respond to the challenges the gray market presents in part by helping market Canadian productions.

Canada is a forerunner in the advertising industry, says Cote-O’Hara. ‘Let’s apply our experience in promotion to market these Canadian services.’

But while a supplier can encourage the public to buy Canadian through promotions and positioning, the time has passed when you can force Cancon down their throats, she says.

‘You can attempt not to offer what they want (to limit the choices to Canadian services), but they’ll find another way to get it and there’ll be a public outcry of `How dare you choose for me?’

Heartened by the cbc’s broadcasting of its services into the u.s. via satellite, Cote-O’Hara says Canadian broadcasters have to make promoting themselves outside Canada a priority.

‘We’re so busy trying to protect ourselves up here that we haven’t looked upon ourselves as creators of content that has a marketable value beyond our country.’ AV