on DTH decision

A mere five months before the first Canadian direct-to-home satellite service beams down, Expressvu and Power DirecTv have their eyes on the clock as they wait for the government to make its recommendations to the crtc based on the paper recently released by the dth panel. It is unanimously expected the crtc will be directed to begin a licensing process for dth providers.

In its submission to the Ministries of Industry and Heritage, the panel outlines the issues that have evolved in the satellite wars since the crtc issued the dth exemption order last August.

The paper comes out strongly in support of competition between Canadian dth services and suggests how the problems at the root of the debate might be tackled, but it ultimately throws them back at the commission to be thrashed out in a licensing process.

The ministries are expected to make their recommendations within the next two weeks.

The government needs to act within days, not weeks, in order for Power DirecTv to meet its business plan for an early launch and ably compete with Expressvu, says Joel Bell, chairman of Power DirecTv.

Similarly, Ted Boyle, president of Expressvu, says the exemption order was granted with the intention of stemming the potential impact of u.s.-based Primestar and DirecTv, which launched last year, as soon as possible. ‘I hope this process doesn’t derail that rationale,’ he adds.

The panel’s submission recommends a complete reversal of some of the conditions attached to the dth exemption order, including the criteria that limits dth providers to using Canadian satellites only.

The panel recommends that Canadian satellites be used for Canadian programming, but it stipulates that to the extent that cable operators are allowed to use foreign satellites to distribute specialty services and superstations, so too should satellite distributors.

The regulations for pay-per-view licensees spell out a 1 in 20 rule for Canadian content but don’t restrict the satellites on which programming can be received. In theory, ppv licensees can use u.s. satellites at any time to receive programs. Should the crtc accept this recommendation, it’s a large step towards clearing the way for Power DirecTv.

To prevent distributors from acquiring the North American rights to programming, the panel takes the view that all dth providers must commit to buying non-exclusive rights to programming as a condition of licence, ensuring that rightsholders will be able to make two or more sales.

To support Canadian programming, the panel also recommends that 5% of gross levies of all dth undertakings go into a Canadian production fund.

Both recommendations are sound beginnings for channeling support for Canadian producers through dth, but the issue of a North American broadcasting signal still needs to be addressed, says Atlantis Communications president and coo Kevin Shea.

‘I think it’s a good start. But I think we should avoid at all costs any future North American services. We don’t have to have u.s. superstations. We can do it here ourselves,’ says Shea.

Power DirecTv has committed to buying non-exclusive rights to programming, making the required contributions to a Canadian production fund, and obeying Canadian content rules, says Bell.

‘The panel said that they didn’t have the wherewithal to measure the magnitude of the potential market in the u.s. for Canadian programs on ppv, but that they saw it as a benefit the commission should note.

‘The ppv world is just like the video world – you can put it on the shelf, but you can’t force anyone to buy it. It can’t be regulated in the video business, but in the broadcasting world I can make sure it’s on the shelf, that it has the shelf space, the promotion, and the visibility that gives it the best shot at success.

‘That technology is here, that shift is taking place; the panel’s saying let’s make sure we do this with Canadian content rules intact,’ Bell says.

While the licensing process gets underway, there are other hurdles ahead of a launch from either provider. Negotiations for distribution deals are just beginning between Canadian broadcasters and both Expressvu and Power DirecTv. Rates still need to be carved out, says Shea.

‘The underlying assumption is that rates for services on dth will be the same as those charged to the cable companies, and I don’t know if that’s necessarily true. There’s a lot yet to be decided.’

So too, say the broadcasters. To the question of how advertising rates would operate on the CTV Television Network if it is up on a dth service, ctv network president John Cassaday says no one from either service has approached ctv about being a part of the package, and until they do, any specifics about how business will work is pure speculation.

Cassaday points out there isn’t a standard set for advertising rates for private broadcasters on a dth service. In the u.s., nbc, abc and cbs aren’t a part of satellite service packages, mostly because they want to protect their affiliates from losing local advertising revenue to the network with national reach via dth, he says.

‘There are some complicated issues that need to be addressed before ctv goes up on any satellite service,’ Cassaday concludes.