Rogers Communications is using its increased analog capacity to launch 10-15 new channels of pay-per-view programming this month in parts of Toronto, another move likely to rankle the 44 new specialty service applicants who have been told by Rogers and the Canadian Cable Television Association that there is no analog space available to distribute the winning services.

The question of how many available channels the cable companies have at their disposal and which services will have access to them is an issue that has grown legs since Rogers and Shaw Communications pleaded a capacity shortage at the last round of specialty licences but then applied to the crtc for licences to distribute a package of u.s. superchannels late last year. The commission will wade into the fray Feb. 5 when the access hearings begin in Hull, Que.

According to Rudi Engel, executive vp of Rogers Cable tv, Rogers has already launched an expanded lineup of Viewer’s Choice ppv in Vancouver and will launch to key areas in Toronto by the end of January and through February. The offering will increase the number and frequency of movies offered and move nvod closer to vod, he says.

‘We’re increasing analog capacity to try and stop the erosion of our ppv customers by the satellite services. Choice and control is what the consumer wants.’

Given that a national rollout hasn’t materialized for either ExpressVu or Power DirecTv, and may be farther away than anyone dreamed when talk of deathstars first surfaced, Engel admits the timeline has changed, but says eventually a competitive environment is going to materialize. ‘It’s just a question of what 12-month window we’re looking at and we have to be ready.’

Ken Stein, senior vp, corporate development and regulatory affairs with Shaw Communications, concurs. Shaw has expanded its analog capacity by 10 channels and is already offering an extended ppv package in parts of Western Canada. ‘We need to be able to test ppv, find out what the market is like and try to make the best strategic moves we can faced with imminent competition.’

But given the debate boiling over capacity, the cablecos’ priorities aren’t meeting with favor amongst the new specialty service applicants who spent the better part of December and January preparing business plans without clear tiering and penetration strategies to work with.

Juris Silkans, president of Life Network who’s co-pitching the application for hgtv, says executives on the hgtv application didn’t buy that the only available distribution network for the new services would be digital, which is in turn dependent on the delivery of dvc boxes.

Rogers was left out of the equation, but hgtv is budgeting for a 1.7 million penetration on analog with an element for digital carriage included projecting penetration between 100,000 to 150,000 homes.

‘But basically, everybody was just trying to guess what would happen,’ says Silkans, adding that rollout of the digital boxes is key to digital distribution and the timing on a national rollout for dvc is unknown.

‘As I understand it, less than 200,000 of those boxes have been ordered. In a cable universe of more than eight million subscribers, I’m finding it kind of useless, and absolutely I can’t see any possibility for a big rollout before the year 2000. If you’re a regular human being already getting cable, why would you buy a box? I’d wait until it was the only way to get television.’

CanWest Global Communications is pitching Prime tv, Kids tv and Mystery Channel, and CanWest chairman and ceo Izzy Asper greets the idea that there’s a shortage of capacity with some skepticism.

‘What maybe they mean is capacity for Canadian services. They’d rather write a cheque once a month to Discovery or a&e instead of having pesky Canadian services underfoot. There may not be the will to spend the money to create infinite capacity by developing and distributing the dvc boxes, but capacity is just a question of the cable industry investing the capital to unlock it.’

ccta president and ceo Richard Stursberg was unavailable for comment, but Engel says the broadcasters can expect the cable companies to order all the dvc boxes necessary to meet market demand. Rogers has an agreement in principle with General Instruments and will purchase the dvc boxes ‘according to what the market will bear.

‘If the applicants and their services can generate the demand, there’s no business interest for us in not buying them if the customers want them. There’s no disinclination on our part to do due diligence if the demand is there.’

Stein too says that the new specialties and dvc will exist in a symbiotic relationship. Shaw is allowing for the possibility that some of the new specialty licensees will be added to analog if they prove the market demand for it will bolster existing tiers. ‘But we need those new services to justify the cost of the digital box and say here are some new things on ppv.’

In the meantime, the cablecos reportedly have their hands full. Speculation is rampant that there’s disunity in the ranks of the three biggest cablecos, Rogers, Shaw and Le Group Videotron, which had committed to colaunching the first national computer access service when Rogers launched its own Internet access service, Wave, late last year. The national computer access service was to herald the first co-operative effort of the Canadian cablecos, which are reportedly putting together a national representation consortium.

Elizabeth Macdonald, president of the Canadian Film and Television Production Association, says the industry is suffering from the fact that the cable companies haven’t presented a national action plan and haven’t responded as an industry to the access issues on the table Feb. 5. The Cable Vision 2001 report projected that by mid-1995 there’d be 145 channels of capacity, more than half of which would be digital.

‘Okay, the technology isn’t there yet. But we want to know where it’s going. I have members interested in the evolution of the television industry and we have members with broadcasting licences. We’re concerned.’