The Canadian Cable Telecommunications Association is calling on Ottawa and the CRTC to encourage investment in broadband networks in order to avoid the creation of monopolies and to encourage broadband-focused production.

CCTA president Michael Hennessy says that if telecommunications monopolies are allowed to form around broadband platforms, Canadian consumers expecting a personalized and flexible experience could be reluctant to get involved with the emerging technologies. He believes government investment will lead to a healthy, competitive environment for suppliers and content providers, ultimately benefiting consumers.

‘We have to have more competition amongst the Canadian services if they are going to innovate on a program level,’ says Hennessy. ‘We have to stimulate the production community that is going to help ultimately differentiate the product.’

The CCTA is preparing to appear before the Telecommunications Policy Review Panel in Ottawa, intending to plead its case about developments in telecommunications and competitiveness in the broadband sector.

‘We have to look at broadband as something that is transforming telecom and broadcasting,’ Hennessy says. ‘That is really its essence.’

This all comes at a busy time for the CCTA, which just released its annual report for 2004/05. The association changed the ‘T’ in its name from ‘television’ last year – to reflect some of those same changes in the sector – and the new focus is evident in the 28-page report. Television is barely discussed until page nine.

According to the CCTA, roughly 60% of Canada’s 12 million TV households, or 7.3 million, have cable. Just over two million have digital cable, a mighty jump from 1.4 million in ’03 and 1.2 million in ’02.

Revenues were up slightly in 2003 – the most recent year for which stats are available – to $4.4 billion. Cablers are gaining digital subscribers year-over-year but are losing market share of subscription TV to DTH satellite. Cable’s share of subscription TV was 76.6% in ’04, down from 77.5% in ’03 and 80.1% in ’02.

Although 97% of Canadians with telephones still use the traditional telcos, digital phones and IP-based services are poised to create a more competitive marketplace, according to the report. Hennessy says the CCTA applauds the CRTC for its recent ruling that VoIP will be handled as a telephone service.

The report also showed that in the last five years, the Canadian cable sector has spent more than $7.5 billion in delivering more advanced media services on ‘cutting-edge platforms’ to meet the evolving needs of its subscribers.

Hennessy says he can see a time in the near future where producers and end users can work directly with each other, and the costs of storage and distribution will be lessened for content providers, thanks to IP and other emerging technologies.

‘We are creating models for a lot of Canadian product that may not have been sustainable under the old distribution models,’ he says. ‘There is huge opportunity in the technology for producers and cable companies if we can learn to harness it.’

The report also shows that a significant customer base is taking advantage of services such as video-on-demand, PVRs and digital phones via the surge of digital cable. Of the 2.1 million digital cable users, 37% have PVRs, 24% use VOD, and 7% have a digital phone.

Hennessy also sees a great possible future in high-def television, and appreciates the recent rollout of HD channels. But he calls the supply of HD programming ‘abysmal.’

‘People are spending a lot of money on the equipment, and… they don’t see the value because of a lack of content. That has to be fixed,’ says Hennessy.

A recent study performed by The Movie Network and Ipsos-Reid found that 41% of Canadians were reluctant to adopt HD set-top boxes because of the lack of content. This is in line with CCTA’s findings, says Hennessy.

He warns that unless a competitive force can be created that will move people to make investments in HD, it will ‘hobble along’ in Canada and spawn an HD black market.

-www.ccta.ca