If there was ever an ideal time to take over as president and ceo of the Canadian Cable Television Association, January 1995 wasn’t it.

Negative option marketing, a concept now spoken of in hushed tones, had been used by Rogers to launch six new English-language specialties, effectively taking away services consumers loved and forcing them to spend more money to keep getting what they were used to. A surprise David and Goliath type battle erupted, with ample front-page news coverage of the unfavorable sort and furious customers manning the phone to cancel cable services.

Enter Richard Stursberg, most recently executive vp of strategic planning and external relations with Unitel Communications.

Former assistant deputy minister, telecommunications and technology and assistant deputy minister, culture and broadcasting for the Department of Communications, Stursberg was entering the cable fray full-time for the first time. A year later, setting aside the key issue of competition with the telcos for the moment, he’s willing to discuss the current topic of choice: new specialty channels.

While production is on schedule for The Cable Guy, time, and an ongoing mea culpa from the cablecos, has taken the fire out of the consumer backlash. Months of subscriber stroking has paid off with penetration for the specialties on a steady, albeit slow, incline and they’re now reaching 60% to 70% of subscribers.

But the wolves are at the door again, 40 new applications for specialty services armed with an avalanche of consumer research. In spite of a letter sent by the ccta to all applicants at the end of last year pointing out the scarcity of analog space and encouraging them to budget for digital, the majority have incorporated penetration projections dependent to a large degree on analog distribution.

Shaw Communications, Canada’s second largest cableco, came forward in the access hearing to say there may be five or more channels of analog capacity available for the new specialties, fueling the argument that based on their history, that assertions from the cable companies can’t be taken at face value.

A version of said history goes like this: three years ago they yell the Americans are coming, call for new Canadian services, then don’t have room for them come the first specialty licensing round. After pleading lack of capacity, Rogers and Shaw turn around and apply to have a batch of u.s. superstations added to the Eligible Services List.

This specialty hearing they said no analog space, but then some subsequently say they do have analog space.

Finally, Rogers and Shaw use their newly rebuilt analog systems to expand their pay-per-view lineups and distribute a whole new set of analog boxes early this year. Critics argue they should have waited and launched the nvod service with the new dvc boxes for which both companies have placed orders and the sales of which extended ppv and the licensees are supposed to drive.

Stursberg wasn’t a key player when the deathstar warnings first surfaced or part of the first round of licence applications, but his interpretation of events is straightforward.

‘What happened was the commission launched a bunch of new specialties and they’re all on. They’re on everywhere in the country, they’re doing well, penetrations are improving, and they’re pretty good services.’

At the access hearings, the ccta guaranteed the commission that new licensees, however many of them there are, will receive the same treatment.

‘The undertaking we made to the commission is that we’ll put them on. Where they’re going to be on is still a question.’

The possibilities for where are greater than on only the digital spectrum, says Stursberg, but the cablecos will need to see what’s licensed before they decide how to proceed.

‘We may have to build more analog, maybe regulate some to digital in some areas. Extra analog capacity may be necessary because we’ll need the holding space while we transfer to digital.’

Some licensees may, he says, launch on analog, pointing out that it’s possible that the cablecos could decide to cut their channels of ppv down to make room for new services. But before this happens, the cablecos have to know what services they’re working with.

‘Nobody’s ruling analog out. But people are saying, `What are we going to do about x?,’ and we say, `We don’t know. We don’t even know what x is, what the offers are, what’s going to be licensed.’ ‘

Stursberg takes the point that it’s been particularly difficult for applicants to grind out business plans without a vision for distribution, but points out that positive option makes penetration impossible to gauge.

‘I don’t know how big penetration will be. We’ve got all these broadcasters throwing their hands in the air and saying I don’t know what my business case is because I don’t know what penetration is. Well the answer in part is that penetration depends on how beautiful your service is.’

The answer also depends in part on being part of tiers reaching a substantial number of subscribers, a prospect diminished when non-broadcasting services and expanded ppv are taking up valuable space on the analog spectrum. To the point that applicants for specialties with viable business services may be denied a licence, have to wait to launch, or forced into substantial short-term losses while digital distribution rolls out at a snail’s pace, while lucrative ppv and shopping services rest easy on analog, Stursberg says the issue is one of supply and demand.

‘The problem is that everybody steps up at the access hearings and says `me, me, me,’ but we have to strike some sort of balance. We’re talking about a scarce resource and whether it’s the pay-per-view broadcasters, who are after all a licensed Canadian broadcaster just like the specialties, or the newspapers, specialized shopping services, there’s a lot of demand.

‘We’ve said priority should go to Canadian broadcasters. We’re continuing to give priority to specialty broadcasters but we think there should be some fair allocation for newspapers and exempt programming services as well as what’s licensed.’

Some allocation should not be perceived as excluding any of the new licensees, Stursberg stresses.

‘The history to date has been that everybody licensed gets on, so what is the complaint? Is it that they have fear that at some point in the future this will compromise the ability of new services to get on? We’ve said we’re going to deal with that and put them on. It’s hard to know how to respond to these things when everybody’s running around saying the sky is falling. ‘

As of gazetting, the ccta will begin consumer research and demand analysis of the applications and make recommendations to the crtc on the attractability of the individual applications. The ccta has been ‘very candid’ with its own members that the recommendations will not be ownership related. Speculation persists that the chosen ones will read like a list of what the cablecos will find space for, an idea Stursberg flatly denies.

‘As I recall last time, the ccta made recommendations on some services and the commission chose to license others, and they all got carried, so

‘Will the commission listen to our view? We hope so. Will they accept it? We don’t know. Will we carry them? Yes, we will. But I think that we want a guarantee is that the services people are going to be offered are the ones they really want.’

The bottom line is that the broadcasters and the cable companies are pursing the same goals, Stursberg concludes. ‘Willy nilly, we’re in this together. It’s in both our interests to have a good business. We’re going to have to work together, plan together, and go forward together.’

The cable companies, in the middle of putting together a Stentor-like consortium, are expecting to announce their plans at the beginning of April. AV