Cable vs. Satellite

1
Cable vs. Satellite

• The Role of the CRTC

2
Telesat Canada

• A Canadian public corporation formed in 1969 to
  deliver satellite services to Canadians
• ownership
• 51 Canadian federal government
• 49 Canadian telephone monopoly (Bell Canada)
• No development for a decade
• Federal government does not challenge interests
  of telephone companies

3
Cancom

• CRTC rules (early 80s) that TV signals be made
  available to remote regions of Canada
• Cancom Consortium of four private Canadian
  broadcasters formed in 1981
• André Bureau becomes president in January 1983
• Telesat satellites are used to send TV signals to
  regions of Canada beyond reach of cable
• Company loses money immediately
• Offers only four TV stations (3 English, 1
  French) eight radio stations (in 1983, 31
  policy)
• 500,000 monthly revenue 2 million monthly
  expenses in 1984

4
CRTC Cable

• In 1980s, cable had 60 penetration of Canadian
  households
• CRTC strategy is to deliver universal service via
  private broadcasters (Cancom)
• Establishes a pro-cable regulatory paradigm
• Cancom uses Telesat Canada satellites
• Sends TV to cable systems (cable companies become
  Cancoms customers)
• Direct to home (DTH) signals could be sent only
  beyond cables reach
• Cable customers provide revenue flow
• André Bureau becomes Chair of CRTC in October
  1983

5
Death Stars

• Direct TV a US satellite TV service
• In direct competition with cable services
• Benefits from 1992 FCC ruling preventing cable
  operators from withholding channels under their
  control from satellite competitors
• Canadian cable companies lobby CRTC in response
  to death star threat
• Direct broadcast satellite (DBS) service can beam
  signals all over North America
• Ted Rogers sings the blues

6
CRTC Death Stars

• CRTC regulation of 80 Canadian ownership makes
  Direct TVs signals illegal
• Canadian-owned Power Corporation Direct TV form
  Power Direct TV
• 80 owned by Power Corp.
• 20 by Direct TV

7
CRTC Death Stars

• Threat of competition to cable
• BCE WIC (Western International Communications)
  talk to Power Direct
• CRTC response
• BCE WIC licenses will not be renewed if talks
  continue
• Direct TV must use Canadian satellites to beam to
  Canadian homes
• Threat of more regulatory action

8
Death Stars Cable

• Cable Co.s strategy
• Develop a wholly cable-owned DTH satellite
  company
• DTH Canada created in 1994
• Controlled by cable companies (Rogers, Shaw)
• CRTC forces minority ownership on BCE WIC
• CRTC exempts DTH Canada from licensing fees
• Regulation no fees for companies using only
  Canadian satellites
• DTH uses Telesat satellites

9
The Dust Settles

• Anti-trust investigation forces Rogers Shaw out
  of DTH Canada
• BCE and WIC gain control of the company
• DTH morphs into ExpressVu
• Anti-competitive regulation by CRTC forces Power
  Direct TV out of Canadian satellite business

10
Canadian Satellite Service

• ExpressVu
• Controlled by telephone industry
• Cancom
• Controlled by cable industry
• Star Choice
• What was the role of the State?