CCR Newsmakers

The first stage of the CRTC's digital specialty service licencing process is now complete. Approximately 450 applications were filed for new services, more than any previous licensing call. The current licensing process represents another shift in the commission's evolving regulatory approach. First off, there are two categories of license. Category 1 licences will receive guaranteed access to the digital delivery platforms of broadcast distribution undertakings (BDUs). In this aspect, Category 1 licences will be treated like previous specialty licensees (except that carriage will be restricted to digital homes - which includes all DTH and most MMDS homes, but only about 10% of cable TV homes). And like previous licensees, Category 1 licensees will have to commit to Conditions of Licence which demonstrate an obvious and substantial furtherance of Broadcasting Act objectives. Category 2 licences will not have guaranteed access to BDU's. Instead, they will have to negotiate with BDU's in order to receive carriage. Category 2 licensees will also be open to direct competition with other Category 2 licensees. Although other elements in our broadcasting system already face direct competition (at least in theory), direct competition is something new for specialty services. The distinction between Category 1 and Category 2 licences may turn out to be not as significant as first appears. Both types of licensee will still have to negotiate for how the service is packaged, the wholesale rate (although Category 1 licensees clearly have more leverage), promotional responsibilities and other carriage conditions. In the end, the prospect of less daunting Canadian content commitments and the unlikelihood of limiting competition in the future for any specialty service seems to have made Category 2 licences more attractive than Category 1 licences - about four times as many Category 2 applications were filed than Category 1 applications. Some engaging concepts have been advanced in the new applications. From work to play, from jazz to backpacking, from pets to the Net, from jazz to pucks, the array of ideas is sweeping. There is a good chance that many of these concepts will be tested in the competitive market. For a few dollars a month, many of these channels may find an audience which can support the investments which are required. Add in growing revenues from related interactive services, and the Canadian programming landscape begins to take on an entirely new look. With this process, the commission has strengthened the role of competitive forces within the Canadian broadcasting system. They have streamlined the application process by setting out relatively clear and precise criteria for receiving a Category 2 licence, thereby minimizing both administrative burden and the uncertainty regarding whether a licence will be granted. They have also revealed how broadcasting regulation will be conducted in the future. But it is not just regulation that has changed. The day to day (or quarter to quarter) workings of the broadcasting market have also undergone a fundamental change. Where once the notion of a failed specialty service would have been alien, we can now expect casualties. Just like the real world. The last of the old-style hearings for specialties will take place this August. With hundreds of applications, expect summer vacation to be an out-of-body experience for both commission staff and the army of lawyers and consultants representing the applicants. Just like the real world. Dr. Gerry Wall is president of Wall Communications Inc, an Ottawa-based consulting company, and publisher of Decima Publishing Inc.

CCR Newsmakers

Broadcast | April 13, 2000

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