Calgary MUD seeks national cable licence to round out telephone, Internet bundle

A Calgary-based rental property owner is seeking regulatory approval to become a new breed of cableco that would compete with established players in the lucrative multiple unit dwelling (MUD) market. Suite Systems Inc has applied for a single Class 1 broadcast distribution undertaking (BDU) licence serving 17 communities across Canada. The CRTC usually requires companies to file separate applications for each market they want to serve. The application will form part of a larger public hearing scheduled for next week in Hull PQ, although there will be no appearing intervenors. Suite Systems (formerly called Board-walk Tele.com Inc) is a subsidiary of Boardwalk Equities Inc, which owns and operates 25,000 high rise apartments, townhomes and other residential units in 11 cities in Alberta, Saskatchewan and Ontario. With residential property holdings in excess of 18.8 million square feet, Boardwalk says it’s the largest apartment owner in Canada. If a licence is awarded, the company will begin offering service to its tenants in Calgary, Edmonton, Red Deer, Fort McMurray, Grande Prairie, Airdrie, Banff, Regina, Saskatoon, Winnipeg, Windsor, London, Kitchener, Toronto, Hamilton, Kingston, and Ottawa. President Sam Kolias says they’ll also target MUDs that Boardwalk doesn’t own, as well as single family homes. The company plans to spend $50 million on an overbuild distribution system for IP-based digital cable TV, including headend, transmission, routing and other equipment. The service bundle will also offer Internet and local telephony, starting in Calgary and Edmonton. On June 16, the CRTC approved its application to become a competitive local exchange carrier. Considering Suite System’s extensive holdings in the MUD market, its application poses a real competitive threat to one of traditional cable’s core revenue streams. Opposing the application on that basis, however, isn’t realistic in today’s pro-competition environment. Consequently, the cable industry opted for another route. Of the six interventions filed in response to the application, only the Canadian Cable Television Association (CCTA) asked the CRTC to reject the bid – at least for the time being. It’s only gripe, it seems, is that Suite Systems did not follow commission protocol by filing separate applications for each of the communities it plans to operate in. The CRTC rejected a similar bid by NBTel for a province-wide cable licence. "Although the proposed BDUs use Internet Protocol (IP) technology ... there is nothing about the design of the undertakings that supports the issuance of a national BDU licence or any other significant departure from the established regulatory treatment of other terrestrial distributors," CCTA president Janet Yale writes in an August 24 intervention. She goes onto say that, "Issuing a national licence to Suite Systems would be like issuing national Class 1 licences to Rogers, Shaw, Cogeco and every other cable MSO that currently holds multiple BDU licences to operate systems in different parts of the country. While this might be administratively convenient, it would not be appropriate without full consideration of the regulatory implications..." In correspondence between CRTC staff and Suite Systems, the applicant indicated that it would be willing to accept multiple licences instead of a single national licence. Among those supporting Suite Systems’ application is Calgary councillor Jon Lord, who paints the company as a compassionate landlord, citing its history of voluntarily providing rental subsidies to lower income tenants. Lord says the company also waives rental increases to customers who can demonstrate financial hardship: "Suite Systems will give greater access to many in our community who are disadvantaged," Lord writes in his September 12 intervention. "By giving them greater access through the lower cost of cable, telephone and Internet services, Suite Systems will be reducing the ‘digital divide’ that separate many in our community from the new information age."

Calgary MUD seeks national cable licence to round out telephone, Internet bundle

News | 09/14/2000 4:00 am EDT

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