Category 2 licensees lose bid to take away satellite transponders from Star Choice

The CRTC has sided with Star Choice Communications Inc in a heated dispute over satellite transponders, and in doing so, prevented three new digital TV licensees from becoming their own carriers. In Order 2001-133 released Monday, the commission said it wouldn’t allow Telesat Canada to take back four Anik F1 transponders from Star Choice, and re-assign them to Netstar Communications Inc, Chum Limited and Alliance Atlantis Communications Inc. It will allow Telesat to keep only one of the four transponders, but the capacity can’t be used for any new digital services. Telesat appeared to have a contractual right to ‘claw back’ four transponders from Star Choice. What was contested, however, was whether or not the transponders could be used to launch new TV services. Star Choice argued they couldn’t, and the CRTC agreed. The commission also wanted to ensure that all Category 2 digital channels get a fair shot at distribution. "While there can be no guarantee that Star Choice’s distribution decisions will be found satisfactory by all, the order that Star Choice has applied for would place the Category 2 services of CTV, Chum, and Alliance Atlantis on a comparable footing with other Category 2 services in negotiating for carriage." It goes onto say that, "This approach, in the commission’s view, would better encourage the provision of a wide range of programming for subscribers." Star Choice filed a Part VII application under the Telecommunications Act to override a private contract that appeared to give Telesat Canada the right to claw back four transponders. NetStar, Chum and Alliance Atlantis wanted to use the capacity to launch Category 2 digital channels (CCR Dec. 21/00). Peter Miller, VP of business and regulatory affairs at Chum Television, doesn’t understand the CRTC’s rationale. Chum currently owns a transponder that it uses for services it already has up-and-running. "It’s very depressing. Chum has always owned transponders. We saw the opportunity a couple of years ago to be masters of our own destiny by owning additional transponder capacity, and we’re very disappointed and very shocked (by the decision)," he says. He adds, "The fact that three companies saw the potential shortage of capacity and availed themselves of long-standing legal rights to get that capacity was an indication of the foresight they held in anticipating a new competitive environment. For the commission to say ‘no’ to that and give all the power to the distributor and not allow any services to have any leverage whatsoever to me is just incredible. We don’t get it." CRTC commissioner Andrew Cardozo, in a dissenting opinion, states, "These program providers (if the clawback were allowed) and any others would have a competitive marketplace in which to purchase their required space segment for their new Category 2 services, without any distributor being in a monopolist or controlling gatekeeper role." He points out that "the reason for the clawback right was to allow customers who choose not to do business with Star Choice the ability to obtain Ku-band space or purchase a transponder directly from Telesat." The CRTC says the decision was made necessary due to limited Ku-band satellite capacity on Anik F1, but that it would "not normally distinguish between distributors and programmers in the allocation or use of such capacity." It notes the launch of Anik F2, expected to occur in two years, should ease the shortage in satellite capacity.

Category 2 licensees lose bid to take away satellite transponders from Star Choice

News | 02/14/2001 5:00 am EST

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