CRTC willing to give DTH distributors greater freedom to compete in MUDs

The CRTC appears ready to let Canada's two satellite TV companies compete on level footing with cablecos in what many believe to be the holy grail of the broadcast distribution business - selling bulk service to apartment buildings. Wholesale marketing to landlords is big business throughout North America, and one that has been dominated by cable operators. In a public notice released Aug. 24, the commission suggests that Bell ExpressVu LP and Star Choice Communications Inc should be allowed to sell a package of TV services in bulk and bill large building owners accordingly - PN 2001-96. Specifically, the CRTC states that it is "of the preliminary view that the public interest would best be served by permitting cable and DTH distributors to engage in the practice of bulk billing on the same basis." Chris Frank, VP of programming and government affairs at Bell ExpressVu, says changing the rules makes sense. "I don't think that it was anticipated (in licensing DTH) that the MUD (multiple unit dwelling) marketplace would be so vital to the wellspring of competition. But obviously with 30 per cent plus of Canadians living in multi-unit apartments, it is the next big battle ground." Rogers files complaint The regulator issued the public notice in response to a complaint filed in May by Rogers Cable Inc, alleging that Star Choice had breached the terms of its licence by entering into bulk billing arrangements with 12 MUDs in the Toronto area. But rather than crackdown on Star Choice for an apparent licence violation, the commission decided to look at making the rules equal for all broadcast distributors. Under the current rules, DTH licensees must generate their revenues "entirely from subscription fees," and sell service "exclusively to individual subscribers." Since the building owner was responsible for selecting the services that would be available and paying the distributor for those services, Rogers argued that Star Choice was not providing programming to "individual subscribers." But Star Choice complained that the restriction, if maintained, "would unnecessarily discriminate between DTH and terrestrial broadcasting distribution undertakings and stifle the development of competition, contrary to the pro-competitive policies of the commission and the government…" In responding to the complaint, the CRTC concluded that Star Choice would be abiding by the rules if it retained control over the authorization of services to the tenants, and established separate billing accounts with the tenants for additional services such as pay-per-view, specialty and/or ethnic services. In defending its industry's use of the practice, Rogers said cablecos tended to enter into bulk billing in monopoly environments "to provide a discounted service offering to subscribers residing in MUDs." But Paul Armstrong, director of government and regulatory affairs at ExpressVu, noted that creative new marketing arrangements could be established by DTH distributors if they were allowed to bulk bill. He said an all-digital technology would allow DTH distributors to offer a "bifurcated billing arrangement, where one party (e.g. the management or condo/strata council) could pay for a set of services, while giving the end user options for additional services or packages." Frank says it is an option that ExpressVu would consider if the rules are changed. First-phase comments in the process are due by Sept. 21, with the deadline for replies being Oct. 12.

CRTC willing to give DTH distributors greater freedom to compete in MUDs

Broadcast | August 30, 2001

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