B.C. entrepreneurs want to bring cable-to-cable competition to Whistler

Two British Columbia entrepreneurs are hoping to bring competition in the cable TV market to the upscale resort town of Whistler BC. They have applied to the CRTC for a Class 2 broadcast distribution undertaking licence for the area, which is already served by Whistler Cable Television Ltd. – Broadcasting Notice of Public Hearing 2002-8. While companies such as Suite Systems Inc., Novus Entertainment B.C. Ltd., and VDN Private Cable Inc. have initiated cable-to-cable competition in Canada, they have done so in large urban markets and targeted multiple-unit dwellings. The Whistler case represents an evolution in the development of a competitive broadcast distribution market. Backed by $1 million in private financing by one of the partners, David Reid, the pair tells the CRTC that they would be prepared to launch the new cable service within six months of getting regulatory approval. The cable system would be operated under the numbered company 632685 B.C. Ltd., which is jointly owned by Reid and his partner, Richard Hazell. In their CRTC application, Reid and Hazell project acquiring 700 subscribers in year one, reaching 1,400 in year two, and 1,600 in year three. They anticipate a subscriber growth rate of 10 per cent for years four and five, and five per cent growth in year six. Reid was on vacation in Europe and could not be contacted to comment on the bid to enter the cable business in an area already served by an incumbent cable operator. Hazell declined comment, saying he was responsible for the technical side of the operation. But the pair will likely build on an unlicensed Class 3 cable company they have acquired in Pemberton BC, which is close to Whistler. In their application, they state that they are targeting a service area of 7,500 households – 5,000 of which are already served by Whistler Cable. 632685 B.C. plans to hire one technician and one customer service representative (CSR) in year one, while adding another half-time CSR/technician in year two. As well, it anticipates having two volunteers rotate between camera, editing and announcement details. All other services will be outsourced, including the large-scale builds and expansions, and other human resource requirements. The company anticipates spending $80,000 on reception equipment, $650,000 on distribution equipment, and $15,000 on studio equipment. Reid and Hazell tell the CRTC that local programming would consist of a small studio location, and include coverage of outdoor activities, such as skiing and mountain biking, and local arts festivals. The applicants propose charging $25 for their basic cable package consisting of 33 channels, and there would be an installation fee of about $69. According to its web site, incumbent Whistler Cable charges $27.30 for a basic package of more than 25 channels. In response to follow-up questions by the CRTC, Reid says he has verbal agreements with Canadian specialty channels CTV Newsnet, Rogers Sportsnet Pacific, Headline Sports, Outdoor Life Network, and Canadian Learning Television to include them in the basic cable package. He lists another 32 channels to be included in discretionary tiers. None of the new diginets appear to be included. It’s not clear whether 632685 B.C. plans to deploy digital cable, which is offered by Whistler Cable. No executives at Whistler Cable had returned calls at press time for comment on the possible impending competition in the cableco’s market. Interested parties have until August 23 to respond to the application. A public hearing on the item has been set for September 17 in Toronto.

B.C. entrepreneurs want to bring cable-to-cable competition to Whistler

Broadcast | July 18, 2002

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