February 5, 2003 Cabinet committee rejects Stornoway Communications’ petition to have CRTC reconsider CPAC decisionA request by Stornoway Communications to have Cabinet order the CRTC to reconsider its licensing decision of the Cable Public Affairs Channel (CPAC) has been rejected by a committee of Cabinet, sources tell Canadian Communications Reports. Stornoway contended that the changes granted, including expanded programming, made the cable-owned Parliamentary channel competitive with its Category 1 digital specialty television channel i channel in contradiction of CRTC policy (CCR, Jan. 30/03). The full Cabinet still must rule on the appeal. Supreme Court to hear CCTA’s appeal on pole access this monthThe Supreme Court of Canada will hear the Canadian Cable Television Association’s appeal of a lower court decision on access to electric utility poles on February 19. Canada’s highest court will decide whether the CRTC has the right to mandate access to poles and at what price. The lower court ruled that the CRTC didn’t (CCR Update, May 16/02). Bell ExpressVu launches i LotterySatellite TV operator Bell ExpressVu LP has officially launched its fifth subscription-based interactive television (iTV) service, i Lottery. Available to all Bell ExpressVu subscribers with interactive set-top boxes, the service on channels 275 and 175 on the iTV LaunchPad provides winning numbers for all national, regional and provincial lotteries across Canada. The service was developed in conjunction with ExtendMedia. iLottery also allows subscribers to generate random numbers to help play major lotteries. A free trial period runs for two months, and then subscribers will be charged 50 cents a month for the service. Bell ExpressVu subscriber growth strong in Q4, but much lower than last yearBell ExpressVu LP had strong subscriber growth in its 2002 fiscal fourth quarter ended Dec. 31, 2002, but subscriber additions were well below those achieved in the same period last year, according to financial results released by parent company BCE Inc. last week. Canada’s number one satellite TV provider and overall digital TV leader in terms of number of subscribers added 83,000 net subscribers in the quarter to end the quarter and fiscal year with just over 1.3 million subscribers. This compares to 139,000 net subscriber additions in the fourth quarter of 2001, which was a record for quarterly subscriber growth. Significantly, 69% of the net subscriber additions in the most recent quarter came from urban areas, a slight improvement from 67% in the fourth quarter of 2001. The satellite television operator’s urban customer base remained stable at 59% of total subscribers at Dec. 31. Overall, Bell ExpressVu’s subscriber base increased by 22%, or 235,000 in 2002, compared to 48%, or 347,000 in 2001. On the financial side, continued subscriber growth helped boost revenues by 32% to $176 million in the fourth quarter of 2002 from the same quarter last year. Full-year revenues grew 35% to $638 million. EBITDA losses for the most recent quarter improved by 39% to $43 million over the same period last year, and 23% to $147 million for the full year. Canadians have access to wide variety of ethnic services: CRTC reportCanadians have access to a wide variety of ethnic services in keeping with Canadian Heritage minister Sheila Copps’ goal of ensuring that the country’s cultural diversity is reflected on its airwaves, according to a report on ethnic services released January 30 by the CRTC. The report found that the ten largest ethnic groups in major markets were able to access programming directed to them. "Groups not being served in those markets represented 2% or less of the total population," the report found. Moreover, it noted that in many of the 16 smaller markets included in the study, some of the five analog ethnic services available in Canada were offered even though the ethnic groups targeted by these channels were very small.  There are four licensed over-the-air ethnic stations, six analog ethnic specialty channels, seven foreign-based ethnic services eligible for carriage in Canada, and 44 ethnic digital specialty channels that have been licensed (see list). As well, there are community channels on which ethnic programming is aired, and specialty audio services targeted at ethnic communities. Five of the analog ethnic channels – Telelatino, Fairchild TV, South Asia Television Canada Ltd. (SATV), and Odyssey – have broad distribution nationally, the report noted. The sixth, Talentvision, airing predominantly Mandarin programming, is on the analog dial in British Columbia and available digitally across the rest of the country. Five of the seven non-Canadian ethnic channels eligible for carriage in Canada have launched, with the U.S.-based Black Entertainment Television enjoying the widest coverage. Only a fraction of the 44 ethnic digital specialty channels that were licensed have launched. Rogers Cable Inc., which operates two over-the-air ethnic TV stations in Toronto, is the only distributor that is carrying any of these channels, according to the report. Rogers distributes 11 digital ethnic channels in 21 of the markets it serves, including Toronto, Ottawa and Guelph ON.  The CRTC report was based on a sample of 40 different-sized markets across the country during 2001. The sample markets included Halifax, Quebec City, Montreal, Ottawa, Toronto, Calgary, Vancouver and Victoria. Despite the plethora of options available for ethnic programming viewing and listening, Copps noted during her presentation to the Standing Committee on Canadian Heritage studying the Canadian broadcasting system that yet more needed to be done. Telesat inks deal with European manufacturer for construction of new Anik F satelliteTelesat Canada announced February 4 that it will use Astrium, Europe’s second-largest space company, to design and build a new satellite to be launched in 2005 to replace the Anik F1 (CCR Update, Jan. 22/03). The new satellite, Anik F1R, will carry telecommunications, broadcasting and Internet services. According to Telesat’s 2002 year-end financial report released January 30, the company posted net earnings of $56.3 million in the fiscal year ended Dec. 31, 2002. The satellite carrier also noted that one of its major customers continues to dispute the application of the contribution levy, a service charge on telecommunications revenues used to subsidize local telephone service in rural and remote areas of Canada (CCR, Aug. 15/02). Telesat stated that it "is pursuing various avenues in order to enforce payment."  Corrections, clarifications made to Canadian Television Fund guidelinesThe Canadian Television Fund (CTF) has corrected a few errors and further clarified some sections of its 2003-2004 application form. The CTF has also released documents that provide descriptions of the standard practices that will be followed by the Equity Investment Program and the Licence Fee Program of the fund when reviewing applications.  CRTC gets Montreal radio hearing underwayThe CRTC began its hearing into Montreal radio station applications February 3 that is expected to last three weeks. At the hearing, various proposals for radio services for Montreal, Saguenay, Sherbrooke, and Trois-Rivières are being considered as well as Astral Media’s request to amend the licences for radio stations it operates in Quebec. Also being considered are applications by Groupe TVA and Radio Nord Communications to acquire CFOM-FM, Radio Etchemin and certain AM radio stations in Quebec currently owned by Astral Media.  CRTC chair Charles Dalfen indicated in his opening speech that the commission would examine issues of cross-ownership, and the contribution of the objectives of the Broadcasting Act with regard to the Groupe TVA and Radio Nord proposed radio station purchases. Pierre Karl Péladeau, president and CEO of Groupe TVA parent company Quebecor Media Inc., told the hearing on February 4 that the company needed to add radio assets to remain competitive against other multi-platform media giants. He said that Quebecor wants to push the convergence model even further by adding radio stations to its existing print and broadcast properties. The question of media concentration was also raised when Quebecor sought CRTC approval to acquire Vidéotron and Groupe TVA (CCR, March 14/01). With the acquisition of Vidéotron and Groupe TVA, Quebecor had 31% of all advertising placed in media in the province, excluding TQS’ 4% share. Overseeing the hearing are Dalfen and commissioners Andrée Wylie, Andrée Noël, Joan Pennefather and Jean-Marc Demers. CRTC approves transfer of control of PPV sports/specials service to RogersThe CRTC has approved the transfer of the 80% control held by CTV Inc. in 3216195 Canadian Inc. to Rogers Broadcasting Limited (Broadcasting Decision 2003-28). 3216195 Canada is the licensee of a digital pay-per-view (PPV) sports/specials service and of a direct-to-home PPV sports/specials service distributed via satellite. Both are known as Sports/Specials Pay-Per-View, and have been operating since 1996. Rogers paid $22,243.82 for the services, which have been operating at a loss since inception. As a result of the transaction, Rogers will own and control 3216195 Canada. Producers conference begins today in OttawaThe annual conference of the Canadian Film and Television Production Association (CFTPA) begins tonight with a reception on Parliament Hill and continues February 6-7 in Ottawa. According to a speech given by CFTPA president and CEO Elizabeth McDonald late last month, the film and television industry seems to have reached a plateau, with exports down 14% to $2.3 billion in 2001-2002 from the previous year. McDonald also noted that Canadian drama or fiction production was down almost 20% in the past year.  The conference program includes a session on February 6 on the plight of Canadian drama, which will be moderated by broadcast veteran Trina McQueen, who has been hired by the CRTC to develop options and proposals to create new incentives for Canadian drama (CCR, Oct. 24/02). Other sessions include a look at the role of the public broadcaster, co-productions with France, and a debate on the challenges and opportunities facing cable companies and content suppliers. As well, the association’s annual state of the industry report will be released February 6. Hollywood producer/director Ivan Reitman gives the keynote address on the same day. The conference is sold out, with the maximum 600 delegates already registered.  Writers Guild, CFTPA announce tentative agreementThe Writers Guild of Canada and the Canadian Film and Television Production Association announced January 20 that they had reached a tentative agreement on a new 2003-2005 Independent Production Agreement (IPA). The agreement sets out minimum rates, terms and conditions for screenwriters working in English-language film and television production across Canada. The deal includes script fee increases of 1% in year one, 2% in year two and 2% in year three. The deal still needs to be ratified by the memberships of both organizations.  MTS expects to expand digital TV service to 40% of Winnipeg residents by year-endManitoba Telecom Services Inc. (MTS), through its subsidiary MTS Communications Inc., anticipates extending the coverage area of its digital television service to 40% of the city of Winnipeg’s 680,000 residents by the end of 2003, the company announced in its fiscal 2002 fourth-quarter and year-end financial report released January 30. Next Level Communications, which provides equipment to telephone companies including MTS to deliver bundled digital TV, high-speed Internet and voice services, has indicated that MTS’ digital TV service would reach 85% of the city’s residents by the end of 2004.  TV5 Québec Canada completes its reorganizationTV5 Québec Canada has completed its reorganization that began in August 2001 involving the transfer of the control of the television service’s signals to the U.S. and Latin American markets from Montreal to Paris (CCR, March 14/01). As a result of the reorganization, five positions were cut from TV5 Québec Canada’s Montreal office.  CRTC grants administrative renewals for numerous licencesThe CRTC has granted administrative renewals until Aug. 31, 2003 for numerous radio, television, cable distribution, multi-point distribution systems (MDS), Shaw’s direct-to-home pay-per-view programming undertaking, and other licences (Broadcasting Decision 2003-26). Among the television licences that received administrative renewals are Jim Pattison Industries Ltd.’s stations, Mid West Television Ltd’s stations and Norcom’s Kenora ON station.  Astral Media plans subscription video-on-demand serviceAstral Media is planning to launch a new subscription video-on-demand (SVOD) service that will be priced at $6 a month, president and CEO Ian Greenberg revealed during a conference call in January with analysts to discuss the broadcaster’s latest quarterly earnings. The service will consist of 100 films that will be changed every month. The company is also testing a pay-per-view VOD service with cablecos Rogers Cable Inc., Shaw Cablesystems and Vidéotron ltée. Both the SVOD and VOD services are expected to be launched commercially later this year.  Rural Newfoundland-based cableco gets broadband fundingThe Community Recreation Rebroadcasting Service Association (CRRS) will be receiving money under Industry Canada’s Broadband for Rural and Northern Development Business Plan Funding initiative. CRRS is one of 89 applicants receiving up to $30,000 to be used to develop business plans that must be submitted by May 22 for complete implementation funding. CRRS is based in Labrador City NF.  CRTC sets public hearing for April 8 in Quebec CityThe CRTC will consider a number of applications at a public hearing beginning April 8 in Quebec City. They include the cable distribution licence renewals of Vidéotron (Regional) Ltd. serving various communities, including Granby, Rivière-du-Loup, Saguenay, Sherbrooke and Sorel QC (Broadcasting Notice of Public Hearing 2003-2). Also on the agenda are an application by Télé Mag Inc. to operate a low-power French-language community television station in Quebec City and a licence application by Fondation Radio Enfant to operate a children and youth French-language channel in Ottawa ON and Gatineau QC. The deadline for interventions is March 14.  Nordicity Group officially announces re-launchThe re-launch of Nordicity Group was officially announced in a media release on February 3. Peter Lyman, one of the original founding partners of Nordicity and ex-partner at PwC Consulting, has re-established Nordicity as an independent firm providing strategy and business process solutions to clients in the public and private sectors (CCR, Nov. 7/02). It will continue its annual profile of the production industry for the Canadian Film and Television Production Association and has recently won competitive bids issued by Canadian Heritage.  Headline Media net loss declines as company continues to look for investors or buyersNet loss before interest, taxes, depreciation and amortization at Headline Media Group Inc. was $2 million for the three months ended Nov. 30, 2002, compared to a loss of $5.7 million for the same period last year, the company announced January 29. Operating expenses at Headline Media’s broadcast group were $0.1 million lower in the quarter due to cost reductions at its digital specialty channel PrideVision TV as well as reduced program rights with the termination of a program rights deal with Major League Baseball. The company announced that revenue for the broadcasting division, consisting of PrideVision and The Score, increased $0.7 million to $5.9 million for the quarter, compared to $5.2 million the prior year. Advertising revenue increased $0.2 million or 5.1% during the quarter compared to the prior year due to an increase in advertising for The Score, as a result of continued audience growth and improved ratings.  At Nov. 30, 2002, The Score had 5.2 million paying subscribers and PrideVision had 21,000. Net loss before interest, taxes, depreciation and amortization for the broadcast group during the three months was $1.4 million, compared to $4.6 million in the same period the previous year. The company, however, is still on shaky ground, and continues to pursue "alternative financing." Headline, however, notes that "No agreements with potential lenders or investors have been reached yet and there can be no assurance that such agreements will be reached." 2003 TV schedule for Blue Jays releasedRogers Sportsnet and TSN will broadcast a combined 145 Toronto Blue Jay games during the 2003 season. Rogers Sportsnet, which is owned by Rogers Communications Inc., will broadcast 120 of the games, with TSN carrying the remaining 25 games. Seventeen games will be webcast in either audio or video format, with all video webcasts also available on the Major League Extra Innings package on Rogers digital cable. Cinar announces settlement with shareholdersIn a lawsuit update, Cinar Corp. announced January 24 that an agreement in principle will give US$25 million to class action claimant shareholders in Canada and the United States. The company’s contribution to the settlement amounts to about US$14.6 million. INTERNATIONAL NEWS BBC to launch new digital channel BBC THREEThe British Broadcasting Corp. launches its new digital channel, BBC THREE, on February 9 aimed at people in their 20s and 30s. Part of its conditions for operating is that 20% of its content be supported by interactivity. In its launch week, the BBC says that 91% of broadcast hours are "specially commissioned" for BBC THREE, against a commitment of 80%. As well, 90% of the schedule must be made in Britain. The first week of programming will include episodes of the soap opera EastEnders before the programming is broadcast on BBC1. But the show will not premier permanently on the new channel, which replaces BBC Choice. FCC budget pegged at just over US$280 millionU.S. president George W. Bush has proposed a budget for the Federal Communications Commission (FCC) for 2004 of just over US$280 million. A complete copy of the FCC’s budget is available here.  Bush moving ahead with analog spectrum taxU.S. president George W. Bush’s administration is pushing ahead with plans to tax commercial television stations for not converting to digital television by Dec. 31, 2006, according to Multichannel News. The president’s 2002 budget included new lease fees on television broadcasters for using the "analog spectrum." The tax was delayed but the U.S. government is now reportedly looking at moving ahead with it. The fee is similar to the one proposed by the Clinton administration and would involve the Federal Communications Commission (FCC) charging broadcasters for using the electromagnetic spectrum for analog television broadcasts. Bush’s budget assumed the new fee would generate $200 million annually from 2003 to 2006, and would decrease annually between 2007 and 2010 as broadcasters relocated from analog to digital.