CCR Update

March 5, 2003 Bell ExpressVu to add 76 new channels to its lineup Satellite TV distributor Bell ExpressVu LP announced today that it would add 76 new channels to its lineup this year. The additions include 11 new high-definition television channels, as well as more conventional and specialty channels. On the conventional side, the satellite TV distributor will add 25 local conventional TV channels (11 French-language local channels; 11 English-language local channels; three over-the-air multicultural channels, including Rogers Broadcasting’s OMNI.2 and the CanWest Global Communications-owned CJNT in Montreal). On the specialty and pay side, Bell ExpressVu is adding 29 English-language digital specialty channels (including Leafs TV, Stampede, the Green Channel and seven additional pay-per-view channels); five French-language channels (including Euronews, Paris Première and three additional pay-per-view channels); and six third-language services (including ATN Alpha Punjabi and TV Polonia). "Bell ExpressVu has led the way in choice and value in programming and we’re now building on that offering with more of what Canadians want in their television -- more high definition TV, more interactive TV and more local and international programming," said Bell ExpressVu president Timothy McGee at a media conference held in Toronto, which was linked via live satellite feed to Vancouver, Ottawa and Montreal. Telesat Canada still unable to determine cause of power malfunction on Nimiq 2Telesat Canada says it will be several weeks before the cause of a power malfunction on its new Nimiq 2 satellite can be pinpointed. The Lockheed Martin-manufactured satellite experienced a power failure on February 20 that momentarily knocked out several of its Ku-band transponders, temporarily affecting satellite TV distributor Bell ExpressVu LP’s service. At the height of the malfunction, only 24 of 32 Ku-band transponders were operational. While Telesat and Lockheeds’ teams investigate the power failure, all traffic on the Nimiq 2 has been transferred to Nimiq 1, which was drifted to the 91 degrees west orbital slot from its previous slot at 82 degrees west after the launch of Nimiq 2. For an in-depth story on the matter, see the March 4/03 issue of Canadian Communications Reports affiliate publication Report on Wireless. CRTC tells Vidéotron, Cogeco to carry TV5 on digital basicIn granting TV5 Québec Canada a five-year licence renewal, the CRTC has reminded Vidéotron ltée and Cogeco Cable Inc. that they must distribute the French-language international channel on basic cable, regardless of whether subscribers receive it on analog or digital (Broadcasting Decision 2003-77). TV5 had noted in the licence renewal proceeding that although it was a dual status service, neither cable distributor included it in its digital basic package in the Francophone markets of Quebec, even though it had not requested TV5’s permission. A dual status service must be included in the basic package unless the channel agrees in writing to be carried on a discretionary tier. TV5 is carried on Vidéotron and Cogeco as part of various discretionary tiers. "…As is currently the case for certain Vidéotron and Cogeco subscribers, those who decide to subscribe to the BDU’s (broadcast distribution undertaking) digital service only must receive TV5 as part of their digital basic service," the CRTC said. The issue was raised after Quebecor Media Inc., on behalf of subsidiary Vidéotron, asked the CRTC to take advantage of the licence renewal cycle to make the costs of specialty channels more affordable. Quebecor made a similar argument when Vision TV applied for a wholesale rate increase last year (CCR, July 4/02). The CRTC, however, ruled that "the renewal of the licence for the TV5 specialty service is not the appropriate setting to deliberate over these kinds of issues." Some of the issues are expected to be considered in the CRTC process on the establishment of rules to govern the distribution of specialty services on the basic service of all-digital cable systems (CCR, Feb. 28/03, Aug. 29/02). In the licence renewal decision, the commission also granted TV5 its request to base spending on Canadian programming as a percentage of revenues rather than as a set yearly amount. At least 40% of its gross revenues must be spent on Canadian programming (CCR, July 18/02). A condition of licence also requires TV5 to devote at least 15% of its programming schedule to the distribution of Canadian programs during the broadcast day and during the evening broadcast period, and to air at least 104 hours of first-run original Canadian programs during each year of its licence. With the restructuring of TV5 Monde (CCR, March 14/01), operating out of Paris, the CRTC also considered whether TV5 Québec Canada continued to retain "full and complete" responsibility for managing, programming and distributing TV5’s signal in Canada. After analyzing the agreement signed between TV5 Monde and TV5 Québec Canada, the CRTC found that TV5 Québec Canada "does retain effective control over its programming schedule and the procurement of international French-language programming." Digital high-definition version of Citytv launches over-the-airCityHD, the digital high-definition (HD) version of CHUM Ltd.’s Toronto flagship station Citytv, launched over-the-air on March 3. The signal is available to all residents of the Greater Toronto Area on channel 53. The channel launched in January on Rogers Cable Inc. (CCR, Jan. 16/03), and is now also available on Bell ExpressVu LP. It is the first over-the-air digital television channel to be licensed in Canada. But so far, little of the content aired on CityHD has actually been in high-definition because CHUM has found it difficult to secure HD programming (CCR, Feb. 28/03). Revenues down, expenses up slightly at private television networks in 2002Revenues by Canada’s private television networks were down 0.7% to about $1.89 billion in 2002 from $1.9 billion the previous year, while expenses rose 2.6% to $1.63 billion from $1.59 billion, according to a CRTC report released February 27. The CRTC’s annual statistical and financial report on Canadian television shows that both revenues and expenses for private television remained essentially constant between 1998 and 2002. Over the five-year period, revenues grew by 3.6% and spending by 4.5%. The report also revealed that private broadcasters spent a total of $517.2 million on Canadian programming and $499 million on non-Canadian programming in 2002. At $290.7 million, news accounted for the largest spending on Canadian programming followed by drama at $77.2 million. Most of the non-Canadian programming spending went to drama, which accounted for $442.9 million. The report also includes data from the Canadian Broadcasting Corp.-Société Radio Canada. Cable giants request complete removal of foreign ownership restrictionsThe heads of Canada’s largest cablecos told the House of Commons Standing Committee on Industry, Science and Technology on February 26 that foreign ownership restrictions for cablecos should be completely eliminated. Appearing with Rogers Cable Inc. co-CEO and chair John Tory, Shaw Communications Inc. CEO Jim Shaw, Cogeco Inc. president and CEO Louis Audet, Janet Yale, president and CEO of the Canadian Cable Television Association, said: "Canada is out of step with its major trading partners in limiting foreign investment. Our independent research shows neither the U.S., Europe, Australia nor Japan limit investment in cable companies. These countries recognize that investment in cable networks results in more competition and innovation. We think it is time Canada aligned its policies with those of other developed nations." The Industry committee’s hearings on foreign investment restrictions in the telecommunications sector wrapped up last week. The committee, which heard conflicting opinions on the subject including from broadcasters (CCR, Feb. 13/03), is scheduled to deliver its report to Industry minister Allan Rock by the end of March or early April. The Industry committee is expected to recommend the loosening of foreign ownership restrictions for telcos, but it remains to be seen whether cablecos will get the same treatment. Increased advertising revenue buoys total revenue at Alliance Atlantis’ broadcast divisionA 48% increase in advertising revenue in the third quarter ended Dec. 31, 2002 over the same period a year earlier fueled a 26% rise in total revenue at Alliance Atlantis Communications Inc.’s operating channels. Revenue for the operating channels, which are part of the company’s broadcast division, rose to $44.8 million in the third quarter from $35.5 million in the same period a year earlier, the company reported in financials released February 28. On a "same store" basis, advertising revenue increased 39%. Revenue from the company’s seven digital specialty channels, classified as developing channels, was $4.3 million in the quarter, compared to $2 million in the same quarter the previous year. The diginets posted an EBITDA loss of $4.9 million, compared to a $5.4-million loss in the third quarter a year earlier. A writedown from $27.3 million to $3.2 million on the company’s investment in Headline Media Group Inc. contributed to a net loss for the entire company for the third quarter of $11 million. Alliance Atlantis earned $20.8 million in the same period a year earlier. Mainframe Entertainment records $3-million loss in Q3Vancouver-based Mainframe Entertainment Inc. recorded a $3-million loss in the third quarter ended Dec. 31, 2002, compared to a loss of $2.4 million in the same quarter a year earlier. "With the appointment of Rick Mischel as Chief Executive Officer, the recent retirement of the debt, and the ongoing overhead reductions, we remain enthusiastic and expect to improve upon this year’s results as we prepare for fiscal 2004," Mainframe CFO George Lawton said in a media release. The company noted that it would produce the third animated Barbie direct-to-video product and deliver 13 episodes of a Spider-Man television series. NFB increases funding to $1 million to emerging filmmakers of colour The National Film Board has increased its commitment to $1 million in the second year of its Reel Diversity Competition (CCR, May 23/02). The competition gives five emerging filmmakers of colour the opportunity to make a 40-minute English-language documentary. Each filmmaker (one from each of five regions – B.C., Western Canada, Ontario, Quebec and Atlantic Canada) will receive $200,000 to make a documentary. The deadline for applications is April 4, with the competition open to Canadian citizens from visible minority groups only. CRTC introduces new electronic broadcasting application and intervention formsThe CRTC is using a new version of the electronic broadcasting application form as well as a new intervention form (Broadcasting Circular 2003-450). The change is aimed at making proceedings accessible to all Canadians through the availability of electronic public files. The CRTC is urging applicants and interveners to file their documents in electronic format. Global Television transfers administration of fund for promotions from CTF to CWIPGlobal Television has transferred the administration of its Promotion of Programming (POP) Fund from the Canadian Television Fund (CTF) to the CanWest Western Independent Producers Fund (CWIP). Loren Mawhinney, Global’s VP of Canadian production, says the switch was made to streamline the administrative process. Efforts will be made to ensure that French-language applications are assessed within the context of the French-language market, Global says. The CWIP was created to enhance the film and television production industry in Western Canada, while POP is a national fund with a third of contributions being distributed to French-language productions (CCR, July 4/02). CanWest Global Communications Corp. established CWIP in September 2000 in conjunction with its acquisition of stations formerly owned by WIC Western International Communications. It also committed $6 million over five years in 2000 to the POP fund, which is aimed at increasing audience awareness of prime-time Canadian television programs and talent. POP, which is entirely financed by Global, has been administered by the CTF’s Licence Fee Program since April 1, 2001. Complete chain of title assessment needed by CTFThe Canadian Television Fund (CTF) is asking applicants to ensure that they submit a clean and complete chain of title when applying for funding. The chain of title is essential to determine whether or not a project complies with essential requirement No. 3, which states that the underlying rights in a project applying to the CTF must be owned, and significantly and meaningfully developed, by Canadians. For more on what should be included in the chain of title, click here. Vidéotron tells CRTC that access to inside wires is being providedVidéotron ltée has told the CRTC that it has been providing access to third parties to its customer service enclosures (CSEs) that control wiring inside multiple unit dwellings, and will continue to do so in the future. In a written filing to the commission, Vidéotron said it offers access to inside wiring, without exception, within 24 hours of receiving a request. Vidéotron also assured the commission that it would not use inspectors in contravention of customer winback rules. Vidéotron outlined in which situations it will use inspectors, including to see if wires are in good state, to check on piracy of the CSE, to identify any non-authorized wiring and to calculate the percentage of cable penetration. Vidéotron noted that each sector of Montreal should have a certain level of cable penetration based on the demographic characteristics. If that level is not reached, it will send a sales team to the area or begin telemarketing efforts there. Vidéotron’s response to the CRTC comes in light of a commission ruling that found the Quebec cable operator failed to provide access to its CSEs and expressed concern over its use of inspectors (CCR, Jan. 30/03). EastLink rolls out telephony in Bedford NSEastLink Cable Systems’ telephone unit has launched local telephone service for business and residential customers in Bedford NS. The deployment is part of a $4.5-million capital investment the EastLink group is making in the Bedford-Sackville area to deliver communications and entertainment services. EastLink Telephone also expects to roll out telephony service in Hammonds Plains in March and Tantallon this spring. Customers save money by bundling cable, high-speed Internet, and telephone services. EastLink says the bundled options can save Bedford residents up to $300 a year compared to competing services. EastLink co-CEO Lee Bragg has told Canadian Communications Reports that offering a telephony option in bundles is helping reduce cable churn. While it can cost from $900 to $1,000 to acquire a new telephony customer, he said that the margins were higher and the market larger for telephone service compared to cable (CCR, Aug. 15/02). CBC applies to take over ownership of Country Canada from wholly owned subsidiaryThe Canadian Broadcasting Corp. is asking the CRTC to allow it to acquire the assets of the Category 1 digital specialty TV channel Country Canada from its wholly owned subsidiary 3899071 Canada Inc. (Broadcasting Notice of Public Hearing 2003-2-1). The numbered company has been dissolved. The matter has been added to an April 8 public hearing to be held in Quebec City. Also added to the hearing is an application from Craig Broadcast Systems Inc. to make some changes that are part of an intra-corporate reorganization. Interventions are due March 21. HGTV renews partnership with DMG World MediaAlliance Atlantis Communications Inc.’s Home and Garden Television (HGTV) has renewed its partnership with DMG World Media for a three-year term. International exhibition and publishing company DMG will work with HGTV for the event company’s Canadian lineup of consumer shows. Some of HGTV’s hosts will participate in the Canadian shows to provide home, garden or design advice and ideas to consumers. The agreement includes eight events between September 2002 and April 2005, including the Toronto Metro Home Show and B.C.’s Fall Home Show and Home & Garden Show. The first deal was signed in 2000. HGTV’s event marketing activities are managed by Rogers EventOne. CRTC grants second extension on getting Timmins radio transmitter runningThe CRTC has granted a numbered Ontario company a second extension to the time limit to commence the operation of the transmitter of CHIM-FM in Timmins ON (Broadcasting Decision 2003-82). The commission notes in its decision that "the transmitter must be operational at the earliest possible date" and in any event no later than Aug. 11, 2003, unless a request for another extension is made and granted before that date. Avril Lavigne picks up five Canadian radio music awardsAvril Lavigne was awarded five Canadian radio music awards at an awards ceremony on Saturday, March 1. She received the Best New Solo Artists (Rock), Best New Group or Solo Artist, Best New Solo Artist, Fans’ Choice Award, and SOCAN Songwriter Award (radio listeners online voting). Created and funded by Canada’s private radio broadcasters, the Canadian Radio Music Awards are national industry awards that profile and recognize Canada’s emerging English-language music stars. For a complete list of winners, click here. INTERNATIONAL NEWS Caller ID comes to television screens of Ringgold Telephone customersCalifornia-based IPTV technology provider Minerva Networks announced March 3 that is has incorporated on-screen caller ID capability into its iTVManager television services management suite that delivers broadcast services over IP. That means that subscribers can view caller ID display on their television screen, in place of the phone. Ringgold Telephone of Ringgold CA is the first customer to offer the service to customers. It is offering the on-screen caller ID as part of its NexTV video entertainment service, which bundles voice, video and data. "Minerva’s on-screen caller ID capability is an effective selling point for our higher-tiered bundled packages," said Terry McGregor, Ringgold’s video services manager. "It has required very little investment on our part yet is a great way for us to differentiate our video services. Our customers simply cannot get this service from cable or satellite providers." TechTV unveils new late-night block of programmingThe U.S.-based TechTV specialty channel will be launching a new block of late-night programming on April 28. The comedy The Martin Sargent Show; X-Play, which will concentrate on gaming; Robot Wars, a U.K. show featuring death matches between some of the best robots ever built; and Anime Unleashed, focusing on animated series and feature-length movies from Japan, will be included in the 10 p.m. to 1 a.m. timeslot. The programming announcement follows the channel’s decision to shift its focus from tech gadgets to technology lifestyle and to close bureaus and cut staff (CCR Update, Nov. 13/02). Also to boost the channel’s fortunes, TechTV announced last month that it had hired two new members of its affiliate sales team. In Canada, TechTV is a partner with Rogers Broadcasting Ltd. and Shaw Communications Inc. in TechTV Canada, a Category 1 digital specialty channel. FCC public hearing on media concentration set for March 7Federal Communications Commission (FCC) commissioners Michael Copps and Jonathan Adelstein have announced that a public hearing on media concentration will be held March 7 at the University of Washington Hub Auditorium. The hearing will consist of three panels – the impact of media consolidation on news, the impact of media consolidation on music and entertainment, and the impact of media consolidation on localism. YES gets support from New Jersey legislature on carriageThe New Jersey Assembly voted to approve a measure that could make it illegal for Cablevision Systems Corp. to refuse to carry YES Network on basic cable. Cablevision Systems, the second-largest cable company in the state, wants to carry the YES Network as a premium network. More details. Cable industry tells FCC that rules aren’t needed on access to Internet contentThe National Cable and Telecommunications Association says that no government regulations are needed to guarantee that cable operators will not block access to content on the Internet. The lobby group for U.S. cable operators told the Federal Communications Commission in a February 21 letter that they will not ink marketing deals that would prevent their Internet subscribers from accessing any Internet content they want. More details.

CCR Update

Broadcast | March 5, 2003

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