ExpressVu wants winback rules retained due to dominance of major cablecos

Local markets continue to be dominated by Canada’s five biggest cablecos, says Bell ExpressVu LP - reason enough, it tells the CRTC, to maintain winback restrictions. The direct-to-home (DTH) satellite TV distributor says national subscriber figures touted by the Canadian Cable Television Association (CCTA) provide a skewed view of the competitive marketplace. Too few DTH customers live in areas with competing service by big cablecos to warrant a blanket lifting of winback restrictions, it argues. "Nowhere in either its original application or its first round comments does the CCTA address the level of competition in each of the market areas served by the five major cable companies," Bell ExpressVu states in second-round comments dated July 9 in the CRTC process on the cable industry’s request that winback rules for incumbent cablecos be eliminated (CCR Update, April 30/03). Bell ExpressVu argues that the CCTA should not have used national numbers, but instead regional numbers for each of the areas covered by the major cable companies. Bell ExpressVu also states that the CCTA data doesn’t take into account that about half of DTH customers are in rural and remote areas not served by cable. Moreover, it argues that when Shaw Communications Inc.-owned satellite TV operator Star Choice gains a customer in Shaw Cable territory, it is not really a loss to cable since the same company owns the two distributors. Bell ExpressVu notes that it is the smaller Class 2 and 3 cablecos that have experienced the most significant declines in customers, and they are no longer subject to winback rules because they have become exempt from licensing (CCR, May 8/03). The DTH operator argues that the largest Class 1 cablecos - Rogers Cable Inc. in much of Ontario and New Brunswick, and parts of Newfoundland; Shaw in various communities in British Columbia, Alberta, Saskatchewan, and Manitoba; Vidéotron ltée in Quebec; Cogeco Cable Inc. in parts of Ontario and Quebec; and EastLink Cable Systems in communities in Nova Scotia, Prince Edward Island, and New Brunswick - have lost less than 2% of their combined customer base. In filing its Oct. 26, 2002 application for the removal of winback restrictions on cablecos (CCR Update, Nov. 28/02) and in its first- and second-round comments in the subsequent CRTC process, the CCTA contends that competition exists as DTH has captured about 20% of the national market. Bell ExpressVu argues that when figures for DTH customers not in cable regions are eliminated and other adjustments are made to the numbers, then DTH and wireless cable operators capture only 10% of the market. Established in April 1999 by the CRTC, winback restrictions are aimed at the evolution of sustainable competition in broadcast distribution. The restrictions prevent incumbent cablecos from engaging in direct marketing of customers within 90 days of being notified of their intention to cancel their basic cable service. The CCTA contends that with DTH operators having 20% overall national market share, competition in broadcast distribution is entrenched and would not be at risk if the winback restrictions were removed. The cable association argues that determining market share based on national numbers is legitimate since Bell ExpressVu and Star Choice offer their services on a national basis. It also questions Bell ExpressVu’s contention that half of its subscribers are in areas not served by cable. The CCTA takes Bell ExpressVu to task for using national market penetration levels to investors but then suggesting in this CRTC process that these figures aren’t accurate. "Since BEV (Bell ExpressVu) considered its own market share to stand at 14% when appearing before the investment community, there is no basis for the commission to accept submissions by BEV not one week later that the market share of all DTH and MDS companies is only 10%," the CCTA writes. On a national basis, the CCTA says that Bell ExpressVu’s 14% market share and Star Choice’s 8% market share mean that in total DTH companies are now serving 22% of the market.

ExpressVu wants winback rules retained due to dominance of major cablecos

News | 07/17/2003 4:00 am EDT

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