Bell Canada applies to CRTC for licence for ‘complementary’ TV service to ExpressVu

The VP of regulatory affairs at Bell Canada says that its proposed wireline cable TV offering won’t be competing for subscribers with sister company Bell ExpressVu but indicates it’s "designed to be competitive with all broadcast distribution undertakings in the marketplace, including the satellite operators." "They are designed to be complementary services. The idea here is to provide an additional choice to consumers," Mirko Bibic tells Canadian Communications Reports. "We have the wireline platform and it’s readily available to be deployed for this type of service. If consumers choose to obtain a satellite service, they will have Bell ExpressVu as an option. If they choose to go with a wireline or cable-type of service, they will have either the incumbent cable operator or the Bell service to choose from. This will enhance choice. And if you look at Shaw (Communications Inc.) in its licensed territory, it has a cable option and a DTH (direct-to-home) option." In response to interrogatories by the CRTC, Bell Canada states that it’s unlikely that its wireline broadcasting distribution undertakings (BDU) would drastically affect the stable customer base at ExpressVu. "While it is premature for the company to quantify the impact of its proposed BDU on Bell ExpressVu in terms of subscribers and revenues in the 11 urban areas specified by Bell Canada’s application, the company expects that any such impact would be modest," writes Bibic to the CRTC. "…With the opportunity to select a service provider from among a number of competitors, it is reasonable to conclude that some of these consumers may opt for the company’s new BDU service. However, it is not possible at this time to provide meaningful estimates of the impact." Bell Canada has applied for two Class 1 broadcast distribution licences: one for Ontario that would cover Toronto, Hamilton/Niagara, Oshawa, Kitchener, London, Windsor, Ottawa and surrounding areas for each location, and another for Quebec for the regions of Montreal, Gatineau, Sherbrooke, Quebec City and surrounding areas. The application was gazetted on June 8 and will be heard at a public hearing on August 9 (Broadcasting Notice of Public Hearing 2004-4). Written comments on the application are due July 15. The CRTC in its public notice indicates that it will examine whether the issuing cable licences would provide Bell Canada with undue competitive advantage that might be detrimental to the broadcasting industry. Bibic, however, says that there are CRTC rules in place that would guard against any competitive advantage Bell might have because of its size. "If you look at the marketplace or the licences that have already been issued by the CRTC - TELUS has received a licence, so has SaskTel, so has MTS, and they are obviously incumbent operators in the primary exchange service telephony business, so we don’t see ourselves in any different position than those companies were at the time they filed the application and they received their licences. There are strict and rigorous rules in place on the telecom side of the business which would prevent the incumbent telephone companies from taking advantage of any position they have in telephony and translating that to the video business. The fact of the matter is that in the video business, it is the cable operators who are the dominant operators in their licensed territories." In addressing CRTC questions with regard to Bell Canada, operating under the BCE umbrella, having a competitive advantage in terms of bundling and packaging of services, the telco responds that the commission has already indicated that bundling matters will be dealt with under the Telecommunications Act. In any event, Bell Canada further states that any bundling concerns are unfounded. "The granting of a BDU licence to Bell Canada would simply enable the company to add a wireline-based distribution offering to its bundling mix. However, since all current bundling rules and requirements would apply equally to bundles containing wireline BDU service, this addition to the mix would afford Bell Canada no anti-competitive advantage of any kind," the telco tells the CRTC. "In fact, the company remains at a distinct competitive disadvantage with respect to bundling telecom services with broadcasting distribution services, given the regulatory asymmetry which allows incumbent cable companies complete freedom to bundle with telecom service their core service, broadcasting distribution, without regulatory approval, while Bell Canada is precluded from offering bundles that include its core service, local telephony, without commission approval and the ensuring obligatory tariffing of the entire bundle." Bell Canada asserts that there is no demonstrable requirement for any mechanisms or safeguards not already in place to ensure the continuation of fair and effective competition. Bell Canada is proposing charging customers $22.94 a month for a basic TV package, and charging an average of $40 for installation. Bibic notes that Bell Canada is not asking for any special treatment, and will follow all regulations, including linkage rules, that apply to Class 1 systems if granted the licences.

Bell Canada applies to CRTC for licence for ‘complementary’ TV service to ExpressVu

News | 06/21/2004 4:00 am EDT

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