Industry’s process should help ensure satellite licenses are actually used

On July 11, Industry Canada announced an initiative to assign as many as 29 satellite licences to Canadian commercial satellite operators. The capacity provided by these satellites will help carry new telecommunications services and should offer enough spectrum to handle the full implementation of high-definition television in Canada. "Over the next three years I’m expecting to see a significant growth in the number of our HD channels," says Gary Smith, president of Bell ExpressVu. "So it’s important to us that we have the confidence that the bandwidth is going to be there. I’ve never been particularly worried, but it’s reassuring that the licenses are now being put out." Industry Canada’s Call for Applications to License Satellite Orbital Positions lays out the process for awarding new licences for frequency use within specific orbital bands. Applications are due by November 15, and should include plans for providing capacity to satisfy Canadian requirements. Given the impact the licensing will have on the broadcasting and telecommunications industries, satellite users have also been invited to participate by registering with the department and consulting with applicants on their satellite plans, a first for this type of process. While not all the licenses to be issued are suitable for broadcasting, accommodating the future demand of HDTV is one of the main motivators behind the initiative. "Clearly one of the things Canadians are looking for is greater number, variety and choice of high-definition services," says Gerry Wall, VP of government affairs for Ciel Satellite Group Inc., a satellite capacity provider. " have to upgrade their services and this will allow them to do that." Ciel was anticipating the announcement from Industry Canada, particularly since some of the orbital slots included have rapidly approaching bring-into-use dates. Wall says the most important thing from Ciel’s position is getting the licensing process started so construction of satellites can begin and key deadlines can be met. Wall wouldn’t comment on which slots Ciel will apply for. Telesat Canada also declined to comment on which of the 29 slots it covets. However, Paul Bush, Telesat’s VP of corporate development, underscored the importance of this initiative for his company. "Spectrum and the use of orbital slots is fundamental to Telesat’s future," he says. "It really is the raw materials for us to be able to build and grow." Bush adds that Telesat had been urging the government to move on licensing certain orbital slots for some time. ExpressVu’s Smith believes there is enough satellite capacity to accommodate the transition to HD at its current pace for two to three more years. However, depending on how quickly or slowly broadcasters adopt high-definition, this timeframe could move in either direction. Smith adds the types of HD channels offered also need different amounts of bandwidth – for instance, live sports generally requires more capacity than an all-news channel. But Bush points out that adding satellite capacity is just one step in the complete transition to HD. "There’s a huge expense in terms of production facilities, internal transmission facilities, all of the hardware need in their studios and the way they do production and editing," he says. "But in the end it will require capacity, and this will help." With the CRTC laying out an HD migration framework last month (CCR, July 4/06), it seems that action from the regulatory bodies is finally catching up with talk of demand. All those who spoke with Canadian Communications Reports were satisfied with the route Industry Canada is taking. "The opening of the process to users is a huge step forward," says Don Braden, executive director of the Canadian Satellite Users Association. As the only association representing broadcast users of satellites in Canada, the CSUA will advocate on behalf of its members, which include ExpressVu, during the application process. Braden is also pleased that the department is using a comparative process rather than an auction. "An auction may result in maximum dollars for the government, but it may not ensure Canadian occupation of this Canadian space real estate," he says. "Also, high fees for orbital slots end up costing the broadcasting industry and the Canadian viewing public." Adds Bush: "Auctions haven’t worked. It’s always a good day when someone gets a big cheque and always a bad day when a company goes bankrupt and they give up the slot." He emphasizes that securing an orbital slot and the spectrum is just the first first step: the hard work is getting money to build the satellite, launching it and coordinating its use in Canada as well as the US, Mexico and South America. Industry Canada’s comparative selection process should help ensure that those who are granted orbital slots use them. In its call, the department urges applicants to address specific objectives such as Canadian coverage and satellite capacity as well as other benefits for underserved communities. The department also wants sound business plans and specifically requests that "applicants must provide information...which clearly indicates their plan for the development of the requested licenses." Smith thinks this will result in licences going to legitimate industry players and will keep inexperienced speculators out of the process. "If you’ve got a legitimate interest in a slot you can get access to it and you haven’t got 57 speculators to get through to get to the bandwidth you need," he says. Other DTH providers like Star Choice Satellite TV Inc. will also certainly be looking to acquire the capacity to increase the HD content it provides its subscribers, and that is very much what Industry Canada wants this process to be about. In its call it states that it "will view favourably those applications with viable plans demonstrating the greatest benefit to Canadians." Ciel’s Wall agrees that looking at benefits for Canadian end users is an important part of the process and one that certainly can’t be captured with an auction. He adds: "It’s a beauty contest, but the beauty is based on very specific criteria about the types of services and capacity and how it’s going to satisfy user demand." Industry Canada will publish a list of registered satellite users on August 15 and public comments on submitted applications will be released December 15. Results from the application process are slated to be announced sometime next spring.

Industry’s process should help ensure satellite licenses are actually used

Broadcast | July 20, 2006

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