CAB asks CRTC to quash Star Choice’s multi-address account policy

Earlier this year, DTH and cable BDUs squared off over Star Choice Communications Inc.’s policy of allowing subscribers to access its service at multiple addresses (CCR, May 5/06). Last week, after weighing input from both sides as well as the Canadian Association of Broadcasters, the CRTC ruled the practice violates the Broadcasting Distribution Regulations. Below is an excerpt from the CAB’s reply to Star Choice’s initial comments. The CAB does not agree...that the commission should accept account stacking as a proper marketing and billing practice. The practice is not contemplated and is not authorized in affiliation agreements between programmers and BDUs, and there are some situations where a subscription-based programming service that depends on a monthly wholesale fee does not have a formal affiliation agreement at all. In cases where there is no affiliation agreement, or where an existing agreement does not include specific provisions to the contrary, subscription-based services may be deprived of legitimate affiliation payments with no recourse to the commission.... Were the commission ultimately to permit the practice...it would be critical to ensure that, as suggested by ExpressVu, any BDU engaging in such a practice have the prior written consent of all licensed subscription-based programming services that it distributes, whether or not they have formal affiliation agreements. Finally, Star Choice argues that the practice of account stacking, or what it refers to as "second address service", does not harm programmers and that therefore there are no grounds to prohibit the practice….In practical terms, however, the way in which Star Choice implements second address service does not reflect the underlying premise outlined above.... Thus, the only criterion for eligibility for second address service is that the subscriber be able to demonstrate ownership of a second residence, not that such a residence necessarily be the family’s vacation property, or even that it be a residence occupied by other members of the same family. This eligibility criterion would, for example, permit an individual who has purchased multiple properties for the purpose of generating rental income to provide all such rental properties with "second address service" on a single subscription, clearly an abuse of the stated intent of the policy. Even where the second residence is a legitimate vacation property, it is entirely possible that it could be rented out to third parties for lengthy periods of time, again contradicting Star Choice’s own premise for authorizing the practice. All of this reinforces the point made in the CAB’s original submission that Star Choice has no mechanism to control or address such situations. The CAB notes that Rogers raises a similar concern with respect to Star Choice’s ability to monitor even the requirement that a single subscriber must own both residences receiving service…. In summary, the CAB submits that the account stacking approach practiced by Star Choice is premised on faulty logic, can be subject to abuse, cannot be properly monitored or enforced and, if authorized by the commission, would set a precedent that would inevitably result in licensed specialty and pay services being deprived of legitimate subscription revenues. For all these reasons, and for the reasons further elaborated in the CAB’s original submission, the CAB urges the commission to confirm that account stacking is not a legitimate marketing and billing practice and must therefore be discontinued.

CAB asks CRTC to quash Star Choice’s multi-address account policy

News | 10/24/2006 4:00 am EDT

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