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The Role of the CRTC. Cable vs. Satellite. Telesat Canada. A Canadian public corporation formed in 1969 to deliver satellite services to Canadians ownership: 51% — Canadian federal government 49% — Canadian telephone monopoly (Bell Canada) No development for a decade

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telesat canada
Telesat Canada
  • A Canadian public corporation formed in 1969 to deliver satellite services to Canadians
  • ownership:
    • 51% —Canadian federal government
    • 49% — Canadian telephone monopoly (Bell Canada)
  • No development for a decade
    • Federal government does not challenge interests of telephone companies
cancom
Cancom
  • CRTC rules (early 80s) that TV signals be made available to remote regions of Canada
  • Cancom: Consortium of four private Canadian broadcasters formed in 1981
    • André Bureau becomes president in January 1983
  • Telesat satellites are used to send TV signals to regions of Canada beyond reach of cable
  • Company loses money immediately
    • Offers only four TV stations (3 English, 1 French) + eight radio stations(in 1983, “3+1” policy)
    • $500,000 monthly revenue & $2 million monthly expenses in 1984
crtc cable
CRTC & Cable
  • In 1980s, cable had > 60% penetration of Canadian households
  • CRTC strategy is to deliver universal service via private broadcasters (Cancom)
    • Establishes a pro-cable regulatory paradigm
  • Cancom uses Telesat Canada satellites
    • Sends TV to cable systems (cable companies become Cancom’s customers)
    • Direct to home (DTH) signals could be sent only beyond cable’s reach
    • Cable customers provide revenue flow
  • André Bureau becomes Chair of CRTC in October 1983
death stars
Death Stars
  • Direct TV: a US satellite TV service
    • In direct competition with cable services
    • Benefits from 1992 FCC ruling preventing cable operators from withholding channels under their control from satellite competitors
  • Canadian cable companies lobby CRTC in response to “death star” threat
    • Direct broadcast satellite (DBS) service can beam signals all over North America
    • Ted Rogers sings the blues
crtc death stars
CRTC & Death Stars
  • CRTC regulation of 80% Canadian ownership makes Direct TV’s signals illegal
  • Canadian-owned Power Corporation & Direct TV form Power Direct TV
    • 80% owned by Power Corp.
    • 20% by Direct TV
crtc death stars7
CRTC & Death Stars
  • Threat of competition to cable
    • BCE & WIC (Western International Communications) talk to Power Direct
  • CRTC response
    • BCE & WIC licenses will not be renewed if talks continue
    • Direct TV must use Canadian satellites to beam to Canadian homes
    • Threat of more regulatory action
death stars cable
Death Stars & Cable
  • Cable Co.’s strategy:
    • Develop a wholly cable-owned DTH satellite company
  • DTH Canada created in 1994
    • Controlled by cable companies (Rogers, Shaw)
    • CRTC forces minority ownership on BCE & WIC
  • CRTC exempts DTH Canada from licensing fees
    • Regulation: no fees for companies using only Canadian satellites
    • DTH uses Telesat satellites
the dust settles
The Dust Settles
  • Anti-trust investigation forces Rogers & Shaw out of DTH Canada
    • BCE and WIC gain control of the company
    • DTH morphs into ExpressVu
  • Anti-competitive regulation by CRTC forces Power Direct TV out of Canadian satellite business
canadian satellite service
Canadian Satellite Service
  • ExpressVu
    • Controlled by telephone industry
  • Cancom
    • Controlled by cable industry
    • Star Choice
  • What was the role of the State?