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Telford Fenton could
not be happier about what he gets on his TV set. “It’s terrific,” says the
62-year-old Toronto painter. “Turner Classic Movies is great — it’s exactly
like being at the movies in 1948. You get all those old movies, and not
colorized, either — black and white. The Bloomberg Direct News service is
great, too — there’s so much information, you can’t take it all in.” Neither
Turner Classic Movies nor Bloomberg Direct’s financial news service comes
from Fenton’s cable hookup. His is one of an estimated 5,000 Canadian
households using an 18 inch dish to receive the four-month-old U.S.
direct-to-home satellite service, DirecTV.
But Fenton’s service
may be in jeopardy: Canadian enterprises, the Family Channel pay-TV network
and Canadian Satellite Communications have been threatening a joint lawsuit
against the Los Angeles-based DirecTV Both companies claim that DirecTV is
violating their exclusive rights to broadcast certain programs in Canada.
Family Channel’s vice president of business affairs, John Riley, says
DirecTV has been warned about alleged copyright violations, but DirecTV’s
response has not provided "sufficient comfort” that the company is complying
with demands to cut off Canadian subscribers picking up the satellite’s
signal. “We’re weighing our options for the next move,” he says. Late last
week, the parties agreed for the first time to a face-to-face meeting.
That confrontation
is part of a larger war no control the choices offered Canadian TV watchers.
Another combatant is Power Broadcasting Inc.. a wholly owned subsidiary of
Montreal’s Power Corp., which has formed a joint venture with DirecTV —
called Power DirecTV — to broad cast selected Canadian Programming into the
United States.
Eventually, Power
DirecTV aims to deliver direct-to-home satellite service in Canada.
Meanwhile, another Canadian satellite service, Expressvu Inc., is set to
start operations in September, offering a package of cable and pay-per-view
services — and promising to deliver it all for about the same amount as
current monthly cable fees.
Now, another group
of players is clamoring to join the fray. The nation’s telephone companies
want access to television sets-an area that so far has been the domain of
cable companies. That monopoly will be challenged next month when the
telephone companies will ask the Canadian Radio-television and
Telecommunications Commission (CRTC) to give them permission to deliver a
mix of information and entertainment programming — everything from
conventional TV fare and movies to interactive video games, electronic
shopping and information services-to Canadian viewers. And they intend to
provide that service using fiber-optic and conventional phone lines linked
to home computers and televisions.
The cable companies,
meanwhile, are gearing up m defend their turf. In written submissions to the
CRTC, they are asking that their programming monopoly be extended for seven
years — the length of time they estimate it will take them to develop the
necessary equipment to compete with the range of services the phone
companies propose to offer. “Our position is simple,” says Richard Stursberg,
president of the Ottawa-based Canadian Cable Television Association.
“Competition is good, as long as everyone plays by the same rules.”
According to Stursberg, the telephone companies’ entry into the television
business should be postponed until the cable companies are authorized to
offer full telephone service.
The cable operators
want to offer consumers “pick-and-pay” arrangements, whereby viewers will
eventually be able to choose exactly which combination of channels they
want, paying only for those they receive. But Stursberg says that developing
the required hardware — a mix of fiber optics, regular coaxial cable and a
rudimentary set-top computer to process the two-way flow of information — is
slowing that progress. “The set-top box necessary for that to work is a
stumbling block,” Stursberg says. “Right now, the individual units are too
expensive.” But Rogers Communications Inc., for one, is working with
software developer Microsoft Corp. of Redmond, Wash., on prototypes.
The telephone
companies, which maintain that they are winning the technological race, want
a go-ahead from the CRTC to deliver a range of entertainment and information
services to consumers. Stentor, a consortium of nine regional phone
companies, is testing systems in selected areas across Canada. They include
a videoconferencing project in B.C. hospitals, a New Brunswick experiment
linking TVs and telephones for enhanced telephone service and a
video-on-demand trial in Regina. Video- on-demand
allows viewers to select and watch shows at their convenience, not just when
a broadcaster wants to deliver them. It turns a consumer’s television and
set-top into a “virtual VCR” Consumers can call up programming from their
couches using a remote control and can then stop, rewind or fast-forward
what they are watching. If Stentor gets what it wants from the CRTC’s
so-called convergence proceedings in March, “consumers in urban areas will
begin to see some of these services in as little as two years,” says Brian
Milton, who is the Stentor official in charge of liaison with government and
regulatory bodies.
Meanwhile,
controversy rages around DirecTV’s small satellite receiver — “right outside
the window,” says Fenton, “so I can knock the ice off in the winter.” He
paid $1,700 for the dish and an accompanying set-top decoder box, which
reconstitutes a digital signal beamed from a single high-power satellite.
Digital signals offer better picture and sound quality than existing cable —
and DirecTV offers virtually every network or programming service currently
available in the United States, as well as pay-per-view movies and events.
Fenton’s typical 89 channel package costs $49 per month, automatically
billed to a credit card. But there is a catch: DirecTV cannot have Canadian
subscribers. While there is no law prohibiting Canadians from owning the
dish or receiving the signals, the U.S. company is not authorized by the
CRTC to operate in Canada. Still, some Canadians have gotten around that
regulation by establishing a U.S. address — either through a post office box
or obliging friends or relatives (Fenton uses the Florida address of a
friend).
The satellite signal
itself spills at least 150 kilometers over the border. But the growing
market in Canada for DirecTV upsets many Canadian producers, distributors
and broadcasters. They claim that when DirecTV airs many of its programs, it
is violating copyright arrangements between producers and Canadian
broadcasters, who pay money for exclusive rights to air those same programs
in Canada. In a speech to the Canadian Club in Toronto last month, Michael
MacMillan, chairman of the Toronto production company Atlantis
Communications, cited a TV-movie deal his company made with the CBC and the
U.S. Disney Channel for its Lost in the Barrens. Each broadcaster paid
Atlantis for broadcasting rights on a one-time basis. But, MacMillan points
out, when Disney programs are broadcast from DirecTV’s satellite, “neither
Atlantis nor CBC receives a dime from Disney for what is basically a second
sale of the Canadian rights and a flagrant violation of copyright laws. In
simple language, that’s theft.”
But DirecTV says
that it is trying to comply with Canadian law by switching off Canadians who
are receiving its signal illicitly. The situation usually comes to DirecTV’s
attention when a Canadian subscriber orders a pay-per-view show through the
set-top unit The box automatically dials the company’s Los Angeles office,
revealing that the caller has a Canadian telephone area code. Tom Bracken,
DirecTV’s communications vice-president, says that in such cases DirecTV
sends a message via the set-top unit advising the customer to call the
company’s service center in Los Angeles within 24 hours or they will be cut
off. Bracken would not say how many Canadians have been disconnected. To
avoid detection, some Canadian customers simply forgo the pay-per-view
service or order their pay-per-view choices personally through customer
service 800 lines. Others buy a device that simulates a U.S. area code after
connecting to the call-identification systems. Many of the DirecTV units in
the Toronto area come from Davin Satellite Systems in Concord, Ont., 40 km
northwest of the city. Owner David Gibbins started offering the dish and
set-top hardware package in December.
Gibbins says he
sells 20 units a month and gets calls from curious potential customers every
day. “People are mad at the cable companies and the CRTC,” he adds, “for
telling them what they can and cannot watch.”
By September,
viewers will have yet another option when Expressvu, a Canadian consortium
that includes Western International Communications, Tee-Comm Electronics and
BCE Inc., promises to offer its direct-to-home service more cheaply than
DirecTV or cable. In addition to 65 channels, all identical to options
currently available on different cable systems across the country, the
Expressvu menu will include 22 pay-per-view services
— mainly movies at the outset, and
eventually expanded coverage of hockey and National Football League games.
Meanwhile, Power
DirecTV’s foray into the domestic market has been thwarted by a CRTC ruling
in August, 1994, stipulating that Canadian direct-to-home services must get
their signals from Canadian satellites and can broadcast only programming
already approved by the CRTC. Power DirecTV failed to win CRTC go-ahead by
proposing to draw part of its programming from U.S. satellites.
Now, partly as a
result of vigorous lobbying by Power DirecTV, the federal government has
appointed a three-man committee to review its policies on satellite TV and
other broadcasting issues. The committee — a joint undertaking by the
federal Heritage and Industry ministries — is expected to make its
recommendations this summer.
As the
communications contenders slug it out, Telford Fenton will continue channel
surfing through his many options. “The government is a bunch of fools,” he
says, dismissing attempts to regulate what people watch. And as satellite
dishes and fiber-optic cable open up the possibilities on the small screen,
“What’s on TV tonight?” is an increasingly loaded question. |
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