[Satellite News 05-25-09] Bell, one of Canada’s largest telcos, hopes to bring a new ‘Freesat’ service to Canada next year, Mirko Bibic, Bell senior vice president of regulatory and government affairs, told Satellite News.
    Bell said the company proposed this idea to the national regulator, Canadian Radio-Television and Telecommunications Commission (CRTC) as a way of bringing digital TV services to all Canadians, and helping broadcasters with the costs of digital transition. “The deadline that the CRTC has imposed for the broadcasters to move to digital is August 2011. The problem is we, in Canada, are already two years behind the U.S., and the industry, apart from Bell, have had their heads in the sand, hoping that somebody, preferably the government, comes up with some magical subsidy to make this all go away,” he said.
    Bibic said that despite Bell having some timing issues with its ‘Freesat’ model, it is able to launch the service by the third quarter of 2010. “We would be able to get this service launched one year ahead of the regulatory deadline. The regulatory deadline is rather ambitious right now,” he said.
    In terms of market size for the Freesat service, Bibic marks its potential at 200,000 households in Canada who would not be able to receive television over the air if broadcasters do not convert their infrastructure in the smaller communities. “However, out of that 200,000 homes, you have to deduct those homes who do not have a TV to begin with. You have to deduct those who have a TV, but who do not watch over the air TV. You also have to deduct those who will then subscribe to pay-TV. Once you deduct all those, you are left with 80,000 to 100,000 homes,” said Bibic.
    Bell is anxious for their proposals to succeed, as broadcasters in Canada have been pushing for operators such as Bell to fund their digital efforts. Bibic calls this situation “outrageous.”
    “Broadcasters have been lobbying aggressively in Canada, saying their financial model is broken, and that they need financial relief, and this financial relief should come from distributors, which in Canada would mean the cable and satellite companies. The broadcasters know that even though they have an obligation to convert their analog infrastructure to digital by August 2011, they are trying to offload that on to anyone else but themselves. We took a look at this. The broadcaster demands for funding from satellite and cable players is outrageous. There are no reasons why there should be the wealth transfers the broadcasters are requesting,” he said.
    Bibic senses attitudes towards the ‘Freesat’ model might be gaining some credence among Canada’s biggest broadcasters. “The broadcasters have now said there may be some merit to the idea. They are agreeing to meet with us to discuss the concept and sit down and work this out. The broadcasters have stated that digital conversion will cost them hundreds of millions of dollars. A CRTC report said the costs of transition would be hundreds of millions of dollars. Our ‘Freesat’ model would help reduce costs and save them hundreds of millions of dollars. Our ‘Freesat’ model would cost broadcasters C$5 to C $10 million ($4.27 to $8.53 million) a year. These funds would simply compensate us for operating the service,” he said.
    When asked what he thought of Bell’s ‘Freesat’ proposal, John Douglas, vice president of public affairs at Canwest Global Corporation, one of Canada’s biggest broadcasters, told Satellite News that his company is evaluating their proposal, and formulating our position on it.
    If the broadcasters were successful in gaining funds from television distributors such as Bell, the bill could run into hundreds of millions of dollars. “If every single demand of the broadcasters was met by the regulator, it would add an extra ($127.98 million) a year in costs to BellTV. That is something huge, and something we cannot afford given the state of our business right now,” said Bibic.
    Launching a ‘Freesat’ services would also present a number of technical and operational challenges for Bell. “The launch of ‘Freesat’ would be a new use of our DTH technology because we would be introducing never-before-used Ka-band. That would require a new dish design and a new uplink method. We are well on the way to developing technology specifications,” said Bibic. “Another technology issue, is that we will be using a Conditional Access (CA) system which was previously used to manage entitlements in a pay-TV world. Now, we would be using it for a complex task of geo-targeting the right local channels to the right local communities. So, those are two technology challenges,” said Bibic.
    The company now has to wait for a CRTV ruling to see what happens next. “If there is no acceptable outcome from the CRTC in terms of the monetary risks we are facing, we will not do ‘Freesat’ period,” said Bibic. “When we launch it, it will be when the CRTC issues its decision. If it takes a long time, we may not be able to do this in the third quarter of 2010.”