denverb2b
May 4th, 2002, 05:15 PM
Payment firm cuts service to providers of U.S. satellite TV
Dana Flavelle
Business Reporter
Advertisement:
---- LOEK/TORONTO STAR
SIGNAL NOT CLEAR: A woman yesterday adjusts a satellite dish for a U.S. service at her home in Toronto.
The legal battle over the right to sell U.S. satellite TV services within Canada isn't over yet, but some small dealers have already been virtually shut down by their payment processor.
The dealers, who sell U.S. service to about 500,000 Canadians, plan to be back in court Tuesday arguing that last week's Supreme Court of Canada ruling violates their charter right to disseminate information.
The Supreme Court has ruled that non-Canadian satellite services are illegal.
However, police have been unable to act on the ruling, at least in Ontario, where the dealers won a seven-day injunction delaying enforcement of the ruling until they launch their charter argument next week.
All the legal manoeuvring, however, may come too late for some dealers, who say their payment processor, PayPal.com, has already frozen their accounts, citing recent legal developments.
"Some dealers have lost a ton of money," said Adam ----er, who owns Toronto-based Satan's Playhouse, one of the biggest suppliers of so-called gray-market satellite services in North America.
----er is one of several dealers who received e-mail messages from PayPal this week warning it would no longer handle accounts of firms that sell certain satellite receivers and decoders.
"We write to inform you that, as the result of a recent determination by the PayPal legal department, we can no longer allow the use of the PayPal service in connection with the sale of DSS descramblers, or other DSS equipment," the e-mail says.
PayPal did not return calls yesterday.
Among dealers, a rumour circulated yesterday that Bell-ExpressVu was behind the move by PayPal.
A story appeared on a dealer Web site that said BellExpressVu's lawyer, Bill McKenzie, of the law firm Crawford McKenzie, had sent PayPal a copy of a recent Supreme Court of Canada decision regarding U.S. satellite services and advised the firm to consult its lawyers.
McKenzie told The Star yesterday copies of the Supreme Court ruling went out to a lot of people. He couldn't confirm that PayPal was among them and said he did not personally send it a copy of the decision.
BellExpressVu also denied it had put pressure on PayPal to cut off certain accounts.
"That wasn't us," said Bell-ExpressVu spokesperson Ron McInnis.
BellExpressVu, Canada's largest legal satellite TV service provider, was the main winner in last week's Supreme Court decision to declare all non-Canadian satellite TV services illegal.
BellExpressVu, which has 1 million customers, estimates U.S. satellite services are siphoning $500 million a year in sales out of the country.
The satellite dealers, however, say they plan to fight the Supreme Court decision as well as PayPal's move to freeze their accounts.
"I've been told hundreds of thousands of dollars have been tied up," said David Fuss, owner of Incredible Electronics, a wholesale supplier to the satellite dealer industry.
"I've heard some people are going to try to make a legal issue out of it: interference with business."
The dealers' lawyer, Alan Gold, did not return calls yesterday.
Fuss estimates that PayPal was handling 60 per cent to 70 per cent of all gray-market satellite TV sales. Some dealers were also using their PayPal accounts to accept donations to support the legal battle, Fuss said.
PayPal is an online payment processor based in Palo Alto, Calif. It enables anyone with an e-mail account to conduct a financial transaction online.
But payment problems aren't the only thing hurting business, Fuss said.
"Business has dropped off dramatically," Fuss said. "People are afraid they'll be prosecuted, even though the government has said they won't go into homes. People are still scared."
Another dealer, Richard Rex, whose British Columbia-based firm Can-Am Satellites was the test case in the Supreme Court decision, shrugged off the PayPal controversy, saying the service isn't that important to gray-market dealers.
Dana Flavelle
Business Reporter
Advertisement:
---- LOEK/TORONTO STAR
SIGNAL NOT CLEAR: A woman yesterday adjusts a satellite dish for a U.S. service at her home in Toronto.
The legal battle over the right to sell U.S. satellite TV services within Canada isn't over yet, but some small dealers have already been virtually shut down by their payment processor.
The dealers, who sell U.S. service to about 500,000 Canadians, plan to be back in court Tuesday arguing that last week's Supreme Court of Canada ruling violates their charter right to disseminate information.
The Supreme Court has ruled that non-Canadian satellite services are illegal.
However, police have been unable to act on the ruling, at least in Ontario, where the dealers won a seven-day injunction delaying enforcement of the ruling until they launch their charter argument next week.
All the legal manoeuvring, however, may come too late for some dealers, who say their payment processor, PayPal.com, has already frozen their accounts, citing recent legal developments.
"Some dealers have lost a ton of money," said Adam ----er, who owns Toronto-based Satan's Playhouse, one of the biggest suppliers of so-called gray-market satellite services in North America.
----er is one of several dealers who received e-mail messages from PayPal this week warning it would no longer handle accounts of firms that sell certain satellite receivers and decoders.
"We write to inform you that, as the result of a recent determination by the PayPal legal department, we can no longer allow the use of the PayPal service in connection with the sale of DSS descramblers, or other DSS equipment," the e-mail says.
PayPal did not return calls yesterday.
Among dealers, a rumour circulated yesterday that Bell-ExpressVu was behind the move by PayPal.
A story appeared on a dealer Web site that said BellExpressVu's lawyer, Bill McKenzie, of the law firm Crawford McKenzie, had sent PayPal a copy of a recent Supreme Court of Canada decision regarding U.S. satellite services and advised the firm to consult its lawyers.
McKenzie told The Star yesterday copies of the Supreme Court ruling went out to a lot of people. He couldn't confirm that PayPal was among them and said he did not personally send it a copy of the decision.
BellExpressVu also denied it had put pressure on PayPal to cut off certain accounts.
"That wasn't us," said Bell-ExpressVu spokesperson Ron McInnis.
BellExpressVu, Canada's largest legal satellite TV service provider, was the main winner in last week's Supreme Court decision to declare all non-Canadian satellite TV services illegal.
BellExpressVu, which has 1 million customers, estimates U.S. satellite services are siphoning $500 million a year in sales out of the country.
The satellite dealers, however, say they plan to fight the Supreme Court decision as well as PayPal's move to freeze their accounts.
"I've been told hundreds of thousands of dollars have been tied up," said David Fuss, owner of Incredible Electronics, a wholesale supplier to the satellite dealer industry.
"I've heard some people are going to try to make a legal issue out of it: interference with business."
The dealers' lawyer, Alan Gold, did not return calls yesterday.
Fuss estimates that PayPal was handling 60 per cent to 70 per cent of all gray-market satellite TV sales. Some dealers were also using their PayPal accounts to accept donations to support the legal battle, Fuss said.
PayPal is an online payment processor based in Palo Alto, Calif. It enables anyone with an e-mail account to conduct a financial transaction online.
But payment problems aren't the only thing hurting business, Fuss said.
"Business has dropped off dramatically," Fuss said. "People are afraid they'll be prosecuted, even though the government has said they won't go into homes. People are still scared."
Another dealer, Richard Rex, whose British Columbia-based firm Can-Am Satellites was the test case in the Supreme Court decision, shrugged off the PayPal controversy, saying the service isn't that important to gray-market dealers.