Daryl Gray
June 10th, 2005, 04:05 PM
The Canadian Radio and Telecommunications Commission (CRTC) has announced that they plan to rule on 2 Canadian satellite radio and 1 Canadian terrestrial digital radio applications on Thursday of next week.
The decision has been long awaited as the 3 licensee applicants have had then applications before the CRTC since the summer of 2004. Last month, General Motors Canada and Honda Canada submitted a request for a decision to the CRTC to attempt to expedite it. GM and Honda required a decision in order to include satellite radio compatible audio systems in their 2006 model vehicles.
There are currently 3 applications before the CRTC. 2 are for satellite delivered digital radio services and 1 is for a terrestrial radio service. Both of the satellite-delivered applicants are partnered with a U.S. satellite radio provider.
The first is Canadian Satellite Radio Inc., which is partnered with the U.S. XM Satellite Radio service. The application includes the use of the 3 XM satellites in orbit for delivery of a Canadian-U.S. satellite radio service. The proposed service would include 101 digital satellite radio channels initially, of which 4 would be produced in Canada by Canadian Satellite Radio. The XM Radio satellites are currently broadcasting satellite radio programming to over 4 million U.S. subscribers. The proposed monthly cost for Canadians would be $12.99 CAD.
The second applicant is a joint partnership between Canadian Broadcasting Corp. (CBC), Standard Radio Inc. and the U.S. Sirius Radio Inc., which is currently broadcasting their service to over 2 million U.S. subscribers. The service would be delivered via Sirius Radio’s 3 inclined orbit satellites. The application proposes a 78 channel initial service, of which 4 channels would be produced in Canada by the CBC, with a proposed monthly cost of $12.95 CAD.
A third application is by CHUM Limited for a multi-channel terrestrial subscription radio service. As the service would use existing terrestrial radio transmitters, it would initially only be available in major centers. The application proposes a 50 channels service, all of which would be produced in Canada by CHUM. A satellite delivery option would be available by 2010. The proposed monthly cost would be $9.95 CAD
Satellite radio technology has been available in the United States since September 2001, when XM Radio launched their service. Since that time, subscriber counts have exploded, netting XM Radio more than 1 million new subscribers every year. As a result, many Canadians have already opted to subscribe to XM Radio and Sirius Radio via gray market subscriptions.
The CRTC’s long decision process has also added to this growing problem as well. As many will recall, this is eerily similar to the gray market digital satellite TV issue that has been waging since 1995. A long delay due in part to stringent Canadian content requirements and requirement of use of Canadian Satellites for delivery had caused more than a 2 year delay in getting a Canadian satellite television service to market. In that issue, the CRTC imposed a heavy 50% Canadian content requirement. Additionally, only one Canadian satellite was available at the time for delivery, which was insufficient the 2 fully operational services. The result was a gray market problem that had exploded into more than 100 000 subscriber by the time the Canadian services had finally gotten to market in mid 1997.
It remains to be seen if the CRTC will bear this in mind when reviewing the satellite radio applications. As there are no Canadian satellites capable of delivering a satellite radio service, the applicants depend on use of existing U.S. satellites that are currently broadcasting U.S. services. Because of this, their bandwidth is limited and they would not be able to offer a huge lineup of Canadian produced channels. Construction and launch of a dedicated satellite radio satellite would take more than 2 years and its unlikely that the smaller Canadian market would be able to offset the huge costs of such as project. If the CRTC imposes heavy Canadian requirements on programming, we may have déjà vu all over again and it would surely lead to an out of control satellite radio gray market, which Canadian broadcasters would be hard pressed to compete with after along delay in startup.
The CHUM application certainly offers more Canadian content, however they would be limited to major centers with initial terrestrial broadcasts only. This has significant disadvantages and would not likely curb the growing satellite radio gray market problem in Canada.
XM Radio and Sirius currently have limited satellite bandwidth, due to a fully operation U.S. service, which would likely limit their possible Canadian channel capacity to 10 channels or fewer. A CRTC requirement for more than this would likely only be possible with a reduction of U.S. services, which would not be very popular with their U.S. subscribers. The possible upside of successful licensing is that the U.S. services may also offer the Canadian channels to their subscribers, which would strongly benefit the Canadian channels.
The CRTC has before them a number of decisions in regards to the application in addition to the appropriate amount of Canadian content. They must also decide what amount of revenue would be set aside to fund Canadian content. The Canadian content must offer both English and French content. They must also decide how many Canadian services the market will support, as well as weigh the impact it will have on already licensed Canadian radio broadcasters, including the terrestrial repeaters for major centers.
If the two satellite services are successful in receiving licenses, Canadians already subscribing to the U.S. services will be able to switch to the Canadian service once available. Depending on the CRTC's conditions of license, this may require the purchase of a new Canadian only satellite radio conditional access module, which plugs into a satellite radio ready head unit. Although the services would be using identical technology to its U.S. service, its likely that the CRTC will require a marked satellite radio module that would prevent Canadians from subscribing to the U.S. service using it.
Indeed, it will be interesting to see next week’s decision. Hopefully the CRTC will weigh previous mistakes to avoid a repeat.
©2005 Digital Insurrection
The decision has been long awaited as the 3 licensee applicants have had then applications before the CRTC since the summer of 2004. Last month, General Motors Canada and Honda Canada submitted a request for a decision to the CRTC to attempt to expedite it. GM and Honda required a decision in order to include satellite radio compatible audio systems in their 2006 model vehicles.
There are currently 3 applications before the CRTC. 2 are for satellite delivered digital radio services and 1 is for a terrestrial radio service. Both of the satellite-delivered applicants are partnered with a U.S. satellite radio provider.
The first is Canadian Satellite Radio Inc., which is partnered with the U.S. XM Satellite Radio service. The application includes the use of the 3 XM satellites in orbit for delivery of a Canadian-U.S. satellite radio service. The proposed service would include 101 digital satellite radio channels initially, of which 4 would be produced in Canada by Canadian Satellite Radio. The XM Radio satellites are currently broadcasting satellite radio programming to over 4 million U.S. subscribers. The proposed monthly cost for Canadians would be $12.99 CAD.
The second applicant is a joint partnership between Canadian Broadcasting Corp. (CBC), Standard Radio Inc. and the U.S. Sirius Radio Inc., which is currently broadcasting their service to over 2 million U.S. subscribers. The service would be delivered via Sirius Radio’s 3 inclined orbit satellites. The application proposes a 78 channel initial service, of which 4 channels would be produced in Canada by the CBC, with a proposed monthly cost of $12.95 CAD.
A third application is by CHUM Limited for a multi-channel terrestrial subscription radio service. As the service would use existing terrestrial radio transmitters, it would initially only be available in major centers. The application proposes a 50 channels service, all of which would be produced in Canada by CHUM. A satellite delivery option would be available by 2010. The proposed monthly cost would be $9.95 CAD
Satellite radio technology has been available in the United States since September 2001, when XM Radio launched their service. Since that time, subscriber counts have exploded, netting XM Radio more than 1 million new subscribers every year. As a result, many Canadians have already opted to subscribe to XM Radio and Sirius Radio via gray market subscriptions.
The CRTC’s long decision process has also added to this growing problem as well. As many will recall, this is eerily similar to the gray market digital satellite TV issue that has been waging since 1995. A long delay due in part to stringent Canadian content requirements and requirement of use of Canadian Satellites for delivery had caused more than a 2 year delay in getting a Canadian satellite television service to market. In that issue, the CRTC imposed a heavy 50% Canadian content requirement. Additionally, only one Canadian satellite was available at the time for delivery, which was insufficient the 2 fully operational services. The result was a gray market problem that had exploded into more than 100 000 subscriber by the time the Canadian services had finally gotten to market in mid 1997.
It remains to be seen if the CRTC will bear this in mind when reviewing the satellite radio applications. As there are no Canadian satellites capable of delivering a satellite radio service, the applicants depend on use of existing U.S. satellites that are currently broadcasting U.S. services. Because of this, their bandwidth is limited and they would not be able to offer a huge lineup of Canadian produced channels. Construction and launch of a dedicated satellite radio satellite would take more than 2 years and its unlikely that the smaller Canadian market would be able to offset the huge costs of such as project. If the CRTC imposes heavy Canadian requirements on programming, we may have déjà vu all over again and it would surely lead to an out of control satellite radio gray market, which Canadian broadcasters would be hard pressed to compete with after along delay in startup.
The CHUM application certainly offers more Canadian content, however they would be limited to major centers with initial terrestrial broadcasts only. This has significant disadvantages and would not likely curb the growing satellite radio gray market problem in Canada.
XM Radio and Sirius currently have limited satellite bandwidth, due to a fully operation U.S. service, which would likely limit their possible Canadian channel capacity to 10 channels or fewer. A CRTC requirement for more than this would likely only be possible with a reduction of U.S. services, which would not be very popular with their U.S. subscribers. The possible upside of successful licensing is that the U.S. services may also offer the Canadian channels to their subscribers, which would strongly benefit the Canadian channels.
The CRTC has before them a number of decisions in regards to the application in addition to the appropriate amount of Canadian content. They must also decide what amount of revenue would be set aside to fund Canadian content. The Canadian content must offer both English and French content. They must also decide how many Canadian services the market will support, as well as weigh the impact it will have on already licensed Canadian radio broadcasters, including the terrestrial repeaters for major centers.
If the two satellite services are successful in receiving licenses, Canadians already subscribing to the U.S. services will be able to switch to the Canadian service once available. Depending on the CRTC's conditions of license, this may require the purchase of a new Canadian only satellite radio conditional access module, which plugs into a satellite radio ready head unit. Although the services would be using identical technology to its U.S. service, its likely that the CRTC will require a marked satellite radio module that would prevent Canadians from subscribing to the U.S. service using it.
Indeed, it will be interesting to see next week’s decision. Hopefully the CRTC will weigh previous mistakes to avoid a repeat.
©2005 Digital Insurrection