Is there room on Canadian cable for more than one shopping channel?

Northern Response (International) Ltd is anxiously awaiting a CRTC decision on a cable system swap that could impede its future distribution on cable. Rogers Communications Inc and Shaw Communications Inc are seeking approval to swap cablecos in eastern and western Canada. If approved, the deal would see Rogers owning more systems in Quebec, New Brunswick and Southern Ontario. Rogers owns The Shopping Channel and Northern Response has been trying for years to launch a competitive service. In a recent letter to the CRTC, David Flynn, Northern Response’s corporate counsel warns its situation will worsen if Rogers wins control of even more systems. An abbreviated copy of his letter appears below: Rogers owns and operates the only national live shopping channel in Canada, The Shopping Channel. In the U.S. (there are) a number of live shopping channels to choose from, but curiously in Canada there is only one. For a number of years Northern Response has attempted to launch a live shopping channel in Canada. There have been a number of barriers to entry that it has tried to overcome, but by far the most significant has been access to cable systems. For many years Northern Response has attempted to gain access to Rogers’ cable systems, but Rogers has never granted access. The increased power that Rogers will possess in the Greater Toronto Area (as a result of its acquisition of cable systems owned by Shaw Communications) will only exacerbate Northern Response’s access problems. Northern Response has obtained a foothold in the Greater Toronto Area by investing in and launching an infomercial channel on Shaw’s GTA systems. If Rogers were to discontinue broadcasting Northern Response’s tele-shopping service after the proposed cable asset swap it would have a significant negative impact on competition in the tele-shopping industry. The loss of investment would be financially crippling to Northern Response. Furthermore, if Rogers were to cease broadcasting Northern Response’s service it could be viewed as Rogers using its huge market power to stifle competition and conferring an undue preference upon itself... The commission must be especially concerned with the tele-shopping industry because of the future of interactive television. Tele-shopping is a natural fit for the upcoming interactive TV technology. Viewers will be able to find out more information about and order the products that they see on television. In this sense interactive television is poised to provide a more rich experience to consumers than the internet currently provides. Tele-shopping is the very foundation on which interactive television will be built. It is vitally important that Canada develop more companies capable of providing such services. Next to The Shopping Channel, Northern Response is one of the few companies currently ready to provide interactive tele-shopping services. The value and contribution of tele-shopping programming to the Canadian consumer and to the broadcast system in general needs to be recognized on equal footing with other types of programming. In order to consider the true impact and cost of the proposed asset swap the commission should require Rogers to submit its channel line-up plan indicating which channels it plans to add, delete, or move. This would also allow other companies to plan accordingly. This approach prior to the asset swap would encourage Rogers to use its best efforts to consider the interests of all parties involved. In addition, in a post asset swap environment it is likely Rogers will carry one channel line-up throughout the entire GTA. In this case where channels need to be dropped to accommodate this merging of channel line-ups the commission should attempt to identify and encourage the deletion of channels with questionable contribution to the broadcasting system, such as alphanumeric services. In view of the concerns outlined above related to the potential removal of channel offerings, and the need to ensure that regional consolidation does not stifle competition, Northern Response believes that it would be appropriate for the commission to attach conditions of license to this transfer which will ensure continuity of service offerings to subscribers, including but not limited to Northern Response’s tele-shopping service.

Is there room on Canadian cable for more than one shopping channel?

Broadcast | October 13, 2000

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