Independently-operated Ontario cablecos share headend to offer new digital services

A group of small cable operators in southwestern Ontario has pooled resources to share a digital headend, rejecting more economical but more restrictive digital solutions offered by Canadian Satellite Communications Inc. (Cancom). The move will allow the cablecos to source digital signals from any provider rather than exclusively from Cancom. The digital headend, located in Dublin ON, is connected to each of the independently owned- and operated-systems by fibre. Three of the four cable operators have already launched digital cable, while the fourth hopes to roll out service soon. "We’ve got a full blown digital headend. We’re doing nothing different than what Rogers, Shaw and Cogeco are doing," Ian Stevens, operations manager at Thedford ON-based Execulink Cablecom Inc., tells Canadian Communications Reports. "A big benefit is that we aren’t stuck with Cancom as a supplier. None of this costs five dollars, but it gives us the opportunity to source from non-Canadian sources. We haven’t been able to do that yet, but the opportunity is there." The CRTC confirmed in December 2001 that small cablecos could buy U.S. 4+1 signals from foreign satellite operators (CCR, Dec. 19/01). With a broader definition of small cablecos in its digital migration policy for small systems, the commission extended the systems permitted to source U.S. 4+1 signals from non-Canadian sources from those with 2,000 or less customers to any cableco "not owned or operated, directly or indirectly, by Rogers, Shaw, Vidéotron and Cogeco." (CCR, Jan. 18/02). More and more small cablecos are deploying digital cable service but these cablecos face many challenges, not the least of which is cost. The cost of constructing a digital headend is prohibitive for many small cable operators – several hundred thousand dollars – which is why many have opted for Cancom’s HITS (Headend in the Sky) and HITS-QT (QAM Technology) (CCR, March 15/02). Opting for their own digital headend, the cable operators say it gives them more flexibility, doesn’t tie them to receiving signals from Cancom, and allows for a RF return path via cable necessary for two-way services such Internet access and interactive television. By going this route, however, the cablecos are paying out significantly more than if they each independently went with HITS-QT, or probably even HITS. "We’re all neighbours so we chat and we thought it would be best to have something a little better than HITS, because HITS has its limitations with regard to return path," Stevens says. "We thought it would be nice to explore. It turned out to be a reasonable opportunity, and we’re close enough (to share the same headend). It just worked out." Execulink is still working out packaging and pricing for the digital service it hopes to start marketing to its customers at the end of this month. The other cable companies tapping into the headend are Bluewater TV Cable Ltd. and its affiliated company Ex-Cen Cablevision Ltd.; affiliated cablecos Mitchell Seaforth Cable TV Ltd., Grand Bend Cable TV Ltd. and Ward Cable TV Ltd.; as well as Kincardine Cable TV Ltd. Based in Clinton ON, Bluewater and Ex-Cen, with a combined customer base of between 7,000 and 8,000 depending on the time of year in the cottage country, was the first of the group to launch digital in July. Mitchell Seaforth Cable, Grand Bend Cable and Ward Cable, serving about 5,500 customers, used the shared headend to launch digital this month. "It’s a bit early to judge the response to our digital offering, but we seem to be right on track," says Dan Harmer, general manager of the Mitchell, Grand Bend and Ward cablecos. Kincardine, with about 5,000 basic cable customers, also launched digital this month. Only the digital headend is being shared by the cablecos in southwestern Ontario; the analog offerings of each of the cable systems will remain the same.

Independently-operated Ontario cablecos share headend to offer new digital services

Broadcast | September 26, 2002

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