FreeHD tells commission Bell, Shaw should move to spot beam satellite technology

New satellite entrant FreeHD Canada Inc. says spot beam technology could solve arguments surrounding the carriage of local, over-the-air channels that broadcasters and satellite television providers are fighting out before the CRTC. In submissions made in advance of the CRTC’s hearing to review its direct-to-home (DTH) satellite distribution policy, scheduled for Nov. 16, the CBC and Canwest Television Limited Partnership argue that Canada’s two incumbent DTH providers, Bell TV and Shaw Direct, need to provide local access to their local over-the-air channels. The broadcasters want each community in Canada to have access to their local CBC or Global channel over DTH. Many communities can only access the local channels of other communities. Both Bell TV and Shaw Direct use national beams for their DTH services that blanket the entire country. Spot beams allow satellites to send separate signals to more specific geographic areas like provinces or metropolitan areas. “From a capacity point of view, you actually get two, three, four times the net amount of capacity for these frequencies available in the satellite using spot beams because you re-use the frequencies as you move across the country,” Brian Olsen, FreeHD Canada’s president and chief operating officer, told The Wire Report in an interview. Olsen said FreeHD Canada has put forward a plan to launch DTH service by next spring using seven spot beams. The beams would make it easier to direct local broadcasts to the right communities. But spot beams must be built into a satellite before it launches. On of the satellites used by Bell TV, Nimiq 4, has spot beam capabilities, but Bell said it cannot use spot beams without making a “significant investment.” Shaw and Bell say that due to the high cost of launching a new satellite, they do not have any immediate plans to add spot beam capabilites. “Launching a new satellite using different frequencies and/or orbital locations to increase physical capacity is an extremely expensive proposition,” Mirko Bibic, Bell’s senior vice-president of regulatory and government affairs, wrote in the company’s Sept. 8 submission the CRTC. “New uplink facilities are required; new subscriber dishes are required. The total cost, including the ground facilities, approaches one billion dollars.” Jacqueline Michelis, a spokeswoman for Bell, added in an email to The Wire Report that, “Spot beam satellites are considerably more expensive to design, build and operate than satellites with national beams.” In the United States, DirectTV and EchoStar/Dish Network satellites have used spot beams for DTH services since 2002. But Michelis said economies of scale allow American companies to use the more expensive technology. “ country like the US has large enough cities and the population to afford the economics of spot beam technology,” she wrote. Bell uses three satellites operated by Telesat Canada that combined have 64 transponders operating on the Ku-band radio frequency. With that capacity the company can distribute 91 standard definition over-the-air channels and 39 high definition (HD) over-the-air channels. But to carry all the local channels available in Canada Bell would have to add an additional 25 standard definition channels and 68 in HD. Shaw Direct has 54 Ku-band transponders at its disposal and carries 69 local television signals across the country. “A requirement to distribute all OTA signals via DTH would require access to satellite capacity that Shaw Direct does not have and cannot acquire,” Cynthia Rathwell, Shaw’s vice-president of regulatory affairs and programming, wrote in the company’s CRTC submission. “Meeting a universal service obligation would require Shaw Direct to drop other signals that it currently distributes.” Bell suggested that it could negotiate with over-the-air broadcasters to offer partial distribution of local content in the right markets. “t would allow Bell TV subscribers in those areas to view the unique local content such as news, weather, sports and other local programs without the Company having to duplicate the entire network programming, which is already available,” Bibic wrote. Bell said that partial distribution would allow it to use its existing capacity more efficiently. But Charlotte Bell, Canwest’s senior vice-president of regulatory and government affairs, wrote in the company’s Sept. 8 submission to the CRTC that partial distribution is not a viable solution for broadcasters. “Each station is firmly rooted in the community it serves, employs local residents, develops and manufactures local programming, promotes and markets the station and its programming, sells advertising to local/regional clients, organizes and attends events in and around the community, and so on,” Canwest wrote, reiterating a previous company position on the matter. “As such, station general managers do not run local programming; they run a local station.” The CBC said in its submission to the CRTC that Bell TV and Shaw Direct should upgrade the video compression they use for their DTH services from MPEG-2 to the more advanced and efficient MPEG-4 compression standard. The CBC said an upgrade in technology would allow Shaw and Bell to carry more local channels under their existing satellite capacity. Bell agreed that MPEG-4 compression will be the next evolutionary step toward offering more content over its DTH service. But Bibic wrote in Bell’s response to the CRTC that customers with standard definition receivers cannot decode MPEG-4 signals. “Because of this large base of legacy subscribers, Bell TV will need to continue to provide a full set of MPEG-2 signals in SD for the indefinite future,” Bibic wrote. He added that upgrading all of its customers’ satellite receivers on the ground would be an expensive proposition considering Bell’s DTH business “has not generated a return to its shareholders in the past 13 years.” Shaw Direct wrote that it has invested more than $1.5 billion into its DTH business since 1995 and it does not expect to recover that investment for another 10 years. Bell TV said it has invested $2 billion into its network. The CRTC will hear from all sides of the debate at a hearing scheduled Nov. 16-18. The deadline for written interventions in the proceeding passed on Sept. 8. jmigneault@thewirereport.ca

FreeHD tells commission Bell, Shaw should move to spot beam satellite technology

Broadcast | September 10, 2010

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