TekSavvy asks CRTC for help to launch TV service

GATINEAU, Que. — Independent ISP TekSavvySolutions Inc. told the CRTC Tuesday it is considering becoming a TV distributor, on the same day that it announced a “partnership” with Hastings Cable Vision Ltd., an eastern Ontario cable provider. TekSavvy CEO Marc Gaudrault said his customers watch “a lot of television,” that more than half of the traffic carried by the company is streaming video, and that the company needs to get into the broadcast-distribution business “because it’s what our customers want.” “But at the same time, our ability to provide a BDU … is crippled by regulatory barriers that don’t make a lot of sense to us,” such as prohibitive bandwidth costs, he said. Speaking as part of the CRTC’s two-week hearing into the future of television, Gaudrault added that while telecom tariffs aren’t a broadcast issue, “the underlying costs of providing BDU competition have got to be something you can look at under the Broadcasting Act.” He said that the company has been looking into the costs of providing TV service using the CRTC’s wholesale regime, and has estimated bandwidth costs of doing so at $30 per subscriber each month and $80 with PVR capabilities. “That’s just bandwidth — before we pay for content or anything else,” Gaudrault added. Bram Abramson, TekSavvy's chief legal officer, told the CRTC panel that the company’s user base “has sort of gotten older and had families. Some of them are cord-shavers or cord-nevers who now actually want BDU service.” The question of whether young people who have never had a TV subscription will eventually get it surfaced at the hearing last week, when Rogers Communications Inc. vice-president of regulatory affairs, Ken Engelhart, told the CRTC that the industry should not assume they will. Other factors driving TekSavvy’s interest in providing television service include capturing revenue from the large amount of video it already carries across its network, and retaining customers who might otherwise leave for competitors who offer TV, Abramson said. “It’s more and more simply something that we ought to do. Do we see it as something that we will always have to do? No crystal balls here, but … there’s a window, and when that window closes, it will not be as compelling a thing,” he said. Abramson also asked the CRTC to “tweak” the digital media exemption order “in order to provide for BDUs to be started up that run OTT.” “It’s something that will allow a lot of new Canadian BDUs to start up and compete in the marketplace,” he said. Saskatchewan Telecommunications Holding Corp. also appeared at the hearing on Tuesday. Stacey Sandison, SaskTel’s chief marketing officer, said capping a smaller basic TV service at $30, as the CRTC has suggested, “is uneconomical for us.” “If the smaller basic service is accepted, we will be forced to consider increasing our retail prices for discretionary services or introducing new policies like installation fees, termination fees, fixed-term contracts and equipment fees to recoup the cost of our installation and other fixed costs,” she said. Rhonda Carsten, director of marketing for SaskTel’s MaxTV and Internet, told the CRTC that “when you include all of the fixed costs in addition to the content fees … what we found is that our costs exceed the price point that were recommended in the commission’s proposal.” CRTC commissioner Candace Molnar pointed out SaskTel’s basic service includes sports channels, which are expensive. Carsten said that before those channels were included in basic, some customers would sign up for a few days in order to watch a specific game and then drop the channel once they had watched it. “This was a common, ongoing happening in our market, which was driving huge operational costs,” she said. — With reporting by Anja Karadeglija at akarad@thewirereport.caand editing by Derek Abma at dabma@thewirereport.ca

TekSavvy asks CRTC for help to launch TV service

Broadcast | September 16, 2014

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TekSavvy asks CRTC for help to launch TV service

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