Multichannel television in Canada

Many Canadians now receive their television service through some sort of multichannel television platform, such as cable, satellite and internet protocol television as opposed to an antenna-based system providing only conventional broadcast television stations. While the technical details of these platforms differ, the governing Canadian Radio-television and Telecommunications Commission (CRTC) regulations are similar for all providers.

Platforms

There are two main multichannel distribution platforms in Canada. The first, and by far the largest, is cable television, the other being satellite television. Multichannel multipoint distribution services and low-power broadcast subscription channels are available in some markets.

Cable television

History

In 1949, the Broadcast Relay Service began negotiations for the implementation of what was to be the first large scale cable television system in North America. The development of the system relied on reaching an agreement with the Quebec Hydro-Electric Commission to utilise their existing network of power poles supplying power to the Montreal metropolitan area. Initial discussions began with a meeting with the Montreal City Council on June 21, 1949. After many months of negotiation, an agreement was reached between Hydro Quebec and Rediffusion Inc. on February 28, 1950 for an initial five-year period. The Rediffusion cable system began operation in 1952, and eventually supplied 80,000 homes in Montreal, Quebec.

Cable television in Canada began in 1952 with community antenna connections in Vancouver and London; as to which city was first to launch such a service is not clear. Initially, the systems brought American stations to viewers in Canada who had no Canadian stations to watch; broadcast television, though begun late in 1952 in Toronto and Montreal, did not reach a majority of cities until 1954.

In time, cable television was widely established to carry available Canadian stations as well as import American stations, which constituted the vast majority of signals on systems (usually only one or two Canadian stations, while some systems had duplicate or even triplicate coverage of American networks). During the 1970s, a growing number of Canadian stations pushed American channels off the systems, forcing several to expand beyond the original 12-channel system configurations. At the same time, the advent of fibre-optic technology enabled companies to extend their systems to nearby towns and villages that by themselves were not viable cable television markets. In 1977-78, regional cable services such Telecable and Cable Regina in Saskatchewan began to emerge, offering access to American networks for the first time, though a third system, CPN, which offered specialty channels such as HBO, failed after two years.

Specialty television channels available only on cable began to be established in 1983, and systems continued to expand and upgrade their channel capacity, notably by deploying fibre-optics to carry signals as far as neighbourhoods before converting to coaxial cable for the final run to the customer premises. The use of fibre optic cables as far back as the 1970s does not imply that cable companies were using digital methods to transmit signals as is sometimes assumed by the modern viewer, this is a common misunderstanding. Methods were developed and deployed as far back as the 1970s to transmit analog video using frequency division multiplexing via fibre-optic cabling. Digital signaling is a much more modern practice which only began in the early 2000s. Two-way capabilities were introduced, and larger systems were able to use "addressable" descramblers to offer pay television services and different tiers of channels.

Cable television began to face serious competition from DTH satellite services in the late 1990s. Telephone companies and cable television providers have since been permitted, in most parts of Canada, to compete to provide services originally provided by the other. Cable television services are not the prime providers of broadband Internet in Canada, but they are a very strong competitor for the service.

During the early 1970s, Canadian television stations obtained regulatory rulings that required cable television operators to substitute their signals for distant (usually American) stations carrying the same television program at the same time. This was to protect the stations' advertising sales.

Many systems were originally locally owned, and many large cities had several providers each covering specific sections of a city; sometimes these territories were established by a "gentleman's agreement" between system owners. Hamilton, Ontario, had six different operators. London had two, with a very convoluted dividing line in the old south neighbourhood; Rogers eventually bought the companies that ran those two systems, merging them, a pattern repeated elsewhere. Even before mergers, companies in the same community collaborated to operate the community channel.

A long series of consolidations and acquisitions rapidly brought most major cities' systems under the ownership of a small number of large companies. Some of the largest companies even applied for regulator permission to swap systems in order to consolidate their operations: Shaw sold systems in eastern Canada to Rogers, buying Rogers systems in western Canada.

Presently, cable is provided to most cities and towns, depending on the region, by companies such as Rogers Cable, Shaw Communications, Vidéotron, Cogeco, Cable Axion, Dery Telecom and EastLink. Most of these "first-generation" cable companies do not compete with each other, as the CRTC has traditionally licensed only one cable provider per market. Even in markets where more than one distributor has been licensed, each has an exclusive territory within the market.

IPTV

In the early 2000s, IPTV services began to emerge in some markets as an alternative to cable. IPTV service is typically delivered via a phone company's copper lines or fibre optic networks over a private, internet protocol network.^[1]

IPTV adoption is particularly large in Western Canada; Saskatchewan's SaskTel was the first to launch an IPTV service, followed by Manitoba Telecom Services in 2004, and later Telus in Alberta and British Columbia. Bell Canada has offered IPTV in Atlantic Canada under the FibreOP brand, and in Ontario and Quebec under the Bell Fibe TV brand.^[1]

Satellite television

In Canada, the two legal DBS services available are Bell TV and Shaw Direct. The Canadian Radio-television and Telecommunications Commission has refused to license American satellite services, but nonetheless hundreds of thousands (up to a million by some estimates) of Canadians access or have accessed American services^[2] – usually these services have to be billed to an American address and are paid for in U.S. dollars, although many viewers receive American signals through pirate decryption. Whether such activity is grey market or black market is the source of often heated debate between those who would like greater choice and those who argue that the protection of Canadian firms and Canadian culture is more important.

In October 2004, Quebec judge Danièle Côté ruled Canada's Radiocommunication Act to be in direct violation of the Canadian Charter of Rights and Freedoms, insofar as it bans reception of unlicensed foreign television services. The judgment gave the federal government a one-year deadline to remedy this breach of the Constitution. However, this contradicts prior Supreme Court of Canada decisions and, at last word in late 2004, was expected to be appealed.

In addition, Canadian satellite providers continue to be plagued by the unquestionably black market devices which "pirate" or "steal" their signals as well as by a number of otherwise completely lawful devices which can be reprogrammed to receive pirated television signals.

Karl Péladeau, CEO of Québecor (which owns cable television provider Vidéotron) is on public record as demanding conditions be placed on the CRTC license issued to Bell TV, due to Bell TV’s reputation for vastly inferior security compared to its cable rivals and Shaw Cable-owned Shaw Direct.

Although there are no official statistics, the use of American satellite services in Canada appears to be declining as of 2004.

Some would claim that this is probably due to a combination of increasingly aggressive police enforcement and an unfavourable exchange rate between the Canadian and U.S. currencies. As the U.S. dollar has been declining as of 2005 versus other international currencies, the decline in DirecTV viewership in Canada may well be related not to a cost difference as much as to the series of smart card swaps which have rendered the first three generations of DirecTV access cards (F, H and HU) all obsolete.

Other platforms

In some areas, an additional option is a form of over-the-air broadcasting, either via a multichannel multipoint distribution service, also known as "wireless cable", or via encrypted low-power transmissions in the NTSC format. This type of distribution is most commonly used in the territories (Yukon, Northwest Territories and Nunavut), which are too sparsely populated to make conventional cable a financially viable operation. The fate of such capacity-limited services, heading into the era of digital television, is uncertain.

Programming

Specialty channels

Most specialty channels (legally known as "specialty television programming undertakings"), unlike their counterparts in the U.S., must be licensed by the CRTC. To prevent them from airing programming from outside their designated format, the CRTC recognizes certain categories of programming, and limits or restricts the ability for networks to air certain amounts of programming outside of its primary categories. For example, entertainment-based networks are typically forbidden from airing sports programming (unlike U.S. equivalents such as TNT, which airs NBA basketball, instead aired in Canada on sports networks), while sports networks are allowed to air a small number of films (they are typically restricted to films that are themed around sports, however).

Certain classes of specialty channels are subject to genre protection rules, which prevent them from directly competing against another service with a similar format; for example, to protect TSN, The Score (now Sportsnet 360) was specifically licensed to serve as a sports news service (instead of a mainstream, national sports network), and is limited in the amount of live programming it can air. However, following inquiries into the matter, the CRTC announced in 2009 that it would begin to allow leeway in certain broader categories, such as news and sports.^[3]

Specialty channels are divided into four categories by the CRTC:

Category A services – services with mandatory carriage in one or more discretionary packages of a digital television service provider. Category A services are subject to high Canadian content requirements, and are also subject to genre protection rules; no other services can broadcast in a format that directly competes with a Category A service. Certain Category A services are only subject to mandatory carriage in certain regions; for example, most French language Category A services are only mandatory in Québec, and can be carried on a discretionary basis outside of the province. Since 2011, Category A has also contained the previous "dual-status" and "modified dual-status" channels for mandatory and discretionary carriage on analog cable television services.^[4] Examples of Category A services include AMI-tv, Cottage Life, MuchMusic, Showcase, The Weather Network, and YTV.
Category B services – channels with no mandatory carriage in digital-service discretionary packages. Unlike the other types described above, these channels have no protection from other Category B channels within the same niche but have lighter Canadian content regulations. Examples of Category B services include BBC Canada, Comedy Gold, FX, Investigation Discovery, and W Movies.
Category C services – services in genres that the CRTC has exempted from the genre protection rules. Similarly to Category B services, they are protected by competition from Category A and B services, but are allowed to compete against each other, and also utilize standardized conditions of license.
Exempt – Certain types of services are exempt from CRTC licensing, such as channels whose content consist purely of text and graphics without video content, and channels which consist of only teleshopping and/or infomercials. In December 2012, the CRTC also exempted from formal licensing services with less than 200,000 subscribers that would otherwise meet the definition of a Category B service, and services which air 90% of their programming in a language other than English, French, or languages of aboriginal peoples.^[5]

As part of "Let's Talk TV", an initiative to implement reforms of Canada's broadcasting industry, the CRTC announced in 2015 that it planned to phase out the genre protection rules, as well as Category A by 2017 for larger conglomerates, and 2018 for independent broadcasters. The CRTC cited new regulations on how television providers must package their services—including a mandate to offer "pick and pay" purchasing of individual channels by December 2016, and a future requirement for vertically-integrated providers to offer a service owned by a third-party for each co-owned service they offer; the Commission felt that these restrictions were "no longer needed to ensure programming diversity between services", as "[they] limited programming services to offering certain types of programming and precluded other services from offering that programming."^[6]^[7]

Foreign channels

In addition to these specialty channels, certain foreign channels, most commonly American cable networks such as CNN and Spike, are permitted.

In general, foreign channels are permitted provided that they are deemed not to directly compete with Canadian channels at the time of their introduction. In rejecting a 2003 application proposing the addition of several U.S.-based channels, the CRTC stated that by allowing Canadian channels to maintain control over these types of programming, they are able to fully access the available advertising and subscription revenues, which would otherwise flow outside the country, in order to fund Canadian programming.^[8] Examples of well-known U.S. channels not permitted in Canada include FX, Nickelodeon, ESPN, HBO, Showtime, USA Network and TNT (however, Canadian broadcasters have since launched licensed versions of FX, HBO and Nickelodeon, while TSN is minority-owned by ESPN); nonetheless some Canadians choose to subscribe to these channels via the grey market, as outlined above. Although it is not an approved foreign cable channel, TBS was also available in Canada until 2007 via the superstation WTBS (now WPCH-TV).

The commission is also permitted to revoke a foreign channel's status should another channel launch within the same genre. However, the only time the CRTC has unilaterally removed an American channel from the eligible services list – that is, without the consent of the American broadcaster – was at the launch of New Country Network, when the American channel CMT was removed. This led to a protracted dispute eventually resolved by the sale of a stake in NCN (now CMT Canada) to CMT. Since then, the CRTC has been more lenient on existing eligible channels; Spike and Comedy Central have retained their eligibility despite the launch of mentv and The Comedy Network. Even if a channel is approved, other issues such as programming rights may prevent their carriage, as in the cases of Comedy Central and, until late 2006, AMC and TCM.

U.S. cable networks are not subject to the same simulcast rules as American broadcast stations. However, unlike the broadcast stations, cable networks must own all applicable programming rights, and may be forced to provide alternate programming if they do not. For example, even though NBC's Olympic Games and NHL coverage is available in Canada via U.S. affiliates, broadcasts of these programs on cable networks such as CNBC or MSNBC are normally blacked out and replaced with alternate programming, in deference to the respective rights of CBC or Rogers Media.

Premium services

"Pay television" services were launched in Canada in the early 1980s but were largely unsuccessful in their original form. Many shut down, and two (TSN and MuchMusic) converted to specialty services as that format became more successful. However, movie-oriented premium services, including The Movie Network, serving Ontario eastward, and Movie Central, serving Manitoba westward, and French-language Super Écran, all successors to the original general-interest pay services, have become very successful and very profitable, more so in recent years thanks to the shift towards digital terminals and the success of original series from sources such as HBO. These services had operated in a virtual monopoly in their respective markets, although Allarco Entertainment received a licence to compete nationally with the two English services, creating Super Channel in 2007.

Family Channel is also licensed as a pay service and airs commercial-free, but is now treated by most providers as a specialty channel and is packaged with other specialty channels.

Many third-language or "ethnic" services licensed for analog distribution are mostly treated as pay television services by cable and satellite operators.

Cable/satellite packaging

Under CRTC regulations,^[9] a basic cable or satellite package in Canada must include:^[10]

all national CRTC-licensed networks, specifically CBC Television, Ici Radio-Canada Télé, TVA and APTN;
all local or regional broadcasters, usually including stations/affiliates of CTV and Global, and (where applicable) City, CTV Two and V. Satellite providers carry most but not all local stations, and, unlike their U.S. equivalents, out-of-market stations may be carried nationally;
the provincial educational broadcasting service(s), such as TVOntario or Knowledge Network (if one is available, as not all provinces have one);
CPAC, which broadcasts parliamentary sessions and committee meetings, along with some political public affairs programming;
a similar channel broadcasting the proceedings of the provincial legislature (if one exists); and
AMI-tv and AMI-audio (the latter usually carried on the SAP service of CBC News Network).
Ici RDI in anglophone markets, and CBC News Network in francophone markets.
Cable providers are also required to carry at least one CBC Radio station in each language, as well as any local campus, community or native radio stations. The requirement to carry all stations was removed by the CRTC in 2006.^[11] At the same time the commission stated that this requirement did not, and would not, force cable companies to provide these stations via cable FM receivers, provided they were available as audio channels on the digital service.^[12]

This basic package must be sold at a maximum rate of $25 per-month.^[10] Traditionally, the package also includes

selected specialty channels, at a minimum including CBC News Network, RDI, The Weather Network and/or MétéoMédia, CTV News Channel and/or LCN and VisionTV;
a community channel (featuring locally-produced public affairs and information programming and community events listings);
American broadcast network affiliates. These are carried under a "4 + 1" rule, meaning that a cable company may offer stations affiliated with any four American commercial networks and PBS on a basic tier. In most markets, the four commercial networks provided are ABC, CBS, NBC and Fox, although in many markets Fox is carried on a modified dual-status rather than a basic tier. Other networks, such as The CW and MyNetworkTV, can only be offered on a discretionary tier; generally they are offered through the packaging of American superstations, such as KTLA, WPIX and WGN-TV, with pay television services. However, cable providers in border markets within the broadcast range of a major American television market, such as Windsor, may be granted an exemption to the 4 + 1 rule to improve the marketability of their service – Cogeco Cable systems in Windsor carry Detroit's WKBD-TV and WMYD;
Timeshift channels, including east and west coast feeds of certain specialty channels, and Canadian/U.S. network affiliates from cities in different time zones (such as Seattle, Spokane, and Vancouver);
"exempt" services such as The Shopping Channel, program guides, and real estate/classifieds channels;
A digital radio service, offering local radio stations, and the national specialty radio service Stingray Music.

Other "discretionary tiers" or packages include other Canadian specialty or premium services and foreign services, as noted above. The distribution of these services is covered by various regulations, including one that states that a package cannot consist exclusively of foreign services and must maintain a certain ratio of Canadian to foreign services. Additionally, service providers who also own specialty channels are required to adhere to the "3:1 rule"; for each co-owned channel that a provider carries, they must carry three channels owned by a third-party.^[13]

On March 19, 2015, the CRTC announced that by March 2016, television services must offer a basic service, optionally carrying U.S. network affiliates ("Skinny basic"), costing a maximum of $25 per-month, and that by December 2016, they must allow customers to purchase all channels on an individual (a la carte) basis.^[10]

Footnotes

1 2 "What is IPTV? Here's your primer". The Globe and Mail. Retrieved 14 January 2016.
↑ "CTV.ca | Lawsuit targets grey market satellite dealers". Ctv.ca. Oct 21, 2002. Retrieved 2008-09-06.
↑ "Broadcasting Public Notice CRTC 2008-100". CRTC. Retrieved 5 November 2013.
↑ "Broadcasting Notice of Consultation CRTC 2010-931". CRTC. Retrieved 5 November 2013.
↑ "Broadcasting Order CRTC 2012-689: New exemption order respecting certain programming undertakings that would otherwise be eligible to be operated as Category B services, and amendments to the Exemption order respecting certain third-language television undertakings". CRTC. Retrieved 23 January 2013.
↑ "Broadcasting Regulatory Policy CRTC 2015-86: Let's Talk TV - The way forward - Creating compelling and diverse Canadian programming". CRTC. Retrieved 28 July 2015.
↑ "Broadcasting Regulatory Policy CRTC 2015-96 - Let's Talk TV - A World of Choice - A roadmap to maximize choice for TV viewers and to foster a healthy, dynamic TV market". CRTC.
↑ Letter to the Canadian Cable Television Association, CRTC website, November 7, 2003
↑ Broadcasting Distribution Regulations, CRTC website, accessed August 15, 2006
1 2 3 "CRTC rules cable companies must offer pick-and-pay channels, $25 basic package". CBC News. Retrieved 19 March 2015.
↑ Broadcasting Public Notice CRTC 2006-119, 8 September 2006
↑ Broadcasting Public Notice CRTC 2006-51, 19 April 2006; see para. 26
↑ Corus Entertainment. "CRTC Application 2012-0197-0 (.zip format)". Retrieved 2012-04-11.

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