DESPITE THE IMMINENT SHUTDOWN of the Canadian Cable Telecommunications Association, a move which will cost 26 jobs, Canada’s smaller independent operators have already decided they must have a continuing presence in Ottawa.
As reported first by www.cartt.ca early Friday afternoon, Rogers Cable, the largest remaining member of the CCTA, decided to rescind its support of the association, effectively killing it – even though no other member wanted to pull the plug. Even Rogers didn’t really want to do it.
However, no CCTA member is blaming Rogers for the demise of the 50-plus year-old association. Indeed, the CCTA’s board of directors, including those from Rogers, looked at every scenario possible to keep the association running, despite the $2 million in fees lost from the departure of Shaw Cable. From cutting some services and some people to even approaching Videotron and Shaw again – which Rogers executives did – to see if they would reconsider membership, the board explored everything.
"Once Shaw was gone, we looked at various models to make it work," CCTA acting chairman Dean McDonald told www.cartt.ca on Monday. "We looked at every possible scenario."
But, both Videotron and Shaw held firm and none of the potential business plans and possible go-forward strategies made sense and in the end, a national association missing both the largest western cable company and the largest Quebec cable company simply couldn’t continue with one remaining giant member.
The CCTA membership accepted Videotron’s departure in 2002. The company faced many financial hurdles back then and had been recently acquired by a cable industry outsider. Plus, with Cogeco maintaining a substantial presence in the province, the association could and did live on without the Quebecor-owned MSO.
Shaw’s abrupt departure in December is another matter. CCTA members say they feel betrayed by the Calgary company’s decision. Shaw announced it was quitting on December 6th, less than two-and-a-half months after Shaw president Peter Bissonnette was appointed chair of the board. According to some board members, Bissonnette and his team at Shaw had undertaken a strategic review of the future direction of the association and were supposed to discuss it at a board meeting that week. However, on the evening of December 5th, their Blackberries all buzzed with an e-mail saying instead that Shaw was cutting its association ties.
The board members and CCTA membership overall had another good reason to be surprised. It took nine months for the CCTA to officially name Michael Hennessy president in June of 2004, after past president Janet Yale left for Telus. The association faced a turning point at that time, too, because rumors were rampant that Shaw wanted to quit then. The question on every potential president’s mind, including that of Hennessy’s, was that if they took on the job, there had to be some kind of security attached.
So, in order to quell the rumors in Ottawa and in the industry – and to get on with business – several sources told me Shaw committed to five more years with the association in 2004. Now the fact that the company left less than two years into that five-year commitment has left Shaw’s fellow cable operators, well, steamed.
"What Shaw has done is destructive," said Mountain Cable founder Owen Boris. "It took (over 50) years to construct a respected, powerful association that has served the industry extremely well and in one fell swoop – for their own reasons which they didn’t even tell us – they pulled the rug out from under us."
So what happens next? The flurry of phone calls across the industry of late is placing a lot of focus on the tiny community of Quispamsis, N.B., home of the Canadian Cable Systems Alliance. It has a previously scheduled board meeting set for February 23rd and this will be the dominant agenda item.
"It will be the centrepiece of our discussions," CCSA president and CEO Alyson Townsend said, cautioning that no final judgment has yet been passed. "It will be a board and membership decision," she added.
The CCSA’s current mandate says it is primarily a collective buying group built to save its 90 member companies as much money as possible on programming, technology and other items like insurance. Its lobbying efforts have been targeted, but many CCSA member companies were also CCTA members and they were content to let the national association assume the bulk of the regulatory role.
Not one of those members wanted the CCTA to go and all of them want some kind of presence in Ottawa to handle the regulatory matters that they, as small companies, for the most part can’t handle. "We are concerned because no one feels capable of dealing with the hundred issues that the CCTA has been dealing with on our behalf," said Boris.
So, the way the thinking is going among those from the size of Cogeco on down, is the CCSA – with an expanded mandate – just might fit the bill.
"It’s up to the members to decide if it’s a good idea and about the cost of doing it," said MacDonald, the president and CEO of Persona Communications, which is the CCSA’s second-largest member after EastLink. "Out of necessity, something is going to happen."
But to do that "something" well, whatever emerges from the ashes of the CCTA has to include Cogeco Cable, the country’s fourth-largest MSO and from what we’re told, a very vocal opponent of shuttering the CCTA.
While Cogeco CEO Louis Audet was not available to speak Monday, company spokesperson Marie Carrier said, "he’s pretty sad that it happened."
Boris is hopeful that Cogeco and its 830,000 or so customers will come on board.
"I talked to Louis (Audet) and he wasn’t firm, but he said he’d be prepared to join the CCSA and that’s the key," said Boris, who owns the second-largest Hamilton cable operator, behind Cogeco. "Then we would have adequate funding from members to transfer about five people from CCTA to CCSA… It would be a smaller group focused on issues affecting smaller operators."
However, said Carrier, "it’s too early to say if we’re going to or not. We’re evaluating the possibilities."
While all have praised the work done by the CCTA – and some of the work will continue as Canadian MSOs will work together on some files (such as VOIP), no matter what – it seems as though an expanded role for the CCSA looks to be a safe bet. Something could come together at next week’s board meeting – or sooner.
"The CCSA has been run extremely efficiently over the past few years," added MacDonald. "This is a real opportunity for the CCSA to have a bigger impact on its members."
"It could stand on its own two feet with Cogeco in," concluded Boris, who wants to act quickly before the talented folks at the CCTA find new jobs.
We’ll have to wait and see but with over a hundred small cable companies still in existence in Canada – most of whom provide broadband access, often in some pretty small communities that are in Conservative ridings, too (not a small consideration given the recent change in government) – it doesn’t look as though the cable industry will be without a presence in Ottawa for long.
