GATINEAU – Tuesday afternoon, BCE president and CEO George Cope (who looked a little grey as he fought through a bad cold) was unequivocal when it came to MPEG-4 video compression technology: Without benefits money, the company won’t do that upgrade.
Ever.
Bell’s proposed benefits package proposes an MPEG-4 conversion for Bell Satellite TV that would then see it able to carry all local OTA TV stations which are eligible for the local programming improvement fund (LPIF is a fund created by the CRTC in 2009 to assist small local TV broadcasters). Those local ‘casters have long complained that the fact they aren’t on satellite in their own communities has a huge negative impact on their businesses. Bell insists it does not have the capacity currently to lift those stations.
The cost for this part of the package? $84 million (or 38% of the total $220.8 million in proposed tangible benefits). That would cover the cost to swap out the company’s over three million MPEG-2 set top boxes in the market (the company wouldn’t divulge the number, but with nearly two million subscribing households, the number of boxes are north of 3 mil).
Commissioners, however, were worried that the benefits package would distort the competitive market as a benefits-paid-for MPEG-4 conversion would mean space not only for the 30 uncarried LPIF-eligible stations, but for other commercial services too.
At that point, Cope interrupted: “We will not do MPEG-4 as Bell if the benefits package doesn’t allow for it. We just won’t do it.”
Commissioner Louise Poirier pushed the issue, asking how much more space would be available, beyond the 30 locals, for Bell to make money with other specialties and whether the benefits package money would be funding that.
“No. And yes,” said Cope. “The new capacity does not happen without this benefits package.”
At that point, CRTC chair Konrad von Finckenstein interjected, saying “You’re getting quite a bit of extra capacity… a huge benefit. Why should we pay for all that extra capacity that you now are getting?” He further asked doesn’t Bell have to move to MPEG-4 anyway?
Cope said no, he doesn’t believe Bell has to necessarily go MPEG 4. “With the growth of IPTV and what we’ve seen of its competitive advantage,” he doesn’t think the company will need to go MPEG-4
“We’ve had a hard time with this one,” he added.
• Bell is holding its line on exclusive content, it appears, letting commissioners know that it will offer the content it owns “on a commercial basis” but also keeping some for itself, if it wants. “There will be other service providers who will want content from us and we will be open to supplying it on a commercial basis, just as we will continue to utilize non-CTV content when it makes sense to do so,” said Cope.
However, the CEO also added: “We foresee ourselves, for example, generally adopting a subscription-based wireless distribution model, much like the one currently used by specialty services in the linear broadcasting world. There may be some cases where we choose to offer content that is exclusive to our services, but of course, in whatever we do, we will always respect the Commission’s rules against undue preference. However this evolves, the result will be new and innovative approaches which will benefit viewers.”
• Bell is leaving the “Freesat” idea to Shaw. In its original benefits proposal, Bell has said it would spend $10.8 million to bring satellite TV to areas where OTA TV is removed completely following the digital transition. In the benefits proposal released Tuesday, that’s gone, leaving it to Shaw, which will spend $15 million on doing the same thing for the 38,000 or so Canadians statistics say will have no TV when the analog TV transmitters are turned off. Shaw will provide satellite receivers and free programming to qualifying households so that they can receive local and regional over-the-air signals on Shaw satellites.
• Morning shows are back in vogue in the regions. After a number of years where the traditional early morning TV news and lifestyle broadcasts were cut back or shuttered, Bell has promised new shows out west (which will compete in some markets with new AM shows Shaw committed to in its benefits package). Bell’s package calls for $12 million in spending on new morning news shows in Winnipeg, Regina, Saskatoon, Edmonton and Calgary.
Watch for more from the hearing Wednesday morning as Telus, Cogeco, the CMPA and numerous others face commissioners.
