TORONTO – CHUM executive Peter Miller says that Canadians would still be able to get satellite radio if his company’s appeal is upheld, as long as we continue to turn a blind eye to the grey market.
Many Canadians (some say around 40,000) subscribe to satellite radio companies XM and SIRIUS right now, using an American address to sign on as customers.
“We’re not going to prevent Canadians who really want this service for their boat or truck drivers… from getting it, and we’re not suggesting that they shouldn’t get it,” Miller, CHUM’s vice-president planning and regulatory affairs, told www.cartt.ca on Tuesday.
“That’s the grey market. The grey market has always existed. Canadians have always had the ability to access and pay for services directly. We don’t encourage it, but we don’t prevent it,” he explained. “Better to have that limited grey market primarily in rural or remote areas and for certain applications like truck driving or boating than to validate these services with the modicum of (Canadian content) that is on the table.”
CHUM would rather have a thriving grey market (although Miller believes it would stay pretty small) than let the satellite radio license decisions stand as they are. As reported by www.cartt.ca, CHUM, Astral and numerous others have appealed the CRTC’s decision to license the Canadian partners of the American companies here because the level of Canadian content which will be available is far lower than is required of all other Canadian radio and television providers.
“We’re looking at this from the perspective of what this precedent means for the broadcasting system… and it’s also more than just radio,” said Miller. “We think this is a very fundamental shift in thinking and government should look at it and decide whether they agree because in our view, this new way of thinking is completely inconsistent with the Broadcasting Act.”
So the appellants want government to rescind the licenses.
But, given how the public and most mainstream media would greet the de-licensing of the satellite radio companies, reducing their choice, how would Miller deal with those complaints?
“We exist as a country for certain reasons. There are certain things that are important to us as Canadians like health care… like having a more tolerant, diverse society. And, traditionally, I think most Canadians have always identified culture and in particular broadcasting, which is the most ubiquitous form of culture, as an important Canadian thing and they’ve supported it. That’s what the Broadcasting Act is founded on,” he explains.
“I think at the end of the day, the vast majority of Canadians, if given the opportunity to understand what’s at stake and really appreciate what’s at issue here would say ‘I get it. I understand. Yes, that’s important.’”
Besides, the satellite platform is going to stagnate because it can’t win urban customers, Miller said. “Going forward, we actually think that satellite technology is not the winning platform. Satellite is very good for rural and remote but that’s not where the vast majority of Canadians live.”
Additionally, “satellite is bad for portable devices for in-building reception. Without the terrestrial transmitters you can’t get in-building, so if you’re an urban dweller, unless you do a lot of driving, you’re not going to be interested in the service,” he adds.
Canadian Satellite Radio (XM’s Canadian partner) will install well over 100 terrestrial retransmitters.
Now, some might accuse CHUM of blatant self-interest since it, too, received a subscription radio license, albeit for a terrestrial digital service that would remain true to current Canadian content rules. If the two satellite companies went away, CHUM could have the market to itself.
Not true, says Miller. “We’re looking at it from a perspective of more than just our own application. Quite honestly, our own application and our interests there are being subsumed by our general concern about what this precedent means.
“…whether our service launches or not, the cell guys are going to be in this space and the broadband multimedia guys are going to be in this space,” Miller continued. “In the next 18-to-24 months, there’s going to be a lot more activity in this space.
Miller also said that the satellite companies could cause up to $50 million in revenue losses among radio companies in five years due to loss of audience share fleeing to satellite. That’s about 4.1% of the $1.2 billion Canadian commercial radio revenue pie, according to 2004 CRTC figures.
“So, therefore to give up and essentially throw away 60 years of broadcasting precedent for a technology that isn’t ultimately going to be the winning technology, seems to us to be even more unfortunate,” Miller concluded.
– Greg O’Brien
