GATINEAU – The CRTC kicked off hearings into the Direct-to-Home (DTH) satellite TV policy yesterday with chair Konrad von Finckenstein questioning why Bell TV hasn’t yet started to transition to MPEG4, a move that would add more capacity to the company’s satellite distribution offering.
Under questioning from the chairman, Bell Canada acknowledged that it has yet to begin transitioning to the higher compression standard.
“We’re evaluating methods by which we may be able to stage that migration obviously because of the limited number of MPEG4 boxes that are in our installed base,” said Heather Tulk, senior VP of residential products. “If we were to let natural evolution take place, it would be a number of years, potentially decades, before we would have a base able to receive signals in MPEG4. So we’re looking at various ways we might stage an investment to help speed that along. But at this time we don’t have any firm plans and we have not started that transition.”
Seemingly unsatisfied with the answer, von Finckenstein pressed Bell on the matter until, he noted that “I’m just stunned… that you’re not contemplating transitioning.”
Mirko Bibic, senior VP of regulatory and government affairs, responded that there’s no point when only a fraction of Bell TV’s customer base can actually receive the MPEG4 signal.
“We can lift a signal in MPEG4 today, but only 25% of our subscribers would be able to receive them,” he said. “So there is not much point unless you have a broader base of subscribers who can take actually take advantage of that signal. And to get them all on MPEG4 as we mentioned is $1 billion.”
Just as Bell pointed to the very high cost of transitioning to an MPEG4 compression environment, Shaw Direct also noted that it’s just not feasible to do a technology swap across its entire customer base. The company has already spent $300 million on a new satellite capable of supporting MPEG4: Anik G1 is expected to become operational in the fourth quarter of 2012.
Gary Pizante, VP of corporate affairs, said the rollout of new services from G1 must be taken with care. “The rollout must be carefully executed to manage costs and ensure that the customer experience is not negatively impacted by a need for equipment changes,” he said. “Only 1% of our customers’ receivers are currently MPEG4 capable. However, the cost of immediate conversion of our entire system to MPEG4 would be $600 million and would overwhelm our business.”
Even upgrading parts of a satellite for MPEG4 would be cost prohibitive and significantly disruptive to customers, Pizante said. To change out five transponders, or 10% of Shaw Direct’s capacity, would be the equivalent of 40 standard definition channels. “There’s no way to change this without affecting all our customers and it’s a total misnomer to say we can do that.”
When asked for more details on a deployment plan for MPEG4, Pizante noted that two new MPEG4-enabled set top boxes were recently introduced (one in September and another earlier this month) and a third is on the way.
“So we have a plan to get there. We have something of a vision, but the exact details of how we’ll get there, when will we start broadcasting in MPEG4 going to be responsive and reactive to market circumstance,” he said.
