HALIFAX and QUISPAMSIS, N.B. – They’re not completely out, but they’re not in, either.
The Canadian Cable Systems Alliance and its largest member, EastLink, are going their separate ways in 2008. It’s not an acrimonious breakup mind you, or a complete separation, but it’s a break just the same.
With its purchase of Persona Communications finalized last year – alongside the acquisition of Amtelecom Communications and RuSh Communications in 2007, EastLink now has over half a million cable customers – a figure which comprised over half of the cable customers the CCSA represents through its cable company members. The Halifax-based MSO now figures it’s big enough to go it alone on most matters.
The CCSA’s next largest member, Access Communications, based in Regina, has about 80,000 customers. The Alliance handles contracts, negotiations, and payments between its member companies and the myriad programmers and negotiates lower volume-based rates on equipment and other services, too. Many of its members consider the CCSA an integral part of the success of their businesses.
“We are structuring a new relationship with EastLink,” CCSA president and CEO Alyson Townsend told Cartt.ca this week. She said that EastLink now wishes to make its own regulatory submissions, primarily, and, thanks to its new size, it has far less in common than the small independent members that comprise the rest of the Alliance’s membership.
When contacted by Cartt.ca, EastLink co-CEO Dan McKeen declined comment, directing us to the CCSA.
“We have been talking about it over the last couple of months and trying to envision what this new relationship would be,” explained Townsend. “From a CCSA perspective, this actually simplifies things because it may have stretched credibility to speak on behalf of small independent distributors when EastLink was a member of that constituency.
“We now have a very pure play as the voice of small independent cable, from a regulatory perspective… We will continue to have an excellent relationship with EastLink and that’s really the story,” she continued.
However, “from a contract point of view, there really is no change. EastLink and any other (member) company for that matter, has always had the right to adopt any CCSA master agreement. It’s always been a fundamental tenet of the CCSA that we do not bind our members when we are negotiating. They choose to adopt our deal after it has been completed,” she added.
“EastLink will continue to choose to participate, or not.”
In an e-mail to its programming clients which was forwarded to Cartt.ca, EastLink has told specialty services it wants a more direct relationship with them, saying it is “reducing” its participation with CCSA, not ending it.
“We appreciate our relationship with CCSA, however we have reached a size whereby we believe it is important to have a direct relationship with our program suppliers,” said the four-paragraph e-mail.
“We expect this change to be a smooth transition… Over the next few months we will work with you to complete affiliation agreements. In the meantime it will be business as usual.”
When asked if that meant EastLink is completely out, Townsend said no. “They do want to have a direct relationship with (the programmers),” she acknowledged. “EastLink will choose to adopt our deals, or not, and will be a member for the purposes of those deals, same as they always were.”
What is still to be decided is the structure of the CCSA because with EastLink pulling back, it will mean lower revenues for the Alliance. However, the CCSA has overhauled its budget already and will operate as normal through the end of its fiscal year, May 31. “We’ve already re-cast our budget for this year, and we’re fine,” said Townsend.
“We’ve always had to be flexible,” she continued. “We’ve always responded to circumstances in the industry just like anybody else… We’d be naïve to think we’re somehow not going to be subject to the same flux as everyone else.”
“Our circumstances is that we’ve always been able to adapt and we will continue to be able to adapt. Whatever the members decide is important to them is what is important to us and that is what they will fund.”
The big decision, said Townsend, will come at the end of the fiscal year, when “it will be what the members decide what they wish to fund.” Thus far, in her discussions with the remaining 90-member companies and “they have told us they wish to have everything they previously had,” said Townsend. “It may be on a more limited basis, but so far that is the determination to the end of this budget year.
“We will just adapt, like we always have.”
