OTTAWA – If the transition to digital television is going to work here, Canadian consumers are going to need digital set top boxes – and help paying for them – says prospective satellite company FreeHD Canada.
In its early submission to the CRTC on Broadcasting Notices of Consultation 2009-411 and 411-3, the company (which just asked the CRTC for BDU and SRDU licenses last month, as first reported by Cartt.ca) notes the substantial issues facing the Canadian broadcast industry with less than two years until analog TV is set to be switched off forever.
BNC 2009-411 and 411-3 are of course the policy proceedings on group-based licensing approaches and other issues like fee for carriage. And, while the filing deadline for the November 16th hearing is not until September 14, FreeHD Canada wanted theirs in early so that others might want to comment on it in their own submissions (most companies generally wait to submit until the afternoon or evening of the deadline day).
The FreeHD filing outlines the company’s business plan to offer all 100 or so local broadcasters to Canadians, for free, making sure all Canadian local conventional TV signals are delivered – providing that “local-into-local” that Canadian broadcasters have been wanting from satellite companies.
The company also noted the substantial challenges – technical, financial, regulatory, the potential for sticky business negotiations when it comes to fee for carriage – which stand in the way of meeting the August 31, 2011 deadline to transition Canadian TV from analog to digital delivery.
Broadcasters have been reluctant thus far to roll out high definition except in the largest of Canadian markets and will not spend any more than the bare minimum in getting HD to the rest of the country (and the CRTC has already said broadcasters don’t have to offer digital OTA in communities under 300,000, unless they’re a capital city). Everyone wants BDUs to get digital the rest of the way.
But on the distribution side, the legacy digital systems of existing BDUs, driven by the MPEG2 compression codec, will hold back the future, claims FreeHD Canada. “Legacy technology selections – both on the satellite and on the ground – are mature and have reached the limits of their efficiencies and are being taxed to provide more services than intended,” reads the submission. “The results are that Canadian consumers are being provided digitally compressed signals (in SD and HD) that are of visibly inferior picture quality to OTA ATSC signals (where available).”
(Ed note: FreeHD plans to use MPEG4 compression and take advantage of newer satellite technology [already in use Stateside, it should be noted] such as spot beam and better stat-muxing, for example.)
“It is evident that the wholesale transition to HD is impossible without more capacity, more efficient technology, and investments in excess of several billion dollars,” adds the filing.
FreeHD’s idea of reaching all Canadian consumers with their local signals in digital or HD “is able to finally provide the conventional OTA broadcasters with exactly what they have been requesting – carriage of ALL OTA’s, and in a “Local-into-Local” mode,” reads the submission (their emphasis).
And while the company believes that if it’s delivering all of the local signals for free to consumers it should not have to pay a fee for carriage (it estimates its annual cost of delivering an HD broadcast signal at $400,000 each per year), FreeHD recognizes that millions of Canadians will need digital decoders (and not necessarily its set tops) come September 1, 2011 and will need help paying for them.
The company estimates that there are five to six million HDTVs without off-air ATSC decoders, meaning those plasmas or LCDs can’t pick up off-air HD signals when the transition happens. Add this to the millions more who have a TV in the bedroom or kitchen needing a decoder, or those who will simply remain fervently analog until the bitter end, and it’s easy to see trouble brewing.
So, FreeHD Canada is proposing “(t)o assist Canadian consumers in the digital transition FreeHD Canada proposes the creation a new Digital Decoder Coupon Program (DDCP) that would be utilized to equip consumers with HD/digital set-tops or decoders from the BDU of their choice. In order to be both supplier and technology neutral this could appropriately take the form of a $75 coupon – two per household – towards the purchase of new digital HD decoders (off-air ATSC, cable, telco or satellite). This program would be federally funded and would be similar to the coupon program administered by the NTIA in the U.S.,” reads the FreeHD submission.
And who would pay for this billion-plus-dollar program? Canada’s wireless companies when they bid for the valuable 700 MHz spectrum to be vacated by Canadian TV broadcasters.
“FreeHD Canada proposes that the funds for the DDCP should primarily come from Heritage Canada; arising from their mandate to protect Canada’s cultural identity. Funding for the decoders could come from any spectrum auction funds realized by Industry Canada from the vacated UHF spectrum after the digital transition is complete,” it says.
What will others say? We’ll have to wait and see, but Heritage Minister James Moore is already on record with Cartt.ca saying a coupon program is a no-go in Canada.
One thing the FreeHD submission does, however, is point out how unprepared the industry, and the Canadian public, is for the digital transition.
And it only gets harder and more complicated from here on.
