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CABLED CANADA |
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Accomplishments & Challenges: Canada’s
Cable Industry in 2004 |
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September
2004 - IGB Grant +1 514 849 3508
& Brian Sharwood +1
416 413 9381
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KEY HIGHLIGHTS: |
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- Today’s cable service has evolved from
a one-way broadcast distribution medium to an advanced communications
platform. Two-way interactive
services are now standard fare and as important as television
to the future of the cable industry. With the advent of cable-based VoIP
services
early next year, past distinctions between cable companies and
other enterprises typically described as ‘communications firms’ will
be further eroded.
- SeaBoard predicts
that cable company revenue will soon evolve from its present
broadcasting base; within the next
five years up to 45%
of cable company revenue will come from advanced services running
over the high-speed internet access, such as high-speed access
itself, telephone
service (and its related feature sets) and other interactive
services such as content on demand, videoconferencing and gaming. The
transition
will not be without pain. Cable’s foray into voice services,
through VoIP, is a direct assault on the business that Canada’s
telephone companies have considered ‘their’ birthright
for over a century. Consequently, regulation will have a significant
impact on the development of telephone competition in the short-term.
- Cable faces challenges
in delivering broadband to Canadians in remote/rural
communities. Smaller cable systems face
significant costs in accessing
the information highway. They are dependent on satellite
delivery for their broadcast distribution business – access
to the internet backbone remains problematic and expensive.
SeaBoard
believes a part
of the financial burden can be mitigated by allocating
revenues in the Price Cap deferral account to assist in serving
high-cost areas.
- Advanced media services
are increasingly user enabled and transcend historic
market definitions. Our present
regulatory and government
market-oversight structures remain in silos; broadcasting,
cable, telecom. Canada’s new Ministers of Industry and Heritage
need to take action to bring the pieces together.
- Our public policy
and regulatory environment needs to be updated and
harmonized so it is
not outdated by technology.
Canada’s regulator
will find it increasingly difficult to maintain artificial
boundaries between IP-delivered video and traditional
television channelised
programming. Canada needs a regulatory structure that
promotes competition domestically
in all markets including broadcasting as well as encourages
innovation and increased investment
- Canada’s continued
global leadership depends on whether innovation and
investment in advanced media remain,
or perhaps become again, priorities
for public policy-makers. Government needs to get on
board. To follow and to support the industry lead. Their job has just
begun.
- SeaBoard recommends a rethinking of foreign investment limits in order
to keep pace with our major trading partners when it comes
to removing barriers to investment. Canadian consumers and service providers
will
be well served by the easier access to capital markets.
- Broadband services
are an essential element in the social fabric – education,
social programmes, and even health care delivery will
increasingly rely on connectivity to the internet.
Cable companies have
been, and will continue to be a key contributor to
growing these services
in
all regions of Canada.
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