Even into the mid-1960s the industry remained small and insignificant. By 1964 only 215 000 homes (4% of Canadian households) subscribed.
The industry experienced rapid growth, however, between about 1965 and 1975. Penetration approached 60% of Canadian households and systems were established in all major centres. Two factors help explain cable's initial popularity in urban communities: the proliferation of highrise buildings debasing over-the-air reception, and the use of microwave to import distant (chiefly US) signals.
Since the 1970s, cable growth has been spurred particularly by an array of non-off-air offerings, such as specialty channels and PAY TELEVISION, which target specific viewer groups. The larger systems have expanded capacity from perhaps 20 to, in some cases, hundreds of channels. As a result, the number of video channels supplied to the average Canadian home has increased continuously and stood at about 73 channels in 1998.
Across the country, the cable TV industry provides over 200 local community channels. Nationally, it finances and operates the Public Affairs Access Channel (CPAC), which provides live coverage of the House of Commons and Senate as well as other activities of national interest.
Two-way (interactive) capability was introduced beginning in the 1970s to facilitate non-programming services such as medical alerts, burglar alarms and meter readings. By 1998, however, 2-way services and capabilities had increased to such an extent that more than 40% of Canadian homes had access to the cable industry's high-speed Internet service.
Finally, hitherto discrete systems are now interconnected by satellite, thereby constituting cable television, at least potentially, as a national data TELECOMMUNICATIONS network.
As a result of these and other developments, by 1998, 7.8 million homes (about 68% of homes with television) and a further 0.5 million commercial establishments subscribed to cable. Industry revenues for 1998 were over $3 billion. Three multisystem companies - ROGERS COMMUNICATIONS INC, Le Groupe Vidéotron and Shaw - account for over 59% of cable subscriptions (see MEDIA OWNERSHIP).
Such developments have taken place only under controversy and with bitter disputes. One major obstacle hindering cable's early development was the set of restrictions imposed on cable by the telephone industry. The cable industry has always been dependent on telephone companies for access to poles, ducts, easements and rights-of-way; without access to these facilities, few cable systems could even have been constructed. Access was granted, however, only under highly restrictive conditions that were designed to limit service offerings and to neutralize cable's potentially competitive threat. In Bell Canada's (see BCE INC) territory (Ontario and Québec), such restrictions were struck down only in 1977 by a decision of the CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION (Decision CRTC 77-6), which ordered that cable companies were to be permitted to own cable, that access charges imposed by Bell would be reasonable and that no restrictions on services were to be imposed (see TELEPHONES).
A second major obstacle slowing cable development in former years was a regulatory policy designed to protect revenues of over-the-air television broadcasters. Until the late 1970s the CRTC was most concerned with preventing cable from fragmenting broadcasters' audiences and thereby reducing ADVERTISING revenues to the detriment of the cultural goals set for Canadian broadcasting. However, a new stance toward cable became evident in the early 1980s. In 1982 the commission licensed several satellite-to-cable pay television services, and in 1984 it similarly licensed several specialty channels (music videos, sports, news, etc). Indeed, over the decade dozens of pay and specialty channels were licensed.
Cable television was also at the centre of continual federal-provincial jurisdictional disputes, particularly in the 1970s. Québec particularly at that time asserted authority to license all cable undertakings in the province: consequently, cable companies for a time were required to hold both federal and provincial licences. The Prairie governments too asserted provincial jurisdiction, viewing cable as a telecommunications carrier akin to, and indeed potentially competitive with, their then provincially owned telephone companies. Exclusive federal jurisdiction was confirmed, however, by the Supreme Court in 1977.
It is apparent that cable television is transforming Canadian broadcasting. Prior to cable growth, the number of entities authorized to diffuse radio or television programming in any locality was limited by spectrum scarcity and by the technical necessity of apportioning radio frequencies geographically. Cable television, however, by using wires instead of space, has dramatically increased the number of competing programming services. Whereas government policy historically has attempted to use broadcasting as a means of promoting national unity and safeguarding Canadian culture, such goals, always elusive, have become even more problematic as market forces increase, reducing the ability of government to legislate or administer performance (see BROADCASTING, RADIO AND TELEVISION).
Moreover, due to the abundance of channels available on cable and because satellite reception covers a broad area, a reorientation is taking place in broadcast programming. Instead of targeting geographically specific audiences, programmers and advertisers are increasingly targeting identifiable audience types (eg, the young, the old, women, blacks, professionals, country music fans). Cable television, then, in conjunction with satellites, is undermining broadcasting as an instrument for Canadian political and cultural sovereignty.
Cable television is also a factor revolutionizing Canadian telecommunications. Hitherto, cable and telephone systems have been distinct, both technologically and in the services offered. Although both industries brought communication to the home by wire on a monopoly basis, cable was one-way for many years while telephone systems were bidirectional. Moreover, telephones possessed full switching capacity and offered point-to-point service, whereas cable was unswitched, offering only a point-to-mass service. Furthermore, telephone companies were interconnected nationally by microwave while cable systems were discrete, local entities. Finally, telephones were optimized at the terminal for one voice channel, while cable systems employed bandwidths of up to several hundred thousand voice channels (50 television channels).
Today, however, telephone and cable systems are converging technologically; consequently, their services will increasingly overlap as well. Both telephone and cable companies have introduced optical fibre (10 KHz bandwidth), which gives enormous capacity to both systems. Furthermore, modern cable systems, like their telephone company counterparts, are bidirectional. According to the Canadian Cable Television Association (CCTA), Canadian cable companies will soon be able to offer local telephone service over their hybrid fibre-coaxial networks using Internet Protocol (IP) telephony. IP telephony allows local telephone service to be offered on an incremental basis, enabling cable companies to target particular neighbourhoods where new telephone services will be offered. Through CableLabs, the North American cable industry's development organization, CCTA member companies are working with manufacturers to establish standards, known as PacketCable. These standards will ensure that they can offer telephone service compatible with the public switched telephone network (PSTN). Two companies, Le Group Vidéotron and COGECO Inc, have announced that by 2000 they will be offering customers local and long distance IP telephone service.
Inasmuch as cable is transforming broadcasting and converging with telecommunications, it is also causing broadcasting to converge with telecommunications. Cable is thereby placing a severe strain on policy, since the laws, goals and regulations in these hitherto separate areas have historically differed. Broadcasting policy traditionally has focused on the messages and their perceived cultural impact, and only secondarily upon economic or technological issues such as prices, profits, rates of depreciation and innovative techniques for relaying messages. Licences to transmit were apportioned on the basis of expected contribution to Canadian social, political and cultural goals. By contrast, in telecommunications, regulation focused on economic factors almost exclusively, attempting to ensure just and reasonable access for senders and receivers of messages, and largely ignoring the nature of the messages or their cultural impact.
It is apparent that such dichotomous policies are difficult to sustain with the convergence of broadcasting and telecommunications. Fundamental policy questions are raised. Should cable continue to be governed by historic broadcasting concerns - the licensing of message originators on the basis of contributions to culture? Or should cable be treated as a common carrier, with price and profit regulation to ensure equitable access by any and all message originators and receivers? Should cable companies continue to pay broadcasters copyright or rediffusion fees for distant signals? Or should program originators pay cable companies access fees for diffusion over cable facilities? Should cable companies be allowed to select (any of) the programming or to integrate further into program production (as has been the practice in television broadcasting and is increasingly the case with cable TV)? Or should cable companies be precluded from exercising any control whatsoever over the messages they diffuse (the principle of the common carrier)? These are some of the difficult issues that were facing policymakers in the 1990s.
See also COMMUNICATIONS TECHNOLOGY.
Author ROBERT E. BABE
Robert E. Babe, Cable Television and Telecommunications in Canada (1975) and Telecommunications in Canada: Technology, Industry and Government (1990); Canada, Information Highway Advisory Council, The Challenge of the Information Highway (1995).
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