The initial licensing of direct-to-home satellite television services resulted in some start-up upheaval before two major players became the designated Canadian pioneers in the satellite business.
PowerDirecTV was one of the two original national DTH licensees authorized by the CRTC. Owned 80 per cent by Quebec’s Power Broadcasting Inc., PowerDirecTV also included a 20 per cent ownership stake by the U.S. company DirecTV. In 1996, Telesat Canada, Canada’s national satellite operator, experienced technical failures on its Anik E-1 satellite, which was slated to carry the services of both the two new licencees, and this jeopardized the launch of both.
With technical problems compounded by questions about the level of American investment in the company, PowerDirecTV decided not to exercise its licence. ExpressVu, at the same time, was forced to delay its launch, because of satellite problems. This prompted the Commission in 1996, to authorize Star Choice Television Network Inc., listed as a wholly-owned subsidiary of B.C.-based Direct Choice TV. The operational start-up of both Star Choice and ExpressVu was delayed until 1997.
The Commission originally licenced only two DTH providers with the proviso that subsequent DTH services might be considered only after the original two had had six months of operations under their belts, in order to firmly establish Canadian DTH service. Subsequently, in 1997, the Commission took another look at the application for Homestar, one of the original 1995 applicants, which had been denied, for the first-round of DTH licensing. The first Homestar application was submitted by a cable consortium led by Shaw Communications Inc., the second largest cable operator in Canada, and included Quebec cable operator Videotron, together with a 20 per cent ownership stake reserved for a potential U.S. partner.
Homestar’s second application in 1997 proposed a DTH satellite service wholly owned and controlled by Shaw Communications Inc. Shaw also held controlling interest in specialty channels YTV, Country Music Television and Treehouse, as well as 10 radio stations and DMX Canada, a national pay audio service. Shaw had proposed to Industry Canada to launch its own two direct broadcast (DBS) satellites to handle its DTH service.
The CRTC approved the Homestar application early in 1997. But launching its own satellites, and in fact starting up its own DTH service, became unnecessary when, with CRTC approval, Homestar merged with the already-operational Star Choice before the end of 1997. The company continued as Star Choice. The Commission included conditions of licence requiring independence from Shaw Communications and forbidding the exertion of undue preference for the benefit of Shaw.
In 1998, when Cancom was licenced by the Commission as a Satellite Relay Distribution Undertaking (SRDU), so also was Star Choice, to ensure competition. In its decision on competition in satellite distribution, the Commission stated, “While the role of an SRDU has grown to encompass more than the original goal of extending Canadian services to remote and underserved communities, the Commission emphasizes that this remains its fundamental purpose and objective. The Commission notes that SRDUs also serve as signal suppliers for urban areas.”
By 1999, however, increasing satellite competition persuaded Cancom and Star Choice to combine forces and operations; the two companies merged to face off against the other DTH operator, Bell ExpressVu. ExpressVu had also been licensed as an SRDU, with powerhouse BCE as its parent company.