US embassy cable - 05OTTAWA3602

UNCLAS OTTAWA 003602 
 
SIPDIS 
 
SENSITIVE 
 
PASS USTR FOR CLUNE, BALASSA, BURCKY AND SCHNARE 
 
STATE FOR EB/CIP, EB/DCT AND WHA/CAN 
 
DOC FOR ITA/MAC -- OFFICE OF NAFTA 
 
FCC FOR INTERNATIONAL BUREAU 
 
PARIS FOR USMISSION UNESCO 
 
E.O. 12958: N/A 
TAGS: ECPS, ETRD, CA 
SUBJECT:  SUBSCRIPTION RADIO NOW (LEGALLY) AVAILABLE IN CANADA 
 
REF:  OTTAWA 2745 AND PREVIOUS 
 
1. SENSITIVE, BUT UNCLASSIFIED.  NOT FOR DISTRIBUTION 
OUTSIDE USG CHANNELS. 
 
2. (U) Reftels reported the GOC regulatory decision in mid- 
2005 to allow the launch of three subscription radio 
services in Canada.  Two of the licensees are extensions of 
U.S.-based "XM" and "Sirius" satellite radio services (with 
Canadian channels added).  Both of these U.S.-affiliated 
services began operating in recent weeks, and they are 
competing to attract subscribers in Canada through 
advertising campaigns, special programming, and discounts on 
receiver hardware.  Some Canadians had already been 
receiving XM and Sirius programs through receivers purchased 
in the United States. 
 
2. (U) Canadian broadcaster CHUM Ltd., the third licensee, 
planned to provide a subscription radio service which would 
be broadcast from terrestrial stations.  CHUM appealed 
unsuccessfully against the original licensing decision in 
June, arguing that it could not compete with the two 
satellite services unless their terms of license were 
tightened (so as to require more Canadian content -- the 
main point on which the licensing decision was criticized in 
Canada).  CHUM says it remains undecided about whether it 
will actually enter the subscription radio market. 
(Comment:  Given the head start which XM and Sirius -- which 
operates here in a partnership called Canadian Satellite 
Radio -- now have in signing up subscribers, it seems 
unlikely that CHUM will enter the market anytime soon.  End 
comment). 
 
 
3. (SBU) The Canadian Association of Broadcasters, which 
represents Canada's conventional over-the-air TV and radio 
broadcasters, has been cautious on this issue because it has 
members with interests on both sides and because it 
cultivates a close relationship to the broadcast regulator. 
However, it has taken the position that subscription radio 
"should not undermine the ability of conventional radio to 
meet its Canadian content requirements" -- a qualified 
message of support for CHUM. 
 
4. (SBU) The GOC is due to conduct a regular five-year 
review of its broadcasting policy during 2006.  That process 
will provide a fresh platform for Canadian "cultural 
interests" (i.e. the various media industries which benefit 
from regulatory protection) to argue that the satellite 
services are diluting the presence of Canadian content in 
Canadian media, and thus harming other firms' ability to 
meet their license requirements. 
 
WILKINS