Ottawa shoots down Bird

Rejection of satellite bid means Telesat retains monopoly in Northern communications.


IQALUIT — Ottawa has said no to competition within northern Canada’s satellite-data transmission business.

Industry Canada announced June 21 that Telesat Canada will get a licence to operate a new communications satellite to provide Internet, television and telephone services to Canadians living in rural and remote regions of Canada.

In doing so, Ottawa rejected a $1-billion bid from an upstart firm called Bird Satellite Communications Inc., whose ambitious proposal threatened to break Telesat’s monopoly over satellite services in the North.

For Nunavummiut, the decision means competition won’t drive down satellite rates any time soon.

The high cost of leasing satellite bandwidth is the greatest barrier to the development of Internet services in Nunavut.

“It seems clear that the idea of Nunavut being a leader in the use of information technology and telecommunications to offset its geographical challenges is not realistic unless the high cost of satellite space can be addressed,” the Conference Board of Canada wrote in its recent report on Nunavut’s economy.

Richard Stursberg, the CEO of Bird Satellite Communications, said his company’s plans could have slashed satellite costs in northern Canada.

Bird’s proposal would have offered high-speed direct-to-home Internet to all households in Canada at a price comparable to current direct-to-home satellite television services.

Bird also promised to donate $100 million to tele-health and tele-education services in remote and underserved areas of the country.

But Telesat shot down Bird’s bid with an aggressive proposal of its own.

Telesat enlisted support from 56 prominent businesses and organizations, including several firms controlled by Telesat’s parent company, Bell Canada Enterprises Inc.

One hundred per cent of Telesat’s shares are directly or indirectly controlled by BCE, a massive multi-media and telecommunications conglomerate with investments in CTV and the Globe and Mail newspaper.

BCE firms such as Northwestel and Bell Canada Northern Ontario wrote glowing letters of support for Telesat’s proposal. Major Telesat customers such as the Aboriginal People’s Television Network, CBC and Cancom also wrote letters of support.

Telesat proposed to provide two channels on their new satellite for tele-education and tele-health services in areas of Canada not served by land-based communications.

Until March 2000, Telesat’s satellite services enjoyed a government-protected monopoly.

But after the Canadian Radio and Telecommunications Commission ruled that Telesat’s monopoly is harmful to the telecommunications industry, Ottawa opened the door to competition.

As part of that effort, the federal government allowed U.S. satellite firms to compete in Canada.

But that probably won’t help Nunavut, since most commercial U.S. satellites don’t cover northern Canada.

In its proposal, Bird said its plan would have addressed that problem by providing Telesat with a direct, Canadian-based competitor in the North.

At least half of Bird’s bandwidth would have been available to customers in northern Canada who are beyond the reach of U.S. spacecraft.

Telesat’s new satellite should be operating by December 2003.

Ottawa declined to award a licence for a second satellite slot that’s also available to Canada. Industry Canada says that licence will be awarded later.

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