Canadian Cablers Enhance a Local Weapon

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Ottawa -- Canadian MSOs are sprucing up their
community-access channels, even though they're no longer required to carry them.

Operators consider the channels a key competitive edge
against telcos and direct-to-home platforms. And they want to hold on to the small
audiences and limited ad revenues these channels have traditionally generated.

That's no mean feat, as Canadian systems are required
by law to carry more and more commercial channels that have received government licenses.

Currently, the Canadian Radio-television and
Telecommunications Commission requires cable companies to spend 5 percent of their gross
revenues on funding Canadian TV productions, or to split that percentage between Canadian
productions and their community channels. Before those regulations were changed two years
ago, the mandate was limited to funding the local channels.

In general, cable operators such as Rogers Communications
Inc. and Shaw Communications Inc. have not only opted to keep running community channels,
but many of those channels have received overhauls to bring them closer to mainstream
television. All told, there are 230 community channels nationwide.

MSOs have three reasons for doing this, Canadian Cable
Television Association senior vice president of industry affairs Harris Boyd said.

First, after 32 years of working with local community and
charity groups across Canada, the channels are "somewhat of an institution," he
said. "It would be very difficult to take that away."

Second, the community channels "give us an advantage
over major competitors like a Bell that really have no local presence whatsoever,"
Boyd continued.

Finally, "there is more and more scope for a truly
local [cable-TV] channel as the conventional broadcasters become more regional," he
said.

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