A national TV dream, in High Def

GRANT ROBERTSON
Globe and Mail

Canada's television landscape could be on the verge of its biggest shakeup in years if a bid to launch a new national network – broadcasting from coast to coast in high definition – is approved by federal regulators in early 2008.

Details of an application by HDTV Networks Inc., a company backed by fast food and satellite radio investor John Bitove, were made public Thursday by the Canadian Radio-television and Telecommunications Commission (CRTC).

With eight cities on its proposed roster, the network would vault itself into the role of Canada's third-largest commercial TV network after CTV and Global, if it were to get approval.

It is the first time in recent memory investors have sought to start a national conventional broadcaster from scratch.

Through the decades, Canada's major networks have been built through a patchwork of mergers, licence applications and takeovers.

Hearings on the bid are set for Feb. 11, along with a separate proposal from Toronto-based start-up Yes TV Ltd., which wants to launch a single high-definition station in that market.

If successful, HDTV Networks could be operating in 18 to 24 months, executive vice-president Stewart Lyons said in an interview.

The network would be based in Vancouver with a national newscast that draws upon contributions from its other seven markets. To save costs, there wouldn't be local newscasts in each of those cities. It would buy programming the major networks aren't focusing on, including Canadian productions and lesser-known foreign shows, he said.

“It's a fairly lean fighting machine,” Mr. Lyons said. “There's been some consolidation in conventional broadcasting and that leaves opportunities.”

The company has pledged to sell only national advertising, in an attempt to ease regulatory concerns about increasing competition for local ad dollars at a time when conventional TV margins are shrinking.

Yes TV has applied to operate a high-definition network in Toronto and the two companies will be competing bidders for a licence in that city, which may signal the CRTC doesn't consider the market robust enough to allow two new local channels.

With Quebecor Inc.'s Sun TV channel struggling in Toronto, the CRTC has concerns about further saturating the market.

Yes TV president Ryan Sutherland couldn't be reached for comment Thursday, however documents indicate the company has secured $6-million in financing, including access to $5-million in debt.HDTV Networks has access to $100-million of equity and $200-million of debt.

With eight cities, including Halifax, Montreal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton and Vancouver, the operation would be bigger than Rogers Communications Inc.'s CITY-TV network, CTVglobemedia's A Channel and CanWest Global Communications Corp.'s E! network.

The CRTC put out a call for applications in June after Mr. Bitove's group applied for the licence last December. The regulator is actively encouraging more HD content in Canada as the broadcast industry shifts to digital formats. The channel would be available to viewers in analog format as well.

Mr. Bitove's other companies include Canadian Satellite Radio Holdings Inc., operator of the XM Canada service, and Priszm Income Fund, which owns and operates 484 KFC, Taco Bell, Pizza Hut and Long John Silver's restaurants.

He has been looking to get into the television business and was an interested bidder this summer for CITY-TV, before CTVglobemedia sold the five-station network to Rogers.

The bid could face opposition from media guilds concerned about the lack of local newscasts. But Mr. Lyons hopes said he's hoping the production industry will back the proposal.“They're looking for another door to knock on, so we're expecting a fair bit of support from those groups,” he said.