Canada has trouble focusing on its pay-TV policy.
The Canadian government can't make up its mind about what to do with pay television. One department wants more Canadian content, another wants less, and the money-losing pay-TV channels have ideas of their own.
Canada's cultural watchdog, the Canadian Radio-Television and Telecommunications Commission (CRTC), covers everything from television licenses and phone rates to the content of pay television. The CRTC wants Canadian content and lots of it - at least 30 percent. It also causes pay-TV channels to spend 45 percent of their revenue on Canadian films.
Pay-television operators say they can live with the Canadian-content regulations, which at one time were even higher - 50 percent. But the two big national companies - First Choice and Superchannel - want to carve the country in two and give themselves a monopoly, one in the east, one in the west. They say the Canadian market is too small a place to compete.
The antitrust side of the Canadian government does not think this is a good idea. The Department of Consumer and Corporate Affairs in Ottawa abhors a monopoly, but it does have an idea to help the pay-TV operators survive: Lower the Canadian content.
''The Canadian content and programming expenditure stipulations in the conditions of the license,'' says Lawson Hunter, director of competition policy at the Department of Consumer and Corporate Affairs, ''constitute the major single financial burden in the two pay licensees.'' In plain English, Canadian-content rules make pay TV lose money.
Not so, says one pay-television executive. ''We've spent enough on Canadian content to take us until the end of 1985,'' says Peter Legault, vice-president of First Choice, ''and if they relax the rules we might be able to last until 1988.''
The CRTC has demanded that Canadian content be 50 percent by 1986. Mr. Legault says that at the moment Canadian content is not the problem, but he would like his company to be given a monopoly to operate in eastern Canada. The proposal is that the country be divided at the border between the provinces of Manitoba and Ontario. First Choice would reach from Ontario to the Atlantic Ocean; Superchannel would program from Manitoba to the Pacific.
The CRTC granted six licenses for pay television, which started in Canada 18 months ago. Pay TV has never made a cent. A cultural channel went bankrupt a year ago, and another service in the Atlantic provinces is off the air and in receivership. The large number of licenses granted at the start was one of pay TV's biggest problems.
''The original proposals were to to start with one service and expand if it did well,'' says Barbara Millechamp, a market analyst with the Toronto firm of First Marathon. She agrees with the idea of giving a monopoly to each of the two national channels. ''I think it's a little late. But this shows the new chairman is bringing business reality to the commission.''
The new CRTC chairman, Andre Bureau, has much television experience. Former chairman John Meisel, who granted the six pay-TV licenses, is an academic, and critics say he worried too much about the theories of cultural nationalism and not enough about the economic viability of pay-TV channels.
Despite objections, Mr. Bureau is likely to try to alter the course set by his predecessor and grant the monopolies to the two pay-TV operators. But the Department of Consumer and Corporate Affairs still worries about competition and may appeal the CRTC decision. In such cases the federal Cabinet has final say.