In a broadcasting decision handed down yesterday, the CRTC has granted a request by Shaw Communications Inc., to strike down a 15 year old rule which required a structural separation between Shaw's cable and satellite television operations.

Under the old rules, the federal regulator forced Shaw to have separate sales, marketing, and customer service staff for its StarChoice (now called Shaw Direct) and Cable division.

The federal regulations were imposed when ExpressVu and StarChoice first received their license to operate satellite television services in Canada. At the time, ExpressVu was an independent company while Shaw was also the owner of a large cable company and a satellite distribution company. Simply speaking the rules were put in place by the CRTC in an effort to level the direct-to-home satellite television playing field between the newcomer ExpressVu and the established veteran in the industry, Shaw.

Since the rules were written, there has been a massive consolidation in the broadcasting and broadcasting distribution industry in Canada. On the broadcasting side, the private commercial networks - CTV and Global - and most digital cable channels have been bought by Bell, Shaw or Rogers. On the distribution side, Bell Canada has taken full ownership of ExpressVu (now called Bell Satellite) while many smaller cable concerns have been taken over by Shaw and Rogers.

In its application to have the old rules struck down, Shaw argued the old regulations were no longer necessary primarily for two reasons. First, Shaw said there was now a very competitive broadcasting distribution market in Canada. Second they said the regulations discriminate against Shaw Direct, since there are no similar restrictions on their only satellite competitor, Bell Media.

Shaw concluded that the rules left them at a competitive disadvantage. For example, Bell Media could bundle their satellite TV service with their phone service but Shaw could not bundle their satellite service with their phone service.

Despite interventions in opposition to the application from Canadian Independent Communications, Free HD Canada, Saskatchewan Telecommunications and Telus, the commission agreed with Shaw that the distribution market in Canada was competitive and that Shaw was at a competitive disadvantage.

Discuss the ruling in Digital Home’s Canadian Television Industry / Channels and Providers forum .