A solution to cable problem

December 29, 2008

Dear Sir,

Re: The Cablevision/BBC Impasse

The logic behind the Ministry of Telecommunications position in respect of the current CableVision/ Bermuda Broadcasting Company ("BBC") impasse escapes me. As I understand it, the BBC is licensed to broadcast its TV programmes 'over the air' and CableVision is licensed to distribute its programmes "via cable".

This seems to imply that, without the assistance of CableVision, BBC's viewers are only able to pick-up BBC's broadcasts via antennae. This of course presents BBC with a real problem because many households in Bermuda are unable to receive BBC's broadcasts. This is due to the fact that the strength of BBC's broadcast signal is weak in certain areas, many households would prefer not to have to put up an antenna, and/or because the many hills in Bermuda often block the signal from reaching certain homes.

The inability of many potential BBC viewers to receive its broadcasts without the assistance of CableVision presents a major challenge to BBC. This is because the advertising fees that advertisers are willing to pay are based on the number of people who view their programmes. It is quite evident that their advertising revenue is currently suffering based on the fact that their advertising slots are quite frequently filled with the ZBM or ZFB logos. I suspect the increasingly poor quality of their broadcasts (e.g. out-of-sync voice and video signals) may also be a contributing factor in their perceived decline in advertising revenues.

It would therefore seem that, if BBC is to survive as a viable business, it needs CableVision to carry its broadcasts so that it can maximise its viewership and therefore its advertising revenue. I gather that sometime after CableVision began operating it assisted BBC in this regard by carrying BBC's programmes, without charge.

While one can probably make a good case for making it mandatory for CableVision to have to carry BBC's programmes, I am at a loss as to why the Ministry of Telecommunications would give BBC the right to charge CableVision a fee for Cablevision doing it a favour by carrying BBC's programmes. In most commercial arrangements, a business (such as BBC) that needs the services of another commercial entity (such as CableVison) usually pays (not charges) the provider of the service.

It seems equally absurd that BBC has been given the right to charge CableVision whatever fee it wishes, regardless of the size of the fee. As far as I am aware, cable TV companies purchase the programmes for each of its cable channels from cable TV programme suppliers (not from 'over the air' broadcasters) for a fee. Based on common business practice, I would think that CableVision can refuse to purchase a programme from a supplier if they felt that the fee for the programme was too high. Putting aside the argument that CableVision is providing a service to BBC for which BBC should be paying CableVision, it therefore makes no sense to me that CableVision would be obligated to pay BBC a fee that it believes is too high.

In my opinion, the Ministry of Telecommunications should

(a) obligate CableVision to carry BBC's and VSB's programmes;

(b) rescind the right it has given BBC to charge CableVision for carrying BBC's programmes;

(c) require BBC to improve the quality of its broadcasts by, for example, mandating BBC to upgrade its equipment from analog to digital; and

(d) require CableVision to give its subscribers the right to subscribe to individual channels without having to subscribe to a package of channels, which I understand is a requirement that cable TV regulators in the USA are currently considering – currently, I have to purchase a package of 72 channels in order to access the 7 to 10 channels that I view.

AN AVERAGE JOE

Smith's

There's gold in the depths

December 20, 2008

Dear Sir,

Since the question was raised in a recent newspaper column as to who owns Bermuda's deep-sea mineral wealth, I thought your readers might be interested to know that on the morning of 12th June, 1996, Bermudians woke up owning exclusive sovereign rights to 125,600 square miles of new territory. This happened because, on the previous day, His Excellency the Governor had proclaimed the establishment of an Exclusive Economic Zone for Bermuda. We already owned sovereign rights to our Territorial Seas as a result of an Order in Council eleven years earlier. To my knowledge, Bermuda is the only UK Overseas Territory that has such sovereign rights and any royalties and/or taxes that might be generated from future deep-sea mining operations will go entirely to the Government of Bermuda.

In September 2001, the Government, under the leadership of Dame Jennifer Smith, granted an exploration licence to Ocean Projects Limited (OPL) a Bermudian deep-sea mineral exploration and bio-prospecting company. This far-sighted decision has already realised a greatly enhanced understanding of our natural history and one visiting scientist, specialising in soft corals, was recently surprised to discover, housed in the Bermuda Natural History Museum collection, "a breadth of species diversity heretofore unknown for Bermuda". Many of these "new species" are there as a result of a highly productive collaboration between Government, science and industry including OPL that achieved a Bermudian deep-sea research capability comparable to anywhere else in the world. It wasn't only the biologists who made startling discoveries, OPL geologists uncovered a complex geological history and some experts now think the potential for vast wealth within our newly acquired deep-sea territories is very real. If OPL goes on to discover a viable mineral resource, the Smith Government will have set the stage for the continued economic success of Bermudian generations to come.

According to its mission statement, "Ocean Projects Limited is a Bermuda deep-sea exploration company incorporated to discover and develop hidden resources in the deep ocean using precise and unbiased science to maintain the proper balance between profitability and environmental responsibility." OPL will continue to include top marine scientists in its offshore operations to ensure that if and when Bermudians decide to mine the deep-ocean, it will be a fully informed decision and that all necessary steps can be taken to minimise the environmental impact. During the last 40 years Bermuda has seen unprecedented economic growth. We have also seen the associated development of terrestrial habitat fuelled by this economic success. I think the time has come to seriously explore the potential for moving some of our economic activity over to the aquatic 99.98% of what I have come to think of as "Greater Bermuda", to help ease the pressure on the tiny portion that's not wet.

But, back to the original question: who owns Bermuda's deep-sea mineral wealth? The answer: Bermudians but which Bermudians will actually benefit from the development of these resources?

Firstly, there are Government payrolls, infrastructure, services, and the like, funded by royalties and/or taxes derived from potential development of marine mineral resources. Secondly, if we are smart, ongoing revenues from a sovereign account set up using a portion of those royalties and/or taxes that will continue to pay into the Government coffers long after these resources are mined out. Thirdly, it will be those receiving direct benefit from dividends because they were willing to risk some of their hard earned cash to fund the deep-sea exploration necessary to find these resources in the first place.

The future of deep-sea mining in Bermuda is far from certain, and a prudent investor would not risk more than he or she could afford to lose, but with Papua New Guinea getting ready to mine fabulously rich deposits from depths of 1,500 metres below the surface within their Territorial Seas, the technology necessary to launch this newly emerging industry is being established and one thing is certain, if we don't go out and explore, we will never know what potential lies hidden within our newly acquired territories.

NICK HUTCHINGS

President Ocean Projects Ltd.