If persistence and creativity are political virtues, then a company that wants to beam programming to US viewers from a Canadian satellite deserves to be sainted for its efforts.
The company is TelQuest Ventures LP. It has, indeed, been on a quest for two years to convince the Clinton administration and the Federal Communications Commission to let it get into the direct-broadcast satellite business.
For going on a year now, the FCC has been telling the company no go.
So this week, the company sued the federal government in the US Court of Appeals in Washington, DC, charging that the White House has conspired to ruin TelQuest as it plays a trade-politics game with Canada. And here's where creativity comes in.
In its current FCC appeal, TelQuest has argued that all its labor in pursuing the project has given the company a right to claim a spot in the sky that's akin to property rights the US government granted settlers who would work a piece of land for five years. In its suit, TelQuest also reasons that the government has abridged its First Amendment right "to speak to the American people using a DBS service."
To understand this saga, you must first understand TelQuest. It has no customers. It has no assets to speak of. It has one employee - president Barbara Sparks - and is owned by Jared Abbruzzese, a big name in the wireless-cable industry, trying to branch out into satellite services. TelQuest's business plan has been to send digitized programming to wireless-cable companies so they don't have to upgrade their own networks to compete with other digital-video services.
The catch - and it's a big one - is that TelQuest doesn't have a satellite license and couldn't afford to bid for a US orbital slot even if it wanted to. Even heavyweight Tele-Communications Inc. couldn't outbid MCI last year for the last DBS orbital slot. The long-distance company bought the slot for US$682.5 million.
So what's a little guy to do? Well, about a year ago, TelQuest tried to go around the expensive US auction process altogether and struck a deal with Canada's Telesat to lease transponders on two new satellites that would be launched in 1998.
Simple, right? Of course not.
The United States and Canada are in the middle of a fight about content "reciprocity." That's a fancy word that means governments must agree to refrain from restricting other countries' content on their airwaves. In other words, the US government doesn't think Canada should place limits on US programming shown north of the border. But it's easier for the United States to embrace this principle than for most other countries, mainly because the media trade balance worldwide is skewed so strongly in favor of the United States by Hollywood exports. Canada and other nations have often assumed protective stances in the face of the American onslaught.
TelQuest's deal with Telesat called for an undisclosed payment and service to Canadian markets. But last July, the FCC denied TelQuest's application. First, the FCC noted, the request was premature, because the Canadian government itself had not yet granted permission for the satellites. Second, the commission's letter cited Clinton administration concerns that "Canadian content restrictions discriminate against US and other foreign programmers."
The commission turned down a request for reconsideration in October, and the company filed a new appeal shortly thereafter. That's where things sat until this week.
TelQuest's lawsuit says the US government has used it as a "pawn to get Canada to do away with its cultural policy" and that the FCC buckled under pressure from the Clinton administration.
Sparks, TelQuest's president, makes no bones about that or the homesteading analogy. In an interview, she said DBS orbital slots are a "natural resource" and lambasted the FCC for letting its latest appeal languish for six months.
"We're just not kidding," she says of the lawsuit. "We do think this is completely unfair."
