Direct-to-Home (DTH) Satellite Broadcasting

a satellite and a television

Industry Canada is very concerned about the continuing sale and use of illegal satellite decoding equipment. The Department is taking action to raise awareness of this issue and encourage electronic equipment retailers and consumers to refrain from participating in this unlawful type of business activity.

The Supreme Court of Canada has confirmed that decoding without authorization is illegal. Significant losses are being suffered by the Canadian broadcast industry due to illegal decoding. In addition, certain illegal decoding cards are causing radio interference to public safety services.

The Government of Canada through the efforts of the RCMP, Canada Customs and Revenue Agency, and Industry Canada is pursuing enforcement action against commercial ventures engaged in the selling of illegal decoding equipment.

What's New

Bill C-2 - An Act to Amend the Radiocommunication Act
February 5, 2004
This bill has been reintroduced in the current session of Parliament in substantially the same form as it appeared in the previous session of Parliament.

Government of Canada Takes Serious Action Against Satellite Piracy
News Release, October 22, 2003

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List of Models of Equipment Subject to a Determination of Interference
Revision: September 2009

Dealer - Information Letter
October 11, 2002

Interference to Public Safety Radiocommunication Systems from Pirate Devices Used in Direct-to-Home (DTH) Satellite Equipment

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Backgrounder

Direct-to-Home Satellite Broadcasting in Canada

Direct-to-Home satellite broadcasting or DTH is the distribution of television signals from high-powered geostationary satellites to small dish antennas and satellite receivers in homes across the country. Canada's DTH broadcasting system provides Canadians another option for obtaining distinctly Canadian television programming at competitive prices. Since service began a few years ago, Canadians, in rural Canada in particular, have come to expect a diverse range of programming where choice was previously limited and where few options existed.

Canada has two competitive DTH service providers and subscribers are able to choose from a number of subscription programming packages and price ranges to meet their viewing needs and budgets. Canadian DTH service providers rely on subscription revenues to operate their businesses and therefore they have incorporated "encryption" or scrambling technology in their systems.

Canadian DTH Service Providers

In Canada, there are two companies licensed by the Canadian Radio-television and Telecommunications Commission (CRTC) to provide DTH services with coverage through most of Canada. On August 27, 1996, the CRTC authorized Star Choice to operate a Canadian, national, digital Direct-to-Home satellite distribution system following a CRTC public hearing (Decision CRTC 96-529). Star Choice launched their service in the spring of 1997 with the set-top box and 61-centimeter dish retailing for about $900, with installation costs as high as $200. Bell ExpressVu also received CRTC approval in December 1995 and launched its service on September 10, 1997 across Canada. Initially, ExpressVu satellite receivers were priced from $600 to $1000.

As a result of competition in the broadcast distribution industry, prices for DTH equipment have dropped significantly to less than $200 for equipment and installation. Consumers have up to 350 channels to choose from and monthly subscription rates are now as low a $10.95. This happened despite the major investment in infrastructure where the cost to buy and launch just one high power DTH satellite is typically over $300 million.

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Broadcasting Policy

The Department of Canadian Heritage is responsible for broadcasting policy which is legislated in section 3 of the Broadcasting Act. The Act states that the Canadian broadcasting system serves to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada. The aim of broadcasting policy is to foster a broadcasting system that is distinctly Canadian by encouraging "the development of Canadian expression, by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view."

Under the Broadcasting Act, the Canadian Radio-television and Telecommunications Commission (CRTC) is responsible for regulating the broadcasting system with a view to implementing the policy set out in the Act, so as to make sure that Canadians continue to enjoy access to creative and original Canadian television and radio programs using various distribution technologies.

The House of Commons Standing Committee on Canadian Heritage is currently undertaking a study on the state of the Canadian broadcasting system and how successful it has been in meeting the objectives of the Broadcasting Act of 1991. As with previous studies by this Committee, the issues of Canadian content and cultural diversity will be central in the study of broadcasting. For additional news and information, please refer to the Web site for the Standing Committee on Canadian Heritage.

Distribution Rights and Copyrights

The television programming that we enjoy comes from many sources.

  • Local stations provide information on local news and events.
  • National networks such as Global, CTV, TVA or CBC/Radio–Canada provide comprehensive national and international news.
  • Independent production companies create Canadian television and specialty channel programming.
  • American producers bring us many popular television programs.
  • The NHL provides over a thousand televised hockey games.
  • Hollywood movie studios release films which are eventually shown by network and local broadcasters.

Copyright holders capitalize on their television programs and movies by granting licences on a geographic and time basis to broadcasters such as TV stations, TV networks, specialty channels and pay-per-view. Satellite Direct-to-Home services are directly or indirectly part of the distribution chain because they rebroadcast distant and local TV stations, and they distribute pay-per-view, network feeds, movies and specialty channels.

A Canadian distributor who pays for and receives a licence to broadcast a program is typically granted that right only for Canada, and an American distributor would be granted a similar licence to broadcast the same program only for the U.S. A Canadian broadcaster who has purchased distribution rights suffers financial loss if the same program provided on a U.S. satellite signal is decoded in Canada. Sections 9(1)(c), (d) and (e) of the Radiocommunication Act, as well as the right of civil action under section 18 of that Act, are part of the legal framework that fosters respect for distribution agreements to the benefit of the Canadian entertainment and broadcasting industry. They also serve to meet Canada's North American Free Trade Agreement (NAFTA) obligations.

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Consumer Information

When is TV Programming Free?

Television programming that is not scrambled (encrypted) by a TV broadcaster is considered free. Local stations that broadcast on standard television channels from a nearby transmitter can be received freely using rabbit ears or an outdoor antenna connected to the back of the television. Even though we think of this programming as free, it really isn't. The creators of the programs who hold the copyrights are still paid royalties thanks to commercial sponsors. Consumers indirectly pay for the programming by watching their commercials and by buying their products.

Cable and Satellite Subscription Television

When cable TV was first introduced, it became possible for consumers to enjoy programming "rebroadcast" from distant stations which they could not normally receive with their rabbit ears or outdoor antenna. For a monthly subscription fee, the cable company connects clients and gives them the choice of many more stations than is possible to receive with a simple antenna. The subscription fee defrays the cost of the cable equipment as well as for programming provided by Canadian and foreign producers.

In recent years, the introduction of scrambling or "encryption" technology has made Direct-to-Home satellite broadcasting possible. It is scrambling technology that allows satellite companies to provide a viable cable-like service. DTH companies "connect" paying subscribers by allowing the signal to be descrambled by their receiver. The subscription fees help to pay for a very expensive satellites (which are typically over $300 million) and for the hundreds of channels of television programs created by Canadian and foreign producers. DTH satellite provides a competitive alternative to other television distribution systems in towns and cities across Canada and has given consumers in rural Canada high-quality, low-cost entertainment and information services that were previously unavailable to them.

Pirating Satellite Signals

Pirating occurs when someone modifies the DTH receiver to defeat or bypass the scrambling system in order to receive channels without paying for a subscription. The satellite company is not compensated for the service they deliver. The performers and producers of the television programs are not compensated for programs the pirate enjoys. Pirating is stealing and ultimately threatens jobs and growth in the Canadian broadcasting industry.

The DTH Black Market

The DTH black market occurs when unscrupulous individuals sell illegal devices which specifically defeat or bypass the scrambling system in a DTH satellite receiver. The black marketer tries to entice consumers with the notion of "free TV" or "free-pay-per-view" when in fact he or she is asking the consumer to buy an illegal device and receive television satellite services illegally.

No Free Ride

Consumers who purchase illegal black market equipment are at risk of losing reception at any time because DTH satellite service providers frequently send out electronic counter-measure signals to disable this equipment. DTH service providers may also implement major upgrades to their encryption systems which can render black market devices useless. Consumers should also consider that black market equipment has no warranty, and that any modifications made to satellite-receiving equipment in order to install the black market device will typically void the equipment manufacturers warranty.

The Radiocommunication Act and the Grey Market

In Canada, the DTH grey market refers to the sale and marketing of American DTH satellite receivers and subscriptions to American services in Canada. The grey market creates a number of difficulties for Canada. For example, it undermines Canada's broadcasting policy for a distinctly Canadian broadcasting system, as well as undermining jobs and growth in the Canadian broadcasting industry.

The Radiocommunication Act Section 9(1)(c) states: "No person shall…decode an encrypted subscription programming signal or encrypted network feed otherwise than under and in accordance with an authorization from the lawful distributor of the signal or feed". This section of the Radiocommunication Act has been the subject of recent court challenges involving retailers who sell American DTH satellite receivers and services in Canada. This resulted in confusion due to differing judgements rendered regarding the interpretation of section 9(1)(c). A Supreme Court of Canada decision in the case of Bell ExpressVu v. Richard Rex, made on April 26, 2002, confirms that provisions in the Radiocommunication Act forbid the illegal decoding of satellite television programming.

Contacts

For Further Information: 

If you have specific questions, you may contact an Industry Canada representative via email or by contacting the Industry Canada Help Desk at 1-800-328-6189 (Canada) or 613-954-5031.

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Frequently Asked Questions (FAQ)

  1. Is it true that it is legal to import an American satellite dish?
  2. What is the DTH grey market?
  3. Am I allowed to import a DTH satellite system from the United States?
  4. Under what conditions would the RCMP ask Canada Customs and Revenue Agency to hold a DTH system at the border?
  5. Why does Canada have rules making the reception of American satellite DTH programming illegal?
  6. What are the risks involved with buying a grey market American satellite DTH system?
  7. What is the DTH black market?
  8. Will black market satellite DTH receivers become legal?
  9. What are the risks to purchasing black market equipment?
  10. What are television distribution rights?
  11. How has Canada benefited by having its own Satellite Broadcasting System?
  12. What DTH programming is available to Canadians?
  13. Who do I contact if I have more questions?

1. Is it true that it is legal to import an American satellite dish?

If a satellite dish system is imported and intended to be used for unlawful decoding of encrypted signals, as prohibited in section 9(1)(c) of the Radiocommunication Act, this constitutes an offence under section 10(1)(b) of the Act. It is illegal to use an American DTH satellite service (also referred to as grey market) in Canada to receive and decode encrypted programming. Doing so is in contravention of section 9(1)(c) of the Act.

2. What is the DTH grey market?

The grey market usually refers to the sale of Direct-to-Home receivers and decoding equipment intended to receive encrypted programming signals from American DTH satellites. It also refers to the sale and purchase of subscriptions to receive encrypted programming signals from American DTH service providers. American DTH s service providers do not have the lawful right in Canada to authorize the decoding of their programming. Canadian dealers sometimes offer to set up subscriptions with American satellite service providers on behalf of Canadian consumers using a U.S. address.

3. Am I allowed to import a DTH satellite system from the United States?

Canada Customs and Revenue Agency has indicated to Industry Canada that they will not stop anyone from importing an American DTH satellite system, also known as a grey market satellite system, unless specifically directed to do so by the RCMP. Normal customs fees apply and then the equipment may be brought into the country.

4. Under what conditions would the RCMP ask Canada Customs and Revenue Agency officials to hold a DTH system at the border?

If the RCMP provides customs officials with information that the goods being imported are related to the commission of an offense, Customs may seize the goods on behalf of the RCMP. For example, the police may have information that the goods are stolen and could ask Customs to seize the goods for further investigation. In the case of DTH satellite equipment, the RCMP may have information that certain satellite decoding equipment is being brought into the country, in contravention to the Radiocommunication Act, and could also ask Customs to seize this equipment for further investigation by the RCMP.

5. Why does Canada have rules making the reception of American DTH programming illegal?

There are a number of reasons why Canada prohibits unauthorized decoding of encrypted subscription programming signals. A Canadian broadcaster who has purchased distribution rights for programs suffers financial loss if the same program provided on a U.S. satellite signal is decoded in Canada. Also, the subscriber base for Canadian DTH distribution undertakings is significantly diminished if Canadians subscribe to unauthorized American DTH services. The importation of American DTH equipment and the purchase of American subscriptions ultimately threatens jobs and growth in the Canadian broadcasting industry.

6. What are the risks involved with buying a grey market American satellite DTH system?

In order to comply with distribution agreements, American DTH service providers will not knowingly provide service to subscribers within Canada. That is why grey marketers surreptitiously provide an American address for their Canadian customers so they can subscribe to American DTH services. The programming signals provided by American DTH service providers can be cut off at any time should that service provider discover that the consumer receiving the signals resides in Canada. This is also why grey marketers tell their customers not to use American Pay TV services as this would give American DTH service providers information that the service was being received in Canada and thus obligating the service provider to cancel the service. There are other risks to consider, such as the warranty on equipment obtained in the U.S. may not apply in Canada and the equipment may not be compatible with Canadian DTH systems should the customer wish to switch to a Canadian service at a later date.

7. What is the DTH black market?

The DTH black market occurs when individuals create unauthorized or illegal decoding equipment for sale to consumers. Unauthorized decoders and pirate access cards enable viewers to circumvent the encryption system therefore allowing them to watch programming without paying the monthly fee to the distributor, be it Canadian or American. This form of theft is referred to as theft of telecommunications or intellectual property.

8. Will black market satellite DTH receivers become legal?

No. Retailers cannot legally sell devices, such as black market decoders, that are designed to circumvent the encryption systems of DTH service providers. The Supreme Court of Canada decision in April of 2002 confirmed that the provisions in the Radiocommunication Act forbid the illegal decoding of satellite television programming.

9. What are the risks to purchasing black market equipment?

Anyone who purchases black market equipment is at risk of losing reception at any time because satellite service providers frequently send out electronic counter-measure signals for the intended purpose of disabling illegal equipment. DTH service providers may also implement major upgrades to their encryption systems which would render black market devices useless. Consumers should consider that any modifications made to satellite-receiving equipment in order to install black market devices will typically void the equipment manufacturer's warranty.

10. What are television distribution rights?

Television distribution rights are rights given to broadcasters of television programming by the producers or creators of the programming to broadcast their programs. Distribution rights are typically sold by territory. A Canadian broadcaster who has purchased distribution rights suffers financial loss if the same program provided on a U.S. satellite signal is decoded in Canada. The importation of American DTH equipment ultimately threatens jobs and growth in the Canadian broadcasting industry.

11. How has Canada benefited by having its own Satellite Broadcasting System?

As a result of broadcast policy and legislation, Canada has a competitive and dynamic DTH industry. This has been particularly advantageous for Canadians living in rural areas in Canada who would otherwise not have the benefit of receiving Canadian-oriented broadcasting enjoyed by those living in towns and cities.

12. What DTH programming is available to Canadians?

At the present time there are two Direct-to-Home service providers in Canada that are licensed by the CRTC to provide service in Canada: Bell ExpressVu and Star Choice.

13. Who do I contact if I have more questions?

If you have specific questions, you may contact an Industry Canada representative via e-mail or by contacting the Industry Canada Help Desk at 1-800-328-6189 (Canada) or 613-954-5031.

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