UPC changes broadcast tune and decides to apply for license

That move may bring an end to an ongoing dispute between @Entertainment and digital rival Canal+Polska over whether the former was broadcasting legally in Poland. Canal+, which has a broadcast license, has filed lawsuits in Poland and Hungary as well as repeatedly appealed to the KRRiTV to take a stand on delocated broadcasting.
Several companies, including pay-television station HBO, beam their signal into this market from another location, using international treaties to avoid having to obtain a broadcast license here, which also comes with Polish-content requirements. @Entertainment, which beams its signal from the U.K., had been one of those companies claiming it did not need a Polish license.
Henrietta Hirst, UPC's director of communications, said last week though that the company wants to operate legally under both international and Polish law.
Canal+ was politely pleased by UPC's decision. "It's good news because we'll finally gain a competitor who will have to meet the requirements for any regular player on the Polish market," said Tomasz Kazmierowski, deputy managing director of Canal+ Polska.
UPC announced its intention to apply for the license at a press conference last Tuesday. It was the first official appearance of @Entertainment's new owner since the two companies signed the sale agreement last June.
UPC's Schneider said that the company was intent on moving forward with @Entertainment's digital television platform, Wizja TV, which has been operating for one year. Canal+ operates a competing platform, called Cyfra+, with several Polish entities including public broadcaster Telewizja Polska (TVP).
Many had questioned whether Poland's market is big enough to support two digital broadcasters. @Entertainment and Canal+ had even talked about joining forces at one point last year. But those sentiments appear to have changed.
"Unlike last year, this year I hear people saying that the Polish market can absorb two digital platforms and not only one," said Jaroslaw Sellin, member of the KRRiTV. "The Polish market is comparable in size to the Spanish one where there are also two digital platforms already."
Schneider also quashed the idea of teaming up with Canal+ at the moment. "It might be sensible to cooperate in a long-term perspective, but nothing is being contemplated at this moment."
Sellin said that granting UPC a broadcast license should not take long. "The station has been on the Polish market for a year now and its profile is already well known," he said. "It's like the case of Polsat, which five years ago applied for a concession when it was already broadcasting its programming from abroad."
UPC also said last week that it plans to move into Poland's rapidly developing market for internet access. The company will roll out broadband access to internet via cable by the end of the year, Schneider said. The service, called Chello, has already been introduced in Austria, Belgium, France, the Netherlands and Norway, he said.
UPC is the second company to announce cable internet access. Aster City, an Elektrim-owned cable company with about 300,000 subscribers mostly in Warsaw, has been providing cable internet on a mostly trial basis to about 1,000 homes for about a year. Eventually it plans to bring that service to all of its subscribers, said Ewa Bojar, Elektrim's spokeswoman.
UPC will be by far the largest provider, though, as its purchase of @Entertainment brought with it cable television provider Polska Telewizja Kablowa (PTK), which has nearly 1 million subscribers throughout the country.
By presstime UPC has not returned phone calls inquiring how much it would charge for its internet access.
Cable internet access can achieve speeds of up to 50 times faster than standard dial-up service, Schneider said. But the traditional dial-up internet-service providers (ISPs) say they are not worried about the new competition.
"There will still be a place for dial-up services," said Wojciech Gaweda, president of SM Media, a Warsaw-based ISP. "Not everyone will be able to afford cable service."
Other ISPs are also hoping that they can hold onto their niche. "We have different groups of customers," said Jarek Grabowski, PR spokesman for ISP Supermedia. "We are concentrating our efforts on cities like Poznan, where cable TV penetration is much lower than in Warsaw."
But Andrzej Piotrowicz, head of IT and telecom consultancy AJP Communications, said that the ISPs do have a potential problem on their hands. "Individuals using dial-up solutions in access methods normally get all the additional value-added services, such as e-mail, from the same provider," Piotrowicz said.
The same would presumably be true for cable access providers, so "in this way, yes, it's a threat," he said.
But traditional ISPs, such as SM Media, Supermedia and Polbox do have some advantages in the coming battle, Piotrowicz said. "The existing ISPs have the advantage of experience on the market that the newcomers don't."