The CRTC has opened a consultation on a new Quebecor Media Inc. application for a broadcasting licence for an all-news channel called Sun TV News—but the application still contains a request for must-carry status. 

On Wednesday the CRTC issued a notice of consultation to consider Quebecor’s application, which includes a request for a three-year must-carry guarantee with cable and satellite providers.

In correspondence with CRTC staff last month, Quebecor had asked for limited-term, three-year Category 1 status (or Category A)—which guarantees that all cable and satellite distribution systems carry the channel—for a right-leaning news service informally dubbed “Fox News North.”

The CRTC never published that original application.

But in reply to it, Peter Foster, the CRTC’s director general of television policy and applications, referred to commission policy that says it is not considering applications for new Category A services, which are intended for non-competitive markets, before October 2011.

Now, in an application officially released by the CRTC Wednesday, Quebecor is asking for a standard Category 2 licence, where carriage must be negotiated with the distributors, with an initial exception for must-carry status during the channel’s first three years in operation. The new application makes no mention of a Category 1 status—only “mandatory access.”

But it appears both applications end at the same result.

“Instead of asking for a Cat 1 with a must-offer, we’re asking for a Cat 2 with an exception that includes a must-offer for three years,” Serge Sasseville, vice-president of institutional and corporate affairs at Quebecor, told The Wire Report Wednesday. 

A Category A "must carry" or "must offer" channel means that cable and satellite distributors must make the channel available to all customers but it does not have to be offered as part of mandatory basic packages. 

In a written response to questions from the CRTC, Peggy Tabet, Quebecor’s director of regulatory affairs for broadcasting, suggested that three-year mandatory access for Sun TV News would be necessary for the channel to launch.

When asked how the launch of Sun TV News would be affected if the mandatory access was not allowed, Tabet wrote: “If mandatory access for a maximum period of three years is not granted to Sun TV News, one or more major cable or satellite providers might decide to not offer this service. This would be fatal to our business case … and would likely result in the cancellation of the Sun TV News project.”

Quebecor plans to launch the Sun TV News channel in January 2011. 

The proposed licence would replace Quebecor’s over-the-air Sun TV channel in Toronto if it is approved by the CRTC.

In its CRTC application, Quebecor said its over-the-air Sun TV channel has a deficit of $50.3 million and is “without any indication that its financial health will improve.”

Sun TV News would provide right-leaning, populist news and analysis programming.

The proposed channel has not been without its opposition. The Globe and Mail reported Wednesday that Canadian author Margaret Atwood signed an online petition to keep Sun TV News off Canadian airways.

Next year, all-news services CBC NN and CTV News Channel will lose their must-carry status. News services will be defined as operating in a competitive genre and instead have to negotiate with distributors for carriage like most specialty channels.

In a supplementary brief attached to the Sun TV News applications, Quebecor argues that CBC NN and CTV News Channel had must-carry status for 21 and 13 years, respectively.

“Sun TV News requires short-term and time-limited mandatory access for a maximum period of three years by BDUs [broadcasting distribution undertakings] in order to effectively expose and promote its programming to viewers across Canada,” Quebecor wrote in its application.

“We do not ask for mandatory basic distribution, but only to be available on cable and satellite distribution undertakings allowing the public to have access to Sun TV News without any obligation to choose it.”

In an email statement to the The Wire Report, Paul Sparkes, executive vice-president of corporate affairs at CTVglobemedia, which owns CTV News Channel, said he welcomes new competition from Quebecor.

“But all news channels must operate on the same playing field,” Sparkes said.

“If Quebecor is granted an exemption, then we expect all other players to be granted the same exemption.”

Howard Bernstein, a former television producer who has worked for most of the major English networks in Canada, said in an interview that he would be “shocked” if the CRTC granted Quebecor a three-year mandatory carriage exemption for the channel.

“If CBC NN is losing its mandatory carriage, I don’t see how you can hand it out to this new channel,” Bernstein said. “You have to be consistent.”

But Bernstein said a mandatory carriage exemption would be a major coup for Quebecor.

“What it means is that you’re guaranteed to make money,” he said. “You could have no audience and you’ll make money.”

The majority of the revenues for CBC NN and CTV News Channel come from cable and satellite subscriber fees.

The CRTC has set the wholesale distribution rates at a minimum of 14 cents per subscriber for CTV News Channel and 63 cents for CBC Newsworld—but the actual rates are negotiated.

In 2009, CBC NN generated revenues of $64.6 million from 10.648 million cable and satellite subscribers.

The same year, CTV News Channel generated revenues of $14.7 million from 8.5 million cable and satellite subscribers.

In its original application to the CRTC, Quebecor said Sun TV News would be an “information and analysis channel, a completely new genre in Canada.”

Following correspondence with CRTC staff last month, the company brought the channel’s nature of service in line with the CRTC’s definition of a national news service.

The CRTC’s notice of consultation Wednesday said the channel will fall within “the standard conditions of licence set out in Conditions of licence for competitive Canadian specialty services operating in the genres of mainstream sports and national news.”

Sasseville said he is confident Sun TV News will receive approval from the CRTC.

“We’re hopeful the process will proceed rapidly and that we’ll be able to be on the air in the beginning of 2011,” he said. “We’re going full steam ahead with the project.”

The CRTC will hold a hearing to consider Quebecor’s application on Nov. 19, 2010. Interested parties will have until Oct. 1 to submit comments or interventions related to the application.

jmigneault@thewirereport.ca

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