Must carry licences important for Cancon in consolidated market: Sun News

A must carry licence for all-Canadian news channel Sun News Network is necessary as a consolidated media and telecom market makes it more difficult to secure channel carriage, Sun News Network told the regulator in a filing Monday. “It is unfortunate that we have come to the point where the only way to rectify this situation is for the CRTC to exercise its power in granting 9(1)(h) status to Sun News for a period of 5 years,” the all-news channel, owned by Quebecor Media Inc., said in reply comments filed with the CRTC for its consultation on requests for mandatory distribution licences under Section 9(1)(h) of the Broadcasting Act. Sun News, whose parent company Quebecor owns a cable TV network in Quebec, told the CRTC that mandatory distribution licences are necessary to promote Canadian content in a vertically integrated broadcasting industry where broadcast companies also own broadcast distribution platforms. The CRTC opened a consultation in January on 22 applications for the mandatory distribution of channels, most of which applied for “must carry” distribution on basic cable with fixed wholesale rates. The applicants' reply comments were due Monday and a public hearing on the applications is scheduled to start April 23 in Gatineau, Que. Sun News applied for mandatory distribution on basic TV at a wholesale rate of 18 cents per month per subscriber, arguing that the regulatory protection is necessary for an all-news channel that has run into carriage issues with distributors MTS Inc., Telus Corp., and Rogers Communications Inc. It said in its original application that MTS and Telus do not currently carry the channel. Sun News said the average wholesale carriage rate among news channels CBC News Network, CP 24, BNN, CTV News Channel, and Sun News, is 33 cents, and that some broadcast distributors “only pay 6¢ for Sun News.” The company said in its filing that the channel is requesting 18 cents while CBC News Network receives a wholesale rate of 63 cents and CTV News Channel 15 cents. BNN, it said, receives 35 cents and CP 24 30 cents. “There is no doubt that CTV News Channel would never have launched without a licence that included mandatory distribution,” Sun News said, referring to the mandatory distribution licences originally granted to CBC News Network and CTV News Channel. The CRTC dropped those must carry licences in 2011 with the deregulation of the news and sports genres. “And there is no doubt that they would not have survived had they not been distributed across the board.” The company said Telus carries RT (Russia Today), an English-language Russian television channel, in its basic package, and that “saying there is no room for channels offering 100% Canadian content is, to use their words, 'self-serving and disingenuous.'” Sun News added that Manitoba provider MTS has said “there is little interest in Sun News on the part of their customers” while the company's market research shows demand. The channel operates a studio in Winnipeg, Man., with host Charles Adler, it said, and it aired extensive coverage of the last Manitoba election campaign. "Although we have received very few requests from our customers for Sun News Network," MTS spokeswoman Chelsea Ross said in an emailed statement, "we nevertheless would like to offer this choice to our customers. Unfortunately, we have not been able to reach mutually-agreeable terms with the Sun News Network." Telus spokeswoman Amélie Cliche said in an emailed statement that RT is in Telus' basic package “because they pay to access our subscriber base. We have offered to carry Sun News à la carte but they continue to refuse. We would be pleased to carry them in our basic package on the same basis as RT.” Jennifer Kett, a spokeswoman for Rogers, said in an emailed statement that the CRTC has emphasized the "stringent criteria" necessary to receive a mandatory carriage licence and that, in Rogers' view, "none of the applications meet the Commission’s rigid test." Kett said Sun News competes with other channels for the same target audience and no other mainstream news channels now benefit from mandatory carriage on basic cable. Rogers does not carry Sun News in some areas due to analog versus digital format issues, she said. "Rogers carries Sun News quite broadly; it is available on most digital lineups. The channel is not available in some locations that are analog-only as Sun News is licensed as a digital-only Category C specialty service," Kett said. In its filing, Sun News emphasized the promotion of Canadian content on television and the importance of the objectives of the Broadcasting Act, which it said is “packed with clause after clause designed to ensure more Canadian programming is both created and distributed.” The company said 53,000 Canadians signed a petition “in support of our channel,” and that thousands more wrote letters to the CRTC describing “why they love Sun News.” Those signatures and letters were generated in part by the company's campaign website, CanadianTVFirst.ca. It acknowledged that nearly 20,000 Canadians signed a petition saying Sun News does not reflect Canadian values or views. Many of those signatures came from an online campaign and petition at SumOfUs.org. Luc Lavoie, a Quebecor spokesman for Sun News, said the company is not taking a position on other applicants, such as all-Canadian movie channel Starlight, which is also seeking a mandatory distribution licence on the basis of better promotion and distribution of Canadian content. In response to observers who say the CRTC does appear to want to give out 9(1)(h) mandatory distribution licences, Lavoie said the commission initiated the hearing. “If they didn't want to give any, I guess they wouldn't kick the process into place,” he said, adding that he did not want to speculate on how many mandatory distribution licences may be awarded. “There will be a hearing and we trust the CRTC in their wisdom, that they'll make the right decisions.” Aboriginal Peoples Television Network Inc. (APTN)—which has proposed to renew its mandatory distribution licence and increase its wholesale fee from 25 to 40 cents per subscriber per month—said in reply comments filed Monday that the public expressed “deep support” for the channel. APTN said 98 per cent of 692 comments, filed by those without a direct stake in the broadcasting system, recognized the importance of representing Aboriginal Peoples on TV and their link to society. The channel said 16 interventions opposed its existing mandatory licence. Broadcast distributors charge a retail markup on the wholesale fee, often of about 100 per cent. APTN said it is sensitive to consumer concerns about the cost of cable bills, and that its proposed fee “does not and will not have any material impact on the cost of basic service.” The broadcaster said the wholesale fee increase is “absolutely critical” to a mandate focused on serving the aboriginal community and acting as a bridge to Canadian society. APTN said it intends to rely more on the independent production sector, and that approval of its application would mean $100 million in new spending on independent production over a seven-year licence term. That spending represents about 75 per cent of APTN’s proposed wholesale fee increase, the channel said. “If APTN’s proposed wholesale fee is not approved, then APTN projects that it would actually be required to reduce its current level of spending on independent production over the course of the next licence term,” the reply said. Starlight, a proposed movie channel owned by a group of Canadian film industry members including producer Robert Lantos, is also seeking a mandatory distribution licence, and said in its reply comments that IPTV provider VMedia made “wild and unfounded” allegations against the channel. George Burger, a partner at VMedia, said last week that Starlight's application seeks “public monies” that would amount to $775 million from consumers over a seven-year licence term if transport fees and retail markups are added to the 45-cent per subscriber, per month wholesale rate. In its reply, Starlight said the 45-cent wholesale fee includes a 12-cent transport fee. “The $0.45 wholesale rate was assumed to be doubled to $0.90 as a result of a BDU ‘mark-up’ which results in the ‘3 cents per day’ amount,” Starlight said. Starlight said video on-demand services, like those offered by Shaw Communications Inc. or Rogers, do not offer sufficient consumer access to Canadian film. “Any suggestion that video-on-demand services can provide adequate access for Canadian feature films should be completely dismissed,” Starlight's reply said. It said the channel plans to make available at least 700 Canadian films per year, which would be cheaper for consumers than purchasing movies on-demand. Starlight cited a TVQ survey conducted by Canadian Media Research Inc. from fall 2006 to fall 2011, which found that 76.2 per cent of anglophone respondents said they were “not likely” or “not at all likely” to use video on-demand services in the future. —With reporting by Danika Grenier at dgrenier@thewirereport.ca and reporting and editing by Simon Doyle at sdoyle@thewirereport.ca

Must carry licences important for Cancon in consolidated market: Sun News

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