Distributors, consumer groups, say no ‘systemic problem’ with news channels

Canada's broadcast distributors and some public interest groups are urging the CRTC not to go ahead with its news channel regulations, arguing there is no systemic problem that needs to be addressed. In final reply comments on the comission's proposed regulations to help startup news channels like Sun News Network get a leg up in the broadcasting system, most companies and groups said the regulations are addressing a problem that doesn’t exist. Shaw Communications Inc., Cogeco Cable Inc., Rogers Communications Inc., SaskTel, Telus Corp., MTS Inc., Eastlink (operated by Bragg Communications Inc.), and CBC/Radio-Canada (which operates competing news channel CBC News Network), as well as public interest groups the Public Interest Advocacy Centre, the Consumers' Association of Canada, and the Council of Senior Citizens' Organizations of British Columbia, all wrote that there is no evidence of a systemic problem with the distribution of Category C news channels. “here is no evidence that Sun News has faced significant barriers to entry. On the contrary, after only 2 years of operation Sun News has well over 5 million subscribers—far more than many Category A services which have been operating for a decade or more,” CBC said in reply comments filed with the CRTC on Tuesday. “When the entire picture is taken into consideration there does not appear to be a problem requiring a systemic fix.” Last month, the CRTC denied a request from Sun News for mandatory carriage on basic cable, and at the same time, opened a consultation on proposed regulations for a new regulatory approach to national, all-news channels, which are licensed as “Category C” channels. Those include Sun News Network, CBC NN, and CTV News Channel. The commission proposed regulations for news channels to receive “must offer” licence designations, so that broadcast distributors must offer them to customers (not necessarily on basic service), and that distributors must place Canadian news services in “close proximity” in the channel lineup. Initial comments for the consultation were filed earlier this month, and reply comments this week. PIAC, in a joint submission with the other two consumer groups, said in its reply that concerns about the proposed regulations “are widely-shared” among companies and other stakeholders. “hile we recognize the critical importance of national news services to consumers, we also see the Commission’s proposals as being hastily drawn and selective in nature,” PIAC said. The companies and groups said the CRTC proposal is unnecessary, “needlessly intrusive,” and better addressed in the regulator's upcoming review of television services. Quebecor Media Inc., which owns the Sun News channel, said in its reply comments that Category C news channels face several problems and require “a certain level of intervention.” “It is a known fact that Canadian news television services are going through a major crisis. The Commission itself acknowledged the issues faced by those services, especially after hearing the challenges encountered by new entrants offering Canadian Category C news services, particularly in regards to the wholesale fees and the distribution of such services,” Quebecor wrote. “he fact that the Commission itself deemed essential to protect the aforementioned services and hence, decided to put in place a framework, corroborates that this was the only way to protect those services and ensure that Canadians have access to a healthy and diverse range of Canadian news programming,” the company said. Quebecor also took issue with a Giganomics report filed earlier this month in support of Cogeco's submission, which analyzed Sun News Network's financials and argued the channel has performed better than forecasted, reaching 4.9 million subscribers in the 2012 broadcast year. “However, since the service was launched in April 2011, the forecast that Sun News submitted to the Commission and which Giganomics used as a basis for comparison, considers 'Year 1' to be Sun News’ first 12 full months of operation rather than 2012 broadcast year. Therefore, Giganomics’ report based its conclusions on months 6 to 17 instead of 1 to 12, and should thus be completely dismissed,” Quebecor said. Sun News reported total revenue of $5.66 million in the 2012 broadcast year, which ended in September 2012, and a net loss of $18.5 million. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Distributors, consumer groups, say no ‘systemic problem’ with news channels

News | September 25, 2013

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