Must-offer status prompts Sun News to renegotiate carriage agreements

The CRTC is granting must-offer status to Canada’s national all-news specialty services and will require broadcast distributors to offer those channels on a standalone basis, though not necessarily in “news neighbourhoods,” the commission said. In a decision Thursday, the CRTC said it will require broadcast distributors to make five Canadian all-news channels available to all of their subscribers by March 19. Those services are Quebecor Media Inc.’s Sun News Network and its TVA Group subsidiary’s Le Canal Nouvelles, as well as CBC/Radio-Canada’s CBC News Network and Réseau de l'information (RDI), and BCE Inc.-owned CTV News Channel. The distributors, the commission added, must also make those channels available to their subscribers on an à la carte basis by no later than May 20, though they won’t be required to package them together on the dial in “news neighbourhoods,” as the commission previously considered. “Canadian news services are an important part of our democracy,” CRTC Chair Jean-Pierre Blais, said in a release Thursday. “With the rules we are announcing today, Canadians, as citizens, will have access to the news services that are of interest to them and will therefore have an opportunity to be exposed to a variety of opinions on matters of public concern.” The CRTC launched in August a consultation on proposed regulations for a new regulatory approach to national all-news channels after the commission rejected Sun News’ application for mandatory carriage on all basic TV services. At the time, Blais said commissioners were concerned that Canadian news services weren’t being given a “pride of place” in the broadcasting system, leading the commission to propose those channels receive a “must offer” licence designation — which would require broadcast distributors to offer those channels to their subscribers, though not necessarily on basic service — and that distributors must place Canadian news services in “close proximity” in the channel lineup. In its decision Thursday, the CRTC said it found that Canada’s national news specialty channels “are generally disadvantaged” in their negotiations with broadcast distributors over the per-subscriber fees distributors pay to carry the channels and other related terms and conditions, such as where those channels are placed on the dial. The national news channels are also more expensive to operate than other services, the commission added, noting that those channels typically need to invest in “reporting staff and regional bureaus,” and that they face more stringent Canadian programming requirements. As a result of those expenditures, the commission said, all-news channels require “wide distribution” under “reasonable terms” in order to meet their programming commitments and to continue playing a “vital role” in the broadcasting system. If they can’t reach reasonable agreements through negotiations with the distributors, the commission added, they can turn to a CRTC dispute resolution process. Kory Teneycke, vice-president of Sun News Network, said in an interview Thursday that Sun News will attempt to renegotiate its existing carriage agreements with broadcast distributors, and to reach carriage agreements with television providers that didn’t carry the channel previously. He said he expects the commission’s decision will allow the channel to negotiate higher carriage rates from distributors, which currently pay an average of nine cents a month for every customer who subscribes to Sun News Network. CBC News Network, Teneycke added, receives 63 cents per month per subscriber, while foreign news channels receive an average of 73 cents per month per subscriber from Canadian broadcast distributors that carry their services. “The central issue for us has always been distribution and price. Those are the key issues, and this will allow our contracts to be opened in those areas,” Teneycke said in the telephone interview. “Those massive discrepancies need to change and will change under this framework,” he added. Shawn Hall, a spokesman for Telus Corp.— which is one of the broadcast distributors that does not currently carry Sun News — said in emailed statement that Telus is concerned that the decision will affect its channel packaging, which he said already gives Telus’ TV subscribers the choice of 16 “simple theme packs” and more than 100 channels on a standalone basis. “We support any decision that increases choice for our customers but are concerned any time we’re mandated to offer content as part of a particular package, as we’d rather leave that choice up to individual customers,” Hall said. “We plan to bring that perspective to the CRTC’s review of TV’s future in Canada.” In its decision, the commission said it would not require broadcast distributors to place the all-news channels together on the dial in news neighbourhoods, noting that the requirement could result in disruptions to viewers if broadcast distributors are forced to change their channel placement. Instead the commission said distributors that choose to place some all-news services together on the dial must include all of the all-news channels in relative proximity, including both English and French languages. “Failure to do so could be viewed as undue preference,” the commission said. The CRTC added that it will also require all television providers to offer the all-news channels on “the best available discretionary package consistent with their genre and programming,” ensuring that none of those services end up in less popular channel packages. Former CRTC vice-chair of broadcasting Michel Arpin said in a telephone interview that the commission’s decision will have little impact on CBC News Network and RDI — which already have mandatory distribution status — or on CTV News Channel, which is also already available to most Canadian TV subscribers. The “big winner” in the decision, Arpin said, will be French-language all-news channel Le Canal Nouvelles, which is not currently available in many English-speaking areas of the country. “Now they’re going to get access to all of the communities in Canada,” he said. “Francophones all across Canada will be able to subscribe to that service from now on.” Teneycke said Thursday that Sun News is “very happy” with the commission’s decision, which he said will ensure his service is treated in a more “equitable manner.” “The status quo has been altered in a way that’s positive for Sun News and we’re going to move forward quickly with negotiations,” he said. Scott Henderson, vice-president of communications at BCE’s media subsidiary, said in an emailed statement that he does not expect the decision to have a major impact on CTV’s all-news service. “CTV News Channel is already widely available today through commercial agreements with all TV providers, usually as part of their basic packages. This decision should not change that,” he said. In its decision, the commission said it was sensitive to the concerns of some broadcast distributors who said during this summer’s consultation that giving all-news channels must-offer status would lead to other broadcasters launching news channels, even if they don’t provide “high-quality news programming.” As a result, the decision said, the commission will review the “appropriateness” of its “licensing criteria” for national all-news channels during its planned consultation next year on the future of the Canada’s TV broadcast system, and will not process any applications to launch new, all-news channels until after that review is completed. “Once the criteria are implemented, the Commission will be in a better position to assess such applications and to evaluate whether any newly licensed national news services should be added to the distribution order,” the decision said. — With reporting from Nicholas Kyonka at nkyonka@thewirereport.ca and editing from Anja Karadeglija at akarad@thewirereport.ca

Must-offer status prompts Sun News to renegotiate carriage agreements

Broadcast | December 19, 2013

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Must-offer status prompts Sun News to renegotiate carriage agreements

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