Sun News open to ‘news neighbourhoods,’ threatens to fold if carriage problems persist

Sun News Network said the possibility of a “news neighbourhood” regulation for the grouping of news channels on the TV dial would be helpful as the Quebecor Media Inc. news channel told CRTC commissioners it would fold if its carriage issues are not addressed. “Our application speaks strongly to the issue of dial placement and that it does matter,” Kory Teneycke, vice-president of Sun News Network, said at a CRTC hearing Thursday in response to a question from commission Chair Jean-Pierre Blais about possible news neighbourhood regulation. “A more established, long-lasting dial placement matters in terms of audience. In so far as you group similar channels together on the dial, you’re certainly helping the case of new entrants in the sense that you’re putting them next to your competitors. I think that is a workable approach for a channel such as ours,” Teneycke said. The regulator is holding eight days of hearings on new applications for mandatory carriage on basic TV service, including one from Sun News, though Blais warned applicants last week that the CRTC has set the bar “very high” for mandatory carriage licences and is concerned about consumer choice and affordability in the TV provider market. Sun News said last week that it wants mandatory carriage on basic cable to get a leg up as a “new entrant” in Canada’s broadcasting market and help deal with competing broadcast distributors that place the channel in the dial’s “stratosphere.” During the hearings, Blais has asked broadcast distributors about the possibility of a news neighbourhoods regulation, which would require news channels to be grouped together on the dial and ensure that broadcast distributors cannot place competing news channels too high on the dial or move them around to the channel’s disadvantage. Blais has asked all broadcast distributors to fill out forms about which foreign and Canadian news channels they carry and their channel placement on the dial, The Wire Report reported this week. “It’s one of many possible approaches the commission may want to entertain. It puts you in the same neighbourhood of similar channels and addresses the core issue of what we’re talking about, which is individual BDUs putting properties that they own ahead of properties they don’t own,” Teneycke said, adding that the regulation would be helpful and a “step in the right direction.” “We think there are many ways of skinning that particular cat, and we leave it to your judgment to find the best one,” Teneycke said. Teneycke, in his opening remarks to commissioners on the final day of the hearing Thursday, warned that the channel would close if it does not receive meaningful help from the CRTC to reverse carriage issues and financial losses. Sun News said it has not reached carriage deals with MTS Inc. and Telus Corp., and Teneycke said a “must offer” licence from the CRTC—requiring broadcast distributors to put the channel on their systems and offer it to their subscribers—would not be enough. “A ‘must offer’ licence would not have a meaningful impact on the current trajectory of Sun News, and would inevitably lead to the closure of the station,” Teneycke said. Teneycke said Quebecor has spent more than $40 million on the channel since its launch in the spring of 2011 and lost $17 million in 2012. The channel has applied for mandatory carriage on basic TV service with a wholesale fee of 18 cents per month per subscriber. It says its current average wholesale fee is 9.7 cents while CBC News Network receives 63 cents and the average for news channels is 33 cents. During discussion of a possible news neighbourhood regulation, Blais asked Teneycke whether the company’s “first preference” remains a mandatory carriage, or 9(1)(h) licence, on basic cable. Teneycke replied: “I don’t think it’s a hill for us to die on, Mr. Chair.” Still, Teneycke said a 9(1)(h) licence is “the obvious solution for us.” The company cannot afford to spend another “year or two” filing regulatory complaints or going through dispute resolution negotiations to reach fair carriage deals with broadcast distributors, he said. “So you’re ready to throw in the towel only after two years. A lot of companies have to spend a great, in a digital economy, a great deal of time defending their intellectual property in court. It’s only been two years,” Blais said. Teneycke responded that the channel is at an “impasse” with broadcast distributors that don’t want a fair deal with Sun News and are offering too low a price for the channel in an effort to put it out of business. “It’s not a serious negotiation when we’re getting one-sixth of what CBC is getting,” he said. “Were we to be seized by an undue preference proceeding, we would get the evidence know exactly what was happening,” Blais said. “There’s a process for that.” —With reporting by Simon Doyle at sdoyle@thewirereport.ca and copy editing by Nicholas Kyonka at nkyonka@thewirereport.ca

Sun News open to ‘news neighbourhoods,’ threatens to fold if carriage problems persist

Broadcast | May 2, 2013

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