Shaw, Telus, Cogeco line up against CRTC’s ‘news neighbourhood’ regs

Several broadcast companies are opposing the CRTC's proposed “news neighbourhood” regulations intended to help news channels like Sun News Network get a leg up in the broadcasting system. Shaw Communications Inc., Telus Corp., CBC/Radio-Canada, Cogeco Cable Inc., and a former senior broadcasting policy official at the CRTC, submitted comments opposing a proposed regulation that national, all-news channels must be offered to subscribers and grouped together in “neighbourhoods” on the dial. Shaw, in comments filed with the CRTC Monday, said Sun News' subscriber levels are a reflection of being a “niche” channel, and that Shaw is concerned the CRTC’s intervention into the all-news genre could set higher wholesale carriage rates. “Sun News' current distribution reflects the level of customer demand compared to other news services. The distribution of Sun News also reflects the fact that it is a niche specialty rather than a mainstream national news service,” Shaw said in its comments to the CRTC. Sun News, owned by Quebecor Media Inc., earlier this year applied for mandatory carriage on basic TV, arguing at a CRTC hearing in April that that it needed to be on basic service to get ahead as a “new entrant” in Canada’s broadcast market. Quebecor said at the hearing it spent more than $40 million on the conservative-oriented news channel since its launch in the spring of 2011 and that it lost a net $17 million in 2012. Sun News officials said the channel receives an average wholesale fee of 9.7 cents per subscriber per month while CBC News Network receives 63 cents and Canadian news channels receive, on average, 33 cents. Last month, the CRTC denied the Sun News request for mandatory carriage. At the same time, it proposed regulations for a new regulatory approach to national all-news channels, licensed as “Category C” channels, which include Sun News Network, CBC NN, and CTV News Channel. The commission proposed that the news channels receive “must offer” licence designations, so that broadcast distributors must offer them to customers (not necessarily on basic service); that distributors must place Canadian news services in “close proximity” in the channel lineup; and that they must be available to customers in a TV channel package as well as on a standalone basis. The regulator also proposed that broadcast distributors be required to file all carriage agreements reached with Category C channels, so the regulator can see the rates. Where carriage agreements are not reached within 120 days before the expiry of the existing carriage agreement, the distributor should enter the commission's dispute resolution process, the CRTC said. “Shaw is concerned that the Commission appears to be suggesting that it needs to intervene to increase the rates paid by BDUs and, ultimately, consumers. The rates paid to non-Canadian services have been commercially negotiated—the Commission cannot and should not intervene to lower these rates,” Shaw wrote. The company said the regulation could negatively affect consumers by restricting customer choice and disrupt channel lineups and packages. Shaw added that the commission, in its decision denying Sun News' application for mandatory carriage on basic TV, “correctly concluded that Sun News is not of exceptional importance” and that existing news channels now available to consumers achieve the objectives of the Broadcasting Act. In similar submissions for the CRTC's consultation, broadcast companies said the proposals would work against the deregulation of all-news channels, and the creation of the Category C licences, through decision 2008-100 issued in 2008. Cynthia Stockley, a retired senior policy official who worked on the 2008-100 broadcasting decision at the CRTC, also filed comments opposing the proposal. “uch a requirement would impose an open-ended obligation on the part of broadcasting distribution undertakings to distribute numerous such services,” Stockley wrote. “The general availability of quality established services such as the CBC and CTV News Networks, as well the presence Sun News Network, also argues that mandatory distribution of news services unwarranted in order to achieve the objectives of the Broadcasting Act.” Cogeco similarly said it opposes the regulations, and that they will lead to television subscribers eventually paying for a group or package of existing and any new all-news channels. Telus said it “strongly urges” the CRTC not to implement the regulations, which were made using “overly simplified calculations” that “fail to take into account both sides of the equation in a distribution deal.” CBC, in its comments filed with the CRTC, said the shuffling news channels would involve a “major re-alignment” that would be “very confusing” for television subscribers. CBC News Network and CTV News Channel are carried on some distributors' basic television services, depending on the provider. CBC suggested that, as a result of the regulations, national all-news channels could be moved higher up on the dial so that they are grouped together. “Viewers are accustomed to looking for CBC News Network, RDI and other services in specific locations,” said CBC. “If those locations were to change dramatically this would be highly disruptive and not at all consumer-friendly.” Watchdog group the Friends of Canadian Broadcasting said in a separate submission that it opposes the regulation of Category C services, “which appears to be for the singular purpose of ensuring that Sun News acquires not only mandatory carriage and specific dial positioning but also a CRTC-sanctioned dispute resolution mechanism that would appear to pave the way for Sun to argue for rate parity with existing national news services—and possibly even existing US services.” Friends added that any regulations favouring the success of the sometimes controversial Sun News Network are politically charged, and that if the CRTC's proposals are adopted, “the Commission would face justified concerns that it was succumbing to political interference.” The Public Interest Advocacy Centre, the Consumers' Association of Canada, and the Council of Senior Citizens' Organizations of British Columbia said in a joint submission that they support better public access to all-news channels, though they said there is concern the regulations “may impair affordability and consumer choice in television services.” The groups recommended that the CRTC remove any all-news specialty channels from basic TV service to lower the pricing of basic television, and require that the channels be made available on a stand-alone basis or in a separate all-news package. Quebecor said the CRTC is recognizing that the market is tough for new entrant all-news channels. “While Sun News is obviously disappointed that its application for mandatory distribution on analog and digital basic service in Canada was denied by the Commission, it is pleased that the CRTC has recognized that Canadian news services are not currently being given a 'pride of place' in the Canadian broadcasting system and is seeking to improve this situation swiftly,” Quebecor said in comments. “Closing the gap between the average wholesale fee paid for US news channels and Canadian news channels will clearly allow for an expansion of first-run, original Canadian programming that is consistent with the objectives laid forth in the Act,” the company said. Quebecor cautioned that it does not support the CRTC's proposed requirement for broadcast distributors to file affiliation agreements with the CRTC for news channels. It said the regulator can see affiliation agreements when it assists in dispute resolution processes for carriage deals. The company said that the CRTC's proposed new regulatory regime for all-news channels should prevail over any existing agreements Sun News has with distributors, so that those deals may be annulled if necessary. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Shaw, Telus, Cogeco line up against CRTC’s ‘news neighbourhood’ regs

News | 09/10/2013 8:52 pm EDT

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