POLITICS

Sun News makes its pitch to CRTC for a guaranteed spot on the dial

04/23/2013 10:10 EDT | Updated 06/23/2013 05:12 EDT
GATINEAU, Que. - Sun News Network, the conservative-minded upstart that vowed to shake up the media landscape when it launched two years ago, made its pitch Tuesday to the federal broadcast regulator for a guaranteed spot on the dial.

The Quebecor-owned network is seeking what is known as mandatory carriage from the Canadian Radio-television and Telecommunications Commission, which would require the channel to be included in every basic cable and satellite package across Canada.

Mandatory carriage would generate significant revenue for the network, which is proposing that it would earn 18 cents a month from every household that subscribes to a basic cable or satellite package.

That would help offset the network's losses, which were $17 million in 2012 — a situation that Quebecor (TSX:QBR.B) calls "clearly unsustainable."

Sun News says the current distribution agreements are inadequate to support the channel, which is only offered in 40 per cent of Canadian households.

It says such distribution challenges also hurt advertising revenues.

"We're here because Sun News has not been getting a fair shake," said Luc Lavoie, the network's head of development.

"From stratospheric channel placement to limited market access, Canada's cable and satellite distributors have taken the choice to watch Canadian programming away from consumers."

Quebecor wants the CRTC to require that Sun News be carried on all analog and digital basic services in Canada through the end of 2017. It would then be treated like other "Category C" services.

"Our plan would allow Sun News to establish an audience under similar rules and regulations to those afforded CBC Newsworld and CTV News Channel for 21 and 13 years respectively," the company said in filings to the CRTC.

"We don't begrudge our competitors in any way, we simply want the same rules that they enjoyed — at least for the next five years."

Cable and satellite providers who also own news channels do not want competition from Sun News, said Kory Teneycke, the network's vice president. He also argued Sun News ought to have a lower place on the dial, so more people will see it.

"We're here as a new entrant because we see an opportunity in the market ... to provide Canadian content that Canadians want to watch," Teneycke said.

"But in order to do that, we have to be able to put the product in front of Canadians, and our competitors have no interest in seeing that happen."

Not granting Sun News mandatory carriage would effectively bar any new channel from entering the market, Lavoie said.

"All we're saying is, make sure that people see our product. Make sure they see it for five years at a reasonable and fair price ... let's do that for five years, and if in five years, it hasn't worked, we're dead," he said.

"But if we're not exposed, if we're not distributed, then nothing will ever happen."

Sun News launched in April 2011, and was promptly dubbed "Fox News North" by its critics. The CRTC approved a five-year licence for the channel in November 2010 after Quebecor dropped its request for a special licence that would have required cable and satellite carriers to offer the service.

Sun News was one of six applicants who appeared Tuesday to kick off eight days of CRTC hearings into mandatory carriage.

CRTC chairman Jean-Pierre Blais noted the high threshold for applicants to be considered for mandatory carriage.

"Given its exceptional nature, the CRTC has set the bar very high for obtaining a mandatory distribution order on digital basic service," Blais said.

"That said, the hearing panel is approaching this public hearing with an open mind regarding the proposals by the various applicants."