OTTAWA - Sun News Network made its final pitch to the federal telecommunications regulator on Thursday, saying anything short of a guaranteed spot on the dial would spell the end of the channel.
The Quebecor-owned network is seeking what is known as mandatory carriage from the Canadian Radio-television and Telecommunications Commission.
The CRTC is holding eight days of hearings in Gatineau, Que., to examine 22 applications for mandatory carriage from new and existing channels, as well as channels that want to renew their mandatory distribution status.
If the CRTC grants Sun News' application for mandatory carriage, cable and satellite providers would have to include the channel on their basic TV packages.
Some at the CRTC hearings have suggested a "must-offer" designation — rather than mandatory carriage — would suffice for Sun News. Such a designation would only compel cable and satellite companies to make Sun News available to their customers, who could then choose whether or not to subscribe.
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Controversy surrounding the Sun News Network began even before the network went on the air in April, 2011. The Globe and Mail reported in the summer of 2010 that CRTC chairman Konrad von Finckenstein was under pressure from the Prime Minister's Office to resign, in order to pave a smooth path for Sun News to be granted a licence by the regulator. Finckenstein denied the allegations.
With concerns swirling about the possibility of a PMO-driven political agenda at Sun News, the activist site Avaaz launched "Stop Fox News North," a campaign to pressure the CRTC to deny a licence to the news network. The network responded by citing Avaaz's U.S. roots and noting that left-wing billionaire George Soros has contributed to the group, in an apparent effort to discredit the petition as a "U.S. import."
Future Sun News personality Ezra Levant went further than most in his criticism of Avaaz and its links to George Soros (pictured above). Levant suggested in a column that Soros, who is Jewish, aided the Germans in the Holocaust as a teenager. After receiving a letter from Soros' lawyers threatening to sue, the Sun newspapers ran a retraction.
Sun News was on the air for only about six weeks when its first major controversy erupted. The CRTC received a record 6,676 complaints from viewers after host Krista Erickson aggressively challenged dancer Margie Gillis over the issue of whether artists should receive taxpayers' money in the form of grants. The Canadian Broadcasting Standards Council eventually ruled Erickson was within her rights to express her opinions during the interview.
Sun News has made the CBC's public funding a signature issue, repeatedly attacking the network for taking $1 billion per year in taxpayers' money while competing against private-sector broadcasters. But the CBC is fighting back. It put out a press release noting that Quebecor, Sun's parent company, enjoyed $500 million in subsidies over five years, and argued that -- unlike the CBC -- it is not publicly accountable to taxpayers.
Ezra Levant got himself in trouble again in December, 2011, when he responded to Chiquita Bananas' declaration it wanted to avoid oil from the oil sands. "Chinga tu madre," Levant said to Chiquita -- a phrase that translates as "f--k your mother." The Canadian Broadcasting Standards Council declared Levant's outburst a violation of ethics standards.
Canadian journalism reached an embarrassing nadir in the spring of 2012 when it emerged that a citizenship reaffirmation ceremony broadcast on Sun News had been partially staged. Six federal bureaucrats had posed as newly-sworn Canadians during the event that had been reportedly requested by Immigration Minister Jason Kenney. Kenney's office apologized to Sun News. Government officials later alleged Sun News was aware of the bureaucrats posing as new Canadians.
Sun News applied for a "mandatory carriage" licence in the fall of 2012 that would require cable and satellite operators to carry the network as part of their basic cable package. Though neither CBC News Network nor CTV News Channel currently enjoy mandatory carriage, they did when they first started out, as Sun News has pointed out.
Sun News reported in January, 2013, that it lost $17 million in 2012, due to weak revenue because the channel is only carried in 40 per cent of Canadian homes. Parent company Quebecor is saying the network will continue to lose money unless its request to the CRTC for mandatory carriage on basic cable is granted. Pictured: Quebecor CEO Pierre-Karl Peladeau
Sun News personality and well-known right-wing pundit Ezra Levant issued a formal, on-air apology after a September, 2012, segment in which he declared that the Roma were not a race, and were rather "a shiftless group of hobos" who "rob people blind" and whose "chief economy is theft and begging." The Toronto police reportedly even launched a hate-crimes investigation into the segment, at the request of a local Roma group.
In August 2013, the CRTC, Canada's telecom regulator, rejected Sun News' application for mandatory carriage. The network had asked the CRTC to make them a mandatory part of all basic cable services, arguing it would not survive financially without it. Though the CRTC rejected the Sun News application, it also launched a review of the rules surrounding cable news networks. Among the possible outcomes are a realignment of channels so all news channels are grouped together on the dial, and the possibility of a "must-carry" order for Sun News, which would mean that all TV service providers would have to at least offer the network. Pictured: CRTC Chair Jean-Pierre Blais
But Sun News executive Kory Teneycke says a must-offer licence isn't good enough.
"Let us be very clear: 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.
"Let me repeat: a 'must-offer' licence would be a death sentence."
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.
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."
Some of the country's largest cable and satellite TV providers — such as Shaw Communications (TSX:SJR.B), Rogers Communications (TSX:RCI.B) and regional telecom MTS Allstream (TSX:MBT) — have urged the CRTC to reject mandatory-carriage applications from Sun News and other networks.
The providers say costs would increase if the CRTC forces them to add channels to their basic cable and satellite packages.
CRTC chair Jean-Pierre Blais has said the bar for being granted mandatory carriage is set "very high." However, he also indicated the commission is approaching the hearings with an open mind.