Sun News to CRTC: No guaranteed spot on the dial, no more network

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.

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.