The case for Sun News

The recent application of the Sun News Network television channel for a so-called CRTC “mandatory-carriage” licence — which would require cable and satellite services to carry Sun News, and charge subscribers for the service — has raised the ire of certain market purists, including Andrew Coyne (“There Are No Words For Sun TV’s Gall,” Jan. 24.) The suggestion seems to be that a news organization that endorses a free-market editorial stance is somehow being hypocritical by asking for the same regulatory treatment as its Canadian competitors.

Many people, including me, would like to see a free market for television content, whereby consumers can have the freedom to choose what channels they will pay for, and at what rate.

We’ve backed up our words with action. Over 10 years ago, our cable company, Videotron, introduced a package that allows customers to choose their channels à la carte, and pay for only those they want to watch (along with channels deemed mandatory by the CRTC).

You will find this only in Quebec. Our main competitor, Bell, is not offering this option to Canadians in other provinces.

The Canadian television market is complicated, and its regulations reflect the many competing policy goals and issues that the CRTC has tried to address over the past 40 years.

While a free market approach is a noble vision, and one to build toward, it bears little resemblance to the television market as it operates today.

Television distribution continues to be a highly regulated environment. The type of licence granted to a channel by the CRTC has an enormous impact on the availability of that channel to viewers, and what the associated revenues will be. Change is constrained, in part, by a Broadcasting Act that pre-dates the Internet.

Central to the Broadcasting Act and the CRTC is the goal of promoting Canadian content. This is manifested in a range of requirements, as well as preferential treatment accorded to some channels over others on the basis of the volume and type of content they deliver.

Andrew Coyne and others may not agree that Canadian content or Canadian news should be treated differently than foreign content. But that does not change the law as it exists today, or the thousands of CRTC decisions that, historically, have served to foster the production and distribution of Canadian content.

In the case of cable news channels: When CBC Newsworld was launched, it received mandatory carriage — a privilege it still maintains in Quebec. CTV News Channel received similar benefits at its launch. Other news channels, such as BNN and CP24, still have “Category A” licences, meaning that cable and satellite providers must offer them to their customers.

CRTC officials granted these preferential licences because they strongly believed Canadians should have access to Canadian news content. However, this approach was not taken with Sun News.

Sun News was given a highly inferior Category B digital specialty licence, meaning there was no obligation for the channel to be distributed, and no required distribution fee. Moreover, because this is a “digital” licence, the roughly 25% of Canadians who have traditional analog cable cannot make a “market decision” to watch Sun News.

After months of negotiations with cable and satellite providers, Sun News was able to gain access to only four out of every 10 Canadian households. Ma- jor providers such as Telus and MTS were not distributing the channel at all — despite offering countless foreign news channels.

Was Sun News asking too high a price? No. The average monthly subscription price for a Canadian News Channel is 33 cents per subscriber (CBC News Network gets 63 cents). Sun News is currently getting as few as 6¢.

Did consumers make a choice not to watch Sun News? No. Almost 60% of the market has never even had access to the channel.

Millions of Canadians have a contract with their cable or satellite provider that is combined with Internet and cellular services. To say that customers of Telus or MTS, for instance, should be expected to switch providers in order to gain access to Sun News, is not realistic. Nor is it realistic to say to the 25% of Canadians with analog cable — a significant portion of the Canadian population — that they must buy a digital box if they want Sun News.

We are not looking for special favours. We don’t want to be treated better than others; but we don’t want to be treated worse either, which is what we are enduring today.

And it is for that reason that we have asked that Sun News — and any other new entrant to the Canadian all-news market — be granted the same privilege of mandatory carriage that CBC, CTV and every other Canadian news channel received when they launched. Once such networks have been exposed to the Canadian public — we suggest a term of five years — they should then transfer to the same type of licence that CBC News Network and CTV News Channel recently moved to.

To take another approach would tilt the market heavily toward incumbent channels. It would be fatal not just to Sun News, but to any future all-news start-ups, and to all new channels dedicated to Canadian content.