TV providers to CRTC: reject bids for guaranteed spots on basic cable, satellite

OTTAWA – Some of the country’s largest cable and satellite TV providers urged the federal telecommunications regulator on Monday to reject a number of channels that are vying for guaranteed spots on the dial.

Shaw Communications (TSX:SJR.B), Rogers Communications (TSX:RCI.B) and regional telecom MTS Allstream (TSX:MBT) are among those who oppose what is known as mandatory carriage, which would force them to include the channels on their basic cable and satellite packages.

“(Mandatory carriage) status should be reserved for services that make an exceptional contribution and serve an audience with an extraordinary need,” said Shaw executive Barbara Williams.

“Movie, news and general-interest services clearly do not satisfy the commission’s criteria as they serve a mass audience. Mandatory distribution will only serve to distort competition within these genres. Like all services, they should compete for distribution and audience share based on their appeal to Canadians.”

The providers say costs would increase if the Canadian Radio-television and Telecommunications Commission 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.” The providers argued none of the applicants meets the CRTC’s threshold to qualify for mandatory carriage.

“What these applicants are asking the commission to do is to revive a regulatory framework for the carriage of specialty services that was abandoned years ago,” said Rogers executive Phil Lind.

“Their proposals are flawed. They are indifferent to consumer demands and industry trends. They do not satisfy the stringent test for granting (mandatory carriage) orders and should be denied.”

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.

Perhaps the most high-profile applicant is Sun News, the Quebecor-owned network that’s arguing for a guaranteed spot because it produces 96 hours a week of uniquely Canadian, conservative-minded content.

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.

The channels will have an opportunity to respond at the CRTC hearings later this week.