After the previous application for a Category 1 specialty channel was outright rejected by the CRTC, Quebecor has decided to put forward an application for a Category 2 channel, just like almost every new specialty channel in the past few years.
Both categories are digital channels, meaning they won't be on analog cable and aren't part of the basic package. The difference is that Category 1 channels must have a minimum of 50% Canadian content, and in return all digital cable and satellite providers must make the channel available on a discretionary basis. For Category 2 channels, the dealings with television providers are mostly unregulated. They negotiate carriage fees with each other, and the providers can choose whether or not to make the channel available.
But while the Sun TV News application is technically a Category 2 channel, Quebecor is asking for an exception that grants it the biggest advantage of Category 1: mandatory availability, at least for the first three years.
In both the previous and current applications, media coverage and left-wing reaction has confused the nature of what Quebecor is asking for. That's partially understandable. CRTC's regulations can be overly complicated sometimes, particularly when it comes to what channels providers have to carry.
This Canadian Press article, for example, states three times that the new channel would be "funded with money from cable TV fees", even though that's not what the application is requesting. The statements are attributed to activists, but aren't challenged in the article, leaving readers to assume they are true. This report uses the term "must-carry", which has a special meaning at the CRTC that doesn't apply in this case. Quebecor isn't asking for must-carry status. This Globe and Mail story also uses the term "must carry", as does this National Post report.
"Must carry" vs. "must offer"
In an effort to reduce the confusion, let me explain a bit how this works.
There is a list of channels that all cable and satellite providers must provide as part of their basic packages. In addition to the local television channels, this also includes things like CPAC and APTN. Other channels like CBC News Network and the Weather Network are also included in basic packages. Fees, set by the CRTC, are charged to all subscribers to pay for these channels.
Beyond that, there are levels of discretionary tiers that have different statuses at the CRTC. Some are allowed on analog cable on a discretionary basis or can be part of the basic package. Some, like Category 1 channels, are offered only on a digital basis unless an exception is warranted.
Category 2 channels are the least regulated type, and the one preferred by both the CRTC and new channel applicants because of how easy it is and how low the minimum requirements are.
Though it might seem like your cable or satellite company has every channel in existence, it doesn't. Bell TV, for example, doesn't carry MuchMoreRetro. Videotron doesn't carry Fox News Channel (somewhat ironically, if you think Quebecor is an evil right-wing empire). Shaw Direct doesn't carry Court TV (now Investigation Discovery) or TFO. There is no regulation requiring these companies to make these channels available. They decide what their users might be interested in, based on what the channels offer and what they want to charge the TV provider. The channels, meanwhile, ask people to "call your cable or satellite provider" to pressure them into adding the channel to their lineup.
What Quebecor wants with Sun TV News is to bypass this process, and require that all digital TV providers have the channel in their lineups. The wholesale price would still be negotiated between the provider and the network, and the provider could package the channel and charge for it however it feels.
Kory Teneycke, the former Harper aide who is behind this application, calls it "must offer" to distinguish it from "must carry". I'll use that expression for lack of a better one.
In short, Quebecor is asking that this channel be available on all digital cable and satellite providers, but the choice to take it would be entirely up to the consumer. Nobody would be forced to pay for the channel if they didn't want it.
The package exception
One scenario that might see people paying for Sun TV News without wanting to would be if they got it as part of a package. It would make sense for a news channel theme pack to include Sun TV News with CTV News Channel, CNN, MSNBC, Fox News Channel, BNN, CNBC, Al Jazeera English and BBC World News. Someone might select that wanting all the news channels but having moral objections to Sun TV (and, presumably, Fox News).
But this packaging is entirely up to the TV provider. It's not regulated by the CRTC and isn't negotiated with the channels.
The CRTC only regulates packaging to ensure that porn channels and single-view religious channels aren't forced on consumers as part of packages. Theoretically, the CRTC could require the same thing for Sun TV News that it requires for Playboy TV, but that seems a bit excessive.
Of course, if cable and satellite providers did away with such packages, or offered people à la carte options, this wouldn't be an issue. But so far, only one major TV provider offers that kind of à la carte service: Quebecor-owned Videotron.
Ignorance breeds fear
What gets me most about the reaction to this application is how much people are willing to oppose it without knowing what it is. There has been no proposed program grid, not even any confirmed hosts. All we know about Sun TV News is that it wants to be a mix of news and opinion, that its creators consider the other news channels "boring", and that those creators are Conservatives who want to create a channel based partially on Fox News.
A group of activists has already started a petition that has 68,000 signatures on it (we're not sure how many of those are real people). It repeats the non-truth about forcing people to pay for the channel, and throws in some drama that makes it seem as if Stephen Harper is trying to force his ideological agenda into our brains through the CRTC.
Sun Media had a field day with this, saying that the petition is based out of New York and that author Margaret Atwood and her cronies are trying to suppress free speech. Even Teneycke himself weighed in.
Fox News Cheap
It's hard to judge something like this until you've seen it. Sun TV News could become a quality all-news network that bring much-needed competition to the industry. It could become a Fox News North, as critics have called it, providing news coverage to make people think it's objective, but loading primetime hours with fearmongering blowhards who care more about expressing their opinions than seeking the truth.
The arguments from Quebecor that this isn't Fox News North are contradicted by statements in the CRTC appliction, particularly this one:
The most comparable channel to STN is located in the USA, Fox News. Both channels’ strategy is to focus hard news and commentary that raise public debates and reactions on different topics. Fox News has been USA’s most watched All News channel for years and still is. In 2008-2009, Fox News’s audience was as high as CNN’s and MSNBC’s combined. Fox News does not have extensive distribution in Canada. Therefore, this represents a true opportunity for STN.
But while their goal is to replicate Fox News, I think the more likely scenario is that Sun TV News will be an experiment in cheap newsgathering that will quickly become a laughing stock because of its horribly small budget. According to the CRTC application, the channel plans to have a budget of about $25 million, of which $15 million would go to programming and technical costs. Though it's hard to directly compare this to CBC and CTV, since they take advantage of their local stations and national newscasts (I'm trying hard not to use the word "synergies" here), it's still very little money. We're looking at a staff of maybe 100 people, including journalists, anchors, producers and technicians, advertising salespeople, marketers, etc. Anyone who thinks he can run a national news network on that kind of budget is probably kidding himself.
The feared scenario, that they'll spend little money on news budget and focus all their efforts on opinion, makes more sense considering how little they have to spend. But even then, the big-name blowhards come at a high price, and a $25 million total budget isn't enough to get a Canadian Glenn Beck on the air if you want anything more than a webcam and laptop in front of him.
How Sun TV News describes itself
Though it's obviously self-serving, we really can't judge Sun TV News based on anything other than the statements of the people behind it.
Here, verbatim from the CRTC application, is how Sun TV News describes its "hard news" and "straight talk":
“Hard News” will almost exclusively rely on live reporting and real-time conversations with journalists covering breaking news – as opposed to the more traditional news wheel format that features a revolving set of news stories. But these headlines will be analysed, commented upon and discussed at length. The host will question the reporter and will have an intelligent exchange that will often open to further debate.
News will not be read like in a news bulletin. Daytime “hard news” will be covering a broad range of political, economic and lifestyle stories that matter to Canadians both rural and urban. So even its “hard news” portion will not be “all news” like it has traditionally been done in Canada. Short traditional news bulletin may be programmed but not more than once an hour.
“Straight Talk” will be programs featuring hosts and guests that deliver strong opinions and analysis of stories that are important to Canadians that day. “Straight talk” opinion journalism at night will be clear, intelligent and engaging – featuring a broader array of television personalities and signature hosts who will challenge viewers to think – and decide – for themselves. The challenging of ideas in itself may feed the news but at least will attempt to have Canadians make their own mind on the events occurring every day in Canada.
That could easily describe either Fox News Channel or MSNBC. Or a bunch of other networks. But it gives a bit of an idea what they're going for.
What the CRTC should do
The CRTC doesn't have the luxury of watching this network and judging whether it's good for Canadian TV watchers. It has to go on the application itself.
Based on that application, I would argue the CRTC should accept the network, maybe even with the exception they're requesting (particularly since it's only temporary).
The reason is simple: The channel proposes to create all its content. It says it will have zero foreign content. That alone should put it on a level higher than those Category 2 channels that air little but Family Guy reruns, 80s music videos, Star Trek movie marathons and ancient sitcoms.
The fact that Sun TV News wants to add to both news coverage and political debate in this country should certainly count for something as well, even though we may not agree with it.
The potential for abuse is there, but the CRTC already requires broadcasters to adhere to a code of ethics through the Canadian Broadcast Standards Council. Sun TV News has already accepted that it would be subject to those rules. The CRTC can't prohibit someone from starting up a channel because fearmongers disagree with the political leanings of its creator.
Sun TV News made sure to suggest in its application that without mandatory availability for at least the first three years on air, its business case would fall apart:
If mandatory access for a maximum period of three years is not granted to Sun TV News, one or more major cable or satellite providers might decide to not offer this service. This would be fatal to our business case as shown in Appendix 1, and would likely result in the cancellation of the Sun TV News project.
The CRTC shouldn't let itself get bullied. But it should set policy encouraging new channels to include as much original, Canadian content as possible. Sun TV News, which seems to put this figure at 100%, should be rewarded for that, just like any other channel should.
Sun TV News's suggestion that it get a break from closed-captioning requirements, though, should be ignored. Broadcasters routinely request exemptions from obligations to CC programming, like a high school student who wants an extension on a term paper.
Though it doesn't specifically request relief from CC requirements, it gives this quote: "However commendable this obligation is, the sums that need to be invested in such an amount of closed captioning means a lower amount is left for Canadian programs."
I'm pretty sure everyone else could make a similar argument.
By the numbers
Looking through Sun TV News's CRTC application, I found some interesting financial projections I thought would be worth sharing.
- Though the wholesale fee would be negotiated between the broadcaster and TV provider, Sun TV News uses a base fee of $0.25 per subscriber per month in its analysis, and seems to suggest that they would aim for this. (That doesn't mean the channel would cost $0.25 to consumers though - providers charge consumers far above the wholesale rate.)
- If the mandatory availability or "must offer" requirement is given, Sun TV News expects 17% penetration in the first year and up to 50% penetration by the end of the seven-year license at $0.25 per month. ("Penetration" defined as the number of cable/satellite subscribers who pay for the channel.)
- Based on this analysis, the channel would get $15 million a year in subscriber revenue, which would be combined with $10 million a year in advertising to reach the $25 million budget.
Quebecor survey shows Sun TV News wouldn't be popular
The CRTC application includes some survey data from polling they conducted. Though they do a good job of spinning it, the survey shows only 41% of Canadian TV watchers would be somewhat (36%) or very (5%) likely to subscribe to the channel. This makes its 50% penetration rate seem a bit far-fetched.
Similarly, a survey showed "Canadians do not find reporters to have an inherent bias in the news they report" (52% vs 7%), contradicting claims by Quebecor that Canadians are tired of the "lamestream" media's biases.
When asked about their satisfaction with current news choices, 67% in Quebecor's survey rate it six or higher on a scale of 1-10. Quebecor spins this as saying Canadians are "not extremely satisfied", but when almost half are rating seven or eight on a scale of 1-10, I would argue that's pretty satisfied. Postmedia's Andrew Mayeda agrees.
Finally, even though Teneycke and company are pushing this as a competitor to CBC and CTV news channels, the application softens the stance and even argues that those networks won't be seriously affected by the appearance of Sun TV News. Instead, it argues that it will bring Canadians back from CNN (which it simultaneously argues is winning Canadian viewers from CBC and CTV because it has more opinionative programming in primetime, and is losing American viewers to Fox News because its primetime programming isn't opinionative enough).
"In the long run, we believe the impact on the existing Canadian all-news services will be negligible," it says.
I'm sure that comes as a relief to them.