Mr. John Traversy
Secretary General
CRTC
Ottawa, ON
K1A 0N2

Dear Mr. Traversy:

1. FRIENDS of Canadian Broadcasting is an independent media watchdog supported by 180,000 Canadian households. ¹ FRIENDS does not seek to appear at the forthcoming public hearing.
2. As noted in our CRTC 2009-732 intervention, FRIENDS supports mandatory carriage for services that the Commission determines to be in the public interest. We also support the Commission's policy that Broadcasting Act Section 9(1)(h) mandated services should be licensed only "in exceptional circumstances where the channels fulfill important policy objectives under the Act".
3. This policy is well-suited to guide the Commission's determinations regarding the continuation of existing mandated services, and also the current new applications.
4. In our March 1, 2010 submission, FRIENDS proposed that "the Commission should exercise enhanced selectivity when asked to license new 9(1)(h) services, and that the Commission should also be prepared to review existing 9(1)(h) services periodically to determine whether the criteria which originally led to their licensing still apply."
5. Every additional 9(1)(h) service adds to the cost of every subscriber's basic monthly invoice. The cable monopolies and satellite distributors have routinely doubled the wholesale fees of 9(1)(h) services. 9(1)(h) services should be carried without mark-up because of their 'exceptional' status under the Act, and the Commission should require this change to BDU pricing practices.
6. FRIENDS wishes to offer specific comments on two applications, Starlight and Sun TV News:
7. Starlight: The Canadian Movie Channel meets all the criteria for 9(1)(h) designation. It undertakes to provide 100% Canadian content in the form of feature films intended for theatrical release, documentaries, made for television movies and programs about Canadian filmmakers, expend 70% of its gross revenues on Canadian programming, and finance at least eight new feature films annually. This content falls within the definition of Programs of National Interest (PNI), but fewer and fewer Canadian movies actually appear on television. FRIENDS supports Starlight's request for 9(1)(h) status during its initial licence period.
8. In her February 7^th intervention, Kealy Wilkinson has quoted from a speech by the Commission's founding Chair, Pierre Juneau to the Canadian Club of Toronto in 1972: "to obliterate real works of the Canadian imagination is to obliterate ourselves". Licensing Starlight will be a fitting memorial to the late Pierre Juneau and address a profound failure in our audio-visual system.
9. TVA Group Inc. and Sun Media Corporation's application for mandatory carriage of Sun TV News for five years should be rejected. Given the number of news choices, the Commission no longer provides genre protection for news (Category 1). This means that the Commission has determined that there is no lack of diversity of voices with respect to news. There was much less diversity of news sources in the 20^th century, 1987 and 1997 when CBC Newsworld and CTV NewsNet were launched.
10. We also note that Sun TV News is currently available in 5.1 million Canadian homes - a number much larger than that achieved by most Canadian specialty services. From this extensive distribution it generates an average minute audience of 16,500, which means that Sun TV News gathers an average audience of less than one in every three hundred viewers, a rather modest demonstration of audience up-take.
11. Quebecor Inc. financial data for the nine months ending September 30, 2012 show total revenues of $3.2 billion, EBIT of $365M and net income of $258M. ²
12. On September 3, 2010, Kory Teneycke, then and now Vice-President of Sun News, wrote a piece in various Sun Media publications entitled: "Margaret Atwood's U.S. sellout: Icon's ignorant attack confirms just why Canada needs Sun TV News": ³
13. "The final lie most of the media stories, petitions and general ankle-biting from our competitors promote is about money. Sun TV News is not, nor has it ever, asked for "mandatory carriage" by cable or satellite companies.
14. "As the critics correctly point out, this would be tantamount to a tax on everyone with cable or satellite service. It is what CBC News Network has, but not what we are asking for.
15. "We are simply asking for the channel to be "offered" by the distributors. This is meant to allow any Canadian who wants to get the channel to be able to call their cable or satellite company and subscribe to it. It does not mean it is a part of the basic cable or satellite package, nor does it dictate what (if any) package it would be a part of. We believe those should be private negotiations between Sun TV News and each individual cable and satellite provider.
16. "If the so-called journalists and commentators writing on this issue had read our application they would have seen we project 17% market penetration in year one, growing to 45% in year five. If we were assuming mandatory carriage, instead of mandatory access it would start (and stay) at 100%.
17. The Commission should take Mr. Teneycke at his word.

Yours sincerely,

Ian Morrison
Spokesperson

cc:
cbuck@mccarthy.ca
reglementaires@quebecor.com

For information: Jim Thompson 613-567-9592

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¹ FRIENDS estimates that approximately 360,000 Canadian adults support our work to defend and enhance the quality and quantity of Canadian programming on radio, television and new media, ie. about 1.5% of Canada's adult population.

² SEDAR

³ http://cnews.canoe.ca/CNEWS/Features/2010/09/02/15235736.html