Dear Mr. Morin:
Friends of Canadian Broadcasting is a watchdog for listeners and viewers
supported by 100,000 Canadians. Friends does not seek to appear at the public
hearing beginning on November 19.
Friends opposes the applicant's request for mandatory access in the
initial three years and offers several observations and suggestions for the
At the outset, we wish to underline the unfairness of the current
process. The Commission has recently turned down the application of TVA Group
Inc. for a Category 1 licence, and shortly thereafter determined that it would
not consider any 9(1)(h) applications until June, 2012. To subsequently 'fast
track' a Sun TV News Category 2 application is unfair to other applicants that
have followed the Commission's rules. We also note that it would appear the
November 19 hearing has been established for the singular purpose of hearing
the Sun TV News application - an unusual procedure.
Sun TV News should be entitled to a Category 2 licence only if it
follows the Commission's established procedures. Jumping a queue and demanding
mandatory access for any part of its licence period is highly unfair to other
applicants who have played by the rules. If the applicant wishes the privileges
of a Category 1 licence, it should apply at a time that the Commission has a
public call for Category 1 submissions so that all applicants can be considered
on their own merits in a fair and equitable manner.
This irregular process calls into question the Commission's commitment
to the principle of due process - a bedrock of its past behaviour.
TVA Group Inc. states in its application that its Toronto-based channel
Sun TV has lost in excess of $50 million since being acquired from CHUM as part
the latter's acquisition of Craig Media. It appears to Friends that the
applicant is seeking to 'blackmail' the Commission into scheduling this special
hearing under the implied threat that it will surrender Sun TV's licence unless
the present application is granted promptly, whereupon it will then surrender the
licence and convert Sun TV's Toronto station into a specialty channel known as
Sun TV News.
Before acquiring Toronto One, TVA Group Inc. and its parent Québecor
knew, or should have known, that Toronto One was a very weak participant in the
Greater Toronto market. They took a business risk and subsequently lost a
substantial amount of money. The disappearance of Sun TV from Toronto's
"overcrowded"1 market will
hardly be noticed, and should not influence the Commission's determination
regarding the current application.2 Either outcome would equally reduce the quantity of local programming in
The applicant's request for mandatory access for the first three years
of its proposed licence is both presumptuous and unprecedented - and should not
be approved by the Commission. As all applicants know, Category 2 licensees receive
no regulatory guarantees and must negotiate both carriage and compensation with
We note that a Category 2 licence generally carries a much lower
required level of Canadian content and Canadian programming expenditures than
Category 1 licences. The applicant seeks lower Canadian content obligations combined
with mandatory access - in other words, the benefits of mandatory access,
without the obligations.
As outlined in the following chart, the applicant is proposing to spend
only 31% of revenues on Canadian programming over the duration of its proposed
licence - a level consistent with many other Category 2 services, while the
other Canadian news services with 'mandatory access' are spending approximately
twice that level on Canadian Programming:
For mandatory access even to be considered, the applicant should be required
to spend a proportion of revenue on Canadian programming equivalent to the CBC
News Network, CTV News Channel and CP 24.
Where will the applicant acquire non-Canadian programming? In its
response to deficiency questions, the TVA Group Inc. states that it does "not
wish to enter into a business arrangement with another party". Friends recommends
that this 'intention' be applied as a condition of licence.
We also note that the applicant states that it "may subscribe to foreign
wire services to obtain American and international news footage (such as CNN,
AP, Fox News etc.)" and describes these as "news footage we would repackage for
our own news broadcasts". The applicant states that this programming would not
be "programming acquisitions" and that they "have not reached a commercial
relationship with any foreign wire service at this time". Friends recommends
that the Commission defer consideration of the application until such time as
these business plan issues are finalized and presented for consideration.
We also recommend that the 'zero' programming costs for foreign content
projected in the applicant's "7 Year Financial Projections" (dated April 26, 2010)
be converted into a condition of licence.
We note implicit contradictions in statements and research submitted by
the applicant. For example: "English Canadians are news watchers" vs. "there is room in Canada for a new
television news source. " Or "the CNN style of reporting is not particularly
appreciated in Canada", yet "CNN is the most watched news channel in Canada".
We also express scepticism regarding the applicant's assertion that the
English-speaking market is under-served by two national and one regional
all-news services, and note that the United States market, with eleven times
the population of English-speaking Canada, offers only four national all-news
many of these US services are also available in Canada, Canadians have more
choice in all-news channels than Americans.
We note that the applicant has confirmed that "Sun TV News will
subscribe to the Canadian Broadcast Standards Council's Journalistic
Independence Code" as a condition of licence. We recommend that the Commission also
require the applicant to adhere to the Canadian Association of Broadcasters'
Code of Ethics,4 also
administered by the CBSC. In particular, the following clauses are relevant:
Clause 5 - News
It shall be the responsibility of broadcasters to ensure that news shall
be represented with accuracy and without bias. Broadcasters shall satisfy
themselves that the arrangements made for obtaining news ensure this result.
They shall also ensure that news broadcasts are not editorial.
News shall not be selected for the purpose of furthering or hindering
either side of any controversial public issue, nor shall it be formulated on
the basis of the beliefs, opinions or desires of management, the editor or
others engaged in its preparation or delivery. The fundamental purpose of news
dissemination in a democracy is to enable people to know what is happening, and
to understand events so that they may form their own conclusions.
Nothing in the foregoing shall be understood as preventing broadcasters
from analyzing and elucidating news so long as such analysis or comment is
clearly labeled as such and kept distinct from regular news presentations.
Broadcasters are also entitled to provide editorial opinion, which shall be
clearly labeled as such and kept entirely distinct from regular broadcasts of
news or analysis.
Broadcasters shall refer to the Code of Ethics of the Radio and
Television News Directors of Canada ("RTNDA") for more detailed
provisions regarding broadcast journalism in general and to the CAB Violence
Code for guidance with respect to the depiction of violence, graphic reporting
of delicate subject matter or the use of explicit language in news and public
affairs programming on television.
Clause 6 - Full, Fair and Proper Presentation
It is recognized that the full, fair and proper presentation of news,
opinion, comment and editorial is the prime and fundamental responsibility of
each broadcaster. This principle shall apply to all radio and television
programming, whether it relates to news, public affairs, magazine, talk,
call-in, interview or other broadcasting formats in which news, opinion,
comment or editorial may be expressed by broadcaster employees, their invited
guests or callers.
Clause 7 - Controversial Public Issues
in a democracy the necessity of presenting all sides of a public issue, it
shall be the responsibility of broadcasters to treat fairly all subjects of a
controversial nature. Time shall be allotted with due regard to all the other
elements of balanced program schedules, and the degree of public interest in
the questions presented. Recognizing that healthy controversy is essential to
the maintenance of democratic institutions, broadcasters will endeavour to
encourage the presentation of news and opinion on any controversy which
contains an element of the public interest.
The applicant's assumptions on the number of English-speaking digital
households are far from accurate.5 They assert that there will be 8,891,139 digital households in English Canada
in 2011. Your Commission's data for the 2009 broadcasting year indicate that
there were 7.62 million digital households as at August 31, 2009, but the
distribution between English and French-speaking DTH subscribing households was
not available. The following chart extrapolates the
Commission's DTH data by assuming that 18% of the total DTH universe is
comprised of Francophone homes:6
The 82% of DTH allocated to English is an estimate which, if too high,
would further exaggerate the gap between TVA Group Inc.'s digital subscriber
data and reality. Assuming that the 22.1% rate of growth of digital penetration
between 2007 and 2009 as shown in the Commission's data can be projected
forward to the rate of growth between 2009 and 2011, then there would be
approximately 9.3 million digital households in 2011, of which approximately
7.6 million would be English-speaking digital subscribers. This suggests that the
applicant's base-line subscriber data are off by 1.25 million - more than 16%.
Another nuance of the 'quasi-Category 1' Sun TV News application is with
respect to subscriber rate and the Commission's dispute resolution process. The
applicant notes that it is not asking the Commission to approve its proposed
wholesale fee of 25 cents per month. However, we wonder if the Commission were
to approve mandatory access based on a 25 cent per subscriber business plan,
whether the applicant would then be in a position to come back to the
Commission to ask for the imposition of a rate dispute resolution if
non-Québecor distributors did not agree to this rate.
We therefore consider the gap between 'mandatory carriage' and 'mandatory
access' to be somewhat a moot point, leading to a situation some years hence
where - in a 100% digital environment - the applicant's signal is bundled with
other services whereby most subscribers will effectively pay the 25 cent fee
whether they know it or not. This outcome would generate in excess of $17
million per annum for the applicant before it sold its first advertising avail.
Friends recommends that the request for the initial three-years'
mandatory access be rejected by the Commission. We attach evidence that this
intervention has been faxed to the applicant.
Friends of Canadian Broadcasting
TVA Group Inc. (fax #:
1 The applicant uses
this term in paragraph 7.2.1 and further states in paragraph 7.2.3 that "the
Toronto conventional TV station advertising market is incapable of supporting
the current number of conventional stations. The transformation of Sun TV will
liberate advertising dollars for the remaining conventional stations."
2 The applicant
states: "We therefore request that the Commission process this application on
an urgent basis in the public interest and for the benefit of the television
professionals that are currently involved in the former Toronto One, now the
Sun TV venture". (Paragraph 1.4)
3 CNN, CNN
Headline News, Fox News and MSNBC.
5 Sun TV News 7 years Financial Projections, April 26th,
2010, page 5.
6 2010 Communications Monitoring Report,
pages Table 4.4.3 page 91.