Source: National Post

If the channel some have dubbed "Fox News North" is to fly in Canada, it will likely have to do so lower down on the dial and without a guaranteed source of income.

The federal broadcast regulator has decided not to force cable and satellite providers to carry the conservative all-news channel, which is set to be launched by Quebecor Inc.

In advance of the planned launch on Jan. 1, 2011, the company applied to the Canadian Radio-television and Telecommunications Commission for a rare must-carry licence.

Quebecor did so despite an official moratorium on those "Category 1" licences until October of next year, when the transition to digital television in Canada is set to be complete.

It argued in its application that the specialty service would be sufficiently different from its competing all news outlets to warrant an exception.

But the CRTC was having none of it. In a private letter it sent to Quebecor earlier this month, the CRTC rejected the application, pointing out that the proposed format of Sun TV News bears marked similarities to standard all-news services.

It offered Quebecor three options: The company could pursue a Category 2 licence. In that case, the channel would have to negotiate agreements with carriers, who would not be required to offer the service.

"Therefore, it would appear to be a relatively straight-forward process for your proposal to be amended to be an application for a licence to operate a competitive news service, which could be considered without delay," wrote

Peter Foster, the CRTC's director general of television policy and applications.

Quebecor could also retool its existing Sun TV station with information programming.

Finally, if it insists on applying for a Category 1 cable specialty licence, it must wait until October 2011. But waiting or downgrading its licence doesn't appeal to Quebecor.

Kory Teneycke, a former chief spokesman for Prime Minister Stephen Harper who is at the helm of the new channel, said the company is preparing an amended Category 1 application and will soon try again with the CRTC.

"We're optimistic that this will be resolved in a way that works for us and allows Canadians from coast to coast to have access to the channel," he said. "We're confident that we'll have a licence in place that meets our needs prior to our scheduled launch in the new year."

© National Post