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Pierre Karl Peladeau, president and CEO of Quebecor Inc., announces his companies' investment in the creation of a new English specialty channel called 'Sun News. (MIKE CASSESE/MIKE CASSESE/REUTERS)
Pierre Karl Peladeau, president and CEO of Quebecor Inc., announces his companies' investment in the creation of a new English specialty channel called 'Sun News. (MIKE CASSESE/MIKE CASSESE/REUTERS)

Quebecor, BCE settle spat over news channel Add to ...

For months, a corporate dispute has cast a cloud over Sun News’s reach to Canadian TV subscribers. But after a public spat and opposing complaints to the federal broadcast regulator, Quebecor Inc. and BCE Inc. have finally struck a deal.

Sun News will be offered as part of Bell’s basic satellite and IPTV packages starting in mid-December, beaming the channel to all of Bell’s television subscribers outside of Quebec. (Bell expects to have the service in Quebec as well, but has not yet announced details.) Bell has also agreed to distribute three other channels owned by Quebecor subsidiary TVA Group Inc.: new French-language sports offering TVA Sports, Yoopa and Mlle. In a separate release Tuesday, Quebecor’s cable service Vidéotron announced it will carry Bell Media’s French-language sports channel, RDS2.

The deal comes after a heated dispute in which Quebecor complained to the Canadian Radio-television and Telecommunications Commission, accusing BCE of giving an unfair advantage to the news services it owns – including cable network CTV News Channel – by refusing to make a deal to carry Sun News on Bell satellite TV and Bell Fibe. Bell fired its own shot against Quebecor, complaining to the CRTC that the company had broken the rules when it converted the money-losing over-the-air network Sun TV to broadcast Sun News for free. (Quebecor told the CRTC in August that it would give back the Sun TV licence, which it officially did last Friday.)

Quebecor is now dropping its complaint to the CRTC, spokesman Serge Sasseville said in an e-mail. Executives from both companies would not comment on whether this was a condition of the deal being reached.

“This has proved that the best way forward for the consumer is to allow commercial discussions to take place,” said Wade Oosterman, president of Bell Mobility and residential services.

All cable, satellite and IPTV (Internet protocol television) providers pay a per-subscriber fee to the companies that own the “specialty” cable channels they offer in their TV packages. There has been concern that cable and satellite companies that also own TV channels – or “vertically integrated” companies – would use their market power to put competitors’ channels at a disadvantage in the market. In a decision on vertical integration this fall, the CRTC published a code reaffirming its stance against such practices.

Quebecor’s complaint had centred on that concept of “undue preference.” In a letter to the CRTC in June, the company said Bell refused to carry Sun News even though the fee it was asking was low, and that this was proof Bell was hampering a competing channel’s subscriber reach. Quebecor wrote that it had proposed a lower fee than what BCE’s subsidiary Bell Media charges other cable and satellite companies to carry CTV News – 14.5 cents per subscriber (such carriage deals often differ from company to company in terms of price and other agreements).

However, Bell argued that its objection was not necessarily the price of the channel; Quebecor’s other terms were “excessive,” Bell wrote in a letter in May. For example, Quebecor demanded the channel be offered in a package that would guarantee its distribution to a wider pool of Bell subscribers.

The Canadian Cablesystems Alliance, which represents small independent cable companies, backed up this claim in a letter to the CRTC in June. “Sun News has demanded a very high minimum subscriber penetration as a condition of carrying the service and, to date, has rigidly maintained that demand,” the organization wrote.

Requirements like this raise costs for subscribers and do not allow flexible packaging, forcing viewers to pay for channels they do not watch, the CCSA wrote.

With Tuesday’s deal, Quebecor has now achieved that reach across Bell’s subscriber base.

“We are very pleased that Bell TV subscribers across the country will once again be able to enjoy Canada’s new home for Hard News and Straight Talk … it’s a prime time lineup that we’re confident will be a welcome addition to many living rooms,” Luc Lavoie, the head of development for Sun News, said in a statement.

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