May 3, 2011 5 years 10 months ago

UPDATE #2: Bell satellite subs lose Sun News in carriage fee battle that's part of a bigger fight

TORONTO – Quebecor’s Sun News was removed from the Bell TV satellite line-up at 10 a.m. this morning (Tuesday, May 3) but it turns out that this is but one of multiple disagreements that the companies have with each other.

While the Sun News channel slot itself remains, the feed has been replaced with text telling customers that the channel “has been taken down at the request of the owners of Sun News."

According to Sun News head of development Luc Lavoie, Bell forced Quebecor’s hand and it had to demand signal removal. “They have carried the signal on their satellite without trying to even have an agreement with us,” he told this morning.

When Sun News launched last month, it transitioned the conventional Sun TV station to the Sun News content just as it launched the new specialty channel of the same name and content. That means that local terrestrial carriers like Rogers and Cogeco and even Bell’s Fibe TV in the Greater Toronto Area, for example, must carry it (and at no extra charge to their customers).

But for out of market carriers and satellite companies, Sun News is a discretionary digital service requiring an affiliate carriage agreement and a wholesale fee to be paid in order to be offered to subscribers.

According to a source, Bell wants to continue to treat the channel as an OTA and not a specialty and offer it for free. (Ed note: Sun News is a unique channel in that it is, for all intents and purposes, both, and the CRTC is likely to take a dim view of this turn of events.)

Bell sources say that the company knows that the channel is not a free OTA service for satellite, but that it was only told by Sun News that it was going to launch as a discretionary digital service for DTH and not just an OTA rebrand on April 17th, one day before it officially launched. (Ed note: It was an important nuance Sun News did not make clear within the industry before launch.)

“We said to them, this is a specialty channel and you need to have an agreement with us and we offered them one similar to the one that was signed with Shaw,” said Lavoie. “They came back to us and said that our offer was unreasonable, which is really not fair because if it’s reasonable for Shaw and it’s reasonable for Videotron (Quebecor’s cable division),” then it should be for Bell, he explained.

“We received an offer from TVA (Quebecor’s broadcasting arm) for distribution of Sun News on Bell Satellite TV which we didn’t think was appropriate,” Bell Canada’s SVP of regulatory and government affairs, Mirko Bibic, told, “so at TVA’s insistence, the signal has come down. They had written to us saying if there was no affiliation agreement by May 3, today, the signal would have to come down."

While Bibic would not identify what the proposed rate was, he noted that “the offer was not reasonable given the appropriate benchmarks we looked at for the nature of that service.”

Which were? “There were several elements to the offer, the primary one being the rate was not in line... but they had other conditions like minimum penetration requirements,” he explained, meaning one demand was to be placed on a very popular channel tier. “They wanted to be significantly penetrated and that request would have severely limited our packaging flexibility with respect to the service.”

“Bell is not acting in good faith", Lavoie added.  "We think that they are playing the game of undue advantage. They never wanted to negotiate in good faith, they wanted to go for free and what I can tell you is what we were asking for, for Sun News, was way below CTV Newsnet.”

CTV’s all-news specialty, now branded CTV News Channel, has a CRTC mandated rate of $0.145 per subscriber per month when it is carried on basic by carriers.

“Why is CP24 and CTV News Channel, both of which are owned by Bell, on the satellite and not us?” asked Lavoie.

Bibic says that complaint doesn’t make any sense, given the fact CTV’s channels have been on Bell Satellite for ages and Sun News is barely out of the gate.

“We’ve been carrying those signals for so many years and well before we owned 100% of Bell Media, so that allegation doesn’t fly,” he explained.

Besides, this issue is just one of many the two companies are attempting to hammer out. “There are several issues between the Quebecor Media companies and the BCE companies that we’re going to have to resolve,” he said.

For example, “there’s TVA’s refusal to provide Bell Fibe TV in Quebec with access to video-on-demand content which the Commission ordered them to provide to us... back in January, and we still don’t have access to those programs.”

“We’re also on track to have broader commercial discussions with Quebecor Media Group to see if we can resolve a number of issues.”

Is this bad blood between Bell and Quebecor? “Just regular negotiations,” said Bibic, who didn’t expand on the other issues (which likely includes this, too).

And of the numerous phone calls from Bell subscribers asking why they can no longer get Sun News? “We are sorry for the people who do not have access to Sun News... The only thing we can say is call Bell,” said Lavoie, who did not indicate what the company plans to do next.