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Ottawa, 22 July 2014

File No. 2014-0260-2

By email

Peggy Tabet
Senior Director, Regulatory Affairs
Broadcasting
Quebecor Media Inc., on behalf of Sun News Network
tabet.peggy@quebecor.ca

Pamela Dinsmore
Vice President, Regulatory
Rogers Communications Inc.
pam.dinsmore@rci.rogers.com

Re : Application by Quebecor Media Inc., on behalf of Sun News Network, for Final Offer Arbitration with Rogers Communications Partnership

Pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations and Broadcasting and Telecom Information Bulletin CRTC 2013-637 (Information Bulletin 2013-637), this letter is to advise the parties that the request by Quebecor Media Inc. (QMI), on behalf of Sun News Network (SNN), for final offer arbitration with Rogers Communications Partnership (Rogers) has been accepted by the Commission.

This letter sets out the dates upon which the final offer process is to be conducted, the matters upon which the Commission will make a determination as well as the procedure to be followed.

The Application

In its application dated 26 March 2014, QMI, on behalf of SNN, requested Commission-supervised final offer arbitration, in order to determine the wholesale rates for the distribution of SNN by Rogers.  QMI submitted that Rogers’ offer with respect to SNN’s distribution does not comply with Broadcasting Order 2013-735, Distribution of Category C national news specialty services (the Order), or with Broadcasting Regulatory Policy CRTC 2013-734, Distribution of Canadian Category C national news specialty services.

QMI submitted that the dispute meets all the criteria for resolution by final offer arbitration, namely:

Therefore, according to QMI, it would be appropriate to resolve the present dispute expeditiously by way of final offer arbitration.

In its 31 March 2014 response, Rogers replied that it does not support SNN’s application for final offer arbitration. Rogers argued that QMI does not have the right to seek final offer arbitration as SNN is being offered under the terms of an existing affiliation agreement that complies with the Order.  Rogers further submitted that the Commission should address the threshold question of whether QMI’s request for dispute resolution should be accepted, before it considers the merits of QMI’s application for final offer arbitration.

On 10 April 2014, Commission staff requested that the parties participate in staff-assisted mediation, with a view to arriving at a mutually acceptable solution.

On 14 April 2014, Commission staff suspended the final offer arbitration process, in light of continuing negotiations between the parties. The Commission understands that these negotiations have stalled and that parties are now at an impasse.

On 10 July 2014, Rogers informed Commission staff that it was withdrawing its request for the Commission to decide on the threshold question before considering the merits of QMI’s application.

Determinations

Upon review of the record, the Commission considers that final offer arbitration is the appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves only two parties, and otherwise meets the criteria for dispute resolution set out in paragraph 4 of Information Bulletin 2013-637. Accordingly, as noted above, the Commission accepts the application for final offer arbitration.

In accordance with paragraph 21 of Information Bulletin 2013-637, the matter upon which the Commission will make a determination is as follows:

The Commission advises parties that other matters relating to the distribution of SNN by Rogers, such as the appropriate packaging of SNN or duration of the agreement, will not be considered as part of this proceeding and are left to negotiation by the parties.   

Accordingly, rather than filing proposed affiliation agreements, which would include terms other than wholesale rates that are beyond the scope of this proceeding, parties’ offers must be limited to setting out their proposed rates for distribution of SNN, on the basic service as well as on a discretionary basis.

The Commission will examine the final offers submitted by the parties and will select one in its entirety. The Commission’s decision will be binding on the parties.

Filing of documents

The Commission requires that, by 30 July 2014, the parties each file their final offers with the Commission. As set out in paragraph 22 of Information Bulletin 2013-637, parties are reminded that these submissions must include concise supporting arguments stating all the facts, Commission requirements, and regulatory decisions or jurisprudence relied on in support of the party’s position. These submissions must be no longer than ten pages, excluding any attachments.

On 5 August 2014, once Commission staff has confirmed that the offers respond to the identified disputed matter, Commission staff will forward to each of the parties a copy of the other party’s offer.

To complete the record, Rogers is also required to provide the following information, by 5 August 2014:

  1. Current affiliation agreement with SNN;
  2. Wholesale rates paid to other all news services (Canadian and non-Canadian) distributed by Rogers;
  3. Retail rates charged by Rogers for all news services when offered on a stand-alone basis (Canadian and non-Canadian);
  4. Current number of Rogers subscribers to basic;
  5. Current number of subscribers to each news service (Canadian and non-Canadian) distributed by Rogers;
  6. Current number of subscribers to each programming package offered by Rogers, including the services offered within each package;
  7. Retail rate for each programming package offered by Rogers, including the services offered within each package; and
  8. Current tuning or viewership to SNN and to other news services offered by Rogers (AMA, total hours tuned, etc.), if available.

To complete the record, QMI is also required to provide the following information, by 5 August 2014:

  1. A listing of the wholesale rates paid by all BDUs to SNN (rate card with penetration levels and volume discounts if any), whether set out in existing affiliation agreement or any other arrangement for distribution; and
  2. The current tuning to SNN (AMA, total hours tuned, etc.).

By 8 August 2014, the parties may file observations on the other party’s final offer with the Commission, serving the other party. However, parties will not be authorized to amend their offers. Parties are reminded that these submissions should be no longer than ten pages.

Any documents filed with the Commission should be filed via the secure service “My CRTC Account (GCKey or Partner Log In)” using the “Broadcasting Online Form and Cover Page” on the web page and quoting the application number noted above.

Mediation

Noting that parties have participated in CRTC staff-assisted mediation in attempting to resolve this dispute, and that the parties have indicated that they wish to continue working in this manner during the final offer arbitration proceeding, the Commission appoints Bernard Montigny, Senior Director, Alternative Dispute Resolution and Processes, to continue in his capacity as mediator over this dispute.

The Commission therefore directs the parties to participate in mediation, after the final offer arbitration record is complete, to be held during the week of 11 August 2014 to 15 August 2014. Parties should familiarize themselves with the Commission’s expectations with respect to their participation in the mediation, as set out in paragraph 129 of Broadcasting Regulatory Policy CRTC 2011-601.

Confidentiality

As noted in paragraph 40 of Information Bulletin 2013-637, existing Commission confidentiality rules and practices apply during the course of final offer arbitration proceedings. The applicable rules and practices are set out in the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules of Procedure) and described in Broadcasting and Telecom Information Bulletin 2010-961. The parties are reminded to provide sufficient justification for their claims of confidentiality and to file abridged versions of submissions, when possible. 

Responsibilities of the parties

Parties may contact Julia Bresee at 819-997-1194 or at julia.bresee@crtc.gc.ca if they require additional information regarding the organization and conduct of the final offer proceeding.

Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date. In addition to filing with the Commission, all copies of submissions are to be sent to julia.bresee@crtc.gc.ca.

Sincerely,

[Original signed by]

John Traversy
Secretary General

cc. Kory Teneycke, SNN, kory.teneycke@sunmedia.ca
David Purdy, Rogers, david.purdy@rci.rogers.com

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