By Alastair Sharp
TORONTO (Reuters) - Canada's broadcast regulator said on Thursday it would require cable and satellite television distributors to offer customers news channels on a standalone basis, a decision that could pave the way for more "a la carte" programming down the road.
The move should benefit Quebecor Inc's Sun News Network, a conservative news and opinion channel that lost a bid in August to require all distributors to offer the channel as part of their basic packages.
But the Canadian Radio-television and Telecommunications Commission said TV subscribers should at least have the opportunity to subscribe to all domestic news services, both individually and in packages of similar channels. It set a deadline of May 18 for distributors to comply.
"Canadian news services are an important part of our democracy," CRTC Chairman Jean-Pierre Blais said in a statement.
"With the rules we are announcing today, Canadians, as citizens, will have access to the news services that are of interest to them and will therefore have an opportunity to be exposed to a variety of opinions on matters of public concern."
At least one distributor, Telus Corp, does not offer Sun News at all in its main Western Canadian markets. It said it offers many channels "a la carte" or in simple packages, but expressed concern about being forced to offer content in a particular package.
"We'd rather leave that choice up to individual customers," Telus spokesman Shawn Hall said.
He said Telus had been unable to agree to terms with Sun News, but negotiations will likely resume now that the CRTC has made this decision.
The loss-making Sun network had argued in the hearing on its request for mandatory carriage that its target audience was older and poorer, meaning they would not be able to afford to pay for it outside of a basic package.
"This was never just about Sun News, it was always about putting Canadian TV first," said Kory Teneycke, vice president of the channel. "It is no longer OK to treat foreign news channels better than Canadian ones."
When the CRTC rejected its bid for universal access, it acknowledged barriers to entry that in turn limited the exchange of ideas.
The "mandatory carriage" designation is reserved for channels that broaden the range of Canadian content that would otherwise not be able to reach large audiences, including a channel dedicated to political proceedings and another made by and for aboriginal communities.
The regulator is pushing for greater freedom for Canadian television viewers to buy only channels they watch, rather than require them to subscribe to large packages.
Some distributors have moved toward more flexible programming since the CRTC "strongly encouraged" them to do so two years ago, while the commission is collecting views and will hold further public talks on the topic next year.
The moves are being closely watched south of the border, where U.S. media companies have ferociously resisted flexible programming, arguing that costs for individual channels will rise sharply.
But pick-and-pay programming might help cable companies limit viewer defections to cheaper Internet-based offerings from the likes of Netflix Inc and Amazon.com Inc.
(Reporting by Alastair Sharp; Editing by Frank McGurty, Lisa Von Ahn and Andre Grenon)