OTTAWA - Quebecor Media has hit a snag in its effort to have its new 24 hour news network a must-carry channel on cable and satellite, The Canadian Press has learned.

The broadcasting regulator has told Quebecor that its proposed Sun TV news channel, dubbed Fox News North by rivals, won't be considered for a must-carry Category 1 licence for now, which means carriers must offer the service but customers are free to choose it or not.

The Canadian Radio-television and Telecommunications Commission says in a letter obtained by The Canadian Press that it announced back in March it won't consider new Category 1 licences, also called Category A, until October 2011, after the switchover of all TV signals to digital.

Instead, the CRTC says Quebecor could apply for a licence to operate as a competitive news service, which could be considered immediately.

Another option for Quebecor, the regulator says, is to transform its existing over-the-air SUN TV station into a news and analysis channel, which would require no regulator approval.

"Should you, however, insist that your application be considered as a Category A application, you will have to wait until after October 2011 when the appropriateness of licensing new Category A or revising existing Category A services will be considered," states the letter, signed by Peter Foster, director general of CRTC's television policy and applications.

The letter was sent on July 5 and addressed to Peggy Tabet, director of regulatory affairs for Quebecor Media Inc.

In response, a spokesman for Quebecor said the company will respect the CRTC process, but does not believe it will make a difference to its operations.

Sun TV is planning to start airing on Jan. 1.

"We'll get exactly what we're asking for at the end of the day," said Serge Sasseville, Quebecor's vice-president of corporate affairs.

"We'll ask the CRTC exactly the same conditions we've been asking with a Category 1, and we're pretty confident we'll get it. You can ask for a must-offer even for other categories."

"It's only labelling. You can call a cat a dog but at the end of the day it's still a cat," he added.

However, the CRTC has made clear it is moving away from must-carry for competitive news services and intends to move both CBC News Network and CTV's News Channel off the preferred designation some time next year.

Not receiving must carry, or must offer, status would put the new station at a disadvantage when negotiating a fee from cable and satellite distributors, because there would be no obligation on the distributors to carry the signal.

Both CBC News Network and CTV's News Channel are established services that have built up large subscriber bases of about 10 million and eight million respectively.