Quebecor Media Bewildered by the Unprecedented Attack Upon it by CBC/Radio-Canada

MONTREAL, QUEBEC--(Marketwire - Oct. 19, 2011) - It is with bewilderment that Quebecor Media Inc. today learned of misleading and unfounded information published in its regard by CBC/Radio-Canada, a federal crown corporation.

"Arriving as it does on the eve of our appearance before a parliamentary commission studying CBC/Radio-Canada's access to information shortcomings, one must question the motives behind this unprecedented effort on the part of a crown corporation to attack a large company in its sector," declared Pierre-Karl Peladeau, President and CEO of Quebecor Media.

Quebecor Media requests that CBC/Radio-Canada immediately retract itself and remove without delay the false and malicious information contained in its communication. Quebecor Media will not tolerate that an institution of the federal government attempt to sully its reputation in this matter. In the mean time, it imperatively wishes to make the following corrections:

Canada Media Fund

On its web site, CBC/Radio-Canada draws attention to sums received by TVA Group Inc., a Quebecor Media subsidiary, from the Canada Media Fund (CMF), yet fails to mention that Quebecor Media is also one of the largest contributors to the fund, by way of its Videotron G.P. subsidiary. In fact, solely for the year 2010, TVA received a total of $20.8 million from the CMF, while Videotron contributed $21.5 million to the same fund. CBC/Radio-Canada also neglects to mention that it itself receives funding from the CMF, above and beyond the annual subsidy of $1.1 billion granted by the Parliament of Canada. In 2010, the amount received by CBC/Radio-Canada from the CMF was over $95 million. We further note that Quebecor Media has publicly called for abolishing the CMF in exchange for a commitment to invest in the Canadian programming of its broadcasting concerns all of the contributions now made by Videotron.

Spectrum auctions

The affirmations made by CBC/Radio-Canada regarding the 2008 spectrum auction are particularly distorted, staggering and disconnected from reality. In 2008, the federal government adopted a spectrum auction model for which the explicit objective, far from limiting competition, was to inject real competition into a sector of the economy where such forces were sorely lacking.

Quebecor Media responded to the government's call and purchased licences for a total of $555 million, the largest bid of any of the new players then making their entry into the economically vital wireless sector. The average price paid by Quebecor Media for its licences was $1.46 / MHz / population, compared to $1.37 / MHz / population for the entire group of participants, old and new. At the end of this highly competitive process, the federal government collected a total of $4.25 billion, almost three times the amount predicted by independent analysts prior to the auction's start. No one received a subsidy in this auction or saved a dime, contrary to what was odiously advanced by CBC/Radio-Canada.

Regarding Quebecor Media's recommendations for the upcoming spectrum auction in the 700 MHz band, CBC/Radio-Canada's affirmations are simply false. In public documents filed with Industry Canada on this matter, Quebecor Media has proposed a spectrum cap model designed to ensure an equitable distribution of spectrum resources among all industry players, old and new. Spectrum caps are common around the globe, having been adopted by numerous countries in the past few years. Under the specific model put forward by Quebecor Media, no one is prevented from acquiring frequencies in the 700 MHz band, and no one is assured of acquiring them. And above all, no one receives a subsidy or an artificial saving.

Magazines

CBC/Radio-Canada mentions subsidies received by various magazines of Publications TVA, a Quebecor Media subsidiary. Quebecor Media wishes to make it clear that it had nothing to do with the creation of these magazine subsidy programs. However, as a publicly-traded company accountable to its stockholders, Quebecor Media cannot let its competitors such as Rogers or Transcontinental be the sole beneficiaries of these programs, as doing so would place it at an untenable competitive disadvantage.

Advertising

Finally, CBC/Radio-Canada says that Quebecor Media has complained about not receiving its just share of CBC/Radio-Canada's advertising spend. This is false. Quebecor Media has repeatedly said that it is unacceptable for a crown corporation like CBC/Radio-Canada to deliberately ignore the biggest newspaper publisher in Canada, a company that reaches millions of readers every day, because it does not appreciate the editorial positions of its publications. In accordance with its mandate, a crown corporation financed by all Canadian taxpayers has the duty to equitably distribute its advertising dollars without any regard to editorial positions. Doing the opposite would be tantamount to retaliatory measures. As it stands, Quebecor Media publications are the victim of an advertising boycott from CBC/Radio-Canada.

Quebecor Media has forwarded this matter to its legal counsels and reserves all its rights. It considers these actions to be an unheard of affront to the institution of Parliament and holds this affront to be even more odious coming from an institution created by the Canadian Parliament.

"The unprecedented gravity of today's actions reveals the shameless arrogance that characterizes the practices of the state broadcaster's upper management and demonstrates the need to end the growing prejudice that these practices have been causing for far too long to the Canadian broadcasting system and its players. These actions should serve as the catalyst for reflection on the part of parliamentarians regarding the abuses of the state broadcaster's management," concluded Mr. Peladeau.

About Quebecor Media

Quebecor Media Inc. is a subsidiary of Quebecor Inc. QBRQBR, one of Canada's largest telecommunications and media holding companies. Quebecor Media has over 16,000 employees in a number of media-related operating companies: Videotron Ltd., an integrated communications company engaged in cable television, interactive multimedia development, Internet access services, cable telephone service and mobile telephone service; Sun Media Corporation, the largest publisher of newspapers in Canada; Canoe.ca, operator of a Canadian network of English- and French-language Internet properties; TVA Group Inc., operator of the largest French-language conventional television network in Quebec, a number of specialty channels, and the English-language Sun News Network; and Nurun Inc., a major interactive technologies and communications agency with offices in Canada, the United States, Europe and Asia. Quebecor Media Inc. is engaged in magazine publishing (TVA Publishing Inc.); book publishing and distribution (Sogides Group Inc. and CEC Publishing Inc.); production, distribution and retailing of entertainment products (Archambault Group Inc. and TVA Films); rental and retailing of DVDs, Blu-ray discs and console games (Le SuperClub Videotron ltee); printing and distribution of community newspapers and flyers (Quebecor Media Printing Inc. and Quebecor Media Network Inc.); production and dissemination of news content (QMI Agency); multiplatform advertising (QMI Sales); and print and online directories (Quebecor MediaPagestm).