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CRTC blocks BCE’s Astral purchase; Bell to call in the feds

19 Oct 2012

The Canadian Radio-television and Telecommunications Commission (CRTC) has denied the country’s largest telecoms group BCE’s application to acquire control of Astral Media’s television and radio services because ‘it is not in the public interest.’ Jean-Pierre Blais, chairman of the CRTC, explained: ‘BCE failed to persuade us that the deal would benefit Canadians… It would have placed significant market power in the hands of one of the country’s largest media companies. We could not have ensured a robust Canadian broadcasting system without imposing extensive and intrusive safeguards, which would have been to the detriment of the entire industry.’ The proposed transaction raised concerns related to healthy competition, the concentration of ownership in the broadcasting markets, vertical integration of telecoms/broadcasting/media groups and the exercise of market power in an anti-competitive manner. BCE (including Bell Canada/Bell Mobility/Bell TV and Bell Aliant) already controls numerous television and radio services, as well as a national satellite TV broadcasting service (and growing IPTV service), and is the largest internet service provider in Canada, the second largest wireless service provider, and the third largest overall television distributor. The decision to block the CAD3.4 billion (USD3.5 billion) deal followed a public hearing held last month.

BCE’s rival Rogers Communications issued the following statement: ‘We commend the CRTC for this courageous decision. We believe that Canadians should have fair and open access to content. This is a good day for consumers.’ However, BCE reacted by saying that it will ask the federal government to override the CRTC’s decision, which it claimed went against the regulator’s own policy. George Cope, CEO of Bell Canada said: ‘We met all the CRTC’s rules, indeed our acquisition of Astral was based directly on the CRTC’s currently in-place Diversity of Voices policy. The wide-ranging benefits to Canadians of the transaction are clear, but the CRTC has told consumers that they and the rules in place just don’t matter.’ Bell’s chief legal representative Mirko Bibic added: ‘Canadian broadcasting needs significant new investment, fresh ideas and increased choice in a time of cable company dominance in media and accelerating competition from foreign giants who invest little to nothing in the Canadian broadcasting system.’

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