Bell rivals cry foul over Astral takeover
Move would be 'bad for consumers and bad for Canada,' consortium member says
Posted: Aug 7, 2012 10:18 AM ET
Last Updated: Aug 7, 2012 8:35 PM ET
Need to Know
- Bell says deal is within CRTC rules
Some of Eastern Canada's largest media companies take issue with BCE Inc.'s proposed takeover of Astral Media, saying the deal would lead to higher costs for consumers and hurt Canadian culture.
The heads of broadcaster Quebecor Inc., cable company Cogeco Cable Inc. and telecom firm Eastlink held a news conference in Ottawa on Tuesday morning to urge Ottawa to nix the transaction, announced in March, whereby Bell would buy the assets of Montreal-based Astral Media for $3.4 billion.
If approved, the combined Bell/Astral media conglomerate would own 79 television channels, 107 radio stations and more than 100 websites across the country. Astral owns radio stations as well as specialty channels and pay-TV networks, including The Movie Network and HBO Canada.
In a release Tuesday, the consortium opposed to the deal said Bell would control 45 per cent of English-language television audiences and 35 per cent of French-language television audiences.
"Giving one private broadcaster so dominant a share of the television market is bad for consumers and bad for Canada," Eastlink CEO Lee Bragg said.
Shareholders of both companies have already approved the deal, but the Canadian Radio-television and Telecommunications Commission and other government regulators must still rule on the transaction.
In full-page newspaper ads that ran across the country Tuesday, Bell's rivals claim the larger Bell would control a greater percentage of the audience than that of the largest media company in other industrialized nations, including the U.S., Japan, the U.K., Australia, France and Russia.
"If Bell Canada controls the most popular content, they could charge you whatever they want to watch it," reads the ad, signed by Cogeco CEO Louis Audet, Bragg and Quebecor president Pierre Karl Peladeau. "Advertising rates could also go up — costs that eventually get passed on to consumers."
"Competition will be severely reduced and the broadcast market as we know it in Canada will be handcuffed," Peladeau said Tuesday.
Later Tuesday, the Competition Bureau confirmed that it is looking at the proposed deal. "The bureau is aware that a number of serious concerns have been expressed by market participants related to the effect that increased concentration and vertical integration in the broadcasting industry are said to be having on consumers and other television programming providers," Commissioner Melanie Aitken said in a release.
"While the bureau is required by law to conduct its work confidentially, I can confirm that we are actively reviewing these concerns," her statement read.
While Bell has a strong stable of properties in Ontario and the West, the proposed Astral takeover would buttress the company's presence in Quebec and Eastern Canada significantly. With Astral's properties, Bell would control approximately one-third of viewership in Quebec — just shy of the percentage that Quebecor controls.
For its part, Bell says the transaction is well within the regulator's rules and would indeed give the company a smaller stake than Quebecor in some markets.
"After the Bell-Astral transaction, our national viewership share will be 33.5 per cent for English TV and 24 per cent for French," BCE spokesperson Marie-Eve Francoeur said in a statement to CBC News. "Both are within the CRTC threshold of 35 per cent, below which transactions can go ahead without concern.
"We’re actually levelling the playing field … in Quebec and that clearly has our competitor concerned."
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