CRTC axes Bell-Astral merger

Bell Canada Enterprises (BCE) President and Chief Executive George Cope (L) looks at Astral Media...

Bell Canada Enterprises (BCE) President and Chief Executive George Cope (L) looks at Astral Media Inc. President and Chief Executive Ian Greenberg in this September 10, 2012, file photo. REUTERS/Christinne Muschi

Daniel Proussalidis, Parliamentary Bureau

, Last Updated: 8:48 PM ET

OTTAWA - Federal regulators have struck a deathblow to the proposed $3.4-billion media mega-merger involving Astral Media and Bell Canada Enterprises.

“Our only option was to deny the application because it was not in the public interest,” CRTC chairman Jean-Pierre Blais said Thursday. “Simply put, this was not a good deal for Canadians.”

At the centre of the CRTC decision to reject Bell Canada Enterprises' (BCE) attempt to buy Astral is fear the new company would squelch competition.

“This transaction would have resulted in an unprecedented level of consolidation in the Canadian marketplace and we had grave concerns that BCE would be able to use its market power in an unfair manner and to engage in anti-competitive behaviour,” said Blais.

By buying Astral, BCE would control 107 radio stations, English-language TV networks CTV and CTV2, as well as 49 pay and speciality television services.

The CRTC contends a combined BCE and Astral would command almost 45% of the English TV audience — a media monster compared to its next closest competitor, Shaw.

The merged company would also control 35% of the French TV market.

In its decision, the commission said it also worries about reduced consumer choice because the BCE-Astral combination could favour its own distribution networks “by restricting access to its programming services or offering them at above-market rates to its competitors.”

BCE reacted by issuing a statement that mocks regulators for believing its competitors’ “carefully orchestrated and well-funded propaganda,” questioning the CRTC’s impartiality and accusing regulators of ignoring their own rules.

“Bell is compelled to launch its request to the federal cabinet to direct the CRTC to actually follow its own in-place policy,” said Bell legal officer Mirko Bibic in the statement.

The CRTC said Bell can appeal to the Federal Court of Appeal, but said the federal cabinet cannot overturn this decision.

In the end, the CRTC accepted arguments made by several interveners, including Pierre Karl Peladeau, CEO of Quebecor, which owns QMI Agency, Sun Media and Sun News Network.

“This deal carries a huge risk to the consumer that would see the cost of television programming rise while service deteriorates,” Peladeau said in August.

The Public Interest Advocacy Centre (PIAC) welcomed the CRTC’s ruling.

“The commission drew a bright line that Bell’s proposed bid for Astral would result in too much control in the hands of Bell,” said PIAC lawyer Janet Lo in a statement.

Rogers Communications hailed the CRTC for a “courageous decision."


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