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BCE acquisition of Astral raises concerns

Mar 16, 2012

FOR IMMEDIATE RELEASE

Ottawa - The CRTC will have its hands full with BCE Inc.'s bid to purchase Astral Media, the largest media merger in Canadian history, because it raises concerns about market domination and other important issues, according to the watchdog group Friends of Canadian Broadcasting.

Pending CRTC and Competition Bureau approval, BCE Inc. will acquire all of Astral's media properties including television, radio, outdoor advertising and a slew of high traffic web properties.  BCE already owns the most popular pay and specialty services, but these are concentrated in English Canada.  The addition of the Astral services will make them the dominant player in French Canada as well.

"How much media concentration is too much?  This is a serious concern and the CRTC will have to determine the answer to this question in the public interest," says Ian Morrison, spokesperson for Friends.

The present CRTC policy allows a single entity to own a maximum of 2 AM and 2 FM stations in the same language in a market with more than 8 stations or a maximum of 3 stations (maximum of 2 being FM) in a market with fewer than 8 stations. The combination of the former CHUM stations (now owned by Bell and the Standard stations (now owned by Astral) will require Bell to divest stations.

"BCE Inc. will be required to sell off some of the radio properties it proposes to purchase to meet legal requirements to prevent too much media concentration," Morrison said.

This deal will give BCE Inc. dominance in radio in Canada.  It will also put the company in a dominant position when it comes to purchasing content because they will now be purchasing conventional television, specialty television, and movie content in both languages in addition to mobile content.

The CRTC adopted a new policy on vertical integration of broadcasting companies last year which:

  • prohibits exclusives on linear TV content when it comes to mobile and online platforms;
  • bans tied selling of specialty services ensuring BDUs can buy them from programmers one at a time;
  • calls for consumers to be able to buy more specialties one at a time in a pick-and-pay format;
  • outlines a specific code of conduct for vertically integrated companies when negotiating with other companies to prevent anti-competitive behaviour (including a standstill provision so that consumers don't lose access to their TV channels;
  • established new requirements to protect independent broadcasters.

The upside of this proposed transaction is that BCE Inc. would become a needed balance to the dominance of Quebecor Media in Quebec.  It would also deliver the biggest public benefits package in Canadian history.  The CRTC requires purchasers to set aside 10% of the value of the transaction for public benefits such as funding Canadian productions, training and mentoring and other expenditures designed to benefit the Canadian entertainment and production sectors.

"Broadcasters have tried to back away from public benefits commitments so the Commission will have to watch BCE Inc. like a hawk.  This announcement is yet further evidence of the need for strong regulation of the broadcast industry," Morrison said.

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For information: Jim Thompson 613-447-9592