Bell-Astral Deal Will Cost Consumers, Group Warns

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BELL ASTRAL DEAL
George Cope, left, BCE president and CEO and Ian Greenberg, president and CEO of Astral Media Inc. shake hands after announcing the take over of Astral by Bell in a deal worth about $3.38 billion Friday, March 16, 2012 in Montreal. Bell Canada’s takeover of entertainment company Astral Media could mean higher prices for cable and wireless and fewer options for consumers, says a prominent Quebec advocacy group. (THE CANADIAN PRESS/Paul Chiasson) | CP

Bell Canada’s takeover of entertainment company Astral Media could mean higher prices for cable and wireless and fewer options for consumers, says a prominent Quebec advocacy group.

Option Consummateurs is urging the CRTC, Canada’s telecom regulator, to reject the proposed $3.4-billion deal.

"The Competition Bureau and the CRTC still have the ability to stop this transaction,” Option Consummateurs CEO Robert Calezais said in a statement. “We’re asking them to think about the rights and interests of consumers."

A combined Bell and Astral would own 117 radio stations across the country, including seven in the Vancouver market, six in both Toronto and Montreal, and multiple stations in numerous other large and mid-sized markets.

Media blogger Steve Faguy estimates the new combined company would control 45 per cent of the commercial radio market in Canada, up from Bell’s previous 31-per-cent share. The addition of Astral's speciality TV channels would nearly double Bell's roster of cable channels.

Bell has agreed to sell off 10 radio stations in Calgary, Ottawa, Toronto, Vancouver and Winnipeg, and to switch English-language Montreal sports station TSN Radio 990 to a French sports service, in an effort to comply with CRTC restrictions, which allow a single company to own no more than three stations in any one market (the commission has granted exceptions to allow four.)

“History shows us that this type of mega alliance brings no good to consumers,” Calezais said. “In Canada, we pay much more than in most Western countries for our cell phone service and cable.”

Though that claim is a matter of some dispute -- recent research suggests wireless rates in Canada are becoming competitive with U.S. prices, and Internet access in many cases is cheaper -- the Quebec advocacy group is not the only one raising the alarm about the merger.

Digital rights advocacy group OpenMedia criticized the merger when it was announced in March, saying it would inevitably limit consumer choice.

As they grow, companies like Bell and Rogers gain even more ability, not to mention incentive, to engage in anticompetitive behaviour,” the group said in a statement. “And with unchecked dominance over Canadians' communications comes higher prices, tighter contracts, more disrespectful customer service, and greater potential for surveillance.”

Option Consummateurs said it's particularly worried about the concentration of media ownership in Quebec, where "independent media are becoming rare."

In explaining the rationale for buying Astral, Bell CEO George Cope stressed the move was designed to level the playing field for Bell with Quebecor, which dominates the province's media.

The CRTC and Canada’s Competition Bureau have yet to review and approve the deal. The CRTC begins hearings on the matter in September.

Astral shareholders approved the takeover in May, but in a surprise move, they rejected a $25-million bonus to be paid to Astral founder Ian Greenberg.

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