NEWS

CRTC should nix Bell's Astral takeover, prof argues

08/17/2012 02:59 EDT | Updated 10/17/2012 05:12 EDT
Government regulators should block Bell's $3.4-billion deal to take over Astral because it will concentrate ownership of Canada's media assets too much, a prominent Carleton University professor says.

In March, Bell moved to buy Montreal-based Astral in a complex $3.38-billion deal that would see BCE add Astral's stable of 24 specialty TV channels, 84 radio stations and multiple online properties to its existing media properties.

Critics, including Bell's media rivals Cogeco, Quebecor and Eastlink, quickly argued that the deal should not be allowed, as it would concentrate Canadian media even further in Bell's hands.

"Competition will be severely reduced and the broadcast market as we know it in Canada will be handcuffed," Quebecor CEO Pierre-Karl Peladeau said.

Eastlink CEO Lee Bragg said, "Giving one private broadcaster so dominant a share of the television market is bad for consumers and bad for Canada."

In a report Friday by Dwayne Winseck, a journalism professor at Ottawa's Carleton University, it said the CRTC "probably has no choice but to give a pass to Bell with respect to its takeover of Astral’s radio assets," because the company meets the agency's requirements — or at least it will once it sells a number of stations in Vancouver, Calgary, Winnipeg, Toronto and Ottawa.

The deal would still make Bell a goliath in radio, with $500 million in revenues, 106 radio stations across the country and controlling just under 29 per cent of the market — twice the size of its nearest competitors, Rogers, CBC and Corus.

But the agency is well within its mandate to stop the deal on other fronts.

There would be little impact on the traditional television market, he said, but in the specialty and pay television market, Bell’s market share would rise sharply from 28 per cent of all viewers last year to more than 42 per cent of all cable TV viewers in Canada if the deal goes through. "This gives the CRTC ample grounds to intervene," Winseck said.

Bell's share of the overall Canadian television universe would increase from 27 per cent in 2011 to 35, he noted. Astral itself is already the fourth-largest specialty TV company in Canada (and the largest owner of radio stations) so tacking it onto Bell's large network makes the combined company a giant.

Those levels of concentration are especially concerning because the media landscape in other developed economies is moving in the opposite direction. "While concentration is slowly declining elsewhere, in Canada it is rising sharply," the report reads. "The Bell – Astral deal will compound the trend."

A report from an international media monitoring group found Canada has the second-highest level of vertical integration and cross media concentration among 32 of the world's most developed economies. Allowing the Bell/Astral deal to go through would push Canada into first place.

"The CRTC’s own concentration rules permit it to intervene actively in the face of such levels, and it should," Winseck said.

MORE:cbcNews