Bell-Astral Rejection: BCE Asks Cabinet To Direct The CRTC To Follow Rules After Nixing Astral Deal

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Bell Canada CEO George Cope. Bell is asking the federal government to order the CRTC to follow its own rules after the telecom regulator rejected the company's planned $3.4-billion takeover of Astral Media. (CP photo) | CP

MONTREAL - Bell (TSX:BCE) is asking the federal cabinet to direct the CRTC to follow its own policies after the regulatory body nixed its $3.4-billion takeover of Astral Media, but the government says it has no plans to intervene.

Bell said Monday it has asked cabinet to issue a "policy direction'' under Section 7 of the Broadcasting Act, which requires the CRTC to follow its already in-place policies when reviewing change of control transactions in broadcasting.

However, a spokesman for Heritage Minister James Moore said late Monday the government has no jurisdiction to intervene in the decision of the independent body.

"The CRTC held public hearings and has rendered its decision on this matter," press secretary Sebastien Gariepy said in an email.

"CRTC decisions are made independent of the Government of Canada. Cabinet has no legal ability to overturn this decision."

The Canadian Radio-television and Telecommunications Commission turned down the friendly takeover of Astral last week, saying it wasn't in the best interests of Canadians.

CRTC commissioner Jean-Pierre Blais said had the regulator allowed the deal, BCE would have controlled almost 45 per cent of the English TV viewership and almost 35 per cent of the French.

But Bell disagrees, saying Bell and Astral combined would have an English-language TV market share of 33.5 per cent and the combined companies would have a 24.4 per cent stake in the French-language TV market, both within the rules.

The discrepancy arises because Bell included U.S. competitors in the calculations, while the CRTC did not.

As well, it would have become the largest radio station operator in Canada and control over half of TV pay and specialty services.

The telecom giant also says the CRTC overestimated Bell's share of the English-speaking market because it did not include U.S. content viewed by Canadians.

Bell says the CRTC has ignored its own rules, creating new criteria not included in any of its existing policies and never used before, without giving Bell any opportunity to comment.

"In rejecting the Astral transaction, the CRTC rejected its own established policies, creating serious regulatory uncertainty in Canada's vital broadcasting sector," Mirko Bibic, Bell’s chief legal and regulatory officer said in a statement.

"We're requesting that cabinet provide the required guidance to the CRTC to follow its own rules in place, with which the Astral-Bell transaction fully complied."

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