George Cope, chief executive of Bell parent company BCE Inc., said Monday the merger will be good for Canadians and the industry after a warning from the CRTC that the burden rests with Bell and Astral to prove its case.
CRTC Chair Jean-Pierre Blais says Bell must prove that the deal is in the public interest, as well as in the interest of the Canadian broadcasting system.
Astral CEO Ian Greenberg says the deal is the best way to protect Canadian interests from foreign companies like Neflix.
It's Bell's second attempt to take over Astral, following a change to the $3.38 billion deal that would see Bell sell off a majority of Astral’s TV assets in an attempt to ease the regulator’s worries about competition.
John Lawford, executive director of the Public Interest Advocacy Centre, disagrees with says the deal is bad for consumers.
“Increased media concentration into the hands of few large, vertically integrated telecommunications and media companies will not result in more competition in the market.”
Bell’s second attempt
Bell’s original takeover bid was rejected by the Canadian Radio-television and Telecommunications Commission last fall, because the regulator felt it would restrict choice and raise prices for consumers.
At the time, CRTC commissioner Jean-Pierre Blais said the deal would mean Bell would control almost 45 per cent of Canada’s English TV viewership, and almost 35 per cent of the French-language audience.
As well, it would have become the largest radio-station operator in Canada and would have controlled more than half of TV pay and specialty services.
In November, Bell launched a revised bid for Astral.
Under the new plan, Bell's parent company BCE would keep eight of Astral’s 25 specialty channels, including the Movie Network, HBO Canada, and French-language SuperEcran, as well as 77 of its 84 radio stations.
Bell would also be required to allow other providers access to the new channels at a reasonable price.
The plan has been approved by the Competition Bureau of Canada.
Less market control
Bell and Astral Media have pointed out they will control less of the market under the revised deal.
"Even after the sale of half of Astral's French-language specialty TV services, Bell Media would increase its viewing share in this market to 22.6 per cent — still less than the 31 per cent viewing share enjoyed by Quebecor, but a significant enhancement to market competition nevertheless," Bell Media president Kevin Crull said recently.
Telecom consultant Eamon Hoey said the question remains whether the acquisition is in the public's best interests.
"It's going to take some guts for the CRTC to turn it down," said Hoey, managing partner at Hoey Associates Management Consultants Inc. in Toronto.
Media concentration is still a big concern, he said.
"It's only moving the pieces of chess around the board," Hoey added.
Cable company Cogeco is opposed to the new plan, saying it will lead to higher prices and less choice for consumers.
The hearings will be held in Montreal all this week.