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Winnipeg Free Press - PRINT EDITION

Media companies work to stop Bell-Astral deal

By: Steve Rennie

Posted: 08/8/2012 1:00 AM | Comments: 0

OTTAWA -- Three major Canadian media companies have launched a campaign to oppose BCE's planned purchase of Astral Media, saying the deal would give Bell too much control over the country's broadcasting landscape.

The heads of Cogeco Cable Inc. (TSX:CCA), Eastlink and Quebecor Inc. (TSX:QBR.A) unveiled Tuesday a new online petition against the proposed deal.

They raised the spectre of Bell (TSX:BCE) forcing consumers to pay more money for popular television channels, or packaging those channels with less-popular ones or other services, if the Astral (TSX:ACM.A) deal goes ahead.

The deal needs approval by the Canadian Radio-television and Telecommunications Commission and the Competition Bureau.

"Ottawa must absolutely stop this deal," said Louis Audet of Cogeco Cable. "If this transaction is approved, Bell Canada will pose a very serious threat to the Canadian broadcasting industry.

"Competition will be severely reduced, and the broadcasting market as we know it today will essentially be handcuffed. And the power will shift out of the hands of consumers and into the hands of the Bell conglomerate."

"Bell Canada would become so dominant that no other company could compete with it to buy popular movies, TV series and sports," added Eastlink's Lee Bragg. "They would use their financial muscle to own all the best content, which would ultimately make it more expensive for consumers."

Astral owns radio stations, specialty channels and pay-TV networks, including The Movie Network and HBO Canada.

"When you put all this together, especially also on the advertising market, you're really facing an elephant," said Pierre Karl Peladeau of Quebecor.

Bell says that's not the case.

"What we're seeing is a troika of dominant cable TV providers in their respective territories who will go to any lengths to preserve their dominance," said Mirko Bibic, Bell's chief legal and regulatory officer.

He also singled out Quebecor, accusing the company of wanting to pick and choose its competition.

"I found it rather ironic that the dominant player in Quebec media is complaining about this when, even after the transaction, they'll have a larger share," Bibic said.

Astral Media shareholders voted in May to approve the $3.4-billion acquisition of the TV, radio and billboard company by BCE, but they did not endorse a special $25-million payment to company founder Ian Greenberg. BCE has said it expects the deal will be completed in the second half of the year.

Competition Commissioner Melanie Aitken said her office is now conducting its review of the deal, and she is aware of the concerns that have been raised.

"While the bureau is required by law to conduct its work confidentially, I can confirm that we are actively reviewing these concerns. Should the bureau determine that the proposed transaction is likely to substantially lessen or prevent competition, we would not hesitate to take appropriate action," she said in a statement.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 8, 2012 B4

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