GATINEAU – Saying it is “shocked” and “appalled” at the CRTC’s decision to deny its $3.4 billion purchase of Astral Media, Bell Canada says it isn’t through with this fight yet.
"This is a decision that should not stand. Canadian consumers were told today by the CRTC that they don't deserve more – more choice, more competition, more Canadian content funding – all of which Bell and Astral committed to with this transaction," said George Cope, president and CEO of Bell Canada and BCE Inc. in a sharply worded statement released hours after the Commission decision was made public at 4 p.m. ET.
"We met all the CRTC's rules, indeed our acquisition of Astral was based directly on the CRTC's currently in-place Diversity of Voices policy. The wide-ranging benefits to Canadians of the transaction are clear, but the CRTC has told consumers that they and the rules in place just don't matter," added Cope.
Continues the Bell release: In its 2008 Diversity of Voices regulatory policy, the CRTC confirmed that it would approve broadcasting transactions resulting in a company controlling less than 35% of total TV audience share. Bell and Astral combined would have an English-language TV market share of 33.5% and just 24.4% of the French-language TV market, both well within the rules (it is worth noting that this would put Bell-Astral on par with cable company Shaw/Corus, which has a 30.2% share of English-language TV, and well behind cable company Quebecor's existing 30% share of French-language TV).
The Commission, in its decision, holds a different opinion on those numbers and indeed, counts different numbers.
"The CRTC's decision reflects a bygone era, based on antiquated working papers from the 1970s and 1980s that have little bearing on modern Canadian broadcasting, and completely ignores its own most recent policy,” said Mirko Bibic, Bell's chief legal and regulatory officer in the statement. “Canadian broadcasting needs significant new investment, fresh ideas and increased choice in a time of cable company dominance in media and accelerating competition from foreign giants who invest little to nothing in the Canadian broadcasting system.
The Bell release also alludes to how it thinks the Commission didn’t play fair through the public process, meeting too often with the deal’s opponents.
“Considering the dire impact the CRTC's decision will have on consumers in communities small and large, the blow it delivers to confidence in Canada's regulatory system, and the fact that the CRTC worked so closely with cable companies to arrive at its conclusions, Bell is compelled to launch its request to the federal Cabinet to direct the CRTC to actually follow its own in-place policy,” stated Bibic.
The statement adds that Bell confirmed senior CRTC officials met privately with the company’s cable competitors “multiple times in the days and weeks before the Commission began its public hearing into the Bell-Astral transaction, while denying Bell the opportunity for any such consultations – calling into question the impartiality of the entire process,” reads the testy Bell statement.
"That the CRTC was not guided by its own rules is a grave concern. In fact, this is just the latest in a series of decisions where the Commission held hearings, established rules… and then inexplicably ignored them when Bell moved forward with a strategic investment. This sends a strong message that Canadian broadcasting regulation is impetuous and unreliable, " added Kevin Crull, president of Bell Media.
The release goes on to say the CRTC chose “to serve cable companies focused on protecting their profit margins, already the highest in North America. These same corporations dedicated their vast TV, print and other media holdings to an aggressive and blatantly misleading campaign (saynotobell.ca) aimed at subverting due process and quashing enhanced competition. In combination with private meetings with the cablecos, the CRTC fell head over heels for their carefully orchestrated and well-funded propaganda effort that made a mockery of the entire process.”
The transaction also remains subject to approval by the federal Competition Bureau.
As for Astral, it didn’t say much. “The parties are analyzing the CRTC decision and are assessing their alternatives. Astral has been informed by Bell that it will request that the federal Cabinet intervene in the CRTC's decision to reject Bell's acquisition of Astral,” was all its official response said.
However, the companies will soon have to say something, since earnings season is approaching with Astral reporting to shareholders October 31 and Bell on November 1st.
For the full Bell release, click here.