We will ‘manage through’ conditions on Astral acquisition, Bell says

BCE Inc. will “manage through” conditions the CRTC put on the regulatory approval of the company’s $3.38 billion deal to acquire Astral Media Inc., said Mirko Bibic, BCE’s executive vice-president and chief legal and regulatory officer. “They are what they are. In fact, most of them were conditions we had put on the table,” Bibic said in an interview Friday on BNN. “There are some additional conditions that the commission imposed in yesterday’s decision. Personally, just as an aside, I don’t think that those extra conditions were needed or warranted.” When asked about a condition to put the CRTC’s code of conduct for large, vertically integrated companies, into BCE’s licences, Bibic said BCE is already using the code in its day-to-day interactions and negotiations. “We’ll continue to do that. In fact, we have to. We were already doing it, and that always was our intention,” he said. In its approval of the deal on Thursday, following a denial of BCE’s first application last fall, the CRTC said it will insert a number of conditions into BCE’s broadcast licences, including a requirement for Bell to file all carriage and content licensing agreements with the regulator, allowing it to monitor the company’s deals with competitors. Jay Switzer, co-founder and chair of broadcaster Hollywood Suite Inc., also told BNN in an interview Friday that the conditions are “serious,” though within BCE, were “probably internally seen as reasonable, perhaps a little more restrictive and expensive than they might have liked. But I would guess well within the realm of 'thank goodness we’ve got it, it’s done, it’s over, and we can get back to business,'” he said. Switzer said the conditions were fairly balanced between BCE and competitors that wanted extra conditions. As a result of the regulatory approval, the deal will close on July 5, Bell and Astral said Friday in a release. Executives from both companies will lead the combined company, and Ian Greenberg, president and CEO of Astral, will serve on the BCE board of directors, the release said. The company will also open three new regional development offices in Vancouver, Winnipeg and Halifax. Bibic told BNN, a channel owned by BCE division Bell Media, that the company would bring “credible competition” to the Quebec market, referring indirectly to Quebec broadcast and telecom player Quebecor Media Inc. “It’s high time that there’s more competition in the media landscape in Quebec for French-language content, radio or TV,” he said. “The competition in Quebec will be fierce, vigorous, and for the benefit of consumers.” He said that the merged company would foster competition in the market by creating more and improved content and making it available to customers on multiple platforms. Through the deal, BCE, whose media division currently owns 26 English-language specialty channels including sports channel TSN, would take ownership of Astral’s stable of radio stations and specialty channels. Those include “must have” pay TV services TMN, TMN Encore and HBO Canada programming. The CRTC imposed the conditions to address concerns from competitors about BCE’s resulting market power. The regulator denied Bell’s first application last fall, citing concerns about the public interest and competition. BCE and Astral then came back with a reworked application and an agreement with the Competition Bureau, announced in March, to sell off 12 specialty and pay channels, including Teletoon and Disney. Other licence conditions being imposed by the CRTC include a “no head start” rule for digital media content exclusives and a commitment to “not unduly withhold non-linear rights, or impede others from obtaining such rights, from competing distributors”; as well as that BCE enter into the CRTC’s dispute resolution process where carriage and content licensing agreements for its broadcast content are not renewed within 120 days from the expiry of an existing agreement. In its decision Thursday, the CRTC said it is also hiking BCE’s tangible benefits package related to the deal—which requires the company to commit to projects that benefit the Canadian broadcasting system—to $246.9 million, or $72 million higher than Bell’s proposed $174.9 million. On Friday, Eastlink, owned by Bragg Communications Inc., said in a release that it was disappointed by the CRTC’s ruling and that it doubts “the safeguards proposed by the CRTC will be sufficient to prevent Bell Media from continuing to restrict consumer choice, by demanding limitations on how TV distributors like Eastlink package these services.” Louis Audet, chief executive of competing cable company Cogeco Cable Inc. said in a release Thursday that the company was disappointed with the decision, though the safeguards are positive. Audet said the company believes if the “safeguards are actively implemented and strictly enforced in a timely manner and with tight supervision, the interests of Canadian consumers could be effectively protected and the Canadian broadcasting market could remain workably competitive." At a news conference in Gatineau Thursday, commission Chairman Jean-Pierre Blais said the regulator will continue to closely scrutinize major mergers in Canada that affect media concentration and vertical integration. “The principles remain the ones given to us by Parliament, which are the objectives in the Broadcasting Act. We have a mandate from Parliament, and we intend to fully exercise it," Blais said. The CRTC will launch a broad review of its policies for the TV sector in the fall, first consulting with the public and then with industry. Blais said the upcoming policy review did not affect the regulator's decision on the merger, though it will look at many of the issues raised in the hearing on BCE's purchase of Astral. “Many of the issues raised during this proceeding, such as the choices offered to consumers, the diversity of editorial voices, and the opportunities for creators, apply to industry as a whole. They will be discussed in greater detail as part of the conversation on the future of television we plan to hold with Canadians in the fall," Blais said. —With reporting by Anja Karadeglija at akarad@thewirereport.ca, and files from and editing by Simon Doyle at sdoyle@thewirereport.ca

We will ‘manage through’ conditions on Astral acquisition, Bell says

News | June 28, 2013

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We will ‘manage through’ conditions on Astral acquisition, Bell says

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