Bell and Astral: a Follow-up and a Sigh of Relief

Following up on an earlier post, I was pleased to hear today that the CRTC rejected BCE Inc.’s (Bell’s) proposed takeover of Astral Media, a deal which would have set Bell back $3.4 billion.

As I mentioned in my earlier post, a green light on the Bell-Astral deal would have put the broadcasting industry’s “diversity of voices” in jeopardy, allowed Bell to have an unfair competitive advantage, and would have brought US-style concentration to the Canadian broadcasting system.

According to the Canadian Press, newly appointed CRTC chair Jean-Pierre Blais felt the same way.

"BCE failed to persuade us that the deal would benefit Canadians," Blais said. "It would have placed significant market power in the hands of one of the country's largest media companies.

"We could not have ensured a robust Canadian broadcasting system without imposing extensive and intrusive safeguards, which would have been to the detriment of the entire industry."

The federal regulator says Bell already has 33.7 per cent of the English television viewing audience, something of which I was aware at the time of writing my last post. However, I did not know how far ahead Bell is of its nearest rival, Shaw Communications: Shaw has 21.9 per cent. That’s a pretty hefty difference!

Had the Bell-Astral deal gone through, according to the Canadian Press, Bell would have gained 42.7 per cent of the English viewing audience. The combination would also have given it 33.1 per cent of the French TV market.

"That convergence, integration and scale may lead to a point at which the size of an entity on a national level becomes so large that it hinders effective and healthy competition," the regulator said.

In spite of the backlash, BCE officials believed their acquisition would not stifle the broadcasting system’s “diversity of voices", and said they would add $200 million worth of funding for programs.

The Canadian Press did not specify, but I’m guessing this is Canadian programming. Of course, it’s always good when broadcasters are willing to fund home-grown programming, but Bell doesn’t have to be the funder. And yes, if the deal went through, we might have more Canadian programming available to us, but do we want it all produced by one single content provider?

Obviously the increased funding wasn’t a good enough strategy to convince the CRTC.

Bell said it needed to grow to compete with online competitors from outside Canada. It also pointed out that if the deal were killed, Astral's assets would be split up, allowing foreign web content providers to have the upper hand. Is that really a bad thing? That scenario would allow for increased “diversity of voices” in the industry, and as for dominance by foreign online content providers, I don’t think one company acquiring more assets is a way to compete. They, and the rest of Canada’s broadcasting conglomerates, can grow in other ways to make that happen. Perhaps that’s another topic for another post.

But I digress. At least us broadcasters-to-be and media watchers can breathe again.