BCE Acquisition of Astral Media Round 2 Part 2

Blog, Information Technology, Regulation, Roland Renner (historic), Uncategorized

Last week participants filed their objections to the second BCE application to acquire Astral Media.  There were 834 interventions in total, many of which are one-page letters of support or opposition.

There are three different categories of organizations that filed objections:

  • Telco and cableco competitors (Rogers, Telus, SaskTel, MTS, Videotron (Quebecor), Cogeco, Eastlink) (Shaw, which has also pursued a content acquisition strategy, has stayed neutral on the BCE deal)
  • Production sector (Directors Guild, Canadian Media Production Association, Association of Canadian Television and Recording Artists, etc.
  • Consumer groups (Public Interest Advocacy Centre, Consumers Association of Canada, etc.)

Each of these categories had objections based on the argument that BCE would have too much market power (too large a concentration of ownership) limiting the competition in the marketplace.  This is an interesting group of allies, opposing BCE in the context of a heavily regulated industry that has been moving gradually towards more competition and consumer choice.

The Competition Bureau has already given its stamp of approval on the deal.  As I pointed out last week, the new acquisition proposal is specifically designed to address the CRTC’s objections to the first proposal.  By selling off some stations and specialty channels, BCE will stay under the thresholds set by CRTC policy that limit concentration of ownership in the industry, making it difficult to see what grounds the Commission would have to deny the application this time.  Nevertheless, the three groups listed above have re-stated their concerns and objections to the acquisition.

Video distribution competitors of BCE do not relish the idea of negotiating terms and conditions for the carriage of pay and specialty channels that are owned by the same organization they are competing against.  There are rules to prevent undue discrimination where there is vertical integration.  For example, cable companies that own specialty channels must offer the channels to their competitors.  Just how effective these rules are when one of the market participants becomes as dominant as BCE remains to be seen.  For a description what it is like to negotiate for programming access, read the intervention of Stephen Savola of Conuba Cable Systems in Golden BC.

https://services.crtc.gc.ca/pub/ListeInterventionList/Documents.aspx?ID=191101&Lang=e

The production sector sees less competition in the market for the programs they make as the number of potential buyers is reduced by one very important player.

Consumer groups think BCE would be too powerful and fear that consumers will have to pay too much for the services and the scope of consumer choice will be reduced.

N.V. The author represented Ice Wireless, a competitor of BCE-owned Northwestel in the first BCE Astral proceeding.