BCE Acquisition of Astral Media Approved

Blog, Disruption, Roland Renner

The CRTC finally approved BCE’s acquisition of Astra Media, the second time that BCE presented a deal for approval.  In this version of the deal BCE has sold interests and will divest itself of several other properties to fall under the thresholds for media concentration in its markets.  This had been the biggest issue blocking CRTC approval of the deal in round 1.

Once BCE had complied with the thresholds, it seemed difficult to imagine how the CRTC could deny approval a second time. Nevertheless, opponents complained of too much market power and the likelihood of unfair practices through the vertically integrated structure of BCE.   BCE owns a television broadcaster, specialty and pay channels, radio stations, internet distribution and both satellite and fibre based television delivery, known as Broadcasting Distribution Undertakings or BDU’s in the regulatory world.  I almost forgot.  BCE has a telephone company as well!

These complaints are about concerns that smaller companies will not have the power to negotiate fairly with BCE for carriage or channel placement on Bell TV, for example.  Will Bell have the ability to squeeze the smaller specialty channels in favour of the ones that it owns?

With approval, there are thirteen conditions that address these concerns as well as other matters.  There are new rules to prevent BCE giving “undue preference” to its own properties and more requirements for public visibility into the negotiations.

This decision has a big impact in the Quebec market where Quebecor now faces a larger consolidated competitor.  Cable company Cogeco had also campaigned strongly against approval.  Finally, the CRTC tacked on an extra $72 million in tangible benefits that BCE (or any other buyer of a media company) must deliver to the broadcasting system.

Now BCE has an opportunity to show that bigger is better.

N.B. The author represented Ice Wireless and Iristel during the first BCE Astral approval proceeding, opposing certain components of the proposed tangible benefit plan.  These components were not included in the second application.