Earlier this year Bell acquired Astral Media for a whopping $3.4 billion. But the deal was too big to happen easily—the merger acquired a deep investigation from the Canadian Radio-television and Telecommunications Commission.
Today, the CRTC finalized a decision. And it shocked many.
The national regulator killed the merger, saying the combined companies would be impossible to police without "extensive and intrusive safeguards" needing to be imposed against all broadcasters across the country. As the Globe and Mail's Steve Ladurantaye writes, "the commission didn’t see any reason to allow one company to control as much as 42% of the English television market and 33% of the French."
“BCE failed to persuade us the deal would benefit Canadians,” said chairman Jean-Pierre Blais. “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.”
Quoth the Globe and Mail:
As the months passed, Bell made the case that it needed to do the deal in order to compete with international rivals such as Netflix—if it owned more speciality channels and the related content, Bell argued, then it could better control its own programming costs and offer it at a competitive rates for its rivals to offer their subscribers. The CRTC wasn’t buying it.
“BCE did not demonstrate that it needs to be bigger to compete with foreign services,” the ruling reads. “The commission does not consider that there is compelling evidence on the record to demonstrate that foreign, unlicensed competitors are having a significant impact on negotiations for program rights by Canadian broadcasters … Internet platforms continue to be complementary to the traditional broadcast system.”
Astral owns a portfolio of English and French specialty channels as well as radio stations. The original deal would have seen the combined company control more than 100 radio stations, 30 conventional television stations, and 56 speciality and pay services.
Vancouver-based Open Media is thrilled with the decision.
“I’m thrilled to see the CRTC listen to Canadians and deny this merger,” stated OpenMedia's Executive Director, Steve Anderson. “Canadians have been asking the CRTC to stop giving Bell and other big telecom conglomerates the keys to our media system. It time to move forward and fix our broken media and telecom markets, and this is a decisive step in the right direction.”
Canada's media system is already one of the most highly concentrated in the industrialized world. Canadians pay high prices for worse content and services because of a lack of competition and choice. Owning more media content creates an incentive for Bell to maximize profits by pushing content that it owns or restricting access to other content it can’t monetize – and it gives Bell control over the media content citizens consume, and delivery of daily communications.