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CRTC denies Astral Media acquisition by BCE

The Canadian Radio-television and Telecommunications Commission has denied the application of BCE to acquire control of the television and radio services of Astral Media on the grounds that it would not be in the public interest. According to the commission, its concerns included competition, concentration of ownership, vertical integration and possible anti-competitive exercise of market power. The commission also stated that it was not persuaded that the transaction would provide "significant and unequivocal benefits to Canadians" that would outweigh these concerns. "BCE failed to persuade us that the deal would benefit Canadians," said Jean-Pierre Blais, chairman of the CRTC. "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."

In response to the CRTC decision, BCE has announced that it will request that the federal Cabinet intervene on its behalf, claiming that the rejection contravenes established CRTC policy. BCE cited a 2008 CRTC policy stating that it would approve broadcasting transactions resulting in a company controlling less than 35% of total TV audience share. According to the company, Bell and Astral combined would have an English-language TV market share of 33.5% and a French-language share of 24.4%. "We met all the CRTC's rules," said George Cope, president and CEO of Bell Canada and BCE. "Indeed our acquisition of Astral was based directly on the CRTC's currently in-place Diversity of Voices policy. The wide-ranging benefits to Canadians of the transaction are clear, but the CRTC has told consumers that they and the rules in place just don't matter."

BCE also alleges that the decision process was "tainted by behind-the-scenes lobbying" by its competitors in the form of private meetings between cable operators and senior CRTC officials prior to the public hearings on the transaction. "A combined Bell-Astral would grow the entire Canadian broadcasting industry to the benefit of consumers and content creators," said Kevin Crull, president of Bell Media. "Instead, the CRTC has decided to favour the interests of unregulated US broadcast channels and Internet television providers, while blatantly protecting the interests of cable companies, such as Québecor, which continues to dominate the French-language media market."

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