Canada’s BCE Inc. came under heavy fire from competitors Rogers Communications Inc. and Cogeco Cable Inc. because of their controversial plans to purchase Astral Media Inc. Canadian regulators are reviewing the BCE – Astral merger as executives from Rogers and Cogeco Cable argue that the deal would harm consumers and the telecom sector. This has been seen as the largest push so far by opponents of the $3.38-billion takeover bid.
During talks with the Canadian Radio-television and Television and Telecommunications Commission (CRTC) executives from Rogers and Cogeco were very vocal about their objections to the takeover and stated that a buyout would give BCE “overwhelming control” of the industry. The top level employees also offered suggestions for how the deal could be made without offering BCE a near monopoly on programming. Currently Astral Media has ownership of the largest list of programming and TV Shows in Canada, which makes it a very important player in the sector. The programming assets of Astral are probably what attracted BCE to the company and if the merger is successful then BCE may become the most powerful media and telecom conglomerate in Canada.
Rogers asked the CRTC to make changes to the deal by forcing the reduction of Astral’s assets by selling off the companies English-language services like The Movie Network and HBO Canada. The CRTC chair Jean-Pierre Blais inquired about exactly who would buy the profitable service and Rogers’ senior vice-president of regulatory affairs, Ken Engelhart, replied, “I’m sure there would be bidders.” He went on to say that there might be a chance that his own firm would be interested in the assets.
Rogers executives further strengthened their claims by citing previous dealing with BCE. Head of programming distribution strategy, David Purdy, talked about how BCE used its ownership of CTV Inc. to increase the pricing for competitors and then not letting them use its TV products for online or wireless viewing. He stated that, “They want us to guarantee the linear [revenues on traditional TV], while they go out and start new businesses.” Purdy was also very clear about the fact that his company currently purchases 50% of its on-demand programming from Astral. If the deal goes through, Purdy stated that, “My product road map is literally at the mercy of Bell executives.”
Cogeco mirrored the concerns brought up by Rogers and CEO Louis Audet urged the CRTC to apply “rules of common sense” when they were ready to make a decision.
Source: Financial Post
Photo: BCE
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