Canada's BCE Asks Feds to Overturn CRTC Denial of Astral Media Deal

A "shocked" and "appalled" Canadian phone giant said the regulator rejecting the $3.38 billion deal protects rival cable giants and rewards "behind-the-scenes lobbying."

TORONTO – A “shocked" and "appalled" Canadian phone giant BCE late Thursday said it will appeal to the federal cabinet a decision by the CRTC to deny its $3.38 billion takeover of Astral Media.

“Bell is appalled that the CRTC would come to a decision that so negatively impacts Canadian consumers and the national broadcast industry, contravenes its own policy and is tainted by behind-the-scenes lobbying by Bell's cable rivals,” BCE said in a statement.

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The blistering counter-attack followed the CRTC, Canada’s TV watchdog, rejecting the takeover of Astral Media on competition grounds.

“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,” George Cope, president and CEO of Bell Canada and BCE, added in a statement.

BCE said the CRTC decision protects rival cable giants and rewards “their extraordinary and obstructive lobbying efforts.”

The phone giant faced high-profile opposition to its Astral Media deal from carriers like Quebecor, Cogeco and Rogers Communications.

"We commend the CRTC for this courageous decision. We believe that Canadians should have fair and open access to content. This is a good day for consumers,” Phil Lind, vice-chairman of Rogers Communications, said in a statement in the wake of the CRTC decision.

Pushing back, BCE argued the CRTC erred in its decision by insisting a Bell/Astral combo would control 42.7 percent of the English language market, which exceeds a 35 percent threshold allowed under regulatory rules.

BCE insisted Bell and Astral combined would have an English-language TV market share of 33.5 percent, below the 35 percent threshold, and just 24.4% of the French-language TV market.

Using language rarely heard in normally politely Canadian regulatory circles, BCE said the CRTC used obsolete rules and policies to justify its denial.

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"The CRTC's decision reflects a bygone era, based on antiquated working papers from the 1970s and 1980s that have little bearing on modern Canadian broadcasting, and completely ignores its own most recent policy,” Mirko Bibic, Bell's chief legal and regulatory officer, added in a statement.

“Canadian broadcasting needs significant new investment, fresh ideas and increased choice in a time of cable company dominance in media and accelerating competition from foreign giants who invest little to nothing in the Canadian broadcasting system," he added.