Buying Astral good for consumers and will provide more Canadian content: Bell

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By The Canadian Press

MONTREAL — Consumers will get more content and Bell will play fair with its competitors, the company promised as it made a revised sales pitch to the CRTC seeking approval for its $3.4-billion takeover of Astral Media that was turned down last year.

George Cope, chief executive of Bell parent company BCE Inc., said Monday the merger will be good for Canadians and the industry after a warning from the CRTC that the burden rests with Bell and Astral to prove its case.

"We will be investing more in Canadian content," Cope told the Canadian Radio-television and Telecommunications Commission hearing.

"We will bring more competition to Quebec," he said, where a combined Bell-Astral would compete with dominant TV broadcaster Quebecor Inc. (TSX:QBR.B) and with radio stations owned by Cogeco (TSX.CCG).

The CRTC killed the deal last fall, saying it wasn't in the best interests of Canadians and would have made Bell too dominant, especially in the TV market.

CRTC chairman Jean-Pierre Blais said the revised deal will be evaluated on its own merits, but told Bell (TSX:BCE) and Astral (TSX:ACM.B) that the burden ``rests squarely'' on the two companies to prove their case.

"We will determine if this transaction would benefit Canadians, as well as the Canadian broadcasting system," Blais said at the opening of the hearing.

A bigger Bell wouldn't make negotiations for content difficult and isn't setting out to raise wholesale prices for distributors that carry its channels and programming, Cope said in response to concerns raised by Blais.

"We expect that, just like everyone, the competitive playing field to be level. We expect others to deal with us as we deal with them."

Cope noted that TV distributors can raise their prices on their own and for their own reasons.

He told the CRTC the application to buy Astral is quite different from the last proposal.

"We came to the important conclusion that for us to move forward, we would divest a significant number of English and French television properties, to ensure our combined market share is within acceptable thresholds," Cope said.

The new plan would see Bell sell all of Astral's English language specialty services and one of its English pay TV services, the Family channel. It would keep eight of Astral's specialty and pay channels including pay TV channel, The Movie Network and French language pay TV station, Super Ecran.

Bell also said it will sell 10 of Astral's 84 radio stations and will acquire less than half of Astral's French language specialty services.

The telecom giant also said it's making a commitment to keep all local television stations open and plans to increase air play for emerging Canadian artists to at least 25 per cent on relevant radio stations.

Astral CEO Ian Greenberg told the commission he's concerned about the growth of online like Netflix and added a combined Bell-Astral would be better able to deal with that kind of competition.

"And Netflix is just one prominent example of the kind of scale being brought to bear on Canada's industry _ challenges to our business that we believe we must meet head-on by expanding our own scope and scale," Greenberg said.

"This is what this transaction enables."

The hearings in front of the Canadian Radio-television and Telecommunications Commission will continue all week.

Organizations: BCE Inc., Canadian Radio-television and Telecommunications Commission, TSX Quebecor Inc. Cogeco Netflix

Geographic location: Quebec, Canada

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