The CRTC has denied the application by BCE Inc., on behalf of Astral Media inc., for authority to change the effective control of Astral’s broadcasting undertakings. The Commission is not convinced that the transaction would provide significant and unequivocal benefits to the Canadian broadcasting system and to Canadians sufficient to outweigh the concerns related to competition, ownership concentration in television and radio, vertical integration and the exercise of market power.
In addition, BCE filed applications for authority to effect corporate reorganizations and to convert CKGM Montréal from an English- to a French-language radio station. The applicant indicated that the related applications were all contingent on approval of the proposed change of effective control of Astral’s broadcasting undertakings. In light of the Commission’s decision to deny the change of effective control, the Commission also denies the related applications.
The issues raised by this application involve many intersecting objectives and policies and speak directly to the health and sustainability of the Canadian broadcasting system. A transaction of this magnitude goes beyond an operational decision on a change in ownership; indeed, its impacts would shape the structure of the industry over the coming years.
The proposed transaction would not only remove the last major independent, non-integrated broadcaster from the system, but transfer its undertakings to the largest vertically integrated broadcaster and telecommunications service provider in Canada. With the combination of the largest and third largest participants in discretionary television services (by revenue), one entity would control more than 63% of revenues from French-language discretionary services. This would represent more than five times the revenues generated by the next largest competitor in that market. BCE would also have a stake in five of the top ten English- and French-language discretionary services (by revenues) as well as a significant position in sports, film and other premium programming in both languages. In radio, the transaction would result in the combination of the largest and fourth largest broadcasters. As a result, BCE would control more than a quarter of all commercial radio revenues in Canada, more than the second and third largest radio broadcasters’ revenues combined.
The Commission notes that a significant amount of discussion centred on the thresholds set out in the DoV policy. These thresholds are intended to help guide Commission analysis of horizontal media consolidation when reviewing applications for changes in effective control – they are not determinative of the outcome of Commission deliberations. For clarity, the Commission considers that “total television share” is based on viewing to Canadian commercial television services, consistent with the Commission’s Communications Monitoring Report (CMR) and past practice. While the Commission recognizes that non-Canadian services form part of the broadcasting environment, its mandate is to support a healthy, diverse Canadian system. Furthermore, tuning to popular U.S. programming is already included in viewing to Canadian services since U.S. programming is broadcast on Canadian services, especially in the English-language market. Given that the DoV policy was intended to guide Commission decisions on transfers of ownership, the Commission does not consider it relevant to include services over whose ownership it does not have direct jurisdiction.
Based on the figures in the 2024 CMR, in the English-language market, BCE’s services captured 33.7% of viewing to Canadian services, Astral’s services garnered 6.0% and the joint ventures another 3.0%. The combined BCE/Astral viewing share, including joint ventures, would therefore be 42.7%. In the French-language market, the combined viewing to BCE/Astral services would represent 24.9% of viewing to Canadian services, with viewing to the joint ventures representing an additional 8.2%, for a total viewing share of 33.1%. The Commission considers that, in the case of the joint ventures, even in the absence of clear cut control, it would be unreasonable to separate a 50% ownership position from the significant role in the operation and management of the services that such a party would possess. Moreover, a 50% owner could benefit from significant participation in decisions relating to the distribution of these services. Therefore, the Commission has included viewing to the joint ventures in its calculation. Accordingly, BCE/Astral’s combined viewing share in the French-language market would fall just below the 35% threshold, and the share in the English-language market would require “close examination” pursuant to the DoV policy. The Commission underscores, however, that the DoV policy applies “as a general rule,” “barring other policy concerns” and subject to the status of policies adopted pursuant to section 6 of the Act, as indicated above.
The Commission notes that BCE submitted that its viewing shares should pose no concerns, even in the English-language market, particularly given that the transaction involves no news and information services and would have little impact on advertising. However, in the Commission’s view, the proposed transaction warrants close scrutiny due to concentration of ownership and market dominance in television and radio in both English- and French-language markets. In addition, given the size and nature of the proposed transaction, the Commission considers that it should rely on multiple indicators of market power, competition and ownership concentration, rather than be limited to the television market share thresholds set out in the DoV policy.
In English-language television, a combined BCE/Astral would control an unprecedented amount of total revenues and viewing. In addition, BCE would increase its already significant share of Category A discretionary services which, as must-carry services, would give BCE considerable negotiating power with other distributors. The acquisition of Astral would add popular and successful discretionary television services, resulting in an increased presence by BCE in the most attractive genres – movies, sports and premium content – that drive a significant component of demand for Canadian television services. These genres are consistently popular with Canadian viewers and feature exclusive and/or live programming unavailable elsewhere. Finally, the ability to negotiate for every program rights window with programming suppliers and advertisers, when combined with BCE’s size and ability to “bulk buy,” could ultimately reduce, rather than increase competition.
In French-language television, the addition of Astral’s large portfolio to the successful sports services held by BCE would increase the already significant level of concentration in discretionary services. The Commission is cognizant of the current makeup of the French-language television market, which includes Quebecor, a vertically integrated entity with significant market share in both programming and distribution services. BCE submitted that Canadians are best served by competition, but the Commission notes that Astral is currently a significant competitor in the French-language television market. In addition, BCE as a vertically integrated company already possesses a distribution, wireless and wireline infrastructure. The Commission is of the view that BCE did not demonstrate how the proposed transaction, which would result in the vast majority of French-language programming services being held by two large, vertically integrated competitors, would invigorate competition. Moreover, BCE’s proposal did not adequately address the potential negative impact that this transaction could have on independent entities.
With respect to radio, the Commission considers the timing and lack of details of BCE’s divestiture plan did not afford an opportunity for interveners to comment meaningfully. While the plan respected the letter of the COP, the decision to include certain Bell Media radio stations in the divestiture plan can be viewed as an attempt by BCE to trade underperforming stations for successful ones, which would not provide a benefit to the Canadian broadcasting system or create the conditions for healthy competition. Selling less profitable stations could reinforce BCE’s position in these markets, make the entrance of new competitors more difficult and reduce the total tangible benefits paid on Astral’s radio stations.
As noted above, applicants must clearly demonstrate significant and unequivocal tangible and intangible benefits. BCE submitted that the proposed transaction would, in addition to enhancing competition in the Canadian broadcasting system, provide greater scale enabling enhanced multi-platform delivery of broadcasting services. These intangible benefits would, according to BCE, be accompanied by an unprecedented amount of tangible benefits.
The tangible benefits package proposed by BCE would undoubtedly result in significant investment in the Canadian broadcasting system. The Commission notes however that certain initiatives fall outside the guidelines established in Commission policy and general practice. In particular, BCE did not demonstrate that the Northwestel broadband proposal would benefit the broadcasting system. In addition, this proposal, as well as that relating to a new Category C news service, would not primarily benefit third parties. Further, BCE did not demonstrate that the programming commemorating Canada’s 150th anniversary celebration would not be undertaken in the absence of benefits funding. The disqualification of these initiatives would reduce the amount of BCE’s proposed television tangible benefits to approximately 6% of the value of the television assets. In addition, the benefits package did not satisfy the Commission’s general expectation that 85% of benefits should be directed to on-screen initiatives. Finally, the Commission notes that for several radio initiatives, BCE failed to provide adequate explanation of the initiatives and how they would be consistent with Commission policy.
As noted above, the applicant’s burden to prove that the transaction is in the public interest extends beyond the tangible benefits requirement. While much of the discussion at the public hearing focused on television, the Commission notes that BCE, aside from its proposed tangible benefits, made no firm commitments regarding additional local and spoken word radio programming, or promotion and airplay of emerging Canadian artists. Further, BCE did not provide details on its plan to invest in Astral’s radio operations and news. As such, the Commission is not satisfied that BCE discharged its burden to demonstrate how the combination of the Bell Media and Astral radio stations would be beneficial to Canadian radio listeners and the radio sector as a whole.
With respect to intangible benefits to the television broadcasting system, while BCE’s proposal for a new multi-platform on-demand service generated significant discussion, BCE did not adequately demonstrate that the acquisition of Astral is a necessary prerequisite to the creation of such a service. Several BDUs already offer similar “TV anywhere” services to their subscribers, and programming from Astral’s services is available on diverse platforms. In addition, BCE explained that this type of service is “required to remain competitive,” raising questions about the initiative’s dependence on approval of this transaction.
BCE also argued that the scale it would possess following the proposed transaction is necessary to compete with international unlicensed services. While the Commission is generally supportive of consolidation and scale, BCE already holds a significant position in the Canadian broadcasting system. Further, BCE did not demonstrate that it needs to be bigger to compete with foreign services. 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. In addition, the Commission noted in its report Navigating Convergence II, published August 2024, that based on available data, Internet platforms continue to be complementary to the traditional broadcasting system. Finally, Canadian broadcasters benefit from significant protections under the current regulatory regime, including simultaneous substitution, genre protection and public funding and support for program development.
The Commission considers that convergence, integration and scale may lead to a point at which the size of an entity on a national level becomes so large that it hinders effective and healthy competition among Canadian broadcasters. The Commission, as discussed below, considers that a transaction of this magnitude would adversely affect competition and diversity in the Canadian broadcasting system and thereby threaten its ability to achieve the policy objectives set out in the Act. The Commission is mindful that a healthy communications system also requires entities of various sizes that are able to compete and innovate in a fair environment.
While BCE submitted that it would be in its own best interest to make content available as widely as possible, the Commission shares the concerns of many interveners about the ability of a distributor with the content properties of a combined BCE/Astral to exert market power in an anti-competitive manner. These concerns are based on the business incentive of a vertically integrated entity to give an undue preference to its own distribution facilities by restricting access to its programming services or offering them at above market rates to its competitors. The market power of a combined BCE/Astral could threaten the availability of diverse programming for Canadians and endanger the ability of distribution undertakings to deliver programming at affordable rates and on reasonable terms on multiple platforms.
While BCE agreed to accept the VI Code of Conduct as a condition of licence, it did not propose or clearly accept any other possible remedy to address these concerns, including functional separation or divestiture. The Commission considers that the broad participation of a combined BCE/Astral in popular genres and services, in must-carry discretionary services, its access to popular conventional programming and national distribution networks would give it the incentive and the ability to unduly exert market power to the disadvantage of its competitors. In this context, the Commission considers that, in the event of an approval, BCE’s level of market power would be so significant that the VI framework would be insufficient to effectively address disputes and facilitate program availability and distribution.
While certain interveners proposed safeguards to address these concerns in the event of an approval, the significance and breadth of the broadcasting assets of a combined BCE/Astral are such that safeguards to properly supervise this level of market power would be extensive and unduly burdensome. The Commission does not consider that such a level of interference would be consistent with the regulatory policy set out in section 5(2) of the Act. The Commission further considers that the onus was on BCE to propose adequate safeguards to address these concerns. In this case, BCE failed to do so.
The Commission has reviewed BCE’s proposal, as well as the comments received in response to Broadcasting Notices of Consultation 2024-370, 2024-370-1 and 2024-370-2. As noted above, the Commission must evaluate applications for a change in effective control against the objectives set out in the Act, as well as its own policies and regulations. The Commission considers that the concerns related to competition, ownership concentration in television and radio, vertical integration and the exercise of market power are very substantial and fatal to the application.
The Commission finds that BCE has not discharged its burden and demonstrated that, on balance, this transaction is in the public interest. The benefits proposed would advantage BCE and its services, but the Commission is not persuaded that the transaction would provide significant and unequivocal benefits to the Canadian broadcasting system and to Canadians sufficient to outweigh the concerns described above.
Accordingly, the Commission denies the application by BCE Inc., on behalf of Astral Media inc., to change the effective control of Astral and its licensed broadcasting undertakings so that it is exercised by BCE (application 2024-0516-2). In light of its decision, the Commission has not made determinations on other aspects of BCE’s application, including the value of the transaction.
The Commission notes the objections of numerous interveners with respect to the application by Bell Media Inc. and 7550413 Canada Inc., partners in a general partnership carrying on business as Bell Media Canada Radio Partnership, to convert CKGM Montréal from an English-language to a French-language commercial radio programming undertaking (application 2024-0573-2). These objections related to, among other things, the integrity of the Commission’s licensing process and the loss of an English-language broadcasting service to an official language minority community. At the public hearing, BCE indicated that in the event the proposed transaction was denied, it would continue to operate CKGM Montréal as an English-language station. As a result, the Commission denies this application. Therefore, the licensee will continue to operate CKGM Montréal under the terms and conditions in effect under its current licence.
Similarly, the Commission denies the following related applications, which BCE indicated were contingent on approval of the proposed change of control of Astral:
-applications by BCE Inc., on behalf of certain of its licensed broadcasting subsidiaries, to effect a multi-step corporate reorganization involving the transfer of the assets of 33 Bell Media radio stations to seven partnerships or corporations, requiring the issuance of new broadcasting licences (applications 2024-0701-9 and 2024-0736-6); and
-application by BCE Inc., on behalf of Astral Media inc. and certain of its licensed broadcasting subsidiaries, to effect a corporate reorganization involving the transfer of the assets of certain broadcasting undertakings to companies to be incorporated, requiring the issuance of new broadcasting licences (application 2024-0735-8).
Other matters
The Commission received more than 9,700 interventions, supporting, commenting on and opposing the transaction. These interventions were from broadcasters, distributors, independent producers and creative groups, citizen and consumer advocacy groups as well as from individuals from all parts of Canada.
The review of ownership transactions is an essential element of the Commission’s regulatory and supervisory mandate under the Broadcasting Act . Since the Commission does not solicit competitive applications for changes in effective control of broadcasting undertakings, the onus is on the applicant to demonstrate that approval is in the public interest, that the benefits of the transaction are commensurate with the size and nature of the transaction, and that the application represents the best possible proposal in the circumstances.[1] This analysis is of particular importance when dealing with a large transaction that has the potential to reshape the Canadian broadcasting system.
In addition, the Commission must be assured that approval of a proposed ownership transaction will not impede the ability or willingness of the licensee to meet its obligations under the Act. These obligations include those that arise from conditions of licence, regulations, or directions made by the Governor in Council pursuant to the Act.
The Commission’s mandate is to regulate and supervise all aspects of the Canadian broadcasting system in the public interest. The public interest is reflected in the numerous objectives of the Act and of Canadian broadcasting policy set out in section 3(1).[5] When reviewing this ownership transaction, relevant Canadian broadcasting policy provisions include the following:
The Canadian broadcasting system, operating primarily in the English and French languages and comprising public, private and community elements, makes use of radio frequencies that are public property and provides, through its programming, a public service essential to the maintenance and enhancement of national identity and cultural sovereignty .
The Canadian broadcasting system should:
-serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada, [section 3(1)(d)(i)], and
-encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view; [section 3(1)(d)(ii)]
-the programming providing by the Canadian broadcasting system should (i) be varied and comprehensive...(ii) be drawn from local, regional, national and international sources...(iv) provide a reasonable opportunity for the public to be exposed to the expression of differing view on matters of public concern, and (v) include a significant contribution from the Canadian independent production sector. [section 3(1)(i)]
In addition, since this transaction raised concerns regarding access to programming services offered by distribution undertakings, the Commission considered sections of the Act. These provisions provide that distribution undertakings:
-should provide efficient delivery of programming at affordable rates, using the most effective technologies available at reasonable cost and
-should, where programming services are supplied to them by broadcasting undertakings pursuant to contractual arrangements, provide reasonable terms for the carriage, packaging and retailing of those programming services. [
In ownership applications involving television and radio undertakings, applicants must demonstrate that the transaction would yield significant and unequivocal benefits for the Canadian broadcasting system. This objective is articulated in the Commission’s tangible benefits policy, which established that contributions proposed as tangible benefits should represent a certain percentage of the value of the transaction as a substitute for a competitive licensing process.
The Commission’s decision on whether a proposed transaction is in the public interest takes into account a wide set of factors as reflected in the Act, including the nature of programming and service to the communities involved, as well as regional, social, cultural, economic and financial considerations. The Commission therefore considers that an appropriate tangible benefits package is only part of the applicant’s obligation to demonstrate that the transaction is in the public interest. In rendering a decision, the Commission must be persuaded that, on balance, the proposed transaction benefits the Canadian broadcasting system.
The Commission has assessed the proposed transaction in light of the regulatory framework set out above and has identified the following issues:
-potential impacts on the Canadian broadcasting system; and
-proposed benefits of the transaction for the Canadian broadcasting system.
BCE submitted that, in general, the proposed transaction would invigorate competition in French-language radio and television and position English-language broadcasting to compete against threats from non-Canadian services. Moreover, BCE stated that the proposed transaction is consistent with all Commission policies relevant to ownership transactions, including the DoV policy, the VI framework and the VI Code of Conduct.
BCE reviewed its post-transaction share of television viewing, pursuant to the DoV policy relating to the common ownership of discretionary television services, set out at paragraph 87. This policy provides that, in general, the Commission would process expeditiously applications that result in one person’s control of less than 35% of the “total television audience share,” would carefully examine transactions that would result in the control by one person of between 35% and 45% of the total television audience share, but would not approve applications that would result in one person’s control of more than 45% of that share.
BCE submitted that while the Commission was clear that audiences are measured separately, on a national basis, for both English- and French-language markets, the DoV policy did not include the specific methodology that should be used to calculate “total television audience share.” BCE argued that this share must include viewing to non-Canadian services, submitting that the “voices” reaching Canadians include non-Canadian services, that these services are distributed by BDUs pursuant to Commission authorization and that inclusion of these services is consistent with Competition Bureau guidelines regarding market definition. Similarly, BCE argued that services equally owned by two parties (joint ventures) should be excluded from any calculation of viewing share.
BCE submitted that, when viewing to non-Canadian services is included, the BCE/Astral post-transaction viewing share would be 33.5% in the English-language market and 24.4% in the French-language market. BCE further submitted that even excluding non-Canadian services, the proposed transaction raises no issues.
In addition, BCE argued that the proposed transaction is fully compliant with the analytical framework set out at paragraph 89 of the DoV policy. Specifically, BCE noted that there will be no effect on discretionary services offering news and public affairs programming, that the VI framework protects access to programming services by BDUs, and that both Astral and Bell Media have signed comprehensive terms of trade with the Canadian Media Production Association. In addition, Astral has a similar agreement in place with the Association des Producteurs de films et de télévision du Québec.
With regard to radio, BCE proposed to divest 10 stations and to convert CKGM Montréal from an English- to a French-language station in order to comply with the common ownership policy for radio (COP), which was affirmed in the DoV policy and clarified in Broadcasting Information Bulletin 2024-341. BCE argued that the COP is a sufficient safeguard to ensure a diversity of voices in the private element, given that radio is primarily a local business.
In the Quebec market, BCE argued that it would bring greater programming diversity, choice and innovation to consumers through increased competition with Quebecor Media Inc. (Quebecor). Within that province, Quebecor is the largest cable provider, controls nearly 30% of television viewing, and is the largest vertically integrated media enterprise, with significant interests in Internet access, home telephone and mobile services.
With respect to concerns around the combination of BCE’s distribution arm with the programming assets of Bell Media and those of Astral, BCE submitted that the VI framework is more than sufficient to address any issues. According to BCE, it has and will continue to respect the rules set out in the VI framework, which in its view will constrain any potential market power. BCE also submitted that it does not make logical or commercial sense to withhold content from other BDUs, as to do so would jeopardize its revenues and its ability to acquire rights to premium content. Notwithstanding these assertions, BCE stated that it was prepared to accept a condition of licence requiring compliance with the VI Code of Conduct, in order to satisfy any remaining concerns.
Consumer groups, including Union des Consommateurs and Option Consommateur, and individual Canadians submitted that the proposed transaction does in fact pose disadvantages or risks. These interveners noted that there is little evidence that the trend of the past decade toward greater consolidation and vertical integration has provided product quality or innovation benefits to Canadian consumers of television services. In their opinion, any efficiency gained from vertical integration has not flowed back to consumers either through price reductions for subscribers or through increased choice and improved service.