The Canadian Radio-television and Telecommunications Commission approved an application by Astral Media Inc. to sell its pay and specialty television channels, conventional television stations and radio stations to BCE Inc. The CRTC's approval comes with a number of conditions that are necessary to uphold the public interest.
"Astral's application put forward a different approach and responded to many of our concerns" said Jean-Pierre Blais, Chairman of the CRTC. "Yet there remained a significant risk that BCE could exert its market power to limit choice and competition. To ensure the public interest is served, we are requiring BCE to invest in new Canadian programming and sell more than a dozen services, and we are putting in place a number of competitive safeguards. This will maintain a healthy and competitive broadcasting system that offers more programming choices to Canadian consumers and citizens and more opportunities for Canadian creators."
A healthy and competitive broadcasting system
The scale of the newly consolidated entity will facilitate the creation of diverse and high-quality Canadian programming in both languages and its distribution through conventional and digital media distribution channels. The CRTC is taking action to ensure Canadians reap the full benefits of this transaction. This includes making sure that Canadians have access to a healthy and competitive broadcasting system, in which independent broadcasters and distributors are treated fairly by large, integrated companies.
The application filed in agreement with the Competition Bureau included a proposal to sell 10 radio stations and 11 television services as well as certain restrictions, such as a prohibition on imposing restrictive bundling requirements on providers. The CRTC's decision builds on the Competition Bureau's assessment and includes specific measures to attenuate concerns related to competition, ownership concentration in the television and radio markets, vertical integration and the exercise of market power in the communications system.
Following the divestitures, BCE's share of the French-language television market will be 22.6 per cent. Consumers in this market will benefit from a more competitive landscape. In the English-language market, its share will be 35.8 per cent, which required a careful examination of this transaction's impact on the broadcasting system.
As a result, the Commission has put in place further measures to address potential anti-competitive behaviour, to maintain a dynamic marketplace and to ensure Canadian listeners and viewers will continue to have access to a diversity of voices in the market. Among other things, BCE must:
*adhere, as a condition of licence, to certain sections of the CRTC's code of conduct for commercial arrangements that limit potential anti-competitive behaviour and ensure fair treatment for independent programming services and distributors
*not unduly withhold non-linear rights from competing distributors, even if BCE is not exploiting such rights itself
*provide reasonable access to advertising opportunities on its radio stations to all competitors
*file with the CRTC affiliation agreements with programming services and television distributors
*enter into a CRTC-supervised dispute resolution process if an affiliation agreement is not reached 120 days before the expiry date of the existing agreement.
More choice for consumers and citizens, opportunities for creators
BCE will be required to invest $246.9 million in tangible benefits over the next seven years, which is $72 million more than it had proposed. This amount reflects the CRTC's revised value of the transaction, as well as the size and exceptional nature of the transaction.
In particular, BCE must spend $175.4 million on initiatives related to the television sector, which is equivalent to 10 per cent of the value of Astral's television services. These investments will notably result in the creation of original Canadian dramas, comedies, documentaries and award shows by independent producers. BCE will also support youth programming and initiatives designed to promote Canadian content on multiple platforms. A portion of programming expenditures will be reserved for official-language minority communities in each language.
Additionally, BCE will be required to support the development, production and promotion of Canadian feature films, notably through additional contributions to the Harold Greenberg Fund and Telefilm Canada, financial support of Canadian film festivals and initiatives to promote Canadian feature films.
BCE must also spend $71.5 million on initiatives related to the radio sector, which is equivalent to 7 per cent of the value of Astral's radio stations. The company will provide funding to not-for-profit organizations that contribute to the growth and development of the Canadian music industry, help launch the careers of emerging artists and support campus and community radio stations.
This transaction will therefore enable the Canadian creative industries to innovate and contribute to the creation of more original programming for Canadian and global audiences.
Local programming
The CRTC is also ensuring that Canadians in 29 markets across the country continue to have access to local programming on television, including local news and information. BCE must keep open all of its existing local television stations, as well as the two stations it has acquired from Astral, at least until 2024. BCE must also maintain the stations' current levels of local programming during this period.
CKGM Montréal
Finally, the CRTC is allowing BCE to operate four English-language radio stations in the Montreal market, including CKGM. Given the strong support expressed by Montreal's English-language minority community for this station, BCE will have to maintain its current sports format for at least seven years. This decision constitutes a positive measure that will ensure the needs of the community are well served.
Corporate reorganization
The CRTC also approved two corporate reorganizations - one within Astral and the other within BCE - which are necessary to finalize the transaction.
STAY WITH WWW.BROADCASTERMAGAZINE.COM FOR THE LATEST IN THIS DEVELOPING STORY