GATINEAU – There's no Say No To Bell campaign this time around, but most of Bell's major competitors have again told the CRTC they are strongly against the takeover of Astral Media by BCE, even with the new promises to divest English-language TV assets.
Quebecor, Rogers and Telus all said they were against the deal in submissions sent to the Commission on Friday, the deadline for interventions in the new application for change of ownership.
Quebecor Media, which owns the Vidéotron cable provider and broadcaster TVA, "asks the Commission to categorically refuse the approval of the revised application," saying it would be bad for the entire broadcasting industry. "The only beneficiaries from the transaction … will be Astral's shareholders and the monopolistic mentality of BCE management," it said in its submission.
The Quebec media giant said Bell would have much too big a chunk of the French-language specialty channel market, with 43% of viewing hours, 56% of subscription revenue and 59% of advertising revenue, versus only 17%, 8% and 10% respectively for Quebecor, whose province-leading share of Quebec television viewing comes mainly from TVA.
Quebecor also said that even with the divestments of Category A services like MusiquePlus, Séries+ and Teletoon, which Bell says levels the field for these highly-prized genre-protected channels, Bell would still be left with others like Canal D, Canal Vie, Vrak.TV, Ztélé and premium pay channel Super Écran. These channels would also maintain the benefit of distribution on analog, or basic, cable, while Quebecor's specialty channels are mainly digital and discretionary, and few have genre protections.
Quebecor criticized the Competition Bureau's approval of the deal, saying the divestments promised represent only 1% of the combined BCE-Astral's revenues and will be "ineffective."
However, should the deal be approved anyway, Quebecor laid out three proposals it said must be enacted to protect competition:
First, it called for the complete elimination of genre protection for specialty services in Canada, a demand Quebecor has made before to the Commission. "It is the interests of the Canadian television viewer, not the profits of BCE-Astral, that should be at the heart of policies of the Commission and of regulations," Quebecor said. The genre-protected French-language services that Bell would be acquiring from Astral have profit margins from 30% to 50%.
Super Écran, which Quebecor calls the "most flagrant example" of the outdated protectionist model, has filed a complaint with the Commission against Quebecor's new Netflix-like Illico Club Unlimited. Astral it says violates Super Écran's genre protection because it distributes movies over Vidéotron's video-on-demand service.
Second, Quebecor said the CRTC must forbid pay TV services from signing exclusive content deals, as it does for video-on-demand services.
Third, it said the Regulator should pre-emptively disallow a possible acquisition of the V television network by Bell. Rumours of a purchase of Quebec's other conventional OTA network, currently owned by Remstar, have circulated for a long time, but no deal has been announced. Any such acquisition would need CRTC approval, but Quebecor said the commission should demand to know Bell's intentions and should impose a condition of licence banning it from acquiring a conventional French-language television network in the future.
Telus also opposed the revised acquisition proposal. "Bell admittedly brings to the table a better crafted application," Telus said in its submission, “but that doesn't mean that the application is in the public interest."
Telus criticized the CRTC's "very silo-based approach" to regulation, which it said looks at individual broadcasting assets instead of overall market power. It says changes to the Commission's vertical integration policy are needed regardless of the outcome of this hearing because it does not sufficiently discourage anticompetitive practices like content exclusivity deals for network providers.
Telus, of course, is the lone large telco and major incumbent wireless provider that does not own broadcasting or other content assets. Like Quebecor, Telus said it is concerned about the market power Bell would have in the highly popular and profitable sports and movies genres, and says the Competition Bureau's approval of the deal does not go far enough to limit anti-competitive practices. Telus also says the CRTC should consider Astral's large outdoor advertising business as a contributor to Bell's control of media, similar to the way it considers newspapers in setting limits for cross-media ownership.
Telus argued that vertical integration is already causing anti-competitive practices that are detrimental to Telus, telling the CRTC it was denied an opportunity to advertise its Optik TV service on Global television, that a Global TV news report discriminated against it in favour of Shaw, and even said some reporters have told the company they can't cover stories about charitable activities in which Telus is a donor or sponsor.
Finally, Telus attacked the main reasoning behind Bell's acquisition, that it needs Astral's content to fight back against over-the-top video services like Netflix. Telus said it has done plenty of innovation in content delivery on its own despite not owning any content. Failing a complete rejection, Telus proposed strict measures to prevent anti-competitive actions by Bell, including a code of conduct that would require Bell to offer all content on commercially reasonable terms, force it to offer advertising to competing distributors, and prevent it from getting preferential treatment from its news operations.
Rogers, while opposed to the application, left the door open to supporting it, but only if Bell divests all of Astral's English-language specialty TV assets, particularly The Movie Network. This was also Rogers’ position with Bell/Astral I. Barring that, it demanded a new special safeguard be imposed requiring Bell to offer non-linear content rights to third parties even if they have not come to a commercial agreement.
"There is nothing in the new application that adequately addresses concerns about BCE’s growing market power," the Rogers intervention reads.
Both Rogers and Telus devoted much of their interventions to Bell's current practices when negotiating content deals with distributors, which argued show Bell is already too big and abusing its power to set unreasonable terms on competitors for access to Bell Media content. "BCE is the only entity operating in Canada today that has the ability to leverage its content to gain a significant competitive advantage for its distribution businesses," Rogers said.
Smaller distributors, including the Canadian Cable Systems Alliance, also lined up against the proposal because of the way Bell deals with competing distributors.
Independent cable operator Steven Savola of Conuma Cable of Gold River, B.C. submitted a stinging intervention. “I have challenged Bell on several issues in affiliate relations, bundling and packaging services and have been persecuted for it,” writes Savola. “I am the only small system that I know of that is continually audited because I have tried to stand up to what is wrong. This is abuse of power and my big question is who audits the big guys? They hide and transfer money in co-op dollars, gifts, hockey passes, marketing dollars and discounts on signals for large subscriber counts. There is one more way Bell has tilted the market place.
“Our present contracts with ALL Bell services have forced us to re bundle our services in the past few months. This has increased the signal fee to our selves,” he continued. “The Bell contracts don’t even allow us to carry the same services in the same packages throughout all the systems we operate. The contracts from Bell are so stringent in packaging and bundling that the majority of small systems all have pretty much the same channel line up (small variations) throughout Canada. The only real differences are analogue only systems which are going to be dead or convert and face the agony of Bell during their migration. I congratulate Bell on a well conspired marketing plan.”
Trade associations including the Writers Guild of Canada, the Directors Guild of Canada, the Canadian Media Production Association, the Association des producers de films et de télévision du Québec, ACTRA and the Canadian Independent Music Association offered conditional support for the deal, provided the CRTC did a proper valuation of the broadcasting assets, which Quebecor and Telus also argued were purposefully undervalued compared to non-broadcasting assets in order to lower the amount of tangible benefits Bell would have to pay.
The 834 interventions published by Monday also include dozens of letters from producers, advertisers and other people and groups with business relationships with BCE and Astral endorsing the deal, plus more than 16,000 signatories to a Bell petition to "Save TSN 690." They support a request for an exemption to the common ownership policy allowing Bell to retain radio station CKGM in Montreal after it acquires Astral's three English-language stations in that market.
The hearing begins May 6 in Montreal.
