Just as Astral is taking its market domination concerns about Cogeco to the CRTC, Cogeco is raising its own similar concerns about telecom giant BCE. It has said it is seeking specific government safeguards to prevent abuses in the market if approval is given to the acquisition of CTVglobemedia by BCE.
In a brief Tuesday to the CRTC, Cogeco said the planned takeover “would allow the BCE-CTVglobemedia conglomerate to disadvantage competitors in the Canadian communications industry and potentially inflate prices for services to the detriment of Canadian consumers.”
In its submission, the Montreal-based cable and media company asked to appear at CRTC public hearings to review the proposed transaction. The hearing is scheduled to begin in Gatineau, Que., on Feb. 1.
“Vertical integration raises a number of concerns regarding the relationships between the owners of content and the owners of distribution networks,” Cogeco president and CEO Louis Audet said in a news release outlining his company’s intervention.
“The proposed level of concentration and vertical integration that would result from the proposed transaction risks compromising the CRTC’s fundamental objectives for the Canadian communications industry of universal access to services, diversity of choice and content and ultimately affordable prices for Canadian consumers.”
In its brief, Cogeco Cable provides a comprehensive review of the consequences of the common ownership of BCE and CTVglobemedia, which would create an entity controlling both a large number of television and content services, including sports services and programs, and a major share of the distribution of such services and content across all wired and wireless distribution platforms in the Canadian market.
Cogeco said this would allow it to “exercise undue market power in the Canadian communications industry.”
BCE announced in September it planned to acquire the rest of the CTV assets that it doesn’t already own in a $1.3-billion deal expected to close in the second quarter of 2011.
Cogeco says that if the CRTC approves the transaction, specific regulatory controls and safeguards would immediately be necessary to avoid any abuse of the new conglomerate’s dominant market position.
Accordingly, Cogeco Cable asks the CRTC to strengthen and supplement a number of safeguards under the current CRTC regulatory framework, including:
• Prohibiting exclusive distribution of programs between vertically integrated entities
• Expanding the reverse onus provisions in case of alleged undue preference or disadvantage to all broadcasting programming services and across all distribution platforms
• Implementing structural safeguards to protect competitively sensitive information of competitors of BCE provided to either CTVglobemedia or BCE in connection with programming service supply contracts with either party
• Implementing additional reporting and disclosure provisions to allow the CRTC and parties to identify undue preference or other abuses by BCE-CTVglobemedia of its dominant market position.
“It is essential that the CRTC take immediate steps to allow non-vertically integrated distributors to remain competitive and to allow their subscribers to continue receiving TV channels and content under fair, non-discriminatory conditions, regardless of which wired or wireless distribution service provider they choose,” Audet said.
And it says BCE-CTVglobemedia should clearly forgo any new fees for the carriage of CTVglobemedia’s conventional television signals “given the size of the new conglomerate, the scope of its financial resources and the numerous distribution platforms available to it, and the risk of abuse leading to inflated prices for consumers.”
