Things just got a lot more integrated in the Canadian broadcasting landscape.
Capping a process that formally began last September, the Canadian Radio-television and Telecommunications Commission announced its approval of BCE’s acquisition of CTVglobemedia yesterday. The telecom will now take complete control of CTVglobemedia through a $1.3 billion purchase.
During the public CRTC hearing on the BCE transaction, numerous parties worried about the repercussions of a huge telecom buying the country’s largest private broadcaster. There was concern, for instance, that BCE would offer some programming only to its own mobile subscribers.
CRTC chairman Konrad von Finckenstein said in a release yesterday that CRTC was pleased BCE addressed questions surrounding how the transaction would impact the vitality of the Canadian broadcasting system.
The CRTC approval comes with a condition. “BCE will provide stability to the CTV Television Network,” said von Finckenstein. “It will also invest $245 million in the Canadian broadcasting system, of which more than $140 million will be allocated to new Canadian television and radio programming.”
Under CRTC policy, broadcasting sector transactions involving ownership require the buyer to make certain commitments to fund initiatives to improve the broadcasting system. As such, BCE is required to spend the $245 million over the next seven years and $60 million of that funding has been designated to improving access to local programming through the carriage of “at least 43 additional television services, including local, and regional conventional stations and independent community stations.”
Other funds are slated to go towards commissioning independently produced shows that promote Canadian culture, and enhancing local news programming in several major cities, including Winnipeg, Edmonton and Vancouver.
In June, the CRTC will hold a public hearing to establish whether specific rules are needed “to guide commercial negotiations for programming rights in this new market reality” of widespread convergence and vertical integration in Canada’s broadcasting industry.
Until then, the CRTC won’t allow BCE to enter into new exclusive agreements that would prevent it from “making the rights to its television programming available to competitors for broadcast on mobile devices and over the internet.”
The regulator added that it has a “firm expectation that other integrated communications companies will abide by this moratorium as well.”
Telus welcomed the moratorium on anti-competitive behaviour, although the company said it was incomplete.
“This moratorium is an excellent starting point for the broader debate which will take place in the upcoming vertical integration policy hearing in June,” said Michael Hennessy, Telus’ regulatory affairs vice-president.
