MONTREAL – Astral Radio is appealing the CRTC’s decision to allow Cogeco to maintain a third radio station in the Montreal market, claiming the move “disrupts the competitive equilibrium”.
In a motion filed with the Federal Court of Appeal on Tuesday, Astral called the decision “prejudicial”, and said that it “puts an end to nearly twelve years of consistent application” of the common ownership policy. The common ownership policy limits ownership to two FM stations of the same language in a market. The Commission let Cogeco keep a third FM station in Montreal as part of its overall approval of Cogeco’s plan to purchase of Corus’ Quebec radio assets.
"The sudden lack of predictability in the application of the CRTC policy penalizes all broadcasters which in the past decided not to pursue business opportunities in order to abide by the policy as formulated and as consistently applied," said Claude Laflamme, Astral’s VP of corporate and regulatory affairs, in a statement.
Astral said in its motion that the CRTC “erred in law by not following the standard regulatory proceeding to review the common ownership policy", and "acted in an arbitrary and unreasonable manner”. It has also asked the Court to suspend the execution of the CRTC decision until final judgement on the appeal.
Cogeco responded by pledging to “vigorously oppose” Astral’s applications which it described as “without merit" and "a clear attempt to prolong Astral’s dominant position in all Quebec commercial radio markets”. Rene Guimond, Cogeco’s VP of public affairs and communications, said that he was “surprised and disappointed” by Astral’s decision to challenge the CRTC’s decision.
"The private commercial interests of Astral cannot be allowed to stand in the way of promoting more effective and sustainable competition in the Quebec radio industry, the re-launch of radio stations that compete with Astral in Quebec’s regions whose survival is threatened, the creation of a new independent source of information with Cogeco News, and nearly $9 million in benefits for the broadcasting system as a whole and for the communities served by the stations as a result of this transaction”, he said in a statement on Wednesday.
Cogeco confirmed its intention to complete the transaction, which is expected to close on February 1, 2011. The decision to authorize the appeal before the Federal Court is expected over the coming months.
