WHILE CONCEDING THAT THE various accusations and complaints levelled against it over the past weeks and months show a high level of “competitive and financial tension” evident in the Canadian TV business nowadays, Bell Canada told the CRTC Friday that this tension should not impact the approval of its purchase of Astral Media.
In its final written reply to the CRTC hearing into the purchase, Bell Canada insisted its decision to buy Astral Media and all of its radio stations, TV properties and other assets is in the public interest and that only by owning the content and the vehicles under Astral’s ownership can it effectively compete with foreign over-the-top video providers in Canada when the future is so uncertain.
“The very essence of this transaction is to better serve the consumer, the viewer, the listener and content creators,” reads the reply. “The only way this can be done effectively is for us to continue to find opportunities to work with and showcase the content of Canadian creators so that our content stands apart from all other creative output – domestic and international. This can only be accomplished by working collaboratively with all of Bell Media's broadcasting distribution undertaking (BDU) partners to disseminate our content as widely as possible.”
As readers will no doubt recall, various other BDUs told the Commission that Bell has been holding back content for distribution on the primary linear cable platform while negotiations dragged on. They also claimed Bell has not been very willing to provide “reasonable” rates for its programming to be carried on demand, online or on mobile platforms.
Noting it has invested heavily in content, spending about $7 billion to buy CTV and its proposed Astral purchase, “Bell would have to ensure that this content is distributed as widely as possible by every BDU,” adds the reply submission. “Bell's CEO George Cope has previously summarized the clear financial implications of any attempt at content foreclosure, noting that the idea ‘that Bell bought CTV to put it on Bell TV and never show it on Rogers and Videotron and Cogeco is absurd… to make a $6 billion acquisition work… we have to distribute it over four screens to 30 million Canadians through every BDU.’ This is exactly the business model that was presented to the BCE board of directors when the CTVglobemedia and Astral acquisitions were being contemplated.”
When it comes to the much-examined benefits package of the transaction, Bell notes how much it has already spent on keeping CTV 2 stations alive and the production and airing of new Cancon, to name two. Besides, the company noted its moves have spurred on growth from competitors, too. “The result of Bell's investments has been nothing short of fantastic for viewers,” says the reply. “And it unleashed a wave of competitive responses, such as Quebecor Media's (Quebecor's) accelerated launch of, and investment in, TVA Sports and Sun News; Shaw's decision to launch Global News: BC 1; and Rogers' launch of City News and FX Canada, its proposed acquisition of The Score, and the introduction of a mobile TV service to compete with Bell. All of this has led to more programming and new services than ever before; all to the benefit of consumers and content creators.”
The company addressed the complaints that its English language TV audience ownership will be too high, post-merger, as would its overall radio market dominance, insisting as it has all along that its ownership of Astral would keep it under the worrisome thresholds, especially since it intends to sell 10 radio stations. Bell says the market share data it has presented “indicate that the television and radio markets will remain competitive following the completion of the transaction.”
Bell also tackled some of the questions surrounding its benefits package and the late additions to that package (tangible and intangible), especially the $20 million for a French language news channel and its plan for a TV Everywhere solution which sounds much like the recently launched Shaw GO, which were revealed on the opening day of the public hearing.
The TVE solution, Bell noted, was talked about in broad strokes in its original application and besides, no benefits money will be directed to the multiplatform service. When it comes to the French news channel, Bell was steadfast, saying interveners have now had plenty of time to contemplate a new competitor in the market since Bell announced on September 10th it would like to apply $20 million of the benefits package to that proposed channel.
What about the complaints it is asking the Commission to approve a benefit for something that has yet to be licensed? “Opposing interveners cite a statement in the benefits policy that benefits proposals that are dependent upon the approval of an application not yet before the Commission will generally be considered ineligible,” reads the Bell reply. “Bell notes that this is a general guideline but not a strict prohibition against the acceptance of worthy benefits proposals that are dependent on future applications. This was designed to ensure that benefits were not dependent on applications that had a subjective element. There is no subjectivity here. Under the Commission's open entry Category C licensing framework, there is no uncertainty as to whether the licence for the new (French news) service will be granted – it will. Thus the realization of this benefit is not uncertain or contingent in the manner that was contemplated when the benefits policy was put into place.”
As for the much-maligned desire to take $40 million in benefits money to roll out wireless broadband in the far north? If the Commission strikes that bit down, Bell has asked the money instead go to Astral’s Harold Greenberg Fund for the creation of Canadian content.
Finally, Bell objected strenuously to the fact that many interveners seemed intent on re-arguing the 2011 Vertical Integration framework, as well as the Commission’s final offer arbitration decision between Bell and various independent BDUs this summer, two items already decided and not under review with this acquisition hearing.
“Despite these clear findings, interveners have used this process to re-argue what has already been determined by the Commission as being best for the system and for consumers, in particular. For its part, Bell Media continues to have significant concerns with the CIDG and Telus final offer arbitration processes because commercial terms were decided in a regulatory process rather than through free market negotiation. But the bottom line is that the Commission has put in place a framework that, in the public interest, strikes a balance between the needs of programmers and BDUs and industry participants now need to move forward within that framework and work together to serve customers,” reads the reply.
Plus, it added, in order to assuage any other fears – and because it was asked for this by the panel of commissioners during the public phase of the hearing in Montreal: “Bell is willing to agree to a condition of licence requiring compliance with the VI Code of Conduct, as amended from time to time. This commitment should lay to rest competitors' claims that Bell does not respect the rules. We do and we always will.”
According to several sources, the Commission is pushing to have its final decision on this purchase out in early November, prior to the CBC license renewal hearing scheduled to begin November 19.
