MONTREAL ? With a three-hour break mid-day (we were told someone had to go to a funeral, so quit complaining&), yesterday?s long hearing day featured a ton of back and forth between Bell executives and the panel of CRTC commissioners.
Long lovely narratives explaining each exchange would be nice but time restraints mean we?re going for the bullets only of some of the highlights. We think we?ve hit some of the main points with our bulleted rundown here.
* In his first public appearance as chair of the CRTC, Jean-Pierre Blais acquitted himself well, nailing a few biting comments throughout the day. However, he opened with some broad strokes, asking Bell executives what they think the TV industry?s future will look like. Those executives used a lot of words to say, basically, ?we know it?s multiplatform, that we need to be big to afford popular, costly content but beyond that, no idea.?
Bell Canada CEO George Cope talked about the four screen experience the company is able to deliver on now, adding ?I?m sure there are people out there today inventing whatever the fifth screen will be.? Cope also noted that Bell?s vertically integrated strategy is really a follow-on to what the cable companies such as Rogers, Shaw and Québecor had already started. ?We wanted to make sure we were in a competitive position in what has become a very vertically integrated industry in Canada,? said Cope.
The Bell and Astral executives also noted that massive global players like Apple, Google and Amazon have the financial wherewithal to cause massive injury to Canadian media companies if they so choose and that Astral just won?t be big enough soon to compete on price for the high-end content to which they now own the rights. When it came down to the rationale for the sale, Astral founder Ian Greenberg said he was worried ?about Astral not being able to compete against global TV players any more,? and chose Bell as a suitor because (besides the price paid) ?it was the only company with the financial ability offering to buy it at the terms we set& keeping the integrity of the company, not splitting up the English and French assets,? and to keep as many of the employees as possible.
* Chairman Blais made sure the voice of the consumer was heard at during the hearing as well, asking Bell what it has to say to the thousands who were worried enough to officially complain to the CRTC about the purchase. Cope mostly dismissed the complaints, saying they were not representative of most Canadians and simply the result of the Say No To Bell PR campaign mounted by Quebecor, Cogeco and EastLink. ?The numbers you talk about, given the size of the campaign has been run, it doesn?t look to us that millions of Canadians are not in favour of this transaction,? responded Cope. ?It was a heavy-handed campaign that said the most ridiculous things,? added Bell?s regulatory chief Mirko Bibic.
The chair continued, however, reading a couple of individual consumer complaints to the Bell executives from Canadians who are clearly not Bell fans. Bell Media president Kevin Crull noted that perhaps the PR campaign had tainted the knowledge base of those particular Canadians and others and ?they should be informed accurately.?
?We don?t apply a test to consumers on the broadcasting industry,? Blais shot back. ?They could come to a hearing& they are welcome here& I?m concerned that somehow we are not doing a good enough job in explaining to them what their choices are and what the reality is ? and it?s your role as a media company in helping them understand what their choices are.?
* The chairman asked Bell executives pointedly what assets ? beyond the radio stations the company has committed to sell ? it would be willing to part with should the CRTC decide that a combined Bell-Astral is just too big. Cope told Blais that divestiture of any of the TV assets was not even considered by anyone involved in the deal. ?We would be very surprised and disappointed if that would be a conclusion,? said the CEO.
However, if it was decided that Bell had to sell something or things for the deal to go ahead, Cope asked that Bell be able to pick what it sold, adding it may well choose to hang on to Astral?s assets and spin off some existing Bell Media divisions. ?We would like to have the ability to decide what that divestiture should be,? he said.
The chair also asked about placing a bit of a wall in the organization to try and make sure the French language assets are run autonomously where the company would set up some structural separation between Bell Media?s English and French divisions.
Cope was pretty clear on what he thought of that saying ?we would have had no interest in the acquisition? if that had been a condition, noting as a CEO he is responsible for running a company as efficiently as possible and such a manufactured division is just bad business.
* As expected, Bell was also asked about its exclusive on multiplatform Olympics content for the 2010 and 2012 Games ? and about why so few mobile carriers offer other Bell Media content to their customers via smart phones. The Olympics deal dates back to the original 2004 content deal, which pre-dates the 2011 vertical integration rules prohibiting such exclusives, said Bibic in explaining that bit.
However, when it comes to the rest of Bell?s content on mobile, Cope believes this is a manufactured crisis. Bell currently offers a package where its customers can get 10 hours of viewing per month for $5 and ?we could not be more excited to sell our service to Telus and Rogers.? In fact, said Cope, Bell has offered it to both companies for $3 million per year, a tiny sum given the size of both of Bell?s primary competitors.
However, since neither have taken the deal ?We believe they aren?t carrying the wireless product to create the perception of a vertical integration problem,? added the Bell CEO.
* Another bit of Bell?'s benefits package which also got a rough ride Monday was its desire to divert $40 million to the development of wireless broadband in the far north (something many industry stakeholders object to). Cope noted the economics of bringing high speed wireless broadband to every community in the far north just do not work and without this money, Bell will stick to its existing commitments to spend $234 million to upgrade the wired infrastructure there, as demanded by the Commission, but that?s as far as it will go.
?This will not happen if this is not approved here,? said Cope. Bibic added the $40 million in its benefits plan would bring high speed internet of 5 Mbps to those small communities and is ?a once in a lifetime opportunity? to give northerners a similar service to what is available in urban Canada.
Commissioner Pentefountas asked if Bell would object to that money going into a fund administered by a third party to build wireless broadband in the north. Er, no, said Bell. ?We would withdraw the proposal and direct it to other things,? said Bibic. If it is to become a ?pseudo-governmental? fund, Bell said the government itself should fund it if they want wireless broadband in those regions.
The hearing continues all week, with Quebecor and Shaw Communications on the docket Tuesday.
