CRTC approves BCE's purchase of CTVglobemedia
The Canadian Press
Published Monday, March 7, 2011 5:12PM EST
Last Updated Saturday, May 19, 2012 4:07AM EDT
OTTAWA - Telecom giant BCE Inc. has been given approval to take complete command of CTVglobemedia in a move that further integrates Canada's broadcasting industry.
The CRTC gave the green light to the $1.3-billion purchase, but put a major condition on the approval.
It ordered BCE to invest $245 million in the Canadian broadcasting industry, including $100 million to commission independently produced programs of national interest, such as drama and comedy series.
As well, it said money under the "tangible benefits" package should be spent on allowing satellite carriage for at least 43 additional television services, sustain the financially troubled A-Channel stations for at least three years, and enhance local news programming in several cities.
Finally, the regulator imposed a moratorium on BCE using its dominant position as both broadcaster and carrier of programs through Bell Express-Vu satellite to discriminate against other carriers until the CRTC holds public hearings on convergence and vertical integration.
"We are pleased that BCE has addressed our questions regarding how this transaction would contribute to the vitality of the Canadian broadcasting system," said chairman Konrad von Finckenstein of the Canada Radio-television and Telecommunications Commissions in a release.
Bell said the approval means it is on track to close the acquisition early in the second quarter, sooner than originally expected.
"We look forward to welcoming the CTV team to Bell and to accelerating the delivery of the best digital content to Canadians on the screens of their choice through Bell's world-leading broadband fibre and mobile networks," BCE president and chief executive George Cope said in a prepared statement.
Ian Morrison of the Friends of Canadian Broadcasting public interest lobby group said the decision shows both the advantages and perils of vertical integration, whereby one company controls both the content and pipeline it is carried on.
Canadian television is now dominated by vertically integrated carriers and broadcasters -- BCE, Quebecor, Rogers Communications and Shaw Communications.
"Now that all of the big television networks and services are owned by big distributors, these distributors have deep enough pockets they can afford to invest (in Canadian content)," he said.
"The downside is less competition. The more concentrated these people are, the less diversity there is."
Morrison praised the CRTC for extracting $245 million in tangible benefits, discarding BCE's original argument that since it paid $230 million the first time it bought CTV in 2000, it shouldn't be forced to contribute a second time.
That position was attacked by a number of interveners to the commission, and BCE gradually upped its offer until it agreed to the CRTC's conditions.
Morrison cited the popular CTV comedy Corner Gas as an example why the tangible benefits package requirement is important. He said the show was created from the benefits BCE paid during its first go-around with the network.