The CRTC today denied the application of BCE Inc. to assume control of Astral Media Inc. The CRTC noted that the proposed transaction would not only “remove the last major independent, non-integrated broadcaster from the system, but transfer its undertakings to the largest vertically integrated broadcaster and telecommunications service provider in Canada. The CRTC held that the benefits which BCE had proposed were not sufficient and that BCE had not made out a case for arguing that it needed to get bigger in order to deal with international competition, including Internet-based “over the top” services. The CRTC further found that the proposed transaction “would have been to the detriment of the entire industry”.
This is a seismic event in the regulation of telecommunications and broadcasting in Canada. The CRTC has essentially put the brakes on the consolidation in the broadcasting industry that has been taking place over the past few years and has signalled that it will defend competitiveness in the industry. The fight is probably not over, and it is inevitable that BCE will take its case either to the Federal Court of Appeal for judicial review or directly to the federal Cabinet.