* CRTC says it would give too much market power to BCE
* Says not convinced it would not benefit Canadians
* Decision can be appealed to Federal Court of Appeal
* CRTC decision good news for Quebecor, Rogers
By Randall Palmer
GATINEAU, Quebec, Oct 18 Canada's broadcast
regulator blocked BCE Inc's C$3 billion ($3.05 billion)
takeover of Astral Media on Thursday, declaring it
would have given the Canadian media giant too much power.
"BCE failed to persuade us that the deal would benefit
Canadians," Jean-Pierre Blais, chairman of the Canadian
Radio-television and Telecommunications Commission (CRTC), said
in a statement accompanying the blunt rejection.
The decision is good news for Quebecor Inc, which
feared a challenge to its dominance of French-language
It also benefits BCE's English-language competitors,
including Rogers Communications Inc, which said BCE
was already abusing its market power as an integrated
broadcaster and distributor.
The decision can be appealed to the Federal Court of Appeal
but cannot be overturned by the federal cabinet, the CRTC said.
"It would have placed significant market power in the hands
of one of the country's largest media companies," Blais said.
"We could not have ensured a robust Canadian broadcasting
system without imposing extensive and intrusive safeguards,
which would have been to the detriment of the entire industry."
The CRTC said that in English-language television, the
combined BCE/Astral would control an unprecedented amount of
revenues and viewing.
The federal regulator has a policy of quickly approving
transactions that keep a company's control under 35 percent of
total television audience share, and carefully examining
transactions which give yield a 35-45 percent share.
The CRTC concluded that on the French side it would have
been at 33.1 percent of viewing of Canadian television services,
but at 42.7 percent on the English side.
BCE had argued that the viewing of U.S. and other
non-Canadian services should be included in the calculation, and
that when that is done, its share would have been only 24.4
percent in French and 33.5 percent in English - under the
cautionary level of 35 percent. The CRTC rejected that formula.
BCE had also argued that it would be an important
counterweight to Quebecor in French, but the CRTC said this
would merely have led to the vast majority of French programming
being held by two large, vertically integrated companies.