February 1, 2011 / 9:58 PM / 9 years ago

Bell Canada's parent defends bid to buy broadcaster

* CRTC studying telecom Bell’s buy of broadcaster CTV

* Regulator approved similar deal for Shaw/Canwest in 2010

* Review of regulatory framework planned amid convergence

By Alastair Sharp

TORONTO, Feb 1 (Reuters) - BCE Inc (BCE.TO), the parent of Bell Canada, defended its bid to take over broadcaster CTV on Tuesday, saying regulators have already allowed its competitors to buy programming assets.

The proposed purchase highlights a broader move by telecom and cable carriers to snap up content providers as consumers spend more time watching video on tablet computers and smartphones.

Pending approval from the Canadian Radio-television and Telecommunications Commission (CRTC), BCE will pay C$1.3 billion for CTV, the country’s biggest private broadcaster. Including debt, the deal comes in at C$3.2 billion. [ID:nN10251109]

“I’d be shocked if it doesn’t” get approved, said analyst Dvai Ghose of Canaccord Genuity. That said, the CRTC hearing is “interesting in terms of what rules and regulations they enforce in order to protect those who don’t have content,” he said.

BCE, Canada’s biggest telecommunications company, said it would pay as much as C$221 million to support independent content, in line with CRTC policy. The pledge reverses BCE’s earlier position that it should not have to make an additional payment because it paid C$230 million when it first bought CTV in 2000. BCE later reduced its stake in the broadcaster.

In opening statements at the hearing in Gatineau, Quebec, BCE Chief Executive George Cope said the deal deserves to be approved in part because BCE’s main competitors already own both content and the ability to transmit it.

He cited Bell’s largest competitor, Rogers Communications (RCIb.TO), which owns Sportsnet and acquired City TV almost four years ago. He said Quebecor’s (QBRa.TO) Videotron cable arm has had unique access to TVA assets for a decade, while Shaw Communications (SJRb.TO) owns Canwest and Corus media assets.

Indicative of the convergence trend, Quebecor’s Videotron launched a wireless service in Quebec in September [ID:nN09185742], while Shaw has delayed the launch of its own mobile network until early 2012. [ID:nSGE70CBAP]

The CRTC approved Shaw’s C$2 billion purchase of the broadcast assets of CanWest, which were in creditor protection, in October. [ID:nN22197862]

In that deal, the regulator said it expects Shaw to give competitors access to the TV programming it owns, including on mobile and on the Web, “on commercial terms.”

On the same day, the regulator said it would review its safeguards against anti-competitive behavior. Submissions for that review are due in March.

BCE has been more circumspect about whether it would retain some exclusive content, such as sports or financial news, for its own customers.

CTV owns the CP24 news channel, financial news outlet BNN and sports broadcasting rights via TSN.

An executive at Telus (T.TO), which teamed up with BCE to build a high-speed wireless network and has eschewed media assets, said last month a natural conflict exists between distribution and content. He said distributors want exclusivity, while content providers want to be seen as widely as possible to maximize advertising revenue. [ID:nN21246009]

“We recognise that the successful model of a content provider is based on distributing to our competitors and at the same time the success of Bell’s model is based on buying from the competitors of CTV,” BCE’s Cope said at the hearing.

He said he expects the head of CTV to lead a separate division within BCE.

“Hopefully that gives you some comfort over where we are heading,” he said.

The government’s Competition Bureau said it has no intention of challenging the BCE transaction but would monitor the CRTC’s wider review of the trend. The bureau has a year to reconsider a challenge.

The hearing is due to conclude on Friday and a decision announced within 35 days.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below