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Bell-Astral 2 Hearing – Day 5

The CRTC hearing on the Bell-Astral merger closed today with a final reply presentation from BCE and Astral. Bell rejected other BDU allegations of anti-competitive behaviour, underlining that there was no evidence to support them. In fact, Bell argued that the compound annual growth rates for its non-sports services were extremely low for cable companies such as Cogeco, Eastlink and Telus. It also maintained with respect to non-linear rights that all BDUs would have the option to select individual services or to simply buy the content from Bell’s TV Everywhere offer. Bell stated that BDUs already had long-term access to The Movie Network non-linear rights and that it would commit to negotiating linear and non-linear rights together in the future. The company also reiterated that it would bring “competitive balance” with Québecor in Quebec, and that Shaw/Corus’ entrance in the market would create a third competitor.

The Commission seemed bent on exploring a range of options with Bell and Astral today. Chairman Blais presented several different scenarios, including an absolute denial of the application, further divestitures – particularly in the movie pay TV sector – and wholesale rate regulation where a dispute between negotiating parties were to arise. Bell and Astral were very hesitant to adopt further safeguards. Astral emphasized that a denial of the application would merely extend uncertainty for its business and employees, and could affect its acquisition of new rights. Bell was resistant to divesting more services, emphasizing that it had made strenuous efforts to come to the divestitures agreed to in the present application. It particularly opposed the idea of wholesale rate regulation, stressing that it represented “too much regulation” and would cause Bell to consider backing out of the transaction entirely. The company did, however, agree to mandatory arbitration where negotiations of affiliate agreements stretched beyond six months. The Commission also questioned Bell’s modifications of the Vertical Integration Code in its proposed conditions of license, but the company insisted it needed flexibility to operate its business competitively and argued that it would be unfair for the Commission to “handcuff” its operations.

Interveners now have an opportunity to submit written comments to the Commission on Bell and Astral’s undertakings until May 15, and Bell will file its final written reply on May 21.

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