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October18, 2012: CRTC chairman Jean Pierre Blais comments on the ruling of BCE - Astral deal during a new conference in Gatineau, Quebec. (Dave Chan/Globe and Mail)
October18, 2012: CRTC chairman Jean Pierre Blais comments on the ruling of BCE - Astral deal during a new conference in Gatineau, Quebec. (Dave Chan/Globe and Mail)

Globe editorial

CRTC’S Bell-Astral decision is out-of-date Add to ...

The Canadian Radio-television and Telecommunications Commission’s decision on the proposed BCE Inc.-Astral Media Inc. transaction is built on the shortsighted premise that “Internet platforms continue to be complementary to the traditional broadcasting system.” The acquisition of Astral might have made the Canadian broadcasting market somewhat more oligopolistic than it already is, but more and more the real market in question will be an international one, not a closed Canadian system.

BCE – which owns a non-controlling, 15-per-cent interest in The Globe and Mail – made its case to the CRTC in large measure on the idea that the merged company would be a national champion to stand up to foreign content providers such as Netflix, a subscription service for films and television series; Apple Inc., Google Inc. and Amazon.com, Inc. were also mentioned. Their name is legion.

As for the Internet’s complementary relationship to the broadcasting of the past half-dozen decades or so, Jean-Pierre Blais, the commission’s chair, and his colleagues relied on the available data cited in the CRTC’s substantial report Navigating Convergence II: Charting Communications Change and Regulatory Implications, published in August, 2011.

The ground, however, is constantly shifting, as the report itself makes clear. BCE’s proposed investment in Astral is not aimed at the status quo of last year or of today, but for years ahead. No corporation makes a $3.4-billion purchase lightly, or as a short-term tactical manoeuvre. Such an investment is for the longer term, for a time in which technological change will continue to disrupt traditional systems.

The ability of companies to merge, or acquire other companies, is quite fundamental to a country’s business culture. Although the Conservative government is generally well disposed to the business community, it has not been particularly forthcoming on important structural questions.

It is likely that the federal cabinet will have to deal with the Bell-Astral proposal. Though it may not be able to overturn the CRTC’s decision, it does have the power to send the matter back to the commission for reconsideration and clarification. This major issue should not simply be ignored. It is an opportunity for the Harper government to signal some of its views on Canada’s economic institutions.

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