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Press release from Marketwire

Cogeco Cable Inc. Urges CRTC to Reject Proposed Bell/Astral Deal, Once and For All

Monday, April 08, 2013

Cogeco Cable Inc. Urges CRTC to Reject Proposed Bell/Astral Deal, Once and For All

09:27 EDT Monday, April 08, 2013

MONTREAL, QUEBEC--(Marketwired - April 8, 2013) - Cogeco Cable Inc. (TSX:CCA) ("Cogeco") today announced its full opposition to the application by Astral Media Inc.("Astral") to the CRTC for authority to transfer its effective control, and control of its licensed broadcasting subsidiaries, to BCE Inc. ("BCE") and to complete related corporate reorganizations. Cogeco's opposition is based on the same concerns raised in its submission filed in the proceeding leading to the Commission's October 18, 2012 decision to reject BCE's proposed acquisition of Astral (Broadcasting Decision CRTC 2012-547). Astral's application does not fix the major flaws that were then identified by the Commission. As was the case in BCE's 2012 application, Astral's applications would give BCE unprecedented market power that could not be constrained through regulatory safeguards, whether administered by the Commission or the Commissioner of Competition. Nothing in the intervening months has brought about new revelations that would allow the Commission to overlook these major flaws or seek to remedy them through regulatory means, and the Commission's fundamental reason's for denying the previous application apply equally to the current application.

Astral's application raises the same very substantial concerns "related to competition, ownership concentration in television and radio, vertical integration and the exercise of market power" as were noted in Broadcasting Decision CRTC 2012-574 denying the previous application.

Below is an overview of Cogeco's arguments supporting a definitive denial of the proposed transaction by the CRTC :

  • BCE is already Canada's largest vertically-integrated provider of broadcasting and telecommunications services.
  • The television audience threshold in the CRTC's Diversity of Voices policy is not in itself a sufficient tool to measure the public interest in the presence of broader policy concerns created by the proposed transfer of control of Astral to BCE, taking into account the current state of the industry and BCE's overwhelming position within it.
  • BCE already holds too large a share in the broadcasting sector following the acquisition of CTV and of a major ownership interest in Maple Leaf Sports and Entertainment ("MLSE").
  • BCE has the opportunity and the incentive to abuse its dominance in the supply of content to the detriment of competition and Canadian consumers.
  • BCE's opportunity and incentive to abuse its dominance in the supply of content will be further enhanced by extending its control of program rights for exhibition in Canada to Hollywood movies and American popular television series from HBO and Showtime, plus extensive rights to live sports programming, in both English and French, throughout Canada and on all platforms.
  • It would be excessively complex, burdensome, costly and ineffective in the end to try to discipline Bell's overwhelming market power through regulatory measures, whether from the Competition Bureau or from the CRTC.
  • The Canadian broadcasting and communications market is highly concentrated among four vertically integrated companies (BCE, Shaw, Rogers, QMI), and it is already the most highly concentrated among the G8 countries. The proposed divestitures would not decrease the level of concentration in the Canadian market. Instead, they would further increase and entrench the market dominance of BCE and Shaw by shifting most of the assets of the formerly independent Astral to BCE and Shaw's affiliate, Corus.
  • Over and above the anticompetitive practices already noted since the acquisition by BCE of the extensive television and radio properties of CTV, BCE's proposed acquisition of Astral gives rise to a further and exceptionally high risk of systemic anticompetitive behaviour to the detriment of rival distributors, Canadian consumers and the Canadian broadcasting system at large.
  • Canadian consumers of television entertainment can only expect rising costs for their viewing options on fixed and mobile platforms, more forced packaging of BCE services and less choice in the selection of services they actually wish to use.
  • Consumer organizations continue to vigorously oppose the proposed takeover of Astral by BCE.
  • The proposed takeover of Astral by BCE is not necessary and clearly not in the public interest.
  • The CRTC is in no way constrained or bound by the deal made between the Commissioner of Competition and BCE behind closed doors.

Cogeco affirms that, as was the case with the previous application by BCE, 's application, the Commission must reject Astral's application based on the public interest, and do so in the clearest and most definitive terms so as to avoid further attempts by Astral or by BCE to complete the proposed transaction.

Cogeco has asked to appear at the CRTC public hearing scheduled to begin on May 6, 2013 in Montreal.

To access Cogeco's intervention filed with the CRTC, please visit the CRTC's broadcasting public hearings (BD 2013-106) at http://crtc.gc.ca/eng/archive/2013/2013-106.htm or visit www.cogeco.ca.

ABOUT COGECO CABLE

Cogeco Cable (www.cogeco.ca) is a telecommunications corporation and is the11th largest hybrid fibre coaxial cable operator in North America operating in Canada under the Cogeco Cable brand name in Quebec and Ontario, and in the United States through its subsidiary Atlantic Broadband in Western Pennsylvania, South Florida, Maryland, Delaware and South Carolina. Its two-way broadband cable networks provide to its residential and small business customers Analogue and Digital Television, High Speed Internet («HSI») and Telephony services. Through its subsidiaries Cogeco Data Services and PEER 1 Hosting, Cogeco Cable provides its commercial customers a suite of IT hosting, information and communications technology services (Data Centre, Co-location, Managed Hosting, Cloud Infrastructure and Connectivity), with 23 data centres, extensive fibre networks in Montreal and Toronto as well as points-of-presence in North America and Europe. Cogeco Cable's subordinate voting shares are listed on the Toronto Stock Exchange (TSX:CCA). For more information about Cogeco Cable and its subsidiaries visit cogeco.ca, cogecodata.com, peer1.com and peer1hosting.co.uk.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Rene Guimond
Vice President, Public Affairs &, Communications
(514) 764-4746

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