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Quebecor president and CEO Pierre-Karl Peladeau speaks during a news conference at the city hall in Quebec City, March 1, 2011. (MATHIEU BELANGER/REUTERS)
Quebecor president and CEO Pierre-Karl Peladeau speaks during a news conference at the city hall in Quebec City, March 1, 2011. (MATHIEU BELANGER/REUTERS)

Péladeau warns that BCE deal will create a ‘monster’ Add to ...

Quebecor Inc.’s campaign to kill BCE Inc.’s takeover of Astral Media Inc. moved from public appeals to regulatory hearings Tuesday, as its chief Pierre Karl Péladeau warned the $3.4-billion deal would create “a monster in front of us that will kill the business.”

“If approved, this deal will be a point of no return for the future of telecom and broadcasting in Canada,” Mr. Péladeau said, as clearly unimpressed BCE executives sat just metres away.

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“The impact of this type of domination would be multiple and would stifle any form of competition. No other company would be able to compete with the power of Bell.”

The Canadian Radio-television and Telecommunications Commission is holding a week-long hearing into the deal, which BCE outlined in detail Monday. The transaction would leave the company’s Bell Media division with control of more than 100 radio stations and almost 90 television channels.

Quebecor has led a coalition of opponents called Say No To Bell that has spent the summer warning consumers via advertisements in newspapers and on television that their bills will go up as their choices go down if the deal is approved.

While the campaign was criticized by CRTC chairman Jean-Pierre Blais for disrupting the “serenity” of the process, Mr. Péladeau said it was necessary to educate consumers about the dangers of consolidation.

He said he is particularly concerned that Bell would use its radio station, TV networks and specialty stations to offer advertisers cut-rate prices in both English and French markets in Canada and squeeze out companies that have narrower portfolios.

“This is the first time ever in Canada you will see a dominant position in the anglophone and francophone markets,” he said after his appearance. “It would weaken our capacity to finance our programming because we’ll have in front of us a monster that will kill the business.”

Bell says it needs to do the deal to compete with its rivals across the country, but more importantly to fend off foreign competitors such as Netflix and Apple that are breaking into the Canadian market. Opponents contend that the combined company would own too many specialty channels, and charge its competitors too much money to access them.

The battle is especially heated in Quebec, where Quebecor is a dominant force with about a 30 per cent share of the market with its TVA network.

CRTC chairman Mr. Blais was skeptical of some aspects of Quebecor’s presentation, suggesting the company would act the same way if the situations were reversed.

“That’s the nature of the beast. We have a competitive market,” he said. “Sometimes we have success, sometimes we lose. That’s what happens – you would have done the same thing.”

It wasn’t all bad for Bell – Shaw Communications followed Quebecor’s presentation with an upbeat endorsement of the deal. Like Bell, Shaw owns much of the content it airs and president Peter Bissonnette said the only reason companies such as Quebecor oppose the deal is that they are worried about losing market share.

“It would be a short-sighted and insular, protectionist approach suggested by some interveners who simply want to prevent or restrict a competitor from delivering the consumer benefits resulting from scale and integration,” he said. Some of the deal’s opponents have said companies such as Bell and Shaw – which own specialty channels such as TSN that are resold for distribution to companies such as Quebecor and Cogeco Inc. – will use their heft to drive prices higher and those costs will eventually be passed along to consumers.

Mr. Bissonnette said rules introduced last year, which govern how vertically integrated companies must interact with its competitors, are sufficient to prevent such abuses.

“I can think of no mortal sin that I could commit that isn’t covered by the current rules,” he said.

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