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BCE Inc. CEO George Cope (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)
BCE Inc. CEO George Cope (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)

Rivals seek restrictions on BCE takeover of CTV Add to ...

Two major Canadian TV distributors want the federal broadcast regulator to put restrictions on BCE Inc.'s takeover of CTV, saying they are worried about possible abuses of market power .

Telus Corp. and Cogeco Cable Inc. told the Canadian Radio-television and Telecommunications Commission that BCE cannot be trusted to provide the content it owns to competitors on all platforms.

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BCE has struck a $1.3-billion deal with CTVglobemedia Inc. to buy the CTV broadcast properties, which must be approved by the CRTC.

On Tuesday, BCE chief executive officer George Cope said the company would give access to its television content on competitors' mobile phones, provided they pay for it. Mr. Cope said the market would dictate the financial terms. But Michael Hennessy, Telus's senior vice-president of regulatory affairs, expressed doubt that the content would be available at a fair price.

"They said 'commercial terms' - the question is, what are those terms?" Mr. Hennessy said in an interview after his presentation, in which he asked the CRTC to make a prohibition against mobile exclusivity a condition of BCE's purchase of CTV.

Mr. Hennessy told the regulator that Telus has attempted to negotiate with CTV to offer video from the Business News Network on Telus's phones, and has not been successful. Currently, BCE mobile phones provide BNN content exclusively.

Telus also tried and failed to negotiate for Super Bowl content on its phones. CTV has the exclusive broadcast rights for television, and BCE has an exclusive deal for mobile video rights. Because BCE negotiated directly with the National Football League for the mobile arrangement, and does not yet own CTV, the company says this is not an example of a distributor using content it owns to gain an unfair advantage in the mobile space.

Cogeco president and CEO Louis Audet argued that exclusivity is unacceptable, whether on the traditional television or on new platforms such as wireless or the Internet. "We cannot have exclusive - on anything, from anyone," he said in an interview. "The programming has to be available."

The CRTC plans to hold hearings in June on the effect of vertical integration on the market - that is, companies owning content as well as the means of distributing that content on TV and other screens.

BCE's competitors argue that the competitive threat goes beyond mobile platforms. Traditional TV negotiations are also becoming more complicated. They say integrated distributors (such as BCE, if the deal is approved; Shaw Communications Inc., which bought CanWest TV assets last year, and Rogers Communications Corp., which owns the CITY-TV network and some specialty channels) have a competitive advantage when negotiating with each other on the fees they pay to carry specialty stations. And, they say, higher costs are imposed on smaller cable, satellite and IPTV providers who do not own content.

Manitoba Telecom Services Inc., which provides an IPTV service (similar to a traditional cable or satellite package, but delivered over Internet lines) told the CRTC it is in negotiations where CTV is trying to hike the per-subscriber fee it charges to carry one of its specialty channels.

While MTS vice president of regulatory affairs Teresa Griffin-Muir would not specify which channel she was referring to, she said CTV wants to charge MTS three times what it has in the past. (Another industry source suggested that CTV is telling some distributors that it is wants to double the rate for distribution of TSN, its most lucrative specialty channel. CTV declined to comment on negotiations.)

Industry consolidation is happening elsewhere as well - most markedly in the U.S., where the Federal Communications Commission last month approved the sale of NBC Universal to cable giant Comcast Corp. The FCC imposed a number of conditions on the deal, however, to limit Comcast's ability to make its content exclusive to its own platforms, including the Internet. Cogeco and Telus called for similar safeguards on BCE.

"You're now dealing with the biggest economic force in communication in Canada," Cogeco's Mr. Audet said at the hearing. "You are dealing with a different, and more powerful beast."

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