“You should detect this is blatantly unfair and unprecedented,” Cogeco chief executive officer Louis Audet says. “This is not the Wild West. If you condone this behaviour, eventually everyone disappears and there is one player. This is not a theoretical problem, it is a very practical and pragmatic problem.”
Bell insists any complaints about its negotiating tactics have little to do with the Astral deal – it’s just trying to get market price for its products. But Mr. Audet says Bell has a long history of self-serving interests, and “there is a strong body of evidence to suggest Bell will do as it usually does.”
“In the old days, the cable guys couldn’t build networks and had to rent from Bell,” he says. “Eventually we got the right to build networks and had to buy them from Bell at an inflated price. We wanted into telephony, and it was denied to us until it was maybe 10 years too late. The new chapter is for Bell to buy all of the programs and either make others pay high prices or deny them channels so they can attract customers.”
The existential threat for companies such as Cogeco, he says, is that if they push back and tell Bell they won’t pay higher rates for popular channels, then they will lose market share and find themselves unable to compete for new customers.
“This is most regrettable for the diversity of our system,” he says.
New rules were introduced last year to prevent large companies from pushing around its smaller competitors.
Essentially, the guidelines say any vertically integrated company must do unto other companies as it would do unto itself. In other words, no hoarding of content, and no restrictive clauses that make their own services more attractive to consumers than those of their less integrated rivals.
But there is unease over whether the rules will be effective. They were only introduced a year ago, and only a few cases have made it before the CRTC.
Telus Corp. and Bell recently resolved an 18-month battle over TSN, after Telus accused Bell of demanding viewership guarantees that were only attainable if the channel was placed on its basic service, and forcing it (along with a price increase) on all of their customers.
The CRTC eventually ruled that was an unreasonable arrangement, which allowed Telus to keep the channel without the conditions Bell had tried to impose.
Bell says the concerns are overblown, that the rules are the rules. But they do agree with their rivals on one thing – it takes far too long for a dispute to make its way through the CRTC.
Why size matters
It’s impossible to know how the average channel-surfing cable subscriber feels about the takeover, but there have been some signs of general unease.
When Forum Research tacked a question to the end of one of its recent nationwide polls asking about support for the deal, 60 per cent said they disapproved after being were told it would mean the resulting company would control 38 per cent of the country’s television market and 29 per cent of the radio market.
But the question may have been more of a referendum on capitalism than the proposed merger itself: Forum president Lorne Bozinoff says respondents were likely expressing a general distaste for a company that many have spent their lives grumbling about, for any number of reasons.
“They don’t want to see big companies getting bigger,” he says. “They hear the number of channels and it sounds big. They think there’s nothing in it for the consumer that they’ve heard about, so they tend to shy away. But I don’t know how much people actually care about it – I’m not saying they stay up at night worrying.”
In other words, they are against the deal because they were put on hold for too long when they wanted to ask a question about their bill, or get a new TV system installed. The polling bears this out – in parts of the country where Bell offers home phone and television services, respondents were far more likely to dislike the proposal.