August 7, 2012 / 9:13 PM / 5 years ago

Canada cable rivals team up to oppose BCE-Astral deal

TORONTO (Reuters) - Three cable companies have banded together to call on Canadian regulators to block BCE Inc's (BCE.TO) planned C$3 billion ($3 billion) takeover of Astral Media ACMa.TO, arguing the deal would reduce competition and lead to higher fees for viewers.

In an Ottawa press conference on Tuesday, the chief executives of Cogeco Cable Inc CCA.TO, Eastlink and Quebecor Inc (QBRb.TO) said the Astral deal would harm the broadcasting industry and lead to higher costs for programming services.

The group asked Canada's Competition Bureau and regulators at the Canadian Radio-Television and Telecommunications Commission, to halt the deal, proposed in March by BCE, the parent of Bell Canada.

"We call upon the Competition Bureau and the CRTC to block this acquisition of Astral by Bell in its tracks," said Cogeco CEO Louis Audet at the press conference.

The proposed takeover would give BCE, already Canada's largest telecom provider, control of more than 20 television services operated by Astral, including HBO Canada, the Movie Network, Canal Vie and Disney Junior.

In radio, the deal gives BCE 80 stations, including Virgin Radio, EZ Rock and Boom. BCE has offered to spend C$200 million on Canadian programming and sell 10 radio stations in a bid to win regulatory support for the deal.

BCE, which is acquiring Astral to expand its Bell Media arm, says the deal positions it to compete more effectively against Quebecor, with its rich array of French-language content and Videotron, a rival telecom that operates in the province of Quebec.

"Accusations that Bell would restrict content are silly," said Bell spokesman Jason Laszlo, in an email. "Bell Media is in the business of providing content to cable companies like these and other TV providers."

BCE's rivals say the deal would vastly expand the market power of Bell, which last year bought Canadian broadcaster CTV for C$1.3 billion.

"Bell Canada would become so dominant that no other company could compete with it to buy popular movies, TV series and sports. They would use their financial muscle to own all the best content, which would ultimately make it more expensive for consumers," said Eastlink CEO Lee Bragg.

The Canadian Competition Bureau issued a statement on Tuesday saying it was aware of the issues raised by other market participants in regard to the Bell-Astral deal.

"Should the Bureau determine that the proposed transaction is likely to substantially lessen or prevent competition, we would not hesitate to take appropriate action," Competition Commissioner Melanie Aitken said in the statement.

($1 = 0.9968 Canadian dollars)

Reporting by Euan Rocha

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