Telus protests Bell Canada's Astral Media acquisition

Argues acquisition could inhibit consumer choice, raise prices of video services
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Telus (Toronto: T.TO) protested Bell Canada's (NYSE: BCE) impending acquisition of Astral Media on Tuesday in a submission to the Canadian Radio-television and Telecommunications Commission (CRTC), saying that the deal would give BCE a monopoly advantage.

The Vancouver service provider's view echoes that of the Say No to Bell coalition, comprised of Quebecor (Toronto: QBR-B.TO), Cogeco (Toronto: CCA.TO) and Eastlink, as well as the concerns expressed by the Public Interest Advocacy Centre and its associates.

If it succeeds in purchasing Astral, Telus says Bell would have a 49.5 percent share of the English-language TV audience in Canada.

Telus added that the acquisition would have poses two detrimental to consumers: higher costs and limited choice of programming sources.

"All Canadians should be able to access the content they want through the provider they choose; we all benefit from competition between a variety of organizations and no one company should be in a position to take away choice or access to content for consumers," said Darren Entwistle, TELUS President and CEO, in a release speaking out against Bell's proposed acquisition of Astral Media. "If the Bell/Astral merger proceeds, the concentration of Canadian ownership will be equal to an American company owning Verizon, Direct TV, CBS, ESPN, MTV, Comedy Central, Discovery Channel, Bloomberg Television, HBO, Starz, ClearChannel Radio, ESPN pay-per-view, HBO pay-per-view, Lamar Outdoor Advertising and Radio Shack - it's a gravely concerning proposition when examined in that context."

In framing its argument, Telus cited a 2011 survey by Harris/Decima that revealed that 88 percent of Canadian "consumers support federal government rules that require all content to be equally available to all distributors." By having such rules in place, a consumer can view any TV program regardless of where they purchase their TV, wireline broadband Internet or wireless service from.

Astral marks the second large media element that Bell would like to add to its media portfolio. Seeing an opportunity to enhance growth of encourage growth of its Internet and wireless-based video service, it shelled out $2.9 billion to buy Canada's largest private broadcaster, CTV.

With its media, IPTV, and broadband segments showing signs of growth in Q2 2012, it should not be surprising that Bell Canada wants to add another piece to its growing media portfolio.

In Q2, the service provider's Media division revenues rose 0.9 percent to CAD$534 million (USD 538.2 million), while adding 38,477 net new Bell Fibe TV subscribers. Interestingly, the telco said its IPTV service is attracting more consumers to its broadband Internet high-speed data services.

For more:
- see the release

Special Report: Wireline in the second quarter of 2012

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