The Canadian Radio-television and Telecommunications Commission (CRTC) today approved BCE Inc.’s acquisition of CTVglobemedia Inc. This transaction will improve access to local programming through the carriage of at least 43 additional conventional and community television stations on BCE’s satellite television service.
“We are pleased that BCE has addressed our questions regarding how this transaction would contribute to the vitality of the Canadian broadcasting system,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “BCE will provide stability to the CTV Television Network. It will also invest $245 million in the Canadian broadcasting system, of which more than $140 million will be allocated to new Canadian television and radio programming.”
The CRTC’s policy for ownership transactions in the broadcasting sector requires the buyer to make specific commitments to fund initiatives that will improve the broadcasting system. Further to a review of the proposed benefits package, the CRTC is requiring BCE to spend $245 million over the next seven years to:
– allow for the carriage of at least 43 additional television services, including local, and regional conventional stations and independent community stations ($60 million)
– commission independently produced programs of national interest (drama and comedy series, documentaries and shows that promote Canadian culture) ($100 million)
– enhance local news programming in Winnipeg, Regina, Saskatoon, Edmonton, Calgary and Vancouver ($28.8 million)
– sustain the A-Channel stations for at least three years, starting on September 1, 2011 ($30 million)
– improve the accessibility of the Canadian broadcasting system through an independent fund of $5.7 million1
– support the development of Canadian musical and spoken-word talent ($17.5 million), and
– create an independent fund to help pay the costs of public-interest groups that participate in the CRTC’s broadcasting proceedings($3 million).
Today’s decision follows a proceeding that included a public hearing, which was held from February 1 to 4, 2011, in Gatineau, Que.
Programming rights exclusivity
This transaction furthers the trend of convergence and vertical integration within the Canadian broadcasting industry. As previously announced, the CRTC will hold a public hearing in June 2011 to determine whether specific rules are needed to guide commercial negotiations for programming rights in this new market reality.
Several parties to the CRTC’s public hearing on the BCE transaction expressed concerns over the acquisition of Canada’s largest private broadcaster by one of the largest providers in the broadcast distribution, Internet and wireless sectors. In particular, they were preoccupied that BCE could make certain programming available exclusively to its mobile subscribers.
The CRTC has imposed a moratorium on BCE until the close of its proceeding on vertical integration. BCE will not be able to enter into new exclusive agreements that would prevent it from making the rights to its television programming available to competitors for broadcast on mobile devices and over the Internet.
The CRTC also expressed its firm expectation that other integrated communications companies will abide by this moratorium as well.
