CRTC fails consumers once again by allowing Bell to purchase CTV

First Shaw purchased Global; yesterday, Bell purchased CTV.

After obtaining permission from the CRTC, Bell purchased Canada’s largest media empire for $1.3 billion on Monday. As a condition of purchase, the CRTC is requiring Bell 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 million
  • 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).

“We are pleased that BCE has addressed our questions regarding how this transaction would contribute to the vitality of the Canadian broadcasting system,” said CRTC  Chairman Konrad von Finckenstein, in a press release. “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.”

Predictably, Bell was also happy with the decision.

“The CRTC’s expeditious approval of the CTV transaction means Bell is on track to complete our acquisition in early Q2, sooner than originally expected,” said Bell Canada and BCE President and CEO George Cope, in a separate release. “We look forward to welcoming the CTV team to Bell and to accelerating the delivery of the best digital content to Canadians on the screens of their choice through Bell’s world-leading broadband fibre and mobile networks.”

It’s sad that it’s come to this. While it’s great to see that someone, anyone is investing in new Canadian content these days (and at no cost to the taxpayer, mind you), it’s distressing that the CRTC is allowing this ugly trend of convergence to continue. It feels like we’re going one step forwards and two steps back in this country.

When companies like Bell control not only distribution of content, but content generation itself, it’s dangerous to Canadian consumers. It’s dangerous because we are becoming subject to the whims of Bell and their conflicted interests. Just look at the whole usage-based billing fiasco; it was almost certainly an effort by the major telecos who own distribution and content to protect their content by throttling our ability to find content outside what they offered.

Consider this: Rogers owns a chain of video stores; Shaw owns Global Television; now, Bell owns CTV, and all three of them, plus Telus, offer video-on-demand service via cable television that require you to pay to watch movies. The content arm is a huge part of these corporations’ bottom line. So, when a company like Netflix comes along that offers content outside of what these companies have, of course they’ll do whatever they can to shut them out. Enter UBB, and suddenly Netflix isn’t such a great alternative for consumers, and we’re back to feeding from the trough that the telecos provide for us.

And for what it’s worth, the CRTC’s requirement of $245 million of spending over seven years doesn’t amount to a whole hill of beans for Bell; in 2009 alone, they made just shy of $2 billion in profits. Assuming that Bell’s net profits haven’t grown at all since then (unlikely), that means their profitability only drops by two per cent for each of those seven years. What a sacrifice.

It’s becoming clearer and clearer all the time: the von Finckenstein CRTC does not serve the interests of consumers at all. It’s just a rubber-stamp panel that serves the needs of big business in Canada. “Convergence” is just another word for “control” these days, and with the CRTC by their side, it won’t be long until big telecom companies have “convergence” over the entire Canadian media landscape.