Shaw Strongly Supports Controversial Bell-Astral Merger, Quebecor Firmly Opposes

There have already been dramatic politics regarding the impending October decision on the $3.4 billion dollar Bell-Astral merger as 50,000 Canadians have said no to Bell in an online petition.

Now I have learned through an excerpt of the interveners that Shaw Communications is actually all for Bell Canada Enterprises to become the most monopolistic and vertically integrated media company in all of the G8.

Meanwhile, Quebecor believes that given the size of the transaction and the unprecedented situation that would result, there is no remedy that could be validly proposed as an alternative except refusal of the merger.

Shaw Media says that they support Bell in acquiring Astral’s broadcast undertakings. They believe that the creation of strong, efficient, and diversified communications companies will strengthen the Canadian broadcasting system.

Not only that, but it will serve Canadian consumers in an increasingly competitive environment. Shaw believes any perceived merger concerns can be more than sufficiently addressed by existing comprehensive “ex ante” and “ex post” regulatory framework. They even say that the public hearing should not result in new industry wide policies that undermine the ability of large companies to compete and serve consumers.

The company argues: “Shaw submits that this public hearing should not result in any new industry-wide regulations or policies that undermine the ability of large companies to compete and to serve consumers. On the contrary, the Commission should take steps to support the competitiveness of Canadian broadcasters and distributors by further streamlining the regulatory framework. In today’s intensely competitive environment, the Canadian broadcasting system needs strong and efficient Canadian players (with necessary size, scale and scope) that can innovate to develop new technologies, invest in networks and compete for viewers, subscribers, advertisers and programming rights. Furthermore, investment by strong, integrated broadcasters will become critical to the long-term viability of domestic content production in a borderless and competitive digital world.”

However, Quebecor believes that the merger would absolutely blow away the monopolistic media empire owned by the formerly controversial Italian prime minister Silvio Berlusconi. The French media company says that the considerations involved far outweigh Bell’s widely assumed modest intention to increase the level of competition in the broadcasting market for Quebec. If the merger were to go through, Bell and Quebecor would have about the same amount of the French-language market share, at just under 30% each.

Quebecor recognizes that Berlusconi’s media empire would still have a slightly higher television concentration than Bell. However, due to the nature of the businesses that Bell operates in, there is a lot of potential for cross-industry vertical integration.

Current times indicate that we are essentially at the intersection of marketing, mobile, and media as one example. Bell is a company with multiple media and telecommunications businesses that include satellite, cable/IPTV, radio, Internet, telephone, mobile, outdoor advertising, and more.

Quebecor believes Bell can leverage this to a whole new advantage and they will have no way they can compete. That’s much like how Rogers Communications advertises their sports teams, mobile, and Internet services for free because they have so many channels to do so.

Shaw Communications owns 18 speciality channels and one major network known as Global TV. Compare that to Bell, which will own more than 53 specialty services, two conventional TV networks, more than 100 radio stations, and an outdoor billboard business among other things.

One suddenly believes that there may be politics behind Shaw supporting Bell. One could also wonder if Shaw really suddenly believes in the future of a boundless media world. That’s given that a Shaw media executive last year at MIXX Canada said that Internet caps were a positive thing.

Bell has raced against time to appease possible quashing of the merger through a series of shrewd moves like a partnership with Cirque Du Soleil, and a made-in-Canada streaming service to oppose Netflix. However, the company has positioned themselves as increasingly anti-competitive in the last couple of years with the re-acquisition of CTVGlobemedia, and a joint venture with Rogers in acquiring Maple Leaf Sports and Entertainment.

Whatever the CRTC rules, the National Post’s Jamie Sturgeon has recently pointed out that Bell is being anti-competitive. They are refusing to negotiate with up and coming ViaNetTV, for example, which is attempting to uniquely blend WebTV with traditional TV. Telus’ Director of Marketing Dave Fuller also pointed out in a conversation I had a few weeks ago out of Vancouver that the prices were too high for purchasing the rights to any of their specialized mobile content. That’s despite the CRTC ruling that it must be fairly offered to the competition at a reasonable rate.

CRTC chairman Jean Pierre Blais, who was appointed in June and has assumed a decidedly consumer centric stance, warned Bell the commission will proceed cautiously.

“It could affect all Canadians and we at the CRTC need to make sure that parties clearly outline why this is a good deal for Canada,” he said in opening remarks. “When you lose an independent player in the system, I’m not sure you can easily get one back.”

Is Shaw right in siding with the monopoly for it seems like we can get independent players back easily in the advent of new media and YouTube channels as I argue here? Or is Quebecor right to oppose the merger given Bell’s massive cross-industry vertical integration prowess and their anti-competitive ways?

Photo: Fred Chartrand, The Canadian Press