Bell appeals to public for support for reworked Astral deal

BCE Inc. will court public opinion for support for a renewed application to acquire Astral Media Inc. by focusing on the benefits the deal can provide to local broadcasting, Mirko Bibic, the company’s chief legal and regulatory officer, said in an interview. Bell, the country’s largest broadcaster and telecommunications provider, said Monday it has submitted a new application to acquire the country’s largest independent broadcaster after the CRTC blocked the proposed $3.38-billion deal in October over concerns of market concentration and whether the acquisition was in the public interest. In a release, Bell said the new deal, also valued at $3.38 billion, would dedicate more money “to support the creation of exceptional Canadian TV and radio content,” exclude a previous controversial proposal to convert a Montreal-area English-language radio station to French, and leave a combined Bell-Astral with a smaller TV audience market share than previously proposed. "We heard Canadians and the CRTC loud and clear—they want assurance that Astral joining with Bell Media will directly benefit consumers and creators,” George Cope, Bell’s president and CEO, said in the release. In a new public relations website launched Monday dedicated to promoting the revised deal, Bell said its acquisition of Astral would bring more choice, competition, investment and innovation to the Canadian broadcasting landscape as well as a commitment to local radio and television news. “Local radio and television is the cornerstone of communities from coast-to-coast,” the website, CanadiansDeserveMore.ca, says. “We know local stations matter to listeners and viewers, and they matter to us.” In a telephone interview with The Wire Report, Bibic said the website marks the beginning of the company’s dialogue with viewers and listeners. He said the company expects that much of those consumers’ needs will relate to local programming, “an absolute winner” with the general public. “They love their local content. They love their local news and information. They love their local personalities. They love being able stay connected with local charities and community groups,” Bibic said. “Local is a foundation of the broadcasting system … If we can show how this transaction allows us to deliver on the promise of more local, I think we’ll have gone a long way towards addressing public interest concerns.” Bibic said local TV, in particular, is struggling under current market conditions due to a weak advertising market and a series of legal and regulatory decisions that have eaten away at stations’ traditional and potential revenue streams. He pointed to the CRTC’s decision to phase out the Local Programming Improvement Fund (LPIF) in July and the legal uncertainty surrounding a proposed value-for-signal regime, under which broadcast distributors would compensate conventional broadcasters for carrying their local signals. “You put all those together and it’s not exactly the most stable line of business,” he said of local TV. “What this transaction does is it gives the Astral Media and Bell Media stations the financial stability to commit to more local.” If the company acquires Astral, Bell will commit to keeping its local radio and TV stations open “despite a very challenging economic situation that sees many of these stations remain unprofitable,” the Canadians Deserve More website says. It says the company will also commit to “maintain the current hours of local programming” in each local TV market, and to uphold its local news “level of excellence … devoid of any influence.” Bibic said the website reflects the company’s efforts to put consumers at the “centre” of the revised transaction. He said it aims to provide consumers with “the straight goods” to counteract what he called “a pretty heavy-handed campaign of misinformation,” by some of Bell’s competitors, in opposition to the original deal. “Opponents to the deal did what they wanted to do and we’ll see what they do this time,” he said of the Say No To Bell campaign launched in August by Quebecor Media Inc., Cogeco Cable Inc. and Bragg Communications Inc. “We thought to ourselves, let’s make sure we inform Canadians with the straights facts.” Quebecor spokesman Martin Tremblay declined to comment when asked Monday whether those companies would restart their campaign following Bell’s renewed bid to acquire Astral. Bibic said Bell has focused its public relations efforts on its new website and could expand those efforts if necessary. “Right now, it’s the website,” he said. “Can things change? Yes. But there’s no radio or TV ads in the pipeline right now.” Pierre-Louis Smith, principal and owner of Stratego Media Consulting and a former chief regulatory officer for the Canadian Association of Broadcasters, said he believes commissioners could be influenced by a campaign. “They are all human. Therefore, like you and me, they could be influenced by this type of approach,” he said. More likely, he said, Bell will influence the commission’s decision through its proposed revisions to the deal, which must convince the commission that the company is serving the public interest and not just paying lip service. John Meisel, professor emeritus of political science at Queen’s University and former CRTC chair from 1980-1983, said in a phone interview that public campaigns have no influence on commission decisions, which are made “in light of the evidence that is presented at the hearing,” not online and through the media. Meisel said public relations campaigns are not considered important unless they affect the substance of an application. “I think the strategy of appealing to the public will have nothing to do with the decision,” he said. Bibic said Bell and Astral have worked for weeks to determine how they could revise the deal to appease regulatory concerns. He pointed to the new, added commitment to local news, and the company’s decision to rework its tangible benefits package. The CRTC requires companies purchasing broadcast assets to spend up to 10 per cent of the value of the transaction on projects and programming that benefit the Canadian broadcasting system. Bell’s previous acquisition application came under fire for proposing $40 million in benefits spending for its northern subsidiary, Northwestel Inc., to fund wireless broadband infrastructure in remote northern communities. Competitors and content groups said the proposal did not provide benefits to the broadcasting system and failed to abide by the commission’s practice of directing 85 per cent of those benefits to on-screen productions. “On benefits, we are committed to a minimum of 85% of the benefits money is directed to on-screen,” Bibic said, adding that the Northwestel northern broadband proposal has been removed from the new benefits package. He said the company has also decided to “turn the page” on its objections over the commission’s application of its diversity of voices policy to Bell’s previous application. In October, Bell asked the federal cabinet to issue a policy directive ordering the commission to abide by the policy’s guidelines for market transactions, which says the commission will generally approve acquisitions that do not result in any company acquiring more than 35 per cent of the French or English-language television audience share. At the time, Bell said a combined Bell-Astral viewing share would amount to 33.5 per cent of the English-language market and 24.4 per cent of the French-language market. It said those calculations included consideration of foreign channels distributed in Canada and excluded consideration of Astral’s jointly-owned channels, such as Teletoon. Bibic said Bell accepts the commission’s decision to exclude foreign channels and to include jointly-owned channels when determining audience share, even if the company does not agree with that decision. “We decided, let’s turn the page and let’s address the viewership threshold issue from the way the commission’s going to calculate it,” he said. He did not say what Bell and Astral would do to reduce the two companies’ combined audience share, though experts speculate that will involve selling off some English-language TV services. “Needless to say, there are steps that will be taken to address that issue,” Bibic said. “Details will become public .” —With files from Danika Grenier nkyonka@thewirereport.ca

Bell appeals to public for support for reworked Astral deal

Broadcast | November 19, 2012

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Bell appeals to public for support for reworked Astral deal

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