It's not often that CRTC hearings about mergers and acquisitions draw a room full of laughter. Commissioner Peter Menzies, sitting on the regulator's panel for its hearing on BCE Inc.'s proposed acquisition of Astral Media Inc. for $3.38 billion, did just that on May 7. The laughter came in his response to a suggestion that, this time around, the commission's approval of the deal was already decided. Menzies asked Cary Lawrence, a member of the national executive of the Alliance of Canadian Cinema, Television and Radio Artists, who was appearing at the hearing as an intervener, why the actors' union wasn't taking a stronger position against the deal. “I think it is sort of a fait accompli that this is going to happen, eventually,” Lawrence said. “Oh, that's news to us,” Menzies responded, suggesting the regulator could, as it did last fall, block the deal again. The hearing in May was the regulator's second look at BCE's proposal to acquire Astral. The CRTC denied the first application in a surprise decision last fall, saying it was not in the public interest. BCE and Astral came back to the CRTC with a reworked proposal and an agreement with the Competition Bureau in March to sell off 12 specialty channels, including Teletoon and Disney, with half going to Corus Entertainment Inc. Broadcasting industry sources, speaking on background, say they can't be sure what the CRTC will do with the new application. Will it outright deny it again? Could it effectively deny it by ordering more divestitures that are deal breakers for BCE? Will it approve it with more conditions to limit BCE's market power? Or more broadcast regulations applying to big, converged companies? How will the commission's focus on consumer interests influence the decision? “We are applying a more rigorous public interest test for ownership transactions,” CRTC Chair Jean-Pierre Blais said in a speech Wednesday at the Banff World Media Festival in Alberta, according to his speaking notes. “Our decision last fall sent a clear signal that the public interest is paramount. It is the lens that Parliament has entrusted to us, under legislation, and we fully intend to carry out that public trust.” Blais said the commission needs to ensure “no citizen is left behind,” and that the regulator's decision making process will mean “sometimes being audacious” with intervention and in other cases taking a “step back” and deregulating. Last fall, everyone seemed to get their Bell-Astral predictions wrong. The fear now is that they could get them wrong again. “Politics and regulatory are the most unpredictable part of this business,” Dvai Ghose, a media and telecom analyst with Canaccord Genuity, said in a brief phone interview. “Bell’s obviously made some fairly major divestiture moves here, but I got it wrong the first time, so why ask me?” The Competition Bureau's approval of the deal provides some comfort to industry types who want the deal to go through. So does the commission's focus on additional conditions on BCE's market power during the hearing in May, including the possibility of a CRTC arbitration process to resolve carriage and content distribution disputes before existing agreements expire. At the hearing, Blais suggested BCE chief executive George Cope was shooting down too many possible ways to address competitors’ concerns that Bell, a vertically integrated media and telecom company, would have too much control over broadcast assets as well as the mobile, TV and online distribution platforms for that content. How about something akin to wholesale carriage fee regulation? No, the executive said. Further divestiture of "must have" Astral pay services The Movie Network (with HBO Canada) and TMN Encore? Nope. “Interesting, Mr. Cope, because if I understand you correctly, you're telling me, 'Well, until we meet again,'” Blais said, making the kind of statement that could move Astral's stock price. “Every idea we're putting forward, you're saying you would not go ahead with the transaction.” Investors, who were mostly optimistic about the deal going through last October, are expressing about the same degree of confidence now. “The market sees only a very small amount of risk that that the deal isn't done,” Troy Crandall, a media and telecom analyst with MacDougall, MacDougall & MacTier, said in an interview. “That's what the stock price is telling you.” Astral's stock price traded between $48.50 and $48.55 on Tuesday this week. On Oct. 16, 2012, two days before the CRTC blocked the deal, Astral's stock closed at the same price, $48.50. That means, then and now, the markets are building in about $1.50 of risk into Astral's stock price, which BCE would purchase for $50 per share through the deal. Another indicator of investors' views of the deal are the “short positions” in Astral, or the number of shares that they're short selling. Investors with short positions borrow stock, sell it high and then buy it back low, profiting from its fall. That means anyone with a short position in Astral would benefit from a regulator's denial. Short positions in Astral, this time around, are far lower than last year, Crandall pointed out. At any given time, most publicly traded companies have about two per cent of their shares short, he said, and now, the short position in Astral's stock represents only 0.18 per cent of shares. “No one has enough confidence to say the deal isn't going to get done, and that they're willing to go out and put a lot of money on the line,” Crandall said. “It's way below average, which means there aren't many gutsy people out there to make a call on that.” Far more investors were willing to make that call last fall, he pointed out. Before the CRTC denied the deal, short positions in Astral were at 6.25 per cent of all shares, he said. Sheridan Scott, a partner at Bennett Jones LLP and former commissioner of competition, said in a phone interview that we can never be too sure about which way the CRTC will go on a decision. “The last application certainly had a number of shortcomings,” Scott said. She wouldn't go so far as to say that the CRTC is now trying to find a way to approve the reworked application. “The Competition Bureau has reached their conclusion about whether it would result in substantially less competition. That said, the CRTC's jurisdiction with respect to competitive matters is slightly different,” she said, adding that the CRTC looks at the application according to the Broadcasting Act. “Because the bureau has pronounced on the issue doesn't mean that the CRTC must, by law, accept that. They do an independent analysis.” At the CRTC hearing on May 10, Blais asked Astral executives what it would mean to the company if the deal is denied. Astral chief executive Ian Greenberg said the impact would be “severe” as the company's employees dealt with further uncertainty about a possible new owner, which would hang over the company for at least another year. He said he would have to talk to the Greenberg family, the company's owners, about next steps. The CRTC is expected to release its decision on the new application in early summer, and Bell and Astral have extended the deadline to close their agreement to July 31. —With reporting by Simon Doyle at firstname.lastname@example.org and editing by Anja Karadeglija at email@example.com.