BCE’s acquisition of CTVglobemedia: Cogeco Cable asks CRTC for safeguards to preserve competition in communications industry
PRESS RELEASE
For immediate release
BCE’s acquisition of CTVglobemedia: Cogeco Cable asks CRTC for safeguards
to preserve competition in communications industry
Montréal, January 11, 2011 – Cogeco Cable Inc. (TSX: CCA) filed a brief today with the
Canadian Radio-television and Telecommunications Commission (CRTC) asking the CRTC for
specific safeguards to prevent abuse of the new conglomerate’s dominant market position if
BCE’s acquisition of CTVglobemedia is approved.
Cogeco Cable notes that the proposed transaction would imply a very high level of concentration
and vertical integration that would allow the BCE-CTVglobemedia conglomerate to disadvantage
competitors in the Canadian communications industry and potentially inflate prices for services to
the detriment of Canadian consumers. Cogeco Cable asks to appear at the CRTC public hearing
to review the proposed transaction, scheduled to begin in Gatineau on February 1, 2011.
“Vertical integration raises a number of concerns regarding the relationships between the owners
of content and the owners of distribution networks,” said Cogeco Cable president and CEO Louis
Audet. “The proposed level of concentration and vertical integration that would result from the
proposed transaction risks compromising the CRTC’s fundamental objectives for the Canadian
communications industry of universal access to services, diversity of choice and content and
ultimately affordable prices for Canadian consumers,” added Mr. Audet.
In its brief, Cogeco Cable provides a comprehensive review of the consequences of the common
ownership of BCE and CTVglobemedia, which would create an entity controlling both a large
number of television and content services, including sports services and programs, and a major
share of the distribution of such services and content across all wired and wireless distribution
platforms in the Canadian market, allowing it to exercise undue market power in the Canadian
communications industry.
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In the event the CRTC approves the proposed transaction, Cogeco Cable submits that specific
regulatory controls and safeguards would immediately be necessary to avoid any abuse of the
new conglomerate’s dominant market position. Accordingly, Cogeco Cable asks the CRTC to
strengthen and supplement a number of safeguards under the current CRTC regulatory
framework, including:
• Prohibiting exclusive distribution of programs between vertically integrated entities;
• Expanding the reverse onus provisions in case of alleged undue preference or
disadvantage to all broadcasting programming services and across all distribution
platforms;
• Implementing structural safeguards to protect competitively sensitive information of
competitors of BCE provided to either CTVglobemedia or BCE in connection with
programming service supply contracts with either party;
• Implementing additional reporting and disclosure provisions to allow the CRTC and parties
to identify undue preference or other abuses by BCE-CTVglobemedia of its dominant
market position.
“It is essential that the CRTC take immediate steps to allow non-vertically integrated distributors
to remain competitive and to allow their subscribers to continue receiving TV channels and
content under fair, non-discriminatory conditions, regardless of which wired or wireless
distribution service provider they choose,” said Mr. Audet. “It is crucial for competition, and
ultimately for consumers, that all Canadian broadcasting distributors can continue accessing the
same content and content quality at the same time as the major vertically integrated
conglomerates, under fair, reasonable and non-discriminatory conditions,” concluded Mr. Audet.
In the event the CRTC approves the proposed transaction, Cogeco Cable further submits that
BCE should be required to comply in all respects with the CRTC’s tangible benefits policy for the
advantage of the Canadian broadcasting system, and not for its own business advantage.
Lastly, Cogeco Cable states that BCE-CTVglobemedia should clearly forego any new fees for the
carriage of CTVglobemedia’s conventional television signals given the size of the new
conglomerate, the scope of its financial resources and the numerous distribution platforms
available to it, and the risk of abuse leading to inflated prices for consumers.
Cogeco Cable concludes that if BCE refuses to provide the required regulatory guarantees or
comply with the tangible benefits policy required in the circumstances, the CRTC should simply
refuse to approve the proposed transaction.
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ABOUT COGECO CABLE
Cogeco Cable (www.cogeco.ca) is a telecommunications company and is the second largest
hybrid fibre coaxial cable system operator in Ontario, Québec and Portugal. Through its two-way
broadband cable networks, Cogeco Cable provides its residential customers with Audio,
Analogue and Digital Television, as well as HSI and Telephony services. Cogeco Cable also
provides to its commercial customers, through its subsidiary Cogeco Data Services, data
networking, e-business applications, video conferencing, hosting services, Ethernet, private line,
VoIP, HSI access, dark fibre, data storage, data security and co-location services and other
advanced communication solutions. Cogeco Cable’s subordinate voting shares are listed on the
Toronto Stock Exchange (TSX: CCA).
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Information: Marieke Tremblay
Tel: 514-764-4700