Bell Canada (NYSE: BCE) says it feels threatened by over-the-top content providers like Netflix (Nasdaq: NFLX) and feels it must acquire Astral Media to even the playing field. Rogers Communications (NYSE: RCI), on the other hand, says it feels threatened by a BCE that includes Astral. Both companies made their pleas to the Canadian Radio-television and Telecommunications Commission.
Bell Canada CEO George Cope on Friday told the CRTC the acquisition will give BCE even more content to put on TVs, computers, smartphones and tablets and, overall, that's a good thing for the company and the country.
"Canada should not have to wait any longer to deploy a viable, national, multi-platform solution backed by a company with the resources to compete against well-funded global competitors," he said, according to a story in the Vancouver Sun.
In his initial testimony to the CRTC, Cope had hinted that the acquisition would make it possible for Bell Canada to deliver a "made in Canada" TV "to all Canadians through the cable, satellite or IPTV provider of their choice."
His assertion that the deal was good for Canadian companies was backed by, among others, John Brunton, CEO-chairman of Insight Production company who put on his Canada-first face to back the acquisition.
"Services like Netflix, Apple (Nasdaq: AAPL) TV, YouTube, Google (Nasdaq: GOOG), Facebook--the list goes on--are just the tip of the iceberg of what we're going to face in the next few years," he said during a CRTC hearing, the Sun reported. "I truly believe that our American counterparts will continue to find ways of dealing directly with Canadian consumers, which will eliminate Canadian companies in the process."
David Purdy, senior vice president of Rogers, doesn't support it and said so in his testimony to the CRTC. As a cable operator, Purdy said, TV Everywhere is a key future ingredient and if a telco that also has an IPTV operation controls that content, things could go awry.
"It seems that Bell wants us to guarantee the old model based on subscribers and advertising revenue while they start new businesses online and in mobile," Purdy said. "The temptation to behave badly is just too great."
Now it's up to the CRTC to decide the next step. The regulatory agency concluded a week-long hearing into the acquisition that would give BCE's Bell Media division control of more than 100 radio stations and almost 90 television channels--which is a little too much control of Canada's TV viewing market, opponents argued. Canadian regulation allow Bell to control 35 percent of TV viewers and even with Astral, BCE would control only 33.5 percent of the English language TV viewing audience, Cope said.
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