Quebecor takes aim at $3.4B Bell-Astral deal

MONTREAL -- Bell's $3.4-billion takeover bid for Astral Media will mark a "point of no return" for Canada if it's approved, the CEO of Quebecor told a regulatory hearing Tuesday.

Accusing Bell Media of "arrogance" and "domination," Pierre Karl Peladeau said Canada will have one of the highest levels of media concentration if the deal goes ahead, changing the playing field for all other players.

"If it were to be accepted, it will mark a point of no return for the future of telecommunications and broadcasting in Canada," Peladeau told a CRTC hearing into the deal.

"We're going to create a marketplace that's going to be driven by a monopoly mindset and this is going to be bad for consumers and bad for all Canadian citizens," he told reporters after his remarks.

However, Calgary-based Shaw Communications (TSX:SJR.B) came out in favour of the deal.

Shaw president Peter Bissonnette said the real threat is online services like Netflix and Apple TV, not bigger Canadian players.

"There is no doubt that the proposed acquisition will make Bell bigger than it is today," Bissonnette told the CRTC.

"We urge the commission to support our efforts to respond to the real competitive threat to the system -- unregulated, foreign (over the top services) like Apple, Google, Amazon and Netflix."

Shaw has already launched an all-you-can eat movie "club" to combat the popularity of online competitor Netflix, an effort keep its TV subscribers from cutting the cord.

Peladeau kept his sights focused on Bell. He said Bell's pan-Canadian media ownership would be well above the accepted level of 35 per cent of the English-language television viewing market.

"This proposed transaction has an alarming number of precedents that no other western country, concerned with diversity, competition and democracy will have ever have faced," Peladeau, speaking in French, told the hearing.

"The impacts of such a domination would be multiple and would allow the suppression of all competition. It would be felt notably on the ability to acquire programming because no other Canadian enterprise would be able to compete against the power of Bell."

Even if the CRTC were to impose conditions, Bell (TSX:BCE) would try to find ways to get around them, Peladeau charged. Bell has already effectively taken control of Montreal-based Astral, he said.

"Arrogance has no limits for Bell's leaders."

Quebecor -- one of Bell's chief rivals which dominates the Quebec French TV market -- owns 8.4 per cent of the Canadian viewing market, he said.

Peladeau said its Groupe TVA has more than 23 per cent of the Quebec market, while its specialty TV channels have a bit more than seven per cent.

Quebecor (TSX:QBR.B) has joined Cogeco Cable Inc. (TSX:CCA) and Eastlink to launch a campaign to oppose the deal, which they say would give Bell too much control over the country's broadcasting landscape.

Bell has told the hearing that with the acquisition of Astral (TSX:ACM.A), it will own 33.5 per cent of the English language television viewing market and 24.4 per cent of the French-language market.

That's under the 35 per cent threshold set by the CRTC for approval, but BCE's competitors dispute that figure and say it is higher.

Bissonnette also told the CRTC that Shaw, Bell and others will ensure that Canadians are watching Canadian content on multiple platforms.

He said Shaw wants the deal approved without additional rules or safeguards imposed by the CRTC.

"Shaw is concerned that more regulations at this time would stifle innovations, chill investment and reduce consumer choice."

He said even though Bell will get bigger if the transaction goes ahead, Shaw will "meet this domestic competition head on."

The deal would bolster Bell's French language content in Quebec and will see an all new French language news service launched in Montreal.

Earlier Tuesday, Bell Media said it will look at selling TSN radio in Montreal if the CRTC shoots down changes the telecom giant wants to make at some of its radio stations in the city.

Bell is asking the CRTC to convert its English language TSN sports radio to French language RDS all sports radio.

Bell says it will add more sports content to its all-talk station CJAD in Montreal to serve the English market. The company says the move would better appeal to English and French listeners.

Bell has already told the hearing that it will divest 10 radio stations in five markets as part of the deal to buy Astral.