Tag Archives: Bell

| Media, My articles, Radio

CRTC kills Bell-Astral deal, saving TSN 690

The larger story is that the Canadian Radio-television and Telecommunications Commission has rejected an application from BCE Inc. to acquire Astral Media Inc. This means that the companies will remain independent, and among other things CJAD and CTV won’t be owned by the same company.

The smaller story is the denial of a related application from Bell to convert TSN Radio 690 (CKGM) from English to French, to meet the commission’s common ownership policy. With the larger deal denied, the smaller one becomes moot. Bell said at the hearing that the latter was contingent on the former, and without approval of the larger purchase it would continue to operate TSN Radio as is.

This is the best possible outcome for TSN Radio and its fans. Any decision allowing Bell to acquire CJAD would have meant moving Canadiens games there, and TSN would have either been converted to French, sold or shut down.

The question is what will Bell do now. Does it still plan to launch RDS Radio in Quebec? If so, on what frequency and where? (The number of vacant AM frequencies in Monteral is going down fast.) Many people were looking forward to a French sports station that could take over where CKAC left off. Even many TSN Radio fans angry with the application said they would love to see a French-language all-sports station alongside the English one.

Requests for comment from people at the station were passed up the chain until I got an official “no comment” from Greg McIsaac at TSN. But privately, station staff are thrilled. As are fans, who expressed delight on Twitter. The language change would almost certainly have meant job losses at CKGM and possibly CJAD as well as the latter incorporated programming from the former.

UPDATE: Bell says it’s asking the federal cabinet to step in to reverse the decision. (Astral has nothing interesting to say yet.) The federal government says it will not overrule the regulator (whose chair it has just appointed), but Bell says it will formally ask for intervention anyway. Bell could also try to have the decision overturned in court, though it’s unclear under what grounds they would ask for a legal appeal.

In its angrily-worded statement, Bell also accused the CRTC chair of impropriety, saying he had met with Bell’s competitors but not with Bell. As the CRTC tells it, this is correct, but only because Bell had an application in front of the commission and it would have been improper to meet with Bell. The commission also says that at no time did the other companies discuss the Bell application with the CRTC ex parte.

| Radio

Three pleas to save TSN Radio 690

According to the CRTC’s website, 774 interventions (comments in favour, opposed or neutral) were filed related to a proposed licence change replacing CKGM (TSN Radio 690) with a French station. Of those, only six were scheduled to appear at a CRTC hearing at the Palais des congrès this week to present their case in person.

Of those six, only three showed up.

And yet, that’s three more than appeared as individuals to comment on the $3.38-billion purchase of Astral Media by BCE.

Rahul Majumdar: Willing to go further

Rahul Majumdar was the first. He’s a big sports fan and a fan of the station, but he has no other stake in this game.

“I’m not a professional intervenor nor do I play one on TV,” was his opening line, eliciting chuckles from the commissioners and the small audience. He may be inexperienced, but his presentation was professional, earning him specific praise from the commission.

“Eliminating TSN 690 may help Bell-Astral satisfy CRTC ownership rules, but the price will be a further erosion of Montreal’s sports broadcasting scene,” Majumdar said in his opening statement. “If the CRTC accepts Bell’s proposal, you will deprive Montreal of an important local sports media presence, and deny its rightful place within a national radio network.”

“Montreal is a bilingual, multicultural city and I believe that its sports fans must be served in both of Canada’s official languages.”

Bell’s proposed compromise of moving sports programs and Canadiens games to CJAD didn’t sit well with him. He said doing so would take away from CJAD’s core purpose, which is news and information.

Majumdar has harsh words for Bell: “I am dismayed at the manner in which Bell neglects, downplays and outright dismisses its English clientele and English Montreal sports radio.”

When I spoke to him after his presentation, Majumdar said he had been listening to CKGM for years, but when it first became a sports radio station “I wasn’t completely into it.” He cited nationally syndicated programming as part of the problem. But when it grew to be more local and gained its own personality, he became hooked.

At first he hadn’t planned to go beyond sending a written statement. But “you got to ask yourself: ‘Am I willing to go further?'”

So he did.

His proposal is that the CRTC reject the language switch, if only because Bell obtained the 690 frequency by saying it needed better coverage to reach the West Island anglophone community.

“At the very least, Bell should be ordered to surrender the frequency in order to allow another party to bring sports radio to Montrealers,” Majumdar’s statement reads. “Even so, it will take months or years for a competitor like Rogers, Cogeco or another Montreal media entrepreneur to essentially reinvent the wheel.”

“Mr. Chairman, in all honesty, does this specific application really make sense?”

It always looks funny when people appear in front of the CRTC without lawyers or executives by their side, sitting alone at a table meant for six (with another table behind), and introducing themselves as individuals without titles. But Majumdar’s presentation impressed other national journalists and interested third parties who came here to talk about Bell and Astral.

As for Majumdar himself: “I thought I did a decent job.”

Sheldon Harvey: No coincidence

Sheldon Harvey was the second presenter. He’s a radio enthusiast, moderator of the Radio in Montreal forum and co-host of the International Radio Report on CKUT. He’s about as tapped in to the radio scene as you can get.

Harvey also presented at last year’s hearing, in which Bell asked for CKGM to move from 990 to 690 to improve its signal. Harvey didn’t support or oppose that application directly, though he said he was skeptical of CKGM’s reported signal problems and even accused the station of not respecting its obligations to adjust its signal at night to protect distant stations.

Here, Harvey was extremely critical of Bell.

“I think it is more than coincidence that Bell began broadcasting on the 690 kHz frequency just 10 days prior to these hearings commencing,” his opening statement reads.

“The word on the street, in the radio business circles in Montreal, was that it was always the intention of Bell Media to get into the French sports radio business, piggy-backing off their successful RDS television service, particularly when Cogeco closed their CKAC 730 sports station in favour of government financed Radio Circulation. 690 would be the best frequency for them to accomplish this.”

Harvey’s right that Bell has wanted to launch RDS Radio for a while. It even hinted at that publicly at the hearing last year. But there’s no evidence (beyond the circumstances) that Bell was acting in bad faith or had ulterior motives when it applied to move CKGM to 690.

Harvey continues: “It appears that both Bell and Astral really don’t seem to care about their listeners. CJAD has an incredibly loyal listenership and is currently Montreal’s only commercial news/talk English option. How will their listeners feel about having approximately half of CJAD’s broadcast day dedicated to sports? Nobody is bothering to ask.”

“There is a level of arrogance and cockiness that has so many members of the public concerned about the power and strength of Bell and their attitude that ‘we are Bell and we will do and get what we want.'”

Finally, Harvey points to “corporate-level instructions” that Bell gave to TSN Radio staff not to discuss the station’s future on the air. This order, which Bell and TSN Radio have never denied, seems to contradict what Bell told the commission earlier in the week, that the company has never issued orders to its staff (meaning, for the most part, journalists) on how to discuss this hearing.

Harvey wants the CRTC to have to reapply to use 690 through an open application process, because a French station would be “a completely separate entity” from the English one. Commissioner Suzanne Lamarre called Harvey on this suggestion, asking what would happen. CKGM can’t stay on 990, because that frequency is already licenced to another broadcaster. Opening 690 up would mean turning in CKGM’s licence, and putting TSN Radio off the air.

“I threw everything at them that I could,” Harvey told me after the hearing. He’s particularly critical of the fact that Bell did not bother asking for an exemption allowing it to keep the station in English. “I think that would have been something to try at least,” he said. “It might not work, but at least try. Show you believe in your property.”

Harvey doesn’t know what the ideal solution is for CKGM, particularly if the Astral takeover is approved. A forced sale would mean the station losing not only its TSN branding and Canadiens rights, but other resources associated with TSN. It would be starting from “square one,” Harvey said, even if someone like Rogers or Cogeco came into the picture.

“They’ve painted the whole organization into a corner.”

David Birnbaum: Just wants the station saved

The last presenter to show up was David Birnbaum. He’s the executive director of the Quebec English School Boards Association, but made it clear he’s here as an individual.

“I love the station,” Birnbaum said. “It’s really intelligent radio.”

Birnbaum spoke as if a man here representing the anglophone community, even though that wasn’t his role here. But he invoked this idea that the community would be harmed if this station were allowed to change language, and that the CRTC has an obligation to protect minority-language services like this one.

His solution seems to be to allow Bell an exemption from common ownership rules. “My preferred position remains getting an additional frequency for a French-language sports station,” he said. “I would hope the CRTC would have said ‘yes we are the watchdog about media concentration, but we’re also a watchdog for the needs of Canadian consumers, particularly those in minority language situations.”

He understands the need for ownership concentration rules, but feels the need to keep English radio should be more important. “I would expect one rule to be trumped by another.”

How it’s solved isn’t his major concern. “Bottom line is to keep TSN 690 on the air,” he said.

Asked about a possible sale to Rogers or others, Birnbaum was, like Harvey, skeptical of how much that would set the station back. “You’re starting over,” he said.

All three presenters made it very clear they have no objection to a French-language sports station with the RDS brand. And, in fact, all of them welcome the eventual return of sports-talk radio to Montreal’s French community. They just don’t want it at the expense of TSN Radio.

“Francophones should have a sports station,” Majumdar said, “but it should not happen through the back door of a zero-sum game.”

Grateful

Three interventions might not seem like much, but they’re quite rare for the CRTC. Commissioners have repeatedly expressed disappointment that more individuals are not interested in the commission’s processes. (We can have a whole other discussion about why the excessive bureaucracy of the commission is preventing more participation.) So commissioners, and particularly chair Jean-Pierre Blais, repeatedly expressed to the individual presenters a great deal of gratitude for taking the time to make their views heard.

Whether those three make the difference for the commission is unknown. They might be given more importance than statements by interest groups, or they might not. But the commission certainly won’t ignore them. Neither will they ignore the hundreds of written statements sent in by people who wouldn’t or couldn’t appear in person, though Blais said those who do appear in person have a stronger impact.

Coverage

While the first and second days of the hearings received a great deal of coverage, there wasn’t much local interest in these three interventions today. In fact, Global Montreal was the only media to cover these appearances specifically.

The hearings continue on Friday, with the last of the intervenors in the Astral purchase. Then Bell will get a chance to respond to them, as well as to the comments about the CKGM application.

Prediction

People have asked me how I think this will end. I can’t predict that. The CRTC has a new chair, these applications have little precedent, and the commissions decisions aren’t always that predictable. The commission was definitely very skeptical about both applications Bell presented, but also grilled some competitors about their stances as well. Bell has a hard road to climb here, but not an impossible one. If I had to guess, I would say a compromise situation is most likely. But what that entails is hard to guess.

A decision will come in a few months. How many is unknown. The timing is up to the CRTC. It could be done by October, or it might not be done until January. It’s entirely up to them.

| Montreal, Radio

Bell’s response to critics of CKGM language change

This was actually published by the CRTC in late August, but hasn’t been publicized much. It’s Bell’s response to comments filed with the commission against its application to transform TSN Radio 990/690 from an English station to a French one to meet its common ownership limits after the purchase of Astral Media (which owns CJAD, CHOM and Virgin Radio in Montreal).

There were hundreds of comments filed, many from individual listeners (so much that the CRTC put up a special link on its home page to guide people through the process), but Bell responded to three.

To summarize:

  • Why didn’t Bell request an exemption to keep four English stations? Bell doesn’t answer this very well, repeating that it has to follow the common ownership policy. But, of course, the point of an exemption is to get around that policy. It would be more sensical to point out that an exemption would give Bell four of the five English commercial radio stations in Montreal, and the commission is unlikely to grant that without a very good reason.
  • Why can’t Bell run a bilingual station? The CRTC wouldn’t allow it, Bell says. And they’re right. For various reasons, the commission does not licence bilingual English/French commercial stations.
  • Why doesn’t Bell sell the station? They could. They’re doing that to 10 other stations in markets where they’re going over the limit. But since they want an RDS radio station, they’re trying this so they don’t lose that key frequency. The official response is that “there is no certainty that a purchaser would commit to the all sports format over the long term; nor is there any way to enforce such a commitment, even if made, as the Commission does not regulate radio formats.” This is true, though it’s also true that Bell itself would not be committed to such a format.
  • Shouldn’t 690 be reserved for an English station? There’s nothing tying this frequency to a particular language. It was the Radio-Canada station for decades, then Info 690. Last November, the CRTC issued a decision turning the historically French channel English and the historically English channel of 940 French. The two are coveted clear channels, with no special restrictions on nighttime power. The only other such channel here is 730, being used for all-traffic at CKAC. That said, Bell’s application to move CKGM from 990 to 690 was based in large part around how poorly the signal reached its core West Island anglo audience at night, when the Canadiens games are on. The commission could decide that this, combined with the fact that the other two clear channels are French-language, would be enough to either reject the application or issue an open call for applications to use this frequency.

The entire response is republished below. Bell makes its presentation in the CKGM licence change Tuesday at 8am in Room 518 of the Palais des congrès, at which point it will release a separate document making its case for the change. The commission will hear from intervenors in favour and opposed until Friday, and then a response from Bell.

The hearing is streamed live at cpac.ca, and on the CPAC TV channel as of 10am.

2012 08 20

To: Mr. John Traversy

Secretary General

Canadian Radio-television and Telecommunications Commission

Subject: Application 2012-0573-2 – CKGM Montréal (the CKGM Application)

Dear Mr. Traversy,

This letter is filed by Bell Media Inc. (Bell Media) in response to the comments by Messrs. Pacetti and Scarpaleggia, the MPs for Saint-Léonard/Saint-Michel and Lac-Saint-Louis, respectively, and by Dufferin Communications Inc. (Dufferin) (collectively referred to as the Interveners).

In the CKGM Application, Bell Media seeks the Commission’s authorization to convert our English-language AM sports talk radio station (currently operating as TSN 990) into a French-language sports talk radio station (to be known as RDS Radio). As set out in the Supplementary Brief filed with the CKGM Application, this Application is dependent on the Commission’s approval of the application filed by Bell Media for the acquisition of control of Astral Media Inc. (the Astral Application). In the event the Astral Application is approved, the CKGM Application is the necessary means by which Bell Media will ensure that it is fully in compliance with the Commission’s Common Ownership Policy.

Before addressing the concerns of the Interveners, Bell Media would like to thank the many groups that filed interventions in support of the CKGM Application. As described in their comments, these interveners recognize that the conversion of CKGM from an English- to a French-language sports radio station will result in several distinct benefits to the Montréal radio market. With the Commission’s approval, CKGM will become Montréal’s Francophone sports authority, offering fans a radio option not currently available in the Montréal market.

In his intervention, Mr. Pacetti, the MP for Saint-Léonard/Saint-Michel, asks the CRTC to permit Bell Media “to operate both a Francophone and Anglophone all sports radio station simultaneously” or “allow for the possibility of creating a bilingual station” so that “one community’s loss should not be another community’s gain”. While we sympathize with Mr. Pacetti’s desire for two sports radio options in each official language, this is simply not possible given the strict limits set out in the CRTC’s Common Ownership Policy.

The Common Ownership Policy imposes a strict cap on the number of stations that Bell Media may own in Montréal and the conversion of CKGM is the means by which compliance with the policy can be ensured in light of the Astral acquisition.

Another potential option would be the divestiture of the station to a third party. However, in a divestiture scenario, there is no certainty that a purchaser would commit to the all sports format over the long term; nor is there any way to enforce such a commitment, even if made, as the Commission does not regulate radio formats.

Under these unique circumstances, we believe that transforming CKGM into a French-language sports talk radio station is the best option available to Bell Media at this point in time, as it will ensure that the Montréal market has the benefit of at least one all sports radio station, rather than leaving both the francophone and anglophone communities in Montréal without a sports talk radio station. It is also important to highlight that Montreal’s anglophone community will continue to receive coverage of sports in English as sports programming shifts from TSN Radio 990 to CJAD.

Mr. Scarpaleggia, the MP for Lac-Saint-Louis questions why Bell Media has not applied to the Commission for an exemption to the Common Ownership Policy, noting that the English-speaking community’s interests are better served by having CKGM serve anglophone communities in Montréal.

As set out above, Bell Media’s decision to convert CKGM from an English-language to a French-language sports talk radio station is required to ensure that Bell Media is in compliance with the CRTC’s Common Ownership Policy, which set outs very clear, unequivocal caps on the amount of radio stations that can be owned in one market. In the past, exemptions have been granted very sparingly.

In its intervention, Dufferin argues that approval of the CKGM Application would call into question the integrity of the Commission’s licensing process with respect to the use of the 690 kHz frequency, which was awarded to Bell Media in 2011.

In Decision 2011-721, the Commission approved our application for a technical amendment to move CKGM from 990 kHz to 690 kHz as a means of addressing severe reception problems caused by a defective signal. The primary purpose of the 2011 application was to rectify a severe signal problem by eliminating the need for CKGM to switch to a low-power night-time contour, which significantly reduced the signal’s coverage area. The technical amendment that was granted rectifies the signal problem, regardless of the language or format the station operates in. Thus, approval of the technical amendment, followed by a change in the station’s language of operation does not, in our submission, call into question the integrity of the Commission’s licensing process.

We note that following approval of the technical amendment, CKGM could have changed formats and there would have been no basis for claiming that such a change affected the integrity of the Commission’s process. Moreover, should the Commission approve the CKGM Application, French-language listeners in Montréal would benefit immensely from the enhanced night-time coverage and signal quality that will be realized as a result of the previously approved technical amendment, especially in light of the fact that there are currently no French-language radio stations dedicated to sports news and information in Montréal. Thus, regardless of the outcome, Montréal listeners will benefit from CKGM moving from a defective to a clear signal.

To support its position, Dufferin argues that approval of the CKGM Application and the Astral Application would allow Bell Media to operate six radio frequencies in Montréal and that this substantial concentration of ownership would redefine the playing field envisioned by the Commission in Decision 2011-721. We note that under the Common Ownership Policy, Bell Media is permitted to own the six commercial radio stations that would result from approval of the Astral Application and the CKGM Application. Thus the conversion of CKGM is entirely in compliance with the Common Ownership Policy and it is disingenuous for Dufferin to claim that ownership of a number of stations that is expressly permitted under the policy somehow constitutes excessive concentration of ownership. In fact, one party could technically own seven stations in Montréal (four French and three English) and still be in compliance with the policy.

Dufferin also argues that approval of the CKGM Application would result in a major financial impact on the Montréal radio market. This claim is simply not credible. As is evident from the financial projections filed with the CKGM Application, Bell Media is projecting that it will experience a cumulative loss of over $12.6 million over the first licence term if the CKGM Application is approved by the Commission. Further, as set out in the Supplementary Brief filed with the CKGM Application, a comparison of the total retail sales and radio advertising revenues in the Montréal and Vancouver CMAs indicates that Montréal radio is underperforming relative to retail sales. Thus, there is upside potential for radio advertising sales in the Montréal French-language market if more radio format choices are offered. Therefore, contrary to Dufferin’s assertion, the CKGM conversion would not have a major financial impact. Instead, all indications are that it would have a stimulative effect on the French-language radio market by increasing hours tuned to radio.

The decision to convert CKGM from an English-language to a French-language sports talk radio station has been a difficult one. Unfortunately, the limits imposed by the Commission’s Common Ownership Policy are such that the conversion of CKGM appears to be the best option available to Bell Media at this time, as it will ensure at least the ongoing presence of a sports radio format in Montréal. We are committed to continuing to provide Montréalers with a dedicated sports radio station and creating a vibrant Montréal radio market, while working within the parameters of the Common Ownership Policy.

We trust this responds to the Interveners’ concerns. A copy of this letter has been served on the Interveners, in accordance with the CRTC’s Rules of Practice and Procedure.

Yours truly,

Kevin Goldstein

Vice President – Regulatory Affairs

UPDATE (Sept. 11): Bell presented its case in person to the commission Tuesday morning. You can read its prepared notes here (PDF), and my story summarizing the hearing for The Gazette here.

| TV

Bell plans French all-news channel

As part of an expanded benefits package presented to the CRTC in its proposed purchase of Astral Media, Bell on Monday said it would create a French-language all-news specialty channel based in Montreal that would compete with LCN and RDI.

You can read more in this story I wrote for The Gazette. Nothing is set in stone yet. They haven’t even applied for a licence, and will wait until a decision comes on the Astral purchase to do so, since this would be contingent on the CRTC accepting the purchase.

But Bell’s plan, should the CRTC accept it, is to put $20 million of its tangible benefits package toward the creation of this channel. Bell Media President Kevin Crull clarified that the funding put into the network would be far higher than that, particularly at first.

The network would be the third French all-news channel in Canada, behind RDI and LCN. That alone has some wondering if the market can support it. Bell made it clear at the hearing that it had no plans to do this before Astral came into the picture. Apparently it was Astral’s idea, in fact.

Crull said that the channel might launch some time in 2013. Considering the delays involved, I would suspect no earlier than fall 2013, and even then I think that’s optimistic.

Good for CTV Montreal?

No plans are set as far as things like how many bureaus there would be or what kind of equipment they would have. We just know it would be based in Montreal. Either way, the addition would be good for CTV’s Montreal news operation if the two sides share resources like Radio-Canada and CBC do. The ability to get video from Quebec’s regions is one of CBC Montreal’s main advantages over CTV.

But this is all speculation at this point. If the CRTC rejects the Astral purchase, this project dies. And it’s not a given that CTV and this new channel would do resource-sharing, even if that would make a lot of sense.

Good for V?

This news also brings up some interesting thoughts about Bell’s future in Quebec. Bell was asked at the hearing how it would compete with Quebecor’s TVA, whose strength is in conventional television, if they don’t own conventional over-the-air TV stations in French Quebec. Bell said the line between conventional and specialty television is getting blurry.

A Bell takeover of the V television network, which is currently owned by Remstar as an independent player, might make sense with this new channel. The two could also share resources or even be co-branded, and V could go from being a non-factor in local news to being a serious competitor for TVA and Radio-Canada.

Bell potentially buying V has been rumoured and speculated for a while now, particularly since V started showing a profit. But Bell might be hesitant trying to justify another major acquisition before the CRTC.

Coverage

| Media, My articles, Radio, TV

Bell/Astral CRTC hearings: Day 1

This is it, folks. The Canadian Radio-television and Telecommunications Commission begins hearings at 9am into Bell’s proposed $3.38-billion purchase of Astral Media, and a related application to convert CKGM (TSN Radio 690) from English to French.

The hearings will be broadcast live at CPAC.ca and even covered live on the television channel as well. The CRTC also has its own audio feed of the hearings. Each is offered in both languages.

And, of course, I’ll be covering them as well. Stay tuned here for updates as they happen. Follow me on Twitter. That’s easier.

In the meantime, you can read my piece in Saturday’s Gazette about the war over specialty channel carriage contracts, and my other piece setting up the hearings.

| Media, Navel-gazing

My first quote in an ad

Journal de Montréal, Aug. 25, 2012, page 30

I was in the papers over the weekend. Well, some of them anyway.

As opposition grows over the planned Bell purchase of Astral Media (a new campaign was just launched today), Bell and its opponents are multiplying their use of full-page newspaper advertisements to fight the public relations war.

Continue reading →

| Opinion, Radio, TV

“Say No To Bell”: The hypocritical campaign against Bell/Astral

After staying silent for months following the announcement in March, a small group of cable companies has started a very public campaign to get people to oppose the proposed purchase of Astral Media by BCE (Bell).

Full-page ads from Say No to Bell (Quebecor, Cogeco and Eastlink) appeared in major newspapers on Tuesday.

It’s called Say No To Bell (Dites non à Bell), and it launched Tuesday with a press conference in Ottawa with the CEOs of Quebecor (which owns Videotron), Eastlink and Cogeco. They gave the usual arguments against concentration of media ownership, saying Bell could abuse its dominant position to unfairly harm competitors, consumers and even advertisers. Specifically, it said:

  • “When too much power is concentrated in one company it often means higher prices and poorer choices for consumers”
  • “If Bell Canada controls all the most popular content, they could charge you whatever they want to watch it.”
  • “A Bell/Astral merger could lead to an organization so dominant that no other company could compete with it to buy sports broadcast rights”
  • “To get popular channels, you could face pressure to pay for other Bell Canada channels that you are not interested in watching.”
  • “This merger could mean escalating costs for commercial advertising on television and radio and forced buys on multiple Bell Canada advertising platforms for Canadian advertisers.”
  • “Bell Canada could use its power to pressure consumers to buy their services exclusively in order to get the content they love, and buy more services than they need.”
  • “If the deal goes through, it poses a serious threat to the future health of the broadcast industry in Canada. Jobs will be lost in the TV production and arts sectors. Young people hoping to build a career in these fields will see fewer opportunities as production is centralized.”
(They also point to a list of quotes from various media writing about the deal, including three from me.)

All that stuff sounds pretty scary. But it’s also a lot of “could” and very little “will”. And the statements seem to ignore that the CRTC has specific rules that are designed to prevent most of the things they worry about. Distributors are not allowed to show undue preference to affiliated channels, and they are required to carry channels owned by competitors (and include those channels in packages where their own channels are included). Specialty channels, meanwhile, are not allowed to charge excess fees, nor refuse to offer their channels individually.

That’s not to say there aren’t legitimate worries here. Media concentration wouldn’t be happening if it didn’t result in a significant advantage. Larger companies are more efficient (centralizing paperwork and technology, for example), and even though there can’t be any formal advantage given to affiliated services, it happens in practice. (Cogeco gave the example of Bell’s RDS2, which it said was withheld from it for months until an arbitrator imposed a deal.) There are also advantages to be had in areas the CRTC doesn’t regulate, like online video.

Chart of Canadian market share by the Say No To Bell campaign.

Hypocrites

But arguments against media concentration are a bit rich coming from Quebecor and Cogeco. (I’ll leave Eastlink out of this since I don’t know them very well and they’re not a vertically integrated company.)

Quebecor’s name is practically synonymous with convergence and media concentration. It owns the largest private television network in Quebec, the largest newspaper (in terms of circulation), the largest cable company and the largest magazine publisher. It has been scooping up independent weekly newspapers in Quebec as it fights a war with Transcontinental in that industry. And it has absolutely no qualms about using its convergence power across different media.

Though Quebecor seems concerned with how big a combined Bell/Astral would become, Quebecor’s French-language television market share would still be higher, at 29.6% to 26.8%. (Say No To Bell prefers to speak of revenues, which skews heavily in favour of Astral in both languages because Astral owns the expensive premium movie services The Movie Network and Super Écran.)

Cogeco, meanwhile, is ill-placed to talk about the negative effects of market share. It was just last year that it purchased Corus Quebec, combining two of the three major players in radio in this province. As if that wasn’t enough, it asked for – and received – an exemption from the CRTC to allow it to own three French-language FM radio stations in Montreal, in addition to an English FM station and a French AM station. Combined, Cogeco-owned stations have a 51.4% market share among francophone Montrealers according to ratings data from BBM Canada. Counting only commercial stations, that market share jumps to 65%. In Quebec City, Cogeco has a 40% commercial market share, nine points more than its strongest competitor.

And even then, it applied to the CRTC to launch two more AM radio stations in Montreal, both heavily subsidized by the Quebec government. (One application was withdrawn when it turned CKAC into an all-traffic station, the other was denied because of a lack of acceptable alternative frequencies.)

These are the people warning about concentration of media ownership.

Perhaps the biggest example of hypocrisy is when Quebecor and Cogeco were asked during the press conference whether they tried to buy Astral. Cogeco’s Audet refused to answer the question, saying it was irrelevant. I take that to mean they probably did try, but lost to the big pockets of Bell.

Bell/Astral rounding up support

It’s interesting that none of these three companies has yet submitted a formal intervention to the CRTC in this case (or if they have, those comments haven’t been published yet). But supporters of the deal have been flooding the commission with comments. Of the more than 450 comments about Bell’s purchase of Astral, most are from organizations that have dealings with one or both companies, and support the purchase either because of the tangible benefits package they would receive in it or just out of some apparent sense of corporate loyalty. (The number of them and their similarity suggests that Bell is pushing its business contacts to submit them, and it’s not clear what incentives they’re using.)

Among those to send their support are charities like the Saskatoon SPCA and Canadian Cancer Society, TV producers like Novem, Groupe Fair-Play and Zone 3, territorial legislators (because of the proposed upgrades to Northwestel) and major advertisers like Loblaws.

The CRTC accepted comments on this application until 8pm ET on Aug. 9, with hearings to take place in Montreal on Sept. 10. The Competition Bureau, which also has to approve the deal, issued a statement Tuesday saying it is “aware that a number of serious concerns have been expressed” and that “we are actively reviewing these concerns.”

Let’s hope both regulatory bodies can sort the truth from the BS being thrown at them from both sides.

Coverage

Other reactions

Bell responded to the campaign with a press release focusing on how the acquisition would increase, not decrease, competition in Quebec.

Even though the purchase was announced in March, and the CRTC application published a month ago, other groups are only now making their voices heard in the Bell/Astral acquisition debate. (Though this is also because many of them filed interventions at the last minute.) Among them:

Telus joins in

Even though it was days after the deadline for comments to the CRTC, Telus also issued a public statement encouraging a stop to the deal. Telus filed an intervention with the CRTC making a similar call.

Looks like it’s working

A poll by Forum Research shows 60% of Canadians oppose the Bell/Astral merger. Is that just a matter of their distaste for large corporate mergers, or evidence that the Say No To Bell campaign is working? Either way, I predict lots more full-page newspaper ads.

| Montreal, Radio

Bell to convert TSN Radio to French

Well, this is a shock.

As part of its acquisition of Astral Media, including CJAD, CHOM and CJFM in Montreal’s English market, Bell Media has decided that rather than sell one of the four English stations it would own here, it is going to keep all four of them but convert one to French.

As such, Bell announced Tuesday that it has applied to the CRTC to convert CKGM (TSN Radio 990) to a French-language all-sports station named RDS Radio 990. (Actually it would be RDS Radio 690, since the station is moving to that frequency.) Bell expects the switch to happen by Jan. 1, 2013, though that’s dependent on how fast the CRTC makes a decision. It says it is prepared to make the change within 120 days of the CRTC’s decision.

The CRTC’s competition rules require that a common owner control no more than three stations in a market of fewer than eight commercial stations (English Montreal has five), and no more than two AM and two FM stations in a market of more than that (French Montreal has eight). Since neither Astral nor Bell have a French-language AM station in Montreal, converting the station to French would allow them to keep it.

TSN Radio 990, formerly The Team 990, has always struggled as a low-rated station, but there was a feeling over the past few years that it had finally found a niche that worked after various other failed attempts at different formats.

Continue reading →

| Opinion, TV

Specialty channel war is screwing customers

UPDATE (Nov. 23): We have a truce! RDS2 has come to Videotron, while TVA’s channels including TVA Sports and Sun News are coming to Bell TV.

This fall, two new all-sports networks are being launched. One, RDS2, is owned by Bell Media. The other, TVA Sports, is owned by Quebecor’s Groupe TVA.

Personally, I think this is good news. Competition for viewers will do good things, like bring Montreal Impact games to the TV screen. And the CRTC has determined that sports channels – currently the most profitable format – are healthy enough that they shouldn’t be restricted from competition. (Not healthy enough for Radio-Canada and Rogers to jump in the fray, but still healthy).

But you can’t get TVA Sports if you’re a subscriber to Bell TV. And it’s not clear if you’ll be able to get RDS2 if you subscribe to Videotron (it has deals with only Bell and Shaw so far). That may change (RDS2 is most likely doomed to failure if it can’t get Videotron carriage), but even if it’s just a delay, this is yet another example of two companies whose affiliated television distribution services are giving undue preference to their affiliated specialty channels.

Another example in the sports sphere is TSN Habs, a part-time regional offshoot of the TSN channel that has regional English-language broadcast rights to some Canadiens games. It’s available on Bell TV, but not on Videotron, despite Videotron’s huge subscriber base in Quebec, where I understand the Canadiens are popular – even among anglophones.

Sports isn’t the only type of channel where this problem exists. In the past few years, broadcasters have applied for and received dozens of licenses for unregulated specialty channels – the so-called “Category 2” channels that aren’t protected from competition and have low requirements for Canadian and original content. In exchange for some liberties in programming, the channels have no guaranteed carriage, so cable and satellite companies can choose whether or not to include them in their lineups, and the broadcasters can choose to charge whatever they would like.

Quebecor has been particularly active in this field, launching a bunch of new channels (including TVA Sports), many of them in high definition. In all cases, those channels are immediately carried on Quebecor-owned Videotron’s cable system, but few of them are on Bell TV.

To give you an idea of what’s going on here, I’ve compiled a table below of specialty channels owned by the big cable and satellite companies (Cogeco is included for reference, but doesn’t own any specialty channels). I’ve limited the list to those channels that are either Category 2 (unregulated, with no guaranteed carriage) or that have high-definition feeds available.

I’ve marked in bold where a service is offered by the affiliated distributor that is not offered by at least two of its competitors, suggesting undue preference. I’ve marked in red where the opposite is true, where a service is not offered by the affiliated company but is offered by at least one competitor.

Channel Owner Bell TV Videotron Shaw Direct Cogeco Rogers Cable
Discovery Bell Media (64%) SD/HD SD* SD SD SD*
Space Bell Media SD/HD SD SD SD SD
MuchMusic Bell Media SD/HD SD SD SD SD/HD
MuchMoreRetro Bell Media X SD X SD(O) SD
MuchLOUD Bell Media X SD X SD(O) SD
Much Vibe Bell Media SD SD X SD(O) SD
PunchMuch Bell Media SD SD X SD(O) SD
Comedy Gold Bell Media SD SD X SD(O) SD
Investigation Discovery Bell Media SD SD X SD(O) SD
Discovery World Bell Media (64%) HD HD HD HD HD
ESPN Classic Bell Media (80%) SD SD SD SD SD
NHL Network Bell Media (17%) SD SD SD SD SD
TSN2 Bell Media (80%) SD/HD SD/HD SD/HD SD/HD SD/HD
TSN Habs Bell Media (80%) SD/HD X SD/HD X X
LCN Groupe TVA SD SD/HD SD SD/HD(Q) SD
CASA Groupe TVA SD SD SD SD(Q) SD
Prise 2 Groupe TVA SD SD SD SD(Q) SD
Mlle Groupe TVA Dec. 15 SD/HD SD SD/HD(Q) X
TVA Sports Groupe TVA Dec. 15 SD/HD SD/HD X X
Sun News Groupe TVA Dec. 15** SD/HD SD SD/HD(O)** SD**
Yoopa Groupe TVA Dec. 15 SD/HD SD SD/HD(Q) X
Showcase Shaw Media SD/HD SD SD/HD SD/HD(O) SD/HD
Showcase Diva Shaw Media SD SD SD SD SD
Action Shaw Media SD SD SD SD SD
BBC Canada Shaw Media (80%) SD SD SD SD SD
DejaView Shaw Media SD SD SD SD SD
DIY Network Shaw Media (80%) SD SD SD SD(O) SD
Dusk Shaw Media SD SD SD SD SD
Fox Sports World Canada Shaw Media (58%) X SD SD SD SD
Global Reality Shaw Media X X X X SD
Food Network Shaw Media SD/HD SD SD SD SD
History Television Shaw Media SD/HD SD SD/HD SD/HD(O) SD/HD
HGTV Canada Shaw Media SD/HD SD SD/HD SD SD
Movietime Shaw Media SD SD SD SD/HD(O) SD/HD
Rogers Sportsnet One Rogers SD/HD X SD/HD SD(O)/HD(O) SD/HD
Sportsnet Sens/Flames/
Oilers/Vancouver Hockey		 Rogers SD/HD X X SD(O) SD/HD
OLN Rogers SD SD SD SD SD/HD
Setanta Sports Rogers SD/HD SD SD/HD SD(O) SD/HD

(Q)/(O): Denotes channels that Cogeco carries in Quebec or Ontario only.

*Discovery World HD, a separately licensed channel, is available on Videotron.

**The situation with Sun News is complicated by the fact that a conventional TV station was broadcasting its content. Rogers, Cogeco and Bell carried the conventional signal, but Sun News asked Bell to pull the channel or start paying for it.

You can see in the chart 12 instances among the 37 channels where there is evidence of undue preference. This does not necessarily prove such a thing – there could be all sorts of reasons to choose whether or not to carry a channel – but it’s annoying nonetheless for customers who want a certain channel and can’t get it for no apparent reason other than it’s owned by the wrong cable company.

You’ll also see four (UPDATE: five) instances where a service isn’t offered by the affiliated company. It’s worth noting that all of those services predate their ownership by the affiliated cable/satellite company.

The CRTC actually has a rule against this sort of thing. It’s called “undue preference”, and it is supposed to prevent just this sort of thing. The problem is that it’s hard to prove. Negotiations between broadcasters and distributors are secret, and we don’t know how much each distributor is paying for each channel.

Still, this may come to a head soon. Sun News has filed a complaint with the CRTC alleging undue preference on the part of Bell when it pulled the station’s signal and refused to pay for it.

Hopefully the CRTC will take a close look at this issue and do something about it before the flood of new channels makes the problem – and viewers’ frustrations – even worse.

Quebecor begins hypocritical outrage campaign

UPDATE (Sept. 20): QMI Agency has published a joke of a news article by Raphaël Gendron-Martin. It quotes only TVA’s Pierre Dion bashing Bell and Cogeco for not carrying TVA Sports, and makes no apparent attempt to contact Cogeco or Bell for comment. The hit piece appears in the Journal de Montréal (on the front page), 24 Heures, TVA Nouvelles and Argent (twice). Dion also appeared on LCN and TVA’s Salut Bonjour, where again no apparent attempt was made to contact Cogeco or Bell for comment, no mention was made of RDS2 or TSN’s Habs channel not being on Videotron, and Dion went unchallenged on anything he said. (In the case of Salut Bonjour, it’s clear host Gino Chouinard is being fed his questions and even refers to Dion as “boss” at the end.)

Despite what I am unfortunately forced to conclude (to use Dion’s logic) was an organized misinformation campaign from Quebecor that abused its media power, Cogeco did respond by way of an open letter (PDF) that was also published on Facebook. Cogeco said it was interested in carrying TVA Sports and even made an offer that TVA refused.

No (public) word yet from Bell.

I sent an email to Gendron-Martin asking him about his article. He responded by pointing to full-page piece in Tuesday’s paper by Danny Joncas, which quotes representatives of Bell and Cogeco. Gendron-Martin did not respond to questions about why he didn’t contact Bell or Cogeco before writing his piece, nor why he didn’t mention Videotron not carrying RDS2, nor whether he was ordered by his employer to write this article in this way.

Joncas’s reaction piece was not posted online, either by the Journal or by any other QMI website. The original article from Gendron-Martin still appears on those websites unaltered, with no indication that there has since been a response.

Joncas’s piece quotes both Bell and Cogeco saying these negotiations should be conducted privately instead of in the media, and that both are negotiating with TVA. It also says TVA rejected Cogeco’s offer because it wanted better placement in Cogeco’s specialty channel packages.

UPDATE (Sept. 23): The CRTC has released new rules concerning this issue (press release, decision, Globe and Mail story). It offers some specific rules (no mobile/Internet exclusivity deals for TV programs), but also includes a lot of rules barring things that are “unreasonable” or “excessive”, which leaves a lot of room for disagreement over what qualifies as unreasonable.

It also pushes off a lot of decisions until later, including whether cable and satellite companies should be required to offer à la carte subscriptions (though they seem to be moving in that direction).

Whether those new rules will change how these big telecom companies deal with each other is to be seen.