Cogeco calls Bell-Astral deal 'dangerous' and will make getting content tough

MONTREAL – The head of Cogeco Cable slammed the proposed Bell-Astral merger, calling it “very dangerous” and “particularly odious” and said it will make getting TV content on multiple platforms more difficult and expensive.

Cogeco CEO Louis Audet asked the CRTC on Wednesday to again block Bell’s revised $3.4-billion deal to buy Montreal-based Astral (TSX:ACM.A).

Audet said Cogeco has already been through a difficult round of negotiations with Bell over TV rights with a less than satisfactory outcome.

If this is what negotiations will be like if Bell acquires Astral, then “I beg you, don’t throw us into that,” Audet told commissioner Jean-Pierre Blais.

“Don’t throw any of us into that because eventually you will have one Canadian monopoly again and it won’t be us,” he said.

Audet said it’s regrettable the Canadian Radio-television and Telecommunications Commission doesn’t have the power to hand out fines for not playing by the rules.

The CRTC, however, did kill the Bell-Astral merger last fall, saying it wasn’t in the bet interests of Canadians and forcing Bell to revise its plan to buy Astral.

The new proposal among other things, would see Bell sell all of Astral’s English language specialty services and one of its English pay TV services. However, it would keep eight of Astral’s channels including the pay TV service, The Movie Network.

Audet said if the proposed merger goes ahead, not only will Bell charge unreasonable prices, but it will sell content rights on multiple platforms as a package.

“I submit to you that this is further evidence that this transaction is very dangerous and, in fact, I very much regret that we didn’t intervene when they bought CTV because then we wouldn’t be in this mess.”

Bell (TSX:BCE) bought the rest of the CTV assets in 2010 that it didn’t already own for $1.3 billion.

Audet said TV providers are already developing their own ways to deliver “TV everywhere” — across TV sets, tablets, computers and smartphones.

“It is particularly odious and troublesome to hear Bell come here and tell you they have this great idea: ‘We’re going to package all of this together and it will be our TV everywhere but we will make it available to everyone.’ That’s preposterous. That’s an insult to our intelligence and that is unfair.”

Cogeco Cable (TSX:CCA) is the country’s fourth largest cable provider and Cogeco Inc. (TSX:CGA) operates 13 radio stations in Quebec.

Other cable and telecom companies such as Rogers (TSX:RCI.B) and Telus (TSX:T) have also told the CRTC they fear that negotiations for content, especially for tablets and smartphones, will be too difficult and too expensive with a merged Bell-Astral.

Bell has said it wants to buy Astral’s specialty and pay TV channels to put content across traditional televisions, laptops, tablets and smartphones, and also to compete with online providers like Netflix.

In earlier testimony, telecom company Eastlink said the sale of some of Astral’s specialty TV and radio stations wouldn’t change Bell’s market dominance.

Eastlink CEO Lee Bragg said forcing Bell to sell Astral’s pay TV services the Movie Network and Movie Network Encore wouldn’t make enough of a difference to make the deal more palatable.

“I think the ultimate solution is: Don’t let it happen,” Bragg said of the deal.

Halifax-based Eastlink said it’s one 20th the size of Bell and it expects negotiations for shows and movies from Astral’s Movie Network for on-demand and mobile platforms to be even more difficult if Bell is allowed to buy Astral.

Eastlink said the Movie Network is the “anchor tenant” of its video on demand platform and will play a similar role in its mobile content service.

Recent experiences with Bell suggest that any such negotiations will likely result in Eastlink being unable to get Movie Network content on reasonable terms and rates, MacDonald said.

“Such an outcome would have a major impact on our ability to offer consumers the type of any time, anywhere TV viewing experience that they demand.”