Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet When considering broadcasting

acquisition applications, share of all television viewing is the relevant factor to consider under the CRTCs own Policy
The CRTCs 2008 Diversity of Voices (DoV) Policy establishes share of all television viewing, as the criterion for assessing the ownership impacts of a proposed broadcasting acquisition The Commission considers, therefore, that an analysis of the share of all viewing to television - including viewing to both OTA and discretionary services - will provide a useful and accurate measure of ownership diversity in television. In the Commission's view, such an approach is more revealing than examining the ownership of individual broadcasting undertakings. (DoV Policy, par. 79)

English
Others 37% Bell/ Astral 33% Shaw/ Corus 30%

BCE/Astrals combined English television audience share is 33.5% and combined French television share is 24.4% Shaw/Corus has an audience share of 30% of viewing in English television about the same as BCE/Astral Quebecor has an audience share of 30% in French television significantly higher than BCE/Astral

French
Bell/ Astral 24% Quebecor 30%

Others 46%

Source: Bureau of Broadcast Media

Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet The CRTC incorrectly ignored Non-Canadian viewing
an analysis of the share of all viewing to television - including viewing to both OTA and discretionary services - will provide a useful and accurate measure of ownership diversity in television.
DoV Policy, par. 79

The CRTCs DoV policy considers ALL viewing when estimating audience share

Diversity of programming can mean several things, such as the expression of Canadian voices amidst foreign ones
DoV Policy, par. 18

barring other policy concerns, the Commission will process expeditiously transactions that would result in the control by one person of less than 35% of the total television audience share including audiences to both discretionary and OTA services.
DoV Policy, Appendix

5.3%
13.2% of viewing is to foreign services

1.8%

1.6%

1.0%

0.8%

0.5%

Other 2.2%

Number of Eligible Satellite Services 228

The number of nonCanadian programming services (i.e., authorized by the CRTC to be distributed in Canada) has increased by 135% in the last 10 years

148 97

2002

2006

2012

Source: based on CRTC data

A sampling of the nonCanadian services available in Canada

ABC, CBS, NBC, FOX, PBS various affiliates Al Jazeera American Movie Classics The Arts and Entertainment Network (A&E) BBC World Black Entertainment Television (BET) Bloomberg Television Cable News Network (CNN) 2

Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet The CRTC incorrectly ignored Non-Canadian viewing

A sampling of the nonCanadian services available in Canada

Cable Satellite Public Affairs Network (C-Span) CBS Sports Network CineLatino CNN Headline News (CNN-2) CNN International Comedy Central CNBC Court TV EuroNews Fox Business Network Fox News France 24 (English) France 24 (French) Game Show Network GEO TV The Golf Channel Headlines Today Channel TLC (The Learning Channel) Lifetime Television Military Channel MSNBC NFL Network Plante RAINews Speed Channel Spike TV Star Chinese Channel Star India News Channel Supercanal Caribe TV Japan Turner Classic Movies The Weather Channel (TWC)

Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet The CRTC relied on a 1978 CRTC Working Paper to guide its decision rather than its own 2008 DoV Policy Todays environment bears little resemblance to 1978 1978 2012
Over 700 licensed services: Few viewing options and no Canadian specialty TV channels: Broadcasting

and popular unlicensed services

Technology Adoption

Culture

Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet The CRTC relied on a 1978 CRTC Working Paper to guide its decision rather than its own 2008 DoV Policy Todays environment bears little resemblance to 1978 1978 2012

Gasoline: 17/litre

Gasoline: $1.20/litre

Economy Average Home Price: $55,000 Average Home Price: $363,000

University Tuition: $1,500/year

University Tuition: $5,400/year

Backgrounder CRTC Denial of BCE/Astral Deal Raises Need for Policy Direction from Cabinet Instead of relying on share of viewership, the CRTC relied on never-before used criteria to deny BCE/Astral transaction
CRTC used at least 18 new criteria to deny the BCE/Astral transaction None of the new criteria had previously been reviewed by industry participants None of the new criteria have standards, benchmarks, guidelines or objective measures to guide the industry or the Commission in future transactions New criteria used by CRTC (with paragraph number from CRTC Decision 2012-574): 1. 2. 3. 4. 5. 6. 7. Size of the transaction (para. 50, 54) Nature of the transaction (para. 54) Percentage of revenues from discretionary services (para.51) Percentage (by revenues) of top ten English- and Frenchlanguage discretionary services (para.51) Attainment of a significant position in sports, film and other premium programming in both languages (para. 51) Share of Canadian commercial radio revenues (para. 51) Viewership of joint ventures not controlled by either party to the transaction, i.e., channels where the parties hold a 50% ownership level (para. 53) Multiple indicators of market power, competition and ownership concentration (para. 54) Share of the number of Category A discretionary services (para. 55) Presence of the acquirer in the most attractive genres movies, sports and premium content (para. 55) Combined entitys ability to negotiate for every program rights window with programming suppliers and advertisers (para. 55) Acquirers ability to bulk buy (para. 55) Demonstration of how the proposed transaction would invigorate competition (para. 56) Explanation of how the proposed transaction would address the potential negative impact on independent entities (para. 56) Bias against the combined entity selling less profitable radio stations in order to meet the CRTCs Radio Common Ownership Policy (para. 57) Impact of the sale of radio stations required to meet the CRTCs Radio Common Ownership Policy on the potential for new competitors to enter the market (para. 57) Firm commitments regarding additional local and spoken word radio programming, or promotion and airplay of emerging Canadian artists (para. 60) Plans to invest in the radio operations and news of the acquired stations (para. 60)

8. 9. 10. 11. 12. 13. 14. 15.

16.

17.

18.