Canuck Radio Giants Challenge Regulator’s Right to Intervene in Takeover

03 January 2002

Two Canadian radio groups, Astral Media – the nation’s largest operator of French and English specialty, pay and pay per view TV services – and Telemedia Corporation, have separately filed motions with the Federal Court of Canada. Both challenge the right of the nation’s Competition Bureau to oppose Astral’s acquisition from Telemedia of seventeen radio stations.

Including a number of Quebec-based French language stations, the proposed purchase also includes English-speaking stations in New Brunswick and Nova Scotia – the first in Astra’s portfolio if the $255 million in cash and stock deal goes through.

The Competition Bureau’s main concern is that the sale would confer too much advertising muscle on Astra, stifling competition in four major markets: Chicoutimi/Jonquiere, Ottawa/Hull, Sherbrooke and Trois-Rivieres.

The bureau also fears curtailment of competition in Quebec City and Montreal, where Astral already has six stations. Observers believe the regulator will demand the sale of those stations as a quid pro quo for approving the purchase.

However, the radio barons argue that the Competition Bureau has no jurisdiction in the matter, citing the Broadcasting Act which names the Canadian Radio-Television and Telecommunications Commission as the sole regulatory body for the nation’s radio industry.

But their argument appears to have been undermined by an anonymous spokesperson for the latter who told Montreal daily newspaper The Gazette that so far as the CRTTC is concerned, the Competition Commission is empowered de facto to intervene if it so decides.

News source: AdAge Global