ONE STEP CLOSER
BCE passes test in MTS deal
The Canadian Radio-television and Telecommunications Commission approved the transfer of Manitoba Telecom Services Inc.’s broadcast licences to BCE Inc., the first of three approvals needed in Bell’s $3.9-billion bid to buy MTS.
The CRTC ruled Tuesday on an application by MTS to transfer the ownership and control of its terrestrial broadcast distribution undertaking to Bell Canada as part of the planned acquisition the companies announced in May.
“The commission finds that the transaction does not raise concerns with respect to applicable commission policies and regulations and that it does not trigger the payment of tangible benefits,” the decision stated.
“Furthermore, Bell committed to invest in infrastructure in Manitoba, including in markets that are currently unserved, which will benefit the broadcasting system.”
The deal also includes all MTS telecommunications services, but the CRTC’s approval is not required to transfer those assets. The CRTC noted its ruling, which only applies to a small section of the broader transaction, is not sufficient for the deal to proceed.
For that, Bell and MTS need to pass muster of the Competition Bureau and Innovation, Science and Economic Development Canada. The deal gets trickier when it comes to telecom, particularly wireless, since it could take the number of wireless players in Manitoba down to three from four. Consumer advocates say that could lead to less choice and higher prices in a province where residents currently enjoy some of the lowest rates in Canada.
The Liberal government has yet to explicitly say whether it intends to follow the Conservatives fourth carrier policy, a populist attempt to bolster competition in a wireless industry dominated by the Big Three of Rogers, Bell and Telus. But Navdeep Bains, minister of innovation, science and economic development, has hinted that he is in favour of competition.
As part of the deal, Bell promised to transfer some of its customers to Telus to level the market share between the Big Three in Manitoba. Industry watchers suspect Innovation, Science and Economic Development Canada and the Competition Bureau could attach more conditions to the deal, such as the transfer of spectrum to Shaw’s Freedom Mobile to ensure four players in the province.
Regulators have taken an unusually long time to rule on the transaction. MTS shareholders strongly support the deal. If it goes through, Bell has promised to invest $1 billion in infrastructure over the next five years.
The Association of Manitoba Municipalities, which represents 137 municipalities including Winnipeg, along with mayors from Thompson and Churchill wrote to the CRTC in support of the deal and the investments that are expected to follow. Numerous charities also wrote in support of the deal.
The Consumers’ Association of Canada Manitoba told the CRTC it opposes the deal, noting that MTS offered Internet protocol television faster than Bell did. It cited fears of fewer choices and potential price increases as reasons for its opposition.
On Screen Manitoba told the CRTC it was excited about the promise of more broadband investment but expressed concern they’d lose local programming.
In the decision, the commission did not impose additional local programming requirements on Bell.