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Bell shocked by CRTC rejection of Astral transaction, requests Cabinet intervention

Bell shocked by CRTC rejection of Astral transaction, requests Cabinet 
intervention 


    --  Bell will ask federal Cabinet to issue direction to CRTC to
        follow its own regulatory policy
    --  Decision a breach of the CRTC's Diversity of Voices policy, and
        protects cable conglomerates and rewards their extraordinary
        and obstructive lobbying efforts
    --  CRTC decision denies Canadians hundreds of millions in new
        content funding, innovative new broadcast services, enhanced
        programming choice and competition

MONTREAL, Oct. 18, 2012 /CNW Telbec/ - BCE Inc. (Bell) today announced it will 
request that the federal Cabinet intervene in the CRTC's decision to reject 
Bell's acquisition of Astral Media. Bell is appalled that the CRTC would come 
to a decision that so negatively impacts Canadian consumers and the national 
broadcast industry, contravenes its own policy and is tainted by 
behind-the-scenes lobbying by Bell's cable rivals.

"This is a decision that should not stand. Canadian consumers were told today 
by the CRTC that they don't deserve more - more choice, more competition, more 
Canadian content funding - all of which Bell and Astral committed to with this 
transaction," said George Cope, President and CEO of Bell Canada and BCE Inc. 
"We met all the CRTC's rules, indeed our acquisition of Astral was based 
directly on the CRTC's currently in-place Diversity of Voices policy. The 
wide-ranging benefits to Canadians of the transaction are clear, but the CRTC 
has told consumers that they and the rules in place just don't matter."

In its 2008 Diversity of Voices regulatory policy, the CRTC confirmed that it 
would approve broadcasting transactions resulting in a company controlling 
less than 35% of total TV audience share. Bell and Astral combined would have 
an English-language TV market share of 33.5% and just 24.4% of the 
French-language TV market, both well within the rules (it is worth noting that 
this would put Bell-Astral on par with cable company Shaw/Corus, which has a 
30.2% share of English-language TV, and well behind cable company Quebecor's 
existing 30% share of French-language TV).

With this CRTC policy in place, and which Bell logically used as its guide in 
acquiring Astral, the CRTC instead quotes a working paper from 1978, a single 
application from 1986 and a 1989 public notice to justify its rejection of the 
Bell-Astral transaction in 2012.

"The CRTC's decision reflects a bygone era, based on antiquated working papers 
from the 1970s and 1980s that have little bearing on modern Canadian 
broadcasting, and completely ignores its own most recent policy. Canadian 
broadcasting needs significant new investment, fresh ideas and increased 
choice in a time of cable company dominance in media and accelerating 
competition from foreign giants who invest little to nothing in the Canadian 
broadcasting system," said Mirko Bibic, Bell's Chief Legal and Regulatory 
Officer. "Considering the dire impact the CRTC's decision will have on 
consumers in communities small and large, the blow it delivers to confidence 
in Canada's regulatory system, and the fact that the CRTC worked so closely 
with cable companies to arrive at its conclusions, Bell is compelled to launch 
its request to the federal Cabinet to direct the CRTC to actually follow its 
own in-place policy."

Bell has confirmed that senior CRTC officials met privately with Bell's cable 
competitors multiple times in the days and weeks before the commission began 
its public hearings into the Bell-Astral transaction, while denying Bell the 
opportunity for any such consultations - calling into question the 
impartiality of the entire process.

"That the CRTC was not guided by its own rules is a grave concern. In fact, 
this is just the latest in a series of decisions where the commission held 
hearings, established rules… and then inexplicably ignored them when Bell 
moved forward with a strategic investment. This sends a strong message that 
Canadian broadcasting regulation is impetuous and unreliable, " said Kevin 
Crull, President of Bell Media.

Bell's acquisition of Astral was supported by independent producers, 
advertisers, media companies, community and arts groups - and by 99.84% of 
Astral shareholders. In rejecting the transaction, the CRTC sent a clear 
message to the broadcasting industry, investors and the corporate sector that 
its own rules don't matter - to the detriment of consumers across Canada.

"A combined Bell-Astral would grow the entire Canadian broadcasting industry 
to the benefit of consumers and content creators. Instead, the CRTC has 
decided to favour the interests of unregulated U.S. broadcast channels and 
Internet television providers, while blatantly protecting the interests of 
cable companies, such as Québecor, which continues to dominate the 
French-language media market" said Mr. Crull.

If the CRTC's decision is allowed to stand, the Astral-Bell transaction will 
not be allowed to close and the negative outcomes are clear:
    --  It cuts off more than $240 million in new funding for Canadian
        content, including greatly expanded Canadian news and
        entertainment programming in both official languages.
    --
    --  French-language consumers have been robbed of a planned
        national French-language news service based in Québec; Québec
        consumers, content creators and its broadcasting industry
        remain at the mercy of Québecor, the integrated
        cable-broadcaster that has long dominated Québec media with a
        French-language TV market share of 30%, far higher than the
        combined Bell-Astral share of 24.4%.
    --
    --  Consumers across the country are denied a stronger homegrown
        voice able to compete with unregulated U.S. TV channels and
        Internet OTT broadcasters - including with Bell's planned
        all-Canadian service featuring Astral's Canadian and
        international movies and Bell Media news, sports and
        entertainment programming to compete with cross-border services
        like Netflix and Apple TV.
    --  It forces a review of Bell's commitment to continue to operate
        money-losing TV stations in small communities across Canada as
        part of the Bell-Astral investment plan.
    --  Canadians in the North are denied significant new broadband
        communications infrastructure planned as part of the
        Bell-Astral benefits package.

Rather than welcome these clear benefits to consumers of the Bell-Astral plan 
to invest heavily in Canadian programming and broadcasting services, the CRTC 
chose instead to serve cable companies focused on protecting their profit 
margins, already the highest in North America. These same corporations 
dedicated their vast TV, print and other media holdings to an aggressive and 
blatantly misleading campaign aimed at subverting due process and quashing 
enhanced competition. In combination with private meetings with the cablecos, 
the CRTC fell head over heels for their carefully orchestrated and well-funded 
propaganda effort that made a mockery of the entire process.

If the CRTC's decision stands, one of the closing conditions for Bell's $3.38 
billion acquisition of Astral Media will not be met and the transaction will 
not proceed. The transaction also remains subject to approval by the federal 
Competition Bureau.

About Bell
Headquartered in Montréal since its founding in 1880, Bell is Canada's 
largest communications company, providing consumers and business with 
solutions to all their communications needs. Bell Media is Canada's premier 
multimedia company with leading assets in television, radio and digital media. 
Bell is wholly owned by Montréal's BCE Inc. (TSX, NYSE: BCE). For Bell 
product and service information, please visit Bell.ca. For Bell Media, please 
visit BellMedia.ca. For BCE corporate information, please visit BCE.ca.

The Bell Mental Health Initiative is a multi-year charitable program that 
promotes mental health across Canada via the Bell Let's Talk anti-stigma 
campaign and support for community care, research and workplace best 
practices. To learn more, please visit Bell.ca/LetsTalk.

Caution Concerning Forward-Looking Statements

Certain statements made in this news release, including, but not limited to, 
statements relating to the proposed acquisition by BCE Inc. of Astral Media 
Inc. and other statements that are not historical facts, are forward-looking. 
Forward-looking statements, by their very nature, are subject to inherent 
risks, uncertainties and assumptions which give rise to the possibility that 
actual results or events could differ materially from our expectations 
expressed in or implied by such forward-looking statements. As a result, we 
cannot guarantee that any forward-looking statement will materialize and you 
are cautioned not to place undue reliance on these forward-looking statements.

The forward-looking statements contained in this news release describe our 
expectations at the date of this news release and, accordingly, are subject to 
change after such date. Except as may be required by Canadian securities laws, 
we do not undertake any obligation to update or revise any forward-looking 
statements contained in this news release, whether as a result of new 
information, future events or otherwise. Forward-looking statements are 
provided herein for the purpose of giving information about the proposed 
transaction referred to above. Readers are cautioned that such information may 
not be appropriate for other purposes. For additional information with respect 
to certain of these and other assumptions and risks, please refer to BCE 
Inc.'s 2012 First Quarter MD&A dated May 2, 2012, filed by BCE Inc. with the 
Canadian securities commissions (available at www.sedar.com) and with the U.S. 
Securities and Exchange Commission (available at www.sec.gov). This document 
is also available on BCE Inc.'s website at www.bce.ca.

Marie-Eve Francoeur Bell Media Relations (514)391-5263 
marie-eve.francoeur@bell.ca 

Thane Fotopoulos BCE Investor Relations (514) 870-4619 thane.fotopoulos@bell.ca

SOURCE: BELL CANADA

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http://www.newswire.ca/en/releases/archive/October2012/18/c8376.html

CO: BELL CANADA
ST: Quebec
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-0- Oct/18/2012 23:13 GMT