As I indicated yesterday, there are a number of touch points for government review in a transaction like buying a phone company.
Regardless of who acquires BCE – even if it is a private equity firm – there will need to be an application to the CRTC for approval of the transaction, under the Telecom Act, Broadcast Act and Bell Canada Act.
It appears that the time pressures for the CRTC could be considerable. Under the Bell Canada Act:
Unconditional approval shall be deemed to be given under subsection 11(2) thirty days after written notification of a proposed transaction to the Commission, without prejudice to the exercise of the Commission’s powers under the Telecommunications Act.
That seems to mean that the CRTC has only 30 days under the Bell Canada Act, but perhaps more time under the Telecom Act. [Lawyers, can you help us here?] As we saw in the CRTC’s review of the CTV/CHUM transaction, the CRTC can be very responsive, but even that determination still took 6 months from the date of the original application in order to allow oral hearings.
The CRTC would be guided in its review the transaction by assessing the consistency with the objectives of the Telecom Act:
- to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;
- to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;
- to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;
- to promote the ownership and control of Canadian carriers by Canadians;
- to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada;
- to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective;
- to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services;
- to respond to the economic and social requirements of users of telecommunications services; and
- to contribute to the protection of the privacy of persons.
The Broadcast Act will also come into play because of broadcast licenses held by Bell.
On top of these CRTC review points, there is also the Competition Bureau that will need to assess whether a substantial lessening of competition is expected to result, substantial being the operative word.
With TELUS saying that it is no longer pursuing its bid, it may plan to pick up assets expected to be divested after a private equity acquisition. Depending on the pieces, the entire review process may start all over again!