CRTC approves Astral purchase of Telemedia radio stations


Montreal, - Astral Media Inc. cleared a tall hurdle Friday in its quest to purchase 19 radio stations from Telemedia Radio Inc. by
winning approval from the Canadian Radio-television and Telecommunications Commission.

However, the deal remains at a standstill while the companies try to halt the federal Competition Tribunal from hearing a challenge by the Competition Bureau.

In the meantime, Astral welcomed the CRTC decision. ``This is a major step forward,'' Jacques Parisien, president of Astral Radio, said in an interview.

``We now have a very positive and very constructive decision from the CRTC.''

Astral wants to buy 17 new stations and the remaining shares of two others it co-owns, creating a new radio network that will
complement its existing 14 stations in Quebec.

The Telemedia stations Astral wants are in Montreal, Quebec City and the Quebec communities of Chicoutimi, Gatineau, Sherbrooke and Trois-Rivieres; Truro, N.S; and the New Brunswick communities of Fredericton, Bathurst, Grand Falls and Woodstock.

The CRTC said the decision ``reflects the cultural, economic and public interest objectives of the Broadcasting Act and the
commission's commercial radio policy,'' it said in its ruling.

``It also takes into account the interests of listeners, market conditions and programming diversity.''

Astral announced the $255-million takeover bid last year but needed the CRTC's permission.

In December, the federal Competition Bureau waded in to say it would take the case before the Competition Tribunal on grounds the combination would give Astral too much control of French-language radio broadcasting.

Astral and Telemedia have contested the intervention in Federal Court and will present their arguments next month.

The Competition Bureau took the case to the tribunal because it sees ``substantial problems'' with the Astral-Telemedia deal, said Gaston Jorre, the bureau's senior deputy commissioner of competition.

``We say to the tribunal that this transaction substantially lessens competition within the meaning of the Competition Act,'' and
should be blocked, Jorre said Friday.

The deal would give Astral a near monopoly in French-language radio stations in four markets _ Gatineau, Sherbrooke, Trois-Rivieres and Chicoutimi _ and substantial control over
French-language radio advertising markets in Montreal and Quebec City, he added.

The bureau's position is that radio is a distinct advertising market because it can reach people in ways other media can't, such
as in their cars.

But the CRTC, Astral and Telemedia all contend radio competes with all media, including elevision, newspapers and billboards, and thus there is less concentration of advertising revenue.

Elsewhere in the country, the CRTC approved the purchase by Standard Radio Inc., NewCap Inc. and Rogers Broadcasting Ltd. of
Telemedia stations in Alberta, British Columbia and Ontario.

Adam Shine, a media analyst with CIBC World Markets Inc., said the CRTC ruling ``provides Astral with some pretty good ammunition heading into the federal court case later next month.''

CRTC spokesman Denis Carmel said the commission considers its work done with respect to the Astral application and the Competition Tribunal case ``did not play any role in this decision.''

Carmel refused to speculate whether a ruling from the tribunal had the power to override CRTC approval for a deal.

``That will be determined by the Federal Court,'' he said.

The CRTC approval did not come without conditions on Astral.

The company must maintain the current level of local programming and news at the new AM stations. There will be independent sales
forces for every network and the company must spend $13.62 million to help develop francophone artists.

Astral expects to close the deal with Telemedia by the end of August, pending a favourable ruling from the Federal Court.

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