Bell Aliant To Lease Part Of Landline Network To Close Acquisition

(RTTNews) - Canada's competition watchdog said Wednesday that Canadian telecom company Bell Aliant Regional Communications Inc. (BA.TO) has agreed to a long-term lease of a significant part of its landline network to Bragg Communications Inc.'s Eastlink, in order to win approval for the company's acquisition of O.N. Tel Inc. or Ontera.

Competition Bureau Canada said that Bell Aliant has agreed to lease telecommunications strands of fibre to Bragg Communications under a 20-year Indefeasible Right of Use or IRU on the entirety of Ontera's fibre-optic telecommunications ring, south of Kapuskasing, Ontario.

Earlier, the Competition Bureau had expressed its concerns that the acquisition by Bell Aliant would likely substantially lessen or prevent competition in the sale of wireline telecommunications services in up to 16 Northern Ontario communities, by providing Bell Aliant with the ability and incentive to exclude its competitors from access to high-bandwidth telecommunications transport services or raise the cost of those services.

The competition watchdog noted that after it advised the companies of its concerns, Bell Aliant worked constructively to address those concerns.

According to the CBC, the lease by Bell Aliant will preserve the ability of Eastlink or other providers to compete effectively with Bell Aliant for the provision of telecommunications services in Northern Ontario.

The CBC said, "The Bureau is satisfied that this "fix-it-first" remedy addresses the competition issues arising from the proposed transaction and as a result will not challenge the merger".

In early April, Bell Aliant agreed to acquire Ontera from the Ontario Northland Transportation Commission.

North Bay, Ontario-based Ontera is an integrated telecommunications provider with extensive operations in Northern Ontario. Its primary line of business is the ownership and operation of an approximately 1000 kilometre high-capacity fibre-optic telecommunications line.

In late July, BCE Inc. (BCE.TO, BCE), Canada's largest communications company, said it will privatize Bell Aliant by acquiring the interest of its affiliate's public minority shareholders for a total consideration of about C$3.95 billion.

BCE noted that Bell Aliant will continue to serve its customers in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island from its Halifax headquarters.

BA.TO closed Wednesday's trading at C$30.60, down C$0.01 or 0.03 percent on a volume of 248,382 shares.