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“The acquisition of Astral Media’s services would have created a situation where a company of BCE’s size and scale would be able to exert its market power unfairly and hinder healthy competition,” Jean-Pierre Blais, the CRTC’s new chairman said.

“At the end of the day, the commission was persuaded that the transaction was good for BCE but not for Canadians.”

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The CRTC’s swift and uncompromising refusal stunned many and came just weeks after public hearings where BCE chief executive George Cope and other top brass argued for the deal’s passage.

A “shocked” BCE said it would seek to have the decision overturned by the federal Cabinet — a rare but plausible route to have regulators overruled. Mr. Cope said the bid was onside with all broadcast rules and regulations. “This is a decision that should not stand,” he said in a statement.

BCE contends the transaction is essential to help mount a domestic response to so-called “over the top” content providers now picking off subscribers at the margins of the country’s television market. Mr. Cope said scale would be required by Canadian firms like his to compete with large foreign — mostly U.S.-based — companies like Google Inc. and Apple Inc., who are showing a greater interest daily in delivering programming like films and TV shows over the Web.

The CRTC dismissed the notion outright.

“The commission does not consider that there is compelling evidence to demonstrate that foreign, unlicensed competitors are having a significant impact,” the ruling said. “[T]he commission noted … that based on available data, Internet platforms continue to be complementary to the traditional broadcasting system.”