OTTAWA, Ont. – Bell Media’s $3.4-billion takeover of Astral media was not good for Canadians, the federal broadcast regulator declared on Thursday, in its surprise move to reject the union of the two media giants.

In its written decision, the Canadian Radio-television and Telecommunications Commission said the controversial merger of the two media firms would have put too much control in the hands of one company, threatening a competitive media landscape in the country.

“At the end of the day, BCE demonstrated clearly that the proposed transaction was good for BCE. Our only option was to deny the application,” CRTC Chair Jean-Pierre Blais said.

“Simply put, this was not a good deal for Canadians.”

“We could not have ensured a robust Canadian broadcasting system without imposing extensive and intrusive safeguards, which would have been to the detriment of the entire industry,” he said in the written decision.

BCE Inc. said it will call on the federal Cabinet to intervene.

Bell said late Thursday that it was “shocked” and “appalled” by the decision, adding that it will ask the federal Cabinet to “issue direction to CRTC to follow its own regulatory policy.”

It said the decision was “tainted by behind-the-scenes lobbying” by its rivals and claims the ruling violates the regulator’s own policies.

“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,” said George Cope, President and CEO of Bell Canada and BCE Inc.

“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.”

The CRTC said Bell failed prove that the deal would provide “significant and unequivocal” benefits for Canadian broadcasting and Canadians.

The CRTC said BCE — owner of Bell Canada, the CTV television network, numerous specialty stations and the former Chum radio stations — already has 33.7 per cent of the English television-viewing audience, well ahead of its nearest rival Shaw Communications with 21.9 per cent.

Had the media giant acquired Astral Media’s 25 channels, it would have gained almost 45 per cent of the English-viewing audience, in addition to nearly 35 per cent of the French television market. As well, it would have become the largest radio station operator in Canada and would have controlled over half of TV pay and specialty services.

According to the regulator, that is too much power over Canadian airwaves.

“It would have resulted in an unprecedented level of consolidation in the Canadian marketplace and we had grave concerns that BCE would be able to use its market power in an unfair manner and to engage in anti-competitive behaviour,” Blais said.

But Bell said the deal would have given it control of 33.5 per cent of the English-language TV market, a level it says should have been approved under guidelines set out in the CRTC’s Diversity of Voices policy, which governs the level of media concentration in Canada.

Bell said it needed to get bigger in order to take on foreign online competitors like Netflix.

In making its ruling, the CRTC sparked surprise but the move pleased its rivals who opposed the deal. Most of Bell’s competitors slammed the deal with the exception of Shaw.

“We commend the CRTC for this courageous decision,” Vice-Chairman of Rogers Communications Phil Lind said in a statement.

“We believe that Canadians should have fair and open access to content. This is a good day for consumers.”

Rogers Communications is the parent company of this radio station.

Bell also asked to convert CKGM Montreal, branded as TSN Radio, into a French-language station if its Astra Media takeover was approved. This request was denied.