* CRTC says it would give too much market power to BCE
* Says not convinced it would not benefit Canadians
* Decision can be appealed to Federal Court of Appeal
* CRTC decision good news for Quebecor, Rogers
By Randall Palmer
GATINEAU, Quebec, Oct 18 (Reuters) - Canada's broadcast regulator blocked BCE Inc's C$3 billion ($3.05 billion) takeover of Astral Media on Thursday, declaring it would have given the Canadian media giant too much power.
"BCE failed to persuade us that the deal would benefit Canadians," Jean-Pierre Blais, chairman of the Canadian Radio-television and Telecommunications Commission (CRTC), said in a statement accompanying the blunt rejection.
The decision is good news for Quebecor Inc, which feared a challenge to its dominance of French-language television services.
It also benefits BCE's English-language competitors, including Rogers Communications Inc, which said BCE was already abusing its market power as an integrated broadcaster and distributor.
The decision can be appealed to the Federal Court of Appeal but cannot be overturned by the federal cabinet, the CRTC said.
"It would have placed significant market power in the hands of one of the country's largest media companies," Blais said.
"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."
The CRTC said that in English-language television, the combined BCE/Astral would control an unprecedented amount of revenues and viewing.
The federal regulator has a policy of quickly approving transactions that keep a company's control under 35 percent of total television audience share, and carefully examining transactions which give yield a 35-45 percent share.
The CRTC concluded that on the French side it would have been at 33.1 percent of viewing of Canadian television services, but at 42.7 percent on the English side.
BCE had argued that the viewing of U.S. and other non-Canadian services should be included in the calculation, and that when that is done, its share would have been only 24.4 percent in French and 33.5 percent in English - under the cautionary level of 35 percent. The CRTC rejected that formula.
BCE had also argued that it would be an important counterweight to Quebecor in French, but the CRTC said this would merely have led to the vast majority of French programming being held by two large, vertically integrated companies.