It’s not over until Konrad von Finckenstein sings.

The consensus was that CTVglobemedia’s proposed $1.7-billion takeover of CHUM would go through with little fuss. The CRTC had grown toothless, went the theory. It was taking direction from a government bent on less regulation, not more. Let the market decide.

But the anxiety that began to permeate the halls of CGM turned out to be justified when the commission came down with its ruling. Sure, you can have CHUM, it said, but only if you get rid of the five Citytv stations. CGM’s unconvincing attempt to appease the regulator by offering to sell off the A-Channels – money losers – and Access Alberta fell flat. CGM head Ivan Fecan tried to convince the regulator that the Citys were struggling, and therefore Canada’s number-one network should be granted an exception to the no-multiple-conventionals-in-one-market rule.

CRTC chair von Finckenstein would have none of it.

CGM, having by now licked its wounds, says it will ‘retain’ the A-Channels and Access Alberta. So it loses a major part of what made the deal attractive in the first place, and must hold on to what it wanted to get rid of. Who would have thought one month ago that Rogers, which was willing and able to take on the As at $137.5 million, would be ponying up another $237.5 million to grab the Citys?

And CGM’s plans are not the only ones scuttled by the regs. An executive at Alliance Atlantis laments to Playback that, had the company known the Citys would be put back into play, AAC would not have been so quick to become a seller. It was only when it believed the Citys were off the market that AAC gave up on being a buyer and agreed to the takeover by CanWest Global.

For years, AAC has talked up how specialties were destined to erode the strength of conventionals, and while that is slowly happening, it had also long contemplated making the jump into the conventional space, where the biggest number of eyeballs still resides. But that now doesn’t appear to be in the cards.

You can imagine that following the CRTC’s demonstration that, yes, it still can regulate, those at CanWest and AAC must be feeling just a wee bit nervous about their own prospects before the commission.

The CanWest/AAC deal will push the CRTC’s stance on foreign ownership to the limit. Goldman Sachs, CanWest’s U.S. partner on the purchase, is fronting most of the coin, and all we know officially of the murky arrangement is that which partner owns how much ‘will be determined by the EBITDA of the combined operation’ in 2011.

So how would von Finckenstein and crew feel about approving a deal that four years down the road could result in Canada’s number-two network being foreign-controlled?

Maybe it doesn’t bother him that much. Five years ago, when he was at the Competition Bureau, von Finckenstein told the House of Commons heritage committee that the CRTC should allow foreign investors to own radio and television companies in Canada. But if there is one thing that recent events have shown, it is not to take this commissioner for granted. And, as the CHUM ruling was reportedly a 3-2 decision among the CRTC brain trust, his colleagues don’t unanimously share his views.

While the industry awaits a verdict on this second major takeover, it can feel satisfied on several fronts with the CHUM decision. CGM may have lost out on a younger, more ethnic demo in losing the Citys, but it still picks up CHUM’s robust specialty and radio properties, and all that in-house content that is well suited to emerging platforms. Meanwhile, the A-Channels could very well turn it around with CGM’s deep pockets behind them.

It would be a fairer fight in the Canadian media ring to have CanWest, bolstered by AAC’s specialties, square off against the number-one network plus the CHUM specialties. Add the Citys to CGM’s arsenal, and you’ve tipped the scales too much. And let’s not forget about Rogers, which has plenty of money of its own to spend, as well as a mind-boggling array of media interests (radio, Internet, publishing, specialty) for cross-platform exploitation.

Producers, advertisers and culturecrats feared we would end up with two conventional players when the dust settled, but instead we could have two more evenly matched leaders and a strong third.

Nice to see what a little regulation can do.