A recent Rogers filing with the Canadian Radio, Television and Telecommunications Commission (CRTC) accuses Bell and Telus of opposing Shaw’s proposed merger to avoid competing with a stronger broadcaster.
In Rogers’ filing, the carrier claims that the Shaw acquisition would allow it to compete with Telus and Bell more effectively. According to The balloon and the mail, Rogers also claimed that it would help the company compete against foreign competitors like Netflix.
It comes in response to requests made to the CRTC by Bell and Telus to deny the Rogers acquisition. Both operators expressed concern that the Rogers / Shaw merger would make the company’s broadcast distribution market too large.
Specifically, the two telcos argued that Rogers would control 47 percent of the English broadcast distribution market (cable, satellite, or Internet TV channel distribution) if the proposal passes. Shaw’s broadcast distribution business includes a satellite television service called Shaw Direct and cable networks in BC, Alberta, Saskatchewan, Manitoba and northern Ontario. Bell and Telus say that if Rogers were to achieve that scale, he would gain control over the availability of programming services.
Nevertheless, The balloon and the mail notes that Rogers countered those claims by pointing out that Bell is already the largest broadcasting distributor and that the company also tried to buy Shaw.
First, Rogers alleged in the communication that Bell had a larger market capitalization than Rogers and Shaw combined and called Bell’s concerns “ironic.” Additionally, Rogers said that if Bell had gone ahead with its Shaw acquisition attempt, it would be advocating for approval of a deal that would create an even larger transmission distributor than the one Bell currently opposes.
The balloon and the mail notes that although Bell tried to acquire Shaw, it ultimately chose not to because it was unwilling to take the regulatory risk.
CRTC will hold public hearing on merger on November 22
Of course, Bell and Telus are not the only companies opposing the acquisition. The Canadian Communication Systems Alliance, representing Canada’s independent Internet, television and telephone providers, also presented an intervention. So did Cogeco Communications, which Rogers tried repeatedly to acquire last year. Additionally, Corus Entertainment warned that the Rogers / Shaw merger could harm Global News.
There are also other regulators looking at the proposed merger between Rogers and Shaw. The Competition Office is reviewing whether the merger will result in less competition, while the Ministry of Innovation, Science and Economic Development (ISED) will need to approve the transfer of spectrum licenses. The role of the CRTC is to examine the transfer of broadcasting assets and will hold a public hearing on November 22.
It is particularly interesting to see that operators use competition as an argument both for and against the deal, given that so far, critics have criticized the proposal for its potential to reduce competition and harm Canadians. Much of the criticism has been directed at wireless technology since Shaw owns Freedom Mobile. If the wireless brand were to end Rogers, it would further reduce the competition already lacking in Canadian wireless technology.
However, Freedom could be sold as part of the deal, and Quebecor’s Videotron has indicated that it could buy the wireless business to help expand beyond Quebec. Ultimately, there is still a long way to go in this process and things could change significantly in the coming months.
Source: The balloon and the mail