The Public Interest Advocacy Centre (PIAC) and the National Pensioners Federation (NPF) on Wednesday filed a petition for the federal Cabinet to reverse the Canadian Radio-television and Telecommunications Commission (CRTC)’s approval of Rogers Communications Inc.’s proposed $26 billion acquisition of Shaw Communications Inc., Canada’s fourth-largest telecom operator.
The CRTC was responsible for reviewing the broadcasting side of the Rogers-Shaw merger, furnishing its approval of the deal last month. The commission has authorized the transfer of Shaw’s broadcasting assets, including certain broadcasting undertakings, along with broadcasting distribution undertakings (BDUs) that include cable TV services, satellite TV services, and some Internet protocol-based TV services (IPTV), to Rogers.
The PIAC and the NPF are concerned the merger will have a negative impact on the affordability of TV services, especially for Shaw’s TV-only customers who don’t subscribe to any underlying or additional internet services from the company.
“Consumers shouldn’t pay for these mergers,” said John Lawford, PIAC’s Executive Director and General Counsel. “This Petition is a result of our concern that the CRTC failed to impose enforceable conditions to protect consumer affordability of TV services.”
The two consumer advocacy groups submitted survey evidence to the CRTC demonstrating that Canadians, especially seniors, were concerned that pricing for TV service would increase if Rogers acquired Shaw — and that this concern was greatest for Shaw’s TV customers.
The Rogers-Shaw deal still requires approval from two regulators: the Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) Canada.
The Competition Bureau is looking at the merger’s possible impact on competition across relevant industries, while ISED Canada is evaluating the transfer of Shaw’s spectrum licences to Rogers.
Rogers reiterated in its announcement of strong first-quarter results last week that it expects the deal to close sometime in the second quarter of this year. Rogers and Shaw are working under a self-established deadline of June 13 for the merger. The two telcos are currently looking to divest Shaw’s wireless unit, Freedom Mobile, to push the merger through ISED Canada.
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“Canadians, especially seniors, were concerned that pricing for TV service would increase if Rogers acquired Shaw” Pretty sure that was the point. Why else would they do it, job creation? lol
Rogers and Shaw each have complete, government granted monopolies over cable TV in their respective areas with no overlap. Why would the merger justify price hikes, given that? I fully expect them to raise rates to cover the cost of the acquisition, but not because of any reduced competition in cable TV. There would be as much reduction in cable TV completion if Rogers bought a cableco in Uganda.
The reason for the merger, from Rogers perspective, is to buy an increased revenue base through an expanded monopoly.
This is true, and it’d be cheaper for Rogers to provide the exact same service since Rogers owns content (like NHL/Sportsnet rights) that right now Shaw needs to pay for.
I’m not saying that would get passed along by any means, but for non-mobile services Rogers will have Canada-wide service at a lower cost per user.
Rogers also benefits from swallowing a mobile carrier that had been forcing lower prices and more permissive data plans for years (until the merger).
Question. Lets say the government denies the merger and Shaw is stuck with Freedom, if they wanted to: could they just shut it down and leave their 2 million customers in the dust?
Sure, but why would they throw it away?
They’d have to answer to shareholders for why they’d throw away that huge investment they made.
Why they’d abandon the spectrum license they own. Why they’d abandon the land leases for the towers (which I am sure are for years)?