CRTC Approves Rogers-Shaw Merger, Decision Called ‘Disastrous’ by Consumer Group
The Canadian Radio-television and Telecommunications Commission (CRTC) on Thursday overwhelmingly approved the Rogers-Shaw merger. In its decision, the CRTC wrote:
The Commission approves, subject to a number of modifications and the fulfilment of specific conditions of approval, an application by Rogers Communications Inc. (Rogers), on behalf of Shaw Communications Inc. (Shaw), for authority to transfer the effective control of the broadcasting undertakings licensed to Shaw or its subsidiaries to Rogers or its subsidiaries. The Commission concludes that the transaction as modified by the Commission is in the public interest and advances the objectives set out for the Canadian broadcasting system in the Broadcasting Act (the Act).
The CRTC says, “Canadians as consumers will benefit from this transaction.”
Rogers is will acquire 16 cable services based in Western Canada, a national satellite television service and other broadcast and television services, says the CRTC. “This approval only deals with the broadcasting elements of the transaction,” says the Commission.
#CRTC rolls over & approves parts of the Rogers-Shaw deal under its remit. Seriously, is the @CRTCeng up to the task imagined for it in Bill #C11 when it can't even exercise its current mandate with a modicum of authority? https://t.co/0UmVJJBNea @pablorodriguez @FP_Champagne
— Dwayne Winseck (@mediamorphis) March 24, 2022
Conditions are required by the CRTC for the Rogers-Shaw deal to go through, such as a $27.2 million payout to the Canada Media Fund, Independent Journalism Fund and other cultural agencies, plus time-bound commitments to Shaw customers, such as notifying them 90 days before current contracts end about the impending merger.
“Given the nature of this transaction, we have put in place safeguards aimed at addressing potential risks to the broadcasting system for both consumers and programming services. Rogers must honour all existing contracts for Shaw customers. This adds to the safeguards already in place, which allow Canadians to subscribe to a basic television package and to select channels either individually or in small packages,” said Ian Scott, Chairperson and CEO, CRTC.
Rogers also must report annually on its increased contribution to local news, hiring more journalists at its Citytv stations and by also producing an extra 48 news specials annually “that reflect local communities.”
Consumer group OpenMedia called the Shaw buyout by Rogers a “disastrous” decision. “This is a tone-deaf decision from a CRTC that has completely lost touch with ordinary people in Canada,” said OpenMedia Campaigns Director Matt Hatfield, in an issued statement.
“The CRTC claims their modified version of the deal is in the best interest of Canadians; in what world is that true? Every single guarantee Rogers is making to secure our watchdogs’ cooperation is a short-term payment or unenforceable promise; the long-term outcome is clearly a net loss to everyone outside the Rogers and Shaw families,” added Hatfield.
“This approval is an important milestone and brings us one step closer to completing our transformational transaction with Shaw,” said Tony Staffieri, President and CEO of Rogers, in a statement. “Together, Rogers and Shaw will accelerate investment in 5G and cable networks across Canada, offer consumers and businesses more choice and competition, and connect rural and remote communities faster than either company could alone.”
A Rogers press release outlined the following benefits for Canadians as part of the merger:
- Investing $2.5 billion to build 5G networks across Western Canada over the next five years;
- Establishing a new $1 billion Rogers Rural and Indigenous Connectivity Fund dedicated to connecting rural, remote, and Indigenous communities across Western Canada;
- Additional $3 billion to support further network, services, and technology investments;
- Offering customers across Western Canada next-generation features, functionalities and services through our industry-leading Ignite platform; and
- Creating up to 3,000 new jobs in Western Canada
Brad Shaw, Executive Chair & CEO of Shaw commented on the CRTC ruling by saying, “We appreciate the CRTC’s thoughtful inquiry and remain committed to working with government and regulators to achieve a successful completion of our proposed transaction with Rogers.”
Both companies expect the merger to close in Q2 of 2022.