Rogers Fires Back at Telus, Bell at CRTC Hearing Over Shaw Deal

During the last day of the Canadian Radio-television and Telecommunications Commission (CRTC)’s hearings on its proposed $26 billion acquisition of Shaw Communications Inc., Rogers Communications Inc. (RCI) rebuffed the concerns and criticism that its main rivals and other parties presented throughout the week (via Yahoo Finance).

Ted Woodhead, Senior Vice President of Regulatory Affairs at Rogers, said at the Friday hearing that competitors BCE Inc. and Telus Corp.’s opposition to the merger was in self-interest, not the public interest.

Woodhead drew attention to the hypocrisy in the rival telecoms’ raising of concerns about the size Rogers would reach if it acquires Shaw, given that both have tried to achieve comparable scale in the past.

Speaking to the Commission on Tuesday, Telus Corp. urged the regulator to block the Rogers-Shaw deal, saying it would “reduce competition and consumer choice.”

“For decades, these two companies have consistently advocated for the notion of scale for themselves, but have now decided that scale is a bad thing when it comes to Rogers and Shaw,” said Woodhead.

The RCI executive also pointed out that Bell had been in talks to buy Shaw’s assets, which would have resulted in the former reaching a similar scale to what Rogers is seeking with the deal.

Throughout the week, competitors and consumer advocacy groups opposed to the deal raised concerns that it would lead to Rogers holding too much influence over the market, with about 47% of the English-language subscriber base.

Rogers has promised stronger competition in Western Canada if the merger goes through, and Woodhead said at the hearing that there are more regulatory anti-competition safeguards in place today than there were in 2012, when the CRTC forced concessions from Bell before approving its purchase of Astral Media.

Independent producers and distributors also spoke at previous hearings throughout the week, raising concerns of their own and asking Rogers for concessions and safeguards to maintain the status quo and give them more time to adapt to the shift.

Several raised concerns that the assistance Rogers was offering them to move to the unregulated online space was an effort to push them off existing services. However, RCI explained on Friday that its funding offers will help them develop apps for internet-based TV and adapt to existing market conditions.

The telco noted that an estimated 40-50% of Canadians have already cut their cable subscriptions, necessitating a move to the online streaming space.

“Many parties to this proceeding would prefer to ignore the reality of the now,” said Woodhead.

Pam Dinsmore, Vice President of Regulatory at Rogers Cable, said Ethnic Channels Group’s request for an effective guarantee that its revenue not go down for five years was “entirely unreasonable.”

Rogers Cable did offer a concession to the distributor, increasing the minimum number of independent service to 45 from the 40 the company committed to at the start of the week.

Concerns were also raised regarding Rogers’ plan to divert an estimated $13 million that Shaw currently pays to Global News toward expanding western coverage for its own CityNews channels.

The CRTC hearings evaluated the broadcasting side of the Rogers-Shaw merger, while the companies’ mobile wireless business and other issues will be reviewed by the Competition Bureau and Innovation, Science and Economic Development Canada.