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Rogers’ takeover of Shaw clears CRTC hurdle. Here’s what happens next – National

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Rogers Communications has cleared the first of many hurdles in its quest to acquire rival Shaw Communications, after the CRTC on Thursday approved the merger of the companies’ broadcast services.

But experts say the true test of the $26-billion deal will be whether federal regulators will also green-light Rogers’ takeover of Shaw’s wireless, internet and home phone services — where major concerns remain about competition and consumer prices.

“I don’t see (the CRTC decision) as foreshadowing a smooth approval for the next phase,” said Tom Ross, a professor in the Sauder School of Business at the University of British Columbia who studies competition policy and regulation.

“There will be a laser focus on competition and consumer protections, and there is certainly a chance that the decision could go the other way.”

Read more:

CRTC approves Rogers’ takeover of Shaw broadcasting, but with costly conditions

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Those decisions from the Competition Bureau and Innovation, Science and Economic Development Canada (ISED) are not expected until later this year.

Rogers and Shaw have expressed confidence that the rest of the deal will be approved. They say joining forces is necessary to ensure greater connectivity to rural and Indigenous communities, and to compete in the increasingly globalized market for content.

But questions remain on how the deal will impact prices on cable and wireless plans, which remain among the highest in the world.

What the CRTC decision means

The CRTC approval, which comes with conditions, will allow Rogers to acquire Shaw’s 16 cable services based in Western Canada, a national satellite television service and other broadcast and television services.

The regulator, which was only tasked with assessing broadcasting elements of the transaction, said the merger would be in the public interest, would not impact the competitive landscape and “would not diminish the diversity of voices in Canada.”

Story continues below advertisement

Among the CRTC’s conditions are a requirement forcing Rogers to contribute $27.2 million to various media and local news initiatives and funds, which is five times what the company had originally proposed.


Click to play video: 'NDP opposed to Rogers-Shaw merger, Singh says'







NDP opposed to Rogers-Shaw merger, Singh says


NDP opposed to Rogers-Shaw merger, Singh says – Nov 22, 2021

Under the terms of the approval, Rogers must create an Indigenous news team with journalists in all provinces where the company provides news content to deliver stories to First Nations, Metis and Inuit communities.

The company must also report annually on its commitments to increase its support for local news, including by employing a higher number of journalists at its Citytv stations and by producing an additional 48 news specials in prime time each year that reflect local communities.

The CRTC will force Rogers to distribute at least 45 independent English and French-language services on each of its cable and satellite services to ensure independent programming services are not placed at a disadvantage when negotiating with Rogers.

Story continues below advertisement

In its decision, the CRTC said it has been assured by Rogers that the company will keep low-cost options in place for current Shaw subscribers, including television-only packages. Yet it did not mention any way that those assurances would be guaranteed for consumers.

“I would have hoped the CRTC would have focused more on protecting customers from higher and higher prices than on some of the conditions it did put forward,” said Lindsay Meredith, a professor emeritus in marketing at Simon Fraser University.

“It appears they put politics ahead of consumers.”

Read more:

Rogers tells CRTC Shaw deal will boost competition, makes no promises on prices

Edward Rogers, chair of Rogers Communications, told the CRTC hearing on the proposed acquisition in November that Rogers needs scale to compete and to help support Canadian culture.

“Canada is no longer an island in an ocean alone,” Rogers said at the time. “While our primary competitors are still Bell and Telus in the cable business, in this global world, our competitors are also increasingly global platforms and brands.”

Rogers, however, stopped short of assuring that Shaw customers wouldn’t see rate increases, but said that any price increases would be in line with what Shaw has been doing for decades and that stiff competition from Telus is the best check against it raising prices.

Story continues below advertisement

Consumer cost and competition concerns will be at the forefront of the next phase of the deal, Ross says, as the Competition Bureau and ISED review the wireless, phone and internet acquisitions.

Ottawa said in January that the three major wireless carriers — Rogers, Telus and Bell — have met government requirements to reduce prices for data plans by 25 per cent compared to 2020.

Yet a report by Finnish telecom analysis firm ReWheel in October 2021 found Canada’s prices are still among the highest in the world. The report blamed a lack of competition for the high prices.


Click to play video: 'What the Rogers-Shaw deal means for your phone bill'







What the Rogers-Shaw deal means for your phone bill


What the Rogers-Shaw deal means for your phone bill – Mar 18, 2021

The concern is whether Shaw’s Freedom Mobile, once considered a worthy competitor to the so-called Big Three carriers, will be absorbed by Rogers as part of the merger.

Story continues below advertisement

“This is one of the biggest issues of this whole deal,” Ross said.

The House of Commons industry and technology committee said in early March that the merger should not proceed, though said if it were to go through the government should make its conditions attached to the approval “fully enforceable.”

The committee’s non-binding report on the deal placed particular emphasis on Freedom, suggesting the existence of a fourth carrier would be important to ensure competition and fair pricing.

A day before the report was released, Federal Industry Minister Francois-Philippe Champagne said he “simply would not permit” the wholesale transfer of Shaw’s wireless licences to Rogers, adding it would be fundamentally incompatible with the government’s policies for spectrum and mobile service competition.

Blocking such a wholesale transfer could allow Freedom to exist independently, Ross said, or to be bought by another independent provider like Quebecor or Eastlink.

Read more:

Shaw shareholders approve sale of company to Rogers Communications

The other option, he added, would be to put any remaining wireless spectrum back on the auction block, where the federal government has sold off billions of dollars of service capacity to the highest bidder — namely among the Big Three.

In a statement, the Competition Bureau said it was focused on whether the Rogers-Shaw merger will likely result in “a substantial lessening or prevention of competition in Canada.” The Bureau would not say when its review would be completed.

Story continues below advertisement

The ISED was not able to provide a statement before publication.

Ross and Meredith agree that the rulings from the Competition Bureau and ISED will likely be favourable, but contain more conditions than the CRTC decision — including on wireless transfers and consumer prices.

Yet Meredith was more confident that the overall deal will be closed.

“The CRTC decision cracks the door open half an inch,” he said. “The rest of it now becomes an argument about how many more inches we open the door.”

— with files from the Canadian Press

© 2022 Global News, a division of Corus Entertainment Inc.




Rogers Communications has cleared the first of many hurdles in its quest to acquire rival Shaw Communications, after the CRTC on Thursday approved the merger of the companies’ broadcast services.

But experts say the true test of the $26-billion deal will be whether federal regulators will also green-light Rogers’ takeover of Shaw’s wireless, internet and home phone services — where major concerns remain about competition and consumer prices.

“I don’t see (the CRTC decision) as foreshadowing a smooth approval for the next phase,” said Tom Ross, a professor in the Sauder School of Business at the University of British Columbia who studies competition policy and regulation.

“There will be a laser focus on competition and consumer protections, and there is certainly a chance that the decision could go the other way.”

Read more:

CRTC approves Rogers’ takeover of Shaw broadcasting, but with costly conditions

Story continues below advertisement

Those decisions from the Competition Bureau and Innovation, Science and Economic Development Canada (ISED) are not expected until later this year.

Rogers and Shaw have expressed confidence that the rest of the deal will be approved. They say joining forces is necessary to ensure greater connectivity to rural and Indigenous communities, and to compete in the increasingly globalized market for content.

But questions remain on how the deal will impact prices on cable and wireless plans, which remain among the highest in the world.

What the CRTC decision means

The CRTC approval, which comes with conditions, will allow Rogers to acquire Shaw’s 16 cable services based in Western Canada, a national satellite television service and other broadcast and television services.

The regulator, which was only tasked with assessing broadcasting elements of the transaction, said the merger would be in the public interest, would not impact the competitive landscape and “would not diminish the diversity of voices in Canada.”

Story continues below advertisement

Among the CRTC’s conditions are a requirement forcing Rogers to contribute $27.2 million to various media and local news initiatives and funds, which is five times what the company had originally proposed.


Click to play video: 'NDP opposed to Rogers-Shaw merger, Singh says'







NDP opposed to Rogers-Shaw merger, Singh says


NDP opposed to Rogers-Shaw merger, Singh says – Nov 22, 2021

Under the terms of the approval, Rogers must create an Indigenous news team with journalists in all provinces where the company provides news content to deliver stories to First Nations, Metis and Inuit communities.

The company must also report annually on its commitments to increase its support for local news, including by employing a higher number of journalists at its Citytv stations and by producing an additional 48 news specials in prime time each year that reflect local communities.

The CRTC will force Rogers to distribute at least 45 independent English and French-language services on each of its cable and satellite services to ensure independent programming services are not placed at a disadvantage when negotiating with Rogers.

Story continues below advertisement

In its decision, the CRTC said it has been assured by Rogers that the company will keep low-cost options in place for current Shaw subscribers, including television-only packages. Yet it did not mention any way that those assurances would be guaranteed for consumers.

“I would have hoped the CRTC would have focused more on protecting customers from higher and higher prices than on some of the conditions it did put forward,” said Lindsay Meredith, a professor emeritus in marketing at Simon Fraser University.

“It appears they put politics ahead of consumers.”

Read more:

Rogers tells CRTC Shaw deal will boost competition, makes no promises on prices

Edward Rogers, chair of Rogers Communications, told the CRTC hearing on the proposed acquisition in November that Rogers needs scale to compete and to help support Canadian culture.

“Canada is no longer an island in an ocean alone,” Rogers said at the time. “While our primary competitors are still Bell and Telus in the cable business, in this global world, our competitors are also increasingly global platforms and brands.”

Rogers, however, stopped short of assuring that Shaw customers wouldn’t see rate increases, but said that any price increases would be in line with what Shaw has been doing for decades and that stiff competition from Telus is the best check against it raising prices.

Story continues below advertisement

Consumer cost and competition concerns will be at the forefront of the next phase of the deal, Ross says, as the Competition Bureau and ISED review the wireless, phone and internet acquisitions.

Ottawa said in January that the three major wireless carriers — Rogers, Telus and Bell — have met government requirements to reduce prices for data plans by 25 per cent compared to 2020.

Yet a report by Finnish telecom analysis firm ReWheel in October 2021 found Canada’s prices are still among the highest in the world. The report blamed a lack of competition for the high prices.


Click to play video: 'What the Rogers-Shaw deal means for your phone bill'







What the Rogers-Shaw deal means for your phone bill


What the Rogers-Shaw deal means for your phone bill – Mar 18, 2021

The concern is whether Shaw’s Freedom Mobile, once considered a worthy competitor to the so-called Big Three carriers, will be absorbed by Rogers as part of the merger.

Story continues below advertisement

“This is one of the biggest issues of this whole deal,” Ross said.

The House of Commons industry and technology committee said in early March that the merger should not proceed, though said if it were to go through the government should make its conditions attached to the approval “fully enforceable.”

The committee’s non-binding report on the deal placed particular emphasis on Freedom, suggesting the existence of a fourth carrier would be important to ensure competition and fair pricing.

A day before the report was released, Federal Industry Minister Francois-Philippe Champagne said he “simply would not permit” the wholesale transfer of Shaw’s wireless licences to Rogers, adding it would be fundamentally incompatible with the government’s policies for spectrum and mobile service competition.

Blocking such a wholesale transfer could allow Freedom to exist independently, Ross said, or to be bought by another independent provider like Quebecor or Eastlink.

Read more:

Shaw shareholders approve sale of company to Rogers Communications

The other option, he added, would be to put any remaining wireless spectrum back on the auction block, where the federal government has sold off billions of dollars of service capacity to the highest bidder — namely among the Big Three.

In a statement, the Competition Bureau said it was focused on whether the Rogers-Shaw merger will likely result in “a substantial lessening or prevention of competition in Canada.” The Bureau would not say when its review would be completed.

Story continues below advertisement

The ISED was not able to provide a statement before publication.

Ross and Meredith agree that the rulings from the Competition Bureau and ISED will likely be favourable, but contain more conditions than the CRTC decision — including on wireless transfers and consumer prices.

Yet Meredith was more confident that the overall deal will be closed.

“The CRTC decision cracks the door open half an inch,” he said. “The rest of it now becomes an argument about how many more inches we open the door.”

— with files from the Canadian Press

© 2022 Global News, a division of Corus Entertainment Inc.

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