Rogers rejects criticism from competitors on Shaw deal, offers some concessions

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Rogers Communications Inc. used the last day of CRTC hearings reviewing its proposed takeover of Shaw Communications Inc. to reject the criticism of its main rivals, while offering some concessions to independent producers and distributors.

Ted Woodhead, senior vice-president of regulatory affairs at Rogers, said Friday that Bell Canada parent BCE Inc. and Telus Corp. were speaking in self interest rather than the public interest when raising concerns about the size Rogers would reach if the deal goes through.

“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.”

Woodhead said the combined company would lead to stronger competition in Western Canada, and that there are more regulatory safeguards in place than there were in 2012 when the CRTC forced concessions from Bell before approving its purchase of Astral Media.

He noted Bell was also in talks to buy Shaw’s assets, which would have seen BCE reach the same scale Rogers is seeking with the deal.

The two major competitors, along with other speakers during the week of hearings focused on the broadcast side of the merger, raised concerns that the combined Rogers-Shaw would wield too much influence in the market by controlling about 47 per cent of the English-language subscriber base.

Most independent producers and distributors did not outright oppose the deal, but instead asked for concessions and safeguards to maintain the status quo and give them more time to adapt to the rapidly changing broadcast world.

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, but the company said its funding offers for them to develop apps for internet-based TV was to help them adapt to existing market conditions, as already an estimated 40 to 50 per cent of Canadians have cut their cable subscriptions.

“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,” but committed to increasing the minimum number of independent service to 45 from the 40 the company committed to at the start of the week.

She said Rogers would also subject the satellite relay service business it would acquire through Shaw to the same dispute resolution options available to conventional broadcasting, after some distributors raised concerns during the hearing about the threat of being dropped from the service.

Intervenors during the week also raised concerns about Rogers’ plan to divert an estimated $13 million that Shaw currently pays to Global News toward expanded western coverage for its own CityNews channels.

Critics said the change would likely mean less coverage for smaller markets as the CityNews expansion will be limited to Vancouver, Edmonton, Calgary and Winnipeg, while Rogers has also been vague on the benefits of the funding, including how many more journalists it would mean for the company.

Rogers on Friday said that the funding commitment was dependent on revenues that were on the decline, so the funding could go down, and said it would provide more details on its journalism plans in writing to the regulator.

While the hearings at the CRTC focused on the broadcasting aspects of the merger, issues such as mobile wireless services and internet providers will be reviewed by the Competition Bureau and by the Ministry of Innovation, Science and Economic Development.

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