Shaw asks CRTC to dismiss requests of “opportunistic proponents of delay”
OTTAWA – Bell and Telus both filed letters yesterday with the CRTC supporting the Public Interest Advocacy Centre and National Pensioners Federation’s (PIAC-NPF) procedural request to have the Commission’s public hearings into the broadcasting side of Rogers Communications’s purchase of Shaw Communications delayed.
The hearings are scheduled to begin Nov. 22. PIAC-NPF, Bell and Telus all argued there is too much uncertainty around who controls Rogers for the CRTC to conduct fair hearings that protect the public interest.
Bell, in its letter, called the situation “unprecedented” and said it “places the Commission and parties to the proceeding in an impossible position.” The company argued the CRTC has not, to its knowledge, encountered a situation where the legal control of a company seeking to acquire another is uncertain, which “should be reason enough to suspend consideration.”
PIAC-NPF, Bell and Telus indicated concern over the accuracy and reliability of answers and assurances provided by Rogers if the hearing is held before the questions of leadership and control at the company are settled.
Telus pointed to Videotron’s current lawsuit against Rogers alleging breach of contract to argue “it is important that the CRTC be certain that the Rogers representatives at the hearing actually speak for the company that may be executing the transaction.”
Bell, in addition to asking the CRTC to delay the hearing, said the CRTC “must ask Rogers to file a revised application” before an oral hearing proceeds in order to correct aspects of it that are either no longer accurate or are in doubt.
PIAC-NPF, Bell and Telus all emphasized it is in the public interest for the hearings to be delayed.
Telus’s letter argued “any potential prejudice to Rogers or Shaw… that might result from an adjournment is far outweighed by the public interest in ensuring an effective review of the proposed transaction, given its size and potential impact on the broadcasting sector in Canada.”
The CRTC “and it processes do not exist to serve the private interests of Edward Rogers and the Control Trust,” Telus’s letter reads.
“Rather, it is Edward Rogers and the Rogers Control Trust that are subordinate to the public interest. In the present circumstances, the public interest requires that the CRTC’s public hearing not proceed until the issue of corporate control of Rogers has been ascertained with certainty. This is the only way to ensure a fair trial and effective public review process.”
A British Columbia Supreme Court judge is expected to make a decision on Friday regarding which Rogers board is valid. Telus argued, however, “at least one member of the Rogers family has vowed to “spend every penny” to win the legal battle,” meaning “it may be several months before there is certainty regarding the corporate governance of Rogers.”
In a response letter to the CRTC filed today, Rogers stated it “strongly opposes the requests for adjournment,” and called for the Commission to deny the requests.
“The requests are without merit,” the letter reads. “Rogers and Shaw remain steadfastly committed to the timely receipt of the necessary regulatory approvals and closing of this transaction.”
Rogers argued the procedural request to delay the hearings are “tactical and should be given no consideration.” Bell and Telus “are obviously both concerned that a combined Rogers/Shaw will become a more effective competitor and are looking for any way to try to derail our transaction. Their requests should be viewed as nothing more than anti-competitive responses to our application,” Rogers said.
Rogers indicated that regardless of any changes made at the company, all of the company’s submissions and commitments made as part of the proceeding will be honoured. “This is the case for all companies that appear before the Commission,” the letter reads.
Rogers further explained its officers “who will be appearing at the hearing will be fully empowered to make commitments on behalf of the company. More importantly, in making its decision (which will be informed by the commitments made at the hearing) the Commission has (and will use) the power under the Broadcasting Act to impose any applicable obligations on Rogers, which will apply regardless of who its directors and officers are at the time of the Commission’s decision.”
Because of this, Rogers argued “there is no real or perceived risk that any obligations imposed on Rogers by the Commission will not be honoured or upheld.”
In an emailed statement to Cartt.ca, a Rogers spokesperson indicated the company is looking forward to the hearings being held this month.
“Shaw and Rogers coming together will enable the generational investments needed to increase choice for Canadians, deliver much-needed rural connectivity, create jobs and support Canada’s innovation economy,” the statement reads.
“We look forward to participating in the CRTC hearings later this month, and hearing the views of Canadians on this important transaction.”
The CRTC is currently reviewing PIAC-NPF’s procedural request.
Updated Nov. 3:
Shaw submitted its own letter to the CRTC Nov. 3 asking the Commission to dismiss PIAC-NPF, Bell and Telus’s requests for delay. The company said it “strongly opposes the procedural requests for adjournment” and asked the CRTC to expeditiously deny them.
Calling PIAC-NPF’s concerns “misplaced” Shaw’s letter stated: “there is no uncertainty concerning the application before the Commission, and there is no uncertainty concerning Rogers’ and Shaw’s complete and unwavering commitment to the historic combination of two great, Canadian, family-owned companies and to delivering incredible benefits and opportunities to Canadians, and in particular, to Western Canada.”
Shaw said the “opportunistic proponents of delay” have not demonstrated the merit of or need for adjournment.
Delaying the hearing would, however, “create significant uncertainty – especially for Shaw’s business, customers, employees, shareholders, and suppliers,” the company argued.
“Delay and uncertainty are especially harmful to a company that is being acquired.”
Shaw noted its competitors are aware of the risks a delay poses to Shaw and of “the competitive and consumer benefits that will result to the system with a timely approval of the application.” Because of this, Shaw argued the procedural request is not in the public interest.
Shaw said in its letter it is unsurprising Bell and Telus have supported PIAC-NPF’s request, calling it “a transparent attempt to game the Commission’s process and create unacceptable regulatory uncertainty surrounding a transaction that is clearly in the public interest.”
The company argued “Bell and Telus oppose the prospect of a more effective competitor with the scale to match their combined investments and drive increased consumer choice, affordability, and value. Their arguments for delaying the hearing are disingenuous and entirely driven by their competitive interests.”
