GATINEAU – Major concerns have been raised about the broadcasting side of the proposed Rogers/Shaw deal, which is currently being reviewed by the CRTC.
Individuals and organizations had until last Monday to send in their submissions in response to the Commission’s call for comments on Rogers’ application to the CRTC on behalf of Shaw to acquire Shaw’s licensed broadcasting distribution undertakings (BDUs), Shaw Direct, Shaw Broadcast Services and Shaw Pay-Per-View.
Bell, Telus, Independent Broadcasters Group (IBG), Cogeco, Corus, Ethnic Channels Group (ECG) and TLN, Forum for Research and Policy in Communications (FRPC) and Public Interest Advocacy Centre (PIAC) are among the organizations that either called on the CRTC to outright deny the application or opposed the application as it was submitted and suggested additional safeguards and conditions be added.
(A spokesperson for Quebecor confirmed via email to Cartt.ca the company did not submit anything to the CRTC for this process.)
Concentration of Ownership
A common concern is the amount of concentration of ownership the deal would result in.
Bell in its submission argued the acquisition, “if approved, will bestow upon Rogers an unprecedented level of market dominance with respect to the provision of broadcasting distribution and Internet access services.”
Both Bell and Telus highlight in their respective submissions that the deal would result in one company controlling 47% of the English-language broadcasting distribution market in the country.
PIAC, which made its submission jointly with the National Pensioners Federation (NPF), also expressed concerns about the impact the deal will have on competition in the country.
The two organizations commissioned an Environics telephone survey to gauge public opinion about the deal.
According to the survey, “Canadians, particularly those in British Columbia, Alberta, Saskatchewan, and Manitoba where Shaw operates as a terrestrial BDU, are concerned about the impact of the proposed transaction on their BDU service subscriptions and the cost of broadcasting services in general,” the submission reads.
“A majority of consumers view the Rogers-Shaw merger as being bad overall for the broadcasting system, competition and prices.”
Over-The-Top Services
There is also a concern amongst the submissions about the implications of the deal on over-the-top (OTT) services.
ECG and TLN raise this concern, noting that not only would Rogers become “the largest BDU in English Canada… it would also be the market leader with respect to the provision of Internet access services giving it the ability to dramatically influence how Canadians access [OTT] streaming services.”
Telus indicates this could “allow it to negotiate exclusive carriage of foreign online services, such as Netflix, Amazon Prime Video or Disney Plus, through its BDU platform,” according to its submission.
“The existing regulatory framework provides no safeguards to protect against these anti-competitive outcomes,” the submission says.
Bell notes in its submission the deal “will confer upon Rogers the ability to unilaterally control both the linear and OTT ecosystems upon which Canadian English-language programming services depend for their current and future viability.”
ECG and TLN’s submission states they believe the “developments have the potential to impact the continued availability and discoverability of Canadian-owned ethnic television and other media services.”
Broadcast News
Corus wrote to the CRTC concerned about what the deal will do to support for local news. The company’s submission notes “Shaw allocates a portion of its required annual Canadian program funding to Corus for the production of local news on Global Television stations.” The submission goes on to point out Rogers has confirmed, however, that it will terminate the funding arrangement with Corus.
As such, Corus said it is “concerned this decision will have a detrimental impact on local news production and delivery, including in markets like Kelowna, Lethbridge, Saskatoon, Regina, Peterborough, Kingston, Saint John and Halifax, where Corus operates local stations but Rogers does not.”
This was brought up in FRPC’s submission as well, which cites Roger’s supplementary brief where the company stated it intends to redirect the $13 million that Shaw allocates to support Corus news stations to Rogers’ City TV stations.
FRPC’s submission says this “will weaken one of their competitors – meanwhile Rogers has not made any commitments to increase or even maintain the hours of original local news its own TV stations broadcast.”
FRPC more generally argued in its submission that “analysis of this application’s proposals, arguments and evidence leads to the conclusion that it is not the best possible application under the circumstances.” The Forum recommends the application “be denied due to the absence of clear evidence that its approval will serve the public interest and strengthen Canada’s broadcasting system.”
Safeguards
Some of the submissions that opposed the deal included safeguards the organizations would want to see in place if the deal is approved.
FRPC, for example, recommends that if the CRTC does decide to approve the deal, it should “impose a condition of licence requiring Rogers’ BDUs to maintain their current financial support for the Corus TV stations.”
While the Forum indicated it would rather see the application denied in its entirety, IBG stated when indicating safeguards it would like to see that it “does not outright oppose this transaction.” The group argues in its submission the deal “has the potential to be a positive thing for the Canadian broadcasting system, but only if safeguards and conditions are established by the Commission to ensure that this is, in fact, the case.”
Safeguards IBG would like to see implemented include that, at an “absolute minimum, Rogers should be required to continue to carry independent discretionary services currently carried by Rogers or Shaw for a minimum of seven years,” the submission reads.
Another safeguard the group recommends is for affiliation agreements not concluded within 90 days to be automatically referred to CRTC dispute resolution (DR) “with reverse onus on Rogers in DR to demonstrate that terms and conditions of carriage for independent services comply with the Wholesale Code.”
Cogeco also argued in its submission “it would not be in the public interest to approve the transaction without additional safeguards against market abuse,” and asked for additional obligations to “be imposed on Rogers to counter the increase in market power.”
Among other safeguards, the company recommends “a requirement that all of Rogers’ programming, including non-linear programming, be made available for distribution to non-vertically integrated independent BDUs,” the submission says.
“This requirement must be accompanied by a “no head start” rule, ensuring that Rogers will not be able to benefit from a “prime mover” advantage when launching new content.”
Cogeco suggests the CRTC’s “dispute resolution process must also be reinforced in order to prevent Rogers from abusing its dominant position in the context of affiliation agreement negotiations.”
Telecommunications
The CRTC’s review only considers a portion of the Rogers/Shaw deal – other aspects of the deal need approval from Innovation, Science and Economic Development Canada and the Competition Bureau.
These have received criticism as well.
An IT manager, for example, wrote to the CRTC to say the deal will lead to less competition in the west in the telecommunications market. The commentor stated: “Many of my colleagues and friends have moved away from either Telus or Rogers in search of lower cost, affordable Internet and phone services; many finding safe haven with Shaw, which offers significantly lower costs for the exact same services and service levels seen by the larger companies.”
Last Monday, OpenMedia called “on every federal political party leader to join the NDP in explicitly opposing Roger’s plan to purchase Shaw, Canada’s fourth largest telecommunications provider,” a press release says.
The call came after NDP leader Jagmeet Singh announced “his party would stop Rogers from further consolidating Canada’s telecom market by purchasing Shaw.”
OpenMedia, ACORN Canada, Leadnow and North99 gathered over 62,000 signatures earlier this year and delivered them to the federal government and the Competition Bureau, calling on them to stop Rogers from purchasing Shaw, according to another press release.
Support for the deal
The Rogers/Shaw deal has received some support.
Multiple interventions highlight the following benefits of the proposed deal, using the same wording:
- accelerating the transition of Shaw’s cable customers to a full Internet Protocol TV platform;
- expanding the range of new TV offerings (including additional flexible packaging options), functionalities and services – with enhanced content discoverability and accessibility capabilities, such as integrated search and voice commands;
- extending a full range of services (TV, Internet, phone) to more rural and remote areas, resulting in dramatically improved connectivity;
- supporting Canadian TV service providers that compete with foreign streaming services to ensure these jobs and revenues stay in Canada; and
- building on the strength of Shaw’s existing Spotlight community TV stations.
Companies who listed these benefits in their interventions include Boat Rocker, Network Entertainment, Gryphon Productions, Air Bud Entertainment, Holiday Pictures and the Canadian Liver Foundation BC/Yukon Region (which included the final three of the five).
Other interventions highlight the importance of Rogers in terms of 5G infrastructure in the country and indicate support for the company’s plans to increase rural access to high-speed Internet.
