The recent drama of power play within the Rogers family may be paying off, but the drama of the family-run company’s massive takeover of Shaw at the finish line is just beginning.
When Rogers Communications Inc. announced last March that it had struck a $26 billion deal to acquire Calgary-based cable, internet and wireless provider Shaw Communications Inc., the move was immediately seen as transformative for Canada’s telecommunications industry. seen in
It will take an area that is already in the hands of a small number of companies and make it even more top-heavy, affecting the millions of Canadians who consume television and radio, or high-speed internet or cellular. subscribe to telephone services.
Although the controlling families of both companies withdraw the deal, it needs OKs from three different regulatory agencies for it to become official. And the first of those approval processes begins today in Gatineau, Ky., as the Canadian Radio-television and Telecommunications Commission (CRTC) holds a hearing on what the deal will be.
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What the Rogers-Shaw deal means for consumers, jobs and 5G networks
Partha Mohanram, accounting professor at the University of Toronto’s Rotman School of Management, is among those who expect the regulator to take a long, hard look at the deal as to what it will do for Canada’s already focused telecoms landscape.
“The regulator will have to see whether … the benefits to shareholders outweigh the costs,” he said in an interview. “Because it gets worse every time there’s a merger.”
focus on broadcast
Shaw’s executives are due to appear before the committee on Monday to decide why they should be allowed to sell themselves. For the next three days, people against the plan would follow, including consumer rights groups, independent broadcasters – and most obviously, Rogers’ main competitors, Bell and Telus.
Rogers will take the mic Friday to make his case, which chair Edward Rogers is reportedly set to attend. He has appeared in public for the first time since a fierce battle for control of the company broke out last month.
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While the merger involves a complex transfer of broadcast, cable, Internet and wireless assets across the country, the CRTC will only address issues that have an impact on the broadcast side, mostly involving 16 television channels in BC, Alberta, Saskatchewan. and Manitoba; all of Shaw’s cable, satellite and pay-per-view television services; and 25 percent ownership in public affairs channel CPAC.
The real thorny issues of what happens to Canada’s wireless landscape after Rogers swallows Shaw’s two million wireless customers will be largely ignored by these hearings.
The fact that Canada’s telecommunications regulators won’t really pay much attention to the most pressing telecommunications issues shows how much the industry landscape is, says researcher Ben Klass, who studied telecommunications policy as a PhD candidate at Carleton University. is bizarre.
About the CRTC, he said, “In Canada we have this silent system, in which two ships pass at night.” “But as far as the regulator is concerned, they do not intersect.”
While the CRTC has jurisdiction over the wireless market, they are also in charge of broadcasters to ensure that there is a healthy competition for consumers to choose from. And the regulator clarified it In your notice for hearing Klass said the deal’s impact on Canada’s broadcast landscape will be its main focus.
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Instead, the regulator is leaving the review of the impact on the wireless market and related issues to other watchdogs – namely Canada’s Bureau of Competition, and the federal Department of Innovation, Science and Economic Development (ISED).
“They wanted to get out the gate and say, ‘Don’t talk to us about this thing that’s probably very important to you and is involved in this merger … you can try elsewhere,'” Klass said. . “I think it’s unfortunate.”
On the broadcast side alone, there are reasons for concern, Klass said.
“Independent broadcasters are increasingly concerned about being able to market their content to Rogers in one half of the country and Shaw on the other – and in the process generating some bargaining power – rather than knocking them over. There will be only one door,” he said.
“This is what the CRTC is mainly for,” he said. “Making sure it doesn’t throw a merger [TV] The industry is far away.”
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Klass credits the CRTC for at least making its hearings public, unlike the other two regulators, which usually announce the launch of the investigation – and then announce the results.
“The Competition Bureau, to my knowledge, has never successfully opposed outright mergers,” Klass said.
A key driver for the deal, from Rogers & Shaw’s perspective, is that their businesses are so complementary.
Rogers-Shaw merger gives Ottawa a chance to push for better deals for cellphone customers
Rogers is a force in the Ontario market, where not negotiating with at least one branch of the media conglomerate is next to impossible. But the company is nowhere near as dominant in western Canada, where Shaw has more than five million cable and Internet customers, and two million cellphone customers through its Freedom Mobile brand.
The appeal for Rogers is clear, said Businesshala Intelligence telecom analyst John Butler.
“By taking advantage of a Rogers Shaw membership, they can offer multi-service bundles and use their network as the basis for 5G expansion in the region,” he said in a recent note to customers. “
effects of family drama
Butler said he thinks the deal will eventually go ahead in some form, but that the messy family fight for control of Rogers Communications didn’t help the company.
“While we do not believe that the Shaw deal under review is in imminent danger of derailment, this dispute could skew regulators’ opinion on Rogers’ ability to integrate Shaw.”
Mohanram also suspects that the regulator has the appetite to block the deal altogether, but he is among those who think the telecommunications industry in Canada is in dire need of overhauling.
“You have to ask yourself, ‘Where is that kind of competition going to come from? They said.
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At the very least, Rogers may be forced to sell properties, such as Freedom Mobile, to obtain Ottawa’s seal of approval. But that too is not without its problems.
“The value that you see in a Rogers Shaw property, if you start eating away with that number, eventually they’re going to go away,” Mohanram said. ,[Regulators] The deal doesn’t need to be scrapped, but they have to make the deal less attractive to Rogers.”
Any type of rubber-stamping would be bad for Canada, but good for telecommunications companies, he said. “There’s this kind of casual, casual elite among them.”