Economic Undertakings

Consumer groups call on Ottawa to overturn CRTC approval of Rogers-Shaw

The Public Interest Advocacy Center (PIAC) and the National Pensioners Federation (NPF) filed a petition on Wednesday asking the Federal Cabinet to overturn the Canadian Radio-television and Telecommunications Commission (CRTC) approval Rogers Communications Inc.’s proposed $26 billion acquisition of Shaw Communications Inc., Canada’s fourth-largest telecommunications operator.

The CRTC was tasked with reviewing the broadcast side of the Rogers-Shaw merger, providing its approval of the deal last month. The commission authorized the transfer of Shaw’s broadcasting assets, including certain broadcasting undertakings, as well as broadcasting distribution undertakings (BDUs) which include cable services, satellite television services and certain television services based Internet Protocol (IPTV) at Rogers.

PIAC and FPN are concerned that the merger will negatively impact the affordability of television services, particularly for Shaw customers who do not subscribe to any underlying or additional Internet service from the company.

“Consumers shouldn’t be paying for these mergers,” said John Lawford, PIAC’s executive director and general counsel. “This petition is the result of our concern that the CRTC has failed to impose enforceable conditions to protect the affordability of television services for consumers.”

Both consumer groups submitted investigative evidence to the CRTC showing that Canadians, especially seniors, were concerned that prices for television service would rise if Rogers acquired Shaw – and that this concern was greater for Shaw customers.

The Rogers-Shaw deal still requires approval from two regulators: the Competition Bureau and Innovation, Science and Economic Development (ISED) Canada.

The Competition Bureau is examining the possible impact of the merger on competition in the affected industries, while ISED Canada is evaluating the transfer of spectrum licenses from Shaw to Rogers.

Rogers reiterated in its strong first quarter earnings announcement last week that it expects the deal to close in the second quarter of this year. Rogers and Shaw are working to a self-determined June 13 deadline for the merger. The two telecom operators are currently seeking to divest themselves of Shaw’s wireless unit, Freedom Mobile, to push the merger through ISED Canada.