Rogers Communications Inc. told regulators Monday that its proposed $26-billion takeover of Shaw Communications Inc. is necessary not only to create greater competition in Western Canada but also to compete in the increasingly global market of content providers.
"Canada is no longer an island in an ocean alone," said Edward Rogers, chair of the company, at the first day of CRTC hearings in Gatineau, Que. looking into the broadcasting aspects of the proposed takeover.
"While our primary competitors are still Bell and Telus in the cable business, in this global world, our competitors are also increasingly global platforms and brands," said Rogers, who won a high-profile court battle over control of the company's leadership earlier this month.
At the hearings, the company emphasized its investments in internet-based television as key to respond to the threats to Canadian broadcasting from the likes of Netflix, Amazon Prime and Apple TV, since the Rogers offering allows customers to see both domestic and international programs all in one place, while still being in the regulated system.
It said it also plans to invest billions of dollars to expand broadband access and invest in 5G networks to remain competitive.
Brad Shaw, chief executive of Shaw, said the proposed deal comes at a critical turning point in the industry and that the Calgary-based telco can't make the needed network and broadcast investments without a partnership.
“Simply put, Shaw cannot do it alone. We need the scale, strength, and resources of the combined Shaw and Rogers assets."
Dean Prevost, head of Rogers Connected Home, said the investments would increase broadcast competition in Western Canada, especially in rural communities where Telus Corp. is often the only option. He stopped short of assuring that Shaw customers wouldn't see rate increases, but said that competition is the best check against that.
“The best assurance you have is the most incredibly aggressive competitor in the west, which is Telus. Raising rates isn’t an act alone, it’s an act in a marketplace."
The Canadian Radio-television and Telecommunications Commission heard from Rogers and Shaw on Monday, while other interested groups including Telus, BCE Inc. and consumer advocacy groups are scheduled to have their say later this week.
In filings, both Telus and BCE have opposed the deal, saying it would give Rogers control of 47 per cent of English broadcasting subscribers in Canada and too much sway over content distribution and securing rights to content.
Speaking at the return of Parliament Monday, NDP Leader Jagmeet Singh said he was also opposed to the deal.
“We are absolutely opposed to this merger. It’s going to hurt people, it’s going to make life more difficult, it’s going to make the cost of internet continue to rise.”
Interveners have also raised concerns about the loss of about $12 million in funding to Global News channels in Western Canada that Shaw currently supports. Rogers said it plans to offset the loss by expanding its investments in its CityNews network in its Vancouver, Edmonton, Calgary and Winnipeg newsrooms.
The CRTC hearings are focused on the broadcast implications of the deal, including cable networks in British Columbia, Alberta, Saskatchewan and Manitoba, the satellite-based Shaw Direct TV service, and a satellite relay system.
The CRTC won't be considering the market implications for mobile wireless, which will be part of the reviews done by the Competition Bureau and from Innovation, Science and Economic Development Canada.
This report by The Canadian Press was first published Nov. 22, 2021.
Companies in this story: (TSX:RCI.B; TSX:SJR.B)
Ian Bickis, The Canadian Press
Note to readers: This is a corrected story. A previous version included an incorrect location for the hearings.