CRTC Approves of Rogers Buyout of Shaw, Clearing One More Monopoly Hurdle

Cell phone and Internet is one step closer to being a whole lot more expensive. This after the CRTC approved of the Rogers Shaw deal.

Canadians already pay some of the highest cell phone rates in the developed world. That problem is one step closer to being a whole lot worse. More than a year ago, Rogers said that they wanted to buy Shaw for an estimated $26 billion. The move would reduce the already incredibly sorry state of competition in the sector from four players down to a mere three big companies. After the news broke, Canadians flooded the competition bureau with complaints, trying to tell the Canadian government not to approve of the deal.

Experts and observers agree that the deal is a bad one for Canadians as a whole. Opposition was also found at a government standing committee. It seemed almost all of Canada is opposed to this deal.

Now, the notoriously anti-consumer regulator, the CRTC, has apparently approved of the deal. The move basically gave a giant middle finger to Canadians while continuing to earn the title of being the Canadian poster child for regulatory capture. From CP24:

The Canadian Radio-television and Telecommunications Commission has approved Rogers Communications Inc.’s acquisition of Shaw Communications Inc.’s broadcasting services, but will force the company to meet a series of conditions it laid out Thursday.

The approval from the broadcasting regulator is one of several hurdles Rogers must clear as it tries to close the $26-billion deal it signed in March 2021 that will see it acquire 16 cable services based in Western Canada, a national satellite television service and other broadcast and television services.

When it came to the effects of competition, the CRTC apparently took a head in the sand approach to it:

“The commission is of the view that the application, subject to the modifications … is the best possible proposal given the circumstances and that this transaction would not diminish the diversity of voices in Canada,” the report reads.

It also says the CRTC found that the competitive landscape would not be unduly affected and that the transaction would be in the public interest.

This, of course, is the same commission who, last year, had a scandal involving the chairman having a beer with a Bell CEO. The photo signified the cozy relationship between the CRTC and the very corporations they were allegedly regulating.

Consumer and digital rights group slammed the decision. OpenMedia called the decision “tone deaf“:

The Canadian Radio-Television and Telecommunications Commission (CRTC) today announced their approval of the contentious $25Bn buyout by Rogers Communications of Shaw Communications, pending since March 2021. The CRTC described the deal as “in the public interest” and said “Canadians as consumers will benefit from this transaction.” While the Competition Bureau must still give final approval for the deal to proceed, today’s decision makes the buyout significantly more likely, and will worsen Canada’s struggles with competition, choice, and affordability in our Internet and cell phone markets.

“This is a tone-deaf decision from a CRTC that has completely lost touch with ordinary people in Canada,” said OpenMedia Campaigns Director Matt Hatfield. “The CRTC claims their modified version of the deal is in the best interest of Canadians; in what world is that true? Every single guarantee Rogers is making to secure our watchdogs’ cooperation is a short-term payment or unenforceable promise; the long-term outcome is clearly a net loss to everyone outside the Rogers and Shaw families. Ordinary people know very well what this deal will mean; less competition, fewer jobs, and higher prices for telecom customers. And yet not one of the institutions we’ve charged with assessing the deal has had the courage to say it. Amidst record-breaking inflation that has families in Canada feeling the pinch, this buyout puts us squarely on a path to significantly higher Internet and cell phone bills.”

“There’s only one arm of government that has tried to assess the whole deal: our MPs on Parliament’s INDU committee. And they’ve been perfectly clear in their conclusions: this deal is bad for Canadians, and highlights serious issues with our competition law and current CRTC,” continued Hatfield. “When our elected representatives are saying across party lines that the deal shouldn’t go through, and our institutions rubber stamp it anyway, that’s a sign we need a systemic overhaul. That means both changes to the Competition Act to broaden the Bureau’s scope and power to to actually address deals like this, and new CRTC appointees that will actually prioritize lowering Canada’s sky-high Internet and cell phone prices.”

The Public Interest Advocacy Centre (PIAC) also expressed disappointment in the move, predicting that the deal will lead to higher bills:

Consumers, especially in the west, will be hurt by the CRTC’s decision today to approve Rogers Communications Inc.’s (Rogers) take-over of Shaw Communications Inc.’s (Shaw) broadcasting interests, including cable TV, IPTV and satellite TV distribution based largely in British Columbia, Alberta, Saskatchewan and Manitoba, said the Public Interest Advocacy Centre (PIAC).

“Shaw customers should get set for higher TV and internet prices, and a ‘forced march’ to Rogers’ Ignite TV platform,” noted John Lawford, Executive Director and General Counsel of PIAC. PIAC intervened, along with the National Pensioners Federation (NPF), before the national communications regulator, the Canadian Radio-television and Telecommunications Commission. The hearings were the CRTC-regulated part of the larger proposed Rogers-Shaw acquisition.

“We were particularly disappointed that the CRTC appears to have completely ignored the potential cost effect on consumers – in particular during a time of extreme reliance of Canadians on broadcasters in Canada to get news and information on critical events such as wars and pandemics,” continued Lawford. “There is an uncritical acceptance of bald assurances of ‘improvements’ to the broadcasting system that we are convinced were disproven by our evidence, that of other broadcasters and independent producers, and the majority of those Canadians who expressed their opinion on the deal.”

Indeed, the next step is the Competition Bureau. Canadians have flooded that arm of the government with letters urging them to reject the deal. They know that it will lead to higher bills, less competition, and worse quality of service. Some have already expressed doubts that the Competition Bureau would actually act in the interest of Canadians, however. Those expressing doubt cite the history of the Competition Bureau simply rubber stamping mergers and takeovers in the past.

The monopolistic takeover isn’t a done deal yet, but it is currently one step closer to becoming reality. It seems that everyone except the regulators know exactly what will happen: higher bills, mass layoffs, worse quality of service, and even less competition in a market that sees very little, if any, competition. While the CRTC decision was expected, it is still disappointing to Canada anyway.

Drew Wilson on Twitter: @icecube85 and Facebook.

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