The fight to stop the Shaw Rogers merger is continuing at the Standing Committee. Questions revolve around its impact.
The Canadian ISP market is already highly consolidated as it is. In many regions, the choice for who will be your carrier for telephone, TV, or Internet is typically a choice between three players. Those three players are often either Telus, Rogers, and Bell or Telus, Shaw, and Bell. There are a few regional players, but those are few and far between in Canada. Either way, there are four big players: Telus, Rogers, Bell, and Shaw.
In the current market, Canadians pay some of the highest rates in the world – prices so high, it even makes American’s raise their eyebrows in surprise. With the current oligopoly situation, the high prices are basically here to stay as the government and the regulator, the CRTC, just doesn’t seem to even bother trying to fix such a massively broken system. As a result, Canadians find themselves footing the bill of this crushing monopoly-like situation.
So, it isn’t really a surprise that when word came down that Rogers was hoping to buy Shaw last year, Canadians gave a massive collective groan. They know full well that such a merger can only mean one thing: higher bills and increasingly bad service. In response to the news, Canadians turned up in droves to the competition bureau to demand that the merger get stopped.
Wind Mobile founder, Anthony Lacavera, agreed that this merger is a raw deal for Canadian consumers. He pointed out that the merger would hurt competition in the already highly consolidated industry. In an initial hearing, Rogers didn’t exactly get a warm reception from MPs who had a lot of questions. Even the corporate friendly Liberal party looked at the deal with skepticism. Further, academics and experts all agreed that the Rogers Shaw deal will be a rotten one for Canadians.
That overwhelming outcry about the deal is carrying on this year as well. Open Media testified before government saying how much the deal would be harmful for Canada. Armed with a petition of over 61,000 signatures, the digital rights organization said that the deal would be a bad one for Canadians:
On February 16th, OpenMedia testified before the House of Commons Standing Committee on Canadian Heritage on the Rogers-Shaw merger. Our thoughts? The Rogers-Shaw merger should not be allowed under any circumstances. You can read our Opening Remarks in full here.
In our testimony, we told the committee that Rogers’ plan to buy Shaw is a disaster for competition, diversity and innovation in Canada. It will lead directly to higher prices for cell phone and Internet services, job losses in news media and in telecom, and a single company’s domination over our media like we’ve never seen before. We have some resources available that dive deeper into everything wrong with the deal, but it’s not that complicated: fewer competitors always means higher prices for us.
We also took this opportunity to highlight the tireless efforts of people in Canada who are speaking out against the sale. We told the committee how YOU helped generate over 61,000 signatures on a single petition opposing the Rogers-Shaw buyout. You even set new records for public engagement at the Competition Bureau for the comments you submitted to their review of the deal. Your comments and participation in our campaign directly shaped our testimony, which will be used in the Heritage Committee’s analysis and recommendations to the House of Commons on what to do about the Rogers-Shaw buyout.
The organization is still encouraging Canadians to sign their petition to stop the merger as well.
From a business perspective, whenever a merger happens, executives often say how positions won’t get slashed and it will just be status quo. Then, when the cameras and the heat is off, the flood of pink slips eventually follows. This knowledge has gotten publishers upset and pointing out that this merger would mean job losses in the media sector. From Mobile Syrup:
Executives from Rogers have said their merger with Shaw will be good for local news as they’ll create localized teams to serve specific communities.
Critics have argued the validity of this statement from the beginning. In their latest outcry, several witnesses told the Standing Committee on Canadian Heritage local news will face the consequences if various government bodies approve the Rogers and Shaw merger.
Catherine Edwards, executive director of the Canadian Association of Community Television Users and Stations (CACTUS), said community news has long suffered from similar mergers. Over the past 20 years, 75 percent of the 300 cable TV stations that served local communities have shut down. Cable giants have scaled back on production infrastructure to cities and instead focused on selling tv subscriptions, specialty channels and mobile services.
“We believe community-owned media is the best way to serve communities with local news and to ensure a diversity of voices continue to fill our airwaves,” she said.
Edwards said local news stations are also important to all politicians.
“These stations ensure that you as parliamentarians can reach your constituents to talk about the issues that are important, not sound bites muted out from mega-corporations who are interested in blockbuster U.S series, but community-owned entities committed to supporting local democracies.”
It’s safe to say that this is a heck of a sign how bad the Rogers Shaw deal actually is. When Freezenet agrees with broadcasters and publishers on something, you know it’s a really bad deal. How often have we been opposed to what the big publishers have been saying about link taxes and Bill C-11? Even we are saying, “Uh, yeah, we’re on side with the broadcasters and publishers on that one, the Rogers Shaw deal sucks.”
When it comes to ISPs, though, the CRTC (Canadian Radio-television and Telecommunications Commission) has long had a reputation of maintaining the failed “let the market forces decide” position no matter how detrimental it is to the Canadian public. So, there are government arms that would be warm to the idea of letting the ISPs continue to consolidate and increasingly become a giant monopoly. So, even with all this competition, there is a very real possibility that this disaster of a deal might still get through. That’s why it is imperative for Canadians to continue to keep up the pressure if they don’t want to see the market get any worse than it already is – as difficult as that is to imagine of course.
Drew Wilson on Twitter: @icecube85 and Facebook.
