Shaw-Rogers merger could force Canadian customers to pay more for TV service, watchdog warns

The federal broadcast regulator will begin a public hearing Monday to examine whether its members will block a proposed Shaw merger with the parent company of Rogers, which would have big implications for how…

Shaw-Rogers merger could force Canadian customers to pay more for TV service, watchdog warns

The federal broadcast regulator will begin a public hearing Monday to examine whether its members will block a proposed Shaw merger with the parent company of Rogers, which would have big implications for how Canadians watch their TV — and for what price.

When the Competition Bureau asked the CRTC to block the deal last month, it said the proposed transaction would be anticompetitive and reduce competition. It would give the telecom company power to secure exclusive rights to show a premium TV channel and set up a “strong duopoly” to control customer access to TV programming.

The Competition Bureau has repeatedly expressed concerns about rising phone bills in Canada. Those concerns will dominate the CRTC hearing, said Norm Boxall, a telecom analyst with Strategic Counsel.

“I think the CRTC will focus on wireless service,” he said. “It’s the same thing, how much does it cost me to talk, and where do I get the most competition.”

As it stands, every company offering mobile services in Canada has to make part of its revenues from wireless. The Shaw-Rogers deal would have consolidated this competitive advantage.

The CRTC will use the hearing to ask questions of Rogers and Shaw and the telecom companies’ representatives. It will also hear from retail and digital content providers that have made submissions on the proposed deal, which include a number of digital media companies that have already been dealing with the competitive pressures from BCE and Telus. These groups are concerned that the agency will create rules that will be difficult to meet, and further potential negative effects on prices.

The CRTC will also hear from the Competition Bureau. The bureau said it would try to balance concerns that Shaw’s results “will be better off as a result of a combined Shaw-Rogers organization that better serves the needs of the small and medium-sized business segments.”

It also wants to examine whether the acquisition would keep competition high on TV, particularly for premium television and movies.

It will also judge whether the acquisition will have adverse effects on Canadians’ ability to use their cellphones outside their home territories.

The CRTC last year rejected Telus’ acquisition of Mobilicity because of concerns about that company’s coverage.

The public hearing will run until Jan. 19 and will feature testimony from the agencies, industry stakeholders, experts and the public.

A wireless company and others that will offer their views during the hearing.

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