CRTC called out for “vague”, “unenforceable” safeguards
OTTAWA – Telus, Bell, Independent Broadcast Group (IBG), and the Canadian Communication Systems Alliance Inc. (CCSA) have each filed separate comments in support of the National Pensioners Federation and Public Interest Advocacy Centre’s (NPF-PIAC) petition to the Governor-In-Council, asking for the CRTC’s recent decision to approve Rogers Communications’ acquisition of Shaw Communications’ broadcasting assets to be set aside or referred back to the Commission.
(Cartt.ca obtained copies of the submissions from PIAC and Bell.)
Whittled down to its core, the argument put forth in NPF-PIAC’s petition and the submissions made in support of it is the CRTC did not do enough to protect against the concentration of power that will result from the merger of Rogers and Shaw and as such, the deal will ultimately undermine the objectives of the Broadcasting Act.
As Cartt.ca previously reported, NPF-PIAC have argued the Commission “failed to impose enforceable conditions to protect consumer affordability of TV services.”
Stating NPF-PIAC’s concerns about affordability are valid, Bell’s submission argues the Commission “did not provide reasons or evidence to justify why this transaction should be approved given the impact it will have on programming undertakings being able to secure reasonable terms for the carriage, packaging and retailing for their programming services – a key objective of the [Broadcasting Act].”
The merger of Rogers and Shaw “is not simply about swapping out one BDU (broadcasting distribution undertaking) with another in a local market,” Bell argues, because “Rogers will be able to control the availability of programming services in every English-language market on all platforms as even the most popular channels will need carriage on Rogers to survive.”
IBG is similarly concerned with the impact of the decision on the availability of programming services, claiming “if unchecked, the transaction would effectively put Rogers in the position to determine which English-language programming services survive and thrive, and which die.”
IBG argues while the CRTC did impose new requirements on Rogers that will benefit independent broadcasters, it also addressed key areas of concern with “vague requirements, stated intentions, or provided “encouragements” and “expectations”.”
For example, IBG notes the Commission is requiring Rogers distribute a minimum of 45 Canadian independent programming services on each of its BDUs, but only encourages the company “to ensure that any of its BDUs already carrying 45 or more independent programming services maintain or increase those levels.”
Furthermore, the submission says while IBG appreciates the importance of the carriage commitment, “without a clear enforceable safeguard of carriage terms being no less favourable, such a commitment still gives Rogers licence to use its market dominance to extract concessions as a condition of carriage.”
If the decision is sent back to the CRTC, IBG requests cabinet “identify as material to reconsideration the need for provisions in support of independent broadcasters to be legally enforceable,” its submission reads.
Telus, for its part, argues in its submission the Commission “failed to consider the broader policy implications of allowing further consolidation in the broadcasting sector, when Canada already has one of the most highly consolidated broadcasting markets in the world.”
The company goes so far as to say this will “inevitably lead to even more mergers, as other companies are forced to seek competitive parity with Rogers,” and argues the decision “will dramatically worsen the competitive landscape in the Canadian broadcasting system, harming the welfare of consumers and impairing their ability to access programming.”
Telus says despite competitive harms being put before the CRTC, the Commission still did not impose “meaningful, enforceable conditions to address them,” instead relying “on unenforceable commitments from Rogers, its own unenforceable “expectations” or “encouragements”, or on its existing regulatory framework.”
Telus calls for the CRTC’s decision to be set aside, however, if the decision is sent back instead, the company says the Commission should be directed “to prioritize consideration of the broader competitive effects and implications of the transaction, and if it approves the transaction again, to ensure that it imposes stringent and legally enforceable conditions to ensure the protection of competition in the broadcasting sector.”
Telus further asked for Rogers to be required to refrain from closing its deal with Shaw while NPF-PIAC’s appeal of the CRTC’s decision remains outstanding.
In its own submission supporting NPF-PIAC’s petition, CCSA agreed with comments made by others regarding the CRTC’s “apparent inability or unwillingness to respond effectively to the competitive imbalance and resulting anti-competitive behaviours that have resulted from industry consolidations which the Commission has approved in the past, or, indeed, will almost certainly result from the current proposed Rogers acquisition of Shaw assets.”
CCSA’s submission focuses on Shaw’s decision to shut down its HITS QT+ service as of Jan. 1, 2023. “That notice was delivered despite Shaw’s obligation to deliver the service for a considerably longer period pursuant to its contact with CCSA,” the submission reads.
CCSA notes it previously expressed concern this would happen and argues “the Commission appears to be entirely unable or unwilling to assist: the Commission’s failure to include legally enforceable conditions in [its decision] has exacerbated that situation.”
The organization says with regards to the delivery of satellite relay distribution (SRDU) services, “and HITS QT+ in particular – Rogers undertook, at the public hearing of its application to purchase Shaw’s assets, to honour the existing Shaw SRDU contracts for their full terms,” its submission says.
However, CCSA argues since the notice of shutdown came before the CRTC issued its decision, Rogers and Shaw have both seemed to avoid responsibility for its consequences. “Certainly, at this time, the Commission seems unwilling to apply any enforceable action to either party with respect to resolution of this matter,” the organization’s submission reads.
CCSA notes it “considers it important that the Governor-In-Council be aware of all the potential negative impacts to Canadian broadcasting consumers that have arisen in the context of the Commission’s proceeding and decision in the matter of Rogers’ proposed acquisition of Shaw’s assets, including Shaw’s SRDU business.”
Rogers declined to comment on the submissions made in support of NPF-PIAC’s petition to the Governor-In-Council.
During the CRTC hearing on the Rogers/Shaw merger, however, Ted Woodhead, who was Rogers’ senior vice-president of regulatory at the time (he is now Rogers’ chief regulatory officer and government affairs), accused Bell and Telus of manufacturing concerns, arguing the companies have for decades “consistently advocated for the notion of scale for themselves but have now decided that scale is a bad thing when it comes to Rogers and Shaw.”
Furthermore, in a written submission to the CRTC following the hearing, Rogers referred to its commitments to independent broadcasters as being “unprecedented” and said despite this and the company’s “track-record of distributing far more independent services than our regulatory obligations require,” some (IBG included) are still arguing more safeguards are necessary.
Rogers however, argued the Wholesale Code in combination with measures including the CRTC’s enhanced dispute resolution process, standstill rule, linkage and carriage rules, and the prohibition against undue preference, provide “substantial protection in respect of all the concerns raised in this proceeding.”
