OTTAWA – The CRTC today approved the broadcast side of the merger between Rogers Communications and Shaw Communications, with several conditions attached.
The Commission concluded the transaction – when modified – “is in the public interest and advances the objectives set out for the Canadian broadcasting system in the Broadcasting Act,” its decision reads. “Canadians as consumers will benefit from this transaction.”
One of the conditions included in the decision requires Rogers to submit a revised tangible benefits proposal. Tangible benefits were a significant topic of discussion during the CRTC’s hearing last November.
Originally, Rogers proposed a tangible benefits package worth $5.7 million, according to the CRTC’s notice of consultation.
Public Interest Advocacy Centre and the National Pensioners Federation (PIAC-NPF), however, argued the value of the transaction, which the tangible benefits package is based on, should include Shaw’s terrestrial video on demand and pay-per-view undertakings. Rogers is not acquiring these services and so did not include them in the original calculation of the transaction’s value.
Rogers did provide a new calculation in an undertaking submitted to the CRTC after the hearing that includes the services mentioned by PIAC-NPF, which brought the revised tangible benefits package proposed to $26.6 million.
Other stakeholders who participated in the hearing and submitted interventions also took issue with the proposed package, even after Rogers revised it.
For example, in its final submission to the CRTC, Telus called the proposed tangible benefits “insubstantial” in relation to the value of the transaction.
The CRTC ultimately decided Rogers must submit a revised tangible benefits proposal amounting to $27.2 million and provided instructions for how it expects those funds to be allocated.
Included in this are specific percentages of funding for the Independent Local News Fund (ILNF), the Canadian Media Fund, the Broadcasting Accessibility Fund and the Broadcasting Participation Fund, among other funds and initiatives.
The ILNF has been a significant topic of conversation before, during, and after the CRTC hearing, with stakeholders expressing concern local news in Canada will suffer if the deal goes through in large part because of the potential impact on the fund.
The concern stems from Rogers having indicated it intends to redirect around $13 million in funding Corus has previously received from Shaw for Global News to its own Citytv stations.
Unifor media sector director Randy Kitt told the CRTC this would inevitably lead Corus, which does not currently benefit from ILNF funding, to look for support from the fund “at the expense of many other small communities.”
Channel Zero pointed out the funding from Rogers’ tangible benefits package is not a solution to the problem because “The numbers simply don’t add up.”
The CRTC did specify other conditions related to local news in its decision today, including that “Rogers must air 48 prime time locally reflective news specials each year that are original programming and go over and above its current hours of locally reflective news programming.”
The Commission is also requiring Rogers to report to it regarding its progress on, among other things, its commitments to increasing “the aggregate number of journalists employed in Citytv markets across the country, doubling its journalistic strength in Western Canada,” and on creating “an Indigenous news team composed of journalists based in all the provinces where Rogers provides news content, delivering Indigenous-led stories to First Nations, Métis and Inuit communities,” the decision reads.
The impact of the merger of Rogers and Shaw on independent broadcasters was also a significant topic at the CRTC hearing in November and is addressed in the CRTC’s decision.
Rogers originally committed to providing a minimum of 40 independent discretionary services on each of its broadcasting distribution undertakings for three years, however, stakeholders including Independent Broadcasters Group told the CRTC this was insufficient and proposed it carry 50 for five to seven years.
Rogers, on the final day of the hearing, said it would commit to distributing 45 independent services on Shaw Direct and on Rogers’ and Shaws’ terrestrial BDUs for three years.
The CRTC ultimately decided “Rogers must distribute a minimum of 45 independent English- and French-language services on each of its terrestrial and satellite direct-to-home broadcasting distribution undertakings.” As a condition of approval, Rogers must file an application after the close of the transaction to amend its licences to include this as a requirement.
The 45 independent services excludes services from Corus, which will newly be considered an independent programming undertaking after the close of the transaction.
In a press release this evening, Rogers said it welcomes the Commission’s approval.
“This approval is an important milestone and brings us one step closer to completing our transformational transaction with Shaw,” said Tony Staffieri, president and CEO of Rogers, in the release.
“Together, Rogers and Shaw will accelerate investment in 5G and cable networks across Canada, offer consumers and businesses more choice and competition, and connect rural and remote communities faster than either company could alone.”
While the CRTC has approved the broadcasting side of the Rogers and Shaw merger, the deal also needs approval from ISED and the Competition Bureau.
Rogers still expects the transaction to close in the second quarter of 2022, according to its press release.
“Teams from both Rogers and Shaw continue to work constructively with the Competition Bureau and ISED to ensure they have the information they need to assess the significant benefits the combined company will bring to Canadians and the Canadian economy.”
In a separate press release, Shaw said the CRTC’s review and approval of the transfer of its licensed broadcasting undertakings to Rogers “marks an important milestone towards both companies combining successfully.”
“We appreciate the CRTC’s thoughtful inquiry and remain committed to working with government and regulators to achieve a successful completion of our proposed transaction with Rogers,” said Brad Shaw, executive chair and CEO of Shaw, in the press release.
Not everyone is happy with today’s decision. PIAC released a statement, which argues consumers “will be hurt” by it.
“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,” said John Lawford, executive director and general counsel of PIAC, in the statement.
“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.”
For the full CRTC decision, please click here.
