‘Uneasy in the dark’ — the reasons for Shaw’s continuing holdout on a deal

Verizon released its latest details last week about a potential takeover of 21st Century Fox’s entertainment assets. Verizon offered a range of $30 billion to $35 billion, or $2.5 billion less than Comcast, which also reportedly bid for the content company.

As Reuters notes, this is likely a competitive bidders after a DOJ lawsuit blocked AT&T’s planned acquisition of Time Warner, which Verizon also owns, earlier this year. And, like AT&T, Comcast seems interested in the potential content business in general. This begs the question: If competition is on the rise, why is Shaw’s holdout on helping Sprint rival Rogers Telecom’s proposed takeover of Shaw Media expected to be a moot point at a meeting of the CRTC on Monday? That sale, to Rogers, is even shorter than a Comcast bid, and does not involve any of Bell’s current services. In fact, Rogers did not even bid on Fox, so the idea of competition for content is hardly one that has inspired the Ottawa’s review process. Shaw’s dispute with Rogers, as reported, dates back to 2009 — it was down to the wire that summer — when Shaw struck a deal to sell its broadcast assets to Rogers. That deal fell apart after Rogers and Shaw’s owners, Canwest Global Communications and Quebecor, failed to come to terms, and Rogers instead went after Shaw’s cable assets.

Both companies have been bemoaning CRTC’s focus on the sale, hoping instead to address how to better regulate Canadian mobile prices. Here, there is little consensus in the industry, with Rogers saying in its media release that its proposal to raise prices at Shaw’s Legeco line would not be enough to tackle rising tariffs and Shaw suggesting the CRTC should look at what governments do in other countries. Both statements seem unlikely to change the CRTC’s decision, however. As The Globe and Mail noted, the “CPC called on the federal government last week to offer new regulatory guidelines to lower the rates that the large national carriers charge for wholesale wireless services.” Last year, the CPC said it would look into a possible price cap on cellular pricing.

It is possible Shaw’s delay in paying off AT&T’s price won’t affect the government’s focus on pricing and competition in the market — especially considering that Shaw has never filed any opposition to the sale of the company’s mobile spectrum — and that the CRTC does not think otherwise. But to make a decision on that decision the government will need an explanation of how its wireless policy differs from that of AT&T’s, and how Shaw’s presence at the hearing could affect their review of a proposed wireless deal, and how likely it is that Canadian consumers are going to receive lower rates than they would have otherwise been.

Read the full story at the Globe and Mail.


Shaw Communications CEO says Ottawa is keeping household choice at bay

Canadian telecom regulators issue threat to Netflix over overseas content

Regulator says it’s too soon to raise Canadian prices as it reviews Shaw-Rogers merger

Leave a Comment