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Rogers Communications and Shaw Communications at the CRTC public hearing in Gatineau, Quebec.
Edward S. Rogers, Chairman of the Board of Directors of Rogers Communications, Brad Shaw, Executive Chair and CEO of Shaw Communications and Tony Staffieri, Interim President and CEO, Rogers Communications at the CRTC public hearing in Gatineau, Quebec, November 2021.
GATINEAU, Quebec, Nov. 22, 2021 (GLOBE NEWSWIRE) --
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Good morning, Mr. Chair, Commissioners and Commission staff. My name is Ted Woodhead. I am Rogers’ Senior Vice President, Regulatory. We are pleased to be here today. Let me begin by introducing our panel:
a) First Row
To my right is Dean Prevost, President, Rogers Connected Home
To Dean’s right is Edward S. Rogers, Chairman of the Board of Directors of Rogers Communications
To Edward’s right is Brad Shaw, Executive Chair and CEO of Shaw Communications
To Brad’s right is Paul McAleese, President, Shaw
To my left is Pam Dinsmore, Vice President, Regulatory – Cable, Rogers
b) Second Row
On the second row, from your right to left are:
Peter Kovacs, Director, Regulatory – Content Distribution & Broadband Policy, Rogers
Susan Wheeler – Vice-President, B2B Distribution and Regulatory, Rogers Sports and Media
Eric Bruno – SVP Content and Residential Products, Rogers
Lisa Damiani – Chief Legal and Regulatory Officer, Rogers
Peter Johnson – Executive Vice President, Chief Legal and Regulatory Officer, Shaw
Dean Shaikh – Vice President, Regulatory Affairs, Shaw
c) Third Row
On the third row, from your right to left are:
Robin Mirsky – Executive Director, Rogers Group of Funds
Julie Henson – General Manager, Rogers tv
Andrew Eddy – Vice President, Programming, Shaw
Cynthia Rathwell – Vice President, Legislative & Policy Strategy, Shaw
Paul Cowling – Senior Vice President, General Counsel & Regulatory Affairs, Shaw
With that, I will turn it over to Edward.
[Edward S. Rogers, Chairman of the Board of Directors of Rogers Communications]
Thank you, Ted. Good morning, Mr. Chairman, and Commissioners.
My name is Edward Rogers, Chair of Rogers Communications. I am honoured to be here today to request your approval for the merger of Rogers and Shaw; two separate companies, but one common vision for the future.
My father, Ted Rogers, and Brad’s father, JR Shaw, started their companies from almost nothing, invested and risked everything. They were visionaries. They were builders. They were incredibly proud to work, live and invest in Canada.
Both companies invested in their future and brought Canadians the latest and most innovative products and services. Although capital intensive and very challenging, both companies always delivered on all their commitments; to the CRTC, to investors, to debt holders and to customers.
I grew up, like Brad, in the business from the bottom up and learned early-on that the licences our companies hold are a public commitment and responsibility. Over the decades when we give our word, we know the absolute importance of delivering on those promises.
The commitments Rogers and Shaw will make around this proposed merger is no different. Our board, our management team and I are totally committed to this deal. We will stand behind each and every commitment made by our team today. Just like every other time we have appeared before you, we will always meet our obligations and our commitments.
Canada is no longer an island. We participate in a global industry, with global platforms that bring Canadians and people all over the world wonderful new products and services. However, they can also pose a challenge to Canadian companies and Canadian culture.
We need to make sure that Canadians have continued access to high quality networks and that Canadian companies can still add value. Canada has some of the very best wireline networks in the world. Bell and Telus are our primary competitors in cable, but it is a global world, and increasingly our competitors are global platforms and brands.
As a country, we need to look at these global trends and understand how we can fit into them. Today’s telecommunications networks require scale to compete on the world stage. We believe passionately that the combination of Rogers and Shaw will help contribute to a stronger facilities-based future for Canadians.
The promises we have made as part of a combination of Rogers and Shaw are bold, but it is what is needed. The talented teams across both companies will bring these to life.
This deal will benefit our customers and our future. It should, and it does, provide strong benefits to Canada. Rogers is proud of meeting our commitments for over 60 years. I pledge that Rogers will continue to do so.
Now, I turn it over to my good friend, Mr. Brad Shaw.
[Brad Shaw, Executive Chair and CEO of Shaw Communications]
Thank you, Edward. Good morning.
Before I start, I want to reflect on the recent tragic events that are impacting our customers, employees, family and friends in British Columbia. While B.C. is a strong and prosperous province, it is truly suffering at the moment. Among the highways that are affected by the devastating flooding, there are hundreds of kilometers that do not have connectivity. We recognize that our industry has a role to play in British Columbia’s recovery by investing in extended networks. I know both Edward and I strongly believe in improving connectivity in Canada. That is just part of our shared vision that brings us before the Commission today.
I am excited to be here to talk about our decision to join with Rogers and why it will set Canada and its broadcasting system on a path to a very bright future. We are fully committed to this transaction. In 1970, my father, JR Shaw, embarked on a new venture and risked everything we had to launch Capital Cable in Sherwood Park, Alberta. Over the next 50 years, my family and thousands of hard-working employees across Canada built Shaw Communications into the company that it is today – delivering cable, satellite, Internet, voice, and wireless services to millions of Canadians.
My family and our employees are incredibly proud of what we have created at Shaw. For the past five decades, Shaw has been at the forefront of Canada’s broadcasting system, connecting Canadians with each other and the world.
At every step along the way, JR, our family, and our employees have always put our customers and communities first. Our decision to combine our company with Rogers was no different. As we looked to the future – something JR always insisted we do – it became clear that our company, our industry, and our country are at a critical turning point. Without significant network investments in wireline and wireless, it will be impossible for Shaw to meet the evolving needs of Canadians, expand to serve more communities, and continue to put the needs of our customers first. Simply put, Shaw cannot do it alone. We need the scale, strength and resources of the combined Shaw and Rogers assets.
By joining Rogers, we will expand and accelerate the multi-generational investments needed to close the digital divide and compete more effectively across Western Canada, while expanding competition to communities that currently have little or no choice.
We remain guided by JR’s encouragement – to “be bold and courageous and thrive on change.” Joining forces with Rogers not only makes sense for Shaw, it makes sense for Canada. Combining the complementary assets of our two companies allows Rogers and Shaw to invest so much more than the sum of what our two companies can do apart.
Shaw is thrilled to join forces with Rogers. Together, we will make a brighter future possible.
[VIDEO #1 – HISTORY OF ROGERS’ AND SHAW’S ACHIEVEMENTS]
Our Vision for Canada
[Dean Prevost, President, Rogers Connected Home]
These two families have strong legacies and a shared vision of Canada’s future.
That shared vision is one where all Canadians, regardless of their income or where they live, are able to realize their full potential in a digital world. It is a vision that is rooted in the values that Ted and JR instilled in their companies. Both companies have always put their customers first, embraced change and innovation and worked to build a better Canada.
This historic transaction will make world-class digital infrastructure possible for generations to come. There has never been a more important time for our industry and our country.
Canada is facing a defining moment in its history as the digital revolution accelerates around us. While digital offers new opportunities to create jobs, diversify the economy, strengthen our innovation sector and fuel Canada’s economic recovery, it also presents enormous challenges.
Among them is the growing digital divide that separates Canada’s urban and rural areas, including Indigenous communities, as well as the critical need to ensure that every Canadian, regardless of income or postal code, can participate in the digital world. Canada’s ability to invest in a robust, secure and competitive network infrastructure is critical to overcoming these challenges and securing Canada’s future prosperity.
The importance of investing in world-class networks was never more clear than during the COVID-19 pandemic. So many of us had to pivot to online work, education, health and entertainment as in-person interactions suddenly shifted online. Our strong networks remained robust and resilient in the face of unprecedented demand because companies like Rogers and Shaw poured billions of dollars into their networks.
We need to build on and increase these investments to address the challenges of the future.
For Rogers and Shaw, those challenges are a call to action. By coming together, we will achieve the scale required to build national fibre and 5G networks. As a truly national network, we will provide critical products and services, which will benefit Canadians in the West and in every other region of the country. By making generational investments in network infrastructure, we will accelerate adoption of next-generation platforms and services by all Canadians, including those living in rural areas and those with lower incomes. This is essential for Canada to compete on a global stage, and it is critical to the future of the Canadian broadcasting system and its ability to achieve the objectives of the Broadcasting Act.
We will overcome the challenges of the digital age by making four key contributions.
1. Enhancing Competition
First, we will enhance competition. In coming together, Rogers and Shaw will bring true competition to the prairie provinces and British Columbia. Today, in many smaller communities in B.C. and Alberta, consumers do not have a competitive option to Telus. We will provide that competition.
When we announced our merger earlier this year, we committed to invest $2.5 billion to build 5G networks in the West. This is an enormous investment and one that Canada needs in the 21st century. By building more advanced wireline and wireless networks, we will accelerate Canada’s digitization and energize the diversification of the Western Canadian economy.
I recently visited communities in B.C. and Alberta and heard from residents about the challenges they face in areas where only one provider is present, or connectivity is limited. I heard stories of residents who drove from the scene of car accidents just to get reception to contact emergency services. I also heard from a municipal leader who was forced to join conference calls on COVID-response from a payphone. As the Mayor of Prince Rupert said to me, “we desperately need competition”.
Investing in robust networks and IPTV platforms will also foster competition within the broadcasting system. At its core, our application is based on the fact that Rogers and Shaw together, with greater scale, can compete more effectively against Telus and Bell. It will also strengthen our ability to provide an alternative to the global media giants that are threatening the business models and sustainability of Canada’s broadcasters and distributors.
2. Helping Bridge the Digital Divide
Second, we will help bridge the digital divide between urban and rural communities. Today, more than two million Canadian households cannot access broadband services. These Canadians live in thousands of smaller, often isolated, communities that are on the wrong side of the digital divide. We will provide them with access to broadband for the first time. Countless community leaders and businesses in those communities have shared just how transformative that connectivity will be.
Rogers will spend $1 billion to create the new Rogers Rural and Indigenous Connectivity Fund dedicated to connecting underserved communities across the West. We are now consulting and working with Indigenous communities to understand their needs and identify sustainable local connectivity solutions.
Earlier this year, I visited Coastal First Nations in Haida Gwaii and the traditional unceded territory of the Lheidli T’enneh [“clay-clayten-nay”] in Prince George. I heard powerful personal stories and first-hand experiences centred around their connectivity needs.
I heard the story of Brenda Wilson, whose sister Ramona was murdered in 1996 on Highway 16, or the “Highway of Tears”. Brenda spent years trying to get justice for Ramona – and told us how important it was that we were listening and helping bring connectivity to the region. In conjunction with the B.C. and federal governments, we are now connecting the entire Highway 16.
This is only one of many stories that reinforce the deep responsibility we have to build a better future for Indigenous communities. The ability to make a call from a highway if your car breaks down or to connect to Wi-Fi at a local rest stop, is not a nice-to-have, it’s a must-have.
3. Offering More Affordable Options
Our third contribution is to extend Rogers’ Connected for Success program, Canada’s leading Internet and TV affordability initiative, to consumers in the West. This important program provides more affordable options to lower-income Canadians and other marginalized communities. It represents Rogers’ long-term commitment to Canada’s most vulnerable. We’ve discussed the program with the B.C. government, and it has attracted a lot of positive attention.
4. Transitioning to a Digital World
Finally, we will help ensure that every Canadian is able to transition to the digital world. Our commitments to be an effective competitor, to expand and enhance our networks and to offer more affordable options to Canadians will enable consumers and businesses to flourish as our economy rapidly evolves. Our plan will also help the Canadian broadcasting system transition to the digital world.
Our merger with Shaw comes at a time of both generational challenges and opportunities. Canada has to adapt and evolve to ensure all of its citizens can enjoy the benefits of living and working in the digital age.
By addressing these challenges head on, Rogers and Shaw are committed to ensuring that every Canadian can participate in the digital future. No one should be left behind.
Your approval of this transaction will help us achieve this vision by ensuring the Canadian broadcasting system can respond to these challenges. Together, Rogers and Shaw will make more possible.
Our Plan for the Canadian Broadcasting System
[Eric Bruno – SVP Content and Residential Products, Rogers]
Canadians are increasingly leaving the traditional broadcasting system and discovering new programming, new platforms and new ways to access content online. Younger generations are consuming content in ways that are fundamentally different than their parents. They are cord-nevers who are always looking for the latest app. Our world is changing faster than we ever could have imagined.
We have a plan that embraces this digital transition, which is specifically tailored for the Canadian broadcasting system. It has four pillars.
Pillar 1 – Our Customers
The first is to be customer-focused. Delivering world class experiences and services to more Canadians is at the heart of this transaction. We will offer next-generation features, functionalities and services that will provide our customers with superior technology, enhanced choice and ease of use.
Almost 28 million Canadians now watch streaming services like Netflix, Amazon Prime Video or Disney+. Millions of households also rely on a digital cable subscription to access their favourite TV shows and news and sports programming. By providing seamless access to both linear channels and digital streaming services on our IPTV platform, we will encourage these customers to remain in the regulated system.
Our strategy is to marry linear and streaming options so that customers can easily access any program through the same platform. Ignite TV’s advanced features, such as voice-search, voice-activation and its intuitive user interface, are a compelling combination for our customers. These features help consumers discover Canadian programming services and help those programmers maintain their audiences and revenues ensuring continued investment in Canadian programming.
Rogers’ plan for migrating Shaw customers to Ignite will be guided by our “customer-first” philosophy. We will give them the flexibility to decide how to migrate and we will provide them with incentives to do so. Each customer will transition over time in as seamless a manner as possible.
We also recognize that some Canadians face economic barriers to accessing the broadcasting system. As mentioned, a few minutes ago, we will offer our low-cost Internet and TV bundles through our Connected for Success program to consumers in the West. This program provides eligible Canadians with access to low-cost high-speed Internet services and the option to add on TV packages. It is available to hundreds of thousands of Canadians who are eligible for rent-geared-to-income, federal guaranteed income support or provincial disability and income benefits. It was recently expanded to involve Indigenous communities and participants in the Federal Assistance Program for Refugees.
Pillar 2 – Investment
Our second pillar is network investment. Our ability to provide customers with access to world class networks, platforms and services depends on the investments we make. The importance of this was emphasized by the Commission in its 2018 Harnessing Change Report.
Investing in Canada’s networks, acquiring new technologies and building advanced platforms is necessary for Rogers and our programming partners to remain competitive.
Pillar 3 – Canadian Independent Programmers
[Pam Dinsmore, Vice President, Regulatory – Cable, Rogers]
Our third pillar is to partner with Canadian independent programmers as we both transition to new digital business models. We know there are costs associated with this transition and that these programmers have concerns about the impact it will have on their linear revenue. This would be the case regardless of this merger.
Unfortunately, no programmer can afford to continue to rely solely on a legacy linear business model. As the Commission has recognized previously, everyone must adapt to the digital world by reaching consumers where they are watching programs.
We are committing to help independent programmers with their digital transition in three important ways:
First, we commit to distribute a minimum of 40 independent discretionary programming services on each of our BDUs for a three-year period. Separately, Rogers has reached agreements with a number of independent programmers to continue carriage of their services post-closing.
Second, we will provide product and development assistance that will enable independent programmers to offer their services on both linear and digital platforms. This includes helping them create new apps or other outlets so that they can offer their content on Rogers’ and on third-party digital platforms.
Third, we will help independent programmers with access to set-top box data in two ways.
First, as of April 1, 2022, we will provide set-top box reporting on request at no cost, on an annual basis, until the Numeris enhanced television audience measurement system is fully implemented.
Second, we will help independent programmers by providing set-top box data, free of charge, for use on the CYNCH platform. CYNCH is a self-serve ad-buying platform, that allows advertisers to plan and purchase their advertising campaigns online. Rogers is a current user of the CYNCH platform and is familiar with its many benefits and associated costs. Independent programmers who choose to participate in CYNCH will benefit from Rogers providing set-top box data free-of-charge as this data is required to build the audience segmentations used in booking advertising campaigns.
In making these commitments, we will provide independent programmers with a viable path to migrating their services to a digital future.
Pillar 4 – Investments in Canadian Programming
[Susan Wheeler – Vice-President, B2B Distribution and Regulatory, Rogers Sports and Media]
Our fourth pillar is to invest in Canadian programming. There are four aspects:
1. First, we will implement the tangible benefits package that we submitted as part of our application. It is dedicated to supporting film festivals in prairie provinces and B.C., many of which are devoted to films created or produced by individuals who have historically been underrepresented in the television and film industries.
2. Second, we will maintain our support for the creation of children’s programming by continuing to fund the Shaw Rocket Fund. This will allow both the Shaw Rocket Fund and the Rogers Documentary and Cable Network Funds to achieve their mandates. We believe our proposal to combine the contributions we make and split the money evenly between the two sets of funds is the best way to ensure each remains accessible to a diversity of content producers in the children’s, drama and documentary genres.
3. Third, this transaction represents a transformational opportunity for CityNews to grow its audience in Western markets where it is not as popular as other local news outlets. We will do this by increasing investment in our Vancouver, Edmonton, Calgary and Winnipeg newsrooms.
[Julie Henson – General Manager, Rogers tv]
4. Enfin, nous continuerons d’investir dans la programmation communautaire afin de refléter les peuples autochtones et les autres communautés sous-desservies à travers le pays.
Nous intègrerons les chaînes de Shaw Spotlight à l’approche hors pair du service tv Rogers et sa programmation locale pertinente, tout en tirant parti des liens profonds et authentiques que Shaw a établis avec ses communautés au fil de dizaines d’années de service.
De concert avec les communautés autochtones du Canada, nous cernerons et éliminerons les obstacles à l’accès et augmenterons les investissements dans le modèle de communication narrative autochtone que Shaw Spotlight a développé dans sa zone de couverture. Pour ce faire, nous créerons de nouveaux rôles consacrés au développement et au soutien d’une programmation dirigée par des Autochtones et axée sur la communauté. Ces ambassadeurs et ambassadrices de la communauté autochtone mobiliseront et habiliteront leurs créateurs et créatrices afin que leurs voix soient davantage entendues sur les chaînes et plateformes de Rogers et Shaw.
We have a short video that highlights our commitments to inclusive and community-based programming and to increased investments in local news.
[VIDEO #2 ON LOCAL AND COMMUNITY PROGRAMMING]
[Ted Woodhead, Rogers’ Senior Vice President, Regulatory]
In closing, we want to thank the Commission for giving us the opportunity to outline our vision for Canada’s digital future and the essential role that this transaction will play in making it possible.
This transaction puts in motion a business plan that will bring connectivity and dynamic innovation to a growing number of Canadians.
It will increase competition and choice in the West, including in communities that do not have any competitive alternatives today.
It will bridge the digital divide by enhancing and expanding our networks to areas that do not have broadband service.
It will present affordable options for lower-income and other marginalized Canadians in the West.
And it will provide a platform for Canadian consumers and businesses to participate in the digital future and offer new opportunities for Indigenous communities and creators to connect with each other and the world.
We will emerge from this transaction with an unwavering commitment to ensure that Canada can realize its full potential in a digital world.
For the Canadian broadcasting system, this transaction will provide a foundation for each element to succeed. The Commission’s objectives of increased choice, flexibility and diversity that underline the policies it adopted as part of the Let’s Talk TV proceeding can only be achieved if all stakeholders embrace consumer choice, innovation and investment.
Approving our application will serve the public interest and will, ultimately, help ensure that Canada’s broadcasting policy objectives will be achieved in a rapidly evolving environment.
By bringing our two companies together we will make more possible and provide a brighter future for Canadians and our country.
Thank you, Mr. Chair, Commissioners and staff. We look forward to answering your questions.
About Rogers Communications
Rogers is a proud Canadian company dedicated to making more possible for Canadians each and every day. Our founder, Ted Rogers, purchased his first radio station, CHFI, in 1960. We have grown to become a leading technology and media company that strives to provide the very best in wireless, residential, sports, and media to Canadians and Canadian businesses. Our shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). If you want to find out more about us, visit about.rogers.com.
About Shaw Communications Inc.
Shaw is a leading Canadian connectivity company. The Wireline division consists of Consumer and Business services. Consumer serves residential customers with broadband Internet, Shaw Go WiFi, video and digital phone. Business provides business customers with Internet, data, WiFi, digital phone, and video services. The Wireless division provides wireless voice and LTE data services.
Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX – SJR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca.
Media contact details
Chethan Lakshman, VP, External Affairs
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c7b2a57e-6b92-41b7-a365-0c9da04e7c91