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Telus and BCE Inc., which owns Bell Canada, have both asked the CRTC to deny Rogers’s application.Fred Lum/the Globe and Mail

Rogers Communications Inc.’s $26-billion takeover of Shaw Communications Inc. would “greatly reduce” competition and choice for consumers of broadcasting services, rival Telus Corp. told Canada’s telecom and broadcast regulator on Tuesday.

Rogers and Shaw executives told a Canadian Radio-television and Telecommunications Commission panel on Monday that greater scale will allow them to compete against global streaming giants such as Netflix, Amazon Prime and Disney+, which pose a threat the Canadian broadcasting system.

However, Telus executives told the five-commissioner panel that greater scale would allow Rogers to buy exclusive access to foreign content and would turn the merged company into a gatekeeper for Canadian programming services, which would then come to depend on the telecom and media giant for their survival.

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“This merger will greatly reduce competition and consumer choice, and it will impoverish the diversity of voices in the broadcasting system,” Stephen Schmidt, vice-president of telecom policy and chief regulatory legal counsel at Telus, said on the second of five days of hearings in Gatineau. “Rogers will be able to use content exclusivity to force consumers to subscribe to their service.”

The hearing comes after weeks of boardroom and family drama that engulfed Rogers and resulted in the departure of five of the company’s independent directors and its chief executive, Joe Natale. Mr. Natale was replaced by the company’s former chief financial officer, Tony Staffieri, last week.

Telus and BCE Inc., which owns Bell Canada, have both asked the CRTC to deny Rogers’s application. Rogers has argued that its rivals are merely attempting to avoid competing with a stronger broadcasting distributor. (Broadcasting distribution refers to the delivery of television channels through cable, satellite or internet protocol networks.)

The CRTC is reviewing only the transfer of Shaw’s broadcasting distribution business to Rogers, including a satellite TV service called Shaw Direct, and cable television services in British Columbia, Alberta, Saskatchewan and Manitoba.

The Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) are reviewing other aspects of the proposed takeover, including the wireless business. The takeover is expected to face intense scrutiny on the wireless front because it could eliminate Canada’s fourth-largest mobile carrier, Shaw-owned Freedom Mobile.

Zainul Mawji, Telus’s executive vice-president of home solutions, said her company’s ability to negotiate with foreign content providers has already been impacted by the proposed merger between Rogers and Shaw.

Telus was negotiating to have Disney+ integrated into its internet protocol television (IPTV) platform, called Optik TV, but Disney temporarily pulled back from those negotiations when the Rogers-Shaw takeover was announced and struck a deal with Rogers, Ms. Mawji said.

“It’s not even approved yet ... and their behavior changed overnight,” Ms. Mawji said.

Disney did come back to the table with Telus, but asked the Vancouver-based telecom for a “very, very significant guarantee of revenue,” Ms. Mawji said, adding that Telus doesn’t have “the subscriber base to do that.”

“They don’t want to incur the costs of coming onto our platform … and they don’t really need to have a second partner in the market if they have access to 80 per cent of English-speaking subscribers in Canada,” Ms. Mawji said.

Ted Woodhead, senior vice-president of regulatory affairs at Rogers, told the CRTC panel on Monday that the commission already has comprehensive rules in place that address concerns about the increased bargaining strength the combined company would have when negotiating for content.

However, Telus executives argued the rules are insufficient. “No safeguards will be able to effectively protect against the scale that Rogers will gain,” Mr. Schmidt said.

Rogers has made a number of promises in connection with the takeover, including an investment of $1-billion to connect rural and Indigenous communities in Western Canada to high-speed internet.

However, Mr. Schmidt argued that Rogers has not specified “where, when or how” it will build those networks. “The proposal is a mirage, and will be impossible to enforce,” he said.

Mr. Schmidt argued that the substantial amount of debt that Rogers will have to take on to finance the takeover will “inevitably” lead to job losses in Western Canada.

“The merger will also reduce the number of actors that control Canada’s essential broadband infrastructure, and concentrate an enormous amount of power into the hands of one of the wealthiest families in Canada,” he said.

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