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On Monday in Gatineau, across the river from Parliament Hill, scions of two cable fortunes tried to make the case for why their companies need to merge their television, internet and mobile phone businesses.

Toronto-based Rogers announced its $26-billion bid to buy Calgary-based Shaw in March. Both companies started in cable TV. In the 1990s, founders Ted Rogers and JR Shaw did a deal to split the country in two, Shaw in the West, Rogers in the East. Both companies expanded into regional internet, and Rogers built a national mobile phone business, a move Shaw made much later.

The Canadian Radio-television and Telecommunications Commission is holding hearings on the merger this week. To begin, Edward Rogers (freshly emerged from an internecine family drama for control of the company) and Brad Shaw invoked their fathers’ years of work. And they insisted that current business realities – the rise of Netflix, the emergence of 5G wireless – mean the two companies have to become one.

The CRTC is one of three federal entities that will assess the case for the deal. The only one to hold public hearings, the CRTC has a narrow focus – looking at whether Rogers can buy Shaw’s TV business.

The deal, if completed as proposed, would substantially alter the competitive field of Canada’s broadcast-telecom business. Rogers and Shaw have a case when it comes to cable. They haven’t really competed against each other for TV customers in a long time, and it’s true many Canadians have been unplugging their cable service in favour of Netflix and other streaming services.

Rogers has 2.6 million TV customers. Shaw has two million. Bell has 2.7 million and Telus 1.2 million. The combined Rogers-Shaw would vault to No. 1, but the competitive dynamic for TV customers wouldn’t be all that much changed – although there is a question for the CRTC about whether Rogers-Shaw would have too much sway over content.

The biggest issue in the merger is the mobile phone business. It is a principal focus of the two other major reviews: the Competition Bureau is one; Ottawa’s Ministry of Innovation the other. The latter will weigh the transfer of spectrum licences from Shaw to Rogers. Such acreage, the airwaves over which wireless services are transmitted, is the currency of the mobile phone realm.

Canadians have forever, and rightly, complained about expensive mobile phone bills. Their ire burst to the fore in 2019, when it became a federal election issue and the CRTC suggested “further action is required” to foster better competition and prices.

There has been a dramatic change in policy since then. The federal government shifted focus from prices to the building of networks – expansion of internet service in rural Canada and 5G wireless. The CRTC, meanwhile, backed down. Its decision this year about wireless networks was favourable to the large incumbents.

At the same time – the following is not a typo – wireless prices have fallen. According to Ottawa’s tally, the cost of a modest six-gigabyte plan is down 25 per cent to $45 a month in Ontario, British Columbia and Alberta from early 2020. Beefy 20 GB plans are going for $80 a month. In this year of inflation, Statistics Canada reports that consumer prices for cellular services fell 11.4 per cent in October, compared with a year ago.

The reason is competition. Rogers, Bell and Telus all have more than 11 million wireless customers. Shaw, with its discount Freedom Mobile brand, is a distant fourth at 2.1 million, but Competition Bureau research has shown that a fourth competitor needs only a foothold to make a big difference in lower prices.

Canada has been starved for more wireless competition. Ottawa and the CRTC have for years tried to foster a strong No. 4. Various upstarts failed. To see Rogers, the market No. 1, try to gobble up the No. 4 plainly does not make sense. Some analysts suggest Rogers will likely have to sell Shaw’s Freedom Mobile for the takeover to be approved.

Canadians still pay high mobile phone prices, even though they have come down. Maintaining a solid fourth competitor in Canada’s wireless industry has been an elusive public policy goal. That will not be decided this week at the CRTC – but it’s what is most at stake in the proposed Rogers-Shaw deal.

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