Telus Corp. is asking the federal broadcast regulator to ensure that rival Shaw Communications doesn’t have an unfair competitive advantage with its acquisition of the former Canwest’s broadcasting assets.
That means clear rules set out by the CRTC so that Calgary-based Shaw doesn’t have exclusive access to Canwest content on any platform, said Michael Hennessy, senior vice-president of regulatory and government affairs at Telus (TSX:T).
“It’s what price you pay for the TV channels, it’s what price you pay for the individual programs that you can put on video-on-demand, access to content for the wireless platforms and for the Internet,” Hennessy said Monday in an interview.
“It’s ensuring there’s no exclusivity and that you have access to the content when it comes to the new media platforms as well,” he said.
Shaw will get 11 local Global TV stations across Canada and a group of specialty channels, including Showcase, MovieTime and HGTV in the $2-billion deal. It also gets the broadcast rights to a variety of Canadian TV shows, as well as valuable agreements with U.S. networks.
Vancouver-based Telus doesn’t want to be starved of content, including access to such specialty channels, as it competes against Shaw (TSX:SJR.B) for television and Internet customers in Western Canada. The two companies will also be rivals in the mobile phone business when Shaw launches its wireless network in late 2011.
“Telus submits that the CRTC must adopt, as conditions of approval of this transaction, safeguards to limit any abuse of market power and anti-competitive behaviour by Shaw and its affiliates,” Telus said in a brief submitted to the Canadian Radio-television and Telecommunications Commission.
Hennessy also questioned whether Shaw would try to do exclusive arrangements with Global TV for video-on-demand, online or wireless services.
“It’s a level of concentration that we’re now seeing in the country that’s really quite unprecedented,” he said.
Similar situations exist in the United States and the United Kingdom and regulators have been “struggling” to put safeguards in place, he noted.
Hennessy suggested commercial arbitration to settle such disputes.
“The CRTC has rules to say you can’t give yourself an undue preference. But if you have to argue every individual case before the CRTC, then delays always play to the vertically integrated player,” he said, referring to Shaw.
He used the example of negotiating rights to a hockey package, saying: “You want to make sure you’ve got access by the time the hockey season starts.”
Canwest filed for creditor protection last fall after buckling under billions of dollars in debt.
The company was forced to sell both its newspaper and TV assets in two separate transactions earlier this year.
Shares in Telus added 95 cents to $43.56, while Shaw’s stock gained seven cents to $21.41 Monday on the Toronto Stock Exchange.