Here is Adam DeMelo's frank assessment of a telecom sale that, if it goes through, will inevitably affect residents of the Hamilton area.
“We're screwed,” said the 27-year-old millwright, who moved to Mount Hope with his girlfriend Erin Gardiner in August.Adam DeMelo (left) and his girlfriend Erin Gardiner worry that their Internet rates will go up if the planned sale of Mountain Cablevision Ltd. from Shaw to Rogers is allowed to go through. (Supplied)
He's responding to the news that Rogers Communications Inc. is buying Mountain Cablevision Ltd., which provides TV, phone and Internet services to thousands of Hamiltonians, from Shaw Communications Inc. as part of a $700-million deal.
A longtime Mountain Cablevision subscriber, DeMelo's strong opinion on the matter stems from horror stories he's heard from friends and family who've had services, particularly cell phone plans, with Rogers.
His biggest worry, though, is how the changeover might hit his pocketbook. He, like other Shaw customers, could see a change in how much they're charged if the deal gets regulatory approval.
DeMelo and Gardiner's monthly bill for cable, Internet and home phone services comes in at about $150 before taxes.
He's concluded the total will jump when Rogers takes over, particularly, because the company, he said, charges a higher rate for the type of Internet services to which the couple already subscribes.
DeMelo said he currently pays Shaw around $55 per month for his web connection, which affords him a top download speed of 20 megabits per second and 200 gigabytes of transfers per month.
'I don't think customers are going to be poorly served by this deal.'—Marvin Ryder, business professor, McMaster University
Rogers most comparable Internet package boasts a much higher download rate — 45 megabits per second — but has a lower usage cap, 150 gigabytes per month. It comes at a cost of about $71 per month. The charge for going over the download limit is $1.25 per gigabyte.
“If you don't have the data room, who cares about the speeds," DeMelo said.
But Marvin Ryder, an instructor with McMaster University's DeGroote School of Business, said the future for telecom users in Hamilton isn't necessarily so bleak.
“I don't think customers are going to be poorly served by this deal,” he told CBC Hamilton.
“The problem is these companies don't just offer one package. Rather, there is a suite of products and they don't match one-to-one.
"People do have to make some choices. You'll obviously have to take out a program guide."
He said he doesn't expect users to be hit with more than “three or four dollars" a month in additional fees for comparable services when package deals are taken into account.
Rogers, Ryder added, may offer special offers to Hamilton users when it enters the market, adding that local competitors could try to snap up old Shaw customers by coming out with new promotions.
However, he said Rogers is unlikely to grandfather in old rates users paid to Shaw, at least not after current contracts have expired.
Rogers spokesperson Patricia Trott said she couldn't comment with any specificity on how Shaw users in Hamilton would be affected by the purchase.
“At this point, all I can say is that customers will continue to experience the same great service they have now.”
The acquisition — which would also see Rogers snap up some of Shaw's unused network spectrum — could represent the second time in four years that Mountain Cablevision has changed hands.
Outbidding Rogers, Shaw paid around $300 million in 2009 for the then-locally owned property.
“Every change is upsetting and this is the third owner in four years,” Ryder said.
“But I predict we're entering a period of relative stability."