Rogers wants more details on how Québecor-Freedom deal allegedly harms competition

Rogers Communications Inc. wants competition commissioner Matthew Boswell to explain exactly what "difficulties" Québecor Inc.’s Vidéotron will allegedly face with the purchase of Shaw Communications Inc.’s Freedom Mobile. Earlier this week the telecom giant filed a motion with the Competition Tribunal requesting that the commissioner answer that question along with the manner in which Vidéotron’s competitiveness will allegedly be reduced and what “other benefits” Shaw’s wireless business allegedly derives from its parent company’s wireline business. The demand for the extra particulars comes after the competition commissioner argued to the tribunal that the $2.85 billion Quebecor-Freedom deal, announced in June, would still harm competition in the wireless space. In a July submission to the tribunal, the bureau wrote that a simple divestiture of Shaw’s wireless would still harm competition “by severing from the divested business the wireline assets that the Shaw Mobile brand utilizes to provide bundles of wireline and wireless services to consumers in Alberta and British Columbia, and by weakening the competitiveness of the Freedom Mobile business and its ability to compete, innovate and grow.” “The commissioner’s assertion that Freedom’s ability to compete ‘vigorously’ is dependent on leveraging Shaw’s wireline assets is wrong,” Rogers wrote in an Aug. 19 response to the Competition Bureau’s submission to the tribunal. Rogers said the Freedom deal would ensure Québecor’s position as “an effective fourth wireless carrier” in Canada and ease the anti-competitive concerns, arguing Shaw provides no backhaul services to Freedom, where “the significant majority” of its wireless business is located, and that Shaw charges Freedom market rates for that access in western Canada. In a Sept. 2 reply the commissioner said that's not the case “given factors which include Rogers’ different market position and incentives from Shaw and the difficulties and reduced competitiveness which Vidéotron will face without wireline assets and other benefits derived by Shaw from its wireline business. These factors make it likely that there will be increased post-merger coordination and reduced competition in wireless services.” The commissioner did not expand on what those difficulties were in the submission. The commissioner also argued that Shaw would have been on a fast-growth trajectory in Ontario and western Canada were it not for the merger. “Shaw planned to make 5G investments, enter new markets and expand into wireless business services. Shaw has a proven track record of investing in and expanding its business and Shaw would have continued but for the proposed merger. Shaw assessed these projects and determined that they were profitable strategies. Shaw’s decisions to cease these investments and to compete less vigorously are due to the proposed transaction,” the commissioner wrote. The commissioner added that the CRTC’s mobile virtual network operator (MVNO) policy will “not cure the substantial lessening and prevention of competition” the Rogers-Shaw merger creates and that the removal of Shaw from the market will reduce the effectiveness of the CRTC policy. “Rogers does not deny that MVNO entry is not likely in a period or on a scale that would constrain the likely increase in market power attributable to the proposed transaction,” the commissioner wrote. “Rather, the CRTC’s MVNO Policy sought to protect and enhance the pre-merger competition brought about by regional carriers like Shaw who would have been the main beneficiary of the CRTC’s policy.”

Rogers wants more details on how Québecor-Freedom deal allegedly harms competition

Brief | September 9, 2022

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Rogers wants more details on how Québecor-Freedom deal allegedly harms competition

Brief | September 9, 2022

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