Lawyers for Rogers and Shaw Communications called the Competition Bureau “stubborn and intransigent,” threatening to have the latter’s case against their merger thrown out of court during a case conference on Tuesday (via the Financial Post).
The two telecom giants are set to defend their proposed $26 billion union against the Competition Bureau at tribunal hearings starting Monday, November 14. Canada’s antitrust watchdog is seeking to have the merger blocked over grounds that it will lead to less competition and higher cellular prices.
The two sides have so far been unable to resolve their differences, despite two separate rounds of mediation. Their most recent dispute came after they were unable to agree on which version of the Rogers-Shaw merger agreement should be examined at trial.
Rogers and Shaw want an updated agreement that also stipulates the sale of Shaw-owned Freedom Mobile to Quebecor’s Vidéotron to be the subject of the trial. Meanwhile, the Bureau wants to litigate the original, pre-Freedom-divestiture proposal.
Jonathan Lisus and Kent Thomson, lawyers for Rogers and Shaw, respectively, accused the Competition Bureau of trying to prosecute a “conjured transaction.” They added that it is “crystal clear” — and also backed by three affidavits) — that Rogers-Shaw will sell Freedom Mobile to Vidéotron before their merger closes.
“There is uncontested evidence to demonstrate that the Commissioner’s entire theory of this case is removed from reality,” Thomson argued before the judge. He said he was considering asking to have the Bureau’s case dismissed on Monday.
However, Competition Bureau lawyer Derek Leschinsky insisted that the original proposal needs to be examined in order to truly determine whether Rogers’s acquisition of Shaw will reduce competition since the “competitive effects will linger in Videotron.”
The Bureau is of the view that Shaw’s wireline assets and the ability to bundle services are integral to Freedom’s ability to compete. Leschinsky said Rogers and Shaw have known the bureau’s position for months, and they have “stubbornly refused to acknowledge that (the) Commissioner has been consistent that getting rid of wireless alone isn’t enough.”
Federal court Chief Justice Paul Crampton, who oversaw Tuesday’s case conference, will also preside over the weeks-long tribunal hearing between Rogers-Shaw and the Bureau. Which version of the merger proposal goes to court is critical, since it could ultimately have a bearing on who wins.
Last week, Innovation, Science and Industry (ISED) Canada Minister François-Philippe Champagne re-affirmed his approval of the Rogers-Shaw deal, provided that Freedom Mobile is sold to Videotron, who holds onto Freedom’s wireless spectrum licences for at least 10 years and lowers wireless prices in Ontario, British Columbia, and Alberta to Quebec levels.
Want to see more of our stories on Google?
P.S. Want to keep this site truly independent? Support us by buying us a beer, treating us to a coffee, or shopping through Amazon here. Links in this post are affiliate links, so we earn a tiny commission at no charge to you. Thanks for supporting independent Canadian media!
The competition bureau is supposed to “fairly” look at this issue without bias, and I fail to see anything but a pre-determined agenda to put road blocks in place. If they truly want to stop it, a fair and unbiased decision would hold up better than a conjured up one.
It’s becoming clear that the Competition Bureau doesn’t have a valid reason for blocking the merger. They simply dislike Rogers. Now, I really hate defending Rogers (or any of the large carriers), but I have to agree with them, with Shaw, and with Quebecor here. With the sale of Freedom to Quebecor, there will still be a strong fourth wireless carrier, and the Rogers-Shaw merger is now basically for wireline only. So, western Canada has two major wireline carriers today (Shaw and Telus), and they’ll still have two major carriers after the merger (Rogers and Telus). And Shaw doesn’t offer wireline service in Rogers wireline territory, so there’s no concern there either. Thus, the Competition Bureau’s argument that the merger will stifle competition is no longer valid.
One of the claims for dominance is that Shaw/Rogers would control much of the Canadian cable TV climate, so that channels who cannot convince Rogers to carry them would be out of luck in all of the West as well. So the CRTC should allow there to be IP based cable tv services, such as Youtube TV or Sling TV in the US. With these services if the cable company is ripping you off, you can just get internet from them and get cable tv from one of the others. Bundling or the triple play may be what the companies want you to get, but if you offer alternatives, this would help actually.
Simping for both Doug Ford’s assault on teachers AND Shaw? You’re really brave
Didn’t Vidéotron buy like, VMedia? Which resells Rogers/Shaw internet and has IPTV.
So… while their margins will be slimmer, Videotron will still be able to sell the same exact bundles (same wireline though admittedly different TV service) that Freedom/Shaw sells now.
On another note, not that I think just because it took so long it should just proceed… how much better is the lame duck state of Shaw/Freedom right now than a freshly minted Videotron/Freedom national network (with actual 5G spectrum)?
If the deal will proceed, just push it through, if not… kill it forever, let Shaw get back to work. They were about to launch their 5G (fake 5G mind-you) network before this acquisition was announced.