Nathan Miller, an expert witness hired by the Competition Bureau in its trial against Rogers and Shaw over the pair’s proposed $26 billion merger, testified before the Competition Tribunal on Wednesday that the two telecom giants’ union would eliminate Canada’s fourth wireless competitor (via the Financial Post).
Miller is an economics professor at Georgetown University and an antitrust expert who has been called to consult on several high-profile mergers. During an hours-long cross-examination at Wednesday’s Tribunal hearing, Miller said his research into the economic impact of the Rogers-Shaw deal suggests it would remove Shaw as a strong fourth telecom competitor in Canada.
Maintaining four national carriers for strong competition has been a longstanding goal of the Canadian government. The Bureau is seeking a full block of Rogers’s proposed Shaw acquisition on the grounds that it will decrease competition and increase prices.
Crawford Smith, a lawyer for Rogers, challenged Miller’s research during his cross-examination of the expert. He questioned the methodology Miller used to measure market share and whether his report accounted for the divestiture of Shaw-owned Freedom Mobile.
Earlier this year, Rogers and Shaw agreed to sell Freedom to Quebecor’s Vidéotron as a potential remedy to antitrust concerns over their merger.
Miller argued that a Quebecor-owned Freedom won’t be as strong a competitor as Shaw. “When Shaw Mobile launched initiatives like ‘Big Gig’ plans, it impacted Rogers’s business,” the expert witness told the tribunal on Tuesday, adding that other operators introduced short-term price promotions following Shaw’s Big Gig offers for iPhones.
Rogers on Tuesday tried to make a case for the Freedom sale actually being good for wireless competition. The Bureau, however, has maintained its stance that Shaw’s support and Freedom’s symbiosis with its other services are key to the wireless unit’s ability to compete.
Competition Tribunal hearings into the Rogers-Shaw merger kicked off last week with the Competition Bureau reiterating that the proposed Freedom sale isn’t enough to win its approval. The trial is expected to last four weeks, with oral arguments scheduled for mid-December.
Rogers and Shaw hope to close their deal by the end of the year. They have extended their mutual merger deadline to December 31, 2022, with a possible further extension to January 31, 2023.
