House of Commons Committee to Launch Second Public Hearing into Rogers-Shaw Deal

The House of Commons’ industry and technology committee will organize a second public hearing into Rogers’ proposed $26 billion takeover of Shaw Communications before the end of this month — reports The Globe and Mail.

Sources told the publication that the committee wants to take another look at the takeover, with a particular focus on how the two telecom giants selected Quebecor’s Vidéotron to sell Shaw-owned Freedom Mobile off to out of several potential suitors.

Globalive, one of the companies that wanted to acquire Freedom, last year criticized the sale process as a “non-competitive sham.”

This same committee, made up of Liberal, Conservative, New Democratic, and Bloc Québécois MPs, tabled a report recommending against the Rogers-Shaw deal back in March 2022. While the industry committee’s recommendations are non-binding, they can influence the decision of Industry, Science and Technology Minister François-Philippe Champagne.

Minister Champagne now alone stands between the Rogers-Shaw union after the Competition Tribunal last month dismissed the Competition Bureau’s application to block it over concerns of higher prices and lower competition.

The Bureau has appealed the ruling and will face off against Rogers-Shaw once again in the Federal Court of Appeal on January 24. Last week, the regulator added two new claims of legal error against the federal Tribunal to its appeal.

Canada’s competition watchdog said in written arguments for its appeal that Tribunal’s ruling sets a precedent that lowers the incentive for settling contested mergers before they go to court.

“Parties to a merger will be incentivized to put forward tactical mergers as nothing more than trial balloons, knowing that they can modify the proposed merger after the jurisdiction of the Tribunal has been invoked,” the Bureau wrote.

If the Bureau loses its appeal, though, Rogers and Shaw will only require Minister Champagne to approve the related sale of Freedom Mobile to Vidéotron to close their deal. The minister has said he will render a separate decision on the merger once “there is clarity on the ongoing legal process.”

However, he has previously all but affirmed his approval of the Freedom-Vidéotron deal, provided Quebecor agrees to certain conditions, including holding on to the spectrum for at least 10 years and ensuring that its wireless prices in Ontario, British Columbia, and Alberta are comparable to Quebec.

The House industry and technology committee will reportedly call witnesses from Rogers and Shaw, along with Minister Champagne and Competition Commissioner Matthew Boswell.

In addition, a Vidéotron spokesperson told The Globe and Mail that Quebecor President and CEO Pierre Karl Péladeau will appear before the committee on January 25 to discuss Vidéotron’s plans to compete as Canada’s fourth national wireless carrier.

Globalive and Distributel, an internet service provider that was also part of the Freedom bidding race, might be called as witnesses in the hearing, some of the sources said. What’s more, one of the sources noted that Globalive has been working behind the scenes to make this second House inquiry into the Rogers-Shaw merger happen.

“We look forward to sharing our perspective toward ensuring the minister has all of the information as he makes this critical decision for Canadians,” said Simon Lockie, chief legal officer at Globalive, in a statement.

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