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Blocking of Rogers-Shaw Merger Supported by Consumer Groups, Critics and More

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After the Competition Bureau on Monday officially petitioned the Competition Tribunal to prevent the Rogers-Shaw merger, consumer advocacy groups, members of political opposition parties, and industry experts have all propped up in support of the move — reports the National Post.

“For consumers, it’s a strong message that their affordability concerns do matter right now,” said John Lawford, executive director of the Public Interest Advocacy Centre. “I suspect… the government is falling off its chair in surprise, as am I,” he said of the Competition Bureau’s decision.

Consumer advocacy group OpenMedia, which has stood against the Rogers-Shaw deal ever since it was announced last year, lauded the Bureau for putting its foot down and urged the Liberal government to follow suit and “kill a deal that is good for no one but the Rogers family and Shaw family.”

The Competition Bureau last week notified Rogers Communications Inc. and Shaw Communications Inc. of its plans to block  their proposed $26 billion CAD merger, and is also seeking an injunction from the Competition Tribunal “in an effort to protect Canadians from higher prices, poorer service quality and fewer choices, particularly in wireless services.”

“Removing Shaw as a competitor threatens to undo the significant progress it has made introducing more competition into an already concentrated wireless services market,” the Bureau said on Monday.

The Rogers-Shaw deal was greenlit by the Canadian Radio-television and Telecommunications Commission (CRTC) in March, but still requires approval from the Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) Canada.

The Competition Bureau and ISED Canada both take issue with Freedom Mobile being absorbed by Rogers, holding up approval from each of them.

Innovation, Science, and Industry Minister François-Philippe Champagne said in March that Ottawa would not allow the “wholesale transfer” of Shaw’s wireless licences to Rogers, as doing so would reduce the number of wireless players in Alberta, B.C., and Ontario, where Shaw’s Freedom Mobile has about two million customers, from four to three and likely lead to higher phone bills.

Rogers has since entered talks with potential buyers for Freedom Mobile, including rural internet service provider Xplornet Communications Inc. and the Aquilini family, which owns the NHL’s Vancouver Canucks, but none of the options have satisfied the Bureau or ISED Canada as of yet. The two telcos even turned to Québecor Media Inc. for a potential deal last week.

NDP finance critic Daniel Blaikie said his party has been always been opposed to the merger. “We’re glad to see the Competition Bureau taking this seriously…this is something that ought not to be going ahead,” adding the Liberal government should follow the Bureau’s lead and oppose the merger.

Conservative innovation critic Gérard Deltell said Conservatives “appreciate the decision by the Competition Bureau to challenge the Rogers-Shaw merger on the grounds that it would result in less competition, fewer choices, and higher prices for Canadians.”

Alex Wellstead, director of communications for Innovation Minister Champagne said in an emailed statement that the ministry will continue its review process, noting that the Competition Bureau is an “independent law enforcement agency.”

Telecom researcher Ben Klass said the Competition Bureau’s move to prevent the merger “definitely wasn’t expected.” Klass said that in his view, “the right thing to do is to block the merger outright.” He added that “none of the obvious suitors really present a strong case to fill that role of a fourth carrier in Ontario, B.C., and Alberta on a sustainable basis.”

The deck is stacked against Rogers-Shaw at the moment, but the pair doesn’t plan on going down without a fight. As we reported on Monday, Rogers and Shaw have vowed to contest the Bureau’s decision as they scramble to find an acceptable buyer for Freedom and compel approval for their merger.

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