Shaw Calls Competition Bureau ‘Stubborn’, as Rogers Merger Talks Get Heated

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.