Rogers and Shaw last week told the Canadian Radio-television and Telecommunications Commission (CRTC) in filings that the former’s network access deal with Quebecor’s Vidéotron is pro-competition and “will not result in any undue preference,” according to a report from The Globe and Mail.
This comes after independent internet service provider TekSavvy last month urged the CRTC to review the deal.
Shaw Communications-owned Freedom Mobile is set to be sold to Vidéotron, powering the latter’s national expansion ambitions in a side sale that’s part of the broader $26 billion Rogers-Shaw merger.
Vidéotron’s ability to effectively compete outside its home market of Quebec after acquiring Freedom hinges on wholesale access to Rogers’ network as the company builds out its own infrastructure. As such, Rogers has entered into several commercial agreements with Vidéotron that give Freedom’s buyer wholesale network access at rates lower than the tariff set by the CRTC.
It is these agreements that TekSavvy takes issue with. The terms of Rogers’ agreements with Vidéotron aren’t public, but the independent operator alleges that they involve rates not available to anyone else and not set through commercial negotiations, “but are instead an effort by Rogers to remove regulatory hurdles to its acquisition of another incumbent, Shaw.”
It is entirely legal for telcos to sell network access at lower than CRTC-regulated rates, but the Telecommunications Act prohibits operators from giving themselves or other companies an unreasonable advantage, known as an “undue preference.”
Rogers assured the CRTC late last week that its agreements with Vidéotron do not violate the Telecommunications Act and will help support competition.
Shaw, meanwhile, pointed out in its own filing that internet companies currently have dozens of “off-tariff” network access agreements that charge rates lower than those mandated by the CRTC.
While the CRTC has already greenlit the Rogers-Shaw deal, its review of the network-sharing agreements with Vidéotron is separate from its ruling on the broader merger. TekSavvy’s petition has garnered support from consumer advocacy groups and Freedom’s original founder, Globalive Capital, which said the agreements could impact its planned re-entry into the wireless market.
Rogers’ proposed takeover of Shaw now appears to be in its final stretch, after facing many regulatory hurdles and going on for so long that the lawyers involved are expected to pocket most of the more than $100 million in fees from it. Rogers and Shaw currently only require Industry, Science and Technology Minister François-Philippe Champagne to approve the transfer of Shaw’s wireless licences to Quebecor in order to proceed.
Minister Champagne, however, is facing pressure from his peers in Parliament to wait for the result of the CRTC’s review before making a decision. On Friday, he told the press that while he takes the CRTC’s role “very seriously,” his priority remains reducing cellphone bills.
“I listen to MPs, I listen to Canadians, but no one is going to get me off track of bringing prices down for Canadians,” Minister Champagne said.
Rogers, Shaw, and Quebecor hope to close both the merger and the Freedom-Vidéotron deal by March 31, 2023.
