Rogers Outage Questions Fair Game at Shaw Merger Trial, Says Competition Tribunal

The federal Competition Tribunal has decided to allow questions regarding the July 8 nationwide Rogers network outage at the upcoming hearing for the telecom giant’s proposed $26 billion acquisition of Shaw Communications — reports CBC.

On Friday, the Tribunal heard submissions from Rogers and Commissioner of Competition Matthew Boswell on the matter. The Tribunal consequently ruled that “questions related to network outages are relevant pursuant to the pleadings in this proceeding.”

Boswell in May petitioned the federal Competition Tribunal to block the deal over concerns that the Rogers-Shaw union would increase prices and decrease consumer choice. The two sides were unable to settle matters outside of court and are now headed toward a trial before Canada’s merger court.

July’s service outage is unlikely to have a bearing on a final decision regarding the merger, but experts believe it could be used to build a position against Rogers.

“It might be relevant to the regulators. I don’t think it’s going to be relevant overall,” said Patrick Horan, a portfolio manager at Agilith Capital.

The Rogers network failure last month left much of Canada without phone and internet service. It even impacted emergency services, government agencies, and banking networks like Interac.

In the wake of the outage, Rogers has promised a $10 billion investment in its network over the next three years to reinforce its infrastructure against mass disruptions. The company will also pay $150 million in outage-related refunds to customers.

Rogers last week responded to a second round of questions from the Canadian Radio-television and Telecommunications Commission (CRTC) about the July incident, but the bulk of its answers were redacted.

The telecom operator on Friday shared a commercial detailing how it is “committed to Canadians” and plans to greatly improve network reliability.

However, Rogers internet went down for many customers in Ontario and Quebec just a couple of days later on Monday morning.

According to a separate court document filed earlier this month and made public on Monday, the Competition Tribunal believes Rogers and Shaw’s proposed sale of the latter’s wireless business, Freedom Mobile, to Quebecor is not an “effective remedy” as it “fails to eliminate the substantial lessening and prevention of competition” it would cause.