TekSavvy Says Industry Minister ‘Must Block’ Rogers-Shaw Merger

TekSavvy today said that Industry, Science and Technology Minister François-Philippe Champagne “must block” Rogers’ proposed $26 billion takeover of Shaw Communications.

The independent internet service provider (ISP) especially took issue with Rogers offering “special” wholesale rates to Vidéotron for access to its networks — rates not offered to anyone else. This revelation came from Rogers and Shaw at a recent Competition Tribunal hearing.

TekSavvy and other smaller ISPs, meanwhile, have to pay larger telcos higher wholesale rates, set by the Canadian Radio-television and Telecommunications Commission (CRTC), to lease bandwidth on their networks.

“After successfully lobbying the Minister to impose ruinous regulated rates on smaller competitors, these massive companies now want to carve up the market and fix rates among themselves,” said Peter Nowak, Vice President of Insight & Engagement at TekSavvy.

“Minister Champagne must block this anticompetitive deal – or they will soon squeeze out remaining ISPs and hike consumer prices even higher.”

TekSavvy has previously said that federal approval for the Rogers-Shaw merger must be contingent on first implementing the CRTC’s 2019 decision to lower wholesale internet rates, which the regulator later reversed following objections from national telcos.

According to TekSavvy, rising wholesale rates have led to at least three major independent ISPs — Ebox, Distributel, and V-Media — leaving the market and being bought out by incumbents Vidéotron and Bell, worsening the competitive landscape.

The Rogers-Shaw merger cleared its latest hurdle on December 29 when the federal Tribunal dismissed the Competition Bureau’s application to block it over concerns it would raise prices and reduce competition.

Since then, the Bureau has appealed the ruling. The competition watchdog is set to meet Rogers and Shaw before the Federal Court of Appeal on January 24. Last week, the Bureau modified its appeal to add two new claims of legal error against the Tribunal.

If the Bureau loses its appeal, though, Rogers and Shaw will only need Industry Minister Champagne to approve the sale of Shaw-owned Freedom Mobile to Quebecor’s Vidéotron for them to proceed with their marriage.

Following the Tribunal’s ruling, Minister Champagne reiterated his objective of “promoting competition” and said that he will render a separate decision on the deal once “there is clarity on the ongoing legal process.”

However, he has previously said he would approve the transfer of Freedom’s wireless licences to Vidéotron 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.