Teksavvy, Quebecor caution MPs on consequences of proposed Rogers-Shaw deal

Rogers and Shaw have testified that the proposed merger will increase competition and advance 5G

TekSavvy, Vidéotron and its parent company Quebecor have warned MPs about the possible consequences of Rogers’ proposed acquisition of Shaw Communications.

The companies appeared in a virtual hearing in front of the Industry, Science and Technology Committee in Ottawa on March 31st alongside OpenMedia and the Public Interest Advocacy Centre.

TekSavvy’s vice-president of regulatory and carrier affairs, Andy Kaplan-Myrth, argued that the proposed merger would harm competition and consumers.

“It is clear that fewer viable competitors and further consolidation of market power will result in even worse outcomes for internet and mobile users in Canada,” Kaplan-Myrth stated.

He also outlined that federal regulators need to set strict conditions to ensure competitive markets and affordable prices. Kaplan-Myrth stated that the Competition Bureau needs to protect consumers from abuses of market power so that competitors aren’t squeezed out of the market.

Kaplan-Myrth also told the committee that in order to ensure competition within the market, the CRTC should implement the 2019 wholesale internet rates decision, enable consumer choice on fibre, and mandate wholesale on mobile with Mobile Virtual Network Operator (MVNO) rules.

Quebecor CEO Pierre Karl Péladeau stated that the elimination of a fourth wireless player in the market would have negative consequences for consumers. He argued that the government should work to ensure that a fourth player is able to exist within the Canadian wireless market.

“The disappearance of the fourth player in Alberta, Ontario and B.C. markets is not desirable so if this transaction happens, there should be firm conditions regarding what happens to the assets,” said Vidéotron CEO Jean-François Pruneau.

Further, Péladeau outlined that MVNOs won’t solve competition issues in the Canadian wireless market. He stated that the fourth carrier policy should not be abandoned, as a fourth player is important in maintaining competition within the industry.

He also stated that if Freedom Mobile was not part of the acquisition and was instead sold off to another player, the merger would be acceptable for consumers.

When asked by MPs whether Quebecor and Vidéotron would be interested in acquiring Freedom Mobile, Péladeau stated that the company was interested in the prospect in the past and hinted that it would be again.

Advocacy groups testify merger will lead to price increases

OpenMedia executive director Laura Tribe argued that the committee must oppose the deal if they believe in bringing adequate connectivity to rural and Indigenous communities. She stated that the merger would be a step backwards and that Canadians will suffer if the acquisition is approved.

Public Interest Advocacy Centre executive director John Lawford told the committee the decision regarding this merger should be held until the CRTC makes its decision on MVNOs and wholesale internet rates since these two key rulings will play a factor in possibly minimizing the anti-competitive effect of this deal.

Today’s hearing follows testimonies from Rogers and Shaw on March 29th, during which the companies argued that the deal would increase competition and advance 5G.

The proposed deal requires approval from the CRTC, the Competition Bureau and the department of Innovation, Science and Economic Development.