Canadian News Jul 26, 2021 11:06 PM EST

Competition Bureau files notice on Shaw-Rogers merger, opponents advocate more telecommunications competition

Rogers last March 15 said it would buy Shaw subject to federal approval under the Competition Act and Telecommunications Act. Shaw dominates cable service in the four Western provinces.

Competition Bureau files notice on Shaw-Rogers merger, opponents advocate more telecommunications competition
Alex Anas Ahmed Calgary, AB
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The Competition Bureau filed Federal Court affidavits requesting confidential data from four telecom companies as part of its review of a $26 billion buyout of Alberta-based Shaw Communications by rival Rogers Communications.

"In the Bureau’s previous investigation of Bell’s 2016 proposed acquisition of Manitoba Telecom Services, the Bureau concluded where Bell, Telus and Rogers face competition from a strong regional competitor, prices are substantially lower," wrote Laura Sonley, a Bureau investigator.

The Bureau filed notice on four telecom firms: Telus Corporation, BCE Inc., Xplornet Communications Inc. and Quebecor Inc., operator of Fizz mobile service in Québec. Investigators asked that a federal judge compel the companies to submit records "about marketing strategies, competitive strengths and weaknesses, customers won and lost" and "pricing policies" against competitors, according to Blacklocks. "The Commissioner is investigating the likely substantial lessening or prevention of competition arising from the proposed transaction," said the affidavit.

Rogers last March 15 said it would buy Shaw subject to federal approval under the Competition Act and Telecommunications Act. Shaw dominates cable service in the four Western provinces. The buyout would leave two large competitors, Bell and Telus.

"Obviously a lot of Canadians are concerned," Liberal MP Ali Ehsassi, parliamentary secretary for industry, told telecom executives at a March 29 hearing of the Commons industry committee. "Would you agree with me that less competition should very much concern Canadians?"

"I think the most important factor around competition is having strong players that have the ability to invest in the future with new technologies and new ideas," replied Joe Natale, CEO of Rogers. Investigators also wrote that competition lowered prices.

"Your company is pretty profitable, correct?" asked MP Ehsassi. "I would agree that our company is very competitive," replied CEO Natale.

"But it is profitable?" asked MP Ehsassi. "It is profitable," replied Natale. Rogers last year reported a pre-tax net income of $2.2 billion. CEO Natale was paid $11.7 million in salary and benefits.

Conservative MP Pierre Poilievre, who requested the committee hearings, earlier told reporters the "status quo is unacceptable" in telecom services. "We don’t have a free market in telecommunications," said Poilievre. "We have a protected, regulated oligarchy."

"Let’s be honest," he continues "This model has not particularly performed well. We have among the highest prices, and among the poorest coverage in the developed world."

Canadians paid an average of $2,123 a year for telecom services, by CRTC estimate, including $69 per month for internet, $49 a month for mobile services, $34 for telephone landlines and $25 for cable TV.

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