TekSavvy Solutions Inc. called on the federal minister of industry, science and technology to block Rogers proposed $26 billion merger with Shaw by denying the transfer of Shaw’s wireless spectrum licences and Freedom Mobile business to Vidéotron.
TekSavvy Solutions Inc. officials have called on the federal minister of industry, science and technology to block Rogers proposed $26-billion merger with Shaw by denying the transfer of Shaw’s wireless spectrum licences and Freedom Mobile business to Vidéotron.
The proposed merger was cleared by the competition tribunal on Dec. 31, but the competition bureau has appealed the tribunal’s decision to the Federal Court of Appeal, to be heard Jan. 24, stated a media release Tuesday.
The proposed transaction remains subject to Minister François-Philippe Champagne’s final approval.
At the recent tribunal hearing, the companies revealed the transaction hinges on a side deal where Rogers will rent its broadband network to Vidéotron at special wholesale rates that aren’t available to independent service providers (ISPs), such as TekSavvy, which is based in Chatham.
“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,” TekSavvy spokesman Peter Nowak said in the release.
“Minister Champagne must block this anticompetitive deal — or they will soon squeeze out remaining ISPs and hike consumer prices even higher.”
The Canadian Radio-television and Telecommunications Commission (CRTC) sets wholesale rates paid by independent ISPs who lease access to the larger carrier networks. Those regulated rates indirectly determine what Canadian consumers pay for internet services.
When the competition bureau argued the CRTC’s rates are so high that Vidéotron cannot use them to compete, Rogers confirmed it will grant Vidéotron preferential rates that are below the regulated rates set by the CRTC.
The tribunal rejected the commissioner of competition’s attempt to block the deal, saying that Rogers’ plan to sell Shaw’s Freedom Mobile assets to Quebecor Inc. would ensure there would be four strong players in major markets.
“We remain committed to these pro-competitive transactions that will bring more choice, more affordability and more connectivity to Canadians,” Rogers and Shaw said in a joint statement last month.
“The tribunal’s decision was the right one, and the tribunal was clear in its summary that the transactions we have proposed are not likely to substantially lessen competition in Alberta and British Columbia. Instead, as the tribunal found, the transactions will likely result in an intensifying of competition.”
However, TekSavvy officials have said federal approval for the merger must be contingent upon first enacting the CRTC’s 2019 decision to lower its regulated rates. Company officials said the minister declined to implement the CRTC decision last May and instead “endorsed much higher regulated rates, as requested by Rogers and Bell.”
By September, three major independent ISPs — Ebox, Distributel, and V-Media — exited the market after being bought by their wholesale suppliers, Bell and Vidéotron.
“With competitors leaving the market, the federal government’s own data confirms that Canadian internet prices are skyrocketing during an unprecedented cost of living crisis,” TekSavvy added.
– With Postmedia files
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