Tag: Competition Bureau

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Competition Tribunal decides Rogers-Shaw merger can move ahead

Canada’s Competition Tribunal cleared the way for the Rogers-Shaw merger to move ahead after dismissing the Competition Bureau’s application to block the proposed $26 billion acquisition.

The deal still requires approval from Innovation, Science and Economic Development Canada (ISED) and a spokesperson for Minister François-Philippe Champagne told The Globe and Mail that ISED was reviewing the tribunal’s decision and “will have more to say in due course.”

The Competition Tribunal released a summary of its decision on December 29th and plans to release a more detailed decision in the next two days. The summary notes that the tribunal found the merger would not result in materially higher prices.

Moreover, the decision said the sale of Shaw’s Freedom Mobile to Quebecor-owned Vidéotron — a key pillar of the deal — would likely not prevent or lessen competition substantially. Earlier this year, Quebecor agreed to buy Freedom for $2.85 billion.

The tribunal also dismissed concerns that Bell and Telus would not be able to compete with the combined Rogers and Shaw.

“I am very disappointed that the tribunal is dismissing our application to block the merger between Rogers and Shaw. We are carefully considering our next steps,” said Matthew Boswell, commissioner of the federal Competition Bureau, in a statement on the 29th. The Competition Bureau has 30 days to appeal the tribunal’s decision.

Additionally, The Globe and Mail reported that Rogers and Shaw agreed to extend the deadline of the proposed merger into 2023. The extension requires Rogers to pay its bondholders $250 million.

Source: The Globe and Mail, CBC News

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Here’s what’s next in the Rogers and Shaw saga

Rogers’ first round of approval for its $26 billion merger with Shaw received little pushback.

The Canadian Radio-television and Telecommunications Commission (CRTC) held a hearing to discuss the broadcast aspects of the merger in November 2021, providing its approval, with conditions, in March 2022.

The companies also need approval from Innovation and Science and Economic Development Canada (ISED) and the Competition Bureau. That hasn’t been as straightforward.

The Competition Bureau has been a strong voice of opposition, stating the merger will lead to higher wireless bills, among other issues, for Canadians. The sale of Shaw-owned Freedom Mobile to Québecor subsidiary Vidéotron for $2.85 billion did little to appease concerns.

Representatives from the bureau wrapped up a four-week tribunal hearing with lawyers from Rogers, Shaw, and Québecor earlier this month. The bureau argued the tribunal should block the deal in its entirety.

Chief Justice Crampton led a three-member panel that originally hoped to share a decision by Christmas. The tribunal will provide a 24-48 hour notice before issuing the decision.

Rogers and Shaw are on a tight deadline to close the deal by the end of the year. However, they have the option to extend it to January 31st. Anything past that date will see Rogers paying millions to bondholders.

But even if Crampton delivers a win for Rogers and Shaw, the companies will have weeks to get approval from ISED to make their deadline. Industry Minister Francois-Philippe Champagne laid out several conditions that Vidéotron would need to fulfill before its takeover of Freedom Mobile is approved. Québecor’s CEO, Pierre Karl Péladeau, quickly indicated the company would accept the conditions.

Vidéotron can only acquire Freedom if Rogers’ takeover of Shaw receives full approval. It’s unclear if Champagne’s conditions for Vidéotron indicate how he’ll rule on the more significant merger. But if they are, the merger can be expected to close sooner rather than later.

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Oral arguments from Rogers, Shaw and Vidéotron conclude tribunal hearing

Lawyers representing the Competition Bureau, Rogers, Shaw, and Vidéotron, made their final oral arguments on Rogers’ $26 billion takeover of Shaw this week.

Coming a week and a half after the parties concluded their respective evidentiary portions in the Competition Tribunal’s hearing, the merger’s faith is now in the hands of the tribunal’s three-member panel, led by Justice Paul Crampton.

The Competition Bureau wants the merger blocked, citing higher wireless bills and poorer service if the takeover is approved. Lawyers representing the bureau said Shaw’s divestiture of Freedom Mobile to Vidéotron wouldn’t create a strong fourth competitor, particularly in Western Canada. Freedom Mobile serves Ontario, Alberta, and B.C.

On Wednesday, John Rook, a legal representative for Vidéotron, said the company negotiated terms that will lead to Freedom Mobile succeeding under Vidéotron. He also revealed the company made two offers to acquire Freedom Mobile. The first was in April 2021, and the second was in April 2022. However, the final $2.85 billion price tag to purchase Freedom is lower than what Vidéotron originally offered, Rook said.

Kent Thomson, a lawyer for Shaw, argued the merger would create an aggressive competitor for Telus, Shaw’s main competitor in the west.

“If this transaction is allowed to proceed, Rogers will bring to bear its enormous experience, expertise, scale and resources to compete aggressively and successfully against Telus in the wireline industry throughout Western Canada,” Thomson said Wednesday.

Crampton previously stated he hopes the panel can come to a decision before Christmas. Rogers and Shaw are also hoping to close the deal before the year ends but have the option to extend their deadline to January 31st. The merger still needs approval from Industry Minister François-Philippe Champagne.

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Parties conclude evidentiary portion of Competition Tribunal’s Rogers-Shaw merger hearing

The Competition Tribunal is close to concluding its hearing into Rogers’ takeover of Shaw.

The evidence portion of the hearing, which took place over the last four weeks, concluded Thursday. It featured testimony from witnesses, including executives from Rogers, economists, and professors.

The first week was largely spent in camera, in private sessions away from the public view. The second week started with a push from Chief Justice Paul Crampton, who is overseeing the hearing as part of a three-member panel, to have more of the hearing available to the public.

That led to scores of documents once labelled confidential being publicly shared through cross-examinations. It revealed Telus’ plans to “kill, shape, and slow” the merger and Distributel’s attempts to buy Freedom Mobile.

However, the hearing didn’t stay in public for long. Several instances of confidential information in the last two weeks led to long periods in camera.

The Competition Bureau wants the tribunal to block the $26 billion merger, which would also see the divestiture of Freedom Mobile. Québecor subsidiary Vidéotron is buying the company for $2.85 billion.

The bureau’s lawyers have argued that separating Freedom from Shaw will create a weakened competitor. Rogers will still be attaining 450,000 Shaw Mobile customers.

Lawyers from Rogers, Shaw, and Québecor have argued that Freedom will be a strong fourth competitor under Vidéotron.

Parties will give oral arguments on December 13th and 14th. Crampton says he hopes to present a decision before Christmas.

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This week in Canadian telecom: Rogers-Shaw hearing [Nov. 5-11]

November 7th marked day one of the Competition Tribunal’s four (possibly five) week hearing into the Rogers-Shaw merger.

While dominating headlines, it wasn’t the only newsworthy story this week. As a recap, here’s almost everything that happened in Canada’s telecom sector.

Business

Starlink announced it would implement a data cap on residential plans. Customers will have 1TB of Priority Access during peak hours (7am to 11pm) per month. The company will move customers who go over to Basic Access, which offers slower speeds.

Telus is partnering with Énergir and Électrobac to provide Ukrainian refugees in Quebec with smartphones, wireless plans, and mental health consultations. The donation is valued at $218,000 and will support 300 families.

The first day of the hearing between Rogers, Shaw, and the Competition Bureau focused on the sale of Freedom Mobile. Lawyers from the bureau argued Freedom wouldn’t replace the competition Shaw brought. The opposing parties argued Freedom would work better under Vidéotron and serve as a more robust competitor than it was with Shaw.

Rogers also presented its third-quarter results for 2022. The company increased its revenue ($3.7 billion) and added thousands of new customers in the last quarter, despite its July outage that impacted wireless and wireline customers. Rogers paid $150 million in credits in response to the outage.

Government

Prime Minister Justin Trudeau added $475 billion to the Universal Broadband Fund (UBF). The fund pays for projects that expand high-speed internet access in rural communities across the country. The UBF has connected 900,000 homes so far, and the additional funds will help connect another 60,000.

The federal government and the Province of Alberta are working with Tsuut’ina Nation Telecommunications to connect 300 households in Tsuut’ina Nation with high-speed internet access. The two governments provided $2.6 million in funding.

Infrastructure

Rogers expanded 5G access to the Ontario communities of Maxville, Greenfield, Glen Robertson and Wendover. The expansion is in partnership with the Eastern Ontario Regional Network (EORN) and focuses on improving cellular access in rural eastern Ontario. Under the partnership, Rogers will build more than 300 new telecommunications towers and upgrade 300 existing towers by 2025.

Deals

Lucky Mobile is offering 10GB of bonus data on select plans. The bonus will apply for one year and is only available on new activations. More details are available here.

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Québecor’s CEO hopeful of hearing outcome with Competition Tribunal

Montreal, QC, Canada – September 4, 2021: Quebecor headquarters in Montreal, QC, Canada. Quebecor Inc. is a Canadian diversified media and telecommunications company.

Québecor’s CEO has full faith in the upcoming hearing between Rogers, Shaw, and the Competition Bureau.

“We believe that the upcoming Competition Tribunal hearing will demonstrate clearly that the acquisition of Freedom by Québecor will bring to the rest of Canada some healthy competition and lower prices that have been the norm in Quebec for many years,” Pierre Karl Péladeau said during a conference call discussing the company’s Q3 results. 

The hearing, set to begin next week, will examine the Competition Bureau’s application to block Rogers’ $26 billion takeover of Shaw. The bureau has argued the deal will reduce competition in Canada’s wireless sector, leading to higher bills, among other issues for Canadians.

Rogers and Shaw agreed to sell Freedom Mobile to Québecor subsidiary Vidéotron to appease worries. Freedom’s sale is contingent on the larger deal. However, the Competition Bureau says it will accept nothing other than a full blocking of the Rogers and Shaw merger. 

Approval from the Competition Bureau is just one avenue of approval the companies need for the Rogers-Shaw merger. Approval from the Canadian Radio-television and Telecommunications Commission (CRTC) came earlier this year. Conditional approval from Innovation Minister François–Philippe Champagne came last month when he laid out conditions for Vidéotron’s acquisition of Freedom Mobile.

The conditions include Vidéotron keeping the attained licenses for 10 years and offering wireless prices that are comparable to Quebec.

Assuming all approval is achieved, Péladeau signalled the company will be able to start operating quickly. “Despite the fact that the transaction is not approved, we have a pretty good idea about how the networks work [and] what kind of technology Shaw/Freedom is using. We obviously have a good relationship with wireless equipment suppliers.” 

The company further reported it increased its mobile customer by 2 percent and its internet customer by 3 percent in its third quarter.

Over half of its internet customers were VMedia customers that Québecor inherited after it acquired the company earlier this year. 

Image credit: Shutterstock

Source: Québecor

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Judge’s request to reach compromise on Rogers-Shaw deal prior to hearing disregarded

The hearing between Rogers-Shaw and the Competition Bureau over the former’s merger plans will start in a week, and attempts to streamline the process are failing.

Representatives from both sides have been going back and forth in front of Chief Justice Crampton. Crampton asked the two sides if they could reach a compromise. The most recent case management conference between the parties shows that it likely won’t be possible.

In a Tuesday meeting, the Competition Bureau said it wouldn’t accept anything less than entirely blocking the merger. Anything other than that “would not eliminate the substantial prevention and lessening of competition that arises from this transaction,” Derek Leschinsky, a lawyer for the Competition Bureau, said.

The bureau said the acquisition would lead to several problems for Canadians, including less competition in Canada’s wireless market. Rogers and Shaw said they would sell Freedom Mobile to Vidéotron to appease concerns. However, the move hasn’t won the favour of the bureau.

“There is no world in which Rogers will acquire Freedom Mobile,” Kent Thomson, a lawyer representing Shaw, said. “Freedom will be gone, in the hands of an independent company called Vidéotron, before Rogers acquires a single share of Shaw.”

The hearing begins on November 7th and will last four weeks, with a one-week extension if need be.

Via: The Globe and Mail 

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Mediation on Rogers-Shaw merger fail for a second time

A second attempt to negotiate the Rogers-Shaw merger with the Competition Bureau has failed.

“We are disappointed with this outcome and believe that litigation is both unnecessary and harmful to competition,” a joint statement from Rogers, Shaw, and Quebecor states.

The failed negotiations mean the companies are heading towards a hearing with the Competition Tribunal early next month.

“The Bureau’s unwillingness to meaningfully engage unduly delays lower wireless prices for Canadian consumers,” the statement says.

The Competition Bureau filed to block the merger in May, stating Rogers’ $26 billion takeover of Shaw would lead to higher costs for Canadians. In an attempt to address the concerns, the companies said they will sell Shaw’s wireless asset, Freedom Mobile, to Quebecor’s subsidiary Videotron. But the promised sale hasn’t led to resolutions.

Earlier this week, Innovation Minister François-Philippe Champagne, laid out two conditions for Videotron’s acquisition of Freedom: that Quebecor keep the acquired wireless licenses for 10 years and that wireless bills drop by 20 percent, keeping in line with lower phone bills seen in Quebec.

In their statement, Rogers, Shaw, and Quebecor reaffirm their commitment to both the Rogers-Shaw merger and the Freedom-Videotron deal.

“Once completed, our proposed series of transactions will positively transform the Canadian telecommunications industry in both the wireline and wireless segments,” the statement reads. “Together, these transactions will deliver world-leading, affordable telecommunications that Canadian consumers need and deserve for today and into the future.”

The hearing begins November 7th.

Source: Rogers

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Telecom news roundup [Sept 10-16]

Another Saturday, another weekly telecom roundup.

This week’s roundup focuses on Rogers’ merger with Shaw (the roundups would be incomplete without it), Bill C-11, and Apple’s new iPhone 14 series. Let’s get into it.

Business

Two months after Rogers’ nationwide service outage, Hamilton residents woke up to yet another service disruption. However, unlike the July outage, Rogers was quick to state a local fire impacted wireline services only, and service was back up in a couple of hours.

The trial between the Commissioner of Competition and Rogers and Shaw is roughly seven weeks away, and the parties appear to be having difficulty sharing information with one another. The Competition Commissioner and Rogers have filed separate motions with the Tribunal, arguing the other is withholding information it needs for trial.

The Commissioner of Competition replied to one of Rogers’ requests about statements on the sale of Freedom Mobile to Vidéotron. In his application, the Commissioner says Rogers’ request focuses on information that’s “out of context.”

Telus is proposing changes to home phone services for its Quebec customers as it migrates from copper facilities to fibre. The company filed two applications with the Canadian Radio-television and Telecommunications Commission (CRTC) detailing changes to its pay-per-use billing option for three-way calling and call return, and its call screening service.

Xplornet is a thing of the past. Well, at least the name is. The rural broadband provider has rebranded to Xplore. The company says the change represents its identity, vision and future.

Bell says it will merge two internet service providers (ISPs) it recently acquired. At BMO’s 23rd annual Media and Telecom conference earlier this week, Glen LeBlanc, Bell’s chief financial officer, shared Bell will consolidate Distributel with EBOX. Bell announced its plans to acquire Distributel earlier this month and has yet to receive regulatory approval.

More on Bell, the company’s subsidiary, Bell Technical Solution, was hacked by ransomware group Hive. The group shared the details on its leak blog earlier this week, stating it accessed the information on August 20th.

Government

The Senate Committee on Transport and Communications held several panels concerning Bill C-11 over the past week. Known as the Online Streaming Act, the bill faces ongoing concerns on how it will impact user-generated content. Canada’s Privacy Commissioner, Philippe Dufresne, says the bill should also consider user privacy.

Infrastructure

Bell continues expanding its fibre footprint under its capital expenditure acceleration program with an announcement benefiting Barrie residents. The telecom giant says it will expand access to 40,000 locations in the city.

Deals

Chatr Mobile is offering new customers 2GB of bonus data on select plans until September 19th. More details are available here.

Not much of a deal, but more of a reminder for Canadian Apple fans, the iPhone 14 SE series is now available in Canada. Read more about getting your hands on one of the new devices here.

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Competition Commissioner, Rogers separately demand answers to each other’s questions

The trial between the Competition Bureau and Rogers and Shaw is roughly two months away. However, both parties appear to be having difficulty gathering information to help their case and are appealing to the Competition Tribunal to intervene.

The Commissioner of Competition wants Rogers to answer questions it says were “improperly refused” during an examination of a company representative.

Dean Prevost, president of integration at Rogers, was answering questions on August 25th and 26th on behalf of Rogers. The Commissioner’s application states Rogers took some questions under advisement and refused others. On September 6th, Rogers delivered a document that provided reasoning for its actions to those questions.

The Commissioner will present the motion to the tribunal on September 13th, asking Rogers to provide answers to its 23 questions within a week of approval. The questions have been redacted from the document shared with the public.

The application states the questions “are not unreasonable, unnecessary, or unduly onerous, and the information and documents sought are not privileged.”

Motion for Shaw

The Commissioner will also file a similar motion for Shaw.

The Commissioner’s legal team examined Paul McAleese, Shaw’s president, on August 22nd and 23rd. Shaw provided a document on September 2nd, answering certain undertakings. The Commissioner’s motion states that parts of the document are illegible, and Shaw withheld the answer to one question.

The two questions the Commissioner has for Shaw relates to the company providing ‘legible’ copies of the company’s board of directors for the past three years and an analysis of synergies of the merger.

Questions from Rogers and Shaw

Rogers and Shaw filed a similar motion relating to the examination of Kristen McLean on August 24th and 25th, an analyst for the Competition Bureau.

Rogers says the Commissioner provided answers about undertakings and McLean’s refusal to answer specific questions on September 6th. However, the answers “were refused and/or have been deficiently answered,” Rogers says.

It’s not clear what those questions are as the application redacts identifying information.

However, the information available points to the questions likely related to the sale of Freedom and its impact on competition. The Commissioner has stated the deal of Freedom to Vidéotron won’t appease competition concerns.

“Respectfully, the Commissioner’s refusals do not serve this process or the tribunal,” Rogers states in its motion. Furthermore, it says the refusal to answer questions and produce certain documents is detrimental to their understanding and defence of the case.

“This is not an extravagant request or a fishing expedition. Its probative value cannot be disputed,” Rogers argues.

“Its contents are critical to a fair and just determination. Rogers, Shaw, and Vidéotron should not be forced to trial without it.”

The recent filing follows questions Rogers posed on September 6th regarding the most recent response on the sale of Freedom Mobile to Vidéotron.

Source: Competition Tribunal