Rogers and Shaw applications are pictured on a cellphone in Ottawa on Monday, May 9, 2022. Closing arguments are expected to continue before the Competition Tribunal today, as the organization weighs whether the $26-billion merger of Rogers Communications Inc. and Shaw Communications Inc. should be blocked. THE CANADIAN PRESS/Sean Kilpatrick
OTTAWA – The Competition Tribunal has committed to reaching a decision as soon as possible on Rogers Communications Inc.’s proposed takeover of Shaw Communications Inc., but did not set a specific date as the hearings wrapped Wednesday.
Chief Justice Paul Crampton said the tribunal is well aware of the commercial realities, which include Rogers facing bond payments and other potential complications to the deal if the decision is pushed into the new year.
“We’re going to bend over backwards to do what we can in recognition of those realities, but we’re going to take the amount of time that it takes to produce a solid, robust decision that is well grounded in the evidence,” said Crampton.
The tribunal members have mountains of testimony and evidence to sort through as the hearings, which began Nov. 7, wrapped with final arguments from the companies pushing for the deal heard Wednesday.
Rogers lawyer Jonathan Lisus framed the decision before the tribunal as a stark crossroads between a bright future of increased competition if the deal goes through and a dark setback if the tribunal sides with the Competition Bureau, which is pushing to fully block the deal.
“A new era of wireless and wireline competition can be introduced. Or, if the commissioner’s draconian remedy is granted, the industry and competition will regress, to the detriment of the public interest.”
Lawyers for Rogers, Shaw and Videotron spent the day trying to summarize flaws in the Competition Bureau’s case, framing key evidence put forth by the agency as being built on false assumptions and conclusions.
“It’s incumbent upon this tribunal to step back and do a reality check,” said Shaw lawyer Kent Thomson.
One of the key issues of focus Wednesday was whether Freedom Mobile, which Shaw has proposed selling to Quebecor Inc.’s Videotron division to satisfy competition concerns, will be able to adequately compete without the physical cable infrastructure that Shaw can currently use to bundle telecoms services.
Lawyers for the proponents minimized the importance as companies can lease space on others’ lines and use microwave towers as an alternative, while the Competition Bureau has maintained it is a key advantage that has made Shaw a serious competitor in Western Canada.
In the Competition Bureau’s final arguments Tuesday, it argued that the proposed sale of Freedom to Videotron would not do enough to offset competition concerns, and would make Videotron too dependent on Rogers.
The bureau has argued the $26-billion deal, signed in March 2021, would result in increased cellphone bills and poorer service.
Proponents have argued that Shaw was struggling with the twin demands of investing in its wireline and wireless businesses, and that by splitting them apart and selling divisions to Rogers and Videotron it would create even more competition.
“It is pro-competitive,” Lisus said Wednesday. “It reinvigorates wireline and wireless competition in the West and provides a generational opportunity for a fourth nationwide carrier.”
Whether that’s actually the case is now before the tribunal. Crampton said the end of the hearing, the culmination of many months of preparation and pre-hearing meetings, is welcome, but the end of the process is still not clear.
“We don’t yet know when the outcome of this is going to be known, simply because you’ve given us lots to think about, and given us a lot of documentation to to go over, and then discuss with each other.”
The deal also still requires an endorsement from Industry Minister Francois-Philippe Champagne.
To nab his support, Champagne has said Videotron would have to agree to keep Freedom’s wireless licences for at least 10 years and he would “expect to see” wireless prices in Ontario and Western Canada lowered by about 20 per cent, putting them in line with Videotron’s current Quebec offerings.
Quebecor has said it will accept the conditions.
This report by The Canadian Press was first published Dec. 14, 2022.
Companies in this story: (TSX:RCI.B, TSX:SJR.B)
