Competition Bureau wants full block of Rogers-Shaw deal

The Competition Bureau says it will only accept a full block of RCI-BT’s acquisition of Shaw Communications Inc. by Rogers Communications Inc. SJR-BT, despite a federal judge suggesting that The watchdog and telecommunications find common ground before the start of a November 7 appeal hearing.

In a hotly contested virtual hearing on Tuesday, Competition Bureau lawyer Derek Leschinsky said anything less than a full merger block “would not eliminate the substantial prevention and diminution of the competition arising from this transaction,” saying the deal would have far-reaching consequences. adverse effects for customers and the economy as a whole.

The Competition Bureau and the telecommunications companies will face off in the Competition Tribunal, headed by Chief Justice Paul Crampton of the Federal Court, in the appeal hearing.

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Accusations of stubbornness came from both sides at the case management conference, which was attended by nearly 300 lawyers and members of the public. He revealed the deep differences that remain between the telecom giants and the Competition Bureau over the deal and the exact issues the two sides will discuss in court.

The Competition Bureau has hinted that it intends to pursue the case based on the initial agreement reached in March 2021 between Rogers and Shaw only, and that a more recent proposal to divest from Freedom Mobile should not be considered as it was not part of its May 9 request.

Meanwhile, Rogers and Shaw argue that their proposed sale of Freedom to Quebecor QBR-BT should be considered part of the process. Kent Thomson, a lawyer representing Shaw, said the Competition Bureau is considering an application for a deal that no longer exists.

Chief Justice Crampton sided with the telecommunications companies and recommended that Competition Bureau lawyers focus their case on the deal that is now on the table.

Hearings are scheduled for four weeks, with a possible fifth week extension. Chief Justice Crampton sent a letter to all parties on Monday evening encouraging them to find a solution to “streamline” the process.

Thomson called the Competition Bureau “out of touch” for continuing to reject Shaw’s impending divestiture of Freedom Mobile, Canada’s fourth-largest wireless carrier, to Videotron, owned by Quebecor Inc.

“There is no world in which Rogers will acquire Freedom Mobile,” Mr. Thomson said. “Freedom will be gone, in the hands of an independent company called Videotron, before Rogers acquired a single share of Shaw.”

“What you are witnessing is a remarkably stubborn refusal by the commissioner to acknowledge reality,” he added.

Mr. Leschinsky said the Competition Bureau believes that Freedom Mobile’s separation from Shaw’s cable network will lead to a weakening of the competitor, as Videotron will have to rely on its competitor, Rogers, for access to the underwired wireline infrastructure. necessary to provide cellular service.

“Competitive effects will persist at Videotron to the extent that it is deprived of the wired interconnection that is taken by Rogers in this transaction,” said Mr. Leschinsky. “This is a prejudice that requires examining the entire transaction.

“The wireless company is not an independent entity. It is a dependent entity,” Mr. Leschinsky said.

Rogers and Shaw declined The Globe’s request for comment.

In a statement, the Competition Bureau said that “the commissioner’s view that Freedom’s divestiture to Videotron is insufficient as a remedy for Rogers’ acquisition of Shaw is well known.”

Shaw’s stock price jumped 5% on Tuesday as the hearing unfolded, closing at $35.65 on the Toronto Stock Exchange. Shares of Shaw continue to trade well below Roger’s $40.50 per share bid, reflecting investor concerns that the government will block the takeover.