If the $26 billion Rogers-Shaw mega-merger wasn’t already bad enough for Canada, this week’s parliamentary hearings raised big red flags over how the deal has been enabled by the federal government.
Testifying before the House of Commons standing committee on Industry on Wednesday, the chief executives of Rogers, Shaw and Quebecor (parent of Videotron) displayed breezy confidence that the largest telecom merger – plus associated side deal with Videotron – in Canadian history will sail through.
That confidence is concerning since the deal still requires approval from Minister of Innovation, Science and Industry François-Philippe Champagne. But then, perhaps the CEOs know something the rest of us don’t.
Facing tough grilling by Liberal MP Nathaniel Erskine-Smith over why Rogers picked Videotron as the buyer of Freedom Mobile at price of $2.85 billion, despite a much higher $3.75 billion bid from Toronto-based Globalive, Rogers CEO Tony Staffieri pointed to criteria set by Minister Champagne:
Erskine-Smith: “You’re telling me it wasn’t your decision to pick Videotron, you would have picked Globalive, but the minister made you pick Videotron. That sounds like your answer. Is that your answer?”
Staffieri: “I’m walking you through the criteria that the minister laid out for us.”
Then, Quebecor CEO Pierre Karl Péladeau bragged about Videotron’s anti-competitive side deal with Rogers, which TekSavvy is challenging at the CRTC as illegal. Our filing shows how Videotron and Rogers are violating the Telecommunications Act with unlawful arrangements, which would allow the two cable giants to fix rates and kill off competition.
Under this illegal wholesale deal, Rogers will charge Videotron preferential rates to access its broadband networks – below the rates set by the CRTC and charged to independent ISPs, such as TekSavvy. This will allow Videotron to bundle services “on better terms than anyone else,” Péladeau told the committee.
The Quebecor CEO later dismissed the CRTC as irrelevant, telling a reporter after the hearing that the deal will close despite the regulatory challenge. Péladeau doesn’t get to make that decision – the Minister does. In an interview last night, Champagne made it clear he will not be a rubber stamp to meet their preferred closing date “As the regulator, I am not bound by any deadline,” he said.
How this merger came together and how it’s being pushed through, despite widespread opposition from the public, is suspect. The companies, government and some regulators are seemingly acting in unison to make it happen despite the fact that it will raise prices for millions of Canadians and result in, according to Industry committee vice-chair Rick Perkins, 4,000 to 5,000 job losses.
Its only benefit will be to enrich the billionaire family oligarchs who own Rogers, Shaw and Videotron. Put simply: everything about it stinks.
There is still a chance Minister Champagne rejects the merger or imposes strict conditions that would level the playing field and solve our CRTC challenge.
Failing that, he must at least follow Perkins’ call to keep his own promise not to approve the merger until there is legal clarity around it, which includes our challenge at the CRTC:
Based on today's testimony, it is also clear that the Minister should not act until the CRTC has ruled on the complaint before them regarding Rogers providing preferential treatment to Videotron— Ryan Williams (@Ryan_r_Williams) January 26, 2023
Photo from François-Phillipe Champagne's Twitter account.