By Christopher Guly
OTTAWA – Rogers Communications’ proposed $26-billion purchase of Shaw Communications will reduce competition in Canada’s broadband and wireless sector at a time when the industry’s top players are enjoying record profits, and therefore needs to be opposed by the federal government, according to Windsor, Ontario Member of Parliament Brian Masse, the New Democrat critic for telecommunications.
“We need to have strong direction for the industry that buying each other out is not a solution for lowering prices, increasing access for Canadians and bringing greater accountability to consumers,” he told Cartt.ca in an interview.
The federal government should use the proceeds from the spectrum auction (the 3500 MHz band is scheduled for June 15) to “lower prices and connect Canadians with terms, conditions and regulations, which include price-capping on certain products to ensure they’re affordable for all Canadians,” said Masse, who also noted in a release the last spectrum auction in 2019 raised over $3 billion for federal coffers, which would go a long way to providing universal broadband across Canada.
“If we’re committed to competition in this country, you just can’t just take out one of the top providers of competition and expect somehow it’s magically going to happen with less people,” he said.
It’s worth noting Rogers has promised a $1 billion fund to deliver broadband to rural and indigenous communities in the west, and to freeze Freedom Mobile pricing for three years if the deal goes through.
On March 15, when the Rogers-Shaw deal was announced, federal Innovation, Science and Industry minister Francois Champagne said in a statement on Twitter that “greater affordability, competition and innovation in the Canadian telecommunications sector are as important to us as a government as they are to Canadians concerned about their cellphone bills.”
“These goals,” he said, would be “front and centre in analyzing the implications of today’s news.”
Champagne’s department of Innovation, Science and Economic Development, along with the Competition Bureau of Canada and the CRTC will review the transaction, which is scheduled to close some time in the first half of next year.
The day after Champagne’s statement, Pierre Poilievre, the Official Opposition Conservative shadow minister for jobs and industry, said in a statement “the Rogers-Shaw deal would have been massively important before Covid as it would create a $50-billion company with $20 billion-a-year in revenue, 33,000 workers and almost 13 million wireless subscribers. But it will be even more important now that Covid has shifted hundreds of thousands of jobs to work-from-home.”
“Conversely, fast, affordable wireless combined with remote work could revive struggling rural, remote and indigenous economies like we have not seen since the urbanization phenomenon began. For it to happen, we can no longer accept poor internet at high prices,” said Poilievre, who has called for hearings on the Rogers-Shaw deal before the House of Commons Standing Committee on Industry, Science and Technology, for which he serves as co-chair.
However, Masse, who is also a member of that committee, doesn’t believe such a parliamentary review would accomplish anything since the committee ultimately has no power to stop the takeover – which the government could, and should, he said.
“We’re rolling out tens of millions of dollars now for broadband-support projects for Canadians, and the industry hasn’t dropped the prices like they promised – so why would you reward somebody for that?”
In a release, Masse said the profit margins for Canada’s top three telecom companies (BCE, Rogers and Telus) have reached 46.2%, and that the country’s telcos “make more revenue per gigabyte of data than almost any other company in the world.” The release did not cite a source for that statement. The NDP itself put out its own statement accusing Canadian telecoms of “gouging” Canadians.
“I don’t know how you reconcile flowery words [from the federal government] versus what people face when they open their mail and get a bill that is one of the biggest things they have to deal with on a monthly basis,” said Masse, who said that during the pandemic, with its lockdowns and physical distancing, people need affordable online access more than ever before.
“Covid-19 has shown that this is an issue, not only just in terms of economic justice, but also of social justice.”
