Tribunal releases scheduling order putting hearing in November
COMMISSIONER OF COMPETITION Matthew Boswell is pushing back against claims Rogers Communications and Shaw Communications have made about the competitive impact of their proposed merger and the proposed divestiture of Freedom Mobile, arguing that selling Freedom is not enough to outweigh the negative effects he claims the deal will have on competition.
In replies to Rogers’ and Shaw’s responses to the commissioner’s application to the Competition Tribunal seeking to have the proposed merger blocked, which were made public by the tribunal today, the Commissioner of Competition reiterated that he does not believe the proposed divestiture of Freedom Mobile is an effective remedy.
In his response to Rogers’ submission, the Commissioner of Competition argued the divestiture of Freedom Mobile only, “will not replace the significant and growing competition Shaw Mobile was delivering and would continue to deliver in Alberta and British Columbia, and it would make Freedom Mobile a substantially weaker competitor than it would have been but for the Proposed Transaction.”
“Shaw Mobile gained a significant number of customers in a short period – much of which was at Rogers’ expense, accounting for half of Rogers’ losses in Alberta and British Columbia post-launch,” the commissioner’s reply reads.
“This prompted competitive responses from Rogers, Bell and Telus to offset subscriber losses to Shaw Mobile. The competitive responses of the National Carriers included aggressive retention and win-back offers targeted at Shaw Mobile and Freedom Mobile customers in Alberta, British Columbia and Ontario.”
The Commissioner also accused Rogers of downplaying the competitive significance of the wireline side of the proposed transaction, arguing it is wrong and “at odds with Rogers’ assertion that Shaw’s wireline assets would enhance Rogers’ ability to compete, including against the other National Carriers.”
In a separate reply to Shaw’s submission, the Commissioner pushes back on Shaw’s claim that Freedom Mobile can be easily removed from the rest of the company.
Arguing the application he submitted to the Competition Tribunal “is not premised on any misconception about the business of Shaw,” as Shaw alleged in its reply, the Commissioner said the application is rather “firmly grounded in Shaw’s own internal competitive assessment before its business judgement was affected by the private financial incentives a merger provides to Shaw’s shareholders.”
The Commissioner argued “there is significant integration of Freedom Mobile within Shaw’s organizational structure and, importantly, Freedom Mobile benefits from its parent’s related businesses and operations, including Shaw’s network infrastructure, Wi-Fi Hotspots and backhaul.”
He further claimed Shaw had planned on further integrating its wireless and wireline businesses going forward.
In addition to posting these two replies from the Commissioner of Competition to its website today, the tribunal also made public a new scheduling order. The schedule allows for a hearing to span five weeks, with the first to begin on Nov. 7, 2022. It is currently expected to be held by videoconference, however this could change if the tribunal decides to resume holding in-person hearings.
