Shaw says Freedom was built to be easily separated from Shaw
ROGERS COMMUNICATIONS AND Shaw Communications today filed their responses to the Competition Bureau’s application to the Competition Tribunal for an order blocking their proposed merger, with Rogers calling Commissioner of Competition Matthew Boswell’s position “unreasonable”.
In an application to the Competition Tribunal, filed last month, the commissioner indicated he is seeking to prevent the Rogers and Shaw merger due to concern over the impact he alleges it will have on wireless competition in the country.
Rogers, however, says the commissioner’s analysis “is flawed and incomplete.”
“Contrary to the Commissioner’s allegations, the Transaction has not substantially lessened or prevented competition in wireless services since it was announced in March 2021 and would not do so once completed,” the reply reads. Rogers further says the merger will allow it to become “a stronger and more effective competitor”.
Pointing out the commissioner is seeking to block the entire transaction based only on the effects it will allegedly have on wireless competition in B.C., Alberta and Ontario, Rogers argues the commissioner “has failed to properly assess those effects, which are in fact minimal to none.”
According to Rogers, the commissioner has failed to assess the “significant efficiencies” the merger will bring to the country’s economy. “The Commissioner cannot establish that the transaction will result in a substantial lessening of competition in wireless services, and any alleged impact on competition is far outweighed by the transaction’s efficiencies,” the reply says.
Rogers indicated it proposed the full divestiture of Shaw’s Freedom Mobile, but that the commissioner rejected its proposal.
“The Commissioner insists that no aspect of the transaction can proceed, regardless of what divestiture Rogers and Shaw propose and regardless of the benefits to Canadians and the Canadian economy that will be lost as a result,” the reply says. “The Commissioner’s position is unreasonable, contrary to both the economic and fact evidence presented to the Bureau, and not supportable at law,” Rogers’ reply reads.
Shaw, in its own reply, argues the commissioner’s concerns about separating Freedom from Shaw’s wireline business are “misplaced”, stating it built and managed Freedom, which was a standalone business when it was Wind Mobile, “in a manner that ensures it can be cleanly and easily separated from Shaw.”
“The Commissioner’s Application is premised on a misunderstanding and mischaracterization of the ability of Shaw’s wireless services business to “leverage” the company’s wireline assets,” Shaw’s reply reads. “This, in turn, has led to Commissioner to mistakenly conclude that Shaw’s wireless services business cannot be separated from Shaw in an effective manner that will enable its continuing competitiveness.”
Both Rogers and Shaw asked for the application to be dismissed.
Despite both replies filed with the tribunal today, it is still possible there will not be a hearing on this matter. Earlier this week Rogers, Shaw and the bureau announced they agreed to request an expedited hearing and agreed the deal would not go through before the tribunal makes its ruling. In a press release issued at the time, Rogers and Shaw said that agreement would allow them “to focus on addressing the Commissioner’s concerns with the Transaction in order to reach a settlement.”
