By Denis Carmel
When Vidéotron entered the wireless market, around 2010, it sought a deal with Rogers over the sharing of infrastructure and spectrum in Québec and Eastern Ontario. Rogers agreed.
So, discussions started, and a Network Operating Agreement (NOA) was signed in 2013 for 20 years. Yes, 20 years.
The purpose was to simply reduce costs on both sides and compete with Bell, which was the main operator in Québec at the time.
Bell and Telus reached a similar Canada-wide agreement in 2008.
But as Vidéotron gained market shares at the expense of Bell but also Rogers, and with the changes in the executive suite at Rogers – a new CTO but also new CEOs (Nadir Mohamed, Guy Laurence and Joe Natale) – cracks appeared in this incredibly complex edifice.
Rogers and Vidéotron could not come to an agreement on future investments, site deployments and payments to each other for Spectrum Based Costs and Spectrum Usage Fee.
The tension seems, from reading the Vidéotron motion, to have been exacerbated by the arrival of the new CTO in February 2018. This led to the launch a process of renegotiation since, in the words of the new CTO, the deal favoured Vidéotron to the detriment of Rogers and whoever negotiated the agreement for Rogers should be fired, according to the Vidéotron court document.
But the terms of the NOA were clear, according to Vidéotron, and such a process had to be agreed upon by both players.
In May 2018, Rogers confirmed it was building a parallel network contrary to the terms of the NOA. Discussions between the parties have continued but to avoid prescription (after a period of 3 years, from the date of the infraction the affected party loses its right to litigate) Vidéotron decided to go to Court, despite last-minute efforts.
So, last Friday, Vidéotron filed a motion in Québec’s Superior Court in Montréal requesting the tribunal find Rogers in breach of the contract, requesting $850.3 million in compensatory damages and finally that Rogers be compelled to adhere to the terms of the contract.
In the meantime, both still use the shared network for LTE while building parallel networks for LTE-A and 5G.
“Quebecers deserve reliable, world-class networks and for decades Rogers has invested billions of dollars in infrastructure to deliver the best service for our customers,” commented a Rogers spokesperson in an email to Cartt.ca.
“That investment continues to grow as we enhance connectivity for Québec families and businesses and speed up our rollout of 5G technology to more communities across the province. Unfortunately, Vidéotron has decided it does not want to jointly invest in network improvements in Québec. Their lack of investment is not in the best interest of consumers and does not align with our goal of providing the highest quality connectivity to our customers. With regards to Vidéotron’s lawsuit, we look forward to responding more fulsomely in the court of law.”
Rogers has 15 days to offer a preliminary response.
