December 2, 2023

‘The chickens are coming house to roost’ after the $26-billion acquisition of Shaw by Rogers was given ultimate approval this yr, says an business observer

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OTTAWA — Months after Ottawa authorised Rogers Communications’ takeover of Shaw Communications — on the premise that spinning off Shaw’s cellular enterprise to Quebecor would enhance wi-fi competitors — Rogers is in court docket combating the community entry charges the CRTC ordered it to offer Quebecor.

The court docket attraction by Rogers can be a stumbling block to the CRTC’s years-in-the-making plans to extend the variety of wi-fi suppliers in Canada, business observers and advocates say.

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Expectations “that Rogers would play good on account of this merger, I believe had been unrealistic,” mentioned telecom researcher Ben Klass. “The chickens are coming house to roost.”

Rogers’s $26-billion acquisition of Shaw obtained ultimate approval earlier this yr. In July, the CRTC set the “cellular digital community operator” (MVNO) charges Quebecor can pay Rogers to make use of Rogers’ mobile community. The regulator selected Quebecor’s fee in final-offer arbitration. With the charges set, Quebecor was anticipated to start out providing cellphone service in additional areas throughout the nation.

Rogers is now combating these charges, having filed an attraction of the CRTC’s resolution within the Federal Courtroom of Enchantment on Aug. 23.

Beneath Shaw, Freedom Cellular was the fourth wi-fi competitor to the Large Three suppliers in Ontario, Alberta and B.C. — Telus, Bell and Rogers. As a result of Quebecor doesn’t personal a nationwide mobile community, it might be given entry for Freedom Cellular to make use of the networks of enormous corporations like Rogers, permitting it to supply companies in areas it doesn’t have its personal infrastructure.

In a press launch saying the settlement for Quebecor to purchase Shaw’s Freedom Cellular, Rogers promised the deal would “make sure the presence and viability of a robust fourth wi-fi service in Canada.”

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Federal Business Minister Francois-Philippe Champagne mentioned in approving the deal that Quebecor’s “acquisition of Freedom Cellular’s licences will enhance affordability, competitors, and innovation within the telecommunications sector” and create a “nationwide fourth participant … capable of go toe-to-toe with the large three, and truly drive down costs throughout Canada.”

Quebecor CEO Pierre Karl Péladeau mentioned Rogers’ “shocking and incomprehensible turnaround borders on hypocrisy, and flies within the face of the commitments Rogers made to Minister Champagne, to ISED, to the CRTC, to (Quebecor) and, above all, to Canadians.”

Péladeau mentioned in an announcement to Nationwide Put up that it was Rogers that requested the CRTC for final-offer arbitration on the charges, and Quebecor agreed “as a compromise to make the matter transfer ahead and permit Rogers to acquire the approval for its proposed transaction with Shaw.”

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He mentioned Rogers had assured each the federal government and Quebecor the speed the CRTC set in arbitration “could be binding and ultimate. It will set the speed as soon as and for all.”

“Now that the transaction has taken place and the mandatory approvals have been obtained, Rogers is patently appearing in dangerous religion by refusing to just accept the choice,” Péladeau mentioned.

A Rogers spokesperson mentioned in an announcement that underneath the Telecommunications Act, “there’s a statutory proper to hunt go away to attraction and this step is in step with our rights and obligations. We consider the CRTC’s resolution comprises various authorized errors and was the product of a flawed course of.”

When the Liberal authorities authorised the Rogers-Shaw merger in March, it imposed various legally binding commitments on the businesses. However an MVNO settlement with Rogers, although talked about within the authorities press launch, wasn’t one among them, that means the federal government has no authority to step in.

Audrey Champoux, a spokesperson for Champagne, mentioned “whereas it is a matter that’s now earlier than the courts, minister Champagne will at all times be certain that the binding commitments…are met.”

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Rogers obtained their cope with Shaw … now they’ll do the whole lot they’ll to forestall Quebecor turning into the efficient nationwide competitor

Matt Hatfield of advocacy group OpenMedia mentioned the Rogers-Quebecor dispute “reveals what we at all times knew: giving Rogers the whole lot they needed on situations of excellent future behaviour merely doesn’t work.”

“Rogers obtained their cope with Shaw authorised, and now they’ll do the whole lot they’ll to forestall Quebecor turning into the efficient nationwide competitor our authorities promised Canadians.”

Péladeau mentioned regardless of the court docket attraction, the ultimate charges the CRTC set nonetheless apply and firm nonetheless plans to develop all through the nation.

The CRTC has additionally been implementing its personal non permanent MVNO regime, first introduced in 2021, with the concept that regional gamers like Quebecor can have entry to networks of the most important and incumbent telecoms in Canada for seven years. In an Aug. 7 press launch saying the MVNO offers had been reached, the CRTC referred to as it “an essential milestone for the CRTC’s work to extend cellphone companies competitors in Canada.”

Lawford mentioned Rogers’ court docket case might additionally trigger different regional gamers the CRTC is hoping will soar into the wi-fi marker to take pause. “If I had been any of the medium, small ones…. I wouldn’t hassle. I wouldn’t do any MVNO growth till I see what occurs with Rogers,” he mentioned.

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Telecom guide Gerry Wall mentioned the state of affairs means a framework “that can truly assist MVNOs isn’t imminent.” He mentioned “Quebecor is the most important agency negotiating with the Large Three and the smaller MVNOs are doubtless ready for the end result of this battle.”

The Rogers court docket case might go on for a number of years — a good portion of the seven years the CRTC’s MVNO regime shall be in place. Lawford mentioned it’s an identical state of affairs small impartial web suppliers discovered themselves in just a few years in the past when the large telecoms fought CRTC-set wholesale charges, which the CRTC later backtracked on. Massive telecom corporations have now purchased up essentially the most established impartial gamers, together with Ebox, Oxio, Altima Telecom,, VMedia, and Distributel, whereas TekSavvy is up on the market.

Lawford referred to as the present Rogers-Quebecor state of affairs one other “wholesale mess,” through which incumbents are once more dragging out the wholesale rate-setting course of.

Klass, the telecom researcher, mentioned delays are a “well-established a part of the MO of those corporations.”

“It’s completely comprehensible for a corporation like Rogers to pursue one of these strategy, particularly when it’s labored in such spectacular style in current instances.”

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