Court rejects appeal of Rogers-Shaw buyout, threatening telecom competition in Canada
Fate of telecom market now lies with Industry Minister Champagne
JANUARY 24, 2023 — Today the Federal Court of Appeal dismissed the Competition Bureau’s appeal to allow the Rogers-Shaw buyout to move forward. The deal as accepted by the Competition Tribunal requires the sale of Freedom Mobile — Shaw’s wireless provider — to Vidéotron. Rogers has further indicated it will permit Vidéotron to purchase access to their network at a reduced rate unavailable to other independent providers. The final approval of the deal now rests solely in the hands of Industry Minister François-Philippe Champagne.
“The deal the Tribunal accepted is still terrible for ordinary Canadians,” said OpenMedia Campaigns Director Matt Hatfield. “Even with a Freedom Mobile spinoff, Rogers buying Shaw means less choice and more expensive prices for every consumer in Canada. We’re seeing a collapse of independent ISPs that create positive price pressure on telecom giants, and we’re now on the verge of adding Shaw to that list. In 2022 alone, we lost over a half dozen independent providers to Big Telecom buyouts. Consumer prices are going up, and competition keeps shrinking. And that’s happening because our government and the CRTC reliably side with giant telecom interests over prioritizing competition and price. Now Minister Champagne has a choice – will he break with the past and take a firm stand for Canadians? Or will his decision be more of the same?”
“There’s a solution to our competition problems that has been staring Minister Champagne in the face for years,” continued Hatfield. “It’s called services-based competition, and it starts with fair Internet wholesale access rates for all indie ISPs, not just the ones Rogers deems eligible. It also means opening Canada up to low-cost alternative cell phone companies called MVNOs. The right move is for Minister Champagne to block the Rogers-Shaw buyout in full; that’s the only way to protect the competition we have today. But our telecom sector will only catch up to the fair prices the rest of the world pays through durable service-based competition that buyouts like this can’t eliminate.”
The current deal will see Vidéotron take over Freedom Mobile, but still leaves Shaw’s wireline Internet customers in Rogers’ hands. To secure the deal, Rogers is offering wholesale wireline access rates to Vidéotron on the Rogers network far below the CRTC standard rates. The necessity of the deal is a tacit acknowledgement that the current wholesale rates do not provide an adequate basis for Vidéotron or other providers to offer Canadians competitive prices.
Since the Rogers-Shaw buyout was initially proposed in March 2021, OpenMedia and others have delivered over 83,000 community member messages calling on policymakers to block the Rogers-Shaw deal. A further 10,000 members of OpenMedia’s community have signed a petition calling on Minister Champagne to take concrete action to curb the dominance of telecom giants like Rogers, Bell, Telus, and Quebecor. A new campaign calls on Minister Champagne to mandate telecom infrastructure owners to extend fair wholesale rates to all independent internet providers in Canada.