Rogers Communications Inc. should not be allowed to buy Canada’s fourth largest cellular service, Freedom Mobile, as it would undo attempts to improve prices and services through competition, telecommunications policy experts told MPs on Tuesday.
On a third day of hearings on Rogers’ proposal to buy Shaw Communications Inc., the owner of Freedom and Western Canada’s largest internet network, University of Ottawa law professor Michael Geist said regulators should require a spin-off of the wireless assets, before they approve the deal.
“While some are trying to justify or explain it, the simple reality is that Canadians are already paying some of the highest prices for wireless services in the world,” Geist said, echoing other opponents of the deal.
“If this merger is approved, the situation is likely to get worse. When Rogers promises not to increase prices for Shaw Freedom Mobile customers for three years, it is effectively signaling that they will be increased once the clock runs out at that time. “
Brad Shaw, CEO of Shaw, and Joe Natale, CEO of Rogers, told the same committee on March 29 that the combination of their purchasing power and wealth would make them stronger competitors of Bell and Telus. This would allow the combined company to reach more rural and underserved areas, they said.
Brad Shaw also said that the company founded by his father, JR Shaw, was not big enough on its own to fund the huge investments required to build fifth generation wireless networks.
Geist – an expert on internet and e-commerce policy – said the “tastiest” result was having Shaw and Freedom as independent rivals to Canada’s three largest telecommunications companies.
“Shaw is a viable, innovative competitor,” said Geist. “Taking them off the market … is ultimately a loss to consumers.”
Ben Klass, a member of a research team examining the concentration of ownership in Canada’s telecommunications and media industries, said the government must stick with the search for a fourth wireless operator in each region.
Most of the new cellular competitors that emerged in 2008 and 2009 have been taken over by the Big Three. Shaw bought the largest independent company, Wind Mobile, and renamed it Freedom after purchasing it in 2016.
“What we have left is Freedom (in Ontario, Alberta and BC) Videotron in Quebec, Eastlink in the Maritime Provinces,” said Klass.
“If this merger is allowed, it would be tantamount to admitting the government that they are no longer interested in supporting real competition in this area.”
The deal, announced on March 15, requires regulatory approval to proceed. Key officials, including the federal competition commissioner, will address the committee on Wednesday.
READ MORE: Roger’s plan to buy Shaw is raising red flags because of competition, especially in the wireless space
David Paddon, the Canadian press
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