OTTAWA – In response to a report from the industry committee urging the federal government to block Rogers’s proposed takeover of Shaw Communications, Industry Minister Francois-Philippe Champagne declined to comment on the matter specifically but pointed to a number of policy developments that he says will help alleviate concerns about telecom competition and prices.
In March, the committee recommended that the government block the proposed deal on the grounds that it allegedly would stunt competition. If ISED – which is reviewing the spectrum licensing portion of the deal – permits the merger, the committee urged the government to ensure all conditions are enforceable.
In a response letter yesterday, Champagne said that while the office acknowledges the concerns of the report and about consolidation in the telecom market, the federal government and the telecom regulator have done things to push the country in a positive direction for competition.
The developments noted include the federal government’s commitment to getting the industry to bring down wireless prices by 25 per cent, which it claims has been achieved; its continued support for a spectrum set-aside policy facilitating a bidding process only for smaller and regional carriers; its continued commitment to grow federal broadband programs, including the $2.75-billion Universal Broadband Fund; low-cost wireless plans ushered in by a decision of the CRTC, which also instituted a decision last year that allows regional competitors to lease wireless network space from the large carriers, provided they have infrastructure and spectrum.
“The Government recognizes the concerns expressed and has taken the Committee’s thoughtful and well-articulated recommendations into consideration,” Champagne said in his letter. “We will continue to review the proposed transaction with rigour and due diligence in accordance with the governing frameworks, and will continue to advance policies to encourage greater competition in the telecommunications sector and to promote access to high quality services at affordable prices for all Canadians.”
The proposed deal has already passed the CRTC’s broadcast review, which requires millions of dollars be placed by Rogers into funds supporting Canadian content. It has also been rejected by the Competition Bureau, which is taking action at the Competition Tribunal to block the deal – unless the two sides can come to an agreement that doesn’t lessen competition in the market. (Rogers and Shaw on Friday struck a deal to sell Freedom Mobile assets to Quebecor, though the Bureau said last week the sale of the wireless division would not be enough. ISED had by then already said it would not allow Rogers to absorb the wireless assets.)
One particular development pointed out by Champagne occurred after the release of the committee report – the new policy direction of his office to the CRTC, which largely focuses on improving the wholesale internet access market for third-party competitors. Champagne called it the “strongest policy direction ever issued.”
The letter also responded to the report’s recommendation that ISED improve support for the Competition Bureau. Champagne pointed to the government’s 2021 budget that provides the independent agency with $96 million over five years for tools including enhanced enforcement capacity. He also noted that in the most recent Budget Implementation Act, the government proposed legislative amendments to the competition legislation that would fix loopholes and adapt the law to today’s “digital reality.”
