Rogers Communications Inc. shouldn鈥檛 be allowed to buy Canada鈥檚 fourth-largest wireless service, Freedom Mobile, because it would undo attempts improve prices and services through competition, experts in telecommunications policy told MPs on Tuesday.
In a third day of hearings into the Rogers proposal to buy Shaw Communications Inc., which owns Freedom and Western Canada鈥檚 largest internet network, University of Ottawa law professor Michael Geist said regulators should require a spinoff of the wireless assets before approving the deal.
鈥淲hile some seek to justify it or explain it away, the simple reality is that Canadians already pay some of the highest prices for wireless services in the world,鈥� Geist said, echoing other opponents of the deal.
鈥淚f this merger is approved, the situation is likely to get worse. Indeed, when Rogers promises that it will not raise prices for Shaw Freedom Mobile customers for three years, it effectively signals that it will be raising them as soon as the clock runs out on that time.鈥�
Shaw chief executive Brad Shaw and Rogers CEO Joe Natale told the same committee on March 29 that they鈥檇 be stronger competitors to Bell and Telus by combined their spending power and assets. That would allow the combined company to reach more rural and underserved areas, they said.
Brad Shaw also said the company founded by his father J.R. Shaw just wasn鈥檛 big enough on its own to fund the enormous investments required to build fifth-generation wireless networks.
Under questioning, Geist 鈥� an expert in internet and e-commerce policy 鈥� said the 鈥渕ost palatable鈥� outcome would be to have Shaw and Freedom to remain independent rivals to Canada鈥檚 biggest three biggest telecommunications companies.
鈥淪haw is a viable, innovative competitor,鈥� Geist said. 鈥淪o taking them out of the market 鈥� is a loss ultimately for consumers.鈥�
Ben Klass, a member of a research team studying ownership concentration in Canada鈥檚 telecom and media industries, said the government needs to stick with aiming for a fourth wireless carrier in every region.
Most of the new wireless competitors that emerged in 2008 and 2009 have been absorbed by the Big Three. Shaw bought the largest independent, Wind Mobile, rebranding it as Freedom after the 2016 purchase.
鈥淲hat we鈥檙e left with is Freedom (in Ontario, Alberta and B.C.) Videotron in Quebec, Eastlink in the Maritime provinces,鈥� Klass said.
鈥淚f this merger is allowed, it would be tantamount to the government鈥檚 admission that they鈥檙e no longer interested in supporting real competition in this space.鈥�
The deal announced March 15 needs regulatory approval to go forward. Key officials, including the federal competition commissioner, are scheduled to address the committee on Wednesday.
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David Paddon, The Canadian Press
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