The Rogers-Shaw merger saga was always destined to end on the desk of Innovation, Science and Industry Ministry François-Philippe Champagne. The merger has followed a familiar pattern: the companies started with a plan to merge without any divestitures that never stood a serious chance of approval, followed by adopting the Bell-MTS playbook of divesting assets to the weakest possible competitor in Xplorenet. When that didn’t fly, Videotron marched in to scoop up the wireless assets at a discount, complete with a story about exporting Quebec competition to other provinces and a politically attractive narrative for a Quebec-based minister who is reported to harbour future leadership ambitions.
The plan hit some bumps in the road – the massive Rogers outage last summer didn’t help the company’s case – but by autumn, everyone was supposed to fall into line. Yet Competition Commissioner Matthew Boswell seemingly didn’t get the memo. When he refused to step aside and take the off-ramp of the Videotron deal, he was left to watch Champagne signal his approval for Videotron with easily attainable conditions (and add the cover of a Competition Act reform consultation to demonstrate his supposed commitment to ensuring this doesn’t happen again), the Competition Tribunal dismiss his case in record time, the business press take him to task for pursuing an appeal, and the Federal Court of Appeal not even bothering to hear Rogers’ arguments as it rejected the appeal with only a long lunch break.
Boswell has announced there will be no further appeals, but he stands by the Bureau’s analysis and its pursuit of the case. As well he should. Canadians are long past debates over whether the communications market is uncompetitive with consumers facing prices that have stubbornly remained among the highest anywhere in the world. The government’s hopes for a more competitive market have been stymied at every turn: the Bell-MTS merger, the swallowing up of independent providers such as Distributel and Ebox by Bell, the failed hopes of a robust MVNO strategy, and now the Rogers-Shaw merger. New CRTC chair Vicky Eatrides needed only two weeks on the job to note that “when you look at the pricing, even internationally…. it’s not good.”
The Standing Committee on Industry and Technology will hold hearings today on the merger. It has already issued one study that recommends that the merger not proceed and these hearings will likely arrive at the same conclusion. But you don’t have to be a McKinsey consultant to realize that Champagne is unlikely to take the committee’s advice. Instead, he’s likely to tout the conditions on the deal, promise Competition Act reform, and announce his approval late on a Thursday before a holiday week so there are no questions to answer in the House of Commons. But if this is the path he chooses, Canadians must recognize that it is a choice. The committee recommendations, the Competition Bureau analysis, the views of the new CRTC chair, the TekSavvy filing on how the deal undermines wholesale agreements, and the undeniable frustration of Canadians over communications competition and pricing, provide ample support to reject the merger. Minister Champagne and the government can choose to stand up for Canadian consumers and say this deal doesn’t go ahead on their watch. Or they can stand with big telecom companies and choose to make matters even worse. It’s Champagne’s choice.