Rogers-Shaw merger will 'only help big telecoms profit more on the backs of Canadians,' NDP says
Anja Karadeglija
Innovation Minister François-Philippe Champagne said in his own statement that greater affordability and competition would be central “in analyzing the implications of today’s news,” but that the government wouldn’t “presuppose” the outcome of those regulatory approval processes.
In the 2019 election, the Liberals promised to lower wireless prices by 25 per cent. A year ago, the government announced that promise would apply only to “mid-range” plans of 2 to 6 GB per month, and the price drop would have to happen within two years. Access-to-information documents later revealed the government expected the prices of those plans to fall organically by that date, without government intervention, as Canadians moved to higher-value plans not covered by the price drop promise.
The government said at the time they chose not to include higher-bucket data plans because prices for those plans had already fallen.
Freedom Mobile has previously been credited for driving down prices in the overall market. For instance, in 2017, it began offering 10 GB plans for $50, leading the big three to lower their prices and match that offer.
In its press release announcing the deal, Rogers pledged not to raise the prices of current Freedom Mobile customers for three years. It also promised to launch a new $1-billion fund to improve connectivity in rural, remote and Indigenous communities, expand its low-cost internet offerings for seniors and low-income individuals, and invest billions in its 5G network buildout. The company declined a request for an interview Monday.
After the COVID-19 pandemic began, the Liberal government began prioritizing rollouts of rural broadband connectivity, with former innovation minister Navdeep Bains telling a Parliamentary committee in November there needs to be a “balancing act” between affordability and investment. Telecom companies, including Shaw and Rogers, have been arguing that low wholesale rates for internet service would harm their investments in rural networks.
John Lawford, executive director of the consumer advocacy group Public Interest Advocacy Centre, said the federal government is now “at the mercy of the telecom providers” when it comes to rolling out those rural networks, the need for which has intensified as work, school, and even health care has moved online.
The only ones who can deliver it quickly are the biggest telecoms, Lawford said, a situation that gives big telecom companies leverage over the government and makes it a good time for try for a merger, Lawford said.
Ben Klass, a PhD candidate at Carleton University whose research focuses on the Canadian telecom industry, noted Freedom Mobile getting bought out by one of the big wireless providers would have a bigger impact than when the same thing previously happened with smaller competitors like Public Mobile and Mobilicity. Freedom Mobile currently has 1.9 million customers.
“This isn’t going to be a small thing that people don’t understand or notice,” he said in an interview. “Shaw’s like the pillar in English speaking Canada of the government competition policy in mobile.”
Without Freedom, “there won’t be any downward pressure” on prices from the big three at all, Lawford argued.
Of the three regulatory reviews, the Competition Bureau process, which looks at whether a deal could result in a substantial lessening or prevention of competition, is likely to be the most significant. The Competition Bureau could impose conditions on the deal, such as the sale of some wireless assets, though the market doesn’t currently have an obvious buyer.
Klass said how likely the government is to oppose Rogers’ acquisition could depend on how the issue plays with potential voters.
“I think that that depends on their perception of the public’s reaction to it,” he said. “If we are going into an election and this becomes something that captures the public’s attention, it might be something that could play a part.”
Ultimately, the government may not have final say over the decision, because the Competition Bureau is an independent agency. Its decisions can be appealed to the courts, but there is no way for the government itself to change or overturn them, Lawford said.
Anja Karadeglija
3/15/2021
© Provided by National Post NDP Leader Jagmeet Singh is critical of the proposed Rogers-Shaw merger.
Video player from: YouTube (Privacy Policy, Terms)
Allowing a $26-billion merger between Canada’s two largest cable companies will “only help big telecom companies profit more on the backs of Canadians,” NDP leader Jagmeet Singh said after Rogers Communications and Shaw Communications announced their deal on Monday.
Approval of the merger would see Rogers, one of Canada’s big three wireless providers, acquire Shaw’s Freedom Mobile, whose presence in recent years as the upstart fourth competitor in British Columbia, Alberta and Ontario, has driven competition in those provinces.
“Big telecom companies are gouging Canadians and continuing to make massive profits in a time where most families are struggling to get by. A merger between two of Canada’s biggest providers will just make it worse,” Singh said in a statement.
Allowing the acquisition would be a reversal of federal governments’ pro-competition wireless policies dating back to Stephen Harper’s Conservative government, which promoted a fourth wireless competitor to the market dominance of Bell, Telus and Rogers. In the last federal election, the Liberals’ campaign promises included lowering wireless prices.
Pierre Poilievre, the Conservative jobs and industry critic, said in a statement the proposed merger has a “number of considerations that must be studied. Conservatives will be reviewing this deal to ensure it helps create competition, affordability for Canadians, and jobs.”
The merger has three regulatory approvals to go through before it can be finalized — at the CRTC, at Innovation Canada and through the Competition Bureau.
Video player from: YouTube (Privacy Policy, Terms)
Allowing a $26-billion merger between Canada’s two largest cable companies will “only help big telecom companies profit more on the backs of Canadians,” NDP leader Jagmeet Singh said after Rogers Communications and Shaw Communications announced their deal on Monday.
Approval of the merger would see Rogers, one of Canada’s big three wireless providers, acquire Shaw’s Freedom Mobile, whose presence in recent years as the upstart fourth competitor in British Columbia, Alberta and Ontario, has driven competition in those provinces.
“Big telecom companies are gouging Canadians and continuing to make massive profits in a time where most families are struggling to get by. A merger between two of Canada’s biggest providers will just make it worse,” Singh said in a statement.
Allowing the acquisition would be a reversal of federal governments’ pro-competition wireless policies dating back to Stephen Harper’s Conservative government, which promoted a fourth wireless competitor to the market dominance of Bell, Telus and Rogers. In the last federal election, the Liberals’ campaign promises included lowering wireless prices.
Pierre Poilievre, the Conservative jobs and industry critic, said in a statement the proposed merger has a “number of considerations that must be studied. Conservatives will be reviewing this deal to ensure it helps create competition, affordability for Canadians, and jobs.”
The merger has three regulatory approvals to go through before it can be finalized — at the CRTC, at Innovation Canada and through the Competition Bureau.
Innovation Minister François-Philippe Champagne said in his own statement that greater affordability and competition would be central “in analyzing the implications of today’s news,” but that the government wouldn’t “presuppose” the outcome of those regulatory approval processes.
In the 2019 election, the Liberals promised to lower wireless prices by 25 per cent. A year ago, the government announced that promise would apply only to “mid-range” plans of 2 to 6 GB per month, and the price drop would have to happen within two years. Access-to-information documents later revealed the government expected the prices of those plans to fall organically by that date, without government intervention, as Canadians moved to higher-value plans not covered by the price drop promise.
The government said at the time they chose not to include higher-bucket data plans because prices for those plans had already fallen.
Freedom Mobile has previously been credited for driving down prices in the overall market. For instance, in 2017, it began offering 10 GB plans for $50, leading the big three to lower their prices and match that offer.
In its press release announcing the deal, Rogers pledged not to raise the prices of current Freedom Mobile customers for three years. It also promised to launch a new $1-billion fund to improve connectivity in rural, remote and Indigenous communities, expand its low-cost internet offerings for seniors and low-income individuals, and invest billions in its 5G network buildout. The company declined a request for an interview Monday.
After the COVID-19 pandemic began, the Liberal government began prioritizing rollouts of rural broadband connectivity, with former innovation minister Navdeep Bains telling a Parliamentary committee in November there needs to be a “balancing act” between affordability and investment. Telecom companies, including Shaw and Rogers, have been arguing that low wholesale rates for internet service would harm their investments in rural networks.
John Lawford, executive director of the consumer advocacy group Public Interest Advocacy Centre, said the federal government is now “at the mercy of the telecom providers” when it comes to rolling out those rural networks, the need for which has intensified as work, school, and even health care has moved online.
The only ones who can deliver it quickly are the biggest telecoms, Lawford said, a situation that gives big telecom companies leverage over the government and makes it a good time for try for a merger, Lawford said.
Ben Klass, a PhD candidate at Carleton University whose research focuses on the Canadian telecom industry, noted Freedom Mobile getting bought out by one of the big wireless providers would have a bigger impact than when the same thing previously happened with smaller competitors like Public Mobile and Mobilicity. Freedom Mobile currently has 1.9 million customers.
“This isn’t going to be a small thing that people don’t understand or notice,” he said in an interview. “Shaw’s like the pillar in English speaking Canada of the government competition policy in mobile.”
Without Freedom, “there won’t be any downward pressure” on prices from the big three at all, Lawford argued.
Of the three regulatory reviews, the Competition Bureau process, which looks at whether a deal could result in a substantial lessening or prevention of competition, is likely to be the most significant. The Competition Bureau could impose conditions on the deal, such as the sale of some wireless assets, though the market doesn’t currently have an obvious buyer.
Klass said how likely the government is to oppose Rogers’ acquisition could depend on how the issue plays with potential voters.
“I think that that depends on their perception of the public’s reaction to it,” he said. “If we are going into an election and this becomes something that captures the public’s attention, it might be something that could play a part.”
Ultimately, the government may not have final say over the decision, because the Competition Bureau is an independent agency. Its decisions can be appealed to the courts, but there is no way for the government itself to change or overturn them, Lawford said.
No comments:
Post a Comment