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Sparks fly at Rogers-Shaw case conference with Competition Bureau

Barbara Shecter - Financial Post - TODAY

A person walks near the Rogers Communications Inc. building in Toronto.
Sparks flew between lawyers for merger partners Rogers Communications Inc. and Shaw Communications Inc. and the Competition Bureau — which objects to their proposed $26-billion combination — at a case conference Tuesday, with one of the cable giants’ representatives threatening to go to court Monday to seek to have the case thrown out.

Federal court Chief Justice Paul Crampton, who is to preside over a weeks-long tribunal hearing beginning Monday, oversaw the conference at which the two sides sparred over whether the trial would include the original merger proposal or a revised one that would see Shaw’s Freedom Mobile wireless unit sold to Quebecor Inc. subsidiary Vidéotron for $2.85 billion.

Rogers and Shaw favour the latter, but Competition Bureau lawyer Derek Leschinsky insisted that determining whether competition would be substantially lessened would require the pre-divestiture combination of Rogers and Shaw to be examined.

Jonathan Lisus and Kent Thomson, lawyers for Rogers and Shaw, respectively, told the judge the Competition Bureau is trying to litigate a “conjured transaction” and a “non-existent transaction” that “cannot occur and will not occur.”

Thomson went further, calling the bureau’s position “stubborn and intransigent,” with no precedent in the past 40 years, and said he was considering asking to have the case thrown out as a result.

He said it is “crystal clear” — and backed by three affidavits — that Freedom Mobile will have been purchased Quebecor’s Vidéotron unit before Rogers and Shaw close their merger transaction.
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“There is uncontested evidence to demonstrate that the Commissioner’s entire theory of this case is removed from reality,” Thomson told the judge.

Lisus added that a case cited by Leschinsky to justify his position involved a transaction that had already closed.

But Leschinsky argued that assessing the original Rogers-Shaw merger transaction is crucial because the “competitive effects will linger in Videotron,” with Freedom separated from Shaw’s wireless services and infrastructure.

He said Rogers and Shaw have known the bureau’s position for months, and have “stubbornly refused to acknowledge that (the) Commissioner has been consistent that getting rid of wireless alone isn’t enough.”

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