Academics and Experts Agree: Rogers Shaw Deal is a Bad Deal for Canadians

Opposition to the Rogers Shaw deal is growing. Academics and experts are both coming forward to highlight what a rotten deal it is for Canadians.

Last month, Rogers said that they wanted to buy Shaw for $26 billion. Among other things, Rogers said that it will increase competition and be better for Canada. Canada, by this point, has responded by basically saying that Rogers executives needs their heads examined.

The opposition started at the grass roots with Canadians flooding the Competition Bureau to voice their opposition to the deal. This was followed up by the founder of Wind Mobile saying that the deal will hurt competition in Canada. Several MPs at a hearing grilled Rogers during a hearing, some even going so far as to say “these are promises that would make a robber baron blush”. That was followed up by Canadian Innovation Minister, Francois-Philippe Champagne, saying that this deal has competition concerns.

At this point, it would probably be faster to list off those who support the deal. To our knowledge, that list is Rogers, Shaw, and their respective shareholders. Suffice to say, the opposition to the deal is pretty universal.

Now, we are learning that the ranks of the legions of opposition is just continuing to grow. According to Yahoo! News, academics are also opposed to the deal:

In a third day of hearings into the Rogers proposal to buy Shaw Communications Inc., which owns Freedom as well as Western Canada’s largest cable internet network, University of Ottawa law professor Michael Geist said regulators should require a spinoff of the wireless assets before approving the deal.

“While 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,” Geist said, echoing other opponents of the deal.

“If 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.”

Ben Klass, a member of a research team studying ownership concentration in Canada’s 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 provider, Wind Mobile, rebranding it as Freedom after the 2016 purchase.

“What we’re left with is Freedom (in Ontario, Alberta and B.C.) Videotron in Quebec, Eastlink in the Maritime provinces,” Klass said.

“If this merger is allowed, it would be tantamount to the government’s admission that they’re no longer interested in supporting real competition in this space.”

Mobile Syrup is noting other witnesses during those hearings who are opposed to the deal:

Dwayne Winseck, a media industry researcher and professor at Carleton University, told MPs that the proposed acquisition would lead to significantly less competition within the market.

“The proposed mega-merger between Canada’s second and fourth largest comms and media conglomerate would if approved, significantly lessen competition. The merger would catapult Rogers even further ahead in the mobile wireless market and it would become the biggest Cable TV and internet access provider in Canada,” Winseck stated.

Further, Winseck stated that the merger would overturn any progress made towards establishing a fourth national carrier since Freedom Mobile would be eliminated.

Matt Stein, the president and CEO of the Competitive Network Operators of Canada, told MPs that the merger only benefits the large telecom companies.

“The Rogers-Shaw deal does not benefit Canadians. If it proceeds, it will only benefit the two companies, and Bell and Telus,” Stein stated.

He added that the elimination of Freedom Mobile would be unacceptable, as the carrier has been the competitive instigator in most of Canada’s largest wireless markets.

Stein stated that the carrier’s customers, network and spectrum should be divested to a party committed to service-based competition. Stein also called for a mandated MVNO (mobile virtual network operator) regime to allow for competition to flourish within the market, as the industry awaits the CRTC’s decision regarding the matter.

At this point, opposition to the Rogers Shaw deal is quite universal. Everyone knows it’ll lead to less competition, higher prices, and lower quality of service. It means that Canada’s competition landscape on the carrier side of things would go from Telus, Rogers, Shaw, and Bell to Telus, Rogers, and Bell. Earlier this month, a study confirmed that Canadians pay some of the highest rates in the world. The prices are so high, they make the notoriously high prices in America seem like a bargain by comparison.

All of this does raise a very interesting question: with so much opposition, is this deal even going to go through? If it does, how badly would it hurt the current governments image? An approval on a deal would be pretty miraculous and require quite a big amount of corruption and lobbying to make it happen. The deal has long lost its social license to move forward as it is and anyone who makes the deal happen will likely be brought down in some form or another by the overall public.

At any rate, all of Canada is hoping that this deal does fall through for their own sake.

Read more at MobileSyrup.com: Industry experts testify Rogers-Shaw deal will lead to less competition, higher prices

Drew Wilson on Twitter: @icecube85 and Facebook.



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