Canada’s Competition Bureau Recommends Blocking Rogers Shaw Merger

The Roger’s Shaw merger has finally hit a potential road block. The Competition Bureau recommends blocking it.

The Roger’s Shaw merger has been looming on Canadian’s for some time now. If you can believe it, the story has been going on since March of last year when it was first announced that Rogers wanted to buy Shaw for $26 billion. When word spread, Canadian’s gave a collective groan over what that could mean. Already, Canadian’s pay some of the highest cell phone rates in the world. For many, including us, it only means less competition, higher rates, and lower quality of service. Everyone knows telecom competition has been a problem for over a decade and the buyout could mean Canada is taking a big step in the wrong direction.

Naturally, if its bad for the Canadian consumer, but good for telecom monopolies, then Canada’s alleged regulator, the CRTC, would be all over it. Surprising exactly no one, the CRTC rubberstamped the merger at the first available opportunity. The decision just added another shining example of why the CRTC really is terrible at this whole regulation thing. Subsequently, the “regulator” got some additional backlash in a long string of backlash it has gotten over the years. In this case, the backlash was very much deserved.

Now, another development that shows just how much the CRTC is isolated in being so quick to approve of the merger. The Competition Bureau is recommending that the Competition Tribunal block the merger. This for all the reasons we’ve been saying all along. From CP24:

The Competition Bureau says is seeking to block Rogers Communications Inc.’s proposed $26-billion acquisition of Shaw Communications Inc.

The federal regulator says the proposed deal would lead to higher prices, poorer service quality and fewer choices, particularly in wireless services.

It says it is asking the Competition Tribunal to prevent the deal from proceeding, as well as asking for an injunction to stop the two companies from closing the deal until the Bureau’s application can be heard.

The article goes on to say that the Competition Bureau is saying that Shaw has added to the overall competition in the wireless market. It says that ever since the merger was announced, the competition from Shaw has been backsliding. Rogers and Shaw both said that they intend on fighting this decision and forge ahead with the deal.

This represents the first big development which pushes for a full blocking of the deal. Back in April, Innovation Minister, Francois-Philippe Champagne, said that he has some concerns with the merger, but was leaning towards spinning off Freedom Mobile before approving of the deal rather than a full blocking of the merger.

The decision is by no means final, but it is breathing life and hope that the deal can be somehow blocked altogether. The Tribunal can, of course, can ignore the recommendations, but the decision does show that there is a push to block the merger in the first place. Digital rights advocates have responded with seeming enthusiasm, though more with motivation to keep forging ahead more than anything else:

The hope is that this will all create momentum towards blocking the deal altogether. It’s the ultimate goal because the lack of competition in the market is a huge problem and the merger only serves as a way of taking the situation and making it worse. We’ll have to see if these efforts translates to an actual blocking of the deal or if this sliver of hope dissipates into the darkness. Still, it’s nice to see something positive come out of this story for a change.

Drew Wilson on Twitter: @icecube85 and Facebook.

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