Everyone is swarming around the Rogers-Shaw merger like bees around a nest
The agencies, activists, corporatists, politicians, bureaucrats, lawyers, regulators, academics and media are swarming around the Rogers–Shaw merger like bees around a nest. What a pot of gooey political honey! One development soon leads to another, each one drawing fresh faces to an already incoherent state of affairs.
Maybe, I thought, the whole situation could be fed into the artificial intelligence site ChatGPT since some claim the website can produce quality analysis, all with a hit on the return key. My question: “Could you write up an analysis of the regulatory and legal turmoil surrounding this week’s decision by the Federal Court of Appeal to dismiss the Competition Bureau’s attempt to overturn a ruling by the Competition Tribunal?” You never know with ChatGPT, which has demonstrated an uncanny ability to conflate a complex situation into something that looks marginally coherent.
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But when I went to ChatGPT to test the system, what came back was “A sonnet about the status of ChatGPT,” a portion of which I quote here:
Withstanding the influx of requests,
Working hard to fulfill each one’s due.
But alas, the server cannot cope,
And the error message rings loud and clear,
‘Please check back soon,’ it gently hopes,
As it begs for a moment’s reprieve, to reappear.
So, not much help from the latest AI phenom — although there is something in the sonnet that might apply to Rogers-Shaw:
Alas, the Canadian regulatory system cannot cope
With telecom policy as the error messages ring loud
And clear to say that there may well be no hope.
The loudest error message rang Tuesday when the Federal Court of Appeal tossed out an attempt by Competition Commissioner Matthew Boswell to get the court to reverse a Competition Tribunal decision to toss out Boswell’s attempt to block the Rogers-Shaw merger. The Appeal Court said the Bureau’s attempt to review the merger as if Rogers and Shaw had not agreed to divest Shaw’s Freedom Mobile to Quebecor’s Vidéotron “would be a foray into fiction and fantasy.” The wording is similar to the conclusion from the Competition Tribunal, which said that the Bureau’s attempt to pretend the Freedom divestiture had not happened would be “divorced from reality.”
The court decision drew the bee swarm of academics, federal ministers, the new head of the CRTC along with other telcos anxious to make their case as to why the Rogers-Shaw deal, even with the Freedom divestiture, is a threat to competition.
Circling the pot we have Industry Minister François-Philippe Champagne, who has been saying for some time that if Freedom Mobile’s wireless spectrum is to be transferred to Vidéotron he wants assurances that Vidéotron would keep that spectrum “in its possession for at least 10 years” and that prices for wireless services in Ontario and Western Canada would become comparable to what Vidéotron is currently offering in Quebec, “which are today on average 20 per cent lower than in the rest of Canada.”
Fast behind Champagne is the new head of the CRTC, former Competition Bureau official Vicky Eatrides, who also seems to be ready to make wireless and internet pricing a key part of her term. But there is trouble in the lineup right behind Eatrides that suggests problems for Champagne.
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One way the CRTC pushes competition — some might call it fake competition — is to force the major telecoms such as Bell and Rogers to sell low-cost network access at fixed tariff rates to firms that do not have networks. Many brands — Freedom, for example — will have access to Rogers-Shaw networks at lower cost. However, another firm seeking access to cheaper telecom networks is TekSavvy, which last week filed a complaint with the CRTC against the Rogers-Shaw-Vidéotron deal.
TekSavvy’s complaint argues that the Rogers-Shaw-Vidéotron deal gives Freedom Mobile even lower-cost access to the Rogers-Shaw networks. In TekSavvy’s argument, the Rogers-Shaw deal makes Freedom too competitive, which is unfair. This deal, says TekSavvy, lowers prices for Freedom but not for everybody. “The arrangement with Vidéotron is specifically designed to allow Vidéotron and its wholesale-based affiliate, VMedia, to better compete than it could using tariff rates.” In other words, the Freedom deal lowers prices, creating competition, but it’s not real competition because the price set is not a regulated tariff.
Also clamouring to get into the deal are members of the House of Commons Industry Committee who have no power but do have — as the Financial Post’s Anja Karadeglija put in her report on the court decision — the “opportunity to pile on political pressure on Champagne and the Liberal government to kill the deal.” A bee swarm of legal, academic and activists are descending on the committee calling for a total remake of the Competition Act to make sure nothing like the Rogers-Shaw deal ever happens again.
This shorter-than-usual sonnet might be better:
When the deal between Rogers and Shaw
Was laid out last year all stood in awe.
Could Boswell make a case
If he attempted to block it
Or would he fall on his face and botch it?
We now know what transpired in court,
But the deal will not get a seal
Until all the players — from ministers
To sinisters and the CRTC — can congeal
Around a plan as a last resort.
• Email: [email protected] | Twitter: terencecorcoran