Today, Minister of Industry François-Philippe Champagne transfer approved Freedom Mobile’s spectrum license to Videotron, pushing the historic Rogers-Shaw merger over the finish line.
But Champagne also bared its fangs, announcing a total of 21 legal conditions that Rogers and Videotron have to comply with or face hefty financial penalties.
These conditions are aimed at improving competition and reducing prices in the telecom sector, he said.
But critics took to Twitter and other platforms to express their dismay over the decision, which didn’t come as a surprise.
NDP MP Brian Massey commented On this morning’s verdict: “Today was a cave-in for the big telco giants in many ways, and we’re going to see less competition, higher prices and we’re going to see continued frustration for Canadians as things move forward.” Are.”
According to TekSavvy, an independent Internet service provider (ISP) and one of the most outspoken critics of the merger, “Shaw and Freedom are just the latest dominoes in the rapidly ongoing collapse of competition in Canada’s telecommunications sector.”
During this, Rogers And videotron He rejoiced at his big win and confirmed the commitments made by Champagne:
- invest C$1 billion to improve connectivity for rural, remote and Indigenous communities in Western Canada, C$2.5 billion and C$3 billion to expand its 5G network and improve technology and network services, respectively
- Set up Rogers headquarters and create 3,000 new jobs in Western Canada that will be retained for 10 years
- Expanding the Connected Internet program for success to eligible Canadians in Western Canada and introducing a wireless version of the same program to eligible Canadians nationwide
- Honoring a five-year value commitment to Shaw Mobile customers
- Proposal Offer options that are at least 20 percent cheaper than plans currently available in Quebec and compared to those offered by major players
- Freedom Mobile license is non transferable for a period of ten years
- Expand your 5G network to Freedom Mobile’s operational area within two years
- Extend mobile service in Manitoba through the use of a signed Mobile Virtual Network Operator (MVNO) agreement
- Increase the data allocation of existing Freedom Mobile customers by 10 percent
“I wouldn’t mess with the regulator. It’s never a good thing. Not only do you have a contract with terms, but on top of that, think about the penalties,” Champagne explained these situations.
Accordingly, Champagne announced that Rogers and Videotron would pay financial damages of C$1 billion and C$200 million, respectively, if either of them breached the commitments. That, the minister said, is “unprecedented liquidation damage in Canadian history”.
But for Michael Geist, professor of internet law at the University of Ottawa, all the “tough talk” about damages is “just a meaningless distraction from Canada’s competitive problems”, adding that the decision is full of contradictions – Champagne claims. that a merger would result in greater competition, but requires it in a contract and then threatens to punish and usurp more powers if prices are not reduced.
Another such paradox, according to Geist, is the decision of Champagne To freeze spectrum transfer, he claimed in a tweet“If the merger is so big, why is there a need to stop the license transfer now?”
He added a blog post Champagne “wants to close the barn door after the horses are already out, the market is consolidated and competitors have disappeared.”
In fact, several smaller players were swallowed up by telco giants over the past year, including Ebox, Distributel and Primus by Bell, V-Media by Videotron, and Start.ca and Ultima by Telus.
TekSavvy also argued that Champagne approved the merger despite the CRTC’s ongoing investigation into preferential wholesale rates offered by Rogers to Videotron.
Peter Novak, Vice President of Insights and Engagement at TechSavvy, said in a tweet this morning, “The fact that the government has approved a merger that would have been the easiest, most popular slam dunk imaginable is very worrying. Is there anything they won’t do for these companies?”