Yahoo Finance Globalive urges CRTC to suspend Rogers-Vidéotron wholesale deal
Globalive Capital Inc. has filed an intervention urging the Canadian Radio-television and Telecommunications Commission to suspend wholesale agreements Rogers Communications Inc. has made with Quebecor Inc.’s Vidéotron, alleging they contain preferential rates that potentially violate a section of the Telecommunications Act.
The deal between Rogers and Vidéotron is part of the divestiture of Freedom Mobile, a side deal that is key to Rogers’ proposed $26-billion merger transaction with Shaw Communications Inc.
Globalive’s filing follows a CRTC application submitted by TekSavvy Solutions Inc. last month asking the regulator to investigate the agreement, which includes discounted rates Rogers would offer Vidéotron to lease its broadband network that aren’t available to independent ISPs such as TekSavvy.
“We believe the CRTC will be able to quickly assess whether the commercial agreements between Rogers and Vidéotron are a violation of the Telecom Act,” Globalive chief executive Anthony Lacavera said in an email statement.
He alleged Rogers of providing Vidéotron with “highly advantageous, off-tariff” commercial agreements that would enable the Quebec-based provider to compete as the new fourth national competitor in Canada’s wireless market, in place of Shaw.
“We want to ensure that all competitors have access to these rates should these agreements be permitted to stand,” he said, adding that his company, aside from participating in TekSavvy’s CRTC application, plans to file its own intervention this week, specifically focusing on the “highly favourable” wireless roaming rates that Rogers has offered Vidéotron.
In TekSavvy’s Jan. 19 filing, the independent internet service provider said Rogers has confirmed it will grant Vidéotron access to its broadband network at preferential rates that are below the CRTC’s regulated rates. The Competition Tribunal, which released a decision on Dec. 29 that allowed the Rogers-Shaw merger to proceed, has described these arrangements as “further discounted from the CRTC tariffed wholesale rates.”
The CRTC on Feb. 14 confirmed it received Globalive’s intervention but cannot comment on it. Rogers did not immediately respond to a request for comment.
Lacavera had tried to buy Freedom, formerly branded as Wind Mobile — which was built on mobile assets he sold in 2015 — for about $900 million more than the $2.85-billion price tag Quebecor will pay to acquire it. Rogers instead turned to Quebecor, which analysts viewed as an obvious buyer of Freedom, because its assets would allow chief executive Pierre Karl Péladeau to expand wireless services outside his home province.
The future of Rogers’ takeover of Shaw is now in the hands of Innovation, Science and Economic Development Canada (ISED), led by federal industry minister François-Philippe Champagne, who must approve the transfer of spectrum licences from Freedom Mobile to Vidéotron in order for the deal to go through.
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