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NDP push for government decision on Rogers-Shaw deal

NDP Leader says Internet costs too high | Innnovation Minister Champagne says he asked CRTC to "lower prices for Canadians"

rogers, shaw
Merger of Rogers and Shaw is pending as of January 24, 2023.
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Tuesday February 14, 2023 | NATIONAL [Updated Feb 19, 2023 with poll results]

by Mary P Brooke | Island Social Trends


Internet access is considered a basic right in Canada, due to the need to be connected online for enabling access and participation in most aspects of the economy.

Many people use their wireless mobile devices for that access, as well as laptops and desktop computers.

Today Canada’s NDP Leader Jagmeet Singh said the Liberals need to stop the Rogers-Shaw merger before Friday’s deadline.

Francois-Philippe Champagne
Innovation Minister Francois-Philippe Champagne during Question Period in the House of Commons, Feb 14, 2023.

Innovation, Science and Industry Minister François-Philippe Champagne has said in recent weeks that taking a decision on the Rogers-Shaw merger deal is a top priority for him, and has indicated that he realizes the consumer competition aspect.

The Consumer Bureau of Canada lost an appeal earlier this year that would have declared the Rogers-Shaw merger as anti-competitive and that it would lead to less fairness, innovation and choice, if not also higher prices for Internet/wireless services.
 
Meanwhile, today Minister Champagne said he is “not bound by any date” to stop the deal that is entirely in his hands for a decision, one way or the other (or perhaps with modifications).

“What matters to me is to bring down prices, to bring competition…. we will always act in the best interest of consumers,” said Champagne about the federal government.

Directive to the CRTC:

Today Minister Champagne said in the House of Commons that “we stand on the side of Canadians” and that yesterday he sent a directive to the Canadian Radio-Television and Telecommunications Commission (CRTC) to lower prices for Canadians, to bring more competition in the sector.

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NDP Leader Jagmeet Singh during Question Period in the House of Commons, Feb 14, 2023.

Yesterday the final version of a new telecom policy directive first unveiled by the federal government in May of last year is now in force. “I trust that the CRTC will act on this important work, and I look forward to seeing the direction being put into action soon,” said Champagne.

However, the CRTC often misses the mark in terms of recognizing the impact of their decisions on regular consumers.

The new directive will require the CRTC to take action to have more timely and improved wholesale internet rates available. Too-high wholesale rates discourage competition, but rates set too low discourage the company’s largest telecom providers from making costly wireless infrastructure upgrades.

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Cost of Internet:
 
“Right now, Canadians’ cell phone bills are 25 times higher than people’s bills in other G7 countries, says the NDP. “The lack of competition and choice means we are already getting ripped off, and the Roger-Shaw merger will hike bills even higher,” said Singh. “People are shouldering a sky-high cost of living.”

internet, cell phone, cost of living
After housing, groceries & heat, 50% of poll respondents said that Internet & cell phone service is their top household budget priority. [IST Poll on Twitter, Feb 15 to 18, 2023]

Singh said in the House of Commons today that about 44% of Canadians are “struggling with paying their rent and groceries”, adding that “Canadians pay some of the highest cell phone and Internet fees in the world”.

A poll done by Island Social Trends on Twitter this week (Feb 15 to 18) showed that for 50% of respondents that Internet and cell phone services are top priority in their household budget (after housing, groceries and heat).

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The rate of inflation in January was 6.3%, down from a June 2022 peak of 8.1% but inflationary impacts are being seen across the economy as price pressures get baked in.

“The Rogers Shaw merger will only make things worse,” said Singh during Question Period today. He proposed that “saying no to this merger” would show the Liberal government as “standing up for families”.

Some consumers over the years have found wireless company sales techniques to be erratic and complex, particularly Rogers and Bell.

TELUS is another of the huge players. Shaw is a smaller player with also a strong hold on the cable TV side of the industry, and is known for good people-friendly customer service.

Competition landscape:

In the wireless service sector, prices are already high and in a near-monopoly scenario: Rogers is on the brink of buying up Shaw, which would leave only TELUS and Bell in the fully national market (though the merger would require Videotron to expand its Quebec operation across Canada for which there is no evidence of assured success).

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In preparation for this merger, independent ISPs have been bought out by big players, including Bell’s recent acquisitions of EBOX and Distributel.

Part of the merger deal — if it goes ahead — would require Shaw to divest of its Freedom mobile division to Videotron in Quebec. According to a senior deputy commissioner that wouldn’t be enough to “sufficiently address the anti-competitive effects of the merger” because Videotron wouldn’t have the “assets needed to compete as effectively as Shaw.”

A Tweet-reply to Minister Champagne by Island Social Trends in the last week of January struck a chord with independent-minded thinkers across Canada: “A merger of Rogers and Shaw would obliterate competition in the telecom sector. Consumers are already subject to chaotic and greedy practices by Rogers, and a merger would probably see Shaw customers eventually miss that company’s people-oriented service.”

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===== RELATED:

Proposed Rogers-Shaw merger decision now with Innovation Minister (Jan 25, 2023)