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Sale of Freedom to Videotron | TekSavvy asks the CRTC to review the agreement



Independent internet service provider asks the Canadian Radio-television and Telecommunications Commission (CRTC) to investigate the agreement between Rogers and Quebecor that arose in the context of the proposed acquisition of Shaw by Rogers and to rule that it violates the Telecommunications Act.

TekSavvy, which has offices in Ontario and Quebec, argues that the “largest consolidation in the history of the Canadian telecommunications sector” is based on illegal wholesale agreements.

In other words, TekSavvy maintains that the transaction is based on unduly preferential wholesale agreements between Rogers and Videotron’s parent company, which contravenes the Telecommunications Law.

“The transaction is designed so that dominant carriers can use the internet service providers they have acquired as a weapon, using below-regulated rates to drive us out of the market,” Andy-Kaplan said. Myrth, vice president of regulatory and operator affairs at TekSavvy.

Teksavvy argues that at the Competition Tribunal hearing in December, Rogers, Shaw and Quebecor (Videotron) revealed for the first time that their entire transaction is based on special wholesale agreements, including an agreement that Rogers will lease its broadband network to Videotron at discounted rates not available to independent internet service providers, such as TekSavvy.

As part of the transaction by which Rogers proposes to buy Shaw, a transaction valued at $26 billion (including debt), Videotron (Quebecor) is expected to acquire Shaw’s wireless subsidiary, Freedom Mobile, for 2, 85 billion.

“Anti-competitive” agreements

TekSavvy argues that the agreements between Rogers and Videotron are “patently anti-competitive” and just a one-time product of their “desperate attempts” to obtain regulatory approvals.

“The agreement entered into with Videotron is expressly intended to allow Videotron and its affiliated company […] VMedia to be more competitive than they could be using regulatory rates. »

TekSavvy adds that “the CRTC has exclusive jurisdiction over this matter and must render its decision before the Minister [François-Philippe Champagne] announces its final decision on the merger”.

In its application filed Thursday, TekSavvy also asks the CRTC to investigate whether Bell is offering unduly preferential wholesale deals to internet service providers it recently acquired.

Last year, internet service providers Ebox and Distributel were bought by Bell while VMedia was swallowed up by Quebecor.

The Competition Tribunal approved the purchase of Shaw by Rogers at the end of December. In particular, the court argued that the sale of Freedom was sufficient to ensure that competition was not significantly lessened.

The Competition Bureau appealed the decision.

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