A House of Commons committee is advising Ottawa not to approve Rogers Communications Inc.’s RCI-B-T $26-billion takeover of Shaw Communications Inc. SJR-B-T unless the company divests Shaw’s wireless business, sources say.
A report from the industry and technology committee due to be tabled on Monday recommends if Rogers does not agree to sell Shaw’s wireless business, which includes Freedom Mobile, Industry Minister François-Philippe Champagne should reject the merger, according to three sources familiar with the report’s findings.
The Globe and Mail is not identifying the sources for this story because they are not authorized to speak publicly about the matter.
Mr. Champagne does not have to follow the committee’s recommendations, which are non-binding. However, sources told The Globe the report has the potential to influence his decision. The committee comprises members of Parliament from the Liberal, Conservative and New Democratic parties and the Bloc Québécois.
A spokesperson for Mr. Champagne said it would be “inappropriate” for the minister to comment because he is one of the regulators reviewing the proposed merger.
“We look forward to reviewing the work of the independent committee and will carefully consider its final analyses, recommendations, and findings,” Laurie Bouchard said in an e-mail.
A spokesperson for Rogers could not immediately be reached for comment.
The committee held public hearings last year that involved stakeholders, including representatives of Rogers and Shaw, as well as consumer advocates and Montreal-based telecom Quebecor Inc.
The merger would eliminate Freedom Mobile, reducing the number of wireless players from four to three in Ontario, Alberta and British Columbia. Several MPs questioned how that could be good for consumers.
Rogers responded that the takeover would allow the combined entity to compete more effectively against its rivals, BCE Inc. and Telus Corp.
Three regulators – the Competition Bureau, the Canadian Radio-television and Telecommunications Commission (CRTC) and the Ministry of Innovation, Science and Economic Development (ISED) – are reviewing the transaction. Rogers has said it expects the deal to close during the second quarter of this year.
The CRTC, which is reviewing the transfer of Shaw’s broadcasting distribution business to Rogers, held five days of public hearings last November. The regulator has not yet issued its decision. ISED is examining the transfer of Shaw’s spectrum licences to Rogers, while the Competition Bureau is studying whether the merger is likely to reduce competition substantially.
The tabling of the MPs’ report, which was prepared last year, was delayed by turnover on the committee after the federal election, according to another source who is familiar with the committee’s deliberations.
The committee is currently chaired by Liberal MP Joël Lightbound. Its vice-chairs are Conservative MP Michael Kram and Sébastien Lemire of the Bloc Québécois.
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