Lawyer, tribunal witness spar over whether Rogers-Shaw merger will bring higher quality to customers

An anti-trust expert refuted a Rogers Communications Inc. lawyer's suggestion that Shaw Communications Inc. customers will benefit from the potential merger because they will experience a “higher quality parameter” than they currently do with pre-merger Shaw. Georgetown University economics professor Nathan Miller appeared before the Competition Tribunal all day Wednesday for cross-examination after he presented a lengthy document Tuesday analyzing the pros and cons of the proposed takeover. Tuesday, Miller came out against the merger. He said Shaw’s Freedom was stronger when its service could be bundled with the wireline elements of Shaw in Alberta and British Columbia. Quebecor Inc.’s Videotron subsidiary, which will house Freedom if the deal goes through, does not have wired networks outside of Quebec. Wednesday, Rogers’ lawyer Crawford Smith cross-examined the anti-trust expert and questioned his report. Smith suggested Shaw Mobile customers will benefit in quality by moving to Rogers because the incumbent has a higher quality network than Shaw. “So they are moving from a lower quality network to a higher quality network. Correct?,” Smith asked. Miller said that reasoning misinterprets the quality parameter of the model used in his research. He said quality is more than just network. “The model picks up all the reasons that a customer might pick up a product. Network quality is one reason, a brand is another reason, and loyalty might be another reason. It's just a combination of everything that customers care about other than price. And so the notion that it's tethered only to network quality would be incorrect,” Miller stated. Smith suggested that even with all those criteria put together, Rogers will have a higher-quality parameter post-merger, therefore, benefiting customers. Miller said his research suggested that Shaw Mobile and Rogers, particularly in Alberta, have very similar quality parameters. “ I don't know if it's enough to move the needle and I haven't seen any results that would suggest otherwise,” Miller said. Smith also pointed out that Miller’s model does not examine the three bundled products that will be available in the market post-merger (Telus Corp., Rogers, and the new Freedom bundle expected to be introduced under the ownership of Videotron), instead Miller examined the same Freedom product (wireless only product) in his pre-merger and post-merger analysis. Miller agreed with Smith’s statement that Videotron’s bundle can be profitable and successful, even if it's not as profitable and as successful as Shaw Mobile. “That sounds like a relative statement so yes,” Miller said. “In that case, its entry can have a competitive benefit in the marketplace, wouldn't it?” Smith asked. Miller said it “was possible.” Smith then went on to ask if Miller agrees that there is “no evidence that Videotron intends to do anything but compete vigorously” in British Columbia and Alberta, including by using third-party internet access. Miller said there is a lot of data evidence in his report to suggest that Quebecor does not have the necessary assets in Ontario, Alberta, and B.C., and how that matters for their business model, including their ability to offer the bundle. Smith shot back that that was not his question and reiterated that he was asking about evidence regarding Quebecor’s intentions. “I believe they say they're going to compete vigorously. I've tried to assess the likelihood of their success,” Miller responded. Miller’s testimony comes several days into week two of the tribunal. Earlier this week, the Competition Tribunal heard how Telus had a lobbying and public relations effort aimed at stopping the merger, known as Project Fox. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

Lawyer, tribunal witness spar over whether Rogers-Shaw merger will bring higher quality to customers

News | November 17, 2022

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Lawyer, tribunal witness spar over whether Rogers-Shaw merger will bring higher quality to customers

News | November 17, 2022

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