Business

Questions about Rogers outage can be asked at Shaw merger hearing, Competition Tribunal rules

Canada's Competition Tribunal has ruled that the Rogers Communications Inc. July 8 service outage is relevant to the upcoming hearings on the telecom giant's $26-billion takeover of Shaw Communications Inc.

Ruling made Friday after submissions from Rogers and the Commissioner of Competition

Rogers and Shaw apps are pictured on a cellphone in Ottawa earlier this year. The Competition Tribunal has ruled that the July 8 Rogers outage is relevant to the company's planned takeover of Shaw Communications Inc. (Sean Kilpatrick/The Canadian Press)

Canada's Competition Tribunal has ruled that the Rogers Communications Inc. July 8 service outage is relevant to the upcoming hearings on the telecom giant's $26-billion takeover of Shaw Communications Inc.

The ruling was made Friday after hearing submissions from Rogers and the Commissioner of Competition on the matter.

A case document on the Competition Tribunal website stated that "questions related to network outages are relevant pursuant to the pleadings in this proceeding." 

The Tribunal has been steadfastly against Rogers' takeover of Shaw because it could decrease competition. CBC News has reached out to the regulatory body to request more information about Friday's ruling.

"It might be relevant to the regulators. I don't think it's going to be relevant overall," said Patrick Horan, a portfolio manager at Agilith Capital, adding that the regulator could use the outage to build their position against Rogers and ask for more concessions during the merger hearings.

"This is just part of the gamesmanship of negotiation," he said. "That's that's how I would see it ... I think as a good negotiator you just don't let anything go for free. You want to build something and you want to get something in return or reserve it in case it might be useful later on."

Ruling comes after Rogers commitment to upgrades

The outage affected millions of Canadians, and to make sure it doesn't happen again, Rogers is committing $10 billion over three years on network upgrades and will spend $150 million on customer credits.

The ruling comes after Rogers released a commercial last week outlining what it is doing to earn back the trust of Canadians.

In a separate court document filed on Aug. 15 and made available to the public Monday, the tribunal says the proposed sale of Shaw-owned wireless carrier Freedom Mobile to Quebecor Inc.'s Videotron Ltd. is not an "effective remedy" as it "fails to eliminate the substantial lessening and prevention of competition" the transaction could cause.

Rogers intends to sell Freedom to Quebecor for $2.85 billion, in the hopes that the move will appease the concerns of federal regulators regarding its proposed takeover of Shaw.

IN PHOTOS | What the July 8 Rogers outage looked like: 

With files from the CBC's Meegan Read and Jenna Benchetrit.

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