Canada Follows U.S. Lead On Mindless Consolidation With Rogers, Shaw Merger Approval
In both Canada and the U.S., there's no shortage of evidence that consolidation in telecom and media hasn't been great for telecom and media - or employers, competition, or consumers.
That's not really stopping regulators in either country, who continue to approve massive harmful megadeals with only the pretense of meaningful review. Canada's just approved the massive $16-$25 billion merger between two of its biggest telecom, wireless, and media behemoths: Shaw and Rogers.
The review took two years, with regulators particularly concerned about how the merger would impact wireless competition. Not so concerned that they'd be willing to block the merger, however. The deal was approved, but Shaw was required to offload its wireless arm, Freedom Mobile, to Videotron:
That final approval came from Canada's Minister of Innovation, Science and Industry, which approved the transfer of Shaw's spectrum licenses to Videotron. These license transfers are necessary because as part of the deal, Shaw was required to divest its Freedom Mobile wireless business. Shaw is selling Freedom Mobile to Videotron, which is a wholly-owned subsidiary of Quebecor.
Canadian regulators followed the lead of U.S. regulators, who recently approved the Sprint T-Mobile merger without actually reading studies on the deal's impact. They then tried to pretend the consolidation wouldn't be harmful by trying to create a new replacement competitor out of Dish Network, a process that's...looking more and more doomed by the month.
The problem with megadeal conditions in both countries is several fold. One, regulators are comically captured, so accountability for when companies break their promises are fleeting at best. And two, the consolidation created by such deals further offsets an already muted incentive to meaningfully compete on price, expand access to broadband, or generally, you know, try.
Antitrust oversight now routinely fails to function in the U.S. and Canada. Softball mainstream media coverage provides cover for deal shortcomings, with any real criticism relegated to underfunded fringe outlets, while mainstream outlets push stories featuring quotes from industry officials claiming the deal will be an exciting new chapter" and create a rising star" in media and telecom.
The 5,000 to 10,000 lost jobs become an afterthought. The fact that Canadians already pay some of the highest prices in the world for wireless data (directly due to past consolidation) becomes an afterthought. Data showing looming price hikes become footnotes. And the regulators who approve such deals soon enter the revolving door, and the entire approval process gets memory holed.