Competition Bureau witness faces grilling at Rogers-Shaw tribunal

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Georgetown University economics professor Nathan Miller, an antitrust expert who consults on high-stakes merger investigations, defended his research into the proposed acquisition, which the Bureau is attempting to block. Miller told the tribunal Tuesday that the merger of the two telecom giants would eliminate the threat of Shaw as a strong fourth competitor in Canada.

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Crawford Smith, a lawyer for Rogers, questioned the model Miller provided in his report, particularly the methodology he used to measure market share and whether the numbers included a divested Freedom Mobile.

Smith suggested Shaw Mobile customers would experience a benefit in quality should they switch to the Rogers network post-merger because Rogers has a “higher quality parameter” than Shaw.

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However, National Bank of Canada analyst Adam Shine said Shaw gaining traction in the middle of the COVID-19 pandemic shouldn’t come as a surprise as people were still in their homes, using limited wireless data and that premium Shaw Internet subscribers availed themselves of bundles with a zero-dollar wireless option. He added that Shaw observed moderating demand for Shaw Mobile just over a year later, as Omicron faded and Canadians were emerging from their homes.

“(Miller) indicated that the Rogers-Shaw merger would end competition between Rogers and Shaw, but this only applies to wireless and is rendered largely moot if Freedom is sold,” Shine wrote in a note to clients late Tuesday.

Miller had said that a divested Freedom Mobile, the Shaw wireless brand that is in the process of being acquired by Quebecor Inc.’s Vidéotron subsidiary, is not going to be as strong a competitor as Shaw.

The economics professor’s appearance follows days of cross-examination of executives from telecom rivals Telus Corp. and BCE Inc.’s Bell — days which mostly involved a lot of confidential, in-camera sessions. Previous witnesses include Stephen Howe, Bell‘s chief technology officer, and Telus executives Charlie Casey and Nazim Benhadid.

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