TekSavvy headquarters in Chatham. (Photo by Ricardo Veneza)TekSavvy headquarters in Chatham. (Photo by Ricardo Veneza)
Chatham

Chatham's TekSavvy continues fighting giant telecom merger

TekSavvy Solutions, based in Chatham, is disputing a deal made between Rogers and Vidéotron that the company says is unfair to its business and other smaller internet service providers (ISPs).

TekSavvy filed an application on Thursday challenging the legality of what it is calling the "preferential" arrangement and is demanding a ruling by the Canadian Radio-television and Telecommunications Commission (CRTC) before the federal government makes a final decision on the giant merger between Rogers and Shaw.

Rogers is proposing a $26 billion merger with Shaw and the acquisition of Shaw's wireless spectrum licenses and Freedom Mobile business by Vidéotron, something that doesn't sit well with TekSavvy's Vice-President of Regulatory and Carrier Affairs Andy Kaplan-Myrth.

TekSavvy said the entire transaction hinges on special wholesale arrangements, including one where Rogers will lease its broadband network to Vidéotron at discounted rates that are not available to independent ISPs, such as TekSavvy.

Kaplan-Myrth said TekSavvy will be left out in the cold when it comes to special rates for accessing broadband and he is asking the CRTC to investigate the wholesale arrangements between Rogers and Vidéotron saying it violates Section 27(2) of the Telecommunications Act.

"The largest consolidation in the history of the Canadian telecom sector is predicated on unlawful wholesale agreements. This transaction is designed so the dominant carriers can weaponize the ISPs they acquired, using below-tariff rates to eliminate us from the market," said Kaplan-Myrth. "The CRTC has exclusive jurisdiction over this matter, and it must render its decision before the Minister makes his final decision on the merger."

TekSavvy argues that the agreements between Rogers and Vidéotron are "transparently anti-competitive" and merely a desperate attempt to secure regulatory approvals.

"These arrangements were not arrived at through negotiations based on natural market forces, but are instead an effort by Rogers to remove regulatory hurdles to its acquisition of another Incumbent, Shaw. The arrangement with Vidéotron is specifically designed to allow Vidéotron and its TPIA-based affiliate, VMedia, to better compete than it could using tariff rates," Kaplan-Myrth said.

TekSavvy also said federal approval for the merger must be contingent upon first enacting CRTC's 2019 decision to lower regulated rates, something that was declined last year and went up instead.

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