Telus Corp. T-T made efforts to “kill, slow and shape” the proposed $26-billion merger between Rogers Communications Inc. RCI-B-T and Shaw Communications Inc., SJR-B-T according to an internal presentation made to Telus’ board that was revealed Monday as part of the Competition Tribunal’s review of the takeover.
The Vancouver-based telecom’s effort to influence Ottawa with regard to the proposed merger of Canada’s two largest cable networks was called Project Fox, according to the internal company presentation.
It included attempting to persuade Innovation, Science and Economic Development Canada (ISED) that Quebecor Inc. should not be permitted to acquire Shaw’s wireless licences.
Earlier this year, Rogers and Shaw struck a deal to sell Shaw’s Freedom Mobile wireless carrier to Quebecor’s Videotron Ltd. for $2.85-billion in order to prevent the Rogers-Shaw merger from eliminating Canada’s fourth-largest carrier. Industry Minister François-Philippe Champagne’s approval is required for Shaw to be able to transfer Freedom Mobile’s wireless licences to Quebecor.
“Telus advocacy highlights danger of [Quebecor] as remedy partner; requests Minister not transfer spectrum licenses,” reads a bulletin in the presentation with the heading “ISED.” (Spectrum refers to the airwaves used to transmit wireless signals.)
Project Fox also involved providing talking points to NDP Leader Jagmeet Singh, who repeatedly asked Prime Minister Justin Trudeau during Question Period to block the merger, and attempting to leverage the massive Rogers outage in July by writing to the Competition Bureau to highlight security risks associated with eliminating network redundancies.
Telus executives also met with “political leaders to kill, shape and slow the deal,” the presentation said.
A representative of Telus did not respond to a request for comment.
The Competition Bureau is attempting to block the merger of Rogers and Shaw, arguing at the tribunal that it will result in less competition and higher prices for wireless services.
Lawyers for the cable companies have argued that the deal will increase competition and that the Competition Bureau has been convinced otherwise by aggressive lobbying from Telus and BCE Inc., which are threatened by the increased competition they would face as a result of the merger.
The slides from the presentation to Telus’ board, which took place on Aug. 4, were originally designated confidential and hidden from public view. On Monday, Federal Court Chief Justice Paul Crampton, who is overseeing the tribunal’s hearings, decided to make the document public as part of a broader effort to make the proceedings more transparent.
Chief Justice Crampton opened Monday’s hearing by speaking about a need to ensure that the public is able to follow the proceedings. He vowed to be more diligent in ensuring that confidential sessions take place only when absolutely necessary, and also expressed an intention to make critical documents such as witness statements and the schedule of witnesses more accessible to the public.
His comments came after The Globe and Mail reported that many observers were finding the hearings opaque and difficult to follow, in part owing to extensive “in camera,” or confidential, sessions. Observers also noted that cross-examinations could be difficult to follow because witness statements were not available in advance.
Chief Justice Crampton urged lawyers for both sides to group their questions together in such a way that only questions relating to competitively sensitive information are asked during confidential sessions.
“I also intend to be more vigilant in ensuring that we only remain in camera for as long as is truly necessary. I would request everyone’s assistance and understanding in that regard,” Chief Justice Crampton said.
“We all need to keep in mind that there’s a high level of public interest in this hearing, and that people need to be able to follow and better understand what we’re doing.”
The Telus document also referred to the telecom’s efforts to bolster a competing, unsuccessful bid for Freedom by Globalive Capital, which founded Freedom, then called Wind Mobile, back in 2008, before eventually selling it to Shaw.
Earlier this year, Globalive made an unsolicited offer of $3.75-billion – almost $1-billion more than Quebecor’s successful bid – to buy back the carrier. In May, Globalive announced it had struck a network and spectrum sharing deal with Telus that was conditional on acquiring Freedom Mobile.
Another Telus document presented to the tribunal contained a chart relating to the telecom’s response to the merger, with various ideas grouped by the level of risk and engagement required. The high-risk category included, among other things, engaging “meme factories” such as Canada Proud, which describes itself on its website as a “grassroots group of Canadians working to defeat Justin Trudeau” through the power of social media.
Other ideas listed included erecting billboards in Shaw territory opposing the merger, creating a LinkedIn campaign targeting Shaw employees to apply for jobs at Telus and engaging unions representing Shaw employees to oppose the deal over concerns about potential layoffs facing their members. The document also listed the possibility of enlisting “friendly academics” and former public servants to write op-eds in the media. It’s unclear from the document whether any of the suggestions were acted upon.
Bank of Nova Scotia analyst Maher Yaghi said the efforts by senior managers at Telus to oppose the deal could play against the Competition Bureau’s case. The competition watchdog is relying on witnesses from Telus and BCE Inc. to advance its argument that owning a cable network is essential to the long-term survival of a wireless business, Mr. Yaghi said.
“We believe the entry of Quebecor in Western Canada, as well as Rogers buying the cable assets of Shaw, poses a risk to competitive pricing in Western Canada, where Telus is highly concentrated,” Mr. Yaghi wrote in a note to clients.