Once Manitoba Telecom Services sold, there's no hitting 'redial'

Hey there, time traveller!
This article was published 29/11/2016 (785 days ago), so information in it may no longer be current.

In May this year, Bell Canada Enterprises announced its intention to buy MTS for $3.9 billion. MTS is Manitoba’s biggest communications company, but it’s dwarfed by Bell, which is Canada’s largest, operating across the country in the wireless, Internet, cable, telephone and broadcasting content businesses.

At the time, rumours swirled around Ottawa and the investment community that the deal would sail smoothly and swiftly to approval. After all, Bell had assured regulators it would take steps to preserve the competitive balance, and had promised the public it would invest in improving the quality and reach of Manitoba’s networks. MTS shareholders — who mainly reside out of province — were quick to signal their support for the deal in June, expecting windfall returns thanks to the hefty premium Bell was offering.

Not everyone was so enthusiastic when the transaction was announced. Consumers, public interest groups and academics were quick to poke holes in Bell’s paper-thin claims about the benefits of the takeover. MTS’s financial performance was not suffering as some claimed, but was on par with, or even better, than Bell’s (this continues to be true as of the companies’ third-quarter reports). Bell’s investment promises turned out to be only marginally larger than what MTS was already planning, and their promises to help rural Manitobans rang hollow in light of the scores of public complaints that Bell persistently ignores rural communities in its existing territory.

Perhaps the biggest sticking point with the deal is one promise on which Bell is sure to deliver: if approved, the prices Manitobans pay for wireless service and home Internet will go up — way up.

In provinces where there is no strong fourth provider challenging Bell, Rogers and Telus, prices for wireless service are 30 to 40 per cent higher than they are right now in Manitoba and unlimited home Internet comes with steep additional fees. For example, Bell charges from $15 to $30 for the "privilege" of unmetered access — a standard feature on MTS plans. With MTS gone, there will be nothing standing in the way of significant increases to Manitobans’ monthly communications bills, plain and simple.

These issues are just an inconvenience for Bell shareholders waiting to see a bump in their dividends. But they are serious concerns for Manitobans who depend on having access to affordable, high-quality communication services in their daily lives and to run their businesses.

So here we are, seven months after it was announced and the deal has yet to receive the necessary regulatory approvals. Its biggest boosters are wondering: what’s the holdup? Groups such as the Manitoba-based Public Interest Law Centre, the Consumers’ Association of Canada, the Public Interest Advocacy Centre in Ottawa, the Canadian Media Concentration Research Project, opposition members of the Manitoba legislature and, most importantly, members of the public have raised their concerns to the regulators, who are now keenly aware the takeover spells bad news for the people of Manitoba.

Given the government’s longstanding policy of promoting telecommunications competition in the public interest, the regulators charged with reviewing the transaction — the Competition Bureau and the federal Department of Innovation, Science, and Economic Development — cannot in good conscience approve the deal in its current form in the face of such opposition.

But while the rubber stamp may be gathering dust at the moment, Bell and MTS’s lobbyists have not been out of action — records show they have lobbied the federal government, including Manitoba MPs, federal cabinet ministers and the Prime Minister’s Office, more than 40 times combined since the takeover was announced. Pressure is quietly mounting in the halls of power to find a way to pass the deal — by hook or by crook. Although public-interest groups and consumers have stated their case, it becomes tougher for the regulators to stand up to the telco’s sustained and determined efforts with each passing moment.

That’s why it’s more important than ever that the voice of the public is heard before the takeover is approved on the basis of back room dealing. The Competition Bureau is still accepting comments from the public via its website, so members of the public who are worried about seeing steep increases in their monthly cellphone, television and Internet expenses as a result of the merger, should speak out before it’s too late.

It isn’t too late — but it will be soon, and once MTS is gone, it will be gone forever.

Benjamin Klass is presently pursuing a PhD at Carleton University. He will be speaking at the Millennium Library tonight.