Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Eastlink, Bruce Telecom to abandon merger: Canada Competition Bureau, (Aug 15, 2014)

The Canada Competition Bureau announced today that, following a review by its Mergers Branch, Bragg Communications Inc. (Eastlink) and Bruce Telecom have terminated their previously-announced agreement in which Eastlink would acquire Bruce Telecom. Both companies are facilities-based providers of telecommunications services, including wireline telephone, broadband Internet, and television, within Bruce County, Ontario.

The Bureau's review concluded that, had Eastlink’s acquisition of Bruce Telecom gone forward as proposed, it would have likely resulted in a substantial lessening or prevention of competition in the towns of Port Elgin and Paisley, where the two firms are the only providers of wireline telecommunications services. The parties ultimately decided to abandon the proposed transaction.

Eastlink currently owns and operates more than 500 cable systems across Canada. Within Telecom’s incumbency area, Eastlink owns and operates the cable systems in the towns of Port Elgin and Paisley, through which it currently offers wireline phone, television, and broadband Internet services in direct competition with Bruce Telecom.

Bruce Telecom is the incumbent telecommunications company for a large portion of Bruce County and is owned by the Municipality of Kincardine. In operation for more than 100 years, it currently offers wireline phone, television, and broadband Internet services across its incumbency area, which covers the towns of Kincardine, Tiverton, Port Elgin, and Paisley, in addition to their surrounding rural areas.

"Our review concluded that Eastlink’s acquisition of Bruce Telecom would have likely resulted in higher prices and fewer choices for the supply of telecommunications services to the residents of the towns of Port Elgin and Paisley,” said John Pecman, Commissioner of Competition. “In the absence of the dynamic rivalry that exists between Eastlink and Bruce Telecom, customers would also have been deprived of the benefits of innovation in their telecommunications services."

News: Antitrust