Director Will Not Challenge Telus Corporation's Acquisition of Edmonton Telephone Corporation

OTTAWA, February 28, 1995 — George N. Addy, Director of Investigation and Research of the Bureau of Competition Policy, announced today that he will not challenge the acquisition by Telus Corporation (Telus) of Edmonton Telephone Corporation (ED TEL). Telus Corporation through its wholly owned subsidiary, AGT, provides telecommunications services throughout Alberta, except for local telephone service in the City of Edmonton provided by ED TEL.

The Director's decision follows an extensive examination of the likely competitive consequences of the acquisition. This transaction is occurring in an environment of rapid technological and regulatory change.

"In rapidly changing industries such as telecommunications, it is important to look forward, and consider if a transaction would likely prevent future competition that might otherwise come about as the result of technological change and innovation," Mr. Addy stated. "The impact of the merger on a potential prevention of competition was a significant factor in my examination of this matter."

The Director noted that the potential emergence of competitive alternatives, both from cable companies and from wireless technologies, such as cellular, Personal Communication Systems (PCS) and other developing technologies, was an important factor in his assessment of the long term competitive effects of the proposed transaction. The government is currently examining the regulatory framework with respect to these alternative and converging technologies, a process in which the Director is participating.

Given the impact of the emergence of competitive alternatives, Mr. Addy also considered the issue of access to communications space on hydro and telephone support structures. Open access and non-restrictive use of those support structures are important because they allow competing technologies, such as cable, to use the facilities they need to build a system capable of competing with the telephone companies. Telus has indicated to the Director that, between the closing of the transaction and the release of the CRTC's decision on access to support structures, it will permit coaxial and/or fibre optic networks owned by any other party to be placed in or on available space within support structures located anywhere in Alberta.

Section 97 of the Competition Act provides a three-year period, following the substantial completion of a transaction, in which the Director may bring the matter before the Competition Tribunal. Given the rapidly changing regulatory and technological environment, the Director intends to closely monitor the effects of this transaction including access to support structures during the three-year period set out in the Act. If the acquisition causes, or is likely to cause a substantial lessening or prevention of competition, the Director would take appropriate action at that time.

For more information, please contact:
Raymond Pierce
819-953-4308