Kincardine not backing down from Bruce Telecom sale

Section: 
News

By Barb McKay

 

Canada’s Competition Bureau has no authority to cancel the pending sale of Bruce Telecom to Eastlink, according to Kincardine’s mayor.

 

Larry Kraemer told The Independent that the federal body can have input on the transaction, but is not authorized to stop the sale of the telecommunications company to Eastlink. The Competition Bureau issued a media release Aug. 15 stating that after a review it determined that the sale of Bruce Telecom to Eastlink, owned by Bragg Communications, would result in higher prices and fewer services for consumers in the Paisley and Port Elgin areas where the two companies are the only telecommunication service providers.

 

Eastlink then announced that it was backing out of the agreement because of the Competition Bureau’s findings. Kincardine council held an emergency closed door meeting with its solicitors last Tuesday evening to discuss how to proceed. Kraemer said Kincardine received no formal written notification from Bragg Communications disclosing its intentions, which was a requirement of the agreement between the two parties.

 

Council passed three resolutions; the first to send a letter to Bragg Communications advising the company that “the municipality does not accept their purported termination of the asset purchase agreement for Bruce Telecom.” Staff informed local media last Wednesday that the municipality’s solicitor has advised them not publicly-disclose the contents of the letter.

 

A second resolution instructs the Bruce Telecom board of directors and management to continue to look at all options regarding the future of Bruce Telecom and report back to council. With the third resolution, council cancelled the special meeting scheduled for today.

 

Last Wednesday, Eastlink issued a statement to The Independent: “The purchase of Bruce Telecom by Eastlink did not receive required approvals by the Competition Bureau. As a result, Eastlink has withdrawn from the transaction. We remain fully committed to our Eastlink customers and operations in this region.”

 

“They are saying because the Competition Bureau won’t approve the transaction they are getting out of it,” Kraemer said. “But, in reality, the Competition Bureau doesn’t have the authority.”

 

The Bureau is an advisory body, he said, which makes recommendations to the Competition Tribunal. The tribunal can then proceed with a hearing if there are grounds for it.

 

raemer said the municipality is currently in a holding pattern until it receives a response from Bragg Communications.

 

“We’ll see,” he said. “Negotiation is the most likely outcome.”

 

When pressed for a reaction to the municipality’s stance, Eastlink representatives refused to comment.