Rogers sues to block Shaw's Ontario cable buy

Canada's biggest cable company is suing its largest rival in a bid to block its attempt to move into what it deems its home turf.

At a hearing in Toronto on Wednesday, Toronto-based Rogers Communications Inc. asked a judge to put a stop to Calgary-based Shaw Communications Inc.'s purchase of Hamilton-based Mountain Cablevision Ltd.

In July, Mountain Cable agreed to sell its cable television operations to an affiliate of Shaw, subject to approval by the Canadian Radio-television and Telecommunications Commission. Details of the sale were not revealed, but the price tag is believed to be roughly $300 million.

Rogers sees that as an encroachment on its business, and is seeking to stop the sale.

For most of the last decade, Rogers and Shaw have effectively agreed to divide the country in half, with Rogers being the dominant cable provider from Ontario east, and Shaw the largest seller west of Ontario.

Published reports suggest the dispute over Mountain Cablevision might just be the first battle in a war between the two as Shaw moves into Eastern Canada.

"Mountain isn't a one-off deal," Bloomberg News quoted Rogers lawyer Tim Pinos as saying. "Shaw intends to acquire further assets in eastern Canada."

The report claims Shaw has rejected any deal restricting either company to a geographical area as illegal and unenforceable because it unfairly restricts competition.

New fronts

The legal action is the latest in a line of escalating brinksmanship between Canada's communications firms, who are finding themselves competing in new sectors against new entrants across the country.

Officials at Rogers and Mountain Cablevision both declined comment when approached by CBC News.

"The judge has promised to rule on this expeditiously, so I don't want to make any comment that might impact that decision either negatively or positively," Shaw president Peter Bissonnette said.

Mountain Cablevision services more than 40,000 households with television service, and has nearly 30,000 internet and telephone customers.