Wireless Carriers Oppose Ottawa’s Desire to Regulate Spectrum License Transfers

Earlier in March, the Minister of Industry Christian Paradis announced plans by Ottawa to further increase wireless competition to help Canadians gain better prices and services. Part of this plan was a declaration by the Federal Government to “promote at least four wireless providers in every region of the country.”

Other plans included reviewing the policy on spectrum transfer requests, for the sake of promoting a competitive environment. This seemingly came about after Rogers and Shaw announced a $700 million cable deal that included a $50 million option to have the former acquire the latter’s unused AWS spectrum in 2014. Some consumer advocates have noted the move circumvents a ban put in place by Ottawa which prevents incumbents from acquiring spectrum from newer wireless entrants until 2014.

The Globe and Mail reports our wireless carriers have voiced opposition to Ottawa’s plan to get involved and regulate the transfer of spectrum licenses between telcos, in particular from newer wireless entrants. Carriers have voiced new rules could create investment uncertainty as numerous companies are set to raise capital to bid on the upcoming 700MHz auction, set to start in November of this year.

Mobilicity argued “wireless competition is on life support” and noted Ottawa should give newer carriers more leeway to pay for their previous and future spectrum:

“Mobilicity respectfully submits that the very announcement of this consultation with respect to license transferability a few weeks ago has already further impinged access to capital for new entrants,”


“Ironically, this announcement has created a level of uncertainty and confusion in the minds of investors as to the liquidity of spectrum assets which in particular affects new entrants far more than incumbents and further hampers their ability to create a competitive marketplace – the very thing the Department has suggested it wants to enhance.”

WIND Mobile (which is currently up for sale) wants Ottawa to give priority to new entrants when it comes to bidding for new spectrum, citing “the Canadian market is a highly-concentrated oligopolistic market consisting primarily of the three Incumbents.”

As for our incumbents? They want less interference from Ottawa in the wireless industry with Bell saying we already have a competitive market:

“The Department needs to resist micromanaging the wireless industry in order to address the inaccurate claims by some that the industry is not competitive enough,” said BCE Inc. in its submission.

“The reality is that Canada has an intensely competitive market in which competitors gain and lose ground in each business cycle.”

Bell also said Ottawa’s consultation is redundant as the Industry Minister and Competition Bureau are already required to review any spectrum transfers. The company said instead of an “intrusive” government policy market forces should determine the number of carriers.

Rogers said Ottawa should not alter the original terms of existing spectrum licenses:

“It was in part on the basis of these rights that bidders in the AWS auction (as well as other spectrum auctions) valued the spectrum and formulated their bidding strategy. This provision contributed to the $4.2-billion raised in the AWS auction,” Rogers said.

“Changing this key attribute of AWS spectrum involves changing the rights of bidders in that auction after the fact – a change that flies in the face of the principles of contractual certainty that the Department strives to attain in its spectrum auctions.”

TELUS also opposed conditions on the transfers of wireless licenses, saying they were unnecessary:

“Telus views these proposals as unnecessary,” the carrier said, adding that preliminary assessments were “impractical” since it is not clear at what stage of negotiations companies would be obliged to notify the government of a potential deal.

What do you think? Should Ottawa get involved when it comes to the transfer of wireless spectrum from newer entrants?

[via Globe and Mail]