Telus Wants Special Treatment to Build Rural Networks

by Jordan Richardson on April 7, 2011

The major telecommunications providers in Canada have often treated the rural areas like special projects. While there are some logistical reasons behind this, customers in these areas have got to feel more than a little neglected as major roll-outs and network upgrades impact urban centres consistently often without so much as a whiff of new technology heading out into the so-called boonies.

The problem gets compounded when the carriers suggest that they’ll do a few network upgrades in rural areas but announce conditions in order to make the upgrades a reality.

So here’s Telus using its “pledge” to build a new and faster mobile broadband network across urban Canada as a bargaining chip. The rub is that Telus is essentially suggesting that they won’t extend this beautiful LTE network to rural areas unless they get special treatment at the upcoming 2012 spectrum auction.

Telus wants the precious 700 megahertz frequency spectrum in exchange for building the network to rural areas. The use of the spectrum does make it easier to run networks across more remote areas because the signals are stronger and, as a result, less towers are needed to achieve connectivity. Telus says that its level of expertise in “deploying to rural areas” lends it credibility and, as such, they should have a virtually open lane to the spectrum.

They’re asking that newcomers, companies like WIND Mobile and Public Mobile, be stripped of their “advantage” in terms of obtaining the high quality spectrum. Of particular discomfort for Telus is the fact that companies like Shaw and Videotron obtained licenses at the last auction that were subsidized. Telus, as you might expect, wants the “free market” to sort things out.

“From a public-policy perspective, should one be subsidizing cable companies?” asks Telus CFO Bob McFarlane. “And if you’re subsidizing cable companies to get into wireless, why not subsidize wireless companies to get into cable? I think you should subsidize neither and let the market prevail.”

Telus is no stranger to calling to end subsidies that don’t benefit their motivations. Back in November of 2010, they joined the other big telecom companies in trashing the so-called “rural subsidies” that keep phone rates lower in remote communities. Telus was perturbed that they had to pay 0.84 percent of revenues into the National Contribution Fund.

Now, Telus wants to end all similar subsidies that give competition “special treatment.” In the same breath, they want to be assured access to the spectrum and they want to continue to sit on the spectrum licenses they already have. Indeed, the new companies have accused the incumbents of “spectrum squatting.”

A Seaboard Group report confirms this notion, stating that the Big Three already have much more wireless spectrum per subscriber than any of their global counterparts. Because of this dominant position, some argue that “preferential treatment” in terms of new carriers is a requirement to achieving fairness and competition in the Canadian telecommunications marketplace. And predictably, Telus and its large pals argue that it is they who deserve preference because of their established presence in the industry.

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Written by: Jordan Richardson. Follow by: RSS, Twitter, Facebook, or YouTube.

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