Mobilicity Pitches For U.S.-style ‘Spectrum Screen’

by Gaurav Kheterpal on March 7, 2012

If you think you’ve seen it all, then you need to check out the The Great Canadian Wireless Spectrum Auction Circus, which, by the way, is now in full swing. Last November, Wind Mobile set the ball rolling by threatening to pull out of the upcoming auction unless Ottawa sets some aside for new competitors and clarifies foreign ownership rules.

In January, OpenMedia launched the “Stop the Cell Phone Squeeze” campaign stating that the incumbents will be using their financial clout to muscle out smaller carriers, rendering the auction far from fair. Last month, Public Mobile threatened to boycott the auction unless it has a fair chance of winning spectrum.

On one hand, the Big Three have been united as the incumbents. Of the ‘Small Three’, Wind Mobile and Public Mobile have officially stated their intent to join the rebel gang. Therefore, the onus was on Mobilicity to clear its stand on the upcoming spectrum auction. And yesterday, the upstart discount carrier disclosed that its Executive Chairman John Bitove sent Ottawa a letter in support of a ‘Spectrum Screen’ similar to that used in the US to successfully limit carrier holdings and prevent hoarding and monopolies.

Given the questionable balance of the US spectrum auction model, is ‘Spectrum Screen’ a one-stop solution for Canada’s spectrum auction blues? I’m not so sure.

With his long-standing connections to the Conservative Party, Bitove is considered a seasoned deal-maker with the Harper government. In his letter, Bitove blames Canada’s Big 3 carriers’ excessive spectrum ownership as the root cause for the “decades of lack of competition and the free spectrum that were gifted to the incumbent carriers back in the 1980s.” He quotes the FCC’s recent use of a Spectrum Screen to help block the proposed AT&T/T-Mobile merger out of fear that one carrier would hold too much spectrum.

In his letter, Bitove also enlightens on the subtle differences between a Spectrum Screen, which ensures a carrier’s holdings do not exceed a predefined threshold, and an auction “cap”, which specifies how much spectrum a carrier can purchase in a single auction. While he has a valid point, I strongly believe the Spectrum Screen isn’t a one size fits all solution to the problem at hand. As my fellow blogger Matt Klassen explained

“In regards to increasing competition and spurring the market forward, the limited auction was a resounding success, a template that countries around the world subsequently used to create their own competitive wireless markets. Now, however, things have changed, and (like every other debate in America) these new spectrum auctions have quickly become a distinctly partisan issue.”

Of course, the other largely ignored perspective is to realize the value of spectrum as a natural resource and for the government to manage it like any other non-renewable resource in our respective countries, demanding that companies learn how to use the spectrum they have responsibly and doll out new spectrum in a way that benefits everyone, not just the big wireless carriers.

All in all, there’s no denying that the upcoming spectrum auction is a complex issue and it’s easier said than done to find a please-all solution. If you have one in mind, please let us know.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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