Groups Seek to Block Rogers–Shaw Spectrum Deal, Citing Less Competition

by Istvan Fekete on January 23, 2013

Turns out the Rogers–Shaw spectrum deal’s reception isn’t as positive as the participating parties initially thought. Consumer groups and smaller rivals are warning that this could trigger the return of high prices for cellphone services as Rogers and Shaw exchange cash for the wireless spectrum.

The deal comes just as consumers are finally beginning to benefit from competition and see some real options in the cellphone market.

Four consumer activist groups and the PIAC (Public Interest Advocacy Centre) contacted the federal Industry Minister to block “crucial components” of the $700 million deal which, they say, will harm wireless competition in Western Canada if it goes through.

As John Lawford, executive director and general counsel for PIAC, has pointed out, consumers have just started to enjoy the benefits of wireless competition and have some real choices in the cellphone market. With Rogers buying Shaw’s spectrum, it would mean the return of the Big 3 (Rogers,Telus and Bell), and represent a step backwards.

About a week ago, Rogers broke the news by officially announcing that it has entered into an agreement with Shaw to purchase the Calgary-based company’s wireless spectrum as soon as the federal moratorium is lifted in September, 2014. Shaw retains key airwave bands over British Columbia, Alberta and parts of Saskatchewan and Manitoba. With AWS bands in its portfolio, Rogers has the green light to increase capacity and support more mobile broadband traffic.

PIAC and consumer groups opposing the Rogers–Shaw deal say the “optional” spectrum deal violates Industry Canada’s policy set out in 2008, which laid the ground for competition in the Canadian wireless industry. To enable competition, Ottawa set aside airwaves for new providers during the last spectrum auction of 2008.

Despite acquiring spectrum, Shaw dumped its wireless ambitions back in 2011, and the Rogers deal means the end of a bumpy road in the hunt for market share in the $19 billion market, as it has been seeking to sell its spectrum for a while now.

In a desperate move to increase its subscriber base, the Calgary Herald notes that smaller competitors such as WIND Mobile also attempted to strike a deal with Shaw. But now that the offer is binding, Shaw cannot accept any other bid.

Now, if we add the rumours of VimpelCom considering the sale of WIND Mobile — the first foreign-owned wireless operator — the Canadian mobile market now shows the government’s years of effort trying to encourage competition were to no avail.

Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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