Despite High Pressure From Incumbents, Ottawa Won’t Change Wireless Policy

by Istvan Fekete on July 30, 2013

Since the rumours of a powerful new entrant Verizon hit media outlets, the Canadian wireless market has been on fire. Mobile subscribers have expressed their hope for a change due to a fourth viable player, while on the business side, incumbents are outraged that if it does decide to enter the market, Verizon would have the rights of a new entrant (which is pretty logical, since it would indeed be a new entry).

Ottawa has been the target of an aggressive and co-ordinated public campaign initiated by the incumbents, demanding a change in its wireless policy. The policy, which was drafted last March and finalized a year later in March 2013, allows new entrants to bid for two blocks of spectrum in the forthcoming 700 MHz wireless spectrum auction.

If a viable fourth player enters the playground, one of the big three will remain without the valuable block of spectrum. This explains their outrage: none of them is willing to outbid another, since this would mean more money out of their pockets, while Verizon could easily secure two blocks, as the wireless policy favours the company, which would start with a market share below 10%. It could also allow the incumbents to bid on that spectrum, but it has the right to bid on the second block of spectrum first, which obviously raises the price.

The orchestrated campaign used multiple media tools: statements from Telus, Rogers, Bell CEOs, an open letter to Canadians to save the incumbents from being swallowed by a powerful US carrier, and most recently 150 leading Canadian executives have written a letter directly to Prime Minister Stephen Harper and tried to convince him about how unfair the government’s rules for the forthcoming spectrum auction are.

Wind Mobile CEO, Anthony Lacavera has added his voice to the media outrage, cooling down the spirits. He said the incumbents’ call for a level playing field (stressed by each of the big three) is disingenuous, as they have received enormous gifts of spectrum over the last 30 years. Incumbents control about 85% of the existing available wireless spectrum.

While Mr. Moore didn’t comment on the incumbents’ request, Industry Canada spokesman Sébastien Gariépy told the Financial Post that Mr. Moore has begun conducting half-hour meetings with officials from the incumbents and new entrants. Furthermore, he stressed the government’s point of view: “The policy has been announced, and we are moving forward with the spectrum auction.”

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

{ 1 comment… read it below or add one }

Dave Wilding July 30, 2013 at 8:45 am

Sounds like the big three are quick to play unfair with Canadian consumers, but can’t take it when they are on the receiving end of getting screwed.

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