New report calls for foreign ownership ban to end completely

by Andrew Roach on August 27, 2013

The federal government has opened up the wireless market considerably during the last 12 months as they’ve made a complete U-turn and welcomed foreign firms into the national market.

Verizon have been looking likely to become the first new firm from overseas to enter the wireless sector although this has been met with fierce opposition from those involved in the industry.

But a new report from The Fraser Institute has called on the government to scrap limits within the industry completely allowing for an even playing field among both national and international carriers.

The report suggested that foreign firms should be given as much freedom as national companies who are already established within the industry. div style=”float: right”>

One thing that The Fraser Institute touched upon was that small firms could become significant beneficiaries if the limits were lifted completely as it would allow them to be owned by a stable and established backer.

Small firms such as Wind Mobile and Mobilicity have struggled to stay afloat over the past couple of years but foreign investors have been reluctant to purchase the companies due to the limits imposed on them.

If they were to be lifted, it could mean that a bidding war against any of the Big Three would take place with more reasonable bids appearing that could support the struggling networks for years to come.

But the report called for a complete level playing field with the Big Three networks of Bell, Rogers and Telus also being given freedom and not being penalised for their past success.

At the moment, the top three national companies have been limited to the spectrum that they will be able to purchase in the next auction in January.

But these limits could actually make the situation worse for consumers who may find themselves paying higher prices with firms looking to get their own share of the wireless sector. These fears were underlined by one of the report’s authors, Steven Globerman, who told CBC: “By setting up rules that handicap the three large Canadian telecoms and favour small or new players in the marketplace, the federal government is effectively subsidizing new entrants and promoting inefficient competition. This could make most consumers worse off, rather than better off.”

It’s a view that has been echoed by many of Canada’s telecom providers who want equality for themselves in the sector.
This was underlined in comments made by Telus spokesman Shawn Hill who told the press: “It would open up Canada to real competition. Bring it on, [so long as it is] on a level playing field.”

With The Fraser Institute’s report becoming yet another source for action to be taken, it might not be too long before we see the federal government take action to silence the critics on both sides once and for all.

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Written by: Andrew Roach Follow by: RSS, Twitter, Facebook, or YouTube

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