Canadian Court Rejects Telus Challenge of Ottawa’s Wireless Policy

by Istvan Fekete on December 8, 2014

A Canadian court has blown the last chance of a Mobilicity–Telus deal: It has dismissed the incumbent’s high-profile legal challenge against the government’s wireless policies, reports Rita Trituchur for the Wall Street Journal.

You may recall that Telus had made numerous attempts to acquire the wireless startup since 2013, to gain access to Mobilicity’s wireless spectrum, due to the high demand on its mobile network. However, you may also recall that the government has been vocal about such deals, claiming it would diminish competition by driving up telecom bills.

As a result, Telus’s two attempts to take over Mobilicity were both rejected publicly, and the incumbent chose to withdraw its third bid for “unspecified” reasons. (Voices whispered, however, that Telus’ withdrawal was affected by a private government message to the carrier: If it didn’t stop the circus, it wouldn’t allow it to bid on spectrum in 2015. Let’s not forget that there will be two spectrum auctions: one for the AWS-3 spectrum and another for the 2.5 GHz spectrum.)

Originally, the government said wireless spectrum acquired by small carriers at the 2008 auction could be acquired by incumbents after five years. In 2013, though, the government tweaked the rules to prevent such transactions on an indefinite basis, and by doing so blocked Telus’ plans of acquiring Mobilicity.

The government was satisfied with the ruling: “We have always been clear in our policies that we would not approve spectrum transfer requests that decrease competition in the wireless sector,” a government spokesman said. He added the government doesn’t publicly comment on private business transactions but said “the court ruling speaks for itself.”

Ottawa is committed to bringing at least four carriers to every regional market in Canada in order to foster more competition and lower prices.

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