Wind Mobile calls for ‘right of first offer’ for new entrants on spectrum transfers

Industry Canada should introduce regulations on spectrum licence transfers that give small wireless players first right to purchase the spectrum, Wind Mobile said in a regulatory filing with the department. The policy would mean that when spectrum licences are available for purchase from another carrier, new entrant wireless carriers would be given a right to match an offer made by an incumbent for the spectrum. Wind and other carriers filed their comments with Industry Canada Wednesday for a departmental consultation on how and when it should review and regulate the sale of spectrum licences between carriers. New rules on spectrum transfers will be issued before an auction of 700 MHz spectrum starting Nov. 19, and are expected to apply to Rogers Communications Inc.'s proposed purchase of AWS spectrum from Shaw Communications Inc. as well as a possible sale of Wind Mobile as parent company VimpelCom Ltd. accepts offers for the Canadian mobile operator. The Conservative government says it wants enough spectrum allocated to new entrant or regional wireless players to ensure a fourth carrier in every market, where they would compete with national incumbents Rogers, BCE Inc., and Telus Corp. Wind said in its filing with Industry Canada that the government should require that “the transferor of the spectrum must first give non-Incumbents a right of first offer to purchase such spectrum, provided such right of offer be limited in time and subject to evidence of bone fide credentials of the bidding transferee.” The company said the evaluation of spectrum licence transfers should also be limited to the presence of a fourth operator in the relevant licence area, including third-party mobile virtual network operators (MVNOs), or wireless providers that do not own the network or spectrum they operate on. That would cover most markets in Canada. Rogers said in its filing with the department that the Canadian wireless market is competitive and that “there is no need for the competition assessment and spectrum concentration analysis” proposed by the department. “he Competition Bureau already performs a competition assessment when it responds to mandatory notifications regarding the proposed sale of spectrum licences,” Rogers said, a point also made by BCE subsidiary Bell Mobility Inc. in its submission. Bell wrote that the Radiocommunication Act already requires ministerial approval of every transfer. “Bell Mobility respectfully submits that adding additional layers of review, as proposed in the Notice, will only serve to increase investment uncertainty, and add delay to the efficient use of limited spectrum resources,” the submission said. Bell said the department’s proposals for reviews run counter to the advice of domestic and international spectrum management experts that have said markets are the “most efficient arbiter” for the best use of scarce spectrum resources. “Consequently, if the reason this policy and process is being initiated is to guarantee 4 players in every market, Bell Mobility considers that this is the wrong reason to insert a more intrusive policy into the market,” Bell said. New entrant Public Mobile Inc. said in its submission to the department that detailed, departmental reviews of transfers should only apply to companies that hold more than a quarter of the spectrum in the market where it is being acquired. That detailed review, Public Mobile said, should prevent wireless market consolidation and encourage competition. “Public Mobile believes that the thresholds that trigger a detailed review of a spectrum licence transfer should be clear, simple and non-negotiable,” the company said. Spectrum licence transfer reviews should also apply to option agreements, the company said. Rogers' deal with Shaw includes an option agreement to buy the spectrum licences after a moratorium on transferring it to incumbents expires in September 2014. The licences were originally purchased as “set aside” spectrum for new entrants in the 2008 wireless auction. Rogers would purchase the spectrum for $325 million to $350 million, including $50 million for the option. Telus, in its submission, said it “strongly supports” more clarity for all spectrum licencees. “In general, TELUS supports the proposed framework because the Department recognizes that while all transfers require Department approval, only some will require a detailed review,” Telus said. The Industry Department has proposed a two-tiered review process for spectrum sales and transfers, which includes a four-week “summary” review of simple transfers that would have minimal market impact and a 20-week "detailed" review of more complicated sales or transfers. “This allows for rapid approval of transfer of spectrum licences that will have little, if any, anti-competitive effects, meaning the benefits of efficient and effective spectrum utilization can be brought to the marketplace quicker,” Telus said. The company said it understands that the department must scrutinize spectrum transfers to support facilities-based wireless competition and avoid transactions that could cause excess spectrum concentration with some companies. Quebecor Media Inc. said in its filing with the department that it is concerned that the department's proposals would result in a “complex, discretionary and opaque” spectrum transfer review process, creating uncertainty for mobile operators and investors. Quebecor said the department’s existing policy measures are efficient, based on market conditions, technology trends “and spectrum requirements of different carrier classes.” —With reporting by Danika Grenier at dgrenier@thewirereport.ca and reporting and editing by Simon Doyle at sdoyle@thewirereport.ca

Wind Mobile calls for ‘right of first offer’ for new entrants on spectrum transfers

News | April 3, 2013

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