Moore meets with telcos, stands by 700 MHz auction timeline

Industry Minister James Moore's office said the government is moving ahead with its planned spectrum auction in January as the minister held meetings with telecommunications companies on Monday. Moore, who was appointed to head the Industry portfolio this month, set aside six hours, from 9 a.m. to 3 p.m., for half-hour meetings with wireless companies that included BCE Inc., Telus Corp., Rogers Communications Inc., and Wind Mobile (controlled by Globalive Wireless Management Corp.), said people familiar with the meetings on a background basis Monday. They said the minister held the meetings as introductory discussions with telecom stakeholders, as newly appointed ministers often do, and not necessarily in response to pressure from the incumbents to change the auction rules. “I don't think there's any real mystery as to the topic of conversation with the incumbents right now,” one of the people said. Last week, incumbents BCE, Telus, and Rogers launched advertising and public relations campaigns aimed at changing the government's wireless policy, which is designed to create favourable conditions for new market entrants. The incumbents say the rules for the upcoming 700 MHz auction create an unfair playing field because U.S. telecom giant Verizon Communications Inc., which is considering a Canadian market entry, could purchase twice as much spectrum as Rogers, BCE, or Telus. In response to a question from The Wire Report Monday about whether the government is considering changes to its auction policy, Sébastien Gariépy, a spokesman for Minister Moore, said in an emailed response: “The policy has been announced and we are moving forward with the spectrum auction (as announced by Minister Paradis on June 4th, 2013).” Gariépy was referring to an announcement by former industry minister Christian Paradis in June, in which the government said initial applications and deposits to participate in the auction are due Sept. 17 and the bidding for spectrum licences will start Jan. 14, 2014. Industry sources told The Wire Report last week that changing the auction rules, which were finalized last year following a public process managed by Industry Canada, would most likely require a delay of the auction and another consultation. Companies and groups are coming out in favour of Bell, Telus and Rogers’ position on the issue while fewer voices, at least publicly, appear to be standing up for the government's policy. One of Canada's largest business associations, the Canadian Council of Chief Executives (CCCE), issued a letter to Prime Minister Stephen Harper last week in support of the incumbents. John Manley, head of CCCE, said in the letter, dated July 26, that foreign companies should be required to enter the spectrum auction under the same rules as Canadian companies. “Domestic and foreign companies should have equal access to bid on scarce wireless spectrum. (We note that an open, competitive auction that does not favour foreign operators would likely have the added benefit of increasing government revenues),” said Manley, a former Liberal cabinet minister who is currently on Telus' board of directors. Manley repeated the incumbents' arguments, writing that domestic and foreign companies should have the same opportunity to pursue acquisitions of smaller telecommunications companies in Canada. The incumbents are barred from purchasing spectrum assets that were set aside for new market entrants during a 2008 wireless auction. Those wireless licences have five-year moratoriums on transfers to the incumbents. The Communications, Energy and Paperworkers Union of Canada, which has 110,000 members in the forestry, energy, telecommunications and media sectors, said in a release Monday that it “stridently opposes” giving advantages to Verizon. “In its ideological crusade to open the telecommunications sector up to foreign ownership the Conservatives are ‘gaming the rules’ in favour of a major US-based multinational,” CEP president Dave Coles said in a statement. Following the incumbents' editorial board meetings last week with The Toronto Star and The Globe and Mail, those newspapers ran editorials Monday that also supported the position of the incumbents. The Globe and Mail said in an editorial published Sunday that “the terms and conduct of an auction should be fair and consistent, especially when the auctioneer is the federal government, acting on behalf of the people of Canada.” The Globe added: “Sept. 17 is the day by which bidders are required to make deposits. That time should be extended, and so should the auction day itself. Summer is here, and many Canadians are on holiday, but Mr. Moore should make a decision not later than the end of autumn. All bidders should be equally free to bid on one or two blocks.” The Toronto Star, in an editorial published Monday, wrote that “he Big Three may not make very sympathetic victims. But they make a good point about a federal policy that, in the laudable name of fostering greater competition, appears to be opening the door for the U.S. giant Verizon Communications Inc. to enter the Canadian market with a big advantage over the established companies.” Wind Mobile chief executive Tony Lacavera, in an interview with The Globe and Mail Friday, challenged the incumbents’ arguments, and said policies are needed to encourage more competition. “A U.S. major assessing the market is clear evidence that the government policy to foster more competition in wireless is working,” Lacavera told the Globe. “And the frantic reaction from all three incumbents is all the evidence one should need to assess the need for more competition to disrupt the entrenched and cozy oligopoly.” The Conservative government has committed to increasing competition in the industry by ensuring a fourth, competing provider in each region of the country, and says it is acting in the interests of consumers. In a message on his Facebook page this month, Prime Minister Harper urged people to sign a Conservative party petition if they support the government's wireless policy and “if you believe Canadians will benefit from more choice and greater competition among wireless providers.” —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Moore meets with telcos, stands by 700 MHz auction timeline

News | July 29, 2013

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Moore meets with telcos, stands by 700 MHz auction timeline

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