Telus launches court challenge of 700 MHz auction ‘eligibility criteria’

Telus Corp. has launched a second court challenge of the industry minister’s authority to regulate the wireless industry, this time aiming at the minister’s ability to impose bidding restrictions for the upcoming 700 MHz spectrum auction, court records show. In an application filed with the Federal Court last week, Telus asked the court to prohibit the minister from using the “eligibility criteria” outlined in the government’s auction rules to limit Telus’ ability to obtain spectrum during the auction. The company argued that the Radiocommunication Act gives that authority to the federal cabinet, not the minister, and that regulations created by cabinet allow any Canadian company to obtain spectrum licences from Industry Canada, which leases those licences to companies and individuals. “The Minister has proposed to adopt eligibility criteria in addition to those prescribed in the Regulations,” Telus said in the Aug. 20 application. “The Minister has no authority to apply any criteria other than those prescribed in the Regulations, in the context of the forthcoming auction or otherwise, in determining the eligibility of the Applicant or other persons to be issued licences pursuant to the Act.” Telus and fellow incumbent wireless carriers BCE Inc. and Rogers Communications Inc. have launched campaigns in recent weeks that aim to change Industry Canada auction rules that limit them to a single block of “prime” spectrum in the upcoming 700 MHz spectrum auction, while allowing other players to acquire two out of four prime blocks in each region of the country. Those rules, now the target of the Telus application, were announced by then-industry minister Christian Paradis in March 2012 and have come under particular scrutiny since the Globe and Mail reported in June that U.S. wireless giant Verizon Communications Inc. is mulling an entry to the Canadian market. Telus’ challenge argues that the Radiocommunication Act requires the minister to abide by cabinet’s regulations. Those are set out in the Radiocommunication Regulations, including section 9(1), which states that any “corporation that is incorporated or continued under the laws of Canada or a province” is eligible to receive spectrum licences. Section 5(1) of that act allows the minister to issue spectrum licences “ubject to any regulations” imposed by cabinet, and “taking into account all matters that the Minister considers relevant for ensuring the orderly establishment or modification of radio stations and the orderly development and efficient operation of radiocommunication in Canada.” Telus argued in its challenge that efforts by the minister to impose additional criteria determining who can bid on which spectrum blocks is “unlawful” and asked for a court order declaring that the minister has no authority to do so. It also asked the court to declare that Telus is eligible to be issued spectrum licences “without regard” to the auction rules. Paradis said in March that the auction rules and other government policies that could limit the incumbents’ ability to acquire spectrum are designed to encourage the presence of a fourth wireless player to compete against the incumbents in each region of the country. Telus also launched last month a separate legal challenge of the minister’s authority to impose some of those rules, requesting a judicial review of new spectrum transfer rules that Industry Canada finalized in June. Ted Woodhead, Telus’ senior vice-president of government and regulatory affairs, told The Wire Report at the time that the aim behind that challenge was to ensure the government is following the proper process in establishing wireless spectrum policy. Telus spokesman Shawn Hall said in an emailed statement Friday that the new challenge is “seeking clarity” on the minister’s jurisdiction “to unilaterally establish rules concerning wireless service.” “In this new application, we are asking the Court to determine whether it is lawful for the Industry Minister to single-handedly establish a new eligibility criterion for the issuance of spectrum licenses—something he did when he determined that a ‘large wireless service provider,’ such as TELUS, will not be issued a licence for more than one prime block of 700 MHz spectrum in the upcoming auction while other competitors are eligible for two prime blocks,” Hall said. “Under the Radiocommunication Act, the power to establish new criteria for issuing spectrum licenses belongs exclusively to the ." Current Industry Minister James Moore, who took over the portfolio from Paradis in July as part of a larger cabinet shuffle, has said the policies are designed to encourage competition that will benefit Canadian consumers, and that the government will not change the rules for the auction, which is scheduled to start in January. “Our policies put consumers first, and will continue to move forward with our agenda,” Moore’s spokeswoman Jessica Fletcher said in an emailed statement Friday in response to a request for comment on the latest Telus court application. —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telus launches court challenge of 700 MHz auction ‘eligibility criteria’

News | August 30, 2013

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Telus launches court challenge of 700 MHz auction ‘eligibility criteria’

News | August 30, 2013

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