Industry Canada lobbied AT&T, too

It will go down in history as the great telecom lobby of 2013. BCE Inc., Rogers Communications Inc. and Telus Corp. lobbied Industry Canada to change the spectrum auction rules favouring a foreign entrant, while Industry Canada lobbied for U.S. telecom giants to come into Canada. Lobbying works two ways. Usually it’s the companies doing the bidding, while the government twiddles its thumbs, thinking, “What have you done for me lately?” In other circumstances, the government will meet with a company and say, “So, what can we do for you?” Verizon Communications Inc. wasn’t the only large U.S. wireless provider to have talks with the Industry Department about a possible expansion into Canada. Last year, while the Big Three incumbent telcos rattled Ottawa’s cage with an advertising and public relations blitz, Industry Canada met with U.S. telecom giant Verizon as well as AT&T Inc. Verizon’s consultant lobbyist, Peter Burn of Dentons Canada, filed two lobbying communications reports on behalf of the U.S. company, both on Nov. 8, 2013. They were with Industry Canada deputy minister John Knubley, as well as two assistant deputy ministers, Iain Stewart and Mitch Davies. The other report indicates the company contacted James Maunder, chief of staff to Industry Minister James Moore; Phil Harwood, a policy adviser in the PMO; and James Nicholson, director of policy in Moore’s office. According to Industry Canada documents, newly released under the Access to Information Act, departmental officials met with Eric Loeb, AT&T’s vice-president of external affairs, and some other AT&T officials, in May 2013 to discuss the company’s interests in Canada. It’s difficult to tell how well, or poorly, those meetings went for the government. Neither Verizon nor AT&T entered the department’s spectrum auction for valuable 700 MHz spectrum licences, which wrapped up this year. Analysts agree the companies would have needed licences from that spectrum auction to launch competitive retail wireless services in Canada. The Harper government has been actively trying to encourage more competition in Canada’s wireless market, and made some targeted regulatory measures to encourage a foreign entrant. The government relaxed the telecom ownership rules, allowing foreign companies to own telecom assets in Canada provided they enter with less than 10 per cent of the national market share. It also introduced rules for the 700 MHz spectrum auction, capping the number of licences the big players could buy and effectively reserving some for small or new players. Former industry minister Christian Paradis, during a trip to the World Mobile Congress in Barcelona, Spain, in February 2013, met with global telecom companies, trying to gauge their interest in expanding to Canada. “Let’s hope by the end of this event we can entice some of those international players to become Canadian players as well,” Paradis said at the time. You might call it lobbying, or courting. That’s what Rogers Communications vice-chair Phil Lind called it last summer when, in the midst of the incumbents’ campaign against what they called unfair telecom regulations, he said Canadian government officials travelled to Verizon’s home base in New York to urge the company to expand to Canada. As a result, Lind said, Verizon was considering its options. “Without favours, we know they would not be coming,” Lind told the Toronto Star, referring to the American telecom company, which has more than 100 million subscribers in the United States. AT&T, also a giant, has about 110 million subscribers, and if Industry Canada’s meeting with the company last year was departmental lobbying, it didn’t appear to have a terrific outcome. An Industry Canada memo released under the Access to Information Act, dated May 10, 2013, noted some key “take-aways” from the meeting, the first one being that AT&T was “focussed on corporate, not retail, in Canada.” The memo, written by Industry Department senior director Christopher Johnstone, said AT&T can “lease spectrum licences” from the large companies “to serve industrial clients in a local area.” It said AT&T expressed an interest in providing machine-to-machine mobile connections, for devices like meters, vehicles, shipment tracking and other machines, to corporate clients. The company also had at least one national deal with General Motors Corp. to provide mobile services for connected vehicles, probably “starting in the 2015 vehicle year,” the memo said. There’s nothing to indicate AT&T was interested in competing in retail mobile services in Canada. At the meeting, Industry Canada also raised the possibility of AT&T’s participation in the upcoming 700 MHz spectrum auction, though the sentence following that line — presumably containing information about AT&T’s response — is blacked out. So we don’t know whether AT&T nodded, winked, shrugged or, more likely, provided some kind of non-response. AT&T was curious about something. The company requested the meeting, according to the documents, to discuss foreign investment, cross-border spectrum management and other issues. If there was one glimmer of hope, according to what’s disclosed in the memo, AT&T said it was “very pleased” with the government’s relaxation of the telecom foreign ownership rules. The lines following that are blacked out. Surely, the possibility of an AT&T expansion into Canada’s retail wireless services market was discussed. A pre-meeting briefing note suggested some speaking points for the department officials, one of them being: “Now that these restrictions have been lifted, do you have any future plans for expansion in the Canadian market?” As if it was necessary to dash any optimism within Industry Canada, AT&T’s followup with the department wasn’t very encouraging. Denise Bozza, director of international external affairs with AT&T, wrote a post-meeting email, dated May 8, 2103, to Industry Canada officials, Johnstone and directors general Marc Dupuis and Peter Hill, thanking them for the meeting. “Again, we found our meeting highly valuable and will not hesitate to contact you for counsel as we move our business along. Canada is an important market to AT&T,” Bozza wrote. She passed on information about AT&T’s interest in WiFi hot spots, and a press release about a 2013 agreement with a company called Boingo Wireless, to provide access to global WiFi hotspots. Umm, WiFi? Verizon and AT&T still aren't in Canada, and there’s always the possibility that one of them could jump into Canada’s market with the purchase of a small player. The problem with that is none of these small wireless startups purchased any 700 MHz spectrum, which is considered key. Secretly, AT&T and Verizon might be more interested in purchasing one of the large providers if the government decided to completely remove the foreign ownership restrictions. For now, any rumours of an AT&T or Verizon expansion north are dead. Last September, on a conference call with analysts, Verizon CEO Lowell McAdam said speculation about the company’s move into Canada was overblown. “I mean, we looked at it, but we never seriously considered the move, and it’s off the table at this point," he said. Then the company had a meeting with the government, which Verizon said was routine. Business news channel BNN also reported in September 2013 that, at a closed-door banking and investor conference, AT&T said it had looked at expanding to Canada and buying wireless startups Mobilicity and Wind Mobile. The company decided against that move, citing not enough room for another large competitor in Canada, according to BNN. The Tory government, for its part, is still pushing for increased competition in Canada’s wireless market. The latest possible white knight is Quebecor Inc.’s telecom subsidiary Videotron, which in the 700 MHz spectrum auction purchased licences outside Quebec, covering Ontario, Alberta and British Columbia. There’s no telling where that possibility of a national expansion may lead, particularly now, given the wrinkle of Pierre-Karl Peladeau's jump into Parti Québécois separatist politics. So, Videotron, what can we do for you? This story was originally published March 14 in The Lobby Monitor, a division of Hill Times Publishing. For more exclusive coverage of federal lobbying, visit www.lobbymonitor.ca.

Industry Canada lobbied AT&T, too

News | March 17, 2014

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Industry Canada lobbied AT&T, too

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