Government could ease up on spectrum transfers: Ghose

A Federal Court judge has affirmed the government's authority to block transfers of wireless spectrum whenever it sees fit, though at least one telecom analyst says the government's reluctance to let incumbents accumulate airwaves from rival companies could change over time. Last week, Judge Roger Hughes threw out Telus Corp.'s challenge to the authority of the industry minister to rule on transfers of spectrum between companies as a result of acquisitions even after pre-set moratoriums on selling spectrum have expired. Canaccord Genuity analyst Dvai Ghose said he was not surprised by the court's decision, though he doesn't necessarily feel companies struggling financially or not using spectrum assets to their potential will be blocked indefinitely by government from offloading their airwaves. Ghose said in an email that the Federal Court's decision "doesn't mean this government or the next government won't change its mind over time." Telus has been prevented by the federal government on numerous occasions from purchasing Mobilicity, along with the spectrum it holds. The carrier emerged from the 2008 AWS spectrum auction and went into bankruptcy protection in 2013. The most recent arrangement between Mobilicity and Telus was announced in April, well after the Feb. 10 date when the five-year moratorium on Mobilicity's spectrum expired. Ghose said the spectrum owned by Mobilicity that Telus sought is largely unused. He added that Wind Mobile, which also entered the market as a facilities-based wireless provider after the 2008 spectrum auction, "isn't using most of their spectrum," and Shaw Communications Inc., which was also a buyer in that auction, "isn't using any." A recent report on the website Cartt said the government has told Rogers Communications Inc. its proposed deal to purchase that spectrum from Shaw will not likely be approved, though Rogers told The Wire Report no decision has been issued yet. "I think government will hope that a Wind/Quebecor joint venture will try and buy all this fallow spectrum," Ghose said. "If not, I believe that regulators may change their view over time." A Federal Court decision issued last week by Judge Roger Hughes found that Telus failed in its argument that it is beyond the jurisdiction of the industry minister to decide on so-called deemed transfers of spectrum licences, which is when spectrum changes hands as part of a larger arrangement, such as a merger or acquisition. Also, the court found no reasonable argument that the industry minister should be prevented from ruling against deemed transfers of spectrum due to the legal principle of "estoppel," which is the idea that previous actions or claims should not contradict a current position. Hughes noted in the decision that he was ruling on the question of the jurisdiction of the industry minister, "not the wisdom or reasonableness of the decision itself." One of the arguments made by Telus was that by ruling on deemed transfers of spectrum, the industry minister is trespassing on the authority of the Competition Bureau and its commissioner. Hughes said that while there is "some overlap" between the minister's spectrum authority and the Competition Bureau, Telus failed to prove this overlap creates a "conflict." In terms of what the legislation says, Hughes said the industry minister is given "ample statutory authority" from laws such as the Department of Industry Act and Radiocommunication Act to exercise discretion on proposed spectrum transfers. The court also dismissed Telus' argument that the industry minister should be prevented from blocking spectrum transfers after moratoriums expire because of perceived indications before the AWS auction in 2008 that there would be no government intervention on such matters after the expiry dates. Telus argued that it would have purchased more aggressively in that auction if it had known spectrum-transfer restrictions would still exist after specified moratoriums. Hughes said there was nothing cited by Telus that "constitutes a statement, or even an implication that, at the end of five years a party may freely, without review or constraint by the Minister, licence or acquire any or all of the set-aside spectrum ... ." On whether Telus' 2008 auction activity was affected by assumptions of how deemed-spectrum transfers would be handled after moratoriums expired, the judge said: "The most that can be said is that Telus made a business gamble and lost. It is not the Minister’s fault." Telus declined to comment on the court decision. Industry Minister James Moore's office did not to respond to a request for comment. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Government could ease up on spectrum transfers: Ghose

News | December 8, 2014

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Government could ease up on spectrum transfers: Ghose

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