BCE Inc. is going to court to stop Quebecor Inc. from purchasing valuable 5G-friendly spectrum in the 3,500 MHz band in British Columbia, Alberta, and Manitoba — spectrum that is a crucial part of Quebecor’s plan to take its wireless business national. 

In an application for judicial review filed with the Federal Court Thursday, Bell requested an order preventing the Department of Innovation, Science, and Economic Development (ISED) from issuing licenses for set-aside spectrum to Quebecor’s Vidéotron subsidiary, revoking any licenses that have been issued, and putting any bands of set-aside spectrum Quebecor won at auction in June and July back on the auction block.

Quebecor, Bell argued, should not have been eligible to bid on set-aside spectrum in British Columbia, Alberta, and Manitoba, asserting auction rules dictate that only companies that are “facilities-based providers” that are “actively providing commercial telecommunications services to the general public” are allowed to do so. 

In the court filing, Bell wrote that after the results of the spectrum auction were released, it asked ISED to explain why it allowed Quebecor to bid on set-aside spectrum in the three provinces, “since Vidéotron does not operate in those provinces.”

ISED allegedly responded on August 11, stating that Quebecor had indicated “it provides over-the-top business Internet services in these areas through its affiliate, Fibrenoire Inc.,” as quoted in Bell’s court filing. 

Fibrenoire, Bell continued, is not a facilities-based provider through over-the-top (OTT) service, and is not providing services in any of the three provinces targeted in Bell’s application where Quebecor bought set-aside spectrum. 

“The Minister could not have properly concluded that Vidéotron was a set-aside-eligible bidder. Rather, the Minister appears to have accepted Vidéotron’s application without conducting its own analysis or review,” Bell wrote in the court filing. 

“By doing so, the Minister unlawfully failed to exercise his jurisdiction under the Radiocommunication Act and Department of Industry Act, and departed from the Auction Framework without any reasonable explanation.”

In the 3,500 MHz auction, Quebecor spent just shy of $830 million on 294 licenses covering a population of just under 30 million, and the company has been explicit about its ambitions toward national expansion. 

“The outcome of this auction is for us the first essential step towards the expansion of our telecom services outside our own home base of Quebec, into key markets of Ontario and western Canada,” Quebecor CEO Pierre Karl Péladeau told analysts a day after the auction results were announced. 

Industry-watchers have also speculated widely that Quebecor could be a likely buyer for Shaw Communications Inc.‘s Freedom Mobile brand, should the Competition Bureau force its sale as part of the approval of Rogers Communications Inc.‘s acquisition of Shaw. 

— Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Hannah Daley at hdaley@thewirereport.ca