TELUS taking legal action against federal government over spectrum license transfer rules

telus-tower-19-08-2011

TELUS is making good on its rhetoric to force the federal government to clarify new rules on spectrum license transfers.

The network provider says that the Industry Minister’s need to personally approve each license transfer, in order to prevent undue spectrum concentration, will inevitably prolong the moratorium on spectrum deals between the incumbents and financially-starved new entrants.

TELUS previously made a bid for Mobilicity’s AWS spectrum, promising $380 million for the company and its 150 employees; Mobilicity only paid $243 million for a series of 10Mhz blocks of spectrum back in 2008, comprising much of Southern Ontario, Ottawa, Vancouver, Calgary and Edmonton. TELUS was outbid by its incumbent rivals in the same auction, procuring only 10Mhz throughout much of Canada while Rogers and Bell obtained 20Mhz in most regions. TELUS’ bid for Mobilicity would have equalized the bandwidth playing field in central and eastern Canada.

TELUS, along with Rogers, Bell and smaller regional players, is concerned that rules allowing foreign telcos to purchase Canadian providers with less than 10% of market share will enable Verizon, a US-based company four times the size of the incumbents put together, to roll into Canada and, unchecked, purchase two blocks of 700Mhz spectrum throughout the country while the incumbents are limited to one each. The 700Mhz spectrum auction is slated to take place in January, 2014.

The court filing emphasizes that, despite assurances from the government that spectrum license transfers would be granted after the five-year embargo, Industry Canada’s new rules, which were put into place on June 28th, would continue to prevent incumbents from making those purchases.

Rogers currently has “options” deals to purchase unused AWS spectrum from Shaw Communications and, separately, Videotron, so it too has money in the game, so to speak.

New Industry Minister, James Moore, has reportedly met with the senior management from most of the top wireless companies, though the outcomes are not known. Incumbent carriers like Rogers, TELUS and Bell are increasingly concerned that the federal government’s stated desire for a fourth carrier in every region is clouding the potential “bloodbath” of market with Verizon in it.

Source: The Globe and Mail

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