On the day that the House of Commons Standing Committee on Industry, Science and Technology will meet to decide whether to hold public hearings, Rogers Communications appears to be making a final stab in their case.
Via a news release issued this morning, Rogers is once again urging the federal government to act immediately on calls from opposition to review the country's “flawed wireless policies and rules” for the upcoming 700 MHz spectrum auction.
Specifically the Canadian telecom giant is asking the federal government to take action on three things: offer equal bidding rights in the 700 MHz auction; create an open environment where if a Canadian wireless player seeks a buyer, everyone should be able to bid; and strengthen auction rollout requirements - ensure foreign carriers invest and build a national network in rural areas
Techvibes reported yesterday that a new paper from the Fraser Institute argued that the federal government should level the playing field of Canada's wireless market if it wants Canadian consumers to have choice and competition. The report reasoned that, "preventing large incumbent carriers from unduly restricting competition in the future can and should be addressed through the Competition Act, rather than through 'handicapping' the competitive process, including spectrum auction caps."
Rogers and the other members of the “big three," BCE Inc. and Telus Corp., have called on the Canadian government to change its rules on national wireless entrants. They call the current policies unfair, which serve to handicap the country's three biggest carriers against a potential new entrant like Verizon.
Bloomberg News reported this week that Rogers CEO Nadir Mohamed said that rather than a flawed method of wireless policy that favours foreign entrants like Verizon, the government should favour an “open” market. Even if that means scrapping rules on how much Canadian telecommunications companies can be foreign-owned.
"If the end objective for government is to say 'let's open up the market,' then we'd rather have it open than flawed in terms of the structure that is currently in place," Mohamed told Bloomberg News. "It's not a level playing field."
Verizon said in June that it is considering buying Wind Mobile, the largest of the “new” Ontario-based carriers that were introduced as a result of the 2008 wireless spectrum auctions meant to introduce more competition for the big three. Unfortunately, the rich got richer while the new carriers like Wind never succeeded in making a significant dent in the market.
In January’s spectrum auctions, Canadian incumbents are only allowed to bid on one block of 700-megahertz airwaves each. The rules state that a new entrant can bid on two.
New York-based Verizon’s market value of $135 billion US is nearly double that of the big three combined. CFO Fran Shammo has remained tight-lipped over the corporation’s intentions, but the folks at Verizon have doubtless been quietly grinning to themselves while Canada’s big three have traded shots with the federal government.
The big three’s claims that Verizon’s potential entry is “unfair” carries some weight, but the fact that 90% of the wireless market is controlled by these three companies doesn’t exactly frame them as choir boys.
Bloomberg reported that while Mohamed “said he would prefer scrapping foreign ownership restrictions over the status quo, his first preference would be to change the current rules.”