Five advocacy groups are saying a planned deal that’d see Rogers Communications Inc. acquire wireless spectrum from Shaw Communications Inc. will be the death knell for new wireless carriers in Canada.
A letter was sent to Minister of Industry Christian Paradis by the Public Interest Advocacy Centre (PIAC), the Consumers’ Association of Canada, OpenMedia.ca, the Canadian Internet Policy and Public Interest Clinic, and the Council of Senior Citizens Organizations of British Columbia. It protests Rogers move to pluck wireless spectrum in Western Canada from Shaw. The option to purchase the spectrum, which carriers use to operate cellular phone and data networks, was attained as part of a $700 million deal between the firms.
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Shaw paid $190 million for the spectrum during the 2008 wireless spectrum auction held by Industry Canada, an auction that had a stated intent of spurring competition in Canada by introducing new firms to the market. But under the rules of that auction, Shaw has the ability to sell its spectrum to an incumbent carrier after five years – which will be spring 2014.
If the deal is done, it’s “the first step back to only three big providers: Rogers, Telus and Bell,” says John Lawford, executive director of PIAC in a press release. Lawford and his backers say the Minister should take “clear and immediate action” to protect consumers.
Stronger language is used in the open letter to the Minister. “This brazen announcement in our view should immediately be countered,” it states. “Canadians expect this government to require all wireless providers to abide by the clear rules when auctioning off the public resource of spectrum.”
The spectrum at stake is LTE, which allows for broadband data speeds and is effective at permeating buildings, and much needed by new entrants to be competitive, the letter notes. The government’s next planned auction of 700 MHz wireless spectrum hasn’t done enough to set aside space for new entrants.