OTTAWA – The use of a package-based auction bidding format could benefit all participants, says the head of Wind Mobile, but he still has questions about whether Bell Canada and Telus Corp. will be allowed to bid separately under Industry Canada's proposed new 700 MHz wireless spectrum auction rules announced last week.
In an interview with Cartt.ca on Friday, Anthony Lacavera, chairman and CEO of Wind Mobile, notes based on the definition of associated entities contained in the consultation, it’s still not clear whether Bell and Telus will be considered one bidder or two. “This is my fundamental concern and within the consultation process we’re going to obviously make our case that they should be treated as one bidder,” he says.
While on first read, it’s unclear whether Bell and Telus could be considered associated entities and therefore be prohibited from bidding individually, the department’s document says it is going to allow associated entities to bid separately if their participation won’t “negatively impact the integrity of the auction process.”
To make that determination, Industry Canada will assess a narrative that describes “all key elements and the nature of the affiliation or association in relation to the acquisition of the spectrum licences being auctioned and, the post-auction relationships of the said entities. It is proposed that this would include arrangements with another potential bidder that relate in any way to the future use of the 700 MHz spectrum directly or indirectly,” states DGSO 002-12.
Lacavera also knows that if Industry Canada determines that Bell and Telus can bid separately, then Wind Mobile will have to work within that framework and look to leverage it. “What we really need to do is to figure out within those definitions of associated entities, affiliated entities, how we can strike partnerships that make sense for us,” he says.
Despite the unanswered questions regarding Bell and Telus, Lacavera lauds Industry Canada for proposing to use a combinatorial clock auction (CCA) and its licence packages approach. The previous simultaneous multiple round ascending (SMRA) auction format saw licences acquired in a fragmented manner. “I think that is a very good outcome [to go with a licence package format],” he says. “There was obviously a great deal of fragmentation in the AWS auction and that didn’t work to anyone’s benefit, new entrants or incumbents. So I think that that aspect is very good.”
As part of the CCA licence package approach, the department is also proposing to automatically assign contiguous blocks of spectrum to the eventual winner. Lacavera notes this is another positive move for both new entrants and incumbents. But, he cautions, that Bell and Telus could find themselves in a very advantageous position over the new entrants if they are treated as two bidders.
“If Bell and Telus are two entities that contiguous spectrum situation really then gives them even more of a structural advantage in the auction because they can count on having 10 MHz paired contiguous across the country,” he explains.
All of the other wireless companies contacted by Cartt.ca told us they weren’t yet ready to comment on the proposed rules. They said they would make their full comments known on the complex and sensitive issues raised when the consultation period comes to a close on June 25.
