TORONTO – Making a passionate case for greater government support of wireless competition, Globalive Group Chairman Anthony Lacavera lambasted the nation’s three incumbent mobile providers, called for a full set-aside of 700 MHz spectrum for newer entrants and urged that the government ease its current restrictions on foreign investment in Canadian telecom providers.
In a wide-ranging keynote at the Canadian Telecom Summit here Thursday morning, Lacavera lit into Rogers Communications, Bell Canada and Telus for raising legal and regulatory challenges to Globalive’s entry into the Canadian market because of its international investors (wireless giant Orascom). Further, he knocked Rogers, Bell and Shaw Communications for gobbling up media properties and called on the federal government to encourage more sharing of cell towers and police wireless roaming fees better.
“I can agree with my friends at Rogers when they say that it is time to level the playing field,” Lacavera said, referring to a call made by Rob Bruce, the president of the cable and wireless arm of Rogers Communications, in a keynote speech here two days earlier. “But leveling the playing field does not mean entrenching the competitive advantages already enjoyed by a few very dominant players.”
Calling them “increasingly bloated conglomerates” that offered “poor service and product choice to consumers,” Lacavera blasted Rogers, Bell and Telus for launching “an early campaign to question our Canadian-ness.” Instead of competing fairly with Globalive’s Wind Mobile unit, he said, the three incumbents have tried to keep the new entrant tied up in legal and regulatory knots.
(Ed note: A final decision on that file is expected out of the Supreme Court this month, Cartt.ca has learned)
“The last two years haven’t exactly been a Cinderella tale for us,” he noted drily. “It’s time for the fear mongering about foreign capital to stop and for the incumbents to focus on developing a thriving industry that can effectively compete on the world stage.”
Arguing that the partial set-asides of wireless spectrum for new entrants in the 2008 Advanced Wireless Spectrum (AWS) auction “worked very well” three years ago, Lacavera (pictured) made the case for a full set-aside for newer players in next year’s expected 700 MHz spectrum auction. He urged the government to establish rules ensuring that “incumbents do not acquire it [spectrum] at any price to stave off further competition,” especially when they already “control a whack of sub 1 GHz spectrum” that they haven’t used.
“There’s a very simple principle we learn as children,” he said, likening the incumbents to the TLC TV show Hoarders. “If you can’t eat what’s on your plate, don’t ask for more.”
Lacavera said the government should loosen its foreign ownership limits for telecom infrastructure players because of the vast amounts of capital required to compete in the wireless market. He noted that the domestic capital markets for telecommunications are “very small,” unlike the markets for mining and resources. More importantly, he charged, the tight business interests Canadian banks have with the incumbents make it virtually impossible for newcomers to tap into enough domestic capital.
“If we want full, real, telecom competition in Canada, we have to be able to fund it,” he said. “If we can’t fund it in our own backyard, then we have to allow for foreign capital, we have to allow the free market to work.”
Lacavera disputed the notion that such reliance on foreign capital will hamper domestic content creation and compromise Canadian culture and sovereignty. “Instead of us having such a protectionist defensive mentality, why not create and produce more content in Canada and export it?” he said. “Let’s create policy to accelerate the growth of Canada’s content creation industries, and take aim for a leadership position in the newly emerging Internet and mobile content distribution formats.”
Instead of fussing about foreign ownership rules, Lacavera said Canadian regulators should worry more about “the concentration of ownership of legacy media assets.” Noting the recent moves by Rogers to buy Citytv, Shaw to purchase CanWest and Bell to scoop up the TV assets of CTVglobemedia, he argued that these “same content distributors will find ways to use their distribution pipelines to steer customers towards content they control and away from content controlled by their competitors.”
Despite the legal fights and regulatory hassles that it’s endured, Lacavera said Wind Mobile has “emerged as the fastest growing carrier in the country.” The carrier now boasts 300,000 customers, with distribution in over 500 locations nationally and roaming to over 200 countries. “I’m not satisfied,” he said. But, he said, “I think we’ve really started to crack the door open.”
Alan Breznick is a Toronto-based senior analyst at Heavy Reading, part of the Light Reading Communications Network at UBM TechWeb.
Photo by Michal Tomaszewski, courtesy the Canadian Telecom Summit.
