OTTAWA – Saying the wireless market is not competitive enough in Canada, Quebecor and MTS Allstream have joined forces to lobby both government and Canadians so that the companies are given a break in 2008’s wireless spectrum auction.
“Canada needs to permit new competitors in the wireless sector to ensure consumers are offered lower prices and advanced services which other countries already enjoy,” says a press release from the Coalition for Wireless Competition issued today.
Citing the oft-referenced but little understood Telecom Policy Review Panel report which “identified the need for a more efficient and vibrant wireless industry with more competition,” says the release, "(t)he smaller number of mobile providers in Canada may mean that there is less competition in the Canadian market than in the U.S. market, which consequently has resulted in higher prices, less innovation, lower uptake and lower rates of usage the Panel concludes that Canada’s mobile wireless industry lags behind its major trading partners on a number of key measures."
Basically, the coalition, which appears to be primarily MTS and Quebecor, wants the spectrum auction to favour new competitors so that their push into the wireless market won’t cost as much as an open “biggest cheque wins” auction, which they say favours the three wireless incumbents, Rogers Wireless, Telus Mobility and Bell Mobility.
"Currently, three companies control the entire Canadian market and that has led to higher prices, and less advanced technologies than are common in Europe, the U.S. and Asia," said Luc Lavoie, coalition spokesperson and executive vice-president of Quebecor. "The solution for this is very simple – more competition will help lower prices and introduce the technologies that Canadians will need to compete globally in the wireless economy."
Look for a pr and advertising battle on this one as the companies say they will try to make politicians, business and consumers “aware of… the fact that Canada lags behind the rest of the world in this sector in terms of price and technology. They even have a web site for people to complain to: www.wirelessfuture.ca.
"Communications costs are a significant issue for business, especially small businesses," added coalition spokesperson Chris Peirce, chief regulatory officer of MTS Allstream. "For many Canadians it would actually be cheaper to buy a U.S. plan for use in Canada than to buy from our existing national providers. Clearly, Canadians should be able to expect more competitive choice in wireless services”
“Coalition expressed surprise that Canada’s largest telecom providers are lobbying the government not to create conditions that could allow new players into the market, claiming that this would constitute a subsidy or unfair competition,” says the press release.
(Ed note: That’s one way of looking at it. The other would be that the existing suppliers have asked that the auction be plain and open with no ancillary conditions. Rogers has been very outspoken in defending the wireless incumbents’ position. It’s clear that this will be a loud, long process between now and May 25 and all the way through to the auction.)
"The three largest players have already received favourable treatment from the government," said Lavoie in the release. "For example, in 1984 they were granted frequency free of charge, without auction or any other fee. In 1995, they were granted an additional 10 MHz, and no spectrum was granted to new players."
(Of course, back then there were few who wanted to get into the business – a business which was unregulated and open to anyone to join – which meas the wireless spectrum value as in the neighborhood of $0.)
The Coalition for Wireless Competition, launched by Videotron Ltd., MTS Allstream and Mipps Inc., plans to raise awareness over the coming weeks, as the May 25th deadline to provide comments on the structure of the auction approaches, “encouraging Canadian consumers and businesses to make their views known and tell the government they want genuine competition in wireless services in Canada,” says the press release.
– Greg O’Brien
