The tumult and the shouting have died down in the Canadian wireless industry, but the matters in dispute have not been resolved. The federal government is no further ahead in achieving its goal of a fourth national wireless carrier. Meanwhile, the share prices of the major Canadian carriers may be recovering to their previous levels – almost as if nothing had happened in the meantime.
Verizon Communications Inc., an enormous American corporation, has now, almost casually, let it be known that it was never much interested in the Canadian market – it was “way overblown” by the media, said Lowell McAdam, Verizon’s CEO – over the course of a summer filled with speculation about its intentions toward Canada and the consequences of its potential presence in this country.
The anomaly remains that “new entrants” will be preferred in the auction of the 700-megahertz spectrum, to be held in January – whether they are huge, well-established international companies or young, start-up enterprises. The preference consists of being free to bid on two of the four blocks of prime spectrum, while the so-called incumbents – BCE Inc., Rogers Communications Inc. and Telus Corp. – can bid on only one of the blocks.
The upshot may benefit Vidéotron, which is a subsidiary of Quebecor Inc., or Eastlink, a carrier with a strong base in the Maritimes. These regional companies are not new entrants but could be in a good position to buy one of the blocks. Struggling companies such as Wind Mobile and Mobilicity are unlikely to be able to afford successful bids.
James Moore, the Minister of Industry, is not likely to change course before Sept. 17, the day when bidders will make their deposits, or before Jan. 14, 2014, the day of the auction itself. He would have done better to pause to reconsider over the summer.
The government’s goal of four, rather than three, strong national wireless corporations will be hard to achieve; it is not the kind of result that democratic governments can really engineer.
If there is no 11th-hour rethink, the government should review the whole file after the auction – and remove the remaining foreign-ownership restrictions.
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