Adding unused wireless spectrum would benefit consumers, Rogers says

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Rogers Communications Inc.'s top executive says it would be a clear "win for consumers" if the federal government permits his company to eventually acquire unused wireless spectrum from Shaw Communications Inc.

Chief executive officer Nadir Mohamed made those remarks on Tuesday at the company's annual meeting of shareholders in Toronto. Although there has been much speculation in recent weeks on the fate of Rogers' agreement with Shaw, he declined to speculate on any potential changes to Ottawa's policy on spectrum licence transfers.

Still, Mr. Mohamed reiterated the company's desire to eventually acquire that undeployed spectrum to feed growing consumer demand for high-speed wireless services in lucrative western markets. Spectrum refers to the radio waves that carriers use to provide cellular services. It is a limited public resource that is controlled by the government.

"What we are talking about is spectrum that is actually not being used – not being made available to Canadians today," Mr. Mohamed told journalists at the meeting.

"Shaw, and I am not speaking for them, … obviously chose not to get in the wireless business – at least as contemplated in the cellular world. They've chosen a WIFI strategy, as I understand it. Importantly, what we'd like to do is put it (their spectrum) to use."

Noting that wireless data consumption is "going through the roof," Mr. Mohamed said Rogers wants to augment its spectrum position to offer the kinds of speeds that consumers require for mobile data services. "So from that perspective, we see it actually as a win for consumers to get access," he said.

Earlier this year, Rogers signed an "option" agreement that gives it the right to eventually acquire undeployed wireless spectrum from Shaw once a federal prohibition on incumbents purchasing new-entrant spectrum assets expires next year. The earliest that Rogers could apply for a transfer is in September of 2014.

Calgary-based Shaw had spent $189.5-million on wireless licences in 2008, but has since decided against deploying a traditional cellular network. Nonetheless, its option deal with Rogers has raised the ire of consumer advocates who argue the agreement violates the intent of the government's rules.

Groups, including the Public Interest Advocacy Centre and the Consumers' Association of Canada, are pressuring Industry Minister Christian Paradis to kill the deal, arguing it would deal a blow to competition in the $19-billion wireless sector.

"The Minister should stand up for competition in wireless," stated Bruce Cran, president of the Consumers' Association of Canada, in a recent press release.

Mr. Paradis has launched a review of the government's policy on wireless licence transfers. Although it is unclear whether he will introduce any new rules that would prevent incumbents from acquiring more spectrum assets, he has recently indicated that it was not the intent of government policy to have new entrant spectrum "end (up) in the hands of incumbents."

Both Rogers and Shaw are urging Mr. Paradis not to rewrite the terms of current wireless licences, saying it would create uncertainty for the industry.

"It would be detrimental to consumers and unfair to the industry if the Department were to adopt rules as a result of this Consultation which would have the effect of retroactively changing the terms and conditions under which parties made a decision to participate in, and acquire licences through, a competitive auction process," Shaw wrote in its submission.

For its part, Shaw has said it plans to use the proceeds from its transaction with Rogers to make further investments in its WiFi strategy. It has also stressed that its intentions with respect to acquiring its spectrum licences in 2008 "were not speculative."