U.S. giant Verizon Communications Inc. appears to be taking a second look at the Canadian market after hiring a consultant to lobby the federal government on its telecommunications policy.
The New York-based telco hired Peter Burn, a consultant with Dentons Canada LLP, to lobby both the Prime Minister’s Office and Industry Canada on this country’s “telecommunications policy framework,” according to new entry in the federal lobbyist registry that was posted Tuesday.
Verizon is interested in pursuing a dialogue with Ottawa on section 7 of the Telecommunications Act, which outlines the various objectives of Canada’s telecom policy. Those include the role that telecom plays to maintain Canadian identity by, among other things, promoting Canadian “ownership and control” of carriers.
That section of the Telecommunications Act also outlines other objectives including enhancing competition, encouraging affordable services and the use of Canadian transmission facilities.
Verizon is also lobbying the government on a particular subsection of the Radiocommunications Act that outlines the powers of the federal industry minister with respect to a number of issues, including spectrum licences.
Specifically, Verizon is interested in subsection 5(1) and “the policies and rules promulgated by Industry Canada thereunder,” according to its lobbyist registration.
“The lobbyist has arranged or expects to arrange one or more meetings on behalf of the client between a public office holder and any other person in the course of this undertaking,” reads the entry.
Although New York-based Verizon is listed as the client, its lobbyist registration also includes information about a subsidiary called “Verizon Canada” that has a Toronto address.
“Business as usual,” said Verizon spokesman Robert Varettoni in an e-mail. “Verizon is a global company, and we meet with government officials around the world on a regular basis.
“We have customers in Canada through Verizon Enterprise Solutions (the Verizon business that serves large customers globally), and our U.S. wireless customers often roam in Canada so it’s business as usual for us to be interested in the country’s telecom policy.”
The potential for Verizon’s entry set off a firestorm over the summer that pitted the Big Three wireless carriers (Rogers Communications Inc., Telus Corp. and BCE Inc.) in a high-stakes battle against the federal government over its policies to promote more competition in wireless.
The Canadian incumbents spent millions on an advertising blitz, arguing the government’s policies contained “loopholes” that would allow Verizon to enter on unduly privileged terms.
But after spending months studying the merits of a Canadian expansion, the U.S. telecom giant announced in early September that it had lost interest in this country after announcing a mammoth $130-billion (U.S.) deal to take full control of its wireless arm.
At the time, Verizon’s chief executive officer Lowell McAdam said his company “never really seriously looked at” Canada, adding a northern expansion was “off the table at this point.”
Before pulling the plug on those plans, sources say Verizon tabled a $350-million preliminary offer for struggling start-up Mobilicity. That was in addition to its $700-million initial offer for another small carrier, Wind Mobile.
The U.S. company had also weighed registering for the upcoming auction of the 700 megahertz frequency, but ultimately did not file application papers.
In July, Verizon’s chief financial officer, Fran Shammo, told investors the company saw good potential in Ontario and Quebec, but that the regulatory environment and federal policies regarding foreign investment could be stumbling blocks.
Canaccord Genuity analyst Dvai Ghose says other telecom stocks may see a pullback in the wake of the latest developments.
But also suggested the threat may not be that serious, noting that Verizon isn’t on the bidders list for the Jan. 14 700 MHz auction, even though only small deposits are required and they’re fully refundable.
“ Without 700 MHz spectrum, we do not see a viable business plan for Verizon in Canada, even if it acquires WIND and Mobilicity and their AWS spectrum,” he said.