Wireless firms urge Ottawa to give up on ‘fourth player’

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Canada's big three wireless service providers met with federal Liberal Party lawmakers on Monday in an effort to push Ottawa to abandon efforts to attract a fourth national player through upcoming wireless spectrum auctions and focus instead on improving service for rural Canadians.

After waging a publicity campaign against federal auction rules aimed at bringing in competition from the U.S., senior officials from Canada's wireless sector – representing both big and small players – debated on Parliament Hill about how Ottawa should proceed with its wireless policy. Organized by Liberal MP Judy Sgro, the more than two-hour round-table debate was not an official House of Commons committee meeting. Parliament is currently prorogued until Oct. 16, when the Conservative government will release a Speech from the Throne.

Ted Woodhead, a senior vice-president with Telus Corp., suggested the Conservative government should abandon its "search for the unicorn fourth player in every market" and recognize that telecommunications firms worldwide need critical mass in order to compete. "These are scale industries that require size," he said.

The gathering of Canada's major wireless players comes just two weeks after Verizon Communications announced that it would not enter the Canadian market, in spite of strong efforts by the Conservative government to entice a firm such as Verizon into participating in an upcoming auction of wireless spectrum. Verizon's decision leaves a high degree of uncertainty over what the Conservative government will do next as it attempts to deliver on pledges to foster improvements for consumers dissatisfied with prices and service offered by the big three.

Mirko Bibic, executive vice-president with Bell, pointed out that his company, Telus and Rogers Communications Inc. each have fewer than 10 million subscribers, while Verizon has 100 million. The relatively modest size of the Canadian players makes it difficult to address all of their customers' demands.

"What does that mean? It means that when Bell, Rogers and Telus want handsets, when they go see Samsung and when they go see iPhone, you take what they give you," said Mr. Bibic. "You can't say 'I want an iPhone, but it's gotta work on this spectrum, because this is the spectrum I have.' They say 'go away'."

The discussion also involved groups representing independent wireless firms, who argued small firms can be competitive – particularly if they focus on regional service and are charged fair fees when their customers roam on networks owned by their rivals.

"It's just a question of opportunity for the smaller carriers," said Jonathan Holmes, executive director of the Independent Telecommunications Providers Association.

Bernard Lord, President of the Canadian Wireless Telecommunications Association, said Ottawa's current approach won't increase service for rural Canadians.

"This is one of the things that has been repeated by certain government officials that this next auction will help rural Canada. Well, not with the rules that are in place," he said.

Geoffrey White, counsel with the Public Interest Advocacy Centre, a non-profit consumer advocacy group, said the data used to inform Ottawa's wireless policies aren't objective enough. "Get the Library of Parliament researchers looking at these issues rather than taking the data from the people who have the most to lose, rather than looking at consumers who have the most to gain by getting affordable access to wireless," Mr. White said.

Rick French, a former vice-president of the CRTC and former minister of communications in Quebec, said the government has been "clumsy and improvisational" in setting rules for spectrum auctions.

"It's a third world type political behaviour where you attract investment on the basis of one set of rules and then you change the rules in midstream," he said. "It doesn't create that stable environment and respect of principle that you're supposed to be perusing in telecom policy."