Wireless war escalates as Ottawa launches ad blitz

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The federal government has launched a PR campaign to beat back criticism of its wireless policy by the Big Three industry players – even as the telecom companies face gag orders that limit what they can say on the topic.

The advertising effort, which made a big splash late last week with colour advertisements in national and metro daily newspapers across Canada, also includes radio ads on stations through the country. The messaging echoes a partisan communications effort by the Conservative Party of Canada.

"Our largest wireless companies hold 85 per cent of the airwaves," the government's print ads note, declaring that, "The fact is Canadians pay some of the highest wireless rates in the developed world."

BCE Inc., Telus Corp. and Rogers Communications Inc. have argued in recent weeks that their wireless rates compare favourably with those in the United States and other developed markets. Recent studies, including one commissioned by Industry Canada and the CRTC, indicate that Canadian rates are not as steep as the federal government suggests.

All wireless companies that registered to bid for spectrum in January, 2014, have been warned by Industry Canada to avoid openly discussing the upcoming auction of valuable 700-megahertz spectrum. They risk violating the auction's anti-collusion rules, which ban carriers from "sharing information including, but not limited to, bidding strategy."

None of the Big Three companies wanted to comment on Tuesday about the government's ad campaign.

It's highly unusual for the federal government to run an advertising campaign against a leading industrial sector. The taxpayer-financed messages represents the clearest sign yet of the rupture between the Prime Minister's Office and the Big Three telecom players that clashed publicly during much of the summer about enticements the government has put in place to attract more competition in the wireless business.

The government radio ads paint the telecom firms as self-interested and Ottawa as the defender of what's best for the Canadian public.

"While Canada's wireless companies represent their interests, the government of Canada is here to represent the interests of all Canadians," the radio spot says.

Ken Engelhart, senior vice-president, regulatory, at Rogers, said: "We were surprised to see that the government has launched this campaign. We're not sure how this benefits Canadians or how it helps the government achieve its goal of a more competitive wireless sector."

The Conservative government has cultivated an image as a "consumers-first" government, and taken this tone in crafting a wireless policy that it says will mean more competition and lower prices for smartphone users. This includes privileged treatment for new entrants in the spectrum auction – rules that the Big Three attacked as "loopholes" that could entice foreign competitors to enter Canada.

No foreign-based bidders have signed up for the auction, however. That could hurt the government's effort to introduce enough competition to drive down domestic wireless rates.

But the government ads attempt to turn this state of play to Ottawa's advantage. "Some of Canada's wireless companies say the Canadian government has special rules that favour foreign wireless companies," the campaign says. "But there are no such rules."

The federal industry department said the campaign will run throughout the autumn and declined to disclose the budget.

"The government of Canada has an obligation to inform Canadians about important policies, programs, and services it offers. The objective of the campaign is to provide Canadians with the facts about Canada's wireless policy," said Jessica Fletcher, director of communications for Industry Minister James Moore.

The Conservatives are expected to build on their consumers-first reputation in this fall's Throne Speech, expanding beyond cellphones to target other sources of consumer frustration including, possibly, credit cards and air travel.