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Government is all talk when it comes to wireless policy

A man stands in a mobile phone store, puzzled by the options.

A woman opens her cellphone bill, her eyes widen.

Apparently lost, a hockey mom is parked at the side of the road in her minivan, trying to pull up a map on her smartphone. Her kids look on, worried.

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"It's time to talk about what's best for Canadians,"says the narrator in a new federal government TV ad.

On cue, the man, the woman and the hockey mom declare: More choice. Lower Prices. Better Service.

The advertisement, airing this month and next in both English and French, is part of a $9-million campaign to promote the government's pro-competition policy for the wireless sector. The TV ads alone are costing $2.6-million to run.

That's right: The government is spending your money not to deliver any of those nice things (lower prices, better service, more choice), but to tell Canadians what to think.

The government defends the campaign, saying it has an obligation to tell Canadians the facts about its wireless policy, detailed at an Industry Canada website.

"These ads provide those facts," Jake Enwright, Industry Minister James Moore's press secretary, insisted in an e-mail.

"Our policy to increase competition in the wireless sector is providing Canadians with more choices and access to the latest technology at lower prices."

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The problem is that the website, the ads and the policy are an empty storefront. The federal government's wireless policy is so far made up largely of rhetoric and bluster.

The campaign is disturbingly reminiscent of two other rounds of wasteful government ads – spots touting the Canada Action Plan long after the infrastructure money was spent, and a campaign to promote a job-grant program that still does not exist.

Some countries, quite rightly, put strict limits on this kind of advertising.

In this latest case, the federal website mainly touts the coming auction in January of 700-megahertz wireless spectrum – a powerful frequency range said to better penetrate buildings and carry signals over longer distances.

A dozen wireless bidders are in the running and the government is setting aside some of the new spectrum for companies other than the Big Three – Rogers, Bell and Telus, who now control roughly 85 per cent of the market.

But it's not at all clear the auction will substantially alter the competitive landscape. Several players have already bowed out of the auction. And Ottawa failed to entice U.S. giant Verizon Communications Inc. to bid on spectrum as an entrée into the Canadian market.

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The prospect that an upstart – foreign or domestic – will challenge the dominance of the Big Three in the near term looks remote. One new entrant is poised to disappear after regulators approved Telus Corp.'s purchase last month of Public Mobile, best-known for its $19-a-month unlimited talk plan.

In October, Ottawa blocked Telus's attempts to buy another small player, Mobilicity. That company now faces the threat of extinction as it struggles to get out of financial trouble while under protection of the Companies' Creditors Arrangement Act.

A third upstart, Wind Mobile, owned by VimpelCom Ltd. of the Netherlands and operated in Canada by Globalive Wireless Management Corp., is in the running for some of the 700-MHz spectrum and may be interested in Mobilicity. But VimpelCom has also made noises about exiting the Canadian market.

In October's Speech from the Throne, the government said it has "taken action to achieve greater competition."

It's not at all clear where the new competition will come from, or indeed how the current policies will deliver the choice, lower prices and better service the government insists Canadians want.

What remains, then, are political attacks against an unpopular wireless industry.

Canadian taxpayers might well ask why they are footing the bill for advertising, whose main goal is to portray the Conservative government as a friend of the consumer.

A key missing piece of the policy is a foreign-investment rule that would fully open the wireless market to foreign investors, such as Verizon. Right now, foreigners can only control a wireless company if it has less than 10-per-cent market share.

Mr. Moore, not the hockey mom, is the one lost at the side of the road in search of a wireless strategy.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More


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