June 4, 2013
The Canadian Minister of Industry Christian Paradis announced a new competition policy for Canada’s wireless industry earlier today that included the proposed Telus acquisition of Mobilicity, the allocation of spectrum from new entrants to incumbents more generally, the upcoming 700 MHz spectrum auction and other details relating to the Government’s intentions to foster more wireless competition in Canada.
Some of the key points from the Minister’s prepared remarks delivered earlier this morning include reiterating its previous statements that it wants to see at least four wireless carriers in every market, that TELUS’ application to transfer Mobilicity’s spectrum licences will not be approved (which were among those set aside in 2008 for new entrants) and that the Government would “not hesitate to use any and every tool at [its] disposal to support greater competition” in the wireless sector.
The Minister also announced changes to its policy on spectrum licence transfers to be released later in June, said that proposed spectrum transfers that result in undue spectrum concentration will not be permitted, that spectrum transfer application decisions will be published to increase transparency and that the Government would delay the upcoming 700 MHz spectrum auction until January 14, 2014.
In response to questions, including accusations that the Government’s wireless policy was “in tatters”, the Minister said:
– The industry was dynamic and rapidly changing, defending the Government’s strategic interventions, including previously lifting foreign investment restrictions for smaller players.
– The Government’s policy documents reflecting its new policy would likely be released in mid-June.
– The Government wanted to send a “strong, firm, clear signal” that diminished Canadian wireless competition would not be permitted through consolidation of spectrum allocated for new entrants.
– That the fact that wireless rates had dropped about 18% since 2008 was a good indicator of increased wireless competition.
– That the Government believed that the wireless market was not saturated in Canada, that there was room for a fourth player and that it would continue to intervene in an effort to spur further competition.
When questioned why the Government doesn’t simply remove foreign investment restrictions if it is serious about creating more wireless competition in Canada, however, the Minister provided no real answers. The Minister was also non-committal with respect to whether the Government’s newly announced wireless policy would apply beyond the five year window relating to the 2008 spectrum allocation to new entrants (circling back to one of his main messages that the Government did not want undue wireless concentration, and that this was the signal it was sending to the market).
Also interestingly, the Minister indicated that there may nevertheless be windows of opportunity for incumbents to acquire spectrum from new entrants in the future that did not result in an undue concentration and that all applications would be assessed on a case-by-case basis.
For a copy of the Government’s announcement see: Harper Government Protecting Consumers and Increasing Competition in Canadian Wireless Sector.
____________________
SERVICES AND CONTACT
I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
My experience includes advising clients in Toronto, Canada and the US on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters. For more information about my competition and advertising law services see: competition law services.
To contact me about a potential legal matter, see: contact
For more regulatory law updates follow me on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
