Rogers Jr. lays out company’s spectrum auction position

Ted Rogers, president and CEO of Rogers Communications Inc., put his stake in the ground regarding the rules for the upcoming advanced wireless services (AWS) spectrum auction. He laid out the company's position during its first-quarter financial and subscriber results conference call on May 1. Speaking passionately about the rules under which the media and communications conglomerate has grown, the wireless industry's elder statesman said in no uncertain terms that wannabe facilities-based competitors shouldn't get any special treatment during the AWS auction. "I'll make it clear that we have no objection at all to the licensing of a fourth facilities-based carrier. If that's what they want to be, let them build the facilities, provided they pay market rates the same as all the other carriers have to for the spectrum," Rogers said. "There should be established strict timetables for the construction of the facilities over, say, a 30-month time period just as was imposed on Rogers and Bell in relation to our Inukshuk network.... If the facilities are not constructed within the time table the spectrum in those areas must be revoked."The Rogers chief executive added that companies shouldn't be allowed to squat on spectrum either, they should be required to use it. Companies can't sit "on the spectrum without significant construction until foreign ownership changes and then out raw spectrum to AT&T or Verizon for billions of dollars of profits," he said. "If a new competitor seeks the rights of a facilities-based competitor then it must become a facilities based carrier wherever it holds spectrum." On mandated tower sharing, Rogers recognized that municipalities and the general public support this type of initiative and the company is willing to go this route - with a caveat, though. "Now we share this policy as long as all facilities-based carriers do their reasonable best in establishing new cell sites," he said. Perhaps Rogers showed a soft-spot for municipalities, but for new competitors looking for roaming agreements, he took a hard line. "Rogers utterly opposes any forced roaming rights for a new facilities-based carrier," he stated, noting that the company's opposition to mandated digital roaming has two elements: facilities-based carriers should have their own network; and the resulting negative economic impact of stranded capital.On the economic aspect, the Rogers chief executive explained that mandated roaming of a new competitor on the already established wireless networks would result in the incumbent having to build extra capacity into its network to handle customers from a competitor. As well, when the new competitor built its own network, an incumbent wireless carrier would find itself with stranded capital after the competitor migrates its customers to its own network. Rogers said there is another way to alleviate the situation. "Spectrum and facilities-based licences should be national and not regional, provincial or municipal," he said. "The is that a new entrant should not be allowed to get away with building just a few towers and expect the right by government writ to roam on thousands of towers across the rest of Canada that were constructed with great cost and risk that those carriers did make." If some parties are interested in getting into the Canadian wireless business, then they should consider the mobile virtual network operator route, said Rogers. "Anyone can start a Canadian non-facilities based competitor and resell at mutually agreed rates using the facilities of one of three facilities-based carriers," he relayed, noting that Virgin Mobile, Vidéotron, 7-Eleven and Amp'd Mobile are competing in that way. These companies "avoid the billions of dollars of capital requirements to purchase spectrum at fair market value and deploy facilities across Canada reaching nearly 95% of population needed to compete with the existing three facilities-based carriers."Rogers' impassioned speech took square aim at critics of his company and the Canadian wireless industry, singling out Vidéotron during the conference call. "For the past more than 20 years I've invested over $7 billion in Rogers Wireless to get to this point where we're just recently starting to generate returns," Rogers said. "This wasn't a business that was granted a monopoly like landline telephony where they had guaranteed rate of return. Ours was 100% risk. We were competitors on day one. We almost went under a couple of time with the investment and debt we needed to compete with the telcos to build our facilities." Industry Canada released a consultation paper in February that seeks comments on a number of proposals to license AWS spectrum. First-round comments on due May 25 with replies due June 27.

Rogers Jr. lays out company’s spectrum auction position

News | 05/08/2007 1:11 pm EDT

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