Telcos meet with Paradis to lobby on auction rules

Telco executives from across the country had the opportunity to lobby the new minister of industry with their visions for next year’s 700 MHz spectrum auction in a series of one-on-one meetings this month. In all, Paradis met with CEOs and other executives from 13 telcos over four days of meetings from Aug. 16-24, the minister's press secretary, Pascale Boulay, confirmed in an email to The Wire Report Monday. At the top of the agenda during the hour-long meetings were the companies' views on what rules should govern the upcoming 700 MHz spectrum auction: whether to enforce purchasing caps, minimum bids, or spectrum “set asides” for smaller players. “Everyone came with their own perspective on what they’d like to see as the rules on the ,” Wind Mobile chairman and CEO, Anthony Lacavera, said in interview with The Wire Report Monday. “I don’t suspect that there were any new or radical positions submitted by anyone, but obviously I’m not privy to what anyone else said.” Industry Canada is expected to release a regulatory framework for the next spectrum auction before the end of the year. Another issue at the meetings was whether telcos that may be owned or controlled by foreign companies should be permitted to participate in the spectrum auction. Canada's broadcasting and telecom regulatory frameworks currently limit foreign investment to maximums of 20 per cent in the operating company and 33 per cent of the holding company. Paradis is looking at relaxing or even removing the foreign ownership rules but has not yet announced any policy moves. Paradis said at a conference in May that he intends to clear up any questions over the government's foreign ownership policy before the 700 MHz auction. “Foreign ownership in wireless remains an important piece in this puzzle, and one that I am committed to getting right,” Paradis said at the conference. “As we have demonstrated since coming to office, the policy of our government has always been to favour more competition. New entrants mean more competition, which can lead to lower prices and more competitive services for Canadian consumers.” Michael Hennessy, Telus Corp.'s senior vice-president of regulatory and government affairs, said in an interview that the government should not create “asymmetrical rules” around foreign ownership that could “discourage investment.” Although telcos have already released public statements and government submissions outlining their views on what the auction rules should look like, the meetings are an opportunity to explain their recommendations face-to-face. For many executives, the one-on-one meetings were also a first chance to sit down with Paradis since he inherited the industry portfolio from the previous minister, Tony Clement, in a cabinet shuffle in May. The transition from Clement to Paradis was likely seamless in terms of policy positions, Sheridan Scott, a partner with Bennett Jones LLP and a former head of the Competition Bureau, said in an interview. “I’m not sure you would see a major deviation from the general orientation that you’ve seen in this minister’s speeches, which are similar to the previous minister’s speeches,” Scott said. “I wouldn’t imagine some sort of wholesale shift in their approach.” Scott said the companies have been given a chance to convince the new minister why their views for the auction rules signal the best way forward for Canadian consumers. She noted that consultations with the minister take place routinely, regardless of whether they are new to the portfolio. “Generally speaking, Ministers would meet on an ongoing basis with senior representatives from the telecommunications industry and the other industries they’re responsible for,” she said. “I always think that’s a good sign when there’s dialogue between the public and private sectors. I hope both sides are listening.” Boulay, Paradis’ press secretary, would not discuss what was said at the meetings. “There’s no change in policy for now,” she said. During Industry Canada’s formal consultation on the auction rules, Wind called for purchasing caps and price minimums as well as large blocks of 700 MHz spectrum, if not all of it, to be side-aside for smaller mobile operators that don’t already own 800 MHz spectrum. Incumbents like Telus and Bell Canada have called for an open auction with fewer restrictions and no set-asides. “The government has recognized that there’s a limit in the amount of spectrum available, and they’re interested in ensuring there are multiple winners here,” Hennessy said. “We’re suggesting that spectrum caps are a much better alternative than the set-asides that were available last time.” The Industry Department implemented a set-aside policy for new entrants for its last spectrum auction in 2008. The incumbents have called for no set-asides on the basis that they need more 700 MHz spectrum to serve as national, fourth-generation mobile providers and to help bring the next wave of mobile technology to rural Canada. “It is essential that national wireless carriers who serve the vast majority of Canadians and who have demonstrated their commitment to Canada through enormous investments and employment in both urban and rural areas have a fair and equal opportunity to access this spectrum,” Bell spokeswoman Jacqueline Michelis wrote in an email to The Wire Report. Representing a potential compromise position, Quebecor Media Inc. subsidiary Videotron Ltée. has called for rules that would restrict operators to a single block of frequency in the 700 MHz auction if they already own 800 MHz spectrum in the same service area. Under the plan, other providers would be limited to acquiring two 700 MHz frequency blocks. Videotron has also called for “stringent roll-out requirements to ensure the deployment of high mobility services in rural and remote areas,” Quebecor’s vice-president of corporate and institutional affairs, Serge Sasseville, wrote in an email to The Wire Report Monday. “We consider our proposal as a complete roadmap that would ensure the sustainability of a true and robust competition among Canadian wireless operators, all to the great benefit of Canadian consumers,” Sasseville wrote. --- Telecom stakeholders meetings with Paradis’ office Aug. 16 Cogeco Cable Inc. Shaw Communications Inc. Quebecor Media Inc. Globalive Wireless Management Corp. Xplornet Communications Inc. Public Mobile Aug. 17 EastLink BCE Inc. Mobilicity Telus Communications Co. Aug. 22 Rogers Communications Inc. MTS Allstream Aug. 24 SaskTel Source: Paradis' office nkyonka@thewirereport.ca

Telcos meet with Paradis to lobby on auction rules

News | August 30, 2011

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