Spectrum caps a ‘reasonable’ exercise of minister’s powers: government

Industry Canada’s decision to limit incumbent wireless providers’ access to the best airwaves in the upcoming 700 MHz auction was a “pure policy decision” and should not be subject to judicial review, government lawyers argued in documents filed in Federal Court this week. “The grounds on which a policy may be challenged are limited,” William Pentney, the federal deputy attorney general, said in documents filed Monday as part of Telus Corp.’s challenge of Industry Canada’s rules for the 700 MHz spectrum auction. “Policies are normally afforded much deference; one cannot, for example, mount a judicial challenge against the wisdom or soundness of a government policy.” Telus launched in August a Federal Court challenge of Industry Canada rules that limit incumbent carriers to a single block of “prime” spectrum in the upcoming 700 MHz spectrum auction while allowing other bidders to acquire two out of four prime blocks in each region of the country. The company argued at the time that only the federal cabinet can restrict a company’s eligibility to acquire spectrum, not the industry minister or the department he oversees. Telus added in court documents last month that it needs unfettered access to that spectrum—which carries wireless signals over longer distances and deeper into buildings than other airwaves—to ensure it can maintain the quality of its wireless network as Canadians’ demand for wireless Internet services continues to grow. In the government’s response, Pentney said the minister’s decision to restrict the amount of prime spectrum the incumbents can acquire was a “reasonable” exercise of ministerial powers under Section 7 of the Telecommunications Act, which says an objective of Canada’s telecom policies is “to enhance the efficiency and competitiveness” of the country’s telecommunications services. Former industry minister Christian Paradis said in March that the auction rules are designed to foster competition in the industry by ensuring the presence of a fourth wireless provider in each market to compete against incumbents Telus, BCE Inc. and Rogers Communications Inc. The minister, Pentney added, “was keenly aware of market conditions and the competitive landscape” when designing those rules, which he said are “intended to promote competition in the industry while allocating a scarce public resource.” Telus’ challenge argues that the Radiocommunication Act requires the minister to abide by cabinet’s regulations. Those are set out in the Radiocommunication Regulations, which states in section 9(1) that any “corporation that is incorporated or continued under the laws of Canada or a province” is eligible to receive spectrum licences. Section 5(1) of that act allows the minister to issue spectrum licences “ubject to any regulations” imposed by cabinet, and “taking into account all matters that the Minister considers relevant for ensuring the orderly establishment or modification of radio stations and the orderly development and efficient operation of radiocommunication in Canada.” Telus argued in its challenge that efforts by the minister to impose additional criteria determining who can bid on which spectrum blocks is “unlawful” and asked for a court order declaring that the minister has no authority to do so. Pentney said the cap on the incumbents’ ability to acquire prime spectrum is unrelated to cabinet’s ability to determine who is eligible to receive a spectrum licence under federal Radiocommunication Regulations. He said Telus’ interpretation that those regulations prevent the minister from imposing different criteria for determining licence winners “is overly simplistic and leads to an absurd result,” under which the minister’s powers “would be reduced to that of placeholder rubber-stamping the issuance of licences.” The cap, Pentney added, is a “temporary restriction” that restricts incumbents’ ability to acquire more than one prime block of 700 MHz spectrum until five years after those blocks are awarded. “Thereafter, the spectrum cap would cease to apply,” he said. BCE filed a similar challenge of the minister's power to impose auction caps, and dropped that case in October. Federal Court Justice Paul Crampton said in a September order that the court will hear Telus' challenge at a hearing in Ottawa on Dec. 3. The Telus case number is T-1405-13 and the BCE challenge was filed under T-1428-13. —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca --- CORRECTION: A previous version of this story incorrectly stated that the BCE challenge will be heard at the same time as the Telus challenge.

Spectrum caps a ‘reasonable’ exercise of minister’s powers: government

News | 11/21/2013 9:22 pm EST

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