Court dismisses Telus request for injunction against Quebecor’s 3500 MHz licenses

The Federal Court has rejected a Telus Corp. request to stop the department of Innovation, Science, and Economic Development (ISED) from issuing licenses for set-aside spectrum won at auction by Quebecor Inc.'s Vidéotron in this past summer's 3,500 MHz auction. For an injunction to be granted, it must satisfy a three part test set out in the RJR-MacDonald case: there must be a "serious issue" to be heard, the aggrieved party must face the prospect of "irreparable harm," and the "balance of convenience" must favour the granting of the injunction. In a Friday afternoon decision, Justice Sébastien Grammond said Telus's request for an injunction failed all three requirements of the test. Grammond wrote that based on the record before the Court, Telus's "arguments are untenable and do not raise a serious issue. There is no basis for TELUS’s assertion that Vidéotron needed to have physical infrastructure in Western Canada to be eligible. Neither does the form summarizing the Minister’s assessment of Vidéotron’s eligibility raise any serious issue." Grammond also rejected the irreparable harm argument. "Although Vidéotron’s entry will change existing market conditions, the same result would have obtained if another regional carrier had won the disputed licences. Indeed, this change in market conditions is the intended result of the Minister’s decision to set aside spectrum for regional carriers," Grammond wrote. "It is not causally linked to Vidéotron’s alleged ineligibility and does not count as irreparable harm. Moreover, I am not convinced that the alleged harm is either irreversible or impossible to compensate in damages." Grammond also rejected Telus's arguments in the third part of the test, writing "while each party may suffer inconvenience if the stay is granted or denied, the decisive factor is the public interest in fostering greater competition in the market for mobile phone services. This public interest weighs heavily in favour of denying the stay." In a Monday hearing, counsel for Telus had argued that the company's attempt to block Quebecor from attaining the set-aside spectrum licenses was “not about preventing fair competition, it is about preventing an unfair cost advantage resulting from the auction rules not being applied as announced to bidders." In late August, both Bell and Telus filed parallel court challenges seeking to block Quebecor’s acquisition of bands of set-aside spectrum the Quebec-based company acquired in British Columbia, Alberta, and Manitoba. In the applications for judicial review, the incumbents asked for an order preventing ISED from issuing licenses for set-aside spectrum to Quebecor’s Vidéotron subsidiary, revoking any licenses that have been issued, and putting any bands of set-aside spectrum Quebecor won at auction in June and July back on the auction block. In the applications, Telus and Bell argued that Quebecor should not have been eligible to bid on set-aside spectrum in the western provinces, asserting auction rules dictate that only companies that are “facilities-based providers” that are “actively providing commercial telecommunications services to the general public” are allowed to do so. The Friday court decision could have widespread implications, as it paves the way for Quebecor to take its Vidéotron and Fizz brands into western Canada, and take up the mantle of a fourth national wireless competitor, after Rogers Communications Inc.'s announced acquisition of Shaw Communications Inc. Indeed counsel for Telus pointed to the appearance of Quebecor advertising in Vancouver last week, and tweets from Quebecor CEO Pierre Karl Péladeau indicating that his company would seek to disrupt the wireless market in western Canada. In a Friday evening statement, Quebecor wrote that the company is "disappointed by Telus’s relentless efforts to block at all costs the implementation of government policy to encourage the entry of a fourth player into Canada’s wireless market in order to create healthy competition where it does not exist and lower the prices Canadians pay for mobile services." "The legal manoeuvring by Bell and Telus demonstrates, once again, that they cannot abide competition and the interests of Canadians are eclipsed by their financial objectives." While the court rejected Telus's request for an injunction, the full judicial review remains to be heard. --Reporting by Michael Lee-Murphy

Court dismisses Telus request for injunction against Quebecor’s 3500 MHz licenses

News | 10/23/2021 11:40 am EDT

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