As wireless spectrum battle heats up, Ottawa takes the first swipe: Don Pittis

There is a jousting match going on in the cellphone market and Canadians must choose their champion, writes Don Pittis. On one side are Bell, Telus and Rogers, who warn of job losses, and on the other, the government, which wants to lower phone rates. On the day the bidders for the wireless spectrum auction were announced, Ottawa took the first shot - but this will be a long battle.

Government announces bidders for cellphone frequencies

There is a jousting match going on in the Canadian cellphone market and Canadians must choose their champion.

At one end of the field of battle, the phone companies — Bell, Telus and Rogers — raise their banners to defend Canadian jobs and Canadian industry from foreign mega-corporations.

At the other end is the federal government, your knight in shining armour, hoping to protect you against overcharging by the oppressive Big Three.

You might have thought the news on Monday — that foreign companies are staying out of the bidding for the latest batch of cellphone frequencies — would have cooled tempers somewhat.

Not so. The same day that Industry Canada published the list of companies in the running for the new telecom spectrum – a list that did not include the bogeyman U.S. giant Verizon or any other outside bidder – the feds went on an attack in papers across the country.

"The fact is Canadians pay some of the highest wireless rates in the developed world," blare ads in the transit tabloid Metro in some of Canada's biggest cities. "And our largest wireless companies hold 85% of the airwaves."

Fightin' words

Along with the fightin' words, the ads direct readers to a comprehensive website,, offering details of what's at stake. From the government's point of view, of course. Once you get past the propaganda, the information in the Spectrum Auction FAQ is full of useful titbits. 

After the government released its information campaign, OpenMedia, a group that says it represents ordinary Canadians, stepped up to give the phone companies a whack. 

Ever since the Big Three telecoms - Bell, Rogers and Telus - accused the federal government of giving other companies an unfair advantage in purchasing blocks of wireless spectrum, the government has been saying that Canadians pay too much for wireless services. (Industry Canada)

 "Canadians have been speaking out about the Big Three’s misleading PR campaign, and now that we know Verizon is not taking part in the auction, we know for sure the campaign was over-the-top and dishonest,” says Steve Anderson, OpenMedia's executive director, in a press release.

The idea that foreign companies are entirely out of the picture is suspect. 

While Verizon is not in the bidding, the FAQ points out that a "limit on the prime spectrum blocks will be imposed on Canada's large wireless service providers... and will effectively reserve... one block of prime spectrum for new entrants or regional providers." 

There are many companies in that list of bidders that could scoop up the spectrum the Big Three are not allowed to touch. Once the bidding is complete, anyone — that is, anyone other than the "Big Three" — can buy the spectrum from the winners and be back in the game. 

One-sided debate

If that is so, why is the debate so one-sided now? Where are the big telecom companies that made their objections so obvious in their recent full-page ads in newspapers and spots on radio? It is hard to see that their views would have changed.

For a clue, check out the FAQ again. 

"Bidders that have applied to take part in the auction... are not allowed to publicly discuss bidding strategies, how they intend to bid, what the market might look like after the auction."

If they do, there is a penalty.

"Bidders that publicly discuss the sensitive information mentioned above could be disqualified from taking part in the auction, as well as possibly lose their deposit."

This time, the big telecom companies have been unhorsed, and the round goes to the government. But stay tuned, the fight is far from over.

About the Author

Don Pittis

Business columnist

Don Pittis was a forest firefighter and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.


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