Telus sues federal government over wireless policy

Telus Corp. is taking the federal government to court following Ottawa's decision last month that blocked the transfer of wireless spectrum from small competitor Mobilicity to Telus.

Phone company says it wants judicial review of limits on its wireless business

Telus wants a Federal Court review of the country's wireless spectrum policy (Chris Wattie/Reuters)

Telus Corp. is taking the federal government to court, saying it wants clarity on the country's wireless spectrum policy.

Telus filed an application for judicial review in Federal Court on Monday.

It follows then-industry minister Christian Paradis's decision on June 4 to prevent the transfer of struggling Mobilicity's wireless spectrum licences to larger rival Telus. The decision effectively killed Telus's $380-million takeover bid for Mobilicity.

The government has also said any future requests for spectrum transfers would be reviewed individually, and that any deemed to result in undue spectrum concentraton would be rejected.

The federal government's stated goal is to have four national wireless phone competitors in the Canadian market.

"Greater competition means better prices for Canadian consumers," Sébastien Gariépy, a spokesman for current Industry Minister James Moore, said Tuesday.

"We are aware of the judicial review application. As this matter is before the courts we have no further comment."

As part of the last auction of wireless spectrum in 2008, which saw the entry of small players Wind and Mobilicity, the three incumbent phone companies — Rogers, Telus and Bell — were barred for five years from acquiring any of the wireless spectrum held by the small competitors.

Last month, Ottawa pushed back the application deadline for the next auction of wireless spectrum to Sept. 17. Bids had been originally due in mid-June of this year. Now the bidding will begin on Jan. 14, 2014.

Canada's three major players will only be allowed to bid for one of the four blocks of spectrum available. However, potential new market entrants, such as  giant U.S. firm Verizon Communications, won't be limited by that rule.

The Telus court filing comes as Canada's large phone companies are undertaking a vigorous PR campaign against the rules governing foreign entry in the market.

As Verizon eyes the Canadian market with a potential takeover of Wind Mobile or Mobilicity, the big three Canadian telecom companies are saying federal rules put them at a competitive disadvantage.

On Monday, the Canadian Council of Chief Executives and the Communications, Energy and Paperworkers Union of Canada both came out saying they opposed any special treatment for Verizon.