Feds defend wireless policy
SASKATOON — Federal Industry Minister James Moore is standing by the government’s plan for more competition in the wireless industry, despite pushback from telecommunications companies and their workers.
Moore said the policy is geared at getting more competition for Canadians and he added that more choice will result in lower prices.
The policy would allow a foreign company, such as U.S.-based Verizon, to buy two of the four prime blocks of radio waves that will be up for auction in January.
Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T) can buy only one each.
“The policy was not invented on the back of a napkin,” Moore said in an interview with The Canadian Press in Saskatoon.
Moore noted that many who opposed the move had input as the policy was being developed.
“They were supportive of the policy when we first announced it.
“It’s only because Verizon has made noises about possibly coming into Canada that the anxiety has arisen,” he said.
Canada’s big wireless carriers have launched a media campaign to warn that, under the current plan, they would be at a disadvantage if Verizon were allowed into the market.
Unions have also chimed in.
The Communications, Energy and Paperworkers Union of Canada, which has members who work at Bell, is calling for Ottawa to rescind what it perceives as advantages for Verizon.
The Telecommunications Workers Union, representing workers at Telus and Shaw (TSX:SJR.B), said last week that Verizon’s arrival wouldn’t necessarily mean lower cellphone bills. The union said Verizon would probably want to operate in lucrative urban markets and ignore rural communities.
The rules allow foreign entrants to buy small Canadian wireless carriers with less than 10 per cent of the market share.
There have been reports that Verizon wants to buy Wind Mobile and possibly struggling Mobilicity as a way to enter the Canadian market. If Verizon decided to participate in the auction, rules prevent it from continuing to negotiate acquisition deals until afterward.
Moore said Verizon’s entrance to Canada is speculation.
“We’ll see if they come or if they don’t come,” he said. “The ad campaigns by the big three is about their business model and their self interest, if Verizon were to come into Canada or not. The government’s policy does not succeed or fail if Verizon comes into Canada.”
The Opposition NDP is calling for parliamentary hearings as soon as possible.
Industry critic Chris Charlton says in a letter to the Standing Committee on Industry, Science, and Technology that there needs to be an examination to ensure long-term competition and access to mobile services across Canada.
“It is not too late to examine recent developments to ensure that all Canadians will have access to the highest speeds at the best prices,” writes Charlton.
Moore said he thinks the media campaign is an attempt to scare away foreign investment.
He said he won’t cave to calls to push back the auction and review the policy.
“What they’re trying to encourage me to do is send a signal that our government is not sure about our policy and to send messages of uncertainty to those who may think about entering the Canadian marketplace. We’re not going to do that. We’re not stupid,” said Moore.
“We understand the game, the game that they’re trying to play of having me send signals of insecurity about our own government’s commitment to consumer choice.”