New rules fail to calm wireless competition concerns
Posted by Nordicity in Toronto and Ottawa on Mar 07, 2013

OTTAWA - Rita Trichur and Steve Ladurantaye, The Globe and Mail

Industry Minister Christian Paradis announced Thursday that Ottawa is tweaking key rules to ensure at least four cellular carriers are able to compete in each region of the country after a pivotal auction of wireless spectrum takes place later this year.

The changes, which were dogged by months of delay, include stricter rules that push carriers to share cell towers, while also toughening up the requirement to provide roaming on their networks to their rivals. Additionally, Ottawa is reviewing its policy on transfers of wireless licences – signalling it could make it tougher for the big three incumbents to acquire spectrum from smaller carriers.

But there is considerable doubt that cash-strapped new entrants have the financial wherewithal to bid for licences in the auction of the valuable 700-megahertz frequency. Neither Wind Mobile nor Mobilicity have committed to participating in the auction that begins Nov. 19. The new entrants collectively control only 4 per cent of the market as of 2011.

Their failure to do so would deal a significant blow to competition. The 700-MHz band is seen as essential for small carriers to compete because it will enable them to build ultra-fast LTE (long-term evolution) networks. Their inability to poach significant market share, coupled with new roaming rules and the high cost of building out wireless networks, could also discourage any new players from entering Canada – despite recent changes to foreign ownership rules.

“The industry has been holding its breath for almost a year,” said Geoff White, senior manager and regulatory consultant at Nordicity. “Now the question is: Are we hearing sighs of relief or gasping at the rules?”

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