Videotron Says Spectrum Auction Needs Limits on Incumbents
Videotron Ltee, one of Canada’s new wireless carriers, called on the government to establish rules for the country’s next wireless auction that would offer new entrants twice as much spectrum as the incumbents.
Carriers such as BCE Inc. (BCE), Telus Corp. (T) and Rogers Communications Inc. (RCI/B) that already own 800-megahertz frequency spectrum should be limited in bidding for a single 700-megahertz block, with new carriers eligible to own two 700-megahertz blocks, Videotron Chief Executive Officer Robert Depatie said in a speech at the Canadian Telecom Summit in Toronto today. Spectrum are the government-licensed radio frequencies used in wireless communications.
Canada’s Industry Minister Christian Paradis yesterday said he’ll consider all options in forming rules for next year’s auction. Wireless carriers want more spectrum to meet surging data demand as smartphone growth explodes and Rogers’ wireless chief Rob Bruce yesterday said limits on the ability of his company to bid for the 700-megahertz spectrum would be a "slap in the face" of its customers.
Videotron, based in Montreal, spent C$555 million in the latest auction in 2008 ($555 million at the time) to buy sufficient spectrum to introduce wireless service in Quebec, to tap its base at that time of more than 2.5 million Internet and cable customers across Canada’s mainly French-speaking province.
Videotron hopes to pay less for new spectrum in 2012, Depatie said in an interview after his speech.
“I’ve never seen, based on the history of auctions in the U.S., an auction going lower than the previous one, but we hope it will because C$555 million for 40 megahertz in Quebec and 10 in Ontario, that’s a lot of money.”
Carriers’ interest in the 700-megahertz frequency is high because it is effective in transmitting calls and data through buildings and densely inhabited settlements.
The Canadian government should only establish limits on spectrum purchases if it thinks a company is hoarding the airwaves it doesn’t plan to use, Ken Engelhart, Toronto-based Rogers’ head of regulatory affairs, said at a panel discussion on the topic.
“If a company has a legitimate need for spectrum, then you have an auction,” said Engelhart. “An auction says you put your money where your mouth is.”
Telus is open to compromise on the rules of an auction but there has been too much distortion in how much spectrum it controls, said Michael Hennessy, senior vice president, of regulatory affairs at the Vancouver-based company.
Edward Antecol, head of regulatory affairs at Globalive Communications, whose Wind Mobile service began operating in late 2009, said government-mandated set asides are a legitimate option to further stimulate competition.
Bell, Telus and Rogers’s dominance is a “cosy little oligopoly” which “sucks for consumers,” said Antecol.
Caps and limits "are perfectly reasonable options for consumers."
To contact the reporters on this story: Hugo Miller in Toronto at email@example.com;
To contact the editor responsible for this story: Peter Elstrom at firstname.lastname@example.org