NEWS

Bell cries foul over federal telecom rules

07/25/2013 11:37 EDT | Updated 09/24/2013 05:12 EDT
Bell has become the latest Canadian wireless company to cry "unfair" over telecom rules, taking out a two-page newspaper ad to tell Canadians the current regime favours a giant U.S. competitor.

Like its rivals Rogers Communications and Telus, Bell is calling on Ottawa to change its policies over foreign entry into the Canadian wireless marketplace.

With Verizon Communications, a U.S. wireless firm with 100 million customers, eyeing the Canadian market, perhaps with a potential takeover of startup Wind Mobile or Mobilicity, the big three Canadian telecom companies say federal rules put them at a competitive disadvantage.

Last week, Telus Corp. CEO Darren Entwistle warned of a “bloodbath” in wireless competition unless the rules are changed, and yesterday Rogers CEO Nadir Mohamed criticized federal rules in a chat with analysts.

Bell's argument, signed by CEO George Cope and bolstered by quotes from analysts and the business press, lays out what it calls three "loopholes" in the rules that Verizon would be able drive right through.

According to Bell, these loopholes are:

- Verizon could bid on two blocks of Canadian spectrum set aside for new entrants to the market in auction later this year. Because the big three Canadian firms are not permitted to bid on these blocks, they are likely to be sold at a lower prices.

- Verizon would not have to build its own networks to remote or rural communities, but would be able to piggyback on existing networks.

- Verizon can bid to acquire small Canadian companies such as Mobilicity or Wind, but Bell, Telus and Rogers are forbidden from bidding on them.

"A company of this size certainly doesn’t need handouts from Canadians or special regulatory advantages over Canadian companies," Bell says in its ad. But that is exactly what they get in the new federal wireless regulations."

Like Rogers, Bell calls for a "level playing field."

In June, when the new federal rules were introduced, then industry minister Christian Paradis said the federal government wants to increase competition in the wireless market and had created the regulations to encourage new entrants.

The two blocks of spectrum set aside for new players were intended to encourage the small start-ups to grow and address perceptions that Canadians pay too much for wireless services.

But the potential entry of Verizon, a company Bell says is four times the size of any Canadian telecom, has spooked the wireless industry.

Bell, the main operating unit of BCE Inc., called on the federal government to allow Canadian carriers to bid on the start-ups like Wind and Mobilicity and to require any U.S. operator entering the market to serve all of Canada.

It also calls for opening up of the auction on Canadian spectrum to all players. Four blocks of spectrum come up for auction this fall, but the three large Canadian companies can bid on just two of them.

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