08/14/2013 04:23 EDT | Updated 10/14/2013 05:12 EDT

Big 3 mobile carriers under fire from Ottawa

Both Industry Minister James Moore and Quebecor chairman Pierre Karl Peladeau have challenged the big three mobile carriers on claims they've made over the prospect of competing with Verizon.

In separate, open letters both men suggest BCE, Rogers and Telus are misleading the public with their joint “Fair for Canada” campaign, which alleges Ottawa is giving “preferential treatment” to foreign companies such as Verizon.

Verizon, one of the biggest cellphone carriers in the world, has said it is considering entering the Canadian mobile market by purchasing struggling upstarts Wind Mobile or Mobilicity.

If it does that, Verizon would be able to bid in an upcoming auction of mobile spectrum, with two of the four blocks on offer set aside for new entrants to the market.

That would not be fair, according to Canada’s big three carriers, because under the current rules the big Canadian firms are barred from buying the smaller carriers and would be blocked from bidding on the spectrum set aside for new entrants.

They also say Verizon should not be allowed to piggyback its service on their towers and infrastructure.

They are pushing for Ottawa to change the rules over the spectrum auction, though Prime Minister Stephen Harper poured cold water on those hopes last week, insisting the rules will stand. The government says increased competition will reduce costs for consumers.

In an open letter addressed to Harper, published earlier this week in the Financial Post, BCE board member Anthony Fell accused Moore of ignoring the big three’s concerns.

“There is an arrogance,” in Ottawa, “which I believe is inappropriate,” Fell wrote.

A U.S. giant like Verizon should not be allowed to take advantage of rules that were meant to assist Canadian startups, he said. He also suggested Moore may not be qualified to shape telecom policy, having only been industry minister for less than a month.

Moore posted a response on his website Tuesday night, insisting Fell’s letter is “filled with assumptions … and misinformation” about the upcoming spectrum auction and government policy.

“I think Canadians know very well what is at stake and they know dishonest attempts to skew debates via misleading campaigns when they see them,” he added.

Unions side with telcos

Peladeau echoed that point in an editorial on Wednesday.

The outspoken chairman of Quebecor — which competes against the big three through the mobile offerings of its Videotron division — opined that the government is right to ignore “the oligopoly's disinformation campaign.”

Citing recent studies and history, going back to Videotron’s arrival in the market in 2008, Peladeau supported the government’s claim that more choice will be good for consumers.

“Competition has thus far had a very positive impact on Canadians' pocketbooks and it has brought them the same technology as is available in other countries in today's globalized economy,” Peladeau wrote.

Peladeau cited a report prepared for the CRTC which noted mobile service costs have dropped 18 per cent since 2008, though that same report also noted Canadians pay the fourth-highest monthly mobile rates, on average, among the 34 member countries of the OECD.

“The only way to change that is to promote competition,” he said.

Later on Wednesday the union representing Telus and Shaw workers across Canada sided with the anti-Verizon camp.

The Telecommunications Workers Union repeated claims that the company's arrival would not necessarily mean lower cellphone bills, and would likely see Verizon focus on urban markets while ignoring far-flung rural communities.