BUSINESS

Wind Mobile CEO Slams Bell, Telus, Rogers Campaign, Defends Government's Policies

08/27/2013 03:26 EDT
CP

The CEO of one of Canada’s three small wireless companies has jumped into the fray over Verizon’s possible entry into Canada, accusing the Big Three of running a “ridiculous” campaign of misinformation in order to protect themselves from competition.

In a rebuttal to the Big Three's claims that the rules for an upcoming spectrum auction are "unfair," Anthony Lacavera, the chief executive officer of Wind Mobile, noted in a blog post Tuesday that the Big Three were given their original wireless spectrum by the government for free. Lacavera then systematically set out to demolish many of the Big Three’s claims.

In the early days of cellphones and wireless technology the government simply gave them bucketloads of Canadian spectrum for free,” Lacavera wrote.

He was evidently referring to the original 1985 allocation of the 800 mHz spectrum, which the federal government did indeed hand out to Rogers Cantel (now Rogers Wireless) and to Canada’s local phone companies, two of which are now Bell Mobility and Telus.

“If that is their baseline for what’s 'fair', then it’s not hard to understand why the Big Three feel so hard done by when they have to actively compete,” Lacavera wrote, referring to the name of the Big Three’s campaign — “Fair for Canada.”

The Big Three have been arguing in their campaign that the government’s wireless auction rules — for the 700 mHz range — are unfair because they would allow Verizon, if it came to Canada as a new wireless entrant, to bid on two of four blocks of spectrum while the Big Three would be limited to bidding on one block each.

But Lacavera said even these rules favourable to new entrants aren’t enough to increase competition in the market.

In our view, the policy (still) virtually guarantees that the Big Three, who already have almost all the spectrum in this country (most of which was given to them by the government for free), will acquire 75 per cent of the prime spectrum available,” Lacavera wrote.

The Big Three’s campaign has also argued Verizon’s entry would be bad news for rural and small-town Canadians, as that company would likely focus on large, dense urban markets. But Lacavera took exception to that argument as well.

“The Big Three are not serving these smaller communities out of the goodness of their hearts. They are serving these communities because there are customers there, and money to be made.”

For their part, the Big Three have argued they have poured billions in investment into building Canada’s wireless infrastructure over the past two decades, and only in recent years has the sector actually become “cash-flow positive” (i.e., generating more revenue than it costs to maintain.)

Lacavera also noted that all of Canada’s small wireless companies left the industry’s official association, the Canadian Wireless Telecommunications Association (CWTA) earlier this year because the group “is a mere puppet of the Big Three.”

Lacavera may have a vested interest in ensuring that Verizon is allowed to come to Canada.

According to a report in the Globe and Mail, Verizon has placed a $700-million bid for Wind Mobile, possibly as part of a strategy to start up in Canada by taking over an existing small player.

But the Globe has since reported that Verizon has put on hold any acquisitions in Canada, perhaps pending the outcome of the wireless war between the government and the Big Three wireless companies.

If the rules were changed to bar Verizon, as the Big Three want, the purported $700-million bid for Wind would likely fall through.

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