There have been reports that big U.S. carrier Verizon wants to buy Wind Mobile — and possibly struggling Mobilicity — as a way to enter the Canadian market.
Canada's big wireless carriers have launched a media blitz to warn that, under the current rules, they would be at a disadvantage if Verizon were allowed into the market.
With Industry Canada just months away from another wireless spectrum auction, Industry Minister James Moore needs to take time to rethink the auction rules, said Canadian Chamber of Commerce president Perrin Beatty.
"As a former minister responsible for Canada's telecommunications policy, I can say that it's infinitely more important to be right than to be fast," Beatty said in a statement posted online Thursday.
"With so much at stake for Canada, it's important to take whatever time is needed to get the decision right."
Verizon is also considering entering the spectrum auction set for January. Spectrum is the term used to describe frequencies used by wireless carriers that are owned and licensed by the government through bidding.
The next auction is particularly crucial because the 700 MHz frequency will be on the selling block.
The Chamber of Commerce is the latest organization to voice its frustration with the rules governing new entrants into Canada's telecom industry.
The Canadian Council of Chief Executives and the Communications, Energy and Paperworkers Union of Canada have called on the government to allow all wireless companies to operate under the same level playing field.
Moore has rejected pleas from Bell (TSX:BCE), Rogers (TSX:RCI.B), and Telus (TSX:T) to rethink the rules, suggesting he will stick to the policy on selling wireless spectrum that was in place the last time there was an auction in 2008.
That policy, modified only slightly in 2012, allows for foreign ownership of Canadian carriers with less than 10 per cent of the market.
It also prevents established Canadian companies from buying small carriers.
With a combined subscriber base of nearly 25 million customers, Bell, Rogers and Telus currently own the vast majority of Canada's wireless market.
In a statement issued Wednesday, Moore said more competition in the telecom industry has been good for consumers.
"Our policy has been clear and remains unchanged: greater competition and liberalized investment has meant more choices at lower prices for Canadian families," Moore said.
Moore also appeared to pre-empt the comments from Beatty, saying the Harper Conservatives have already spent enough time considering the rules before putting them in place.
"Our government's telecommunications policy was not created overnight," he said.
"It is the result of a vigorous consultation that started in 2008 and continues today."
But the government must now consider the consequences of its policy on not just the big players, but the new, smaller ones, too, said Beatty.
"Will (the small carriers) survive now that international giants are poised to take advantage of the special benefits designed specifically for our smaller domestic players?" he said.
"It will be a huge black eye to the government if these players are swallowed up."
All three of Canada's major telecom companies reached out to Prime Minister Stephen Harper early last month, urging him to close three loopholes in the rules that they say favour foreign interests.
On Thursday, they repeated the call for Ottawa to permit any carrier to bid on two blocks of prime spectrum in the upcoming auction.
In separate statements, they also urged the government to require American carriers to build their own wireless infrastructure across the country and to let major Canadian carriers bid against major foreign firms to acquire wireless startups.
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