Harper vows to stick to wireless plan
Stephen Harper says the government’s wireless policies will help the Canadian public. Telecom companies say the policies will give an unfair advantage to foreign competitors.
By: Dana Flavelle Economy, Published on Fri Aug 09 2013
Prime Minister Stephen Harper said his government is sticking with controversial wireless industry policies despite the growing outcry from Canadian cellphone companies over what they call an unfair advantage for foreign competitors.
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“Our government has pursued extremely consistently and extremely clearly a policy of fostering greater competition in this industry for the benefit of consumers,” Harper told reporters in Miramichi, N.B., in response to questions about the Canadian industry’s stance.
Earlier Friday, BCE Inc. president and chief executive officer George Cope warned Ottawa’s policies, including the rules for an upcoming spectrum auction, could lead to fewer jobs, less rural service and lower investment in the cellphone industry.
“The reality is rural Canada will probably not see the expansion of LTE (the latest generation of cellphone service). We’ll have to take that capital and hunker down in the major cities. There will be jobs affected,” Cope told the Star’s editorial board.
Spectrum refers to the airwaves cellphone voice and data service travel on. The federal government sells new spectrum at auctions, which raise billions for the government and allow the companies that bid successfully to provide better service to customers.
Canadians’ pension plans will also be hurt as investors drive down the value of the Canadian telecom companies’ shares, Cope warned.
Investors have lopped $14.6 billion in value off the stock of Canada’s three largest telecom companies since U.S.-based wireless giant Verizon Communications Inc. said in June it was considering a move into Canada.
Canada’s telecom companies, including BCE Inc., Rogers Communications Inc. and Telus Corp., all say Ottawa’s rules will give Verizon an unfair advantage both in terms of access to their networks and to crucial new spectrum.
“We are not against Verizon coming to Canada. We are not against competing with anyone. The issue for us is it has to be on a level playing field,” Cope told the Star.
At issue for the Canadian telecom companies are a series of federal measures they say give foreign firms like Verizon the right to buy smaller Canadian startups, such as troubled Wind Mobile, while denying the Big Three Canadian companies the same opportunity.
Furthermore, under Ottawa’s rules for the upcoming spectrum auction, new entrants into the market have the right to bid on two of four prime blocks of spectrum, while Bell, Rogers and Telus are limited to one block apiece.
Winners of next January’s auction will get access to the 700 megahertz spectrum, which will improve signal service in elevators, concrete buildings and other dense downtown locations, while also making it cheaper to serve rural areas.
The Communications, Energy and Paperworkers union, which represents 35,000 telecom workers across the country, said it plans to hold a mass protest in downtown Toronto Aug. 30 to draw attention to the impact on jobs.
“We’re going to turn the heat up. We’re going to do things the corporations can’t. We’re going to put people on the street,” CEP president Dave Coles told the Star during an unusual joint editorial board meeting with BCE Inc.
While Harper said he understands large publicly traded companies have to stand up for their shareholders and employees, he also said Canadians want to see more competition and lower cellphone rates.
Harper said the federal government will proceed with the auction as planned.
“We have every intention of continuing that policy in the interests of Canadian consumers and the broad Canadian public, including proceeding with the auction as we have laid out for some time,” Harper said.
“While I appreciate some companies have interests that are very important, our government’s first priority is the wider Canadian public and Canadian consumers and we are convinced this is where they want to see us go,” Harper said.
With just six weeks to go before interested parties must register their intention to bid, there’s still time for Harper to change course, an industry association said.
“If the government wants to open the borders, they must close the loopholes first,” said Bernard Lord, president of the Canadian Wireless Telecommunications Association and a former Tory premier of New Brunswick. “It’s simply unfair to let a large American company come in and be able to bid on two of the four spectrum blocks when some of the Canadian companies can only bid on one.”
If more foreign firms enter the auction, Canadian companies could be completely shut out of the new spectrum, BCE said it warned senior officials in Ottawa more than a year ago.
Yet, Ottawa did nothing to close a “loophole” that could be used by Verizon and other foreign firms to dominate these important new airwaves, Cope said Friday.
“I talked to Ottawa in March 2012 and said, ‘I’m really concerned about it.’ I was told not to worry,” Cope said.
Rogers has accused Ottawa of openly courting Verizon.
Cope said Verizon’s prices are higher than Bell’s. Comparing their most popular monthly plans, he said that on July 19, Bell’s cost $55 while Verizon’s cost $57.
Canadian Auto Workers national president Ken Lewenza said other foreign takeovers, such as Caterpillar’s purchase of London’s Electro-Motive Diesel Inc., have led to plant closures and job losses.
With files from Star wire services