Canada's 700MHz auction pushed to January 2014, Telus denied Mobilicity spectrum transfer

Oh, Canada. Just one day after we received word of the CRTC's new wireless code, Industry Canada -- its government's equivalent of the FCC -- announced further postponements of the country's pending 700MHz spectrum auction. Already delayed from the first half of this year to November, IC is pushing the auction back yet another two months to January 14th, 2014, while the application deadline has been reset for September 17th of this year. The main reason for the setback? This morning, the government denied Telus' request to transfer AWS spectrum from Mobilicity -- one of the most important factors in the potential merger of the two networks. As a result, IC decided to allow more time for the affected companies to figure out what to do next; more than likely, Telus will need the extra two months to pull an AT&T and rethink its acquisition strategy. Read the release below for a few more details behind the rationale.

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Harper Government Protecting Consumers and Increasing Competition in Canadian Wireless Sector

OTTAWA, ONTARIO--(Marketwired - June 4, 2013) - The Honourable Christian Paradis, Minister of Industry, today announced decisions to further promote competition in the Canadian wireless telecommunications market to give Canadians access to the latest technology at better prices.

"Our government is clearly committed to encouraging competition in the wireless market so that Canadian families will benefit from cutting-edge technologies and services at affordable prices," said Minister Paradis. "I believe the basis of a strong economy is a competitive marketplace and consumer choice. We will continually review the regulations and policies that apply to the wireless telecommunications sector to promote at least four wireless providers in every region of the country so that Canadian consumers benefit from competition."

The Minister also announced that TELUS' application to transfer Mobilicity's spectrum licences will not be approved. Mobilicity's licences were among those set aside for new entrants in the 2008 Advanced Wireless Services (AWS) auction, which included restrictions on transferring licences to incumbents.

"Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit," said Minister Paradis. "Our government will continue to allow wireless providers access to the spectrum they need to compete and improve services to Canadians. We are seeing Canadian consumers benefit from our policies and we will not allow the sector to move backwards. I will not hesitate to use any and every tool at my disposal to support greater competition in the market."

In addition, the Government also outlined improvements to the policy on spectrum licence transfers that will be released in the coming weeks, which followed consultations launched in March 2013. Going forward, proposed spectrum transfers that result in undue spectrum concentration-and therefore diminish competition-will not be permitted. This policy will apply to all commercial mobile spectrum licences, including the 2008 AWS licences.

All applications for licence transfers will be reviewed on a case-by-case basis and decisions will be issued publicly to increase transparency.

In light of these decisions, the timing of the 700 MHz auction has been updated. The application deadline will now be September 17, 2013, and the auction will commence on January 14, 2014. These new dates will provide companies with additional time to consider today's decisions and finalize their approaches to the auction process.

In 2008, the Government set aside AWS spectrum for new entrants and introduced roaming and tower-sharing policies. In 2012, foreign investment restrictions were lifted for telecom companies that hold less than a 10-percent share of the total Canadian market. Earlier this year, the Government announced several measures, including expanding and extending the requirement for companies to provide roaming to competitors, strengthening cell tower sharing rules, and ensuring at least four providers in every region can acquire spectrum in the upcoming 700 MHz and 2500 MHz auctions.