OTTAWA Aug 21 Canada is focused on boosting
competition in the telecom sector and will examine any move by
industry leader Rogers Communications Inc to back a
private equity bid for two small wireless carriers, Industry
Minister James Moore said on Wednesday.
The deal would be a way to thwart the possible entry of U.S.
giant Verizon Communications Inc into a Canadian market
where Rogers and two other players, BCE Inc and Telus
Corp, hold some 90 percent.
Reuters and other media reported on Aug. 2 that Rogers,
Canada's largest wireless carrier, wants to help Toronto's Birch
Hill Equity Partners fund a purchase of controlling stakes in
two small players who entered the Canadian market less than five
Neither Rogers nor Birch Hill have publicly acknowledged the
Speaking in an interview with Reuters, Moore said he could
not comment on the plan, but his focus was on competition.
"The large three already have 90 percent of the footprint,
and we didn't develop our telecom policy...to have a larger and
larger footprint of Canada's largest firms and thereby limiting
the degree of competition in the Canadian marketplace. I don't
think that serves consumers," he said.
"I'm not going to pre-judge a proposal. If a formal proposal
is put to me, put to my department, we will examine it in good
faith, objectively, about what it is they have in mind. But our
goal is more competition."
Moore, who took up his portfolio last month, said the issue
is not black and white. He pointed to an agreement between Telus
and BCE's Bell to share infrastructure, and said the government
would not stand in the way of that.
The next chance to open up Canada's telecoms market comes
with a 2014 auction of valuable wireless spectrum where the
rules are skewed in favor of new entrants. Verizon has not
confirmed that it will bid in the auction, saying only that it
is exploring the possibility of entering the Canadian market.
The three main Canadian players say the rules are unfair and
have launched a high profile campaign of advertising and media
events to swap public opinion and persuade the government to
change its mind.
Moore is not budging.
"The government's policy on the auction is not changing.
We've already delayed the auction twice. We arrived at the
policy after a great deal of consultation...and we've arrived at
a policy we think works," he said.
He said Canadian officials had provided information on the
wireless market to Verizon in a meeting in New York at Verizon's
request. He noted the importance that Canada placed on rural
markets and on the overall marketplace.
"It'll be not a cakewalk for anybody," he said.
The established carriers say the government is not providing
a level playing field. Operators which do not have at least 10
percent of the market can bid for more prime blocks than the
existing players, they say. As a result, Verizon can swallow up
the small players, which the Big Three are not allowed to do,
Moore noted that the existing players have the advantage of
being able to bundle their cell contracts with other products
including cable service.
He left the door open to further liberalization of both
broadcasting and telecommunications in line with recommendations
from a government-appointed panel in 2008.