By Euan Rocha and Alastair Sharp
TORONTO Feb 27 Canada blocked a joint venture
of two of the country's biggest wireless telephone carriers from
acquiring more airwaves on Thursday, sending the latest pointed
message that their dominant positions would be challenged in the
fight to win over consumers.
The government said it had declined a request to transfer 83
wireless spectrum licenses from NextWave to Inukshuk, which is
owned by Rogers Communications and BCE Inc's
Bell Canada unit.
The decision may set an important precedent for a string of
other spectrum deals being plotted as telecom companies rush to
buy up as many prized airwaves as possible.
Canada's Industry Minister James Moore said in a brief
statement the sale of the 2.3 GHz airwave licenses would have
created unacceptable levels of concentration of spectrum in the
hands of incumbent carriers, hurting competition in regions
including Montreal, Ottawa, Edmonton and many mid-sized cities.
The government said Bell and Rogers would have grown their
combined claims on available 2.3 GHz spectrum to 77 percent from
29 percent, if the deal had been allowed to proceed.
Bell said it had planned to use the spectrum in an expansion
of its latest network to rural and remote areas, while Rogers
said it wanted it to help handle heavy data use.
Both companies, however, said the rejection would not affect
their respective coverage plans.
HISTORY OF REJECTION
The government has twice blocked Telus Corp, the
third of Canada's main wireless providers, from acquiring
struggling recent entrant Mobilicity, while Rogers has struck
deals giving it the option to buy airwaves from Shaw
Communications and Quebecor.
The latest rejection shows the Conservatives are holding
firm to a plan to boost telecom competition across Canada,
including the thinly populated northern and eastern reaches
where Inukshuk largely operates, via control of the trade in
Spectrum refers to the leased airwaves wireless carriers use
to carry their customers' voice calls, text messages and
increasingly heavy mobile video streaming and other data use.
Both Shaw and Quebecor bought airwaves in a 2008 auction in
which Ottawa encouraged new entrants, but Shaw later aborted its
wireless plan. Quebecor meanwhile expanded its ambitions last
week with the purchase of 700 MHz licenses in Ontario, Alberta
and British Columbia plus its home market of Quebec.
The government raised C$5.27 billion in last week's auction,
much more than initially expected.
It applauded Quebecor's national emergence, which helps
burnish the government's policy of supporting four wireless
providers in every region, after the late withdrawal of Wind
Mobile, another new entrant, and Verizon Communications Inc's
decision not to expand northward.
"We will not approve any spectrum transfer request that
results in excessive spectrum concentration for Canada's largest
wireless companies, which negatively affects competition in the
telecommunications sector," Moore said in the statement.
Moore has previously gone head-to-head with the big domestic
operators in a public spat over whether Ottawa's policies
discriminate against locals in favour of large foreign