Canada PM brushes off protests, says spectrum auction to proceed

Canada's Prime Minister Stephen Harper listens to a question during a news conference at the Hilton hotel in Quebec City, August 2, 2013. REUTERS/Mathieu Belanger

(Reuters) - Canada will sell off wireless spectrum next year as planned, Prime Minister Stephen Harper said on Friday, despite protests by major telecoms firms that the auction rules favor the entry into the market of U.S. giant Verizon Communications Inc VZ.N.

The government - which has a policy of trying to increase wireless competition - expects to raise billions of dollars from the January 2014 auction of the spectrum that telecoms companies need to operate their wireless services.

“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 told reporters in Miramichi, New Brunswick.

Under the rules of the auction, Canada's three dominant players - Rogers Communications Inc RCIb.TO, BCE Inc BCE.TO and Telus Corp T.TO - may each only bid for one of four prime blocks of spectrum, while other companies may bid for two apiece.

The big three, already unhappy that Verizon may be set up a Canadian operation, say the auction rules would unfairly favor the U.S. company. They have launched a high-profile public relations campaign to persuade Ottawa to change its mind.

“I understand full well where some of these big companies are coming from. They’re important parts of the Canadian economy and they have a responsibility to protect their profits, protect their bottom lines for their shareholders,” Harper said.

“At the same time, the government has a responsibility towards a wider public interest, and Canadians are very clear about what that wider public interest is to us. They want to see enhanced competition, lower prices, better services in this area.”

The deadline for bidders to register for the auction is September 17, and the auction starts on January 14 next year.

Reporting by David Ljunggren; Editing by Janet Guttsman; and Peter Galloway