IC Canada Announces New Telecom Rules

Blog, Commentary, Information Technology, Roland Renner, Rural

Industry Canada released two long-awaited telecom decisions yesterday.  New foreign ownership rules and also the structure of the next spectrum auction, both key to the development of mobile wireless.


Companies with less than 10% market share will have access to foreign capital, no longer subject to the limit of 46.7% direct and indirect combined.  This will newer entrants Wind and Mobilicity a leg up.  In addition, regional players who dominate smaller markets will benefit from this depending how the 10% limit is calculated.  SaskTel and MTS may have some opportunities as well as Videotron and Bragg.  MTS has already commented very positively.  http://www.winnipegfreepress.com/business/mts-lauds-tory-call-142746425.html. Time to read the fine print.

The rules for the next spectrum auction also benefit the smaller players.  There will be caps and other provisions to make sure that the big three, Rogers, Bell and Telus do not get everything in any particular market.  WINNERS WILL BE REQUIRED TO DEPLOY TO SPECIFIED PERCENTAGES OF THE POPULATION IN A TERRITORY WITHIN SPECIFIED TIMES FROM THE AUCTION.  THERE ARE NO RURAL SET-ASIDES

This looks like a substantial win for new entrants and smaller players, increasing competition and more choice for consumers.  For rural areas there could be some devils in the details.  The larger players must provide rural service as a condition of keeping their spectrum.  If they simply cross subsidize the rural areas this will conflict with the objective of creating market based solutions via rural set asides that invite carriers specializing in rural areas into the auction.  Again, time to read the fine print.