Christian Paradis, Canada’s Minister of Industry, on Friday announced the release of the wireless spectrum licence transfer framework, aimed at improving competition by promoting at least four mobile network operators in every region of the country. As previously announced by Mr Paradis on 4 June, all spectrum transfer requests will be reviewed, and those that would result in ‘undue spectrum concentration, and therefore diminish competition’ will not be permitted – the attempt by Telus to acquire Mobilicity has already been blocked by this rule. Decisions on transfer requests will be made on a case-by-case basis and will be issued publicly to increase transparency and clarity. The rules apply to all licence transfers, including prospective transfers that could arise from options and other agreements – this includes the already-agreed option for Rogers to acquire cableco Shaw’s unused mobile frequencies across several regions in 2014, which is pending an application for federal permission (but which Paradis has already stated he does not support), as well as an agreement struck in May between Rogers and Videotron under which Rogers would buy a portion of unused spectrum in the greater Toronto area from Videotron. Under the newly released framework, a licensee will be required to seek a review within 15 days of entering into any agreement that could lead to a prospective transfer. Industry Canada will review a prospective transfer as though the future licence transfer that could arise from the agreement has been made. The new rules state that reviews will normally be completed within twelve weeks from the time of receipt of all required information, although this timeline may vary due to requests for further information, where the applicants require additional time to respond to specific concerns raised, or where the complexity of the issues raised in the course of a review demands a longer period of time in order to consider the effects of the licence transfer (or prospective transfer). Full details of the spectrum licence transfer framework can be found at: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10653.html.
On the face of it, the new framework appears to make it harder for the big three Canadian operators Rogers, Bell and Telus to acquire any of the smaller cellcos’ spectrum (or any unused licences), while it does not appear to place any additional obstacles in the path of foreign investors acquiring one or more of the smaller Canadian operators. US giant Verizon is expected to reveal further details soon of talks with two second-tier Canadian wireless players, Wind Mobile and Mobilicity, as it mulls a potential strategy of acquiring both companies (each with 2100MHz/1700MHz AWS spectrum in several regions) before bidding in the upcoming nationwide 700MHz 4G licence auction scheduled for January 2014, and potentially the follow-up 2600MHz auction to follow within a year.