TORONTO (Reuters) - The battle between Canada's three large wireless carriers and the Canadian government escalated on Monday with one of the incumbents, Telus Corp (T.TO), taking the government to court over a recent decision over the transfer of spectrum licenses.
Telus said in filings with the Federal Court in Ottawa that it is seeking clarity on the legality of the government's decision last month, which potentially changes the rules around transferring bandwidth rights between carriers.
The challenge is the latest salvo fired against the government which is seeking to boost competition in the sector to bring down average bills for Canadian consumers.
Telus, Rogers Communications (RCIb.TO) and BCE Inc (BCE.TO) say the government is giving an edge to foreign wireless majors like Verizon Communications Inc (VZ.N), which have expressed an interest in entering the Canadian market.
The three incumbents, which between them own a huge stable of media assets across Canada, have launched a wide-ranging lobbying and public relations campaign to back their case that rates charged by Canadian wireless companies are lower than those of U.S. rivals.
In June the government effectively foiled Telus's C$380 million ($370 million) bid for struggling Canadian wireless start-up Mobilicity by blocking the transfer of spectrum licenses.
It also indicated it would not allow spectrum owned by Mobilicity and slightly larger rival Wind Mobile to fall into the hands of the incumbents, if such deals resulted in undue spectrum concentration in the hands of a few.
Telus says this could put billions of dollars of investment at risk, cost Canadian jobs and result in foreign companies being given advantages over local companies.
Sources have confirmed to Reuters that U.S. wireless giant Verizon has made a bid for Wind Mobile and that it is also in talks with Mobilicity.
Telus argues that when Mobilicity and Wind bought their spectrum, they did so under the understanding they could sell those licenses to the incumbents after five years.
"The minister did not have the statutory power to interfere with those vested rights," Telus said in its court filing.
A spokesperson for the government was not immediately reachable for comment.
Reporting by Euan Rocha; Editing by David Cowell