Canada eyes wireless auction, new ownership rules

Mon Nov 22, 2010 2:16pm EST
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By Louise Egan

OTTAWA (Reuters) - Canada will decide whether to allow more foreign investment in the telecommunications sector prior to its next auction of radio frequency spectrum in about two years, Industry Minister Tony Clement said on Monday.

Clement said he will launch public consultations "shortly" on the 700 megahertz spectrum, with the aim of auctioning it by late 2012. If the government opts to lift restrictions on foreign ownership in the sector, it must carry out those reforms before then, he said.

"You can't decide that in isolation. You've got to look at what the capital needs are for the sector, how the auctions are going to work -- are there going to be any reserves or set-asides, those kinds of things," Clement told reporters after delivering a speech on Ottawa's digital strategy.

Consultations will start early next year on a second block of 2,500 megahertz frequency, he said. Both auctions will make further spectrum available for wireless communications.

Canada's wireless sector is dominated by three companies with close to 95 percent market share: BCE Inc's Bell Canada, Rogers Communications and Telus Corp.

Canadians still pay some of the steepest wireless rates in the world, despite the entry of new players following a 2008 auction.

The 700 MHz airwaves are being freed up as most television broadcasters are due to switch from analog to digital delivery by August 2011. The frequencies are considered valuable as they can cover long distances and more easily penetrate obstacles such as thick walls and buildings.

The 2,500 MHz frequency range allows for more speed and capacity, but less easily penetrates buildings.   Continued...