May 31, 2011 / 5:32 PM / in 6 years

Rogers pushes for open Canadian spectrum auction

<p>A Rogers Communications Inc. office tower is seen in downtown Montreal, March 6, 2009. REUTERS/Shaun Best</p>

TORONTO (Reuters) - Rogers Communications, Canada’s largest wireless provider, wants the country’s next sale of airwaves to be wide open, allowing the cash-rich company to buy up as much spectrum as it wants.

That would be a shift from a 2008 auction, when the government set aside some spectrum for new entrants to foster competition in an industry dominated by Rogers and two other established operators, BCE Inc and Telus.

“The auction decides -- instead of spending money on fancy lobbyists you put your money where your mouth is,” Ken Engelhart, head of regulatory affairs at Rogers, said on the sidelines of a telecom conference in Toronto.

Critics say without limits on how much spectrum incumbents can buy, deeper pockets will let them maintain a chokehold. The three control 95 percent of the wireless market.

The newcomers -- Globalive’s Wind Mobile, Mobilicity and Public Mobile -- offer lower prices, especially for talk and text packages, that appeal to budget-conscious urban customers.

They say established carriers hoard their plentiful spectrum and should be blocked from buying as much as they want of the 700 MHz frequency, seen as valuable for its ability to travel long distances and penetrate thick structures.

All three major Canadian operators are building advanced Long Term Evolution wireless networks. Each hints that their expansion into less profitable rural areas is dependent on getting more spectrum.

“This idea that we are using it (spectrum) for anti-competitive purposes is malarkey,” Engelhart said. “We are using all of the spectrum we’ve got, all of our supplies are being used for our current LTE build.”

“The reason they want that spectrum is to put it up for sale,” Engelhart said of the newcomers.

Rogers executives even think the government should write rural expansion into the auction rules.

“Roll-out requirements are a critical piece of the puzzle that levels the playing field and ensures that everyone has the right kind of intentions for Canada,” said Rob Bruce, president of communications for Rogers.

Attendees at the Canadian Telecom Summit in Toronto will hear from Christian Paradis, the new industry minister, later on Tuesday. They will parse his speech for clues to how he may structure the auction, as well as his views of lowering barriers to foreign ownership.

Paradis, a former corporate lawyer from Quebec who replaced Tony Clement in a cabinet reshuffle, has indicated he will maintain the government’s stance that investment should be in the best interest of Canadians.

It was at this event a year ago his predecessor Clement raised the possibility of loosening ownership restrictions.

Clement said he was considering increasing foreign ownership to a cap of 49 percent, allowing complete foreign ownership in companies with less than a 10 percent stake in the market, or eliminating all barriers to foreign ownership.

Reporting by Alastair Sharp; Editing by Frank McGurty

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