Canada to announce telecom foreign ownership rules

Wed Feb 1, 2012 6:27pm EST
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By Louise Egan and Alastair Sharp

OTTAWA (Reuters) - The Canadian government could clarify the rules for foreign investment in the telecommunications sector within the next few weeks, and outline plans for an upcoming auction of wireless spectrum, a source familiar with the matter said on Wednesday.

Industry Minister Christian Paradis is likely to lay out the new foreign investment rules either in late February or early March, according to the source, who spoke on condition of anonymity.

The move is expected to offer some eagerly awaited clarity for telecom investors impatient with the government's foot-dragging over new foreign ownership regulations.

The Conservative government has long promised to loosen restrictions on the C$40 billion ($40 billion) telecom industry as one way of easing the dominance of the three big domestic players, who control the lion's share of the market and are blamed for keeping prices for wireless services among the highest in the developed world.

Rogers Communications , Telus and BCE control 95 percent of the wireless market in Canada.

Paradis will clarify the investment rules at the same time as he releases plans for an upcoming auction of prized 700 MHz wireless spectrum. The frequency is especially useful for covering long distances - ideal for expanding into rural areas - and makes a strong signal in urban areas as it can penetrate buildings and underground parking lots.

To challenge the dominant players, the auction rules may set aside part of the spectrum for new entrants, or smaller players with less access to cash, in a bid to broaden competition in the telecom market.

But industry players and experts are wary of the government's intentions after several false starts over the last few years. Paradis said in November the file was extremely complicated and he hoped for a "balanced" approach.   Continued...