There is no loophole that will let a big foreign carrier come here and take over the cellular industry, says government

 

Until now the wireless war has been duelling spokesmen. Now it’s fighting Web sites.

Tired of being outnumbered by its critics, which include CEOs of major telecommunications companies, a union, some academics and industry consultants, the Harper government has launched a public relations offensive.

One part of it will see Industry Minister James Moore being interviewed by general news and technology reporters. But the government also launched on Friday a Web site called “Consumers First” sponsored by the Conservative Party of Canada with arguments rebutting critics and asking supporters to sign up.
 
Bell, Rogers and Telus have a similar Web site called “Fair For Canada.”
 
Both sites ask supporters to sign up, leading to the prospect that in a few weeks number will be available to show which side has the most backers.
 
While Consumers First isn’t officially a government Web site, it leads with a quote from the prime minister,  constantly refers to “our government,” says “our actions have seen clear results” and asks readers “are you with us?”
Highlighting the site are squares with two big numbers:

–20 per cent (it explains that since 2008 — when an auction for wireless spectrum allowed new carriers including Mobilicity, Public Mobile, Videoton and Wind Mobile to get into the market — the price of wireless service has dropped by almost that much)

–and 25 per cent (the increase in the number of jobs in the wireless industry, an apparent rebuttal to the Communications and Paperworkers Union, which alleges that if Verizon Communications enters the market jobs will be lost.

The site also tries to counter what it says are four myths opponents are firing at it.

Arguably the most important is that there is a “loophole” in the rules for January’s auction of spectrum in the 700 MHz band that will allow Verizon (or any large foreign carrier that is an auction bidder).

Critics say when the government set up auction rules favouring new carriers it didn’t think a company the size of Verizon would take advantage of them — and put carriers like Bell [TSX: BCE], Telus and Rogers at a disadvantage.

Verizon has been considering buying Wind, and possibly Mobilicity, in time for the auction. It had to make a decision by Sept. 17. According to the Globe and Mail, it has put off a decision to buy a small carrier until after the auction. Meanwhile it may be a bidder on its own.

But, the website says, “there is no loophole. Our government is supporting increased competition in our wireless sector, which is intended to produce more choice and lower prices. Canada’s wireless industry is currently dominated by Canadian companies. The Canadian incumbents already hold 90 per cent of the telecommunications market and own 85 per cent of the wireless spectrum in Canada.

Other myths the government rebuts include

–“Canadians already have some of the lowest cell phone bills in the world.”

 “Fact: Canada is ranked among the ten most expensive countries for wireless services in virtually every category by the Organization for Economic Co-operation and Development (OECD).

The web site doesn’t say but the OECD report figures are 12 months old.

–“Canada’s roaming rates are competitive with other countries.”

“Fact: Canada has among the highest roaming rates in the world.

It says the source is a 2011 OECD report, which would have used 2010 figures.
 
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“Foreign entrants cannot enter into Canada and “take over” the Canadian telecom market,” says the site. “Foreign entrants are allowed to invest in companies that hold less than 10 per cent of the Canadian market. A foreign entrant cannot simply “buy up” other Canadian wireless companies to grow beyond the 10 per cent limit; they must grow their company by competing and adding to their subscribers.”
 

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