Gavel in court
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The Harper government must set aside cellular frequencies for spectrum for new or small carriers to bid on in an upcoming spectrum auction, says a consumer group.

In a paper sent this week to Industry Canada, the Public Interest Advocacy Centre (PIAC) backed the government’s plan for a certain amount of spectrum to be off-grounds to the biggest carriers in next March’s AWS-3 auction.

“Spectrum is a scarce public resource that is specifically intended by the Government to be put to the social and economic benefit of all Canadians, rather than simply be sold to the highest bidder” said John Lawford, PIAC’s Executive Director and General Counsel. “Setting some of it aside so that smaller competitors aren’t blocked from offering innovate and lower cost alternatives to Canadians supports that objective.”

Industry Canada is holding a consultation on the framework for the auction of frequencies in the 1755-1780 MHz and 2155-2180 MHz bands. Unlike other auctions, it will be a sealed-bid, second-price auction.  The department also plans to auction spectrum in the 2.5 GHz band next April.

PIAC argues that there is evidence from the government’s decision not to allow all spectrum to go to the highest bidder in the 2008 AWS auction but instead have set-asides was “instrumental in introducing more competition and lower prices as a result … A spectrum set-aside is positive for consumers, who increasingly pay more and more for their wireless services, and rely on them more and more.”

However, of the four new carriers that won spectrum in 2008, only two are on solid footing — Videotron in Quebec, and Eastlink in the Maritimes — and both are cablecos. Startup Mobilicity is in protection from creditors, and while Wind Mobile has 750,000 subscribers its leading financial backer and minority shareholder, VimpelCom Ltd., has stopped putting in more money into the company.

In noting that the largest carriers — Bell Mobility, Rogers Communications and Telus Corp. — still have about 90 per cent of the cellular subscribers and some 85 per cent of the spectrum Ottawa has either given out or auctioned off , PIAC says “the incumbents have the power, and motivation, to unfairly suppress competitors from offering affordable, innovative choice to Canadians.”



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