Last week the U.S. Federal Communications Commission politely announcedit will peer into the wireless industry's honesty, monopolisttendencies and lack of imagination. The FCC didn't word it that way,but that's what it amounted to. The agency is also nosing intoexclusive handset deals manufacturers are striking with wirelessoperators. For some of their concerns, the commissioners should come uphere for a few lessons.
If the FCC would liketo learn how to inject some competitiveness in the wireless sector intheir territory, Industry Canada will be pleased to show it how to setup a spectrum auction with set-asides for new entrants. Now incumbentshave only 85 per cent of the licenced spectrum available. Well, it's astart. And Industry Canada can be proud of adding the little details,like forbidding incumbents from buying any new entrants for five yearsand obliging them to share antenna locations with the upstarts. Ottawaeven included an arbitration system should there be any honest disputesbetween gentlemen.
The department may even show off theunexpected $4.2 billion windfall it received (OK, that's in Loonies)from stacking the deck. On the other hand, the commissioners should bewarned to bring ear muffs if they talk to Bell, Rogers and Telus aboutthe auction, for the air will turn decidedly blue. They're stillgnashing their teeth at how much they had to spend to keep the upstartsfrom getting any of the prized 20Mhz spectrum over the nation's cities.
Likethe U.S., there has been some consolidation among wireless carriers uphere – Rogers bought Fido, Telus bought Clearnet. Sensing that morecompetition might bring wireless rates down, Ottawa set up what isadmittedly a stacked deck in the auction. More than a year after theauction we've already seen benefits, with fees dropping and theincumbents about to ratchet up their data speeds. Coincidence? I thinknot.
Mind you, there's no guarantee the new spectrum holders,who have yet to open for business, won't be swallowed up five or sixyears from now. Their loyalty is to their shareholders, and if anincumbent makes an offer they can't refuse … but it's a start. On theother hand, look at the drama we're about to get! An Egyptianbillionaire is blowing into the country! AToronto multimillionaire might eat into the market! When will thatthat Western-based cableco join the stampede? How will that maritimecableco brag about its spectrum?
My only advice to the FCC is to come up here before the snow flies. Canada can be a chilly place.
