Verizon was not courted, Moore says

Minister fights Big 3 telecoms’ PR campaign

TORONTO The federal government did not court Verizon Communications Inc. and Ottawa’s policy on the wireless market does not live or die by the U.S. carrier’s decision about whether to enter the market, according to James Moore.

Canada’s industry minister told the Financial Post Tuesday that neither he nor his predecessor in the role, Christian Paradis, met with representatives from the U.S. telecom giant to persuade it to invest in the Canadian mobile industry ahead of an upcoming auction of wireless spectrum.

“Whether Verizon comes or does not come, in either circumstance consumers are going to benefit from our policy,” Moore said. “Verizon coming or not coming is not the success or failure of our government’s policy.”

Moore is conducting a series of cross-country media interviews in response to a public campaign launched by the three big Canadian telecom companies — BCE Inc., Rogers Communications Inc. and Telus Corp. — and their supporters accusing the government of crafting a policy with “loopholes” that would grant Verizon an unfair advantage in this market.

He characterized the telcos’ campaign as “impressively unsuccessful” and said it has not, in his view, resonated with Canadians, but added it has stirred up enough questions that he felt the need to defend his government’s policy aimed at, he said, promoting competition for the benefit of consumers.

Representatives from the Big Three countered the minister’s assertion the campaign has been a failure.

“More and more Canadians are voicing concerns over the current advantageous conditions that would be put in place for Verizon, especially the two-for-one advantage on the spectrum auction,” said Josh Blair, chief corporate officer at Telus.

Blair pointed to a declaration of support Tuesday from Quebec Telus employees affiliated with the Syndicat canadien de la function publique, as well as a call by the federal NDP for the government’s Standing Committee on Industry, Science and Technology to reconvene to hold hearings on spectrum policy.

Ken Engelhart, vicepresident of regulatory at Rogers, said he believes Canadians are becoming more aware of the issue and that the government’s policy doesn’t make sense.

BCE spokesman Mark Langton said the government is dismissing the concerns of individual Canadians and those represented by an array of pension, union and business groups and not addressing their questions about potential job and investment losses.

‘Whether Verizon comes or does not come, in either circumstance consumers are going to benefit from our policy.’ INDUSTRY MINISTER JAMES MOORE

Public reports that New York-based Verizon was considering a Canadian investment surfaced in mid-June. Shares of the Big Three have taken a beating since then, bouncing back slightly last week after new reports that Verizon could be cooling on immediate plans to purchase one of Canada’s startup carriers, Wind Mobile or Mobilicity, and instead focusing on acquiring spectrum in next year’s public auction for the radio waves.

Last Friday the Conservative party launched a website of its own, Consumers First, to counter the telcos’ Fair For Canada site, and the two sides have been trading increasingly public barbs.

Philip Lind, executive vicepresident regulatory and vicechairman at Rogers, told the Toronto Star editorial board in late July that federal officials had travelled to New York to offer favours and entice Verizon into entering the Canadian market.

Moore said Industry Canada representatives did meet with Verizon officials once, on May 21, but added: “It was at Verizon’s request — not our request — and it was just a basic exchange of information about the nature of the spectrum auction and what the rules are and Canada’s telecom policy and that’s it. So it’s simply not true [that the government sought out Verizon].”

The auction is now set to begin Jan. 14, with initial bids and applications due Sept. 17; the government announced the final rules in March.

In large part the rules reflect a draft policy announced last year. The structure allows new entrants to the wireless industry with less than 10 per cent market share to bid on up to two of four blocks of spectrum in each geographic area, while limiting incumbent players to bidding on just one block.

On top of those rules, the Big Three are concerned that Verizon or other foreign players are permitted to acquire the spectrum holdings of new entrants Wind and Mobilicity, while the incumbents are barred from such deals until at least next year.

They also argue that the government’s policy on mandatory cellphone tower sharing and roaming will allow a U.S. company such as Verizon to “piggyback” on Canadian networks despite never having invested in infrastructure in this country.

Moore dismissed those arguments and said he would not change Ottawa’s tower-sharing or roaming policy or further delay the spectrum auction.