Consumer groups back Ottawa’s policies to spur wireless competition

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Some of this country's largest consumer groups are wading into the public debate erupting over Ottawa's wireless policies, arguing that ordinary Canadians would benefit from increased competition.

The Consumers' Association of Canada and the Public Interest Advocacy Centre issued a joint-release on Tuesday backing Ottawa's push to stimulate more competition in the $19-billion wireless market, including rules for an upcoming spectrum auction that offer incentives to new-entrant carriers.

In doing so, consumer groups are attempting to defuse blistering criticism by the Big Three carriers that the auction rules would unfairly advantage deep-pocketed foreign telcos like Verizon Communications Inc. at the expense of Canadian companies. Telus Corp., Rogers Communications Inc. and BCE Inc. have also warned that Ottawa's policies could result in job losses and scaled-back investment in rural Canada if Verizon capitalizes on the government's existing policies.

"Bell, Telus and Rogers are trying to scare Canadians with misinformation," said Bruce Cran, president of the Consumers' Association of Canada, in a release. "We are happy that new Industry Minister [James] Moore is staying the course on spectrum."

Incumbent carriers, though, have argued the government's rules have created a tilted playing field that will provide Verizon with privileged treatment should it enter the Canadian market. Their main beefs are that Verizon would be able to qualify as a "new entrant" carrier, allowing it to buy more spectrum than big Canadian carriers in the 700 MHz auction in January.

Another point of contention is that Verizon would be clear to purchase struggling new-entrant carriers like Wind Mobile and Mobilicity at "fire-sale prices" because major Canadian players are banned from bidding on those assets.

Moreover, current rules would allow the U.S. telecom giant to piggyback off existing Canadian network infrastructure by making use of tougher tower-sharing and domestic roaming requirements.

"The spectrum auction rules are designed to produce a more competitive wireless market that will lower prices for consumers – that's what the big three don't want you to get," stated John Lawford, executive director and general counsel of PIAC.

Consumer groups have begun to speak out as the labour movement has aligned itself with big telcos, warning that Verizon's potential entry could spur job losses and hits to pension plans.

Big telcos are also ratcheting up the pressure on Ottawa. On Monday, Telus filed an application for a judicial review of the federal government's new rules governing spectrum transfers between telecom carriers – a move that is also being applauded by at least one major union.

"Yes, I support their action. But not sure if we will be interveners. We are looking at all our legal options," wrote Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada in an e-mail on Tuesday.

Online advocacy group OpenMedia.ca urged the government to resist caving to the pressure from "big telecom lobbyists."

"Canadians are expecting Industry Minister James Moore to move forward and open up wireless networks to new Canadian telecom startups" said OpenMedia.ca executive director Steve Anderson.

"It's not lost on Canadians that Big Telecom's expensive PR campaign to mislead citizens and pressure our government is being paid for on backs of price-gouged cellphone customers. Canadians have been on the receiving end of systematic mistreatment from these providers and this disrespectful PR campaign shows more than ever how critical it is for the government to rein in these telecom bureaucracies."