Canadian wireless operator Telus is taking the country’s government to court over a policy which rewrites the rules of spectrum transfers and gives the government final say over whose hands frequencies end up in.
According to court submissions filed…
Canadian wireless operator Telus is taking the country’s government to court over a policy which rewrites the rules of spectrum transfers and gives the government final say over whose hands frequencies end up in.
According to court submissions filed yesterday it is seeking a judicial review of the new guidelines from the federal court.
At the end of June Ottawa released rules which allowed it to block transactions which could result in “undue spectrum concentration” as part of its continuing bid to promote competition in the wireless market.
The government’s stance blocked Telus’ agreed C$380m takeover of struggling smaller operator Mobilicity, an acquisition designed to bolster Telus’ spectrum holdings.
Telus is seeking clarity from the court as to whether the government has the power to re-write the rules for transferring spectrum licences mid-term and whether the industry minister can personally approve changes of control in companies, the company said in a statement.
“Canadian investors put billions of dollars into the new wireless companies understanding they could not transfer their spectrum for five years but would be able to do so after that time, giving them a way to get some money out if the firms ran into financial difficulty,” the company said.
“The minister’s statements seem to re-write that to indefinitely extend that restriction, which could well cost those investors millions of dollars while preventing Canadian companies like Telus from purchasing other Canadian companies in financial distress. It could also force those companies to sell at fire sale prices to foreign companies, in the absence of real competition to buy them.”
Telus concluded by saying: “We are optimistic the new industry minister, James Moore, will see the logic of our position and clarify the rules.”
The legal action comes amid a fierce lobbying campaign by Telus and its fellow incumbent Bell Canada and Rogers Communications against the rules of January’s auction of 700 MHz spectrum.
Under the terms of the tender four licences will be sold and the three large existing operators will be allowed to buy one each. However a new player – such as US telecoms giant Verizon Communications, which is looking to enter the market – will be allowed to buy two licences, which would leave one of existing operators empty handed. Given that it is the smallest of the incumbents, that unlucky operator could be Telus.
Telus has mandated Nelligan O’Brien Payne to act on its behalf, according to a court filing.
