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False Spectrum Claims from the Canadian Government

Transformation of Wireless Device

While most of us are used to politicians lying through their teeth to get votes, we in Canada generally don’t just assume that they don’t mislead us with facts that while true, don’t tell us the story they are supposed to. My current problem is with the ads on television from the Stephen Harper government concerning competition in the Canadian wireless industry.

In a recent ad they tell us that the “big 3” (Rogers, Bell Mobility, and Telus) have 75% of the airwaves (a reference to what percentage of cellular spectrum held by these companies) and they IMPLY that this somehow outrageous. This irks me on two levels. First of all (and certainly the simplest to grasp), if Canada had 4 major players (as the ads suggest we NEED), then wouldn’t 75% be EXACTLY the right amount for 3 of the 4 players to own?

Secondly, I checked the statistics on Canadian cellular subscribers. According to the latest quarterly reports from the big 3, Rogers has a total of 9,498,000 subscribers, Bell Mobility has 7,805,000 subscribers, and Telus has 7,700,000 subscribers. Between them they have just over 25 million subscribers. However, the TOTAL estimated number of cellular subscribers in the country is somewhere around 27 million, which means that the big 3 have over 90% of the subscribers.

If that’s the case, then they SHOULD HAVE over 90% of the spectrum, and not just 75% (let alone even less, as the Harper government would have you believe in their biased ads).

Okay, I get it that their motives SEEM genuine. They claim they want to lower wireless prices for Canadians and they see this happening with an increase in the number of competing providers. However, it seems rather ignorant, not only of past experience in Canada, but also with the current trend toward mergers in the rest of the world.

Canada had its first round of “new entrants” back when Fido and Clearnet showed up in the late ‘90s, but in the end these operations proved to be unprofitable and they were eventually sold to...



incumbents. In the second round of “new entrants” Canada got was Wind Mobile, Mobilicity, and Public Mobile.

The latter (Public Mobile) has been sold to Telus Mobility (with the approval of the same federal government making a big stink about how few providers we have) and Mobilicity has been mismanaged into the ground. This time around the government seems set on not allowing one of the big 3 to buy Mobilicity and the future of the company is now in jeopardy. Wind Mobile has lost the backing of its financial supporters and has pulled out of the auction for 700 MHz spectrum. This means that Wind Mobile does not have sufficient spectrum to deploy LTE and will be left behind as the world moves wholeheartedly to this technology.

Somewhere along the line this SHOULD have taught us a lesson, but instead our government just wants to keep banging our heads against the wall in hopes that if we do it long enough we’ll get smarter. I’m not the first person to suggest that 3 providers are probably all the Canadian market can sustain, and I doubt I’ll be the last. I don’t have any problem with entrepreneurs and investors taking a risk and attempting to build a 4th network in Canada, but I do take exception to our elected government wasting taxpayer money in an attempt to sway public opinion to suit their ill-advised concept of a utopian cellular market (which wisely they don’t try to cram down our throats using legislation).

I also don’t feel that free market interests are served by playing favorites so that a 4th network can get off the ground. If there truly is a niche for a new provider to fill, then they should be able to fill it without any lob-sided help from the Canadian taxpayer. I certainly don’t appreciate it being done at the expense of the provider I may already be using. I’d rather have 3 strong players that charge a bit too much than 4 weakened players that charge a little bit less.

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