Canadian AWS Auction Rules Aimed at Increased Competition
Industry Canada Tuesday began its version of an advanced wireless services auction, selling licenses covering 105 MHz. The agency is requiring a 40 MHz set-aside open to bidding only by a new entrant that would compete against established carriers Rogers, Telus and BCE. Canadian analysts told us the rules virtually guarantee emergence of a new national rival or at least regional competitors. The FCC did not do likewise in the recently concluded 700 MHz auction and no new national competitor emerged.
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Twenty-seven bidding groups qualified, including the big three incumbents. Companies to watch, the National Post reported, include Shaw, Manitoba Telecom, Quebecor, Globalive Communications and Data and Audio-Visual Enterprises Wireless. Industry Canada plans a 700 MHz auction when its AWS auction is complete.
“Whether a new national challenger or a series of regional interests emerge, it is likely that a cooperative build might take place,” said Iain Grant, analyst with the SeaBoard Group in Montreal: “The economics are compelling and the synergies significant.” All 24 bidders should be seen as “serious players,” Grant said.
“At least one new national player will emerge, or at least a consortium anchored by regional cable companies,” said Mark Goldberg of Goldberg & Associates. “It will be interesting to watch which global brands align with spectrum winners, both new entrants and incumbents, following the final gavel coming down.”
Grant and Goldberg agreed that they expect robust bidding despite a tough funding market. “The effects of tight capital markets appear to be minimal,” Grant said. “The impact of Canadian foreign ownership rules, and the auction condition of no-discussion among aspirants, would seem to have had more of an impact.”
The licenses are in the 1710-2200 MHz band. “Our government’s intentions are clear: To achieve lower prices, better service and more choice for consumers and business,” Minister of Industry Jim Prentice said Tuesday. “We believe in relying on market forces to the maximum extent feasible because competition benefits consumers, and consumers benefit most when markets are as competitive as they can be.”