Bell and Telus have asked the Federal Court to block Videotron’s purchase and revoke its bidding rights for certain set-aside 5G spectrum licenses in the 3,500 MHz spectrum auction that concluded on July 29.
They also demand that ISED hold a new auction for the contested spectrums once they’ve been released.
In the 3,500MHz bidding process, Videotron was able to acquire set-aside licenses in Manitoba, Alberta, and British Columbia in addition to licenses in Ontario and Quebec. Videotron says it’s eligible as it provides over-the-top fibre optic internet to business customers through its affiliate company, Fibrenoire.
To foster greater competition, ISED and the CRTC set aside around 25 per cent of the total 3,500MHz spectrum for regional facility-based carriers to compete against the national carriers that have 10 per cent more of the market share.
To qualify to bid on the set-aside licenses, the provider must operate in the Tier 2 areas, which are generally province-wide, as well as the specific Tier 4 areas where they’re providing wireless service.
Unlike Bell, Rogers and Telus whose service areas span Canada, Videotron chiefly provides service in the province of Quebec and Ottawa in Ontario. When its customers travel outside of its native coverage areas, they switch to Rogers’ networks to maintain their connections.
In its court filing, Bell said that Videotron does not qualify as a set-aside bidder in Manitoba, Alberta, and British Columbia according to ISED’s Policy and Licensing Framework for Spectrum in the 3500 MHz Band which specifies that:
“Eligibility to bid on set-aside spectrum will be limited to those registered with the CRTC as facilities-based providers, that are not National Mobile Service Providers, that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 area of interest, effective as of the date of application to participate in the 3500 MHz auction.”
Bell argued that because Fibrenoire is an over-the-top service, it does not develop its own infrastructure and therefore is not a facility-based provider. Moreover, Bell said that Fibrenoire does not provide telecom services to the “general public”, only to businesses.
Furthermore, Bell alleged that ISED “unreasonably interpreted and applied the auction framework, discriminated among bidders, and exceeded their statutory authority” as ISED did not adequately explain how it qualified Quebecor as a set-aside bidder.
Pierre Karl Péladeau, chief executive officer of Quebecor, Videotron’s parent company, rebuffed the claims that ISED’s selection process was unfair.
“Videotron secured the right to bid on set-aside spectrum in several provinces outside Quebec based on the activities of its affiliate Fibrenoire Inc.,” said Péladeau in a statement dating back to mid-August. “Detailed evidence regarding these activities was provided to ISED during the auction application process. It was based on this evidence that ISED correctly determined Videotron’s eligibility.”
“This is just another attempt from Bell and Telus to eliminate real competition, but Canadians deserve better than today’s overpriced wireless marketplace,” said Péladeau in a Canadian Press report.
