CEO council, union demand telecom policy change

The country’s three big wireless carriers have found management and union heavyweights to back their calls for Ottawa to change its telecommunications rules now that U.S.-based Verizon Communications is looking at coming north.

The council represents CEOs from a wide range of Canadian industries. Board members include executives from some of the biggest companies in the country including Tom Jenkins, executive chair of Open Text Corp., Paul Desmarais, chairman and co-CEO or Power Corp., Lorraine Mitchelmore, CEO of Shell Canada and William Downe CEO of the Bank of Montreal.

The letter is signed by council CEO John Manley, who is also a member of the board of Telus Corp. Telus CEO Darren Entwistle is also a member of the council board.

Usually the council doesn’t take a position on industry-specific issues, Manley admits in the letter. But, he goes on, while the council supports the government’s desire for increased  telecom competition it believes “public policy should not discriminate against Canadian companies in favour of large foreign operators.”

The letter comes as Verizon – with revenues almost three times as much as BCE Inc.’s Bell Canada, Rogers Communications and Telus Corp.—has reportedly made an offer to buy startup Wind Mobile and is reportedly talking about buying Mobilicity.

The federal government last year changed the telecom investment rules allowing foreign companies to take complete control of a Canadian carrier with less than 10 per cent of the market to give wireless startups more access to capital. Since launching Wind, Mobilicity, Public Mobile and Videotron have only managed to claw a small amount of market share from Bell, Rogers and Telus. The trio still have just over 90 per cent of subscribers. Mobilicity has said unless it gets more money it will be in serious trouble, while Wind’s main financial backer, Amsterdam-based VimpleCom, is suggesting it doesn’t want to put more money into the Canadian division.

But Ottawa has made it clear that the incumbents have to keep their hands off the startups for the time being. In June Industry Canada torpedoed Telus’ offer to buy Mobilicity.

Ottawa has also tilted the rules for the upcoming 700 MHz spectrum auction to restrict incumbent carriers to buying only two of four blocks of spectrum in any region. Other carriers would be allowed two buy up to two blocks. If Verizon enters the Canadian market, it could potentially buy two of those blocks.

But Bell, Rogers and Telus are protesting that Verizon is too big to give advantages to.

In its letter, the council says federal telecom policy should now reflect three principles:

–domestic and foreign-owned companies should have equal ability to bid on spectrum in an open auction;

–domestic and foreign companies should have an equal opportunity to buy smaller telecom companies here;