The federal government's spectrum auction starts today with its wireless strategy in tatters. Late yesterday, Wind Mobile announced
that it was withdrawing from the auction, creating a new entrant vacuum
that seems likely to leave some of the prime spectrum in major markets
such as Ontario, Alberta, and British Columbia unlicensed and the hope
for a renewed competitive wireless environment all but dead. Indeed, the
marginal competitive gains of the past few years are now at risk and
the government's vision of four strong competitors in every market looks
like a pipe dream. The big three managed to scare off Verizon, while
the federal government's mixed messages on foreign investment appears to
have kept everyone else out.
Having made wireless competition a key policy priority - supported by a
national advertising campaign and commitments in the Speech from the
Throne - Industry Minister James Moore has little choice but to pursue a
different strategy. The government had placed its bets on improving the
competitive environment organically through foreign investment and new
entrants. With that strategy a failure (a government spokesperson claimed
the auction will still be positive for consumers but made no reference
to improved competition), it is time to focus instead on regulatory solutions.
The move toward regulated domestic roaming represents a starting point
(and presumably Wind Mobile's best hope given its lack of spectrum), but
more will be needed.
Removing all foreign investment restrictions, establishing a regulated
mobile virtual network operator market, and even considering structural
separation are some of the regulatory choices still available.
If the government still believes that a competitive wireless environment
remains a crucial economic concern, it cannot simply sit back as the
big three carriers solidify their dominance in the upcoming spectrum
auction and the prospect of viable competitors steadily disappears. The
government should complete the spectrum auction and then move quickly to
address the wireless mess with a strategy supported by targeted
regulatory reform.TagsShareTuesday January 14, 2014