Rogers Astroturf Lobby Campaign on Spectrum Foreshadows Battle over Wireless Broadband Competition

The Rogers astroturf lobby campaign against a spectrum set-aside, which sneakily uses people interested in a notification on when LTE may be available in their market, foreshadows a major battle over the rules on the 2012 spectrum auction. Much like the 2007 battle over the AWS auction, the incumbents will argue that the market is already sufficiently competitive and that any set-aside will unfairly advantage new entrants. The 2007 battle included submissions from Rogers and Bell that insisted that Canada was already “extremely competitive” and that consumer prices for wireless services very low. For example, Rogers argued:

Canadian consumers are very satisfied with their choice of Canadian providers, pricing plans and technology options. Consumers are the first to object in the face of poor competition among service providers, yet surveys indicate the exact opposite sentiment.

The company added that “contrary to many statistics that are used and quoted irresponsibly, Canadian consumers fair very well when compared to other countries. Canadian carriers offer
some of the most competitive rates in the world.”

The government rightly rejected the incumbent arguments and established a set-aside that led to new entrants such as Wind Mobile and Mobilicity.

The impact of new competitors has been significant, as the Globe’s Iain Marlow recently reported:

A new report by Convergence Consulting Group Ltd. shows just how much pressure new entrant wireless companies are putting on the margins and metrics, such as the average revenue per user, at Rogers, BCE Inc. and Telus Corp. New entrant providers are offering combined voice and data plans that are 58 per cent cheaper than the incumbents, and their wholly-owned discount brands. For data plans, new entrant providers are charging as much as 83 per cent less.

Given the effects of new competition, it should come as no surprise that Rogers and the other incumbents will use every tactic in the book to prevent a repeat of the AWS auction and a set-aside for new entrants. Yet just as the AWS auction was about injecting much needed competition into the wireless market, the next spectrum auction is about fostering competition in the wireless broadband market. The 700 MHz spectrum is particularly well suited for wireless broadband and holds the promise of an effective alternative for those seeking something other than cable or DSL services. The consumer frustration with the broadband choices has been well-documented and this spectrum auction offers possibly the best hope of opening that market to new competitors.

That opportunity is precisely why the government should open the door to foreign investment and create a set-aside. Foreign investment is needed to allow for some major international players to consider entering the marketplace with the injection of foreign capital. Even with foreign investment, a set-aside is still needed since the economics for an incumbent are far different from a new entrant. Without a set-aside, it is likely Bell, Rogers, and Telus will inflate the prices of spectrum to keep new competitors out of the market since incumbents will overpay for spectrum in an effort to keep out new competitors. For the new entrant, pricing is based on the business case for the market, which is closer to the “real” value of the spectrum.  For Industry Minister Christian Paradis, that means ignoring the Rogers’ astroturf campaign and focusing on the policies that will have the most pro-competitive impact.


  1. Roders are lying once again.
    “Canadian carriers offer
    some of the most competitive rates in the world.”

    What a load of crap….

    for exemple: with Orange, france can pay 29 euros (about 41$) for unlimited texting, 500Mo of data, voice messages included (no air time mentionned where I looked), with a 2 year contract.

    Rogers, for a similar offer: 52,75$, voice message not included, but unlimited texting, with a 3 year contract.

    If rogers where to change the word “world” with the word” North America” they might actually be not lying(us compagnies are about as greedy then the canadian compagny).

    Oh I soo wish that the CRTC was actually there to defend the public’s interest against telecom corporation instead of defending the interest of the corporation.

  2. Synchronized Price Increase says:

    The industry could have won a gold medal in the Synchronized Swimming event as their every move to increase prices is exactly matched to each other. Surely that is a *competitive* event. 🙁

    ARPU is the only competitive key figures among Canadian Telecom industry.

  3. @Rogers “Canadian consumers fair very well when compared to other countries. Canadian carriers offer some of the most competitive rates in the world.”

    … Can I have some of that Kool-Aid?

  4. Jean-Francois Mezei says:

    Is an auction the best way to deal with this ? Auctions are designed to raise the most money to the seller. And the more the telcos pay for spectrum, the more we, the consumers, end up having to pay for the service.

    And the more participants in an auction, the higher the price will be for spectrum.

    Bell/Telus currently has no incentive to shut down its own CDMA network using up a big chunk of 850mhz. It can claim that all its sub 1000mhz spectrum is used and it needs more.

    If Bell and Rogers were told they’d get no 700 (or a very small part), they would magically find plenty of 850 spectrum that they already had.

    Videotron had a good argument: 700 should go first to those networks that don’t have sub 1000mhz spectrum so that they too can get into buildings and reach farther.

    Because of AT&T in the USA, the selection of phones working on 1700 was limited, which greatly limits competition in Canada. (for instance, new entrants can’t get the iPhone).

    Or perhaps incumbents should be told that for every 2mhz of 700 they get, they must release 1mhz of 850. This would give new entrants access to more popular frequencies. And remember that incumbent did ot get their 850 spectrum through auctions.

  5. Wow, can I get their Medical Marijuana supplier?
    If I could get high enough to think Canada has good competition in telecommunications I would definitely be feeling no pain!