The Business Council of British Columbia (BCBC) has written a letter to Industry Minister James Moore to urge him to change federal telecommunications policy.
The August 6 letter specifically asks Moore to put Canadian companies on an even playing field with foreign competition when it comes to pursuing acquisitions of smaller telecommunications companies in Canada.
Telus Corp. (TSX:T), B.C.'s largest public company, recently joined forces with Canadian rivals Rogers Communications Inc. (TSX:RCI.b) and Bell Canada Enterprises (TSX:BCE) to pressure the Canadian government to allow large Canadian telecoms to bid to buy smaller players such as Canadian cellular upstart Wind Mobile.
U.S. telecom giant Verizon (NYSE:VZ) offered to purchase Wind in July with an initial bid of $700 million, after weeks of advanced talks.
Shares in each of the three large Canadian telecoms then fell between 4% and 9% each.
BCBC's letter to James Moore also urges Moore to ensure that incumbent domestic and foreign companies have the same ability to bid on scarce wireless spectrum when it becomes available, including in an upcoming auction of the 700 MHz band.
In 2008, in an effort to promote more competition, Industry Canada set aside spectrum for new entrants, facilitating entry into the Canadian wireless market by Wind, Mobilicity and Public Mobile Inc.
In January, Industry Canada plans to auction off more spectrum – the 700 MHz band.
There are four blocks being auctioned, but two of them are off limits to Bell, Rogers and Telus because they were set aside for new entrants.
Those blocks were set aside based on the idea that small upstarts can't compete with the incumbents for a limited amount of spectrum in an open auction.
The Big Three say that justification falls apart if Verizon is considered a new entrantand is allowed to bid. With a market cap of $150 billion, Verizon is no upstart.
The final key point in the BCBC's letter is that Ottawa subject large foreign telecommunications companies, which may want to enter the Canadian market, to the same obligations to invest in and develop infrastructure as incumbent Canadian firms.
