TORONTO – Bell Canada CEO George Cope couldn’t have been more blunt or matter of fact when asked about what the auction of 700 MHz wireless spectrum, which is expected in 2012. “It has to be a wide open auction,” he said. “There can be no discussion on this.”
Cope was speaking Tuesday afternoon at the Scotia Capital 2010 Telecom and Technology conference in downtown Toronto.
Cope spoke just after both Globalive (Wind Mobile) chairman Anthony Lacavera and Public Mobile CFO Jim Hardy had addressed the very same issue – albeit with different opinions than Cope, or earlier in the day, Rogers Communications; CEO Nadir Mohamed.
Lacavera and Hardy insisted that Industry Canada, for which preparation of the next auction is a top priority, come up with auction rules similar to the advanced wireless spectrum auction in 2008 which set aside some spectrum for new wireless companies. Those rules allowed a number of new companies (which also included EastLink, Shaw and Mobilicity) to gain access to spectrum by holding off the incumbent wireless players from bidding on everything.
The AWS auction also earned the federal government north of $4 billion. The 700 MHz auction is expected to bring in even more, since the spectrum (now in use by analog TV broadcasters, which have to go digital in the most populous regions by August 31, 2011) offers much better in-building coverage, will more easily cover rural spaces and is better-suited for video than other spectrum blocks.
Hardy and Lacavera accused the incumbent operators of trying to rush the next auction (“We’d like to see it auctioned earlier,” said Mohamed Tuesday morning) while the wireless newcomers are financially spent from their respective launches – as well as squatting on spectrum they haven’t used but instead have just hoarded away from other operators.
“They say they want the 700 MHz auction to happen quickly because they say they are spectrum starved,” said Lacavera. “Of course, I would say why not use the spectrum you just bought first?”
He added Industry Canada must install special auction rules because the still-young newcomers won’t have the resources to compete with the likes of Bell, Rogers and Telus in an open auction. “The government must continue to support new entrants in that auction or we will be squeezed out,” said Lacavera, whose company and its backers paid more than $440 million for spectrum back in 2008.
Hardy added he would like to see a similar auction approach, too, and went a step further saying that the ministry should consider preventing the incumbent operators from bidding on 700 MHz spectrum altogether.
“The incumbents have gobs of spectrum they are not using,” he said. “You could argue this should be a complete set aside from the incumbents… or at least put in place a spectrum cap” so that incumbents would be limited in how much spectrum they purchase.
“No one is sitting on spectrum,” insisted Cope. “We are going through it at an unbelievable pace because of video,” then adding that the wireless newcomers don’t know this because they don’t realize yet what serving video far and wide means to a wireless net.
Besides, by the time the next auction comes around, the newcomers should be considered incumbents. “The new entrants are no longer new entrants any more,” said Cope, who added that because of the ongoing spectrum requirements all wireless companies have and will continue to have, special auction rules are unnecessary and just won’t happen, believes Cope.
“There’s not even an inkling of a possibility that the 700 MHz auction won’t be wide open.”
