OTTAWA – Perhaps too much was expected of Industry Minister Tony Clement’s speech at the International Institute of Communications Canadian chapter conference on Monday.
Post-speech, we were asked by our tablemates for an initial headline. Our first response? “Meh”.
To be fair, there are a range of complex items on the minister’s plate that reaches into the telecom, content and digital industry, from new copyright bill C-32, to foreign ownership, to spectrum concerns, to rural broadband to the digital economy strategy launched in May that will touch every industry when it is released this spring.
The hope heading into his Monday talk was there’d be a little more meat on the bones, some more detail on what Clement and the ministry is thinking on some of the above issues. Instead, the speech was primarily a plain progress report with a few tidbits of new data. Minister Clement (pictured) perhaps sensed the anticipation and asked everyone early on to sit back and relax as he had a lot to get through.
The minister hit the five main points of the digital economy strategy (building infrastructure; encouraging business to adopt ICT; building a digitally skilled work force; growing successful Canadian companies; and making digital content, in whatever form, available across all platforms), adding a bit more colour to each.
Clement lauded the fact the last wireless spectrum auction (the AWS auction in 2008) helped spawn new competition in the wireless sector (does that mean there will be similar auction rules for the next auction, we wondered?) and more choice for Canadians – adding while the market must be the driver when it comes to meeting the needs of consumers, “more needs to be done and government should do its part,” he said.
He confirmed his ministry will be launching a new round of consultations leading on the 700 MHz spectrum (the spectrum now used by TV broadcasters, which they must abandon in major markets come August 31, 2011) with a goal of an auction by “late 2012”.
In the meantime, Industry will be immediately examining the wireless companies’ tower sharing policies “to reduce tower proliferation,” said the Minister (with an answer there coming by the spring). It will also freeze spectrum license fees for the time being at their current levels and the ministry is also planning to extend the length of license terms to 20 years, something wireless companies have long wanted, “for all future auctions and license renewals,” said the Minister.
However, in conjunction with the consultations on the 700 MHZ auction will be a move forward on the question of foreign investment in Canadian telecom companies. This will make things a bit more difficult, even as they are necessary.
“This just makes sense. After all, how spectrum is allocated and who is eligible to compete for it – and pay for it – are interrelated issues. And so we will consider foreign investment rules and decisions around the 700 MHz auction together, as part of an integrated regulatory approach,” said the minister.
The minister agreed that pushing the 700 MHz auction to 2012 and the 2500 MHz one beyond that “sounds laggardly, but it really isn’t,” he said in a scrum with reporters after his speech. “In order to do it right and do it effectively with the one shot that we have, it works out to two years but we’re getting started right now,” he said.
When asked about trying to come up with an answer on the right levels of new foreign investment in Canadian communications companies and whether or not Canadians care about who owns the company that provides them with service, Clement sided with lower prices.
“I think what Canadians want is a telecom sector that continues to offer greater choice, greater competitiveness in terms of price and quality – those are the things that they are looking for. There are many different ways of getting there and one of them could be increasing foreign investment,” he said.
“My gut tells me that what Canadians are really looking for is better price sensitivity and better products and more choice. That’s what their focus is. They’re less concerned about the means to an end than the end in itself and quite frankly I agree with them.”
However, before any of that, alterations to the Telecom Act to allow more foreign investment must come first, “because the companies who would be participating in the auction would need to know a) how the auction is going to work and b) what their sources of capital are going to be. The two are interrelated… and so you can’t really decide one without the other.”
The primary difficulty, however, is moving forward on foreign ownership as a minority government. ““I can see why he wants to do it, but given the minority government, it could be very challenging to sort out foreign ownership,” said Rogers SVP regulatory Ken Englehart in a chat with Cartt.ca at IIC yesterday.
Engelhart, however, applauded the minister’s moves and is hoping the ministry is moving down a path of better, more transparent spectrum planning.
“This is one reason why we have said we would like to see a long term spectrum plan so that we’ll know – the same way you know there’ll be an election on four years – that there will be a spectrum auction at this time with these rules,” he added. “The policy uncertainty makes it difficult to plan… so it would be very helpful for us to know what’s coming on board and when and with what rules.”
Seems as though the industry will have to hurry up and wait.
