Last remaining national indie cell phone provider withdraws from crucial auction for wireless infrastructure, signalling consolidation of stranglehold by the Big Three
January 13, 2014
The auction starts tomorrow, Tuesday January 14. Up for auction are important blocks of 700 MHz wireless spectrum, a scarce and vital public resource that mobile devices use to communicate with each other. Independent provider Wind pulled out of the auction late Monday, dealing a huge blow to hopes the auction could result in lower prices and improved choice for Canadians.
Responding to Wind’s just-announced withdrawal from the auction, OpenMedia.ca is saying that the government must now go further and take action to stop Big Telecom blocking Canadians’ access to independent, affordable wireless options. OpenMedia.ca is leading a sustained, 70,000-strong nationwide campaign to call for lower prices and greater wireless choice.
OpenMedia.ca Executive Director Steve Anderson said: “Today’s development shows the government just hasn’t gone far enough to stop the Big Three (Bell, Rogers, Telus) from strangling our access to independent providers. While Minister Moore has taken positive steps since taking on the issue, it will take more significant measures to fix our broken cell phone market. The government should act immediately to stop the Big Three from using their telecom infrastructure to block independent providers. Tens of thousands of Canadians have requested this action and certainly today’s development should be more than enough for the government to adopt this common-sense policy.”
Anderson continued: “This government has promised Canadians that it will lower the sky-high wireless prices that are holding our whole country back. But the positive steps they’ve announced come too little too late. As of now it looks as though the Big Three will continue to control over 90% of the cell phone market, and that has to change. Canadians are rightly fed up with our old-fashioned high-cost telecom model. It’s past time and common sense that we split the wireless networks off from the Big Telecom providers so that Canadians can have unencumbered access to quality telecom services at an affordable price.”
Cell phone users across Canada are already expressing disappointment that the auction looks likely to consolidate Big Telecom’s stranglehold over a broken telecom market which features some of the highest prices in the industrialized world.
10 remaining bidders will take part in the auction, out of 15 which initially registered an interest. Participants include the Big Three (Bell, Rogers, and Telus) along with regional providers such as MTS, Sasktel, TBayTel, and Videotron. No large foreign telcos have registered to take part in the auction, despite a major political debate last summer about the potential involvement of U.S. giant Verizon.
The auction is especially important because the type of spectrum up for grabs more easily penetrates walls and other physical obstacles, boosting cell phone signals in buildings. It also travels longer distances, making it important for improving the often terrible quality of wireless service in rural areas.
Ottawa raised $4.25 billion from the most recent wireless spectrum auction in 2008. According to the CBC, this time Ottawa stands to raise at least $897 million even if nothing more than the minimum starting bids get offered. OpenMedia.ca says this revenue should be spent on ensuring Canada catches up to its global counterparts when it comes to affordable, accessible wireless access.
Bidding for the auction commences on Tuesday January 14. Auction winners will be determined using a mathematically complex combinatorial clock system. The duration of the auction depends on the number of bids received for each block of spectrum - with estimates ranging from two to seven weeks. The government will not comment while the auction is ongoing, but must announce the results within five days of the end of the auction.
OpenMedia.ca is a network of people and organizations working to safeguard the possibilities of the open Internet. We work toward informed and participatory digital policy.
About the Demand Choice campaign
The Demand Choice campaign was launched to pressure decision-makers to take action for greater choice and lower prices in Canada’s cell phone market. Early in 2012 OpenMedia.ca launched a campaign decrying the price-gouging poor customer service and lack of choice in the cell phone market at StopTheSqueeze.ca.
OpenMedia.ca then highlighted Canadians’ Cell Phone Horror Stories in a crowdsourced submission to the CRTC, and released a citizen-driven report entitled ‘Time for an Upgrade’ detailing their findings and recommendations.
This citizen pressure resulted in a broadly positive new set of customer-friendly rules for wireless companies – national rules that reign in punitive three-year contracts, make it easier to switch to a new affordable provider, and impose caps on data roaming fees.
The Big Three cell phone providers recently unleashed an expensive PR campaign to mislead cell phone users. Canadians took to the Internet to ridicule and debunk the Big Three’s claims in a wide variety of ways - speaking out on reddit and on Facebook, and even creating parody websites, parody videos on YouTube and parody accounts on Twitter. We’ve also seen citizen-produced op-eds appear in newspapers across the country, taking the Big Three to task for their years of terrible customer service.
Over 60,000 Canadians have now participated in the Demand Choice campaign, with more standing up for wireless choice and affordability every day.
Communications Manager, OpenMedia.ca
- In 2007 the Conservative government made a promise to reserve key spectrum assets for new entrants. Source: Reuters
- The Conservative government’s 2011 platform promised “to increase competition and choice and to lower costs for wireless consumers”. Source: Conservative Party 2011 Platform, page 15
- For an explanation of why your high cell phone bill has nothing to do with Canada's size, check out this article by OpenMedia.ca's Catherine Hart.
- Industry Canada clearly stated that only "new entrants" were eligible for the AWS wireless spectrum set aside in 2008. Industry Canada further stated that “changes made after the application deadline which create an Association with another applicant are not permitted, and any applicant who has formed such an Association will be disqualified from participating in the auction.” Source: Industry Canada
- Canada’s wireless industry is overwhelmingly dominated by Bell, Telus, and Rogers. Source:The Globe and Mail
- Recent independent reports confirm that Canadians pay some of the highest prices in the world for cell phone service. Source: OECD 2013 Communications Outlook
- Ben Klass: “I am Canadian, a reply to Bell’s Open Letter”
- Background on Spectrum. Source: Public Interest Advocacy Centre
- Citizen-driven websites speaking out against Big Telecom’s claims: http://four4canada.ca/ and http://realfairforcanada.ca/
OpenMedia works to keep the Internet open, affordable, and surveillance-free. We create community-driven campaigns to engage, educate, and empower people to safeguard the Internet.
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