VANCOUVER, Aug. 1, 2013 /CNW/ - TELUS is calling on Industry Minister James Moore to carefully consider all the facts and perspectives about the upcoming 700 MHz wireless spectrum auction to ensure he makes a fair and thoughtful decision on how to proceed. Without clarification, the current auction structure has the potential to impact thousands of Canadian jobs, drain billions of dollars from Canadian pension plans, and significantly reduce investment in rural wireless infrastructure that is critical to improved healthcare and education and the competitiveness of Canada's small businesses.
"We welcome competition from any quarter, and have advocated for lifting foreign ownership restrictions in Canada since 2001," said Darren Entwistle, TELUS President and CEO. "Our only ask is that we be allowed to compete on a level playing field, without being hobbled by special advantages granted to foreign companies that dwarf Canada's entire telecom industry."
The current rules have three critical loopholes that give giant foreign carriers like Verizon unfair advantages over Canadian companies:
- The current rules would allow Verizon to bid on two of the four blocks of prime wireless spectrum being auctioned, fully half the available prime bandwidth which wireless companies will require to serve customers into the future, especially in rural Canada given the superior signal reach of 700 MHz spectrum. This could result in one of Canada's major wireless companies as well as the developing wireless firms not acquiring any of this vital spectrum at all. Canada has globally-leading wireless service quality based on the highest private investment in telecom networks per-capita worldwide as documented in the recent OECD study. This service quality would be compromised if this unfair distribution of spectrum occurs.
- The current rules would allow Verizon to build infrastructure in urban centres only and ignore rural and suburban Canada. The current rules would furthermore allow Verizon to piggyback on existing Canadian networks rather than building their own network. Notably, if Verizon was required to build their own network, it would result in significant job creation and economic investment across the country, especially in rural Canada.
- The current rules would allow Verizon to buy small wireless carriers in Canada while preventing Canadian firms like TELUS from competing to buy them. This would enable Verizon to purchase these firms at artificially depressed values and thereby gain access to the spectrum they bought at a 41 per cent taxpayer-subsidized discount in 2008.
Since 2000, TELUS has repeatedly argued against asymmetrical rules and has raised concerns about these loopholes at every stage of the auction process. The industry was assured that it need not be concerned about a huge foreign corporation taking advantage of rules that were intended to protect Canada's small, developing wireless companies.
"The situation has changed now that Verizon has confirmed it may take advantage of these loopholes to gain preferential treatment in Canada, and we are calling on the Minister to adapt to that change and close the loopholes," commented Darren Entwistle, TELUS President and CEO. "This straightforward action would protect Canadian jobs, the many Canadian pension funds that have large investments in Canadian telcos, rural investment in wireless and wireline networks, and the sustainability of Canada's world-leading wireless and wireline service quality. Our request is not to stop Verizon. Rather, our ask is only that we be allowed to compete on a level playing field, and that a foreign company that dwarfs our entire home-grown industry not be given special favours to enter into our market. It would be a simple thing indeed to apply the same auction rules to Verizon as those that apply to us, to require Verizon to build their own network rather than being gifted the ability to piggyback on ours, and to open up the purchase process for Canadian companies to all comers rather than reserving these assets for foreign interests. It is important to note that the U.S. government is not providing reciprocal, preferential treatment for Canadian telecom companies within America."
Ironically, Verizon is on the record opposing well-funded players receiving any preferential access to spectrum or special treatment in the next U.S. spectrum auction, stating in their filing to the FCC on U.S. Incentive Auctions on March 12, 2013 that "… there is no basis for the Commission to give certain large companies a regulatory hand-out…so they can acquire spectrum…at substantial discount over the price that would otherwise be received."
Mr. Entwistle added that time is of the essence, as the first auction deposits are due September 17 and there will be no going back after that time unless the minister amends the rules or delays the auction in advance of this date in order to take the necessary time to consider all of the facts.
"We met with the new Industry Minister for the first time Monday to discuss a significant volume of information and share with him a well-considered and independently sourced perspective on this critically important matter," Mr. Entwistle said. "We think the government owes it to Canadians to take the time required to carefully review and consider the information we have provided, as well as information only now coming forward from Canada's unions, academics, and the business community, before making a decision that will impact our country's economy, jobs and pensions for numerous Canadians, and the quality of our wireless service for generations to come. Generational investments in telecom infrastructure will be impacted by the Minister's decision, and the importance of a fair policy that benefits all Canadians cannot be overstated."
Mr. Entwistle added the issue is so critical that the boards of directors of TELUS, Bell and Rogers took the unprecedented step of sending the Prime Minister a joint letter on July 9. This letter can be found at www.FairForCanada.ca in response to Minister Moore's recent statement.
"We encourage Minister Moore to thoughtfully consider the letter from our well-regarded and experienced board members and all of the information we have provided, and to think through the ramifications of leaving loopholes in the auction rules that will hand Corporate America a huge gift at the expense of Canadians."
TELUS (TSX: T, NYSE: TU) is a leading national telecommunications company in Canada, with $11 billion of annual revenue and 13.2 million customer connections, including 7.7 million wireless subscribers, 3.4 million wireline network access lines, 1.4 million Internet subscribers and 712,000 TELUS TV customers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video.
In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $300 million to charitable and not-for-profit organizations and volunteered 4.8 million hours of service to local communities since 2000. Fourteen TELUS Community Boards lead TELUS' local philanthropic initiatives. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.
For more information about TELUS, please visit telus.com.
SOURCE TELUS Corporation