If by open you meant closed..

Recently two Canadian communication companies, MTS/Allstream and Quebecor, have requested special rules in the upcoming spectrum auctions to give them a chance at entry into the exclusive club of being a national cellular service provider. The request is being met with substantial resistance from our existing mobile operators (Rogers, Bell, and Telus) but globally the request is not without precedent. One example has been in the United Kingdom, where Hutchison 3g (Three UK) was able to win a large portion of spectrum that had been allocated specifically for a new entrant to the market – the British incumbents such as Vodafone, Orange, etc were excluded from the bidding.

In an effort to stop these potential new competitors, Rogers has called for what they term an ‘Open’ auction of airwaves. It is somewhat amusing to get a glimpse of what the the three amigos (Rogers, Bell and Telus) consider to be an ‘open’ auction. Ted Rogers tries to attach Rogers onto the high-road of being ‘open’ but somewhere along the way I think he may have forgot the meaning of open. So just as a reminder – being ‘open’ means that everyone has equal and shared opportunity. It is Mr. Rogers’ view that the only fair way to auction the spectrum is under our existing highest bidder rules approach. Of course what is neglected to be said is that under these rules the only possible companies that could absorb, and justify spending, the immense amount of money required to win any spectrum is our existing carriers – Rogers, Bell and Telus. It is a clever tact on their part to make the claim that the existing rules are the open approach and the requests from potential new operators will result in a ‘closed’ auction. Unfortunately, while we continue to use the auction approach neither solution is perfect, but as far as the consumer is concerned we are definitely better served by rules which allow for new competitors to enter the market as opposed to the ‘open but no one new’ approach being lauded by our existing carriers.

It seems to me that with the existing rules these spectrum auctions are not much more then a semi-regular fee payable to the government to ensure that there is no additional competition in the wireless space. Wouldn’t it be more efficient for the government to say “Rogers, Bell, Telus you pay us some amount of money and we’ll extend out your monopoly for a few more years”. I guess that would be too obvious of a state sanctioned monopoly – but ultimately much simpler than carrying on this ruse of an auction.

Will the Canadian Government have the intelligence to ignore this ridiculous anti-competitive propaganda, and move ahead with a more market and competition friendly means by which to license the spectrum? If not, I suppose we’ll continue to have to deal with some of the highest mobile service rates in the world.