Big 3 Telecoms 'Stifle Innovation And Economic Development', Entrepreneurs Tell James Moore

By Daniel Tencer Posted: 09/09/2013

Efforts by Canada's Big Three wireless companies to maintain their dominant positions are lilely to "stifle innovation and economic development in Canada," a coalition of tech startups and consumer groups said Monday. (Getty Images)

Efforts by Canada's Big Three wireless companies to maintain their dominant positions are likely to "stifle innovation and economic development in Canada," a coalition of tech startups and consumer groups said Monday.

In a letter to Industry Minister James Moore, a group of 35 entrepreneurs urged the government to "stand up for telecom choice and affordability in Canada."

"Big incumbent telecom providers should not be allowed to block access to affordable mobile phone and Internet options," it said.

The entrepreneurs lauded Moore and the Harper government for the public spat "against the Big Three's dishonest PR campaign" during the recent controversy over reports of Verizon's entry into Canada - reports that proved not to be accurate.

"Because over 93 per cent of the market is controlled by just three giant conglomerates, Canadians pay some of the highest costs for some of the worst cell phone service in the industrialized world," the letter stated.

The entrepreneurs include the heads of web host and wireless provider Tucows, free online phone service Fongo, and Internet and phone provider Distributel, among others. They joined consumer advocacy group OpenMedia in signing the letter.

Elliot Noss, the CEO of Tucows, said innovation in the mobile space is "extremely limited" in Canada due to the dominant telecom companies.

"Because Canada's big three incumbent telecom firms operate as unfriendly gatekeepers, we've been unable to bring our mobile business to Canada," Noss said in a statement.

"In their recent campaign against Verizon, the incumbent telecom networks admitted, in fact stressed, that the networks were built with taxpayer money. It follows then that open access should be available."

The entrepreneurs stressed their objection to what they see as efforts by the Big Three to eliminate potential competition through control of the wireless spectrum.

They argued that Rogers Communications' plan to buy wireless spectrum from Shaw Communications should be blocked, as Shaw had bought that spectrum under rules meant to help new wireless entrants.

"We are grateful that your government has already prevented Telus from obtaining Mobilicity and its new entrant spectrum; we hope you'll do the same in future efforts by other telecom incumbents," the letter stated.

The federal government is planning to auction the coveted 700 mHz band of spectrum early next year, with special rules in place that would allow small wireless entrants to bid on more spectrum than the established players.

All the same, the Big Three are largely expected to win three of the four available blocks of spectrum.

The Big Three launched an aggressive publicity campaign over the summer when news reports began to emerge that U.S. wireless giant Verizon was interested in coming to Canada and could take advantage of the new-entrant rules.

But the campaign doesn't seem to have ended with Verizon's denial that it's interested in Canada.

The Globe and Mail reports that BCE is going to court to fight the government's wireless rules. The telecom giant will reportedly argue the industry minister has no right to implement rules that force the large telecom firms to provide roaming and tower-sharing to new wireless entrants.

In that regard, BCE is at odds with the tech-startup coalition, which argued in its letter for greater enforcement of the rules allowing new companies to set up shop, and urged the government to "enforce cost-based wholesale access and resale roaming" rates across the country.

BCE isn't the only company suing over the government's wireless rules. Telus filed a lawsuit over the summer challenging the rules, after then-Industry Minister Christian Paradis blocked Telus' attempt to buy the wireless spectrum held by small wireless company Mobilicity.

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