WIND Mobile head blasts incumbents and CWTA, calls recent campaign “a bit ridiculous”

Tony Lacavera is tired of the incumbents “misleading the public,” and wants the other side of the story told. In a post issued today on WIND Mobile’s blog, the company’s CEO and its holder of voting shares calls the Big Three carriers an “oligopoly” and praises the Conservative government’s commitment to ensuring a fourth player is present in every region in Canada.

“The whole campaign is a bit ridiculous,” he said in a phone interview. “We were forced out of the CWTA,” referring to the carrier’s withdrawal, along with Mobilicity and Public Mobile, from the carrier advocacy group earlier this year. “I ignored the incumbents’ advertising, but when the CWTA started up with their own campaign I had to say something.”

Recently, the CWTA, or Canadian Wireless Telecommunications Association, began campaigning alongside Rogers, Bell and TELUS opposing the federal government’s moves to limit the amount of spectrum the incumbents can purchase in the upcoming 700Mhz auction. Each incumbent is limited to one block per region, whereas companies that control under 10% of the market can bid on two. With Verizon sniffing around Canadian telecom, pursuing its own interests in the form of purchasing one or both of the new entrants, or purchasing complementary spectrum in the upcoming auction, their concern is very real.

But Lacavera takes steps to undermine each one of the CWTA’s arguments. At the fore is the notion that it is unfair to block the Big Three from purchasing spectrum that should rightfully be open to them. Limiting them to one block per region means that, if Verizon buys two, they will be left to split the remaining two among the three of them. TELUS and Bell previously built a joint HSPA+ network with their own limited 850/1900Mhz bandwidth while transitioning customers off PCS-based CDMA, so the carriers are well versed in cooperating on such a venture.

Lacavera eloquently posits that the incumbents are talking as if they’re the only interests in town; in fact, regional carriers like MTS, SaskTel and Quebecor’s Videotron will undoubtedly pursue their own agenda, which is not entirely dissimilar to what happened when the government set aside one block of spectrum of AWS for new entrants in 2008.

Then there’s the issue of fair play. “The big thing [the incumbents] are forgetting is that huge swaths of spectrum was just given to them in the 80’s and early 90’s,” he said. Even if the incumbents were largely shut out of the 700Mhz auction next year, they would still own the vast majority of the spectrum in Canada, cracking 80% between the three of them.

“The new entrants can’t compete with the current LTE networks,” continued Lacavera, “and [until now] they have been giving us an opportunity to compete over table scraps.” He acknowledges that on their own, the new entrants, even with consolidation, do not have the capital to obtain the 700Mhz spectrum necessary to build a national LTE network.

He saw a glimmer of hope for his company, and the prospect of wireless competition in Canada, when the government barred TELUS from purchasing Mobilicity’s AWS spectrum earlier this year. Citing the prevention of “undue concentration of spectrum,” then-Industry Minister Paradis said his government would do whatever it takes to foster a fourth national competitor in each region.

If Verizon does purchase even one block of 700Mhz spectrum, the auction rules state that they cannot sit on it; the US carrier will be forced to build a network to cover the areas over which the blocks apply.

As for the Fraser Institute’s recent invocation for the government to open up the whole telco market to foreign investment — not just for carriers with less than 10% market share — Lacavera was bullish on the idea. “But we must be very careful,” he said, “to segregate telecoms from broadcasters.” He maintains that broadcasters play an important part in maintaining the market for Canadian content, and if a foreign telco was to purchase an incumbent, their media assets would have to be kept sovereign.

Lacavera concludes his blog post with a terse admonishment of the state of Canadian wireless: “As the bombardment of advertisements from the Big Three continues, it’s important to recognize the noise for what it is: a desperate stand by the Big Three to protect their cozy and highly-profitable wireless market oligopoly. No matter how loudly they protest, the reality is the government’s spirited pursuit of a more competitive market is in the best interest of all Canadians.”

There’s a subtlety to all this that the media is not accurately portraying, and it’s that all the players ultimately want to be able to offer customers the best possible versions of themselves. For both Wind Mobile and the incumbents, this means acquiring the most spectrum possible in the upcoming auction. Everything else is just noise.