‘Foolish’ not to oppose government spectrum policy earlier: Telus lawyers

OTTAWA — Lawyers for Telus Corp. said Thursday they regretted the "foolish" decision to not dispute Industry Canada’s power over so-called deemed spectrum transfers when the department was consulting on what became its 2013 spectrum-policy framework. Arguing before the Federal Court in Ottawa, Telus lawyer Michael Ryan said the company should never have accepted that a change in ownership for companies that own a spectrum licence is equivalent to one company handing over the licence to another. Ryan said that, on the contrary, provisions in the spectrum-policy framework that give Industry Minister James Moore the power to veto changes in the control of companies which own spectrum are overstepping the proscribed limits of his power. “In enacting the deemed-transfer requirement, the minister has trespassed into an area under the jurisdictionof the competition commission,” Ryan told the courtroom. Telus is challenging Industry Canada’s right to block deemed spectrum transfers after the government blocked its multiple attempts to buy out of struggling carrier Mobilicity, in bankruptcy protection since September 2013, in part because of concerns about spectrum concentration if Telus were to take over the spectrum Mobilicity purchased in the 2008 AWS auction. Ryan said the government issued a five-year moratorium on transfers of Mobilicity’s AWS spectrum, but provided assurances that after that period there would be no more barriers to a buyout of the new carrier by Telus or any other major service provider. He said Telus relied on these assurances in developing its strategy for the AWS auction and the 700 MHz spectrum auction earlier this year. The spectrum framework “changed the rules of the game,” he said, and the company should have been more “aggressive” in opposing it from the start. In taking jurisdiction over the deemed transfer of spectrum, which Ryan said is “another word for merger,” the department is stepping outside its boundaries and into the territory of other agencies, namely the Competition Bureau. The regulatory balance, he said, is an important part of existing telecom legislation. “The minister disrupted the balance of this framework when he sought to make mergers in this sector subject to his approval of deemed spectrum transfers,” Ryan said. Sanderson Graham, representing the Attorney General of Canada, which participates in such hearings on behalf of the government, said it was clear Canada has power over deemed-spectrum transfers under the law. The government always had authority over spectrum transfers, he said, and the 2013 policy only made such power explicit. It has nothing to do with mergers, he said, but rather that the government’s authority over spectrum “continues,notwithstanding any commercial arrangements between wireless companies.” “That is precisely the minister’s concern, control of the licence changes,” he added. What is at issue is simply control of the scare airwaves, which are undisputedly a public good, he said. “The minister does have statutory authority to require approval for use of spectrum,” Graham said. “That is, managing a scarce public resource in a manner he believes will best achieve the goals of telecom policy, which is preventing undue concentration.” The five-year moratorium on the sale of Mobilicity’s AWS spectrum is irrelevant to Telus’ challenge because any promise “did not cover exercising of control over disposition of spectrum licences.” The question of whether or not the Competition Bureau has control over mergers is similarly irrelevant, he said, because, in dealing with the deemed-spectrum transfers, the industry minister is only “looking at the way a licence he or she has issued is passed to another party.” Even if such an “overlap” exists, it is not the role to the courts to determine which agency supersedes the other, he added. “Overlapping jurisdiction is not a problem, is not a conflict,” he said. “Courts always strive to make legislation complementary.” Unless there are important constitutional issues or other major matters of law to be determined, which is not the fact in the Telus challenge, Graham said, the courts have left it up to the individual government bodies to determine the breadth of their powers through legislation when there are “multiple reasonable interpretations.” — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

‘Foolish’ not to oppose government spectrum policy earlier: Telus lawyers

News | November 20, 2014

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‘Foolish’ not to oppose government spectrum policy earlier: Telus lawyers

News | November 20, 2014

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