Court dismisses Telus challenge to Quebecor set-aside acquisitions in 3,500 MHz auction

A federal court judge has dismissed a challenge from BCE Inc. and Telus Corp. to Quebecor Inc.'s acquisitions of set-aside spectrum in British Columbia, Alberta, and Manitoba during last summer's auction of the 3,500 MHz band. The acquisitions are widely seen as crucial to both the roll out of next-generation 5G wireless service, and Quebecor's stated plans to expand into western Canada. In a May 16 decision, Judge Alan Diner wrote that while Telus "prefers a far more restrictive interpretation to meet the set-aside eligibility criteria," the officials at the Department of Innovation, Science and Economic Development (ISED) that approved Quebecor's eligibility for the set-aside spectrum made a decision that was "entirely reasonable not only in light of the plain language of the eligibility requirements found in the framework, but also in light of the record that was before the decision-maker." In August, Telus and Bell both filed court challenges seeking to block Quebecor’s purchases of the discounted spectrum, with Telus arguing that the acquisitions constituted an unfair cost advantage. A judge ultimately rejected Telus and Bell’s request for an injunction against the transfer of spectrum licenses to Quebecor. Bell subsequently discontinued its own application. In a hearing on the matter in February, Telus argued that ISED failed to show its reasons for deeming Quebecor eligible for the discounted set-aside spectrum. Under the language of ISED's framework for the auction, set-aside spectrum was “limited to those registered with the CRTC as facilities-based providers that are not national mobile service providers, and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area of interest." Telus argued that Quebecor subsidiary Fibrenoire was not "actively" providing commercial telecommunications services, as the subsidiary lacks transmission facilities, a retail network, and has only a small number of business customers. Telus also argued that the decision to deem Quebecor eligible was procedurally unfair under administrative law, and that ISED failed to maintain an adequate record of how it came to its decision on Quebecor's eligibility. In the Monday decision, however, Diner wrote that "given the fact that Telus was barred from obtaining set-aside spectrum from the beginning, and that they admit their interest in the outcome to be largely economic, this factor suggests that whatever scarce expectation of procedural fairness to which Telus is entitled as regards the set-aside eligibility determinations, is correspondingly minimal." DIner also rejected Telus' argument that ISED should have produced a more detailed set of reasons for its assessment of Quebecor's eligibility. In addition to finding that the department's process was reasonable, Diner also wrote that the decision to deem Quebecor eligible for set-aside spectrum was reasonable itself. Telus, Diner wrote, is "free to provide its own suggested interpretation of how the eligibility criteria should be applied and of the underlying intentions and ministerial policy goals that formed the backdrop to the framework that was ultimately adopted." "Be that as it may, it is not for Telus to draft and apply its own criteria, which do not appear in the framework governing the process, or to apply its own measuring stick to how the criteria that do appear in the framework ought to have best been interpreted and applied." In the decision, Diner also noted that "this judicial review is not the first time that Telus has opposed a pro-competitive interpretation or application of the eligibility criteria." Telus has long been critical of the government's policy on set-aside spectrum, arguing that allowing regional players to bid on set-aside spectrum amounts to allowing family-run companies to "profiteer" from spectrum auctions. — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Court dismisses Telus challenge to Quebecor set-aside acquisitions in 3,500 MHz auction

News | May 18, 2022

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Court dismisses Telus challenge to Quebecor set-aside acquisitions in 3,500 MHz auction

News | May 18, 2022

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