They just wouldn't have it. The Conservative Canadian government wanted a new outside competitor to start driving prices down in the local communications market, and Verizon was making all the right noises, but the big Canadian telcos just wouldn't let it happen.
The jury is out on whether admitting a company like Verizon (VZ:NASDAQ) into Canada would have made things any better for consumers or simply add another layer of inefficiency, horrible customer service and price fixing. After all Verizon is currently leading the fight against net neutrality so they can charge companies to let their users access their websites unencumbered.
Either way, the gubmint wanted Bell (T.BCE: TSX), Telus (T.T:TSX), Rogers (T.RCI.B: TSX) and to a lesser extent Shaw (T.SJR.B: TSX) to play nice and let the fat kid in the playground.
But they didn't. In fact, they went on a national lobbying and marketing campaign, telling cellphone users that Verizon arriving would cost jobs, see multi-millions of dollars head back to the US, and that Canadian phone owners get a crazy great deal as is, something that is as close to a flat out lie as one can argue if you look at the dollars spent for the speeds and coverage offered.
But it worked: Verizon got back on the bus and decided this was all too weird for them. The telcos won.
Or so they thought.
Federal Heritage and Industry Minister James Moore is pissed, and he's one of those guys who takes a pissy morning into next week.
The government has been advertising on TV with regularity since the Verizon debacle that they intend to force the issue and bring in more competition, which the telcos likely fobbed off as idle threats.
But, today, Moore went into Battleship mode and torpedoed a deal that would have seen 83 wireless spectrum licenses heading to Rogers and Bell Canada.
The deal would give 'Inukshuk Wireless', the name the megaphoners set for their joint venture (because 'giant telco screwathon' was too much of a mouthful) a whopping 77 percent of the nation's Wireless Communications Band (WCS) that is used for mobile voice and data.
Right now as things stand they have 29 percent.
The companies had intended to use the spectrum, they say, to roll out LTE coverage in remote and rural areas where such coverage is critically needed.
Of course, that's what's known as the Al Capone strategy; you throw some money at the orphans so you can say 'why does the government hate orphans?' when it comes to shut down your numbers racket.
Which isn't to say better coverage isn't needed outside the cities. But James Moore doesn't think the big guys are the ones to fix that issue, saying in a statement, “We will not approve any spectrum transfer request that results in excessive spectrum concentration for Canada's largest wireless companies, which negatively affects competition in the telecommunications sector.”
Translated: “Anyone but you.”
A Bell spokesperson told the Canadian Press in an email that it weren't no thang.
“We'll adjust and foresee no impact on Bell's overall LTE expansion program,” said Jacqueline Michelis, adding, “We acquired significant 700 MHz spectrum in the recent auction that we look forward to employing for rural buildouts.”
Translated: “Bring it on, Jim.”
Videotron, a Quebecor (T.QBR.B: TSX) subsidiary, acquired the biggest slice of the most recent spectrum auction, which points to the potential for that company to either form a partnership with another mid-major or go it alone and form a new national network, something one can imagine (with Quebecor being big fans of the Conservatives, as is evidenced all day on their Sun TV cable channel) the government doing its utmost to clear the way for.
