Information Policies Under the Harper Government Part 6: Spectrum Auctions and Giveaways to PKP

One Line Description: The Harper Government’s attempt to create a 4th national cellphone provider also includes giving away spectrum licenses for bargain basement prices to a company headed by the leader of the Parti Quebecois.

Short Description: In an effort to encourage more competition in the cellphone industry, the Harper Government designed a recent spectrum auction (AWS-3) to ensure that Bell, Rogers, and Telus would be prevented from getting access to spectrum. Unfortunately, it also resulted in Videotron, a subsidiary of Quebecor Inc., whose majority owner is Pierre Karl Peladeau, leader of the Parti Quebecois, getting spectrum to serve nearly 10 million Canadians for $31.8 million, just $1.4 million more than the minimum bid price.[1]

Details: Despite Industry Canada’s spectrum policy of relying on market forces to the maximum extent possible,[2] the 2015 AWS-3 spectrum auction was jerry rigged to ensure that Bell, Telus and Rogers would be prevented from acquiring large swaths of spectrum. While Bragg Communications (Eastlink) and Wind both benefited from this design, Videotron was another big winner. Videotron got 4 licenses (Eastern Quebec, Southern Quebec, Eastern Ontario and Outaouais, and Northern Ontario) for 30 MHz of spectrum in each of these regions.[3] While Videotron paid $31.8 million, the opening bid pricing for these four licenses totalled $30.4 billion, meaning the licenses were obtained at nearly the opening bid price. Most troublesome, Videotron is owned by Quebecor, whose primary owner is Pierre Karl Peladeau (better known as PKP) who also happens to lead the Parti Quebecois (PQ).[4] Strangely the drive to improve consumer choice also means handing over valuable spectrum to a company owned by a man who wants to break up the federation.

[1] Industry Canada. “AWS-3 Final Results.” http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10954.html ; and Industry Canada. Technical, Policy and Licensing Framework for the Advanced Wireless Services in the Bands 1755-1780 MHz and 2155-2180 MHz (AWS-3). http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10911.html

[2] Industry Canada. Spectrum Policy Framework for Canada. p. 9. https://www.ic.gc.ca/eic/site/smt-gst.nsf/vwapj/spf2007e.pdf/$FILE/spf2007e.pdf

[3] Industry Canada. “AWS-3 Final Results.” http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10954.html

[4] Industry Canada. “AWS-3 Final Results.” http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10954.html ; and Industry Canada. Technical, Policy and Licensing Framework for the Advanced Wireless Services in the Bands 1755-1780 MHz and 2155-2180 MHz (AWS-3). http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10911.html ; and CRTC “Quebecor Profile” http://www.crtc.gc.ca/ownership/eng/cht156.pdf