In the latest chapter in the ongoing battle between incumbent
wireless service providers and the federal government over
government policies intended to stimulate more competition in the
wireless market, the Federal Court has dismissed an application by
Telus Communications Company (Telus) for judicial review of the
Minister of Industry's authority to impose conditions on
spectrum licences issued pursuant to the Radiocommunication
The Court's decision in the case of Telus Communications Company v
Canada, came less than two weeks before the
scheduled start of Industry Canada's auction of the highly
desirable 700 MHz spectrum.
Telus's application was provoked by the imposition by the
Minister of conditions of licence that capped the amount of
spectrum that can be acquired by certain bidders in the pending 700
MHz spectrum auction, set to commence on 14 January 2014.
More particularly, while Industry Canada's Licensing Framework for Mobile Broadband
Services (MBS) - 700 MHz Band (Licensing Framework)
generally limits licensees to two paired spectrum blocks within
each of the 5 blocks in which paired spectrum will be available,
large wireless service providers will only be permitted to acquire
one paired block of the most sought-after spectrum.
For the purpose of the Licensing Framework, companies with 10
percent or more of the national wireless subscriber market share,
or 20 percent or more of the wireless subscriber market share in
the province of the relevant licence area, will be considered to be
"large wireless service providers", and will therefore be
limited to purchasing only one block of "prime" spectrum.
According to figures provided in the CRTC's most recent Communications Monitoring
Report, only Rogers, Telus, Sasktel, MTS and the
"Bell Group" (wireless providers owned by BCE Inc.) are
considered to be large wireless service providers.
The remainder of smaller incumbents and new entrant carriers
will be allowed to purchase up to two prime blocks in all paired
spectrum blocks; however, not all of these companies have applied and been qualified to
The Court noted that the case was not a challenge to the wisdom
or soundness of a government policy, but rather, raised the
question of whether there is authority to enact decisions made
under a policy.
In dismissing the application for judicial review, the Court
found that the Minister had the authority to impose conditions on
spectrum licences - including the spectrum caps applicable to
larger wireless service providers - in light of the Minister's
broad power to fix spectrum licence terms and conditions, taking
into account the policy objectives of the inter-related statutory
scheme comprised of the Radiocommunication Act, the Radiocommunication
Regulations, the Telecommunications
Act and the Department of Industry
The Court also found that, in imposing spectrum caps as a
condition of licence, the Minister did not transgress into the
regulatory powers reserved to the Governor-in-Council under the
Radiocommunication Act, rejecting an argument that the
spectrum caps amounted to a spectrum licence eligibility
requirement, which only the Governor-in-Council has the authority
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