Ottawa blocks sale of NextWave spectrum licences to Bell-Rogers joint venture

OTTAWA - Industry Minister James Moore has turned down the sale of 83 wireless spectrum licences by NextWave to a joint venture between Rogers Communications (TSX:RCI.B) and Bell Canada (TSX:BCE).

The joint venture, Inukshuk Wireless, was formed to build and manage a Canada-wide wireless broadband network.

Moore said the proposed licence transfer would have led to unacceptable levels of concentration of spectrum in the hands of incumbent carriers.

"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," Moore said in a statement.

Bell said it had planned on using the NextWave spectrum as part of its long-range LTE rollout in rural and remote areas.

"We'll adjust and foresee no impact on Bell's overall LTE expansion program," Bell spokesman Jacqueline Michelis said in an email.

"We acquired significant 700 MHz spectrum in the recent auction that we look forward to employing for rural buildouts."

Rogers said the decision doesn't affect its plans to roll out 4G LTE to more customers in areas across the country.

"We'll deploy our two contiguous blocks of 700MHz spectrum to provide faster speeds, improved quality and capacity and enhance network coverage in both rural and urban areas," said Rogers spokesman Patricia Trott.

The NextWave licences are part of the Wireless Communications Services band of the wireless spectrum which is commonly used for mobile voice and data services, including cell phone, text messaging and data.

The government estimated that if Inukshuk had been allowed to acquire the spectrum that Bell and Rogers, through the joint venture, would have increased their combined WCS spectrum holdings to 77 per cent from 29 per cent.

Earlier this month, the 2014 federal budget anounced $325-million in funding to extend Internet service to more rural areas of Canada.