Mobilicity asks Ontario Superior Court of Justice for assistance in spectrum sale

When Industry Canada shut down the proposed $380 million TELUS-Mobilicity merger, Industry Minister, James Moore, stated that the “spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit.”

Many months later, even in the wake of selling off their spectrum and subscribers to the highest bidder, Mobilicity is attempting to do some finagling with the courts. The struggling wireless carrier is currently under court protection from its creditors and, according to the Globe and Mail, is preparing to ask the Ontario Superior Court of Justice for a motion that would allow for the sale of its spectrum licences to a larger wireless carrier, potentially TELUS, when the limit expires next month.

Apparently in a section of the Companies’ Creditors Arrangement Act (CCAA) is a clause the would allow the courts “to assign ‘the rights and obligations’ of a debtor company to another party.” Some are calling this a long shot, but Mobilicity is gunning for a Hail Mary. Bill Aziz, Mobilicity’s chief restructuring officer said, “This motion is contingency planning to ensure a fair and reasonable process and that any potential transaction be able to be consummated and completed with the requisite certainty and speed envisioned under the CCAA Court approved sales process.” Industry Minister James Moore didn’t comment on the news, but his press secretary stated, “Our thoughts are with Mobilicity’s employees who may have been impacted by this restructuring. Our government will not approve spectrum-transfer requests that decrease competition in our wireless sector. We look forward to the court’s positive ruling on this matter.”

During the 2008 spectrum auction, Mobilicity invested $243.1-million for 10 licenses in Toronto, Vancouver, Calgary, Edmonton and Ottawa. The company currently has about 175,000 wireless subscribers and reportedly just enough enough money saved to keep them in business until the second week of February.