Mobilicity’s $1.2 billion lawsuit against Industry Canada given the go-ahead

The neverending wireless saga of Mobilicity, has taken yet another turn. Even under creditor protection, the new entrant carrier continues to show it won’t go down without a fight.

Last September, Quadrangle, one of Mobilicity’s early backers, filed a claim with the Ontario Superior Court of Justice against Industry Canada for a $1.2 billion settlement. Quadrangle invested hundreds of millions in building Mobilicity’s network, supplying Canadians with jobs, and providing wireless service to “hundreds of thousands of underserved Canadians.”

Quadrangle’s claim included claims of “assurances” by Industry Canada that promised Mobilicity could build a sustainable wireless business that would compete with the larger players, such as Rogers, Bell and TELUS. The private equity firm said Industry Canada “breached its assurances that it would enforce foreign ownership rules, require incumbent carriers to provide roaming and access to cell towers at reasonable rates and terms, prevent unfair and anti-competitive competitive practices and allow spectrum to be transferred.”

“As a result of these breaches Quadrangle lost its investment and forfeited other investment opportunities, hundreds of Canadian jobs were lost, Canadian consumers have been deprived of the benefit of real competition and the prospect of any meaningful foreign investment in Canadian wireless industry for the foreseeable future has been has been lost,” said Quadrangle in its original statement.

The government wanted the case thrown out and claimed the reasons for the job and investment losses was not from the lack of assurances, but the choices Mobilicity made while building out its business.

Today, via the Globe and Mail, it’s been announced the lawsuit against the government can proceed. Ontario Superior Court of Justice judge Frank Newbould stated, “In my view the claims of the plaintiffs as pleaded are not derivative claims. They are claims for civil wrongs done to them and not to Mobilicity and the damages claimed can be asserted by them in this action.”

Mobilicity invested $243.1-million in the 2008 spectrum auction and captured 10 licenses in Toronto, Vancouver, Calgary, Edmonton and Ottawa. Mobilicity ended last year with 158,637 wireless subscribers.