Federal government hasn’t learned its spectrum auction lessons, says Montreal Economic Institute

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An analyst from the Montreal Economic Institute (MEI) believes that the government hasn’t learned its lesson from the previous spectrum auction in 2015.

Earlier this year, Minister of Innovation, Science and Economic Development Navdeep Bains proposed setting aside 30MHz of spectrum for bidding by non-incumbents, a group defined by the CRTC as those with less than 10 percent of the national wireless subscriber market share.

Martin Masse, the MEI’s former director of research and publications, believes that such a tactic would be a mistake.

According to an October 5th, 2017 media release, Masse believes that “experience has shown that such measures essentially constitute public subsidies that are either lost to weak new entrants that consistently fail, or wasted on established regional players that would have had the means to bid for the full value of the spectrum.”

“The federal government’s rules have also delayed the use — or the more efficient use — of spectrum frequencies that were wasted on the failed companies or were simply unused by the license holders,” reads an excerpt from the same release.

Michel Kelly-Gagnon, president and CEO of the MEI, also added that setting aside a certain amount of spectrum for smaller wireless players is counter to the purpose of an open auction.

“Open, competitive auctions are supposed to lead to a more optimal allocation of resources than arbitrary decisions by politicians and bureaucrats,” said Kelly-Gagnon, in the same release. “The proposed set-aside defeats that purpose. If the government really believes we need more competition in the wireless sector, it should let it happen, plain and simple.”

Source: CNW