Watch out ROBELUS, Verizon is coming for you

[Pouria]

Is Verizon really the 'bogeyman' Canada's telecom giants claim?

Canada's three big mobile-phone providers have been ramping up their campaign to sway public sentiment against the potential entry of U.S. telecom giant Verizon into the wireless market.

"They're trying to use the bogeyman of a U.S. company to scare Canadians into supporting a change to [current wireless] rules and really kind of push the government to doing an about-face on their policies," said Steve Anderson, founder of OpenMedia, an advocacy group for affordable wireless access.

Just in the past week, for example, Bell Canada took out a two-page advertisement in major newspapers, while top executives at Rogers and Telus relayed their displeasure during interviews with a series of media outlets.

• Bell cries foul over federal telecom rules

• Verizon takes aim at Big 3 with possible Wind Mobile bid

"But is Verizon a big, bad bear about to gobble up Canada?" asked Iain Grant of the SeaBoard Group, a telecommunications consultancy.

Here's a look at what Canadians need to know about the potential deal and why it matters.

What's the issue?

On June 26, media outlets reported that Verizon had offered to buy Canadian upstart Wind Mobile with an initial bid of $700 million, and was also in talks about buying fellow upstart Mobilicity. Verizon has called the moves just an "exploratory exercise."

Despite that, Canada's big three telecoms — Rogers, Bell and Telus — have cried foul to the notion of the American giant entering Canada's wireless market this way, as these smaller companies had been given an advantage in the periodic auctions for wireless spectrum in an attempt by Ottawa to boost competition and hopefully drive down prices for consumers.

Verizon's bid comes after the federal government made changes in 2012 to the telecommunications rules that allowed foreign entities to enter the Canadian sector, albeit with certain limitations.

Canada's telecoms are concerned that if Verizon were to take over one of the "new entrants," it would qualify for special status at an upcoming auction of lucrative broadband spectrum, which is what allows wireless providers to expand their networks.

Two blocks of spectrum have been set aside for new entrants. And Bell's argument is that because the big three are prohibited from bidding on these blocks, they are likely to be sold at a lower price.

Who is Verizon and why does it care about Canada?

Formerly known as the Bell Atlantic Corporation, this New York-based telecom was founded in 1983. It is the second largest cellphone provider in the U.S., with nearly 100 million customers.

But, "this isn't a stranger to the country," notes Grant. "This is a company that helped establish the Canadian telecommunications market as it now is."

Verizon once owned a large chunk of BC Tel, which later became Telus. But it sold its portion in 2004 to focus on its U.S. operations.

But why would a U.S. giant want to re-enter the Canadian market, with its small population spread over a vast area and where the total number of cellphone subscribers is not even a third of those in the U.S.?

"It makes a lot of sense for it to offer its services to its [American] customers in Canada," said Grant. "Similarly offering services to Canadians who spend a lot of time in the United States. Offering a seamless North American plan."

What does this all mean for Canadians?

There's been considerable speculation that if Verizon were to set up shop in Canada it could lower rates for customers, thanks to more competition; or perhaps offer more premium-priced contracts with better service.

Benefits could also include eliminating roaming charges when Verizon customers travel anywhere in North America.

"Right now, we pay some of the highest prices in the industrialized world for some really horrible service, and that one way or the other needs to change," said Anderson.

However, the Canadian carriers, and some analysts, have suggested that Verizon's entry into the Canadian market could force the big three to focus on competing with the giant, which could result in job losses and a slowdown in efforts to expand advanced wireless services to rural Canada.

Grant suggests that demand would drive Verizon to invest across the country, not just in major cities.

"Verizon's [u.S.] customers come into the country every day through all of the bridges and ports of entries and they want to roam where they want to roam, whether that's fishing in Saskatchewan or hunting in northern Ontario or wherever."

What are Canada's telecoms saying?

Rogers has accused the federal government of aggressively courting Verizon; Telus has warned of a "bloodbath," and Bell charges that "loopholes" are being opened to a "U.S. company that is four times the size of Canada's entire wireless industry."

• Level the wireless playing field, Rogers CEO says

Full-page newspaper and online ads are part of a campaign launched by the three to change public opinion and try to push the federal government to adjust its policy.

Is the system fair for Canadian companies?

A large part of the Canadian telecom companies' argument is based on the idea of an unfair playing field.

All three say they support competition, but they say rules brought in by the Harper government give foreign companies an advantage they would never get in the U.S.

"It wasn't meant to be a level playing field," said Grant. "It was meant to give a leg up."

In the midst of the furor over Verizon, Industry Minister James Moore has stood resolute on the issue: "Our view has been clear, we want effective competition across Canada."

Large carriers in Canada still can't be more than a third foreign-owned. But ownership restrictions were lifted on those "new entrants" with less than 10 per cent of the market share of all telecommunications services, which includes not only wireless but also home phones, fixed-line internet and TV.

What happens next?

The big event looming over the sector is the spectrum auction set for January. Any company wanting to bid in the auction must submit its application by Sept. 17.

On the auction table is the 700 megahertz spectrum. Incumbents call it the most valuable one ever sold because towers using its higher frequency have wider coverage, which means fewer towers would need to be built to cover a particular area.

"If you put a tower up in 700 megahertz, that thing is going to go forever," said Grant. "It goes through concrete, it goes through granite, it goes through walls."

But while it's the first time in 25 years that a section of the spectrum is for sale (the last one took place in 1985), Grant notes it's not the last time.

The 600-megahertz spectrum — offering even wider coverage — will likely go on sale in the next few years, he says.

[Cyril Sneer]

I work in the USA and have a Verizon account. Pretty unbelievable when I compared the service for the price in comparison to my Telus account.

It actually really pissed me off to be honest.

The Verizon moble app is pretty unbelievable too.

It is actually cheaper for me to use my Verizon phone while I'm in Canada then my Canadian phone.

Figure that one out.

[Bieksasangryface]

Pretty funny that Bell, Telus and Rogers are all trying to get the public behind them saying that this is bad for consumers. Also claiming that mobie prices in canada are half what they are in the states. Wonder how many people are falling for this.

[Pouria]

Pretty funny that Bell, Telus and Rogers are all trying to get the public behind them saying that this is bad for consumers. Also claiming that mobie prices in canada are half what they are in the states. Wonder how many people are falling for this.

[King Heffy]

If Rogers, Telus, and Bell weren't operating as borderline criminal enterprises, the public might be willing to support them. Want me to support keeping foreign entrants out? Don't extort me with phony charges.

[Pouria]

If Rogers, Telus, and Bell weren't operating as borderline criminal enterprises, the public might be willing to support them. Want me to support keeping foreign entrants out? Don't extort me with phony charges.

[Batmania]

Perhaps if the "big 3" weren't blood sucking vampire who have been bending over their customers for the last 15 years I would give a damn.

Bring on Verizon and every other wireless company. While we're at it get some more internet and cable providers as well.

[Ghostsof1915]

I hate the big three, because their focus is profit, not product. That being said, you're kidding yourselves if you think they will radically lower rates. The reason Verizon can offer good rates is the US is 10x the size of Canada in population. More customers = the more profit to recoup against building a network. Verizon will undercut the Canadian firms but not by a lot, but then laugh at the profit margin they make on it.

Meanwhile, Bell, Telus, and Rogers will lay off staff and we'll lose CANADIAN jobs, get worse service to get better pricing. Wow..what a winning scenario.

[The Brahma Bull]

I hope Verizon gets to enter. Those 3 companies are all scumbags. They get what they deserve for ripping people off and thinking they can get away with it.

[King Heffy]

Meanwhile, Bell, Telus, and Rogers will lay off staff and we'll lose CANADIAN jobs, get worse service to get better pricing. Wow..what a winning scenario.

[Pouria]

I hate the big three, because their focus is profit, not product. That being said, you're kidding yourselves if you think they will radically lower rates. The reason Verizon can offer good rates is the US is 10x the size of Canada in population. More customers = the more profit to recoup against building a network. Verizon will undercut the Canadian firms but not by a lot, but then laugh at the profit margin they make on it.

Meanwhile, Bell, Telus, and Rogers will lay off staff and we'll lose CANADIAN jobs, get worse service to get better pricing. Wow..what a winning scenario.

[Warhippy]

I've been a customer of Bell and Telus and hate the service for both. Telus recently raised our bill after contractually promising not to, but is calling it maintenance fees which are not subject to the contract we signed. These are the three companies that fight tooth and nail to keep competitors out of the market and claim a loss of business, while at the same time raising the rates whenever they please. Recently Roger being fined for knowingly over charging customers with a bogus fee on top of the same bogus fee all three were fined for charging, and then just raised everyones rates to recoup the losses. Public fact easy to find the story on that. After living in Nevada/California for years as a Verizon customer I pray this comes to pass because my wife and I paying $146.00 for 2 cellphones a month is bloody ridiculous when Verizon charged me $150.00 to outfit myself and 5 coworkers with unlimited talk and data plans. Canada desperately needs to allow this competition. Next should be air couriers because Air Canada has a regional monopoly and West Jet cannot move fast enough in my opinion

[hsedin33]

Thank god. Telus rogers and Bell can go rot in a hole. I'm switching the day they setup shop.

[AppleMrHan]

I can't wait for company as big as Verizon to enter the competition.

Its one company that the "Big Three" can not buy out and will actually have to compete.

Verizon, welcome to Canada.

[Lonny_Bohonos_14]

What competition? Maybe in big cities, but the 'big three' don't do sh!t for rural area's. Rogers only recently made a deal with MTS to share towers to reach rural Manitoba.

I live 1 hour south of Winnipeg (right at the boarder) and I have zero access to Telus or Bell. My choices are Rogers or MTS and a friend of mine who switch to Rogers when they came out, said he is switching back once his contract is done. MTS is cheaper and offers a better package for what he wants.

I can actually pick up Verizon at times. Both MTS and Rogers coverage is spotty at best.

[mbal23]

I wouldn't mind this at all. Why is it that fido is cheaper and better than Rogers when Rogers owns fido?

[goalie13]

Next should be air couriers because Air Canada has a regional monopoly and West Jet cannot move fast enough in my opinion

[hsedin33]

Airlines?

If you think they should be next you should take a look at how much money the banks and the oil companies are making off of us.

As for the original topic, I have to agree with what Ghosts said. Verizon won't be entering the Canadian market as some sort of public service. They would be coming here to make a profit, just like the existing Big 3.

Having said that though, more competition is still a good thing.

[goalie13]

Simply the thought of not having to give my money to either of the big 3 crooks makes me elated with joy.

[NikiShiz]

I will always support more competition, Bell, Telus and Rogers have been controlling the market for way too long.