Summary The government effectively blocked Telus' C$380 million bid for struggling upstart Mobilicity.
(Reuters) - The Canadian government will review all commercial transfers of wireless airwave licenses, including option agreements, and reject any deals that would lead to undue concentration, it said on Friday.
The new rules come after two of Canada s biggest telecom companies - Rogers Communications Inc and Telus Corp - made moves to acquire spectrum owned by smaller operators.
They also follow reports that U.S.-based Verizon Communications Inc is looking at entering the Canadian market.
Ottawa has sought to break open the once-cozy Canadian telecom industry in recent years by keeping some spectrum out of the hands of the three biggest operators and making it easier for foreign companies to enter the market.
The new rules may make it difficult for the three - Rogers, Telus and BCE Inc - to get additional airwave acquisitions approved, as their giant holdings of Canadian spectrum dwarf those of newer entrants.
The government effectively blocked Telus C$380 million ($362 million) bid for struggling upstart Mobilicity earlier this month by rejecting the transfer of its spectrum licenses.
In January, Rogers struck a deal giving it an option to buy rival Shaw Communications unused spectrum, a move that Ottawa signaled disapproval of in April.
Then just last month Rogers announced a similar option deal to buy Quebecor Inc s unused spectrum in the Toronto area.
Mobilicity, Quebecor and Shaw all purchased the spectrum licenses in a 2008 auction in which the federal government set aside some airwaves for operators other than Rogers, Telus and BCE, which together control about 90 percent of the market.
The rules released on Friday are likely to get a close examination from Verizon. The company is in talks to acquire Mobilicity and has offered between $600 million and $800 million to buy another new entrant, Wind Mobile, sources familiar with the deals said on Wednesday.
Verizon s large holdings of U.S. spectrum would probably not work against it under the latest guidelines, which only apply to Canadian airwaves.
The policy may also encourage Verizon and other international companies to participate in an upcoming auction of much sought-after 700 megahertz airwaves that would make it easier to compete against BCE, Telus and Rogers.
The new rules, which also cover spectrum sharing, strategic alliances and joint ventures, will take into account existing spectrum used by a company in a particular region and at a particular frequency.
The Canadian government said that in simple cases, it could approve spectrum transfers within four weeks of the announcement of a deal. If a detailed review is required, the process may take another four months.
