{"id":14880,"date":"2021-03-22T06:07:24","date_gmt":"2021-03-22T10:07:24","guid":{"rendered":"http:\/\/mhgoldberg.com\/blog\/?p=14880"},"modified":"2021-03-19T14:44:36","modified_gmt":"2021-03-19T18:44:36","slug":"who-is-bidding-on-the-set-aside","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=14880","title":{"rendered":"Who is bidding on the set-aside?"},"content":{"rendered":"

The news of a $26B Rogers – Shaw merger<\/a> will likely generate a lot of commentary on a lot of issues over the next year as the transaction moves through the approvals process.<\/p>\n

One of the more immediate questions is how the transaction impacts the upcoming 3500 MHz spectrum auction in Canada. <\/p>\n

The deadline for applying to participate in the auction<\/a> is April 6.<\/p>\n

Under the Policy and Licensing Framework<\/a>, once again the Department considered what are termed “Pro-Competitive Measures”<\/a>, such as spectrum set-asides and spectrum caps. In the end, it determined not to implement a cap, but to set-aside up to 50 MHz of spectrum (not every license area has sufficient unencumbered spectrum available due to wireless internet service providers operating in that band).<\/p>\n

The discussion and determination on eligibility<\/a> to bid on the set-aside spectrum was also interesting: “eligibility to bid on set-aside spectrum will be limited to those registered with the CRTC as facilities-based providers, that are not National Mobile Service Providers, and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 area of interest, effective as of the date of application to participate in the 3500 MHz auction.”<\/p>\n

Which brings us to understanding who are “National Mobile Service Providers”, defined as “companies with 10% or more of national wireless subscriber market share,” which effectively means Bell, Rogers, and TELUS.<\/p>\n

The rules also discuss<\/a> associated and affiliated entities, “relating to the participation of affiliated and associated entities in order to ensure that each bidder is an independent bidder.” <\/p>\n

Associated Entities are defined<\/a> as “Any entities that enter into any partnerships, joint ventures, agreements to merge, consortia or any arrangements, agreements or understandings of any kind, either explicit or implicit, relating to the acquisition or use of any of the spectrum licences being auctioned in this process will be treated as associated entities.” <\/p>\n

Under that definition, the announced “agreement to merge” appears to make Rogers and Shaw “associated” for the purpose of the auction. In most circumstances, Associated Entities are presumed to be non-independent bidders, but paragraph 265 states “Associated entities may apply to participate separately in the 3500 MHz auction. ISED is of the view that allowing associated entities that are competitors in the market to bid separately would not have an adverse impact on the integrity of the auction provided that auction participants comply with the information disclosure and anti-collusion rules.” <\/p>\n

The anti-collusion rules are one gate, and Paragraph 266 sets out a second gate: “To obtain approval to participate separately in the auction, associated entities will be required to demonstrate to ISED\u2019s satisfaction that they intend to separately and actively provide services in the applicable licence area.” Following statements by the companies in the wake of the merger announcement, it is difficult to imagine that Rogers and Shaw “intend to separately and actively provide services” anywhere.<\/p>\n

If Associated Entities wish to bid separately, they must apply two weeks prior to the April 6 application deadline. That happens to be tomorrow, March 23.<\/p>\n

Will Shaw participate separately in the 3500 MHz auction in June? Likely not, given statements<\/a> when the merger was announced last week. “With telecom companies making multibillion-dollar investments to upgrade networks to 5G technology, chief executive Brad Shaw said he decided his Calgary-based company could no longer go it alone and agreed after years of takeover pitches from Rogers to embrace a $20.4-billion acquisition.”<\/p>\n

Given restrictions on eligibility, that bidders must currently be offering telecom services in a license area to participate, it is possible that some set-aside spectrum may end up unsold, while vigourous competition drives up prices in the remaining bands. <\/p>\n

Should we consider this a bug in the auction design or a feature?<\/p>\n","protected":false},"excerpt":{"rendered":"

The news of a $26B Rogers – Shaw merger will likely generate a lot of commentary on a lot of issues over the next year as the transaction moves through the approvals process. One of the more immediate questions is how the transaction impacts the upcoming 3500 MHz spectrum auction in Canada. The deadline for …<\/p>\n

Who is bidding on the set-aside?<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-14880","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nWho is bidding on the set-aside? • Telecom Trends<\/title>\n<meta name=\"description\" content=\"The news of a $26B Rogers - Shaw merger will likely generate a lot of commentary on a lot of issues over the next year as the transaction moves through • March 22, 2021\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mhgoldberg.com\/blog\/?p=14880\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Who is bidding on the set-aside? 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