Federal Court denies Telus bid to block Quebecor's $830M spectrum purchase in western Canada

A Federal Court judge has rejected a challenge by Telus Communications Inc. to Quebecor Inc.'s right to purchase spectrum in western Canada to develop 5G cellular technology for mobile phones.

Quebecor's plan to expand mobile services outside of its Quebec stronghold is dependent on the acquisition of Shaw's Freedom Mobile division. Shaw and Rogers are trying to get the government to allow them to complete their merger.

Quebecor Inc.'s division was eligible to bid on the spectrum in the upcoming auction, according to a ruling made public Tuesday. Telus and Bell argued that Quebecor did not meet the government's own procedure for set-aside eligibility in the auction.

Telus argued that Quebecor's unit was ineligible to bid because it did not offer commercial telecommunications to customers in areas where the spectrum was being auctioned. The process lacked transparency.

The set-aside eligibility assessment process and the Minister's decision to have been fair and reasonable will be dismissed.

In October, Telus lost a bid for an injunction. An official at Quebecor said that Bell withdrew its objections before Monday's ruling. It was not clear if this week's decision would be appealed.

The company claimed in its application that it had customers in each of the three provinces and that it was eligible for set-aside.

The CRTC registered Fibrenoire as a facilities-based provider and indicated areas where it was already providing commercial telecommunications services to the general public.

Descriptions of the services offered by Fibrenoire in their respective service areas are included in the confidential documentation provided with the application.

On April 12, 2021, Quebecor responded to a request from government officials for additional information, providing a more detailed description of the various categories of services provided by Fibrenoire in western Canada.

Daniel Anderson, a manager in the Spectrum Licensing and Policy Branch at Innovation, Science and Economic Development Canada (ISED), gave evidence in court that he had tested the assertions by placing two anonymous calls to Fibrenoire seeking service in four provinces.

Fibrenoire responded that it could offer internet services, but that it would not be through its own infrastructure, but through third-party infrastructure, according to the court ruling.

Quebecor chief executive Pierre Karl Péladeau told analysts on a conference call last week that he remains committed to expanding his company's wireless offerings outside of Quebec with or without the purchase of Shaw's Freedom Mobile operations. Quebecor's chances of obtaining Freedom improved earlier this month after the Competition Bureau moved to block the Rogers-Shaw merger, citing concerns about reduced competition and higher prices for consumers.

He has been an outspoken critic of what he calls theoligopoly of Rogers, Telus and Bell, and his desire to create a fourth national wireless player.

When Telus lost its injunction bid in the Federal Court last October, Péladeau issued a statement in which he lamented the ongoing fight, accusing Telus of trying to block at all costs the implementation of government policy.