A looming auction of spectrum has become a focal point in Canada for the ‎announced, but not yet decided changes in how the Canadian wireless industry ‎will work.

New players want some spectrum to be set aside expressly for new ‎participants, to encourage competition, and break the stranglehold of the three ‎incumbents who dominate Canadian mobile services (Rogers, Bell, and Telus).

The incumbents don’t see a need for such drastic steps, and are arguing that ‎any changes should apply to all players.  There should not be any “two-tier” ‎arrangements. An interesting risk, brought up by Bell which will no doubt get reviewed, is that ‎in Canada rural telecommunications is unquestionably unprofitable, and ‎subsidized by revenues from urban (more dense) areas.

By allowing the new ‎players who focus on urban areas to create more competitive and less ‎profitable urban operations, rural economics will undoubtedly suffer. The Government has announced its intention to improve the situation for ‎foreign-funded and owned entrants in the mobile market. But there has been ‎no announcement of any specific changes, leaving everyone to lobby.

Meanwhile there is also, at a time of weak government revenues, the ‎opportunity to raise substantial sums from spectrum auctions.