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* Rogers, BCE, Telus say auction rules favor a Verizon
* Auction of wireless spectrum set for January
* Verizon's interest in Canada may be cooling
OTTAWA, Aug 29 (Reuters) - Canadian Prime Minister StephenHarper on Thursday disputed claims by his country's leadingwireless companies that his government's telecommunicationsrules give unfair advantages to foreign players like VerizonCommunications Inc.
Canada's three biggest wireless companies - RogersCommunications, BCE Inc and Telus Corp - are asking the Conservative government to rethink its rulesfor next January's auction of wireless spectrum, saying theplaying field is slanted in favor of a Verizon.
Verizon had signaled a tentative interest in entering theCanadian market, but there is speculation more recently that itsinterest is waning, reinforced on Thursday when Vodafone GroupPlc said it was in talks with Verizon to sell its stakein Verizon Wireless, the No. 1 U.S. mobile carrier..
"The reality of the situation here is there is no specialrule or special loopholes for foreign companies," Harper toldreporters in Toronto.
"There are rules that assist all new entrants, whether theybe Canadian or foreign, to enter the marketplace and providecompetition that will be in the interest of Canadian consumers,"he said.
Under rules the government says are designed to increasecompetition and drive down prices for consumers, new entrantscan bid in the auction for two of four prime blocks of thespectrum that wireless companies need to operate mobileservices, while the existing big players can bid for only oneblock apiece.
The three incumbents, which cater to 90 percent of themarket, have launched an advertising blitz to sway publicopinion. While they favor competition, they say, the new ruleswere drafted with smaller firms in mind, and Verizon is biggerthan the three of them combined.
If Ottawa lends a hand to Verizon to enter Canada, they say,the Canadian players could be forced to cut jobs and trim mobilephone coverage in rural areas.
One full-page newspaper ad this week compared the country'sairwaves to precious natural resources: "If the government let agiant foreign corporation buy up half of Canada's water, youwould be outraged," it said, with a photograph of a lake andmountains. It went on to say foreign corporations were getting"special treatment."
Harper and the minister overseeing telecoms policy, IndustryMinister James Moore, have made it clear they won't budge as aSept. 17 deadline looms for companies to register for theauction.
"As I've said before, I understand full well the desire ofthe major incumbent telecommunication companies to protect theirbottom line. They have every right to do that," Harper said.
"But the responsibility of the government is to act in thebroader public interest."
Verizon had approached two small Canadian wireless companiesearlier this year, but it has now decided to delay any suchmove, raising doubts about whether Verizon still had plans toexpand into Canada, the Globe and Mail newspaper reported thismonth.
