The Satellite Tollbooth: Why Canada Must Resist the European Telecom Playbook
AI-generated image · Bay Street Wire
Opinion: As European carriers team up to lock out Starlink, Canada's Big 3 are likely eyeing the same strategy to keep connectivity costs high.
In the world of telecom, the 'playbook' is rarely about lowering prices for the consumer; it is about controlling the gates. We are seeing this play out in real-time across the Atlantic, and if history is any guide, Canada's Big 3 will be itching to replicate it.
As The Verge first reported, there is a coordinated effort among Europe's telecom giants to carve out their own slice of the satellite pie. Deutsche Telekom, Orange, Telefónica, and Vodafone have signed a letter of intent to potentially pursue a joint bid for spectrum. Their goal? Creating a direct-to-device satellite competition to rival SpaceX’s Starlink.
On the surface, the rhetoric is noble. These four companies claim their initiative aims to support European constellation development, protect critical communications, strengthen public network resilience, and meet the demand for universal coverage in underserved regions. But look closer at the architecture of the deal, and the red flags for consumers appear.
According to The Verge, these operators intend to manage the ground infrastructure and coordination functions themselves, while outsourcing the actual satellite constellation to a separate, as-yet-unnamed partner. This creates a proprietary bottleneck. By controlling the ground network and the spectrum access, the carriers effectively become the toll collectors for satellite connectivity.
We have already seen this appetite for consolidation in the U.S., where T-Mobile, AT&T, and Verizon announced a collaboration earlier this year to combine spectrum in dead zones and rural areas. While they frame this as a way to improve customer experience and help providers reach more people via a unified platform, the underlying trend is the same: the incumbents want to manage the interface between the user and the technology.
Even the regulators are getting involved in the protectionist game. The Verge reports that the EU has considered reserving portions of the 2 GHz band specifically for local companies. SpaceX has already pushed back against this, arguing that such moves could degrade service in critical areas like Ukraine.
For Canadians, this should be a loud alarm. Our Big 3 have a storied history of protecting their margins by limiting the impact of disruptive competition. If the European carriers can convince regulators that 'sovereignty' and 'resilience' justify locking satellite access behind their own proprietary ground networks, the Canadian incumbents will undoubtedly try the same.
True innovation in connectivity comes from open competition, not from a curated partnership of the same four or five companies that already dominate the market. If we allow the Big 3 to act as the sole gatekeepers for satellite-to-device services, we aren't getting 'universal coverage'—we are just getting a new way for the incumbents to charge us for the privilege of connecting to the sky.