Offer to purchase CLEARNET.pdf - About TELUS

the proposed transaction is likely to prevent or lessen competition substantially, the Commissioner may apply to
the Competition Tribunal for an order prohibiting it or an order permitting it provided certain assets are
divested and/or other conditions are satisfied. Where the Commissioner has not made such a determination he
typically advises the parties in writing that at this time he will not apply to the Competition Tribunal for an order
in respect of the proposed transaction. This ‘‘no-action’’ letter remains subject to the Commissioner’s statutory
right to challenge a transaction at any time up to three years after a transaction has been implemented.
The Offers are subject to a pre-merger notification under the Competition Act. On August 22, 2000, TELUS
and Clearnet filed a short form notification to the Commission in respect of the Offers and it was certified
complete the same day. The 14 day statutory waiting period applicable to the transaction expired on
September 5, 2000. On September 8, 2000, TELUS and Clearnet jointly filed a further detailed competition
analysis of the Offers and the transactions contemplated thereby with the Commissioner to assist in his review.
The Commissioner is still reviewing the competitive implications of the transactions contemplated by the Offers
as of the date of the Offers to Purchase and Circular.
As of the date of the Offers to Purchase and Circular, the Commissioner had not yet issued an ARC or a no
action letter advising that the Commissioner will not oppose completion of the Offers and the transactions
contemplated thereby and will not make an application under the Competition Act in respect of the Offers. If
issued, such letter would not bar the Commissioner from challenging the Offers at any time up to three years
after the Offers have been accepted and the transaction contemplated thereby completed.
Industry Canada
Pursuant to the Radiocommunication Act, the Minister is responsible for ensuring the orderly development
and efficient operation of radiocommunication in Canada. As all wireless communication services depend on the
use of radio frequency, such use is subject to the regulation and licensing by the Minister pursuant to the
Radiocommunication Act. Pursuant to the Radiocommunication Act, the Minister may, inter alia, issue spectrum
licenses in respect of the utilization of specified radio frequencies; may fix the terms and conditions of such a
license (including the terms and conditions as to the services that may be provided by the holder thereof); and
may renew such licenses. In addition, the Minister may suspend or revoke a license with the consent of the
license holder when the fees for such license have not been paid, or, where the licensee has contravened the
Radiocommunication Act and its regulations or the terms and conditions of the license. The
Radiocommunication Act regulations provide for the Minister to approve any transfers or assignments of a
license from the licensee to another party. Under Section 11 of the Radiocommunication Regulations, it is a
condition of all radiocommunication licences that a licence not be transferred or assigned without the Minister’s
authorization. The Minister has indicated that the change in control of Clearnet contemplated by the Offers may
constitute a transfer or assignment of the radiocommunication licences held by Clearnet’s wholly owned
subsidiaries, Clearnet Inc. and Clearnet PCS Inc. TELUS and the Minister are in discussions whether the
completion of the Offers constitutes such a transfer or assignment. Subject to the resolution of Spectrum Cap
issues as discussed below, TELUS is not aware of any policy reasons why an approval of the transfer of the
licence under Section 11 of the Radiocommunication Regulations, if required, would not be issued by the
Minister.
Spectrum Licenses
The Minister has designated certain frequencies in the 800 MHz and 1.9 GHz on a national basis for the
provision of mobile wireless services. Clearnet is a licensee of spectrum in the 1.9 GHz band for the provision of
its PCS services and of spectrum in the 800 MHz frequency band for its Mike services. In addition, Clearnet
holds other spectrum licences in connection with its analogue business. For Alberta, TELUS
Communications Inc. is a licensee of spectrum in the 150 MHz band for the provision of its Push-to-Talk General
Mobile Service (a service which has limited range and mobility and is not counted for Spectrum Cap purposes);
spectrum in the 400 MHz band which it uses for the provision of its Tango service; spectrum in the 800 MHz
band which it uses for the provision of its analogue and digital cellular service; and spectrum in the 1.9 GHz
frequency band which it uses for its PCS services. For British Columbia, TELUS Mobility Cellular Inc. is a
licensee of spectrum in the 150 MHz band which it uses for the provision of its Autotel service; spectrum in the
800 MHz band which it uses for the provision of its analogue and digital cellular services; and spectrum in the
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