[TorontoColin]

Canada will consider raising foreign ownership limits for telephone providers such as BCE Inc. before it moves ahead with the sale of wireless spectrum, Industry Minister Tony Clement said today.

Canada plans to auction 700-megahertz spectrum by 2012, Clement said today in a speech in Ottawa. The governing Conservative Party next year will also begin consultations on selling 2500-megahertz spectrum, Clement said.

Changing the rules on foreign ownership “would have to come before the auction,” Clement told reporters after the speech, because participating companies would need to know “how the auction is going to work” and “what their sources of capital are going to be.”

The government said in June it will consider eliminating or raising the 47 percent cap on foreign ownership to increase competition in the C$40 billion ($39.2 billion) industry. At the time, Clement said the consultations would last until July 30 and the government would introduce legislation “as quickly as possible.”

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It would be interesting to see how active the new entrants might be in bidding on these two spectrum auctions. These two frequencies are likely candidates for LTE networks.