OTTAWA – Making sure to set aside cash for TV broadcasters from the auction of 600 MHz wireless spectrum just might drive the prices to be paid for that spectrum too high for some to participate.
Arguments from the integrated wireless/broadcasting companies that they should get a portion of the proceeds from an auction of the 600 MHz band to pay for the transition to new over the air (OTA) frequencies should be dismissed, argues Wind Mobile.
The company notes that setting aside money from a 600 MHz auction could result in higher spectrum licence costs because the integrated wireless/broadcasting firms would have an interest in bidding up the prices in order to get more money from the auction revenue pool to pay for their OTA TV transition.
“Carriers should not be permitted to take money out of one pocket and slip it into another, or to introduce undue delay,” Wind says in its reply comments to SLPB-005-14, which were due last week.
The 600 MHz band is critical for all wireless carriers, new entrant and incumbent alike. Its propagation characteristics, similar to other sub 1 GHz spectrum, make it ideal for both urban and rural areas where it can travel long distances and easily penetrate buildings. That’s the reason it why it has worked so well for decades as TV spectrum.
Incumbents argue that this spectrum is complementary to the already-licensed 700 MHz spectrum and is well suited to support growth of mobile broadband. New entrants say they need access to this spectrum so they can compete against the larger established players.
In their reply comments, Wind and Eastlink note that having access to the 600 MHz band would help solve their big deficit in sub-1 GHz spectrum where the incumbents control 100% of the 850 MHz band and 85% of the 700 MHz band. “Given the superior propagation characteristics and suitability of sub-1 GHz spectrum for the provision of data-intensive mobile broadband services in both urban and rural areas, the need for low-frequency spectrum such as 600 MHz spectrum is particularly acute for new entrants like Wind, and is thus particularly important for wireless competition and the benefit of all Canadian consumers,” Wind argues
Eastlink adds this band is particularly important for rural areas because consumers there would be able to receive the same quality of service as is available in urban areas for a third of the deployment costs. “We could then pass these savings on to Canadians, via lower-priced rate plans, while we continue deployment of our leading-edge network into new areas,” says the company.
First round comments saw many parties argue for the allocation of some the 600 MHz auction proceeds to support transition of OTA to new digital frequencies. Both Wind and Eastlink aren’t entirely opposed. Wind says some of the money could support “legitimate costs” associating with repacking and reallocating TV channels as long as they don’t increase costs for spectrum which again gives integrated wireless/broadcasting entities access to more money. Eastlink says independent broadcasters could be eligible to get money.
Some interveners also suggested that a portion of auction proceeds be used to establish a fund to support local TV initiatives. (For more read Cartt.ca’s previous article.) Eastlink joined Wind in opposing this proposal, with both noting that it’s too early to begin talking about the specific uses of auction proceeds, and besides, they add, Industry Canada is not the right forum to explore broadcasting policy matters.
“Such subsidies must not, however, be connected to spectrum auction revenues, since this would create auction distortions.” – Wind Mobile
Eastlink added that there are still follow-up proceedings as a result of the Let’s Talk TV decisions so it’s best to wait for those.
“It would be premature and entirely inappropriate for Bell and Rogers to use this Consultation as a route to allocate additional funding for local programming, without due process under the broadcast regulatory regime governed by the CRTC,” Eastlink says in its reply comments.
Wind added that if the broadcasting sector is suffering, then those stakeholders should be talking with the CRTC or to federal government, not Industry Canada. “Television broadcasters should make the case to the Canadian Radio-television and Telecommunications Commission and to the Government directly if they feel local television requires greater subsidies from the public purse. Such subsidies must not, however, be connected to spectrum auction revenues, since this would create auction distortions,” said the company.
In replies, the broadcasters lobby and the integrated wireless/broadcasting entities (Bell, Rogers and Shaw) remain adamant that they should get a portion of the 600 MHz spectrum auction revenue pie to cover the costs of transition and to support local TV. The Canadian Association of Broadcasters highlighted the cost to upgrade towers as being significant.
“Some multi-station installations, where more than one station is combined into a broadband antenna, may need to undergo significant redesign and reconstruction costs,” says the CAB. “For example, the UHF DTV transmitter and antenna installations at the CN Tower in Toronto will cost more than $1 million per station to change their channels of operation.”
Bell Canada, Rogers Communications and Shaw Communications want some money to support local TV because they are going to be forced to transition to new frequencies.
“It is also important to ensure that in any repurposing initiative, that broadcasters required to move as a result of the repacking exercise be awarded a new channel with similar coverage/characteristics as well as be fully compensated for the move. This will ensure that OTA broadcasting will not be further disadvantaged,” says Bell.
