RUSSELL, ON – All stakeholders with an interest in the pending 700 MHz and 2500 MHz spectrum auctions got a little of what they wanted Wednesday afternoon in a set of highly anticipated rules released by Industry Canada.
Speaking from Russell, just outside of Ottawa, Industry Minister Christian Paradis confirmed that Canada's 700 MHz auction will take place in the first half of 2013, and that the sale of 2500 MHz bandwidth will follow within a year.
While new entrant wireless providers such as Wind Mobile and Mobilicity didn’t get the set-aside of spectrum they were seeking, they will be guaranteed a slice of the beachfront airwaves after the government opted for an in-auction cap (or spectrum cap as it describes), limiting the amount of spectrum that the incumbent providers can purchase. The government said that the use of auction caps will further competition and choice in Canada’s wireless service.
“These spectrum caps will give four or more service providers in most regions, including AWS entrants or future new entrants, the opportunity to access prime spectrum in both the 700 MHz and 2500 MHz bands,” the decision reads. “The use of caps will not require Industry Canada to identify specific blocks of spectrum for a set-aside, but will allow companies to choose blocks based on equipment ecosystem preferences and business plans.”
Upstart wireless companies, as well as others with less than a 10% share of the country’s total telecommunications market revenue, will also be able to access a lot more foreign capital under the new rules. The government confirmed plans to amend the Telecommunications Act so that telecom providers with less than 10% of national revenue will be exempt from the current restrictions. The new rules will allow the small telcos to maintain their exemption even if they grow revenue above the 10% mark. However, if they grow beyond the 10% threshold via merger or acquisition, foreign investment restrictions will kick in.
In what was seemingly an unexpected part of the ruling, the government decided to extend and improve the tower sharing and roaming policies it instituted in 2008 as part of the Advanced Wireless Services (AWS) spectrum auction. While noting that the new entrants were eventually able to secure national roaming, it acknowledged that took more time than was originally anticipated.
As a result, the government proposed extending mandatory roaming for all parties indefinitely. In addition, in-territory and out-of-territory roaming may be consolidated rather than considered separate issues.
On tower sharing, the decision describes the results of the 2008 policy as “somewhat less successful, considering the number of agreements negotiated and the time that it has taken to reach those agreements”. To deal with that, the government proposed improving the transparency of the process by requiring all wireless companies to make additional tower information available to all licensees on an ongoing basis.
Public safety services such as law enforcement and firefighters are also getting a slice of the prime wireless real estate. The government proposed designating 10 MHz to public safety, but it has yet to decide on the exact band. It noted that the Federal Communications Commission in the U.S. recently awarded the upper D-block for this purpose, which it cited as a factor in its decision.
The government also said that it is taking measures to ensure that Canadians living in rural and remote regions will benefit from the services provided using the 700 MHz band, requiring wireless providers with access to two or more blocks of paired spectrum to roll out to rural areas.
“Licensees will be required to deploy the 700 MHz spectrum to 90% of the population of their existing mobile broadband (HSPA) network footprint within five years and 97% of their HSPA network footprint within seven years,” the decision continues.
More to come as Cartt.ca checks in with various stakeholders on their reactions to the decisions.
