OTTAWA – To cap or not to cap, that is the burning question in comments to Industry Canada’s proposals for its upcoming auction of unassigned AWS-3 and 700 MHz band spectrum. This is an argument that has played out many times in previous spectrum auction consultations, only this time, one of the large incumbents has switched sides.
Both Bell Mobility and Telus argue that new competitors now have enough spectrum in their holdings resulting from the previous spectrum auctions.
“New competitors have now secured both low-band (700 MHz) and higher-band spectrum (AWS-1, AWS-3 and 2500 MHz). It is now time for Industry Canada to return to a light-handed regulatory approach which has a greater reliance on market forces,” says Bell in its June 12 reply comments.
Telus notes that just as Industry Canada proposes to do away with the set aside for the unsold northern AWS-3 spectrum, a cap on the 700 MHz band should also be removed. Bidding restrictions in the three most recent auctions resulted in a total of 60 MHz of spectrum going unsold, it adds.
“This is clear evidence,” says Telus, “of a lack of need to maintain the spectrum caps on the 700 MHz spectrum in the northern licences and therefore Telus opposes maintaining the spectrum caps.”
But Rogers Communications, SaskTel and Eastlink suggest that a cap or other measure is required for both swaths of spectrum to ensure no single entity can buy it all. They say there is real fear that unless Industry Canada adopts some sort of bidding restrictions on both bands, one company may be able to secure it all to the detriment of competition.
“Having one network control an entire spectrum band (AWS-3) across two provinces – or the majority of a band across a territory, in the case of 700 MHz – may harm the Department’s goals of sustained competition that benefits consumers and businesses and that results in robust investment and innovation by wireless carriers,” states Rogers in its reply.
SaskTel adds that this is a real concern because a single entity could acquire all 50 MHz of AWS-3 spectrum in its province while not deploying a single tower. Just look at Telus, the Crown Corp. says, noting that the national wireless carrier has acquired more than 100 MHz of spectrum in Saskatchewan since 2008 but has yet to deploy any infrastructure whatsoever.
“Telus will then have the most paired mobile spectrum in the province without any operating network.” – SaskTel
“If the proposed rules allow Telus to purchase all 50 MHz of AWS-3 spectrum in Saskatchewan, Telus will then have the most paired mobile spectrum in the province without any operating network. This runs counter to the Government’s objectives of efficient spectrum utilization. This would be the antithesis of the public pronunciations of ‘use it or lose it’,” reads the company’s reply.
To counter this potential outcome, SaskTel says AWS-3 spectrum should be set aside for regional and small carriers. In the alternative a cap of 20 MHz could be used.
Eastlink says that because no new entrant was able to bid on AWS-3 spectrum in Saskatchewan or Manitoba, removing the set aside provisions is the right approach. However, the company adds that some measures should be put in place to ensure regional carriers can secure some of that bandwidth. It agrees with SaskTel that a 20 MHz cap should be adopted.
“This would be consistent with the policy framework established for the band by allowing regional service providers to acquire needed high-capacity spectrum to provide competitive wireless data speeds over the long-term,” Eastlink says in its reply.
Industry Canada is proposing to hold a sealed-bid, second-price auction for all of the residual licences in both bands on August 25.
