OTTAWA – Should there be spectrum caps for incumbents? Set asides for smaller companies? If so, what should they be? Should we align our bandwidth plan with the United States? Should we hold the 2500 MHz auction at the same time as the 700 MHz spectrum auction? How much spectrum should be set aside for public safety agencies? Does there need to be government intervention in rural regions? How will any new foreign investment rules affect the auction?
These are just some of the questions Industry Canada has asked the Canadian wireless industry in the paper it released late Tuesday: “Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum.”
This is the official start of the conversation between government, the industry and other stakeholders with the goal of setting both the timing, rules and other constricts around the auction of the spectrum which is currently being put to use by analog OTA TV broadcasters (and which must abandon the spectrum come the end this coming August in the major markets).
Interested parties have until the end of February to respond to this consultation paper and then an addition month for reply comments.
The 46 page paper sets the stage, describing what the industry looks like now, how it’s a growth leader – and notes how the AWS auction in 2008 (which featured caps and set asides) helped boost competition and choice for Canadians.
“(S)everal companies have recently launched service in the wireless market sector as new facilities-based wireless service providers or have announced plans to do so,” notes the paper. “This new entry, mainly in large metropolitan centres, along with the reactions by established wireless service providers to it, appears to have spurred competition in terms of service offerings, pricing plans and product differentiation. These changes appear to have improved the accessibility and affordability of wireless services to certain consumer segments.”
Industry Canada has asked participants to comment on the current state of competition and its anticipated evolution, including the impact on consumers – and in comparison with the wireless markets of other jurisdictions.
It also wants to hear the opinions on the effect of the last spectrum auction, 2008’s AWS proceeding. “In particular, what has been the impact, if any, of such measures on industry concentration, barriers to entry or expansion of services, and the availability of new or improved service offerings and pricing plans?” reads the paper.
“In light of the current conditions in the Canadian wireless service market(s), is there a need for specific measures in the 700 MHz and/or 2500 MHz auction to increase or sustain competition?”
It’s not just TV broadcasters in the 700 band, either. Some wireless microphones operate in the same frequency – and for that reason, are no longer allowed to be sold in the States, which has already switched off analog TV broadcasting and auction the 700 MHz spectrum to wireless providers.
Trying not to read too much between the lines, the paper does seem to lean towards designing another auction with some sort of rules that prevent the big three, Rogers, Bell and Telus, from buying it all up.
“In 2007… the terms of the Advanced Wireless Services (AWS) auction included a spectrum set-aside exclusively for eligible bidders. A number of new entrants responded by acquiring this set-aside, and other spectrum. Some of these new entrants, Public Mobile, Mobilicity, Wind Mobile, Videotron and others have already launched service resulting in a more competitive wireless marketplace, but with unknown impact as of yet on consumer prices and services,” reads the paper.
“Setting the right cap amount is essential. If the limit is too low, there may not be enough spectrum to satisfy the business needs of some companies. If it is set too high, it might fail to fulfill the goal of preventing spectrum concentration.
“Another factor to be considered when applying a spectrum cap is how it should be applied, e.g. whether the cap should apply only to the spectrum being auctioned, to spectrum that is held across one or more bands, or whether it should apply differently across various bidders. How it is applied could limit the efficient allocation of the spectrum.
“If the Department were to implement spectrum aggregation limits (caps):
(i) Should the cap apply to the 700 MHz band only or be broader?
(ii) What should the size of the cap be?
(iii) Should bidders and their affiliates or associates share the cap?
(iv) How long should the cap remain in effect?”
Looks like the wireless telecom regulatory folks have a big winter project.
For the full paper, click here.
– Greg O’Brien
