OTTAWA – Industry Canada is tripling down on the number of licences up for grabs in its auction of unassigned licences from the previous 700 MHz and AWS-3 spectrum sales. The department has decided to license the bandwidth on a Tier 4 basis as well as separate the 15+15 MHz GHI AWS-3 block into three individual 5+5 MHz licences.
This means there will be three licences available in the 700 MHz band, one for each of Nunavut, the Yukon and the Northwest Territories. In the AWS-3 spectrum there are now 15 licences to buy with three in each of the northern regions and Manitoba and Saskatchewan.
With respect to disaggregating the AWS-3 GHI block, Industry Canada notes that doing this aligns the domestic band plan with the US.
“In addition, the Federal Communications Commission (FCC) has mandated equipment interoperability in the AWS-1 and AWS-3 bands. It is expected that future LTE standards for the AWS Extension band (covering both AWS-1 and AWS-3 bands) would also support 5 + 5 MHz operation,” states SLBP-003-15.
The original 700 MHz and AWS-3 auctions saw Industry Canada impose competitive measures to ensure new entrants were able to acquire spectrum. This time around, the department has shifted its view slightly, eliminating them for one set of licences but keeping them for the other.
The department states that while competitive measures are no longer needed in the AWS-3 band, they still are appropriate for “managing concentration of 700 MHz spectrum. Maintaining the caps will provide the opportunity for interested service providers to acquire licenses in the North.”
During the consultation phase there was some contention among parties regarding Industry Canada’s proposal to shorten the network rollout timeframe for AWS spectrum. Some interveners supported the proposed five-year timeline, others argued that this would result in the same spectrum having different deployment requirement. In the end, the department stuck to its guns.
“Industry Canada continues to be of the view that since the successful auction of the AWS-3 band conducted by the FCC in the United States, the significant investments made by the US carriers to acquire this spectrum, along with the deployment requirements imposed by the FCC, may expedite the development of an equipment ecosystem in this band. In addition, the 3GPP has started standardization work for a new LTE operating band covering both AWS-1 and AWS-3 bands,” reads the auction licensing document.
“The significant investments made by the US carriers to acquire this spectrum, along with the deployment requirements imposed by the FCC, may expedite the development of an equipment ecosystem in this band.” – Industry Canada
Just as the department opted for a sealed-bid, second-price auction format for AWS-3 spectrum, the same process will be used for this residual bandwidth sale. It notes that while combinatorial clock or simultaneous multiple round ascending auctions allow for price discovery, the fact that there are a limited number of licences available makes the sealed-bid process more appropriate.
There was some division among parties as it related to package bidding for the AWS-3 bandwidth. Some parties such as Rogers Communications and SaskTel argued that allowing this type of approach may open the door for a single entity buying all of the licences. In essence, a package of licences would supersede a bid on a single licence, they said.
The department discounted those concerns noting that if entities were only allowed to bid on the licences individually, a party could be subjected to “exposure risk.”
“Package bidding reduces this risk,” it says, adding that bidders will not be allowed to place a bid of a package of licences including only the G and I blocks because this would result in a party having non-contiguous spectrum. In addition, there won’t be package bidding in the 700 MHz band.
Opening bid prices and the affiliated and associated entity rules will remain as proposed in the consultation document.
Applications to participate at due August 6 at 12:00 p.m. EST. Bids are due August 25 at 12:00 p.m. EST. Provisional winners will be announced on August 27.
