Consultation on the Spectrum Licence Renewal Process for Wireless Communication Services (WCS) Licences

1. Through the release of this document, Innovation, Science and Economic Development Canada (ISED), on behalf of the Minister of Innovation, Science and Industry (the Minister), is hereby initiating a consultation on the renewal process for certain existing wireless communications service (WCS) spectrum licences in the 2305-2320 MHz and 2345-2360 MHz frequency bands, which were originally assigned by way of auction. These spectrum licenses are set to begin to expire after March 31, 2024.

2. The Minister, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations, with due regard to the objectives of the Telecommunications Act, is responsible for spectrum management in Canada. As such, the Minister is responsible for developing goals and national policies for spectrum resource use and for ensuring effective management of the radio frequency spectrum resource.

3. In developing policies and licensing frameworks, the Minister is guided by the policy objectives of the Telecommunications Act, and the Spectrum Policy Framework for Canada (SPFC), which seeks to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource. These policy objectives, along with the enabling guidelines outlined in the SPFC, continue to be relevant for guiding the Minister in delivering its mandate of spectrum management.

4. The Minister’s objectives for the renewal of the relevant licences are to:

• foster investment and the evolution of wireless networks by enabling the development of high-quality 5G networks and technology
• support sustained competition in the provision of wireless services so that all consumers and businesses benefit from greater choice and competitive prices
• facilitate the deployment and timely availability of services across the country, including in rural, remote, and Northern regions

5. Through the release of the Policy and Licensing Procedures for the Auction of Spectrum Licences in the 2300 MHz and 3500 MHz Bands in September 2003, ISED began the process of auctioning 172 paired blocks (15 + 15 MHz) of Tier 4 spectrum in the 2300 MHz band for fixed and mobile services. Through the initial auction in February 2004 and subsequent residual auctions in January 2005 and June 2009, a total of 172 licences were awarded to 13 licensees.

6. In November 2013, as part of the license renewal process, ISED published Decisions Concerning the Renewal of 2300 MHz and 3500 MHz Licences (2013 Renewal Decision) confirming that licensees would be eligible to be issued a new 10-year term spectrum licence where all conditions of licence for 2300 MHz licences had been met.

7. In May 2018, through the Auction of Residual Spectrum Licences in the 700 MHz, 2500 MHz, 2300 MHz and PCS-G Bands, ISED issued two additional WCS licences and retained two licences that were unsold.

4.1 Current 2300 MHz Spectrum Usage and Band Plan in Canada

8. In Canada, the WCS band consists of two 15 MHz blocks at the 2305-2320 MHz and 2345-2360 MHz frequency ranges. These blocks were specifically identified and designated for WCS applications in fixed and mobile services. The 2320-2345 MHz portion was designated for Satellite Digital Audio Radio Service (S-DARS) and its complementary terrestrial broadcasting component. Mobile aeronautical telemetry services may also use the 2300-2360 MHz portion of the band on a secondary basis in certain areas.

9. The 3rd Generation Partnership Project (3GPP) includes various organizations that work together to develop industry specifications for equipment used for commercial mobile services including both 4G Long Term Evolution (LTE) and 5G New Radio (NR). The WCS band can be used for both 4G and 5G with a readily available device ecosystem.

10. Similar to the previous 2013 Renewal Decision, ISED is proposing that licences be eligible for renewal where existing conditions of licence have been met. Accordingly, upon expiry of WCS licences, ISED proposes to issue new licences where the licensee can demonstrate that it complies with all applicable licence conditions.

11. As part of the proposed conditions of licence, the licensee will need to demonstrate that it has maintained coverage at the levels indicated in annex A of the 2013 Renewal Decision in order to be eligible for renewal. Any licensee that fails to meet the deployment requirements by their licence expiry date will forfeit any claim to licence renewal.

5.1 Renewal of licences obtained through the 2018 Auction of Residual Spectrum Licences in the 700 MHz, 2500 MHz, 2300 MHz and PCS-G Bands

12. ISED notes that at this time the two WCS licenses obtained through the residual auction held in 2018 will not be impacted by the current renewal process. However, at the end of the initial licence term, or any subsequent term, licensees will have a high expectation of renewal unless a breach of licence condition has occurred, a fundamental reallocation of spectrum to a new service is required or an overriding policy need arises.

13. It should be noted that all spectrum licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations. For example, the Minister continues to have the power to amend the terms and conditions of spectrum licences pursuant to paragraph 5(1)(b) of the Radiocommunication Act. The Minister may make amendments for a variety of reasons, including, without limitation, furtherance of the policy objectives related to the band. Such action would normally only be undertaken after consultation.

6.1 Licence term

14. In the Framework for Spectrum Auctions in Canada, published in March 2011, ISED adopted a flexible approach in determining licence terms, which allows for licence terms of up to 20 years. This decision was based on the recognition that licence terms of 10 years or more would create greater incentive to invest in the telecommunications industry and for the industry itself to further invest in the development of network infrastructure, technologies and innovation.

15. The majority of WCS spectrum licences will expire beginning in 2024, at the end of their current 10-year term. ISED proposes that eligible WCS licences be renewed for a new licence term of 10 years. A 10-year term would provide an incentive for licensees to continue to expand their networks while also affording ISED increased flexibility should the technology landscape change or new use cases arise over the licence term.

16. ISED recognizes that the rate of wireless technology development continues to evolve, and developments such as dynamic spectrum access will provide new opportunities for increased efficiency for spectrum access. As a result, it is expected that although long-term spectrum licences will continue to provide priority access to spectrum, the Minister may authorize other uses of the spectrum through decisions developed in future consultations during the term of the new licences.

6.2 Deployment requirements

17. ISED uses deployment requirements to encourage licensees to put the spectrum to use to provide wireless service in Canada and to deter acquisition of spectrum licences by speculators and those whose intent is to prevent access to the spectrum by their competitors.

18. ISED continues to seek to implement strong deployment requirements that support the Government of Canada’s “use-it or lose-it” policy. As part of the Spectrum Licence Renewal Process for Advanced Wireless Services (AWS-1) and Other Spectrum in the 2 GHz Range, ISED took the opportunity to increase the deployment requirement for the renewed licences in order to expand coverage to additional communities, including rural and remote areas. ISED proposes to take a similar approach for the renewal of WCS licences. As such, ISED is proposing to increase the current deployment requirements (see annex A) to improve coverage and deployment in this band. In this regard, ISED is proposing to model the deployment requirements for WCS licences on the end of term general deployment requirements adopted through the Policy and Licensing Framework for Spectrum in the 3500 MHz Band. Given that technical characteristics and coverage capabilities of the 3500 MHz and 3800 MHz bands are similar to those of the 2300 MHz band, ISED is proposing to adopt similar deployment requirements for renewed WCS spectrum licences.

19. Licences issued as part of the renewal process, as a condition of licence, will require licensees to provide service to a minimum percentage of the population within the licensed service area, as specified in annex A, and to maintain the required deployment levels throughout the entire term of the new licence.

20. ISED will review licensees’ compliance with their deployment conditions at regular intervals throughout the licence term. The annual reporting requirements also require the licensee to provide an update on the deployments and spectrum usage within their licence area each year. Where, at any point in the licence term, the licensee does not comply with its deployment conditions, they may be subject to various compliance and enforcement measures.

21. Spectrum services Canadians when it is put to use, while arbitrage activities do not advance ISED’s policy objectives. In order to ensure the effectiveness of the deployment requirements, to deter speculation, and to ensure spectrum is put to use for the benefit of Canadians, any request for a licence subordination is contingent on ISED’s review as set out in the Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum. Licence holders should not assume that a subordination will be approved without evidence that the spectrum licence is being put to use by the primary licensee and that subordination provides additional public benefits rather than simply a monetary benefit to the primary licensee.

6.3 Mid-term deployment requirement

22. As part of the renewal process for the AWS-1 band mentioned above and in its recent auction processes, ISED has also introduced a mid-term deployment requirement for licensees. Similarly, to further ensure continued increases in the provision of coverage by WCS spectrum licensees, ISED is proposing to introduce a mid-term deployment condition for renewed WCS licences at year 5. The proposed mid-term and final requirements are found in annex A.

6.4 Other conditions of licence

23. ISED is also seeking comments on the remaining proposed conditions of licence, described in annex B, which would apply to new licences issued through the renewal process. These conditions of licence are substantially the same as the ones prescribed on the current WCS licences.

24. The Framework for Spectrum Auctions in Canada states that for licences issued through a renewal process, licence fees that reflect some measure of market value will apply. Any licence fees applicable to licences in this band will only apply after a consultation process.

25. ISED requires time to review all applications made through this renewal process. ISED therefore proposes that, in order to obtain a new WCS licence using the renewal process (which will be outlined following the decisions of this consultation) existing licensees must, at least 150 calendar days before the expiry of the licence, provide ISED with:

• proof that it is eligible to obtain the licence
• proof that it has met all of its current licence conditions
• proof of payment of annual licence fees in advance (if applicable)
• any other materials required by the renewal process decision

26. ISED will review the comments received and publish its decision.

27. Respondents are requested to provide their comments in electronic format (Microsoft Word or Adobe PDF) by email to spectrumoperations-operationsduspectre@ised-isde.gc.ca and to specify the individual questions for ease of reference.

28. Printed submissions should be addressed to:

29. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (DGSO-001-23). Respondents should submit their comments no later than April 21, 2023, to ensure consideration.

30. Soon after the closure of the comment period, all comments received will be posted on the Spectrum Management and Telecommunications website.

31. ISED will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted no later than May 29, 2023. Reply comments will also be posted on the Spectrum Management and Telecommunications website.

32. As all comments and reply comments will be posted on ISED’s website, those making submissions are responsible for ensuring that they do not contain confidential or private information.

33. After the initial comment period, ISED may, at its discretion, request additional information, if needed, to clarify significant positions or new proposals. Should additional information be requested, the reply comment deadline may be extended.

34. All ISED publications related to spectrum- management and telecommunications are available on the Spectrum Management and Telecommunications website.

Each licensee must demonstrate to the Minister of Innovation, Science and Industry that by the end of the licence term, its spectrum is being used at the minimum percentage acceptable to ISED. Licensees must demonstrate coverage to the level indicated. Population in the following table is based on 2016 Census data. The deployment requirements will be based on most recent census information available at the time of assessment.

The following conditions are proposed for the renewed wireless communications services (WCS) spectrum licences.

It should be noted that the licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations, as amended from time to time. For example, the Minister of Innovation, Science and Industry (the Minister) continues to have the power to amend the terms and conditions of spectrum licences, under section 5(1)(b) of the Radiocommunication Act. The Minister may do so for a variety of reasons, including furtherance of the policy objectives set out in section 7 of the Telecommunications Act and the policy objectives related to this band. Such action would normally only be undertaken after consultation.

The licensee must be fully aware of its obligations with respect to licence terms and conditions. Innovation, Science and Economic Development Canada (ISED) will monitor compliance and take any necessary action to ensure compliance and to enforce the provisions of the Radiocommunication Act and the Radiocommunication Regulations.

B1. Licence term

The term of this licence is 10 years from the date of renewal.

At the end of this term, the licensee will have a high expectation that a new licence will be issued for a subsequent term through a renewal process unless a breach of licence condition has occurred, a fundamental reallocation of spectrum to a new service is required, or an overriding policy need arises.

The process for issuing licences after this term and any issues relating to renewal, including the terms and conditions of the new licence, will be determined by the Minister following a public consultation.

B2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of any change that would have a material effect on its eligibility. Such notification must be made in advance of any proposed transactions within its knowledge.

B3. Licence transferability, divisibility and subordinate licensing

This licence is transferable in whole or in part (divisibility), in both bandwidth and geographic dimensions, subject to the ISED’s approval. A Subordinate Licence may also be issued in regard to this licence. ISED’s approval is required for each proposed Subordinate Licence.

The licensee must make the Transfer Request in writing to ISED. The Transfer Request will be treated as set out in Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time.

The licensee must apply in writing to ISED for approval prior to implementing any Deemed Transfer, which will be treated as set out in CPC-2-1-23. The implementation of a Deemed Transfer without the prior approval of the Minister will be considered a breach of this condition of licence.

Should the licensee enter into any Agreement that provides for a Prospective Transfer with another holder of a Licence for commercial mobile spectrum (including any Affiliate, agent or representative of the other licence holder), the licensee must apply in writing to ISED in writing for review of the Prospective Transfer within 15 days of entering into the Agreement, which will be treated as set out in CPC-2-1-23. Should ISED issue a decision indicating that the Prospective Transfer is not approved, it will be a breach of this condition of licence for a licensee to remain in an Agreement that provides for the Prospective Transfer for a period of more than 90 days from the date of the decision.

In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23.

All capitalized terms in this section have the meaning ascribed to them in CPC-2-1-23.

B4. Radio station installations

The licensee must comply with Client Procedures Circular CPC-2-0-03, Radiocommunication and Broadcasting Antenna Systems, as amended from time to time.

B5. Provision of technical information

When ISED requests technical information on a particular station or network, the licensee must provide the information in accordance with the definitions, criteria, frequency and timelines specified in the request. For further information, refer to CPC-2-1-23 as amended from time to time.

B6. Compliance with legislation, regulation and other obligations

The licensee is subject to, and must comply with, the Radiocommunication Act and the Radiocommunication Regulations, as amended from time to time. The licensee must use the assigned spectrum in accordance with the Canadian Table of Frequency Allocations and the spectrum policies applicable to this band, as amended from time to time. The licence is issued on condition that all representations made in relation to obtaining this licence are all true and complete in every respect.

B7. Technical considerations, and international and domestic coordination

The licensee must comply on an ongoing basis with the technical aspects of the appropriate Radio Standards Specifications (RSS) and Standard Radio System Plans (SRSP), as amended from time to time. Where applicable, the licensee must use its best efforts to enter into mutually acceptable agreements with other parties for facilitating the reasonable and timely development of their respective systems, and to coordinate with other licensed users in Canada and internationally.

The licensee must comply with the obligations arising from current and future frequency coordination agreements established between Canada and other countries and shall be required to provide information or take actions to implement these obligations as indicated in the applicable SRSP. Although frequency assignments are not subject to site licensing, the licensee may be required, through the appropriate SRSP, to furnish all necessary technical data for each relevant site.

B8. Lawful Intercept

The licensee operating as a telecommunication common carrier using the spectrum for voice telephony systems must, from the inception of service, provide for and maintain lawful interception capabilities as authorized by law. The requirements for lawful interception capabilities are provided in the Solicitor General's Enforcement Standards for Lawful Interception of Telecommunications (Rev. Nov. 95). These standards may be amended from time to time.

The licensee may request the Minister to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister, following consultation with Public Safety Canada, may exercise the power to forbear from enforcing a requirement or requirements where, in the opinion of the Minister, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance with the requirement can be expected.

B9. Research and development

The licensee must invest, as a minimum, 2% of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those that meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter-carrier payments, bad debts, third-party commissions, and provincial goods and services taxes collected.

The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

B10. Deployment requirements

Licensees will be required to demonstrate to the Minister that this spectrum has been put to use, as specified in annex A of the Consultation on the Spectrum Licence Renewal Process for Wireless Communication Services (WCS) Licences. In all cases, the licensee is required to meet the relevant conditions and to continuously provide services throughout the term of the licence in accordance with these requirements. For services to be considered "continuously provided," the service provider must maintain an active service offering throughout the term of their licence. Where a licence is transferred the requirement for the new licensee to deploy will continue to be based on the date the initial licence was issued. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

B11. Mandatory antenna tower and site sharing

The licensee must comply with the mandatory antenna tower and site-sharing requirements set out in Client Procedures Circular CPC-2-0-17, Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements, as amended from time to time.

B12. Mandatory roaming

The licensee must comply with the mandatory roaming requirements set out in CPC-2-0-17, as amended from time to time.

B13. Annual report

The licensee must submit an annual report for each year of the licence term, which includes all of the following information:

• a statement indicating continued compliance with all conditions of licence
• an update on the deployments and spectrum usage within the area covered by the licence
• existing audited financial statements with an accompanying auditor's report
• a statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
• a report of the R&D expenditures as set out in these conditions of licence (ISED may request an audited statement of R&D expenditures with an accompanying auditor's report at its discretion)
• supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
• a copy of any existing corporate annual report for the licensee's fiscal year with respect to the authorization
• other information related to the licence as specified in any notice updating the reporting requirements issued by ISED

All reports and statements are to be certified by an officer of the company and submitted, in writing, within 120 days of the licensee's fiscal year end. Where the licensee holds multiple licences, spectrum deployment reports should be broken down by licence area. Confidential information provided will be treated in accordance with subsection 20(1) of the Access to Information Act.

Reports are to be submitted to ISED at the following address or by email:

Email: spectrumoperations-operationsduspectre@ised-isde.gc.ca

B14. Amendments

The Minister retains the discretion to amend these terms and conditions of licence at any time.