Decision on a New Set of Service Areas for Spectrum Licensing

19. There was general support for the six design principles proposed in the Consultation from the majority of respondents including CCI, CEA, EORN/EOWC, FCM, Imperial Oil, Joel Henderson, RABC, SARM, SaskTel, Shaw, Suncor, Syncrude, Teck, TELUS and Témiscouata. A number of stakeholders including Bell, the Joint Submission, Rogers, TekSavvy, TPS and Xplornet proposed some modifications to the design principles.

Recognize geographic differences

20. There was broad support from stakeholders to recognize the differences between urban and rural areas. TekSavvy and the Joint Submission suggested that in addition to urban and rural areas, ISED should recognize the unique characteristics of remote areas, which was also supported by CNOC and Rogers in their reply comments.

21. Québecor did not oppose the principle of recognizing geographic differences but commented that there is no evidence to indicate that the current methods of obtaining spectrum licences in rural areas were insufficient. Xplornet did not see the need for the new set of tier areas to cover all of Canada, recommending that separate Tier 5 licensing areas should only be created for areas with medium and large population centres.

Foster demand

22. All commenters supported the concept that Tier 5 service areas should include either a population base or another source of economic value (i.e. transportation corridors, industrial use, cultural importance or resource base) to foster sufficient demand for acquiring the spectrum licence.

23. Organizations from the resource sector including Imperial Oil, Syncrude, Suncor and Teck advocated for creating licence areas around industrial footprints in low population areas in order to drive economic value.

Maintain technological and competitive neutrality

24. Imperial Oil, the Joint Submission, SaskTel, Suncor, Teck, TELUS, TPS and Xplornet supported the principle of technological neutrality, noting that technology is constantly evolving and licensees should be able to evolve their network deployment to reach new customers and to retain their existing customers. Bell, CCI, RABC, Rogers and Shaw expressed some concerns that technological neutrality could conflict with the design principle of interference mitigation. They suggested that technological neutrality is difficult to maintain in smaller service areas due to the increased number of boundaries and adjacent networks. Joel Henderson commented that technological neutrality should not be an obstacle to service deployment. CCI, Shaw and Rogers suggested restricting the use of Tier 5 to higher frequency bands, since their propagation characteristics are more conducive to mitigating interference.

25. With respect to competitive neutrality, only the Joint Submission had a specific suggestion regarding the design principle, which suggested replacing “maintain technological and competitive neutrality” with “ensure technological neutrality and encourage competition.”

Minimize potential interference

26. Bell, CCI, CNOC, Imperial Oil, the Joint Submission, RABC, SaskTel, Suncor and TELUS supported drawing boundaries in low population areas to minimize interference. Bell, Rogers and TELUS also suggested that creating fewer licence areas would reduce complexity, minimize interference and coordination challenges, and avoid undue administrative burden.

27. The RABC and others suggested using a common duplexing scheme and to consider synchronization as technology constraints to facilitate coordination and interference mitigation. Rogers and Québecor also supported this approach but stated that it will not completely eliminate interference in smaller service areas.

Align with existing tier structure

28. Imperial Oil, Rogers, Sasktel, Shaw, Suncor, TELUS, TPS and Xplornet supported the principle of nesting Tier 5 areas within the corresponding Tier 4 boundaries to maintain continuity with the existing tier structure.

29. The Joint Submission expressed concern that nesting within current Tier 4 areas would result in some population centres remaining bisected.

Align with grid cells

30. Imperial Oil, Rogers, SaskTel, Suncor, TELUS, TPS and Xplornet supported the principle of aligning with grid cells, with many noting their own systems rely on ISED’s existing grid cells. Rogers also commented that the grid cell system should be reviewed to seek improvements to achieve greater granularity, and TPS commented that some variance should be allowed to account for municipal and regional boundaries in the Golden Horseshoe region around Lake Ontario.

31. The RABC commented that it may be worth considering borders that are not constrained to grid cell boundaries in order to adapt to and evolve with Canadian population changes.

Recognize geographic differences

32. ISED recognizes the importance to stakeholders of distinguishing between urban and rural regions and having separate licence areas that can support the many different business models that operate in Canada.

33. ISED has taken these views into account by considering population distribution and density in developing the Tier 5 service areas, such that they support network deployment and can support multiple business models.

34. ISED will maintain the design principle of recognizing the geographic differences between urban and rural areas. Where there is conflict with other design principles, ISED has prioritized recognizing geographic differences over other design principles in order to best serve the local community.

Foster demand

35. ISED recognizes that, in general, there is higher demand for areas with a significant population base that can generate increased commercial activity and consumption of services; however, ISED also notes that there are business cases for obtaining licences to areas with little to no population base. For example, resource extraction or agricultural enterprises may have uses for spectrum that do not require a significant local subscriber base. Use cases vary regionally and even over time, whether they are in areas adjacent to or far away from urban centres, operate only during certain periods of the year, or expire after a certain timeframe.

36. There are also non-commercial uses for spectrum that benefit the public good. This includes spectrum that is used to provide municipal or social services that enhance the capabilities of different public safety entities such as fire, police and other first responders, or that can be utilized for research by public and private institutions.

37. ISED believes that all of the aforementioned use cases for spectrum are compelling and has designed the Tier 5 service areas with the flexibility in mind to support multiple services and business models. ISED will maintain the design principle to foster demand.

Maintain technological and competitive neutrality

38. There were mixed views regarding technological and competitive neutrality. Respondents conceptually agreed with these principles, but disagreed from an implementation standpoint if it would impede service delivery or result in the inefficient use of spectrum due to interference issues.

39. With respect to competitive neutrality, the intent of this principle was to design areas in such a way as to not give an unfair competitive advantage to any group of stakeholders over other users of spectrum such as through the placement of boundary lines that better align with certain business models. Similarly, with respect to technological neutrality, some technologies can be used for network deployment with precise coverage while other technologies may not support this type of precision. As such, technological neutrality was meant to ensure that the Tier 5 service areas do not favour certain technologies over others.

40. Stakeholders noted that these technological concerns surrounding service delivery impediments or inefficient use of spectrum due to interference issues could be addressed in future consultations when developing band plans and the licensing framework for each specific band. In these consultations, issues regarding band plan, technical constraints, type of service and best tier size or combination thereof, can be discussed, along with competitive issues such as set asides or deployment obligations.

41. ISED will maintain the design principle of technological and competitive neutrality for the development of the new Tier 5 service areas to foster a competitive and innovative marketplace.

Minimize potential interference

42. The minimizing of interference as a design principle received strong support and many stakeholders made suggestions for addressing potential interference concerns. These comments included keeping urban population centres whole, having smooth boundaries, factoring in the growth of population centres, drawing boundaries in low population areas, and considering both topography and radio propagation, where appropriate.

43. ISED agrees that the aforementioned suggestions are all based on sound engineering principles and would minimize potential interference. As such, ISED has endeavoured to factor in these concepts in the design of the new Tier 5 service areas.

44. ISED will maintain the design principle of minimizing potential interference as it will help to facilitate and maximize the efficient usage of spectrum in the new Tier 5 service areas.

Align with existing tier structure

45. ISED recognizes the broad support for aligning Tier 5 service areas with the existing tier structure. ISED also acknowledges the concerns raised by the Joint Submission regarding certain population centres, which are bisected by Tier 4 boundaries. In almost all cases, these bisections were not due to the design of the Tier 4 areas, but occurred naturally from population growth and urban expansion.

46. While ISED is not amending the Tier 4 service areas at this time, it agrees that bisecting population centres may lead to underserved areas or coordination challenges if an operator cannot obtain both licences associated with the bisected population centre. Given the comments received, ISED has designed the Tier 5 service areas to avoid bisecting communities wherever possible.

47. ISED will maintain the design principle of aligning Tier 5 service areas with the existing tier structure.

Align with grid cells

48. Most respondents who commented on the use of grid cells supported their continued use as the building blocks of ISED’s service areas. Operators have themselves adopted the use of grid cell systems in their network deployments. Given this established support, ISED believes that the use of the existing grid cells is the most efficient and straightforward approach in designing the new service areas to ensure minimal disruption to existing users.

49. ISED will maintain the design principle of aligning Tier 5 service areas with the existing grid cell structure. In order to align with ISED’s spectrum grid cells, the Tier areas shown in this Decision paper may vary slightly from the actual boundaries ISED will be implementing into its spectrum management program.

50. In response to the Consultation, several additional design principles were raised by stakeholders for consideration in both the comments and reply comments. ISED reviewed all submissions and documented the suggestions that received broad support from stakeholders. Many of these suggestions were related to approaches to mitigate potential interference.

51. The Joint Submission, CNOC and TekSavvy requested that Tier 5 boundaries take into consideration the needs of the local communities rather than applying a national formula.

52. Rogers, Shaw, TELUS, RABC and the Joint Submission noted that Statistics Canada mapping layers were established without taking radio propagation into account. They proposed taking radio propagation into account by considering the topography (i.e. elevation, bodies of water, etc.) of the terrain when designing the new boundaries.

53. Rogers, TELUS, Teksavvy, the Joint Submission and Shaw suggested establishing an urban growth factor (referred to as a “buffer” in this Decision). The use of buffers was suggested to account for future population expansion and to smooth out some of the jagged boundaries of population centres. The concept of buffers was raised to facilitate network deployment between boundaries and avoid interference between systems of two different licensees. EORN/EOWC and Xplornet were opposed to creating buffers around urban centres. Xplornet said a buffer would exclude rural service providers from the opportunity to serve the rural population adjacent to the urban centres.

54. Bell, Québecor, Rogers and Shaw were against creating Tier 5 service areas that are completely enclosed within another Tier 5 area. Shaw commented that this could negatively affect contiguous network coverage and result in pockets of underserved communities.

Taking local considerations into account

55. In developing the new Tier 5 service areas, ISED designed the areas to recognize the diversity of local communities across Canada. This was broadly supported by stakeholders. A single pan-Canadian approach could have resulted in a number of areas that were either too large or small in area and/or population, or may have favoured a single business model—in contravention of a number of the stated design principles in this Decision.

56. In general, ISED has tried to align the Tier 5 service areas with the existing municipal boundaries. In localized cases, minor adjustments were made to ensure that small, medium and large population centres were not bisected by the Tier 5 boundaries. This was carried out so that a service provider would be able to serve the entire community without having to obtain multiple licences, which supports the efficient use of spectrum and helps to mitigate the potential for interference.

57. ISED agrees that Statistics Canada map boundaries do not account for radio propagation and that topography, and in particular bodies of water and marked elevation, are factors that should be considered in network design and coverage. Given Canada’s diverse geography, taking topography into account requires slight deviations to the established Statistics Canada boundaries in certain situations.

58. In designing the new Tier 5 service areas, the local considerations mentioned previously were taken into account to ensure that the Tier 5 service areas minimize impediments to deployment while encouraging robust and competitive service delivery, especially in underserved locations. As a result, ISED did not always adhere to Statistics Canada boundaries but rather, showed flexibility in setting boundaries to reflect local requirements.

59. ISED has taken into account local considerations as an additional design principle used in the creation of the new Tier 5 service areas.

Urban growth factor (Buffer)

60. ISED agrees with the principle of creating a buffer around medium and large population centres as it would help minimize potential interference. Taking population growth and urban sprawl into account, a buffer will help to ensure that the boundaries run through relatively low populated areas. Furthermore, a buffer would help smooth out odd, jagged shaped urban boundaries, which would otherwise create significant challenges for network deployment and interference mitigation.

61. From the comments received, there was no consensus on the size of a buffer. The buffer size needs to balance two different design principles: minimize potential interference and recognize the geographic difference between urban and rural areas. Minimizing potential interference would call for a larger buffer so that the boundary between Tier 5 areas would only pass through the least populated areas. Since population growth is not homogeneous in all directions, a larger buffer could result in some areas remaining underserved for an extended period. Maintaining the urban-rural separation would generally result in the use of a smaller buffer, so that rural areas would not be included in the same licence area as the urban centre.

62. Given the comments received and having experimented with buffers of varying sizes, ISED has implemented a buffer of 5 km to be used around medium and large population centres only. ISED found this added buffer significantly smoothed the jagged boundaries and accounted for future population growth, while not overly extending into the rural areas. Note that if the buffer overlaps with a neighbouring population centre, whether small, medium or large, the two centres have been amalgamated into a single area.

63. ISED has incorporated a 5 km buffer as an additional design consideration around medium and large population centres.

Tier 5 area enclosed within another Tier 5 (Islands)

64. Traditional fixed and mobile wireless networks endeavour to cover areas as completely as possible to avoid coverage gaps. The possibility of islands is a risk to network contiguity and an important concern for service providers. In their comments, Bell’s concern with this was that it would create an “unnecessarily complicated set of service areas with serious interference management challenges.” This additional concern was also shared by Shaw, Québecor and the Joint Submission.

65. ISED recognizes that completely enclosing one service area within another may lead to situations that impact network deployment and increase network costs such as ease of backhaul access. As a result, ISED agrees with the feedback raised by stakeholders that Tier 5 areas should not be completely enclosed within another Tier 5 area.

66. ISED has avoided enclosing a Tier 5 area within another Tier 5 area by adopting this as an additional design principle.

Decision

71. Many respondents supported using Option 1 or a modification of this option as the base model for the Tier 5 service areas.

72. TPS, CCI, SaskTel, EORN/EOWC, CEA, Témiscouata, Suncor, Imperial Oil and Teck supported Option 1 over Option 2 because it better aligned with their business models. CCI supported Option 1 as it would prevent stakeholders from choosing to serve only the most densely populated areas and exacerbating the urban-rural divide. The TPS requested that boundaries of the Greater Toronto Area (GTA) be drawn along regional municipal boundaries in order to best serve the local communities.

73. The Joint Submission submitted their own proposal but also stated that Option 1, with certain modifications, would closely resemble their alternative proposal. TekSavvy generally supported the alternative proposal by the Joint Submission but also suggested that Option 1 with a minimum population threshold would be preferable to Option 2.

74. Xplornet opposed Option 1, arguing that it would replicate the problems of Tier 4s; namely licensing both high-density urban cores together with low density adjacent rural areas. Québecor and Rogers found that Option 1 would result in too many areas, complex management and increase in the risk of interference. Bell suggested using CDs throughout the country. TELUS and Shaw were concerned with using CSDs and commented that it would create too many service areas, become an administrative burden, and create challenges for coordination and interference mitigation, especially in urban areas.

Amalgamation of adjacent urban areas

75. Imperial Oil, Québecor, Rogers, SaskTel, Shaw, Suncor, Teck, TELUS, Témiscouata, and Xplornet supported the amalgamation of adjacent urban areas into a single Tier 5 service area in situations where municipal boundaries divide the urban area into separate Tier 5 service areas. TELUS stipulated that any CSD touching an urban boundary should be amalgamated. SaskTel proposed combining urban adjacent areas unless they crossed a provincial or territorial boundary.

76. On the other hand, the TPS supported dividing the GTA along regional municipality boundaries. CNOC proposed dividing major urban centres along CD boundaries. In their reply comments, the Joint Submission proposed dividing urban centres with populations over 500,000 along CD boundaries.

77. TekSavvy also opposed the amalgamation of adjacent CSDs in urban areas as it would make them unaffordable to smaller entities. In their reply comments, they stated that a population of 200,000 to 300,000 would provide an adequate balance between size and affordability in major urban centres. CCI commented that amalgamation is unnecessary if Tier 5 is limited to spectrum with suitable propagation characteristics.

Minimum/maximum area size

78. Témiscouata proposed a minimum area of 5 km² for a Tier 5 service area. EORN/EOWC argued for the minimum size to be set at 2 km² or a minimum of 4,000 people. TELUS reasoned that areas should be no smaller than the size required to accommodate a small cluster of base stations. CCI and Xplornet opposed setting a maximum area limit for Tier 5 service areas, but proposed creating Tier 5 areas only for medium and large population centres, i.e. for populations above 30,000. In northern areas, CEA suggested a maximum area of 50,000 National Topographic Series grid units, whereas Témiscouata suggested a maximum area of 1,000 km².

79. In some cases, stakeholders commented that population size is a more important metric for consideration. Bell proposed Tier 5 areas should use CDs, but commented that if ISED were to implement Option 1, it advocated for the amalgamation of CSDs to reach a population target of 30,000. The Joint Submission advocated for a consistent population target for each tier across Canada: they proposed 10,000, plus or minus 5,000. CNOC and TekSavvy supported the Joint Submission; however, TekSavvy advocated for a minimum of 10,000 without the 5,000 variation allowance.

Treatment of northern and remote areas

80. Regarding northern and remote areas, SaskTel, Suncor, Teck and Imperial Oil believed that Option 1 was suitable for meeting the consultation objectives. TELUS suggested using the census consolidated subdivision (CCS) boundaries across Canada, including in the north. The Joint Submission stated that to overcome the low population density characteristics of these regions, Tier 5 areas should be appropriately large enough to encompass multiple communities. Subsequently, the Joint Submission suggested the use of CDs in northern areas. Témiscouata supported Option 1 only if a maximum area size was applied, stating that areas would otherwise be the same size as Tier 4 service areas. Xplornet did not support the use of Option 1 for northern and remote areas as the creation of Tier 5 service areas are only required to establish clear distinction between urban and rural. Rogers opposed Tier 5 service areas for low population areas such as the northern parts of Canada, stating that they would not be effective in achieving ISED’s overall policy objectives.

81. Xplornet, SARM and Rogers were more supportive of Option 2 than Option 1. Xplornet suggested implementing Tier 5 service areas for Option 2 only for medium and large population centres. Rogers preferred Option 2 with some modifications. Shaw and Québecor stated that despite their overall opposition to the creation of smaller service areas, that if ISED were to nonetheless adopt Tier 5 service areas, they support Option 2 over Option 1.

82. TELUS, the Joint Submission, and TekSavvy found that some elements of Option 2 were desirable while other elements were not, leading them to suggest a hybrid approach. These respondents stated that Option 2 was better than Option 1 at separating urban from rural, but that it would not satisfy the design principle of fostering demand in some areas. The Joint Submission also commented on population growth and the concept that urban boundaries will shift over time.

Treatment of the non-population centre areas in Option 2

83. SaskTel, CCI, the Joint Proposal and TekSavvy disagreed with the “other area” as proposed in Option 2, stating that it would pose challenges for smaller providers in accessing spectrum. The Joint Submission commented that the "other area" could be large and unwieldy, and be challenging to serve. EOWC/EORN noted that the "other areas” are nearly as large as Tier 4 areas but lack the economic centres that would make such an area commercially viable.

84. TELUS, Bell and Shaw highlighted that parts of the proposed “other area” could still foster demand among a low population as long as there exists some other economic value in the area. Rogers suggested that the “other area" be divided so that each area contains a major population centre.

Licensing of the non-population centre areas in Option 2

85. Regarding a licensing mechanism for the “other area,” SaskTel and CCI supported the use of a first-come, first-served mechanism, with CCI suggesting that users be required to deploy within a reasonable time limit. It also supported licensing these areas on a shared basis. Rogers, Shaw, Québecor and Xplornet supported using the same licensing approach for all areas. TELUS suggested that the licensing mechanism should be addressed on a band-by-band basis.

Minimum population size

86. Both Rogers and the Joint Submission proposed increasing the definition of the minimum population for a population centre to 5,000 to reduce the number of service areas. TekSavvy supported the Joint Submission approach but suggested that 10,000 would be a reasonable minimum population. TELUS suggested that a minimum population of 1,000 to 2,000 might be sufficient if a minimum population density were applied. SaskTel indicated that it would not object to a minimum population of 2,000 should ISED implement Option 2 for its new Tier 5 service areas. EORN suggested 4,000 as a minimum.

Treatment of northern and remote areas

87. Bell was of the view that Option 2 was suitable for northern areas. Témiscouata said it was suitable only if Tier 5 service areas captured PCs with a minimum population of 100. TELUS commented that this option was not suitable for rural areas but that it could be suitable for the north. Rogers proposed that licences covering these regions be designed to maximize coverage. Teck found that Option 2 was not suitable for either remote or northern areas.

Amalgamation of population centres

88. Rogers, Bell, Québecor, Shaw, TELUS, Sasktel, Xplornet and Témiscouata suggested amalgamating adjacent population centres and licensing them as single areas, highlighting that this would minimize the potential for interference between providers and optimize spectrum management. Rogers proposed that any two major population centres less than 30 km apart should be amalgamated into a single licensing area. This proposal was also supported by Québecor and Shaw. TELUS proposed the amalgamation of all CCS that overlap population centre boundaries.

89. TekSavvy and the Joint Submission supported the amalgamation of population centres; however, both parties also suggested dividing these PCs if they became too large. The Joint Submission proposed dividing PCs above 500,000 inhabitants into separate licensing areas whereas TekSavvy suggested dividing major PCs to create service areas of 200,000 to 300,000 inhabitants. The TPS suggested dividing the GTA along regional municipal boundaries.

90. Alternative proposals were submitted by Bell, the Joint Submission, Rogers, Shaw, TELUS, TPS, Xplornet, Imperial Oil, Suncor, Teck and Syncrude. Bell’s approach was similar to Option 1 in that it proposed the use of Statistics Canada census divisions across Canada, creating 293 Tier 5 areas. If ISED does not adopt this approach, Bell proposed a secondary option, which would create approximately 500 Tier 5 areas based on amalgamating all adjacent CSDs (similar to Option 1) until a population target of 30,000 was reached.

91. TELUS proposed a hybrid approach of Option 1 and Option 2 by suggesting the use of CCS areas, which are larger and fewer in number than CSDs. Furthermore, TELUS proposed that all CCS areas, which encompass portions of the same PC, should be amalgamated together thus creating a single undivided Tier 5 area that contains the population centre.

92. Rogers proposed a variation of Option 2, which would create approximately 360 Tier 5 areas. It proposed that all population centres of at least 5,000 inhabitants should become their own service area, and all population centres that share a common border should be amalgamated together.

93. The Joint Submission presented a comprehensive model that would create 1,298 Tier 5 areas. Their approach was similar to Option 1 for remote and rural areas and similar to Option 2 for urban areas. They proposed dividing the northern and remote areas by CDs and a specific type of CSDs (unorganized CSDs). All population centres between 5,000 to 500,000 would have their own Tier 5 service area. For population centres above 500,000, their proposal was to divide them along CD boundaries. For the rest of the country, the Joint Submission proposed amalgamating all CSDs until a target population of 5,000 to 15,000 per service area was reached. In their reply comments, CNOC supported the model proposed by the Joint Submission.

94. TekSavvy’s proposal was similar to the Joint Submission but proposed setting the minimum population to 10,000 required for a population centre to be its own Tier 5 area rather than the minimum of 5,000 proposed by the Joint Submission. TekSavvy also supported employing a buffer to smooth out the boundaries and account for population growth. Further, they recommended dividing large population centres to obtain a population target of 200,000 to 300,000 per service area.

95. Shaw’s proposal would limit the creation of Tier 5 service areas to those existing Tier 4 areas that do not meet the Consultation objectives. They proposed that all population centres above 2,000 should have their own service area, and areas with economic or social value that were located adjacent to these population centres would also become part of that service area. Their proposal also supported adjusting boundaries to account for topography and radio propagation and smoothing out the boundaries with buffers. Shaw’s proposal was supported by Québecor.

96. Xplornet supported Option 2 with a modification to create Tier 5 service areas based on medium and large population centres only (i.e. populations greater than 30,000).

97. The TPS provided a Tier 5 approach for the heavily populated western end of Lake Ontario based on regional municipal boundaries. These regional municipal boundaries match the CD boundaries defined by Statistics Canada.

98. Imperial Oil, Suncor, Teck and Syncrude proposed the use of mining/surface lease areas to create Tier 5 areas in their locations of interest.

99. Following an analysis of different mapping techniques, ISED has decided to use Statistics Canada mapping layers as the basis for the creation of the new Tier 5 service areas. Statistics Canada defined areas have a multitude of social, economic and demographic data available, which is accessible to ISED and all stakeholders to study for planning purposes. These areas are well established and have been independently created. This mapping approach is also consistent with the methodology that was used to create the current Tier 4 areas.

100. In reviewing the comments and alternative proposals submitted, one of the main themes expressed by stakeholders is that Canada cannot be defined by one monolithic geographical categorization given the huge contrasts in both terrain and population densities. Canada is a land bounded by three oceans, with thousands of lakes and rivers, prominent mountain ranges and flat prairies. It is populated by large metropolitan cities, tiny hamlets and villages, and large swaths of land devoid of any inhabitants.

101. Therefore, this Decision does not adopt a “one-size-fits-all” approach in developing the new Tier 5 service areas. Instead, ISED believes that adopting criteria that recognize the differences in geography and population densities promotes the objective of maximizing the economic and social benefits to Canadians.

102. Specifically, ISED’s proposal to recognize the unique characteristics of urban and rural areas was well supported by respondents. ISED also sought comments on northern and remote areas. In the comments received, stakeholders specifically requested that the design principle on geographic differences also recognize the unique characteristics of remote areas as well as those of urban and rural areas. Furthermore, there was significant support for very large urban areas to be subdivided.

103. Consequently, in order to recognize and reflect the unique geographic distribution of Canada’s population and to allow for greater flexibility in the management of spectrum, ISED has decided to designate the new Tier 5 service areas into four specific categories: metropolitan areas; urban areas (medium and large population centres); rural areas; and remote areas. Having consistent designations across the country for similar service areas will enable more equitable treatment in the application of policies and frameworks (e.g. spectrum utilization, technical licensing, fees and frameworks). However, ISED also recognizes that flexibility is required in addressing specific uses, applications or considerations in any given frequency band. As such, ISED may develop additional measures or alternative definitions on a case-by-case basis. In those cases, proposals for alternative definitions would generally be part of any applicable consultation.

104. The Tier 5 service areas were created using Statistics Canada’s 2016 Census information. As mentioned previously, ISED acknowledges that Canada’s population distribution changes over time, however, the designations of the new Tier 5 service areas made in this Decision will remain until otherwise specified. Possible changes to these designations in the future remains a possibility, however, any such changes would be carried out through the ISED consultation process.

Decision

105. The comments and alternative proposals highlighted certain aspects of both Options 1 and 2 that stakeholders agreed should be included in the creation of a new set of service areas. ISED concurs with many of these comments, and as a result has adopted a hybrid approach based on elements of both consultation options. The following discussion showcases ISED’s categorization of Canada and its use of a hybrid approach in designing the Tier 5 service areas.

106. There was broad support from stakeholders for keeping urban population centres as a single tier area to ensure contiguous network deployment and efficient spectrum usage. However, stakeholder views were mixed regarding the treatment of Canada’s largest metropolitan areas.

107. The cities of greater Vancouver, greater Toronto and greater Montreal, represent exceptional outliers (see annex A, table A1) compared to other medium and large population centres. Together, these are the three largest metropolitan areas and make up 32% of Canada’s population. ISED has determined that it would be beneficial to avoid having a third of the country’s population located within only three Tier 5 service areas in order to allow for more access to the spectrum for smaller service providers, as well as for non-traditional spectrum users who may not want to deploy to the entire area.

108. Therefore, ISED has decided to divide these three large metropolitan areas by municipal or regional municipal boundaries where possible, so that the Tier 5 service areas can align with municipal governments for the delivery of services such as utilities, sanitation and public safety functions to their constituents. These municipal or regional municipal boundaries already take into account not only the major population centres, but also the suburban and exurban areas surrounding the population centres. As a result, these boundaries already include an inherent buffer and do not require an additional buffer.

109. Creating smaller Tier 5 service areas in these metropolitan areas will satisfy the Consultation objectives of improving access and flexibility to the spectrum. Dividing these areas reduces barriers to entry, enables new service providers and use cases and is in line with the objectives set out in the Consultation.

110. ISED is proposing that these three metropolitan areas be divided along Statistics Canada 2016 boundaries into multiple Tier 5 service areas, using either CDs or CCS boundaries with no buffers:

• Greater Toronto: CD regional boundaries
• Greater Montreal: Consolidated CD regional boundaries (the CD boundaries were consolidated in the Montreal area so that they better align with the established suburbs of the city)
• Greater Vancouver: CCS municipal boundaries (considerations such as bodies of water and not splitting communities resulted in some slight deviations from the CCS boundaries and additionally one CCS was amalgamated)

Decision

111. Given the comments received, ISED is in agreement that Option 2 better distinguishes between urban and rural compared to Option 1. ISED recognizes that population centres are important drivers to foster demand, which in turn facilitates the various uses for spectrum. As such, ISED is proposing that all medium and large population centres, excluding the three metropolitan areas, will have their own Tier 5 service area with a buffer of 5 km to account for future population growth.

112. ISED is also cognizant of the strong support for amalgamating adjacent urban areas that are divided along Statistics Canada boundaries. Adjacent urban boundaries are indistinguishable to most Canadians who value mobility and the benefits of being able to obtain wireless services both in their home and outside their home. As such, ISED is proposing that any adjacent medium or large population centre including their buffer that touches upon another population centre will be amalgamated together into a single licence area.

113. In certain cases where a medium (30,000 to 99,999) or large population centre (100,000+) becomes completely enclosed (i.e. the design principle of avoiding enclosing a Tier 5 area within another Tier 5 area) within a surrounding Tier 5 service area (i.e. CCS boundary lines), ISED is proposing to subsume the population centre into the surrounding Tier 5 service area. This technique is utilized when the size of the population centre represents a majority of the surrounding service area or when the population outside the population centre but within the CCS boundary lines is less than 10,000. In situations where the population centre is not subsumed into the surrounding service area, the remaining area outside the population centre is divided using the boundary lines associated with the next most granular Statistics Canada map layer (i.e. aggregate dissemination and dissemination areas). This division is required to ensure that the population centre is not enclosed by a single Tier 5 service area. The division of the surrounding area would result in the creation of two new service areas with roughly equal population.

Decision

114. ISED acknowledges that large portions of Canada can be considered rural. Finding an appropriate methodology to create rural Tier 5 service areas required careful consideration of stakeholder comments as well as considering best practices in spectrum management, such as not creating too many service areas to become an administrative burden for the industry and ensuring that areas were compact and had boundaries that could minimize interference. Rural areas defined in this Decision are areas that are not considered metropolitan or urban as defined in sections 8.1 and 8.2, nor remote as defined in section 8.4.

115. In the Consultation, ISED had proposed to create Tier 5 service areas around small population centres (2,000 to 29,999) similar to medium and large population centres. ISED recognizes that most population centres under 30,000 are found in otherwise rural and remote areas of Canada. ISED is of the view that these smaller population centres often serve as economic “anchors” in these areas. ISED agrees with comments received that separating these population centres from their surrounding areas could jeopardize the viability of service provision in the outlying areas. As a result, ISED will not create separate Tier 5 service areas for small population centres but will subsume them in their surrounding areas.

116. ISED took into consideration the concerns raised by stakeholders regarding the number of rural service areas, and endeavoured to develop Tier 5 service areas larger than those proposed in Option 1. To accomplish this, ISED selected the next largest Statistics Canada map layer (the consolidated census subdivisions) as the foundation for the rural Tier 5 areas. The CCS map layer, in most instances, contains areas with a population base. The next map layer larger than the CCS is the census division (CD), however, the CD was deemed too large and does not generate the urban-rural separation that is a core objective of this Decision. For example, in many instances the CD was the same size as the existing Tier 4 service areas.

117. The concept of amalgamating Statistics Canada defined areas up to a population threshold in rural parts of Canada was a common theme from the comments. While there was no stakeholder consensus on an appropriate target for amalgamation, some respondents suggested a target population of 10,000 per Tier 5 area. ISED examined a range of amalgamations including up to 30,000, and found that this would lead to very large licence areas in too many cases. This would result in too many Tier 5 service areas that would remain the same as their corresponding Tier 4 service areas, which runs counter to the Consultation objectives of increasing access and flexibility.

118. In order to limit the fragmentation of the Tier 4 service areas and the associated administrative burden, and to reduce the potential for network interference between licensees, ISED has amalgamated CCS areas by generally targeting a population range of 10,000 ± 3,000. The variance was included to allow some flexibility to ensure the compactness of the amalgamated CCS areas. To ensure each area reached the minimum population, the amalgamation sometimes surpassed the target.

119. For example, Prince Edward Island contained 45 separate CCS areas, many of which were low in population. To limit fragmentation, ISED amalgamated the CCS areas in Prince Edward Island to produce seven Tier 5 service areas.

120. Where an individual CCS had a population above the target, the CCS was not divided. Furthermore, ISED subsumed all small population centres within their corresponding CCS to act as an anchor for the use of spectrum in the new Tier 5 service areas.

121. ISED made some minor adjustments to CCS boundaries to account for topography, bodies of water, ease of network deployment, and to include areas of interest such as highways and airports, as requested by many stakeholders.

122. As part of the development of the new Tier 5 service areas, ISED reviewed the existing Tier 4 service areas across Canada, and determined that 14^{Footnote 2} Tier 4 service areas cover a small geographic size. These service areas already meet the design principles in the Decision and are based on the existing CCS boundaries. Further divisions were considered unnecessary.

123. ISED also received alternative proposals based on surface mining and/or land leases that were narrowly specific to those business interests and were not competitively neutral. ISED has taken a competitively neutral approach in designing the Tier 5 service areas.

Decision

124. There were a limited number of comments and suggestions from stakeholders regarding Canada’s remote areas. Due to low population in these regions, the main challenge in developing Tier 5 areas is creating reasonably sized geographical areas that still foster economic demand.

125. ISED notes that in some areas with very low population density, other activities such as agriculture or resource extraction can justify demand for the spectrum. Rather than amalgamating these areas into even larger service areas in pursuit of reaching a minimum population threshold, they were instead divided to improve access to spectrum for other types of spectrum uses. ISED recognizes that the existing Tier 4 service areas in northern and remote parts of Canada are very large and that providing some divisions will make acquiring the spectrum more practical for stakeholders wishing to serve smaller areas.

126. In these northern and remote areas, which have been defined in this Decision as those regions highlighted in figure 1, the use of CCS or amalgamated CCS boundaries provided little or no divisions to the existing Tier 4 service areas. These regions represent the ten lowest population density Tier 4 service areas in Canada and cover vast geographic areas. As such, ISED has decided to partition these areas using smaller Statistics Canada map layers such as dissemination areas (DA) and aggregate dissemination areas (ADA). DA/ADA sized licence areas would allow spectrum users to acquire spectrum in a more targeted manner that better fits with their business plans. This technique will help limit the discrepancies in size between Tier 5 service areas across the country.

127. To adhere to the principle of not having Tier 5 areas completely enclosed within another Tier 5 area, only the major DA/ADA lines were used as the boundaries of the Tier 5 service areas.

128. In addition, the territorial capitals were separated into their own Tier 5 service areas to recognize their importance as the economic and political anchors of their communities. This approach improves access to spectrum for stakeholders interested in serving communities outside the territorial capitals as well as for those who wish to use spectrum for non-residential services.

Decision

132. The three large metropolitan areas have been subdivided along Statistics Canada boundaries into 30 Tier 5 service areas using either regional or municipal boundaries without the addition of buffers:

• Greater Toronto: census division boundaries – 7 service areas
• Greater Montreal: consolidated census division boundaries – 11 service areas
• Greater Vancouver: consolidated census subdivision boundaries – 12 service areas

133. Population centres exceeding 30,000 as defined by the 2016 Census have become their own Tier 5 service area. This resulted in 70 urban Tier 5 service areas with the following design elements included:

• A buffer of 5 km has been added to the geographical contours of each of the medium and large population centres.
• Where population centres are adjacent to each other, including the contours of the buffer, the population centres have been amalgamated to form a single Tier 5 area.
• To avoid conflicts between population centre buffers and the surrounding rural Tier 5 borders, the buffer was prioritized and the rural Tier 5 boundary lines have slightly deviated from the Statistics Canada boundary lines to account for the buffer.

134. In the rare cases where a medium or large population centre is bisected by the current Tier 4 boundaries, ISED will create two adjacent Tier 5 areas, one on either side of the boundary.

135. Where a medium or large population centre is completely enclosed within another Tier 5 area, the following procedure has been applied:

• If the size of the population centre represented most of the surrounding CCS area, or most of the CCS population, then the population centre was absorbed into the CCS, thus, the CCS became the Tier 5 service area.
• Otherwise, the remaining portion of the CCS has been divided using, where available, the map boundaries associated with the next most granular Statistics Canada map layer (either DA or ADA) with roughly equivalent populations in the resulting areas.

136. The Tier 5 model used the CCS boundaries to create 511 rural Tier 5 service areas with the following design elements included:

• All population centres under 30,000 were subsumed into the surrounding CCS area.
• CCS areas containing a population of 7,000 or above became their own Tier 5 service areas. CCS areas with a population below 7,000 were amalgamated together to reach a population target of 10,000 ± 3,000 population with the Tier 4 boundary set as the maximum limit for amalgamation. In rare cases where the service areas had very low density areas, these population thresholds may not always be adhered to in order to avoid creating very large areas and to allow for more localized use cases.

137. ISED created 43 remote Tier 5 service areas from the ten Tier 4 service areas with the lowest population density (less than 0.2 person per km²). The Tier 5 service areas were drawn according to DA or ADA boundaries, where appropriate.

138. To adhere to the principle of not having Tier 5 areas completely enclosed within another Tier 5 area, only the major DA/ADA lines were used to create the Tier 5 service areas.

139. The three Territorial capitals were separated into their own Tier 5 service areas.