Decision on a Policy, Technical and Licensing Framework for Mobile Satellite Service and Advanced Wireless Service (AWS-4) in the Bands 2000-2020 MHz and 2180-2200 MHz

Introduction

1. Intent

Through the release of this paper, Industry Canada hereby announces its decisions resulting from the public consultation process initiated in May 2014 through Canada Gazette notice SMSE-011-14 — Consultation on a Policy, Technical and Licensing Framework for Use of the Bands 2000-2020 MHz and 2180-2200 MHz (hereinafter referred to as the Consultation). The bands 2000-2020 MHz and 2180-2200 MHz are hereinafter referred to as the 2 GHz band.

All comments and reply comments received in response to this Consultation are available on Industry Canada’s website at http://www.ic.gc.ca/spectrum. Comments and/or reply comments were received from 400525 Ontario Limited (400525 Ontario), Axia NetMedia Corp., Bell Mobility Inc. (Bell), Healthcare of Ontario Pension Plan (HOOPP), MTS Allstream (MTS), Omnispace LLC, Public Interest Advocacy Centre (PIAC), Québecor Média inc. (Québecor), Rogers Communications (Rogers), Saskatchewan Telecommunications (SaskTel), TELUS Communications Company (TELUS), TerreStar Solutions Inc. (TerreStar), The SSi Group of Companies (SSi), and Xplornet Communications Inc. and Xplornet Broadband Inc. (Xplornet).

This document (hereinafter referred to as the Framework) sets out the policy, technical and licensing decisions, as well as the rules and procedures for use of the 2 GHz band.

The framework addresses the following topic areas:

1. a new band plan for the 2 GHz band that modifies the uplink/downlink pairing;
2. spectrum policies to govern the use of the band;
3. licensing considerations, including conditions of licence, for both the Mobile-Satellite Service (MSS) and the Ancillary Terrestrial Component (ATC) service; and
4. technical rules for this band.

Note: The ATC service in this band can also be referred to as advanced wireless services (AWS-4), consistent with the naming used in the United States.

2. Policy Objectives

The Minister of Industry, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations and with due regard to the objectives of the Telecommunications Act, is responsible for spectrum management in Canada. This responsibility includes developing national policies and setting goals for spectrum utilization and ensuring effective management of the radio frequency spectrum resource.

In developing a policy and licensing framework, Industry Canada takes into consideration the need to provide spectrum access to services and technologies, such as mobile broadband, and the impact of such a framework on all stakeholders and on the Spectrum Policy Framework for Canada (SPFC). The SPFC objective is to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum. In support of this objective, Industry Canada identified specific objectives which will also guide decisions for the use of the 2 GHz band:

• robust investment and innovation by wireless telecommunications carriers so that Canadians benefit from world-class networks and the latest technologies;
• sustained competition in the wireless telecommunications services market so that consumers and businesses benefit from competitive pricing and choice in service offerings; and
• availability of these benefits to Canadians across the country, including those in rural areas, in a timely fashion.

Industry Canada has typically harmonized technical rules used in Canada with those adopted in the United States. Harmonization helps to lower manufacturing costs of wireless handsets and equipment through the economies of scale that result from manufacturing for a larger market, which in turn results in reduced costs and increased availability for Canadian consumers.

As noted in the Consultation, recent changes in the United States with respect to the band plan and operational requirements for the use of the 2 GHz band for MSS have removed regulatory barriers and increased flexibility for terrestrial mobile broadband services in the band. These decisions will likely have a bearing on the equipment ecosystem and hence on the services provided in Canada.

3. Background

In 2004, Industry Canada published Radio Systems Policy (RP-023) — Spectrum and Licensing Policy to Permit Ancillary Terrestrial Mobile Services as Part of Mobile-Satellite Service Offerings. RP-023 established a set of spectrum and licensing policy principles to direct the implementation of ATC as an integral part of the MSS offering. The principles provide guidance for the deployment of terrestrial ATC mobile applications in conjunction with any MSS network operating in the various satellite spectrum bands. Under these policies, ATC systems are only permitted if they are offered as an integral part of the MSS. The frequencies used for the ATC systems must be within the assigned spectrum of the MSS network. The ATC operator must use dual-mode terminals capable of communicating with both the mobile satellite network and the terrestrial ATC system; or make use of service and commercial arrangements that ensure the ATC service is an indefeasible part of the MSS service offerings.

In February 2007, Industry Canada issued DGTP-002-07, Consultation on a Framework to Auction Spectrum in the 2 GHz Range including Advanced Wireless Services (AWS consultation). That document included decisions that identified spectrum for AWS and reduced the MSS spectrum from 35 + 40 MHz to 20 + 20 MHz in the bands 2000-2020/2180-2200 MHz in order to harmonize Canada’s MSS spectrum allocation with those in place in the United States. The resulting decision paper also designated the paired block 1915-1920/1995-2000 MHz for Personal Communications Services [PCS (H block)], but noted that these blocks would be held in reserve until technical issues related to the narrow duplexing gap between the bands and potential interference to the MSS were resolved.

Currently, two geostationary satellites are in orbit and have the capability to provide MSS in the 2 GHz band in Canada and the U.S. Both satellites, EchoStar G1 (previously DBSD G1) and EchoStar T1 (previously TerreStar-1), are owned by DISH Network Inc. (DISH).

Gamma Acquisition Canada ULC (Gamma Canada), a subsidiary of DISH, is the satellite operator for EchoStar T1 and holds a licence to provide MSS in Canada in the band 2000-2010 MHz paired with 2190-2200 MHz. TerreStar also holds a licence as an MSS provider in Canada in the same frequency band, using the EchoStar T1 satellite through a commercial agreement with Gamma Canada. TerreStar also has a special authorization to operate ATC in the band, which allows the deployment of terrestrial operations as a complement to the satellite component.

While U.S. rules set out by the Federal Communications Commission (FCC) used to be similar to those currently in place in Canada, the FCC’s Report and Order and Order of Proposed Modification (R&O) published on December 17, 2012, the FCC rescinded the ATC rules in the 2 GHz band and authorized terrestrial mobile services (referred to as AWS-4), on a co-primary basis with MSS. The FCC now allows the deployment of a stand-alone mobile terrestrial service offering, independent of the MSS, with the condition that AWS-4 operations not cause harmful interference to 2 GHz MSS operations and accept any interference received from duly authorized 2 GHz MSS operations. The FCC modified the licences of Gamma Acquisitions L.L.C. and New DBSD Satellite Services G.P., two wholly owned subsidiaries of DISH, to authorize the provision of terrestrial services.

On December 20, 2013, the FCC published a Memorandum Opinion and Order granting waivers requested by DISH. The FCC waivers provided the flexibility to use the band 2000 2020 MHz either for terrestrial downlink or uplink operations. DISH was given a period of up to 30 months to make its decision, which will be irrevocable and apply to all of the U.S. The AWS-4 final build-out milestone was also extended by one year, to the end of 2020. In exchange for the waivers, DISH committed to bidding at least the reserve price of $1.564 billion in the H block auction. The auction concluded on February 27, 2014, and DISH successfully acquired the H block across the United States.

In the Consultation, the Department put forward proposals in light of the recent changes in the U.S. The Consultation enabled Industry Canada to gather stakeholder feedback regarding proposed changes to the band plan, the technical rules and the related licensing framework.

Part A — Band Plan

4. Band Plan and Block Pairing

In the Consultation, Industry Canada proposed to use the same band plan and block pairing as currently used in the U.S., as shown in Figure 1, including providing flexibility to use the band 2000-2020 MHz for either terrestrial uplink or downlink. It was noted that harmonizing the Canadian and U.S. band plans and block structures would allow the Canadian market to take advantage of the larger U.S. wireless ecosystem and would ensure that satellites licensed to provide services in Canada could continue to operate in Canada.

Figure 1: Proposed Block Pairing

Summary of Comments

Band Plan and Block Structure:

Of the companies that commented on this issue (400525 Ontario, Bell, MTS, Omnispace, Rogers, SaskTel, TELUS, TerreStar and Xplornet), all agreed with the proposed band plan and block pairing. They noted that harmonizing with the U.S. will facilitate cross-border coordination and promote the availability of device ecosystems in Canada.

400525 Ontario suggested, however, that the band 2000-2020 MHz should be used for terrestrial uplink transmissions to comply with the Third Generation Partnership Project (3GPP) standard for this band (band class 23).

Xplornet urged the Department to specify that the band plan and block structure allow for fixed services to be allocated on a co-primary basis with mobile services. It argued that doing so would allow the licensee to offer a broad range of mobile and fixed services to rural and remote areas, which would enhance the economic viability of these services.

Discussion

All respondents who commented on this issue agreed with the proposed band plan and block structure, which are harmonized with those in the U.S. As underlined by a number of respondents, harmonizing the Canadian and U.S. band plans and block structure, including duplex direction, would allow the Canadian market to take advantage of the larger U.S. wireless ecosystem.

In response to 400525 Ontario’s suggestion that the band 2000-2020 MHz be used for terrestrial uplink transmissions to be in compliance with 3GPP band class 23, the Department notes that band classes are not static and band class 23 could be modified in the future to take into account possible downlink use of the band.

In response to Xplornet’s proposal that Industry Canada should allow the 2 GHz licensee the flexibility to deploy fixed terrestrial systems in addition to mobile ones, Industry Canada notes that Spectrum Utilization Policies SP 1-3 GHz, Amendments to the Microwave Spectrum Utilization Policies in the 1-3 GHz Frequency Range^{Footnote 1}indicates that coordination between the fixed point-to-point backhaul operations and the MSS would be impractical. In the past, fixed systems were displaced to other bands. However, the Department notes that fixed wireless access systems, given their technical similarities to mobile terrestrial systems, could potentially coexist with MSS in the 2 GHz band and would be unlikely to cause any additional interference to the MSS, if they were operated by the same licensee or closely coordinated with the MSS/ATC licensee. Allowing additional flexibility for the 2 GHz licensee to use fixed systems as well as mobile ATC would depend on the specifics of the proposed fixed systems.

Allowing for fixed ATC use in the band would require the deletion of footnote C36 from the Canadian Table of Frequency Allocations, which puts a moratorium on the licensing of new fixed systems in the 2 GHz MSS band.

Given Industry Canada’s objectives for the 2 GHz band as stated in Section 2, fixed systems that support the MSS or ATC systems of the existing licensee may be permitted as long as they adhere to the technical requirements set out for ATC in this band. Fixed systems that are separate from the MSS or ATC systems would require an application from the MSS/ATC licensee. Upon receipt, Industry Canada would assess the application and make a determination based on the specifics of the application.

Decision A-1

Based on the above, Industry Canada is adopting the band plan and block pairing as proposed and as shown in Figure 1 above. This includes providing licensees with the flexibility to select the duplex direction of the band 2000-2020 MHz for terrestrial use.

Part B — Spectrum Policy Considerations

5. Spectrum Policy Changes Regarding MSS/ATC

The Consultation noted that in the U.S., the FCC rescinded its ATC rules and adopted service, technical and licensing rules to enable the deployment of stand-alone terrestrial mobile services in the 2 GHz band, without the terrestrial mobile service being tied to the provision of MSS. However, Industry Canada proposed that because MSS offerings can be beneficial in areas of the country that are not easily covered by other technologies, in this particular case, the Department’s policy should differ from that of the United States. Industry Canada sought comments on its proposal to maintain the policy that requires the continued provision of MSS offerings in conjunction with the terrestrial services in this band, in order to encourage increased coverage in Canada.

The Consultation also noted that the obligation for ATC licensees to provide dual-mode terminals increases the cost of the terminals compared to terrestrial-only phones and hinders the ability of MSS offerings to compete with cellular mobile systems. Aligning with the U.S. to allow for the deployment of terrestrial-only as well as dual-mode terminals could provide more options for consumers who do not require the satellite service. However, the Department reiterated that the authorization to deploy a stand-alone terrestrial network should still be tied to the provision of MSS in Canada.

The spectrum and licensing policy principles on the implementation of ATC mobile services are listed in RP-023. Industry Canada stated that removing regulatory barriers currently imposed on ATC services in the 2 GHz band would promote use of the band for mobile broadband and foster competition. Industry Canada therefore proposed to eliminate the dual-mode handset requirement and allow ATC licensees to deploy terrestrial-only terminals in the 2 GHz band.

As MSS is important to Canada, Industry Canada also proposed requiring that the deployment of ATC not constrain the deployment of its associated MSS system and that this requirement apply regardless of whether the lower 2 GHz band is used for uplink or downlink operations. It was noted that the operation of both MSS and ATC networks by the same entity would facilitate interference mitigation.

Summary of Comments

B-1 — Proposal to maintain the requirement to provide Mobile Satellite Services in this band:

The majority of respondents (Bell, HOOPP, MTS, Omnispace, Rogers, SaskTel, TerreStar and Xplornet) supported the proposal to maintain the requirement to provide MSS in this band, with some stating that in large portions of Canada that are out of reach of terrestrial networks, MSS is currently the only technology available.

400525 Ontario disagreed with the proposal and suggested that MSS should be abandoned and that all AWS spectrum should be auctioned for terrestrial purposes.

TELUS disagreed with the Department’s proposal, arguing that there appears to be no market need for MSS in this band, and that the proposed policy is aimed at delivering service to the one percent of Canadians who are located in low-density areas and therefore do not require 40 MHz of spectrum. TELUS suggested that the MSS and ATC spectrum should be decoupled, and that the ATC portion for the entire AWS-4 spectrum should be auctioned for terrestrial use with MSS provisions as an option. Failing this, it proposed that the provision of MSS should only be a requirement for the existing licensee, and that the other portion of the spectrum (20 MHz) should be auctioned for terrestrial use.

B-2 — Proposal to remove the requirement for dual-mode handsets:

MTS and Rogers were opposed to the removal of the dual-mode handset requirement stating that this would be inconsistent with the requirement for the provision of MSS on a national basis and that the requirement should be maintained.

400525 Ontario, Bell, Omnispace, SSi, TELUS, TerreStar and Xplornet supported the proposal to remove the dual-mode handset requirement, some noting that permitting terrestrial-only terminals will allow a greater variety of handsets for consumers. 400525 Ontario also noted that there is currently no ecosystem for the dual-mode handsets, and TELUS suggested that market forces will be adequate to drive the demand for dual-mode handsets.

PIAC supported the removal of the requirement for dual-mode handsets, but only on the condition that the resulting services be accessible and affordable.

TerreStar disagreed with the concerns stated by MTS and Rogers, noting that it is "…the deployment of large quantities of mobile ATC capable handsets which will spur the development of lower cost handsets, including both standalone MSS handsets as well as those that are integrated with terrestrial mobile services."

B-3 — Proposal to modify the spectrum and licensing policy principles on the implementation of ATC mobile services in RP-023 as they apply to the 2 GHz band:

The majority of respondents (400545 Ontario, Bell, Omnispace, TerreStar, SSi and Xplornet) supported the proposal to modify the licensing and policy principles regarding the 2 GHz band.

TELUS and SaskTel commented that not enough detail was provided to comment on this issue and proposed that Industry Canada seek public feedback at a later date.

Omnispace also proposed modifications to the principles in RP-023 that included a restriction on the deployment of terrestrial services until such time as the licensee demonstrates that MSS services and devices are being actively marketed and purchased by Canadians. In its reply comments, TerreStar stated its opposition to this proposed wording as it felt that this would limit the provision of ATC and the deployment of innovative new services in Canada.

B-4 — Proposal that ATC services should not constrain the deployment of MSS:

The majority of respondents (Bell, Omnispace, Rogers, SaskTel, SSi, TerreStar and Xplornet) supported the proposal that ATC services should not constrain the deployment of MSS. TELUS also agreed, but only as it relates to their proposal to remove the MSS requirement from half of the band; and stipulated that there should only be a requirement to ensure ATC does not constrain MSS operations in the portions of the band where MSS is required.

400525 Ontario reiterated its general opposition and added that this spectrum should be re allocated to terrestrial purposes.

Discussion

B-1 — Proposal to maintain the requirement to provide MSS in this band:

Given that approximately 80 percent of Canada’s geography and one percent of its population is currently unserved by terrestrial commercial mobile providers, maintaining the MSS requirement in this band would provide the greatest opportunity for the deployment of high-quality services to these rural and remote areas of the country. Many of these areas are out of reach of the terrestrial networks and satellite services present a unique opportunity for service providers to reach these rural and remote areas.

With respect to TELUS’s view that there may not be a market for MSS in Canada, even though most of the population is already served by commercial mobile services, Industry Canada considers that MSS could effectively serve the large geographic areas of the country that are sparsely populated and remote, that offer limited accessibility due to climate and terrain and that will likely never be reached by terrestrial networks. TELUS fails to offer any alternate mode of providing a sustainable option for these hard-to-reach areas.

The suggestion made by TELUS to decouple the MSS and ATC spectrum could also prevent Canada from benefitting from the U.S. technology ecosystem which will be driven by ATC services. Given that DISH Networks Inc., the sole licensee in this band in the U.S., could potentially develop terrestrial devices that use 20+20 MHz, any effort to decouple the band to 10+10 MHz for MSS and 10+10 MHz for ATC in Canada would hinder the potential economies of scale provided by the U.S. market.

In addition, decoupling the MSS and ATC spectrum and licensing to different operators would result in a greater potential for interference between the two services and would require more complex coordination.

B-2 — Proposal to remove the requirement for dual-mode handsets:

Removing the requirement for dual-mode handsets in the 2 GHz band will allow the licensee to benefit from the economies of scale of the production of consumer ATC handsets in the U.S. without necessarily harming the economics of MSS handsets, such as ruggedized MSS/ATC handsets designed for public safety and resources sectors (e.g. oil, gas, and forestry). New handsets with these capabilities are being developed for the U.S. market. Aligning our technical rules and licensing approach with the U.S. would enable the use of these devices in Canada.

In relation to the concerns that the removal of the dual-mode handset requirement would lead to the deployment of ATC only, Industry Canada has proposed deployment conditions of licence. If the deployment requirements are not met as required, Industry Canada will have an opportunity to take regulatory action accordingly, including the ability to revoke the licence.

B-3 — Proposal to modify the spectrum and licensing policy principles on the implementation of ATC mobile services in RP-023 with regard to the 2 GHz band:

Any modifications to the spectrum and licensing policy principles in RP-023 would only apply to the implementation of ATC mobile services in the 2 GHz band. Therefore, the Department does not consider that an additional consultation is required at this time. Furthermore, as this Framework sets out the licensing and policy principles on the use of ATC mobile services as they apply to the 2 GHz band, the Department considers that all references to the 2 GHz band should be removed from RP-023 as they are superseded by this Framework.

In response to the suggestion to limit the deployment of ATC until such a time as the MSS services are actively marketed and purchased, the Department does not consider that such limitations are necessary. As discussed elsewhere in this Framework, specific deployment conditions have been proposed to promote the deployment of both MSS and ATC services.

B-4 — Allowing Proposal that ATC services should not constrain the deployment of MSS:

The vast majority of respondents agreed with this proposal, with TELUS making its support conditional upon its suggested decoupling of the MSS portion of the spectrum only.

Given the stated importance of MSS for Canada, Industry Canada continues to believe that ATC networks should not cause harmful interference to associated MSS networks.

Decisions B-1 to B-4

Based on the above considerations Industry Canada is adopting the following policies, as proposed in the Consultation:

B-1: The requirement to provide Mobile Satellite Services in this band will continue to apply;

B-2: The requirement for dual-mode handsets is hereby removed for the 2 GHz band;

B-3: The spectrum and licensing policy principles on the implementation of ATC mobile services in the 2 GHz band are now contained in this Framework. References to the 2 GHz band will be removed from RP-023, noting that the ATC rules as they apply to the 2 GHz band are now set out in this Framework.

B-4: ATC services must not constrain the deployment of the associated MSS in this band.

Part C — Licensing

6. Licensing Considerations

6.1 Licensing Approach

In an effort to promote the policy objectives for the use of this band (as outlined in Section 2), Industry Canada considered several factors for licensing the 2 GHz band for both the MSS and the ATC services. One key objective for this band is the provision of wireless communications services to Canadians in all regions of Canada, including rural and remote areas.

In the Consultation, Industry Canada noted that any fundamental change or difference from the United States could substantially delay the provision of voice and data services to Canadians in these areas. Therefore, the Department proposed a licensing approach that is consistent with that of the United States.

Due to the recent changes regarding the use of this band in the U.S., spectrum acquired by DISH may result in terrestrial devices that use 20 + 20 MHz. In order to benefit from the U.S. ecosystem, Industry Canada proposed that licences should align with those issued in the United States, to ensure availability of devices. Furthermore, in order to facilitate coordination between the MSS and the ATC systems, it was proposed that the ATC licence be awarded to either an MSS licensee or an entity with business agreements with an MSS licensee.

Therefore, Industry Canada proposed to extend the spectrum assigned in the existing MSS and ATC authorizations to cover the entire 2 GHz band. New spectrum licences would be issued to Gamma Canada and TerreStar on April 1, 2015, reflecting the revisions to the band plan and new conditions of licence. The new licences would include both the A and B spectrum blocks, allowing the flexibility to operate the Canadian licensed EchoStar T1 satellite anywhere within the 20 + 20 MHz of spectrum. The Department also proposed that the terrestrial service have access to the full 20 + 20 MHz of spectrum.

It was also proposed that the ATC licensee be granted the flexibility to use the band 2000-2020 MHz for either uplink or downlink operations provided that, by May 20, 2016, it identifies whether it would use the band for uplink or downlink for the rest of the licence term throughout the licence area, and notify Industry Canada, in writing, of its decision. This date coincides with the uplink/downlink election deadline in the United States.

The new MSS and ATC licences would be issued only if the Department receives applications from Gamma Canada and TerreStar indicating interest within 30 days of the publication of this policy decision. If neither expresses interest, Industry Canada would initiate another consultation on the policy and licensing framework for the 2 GHz band.

Under these proposals, the 2 GHz band would be licensed to Gamma Canada for the operation of the satellite and for the provision of MSS, noting the commercial agreement with TerreStar. TerreStar would be licensed for the provision of the MSS and the ATC services.

Summary of Comments

C-1 and C-2 — Extending licences to include 2000-2020 MHz and 2180-2200 MHz and licensing to incumbent licensees:

Bell, MTS, Xplornet, SSi and TerreStar support both proposals, noting that extending the band and harmonizing with the U.S. is the most efficient solution for choice and availability of devices, lower costs and more rapid provision of services to Canadians. Some added that licensing through a competitive process could further delay or jeopardize the provision of MSS and mobile broadband services. These entities also agree that the new licences should be issued to the incumbent 2 GHz licensees and that this is the only practical way to prevent interference between the MSS and ATC operations.

Some stakeholders opposed the proposals. For example, 400525 Ontario Limited and TELUS opposed licensing the band as one block. Furthermore, they disagreed with the proposal to issue all spectrum licences to the incumbent 2 GHz licensees. They claim that the absence of meaningful MSS/ATC services deployed over the last 13 years shows that there is no business case for such services in the band. They proposed that the requirement for the provision of MSS should be made optional as it is in the U.S. and that, for the spectrum to be useful, it should be auctioned to all comers for the provision of commercial mobile services. TELUS suggested that the proposal is contrary to the "use it or lose it" approach adopted for the 2300 MHz and 3500 MHz decision papers issued last November, adding that the current MSS licensees should not be granted the additional spectrum and should, instead, have their current licences revoked for non-deployment.

Omnispace also opposed these proposals. Omnispace stated that licensing the band in two blocks would provide a sufficient amount of contiguous spectrum to deploy an LTE system, and that any handset developed in the U.S. could still be used in Canada under such a configuration. It claimed that its system would have low potential for interference with the incumbents’ MSS/ATC network because the service would be largely provided in northern Canada, far from the U.S. border and from terrestrial services. Omnispace also stated that any remaining concerns about interference could be resolved with mitigation techniques such as beam-by-beam coordination. It noted that extending the licences to the full 40 MHz and issuing MSS licences for the use of only one satellite system would likely decelerate any MSS deployment and would limit competition in both MSS and terrestrial mobile services. It suggested that the band should be licensed as two blocks, and that Omnispace should be issued a licence to deploy its proposed MSS system.

In its reply comments, TerreStar questioned the viability of the Omnispace proposal, which currently consists of a single non-geostationary satellite and highlighting the high cost of bringing the remainder of the constellation into service. TerreStar also suggested that the licensing and coordination issues of Omnispace’s proposal are outside the scope of the consultation, and that there is real potential for interference between Omnispace’s proposed MSS network and TerreStar’s ATC network.

C-3 — Allowing the ATC licensee to decide whether the terrestrial use of the band 2000-2020 MHz will be for uplink or downlink:

MTS, TerreStar, Xplornet and SaskTel supported the proposal as it is consistent with the U.S. approach of allowing the U.S. licensees (DISH) to decide on the terrestrial duplex direction. Moreover, they added that the ATC licensee is in the best position to determine uplink and downlink operation based on developments in the U.S. While Bell supported the proposal, it highlighted the potential for mobile-to-mobile interference between ATC and PCS terminals if the band were used for uplink operations. Bell requested that if such interference were to arise, then the Department must protect PCS terminals from ATC terminal interference.

SaskTel recommended that a decision on the duplex direction be made as soon as a decision is made in the U.S., to avoid any delays in other decision-making processes with respect to the use of the adjacent PCS H and J blocks, which will be affected by the directionality of the 2000-2020 MHz band.

400525 Ontario, PIAC and TELUS were opposed to leaving this decision to the ATC licensee. They requested that Industry Canada mandate the duplex direction once a decision is made in the U.S. They noted that doing this will ensure that the equipment and device ecosystem that is expected to develop in the U.S. will be usable in Canada. Moreover, they added that mandating the duplex direction would remove the risk of the Canadian licensee selecting a duplex direction different from that of the U.S.

Omnispace argued that if the entire 40 MHz of spectrum is designated for downlink use, then the operator would have to acquire a new and as yet unknown band for uplink transmissions, which would decelerate AWS-4 deployments in both the U.S. and Canada. It argued that the provision of MSS would be impacted in Canada.

Omnispace also argued that 20 MHz blocks are not currently a standard channel width in the LTE band class for this particular band and noted that the majority of current LTE deployments are in blocks of 5 and 10 MHz. It claimed that even if devices are developed to support 20 MHz channelization, they would also support 10 MHz channelization; therefore, Omnispace posited that the band could easily support two MSS/ATC licensees.

Discussion

C-1 and C-2 — Extending licences to include 2000-2020 MHz and 2180-2200 MHz and licensing to incumbent licensees:

With respect to TELUS’s comment that the Department should revoke the incumbents existing licences for non-deployment, it should be noted that unlike licences in other bands, such as the 2300 MHz licences, the current MSS licences do not include deployment obligations. The incumbents’ licences are in good standing and therefore, such a regulatory measure does not apply.

With respect to Omnispace’s proposal to license the spectrum in two blocks to foster increased competition in the provision of MSS and ATC services, as noted above, Industry Canada has determined that licensing to the same operator will facilitate coordination between the MSS and ATC systems. Furthermore, DISH holds a licence for the full 40 MHz in the U.S. and aligning with the U.S. and giving the Canadian licensee the same flexibility would allow Canada to take advantage of any ecosystem that may develop in the U.S.

Omnispace also argued there is a significant risk that MSS will not be deployed in Canada if only the current incumbents are licensed. It noted that there is no obligation for DISH to deploy MSS in the U.S., which could undermine the development of a handset ecosystem. However, deployment requirements would mitigate the risk of the spectrum remaining unused, since licensees not complying with these requirements would risk the revocation of their licences.

Industry Canada agrees with TerreStar that the introduction of another MSS licensee in this band would have implications for international coordination that are outside the scope of the consultation.

With respect to licensing of the ATC, the Department considers that dividing the spectrum into two blocks, A and B, and auctioning one of the blocks for the provision of terrestrial mobile broadband services could put at risk the provision of both MSS and terrestrial mobile broadband services in Canada. This would come about because of the possibility that the Canadian operator would not be able to benefit from the equipment ecosystem developed in the U.S., and the additional coordination challenges that would result from having a different equipment ecosystem.

For the reasons stated above, Industry Canada considers that the approach as proposed in its Consultation would best meet the policy objectives outlined in Section 2 and would support competition in the mobile wireless services industry and encourage investment in the provision of wireless services. Because it involves the management of both the satellite and ATC spectrum by the same entity, this approach would also facilitate interference-free operations between the MSS and ATC portions of the network and ensure the most efficient use of the spectrum.

C-3 — Allowing the ATC licensee to decide if the terrestrial use of the band 2000-2020 MHz will be for uplink or downlink operations:

400525 Ontario and TELUS were opposed to allowing the licensee to determine the terrestrial duplex direction. Nevertheless, as TELUS recognized, the Canadian licensee will most likely choose the same directionality as the U.S. licensee, given its dependence on DISH for the provision of MSS and for the development of an equipment ecosystem for this band. Since the equipment ecosystem will be driven by the U.S. market, whether or not Industry Canada adopts an early deadline for a decision on the terrestrial duplex direction, as suggested by SaskTel, it is unlikely to have any impact on the timing of equipment availability in Canada.

In response to Omnispace’s concerns that if the licensee chooses a downlink duplex direction for the entire band, this would impede the provision of MSS in Canada, Industry Canada’s proposal that the ATC licensee be permitted to choose a duplex direction for the lower portion of the band refers to the choice of terrestrial duplex direction. Regardless of the decision on the terrestrial duplex direction, the lower band will continue to be available for MSS uplink.

As noted above, while Bell supported the Department’s proposal, it did request that the Department clarify its rules with respect to possible MSS/ATC interference with future H Block operations if the band 2000-2020 MHz is used for uplink operations. The Department recognizes that there is a potential for mobile-to-mobile interference to occur if the band is used for uplink operations. As discussed below in Part D, technical rules for the band will be addressed in the relevant Standard Radio System Plans (SRSP) and Radio Standards Specifications (RSS) for this band.

In summary, the Department is of the view that the proposed approaches discussed in this section would best meet the policy objectives outlined in Section 2 and would ensure the most efficient use of the spectrum.

Decisions C-1 to C-3

Based on the considerations above, the following decisions will apply:

C-1 Industry Canada will extend the spectrum assigned in existing 2 GHz MSS licences and ATC authorization to 2000-2020 MHz and 2180-2200 MHz.

C-2 Industry Canada will issue new spectrum licences to incumbent 2 GHz licensees, with terms commencing April 1, 2015, that reflect the proposed revisions to the band plan and new conditions of licence, if a letter indicating interest is received from both incumbents within 30 days of the publication of this document.

C-3 Industry Canada will allow the ATC licensee to decide if the terrestrial use of the band 2000-2020 MHz will be for uplink or downlink operations. The licensee must notify Industry Canada by May 20, 2016. The decision for uplink or downlink operations will apply to all of Canada for the rest of the licence term.

6.2 Licence Service Areas

MSS is currently the only technology available to enable mobile communications in a large portion of the Canadian territory that is out of reach of terrestrial networks. Additionally, existing MSS licences cover all regions of Canada that are within the coverage contour of the satellite. Therefore, in its Consultation, the Department proposed that a Tier 1^{Footnote 2} service area be used to license MSS in the 2 GHz band, noting that this would not preclude satellite operations beyond Canada that are consistent with the associated ITU filing and with approvals received from other jurisdictions. Given that the proposed licensing approach for MSS and ATC is aligned, it was also proposed that the service area for the ATC licence be Tier 1.

Tier 1 (national) and Tier 2 (generally divides along borders between provinces and territories) licences have typically been used for mobile services, whereas Tier 3 and Tier 4, which are smaller, have typically been used for licensing fixed services.

The Department was of the view that accommodating high-speed mobile applications operating on a wide-area basis requires large tier sizes. The propagation characteristics of the 2 GHz band are conducive to high mobility applications. Larger geographic service areas enable efficient large-scale networks due to economies of scale. Furthermore, given the need for close cooperation between the MSS and ATC operations to avoid interference, and the fact that the MSS is licensed on a Tier 1 basis, a consistent licence area was proposed for both services.

Summary of Comments

Bell, MTS, Omnispace, SSi, TerreStar, and Xplornet supported the proposal of Tier 1 service areas for both MSS and ATC licences. TerreStar added that it intends to offer services on a national scale.

400252 Ontario, SaskTel and TELUS supported a Tier 1 service area for MSS; however, these respondents observed that a Tier 2 service area would be more appropriate for the ATC licences. SaskTel noted that this would avoid ATC services being deployed only in some large areas of the country first, with less densely populated areas receiving service later.

In its reply comments, Bell noted that it is not averse to the use of Tier 2 for the ATC licence as proposed by SaskTel and TELUS.

Discussion

Given that the licensing approach for MSS and ATC is aligned, consistency in the service area covered by the licence for both services would be practical. The deployment requirements are discussed in the Conditions of Licence section below.

Decision C-4

Based on the above considerations, a Tier 1 service area will be used to license the 2 GHz band, for both the MSS and ATC spectrum licences. This will not preclude satellite operations beyond Canada that are consistent with the associated ITU filing and with approvals received from other jurisdictions.

6.3 Conditions of Licence

In its consultation, Industry Canada proposed that new and amended conditions of licence for MSS and ATC spectrum licences take effect on April 1, 2015. The complete list of proposed conditions can be found in annexes A and B. The following are conditions of licence that generated comments from respondents to the Consultation.

6.3.1 Licence Terms

The revised Framework for Spectrum Auctions in Canada, published in March 2011, states that Industry Canada is now adopting a flexible approach in determining licence terms (up to 20 years) based on the specific spectrum being offered and subject to a public consultation preceding the specific auction or renewal process.

In its Consultation, Industry Canada proposed that the MSS licences in the 2 GHz band be for a 20-year term, up to March 31, 2035. As terrestrial spectrum licences in the 2 GHz band are tied to the provision of MSS, the Department also proposed the same licence term for the ATC licence.

Summary of Comments

All respondents commenting on the proposal to issue licences with 20 year terms (400252 Ontario, Bell, MTS, Omnispace, SaskTel, SSi, TELUS, TerreStar, and Xplornet), were in support of the 20-year licence term. Xplornet and SaskTel noted that it provides more investment incentive.

Discussion

Changes made to the Framework for Spectrum Auctions in Canada were based on the recognition that licence terms in excess of 10 years would create greater incentive for financial institutions to invest in the telecommunications industry and for the industry itself to further invest in the development of network infrastructure, technologies and innovation.

The Department is of the view that the licence terms for MSS operations should be linked to the life of the satellite. The expected life for the EchoStar T1 satellite, the only satellite currently authorized in Canada to provide MSS in the 2 GHz band, is expected to be 20 years.

Issuing spectrum licences with 20 year terms is consistent with recent decisions regarding licensing of commercial mobile spectrum (e.g. 700 MHz licensing process, and the forthcoming 2500 MHz process).

Decision C-5

The MSS licence term in the 2 GHz band will be 20 years, up to March 31, 2035. As terrestrial spectrum licences in the 2 GHz band are tied to the provision of MSS, the same licence term will apply for the ATC licence.

6.3.2 Transferability

Industry Canada proposed that in addition to the provisions outlined in Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, and in DGSO-03-13, Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum, the licensees in the 2 GHz band should not be permitted to transfer any of the spectrum to a large wireless service provider (LWSP)^{Footnote 3} for the full term of the licence. Industry Canada made this proposal in consideration of the impact that a change in spectrum concentration levels can have on the ability of all competitors to provide services.

Summary of Comments

All but one of the respondents disagreed with the Department’s proposal to prohibit licensees from transferring ATC licences to LWSPs for the full 20-year term of the initial licence.

Rogers, TELUS, HOOPP, MTS, SaskTel, PIAC and Xplornet were opposed, with some suggesting that the licence transfer framework already in place in CPC-2-1-23 gives the Minister all the tools necessary to consider whether a change in spectrum concentration levels affects the ability of other competitors to provide services. Rogers further suggested that if a ban were adopted, it should only apply for five years and that it should apply equally to all incumbent service providers including Videotron. SaskTel suggested that in any case where MSS is not deployed within the proposed timeframes, LWSPs should have the opportunity to deploy ATC services. MTS and PIAC stated that the LWSP definition also captures some regional wireless service providers, thereby preventing them from expanding nationally.

SSi and TerreStar suggested modifications to the proposed application of the rules. For example, SSi suggested that the definition of LWSPs should exclude companies holding 20 percent of the market share in a province, leaving only companies with 10 percent of the national market share, in order to exclude regional providers or new entrants wishing to expand nationally. TerreStar questioned the necessity of such a ban, given that any transfer would be subject to the Licence Transfer Framework regardless of which parties were involved.

Bell noted that other spectrum licences, for example in the 700 MHz band, reflect the licence transfer policy without using the terminology referring to large wireless carriers. In the interest of uniformity with other spectrum licences, it recommended that Industry Canada adopt the wording of the 700 MHz conditions of licence regarding Licence Transferability and Divisibility and apply it to the ATC licence.

Quebecor was the only respondent to fully support the proposal. It noted that the level of spectrum concentration is as evident now as it was when the Department first reported, as part of the 700 MHz consultation (2010), that 85 percent of mobile spectrum was held by LWSPs. It noted that this level has remained unchanged following the conclusion of the 700 MHz auction and that a moratorium on transfers would prevent further concentration.

Discussion

The additional ban was proposed as a supplementary measure to protect against excessive spectrum concentration. However, the Department agrees that DGSO-03-13, Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum, provides the necessary discretion to review all transfer requests and to consider spectrum concentration as a criteria, among others, for rendering a decision on transfers. It also provides the flexibility to consider such requests on a case by case basis and take into consideration the policy objectives of this licensing process for the 2 GHz band, including the provision of MSS.

Based on the above considerations, Industry Canada will not implement an additional ban on licence transfers.

Decision C-6

As the ATC licence will be considered a commercial mobile spectrum licence, the transferability and divisibility provisions outlined in Section 5.6.4 of Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, will apply to any transfers. The Department’s approach to the approval of transfers in commercial mobile spectrum licences is outlined in DGSO-003-13, Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum. The related conditions of licence regarding Deemed and Prospective Transfers, as defined in CPC-2-1-23, would also apply.

The Licensee must apply to Industry Canada for the issuance of subordinate licences prior to the implementation of any spectrum sharing agreements or any other similar agreement. For further information on these requirements, refer to CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time.

6.3.3 Deployment of the MSS

Industry Canada proposed to include a condition on MSS licences requiring the deployment of MSS throughout Canada in the near term. This condition would require that MSS be offered in the 2 GHz band throughout Canada within five years of the issuance of the licence, that is, by March 31, 2020. Further renewals of these licences would be contingent upon compliance with that condition of licence. Specifically, it was proposed that the MSS licensees should be able to demonstrate that:

• MSS handheld devices are being actively marketed and purchased by Canadians. These handheld devices must support voice and data transmissions;
• Canadians can subscribe to the MSS; and
• The service is operational over the entire licensed service area.

In case of an emergency leading to lack of availability of a satellite for MSS in Canada, such as a catastrophic failure of the satellite, the Department also proposed to give the operator 48 months to replace the satellite in order to continue MSS operations. Back-up arrangements with foreign satellite operators could be made, with appropriate authorization. Failure to replace the satellite service within the given period could lead to a revocation of the MSS licence.

In addition, the Department proposed a condition requiring the ATC licensee to demonstrate within a five-year period that MSS is being offered in the 2 GHz band. Moreover, once MSS is deployed, the Department proposed a condition of licence requiring that the licensee demonstrate to the Minister of Industry on an ongoing basis that MSS in the 2 GHz band continues to be offered across the entire service area. Except in the case discussed in the paragraph above, if the EchoStar T1 (or its replacement) satellite is not operational or no longer being used to provide MSS in Canada, the ATC licensee would be required to demonstrate to the Department’s satisfaction that alternate MSS is being offered across the entire licensed area on an ongoing basis.

Annual reporting requirements were also proposed.

Summary of Comments

MSS Deployment Requirements:

The majority of respondents, including Bell, MTS, Rogers, SaskTel, SSi, TerreStar, and Xplornet, supported the proposed five-year deployment obligations for MSS licensees, noting the importance of this spectrum for providing service to the remaining one percent of Canadians not currently served by terrestrial wireless services.

TELUS, Omnispace, and PIAC, supported a deployment requirement, but suggested modifications to strengthen the proposed obligation. TELUS suggested shortening the timelines, noting that the current MSS licensee has not deployed since it was issued a licence, and that the satellite is operational and providing service in the U.S.

Omnispace suggested precluding ATC licensees from deploying terrestrial services until they demonstrate that the MSS licensee has met all three deployment obligations.

Emergency situation affecting satellite availability:

Support varied regarding the proposal to provide the satellite operator 48 months to replace the satellite, in the case of emergency leading to lack of availability. Bell, MTS, and SaskTel either supported or had no objection to the proposal, while Xplornet, TerreStar, and Omnispace disagreed to varying extents.

Xplornet disagreed with the obligation to replace satellites in any timeframe. It proposed instead that the MSS licensee should be obliged to conclude negotiations for a satellite that is capable of delivering the specified services within 12 months of the failure, and that replacement of the satellite should be scheduled.

TerreStar suggested that 48 months should be considered a desirable target, given the unique design characteristics and technical complexities associated with MSS satellites.

Omnispace suggested that the proposed 48-month time frame would not be necessary if Industry Canada reconsiders the proposed licensing framework and provides Omnispace with the opportunity to obtain 20 MHz of the MSS spectrum. Omnispace referred to its use of a multiple satellite system in medium-orbit ("MEO system"), noting that if one of its satellites fails, the coverage would be only slightly reduced. It also argued that, thanks to the lower orbit of its satellites, Omnispace would face lower costs and require less time to launch a new satellite than would be the case for other MSS systems.

Requirement for the ATC licensee to demonstrate that MSS is being offered:

The majority of respondents (Bell, MTS, Rogers, SaskTel TELUS, and Xplornet) supported the proposed condition of licence requiring ATC licensees to demonstrate that, within five years, MSS would be available across all of Canada.

However, while Xplornet supported this proposal, it also suggested two qualifications to the condition. First, that the condition should not be tied to one specific satellite (i.e. EchoStar T1), or its replacement. It suggested that the licensee should be able to use any satellite that would provide the intended MSS service. Second, Xplornet suggested that as long as the MSS licensee is meeting its deployment requirements in Tier 1 (i.e. all of Canada) then the ATC licensee should not be required to demonstrate that MSS is available in specific Tier 2 areas of the ATC licence.

HOOPP disagreed with the proposal, stating that it raises the level of risk for ATC investors. The organization suggested that the requirement to deploy MSS should be the sole responsibility of the entity in control of the satellite.

TerreStar disagreed with the proposal, arguing that the current regulatory environment and incentives encouraging MSS deployment should be sufficient to ensure MSS service in Canada. It added that the condition could provide difficulties for TerreStar’s financing arrangements, network agreements, and wholesale customers.

Discussion

MSS Deployment Requirements:

Regarding the suggestion to strengthen the proposed obligation and to shorten the timelines, the new proposed deployment conditions require the licensee to demonstrate by year five that MSS handheld devices are being actively marketed and purchased by Canadians and that Canadians can subscribe to mobile satellite services. Industry Canada considers that these new conditions are sufficiently strong to promote mobile satellite services access to essentially the entire Canadian population and territory.

Ominspace’s suggestion to preclude the deployment of terrestrial services until such a time as the MSS deployment requirements have been met could unnecessarily delay the provision of mobile broadband services in markets that could benefit from increased competition. As discussed in the next section, deployment requirements for ATC have also been proposed.

Emergency situation affecting satellite availability:

Regarding the opposition to putting a 48-month time limit on the replacement of the satellite, the Department is of the view that this four-year period is more than adequate as it provides enough time for construction, testing and launch of a new satellite. The proposed condition also states that back-up arrangements with foreign satellite operators may be utilized, with appropriate authorization.

Requirement for the ATC licensee to demonstrate that MSS is being offered:

Regarding TerreStar and HOOPP’s opposition to the proposed additional requirement for ATC licensees to demonstrate that MSS is also being offered within five years, the Department considers that this requirement, along with other deployment requirements, offers a balanced approach between assigning more spectrum to existing licensees without a competitive process and promoting further competition, investment and the provision of mobile services in underserved areas.

Decisions C-7 to C-9

Based on the considerations above, the following conditions will apply:

C-7 MSS licensees will be required to demonstrate that mobile satellite service in the 2 GHz band is available and being offered throughout Canada within five years of issuance; that is, by March 31, 2020. Refer to Annex A for specific wording of the related condition of licence.

C-8 In case of an emergency leading to lack of availability of a satellite for MSS in Canada, such as a catastrophic failure of the satellite, the operator will have 48 months to replace the satellite in order to continue MSS operations. Back-up arrangements with foreign satellite operators can be made, with appropriate authorization from Industry Canada. Failure to replace the satellite service within the given period could lead to regulatory measures, including revocation of the MSS licence.

C-9 In addition, the ATC licensee will be required to demonstrate within five years of licence issuance, that MSS is being offered in the 2 GHz band throughout the entire Tier 1 licence area, and will be further required to demonstrate on an ongoing basis that MSS continues to be offered in the 2 GHz band across the entire Tier 1 service area.

6.3.4 Deployment of the ATC Service

Although the ATC licence will be issued using a Tier 1 licence area as specified in Section 6 above, Industry Canada proposed to use a two-step approach for ATC deployment requirements. Specifically, the Department proposed a five-year deployment requirement of 30 percent of the population of the Tier 1 licence area, to be met by March 31, 2020. As well, the Department proposed applying the Tier 2 levels, as set for the AWS auction of 2008 (see Annex C), as required deployment levels for the ATC licence within 10 years of the licence issuance. The deployment requirement would be assessed for each Tier 2 level consisting of 14 geographic areas. A failure to meet the deployment requirements in any of the 14 areas could lead to regulatory measures, including a revocation of the national ATC licence.

The first ATC deployment requirement aligns with the timing of the MSS deployment requirement. Unlike the second deployment requirement, the population coverage could be achieved anywhere in the country, irrespective of the 14 geographic areas.

This two-stage approach encourages deployment and allows the markets to continue to determine the best pace of deployment. This approach is also similar to that imposed by the FCC.

Where a licence is transferred during the initial 10 years, the requirement for the new licensee to deploy would continue to be based on the initial licence issuance date.

Summary of Comments

The majority of respondents, including Bell, PIAC, Rogers, SaskTel, TerreStar and Xplornet, agreed with the proposed two-stage deployment condition of licence.

PIAC, Xplornet, and TELUS suggested that Industry Canada should further strengthen the condition through various means, including automatic licence revocation if the required deployment levels are not met, requiring evidence that licensees are actually offering service to consumers and shortening the proposed timelines.

Xplornet also suggested that the 10-year deployment levels in Northern Ontario be lowered to 30 percent to be consistent with other areas with similarly low population densities.

MTS opposed the condition, stating that the licensee should not be obligated to provide ATC service if it is not demanded by its customer base.

Discussion

The first stage of the proposed approach would require providing coverage to 30 percent of the population of the Tier 1 licence area. Industry Canada is of the view that this level would encourage the timely use of the spectrum and would require significant, but not overly burdensome investment obligations.

As well, maintaining a 10-year time frame for the second stage of the deployment requirement would provide flexibility for the licensee to determine deployment plans while still requiring significant population coverage in all areas of Canada, and is consistent with the 700 MHz licences.

In response to Xplornet’s proposal to lower the requirement level for Tier 2-09 Northern Ontario, the Department notes that the proposed Tier 2 levels are based on the more densely populated centres within each specific tier. These levels are consistent with levels required by AWS licences.

Deployment requirements are intended to encourage the timely use of spectrum, and to deter acquisition for anti-competitive purposes. Decreasing the deployment requirements to a level lower than those in place in the more populated centres within a tier is not being adopted. We also note that the proposed deployment levels are consistent with the levels specified for the 2008 AWS licensing process and the 700 MHz band process.

Based on the considerations above, Industry Canada is of the view that adopting the two-stage ATC deployment requirements as proposed in the consultation strikes a balance between providing flexibility for the existing licensees to implement their business plans, on the one hand, and imposing obligations to ensure the spectrum is put to use in a timely manner, on the other.

Decision C-10

ATC licensees will be required to demonstrate deployment to 30 percent of the population of the Tier 1 licence area within five years of licence issuance; that is, by March 31, 2020. In addition, within 10 years of licence issuance (by March 31, 2025), licensees will be required to demonstrate deployment to the Tier 2 levels as outlined in Annex B of this document, consistent with the levels specified in the previous AWS and 700 MHz licensing processes.

Where a licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date.

6.3.5 Interim Site Licences and Fees

Noting that there is currently no spectrum licence fee in place for ATC spectrum in this band, Industry Canada proposed to continue to require site-specific radio station licences and related fees prior to deployment for each installation until such time as a spectrum licence fee has been established. Once the spectrum licence fee order is in effect and a spectrum licence issued, the site-specific radio station licences will be cancelled.

The applicable licence fees for each site licence will continue to be based on the relevant section of the Radiocommunication Regulations.^{Footnote 4} As per the existing special authorization, this fee is $232 "per channel" in the metropolitan areas and $106 "per channel" in the non-metropolitan areas. In the case of ATC systems, the Department defines a "channel" as being based on the necessary bandwidth of the system, which will be determined at the time of application for each site licence and be limited to a maximum of 5 MHz.

The licensee must pay the annual licence fee for each site licence before March 31 of each year for the subsequent year (April 1 to March 31).

Summary of Comments

The majority of respondents (Bell, MTS, SaskTel, TerreStar, and Xplornet) supported the Department’s proposal to apply an interim site licensing procedure for radio stations operated by the ATC licensees until a spectrum licence fee is finalized. Xplornet added that Industry Canada should finalize the ATC spectrum fee as soon as possible, so that it is acknowledged as early as possible in the deployment process.

SSi commented that Industry Canada should minimize the burden of fees for all spectrum allocations.

TELUS opposed the proposal, arguing that ATC (with the dual mode requirement removed) is valuable commercial mobile spectrum, and should attract standard terrestrial commercial mobile spectrum fees as of the date of licence issuance. In its reply comments, TerreStar indicated its opposition to TELUS’s proposal, noting that as ATC must operate under technical constraints that are vastly different from those in other bands, the proposed site licence fee is appropriate until a separate licence fee can be finalized.

Discussion

The Department proposed to continue to require site-specific radio station licences and related fees since a spectrum licence fee order does not yet exist. Once the fee order is established, the site licences will be cancelled and spectrum fees will apply.

With respect to the comment made by TELUS regarding the application of a standard terrestrial mobile spectrum licence fee, Industry Canada sets licence fees through the Department of Industry Act. In the interim, however, there is an existing radio (site) licence fee, which can be applied.

Decision C-11

Based on the above considerations, Industry Canada will continue to require site-specific radio station licences and related fees prior to deployment for each installation until such time as a spectrum licence fee has been established. Once the spectrum licence fee order is in effect and a spectrum licence issued, the site-specific radio station licences will be cancelled.

6.3.6 Spectrum Licence Fees

The Department’s authority to set spectrum licence fees is pursuant to the powers granted to the Minister of Industry in Section 19 of the Department of Industry Act. The Act states that the Department may establish fees following a public consultation. On March 31, 2004, the User Fees Act came into effect, with the aim of strengthening the elements of accountability, oversight and transparency in the management of user fee activities. The User Fees Act formally outlines requirements for the setting of new and amended fees.

The 2007 Spectrum Policy Framework for Canada (SPFC) states that the Department’s policy objective is to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource. Fees aim to earn a fair return for the Canadian public for the privilege of access to spectrum, which is a public resource. In the context of the setting of regulatory fees, this is accomplished through the establishment of fees that estimate the market value of the spectrum licences.

In 1999, the Department adopted spectrum licence fees for the MSS using spectrum above 1 GHz.^{Footnote 5} These fees have been applied to the existing 2 GHz MSS licences issued to Gamma Canada and TerreStar and will continue to apply to the licences issued under this process.

A separate consultation will be launched to determine the spectrum licence fees that will apply to the ATC licence issued through this process.

Part D — Technical Rules

7. Technical Rules for the 2 GHz Band

The Department intends to harmonize its technical rules with those of the United States to the extent feasible. Technical requirements will be identified in an applicable SRSP. As well, modifications will be made to RSS-170, Mobile Earth Stations and Ancillary Terrestrial Component Equipment Operating in the Mobile-Satellite Service Bands. In order to give preliminary opportunity for feedback, proposed technical rules were included in the Consultation. However, both the SRSP and RSS will be done in consultation with stakeholders, including the Radio Advisory Board of Canada.

7.1 Technical Rules Below 2020 MHz

7.1.1 Background on U.S. Technical Rules

As noted in the Consultation, in its AWS-4 R&O, the FCC adopted technical rules for the bands 2000-2020 MHz/ 2180-2200 MHz that largely follow Part 27 flexible use rules, which govern other commercial mobile bands. However, the FCC put technical rules in place for the sub-band 2000-2005 MHz which, in effect, limit the use of this sub-band by requiring the AWS-4 licensees to accept interference from future H block operations in the band 1995-2000 MHz and not cause interference to these operations.

The FCC acknowledged that placing the AWS-4 uplink band (2000-2020 MHz) adjacent to the Upper H block (1995-2000 MHz), which at the time was envisioned as a future downlink band, would lead to mobile-to-mobile and base-to-base interference. The FCC underscored that the public interest benefit would be best served by a fully usable downlink spectrum band at 1995-2000 MHz, as wireless service providers tend to use more downlink than uplink spectrum. As a result, the FCC required that the AWS-4 licensees manage potential interference via power and out-of-band (OOB) emission limits.

7.1.2 Mobile-to-mobile Interference

The Department noted in the Consultation that if the band 2000-2020 MHz were used for uplink operations, then the spectral proximity of downlink and uplink bands would create the potential for mobile-to-mobile interference. This type of interference is difficult to manage, as it is probabilistic (i.e. the likelihood of interference depends on the proximity of user terminals to one another at any given moment and the magnitude of wanted vs. unwanted signal levels). As it is not possible to enforce separation distances between mobile stations, mobile-to-mobile interference can be managed by requiring more stringent out-of-band (OOB) emissions filtering, lower transmit power levels and/or the establishment of a guard band. To address this type of interference, the FCC required that the AWS-4 licensee manage potential interference via power and out-of-band (OOB) emission limits.

To allow for a more equitable sharing of interference management between future licensees in the PCS H block and the 2 GHz bands, Industry Canada considered relaxing both the OOB emissions and power limits on handsets operating in the 2 GHz band. While such measures would not limit the usability of the band 2000-2005 MHz for commercial mobile services, they would require that a different equipment ecosystem be developed for the Canadian marketplace, which could result in higher-cost and/or limited availability of terminal equipment.

Given the above considerations, Industry Canada proposed to harmonize Canadian technical requirements for OOB emissions and radiated power with those mandated in the United States for uplink operations in the band 2000-2020 MHz, noting that doing so would ensure that Canadians have access to regionally harmonized equipment.

If the band 2000-2020 MHz were used for downlink operations, then the potential for interference created by the adjacency of uplink and downlink operations would no longer exist. As a result, the FCC did not impose additional technical restrictions on the AWS-4 licensee to protect future H block operations.

Industry Canada proposed that downlink operations in the lower 2 GHz band be subject to similar technical rules as those in the United States.

7.1.3 Base-to-base Interference

The adjacency of the H block (base transmit) and 2 GHz band (base receive) also gives rise to potential base-to-base interference. This type of interference is more easily managed than mobile to mobile interference and can be addressed by antenna placement, additional radio frequency filtering and/or frequency separation. As with the case of mobile-to-mobile interference, more stringent OOB emissions filtering of unwanted emissions and lower in-band transmit power levels would diminish the risk of receiver desensitization and blocking.

In the Consultation, the Department noted that if the band 2000-2020 MHz were used for uplink operations, then interference management between base stations could be shared between licensees in both bands - that is, both licensees would be responsible for additional filtering for both transmitting and receiving base stations.

However, as the Consultation addressed only the proposed rules for MSS and ATC operations in Canada in the band 2000-2020 MHz, the Department highlighted that technical specifications for H block transmitters will be laid out in a future consultation on the PCS H block. Nevertheless, if the band 2000-2020 MHz is used for uplink operations, Industry Canada proposed that both ATC and future PCS H block licensees be required to manage base-to-base interference through mutually acceptable coordination agreements.

If the band 2000-2020 MHz is used for downlink operations, then the stricter power and OOB emissions that would have been required to mitigate base-to-base interference between the Upper H block and Lower MSS/ATC block would no longer be necessary.

7.1.4 Interference to MSS Operations

The spectral adjacency of the H block to MSS uplink operations at 2 GHz also gives rise to the potential for interference to MSS operations.

In the United States, the FCC acknowledged the potential for interference to MSS operations at 2 GHz, but declined to adopt specific technical rules. The FCC argued that since the satellites were launched well after it initiated the first H block proceeding in 2004, they should have been designed to address this type of scenario. As a result, there should be no impact to the satellites from future operations in the Upper H block.

Industry Canada has independently assessed the potential of interference to the MSS satellites and, in the Department’s view, the satellite protection criterion^{Footnote 6} would not be exceeded. As a result, in its Consultation, Industry Canada proposed that no additional measures be required of future PCS H block licensees to protect MSS operations in the 2 GHz band.

7.2 Technical Rules Above 2020 MHz

For the band 2180-2200 MHz, Industry Canada proposed to adopt the same equivalent isotropically radiated power (e.i.r.p.) limits for ATC base stations in the downlink band at 2180-2200 MHz, as outlined in the FCC rules. For OOB emissions above 2020 MHz, below 2180 MHz and above 2200 MHz, Industry Canada proposed to adopt the same OOB emission limits for ATC operations as specified in the FCC rules.

7.3 Harmonization of Technical Rules

In its Consultation Industry Canada sought comments on its proposal to develop technical rules for the 2 GHz band, harmonizing with the U.S. rules to the extent feasible through the issuance of the applicable SRSP and RSS and as outlined in Section 7 above.

Summary of Comments

All respondents on this issue supported the proposal to develop technical rules for the 2 GHz band that harmonize with U.S. rules through the issuance of the applicable SRSP and RSS. Xplornet commented that harmonizing technical rules and sharing satellite infrastructure on a North American basis allow for cost efficient deployment of telecom services and keep costs for Canadians down. TerreStar urged Industry Canada to prioritize this file with the RABC and complete the technical work within a three-month timeframe.

400525 Ontario supported the proposal, but recommended that Industry Canada wait until the FCC and DISH have finalized their rules, noting that the AWS-4 band plan is still in flux and there is no device ecosystem for the DISH spectrum.

While Bell and TELUS supported the proposal, they have concerns over the possible interference between the PCS H Block operations and MSS/ATC operations. In particular, TELUS noted its concern over the lack of clarity around MSS protection from PCS H Block downlink operations. TELUS added that the FCC explicitly ruled that MSS receivers in 2000-2005 MHz must accept H block interference and urged Industry Canada to adopt the same rule. Bell and TELUS also voiced concerns over possible mobile-to-mobile interference between the ATC licensees in the 2000-2005 MHz band and PCS H block mobile receivers in the band 1995-2000 MHz. They both recommended that AWS-4 A/A’ block licensees be required to protect future PCS H block licensees from such interference.

Omnispace suggested that MSS and terrestrial operations in the 2000-2020 MHz band should be required to accept interference from H Block operations.

Discussion

With respect to TELUS’s concerns regarding the potential for PCS H block base station interference with uplink MSS operations, Industry Canada’s technical analysis demonstrates that the satellite protection criteria would not be exceeded under the adopted rules governing out-of-band emissions, which are harmonized with U.S. technical rules. As a result, interference is unlikely to occur and no additional mitigation measures will be required of future PCS H block licensees to protect MSS operations in the 2 GHz band.

As noted above, both Bell and TELUS requested that the Department clarify its rules with respect to possible MSS/ATC interference into future H Block operations. The Department recognizes there is a potential for mobile-to-mobile interference to occur if the band 2000-2020 MHz is used for uplink operations. While adopting stringent technical rules for mobile terminals operating in the 2 GHz band could mitigate this type of interference, doing so would require the development of a different equipment ecosystem for the Canadian marketplace. This could result in higher costs and/or limited availability of terminal equipment. To avoid this, Industry Canada will harmonize Canadian technical requirements for out-of-band emissions and radiated power with those in force in the United States for uplink operations in the band 2000-2020 MHz, to the extent feasible. These technical rules would address the interference concerns highlighted by Bell and TELUS.

Based on the above considerations, harmonizing the technical rules to the extent feasible with those in the U.S. will ensure that Canadians have access to regionally harmonized equipment.

Decision D-1

Based on the above considerations, Industry Canada will develop technical rules for the 2 GHz band, harmonizing with the U.S. rules to the extent feasible. The Department will do this in consultation with stakeholders, including the Radio Advisory Board of Canada. Technical requirements will be identified in an applicable Standard Radio System Plan and modifications will be made to Radio Standards Specifications RSS-170, Mobile Earth Stations and Ancillary Terrestrial Component Equipment Operating in the Mobile-Satellite Service Bands.

8. Next Steps

The technical specifications in relation to the 2 GHz band will be addressed in the relevant SRSP and RSS, which will be developed in consultation with the industry and the Radio Advisory Board of Canada (RABC).

Gamma Canada and TerreStar may submit an application to Industry Canada indicating their interest within 30 days of the publication of this Framework. If such an application is received, a new licence will be issued on April 1, 2015, which reflects the new conditions of licence contained in this Framework. If no interest is expressed, Industry Canada will initiate another consultation on the policy and licensing framework for the 2 GHz band at a date to be determined.

9. Obtaining Copies

All spectrum-related documents referred to in this paper are available on the Spectrum Management and Telecommunications website at www.ic.gc.ca/spectrum.

For further information concerning the process outlined in this document or related matters, contact:

Senior Director
Spectrum Licensing Policy Branch
Industry Canada
235 Queen Street
Ottawa, Ontario K1A 0H5
Telephone: 613-862-0492
Email: ic.spectrumauctions-encheresduspectre.ic@canada.ca