Posted on Industry Canada website: March 7, 2013
1. Intent
1. Through the release of this paper, Industry Canada hereby announces the decisions resulting from the consultation process undertaken in Canada Gazette notice DGSO-002-12, Consultation on a Licensing Framework for Mobile Broadband Services (MBS) — 700 MHz Band.Footnote 1 This document serves as a companion document to the Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band,Footnote 2 announced in Canada Gazette notice SMSE-002-12.
2. All comments and reply comments received in response to this consultation are available on Industry Canada’s departmental website at http://www.ic.gc.ca/spectrum. Comments and/or reply comments were received from Bell Mobility Inc. (Bell), Bragg Communications Inc. (Eastlink), the British Columbia Broadband Association (BCBA), the Canadian Wireless Telecommunications Association (CWTA), Cogeco Cable Inc. (Cogeco), Data & Audio-Visual Enterprises Wireless Inc. (Mobilicity), the Eastern Ontario Regional Network (EORN), the Federation of Canadian Municipalities (FCM), Globalive Wireless Management Corp. (WIND), Dr. Helen Hambly Odame (of the University of Guelph), Ice Wireless, Dr. Michel Lincourt, MTS Allstream, Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), Public Interest Advocacy Centre (PIAC), Public Mobile Inc., Quebecor Media Inc. and Videotron G.P. (Quebecor), Rogers Communications Partnership (Rogers), SaskTel, Shaw Communications Inc. (Shaw), Sogetel Mobilité (Sogetel), SSi Group of Companies (SSi), Dr. Gregory Taylor and Dr. Catherine Middleton (of Ryerson University), Tbaytel, TELUS Communications Company (TELUS), and Xplornet Communications Inc. and Xplornet Broadband Inc. (Xplornet).
3. The following document (hereinafter referred to as the Framework) sets out the rules and procedures for participation in the competitive licensing process for spectrum in the 700 MHz band. The Framework includes: details related to the auction format and rules; the application process and timelines; and the conditions of licence that will apply.
2. Background
4. The Minister of Industry, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations, with due regard to the objectives of the Canadian telecommunications policy set out in section 7 of the Telecommunications Act, is responsible for spectrum management in Canada. As such, the Minister is responsible for developing national policies for spectrum utilization and ensuring effective management of the radio frequency spectrum resource.
5. In developing a licensing framework for MBS in the 700 MHz band, Industry Canada has been guided by the objectives stated in section 7 of the Telecommunications Act, the policy objective stated in the Spectrum Policy Framework for CanadaFootnote 3 (SPFC) to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum, and the policy objectives outlined in SMSE-002-12,Footnote 4 as follows:
- sustained competition in the wireless telecommunications services market so that consumers and businesses benefit from competitive pricing and choice in service offerings;
- robust investment and innovation by wireless telecommunications carriers so that Canadians benefit from world-class networks and the latest technologies; and
- availability of these benefits to Canadians across the country, including those in rural areas, in a timely fashion.
6. Industry Canada was also guided by the general approaches and processes outlined in the Framework for Spectrum Auctions in Canada (FSAC),Footnote 5 which was revised in March 2011.
7. Industry Canada makes no representation or warranties about the use of this spectrum for particular services. Applicants should be aware that this auction represents an opportunity to become a licensee, subject to certain conditions and regulations. An Industry Canada auction does not constitute an endorsement by the Department of any particular service, technology or product, nor does a spectrum licence constitute a guarantee of business success. Applicants should perform their individual due diligence before proceeding as they would with any new business venture.
3. General
8. In SMSE-002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz, Industry Canada announced specific policy decisions related to the licensing process for spectrum in the 700 MHz band. Consistent with those decisions, the following provides an overview of the licences to be auctioned:
- licences will be "spectrum licences in respect of the utilization of specified radio frequencies within a defined geographic area," as defined in subparagraph 5(1)(a)(i.1) of the Radiocommunication Act;
- licences will be auctioned using Tier 2 service areas (14 service areas) for all frequency blocks;
- a total of five blocks of paired spectrum and two blocks of unpaired spectrum will be available in each service area (seven licence blocks);
- a total of 98 licences will be offered;
- a spectrum cap of two paired frequency blocks will apply to all licensees; the unpaired blocks will not be subject to a spectrum cap;
- a spectrum cap of one paired spectrum block from within blocks B, C, C1 and C2 will apply to all large wireless service providers.Footnote 6
9. For a complete list of policy decisions related to the 700 MHz band, refer to Section B of SMSE-002-12.Footnote 7
10. The following frequency blocks will be available in all 14 service areas for the 700 MHz auction.
| Block | Frequency | Pairing | MHz |
|---|---|---|---|
| A | 698-704 MHz/728-734 MHz | paired | 6+6 MHz |
| B | 704-710 MHz/734-740 MHz | paired | 6+6 MHz |
| C | 710-716 MHz/740-746 MHz | paired | 6+6 MHz |
| D | 716-722 MHz | unpaired | 6 MHz |
| E | 722-728 MHz | unpaired | 6 MHz |
| C1 | 777-782 MHz/746-751 MHz | paired | 5+5 MHz |
| C2 | 782-787 MHz/751-756 MHz | paired | 5+5 MHz |
3.1 Service Area for Lloydminster (Alberta/Saskatchewan)
11. The issue surrounding Lloydminster was raised by SaskTel in response to SMSE-005-11, Decisions on a Band Plan for Broadband Radio Service (BRS) and Consultation on a Policy and Technical Framework to License Spectrum in the Band 2500-2690 MHz, where it proposed that tier area boundaries around Lloydminster are worthy of further consideration by Industry Canada.
12. In its consultation, Industry Canada sought comments on whether the service area boundary for licences in the 700 MHz band should deviate from the provincial boundary around the City of Lloydminster (Alberta/Saskatchewan).
Summary of Comments
13. Three respondents commented on this issue. Rogers and TELUS both indicated that the status quo should prevail. TELUS noted that as 65% of the Lloydminster population lives on the Alberta side of the border, having two operators serving the border area could result in additional roaming charges for customers. It added that significant coordination would be required and that although radio frequency (RF) optimization can mitigate some interference, wireless users in the centre of the city would bounce back and forth between networks, resulting in a high number of dropped calls and customer dissatisfaction.
14. SaskTel supports changing the boundary for service areas covering Lloydminster so that it aligns with the provincial boundary. It indicated that any entity currently seeking a Saskatchewan-wide licence would be required to obtain a licence that includes Edmonton, Alberta, and that would not be cost-effective. As for interference concerns, SaskTel indicated that new technologies can be and are being used to mitigate potential interference. SaskTel also added that the current spectrum map has caused divisions between the two primary providers in the area and that it has been contrary to the interests of the residents of Lloydminster.
Discussion
15. Industry Canada uses service areas, called tiers, for all competitive licensing processes. These areas are based on Statistics Canada’s Census Divisions and Subdivisions. Four tier sizes, as outlined in the document Service Areas for Competitive Licensing,Footnote 8 have been established to accommodate various wireless services, applications and frequency bands.
16. The tier service areas were introduced in 1998 following a public consultation that stemmed from the amendments to the Radiocommunication Act, which introduced a new approach to spectrum licensing in 1996. At the time of consultation, there was general agreement among stakeholders and, to reduce possible interference issues and keep economic areas intact, deviations were made around provincial borders.
17. The deviations occur in five areas of the country where the use of provincial borders would divide a contiguous economic zone in two. These are comprised of one large population area (Gatineau/Ottawa) and four smaller areas, including the City of Lloydminster, which lies on the border of Saskatchewan (35% of the population) and Alberta (65% of the population). Based on population distribution, the decision was made in 1998 to draw the tier boundary such that the City was in the Alberta tier areas, as that is where the majority of the population resides.
18. Maintaining the current tier area structure would be consistent with all other spectrum auction processes undertaken since 1999 and would allow existing licensees serving the tier area to make use of their existing infrastructure to overlay the additional spectrum.
19. Given the current tier structure, an entity wanting licences to cover all of Saskatchewan would also have to acquire a licence in the Alberta tier area.
20. Redrawing the tier area boundary to follow the provincial border could result in increased interference challenges; however, new technologies may be effective in mitigating interference.
Decision
21. Based on the above, Industry Canada considers that for the 700 MHz auctioned licences, the tier boundary will align with the Alberta/Saskatchewan provincial border in Lloydminster.