Posted on Industry Canada website: March 7, 2013
1. Through the release of this paper, Industry Canada hereby announces the decisions resulting from the consultation process undertaken in DGSO-001-12 — Proposed Revisions to the Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing.
2. All comments and reply comments received in response to the consultation documents are available on Industry Canada’s website at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf10204.html.
3. This paper sets out changes to CPC-2-0-17 —Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements and to CPC-2-0-18 — Industry Canada’s Arbitration Rules and Procedures. Guidelines for Compliance with the Conditions of Licence Relating to Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements (GL-06) will be rescinded at the time of this publication as relevant text has been incorporated into CPC-2-0-17.
4. The Minister of Industry, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations (the Regulations) and with due regard to the objectives of the Telecommunications Act, is responsible for spectrum management in Canada. As such, the Minister is responsible for developing policies and processes for the spectrum resource and for ensuring effective management of the radio frequency spectrum resource. Subsection 5(1) of the Radiocommunication Act gives the Minister of Industry the power to fix and amend the terms and conditions of spectrum licences. The Minister may suspend or revoke a radio authorization if the licensee has contravened the Radiocommunication Act, the Regulations or the terms or conditions of the radio authorizations.
3. Policy Objectives
5. The revised conditions of licence have been developed to further facilitate roaming and tower sharing agreements in order to advance the policy objectives of supporting competition, encouraging investment and reducing tower proliferation.
4. Background and Considerations
6. In November 2007, Industry Canada announced its decision to mandate roaming and antenna tower and site sharing in conjunction with the licensing process for Advanced Wireless Services (AWS). The conditions of licence came into effect in November 2008.
7. In March 2012, Industry Canada published DGSO-001-12 — Proposed Revisions to the Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing (herein referred to as "the consultation") to propose changes to the conditions of licence for mandatory roaming and antenna tower and site sharing, as well as to the arbitration rules and procedures. Comments and/or reply comments were received from Bell Mobility (Bell), Bragg Communications Inc. (Eastlink), the Broadcasters Technical Coordinating Committee (BTCC), the Canadian Wireless Telecommunications Association (CWTA), Data & Audio-Visual Enterprises Wireless Inc. (Mobilicity), E-Comm 9-1-1, MTS Allstream (MTS), Peel Regional Police, the Province of Nova Scotia (Public Safety & Field Communications Office of Department of Transportation & Infrastructure Renewal), the Province of Ontario, Public Mobile, Public Safety Canada and the Centre for Security Science, Rogers Communications (Rogers), the Royal Canadian Mounted Police (RCMP), Saskatchewan Telecommunications (SaskTel), Shaw Communications Inc. (Shaw), SSi Group of Companies (SSi), Tbaytel, TELUS Communications Company (TELUS), TerreStar Solutions Inc. (TerreStar), Quebecor Media Inc. (Videotron), WIND Mobile (WIND) and York Regional Police. The following decisions are a result of that consultation process.
8. Revised conditions of licence and arbitration rules (contained in CPC-2-0-17 and CPC-2-0-18, respectively) are being published in conjunction with this decision paper, reflecting the changes announced herein. These CPCs were also revised to incorporate background information and guidance from GL-06, as well as relevant text from the Responses to Questions for Clarification on the AWS Policy and Licensing Frameworks. GL-06 will be rescinded upon publication of CPC-2-0-17, Issue 2.
9. The revised issue of CPC-2-0-17 will apply to any new negotiations commenced by a request for information submitted after March 7, 2013, and the revised Arbitration Rules in CPC-2-0-18 will apply to any arbitration commenced by a notice of arbitration after that date. Negotiations and arbitrations that are ongoing may be completed under the current issues of the CPCs.
5. Mandatory Roaming
5.1 Application of the Conditions of Licence
10. In the consultation, Industry Canada proposed to modify the conditions of licence for mandatory roaming by removing the distinction between in-territory roaming and out-of-territory roaming and by applying the condition indefinitely. It also proposed to apply the conditions to mobile broadband service (MBS) and broadband radio service (BRS) licensees in the 700 MHz and 2500 MHz bands, respectively.
11. The consultation proposed the following:
"The Licensee must provide automatic digital roaming (roaming) indefinitely by way of Roaming Agreement(s) on its cellular, PCS, AWS, MBS and BRS networks to any other Licensee in these bands (A Requesting Operator).
- Where technically feasible, the Licensee shall offer roaming in all its licensed service areas in the aforementioned bands.
- A Requesting Operator includes provisional licence winners."
Summary of Comments
12. The majority of respondents supported the proposed changes to the application of the mandatory roaming condition of licence. Some respondents, however, only supported certain aspects of the proposal. Bell disagreed with the proposal in its entirety, arguing that making changes to the conditions of licence less than halfway through the 10-year licence term would undermine certainty and confidence in future Industry Canada auctions.
13. Rogers, TELUS, WIND, Mobilicity, Public Mobile, Shaw, Eastlink, TerreStar, SSi Micro and Videotron supported removing the distinction between in-territory and out-of-territory roaming whereas Bell, MTS, SaskTel and Tbaytel did not support the proposal.
14. MTS suggested that the proposal would result in only incumbents having any incentive to invest in building out infrastructure, especially in rural and unserved areas. SaskTel noted that in situations where coverage is a marketing differentiator, the operator with the superior coverage will suffer market losses if mandatory roaming must be provided to the competitor, which could lead to revenue losses, impeding the operator’s ability to maintain and update high-quality broadband services to high-cost areas.
15. Both MTS and SaskTel argued that the proposal could actually deepen the digital divide between urban and rural Canadians. However, SaskTel did note that it would support roaming conditions being extended to new entrants for an additional ten years.
16. Tbaytel suggested that allowing other carriers to roam on the first-built MBS network could lead to several operational and technical issues, such as loading and congestion problems, and that only out-of-territory roaming should be mandated.
17. SaskTel proposed that mandated roaming be linked to allowing access to unused spectrum and proposed the addition of a "use it or share it" condition of licence. Under such a condition, spectrum that has not been used by a licensee would be made available to facilities owners with home networks that are capable of using the spectrum, in order to support the capacity requirements of all users of that network (including competitors’ roaming traffic) and to facilitate broadband services in rural areas.
18. Rogers suggested that concerns raised with respect to network congestion due to increased roaming are exaggerated and should be disregarded. It stated that at no time has the Rogers network been overwhelmed by roaming traffic and suggested that parties could negotiate additional spectrum access as part of a roaming agreement.
19. Most respondents that supported the proposal were in favour of applying the roaming provision indefinitely.
20. TELUS was supportive of extending the provisions to all carriers; however, it noted that in the absence of a time limit or substantive deployment requirements, even the large carriers may have incentives to roam on other networks rather than build their own, particularly in rural areas. TELUS therefore suggested that roaming be extended for renewable five-year periods in order to assess whether adequate build-out has occurred. TerreStar suggested a review every seven years.
21. Rogers suggested that a five-year review and renewal would be redundant since Industry Canada already imposes rollout requirements, reviews the extent to which licensees have satisfied their rollout requirements and renews licences in areas where licensees have made satisfactory progress.
22. MTS suggested that carriers with a rural rollout requirement not be mandated to provide in-territoryLTE roaming outside of urban areas for the first five years of their licences. Rogers proposed that the Department require Requesting Operators to cover at least 60% of the population within their entire existing network coverage area at a particular level of service before they are entitled to roaming on the same level of service outside their coverage area. Bell agreed with Rogers' proposal, whereas Eastlink, SSi Micro and Shaw disagreed.
23. Applying the mandatory roaming condition of licence to MBS and BRS licences was supported by most stakeholders, who noted its consistency with the intent of the policy.
24. Public Safety entities that responded generally supported any provisions that would mandate commercial carriers to offer roaming to public safety agencies on their commercial networks. However, they also suggested that before deciding to mandate that public safety agencies offer roaming to commercial carriers, further study is required to understand the implications on security and on availability of capacity to first responders during emergencies.
25. In response to Bell’s comments that adopting changes during the licence term undermines confidence in the auction process and creates uncertainty in the market, Industry Canada notes that the Minister has the authority to change conditions of licence at any time, but does not do so without careful consideration and consulting stakeholders as appropriate. As such, the consultation set out in DGSO-001-12 outlined proposed changes and provided an opportunity to all stakeholders to offer input.
26. The consultation paper proposed that extending the in-territory roaming provisions would provide additional time to new entrants in order to build out their own networks, while maintaining service where they had not yet deployed within their licensed areas, thereby minimizing the potential impact on their customers. It was also noted that applying this requirement to all licensees would benefit all parties where they lack adequate coverage.
27. These changes, including removing the distinction between in-territory and out-of-territory roaming, were proposed to support competition. Therefore, implementing a delay or requiring a certain level of service prior to having access to mandated roaming, as suggested by some respondents, could result in significant delays in accessing LTE networks for consumers. It is expected that carriers will extend their LTE networks and that licensees providing roaming will be financially compensated through the roaming rates they charge for providing these services.
28. The consultation paper also suggested that extending the current provisions indefinitely would recognize the importance of ongoing national coverage, while relying on market forces and the higher costs associated with reliance on roaming to ensure that it is more profitable for carriers to continue to build out where economically feasible. Extending roaming provisions indefinitely would also result in greater certainty for licensees.
29. Industry Canada notes that the provisions will apply for as long as the condition of licence is in force; therefore, inclusion of the term "indefinitely" is not considered necessary. Furthermore, it is noted that the requirement for technical feasibility is already included in the subsequent section of the conditions of licence. The duration of each roaming agreement, as well as the terms contained therein, are to be negotiated between the parties with recourse to arbitration.
30. Regarding SaskTel’s proposal to include a new "use it or share it" condition of licence, it is noted that the capacity concerns raised by SaskTel, should these occur, could be mitigated in numerous other ways that rely more strongly on market forces, such as developing agreements with other licensees or using frequencies in other spectrum bands to increase network capacity. Furthermore, it is noted that where roaming traffic is high, there will be commensurate revenues, and that where costs are higher (for example, in remote areas), commercial terms may be different.
31. However, with respect to access to unused spectrum generally, as announced in SMSE-002-12 — Policy and Technical Framework Mobile Broadband Services MBS — 700 MHz Band and Broadband Radio Service (BRS) — 2500 MHz Bands, Industry Canada intends to undertake a review of the Policy for the Provision of Cellular Services by New Parties (RP-19). RP-19 allows third parties to apply to use spectrum in certain geographic areas where services are not being offered by the current licensee.
32. MBS and BRS licensees are expected to offer services similar to those provided by Cellular, PCS and AWS licensees. Broadening the scope of mandatory roaming to include MBS and BRS licensees would provide consistency across similar licences. It is expected that MBS and BRS licensees will develop networks at varying rates, and by broadening the roaming requirement to include these bands, advanced mobile services will be offered more widely, regardless of the customer’s service provider.
33. To reflect the expanded scope of mandatory roaming, which will apply to carriers across all their licensed service areas, the following modification will be applied to the conditions of licence:
"Roaming must enable a subscriber (aRoamer) already served by the Requesting Operator's network (Home Network) tooriginate or terminate communications on the Licensee's network (HostNetwork) begin strikethrough
when out of range of the Home Networkend strikethrough, wherever technicallyfeasible."
34. This change provides the opportunity for operators to negotiate access to the best possible geographic coverage of roaming for their customers at a quality and at a level of service comparable to the Home Network, regardless of the spectrum band or underlying network technology used.
35. While this change increases the possible scope of the condition, it is in the licensees’ best interest to minimize their customers’ roaming traffic.
36. While some public safety agencies raised issues surrounding roaming in the 700 MHz MBS spectrum band, Industry Canada has not yet initiated detailed consultations to establish the technical and licensing framework for 700 MHz spectrum designated for public safety broadband use. As such, these comments are premature and spectrum designated for public safety use is not presently within the scope of this condition.
37. Given the ongoing evolution in mobile broadband services, and in order to continue to advance the policy objectives of the tower sharing and roaming policy, Industry Canada will closely monitor the effectiveness of the policy. Further changes or adjustments to the roaming provisions will be considered, and/or additional action will be taken as necessary.
A-1: The conditions of licence for mandatory roaming will be modified as follows:
The conditions of licence described below will apply to all Licensees in the Cellular, Personal Communications Services (PCS), Advanced Wireless Services (AWS), Mobile Broadband Service (MBS) and Broadband Radio Service (BRS) bands.
The Licensee must provide automatic digital roaming (roaming) by way of Roaming Agreement(s) on all of its networks in the Cellular, PCS, AWS, MBS and BRS bands in all of its licensed service areas to any other Licensee in these bands, including a provisional licence winner in accordance with a licensing process in these bands (A Requesting Operator).
Roaming must enable a subscriber (a Roamer) already served by the Requesting Operator's network (Home Network) to originate or terminate communications on the Licensee's network (Host Network), wherever technically feasible.
5.2 Seamless Communications Hand-offFootnote1
38. In the consultation, Industry Canada indicated that it did not intend to change the provision with respect to seamless communications hand-off, described in the Conditions of Licence for Mandatory Roaming:
"Roaming does not require communication hand-off between home and host networks such that there is no interruption of communications in progress."
Summary of Comments
39. Rogers, Bell, TELUS and SaskTel supported Industry Canada’s proposal, whereas others — Public Mobile, Eastlink, Shaw and WIND — suggested that Industry Canada should change the requirement to mandate seamless communications hand-off.
40. Those which supported no change to the seamless hand-off requirement indicated that it is technically complex, not always feasible and costly to implement, due to the continuousmodifications that would be required as carriers expand their networks. Rogers noted that the parties which would like a reconsideration of the seamless hand-off requirement have not provided any evidence that it is technically feasible inthe context of domestic roaming. Bell and TELUS agreed.
41. According to WIND, incumbent claims regarding costs and technical feasibility were overstated. Shaw noted that unless seamless hand-off is mandated, incumbents
"will refuse to supply this capability and thereby preserve a fundamental competitive disadvantage for competitors."
42. Mobilicity and Eastlink suggested that if seamless hand-off is technically and economically feasible between parties, it should be negotiated in good faith. Both respondents suggested that Industry Canada should encourage incumbents to, at a minimum, assess the technical feasibility and the cost of seamless hand-off.
43. As discussed in the consultation, Industry Canada is not aware of any other country that mandates seamless communications hand-off and although it exists between carriers in certain areas, it is not a standard term in roaming agreements or technically essential for the implementation of a roaming agreement.
44. While Industry Canada continues to encourage that seamless hand-off be negotiated between parties, mandating these types of arrangements is not considered necessary for the advancement of Industry Canada’s stated policy objectives.
A-2: Consistent with the proposal, Industry Canada is not implementing changes to conditions of licence for mandatory roaming with respect to seamless communications hand-off.
5.3 Responding to Requests for Information
45. Industry Canada proposed to modify the mandatory roaming conditions of licence specifying that the Licensee must respond to a request for preliminary information by a Requesting Operator within two weeks.
46. The time frame of "within two weeks" was applied to the mandatory tower sharing framework in 2009 as part of GL-06 at the request of stakeholders in order to improve clarity, and has now been proposed for the mandatory roaming conditions of licence in order to establish the same level of clarity for the negotiation of roaming agreements.
Summary of Comments
47. The majority of respondents supported Industry Canada’s proposal to specify the response time to "within two weeks," noting that it is a reasonable time frame when the information is readily available and also that it could reduce potential delays. SaskTel disagreed with the proposed change, suggesting instead a four-week time frame.
48. Mobilicity suggested that the two-week time frame also apply to any request for additional technical information, (not only the preliminary information), in order to assist the development of a roaming proposal.
49. As noted above, the proposed edit was suggested in order to provide the same level of clarity for roaming negotiations as for tower sharing. There was broad support for this proposal, and Industry Canada reminds parties that timelines can be adjusted if both parties agree.
50. In regards to comments suggesting that the two-week response time apply to all requests for technical information, it is noted that not all steps in the process have set timelines as it is considered that this would be overly restrictive. However, Licensees are reminded that they can initiate binding arbitration if an agreement has not been reached within the time frames described in the conditions of licence.
A-3 Consistent with the proposal, the conditions of licence for mandatory roaming will be modified as follows:
In order to satisfy the condition of roaming in accordance with this licence, the Licensee must respond to a request for information by a Requesting Operator within two weeks of receiving the request by providing a preliminary information package (PIP) to the Requesting Operator that includes preliminary technical information, such as technical data, engineering information, network requirements and other information relevant to formulating a Roaming Proposal.
5.4 Roaming Rates and Technical Feasibility
51. No changes were proposed to the text regarding roaming rates or technical feasibility.
52. Comments were received regarding roaming rates, and these are addressed in Section 7.3. No comments were received suggesting changes to the wording of the section on technical feasibility.
5.5 Good Faith Negotiations
53. The conditions of licence state that:
"Licensees must negotiate with a Requesting Operator in good faith, with a view to concluding a Roaming Agreement in a timely manner."
54. No changes were proposed to this text.
Summary of Comments
55. While some parties (Bell, Rogers, TELUS and Shaw) supported Industry Canada’s proposal to not change the wording on negotiating roaming agreements in good faith, others suggested some changes.
56. WIND indicated that the wording of the condition is insufficient, given the unequal bargaining power of parties and one-sided time pressures.
57. Similarly, Mobilicity noted that there are significant imbalances in negotiating power between parties. It suggested that Industry Canada set out clear and explicit guidelines where ambiguities exist or multiple interpretations can be made. It also suggested that the requirement to act in good faith should be extended beyond the negotiation stage to also include both the performance and the implementation of roaming (such as planning, testing and implementation).
58. The conditions of licence outline the timelines for particular steps of the process to develop a roaming agreement while clearly describing Industry Canada’s expectations with respect to good faith negotiations. Decision A-3 has provided additional direction for parties in this regard.
59. Industry Canada does not consider it necessary to extend the obligation to act in good faith beyond the negotiations of the agreement, because once a commercial agreement is reached, contract law is used to enforce terms agreed to between the parties. Licensees may choose to include specific clauses in their agreements in order to address any issues that they anticipate encountering during the terms of their contracts.
60. As described in the conditions of licence, if an agreement cannot be reached within the stipulated timelines, the matter can be addressed through arbitration in accordance with Industry Canada’s Arbitration Rules and Procedures.
A-4 Consistent with the proposal, Industry Canada is not making any changes to the text in theconditions of licence for mandatory roaming with respect to good faith negotiations.
5.6 Timelines for Roaming Negotiations
61. In the consultation, Industry Canada noted that given the experience many stakeholders have with the negotiation process, 60 days should now be sufficient to determine whether a negotiated settlement is likely or whether arbitration will be required. Industry Canada therefore proposed to modify the conditions of licence to allow arbitration to be initiated after 60 days instead of the currently specified 90 days, noting that parties may agree to continue negotiations beyond these timelines.
Summary of Comments
62. Rogers supported Industry Canada’s proposal and stated that where parties are negotiating in good faith, they will usually agree to continue negotiations until an agreement is successfully concluded. Changing the timeline to 60 days would allow Requesting Operators to refer matters to arbitration much earlier if required.
63. Mobilicity, Shaw, TerreStar, SSi Micro and Public Mobile also supported the proposed change. Eastlink agreed, but suggested that the change would do little to address timing and cost issues associated with arbitration.
64. TELUS, Bell and SaskTel did not support the change, noting negotiations are complex and can often take longer than 60 days. SaskTel suggested that unrealistic deadlines may lead to arbitration becoming the default position, which would increase costs for all parties and also increase the total time required for agreements to be reached.
65. Industry Canada notes that, in practice, it may take longer than 60 days to reach a roaming agreement in certain cases. However, it is anticipated that reducing the amount of time before arbitration can be triggered, along with reduced arbitration timelines (see Part C), could further expedite roaming agreements without negatively affecting negotiations as parties can still agree to extend their negotiations.
A-5 Consistent with the proposal, Industry Canada is amending the timelines in the conditions of licence for mandatory roaming as follows:
If after 60 days from the date that the Licensee receives the Roaming Proposal, the Licensee and the Requesting Operator have not entered into a Roaming Agreement or have not agreed to any interim arrangement, the Licensee must submit or agree to submit the matter to arbitration in accordance with Industry Canada’s Arbitration Rules and Procedures, as amended from time to time. The Licensee shall agree that the Arbitral Tribunal shall have all necessary powers to determine all of the questions in dispute (including those relating to determining the appropriate terms of the Roaming Agreement and those relating to procedural matters under the arbitration) and that any arbitral award or results under this condition of licence shall be final and binding with no right of appeal subject to applicable provincial or territorial legislation. The Licensee must participate fully in such arbitration and follow all directions of the Arbitral Tribunal in accordance with Industry Canada’s Arbitration Rules and Procedures and any arbitration procedures established by the Arbitral Tribunal.
5.7 Other Issues Relating to Mandatory Roaming
66. In the consultation paper, stakeholders were invited to submit recommendations for other changes that could further increase the effectiveness of mandatory roaming.
67. Shaw, WIND and Eastlink urged Industry Canada not to allow exclusivity clauses in roaming agreements. Shaw argued that incumbents often require that new entrants roam exclusively on a particular network, and that this requirement is limiting for new entrants from a commercial perspective.
68. Eastlink suggested that where exclusivity clauses currently exist, carriers should be required to waive them.
69. TELUS and Rogers stated that such clauses should not be prohibited outright, and that parties should be allowed to negotiate their own agreements and seek either exclusive or non-exclusive arrangements as they see fit. It was argued that exclusive roaming agreements normally provide a greater volume of roaming minutes and allow parties to agree upon reduced roaming rates and terms that mutually benefit both parties.
70. Exclusivity arrangements can be a commercial term negotiated into a roaming agreement. As stated by Rogers and TELUS, parties may use these clauses to negotiate preferable rates or other terms.
71. Depending on the context of an agreement, exclusivity may or may not be beneficial to either or both parties. This issue may be taken into consideration by the parties or by an arbitrator, if necessary, to determine if it is reasonable given the context of the agreement in its entirety. Parties can be directed to pursue this issue through arbitration, as is the case for all other commercial terms of their negotiations, if they are unable to reach an agreement.
72. Flexibility with respect to renegotiation of terms prior to the expiry of the Roaming Agreements is also considered in the context of the overall agreement. Industry Canada does not intend to intervene in order to force renegotiation of Roaming Agreements in this respect.
73. In consideration of the above discussion, changes will not be made to specifically address exclusivity clauses.
Standard Roaming Agreements
74. WIND suggested that the conditions of licence should be reinforced with a standard roaming agreement and that exceptions or deviations from this model could be reviewed by the CRTC, as is the case with wireline agreements.
75. In addition, Eastlink suggested that all roaming agreements in Canada should be required to be at least as favourable as the GSMA standard roaming agreements, though licensees would be free to mutually negotiate additional agreeable terms.
76. Industry Canada will not be imposing a standard agreement given that the conditions of licence are not meant to impose specific terms on licensees, but rather, to set out a framework for negotiation with recourse to arbitration. Arbitration is available, if necessary, as a way to assist in finalizing agreements based on market terms and rates.