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

1. Through the release of this document, Innovation, Science and Economic Development Canada (ISED), on behalf of the Minister of Innovation, Science and Industry (the Minister), hereby announces the decisions resulting from the consultation undertaken in Canada Gazette notice DGSO-001-23, Consultation on the Spectrum Licence Renewal Process for Wireless Communication Services (WCS) Licences (the Consultation).

2. All comments and reply comments received in response to the Consultation are available on ISED’s Spectrum management and telecommunications website. Comments and/or reply comments were received from:

• Bell Mobility Inc. (Bell)
• Canadian Spectrum Holding Corporation
• Eeyou Communications Network (ECN)
• First Mile Connectivity Consortium (FMCC)
• Rogers Communications Canada Inc. (Rogers)
• Saskatchewan Telecommunications (SaskTel)
• TELUS Communications Inc. (TELUS)

3. This document (hereinafter referred to as the Decision) sets out decisions for the renewal of wireless communication services (WCS) spectrum licences.

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

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

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

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

7. With licences beginning to expire after March 31, 2024, ISED issued Canada Gazette notice DGSO-001-23 to notify stakeholders of the Consultation. The Consultation sought input on four issues:

• renewal eligibility
• licence term
• deployment requirements
• other conditions of licence

8. In the Consultation, ISED proposed to renew these licences where the licensee was able to demonstrate compliance with all existing conditions of licence established in Decisions Concerning the Renewal of 2300 MHz and 3500 MHz Licences (2013 Renewal Decision).

9. As part of the proposed renewal process, licensees will need to demonstrate that they have maintained coverage at a minimum to the levels indicated in annex A of the 2013 Renewal Decision in order to be eligible for a new licence.

Comments

10. The majority of licensees who provided comments, including Bell, Rogers, SaskTel and TELUS were generally supportive of ISED’s proposal to issue new WCS spectrum licences to existing eligible licensees, provided they meet the existing conditions of licence.

11. Bell and TELUS further stated that the proposal remained consistent with ISED’s policy approach of providing licensees in the band with a high expectation of renewal, provided there has not been a breach of conditions, a fundamental reallocation of spectrum to a new service or a new overriding policy need.

Discussion

12. Licensees in the 2300 MHz band are actively utilizing this spectrum to provide wireless services to Canadian consumers. As such, ISED believes that the interests of stakeholders and the Canadian public would be best served by renewing the WCS licences of eligible licensees.

13. Stakeholders generally agreed there is currently no overriding policy need or new service that would prevent renewal of the WCS band. Furthermore, ISED prefers to signal certainty to licensees and the telecommunications industry by establishing this licence renewal process.

14. Therefore, those licensees that meet their licence conditions will be eligible for a new licence in the applicable licence area. The conditions that will apply to the new spectrum licences in this band are set out in annex B.

Decision

15. In the Consultation, ISED proposed that eligible WCS licences be renewed for an additional 10-year term.

Comments

16. Bell, Rogers, SaskTel and TELUS were not supportive of ISED’s proposed 10-year licence term stating that it would be inconsistent with ISED’s previous decisions to issue 20-year licence terms for other spectrum bands.

17. Bell further stated that a 10-year term would be inconsistent with recent auctioned and renewed low and mid-spectrum bands, including Advanced Wireless Service, Broadband Radio Service, as well as the 600 MHz, 3500 MHz and 3800 MHz bands. TELUS and SaskTel both mentioned that a 10-year term would be inconsistent given ISED’s licensing of residual WCS spectrum for a 20-year term in the 2018 Residual Auction. Support for a 20-year term was reiterated by Rogers in its reply comments. Similarly, Canadian Spectrum Holding Corporation expressed support for the licence term positions expressed by Bell, Rogers and TELUS.

18. TELUS also mentioned in its comments that a 20-year term would allow ISED to align the renewal date for all WCS licences, proposing that all future renewals expire on March 31, 2044, with minimal impact on licences.

19. ECN expressed support for the proposed 10-year term provided a licensee has met ISED’s renewal requirements.

Discussion

20. ISED’s proposal for a 10-year licence term for renewed licences is consistent with past licence terms in this frequency band. The initial WCS spectrum auction in 2004 was based on a 10-year licence term. In 2013, as part of the WCS renewal process, ISED renewed eligible licences for an additional 10-year term. To remain consistent, ISED proposed to renew WCS licences for a third 10-year term. ISED believes that a 10-year term is reasonable and aligns with previous decisions within this band.

21. Although ISED has applied 20-year licence terms in recent spectrum auctions and other renewal processes, there remains a precedent for 10-year licences. Most recently, ISED proposed a 10-year term for mmWave spectrum through the Consultation on a Policy and Licensing Framework for Spectrum in the 26, 28 and 38 GHz Bands. As such, ISED is of the view that a 10-year licence term for renewed WCS licences will allow licensees to expand their networks while providing ISED increased flexibility to address potential changes in new-use cases and the evolving technology landscape. Therefore, ISED is of the view that a 10-year term would be appropriate for renewed WCS licences.

Decision

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

23. When renewing licences in existing spectrum bands, ISED’s approach has generally been to increase deployment requirements for the renewed licences to continue expanding network coverage. These increased deployment requirements ensure the continued advancement and expansion of wireless services, particularly those in rural and remote areas.

24. In the Consultation, ISED proposed to increase required deployment levels to ensure continued deployment in all parts of Canada.

7.1 Mid-term deployment requirement

25. In addition to an increase in the end-of-term deployment requirements, ISED also proposed and sought comments on the implementation and introduction of a mid-term deployment requirement at year five of the new licence term.

26. In general, in newly auctioned bands and upon the renewal of licences in other bands, ISED has taken the approach of implementing mid-term deployment requirements, including in 3500 MHz and 3800 MHz, as well as the AWS-1 renewal process. Mid-term deployment requirements encourage licensees to further expand their network coverage and promotes increased provision of services for more communities, particularly those in rural and remote areas.

Comments

27. Bell, Rogers, and TELUS remained consistent with their suggestion to have 20-year licence terms, suggesting that deployment conditions align with those implemented for recently auctioned bands, such as 3500 MHz and 3800 MHz. Specifically, Bell and TELUS suggested that the mid-term deployment requirement be applied at year 10 and the final level applied at year 20, and set at levels no greater than the 3800 MHz band requirements.

28. Rogers recommended that ISED adopt the general deployment requirements established through the Policy and Licensing Framework for Spectrum in the 3800 MHz Band for renewed WCS licences. Rogers further suggested that where the WCS deployment requirements established through the 2013 renewal are already at the 20-year deployment levels for the 3800 MHz band, ISED adopt a maximum 5% increase for year five and a maximum 10% increase in year nine.

29. SaskTel disagreed with the imposition of further deployment requirements where spectrum has been deployed and prior requirements have been met, since it will impose unnecessary costs in rural and remote areas. TELUS acknowledged the concerns expressed by SaskTel but reiterated its support for the establishment of deployment requirements that address spectrum use across urban and rural areas of Canada through consultation.

30. SaskTel also suggested that ISED consider an alternative to what it refers to as blanket deployment requirements on a per-band basis, and consider licence conditions that take into consideration a carrier’s deployments in other bands already covering a licence area. Similarly, Bell recommended that all types of deployments, including private networks, should count towards meeting the requirement.

31. ECN also suggested ISED use an alternative measurement for minimum coverage other than population, stating the proposed approach does not address the need for coverage in smaller communities and transportation routes. As such, ECN recommended that the focus of these requirements be on providing coverage along public roads and major highways in rural and remote areas. In response, Rogers proposed that ISED consider enabling 2300 MHz for low Earth orbit satellite service to mobile phones to increase coverage of highways in rural and remote regions. Rogers further noted the current Federal Communications Commission (FCC) consultation on a new regulatory framework to add satellite designations in terrestrial mobile spectrum bands and suggested ISED consider consulting on a similar policy. The FCC consultation was also noted by Canadian Spectrum Holdings Corporation.

Discussion

32. Deployment requirements are a condition of licence that mandates licensees to deliver services to a baseline percentage of the population within the licence area, over a specified timeframe. ISED uses deployment requirements to facilitate the deployment and timely availability of services across the country, including in rural and remote areas.

33. In the consultation, ISED proposed to increase the existing deployment requirements for WCS licences to encourage enhanced coverage and deployment in this band. In addition, given that the technical characteristics and coverage capabilities of the 2300 MHz band are similar to those of the 3500 MHz and 3800 MHz bands, ISED modelled its proposed deployment requirements for WCS licences on the end-of-term general deployment requirements adopted in the 3500 MHz band.

34. ISED recognizes that a coverage requirement for roads and highways could benefit underserved rural and remote areas and should be considered in the public domain. Since this type of policy approach could apply across any number of spectrum bands, not just WCS, a wider consultation approach would be appropriate before adopting them.

35. To ensure continued advancement in the provision of coverage by WCS spectrum licensees, ISED will introduce a mid-term deployment condition for all renewed WCS licences at year five. The mid-term and final requirements are found in annex A.

Decision

36. In addition to conditions of licence already discussed, ISED sought comments on all other proposed conditions of licence for WCS licences issued through the renewal process as set out in annex B of the Consultation. Other conditions of licence that received comments include research and development and mandatory roaming.

8.1 Research and development

Comments

37. Bell, TELUS, and Rogers were not supportive of ISED’s proposed Research and Development (R&D) condition of licence. Bell stated that eligibility for R&D activities were unnecessarily narrow and ignored existing investments made by carriers. They recommended ISED broaden the R&D eligibility rules to include other relevant activities. In their reply comments, Rogers expressed support for Bell’s recommendation to broaden R&D eligibility requirements for carriers.

38. TELUS also opposed ISED’s proposed R&D condition, stating that the requirement was antiquated and unnecessary as carriers are already compelled to invest in network and technological innovation. TELUS recommended the R&D condition be eliminated.

39. SaskTel expressed general agreement with ISED’s proposed conditions of licence, including research and development.

8.2 Mandatory roaming

Comments

40. Rogers supported mandatory roaming as Client Procedures Circular CPC-2-0-17, Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements, which covers areas not duplicated by the policies of the CRTC. Rogers pointed to the roaming request process in CPC-2-0-17, which is supported by commercial negotiation timelines and obligatory arbitration and continues to benefit Canadian consumers.

41. Bell and TELUS opposed the mandatory roaming condition of licence as duplicative and unnecessary, pointing to existing roaming tariffs outlined by the CRTC. TELUS suggested the general right of licensees to obtain roaming be removed, and further recommended ISED conduct a consultation to review the mandatory roaming condition of licence. In their reply comments, Bell supported this recommendation, emphasizing that mandatory roaming decreases incentives for network investment from telecommunications carriers.

8.3 Provision of technical information

42. The proposed wording for the condition related to the provision of technical information has been updated to reflect the recently published Decision on Amendments to Requirements for Spectrum Licensees to Submit Technical Information about Sites (see annex B). The reporting requirements in CPC-2-1-30, Technical Information Associated with Radiocommunication Installations, will apply to all WCS licences.

Discussion

43. R&D requirements align with ISED’s spectrum objectives of fostering innovation and investment and are integral to maximizing the economic and social benefits that Canadians derive from the use of the spectrum resource. Continued investment in R&D is an important contributing factor to the success of the digital economy in Canada. Maintaining the R&D requirement reaffirms the federal government’s support for research, technology and investment in the current and future prosperity of Canadians.

44. The mandatory roaming condition of licence remains an important part of ISED’s spectrum policy approach as laid out in CPC-2-0-17, Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements. The condition of licence balances the objective of encouraging the deployment of networks with access to wholesale roaming services as operators continue to expand their networks.

45. ISED is of the view that the mandatory roaming condition of licence and the roaming tariffs developed by the CRTC serve distinct purposes and remain relevant today. As such, ISED believes it is appropriate to adopt the roaming condition of licence for renewed WCS licences.

46. Furthermore, given the absence of comments relating to any of the other proposed conditions of licence, these conditions will also be adopted as proposed in the Consultation.

Decision

8.4 Fees for renewed spectrum licences

47. In the consultation, ISED proposed that any licence fees applicable to renewed WCS spectrum licences would apply only after a consultation process.

Comments

48. In their reply comments, Bell expressed general support for ISED’s proposal that licence fees for renewed WCS spectrum licences will only apply after the conclusion of a separate licence fee consultation. Bell supported Rogers’ proposal that spectrum licence fees be based on a cost-recovery principle, or include reduced rates in rural and remote areas. Rogers recommended that ISED re-evaluate the impact of inflation adjustments found in the Service Fees Act (SFA), for which Bell expressed support. Bell also suggested ISED consider imposing an overall cap on the total amount of fees paid by licensees.

49. FMCC proposed waiving fees for Indigenous providers and coverage of Indigenous land.

Discussion

50. The radio frequency spectrum is a valuable and scarce resource that is a fundamental component of Canada’s telecommunications industry and the digital economy. To effectively manage this resource, ISED has developed spectrum management frameworks that encourage the efficient use of spectrum and maximize the economic and social benefits of spectrum for Canadians. Licence fees are an important component of ISED’s spectrum management frameworks and are designed to promote the effective use of spectrum by licensees and to earn a fair return for the Canadian public.

51. As stated in the Spectrum Outlook 2023 to 2027, spectrum and radio licence fees are part of the overall spectrum management regulatory scheme, which supports the efficient use of spectrum by licensees. ISED reiterates that cost recovery is not an objective of the Spectrum Policy Framework for Canada and is not a legislative requirement under the Department of Industry Act for radio and spectrum licences. As such, spectrum and radio licence fees may exceed cost recovery where fees are used to aid in the overall scheme of spectrum management.

52. A future consultation may be launched to determine the spectrum licence fees that will apply to new WCS spectrum licences issued through this renewal process. Any fees will only apply following the conclusion of said consultation process.

53. As discussed in the consultation, licensees who wish to obtain a new WCS licence in accordance with the renewal process must contact ISED at least 60 calendar days before the expiry of the licence and provide ISED with proof that it has met all of its current licence conditions, and that it is eligible to obtain the licence. ISED may also request further materials during its review of the request under the renewal process. Material should be sent to spectrumoperations-operationsduspectre@ised-isde.gc.ca.

54. Licences that are not renewed may be reassigned through a future licensing process.

55. All spectrum-related documents referred to in this paper are available on ISED’s Spectrum management and telecommunications web page.

56. For further information concerning the decisions outlined in this paper or related matters, contact:

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

Licensees must demonstrate coverage to the level indicated. Population in the following table is based on 2016 census data. The deployment requirements will be based on most recent census information available at the time of assessment.

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

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

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

B1. Licence term

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

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

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

B2. Eligibility

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

B3. Licence transferability, divisibility and subordinate licensing

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

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

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

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

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

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

B4. Radio station installations

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

B5. Provision of technical information

The licensee must provide and maintain up-to-date technical information related to associated radiocommunications installations that are in service within one month of the issuance of this licence. The licensee must provide or otherwise update and confirm the accuracy of their data relating to all in-service installations on a monthly basis, regardless of whether any changes have occurred. If there are no radiocommunication installations in service associated to this spectrum licence, the licensee must indicate this as well.

The licensee must adhere with all other definitions, criteria, and timelines specified in CPC-2-1-30, Technical Information Associated with Radiocommunication Installations, as amended from time to time.

B6. Compliance with legislation, regulation and other obligations

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

B7. Technical considerations, and international and domestic coordination

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

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

B8. Lawful intercept

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

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

B9. Research and development

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

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

B10. Deployment requirements

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

B11. Mandatory antenna tower and site sharing

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

B12. Mandatory roaming

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

B13. Annual report

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

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

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

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

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

B14. Amendments

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