PART C — Decisions on Spectrum Packaging and the Licensing of Broadband Radio Service (BRS) in the 2500 MHz Band
Background
192. In February 2011, Industry Canada announced its decisions from the consultation initiated by DGSO-001-1042 in Canada Gazette 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 . In SMSE -005-11, Industry Canada announced its decisions related to the adoption of a new band plan, as well as the mapping of Multipoint Communication Systems ( MCS ) and Multipoint Distribution Service ( MDS ) licensees into the new BRS band plan.
193. In SMSE -005-11, the Department also initiated the consultation on a policy and technical framework to further license spectrum in the 2500 MHz band. Comments and reply comments were received from various entities (see Annex 6).
C1. Spectrum Packaging for Licensing
C1.1 Spectrum Available for Licensing
194. As per SMSE -005-11, the following general band plan was adopted for BRS in the 2500 MHz band (see Figure C1). Also shown in the figure is the associated reference to specific channels within the band.
[Description of Figure C1]
*Operation in the restricted bands (2570-2575 MHz and 2615-2620 MHz ) is specified in SMSE -005-11.
195. As noted in SMSE -005-11, figures C2 to C5 show the amount of spectrum available in the three Regions43 in Canada:
196. As shown in figures C3 to C5, a minimum of 30+30 MHz and a maximum of 50+50 MHz of paired spectrum are available for licensing throughout Canada. As well, up to 25 MHz of unpaired spectrum (including the respective 5 MHz restricted band) is available for licensing in most areas across the nation.
C1.2 Block Sizes
197. Industry Canada consulted on the optimal block sizes to be used in the licensing of the 2500 MHz band. Comments were sought with respect to both the paired and unpaired spectrum blocks.
Summary of comments
198. Block sizes in the paired spectrum. With respect to the paired spectrum (2500-2570 MHz and 2620-2690 MHz ), all respondents agreed that, given the amount of spectrum in the 2500 MHz band and the globally harmonized band plan, the 2500 MHz band has promising potential to facilitate the offering of high capacity broadband services to Canadians. Although respondents agreed that wide frequency blocks will be required to deliver such services, they differed in terms of what the minimum block sizes for licensing should be. Bell, Huawei, Niagara Networks, PIAC , the RABC , Rogers, SaskTel, SSi and TELUS were of the view that uniform block sizes of 5+5 MHz across all Regions would allow for more service providers to acquire spectrum while allowing bidders the flexibility to aggregate blocks into larger blocks of contiguous spectrum according to their business plans. Rogers further commented that "this approach would place a greater reliance on market forces in determining the appropriate spectrum block sizes."
199. Bell, Huawei, the RABC , SaskTel and TELUS also recommended that Industry Canada permit post-auction voluntary spectrum swapping to facilitate spectrum aggregation for efficiency, as well as to enhance the business case and service offering. Bell went one step further and proposed that Industry Canada allow voluntary swapping of spectrum prior to the final assignment of the spectrum licences.
200. Eastlink, Electro-Federation Canada (EFC),44 MTS Allstream, Shaw, QMI and Xplornet recommended that uniform block sizes of 10+10 MHz be implemented in all Regions. These parties were of the view that such block sizes represent a balance between spectral efficiency and flexibility for businesses to acquire spectrum best suited to their needs. These parties stated that block sizes of 5+5 MHz are too small and that new BRS licensees may be left with insufficient channel widths to provide competitive services.
201. Public Mobile supported a mix of 10+10 MHz and 15+15 MHz block sizes stating that this block size proposal, along with its spectrum cap proposal, would enable the entry of a minimum of two new BRS licensees and ensure that each new licensee has sufficient spectrum to launch effective LTE offerings. However, Public Mobile stated that if Industry Canada decides to implement uniform block sizes,it would support block sizes of 10+10 MHz .
202. RIM suggested that at least one block of a significant size be made available in order to “offer a class-leading high speed and high capacity network.” RIM recommended that block sizes of 30+30 MHz and 20+20 MHz be implemented in Regions A and C. Alternatively, RIM suggested combinations of20+20 MHz and 10+10 MHz blocks.
203. Table C1 summarizes the comments received with respect to block sizes in the paired spectrum.
| Number of blocks for auction and corresponding block sizes | Respondents supporting | |
|---|---|---|
| Region A and Region C (50+50 MHz ) | Region B (30+30 MHz ) | |
| 10 x (5+5 MHz ) | 6 x (5+5 MHz ) | Bell, Huawei, Niagara Networks, PIAC , the RABC , Rogers, SaskTel, SSi and TELUS |
| 5 x (10+10 MHz ) | 3 x (10+10 MHz ) | Eastlink, EFC , MTS Allstream, Public Mobile,45 Shaw, QMI and Xplornet |
| 2 x (10+10 MHz ) 2 x (15+15 MHz ) | 2 x (15+15 MHz ) | Public Mobile46 |
| 1 x (20+20 MHz ) 1 x (30+30 MHz ) | 1 x (30+30 MHz ) | RIM47 |
| 1 x (10+10 MHz ) 2 x (20+20 MHz ) | 1 x (30+30 MHz ) | RIM48 |
204. Block sizes in the unpaired spectrum. With respect to the unpaired spectrum(2570-2620 MHz ), Niagara Networks, Rogers, and SaskTel recommended that uniform blocks of 5 MHz be used. These parties cited the benefit of flexibility for service providers to aggregate blocks to form wider blocks as desired.
205. However, Bell, Huawei, MTS Allstream, QMI , the RABC , SSi , TELUS and Xplornet supported uniform blocks of 10 MHz in all Regions. Bell recommended that 5 MHz blocks not be used given that guardbands may be required to reduce problems of interference between networks. Specifically, Bell stated that “if there are small block sizes and multiple operators, the need for guardbands will compromise the efficient use of the TDD -based spectrum.” Eastlink also addressed the issue of guard bands stating that the unpaired spectrum is “subject to substantial interference such that carriers would require guard bands of at least 2 MHz to provide quality service.” Eastlink stated that this not only wastes spectrum, but also limits the capacity of both blocks. As a result, Eastlink supported an unpaired block size of 20 MHz . In addition to Eastlink, EFC , Public Mobile and Shaw were also in support of an unpaired block size of 20 MHz .
206. Respondents generally agreed that the restricted bands, 2570-2575 MHz (block B1) and 2615-2620 MHz (block B10), should be added to the adjacent assigned unpaired blocks regardless of the block size that may be determined. For example, if the block sizes are determined to be 20 MHz , then the licensee assigned to blocks B2 to B5 will also be assigned block B1. Similarly, the licensee assigned to blocks B6 to B9 will also be assigned block B10.
207. Table C2 summarizes the comments received with respect to block sizes in the unpaired spectrum.
| Number of blocks49 for auction and corresponding block sizes | Respondents supporting | |
|---|---|---|
| Region A and Region C (20 MHz )* |
Region B (0 MHz ) |
|
| *This does not include the restricted bands. | ||
| 4 x 5 MHz | Not applicable | Niagara Networks, Rogers and SaskTel |
| 2 x 10 MHz | Not applicable | Bell, Huawei, MTS Allstream, QMI , the RABC , SSi, TELUS and Xplornet |
| 1 x 20 MHz | Not applicable | Eastlink, EFC, Public Mobile and Shaw |
Discussion
208. It is recognized that the 2500 MHz band offers a substantial amount of spectrum and that it will be beneficial in meeting the rapidly rising demand for capacity to deliver broadband services.
209. As discussed in SMSE -005-11, different bidders will have different spectrum requirements.
210. Block sizes in the paired spectrum. One of the advantages of licensing the paired spectrum based on small block sizes ( i.e. 5+5 MHz ) is that service providers would have the flexibility to aggregate blocks into larger blocks of contiguous spectrum according to their business plans. However, with small block sizes, there is a possibility that some licensees may end up with only a single paired block of frequencies despite their attempt to secure multiple blocks during the 2500 MHz spectrum auction. In order to promote the delivery of efficient broadband services, the block sizes should not be so small so as to hinder a service provider's capacity to provide broadband services in the 2500 MHz band. At the same time, it is important that service providers be provided with sufficient flexibility to aggregate multiple blocks in a manner which best suits their specific business needs. It is also recognized that block sizes that are too large ( e.g. 15+15 MHz or 20+20 MHz ) may limit the number of service providers in the 2500 MHz band and stifle competition.
211. With respect to whether different block sizes should be used in different geographic regions, it is noted that uniform block sizes across all licence areas would enable service providers to acquire multiple blocks across multiple licence areas. The imposition of different block sizes in different regions may unnecessarily complicate the bidding process and make it difficult for bidders to aggregate spectrum.
212. In light of the above, block sizes of 10+10 MHz will be used in the paired spectrum in all licence areas to best balance such requirements. Licensees may aggregate multiple blocks up to the permissible spectrum aggregation limit set out later in this document (see Section C2).
213. Block sizes in the unpaired spectrum. As with paired spectrum, the implementation of small block sizes in the unpaired spectrum has the advantage of providing bidders the flexibility to form larger blocks in the unpaired spectrum. However, as discussed in SMSE -005-11, a guardband between unsynchronized networks in the unpaired spectrum is typically necessary to mitigate interference between networks of different service providers. The use of guardbands will, in turn, diminish the amount of spectrum used to carry actual traffic, thus limiting the ability of a service provider to provide broadband services. One possible solution to ensure the effective use of the unpaired spectrum, while avoiding the use of frequency guardbands, would be to synchronize the affected networks; however, this could result in several technical limitations as outlined in DGSO-001-10.
214. In order to promote the efficient use of the spectrum and the delivery of broadband services to Canadians, Industry Canada has decided that the unpaired spectrum should be licensed in large blocks of 20 MHz . Therefore, taking into account the restricted bands (5 MHz each) between the paired and unpaired spectrum, the unpaired spectrum would be licensed based on 25 MHz blocks ( i.e. 2570-2595 MHz and 2595-2620 MHz ).
215. With respect to the issue of spectrum transferability of auctioned licences, it will be addressed in the upcoming 2500 MHz consultation on licensing issues.
Decisions related to block sizes in the 2500 MHz band
C1-1: In the bands 2500-2570 MHz and 2620-2690 MHz (“the paired spectrum”), the spectrum is to be licensed in blocks of 10+10 MHz in all licence areas.
C1-2: In the band 2570-2620 MHz (“the unpaired spectrum”), the spectrum is to be licensed in blocks of 25 MHz (which includes the respective 5 MHz restricted band50) in all licence areas.
C1.3 Tier Sizes
216. The Service Areas for Competitive Licensing51 document outlines the general service areas that have been used in the past for auctions and other licensing processes. The defined geographic areas have been categorized under “service area tiers” that are based on Statistics Canada‘s Census Divisions and Subdivisions. The definition of the service areas within these tiers and accompanying maps and data tables are available on Industry Canada's website.
217. As different wireless services and applications are best suited to different service areas, four tiers of service areas have been established (see Annex 4).
218. In DGSO-001-10, Industry Canada announced that Tier 3 service areas would be used for the conversion of eligible MCS and MDS authorizations to BRS spectrum licences, except where two MCS licensees (Inukshuk and SSi) hold spectrum licences with geographic service areas in northern Canada that are equivalent to Tier 4 service areas.
219. In SMSE -005-11, Industry Canada sought comments on which tier size or combination of tier sizes should be used for licensing spectrum in the 2500 MHz band.
Summary of comments
220. There was no support from any respondent to license the 2500 MHz band using Tier 1 service areas.
221. MTS Allstream, Public Mobile, QMI , Shaw and TELUS recommended that, where possible, Tier 2 should be used to license the 2500 MHz band. Most of these parties recognized that it may not be practical to license all areas using Tier 2 areas given that existing BRS licences were generally issued on a Tier 3 basis (Tier 4 in Yukon, Northwest Territories and Nunavut). They therefore supported Tier 2 areas where possible and Tier 3 areas otherwise. Specifically, MTS Allstream and QMI submitted that Tier 2 licensing would provide more flexibility for bidders and greater efficiencies because of the larger service coverage areas. In addition, they stated that Tier 2 licensing would result in fewer coordination issues between neighbouring licensees. QMI further commented that Tier 2 licensing would reduce the number of roaming agreements required between neighbours. As a fall back position, TELUS also indicated support for licensing the 2500 MHz band using only Tier 3 areas.
222. Bell, Eastlink, the RABC , Rogers and SaskTel opposed the use of Tier 2 areas and supported licensing using Tier 3 areas. They acknowledged that larger areas (such as Tier 2) would result in fewer coordination issues; however, they stated that, given the propagation properties of the 2500 MHz band, coordination issues are more manageable than with lower frequency bands. They submitted that the 2500 MHz band is not envisioned to be used for wide area coverage of sparsely populated areas. As well, they commented that larger licence areas could result in licensees acquiring larger areas than they intended to deploy, thus denying such spectrum to other bidders.
223. SSi stated that Tier 4 areas would allow for a greater number of licensees to acquire spectrum. Xplornet proposed that Industry Canada adopt Tier 4 service areas and unbundle rural service areas from urban areas (“rural unbundling”). This would involve the remapping of certain Tier 4 areas so that the area boundaries are in line with census subdivisions. Xplornet submitted that this would require that 47 of the existing Tier 4 areas be redefined. Bell, however, argued that the implementation of Tier 4 areas could unnecessarily increase the complexity of the licensing process and cost to both Industry Canada and the industry. In addition, SaskTel considered that Tier 4 areas could result in fractured service areas and discontinuous coverage. QMI commented that this also could result in inefficient service deployment. MTS Allstream submitted that Tier 4 areas and the unbundling of rural areas would result in gaps with unissued licences.
224. Niagara Networks proposed that Tier 2 licensing be implemented in the “returned spectrum” (blocks A9-A14 and A9'-A14'). For other frequency blocks, Niagara Networks proposed that Tier 3 licensing be used in areas with large to moderate population densities, together with Tier 4 in the remaining areas. Public Mobile supported a mixture of Tier 2 and Tier 3 areas. In Public Mobile's opinion, Tier 2 licence areas would be overly large and overwhelmingly rural, a situation which is not ideal for service providers that are planning to launch service in urban areas. On the other hand, the adoption of only Tier 3 areas would create a situation where it could be difficult to establish contiguous service areas. Therefore, Public Mobile submitted that “a mixed-tier spectrum plan would allow bidders to manage their business plans for specific geographic regions, and facilitate the planning and deployment of networks with a greater degree of flexibility... leading to a reasonable distribution across carriers and licensed areas....” Public Interest Advocacy Centre ( PIAC ) also supported the use of a mixture of tier sizes in order to take into account “regional differences” such that they do not “preclude competitors from entering the market or maintaining a competitive presence in any region.”
225. Although not related to the issue of tier size, SaskTel stated that changes to the tier area boundaries around Lloydminster, Saskatchewan, are worthy of further consideration by Industry Canada.
226. Table C3 summarizes the comments received related to tier sizes:
| Tier size(s) | Respondent supporting |
|---|---|
| Tier 1 | None |
| Mixture of Tier 2 and Tier 3 | MTS Allstream, Public Mobile, QMI , Shaw, and TELUS |
| Tier 3 | Bell, Eastlink, the RABC , Rogers and SaskTel |
| Tier 4 | SSi |
| Redefined Tier 4 | Xplornet |
| Mixture of different tiers | Niagara Networks, PIAC |
Discussion
227. The 2500 MHz band, which is the only globally harmonized mobile service band, is envisioned to be used in both urban and rural areas where there is a desire to increase network capacity.
228. Due to the diversity of use in the 2500 MHz band, Tier 1 and 2 licence areas are likely overly large and could potentially result in licensees acquiring larger areas than they intend to deploy, thus denying such spectrum to other bidders. With respect to small licence areas, such as Tier 4, they have the benefit of enabling rural service providers to acquire spectrum only in the specific areas of interest to them. However, Tier 4 licence areas are likely too small for the purposes of providing mobile service and could result in fragmented mobile service offerings. As well, Tier 4 licence areas could cause deployment challenges in many boundary areas. It could result in higher build-out costs and a reduced consumer experience. Furthermore, frequency coordination with neighbouring service providers at the edge of the licence area (to avoid interference) could create uncertainty, delays and additional costs for service providers and may lead to unserved geographic areas.
229. In comparison with Tier 2, Tier 3 service areas provide an opportunity for more service providers to focus on key areas of interest to acquire spectrum, while providing service providers with the ability to aggregate smaller service areas into larger areas. In addition, the use of Tier 3 service areas will provide more opportunities for rural service providers to acquire rural licence areas without having to compete with larger service providers for areas in the urban core of Tier 2 service areas. At the same time, the use of Tier 3 licence areas will result in fewer coordination issues than would the use of Tier 4 service areas.
230. In light of the above and in the interest of balancing the requirement to provide services in both urban and rural areas, all spectrum blocks (paired and unpaired) available for auction shall be licensed on a Tier 3 basis, with the exception of the Northwest Territories, Yukon and Nunavut, where Tier 4 licence areas will be used. The Tier 4 areas in the three Territories are sufficiently large such that they would not lead to the coordination issues as discussed above. This decision is aligned with the 2010 decision (see DGSO-001-10) to generally migrate MCS and MDS licensees into Tier 3 areas, with the exception of Tier 4 in the three Territories.
231. The suggestion to redefine the Tier 4 licence areas is not being undertaken for this licensing process (see discussion in Section C3).
232. With respect to the tier area boundaries around Lloydminster, Saskatchewan, this will be addressed in the upcoming 700 and 2500 MHz consultations on licensing issues.
Decisions related to Tier sizes
C1-3: In the Yukon, Northwest Territories and Nunavut, the licensing of 2500 MHz spectrum shall be based on Tier 4 service areas.
C1-4: In all other areas, the licensing of 2500 MHz spectrum shall be based on Tier 3 service areas.
233. Table C4 summarizes the spectrum blocks, tiers and the number of licences available for the 2500 MHz auction. Annex 7 provides a more detailed table of the spectrum availability for all licence areas.
| Block | Frequency | Pairing | MHz | Tier | Licences | |
|---|---|---|---|---|---|---|
| *Includes 5 MHz restricted band. | ||||||
| Region A - excluding the Territories | A5 to A6/ A5' to A6' | 2520-2530 MHz / 2640-2650 MHz | paired | 10+10 MHz | 3 | 40 |
| A7 to A8/ A7' to A8' | 2530-2540 MHz / 2650-2660 MHz | paired | 10+10 MHz | 3 | 40 | |
| A9 to A10/ A9' to A10' | 2540-2550 MHz / 2660-2670 MHz | paired | 10+10 MHz | 3 | 40 | |
| A11 to A12/ A11' to A12' | 2550-2560 MHz / 2670-2680 MHz | paired | 10+10 MHz | 3 | 40 | |
| A13 to A14/ A13' to A14' | 2560-2570 MHz / 2680-2690 MHz | paired | 10+10 MHz | 3 | 40 | |
| B6 to B10 | 2595-2620 MHz * | unpaired | 25 MHz * | 3 | 40 | |
| Region A -Yukon, Northwest Territories & Nunavut | A5 to A6A5' to A6' | 2520-2530 MHz / 2640-2650 MHz | paired | 10+10 MHz | 4 | 3 |
| A7 to A8/ A7' to A8' | 2530-2540 MHz / 2650-2660 MHz | paired | 10+10 MHz | 4 | 3 | |
| A9 to A10/ A9' to A10' | 2540-2550 MHz / 2660-2670 MHz | paired | 10+10 MHz | 4 | 3 | |
| A11 to A12/ A11' to A12' | 2550-2560 MHz / 2670-2680 MHz | paired | 10+10 MHz | 4 | 3 | |
| A13 to A14/ A13' to A14' | 2560-2570 MHz / 2680-2690 MHz | paired | 10+10 MHz | 4 | 3 | |
| B6 to B10 | 2595-2620 MHz * | unpaired | 25 MHz * | 4 | 3 | |
| Region B | A9 to A10/ A9' to A10' | 2540-2550 MHz / 2660-2670 MHz | paired | 10+10 MHz | 3 | 16 |
| A11 to A12/ A11' to A12' | 2550-2560 MHz / 2670-2680 MHz | paired | 10+10 MHz | 3 | 16 | |
| A13 to A14/ A13' to A14' | 2560-2570 MHz / 2680-2690 MHz | paired | 10+10 MHz | 3 | 16 | |
| Region C | A1 to A2/ A1' to A2' | 2500-2510 MHz / 2620-2630 MHz | paired | 10+10 MHz | 3 | 2 |
| A3 to A4/ A3' to A4' | 2510-2520 MHz / 2630-2640 MHz | paired | 10+10 MHz | 3 | 2 | |
| A9 to A10/ A9' to A10' | 2540-2550 MHz / 2660-2670 MHz | paired | 10+10 MHz | 3 | 2 | |
| A11 to A12/ A11' to A12' | 2550-2560 MHz / 2670-2680 MHz | paired | 10+10 MHz | 3 | 2 | |
| A13 to A14/ A13' to A14' | 2560-2570 MHz / 2680-2690 MHz | paired | 10+10 MHz | 3 | 2 | |
| B1 to B5 | 2570-2595 MHz * | unpaired | 25 MHz * | 3 | 2 | |
Footnotes
- 42 See DGSO-001-10: Decisions on the Transition to Broadband Radio Service (BRS) in the Band 2500-2690 MHz and Consultation on Changes Related to the Band Plan.
- 43 Refer to Appendix Ain 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 theB and 2500-2690 MHz (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09992.html); Region A — areas where the MDS spectrum has not been licensed; Region B — areas where both the MCS and MDS spectrum have been licensed; Region C — Manitoba.
- 44 Electro-Federation Canada (EFC) submitted its comment through the RABC .
- 45 Public Mobile’s alternate proposal
- 46 Public Mobile’s primary proposal
- 47 RIM’s primary proposal
- 48 RIM’s alternate proposal
- 49 The restricted bands(2570-2575 MHz and 2615-2620 MHz ) are not included.
- 50 Operation in the restricted bands (2570-2575 MHz and 2615-2620 MHz ) is specified in 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 .
- 51 Refer to ServiceAreas for Competitive Licensing at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf01627.html.