Consultation on a Licensing Framework for Broadband Radio Service (BRS)

October 2012

1. Intent

1. Through the release of this paper, Industry Canada is hereby initiating a consultation on a licensing framework for Broadband Radio Service (BRS) in the band 2500-2690 MHz (also known as the 2500 MHz band) as announced in Canada Gazette notice SMSE -002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band.^{Footnote 1}

2. In February 2011, through Canada Gazette notice 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,^{Footnote 2} Industry Canada announced its decisions related to the adoption of a new band plan, as well as the mapping of Multipoint Communications Systems (MCS) and Multipoint Distribution Service (MDS) licensees into the new BRS band plan.

3. In SMSE-005-11, Industry Canada also initiated the consultation on a policy and technical framework to license spectrum in the 2500 MHz band. The subsequent decisions were announced in the SMSE-002-12^{Footnote 3} document.

4. Industry Canada is now seeking comments on licensing considerations related to auction format, rules and processes, as well as on conditions of licence for spectrum in the 2500 MHz band. Although many of the proposals in this consultation are similar to those presented in the April 2012 Consultation on a Licensing Framework for Mobile Broadband Services (MBS) — 700 MHz Band,^{Footnote 4} the two consultations will involve separate considerations and decisions. The inclusion of similar proposals herein should not be taken as an indication of a decision or direction taken by Industry Canada.

2. Background

5. 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.

6. In developing a licensing framework for BRS in the 2500 MHz band, Industry Canada will be guided by the objectives stated in section 7 of the Telecommunications Act, the policy objective stated in the Spectrum Policy Framework for Canada (SPFC)^{Footnote 5} 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 6} 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.

7. Industry Canada will also be guided by the general approaches and processes outlined in the Framework for Spectrum Auctions in Canada (FSAC),^{Footnote 7} revised in March 2011.

3. General

8. In SMSE-002-12, Industry Canada announced specific policy decisions related to the licensing process for spectrum in the 2500 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 3 service areas (58 service areas), except in the Northwest Territories, Yukon and Nunavut, where Tier 4 service areas (three service areas) will be used;
in the bands 2500-2570 MHz and 2620-2690 MHz ("the paired spectrum"), the spectrum will be licensed in blocks of 10 + 10 MHz in each available service area;
in the band 2570-2620 MHz ("the unpaired spectrum"), the spectrum will be licensed in blocks of 25 MHz (which includes the respective 5 MHz restricted band)^{Footnote 8} in each available service area;
a total of 318 licences will be offered;
excluding the restricted bands (2570-2575 MHz and 2615-2620 MHz), a spectrum aggregation limit of 40 MHz will apply in each service area of the 2500 MHz band, except in the Northwest Territories, Yukon and Nunavut where there is no limit. This amount represents the total spectrum licence holdings in the 2500 MHz band, including both paired and unpaired spectrum, by each licensee in each licence area;
in service areas where an existing licensee already has spectrum licence holdings in excess of the spectrum aggregation limit, the licensee will not be required to divest any such holdings in order to meet the spectrum aggregation limit. However, such licensees will not be eligible to bid for additional licences in the auction process or otherwise obtain additional licences in service areas where the limit has been met or exceeded.

9. For a complete list of policy decisions related to the 2500 MHz band, refer to Section C of SMSE-002-12.^{Footnote 9}

3.1 Spectrum Available for Licensing

10. As per SMSE-005-11, the following general band plan was adopted for BRS in the 2500 MHz band (see Figure 1). Also shown in the figure is the 5 MHz block grid used for referencing purposes in SMSE-005-11.

Figure 1 — General band plan for BRS in the band 2500-2690 MHz

* Note: The policy with respect to operation in the restricted bands (2570-2575 MHz and 2615-2620 MHz) is specified in SMSE-005-11.

11. Figures 2 to 5 and Annex A show the amount of spectrum available in the three Regions^{Footnote 10} of Canada:

Figure 2 — Map of Regions

Figure 3 — Spectrum available for licensing in Region A

Figure 4 — Spectrum available for licensing in Region B

Figure 5 — Spectrum available for licensing in Region C

12. As shown in figures 3 to 5, a minimum of 30 + 30 MHz and a maximum of 50 + 50 MHz of paired spectrum are available for licensing throughout Canada. As well, 25 MHz of unpaired spectrum (including the respective 5 MHz restricted band) is available for licensing in most areas across the nation.

3.2 Radio Frequency Block Arrangement Description

13. In accordance with SMSE-002-12, Policy and Technical Framework, Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band,

the band 2500-2570 MHz, which is paired with the band 2620-2690 MHz, is divided into seven 10 + 10 MHz paired blocks with a frequency separation of 120 MHz; and
the band 2570-2620 MHz is divided into two 25 MHz unpaired blocks. The unpaired blocks will each include a 5 MHz restricted band separating the paired and unpaired spectrum (i.e. 2570-2575 MHz and 2615-2620 MHz).

14. The BRS 2500 MHz band plan and block sizes are shown in Table 1 and Figure 6 respectively.

Table 1 — BRS Frequency Blocks
Block	Frequencies	Total Spectrum	Pairing
A / A’	2500-2510 MHz / 2620-2630 MHz	10 + 10 MHz	paired
B / B’	2510-2520 MHz / 2630-2640 MHz	10 + 10 MHz	paired
C / C’	2520-2530 MHz / 2640-2650 MHz	10 + 10 MHz	paired
D / D’	2530-2540 MHz / 2650-2660 MHz	10 + 10 MHz	paired
E / E’	2540-2550 MHz / 2660-2670 MHz	10 + 10 MHz	paired
F / F’	2550-2560 MHz / 2670-2680 MHz	10 + 10 MHz	paired
G / G’	2560-2570 MHz / 2680-2690 MHz	10 + 10 MHz	paired
H	2570-2595 MHz	25 MHz (includes 5 MHz restricted band)	unpaired
I	2595-2620 MHz	25 MHz (includes 5 MHz restricted band)	unpaired

Figure 6 — BRS Frequency Block Plan

*Restricted Band

Note: The policy with respect to operation in the restricted bands 2570-2575 MHz and 2615-2620 MHz is specified in SMSE-005-11.

15. Various channel sizes may be used within the blocks depending on technology choices of the licensee, subject to the applicable Standard Radio System Plan (SRSP) and/or Radio Standards Specifications (RSS).

16. For Frequency Division Duplex (FDD) operations in the paired spectrum, the subscriber-to-base links are to be deployed in the band 2500-2570 MHz, and the base-to-subscriber links are to be deployed in the band 2620-2690 MHz.

17. The operation of non-FDD systems in the bands 2500-2570 MHz and 2620-2690 MHz are subject to the operation and displacement policy in SMSE-005-11.

18. Time Division Duplex (TDD) systems may operate in the band 2570-2620 MHz.

3.3 Restricted Bands

19. As per SMSE-005-11, Industry Canada decided to impose 5 MHz restricted bands, 2570-2575 MHz and 2615-2620 MHz, to mitigate interference between systems operating in the paired and unpaired spectrum.

20. TDD operations by licensees within the restricted bands 2570-2575 MHz and 2615-2620 MHz are permitted on a no-protection, no-interference basis with respect to FDD operations in the paired spectrum.

21. The technical rules for operation within the 2500 MHz band restricted bands will be provided in an SRSP and/or RSS.

3.4 Existing Licensees in the 2500 MHz Band

22. Site-specific fixed service licensees currently operate in the 2500 MHz band in certain areas of British Columbia and Quebec. These existing licences are subject to transition policies set-out in SMSE-005-11^{Footnote 11} and are listed in Annex B. The site-specific licences in Alberta and the Canadian Radio television Telecommunications Commission (CRTC) licence-exempt broadcasting stations discussed in SMSE-005-11 are no longer in operation.

23. Site-specific licences in Manitoba are grandfathered, as stated in DGSO-001-10,^{Footnote 12} and may continue to operate in the 2500 MHz band. These existing licensees are protected from harmful interference from BRS. An updated list of the grandfathered licences in Manitoba is provided in Annex C.

24. Furthermore, there may be MCS and BRS licensees that operate in the 2500 MHz band and that have yet to transition their systems to the new band plan. These systems are subject to the transition policies set out in SMSE-005-11.^{Footnote 13} Up-to-date lists of MCS and BRS licensees are available through Industry Canada’s Spectrum Licence Browser at http://sd.ic.gc.ca/pls/engdoc_anon/speclic_browser$.startup.

3.5 Services in Adjacent Bands

25. In accordance with the Canadian Table of Frequency Allocations,^{Footnote 14} authorized stations may be operating the following services within the adjacent frequency bands:

mobile-satellite service (MSS) downlink operations in the band 2483.5-2500 MHz;
radio astronomy service^{Footnote 15} (RAS) in the band 2690-2700 MHz;
ground-based radar operations in the band 2700-2900 MHz for aeronautical radionavigation services or meteorological purposes; and
shore-based radar operations in the band 2850-2900 MHz for maritime radionavigation services.

26. In light of the above, BRS operations in the 2500 MHz band will be required to coexist and may need to be coordinated with the operations of authorized stations in the aforementioned bands.

27. Further details will be provided in a SRSP and/or RSS, which will be developed in consultation with industry.

3.6 Tier Sizes

28. 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. Table 2 summarizes the frequency blocks, tiers and the number of licences available for the 2500 MHz auction. Annex A provides a more detailed table of spectrum availability for all licence areas.

Table 2 — Block size, tiers and number of licences available for the 2500 MHz auction in each Region
	Block	Frequency	Pairing	MHz	Tier	Licences
Region A (excluding the Northwest Territories, Yukon and Nunavut)	C/C’	2520-2530 MHz / 2640-2650 MHz	paired	10 + 10	3	40
	D/D’	2530-2540 MHz / 2650-2660 MHz	paired	10 + 10	3	40
	E/E’	2540-2550 MHz / 2660-2670 MHz	paired	10 + 10	3	40
	F/F’	2550-2560 MHz / 2670-2680 MHz	paired	10 + 10	3	40
	G/G’	2560-2570 MHz / 2680-2690 MHz	paired	10 + 10	3	40
	I	2595-2620 MHz ^{Table note *}	unpaired	25 ^{Table note *}	3	40
Region A (the Northwest Territories, Yukon and Nunavut only)	C/C’	2520-2530 MHz / 2640-2650 MHz	paired	10 + 10	4	3
	D/D’	2530-2540 MHz / 2650-2660 MHz	paired	10 + 10	4	3
	E/E’	2540-2550 MHz / 2660-2670 MHz	paired	10 + 10	4	3
	F/F’	2550-2560 MHz / 2670-2680 MHz	paired	10 + 10	4	3
	G/G’	2560-2570 MHz / 2680-2690 MHz	paired	10 + 10	4	3
	I	2595-2620 MHz ^{Table note *}	unpaired	25 ^{Table note *}	4	3
Region B	E/E’	2540-2550 MHz / 2660-2670 MHz	paired	10 + 10	3	16
	F/F’	2550-2560 MHz / 2670-2680 MHz	paired	10 + 10	3	16
	G/G’	2560-2570 MHz / 2680-2690 MHz	paired	10 + 10	3	16
Region C	A/A’	2500-2510 MHz / 2620-2630 MHz	paired	10 + 10	3	2
	B/B’	2510-2520 MHz / 2630-2640 MHz	paired	10 + 10	3	2
	E/E’	2540-2550 MHz / 2660-2670 MHz	paired	10 + 10	3	2
	F/F’	2550-2560 MHz / 2670-2680 MHz	paired	10 + 10	3	2
	G/G’	2560-2570 MHz / 2680-2690 MHz	paired	10 + 10	3	2
	H	2570-2595 MHz ^{Table note *}	unpaired	25 ^{Table note *}	3	2

3.7 Service Area for Lloydminster (Alberta/Saskatchewan)

29. In SMSE-002-12, Industry Canada indicated that Tier 3 and Tier 4 service areas will be used to license the frequency blocks for the auction of 2500 MHz spectrum licences. It also stated that the tier boundaries around Lloydminster, Saskatchewan, would be discussed in the 700 MHz and 2500 MHz consultations on licensing issues.

30. The issue concerning Lloydminster was raised by SaskTel in its response to SMSE-005-11 in which it proposed that tier area boundaries around Lloydminster warrant further consideration by Industry Canada.

31. 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, have been established to accommodate various wireless services, applications and frequency bands. The definition of the service areas within these tiers and accompanying maps and data tables are available on Industry Canada’s website.^{Footnote 16}

32. The smallest tier service areas roll up to fit within the larger tier areas. Some minor deviations from provincial borders exist. These deviations were made around provincial borders to avoid having a service area boundary cut through a population centre, thereby minimizing potential interference problems.

33. For example, a large portion of Lloydminster, which falls in both Saskatchewan and Alberta, has been captured by service area 4-129 Lloydminster (Alberta). Consequently, the majority of the City of Lloydminster is included in service area 4-129 Lloydminster (Alberta) and respectively in the Tier 3 service area 3-44 (Edmonton) and Tier 2 service area 2-12 (Alberta). As the smaller service area 4-129 is part of the Alberta tier, the effect is that the majority of the City of Lloydminster is currently part of the Alberta service area in tiers 2, 3 and 4.

34. Industry Canada considers that the rationale for the deviations around provincial borders continues to be valid and that any changes which would affect the licensing consistency of existing and future licensing processes are not warranted. Therefore, it is proposed that the current boundaries surrounding service area 4-129 (and thus tiers 3-44 and 2-12) continue to apply.

3-1 Industry Canada is seeking comments on whether the service area boundary for licences in the 2500 MHz band should deviate from the provincial boundary around the City of Lloydminster (Alberta/Saskatchewan).

Note: Annex I provides a summary of all proposals for consideration.

4. Auction Format and Rules

35. The auction format should be simple, fair and transparent for bidders; one that leads to an efficient assignment of spectrum. In the selection of an auction format and related rules, consideration is given to the characteristics of the spectrum being auctioned, for example, the quantity and size of the blocks, their geographic characteristics, as well as the similarities and complementarities that may exist among the blocks.

4.1 Auction Format

36. Industry Canada used the Simultaneous Multiple Round Ascending (SMRA) auction format in its first auction in 1999 and in four of its six subsequent spectrum auctions.^{Footnote 17} The SMRA auction format has been used in spectrum auctions in many countries for more than 15 years. Countries that have used this format in recent spectrum auctions include Italy, Germany, Mexico, Spain, the United States, as well as the Special Administrative Region of Hong Kong.

37. In an SMRA auction, all licences are auctioned simultaneously over a series of rounds. In each round, bids are submitted on individual licences at the announced prices. At the end of each round, a standing high bidder is identified for each licence. The standing high bidder is then committed to the licence and cannot withdraw its bid without the possibility of incurring a penalty. The standing high bidder is released from its commitment when outbid by another bidder. When a licence receives at least one bid, the price for the licence increases in the next round. As the prices rise gradually over multiple rounds, bidders gather information about how the other auction participants value the licences. This price discovery helps to reduce a bidder’s uncertainty regarding the value of the licences. Bidders are able to respond to these changes in prices accordingly, shifting their bids to licences that continue to be consistent with their business objectives. Activity rules are in place to compel active bidding and encourage truthful bids throughout the auction, that is, bidding that is consistent with how they truly value the licences. The auction ends when a round passes in which no new bids are received on any licences.

38. The SMRA auction format is a well understood, effective approach to assigning spectrum licences and it remains popular to date; however, it does have some weaknesses. The most notable weakness is the exposure risk, that is, the possibility that a bidder will win some but not all of the licences needed for its business case and may be left stranded with licences that cannot be used as effectively. In an SMRA auction format, bidding is for individual licences only, leaving bidders which seek to aggregate blocks of licences that are contiguous and/or across multiple service areas, vulnerable to the exposure risk.

39. In an SMRA auction, in order to mitigate the exposure risk, bidders are able to withdraw their standing high bids, switching to other desired licences or withdrawing from the auction altogether. However, they may be subject to withdrawal penalties, which are in place to discourage bidders from bidding frivolously and then withdrawing their bids.

40. Advancements in auction theory and design have led to the development of new auction formats and rules. Industry Canada has been examining these new developments in consideration of the auction format and rules for the 700 MHz and 2500 MHz auctions. One of these advancements is the combinatorial clock auction (CCA) format, which is a variation of the SMRA format in that all licences are auctioned at the same time over multiple rounds. Similar to the SMRA format, the CCA format provides a simple bidding process for participants, including a price discovery stage; however, instead of bidding on individual licences, bidders express their demand for a package of licences at the prevailing prices. The use of package bidding eliminates the exposure risk inherent in the SMRA format. Furthermore, unlike the SMRA format, the CCA format does not require the identification of a "standing high bidder" that is held responsible for individual licences at the end of each round, which makes it easier for bidders to move to substitute licences in response to price changes.

4.2 Proposed Auction Format for the 2500 MHz Auction

41. Industry Canada proposes to implement a CCA format for the 2500 MHz auction. Pricing and activity rules are established to encourage truthful bidding throughout the auction (see Section 4.2.3). Industry Canada proposes to limit the amount of information disclosed regarding bidding activity during the auction process (see Section 4.2.4). Further information on the proposed CCA format and auction rules for the 2500 MHz auction can be found in Annex D.

42. CCAs have been used in several countries since 2008, including the United Kingdom, the Netherlands, Denmark, Austria and Switzerland, and are planned for upcoming digital dividend auctions in Australia, Ireland and the United Kingdom. Industry Canada is also proposing to use the CCA format for the upcoming 700 MHz auction.

4.2.1 Proposed Auction Attributes

43. One of the key attributes of the CCA is the use of package bidding wherein for each round, the bidder specifies the set of licences that it would like, at the announced prices, and submits a single bid for the package. The package bid is treated as an all-or-nothing bid and the package is awarded in its entirety, or not at all. Bidding on a package of licences eliminates the possibility that a bidder will win some but not all the licences needed for its business case and may be left stranded with licences that cannot be used as effectively, that is, there is no exposure risk. This is particularly important given the regional nature of the licences to be auctioned and the potential for strong and varied complementarities across these regional licences.

Generic Licences

44. A category is a single block of spectrum or a grouping of similar (generic) blocks of spectrum that is made available for auction. A category in a given service area is referred to as a product.

45. Generic licences are blocks of spectrum that are sufficiently similar and comparable in value such that they can be offered in a single category in each service area. The use of generic licences simplifies the bidding process, as it reduces the possible number of combinations on which bids may be placed.

46. For the upcoming 2500 MHz auction, Industry Canada is proposing two categories of licences, paired and unpaired. For the paired categories, Industry Canada is proposing that the following licences be treated as generic in service areas of the respective regions:

Region A: blocks C/C’ to G/G’ (five paired generic licences);
Region B: blocks E/E’ to G/G’ (three paired generic licences); and
Region C: blocks A/A’ to B/B’ and E/E’ to G/G’ (five paired generic licences).

47. In both Region A and Region C, the unpaired category would consist of one unpaired licence, either H or I, in each service area. The unpaired blocks are not available in Region B.

48. The generic licence categories were determined based on the anticipated substitutability of the blocks. In creating the generic licence categories, Industry Canada considered the frequency location in the band, the block size, and possible technology and interference constraints.

49. In Region C, some of the products are currently subject to the operations of grandfathered licensees: in Winnipeg (paired blocks A/A’, paired blocks E/E’ to G/G’ and unpaired block H) and in Brandon (paired blocks E/E’ to F/F’ and unpaired block H). It is unclear whether the operations of the grandfathered licensees affect the value of these licences sufficiently to warrant separate categories. Industry Canada is therefore proposing to auction the five paired blocks as generic licences, with bidders able to express their preferences for specific licences in the assignment stage of the auction.

50. Consequently, there would be two categories for the 43 service areas of Region A, one which includes five paired generic licences and one that includes one unpaired licence. For the 16 service areas in Region B, there would be one category that includes three paired generic licences. For the two service areas in Region C, there would be two categories, one that includes five paired generic licences and one that includes a single unpaired licence. In total, two categories and 106 products are proposed for the 2500 MHz auction. Table 3 illustrates the categories and products that are proposed for the 2500 MHz auction.

Table 3 — Proposed product configuration for 2500 MHz auction
	Paired							Unpaired		Products
	A/A’	B/B’	C/C’	D/D’	E/E’	F/F’	G/G’	H	I
Note: Products available for auction are indicated by an "X."
Region A (43 service areas)			X	X	X	X	X		X	86 (2 × 43)
Region B (16 service areas)					X	X	X			16 (1 × 16)
Region C (2 service areas)	X	X			X	X	X	X		4 (2 × 2)
Total										106

51. It is recognized that contiguous spectrum within a service area is preferable to non-contiguous spectrum in terms of technological efficiency. It is also Industry Canada’s understanding that any user equipment operating in the 2500 MHz paired spectrum will be able to operate across the complete 2500 MHz paired spectrum, and so acquiring contiguous blocks within a service area may be more important than acquiring the same block(s) across multiple service areas.

52. For those products comprised of multiple generic licences, bidders will be able to specify the number of contiguous licences that they would like to acquire as part of their package. Industry Canada is proposing that winners of multiple licences receive contiguous licences within a given product, with the opportunity to express their preference for specific contiguous frequencies in the assignment stage of the auction. This guarantee of contiguity may impact the ability of some bidders to obtain the same blocks of spectrum across a collection of service areas.

4.2.2 Overview of the CCA Process

53. There are typically two stages in the CCA process: the allocation stage, and if there are generic licences, the assignment stage. The process is shown in Figure D1 of Annex D.

54. In the allocation stage, the number of spectrum licences that a bidder wins in each service area is determined. It consists of the following:

clock rounds, a series of rounds where, in each round, bidders submit a bid for a package of licences (some of which may be generic) in response to prices announced by Industry Canada. The clock rounds continue until there is no excess demand for any of the licences. This is the price discovery stage of the auction.
a supplementary round, a single round where bidders have the opportunity to make additional bids for packages of licences at prices that are decided by the bidder, but subject to limits that are based on their clock round bids.

55. The assignment stage is where winning bidders have the opportunity to make additional bids to express their preferences for particular frequency assignments within the generic licences that they have won.

56. The assignment stage will consist of a sequence of rounds. Each assignment round will determine the specific frequencies to be assigned to winners of generic licences in one or more of the paired products. Assignment rounds will not be required for any of the products containing unpaired licences, as there is only one unpaired licence in each of those products.

57. Given the large number of service areas, Industry Canada is proposing to run product-by-product assignment rounds in descending order of the populations of the associated service areas, conducting a separate assignment round for each product, where necessary. This process will enable bidders to know which specific frequencies they have won in the most populated service areas before they participate in the assignment rounds for the adjacent, less populated service areas. However, two or more products will be aggregated into a single assignment round if all of the following criteria are met: the products are in the same region (i.e. Region A, Region B or Region C); their service areas form a contiguous geographic area; and the winners, and the number of generic licences they have won are sufficiently similar across service areas, according to predefined criteria. This may result in a separate assignment round for each service area. Industry Canada welcomes suggestions for alternative methods of conducting the assignment stage, including suggestions for ways to minimize the number of rounds in the assignment stage.

58. In the event that more than one licence in a product remains unallocated at the end of the allocation stage, Industry Canada is proposing to retain the unallocated licences as a contiguous block within a product. This proposal may affect the specific frequency options available in the assignment rounds and the possibility of obtaining the same blocks of spectrum across service areas, as the combination of the block of unallocated licences and the licences won by the bidder(s) must be feasible. Industry Canada is not proposing to specify the exact blocks that it will retain as unallocated, but rather to let the bidding in the assignment stage determine which specific frequency blocks remain unallocated. This will provide more flexibility for bidders to express their preference for a particular assignment. This is consistent with other spectrum auctions held internationally; for example, Austria, Denmark and Switzerland specified that unallocated licences in the 2.6 GHz band would be contiguous in the upper end of the band.

59. As announced in SMSE-002-12, a spectrum aggregation limit of 40 MHz in each service area of the 2500 MHz band, with the exception of the Northwest Territories, Yukon and Nunavut, will apply to all bidders. The limit includes both the paired and unpaired spectrum available for auction and any 2500 MHz spectrum licence holdings that a bidder may already have, but excludes the restricted bands at 2570-2575 MHz and 2615-2620 MHz. Therefore, bidders will not be permitted to bid on additional licences in a service area which would result in their spectrum aggregation limit being exceeded.

60. The use of the CCA format and, in particular, the use of generic licences, is expected to contribute to a reduction in the length of the auction, in comparison with the length of an SMRA auction. As well, Industry Canada would use activity-based increments in the clock rounds, where bid increments for a product reflect the level of demand. This is also expected to shorten the auction duration, as round prices would increase more quickly for products with higher demand.

4.2.3 Proposed CCA Rules

61. The proposed activity and pricing rules for the 2500 MHz auction are designed to encourage truthful bidding and to promote price discovery throughout the auction. These are described below and further elaborated in Annex D.

Activity Rules

62. In previous SMRA auctions, Industry Canada used an eligibility-based activity rule where each licence was assigned a specific number of eligibility points. Bidders were then required to bid actively on a certain number of eligibility points in order to maintain their ability to bid in subsequent rounds. In general, the required level of activity increased through the different stages of the auction, from a minimum of 70% in the first stage to 100% in the final stage. This allowed bidders the flexibility to switch their bids to other licences in response to price changes, thereby mitigating the exposure risk.

63. With the use of an eligibility-based activity rule, a bidder could respond to price increases by bidding on fewer licences, which would result in a decrease of eligibility points in subsequent rounds. As a general rule, eligibility points cannot be increased once they have been reduced. Consequently, a bidder was not able to switch its bid to a package that was larger in terms of eligibility points but relatively less expensive.

64. In the 2500 MHz auction, Industry Canada is proposing activity rules in the allocation stage that will afford bidders the flexibility to bid on their most preferred packages. The proposed rules will also ensure that bids in the supplementary round are consistent with the bidders’ preferences expressed in the clock rounds.

Revealed Preference/Eligibility Point Hybrid Activity Rule

65. In the clock rounds, Industry Canada proposes to use a hybrid activity rule, which includes an eligibility points-based activity rule in conjunction with a revealed preference activity rule. A revealed preference activity rule constrains bids based on the bids submitted in previous rounds.

66. To begin, each licence will be assigned a specific number of eligibility points (see Annex D, Section 7). In every clock round, bidders will be required to bid on 100% of their eligibility if they wish to maintain the same level of eligibility in subsequent rounds. When a bidder reduces its bid to a smaller package, then its eligibility for the next round will be reduced accordingly.

67. In addition, a revealed preference rule is proposed, which will allow bidders to exceed their eligibility in order to bid on packages that have become comparatively less expensive relative to every prior round where the bidder reduced its eligibility. This will afford bidders greater flexibility to fully express their preferences in the clock rounds of the auction, ensuring that the activity rules do not prevent a bidder from bidding on its most preferred package. Further information on the proposed activity rules in the clock rounds can be found in Annex D, Section 8. As well, a detailed example of the proposed revealed preference activity rule is included in Annex E and an algebraic description of the revealed preference rule is included in Annex F.

Revealed Preference Limit

68. In the supplementary round, Industry Canada is proposing to limit bids based on revealed preference with respect to the bids that a bidder submitted in the clock rounds. The rule, referred to as the “revealed preference limit,” encourages truthful bidding throughout the auction, not just in its latter stages. Further information on the proposed revealed preference limit in the supplementary round can be found in Annex D, Section 10.

69. All valid bids submitted in the clock rounds and the supplementary round are binding bids, and are included in determining the winning packages and base prices after the end of the supplementary round. Bids cannot be withdrawn. Bid withdrawals were permitted in the SMRA auction format to mitigate the exposure risk inherent in the auction design. Bid withdrawals are not necessary in the CCA format because bidding is for a package of licences and bidders do not risk acquiring only some of the licences that they require.

Pricing Rules

70. In the CCA format, prices are determined at the end of the allocation stage and after each assignment round. Base prices are calculated at the end of the allocation stage following the supplementary round, taking into consideration all valid bids from the clock rounds and supplementary round. Assignment prices are determined after each assignment round, in which bidders that have won generic licences in the allocation stage bid for specific assignments. The assignment prices are incremental to the base prices. The final price to be paid by a bidder will be determined following the assignment stage, and is equal to the bidder’s base price plus the sum of all associated assignment prices. If the sum of a bidder's assignment prices is zero, then the final price will be equal to the base price determined at the end of the allocation stage.

71. Two common pricing rule options for calculating the prices to be paid by winning bidders are a first-price rule and a second- price rule. A first-price rule requires winning bidders to pay the full amount of their winning bid. A second-price rule requires each winning bidder to pay an amount that is sufficient to ensure that no other bidder, or group of bidders, was prepared to pay more than the winning bidder for the licence(s) in question.

72. Under a first-price rule, the bidder has a strong incentive to bid less than its true value, which can lead to inefficient outcomes. A second-price rule promotes a more efficient outcome by increasing the incentive for bidders to bid their true value. Bidders, knowing that they will only be required to pay the minimum amount necessary to win their package, will have the incentive to bid truthfully during the entire auction.

73. Industry Canada is proposing to use a second-price rule to determine the base price to be paid by winning bidders for their packages of generic licences won at the end of the allocation stage, and to determine assignment prices to be paid by winning bidders for their specific licence assignments.

74. There are several approaches to determine second prices in a CCA. Industry Canada proposes to apply bidder-optimal core prices and to use the "nearest Vickrey" approach, which is one of most common approaches used for CCAs. Further information on the proposed pricing rules is provided in Annex G.

4.2.4 Information Disclosure

75. In previous SMRA auctions, Industry Canada made all information regarding the bidding activity of all bidders available after each round. Although this transparency facilitated price discovery, it also increased the potential for anti-competitive behaviour. Industry Canada proposes to use anonymous bidding during the 2500 MHz auction. After each clock round, bidders would be provided with information regarding their own bidding activity in the previous round and their eligibility for the next round. In addition, bidders will be informed of the aggregate demand for each product from the previous round and the price of each product for the next round. The aggregate demand and price information from the end of each clock round would also be made available on Industry Canada’s website.

76. With the use of anonymous bidding, enough information will still be provided to permit price discovery, allowing bidders to make informed decisions regarding their bidding strategies. Bidders will be able to focus on their valuations for the licences, the level of aggregate demand and the prices rather than on the bidding behaviour of their individual competitors. Thus, the potential for anti-competitive behaviour is minimized and the bidding process is simplified.

77. At the end of the allocation stage, each bidder will be informed of its own winning package and the associated base price to be paid. All bidders will be informed of the number of winning bidders and the number of licences within each product that have been allocated.

78. After each assignment round, each participating bidder will be informed of the specific licences that it was assigned and the associated assignment price.

79. At the end of the assignment stage, Industry Canada will inform winning bidders of the final price they will have to pay for the licences they have won.

80. Industry Canada is proposing to make the following information publicly available following the conclusion of the auction:

the list of winning bidders, licences won and final prices to be paid;
the bid submitted by each bidder in every clock round, including the bidder’s identity;
the supplementary bids submitted by each bidder, including the bidder’s identity; and
the assignment bids submitted by each bidder, including the bidder’s identity.

81. Full disclosure of all bidding information at the end of the auction will allow all interested parties to verify the results of the auction, facilitating greater transparency regarding the winner and price determination.

82. Consistent with past practice, the identity of applicants and qualified bidders will be made available to the public prior to the auction, so that all bidders have knowledge of the identity of the other bidders.

4.2.5 Summary

83. The proposed CCA format has many advantages. The exposure risk is eliminated, anti-competitive behaviour is reduced, substitution among similar licences is enhanced and the duration of the auction will likely be reduced. In addition, the proposed activity rules, which combine both eligibility points and revealed preference, will provide flexibility for bidders to bid on their preferred packages as prices rise. These aspects create a more straightforward bidding process for participants and improve the effectiveness of the auction process.

4-1 Industry Canada is seeking comments on its proposal to use the CCA format, as well as the general attributes outlined above, including:

(a) the products available for auction, e.g. the categorization of generic licences;
(b) the use of product-specific stages in the assignment round, ordered by population;
(c) the combined eligibility point and revealed preference activity rule in the clock rounds, and the revealed preference limit in the supplementary round;
(d) the use of a second-price rule;
(e) the information to be disclosed during and post-auction;
(f) the guarantee of contiguity for generic licences won within a product; and
(g) the contiguity of blocks retained by Industry Canada.

5. Bidder Participation — Affiliated and Associated Entities

84. In SMSE-002-12, Decision C2-3, Industry Canada indicated that it would consult the public with a view to revising the rules on associated and affiliated entities to provide improved flexibility and clarity.

85. It has been noted that several Canadian service providers have entered into different forms of network and spectrum sharing arrangements, driven by the investment and spectrum efficiencies that such arrangements can bring, particularly in rural areas. However, in previous auctions, parties entering into agreements and arrangements that were deemed to be either affiliated or associated entities were only permitted to participate in the auction process through a single bidder.

86. In support of the stated policy objectives of competition investment, and in light of the high demand for capacity by customers (driven by the use of smart phones and tablets), the high cost of network deployment, particularly in rural areas, as well as the spectrum and network efficiencies that can be achieved through such arrangements, Industry Canada recognizes that changes to the rules should be considered.

87. The intent of the proposed changes is to provide increased flexibility in the treatment of a certain subset of associated entities such that they could be allowed to participate in the auction as separate entities, and have the spectrum aggregation limit apply separately to them, as long as this would not have an adverse impact on the integrity of the auction, or the intent of the spectrum aggregation limit.

88. Proposed Definition of Associated Entities: As a basis for participating in the 2500 MHz auction, Industry Canada proposes that associated entities be defined as follows:

Any entities that enter into any partnerships, joint ventures, agreements to merge, consortia or any arrangements, agreements or understandings of any kind, either explicit or implicit, relating to the acquisition or use of any spectrum in the 2500 MHz band will be treated as Associated Entities. Typical roaming and tower sharing agreements would not cause entities to be deemed associated.

89. Depending on the nature of the association, it may not preclude the ability of the entities to participate separately in the auction or to have the spectrum aggregation limit applied individually.

90. Auction Integrity and Transparency: In order to ensure auction integrity and transparency, all entities wishing to participate in the auction process will be required to disclose in writing, as part of their application, the names of affiliated and associated entities. It is proposed that a narrative also be submitted, describing all key elements and the nature of the affiliation or association in relation to the acquisition of the spectrum licences being auctioned and the post-auction relationships of the said entities. It is proposed that this would include arrangements with another potential bidder that relate in any way to the future use of the 2500 MHz spectrum directly or indirectly.

91. Some examples of arrangements that would require disclosure include, but are not limited to, agreements to establish a joint network using spectrum licences acquired by each of the entities and agreements with respect to a joint backhaul network. It is also proposed that agreements such as significant joint equipment purchases be disclosed. Typical roaming and tower sharing agreements and other agreements, such as the purchase of backhaul capacity, would not cause entities to be deemed associated entities and hence need not be disclosed.

92. The submitted narrative would be made available to other bidders and to the public on Industry Canada’s website prior to the auction in order to ensure transparency of the licensing process.

93. Eligibility to participate separately in the auction: In the past, associated entities were not permitted to participate in an auction separately. It is now proposed that associated entities could be permitted to apply to Industry Canada to participate in the auction separately. The submitted narrative would be assessed to determine whether permitting both entities to participate separately would negatively impact the integrity of the auction process. The auction integrity would be best assured by the transparent disclosure of the relationships between bidders participating in the auction. Industry Canada may request additional documents. Any information considered by the applicant to be confidential should be properly marked as such. If Industry Canada deems it necessary to disclose any information marked as confidential, the applicant would be consulted prior to release.

94. Eligibility to have aggregation limits apply to associated entities separately: It is proposed that in addition to the above, associated entities could request that the spectrum aggregation limit apply individually. To obtain this approval, entities would be required to demonstrate that they intend to compete separately in the applicable licence area and continue to function as competitors to a level satisfactory to Industry Canada. In making this determination, Industry Canada would consider all relevant factors. Depending on the nature of the agreement, documentation may be required that sets out the details of the association, including copies of all arrangements or agreements, for example, agreements related to network architecture and spectrum use and documents related to corporate decision making, marketing and customer information, sales and financing. Assessment criteria may include, but would not be limited to, consideration of the degree to which the entities would offer branded services, pricing and device selection that are unique from each other. For additional information on the application of the spectrum aggregation limit for associated entities, refer to the condition of licence entitled "Spectrum Aggregation Limit" in Section 6 of this document.

95. Bidders are reminded that the provisions of the Competition Act apply independently of, and in addition to, the proposed policy.

96. Associated entities wishing to participate in the auction separately would be required to submit their application at least 30 days in advance of the final application deadline to participate in the auction. This requirement would provide Industry Canada with the additional time necessary to assess the association between the entities and decide on the associated entities’ ability to participate in the auction separately, and have the aggregation limit apply individually, if so requested. Should the request be denied, only one of the associated entities will be eligible to apply to participate in the auction.

97. Definition of Affiliated Entities: It is proposed that the definition of affiliated entities remain essentially as it was for the AWS auction, as follows:

An affiliated entity is defined as a person who controls the entity, or who is controlled by the entity or by any person who controls the entity. "Control" means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, agreement or arrangement, the ownership of a body corporate or otherwise. Control in fact is the ongoing power or ability, whether exercised or not, to determine or decide the strategic decision-making activities of an enterprise, or to manage or run the day to-day operations of an enterprise.

98. Please note that all entities participating in the auction will be subject to the same prohibition of collusion rules, as stated below in Section 5.1.

5-1 Industry Canada is seeking comments on its proposed changes to the definition and rules related to associated entities. Specifically, comments are sought on:

(a) the types of agreements that should be captured under the definition of associated entities;
(b) the amount of information to be disclosed to the public prior to the auction;
(c) the provision that typical roaming and tower sharing be specifically excluded from the revised definition of associated entities and whether other types of agreements such as the purchase of backhaul capacity should be deemed excluded;
(d) the proposal that entities that are deemed associated entities may apply to be treated as separate entities for participation in the auction;
(e) the proposal that associated entities may request to have the spectrum aggregation limit apply to them separately, based on an analysis of their association and of whether they intend to compete in the same licence service area;
(f) the criteria to be considered in determining whether the entities are competing; and
(g) the proposal that no changes be made to the affiliated entities rule.

5.1 Prohibition of Collusion

99. As in previous auctions, in order to ensure the integrity of the bidding process, all applicants will be prohibited from cooperating, collaborating, discussing or negotiating agreements with other bidders regarding the licences being auctioned or the post-auction market structure. This prohibition will be in effect from the deadline to submit applications to participate in the auction until the deadline for the final payment of winning bids.

100. The rules regarding prohibition of collusion used for the AWS auction were essentially stated as follows:

Applicants are prohibited from cooperating, collaborating, discussing or negotiating settlement agreements with competitors, relating to the licences being auctioned or relating to the post auction market structure, until the deadline for the final payment on winning bids.

The application form to participate in the auction will include a declaration that the applicant will be required to sign certifying that the applicant has not entered into and will not enter into any agreements or arrangements of any kind with any competitor regarding the amount to be bid, bidding strategies or the particular licence(s) on which the applicant or competitors will or will not bid. For the purposes of this certification, "competitor" means any entity, other than the applicant and/or its affiliates or associated entities, which could potentially be a bidder in this auction based on its qualifications, abilities or experience.

101. In order to maintain the integrity of the auction, bidders are prohibited from signalling either publicly or privately, their bidding intentions or post- auction market structure related to spectrum in the 2500 MHz band, while the auction is ongoing. This would include comments or any communication with or via the media. An example would be making a public announcement regarding which licences the company intends to bid on or its rollout intentions.

102. Given that Industry Canada is proposing to allow the participation of some associated entities as separate bidders in this auction process, the prohibition of collusion rules are proposed as follows:

From the date of application until the deadline for the final payment on winning bids, each applicant is prohibited from cooperating, collaborating, discussing, negotiating or entering into agreements, arrangements or understandings with any competitors regarding the licences being auctioned, bids or bidding strategies in the auction, or the post auction market structure. Each applicant is also prohibited from signalling its bidding intentions, either publicly or privately, from the application deadline until the end of the bidding process.

The application form to participate in the auction will include a declaration that the applicant will be required to sign certifying that the applicant has not entered into any agreements, arrangements or understandings of any kind with any competitor, other than those disclosed to Industry Canada, regarding the spectrum licences being auctioned or the post-auction market structure. The applicant must also certify that it will not discuss during the auction, any agreements, arrangements or understandings of any kind with any competitor, including its disclosed associated entities, regarding the spectrum licences being auctioned or the post-auction market structure. For the purposes of this certification, "competitor" means any entity, other than the applicant and/or its affiliates, which could potentially be a bidder in this auction based on its qualifications, abilities or experience.

Should a bidder fail to comply with this prohibition, it may be subject to disqualification from the auction and/or forfeiture penalties.

5-2 Industry Canada is seeking comments on the rules prohibiting collusion that would apply to bidders in the 2500 MHz auction.

6. Conditions of Licence for Spectrum Licences to be Auctioned in the 2500 MHz Band

103. Industry Canada proposes that the following conditions apply to licences issued through the auction process for spectrum in the 2500 MHz band. Some updated conditions of licence are being proposed for existing 2500 MHz licences in order to harmonize them with licences to be auctioned (see Section 7).

104. It should be noted that licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations. For example, the Minister continues to have the power to amend the terms and conditions of spectrum licences pursuant to paragraph 5(1)(b) of the Radiocommunication Act. The Minister may do so for a variety of reasons, including furtherance of the policy objectives related to the band. Such action would normally only be undertaken after consultation.

105. Licence Term: Traditionally, spectrum licences auctioned by Industry Canada have been issued for a 10- year licence term. This duration was deemed to provide enough certainty in the marketplace to secure the investments necessary to acquire spectrum and build related networks. The revised Framework for Spectrum Auctions in Canada, published in March 2011, states that Industry Canada is now adopting a flexible approach in determining licence terms (up to 20 years) based on the specific spectrum being offered and subject to a public consultation preceding the specific auction or renewal process.

106. This decision was based on the recognition that licence terms in excess of 10 years would create greater incentive for financial institutions to invest in the telecommunications industry and for the industry itself to further invest in the development of network infrastructure, technologies and innovation.

107. The 2500 MHz band has the potential to facilitate the offering of high-capacity broadband services to Canadians. Given that the use of this band for mobile services is globally harmonized, there is little risk that there will be any usage changes to this spectrum in the foreseeable future. It is also unlikely that any developments in technology would result in a change to another use that is incompatible with mobile broadband.

108. In light of the above, Industry Canada is proposing that auctioned spectrum licences in the 2500 MHz band have a licence term of 20 years. The proposed condition of licence is as follows:

The term of this licence is 20 years. At the end of this term, the licensee 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.

6-1 Industry Canada is seeking comments on its proposal to issue spectrum licences in the 2500 MHz band with a 20-year licence term.

109. Spectrum Aggregation Limit: Where competitive measures have been put in place, such as a limitation on the amount of spectrum held by a licensee, a condition of licence to that effect is typically applied to the licence in question. With respect to spectrum in the 2500 MHz band, the competitive measures announced in SMSE-002-12are:

Decision C2-1: With the exception of licensees in the Northwest Territories, Yukon and Nunavut, all licensees are subject to a spectrum aggregation limit of 40 MHz in the 2500 MHz band, excluding the restricted bands at 2570-2575 MHz and 2615-2620 MHz. This amount represents the total spectrum licence holdings, including both paired and unpaired spectrum, by each licensee in each licence area.
Decision C2-2: The spectrum aggregation limit shall remain in effect in the 2500 MHz band for a period of five years after the issuance of licences. Therefore, no transfer of licences or issuance of new licences will be authorized if it allows a licensee to exceed the spectrum aggregation limit during this period.

110. The wording for the proposed condition of licence is as follows:

The licensee must comply with the spectrum aggregation limit as follows:

A limit of 40 MHz in the 2500 MHz band, excluding the restricted bands at 2570-2575 MHz and 2615-2620 MHz, applies to all licensees, with the exception of the Northwest Territories, Yukon and Nunavut service areas, where there is no limit.

The spectrum aggregation limit put in place for the 2500 MHz auction will continue for five years from the date of the licence issuance. Therefore, no transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum aggregation limit during this period. Any change in ownership or control granting a right or interest to another licensee in this band may be considered as licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Industry for any change that would have a material effect on its compliance with this spectrum aggregation limit. Such a request must be made in advance of any proposed transactions within its knowledge.

111. In certain areas, existing 2500 MHz licensees hold licences in excess of the spectrum aggregation limit of 40 MHz in the 2500 MHz band. Taking into consideration previous decisions related to the requirement to return spectrum during the MCS / MDS transition to BRS , existing licensees would not be required to divest additional 2500 MHz spectrum in these areas. As stated in SMSE-002-12, Decision C2-4, these licensees would not be permitted to acquire additional spectrum in those areas where the aggregation limit has been met or exceeded, but will be permitted to transfer existing 2500 MHz spectrum licence holdings thereby reducing their spectrum licence holdings prior to the auction in order to be eligible to participate. Information regarding licensees planning to transfer existing spectrum licence holdings in order to increase their eligibility to bid in the related licence areas is provided in Section 8.1, Application to Participate.

112. If the proposal in Section 5 is adopted, associated entities requesting that the spectrum aggregation limit be applied individually rather than jointly, would be required to demonstrate to the satisfaction of Industry Canada that they will be competing in the applicable service area.

113. Where licensees establish an agreement to share spectrum such that another entity has control over the use of the spectrum, a subordinate licence is required. This requirement applies to all spectrum sharing arrangements. Subordinate licences may not count towards the licensee’s aggregation limit if the licensees demonstrate to the satisfaction of Industry Canada that they meet the criteria with respect to competing in the applicable service area. For further information on the application of the spectrum aggregation limit as it relates to associated entities and subordinate licences, see Section 5 of this document.

114. At any time, at the request of Industry Canada, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

6-2 Industry Canada is seeking comments on the proposed wording of the condition of licence related to the spectrum aggregation limit.

115. Licence Transferability and Divisibility: In general, licences obtained through an auction may be transferred in whole or in part (either in geographic area or in bandwidth) to a third party, subject to the conditions stated on the licence and other applicable regulatory requirements.

116. As noted above, where competitive measures have been put in place, either to limit the amount of spectrum held by a licensee (spectrum aggregation limit), or to restrict the eligibility of access to a specific spectrum band (set-aside), the ability to transfer and divide the licence in question will be similarly restricted. With respect to spectrum in the 2500 MHz band, transfers are not permitted where they will result in a licensee exceeding the spectrum aggregation limit. However, Industry Canada may consider requests to exchange spectrum licences under certain conditions.

117. Industry Canada is proposing the following wording for the condition of licence on transferability and divisibility:

The licensee may apply, in writing, to transfer its licence in whole or in part (divisibility), in both the bandwidth and geographic dimensions in accordance with Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time. Licensees may apply to use a subordinate licensing process.

Industry Canada’s approval is required for each proposed subordinate licence or transfer, whether the transfer is in whole or in part. Industry Canada may define a minimum bandwidth and/or geographic dimension (such as the grid cell) for the proposed transfer.

Subordinate licences may not count towards the licensee’s aggregation limit if the subordinate licensee demonstrates to the satisfaction of Industry Canada that the relevant licensees meet the criteria with respect to competing in the post auction market (see condition of licence regarding spectrum aggregation limits).

The transferor(s) must provide an attestation and other supporting documentation demonstrating that all conditions, technical or otherwise, of the licence have been met. The transferee(s) must provide an attestation and other supporting documentation demonstrating that it meets the eligibility criteria, including documentation related to associates and affiliates demonstrating that the transfer is in accordance with any spectrum aggregation limit.

Industry Canada may consider requests from licensees to exchange spectrum blocks in the same geographic area provided that the exchange does not result in the spectrum aggregation limit being exceeded or an increase in spectrum licence holdings for existing licensees that already exceed the aggregation limit. Industry Canada may grant such requests based on the merits of the proposal.

The transferee must satisfy all applicable conditions of licence, including general deployment requirements.

118. Licensees must apply to Industry Canada for the issuance of subordinate licences prior to the implementation of any spectrum sharing agreements or any agreement that provides for another party to operate the licensee’s spectrum. For further information on these requirements, refer to Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time. These requirements are subject to revision and amendment for a variety of reasons including furtherance of the policy objectives related to the 2500 MHz band.

119. Generally, a subordinate licence will count towards the spectrum aggregation limit in a service area in addition to licences held directly and those held by associates or affiliates. However, the proposed transferee may apply to have the subordinate licence(s) excluded from the calculation of its spectrum licence holdings for the purposes of the spectrum aggregation limit, if it can demonstrate as part of its application that it will compete with its associated entities in the service area. For further information on the application of the spectrum aggregation limit as it relates to associated entities that hold subordinate licences, see Section 5 of this document.

120. Licence transfers may also be subject to the provisions of the Competition Act.

6-3 Industry Canada is seeking comments on the proposed wording of the condition of licence related to transferability and divisibility.

121. Eligibility: Generally, spectrum licences contain an eligibility condition of licence, which reads as follows: The licensee must comply on an ongoing basis with the eligibility criteria for a radiocommunication carrier, including compliance with subsection 10(2) of the Radiocommunication Regulations. The licensee must notify the Minister of Industry of any change that would have a material effect on its eligibility. Such notification must be made in advance for any proposed transaction within its knowledge. For further information, refer to Industry Canada’s Client Procedures Circular CPC-2-0-15, Canadian Ownership and Control, as amended from time to time.

122. On June 29, 2012, the Jobs, Growth and Long-term Prosperity Act (Bill C-38) received royal assent, whereby amendments were made to the Telecommunications Act, to lift the foreign investment restrictions for telecommunications companies that hold less than a 10-percent share of the total Canadian telecommunications market. Amendments are reflected in section 16 of the published version of the Telecommunications Act.

123. Industry Canada will update Client Procedures Circular CPC-2-0-15, Canadian Ownership and Control, in order to clarify the effects on spectrum licence holders operating under the Radiocommunication Act and Radiocommunication Regulations.

124. The proposed wording for the condition of licence for spectrum in the 2500 MHz band now refers to the "applicable" subsection of the Regulations, as follows:

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

For further information, refer to Client Procedures Circular CPC-2-0-15, Canadian Ownership and Control, as amended from time to time.

6-4 Industry Canada is seeking comments on the proposed wording of the condition of licence related to eligibility criteria.

125. Treatment of Existing Spectrum Users: For information regarding existing licensees in the 2500 MHz band, see Section 3.4 of this document.

126. The proposed wording for the condition of licence is as follows:

The licensee must comply with all displacement and/or transition policies set out in SMSE-005-11,^{Footnote 18} Decisions on the 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 addition, the licensee must not cause harmful interference to the grandfathered stations in Manitoba, as per SMSE-005-11.

6-5 Industry Canada is seeking comments on the proposed wording of the condition of licence related to the treatment of existing spectrum users.

127. Radio Station Installations: Radiocommunication and broadcasting services are important for all Canadians and are used daily by the public, safety and security organizations, government, wireless service providers, broadcasters, utilities and businesses. In order for radiocommunication and broadcasting services to work, antenna systems, including masts, towers and other supporting structures, are required. There is a certain measure of flexibility in the placement of antenna systems, which is constrained to some degree by the need to achieve acceptable coverage for the service area, the availability of sites, technical limitations and safety. In exercising its mandate, Industry Canada believes that it is important that antenna systems be deployed in a manner that considers the local surroundings.

128. Section 5 of the Radiocommunication Act states that the Minister of Industry may, taking into account all matters that the Minister considers relevant for ensuring the orderly development and efficient operation of radiocommunication in Canada, issue radio authorizations and approve each site on which radio apparatus, including antenna systems, may be located. Furthermore, the Minister may approve the erection of all masts, towers and other antenna-supporting structures. Accordingly, proponents must follow the procedures outlined in Client Procedures Circular CPC-2-0-03, Radiocommunication and Broadcasting Antenna Systems, when installing or modifying an antenna system. Also, the installation of an antenna system or the operation of a currently existing antenna system that is not in accordance with these procedures may result in its alteration or removal and other sanctions against the operator as per the Radiocommunication Act.

129. Industry Canada is therefore proposing the following wording for this condition of licence:

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

6-6 Industry Canada is seeking comments on the proposed wording of the condition of licence related to radio station installations.

130. Provision of Technical Information: Spectrum licences are issued for a specific geographic area and, as such, associated technical information for each radiocommunication installation is not required for the issuance of a spectrum licence. However, technical information associated with radiocommunication installations covered by the spectrum licence is required by Industry Canada to carry out certain spectrum management responsibilities. To provide this capability, Industry Canada requires information to maintain an up-to-date technical database of radiocommunication installations. Industry Canada therefore proposes that such a condition of licence be applied:

131. The proposed wording for the condition of licence is as follows:

When Industry Canada requests technical information on a particular station or network, the licensee must provide the information in accordance with the definitions, criteria, frequency and timelines specified. For further information, refer to Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time.

6-7 Industry Canada is seeking comments on the proposed wording of the condition of licence related to the provision of technical information.

132. Compliance with Legislation, Regulation and Other Obligations: Licensees must comply with the requirements set out for use of the radio frequency spectrum in general and for the specific frequency band being licensed. In some cases, these requirements are legislative. The proposed wording for the condition of licence is as follows:

The licensee is subject to, and must comply with, the Radiocommunication Act, the Radiocommunication Regulations and the International Telecommunication Union’s Radio Regulations pertaining to its licensed radio frequency bands. The licence is issued on condition that the certifications made in relation to this licence are all true and complete in every respect. 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.

6-8 Industry Canada is seeking comments on the proposed wording of the condition of licence related to compliance with legislation, regulation and other obligations.

133. Technical Considerations, and International and Domestic Coordination: Industry Canada will work with the Radio Advisory Board of Canada to develop applicable Radio Standards Specifications (RSS) and Standard Radio System Plans (SRSP) in relation to the 2500 MHz band. Spectrum licence holders are also subject to applicable international coordination agreements and arrangements between Canada, the United States and other foreign administrations.

134. Industry Canada proposes the following wording for this condition of licence:

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 with 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 to furnish all necessary technical data for each relevant site.

6-9 Industry Canada is seeking comments on the proposed wording of the condition of licence related to technical considerations, and international and domestic coordination.

135. Lawful Intercept: Certain spectrum licences contain a lawful intercept condition of licence that requires the licensee to maintain interception capabilities so that information can be provided when required by a warrant. The current condition of licence reads as follows:

"Licensees using spectrum for circuit-switched 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 of Industry to forbear from enforcing certain assistance capability requirements for a limited period. The Minister, following consultation with Public Safety Canada, 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 to the requirement can be expected."

136. Industry Canada is proposing changes to the lawful intercept condition of licence in order to bring the wording in line with current technologies. The proposed change is to remove the text "circuit-switched voice telephony" from the lawful intercept condition, as networks are no longer limited to circuit switched technology. This proposed change does not affect existing spectrum licences issued under other licensing processes; with the exception of existing BRS licences (see Section 7). Forbearance may be granted where Industry Canada deems it warranted.

137. The condition of licence refers to standards for lawful interception, entitled the Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications. Public Safety Canada is currently responsible for these standards, which were last revised in 1995. Public Safety Canada has informed Industry Canada that it is proposing modifications to the standards. Industry Canada is proposing to simply refer to the requirement to provide for and maintain lawful interception capabilities, in accordance with the enforcement standards in effect at the time of licence issuance and as amended from time to time. For further information on proposed changes to the Solicitor General’s Enforcement Standards, please contact Public Safety Canada via the General Enquiries line at 1-800-830-3118.

138. In consideration of the above, the proposed wording of the condition of licence is as follows:

The licensee, operating as a service provider using an interconnected radio-based transmission facility for compensation, must provide for and maintain lawful interception capabilities as authorized by law and in accordance with the Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications, as amended from time to time.

6-10 Industry Canada is seeking comments on the proposed wording of the condition of licence related to lawful intercept requirements.

139. Research and Development: Currently, many long-term licences are subject to a condition of licence which requires licensees to invest a percentage of their adjusted gross revenues in research and development (R&D).^{Footnote 19} In 2009, Industry Canada initiated DGRB -001-09, Consultation on Revisions to the Framework for Spectrum Auctions in Canada, in which comments were sought on the continued need for the R&D condition of licence. The resultant decision paper^{Footnote 20} stated that Industry Canada’s decision with regard to the R&D condition of licence would be the subject of a separate paper to be issued at a later date. In addition, the Consultation on Transition to Broadband Radio Service (BRS) in the Band 2500-2690 MHz proposed that conditions of licence for BRS licences be consistent with existing licences for similar services (e.g. Cellular, Personal Communication Services and Advanced Wireless Services). Therefore, until such a time as a decision is released, Industry Canada proposes that the R&D condition of licence apply to licences in the 2500 MHz band as stated below, but may be amended during the licence term.

140. The proposed wording of this condition of licence is as follows:

The licensee must invest, as a minimum, 2 percent of its adjusted gross revenues resulting from its operations in this spectrum, averaged over the term of the licence, in eligible research and development activities related to telecommunications. Eligible research and development activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act. Adjusted gross revenues are defined as total service revenues, less inter-carrier payments, bad debts, third party commissions, and provincial and goods and services taxes collected. Businesses with less than $5 million in annual gross operating revenues are exempt from research and development expenditure requirements, except where they have affiliations with licensees that hold other licences with the research and development condition of licence and where the total annual gross revenues of the affiliated licensees are greater than $5 million.

To facilitate compliance with this condition of licence, the licensee should consult Industry Canada’s Guidelines for Compliance with the Radio Authorization Condition of Licence Relating to Research and Development (GL-03) .

6-11 Industry Canada is seeking comments on the proposed condition of licence related to the research and development requirement.

141. General Deployment Requirement: In accordance with SMSE-002-12, a general deployment requirement will apply to licensees in the 2500 MHz band. Decision C2-7 states that: A general rollout obligation applicable to all 2500 MHz licences will continue to apply. Industry Canada will consult on the details of the general deployment requirement (e.g. population coverage required and time frame).

142. This condition will apply to all licences issued through this process, regardless of the amount of spectrum that licensees hold. The objective of this general rollout requirement is to ensure that the 2500 MHz spectrum is deployed in a timely manner. As well, such a condition will serve to deter the acquisition of spectrum licences by speculators and those whose intent is to prevent access to the spectrum by their competitors.

143. Similar conditions of licence have been applied to previously auctioned spectrum licences in order to encourage the deployment of systems and to dissuade speculative spectrum acquisition. The intent is to encourage either the deployment of spectrum or the transfer of the spectrum licence where another entity may have a use for it. Prior to the AWS auction, deployment was required to 50% of the population in the licence area or to a level acceptable to Industry Canada. In the AWS auction, different levels were set for each licence area based on the population of the major urban centres for that particular licence area. It is proposed that the AWS levels be used as deployment requirements for the 2500 MHz licences. It is further proposed that these levels be required within 10 years of the licence issuance to allow market forces to determine the best pace of deployment, while providing an opportunity to intervene if the spectrum is left unused for an extended period of time.

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

145. The proposed wording of the condition of licence is as follows:

Licensees will be required to demonstrate to the Minister of Industry that their spectrum has been put to use, as specified in the table below, within 10 years of the initial issuance of the licence.

Table 4 — Proposed General Deployment Requirements
Tier 3	Service Area Name	Minimum Population Coverage^{Table note *}
3-01	Newfoundland and Labrador	30%
3-02	Prince Edward Island	30%
3-03	Mainland Nova Scotia	40%
3-04	Cape Breton	30%
3-05	Southern New Brunswick	50%
3-06	Western New Brunswick	30%
3-07	Eastern New Brunswick	30%
3-08	Bas du fleuve / Gaspésie	15%
3-09	Québec	50%
3-10	Chicoutimi-Jonquière	40%
3-11	Eastern Townships	30%
3-12	Trois-Rivières	30%
3-13	Montréal	50%
3-14	Upper Outaouais	10%
3-15	Ottawa / Outaouais	50%
3-16	Pembroke	15%
3-17	Abitibi	30%
3-18	Cornwall	50%
3-19	Brockville	40%
3-20	Kingston	50%
3-21	Belleville	40%
3-22	Cobourg	30%
3-23	Peterborough	50%
3-24	Huntsville	30%
3-25	Toronto	50%
3-26	Barrie	30%
3-27	Guelph / Kitchener	50%
3-28	Listowel / Goderich / Stratford	15%
3-29	Niagara-St. Catharines	50%
3-30	London / Woodstock / St. Thomas	50%
3-31	Chatham	50%
3-32	Windsor / Leamington	50%
3-33	Strathroy	50%
3-34	North Bay	40%
3-35	Sault Ste. Marie	50%
3-36	Sudbury	50%
3-37	Kirkland Lake	30%
3-38	Thunder Bay	40%
3-39	Winnipeg	50%
3-40	Brandon	20%
3-41	Regina	40%
3-42	Moose Jaw	25%
3-43	Saskatoon	40%
3-44	Edmonton	50%
3-45	Medicine Hat / Brooks	30%
3-46	Lethbridge	40%
3-47	Calgary	50%
3-48	Red Deer	25%
3-49	Grande Prairie	25%
3-50	Kootenays	15%
3-51	Okanagan / Columbia	40%
3-52	Vancouver	50%
3-53	Victoria	50%
3-54	Nanaimo	40%
3-55	Courtenay	50%
3-56	Thompson / Cariboo	40%
3-57	Prince George	40%
3-58	Dawson Creek	30%
4-170	Yukon	20%
4-171	Nunavut	20%
4-172	Northwest Territories	20%

6-12 Industry Canada is seeking comments on the application of the general deployment condition of licence as stated above. Specifically, comments are sought on:

(a) the population coverage, as specified in Table 4, for each licence service area; and
(b) the proposed time frame.

146. Mandatory Antenna Tower and Site Sharing: Industry Canada proposed changes to the mandatory antenna tower and site sharing conditions of licence through a separate process announced in Canada Gazette notice DGSO-001-12.^{Footnote 21} The related decisions will be announced separately. The proposed wording of the condition of licence is as follows:

Licensees must comply with the mandatory antenna tower and site sharing requirements set out in 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, as amended from time to time.

6-13 Industry Canada is seeking comments only on the proposed wording of the condition of licence related to mandatory antenna tower and site sharing.

147. Mandatory Roaming: Industry Canada proposed changes to the mandatory roaming condition of licence through a separate process announced in Canada Gazette notice DGSO-001-12.^{Footnote 22} The related decisions, including the applicability of the mandatory roaming condition to the 2500 MHz band, will be announced separately. If the condition is applied, the proposed wording is as follows:

The licensee must comply with the mandatory roaming requirements set out in 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, as amended from time to time.

6-14 Industry Canada is seeking comments only on the proposed wording of the condition of licence related to mandatory roaming.

148. Annual Report: Currently, spectrum licences include a requirement to submit an annual report to Industry Canada to provide some basic information on spectrum use and existing company reports. This provides valuable information without requiring extensive report generation by the licensees. It is proposed that this requirement apply to 2500 MHz licensees.

149. The proposed wording of the condition of licence is as follows:

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

a statement indicating continued compliance with all conditions of licence;
an update on the implementation and spectrum usage within the area covered by the licence;
existing audited financial statements with an accompanying auditor’s report;
a report of the research and development expenditures for licensees operating as radiocommunication carriers as set out in these conditions of licence. Industry Canada reserves the right to request an audited statement of research and development expenditures with an accompanying auditor’s report;
supporting financial statements where licensees are claiming an exemption based on an annual gross revenue of less than $5 million; and
a copy of any existing corporate annual report for the licensee’s fiscal year with respect to the authorization.

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 to the address below. Confidential information provided will be treated in accordance with subsection 20(1) of the Access to Information Act.

Manager, Emerging Networks
Spectrum Management Operations Branch
Industry Canada
300 Slater Street, 15th Floor
Ottawa, Ontario K1A 0C8

150. Where a licensee holds multiple licences, spectrum implementation reports should be broken down by service area. This information, including the extent of implementation and spectrum usage, is important for analyzing each licensee’s individual performance against its conditions of licence. In addition, it allows Industry Canada to monitor the effectiveness of these conditions in meeting the policy objectives regarding the band and the department’s intent that the spectrum be deployed in a timely manner for the benefit of Canadians.

6-15 Industry Canada is seeking comments on the proposed condition of licence related to the requirement for annual reporting.

7. Conditions of Licence for Existing BRS Licensees in the 2500 MHz Band

151. In DGRB-005-09, Consultation on Transition to Broadband Radio Service (BRS) in the Band 2500-2690 MHz,^{Footnote 23} Section 6, Industry Canada stated that all conditions of licence and authorizations (i.e. MCS , BRS and MDS broadcasting certificates) are subject to change following the consultation on the policy and licensing framework for the auction of available and liberated spectrum in the band 2500-2690 MHz in order to allow for licence conditions to be aligned and consistent with future licences issued in this frequency band. Therefore, effective the auction closing date, Industry Canada is proposing that certain conditions of licence for existing 2500 MHz BRS licences be updated to harmonize with the conditions of licence of auctioned licences. The remaining conditions of licence that are not updated, for example, the licence term and the deployment requirements, will remain consistent with the conditions initiated in the June 2010 Decisions on the Transition to Broadband and Radio Service (BRS) in the Band 2500-2690 MHz and Consultation on the Changes Related to the Band Plan.^{Footnote 24}

152. In DGRB -005-09, Section 9.2, Industry Canada also indicated that it will consult on a licence fee for BRS licences; the consultation may take place after the auction of available spectrum. Until such time, the existing fees will continue to apply.

153. It should be noted that licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations. For example, the Minister continues to have the power to amend the terms and conditions of spectrum licences pursuant to paragraph 5(1)(b) of the Radiocommunication Act. The Minister may do so for a variety of reasons, including furtherance of the policy objectives related to the band. Such action would normally only be undertaken after consultation.

154. Industry Canada proposes that the six following conditions of licence be modified for existing 2500 MHz BRS licensees:

155. Treatment of Existing Spectrum Users: Existing BRS licensees would be required to comply with all displacement/transition polices and the obligations to protect grandfathered stations in Manitoba. For information regarding existing licensees in the 2500 MHz band, see Section 3.4 of this document.

156. The proposed wording for the condition of licence is as follows:

The licensee must comply with all displacement and/or transition policies set out in SMSE 005-11,^{Footnote 25} Decisions on the 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 addition, the licensee must not cause harmful interference to the grandfathered stations in Manitoba as per SMSE -005-11.

7-1 Industry Canada is seeking comments on the proposed wording of the condition of licence related to the existing BRS licensees’ treatment of existing spectrum users.

157. Spectrum Aggregation Limit: The competitive measures, as outlined in Section 6 regarding the 2500 MHz spectrum auction, would be harmonized for existing BRS licensees.

158. As stated in SMSE-002-12, Decision C2-4, in areas where existing 2500 MHz BRS licensees have spectrum licence holdings in excess of the spectrum aggregation limit of 40 MHz in the 2500 MHz band, the licensee would not be required to divest any such holdings in order to meet the aggregation limit. However, such licensees will not be eligible to bid for additional licences in the auction process or otherwise obtain additional licences in licence areas where the aggregation limit has been met or exceeded. As per SMSE-002-12, Decision C2-5, licensees planning to transfer any of their existing spectrum licence holdings in order to increase their eligibility to bid in the related licence areas must do so prior to submitting an application to participate in the auction process. Information regarding licensees planning to reduce existing spectrum licence holdings in order to increase their eligibility to bid in the related licence areas is provided in Section 8.1 Application to Participate.

159. Where licensees establish an agreement to share spectrum such that another entity has control over the use of the spectrum, a subordinate licence is required. This requirement applies to all spectrum sharing arrangements. Subordinate licences may not count towards the licensee’s aggregation limit if the licensees demonstrate to the satisfaction of Industry Canada that they will be competing in the applicable service area. For further information on the application of the spectrum aggregation limit as it relates to associated entities that hold subordinate licences, see Section 5 of this document.

160. At any time, at the request of Industry Canada, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

161. Industry Canada proposes the following wording for this condition of licence:

The licensee must comply with the spectrum aggregation limit as follows:

The spectrum aggregation limit will apply for five years following the close of the 2500 MHz auction. Therefore, no transfer of licences or issuance of new licences will be authorized that allows a licensee to increase their spectrum licence holdings above the spectrum aggregation limit during this period. Any change in ownership or control granting a right or interest to another licensee in this band may be considered as a licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Industry for any change that would have a material effect on its compliance with this spectrum aggregation limit. Such a request must be made in advance of any proposed transactions within its knowledge.

7-2 Industry Canada is seeking comments on the proposed wording of the condition of licence related to the spectrum aggregation limit for existing BRS licensees.

162. Licence Transferability and Divisibility: It is proposed that this condition of licence be harmonized with that for auctioned spectrum as outlined in Section 6.

163. Industry Canada is proposing the following wording for the condition of licence on transferability and divisibility for existing BRS licensees:

Industry Canada may consider requests from licensees to exchange spectrum blocks within the same geographic area provided that the exchange does not result in the spectrum aggregation limit being exceeded or an increase in spectrum licence holdings for existing licensees already exceeding the aggregation limit. Industry Canada may grant such requests based on the merits of the proposal.

The transferee must satisfy all applicable conditions of licence, including general deployment requirements.

164. Licensees must apply to Industry Canada for the issuance of subordinate licences prior to the implementation of any spectrum sharing agreements or any agreement that provides for another party to operate the licensee’s spectrum. For further information on these requirements, refer to Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time. These requirements are subject to revision and amendment for reasons including furtherance of the policy objectives related to the 2500 MHz band.

165. Generally, a subordinate licence will count towards the spectrum aggregation limit in a service area in addition to licences held directly and those held by associates or affiliates. However, the proposed transferee may apply to have the subordinate licence(s) excluded from the calculation of its spectrum licence holdings for the purposes of the spectrum aggregation limit, if it can demonstrate as part of its application that it will compete with its associated entities in the service area. For further information on the application of the spectrum aggregation limit as it relates to associated entities that hold subordinate licences, see Section 5 of this document.

166. Licence transfers may also be subject to the provisions of the Competition Act.

7-3 Industry Canada is seeking comments on the proposed wording of the condition of licence related to transferability and divisibility for existing BRS licensees.

167. Eligibility: The same amendments to the eligibility condition of licence that are being proposed for new licensees would apply to existing BRS licensees.

For further information, refer to Client Procedures Circular CPC-2-0-15, Canadian Ownership and Control, as amended from time to time.

7-4 Industry Canada is seeking comments on the proposed wording of the condition of licence related to eligibility criteria for existing BRS licensees.

168. Technical Considerations, and International and Domestic Coordination: Industry Canada proposes that the wording for this condition of licence be harmonized with that for auctioned spectrum as outlined in Section 6. Industry Canada will work with the Radio Advisory Board of Canada to develop applicable Radio Standards Specifications (RSS) and Standard Radio System Plans (SRSP) in relation to the 2500 MHz band. Spectrum licence holders are also subject to applicable international coordination agreements and arrangements between Canada, the United States and other foreign administrations.

169. Industry Canada proposes the following wording for this condition of licence:

The licensee must comply with the obligations arising from current and future frequency coordination agreements established with 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 to furnish all necessary technical data for each relevant site.

7-5 Industry Canada is seeking comments on the proposed condition of licence related to technical considerations, and international and domestic coordination for existing BRS licensees.

170. Lawful Intercept: Industry Canada is proposing changes to the lawful intercept condition of licence for existing BRS licences in order to bring the wording in line with current technologies. The proposed change is to remove the text "circuit-switched voice telephony" from the lawful intercept condition, as networks are no longer limited to circuit-switched technology. Forbearance may be granted where Industry Canada deems it warranted. Greater detail regarding the proposed change is outlined in Section 6.

171. Industry Canada proposes the following wording for this condition of licence:

7-6 Industry Canada is seeking comments on the proposed wording of the condition of licence related to lawful intercept requirements for existing BRS licensees.

8. Auction Process

172. The following section outlines the general process for submitting an application to participate in the 2500 MHz auction, as well as the general requirements and rules that apply prior to, during and post auction.

8.1 Application to Participate

173. To participate in an auction, all applicants must submit a completed application form, along with a financial deposit, details of the applicant’s beneficial ownership, information on any affiliations and associations as discussed in Section 5 of this document, and other corporate documentation as required. Industry Canada will make the relevant information available to the public prior to the auction, so that all bidders have knowledge of the identity of the other bidders.

174. In areas where an existing licensee has spectrum licence holdings in excess of the spectrum aggregation limit set out in SMSE-002-12, Decision C2-4, the licensee will not be required to divest any such holdings in order to meet the spectrum aggregation limit. However, such licensees will not be eligible to bid for additional licences or otherwise obtain additional licences in licence areas where the aggregation limit has been met or exceeded.

175. Licensees planning to transfer any of their existing spectrum licence holdings in order to increase their eligibility to bid in the related licence areas must do so prior to submitting an application to participate in this auction process (SMSE-002-12, Decision C2-5). The submission date will be provided in the licensing framework.

176. Licensees planning to return any of their existing spectrum licence holdings to Industry Canada in order to increase their eligibility to bid in the related licence areas must do so by October 4, 2013. In the event that Industry Canada decides to offer the returned licences as part of the 2500 MHz auction process, an addendum to the licensing framework for the 2500 MHz auction will be published in order to inform prospective participants of any additional licence offerings (SMSE-002-12, Decision C2-6).

8.2 Opening Bids

177. Opening bids are the prices for the spectrum licences at the start of the auction, and the minimum amount that will be accepted for each licence. The proposed opening prices are based on the population in each service area and adjusted by their relative value. The proposed opening bid prices are for spectrum blocks of 20 MHz, irrespective of whether the block is a paired block of 10 + 10 MHz or an unpaired block of 20 MHz.^{Footnote 26} They can be found in Table 5 below.

178. The determination of the proposed opening bid prices takes into account recent market transactions for spectrum licences in Canada, recent prices paid for 2500 MHz spectrum licences assigned in international auctions and technical considerations. Service areas were grouped into four price levels according to Statistics Canada’s 33 defined census metropolitan areas (CMAs) and their population estimates. Based on relative values for these groups, service areas with a population greater than 2 million (3-25 Toronto, 3-13 Montréal and 3-52 Vancouver) were priced at $0.14/MHz/pop; for service areas that provide coverage to a CMA with a population between 1 million and 2 million, a rate of $0.10/MHz/pop was applied; and for service areas that provide coverage to a CMA with a population less than 1 million, a rate of $0.065/MHz/pop was applied. For all other service areas (those that do not provide coverage to a CMA), a base rate of $0.051/MHz/pop was applied.

179. The total amount of the proposed opening bids for all spectrum blocks is $251,853,000.

Table 5 — Proposed Opening Bid Prices
Service Area #	Service Area Name	Available Spectrum (MHz)	$/MHz/pop	Opening Bid ($)
	Total for a national licence	$66,905,000
	Total for all blocks	$251,853,000
3-01	Newfoundland and Labrador	120	0.065	665,000
3-02	Prince Edward Island	120	0.051	143,000
3-03	Mainland Nova Scotia	120	0.065	1,017,000
3-04	Cape Breton	120	0.051	137,000
3-05	Southern New Brunswick	120	0.065	223,000
3-06	Western New Brunswick	120	0.051	221,000
3-07	Eastern New Brunswick	120	0.065	466,000
3-08	Bas du fleuve / Gaspésie	60	0.051	300,000
3-09	Québec	60	0.100	2,009,000
3-10	Chicoutimi-Jonquière	120	0.065	476,000
3-11	Eastern Townships	120	0.065	703,000
3-12	Trois-Rivières	60	0.065	1,048,000
3-13	Montréal	60	0.140	11,773,000
3-14	Upper Outaouais	120	0.051	126,000
3-15	Ottawa / Outaouais	60	0.100	2,883,000
3-16	Pembroke	120	0.051	116,000
3-17	Abitibi	120	0.051	194,000
3-18	Cornwall	120	0.051	68,000
3-19	Brockville	120	0.051	85,000
3-20	Kingston	120	0.065	227,000
3-21	Belleville	120	0.051	199,000
3-22	Cobourg	120	0.051	64,000
3-23	Peterborough	120	0.065	267,000
3-24	Huntsville	120	0.051	80,000
3-25	Toronto	60	0.140	18,606,000
3-26	Barrie	60	0.065	871,000
3-27	Guelph / Kitchener	60	0.065	900,000
3-28	Listowel / Goderich / Stratford	120	0.051	137,000
3-29	Niagara-St. Catharines	60	0.065	476,000
3-30	London / Woodstock / St. Thomas	60	0.065	1,077,000
3-31	Chatham	120	0.051	103,000
3-32	Windsor / Leamington	120	0.065	504,000
3-33	Strathroy	120	0.051	174,000
3-34	North Bay	120	0.051	129,000
3-35	Sault Ste. Marie	120	0.051	135,000
3-36	Sudbury	120	0.065	229,000
3-37	Kirkland Lake	120	0.051	117,000
3-38	Thunder Bay	120	0.065	289,000
3-39	Winnipeg	120	0.100	2,064,000
3-40	Brandon	120	0.051	178,000
3-41	Regina	60	0.065	474,000
3-42	Moose Jaw	60	0.051	102,000
3-43	Saskatoon	60	0.065	728,000
3-44	Edmonton	120	0.100	2,930,000
3-45	Medicine Hat / Brooks	120	0.051	194,000
3-46	Lethbridge	120	0.051	180,000
3-47	Calgary	120	0.100	2,780,000
3-48	Red Deer	120	0.051	244,000
3-49	Grande Prairie	120	0.051	189,000
3-50	Kootenays	120	0.051	137,000
3-51	Okanagan / Columbia	60	0.065	537,000
3-52	Vancouver	60	0.140	7,517,000
3-53	Victoria	60	0.065	558,000
3-54	Nanaimo	120	0.051	190,000
3-55	Courtenay	120	0.051	117,000
3-56	Thompson / Cariboo	120	0.051	183,000
3-57	Prince George	120	0.051	191,000
3-58	Dawson Creek	120	0.051	67,000
4-170	Yukon	120	0.051	34,000
4-171	Nunavut	120	0.051	32,000
4-172	Northwest Territories	120	0.051	42,000

8-1 Industry Canada is seeking comments on the proposed opening bids as presented in Table 5.

8.3 Proposed Eligibility Points for the 2500 MHz Spectrum Auction

180. The proposed eligibility points associated with the licences being made available in the 2500 MHz auction are based on the population per service area and the estimated value of the spectrum. The population data below are based on Statistics Canada’s 2011 census.

181. Proposed points per service area for paired and unpaired spectrum in the 2500 MHz band are listed in Table 6. The proposed eligibility points are for blocks of 20 MHz, irrespective of whether the block is a paired block of 10 + 10 MHz or an unpaired block of 20 MHz.^{Footnote 27}

182. One eligibility point has been assigned per 50,000 in population for each 20 MHz block of spectrum (either paired or unpaired) in a service area. The eligibility points per spectrum block were then adjusted to reflect the estimated value of the spectrum licences as indicated by the opening bid price base rate.

183. There are 1,320 eligibility points associated with a 20 MHz national licence, which comprises 61 service areas covering the country.

Table 6 — Proposed Eligibility Points for the 2500 MHz Band
Service Area #	Service Area Name	Population	Eligibility Points per 20 MHz Block
Total			1,320
3-01	Newfoundland and Labrador	514,641	13
3-02	Prince Edward Island	140,204	3
3-03	Mainland Nova Scotia	786,567	20
3-04	Cape Breton	135,075	3
3-05	Southern New Brunswick	172,374	4
3-06	Western New Brunswick	217,152	4
3-07	Eastern New Brunswick	360,416	9
3-08	Bas du fleuve / Gaspésie	295,519	6
3-09	Québec	1,004,614	40
3-10	Chicoutimi / Jonquière	368,261	9
3-11	Eastern Townships	543,762	14
3-12	Trois-Rivières	810,609	21
3-13	Montréal	4,204,654	232
3-14	Upper Outaouais	124,011	2
3-15	Ottawa / Outaouais	1,441,718	57
3-16	Pembroke	114,135	2
3-17	Abitibi	190,605	4
3-18	Cornwall	67,207	1
3-19	Brockville	84,068	2
3-20	Kingston	175,801	4
3-21	Belleville	196,021	4
3-22	Cobourg	62,610	1
3-23	Peterborough	206,250	5
3-24	Huntsville	78,790	2
3-25	Toronto	6,645,088	366
3-26	Barrie	673,898	17
3-27	Guelph / Kitchener	696,136	18
3-28	Listowel / Goderich / Stratford	134,384	3
3-29	Niagara - St. Catherines	368,119	9
3-30	London/Woodstock / St. Thomas	832,870	21
3-31	Chatham	100,951	2
3-32	Windsor / Leamington	389,729	10
3-33	Strathroy	170,801	3
3-34	North Bay	126,711	3
3-35	Sault Ste. Marie	132,309	3
3-36	Sudbury	177,004	5
3-37	Kirkland Lake	114,942	2
3-38	Thunder Bay	223,809	6
3-39	Winnipeg	1,032,187	41
3-40	Brandon	174,781	3
3-41	Regina	366,413	9
3-42	Moose Jaw	100,292	2
3-43	Saskatoon	563,107	14
3-44	Edmonton	1,465,386	58
3-45	Medicine Hat / Brooks	190,930	4
3-46	Lethbridge	177,303	4
3-47	Calgary	1,390,206	55
3-48	Red Deer	240,343	5
3-49	Grande Prairie	185,998	4
3-50	Kootenays	134,351	3
3-51	Okanagan / Columbia	415,214	11
3-52	Vancouver	2,684,495	148
3-53	Victoria	431,520	11
3-54	Nanaimo	186,396	4
3-55	Courtenay	114,658	2
3-56	Thompson / Cariboo	179,949	4
3-57	Prince George	187,802	4
3-58	Dawson Creek	65,553	1
4-170	Yukon	33,584	1
4-171	Nunavut	31,906	1
4-172	Northwest Territories	41,455	1

8-2 Industry Canada is seeking comments on the proposed eligibility points for spectrum licences in the 2500 MHz band, as outlined in Table 6 above.

8.4 Pre-auction Deposits

184. In order to enhance the integrity of the auction, Industry Canada requires that all bidders submit a pre-auction financial deposit with their auction application. The deposit is to be in the form of a certified cheque or money order payable to the Receiver General for Canada, or an irrevocable standby letter of credit.

185. Similar to previous auctions, Industry Canada proposes to determine the value of the pre-auction financial deposit based on the licences on which the applicant wishes to be eligible to bid. Each licence has been assigned a specific number of eligibility points that are approximately proportionate to the population covered by the licence and adjusted for value, as proposed in Table 6 above. For spectrum licences to be auctioned in the 2500 MHz band, Industry Canada proposes that the financial deposit be equal to $50,000 per eligibility point.

186. An individual bidder wanting to be eligible to bid on the equivalent of one national paired block would have to submit a deposit covering 1,320 points, which would equate to $66,000,000 (i.e. $50,000 x 1,320). Financial deposit(s) will be returned to any applicant that is found not to be a qualified bidder and to any applicant that provides written notification to Industry Canada of its withdrawal from the process prior to the auction’s commencement. Financial deposits will be returned to unsuccessful bidders once the auction has closed.

8-3 Industry Canada is seeking comments on the proposed pre-auction deposits as outlined above.

8.5 Bid Payment and Forfeiture Penalties

187. Within 10 business days following the close of the auction, each provisional licence winner will be required to submit 20 percent (20%) of its winning bids. This payment will be non-refundable. The remaining portion of the winning bids will be due within 30 business days of the auction’s close.

188. Following the conclusion of the auction, winning bidders that fail to comply with the specified payment schedule or fail to come into compliance with the eligibility requirements of the Radiocommunication Regulations, will forfeit their right to the licence. Furthermore, non-compliant bidders will be subject to a penalty in the amount of the difference between the forfeited bid and the eventual revenue from bids or fees of the licence(s) (determined by a subsequent licensing process) if that revenue is lower than the forfeited bid.

9. Bidder Training and Support

189. Qualified bidders will receive the necessary information to participate in the auction several weeks prior to the start of the auction. Information will include a user manual for the auction system, instructions and passwords to access the secure auction system, along with the schedules for training, mock auctions and the start of the bidding process.

190. A mock auction will be held, likely during the week prior to the start of the auction, in order to allow qualified bidders to better familiarize themselves with the auction system.

191. On May 30, 2012, Industry Canada held an auction design information session to assist potential 700 MHz and 2500 MHz auction participants in gaining a greater understanding of the proposed auction format and rules. DVDs of the information session are available by contacting:

Information Session, Spectrum Auctions
Spectrum Auction Branch
Industry Canada
300 Slater Street
Ottawa, Ontario K1A 0C8
Telephone: 613-991-0179
Fax: 613-957-4076
email: ic.spectrumauctions-encheresduspectre.ic@canada.ca

10. Post-auction Licensing Process for Unassigned Licences

192. Industry Canada will consider making unassigned licences available for licensing through an alternative process, which could include a subsequent auction at a later date following the close of the initial auction. The timing and form of such a process will depend on the demand for the available licences. Industry Canada may conduct a public consultation should it consider it necessary.

11. Licence Renewal Process

193. Following the end of the initial licence term, the licensee 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.

194. As part of the licence renewal process, the Minister of Industry retains the power to fix and amend the terms and conditions of spectrum licences during the term of the licence and at the end of the term in accordance with subsection 5(1) of the Radiocommunication Act. As noted in the FSAC , licence fees that reflect some measure of market value will apply to licences issued through a renewal process. Accordingly, the renewal process will serve to determine whether new licences will be issued, the terms and conditions that will apply to the new licences and the applicable licence fees.

195. Generally, approximately two years prior to the end of the licence term, Industry Canada will review whether there is a need for a fundamental reallocation of the spectrum to a new service, or whether an overriding policy need has arisen. A review of the licensee’s continued compliance with the conditions of licence will also begin. Industry Canada will launch a public consultation to discuss whether or not, in light of the above-noted issues, new licences should be issued for a subsequent term. The consultation paper will also propose, and invite comments on, licence conditions and fees that would apply during the subsequent licence term.

196. It is proposed that the renewal process include a public consultation process that would commence approximately two years prior to the end of the licence term.

11-1 Industry Canada is seeking comments on the proposed renewal process for spectrum licences in the 2500 MHz band.

12. Clarification Questions Process

197. As done in previous auctions, following a decision on the questions raised in this consultation paper, Industry Canada will accept written questions soliciting clarification of the rules and policies set out in the decision paper for a limited period of time, which will be specified in the final licensing framework. Written questions, submitted by the deadline and Industry Canada’s responses will be made public on Industry Canada’s website.

13. Submitting Comments

198. Respondents are requested to provide their comments in electronic format (WordPerfect, Microsoft Word or Adobe PDF) to the following email address: ic.spectrumauctions-encheresduspectre.ic@canada.ca.

199. Written submissions should be addressed to the Director General, Spectrum Auctions Branch, DGSA, Industry Canada, 300 Slater Street, Ottawa, Ontario K1A 0C8.

200. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (DGSO-004-12). Parties should submit their comments no later than November 19, 2012, to ensure consideration. Soon after the close of the comment period, all comments received will be posted on Industry Canada’s Spectrum Management and Telecommunications website at http://www.ic.gc.ca/spectrum.

201. Industry Canada will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted until December 17, 2012.

202. Following the initial comment period, Industry Canada may, at its discretion, request additional information if needed to clarify significant positions or new proposals. In such a case, the reply comment deadline may be extended.

14. Related Information

203. All spectrum-related documents referred to in this paper are available on Industry Canada’s Spectrum Management and Telecommunications website at http://www.ic.gc.ca/spectrum.

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

Manager, Spectrum Auction Policy
Spectrum Auction Branch
Industry Canada
300 Slater Street
Ottawa, Ontario
K1A 0C8
Telephone: 613-954-3323
Fax: 613-957-4076
email: ic.spectrumauctions-encheresduspectre.ic@canada.ca

Footnotes

Footnote 1

See Canada Gazette notice SMSE-002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band

Return to footnote 1 referrer

Footnote 2

See Canada Gazette notice 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

Return to footnote 2 referrer

Footnote 3

See SMSE-002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band

Return to footnote 3 referrer

Footnote 4

See DGSO-002-12, Consultation on a Licensing Framework for Mobile Broadband Services (MBS) — 700 MHz Band.

Return to footnote 4 referrer

Footnote 5

See Spectrum Policy Framework for Canada.

Return to footnote 5 referrer

Footnote 6

See SMSE-002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band.

Return to footnote 6 referrer

Footnote 7

See Framework for Spectrum Auctions in Canada.

Return to footnote 7 referrer

Footnote 8

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.

Return to footnote 8 referrer

Footnote 9

See SMSE-002-12, Policy and Technical Framework: Mobile Broadband Services (MBS) — 700 MHz Band, Broadband Radio Service (BRS) — 2500 MHz Band.

Return to footnote 9 referrer

Footnote 10

Refer to Appendix A in SMSE-005-11; 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.

Return to footnote 10 referrer

Footnote 11

See 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.

Return to footnote 11 referrer

Footnote 12

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.

Return to footnote 12 referrer

Footnote 13

See 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.

Return to footnote 13 referrer

Footnote 14

Source: The Canadian Table of Frequency Allocations.

Return to footnote 14 referrer

Footnote 15

Canada has two radio astronomy observatories, the Dominion Radio Astrophysical Observatory, located near Penticton, British Columbia (Latitude 49° 19´ 12¨ North, Longitude 119° 37´ 12¨ West), and the Algonquin Radio Observatory, located in Algonquin Provincial Park in Ontario (Latitude 45° 57´ 20¨ North, Longitude 078° 04´ 23¨ West).

Return to footnote 15 referrer

Footnote 16

Service Areas for Competitive Licensing.

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Footnote 17

Industry Canada used an SMRA for the 24 and 38 GHz auction in 1999, the Personal Communications Services (PCS) auction in 2001, the 2300/3500 MHz auction in 2004, the two-phased residual auction for 2300/3500 MHz in 2004 (Phase 1) and 2005 (Phase 2), and the Advanced Wireless Services (AWS) auction in 2008. Industry Canada used a sealed bid, second-price auction design for two auctions held in 2009 (the Air-Ground auction and the auction of residual spectrum licences in the 2300/3500 MHz bands).

Return to footnote 17 referrer

Footnote 18

All transition policies related to the 2500 MHz band will be incorporated into Spectrum Policy SP 2500 MHz to be updated and published in the future. Reference to SMSE-005-11 may be changed accordingly. 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.

Return to footnote 18 referrer

Footnote 19

Spectrum licences subject to the R&D condition of licence include cellular, PCS , AWS , 24 GHz, 38 GHz , 2.3 GHz, 3.5 GHz and Air-Ground Services.

Return to footnote 19 referrer

Footnote 20

See DGSO-001-11, Decisions on the Revisions to the Framework for Spectrum Auctions in Canada and Other Related Issues.

Return to footnote 20 referrer

Footnote 21

See Canada Gazette notice DGSO-001-12, Proposed Revisions to the Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing.

Return to footnote 21 referrer

Footnote 22

Ibid.

Return to footnote 22 referrer

Footnote 23

See DGRB-005-09, Consultation on Transition to Broadband Radio Service (BRS) in the Band 2500-2690 MHz.

Return to footnote 23 referrer

Footnote 24

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.

Return to footnote 24 referrer

Footnote 25

All transition policies related to the 2500 MHz band will be incorporated into an updated Spectrum Policy SP 2500 MHz to be published in the future. Reference to SMSE-005-11 may be changed accordingly. See 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.

Return to footnote 25 referrer

Footnote 26

Although the unpaired spectrum will be licensed in 25 MHz blocks, the 5 MHz restricted bands are not considered when determining the opening bid prices.

Return to footnote 26 referrer

Footnote 27

Although the unpaired spectrum will be licensed in 25 MHz blocks, the 5 MHz restricted bands are not considered when determining the eligibility points.

Return to footnote 27 referrer

Consultation on a Licensing Framework for Broadband Radio Service (BRS) — 2500 MHz Band

1. Intent

2. Background

3. General

3.1 Spectrum Available for Licensing

3.2 Radio Frequency Block Arrangement Description

3.3 Restricted Bands

3.4 Existing Licensees in the 2500 MHz Band

3.5 Services in Adjacent Bands

3.6 Tier Sizes

3.7 Service Area for Lloydminster (Alberta/Saskatchewan)

4. Auction Format and Rules

4.1 Auction Format

4.2 Proposed Auction Format for the 2500 MHz Auction

4.2.1 Proposed Auction Attributes

4.2.2 Overview of the CCA Process

4.2.3 Proposed CCA Rules

4.2.4 Information Disclosure

4.2.5 Summary

5. Bidder Participation — Affiliated and Associated Entities

5.1 Prohibition of Collusion

6. Conditions of Licence for Spectrum Licences to be Auctioned in the 2500 MHz Band

7. Conditions of Licence for Existing BRS Licensees in the 2500 MHz Band

8. Auction Process

8.1 Application to Participate

8.2 Opening Bids

8.3 Proposed Eligibility Points for the 2500 MHz Spectrum Auction

8.4 Pre-auction Deposits

8.5 Bid Payment and Forfeiture Penalties

9. Bidder Training and Support

10. Post-auction Licensing Process for Unassigned Licences

11. Licence Renewal Process

12. Clarification Questions Process

13. Submitting Comments

14. Related Information