Policy and Licensing Framework for Spectrum in the 3800 MHz Band — Annexes

SPB-002-22
June 2022

Expand all content / collapse all content Main Table of Key Dates PDF

Annex A: General deployment requirements

Population in table A1 is based on 2016 Census data. The deployment requirements will be based on the most recent census information available at the time of the assessment.

Table A1: General deployment requirements for Tier 4 service areas with large population centres
Tier 4 Service area name Population Minimum population coverage (5 year) Minimum population coverage (10 year) Minimum population coverage (20 year)
4-001 St. John's 255 012 30% 50% 70%
4-010 Halifax 435 820 30% 50% 70%
4-018 Moncton 178 500 25% 40% 60%
4-028 Chicoutimi-Jonquière 218 377 30% 50% 70%
4-030 Québec 904 330 30% 50% 70%
4-037 Trois-Rivières 265 152 30% 50% 70%
4-042 Sherbrooke 250 227 30% 50% 70%
4-051 Montréal 4 352 037 30% 50% 70%
4-055 Ottawa 1 452 852 30% 50% 70%
4-070 Kingston 177 314 30% 50% 70%
4-077 Toronto 7 030 750 30% 50% 70%
4-079 Guelph/Kitchener 707 534 30% 50% 70%
4-084 Niagara/St. Catharines 349 283 30% 50% 70%
4-086 London/Woodstock/St. Thomas 678 149 30% 50% 70%
4-090 Windsor/Leamington 401 719 30% 50% 70%
4-094 Barrie 352 290 25% 40% 60%
4-111 Winnipeg 830 151 30% 50% 70%
4-124 Regina 260 382 30% 50% 70%
4-125 Saskatoon 306 824 30% 50% 70%
4-136 Calgary 1 416 856 30% 50% 70%
4-141 Edmonton 1 325 857 30% 50% 70%
4-151 Kelowna 362 815 25% 40% 60%
4-152 Vancouver 2 731 567 30% 50% 70%
4-154 Victoria 458 861 30% 50% 70%

Population in table A2 is based on 2016 Census data. The deployment requirements will be based on the most recent census information available at the time of the assessment.

Table A2: General deployment requirements for Tier 4 service areas without a large population centre
Tier 4 Service area name Population Minimum population coverage (7 year) Minimum population coverage (10 year) Minimum population coverage (20 year)
4-002 Placentia 15 304 10% 20% 30%
4-003 Gander/Grand Falls/Windsor 144 229 5% 10% 20%
4-004 Corner Brook/Stephenville 77 974 10% 20% 30%
4-005 Labrador 27 656 10% 20% 30%
4-006 Charlottetown 95 350 25% 40% 60%
4-007 Summerside 47 557 15% 30% 40%
4-008 Yarmouth 55 609 20% 35% 50%
4-009 Bridgewater/Kentville 139 289 20% 35% 50%
4-011 Truro 56 649 15% 30% 40%
4-012 Amherst 33 373 10% 20% 30%
4-013 Antigonish/New Glasgow 71 445 15% 30% 40%
4-014 Sydney 131 379 30% 50% 70%
4-015 Saint John 142 898 30% 50% 70%
4-016 St. Stephen 25 087 5% 15% 25%
4-017 Fredericton 164 871 25% 40% 60%
4-019 Miramichi/Bathurst 156 025 15% 30% 40%
4-020 Grand Falls 24 936 10% 20% 30%
4-021 Edmundston 26 504 25% 40% 60%
4-022 Campbellton 26 776 10% 20% 30%
4-023 Matane 112 039 15% 30% 40%
4-024 Mont-Joli 37 788 5% 15% 25%
4-025 Rimouski 56 619 25% 40% 60%
4-026 Rivière-du-Loup 82 869 20% 35% 50%
4-027 La Malbaie 28 193 15% 30% 40%
4-029 Montmagny 56 808 20% 35% 50%
4-031 Sainte-Marie 53 258 25% 40% 60%
4-032 Saint-Georges 71 425 20% 35% 50%
4-033 Lac-Mégantic 24 223 20% 35% 50%
4-034 Thetford Mines 42 019 30% 50% 70%
4-035 Plessisville 22 772 10% 20% 30%
4-036 La Tuque 16 219 20% 35% 50%
4-038 Louiseville 21 708 15% 30% 40%
4-039 Asbestos 29 744 15% 30% 40%
4-040 Victoriaville 56 684 30% 50% 70%
4-041 Coaticook 12 981 15% 30% 40%
4-043 Windsor 16 777 20% 35% 50%
4-044 Drummondville 112 390 30% 50% 70%
4-045 Cowansville 29 083 30% 50% 70%
4-046 Farnham 29 593 5% 15% 25%
4-047 Granby 105 440 30% 50% 70%
4-048 St-Hyacinthe 92 092 30% 50% 70%
4-049 Sorel 58 740 25% 40% 60%
4-050 Joliette 161 106 15% 30% 40%
4-052 Sainte-Agathe-des-Monts 77 087 10% 20% 30%
4-053 Hawkesbury 64 131 20% 35% 50%
4-054 Mont-Laurier/Maniwaki 48 488 15% 30% 40%
4-056 Pembroke 82 200 20% 35% 50%
4-057 Arnprior/Renfrew 31 367 20% 35% 50%
4-058 Rouyn-Noranda 43 108 20% 35% 50%
4-059 Notre-Dame-du-Nord 16 023 15% 30% 40%
4-060 La Sarre 19 349 15% 30% 40%
4-061 Amos 25 096 15% 30% 40%
4-062 Val-d'Or 44 619 20% 35% 50%
4-063 Roberval/Saint-Félicien 58 438 10% 20% 30%
4-064 Baie-Comeau 43 675 20% 35% 50%
4-065 Port-Cartier/Sept-Îles 46 983 20% 35% 50%
4-066 Chibougamau 45 730 5% 10% 20%
4-067 Cornwall 69 729 30% 50% 70%
4-068 Brockville 70 563 20% 35% 50%
4-069 Gananoque 13 150 20% 35% 50%
4-071 Napanee 42 993 5% 15% 25%
4-072 Belleville 154 982 15% 30% 40%
4-073 Cobourg 65 180 10% 20% 30%
4-074 Peterborough 165 516 25% 40% 60%
4-075 Lindsay 45 902 25% 40% 60%
4-076 Minden 20 813 15% 30% 40%
4-078 Alliston 129 279 20% 35% 50%
4-080 Fergus 30 010 20% 35% 50%
4-081 Kincardine 185 818 20% 35% 50%
4-082 Listowel/Goderich 84 257 10% 20% 30%
4-083 Fort Erie 31 072 30% 50% 70%
4-085 Haldimand/Dunnville 37 398 15% 30% 40%
4-087 Brantford 138 535 30% 50% 70%
4-088 Stratford 51 339 25% 40% 60%
4-089 Chatham 68 885 30% 50% 70%
4-091 Wallaceburg 30 983 15% 30% 40%
4-092 Sarnia 123 953 30% 50% 70%
4-093 Strathroy 46 727 25% 40% 60%
4-095 Midland 49 059 20% 35% 50%
4-096 Gravenhurst/Bracebridge 61 892 20% 35% 50%
4-097 North Bay 104 524 25% 40% 60%
4-098 Parry Sound 21 123 15% 30% 40%
4-099 Elliot Lake 29 520 20% 35% 50%
4-100 Sudbury 178 872 25% 40% 60%
4-101 Kirkland Lake 32 402 20% 35% 50%
4-102 Timmins 42 086 20% 35% 50%
4-103 Kapuskasing 38 024 10% 20% 30%
4-104 Kenora/Sioux Lookout 64 826 10% 20% 30%
4-105 Iron Bridge 20 162 10% 20% 30%
4-106 Sault Ste. Marie 80 833 25% 40% 60%
4-107 Marathon 24 923 10% 20% 30%
4-108 Thunder Bay 121 061 30% 50% 70%
4-109 Fort Frances 20 095 15% 30% 40%
4-110 Steinbach 64 764 10% 20% 30%
4-112 Lac du Bonnet 58 076 5% 10% 20%
4-113 Morden/Winkler 51 609 15% 30% 40%
4-114 Brandon 103 743 25% 40% 60%
4-115 Portage la Prairie 21 273 20% 35% 50%
4-116 Dauphin 75 508 5% 10% 20%
4-117 Creighton/Flin Flon 22 228 10% 20% 30%
4-118 Thompson 50 665 10% 20% 30%
4-119 Estevan 46 006 5% 10% 20%
4-120 Weyburn 22 877 20% 35% 50%
4-121 Moose Jaw 55 141 25% 40% 60%
4-122 Swift Current 46 219 15% 30% 40%
4-123 Yorkton 63 024 10% 20% 30%
4-126 Watrous 27 288 5% 10% 20%
4-127 Battleford 99 433 5% 15% 25%
4-128 Prince Albert 130 446 20% 35% 50%
4-129 Lloydminster 37 539 20% 35% 50%
4-130 Northern Saskatchewan | Saskatchewan-Nord 37 064 5% 10% 20%
4-131 Medicine Hat/Brooks 107 233 30% 50% 70%
4-132 Lethbridge 189 709 20% 35% 50%
4-133 Stettler/Oyen/Wainwright 51 420 10% 20% 30%
4-134 High River 120 208 15% 30% 40%
4-135 Strathmore 45 478 15% 30% 40%
4-137 Red Deer 206 387 25% 40% 60%
4-138 Wetaskiwin/Ponoka 54 340 15% 30% 40%
4-139 Camrose 40 145 20% 35% 50%
4-140 Vegreville 15 396 15% 30% 40%
4-142 Edson/Hinton 49 814 15% 30% 40%
4-143 Bonnyville 83 631 5% 10% 20%
4-144 Whitecourt 32 669 15% 30% 40%
4-145 Barrhead 23 437 15% 30% 40%
4-146 Fort McMurray 73 953 30% 50% 70%
4-147 Peace River 86 745 5% 15% 25%
4-148 Grande Prairie 110 027 20% 35% 50%
4-149 East Kootenay | Kootenay-Est 60 371 10% 20% 30%
4-150 West Kootenay | Kootenay-Ouest 78 941 5% 15% 25%
4-153 Hope 26 093 5% 15% 25%
4-155 Nanaimo 194 922 25% 40% 60%
4-156 Courtenay 118 732 25% 40% 60%
4-157 Powell River 26 865 20% 35% 50%
4-158 Squamish/Whistler 74 365 20% 35% 50%
4-159 Merritt 15 649 20% 35% 50%
4-160 Kamloops 106 972 15% 30% 40%
4-161 Ashcroft 15 070 5% 10% 20%
4-162 Salmon Arm 51 024 20% 35% 50%
4-163 Golden 6 854 20% 35% 50%
4-164 Williams Lake 38 440 15% 30% 40%
4-165 Quesnel/Red Bluff 23 558 15% 30% 40%
4-166 Skeena 56 234 10% 20% 30%
4-167 Prince George 94 607 30% 50% 70%
4-168 Smithers 37 646 5% 10% 20%
4-169 Dawson Creek 68 387 15% 30% 40%
4-170 Yukon 35 928 25% 40% 60%
4-171 Nunavut 35 975 5% 15% 25%
4-172 Northwest Territories | Territoires du Nord-Ouest 41 668 20% 35% 50%

Annex B: Additional deployment requirements for Long Term Evolution mobile network operators

The additional deployment requirements for Long Term Evolution (LTE) mobile network operators outlined in table B1, will be based on the most recent census information available at the time of the assessment.

Table B1: Additional deployment requirements for LTE mobile network operators
Tier area Within 5 years* Within 7 years* Within 10 years* In rural areas outside urban centres within 10 years
Tier areas of Montréal (4-054), Toronto (4-077) & Vancouver (4-152) 90% 97% n/a 95%
Tiers with a large population centre (excluding Montréal, Toronto & Vancouver) n/a 90% 97% 95%
Tiers without a large population centre n/a 90% 97% n/a

* For deployment within the existing mid-band mobile LTE network footprint as of the publication date of ISED's Policy and Licensing Framework for Spectrum in the 3800 MHz Band.

Annex C: Conditions of licence for flexible use licences in the 3800 MHz band

The following conditions will apply to licences in the 3800 MHz band as defined in the Policy and Licensing Framework for Spectrum in the 3800 MHz Band (the Framework).

It should be noted that the licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations, as amended from time to time. For example, the Minister of Innovation, Science and Industry (the Minister) continues to have the power to amend the terms and conditions of spectrum licences, under 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.

C1. Licence term

The term of this licence is 20 years from the date that the first licences are issued immediately following the auction process, shortly after the final payment deadline set out in the Framework (the “initial licence issuance date”). All licences will terminate on the same date, 20 years after the initial licence issuance date.

At the end of the 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.

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

C2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations and, where applicable, with the eligibility criteria for set-aside licences as defined under the Framework. The licensee must notify the Minister of any change that would have a material effect on either type of eligibility. Such notification must be made in advance for any proposed transactions within its knowledge.

C3. Licence transferability, divisibility and subordinate licensing

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

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

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

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

Cross-band spectrum cap: Licensees are subject to the following additional provisions under the 100 MHz cross-band spectrum cap established under the Framework:

The cross-band cap is applicable to a licensee's total 3500 MHz and 3800 MHz spectrum holdings immediately following the issuance 3800 MHz licences and extends for a period of five years. 

Therefore, no transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the 100 MHz cross-band spectrum cap during this period or cause a licensee whose prior holdings already exceed the spectrum cap to further exceed the spectrum cap. Any change in ownership or control granting a right or interest to another licensee in this band may be considered as a deemed 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 for any change that would have a material effect on its compliance with this spectrum cap. Such a request must be made in advance of any proposed transactions within its knowledge.

A spectrum licence may only be transferred after the five-year period set out above and once the licensee has satisfied the first mid-term deployment requirement.

The licensees may also apply, in writing, to use a subordinate licensing process. ISED approval is required for each proposed subordinate licence. Subordinate licences will not count towards the subordinate licensee's spectrum cap if the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where such approval is granted and for at least the duration of the spectrum cap being in place, licensees must implement their plans to the satisfaction of ISED. Any modifications to these plans must be submitted to ISED for approval.

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

C4. Treatment of existing spectrum users

As set out in the Decision on the Technical and Policy Framework for the 3650-4200 MHz Band and Changes to the Frequency Allocation of the 3500-3650 MHz Band (the 3800 MHz Repurposing Decision), existing WBS licensees are permitted to continue to operate in in the 3650-3700 MHz portion of the 3800 MHz band, subject to the transition plan and moratorium established in sections 10.1.2 and 10.1.3 of the 3800 MHz Repurposing Decision.

Similarly, with the exception of the consolidated gateway sites in Weir, Quebec, and Allan Park, Ontario, the Government of Canada site in North Bay, and satellite-dependent areas where authorized earth station operations may remain and are protected from interference from flexible use licensees, fixed satellite service (FSS) earth stations are permitted to continue to operate in the band until their transition deadline of March 31, 2025, as established in sections 10.2 to 10.4 of the 3800 MHz Repurposing Decision.

C5. Radio station installations

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

Provision of technical information: The licensee must provide and maintain up-to-date technical information on a particular station or network in accordance with the definitions, criteria, frequency and timelines specified in CPC-2-1-23, as amended from time to time.

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

C6. Technical considerations, and international and domestic coordination

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

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

C7. Lawful interception

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

The licensee may request the Minister to forbear from enforcing certain assistance capability requirements for a limited period of time. 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 with the requirement can be expected.

C8. Research and development

The licensee must invest, at a minimum, 2% of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues less inter-carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

C9. Deployment requirements

The licensee will be required to demonstrate to the Minister that the spectrum has been put to use, as specified below. In all cases, the licensee is required to meet the relevant conditions and to continuously provide services throughout the term of the licence in accordance with these requirements. For services to be considered "continuously provided", the service provider must maintain an active service offering throughout the term of their licence.

General deployment requirements

In Tier 4 areas that include a large population centre (as listed in annex A), all licensees will be required to demonstrate to the Minister that the spectrum has been put to use to actively provide service to a minimum percentage of the population as specified in table A1 of annex A, within 5, 10, and 20 years of the initial licence issuance date. In all other Tier 4 areas, licensees will be required to demonstrate to the Minister that the spectrum has been put to use to actively provide service to a minimum percentage of the population as specified in table A2 of annex A, within 7, 10, and 20 years of the initial licence issuance date.

Additional deployment requirements for mobile LTE service providers

In addition to the general deployment requirements, a licensee offering mobile LTE services will be required to demonstrate to the Minister that the spectrum has been put to use to cover the following deployment requirements within its mid-band mobile LTE network footprint (coverage in effect as of the publication date of the Policy and Licensing Framework for Spectrum in the 3800 MHz Band), using the 3800 MHz band.

In the Tier 4 service areas of Montréal, Toronto and Vancouver:

  • 90% of the population within its mid-band mobile LTE network footprint within five years
  • 97% within seven years of the initial licence issuance date
  • 95% of the population outside the large urban population centres within 10 years of the initial licence issuance date

In tiers that contain a large population centre, excluding Montréal, Toronto and Vancouver, as listed in annex B:

  • 90% of the population within its mid-band mobile LTE network footprint within seven years
  • 97% within 10 years of the initial licence issuance date
  • 95% of the population outside the large urban population centres within 10 years of the initial licence issuance date

In tiers that do not contain a large population centre, as listed in annex B:

  • 90% of the population within its mid-band mobile LTE network footprint within seven years
  • 97% within 10 years of the initial licence issuance date

The general deployment requirements continue to apply to all licences by default, and must be satisfied in all cases where the requirements for mobile operators listed above may be lower than the general requirements.

Licensees will be required to provide to ISED, their mid-band mobile LTE network footprint as the publication date of the Framework, as defined by the service provider's AWS-1, AWS-3, AWS-4, BRS, PCS, WCS and 3500 MHz band deployments, when requested by ISED.

The licensee is required to meet these conditions at all relevant times during the licence term and to continuously provide services throughout the term of the licence in accordance with these requirements.

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

The licensee must provide the Minister with any documentation or information related to spectrum access or LTE network footprints at the Minister's request.

Six months prior to the end of the 20-year licence term, all licensees wishing to undergo the future licence renewal process must provide proof to ISED that they meet or will meet the 20-year deployment requirements for their licence.

ISED will review licensees' compliance with their deployment conditions at the dates noted above. Where, at any point in the licence term, the licensee is not in compliance with its deployment conditions, ISED may invoke various compliance and enforcement measures. These measures may include warnings, administrative monetary penalties, legal action, licence amendments, suspensions, or other measures. In certain cases of non-compliance, ISED may determine that the most appropriate course of action is to revoke the licence.

C10. Mandatory antenna tower and site sharing

The licensee 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.

C11. Mandatory roaming

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

C12. Annual reporting

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

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

Reports are to be submitted to the Minister at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Operational Policy
6th Floor, East Tower
235 Queen St
Ottawa ON  K1A 0H5

Where a licensee holds multiple licences, spectrum implementation reports should be broken down by licence 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 the Minister to monitor the effectiveness of these conditions in meeting the policy objectives regarding the band and the Minister's intent that the spectrum be deployed in a timely manner for the benefit of Canadians.

C13. Amendments

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

Annex D: Tier 4 service areas categorized as encumbered

Table D1 lists the Tier 4 service areas categorized as encumbered as part of the auction process. The potential encumbered population in all of these service areas is 10% or more, as of May 9, 2022. The population is based on the 2016 Census data.

The levels of encumbrance were determined using assumptions to generally protect fixed satellite service (FSS) earth stations from interference from flexible use stations under worst-case sharing scenarios. The effects of clutter were not considered; and in the majority of cases, the effects of terrain were not included. The inclusion of these elements could lower the estimate of the encumbered population. In practice, mitigation measures such as the antenna orientation of flexible use base stations and transmitter power adjustment could further lower the level of encumbrance. ISED also expects that some of these FSS earth station operations will eventually transition to 4000-4200 MHz and that flexible use licensees will have the ability to coordinate and negotiate mutually beneficial commercial agreements with existing FSS earth station operators to reduce the level of encumbrance. Consequently, the actual levels of encumbrance in most service areas could be lower than the estimated levels indicated in table D1. As such, the levels indicated in this table are intended to provide an initial evaluation for potential bidders and do not guarantee the population that the licensees will be able to serve. As indicated in section 12.1 of the Framework, ISED will continue to review the extent of the encumbrances and will publish an updated list of Tier 4 service areas where more than 10% of the population is encumbered and the percentage of the encumbered population six months prior to the start of the auction.

Table D1: Tier 4 service areas categorized as encumbered
Tier 4 Service area name Tier 4 population Percentage (%) of potential population encumbrance
4-005 Labrador 27 656 87
4-052 Sainte-Agathe-des-Monts 77 087 12
4-058 Rouyn-Noranda 43 108 87
4-061 Amos 25 096 99
4-062 Val D'Or 44 619 99.54
4-066 Chibougamau 45 730 94
4-078 Alliston 129 279 18
4-081 Kincardine 185 818 62
4-082 Listowel/Goderich 84 257 24
4-097 North Bay 104 524 91
4-098 Parry Sound 21 123 26
4-099 Elliot Lake 29 520 61
4-103 Kapuskasing 38 024 54
4-104 Kenora/Sioux Lookout 64 826 93
4-105 Iron Bridge 20 162 58
4-107 Marathon  24 923 87
4-108 Thunder Bay 121 061 99.96
4-109 Fort Frances 20 095 95
4-112 Lac du Bonnet 58 076 35
4-117 Creighton/Flin Flon 22 228 93
4-118 Thompson 50 665 73
4-130 Northern Saskatchewan | Saskatchewan-Nord 37 064 94
4-147 Peace River 86 745 39
4-148 Grande Prairie 110 027 13
4-152 Vancouver 2 731 566 15
4-155 Nanaimo 194 922 79
4-156 Courtenay 118 732 87
4-157 Powell River 26 865 93
4-158 Squamish/Whistler 74 365 12
4-161 Ashcroft 15 070 50
4-164 Williams Lake 38 440 38
4-165 Quesnel/Red Bluff 23 558 90
4-166 Skeena 56 234 81
4-168 Smithers 37 646 69
4-169 Dawson Creek 68 387 47
4-170 Yukon 35 928 96
4-171 Nunavut 35 975 99.98
4-172 Northwest Territories | Territoires du Nord-Ouest 41 668 98

Annex E: Opening bids and eligibility points

The tables below outline the opening bid prices and eligibility points for encumbered and unencumbered products based on the population and $/MHz/pop for each Tier 4 service area. Population is based on 2016 Census data.

ISED will continue to review the extent of the encumbrances and will publish an updated list of opening bids and eligibility for encumbered Tier 4 service areas where more than 10% of the population is encumbered six months prior to the start of the auction.

Table E1: Opening bids and eligibility points of encumbered blocks
Tier 4 Service area name Population $/MHz/pop Opening bid ($)(10 MHz) Eligibility points (10 MHz)
4-005 Labrador 27 656 0.051 2 000 1
4-052 Sainte-Agathe-des-Monts 77 087 0.051 35 000 10
4-058 Rouyn-Noranda 43 108 0.051 3 000 1
4-061 Amos 25 096 0.051 1 000 1
4-062 Val-d'Or 44 619 0.051 1 000 1
4-066 Chibougamau 45 730 0.051 1 000 1
4-078 Alliston 129 279 0.051 54 000 20
4-081 Kincardine 185 818 0.051 36 000 10
4-082 Listowel/Goderich 84 257 0.051 33 000 10
4-097 North Bay 104 524 0.051 5 000 2
4-098 Parry Sound 21 123 0.051 8 000 3
4-099 Elliot Lake 29 520 0.051 6 000 2
4-103 Kapuskasing 38 024 0.051 9 000 3
4-104 Kenora/Sioux Lookout 64 826 0.051 2 000 1
4-105 Iron Bridge 20 162 0.051 4 000 1
4-107 Marathon 24 923 0.051 2 000 1
4-108 Thunder Bay 121 061 0.065 1 000 1
4-109 Fort Frances 20 095 0.051 1 000 1
4-112 Lac du Bonnet 58 076 0.051 19 000 6
4-117 Creighton/Flin Flon 22 228 0.051 1 000 1
4-118 Thompson 50 665 0.051 7 000 2
4-130 Northern Saskatchewan | Saskatchewan-Nord 37 064 0.051 4 000 1
4-147 Peace River 86 745 0.051 27 000 9
4-148 Grande Prairie 110 027 0.051 49 000 20
4-152 Vancouver 2 731 567 0.232 5 370 000 1 790
4-155 Nanaimo 194 922 0.065 26 000 9
4-156 Courtenay 118 732 0.051 8 000 3
4-157 Powell River 26 865 0.051 1 000 1
4-158 Squamish/Whistler 74 365 0.051 33 000 10
4-161 Ashcroft 15 070 0.051 4 000 1
4-164 Williams Lake 38 440 0.051 12 000 4
4-165 Quesnel/Red Bluff 23 558 0.051 1 000 1
4-166 Skeena 56 234 0.051 5 000 2
4-168 Smithers 37 646 0.051 6 000 2
4-169 Dawson Creek 68 387 0.051 18 000 6
4-170 Yukon 35 928 0.051 1 000 1
4-171 Nunavut 35 975 0.051 1 000 1
4-172 Northwest Territories | Territoires du Nord-Ouest 41 668 0.051 1 000 1


Table E2: Opening bids and eligibility points of unencumbered blocks
Tier 4 Service area name Population $/MHz/pop Opening bid ($)(10 MHz) Eligibility points (10 MHz)
4-001 St. John's 255 012 0.065 166 000 60
4-002 Placentia 15 304 0.051 8 000 3
4-003 Gander/Grand Falls/Windsor 144 229 0.051 74 000 20
4-004 Corner Brook/Stephenville 77 974 0.051 40 000 10
4-005 Labrador 27 656 0.051 14 000 5
4-006 Charlottetown 95 350 0.051 49 000 20
4-007 Summerside 47 557 0.051 24 000 8
4-008 Yarmouth 55 609 0.051 28 000 9
4-009 Bridgewater/Kentville 139 289 0.051 71 000 20
4-010 Halifax 435 820 0.065 283 000 90
4-011 Truro 56 649 0.051 29 000 10
4-012 Amherst 33 373 0.051 17 000 6
4-013 Antigonish/New Glasgow 71 445 0.051 36 000 10
4-014 Sydney 131 379 0.051 67 000 20
4-015 Saint John 142 898 0.065 93 000 30
4-016 St. Stephen 25 087 0.051 13 000 4
4-017 Fredericton 164 871 0.065 107 000 40
4-018 Moncton 178 500 0.065 116 000 40
4-019 Miramichi/Bathurst 156 025 0.051 80 000 30
4-020 Grand Falls 24 936 0.051 13 000 4
4-021 Edmundston 26 504 0.051 14 000 5
4-022 Campbellton 26 776 0.051 14 000 5
4-023 Matane 112 039 0.051 57 000 20
4-024 Mont-Joli 37 788 0.051 19 000 6
4-025 Rimouski 56 619 0.051 29 000 10
4-026 Rivière-du-Loup 82 869 0.051 42 000 10
4-027 La Malbaie 28 193 0.051 14 000 5
4-028 Chicoutimi-Jonquière 218 377 0.065 142 000 50
4-029 Montmagny 56 808 0.051 29 000 10
4-030 Québec 904 330 0.065 588 000 200
4-031 Sainte-Marie 53 258 0.051 27 000 9
4-032 Saint-Georges 71 425 0.051 36 000 10
4-033 Lac-Mégantic 24 223 0.051 12 000 4
4-034 Thetford Mines 42 019 0.051 21 000 7
4-035 Plessisville 22 772 0.051 12 000 4
4-036 La Tuque 16 219 0.051 8 000 3
4-037 Trois-Rivières 265 152 0.065 172 000 60
4-038 Louiseville 21 708 0.051 11 000 4
4-039 Asbestos 29 744 0.051 15 000 5
4-040 Victoriaville 56 684 0.051 29 000 10
4-041 Coaticook 12 981 0.051 7 000 2
4-042 Sherbrooke 250 227 0.065 163 000 50
4-043 Windsor 16 777 0.051 9 000 3
4-044 Drummondville 112 390 0.065 73 000 20
4-045 Cowansville 29 083 0.051 15 000 5
4-046 Farnham 29 593 0.051 15 000 5
4-047 Granby 105 440 0.051 54 000 20
4-048 St-Hyacinthe 92 092 0.051 47 000 20
4-049 Sorel 58 740 0.051 30 000 10
4-050 Joliette 161 106 0.051 82 000 30
4-051 Montréal 4 352 037 0.232 10 097 000 3 370
4-052 Sainte-Agathe-des-Monts 77 087 0.051 39 000 10
4-053 Hawkesbury 64 131 0.051 33 000 10
4-054 Mont-Laurier/Maniwaki 48 488 0.051 25 000 8
4-055 Ottawa 1 452 852 0.1 1 453 000 480
4-056 Pembroke 82 200 0.051 42 000 10
4-057 Arnprior/Renfrew 31 367 0.051 16 000 5
4-058 Rouyn-Noranda 43 108 0.051 22 000 7
4-059 Notre-Dame-du-Nord 16 023 0.051 8 000 3
4-060 La Sarre 19 349 0.051 10 000 3
4-061 Amos 25 096 0.051 13 000 4
4-062 Val-d'Or 44 619 0.051 23 000 8
4-063 Roberval/Saint-Félicien 58 438 0.051 30 000 10
4-064 Baie-Comeau 43 675 0.051 22 000 7
4-065 Port-Cartier/Sept-Îles 46 983 0.051 24 000 8
4-066 Chibougamau 45 730 0.051 23 000 8
4-067 Cornwall 69 729 0.051 36 000 10
4-068 Brockville 70 563 0.051 36 000 10
4-069 Gananoque 13 150 0.051 7 000 2
4-070 Kingston 177 314 0.065 115 000 40
4-071 Napanee 42 993 0.051 22 000 7
4-072 Belleville 154 982 0.065 101 000 30
4-073 Cobourg 65 180 0.051 33 000 10
4-074 Peterborough 165 516 0.065 108 000 40
4-075 Lindsay 45 902 0.051 23 000 8
4-076 Minden 20 813 0.051 11 000 4
4-077 Toronto 7 030 750 0.232 16 311 000 5 440
4-078 Alliston 129 279 0.051 66 000 20
4-079 Guelph/Kitchener 707 534 0.065 460 000 150
4-080 Fergus 30 010 0.051 15 000 5
4-081 Kincardine 185 818 0.051 95 000 30
4-082 Listowel/Goderich 84 257 0.051 43 000 10
4-083 Fort Erie 31 072 0.051 16 000 5
4-084 Niagara/St. Catharines 349 283 0.065 227 000 80
4-085 Haldimand/Dunnville 37 398 0.051 19 000 6
4-086 London/Woodstock/St. Thomas 678 149 0.065 441 000 150
4-087 Brantford 138 535 0.065 90 000 30
4-088 Stratford 51 339 0.051 26 000 9
4-089 Chatham 68 885 0.051 35 000 10
4-090 Windsor/Leamington 401 719 0.065 261 000 90
4-091 Wallaceburg 30 983 0.051 16 000 5
4-092 Sarnia 123 953 0.051 63 000 20
4-093 Strathroy 46 727 0.051 24 000 8
4-094 Barrie 352 290 0.065 229 000 80
4-095 Midland 49 059 0.051 25 000 8
4-096 Gravenhurst/Bracebridge 61 892 0.051 32 000 10
4-097 North Bay 104 524 0.051 53 000 20
4-098 Parry Sound 21 123 0.051 11 000 4
4-099 Elliot Lake 29 520 0.051 15 000 5
4-100 Sudbury 178 872 0.065 116 000 40
4-101 Kirkland Lake 32 402 0.051 17 000 6
4-102 Timmins 42 086 0.051 21 000 7
4-103 Kapuskasing 38 024 0.051 19 000 6
4-104 Kenora/Sioux Lookout 64 826 0.051 33 000 10
4-105 Iron Bridge 20 162 0.051 10 000 3
4-106 Sault Ste. Marie 80 833 0.051 41 000 10
4-107 Marathon 24 923 0.051 13 000 4
4-108 Thunder Bay 121 061 0.065 79 000 30
4-109 Fort Frances 20 095 0.051 10 000 3
4-110 Steinbach 64 764 0.051 33 000 10
4-111 Winnipeg 830 151 0.065 540 000 180
4-112 Lac du Bonnet 58 076 0.051 30 000 10
4-113 Morden/Winkler 51 609 0.051 26 000 9
4-114 Brandon 103 743 0.051 53 000 20
4-115 Portage la Prairie 21 273 0.051 11 000 4
4-116 Dauphin 75 508 0.051 39 000 10
4-117 Creighton/Flin Flon 22 228 0.051 11 000 4
4-118 Thompson 50 665 0.051 26 000 9
4-119 Estevan 46 006 0.051 23 000 8
4-120 Weyburn 22 877 0.051 12 000 4
4-121 Moose Jaw 55 141 0.051 28 000 9
4-122 Swift Current 46 219 0.051 24 000 8
4-123 Yorkton 63 024 0.051 32 000 10
4-124 Regina 260 382 0.065 169 000 60
4-125 Saskatoon 306 824 0.065 199 000 70
4-126 Watrous 27 288 0.051 14 000 5
4-127 Battleford 99 433 0.051 51 000 20
4-128 Prince Albert 130 446 0.051 67 000 20
4-129 Lloydminster 37 539 0.051 19 000 6
4-130 Northern Saskatchewan | Saskatchewan-Nord 37 064 0.051 19 000 6
4-131 Medicine Hat/Brooks 107 233 0.051 55 000 20
4-132 Lethbridge 189 709 0.065 123 000 40
4-133 Stettler/Oyen/Wainwright 51 420 0.051 26 000 9
4-134 High River 120 208 0.051 61 000 20
4-135 Strathmore 45 478 0.051 23 000 8
4-136 Calgary 1 416 856 0.1 1 417 000 470
4-137 Red Deer 206 387 0.065 134 000 40
4-138 Wetaskiwin/Ponoka 54 340 0.051 28 000 9
4-139 Camrose 40 145 0.051 20 000 7
4-140 Vegreville 15 396 0.051 8 000 3
4-141 Edmonton 1 325 857 0.1 1 326 000 440
4-142 Edson/Hinton 49 814 0.051 25 000 8
4-143 Bonnyville 83 631 0.051 43 000 10
4-144 Whitecourt 32 669 0.051 17 000 6
4-145 Barrhead 23 437 0.051 12 000 4
4-146 Fort McMurray 73 953 0.051 38 000 10
4-147 Peace River 86 745 0.051 44 000 10
4-148 Grande Prairie 110 027 0.051 56 000 20
4-149 East Kootenay | Kootenay-Est 60 371 0.051 31 000 10
4-150 West Kootenay | Kootenay-Ouest 78 941 0.051 40 000 10
4-151 Kelowna 362 815 0.065 236 000 80
4-152 Vancouver 2 731 567 0.232 6 337 000 2 110
4-153 Hope 26 093 0.051 13 000 4
4-154 Victoria 458 861 0.065 298 000 100
4-155 Nanaimo 194 922 0.065 127 000 40
4-156 Courtenay 118 732 0.051 61 000 20
4-157 Powell River 26 865 0.051 14 000 5
4-158 Squamish/Whistler 74 365 0.051 38 000 10
4-159 Merritt 15 649 0.051 8 000 3
4-160 Kamloops 106 972 0.065 70 000 20
4-161 Ashcroft 15 070 0.051 8 000 3
4-162 Salmon Arm 51 024 0.051 26 000 9
4-163 Golden 6 854 0.051 3 000 1
4-164 Williams Lake 38 440 0.051 20 000 7
4-165 Quesnel/Red Bluff 23 558 0.051 12 000 4
4-166 Skeena 56 234 0.051 29 000 10
4-167 Prince George 94 607 0.051 48 000 20
4-168 Smithers 37 646 0.051 19 000 6
4-169 Dawson Creek 68 387 0.051 35 000 10
4-170 Yukon 35 928 0.051 18 000 6
4-171 Nunavut 35 975 0.051 18 000 6
4-172 Northwest Territories | Territoires du Nord-Ouest 41 668 0.051 21 000 7
  Total 35 150 716 0.133 46 830 000 15 584

Annex F: The clock stage

1. The clock auction format that ISED will use for the 3800 MHz auction is a bidding process that includes two stages: a clock stage and an assignment stage. The clock stage determines the number of generic blocks that a bidder will win of each product and the prices of the generic blocks. The assignment stage determines the specific frequencies that will be assigned to each winning bidder and the additional prices for the specific frequencies.

F1. Clock stage products

2. In service areas without encumbered blocks, ISED will auction 25 unencumbered blocks in 3650-3900 MHz. In service areas with encumbered blocks, ISED will auction five unencumbered blocks in 3650-3700 MHz and 20 encumbered blocks in 3700-3900 MHz.

3. A pair consisting of a service area and a category (unencumbered or encumbered) is referred to as a “product”. A product's supply equals the number of available blocks in that service area and category pair.

F2. Clock stage overview

4. The clock stage consists of a sequence of clock rounds. The licences are auctioned simultaneously over multiple clock rounds.

5. In Round 1, each bidder indicates the number of blocks it demands for each product at the opening bid prices (listed in annex E).

6. Starting in Round 2, a range of prices is associated with each product. The start-of-round price is the lowest price in the range and the clock price is the highest price in the range. In Round 2, a product's start-of-round price equals the product's opening bid price. A bidder can bid either to maintain its demand for a product at the round's clock price or to request to change its demand at a price associated with the round.

7. After each round, bids are processed to determine the number of blocks held by each bidder of each product (the processed demands) and the posted prices of each product for the round, as described in sections F5 through F9 of this annex. 

8. If, after the bids have been processed, aggregate demand exceeds supply for at least one product, the auction proceeds to another clock round. The posted price of a product for a round becomes the start-of-round price for the next round.

9. If, after the bids have been processed, there is no excess demand for any product in any service area, the clock stage ends and the auction proceeds to the assignment stage.

F3. Bidding requirements

10. In each round, bidders submit their bids subject to the requirements and restrictions described in this section.

11. In any round, a bidder is not allowed to submit a collection of bids if the associated eligibility points exceed the bidder's eligibility for the round.

12. In Round 1, a bidder can submit at most one bid per product and can only submit bids at the opening bid prices.

13. Starting in Round 2, a bid to maintain a bidder's demand must be at the clock price.

14. The bid price of a bid to change demand must be between the start-of-round price and the clock price (inclusively), and must be:

  • a multiple of $10 for bid prices below $10,000
  • a multiple of $100 for bid prices between $10,000 and $100,000
  • a multiple of $1,000 for bid prices above $100,000

15. Starting in Round 2, a bidder may submit up to five bids to change demand for a product in a round as long as the quantities in those bids are monotonic in price. Therefore, if all of the bids submitted by a bidder in a round for a product are sorted in ascending order of price, the corresponding quantities must all either increase or decrease starting from the bidder's processed demand from the previous round. For example, if the bidder's processed demand is four blocks at the start-of-round price of $100,000 and the clock price for this round is $120,000, the bidder can submit a bid to reduce its demand to two blocks at the price of $105,000 and another bid to further reduce its demand to zero blocks at the price of $115,000.

16. In all rounds, a bidder cannot submit multiple bids for a given product at a single price. For example, the bidder cannot submit a bid for two blocks of a given product and a bid for zero blocks of that product both at the same price.

17. In all rounds, the quantity of blocks in a bid for a product cannot be negative and cannot exceed the product's supply.

18. In all rounds, a bidder is not allowed to submit bids that would result in it exceeding the 100 MHz cross-band cap across the 3500 MHz and 3800 MHz bands. This implies that, for a given service area, a bidder's bid cannot exceed 10, less the number of licences that the bidder has been assigned in the 3500 MHz band in that service area.

19. In the case of a service area with two categories, the sum of a bidder's bids for the unencumbered and encumbered products cannot exceed 10, less the number of licences that the bidder has been assigned in the 3500 MHz band in that service area. If the bidder submits multiple bids per product in a round after Round 1, the auction software will determine whether the bids are compliant with the cross-band cap based on the bid with the highest price for each product; in other words, based on the quantities that the bidder would have of each product after bid processing for the round, if all of its bids for the two products were applied.

F4. Bids to change demand

20. Starting in Round 2, a bidder will be able to make bids requesting changes in demand by indicating a price between the start-of-round price and the clock price for the round (including both end points) at which its demand for blocks in a product changes. Permitting bidders to submit bids below the clock price (i.e. intra-round bidding) will enable ISED to set relatively large price increments, thereby speeding up the auction, without running the risk that a jump in the clock price will overshoot the market clearing price (the point at which demand for blocks equals the available supply).

21. The auction system will apply a bid requesting a change in demand to the maximum extent possible as described in section F8 of this annex. If it is not possible for the auction system to apply the bid in its entirety, the bid may be applied partially.

22. A bid requesting a reduction in demand indicates that a bidder is willing to pay up to the bid price for a quantity of blocks that is unchanged from its previously demanded quantity. At the bid price, the bidder is willing to accept the unchanged quantity, the changed quantity, or any quantity in between. At a price above the bid price up to the clock price for the round (or, if the bidder submitted more bids for the product at higher prices, up to the bid price of the next bid), the bidder is willing to accept the changed quantity indicated by the bid.

23. A bid requesting a reduction in demand for a product will be applied in full if there is sufficient demand for the product. In other words, the auction system will apply the reduction provided that there is sufficient aggregate demand by all bidders at the time the bid is considered during bid processing to allow the reduction to be applied without the aggregate demand falling below the supply. If there is some excess demand for the product, but not enough to grant the full requested reduction, the auction system will partially apply the reduction, thereby reducing the bidder's demand by fewer than the requested number of blocks.

24. A bid requesting an increase in demand indicates that at all prices associated with this round (i.e. prices between the start-of-round price and the clock price, inclusively), the bidder is willing to accept its previously demanded quantity, the bid quantity, or any quantity in between. This is because if a bidder is willing to acquire a given number of blocks at the clock price, it must be willing to acquire at least the given number of blocks at all prices less than the clock price. The particular price specified in a bid to increase demand may nonetheless have an impact on whether the bid is processed, as the price affects the order in which this bid is processed compared to the other bids in the round.

25. A bid requesting an increase in demand will be applied subject to the bidder's eligibility and the application of the cross-band spectrum cap. That is, a bid will not be applied in full if it would cause the bidder's processed activity to exceed the bidder's eligibility or if it would cause the bidder to exceed the cap. If a bid to increase demand cannot be applied in full, the auction system will apply the increase to the extent possible.

F5. Bid processing

26. Sections F6 to F9 of this annex describe how bids are processed after a round, beginning in Round 2. First, missing bids are included as described in section F6. Then, the order in which bids to change demand will be processed is determined as described in section F7. Bids are processed in that order to determine the processed demand of each bidder for each product for the round, as described in section F8. Finally, the posted prices for the round are calculated as described in section F9.

F6. Missing bids

27. For each product for which the bidder had positive processed demand in the previous round, if the bidder does not submit a bid for that product during the current round, the bidder will be deemed to have placed a bid to reduce its demand for that product to zero blocks at the start-of-round price. All such missing bids are processed in the same way as bids submitted by a bidder to purchase a zero quantity of blocks in this product at the start-of-round price.

F7. Order of processing bids

28. The price point of a bid for a product indicates the percentage of the distance between the start-of-round price and the clock price for the product. That is, the price point is equal to the bid price minus the start-of-round price, divided by the clock price minus the start-of-round price. Thus, the price point of a bid is between 0% and 100%, inclusively. For example, if the start-of-round price is $100,000 and the clock price is $105,000, then a bid at $102,000 will have a price point of (102,000-100,000)/(105,000-100,000) = 40%.

29. Bids to change demand are processed in increasing order of price point. That is, a bid with a lower price point is considered to have higher priority than a bid with a higher price point. Pseudo-random numbers are used to break any ties.

F8. Determination of processed demands

30. Bids to maintain demand are always applied during bid processing, whereas bids to change demand are applied to the maximum extent possible.

31. The bid processing algorithm described in this section maintains a queue of all bids to change demand that have not been applied in their entirety. The highest-priority bid to change demand that has not yet been considered is processed. The algorithm checks to what extent the bid can be applied using the most-recently-determined processed demands.

32. A bid to increase demand is applied to the maximum extent possible while ensuring that:

  1. the bidder's processed activity (after applying the bid) does not exceed its eligibility for the round; and
  2. the bidder's processed demand(s) for the service area together with the bidder's existing holdings in the 3500 MHz band do not exceed the cross-band cap.

Note that it may not be possible to apply a bid because of insufficient bidding eligibility if another bid submitted by the bidder, requesting a reduction, is not applied due to insufficient aggregate demand, thereby not freeing up sufficient eligibility points to support the requested bid to increase demand for another product. This can occur even though the bidder's submitted activity does not exceed its eligibility. Moreover, it may not be possible to apply a bid because of the cross-band cap if another bid submitted by the bidder, requesting a reduction for the other category in that service area, is not applied due to insufficient aggregate demand. Note that, because the cross-band cap is checked during bid submission pursuant to paragraph 18, the cross-band cap condition will always be satisfied during bid processing for a bid to increase demand in a service area with a single category, but it may be necessary to apply the cap condition in paragraph (b) above in a service area with two categories.

33. A bid to reduce demand is applied to the maximum extent possible while ensuring that the reduction does not cause aggregate demand to fall below supply for that product (or to fall further below supply, if it is already below supply). If the aggregate demand for the product is less than or equal to the supply, then the bid to reduce demand for the product is not applied at all.

34. If a bid is not applied in its entirety, then it is placed in the queue so that the remaining part may be applied later. 

35. Whenever a bid is applied either partially or in its entirety, the queue is re-tested to determine whether it is possible to apply any bids in the queue (either partially or entirely) according to the conditions described above; if so, the highest-priority bid is applied to the maximum extent possible. When a bid has been applied in its entirety, it is removed from the queue; otherwise, it is kept in the queue so that the remaining part may be applied later. The re-testing of the queue is iterated until no bids remaining in the queue can be applied (either partially or entirely) while satisfying the conditions above. Then the next bid from the round is processed, until (1) all bids from the round have been processed, and (2) no bids in the queue can be applied. At that point, all bids remaining in the queue are discarded.

36. The demands of a bidder following the processing of the bids for the round are referred to as its processed demands.

F9. Determination of posted prices

37. After the round's processed demands have been determined, the auction system calculates the posted price of each product as follows:

  1. If the aggregate demand for the product exceeds the product's supply, the posted price will be set equal to the product's clock price for the round.
  2. If the aggregate demand for the product equals the product's supply and at least one bid to reduce demand for the product was applied (either entirely or partially), the posted price will be set equal to the highest bid price among all bids to reduce demand for the product that were applied (either entirely or partially). In other words, the posted price will be the price at which a reduction caused demand to equal supply. 
  3. If the aggregate demand for the product is less than or equal to the product's supply and no bid to reduce demand for the product was applied (either entirely or partially), the posted price will be set to be equal to the round's start-of-round price for the product.

F10. Bid processing example

38. In this example, we consider a product with a supply of 25 blocks and an opening bid price of $10,000. Table F1 below summarizes the price ranges and bids for Round 1 through Round 4 in this example.

Table F1: Price ranges and bids for bid processing example
  Round 1
[$10,000]
Round 2
[$10,000 - $11,000]
Round 3
[$11,000 - $13,000]
Round 4
[$11,500 - $13,000]
Bids of B1 8 @ $10,000 8 @ $11,000 7 @ $11,500 7 @ $13,000
Bids of B2 8 @ $10,000 8 @ $11,000 8 @ $13,000 8 @ $13,000
Bids of B3 6 @ $10,000 6 @ $11,000 6 @ $13,000 6 @ $13,000
Bids of B4 4 @ $10,000 4 @ $11,000 4 @ $13,000 4 @ $13,000
Aggregate demand 26 26 25 25
Posted price $10,000 $11,000 $11,500 $11,500

39. Four bidders (B1, B2, B3, and B4) are bidding for the product. In Round 1, bidders submit their bids at the opening bid price of $10,000. B1 and B2 bid for eight blocks each, B3 bids for six blocks and B4 bids for four blocks. The aggregate demand is 26, and the posted price equals the opening bid price.

40. In Round 2, the start-of-round price is $10,000 and the clock price is $11,000. Each bidder bids to maintain its demand for the product at the round's clock price. The aggregate demand is still 26, which exceeds supply. Thus, as per paragraph 37 (a) above, the posted price equals the clock price.

41. In Round 3, the start-of-round price is $11,000 and the clock price is $13,000. B1 bids to reduce its demand to seven blocks at $11,500, and each other bidder bids to maintain its demand for the product at the round's clock price. Since there is one unit of excess demand, the bid of B1 to reduce demand from eight to seven blocks is applied. The aggregate demand is now 25, which equals supply. Thus, as per paragraph 37 (b) above, the posted price equals $11,500, which is the price of the bid that caused aggregate demand to equal supply.

42. In Round 4, the start-of-round price is $11,500 and the clock price is $13,000. Each bidder bids to maintain its demand for the product at the round's clock price. The aggregate demand remains equal to supply and no bids to reduce demand are applied (since there are no such bids). Thus, as per paragraph 37 (c) above, the posted price equals the start-of-round price (i.e. $11,500). Note that this is the price at which a bidder's reduction had caused aggregate demand to equal supply (in a previous round).

F11. Next round's clock prices

43. A product's start-of-round price for the next round is equal to the posted price.

44. The price increment for a product is set to x% of the product's start-of-round price, where x% is the increment percentage for the round. The round's clock price is then equal to the start-of-round price plus the price increment. Clock prices greater than $10,000 will be rounded up to the nearest $1,000; and clock prices less than $10,000 will be rounded up to the nearest $100.

F12. Information in the clock rounds

45. Following every clock round, bidders will be provided with information on their own bidding activity from previous rounds and their eligibility for the next round. In addition, each bidder will be informed of the aggregate demand and posted price for each product from the previous round and the clock price of each product for the next round. Bidders will not be informed about the individual bids submitted by other bidders or about the remaining eligibility of other bidders.

F13. Eligibility points

46. Each product has been assigned a specific number of eligibility points in proportion to the opening bid price of the licence. Annex E lists the eligibility points associated with each product.

47. Eligibility points are used in the determination of the pre-auction financial deposits and in the activity rules applied during the auction, which influence the bids that bidders can submit. In its application to participate in the auction, each potential bidder must indicate the maximum number of points it wishes to be able to bid for and win in the auction, and submit a corresponding financial deposit. A bidder's initial eligibility defines an upper limit on the total number of eligibility points for which the bidder can bid in a round. As in past spectrum auctions, bidders begin each clock round with a set number of eligibility points, which determines their maximum activity level for the given clock round.

48. A bidder will not be able to increase its eligibility after the application deadline to participate in the auction.

F14. Activity rule

49. In any round, a bidder will not be allowed to submit a collection of bids if the eligibility points associated with the bids exceed the bidder's eligibility for the round.

50. In order to maintain its eligibility from the previous round, the bidder's activity must correspond to a certain percentage of its eligibility for that round. This percentage is called the "activity requirement." ISED will set the activity requirement between 90% and 100% in all clock rounds. The precise figure for the initial activity requirement will be communicated to all qualified bidders before the auction begins. The activity requirement may change during the auction at ISED's discretion. Bidders will be notified prior to these changes taking effect.

51. A bidder's submitted activity for a round is equal to the eligibility points associated with its submitted demands for the round before these demands have been processed. In other words, a bidder's submitted activity level reflects the bidder's demands before they are applied by the auction system during bid processing. A bidder's processed activity for a round is equal to the eligibility points associated with its processed demands after the bids for the round have been processed. In other words, a bidder's processed activity level will reflect its demands as applied by the auction system during bid processing.

52. In Round 1, a bidder's eligibility is determined by the number of points acquired with its financial deposit.

53. In Round 2, a bidder's eligibility is determined by its submitted activity in Round 1; that is, the eligibility points associated with its submitted demands in Round 1, divided by the activity requirement (e.g. divided by 0.95, if the activity requirement is 95%) and rounded down to a whole number. Further, the bidder's eligibility for Round 2 is not allowed to exceed the bidder's eligibility for Round 1. Mathematically, a bidder's eligibility for Round 2 is defined as the minimum of:

  1. the bidder's eligibility for Round 1; and
  2. SA(1) / AR(1), rounded down to a whole number;

where SA(1) denotes the bidder's submitted activity for Round 1, and AR(1) denotes the activity requirement for Round 1.

54. In subsequent rounds, a bidder's eligibility is determined by its processed activity and its submitted activity. Specifically, a bidder's eligibility for the next round is determined by: the maximum of its processed activity in the current round; and the minimum of its processed activity in the previous round and its submitted activity in the current round. This maximum is divided by the activity requirement and rounded down to a whole number. Further, the bidder's eligibility for the next round is not allowed to exceed the bidder's eligibility for the current round. Mathematically, a bidder's eligibility for Round t+1, where t+1>2, is defined as the minimum of:

  1. the bidder's eligibility for Round t; and
  2. max{PA(t), min[PA(t-1), SA(t)]} / AR(t), rounded down to a whole number;

where PA(t) denotes the bidder's processed activity for Round t, SA(t) denotes the bidder's submitted activity for Round t and AR(t) denotes the activity requirement for Round t.

55. Examples of the activity rule in the clock rounds are described below, in paragraphs 56 to 59.

56. Example of maintaining demand: In Round 5, the activity requirement is 95% and the eligibility of Bidder X is 620 eligibility points. In Round 4, the processed activity of Bidder X is 600 points. In Round 5, Bidder X is bidding to maintain its demand on 600 points worth of licences and does not submit any bids to change demand. Therefore, the bidder's processed activity after the round will be 600 points (because bids to maintain demand are always applied during bid processing). That is, the bidder's processed activity in Round 5 is equal to bidder's submitted activity in Round 5. An application of the formula from paragraph 53 (b) yields 631 points. Thus, the bidder will maintain its Round 5 eligibility (620 points) for the next round.

57. Example of reducing demand: In Round 6, the activity requirement is 95% and the eligibility of Bidder Y is 2,400 eligibility points. In Round 5, the processed activity of Bidder Y is 2,280 points. Suppose that, in Round 6, Bidder Y submits bids to reduce its demand for some products and that if all these reductions are applied during bid processing, its processed demand will be only 1,700 points. If all of the bidder's bids to reduce demand are applied during bid processing, then the bidder's eligibility in the next round will be 1,789 points (1,700 divided by the activity requirement and rounded down; i.e. 1,700/0.95). If some of the bidder's bids to reduce demand are not applied during bid processing and the bidder's processed activity for the round is 2,000, then its eligibility in the next round will be 2,105 points (2,000 divided by the activity requirement and rounded down; i.e. 2,000/0.95).

58. Example where submitted activity exceeds processed activity: In Round 7, the activity requirement is 100% and the eligibility of Bidder Z is 600 eligibility points. In Round 6, the processed activity of Bidder Z is also 600 points. Products A, B, and C have 200, 400 and 600 eligibility points respectively. The bidder currently has processed demand of one block for product A and one block for product B. The bidder submits the following bids: a bid to reduce its demand for A to zero blocks; a bid to reduce its demand for B to zero blocks; and a bid to increase its demand for C to one block. If all three bids are applied during bid processing, then the bidder's processed activity will be 600 and thus the bidder will maintain its eligibility after this round. If the bid to reduce demand for A is applied but the bid to reduce demand for B is not applied due to insufficient excess demand, then the bid to increase demand for C cannot be applied because that would cause the bidder's processed activity to exceed its eligibility for the round. In that case, the bidder's processed activity will be 400 but the bidder's eligibility in the next round will be 600 points because the bidder's submitted activity for Round 7 and the bidder's processed activity for Round 6 are both equal to 600 points. That is, an application of the formula from paragraph 53 (b) yields 600 points.

59. In continuation of the previous example, suppose that in Round 8, Bidder Z again submits a bid to reduce its demand for B to zero blocks; and a bid to increase its demand for C to one block. If the bid to reduce demand for B is not applied again due to insufficient excess demand, the bidder's eligibility in Round 9 will be 400 points (400 divided by the activity requirement; i.e. 400/1). However, if in Round 8, Bidder Z submits a bid to increase its demand for A to one block and to maintain its demand for B for one block (i.e. if the bidder chooses to return to its bids as they were at the start of Round 7), this bidder will have enough eligibility to submit these bids and will keep its eligibility for Round 9 at 600 points.

F15. Conclusion of bidding in the clock stage

60. The clock stage will conclude for all products in all service areas after the first round in which, after the bids have been processed, there is no excess demand for any product in any service area. This round is referred to as the final clock round.

61. At this point, ISED will announce to bidders that the clock rounds have ended and that the auction will proceed to the assignment stage (see annex G).

62. After the final clock round, each bidder will know how many blocks it has won in each product and the associated price. The price for a generic block in a product will be the product's posted price for the final clock round. The assignment stage will then determine the specific frequencies that will be assigned to each winning bidder and the additional price for the specific frequencies.

Annex G: The assignment stage

1. After the conclusion of the clock stage, the auction will advance to the assignment stage, where the specific frequencies for the generic licences will be determined. Bidders that have won one or more generic licences in the clock stage will have the option to participate in the assignment stage.

2. The 25 blocks in the 3800 MHz band are labeled W through AW, as shown in figure G1 below.

Figure G1: 3800 MHz band plan

Figure G1: 3800 MHz band plan
Description of figure G1

Figure G1 shows the band plan for the 3800 MHz band consisting of 25 unpaired blocks of 10 MHz ranging from 3650 MHz to 3900 MHz. The first four blocks from 3650 MHz to 3690 MHz are lettered W to Z. The remaining twenty-one blocks from 3690 MHz to 3900 MHz are lettered AA through AW (noting that there are no blocks labeled AI or AO).

3. The geographic unit for bidding in the assignment stage will be the “assignment area”. An assignment area may comprise a single Tier 4 service area or a combination of two or more Tier 4 service areas that satisfy the criteria of paragraph 7 of this annex. The assignment of specific frequencies determined for an assignment area will apply to each and every service area in this assignment area.

4. The assignment stage will consist of a sequence of assignment rounds. All 25 blocks of an assignment area will be assigned in the same assignment round, irrespective of whether there are encumbered blocks in the assignment area. In each assignment round, each winning bidder will be presented with a set of bidding options for each category and assignment area being assigned in the round where the bidder has winnings from the clock stage.

5. Winning bidders do not have to place bids in the assignment stage if they do not have an assignment preference, as they are guaranteed the number of generic licences that they have won in the clock stage. Each bidder has both a right and an obligation to obtain one of the frequency range options presented to it for each category and assignment area where the bidder has winnings.

6. Each bidder will be assigned these blocks in a contiguous manner only within each category in any given assignment area. Moreover, if there are two categories in an assignment area and one or more bidders have won blocks in both categories, each cross-category winner (i.e. each bidder with winnings in both categories) will have the option to “opt in” or “opt out” for contiguity across the two categories. In the event that at least one cross-category winner opts in for contiguity, the auction software will guarantee that one of those bidders will be assigned contiguous spectrum across the two categories.

G1. Assignment areas

7. In support of simplifying the assignment stage and facilitating the assignment of contiguous spectrum across service areas, two or more Tier 4 service areas will be combined into an assignment area when the following conditions all hold:

  1. the Tier 4 service areas form a contiguous geographic region;
  2. the Tier 4 service areas are in the same Tier 2 service area;
  3. each of the Tier 4 service areas has the same number of unencumbered and encumbered blocks; and
  4. for each of the Tier 4 service areas, the same bidders won the same number of unencumbered and encumbered blocks.

8. Condition 7 (c)  above implies that a service area with 25 unencumbered blocks will never be combined with a service area that has five unencumbered and 20 encumbered blocks.

9. Example where service areas without encumbrances are combined into an assignment area: Consider two services areas that are geographically contiguous, are in the same Tier 2 area, and do not have any encumbrances. In each of these service areas, Bidders 1, 2, 3, 4 and 5 won five unencumbered blocks each. Since the same bidders won the same number of blocks, the two service areas will be combined into an assignment area, and each bidder will be assigned the same frequency blocks in each of these service areas. For example, if Bidder 2 is assigned frequency blocks W.X.Y.Z.AA in one of these service areas, then Bidder 2 will also be assigned blocks W.X.Y.Z.AA in the other service area.

10. Example where service areas with encumbrances are combined into an assignment area: Service areas I and II are geographically contiguous and are in the same Tier 2 area. Each of these service areas has five unencumbered and 20 encumbered blocks. Table G1 below lists the number of unencumbered and encumbered blocks won by each bidder. Since the same bidders won the same number of blocks in each category, the two service areas will be combined into an assignment area, and each bidder will be assigned the same frequency blocks in service areas I and II. For example, if Bidder 2 is assigned frequency blocks W.X.Y in service area I, then Bidder 2 will also be assigned blocks W.X.Y in service area II.

Table G1: Example of service areas with encumbrances that are combined into an assignment area
Service area Number of unencumbered blocks won Number of encumbered blocks won
I Bidder 1: 2 blocks
Bidder 2: 3 blocks
Bidder 1: 2 blocks
Bidder 2: 0 blocks
Bidder 3: 8 blocks
Bidder 4: 4 blocks
Bidder 5: 6 blocks
II Bidder 1: 2 blocks
Bidder 2: 3 blocks
Bidder 1: 2 blocks
Bidder 2: 0 blocks
Bidder 3: 8 blocks
Bidder 4: 4 blocks
Bidder 5: 6 blocks

11. Example of service areas that are not combined into an assignment area: Table G2 below provides an example of two service areas that cannot be combined into an assignment area. Service areas III and IV are geographically contiguous and are in the same Tier 2 area. Each of these service areas has five unencumbered and 20 encumbered blocks. Table G2 lists the number of blocks won by each bidder in the clock stage in each category. The same bidders won the same number of unencumbered blocks in each of these service areas, but not the same number of encumbered blocks. For instance, Bidder 1 won five encumbered blocks in service area III but only won four encumbered blocks in service area IV. Thus, the two service areas cannot be combined into an assignment area. This means that a bidder will not bid for assignments in service areas III and IV together and will not necessarily be assigned the same frequency blocks in these two service areas.

Table G2: Example of service areas with encumbrances that are not combined into an assignment area
Service area Number of unencumbered blocks won Number of encumbered blocks won
III Bidder 1: 2 blocks
Bidder 2: 2 blocks
Bidder 3: 1 block
Bidder 1: 5 blocks
Bidder 2: 5 blocks
Bidder 3: 5 blocks
Bidder 4: 5 blocks
IV Bidder 1: 2 blocks
Bidder 2: 2 blocks
Bidder 3: 1 block
Bidder 1: 4 blocks
Bidder 2: 5 blocks
Bidder 3: 6 blocks
Bidder 4: 5 blocks

G2. Order for the assignment rounds

12. ISED will conduct the assignment rounds in descending order of population. This process will enable bidders to know which specific frequencies they have won in the most populated assignment areas prior to their participation in the assignment rounds for the less populated assignment areas. If some service areas are combined, the population of the resulting assignment area will be defined to equal the sum of the populations of the Tier 4 service areas that it comprises.

13. ISED will conduct a separate assignment round for each of the eight most populated assignment areas, sequentially, in descending order of population.

14. Once the eight most populated assignment areas have been assigned, bidding for the remaining assignment areas will be conducted in parallel. That is, bidding for assignments in multiple assignment areas will take place during the same assignment round and the bidders will be required to submit their bids for the assignment areas included in the same assignment round at the same time. This will reduce the duration of the assignment stage.

15. After the assignment of the eight most populous assignment areas, all remaining assignment areas will be ranked by population, from highest to lowest, and divided into six sessions per assignment round, subject to the constraint that each assignment round will not include more than one assignment area from within the same Tier 2 service area. This constraint will be relaxed when there are fewer than six assignment areas remaining to be assigned. In addition, if there are six or more assignment areas remaining to be assigned and it is not possible to include six assignment areas in an assignment round while satisfying the constraint, then that assignment round may include fewer than six assignment areas. ISED is of the view that the session sizes and the mix of geographic areas provide a balance between the need for a timely conclusion of the assignment stage and the ability of bidders to handle assignments in different assignment areas that are run in parallel.

16. Table G3 illustrates the preliminary sequence of assignment rounds in the case that each assignment area consists of a single Tier 4 service area (i.e. no service areas are combined). In that case, there would be 36 assignment rounds. The eight most populated service areas would be assigned sequentially in the first eight assignment rounds. Assignment rounds 9 through 34 would include six service areas each, assignment round 35 would include five service areas, and assignment round 36 would include only three service areas. The number of assignment rounds may be smaller if some service areas are combined into assignment areas. 

17. The approach for ordering the assignment rounds in the 3800 MHz auction is the same as the approach used for the 3500 MHz auction. No distinction is made between service areas with one category and service areas with two categories for the purpose of ordering the assignment rounds.

Table G3: Sequence of the assignment rounds when no service areas are combined
Round number Tier Tier name Tier population Round population
1 4-077 Toronto 7,030,750 7,030,750
2 4-051 Montréal 4,352,037 4,352,037
3 4-152 Vancouver 2,731,567 2,731,567
4 4-055 Ottawa 1,452,852 1,452,852
5 4-136 Calgary 1,416,856 1,416,856
6 4-141 Edmonton 1,325,857 1,325,857
7 4-030 Québec 904,330 904,330
8 4-111 Winnipeg 830,151 830,151
9 4-079 Guelph/Kitchener 707,534 2,429,203
4-154 Victoria 458,861
4-010 Halifax 435,820
4-125 Saskatoon 306,824
4-037 Trois-Rivières 265,152
4-001 St. John's 255,012
10 4-086 London/Woodstock/St. Thomas 678,149 1,976,337
4-151 Kelowna 362,815
4-124 Regina 260,382
4-042 Sherbrooke 250,227
4-028 Chicoutimi-Jonquière 218,377
4-137 Red Deer 206,387
34 4-020 Grand Falls 24,936 113,874
4-038 Louiseville 21,708
4-105 Iron Bridge 20,162
4-059 Notre-Dame-du-Nord 16,023
4-159 Merritt 15,649
4-140 Vegreville 15,396
35 4-109 Fort Frances 20,095 80,396
4-043 Windsor 16,777
4-002 Placentia 15,304
4-161 Ashcroft 15,070
4-069 Gananoque 13,150
36 4-036 La Tuque 16,219 36,054
4-163 Golden 6,854
4-041 Coaticook 12,981

G3. Bidding options

18. For each assignment round, each bidder will be presented with a set of bidding options for each category in each assignment area assigned in the round in which the bidder has winnings. Even if two or more service areas have been combined into an assignment area, a bidder with winnings in those service areas will be presented a single set of bidding options for each category in the assignment area.

19. As an example, suppose that the sequence of assignment rounds is as shown in table G3, above. Service area 4-161, which has both unencumbered and encumbered blocks, is assigned in round 35. A bidder that has won solely unencumbered or encumbered blocks in this service area will be presented with one set of bidding options. A bidder that has won both unencumbered and encumbered blocks in this service area will be presented with two sets of bidding options (one for each category).

20. For a given category in a service area, a bidder will be presented with all contiguous bidding options that are consistent with the number of licences that the bidder has won, regardless of the number of blocks won by other bidders. For example, a bidder that has won four unencumbered blocks in a service area with 25 unencumbered blocks will be presented with 22 bidding options: W.X.Y.Z, X.Y.Z.AA, Y.Z.AA.AB, Z.AA.AB.AC, etc. A bidder that has won four unencumbered blocks in a service area with five unencumbered blocks will be presented with two bidding options: W.X.Y.Z and X.Y.Z.AA. As another example, a bidder that has won two unencumbered blocks and two encumbered blocks in a service area with five unencumbered and 20 encumbered blocks will be presented with two sets of bidding options: W.X, X.Y, Y.Z, and Z.AA for the unencumbered category; and AB.AC, AC.AD, etc. for the encumbered category.   

21. The bidder might not be able to win some of its bidding options if they would preclude other bidders from being assigned contiguous spectrum in that category. The purpose of presenting all contiguous bidding options, regardless of the number of licences to be assigned to each bidder, is to maintain anonymous bidding as much as possible and thereby reduce the potential for gaming behavior in the assignment stage.

22. A bidder may specify a bid amount for each of its bidding options for a given category and assignment area. The bid amount must be non-negative, must be a multiple of $1,000, and cannot exceed $999,999,000. The auction system will treat the bid value to be zero for any bidding option for which a bidder submits no bid.

23. In a service area with two categories, a cross-category winner will also be given the opportunity to submit a “contiguity bid” representing its bonus value for receiving both its highest frequency unencumbered bidding option and its lowest frequency encumbered bidding option. By submitting a positive contiguity bid, the bidder “opts in” for contiguity across the categories. If the contiguity bid is zero, the bidder “opts out”. If the bidder does not submit a contiguity bid, the auction system will treat the contiguity bid value to be zero.

G4. Overview of assignment and pricing determination

24. After each assignment round, the auction system will determine the assignment for each assignment area in that round. This determination will be done separately for each assignment area.

25. Recognizing the efficiency gains from having contiguous blocks of spectrum, ISED will assign bidders contiguous spectrum within each category in an assignment area. Moreover, in an assignment area with two categories, if one or more bidders have won blocks in both categories and have opted in for contiguity, then one of those bidders will be assigned contiguous spectrum across the two categories.

26. For an assignment area with a single category, ISED will use the same approach as in previous spectrum auctions with an assignment stage. Specifically, the auction system will determine the assignment and the pricing as described in sections G5 and G6 respectively.

27. For an assignment area with two categories in which no cross-category winner has opted in for contiguity, the auction system will determine, separately for each category, the assignment and the pricing as described in sections G5 and G6 respectively.

28. For an assignment area with two categories in which exactly one cross-category winner has opted in for contiguity, the licences that are contiguous across the two categories will be automatically assigned to this bidder, and this bidder's assignment price will equal zero.

29. For an assignment area with two categories in which two or more cross-category winners have opted in for contiguity, the auction system will consider the sum of each such bidder's contiguity bid, its bid for its highest frequency unencumbered bidding option and its bid for its lowest frequency encumbered bidding option. The bidder with the highest such bid sum will be assigned licences that are contiguous across the two categories, and that bidder's assignment price will equal the second-highest such bid sum. If there is a tie for the highest bid sum, the tie will be broken by a pseudo-random number generator built into the auction software and the assignment price of the tie-break winner will equal the highest bid sum (since a tie implies that there are at least two bidders with that bid sum).

30. For an assignment area with two categories, in which one bidder has been assigned contiguous unencumbered and encumbered licences pursuant to paragraphs 28 or 29, the auction system will then determine: (1) the assignment and pricing for the remaining unencumbered blocks, following the approach described in sections G5 and G6, but excluding this bidder and the unencumbered licences that it has already been assigned; and (2) the assignment and pricing for the remaining encumbered blocks, following the approach described in sections G5 and G6, but excluding this bidder and the encumbered licences that it has already been assigned. In determining the assignment and pricing for the remaining blocks, the auction system will make no further reference to “contiguity bids”.

31. Example with two cross-category winners in a service area: Consider an assignment area with two categories in which two bidders have winnings in both categories. Bidder 1 (B1) has won two unencumbered and two encumbered blocks, and Bidder 2 (B2) has won one unencumbered and three encumbered blocks. Each of these bidders will be presented with two sets of bidding options: one for unencumbered blocks and one for encumbered blocks. Each bidder's bidding options are listed in table G4 below.

Table G4: Bidding options for example with two cross-category winners
Bidder Unencumbered bidding options Encumbered bidding options
B1 W.X, X.Y, Y.Z, Z.AA AB.AC, AC.AD, AD.AE, etc.
B2 W, X, Y, Z, AA AB.AC.AD, AC.AD.AE, AD.AE.AF, etc.

Each of these bidders will also have the opportunity to submit a contiguity bid. We consider the following cases:

Case 1: Both bidders submitted positive contiguity bids. In this case, both bidders have opted in to contiguity. To determine which of these two bidders is assigned contiguous spectrum, the auction system will consider the following bid sums:

  1. B1's bid sum = (B1's contiguity bid) + (B1's bid for Z.AA) + (B1's bid for AB.AC)
  2. B2's bid sum = (B2's contiguity bid) + (B2's bid for AA) + (B2's bid for AB.AC.AD)

The bidder with the highest bid sum will be assigned contiguous spectrum. Suppose that the bid sum is larger for Bidder 1. Then, Bidder 1 will be assigned licences Z, AA, AB, and AC, and its assignment price will equal Bidder 2's bid sum (shown in (b) above). Once it has been determined that Bidder 1 is assigned contiguous spectrum, the auction system will determine the assignments for the remaining bidders, separately for each category, excluding Bidder 1 and the licences that it has already been assigned. That is, licences Z, AA, AB, and AC, as well as any bidding options containing those licences, will be excluded.

Case 2: Only one bidder submitted a positive contiguity bid. Suppose that Bidder 1 submitted a contiguity bid of zero and Bidder 2 submitted a positive contiguity bid. This means that Bidder 1 has opted out of contiguity, while Bidder 2 has opted in. Then, Bidder 2 will be assigned contiguous spectrum (namely, licences AA, AB, AC and AD) and its assignment price will be zero. The auction system will determine the assignments for the remaining bidders, separately for each category, excluding Bidder 2 and the licences that it has already been assigned. That is, licences AA, AB, AC and AD, as well as any bidding options containing those licences, will be excluded.

Case 3: Both bidders submitted contiguity bids of zero. This means that both bidders have opted out of contiguity. The auction system will determine the assignments for all bidders, separately for each category, as described in sections G5 and G6. In this case, there is no guarantee, though it is possible, that one of the cross-category winners will be assigned contiguous spectrum across the two categories.

G5. Assignment for a given category and assignment area

32. For each category in each assignment area in a given assignment round, ISED will use a solver to identify the combination of specific assignments of licences that result in the highest bid amount while ensuring that each bidder is assigned contiguous spectrum within the category. In the case of an assignment area in which one bidder has been assigned contiguous unencumbered and encumbered licences pursuant to paragraphs 28 or 29, this bidder, as well as the licences that have already been assigned to it, will be excluded from the optimizations described below.

33. A separate optimization will be solved for each assignment area and category pair. In the event of a tied outcome with more than one specific assignment producing the same total value, the solver will prefer assignments where all unsold blocks are contiguous. Any further ties will be broken by a pseudo-random number generator built into the auction software.

34. Specifically, if there are two or more unsold blocks in the assignment area and category pair, ties will be broken in two steps. First, the solver will determine whether the highest bid amount remains the same when all unsold blocks are assigned contiguous spectrum. If this is the case, then the solver will select an assignment that achieves the maximum value where each bidder is assigned contiguous spectrum and all unsold blocks are assigned contiguous spectrum. Otherwise, the solver will select an assignment that achieves the maximum value where each bidder is assigned contiguous spectrum (but unsold spectrum is not contiguous).

G6. Pricing for a given category and assignment area

35. In the case of an assignment area in which one bidder has been assigned contiguous unencumbered and encumbered licences pursuant to paragraphs 28 or 29, the assignment price of the bidder that has been assigned contiguous spectrum is determined as described in paragraphs 28 or 29. This section describes the pricing for all other cases.

36. ISED will use a second-price rule to determine the prices to be paid by winning bidders in the assignment stage. More specifically, ISED will apply bidder-optimal core prices and will use the “nearest Vickrey” approach in determining the assignment prices. A separate assignment price will be determined for each category in each assignment area where the bidder has winnings.

37. The final price paid by a winning bidder will be the sum of the posted price(s) of the final clock round for all generic licences that the bidder won plus any associated assignment price(s).

38. An assignment bid is a package bid for the specific frequency locations of a collection of blocks for a given category in a given assignment area. The assignment prices will be determined from the set of assignment bids for the category in the assignment area. The assignment price is attributable to the entire collection of blocks assigned to a given bidder in a given category and assignment area and not to individual blocks that comprise the package. Given the pricing rules, the assignment price will be equal to or less than the corresponding bid amount, and could even be zero.

39. For the purpose of calculating assignment prices, the Vickrey price for each Bidder J is calculated as follows. First, from the value of the winning combination of assignment bids, subtract Bidder J's winning bid (value A). Next, recalculate the winning combination of assignment bids in the hypothetical situation where all Bidder J's assignment bids are equal to zero, as if Bidder J did not have a preference for any of the assignment options that it was presented with (value B). The Vickrey price for Bidder J is defined as the value of the winning combination of assignment bids with all Bidder J's bids set to equal zero (value B) minus the sum of the winning assignment bids for all bidders other than Bidder J (value A), that is, value B minus value A.

40. An extra payment beyond the Vickrey prices is sometimes required as a result of complementarities. In the event that an extra payment is required, the calculation of the additional payment to be paid by a given bidder will be weighted based on the number of blocks being assigned to that bidder in the given category and assignment area.

41. For a given category and assignment area, the assignment prices must satisfy the following conditions:

  • First condition: Each assignment price must be positive or zero and not more than the dollar amount of the winning assignment stage bid.
  • Second condition: The set of assignment prices must be sufficiently high that there is no bidder or group of bidders willing to pay more for an alternative feasible assignment. If there is only one set of assignment prices that satisfies the first two conditions, this determines the assignment prices.
  • Third condition: If there are many sets of assignment prices that fulfil the first and second conditions, the set(s) of assignment prices minimizing the sum of assignment prices across winning assignment stage bids is (are) selected. If there is only one set of assignment prices that satisfies these three conditions, this will determine the assignment prices.
  • Fourth condition: If there are many sets of assignment prices that satisfy the first three conditions, the set of assignment prices that minimizes the weighted sum of squares of differences between the assignment prices and the Vickrey prices will be selected. The weighting is relative to the number of blocks being assigned to the bidder in that category and assignment area. This approach for selecting among sets of assignment prices that minimize the sum of assignment prices across winning assignment bids is referred to as the “nearest Vickrey” approach.

42. A software algorithm will be used to determine the set of assignment prices that meet the conditions outlined above.

43. The following is an example of how assignment prices are calculated. This example is based on the 2013 Spectrum Auction Design paper [1,085 KB] by Peter Cramton.

44. For expository ease, in this example there are six blocks in a given category and service area, A, B, C, D, E and F. Suppose that there are five bidders, 1, 2, 3, 4, 5, bidding for the assignment of six blocks. In the clock stage, Bidders 1, 2, 4 and 5 won one block in this category and service area and Bidder 3 won two blocks. Bidders 1 and 4 would like to get Block A, Bidders 2 and 5 would like to get Block B and Bidder 3 would like to get Blocks A and B. Bidders do not put any value on other blocks available for the assignment. The following bids are submitted (the subscript of “b” designates the bidder):

  • b1{A} = $28
  • b2{B} = $20
  • b3{AB} = $32
  • b4{A} = $14
  • b5{B} = $12

45. The bids of the five bidders are represented in figure G2.

46. In this example, the highest value combination of bids would assign Block A to Bidder 1, Block B to Bidder 2, and Blocks C, D, E and F to Bidders 3, 4 and 5 generating $48 in value. The distribution of Blocks C, D, E and F among Bidders 3, 4 and 5 will be decided by a tie-breaking algorithm based on random numbers. There is no other assignment of the blocks that yields a higher value.

47. To calculate the Vickrey price for Bidder 1, its winning bid ($28) is subtracted from the value of the winning combination ($48), resulting in $20. Next, the winning combination of packages is recalculated for the hypothetical situation in which Bidder 1's bids are excluded. The best assignment, excluding Bidder 1, assigns Block A to Bidder 4 at $14 and Block B to Bidder 2 at $20, resulting in $34. The Vickrey price for Bidder 1 is the value of the winning combination of packages with all Bidder 1's bids excluded ($34) less the sum of the winning assignment stage bids for all bidders other than Bidder 1 ($20); that is, its Vickrey price is $14 ($34 - $20).      

48. Similarly, to calculate the Vickrey price for Bidder 2, its winning bid ($20) is subtracted from the value of the winning combination ($48), resulting in $28. Next, the winning combination of packages is recalculated for the hypothetical situation in which Bidder 2's bids are excluded. The best assignment, excluding Bidder 2, assigns Block A to Bidder 1 and Block B to Bidder 5, resulting in a value of $40. The Vickrey price for Bidder 2 is the value of the winning combination of packages with all Bidder 2's bids excluded ($40) less the sum of the winning assignment stage bids for all bidders other than Bidder 2 ($28); that is, its Vickrey price is $12 ($40 - $28).

49. Hence, the Vickrey outcome is for Bidder 1 to pay $14 for the assignment of Block A and for Bidder 2 to pay $12 for Block B. Bidders 3, 4, and 5 are assigned Blocks C, D, E and F at zero price. Total revenues with these payments are $14 + $12 = $26. As shown in figure G2, this means that Bidder 1 can reduce its bid to $14 before being displaced by Bidder 4. Similarly, Bidder 2 can reduce its bid to $12 before being displaced by Bidder 5.

50. However, these payments sum to $26, which is less than Bidder 3's bid of $32 for the assignment of Blocks A and B. Therefore, Bidder 1 and Bidder 2 must split an additional payment of $6 ($32 - $26) in order to ensure that their combined payment is greater than that of Bidder 3, satisfying the condition that no other bidder or group of bidders were prepared to pay more for an alternative feasible assignment. To do so, Bidder 1 and Bidder 2 must pay, collectively, at least $32.

Figure G2: Example of calculating assignment prices

Figure G2: Example of calculating assignment prices
Description of figure G2

This figure is a graph illustrating the example in paragraph 44 of annex G, which demonstrates how to calculate assignment prices using a second-price rule and why an additional payment beyond second prices is sometimes required.

51. Because the same number of blocks are being assigned to Bidder 1 and to Bidder 2, the additional payment of $6 is split equally between the two bidders in this example. Each bidder is therefore paying an additional $3 above its Vickrey price, with Bidder 1 paying $17 ($14 + $3) and Bidder 2 paying $15 ($12 + $3), as shown in figure G2.

52. However, if each bidder was being assigned a different number of blocks, the two bidders would split the extra payment proportionately, in reference to the number of blocks being assigned to each bidder (the fourth condition). For example, if two blocks were being assigned to Bidder 1 and one block was being assigned to Bidder 2 then Bidder 1 would pay twice as much as Bidder 2 of the extra payment.

G7. Information at the end of each assignment round

53. Following the end of each assignment round, after the results have been verified, each bidder will be informed of the specific licences that it has won and the assignment price to be paid, for each category and assignment area assigned in the round. In doing this, bidders will know their own results from one assignment round before participating in a subsequent assignment round.

G8. Final price

54. At the end of the assignment stage, ISED will determine the final price that each winning bidder will be required to pay for the licences it has been assigned. This final price will be equal to the sum of the posted price(s) of the final clock round for all generic licences that the bidder won plus any associated assignment price(s).

G9. Information at the end of the assignment stage

55. Following the end of the assignment stage, winning bidders will be informed of the specific licences that they have won, as well as the final price to be paid.

G10. Information after the end of the auction

56. The following information will be made publicly available following the conclusion of the auction process:

  1. the list of winning bidders, licences won, and prices to be paid
  2. the bids submitted by each bidder in every clock round, including the bidder's identity
  3. the start-of-round and clock prices for each product in every clock round
  4. the assignment bids submitted by each bidder, including the bidder's identity, and the corresponding assignment prices