DGTP-014-06 Spectrum Policy and Consultation on a ...FILE/aws-consultation-e.pdf · Advanced Wireless Services and Review of the Mobile Spectrum Cap Policy (DGTP-007-03). The paper

DGTP-002-07 February 2007

Spectrum Management and Telecommunications

Consultation on a Framework to Auction Spectrum in the 2 GHz Range including Advanced Wireless Services

Aussi disponible en français

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Department of Industry Radiocommunication Act Notice No. DGTP-002-07 – Consultation on a Framework to Auction Spectrum in the 2 GHz Range including Advanced Wireless Services This notice announces the publication of provisions to support the release of frequency bands in the 2 GHz range. The document outlines the results of the consultation process undertaken in 2003 on Advanced Wireless Services (AWS). It also initiates further consultation on a number of technical, operational and licensing issues in the 2 GHz range including AWS, Personal Communications Services (PCS), and the band 1670-1675 MHz. Advanced Wireless Services comprise a wide range of applications, such as cellular telephony, data, multimedia, Internet Protocol (IP)-based applications and broadband Internet access using third-generation (3G) cellular and other technologies. The industry has supported Industry Canada in its plans to identify prime mobile spectrum for AWS so as to keep Canada in step with developments in North America and Europe which support a modern telecommunications infrastructure. This paper announces changes to the Canadian Table of Frequency Allocations for bands in the 1710-2200 MHz range, designates spectrum for AWS, and provides for the expansion of the 1900 MHz PCS bands as well as the licensing of the band 1670-1675 MHz. It also outlines a transition process to make the spectrum available for AWS applications when and where required. This paper will also address additional spectrum utilization issues such as the eligibility to access spectrum, competition, a band plan, technical and operational considerations, the licensing process and principles, and the proposed auction design. Industry Canada invites interested parties to provide their views and comments on the issues raised in the consultation portion of the paper (i.e. Part II) announced through this notice. Parties should submit their comments no later than May 25, 2007 to ensure consideration. Shortly after the close of the comment period, all comments received will be posted on Industry Canada’s Spectrum Management and Telecommunications website at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/home. The Department will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted until June 27, 2007. Submitting Comments Respondents are requested to provide their comments in electronic format (WordPerfect, Microsoft Work, Adobe PDF or ASCII TXT) to the following e-mail address: [email protected], along with a note specifying the software, version number and operating system used. Written submissions should be addressed to the Director General, Telecommunications Policy Branch, Industry Canada, 1612A, 300 Slater St., Ottawa, Ontario, K1A 0C8. All submissions should cite the Canada Gazette, Part I, publication date, the title, and the notice reference number (DGTP-002-07).

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/home

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/home

mailto:[email protected]

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Obtaining Copies Copies of this notice and documents referred to are available electronically on the Spectrum Management and Telecommunications website, at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/home. Official versions of Canada Gazette notices can be viewed on the Canada Gazette website at: http://www.gazette.gc.ca/index-eng.html. Printed copies of the notices can be ordered by calling the sales counter of Canadian Government Publishing at (819) 941-5995 or 1 800 635-7943. February 16, 2007 ________________ Leonard St-Aubin Director General Telecommunications Policy Branch

http://ic.gc.ca/eic/site/smt-gst.nsf/eng/home

http://ic.gc.ca/eic/site/smt-gst.nsf/eng/home

http://gazette.gc.ca/

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Contents

Intent .......................................................................................................................................................... 1

Background ............................................................................................................................................... 1

Part I: Provisions for the Allocation and Utilization of the Various Bands to be Auctioned ........................................................................................................................................... 2

1. Changes to the Canadian Table in the Frequency Ranges 1710-2200 MHz and 1670-1675 MHz.................................................................................................................................... 2 1.1 Discussion of the Changes to the Canadian Table in the Frequency Ranges 1710-1850 MHz

and 2110-2200 MHz .................................................................................................................... 3

2. Spectrum Utilization........................................................................................................................... 7 2.1 Bands 1710-1755 MHz and 2110-2155 MHz.............................................................................. 7 2.2 Bands 1910-1920 MHz and 1990-2000 MHz.............................................................................. 8 2.3 Bands 2020-2025 MHz and 2155-2180 MHz.............................................................................. 8 2.4 Band 1670-1675 MHz.................................................................................................................. 9

3. Treatment of Incumbent Licensees ................................................................................................... 9 3.1 General Principles........................................................................................................................ 9 3.2 Transition Provisions for Fixed Services in the Band 2110-2170 MHz for the Implementation

of AWS in the Bands 1710-1755 MHz and 2110-2155 MHz ................................................... 10 3.3 Transition Provisions for the PCS Expansion Band .................................................................. 12 3.4 Transition Provisions for the 1670-1675 MHz Band................................................................. 12

Part II: Further Consultation on the Auction ............................................................................... 13

1. Telecommunications Policy Considerations ................................................................................... 13 1.1 Background................................................................................................................................ 13

2. Fostering a Competitive Wireless Market...................................................................................... 13 2.1 Telecommunications Objectives................................................................................................ 13 2.2 Telecommunications Policy Review Panel (TPRP) .................................................................. 14 2.3 Competition Principles............................................................................................................... 14 2.4 The Canadian Market................................................................................................................. 15 2.5 Barriers to Market Entry ............................................................................................................ 19 2.6 Discussion.................................................................................................................................. 20 2.7 Addressing the Potential for New Entry .................................................................................... 21

3. Mandated Roaming .......................................................................................................................... 24

4. Technical Considerations ................................................................................................................. 25 4.1 Spectrum Bands ......................................................................................................................... 25 4.2 Service Areas ............................................................................................................................. 28 4.3 Co-channel/Adjacent Area Coordination................................................................................... 30 4.4 Adjacent Channel/Same Area Coordination.............................................................................. 30 4.5 Sharing Issues with Other Services............................................................................................ 30 4.6 Equipment Certification............................................................................................................. 31 4.7 International Coordination ......................................................................................................... 31

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5. Licensing Process .............................................................................................................................. 32 5.1 General....................................................................................................................................... 32 5.2 Overview of the Simultaneous Multiple-round Auction ........................................................... 33 5.3 Licence Term, Renewal and Implementation Requirements ..................................................... 34 5.4 Conditions of Licence ................................................................................................................ 36 5.5 Post-auction Licensing Process.................................................................................................. 39

6. Financial Aspects of the Auction ..................................................................................................... 39 6.1 Opening Bids ............................................................................................................................. 39 6.2 Pre-Auction Deposits ................................................................................................................. 40 6.3 Bid Payment............................................................................................................................... 41

7. Consultation Process......................................................................................................................... 41

8. Submitting Comments ...................................................................................................................... 41 8.1 Instructions for Filing ................................................................................................................ 41 8.2 Public Access ............................................................................................................................. 42

9. Further Information ......................................................................................................................... 42

Annex 1 - Population, Points and Opening Bids for PCS Expansion and AWS Spectrum in Tiers 2, 3 and 4 .................................................................................................................................. 43

Annex 2 - Population, Points and Opening Bids for 1670-1675 MHz Spectrum in Tier 2............... 50

Annex 3 - Changes to Canadian Table of Frequency Allocations ...................................................... 51

Consultation on a Framework to Auction Spectrum in the 2 GHz Range including Advanced Wireless Services DGTP-002-07

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Intent This paper initiates consultation on a framework for the competitive licensing of spectrum as announced in the Canada Gazette DGTP-002-07. Part I makes allocation changes to the Canadian Table of Frequency Allocations for bands in the 1710-2200 MHz range, designates spectrum for Advanced Wireless Services (AWS), expands the 1900 MHz PCS licensed-bands and finalizes the allocation changes for the band 1670-1675 MHz as proposed in DGTP-004-05. Part II of this paper initiates consultation on a framework for the competitive licensing of this spectrum. The Annexes provide further detailed information related to Parts I and II. The industry and the Department have been developing plans to identify mobile spectrum for AWS so as to keep the Canadian wireless infrastructure in step with developments in North America and Europe. The development and use of world class information and communication technologies and services will further enable Canadians to fully participate in the new economy. This spectrum may be used for a wide range of service applications such as cellular telephony, data, multimedia and Internet Protocol (IP)-based applications and broadband access, which may use third-generation (3G) cellular and other advanced technologies. This paper also outlines a transition process to make the spectrum available for AWS, when and where required. In addition it addresses additional spectrum utilization issues, eligibility to access spectrum, competition, band plans, technical and operational considerations, the licensing process, and principles and proposed auction rules. The Department anticipates that based on this public consultation process and other considerations, a framework will be developed to make the new resources available in a fair, open and transparent fashion. The policy and licensing procedures will be released later in 2007. Background In October 2003, Industry Canada released a consultation paper entitled Consultation on Spectrum for Advanced Wireless Services and Review of the Mobile Spectrum Cap Policy (DGTP-007-03). The paper initiated the public consultation to open new spectrum in the 1710-2200 MHz range for AWS, with high mobility service capability as a main component. There was also a proposal made to expand the existing licensed PCS bands. Among the general matters raised for public comment were: proposed changes to the Canadian Table of Frequency Allocations for several bands; proposals for spectrum utilization policies; transition policies for dealing with incumbents; a review of the mobile spectrum cap policy; and


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measures to promote advanced mobile telephony services in rural Canada. Thirteen responses were received from interested parties and posted on the Department’s website. The public submissions were given careful consideration. The decision was made to rescind the mobile spectrum cap policy.1 In addition, a new policy was promulgated aimed at encouraging digital roaming for rural cellular operators in particular circumstances.2 In 2005, Industry Canada released the notice DGTP-004-05 entitled Proposals and Changes to the Spectrum in Certain Bands Below 1.7 GHz, in which the Department invited comments on designating the band 1670-1675 MHz for flexible use for wireless access within the fixed and mobile service allocations. This current paper sets out the provisions for the designation of the band 1670-1675 MHz and initiates consultation on its licensing framework. All of the frequency ranges addressed in this proceeding, with the exception of 1670-1675 MHz, have been identified internationally for what is known as International Mobile Telecommunications (IMT) applications which are focused on high mobility services. This international identification does not preclude the use of these bands by other primary services. The Department recognizes the benefits of economies of scale for consumer products, which are achievable with international harmonization. Respondents to the AWS consultation paper expressed that it will be important for Canada to harmonize its spectrum usage and technical requirements with the international community and especially with the United States. Part I: Provisions for the Allocation and Utilization of the Various Bands to be Auctioned 1. Changes to the Canadian Table in the Frequency Ranges 1710-2200 MHz and

1670-1675 MHz The Department is making a number of changes to the Canadian Table of Frequency Allocations (herein refer to as the Canadian Table) to reflect, in part, the international decisions taken at World Radiocommunication Conference 2000 (WRC-2000) and World Radiocommunication Conference 2003 (WRC-03) to provide flexibility for administrations to designate spectrum for IMT applications. The changes will also address the evolution of spectrum resources for mobile and mobile-satellite services in North America and allow for planning of new spectrum for access including AWS. Frequency allocations are a first and important step in developing spectrum utilization policies which foster the implementation of new radiocommunication services. These modifications to the Canadian Table are intended to reflect the public interest in introducing important wireless services which will benefit Canadians and respond to the marketplace. The specific bands consulted on included 1710-1755 MHz paired with 2110-2155 MHz which would provide 90 MHz of wireless access spectrum for AWS. Also included were changes to portions of the bands 1850-1990 MHz, 1990-2025 MHz, 2160-2200 MHz and 2155-2160 MHz within the mobile and

1 DGTP-010-04, released August 2004. 2 DGTP-006-05, released July 2004.


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fixed service allocations. The Department also sought comments on frequency bands from 1755 MHz to 1850 MHz and from 2160-2200 MHz. The band 1670-1675 MHz was discussed in the consultation paper Proposals and Changes to the Spectrum in Certain Bands Below 1.7 GHz published in 2005. Most of the comments received suggested that for subscriber-based services to achieve economies of scale and to facilitate roaming, Canada should harmonize with the United States. The policy provisions adopted through this proceeding are consistent with North American developments and address the comments received during the various consultations. 1.1 Discussion of the Changes to the Canadian Table in the Frequency Ranges 1710-

1850 MHz and 2110-2200 MHz 1.1.1 Changes to the Canadian Table in the Bands 1710-1770 MHz and 2110-2170 MHz Table of Allocations In October 2003, the Department consulted on several proposed changes to the Canadian Table in the bands 1710-1850 MHz and 2110-2180 MHz with the view to allocate new spectrum for wireless access including high mobility applications. These changes included the raising of the mobile service to a primary allocation, removal of the footnote which limits mobile use to the Government of Canada, incorporation of new and modified international footnotes, and the addition of domestic footnotes to facilitate the transition to the new AWS systems. In general, all the responses received to the consultation supported the allocation changes to the Canadian Table for the 1710-1755 MHz and 2110-2155 MHz bands. As a result, the Department is changing the spectrum policy and is modifying allocations to enable wireless access applications, including high mobility applications. This is consistent with the position taken by the Canadian government and industry in preparation for WRC-03. 1.1.2 Changes to the Canadian Table in the Band 1710-1850 MHz The Department is making the following changes to the Canadian Table in the band 1710-1850 MHz as described below and as shown in Annex 3: Splitting of the band 1710-1850 MHz into two new bands: 1710-1755 MHz and 1755-1850 MHz; Raising of mobile service to a primary allocation in the band 1710-1755 MHz; Incorporation of international footnote 5.384A, which identifies the band for the implementation of

IMT-2000; Removal of the reference to international footnote 5.385 from the band 1755-1850 MHz as it doesn’t

apply to this portion of the band; Removal of the reference to Canadian footnotes C5 and C33 from the band 1710-1755 MHz as they no

longer apply to this portion of the band;


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Addition of a new Canadian footnote C37 in the band 1755-1780 MHz and in other bands, regarding the possible designation for AWS, subject to a future public consultation.

1.1.3 Changes to the Canadian Table in the Band 2110-2180 MHz The Department is making the following changes to the Canadian Table in the band 2110-2180 MHz as described below and as shown in Annex 3: Splitting of the band 2120-2165 MHz into two new bands: the band 2120-2155 MHz; and the band

2155-2165 MHz, which will be incorporated in the extended band 2155-2180 MHz; Suppression of Canadian footnote C35A as it is no longer needed; Incorporation of international footnote 5.388, which identifies the band 2110-2160 MHz for the

implementation of IMT-2000; Addition of a new Canadian footnote C37 addressing the possible future designation of 2155-

2180 MHz for AWS subject to a future spectrum utilization policy; Suppression of the mobile-satellite service (MSS) allocation in the band 2160-2180 MHz. 1.1.4 Changes to the Canadian Table in the Bands 1850-1990 MHz, 1990-2025 MHz and

2180-2200 MHz Summary of the Consultation In the 2003 consultation on AWS, the Department invited comments on proposed changes to the Canadian Table with respect to portions of the bands 1850-1990 MHz, 1990-2025 MHz and 2160-2200 MHz. This was done with the view to allocate new spectrum for high mobility service applications and to align commercial spectrum, such as the extension of the PCS bands and the harmonization of the mobile satellite bands, on a North American basis. A first element of the proposal in the band 1850-1990 MHz, was to add international footnotes pertaining to IMT-2000 and a new Canadian footnote addressing potential designation changes to the band 1910-1920 MHz to support licensed PCS subject to a spectrum utilization policy. Comments received supported the incorporation of the international IMT-2000 footnotes but cautioned on the adoption of the Canadian footnote to achieve continental harmonization, given that a decision has yet to be made by the U.S. on this frequency range. In the bands 1990-2025 MHz and 2160-2200 MHz, the Department proposed changes with a view to establish harmonized spectrum for North American mobile-satellite services and terrestrial wireless services. This included reducing the mobile satellite spectrum from 35+40 MHz to 20+20 MHz in the bands 2000-2020 MHz and 2180-2200 MHz. Comments were received in support of continental harmonization.


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Provisions Related to the Bands With regard to mobile satellite interests in Canada, the Department has already informed interested parties of its plan to re-allocate some spectrum to the terrestrial mobile service and has informed mobile satellite licensees and applicants in the 2 GHz range of its intention to limit mobile satellite to the revised bands 2000-2020 MHz and 2180-2200 MHz. Changes to the allocations are made to the bands 1990-2000 MHz, 2020-2025 MHz and 2160-2180 MHz to accommodate mobile and fixed services, subject to spectrum utilization policies. In addition, since the launch of the previous public consultation, the Department has proceeded in making more flexible accommodation for a wider range of licence-exempt PCS (LE-PCS) devices and applications in the band 1920-1930 MHz. With the anticipation of the use of band 1910-1920 MHz for licensed PCS, a moratorium on the certification and distribution of LE-PCS devices in this band was announced in Spectrum Advisory Bulletin SAB-001-05.3 These policy provisions aimed at harmonizing use of this spectrum in North America. 1.1.5 Changes to the Canadian Table in the Bands 1850-1990 MHz and 1990-2025 MHz The Department is making the following changes to the Canadian Table in the bands 1850-1990 MHz and 1990-2025 MHz as described below and as shown in Annex 3: Rearrangement of the bands 1990-2010 MHz and 2010-2025 into three new bands 1990-2000 MHz,

2000-2020 MHz and 2020-2025 MHz; Suppression of the mobile-satellite service allocation in the bands 1990-2000 MHz and 2020-

2025 MHz; Modification of Canadian footnote C36 to reflect the new bands for mobile-satellite service; Removal of Canadian footnote C36 from the bands 1990-2000 MHz and 2020-2025 MHz as it no

longer applies to these bands; Removal of international footnote 5.351A from the band 1990-2000 MHz as it no longer applies to

this band; Addition of new Canadian footnote C37 to the band 2020-2025 MHz regarding the possible

designation of AWS in this band, subject to a future consultation.

3 SAB-001-05, Policy Provisions to Support Licence-exempt Personal Communications Services (LE-PCS) in the Band

1920-1930 MHz and a Moratorium Imposed on the Band 1910-1920 MHz.


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Incorporation of international footnotes 5.384A to the band 1850-1885 MHz and 5.388A to the band 1885-1980 MHz, which identify these bands for the implementation of IMT-2000;

Incorporation of revised international footnote 5.351A for the mobile-satellite service in the band

2000-2010 MHz since it pertains to MSS allocations.

1.1.6 Changes to the Canadian Table in Band 2180-2200 MHz The Department is making the following changes to the Canadian Table in the band 2180-2200 MHz as described below and as shown in Annex 3: Reduction of the MSS band from 2165-2200 MHz to 2180-2200 MHz; Incorporation of revised international footnote 5.351A for the mobile-satellite service in the band

2180-2200 MHz since it pertains to MSS allocations; Removal of international footnotes 5.389C, 5.389E and 5.390 from the band 2180-2200 MHz as they

do not apply to this portion of the band. 1.1.7 Changes to the Canadian Table in the Band 1670-1675 MHz The 2005 edition of the Canadian Table of Frequency Allocations incorporated the decisions of the 2003 World Radiocommunication Conference, including allocations to the fixed and mobile services in the band 1670-1675 MHz and an allocation for MSS. Some regulatory provisions adopted at WRC-03 restricted the availability of the MSS spectrum (Earth-to-space) in part of North America. As previously stated, the Department determined that MSS spectrum should be harmonized in North America to ensure the viability of the service. While the MSS allocation to the bands 1518-1525 MHz and 1668-1675 MHz is entered in the Canadian Table, the use of these bands for MSS is withheld. Canadian footnote C31A indicates that the use of fixed and mobile services is subject to future policy review. Since the policy to enable the use of this spectrum by fixed and mobile service is stated in this document, footnote C31A will be deleted. Changes to the Canadian Table are shown in Annex 3.


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2. Spectrum Utilization 2.1 Bands 1710-1755 MHz and 2110-2155 MHz Scope of the AWS designation A number of respondents to the 2003 AWS consultation suggested that the Department should consider expanding the AWS bands to 1710-1770 MHz and 2110-2170 MHz in the longer term. Such an expansion would add an extra 30 MHz (15+15) of wireless access spectrum and allow further harmonization worldwide. It was also noted that this would enable manufacturers to provide handsets with a 60+60 MHz capability consistent with the usage of this band in Europe and Asia and thereby provide additional economies of scale. The Department has decided that in this round of consultation, the designation will be limited to the 45+45 MHz to align the spectrum in North America. As a result of the comments received, the extension of these bands could be the subject of a future spectrum utilization policy. This is reflected in a new Canadian footnote C37. Service Definition In the 2003 AWS consultation paper, the Department proposed that this spectrum be designated for AWS with a service capability of high mobility and fixed operations. The public comments, in general, supported this terminology in order to align service within North America. The limited amount of wireless access spectrum below 3 GHz puts pressure on the Department to continue to open up new bands and develop transition policies for the incumbents. A number of bands are under consideration for designation at the upcoming World Radiocommunication Conference. Current licensees in these bands have asked the Department to ensure that the spectrum already available for access is fully used before the Department contemplates vacating new bands. Opening new bands is justified because the use of the spectrum for wireless access applications (e.g. IMT) is very important. Numerous licensees of fixed services in the band will be transitioned out of the band at their cost to facilitate the deployment of wireless access applications. Since backhaul is very similar to the services being transitioned out and numerous bands are available for backhaul, this spectrum is not to be used for primarily backhaul purposes. Advanced Wireless Services are first and foremost subscriber based services to provide Canadians with access to the public telephone network and the Internet. Consequently, as part of the service definition, the AWS spectrum is available for wireless access applications. Flexibility is provided to the licensees within the context of wireless access applications within the mobile and fixed service allocations. While this spectrum is not to be used primarily for backhaul purposes, some technologies, such as mesh networks, intrinsically provide both access and backhaul; for greater flexibility, these networks will be considered as providing access.


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2.2 Bands 1910-1920 MHz and 1990-2000 MHz Summary of Consultation In the 2003 AWS consultation paper, the Department asked for comments on the interest and need to designate the bands 1910-1920 MHz and 1990-2000 MHz for the extension of the band 1850-1990 MHz for PCS or AWS. In general, comments received supported the Department’s intentions and rationale for this band. Some expressed concerns over the possible interference problems resulting from the narrow duplex band separation of 10 MHz for the second pair of 5+5 MHz (1915-1920 and 1995-2000 MHz). These technical issues need to be addressed before the licensing of the second pair of 5+5 MHz (1915-1920 MHz and 1995-2000 MHz). Possible interference to MSS systems at 2 GHz from PCS systems operating in the new extended band will be investigated. Provisions Related to the Bands The Department is designating the bands 1910-1920 MHz and 1990-2000 MHz for licensed PCS service. A first paired block of 5+5 MHz (1910-1915/1990-1995 MHz) will be made available at the same time as AWS. The second pair will be held in reserve until the technical issues referred to above have been addressed. The Department will consult the industry in order to develop suitable standards applicable to the 1915-1920/1995-2000 MHz bands and to ensure compatibility with adjacent services such as the MSS. 2.3 Bands 2020-2025 MHz and 2155-2180 MHz Summary of Consultation In the 2003 AWS consultation paper, the Department asked for comments on the interest and need to designate the bands 2020-2025 MHz and 2155-2180 MHz for particular terrestrial services or applications. Most respondents agreed that these bands should be the subject of a future spectrum utilization policy for the introduction of AWS. Others expressed the view that it was premature to develop these policies at this time. As previously stated, many respondents expressed the view that the Department should consider the extension of the AWS bands, pairing 1755-1770 MHz with 2155-2170 MHz, given possible requirements for additional spectrum. Provisions Related to the Bands The Department is not ready at this time to designate or license the bands 2020-2025 MHz and 2155-2180 MHz for AWS until potential service applications, band pairing, and technology are clear. The use of the bands 1755-1780 MHz, 2020-2025 MHz and 2155-2180 MHz will be addressed in a future public consultation as per Canadian footnote C37.


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2.4 Band 1670-1675 MHz Summary of Consultation Through the release of Canada Gazette notice DGTP 004-05, the Department requested comments on the use of the band 1670-1675 MHz. A number of entities have expressed interest in having this band opened for flexible use of fixed and mobile services. Currently trials are being conducted under developmental licences in the band. Provisions Related to the Band Therefore the Department designates the band 1670-1675 MHz for fixed and mobile services (except aeronautical mobile) and seeks comments on the licensing framework for the assignment of this spectrum in Part II in document. As stated previously, Canadian footnote C31A is no longer required and is suppressed. 3. Treatment of Incumbent Licensees 3.1 General Principles The Minister plans the allocation and use of the radio frequency spectrum pursuant to the provisions of the Radiocommunication Act. Section 40 of the Radiocommunication Regulations specifically provides that the assignment of a frequency does not confer a monopoly on the use of the frequency or any right of continuing tenure in respect of the frequency. It is the general policy of Industry Canada to effect the displacement of frequency assignments, only where and when required, so as to minimize disruption. The Department recognizes the significance of providing reasonable notice to inform spectrum users of any conditions or circumstances that might result in the displacement of services. All costs associated with displacement of frequency assignments are and will remain the responsibility of the spectrum users. The Government of Canada bears no responsibility for any or all costs and expenses incurred by the displacement of frequency assignments and, accordingly, does not have a responsibility or intent to financially compensate spectrum users who are displaced. As new services are introduced, arrangements may be made between new radio users and incumbents on a voluntary basis, as a contractual matter between private parties to the extent that such arrangements are consistent with the provisions of the spectrum transition policy. These are long-standing principles that have been used successfully for many years to introduce new radio services while taking into account the needs of new operators and the incumbents.


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3.2 Transition Provisions for Fixed Services in the Band 2110-2170 MHz for the Implementation of AWS in the Bands 1710-1755 MHz and 2110-2155 MHz

In the AWS consultation paper, the existing usage of the bands 1710-1755 MHz and 2110-2155 MHz was reviewed. The Department placed a moratorium on the licensing of any new fixed microwave stations and on the addition of frequencies to existing microwave systems in the band 1710-1755 MHz. A moratorium had previously been imposed in 1995, on the further licensing of new fixed microwave stations in the bands 1990-2010 MHz and 2110-2200 MHz in order to facilitate the introduction of emerging wireless communications. The licensee in the Multipoint Communications System (MCS) and Multipoint Distribution System (MDS) return bands (2150-2162 MHz) was notified in 2004 that the licence would be subject to the transition policy applicable to the fixed service for the implementation of AWS. Furthermore, the Department is currently proceeding with a consultation process to implement a new band plan in the 2500 MHz band. The purpose of this planning activity is to enable the use of mobile services (for both forward and reverse channels within the same band) and new, more efficient technologies. Noting that respondents to the consultation proposed that the Department consider implementing AWS up to 2170 MHz at some future time, and noting the possible interference from the co-channel and adjacent channel MCS/MDS return links into AWS systems, the transition provisions for the implementation of AWS will be applicable to all fixed services in the band 2110-2170 MHz, including MCS/MDS applications. Fixed licensees will be afforded a notification period before displacement following the AWS licensing process. The Department proposed that the transition policy be based on the displacement of incumbents on a “where necessary” basis. The continued operation of existing microwave systems in remote and rural areas may be permitted if it does not prevent the deployment of planned AWS systems in accordance with the transition policy in this document. It was proposed that existing fixed stations would be subject to displacement with a minimum 1-year notification period if they affect the deployment of AWS in urban4 areas or in specific geographic areas such as along major highway corridors. It was also proposed that a 2-year minimum notification period apply to fixed stations in all other areas. In general, the comments received were supportive of the 1 and 2-year notification periods for displacement. Some incumbents indicated however that they would have difficulty complying with the 1-year displacement period and would need 2 years. In the AWS consultation, a new Canadian footnote C33A which included a date affecting the priority status of licensees was proposed. The comments suggested that the priority status date should be linked to the date of the future competitive licensing process and not to be an absolute date established independently. At this point in time, the Department has decided not to add the proposed footnote C33A.

4 Urban areas are defined in Statistics Canada Census Dictionary and in A National Overview - Population and Dwelling

Counts (Data Products: 1996 Census of Population), Catalogue number 93-357-XPB.


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Since the competitive licensing process is going to take place after the date suggested in the proposed footnote, the question of the timeline for the priority between services is no longer relevant. The transition policy adopted herein will be sufficient to address any question of priority. The Department is adopting the following transition policy for the bands 1710-1755 MHz and 2110-2170 MHz. The policy provides a reasonable notification period for the displacement of fixed services and allows for the timely deployment of new AWS services in these bands. The minimum notification period is as follows: By the release of this paper, fixed station frequency assignments located either near urban areas or along major highway corridors are given advance notice that they may be subject to displacement. This advanced notice will provide those licensees in urban areas that have a high probability of being displaced with extra time for planning purposes. Industry Canada will inform incumbents of the policy. Though the transition policy provides for a 1- or 2-year notice depending on location, this notice effectively extends the notification period by at least 1 year. After the close of the auction and licensing, the AWS operators must identify the specific fixed station frequency assignments that may prevent their deployment of AWS. This should include the areas, the spectrum required and timeframes for the deployment of AWS services, in order to enable the Department to issue displacement notifications to the incumbent licensees. The following minimum notification periods will apply: (i) For AWS implementation in urban areas having a population of 25,000 or more, and those along

major highway corridors, all fixed station frequency assignments subject to displacement will be afforded a minimum of a 1-year notification period; and

(ii) For AWS implementation in other markets, all fixed station frequency assignments subject to

displacement will be given a minimum of a 2-year notification period. (iii) Mutually acceptable arrangements between the new licensees and the incumbents may provide for

earlier displacement to the extent that such arrangements are consistent with the policy set out in this paper.

Regarding fixed systems above 2155 MHz identified as impeding the deployment of AWS, the Department is of the view that displacement of incumbent stations should be justified technically. Studies will be required to demonstrate interference as frequency separation provides additional protection to AWS systems. The Department is concerned about the possibility of premature displacement. AWS licensees have a responsibility to advise the Department of any delays or changes in their implementation plans, particularly where they affect the displacement of fixed service licensees. The Department may postpone some displacements where there are expected delays in deployment.


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3.3 Transition Provisions for the PCS Expansion Band The band 1910-1930 MHz was identified in 1994 for use by licence-exempt PCS operations. The Electro-federation Canada (EFC) undertook the task of coordinating the manufacturing industry’s activities in bringing these products to the marketplace. The activities were to include the identification of fixed microwave systems or particular links that would need to be displaced for the introduction of non-nomadic LE-PCS. Following the AWS consultation paper of October 2003, the Department placed a moratorium on the certification of any new LE-PCS devices for use in the band 1910-1920 MHz through Spectrum Advisory Bulletin SAB-001-05, dated December 2005. It was indicated in this Bulletin that the designation for the use of this band would be developed in a future spectrum utilization policy. Any remaining fixed systems in the band 1910-1915 MHz that may be affected by the use of the spectrum by PCS services will be subject to the same 1-year and 2-year notification provisions as noted above for the AWS bands. The same transition provision applies to its paired band 1990-1995 MHz. 3.4 Transition Provisions for the 1670-1675 MHz Band According to the Department’s licensing database, there are no incumbents in this band; therefore, a transition policy is not required.


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Part II: Further Consultation on the Auction 1. Telecommunications Policy Considerations 1.1 Background The wireless industry structure expanded from two cellular telephone carriers in 1984 to four PCS wireless carriers with the licensing of two new entrants in 1995. An important goal in opening the spectrum at that time was: “the stimulation of competitive and comprehensive service offerings, provided through the utilization of both existing and new facilities, through, among other measures, the non-discriminatory access by third parties to networks, thereby also promoting value-added services and content.”1 The wireless cellular industry has experienced consistent growth since the licensing of PCS in the 2 GHz band in 1995. According to Statistics Canada’s latest survey, the number of wireless telephone subscribers has now surpassed local access lines and the annual revenues for wireless telephony have exceeded those derived from the local wireline telephone service. According to the Canadian Radio-television and Telecommunications Commission (CRTC), Canada has a wireless infrastructure that serves 97% of the population with coverage along most primary highways and to about 20% of its geography. Technology convergence is occurring where spectrum can be used for a variety of applications including voice, data (broadband Internet access) and video (multimedia). Demand for spectrum has been expressed from various companies for a variety of markets including: wholesale and retail, public and enterprise and national, regional and local markets. The Department has a mandate to respond to demand for spectrum from small and large businesses from all areas of Canada. Spectrum is a fundamental resource for facilities-based wireless carriers, enabling them to exist and grow. 2. Fostering a Competitive Wireless Market 2.1 Telecommunications Objectives In the issuance of radio authorizations, the Minister may have regard to the Canadian telecommunications policy objectives set out in the Telecommunications Act. The licensing of new spectrum provides a unique occasion to give regard to these objectives as the government controls access to the underlying resource (spectrum) needed for market entry. Among the objectives in section 7 of the Telecommunications Act, the following are particularly relevant in licensing new spectrum resources: to render reliable and affordable telecommunications services of high quality accessible to

Canadians in both urban and rural areas in all regions of Canada;

1 See Backgrounder – Personal Communications Services at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01782.html

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01782.html


14

to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;

to promote the ownership and control of Canadian carriers by Canadians; to foster increased reliance on market forces for the provision of telecommunications services and to

ensure that regulation, where required, is efficient and effective; and to stimulate research and development in Canada in the field of telecommunications and to

encourage innovation in the provision of telecommunications services. 2.2 Telecommunications Policy Review Panel (TPRP)

On March 22, 2006, the Telecommunications Policy Review Panel released its final report, which contained over 120 recommendations aimed at improving Canada's telecommunications policy and regulatory framework and ensuring that Canada has a strong, internationally competitive telecommunications industry.

Some recommendations that are particularly relevant to this consultation include: 5-9 (a) availability of adequate spectrum to meet demand for deployment of fixed and mobile broadband networks across Canada; 5-9 (c) reliance on market-based approaches to spectrum management as much as possible; 5-9 (h) continued use of regulatory mechanisms such as spectrum caps (spectrum aggregation limits) where spectrum is scarce in order to provide an opportunity for new entrants to acquire spectrum and for Canadians to have an expanded choice of service providers. The entire text of the TPRP's recommendations can be found on the Internet at: http://www.telecomreview.ca/epic/internet/intprp-gecrt.nsf/Intro. 2.3 Competition Principles Auctions have the ability to award spectrum in a transparent and economically efficient manner. However, to ensure that economic benefits are maximized, it is important that potential licensees will indeed be operating in a competitive marketplace. In the document entitled Framework for Spectrum Auctions in Canada, Issue 2 dated October 2001, the Department described the assignment of spectrum via an auction process and the two guiding principles the Department intended to follow to promote a competitive post-auction marketplace. These principles are as follows:

“Principle 1: Restricting Participation With regard to restricting participation, it is the view of the Department that an entity that currently provides telecommunications services should be restricted from holding certain licences if:

http://www.telecomreview.ca/epic/internet/intprp-gecrt.nsf/Intro


15

(a) that entity possesses significant market power in the supply of one or more telecommunications services in a region covered by the licence to be auctioned;

(b) a new entrant is likely to use the licence to provide services in competition with that entity's existing services; and

(c) the anti-competitive effects of that entity acquiring a licence are not outweighed by the potential economies of scope arising from the integration of the spectrum in question into that entity’s existing network.

Principle 2: Spectrum Aggregation Limits With regard to applying spectrum aggregation limits, it is the view of the Department that when multiple licences for the use of spectrum in a given geographic area are auctioned, and these can be used to provide closely substitutable services, limits on the amount of spectrum that any single bidder is allowed to acquire may be required to ensure competitive markets. Spectrum aggregation limits may be imposed in the following circumstances: (a) a bidder that acquires an amount of spectrum beyond a certain level would not face effective

competition from providers of closely substitutable services provided by firms that use infrastructure other than the spectrum being auctioned; and

(b) the anti-competitive effects arising from the acquisition of an amount of spectrum beyond a certain level by a single bidder would not be offset by lower costs or higher valued services resulting from having a single entity hold this amount of spectrum.”

In the analysis of the above noted competition principles, it is appropriate to consider the current Canadian market, activities of other regulators who deal with the wireless industry, and the experience of other countries. 2.4 The Canadian Market The existing Cellular/PCS carriers have built networks reaching 97% of the population. After 23 years of operation, these networks are considered mature, with well established infrastructure, maintenance, marketing and customer service presence across the country, including the ability to roam between networks thereby enhancing their productivity. The mobile telephone industry has consolidated into three national mobile carriers with a few regional mobile operators. Recently some Mobile Virtual Network Operators (MVNOs) have emerged that resell existing facilities from wireless carriers. The wireless industry is composed for the most part of the original 1985 cellular mobile operators affiliated with wireline carriers. The incumbents have purchased virtually all the mobile spectrum that was made available through the 2001 PCS auction process, and they have acquired significant amounts of spectrum in recent auctions for Fixed Wireless Access spectrum.


16

Other frequency bands have recently been the subject of new spectrum allocations or licensing activity that may have an effect on the spectrum capacity requirement for AWS services, including: the bands 2300 MHz and 3500 MHz for WCS and Fixed Wireless Access were auctioned in 2004

and 2005. See http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10470.html; the band 2500-2690 MHz, previously allocated to fixed and broadcasting on an exclusive basis, was

made available for flexible use, including mobile services, in a policy statement on March 30, 2006. See DGTP-002-06 at: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf08551.html;

the band 3650-3700 MHz is currently the subject of a consultation process where flexible use is

proposed. See DGTP-006-06 at: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf08674.html. 2.4.1 CRTC Regulation of Wireless Carriers In considering the current Canadian regulatory framework we must recognize the complementary roles of the CRTC and Industry Canada in the licensing and regulation of wireless operators. Industry Canada has responsibility for licensing the underlying spectrum resource, radio spectrum, including the awarding of licences along with their associated terms and conditions of licence. The Commission has responsibilities under the Telecommunications Act for the regulation of carriers including rates, facilities and services. In exercising its mandate, the Commission forbore from rate regulation of mobile carriers in Telecom Decisions 94-15, 96-14 and 98-18, on the basis that such services were sufficiently competitive to protect the interests of users. In these decisions, the complementary role played by Industry Canada was recognized in the licensing of competitive services. At the time when those decisions were made, mobile telephony was the main service provided by wireless carriers. In fact, in Decision 96-14, fixed wireless telecommunications was found to be outside the scope of the proceedings. According to the latest CRTC report, basic voice and long distance revenues currently account for 81% of total wireless revenues. 2.4.2 CRTC Telecommunications Monitoring Report The CRTC has issued five monitoring reports on the status of competition in Canadian telecommunications markets and on the deployment and accessibility of advanced telecommunications infrastructure and services. These are entitled Status of Competition in Canadian Telecommunications Markets.2 The CRTC collects information related to Canadian telecommunications markets in order to monitor the status of competition, and notes that there is no single or simple way of assessing the state of competition in a market. The Commission examines various elements or factors, including among 2 Status of Competition in Canadian Telecommunications Markets can be found on the CRTC website at:

http://www.crtc.gc.ca/Eng/publications/reports/PolicyMonitoring/2006/tmr2006.pdf. .




http://www.crtc.gc.ca/Eng/publications/reports/PolicyMonitoring/2006/tmr2006.pdf


17

others: (i) the market size and market share according to criteria such as revenues and number of subscribers, lines and minutes; (ii) the number and description of service providers in the market; (iii) lists of available services, pricing levels and trends; and (iv) corporate financial conditions. In its July 2006 report, the CRTC summarized the Canadian wireless market as follows:

“The wireless market continued to display strong growth and remained competitive in 2005. Wireless revenues increased from $9.5 billion in 2004 to $11.0 billion in 2005, a $1.5 billion or 16.2% increase. This strong growth made the wireless market the largest sector in the telecommunications market, accounting for 32% of the industry's revenues. The number of wireless subscribers increased from 15.0 million subscribers in 2004 to 17.0 million in 2005, an increase of 2.0 million subscribers or 13.3%. Three major wireless service providers accounted for over 90% of the wireless market, with no provider dominating in terms of either revenues or subscribers. The average monthly revenues per subscriber increased from $48 in 2001 to $53 in 2005.”3 “Wireless service providers experienced continued growth in EBITDA in 2005. These providers registered an 18.9% increase in EBITDA from $3.7 billion in 2004 to $4.4 billion in 2005, increasing their share of the industry EBITDA from 32% in 2004 to 35% in 2005.”4 “Wireless capital expenditures, excluding spectrum, remained relatively unchanged at $1.1 billion in 2005. Spectrum related capital expenditures in 2005 were minimal at less than $10 million. …while wireless capital expenditures have trended downward since 2002, declining from $1.6 billion in 2002 to $1.1 billion in 2005, most of the decline in wireless capital expenditure can be attributed to sharing agreements and roaming arrangements among the wireless service providers which tend to minimize the need for expanding their networks.”5 “The wholesale market has been relatively small and has essentially consisted of wholesale roaming services as the major service providers have generally relied on their own facilities. More recently, they entered into agreements with each other which enabled them to share each other's facilities, thereby maximizing their coverage while minimizing capital expenditures. As MVNOs enter the market, the wholesale market is expected to grow.”6 “The wireless footprint covers approximately 20% of Canada's geographic area. However, it encompasses approximately 97% of Canadians. Mobile coverage did not expand significantly in 2005. This is reflective of the extent to which the wireless footprint has evolved and the various roaming and sharing agreements among the providers. As the wireless market evolves, it is expected that new technologies such as third-generation

3 Ibid., iv. 4 Ibid., 21. 5 Ibid., 23. 6 Ibid., 82.


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wireless (3G) will be the focus of capital expenditures to enable the industry to offer additional, as well as, enhanced services.”7

2.4.3 Competition Bureau Wireless Market Oversight On September 26, 2006, the Competition Bureau issued a draft bulletin for public comment that describes its approach in reviewing abuse of dominance complaints in deregulated telecommunications markets. The draft bulletin supplements the Bureau’s Enforcement Guidelines on the Abuse of Dominance Provisions, which provide general guidance on its approach to abuse of dominance. The draft bulletin explains that when investigating an abuse of dominance matter, the Bureau inquires as to whether a firm is dominant in a relevant market and has engaged in a practice of anti-competitive acts (i.e. conduct that is predatory, exclusionary or disciplinary) that has resulted, or is likely to result in, a substantial lessening or prevention of competition.

The Bureau will review the comments received on their draft document and will subsequently publish a final document.8 The competition principles involved in a discussion of set-asides and aggregation limits are more closely associated with the goals of merger review policy, that is, preventing the creation or maintenance of market power (i.e. the ability of a single firm or group of firms to profitably maintain prices above the competitive level for a significant period of time) and the attendant inefficiencies that could follow. In this regard, the Competition Bureau has published Merger Enforcement Guidelines that provide general guidance on its analytical approach when assessing the likely competitive impact of a proposed merger. Although the goals of merger policy are similar to those underlying set-asides and aggregation limits, there is a fundamental difference between the two that needs to be recognized. The goal of using set-asides and aggregation limits is intended to address concerns that new entrants have the opportunity to bid, as part of the competitive process, for the spectrum necessary for entry as a facilities-based carrier. In a review of a merger matter, the Bureau inquires into whether the merger is likely to cause a substantial lessening or prevention of competition relative to the circumstances that would be expected to prevail in the absence of the merger. In particular, a Bureau decision not to challenge a transaction should not be interpreted as a conclusion that the merging parties, or other firms in the affected industry, did not possess market power or that further profitable entry into the industry was not possible. It simply means that the Bureau determined that the merger would not likely increase the level of market power sufficiently to cause a competition concern relative to the pre-merger situation. As such, a Bureau decision not to challenge a merger should be viewed independently from a Department policy decision of using set-asides, aggregation limits or other measures designed to provide an opportunity for new entry to facilitate a more competitive market over what may currently exist.

7 Ibid., 85. 8 The document Draft Information Bulletin on the abuse of Dominance Provisions as applied to the Telecommunications

Industry is available on the Competition Bureau's website at: http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2180&lg=e.

http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2180&lg=e


19

2.4.4 Disclaimer The current spectrum licensing process recognizes the complementary nature and the division of responsibilities among Industry Canada, the CRTC and the Competition Bureau. This consultation paper is without prejudice or inference as to the future determinations or findings by the Commission or the Bureau. 2.4.5 Other Competitive Analysis – European Commission Guidelines The Department notes that the European Commission has also issued guidelines on a wide variety of competition related matters including a description on market dominance and joint dominance.9 2.5 Barriers to Market Entry New facilities-based wireless operators have several barriers to market entry. Spectrum is a finite resource that can only be accessed periodically subject to changes in international and national allocation plans and technical standards. Network investments are characterized with risk, as the high capital investments necessary to fund the extensive and location-specific mobile networks may lead to long payback periods and technological obsolescence with the possibility of stranded assets. Furthermore, incumbents typically control many of the existing facilities, including access rights, tower sites, rights of way, customer premises, spectrum and interconnection arrangements. The high fixed cost of building a wireless network presents challenges for facilities-based entrants seeking to replicate it. Further, the economies of scale that a wireless incumbent enjoys, may prevent a competitive entrant from being able to match the incumbent’s incremental costs of serving each additional subscriber. Consequently, new entrants must have sufficient access to capital to compete in a capital-intensive industry where the most lucrative customers demand wide-area or nationwide service. The wireless industry must also consider the balance between innovation and the risk of obsolescence for existing assets. 2.5.1 Foreign Investment Restrictions Canadian ownership and control requirements impose certain restrictions on foreign investment in facilities-based telecommunications carriers in Canada including wireless carriers. The spectrum considered in this consultation process will eventually be licensed under the Radiocommunication Act subject to Canadian ownership and control requirements and therefore subject to foreign investment restrictions. Foreign investment restrictions have the effect of limiting potential entry in the telecommunications market thereby reducing the competitive discipline that the threat of entry can provide. It is important to consider the effect this may have on the free operation of the market and the ability to rely solely on market forces in the forthcoming auction.

9 Commission guidelines on market analysis and the assessment of significant market power under the Community

regulatory framework for electronic communications networks and services can be found on the EUR-Lex website at: http://eur-lex.europa.eu/LexUriServ/site/en/oj/2002/c_165/c_16520020711en00060031.pdf.

http://eur-lex.europa.eu/LexUriServ/site/en/oj/2002/c_165/c_16520020711en00060031.pdf


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2.6 Discussion Recent policies have contributed to greater flexibility in the market for the Canadian wireless industry. Wireless industry consolidation was facilitated by the removal of the general mobile spectrum aggregation limit by Industry Canada. The CRTC has forborne from rate regulation of mobile carriers. The wireless industry in Canada has seen consistent growth with average revenue per unit (ARPU) among the highest in the world. As the Department is now releasing additional spectrum for flexible use, it is timely to consider long-term competition issues in a broad context. This consideration may include the current state of convergence of telecommunications and broadcasting, as well as of mobile, fixed services and multimedia on the same infrastructure. Consideration of the broader context may also include the market forces and competitive characteristics currently found in this market as described above. Among other issues are the potential for market entry, the types of barriers to entry that such new entrants might encounter and whether spectrum incumbents have the incentive and means to acquire additional spectrum for the purpose of preventing access to prospective competitors. In considering the competition principles discussed in Section 2.3, the preceding issues need to be assessed. In a dynamically competitive market characterized by rapid technological change, competition and the threat of market entry are generally sufficient to discipline market behaviour and protect consumer interests. However, where the number of competitors is limited and there are significant barriers to entry, market forces may not yield the same results. A further consideration is the efficient use of spectrum, particularly in view of the considerable demand. Some parties have noted that the existing national PCS/Cellular wireless operators currently have considerable spectrum to operate their wireless networks. There are a number of fixed service operations that are being relocated from the AWS bands as described in the transition policy section in Part I of this paper. In the AWS consultation, these operators commented on the adverse impact resulting from their displacement to accommodate AWS use. On the one hand, the Department is predisposed not to identify specific services for this spectrum as it wishes to afford as much flexibility as possible so that the spectrum, once auctioned, can be used subject to market demand. On the other hand, following an auction, it would not be in the public interest for valuable AWS spectrum, which was cleared of existing incumbents at their cost, to lay fallow or otherwise be put to inefficient use. Such a result also prevents potential competitive entry, thus denying competition and use of the spectrum to provide a range of new AWS services. In summary, from a spectrum resource perspective, the Department will take into consideration a range of issues including: the risk of inefficient use of spectrum which could arise from an excess concentration of wireless access spectrum beyond the needs of current operators for the foreseeable future; restricted availability of new spectrum to meet the needs of potential new users, including competitive entry; and the pressure to open up new frequency bands for next generation mobile services when existing mobile bands are not being used efficiently. These concerns are also reflected in the spectrum utilization policy (Part I) and conditions of licence (Part II, Section 5.4) dealing with implementation.


21

The objectives of regulation also include providing incentives for innovation; and encouraging investment in and construction of competing telecommunications network facilities. Access to spectrum is required for wireless networks to meet these objectives. 2.7 Addressing the Potential for New Entry Given expressed interest in this spectrum and the preceding discussion, an important consideration is whether it is appropriate to take measures intended to enable entry in a situation where the government controls access to the spectrum needed for market entry. The unavailability of spectrum also constitutes a barrier to market entry. In the past, policy measures designed to assist market entry by promoting access to spectrum, such as spectrum aggregation limits, have been used to enhance the variety and quality of services and other benefits for consumers, thus increasing the level of competition in the marketplace and promoting positive trends for consumers. In the responses to the AWS consultation, views were expressed that it may be possible for some of the incumbent carriers to dominate the market by purchasing all or a majority portion of the spectrum being auctioned. Such an outcome could have the effect of lessening potential competition by preventing market entry of new AWS service providers and may be contrary to the public interest. This situation calls for the assessment of countervailing risks: the risk of government intervention to enable market entry (i.e. reducing barriers to entry) assessed against the risk of further concentration of the spectrum among incumbent companies. In the current context of licensing new spectrum, consideration for setting aside spectrum for new entrants is proactive and could reduce the exclusive reliance on ex post regulation to address competition issues. Creating an opportunity for new entry at the time of auction is, in many respects, the only time to introduce further competition in the wireless market. That is, once market power is obtained through the aggregation of spectrum, the simple exercise of that market power in the absence of any abusive conduct (i.e. conduct that is disciplinary, predatory or exclusionary) would not raise an issue under the Competition Act. Reducing barriers to entry may assist new licensees in providing services in competition with existing services as described in the competition principles. Potential adverse impact (i.e. unviable entry) can be corrected by market forces should a new entrant fail. The risk of having the spectrum bought by all the incumbents is that the opportunity of having further competitive entry into the market would be prevented. Also, recent experience of regulators from other countries indicates that ex post solutions to wireless competition issues present a number of difficulties. Not taking explicit action to enable entry may therefore have the consequence of preventing entry while taking explicit action runs the risk of potentially enabling uneconomic entry. Since there is no way to forecast market forces at play with accuracy, the Department must consider on a balance of probabilities, which approach is most in the public interest. This could take into account factors such as: current market structure; market rivalry; pricing; expressed demand for the spectrum in question; and the potential for incumbents to preclude market entry by acquiring all of the spectrum available.


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In consideration of the present circumstances, the Department seeks comments on whether there is a need for measures intended to enable market entry in the AWS spectrum auction. 2.7.1 Spectrum Set-aside Without prejudging the previous question, should a decision be made to restrict participation of certain companies from holding certain licences, one method is to set aside a certain amount of spectrum for which only new entrants would be eligible to bid. A spectrum set-aside is intended to restrict the participation of incumbents on a specified frequency block thereby facilitating new entrants who must still bid competitively among themselves to obtain spectrum in the auction. The size of the set-aside block or blocks must be established as well as the geographic dimension of the licence or licences. By having a specific frequency block(s) identified as set-aside, it becomes contiguous both spectrally and geographically and only qualified bidders can bid on it. The contiguous nature of a set-aside may make it more attractive than using other measures such as spectrum aggregation limits. The size of the set-aside is also a consideration in that it should be a sufficient amount of spectrum so that a potential new entrant could consider competing with incumbents since they have no other similar spectrum. A new entrant could be described as one who does not operate, or does not have an affiliate that operates, a national wireless PCS/Cellular network that offers high mobility phone services. Due to the characteristics of the various bands being opened in this auction process, it is contemplated that a potential set-aside would apply to the AWS core spectrum band 1710-1755 and 2110-2155 MHz. A set-aside does not obligate the Department to take other measures to ensure the viability of a new entrant nor imply any guarantee of success in the marketplace by a successful bidder.

The Department seeks comments as to whether a certain amount of spectrum should be set aside for new entrants. Comments should include a precise description of those who should or should not be entitled to bid. Comments are sought on the amount of spectrum that could potentially be set aside. Comments should include whether a single block should be set aside or if the set-aside could be broken up into 2 or more blocks. Comments should stipulate how such provisions would be in the public interest, and provide supporting evidence or rationale. Comments are sought on the implementation of the set-aside post auction and the duration of any conditions of licence specific to the set-aside that may affect the licence such as divisibility and transferability.


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2.7.2 Spectrum Aggregation Limit on Auctioned Spectrum Another method of assisting market entry that has been used successfully is spectrum aggregation limits or spectrum caps. Spectrum aggregation limits prevent the concentration of spectrum by any single entity. Under a spectrum aggregation limit, the various bidders may conclude the auction with different frequency blocks across the country. There is a possibility that an incumbent bidder could block a new entrant from acquiring the same spectrum block region-wide or Canada-wide. In the past, spectrum aggregation limits have been placed on services over various bands such as the mobile spectrum aggregation limit imposed on operators in the Cellular, PCS and other high mobility bands. The mobile spectrum aggregation limit was removed in 2004, due in large part to the opening of a number of other mobile bands and the convergence occurring with similar services and technologies.10 Auction-specific aggregation limits have been used to ensure there is wide distribution of spectrum at the time of opening new bands for competitive services. Such an aggregation limit was used in the auction of the bands 2.3 GHz and 3.5 GHz.11 For the 2.3/3.5 GHz auction, the spectrum aggregation limit was applied for a period of 2 years following the close of the auction. Some views have been expressed to the Department that this time period is too short. Others view this period as adequate. In the case of 2.3/3.5 GHz, there was unsold spectrum following the auction in 2004, and there was a residual auction held in 2005. The duration of the spectrum aggregation limit should take into account the possibility that all of the spectrum may not be assigned in one auction, while recognizing the policy objectives that the spectrum aggregation limit is attempting to achieve. A spectrum aggregation limit would place a limit on the amount of spectrum that may be acquired by a single bidder and its affiliates in a particular market in the upcoming auction. The AWS auction, as proposed, consists of a total of 90 MHz of spectrum in the bands 1710/2110 MHz, 5 MHz paired in the extension spectrum to the PCS band (10 MHz total), and 5 MHz unpaired in the band 1670-1675 MHz. Due to the characteristics of the various bands being opened in this auction process it is contemplated that a potential spectrum aggregation limit would only apply to the AWS core spectrum band 1710-1755 MHz and 2110-2155 MHz. The Department seeks comments as to whether an auction spectrum aggregation limit should be placed on the amount of spectrum that can be acquired by a single wireless service provider and its affiliates. Comments should include the amount of spectrum for the auction spectrum aggregation limit, to which bands it should apply and the duration. 10 See Canada Gazette notice DGTP-010-04 - Decision to Rescind the Mobile Spectrum Cap Policy at

http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf05645e.html. 11 See the 2.3/3.5 GHz Two Phase Residual Licence Auction web page at : http://www.ic.gc.ca/eic/site/smt-

gst.nsf/eng/sf10470.html.

http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf05645e.html




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3. Mandated Roaming A general objective of the Telecommunications Act is to promote the availability of reliable and affordable telecommunications service to all regions of Canada. The need for roaming by carriers was made clear in comments for the previous consultation under DGTP-007-03.12 Although the issue consulted on at that time was roaming for non-competing carriers in rural and remote areas, the comments are still relevant. It was described in comments that new entrants are at a competitive disadvantage with regard to incumbent wireless carriers if their customers have no ability to roam onto other networks. As a result of that consultation, the Department issued a statement encouraging the existing carriers to offer roaming to non-competing carriers. In 1995, at the time of licensing the national and regional PCS carriers for the 2 GHz spectrum, conditions of licence were imposed on the existing cellular mobile carriers to afford commercial arrangements to new PCS carriers for analogue cellular telephony roaming and resale at 800 MHz using dual mode PCS/Cellular terminals. An objective of the cellular roaming provision was to extend the mobile telephony service coverage of new PCS carriers to their subscribers during the implementation phase of their 2 GHz PCS network since the incumbent cellular carriers had established mature national analogue cellular service coverage. Consequently, the condition of licence imposed on the national and regional cellular carriers at 800 MHz does not include the offering of a digital cellular telephony roaming arrangement. The Department also notes that analogue cellular equipment is being discontinued by most major manufacturers. Also, some of the national operators are discontinuing the sale of stand-alone analogue cellular and this infrastructure is being replaced by digital telephony networks. The Department notes that digital telephony roaming service is commonly available to foreigners traveling in Canada or to Canadians traveling in many regions of the world. It is expected that Canadian subscribers of any carrier would benefit from similar roaming services. As mobile services have become an important service to many Canadians, it is important that all networks be fully integrated into the national telecommunications networks.

12 DGTP-007-03, Consultation on the Spectrum for Advanced Wireless Services and Review of the Mobile Spectrum Cap

Policy can be found at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf08084e.html.



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The Department invites comments on mandating incumbent mobile wireless operators to offer roaming services – to both competing and non-competing Canadian carriers – to foster the development of competitive wireless communication services. Comments are invited on the extent to which the lack of mandated roaming could be a barrier to entry into the wireless market. Comments are sought on what services should be included in any mandated roaming and to what specific frequency band(s) roaming should apply. Comments are sought on the mechanisms that would best implement the policy objectives regarding roaming.

4. Technical Considerations The following section provides the technical characteristics and licence parameters that should be considered when responding to the proposals contained in this document or in submitting other suggestions for consideration. Comments are welcome on any technical issue. The Department will establish final technical specifications in consultation with the Radio Advisory Board of Canada (RABC) after the final spectrum policy and licensing procedures document is released. 4.1 Spectrum Bands 4.1.1 The Bands 1710-1755 MHz and 2110-2155 MHz In the 2003 AWS consultation, the Department asked for preliminary comments and suggestions on the size of spectrum blocks and the pairing and combination for the channellization of the paired bands 1710-1755 MHz and 2110-2155 MHz. All responses to this question indicated that the block sizes should be a minimum of 5+5 MHz with a duplex spacing of 400 MHz. It was stated that these block sizes of integer multiples of 5 MHz would be capable of supporting all known technologies, including identified international IMT-2000 technologies. Another response received to this question specifically suggested four paired blocks of 10+10 MHz and one block of 5+5 MHz. Many respondents indicated that the Canadian band plan for this spectrum should be harmonized with the plan used by the Federal Communications Commission (FCC). In developing a band plan for the purposes of consultation, the Department used the 5 MHz block as a basic unit. The 5 MHz block is harmonized with the U.S. and other countries to provide for technical neutrality, which facilitates roaming and bilateral coordination. The band plan and block sizes shown in Figure 1 and Table 1 below are based on the 5 MHz block grid, with band edges that align with the U.S. for both base and mobile stations, and internationally for base stations.


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t.

Figure 1 - Proposed Band Plan

Incumbent cellular and PCS spectrum holders are currently reusing their existing spectrum to deploy advanced mobile systems and it is expected that the AWS spectrum will be used to complement existing systems. Small blocks of 5+5 MHz that are available in different geographic areas are well suited to complement existing systems since applicants will have maximum flexibility to aggregate the spectrum they need where they need it. Also, different PCS/Cellular licensees and new entrants may have different spectrum requirements. Therefore, both 5 MHz and 10 MHz block pairs provide the market with the flexibility to meet these diverse needs. The Department also chose to include a 15+15 MHz block, which represents three channels. This block could provide sufficient high mobility spectrum for providers to deploy new systems for voice, data and video applications. In the 2003 AWS consultation paper, the Department sought views on the use of the lower band for mobile operations and the upper band for base station operation. Respondents were in favour of this approach. Because the Department favours technological neutrality, it could allow time division duplexing (TDD)13 techniques in the above sub-bands if they are proposed by operators. However, these systems will have to operate within the envelope of technical rules of frequency division duplexing (FDD) 14 systems. All systems must conform to the technical requirements set forth in the standards to be developed by the Departmen The Department intends to consult the industry in the development of those standards.

1710 1715 1720 1730 1740 1755

Mobile/Subscriber

A B C D E

2110 2115 2120 2130 2140 2155

Base

A B C D E

13 TDD is a technology which permits transmission and reception of signals on the same frequency by alternating time slots for transmission and reception.

14 FDD is a technology which permits transmission and reception of signals on two different frequencies separated in the frequency spectrum by a predetermined value (400 MHz in this case).


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Table 1 - Proposed Block Sizes

Block Licences

Pairing Amount of Spectrum

A 1710-1715 MHz and 2110-2115 MHz 2 x 5 MHz B 1715-1720 MHz and 2115-2120 MHz 2 x 5 MHz C 1720-1730 MHz and 2120-2130 MHz 2 x 10 MHzD 1730-1740 MHz and 2130-2140 MHz 2 x 10 MHzE 1740-1755 MHz and 2140-2155 MHz 2 x 15 MHz

Comments are sought by the Department as to whether: 1. the band plan shown in Figure 1 should be adopted in Canada — if not, please provide specific

alternative options and the rationale justifying your suggestion; 2. the Department should allow TDD operation in these sub-bands if they meet the conditions listed

above — if not, please provide the rationale supporting your view.

4.1.2 The Band 1670-1675 MHz With the release of Canada Gazette notice DGTP-004-05, the Department consulted on the use of the band 1670-1675 MHz. Comments received showed interest in having this band opened for flexible use by fixed and mobile services. To have a block size capable of supporting all known technologies, including those identified as IMT-2000, the block sizes should be a minimum of 5 MHz. To benefit the economies of scale for the deployment of systems, the Canadian band plan for this spectrum should be the same as that adopted by the FCC. The Department therefore proposes to licence the band 1670-1675 MHz as one single block for fixed and mobile (except aeronautical mobile) services. Operators may deploy time division duplexing (TDD) techniques or frequency division duplexing (FDD) techniques in this block. If FDD is proposed, radio systems may use this block paired with another block acquired via auction. This block may be used for mobile transmit operation or for base transmit operation. All systems shall conform to the technical requirements set forth in the standards to be developed by the Department in consultation with the industry. Comments are sought by the Department as to whether: 1. the band plan as proposed should be adopted in Canada — if not, please provide specific alternative

options and the rationale supporting your suggestion; 2. the technological neutrality related to duplexing should be adopted in Canada — if not, please

provide the rationale supporting your view.


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4.1.3 The Bands 1910-1915 MHz and 1990-1995 MHz In the 2003 AWS consultation paper, the Department sought comments on the proposal to use the bands 1910-1920 MHz and 1990-2000 MHz for the extension of the 1850-1990 MHz PCS band. Comments received supported the Department’s proposal. To be consistent with the existing PCS band plan, the Department is making available the first paired block of 5+5 MHz (1910-1915 MHz /1990-1995 MHz) at the same time as the AWS spectrum, as expansion bands for PCS. The Department proposes to apply the same standards used presently for PCS.15 The Standard Radio System Plan 510 and Radio Standards Specification 13316 will be updated by the Department in consultation with the industry. Comments are sought by the Department as to whether: 1. the band plan as proposed should be adopted in Canada -- if not, please provide specific alternative

option and the rationale supporting your suggestion; 2. the standards for PCS should be applicable to this spectrum -- if not, please provide the rationale

supporting your view. 4.2 Service Areas The Department has established four tiers of service areas, which it uses for competitive licensing procedures. These areas cover the entire geography of Canada, ranging from a single national service area (Tier 1) to a set of 172 small areas (Tier 4) suitable for local development. These service area tiers are based on contiguous groupings of Statistics Canada’s 2001 Census Divisions and Subdivisions. For full details of the tiers, please refer to the document Service Areas for Competitive Licensing, available on the Spectrum Management and Telecommunications website at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/h_sf01627e.html. In general, the Department is of the view that it should accommodate high-speed mobile applications. This is consistent with many other countries, including the United States. Consequently, the tier size should accommodate wide area systems for the purposes of new service plans and the extension of capacity.

15 SRSP-510, Technical Requirements for Personal Communications Services in the Bands 1850-1910 MHz and 1930 1990

MHz. 16 RSS-133, 2 GHz Personal Communications Services.

http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/h_sf01627e.html


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4.2.1 AWS Service Areas, 1710-1755 MHz and 2110-2155 MHz In the past, the Department has licensed equivalent spectrum, such as cellular (800 MHz) and PCS (1900 MHz), on a national basis. This allowed for the deployment of service across the country. The Department is of the view that the services likely to be offered with AWS spectrum would be amenable to licensing both on a local and a larger regional level basis, by both incumbent and new carriers. Therefore, the Department proposes that a mix of Tier 2, Tier 3 and Tier 4 service areas be used to license these bands. See Table 2 for a summary of proposed block and tier sizes. Table 2 – Summary of Proposed Block and Tier Sizes

Block Licences

Pairing Amount of Spectrum

Proposed Tiers

Number of

LicencesA 1710-1715 MHz and 2110-2115 MHz 2 x 5 MHz 4 172 B 1715-1720 MHz and 2115-2120 MHz 2 x 5 MHz 4 172 C 1720-1730 MHz and 2120-2130 MHz 2 x 10 MHz 3 59 D 1730-1740 MHz and 2130-2140 MHz 2 x 10 MHz 3 59 E 1740-1755 MHz and 2140-2155 MHz 2 x 15 MHz 2 14

Comments are sought on the proposed tier sizes for AWS spectrum. Comments are sought on whether the block and tier sizes given above will allow the entry of new carriers in the market. 4.2.2 PCS Expansion Service Areas, 1910-1915 MHz and 1990-1995 MHz The Department is of the view that the services likely to be offered with PCS expansion spectrum would be amenable to large service areas, and therefore proposes that Tier 2 service areas be used to license these bands. Comments are sought on the proposal of Tier 2 service areas. 4.2.3 1670-1675 MHz Service Areas The Department is of the view that the services likely to be offered with 1670-1675 MHz spectrum would be amenable to large service areas and proposes that Tier 2 service areas be used to license these bands. Comments are sought on the proposal of Tier 2 service areas.


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4.3 Co-channel/Adjacent Area Coordination In the case of co-channel/adjacent area systems, licensees will be encouraged to enter into mutually beneficial arrangements to foster efficient spectrum use near their common boundaries. The Department expects the licensees to initiate and coordinate the deployment of systems. Licensees should develop effective arrangements with neighbouring licensees to maximize the use of the spectrum. Furthermore, in cases of interference resulting from the operation of two AWS, licensees should cooperate fully to resolve those conflicts through mutual arrangements. It should be noted that licensees will be expected to take full advantage of interference mitigation techniques such as antenna discrimination, polarization, frequency offset, shielding, site selection, and power control to facilitate coexistence with systems of other operators, at both design and implementation stages, and taking into consideration hubs and subscriber terminals. The Department proposes to use the same process and criteria as for cellular systems17 and PCS18 for coordination between licensees. More precise technical requirements will be developed at a later date in consultation with the industry. 4.4 Adjacent Channel/Same Area Coordination For the coordination of systems using adjacent channels or blocks of spectrum in the same geographic area, the Department proposes to use the same process as in cases of coordination of systems which use co-channels in adjacent areas as described in Section 4.3. Minimum technical requirements to permit coexistence of systems operating in adjacent channels within the same geographical area will need to be established. Out-of-block emission limits will be provided at a later date in a Radio Standards Specification document, which will be developed in consultation with the industry. Comments are requested on technical considerations for AWS systems in the applicable bands.

4.5 Sharing Issues with Other Services As indicated in the previous section, AWS systems, deployed in the bands 1710-1755 MHz, 1990-1995 MHz and 2110-2155 MHz before the end of the transition period afforded to the incumbents, will be required to protect the incumbent microwave fixed systems. This does not preclude that mutually acceptable arrangements may be negotiated between new radio users and existing users on a voluntary basis, within the provisions of the spectrum transition policy.

17 SRSP-503, Technical Requirements for Cellular Radiotelephone Systems Operating in the Bands 824-849 MHz and

869-894 MHz. 18 SRSP-510.


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The band 1670-1675 MHz is adjacent to the radio astronomy band 1668.5-1670 MHz which is being used for by the Dominion Radio Astrophysical Observatory near Penticton, British Columbia. Licensees will be required to protect the radio astronomy service in this location. Further details will be provided at a later date in a Standard Radio System Plan, which will be developed in consultation with the industry for each band identified above. Comments are requested on technical considerations for sharing of AWS systems with other services in the applicable bands. 4.6 Equipment Certification Under the Radiocommunication Act, certification of radio apparatus is required. The details will be provided at a later date in a Radio Standards Specification document, which will be developed in consultation with the industry. 4.7 International Coordination Licensees must respect ITU Radio Regulations pertaining to the bands 1670-1675 MHz, 1710-1755 MHz, 1910-1915 MHz, 1990-1995 MHz and 2110-2155 MHz and abide by any future agreements established with other countries. It should be noted that the band 1670-1675 MHz is covered in ITU-R Resolution 744 of WRC-03. This Resolution will be addressed in WRC-07 under Agenda Item 1.7. The use of this band may be subject to the outcome of WRC-07. The assignments of undertakings near the Canada/U.S. border are subject to the coordination agreements established between the two countries. Bilateral negotiations between Industry Canada and the FCC of the United States for the sharing of the bands 1670-1675 MHz, 1710-1755 MHz, 1910-1915 MHz, 1990-1995 MHz and 2110-2155 MHz are ongoing. It is expected that coordination will be carried out by licensees. Licensees will be encouraged to enter into mutually acceptable sharing agreements that will facilitate the reasonable and timely development of their respective systems in the border area. These agreements provide the basis for coordination in this area. Bilateral arrangements with the U.S. in the bands 1710-1755 MHz, 1990-1995 MHz and 2110-2155 MHz may include requirements to protect the existing fixed microwave stations during the transition period. The band 2150-2155 MHz may also include requirements to protect the existing multipoint distribution systems.


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5. Licensing Process 5.1 General The Department anticipates that demand will exceed supply and therefore will conduct an auction for AWS (1710-1755 MHz and 2110-2155 MHz), PCS expansion (1910-1915 MHz and 1990-1995 MHz) and 1670-1675 MHz bands. Auctions offer a number of advantages, such as their ability to promote economically efficient use of spectrum; their openness and objectivity as an assignment mechanism; their procedural efficiency; and their ability to return appropriate compensation to Canadian taxpayers for the use of a public resource. Auctions represent a valuable spectrum management tool for those situations where it is appropriate to rely on market forces for the selection of licensees. The Department proposes the use of the simultaneous multiple-round auction design used for the February 2004 auction of bands 2300 MHz and 3500 MHz. The licences will have the following attributes, as detailed in the Framework for Spectrum Auctions in Canada (October 2001, Issue 2) document.19 Licences will be spectrum licences, which are defined as authorizations “in respect of the utilization of

specified radio frequencies within a defined geographic area”, as per subparagraph 5(1)(a)(i.1) of the Radiocommunication Act.

Licences have a term of 10 years, with the possibility of renewal for an additional term of up to

10 years. Licences will be transferable and divisible in the secondary market. Licensees will have the maximum possible flexibility in determining the services they will offer and

the technologies they will employ. Successful bidders in the auction will need to comply with Canadian ownership and control

requirements in order to qualify for a radiocommunication carrier licence. To clarify, licensees will have the maximum flexibility in determining (1) the commercial services they will offer within the terms of the spectrum utilization policy, and (2) the technologies they will employ within the technical parameters for the spectrum. This spectrum represents an important mobile service resource for the advancement of Canadian telecommunications systems and the continued offerings of innovative and advanced wireless applications. A key justification for this spectrum reallocation is for facility-based radiocommunication carriers to develop new local distribution networks and expand existing networks to serve the Canadian public.

19 The document Framework for Spectrum Auctions in Canada is available on the Spectrum Management and

Telecommunications website at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf01626e.html.



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Licences auctioned will be radiocommunication carrier licences and, as such, provisional licence winners must demonstrate eligibility and meet the related ownership and control requirements, as outlined in the Radiocommunication Regulations, before licences are issued. For more information, refer to Client Procedures Circular 2-0-15, Canadian Ownership and Control (CPC-2-0-15), available on the Spectrum Management and Telecommunications website at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf01763e.html. 5.2 Overview of the Simultaneous Multiple-round Auction The auction will be run electronically over the Internet, and bidders will be able to participate remotely from their premises using a secure Internet connection. The key features of the simultaneous multiple-round auction that will be used are listed below. The rules for the simultaneous multiple-round auction call for a related set of licences to be offered at

the same time. Bidding is organized into a series of rounds. The identities of all bidders, the licences on which they are qualified to bid, and their initial levels of eligibility points will be made public prior to the commencement of bidding. Information on the bids placed by all bidders will be made available after each round.

The Department will state the exact level of an acceptable new bid. The new bid will typically be

determined by raising the standing high bid by a pre-established bid increment. Bidders will only be able to choose whether or not to submit the new bid. This format allows rounds to be shorter and more frequent, because the mechanics of entering and checking bids are simpler, and because the prices never “jump” by unexpected amounts, thus making them more predictable. This also reduces the need for frequent executive oversight during the bidding, which saves overall costs.

When two or more bids are submitted on the same licence in the same round, a tie bid occurs and the

standing high bidder in the next round will be determined by a random selection process built into the auction software.

A minimum pace of bidding in the auction is established by the “activity rule”, which penalizes

bidders who are inactive by reducing their “bidder eligibility points”. The rounds continue until there is a round in the final stage in which no new bids, withdrawals, or

pro-active waivers are submitted. The standing high bidders on each licence at the auction’s close will be deemed the provisional winners of those licences.

All the details of the auction format are discussed more fully in the document Framework for Spectrum Auctions in Canada.




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5.3 Licence Term, Renewal and Implementation Requirements To date, spectrum licences auctioned by Industry Canada have 10-year licence terms and mid-term implementation requirements. The Department determines whether a licence will be renewed 2 years prior to licence expiration. In the United States, the FCC set the licence term for AWS as 15 years, with the possibility of 10-year terms for licence renewal. It has imposed a review 2 years prior to licence expiration to determine whether the licence should be renewed. It decided not to impose a mid-term implementation requirement – sometimes referred to as a use-it-or-lose-it requirement – as a condition of licence. A longer licence term provides bidders with greater certainty of the period in which they will be able to recover the costs associated with delivering services. However, concerns exist regarding the need for a mid-term implementation requirement for longer licence terms. An effective market calls for the reduction of barriers to entry and a productive secondary market. Ensuring that the spectrum is put to use, and having clear and effective enforcement mechanisms, will support reliance on secondary markets rather than government intervention. It is the Department’s belief that establishing firm implementation rules, with clear and simple consequences for non-compliance, will encourage licensees to use the spectrum or establish commercial arrangements with third parties for the use of the spectrum, rather than risk losing the licence due to non-compliance. As a result, the Department offers the following proposals for public comment. The term of this licence will be for 10 years from the date the licence is issued. In year 8, licensees may apply for licence renewal for an additional term of up to 10 years as outlined below. The Department is not proposing to impose a mid-term implementation requirement as a condition of licence. At a minimum of 2 years before the end of this term, and any subsequent terms, the licensee may apply for an additional licence term of up to 10 years. This application must include:

a description of the licensee’s current service in terms of geographic coverage and population served as well as a demonstration of the number of customers by service area; and

a demonstration how it has met, and continued to meet all licence conditions.

Upon receipt of such an application, where the Department foresees the possibility that it will not renew the licence in the circumstances then prevailing, or if renewal fees are contemplated, it may launch a public consultation process regarding the renewal of the licence.

In assessing an application for renewal, the Department will take into consideration:

a satisfactory demonstration of substantial service in the licence area, and

ongoing compliance with all licence conditions.


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In addition to any determinations the Department may make with respect to the renewal criteria above, the Department may, after appropriate consultation, not renew a licence for other reasons, such as:

changes or planned changes to the allocation or usage of the spectrum in question;

national security, treaty or other international obligations or requirements;

any other pressing spectrum management issues.

It should be noted that the licence is subject to relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations. As a result, the Minister has the power to amend the terms and conditions of the spectrum licence and to suspend or revoke a radio authorization (paragraphs 5(1)(b) and 5(2) of the Radiocommunication Act). As proposed above, the renewal of the AWS licence will depend on, among other things, the licensees meeting their licence conditions and a satisfactory demonstration of substantial service in the licence area. The Department recognizes that a variety of business plans and technologies may be employed in these bands across markets of various sizes, leading to various deployment strategies. Therefore, consideration should be given to quantify what constitutes substantial service that would demonstrate an acceptable level of spectrum usage. The Department may post a notice on the Spectrum Management and Telecommunications website when applications for renewal are received. Comments are sought on the licence term, implementation and renewal proposals. Specifically, comment is sought on: the proposal to use a 10-year licence term; whether an interim implementation requirement should be imposed; if yes, respondents should provide a rationale and an explanation of the implementation

parameter(s) the Department should consider, the time frame for such a measure and the means of determining compliance (e.g. technical measurement methods, affidavit, number of subscribers in area);

whether the renewal expectancy provisions and process are suitable; if not, respondents should provide a description of the rationale for different approaches;

whether requiring application for renewal 2 years before licence expiry is appropriate; the means of determining compliance (e.g. technical measurement methods, affidavit, number of

subscribers in area); and the provisions the Department should consider when a licensee is determined to not fully meet the

renewal expectancy requirements (e.g. the revocation for part or all of the spectrum or geography).


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5.4 Conditions of Licence The conditions of licence will be clearly stipulated prior to the auction. The Department proposes the following conditions for the AWS, PCS expansion and 1670-1675 MHz spectrum bands. Licence Term: The term of this licence will be for 10 years from the date of licence issuance. At a

minimum of 2 years before the end of this term, and any subsequent terms, the licensee may apply for licence renewal for an additional licence term of up to 10 years, as outlined in section 5.3.

Licence Transferability and Divisibility: The licensee may apply to transfer its licence(s) in whole or in part (divisibility), in both the bandwidth and geographic dimensions. The Department may define a minimum bandwidth and/or geographic dimension (such as the grid cell20) to the proposed transfer. Systems involved in such a transfer shall conform to the technical requirements set forth in the applicable standards mentioned in previous sections.

Departmental approval is required for each proposed transfer of a licence, whether the transfer is in whole or in part. The licensee must apply to the Department in writing. The transferee(s) must also provide an attestation and other supporting documentation demonstrating that it meets the eligibility criteria and all other conditions, technical or otherwise, of this licence.

Eligibility Criteria: A licensee must be eligible to become a radiocommunication carrier and as such,

must comply on an ongoing basis with the eligibility criteria in section 10(2) of the Radiocommunication Regulations. The licensee must notify the Minister of Industry of any change which would have a material effect on its eligibility. Such notification must be made in advance for any proposed transactions within its knowledge. For more information, refer to the CPC-2-0-15.

Displacement of Incumbents: Licensees must comply with the transition policy requirements as set out in the final policy document.

Radio Station Installations: While site-specific radio licences will not be required for each radio station, licensees must ensure that radio stations are installed and operated in a manner that complies with Industry Canada’s Client Procedures Circular 2-0-03, Environmental Process, Radiofrequency Fields and Land-Use Consultation (CPC-0-03), as amended from time to time, and is available at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf01031e.html.

The Department has conducted a thorough study and public consultation on the environment related to Canada’s authorization processes for radiocommunication antennas and their supporting structures. The objective of the review was to examine possible improvements to Industry Canada's existing antenna tower siting policies and approval procedures. While the Department has yet to release the updated antenna procedures, comments are sought on related issues that parties may consider relevant to AWS.

Provision of Technical Information: A list of the minimum radiocommunication installation data

elements required for the Department’s technical database is provided in Appendix B of Client 20 Spectrum grid cells are defined in Service Areas for Competitive Licensing.



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Procedures Circular 2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services (CPC-2-1-23) which can be found at http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf01875e.html. The Department recognizes that each radiocommunication system and/or service is unique and for that reason, the particulars concerning the provision of updated technical information will be specified upon issuance of the spectrum licence.

Compliance with Legislation, Regulations and Other Obligations: The licensee is subject to, and must comply with, the Radiocommunication Act, the Telecommunications Act, the Radiocommunication Regulations and the International Telecommunication Union’s Radio Regulations pertaining to its licensed radio frequency bands. The licence is issued on condition that the certifications made in the application materials are all true and complete in every respect. The licensees must use the assigned spectrum in accordance with the Canadian Table of Frequency Allocations and the stated spectrum policy.

International Coordination: Licensees must comply with the current and future agreements established with other countries. While frequency assignments are not subject to site licensing, licensees may be required to furnish all necessary technical data to Industry Canada for each relevant site. However, it is expected that coordination will be carried out by licensees. Licensees will be encouraged to enter into mutually acceptable sharing agreements that will facilitate the reasonable and timely development of their respective systems. These agreements provide the basis for coordination in the border area.

Lawful Intercept: Licensees who will use the spectrum for circuit-switched voice telephony systems must, from the inception of service, provide for and maintain lawful interception capabilities as authorized by law. The requirements for lawful interception capabilities are provided in the Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications. These standards may be amended from time to time following consultation with the Solicitor General of Canada and the licensees. Licensees may request the Minister to forbear from enforcing certain assistance capability requirements for a limited period. The Minister, following consultation with the Solicitor General of Canada, may exercise his power to forbear from enforcing a requirement or requirements where, in the opinion of the Minister, the requirement(s) is (are) not reasonably achievable. Forbearance requests must include specific details and dates when compliance with requirement(s) can be expected. Applicants are strongly advised to note that if standards are developed for router-based networks, the requirement to provide lawful interception capability for such traffic may be imposed via a licence condition or otherwise.

Research and Development (R&D): All licensees must invest, as a minimum, 2% of their adjusted gross revenues resulting from their operations in this spectrum averaged over 5 years for the duration of the licence, in eligible research and development activities related to telecommunications. Eligible research and development activities are those that meet the definition of scientific research and experimental development adopted in the Income Tax Act. Adjusted gross revenues are defined as total service revenues, less inter-carrier payments, bad debts, third-party commissions, and provincial and goods and services taxes collected. As was the case in the 2.3/3.5 GHz auction processes, businesses with less than $5 million in annual gross operating revenues are exempt from R&D expenditure requirements.


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If the licence is transferred to any eligible entity prior to the expiration of its term, the condition of licence relating to investment in research and development will continue to apply on the initial transfer of the licence and on any subsequent transfer until the term of this licence expires. Prior to a transfer, in whole or in part of this licence, the proposed transferee must undertake to ensure that the sum of the investment it will make in eligible research and development activities and all investments made by prior licensees in eligible research and development activities equals, as a minimum, 2% of the aggregated adjusted gross revenues resulting from all operations in this spectrum averaged over 5 years for the duration of the licence. An attestation signed by the proposed transferee setting out the undertaking must accompany the licence transfer notification to be submitted to the Department by the licensee prior to the transfer being effected. To facilitate compliance with this condition of licence, the licensee should consult the Department’s Guidelines for Compliance with the Radio Authorization Condition of Licence Relating to Research and Development which can be found on the Spectrum Management and Telecommunications website at http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf01638e.html.

Annual Reporting: Licensees must submit an annual report for each year of the licence term indicating continued compliance with all licence conditions and including the following information;

- an update on the implementation of Advanced Wireless Services, including the number of hub and subscriber sites installed, type of service delivered (high-speed Internet, voice, etc.), level of service (data rate), number of subscribers, as well as the population covered;

- existing audited financial statements;

- audited Statement of Research and Development Expenditures with an accompanying Auditor’s Report (where licensees are claiming an exemption based on an adjusted gross revenue of less than $5 million, supporting financial statements must be provided); and

- a copy of any existing corporate annual report for the licensee’s fiscal year with respect to the authorization.

The reports are to be submitted, in writing to Industry Canada, within 120 days of the licensee’s fiscal year-end. Where a licensee holds multiple licences, the reports should be broken down by service area. Confidential information provided will be treated in accordance with Section 20(1) of the Access to Information Act. The Department seeks comments on the proposed conditions for the AWS, PCS expansion and 1670-1675 MHz spectrum bands.



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5.5 Post-auction Licensing Process The Department may consider making unassigned licences available for licensing through an alternative process, which could include a re-auction, at a later date following the close of the auction. The timing and form of such a process will depend on the demand for the available licences. The Department may conduct a public consultation should the Department consider it in the public interest.

The Department seeks comment on all aspects of the proposed post-auction licensing process for AWS, PCS expansion and 1670-1675 MHz spectrum. 6. Financial Aspects of the Auction 6.1 Opening Bids The Department is of the view that in certain areas of the country, the spectrum being offered in this auction is of significant value. The Department is confident that the revenues generated will cover the relevant spectrum management costs and provide fair compensation to Canadians for the use of the spectrum resource for commercial gain. As such, the Department proposes to establish opening bids that will help bidders reach selling prices for available licences in a reasonable period of time. 6.1.1 Opening Bids for AWS spectrum and for Additional PC spectrum Each of the licences has been assigned a specific number of eligibility points (hereafter referred to as points) that are indicative of the population covered by the licence. One eligibility point is approximately equal to 10 MHz of spectrum and a population of 10,000. To reduce potential barriers to entry in the less populated areas, the Department proposes a 3-level schedule, linking the number of people in a service area to the amount of the opening bid per point as follows: the opening bid is $0.04 per point for service areas with a population less than 200,000;

the opening bid is $0.06 per point for service areas with a population of 200,001 to 2,000,000;

the opening bid is $0.12 per point for service areas with a population of over 2,000,000.

Because licences are to be offered at three different tier sizes, it is important that the larger tiers reflect their composition so the opening bid for a Tier 3 service area will be equal to the sum of the opening bids for the underlying Tier 4 service areas. Similarly, the opening bid for a Tier 2 service area will be equal to the sum of the opening bids for the underlying Tier 3 service areas. As a result, the price per point for Tiers 2 and 3 becomes a weighted average of the underlying Tier 4 service areas. The population coverage per point has been reduced to 10,000 from 20,000 since the auction of spectrum licences in the bands 2300 MHz and 3500 MHz. As a result, points relate more directly to


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population size in individual service areas. In the 2.3/3.5 GHz auction, 36 service areas ranging in size from Golden, B.C., with a population of only 7,153, to Grand Falls, N.L., with a population of 29,665, were valued at one point. Under the suggested coverage, only four service areas are valued at one point with the population range from 7,154 (Golden, B.C.) to 14,407 (Vegreville, Alta.). All service areas, population, $/MHz/pop, points and opening bids are contained in Annex 1. 6.1.2 Opening Bids for 1670-1675 MHz Each of the Tier 2 licences has been assigned a specific number of eligibility points that are indicative of the population covered by the licence. One eligibility point is approximately equal to 5 MHz of spectrum and a population 10,000. Eligibility points and associated opening bids have been established at the Tier 2 level for all service areas based on the value of $0.01/MHz/pop rounded to the nearest 10,000 (see Annex 2). 6.2 Pre-Auction Deposits In order to enhance the integrity of the auction, the Department requires that all bidders submit a pre-auction financial deposit with their auction application. The deposit is to be in the form of a certified cheque or money order payable to the Receiver General of Canada, or an irrevocable standby letter of credit. The Department proposes to determine the value of the pre-auction financial deposit based on the licences on which the applicant wishes to be eligible to bid. Each of the licences has been assigned a specific number of eligibility points that are approximately proportionate to the population covered by the licence. For AWS and PCS spectrum, one eligibility point is approximately equal to 10,000 in population per 10 MHz of spectrum. The Department considers that it is appropriate to require bidders to provide the Department with a deposit to ensure that the integrity of the auction is maintained. At the same time however, the Department does not want to disadvantage those applicants who may wish to develop business plans in a limited number of service areas. Therefore, the Department proposes that the financial deposit be equal to $4,000 per eligibility point for the first 200 points and $6,000 per eligibility point requested thereafter. An individual bidder wishing to acquire the equivalent of one national, 5+5 MHz AWS or PCS licence would have to purchase 3,002 points, which would require a financial deposit of $17,612,000 (i.e. 4000 x 200 + 6000 x 2,802). National coverage in the AWS band at either the Tier 3 or Tier 4 level is contained in Annex 1 of this document which provides the eligibility points associated with each of the licences. (A Tier 2 national licence would be 15+15 MHz, and would require a financial deposit of $53,636,000.) Note that the opening bids (described in Section 6) and the required deposit are, in general, different amounts. Financial deposit(s) will be returned to any applicant that is found not to be a qualified bidder, to any applicant that provides written notification to the Department of its withdrawal


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from the process prior to the auction’s commencement, and to any bidder whose eligibility is reduced to zero during the auction and who is not potentially liable for any penalties. For spectrum in the band 1670 MHz to 1675 MHz, the financial deposit will be equal to $500 per point or $150,500 for national coverage. The Department seeks comments on the opening bids and pre-auction deposits for AWS licences. 6.3 Bid Payment Winning bidders will be required to submit 20% of their high bids and 100% of any withdrawal penalties incurred within 10 business days of the auction’s close. This payment will be non-refundable. If the winning bidder fails to make this initial payment in a timely manner, the licence will not be issued and the bidder will be subject to the applicable forfeiture penalty. The remaining 80% of the high bids will be due within 30 business days of the auction’s close. Failure by the winning bidder to make this final payment in a timely fashion will also result in the licence not being issued, and again, the bidder will be subject to the applicable forfeiture penalty. It is also important to note that beyond the payment of the winning bid, no other licence fees or payments will be required for the duration of the licence term, as per subsection 5(1)(1.3) of the Radiocommunication Act. 7. Consultation Process Instructions for submitting comments and reply comments can be found in Canada Gazette notice DGTP-002-07 (page ii of this document). After having reviewed all the input received, the Minister of Industry will make final policy decisions. A notice will be published in the Canada Gazette announcing the availability of the final policy paper. 8. Submitting Comments 8.1 Instructions for Filing The instructions for filing comments are provided in the Canada Gazette notice reference number DGTP-002-07 (page ii of this document).


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8.2 Public Access All submissions received in response to this consultation paper will be made available for viewing on the Spectrum Management and Telecommunications website at the following address: http://strategis.gc.ca/spectrum. 9. Further Information All spectrum related documents referred to this paper are available on the Spectrum Management and Telecommunications website. For further information concerning the process outlined in this document or related matters, contact: Manager, Wireless Networks Telephone: (613) 990-4737 Facsimile: (613) 991-3514 [email protected]

http://strategis.gc.ca/spectrum

mailto:[email protected]


43

Annex 1 - Population, Points and Opening Bids for PCS Expansion and AWS Spectrum in Tiers 2, 3 and 4

Notes for Tables 1, 2, 3 and 4: 1. The population data in the tables in Annex 1 and 2 are from Statistics Canada 2001 census estimates

presented in Service Areas for Competitive Licensing, December 2006, Issue 3. 2. One point equals 10 MHz of spectrum and 10,000 population in a service area rounded up to the

nearest 10,000 population. Therefore, points per service area in Table 4 are estimated for a 10 MHz licence, while those in Tables 1, 2 and 3 are estimated for licences of 10 MHz, 30 MHz and 20 MHz respectively. This explains why 51 points are associated with the 10 MHz licence available for Service Area 2-01, Newfoundland and Labrador in Table 1 while 153 points are associated with the 30 MHz licence available for the same Service Area in Table 2.

3. In Table 4, $/MHz/pop are set at $0.04, $0.06 and $0.12 respectively, for population sizes as

follows: less than or equal to 200,000; between 200,000 and 2M; and greater than 2,000,000. These values are applied to the Tier 4 service area population figures to calculate opening bids as the product of Points x $/MHz/pop x 10 MHz x 10,000 pop.

4. To produce consistent results for points and opening bids in Tables 1, 2, and 3, the Table 4 results

were “rolled up” for Service Areas 3 and 2 and adjusted for licence size as noted in paragraph 2 above. The $/MHz/pop figures in Tables 1, 2, and 3 are then calculated as weighted averages of the underlying population zones by dividing opening bids by points, licence size (10, 20 or 30 MHz), and 10,000 (population adjustment) and rounded to three decimal points.

Table 1: Tier 2 – PCS Expansion Spectrum 10 MHz licence @ 1910-1915 MHz and 1990-1995 MHz Service Area #

Service Area Name

Pop $/MHz/pop Points 10 MHz Licence Opening Bids ($)

2-01 Newfoundland & Labrador 513283 0.049 51 2480002-02 Nova Scotia and Prince

Edward Island 1043231 0.047 106 5020002-03 New Brunswick 728996 0.040 73 2920002-04 Eastern Quebec 1590736 0.053 160 8400002-05 Southern Quebec 5151222 0.100 517 51700002-06 Eastern Ontario and Outaouais 2147161 0.051 212 10880002-07 Northern Quebec 162098 0.044 18 720002-08 Southern Ontario 8811118 0.096 880 84660002-09 Northern Ontario 785480 0.040 76 3040002-10 Manitoba 1118283 0.053 111 5880002-11 Saskatchewan 975717 0.049 98 4840002-12 Alberta 2979438 0.053 297 15740002-13 British Columbia 3907624 0.088 393 34700002-14 Yukon, Northwest Territories & Nunavut 92707 0.040 10 40000

30007094 0.077 3002 23138000


44

Table 2: Tier 2 – AWS band – 30 MHz licence @ 1740-1755 MHz and 2140-2155 MHz Service Area #

Service Area Name

Pop $/MHz/pop Points 30 MHz Licence Opening Bids ($)



30007094 0.077 9006 69414000 Table 3: Tier 3 – AWS band – 20 MHz licence @ 1720-1730 MHz and 2120-2130 MHz or

1730-1740 MHz and 2130-2140 MHz Service Area #

Service Area Name

Pop $/MHz/pop Points 20 MHz LicenceOpening Bids ($)

3-01 Newfoundland & Labrador 513283 0.049 102 4960003-02 Prince Edward Island 135294 0.040 28 1120003-03 Mainland Nova Scotia 760893 0.050 154 7720003-04 Cape Breton 147044 0.040 30 1200003-05 Southern New Brunswick 167343 0.040 34 1360003-06 Western New Brunswick 209226 0.040 42 1680003-07 Eastern New Brunswick 352427 0.040 70 2800003-08 Bas-du-Fleuve 298272 0.040 60 2400003-09 Québec 917873 0.057 184 10480003-10 Chicoutimi-Jonquière 374591 0.052 76 3920003-11 Eastern Townships 509716 0.049 102 4960003-12 Trois Rivières 749813 0.047 152 7080003-13 Montréal 3784569 0.119 758 90480003-14 Upper Outaouais 107125 0.040 22 880003-15 Ottawa/Outaouais 1265237 0.059 252 14880003-16 Pembroke 108155 0.040 22 880003-17 Abitibi 187081 0.040 36 1440003-18 Cornwall 65921 0.040 14 560003-19 Brockville 82868 0.040 16 640003-20 Kingston 162711 0.040 32 1280003-21 Belleville 184595 0.040 38 1520003-22 Cobourg 59699 0.040 12 48000


45

Service Area #

Service Area Name

Pop $/MHz/pop Points 20 MHz LicenceOpening Bids ($)

3-23 Peterborough 192992 0.040 38 1520003-24 Huntsville 72323 0.040 14 560003-25 Toronto 5635828 0.120 1128 135360003-26 Barrie 591338 0.049 116 5720003-27 Guelph/Kitchener 607034 0.059 122 7200003-28 Listowel/Goderich/Stratford 133987 0.040 26 1040003-29 Niagara-St.Catharines 354971 0.058 72 4200003-30 London/Woodstock/St. Thomas 765656 0.056 154 8600003-31 Chatham 107029 0.040 20 800003-32 Windsor/Leamington 376213 0.060 76 4560003-33 Strathroy 166739 0.040 32 1280003-34 North Bay 122253 0.040 24 960003-35 Sault Ste. Marie 135482 0.040 26 1040003-36 Sudbury 172605 0.040 34 1360003-37 Kirkland Lake 120308 0.040 22 880003-38 Thunder Bay 234832 0.040 46 1840003-39 Winnipeg 945818 0.055 188 10400003-40 Brandon 172466 0.040 34 1360003-41 Regina 349538 0.053 70 3680003-42 Moose Jaw 104297 0.040 22 880003-43 Saskatoon 521881 0.049 104 5120003-44 Edmonton 1199125 0.056 238 13280003-45 Medicine Hat/Brooks 175719 0.040 34 1360003-46 Lethbridge 156171 0.040 32 1280003-47 Calgary 1091674 0.058 218 12680003-48 Red Deer 198479 0.040 40 1600003-49 Grande Prairie 158271 0.040 32 1280003-50 Kootenays 132915 0.040 28 1120003-51 Okanagan/Columbia 368648 0.056 76 4240003-52 Vancouver 2310047 0.116 462 53680003-53 Victoria 389247 0.060 78 4680003-54 Nanaimo 165741 0.040 34 1360003-55 Courtenay 106015 0.040 22 880003-56 Thompson/Cariboo 174288 0.040 34 1360003-57 Prince George 200006 0.040 40 1600003-58 Dawson Creek 60717 0.040 12 480003-59 Yukon, Northwest Territories &Nunavut 92707 0.040 20 80000

30007094 0.077 6004 46276000


46

Table 4: Tier 4 – AWS band – 10 MHz licence @1710-1715 MHz and 2110-2115 MHz or 1715-1720 MHz and 2115-2120 MHz

Service Area Number

Service Area Name

Pop $/MHz/pop Points 10 MHz LicenceOpening Bid ($)

4-001 St. John's 223381 0.06 22 1320004-002 Placentia 19464 0.04 2 80004-003 Gander/Grand Falls/Windsor 159526 0.04 16 640004-004 Corner Brook/Stephenville 82694 0.04 8 320004-005 Labrador 28217 0.04 3 120004-006 Charlottetown 86793 0.04 9 360004-007 Summerside 48501 0.04 5 200004-008 Yarmouth 62591 0.04 6 240004-009 Bridgewater/Kentville 140124 0.04 14 560004-010 Halifax 389094 0.06 39 2340004-011 Truro 56095 0.04 6 240004-012 Amherst 36091 0.04 4 160004-013 Antigonish/New Glasgow 76898 0.04 8 320004-014 Sydney 147044 0.04 15 600004-015 Saint John 140331 0.04 14 560004-016 St. Stephen 27012 0.04 3 120004-017 Fredericton 152323 0.04 15 600004-018 Moncton 151240 0.04 15 600004-019 Miramichi/Bathurst 169181 0.04 17 680004-020 Grand Falls 28528 0.04 3 120004-021 Edmundston 28374 0.04 3 120004-022 Campbellton 32006 0.04 3 120004-023 Matane 118114 0.04 12 480004-024 Mont-Joli 41770 0.04 4 160004-025 Rimouski 52049 0.04 5 200004-026 Rivière-du-Loup 86340 0.04 9 360004-027 La Malbaie 29403 0.04 3 120004-028 Chicoutimi-Jonquiere 217187 0.06 22 1320004-029 Montmagny 59520 0.04 6 240004-030 Québec 780745 0.06 78 4680004-031 Sainte-Marie 48205 0.04 5 200004-032 Saint-Georges 67337 0.04 7 280004-033 Lac Megantic 24923 0.04 2 80004-034 Thetford Mines 42871 0.04 4 160004-035 Plessisville 21894 0.04 2 80004-036 La Tuque 16300 0.04 2 80004-037 Trois-Rivières 252368 0.06 25 1500004-038 Louiseville 22226 0.04 2 80004-039 Asbestos 30204 0.04 3 120004-040 Victoriaville 49457 0.04 5 200004-041 Coaticook 13362 0.04 1 40004-042 Sherbrooke 216182 0.06 22 1320004-043 Windsor 16443 0.04 2 80004-044 Drummondville 96533 0.04 10 400004-045 Cowansville 27044 0.04 3 120004-046 Farnham 27861 0.04 3 120004-047 Granby 86541 0.04 9 36000


47

Service Area Number

Service Area Name


4-048 Saint-Hyacinthe 83957 0.04 8 320004-049 Sorel 55994 0.04 6 240004-050 Joliette 135893 0.04 14 560004-051 Montréal 3756709 0.12 376 45120004-052 Sainte-Agathe-des-Monts 61197 0.04 6 240004-053 Hawkesbury 62398 0.04 6 240004-054 Mont-Laurier/Maniwaki 45928 0.04 5 200004-055 Ottawa 1202839 0.06 120 7200004-056 Pembroke 77757 0.04 8 320004-057 Arnprior/Renfrew 30397 0.04 3 120004-058 Rouyn-Noranda 40512 0.04 4 160004-059 Notre-Dame-du-Nord 17427 0.04 2 80004-060 La Sarre 20272 0.04 2 80004-061 Amos 24982 0.04 2 80004-062 Val D'Or 43487 0.04 4 160004-063 Roberval/Saint-Felicien 61573 0.04 6 240004-064 Baie-Comeau 48423 0.04 5 200004-065 Port-Cartier/Sept-Iles 47407 0.04 5 200004-066 Chibougamau 40400 0.04 4 160004-067 Cornwall 65921 0.04 7 280004-068 Brockville 69968 0.04 7 280004-069 Gananoque 12901 0.04 1 40004-070 Kingston 162711 0.04 16 640004-071 Napanee 39509 0.04 4 160004-072 Belleville 145085 0.04 15 600004-073 Cobourg 59699 0.04 6 240004-074 Peterborough 151081 0.04 15 600004-075 Lindsay 41911 0.04 4 160004-076 Minden 17819 0.04 2 80004-077 Toronto 5635828 0.12 564 67680004-078 Alliston 99207 0.04 10 400004-079 Guelph/Kitchener 580963 0.06 58 3480004-080 Fergus 26072 0.04 3 120004-081 Kincardine 173663 0.04 17 680004-082 Listowel/Goderich 84491 0.04 8 320004-083 Fort Erie 28451 0.04 3 120004-084 Niagara-St. Catharines 326520 0.06 33 1980004-085 Haldimand/Dunnville 35936 0.04 4 160004-086 London/Woodstock/St. Thomas 607564 0.06 61 3660004-087 Brantford 122156 0.04 12 480004-088 Stratford 49496 0.04 5 200004-089 Chatham 74209 0.04 7 280004-090 Windsor/Leamington 376213 0.06 38 2280004-091 Wallaceburg 32820 0.04 3 120004-092 Sarnia 124825 0.04 12 480004-093 Strathroy 41914 0.04 4 160004-094 Barrie 274354 0.06 27 162000


48

Service Area Number

Service Area Name


4-095 Midland 44114 0.04 4 160004-096 Gravenhurst/Bracebridge 54503 0.04 5 200004-097 North Bay 102831 0.04 10 400004-098 Parry Sound 19422 0.04 2 80004-099 Elliot Lake 31261 0.04 3 120004-100 Sudbury 172605 0.04 17 680004-101 Kirkland Lake 34740 0.04 3 120004-102 Timmins 43906 0.04 4 160004-103 Kapuskasing 41662 0.04 4 160004-104 Kenora/Sioux Lookout 61920 0.04 6 240004-105 Iron Bridge 22567 0.04 2 80004-106 Sault Ste. Marie 81654 0.04 8 320004-107 Marathon 29468 0.04 3 120004-108 Thunder Bay 121372 0.04 12 480004-109 Fort Frances 22072 0.04 2 80004-110 Steinbach 45879 0.04 5 200004-111 Winnipeg 722206 0.06 72 4320004-112 Lac du Bonnet 53537 0.04 5 200004-113 Morden/Winkler 38697 0.04 4 160004-114 Brandon 92736 0.04 9 360004-115 Portage la Prairie 20073 0.04 2 80004-116 Dauphin 79729 0.04 8 320004-117 Creighton/Flin Flon 21360 0.04 2 80004-118 Thompson 44066 0.04 4 160004-119 Estevan 44562 0.04 4 160004-120 Weyburn 21658 0.04 2 80004-121 Moose Jaw 56844 0.04 6 240004-122 Swift Current 47453 0.04 5 200004-123 Yorkton 66760 0.04 7 280004-124 Regina 216558 0.06 22 1320004-125 Saskatoon 237314 0.06 24 1440004-126 Watrous 29426 0.04 3 120004-127 Battleford 91099 0.04 9 360004-128 Prince Albert 130757 0.04 13 520004-129 Lloydminster 30719 0.04 3 120004-130 Northern Saskatchewan 33286 0.04 3 120004-131 Medicine Hat/Brooks 89056 0.04 9 360004-132 Lethbridge 156171 0.04 16 640004-133 Stettler/Oyen/Wainwright 52089 0.04 5 200004-134 High River 58713 0.04 6 240004-135 Strathmore 38332 0.04 4 160004-136 Calgary 994628 0.06 99 5940004-137 Red Deer 151548 0.04 15 600004-138 Wetaskiwin/Ponoka 46931 0.04 5 200004-139 Camrose 34573 0.04 3 120004-140 Vegreville 14407 0.04 1 40004-141 Edmonton 943011 0.06 94 564000


49

Service Area Number

Service Area Name


4-142 Edson/Hinton 45052 0.04 5 200004-143 Bonnyville 73729 0.04 7 280004-144 Whitecourt 27135 0.04 3 120004-145 Barrhead 22025 0.04 2 80004-146 Fort McMurray 43046 0.04 4 160004-147 Peace River 82673 0.04 8 320004-148 Grande Prairie 75598 0.04 8 320004-149 East Kootenay 56284 0.04 6 240004-150 West Kootenay 76630 0.04 8 320004-151 Kelowna 299947 0.06 30 1800004-152 Vancouver 2201446 0.12 220 26400004-153 Hope 21930 0.04 2 80004-154 Victoria 389247 0.06 39 2340004-155 Nanaimo 165741 0.04 17 680004-156 Courtenay 106015 0.04 11 440004-157 Powell River 26889 0.04 3 120004-158 Squamish/Whistler 59781 0.04 6 240004-159 Merritt 15362 0.04 2 80004-160 Kamloops 92024 0.04 9 360004-161 Ashcroft 16503 0.04 2 80004-162 Salmon Arm 46184 0.04 5 200004-163 Golden 7154 0.04 1 40004-164 Williams Lake 41149 0.04 4 160004-165 Quesnel/Red Bluff 24613 0.04 2 80004-166 Skeena 63902 0.04 6 240004-167 Prince George 95334 0.04 10 400004-168 Smithers 40770 0.04 4 160004-169 Dawson Creek 60717 0.04 6 240004-170 Yukon 28674 0.04 3 120004-171 Nunavut 26745 0.04 3 120004-172 Northwest Territories 37288 0.04 4 16000

30007094 0.077 3002 23138000


50

Annex 2 - Population, Points and Opening Bids for 1670-1675 MHz Spectrum in Tier 2

Service Area #

Service Area Name

Pop $/MHz/pop Points* 5 MHz LicenceOpening Bids ($)**



30007094 0.010 3001 1500500 * Note: one point for every 10,000 pop and 5 MHz. Derived from Tier 2 figures rather than aggregated from Tier 4 service areas. Based on $0.01 /MHz/pop, one point, which covers 5 MHz of spectrum and 10,000 pop., will cost $500. ** Note: calculated as $500 x points.


51

Annex 3 - Changes to Canadian Table of Frequency Allocations

MHz 1 710 - 1 755 FIXED MOBILE 5.341 5.384A 5.385 5.386 1 755 - 1 850 FIXED Mobile C5 5.384A 5.386 C33 C37 1 850 - 1 970 FIXED MOBILE 5.384A 5.388 5.388A C35 1 970 - 1 990 FIXED MOBILE 5.388 5.388A 5.389A 5.389B C35 1 990 - 2 000 FIXED MOBILE 5.388 5.389A 2 000 - 2 020 FIXED MOBILE MOBILE SATELLITE (Earth-to-space) 5.351A 5.388 5.389A 5.389C 5.389E 5.390 C36


52

2 020 - 2 025 FIXED MOBILE 5.388 5.389C 5.389E 5.390 C37 … (No change to the band 2025 – 2110 MHz)

2 110 - 2 120 FIXED MOBILE SPACE RESEARCH (deep space) (Earth-to-space) 5.388 5.388A

2 120 - 2 155 FIXED MOBILE 5.388 5.388A 2 155 - 2 180 FIXED MOBILE 5.388 5.388A 5.389A 5.389C 5.389E 5.390 C37 2 180 - 2 200 FIXED MOBILE MOBILE-SATELLITE (space-to-Earth) 5.351A 5.388 5.389A C36 5.341 In the bands 1 400-1 727 MHz, 101-120 GHz and 197-220 GHz, passive research is

being conducted by some countries in a programme for the search for intentional emissions of extraterrestrial origin.

5.351A For the use of the bands 1 525-1 544 MHz, 1 545-1 559 MHz, 1 610-1 626.5 MHz,

1 626.5-1 645.5 MHz, 1 646.5-1 660.5 MHz, 1 980-2 010 MHz, 2 170-2 200 MHz,


53

2 483.5-2 500 MHz, 2 500-2 520 MHz and 2 670-2 690 MHz by the mobile-satellite service, see Resolutions 212 (Rev. WRC-97) and 225 (WRC-2000). (WRC-2000)

5.384A The bands, or portions of the bands, 1 710-1 885 MHz and 2 500-2 690 MHz, are

identified for use by administrations wishing to implement International Mobile Telecommunications-2000 (IMT-2000) in accordance with Resolution 223 (WRC-2000). This identification does not preclude the use of these bands by any application of the services to which they are allocated and does not establish priority in the Radio Regulations. (WRC-2000)

5.385 Additional allocation: the band 1 718.8-1 722.2 MHz is also allocated to the radio

astronomy service on a secondary basis for spectral line observations. (WRC-2000) 5.386 Additional allocation: the band 1 750-1 850 MHz is also allocated to the space

operation (Earth-to-space) and space research (Earth-to-space) services in Region 2, in Australia, Guam, India, Indonesia and Japan on a primary basis, subject to agreement obtained under No. 9.21, having particular regard to troposcatter systems. (WRC-03)

5.388 The bands 1 885-2 025 MHz and 2 110-2 200 MHz are intended for use, on a

worldwide basis, by administrations wishing to implement International Mobile Telecommunications-2000 (IMT-2000). Such use does not preclude the use of these bands by other services to which they are allocated. The bands should be made available for IMT-2000 in accordance with Resolution 212 (Rev. WRC-97). (See also Resolution 223 (WRC-2000)). (WRC-2000)

5.388A In Regions 1 and 3, the bands 1 885-1 980 MHz, 2 010-2 025 MHz and

2 110-2 170 MHz and, in Region 2, the bands 1 885-1 980 MHz and 2 110-2 160 MHz may be used by high altitude platform stations as base stations to provide International Mobile Telecommunications-2000 (IMT-2000), in accordance with Resolution 221 (Rev. WRC-03). Their use by IMT-2000 applications using high altitude platform stations as base stations does not preclude the use of these bands by any station in the services to which they are allocated and does not establish priority in the Radio Regulations. (WRC-03)

5.389A The use of the bands 1 980-2 010 MHz and 2 170-2 200 MHz by the mobile-satellite

service is subject to coordination under No. 9.11A and to the provisions of Resolution 716 (WRC-95). The use of these bands shall not commence before 1 January 2000; however the use of the band 1 980-1 990 MHz in Region 2 shall not commence before 1 January 2005.

5.389B The use of the band 1 980-1 990 MHz by the mobile-satellite service shall not cause

harmful interference to or constrain the development of the fixed and mobile services in Argentina, Brazil, Canada, Chile, Ecuador, the United States, Honduras, Jamaica, Mexico, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.


54

5.389C The use of the bands 2 010-2 025 MHz and 2 160-2 170 MHz in Region 2 by the mobile-satellite service shall not commence before 1 January 2002 and is subject to coordination under No. 9.11A and to the provisions of Resolution 716 (WRC-95). (WRC-97)

5.389E The use of the bands 2 010-2 025 MHz and 2 160-2 170 MHz by the mobile-satellite

service in Region 2 shall not cause harmful interference to or constrain the development of the fixed and mobile services in Regions 1 and 3.

5.390 In Argentina, Brazil, Chile, Colombia, Cuba, Ecuador, Suriname and Uruguay, the

use of the bands 2 010-2 025 MHz and 2 160-2 170 MHz by the mobile-satellite services shall not cause harmful interference to stations in the fixed and mobile services before 1 January 2005. After this date, the use of these bands is subject to coordination under No. 9.11A and to the provisions of Resolution 716 (WRC-95). (WRC-2000)

C5 For the exclusive use of the Government of Canada. C33 In the band 1670-1675 MHz and 1 800-1 805 MHz, the use of aeronautical public

correspondence in accordance with international footnote 5.380 may be the subject of a subject of a future policy review.

C35 In the band 1 850-1 990 MHz, stations of the mobile service have priority over those

of the fixed service with displacement of fixed assignments governed by the appropriate spectrum utilization policy.

C36 (CAN-06) In the bands 2 000-2 020 MHz and 2180-2200 MHz, the mobile-satellite service has

priority over the fixed service. A moratorium is placed on the licensing of new systems in the fixed service. Specific fixed service stations will be displaced, according to the transition policy, to enable the implementation of mobile-satellite service systems in certain sub-bands.

C37 (CAN-06) The designation of the bands 1 755-1 780 MHz, 2020-2025 MHz and

2 155-2 180 MHz for Advanced Wireless Services may be the subject of a future public consultation.


55

Canadian Table of Frequency Allocations for the 1670-1675 MHz band

MHz 1 670 - 1 675 FIXED METEOROLOGICAL AIDS METEOROLOGICAL-SATELLITE (space-to-Earth) MOBILE (except aeronautical mobile) MOBILE-SATELLITE (Earth-to-Space) 5.348C 5.379B C31 5.341 5.379D 5.379E 5.380A C33 5.341 In the bands 1 400-1 727 MHz, 101-120 GHz and 197-220 GHz, passive research is

being conducted by some countries in a programme for the search for intentional emissions of extraterrestrial origin.

5.348C For the use of the bands 1 518-1 525 MHz and 1 668-1 675 MHz by the

mobile-satellite service, see Resolution 225 (Rev. WRC-03). (WRC-03) 5.379B The use of the band 1 668-1 675 MHz by the mobile-satellite service is subject to

coordination under No. 9.11A. (WRC-03) 5.379D For sharing of the band 1 668-1 675 MHz between the mobile-satellite service and the

fixed, mobile and space research (passive) services, Resolution 744 (WRC-03) shall apply. (WRC-03)

5.379E In the band 1 668.4-1 675 MHz, stations in the mobile-satellite service shall not cause

harmful interference to stations in the meteorological aids service in China, Iran (Islamic Republic of), Japan and Uzbekistan. In the band 1 668.4-1 675 MHz, administrations are urged not to implement new systems in the meteorological aids service and are encouraged to migrate existing meteorological aids service operations to other bands as soon as practicable. (WRC-03)

5.380A In the band 1 670-1 675 MHz, stations in the mobile-satellite service shall not cause

harmful interference to, nor constrain the development of, existing earth stations in the meteorological-satellite service notified in accordance with Resolution 670 (WRC-03). (WRC-03)

C31 (CAN-04) In the bands 1 518-1 525 MHz and 1 668-1 675 MHz, the mobile-satellite service is

withheld. C33 In the bands 1 670-1 675 MHz and 1 800-1 805 MHz, the use of aeronautical public

correspondence in accordance with international footnote 5.380 may be the subject of a future policy review.

Documents

DGTP-014-06 Spectrum Policy and Consultation on a ...FILE/aws-consultation-e.pdf · Advanced Wireless Services and Review of the Mobile Spectrum Cap Policy (DGTP-007-03). The paper