Canada to auction 700 MHz spectrum Nov. 19

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Canada’s telecommunications regulatory body, Industry Canada, said it would begin auctioning off spectrum in the 700 MHz band on Nov. 19, as part of the government’s plans to bolster competition across the country’s wireless industry.

The auction is set to use a “combinatorial clock auction format” using package bids designed to eliminate “the risk that bidders win some but not all of the licenses needed for their business case. Bidders can bid on the entire package of licenses that they want, on an all-or-nothing basis, rather than trying to bid on a collection of individual licenses.

As was announced last year, the government also said it would apply spectrum caps to the auction in a move to ensure that at least four new entrants enter the wireless space. In addition, build out requirements for rural areas will also be in effect for those companies acquiring two blocks of paired spectrum. Industry Canada has also said it plans to auction off spectrum in the 2.5 GHz band within a year of the 700 MHz auction.

Those spectrum caps will place a limit on “prime” spectrum to incumbent operators that is expected to reserve those licenses for new entrants into the space.

“In the case of the 700 MHz spectrum, a limit on prime spectrum will be imposed on incumbents, which, like a set-aside, will effectively reserve prime spectrum for new entrants and regional providers,” Industry Canada noted last year. “Unlike a set-aside, the measures will not require Industry Canada to identify specific blocks of spectrum, allowing companies to bid according to their business plans.”

In addition, any provider that does not currently own spectrum in the lower bands would be allowed to purchase up to two new spectrum blocks at 700 MHz. The government also said it will apply “specific measures” for its planned 700 MHz spectrum auction “to see that rural Canadians will have access to the same advanced services as everyone else in a timely manner.” The propagation characteristics of the 700 MHz spectrum band are seen as ideal for providing mobile broadband coverage to the vast expanses of Canada outside of city centers.

The new regulations will require companies that control two or more blocks of paired spectrum in the 700 MHz band to cover 90% of the country’s population with their “current high-speed coverage” within five years and 97% within seven years of being granted the licenses. The government also said it would enforce general rollout timelines to both the 700 MHz and 2.5 GHz spectrum licenses ranging between 20% and 50% population coverage within a 10-year period.

Canada’s wireless market is still dominated by Rogers, Bell Canada and Telus Mobility, with the two latter operators working through a network partnership that sees Bell Canada manage operations in the Eastern part of the country and Telus Mobility managing services in the Western part of Canada. The government previously attempted to infuse competition into the space through the auction of 1.7/2.1 GHz spectrum in 2008, though that has seen limited success as only a handful of carriers have entered the space, while others have sold off those spectrum holdings to established carriers.

In addition to the spectrum auctions, the government is looking at reviewing the policy on spectrum license transfer requests with the objective of promoting a competitive environment; expanding and extending the requirement for companies to provide roaming to competitors, thereby increasing competition; and strengthening cell tower sharing rules to further reduce proliferation and deliver better services.

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About Author

Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
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Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”

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