The Canadian government said it plans to more actively promote competition in the wireless space, announcing a number of decisions today that it said would ensure that consumers have at least four choices in wireless communications across every region of the country. The moves will also postpone the auction of 700 MHz spectrum licenses until early next year.
As part of its initiatives, Industry Canada said it would not approve Telus’ application transfer of spectrum licenses in the 1.7/2.1 GHz band from Mobilicity citing the initial requirement of those licenses to be used by new entrants into the market. Telus announced last month plans to acquire Mobilicity for $370 million, and received court approval for the deal last week.
“Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of license and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit,” said Christian Paradis, Minister of Industry. “Our government will continue to allow wireless providers access to the spectrum they need to compete and improve services to Canadians. We are seeing Canadian consumers benefit from our policies and we will not allow the sector to move backwards. I will not hesitate to use any and every tool at my disposal to support greater competition in the market.”
Paradis added that going forward, Industry Canada would not permit the transfer of spectrum licenses that result in “undue spectrum concentration.”
“All applications for licence transfers will be reviewed on a case-by-case basis and decisions will be issued publicly to increase transparency,” the agency noted.
This move has also impacted the government’s planned auction of license in the 700 MHz band, which was originally set for Nov. 19. Industry Canada said the application deadline to participate in that auction has now been set for Sept. 17, with the auction slated to begin on Jan. 14, 2014.
“These new dates will provide companies with additional time to consider today’s decisions and finalize their approaches to the auction process,” the agency explained.
In setting up the original rules for the 700 MHz auction, Industry Canada 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. 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.
Industry Canada did not update auction plans for the 2.5 GHz band, but said initially it plans to conduct that auction within one year of the 700 MHz event.
While Industry Canada was looking at ways to entice new entrants into the wireless space, the Canadian Radio-Television and Telecommunications Commission announced new regulations designed to ease the burden on current customers. The CRTC said that beginning Dec. 2, all new contract customers will be able to get out of three-year contracts without having to pay a cancellation fee as part of the new “wireless code.”
“The wireless code is a tool that will empower consumers and help them make informed choices about the service options that best meet their needs,” said Jean-Pierre Blais, chairman of the CRTC. “To make the most of this tool, consumers also have a responsibility to educate themselves.”
The CRTC also said it would require carriers to cap data overages at $50 per month and international data roaming charged at $100 per month; allow customers to unlock devices after 90 days of service or immediately if the device has been paid in full; provide a 15-day return window for customers signing up for new service; and receive a contract that “is easy to read and understand.”
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.
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