Battle brewing over use of MCS/MDS band for mobile services, documents reveal

Fixed wireless access industry stakeholders and mobile service providers appear headed for a battle over access to valuable spectrum in the 2500 MHz band (DGTP-004-04). In comments to Industry Canada’s consultation on proposals to realign the band, at least one mobile wireless provider is saying that the department should reclaim the MCS/MDS spectrum band so that it can auction it to the highest bidder. In contrast, MCS and MDS players argue Industry Canada has to make sure existing licensees are guaranteed future access to the spectrum. Issues surrounding the 2500 MHZ band realignment arose following decisions taken at the 2000 World Radiocommunication Conference (WRC-00) when the International Telecommunications Union identified the frequencies as the potential home to third-generation mobile wireless services. The following year the Federal Communications Commission (FCC) added a mobile allocation to the band, prompting Industry Canada to do the same. The problem in Canada is that some operators want to be assured of access to the spectrum so as to ensure harmonized mobile operations around the world, while fixed wireless interests say they have invested hundreds of millions of dollars to build out a network and deploy services in the band and that they should continue to have access to it. Look Communications Inc., Canada’s largest MDS licensee, notes the department made a commitment to ensuring existing licence holders could implement business plans. "The incumbents in these bands have invested heavily to operationalize their business plans. In fact, Look has invested over $700 million to establish its current business. The licensee’s business plans have been based on current band plans, and licence terms and conditions. Any changes to the band plan must provide for the ongoing operations of the incumbents, and allow them to continue to development of new innovative products and services," reads Look’s comments. Inukshuk Internet Inc., holder of 12 of 13 MCS licences, writes in its comments that despite the recent band realignment in the United States and the desire to align Canadian 2500 MHz spectrum policy with that in the U.S., Industry Canada must exercise caution. "…the department must be cautious that any realignment proposed for the 2500 MHz band not unduly interfere with or disrupt the effective use being made by existing licensees of their assigned spectrum," reads the company’s comments. Canada’s other MCS licensee SaskTel agrees with Inukshuk that the addition of mobile services to the 2500 MHz shouldn’t be allowed to disrupt existing operations. "SaskTel welcomes the introduction of new fixed and mobile services in this band, on the condition that these new services will not adversely impact the fixed wireless network we are now deploying throughout Saskatchewan," the company writes. Much of Industry Canada’s decision on introducing changes to the 2500 MHz band relied on what the FCC decided to do. The FCC introduced in July 2004 a band realignment plan splitting MCS into two blocks separated by MDS in the middle. SaskTel, Inukshuk and Look all agree that consideration should be given to implementing a band realignment similar to the U.S. in Canada. Writes Look: "The adoption in Canada of a plan essentially the same as that adopted by the FCC would enhance opportunities for inter-operability of Canadian and American networks. In addition, an integrated plan would provide opportunities for Canadian network providers to enjoy lower equipment costs due to the economics of scale enabled by the larger size of the American marketplace." Inukshuk echoes Looks assessment. "Again, by ensuring that Canada’s 2500 MHz band has a harmonized alignment with the United States, Industry Canada can ensure that service providers will be able to exploit scale economies in producing both base station equipment and CPE (customer premise equipment). This will, in turn, reduce costs and further stimulate broadband service rollout, all to the benefit of Canadian consumers and businesses," the company writes. On the issue of adding mobile services to the 2500 MHz band in Canada, SaskTel, Look and Inukshuk aren’t against their introduction, but they express concern about the impact on their fixed services. Inukshuk flatly states its desire to not have to be displaced from the band. SaskTel highlights potential interference problems if mobile services were to be implemented throughout its operating territory. "Although SaskTel does not oppose the introduction of mobile services in the 2500-2690 MHz band, we believe that it will be difficult for mobile services to share the band with fixed and broadcasting services in the same geographical region. This may be especially difficult in Saskatchewan with our widespread deployment of MCS to reach rural areas, as some of our proposed tower locations are near major urban areas. Image Wireless also currently operates an MDS broadcast system in Saskatchewan, further reducing the amount of spectrum potentially available for future mobile services," the company writes. Saskatchewan’s incumbent telco doesn’t share the same opinion as Bell Mobility and the Bell Wireless Alliance (BWA). The BWA, writing on behalf of Aliant Telecom Inc., Bell Mobility, Northwestel Mobility Inc., and the Corporation of the City of Thunder Bay, notes other foreign administrations have adopted the 2500 MHz band as a potential 3G band and argues that it would make sense to do the same. BWA notes that a number of device manufacturers have suggested that in fact 3G-capable mobile terminals operating in the 2500 MHz band could be available before those designed to operate in the 1710-1755 MHz paired with the 2110-2155 MHz band. "In light of this potentiality, the BWA strongly believes the department has to closely monitor international developments, concerning the development and availability of handsets, and license spectrum in Canada accordingly," the BWA writes. The companies go further and suggest that Industry Canada repatriate the spectrum in the event that mobile services are allowed in the band. "To allow these licensees to retain this spectrum, in the event that mobile services were implemented in the band, would leave them with an unfair competitive advantage over other mobile licensees resulting solely from the subsequent change in the allocation of the band. Similarly, it would also allow existing licensees an unfair financial advantage, at the expense of Canadian taxpayers, should they be permitted to sell their spectrum rights to a third party, rather than return the spectrum to the department. Returning the spectrum to the department would enable an open and competitive licensing process prior to the implementation of mobile service in the band," writes the BWA. The Bell alliance counters suggestions from the MCS and MDS operators that the former Industry Canada minister had explicitly stated in November 2001 they would be able to retain rights to their current holdings even in the event that a mobile services allocation were to be added to the band. It notes that it is more likely the department meant there would be certainty under existing terms and conditions of licence. Continues the BWA: "The BWA does not believe that it was the department’s intention to create either a spectrum or financial windfall, for the MCS and MDS licensees, by giving them virtually free access to mobile spectrum while other mobile licensees are expected to pay substantial amounts in a competitive auction to acquire the use of the same resource. The BWA submits that this is demonstrated by the fact that the department has indicated, in the current consultation, that any future use of the band for mobile service will be first subject to a spectrum policy and licensing consultation."

Battle brewing over use of MCS/MDS band for mobile services, documents reveal

News | 10/21/2004 4:00 am EDT

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