Wireless industry stakeholders are generally applauding Industry Canada for the proposed changes to the way it manages spectrum resources it has made in DGTP-001-05. The department is also receiving praise for plans to modify its spectrum management program over the next five to seven years. Many parties lauded the government for proposing to implement secondary market trading, transferability and divisibility of spectrum as a way to more effectively and efficiently manage wireless bandwidth. Mobilexchange Spectrum Inc. was particularly vocal in its comments that the government has to implement this type of policy. "he current process of transferability and divisibility requires Industry Canada to qualify the applicant in the same way that is required for other types of spectrum provisioning, e.g. in the same or other frequency bands," writes Mobilexchange, suggesting this process should be managed by the spectrum holder. "To increase usage in the licensed areas, the licensee should have the privilege to lease its spectrum to third parties meeting standard qualification criterion contained in the relevant Acts and regulations. Spectrum management and responsibility would remain with the licensee and enforceability of Industry Canada’s directives would be passed on to the lessee. This added flexibility would greatly favour the usage of licensed spectrum while preserving spectrum in other bands under Industry Canada’s management," says Mobilexchange. The company goes as far to suggest that leasing spectrum should be an obligation on licensees "unless they can assure that the spectrum is required for their own use prior to the prescribed usage implementation deadline." Telus Mobility agrees with Mobilexchange that there should be greater opportunities for secondary spectrum market trading where it is appropriate. The national wireless operator suggests that this could be accomplished if "leases of portions of spectrum licences acquired in an auction" were issued quicker. Telus Mobility considers this a good move, and should be respected by the department, provided conditions of licence such as foreign ownership restrictions, buildout requirements and research and development commitments are met. The Bell Wireless Alliance (BWA) also agrees that secondary market trading for spectrum is a good policy move by the department, but notes the process should be driven by market forces. "The BWA...recommends that, if secondary market trading is to be successful, any process governing such transactions has to be voluntary, simple, expedient, and to the greatest extent possible, driven by commercial rather than bureaucratic considerations," reads the groups’ comments. Despite the positive responses to its proposals, some parties expressed concern about proposals surrounding the use of licence-exempt spectrum to promote wireless service deployment in rural parts of the country and R&D requirements associated with spectrum licences awarded in competitive processes. Telus Mobility suggests the department heed the call from the Radio Advisory Board of Canada (RABC) that Industry Canada "assess the introduction of license exempt devices and services judiciously, taking into account Canadian policy and usage of licensed spectrum." The RABC also notes that licence-exempt spectrum could cause an economic distortion that could delay investment to fully realize the benefits of licensed spectrum. As a result, Telus Mobility suggests "until more experience has been gained with licence-exempt devices and systems, it may be wise to take a bit of a ‘breather’ and temporarily refrain from allocation of further licence-exempt spectrum (to the extent possible given the practical realities of global equipment manufacturing) until such time as the full impact of licence exempt had been better evaluated, and any negative impacts identified and assessed," reads the company’s comments. BWA agrees with Telus Mobility that more attention needs to be paid to the potential distorting impact that licence-exempt devices could have on the market. The wireless operator suggests the department should collect an economic rent to offset an imbalance where free licence-exempt spectrum is being used to compete against providers which have paid, in some cases, large sums for licensed spectrum. Ma Bell’s wireless arm criticizes the department’s proposal to maintain the research and development licence condition attached to spectrum licences acquired in a competitive process. Highlighting the economic impact of the R&D requirement and others, the company writes, "As a general comment, the BWA also submits that the government has to be cognizant of the cumulative effect of mandatory commitments imposed on licensees of which the R&D is only one. Taking together all such requirements, e.g. R&D, roll out, licence fees, auction payments, etc., all have a significant effect on the financial results of carriers operating in the industry." There were many other comments to Industry Canada’s proposals detailed in DGTP-001-05, some of which will prove to be quite contentious. The New Party Cellular Policy, which has helped many small, rural wireless operators gain a slice of previously licensed airwaves not currently used by the original licensee, has come under criticism. Telus Mobility suggests that this policy must be removed from the books following the department’s move to spectrum licences from site specific licences and its recent policy to promote digital roaming in rural parts of the country (RoW, Sept. 8/05). Report on Wireless will have more on this matter in an upcoming issue.