Spectrum auction framework looks to help increase number of competitors

Industry Canada’s recently announced spectrum auction consultation appears to be leaning towards letting new competitors into the market, particularly for advanced wireless services (AWS). While the consultation doesn’t overtly say new competitors are wanted, certain proposed provisions in the paper seem to demonstrate that the department isn’t happy with the level of competition in the market.Perhaps one of the more glaring aspects of the consultation document (DGTP-002-07) is the department’s internal debate over whether it needs to intervene to promote more competition, or risk further concentration of spectrum in the hands of the incumbent providers. Both circumstances carry consequences, notes Industry Canada, so the department has to find an appropriate balance. "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," reads the consultation paper. "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." To ensure the entry of a new competitor, whether it be a regional player focusing on a part of the country or a national player intent on going head-to-head against the three existing national carriers, certain provisions are required. One is setting aside spectrum for a new entrant. It’s unclear whether this will happen as the department has shied away from this provision for the most part in the past. Another aspect of the document that might point to the department’s penchant for allowing new competitors into the market is mandated digital roaming. While Industry Canada didn’t specifically indicate it was going to push for this provision, it made no secret of digital roaming’s benefits."It is expected that Canadian subscribers of any carrier would benefit from similar roaming services," states the department in reference to digital telephony roaming availability to foreign travelers in Canada and Canadians in other countries. "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." Even the way Industry Canada is proposing to divide the spectrum appears to demonstrate that it is looking for more competition in the market. In past practices, the department has licensed mobile spectrum on a tier-two basis where 14 licences would be available, largely on a geographic basis. For this auction, Industry Canada is proposing to license the spectrum on three different geographic levels. "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," reads the consultation paper. Spectrum aggregation limits, or caps, are another tool Industry Canada can use to promote the entry of a new competitor. They limit the amount of spectrum that can be acquired by a single entity, allowing for a more equitable distribution of spectrum among the players. If the spectrum cap were set at a low enough number, this would further facilitate the entry of a new player. Initial comments on the provisions proposed in DGTP-002-007 are due May 25 with the reply comments deadline set for June 27. Report on Wireless will have more on the spectrum auction consultation in the near future.

Spectrum auction framework looks to help increase number of competitors

News | February 26, 2007

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