Lack of competition in rural Canada warrants new approach to spectrum licensing

Industry Canada should undertake a new approach to licensing valuable mobile wireless spectrum in rural and remote regions of the country. These comments come from organizations with vested interests in better services for these regions and are directed to the government's spectrum auction consultation.A common thread in their submissions is the lack of competition for wireless services in these areas, taken as proof that the department should abandon its current proposed model. For instance, Barrett Xplore Inc., a satellite and wireless broadband service provider, notes in its comments that the rural market's characteristics should give rise to a new spectrum auction approach."A thoughtful and differentiated approach to awarding spectrum has great potential to encourage new and sustainable competitive entry as well as accelerating deployment of service over a much shorter period of time than generally anticipated," reads Woodstock NB-based Barrett's submission.The current approach, according to Barrett, fails rural and remote regions in a number of ways, noting that the licence area definitions include both urban and rural markets, favouring larger companies with deeper pockets."In an auction process, rural broadband providers are severely discouraged from, and disadvantaged in bidding for these licences," the company writes. It points to the Tier 4 Calgary service area, which covers 20,000 square kilometers and encompasses both dense urban and rural areas."Alternative rural broadband providers cannot compete with the ILECs and other large service providers in an auction process, where bid values would focus on the core urban portions of licences," Barrett notes.The company suggests that Industry Canada create new levels of licences within the Tier 4 serving territory. Within the broader Calgary licence, for example, three distinct licences would be created, each with a different household density ratio - up to 25 homes per square kilometre, 25 to 250 homes per square kilometre and 250 to 2,500 homes per square kilometre.Similarly, the Van Horne Institute and WiTec Alberta note that as a result of a one-day forum on the auction, some participants suggest the government should update its treatment of suburban and exurban communities as service areas.The two organizations suggest in their comments that the department "consider defining its service areas in a more precise manner to account for communities located on the fringe of major urban areas." The two groups add that this might make it more affordable for potential new entrants to bid on spectrum in these areas without having to resort to set asides.Meanwhile, the Canadian Wireless Telecommunications Association (CWTA) says there are ways for companies to enter the market, even in areas where there is a lower population density. The CWTA notes that new entrants wanting to break into the wireless market in underserved areas can already do so under the provisions of the New Party Cellular Policy (RP-019).Industry's consultation process got underway on February 16. Report on Wireless will continue to follow the Advanced Wireless Services spectrum auction comments and will in the next few days report on the spectrum requirements for next-generation services.

Lack of competition in rural Canada warrants new approach to spectrum licensing

News | 05/31/2007 8:09 pm EDT

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