Delaying auction decision could have lasting effect

The federal government's new minister of Industry Canada, Jim Prentice, will have some tough decisions to make during his tenure and those decisions will have a lasting impact on the Canadian communications landscape.Perhaps one of the more important decisions to be made in the near term is setting the rules for the upcoming auction of valuable mobile spectrum. There has been a lot of talk that an announcement on the rules will be delayed while Prentice and his staff get up to speed on all the issues in play. He has likely already taken calls from both proponents of an open auction and supporters of a set-aside for new entrants, each side offering to help him understand the implications of going one way or another.As a property rights lawyer and the former co-chair of the Indian Specific Claims Commission of Canada, Prentice is a noted pragmatist. This could mean that he will take the time required to understand all of the issues regarding the spectrum auction. However, the longer Prentice waits to make a decision, the more difficult it will undoubtedly be for a new entrant to succeed in the market because there will be fewer untapped potential mobile subscribers - less virgin territory, so to speak - to grab.But there's more at play than just trying to set the rules for this all-important spectrum auction: the Canadian government has to make sure that it doesn't fall too far behind in dealing with other critical spectrum resources such as the 700 MHz band. The Federal Communications Commission (FCC) recently called for comments on the procedures it plans to use in its auction of that band, which is scheduled to start on January 18, 2008. US wireless carriers will have this spectrum in their hands about one year before the elimination of analog TV in this band, allowing them to make the necessary investments to prepare for network rollouts.In Canada, the government has set August 31, 2011 for the shut-off date for analog TV in the 700 MHz band. Assuming that Canada wants to follow the FCC's lead, an auction in the fall of 2010 would be required. That, in turn, means that Industry Canada will have to kick off a 700 MHz auction consultation process around April 2009. By the time the department decides on the rules for the AWS spectrum auction, it might have about 18 months to go through a consultation process, set the rules and start the 700 MHz auction.As well, the FCC recently ruled that automatic roaming for mobile services has to be provided on a just, reasonable and non-discriminatory basis. This decision will almost certainly have an impact on how Industry Canada regulates wireless carriers here, and it's likely conversations on this matter have already taken place. Does that mean the AWS decision will be delayed because the new Industry minister will want to explore the implication of mandated roaming in Canada? At this point, it's unclear.But all of this could be moot if it turns out that the governing Conservative Party of Canada has already made up its mind. A decision on the AWS spectrum auction delivered by the end of next month will give all participants enough time to arrange financing and develop bidding strategies for an auction in early 2008.Report on Wireless will continue to monitor the mandated roaming issue in Canada and will report back on future developments.

Delaying auction decision could have lasting effect

News | August 27, 2007

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us