2500 MHz auction expected in 2011; band to accommodate WiMax, LTE

Industry Canada is expected to hold a spectrum auction for the 2500-2690 MHz band as the department opens it up to accommodate broadband wireless technologies such as WiMax and LTE. “Depending on how things turn out and how it maps for the spectrum that is cleared, they seem to be indicating that it would be auctioned,” Adrian Foster, a partner with McLean Foster and Co. in Ottawa, told The Wire Report. Foster said an auction won't take place this year. The department is still consulting and spectrum licences in the band expire in 2011. “There won’t be an auction taking place in 2010 and it’s not likely the auction is going to take place prior to the expiration of the licences,” he said. Foster has been a proponent of auction-based spectrum assignment. The 2500-2690 MHz band was licensed to SaskTel and Craig Wireless in 2001. Those licences expire on March 31, 2011. Earlier this year, Inukshuk Wireless, a joint venture between Bell Canada and Rogers Communications, acquired spectrum in the 2500-2690 MHz band at a cost of $80 million from Craig Wireless to expand its wireless services. As the 2500-2690 MHz band is opened up to more wireless services, including broadband, incumbents with licences in the band can keep two thirds of their spectrum under new, expanded licences, if they return one other third to the department. Eamon Hoey, a senior partner with Hoey Associates in Toronto, said Industry Canada should consider a spectrum cap if it decides to auction off the 2500-2690 MHz band. “They will want to hoard as much spectrum as they can because the hoarding of spectrum has become a competitive advantage,” Hoey said. “It’s become a way in which you deny your competitors access to the market.” A spokesperson for the Inukshuk partnership was not available for comment. The 2500-2690 MHz band is now licensed for three purposes: site-specific licences for school divisions in Manitoba for the carriage of distance education and Instructional TV (ITV); site-specific licences for the provision of Internet access in Manitoba; and spectrum licences for the provision of a range of fixed local telecommunications distribution services across Canada, except in Manitoba. According Industry Canada’s notice of consultation, the 2500-2690 MHz band was globally designated for International Mobile Telecommunications (IMT) standards—supporting 3G and 4G wireless technologies—during the World Radiocommunications Conference in 2000. The department has asked for comments on how it should proceed to meet the international guidelines and move to broadband radio service licenses, opening up the band to two-way systems that can provide high-speed and high-capacity broadband service such as wireless Internet access, voice-over-IP, high-speed data transfers, and video-on-demand. The departmental notice says parties now using the band can either make the transition to broadband radio services technology or stick to their current use of the band with protection from interference. The current spectrum is held under multipoint distribution system and multipoint communications system licences, which Foster said are primarily used for broadcasting. “There was hope that the service, whether it was MCS or MDS , which is broadcasting, would be very popular,” Foster said. “Well, it turned out to be less than popular.” Jim Johannsson, a spokesman for Telus Corp., told The Wire Report that the company intends to submit comments as part of the public consultation but that it is too early to provide details. The deadline for comments is Aug. 11, 2010. “This particular frequency band is harmonized on a global basis for mobile service, which makes it good for international roaming,” Johannsson said. Hoey said that the 2500 MHz band’s high frequency presents some technical limitations for mobile wireless use. “Because it’s at the upper end, it’s not as good as the 2300 and it’s certainly not as good as 700, 600 and 850 MHz,” Hoey said. “The lower you are in the frequency band the better the propagation.” Iain Grant, a Montreal-based communications industry analyst at the SeaBoard Group, said that lower frequencies travel through obstacles, such as buildings, using less power and fewer antennas. He said the 700 MHz band, which is expected to be freed up when over-the-air analogue television signals transition to digital next year, will be the big prize for mobile carriers. “Increasingly, in other parts of the world, we’re releasing that spectrum to the carriers for wireless communications purposes,” Grant told The Wire Report. “That’s the gold rush.” At the 2010 Canadian Telecom Summit Robert Dépatie, the CEO of Videotron Ltd., advocated for a spectrum cap on the 700 MHz band. He said a cap would be the only way to ensure enough competition in the market by allowing new entrants, who often have less capital than the incumbents, to get a piece of the spectrum pie. Wireless incumbents, such as Rogers and Telus, however, argued that they will need all the wireless spectrum they can get to meet increasing demand for wireless data services. Industry Canada has set March 23, 2011, as the transition deadline to move the 2500-2690 MHz band to broadband radio service. jmigneault@thewirereport.ca

2500 MHz auction expected in 2011; band to accommodate WiMax, LTE

News | June 16, 2010

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