Hold 700 MHz, 2500 MHz spectrum auctions together, Quebecor says

OTTAWA--Industry Canada should auction off the 700 MHz and 2500 MHz wireless spectrum bands together to let interested companies develop broader business plans, Quebecor Media Inc. says. “If you’re sitting down at a table, and you’re planning your affairs, and you’re looking at your inputs, your costs, and your strategy, you want to be able to make these trade-off decisions,” Dennis Béland, Quebecor’s senior director of regulatory affairs for telecom, said in an interview. “Those sorts of decisions are most rationally made by having all the information in front of you at one time.” Observers of the coming 2500 MHz and 700 MHz spectrum auctions have expected that they will be held separately, in 2011 and 2012, respectively. Analog television channels 52 to 69 currently use the 700 MHz band. But digital broadcasting is more efficient, and when Canada’s conventional over-the-air broadcasters make the transition from analogue to digital signals—expected by the CRTC’s deadline of Aug. 31, 2011—about 60 MHz of spectrum bandwidth will be opened up for mobile applications. The 2500 MHz band was originally awarded to Look Communications and Inukshuk Internet for broadcasting distribution and fixed and portable applications. That band will be reallocated in an auction, and will also free up about 60 MHz of spectrum for mobile applications. Quebecor argues for auctioning off the bands simultaneously in a submission to the Industry Department’s consultation on the digital economy. The company said that international wireless industry group 3GPP, which develops telecom standards, has identified the bands for fourth-generation, long-term evolution (LTE) mobile technology. Adrian Foster, a spectrum expert and partner with McLean Foster and Co. in Ottawa, told The Wire Report that he agrees that mobile spectrum should be made available as soon as possible, but that auctioning the bands simultaneously could be complicated. “You are likely to have two separate auctions and conducting them simultaneously is probably asking for trouble,” Foster said. He said the 700 MHz band could provide national and regional licences for broadband wireless services while Industry Canada could licence the 2500 MHz band on a more local basis. It would be difficult to combine both bands if such geographic differences were put into place. “It just raises a whole bunch of complications about auction design,” Foster said. But Béland said he does not believe Industry Canada will treat the bands differently. “I don’t see a particular rationale why one would be licensed under a different geographic basis from the other,” he said. “Everyone knows these bands are going to LTE, so why you would treat them differently on that basis is something that would be new to me.” He added that geographic issues could be worked out in the consultation process prior to the auction. Quebecor added that auctioning both bands simultaneously would make it more difficult for wireless incumbents to monopolize the spectrum auction. “It’s not a secret that Quebecor believes that the incumbents have an incentive to try to corner the market on spectrum, to try to keep spectrum out of the hands of new entrants such as ourselves,” Béland said. He added that it is easier to corner the market by buying into one band at a time. Quebecor is also advocating for spectrum caps to limit the amount of spectrum that one company can buy up during an auction. “What we’re saying is the three incumbents in Canada are quite generously provisioned in spectrum relative to their international peers and have an incentive to keep spectrum away from these emerging new entrants who are in competition with them,” Béland said. During the 2010 Canadian Telecom Summit conference in Toronto in June, Robert Dépatie, president and CEO of Videotron Ltd., a subsidiary of Quebecor, made the same arguments. Executives with Rogers Communications Inc. and Telus Corp. said at the time that the accusations that they are hoarding spectrum are untrue. “This hoarding argument is just nonsense,” Ken Engelhart, Rogers’ senior vice-president of regulatory affairs told The Wire Report. “The FCC has said that carriers are going to need 500 MHz more spectrum because of growing broadband demands.” Michael Hennessy, Telus' senior vice-president of regulatory affairs, similarly said in a previous interview in June that carriers commonly sit on spectrum for two or three years before developing a strategy for its use. “The only hoarders of spectrum are possibly the government,” Hennessy said. The deployment of LTE wireless technology on the 700 MHz band has started in the U.S., and some European countries are using the technology on the 2600 MHz band. The CBC has said it cannot meet the Aug. 31, 2011 digital transition deadline for all of its stations, and delays in the transition to digital broadcasting could cause delays in the reallocation of the 700 MHz band. But Wayne Stacey, a spectrum expert at Wayne A. Stacey & Associates in Ottawa, told The Wire Report that the bulk of the CBC’s analog channels are below channel 52 and do not fall under the 700 MHz spectrum band. “There aren’t a whole ton of stations, in the grand scheme of things, that are in that spectrum above channel 52,” Stacey said. “In some of those places, the CBC may prefer to shut off service altogether and deliver through cable and satellite.” Béland said he hopes Canada doesn’t fall too far behind its southern neighbour in the move to next-generation wireless technologies on the 700 MHz and 2500 MHz bands. “It’s a reality that it’s difficult for a country like Canada to get ahead of the United States,” he said. “We’re inevitably going to be a follower, to a certain extent, but I think the view of ourselves and probably most people in industry is, ‘Let’s at least be a fast follower.’” jmigneault@thewirereport.ca

Hold 700 MHz, 2500 MHz spectrum auctions together, Quebecor says

News | August 13, 2010

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