New entrants should get ‘all or substantially all’ of 700 MHz spectrum: Globalive

New wireless entrants should be given “all or substantially all” of the newly available, 700 MHz prime spectrum to ensure their continued ability to compete, Globalive Wireless Management Corp. says. The proposal—which is sure to be opposed by the big players—has been put to Industry Canada for its consultation on the yet-to-be-auctioned 700 MHz spectrum band. Incumbents, on the other hand, say they need the limited but valuable resource to deploy fourth-generation LTE wireless services. The suggestions come in the many comments put to Industry Canada as it looks for common ground in the middle of an industry wrangle over a policy for the 700 MHz auction. “While the 700 MHz Band is likely to be attractive to all carriers, it is uniquely valuable to new entrants, who will need more spectrum to continue to offer the range of services they continue to provide as demand for mobile data grows,” Globalive wrote the department as part of its consultation on a policy framework the band. The call for comments for the consultation closed Monday. The band is considered prime spectral real estate because its frequencies have excellent propagation characteristics, translating into better reception and larger coverage areas. While there are many issues at play, including how the band will be divided and the timing of the auction, no point has drawn as much debate as the question of which companies will be allowed to buy up the spectrum. Industry Canada's 2008 advanced wireless services (AWS) auction policy led to increased competition in the wireless market. That auction utilized spectrum “set asides” for new competitors. As a result, Quebecor Media Inc. (QMI), Mobilicity, Public Mobile Inc. and Globalive have successfully launched wireless operations. But in its submission, Globalive said new entrants require access to the 700 MHz band, and to ensure access to the spectrum, suggested that only small players be allowed to bid. “The Department must ensure that through the timing and framework for the upcoming spectrum auctions, new entrants are given access to all or substantially all of the newly available spectrum on reasonable terms,” the company wrote. “The Department should provide that, on a region by region basis, carriers that have access to 800 MHz spectrum (either directly or indirectly as a result of access provided through network sharing arrangements) are not eligible to participate in the auction for the 700 MHz band.” Similarly, Mobilicity has called for a set-aside policy, arguing that spectrum should be reserved to carriers with less than 10 per cent of the total telecommunications market revenue and that are not 800 MHz spectrum holders in their incumbent territories. That would exclude MTS Allstream and SaskTel from bidding for 700 MHz spectrum in Manitoba and Saskatchewan. Mobilicity wrote that it supports spectrum caps to curb the amount of spectrum that can be owned by the incumbents, adding that Bell Canada and Telus Corp. should be considered one entity because they share wireless infrastructure. But incumbents Rogers Communications Inc. and Bell are calling for an open auction. “Set-asides, spectrum caps and auction caps will artificially restrain Rogers, one of Canada's largest, most successful and innovative wireless service providers, from acquiring the spectrum we need to implement mobile broadband services across Canada, and to cope with the unprecedented growth in mobile broadband traffic,” Rogers wrote. Rogers said it is using all of its available mobile spectrum to implement LTE, and will require some 700 MHz spectrum to provide ubiquitous LTE broadband coverage. Rogers also expressed concern over hoarding in the band and recommended that successful bidders be subject to rollout requirements. Bell also said in its submission that it is “quickly using up all of its available spectrum.” In comparison, the company said new entrants' business models, which focus on urban deployment, do not require as much spectrum. Bell said the 700 MHz spectrum is being used in the United States for LTE networks, and that Canada should do the same. “Canada's wireless carriers therefore all require a fair opportunity to bid for 700 MHz spectrum, in an open auction, in order to even have a chance to acquire and take advantage of economies of scale in obtaining the latest mobile devices for use on LTE networks,” the company wrote. Bell added that owning portions of the band would allow the incumbents to offer clients roaming services on LTE networks in the United States. Adrian Foster, a spectrum expert and partner with McLean Foster and Co. in Ottawa, said by phone that it would be difficult for the incumbents to go forward with LTE without access to 700 MHz spectrum. The technology is currently being developed for that band in the U.S., he said. Bell said set-asides would restrict its capability to offer broadband services in rural and remote areas, a position that Telus echoed in its submission. Telus added that it believes set-asides and spectrum caps for the auction are “unnecessary and counterproductive.” A set-aside policy would advantage profitable cable companies like Quebecor and Shaw Communications Inc., Telus said. “At a minimum, the government must tighten up its definition of new entrants to exclude carriers already dominant in other markets, or ironically even in some regional wireless markets,” Telus wrote. But in a report on the 700 MHz band released Monday, technology and strategy consulting firm the Seaboard Group sided with the new entrants, arguing the move would balance the incumbent’s advantages in the marketplace. “Canada's incumbent carriers already have far more spectrum than any wireless carriers on the globe—and this before the next spectrum auction,” the firm wrote. Seaboard recommended that Industry Canada “resist compromise”—precisely what is being suggested by Quebecor. The company told the department that carriers holding 800 MHz spectrum should be limited to acquiring one block in the area where it already operates. Quebecor added that carriers that do not hold 800 MHz spectrum should be limited to acquiring two blocks per area. “QMI's proposal has the advantage of not impeding anyone from acquiring spectrum in the 700 MHz band,” the company wrote, adding that rural Canadians will benefit the most from the proposal. Shaw told the department it also supports spectrum caps, adding that no carrier should be allowed to acquire more than two blocks of spectrum, but that the limit should drop to a single block if the carrier already owns spectrum below the 1 GHz range. Shaw also called for mandated roaming, tower- and site-sharing requirements, citing “delays, refusals and general foot-dragging that some of the new entrants have experienced in their negotiations with wireless incumbents.” Shaw said the situation has contributed to delayed wireless deployments for new entrants. kfournier@thewirereport.ca

New entrants should get ‘all or substantially all’ of 700 MHz spectrum: Globalive

News | March 2, 2011

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