Millimetre wave spectrum set-asides harmful to 5G potential: telcos

The issue of set-asides has resurfaced in replies to a consultation on millimetre wave spectrum (mmWave) for 5G, with telcos suggesting the technology is a new playground in which auction participants of all types are starting from an equal position, therefore making set-asides unnecessary. The remarks were made by BCE Inc. and Telus Corp. in two rounds of comments addressing how the government should handle mmWave spectrum. ISED is consulting on the release of spectrum in the 28 GHz, 37-40 GHz and 64-71 GHz frequencies — used for fixed, fixed-satellite and mobile services currently — which is expected to play a critical role in delivering high bandwidth and low latency connectivity in dense urban areas for uses such as public safety, vehicle communications and the tactile internet. ISED is currently consulting on its spectrum strategy over the next five years. “The 5G mmWave network business opportunity is completely green field and all interested parties are starting from scratch in terms of flexible use mmWave spectrum in Canada, meaning that there are no parties that can be characterised as incumbents,” Telus said in a submission, with the second round posted on ISED’s website last week. Bell echoed those sentiments and others made by Telus, including the suggestion that the country’s mobile operators are “well capitalised, deliver quad plays in their incumbent territory” and have similar balance sheets. Bell added that set-asides would prevent the country from realizing the “full potential” of 5G network technologies by limiting spectrum allocations or having "tight spectrum caps." That’s in part because, some argue, such spectrum will require pairing with other low band spectrum to satisfy coverage requirements. That was a challenge highlighted by a recent report on mmWave prepared for 5G Americas because mmWave is suitable only for use over short distances, making its combination with lower frequency spectrum critical for 5G operation. Lower bands “can be devoted to coverage and control, while higher bands can provide opportunistic access for high data rates,” the report said. For example, Rogers Communications Inc. suggested in its submission that having spectrum aggregation limits and set-asides would limit the advantage of having higher speeds with “contiguous spectrum channels” that would be able to generate 10,000 times more traffic carried on networks. In its own submission, Saskatchewan Telecommunications Holding Corp. (SaskTel) said the spectrum auction should be structured so that it will be utilized by players in the best position to use the spectrum. This cannot be achieved with set-asides, it said, but rather market forces alone. “There is simply no need for the regional providers to continue receiving taxpayer-funded Government subsidies in the name of ‘equitable access’ or ‘pro-competitive measures’ or any other market distorting intervention,” Bell said. The issue of whether or not to have set-asides has consumed a fair share of the discourse leading up to the 600 MHz auction. In this round of submissions for mmWave, that suggestion resurfaced from players including Xplornet Communications Inc., Quebecor Inc.’s Videotron and Cogeco Inc., with Shaw Communications Inc. urging the government to be cognizant of the spectrum holding advantages of the incumbents, which without pro-competitive measures could inhibit sustained competition in the mobile wireless market, it said. If ISED doesn’t make policies that allows carriers other than incumbents to get mmWave spectrum, “Canadian consumers and businesses will not enjoy the full benefits of 5G,” Shaw said in its submission. The Calgary-based company noted that the government should focus on pro-competitive measures, which include band plans that can accommodate competitive players and not just the incumbents. Shaw and Quebecor were among two of the players that analysts suggested would benefit from the government’s proposed 600 MHz set-asides. In the same vein, Cogeco Inc., which doesn’t have a wireless division itself, also suggested the government take pro-competitive policy measures in its own submissions. Those suggestions include similarly designing band plans to accommodate new operators, as well as establishing said set-asides. It added that new operators are most likely to “test innovative applications, new technologies and ground-breaking business plans.” “The national incumbent already hold significant swathes of the mobile wireless spectrum that ISED has made available and, therefore, have a significant head-start in the development of heterogeneous 5G networks.” Cogeco spokeswoman Nancy Bouffard said in an email that the company “views wireless as an interesting market, under the right business conditions,” in reply to a question about whether it is interested in becoming a player in the market. “As such, we are continuously analyzing opportunities.” The company’s CEO Louis Audet previously said his company had no significant plans to integrate 5G into its services. For Rogers, the government should focus its efforts on competition generally, especially the three national carriers, suggesting regional carriers “no longer require special treatment.” It pointed to the practice of spectrum combining employed by Bell and Telus since 2008, which allows them to “avoid capital costs and improve speeds” and limits its ability to “match or surpass” these advantages without additional spectrum. “Despite this clear and persistent pattern, the affiliated and associated entities rules and the rules prohibiting collusion continue to permit their independent bidding,” Rogers said, adding such coordination between bidders should be prevented while the “relative strength of the vertically-integrated regional competitors should be recognized, so that all bidders are treated the same.” Rogers also said set-aside proposals should be disregarded. It argues that the set-asides will just end up going to a well-capitalized network operator or the spectrum will be underdeployed. Looking forward, Telus said the government must move away from “picking winners and losers” and “start to rely on market forces to allow and ensure the efficient assignment of spectrum so that the companies that will truly lead Canada into the 5G digital future are no longer heavily penalised at auction.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Bryson Masse at bmasse@thewirereport.ca

Millimetre wave spectrum set-asides harmful to 5G potential: telcos

News | November 27, 2017

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