3.5 GHz auction will mean a level playing field for 5G: ISED

MISSISSAUGA, Ont. — Innovation Canada will give existing holders of 3.5 GHz spectrum an opportunity to apply for flexible use of the spectrum based on their proportional holdings of the frequencies, it said in a new document outlining how the band, said to be crucial for 5G networks, will be handled come next year’s auction. That means existing holders of the 3.5 GHz spectrum will be able to apply to keep some amount of the band depending on how much already hold, while the rest goes up for auction. As such, those holding 75 MHz or more of the spectrum will be eligible for 60 MHz for flexible use, those who have 50 MHz can apply for the same amount, and the rest will be eligible for 20 MHz. The licensees must continue to meet their conditions of licence. The department noted in its decision, released Wednesday afternoon after the Canadian Telecom Summit in Toronto, that this revised way of taking back and allocating spectrum will mean current large holders will get to retain more of their licenses; though it also means the larger the holder, the more will also be taken back. It launched the 3.5 GHz consultation last June. Current 3.5 GHz spectrum licenses are issued for fixed wireless use, while new allocations will be issued on a flexible -- either fixed wireless or mobile use -- basis, which is ripe for 5G deployment. “The revised approach will ensure that a sufficient amount of spectrum is available for service providers in rural areas to maintain current service,” ISED said in the decision document. “Canadians will benefit not only from continued fixed wireless services in rural areas but also from the competitive deployment of 5G mobile services in all areas of the country.” ISED proposed two options in its original consultation document. The first is that current licencees would be issued flexible use licenses for one-third of their holdings, meaning the rest would be clawed back for the auction. The second option would have allocated a fixed amount of flexible use per how much was held, so those who held 50 MHz or more would be licenced for the same amount, and the rest of the field would be eligible for 20 MHz. The decision borrows from the latter option. The first approach was rejected by BCE Inc. and Rogers Communications Inc., the largest 3.5 GHz holders through their Inukshuk partnership, and Xplornet Inc., the second-largest holder, which said it would harm their ability to continue to deliver fixed-wireless services in rural areas. Xplornet originally noted that the telecom would lose between 25 and 66 per cent of its current spectrum to the auction if the two-thirds clawback was approved. CJ Prudham, Xplornet’s general counsel, told the House industry committee a day earlier that “if either of the options proposed in the consultation is implemented, rural Canadians will be disconnected… rural broadband connectivity would be set back a decade.” She said either option would “probably” affect over 50 per cent of its customers. Bell and Rogers argued that the maximum amount that should be considered for clawback is one-third of currently held spectrum. The problem with some of the telecoms’ proposals was that not enough spectrum would be available for other players, which ISED said would not serve its mandate to allow for functioning competition. When reached for comment, Bell spokesman Nathan Gibson said in an emailed statement: “We’re studying the decisions in detail and look forward to participating in the 3500 MHz auction to enable our 5G rollout plan.” The department is contemplating have set-asides and a spectrum cap for the auction. ISED argues that the new approach will level the playing field when 5G networks are deployed. “Allowing current licensees to retain all or a large portion of their current holdings, given the new allocation in the band, would result in some licensees receiving competitive advantage in the provision of 5G services and would limit ISED's ability to support the policy objective of sustained competition that will provide Canadian consumers and businesses with greater choice,” the decision read. “Moreover, by limiting the amount of spectrum available for a subsequent auction process, potential new licensees would be constrained in their ability to use this band for the deployment of 5G services.” ISED also proposed that existing licence holders be protected from having to transition for a minimum period ranging from six months to three years, depending on the areas they are currently serving. Rural areas would be protected for the longest time. The department also made two other decisions on the 26 to 28 GHz band and 38 GHz, or millimetre wave, while also giving an update on the 3.8 GHz band. For the former, the government will adopt a flexible use model, similar to the 3.5 GHz decision. ISED said it will be consulting further on the 3.8 GHz spectrum, which is slated to be auctioned off in 2022. At the Telecom Summit, ISED Minister Navdeep Bains announced that over 7 gigahertz of millimetre wave spectrum will available for licence-exempt use this year and another 4.85 gigahertz for licenced use by 2021. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and Vicente Biancardi da Camara at vcamara@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

3.5 GHz auction will mean a level playing field for 5G: ISED

Broadcast | June 5, 2019

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3.5 GHz auction will mean a level playing field for 5G: ISED

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