Telecom Policy Review Panel recommends shifting of spectrum management

One of the major recommendations from the Telecommunications Policy Re-view Panel is to move spectrum management operations from Industry Canada to the CRTC in recognition of the convergence between wireline and wireless communications. While policy development would remain with the department, the licensing of spectrum through auctions or other competitive licensing processes would shift to the telecom regulator. According to the nearly 400-page report, which was released on March 22, the move would lead to a more consistent and unified regulatory approach. The panel urges the Canadian government to adopt this type of approach to spectrum management because it has been adopted in other Organisation for Economic Co-operation and Development (OECD) countries. "This would increase the transparency of spectrum regulation and provide the CRTC with a better overview and insights into wireless developments. It would also harmonize the policies and enhance the considerable regulatory expertise located in two regulatory institutions that currently function quite separately," writes the panel. Peter Barnes, president and CEO of the Canadian Wireless Telecommunications Association (CWTA), says current spectrum management activities are working well and doesn’t see a need for change. "We certainly weren’t pushing for a move over to the CRTC .…We’re more of the ‘if it ain’t broke, don’t fix it routine,’" he tells Report on Wireless. "There may be other governance reasons that the government has to consider, but from our perspective as customers of the spectrum management group we think they’re doing a good job." The CWTA chief executive is unsure whether adopting an approach to spectrum management consistent with that of other OECD countries is the right thing to do. "To me the test of spectrum management and policy is: is there sufficient spectrum to satisfy the needs of customers? And the answer to that today is yes," Barnes says. "If you have a supply chain for spectrum management like they do in the UK, you’ll get UK results because it’s a different country, different demographics and a different competitive reality," he adds. Given the current political environment it’s unclear – and, some would suggest, unlikely – that there will be any major changes to the telecommunications policy and regulatory framework in the near term. But if spectrum management were to shift from the department to the CRTC, Barnes suggests the government would have to maintain a level of continuity given the experience that exists within the spectrum management organization of Industry Canada. " the kind of expertise that you have over at Industry Canada, you’d presumably want those people and that corporate memory to move over to the CRTC," Barnes says. "You really have to move the people en masse because there is just a richness of experience and corporate memory there that we’d like to see the resources that exist at Industry Canada continue to be associated with spectrum management." Review of spectrum fee recommended by panelThe panel also recommended that Industry Canada during its spectrum policy framework review take a look at "both current licence fees to correct fee imbalances that many exist among service providers and the application of market-based pricing approaches for non-auctioned licences." This recommendation could have likely come from panel member André Tremblay, former president and CEO of Microcell Telecommunications Inc. Barnes is happy to see this element of spectrum management get inserted into the panel’s comprehensive and detailed report, as the industry has long fought the government on what it considers an exorbitant level of spectrum fees. An analysis the CWTA conducted a couple of years ago revealed that the national cellular players were using approximately .5% of the commercially available spectrum, yet were paying 50% of Industry Canada’s spectrum revenue. "Clearly, there was an imbalance," he says, noting that if the numbers were re-ran today they wouldn’t likely be too far off the previous assessment. But Barnes suggests the issue of fees might be better addressed with a single regulatory authority, singling out the effects of having fees imposed by both Industry Canada and the CRTC without any mutual recognition of the impact on market participants. "That seems to have resonated and maybe that’s part of the thought of the panel to bring spectrum management under one roof," he says. "We didn’t think you needed to ," Barnes adds. "You needed to take cognizance of it and if the CRTC was thinking of imposing a fee that it should take into consideration fees that Industry Canada has and vice-versa….But what we’re looking for is to make sure that people take into account the kinds of dollars that are being asked of us and consider that in making up their mind as to what sort of reasonable price to pay." At a high level, though, Barnes urges the government to let market forces rule and not let regulation get in the way of what is already a competitive industry. "I think as soon as you start having rules such as ‘it will be competitive except for…’ then you tend to distort . The greatest possible reliance on market forces is what’s going to be good for customers and eventually the industry," he says.

Telecom Policy Review Panel recommends shifting of spectrum management

News | April 6, 2006

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