OTTAWA, ONTARIO -- (Marketwire) -- 03/07/13 -- The Honourable Christian Paradis, Minister of Industry, today announced new measures that the Government is taking to increase competition in the wireless sector, providing Canadians with more choices and access to the latest technology at better prices.
"Canadian families work hard for their money, and our government wants them to keep more of it," said Minister Paradis. "Through better use of existing cellphone towers and by taking action to promote at least four wireless providers in every region of the country, our government is making it possible for all Canadians to have access to world-class wireless service they can afford, no matter where they live."
Through increased competition in every region, the Government is working to provide more choices at better prices to Canadian consumers. This will be achieved by:
-- reviewing the policy on spectrum licence transfer requests with the objective of promoting a competitive environment;-- expanding and extending the requirement for companies to provide roaming to competitors, thereby increasing competition;-- strengthening cell tower sharing rules to further reduce proliferation and deliver better services;-- ensuring at least four providers in every region can acquire spectrum in the upcoming 700 MHz spectrum auction, to start on November 19, 2013, as part of the Licensing Framework for this spectrum.
"Wireless services are changing our families, our work, and our economy," said Minister Paradis. "Our government's priority is to provide greater wireless coverage at better rates for consumers."
The Government also released the Commercial Mobile Spectrum Outlook study, ahead of the 700 and 2500 MHz spectrum auctions. This study outlines the Government's plan to make spectrum available to meet the consumer demand of a growing digital economy and ensure that Canadians have access to next generation services and technologies. Canadians are world leaders in Internet use, and the government is putting a plan in place to ensure companies can continue to grow and meet the needs of Canadians in all parts of the country.
The following backgrounders on each measure announced today are available:
-- Reviewing the Policy on Spectrum Licence Transfer Requests (http://www.ic.gc.ca/eic/site/064.nsf/eng/07293.html)-- Licensing Framework for Mobile Broadband Services (MBS)-700 MHz Band (http://www.ic.gc.ca/eic/site/064.nsf/eng/07292.html)-- Expanded and Extended Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing (http://www.ic.gc.ca/eic/site/064.nsf/eng/07295.html)-- Commercial Mobile Spectrum Outlook (http://www.ic.gc.ca/eic/site/064.nsf/eng/07294.html)
For more detailed information on each measure, please consult the following documents on Industry Canada's website:
-- Consultation on Considerations Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10597.html)-- Licensing Framework for Mobile Broadband Services (MBS)-700 MHz Band (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10572.html)-- Revised Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10546.html)-- Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09081.html)-- Industry Canada's Arbitration Rules and Procedures (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09079.html)-- Commercial Mobile Spectrum Outlook (http://www.ic.gc.ca/eic/site/smt- gst.nsf/eng/sf09444.html)
Reviewing the Policy on Spectrum Licence Transfer Requests
The Government of Canada is taking steps to promote at least four wireless competitors in each region and is facilitating access to spectrum for these providers.
In addition to the Government's policies for spectrum auctions, the approach to spectrum licence transfer requests is critical to the effective management of the concentration of spectrum in Canada. Currently, incumbent wireless providers hold licences for 85 percent of spectrum in the country.
Every licence transfer requires the approval of Industry Canada. To ensure that Canadian consumers continue to have choice in providers, the Government will seek stakeholder input on the criteria and process used to review spectrum licence transfer requests. This process will also outline the approach to agreements related to licence transfers.
In this consultation, Industry Canada is seeking comments on the following:
-- the criteria and considerations related to spectrum licence transfer requests;-- a proposal that companies entering into agreements (such as option agreements) relating to a potential future spectrum licence transfer will be required to notify Industry Canada, and that the Department will conduct a preliminary assessment of the licence transfer at that time;-- whether there is a threshold in the form of concentration or a measure of MHz-pop that Industry Canada should apply in deciding whether to conduct a detailed review, or whether there is some other type of threshold, screen or cap that should be used to decide if a detailed review is required;-- the treatment of deemed spectrum licence transfers as actual transfers, divisions or subordinate licensing arrangements;-- the current review model and whether it should be confidential or such that Industry Canada would publicize a spectrum licence transfer request and provide an opportunity for third-party input;-- any other suggested changes to the applicable conditions of licence related to spectrum licence transfers;-- the proposed timelines for reviewing spectrum licence transfer requests; and-- the proposed condition of licence concerning prospective transfers, including the criteria, considerations and timelines set out above.
The consultation will begin on March 7, 2013, with initial comments due on April 3, 2013. Interested parties will then have the opportunity to reply to comments from other stakeholders until May 3, 2013.
Decisions in response to this consultation will be made well in advance of the 700 MHz auction, which is scheduled to begin on November 19, 2013.
The interests of Canadians are best served by a competitive telecommunications market. Competition stimulates innovation and investment by the industry, which can lead to lower prices, better services and more choice for consumers and business users.
Industry Canada has reinforced its policy objectives with regards to spectrum and related policies through decisions including the Policy Framework for the Auction for Spectrum Licences for Advanced Wireless Services and Other Spectrum in the 2 GHz Range and the Policy and Technical Framework: Mobile Broadband Services (MBS)-700 MHz Band, Broadband Radio Service (BRS)-2500 MHz Band (SMSE-002-12). In the most recent of these, the policy objectives were as follows:
-- sustained competition in the wireless telecommunications services market so that consumers and businesses benefit from competitive pricing and choice in service offerings;-- robust investment and innovation by wireless telecommunications carriers so that Canadians benefit from world-class networks and the latest technologies; and-- availability of these benefits to Canadians across the country, including those in rural areas, in a timely fashion.
To read the full consultation paper on spectrum licence transfer requests, please see Consultation on Considerations Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10597.html).
Licensing Framework for Mobile Broadband Services (MBS)-700 MHz Band
In 2008, the Government of Canada took action to facilitate the entry of new competitors in the wireless sector by setting aside spectrum for new entrants and introducing roaming and tower-sharing policies. Since then, new service providers have emerged, and we have seen wireless prices drop by more than 10 percent.
Last year, the Government took further steps to promote competition by introducing measures to encourage robust investment and promote the timely availability of advanced services for Canadians, including those in rural areas. This included removing foreign investment restrictions, a key barrier to capital for smaller wireless providers, and announcing the auction of key 700 and 2500 MHz spectrum in a manner that would promote the sustainability of at least four competitors in every region.
The 700 MHz auction is scheduled to begin on November 19, 2013, and will use the combinatorial clock auction format. This format uses package bids, eliminating the risk that bidders win some but not all of the licences needed for their business case. Bidders can bid on the entire package of licences that they want, on an all-or-nothing basis, rather than trying to bid on a collection of individual licences. Applications are due on June 11, 2013.
The upcoming auction will provide critical additional spectrum for wireless providers in the near term. As announced in 2012, the Government will apply caps in the auctions, enabling four or more service providers in each region to obtain access to spectrum. Auction rules include rural deployment requirements, for carriers with access to two blocks of paired spectrum, to ensure that rural Canadians may benefit from the timely availability of advanced wireless services.
In support of the stated policy objectives of competition, investment and timely deployment to rural areas, carriers intending to form associations to share 700 MHz spectrum may be permitted to participate in the 700 MHz auction separately if they disclose sufficient information regarding their association. These carriers may also request that the spectrum cap apply individually, but they will be required to demonstrate to Industry Canada's satisfaction that they are separately and actively providing services in the region.
Approximately six weeks prior to the auction, qualified bidders will be provided with access to the winner and price-determination tool for the allocation stage, on a website hosted by Industry Canada. One information session and up to three mock auctions will be conducted prior to the auction.
For more on the rules and format of the 700 MHz spectrum auction, please read the Licensing Framework for Mobile Broadband Services (MBS)-700 MHz Band (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10572.html).
Expanded and Extended Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing
In 2008, as part of the government's policies to encourage new competition in the wireless sector, Industry Canada required all carriers to offer roaming on their networks. These roaming policies included some provisions that were only available to new entrant service carriers for five years and were to begin expiring in 2013. In order to support competition and continued access to roaming for consumers, Industry Canada is taking the following measures to improve these roaming policies:
-- extending roaming provisions indefinitely and expanding them to all carriers; and-- reducing the timelines to trigger arbitration and the arbitration timelines applicable to carriers negotiating roaming agreements.
Pursuant to Industry Canada's policy, roaming rates are determined through negotiations between licensees, but conditions of licence provide for mandatory arbitration to set fair market rates if the parties cannot agree. The Canadian Radio-television and Telecommunications Commission has the authority under the Telecommunications Act to examine matters regarding roaming and tower-sharing rates and terms.
In 2008, Industry Canada also mandated antenna tower and site sharing. This policy was introduced to reduce the proliferation of antenna towers and to facilitate the entry of new competition into the wireless market. In order to further advance these objectives, Industry Canada is making changes to improve the current tower-sharing policies, including:
-- strengthening accountability of carriers to increase the sharing of towers and reduce negotiation timelines;-- improving monitoring of the effectiveness of the policy by requiring regular detailed reporting to Industry Canada on the status of negotiations and towers shared; and-- reducing the timelines to trigger and complete arbitration.
Given the increased number of new agreements involving new entrants, Industry Canada notes that tower sharing is improving. However, if such tower-sharing improvements do not continue, Industry Canada will take further action.
For more on these improvements to mandated roaming and antenna tower sharing, please see the following documents:
-- Revised Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10546.html)-- Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09081.html)-- Industry Canada's Arbitration Rules and Procedures (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09079.html)
Commercial Mobile Spectrum Outlook
As Canadians increasingly embrace smartphones and tablets, the Government of Canada is showing leadership by ensuring that our wireless industry has access to the spectrum it needs to remain competitive and deliver services to Canadians. Accordingly, the Government is setting out a plan to make spectrum available in the coming years, as well as setting the date and approach to the upcoming 700 MHz auction.
Spectrum is a public asset that should be used to improve the services and technology available to Canadian consumers and to support the growth of our economy. By drafting a plan that puts Canadian consumers first, the Government will enable Canadian companies to remain competitive and to continue providing Canadians access to the latest and greatest technologies. It is important that Canadians have a road map concerning spectrum availability in the medium term.
The Commercial Mobile Spectrum Outlook provides an overview of the Government's approach to making spectrum available to meet the future demand for commercial mobile services.
After the upcoming 700 MHz auction on November 19, 2013, and the 2500 MHz auction the following year, Canada will be more than two thirds of the way towards its target of allocating 750 MHz of commercial mobile spectrum by the end of 2017. The Government has identified more spectrum that could be used for commercial wireless services over the next five years. We will work with all Canadians to use spectrum to increase coverage, promote competition and ensure that the latest technologies are available.
The Government will hold separate and comprehensive consultations with industry stakeholders before making any specific decisions with respect to these bands. The timing of specific decisions will be decided in concert with international developments.
Beyond 2017, mobile data traffic will undoubtedly continue to grow, likely resulting in additional spectrum requirements. It is conceivable that at least 1000 MHz of mobile broadband spectrum will be required by the start of the next decade. As a result, the Government will continue to monitor developments, both in Canada and abroad, and will update this plan accordingly.
For more information, please see the Commercial Mobile Spectrum Outlook (http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09444.html).
Director of Communications
Office of the Honourable Christian Paradis
Minister of Industry