Industry Canada announces rules for 700 MHz spectrum auction and other measures concerning the wireless sector 


March 2013

telecommunications bulletin

On March 7, 2013, Canada's Minister of Industry announced various measures concerning the Canadian wireless sector. The measures have been announced in advance of the upcoming upcoming 700 MHz spectrum auction and are in keeping with the expressed goal of the Canadian government to increase competition in the wireless sector. The announcement follows the government's amendments made in the summer of 2012 to Canadian telecommunications laws which removed foreign ownership restrictions on telecommunications service providers that hold less than a 10% share of the total Canadian telecommunications market based on revenue. Please see our Telecommunications Bulletin of July 2012 for details.

In this latest announcement, the government has indicated that it will:

  • review and seek stakeholder input on the existing policy on spectrum licence transfer requests and consider rules for the review of arrangements between parties providing for future transfers of spectrum and deemed spectrum license transfers; carrying out this review now is intended to ensure that clear procedures are in place well in advance of the 700 MHz and future spectrum auctions

  • expand and extend the requirement for wireless companies to provide roaming on their networks to competitors whose subscribers may be outside the range of their chosen provider

  • tighten the existing rules concerning cell tower sharing rules, with a view to further reduce tower proliferation across the country without affecting national wireless coverage for subscribers

The government also announced the rules and format for the upcoming 700 MHz auction. Applications are due on June 11, 2013 and the auction is scheduled to begin on November 19, 2013. The total amount of the opening bids and minimum amount to be accepted for all of the spectrum is just under $900 million dollars. As previously proposed by Industry Canada, the auction will use the combinatorial clock (CCA) auction format. Most of the previous spectrum auctions in Canada have used the Simultaneous Multiple Round Ascending (SMRA) auction format which is still popular in other countries. The CCA format involves the bidding on a package of licences on an all-or-nothing basis, rather than bidding for individual licences. Package bids eliminate the risk that a bidder wins some but not all of the licences needed for its particular business case and also be left with stranded licences that cannot be used as effectively. In addition, as previously announced in 2012, the government will apply caps in the auction, which will enable four or more service providers in each region to obtain access to spectrum.

Finally, the government also released its Commercial Mobile Spectrum Outlook study. The purpose of the study is to provide stakeholders with an overview of the government's overall approach and planned activities to ensure appropriate spectrum resources are available to meet the demand for commercial mobile services over the next five years and ensure that Canadians have access to next generation services and technologies. After the upcoming 700 MHz auction and the 2500 MHz auction in 2014, 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 additional spectrum that could be used for commercial wireless services over the next five years and has indicated that it will hold consultations with industry stakeholders before making any specific decisions with respect to the additional spectrum.

by Carl De Vuono

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013