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[d@DCC] [Fwd: Government Opts for More Competition in the Wireless Sector]

From: Russell McOrmond <russell _-at-_>
To: "General Copyright Discussions (questions, organizing, etc)" <discuss (at)>
Date: Wed, 28 Nov 2007 22:44:46 -0500

-------- Original Message --------
Subject: 	Government Opts for More Competition in the Wireless Sector
Date: 	Wed, 28 Nov 2007 16:18:40 -0500

Date: 2007-11-28

*OTTAWA, November 28, 2007* -- The Honourable Jim Prentice, Minister of
Industry, today released details on how the auction for Advanced
Wireless Services (AWS) spectrum, to be held on May 27, 2008, will be
conducted. Of the 105 megahertz (MHz) of spectrum to be made available,
40 MHz will be set aside exclusively for new entrants to bid on. The
other 65 MHz will be available to all bidders. The spectrum being set
aside amounts to less than 14 percent of the total mobile spectrum that
will be in use after the auction.

"We are looking for greater competition in the market and further
innovation in the industry. At the end of the day, our goals are lower
prices, better service and more choice for consumers and business," said
Minister Prentice. "That is why we are setting aside a portion of radio
spectrum exclusively for new entrants into the wireless market."

Recent studies comparing international pricing of wireless services show
Canadian consumers and businesses pay more for many of these services
than people in other countries. These services are key to strengthening
the competitiveness of Canadian business.

The decision to set aside spectrum for new entrants is consistent with
measures taken in Canada in 1985 and 1995 to facilitate access to
spectrum and market entry. It is also similar to measures taken in other
countries with competitive wireless markets, notably the United States
and the United Kingdom.

Spectrum is used by wireless providers to offer services such as video,
music and Internet access over wireless devices such as mobile phones,
much the same way a radio station emits its signal over the airwaves. On
February 16, 2007, Industry Canada launched a public consultation on how
best to conduct an auction process for the available spectrum. The 2006
Telecommunications Policy Review Panel (TPRP), launched by the previous
government, also made recommendations on future wireless licensing.

"Having considered all of the comments received during our public
consultation, we agree with the TPRP that measures should be taken to
enhance competition in this market," said Minister Prentice. "Spectrum
is a scarce and valuable resource that is used by all Canadians. It is
up to the government to decide how it is to be deployed, to best meet
the growing and diverse needs of Canadians."

Further details on the policy framework for the auction can be found at

For more information, please contact:

Deirdra McCracken

Press Secretary

Office of the Honourable Jim Prentice

Minister of Industry


Media Relations

Industry Canada



*Backgrounder - Advanced Wireless Services Spectrum Auction*

*1. Background*

*What are Advanced Wireless Services? *

Advanced Wireless Services (AWS) promise access to a growing range of
innovative wireless applications and enable the timely roll-out of next
generation technologies like high-speed video and Internet, with faster
access for cell phones, Blackberries and other hand-held devices. The
availability of these services will accelerate innovation and choice in
the wireless sector.

The U.S. completed an auction for AWS spectrum in 2006, and there was
considerable interest by their telecommunications industry. Making this
spectrum available in Canada will ensure the Canadian wireless industry
remains in step with international developments.

*What is Spectrum?*

Wireless networks need access to the radio frequency spectrum
(airwaves). Spectrum is divided into frequency bands and allocated to
services. Some examples are the broadcasting, satellite and mobile
services. AWS is a mobile service which means the consumer can be moving
while using the device. Spectrum is a finite public resource made
available by government through the issuance of licences. Licences for
commercial spectrum suitable for use by mobile telephones are very much
in demand and most recently awarded through the use of auctions.

*Why Auction Spectrum Licences?*

Auctions are an efficient licensing process for commercial spectrum
licences. Each auction is preceded by a public consultation to establish
the policy and licensing framework, auction design, technical
requirements and licence conditions. In the AWS auction, the government
is making available 105 MHz of spectrum that is comprised of 90 MHz of
spectrum for AWS, 10 MHz for the extension of the existing band
originally licensed in 1995, and 5 MHz of spectrum in the band 1670-1675
MHz. The 90 MHz of AWS spectrum is interesting at this time, as it is
large enough to enable new entry in the wireless market. To provide a
measure of comparison, the mobile band which opened in 1985 is 50 MHz
wide, and the mobile band which opened in 1995 is 120 MHz wide. Mobile
services are transforming how we communicate, and this auction will
provide additional spectrum to take it to the next level.

*How was the AWS Policy Developed?*

In February of 2007, Industry Canada released a paper called
Consultation on a/ Framework to Auction Spectrum in the 2// GHz Range
including Advanced Wireless Services/. This paper sparked a lot of
debate in the telecommunications industry because it asked whether
measures should be adopted to foster greater competition in the wireless

The AWS consultation also included a "reply comment" phase, which gave
an opportunity to challenge the positions and assertions of other
parties. The deadline for reply comments was June 27, 2007. There were
60 submissions received including initial and reply comments. All
comments have been posted on Industry Canada's Spectrum Management and
Telecommunications website at:

*2. Policy Objectives*

Canada's/ Spectrum Policy Framework/, published in June of 2007, sets as
the government's primary goal to maximize the economic and social
benefits that Canadians derive from the use of the radio frequency
spectrum resource. Radio spectrum is a finite and valuable public
resource which must be managed in the best interest of Canadians. The
auction of licences for mobile spectrum such as AWS is an infrequent and
important opportunity and must take into account the best interests of
Canadian consumers. The government's role is to help foster a healthy
and competitive telecommunications market that encourages and rewards
innovation, and from which consumers will benefit the most.

Industry Canada must determine whether market forces alone are
sufficient to achieve its policy objectives or whether specific measures
are appropriate at this time. Specific measures that have been used in
previous auctions in Canada and by other countries around the world
include: determining who is eligible to enter the auction, setting aside
spectrum for new entrants, establishing a spectrum cap to limit spectrum
dominance, mandating roaming and service roll-out obligations. The
department must also consider the implications of the current AWS
auction for the broader telecommunications industry and for the
information and communications technologies industry (ICT).

The Government of Canada has decided to set aside AWS spectrum for new
entrants, in order to foster more competition in the wireless market.
The goal is lower prices, more choice and increased innovation for
consumers. The government believes that new entry will further enhance
competition, not only in the wireless market segment, but across all
telecommunications markets in Canada providing new products needed to
keep Canada at the forefront of innovation. Having low cost for data
transmission and state of the art wireless devices are important to
Canada's competitiveness. The measures being taken are intended to
ensure an opportunity for entry into the marketplace. The department is
satisfied that the potential benefits of new entry warrant these
measures. The wireless market, and in particular consumers, can benefit
from further competition which strengthens Canada's ability to rely on
market forces to the maximum extent feasible. Consequently, the
department is: setting aside 40 MHz of AWS spectrum for new entrants;
mandating in-territory roaming for 5 years while new entrants build out
their networks; providing an extension of a further 5 years for national
new entrants provided that roll-out obligations are met; mandating
out-of-territory roaming for at least the 10-year licence term; and
mandating antenna tower and site (including roof-top) sharing and to
prohibit exclusive site arrangements for all radio and spectrum licensees.

In Canada, measures to ensure competition have previously been used for
licensing mobile spectrum. Spectrum was set aside in the 1985 licensing
of cellular radio, and spectrum caps were chosen to enable new entry in
the 1995 Personal Communications Services (PCS) licensing process.
Roaming was made a condition of licence for the cellular licensees who
acquired PCS spectrum in 1995. Other countries have used similar
measures to foster competition or ensure new entry, notably the United
Kingdom, Australia and the United States.

*3. Roaming*

Roaming enables subscribers of a service provider to obtain services
from another provider when travelling from one geographic area to
another. This increases the functionality of mobile devices for the
consumer. Roaming can also be a means of accelerating market entry by
allowing new entrants to roam on existing wireless networks for a fixed
period of time while they build out their own wireless networks.

The United States has taken wide-ranging measures to ensure roaming.
Recently, the Federal Communications Commission (FCC) in the U.S. has
mandated automatic roaming, as they found that regional wireless
providers were unable to negotiate roaming with the national service
providers. Many countries in the European Union have also mandated
roaming as part of their licensing processes for additional spectrum.
Such measures are sometimes needed to ensure consumer benefits while
recognizing the competitive nature of the wireless industry.

*4. Antenna Tower and Site Sharing*

Antenna tower and site sharing is a method of alleviating concerns about
building new antenna towers. These concerns can include the impact of
towers on environmental and local land-use requirements. As suitable
antenna sites become increasingly scarce and strategic, competition
issues arise as well. Two independent groups, the Telecommunications
Policy Review Panel and the National Antenna Tower Policy Review
recommended that tower sharing be required. The government agrees that
the time has come to mandate the sharing of these supporting structures.

Additional information on the tower approval process can be found on
Industry Canada's Spectrum Management and Telecommunications website at See also the Health Canada and Industry
Canada FAQ on Radio Frequency Fields at

*5. The Wireless Industry in Canada*

The Canadian telecommunications sector is a $36.1 billion industry. The
wireless sector is the fastest growing segment of the telecommunications
industry, generating $12.7 billion in 2006, an increase of 15.2% from
2005. Revenue growth stemmed from an 10.2% increase in subscribers.
Wireless services are now available to 98% of Canadians, despite a
wireless footprint that covers only approximately 20% of Canada's
geographic area.

The cost, features and availability of wireless services affect a large
portion of the public. According to the latest report from the Canadian
Radio-television and Telecommunications Commission (CRTC), there are now
18.7 million wireless subscribers in Canada (i.e. 58% of the population).

The three national service providers (Bell Canada Enterprises, Rogers
and TELUS) continue to dominate the wireless market, with 94% of
subscribers and 95% of the revenues according to CRTC reports. A chart
showing commercial mobile spectrum holdings and the spectrum to be
auctioned is included as Annex A.

*6. Wireless Pricing in Canada Compared to Other Countries*

While international price comparisons are challenging, most publicly
available studies suggest that prices in Canada are not as competitive
as they could be. In particular, there appears to be a consistent view
that prices charged for very high use packages and for data (Internet)
services are relatively high in Canada. For example:

      The OECD Communications Outlook 2007 compared wireless prices in
      30 countries. They found that the service package most comparable
      to what average Canadians use was more expensive in Canada than in
      eight other countries like the U.K., Sweden and Denmark. For other
      packages, Canada ranked 12^th and 22^nd . The report can be found
      on the Organisation for Economic and Co-operation Development
      website at:,3343,en_2649_201185_38949291_1_1_1_1,00.html

      A recent study by SeaBoard Group points out that rates in the U.S.
      and Europe, for either unlimited wireless plans, or limited
      wireless data plans are about half the cost of the same services
      in Canada.  The Seaboard report can be obtained for a fee at


      Recent media reports have looked at what it would cost Canadians
      to operate the new i-Phone and found that wireless data service
      rates in Canada are almost twice the amount paid in the U.S.,
      Germany and the U.K., where i-Phones prices range from $60 to $68
      U.S. A comparable service package in Canada would cost between
      $133 and $160.

*7. Future Spectrum Auctions*

Mobile spectrum suitable for consumer electronics like mobile phones and
similar devices is harmonized with other countries to provide the
economies of scale needed to reduce prices for equipment used by service
providers and wireless consumers. This type of spectrum comes available
only at certain times, usually when standards organizations reach
agreements which allow for the mass production of equipment. Industry
Canada is continuously looking at ways to enhance spectrum use and
reallocate existing spectrum resources to make them more useful.

For example, the government is converting analogue TV broadcast spectrum
to digital TV. This will result in some spectrum becoming available for
flexible use, including mobile services. This spectrum is expected to
become available for auction by 2011. Transitions like these take time,
and the department will consult the public as appropriate.

*8. Further Information*

Additional information can be found on Industry Canada's Spectrum
Management and Telecommunications website at:

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