A set aside is proposed. Clawback from current 3500 MHz owners to be less than expected
OTTAWA – Following the recently completed auction for 600 MHz low-band spectrum, Innovation, Science and Economic Development Canada released several documents Wednesday afternoon which detail the Department’s plans to auction mid- and high-band spectrum to support the development of 5G in Canada.
ISED considers its approach of planning the release of spectrum in low-, mid- and high-band frequencies will be beneficial to the deployment of 5G technologies offering higher speeds, low-latency and improved capacity and coverage.
In Decision on Revisions to the 3500 MHz Band to Accommodate Flexible Use and Preliminary Decisions on Changes to the 3800 MHz Band, the Department confirmed its intention to adopt a flexible use licensing model for fixed and mobile services in the 3500 MHz band. This will provide the opportunity for ISED to issue flexible use licences in a portion of the band. Flexible licences could then be used by operators to offer 5G services. Today, the band is primarily being used to provide fixed wireless broadband services by a large number of licensees.
ISED intends to implement a band plan composed of 20 unpaired blocks of 10 MHz.
In order to free up spectrum for 5G, ISED had to limit the amount of spectrum that incumbent licensees would be able to retain under the new framework. The Department has determined that any incumbent licensee holding 75 MHz or more of spectrum will be eligible to apply for 60 MHz; any licensee holding 50 MHz of spectrum will be eligible to apply for 50 MHz; and all other licensees will be eligible to apply for 20 MHz.
ISED also indicated that it is adding the 3800 MHz band to its planned 5G spectrum releases with a 2022 auction target.
Having issued its decision to accommodate 5G services in the 3500 MHz band, the Department issued Consultation on a Policy and Licensing Framework for Spectrum in the 3500 MHz Band. The Department intends to auction spectrum licences in the 3500 MHz and the consultation document lays out its proposed auction format and proposed conditions of licence. The Department is also proposing to update the conditions of licence of all existing fixed wireless access licensees in the band.
Similar to the approach taken in the 600 MHz auction, ISED is contemplating adopting what it calls pro-competitive measures in the 3500 MHz auction framework. Under consideration is the use of a spectrum set-aside or an in-band spectrum cap. With a band plan consisting of only 20 unpaired blocks of 10 MHz, the Department is seeking comment on an approach that would balance the amount of spectrum for a set-aside and/or the size of a spectrum cap with the total amount of spectrum available in the band.
Readers should refer to Annex A in the Decision to find the amount of spectrum that will be available for auction based on the amount of spectrum remaining after considering the spectrum that will be available for existing licensees. The Annex includes the amount of spectrum that will be offered as unencumbered blocks.
"The Department believes the smaller licence areas will provide additional flexibility to licensees, by allowing them to either concentrate on local geographic markets of most interest or to aggregate the smaller service areas into larger areas that match their business models."
ISED proposes to use 172 localised (Tier 4) service areas for the 3500 MHz auction. This is in contrast to the larger licencing areas frequently used in spectrum auctions. The Department believes the smaller licence areas will provide additional flexibility to licensees, by allowing them to either concentrate on local geographic markets of most interest or to aggregate the smaller service areas into larger areas that match their business models.
The Department also proposes some interesting twists on the typical roll out requirements. Licensees that acquire 3500 MHz flexible licences and currently provide mobile LTE services to the general public, will be required to provide service coverage to 90% of the population of their mobile LTE footprint as of June 5, 2019, within five years of the initial issuance date (the proposed requirement increases to 97% within seven years). Also, for some service areas in rural areas around urban centres, licence holders in these areas will be required to provide service coverage to 95% of the population outside the large population centre within 10 years of the initial issuance date. The goal of these conditions of licence is to ensure the timely deployment of 5G services to all Canadians.
In another release, the Department published its Decision on Releasing Millimetre Wave Spectrum to Support 5G, which deals with the high frequency bands at 26 GHz, 28 GHz and 38 GHz. It also includes a decision to designate the band 64-71 GHz for licence-exempt operation on a no-interference, no protection basis.
ISED is adopting a flexible use licensing model for fixed and mobile services in the 26 GHz, 28 GHz and 38 GHz frequency bands. Under this model, a licensee would be permitted to deploy mobile, fixed or a combination of both services using a single spectrum licence.
The band plan consists of 18 unpaired 100 MHz blocks throughout the 26.5-28.3 GHz band with a 50 MHz block in the band 28.3-28.35 GHz. At 38 GHz, the band plan consists of 24 unpaired 100 MHz blocks for the frequency band 37.6-40 GHz. The Department also indicated that is deferring the development of a band plan in the 37-37.6 GHz frequency band to a later date.
Given the use of these frequencies by satellite services, there are concerns about potential interference between terrestrial fixed and mobile services, and satellite services. Until the earth station licensing rules and co-ordination rules are finalized, earth stations in the 26.5-28.35 GHz frequency range will be licensed in accordance with a new interim guideline issued together with the 5G releases: Interim Guideline for Licensing of Earth Stations in the Fixed-Satellite, Earth Exploration-Satellite and Space Research Services in the Frequency Bands 26.5-28.35 GHz and 37.5-40.0 GHz.
The Department also included in the Millimetre Wave decision, determinations regarding treatment of earth stations licensed prior to June 5, 2017, and more for the treatment of earth stations whose applications were pending approval as of June 5, 2017.
A future licensing framework consultation is expected for the 26 GHz, 28 GHz and 38 GHz frequency bands.
All of the documents referenced above can be found here. More to come as the companies digest the releases and we ask for comment.
