OTTAWA – Businesses in rural Canada will not be able to benefit from next-generation wireless services because the smaller wireless operators will be unable to purchase 700 MHz spectrum in the auction scheduled for later this year, argued provincial Crown Corp. SaskTel in an appearance before a Parliamentary committee this week.
Speaking at the House of Commons Standing Committee on Industry, Science and Technology, Bob Hersche, senior director, corporate counsel and regulatory affairs at SaskTel, explained that despite having a massive fibre network that reaches every town with more than 100 people, the company still needs 700 MHz spectrum to serve those out of reach of that hard-wired network.
With 65,000 small and medium sized businesses located in rural parts of Saskatchewan and many outside of towns, it’s just not feasible to deploy fibre to each and every one of them. Hersche said it costs SaskTel $18,000 per kilometre to roll out fibre and therefore access to spectrum is critical.
But under the current 700 MHz auction rules, it’s unlikely the company is going to be able acquire enough. Hersche said SaskTel would only be able to acquire 5 MHz.
“The auction format favours national providers because it maximizes revenue for the country as a whole regardless of the bids of the individual licences,” Hersche said during his opening remarks. “So if a national provider provides a bid for all of Canada, that bid will supersede what might have been just the larger bid for Saskatchewan or some of the other small providers like EastLink in the Atlantic, like Vidéotron in southern Quebec.”
The other problem with the way the 700 MHz auction has been designed is much of the spectrum acquired could remain fallow. Under the auction rules, providers that acquire two blocks of paired spectrum are required to deploy the 700 MHz to mirror their respective HSPA footprints. For example, a national provider that acquires two paired blocks with national coverage isn’t required to deploy into rural regions of Saskatchewan because it doesn’t already have an HSPA footprint there.
Hersche argued that Industry Canada must review the rules because of this major discrepancy.
“So much of the very scarce resource is going to be left unused for the next 10 years if we do not use that. It’s not going to just in rural Saskatchewan, but it will be rural areas across Canada,” he said. “There needs to be a mechanism that those people serving those areas can use that spectrum and get access to that spectrum in an affordable way.”
