Edmonton Journal

WIRELESS PROVIDERS AWAIT 5G ADVANCES

Why Canada is ‘dragging its feet’ on the next spectrum auction as demand soars

- EMILY JACKSON

Canada is home to more than 30 million mobile phone subscripti­ons for roughly 36 million residents.

Quarter after quarter, national wireless carriers report higher revenue per user as customers blow past data limits and buy bigger data buckets. Year after year, the telecom regulator reports more people upgrading to data-devouring smartphone­s to use on increasing­ly fast networks that let them consume content more easily.

It may be a given that Canadians can’t get enough snapping, streaming and content sharing, but data demand is only expected to grow as 5G networks, the Internet of Things and connected cars become reality.

But how and when the federal government will auction off the next band of spectrum — the invisible asset required to power wireless communicat­ions — remains a mystery even to itself.

Although it predicts more spectrum may be required by the end of 2017, by the time it gets around to putting more spectrum on the block, 5G network standards may require a different set of airwaves to function.

Nearly two years have passed since the department formerly known as Industry Canada, now called Innovation, Science and Economic Developmen­t (ISED), announced plans to follow in the United States’ footsteps and repurpose the 600-MHz band of spectrum, a particular­ly valuable chunk of low-band airwaves that brings signals to tricky spots such as elevators and basements.

The U.S. wrapped up its 600MHz auction earlier this month, pulling in a total of US$19.8 billion. Canada has always indicated it would wait for the U.S. auction to conclude to avoid technical variations between markets.

Yet, even though ISED Minister Navdeep Bains in November told reporters the government was working with industry to make spectrum available as soon as possible, an auction will take at least two more years, ISED stated this week in an email responding to questions on what Canada’s auction might look like.

ISED has not yet determined a structure for the auction, and noted it must first launch a public consultati­on on auction policies and then issue a decision on how to run the auction.

“The entire process, which also includes developing the auction software and conducting extensive bidder training, takes approximat­ely two years from the launch of the consultati­on,” the ministry stated. “No specific date has been set for the consultati­on or the auction, at this point in time.”

Billions of dollars could be on the table. The government pulled in nearly $5.3 billion in the last major auction of low-band spectrum, the 700-MHz band, in 2014. In 2015, it raised another $2.1 billion selling higher-frequency spectrum in the AWS-3 bands.

ISED did indicate Canada’s next auction will be structured differentl­y than the one recently wrapped up by the U.S. Federal Communicat­ions Commission, which was set up as an incentive auction where broadcaste­rs were encouraged to vacate their channels so wireless carriers could bid on the spectrum.

That unpreceden­ted model is widely seen to be less effective in Canada since two communicat­ions titans — namely, BCE Inc. and Rogers Communicat­ions Inc. — own both broadcaste­rs and wireless carriers.

Canada may be “dragging its feet a little bit” on its 600-MHz auction, but that’s not necessaril­y a tactical error given the importance of the asset, said Gregory Taylor, principal investigat­or for Canadian Spectrum Policy Research and an assistant professor in the University of Calgary’s communicat­ions department. “This is where the power lies right now, in this invisible stuff that’s around us all the time,” he said.

The standard school of thought for decades has been that the big companies are running out of spectrum, Taylor said.

But in the latest U.S. auction, the two biggest players largely stayed out.

Verizon Communicat­ions Inc. didn’t bid at all and AT&T Inc. spent less than US$1 billion. TMobile, the third-largest carrier that bills itself as the consumerfr­iendly industry outsider, spent US$8 billion.

“A lot of these things are making us re-examine how much spectrum we need,” Taylor said.

“This is actually one where Canada may have been wise to wait this out a little bit. We’ve sold off a lot of spectrum, the major companies have large reserves of spectrum right now, I don’t think there’s a panic.

“We want to make sure we’re doing this right.”

Taylor doesn’t believe an incentive auction makes sense in Canada since two of the biggest potential bidders would “only just move the money from one hand to another,” but he thinks the government might be wise to copy the U.S. in setting aside some of the proceeds to help broadcaste­rs recover the expenses of changing channels when they relinquish spectrum.

 ?? ERNEST DOROSZUK ?? While Canadian consumers can’t seem to get enough of their smartphone­s, federal regulators appear to be waiting on advances in wireless technology before allocating more broadcasti­ng spectrum.
ERNEST DOROSZUK While Canadian consumers can’t seem to get enough of their smartphone­s, federal regulators appear to be waiting on advances in wireless technology before allocating more broadcasti­ng spectrum.

Newspapers in English

Newspapers from Canada