5G QUEST RISKS RURAL ACCESS
Communities could lose internet if government auction goes ahead
Canadians living in rural and remote communities — or even on the outskirts of big city limits — have long relied on satellite connections to access the internet, although it tends to be slower and less reliable than wired services available in urban centres.
Yet technological developments have enabled companies such as Xplornet Communications Inc. and BCE Inc. to use 3500 MHz spectrum to provide high-speed internet over fixed wireless by deploying small cells connected to fibre backhaul facilities.
On a conference call with analysts last week, Bell CEO George Cope said the company plans to expand fixed wireless internet with speeds up to 50 megabytes per second to 30 communities, a service made possible as it extends its fibre network.
In late July, Xplornet announced it would roll out fixed wireless with speeds up to 100 Mbps to 21 communities and 38 institutions in eastern Ontario, a project backed in part by federal funding.
But projects such as Xplornet’s could be at risk from a government proposal to seize 3500 MHz spectrum and auction it off for use for next-generation 5G wireless networks.
For more than a decade, the 3500 MHz band hasn’t drawn much attention as providers competed instead for other frequencies that can be deployed for lucrative mobile wireless in urban areas.
But the 3500 MHz band recently became a hot commodity after the international community deemed it the standard on which to build the next-generation 5G networks that will enable real-time applications such as self-driving cars.
Under pressure to enable 5G as quickly as possible, Innovation, Science and Economic Development (ISED) launched a consultation in June in which it proposed taking back a portion of 3500 MHz spectrum from existing licence holders and reallocating it through an auction.
“The options that currently have been proposed by ISED would put (the Ontario) project in serious jeopardy,” said Xplornet spokesman James Maunder.
The initial proposal would take away between a quarter to twothirds of Xplornet’s spectrum and could force it to reduce or disconnect service for about 180,000 of its 350,000 customers, Maunder said.
The reduction in service would also apply to the new project that leverages public funding, he added. The federal government promised $10.8 million on top of Xplornet’s $25.2 million.)
As it stands, Xplornet is most dependent on the spectrum to serve its existing customers given its competitors have millions more customers in urban centres with cable and fibre infrastructure.
It holds roughly 20 per cent of the 3500 MHz licences. Bell and Rogers Communications Inc. jointly hold about 75 per cent through a partnership called Inukshuk Wireless; Telus Corp. holds just one per cent and smaller players the rest.
No one argues the band isn’t needed for 5G deployment. Rather, the arguments boil down to how much licence holders should have to return as the government tries to advance 5G networks.
For its part, the government proposed a transition plan for fixed wireless providers to minimize disruptions to rural service.
It said technological improvements should allow service providers to make do with less spectrum. That transition, however, will be expensive, leaving companies to fight to keep as much 3500 MHz spectrum as possible despite the inevitable redistribution in the name of innovation.
In submissions to ISED, Bell, Rogers and Xplornet all suggested the government simply make more spectrum in the band available.
Bell said it would be “poor public policy” for the federal government to seize the spectrum and auction it off again, a process that could lead to paying for the same asset twice if a company wanted to keep the spectrum.
“A forced return of spectrum would discourage future investment and innovation in the industry as licensees would always be concerned that their licences could be appropriated by the government at any time simply because demand for the spectrum had increased,” Bell submitted.
Bell proposed that existing licence holders retain at least twothirds of their licences. It also stressed that the government should auction off more spectrum and allow companies to use it for both mobile and fixed wireless, meaning rural customers won’t be left behind as wireless players chase 5G opportunities.
Telus, meantime, wants to get its hands on the spectrum even though a few years ago, before it became evident 3500 MHz would be the preferred band for 5G, it got rid of some of its 3500 MHz holdings in a swap with Xplornet.
But now that it’s clear the band is critical for 5G, which represents an “exponential change” in technology, Telus agrees with the government’s proposals to reallocate spectrum in order to promote competition.
“This won’t be the first time where spectrum needs to be reallocated to incorporate new technologies,” Johanne Senecal, Telus’ senior vice-president of government relations and regulatory affairs, said in an interview.
Telus continues to push the government to move faster with the deployment so Canada can compete on a global stage, she said.
“The consequences and the opportunities are tremendous,” she
This won’t be the first time where spectrum needs to be reallocated to incorporate new technologies.
said.
As for Xplornet, it will move forward with the project funded in part by the government even though federal rules could threaten its long-term viability. The build includes 480 kilometres of backbone fibre, upgrading 40 towers and deploying 100 small cells for fixed wireless internet connections across the region.
It hopes the government revises its proposals.
“We’re hopeful they’ll strike the right balance to ensure that rural homes won’t be left behind,” Maunder said.