AWS auction consultation document coming this fall: Industry Canada

The spectrum auction for advanced wireless services (AWS), commonly referred to as 3G, will not take place in March 2007, according to Industry Canada officials. It was rumoured that the auction of 80 MHz of spectrum in the 1700 MHz and 2100 MHz bands was scheduled for next March, but two key department officials involved in spectrum management dispelled that in an interview with Report on Wireless last week. Rosamond Bain, manager of wireless networks and lead for Industry Canada spectrum auctions, says there is no firm date for the auction, but adds the process to set the rules for the bandwidth sale should begin this fall. "We do have plans to release a consultation paper on the licensing of that and the release of that consultation paper helps to create some timelines, but we don’t have any firm timelines for the auction itself," she states. There are a lot of issues to consider before the auction start date can be set, adds Peter Hill, director of spectrum management operations. In addition to the complexity of the policy issues to be dealt with, timing of the auction could come down to whether there is going to be another federal election. "There’s a lot of variables with the timing ," he says. Hill continues that the department is using a long-standing policy of following the US Federal Communications Commission (FCC) in terms of auctions. "We clearly state in the document that we will be looking to see how the States is going and we will follow in some fashion," he says, adding Industry Canada believes this to be a prudent approach. The FCC has scheduled August 9 as the start for its 3G auction. The US telecom and broadcast regulator will auction 90 MHz of spectrum, consisting of 1,122 licences in the 1710-1755/2110-2155 MHz bands. Blocks A, B and F are 20 MHz licences, while C, D and E are 10 MHz licences. As of July 7, 81 applications had been approved to participate with an addit-ional 171 applications incomplete. The latter group had until July 18 to complete their applications. Thoughts were also circulating that given Industry Canada’s desire for a speedy resolution to licensing satellite spectrum, the department might also be trying to do the same for 3G spectrum. Hill explains the two licensing processes are different. "My own view is that we put things up into the system all the time, and that file was a separate issue, has its own drivers," he says. "So I wouldn’t be making any comparisons between . Every file is looked at on its own merits, its own drivers how it corresponds to the five priorities of the government." Key issues to be considered during consultationWhile the consultation paper is still likely a few months away, both officials were willing to talk about what some of the key points of contention might be. Many times during a number of Industry Canada consultations, the wireless industry has complained that it takes too long for the department to transfer the licences after the auction is complete because it has to conduct an assessment of the ownership and control of the winner. Bain and Hill say there is good reason the department doesn’t conduct this analysis pre-auction. "Number one," Hill says, "the auction might not happen for two or three years….But also a lot of companies don’t even know how they’re going to structure themselves until they know what they’ve won. Or they may not win anything and then we’ve put them through the wringer when in the end, they didn’t even get a licence." Hill adds that a lot of the structure questions are related to tax issues. "So there’s a lot of good reasons why we don’t do it that way. I would note that delay is a two-way street. And I’m not saying Industry Canada is innocent, but I would suggest to you that the folks who are coming in wanting clearance don’t necessarily come forward with the information in a timely fashion either," Hill explains. Bain says it’s also important that the department has the most current information possible about auction winners. "The information can be complex a lot of documentation, so it’s a matter of trying to make sure that we have a complete submission as well," she notes, adding this can lead to longer review periods. Using a set-aside of spectrum to reserve for new entrants is another policy option that is surely to be discussed. Talk circulated in the industry a few months ago about the department dissatisfaction with the level of competition in the wireless industry; rumour had it the department was going to set aside spectrum to help create a fourth national wireless operator. Hill says discussion about using a set-aside of spectrum will be in the consultation document as will a number of other things. But he adds Industry Canada’s job is to license spectrum, not guarantee success in the marketplace. "We’ve been very successful, I believe, in licensing a divergence of licensees in a number of bands in previous auctions. Some of those have been more successful in the marketplace than others. Sometimes technologies weren’t ready, sometimes the markets changed to such a degree that people weren’t able to get capital, and sometimes they’ve been totally successful," Hill states. "Generally speaking, we think our licensing processes have achieved our objectives, but we don’t control the marketplace."

AWS auction consultation document coming this fall: Industry Canada

News | July 27, 2006

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