Industry Canada to launch spectrum auctions for wireless mobile technologies in 700 and 2500 MHz bands

Industry Canada will launch a consultation processes in preparation for spectrum auctions in the 2500 MHz and 700 MHz bands to “support new mobile technologies and services,” the department said in its annual report on departmental plans and priorities, released Thursday. As broadcasters make the transition to digital over-the-air broadcasting by the Aug. 31, 2011 deadline, the 700 MHz band—currently used for analog over-the-air television—will be freed up for other mobile wireless uses. Digital television’s more efficient use of spectrum, compared to analog signals, will allow Industry Canada to set aside leftover spectrum for mobile wireless technologies such as broadband and cellphone services. “Consultation processes will take place in preparation for auctions in both the 2500 Mhz and 700 Mhz bands. Auctioning of these bands will help support new mobile technologies in the Canadian marketplace,” Industry Canada said. Mark Goldberg, a telecommunications industry analyst with Mark H. Goldberg & Associates, said the 700 MHz spectrum will be attractive for wireless carriers. “The lower the frequency, the better the propagation characteristics,” Goldberg told The Wire Report. “So that’s why is particularly attractive.” Because the 700 MHz spectrum is already set aside—but not in use—for mobile wireless in the United States, Goldberg said it is only a matter of time before devices and network equipment are manufactured to be compatible with it. Industry Canada has not yet announced dates for consultations or the spectrum auctions in the 700 MHz and 2500 MHz bands. According the Industry Canada report, regulations for spectrum, telecommunications and the online economy make up 43 per cent of the department’s spending on “marketplace" programs. Industry Canada plans to spend $87.2-million on marketplace frameworks for spectrum, telecommunications and the online economy in the 2010-11 year. That spending is expected to decrease slightly to $86.4-million in 2011-12 and $85.6-million in 2012-13. Industry Canada’s largest spending area continues to be research and development (R&D). As part of the Conservative government’s economic action plan, the department will spend about $1.6-billion on R&D initiatives in 2010-11. Funding from the economic action plan will end the following year, and resources for R&D will drop about 63 per cent, to $603.4-million in 2011-12. Also Thursday, Industry Canada officials appeared before the Commons industry committee to discuss foreign ownership in the telecommunications sector. Departmental officials told the committee that Canada has the most strict foreign ownership restrictions among Organisation for Economic Co-operation and Development (OECD) countries. “Most OECD countries committed to liberalizing their markets including removing their foreign ownership restrictions, but Canada did not,” said Marta Morgan, assistant deputy minister for strategic policy sector at Industry Canada. “As of , 18 of 30 OECD countries had no restrictions on foreign ownership in their telecommunications sectors. Only nine countries have significant restrictions,” Morgan said. “According to the OECD, Mexico, South Korea and Canada have the most closed markets with respect to foreign investment. However, since 2008, both Mexico and Korea have begun easing their restrictions.” Morgan argued that wireless services and pricing plans for Canadian consumers would improve with more foreign investment. “The quality, pricing, and availability of wireless services would improve significantly if Canada’s foreign ownership restrictions were liberalized,” she told the committee. Morgan said foreign direct investment draws two kinds of benefits. “The first is that foreign investors bring assets. So they bring new technology, they bring people and they bring know-how to try to increase productivity,” she said. “The second thing that foreign investors bring is more competition. So they make domestic firms compete harder, innovate more, and put pressure on them to reduce inefficiencies and increase their offerings.” Bloc Québécois MP Carole Lavallée, the party’s heritage critic, questioned how more foreign ownership in the telecommunications sector would affect Canadian and Quebec culture. But Morgan said cultural issues are outside of Industry Canada’s mandate. “It is clear that these are all issues that are very complex and these are issues where the decisions will have a great impact,” she told the committee. “With respect to culture, it was clear that we’re not going to be dealing with radio broadcasting or culture, we’re simply focusing on telecommunications.” jmigneault@thewirereport.ca

Industry Canada to launch spectrum auctions for wireless mobile technologies in 700 and 2500 MHz bands

News | March 25, 2010

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