Small ISPs positive, Xplornet critical of new 3500 MHz policy

The government’s proposed changes to the licensing of 3500 MHz spectrum are receiving praise from small wireless Internet service providers (ISPs), while satellite Internet provider Xplornet Communications Inc. said it is “deeply concerned.” Industry Canada released a consultation document Tuesday proposing that some of the spectrum, which currently permits only fixed services, such as wireless Internet or satellite Internet service, be freed up for mobile use. The document proposes that licence areas be designated as either rural or urban in a “geographically differentiated policy where mobile services will be allowed in urban tiers, and fixed services will be allowed in rural tiers.” Tier 4 areas containing a population centre of 30,000 or more would be classified as urban, the document specified. In a press release Tuesday, Xplornet said that the proposal will negatively affect rural Canadians’ access to high speed Internet. The move would “take spectrum away from providers, like Xplornet, who deliver service today to Canadians outside cities, and give it to the telcos for cellular phone use. If implemented, hundreds of thousands of Canadians will have their Internet disconnected, and could be forced back onto dial-up,” Xplornet president Allison Lenehan said in the release. “At this point, we are reaching out to Industry Canada officials to make them aware of the implications of this proposed change,” he added. Jake Enwright, press secretary for Industry Minister James Moore said in a phone interview that “spectrum is a valuable resource and it’s the government’s responsibility to allocate it in a way that benefits all Canadians.” Telecom consultant Mark Goldberg, whose clients include Xplornet, said the move could cause “collateral damage.” Goldberg added that “while they may have intended to only catch urban, there’s a lot of rural being served from urban licences,” with, for instance, northern Alberta being captured in the Edmonton licence. He added there will also be interference at the edges of the service areas being used for different purposes. Seaboard Group analyst Iain Grant took the opposite view to the government’s approach to the spectrum, calling it “very pragmatic” in an email. “The shift to licensing rules for rural and urban with different potential uses in each area is logical,” he said. “The department is moving in the right direction and showing how adaptable it can be. And by not defining the technologies, just defining mobile or fixed, in urban and rural respectively, the department is leaving it to licensees to be innovative and creative in using the resource for maximal benefit.” He added that while reallocating the spectrum for mobile use could result in service disruptions and difficulties for ISPs “in a few instances,” it appears that Industry Canada is “bending over backwards to ensure it does not disrupt existing services and existing licenses that are in use (a key differentiator) are renewed for a year,” he said. Grant added that the majority of the spectrum isn’t being used, and Industry Canada “is eager to get it into circulation.” Jonathan Black, chief financial officer for Ottawa-based Storm Internet Services, and chairman of Canadian Association of Wireless Internet Services Providers (CANWISP), which was formed to lobby the federal government for more spectrum for wireless Internet providers serving hard-to-reach rural communities, was also positive about the government’s announcement. “I think there are pleasant surprises in here,” he said. Black had previously called for the government to make the 3500 MHz spectrum available to smaller ISPs through measures such as smaller licence areas, and said in an interview Tuesday that the government’s proposal does do that. The way the government has proposed dividing the spectrum, including potentially having multiple licences within each small area, makes for a “very granular, very addressable licence area for our members.” He also said the move to divide the spectrum between rural and urban use is a “move in the right direction,” since it will result in more affordable rural spectrum for those smaller ISPs. “Very simply, there are more dollars per square kilometer in Toronto or Ottawa than there are in small-town Ontario. The density of people and the dollars that can be generated are what drive the value of the spectrum, and if it’s sold off as a block across the country, then it doesn’t match the business model for the smaller centres,” he said. Black added that “it’ll be interesting to see how they handle a rural-urban boundary” in areas such as Ottawa, which is an urban area with rural sections. In a press release on the consultation document Tuesday, the government emphasized that those who hold 3500 MHz spectrum that they’re not using will not have their licences renewed. “As announced in November 2013 as part of the government's 'use-it-or-lose-it' policy, service providers that have not deployed this valuable resource to Canadians will not have their licences renewed,” the release said. In November, the government noted that 10-year spectrum licences in the 2300 and 3500 MHz bands were auctioned between 2004 and 2009, and would begin to expire in March. When that policy was announced, The Wire Report reported that the “use-it-or-lose-it” provision could affect Inukshuk Wireless Partnership, which is jointly held by BCE Inc. and Rogers Communications Inc. In an email Tuesday, Rogers spokeswoman Jennifer Kett said:“We’re confident that we will meet all of the deployment requirements for the 3500MHz spectrum we hold through the Inukshuk Wireless Partnership. We’re deploying a 4G LTE broadband wireless network in the communities where we hold this spectrum. That work is nearly complete.” The deadline for comments on the consultation paper is Oct. 8, and the reply deadline is Nov. 8. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Small ISPs positive, Xplornet critical of new 3500 MHz policy

News | August 19, 2014

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Small ISPs positive, Xplornet critical of new 3500 MHz policy

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