Rules set for next spectrum auction, applications due Aug. 6

Industry Canada's finalized rules for the next wireless spectrum auction have been published, as four unclaimed licences left over from last year's 700 MHz auction and this year's AWS-3 auction have been divvied up to create 18 licences up for grabs. The auction, which was first announced on the evening of Friday, May 1, deals with one licence for the Northwest Territories, Yukon and Nunavut that went unsold in last year's 700 MHz auction, and three unclaimed licences from this year's AWS-3 auction for that same northern region, Saskatchewan and Manitoba. The final framework, posted online Friday, mostly follows proposals made by the government when the auction was first announced, such as doing away with the rule that reserved 60 per cent of the available AWS-3 spectrum for smaller carriers already providing service. Also as initially suggested, the government will maintain rules for 700 MHz spectrum in this sale that limit the largest carriers to one block each of the four so-called prime blocks of spectrum in each region. With BCE Inc. and Telus Corp. each purchasing one of these blocks in the North in last year's 700 MHz auction, Rogers Communications Inc. is left as the only incumbent qualified to bid on this type of spectrum in the next auction. Rogers spokesman Kevin Spafford said in an email that Industry Canada auction rules prevent the company from disclosing whether it intends to bid on any 700 MHz or any other spectrum in this summer's auction. Participants in this auction must submit their applications by 12 p.m. ET on Aug. 6, with deposits. It will be a sealed-bid auction, with offers due by 12 p.m. ET Aug. 25, and results are to be announced two days later. The second-price rule will apply, meaning the winning bidder will pay the price pledged by the next highest bidder, or the qualifying bid price if there is no competing offer. "Bidders, knowing that they will only be required to pay the amount determined by the second-price rule, will have a greater incentive to bid truthfully," Industry Canada said in its framework. "This promotes an efficient auction outcome." Package bidding will be allowed for AWS-3 spectrum within service areas. In cases of package bidding, Industry Canada can, in some cases, raise the price of the spectrum beyond the second price in order to ensure the company acquiring the spectrum is not paying less than what another company was willing to pay. This next auction will divide the licence area that spanned the whole North into separate areas for the N.W.T., Yukon and Nunavut. "Licensing based on smaller tier sizes in the North would provide additional flexibility to bidders, who can concentrate on the geographic markets of most interest, or aggregate the tiers larger regions corresponding to their business needs," Industry Canada said. As well, all of the AWS-3 spectrum blocks that were left over from the auction this March have been divided into chunks that are a third of the size they were. "Industry Canada is of the view that as proposed, disaggregating the blocks would allow more than one bidder to access the spectrum, while permitting the aggregation of blocks by bidders for increased efficiencies," the government said. "The proposed change would also align with the U.S. band plan." The changes will result in one licence for 700 MHz spectrum being available in each northern territory in the August auction, and each territory will also each have three licences available for AWS-3 spectrum. The opening bid will be $110,00 for the 700 MHz licence in the N.W.T., $90,000 for the Yukon and $85,000 for Nunavut. The AWS-3 licences will start at $21,000 for the N.W.T., $17,000 for the Yukon and $16,000 for the Nunavut. Manitoba and Saskatchewan will each have three licences for AWS-3 spectrum. The opening bid for Manitoba and Saskatchewan licences have been set at $1.1 million and $618,000, respectively. Industry Canada said it will require that 700 MHz spectrum for the North in this auction is deployed for 20 per cent of the population coverage within 10 years, and AWS-3 spectrum here must be deployed to the same extent within eight years. For AWS-3 spectrum in Manitoba and Saskatchewan, the government has set five-year deployment requirements ranging from 30- to 60-per cent population coverage. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

Rules set for next spectrum auction, applications due Aug. 6

News | July 13, 2015

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Rules set for next spectrum auction, applications due Aug. 6

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