Proposed mmWave deployment requirements “radical change;” shorter licence terms biggest positive: Professor

The Department of Innovation, Science and Economic Development Canada (ISED) is proposing “radical” changes for the deployment requirements of its future millimetre wave (mmWave) auction, along with shorter licence terms that are a “big positive” for Canadians, according to an associate professor at the University of Alberta’s school of library and information studies. In a phone interview with the Wire Report, Michael McNally said that “what we see here is a completely radical change to this idea of encouraging, rather than a population served target, the number of stations – the number of cells – per each 100 MHz block.” McNally studies rural and remote broadband and telecommunications policy. Last week ISED initiated a consultation on a policy and licensing framework for the auction of mmWave spectrum licences in the 26.5-27.5 GHz, 27.5-28.35 GHz, and 37.6-40.0 GHz bands (26, 28 and 38 GHz bands, respectively). ISED will treat the 26 and 28 GHz bands as one category in the auction (26/28 GHz band), with 1.6GHz of spectrum made available in that band. It will make the same amount available for the 32 GHz band. In total there will be 32, 100 MHz blocks available in each service area. mmWave is the micro cell 5g spectrum that companies, such as Rogers Communications Inc., are currently trying to put into stadiums, factories, hospitals, universities or airports. ISED has deviated from its 3,500 MHz auction rules and its proposed 3,800 MHz auction rules by proposing shorter, 10 year licence terms, Tier 5 service areas, and deployment requirements that measures the numbers of stations developed rather than the population served. In this context a station – according to ISED’s consultation document – is any collection of radios, transmitters or receivers with identical GPS coordinates, regardless of elevation. The “station approach” would require a licensee to deploy a minimum number of stations within its Tier 5 licence area. ISED proposed to switch to the “station approach” because of mmWave’s propagation characteristics. “mmWave is not currently considered to be a band that will be primarily used to provide expanded network service coverage. The spectrum is expected to be primarily deployed in providing high-capacity backhaul, as well as to augment capacity of existing services in existing service areas through the deployment of small cells,” it wrote in its consultation document. ISED proposed two options for deployment. The first proposes deployment requirements “with a lower number of stations to take into account the uncertainty of the business models for the mmWave bands,” while the second requires three to five times the number of stations than option one “to encourage greater use of the spectrum.” Some examples of ISED's proposed deployment requirements for different Tier 5 service areas, via its consultation on a policy and licensing framework for mmWave spectrum. McNally called Option 1 “a very timid rollout” because it will result in 5,261 cell sites for each 100 MHz block, compared to more than 26,000 under option two. “I think the big piece comes down to whether it's that more ambitious option two that's taken or whether the department ends up going with option one. And of course, that's one where the consultation will play a big, big role,” McNally said. McNally said although this a radical change from previous deployment requirements, “there’s not much here” to solve the urban-rural divide or to incentivize the use of wireless technologies in rural and remote areas. Under option two, deployment requirements there will be 430 stations deployed in those areas, according to McNally. In remote areas option two “would encourage more deployment potentially,” McNally said “but that depends on those licences being sold.” “And if a potential service provider is looking at having to purchase licences and then trying to work through what the deployment requirements might be, it might not make a business case sense,” he said. McNally said the government has no clear strategy around rural and remote development, noting that it has not updated its spectrum policy framework in 15 years. McNally said that the proposed 10 year licence terms is a “big positive” for Canadian consumers, small businesses, and ISED. He said the latter will have “more maneouverability” as new use cases for mmWave spectrum develop. “They're recognising that this is a newer set of bands in terms of potential uses on the millimetre wave, 5G spectrum, side of things. So I think the 10 year licence term is a very welcomed change,” he said. “The move to a 10 year term is a real thoughtful approach by the department.” McNally said there might be push back from Canada’s incumbent telecoms companies who want the certainty of a 20 year term, however, smaller telecom companies and Canadian consumers will save from the costs of paying for a 20 year licence. “It should be good for Canadians because we don't want to have the providers – whether it's the small mobile providers, whether it's the big national carriers – overspending on spectrum fees. We know that ultimately those spectrum fees get paid by us as consumers. The 3500 raised $9 billion at auction. Ultimately that $9 billion is going to be paid for by everyone else in their cell phone bills over 20 years,” he said. ISED proposed to use Tier 5 service areas – the smallest licensing areas which includes 654 service areas, further categorized into metropolitan, urban, rural, and remote groups – for its new licencing regime. The department wrote that the limited range of mmWave signals lowers the potential for interference, making smaller tier sizes more suitable. “Licensing based on smaller tier sizes, such as Tier 5, also provides additional flexibility to licensees by allowing them to concentrate on the geographic markets of most interest and/or to aggregate smaller service areas into larger regions that correspond to their business needs,” the department wrote in its consultation. ISED also noted that the results from the American mmWave auctions showed that demand exceeded supply in rural areas, therefore, it proposed to include rural and remote Tier 5 service areas as part of the auction process. McNally said it'll be “very interesting” to see how the Tier 5 approach, if approved, plays out at auction because there are many “very small” tiers in remote regions that have “very little” population. “They don't have market forces, they don't have competition. You might have a single provider in a lot of cases. And I think it'll be really interesting to see. There's a lot of blocks, potentially up for auction. Whether they have 3,200 MHz – so 32 100 MHz blocks – and I would imagine that in some of those real remote areas, they won't sell at all,” he said. McNally said for those areas, there is “certainly an argument” that Tier 4 service areas may work best, however, the deployment of mmWave spectrum requires a use case around it which would still be “non-existent”. He said that without urban densification there will likely be no use cases for mmWave in remote areas, and there is likely no fibre backhaul to make use of it. “There may be alternative use cases that might make sense. Alberta there's a lot of interest of course in the Internet of Things potential uses in oil sands development. There's been a lot of discussion around Indigenous spectrum rights, especially as we've seen the go with its tribal spectrum,” he said. “So some of those might potentially end up being facilitated. But I think, in terms of the real remote tiers, it'll be interesting to see what kind of auction uptake there is in some of these areas given that there are deployment requirements of course.” In terms of competition, ISED is adopting its usual approach of proposing either set-aside spectrum or a cross-band spectrum cap, despite incumbents challenging Quebecor Inc.’s set-aside spectrum purchases in court, Telus Corp.s’ critiques of set-aside spectrum and the Rogers’ acquisition of Shaw Communications Inc. ISED is proposing to either limit the amount of spectrum that a single licensee is allowed to obtain across the multiple bands (cross-band) to 800 MHz or to set-aside a total of 800 MHz of spectrum in the 26/28GHz and 38 GHz bands. “To maximize the benefits of mmWave spectrum, access to larger blocks of contiguous spectrum (e.g. up to 800 MHz) in a single band may provide operators with the opportunity to deliver ultra-fast speeds and the added capacity required to support data-intensive 5G applications, as well as economies of scale for network equipment for a single frequency range,” the department wrote in its consultation. For the set-aside option, ISED noted that the quantities, 400 MHz in each band, “is conditional on sufficient aggregate demand from eligible bidders in the first clock round.” “Providing set-asides in both bands (e.g. 400 MHz set-aside in each band) would allow set-aside-eligible bidders to select their preferred band and take advantage of any differences in the equipment ecosystem for the different frequency ranges that may better serve their business or use cases,” ISED wrote. McNally said the amount of proposed set-aside spectrum and cross-cap band is “not an insignificant but also not an overwhelming amount of the spectrum.” The set-aside spectrum will be open to all bidders except the national mobile service providers – “companies with 10 per cent or more of national wireless subscriber market share,” determined by the CRTC’s Communications Monitoring Report – and its affiliates. ISED will use 200 MHz from the 26 GHz band, 50MHz in the 28GHz band, and 800 MHz in the 32 GHz band in a future “non-compeititve” licensing process because its “policy objectives to enhance innovation and foster competition may not be fully met exclusively through the use of an auction process due to the potential new and future uses for this spectrum from smaller and non-traditional users,” according to its consultation document. The department will launch a separate consultation for the distribution of that spectrum. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca.

Proposed mmWave deployment requirements “radical change;” shorter licence terms biggest positive: Professor

News | June 14, 2022

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Proposed mmWave deployment requirements “radical change;” shorter licence terms biggest positive: Professor

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