Canada announces rules for 2500 MHz spectrum auction in 2015

January 10, 2014

Days before the hammer is raised for the 700 MHz auction, the Canadian government has already announced its next spectrum auction.

On January 10, Industry Minister James Moore announced that the government will commence an auction of 2500 MHz spectrum on April 15, 2015.  The spectrum will be licensed in paired blocks of 10 + 10 MHz and unpaired blocks of 25 MHz.  Licence availability varies across different blocks and regions of the country, but a total of 318 licences will be offered, each with a 20 year term.  Applications will be due by November 27, 2014.

Coincident with the announcement, the government posted the Licensing Framework for Broadband Radio Service (BRS) – 2500 MHz Band, which sets out the rules and procedures for participation in the spectrum auction, including the auction format and rules, the application process and timelines and the conditions of licence that will apply to BRS license holders.

The auction framework includes a number of features that the government believes will help foster sustained competition in the wireless telecommunications market, as well as robust investment and innovation by wireless service providers and extension of services to rural residents.  These features include the following:

Spectrum caps

The auction framework imposes a spectrum aggregation limit of 40 MHz in each service area of the 2500 MHz band, except in the far north, where there is no such limit. 

Unlike the 700 MHz auction, which applied more stringent caps to service providers with larger market shares, the caps for the 2500 MHz auction appear to apply equally to all bidders.  The government stated that the use of caps will ensure that at least four carriers would be able to utilize the BRS frequency band.

Smaller licence areas

Spectrum will be auctioned in blocks assigned to smaller geographic licence areas than previous auctions, for the expressed purpose of providing more opportunity for rural Internet service providers to acquire spectrum.  In addition to potential use to support mobile wireless data applications, the spectrum can also be used to provide fixed broadband Internet services in rural areas.

Transfer restrictions

The spectrum caps will remain in place for 5 years from the date that licences are issued, although any transfer of spectrum is subject to the prior approval of Industry Canada.

Use it or lose it

Licences for 2500 MHz spectrum will be subject to conditions of licence that will require licensees to demonstrate that within 10 years of licensing the spectrum has been materially deployed, meeting minimum population coverage targets of between 10 and 50%, depending on the specific licence area.

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