Next wireless spectrum auction to give advantage to new carriers

Industry Canada will set aside 60 per cent of the AWS-3 spectrum to be auctioned next spring for new entrants to the wireless market, Industry Minister James Moore says.

Speaking at a news conference in Vancouver on Thursday, Moore outlined ambitious plans to open up spectrum for wireless and internet carriers over the year.

The first auction of AWS-3 spectrum beginning on March 3, 2015, will enable better service for the latest smartphones, tablets and mobile devices.

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The big three telcos — Bell, Rogers and Telus — will be permitted to bid only on only 40 per cent of that spectrum.

Another auction next April of valuable 2500 MHz spectrum will also provide an opportunity for smaller wireless carriers to get a stronger grip on the market, Moore said.

Lots of new spectrum

Moore said he has a goal of having new entrants to the wireless market control about 25 per cent of spectrum by the end of 2015. Currently they control about 16 per cent of spectrum.

Other plans announced today:

• Canada will work with the U.S. to relocate over-the-air television to free up the low-frequency 600 MHz spectrum for wireless.
• A new licensing option will be offered for spectrum in the 3500 MHz band that remains unused. This band has traditionally been designated for fixed-wireless internet service.
• A new competitor will be chosen to operate a satellite and a land-based network in the AWS-4 spectrum.
• A new consistent licensing process will be developed for spectrum in the 24, 28 and 38 GHz bands, which are used to support mobile broadband traffic and broadband access for businesses.
• Additional 2100 MHz spectrum will be made available to support wireless infrastructure.

Moore said 60 per cent more spectrum would be available by the end of the year. 

"Spectrum is essential to power our wireless devices, and our government is making it more available than ever before,” he said.

Internationally, reports have shown that when you get a fourth major player into a cellphone market, prices will go down, service improves, there’s obviously much more choice available to the customer- David Christopher, Open Media

“The end result is that Canadians will benefit from more competition, lower prices and better service in our wireless sector.”

David Christopher of advocacy group Open Media expressed optimism that the measures announced today would finally introduce a fourth carrier to the Canadian market.

“Internationally, reports have shown that when you get a fourth major player into a cellphone market, prices will go down, service improves, there’s obviously much more choice available to the customer. We do expect that these measures which are really quite bold...will have a positive effect down the road,” he said.

The Harper government has been attempting to increase competition in the wireless industry, in the hope that will lead to lower prices for Canadians.

While wireless startups such as Public Mobile, Mobilicity and Wind first began in Canada in 2008, they have had trouble competing with the big telecoms.

The federal government raised $5.27 billion auctioning off the 700 MHz spectrum in February, but the big three players still got the bulk of the new airwaves.

Videotron, the Quebec-based carrier, also picked up spectrum in Ontario, B.C. and Alberta, but has yet to announce plans to roll out a network.

Wind ready to bid

Wind, the small carrier with ambitions of spreading across the country, was unable to bid in February’s auction because its backer, Vimpelcom, was not willing to advance more capital.

However, Wind has since restructured with a new group taking over Vimpelcom’s stake and has said it hopes to bid for next generation wireless spectrum.

In an interview with CBC's The Exchange with Amanda Lang, Wind chairman Tony Lacavera expressed optimism that the opening up of new spectrum would make Wind a national player.

“We’ve still a long way to make ourselves a truly competitive player on a level playing field with the incumbents but in six or so years we have come a very long way," he said.

Lacavera said recent roaming regulations have expanded Wind's coverage to about 97 per cent of the Canadian market. But it needs access to high-speed service over new bandwidths.

"The mobile internet is exploding and Canadians are increasingly watching video on their mobile phones. There’s incredible growth in demand for more mobile internet and that translates into the need for more real estate to give more services to Canadians," Lacavera said.