Xplornet protests proposal for cellular carriers to get frequencies in urban areas

A year ago Industry Canada promised the wireless industry it would try to allocate 750 MHz worth of spectrum for commercial mobile services by 2017.

On Tuesday it took another step to adding more frequencies for bandwidth-hungry carriers by proposing to split spectrum in the 3500 band, which had been designated years ago strictly for fixed wireless service, into two types: Rural for fixed wireless, and urban (areas with a population of 30,000 plus) for mobile services.

Some of the spectrum is already being used by service providers, while some of it will be repurposed and freed for mobile use. (Read the department’s proposals here)

The proposal was quickly challenged by New Brunswick-based Xplornet Communications, which specializes in broadband service to rural areas and uses 3500 MHz spectrum. “Xplornet is deeply concerned about this consultation and the proposal that will have a detrimental impact on high speed Internet access for rural Canadians,” president Allison Lenehan said in a statement.  “At this point, we are reaching out to Industry Canada officials to make them aware of the implications of this proposed change.”

If turned into policy it “will 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,” the statement said. “If implemented, hundreds of thousands of Canadians will have their internet disconnected, and could be forced back onto dial-up.  Under the proposal, Industry Canada would declare large swathes of rural Canada to be “urban” area, and re-designate the spectrum being used today for fixed wireless high-speed internet in those areas, as cell phone spectrum.  People in those areas already have cell phone coverage, but under the proposal they would lose their home internet connection as a consequence.” 

Meanwhile, he said, the freed spectrum will go to incumbent cellular carriers who are now “sitting on stock piles of un-deployed spectrum in these areas.”

The 3500 urban spectrum will eventually join frequencies in the 700 MHz band auctioned off earlier this year and in the 2500 MHz band to be auctioned off next year to give cellular carriers more bandwidth.

However, urban carriers won’t be getting hold of the 3500 MHz frequencies very soon, because there are no handsets right now that can handle the newest technology, LTE.

On the other hand, Internet service providers that offer rural  areas fixed wireless — which gives businesses and residences wireless  broadband  — will be able to immediately access new 3500 Mhz spectrum on a first-come, first-served basis.

Splitting the 3500 MHz band for mobile and fixed wireless is a good idea, commented Iain Grant of the SeaBoard Group, a Montreal telecom consultancy. “It shows they are flexible and  looking at new ways of doing things,” he said in an interview.

Some ISPs already have 3500 MHz spectrum on 10 year licences that are about to expire. If their existing licence conditions have been met they will be given one-year extensions. Otherwise the licence owners will surrender their spectrum for the government to dispose of.

This is an extension of the “use it or lose it” spectrum policy Industry Minister James Moore announced last November for spectrum holders in the 2500 MHz block.

New 3500 MHz rural licence holders will also be allowed to deploy their spectrum in small cells within their licenced areas, which the government hopes will encourage them to deploy it quicker where demand is highest.

The proposals also mean that those operators who now hold 3500 MHz spectrum for fixed wireless in what was designed  urban areas will eventia;;u have to give up those frequencies, because they will be re-allocated for mobile use.

Industry Canada is proposing two options: Giving them at least one year after the department issues a new licencing framework to give up or sell their frequencies; or having them give up licences after the new urban commercial mobile licences are issued.

Current urban fired wireless providers in the 3500 MHz band would have at least two years to continue in business.

“All costs associated with displacement of frequency assignments will remain the responsibility of the current licensees,” the propsal adds. “The Government of Canada bears no responsibility for costs or expenses incurred by the displacement of frequency assignments. Accordingly, the Government of Canada does not have a responsibility or intent to financially compensate licensees that are displaced. As new services are introduced, arrangements may be made between new licensees and incumbents on a voluntary basis. The Department does not generally review these private arrangements.”

Interested parties have until Oct. 8 to submit comments to the department.

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