The amount of spectrum Bell and Rogers are sitting on is “obscene,” according to Christine Prudham of Xplornet Communications

Rural users lose when spectrum is hoarded: Experts

Rural Internet users are losing out on broadband access because large service providers are “hoarding” spectrum, according to experts who discussed the future of the wireless industry in Canada yesterday.

The panelists discussing The Next Generation of Wireless at the Canadian Telecom Summit yesterday, started out making projections on the growth of wireless adoption in Canada and what sort of services and devices this would spur. The topic quickly turned to spectrum hoarding when Christine Prudham, chief legal officer of rural broadband provider Xplornet Communications Inc., upbraided incumbent wireless providers Rogers Communications and Bell Canada Enterprises Inc. (BCE) for “sitting on” spectrum which they have held for more several years but have never used.

“It is obscene how much spectrum Rogers and Bell have and they are just sitting on it,” she said. “Why not sell it and allow others to put that spectrum to use.”

Particularly, she said, the 3.5 GHz band licensed by the two companies could be used to provide high speed Internet service to rural areas that do not have the fibre and cable infrastructure that cities have for broadband delivery. Bell and Rogers, through their joint venture Inukshuk Wireless, hold 75 per cent, while Telus has eight per cent and smaller players have 17 per cent of the spectrum designated for high speed Internet, also called fixed wireless.

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She pointed out that Bell and Rogers already account for as much as 70 per cent of the 544 MHz spectrum devoted for mobile while Telus and smaller carriers account for 30 per cent. Bell and Rogers also hold 48 per cent each of the 2.5 MHz spectrum while others share the remaining five per cent.

Prudham said the two incumbents have held their 3.5 GHz allocation for more than five years and have sought extensions for the license several times. They are seeking another extension this year.

Xplornet is interested in obtaining additional 3.5 GHz spectrum because it can used to provide high speed Internet in rural areas such as Oshawa and Uxbridge in Ontario where it operates.

“Both rural and urban Canadians use about 20GB/month of broadband,” Prudham said. “However, while urban dwellers get Internet via cable or fibre, those in rural areas access the Internet through either satellite-based services or fixed wireless using a combination of spectrum and towers.”

“The hoarding of spectrum is a barrier to rural broadband,” Prudham said.

“The government should be prepared to take a ‘use it or lose it’ approach on spectrum hoarders,” said Michael Stephens, VP of marketing for Toronto-based broadband services and high speed Internet provider TeraGo Networks Inc. “If they are not using it (spectrum), let’s find a way for others to be able to use it.”

“If you’re not using the spectrum allocated to you, you should be penalized,” the panelist said.

Bell has been unable to use its 3.5 MHz band allocation because of the lack of smart phones and other devices manufactured to work on that spectrum, according to Bruce Rodin, VP of wireless technology at Bell. Rodin was also a member of yesterday’s panel.

“Historically, 3.5 GHz has been difficult to use because of the lack of devices for it,” he said. “It has taken years to fully develop the potential of the spectrum.”

He said the wireless industry in the United States is now making plans for the spectrum and “hopefully the same developments will reach Canada soon.”

With their license for 3.5 GHz set to expire in 2014, Rogers and Bell are asking the government more time to see how things develop south of the border, according to Adrian Mah, managing director of InCode Consulting, a telecom technology and strategy consulting firm based in Mississauga, Ont. He was also among the panelists.

“I agree that the incumbents have been holding onto their 3.5 GHz license a little too long,” he said. “However, both companies are developing their respective LTE networks and they can argue that they intend to use the spectrum to add capacity in urban areas.”

The 3.5 GHz band is ideal for small cell deployments and would be an option to erecting tower-based macro cells in urban areas, said Mah.

“It’s going to be an uphill battle for Xplornet and other players calling for the re-allocation of the 3.5 MHz band,” Mah said. “Those holding it can argue for the interest of millions of urban users against those of a few hundred thousand rural users.”

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