Racing towards the next spectrum auction

Is there a crisis looming in wireless spectrum demand? That was the provocative title of a panel at Wednesday’s annual Spectrum 20/20 conference in Ottawa sponsored by the Radio Advisory Board of Canada and Industry Canada.

Why might there be a crisis? Think about this: Thanks largely to the stress put on its wireless network by iPhone users, American carrier AT&T has boosted its wireless capital spending for this year by US$2 billion

Last year AT&T’s mobile data traffic increased 200 per cent over the year before.

In an e-mail, Industry Canada assured me it doesn’t have an opinion on whether there's a crisis coming here, but it does note that’s the view of some in the U.S. At the same time the department said the “magnitude” of the bids at the recent spectrum auction suggests demand may be exceeding supply. So it called in some experts Wednesday for projections on the demand for spectrum from the cellular, satellite, public safety and utility industries.

I couldn’t get to Ottawa for the conference, so I called two experts of my own.

Eros Spadotto, executive vice-president for technology strategy at Telus Corp., didn’t use the word crisis, but things are heating up enough that he wants to see the next cellular spectrum auction, for the 700 Mhz band, sooner rather than later.

“I think we need to get on with it,” he said, although Telus hasn’t started to use the hundreds of millions it spent in the AWS auction.

How soon? Next year, he said.

“We’re entering an era of what I call hyperconnectivity,” he said in a phone interview from his Toronto office. The future will see an untold number of devices having wireless capability which will push carrier network demand even more than they’re seeing today.

On average, Telus has 55 Mhz of spectrum in the PCS bands across the country, plus between 10 and 20 Mhz in a number of cities from AWS auction.

“We’ve done a good job of farming and re-farming the capabilities of our spectrum to use if for successive waves of technology,” he said. “Until now spectrum has not been an issue, nor do I see it an issue in the foreseeable future.” But, he added, “in the five year-plus timeframe we will have to make sure that we have new spectrum capabilities.”

Spadotto wouldn’t divulge Telus’ data demand figures for competitive reasons, but did say that recently it has been “greatly exceeding historical trends.”

The Canadian wireless industry has done an excellent job of managing it spectrum, he added, pointing to the fact that it covers much of the country. And there are many things carriers can do to extend the use of their spectrum, from managing traffic through policies management to offloading signals to local WiFi networks.

He also said that through channel bonding and MIMO (multiple input-multiple output) technology, HSPA data speeds can be taken up to the range of the next generation of wireless broadband, LTE.

On the other hand, Amit Kaminer, an analyst with the SeaBoard Group telecommunications consultancy, suggested there may not be a disaster around the corner. Telus partnered with BCE Inc.’s Bell Canada to launch an advanced HSPA+ wireless data networks just over five months ago, he noted, around the same time Rogers Communications Inc. fired up its new HSPA+ network. So right now they’re relatively empty. Add in the developing HSPA networks of Wind Mobile, Mobilicity and Videotron and “I think we’re in a good situation,” he said.

Still, he agrees with Spadotto that we’re about to see a proliferation of wireless devices which will accelerate network demand. And carriers never seem to have enough spectrum.

He also noted they face two choices when demand increases: Hone the network (build more towers, improve backhaul, manage traffic) or buy more spectrum. But having more spectrum “makes your life easier.”

When will the 700 Mhz auction happen? Industry Canada says it will release a consultation paper this year on general allocation issues, frequency band structure, anticipated applications, coverage requirements, technical conditions and spectrum requirements.  A period of public input on what the rules should be will follow before the department makes a decision.

Is there a looming spectrum crisis here? Should the 700 Mhz auction be held in 2011?

Let me know what you think.

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