After three years of interim policy, Ottawa has signaled that it wants to accelerate the spread of advanced wireless broadband in the country.
On Wednesday, Industry Canada called for consultations with holders of licenses in the 2500-2690Mhz band - who now use it for fixed WiMAX-based TV or Internet service - on whether it will force them into delivering more flexible mobile wireless services.
These licence holders include the Bell Canada-Rogers Communications partnership called Inukshuk, SaskTel, Craig Wireless and Look Communications.
This could be the boost Canadian companies need to catch up to U.S. carriers such as Clearwire, which has started to build a mobile WiMAX data network, and Verizon, which promised to start construction on its LTE-based data network this year.
Meanwhile, Canadian providers like Primus Canada and Look are only testing the technology.
“I applaud the government for doing this,” said Iain Grant, managing director of the SeaBoard Group, a Montreal-based telecommunications consultancy who has been critical of slow spread of broadband wireless in Canada.
“It’s great news for the operators [such as Craig] in that they will be able to be more creative in service provision. It’s probably bad news for people who are already in the mobility space [such as Bell and Rogers] since this will give different options for data users.”
There is no indication when Industry Canada will make a decision on the rules. Grant expects it could come in the fall.
Spokesmen for Rogers, Look and Craig could not be reached for comment on the government’s move.
Until now, Industry Canada has sold two kinds of licences in this spectrum: Multipoint Communication System (MCS) licences, used for wireless Internet service, and Multipoint Distribution Service authorizations, used for wireless TV service. MDS holders also need a licence from the Canadian Radio-television and Telecommunications Commission. Few licence holders had both, and Ottawa forbid them from offering mobile service. That limited what they could do as technology changed.
The licence holders’ technology of choice is based on the 802.16 fixed WiMAX standard. However, recently mobile WiMAX capability (called 802.16e) has been added and is now being introduced by a number of service providers around the world.
Initially, it’s being pitched as a high speed data choice for laptop and handset owners, as opposed to a voice service. Clearwire’s Clear service promises download speeds of up to 6Mpbs and upload speeds of up to 1Mpbs.
Industry Canada has not been unaware of the potential of wireless in this band. In 2006 it said “there is an overriding policy need to accommodate the introduction of new services, such as mobile and broadband Internet access and to encourage the most efficient use of the spectrum.”
But because some licence holders thought it was too soon to move into high speed mobile data, the department created a voluntary policy for anyone wanting to convert MCS and MDS holdings before their licences ran out.
One of the conditions was that frequency holders had to give one-third of their spectrum back to Ottawa, which will eventually be auctioned off. That may have held back some licence holders, who don't want to surrender spectrum. Other terms had not been firmed up.
It took two years before a licence holder took the plunge. Winnipeg-based Craig Wireless, which has a number of MDS licences in Manitoba and British Columbia, applied to exchange its licences a year ago. After months of pondering, in November the department agreed to convert one Vancouver licence. It was a signal to the rest of the industry.
With Wednesday’s notice Industry Canada said it now wants to talk about whether it will continue the voluntary conversion process or if it will force MDS and MCS licences to be converted to what it now calls Broadband Radio Service (BRS) at a specific date.
“The department is committed to taking the necessary steps for the implementation of BRS in order to increase flexibility in service provision that would benefit Canadians by enabling the development of competitive high-speed mobile services,” it said.
BRS licences will encompass fixed, mobile and broadcast capabilities, offering providers a wide range of so-called advanced capabilities, such as the ability to transmit live TV to handsets in moving vehicles.
To some observers, Clearwire has the jump in North America on this capability, with Canadian providers only testing mobile WiMAX. Grant complains that Inukshuk at least should have been more aggressive in bringing high speed mobile data service here. Instead the consortium is concentrating on bringing fixed broadband to underserved areas.
“We were years ahead of the Americans in developing the 2.5[Ghz] spectrum for WiMAX services,” he said, “and that’s why I think the government looks back on the process with some sense of frustration.”
The government’s move comes at a good time for Look Communications, which is in the middle of trying to sell its assets, including spectrum in the 2.5Ghz range. By saying it wants to firm up its conversion policy, the government’s move could only increase the value of MDS and MCS licences.
Grant believes potential buyers took notice of November’s Craig Wireless decision, and may have been expecting Wednesday’s announcement.