The Canadian Wireless Telecommunications Association saysthe government should call another wireless spectrum auction as soon aspossible in order to avoid serious network “traffic jams.”
Earlier this week, CWTA chief Bernard Lord told the MontrealGazette that freeing up spectrum would not only generate big revenue for thefederal government, but it would also open up new wireless lanes to help combatthe increased usage of smart phones, tablet PCs, and other mobile devicesclogging ISP networks.
“It’s like having millions of peoples with cars, and there’sonly one lane,” Lord told the newspaper. “You have a car, and you can look atit and wash it and polish it, but you just can’t drive it.”
The Gazette story also quotes “industry sources,” whichindicates the Conservative government could soon make an announcement that setsan auction date for sometime next year.
During the next auction, Industry Canada would be putting 700 Mhzspectrum up for sale, which is currently being used for analog TV broadcastingsignals. Broadcasters have until next August to move off of the 700 Mhz bandand make the switch to digital.
While I certainly believe the government needs to startthinking about this auction, including the important step of setting theguidelines for how the auction will be conducted, it’s also important forIndustry Canadato keep the big picture in view.
Rushing into a spectrum auction because of a perceivednetwork congestion crisis is a sure-fire way to cloud that picture.
The government’s 2008 spectrum auction set out to increasecompetition in the wireless industry and ultimately bring down prices forconsumers. But the jury is set out on whether that auction has done its jobyet.
While Canadians certainly have a few more viable optionswhen they set out to buy a new smart phone, holding an open spectrum auctioncould actually reverse some of those positive gains and allow “big three”carriers the opportunity to maintain their stranglehold on the market.
New entrants — which still include Wind Mobile, Mobilicity,and Public Mobile — should get preferential treatment yet again. During the2008 auction, 40 per cent of the spectrum was reserved for companies thatearned less than 10 per cent of Canada’stotal cell phone revenue.
Hurrying into a spectrum auction could lead Industry Canadato overlook this and once again give the “big three” a huge monopoly over 700Mhz spectrum and the future fourth generation LTE technology which will be ableto run on it.
To me, the CWTA’s “traffic jam” warning reeks of fearmongering as well. Sure, more wireless traffic requires better wirelessinfrastructure for our carriers, but allowing Rogers,Telus and Bellto get more spectrum next year won’t translate to consumer advantages anytimesoon.
All of these companies are still sitting on the spectrumthey purchased in 2008 and each have launched brand new 3.5G networks runningon the HSPA+ standard within the last 12 months.
But as of now, these carriers do not offer any handhelddevices that take advantage of the HSPA+ network. Frequency congestion will bean issue in the future, but I don’t think it is a valid reason for rushing intoa free-for-all spectrum auction.
To be clear, a free-for-all auction isn’t something the CWTAis publicly supporting, but the call for a spectrum auction as quickly aspossible might certainly give some people that impression. Especially when thenew wireless entrants are still massively in debt from the last auction.
