Archived — Consultation on Spectrum Licence Fees for Mobile Satellite Services in Canada Using Mobile Satellite Service Spectrum Above 1 GHz

June 13, 1998

DEPARTMENT OF INDUSTRY
DEPARTMENT OF INDUSTRY ACT AND RADIOCOMMUNICATION ACT
NOTICE NO. DGRB-001-98

This Notice announces the release of the Industry Canada document entitled Consultation on Spectrum Licence Fees for Mobile Satellite Services in Canada Using Mobile Satellite Service Spectrum above 1 GHz, which requests public comment on spectrum access fees for the use of radio spectrum for the provision of mobile satellite services in Canada. This Canada Gazette Notice and the consultation document are available electronically on the Internet at the World Wide Web location noted below.

The Department of Industry invites submissions, preferably in electronic format, from all interested parties. Submissions should be addressed to the Director, Space and International Regulatory Activities, Radiocommunication and Broadcasting Regulatory Branch, Industry Canada, at the following Internet address: DSIR@ic.gc.ca. To ensure there is time to consider all comments, submissions should be received within 60 days of the date of publication of this Notice. All submissions must cite the Canada Gazette Part I Notice publication date, title and the Notice reference number. Submissions can also be submitted to the Director by mail at: 300 Slater Street, Ottawa, Ontario, K1A 0C8.

All submissions received in response to this Notice will be made available for viewing on Industry Canada's website noted below. The responses will also be made available for viewing by the public during normal business hours at the Industry Canada Library, 235 Queen Street, West Tower, 3rd Floor, Ottawa, Ontario, and at the offices of Industry Canada in Moncton, Montreal, Toronto, Winnipeg and Vancouver, for a period of one year from the close of comments.

Industry Canada's Spectrum Management and Telecommunications website is http://www.ic.gc.ca/spectrum.

June 13, 1998

Jan Skora
Director General
Radiocommunication and Broadcasting Regulatory Branch


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1.0 Purpose

Industry Canada is seeking comments on spectrum access fees for the use of radio spectrum above 1 GHz for the provision of mobile satellite services in Canada. The Department will review the responses and will modify the approach as necessary and fix an appropriate fee for such licences.

2.0 Background

A number of existing and planned mobile satellite service (MSS) radiocommunication networks will provide Canadians with a variety of communication services throughout Canada. Both Canadian and non-Canadian satellite networks will be used to provide these services. Such networks will use radio frequency bands above 1 GHz, generally using a total of 2 to 30 MHz of radio frequency spectrum for communications between the subscriber earth stations and the space stations. In some cases, these networks will share the use of one or more of these service bands with other MSS networks. Where such sharing occurs, the MSS networks must operate in a manner that permits the mutual operation of competing services.

Applications to use radio spectrum to provide mobile satellite services in Canada are submitted to the Department in accordance with Client Procedures Circular 2-6-06 (CPC-2-6-06), Guidelines for the Submission of Applications to Provide Mobile Satellite Services in Canada and to License Subscriber Earth Stations. Prospective service providers,1 in their application, must demonstrate that they meet the assessment criteria andfactors contained in Industry Canada's Radio Systems Policy 007 (RP-007), Policy Framework for the Provision of Mobile Satellite Services via Regional and Global Satellite Systems in the Canadian Market.

Currently, to authorize the use of radio spectrum to provide service, Industry Canada issues radio licences. Such radio licences permit the operation of the subscriber radio stations, the ancillary gateway and telemetry, telecommand and control (TT&C) earth stations, as well as the space station in the case where a Canadian space station is used to provide service. This approach creates two substantive inequities in the treatment of service providers. First, because Canada has no authority to license foreign space stations, Canadian service providers using foreign satellites only pay radio licence fees for the user terminals and related gateway earth stations. Service providers using domestic satellites must also pay licence fees for the space station. Second, rather than paying licence fees in accordance with the quantity of spectrum resources they consume, service providers pay fees for access to radio spectrum in accordance with the size of their subscriber base. Under the current approach, two different service providers could pay substantially different fees for the use of the same amount of assigned radio spectrum. Conceivably, operations with greater spectrum efficiency could pay more for the same amount of spectrum.

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3.0 Proposal

Industry Canada intends to issue spectrum licences to service providers for the use of MSS spectrum above 1 GHz to provide mobile satellite services in Canada. In part, this use of a spectrum licence is a continuation of the licensing policy changes begun in 1991 by the former Department of Communications when it decided to issue subscriber mobile earth station radio licences to the respective service providers rather than to the individual subscribers. It is also consistent with the approach the Department has already taken with respect to MSS service providers using spectrum below 1 GHz. More importantly, the use of a spectrum licence, in conjunction with a different approach to spectrum access fees, will permit Industry Canada to redress the inequities created by the current licensing approach.

3.1 Spectrum Licences

Under the authority provided in subparagraph 5(1)(a)(i.1) of the Radiocommunication Act, the Minister may issue spectrum licences in respect of the utilization of radio frequencies within a geographical area. Industry Canada intends to issue one spectrum licence to each service provider for the utilization of the uplink and downlink service bands associated with the operation of their subscriber's earth stations. These licences will permit the service provider to operate an unlimited number of subscriber earth stations in Canada. As described below, Industry Canada intends to charge a licensing fee relating only to the value of the spectrum used to provide mobile satellite services in Canada. Hence, these spectrum licences by their nature will include the use of service bands at the space station regardless of whether a Canadian authorization for the space station is necessary. Industry Canada will, however, continue to issue separate space and earth station radio licences for the authorization of ancillary radio apparatus providing gateway and TT&C functions. Fees for these latter licences will remain unchanged under this proposal.

3.2 Spectrum Licence Fee

It is established government policy that licence fees reflect the economic value of the radio frequency spectrum associated with the licence. However, in the absence of a market-based mechanism by which the economic value of the spectrum would be revealed, the Department recognizes that such determinations are difficult.

Nevertheless, having considered the potential value of the spectrum resources as a whole and recognizing that the mobile satellite service is generally granted exclusive access to this spectrum in Canada, Industry Canada proposes an annual authorization fee of $18,000 per 500 kHz, or portion thereof, for the use of the mobile satellite spectrum assigned2 by the Department. This fee will apply to all radio frequency bands above 1 GHz that are allocated to the mobile satellite service. It is further proposed that a prorated authorization fee of $1,500 per 500 kHz be applicable at the time of initial authorization for each month remaining until the licence expires at the end of the licensing year (March 31). Thereafter, the annual fees will be applicable and will be due prior to the re-issuance of the licence on April 1 of each year.

3.3 Shared Frequency Assignments

The Department recognizes that some assigned frequency bands will be shared by more than one mobile satellite system. It is further recognized that there may be more than one mobile satellite service provider associated with a particular satellite network, thereby creating an additional requirement to share spectrum. The authorization fee for an individual service provider should reflect, to the extent possible, a proportionate share of the economic value of the spectrum assignment. In order to accommodate these spectrum sharing scenarios, the Department is proposing two simple formulas to determine the authorization fee for a service provider.

Where a particular network is required to share assigned spectrum in Canada with one or more other networks, the proposed authorization fee for the network will be 1/3 of the authorization fee applicable for the equivalent unshared band, as indicated in the following table.

Network Authorization Fee

Spectrum Sharing Required3 Multiplier Annual Network Authorization Fee
($/500kHz/Year)
Prorated Authorization Fee
($/500kHz/Month)
No 1 $18,000 $1,500
Yes 1/3 $6,000 $500

Where more than one Canadian service provider is authorized to use the spectrum associated with a given mobile satellite network, the proposed fee for an individual service provider would be 1/2 the authorization fee for the network.

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4.0 Invitation to Comment

To permit the Department to assess the impact of this fee for the use of MSS spectrum above 1 GHz in Canada, interested parties are invited to submit their comments on the following points:

  1. The impact this change in licensing approach may have on the provision of mobile satellite services in Canada.
  2. The appropriateness of the proposed annual fee in reflecting the economic value of the spectrum resources.
  3. The suitability of using a minimum bandwidth of 500 kHz with increments of 500 kHz as the basis for assessing the fee for any particular network.
  4. The proposed reduction of licence fees where sharing of a common band of radio frequencies among two or more service providers is required.

After the Department has reviewed all the responses, and incorporated any necessary changes, the Department will adopt an appropriate licensing approach and set the fee pursuant to section 19 of the Department of Industry Act.

5.0 Instructions for Filing

To facilitate the processing of comments, submissions should be sent to the Director, Space and International Regulatory Activities, Radiocommunication and Broadcasting Regulatory Branch electronically via the Internet at:

DSIR@ic.gc.ca

Submissions in response to this Canada Gazette Notice may also be addressed to:

Director, Space and International Regulatory Activities
Radiocommunication and Broadcasting Regulatory Branch
300 Slater Street, 15th Floor
Ottawa, Ontario
K1A 0C8

All submissions should cite the Canada Gazette Part I Notice publication date, title and Notice reference number. To ensure there is time to consider all comments, submissions should be received at the above address within 60 days from the publication of this Notice in the Canada Gazette.

The Department will endeavour to post all responses on its Internet website as soon as they are received.

6.0 Public Access

All submissions received in response to this Notice will be made available for viewing on Industry Canada's website noted below. The responses will also be made available for viewing by the public during normal business hours at the Industry Canada Library, 235 Queen Street, West Tower, 3rd Floor, Ottawa, Ontario, and at the offices of Industry Canada in Moncton, Montreal, Toronto, Winnipeg and Vancouver, for a period of one year from the close of comments.

Industry Canada's Spectrum Management and Telecommunications website is http://www.ic.gc.ca/spectrum.


1 A service provider is a Canadian entity that has an arrangement with the operator of a satellite network for access to satellite capacity for the provision of service in Canada.

2 Assigned spectrum means the specific portion of a radio frequency band or bands that a service provider or network is authorized to use in Canada.

3 Generally, this term relates to the sharing of assigned spectrum. See also Footnote 2.

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