Background Information

Local Multipoint Communications Systems

What is LMCS?

Local Multipoint Communications Systems (LMCS) is a broadband wireless telecommunications common carrier service in the 28 GHz range that will be capable of carrying basic and advanced communication services such as "wireless" cable TV, Internet access, video teleconferencing and various other multimedia.

A central transmitting/receiving station will handle signals to and from homes and businesses within a 4-5 km radius. Several such stations will be required in each city to service the total geographic area. Homes and businesses will send and receive the signals through equipment consisting of a small unobtrusive "pocketbook sized" antenna plus the associated electronics which are about the size of a television converter.

Competition in Telecommunications

A key aim of the policy measures adopted by Industry Canada is to foster diversity of choice for Canadian consumers and businesses. These entirely new, independent, local networks for telecommunications services will be able to compete with existing networks.

Why was LMCS licensed in October 1996?

Canadians have been asking for more choice in the provision of telecommunications and broadband distribution services in the home and workplace. The use of home computers is increasingly widespread and Canadians are demanding cost-effective alternatives for the provision of high-capacity links to the outside world. LMCS will be able to deliver on both these points. Canadian interests will be best served by staying at the forefront of this technology.

Why is the second round LMCS licensing delayed?

LMCS is an innovative, leading edge service. The LMCS markets worldwide are being developed at a slower pace than expert's predictions. Many factors contribute to that: the lack of availability of equipment at a reasonable cost, the ongoing evolution of technology, as well as delays of similar licensing initiatives in the US and other countries.

LMCS Principal Policy Elements

Spectrum

Through public consultation it was decided to have six blocks available for LMCS in Canada. Blocks A and B were made available via a comparative process in the first licensing round.

Eligibility

For the first licensing round, eligibility to apply was limited to companies that were not telephone companies, cable companies or an affiliate. This was intended to ensure that consumers have choice in the provision of broadband telecommunications facilities.

Licensing Policy

Licensing was done by service areas which have been established by Industry Canada and the applicants were licensed as telecommunications carriers with no limitations on carriage or services to be offered. A licence fee of $0.50 per household was applied and subject to revision.

Selection and Licensing Process

The Comparative Process

Under the Radiocommunication Act, the Minister of Industry may issue radio authorizations taking into account all matters he considers relevant to ensure the orderly establishment, development and efficient operation of radiocommunications in Canada.

Where the demand for spectrum exceeds the supply, the Minister considers the merits of competing applications in a comparative process. This process is usually conducted in three phases: an expression of interest; the filing of detailed submissions; and, detailed site applications for the successful applicants.

At the same time as the release of the final policy for LMCS, the Department issued a call for applications announcing that it would use a comparative process to select licensees for blocks A and B. Thirty-five companies responded with expressions of interest by the April 1, 1996, deadline. Names of the respondents were published. This allowed companies to form alliances and assess their positions.

Fourteen companies submitted detailed submissions by the , due date. These were evaluated by a committee of departmental experts. Their findings were reviewed by a second committee of senior managers of the Department before being reported to the Minister, decided which applicants were to be licensed under the authority granted to him by the Radiocommunication Act. As these decisions were taken by a Minister of the Crown accountable to, and under authority granted by, the Parliament of Canada, there was no appeal mechanism as is typically the case for decisions taken by independent regulatory agencies.

Evaluation

The evaluation criteria were drawn directly from the policy and call document released on , by the Minister. The areas of evaluation include:

  • Competitive Strategy,
  • Innovation,
  • Research and Development and Economic Benefits,
  • Coverage, and
  • Demonstrated Competencies.

Only the written information supplied by the applicants is considered and departmental officials are placed under strict ex-parte contact rules. This ensures procedural fairness to all applicants.

For additional information please call:
Patrick Carrey
613-991-0179

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