RP-020 — Guidelines on the Licensing Process and Spectrum Release Plan (2001 Edition)

December 2001

Amended by:

DGTP-011–01 Update of Guidelines on the Licensing Process and Spectrum Release Plan (2001 Edition) (December 2001)

Industry Canada
Radiocommunication Act

Notice No. DGTP-011–01 — Update of Guidelines on the Licensing Process and Spectrum Release Plan (2001 Edition)

The purpose of this notice is to announce a new edition, known as the 2001 Edition, of the above referred policy document to update the first edition published in October 1999. At the time of its initial publication, Industry Canada indicated that the spectrum release plan would be updated regularly to provide more certainty as to which spectrum resources were being considered for licensing. In addition, as proposed in the Framework for Spectrum Auctions in Canada, the Department indicated it would issue an updated forecast of certain types of spectrum to be released and the timing of future competitive licensing processes.

One of the highlights of the new Edition is a forecast on the release of additional spectrum for advanced mobile services including 3G. The Department wishes to use this policy paper to outline the steps in a work plan which will lead to the licensing of new spectrum.

The policy document also serves to update the spectrum resources (frequency bands and satellite orbital positions) for which first-come, first-served licensing will continue to be used and the spectrum resources for which the competitive licensing process will likely be used. The policy paper reflects the various spectrum policy and licensing decisions taken by the Department since the Spectrum Release Plan was issued in 1999. A competitive licensing process will typically be considered in situations where there is, or is likely to be, more demand for a particular spectrum resource than there is supply. The policy document provides a best estimate of certain types of spectrum to be released and the timing for initiating competitive licensing.

This Notice is available electronically as follows:

World Wide Web (WWW)
Spectrum Management and Telecommunications

or can be obtained in hard copy, for a fee, from:

Tyrell Press Ltd.,
2714 Fenton Road,
Gloucester, Ontario K1T 3T7,
email: sales1@tyrellpress.ca,
1–800–267–4862 (Canada toll-free telephone),
1–800–574–0137 (United States toll-free telephone),
(613) 822–0740 (Worldwide telephone),
(613) 822–1089 (Facsimile);

and DLS, St. Joseph Print Group,
45 Sacré-Coeur Boulevard,
Hull, Quebec K1A 0S7,
1–888–562–5561 (Canada toll-free telephone),
1–800–565–7757 (Canada toll-free facsimile),
(819) 779–4335 (Worldwide telephone),
(819) 779–2833 (Worldwide facsimile).

December 14, 2001

Michael Helm
Director General
Telecommunications Policy Branch

1.0 Foreword

In December 1997, Industry Canada carried out a public consultation to establish policy guidelines to clarify the licensing process used for traditional frequency bands for fixed, mobile, and satellite services. The Department believed it was timely to define spectrum resources and situations that would continue to use a first-come, first-served (FCFS) licensing process and those that would use a competitive licensing process (comparative selection or auction). It was stated that a competitive process would be considered in situations where there is, or is likely to be, more spectrum demand than resources available. The consultation also addressed situations in which the licensing approach may have to be altered from a FCFS to a competitive process due to excess demand or due to particular public interest objectives to be pursued.

In addition, as part of the Framework for Spectrum Auctions in Canada released in August 1998, Industry Canada proposed to develop a Spectrum Release Plan. The objective of this plan is to inform the Canadian industry and spectrum users, of new frequency resources that may be opened for competitive licensing in the near future.

In October 1999, as a result of these public consultations, Industry Canada announced in the Canada Gazette, Notice DGTP-004–99, the release of the first edition of the Guidelines for Licensing Process and Spectrum Release Plan which set out the spectrum resources, i.e., frequency bands and satellite orbital positions, and indicate the licensing process that would generally be used. This document provides a forecast of certain types of spectrum resources to be released, as well as the anticipated timing for initiating competitive licensing processes over a two to three year period. The Department has indicated that such a plan can only be a "best effort" forecast of spectrum to be licensed, and must be sufficiently flexible to adjust to spectrum demand, public interest, international and commercial developments, as well as other unforseen factors that may arise. This list of spectrum resources will be updated regularly to reflect changes in spectrum policies, demand for certain bands, and particular directions to advance competition and the public interest.

The Department is hereby providing an update of the policy document to be referred to as 2001 Edition. The Department also wishes to use this document to outline the steps of a work plan with milestones which will lead to the licensing of additional spectrum for advanced mobile services including third generation (3G).

2.0 Background

The traditional licensing approach used by Industry Canada has been to deal with most applications for fixed and mobile radio facilities and assign frequencies on a FCFS basis. This process is accomplished using an integrated spectrum management system that is comprised of existing spectrum allocation and utilization policies, licensing policies, radiocommunication regulations, and technical and radio system standards. It is this integrated spectrum management system that makes the coordination of spectrum users, their systems and frequency assignments possible. The end result is that a large number of users can be accommodated with an efficient use of limited spectrum. The FCFS approach is used in instances where there is sufficient spectrum to meet the demand in a given frequency band and where there is no additional measure required to advance particular telecommunications policy objectives. Industry Canada endeavours to deal expeditiously with several thousand radio applications each year, using the FCFS process. It should be noted that most industrialized countries also use the FCFS process for licensing the majority of their radiocommunication facilities, and rely on some form of competitive licensing process for licensing where demand exceeds spectrum availability.

As outlined in existing policies¹, the Department may choose to initiate a competitive licensing process in situations where there is, or is likely to be, more demand for radio frequency spectrum than the supply of spectrum available for use in a given frequency band or, where there is a need to pursue certain telecommunications policy objectives. A competitive licensing process would typically be supported by public consultation specific to that particular spectrum.

Since the mid-1980s, the Department has used competitive licensing in a number of cases, i.e., cellular radio, Personal Communications Services (PCS), Local Multipoint Communications Service (LMCS), broadband wireless at 24/38 GHz, 2.5 GHz Multipoint Communications Service (MCS), satellite orbital positions and where there were indications that there would be more demand than spectrum available. The Department has been experiencing a greater number of such cases where spectrum demand has exceeded supply. Factors contributing to this include new entrants wanting to provide local services, the increased desire to establish national systems, and some parties wishing to "stake a claim" for spectrum. For example, the opening of local competition in telecommunications and broadcasting distribution, and the availability of new spectrum and improved technology, have created significant interest in the deployment of local radio facilities.

3.0 Policy Guidelines on Use of Licensing Process

The Department continues to affirm the policy principle that the FCFS licensing process is not automatic and that in certain situations it may be necessary to suspend licensing on a FCFS basis and initiate a competitive licensing process. In order to clarify the licensing process for various spectrum resources and situations, Industry Canada has established the following licensing policy guidelines².

3.1 Majority of Cases for Continuing with the FCFS Licensing Process

The use of the FCFS licensing process will continue where Industry Canada believes spectrum supply is adequate to meet demand or a reasonable accommodation of all applications can be managed. This will generally apply to most point-to-point microwave systems and conventional land mobile systems where a modest amount of spectrum is required; individual land mobile frequency assignments; some point-to-multipoint applications; and to all satellite earth stations. These situations and frequency bands that will continue to be licensed on a FCFS basis are listed in Annex 1, which will be updated from time to time, as required, based on such factors as changes to spectrum policies and spectrum demand. It should be noted that Industry Canada reserves the right, and will give advance notice to interested parties, to change from one licensing process to another, if conditions change and for reasons affecting the orderly development of radiocommunication.

The utilization statuses of various frequency bands are set out in a series of Spectrum Utilization Policy documents and in some cases frequency bands may be under review through a public consultation process. The Department may rearrange a frequency band and introduce a moratorium on its future use in order to reassign the spectrum for other radio applications or initiate competitive licensing. For example, to advance rural telecommunications, the Department may first initiate licensing in rural areas on a FCFS basis, prior to opening the spectrum for competitive licensing in urban areas.

There may be situations where there is substantial interest for certain spectrum and a competitive process is necessary, for example, the licensing of New Party Cellular to provide service in unserved or underserved areas. Section 3.3 of this document discusses the situations in general where the FCFS process may be suspended and a competitive process may be initiated.

It should be noted that the FCFS licensing process is not automatic. There may be situations in licensing radio systems that, due to substantial spectrum demand, Industry Canada may suspend licensing on a FCFS and initiate a competitive licensing process.

3.2 Cases for Using a Competitive Licensing Process (Comparative or Auction)

Industry Canada will continue to identify, to the extent possible, the frequency bands or situations where there is, or could be, excess spectrum demand relative to supply or where there is a need to pursue certain telecommunications policy objectives. In these cases, a competitive licensing process using either a comparative selection or auction licensing approach, would be initiated according to the situation. In certain cases, it could be determined during the initial phase of a competitive process that sufficient spectrum is available to reasonably meet the needs of all applicants and that the licensing could therefore proceed on a FCFS basis. The Department would normally consult to establish the framework for a competitive radio licensing process.

In establishing the framework for a competitive radio licensing process, the Department may give regard to the objectives of the Telecommunications Act such as furthering competition in the provision of telecommunications or advancing service to all regions of Canada. As such, the Department may consider the use of policy provisions such as spectrum aggregation limits (spectrum caps), eligibility, spectrum set aside for new entrants and implementation milestones.

As a general rule, the frequency bands or situations where the Department foresees using a competitive licensing process (where there is, or could be, excess spectrum demand relative to supply), would include the following spectrum resources: most frequency bands for Multipoint Communications Systems (MCS) in urban areas; spectrum for public mobile telephone service; spectrum for broadband wireless access applications; fixed-satellite orbital positions; and other cases as they emerge. The specific bands and situations identified for using a competitive licensing process are listed in Annex 2. This list will be updated from time to time as required.

The Department is open to receiving expressions of interest for spectrum resources identified for competitive licensing in order to gauge the public interest in these frequency bands and to ascertain the availability of radio equipment. In some cases, the Department may solicit the level of interest in a given frequency band by inviting public comments through a notice in the Canada Gazette.

Where a band is used for both point-to-point communications and MCS, the Department may declare a moratorium on any further frequency assignments for point-to-point applications in order to determine the amount of spectrum to be designated solely for MCS applications.

3.3 Other Cases

Industry Canada will monitor FCFS licensing activities to determine where licensing activities could trigger excess demand for a frequency band. In such cases, Industry Canada would notify the industry that the traditional FCFS licensing process needs to be altered or will no longer be used for certain situations and Industry Canada may consider the use of a competitive process.

The Department continues to believe that the factors or trigger points identified in the 1999 edition of RP-020 (new technology with compelling service opportunities; a band nearing exhaustion (75% full); or a request for significant spectrum (25% of a band)), may represent only some of several criteria that could be used by spectrum managers to make a decision on whether to initiate a new licensing process. In addition, it is believed that certain situations may have varying criteria that would be required for the measurement of potential spectrum exhaustion. Therefore, the methods of measuring spectrum consumption, the level of spectrum resource exhaustion or potential exhaustion, will be kept flexible and under the oversight of the spectrum managers who can best assess the evolving spectrum environment. In certain cases, a competitive process may be triggered during the expression of interest phase of licensing, i.e., certain fixed-satellite service orbital positions or new party cellular licensing.

The FCFS licensing process has been used effectively to deal with cases of high demand for frequencies in spectrum-congested situations, such as is now being experienced in urban areas for land mobile service in the 150 MHz, 450 MHz and 800/900 MHz frequency ranges. The Department has actively managed assignments in these and other bands in order to accommodate as many users as possible. The licensing process must provide a means to reassign underutilized spectrum for immediate use and the Department intends to be very active in reclaiming this spectrum. In addition, it may be in the public interest to limit the number of frequency assignments for each licensee in a given band and area in order to accommodate a greater diversity of users.

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