Archived—Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7° W Longitude Orbital Position

December 13, 2000
Spectrum Management and Telecommunications Policy

Table of Contents


Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7° W Longitude Orbital Position
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1. Introduction

This paper, announced in the Canada Gazette on December 16, 2000 in Notice No. DGRB-008-00, commences an administrative comparative licensing process to facilitate the timely development and operation of fixed satellite space stations in the 118.7° W longitude orbital position to provide a range of advanced services to Canadians in all regions of Canada, including the North.

On October 22, 1999, Industry Canada published a call for expressions of interest entitled Call for Expressions of Interest to Develop and Operate a Fixed Satellite Space Station in Orbital Position 118.7° W Longitude to Serve the Canadian Market and Beyond (Gazette Notice DGRB-015-99). Further to the Call for Expressions of Interest, by means of this Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7° W Longitude Orbital Position, Industry Canada is inviting interested parties to submit applications to develop and operate fixed-satellite space stations using the 118.7° W longitude orbital position. Industry Canada will use an administrative comparative selection process to award two licences, one to authorize the use of the C (6/4 GHz) and Ku (14/12 GHz) bands at the 118.7° W position and the other to authorize the use of the Ka (29/19 GHz) band at the 118.7° W position.

In the Call for Expressions of Interest, Industry Canada announced that it had received an expression of interest for the use of the conventional C and Ku bands at the 118.7° W orbital position, and that it was inviting additional expressions of interest in the development of the position from other parties to determine whether a competitive licensing process should be used to determine the award of a licence. On December 15, 1999, the Department received three additional expressions of interest for use of the orbital position. From the submissions received, the Department has concluded that there are significant competing interests in developing a fixed-satellite space station and hence that a competitive process is required.

While the Call for Expressions of Interest applied to the conventional C and Ku frequency bands allocated to the fixed-satellite service (FSS) at the 118.7° W position, some of the respondents have since indicated an interest in developing and operating satellites using Ka band spectrum as well. Canadian access to Ka band spectrum at this orbital position is conditional upon meeting the designated in-service date related to its satellite filings with the International Telecommunication Union (ITU). Given the level of interest expressed by some parties, and to ensure that this valuable Ka band spectrum is made available for the provision of advanced satellite services to Canadians, the Department is including the Ka band in this licensing process.

1.1 Selection of Licensing Process

As indicated in the Call for Expressions of Interest, subject to the level of interest or demand for the use of the 118.7° W orbital position, a competitive licensing process would be initiated. Given the level of interest also expressed in using the Ka band, the Department has concluded that it would be most efficient to award two licences, one for the use of the C and Ku bands at 118.7° W, and the other for the Ka band by means of a single licensing process. The Call for Expressions of Interest also invited comments on the competitive process to be used, an auction or an administrative comparative review process. Having given due consideration to the comments received on the type of process to be used and to the nature of the public policy objectives to be achieved by means of awarding licences, the Department has concluded that the comparative process is the most appropriate choice.

1.2 Application and Selection Process

Applicants should familiarize themselves with the policy provisions, objectives and potential licence conditions described in the following sections, and should use them as a guide in the preparation of applications for submission to the Department. Applicants must clearly identify which licence they are applying for in their application. Applications for each licence will be assessed independently from other applications. As a consequence, those applicants wishing to apply for more than one licence must submit a separate application for each licence. Details regarding the submission of applications are provided in section 6 of this paper.

Industry Canada reserves the right to request additional information for the clarification or resolution of issues arising from the evaluation of the detailed applications. Any such requests will be made in writing to the applicants, and responses from the applicants must be provided in writing within a specified time frame.

The Department will analyze and evaluate all applications based on the policy objectives set out in section 4. This evaluation will then be used to formulate advice and recommendations to the Minister of Industry concerning the quality of the applications, the satellite operators to be selected and the final conditions of licence. The Minister ultimately decides how many licences will be issued, to whom and on what conditions, based on the contents of this document, the advice and recommendations of the Department and other factors considered relevant. The Minister's decision will then be published.

Direct contact with departmental officials concerning the merits of any application will not be entertained during the selection and licensing process. This does not limit contact with departmental officials concerning the process in general or for other unrelated issues.

All costs associated with the preparation of applications are and will remain the responsibility of the applicant. The Minister accepts no liability for any or all costs and expenses incurred by applicants in responding to this Call for Applications, or in connection with any meetings or interviews. Each applicant who responds to this Call for Applications shall prepare and submit the required material at its own expense and with the express understanding that it cannot make any claim for reimbursement from the Government of Canada.

2. Background

The Canadian FSS market for Canada-International telecommunications traffic (except for Canada-US) was opened for competition in December 1998, a year ahead of Canada's commitment under the World Trade Organization (WTO) Agreement on Basic Telecommunications. The domestic and Canada-US cross-border fixed-satellite market was opened to competition from foreign satellites on March 1, 2000. In keeping with Canada's WTO commitments, Telesat's monopoly on the provision of FSS facilities for the carriage of domestic and Canada-United States traffic ended on March 1, 2000, two years ahead of schedule. With the end of Telesat's monopoly, other qualified Canadian radiocommunication carriers are now eligible to hold licences for Canadian fixed-satellite space stations.

Canada currently has available for assignment two orbital positions on the geostationary arc at 114.9° W and 118.7° W longitude for satellites operating in the conventional C and Ku bands allocated to the FSS. The right to use any orbital position is acquired through the successful application of the procedures found in the ITU Radio Regulations, including frequency coordination of the satellite system with the operators of other satellite systems potentially affected by the proposed operation. In 1988, the Department concluded a trilateral arrangement with the United States and Mexico on the use of four orbital positions, including the 118.7° W orbital position respecting the use of the C and Ku bands, and sought the international recognition and protection of this position for Canadian fixed-satellite systems through the ITU regulatory process. Canada has also sought the international recognition of the use of the Ka band at the 118.7° W orbital position through the ITU regulatory process1.

In November 1997, Telesat Canada was given an approval to replace its two Anik E satellites with Anik F satellites using the 107.3° W and 111.1° W orbital positions. Telesat has also been given an approval in principle to allow it to utilize the remaining two Canadian orbital positions, at 114.9° W and 118.7° W longitude, on an interim basis once the Anik F satellites are in service. Permitting Telesat Canada to use these positions will benefit users of fixed-satellite services in Canada by providing additional satellite capacity. In this context, Telesat recently received approval to relocate its Anik E1 satellite to the 118.7° W orbital position after the Anik F1 satellite is in service and until such time as another satellite operator authorized by Industry Canada is ready to use it.

Radio Systems Policy 008 (RP-008), Policy Framework for the Provision of Fixed Satellite Services, dated December 1998, outlines the policies to access the various components of the Canadian FSS market. This FSS Policy Framework states that upon receiving an expression of interest for the C and Ku bands from a qualified applicant for a space station in one or both of the remaining two C and Ku band orbital positions, the Department will initiate a competitive process to award a licence. For the Ka band, the FSS Policy Framework indicated the Department would consider using a Call for Expressions of Interest to determine the need for a competitive process. The Department received an application to use the C and Ku bands at the 118.7° W position, and as the first step in determining the need for a competitive licensing process, Industry Canada issued the Call for Expressions of Interest to Develop and Operate a Fixed-Satellite Service Space Station in Orbital Position 118.7° W Longitude to Serve the Canadian Market and Beyond to invite additional interest from Canadian industry.

With the potential assignment of licences in this licensing process, only the 114.9° W longitude orbital position would remain available. Upon receiving an expression of interest, the Department would begin a competitive licensing process for its assignment in accordance with established departmental policy.

3. Spectrum Utilization Policy and Coordination Requirements

3.1 Spectrum Allocation

A table of spectrum allocations pertaining to the spectrum to be licensed, extracted from the current Canadian Table of Frequency Allocations, is provided in Appendix A of this paper. Applicants should also consider Gazette Notice DGTP-008-00 concerning Proposed Revisions to the Canadian Table of Frequency Allocations, released on July 14, 2000, as a number of proposed revisions concern the spectrum resources described in this Call for Applications.

3.2 Spectrum Utilization Policy

(a) Conventional C Band. Fixed-satellite systems using the bands 3700-4200 MHz and 5925-6425 MHz share the spectrum on a co-primary basis with fixed service systems used for point-to-point applications in accordance with the Department's Spectrum Utilization Policy, SP 1-20 GHz, Revisions to Microwave Spectrum Utilization Policies in the Range of 1-20 GHz (SP 1-20 GHz).

(b) Conventional Ku Band. The conventional Ku bands 11.7-12.2 GHz and 14-14.5 GHz are allocated on a primary basis to the fixed-satellite service.

(c) Ka Band. In Canada, the Ka band satellite spectrum includes the service bands 17.7-20.2 GHz and 27.5-30.0 GHz. The bands 19.7-20.2 GHz and 29.5-30.0 GHz are allocated on a primary basis to the fixed-satellite and mobile-satellite services. In the band 17.7-19.7 GHz, the FSS has a co-primary allocation with the fixed service and shares access to the spectrum with fixed systems authorized in accordance with SP 1-20 GHz. There are currently a number of fixed services in the band 17.7-19.7 GHz. The FSS also has a co-primary allocation with the fixed service in the band 27.5-29.5 GHz. However, the band 27.5-28.35 GHz has been designated for Local Multipoint Communication System (LMCS) applications in the fixed service, with limited access by the FSS.

The Department granted its approval for three proposed Ka band multimedia satellites to use the service to customer (service link) bands 19.7-20.2 GHz and 29.5-30.0 GHz, and to develop feeder link/gateway operations using the bands 18.3-18.8 GHz, 28.35-28.6 GHz and 29.25-29.5 GHz. These approvals align with recent decisions by the Federal Communications Commission (FCC) of the United States which facilitate Geostationary Satellite Orbit (GSO) FSS access to the Ka band. A future consultation paper, scheduled for release by the Department early in 2001, will address a number of spectrum policy decisions required to implement fixed-satellite services in the Ka bands including non-GSO satellite and feeder links for mobile satellite services. Given that the bands 19.7-20.2 and 29.5-30 GHz will be used for service links in the approved Ka band satellites, and the bands 18.3-18.8 GHz, 28.35-28.6 GHz and 29.25-29.5 GHz will be used for feeder links/gateways, the Department will include in this consultation paper a footnote for inclusion in the Canadian Table of Allocations giving guidance for GSO FSS multimedia satellites as follows:

CXX (CAN-01) Geostationary orbit fixed satellites (GSO FSS) providing multimedia service to customers (service links) in the bands 19.7-20.2 GHz and 29.5-30.0 GHz will use spectrum for feeder link (gateways) in the bands 18.3-18.8 GHz (space-to-Earth), 28.35-28.6 GHz (Earth-to-space) and 29.25-29.5 GHz (Earth-to-space).

3.3 Frequency Coordination Requirements

3.3.1 Overview

Further to the general context presented in section 2 of this document, the domestic and international regulatory environment for Canadian space stations is a complex one involving bilateral and trilateral umbrella frequency sharing arrangements and specific coordination agreements. These arrangements and agreements are undertaken within the context of the ITU Radio Regulations which, amongst other things, require that every satellite network in these frequency bands be coordinated with other potentially affected satellite networks to ensure that harmful interference is not caused to, or received from, existing or planned satellite networks. During the coordination process, it is likely that certain operational restrictions will be required of the satellite network to achieve compatibility with other satellite networks.

3.3.2 International Satellite Network Coordination

Industry Canada will assist successful applicants to effect the international coordination of their satellite networks with the satellite and terrestrial networks of other countries. Within the framework of the ITU Radio Regulations, the Department will attempt to achieve the most favourable conditions possible during this process, but the nature of the coordination agreement is very much dependent on the nature of the proposed network and the expertise that the successful candidate brings to the negotiation table. Industry Canada cannot provide any assurance or guarantee as to the ultimate success of the coordination process, nor foresee any limitations or restrictions that may need to be placed upon the satellite network as a result of the coordination process. Appendix B provides some additional overview of the international regulatory framework for Canadian satellites in the North American context.

3.3.3 Domestic Satellite Network Coordination

As with international satellite networks, the licensee will be required to coordinate the satellite network with potentially affected Canadian satellite networks.

3.3.4 Earth Station Coordination

Domestic and international coordination of earth stations in Canada communicating with the satellite are carried out as part of the licensing process for earth stations as described in the Department's Client Procedure Circular 2-6-01 (CPC-2-6-01), Procedure for the Submission of Applications to License Fixed Earth Stations and to Approve the Use of Foreign Fixed-Satellite Service (FSS) Satellites in Canada.

4. Satellite Policy Objectives and Application Information Requirements

4.1 General Satellite Policy Objectives

Industry Canada continues to be guided by the telecommunications policy objectives set out in section 7 of the Telecommunications Act. In particular, the geostationary satellite orbital position described in this Call for Applications is considered a valuable resource that should be used to provide reliable and affordable telecommunications services to Canadians in all regions of Canada, including the North. As such, the use of this orbital resource must support Canadian broadcasting and telecommunications requirements, and the fixed-satellite space stations to be authorized must be able to provide a wide range of basic and advanced communications services, and ensure that Canadians in all regions of Canada have access to these services at affordable prices. Additionally, Canadian access to the orbital resources is time limited by the first-come, first-served nature of the ITU filing process, and as such, satellites authorized in this licensing process must be deployed in a timely manner.

With the implementation of its WTO commitments, Canada has liberalized access to the Canadian market to the use of certain types of foreign satellites, including FSS satellites. As guided by the Canadian telecommunications policy objectives, the licensing of Canadian FSS satellites should be carried out in a manner that will enhance the competitiveness, at the national and international level, of Canadian telecommunications. To this end, this licensing process should foster the development of a satellite infrastructure to allow Canadian satellite operators and satellite service providers to advance their service offerings in the domestic market and to compete in the larger North American market.

4.2 Objectives and Application Information Requirements

The following are Canada's satellite policy objectives applicable to the orbital resources to be licensed in this process and the corresponding required information against which applications will be evaluated. Accordingly, applicants are encouraged to address these objectives in their detailed applications in the most complete manner possible.

4.3 Mandatory Requirements

4.3.1 Eligibility

The licence holder must conform on an ongoing basis with the Canadian ownership and control requirements of a radiocommunication carrier as set out in section 10(2)(d) of the Radiocommunication Regulations.

(a) Eligibility to Participate. Although comments were not sought in the Call for Expressions of Interest, two of the respondents suggested limiting eligibility to participate in the licensing process. Specifically, these respondents felt that Telesat and its affiliates should not be eligible to participate in the licensing process due to Telesat's dominance as a supplier of FSS capacity in Canada. They argued the necessity of having an alternate Canadian carrier of FSS capacity to ensure that the Canadian policy objectives of the Telecommunications Act are met. One of the respondents contended that Telesat has, in fact, market dominance in the northern regions of Canada and that this power can be leveraged to create market power throughout the other regions of the country. Both respondents asserted that the policy objective of the 'enhancement of competition' and of 'service to Canadians in all regions of Canada, including Northern Canada' would best be served by a second Canadian carrier of fixed-satellite services.

Industry Canada has considered these comments and analyzed the available fixed satellites capable of providing full coverage of Canada. At present, there are more than 40 satellites in geostationary orbital positions which are capable of providing fixed-satellite services to large areas of Canada. Several of these satellites provide significant coverage of northern portions of Canada, with a more limited number providing coverage of all of Northern Canada. It is Industry Canada's view that there is sufficient potential for competition in the Canadian marketplace, being open to the use of foreign licensed space stations, to ensure a competitive marketplace will develop with a choice of services and service providers.

As well, Industry Canada has required Telesat to deploy satellites which provide coverage of all regions of Canada, including Northern Canada, in order to ensure reliable and affordable satellite services of high quality to Canadians. It would now be inappropriate for Industry Canada to prohibit Telesat's participation in the licencing process of an orbital position, based upon any perceived market dominance or advantage which these extended coverage patterns may provide.

It is the opinion of Industry Canada that there have been no compelling reasons presented which would indicate that Telesat should be restricted from participating in this licensing process. Consequently, Industry Canada will permit any potential applicant which complies with the requirements as set out in this document to participate in the licensing process.

Additionally, in subsequent correspondence to the Department, one of the respondents requested clarification of the policies regarding eligibility to participate in the licensing process. The respondent presented an interpretation, from the Call for Expressions of Interest paper, that Industry Canada would restrict participation in the licence assignment process to those entities who have made a submission of an expression of interest in response to the Call. The main purpose of the Call for Expressions of Interest was to determine the level of interest in the position, and consequently whether a competitive process would in fact be required. Therefore, the Department will accept applications from all interested parties responding to this Call for Applications.

(b) Information Requirement. As a mandatory requirement, applicants must submit documentation related to their eligibility to hold a licence indicating that the applicant, or the entity that will hold the licence, conforms with the Canadian ownership and control requirements for radiocommunication carriers within the meaning in the Radiocommunication Regulations. All applicants must submit the Declaration of Ownership and Control of the Applicant (see Appendix C) and all documents listed therein with their application, and must promptly provide any information subsequently requested by the Department.

The Department will review these ownership and control documents as part of the evaluation of applications. In the event that an applicant does not, in the opinion of the Department, comply with the Canadian ownership and control requirements, the Department will require that the applicant make changes within a very short time frame, to be specified, taking into account the nature of the changes required, in order to become compliant.

If an applicant fails to comply with the Canadian ownership and control requirements within 30 days of being notified by the Department of any deficiencies, then the applicant will forfeit its right to have its application considered further in this licensing process.

4.3.2 Timely Deployment of Satellite Facilities

The spectrum and orbital position to be made available in this licensing process are valuable public resources which must be used in ways which serve the Canadian public interest. While the Department recognizes that a variety of different business plans may be employed in the construction and coordination of a satellite, and that a reasonable amount of time must be expected to permit such plans to be implemented, Canadian access to the orbital position is time limited by the first-come, first-served nature of the ITU filing process. Specifically, each filing with the ITU has an associated in-service date, beyond which Canadian rights to access the position expires in the event no corresponding satellite is implemented.

(a) Milestones. Given the value of the orbital position to Canada, it is necessary to ensure that the successful applicants make timely progress towards the launch and operation of new satellites that will meet all Canadian requirements. As such, the successful applicants will be required to meet certain implementation milestones by the respective dates set out in the following table.

Table of Implementation Milestones
Milestone C and Ku Bands Ka Band
1 Submission of final design specifications to Department for approval. 4 months after successful applicant announced 7 months after successful applicant announced
2 Final signature of contracts for (1) the construction of the satellite and (2) the launch of the satellite into its authorized orbital position by Milestone 3. 6 months after successful applicant announced 9 months after successful applicant announced
3 Placement of the satellite into its authorized orbital position. December 22, 2003 May 14, 2005

The first implementation milestone will be the submission of the final satellite design specifications to the Department to demonstrate that the new satellite will be capable of meeting Canadian coverage requirements, as well as all commitments made in the application regarding capacity and services to users and service providers in Canada.

The second milestone is the award of contracts for the construction and launch of a new satellite. It should be noted that, before entering into a contract for the procurement of this satellite, the successful applicant must demonstrate to the Department that the construction of the satellite will be completed in time to meet later project milestones. Such a demonstration may include, for example, a showing of the obligations the applicant will impose on the satellite manufacturer and launch service provider to ensure project milestones are met. Also, before entering into a procurement contract, the successful applicant must demonstrate to the Department that it has made fair and reasonable efforts to promote Canadian manufacturers, designers, and suppliers of telecommunications components in the construction of the satellite facilities. Finally, once this second milestone has been met, the successful applicant will be required to submit to the Department the administrative due diligence information, as set out in the ITU's Resolution 49 (Rev. WRC-2000), Administrative due diligence applicable to some satellite radiocommunication services, in a form acceptable to the ITU.

The third milestone requires that a satellite be in its proper orbital position ready to commence commercial operation by the date shown in the table regardless of which ITU filing is used as a basis for a submission in response to this Call for Applications. Applicants should note that the dates presented in the above table also represent the in-service dates as established by Canada through an initial filing of information with the ITU including the extensions permitted pursuant to the ITU Radio Regulations and Resolution 51 (Rev. WRC-2000), Transitional arrangements relating to the advance publication and coordination of satellite networks. These in-service dates correspond to Canada's pending CANSAT 7 filing, for C and Ku band, and to Canada's CANSAT KA-5 filing, for Ka band. Effectively, if no satellite is implemented by the milestone dates shown in the table, the corresponding filings for the 118.7° W position would expire.

(b) Interim Use of C and Ku Band at 118.7° W. It is recognized that the design, development, construction and launch of a new satellite is a lengthy process, typically taking two to three years to complete. In order to meet the ITU deadlines, applicants may wish to consider, as part of their plan to be presented in their application, the deployment of interim satellite facilities in advance of deploying a new satellite. The operation of any such interim facilities would be permitted after Telesat Canada (see section 2) is provided an appropriate transition period to transfer its operations to another satellite and/or orbital position.

(c) Information Requirement. Applicants must identify their major project milestones, with expected dates of completion, which will lead to the deployment of new operational fixed-satellite facilities to provide service to Canadians. Applicants should also indicate any steps they will take and any assurances that can be provided to ensure timely deployment, including any obligations they plan to impose on the manufacturer of their satellite and the launch service provider to ensure that the applicants' project milestones are met.

Industry Canada will also give consideration to interim measures to be used prior to the launch of a new satellite to provide the most rapid possible introduction of additional satellite services to users and service providers in Canada. To this end, applicants must clearly identify, if any, such interim measures they intend to undertake and clearly indicate their potential impact on the anticipated date for commencement of commercial service.

To be considered further in the application process, applicants must provide a credible plan for the timely deployment of new satellite facilities, including if applicable, the use of interim satellite facilities, that will meet all mandatory requirements and commitments to provide capacity and service, while ensuring that the Department's essential milestones are met.

4.3.3 Operational Requirements for the Satellite

(a) Canadian Coverage. The full coverage of Canada from this orbital position is of utmost importance to the Department. Thus, a Canadian satellite network operating from this orbital position must have a service area that includes all regions of Canada visible from the space station. To this end, the satellite design must be able to provide a similar grade of commercial service in all regions of Canada, including Northern Canada. As a minimum, the satellite coverage in each of the frequency bands authorized must include, to the extent visible from the satellite, all provinces and territories in Canada. Under section 4.4.1 of this document, applications will also be evaluated on how well the coverage of Canada is to be implemented to serve users and service providers in all regions of Canada, including those underserved areas where access to advanced services in not available by other means.

(b) Compliance with ITU Regulatory Requirements. The satellite networks to be licensed pursuant to this process must comply with the operational and technical provisions contained in the ITU Radio Regulations.

(c) Compliance with Coordination Agreements. It should be noted that Canada has maintained certain international rights to operate FSS space stations in the 118.7°W longitude orbital position through filings with the ITU. A copy of the corresponding ITU coordination publications related to the spectrum being made available in this process, as described in Appendix B, can be found on the Industry Canada Web site at http://www.ic.gc.ca/SSG/sf01692.html. To ensure the continuation of Canada's international rights with regard to this orbital position, this information, or a modification to the filings, will be used as the basis for international coordination and for this licensing action. The successful applicant will be required to ensure that the operation of the satellite conforms with any agreements undertaken by Canada with respect to the international coordination of the satellite, as well as with any arrangements made to facilitate domestic satellite coordination.

(d) Information Requirement. To demonstrate that the applicant will be able to fulfill the operational requirement set out in items (a) to (c) above, applicants must provide sufficient technical information on, and analyses of, their proposed satellite network design, including any plan to use interim satellite facilities, and must describe the essential technical and operating parameters of the proposed satellite; the limits of the service area and the relative signal strength throughout the service area; the overall satellite capacity; related earth station technical characteristics and link budgets; and the number and types of users that can be supported by the satellite. Any applicant proposing to modify the existing ITU filings, as already submitted by Industry Canada, will be required to submit a complete technical and interference analysis of the impact of such modifications on other existing or planned satellite networks as may be required by the ITU Radio Regulations. All applicants must also commit to providing, if successful with their applications, sufficient resources and expertise as may be necessary to complete the frequency coordination process.

To be considered further in the selection process, applicants must demonstrate that their proposed satellite facilities will provide the required coverage of Canada while demonstrating an ability to satisfy all other mandatory requirements.

4.4 Requirements Subject to Evaluation

4.4.1 Ensuring Service and Capacity are Offered to Meet Canadian Needs

Over the years, the Government of Canada has made it a priority to ensure that an effective satellite infrastructure is in place which is capable of offering advanced, affordable and reliable satellite services to Canadians in all regions of Canada including northern Canada. This most important priority was reaffirmed in the FSS Policy Framework, which provided the general policy for the development of satellites in the Canadian orbital positions using C, Ku and Ka frequency bands. Ensuring that advanced satellite services and capacity for users and service providers in Canada, and particularly to those in underserved areas where there is no access to advanced services by other means, will therefore be a very important objective of this licensing process.

It is expected that the successful applicants in this licensing process will act as Canadian telecommunications common carriers, as defined in the Telecommunications Act, and that these satellite carriers will provide advanced services to meet the needs of the existing and emerging satellite telecommunications and broadcasting infrastructure in Canada and beyond. The Canadian orbital positions are well suited to provide fixed-satellite services in the Americas. However, it is imperative that sufficient capacity be available to meet the service needs of users and service providers in Canada today and in the future. Should capacity remain available after Canadian needs are met, the licensee would be permitted to assign such excess capacity for services outside Canada.

(a) Satellite Capacity and Service Offerings in the C and Ku Frequency Bands. It is anticipated that the North American market for fixed-satellite services will grow significantly over the next few years, and it is reasonable to project that a significant portion of the Canadian C and Ku band satellite capacity would be required for the telecommunications and new broadcasting needs of users and service providers in Canada. Some of the FSS capacity requirement will be satisfied by foreign satellites, yet an important consideration for Industry Canada is to ensure that the FSS needs of users and service providers in all regions of Canada are met. To this end, in addition to the Canadian coverage requirement outlined in section 4.3.3, the applicant must commit to serve Canadian needs for transmission capacity in all regions of Canada over the life of the satellite. The applicant, as a satellite carrier, must ensure that this capacity is available, on a non-discriminatory basis, to meet Canadian needs and indicate the process to be used to make such capacity available.

(b) Satellite Capacity in the Ka Frequency Band. The use of Ka band satellites is emerging as a technology well suited to the delivery of interactive multimedia and broadband Internet access services to Canadians. These satellites will provide a unique opportunity to Canadian satellite carriers and service providers to deliver advanced and innovative broadband services to Canadian consumers and businesses, including those who may not have access to other forms of connectivity such as cable modems, digital subscriber lines and other wireless services.

It is envisioned that the design of the Ka frequency band payload will utilize high-power spot beams, frequency spectrum re-use, and dedicated spectrum for service links and for feeder links which will result in an efficient and high capacity satellite design. It is expected that a significant portion of the Ka frequency band payload on a Canadian satellite will be dedicated to providing service in all regions of Canada and that some capacity will be provided beyond Canada. However, it remains a priority of Industry Canada to ensure that the needs and requirements of users and service providers in Canada can be accommodated. Consequently, in addition to the coverage requirements outlined in section 4.3.3 above, the design of the Ka frequency band payload on a Canadian satellite must maximize the capacity available to meet the requirements of users and service providers in Canada for the delivery of advanced communications services such as interactive multimedia and broadband Internet access. This maximized Canadian capacity must be available, on a non-discriminatory basis, to meet the current and future needs of users and service providers in Canada.

(c) Information Requirement. Given the emphasis the Department will place on ensuring that service and capacity are offered to meet Canadian needs, applicants should submit business, technical and operational plans, indicating any major assumptions upon which the plans rely, that fully demonstrate to the Department the ability to deploy and operate their proposed satellite facilities, including any proposed interim satellite facilities, in support of the objectives set out in this section. This information should include, but need not be limited to, the following:

  • how the satellite design and coverage will be implemented to support coverage of all regions of Canada and the allocation of capacity for Canadian use, and how it will support a similar grade of service for the intended product and service offerings throughout Canada;
  • the amount of satellite capacity the applicant will allocate for the Canadian market over the lifetime of the satellite and a description of the process to be used to ensure this capacity is available;
  • the extent to which satellite capacity will be available for use outside Canada, and any provisions for making such capacity available for use by users and service providers in Canada over the life of the satellite;
  • market projections for the industry as a whole within the service area of the proposed satellite, and for Canada (include a forecast for the applicant's market share in Canada and in the larger service area);
  • how the proposed satellite will be used to provide a range of satellite service offerings in a competitive and affordable way to users and service providers in Canada (include details of any intended product or service offerings and related earth station equipment and availability);
  • how proposed offerings would meet unforeseen needs, existing needs in a new or improved manner, or demands not currently being adequately satisfied;
  • the wholesale and retail marketing and distribution plans for satellite services to users and service providers in Canada, especially to those located in underserved areas; plans should be supported by concrete marketing research and implementation strategies demonstrating the applicant's understanding of the challenges involved in the delivery of capacity and advanced services to users and service providers in Canada.

Industry Canada will favour applicants demonstrating well researched, realistic and financially viable business, technical and operational plans that fully meet the needs of users and service providers in Canada by providing:

  • the broadest possible coverage of all regions of Canada;
  • the greatest amount of capacity for Canadian use and the highest quality signals within the domestic coverage;
  • innovative advanced satellite services; and
  • viable plans for delivering and marketing capacity and services to users and service providers in all regions of Canada, including those in underserved areas.

4.4.2 Financial, Technical and Institutional Competence

Applicants should submit sufficient information in their business, technical and operational plans that will fully demonstrate to the Department an ability to deploy and operate their proposed satellite facilities. This information should include, but need not be limited to, the following:

  • the quantity and source of proposed financing, and the revenue and expense projections for the life of the satellite; plans should be supported with financial statements of the applicants and/or parent companies for the past three years; the assumptions respecting the revenue and expense projections should be clearly enumerated;
  • operational and technical experience and competence of the applicant, or how such expertise will be obtained for the procurement, coordination, launch and operation of the satellite, for the maintenance of effective control and operation of the satellite, and for related marketing and sales activities;
  • previous experience in telecommunications and related businesses, the abilities of its management and staff, and any arrangements or proposed arrangements with other companies or organizations, whether domestic or international, that would enhance the ability of the applicant to carry out the satellite project and to provide capacity and services to users and service providers in Canada.

Applicants demonstrating a credible ability to deploy the proposed satellite while ensuring their ability to fulfill all other requirements and commitments will be favoured.

4.4.3 Satellite Capacity for Public Institutions

A key component of Canada's Connecting Canadians plan is the development and use of advanced information and communications technologies to help make Canada a leader in the new knowledge-based economy. Canadian satellites are considered an essential element in the delivery of affordable access to broadband connectivity to Canadians. Furthermore, Canadians and in particular Canadian public institutions (e.g. education and health) in areas that do not have access to high speed services, including much of northern Canada, must also be able to access advanced connectivity services of quality and at prices comparable to their counterparts in areas of Canada where such services are available. To this end, the successful applicants will be required to direct a minimum of two percent of the gross adjusted annual revenue resulting from the operation of the satellites, including any revenue derived from the advanced sale or lease of satellite transponders or capacity, at serving public institutions in these underserved areas.

Information Requirement. Applicants should provide information in their business plans related to their commitments to provide satellite capacity and associated services for use by Canadian public institutions in underserved areas of Canada. This information should include, but need not be limited, to the following:

  • the value of the commitment for each year during the life of the satellite (this value should be expressed as both an absolute value and as a percentage of the expected gross adjusted annual revenue resulting from the operation of the satellite);
  • the extent to which the applicants have consulted or will consult with stakeholders (governments, communities, and public institutions) to develop collaborative service and pricing strategies that are responsive to the stakeholders needs;
  • the amount of satellite capacity and the types of services to be made available;
  • how the proposed pricing policy will be sensitive to the unique circumstances and needs of users in underserved areas;
  • how the applicant's plans will result in sustainable benefits for connected communities and public institutions and will contribute to advancing the government connectivity objectives for communities and public institutions in underserved areas of Canada.

Applicants demonstrating comprehensive and sustainable benefits that will meet the needs of public institutions in underserved areas of Canada will be favoured.

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