Policy and Call for Applications — Wireless Personal Communications Services in the 2 GHz Range — Implementing PCS in Canada (sf09148)

9.5 Phase two — detailed submission

Detailed submissions must be filed with Industry Canada on or before September 15, 1995. By this date, applicants are to provide in writing sixteen (16) copies of their detailed submission and one (1) electronic copy of their detailed submission. Should an applicant consider portions of their detailed submission to be confidential, they are to provide in writing sixteen (16) copies of their confidential detailed submission, eight (8) copies of their non-confidential detailed submission, and one (1) electronic copy of their confidential and non-confidential detailed submission.Applicants are requested to identify the wordprocessing and graphic software utilized.⁵In the case of any discrepancies or questions with the submission, Industry Canada will use the written version of the (confidential) detailed submission as the definitive text.

Industry Canada will evaluate the detailed submissions based on the criteria described in this document. Further, the criteria identified herein should be clearly reflected in the submissions.

9.5.1 Financial capability

Financial capability is a significant factor in an applicant's ability to install and operate a new radiocommunication system, given the potential costs involved.Applicants who can demonstrate financial capability for the implementation of their system will be favoured for selection. All applicants must include the following information in their detailed submission:

• audited financial statements of the applicant for the past three (3) full fiscal years, if applicable;
• current interim financial statements;
• audited financial statements of the parent company or affiliates for the past three (3) full fiscal years, if applicable;
• a five (5) year business plan for the applicant and the proposed system, including detailed financial forecasts for this period, complete with the key underlying assumptions (in sufficient detail to enable verification of plausibility);
• evidence that other necessary financing is obtainable on reasonable terms and conditions, if applicable; and
• any institutional, economic and/or technical arrangements with other companies or organizations related to the development and provision of the service, if applicable.

Upon authorization by the Minister, successful applicants will be requested to stringently and clearly demonstrate that both they and any affiliated or related companies and organizations have the necessary financial resources (for example:cash, operating cashflow, irrevocable lines or credit, other sources of financing) to implement and operate the proposed system for the initial two (2) years. Any instrument of financing must demonstrate that, absent of material change in circumstances, the applicant is creditworthy. Failure on the part of any applicant to provide this information to the satisfaction of the Department within a reasonable period of time following authorization (such as 90 days), may result in the suspension or revocation of the authority pursuant to subsection 5(2) of the Radiocommunication Act.

9.5.2 Other capability

Applicants should demonstrate other capabilities supporting the delivery of their proposed PCS services such as, but not limited to, their technical expertise for both implementing the proposed PCS system and identifying/coordinating displacement of specific fixed stations, personnel in support of all aspects of system implementation, marketing, sales activities, and equipment availability. As evidence of such capability, applicants should include in their detailed submission their current capability and any institutional, economic and/or technical arrangements with other companies or organizations for the delivery of their proposed service.

9.5.3 Services

Applicants proposing demonstrably achievable yet highly innovative new services in addition to services that would also provide increased competition to existing services will be favoured. To this end, applicants should provide a detailed outline of the services they will be offering, clearly demonstrating their innovative or competitive aspects. The description should clearly indicate the types of services envisaged, including supporting evidence such as market studies, field trials, and any other information in support of their submission. Innovative concepts must be supported by concrete evidence of potential implementation without the requirement for extraordinary government intervention.

9.5.4 System implementation

Applicants who propose system implementation in a timely manner, offering the greatest coverage to the most people within the geographic area requested, while providing a plan for the orderly transition of existing licensees in the affected spectrum block, will be favoured. Specifically, applicants must outline their PCS system implementation plans for the initial five (5) years and include:

• a detailed description of each specific geographic area in which service would be offered (cities and interconnecting traffic corridors) and the respective populations of these areas — the description of the geographic areas and their respective populations may be as defined, for example, by the 1991 Census;
• an annual schedule outlining the approximate number of stations that will be installed and in operation and the population to be covered for each geographical area such that the desired level of service is provided;
• any market assessment assumptions on which decisions concerning future marketing and rollout are based; and
• an explanation of how service will be provided over a larger area where an applicant is proposing to implement its service over more than one of the geographical areas defined above.

Applicants should submit a description of the manner and likely timing in which incumbent radiocommunication systems will be displaced and the technical and/or operational measures to coexist with existing radiocommunication systems that will not be displaced.

Consideration is being given to the use of performance guarantees to ensure compliance to the system implementation plans as described in an applicant's detailed submission and to avoid the premature displacement of fixed microwave links. For example, a guarantee could consist of, but not be limited to, monetary commitments equivalent to the loss of radio licence fee revenue to the Crown for failure to respect system implementation plans.

Applicants are invited to propose in their submissions the form of such performance guarantees, specific milestones, and the appropriate value of any commitment into which they would be prepared to enter as a condition of licence upon authorization by the Minister. Industry Canada intends to announce its conclusions with respect to guarantees prior to the award of licences.

Premature displacement of a fixed microwave link will be viewed seriously and Industry Canada is considering mechanisms to adequately protect incumbent licensees from this occurrence. As a result, to ensure that fixed microwave links are displaced only when and where necessary, the Department is considering, among other options, the use of performance guarantees. Applicants are invited to propose in their submission the form of such guarantees and the appropriate value of any commitment.

9.5.5 Technology

Applicants must provide a description of the technology(ies) to be used in the provision of the PCS services including references, as appropriate, to technical standards. Applicants should include a description of the following:

• how the proposed service features will be technically implemented;
• technical measures to coexist with other PCS operations and fixed systems in Canada and with those in the United States in accordance with the interim frequency sharing arrangement — the description should include the basis upon which the technical analysis was done, whether based on recognized industry procedures such as TIA/EIA Telecommunications Systems Bulletin (TSB10-F) entitled Interference Criteria for Microwave Systems, or on a mutually acceptable arrangement between the applicant and the other PCS operations and/or fixed systems;
• whether and how interoperability with other frequency blocks will be provided; and
• transmission facilities and system linking — in the event that applicants propose additional RF spectrum requirements in higher frequency bands for system linking, they should clearly indicate the frequency bands preferred, the amount of spectrum required, the architecture of radio facilities, eg. short collector links and multi-links, and any other relevant details.

The description should also identify how system capacity will be maximized.Applicants may also include evidence of any contractual arrangements already established, such as for the supply of equipment or antenna site agreements.

9.5.6 Research and Development

Applicants should provide a description of any commitments to future Canadian research and development activities relating to personal communications technologies in the 2 GHz range. The description should outline, where applicable:

• the percentage of adjusted gross revenues that will be spent on related research and development in Canada;
• the in-house staff allocated to research and development;
• a research and development plan for the initial five (5) years; and
• measures to be undertaken to provide for equitable distribution of the research and development in the regions of Canada.

Refer to Appendix C for the definition of research and development.

9.6 Filing address

Applicants should submit phase one and phase two written submissions to:

The Director General
Radiocommunications and Broadcasting Regulatory Branch
Industry Canada
Journal Tower North
300 Slater Street
Ottawa, Ontario
K1A 0C8

10. Further Information

General inquiries, strictly on clarification of the policy or on the application requirements and procedures contained in this document, may be addressed to either the Telecommunications Policy Branch, 300 Slater Street, Ottawa, Ontario, K1A 0C8 (Phone: 613-998-4333, 613-998-4470; Facsimile: 613-952-0567) or the Radiocommunication and Broadcasting Regulatory Branch, 300 Slater Street, Ottawa, Ontario, K1A 0C8 (Phone 613-998-3768; Facsimile: 613-952-9871).

Appendix A — Related Documents

The documents listed below provide background information related to PCS in the 2 GHz range. Copies of these documents may be obtained on request from Industry Canada, 300 Slater Street, Ottawa, Ontario K1A 0C8, attention DOSP-P, or from Industry Canada's regional and district offices.

1. Canada Gazette Notice DGTP-006-94, entitled Policy Discussion and Proposals respecting the Future Provision of Personal Communications Services and Frequency Spectrum in Canada in the 2 GHz Range.
2. Industry Canada's document entitled Industry Canada's Three-Phase Selection and Radio Licensing Process.
3. Industry Canada's discussion paper released in April 1994 entitled The Canadian Information Highway.
4. The Interim Sharing Arrangement Between Industry Canada and the Federal Communications Commission Concerning the Use of the Band 1850 to 1990 MHz.
5. Revision to the Canadian Table of Frequency Allocations (1994), announced in Gazette Notice DGTP-005-94, October 29, 1994.
6. Revision of the Microwave Spectrum Utilization Policies in the Range of 1-20 GHz announced in Gazette Notice DGTP-002-95, January 21, 1995.

Appendix B — Release of Information under the Access to Information Act

The questions below are used during any review of information with respect to section 20(1) of the Access to Information Act.

Section 20(1)(a) of the Access to Information Act

1. Is any information considered to be a "trade secret"?
2. If so, in what way is the information a "trade secret"?

For a record to qualify as a trade secret it must meet all of the following requirements:

1. it must consist of information;
2. the information must be secret in an absolute or relative sense, that is, known only by one or a relatively small number of persons;
3. the possessor of the information must demonstrate that they have acted with the intention to treat the information as secret;
4. the information must be capable of industrial or commercial applications; and
5. the possessor must have an interest (eg. an economic interest) worthy of legal protection.

Information or data not meeting the requirements of a "trade secret" may nevertheless qualify for exemption under other provisions applying to section 20(1).

Section 20(1)(b) of the Access to Information Act

1. Is the information financial, commercial, scientific or technical information?
2. Who provided the information to the department?
3. Has the information been consistently treated as confidential?
4. What measures have been taken to consistently treat the information as confidential?
5. Is any information in the records publicly known or readily available upon request from the third party itself or another source?

Section 20(1)(c) of the Access to Information Act

1. Could the disclosure of information reasonably be expected to result in material financial loss to you?
2. Could the disclosure of the information reasonably be expected to result in material financial gain to someone else?
3. In what way could there be a material financial loss or gain resulting from the disclosure of information?
4. Could the disclosure of information prejudice your competitive position?
5. Describe in what way there could be a prejudice to your competitive position by the disclosure of the information.

Section 20(1)(d) of the Access to Information Act

1. Could the disclosure of the information reasonably be expected to interfere with contractual or other negotiations of your firm/company?
2. If so, in what way?
3. Are such contractual or other negotiations now underway or are they clearly expected in the near future?

Appendix C — Research and Development Definitions

Research is defined as the planned investigation undertaken with the hope of gaining new scientific, technical or social knowledge and understanding. Such investigation may or may not be directed towards a specific practical aim or application.

Development is defined as the translation of research finding or other knowledge into a plan or design for new or substantially improved material, devices, products, processes, systems or services. The costs of development include testing and demonstration costs until the process, system, or service is totally acceptable for commercial use/normal service offering. Such costs include overhead costs.

Adjusted gross revenues are defined as total service revenues less inter-carrier payments, bad debt, third party commissions, and provincial and goods and services taxes collected.

Footnotes

⁵ Ibid.