Study of Future Demand for Radio Spectrum in Canada 2011-2015

1. Introduction

This Report provides the outcome of an independent study of the Demand for Spectrum from 52 MHz to 38 GHz, across 15 different service sectors in Canada.

The Study has been conducted by Red Mobile Consulting (Red Mobile), in conjunction with its partner, PA Consulting Group (PA).

1.1 Executive Summary

The objective of this Study was to forecast the future demand for radio spectrum in Canada for commercial and government services, within the frequency range of 52 MHz to 38 GHz.

The Demand forecasts were to be developed for the period of 2010 to 2015. Five of the services were classified by Industry Canada as High-Value Services. The Demand forecast for these High-Value Services has been modelled in detail. In many cases for High-Value Services, it was important to study historic trends in a particular industry, and these historic trends have also been presented where helpful. As such, the baseline of year 2010 is presented, at minimum, for all modelled services. The remaining 10 services (Other Services) have undergone a varying degree of high-level analysis.

When reviewing the results, it is important to consider the objectives of the Study and the Methodology used. Given the time available, breadth of the topics, and vastly different areas of expertise required for the services covered by this Study, the overwhelming majority of the focus has been on High-Value Services. Therefore, while great effort has been made to make reasonable assumptions, develop a good understanding of the spectrum conditions, and vet these against input from stakeholders and sources of secondary research, there will be areas that have not been fully considered.

In order to understand the most fluid services, the Authors have spent close to one year observing and tracking changes and revising spectrum demand models. However, the assumptions about future technology and market developments can change. Also, for some services, users of the spectrum can implement the service in a manner that best suits their individual business, economic or market priorities. While the Study considers the major macro- and sector-level drivers, it does not attempt to delve into any specific user's situation.

As part of the Methodology, close to 50 industry Stakeholders were approached to provide input to the Study. For many services, especially the Other Services, the analysis has been conducted through input provided from industry Stakeholders. Stakeholder input has been considered in conjunction with other research to develop an understanding of that particular sector. It should be noted that, in some cases, the input provided by different stakeholders provides a contradictory or alternative view of the same service. The Report's intent is to present the varying views for the benefit of the reader. In addition, specific challenges for a particularly localized geographic area (i.e. congestion in a city), etc. have not been considered the only, and overarching driver to determine that there is a state of congestion throughout. However, where appropriate and possible, some of these specific challenges have been highlighted.

For the High-Value Services, where applicable, a market analysis has been conducted of the Service Demand. This Service Demand, and associated forecasts, were converted into Demand for Spectrum, taking into account several future factors, including improvements in spectral efficiency, evolution of technologies, etc.

An overview of the Methodology and key definitions are provided in Section 3 of this Report. As well, where applicable, the specific Methodology and associated Assumptions for forecast of Service and Spectrum Demand are presented in the individual service areas.

It should be noted that for the High-Value Services, three different Scenarios, representing different market conditions have been modelled. As the spectrum demand projections are developed using a variety of forward-looking assumptions, particularly for investments made in the implementation of the service (i.e. network rollout, technological upgrades, etc.), and future take-up and usage levels of services, the Scenarios attempt to provide a view of spectrum demand, should these conditions change. The Scenarios are explained in Section 4 of this Report.

The mandate of this Report does not include Policy development, nor is it the Report's intent to do so.

A summary of the findings for each service can be found below. Note that this is a partial summary of the findings as, typically, only the Business as Usual case is presented. To have a complete picture of the analysis and findings, the reader is encouraged to refer to the applicable sections.

Cellular Services

The Canada cellular market is experiencing rapid growth, with Canadian growth in mobile data consumption and smartphones as a percentage of overall devices, being one of the highest in the developed world in the 2010-2011 period. This has been fueled by several factors converging within a few years. Namely, added competition and more cost-effective 3.5G networks have driven down data tariffs considerably; the investment made by Canadian operators in new networks has resulted in significantly higher throughput rates, improving the user experience for data services; and Canadians are buying smartphones and mobile broadband devices (tablets, dongles, etc.) that show significantly rates of data consumption.

In fact, the cellular market in Canada has grown so quickly in 2010 and 2011 that the approach of the Study had to be modified to monitor the actual shifts in traffic over several recent months, and to revise the original projections. The current forecast for Service Demand show a growth of 30 times in data traffic between the period 2010 to 2015, and the overall cellular traffic, including voice, data, and messaging, is seen growing from approximately 4 Petabytes Footnote 1 (PB) to almost 75 PB in this same period.

The Study has modelled three spectrum demand scenarios: Business as Usual, Wire-Free World and Low Investment. The findings show that a substantial spectrum overhead is needed in addition to handling the offered traffic during the busy hour. The Study estimates that a total of between 300 MHz to 500 MHz of cellular spectrum will be needed by 2015, including overhead (consideration for network operation, future investment scenarios) to accommodate the service demand. The range of spectrum required depends on various factors discussed in the Report including the degree of investment made in upgrading networks to newer, more efficient technologies, addition of cells/sectors, provisions for new entrants, etc.

Operators may extend the capacity of their spectrum holdings by continuing to shift more traffic to their HSPA and LTE networks and/or adding more sites and sectors (densifying the cellular networks) in the capacity-constrained areas (i.e. the most urban areas and, also, the most densely populated rural areas). It should be noted that a study of this particular services area of 15 to 20 years is more valuable, as the period in which this Study was conducted was that of unprecedented growth in take-up. A longer-term Study period will allow for a better understanding of how spectrum demand will evolve.

Fixed Wireless Access (FWA) Services

The Study separates out Point-to-multipoint (PTM) from Point-to-point (PTP) FWA.

The Study has modelled three spectrum demand scenarios: Business as Usual, Wire-Free World and Low Investment.

Point-to-multipoint FWA: Canada has one of the highest penetrations of broadband Internet access of the Organization for Economic Co-operation and Development (OECD) countries. One of the opportunities for FWA growth is that more than 14% of the rural households are un-served or underserved.

The Study forecasts a significant service and spectrum demand to serve the broadband rural market using FWA (licenced and licence-exempt) PTM facilities and advanced HSPA-LTE cellular networks. The number of FWA subscriptions (below 6 GHz), grow from approximately 500,000 at the start of 2010 to almost 1M by 2015. Traffic is projected to grow from 15 to 45 GB/month per subscription during the same period.

The evolution in the mix of technologies has also been noted, with the addition of some FWA services starting to be delivered using cellular technologies in the 2013-14 timeframe.

The Study projects spectrum demand to double (from 150 MHz to 300 MHz) for the 2010-15 period to meet the broadband-access Service Demand for the Business as Usual scenario.

Point-to-point (PTP) FWA: The high-capacity point-to-point links provide an effective way to serve part of the large enterprise market and other high-speed connections requirement, in addition to multiple DS-3 fibre-optic (SONET) and wireline carriers.

In terms of the development of the market, the projections are for slow continued growth in links (on the order of up to 5%-10% per annum (pa) and a more-rapid growth in traffic, on the order of a threefold growth in traffic per link, from 1TB/link/month to 3 TB/link/month.

PTP links require extensive spectrum. By 2015, the spectrum requirement varies according to the traffic scenarios and is projected as being between 500 and 1200 MHz.

This would be another service area where a prolonged study period of 15 to 20 years provides a significantly more valuable view of the demand for Spectrum.

Backhaul Microwave Facilities

The Study has modelled three spectrum demand scenarios: Business as Usual, Wire-Free World and Low Investment.

The relative traffic (GB/mo) levels of the microwave backhaul facilities in the prime microwave bands (i.e. 11/14/18/23 GHz) bands to carry cellular network and FWA broadband traffic (to collector points or concentrators) for the period 2010-2015 were modelled. Then, these traffic levels of cellular and fixed networks were converted to spectrum demand for the same period.

Results suggest that the prime microwave backhaul bands (i.e. 11/14/18/23 GHz) bands will see an increase in their demand for spectrum over the period of 2010-15, as HSPA and LTE networks drive growth in cellular traffic, and as fixed networks increase their appetite for high-capacity microwave backhaul links.

The spectrum demand is expected to grow from approximately 900 MHz in 2010 to between 2600 and 3400 MHz, depending on the scenario used. It should be noted that several assumptions are used to project this demand, and the demand for this service is highly sensitive to some of these assumptions.

Broadcasting Services

The service covers Over-the-air TV (OTA TV), FM Radio, and DTH Satellite broadcasting.

The Study has modelled three spectrum demand scenarios: Business as Usual, Wire-Free World and Low Investment.

OTA Television: The Study finds that the spectrum demand for OTA Television is relatively flat. However, within the DTV Allotment Plan, a small number of spare channels are available for growth. Moreover, within the ATSC digital channel of 19.3 Mbps, there are opportunities for broadcasters to offer a mix of HDTV, SDTV and mobile TV programming within an assigned 6 MHz OTA TV broadcasting channel. The demand for spectrum will remain at 270 MHz; however, service growth will occur within the allotted 6 MHz channels.

FM Radio: The Study notes the congestion of FM Radio spectrum in large markets, such as the Greater Toronto Area. There will be continued pressure as AM stations aspire to convert to FM broadcasting. The use of IBOC digital broadcasting within existing FM channel allotment may offer a way forward to expand the use of the FM band. But, it is envisaged that the FM radio spectrum will remain the single most congested band of any of those assigned to the High-Value Services, over the period of the Study, and there are limited grounds for expecting this to change in the years immediately following 2015.

DTH Satellite: The Study modelled three scenarios of DTH Satellite service and spectrum demand. The number of SDTV is estimated to grow from 951 to 1532 programs, from 2010 to 2015. Similarly, the number of HDTV grows from 162 to 494 programs. In 2010, about 800 MHz (orbital-MHz units) is needed for the equivalent of less than 2 DTH satellites. However, in 2015, depending on which scenario is used, a range of 1000 MHz to 2600 MHz (orbital-MHz units) will be needed. For the Business as Usual scenario, the equivalent of 3.5 DTH satellites will be required. As the two DTH satellite operators have already procured the equivalent of 3.5 DTH satellites, there is sufficient satellite capacity to meet the service demand for the period of this Study.

Satellite Services

Three services are covered as part of this section. These include: Mobile Satellite, Fixed Broadband Satellite and Fixed Bent-pipe Satellite communications.

The spectrum demand for the first two services was modelled in detail. The Study has modelled three spectrum demand scenarios for these two services: Business as Usual, Wire-Free World and Low Investment. A high-level analysis has been presented for Bent-pipe Satellite.

Mobile Satellite Service (MSS): The Study projects an increase in subscribers and the take-up of mobile data services. Substantial increases in traffic are offset by the gain in spectral efficiency due to moving from 1G to 3G technology. The net effect is that spectrum demand for Mobile Satellite Services is projected to be fairly steady over the next five years, as subscribers upgrade to newer technology.

MSS subscriptions have been projected to grow from 120,000 in 2010 to 190,000 by 2015. While voice traffic continues to be low, users with newer data capable devices are projected to generate 40 MB of data traffic per month, per subscriber by 2015. This results in an overall MSS traffic volume rising from 450 GB to almost 10,000 GB over the same period for the Business as Usual scenario.

As a result of the shift to newer, more efficient technologies, the spectrum demand is projected to remain comparable with, or less than, what it is in 2010 (remain in the 60-100 MHz x orbital slot range for Business as Usual scenario). The projections for the other scenarios are sensitive to the changes modelled, and should be reviewed in the Report.

Fixed Broadband Satellite: Rapid growth in subscribers and a slow growth in the volume of data traffic per subscriber are projected. The combined effect is a close-to-tenfold growth in traffic over the five-year period going from 500 Terabytes Footnote 2 (TB) in 2010 to more than 5000 TB in 2015 for the Business as Usual scenario.

Large-scale gains in spectral efficiency for these services over the five-year period are not anticipated and, consequently, the demand for spectrum, as measured in MHz x orbital slots, is observed to follow the growth in traffic. The resulting demand grows from just over 800 MHz x Geostationary orbital slot (GOS) to over 5000 MHz x GOS. The projections for other scenarios vary significantly as a result of the sensitivity to changes modelled.

Bent-pipe: An analytic overview has been presented for the fixed "bent-pipe" satellite service. Due to the large number of Canadian and foreign satellites serving the North American market, including Canada, it is difficult to quantify demand. Furthermore, there are many types of satellite telecom services being delivered and a large number of satellite network operators, service providers and a large pool of fixed satellite users. Very little information was available to study the service and spectrum demand for this category of fixed satellites.

This is another area where a longer-term evaluation period of 15 to 20 years would be more valuable to study the demand for spectrum.

Land-Mobile Services

An ad-hoc analysis of the demand for spectrum was conducted for this service. Input from stakeholders and research was used to determine current pressure points and where there is a need for future spectrum.

The Study reaffirms the presence of very high congestion in spectrum use for the 150, 450 and 800 MHz bands. While spectrum for particular applications may not be readily available in the preferred band(s), users have been accommodated or offered alternative spectrum in less-encumbered bands (900 MHz, 220 MHz or others). Public records have shown that the demand for VHF, UHF and 800 MHz frequencies have exceeded spectrum availability in certain large cities and areas of the country.

This area will experience improvement through introduction of newer, more spectrally efficient technologies and other measures that are expected to provide some relief. However, while regulatory measures, alongside industry trends, may help in releasing frequencies in congested land-mobile bands, any released frequencies are expected to address pent-up, or ongoing, demand in these bands. Also, some of the technology enhancements will start to make a more significant difference in the later part of the Study period. Therefore, despite the migration of users, technology enhancements and regulatory measures, little net-change is expected in the overall demand for spectrum in the bands already seeing pressure, with some increased usage of the currently underutilized bands over the 2010-2015 period.

Public Safety Service

Similar to land-mobile, an ad-hoc analysis was conducted to determine the demand for spectrum for this service. Input from stakeholders and research was used to determine current pressure points and where there is a need for future spectrum.

In summary, groups of 150/450/800 MHz land-mobile frequencies are not available for new Public Safety (PS) systems due to congestion, especially in border areas and dense urban cities. Despite developments including use of newer, more spectrally efficient technologies; narrowbanding; use of 700 MHz spectrum; and use of cellular networks for some PS applications, it is expected that any released frequency assignments will be used up to serve existing demand.

Input provided to Red Mobile by PS stakeholders was reviewed in conjunction with that provided by other industry players to Industry Canada as part of the 700 MHz Consultation. There are varying perspectives of how much spectrum is needed for optimal operation in the new 700 MHz spectrum. Some of these perspectives are presented in this Study. Mobile broadband communications, and interoperability are important for PS agencies, and deployments in the new 700 MHz band are expected to facilitate this.

Despite the new 700 MHz spectrum, it is expected that the 800 MHz land-mobile spectrum used by PS will continue to grow at current growth rates, in large urban areas over the Study period.

Amateur Radio

The findings from stakeholder input are used to identify pressure points and potential demand for this service.

While demand has been steady for the most part, there is some pressure on bands, including 144-148/430-450 MHz band. Some of this pressure may be alleviated by the use of other bands for voice. There is also repeater operation congestion experienced in the 144/430 MHz bands in some urban areas.

In some cities, wideband amateur fast-scan video activity is presently occupying 6 MHz wide channels using cross-band video repeaters in the bands 430-450 MHz, 902-928 and/or 1240-1300 MHz. It is becoming difficult to assign spectrum for these new applications in these cities.

However, despite the occurrence of high usage for certain amateur services in particular bands, there is no additional demand for spectrum identified for this sector in the 2010-2015 time frame.

Aeronautical Services

The findings from stakeholder input are used to identify pressure points and potential demand for this service.

It has been reported that all aeronautical services in the band 108-137 MHz and 328-335 MHz have been experiencing congestion. In particular, the band 108-111.975 MHz, assigned to an Internet Locator Server (ILS) localizer, is lacking frequencies in dense urban areas. Also, congestion exists for VHF communications at airports.

In order to meet the growing service demand, several bands in VHF, UHF and SHF will require additional frequency assignments during the 2010-2015 time span.

It should be noted that Aeronautical services use international frequency allocations, internationally set and followed standards and technologies based on International Telecommunication Union (ITU) and International Civil Aviation Organization (ICAO) requirements. In some instances, it can take 15-25 years to migrate legacy technology systems to new digital installations.

Maritime Mobile Services

The findings from research are used to identify pressure points and potential demand for this service.

This research did not find any additional spectrum requirements in the 2010 to 2015 period. However, in certain areas (i.e. a port), due to extensive maritime activities, particular VHF maritime communication frequencies will experience heavy usage and saturation.

It is expected that Canada will continue to follow international standards, allocation plans and particular maritime mobile frequency designations should continue. Over time, more spectrum-efficient maritime mobile technology should increase the communications capacity of the assigned spectrum.

Military Services

Similar to PS and land-mobile, an ad-hoc analysis was conducted to determine the demand for spectrum for this service. Stakeholder input was used to determine current pressure points and where there is a need for future spectrum.

The Study notes that, in many instances, the identification of new spectrum for major military systems tends to be collaboration with NATO countries and the NORAD organization. New spectrum requirements are identified several years in advance, and requirements are negotiated at appropriate ITU committees and WRC conferences to gain appropriate International Allocations and regulatory status in the ITU Table of Frequency Allocations.

The military is expected to continue to modernize its assets within the existing spectrum assigned, to share some of the spectrum with government and civil users and to collaborate to ensure that spectrum is used efficiently and meets the highest needs.

It is expected that additional spectrum will be needed for AMT service, while taking into account the availability of equipment. Other than for AMT services, additional areas of demand for new spectrum have not been identified for the 2010-2015 period.

Radiodetermination Services

The findings from stakeholder input are used to identify pressure points and potential demand for this service. There are some services that overlap between the input provided for radiodetermination and space science services.

Radiodetermination services include a range of radionavigation and radiolocation systems.

The identification of new spectrum for radiodetermination tends to be a collaborative exercise in an attempt to meet the needs of ITU members. Of additional significance to Canada are the needs of NATO countries. The WRC 2012 Conference is expected to consider making a primary allocation of radiolocation service in the band 15.4-15.7 GHz.

It is expected that radiodetermination systems will continue to be modernized within existing frequency bands.

Space Science Services

The findings from stakeholder input are used to identify pressure points and potential demand for this service. There are some services that overlap between the input provided for radiodetermination and space science services.

The identification of new spectrum for Space Science Services tends to be a collaborative effort among the member countries of the ITU forum.

The Study has identified areas where spectrum demand may occur for Space Science in the 2010 to 2015 period. These areas include the 2 GHz band for space operation to support small research satellites and RADARSAT.

Also, there is a potential need for additional spectrum in the 5 and 8 GHz bands for future Earth Exploration Satellite Service projects (RADARSAT-equivalent).

Consumer Devices

The findings from stakeholder input and research are used to identify pressure points and potential demand for this service.

The Study does not show additional demand of spectrum for consumer devices to occur in the 2010 to 2015 period. However, some of the bands (960 and 2400 MHz) are heavily populated with consumer devices, and can experience localized congestion in the presence of several devices operating in the area (i.e. conference centre, airport, etc.)

New technologies are increasingly using higher licence-exempt bands in the 5 GHz range. It is estimated that less than 20% of the spectrum in the new 5 GHz band (bands 5150-5250 MHz, 5250-5350 MHz and 5470-5600 MHz) is heavily occupied.

Medical Devices

Findings from research are used to identify pressure points and potential demand for this service.

While the proliferation of wireless enabled medical devices is expected to grow, demand of additional spectrum for medical devices is not expected to occur in the 2010 to 2015 period, as a result of the short-range, low-power communications of many devices.

The new medical telemetry band at 1400 MHz should replace the use of TV broadcasting spectrum, which is subject to more interference from over-the-air digital TV broadcasting.

1.2 Background

In Canada, radio frequency spectrum, which is managed by the Ministry of Industry, is considered a strategic public resource that provides benefits to different Canadian stakeholders, including the private sector, commercial users, consumers, defence, national security, science and public safety.

The spectrum allocation process in Canada is independent. However, it also aims to take into account different global policies issued by the World Radio Conference (WRC) — which will take place in 2012 — and the International Telecommunication Union (ITU). The allocations are formally set out in the Canadian Table of Frequency Allocations (CTFA) and are a necessary input to this Study.

The development of spectrum policies, allocations and technical standards in Canada is strongly affected by developments in the United States and, in many cases, by global dynamics. This has been taken into account in this Report while preparing the spectrum forecast. Industry Canada has set out to perform, and recently completed, a thorough study of current radio spectrum allocations and assignments. This study, called, "Radio Spectrum Inventory: A 2010 Snapshot – CanadaFootnote 3 (Inventory Report), has been extensively referenced as input to this Report.

1.3 Scope of the Study

The scope of this Study covers two broad types of spectrum users, namely government and commercial/private users, and 15 categories of services and applications in the radio-frequency bands from 52 MHz to 38 GHz. The Study provides the demand for spectrum during the period 2011 and 2015. However, as can be noted, where a historic perspective was valuable in determining trends, the Study does go several years back to understand the long-term trend.

As part of the scope, the Study reviews and references Industry Canada's Inventory Report, and does so for all services in order to summarize the current utilization of spectrum. The intent of this is to provide the reader a perspective of what the current spectrum allocations are for each service.

As part of this Study, Industry Canada identified five of these services as High-Value Services (italicized in the service list below). These High-Value Services have undergone significantly more research and analysis, and the demand for spectrum has been analyzed and modelled in detail using a proprietary modelling tool.

Per the scope of the Study, the demand for the remaining services was determined based on a combination of input from stakeholders and users, industry interviews, sources of secondary research, regulatory body reports, etc. This information was then analyzed, where applicable, to highlight any pressure points and areas for potential changes in demand for spectrum.

List of services covered in this Report:

  1. Cellular Services
  2. Fixed Wireless Access Services
  3. Backhaul Services
  4. Broadcasting Services
  5. Satellite Communication Services
  6. Land-Mobile Services
  7. Public Safety Services
  8. Amateur Radio
  9. Aeronautical Services
  10. Maritime Services
  11. Military
  12. Radio Determination Services Communications
  13. Space Science Services
  14. Consumer Devices
  15. Medical Devices

1.4 Predicting Developments in the Demand for Spectrum

Red Mobile Co. (Red Mobile) has been assigned to conduct a Study of future demand for radio spectrum in Canada. Augmenting Red Mobile's expertise, in the wireless industry and relevant regulatory practice, is PA Consulting, a global consultancy experienced in similar demand forecasts.

Red Mobile's team has significant experience in working on several client engagements in North America, South America, Europe, Asia and the Middle East. This has allowed the team to gain significant international hands-on experience, in addition to the appreciation of global and regional trends, and local variations. Red Mobile's consultants have a strong understanding of similar worldwide initiatives to evaluate spectrum demand and shaping related policy initiatives.

Work initiated on this Study in December 2010 and continued through to December 2011. As a result, where most applicable (i.e. Cellular, etc.) and possible, the evolution and changes in service demand have been tracked through the course of the year and reviewed several times, as part of an overall due-diligence process. Red Mobile conducted the market research and analysis of all 15 services and has developed the Service Demand forecasts.

For the purpose of market research and analysis, several Industry Stakeholders (See Appendix B) were asked to provide input to questionnaires. In addition, interviews and correspondence were used to further solicit input or clarify a position. Where possible, projections were reviewed against other sources as a sense-check. Once the market research and analysis were complete and the Service Demand was determined, Red Mobile worked alongside PA Consulting, who modelled the demand forecast for five of these services, classified as High-Value Services (explained in the next section). The spectrum demand needs for the other services have been covered through a high-level ad-hoc analysis, and have not been modelled, in alignment with the scope of this Report's mandate.

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2. Organization of Report

This spectrum demand Study follows the radio service categories identified by Industry Canada. The organizational structure is as follows, including the types of service applications covered in a particular section.

1. Cellular Services

This section covers mobile commercial services deployed in the Cellular, PCS and AWS bands as assigned by Industry Canada, and it also includes the future use of BRS and 700 MHz bands. Technologies covered include:

  • GSM, GPRS and EDGE;
  • CDMA, 1xRTT and EV-DO;
  • 3.5G - HSPA/HSPA+; and
  • 4G - LTE and WiMAX

Current national and regional operators and deployments are taken into account, as well as potential future changes with spectrum assignment in the 700 MHz and BRS bands. A wide range of service offerings — including voice, email, messaging, web browsing, video streaming, download, social media, interactive and converged services — have been considered. In addition, the evolution of connected devices has been taken into account. A detailed 2005-2010 model is developed for service demand, where historic evolution is assessed, as well as future demand. In developing models for this section, significant primary research was undertaken, including the monitoring of actual changes in various parameters, including monthly changes evolution of subscribers, devices, distribution of traffic over HSPA vs. legacy technologies, data usage, etc. In addition, the cell/sector counts for each technology were determined. Each stakeholder's input is held in confidence and, therefore, not disclosed. It is important to note, that, while stakeholder input was used as a sense-check and for fine tuning, the projections and numbers are based upon independent research and analysis and do not indicate any specific operator's situation.

2. Fixed Wireless Access (FWA)

The FWA section covers point-to-multipoint (PTM) systems below 6 GHz, which provide broadband Internet access to a segment of the home and business market. Licensed and unlicensed spectrum, using WiMAX and proprietary technologies in applicable bands, has been modelled. FWA applications supported using cellular technologies (i.e. HSPA/LTE) are covered in this section.

This section also covers point-to-point (PTP) FWA in bands above 20 GHz.

3. Backhaul Services

This section covers the use of backhaul microwave links to support wireless backhaul of traffic from FWA and cellular networks. Microwave facilities are used in Canada, in addition to wireline (fibre-based) facilities, to support the combined backhaul of cellular networks and FWA systems.

Point-to-point links using FWA technology for enterprise connectivity (typically 24/28 GHz band) in the access network are addressed in the FWA section.

4. Broadcasting Services

The broadcasting section covers over-the-air (OTA) digital TV broadcasting and OTA FM Radio. Furthermore, broadcasting satellite, or Direct-to-Home (DTH) satellite broadcasting, service is covered under this section for Canada's two DTH satellite broadcasters. This section covers advanced technologies being implemented, including:

  • ATSC (Advanced Television Systems Committee) for OTA TV;
  • IBOC (In-band On-Channel) for FM; and
  • MPEG 2 for broadcasting satellite and a range of digital service offerings on OTA TV channels from SDTV to HDTV and mobile TV broadcasting

5. Satellite Communications Services

This section covers broadband satellite communications (Ka-band) providing broadband Internet access to households and businesses, as well as mobile satellite services, which have now evolved from voice to 3G capacities. Also, this section briefly addresses the conventional fixed satellite communications (bent-pipe types using the C- and Ku-bands). Both Canadian and foreign satellite networks serve various segments of the Canadian satellite market. New Canadian satellite networks use orbital-spectrum resources on the geo-stationary orbital arc to serve both the Canadian and North American satellite market. The Study considers available satellite capacity and needs for the Canadian market.

6. Land-Mobile Services

This section covers the land-mobile services, such as trunk mobile and wide-area dispatch for voice, paging, telemetry, data, etc., used by hundreds of thousands of users over a number of bands (VHF and UHF). Also, the section covers the specialized public safety services using traditional land-mobile spectrum for wide-area dispatch of voice and data.

7. Public Safety Services

This section covers public safety (PS) services using specialized systems for wide area dispatch-voice, data service (files download, image, surveillance, etc.) used by first responders, such as fire, police and EMS. In addition to the land mobile spectrum, a number of bands have been assigned exclusively to PS for voice, data and broadband Internet access, which are part of the Study. Under the public safety definition, a number of government and utility radio applications (where life and property protection is involved) qualify to access spectrum as public safety for mobile voice, data and broadband access.

8. Amateur Radio

This section covers the wide range of amateur radio uses of radio communications and the many bands available for such services, including voice, data, video, emergency assistance, research, image, Internet access, satellite, etc.

9. Aeronautical Services

This section covers a multitude of services essential to ensure the operation and safety of civilian and military aviation, as part of the domestic Air Navigation System (ANS). Some of the services and systems covered include the VHF radionavigation (VOR, ILS, ATCS and VHF communications), airport surveillance radar, airborne radar, radio altimeters, aeronautical mobile, global positioning satellite service (GPS) and other applications for Canadian ANS operation.

10. Maritime Services

This section covers the VHF maritime mobile services, which include mobile applications for inter-ship and ship-to-shore communications, communications used for safety and ship movement, automatic ship identification and surveillance systems, vessel traffic services and other communications.

11. Military Services

This section covers the specialized needs of the Canadian military. It includes a wide range of radio services and applications to support military operations, such as mobile, satellites and radiodetermination, including radar systems, radionavigation, aeronautical and maritime communications. Some military radio service needs are covered in other service sections of this report and are identified in such cases.

12. Radiodetermination Services

This section covers two main categories of radiodetermination services, namely, radionavigation and radiodetermination (radar) applications. This includes a wide range of applications for aviation, maritime transportation, military operations, environment (e.g. weather radar), etc.

13. Space Science Services

This section covers the space science services broadly associated with space operation, space research, earth exploration satellites, meteorological and radio astronomy. This includes a wide range of frequency bands and service space science applications by several key government agencies and users.

14. Consumer Devices

This section covers the use of a number of licence-exempt frequency bands by many millions of wireless (consumer and business) devices/products. These include phones, Wi-Fi routers, Wi-Fi connections to electronic home devices, smartphones, tablets, etc. A number of frequency bands accommodate the operation and growth of these consumer and business devices.

15. Medical Devices

This section covers the use of wireless applications to support a wide range of medical monitoring and telemetry devices as part of providing advanced medical care through remote diagnostics, monitoring of vital signs, as well as other innovative applications.

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3. Approach to Forecasting the Demand for Spectrum

3.1 The Approach Taken for Quantifying Projection of Demand

3.1.1 High-Value Services

The mandate for High-Value Service was to develop a detailed analysis of the demand for spectrum. As such, the approach taken for these services was for Red Mobile to first develop a top-down forecast of subscriber, device and traffic evolution, based on a combination of primary research, industry stakeholders' input and other resources, regulatory body reports and data-bases, including Industry Canada, the CRTC and FCC, as well as various credible sources of secondary research. Red Mobile used the fore-mentioned sources, in addition to its in-house expertise, to develop the forecasts for each of the services. These forecasts are referred to as the Demand for Services in this Report.

Some of the parameters for consideration included:

Cellular, FWA and satellite communications — The approach was to conduct a detailed top-down market analysis and forecast of the:

  1. number of subscribers,
  2. breakdown of subscribers or device type, where applicable (feature/smartphone, tablet, dongle, etc., for cellular),
  3. traffic-per-subscriber, based on device type, divided by application (i.e. voice, messaging, web browsing, email, etc.), where applicable.

Broadcasting — The approach was to determine the:

  1. number of channels and to break down the numbers by
  2. channel type and
  3. technology.

Backhaul — The approach is to:

  1. generate separate traffic forecasts for each network type (i.e. fixed networks and cellular), then
  2. estimate what percentage goes over microwave, and
  3. how it is distributed and retransmitted over microwave links in the network.

In determining the Demand for Spectrum for High-Value Services, Red Mobile worked with PA Consulting Group to develop input parameters and key assumptions needed to develop spectrum demand. PA's PRISM model and its associated methodology were appropriately customized, where necessary, for the scope of this Study and for the unique requirements of the Canadian market.

Therefore, the following process was used:

  • Conduct relevant primary research and leverage in-house expertise;
  • Review stakeholder input and sources of secondary data;
  • Review existing data regarding the usage of each service – traffic, subscribers, as well as how these have evolved;
  • Derive detailed estimates of current and future traffic for each service, broken down by application and technology where appropriate;
  • Derive detailed assumptions regarding how these traffic volumes will convert into spectrum demand. Some factors include: spectral efficiency, frequency reuse, across each type of network, geographical and temporal distribution of demand;
  • Use the PRISM model to apply these assumptions and to calculate the demand for spectrum for each service, with selective breakdowns by technology or by network type;
  • Use the PRISM model to explore alternative scenarios and compare them with the main Growth as Usual projections.

In practice, there has been some iteration in this process as the detailed bottom-up assumptions used in the model have been validated in the light of the initial projections.

3.1.2 Other Services

The mandate for the other services was to conduct a high-level ad-hoc analysis of service and spectrum demand, where possible, and to highlight the potential impact on demand, based on stakeholders' input. Therefore, these services were not modelled in detail. The approach taken for these services was for Red Mobile to first develop a synopsis of the market for the particular service and to develop an associated questionnaire, as well as to gather input from industry stakeholders.

In addition, industry participants and stakeholders were interviewed, where applicable, and credible secondary sources were used as identified. This provided the direction for the demand for both services and spectrum. As opposed to the High-Value Services, where stakeholder input was provided in confidence and has not been shared in this Report, for some of the services (i.e. Military or Public Safety) the stakeholders are given, therefore, to make the information more valuable, the sources for input — where they are government bodies — have been identified with permission. Pressure on spectrum is identified where applicable.

Therefore, the following process was used:

  • Conduct relevant primary research and leverage in-house expertise.
  • Review stakeholder input and sources of secondary data.
  • Review existing data regarding the usage of each service from Industry Canada's Inventory Report and stakeholder input, i.e. frequency assignments, pressure points, etc.
  • Where applicable, derive high-level estimates of current and future changes in service and spectrum demand.

In practice, there has been some iteration in this process.

Table 3.1.1 — The approach taken for modelling of services
Service name Description of technology and users/usage High Value Approach to forecasting the demand for spectrum
A. Stakeholder engagement B. Self- reporting by users of spectrum C. Bespoke ad hoc analysis D. In-depth modelling of traffic and demand
Cellular (High-Value Service) 2.5G (GSM, 1XRTT)
3.5G (HSPA)
Voice and IP data
Yes Yes Yes Yes Yes (3 scenarios)
Land Mobile Narrowband, trunking, APCO
PS, Government, commercial carriers
Yes Yes Yes
Public Safety APCO, narrowband and broadband, All PS agencies Yes Yes Yes
Broadcasting (Radio and Television) (High-Value Service) Terrestrial and Satellite. Digital TV (DTV), In-band digital FM and AM radio. Transition to digital within Channel 2-51 and radio bands Yes Yes Yes Yes Yes (3 scenarios)
Amateur Radio Various technologies and applications, depending on bands Yes Yes
Backhaul (High-Value Service) Digital microwave radio relays in several bands;
Backhaul for cellular, power utility, broadcast STL, CATV head ends
Yes Yes Yes Yes Yes (3 scenarios)
Fixed Wireless Access (High-Value Service) WiMAX, other digital technology. Broadband access in FWA, WCS, MCS, LMCS bands Yes Yes Yes Yes Yes (3 scenarios)
Satellite Services (High-Value Service) Satellite comms — voice and data; civil, not military. Multimedia satellites in C-, Ku-, Ka-Bands; MSS in L-band and 2 GHz bands.
DTH Broadcasting (Analyzed here for Canada, and Demand presented in Broadcasting section), program carriage, telecom, Internet backbone, broadband access, government service, mobile satellite.
Fixed Bent-pipe Satellite. Communications were analyzed using ad-hoc analysis
Yes Yes Yes Yes Yes (3 scenarios)
Aeronautical Services (Communications, Navigational Aids and Surveillance) Air navigation and air traffic management.
Transport Canada, NAVCAN
Yes Yes
Maritime Services (Communications, Navigational Aids and Surveillance) Mobile stations: ship station and coast stations.
Government, vessels, crafts, port authority
Yes Yes
Military Excluding Radar (covered separately). Comprising: weapons systems, communications systems (incl. land mobile, satellite) Yes Yes Yes
Radio Determination Services Communications Radionavigation and Radio-location use for aeronautical navigation (incl. GPS) and Radar applications, i.e. for navigation and non-military Yes Yes
Space Science Services EESS, space research, space operation, radio astronomy.
Government and agencies, university, satellite operators
Yes Yes
Consumer Devices LE-exempt wireless: Blue-tooth, Wi-Fi, DECT, R-LAN UWB Yes Yes
Medical Devices LE-exempt short-range wireless.
Telemetry devices
Yes Yes

Note: High-Value Services (shaded boxes) were modelled in detail using PRISM, while the remainder received varying degrees of analysis to determine impact on spectrum throughout the next five years.

The Table A.6.1, in Appendix A, lists the stakeholders that were approached to provide input. While most stakeholders provided highly beneficial input, some did not respond. In addition to the direct input from stakeholders, in some cases, some stakeholders were interviewed or asked more detailed questions. Each stakeholder's input has been treated as confidential, other than where we received permission from agencies to release their names (i.e. DND, RCMP, etc.), and, in some cases, the user is obvious. In developing the projections for service or spectrum demand, several sources of information were used and combined with stakeholder input to develop the specific input data needed for the modelling process.

3.2 Forecasting the Relationship Between the Demand for Both Services and Spectrum

3.2.1 High-Value Services

The projections for the High-Value Services have been generated using the PRISM model. The model generates quantified projections of the demand for spectrum across a range of communications and media services and technologies. It generates projections for each year of interest, over a time frame of, typically, five to 20 years. In this process, the demand for services and the levels of offered traffic are primary drivers of the demand for spectrum.

However, the relationship between the two is not always so simple. There is a range of factors, which drives demand for spectrum. Each factor is different for each of the services and can be different for individual technologies. The model takes these inputs and uses them to quantify the relationship between traffic growth and growth in demand for spectrum. As a result, the relationship between growth in traffic and growth in demand for spectrum can take many different forms.

The results and the relationships for each of the five High-Value Services are given in Section 6 below.

An overview of the PRISM model is given below.

The PRISM Model

The PRISM model was based on background IP from a number of spectrum demand and valuation models developed by PA. It was primarily developed for an assignment for Ofcom, the UK regulator, to predict spectrum demand and shortages for six High-Value Services Footnote 4 in the UK over a 15-20-year time frame (2007-2025). A key part of the methodology was the development of PRISM as a comprehensive, yet flexible and adaptable, Excel-based model.

The methodology and, in particular, the PRISM spectrum requirements model was reused (with suitable adaptations) in the assignment delivered for Industry Canada. For this project, an innovative methodology capable of generating soundly based projections of spectrum requirements data for a wide range of uses — including four of the five services required for Canada — have been pioneered.

The PRISM model is an extensive and comprehensive model amounting to some 70 MB of Excel and Visual Basic for Applications (VBA). The model is particularly relevant where substantial changes are expected in spectrum requirements over the next few years and where the usage drivers are complex. This applies to cellular systems and, to varying degrees, to the other four High-Value Services specified by Industry Canada.

Model Structure and Sample Inputs

The PRISM model provides a detailed bottom-up approach for forecasting the demand for spectrum, taking account of growth in service demand (traffic and subscribers, for mobile; channels, for TV broadcasting; etc.), but also covering the many factors that mitigate or occasionally exacerbate the effect of this on growth in demand for spectrum, for example:

  • Growth in the number of base stations/changes in their deployment pattern;
  • Changes in spectral efficiency;
  • Changes in the installed base of devices (mainly for mobile);
  • The distribution of demand over the day/week/year, and any changes in this;
  • Headroom required in order to provide quality of service (e.g. low latency, high burst rates);
  • Content compression;
  • Cellular: the growth in femtocells and/or offload to Wi-Fi

The model is also able to maintain separate forecasts of demand for each application (voice, SMS, Web browsing, email, downloads, live TV, etc.) for each service (Cellular, Broadcasting, FWA, Short-Range Wireless and Backhaul); to manage multiple scenarios for all of the demand projections and the technology assumptions; and to provide multi-dimensional reports on the resulting demand for spectrum over a time period of five to 20 years into the future.

An overview of the structure of the model is shown in Figure 3.1.1.

Figure 3.1.1 — PRISM: Model structure

PRISM: Model structure (the long description is located below the image)
Description of Figure 3.1.1

This figure provides an overview of the PRISM Model structure. The 'network workbook' and 'demand workbook' components feed into the input data (network design, sites and geography, spectral efficiency, femtocells, peakiness of demand, spectrum availability and input data for total demand by application and technology/service). This input is the fed to the Spectrum Shortage Model through the Macro to run scenarios and export results. The last component contains the results files in terms of offered traffic, spectrum demand, shortages and charts.

The model was designed to analyze the demand for spectrum, and any likely episodes or potential areas of spectrum shortage, over a five-to-20-year timeframe, covering up to 30 technologies spread across several entire services (e. g. Cellular, FWA, Backhaul).

The model caters to projected changes in subscribers, traffic, spectral efficiency, data compression and several other major factors affecting demand for spectrum.

Furthermore, it is designed to provide breakdowns of the demand projections by many of the relevant dimensions — notably by time, service-frequency band and by location type (the latter being particularly relevant for Cellular services, where demand can vary considerably between city centres, low-density suburbs and rural areas).

Overview of Model Usage

The model has been developed to allow a degree of reuse and reapplication in different geographies subject, of course, to the availability of the required input assumptions and parameters for the services being modelled.

Figure 3.1.2, below, shows the main menu, followed by the more detailed view of the structure of how the sections in the model fit together, shown in Figure 3.1.3, below this one.

Figure 3.1.2 — PRISM: Main navigation menu

This figure provides a snapshot of the PRISM Model's main navigation menu, containing several boxes/components

Figure 3.1.3 — PRISM: Detailed view

This figure provides a detailed view of the PRISM menu, with several navigation buttons

Behind each yellow navigation button on the detailed menu, above, there is one or more input sheets, each of which holds one set of related assumptions; Figure 3.1.4, below, shows a simple example of this.

Figure 3.1.4 — PRISM: Example Input/Assumptions Sheet in the Model

This figure provides an example of an input sheet, which is essentially a table containing entries for the various inputs/assumptions made

The model uses these inputs and assumptions to determine the traffic projections for each service and technology and, then, via further assumptions about how each technology works and how it is deployed, it determines the demand for spectrum from each technology and service. This is used to generate true bottom-up/demand-driven projections of the demand for spectrum, which take account of shifts in technology and networks, as well as growth in subscribers and traffic.

Advantage of the Model-based Approach using PRISM

The key function of the model is to enable market uptake data, for a range of different spectrum uses, to be translated into spectrum usage forecasts over time and for different bands. It does this in a flexible way using bottom-up analysis. So, in the case of cellular systems, for example, it takes into account certain factors, such as traffic patterns, neighbourhood types, propagation conditions, numbers and type of cell sites, the specific form of cellular system being used (i.e. HSPA, LTE, etc.), spectrum efficiency and the different types of mobile terminals. This information is all combined with the growth patterns, as dictated by the chosen scenarios, market conditions and a host of other factors, to produce spectrum usage estimates over time and in different bands.

These projections provide a higher degree of rigour than projections based on self-reported projections from users, or projections based on traffic growth, alone. Accordingly, the PRISM model has been used to underpin our analysis of the spectrum demand for the High-Value Services where the evolution in technology and demand is complex and where it warrants this higher level of sophistication.

3.2.2 Demand for Spectrum Defined

Prior to considering the modelling results, it is necessary to consider what is meant by the phrase "demand for spectrum," and how it can and should be interpreted.

There are many different measures of this demand. Definitions are shaped by, for example, the approach taken by posing the following questions:

  • Is the "demand" an average, over the day/week/month/year, or for the peak period?
  • What type of local area does the demand represent?
  • What (if any) scaling-up is made to allow for quality of service — e.g. to handle random variation — local clustering/spreading of demand, short-term peaks and valleys, and "bursty" demand?
  • Is the "demand" that of the traffic offered/demanded by the consumers/users of the service, or that of the service providers/operators?
  • Wh at assumptions are made regarding channel bandwidths, minimum frequency allocations, and paired versus unpaired spectrum?
  • What, if any, provision is made for network management — testing/transition for new and replacement equipment, spectrum re-planning, re-farming of spectrum to deploy new technologies, and spectrum demand for "stranded" assets, such as RAN equipment that is deployed but which is now inefficient in its use of spectrum or is little used, e.g. because user devices have moved on to newer technologies?
  • The approach taken in this Report reflects the aim of providing a view from a service consumer perspective wherever possible — not just for cellular, but for the other services, as well.Footnote 5

The primary measure of "demand" as discussed in the Report is outlined in the box below.

Main Definition of "Demand for Spectrum" used for High-Value Services

How much spectrum is required to serve the offered traffic?

The demand covers all traffic, for all users of the service, not just those on one network. The demand is for the busiest hour in an average week.

Demand is assessed for a range of different types of local areas of differently built environments and population densities. The national demand is generally taken as being the highestFootnote 6 of the demand figures in any of these local area types.

For communications technologies, a degree of scaling-up is applied to allow sufficient spectrum to provide an acceptable quality of service — to handle random variation, local clustering, short-term peaks and valleys, and "bursty" demand. Typically, the adjustment for this is a scaling factor in the range 1.5 to 2.

The spectrum demand figures include the effects of spectrum pairing for those technologies that can use only paired spectrum, or for which paired spectrum is the norm.

For Broadcasting services, the traffic originates from the broadcaster, rather than the viewer or listener. The definition of "traffic offered" uses the traffic generated by the broadcaster rather than being primarily centred on the numbers of viewers or listeners.

For satellite technologies, the most widely accepted measure of spectrum demand is slightly different. Rather than simply expressing the demand in MHz, the figures need to be expressed in MHz x Geostationary Orbital Slots, to reflect the reuse of spectrum across multiple slots.

The main definition used in this study is the Spectrum Demand that results from these calculations.

It is the spectrum required to carry the traffic offered, with a realistic demand profile and at an acceptable quality of service. In short, it is the spectrum demanded by consumers and users of the service.

Where applicable, exceptions are made and stated in the analyses for the individual services.

These definitions are applied consistently across the five High-Value Services.

We believe that this view of "demand," including allowance for a busy hour, busy neighbourhood and allowing for quality of service, is more useful than a view based on average traffic in an average location. It represents the true consumer-oriented view of what spectrum is required.

There is also an exception made in the specific case of FM radio, where demand is limited by the 20 MHz of spectrum that is compatible with the technology. For FM radio, the definition of "demand" used in this Report is constrained to fit within the spectrum that the technology currently offers.

Sensitivity Analysis and Alternative Measures of Demand

From a network operator viewpoint, there are additional sources of demand. These arise from considering how the demand is delivered.

The main issue is that the "demand," as defined above, is determined without taking into account the considerations for practical operations of a network. These may include considerations for minimum channel widths, network evolution planning and testing, network management, etc.

This aspect of the definition may have a particularly large impact on the spectrum demand of terrestrial communications services, especially where there is much change in technology and traffic, such as cellular service.

The box below outlines several further sources of spectrum demand, which would take the projections from a consumer-oriented view of demand to an operator-oriented view.

Factors not included in the main definition of "Demand for Spectrum" used for High-Value Services, but included in sensitivity analysis

The first sensitivity analysis includes the additional spectrum required to allow for the channels' bandwidths to have discrete quantities, and for minimum allocations per network operator, including some for new operators where there is a likelihood of them entering the market and a fair chance of them becoming economically viable.

The second sensitivity analysis then adds to this the spectrum required by network operators for network strategy and management:

  • Spectrum held for technologies arriving soon, but not yet deployed;
  • Spectrum required in case a technology substitution is faster or slower than expected;
  • Spectrum held for recently useful but now unused/fully obsolete technologies;
  • Spectrum needed for testing prior to launch of new services.

For Cellular and Fixed Wireless Access, where these factors are particularly relevant, the report assesses the effect of including these additional sources of spectrum demand. This is presented as a sensitivity analysis after the main results for each of these two services.

Finally, it is worth setting out some of the sources of demand for spectrum, which have been excluded from the scope of the Study.Footnote 7

These include:

  • Additional spectrum that would enable operators to increase revenue, reduce costs or increase market power;
  • Additional spectrum that would be required to allow large numbers of new entrants to attempt to compete (with the likelihood that some may not be economically viable);
  • Any fallow spectrum, i.e. which may be allocated to licensees but which cannot be used;Footnote 8
  • Spectrum for guard bands.

Interpreting the Modelling Results:

Finally, before moving on to consider assumptions and results, it is advisable to bear in mind the following characteristics of a model-based quantitative approach to projecting the demand for spectrum:

  • The highly quantitative nature of the model means that it generates specific numbers for all of its projections, based on the data and assumptions that are used as foundations for these projections.
  • Projections are point estimates, rather than ranges. They serve to illustrate one potential trajectory for spectrum demand.
  • Projections are most reliable if treated as directional indicators and/or estimates of the scale of likely changes in spectrum demand, i.e. will it stay about the same, double, halve, or do something else? Therefore, projections are not exact predictions, but good indicators of the trend.

3.2.3 Other Services

As mentioned previously, for the other services, analysis was conducted based on information from the inventory report, stakeholder input, interviews with Industry and review of secondary research material. Each service section identifies the specific sources of information used and the approach used to determine the impact on spectrum and to identify pressure points.

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4. Alternative Scenarios that May Unfold over the Next Five Years

4.1 Drivers of Change

For the High-Value Services, the primary drivers throughout the time frame of 2010-2015 are anticipated to be:

  • Growth in traffic per device, particularly data;
  • Continuing investment by networks, e.g. increasing the number of base stations and sectors;
  • For Cellular services: migration to newer technologies and the related improvements in spectral efficiency;
  • For Satellite Communications: growth in the number of users;
  • For Broadcast: migration to higher bit-rate channels, e.g. HDTV and continued growth in the total number of channels offered;
  • For Backhaul: some continuing substitution from microwave to fibre for high-traffic links.

4.2 Defining the Future Scenarios and their Demand for Capacity

A set of projections have been developed for these — and a range of other — drivers and used these to generate projections for a central scenario, referred to in this report as Scenario 1, or Growth as Usual. This is the scenario that we would consider to be a plausible extrapolation of past trends in Canada.

Alongside the Growth As Usual scenario, a range of alternative futures have been considered, and for two of these alternatives, full alternative sets of projections for the spectrum demand throughout the 2010-2015 time frame have been generated. These two alternative scenarios are as follows:

  • Scenario 2: Wire-Free World. Canada experiences an even more rapid progression to higher levels of wireless communications. Demand grows at a somewhat faster rate than in Growth As Usual. Also, new technologies are adopted slightly faster.
  • Scenario 3: Low Investment. Canada's appetite for new technology doesn't disappear, but it abates somewhat. Demand continues to grow, at about the rate exhibited in Scenario 1, but networks, operators and even consumers are unable or unwilling to invest in infrastructure and technology at the rate projected in Growth As Usual. New licences and release of spectrum are somewhat slower to be introduced than in Growth As Usual.

Scenario 2 (Wire-Free World) is designed to assess the likely demand for spectrum, if demand, services and technologies develop faster than in Scenario 1. It is somewhat of a "high-spectrum demand scenario."

In contrast, Scenario 3 (Low Investment) is focused on what might happen if investment slows down. It is not particularly focused on generating high or lowFootnote 9 cases for spectrum demand; it is, instead, focused on varying the level of investment.

Taken together, the three scenarios cover the range of outcomes that can be considered sensible, for planning purposes, i.e. they include both a "most likely" trajectory, plus a "high-spectrum demand trajectory."

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5. Assumptions for Forecasting Demand

In addition to the factors mentioned in the preceding sections of the report, the major assumptions used to determine the demand for services and spectrum are identified in each of the relevant sections of the services covered.

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