Consultation on Renewal Process for 2300 MHz and 3500 MHz Licences

7. Renewal Options and Considerations

54. Currently, most licences in the 2300 MHz and 3500 MHz bands are nearing the end of the term. As stated in the conditions of licence,Footnote 24 licensees have an expectation of renewal unless a breach of licence condition has occurred, a fundamental reallocation of spectrum to a new service is required, or an overriding policy need arises.

55. The following two options are presented with the purpose of soliciting comments. Note that different renewal options may be chosen for each band.

7.1 Option 1: Extend Initial Licence Term

56. The first proposed option is to issue an extension for all licences. This extension would also apply to the revised deployment requirement.

57. This option, which would provide licensees in the 2300 MHz band additional time to meet the revised deployment requirement, recognizes the current lack of available equipment in that band.

58. This option would also provide licensees in the 3500 MHz band additional time to meet the deployment requirements and acknowledges the potential international changes in the band plan. Equipment (e.g., WiMAX) has been available in this band; however, some licensees have not yet deployed because they prefer to wait for LTE equipment, which is expected to be available in the near future.

59. Within Option 1, Industry Canada proposes a choice between two possible variations for the extension. The first variation would extend the current terms by three years for all licensees. The second variation would extend all licence terms to the same fixed date, i.e., December 2017. This variation acknowledges the staggered licence expiry dates (between March 2014 and September 2016), which were a result of the elapsed time between the first and second auction. Both of these variations on the extension would provide increased certainty pertaining to band changes and equipment availability. The current conditions of licenceFootnote 25 would remain in effect, with the exception of the deployment requirement (see Section 4.3.3), pending the decisions resulting from this consultation. The deadline for deployment would be extended for the same period (i.e., three years) if the current proposal is adopted.

60. Licensees would have to demonstrate compliance with the revised deployment requirements by the end of the proposed extended licence term.

61. For this option, fees would not be applicable, both because the initial term of the auctioned licences would be changed from 10 years to 13 years, and because the auction bid payment would still stand in lieu of licence fees.

7.2 Option 2: Issue Licences for New Term

62. Under the second proposed option, a new licence would be issued for a new term. This would be done through the renewal process, assuming that the licensee is in compliance with the conditions of licence—including the revised deployment requirementsFootnote 26—at the end of the initial term.

63. If this option is chosen, Industry Canada proposes that the new term will be for 10 years and advises licensees that the licence terms and conditions, including authorized frequencies, may change during that term. As stated in section 6.4, changes may include review of, and possibly revision to, the spectrum utilization policy, the band plan and the authorized frequencies.

64. For instances in which licensees can demonstrate that they have deployed infrastructure but coverage to the population or the number of links in the tier in question is less than the requirement, licensees could be permitted to apply for a new licence for the portion of the service area that has coverage. At the discretion of the Department, upon receipt of the application to modify the existing licences, new subdivided licences could be issued if coverage to the population meets or exceeds the deployment requirement within the reduced service area. The resulting unassigned subdivided licences would be returned to Industry Canada to be made available at a later date. Any reductions to service areas (in order to meet the deployment requirement) would be made at the discretion of the Department.

65. For instances in which licensees can submit plans demonstrating that they can achieve compliance in the near future, Industry Canada may consider issuing a one-year licence on a case by case basis.

66. For instances in which deployment is nil, licensees would not be eligible for a new licence under the renewal process.

67. If licensees meet their deployment requirement, no additional deployment requirement will apply to a new licence issued under the renewal process.

68. This option enforces the conditions of licence in place at the time of initial issuance (two extensions notwithstanding), and provides increased certainty, transparency and predictability for licensees. It also balances stakeholder interests by providing an opportunity for licensees to deploy, and it allows Industry Canada to reassign unused licences.

69. A licensing process would be established for all licences, other than those assigned through the renewal process.

70. In terms of the spectrum licence fees, the Framework for Spectrum Auctions in Canada (herein referred to as the Auction Framework) states: “For licences issued through a renewal process, licence fees that reflect some measure of market value will apply.”Footnote 27 Should new licences be issued under Option 2, a separate consultation will be launched to propose annual licence fees that would come into effect once established.


8. Proposed Changes to the Licence Term Condition of Licence

71. The licence term condition was updated in the Auction Framework (revised in March 2011)Footnote 28 in order to clarify that licensees have a high expectation of renewal. The rationale for this update can be found in section 3.3.2 of Decisions on the Revisions to the Framework for Spectrum Auctions in Canada and Other Related Issues.Footnote 29 The proposed wording of the updated condition of licence is as follows:

This licence will expire on the date indicated above, with a high expectation to renew licences for subsequent terms unless a breach of licence condition occurs; a fundamental reallocation of spectrum to a new service is required, or, an overriding policy need arises. (Note added emphasis.)

The process for issuing licences after this term and any issues relating to renewal will be determined by the Minister of Industry following a public consultation.

Industry Canada invites comments on the options for renewal in the 2300 MHz and 3500 MHz bands. Refer to the following questions (as well as Question 1, found on page 5 of this consultation) when submitting comments.

(2) For the 2300 MHz band, which of the two options is preferred?

(3) For the 3500 MHz band, which of the two options is preferred?

In responding to the following questions, provide supporting rationale for each band separately.

(4) For Option 1 (detailed in section 7.1 of this consultation):

  • A. Should licence terms be extended?
    • a. If so, should they be extended by the same length for all licensees?
      • i. Is three years an appropriate extension?
    • b. Or, should the licence terms be extended to a fixed date for all licensees?
      • i. Would December 2017 be an appropriate extension date?
  • B. Should the deployment requirement also be extended to the end of the proposed term?
  • C. In considering an extension of the licence term, do you expect equipment in the 2300 MHz band to become available soon enough to achieve the deployment requirements by December 2017?
  • D. In considering an extension of the licence term, do you expect LTE equipment in the 3500 MHz band to become available soon enough to achieve the deployment requirements by December 2017?
  • E. Are there any additional considerations that should be taken into account by Industry Canada?

(5) For Option 2 (detailed in section 7.2 of this consultation):

  • A. Given the potential upcoming changes, is 10 years an appropriate term for new licences issued through the renewal process?
  • B. Should deployment requirements apply to new licences under the renewal process? If so, what should the deployment requirements be?
  • C. Are there any additional matters that should be considered by Industry Canada when issuing a new licence for a new term?

(6) Are there any other options for the licence renewal process that Industry Canada should consider?

(7) Industry Canada invites comments on the proposed wording of the condition of licence related to the licence term (detailed in section 8 of this consultation).


9. Next Steps

72. Industry Canada will review the comments received and publish its decision.


10. Submitting Comments

73. Respondents are requested to provide their comments in electronic format (WordPerfect, Microsoft Word or Adobe PDF) to the following email address: ic.spectrumoperations-operationsduspectre.ic@canada.ca.

74. Written submissions should be addressed to Manager, Emerging Networks, DGSO, Industry Canada, 300 Slater Street, Ottawa, Ontario, K1A 0C8.

75. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (DGSO-006-12). Parties should submit their comments no later than December 17, 2012, to ensure consideration. After the close of the comment period, all comments received will be posted on Industry Canada’s Spectrum Management and Telecommunications website at http://www.ic.gc.ca/spectrum.

76. Industry Canada will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted until January 30, 2013.

77. After the initial comment period, Industry Canada may, at its discretion, request additional information if needed to clarify significant positions or new proposals. Should additional information be requested, the reply comment deadline may be extended.


11. Obtaining Copies

78. All of the spectrum-related documents referred to in this consultation are available on Industry Canada’s Spectrum Management and Telecommunications website at http://www.ic.gc.ca/spectrum.

79. For further information concerning the process outlined in this document or any other related matters, contact:

Manager, Emerging Networks
Spectrum Management Operations Branch
Industry Canada
300 Slater Street, 15th floor
Ottawa, Ontario  K1A 0C8
Telephone: 613-998-9707
Fax: 613-991-3514
E-mail: ic.spectrumoperations-operationsduspectre.ic@canada.ca

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