Decisions Concerning the Renewal of 2300 MHz and 3500 MHz Licences

DGSO-004-13
November 2013

Spectrum Management and Telecommunications

Posted on Industry Canada website: November 14, 2013




1. Intent

1. Through the release of this document, Industry Canada hereby announces the decisions resulting from the consultation process undertaken in DGSO-006-12 — Consultation on Renewal Process for 2300 MHz and 3500 MHz Licences.

2. All comments and reply comments received in response to the consultation are available on Industry Canada’s website at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf10204.html.




2. Mandate

3. The Minister of Industry, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations, with due regard to the objectives of the Telecommunications Act, is responsible for spectrum management in Canada. As such, the Minister is responsible for developing goals and national policies for spectrum resource use and for ensuring effective management of the radio frequency spectrum resource.

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3. Background

4. In October 2012, Industry Canada published DGSO-006-12 — Consultation on Renewal Process for 2300 MHz and 3500 MHz Licences (hereinafter referred to as "the consultation"), which sought comments on the renewal of spectrum licences for Wireless Communication Services (WCS) and Fixed Wireless Access (FWA). These services operate in the frequency bands 2305-2320 MHz and 2345-2360 MHz (2300 MHz band) and in 3475-3650 MHz (3500 MHz band) respectively. Three auctions were held to award licences in these bands: a simultaneous multiple-round ascending auction in 2004, a two‑phase residual auction in 2004 and 2005, and a sealed-bid, second-price auction in 2009. Licences awarded under these three auctions begin to expire in March 2014, and are within the scope of this renewal process. In addition to comments on renewal options, comments were sought on proposed wording to reflect the change to the current deployment requirement and proposed changes to the licence term condition of licence.

5. Comments and/or reply comments were received from a total of 51 respondents, namely ABC Communications (ABC), AireNet Internet Solutions (AireNet), Andrews Wireless, AT&T, Axia SuperNet Ltd. (Axia), Bell Canada – Inukshuk Wireless Partnership – Rogers Communications Partnership (Inukshuk), BLURR Wireless, Canadian Network Operators Consortium Inc. (CNOC), Canadian Tower Corporation (Canadian Tower), Canwisp, ccRoute Inc. (ccRoute), Chatham Internet Access, Ciel Satellite Limited Partnership (Ciel), Cintek Inc. (Cintek), Cogeco Cable Inc. (Cogeco), Conférence régionale des Élu(e)s du Bas-Saint-Laurent (CRÉ), Eastlink, Ericsson Canada Inc. (Ericsson), ET Group, Genesis Networks Inc.(Genesis), GL Mobile Communications (GL Mobile), Global TD-LTE Initiative (GTI), Government of Alberta, Grey County, High Speed Crow Inc. (High Speed Crow), Huawei Canada, iTéract, King Township, La coalition des fournisseurs d’accès à Internet sans-fil du Québec (CFAISFQ), MTS Inc. and Allstream Inc. (MTS Allstream), Netago, Nextwave Wireless Inc. (Nextwave), Oxford County, Peace River Internet Society, Québecor Média inc. (Québecor), Radio Advisory Board of Canada (RABC), Routcom Inc. (Routcom), SaskTel, Shaw Communications (Shaw), Silo Wireless Inc. (Silo), Société de Participation Financière Eidos Canada Inc. (Eidos), Tbaytel, TEC Canada, TELUS Communications Company (TELUS), The Regional Municipality of Durham, The Regional Municipality of Halton, The Wisp Group and Wisp Internet Services Inc. (Wisp Group), Ultrafast Wireless, YourLink, Xplornet Communications Inc. (Xplornet), and ZTE Canada Inc. (ZTE).

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4.  Renewal Process for 2300 MHz Licences

6. The consultation sought comments on two proposed renewal options for 2300 MHz licences:

  1. Extend initial licence term for all licences (hereinafter referred to as "Option 1-Extend"):
    • – by three years for each licence, or;
    • – to a fixed date of December 2017.
  2. Make new licences available through a renewal process with 10-year terms for licences which are in compliance with all conditions of licence, including deployment (hereinafter referred to as "Option 2-Renew").

Summary of Comments

Comments from Licensees

7. The majority of the licensees that commented were in favour of Option 1-Extend. Inukshuk, TELUS, Nextwave and YourLink noted that the continued lack of an equipment ecosystem in this band has made it difficult to deploy services and that a licence extension is warranted. TELUS stated that "development of a new AT&T driven mobile LTE ecosystem would presumably support deployment in Canada by a December 2017 deadline." It also noted that this timeline is aggressive but achievable.

8. Chatham Internet Access was the only licensee that supported Option 2-Renew, stating that this option "provides increased certainty, transparency and predictability for licensee" and that any short‑term extension would "penalize" those licensees that have deployed services and would like to gain access to additional spectrum.

Comments from Other Respondents

9. Netago, AireNet, Andrews Wireless, Genesis, GL Mobile, High Speed Crow, Routcom, Silo, Canadian Tower, MTS Allstream, ABC, CNOC, and Canwisp supported an extension for all licences. They submitted that there has been a lack of equipment for this band, and support extending the licence term to allow time to meet the deployment requirements. Québecor, SaskTel, Eastlink, ccRoute, Axia SuperNet, BLURR Wireless, Eidos, Xplornet, and the Government of Alberta were in support of Option 2-Renew. Both Eastlink and Québecor would like the Department to reclaim unused licences, and re-auction this spectrum with the intent of providing advanced mobile services. All of those supporting Option 2-Renew agreed that 10 years would be an appropriate term for new licences issued through the renewal process.

Discussion

10. The 2300 MHz band is allocated for both fixed and mobile use; however, at the time of auction, it was expected that the predominant use would be for wireless broadband to homes. There was no equipment ecosystem at that time and it was expected that equipment would likely become available over the term of the licences. Today, the equipment ecosystem has yet to be developed. Consequently, there has been limited deployment in the band; only one licensee has implemented a system. That said, recent developments in the United States have resolved interference issues with adjacent Satellite Digital Audio Radio Service (SDARS) systems, which should facilitate the development of an equipment ecosystem for the band. 

11. Licensees in the 2300 MHz band have an expectation of renewal, unless a breach of licence condition occurs (e.g. failure to meet the required level of service), a fundamental reallocation of spectrum to a new service is required, or an overriding policy need arises. For the 2300 MHz band, there is no fundamental reallocation required nor has an overriding policy need arisen. Therefore, a 10-year term for new licences issued through this renewal process is appropriate.

12. Industry Canada notes that it has already extended the Implementation of Spectrum UsageFootnote 1requirement twice in order to provide licensees with more time to meet the deployment criteria. However, given the increasing demand for mobile spectrum, Industry Canada considers it timely to reinforce to all spectrum licensees the importance of deployment conditions.

13. Current spectrum licensees must demonstrate that their conditions of licence have been satisfied before the expiry of their current licence in order to be eligible for a new licence.

14. Therefore, only those licences that meet their licence conditions will be eligible for a new licence in the applicable licence area. The conditions that will apply to the new spectrum licences in this band are set out in Annex B. It is anticipated that many licences will not be eligible for a new licence through this renewal process and, as such, many will be returned to Industry Canada. Any returned licences will be assigned through a subsequent licensing process that will be the subject of a future consultation. Therefore, this decision will provide other interested parties with the opportunity to obtain access to this spectrum at a future date.

Decision

Where all conditions of licence for the current 2300 MHz licences have been met, licensees will be eligible to be issued a new 10-year term spectrum licence in the same applicable area through the renewal process. The conditions of licence are set out in Annex B.

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5. Renewal Process for 3500 MHz Licences

15. The consultation sought comments on two proposed renewal options for 3500 MHz licences:

  1. Extend initial licence term for all licences (hereinafter referred to as "Option 1-Extend"):
    • – by three years for each licence, or;
    • – to a fixed date of December 2017.
  2. Make new licences available through a renewal process with 10-year terms for licences which are in compliance with all conditions of licence, including deployment (hereinafter referred to as "Option 2-Renew").

Summary of Comments

Comments from Licensees

16. Inukshuk, TELUS, Tbaytel, ABC, Cintek, and Cogeco supported Option 1-Extend, favouring a three-year extension for all licensees, citing a lack of equipment, as well as international uncertainty and technological uncertainty surrounding the band as justification. TELUS and ABC both commented that granting a short-term extension would deter licensees from deploying temporary and/or uneconomical fixed links just to meet deployment requirements and secure a long-term renewal. Specifically, ABC was concerned that uneconomical rollouts will "damage the competitive landscape" for local Internet service providers (ISPs).

17. Both Inukshuk and TELUS suggested changing the allocation of the band. Inukshuk would like the Department to launch a consultation regarding the band plan by early 2014, in order to add a mobile allocation before licensees deploy services. TELUS stated that after the extension, the entire band should expire, be returned to the Department on December 31, 2017, and be re-auctioned as a new mobile band (based on a possible future consultation). Its reasoning is that "FWA spectrum in Canada is not well synergized with any other market or ecosystem" and that the "transition of FWA spectrum to mobile broadband spectrum in Canada represents a fundamental reallocation to a new service." It argued that there must be no windfall for current licensees, noting that TELUS itself holds 124 licences in the 3500 MHz band.

18. Chatham Internet Access, ccRoute, Netago, and Xplornet supported Option 2-Renew, arguing that fixed system equipment exists today that can be used to meet deployment requirements and offer services to Canadians. Chatham Internet Access added that this option "provides increased certainty, transparency and predictability for licensees," rather than Option 1-Extend, which would "penalize those who have deployed and those who need more spectrum for network upgrades and expansions." It further added that a lack of equipment is not a viable excuse and stated that plenty of equipment is currently available.

19. Xplornet proposed that the Department treat the urban and rural areas differently, stating that larger licensees are mainly interested in the urban spectrum and smaller Internet service providers need more access to rural spectrum. Netago also suggested separate licensing policies for more rural Tier 4 areas in order to "make spectrum available to those committed to provision of broadband services to rural/remote areas."

Comments from Other Respondents

20. The majority of non-licensee respondents supported the enforcement of the deployment requirements. Axia SuperNet, Eastlink, Québecor, SaskTel, Eidos, CNOC, Canwisp, Government of Alberta, Canadian Tower, AireNet, Andrews Wireless, Genesis, GL Mobile, High Speed Crow, Routcom, Oxford County, and Silo supported Option 2-Renew, stating that a lack of an equipment ecosystem is not a valid excuse given that equipment is available today. Some specifically noted that Industry Canada has certified many models of radio equipment in the band 3450-3650 MHz.

21. CRÉ, ET Group, Grey County, King Township, TEC Canada, The Regional Municipality of Durham, the Wisp Group and Ultrafast Wireless supported a shorter extension to December 2016, the enforcement of the deployment conditions and the return of unused licences at that time.

 22. Eastlink and Québecor suggested that the Department reclaim unused licences, and re-auction this spectrum for advanced mobile services. Eastlink argued that incumbents would likely deploy LTE using the 700 MHz and 2500 MHz bands before the 2300 MHz and 3500 MHz bands.

23. Many non-licensee respondents expressed the importance of this spectrum to provide broadband Internet service in rural areas, and suggested splitting the spectrum for urban and rural areas.

24. King Township, Oxford County, TEC Canada, The Regional Municipality of Durham, Ultrafast Wireless and the Wisp Group suggested that splitting the urban and rural areas will make rural spectrum more affordable and that "adopting policies that will encourage holders of existing 3500 MHz spectrum licences to return to Industry Canada the rural areas of their licences that are not currently deployed so that Industry Canada can make those areas available to wireless Internet service providers that are willing to deploy in rural Canada."

25. AireNet, Andrews Wireless, Genesis, GL Mobile, High Speed Crow, Routcom, Silo, Canadian Tower and Peace River Internet Society suggested separate licensing policies for more rural Tier 4 areas in order to "make spectrum available to those committed to provision of broadband services to rural/remote areas."

26. Eastlink commented that this spectrum will be important for the delivery of advanced mobile services, but also acknowledged that "it is critical that regional service providers that have proven their commitment to rural deployment have an opportunity to access this valuable spectrum if the Department is committed to meeting the policy objectives of these bands."

27. Québecor supported Option 2-Renew, but stressed that those licensees who are renewed should only be permitted to use these licences for continued fixed services, and not receive any windfall by being able to deploy advanced mobile services.

Discussion

28. Licensees in the 3500 MHz band have an expectation of renewal, unless a breach of licence condition occurs (e.g. failure to meet the required level of service), a fundamental reallocation of spectrum to a new service is required, or an overriding policy need arises.

29. In Canada, the 3500 MHz band differs from the 2300 MHz band in that there has been a fixed equipment ecosystem available for licensees to deploy (e.g. WiMAX). However, there has been limited deployment to date. Licensees that have deployed services in the 3500 MHz band are generally providing broadband Internet services, predominantly in rural areas. Internationally, there are developments to allow mobile broadband services in the band, and so some Canadian licensees have stated they have not deployed, or only partially deployed, in the hope that Canada will also allocate the band for mobile broadband use.

30. In addition, Industry Canada’s Commercial Mobile Spectrum Outlook document, released in March 2013, identified 3500 MHz as a source for commercial mobile spectrum, to provide additional capacity in order to meet consumer demand, particularly in urban areas. The introduction of commercial mobile services in this band would be considered a fundamental reallocation and, therefore, impacts the decision on the length of licence terms for renewals. Furthermore, a fundamental reallocation would require that spectrum be returned (i.e. not renewed).

31. Comments from the consultation highlighted two competing demands: demand for mobile broadband services in urban areas and demand for fixed wireless broadband services in rural areas. 

32. The characteristics of the 3500 MHz spectrum are such that it cannot cover a large area without significant infrastructure. Therefore, although it is well suited to meet the increasing demand for mobile use in urban areas, it is less economical to use for mobile services in rural areas. In contrast, the spectrum is well suited to meet the needs for fixed services in rural areas. Consequently, the Department is currently of the view that a future consultation would address the fundamental reallocation of the band to mobile services in urban areas, while permitting continued fixed operation in rural areas. 

33. Due to the uncertainty in the band regarding a potential mobile allocation and the need for further consultation, the Department will not be issuing any new long-term licences in the band. With respect to which licences should be renewed, the Department notes that it has already extended the Implementation of Spectrum Usage requirement twice in order to provide licensees more time to meet the deployment criteria. Therefore, Industry Canada considers that it is appropriate that licence conditions on renewal be applied in order to ensure the ongoing efficient use of the spectrum.

34. Therefore, where all conditions of licence have been satisfied, licensees will be eligible for a new one-year licence, which will be eligible for renewal for further one-year terms, until a decision on the potential mobile allocation has been made. Eligibility for continued renewal will be subject to meeting conditions of licence, the potential reallocation of the band and an overriding policy need. This decision allows for currently deployed operations to continue, while permitting time for a public consultation on the future of use this band.

35. As noted in the consultation,Footnote 2 licensees in the 3500 MHz band are hereby given advance notification that changes to the existing allocation and band plan may be considered in the next two to three years. As well, licensees are hereby given notice that, in the event of a fundamental reallocation, Industry Canada would require that spectrum be returned (i.e. not renewed).

36. Current spectrum licensees must demonstrate that their conditions of licence have been satisfied before the expiry of their licence in order to be eligible for a new licence.

Decision

Where all conditions of licence for the current 3500 MHz licences have been met, licensees will be eligible to be issued a new one-year term spectrum licence through the renewal process. These licences will be eligible for renewal as indicated in the conditions of licence. A consultation will be held on the potential future use of the band, which may result in a reallocation.

Discussion Concerning Future Consultation

37. As part of the future consultation, the Department is considering classifying each of the current Tier 4 licence areas as Large Urban, Medium Urban or Rural, based on Statistics Canada’s definitions for population centres.Footnote 3 Annex C provides a complete listing of all the Tier 4 areas and their potential classification.

38. The Department anticipates that the demand for mobile services will be very high in the Large Urban areas and, therefore, existing operations in these areas will likely be subject to a transition policy. It is also anticipated that there may be limited demand for mobile services in Rural areas and, therefore, these licences will likely continue to provide fixed services for a long time. It remains unclear as to what the demand for mobile services may be in the Medium Urban areas. As previously stated, the classification of tiers, and the corresponding anticipated level of demand for mobile services, will be subject to a future consultation.

39. The Department anticipates treating tiers classified as "Urban" and "Rural" differently, such that fixed services could continue in Rural areas, whereas in Urban areas, existing fixed licences would be subject to transition out of the band. Such a transition would only apply if the existing fixed services interfere with the mobile operations in the vicinity. Although some existing fixed operations are near Urban areas, the vast majority are not. As a result, the Department expects that the majority of existing systems in tiers classified as "Urban" would not require transition out of the band for many years.

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6. Proposed Condition of Licence and Alternative Deployment Metric for the 2300 MHz and 3500 MHz Bands

40. When the 2300 MHz and 3500 MHz bands were first designated, they were expected to be used primarily for the provision of broadband wireless access (BWA). Thus, the deployment requirements are currently designed for access technology, where coverage to population is an appropriate metric to ensure that the spectrum is being used.

41. As noted in the consultation, some licensees have been deploying fixed links that do not service an end user directly (e.g. point-to-point microwave deployments). This type of use is permitted in these bands, but does not currently count towards the deployment requirement.

42. Therefore, for point-to-point or point-to-multipoint deployments (not servicing an end user directly), the Department proposed an alternate deployment requirement of 15 links per million population per Tier 4 area for both the 2300 MHz and the 3500 MHz bands. The Department proposed that this would be deemed a level of usage acceptable for the purposes of demonstrating compliance with this condition of licence. The Department also proposed amendments to the current condition of licence on deployment, in order to simplify the language and clarify that Industry Canada will use the Tier 4 Deployment Requirements for 2300 MHz and 3500 MHz Licences (refer to Annex A), and to clarify that the deadline was extended to the end of the 10-year licence term. The Department advised licensees regarding these requirements, in a letter in March 2012,Footnote 4 which are considered to be the existing deployment requirements.

Summary of Comments

Comments from Licensees

43. Inukshuk, ABC, Cintek, and Cogeco supported the proposed alternative requirement. Xplornet commented that "the ability to meet the requirements for spectrum use by simply deploying fixed links (only one link in many cases) is poor public policy and leaves spectrum being inefficiently used, if at all, for at least 10 years." TELUS stated that this would not be an effective use of this spectrum, and that it is expected that there will be far more important use in near future. It added that other bands are more suitable for backhaul. There were few comments on the proposed amendment to the condition of licence.

Comments from Other Respondents

44. Axia and Québecor supported the proposed alternative requirement, with certain conditions. Axia wanted the required number of links to be increased and Québecor wanted the addition of a stipulation that current licensees issued new licences through this process would not be permitted to deploy mobile services in the future. However, the vast majority of respondents opposed the proposed alternative requirement, arguing that these bands were intended to provide broadband Internet access and that licensees have had sufficient time to deploy.

Discussion

45.  The current policy permits the use of fixed links without servicing an end user. However, given that the majority of respondents were opposed to the alternative metric, including those that have indicated they are using the spectrum for this very purpose, Industry Canada agrees that the metric by which to measure deployment should remain unchanged. Therefore, although this type of deployment is permitted under the current policy, it will not count towards the deployment requirement. As noted in the licensing frameworkFootnote 5 under which these licences were originally issued, "The Department is of the view that the spectrum is a public resource which should be used in ways that serve the public interest." The deployment of services to end users will be considered by the Department in assessing the minimum population coverage in each licence area as outlined in Annex A.

Decision

Industry Canada will amend the current condition of licence using the proposed wording in the consultation, to reflect the adoption of the existing deployment requirements in Annex A, as well as the extension of the deadline to the end of the 10-year licence term. Deployment of links without servicing an end user will not count towards the deployment requirement.




7.  Fees and Service Standards

46. The Framework for Spectrum Auctions in CanadaFootnote 6 (hereinafter 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." A separate consultation will be launched to determine the spectrum licence fees that will apply to new licences issued through this renewal process.

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8. Conditions of Licence for new 2300 MHz and 3500 MHz Licences

47. This section discusses the conditions of licence that will apply to new 2300 MHz and 3500 MHz licences issued through this renewal process. The conditions, as they will appear on new licences, are attached as Annex B.

Licence Term

48. This condition has been updated as per decisions announced in the Auction Framework and as set out in sections 4 and 5 of this document.

Licence Transferability and Divisibility

49. This condition has been updated as per Industry Canada’s Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum.Footnote 7 The updated wording will reflect the fact that the 2300 MHz band is commercial mobile spectrum, whereas the 3500 MHz band is not considered commercial mobile spectrum as the latter band is allocated for fixed use only.

Spectrum Aggregation Limit

50. This condition is no longer applicable.

Eligibility

51.  This condition has been updated as per amendments made to the Telecommunications ActFootnote 8 on June 29, 2012. To ensure consistency, minor changes were made to the wording to remove the reference to "radiocommunication carriers."

Displacement of Incumbents

52. There will be no changes to this condition of licence.

Radio Station Installations

53. The Department has updated the wording of this condition to refer to CPC-2-0-03, Radiocommunication and Broadcasting Antenna Systems.

Provision of Technical Information

54. The Department has updated the wording of this condition to refer to CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services.

Compliance with Legislation, Regulations and Other Obligations

55. Licensees are required to abide by the requirements set out for use of the radio frequency spectrum in general and for the specific frequency band being licensed. These requirements are fundamental, and in some cases, they are legislative requirements.

56. Upon further review of this condition of licence, Industry Canada is of the view that the removal of the reference to the International Telecommunication Union’s (ITU) Radio Regulations from the original wording would be clearer. Although conformity with respect to the ITU’s Radio Regulations and related international agreements continues to apply to Canada, the relevant requirements for licensees are included in the Canadian Table of Frequency Allocations, the Radiocommunication Regulations, policies and conditions of licence. The Canadian Table and the associated general information will need to be revised from time to time. Such revisions occur when changes to the ITU’s Table are made as a result of World Radiocommunication Conferences or particular Canadian radio service requirements. The Canadian Table of Frequency Allocations reflects international changes while taking into account Canadian requirements to ensure that government, commercial and private users have full flexibility to develop new radio applications.

Technical Considerations, and International and Domestic Coordination

57. The Department has combined the Technical Considerations and International and Domestic Coordination conditions into one condition.

Lawful Intercept

58.  The Department has updated the wording for this condition to bring the wording in line with current technologies, namely by updating references to "circuit-switched voice telephony" technology. The condition of licence on lawful intercept was first introduced in 1996 for Personal Communications Services (PCS) spectrum licences. Since then, this condition has been applied to most spectrum licences where the licensee was a radiocommunication carrier, as this is the only class of licensee that carries public traffic to and from the public networks (telephone and Internet).

59.  The rationale for removing the reference to a specific technology was to ensure that the requirement would remain meaningful in a Long Term Evolution (LTE) network environment, which uses packet-switched technology instead of circuit-switched technology. The intent was not to expand the requirement to additional services.

60. Given the above, Industry Canada notes that removing the reference to "circuit-switched" while maintaining the reference to "voice telephony systems" would serve the original intent while effectively maintaining the scope of the condition, similar to that of other services, namely the requirement to intercept voice communications.

61. Furthermore, the term "radiocommunication carrier" is being replaced with "telecommunication common carrier" to ensure consistency with the Telecommunications Act and related regulations, noting that both terms have similar definitions.

62. The licensee may request the Minister of Industry to forbear from enforcing certain assistance capability requirements for a limited period of time.

Research and Development

63. This condition of licence will apply to 2300 MHz licences, but may be amended during the licence term.

64. This condition will not apply to 3500 MHz licences issued through this renewal process given the one-year terms and the future consultation on the band.

Implementation of Spectrum Usage

65.  This condition will apply to 2300 MHz and 3500 MHz licences issued through this renewal process. Licensees will be required to maintain deployment levels indicated in Annex A.

Mandatory Antenna Tower and Site Sharing

66. This condition continues to apply. It now appears in the main body of the conditions of licence instead of as an appendix, as on previous licences.

Annual Reporting

67. The Annual Reporting condition of licence will continue to apply to 2300 MHz and 3500 MHz licences.

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9. Next Steps

68.  The Department will launch a further consultation regarding a possible addition of mobile allocation to the 3500 MHz band. Comments will be sought on topics including, but not limited to, a possible new band plan and corresponding transition policy, as well as the establishment of a different classification of existing tier areas to support the deployment of different types of services.

69.  Licences that are not renewed will be reassigned through a subsequent licensing process. This subsequent licensing process will be the subject of a future consultation.

70. The Department will also launch a consultation on fees applicable to new licences issued through the renewal process in both bands.




Annex A — Tier 4 Deployment Requirements for 2300 MHz and 3500 MHz Licences

1. These deployment requirements take into consideration the population size of the large and medium population centres within each tier, as well as the population density. All Tier 4 areas with a population density of 50 people/km2 or above have a coverage requirement of 50%.

2. Licensees must demonstrate compliance with the listed minimum population coverage for their licence area by the end of their licence term.

Tier 4 Deployment Requirements for 2300 MHz and 3500 MHz Licences
Tier 4Service Area NamePopulationMinimum Population Coverage
4-001St. John’s223,38150%
4-002Placentia19,46420%
4-003Gander/Grand Falls/Windsor159,52610%
4-004Corner Brook/Stephenville82,69430%
4-005Labrador28,21730%
4-006Charlottetown86,79330%
4-007Summerside48,50130%
4-008Yarmouth62,59140%
4-009Bridgewater/Kentville140,12440%
4-010Halifax389,09450%
4-011Truro56,09540%
4-012Amherst36,09140%
4-013Antigonish/New Glasgow76,89840%
4-014Sydney147,04430%
4-015Saint John140,33150%
4-016St. Stephen27,01215%
4-017Fredericton152,32330%
4-018Moncton151,24030%
4-019Miramichi/Bathurst169,18130%
4-020Grand Falls28,52820%
4-021Edmundston28,37430%
4-022Campbellton32,00620%
4-023Matane118,11415%
4-024Mont-Joli41,77015%
4-025Rimouski52,04915%
4-026Rivière-du-Loup86,34015%
4-027La Malbaie29,40350%
4-028Chicoutimi-Jonquière217,18740%
4-029Montmagny59,52020%
4-030Québec780,74550%
4-031Sainte-Marie48,20520%
4-032Saint-Georges67,33730%
4-033Lac Mégantic24,92330%
4-034Thetford Mines42,87130%
4-035Plessisville21,89425%
4-036La Tuque16,30030%
4-037Trois-Rivières252,36830%
4-038Louiseville22,22630%
4-039Asbestos30,20420%
4-040Victoriaville49,45750%
4-041Coaticook13,36230%
4-042Sherbrooke216,18230%
4-043Windsor16,44330%
4-044Drummondville96,53350%
4-045Cowansville27,04430%
4-046Farnham27,86125%
4-047Granby86,54150%
4-048St-Hyacinthe83,95750%
4-049Sorel55,99450%
4-050Joliette135,89330%
4-051Montréal3,756,70950%
4-052Sainte-Agathe-des-Monts61,19710%
4-053Hawkesbury62,39830%
4-054Mont-Laurier/Maniwaki45,92810%
4-055Ottawa1,202,83950%
4-056Pembroke77,75715%
4-057Arnprior/Renfrew30,39715%
4-058Rouyn-Noranda40,51230%
4-059Notre-Dame-du-Nord17,42715%
4-060La Sarre20,27230%
4-061Amos24,98230%
4-062Val D’Or43,48730%
4-063Roberval/Saint-Félicien61,57340%
4-064Baie-Comeau48,42340%
4-065Port-Cartier/Sept-Îles47,40740%
4-066Chibougamau40,40020%
4-067Cornwall65,92150%
4-068Brockville69,96830%
4-069Gananoque12,90140%
4-070Kingston162,71150%
4-071Napanee39,50940%
4-072Belleville145,08540%
4-073Cobourg59,69930%
4-074Peterborough151,08150%
4-075Lindsay41,91130%
4-076Minden17,81930%
4-077Toronto5,635,82850%
4-078Alliston99,20730%
4-079Guelph/Kitchener580,96350%
4-080Fergus26,07250%
4-081Kincardine173,66315%
4-082Listowel/Goderich84,49115%
4-083Fort Erie28,45150%
4-084Niagara-St. Catharines326,52050%
4-085Haldimand/Dunnville35,93650%
4-086London/Woodstock/St. Thomas607,56450%
4-087Brantford122,15650%
4-088Stratford49,49650%
4-089Chatham74,20950%
4-090Windsor/Leamington376,21350%
4-091Wallaceburg32,82030%
4-092Sarnia124,82550%
4-093Strathroy41,91450%
4-094Barrie274,35450%
4-095Midland44,11450%
4-096Gravenhurst/Bracebridge54,50330%
4-097North Bay102,83140%
4-098Parry Sound19,42230%
4-099Elliot Lake31,26135%
4-100Sudbury172,60550%
4-101Kirkland Lake34,74025%
4-102Timmins43,90630%
4-103Kapuskasing41,66225%
4-104Kenora/Sioux Lookout61,92040%
4-105Iron Bridge22,56725%
4-106Sault Ste. Marie81,65450%
4-107Marathon29,46830%
4-108Thunder Bay121,37250%
4-109Fort Frances22,07235%
4-110Steinbach45,87930%
4-111Winnipeg722,20650%
4-112Lac du Bonnet53,53715%
4-113Morden/Winkler38,69730%
4-114Brandon92,73620%
4-115Portage la Prairie20,07350%
4-116Dauphin79,72910%
4-117Creighton/Flin Flon21,36025%
4-118Thompson44,06630%
4-119Estevan44,56220%
4-120Weyburn21,65840%
4-121Moose Jaw56,84425%
4-122Swift Current47,45325%
4-123Yorkton66,76020%
4-124Regina216,55840%
4-125Saskatoon237,31440%
4-126Watrous29,42615%
4-127Battleford91,09915%
4-128Prince Albert130,75725%
4-129Lloydminster30,71950%
4-130Northern Saskatchewan33,28615%
4-131Medicine Hat/Brooks89,05630%
4-132Lethbridge156,17140%
4-133Stettler/Oyen/Wainwright52,08920%
4-134High River58,71340%
4-135Strathmore38,33240%
4-136Calgary994,62850%
4-137Red Deer151,54825%
4-138Wetaskiwin/Ponoka46,93125%
4-139Camrose34,57330%
4-140Vegreville14,40735%
4-141Edmonton943,01150%
4-142Edson/Hinton45,05230%
4-143Bonnyville73,72925%
4-144Whitecourt27,13550%
4-145Barrhead22,02550%
4-146Fort McMurray43,04650%
4-147Peace River82,67320%
4-148Grande Prairie75,59825%
4-149East Kootenay56,28415%
4-150West Kootenay76,63015%
4-151Kelowna299,94735%
4-152Vancouver2,201,44650%
4-153Hope21,93025%
4-154Victoria389,24750%
4-155Nanaimo165,74140%
4-156Courtenay106,01540%
4-157Powell River26,88945%
4-158Squamish/Whistler59,78135%
4-159Merritt15,36240%
4-160Kamloops92,02440%
4-161Ashcroft16,50315%
4-162Salmon Arm46,18445%
4-163Golden7,15440%
4-164Williams Lake41,14925%
4-165Quesnel/Red Bluff24,61340%
4-166Skeena63,90240%
4-167Prince George95,33440%
4-168Smithers40,77020%
4-169Dawson Creek60,71730%
4-170Yukon28,67420%
4-171Nunavut26,74520%
4-172Northwest Territories37,28820%
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Annex B — Conditions of Licence for new 2300 MHz and 3500 MHz Licences

1. The following conditions will apply to all 2300 MHz and 3500 MHz licences issued through this renewal process. It should be noted that the licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations, as amended from time to time. For example, the Minister continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister may do so for reasons including furtherance of the policy objectives set out in section 7 of the Telecommunications Act and the policy objectives related to this band as set out in SMSE-002-12. Such action would normally only be undertaken after consultation.

2. Licensees must be fully aware of their obligations with respect to licence terms and conditions. Industry Canada will monitor compliance and take any necessary action to ensure compliance and to enforce the provisions of the Radiocommunication Act and the Radiocommunication Regulations.

1. Licence Term (2300 MHz only)

3. The term of this licence is 10 years. At the end of this term, the licensee will have a high expectation that a new licence will be issued for a subsequent term through a renewal process 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.

4. The process for issuing licences after this term and any issues relating to renewal, including the terms and conditions of the new licence, will be determined by the Minister of Industry following a public consultation.

2. Licence Term (3500 MHz only)

5.  The term of this licence is one year. At the end of this term, the licensee will have a high expectation that a new licence will be issued for a subsequent one-year term 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. Licensees are hereby given advance notification that changes to the existing allocation and band plan may be considered as discussed in DGSO-004-13, Decisions Concerning the Renewal of 2300 MHz and 3500 MHz Licences, which may result in a fundamental reallocation.

3.   Licence Transferability and Divisibility (2300 MHz Only)

6. This licence is transferable in whole or in part (divisibility), in both bandwidth and geographic dimensions, subject to Industry Canada’s approval. A Subordinate Licence may also be issued in regard to this licence, subject to Industry Canada’s approval.

7. The licensee must make the Transfer Request in writing to Industry Canada. The Transfer Request will be treated as set out in Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time.

8. The licensee must apply in writing to Industry Canada for approval prior to implementing any Deemed Transfer, which will be treated as set out in CPC-2-1-23. The implementation of a Deemed Transfer without the prior approval of Industry Canada will be considered a breach of this condition of licence.

9. Should the licensee enter into any Agreement that provides for a Prospective Transfer with another holder of a Licence for commercial mobile spectrum (including any Affiliate, agent or representative of the other licence holder), it must apply in writing to Industry Canada for review of the Prospective Transfer within 15 days of entering into the Agreement, which will be treated as set out in CPC-2-1-23. Should Industry Canada issue a decision indicating that the Prospective Transfer is not approved, it will be a breach of this condition of licence for a licensee to remain in an Agreement that provides for the Prospective Transfer for a period of more than 90 days from the date of the decision.

10. In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23.

11. All capitalized terms have the meaning ascribed to them in CPC-2-1-23. 

4. Licence Transferability and Divisibility (3500 MHz Only)

12. This licence is transferable in whole or in part (divisibility), in both bandwidth and geographic dimensions, subject to Industry Canada’s approval. A Subordinate Licence may also be issued in regard to this licence, subject to Industry Canada’s approval.

13. In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23.

14. All capitalized terms have the meaning ascribed to them in CPC-2-1-23. 

5. Eligibility

15.  The licensee must comply on an ongoing basis with the applicable eligibility criteria of the Radiocommunication Regulations. The licensee must notify the Minister of Industry of any change that would have a material effect on its eligibility. Such notification must be made in advance for any proposed transactions within its knowledge. Where information is required related to reviewing eligibility, licensees should refer to Client Procedures Circular CPC-2-0-15, Canadian Ownership and Control, as amended from time to time.

6.   Displacement of Incumbents

16.  The licensee must comply with the transition policy outlined in Appendix 3 of the Policy and Licensing Procedures for the Auction of Spectrum Licences in the 2300 MHz and 3500 MHz Frequency Bands (Revised July 2004).

7.   Radio Station Installations

17.  The licensee must comply with Client Procedures Circular CPC-2-0-03, Radiocommunication and Broadcasting Antenna Systems, as amended from time to time.

8.  Provision of Technical Information

18. When Industry Canada requests technical information on a particular station or network, the licensee must provide the information in accordance with the definitions, criteria, frequency and timelines specified in the request. For further information, refer to Client Procedures Circular CPC-2-1-23, Licensing Procedure for Spectrum Licences for Terrestrial Services, as amended from time to time.

9.  Compliance with Legislation, Regulations and Other Obligations

19. The licensee is subject to, and must comply with, the Radiocommunication Act and the Radiocommunication Regulations, as amended from time to time. The licensee must use the assigned spectrum in accordance with the Canadian Table of Frequency Allocations and the spectrum policies applicable to this band, as amended from time to time. The licence is issued on condition that all representations made in relation to obtaining this licence are all true and complete in every respect.

10.  Technical Considerations, and International and Domestic Coordination

20. The licensee must comply on an ongoing basis with the technical aspects of the appropriate Radio Standards Specifications (RSS) and Standard Radio System Plans (SRSP), as amended from time to time. Where applicable, the licensee must use its best efforts to enter into mutually acceptable agreements with other parties for facilitating the reasonable and timely development of their respective systems, and to coordinate with other licensed users in Canada and internationally.

21. The licensee must comply with the obligations arising from current and future frequency coordination agreements established between Canada and other countries and shall be required to provide information or take actions to implement these obligations as indicated in the applicable SRSP. Although frequency assignments are not subject to site licensing, the licensee may be required through the appropriate SRSP to furnish all necessary technical data for each relevant site.

11.  Lawful Intercept

22.  The licensee operating as telecommunication common carrier using the spectrum for voice telephony systems must, from the inception of service, provide for and maintain lawful interception capabilities as authorized by law. The requirements for lawful interception capabilities are provided in the Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications (Rev. Nov. 95). These standards may be amended from time to time.

23. The licensee may request the Minister of Industry to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister, following consultation with Public Safety Canada, may exercise the power to forbear from enforcing a requirement or requirements where, in the opinion of the Minister, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

12.  Research and Development (2300 MHz Carriers Only)

24.  Those licensees operating as telecommunication common carriers must invest, as a minimum, 2 percent of its adjusted gross revenues resulting from its operations in this spectrum, averaged over the term of the licence, in eligible research and development activities related to telecommunications. Eligible research and development activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act. Adjusted gross revenues are defined as total service revenues, less inter-carrier payments, bad debts, third party commissions, and provincial and goods and services taxes collected. Businesses with less than $5 million in annual gross operating revenues are exempt from research and development expenditure requirements, except where they have affiliations with licensees that hold other licences with the research and development condition of licence and where the total annual gross revenues of the affiliated licensees are greater than $5 million. To facilitate compliance with this condition of licence, the licensee should consult Industry Canada’s  GL-03, Guidelines for Compliance with the Radio Authorization Condition of Licence Relating to Research and Development.

13.  Implementation of Spectrum Usage

25. Licensees must maintain coverage at the levels indicated in Annex A of DGSO-004-13, Decisions Concerning the Renewal of 2300 MHz and 3500 MHz Licences.

14.  Mandatory Antenna Tower and Site Sharing

26. The licensee must comply with the mandatory antenna tower and site sharing requirements set out in Client Procedures Circular CPC-2-0-17, Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements, as amended from time to time.

15.  Annual Reporting

27.  The licensee must submit an annual report for each year of the licence term, which includes the following information:

  • a statement indicating continued compliance with all conditions of licence;
  • an update on the implementation and spectrum usage within the area covered by the licence;
  • existing audited financial statements with an accompanying auditor’s report;
  • a report of the research and development expenditures as set out in these conditions of licence. Industry Canada may request an audited statement of research and development expenditures with an accompanying auditor’s report at its discretion (2300 MHz carriers only);
  • supporting financial statements where licensees are claiming an exemption based on an annual gross revenue of less than $5 million (2300 MHz carriers only);
  • a copy of any existing corporate annual report for the licensee’s fiscal year with respect to the authorization; and
  • other information related to the licence as specified in any notice updating the reporting requirements as issued by Industry Canada.

28. All reports and statements are to be certified by an officer of the company and submitted, in writing, within 120 days of the licensee’s fiscal year‑end. Confidential information provided will be treated in accordance with subsection 20(1) of the Access to Information Act.

Reports are to be submitted to Industry Canada at the following address:

Manager, Emerging Networks
Spectrum Management Operations Branch
Industry Canada
235 Queen Street
Ottawa, ON K1A 0H5

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Annex C — Potential Tier 4 Classifications for 3500 MHz Licences

1. Based on Statistics Canada’s definitions for population centres (see Statistics Canada, 2011 Census Dictionary, http://www12.statcan.gc.ca/census-recensement/2011/ref/dict/geo049a-eng.cfm). Tier 4 service areas that have a large population centre would be classified as Large Urban tiers. Tier 4 areas that do not have a large population centre, but have a medium population centre, would be classified as Medium Urban tiers. All other tiers would be considered Rural tiers.

Potential Tier 4 Classifications for 3500 MHz Licences
Tier Service Area NameClassification
4-001St. John’sLarge Urban
4-002PlacentiaRural
4-003Gander/Grand Falls/WindsorRural
4-004Corner Brook/StephenvilleRural
4-005LabradorRural
4-006CharlottetownMedium Urban
4-007SummersideRural
4-008YarmouthRural
4-009Bridgewater/KentvilleRural
4-010HalifaxLarge Urban
4-011TruroRural
4-012AmherstRural
4-013Antigonish/New GlasgowRural
4-014SydneyMedium Urban
4-015Saint JohnMedium Urban
4-016St. StephenRural
4-017FrederictonMedium Urban
4-018MonctonLarge Urban
4-019Miramichi/BathurstRural
4-020Grand FallsRural
4-021EdmundstonRural
4-022CampbelltonRural
4-023MataneRural
4-024Mont-JoliRural
4-025RimouskiMedium Urban
4-026Rivière-du-LoupRural
4-027La MalbaieRural
4-028Chicoutimi-JonquièreLarge Urban
4-029MontmagnyRural
4-030QuébecLarge Urban
4-031Sainte-MarieRural
4-032Saint-GeorgesRural
4-033Lac-MéganticRural
4-034Thetford MinesRural
4-035PlessisvilleRural
4-036La TuqueRural
4-037Trois-RivièresLarge Urban
4-038LouisevilleRural
4-039AsbestosRural
4-040VictoriavilleMedium Urban
4-041CoaticookRural
4-042SherbrookeLarge Urban
4-043WindsorRural
4-044DrummondvilleMedium Urban
4-045CowansvilleRural
4-046FarnhamRural
4-047GranbyMedium Urban
4-048St-HyacintheMedium Urban
4-049SorelMedium Urban
4-050JolietteMedium Urban
4-051MontréalLarge Urban
4-052Sainte-Agathe-des-MontsRural
4-053HawkesburyRural
4-054Mont-Laurier/ManiwakiRural
4-055OttawaLarge Urban
4-056PembrokeRural
4-057Arnprior/RenfrewRural
4-058Rouyn-NorandaRural
4-059Notre-Dame-du-NordRural
4-060La SarreRural
4-061AmosRural
4-062Val-d’OrRural
4-063Roberval/Saint-FélicienRural
4-064Baie-ComeauRural
4-065Port-Cartier/Sept-ÎlesRural
4-066ChibougamauRural
4-067CornwallMedium Urban
4-068BrockvilleRural
4-069GananoqueRural
4-070KingstonLarge Urban
4-071NapaneeRural
4-072BellevilleMedium Urban
4-073CobourgRural
4-074PeterboroughMedium Urban
4-075LindsayRural
4-076MindenRural
4-077TorontoLarge Urban
4-078AllistonMedium Urban
4-079Guelph/KitchenerLarge Urban
4-080FergusRural
4-081KincardineRural
4-082Listowel/GoderichRural
4-083Fort ErieRural
4-084Niagara-St. CatharinesLarge Urban
4-085Haldimand/DunnvilleRural
4-086London/Woodstock/St. ThomasLarge Urban
4-087BrantfordMedium Urban
4-088StratfordMedium Urban
4-089ChathamMedium Urban
4-090Windsor/LeamingtonLarge Urban
4-091WallaceburgRural
4-092SarniaMedium Urban
4-093StrathroyRural
4-094BarrieLarge Urban
4-095MidlandMedium Urban
4-096Gravenhurst/BracebridgeRural
4-097North BayMedium Urban
4-098Parry SoundRural
4-099Elliot LakeRural
4-100SudburyLarge Urban
4-101Kirkland LakeRural
4-102TimminsMedium Urban
4-103KapuskasingRural
4-104Kenora/Sioux LookoutRural
4-105Iron BridgeRural
4-106Sault Ste. MarieMedium Urban
4-107MarathonRural
4-108Thunder BayLarge Urban
4-109Fort FrancesRural
4-110SteinbachRural
4-111WinnipegLarge Urban
4-112Lac du BonnetRural
4-113Morden/WinklerRural
4-114BrandonMedium Urban
4-115Portage la PrairieRural
4-116DauphinRural
4-117Creighton/Flin FlonRural
4-118ThompsonRural
4-119EstevanRural
4-120WeyburnRural
4-121Moose JawMedium Urban
4-122Swift CurrentRural
4-123YorktonRural
4-124ReginaLarge Urban
4-125SaskatoonLarge Urban
4-126WatrousRural
4-127BattlefordRural
4-128Prince AlbertMedium Urban
4-129LloydminsterRural
4-130Northern SaskatchewanRural
4-131Medicine Hat/BrooksMedium Urban
4-132LethbridgeMedium Urban
4-133Stettler/Oyen/WainwrightRural
4-134High RiverRural
4-135StrathmoreRural
4-136CalgaryLarge Urban
4-137Red DeerMedium Urban
4-138Wetaskiwin/PonokaRural
4-139CamroseRural
4-140VegrevilleRural
4-141EdmontonLarge Urban
4-142Edson/HintonRural
4-143BonnyvilleRural
4-144WhitecourtRural
4-145BarrheadRural
4-146Fort McMurrayMedium Urban
4-147Peace RiverRural
4-148Grande PrairieMedium Urban
4-149East KootenayRural
4-150West KootenayRural
4-151KelownaLarge Urban
4-152VancouverLarge Urban
4-153HopeRural
4-154VictoriaLarge Urban
4-155NanaimoMedium Urban
4-156CourtenayMedium Urban
4-157Powell RiverRural
4-158Squamish/WhistlerRural
4-159MerrittRural
4-160KamloopsMedium Urban
4-161AshcroftRural
4-162Salmon ArmRural
4-163GoldenRural
4-164Williams LakeRural
4-165Quesnel/Red BluffRural
4-166SkeenaRural
4-167Prince GeorgeMedium Urban
4-168Smithers Rural
4-169Dawson Creek Rural
4-170Yukon Rural
4-171Nunavut Rural
4-172Northwest TerritoriesRural

Footnotes

Footnote 1

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09557.html

Return to footnote 1 referrer

Footnote 2

Consultation on Renewal Process for 2300 MHz and 3500 MHz Licences, http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10470.html

Return to footnote 2 referrer

Footnote 3

Statistics Canada, 2011 Census Dictionary, http://www12.statcan.gc.ca/census-recensement/2011/ref/dict/geo049a-eng.cfm

Return to footnote 3 referrer

Footnote 4

http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf05472.html

Return to footnote 4 referrer

Footnote 5

Refer to Section 6.13 of the Policy and Licensing Procedures for the Auction of Spectrum Licences in the 2300 and 3500 MHz Frequency Bands, available at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf06013.html.

Return to footnote 5 referrer

Footnote 6

Section 3.5 Licence Term, Framework for Spectrum Auctions in Canada, http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01626.html#section35

Return to footnote 6 referrer

Footnote 7

Framework Relating to Transfers, Divisions and Subordinate Licensing of Spectrum Licences for Commercial Mobile Spectrum, http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf10653.html

Return to footnote 7 referrer

Footnote 8

Telecommunications Act, http://laws-lois.justice.gc.ca/eng/acts/t-3.4/

Return to footnote 8 referrer

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