Bell Mobility Request to Exchange Certain 2500 MHz Licences with Industry Canada in Order to Enable Contiguity

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2015-06-18

Ms. Fiona Gilfillan
Director General
Spectrum Licensing Policy Branch
Industry Canada
235 Queen Street
Ottawa, Ontario
K1A OH5

Dear Ms. Gilfillan,

  1. As Industry Canada is aware, Bell Mobility participated in the Department's recently concluded auction of 2500 MHz spectrum. As the Department is also aware, given Bell's incumbent status in the auction and the rules applicable to incumbent licensees therein, the Company was effectively locked into concluding the auction with its pre‑existing Block "A" licences, in addition to any other licences acquired through the auction. Ultimately, through its participation in the competitive spectrum auction, Bell acquired a number of licences in Block "F' of the band plan. Further the final allocation auction results, subsequently released by Industry Canada, show that several licences in Block "G" were not assigned in the auction and, as a result, remain in the hands of the Department. The purpose of this letter is to request, in the interests of maximizing contiguity and hence spectral efficiency, that the Department exchange seven Block "A" spectrum licences, currently held by Bell, for seven corresponding Block "G" spectrum licences which remain in Industry Canada's hands. Specifically, the seven licences in question are: Kingston (3‑020), Kootneys (3‑050), Nanaimo (3‑054), Courtney (3‑055), Thompson Cariboo (3‑056), Prince George (3‑057) and Dawson Creek (3‑058).
  2. Bell believes that the proposed exchange, increasing the contiguity of its licences, would be very beneficial for both Industry Canada, specifically, and Canadians, in general, for a number of reasons. First, as the Department's Licensing Framework for Broadband Radio Service (BRS) — 2500 MHz Band, January 2014, (Framework) noted at paragraph 119, contiguous spectrum is simply more efficient. From its intimate knowledge of the wireless industry, the Department is well aware that the goal of efficient spectrum utilization has never been more important than it is today, given the tremendous and accelerating growth in mobile data traffic. Indeed, paragraph 124 of the Framework noted this when it stated that:
    Additional guarantees of contiguity: With the growing importance of spectrum for daily uses there is an increasing demand for its availability. As part of its policy objective, Industry Canada seeks to facilitate the efficient use of this scarce public resource, which includes assigning licences as contiguous when it is possible to do so.
  3. Further, Annex "D" of the Framework, titled "The Combinatorial Clock Auction (CCA) Format", states at paragraph 97, that:
    Recognizing the efficiency gains from having contiguous blocks of spectrum, Industry Canada will assign bidders contiguous spectrum within a product whenever possible.
  4. The statement, coming as it does in an annex discussing the CCA format, suggests to us that a key objective of employing a CCA auction format, was to achieve contiguity whenever possible. Bell believes that the proposed exchange would therefore be supportive of the Department's goal of facilitating the efficient use of spectrum to the greatest extent possible by achieving contiguity whenever possible.
  5. Such an exchange would also be beneficial for Canadians in that the resulting contiguity would enhance the speed of mobile wireless services, provided to customers, while also significantly increasing the capacity capable of being supported by the contiguous spectrum. Bell believes that the enhanced speed and capacity enabled by the proposed exchange would clearly be in the best interests of Canadians given the growth in mobile data services and customers' ever growing thirst for faster speeds and more mobile broadband content. Also, in the case of the seven licences in question, for the most part they are located in rural areas which mean that the benefits of the enhanced speed and capacity, resulting from such an exchange, are specifically directed toward Canadians residing in predominately rural areas. Bell Mobility believes that such enhancements to mobile broadband service in rural areas are clearly to the benefit of Canadians living in, as well as those travelling through, those rural areas.
  6. In addition, facilitating contiguous spectrum, such as that resulting from the proposed exchange, would also enhance competitive alternatives for Canadians and would therefore be supportive of the Department's goal of enhancing competition and choice in both urban and rural areas. In this instance competition would be increased since the contiguity enabled by the exchange would enable Bell to be a more effective competitor to its wireless rivals thereby increasing effective competitive choices for Canadians and furthering the Department's goal of increasing wireless competition in general.
  7. Regarding the impact on other licensees, Bell notes that the Department's final allocation results, from the 2500 MHz auction, indicate that Xplornet Communications is the adjoining licensee in Block "H" of the band plan. Given that Block "H" is TDD, while Block "G" is FDD, Bell does not believe therefore that the proposed exchange would have any adverse impact on Xplornet. With respect to other licensees, as noted above, Bell believes that the proposed exchange would serve to enhance competition for other licensees and that this would be in the best interest of Canadians as well as consistent with Departmental policy.
  8. Bell also believes that the Department's condition of licence, addressing the transferability of the 2500 MHz licences, is supportive of this request. In this regard, paragraph 290 of the Framework addressed the transferability of the licences and, with respect to exchanges of licences, specifically noted that:
    Industry Canada may consider requests from licensees to exchange spectrum blocks in the same geographic area provided that the exchange does not result in the spectrum aggregation limit being exceeded or an increase in spectrum licence holdings for existing licensees that already exceed the aggregation limit. Industry Canada may grant such requests based on the merits of the proposal.
  9. While in this case Bell is proposing to exchange licences with the Department, as opposed to another licensee, we believe that the same considerations should apply. Namely, that the spectrum aggregation limit is not being exceeded since an equivalent number of licences are being returned to the Department and that the benefits of the exchange to Canadians and the Department, as outlined above, weigh in favour of approval of this request.
  10. Bell therefore respectfully requests that, for the reasons addressed above, that the Department approve its proposal to exchange seven Block "A" licences, currently held by Bell, for the corresponding seven Block "G" licences in the Department's hands. As noted above such an exchange would enable contiguity, in several licence areas, and would therefore be in the interests of Canadians in general as well as being supportive of Industry Canada's policy objectives in the industry.
  11. Finally, Bell recognizes that, in the interests of transparency, the Department may wish to post this letter, to enable other interested parties to comment on its proposal, and notes that it has no objections in this regard.
  12. Sincerely,
    [Original signed by B. Chapman]
    Barry Chapman
    Vice‑President, Regulatory Affairs

    cc: Peter Hill
    Heather Hall

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