Consultation on a Licensing Framework for Residual Spectrum Licences in the 700 MHz, 2500 MHz, 2300 MHz, PCS and 1670-1675 MHz Bands

July 2017


1. Intent

1. Through the release of this paper, Innovation, Science and Economic Development Canada (ISED) is hereby initiating a consultation on a licensing framework for unassigned or returned spectrum licences in the 700 MHz, Wireless Communications Services (WCS), Personal Communications Services (PCS), 1670-1675 MHz (I Block) and Broadband Radio Services (BRS)- 2500 MHz bands. Comments are being sought on all aspects related to the licensing of this spectrum.

2. Background

2. ISED, 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 of Innovation, Science and Economic Development is responsible for developing goals and national policies for spectrum resource use and for ensuring effective management of the radio frequency spectrum resource.

3. In developing a licensing framework for residual spectrum licences in the above- mentioned bands, ISED has been guided by the policy objectives of the Telecommunications Act, and the Spectrum Policy Framework for Canada (SPFC), which states that the objective of the spectrum program is to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource.  These objectives and enabling guidelines as listed in the SPFC continue to be relevant for guiding ISED in delivering its mandate of spectrum management. ISED will also be guided by the general approaches and processes outlined in the Framework for Spectrum Auctions in Canada (FSAC).

4. ISED recognizes that the Canadians want three things from their telecom services: high quality services, ubiquitous coverage and affordable prices. Mobile communications have become integrated into the daily lives of Canadians as they increasingly rely on mobile services to access a variety of mobile applications, such as multi-media services, social networking and Internet browsing, on a day-to-day basis to do business, connect with others, and to manage finances, health and homes.

5.Through the Innovation and Skills Plan and its focus on skills, research, technology and commercialization, program simplification, and investment and scale, the Government of Canada is committed to promoting innovation-led growth across all sectors of the Canadian economy. Today's economy is digital. The ubiquity of digital technologies and services across sectors is a defining feature of this digital economy. This spectrum will support the development of Canada's digital economy and the Innovation and Skills Plan's priorities by enabling all Canadians to participate in the digital economy.  This spectrum will also allow Canadian companies to take advantage of the latest technologies to better compete globally. Consequently, ISED's objectives for the allocation of residual spectrum licences are:

  • to foster innovation and investment
  • to support sustained competition, so that consumers and businesses benefit from greater choice
  • to facilitate deployment and timely availability of services across the country, including rural areas

3. Band plan and available licences

6. In accordance with the FSAC, should a licence not receive a bid during an auction, ISED may make this licence available at a later date. Available licences, including any licences that were forfeited after the close of the auction, may be offered in a subsequent re-auction or through an alternative process (such as a first-come, first-served process).

7. ISED is proposing to make the following licences available through a residual auction process.

3.1 700 MHz band

8. The auction of residual licences for Mobile Broadband Services (MBS) in the 700 MHz band was held in August 2015, in accordance with the Licensing Framework for Residual Spectrum Licences in the 700 MHz and AWS-3 Bands. At the conclusion of the auction, three licences remained unassigned (depicted in figure 1 below, shown in blue, and as shown in table 1).

Figure 1: 700 MHz band plan

Available spectrum (the long description is located below the image)
Description of Figure 1

This figure shows the five blocks of paired spectrum (namely, blocks A, B and C in the Lower 700 MHz band and blocks C1 and C2 in the Upper 700 MHz band) of the Canadian band plan for the 700 MHz band. The blocks highlighted in blue represent the available spectrum for this licensing process.

Table 1: Available frequency blocks and service areas
Tier Service Area Name Population Frequency Block C1 (10 MHz)
4-170 Yukon 33,926 746–751 MHz/777–782 MHz 5 + 5 MHz
4-171 Nunavut 29,597 746–751 MHz/777–782 MHz 5 + 5 MHz
4-172 Northwest Territories 41,102 746–751 MHz/777–782 MHz 5 + 5 MHz

3.2 2500 MHz band

9. The auction of spectrum licences for Broadband Radio Services (BRS) in the band 2500‑2690 MHz was held in May 2015, in accordance with the Licensing Framework for Broadband Radio Service (BRS) – 2500 MHz Band (hereinafter referred to as the 2500 MHz Framework). At the conclusion of the auction, 16 licences remained unassigned. It is proposed that these licences, along with the 2500 MHz licences, which were returned to ISED, be included in this auction for a total of 62 licences (see figure 2 and table 2). Spectrum available to be licensed includes 20 MHz (10+10) of paired spectrum in the A Block, 20 MHz (10+10) of paired spectrum in the G Block, 10 MHz of unpaired spectrum in the H Block, and 25 or 15 MHz of unpaired spectrum in I Block (including the respective 5 MHz restricted band). 

Figure 2: 2500 MHz band plan

2500 MHz band plan (the long description is located below the image)
Description of Figure 2

This figure shows the band plan for Broadband Radio Service (BRS) in the band 2500-2690 MHz. The blocks highlighted in blue represent the available spectrum for this licensing process.

Table 2: Available 2500 MHz frequency blocks and service areas
Tier Service Area Name Population Frequency MHz Block Pairing
3-020 Kingston 175,895 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-050 Kootenays 134,352 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-054 Nanaimo 185,404 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-055 Courtenay 114,583 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-056 Thompson/Cariboo 179,998 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-057 Prince George 187,639 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-058 Dawson Creek 65,542 2500-2510 MHz
2620-2630 MHz
10+10 A Paired
3-027 Guelph-Kitchener 696,463 2560-2570 MHz
2680-2690 MHz
10+10 G Paired
3-029 Niagara-St. Catharines 367,803 2560-2570 MHz
2680-2690 MHz
10+10 G Paired
3-030 London/Woodstock/St. Thomas 832,095 2560-2570 MHz
2680-2690 MHz
10+10 G Paired
3-051 Okanagan/Columbia 415,223 2560-2570 MHz
2680-2690 MHz
10+10 G Paired
3-053 Victoria 432,549 2560-2570 MHz
2680-2690 MHz
10+10 G Paired
3-001 Newfoundland and Labrador 514,711 2585-2595 MHz 10 H Unpaired
3-002 Prince Edward Island 140,204 2585-2595 MHz 10 H Unpaired
3-003 Mainland Nova Scotia 786,472 2585-2595 MHz 10 H Unpaired
3-004 Cape Breton 135,224 2585-2595 MHz 10 H Unpaired
3-005 Southern New Brunswick 172,318 2585-2595 MHz 10 H Unpaired
3-006 Western New Brunswick 217,159 2585-2595 MHz 10 H Unpaired
3-007 Eastern New Brunswick 360,145 2585-2595 MHz 10 H Unpaired
3-010 Chicoutimi-Jonquiere 368,254 2585-2595 MHz 10 H Unpaired
3-011 Eastern Townships 543,370 2585-2595 MHz 10 H Unpaired
3-014 Upper Outaouais 124,827 2585-2595 MHz 10 H Unpaired
3-016 Pembroke 112,950 2585-2595 MHz 10 H Unpaired
3-017 Abitibi 190,271 2585-2595 MHz 10 H Unpaired
3-018 Cornwall 67,288 2585-2595 MHz 10 H Unpaired
3-019 Brockville 84,038 2585-2595 MHz 10 H Unpaired
3-020 Kingston 175,895 2585-2595 MHz 10 H Unpaired
3-021 Belleville 195,564 2585-2595 MHz 10 H Unpaired
3-022 Cobourg 62,837 2585-2595 MHz 10 H Unpaired
3-023 Peterborough 206,161 2585-2595 MHz 10 H Unpaired
3-024 Huntsville 78,789 2585-2595 MHz 10 H Unpaired
3-028 Listowel/Goderich/ Stratford 133,542 2585-2595 MHz 10 H Unpaired
3-031 Chatham 100,110 2585-2595 MHz 10 H Unpaired
3-032 Windsor/Leamington 390,154 2585-2595 MHz 10 H Unpaired
3-033 Strathroy 171,946 2585-2595 MHz 10 H Unpaired
3-034 North Bay 126,606 2585-2595 MHz 10 H Unpaired
3-035 Sault Ste. Marie 132,116 2585-2595 MHz 10 H Unpaired
3-036 Sudbury 177,314 2585-2595 MHz 10 H Unpaired
3-037 Kirkland Lake 114,167 2585-2595 MHz 10 H Unpaired
3-038 Thunder Bay 222,900 2585-2595 MHz 10 H Unpaired
3-044 Edmonton-Makaoo,
AB* (3-044-007)
1,463,833 2585-2595 MHz 10 H Unpaired
3-045 Medicine Hat/Brooks 190,825 2585-2595 MHz 10 H Unpaired
3-046 Lethbridge 177,304 2585-2595 MHz 10 H Unpaired
3-047 Calgary 1,390,228 2585-2595 MHz 10 H Unpaired
3-048 Red Deer 240,348 2585-2595 MHz 10 H Unpaired
3-049 Grande Prairie 186,005 2585-2595 MHz 10 H Unpaired
3-050 Kootenays 134,352 2585-2595 MHz 10 H Unpaired
3-054 Nanaimo 185,404 2585-2595 MHz 10 H Unpaired
3-055 Courtenay 114,583 2585-2595 MHz 10 H Unpaired
3-056 Thompson/Cariboo 179,998 2585-2595 MHz 10 H Unpaired
3-057 Prince George 187,639 2585-2595 MHz 10 H Unpaired
3-058 Dawson Creek 65,542 2585-2595 MHz 10 H Unpaired
4-170 Yukon 33,926 2585-2595 MHz 10 H Unpaired
3-039 Winnipeg 1,033,768 2605-2620 MHz 15** I Unpaired
3-040 Brandon 174,484 2605-2620 MHz 15** I Unpaired
3-041 Regina 366,473 2605-2620 MHz 15** I Unpaired
3-042 Moose Jaw 100,244 2605-2620 MHz 15** I Unpaired
3-043 Saskatoon 562,780 2605-2620 MHz 15** I Unpaired
3-044 Edmonton 1,464,088 2595-2620 MHz 25** I Unpaired
4-170 Yukon 33,926 2595-2620 MHz 25** I Unpaired
4-171 Nunavut 29,597 2595-2620 MHz 25** I Unpaired
4-172 Northwest Territories 41,102 2595-2620 MHz 25** I Unpaired

*3-044-007 is a combination of Tier 3-044 and the Alberta portion of Tier 3-043.

** Includes restricted band.

3.3 2300 MHz (WCS) band

10. It is proposed that four 2300 MHz returned licences be included in this licensing process. Spectrum available to be licensed includes four licences of 30 MHz (15+15) of paired spectrum in the A Block.

Figure 3: 2300 MHz band plan

2300 MHz band plan (the long description is located below the image)
Description of Figure 3

This figure shows the band plan for the 2300 MHz band. The blocks highlighted in blue represent the available spectrum for this licensing process.

Table 3:  Available 2300 MHz frequency blocks and service areas
Tier Service Area Name Population Frequency MHz Block Pairing
4-065 Port-Cartier/Sept-Îles 47,167 2305-2320 MHz
2345-2360 MHz
15+15 A Paired
4-092 Sarnia* (4-092-002) 104,487 2305-2320 MHz
2345-2360 MHz
15+15 A Paired
4-119 Estevan 45,956 2305-2320 MHz
2345-2360 MHz
15+15 A Paired
4-171 Nunavut  29,597 2305-2320 MHz
2345-2360 MHz
15+15 A Paired

*4-092-002 is a subdivision of Tier 4-092 and includes Sarnia, Forest and the immediate vicinity.

3.4  1910-1915/1990-1995 MHz (PCS) band

11. The auction of PCS spectrum licences was held in May 2008, in accordance with the Licensing Framework for the Auction for Spectrum Licences for Advanced Wireless Services and other Spectrum in the 2 GHz Range (hereinafter referred to as the AWS-1 Framework). At the conclusion of the auction, two 1910-1915/1990-1995 MHz licences remained unassigned (see figure 4 and table 4). It is proposed that those licences for 10 MHz (5+5) of paired spectrum in the G Block be included in this licensing process.

Figure 4: 1910-1915/1990-1995 MHz (PCS) band plan

Figure 4: 1910-1915/1990-1995 MHz (PCS) band plan (the long description is located below the image)
Description of Figure 4

This figure shows the band plan for the 1910-1915/1990-1995 MHz band. The blocks highlighted in blue represent the available spectrum for this licensing process.

Table 4: Available PCS frequency blocks and service areas
Tier Service Area Name Population Frequency MHz Block Pairing
2-003 New Brunswick 749,623 1910-1915 MHz
1990-1995 MHz
5+5 G Paired
2-009 Northern Ontario 773,104 1910-1915 MHz
1990-1995 MHz
5+5 G Paired

3.5 1670-1675 MHz (I Block ) band

12. The auction of 1670-1675 MHz (I Block) spectrum licences was held in May 2008, in accordance with the AWS-1 Framework.At the conclusion of the auction, eight licences remained unassigned. It is proposed that those licences for 5 MHz of unpaired spectrum in I Block be included in this licensing process.

Figure 5: 1670-1675 MHz (I Block) band plan

Figure 5: 1670-1675 MHz (I Block) band plan (the long description is located below the image)
Description of Figure 1

This figure shows the 1670-1675 MHz (I Block) band plan. The block highlighted in blue represents the available spectrum for this licensing process.

Table 5: Available 1670-1675 MHz (I Block) frequency blocks and service areas
Tier Service Area Name Population Frequency MHz Block Pairing
2-001 Newfoundland and Labrador 514,711 1670-1675 MHz 5 I Unpaired
2-002 Nova Scotia and Prince Edward Island 1,061,900 1670-1675 MHz 5 I Unpaired
2-005 Southern Quebec 5,683,127 1670-1675 MHz 5 I Unpaired
2-006 Eastern Ontario and Outaouais 2,347,556 1670-1675 MHz 5 I Unpaired
2-008 Southern Ontario 10,091,045 1670-1675 MHz 5 I Unpaired
2-011 Saskatchewan 1,029,497 1670-1675 MHz 5 I Unpaired
2-012 Alberta 3,648,798 1670-1675 MHz 5 I Unpaired
2-013 British Columbia 4,399,805 1670-1675 MHz 5 I Unpaired

Q1 — ISED is seeking comments on the choice of licences being made available through this licensing process:

  1. are there other licences that should be made available in this licensing process? and
  2. are there any of these licences that should not be included in this licensing process?

4. Competitive measures

13. For the original 700 MHz auction process (2014) as well as in the auction of Residual Spectrum Licences in the 700 MHz and AWS-3 bands (2015), the condition of licence on spectrum aggregation limits was established as follows:

A limit of two paired spectrum blocks in the 700 MHz band within blocks A, B, C, C1 and C2 is applicable to all licensees.

A limit of one paired spectrum block within blocks B, C, C1 and C2 is applicable to all licensees that are large wireless service providers. Large wireless service providers are defined as companies with 10% or more of the national wireless subscriber market share, or 20% or more of the wireless subscriber market share in the province of the relevant licence area. The determination of subscriber market share will be based on the Canadian Radio-television and Telecommunications’ Communications Monitoring Report 2012.

These spectrum aggregation limits will continue for five years from the date of licence issuance. No transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum aggregation limits during this period. Any change in ownership or control of a licensee or any other agreement that has the effect of granting a right or interest in a 700 MHz licence to another licensee in this band may be considered as a licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Innovation, Science and Economic Development for any change that would have a material effect on its compliance with these spectrum aggregation limits. Such a request must be made in advance for any proposed transactions within its knowledge. At any time, at the request of ISED, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

14. For the 2500 MHz auction, the condition of licence on spectrum aggregation limits was established as follows:

A limit of 40 MHz in the 2500 MHz band, excluding the restricted bands at 2570‑2575 MHz and 2615-2620 MHz, applies to all licensees, with the exception of the Northwest Territories, Yukon and Nunavut service areas, where there is no limit.

The spectrum aggregation limit will continue for five years from the date of licence issuance. No transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum aggregation limit during this period. Any change in ownership or control of a licensee or any other agreement that has the effect of granting a right or interest in a 2500 MHz licence to another licensee in this band may be considered as a licence transfer for the purpose of this condition of licence, whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Innovation, Science and Economic Development for any change that would have a material effect on its compliance with the spectrum aggregation limit. Such a request must be made in advance for any proposed transactions within its knowledge. At any time, at the request of ISED, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

15. ISED still considers the spectrum aggregation limits to be an appropriate mechanism for managing the concentration of 700 MHz and 2500 MHz spectrum. Licences in 2585-2595 MHz, which were not offered during the 2500 MHz auction in 2015, would also be subject to the 40 MHz spectrum aggregation limit as outlined above. Maintaining the spectrum aggregation limits in accordance with the previous licensing processes would provide the opportunity for interested service providers to acquire licences and to improve their capacity to offer wireless communications.

16. For 2300 MHz (WCS) licences a spectrum aggregation limit of 100 MHz per service area was imposed in the original auction held in 2004. This limit applied during the first two years after the close of that auction. As the two-year time frame has elapsed, this condition of licence is no longer in effect. The PCS-G Block and I Block licences were offered during the 2008 AWS-1 auction that used set-asides as a pro‑competitive measure. However, the unsold licences being offered in this auction were not part of a set-aside spectrum and were not subject to any other competitive measures. ISED is not proposing pro‑competitive measures for the 2300 MHz, PCS and I Block licences offered in this auction.

Q2 — ISED is seeking comments on its proposals to:
  1. maintain the spectrum aggregation limits on the 700 MHz licences;
  2. maintain the spectrum aggregation limits on the 2500 MHz licences including newly available 2585-2595 MHz  licences; and
  3. not impose competitive measures on other licences issued through this licensing process.

5. Conditions of licence

17. The conditions of licence that would apply to all the bands in this licensing process are outlined in annexes A through E.

18. It should be noted that the licences are subject to the relevant provisions in the Radiocommunication Act and the Radiocommunication Regulations, and that the Minister of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (see paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development may do so for reasons including furtherance of the policy objectives related to the band. Such action would normally only be undertaken after consultation.

19.  It is also important to note that ISED recognizes that the current rate of wireless technology development is ever evolving and these developments, such as cognitive radio and dynamic spectrum access, are expected to provide opportunities for increased efficiency for spectrum access.  As a result, it is expected that although long-term spectrum licences will continue to provide priority access to spectrum, future consultations will likely explore the possibility of providing for opportunistic access to licensed spectrum.

5.1 Licence terms

20. The length of a licence term for spectrum licences provides the business certainty required to invest in the deployment of networks. ISED recognizes the increasing pace of change in the wireless industry. New technologies are emerging and will play critical roles in developing next generation wireless networks (5G), the expansion or accessibility of Wi-Fi networks and the growth of the Internet of Things (IoT), such as connected wearable devices, connected cars, connected homes, connected cities and the industrial Internet. With the increased pace of change, ISED recognizes that spectrum management practices are likely to change significantly within the next 20 years. ISED’s intention is to continue to be responsive to technological and marketplace changes and the continued need to manage the spectrum resource.

21. In the Framework for Spectrum Auctions in Canada, published in March 2011, ISED adopted a flexible approach in determining licence terms, which allows for licence terms up to 20 years. This decision was based on the recognition that licence terms in excess of 10 years would create greater incentive to invest in the telecommunications industry and for the industry itself to further invest in the development of network infrastructure, technologies and innovation. Longer terms are particularly appropriate when the use is unlikely to change. Auctioned licences also typically have a high expectation of renewal.

22. It is expected that bands that are used to provide commercial mobile services will evolve from the current 3G and 4G technologies to 5G technologies. ISED recognizes that the use cases are still emerging and 5G standards, equipment, and deployment plans are still under development. However, longer licence terms would be favourable for attracting the financial investments required to deploy 5G services and it is considered unlikely that any developments in technology would result in a change to another use that is incompatible with the current use of these frequency bands.

23. In consideration of the discussion above, and noting that the Minister of Innovation, Science and Economic Development retains the discretion to amend terms and conditions of licence at any time,  ISED is proposing 20 year licence terms for the 700 MHz, 2500 MHz, WCS and PCS bands in this licensing process. Given that there is less certainty regarding the use and ecosystem development for the 1670-1675 Block, ISED is proposing a 10 year licence term for those licences.

5.2 Deployment requirements

5.2.1 700 MHz, 2500 MHz, WCS and PCS licences

24. It is proposed that licensees be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use to provide services within the service area within 10 years of the initial issuance of the licence, as specified in annex F. The proposed levels are consistent with licences for the same bands issued through previous auctions.

25. Where the licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

5.2.2 1670-1675 MHz (I Block) licences

26. It is proposed that licensees be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use to provide services within the service area within eight years of the initial issuance of the licence, as specified in annex F. The proposed levels are consistent with licences for the same bands issued through previous auctions.

27. Where the licence is transferred during the initial eight years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

Q3 — ISED is seeking comments on:

  1. the likely timeframe for availability of equipment capable of providing access to licensed spectrum on an opportunistic basis;
  2. licence terms;
  3. the proposal to apply"" deployment levels to each of the licences as described in annex F; and
  4. the proposed conditions of licence as outlined in annexes A through F.

6. Auction format and rules

6.1 Auction format and timing

28. ISED intends that the auction format be fair and transparent for bidders and lead to an efficient assignment of spectrum. In the selection of an auction format and related rules, consideration is given to the characteristics of the spectrum being auctioned, for example, the quantity and size of the blocks, as well as the similarities and complementarities that may exist among the blocks.

29. When proposing an auction format, ISED considers the benefits of a particular auction format versus its complexity and the time required to run the auction. Although both CCA and SMRA formats provide stakeholders with the benefit of price discovery through the multiple rounds, these formats are more complex and time consuming for stakeholders. Given the nature of licences available in various bands for this auction process, ISED is proposing to use a sealed‑bid auction format. In this type of auction, all bidders simultaneously submit sealed bids, so that no bidder knows the bid of any other participant. The highest bidder wins the licence or the package of licences. 

30. To make this spectrum available in a timely manner and given the proposal for the simplified auction format, ISED is proposing that the auction for residual licences in the 700 MHz, 2500 MHz, 2300 MHz, PCS and I Block bands take place in accordance with the timelines proposed in the Proposed Table of Key Dates.

Q4 — ISED is seeking comments on its proposals:

  1. to use the sealed‑bid auction format for the auction of residual licences, and
  2. on the timelines set out in the Proposed Table of Key Dates.

6.2 Auction format for the 2500 MHz licences

31. ISED recognizes that given the large number of 2500 MHz licences being offered across many geographical areas, there may exist some complementarities or interdependencies between these regional licences. For example, complementarities may exist between the unpaired licences that cover most of Canada, with the exception of the major metropolitan areas. In addition, most available paired licences reside in British Columbia and cover the whole province outside Vancouver. As such, most available areas are bordering each other and exhibit a strong potential for complementarities. However, in a single round sealed-bid auction there is a risk that a bidder may win some, but not all of the licences required for its business plan. This is known as the exposure risk.

32. In the single round sealed-bid auction format, the exposure risk could be mitigated by including package bidding, specifically for the 2500 MHz licences. Each package bid would be treated as an all-or-nothing bid and the package would be awarded in its entirety, or not at all. By bidding on a package of licences rather than individual licences, the exposure risk would be reduced given that only the bid for the entire package could be a winning bid, and not the components of that package.

33. The disadvantage of allowing package bidding across all available 2500 MHz licences is that it may be difficult for bidders to assemble and price a large number of potential packages in the absence of price discovery rounds. There is also a risk that because of incompatibility of submitted packages, some bidders may not win any licences while, at the same time, significant number of licences will remain unsold. In order to mitigate this problem, ISED is proposing to allow package bidding separately for paired and unpaired 2500 MHz licences. It will be impossible to submit a single bid on a package that consists of both paired and unpaired licences. Moreover, for unpaired licences it is proposed to allow package bidding of the Tier 3 licences, but only within a Tier 2 area.

33. Table 6 shows all 2500 MHz licences divided in 15 Groups (A, B, C,…,O) for the purpose of package bidding.  If a bidder is interested in licences in a particular Group, it could submit bids on all desirable packages within this Group, but the number of such packages per Group should not exceed 500. It should be noted that only six of the groups have more than 500 possible options.

Table 6: Groups of 2500 MHz licences for the purpose of package bidding
Group Tier # Service Area Name Block Frequency MHz Pairing
A 3-020 Kingston A/A' 2500-2510 / 2620-2630 10+10 Paired
3-027 Guelph/Kitchener G/G' 2560-2570 / 2680-2690 10+10 Paired
3-029 Niagara-St. Catharines G/G' 2560-2570 / 2680-2690 10+10 Paired
3-030 London/Woodstock/St. Thomas G/G' 2560-2570 / 2680-2690 10+10 Paired
3-050 Kootenays A/A' 2500-2510 / 2620-2630 10+10 Paired
3-051 Okanagan /Columbia G/G' 2560-2570 / 2680-2690 10+10 Paired
3-053 Victoria G/G' 2560-2570 / 2680-2690 10+10 Paired
3-054 Nanaimo A/A' 2500-2510 / 2620-2630 10+10 Paired
3-055 Courtenay A/A' 2500-2510 / 2620-2630 10+10 Paired
3-056 Thompson /Cariboo A/A' 2500-2510 / 2620-2630 10+10 Paired
3-057 Prince George A/A' 2500-2510 / 2620-2630 10+10 Paired
3-058 Dawson Creek A/A' 2500-2510 / 2620-2630 10+10 Paired
B 3-001 Newfoundland and Labrador H2 2585-2595 10 Unpaired
C 3-002 Prince Edward Island H2 2585-2595 10 Unpaired
3-003 Mainland Nova Scotia H2 2585-2595 10 Unpaired
3-004 Cape Breton H2 2585-2595 10 Unpaired
D 3-005 Southern New Brunswick H2 2585-2595 10 Unpaired
3-006 Western New Brunswick H2 2585-2595 10 Unpaired
3-007 Eastern New Brunswick H2 2585-2595 10 Unpaired
E 3-010 Chicoutimi-Jonquière H2 2585-2595 10 Unpaired
F 3-011 Eastern Townships H2 2585-2595 10 Unpaired
3-014 Upper Outaouais H2 2585-2595 10 Unpaired
G 3-016 Pembroke H2 2585-2595 10 Unpaired
3-018 Cornwall H2 2585-2595 10 Unpaired
3-019 Brockville H2 2585-2595 10 Unpaired
3-020 Kingston H2 2585-2595 10 Unpaired
3-021 Belleville H2 2585-2595 10 Unpaired
3-022 Cobourg H2 2585-2595 10 Unpaired
3-023 Peterborough H2 2585-2595 10 Unpaired
H 3-017 Abitibi  H2 2585-2595 10 Unpaired
I 3-024 Huntsville H2 2585-2595 10 Unpaired
3-028 Listowel/Goderich/Stratford H2 2585-2595 10 Unpaired
3-031 Chatham H2 2585-2595 10 Unpaired
3-032 Windsor / Leamington H2 2585-2595 10 Unpaired
3-033 Strathroy H2 2585-2595 10 Unpaired
J 3-034 North Bay H2 2585-2595 10 Unpaired
3-035 Sault Ste. Marie H2 2585-2595 10 Unpaired
3-036 Sudbury H2 2585-2595 10 Unpaired
3-037 Kirkland Lake H2 2585-2595 10 Unpaired
3-038 Thunder Bay H2 2585-2595 10 Unpaired
K 3-039 Winnipeg I2 2605-2620 15* Unpaired
3-040 Brandon I2 2605-2620 15* Unpaired
L 3-041 Regina I2 2605-2620 15* Unpaired
3-042 Moose Jaw I2 2605-2620 15* Unpaired
3-043 Saskatoon I2 2605-2620 15* Unpaired
M 3-044 Edmonton-Makoo, AB**
(3-044-007)
H2 2585-2595 10 Unpaired
3-044 Edmonton I 2595-2620 25* Unpaired
3-045 Medicine Hat / Brooks H2 2585-2595 10 Unpaired
3-046 Lethbridge H2 2585-2595 10 Unpaired
3-047 Calgary H2 2585-2595 10 Unpaired
3-048 Red Deer H2 2585-2595 10 Unpaired
3-049 Grande Prairie H2 2585-2595 10 Unpaired
N 3-050 Kootenays H2 2585-2595 10 Unpaired
3-054 Nanaimo H2 2585-2595 10 Unpaired
3-055 Courtenay H2 2585-2595 10 Unpaired
3-056 Thompson / Cariboo H2 2585-2595 10 Unpaired
3-057 Prince George H2 2585-2595 10 Unpaired
3-058 Dawson Creek H2 2585-2595 10 Unpaired
O 4-170 Yukon H2 2585-2595 10 Unpaired
4-170 Yukon I 2595-2620 25* Unpaired
4-171 Nunavut I 2595-2620 25* Unpaired
4-172 Northwest Territories I 2595-2620 25* Unpaired

* Includes restricted band.

**3-044-007 is a combination of Tier 3-044 and the Alberta portion of Tier 3-043.

35. Bidders would submit package bids for each Group of licences where they are interested in obtaining licences. The winning bid(s) in each Group would be calculated by determining the combination of bids that generates the highest sum in this Group, and the bids in this combination would be the winning bids for this Group. Bidders would only be able to win one of their package bids in each Group. As a result, bidders interested in individual licences and/or some combination thereof would have to bid for all of the options that they would be interested in winning in a particular Group. For example, a bidder that places bids for each of the individual licences in Group A, but not for any packages would only be able to win one of the licences in Group A. Further information on the determination of provisional licence winners can be found in section 8.9.

36. ISED is not proposing to make package bidding available for any other spectrum bands offered in this auction.

Q5 — ISED is seeking comments on its proposal to include package bidding for 2500 MHz licences in the sealed bid auction format.

6.3 Second-price rule

37. Two common pricing rule options used to calculate the prices to be paid by winning bidders are a first‑price rule and a second‑price rule. A first‑price rule requires winning bidders to pay the full amount of their winning bid. Conversely, a second‑price rule requires each winning bidder to pay an amount that is sufficient to ensure that no other bidder, or group of bidders, was prepared to pay more than the winning bidder for the licence(s) in question. With a second‑price rule, the highest bidder is awarded the licence, but is required to pay an amount equal to the second highest bid on the licence or should there only be one bidder for a particular licence, the opening bid amount.

38. Under a first‑price rule, the bidder has a strong incentive to bid less than its true value, which can lead to inefficient outcomes. A second‑price rule promotes a more efficient outcome by increasing the incentive for bidders to bid their true value. Bidders, knowing that they will only be required to pay the minimum amount necessary to win their licence or package, will have the incentive to bid truthfully during the auction. As such, ISED is proposing that the second‑price rule be used for the auction of residual licences.

39. Given the proposal to allow package bidding for 2500 MHz licences, the price(s) for those licences could depend on package bids and/or bids for the individual licences. More specifically, within each group of 2500 MHz licences, ISED is proposing to apply adjusted Vickrey prices for the final payment calculation (see example 4 in lannex G). This approach was selected as the mechanism to determine prices for the 700 MHz, AWS-3 and 2500 MHz auctions.

Q6 — ISED is seeking comments on its proposal to use a second-price rule for this auction and the Vickrey price determination mechanism.

6.4 Opening bids

40. Opening bids are the prices for the spectrum licences at the start of the auction, and the minimum amount that will be accepted for each licence.

700 MHz licence(s)

41. In the original 700 MHz auction (held in 2014), the determination of the opening bid prices took into account the results of past Canadian auctions and reflected the relative value of the licences in the different service areas. For example, in C1 Block for service area 2‑14 – Yukon, the Northwest Territories and Nunavut, the opening bid was based on the minimum accepted price level of $0.265/MHz/population, for an amount of $284,000.

42. For the Auction of Residual Spectrum Licences in the 700 MHz and AWS-3 bands (held in 2015) this licence was divided into three separate tier areas and the opening bids were adjusted to reflect the smaller licence areas. The opening bid for Yukon was $90,000, for Nunavut it was $85,000 and for Northwest Territories it was $110,000.

43. Given that no bids were received for 700 MHz licences during the 2015 Auction of Residual Spectrum Licences, it is proposed to reduce the opening bids by 50% (see table 7).

Table 7: Proposed opening bid prices for the 700 MHz licences
Tier Service Area Name Population MHz $/MHz/pop Opening Bid (20-year licence,10 MHz)
4-170 Yukon 33,926 5+5 0.133 $45,000
4-171 Nunavut 29,597 5+5 0.133 $39,000
4-172 Northwest Territories 41,102 5+5 0.133 $55,000

2500 MHz Licences

44. In the original 2500 MHz auction (held in 2015), the determination of the opening bid prices took into account market transactions for spectrum licences in Canada, prices paid for 2500 MHz spectrum licences assigned in international auctions and technical considerations. Service areas were grouped into four price levels according to Statistics Canada’s 33 defined census metropolitan areas (CMAs) and their population estimates.

Based on relative values for the following groups:

  • service areas with a population greater than 2 million (3-25 Toronto, 3-13 Montréal and 3-52 Vancouver) were priced at $0.14/MHz/pop
  • service areas that provide coverage to a CMA with a population between 1 million and 2 million were priced at $0.10/MHz/pop
  • service areas that provide coverage to a CMA with a population less than 1 million, were priced at  $0.065/MHz/pop
  • all other service areas (those that do not provide coverage to a CMA) were priced at $0.051/MHz/pop

45. With respect to the available licences, it is proposed that the same calculations apply (see table 8).

Table 8: Proposed opening bid prices for the 2500 MHz licences
Tier Service Area Name Block MHzFootnote 1 Population $/MHz/Pop Opening Bid (20-year licence)
3-020 Kingston A 10+10  175,895 0.065 $229,000
3-050 Kootenays A 10+10  134,352 0.051 $137,000
3-054 Nanaimo A 10+10  185,404 0.051 $189,000
3-055 Courtenay A 10+10  114,583 0.051 $117,000
3-056 Thompson/Cariboo A 10+10  179,998 0.051 $184,000
3-057 Prince George A 10+10  187,639 0.051 $191,000
3-058 Dawson Creek A 10+10  65,542 0.051 $67,000
3-027 Guelph / Kitchener G 10+10  696,463 0.065 $905,000
3-029 Niagara-St. Catharines G 10+10  367,803 0.065 $478,000
3-030 London/Woodstock/St. Thomas G 10+10  832,095 0.065 $1,082,000
3-051 Okanagan/Columbia G 10+10  415,223 0.065 $540,000
3-053 Victoria G 10+10  432,549 0.065 $562,000
3-001 Newfoundland and Labrador H 10  514,711 0.065 $335,000
3-002 Prince Edward Island H 10  140,204 0.051 $72,000
3-003 Mainland Nova Scotia H 10  786,472 0.065 $511,000
3-004 Cape Breton H 10  135,224 0.051 $69,000
3-005 Southern New Brunswick H 10  172,318 0.065 $112,000
3-006 Western New Brunswick H 10  217,159 0.051 $111,000
3-007 Eastern New Brunswick H 10  360,145 0.065 $234,000
3-010 Chicoutimi-Jonquière H 10  368,254 0.065 $239,000
3-011 Eastern Townships H 10  543,370 0.065 $353,000
3-014 Upper Outaouais H 10  124,827 0.051 $64,000
3-016 Pembroke H 10  112,950 0.051 $58,000
3-017 Abitibi H 10  190,271 0.051 $97,000
3-018 Cornwall H 10  67,288 0.051 $34,000
3-019 Brockville H 10  84,038 0.051 $43,000
3-020 Kingston H 10  175,895 0.065 $114,000
3-021 Belleville H 10  195,564 0.051 $100,000
3-022 Cobourg H 10  62,837 0.051 $32,000
3-023 Peterborough H 10  206,161 0.065 $134,000
3-024 Huntsville H 10  78,789 0.051 $40,000
3-028 Listowel/Goderich/Stratford H 10  133,542 0.051 $68,000
3-031 Chatham H 10  100,110 0.051 $51,000
3-032 Windsor/Leamington H 10  390,154 0.065 $254,000
3-033 Strathroy H 10  171,946 0.051 $88,000
3-034 North Bay H 10  126,606 0.051 $65,000
3-035 Sault Ste. Marie H 10  132,116 0.051 $67,000
3-036 Sudbury H 10  177,314 0.065 $115,000
3-037 Kirkland Lake H 10  114,167 0.051 $58,000
3-038 Thunder Bay H 10  222,900 0.065 $145,000
3-044 Edmonton-Makaoo,
AB* (3-044-007)
H 10  1,463,833 0.100 $1,464,000
3-045 Medicine Hat /Brooks H 10  190,825 0.051 $97,000
3-046 Lethbridge H 10  177,304 0.051 $90,000
3-047 Calgary H 10  1,390,228 0.100 $1,390,000
3-048 Red Deer H 10  240,348 0.051 $123,000
3-049 Grande Prairie H 10  186,005 0.051 $95,000
3-050 Kootenays H 10  134,352 0.051 $69,000
3-054 Nanaimo H 10  185,404 0.051 $95,000
3-055 Courtenay H 10  114,583 0.051 $58,000
3-056 Thompson/Cariboo H 10  179,998 0.051 $92,000
3-057 Prince George H 10  187,639 0.051 $96,000
3-058 Dawson Creek H 10  65,542 0.051 $33,000
4-170 Yukon H 10  33,926 0.051 $17,000
3-044 Edmonton I1/I2 25**  1,464,088 0.100 $2,928,000
4-170 Yukon I1/I2 25**  33,926 0.051 $35,000
4-171 Nunavut I1/I2 25**  29,597 0.051 $30,000
4-172 Northwest Territories I1/I2 25**  41,102 0.051 $42,000
3-039 Winnipeg I2 15**  1,033,768 0.100 $1,034,000
3-040 Brandon I2 15**  174,484 0.051 $89,000
3-041 Regina I2 15**  366,473 0.065 $238,000
3-042 Moose Jaw I2 15**  100,244 0.051 $51,000
3-043 Saskatoon I2 15**  562,780 0.065 $366,000

*3-044-007 is a combination of Tier 3-044 and the Alberta portion of Tier 3-043.

** Includes restricted band.

2300 MHz licences (WCS)

46. The WCS licences to be made available through this auction process were first auctioned in February 2004 for a 10-year term.  The opening bids were set at the low level of $0.001/MHz/pop reflecting the impact of technical restrictions in the band at that time on the expected value of the licences.

47. Since many technical restrictions on the mobile use of the WCS band were lifted in April 24, 2014, and the equipment ecosystem has advanced, it is proposed to establish opening bid prices for this band consistent with opening bid prices of 2500 MHz auction held in 2015 (see table 9).

Table 9: Proposed opening bid prices for the 2300 MHz (WCS) licences
Tier Service Area Name MHz Population $/MHz/pop Opening Bid (20-year licence 30 MHz)
4-065 Port-Cartier/Sept-Îles 15+15 47,167 0.051 $72,000
4-092 Sarnia* (4-092-002) 15+15 104,487 0.051 $160,000
4-119 Estevan 15+15 45,956 0.051 $70,000
4-171 Nunavut 15+15 29,597 0.051 $45,000

*4-092-002 is a subdivision of Tier 4-092 and includes Sarnia, Forest and the immediate vicinity.

1910-1915/1990-1995 MHz (PCS-G Block) and 1670-1675 MHz (I Block) licences

48. This spectrum was first offered for commercial mobile licensing during the 2008 AWS-1 Auction for a 10-year licence term. The opening bid was equivalent to the lower of a) the Personal Communications Services/cellular licence fee or b) the 2001 PCS auction final prices, for each particular licence area. Opening bids were valued at rates in the range from $0.0582/MHz/pop to $0.285/MHz/pop.

49. For the 1910-1915/1990-1995 MHz licences, in order to reflect more recent observations on the value of this spectrum and account for the proposal to issue these licences for a 20-year term, it is proposed that the opening bid prices for these licences be consistent with the opening bid prices of the 2500 MHz auction held in 2015. However, the 2500 MHz auction opening bid prices were based on Tier 3 service areas, rather than the larger Tier 2 service areas of the available PCS licences. Given that each Tier 2 service area is composed of a number of smaller Tier 3 service areas, ISED proposes to use the weighted average of the population of the relative service area to calculate the opening bids.

50. For example, Tier 2 service area 2­003 (New Brunswick) is composed of three smaller Tier 3 service areas (3-005 Southern New Brunswick, 3-006 Western New Brunswick, 3-007 Southern New Brunswick):

  • the population of the Southern New Brunswick is 172,318 and the opening bid price for the 2500 MHz auction was $0.065/MHz/pop
  • the population of the Western New Brunswick is 217,159 and the opening bid price for the 2500 MHz auction was $0.051/MHz/pop and
  • the population of the Eastern New Brunswick is 360,415 and the opening bid price for the 2500 MHz auction was $0.065/MHz/pop

51. Therefore, the weighted average opening bid price for New Brunswick in $/MHz/pop is 0.061=(172,374×0.065+217,152×0.051+360,416×0.065)/749,942. The proposed opening bid prices for PCS-G Block licences in $/MHz/pop and absolute amounts are provided in table 10.

52. For the 1670-1675 MHz licences, it is proposed to use the same opening bid prices methodology as for the 1910-1915/1990-1995 MHz licences. However, given the uncertainty of the equipment ecosystem and to account for the 10-year licence term, it is proposed to set the opening bid prices at half of the proposed 1910-1915/1990-1995 MHz proposed opening bid prices in $/MHz/pop. This simplified approach is used in lieu of more complex discount calculations normally used to account for the length of the licence term. Proposed opening bid prices are provided in table 10.

Table 10: Proposed opening bid prices for PCS Block G and 1670-1675 MHz (Block I) licences
Tier # Service Area Name Block MHz Licence Term Population $/MHz/Pop Opening  Bid Prices
2-003 New Brunswick PCS-G 10 20 years 749,623 0.061 $457,000
2-009 Northern Ontario PCS-G 10 20 years 773,104 0.058 $448,000
2-001 Newfoundland & Labrador I 5 10 years 514,711 0.032 $82,000
2-002 Nova Scotia & PEI I 5 10 years 1,061,900 0.031 $165,000
2-005 Southern Quebec I 5 10 years 5,683,127 0.060 $1,705,000
2-006 Eastern Ontario & Outaouais I 5 10 years 2,347,556 0.042 $493,000
2-008 Southern Ontario I 5 10 years 10,091,045 0.057 $2,876,000
2-011 Saskatchewan I 5 10 years 1,029,497 0.032 $165,000
2-012 Alberta I 5 10 years 3,648,798 0.045 $821,000
2-013 British Columbia I 5 10 years 4,399,805 0.054 $1,188,000

Q7 — ISED is seeking comments on the proposed opening bids as presented in tables 7, 8, 9 and 10.

7. Bidder participation—affiliated and associated entities

53. In order to maintain auction integrity, ISED proposes that there be rules relating to the participation of affiliated and associated entities in order to ensure that each bidder is an independent bidder. It is proposed that affiliated entities not be allowed to participate separately in the auction. As in the most recent auctions it is also proposed that associated entities only be allowed to participate separately if following a review of their application. ISED is satisfied that their participation would not have an adverse impact on auction integrity. Applicants will be required to publicly disclose information about their beneficial ownership, affiliations and associations.

7.1 Affiliated entities

54. Definition of affiliated entities: It is proposed that the definition of affiliated entities remain as it was for recent auctions, as follows:

An entity will be deemed to be affiliated with a bidder if it controls the bidder, is controlled by the bidder, or is controlled by any other entity that controls the bidder. "Control" means the ongoing power or ability, whether exercised or not, to determine or decide the strategic decision-making activities of an entity, or to manage or run its day-to-day operations.

55. Presumption of affiliate status: If a person owns, directly or indirectly, at least 20% of the entity’s voting shares (or where the entity is not a corporation, at least 20% of the beneficial ownership in such entity), ISED will generally presume that the person can exercise a degree of control over the entity to establish a relation of affiliation. The ability to exercise control may also be demonstrated by other evidence. Under this rule, ISED may, at any time, ask a prospective bidder for information in order to satisfy any question of affiliation.

56. Applicants may provide information to ISED to rebut the presumption of affiliate status. Applicants must notify ISED in writing if they are rebutting the presumption and must file material that will enable ISED to review the question and make that determination. It is the responsibility of the applicant to file the appropriate material. Such material may include copies of the relevant corporate documentation relating to both entities; a description of their relationship; copies of any agreements and arrangements between the entities and affidavits or declarations, signed by officers from the two entities, dealing with the control as outlined in the definition of "affiliate" above.

57. Upon receipt of this material, ISED will either make a ruling based on the materials submitted or ask the applicant for further information (and provide a timeline within which to do so).

58. Should the entities fail to provide the relevant information in a timely fashion in order to allow ISED to complete its determination, ISED may make a ruling on eligibility, based on the above, that the entities in question are affiliated.

59. Eligibility to participate in the auction: It is proposed that only one member of an affiliate relationship be permitted to become a qualified bidder in the auction or the affiliated entities may apply to participate jointly as a single bidder. Affiliated entities must decide prior to the application deadline which entity will apply to participate in the auction. All affiliations must be disclosed at the time of the application.

7.2 Associated entities

60. Proposed definition of associated entities: As a basis for participating in the auction of residual licences, ISED proposes that associated entities be defined as follows:

Any entities that enter into any partnerships, joint ventures, agreements to merge, consortia or any arrangements, agreements or understandings of any kind, either explicit or implicit, relating to the acquisition or use of any of the spectrum licences being auctioned in this process will be treated as Associated Entities. Typical roaming and tower sharing agreements would not cause entities to be deemed associated.

61. Depending on the nature of the association, it may not preclude the ability of the entities to participate separately in the auction or to have the 700 MHz or 2500 MHz spectrum caps applied individually.

62. Eligibility to participate separately in the auction:  It is proposed that associated entities could be permitted to apply to ISED to participate in the auction separately if, following a review of their application and narrative description of the association, ISED is satisfied that their participation would not have an adverse impact on auction integrity. The submitted narrative (as proposed in section 7.4 below) would be assessed to determine whether permitting both entities to participate separately would negatively impact the integrity of the auction process. The auction integrity would be best assured by the transparent disclosure of the relationships between bidders participating in the auction. ISED may request additional documents. Any information considered by the applicant to be confidential should be properly marked as such. If ISED deems it necessary to disclose any information marked as confidential, the applicant would be consulted prior to release.

63. Eligibility to have caps apply to associated entities separately: It is proposed that in addition to the above, associated entities could request that the spectrum caps apply individually. To obtain this approval, entities would be required to demonstrate that they intend to compete separately in the applicable licence area and continue to function as competitors to a level satisfactory to ISED. In making this determination, ISED would consider all relevant factors. Depending on the nature of the agreement, documentation may be required that sets out the details of the association, including copies of all arrangements or agreements, for example agreements related to network architecture and spectrum use and documents related to corporate decision making, marketing and customer information, sales and financing. Assessment criteria may include, but would not be limited to, consideration of the degree to which the entities would offer branded services, pricing and device selection that are unique from the other. For additional information on the application of the spectrum cap for associated entities, refer to the condition of licence entitled "Spectrum Aggregation Limits" in annex A.

64. It should be noted that for the 700 MHz band, agreements between associated entities may have an impact on obligations to serve rural areas (see annex A).

65. Bidders are reminded that the provisions of the Competition Act apply independently of, and in addition to, the proposed policy.

66. Associated entities wishing to participate in the auction separately would be required to submit their application at least 10 days in advance of the final application deadline to participate in the auction. This would provide ISED the additional time required to make an assessment of the association and provide a decision on the associated entities’ ability to participate in the auction separately, and have the cap apply individually, if so requested. Should the request be denied, the associated entities would be required to select which member entity will apply to participate in the auction.

67. Applicants should note that all entities participating in the auction will be subject to the same prohibition of collusion rules, as stated in section 7.3.1 Prohibition of collusion.

Q8 — ISED is seeking comments on its proposed rules regarding Affiliated and Associated Entities, which would apply to applicants and bidders in the upcoming auction of residual spectrum licences.

7.3 Prohibition of collusion and other communications rules

7.3.1 Prohibition of collusion

68. As in previous auctions, in order to ensure the integrity of the bidding process, all applicants are prohibited from cooperating, collaborating, discussing or negotiating agreements with other bidders regarding the licences being auctioned or the post-auction market structure. Any such discussions occurring at any time prior to the public announcement of provisional licence winners by ISED are prohibited.

69. In order to maintain the integrity of the auction, bidders are prohibited from signalling either publicly or privately, their bidding intentions or planned post-auction market structure related to the spectrum licences being auctioned. This would include comments or any communication with or via the media. An example would be making a public announcement regarding which licences the company intends to bid on or its rollout intentions.

70. Given that ISED is proposing to allow the participation of some associated entities as separate bidders in this auction process, the prohibition of collusion rules are proposed as follows:

All applicants, including affiliated and associated entities, are prohibited from cooperating, collaborating, discussing or negotiating agreements with competitors, relating to the licences being auctioned or relating to the post‑auction market structure, including frequency selection, bidding strategy and post‑auction market strategy, until after the public announcement of provisional licence winners by ISED.

Prospective bidders will note that the auction application forms contain a declaration that the applicant will be required to sign certifying that the applicant has not entered into and will not enter into any agreements or arrangements of any kind with any competitor regarding the amount to be bid, bidding strategies or the particular licence(s) on which the applicant or competitors will or will not bid. For the purposes of this certification, "competitor" means any entity, other than the applicant or its affiliates, which could potentially be a bidder in this auction based on its qualifications, abilities or experience.

Prospective bidders should note that the definition of "affiliate" for the purposes of this licensing process (defined by reference to "control in fact") differs from "affiliate" for the purposes of the Competition Act. The provisions of the Competition Act apply independently of, and in addition to, the policies contained in this Framework.

7.3.2 Other communications rules

71. Discussions on tower sharing: The prohibition of communication includes discussions about tower and site sharing regarding the licences that are the subject of this auction until after the public announcement of provisional licence winners by ISED. Discussions concerning new arrangements or the expansion of existing sharing arrangements that relate to spectrum outside of licences being offered in this auction process are not prohibited.

72. Communication with local exchange carriers: The prohibition of communication includes discussions regarding interconnection services with a local exchange carrier (LEC) that is a qualified bidder (or one of its affiliates/associates) in this auction, where the services relate to spectrum in the bands offered in this auction process.

73. Consulting services, legal and regulatory advice: Separate bidders may not receive consulting advice from the same auction consulting company. Separate bidders may receive legal and regulatory advice from the same law firm provided that the law firm complies with the conflict of interest and confidential information requirements of the applicable law society and that the applicants otherwise comply with the provisions set forth in the licensing framework.

Q9 — ISED is seeking comments on the rules prohibiting collusion and other communication rules, which would apply to bidders in the upcoming auction of residual spectrum licences.

7.4 Auction integrity and transparency

74. In order to ensure auction integrity and transparency, ISED proposes that all entities wishing to participate in the auction process be required to disclose in writing, as part of their application, the names of affiliated and associated entities. It is proposed that a narrative also be submitted, describing all key elements and the nature of the affiliation or association in relation to the acquisition of the spectrum licences being auctioned and, the post-auction relationships of the said entities. It is proposed that this include arrangements with another potential bidder that relate in any way to the future use of the spectrum being auctioned in this process directly or indirectly.

75. Some examples of arrangements that would require disclosure include, but are not limited to, agreements to establish a joint network using spectrum licences acquired by each of the entities and agreements with respect to a joint backhaul network. It is also proposed that agreements such as significant joint equipment purchases be disclosed. Typical roaming and tower sharing agreements and other agreements, such as the purchase of backhaul capacity, would not cause entities to be deemed associated entities and hence need not be disclosed.

76. The submitted narrative would be made available to other bidders and to the public on ISED’s website prior to the auction in order to ensure transparency of the licensing process.

8. Auction process

77. The following section outlines the proposed general process for submitting an application to participate in the auction of residual licences, as well as the general requirements and rules that would apply prior to, during and post-auction.

8.1 Application to participate

78. To participate in an auction, all applicants must submit a completed application form, along with a financial deposit, details of the applicant’s beneficial ownership, information on any affiliations and associations as discussed in section 7 of this document, and other corporate documentation as required. ISED will publish the list of applicants on its website soon thereafter.

8.2 Submissions

79. In the interest of providing ISED and other bidders with adequate information on the identity of all bidders, applicants are required to fully disclose the beneficial ownership for every entity that it owns, directly or indirectly, 10% or more of the applicant’s voting shares, non‑voting shares, partnership interests, or any other beneficial interests, as the case may be. Associated entities wishing to participate separately in the auction of residual licences are required to disclose the names of their associated entities within their application, and to provide narratives describing all key elements and the nature of the association regarding the acquisition of the spectrum licences being auctioned and the post‑auction relationships of the said entities. A list of applicants, their beneficial ownership information and the narrative on any associated entity relationships will be made available on ISED’s Spectrum Management and Telecommunications website, prior to the auction, so that all bidders have knowledge of the identity of the other bidders. Applicants are not permitted to change their beneficial ownership within 10 days preceding the start of the auction.

80. Entities are encouraged to approach ISED at least two weeks prior to the application date if seeking guidance or a predetermination as to whether their arrangement or proposed arrangement would be considered to give rise to a finding of association.

8.3 Pre-auction financial deposits

81. In order to enhance the integrity of the auction, ISED will require that all bidders submit a pre‑auction financial deposit with their application to participate in the auction.

82. Each participating bidder will be required to submit a financial deposit equal to the opening bid of the licence(s) on which it intends to bid. These amounts will be kept confidential.

83. Financial deposit(s) will be returned to any applicant not found to be a qualified bidder, any applicant that provides written notification to ISED of its withdrawal from the process prior to the auction’s commencement, and any bidder that fails to win a licence during the auction.

8.4 Process to submit applications and financial deposit

84. The application forms, the associated documents (as per the instructions on the application forms) and the total pre‑auction financial deposit are to be delivered to the Manager, Auction Operations, by the date specified. ISED, under exceptional circumstances, may decide to accept additional documentation after the deadline, but prior to publication of the list of applicants. Applications that are received without a deposit will be rejected.

85. For previous licensing processes, application forms and associated documents were to be physically delivered to ISED. For this licensing process, in an effort to streamline the submission of the application form, associated documents and bid forms, ISED is proposing to use Canada Post’s ePost Connect service. The ePost Connect service is a way for business and government to securely send confidential digital messages and documents over the Internet with bank-grade encryption. The solution is certified to transmit documents up to the Protected B classification level.  Canada Post certifies that all data sent through their solution stays within Canada, on Canadian servers.

86. Requests for an auction application are to be sent to ISED’s Spectrum Auctions email account: ic.spectrumauctions-encheresduspectre.ic@canada.ca. Upon receipt of the requests, ISED would set up the Canada Post ePost account service for each prospective applicant.

87. Through a standard web browser, ISED (the administrator) and the auction applicant (the client) would log into a secure web application. Through the site, ISED would send an initial message to the auction applicant who would receive a notification via email with a link contained in the email. The auction applicant would then click the link, which would bring it to the secure ePost website where it would be prompted to login. If the auction applicant already has an ePost account it could immediately login. Otherwise, the auction applicant could create an account. Regardless, once it logs in, the sent message is associated with that ePost account. Canada Post calls this a conversation.

88. Once the conversation is established, messages could be initiated by either ISED or the auction applicant. A message could be simple text or it could also include files. This would allow ISED to send the application and bid forms to each auction applicant. In turn, the auction applicants could respond back to ISED including sending the completed forms and other relevant documents.

89. For more information, please see Canada Post’s ePost Connect website.

90. Similar to previous auction processes, the pre-auction financial deposit must be received by the Manager, Auction Operations by the date specified.

91. Upon receipt of the application and the associated documentation, ISED will send a notification to the applicant, advising that the application materials have been received. This notice will in no way mean that the application materials or the deposit have been approved.

92. The financial deposit must be in the form of a certified cheque, bank draft, money order, wire transfer, or an irrevocable standby letter of credit, payable to the Receiver General for Canada, drawn on a financial institution that is a member of the Canadian Payments Association. The elements required in a letter of credit, as well as a sample letter of credit acceptable to ISED, will be provided as part of the application forms. Multiple letters of credit (or other forms of payment) from one or more financial institutions will be permitted within reason. ISED will treat the financial deposit for an applicant as being the sum of the amounts of each accepted letter of credit, certified cheque, bank draft, money order or wire transfer. Each letter of credit must comply with the conditions laid out herein concerning letters of credit. No letter of credit shall have any conditions requiring ISED to draw on the letters in any particular order of priority, or requiring any letter to be drawn upon completely before drawing upon any other letter. In the event that a qualified bidder does not become a provisional licence winner, the financial deposits that were submitted in the form of a letter of credit will be returned. Refunds to deposits submitted in the form of a certified cheque, bank draft, money order or wire transfer will likely take longer (perhaps several weeks longer) than a refund submitted by way of a letter of credit, as a cheque from the Receiver General for Canada will need to be processed.

93. If, prior to the application deadline, an applicant wishes for any reason to amend any of the forms that it has submitted and/or its financial deposit, it may submit one or more amended forms and/or financial deposit with an accompanying letter explaining that the enclosed form(s) and/or financial deposit are to replace the one(s) previously submitted. Any such amendments are to be received by the Manager, Auction Operations, by the receipt deadline for applications to participate in the auction.

94. Upon receipt of an amended form(s) and/or financial deposit, ISED will send a notification to the applicant that the amended form(s) and/or deposit have been received. The notification will state the amount of the new deposit that has been submitted. Where the financial deposit is in the form of an irrevocable standby letter of credit, the initial irrevocable standby letter of credit will also be returned to the applicant where applicable. Where the financial deposit is in a form other than an irrevocable standby letter of credit, any partial reimbursement of the financial deposit may take several weeks.

95. A list of all applicants will be made public via ISED’s Spectrum Management and Telecommunications website. The publication of this list in no way means that these applicants have been approved as qualified bidders.

8.5 Bidder qualification

96. ISED will review the application forms (and any associated documents) and the accompanying financial deposit after the closing date for the submission of applications. In this initial review, ISED will identify any errors in the application forms or financial deposit. It will also determine whether any additional information related to any affiliate or associated entity of the applicant is required.

97. Applications that are received without a deposit by the application deadline will be rejected.

98. Following the initial review period, ISED will provide applicants with an opportunity to correct any errors or inconsistencies in their application, and will request any additional information related to affiliated or associated entities if required. A copy of the original applications may be returned to the applicant with a brief statement outlining any discrepancies and/or omissions, or requesting additional information. The applicant will be invited, in writing, to resubmit the corrected form and/or the additional information and to physically deliver this to the Manager, Auction Operations, by the date specified in the written statement.

99. Applicants that do not comply with this request will have their application to participate in the auction rejected. Applications that are rejected, including those for which an opportunity has been provided to correct errors or inconsistencies identified by ISED but are still found to be deficient, may be returned to the applicant outlining the deficiencies, along with the applicant’s deposit.

100. Those applicants that have submitted acceptable application materials, including the accompanying financial deposit, will receive a confirmation letter confirming that they are considered a qualified bidder.

101. A list of all qualified bidders, along with information related to their beneficial ownership, affiliates and associated entities will be made public via ISED’s website. Qualified bidders will be sent all information and directions required to submit their bids, including an auction bid form.

8.6 Withdrawal of application forms

102. Applicants wishing to withdraw their application materials and have their financial deposits returned may do so, without prejudice, by sending a written request to the Manager, Auction Operations, on or before the business day preceding the receipt deadline for sealed bids.

8.7 Change of information

103. Only the Auction Authorized Representative of the bidding company may notify the Manager, Auction Operations, of any material changes in the information submitted in the application documents. Written notification must be sent by the Auction Authorized Representative within five business days of such changes.

104. The Auction Authorized Representative is the individual that is nominated by the applicant to receive all documentation pertaining to this licensing process.

8.8 Submission of auction bids

105. Completed bid form(s), which include the bid amount for each licence, or combination of licences for which the bidder is placing a bid(s), must be received by the Manager, Auction Operations, by the receipt deadline. ISED is proposing to use the Canada Post ePost service for the electronic submission of bid forms. The amount of each bid must reflect the amount that the bidder is willing to pay for the associated licence(s). All bids must be in dollars only, not cents. No bids will be accepted after 12:00 p.m., noon, EST, on the receipt deadline for sealed bids. Following the auction, ISED will publish a list of all bids received on its website.

8.9 Determination of provisional licence winners

106. The bids will be examined by ISED officials following the receipt deadline for sealed bids. To be considered valid, a bid must be equal to or greater than the opening bid price; the previously submitted deposit must be equal to or greater than the amount of the opening bid price of the licence being bid upon; the bid form(s) must be completed correctly; and the bid must be submitted by a qualified bidder. Note that, in all instances where there is no second bid, the opening bid prices noted in section 6 will be considered the second highest bid (see annex G for bidding examples).

107. Where a bid is placed on a licence on which the bidder is not eligible to bid, that bid will be ignored.

108. Bids for the 700 MHz, 2300 MHz, PCS, and I Block bands will be made per licence; the winning bid will be the highest for each licence.

109. If the proposals set out in section 6 for the 2500 MHz band are adopted, bids can be made for individual licences and/or some combination of the available licences in each group of licences that bidder is interested to obtain. The winning bids for each group of 2500 MHz licences would be calculated by determining the combination of bids that generates the highest sum in this group; the bids in this combination would be the winning bids. Bidders would be able to win, at most, one of the bids it placed in each group of the 2500 MHz licences. For example, a bidder that places bids for each of the individual licence in the group but not for any packages would only be able to win one of the licences in the group.

110. A reserve bid at the opening bid price will be included in the determination of provisional winning bidders and the prices to be paid for each licence. In this process, it is as if ISED is a bidder in the auction, placing a bid on all licences at the opening bid price. In the 2500 MHz band, including a reserve bid for all licences ensures that the incremental value that a bidder would be prepared to pay for an additional licence is at least the opening bid price of that licence. The reserve bids for the 2500 MHz licences will not be treated as a package, but rather as having been placed by different bidders. Therefore, in all instances where there is no second bid, the opening bid prices noted in section 6.4 will be considered the second highest bid (see annex G for bidding examples).

111. To mitigate the possibility of a tie, bidders are encouraged not to bid in round figures. In the event of a tie, bidders involved in the tie will be requested to enter a second bid in an attempt to break the tie. If required, ISED will provide tied bidders the details of the procedure to submit further bids to break the tie. Should there be a second tie, bidders will be requested to enter a third bid in an attempt to break the tie. This procedure will be repeated until there is no tie.

112. Following the determination of the provisional licence winners, ISED will publish a list of all bids received, the name of the provisional licence winner(s) and the licence(s), if any, that did not receive bids on its website. ISED will also notify the provisional winning bidder(s) and inform them of payment requirements.

113. The auction will be considered closed upon publication of the provisional winning bidder(s).

8.10 Final payment

114. Within 10 business days following the publication of provisional licence winners, each provisional licence winner will be required to submit 20% of its final payment. The remaining portion, 80% of the final payment, will be due within 30 business days of the announcement of the provisional licence winners. Failure by the winning bidder to make these final payments in a timely fashion will result in the licence not being issued, and the bidder will be subject to the applicable forfeiture penalty (see section 8.10). These final payments will be non-refundable. If the licence winner fails to make these payments within the specified period, then the provisional winner’s irrevocable standby letter of credit will be drawn upon.

115. All payments must be made by certified cheque, bank draft, or wire transfer, payable to the Receiver General for Canada, drawn on a financial institution that is a member of the Canadian Payments Association.

116. These bid payments for the initial 20‑year term (10 year term in the case of I Block) are in lieu of any fees fixed for radio authorization under the Radiocommunication Act or any other Act.

8.11 Forfeiture penalties

117. Following the conclusion of the auction, winning bidders that fail to comply with the specified payment schedule or fail to come into compliance with the eligibility requirements of the Radiocommunication Regulations, will be considered disqualified and will forfeit their ability to obtain licences through this process. Furthermore, non‑compliant bidders will be subject to a forfeiture penalty in the amount of the difference between the forfeited bid and the ultimate price of the licence—to be determined by a subsequent licensing process.

118. In the event of licence forfeiture, the bidder’s irrevocable standby letter of credit will be drawn upon for the full amount of the interim proxy forfeiture penalty, which will be the full amount bid for the licence(s) forfeited . If the interim proxy forfeiture penalty is greater than the full amount of the bidder’s irrevocable standby letter of credit, combined with any partial payment, or if the letter of credit has been returned or has expired, then the difference will be owing and payable to the Receiver General for Canada.

119. A winning bidder that forfeits on a licence (or any of that bidder’s affiliated and associated entities) will not be eligible to bid on any subsequent licensing process for the related band.

120. In addition to forfeiture penalties that will be set out in the framework to be developed as a result of this Consultation, the Applicant and/or its representatives may be subject to administrative monetary penalties under the Radiocommunication Act if the auction rules set out in the Framework are breached.

8.12 Possible modification to auction process

121. For the auction of residual licences, ISED is seeking comments as to whether the frequency bands that are proposed in this consultation should be auctioned in a single round or separately. There would be one application and deposit process for all bands, but the sealed bid deadline and auction could be band specific. For example, the 700 MHz or 2500 MHz licences could be auctioned first with the balance of the bands following shortly thereafter, once the bidders have been advised of their results.

Q10 — ISED is seeking comments on:

  1. the proposed auction process for the auction of residual licences;
  2. the proposed use of Canada Post’s ePost Connect services for auction applications, associated documentation and bid forms; and  
  3. section 8.12, the proposal to auction some or all of the frequency bands   separately. Please include any preferences on the order of the bands.

9. Post-auction licensing process for unassigned licences

122. ISED will consider making unassigned licences available for licensing through an alternative process, which could include a subsequent auction at a later date following the close of the initial auction or a first-come, first-served licensing process. The timing and form of such a process will depend on the demand for the available licences. ISED may conduct a public consultation should it consider it necessary.  

123. Following the end of the initial licence 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.

124. As part of the licence renewal process, the Minister of Innovation, Science and Economic Development retains the power to fix and amend the terms and conditions of spectrum licences during the term of the licence and at the end of the term in accordance with subsection 5(1) of the Radiocommunication Act . As noted in the FSAC, licence fees that reflect some measure of market value will apply to licences issued through a renewal process. Accordingly, the renewal process will serve to determine whether new licences will be issued, the terms and conditions that will apply to the new licences and the applicable licence fees.

125. Generally, approximately two years prior to the end of the licence term, ISED will review whether there is a need for a fundamental reallocation of the spectrum to a new service, or whether an overriding policy need has arisen. A review of the licensee’s continued compliance with the conditions of licence will also begin. ISED will launch a public consultation to discuss whether, in light of the above-noted issues, new licences should be issued for a subsequent term. The consultation paper will also propose, and invite comments on, licence conditions and fees that would apply during the subsequent licence term.

126. It is proposed that the renewal process include a public consultation process that would commence approximately two years prior to the end of the licence term.

Q11 — ISED is seeking comments on the proposed renewal process.

10. Clarification questions process

127. As done in previous auctions, following a decision on the questions raised in this consultation paper, ISED will accept written questions soliciting clarification of the rules and policies set out in the decision paper. Written questions and ISED’s responses will be made public on ISED’s website.

11. Submitting comments

128. Respondents are requested to provide their comments in electronic format (Microsoft Word or Adobe PDF) to the following e-mail address: ic.spectrumauctions-encheresduspectre.ic@canada.ca.

129. In addition, respondents are asked to specify question numbers for ease of referencing and to provide supporting rationale for each response.

130. Written submissions should be addressed to the Senior Director, Spectrum Licensing and Policy Branch, ISED, 235 Queen Street (6th Floor, East Tower), Ottawa, Ontario K1A 0H5. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (SLPB‑003‑17). Parties should submit their comments no later than August 15, 2017, to ensure consideration. Soon after the close of the comment period, all comments received will be posted on ISED’s Spectrum Management and Telecommunications website.

131. ISED will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted until September 5, 2017.

132. All comments and reply comments will be published, so those making submissions are asked not to provide confidential or private information in their submissions.

133. Following the initial comment period, ISED may, at its discretion, request additional information if needed to clarify significant positions or new proposals. In such a case, the reply comment deadline may be extended.

12. Obtaining copies

134. All spectrum-related documents referred to in this paper are available on ISED’s Spectrum Management and Telecommunications website.

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

Innovation, Science and Economic Development Canada
c/o Senior Director, Spectrum Licensing Policy Branch
235 Queen Street (6th Floor, East Tower)
Ottawa, Ontario K1A 0H5
Telephone: 343-291-1400
Fax: 343-291-1269
Email:  ic.spectrumauctions-encheresduspectre.ic@canada.ca

Annex A — Proposed conditions of licence — 700 MHz

Based on the proposals outlined in this Consultation, it is proposed that the following conditions of licence apply to the 700 MHz licences being auctioned through this 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 of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development 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.

1. Licence term

The term of this licence is 20 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.

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 Innovation, Science and Economic Development following a public consultation.

2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of Innovation, Science and Economic Development 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.

3. Spectrum aggregation limits

The licensee must comply with the spectrum aggregation limits as follows:

A limit of two paired spectrum blocks in the 700 MHz band within blocks A, B, C, C1 and C2 is applicable to all licensees.

A limit of one paired spectrum block within blocks B, C, C1 and C2 is applicable to all licensees which are large wireless service providers. Large wireless service providers are defined as companies with 10% or more of the national wireless subscriber market share, or 20% or more of the wireless subscriber market share in the province of the relevant licence area. The determination of subscriber market share will be based on the 2012 CRTC Communications Monitoring Report.

These spectrum aggregation limits will continue for five years from the date of licence issuance. No transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum aggregation limits during this period. Any change in ownership or control of a licensee or any other agreement that has the effect of granting a right or interest in a 700 MHz licence to another licensee in this band may be considered as a licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Innovation, Science and Economic Development for any change that would have a material effect on its compliance with these spectrum aggregation limits. Such a request must be made in advance for any proposed transactions within its knowledge. At any time, at the request of ISED, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

4. Licence transferability, divisibility and subordinate licensing

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

The licensee must make the transfer request in writing to ISED. 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. The licensee must apply in writing to ISED 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 ISED will be considered a breach of this condition of licence.

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 ISED 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 ISED 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.

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

The terms "affiliate"; "agreement"; "deemed transfer"; "licence"; "prospective transfer"; "subordinate licence"; and "transfer request" have the meaning ascribed to them in CPC-2-1-23. Subordinate licences will generally count towards the subordinate licensee’s spectrum aggregation limit unless the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where approval for a subordinate licence that would otherwise exceed the spectrum aggregation limit is granted, licensees must implement their plans to the satisfaction of ISED for at least the duration of the aggregation limits that are in place. Any modifications to these plans must be submitted to ISED for approval.

ISED 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. ISED may grant such requests based on the merits of the proposal.

5. Treatment of existing spectrum users

The licensee must comply with the displacement policies set out in SMSE‑002‑12, Policy and Technical Framework: Mobile Broadband Services (MBS) – 700 MHz Band, Broadband Radio Service (BRS) – 2500 MHz Band.

6. Radio station installations

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

7. Provision of technical information

When ISED 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.

8. Compliance with legislation, regulation and other obligations

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.

9. Technical considerations, and international and domestic coordination

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.

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.

10.  Lawful interception

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.

The licensee may request the Minister of Innovation, Science and Economic Development to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister of Innovation, Science and Economic Development, 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 of Innovation, Science and Economic Development, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

11. Research and development

The licensee must invest, as a minimum, two percent of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter‑carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

12. Rural deployment requirements

Where the licensee holds licences for two or more paired blocks of 700 MHz spectrum in a licence area, or has access to two or more paired blocks of 700 MHz spectrum in a licence area either directly or indirectly, the licensee must deploy 700 MHz spectrum:

  1. to cover 90% of the population of its HSPA network footprint as of March 2012, within five years of the issuance of the initial 700 MHz licence; and
  2. to cover 97% of the population of its HSPA network footprint as of March 2012, within seven years of the issuance of the initial 700 MHz licence.

For the purpose of this condition, “access” includes situations where a licensee enters into an agreement with another 700 MHz licensee in the same licence area that provides the ability to carry the other licensee’s subscriber traffic (other than via a typical roaming agreement) regardless of whether the frequencies of both licensees are in use. In determining whether a party has access, ISED may review documentation that sets out the details of any agreement to use the spectrum, agreements related to network architecture or any other technical or commercial information or agreements between the parties.

The licensee must notify the Minister of Innovation, Science and Economic Development of any new agreement that would provide the licensee with access to spectrum in any licence area where this condition has not yet been satisfied. In addition, the licensee must provide the  Minister of Innovation, Science and Economic Development with any documentation or information related to spectrum access or HSPA network footprints at the Minister of Innovation, Science and Economic Development’s request.

13. General deployment requirement

Licensees will be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use, as specified in annex F, within 10 years of the initial issuance of the licence.

Where the licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

14. Mandatory antenna tower and site sharing

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. Mandatory roaming

The licensee must comply with the mandatory roaming 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.

16. Annual report

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 statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
  • a report of the R&D expenditures as set out in these conditions of licence. ISED may request an audited statement of R&D expenditures with an accompanying auditor’s report at its discretion
  • supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
  • 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 ISED

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 ISED at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Emerging Networks
235 Queen Street (6th Floor, East Tower)
Ottawa, Ontario K1A 0H5

17. Amendments

The Minister of Innovation, Science and Economic Development retains the discretion to amend these terms and conditions of licence at any time.


Annex B — Proposed conditions of licence — 2500 MHz

Based on the proposals outlined in this Consultation, it is proposed that the following conditions of licence apply to the 2500 MHz licences being auctioned through this 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 of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development 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. Such action would normally only be undertaken after consultation.

1.  Licence term

The term of this licence is 20 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.

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 Innovation, Science and Economic Development following a public consultation.

2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of Innovation, Science and Economic Development 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.

3. Spectrum aggregation limits

The licensee must comply with the spectrum aggregation limit as follows:

A limit of 40 MHz in the 2500 MHz band, excluding the restricted bands at 2570-2575 MHz and 2615-2620 MHz, applies to all licensees, with the exception of the Northwest Territories, Yukon and Nunavut service areas, where there is no limit.

 The spectrum aggregation limit will continue for five years from the date of licence issuance. No transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum aggregation limit during this period. Any change in ownership or control of a licensee or any other agreement that has the effect of granting a right or interest in a 2500 MHz licence to another licensee in this band may be considered as a licence transfer for the purpose of this condition of licence, whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Innovation, Science and Economic Development for any change that would have a material effect on its compliance with the spectrum aggregation limit. Such a request must be made in advance for any proposed transactions within its knowledge. At any time, at the request of ISED, the licensee will be required to provide updated information demonstrating ongoing compliance with this condition of licence.

4. Licence transferability, divisibility and subordinate licensing

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

The licensee must make the transfer request in writing to ISED. 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. The licensee must apply in writing to ISED 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 ISED will be considered a breach of this condition of licence.

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 ISED 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 ISED 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.

In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23. The terms "affiliate"; "agreement"; "deemed transfer"; "licence"; "prospective transfer"; "subordinate licence"; and "transfer request" have the meaning ascribed to them in CPC-2-1-23. Subordinate licences will generally count towards the subordinate licensee’s spectrum aggregation limit unless the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where approval for a subordinate licence that would otherwise exceed the spectrum aggregation limit is granted, licensees must implement their plans to the satisfaction of ISED for at least the duration of the aggregation limits that are in place. Any modifications to these plans must be submitted to ISED for approval.

ISED 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. ISED may grant such requests based on the merits of the proposal.

5. Treatment of existing spectrum users

The licensee must comply with all displacement and/or transition policies set out in SMSE-005-11, Decisions on the Band Plan for Broadband Radio Service (BRS) and Consultation on a Policy and Technical Framework to License Spectrum in the Band 2500-2690 MHz. In addition, the licensee must not cause harmful interference to the grandfathered stations in Manitoba, as per DGSO-001-10, Decisions on the Transition to Broadband Radio Service (BRS) in the Band 2500-2690 MHz and Consultation on Changes Related to the Band Plan.

6. Radio station installations

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

7. Provision of technical information

When ISED 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.

8. Compliance with legislation, regulation and other obligations

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.

9. Technical considerations, and international and domestic coordination

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.

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.

10. Lawful interception

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.

The licensee may request the Minister of Innovation, Science and Economic Development to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister of Innovation, Science and Economic Development, 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 of Innovation, Science and Economic Development, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

11. Research and development

The licensee must invest, as a minimum, two percent of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter‑carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

12. General deployment requirement

Licensees will be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use, as specified in annex F, within 10 years of the initial issuance of the licence.

Where the licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

13.  Mandatory antenna tower and site sharing

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.

14. Mandatory roaming

The licensee must comply with the mandatory roaming 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 report

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 statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
  • a report of the research and development expenditures as set out in these conditions of licence. ISED may request an audited statement of research and development expenditures with an accompanying auditor’s report at its discretion
  • supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
  • 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 ISED

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 ISED at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Emerging Networks
235 Queen Street (6th Floor, East Tower)
Ottawa, Ontario K1A 0H5

16. Amendments

The Minister of Innovation, Science and Economic Development retains the discretion to amend these terms and conditions of licence at any time.


Annex C — Proposed conditions of licence — 2300 MHz

Based on the proposals outlined in this Consultation, it is proposed that the following conditions of licence apply to the 2300 MHz licences being auctioned through this 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 of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development 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.

1. Licence term

The term of this licence is 20 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.

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 Innovation, Science and Economic Development following a public consultation.

2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of Innovation, Science and Economic Development 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.

3. Licence transferability, divisibility and subordinate licensing

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

The licensee must make the transfer request in writing to ISED. 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. The licensee must apply in writing to ISED 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 ISED will be considered a breach of this condition of licence.

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 ISED 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 ISED 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.

In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23. The terms "affiliate"; "agreement"; "deemed transfer"; "licence"; "prospective transfer"; "subordinate licence"; and "transfer request" have the meaning ascribed to them in CPC-2-1-23. Subordinate licences will generally count towards the subordinate licensee’s spectrum aggregation limit unless the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where approval for a subordinate licence that would otherwise exceed the spectrum aggregation limit is granted, licensees must implement their plans to the satisfaction of ISED for at least the duration of the aggregation limits that are in place. Any modifications to these plans must be submitted to ISED for approval.

ISED 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. ISED may grant such requests based on the merits of the proposal.

4. Treatment of existing spectrum users

The licensee must comply with the displacement policies set out in Appendix 3 of the Policy and Licensing Procedures for the Auction of Spectrum Licences in the 2300 MHz and 3500 MHz Frequency Band (revised July 2004).

5. Radio station installations

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

6. Provision of technical information

When ISED 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.

7. Compliance with legislation, regulation and other obligations

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.

8. Technical considerations, and international and domestic coordination

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.

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.

9. Lawful interception

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.

The licensee may request the Minister of Innovation, Science and Economic Development to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister of Innovation, Science and Economic Development, 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 of Innovation, Science and Economic Development, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

10. Research and development

The licensee must invest, as a minimum, two percent of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter‑carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

11. General deployment requirement

Licensees will be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use, as specified in annex F, within 10 years of the initial issuance of the licence.

Where the licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

12. Mandatory antenna tower and site sharing

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.

13. Mandatory roaming

The licensee must comply with the mandatory roaming 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.

14. Annual report

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 statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
  • a report of the R&D expenditures as set out in these conditions of licence. ISED may request an audited statement of R&D expenditures with an accompanying auditor’s report at its discretion
  • supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
  • 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 ISED.

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 ISED at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Emerging Networks
235 Queen Street (6th floor, East Tower)
Ottawa, Ontario K1A 0H5

15. Amendments

The Minister of Innovation, Science and Economic Development retains the discretion to amend these terms and conditions of licence at any time.


Annex D — Proposed conditions of licence — 1910-1915/1990-1995 MHz (PCS)

Based on the proposals outlined in this Consultation, it is proposed that the following conditions of licence apply to the PCS licences being auctioned through this 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 of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development 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.

1. Licence term

The term of this licence is 20 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.

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 Innovation, Science and Economic Development following a public consultation.

2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of Innovation, Science and Economic Development 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.

3. Licence transferability, divisibility and subordinate licensing

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

The licensee must make the transfer request in writing to ISED. 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. The licensee must apply in writing to ISED 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 ISED will be considered a breach of this condition of licence.

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 ISED for review of the prospective transfer within 15 days of entering into the agreement, which will be treated as set out in CPC‑2‑23. Should ISED 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.

In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23. The terms "affiliate"; "agreement"; "deemed transfer"; "licence"; "prospective transfer"; "subordinate licence"; and "transfer request" have the meaning ascribed to them in CPC‑2‑1‑23. Subordinate licences will generally count towards the subordinate licensee’s spectrum aggregation limit unless the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where approval for a subordinate licence that would otherwise exceed the spectrum aggregation limit is granted, licensees must implement their plans to the satisfaction of ISED for at least the duration of the aggregation limits that are in place. Any modifications to these plans must be submitted to ISED for approval.

ISED 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. ISED may grant such requests based on the merits of the proposal.

4. Treatment of existing spectrum users

The licensee must comply with the displacement policies set out in the Policy and Licensing Procedures for the Auction of Additional PCS Spectrum in the 2 GHz Frequency Range (June 2000).

5. Radio station installations

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

6. Provision of technical information

When ISED 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.

7. Compliance with legislation, regulation and other obligations

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.

8. Technical considerations, and international and domestic coordination

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.

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.

9. Lawful interception

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.

The licensee may request the Minister of Innovation, Science and Economic Development to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister of Innovation, Science and Economic Development, 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 of Innovation, Science and Economic Development, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

10. Research and development

The licensee must invest, as a minimum, two percent of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter‑carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

11. General deployment requirement

Licensees will be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use, as specified in annex F, within 10 years of the initial issuance of the licence.

Where the licence is transferred during the initial 10 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

12. Mandatory antenna tower and site sharing

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.

13. Mandatory roaming

The licensee must comply with the mandatory roaming 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.

14. Annual report

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 statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
  • a report of the R&D expenditures as set out in these conditions of licence. ISED may request an audited statement of R&D expenditures with an accompanying auditor’s report at its discretion
  • supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
  • 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 ISED

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 ISED at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Emerging Networks
235 Queen Street (6th Floor, East Tower)
Ottawa, Ontario K1A 0H5

15. Amendments

The Minister of Innovation, Science and Economic Development retains the discretion to amend these terms and conditions of licence at any time.


 Annex E — Proposed conditions of licence — 1670-1675 MHz (I Block)

Based on the proposals outlined in this Consultation, it is proposed that the following conditions of licence apply to I Block licences being auctioned through this 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 of Innovation, Science and Economic Development continues to have the power to amend the terms and conditions of spectrum licences (paragraph 5(1)(b) of the Radiocommunication Act). The Minister of Innovation, Science and Economic Development 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.

1. Licence term

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.

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 Innovation, Science and Economic Development following a public consultation.

2. Eligibility

The licensee must comply on an ongoing basis with the applicable eligibility criteria in subsection 9(1) of the Radiocommunication Regulations. The licensee must notify the Minister of Innovation, Science and Economic Development 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.

3. Licence transferability, divisibility and subordinate licensing

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

The licensee must make the transfer request in writing to ISED. 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. The licensee must apply in writing to ISED 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 ISED will be considered a breach of this condition of licence.

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 ISED 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 ISED 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.

In all cases, the licensee must follow the procedures as outlined in CPC-2-1-23. The terms "affiliate"; "agreement"; "deemed transfer"; "licence"; "prospective transfer"; "subordinate licence"; and "transfer request" have the meaning ascribed to them in CPC-2-1-23. Subordinate licences will generally count towards the subordinate licensee’s spectrum aggregation limit unless the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where approval for a subordinate licence that would otherwise exceed the spectrum aggregation limit is granted, licensees must implement their plans to the satisfaction of ISED for at least the duration of the aggregation limits that are in place. Any modifications to these plans must be submitted to ISED for approval.

ISED 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. ISED may grant such requests based on the merits of the proposal.

4. Treatment of existing spectrum users

The licensee must comply with the displacement policies set out in the Licensing Framework for the Auction for Spectrum Licences for Advanced Wireless Services and other Spectrum in the 2 GHz Range (December 2007).

5. Radio station installations

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

6. Provision of technical information

When ISED 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.

7. Compliance with legislation, regulation and other obligations

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.

8. Technical considerations, and international and domestic coordination

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.

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.

9. Lawful interception

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.

The licensee may request the Minister of Innovation, Science and Economic Development to forbear from enforcing certain assistance capability requirements for a limited period of time. The Minister of Innovation, Science and Economic Development, 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 of Innovation, Science and Economic Development, the requirement is not reasonably achievable. Requests for forbearance must include specific details and dates indicating when compliance to the requirement can be expected.

10. Research and development

The licensee must invest, as a minimum, two percent of its adjusted gross revenues resulting from the use of this licence, averaged over the term of the licence, in eligible research and development (R&D) activities related to telecommunications. Eligible R&D activities are those which meet the definition of scientific research and experimental development adopted in the Income Tax Act, as amended from time to time. Adjusted gross revenues are defined as total service revenues, less inter‑carrier payments, bad debts, third party commissions, and provincial goods and services taxes collected. The licensee is exempt from R&D expenditure requirements if it, together with all affiliated licensees that are subject to the R&D condition of licence, has less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence. For this condition of licence, an affiliate is defined as a person who controls the carrier, or who is controlled by the carrier or by any person who controls the carrier, as per subsection 35(3) of the Telecommunications Act.

11. General deployment requirement

Licensees will be required to demonstrate to the Minister of Innovation, Science and Economic Development that this spectrum has been put to use, as specified in annex F, within 8 years of the initial issuance of the licence.

Where the licence is transferred during the initial 8 years, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date. Deployment by a subordinate licensee will count towards the requirement of the primary licensee.

12. Mandatory antenna tower and site sharing

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.

13. Mandatory roaming

The licensee must comply with the mandatory roaming 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.

14. Annual report

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 statement indicating the annual gross operating revenues from the provision of wireless services in Canada and, where applicable, the annual adjusted gross revenues resulting from the use of this licence, as defined in these conditions of licence
  • a report of the R&D expenditures as set out in these conditions of licence. ISED may request an audited statement of R&D expenditures with an accompanying auditor’s report at its discretion
  • supporting financial statements where a licensee is claiming an exemption based on, together with all affiliated licensees that are subject to the R&D condition of licence, it having less than $1 billion in annual gross operating revenues from the provision of wireless services in Canada, averaged over the term of the licence
  • 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 ISED

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 ISED at the following address:

Innovation, Science and Economic Development Canada
Spectrum Management Operations Branch
Manager, Emerging Networks
235 Queen Street (6th floor, East Tower)
Ottawa, Ontario K1A 0H5

15. Amendments

The Minister of Innovation, Science and Economic Development retains the discretion to amend these terms and conditions of licence at any time.


Annex F — Deployment requirements for residual licences

700 MHz Licences

Table F1: Ten-year deployment requirements for 700 MHz licences
Tier 4 Service Area Name Frequency Population* Minimum Population Coverage**
4-170 Yukon 746-751 MHz
777-782 MHz
33,926 20%
4-171 Nunavut 746-751 MHz
777-782 MHz
29,597 20%
4-172 Northwest Territories 746-751 MHz
777-782 MHz
41,102 20%

* Population figures based on Statistics Canada 2011 Census information.

** Based on most recent census information available at the time of assessment.

2500 MHz Licences

Table F2 Ten-year deployment requirements for 2500 MHz licences
Tier # Service Area Name Frequency Population* Minimum Population Coverage**
3-020 Kingston 2500-2510 MHz
2620-2630 MHz
175,895 50%
3-027 Guelph / Kitchener 2560-2570 MHz
2680-2690 MHz
696,463 50%
3-029 Niagara-St. Catharines 2560-2570 MHz
2680-2690 MHz
367,803 50%
3-030 London / Woodstock / St. Thomas 2560-2570 MHz
2680-2690 MHz
832,095 50%
3-050 Kootenays 2500-2510 MHz
2620-2630 MHz
134,352 15%
3-051 Okanagan / Columbia 2560-2570 MHz
2680-2690 MHz
415,223 40%
3-053 Victoria 2560-2570 MHz
2680-2690 MHz
432,549 50%
3-054 Nanaimo 2500-2510 MHz
2620-2630 MHz
185,404 40%
3-055 Courtenay 2500-2510 MHz
2620-2630 MHz
114,583 50%
3-056 Thompson / Cariboo 2500-2510 MHz
2620-2630 MHz
179,998 40%
3-057 Prince George 2500-2510 MHz
2620-2630 MHz
187,639 40%
3-058 Dawson Creek 2500-2510 MHz
2620-2630 MHz
65,542 30%
3-039 Winnipeg 2605-2620 MHz 1,033,768 50%
3-040 Brandon 2605-2620 MHz 174,484 20%
3-041 Regina 2605-2620 MHz 366,473 40%
3-042 Moose Jaw 2605-2620 MHz 100,244 25%
3-043 Saskatoon 2605-2620 MHz 562,780 40%
3-044 Edmonton 2595-2620 MHz 1,464,088 50%
4-170 Yukon 2595-2620 MHz 33,926 20%
4-171 Nunavut 2595-2620 MHz 29,597 20%
4-172 Northwest Territories 2595-2620 MHz 41,102 20%
3-001 Newfoundland and Labrador 2585-2595 MHz 514,711 30%
3-002 Prince Edward Island 2585-2595 MHz 140,204 30%
3-003 Mainland Nova Scotia 2585-2595 MHz 786,472 40%
3-004 Cape Breton 2585-2595 MHz 135,224 30%
3-005 Southern New Brunswick 2585-2595 MHz 172,318 50%
3-006 Western New Brunswick 2585-2595 MHz 217,159 30%
3-007 Eastern New Brunswick 2585-2595 MHz 360,145 30%
3-010 Chicoutimi-Jonquière 2585-2595 MHz 368,254 40%
3-011 Eastern Townships 2585-2595 MHz 543,370 30%
3-014 Upper Outaouais 2585-2595 MHz 124,827 10%
3-016 Pembroke 2585-2595 MHz 112,950 15%
3-017 Abitibi  2585-2595 MHz 190,271 30%
3-018 Cornwall 2585-2595 MHz 67,288 50%
3-019 Brockville 2585-2595 MHz 84,038 40%
3-020 Kingston 2585-2595 MHz 175,895 50%
3-021 Belleville 2585-2595 MHz 195,564 40%
3-022 Cobourg 2585-2595 MHz 62,837 30%
3-023 Peterborough 2585-2595 MHz 206,161 50%
3-024 Huntsville 2585-2595 MHz 78,789 30%
3-028 Listowel / Goderich / Stratford 2585-2595 MHz 133,542 15%
3-031 Chatham 2585-2595 MHz 100,110 50%
3-032 Windsor / Leamington 2585-2595 MHz 390,154 50%
3-033 Strathroy 2585-2595 MHz 171,946 50%
3-034 North Bay 2585-2595 MHz 126,606 40%
3-035 Sault Ste. Marie 2585-2595 MHz 132,116 50%
3-036 Sudbury 2585-2595 MHz 177,314 50%
3-037 Kirkland Lake 2585-2595 MHz 114,167 30%
3-038 Thunder Bay 2585-2595 MHz 222,900 40%
3-044 Edmonton-Makaoo,
AB  (3-044-007)***
2585-2595 MHz 1,463,833 50%
3-045 Medicine Hat / Brooks 2585-2595 MHz 190,825 30%
3-046 Lethbridge 2585-2595 MHz 177,304 40%
3-047 Calgary 2585-2595 MHz 1,390,228 50%
3-048 Red Deer 2585-2595 MHz 240,348 25%
3-049 Grande Prairie 2585-2595 MHz 186,005 25%
3-050 Kootenays 2585-2595 MHz 134,352 15%
3-054 Nanaimo 2585-2595 MHz 185,404 40%
3-055 Courtenay 2585-2595 MHz 114,583 50%
3-056 Thompson / Cariboo 2585-2595 MHz 179,998 40%
3-057 Prince George 2585-2595 MHz 187,639 40%
3-058 Dawson Creek 2585-2595 MHz 65,542 30%
4-170 Yukon 2585-2595 MHz 33,926 20%

* Population figures based on Statistics Canada 2011 Census information.

** Based on most recent census information available at the time of assessment.

***3-044-007 is a combination of Tier 3-044 and the Alberta portion of Tier 3-043.

Table F3: Ten-year deployment requirements for 2300 MHz licences
Tier Service Area Name Frequency Population* Minimum Population Coverage**
4-065 Port-Cartier/Sept-Îles 2305-2320 MHz
2345-2360 MHz
47,167 50%
4-092 Sarnia *** (4-092-002) 2305-2320 MHz
2345-2360 MHz
104, 487 50%
4-119 Estevan 2305-2320 MHz
2345-2360 MHz
45,956 50%
4-171 Nunavut 2305-2320 MHz
2345-2360 MHz
29,597 50%

* Population figures based on Statistics Canada 2011 Census information.

** Based on most recent census information available at the time of assessment.

***4-092-002 is a subdivision of Tier 4-092 and includes Sarnia, Forest and the immediate vicinity.

Table F4: Ten-year deployment requirements for PCS-G licences
Tier Service Area Name Frequency Population* Minimum Population Coverage**
2-03 New Brunswick 1910-1915 MHz
1990-1995 MHz
749,623 50%
2-09 Northern Ontario 1910-1915 MHz
1990-1995 MHz
773,104 50%
Table F5: Eight-year deployment requirements for Block I licences
Tier Service Area Name Frequency Population* Minimum Population Coverage**
2-01 Newfoundland & Labrador 1670-1675 MHz 514,711 50%
2-02 Nova Scotia & PEI 1670-1675 MHz 1,061,900 50%
2-05 Southern Quebec 1670-1675 MHz 5,683,127 50%
2-06 Eastern Ontario & Outaouais 1670-1675 MHz 2,347,556 50%
2-08 Southern Ontario 1670-1675 MHz 10,091,045 50%
2-11 Saskatchewan 1670-1675 MHz 1,029,497 50%
2-12 Alberta 1670-1675 MHz 3,648,798 50%
2-13 British Columbia 1670-1675 MHz 4,399,805 50%

Annex G — Bidding examples

The following examples illustrate different bidding scenarios, the provisional winning bid(s), as well as the price calculations for each.

Example 1:

Example 1
Tier Block (Size) Opening Bid ($) Bidder 1's Bid ($) Bidder 2's Bid ($) Bidder 3's Bid ($)
4-170 C1 (10 MHz) 45,000 47,000 45,600 49,500

Let us assume that there are three bidders interested in the 700 MHz block (10 MHz) in Tier 4‑170. Bidder 1 places a bid of $47,000, Bidder 2 places a bid of $45,600 and Bidder 3 places a bid of $49,500. Bidder 3 would be declared the provisional winner and would be required to pay the second highest bid value of $47,000.

Example 2
Tier Block (Size) Opening Bid ($) Bidder 1's Bid ($) Bidder 2's Bid($) Bidder 3's Bid ($)
4-171 C1 (10 MHz) 39,000 39,500 42,000 42,000

Let us assume that there are three bidders interested in the 700 MHz block (10 MHz) in Tier 4‑171. Bidder 1 places a bid of $39,500, Bidder 2 places a bid of $42,000 and Bidder 3 places a bid of $42,000. Bidders 2 and 3 have tied with a bid of $42,000 and are asked to re-bid.

Example 3
Tier Block (Size) Opening Bid ($) Bidder 1's Bid ($)
4-172 C1 (10 MHz) 55,000 60,700

Let us assume that there is only one bidder interested in the 700 MHz block (10 MHz) in Tier 4‑172. Bidder 1 places a bid of $60,700. Bidder 1 would be declared the provisional winner. Since there are no other bids on the licence, Bidder 1 would pay the opening bid price of $55,000.

Example 4
2500 MHz Block H Licence (s) Opening Bid ($) Bidder 1's Bid ($) Bidder 2's Bid ($) Bidder 3's Bid ($)
3-018 Cornwall 34,000   35,000  
3-019 Brockville 43,000   44,000  
3-020 Kingston 114,000   115,000 128,000
3-018 Cornwall
3-019 Brockville
77,000   82,000  
3-019 Brockville
3-020 Kingston
157,000   163,000 172,000
3-018 Cornwal
3-019 Brockville
3-020 Kingston
191,000 200,000 199,000 207,000

Suppose that there are three bidders interested in three 2500 MHz H Block licences covering Cornwall, Brockville and Kingston Tier 3 service Areas in Group G. Let us assume that these bidders did not place bids on any other licences in Group G and that no other bidders placed bids on these three licences.

Bidder 1 submits one bid of $200,000 for a package of all three licences. Bidder 2 submits six bids: $35,000 for Cornwall, $44,000 for Brockville, $115,000 for Kingston, $82,000 for a package that includes Cornwall and Brockville, $163,000 for Brockville and Kingston and $199,000 for a package of all three licences. Bidder 3 submits three bids: $128,000 for Kingston, $172,000 for Brockville and Kingston, and $207,000 for a package of all three licences.

Bidder 2 would be declared the provisional winner for a package that includes Cornwall and Brockville and Bidder 3 would be declared the provisional winner for Kingston, as the combination of their bids in these areas is higher than any other feasible combination of submitted bids.

To calculate the Vickrey price for Bidder 2, its winning bid ($82,000) is subtracted from the value of the winning combination ($210,000) resulting in $128,000. Next, the winning combination is recalculated for the hypothetical situation in which Bidder 2’s bids are excluded. The best assignment, excluding Bidder 2, assigns all three licences to Bidder 3 at $207,000. The Vickrey price for Bidder 2 is the value of the winning combination with all of Bidder 2’s bids excluded ($207,000) less the sum of the winning bids for all bidders other than Bidder 2 ($128,000); that is, its Vickrey price is $79,000 ($207,000 − $128,000).

To calculate the Vickrey price for Bidder 3, its winning bid ($128,000) is subtracted from the value of the winning combination ($210,000) resulting in $82,000. Next, the winning combination is recalculated for the hypothetical situation in which Bidder 3’s bids are excluded. The best assignment, excluding Bidder 3, assigns all three licences to Bidder 1 at $200,000. The Vickrey price for Bidder 3 is the value of the winning combination with all of Bidder 3’s bids excluded ($200,000) less the sum of the winning bids for all bidders other than Bidder 3 ($82,000); that is, its Vickrey price is $118,000 ($200,000 − $82,000).

In some cases, the second price (Vickrey price) may not be high enough to ensure that there is no alternative bidder or group of bidders prepared to pay more for the licences in question, and so an additional payment above Vickrey prices is required. In the event that such a payment is required, the Department proposed to weight the portion of the additional payment to be paid on the winning package sizes evaluated at the opening bid prices.

In this example, the total amount of Vickrey prices calculated for Bidder 2 and Bidder 3 is $197,000 ($118,000+$79,000), which is less than Bidder 1’s bid of $200,000 for all three licences. Therefore, Bidder 2 and Bidder 3 must split an additional payment of $3,000 ($200,000- $197,000) to satisfy the condition that no other bidder or group of bidders were prepared to pay more for the licences in question.   Since the sum of opening bid prices for the three licences is $191,000 the additional payment of Bidder 2 evaluated at the opening bid prices is $1,209($3,000 × $77,000 / $191,000) for a final payment of $80,209. Similarly, the additional payment of Bidder 3 evaluated at the opening bid prices is $1,791 ($3,000 × $114,000 / $191,000) for a final payment of $119,791 ($118,000+$1,791).

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