Spectrum Considerations
for WISP Operators in BCBA
April 28, 2015
Delivered to
Prepared by
BCBA Conference
Stuart Jack,
Partner
Nordicity
1
Table of Contents
1.
2.
3.
4.
5.
6.
7.
8.
Introduction to Spectrum Management in Canada
Factors Affecting Spectrum Demand and Availability
Spectrum Availability: Overview
IC Framework for Spectrum Transfers, Division and
Subordinate Licensing (TDS)
Spectrum Availability and Access to Spectrum for
ISPs
Availability of Spectrum in Upper Bands
Potential Solutions
Appendices
1. FCC Rules Regarding White Spaces
2. Auctions
Questions
Copyright 2014 © NGL Nordicity Group Ltd. All Rights Reserved.
2
1. Introduction to Spectrum Management in
Canada
 Industry Canada manages spectrum with the policy objective:
 To maximize the economic and social benefits that Canadians
derive from the use of the radio frequency spectrum resource
 Additionally, IC has policies regarding the:
 Placement of spectrum into the highest economic use and
 Prevention of spectrum warehousing
 Favour competition in the marketplace
 Spectrum Management program is guided broadly by the
following Acts:
 The Radiocommunication Act
 The Telecommunications Act
 The Broadcasting Act
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3
2. Factors Affecting Spectrum Demand and Availability
Technology
 Evolution of technology (e.g. cognitive radios)
 Rival standards may result in incompatible equipment and inefficient use of
spectrum (incl. interference) [e.g. TDD WiMax vs. FDD LTE; broadcasting
digital TV ATSC vs. DVB2; In unlicensed 5.8GHz band, LTE-U vs. WiFi]
 Newer technology and prices for equipment are driven by manufacturers
and operators in Asia, US, Europe. Canadian service providers typically align
their technological plans and equipment strategies with those of US operators
(i.e. CDN ‘add-ons’ orders) [important to have developed and compatible
ecosystems].
 Cost of gear e.g. Whitespace gear in 3.5GHz band is still relatively costly
Copyright 2014 © NGL Nordicity Group Ltd. All Rights Reserved.
4
2. Factors Affecting Spectrum Demand and Availability
Regulatory
 CDN frequency allocations correspond with ITU Region 2
(Americas)
 Economic realities require IC to harmonize with the FCC
 Spectrum allocation
 Coordination/interference
 Release of spectrum (Canada generally lags behind US (‘US plus
3 years’- see Appendix)
 Technology, combined with additional regulatory flexibility, can
enable more efficient spectrum usage and increase access to
spectrum for the ISPs, resulting in greater benefit to
consumers to innovative services at a reasonable cost.
 In some cases technology lags behind the regulatory process e.g. no
VoLTE technology yet available for FWA
 2014 Consultation on Re-classification of 3.5GHz spectrum &
service areas as ‘urban’ for mobile services

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2. Factors Affecting Spectrum Demand and Availability
Policy
 Broadband Availability in Rural Areas
 Canada lags in broadband availability in rural areas and has
difficulty in defining broadband: In Canada, 5 Mbps/1 Mbps. In
the US, it is 25 Mbps/3 Mbps.
Market
 Service evolution: need for spectrum to deliver broadband
services
 Netflix & other OTT services are driving the demand for ISP
bandwidth
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6
3. Spectrum Availability and Access for ISPs Overview
ISPs use a combination of unlicensed, lightly-licenced and fully-licenced
spectrum to deliver their services to Canadians
 Unlicensed bands:
 ISPs operate with a combination of three bands: 2.3, 3.5 and 5.8 GHz;
 WISPs use unlicensed spectrum in the bands: 900MHz (25 MHz), 2400 MHz (80
MHz) and 5800 MHz (125 MHz / 230 MHz) of spectrum. *
 In the West in particular, some ISPs are using ‘white space’ spectrum, however, this
has been subject to restrictions notable the 120 Km exclusion zone from the border
 Spectrum transfers (see TDS)
 Licensed bands:
 Due to congestion on and uncertainty with unlicensed bands, many WISPs are
looking for access to licenced spectrum; however,
 Licenced spectrum is often too expensive or inappropriately configured (tiers) – see
Appendix
 Likely further licensing – including auctions, of spectrum e.g. IC held back some of
the unpaired lots in the current April, 2015 auction of 2.5GHz band
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7
4. Spectrum Availability: IC TDS Licensing
Framework
In 2013, Industry Canada developed a Spectrum Licence Transfer
framework policy for transfers, divisions and subordinate (TDS)
licensing of spectrum licences
 Objectives:
 Address issues of spectrum aggregation and competition in
Canada
 Ensure increased competition in the wireless sector;
 Subordinate licensing enables more efficient use of spectrum by:
 Allowing licensees contract with other service providers to operate
within the licence area, using all/ portion of their licensed spectrum*
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8
4. Spectrum Availability: IC TDS Licensing
Framework
Track record for TDS transfers
 Nordicity assessed TDS transfers in order to examine how much new
spectrum is made available to new ISPs
 According to Industry Canada data from 2011 to March 5, 2015, there
were a total of 570 TDS transfers during this period
 In order to provide fair assessment the following transfers were not
included:
 Acquisition of one ISP by another ISP
 Company name change
 Transfers between divisions of the same company
Total # of Licences Divided, Transferred and Subordinated
570
# of Licences (Net of acquisitions, same company transfers and
name changes)
492
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4. Spectrum Availability: IC TDS Licensing Framework
Track Record for TDS transfers (cont’d)
 The majority of licences were transferred between large incumbents
 There were 92 licence trades involving independent ISPs
 The top bands for ISPs acquiring spectrum were Cellular and FWA
Category and
number of
licences
PCS (98)
AWS
(22)
Cellular
(64)
FWA(2300MH
z)
(112)
FWA
(3500MHz)
(187)
Total All
Bands
(483)
Incumbents* to
independent
ISPs**
2%
5%
25%
0%
0%
4%
Between Large
Incumbents
95%
77%
23%
91%
91%
88%
Independent ISPs
to incumbents
2%
9%
48%
2%
2%
7%
Between
Independent ISP’s
1%
9%
3%
7%
7%
1%
* National and regional
operators
**ISPs (Excluding Xplornet)
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10
4. Spectrum Availability: Track Record for TDS
transfers
 Track Record for TDS transfers: Since 2013 (cont’d)
 IC approved the transfer of two PCS spectrum licences from
7574720 Canada to i-MobileCa;*
 IC approved two subordinate spectrum licensing in the cellular band
from Sogetel Mobilité Inc. (Sogetel) to Bell Mobility Inc. (Bell) in
Nantes, QC and St-Liboire, QC
 To meet the policy objective, in 2014, Mr. Moore, Industry Minister,
blocked the transfer of 83 spectrum licences from Nextwave to
Inukshuk**
 Issues
 Short term sublicensing (year to year extensions) from operators create
uncertainty for ISPs
 LTE “grabbing” spectrum from FWA re. 3GGP allocation of spectrum: bands 42
& 43
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5. Availability of New Spectrum in Upper
Bands
 Technology
 Historically, wireless services have been targeted at bands below 3
GHz due to technological and practical limitations.
 New technologies promise to facilitate next generation ‘5G’ wireless
services - primarily mobile but also fixed wireless services –– with the
objective to dramatically increase broadband speeds and the
development of new features for clients
 Platforms - Drones, robots, high-altitude balloons and low-altitude satellites
are all envisioned to provide fifth-generation (5G) wireless connections as
early as 2020 (FCC)
 Small cells can be deployed in any frequency band, the lower power and
coverage requirements of small cells mean higher frequencies can be used
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5. Availability of New Spectrum in Upper
Bands
Regulatory Initiatives – hot topic for next WRC Conf.
 FCC (USA)
 October 2014 - FCC launched a public consultation on potential uses and
technology requirements for high-frequency wireless spectrum above 24
GHz
 Manufacturers and developers researching feasibility of millimetre wave
technologies (MVT) for both next-generation mobile services and novel
“Internet of Things” applications.
 Ofcom (UK)
 Released a report on bands above 6GHz (April, 2015)
 New possibilities for spectrum sharing may be opened up as a result of beam
widths being smaller at higher frequencies
 Ofcom auctioned spectrum in the 10, 28, 32 and 40 GHz bands in 2008.
 Current licensing structure of these bands might facilitate repurposing in the
future as they are mostly held as blocks of spectrum by a small number of
operators
 Sufficient spectrum below 6 GHz will be required to provide the coverage
layer required to deliver a good user experience for 5G
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13
5. Spectrum Availability in Upper Bands > 20
GHz
Industry Canada
 Consultation on a new licensing framework and licence renewal process for
the 24, 28 and 38 GHz Bands was conducted in June 2014
 Microwave bands have typically been used by ISPs for backhaul
 MSI, Bell, Rogers, I-NetLink and Québecor noted that demand is expected to
increase in the 24, 28 and 38 GHz bands as backhaul capacity is required for
wireless networks
 For these bands (24, 28 and 38) the licence is transferable in whole or in part
(divisibility), in both bandwidth and geographic dimensions, subject to Industry
Canada's approval.
 TELUS stated that the 38 GHz band has significant spectrum that could be
used for short urban backhaul
 Also suggested that the fragmentation between FCFS and auctioned spectrum makes it difficult to
use this band as a fibre alternative in urban areas since that would require paired blocks larger
than 50 MHz.
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14
6. Potential Solutions
1. Spectrum Transfer
2. New Technologies and Devolution
3. Additional Spectrum
4. Mandatory Spectrum Sharing
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6.1 Spectrum Transfer, Division & Subordinate Licensing
(TDS)
 Significant amount of licensed but unused spectrum among
incumbents;
 IC could adopt more aggressive policies that would enable
smaller ISPs to gain access to that spectrum:
 Place restrictions on incumbents’ current warehoused
spectrum i.e. ‘use it or lose it’*
 ‘Re-farm’ spectrum from lower to higher economic uses
 Require incumbents to give priority in subordinate licensing to
smaller users that have the least spectrum
 Subordinate Licensing of Spectrum enables efficient utilization of
spectrum
 Possibility of subordinate licensing of 3.5 GHz Tier 4 licences
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6.2 Application of New Technologies and Devolution
White space spectrum
 IC is in the process of establishing procedures and technical rules to permit the
introduction of Television White Space (TVWS) devices in the TV bands* .
 Spectrum will be managed via a dynamic database; however devices will be
exempt from licensing and will operate on a no-interference, no-protection basis
 Responsibility for spectrum sharing is devolved from regulator to operators
3.5 GHz spectrum
 Renewal of 3.5 GHz spectrum provides an additional 50MHz of lightly licensed
spectrum**.
 Tiered spectrum sharing offers the opportunity for multiple users to share
spectrum users through database-driven prioritized access and offer reliable
broadband service.
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6.3 Making Available Additional Spectrum
 Upcoming Auctions of re-purposed or under or
unused spectrum;
 Recently completed AWS-3 Auction provides opportunities due
to limits imposed on larger players.
 Digital switchover will make available additional TV spectrum in
600MHz band
 Likely further licensing – including auctions, of spectrum e.g. IC
held back some of the unpaired lots in the current April, 2015
auction of 2.5GHz band;
 Under what conditions would ISPs be provided with a set aside
by IC as ‘spectrum poor’ service providers?
Unlicensed Spectrum
 Offered to smaller, spectrum-poor players on a priority basis
 Can be used to deliver broadband access over large areas;
 It is an opportunity for small/medium sized ISPs to gain
affordable access to spectrum;
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6.4 Mandatory Sharing of Operators’ Facilities
 IC has implemented Mandatory Roaming agreements and
Antenna Tower/Site Sharing in the interest of consumers.
 Mandatory Spectrum sharing may hold promise as a means to
increase the efficient use of spectrum
 FCC Title II regulation of firms e.g. Google Fiber under Telecoms
Act and facilities sharing (poles, conduits)*
 April 17, 2015 – FCC approves plan to let broadband providers
and military share spectrum (3550MHz to 3700MHz)
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19
Appendices
Appendix 1. FCC Rules Regarding White
Spaces
 In 2011, FCC approved the first device that could operate in
white space frequencies
 There are currently 10 authorized TV bands, four of which
are approved by OET* to provide service to TV White Space
devices
 Mitigation of Interference Issues**
 Fixed devices must register their location in the database;
 Devices cannot transmit without checking database and
must check periodically;
 Fixed devices may not operate adjacent to an occupied
TV channel.
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Appendix 2. Auctions: Formats and Features
 Simultaneous Multiple Rounds Auction (SMRA)




Licences are auctioned simultaneously over many rounds of bidding
Results are posted each round
Percentage increase on lowest bid in order to remain in the running
Winner announced after no new bids
 Combinatorial Clock Auction (CCA)
 Participants place bids on “packages” rather than individual items
 Auction consists of three phases: clock rounds, supplementary round
and assignment round
 This format eliminates the risk that bidders may win some but not all of
the licences that they desire – this is particularly important given the
regional nature of the licences to be auctioned
 High level of complexity due to activity rules and rules that allow
generation of large number of bids
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App 2: Canada’s 2500 MHz Auction (April
2015)
 Change from SMRA to CCA format for 2.5 GHz auction
 Minimizes ‘risk exposure’ (getting some spectrum needed for the
business case but not all of it, or getting spectrum that is not needed)
 CCA allows bidders to create “packages” of licenses that, when
combined, make a good business case at the price that reflects their
valuation.
 Encourages truthful bidding, diminishes potential for gaming and
collusion
 CCA format is very complex and doesn’t allow the bidders to know how
much exactly they will be paying for the spectrum they want
 Greater efficiency in allocation of spectrum
 Closer to market value
 First time mobile and fixed spectra are auctioned together
 Caps on mobile and fixed incumbents (Bell and Rogers for FDD;
Xplornet, SSI for TDD) provides opportunity for new players and
encourages competition
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App 2: Comparison of FCC and IC Auction
Dates
Band
CANADA
FCC
AWS-3
Mar 2015
Jan 2015
AM Broadcast
May 2014
700 MHz
Jan 2014
2011
PCS
Jan 2001
Dec 2000- Jan 2001
AWS -1
May 2008
Sep 2006
Broadband Wireless Access (24
GHz and 38 GHz)
1999
--
2.3 GHz and 3.5 GHz
2004 and 2005
1997
Air-Ground Services (849851MHz, 894-896 MHz)
2009
2006
2.5 GHz and 2.69 GHz
2015
1996
Sources: 1) Industry Canada, Spectrum Auctions (2015). Available at: http://www.ic.gc.ca/eic/site/smtgst.nsf/eng/h_sf01714.html
2) FCC, Auction Summary (2014). Available at: http://wireless.fcc.gov/auctions/default.htm?job=auctions_all
Copyright 2014 © NGL Nordicity Group Ltd. All Rights Reserved.
24
App 2: How much did the winners pay for 700 MHz
spectrum
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App 2: Comparison of CDN 700MHz to Other
Auctions
Source: Nordicity’s presentation to CTCA delegates. Prices adjusted for 2014.
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26
App 2: AWS-3 Results ($/Licence/MHz/Pop)
$0.33
$0.29
$0.03
Bell Mobility Inc.
$0.03
Bragg
TELUS
Vidéotron s.e.n.c.
Communications Communications
Incorporated
Company
$0.03
WIND Mobile
Corp.
Source: Nordicity’s calculations
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27
App 2: IC Auctions to Date
Band Plan
Licensing Information
Auction Date
24 and 38 GHz
Total 354 licences
Licences Won: 260
October 18, 1999 November 19, 1999
PCS-2GHz
Total 64 licences.
Licenses won -52
2001
2300 and 3500 MHz
Total 849 Spectrum Licences in 172 service areas.
License Won: 392
2004
2300 and 3500 MHz
(Residual)
Total 457 spectrum licences in 172 service areas
Licences Won: 306
2004-05
AWS-1
Total 292 Spectrum Licences in Tier 2 and 3 service
areas
Licences Won: 282
2008
Air Ground (849-851 MHz;
894-896 MHz)
Total 2 national spectrum licences
Licences Won: 2
2009
700 MHz
Total 98 Tier 2 licences
Licences Won: 97
2014
AWS (1755-1780 MHz and
2155-2180MHz)
2500-2690 MHz
2015
Current Holdings: Inukshuk, Rogers, Bell, Xplornet,
SaskTel, SSI Micro, IC
2015 (In progress)
Source: Industry Canada, Spectrum Auctions (2015).
Available at: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf01714.html
Copyright 2014 © NGL Nordicity Group Ltd. All Rights Reserved.
28
Thank You
Questions?