Innovation Minister details 3500MHz spectrum auction and more on rural areas

Innovation, Science and Economic Development Minister Navdeep Bains said there will be changes to the 3500MHz spectrum band, with a consultation on auction rules for 2020.

During his speech at the Canadian Telecom Summit on June 5th, he also announced that the government “decided to make over 7GHz of millimeter wave spectrum available for licence-exempt use this year, and another 4.85GHz for licensed use in 2021.”

His department has also proposed to auction “additional 5G spectrum in the 3800MHz band in 2022.”

Bell and Rogers in a partnership, called Inukshuk, have 76 percent of the spectrum in the band.

One of the largest holders of this band is also rural broadband provider Xplornet. The company has said it is extremely concerned that by having the existing band re-auctioned off, it may be difficult deploying services to its more than 350,000 customers.

During a technical briefing, senior ISED officials said that changes to the 3500MHz auction include a transition period for Inukshuk and Xplornet. The official said that both band holders will be able to continue functioning until after the auction.

After which, the two would apply for the use of 60MHz of the 3500MHz licence. The official said that even if areas use more than 60MHz of the spectrum, the holder would only be able to apply for that specific amount.

The official said that it was hard to determine how much Inukshuk and Xplornet will suffer because the department is dealing with 172 geographic locations and the impact could vary.

The official added that because Inukshuk holds more of the existing 3500MHz spectrum, they will see a larger reduction.

Inukshuk, Xplornet will have buffers

The official also said that the licence holders would also have a transition plan, with rural areas having a longer transition period.

Further, the official added that the two holders of the spectrum will be able to continue using the spectrum they have until an auction winner intends to deploy in that specific area.

In a hypothetical scenario, if someone is in a remote area, they will continue to use 100 percent of their services and they will keep having access until a carrier that won spectrum in the auction builds 5G in the area.

The new spectrum holder would have to notify the government of its plans to build out the network, at which time the existing holder will have to move.

The official said the more remote the location the less immediate the transition will be and in some locations that could be a long time.

Auction is key for 5G deployment

It’s worth noting that this auction is far more important than the more recent auction of the 600Mhz band. It is also expected that the Big Three are expected to be major players for the 3500MHz auction.

Bains announced last year that spectrum auctions would be set for these bands in 2020 and 2021.

“All these measures — the millimetre wave and 3500 and 3800 bands — will allow our telecom providers to provide 5G services to Canadians in a timely manner,” Bains said at the summit. “I also want to reassure you that today’s decisions reflect our government’s strong determination to ensuring rural Canadians can fully participate in the digital economy.”

More recently, the government auctioned off 600MHz spectrum, which resulted in $3.47 billion CAD. The auction also set aside 43 percent of the spectrum for regional wireless operators and potential new entrants in order to foster competition.

This auction will offer operators a spectrum that is low-frequency and is able to penetrate through buildings and provide long distance coverage.

In general, 5G operates over traditional and new cell radio frequency bands that include the low- (sub-1GHz such as 700MHz), mid- (1.6GHz, around 3.5-3.8GHz), and millimetre-wave (mmWave, such as 28GHz) ranges.

Bains noted that when 5G is fully deployed, it is expected to add $40 billion annually to Canada’s economy by 2026.