Consultation on the Spectrum Licence Renewal Process for Non-Auctioned Broadband Radio Services (BRS) Licences

Through the release of this document, Innovation, Science and Economic Development Canada (ISED), on behalf of the Minister of Innovation, Science and Economic Development (the Minister) is consulting on the renewal process for certain spectrum licences in the 2500 MHz band (2500 – 2690 MHz) for broadband radio services (BRS), specifically, converted Multipoint Communications System (MCS) and Multipoint Distribution Services (MDS) licences that expire March 31, 2021.

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

3. The Minister is provided the general powers for spectrum management in Canada, pursuant to section 5 of the Radiocommunication Act and sections 4 and 5 of the Department of Industry Act. The Governor in Council may make regulations with respect to spectrum management, pursuant to section 6 of the Radiocommunication Act.

4. In developing policies and licensing frameworks, the Minister is guided by the policy objectives of the Telecommunications Act, and the Spectrum Policy Framework for Canada (SPFC), which seeks to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource. These objectives, along with the enabling guidelines outlined in the SPFC, continue to be relevant for guiding the Minister in delivering their mandate of spectrum management.

5. The Minister’s objectives for the renewal of the relevant licences are to:

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

6. In 2006, ISED designated the 2500-2690 MHz frequency range (2500 MHz) for flexible use (mobile, fixed and broadcasting), thereafter named Broadband Radio Service (BRS), in DGTP-002-06, Policy Provisions for the Band 2500-2690 MHz to Facilitate Future Mobile Service. Existing MCS and MDS licensees operating in the 2500 MHz band wishing to offer mobile services were permitted to apply for flexible-use BRS licences, to be granted once a band plan was established.

7. Following the 2011 Decisions on a Band Plan for Broadband Radio Service (BRS) and Consultation on a Policy and Technical Framework to License Spectrum in the Band 2500-2690 MHz, ISED began issuing flexible-use BRS licences to MCS and MDS licensees for approximately two thirds of the originally licensed spectrum (herein referred to as non-auctioned BRS licences). The remaining one third of spectrum was returned to ISED. All non-auctioned BRS licences expire on March 31, 2021.

8. In February 2011, ISED initiated a consultation to license unassigned spectrum in the 2500 MHz band, including the aforementioned returned BRS spectrum. Following the publication of the Licensing Framework for Broadband Radio Service (BRS) — 2500 MHz Band in 2014, ISED auctioned BRS spectrum (herein referred to as auctioned BRS licences) in 2015, awarding licences for a term of 20 years.

9. Presently, the 2500 MHz spectrum band is ideal for deploying advanced networks and services, such as those based on the long-term evolution (LTE) network standard. The spectrum is highly useful in expanding the wireless capacity of mobile systems in urban areas and may also be deployed for fixed wireless systems in rural areas.

10. Non-auctioned BRS licensees can utilize the same technology, offer the same services, operate over the same band plan and are licensed using the same Tier 3 service areas (Tier 4 in the North) as auctioned BRS licensees. Given the similarities, ISED is proposing to harmonize the licence conditions of non-auctioned BRS licences with those of auctioned BRS licences, notably in relation to licence terms and deployment conditions.

11. All non-auctioned BRS licences expire on March 31, 2021. The renewal decision developed through this consultation will address all non-auctioned BRS licences.

12. As stated in the Decisions on the Transition to Broadband Radio Service (BRS) in the Band 2500–2690 MHz and Consultation on Changes Related to the Band Plan, licensees will have a high expectation of renewal where conditions of licence have been met, unless a fundamental reallocation of spectrum to a new service is required or an overriding policy need arises.

13. ISED is not planning any fundamental reallocation of this spectrum at this time, nor does it see any overriding policy need that would preclude renewal of these non-auctioned BRS licences. Accordingly, ISED proposes to renew non-auctioned BRS licences where the licensees can demonstrate that they are in compliance with all licence conditions.

14. ISED will consider spectrum usage at time of renewal, and licensees have a high expectation of renewal if they can demonstrate population coverage, which is at a minimum consistent with the roll-out targets set in annex C of Decisions on the Transition to Broadband Radio Service (BRS) in the Band 2500–2690 MHz and Consultation on Changes Related to the Band Plan. It is therefore proposed that licensees with deployment to at least the level set out in annex C will be eligible for renewal.

15. Licensees are reminded that commercial arrangements with third parties for the use of the spectrum can be an effective way for licensees to meet their deployment requirements in their licence area. These arrangements would require ISED approval through an application for a subordinate licence.

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

25. Fixed service incumbents operate in the 2500 MHz band in British Columbia and Quebec. These systems are permitted to continue to operate, but are subject to displacement and minimum notification periods as outlined in Decisions on a Band Plan for Broadband Radio Service (BRS) and Consultation on a Policy and Technical Framework to License Spectrum in the Band 2500–2690 MHz.

26. In addition, there are also grandfathered MCS operations by school divisions in Manitoba authorized on a site-specific basis. These systems will continue to be afforded protection from interference from BRS systems in accordance with Decisions on a Band Plan for Broadband Radio Service (BRS) and Consultation on a Policy and Technical Framework to License Spectrum in the Band 2500–2690 MHz.

27. ISED is also seeking comments on the remaining proposed conditions of licence, which would apply to new licences issued through the renewal process for non-auctioned BRS licences, described in annex B.

28. The Framework for Spectrum Auctions in Canada states that for licences issued through a renewal process, licence fees that reflect some measure of market value will apply. ISED intends to consult on a new licence fee applicable to all BRS licences issued to incumbents through either the voluntary conversion process, the transition policy or at auction.

29. However, until such time as a new fee for BRS licences is established, radio authorization fees indicated in Radio Authorization Fees for Multipoint Communications Systems (MCS) that Operate in the 2500 MHz Range and on Other Related Frequencies and Multipoint Distribution Systems (MDS) that Operate in the 2600 MHz Range that Provide Non-Broadcasting Services and announced in Decisions on the Transition to Broadband Radio Service (BRS) in the Band 2500–2690 MHz and Consultation on Changes Related to the Band Plan will continue to apply.

30. ISED will review the comments received and publish its decision. A follow up consultation will discuss a licensing framework for licences not renewed.

31. Respondents are requested to provide their comments in electronic format (Microsoft Word or Adobe PDF) by email and to specify the individual questions for ease of reference.

32. Printed submissions should be addressed to:

Senior Director, Spectrum Management Operations Branch
Innovation, Science and Economic Development Canada
235 Queen Street, 6th Floor, East Tower
Ottawa, Ontario  K1A 0H5

33. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (DGSO-002-19). Parties should submit their comments no later than May 30, 2019, to ensure consideration.

34. Soon after the close of the comment period, all comments received will be posted on the Spectrum Management and Telecommunications website.

35. ISED will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted no later than June 18, 2019. Reply comments will also be posted on the Spectrum Management and Telecommunications website.

36. As all comments and reply comments will be posted on the departmental website, those making submissions are responsible for ensuring that they do not contain confidential or private information.

37. After the initial comment period, ISED may, at its discretion, request additional information if needed to clarify significant positions or new proposals. Should additional information be requested, the reply comment deadline may be extended.

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

1. The following conditions are proposed for the renewed non-auctioned BRS spectrum licences. These conditions of licence are proposed to align with the decisions taken in other processes and the proposals within this consultation as described in section 8.

2. 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, under section 5(1)(b) of the Radiocommunication Act. The Minister may do so for a variety of 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.

3. The licensee must be fully aware of its obligations with respect to licence terms and conditions. Innovation, Science and Economic Development Canada (ISED) will monitor compliance and take any necessary action to ensure compliance and to enforce the provisions of the Radiocommunication Act and the Radiocommunication Regulations.

1. Licence Term

4. The term of this licence is 14 years from the date of renewal (March 31, 2021). 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.

5. 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 following a public consultation.

2. Eligibility

6. 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 any change that would have a material effect on its eligibility. Such notification must be made in advance of any proposed transactions within its knowledge.

3. Licence Transferability, Divisibility and Subordinate Licensing

7. 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. ISED’s approval is required for each proposed Subordinate Licence.

8. 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.

9. 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.

10. 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), the licensee 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.

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

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

4. Treatment of existing spectrum users

13. 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 Licence 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.

5. Radio station installations

14. 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

15. 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

16. 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

17. 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.

18. 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

19. The licensee operating as a 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.

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

10. Research and development

21. The licensee must invest, as a minimum, 2% 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 that 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 thae 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

22. Licensees will be required to demonstrate to the Minister that this spectrum has been put to use, as specified in section 8 and annex A of this consultation, within 4 years of the initial issuance of the licence. When the spectrum is put to use, it shall be used to provide services predominantly to Canadians within the service area.

23. ISED will review licensees’ compliance with their deployment conditions at years 4 and 14. Where, at any point in the licence term, the licensee is not in compliance with its deployment conditions, ISED may invoke various compliance and enforcement measures.

24. These measures may include warning, administrative monetary penalties, legal action, licence amendments, suspensions or other measures. In certain cases of non-compliance, ISED may determine that the most appropriate course of action is to revoke the licence.

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

12. Mandatory antenna tower and site sharing

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

13. Mandatory roaming

27. The licensee must comply with the mandatory roaming requirements set out in CPC-2-0-17, as amended from time to time.

14. Annual report

28. 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

29. 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. Where the licensee holds multiple licences, spectrum implementation reports should be broken down by licence area. Confidential information provided will be treated in accordance with subsection 20(1) of the Access to Information Act.

30. Reports are to be submitted to ISED at the following address:

Innovation, Science and Economic Development
Spectrum Management Operations Branch
Manager, Operational Policy
235 Queen Street, 6th Floor East
Ottawa, Ontario   K1A 0H5

Email: ic.spectrumoperations-operationsduspectre.ic@canada.ca

15. Amendments

31. The Minister retains the discretion to amend these terms and conditions of licence at any time.