The Innovation, Science, and Economic Development (ISED) of Canada has detailed the guidelines surrounding the upcoming 3,500MHz wireless spectrum frequency auction to used by future 5G networks.
Applications and deposits for spectrum licences will be due in October, with the full auction commencing in December, ISED confirmed during a conference call with reporters on March 5.
In total, there will be 1,506 licences up for bidding.
ISED set the opening bid prices for 3,500MHz at CA$558 million, although the final amount would be determined by the auction bids and could be much higher, and the revenues would be paid to the Canadian Consolidated revenue fund.
The 600MHz auction held last year raised CA$3.47 billion.
Auction rules are a bit different this time. The 200MHz licences will be sold in 10MHz blocks across 172 areas defined as tier 4 service areas. In the 600MHz 5G spectrum held last year, there were only 16 areas.
An ISED spokesperson said during the conference call that this is due to the nature of the 3,500Mhz band as its higher frequency limits its range. The 600MHz spectrum was able to provide service over long distances. Since the 3,500MHz frequencies offer data over shorter ranges, it required a different geographical division.
“It makes it a bit more granular and a bit easier for a greater variety of people to participate in the auction,” the spokesperson said.
Not all frequency blocks will be available in all 172 areas. Furthermore, ISED will provision 50MHz for smaller carriers in 138 regions.
In regions that don’t have the full 50MHz for provisioning, all spectrums will be open to bidding. ISED said that four of these areas are large municipalities where competition should be maximized. The rest of the 30 are more rural areas that already have current licences holders. In these areas, ISED decided against provisioning because it wanted to drive more business cases to those areas.
Once the auction concludes, ISED will mandate the winners to deliver services on these licences on a five, seven, 10, and 20-year targets. The higher the population density, the faster the services must deploy.
Currently, the 3,500MHz band is being used to deliver fixed wireless internet services. Most of these licences were granted to rural and remote communities on a 10-year term between 2004 and 2009. As part of its 2014 decision to reallocate the 3,500MHz band, ISED will allow existing licensees to renew their licence on a 1-year basis for flexible use, meaning that the bands can continue to deliver fixed internet or new mobile services. Existing licensees will also be able to continue to deliver services on their spectrums until the winner rolls out their services.
In June 2019, Minister of Innovation, Science, and Industry (ISI) Navdeep Bains decided to let rural wireless internet service providers keep the majority of the spectrum that they hold within the 3,500MHz band.
