Federal government to hold auction for wireless spectrum in November

OTTAWA – The federal government will hold its long-awaited wireless spectrum auction this November with an aim to have at least four wireless-service providers in every region of the country.

Ottawa hopes the move will help lower consumer prices by opening the door for upstart companies to enter a market that has been dominated by big players such as Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T).

“Today, our government is implementing a series of measures to ensure that Canadian consumers continue to benefit from more choice in the wireless sector and faster wireless speeds at better prices,” Industry Minister Christian Paradis said in prepared remarks as he announced the Nov. 19 start date.

The 700-megahertz wireless spectrum, which is up for auction, will be sought after by companies because it is considered ideal for use by new high-speed networks in high-density urban areas and in rural Canada.

The spectrum up for auction has the ability to allow cellphone calls in elevators, deep in underground parking lots and in tunnels in big cities, and in basements and attics in suburban areas. It also provides better and more affordable coverage in rural Canada because fewer cellphone towers are needed to provide coverage.

Companies will have to bid on the entire package of licenses they want rather than on a collection of individual licenses. Applications are due June 11.

There will also be requirements for carriers with access to two blocks of paired spectrum to deploy their services to rural areas.

“Our government’s priority is to provide greater wireless coverage at lower rates for consumers,” said Paradis’ prepared remarks.

“Wireless services are changing our families, our work and our economy — whether these services include the tools that help families stay connected regardless of where they live, access to high-definition video and video conferencing that connects businesses around the world, or greater access to e-health, intelligent transport systems and other advanced applications that will revolutionize rural living.”

The announcement follows earlier steps to help smaller wireless providers enter the market by getting rid of foreign-investment restrictions.

Ottawa has also previously announced measures for cell-tower sharing, and requirements that companies provide wireless roaming to their competitors.

The government will also review its policy on transfer requests for spectrum licenses ahead of November’s auction. Starting today and ending in early May, companies and other key players in the wireless industry will be asked for their input on a range of issues.

The government says at least 1000 MHz of mobile broadband spectrum will be needed by the start of the next decade, as more people use wireless devices.

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