Consultation on a Policy and Licensing Framework for Spectrum in the 3800 MHz Band

1. Through the release of this paper, Innovation, Science and Economic Development Canada (ISED), on behalf of the Minister of Innovation, Science and Industry (the Minister), is hereby initiating a consultation on a policy and licensing framework for the auction of spectrum licences in the band 3650-3900 MHz (herein after referred to as the 3800 MHz band) as announced in Canada Gazette notice SLPB-006-21.

2. Subsequent to the initial consultation entitled SLPB-002-20, Consultation on the Technical and Policy Framework for the 3650-4200 MHz Band and Changes to the Frequency Allocation of the 3500-3650 MHz Band, released in August 2020, and the resulting policy decisions announced in the document SLPB-002-21, Decision on the Technical and Policy Framework for the 3650-4200 MHz Band and Changes to the Frequency Allocation of the 3500-3650 MHz Band, released in May 2021, ISED is now seeking comments on the policy and licensing considerations including auction format, rules and processes, as well as on conditions of licence for spectrum in the 3800 MHz band. Some of the proposals below would also affect the conditions of licence for flexible use licences in the flexible use operations in the 3500 MHz band (3450-3650 MHz). Furthermore, ISED is seeking comments on measures to support connectivity in rural and remote areas.

3. 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 national policies for spectrum utilization and ensuring effective management of the radio frequency spectrum resource.

4. Wireless services are an important part of Canadians’ lives, whether they are accessing multi-media applications, conducting business while on the move, connecting with family and friends, or managing their finances. As wireless services become increasingly integrated into their lives, Canadians expect these services to be high quality, available in every region of the country, and competitively priced. Furthermore, connectivity has become even more critical during the COVID-19 pandemic, when Canadians have relied heavily on Internet access to stay connected.

5. In this context, ISED is committed to the objective that all Canadian consumers, businesses, and public institutions have access to the latest wireless telecommunications services, at competitive prices. A robust wireless telecommunications industry drives the adoption and use of digital technologies and enhances the productivity of the Canadian economy.

6. Spectrum is a critical resource for wireless carriers. Additional spectrum for flexible use will enable providers to increase network capacity to meet the traffic demands of higher usage rates and support the provision of next-generation wireless technologies. The fifth generation of technology, known as 5G, will continue to dramatically change the telecommunications landscape. 5G technology will facilitate the delivery of high-quality and innovative services to Canadian consumers and businesses. The development and deployment of 5G technologies are essential to Canada becoming a global centre for innovation, and will bring Canada to the forefront of digital development and adoption by creating and strengthening a world-class wireless infrastructure. Further, it presents a key opportunity to support competition and provide Canadians with high-quality, innovative, and competitively priced wireless services.

7. Beyond improvements to mobile and fixed wireless networks, 5G is also expected to support new wireless applications in vertical industries such as agriculture, manufacturing, healthcare, public safety and transportation. With more spectrum available, Canadians will embrace newly developed applications and services in these vertical industries. Testing and demonstrations of different use cases are already taking place domestically and internationally. Initial 5G deployments appear to focus on capacity expansions for current 4G and fixed wireless access networks in mid-band spectrum and backhaul applications. However, it is unclear at this time which business cases will drive ongoing investment in 5G networks and which services and applications will deliver the most significant benefit to Canadians.

8. Making the 3800 MHz band available for flexible use will support mobile services, such as smartphones and connected devices, and continue to support fixed wireless services. In addition, promoting access to additional flexible use spectrum for mobile and fixed wireless services will enable telecommunication service providers (TSPs) and wireless Internet service providers (WISPs) to increase their network capacity. This will be crucial in accommodating greater data usage from 5G applications and services in both urban and rural areas of Canada.

9. Canadian consumers benefit from the economies of scale when manufacturers produce equipment for many markets resulting in access to the latest devices at competitive prices for Canadians. In addition, by ensuring that ISED's spectrum management policies reflect global trends, emerging 5G standards, and expected materialization of the equipment ecosystem in the coming years, Canada will continue to benefit from the next generation of smartphones and other advanced wireless technologies devices.

10. In developing this consultation, ISED was guided by the Spectrum Policy Framework for Canada (SPFC), which states that the objective of the spectrum program is to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource. This objective and the enabling guidelines listed in the SPFC remain relevant for guiding ISED in delivering its spectrum management mandate.

11. In May 2019, the Government of Canada released Canada’s Digital Charter: Trust in a digital world (the Digital Charter). The Digital Charter lists universal access as the first of ten principles that will lay the foundation for a made-in-Canada digital approach and guide policy thinking and actions towards establishing an innovative, people-centred, inclusive digital and data economy built on trust. Universal access is the principle that all Canadians will have an equal opportunity to participate in the digital world and have the necessary tools to do so, including access, connectivity, literacy and skills.

12. The Government of Canada is also committed to connecting all Canadians to affordable, reliable high-speed Internet and improving access to the latest mobile services. In 2019, High-Speed Access for All: Canada’s Connectivity Strategy set a national connectivity target to make broadband speeds of at least 50 megabits per second (Mbps) download and 10 Mbps upload available to all Canadian homes and businesses. As part of this commitment, ISED is considering the need to support and encourage connectivity for rural and remote communities in the 3800 MHz licensing processes.

13. The proposals set out in this document support the objectives of the Telecommunications Act, the SPFC, the Digital Charter and Canada’s Connectivity Strategy by positioning Canada at the leading edge of the digital economy through the release of the 3800 MHz band to support 5G technologies. Consequently, ISED’s policy objectives for the 3800 MHz band are to:

• foster investment and the evolution of wireless networks by enabling the development of high-quality 5G networks and technology
• support sustained competition in the provision of wireless services so that all consumers and businesses benefit from greater choice and competitive prices
• facilitate the deployment and timely availability of services across the country, including in rural, remote, and Northern regions

14. Different frequencies possess unique propagation characteristics and can be developed to offer applications and services that make use of these different characteristics and benefits. ISED considers that planning the release of spectrum in low-, mid- and high-frequency bands will be beneficial to the deployment of 5G technologies offering higher speeds, lower-latency and improved capacity and coverage.

15. In April 2019, ISED completed the auction for the 600 MHz band to support increased network capacity and the deployment of next-generation technologies using low-band spectrum. In June 2019, ISED published SLPB-003-19, Decision on Releasing Millimetre Wave Spectrum to Support 5G, to begin the process to make this high-band spectrum, optimal for low-latency and high-bandwidth use, available for 5G services in the future. Furthermore, in March 2020, ISED published SLPB-001-20, Policy and Licensing Framework for Spectrum in the 3500 MHz Band, outlining the format and rules for the 3500 MHz auction, which was held in June 2021. This auction released up to 200 MHz of mid-band spectrum to support the deployment of 5G services and applications across Canada.

16. In May 2021, ISED released the Decision on the Technical and Policy Framework for the 3650-4200 MHz Band and Changes to the Frequency Allocation of the 3500-3650 MHz Band (referred to as the 3800 MHz Decision), which reallocated spectrum in 3650-4000 MHz band for flexible use.

17. Taking into account these developments, ISED is hereby consulting on a policy and licensing framework for spectrum in the 3800 MHz band.

18. In the 3800 MHz Decision, ISED adopted a band plan that will make the 3800 MHz band (3650-3900 MHz) available for auction in 25 unpaired 10 MHz blocks as shown in figure 1. This band plan would support Long Term Evolution (LTE) and 5G New Radio (NR) equipment to operate using a 10 MHz channel bandwidth. These 10 MHz blocks can be aggregated to create larger bandwidths for broadband applications.

Figure 1: 3800 MHz band plan

19. ISED will set new technical requirements to apply to flexible use licences in the 3800 MHz band. These requirements must take into account a number of factors including co-existence with users within and outside of a band. In this context, ISED recognizes the importance of avoiding harmful interference to aeronautical radionavigation systems. Radio altimeters are sensors installed on most civil and military aircraft and operate in the 4200-4400 MHz band. They continuously measure an aircraft’s altitude above ground level in flight and provide direct measurement of its clearance over terrain and obstacles. They also feed information to other systems on board the aircraft, including the automated landing and collision avoidance systems. The RTCA and EUROCAE are expected to release new aviation industry standards for radio altimeters in 2022 to address potential interference concerns, but it could take several years to implement, certify and deploy new equipment on existing aircraft.

20. International spectrum regulators, including ISED, have recently become aware of studies that have shown a possibility of interference to radio altimeters from signals outside their band of operation, which could include signals from future flexible use deployment of 5G systems operating below 4200 MHz.

21. In the 3800 MHz Decision, ISED committed to continue to monitoring ongoing developments internationally and to assess possible mitigation measures to limit the potential interference to radio altimeters from flexible use operating in the 3800 MHz band, as necessary.

22. Given the immediate need to address potential interference to radio altimeters from flexible use in the 3500 MHz band, in August 2021, ISED initiated a Consultation on Amendments to SRSP-520, Technical Requirements for Fixed and/or Mobile Systems, Including Flexible Use Broadband Systems, in the Band 3450-3650 MHz.  In September 2021, ISED published an Addendum to Consultation on Amendments to SRSP-520, Technical Requirements for Fixed and/or Mobile Systems, Including Flexible Use Broadband Systems, in the Band 3450-3650 MHz, which closed on October 15, 2021.

23. On November 18, 2021, ISED published the Decision on Amendments to SRSP-520, Technical Requirement for Fixed and/or Mobile Systems, Including Flexible Use Broadband Systems, in the Band 3450-3650 MHz, which included measures to protect radio altimeter operation from harmful interference from flexible use systems operating in the 3500 MHz band.

24. The mitigation measures for the 3500 MHz band are required while international and domestic studies are still underway to further assess the potential adjacent band interference to radio altimeters from flexible use operation.  Depending on the outcomes of these studies, mitigation measures may also be needed to protect radio altimeters from flexible use operation in the 3800 MHz band (3650-3900 MHz).  In the interim, ISED is proposing to extend the mitigation measures applicable to the 3500 MHz band, as described in SRSP-520, to flexible use operations in 3650-3900 MHz.

25. This section discusses fixed satellite services (FSS) earth stations, which operate outside of satellite-dependent areas that are not required to transition and will continue to operate in the full 3700-4200 MHz band.

7.1 Sites for consolidated FSS gateways

26. In the 3800 MHz Decision, ISED decided that in order to ensure continuity of service in satellite-dependent areas, a maximum of four locations (also referred to as consolidated sites) could be identified, where existing telemetry, tracking and command (TT&C) and gateway operations located in non satellite-dependent areas that serve satellite-dependent areas could be consolidated. Earth stations located at these sites would be permitted to continue their operation in the full 3700-4200 MHz band, and be entitled to the same protections and notifications as earth stations in satellite-dependent areas. As decided, only TT&C operations for satellites and gateway operations approved and existing as of the date of the 3800 MHz Decision will be considered as eligible for relocation to a consolidated site. ISED further decided that two consolidated sites will be existing teleports located in Weir, Quebec at 200 Chemin Larose, Montcalm, QC J0T 2V0 and Allan Park, Ontario at 133438 Allan Park Rd. West Grey, ON N4N 3B8. Both facilities have operated as commercial teleports for decades, hosting earth stations of other licensees, and could host relocated TT&C and/or gateway earth stations from other licensees who currently have those types of earth stations operating in Canada.

27. ISED indicated that the locations of up to two other consolidated sites would be determined through further consultation. No additional sites were suggested, as indicated in the 3800 MHz Decision, other than the commercial teleport sites located at in Weir, Quebec and Allan Park, Ontario. Some respondents did, however, agree that the consolidated sites should be geographically spaced across the country (for example, in Eastern and Western Canada), be located away from major population centers, be located in proximity to major network interconnection points and fiber, and be accessible to maintenance staff.

28. Following the 3800 MHz Decision, ISED conducted informal outreach with satellite operators and users of gateways who would be eligible for relocation to the consolidated sites in order to gather preliminary views ahead of this formal consultation. Some licensees identified existing sites in metropolitan and urban Tier 5 areas (Montréal, Quebec and Ottawa, Ontario) as being important for the continued delivery of services in satellite-dependent areas. Additionally, they expressed that relocating to a consolidated site would impose significant costs on licensees and did not see benefits in relocating. Some parties supported the identification of the Ottawa site as a consolidated location, or another suitable location for a new consolidated gateway facility.

29. Some also noted concerns regarding being limited to a small number of consolidated gateways including having competitive rates, access to sites and guarantees for quality of service. They suggested that competition risks of operating at a teleport owned by another company could be offset by authorizing additional competitive consolidated sites but did not provide specific site locations in Western Canada.

30. ISED takes note of the views that additional consolidated sites with geographic redundancy and proximity to major network interconnection points would benefit FSS operations in satellite-dependent areas and indicated in the 3800 MHz Decision that it would consider additional sites. However, aside from sites in Weir, Quebec, Allan Park, Ontario, and Ottawa, Ontario, no new sites outside of urban areas and in the Western Canada were identified by respondents to the 3800 MHz Consultation and the informal consultation with satellite operators.

31. Additionally, existing approved C-band satellites serving satellite-dependent areas are within visibility of both Allan Park and Weir, therefore ISED is not proposing the addition of consolidated sites in Western Canada.

32. In terms of the views expressed that relocating to a consolidated site would impose significant costs and no benefits, ISED notes that the decision on whether or not to relocate to a consolidated site is up to the eligible licensees. FSS operators may operate gateways in the 4000-4200 MHz band anywhere in Canada or relocate to a consolidated site to take advantage of being able to continue operating in the full 37004200 MHz band.

33. ISED recognizes the concern that licensees have guaranteeing a level of service to its customers, and the potential issues of using a site controlled by a third party. However, the two consolidated sites are commercial teleports that have operated for decades and that both already host earth stations from multiple licensees. Both teleport operators have confirmed that there is room to accommodate additional earth stations. Since the consolidated sites are only open to licensees with existing TT&C and/or gateway facilities as per the 3800 MHz Decision, and that the protection of operations in the 37004000 MHz band at these sites will only continue until the end of life of existing satellites, ISED expects that two sites in Eastern Canada should be sufficient to support C-band operations.

34. In terms of requests received to protect existing earth stations in Ottawa and Montréal, ISED notes that protecting the operation of these sites in the frequency band 3700-4200 MHz would prevent any significant deployment of flexible use in these areas, counter to ISED’s policy to introduce flexible use in the 3700-3900 MHz band. As such, ISED will not entertain requests for additional consolidated or protected gateways in metropolitan or urban areas.

35. ISED is proposing to not identify additional consolidated gateway sites other than those already identified in the 3800 MHz Decision in Weir, Quebec and Allan Park, Ontario. Flexible use licensees in the 3700-3900 MHz band with licences in Tiers 4-050 Joliette, 4-051 Montréal, 4-052 Sainte-Agathe-des-Monts, 4-053 Hawkesbury, 4-054 Mont-Laurier/Maniwaki, 4-078 Alliston, 4-080 Fergus, 4-081 Kincardine, and 4-082 Listowel/Goderich will be required to meet technical rules that will be established in the relevant Standard Radio System Plans (SRSP) and Radio Standards Specifications (RSS) to protect the Weir, Quebec and Allan Park, Ontario consolidated gateway sites. ISED will monitor the ongoing use of C-band services in satellite-dependent areas, and may reassess the continued need for operations in the full 3700-4200 MHz range at consolidated sites.

7.2 Government of Canada FSS earth stations in North Bay

36. As part of the informal discussions, ISED noted that the 3800 MHz band is used by the Government of Canada for FSS, which is supported by earth stations located in North Bay. Given the importance of this location, ISED is of the view that Government of Canada earth stations at this location would be permitted to continue their operations in the full 3700-4200 MHz band, and be entitled to the same protections and notifications required by the 3800MHz Decision for earth stations in satellite-dependent areas. This site would remain for Government of Canada use only.  Flexible use licensees in 3700-3900 MHz band with licences in Tiers 4-059 Notre-Dame-du-Nord, 4-097 North Bay, and 4-098 Parry Sound will be required to meet technical rules that will be established in the relevant SRSP and RSS to protect the Government of Canada North Bay site. As noted above, ISED will monitor the ongoing use of C-band services and may reassess the need for continued operations in the full 3700-4200 MHz range for the Government of Canada North Bay location.

37. ISED’s Service areas for competitive licensing webpage outlines the general service areas that are used for the purposes of issuing spectrum licences. The defined geographic areas have been categorized under “service area tiers” that are based on Statistics Canada's Census Divisions and Subdivisions.

38. As different wireless services and applications are best suited to different sizes of service areas, five tiers of service areas have been established.

• Tier 1 is a single national service area
• Tier 2 consists of 14 large service areas covering all of Canada
  • eight Tier 2 service areas that have provincial/territorial boundaries and
  • six that are sub-provincial within Ontario and Quebec
• Tier 3 contains 59 smaller regional service areas
• Tier 4 contains 172 localized service areas  
• Tier 5 contains the smallest licensing areas and comprises 654 smaller localized service areas

39. The 3500 MHz band was originally licensed on a Tier 4 basis given that licensing based on smaller tier sizes, such as Tier 4, provides flexibility to licensees, by allowing them to either concentrate on strategic geographic markets or to aggregate smaller service areas into larger regions that correspond to their business needs. The propagation characteristics of the 3800 MHz band, similar to that of the 3500 MHz band, limit the interference coordination challenges with neighboring service providers. Although licensing based on smaller tier sizes such as using Tier 5 might afford licensees additional flexibility, the smaller tier size, given the propagation characteristics of mid-band spectrum,  larger tiers (i.e. larger than Tier 5) could better enable licensees in maximizing the benefits of higher power deployments while minimizing interference concerns between neighbouring licensees, especially in urban areas. ISED also notes  that given the similarities between 3500 MHz band and 3800 MHz band, employing the same Tier size as the 3500 MHz band would allow for consistency between the two bands and better facilitate coexistence and coordination among licensees.

40. ISED is proposing to license new flexible use licences in this band using Tier 4 service areas.

41. The 3800 MHz band is internationally recognized as a key source of mid-band spectrum that is critical for the deployment of next-generation wireless networks. ISED views the licensing of the 3800 MHz band as an opportunity to further support investment by telecommunications service providers and to improve the quality, affordability, and availability of wireless services for Canadians. Building on the release of spectrum in the 3500 MHz band in 2021, the licensing of 3800 MHz spectrum will allow wireless service providers to acquire additional mid-band spectrum to support the rollout of 5G networks across the country. It presents a key opportunity to support the ability of Canada’s service providers to offer 5G services to consumers, the ability of regional service providers to compete with the national mobile service providers (NMSPs) in the provision of 5G services, and the ability of WISPs to offer 5G fixed wireless services in rural and remote areas of the country.

42. Since the federal government began taking steps to facilitate the entry of new competitors into the wireless market in 2008, additional service providers have undertaken the substantial investments required to deploy wireless networks in many markets across Canada and to provide affordable wireless services to Canadians. As a result, competition in the market has increased, providing Canadians with greater choice and more affordable services. Specifically, the Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions: 2020 Edition found that the average prices offered by regional mobile service providers (RMSPs) were up to 14% lower than plans provided by the three big national carriers. It also found that prices for low- to mid-size data plans declined as much as 28% since 2019.

43. There is a risk that competition in the post auction marketplace could be affected without measures to facilitate access to spectrum for service providers other than the three NMSPs. ISED is of the view that larger service providers likely have the means and incentive to prevent other service providers, in particular smaller ones, from acquiring spectrum licences in an open auction. Furthermore, the Competition Bureau has asserted that the NMSPs have market power in the provision of retail mobile wireless services, most recently in its intervention to the Canadian Radio-television and Telecommunications Commission’s (CRTC) review of mobile wireless services. The intervention also included a commissioned study (the Matrix Study), which found that prices are 35%-40% lower across all carriers in areas where wireless disruptors (strong regional competitors) have achieved a market share above 5.5%.

44. As noted in the Framework for Spectrum Auctions in Canada (FSAC), there are various measures available in an auction to promote a competitive marketplace if required, notably spectrum set-asides and spectrum aggregation limits, also known as spectrum caps. These measures can address issues of market power and support competition in the provision of wireless services. The factors that ISED may consider when deciding upon the use of pro-competitive measures are set out in section 4 of the FSAC.

45. A spectrum set-aside reserves a certain amount of spectrum for a defined sub-set of entities. ISED has previously used set-asides in a number of auctions, including 40% of the AWS-1 band in 2008, 60% of the AWS-3 band in 2015, 43% of the 600 MHz band in 2019, and most recently, the 3500 MHz auction in 2021, where a set-aside of 50 MHz (approximately 25% of the total band; 42% of spectrum at auction) was made available.

46. A spectrum cap limits the amount of spectrum that a single licensee is allowed to obtain, thereby regulating the distribution of spectrum across different licensees. Spectrum caps can be applied across one band (in-band) or multiple bands (cross-band). In-band spectrum caps have been used in past auctions, including the 700 MHz auction in 2014 and the 2500 MHz auction in 2015. ISED has also applied cross-band caps to ensure that a competitive environment is maintained, notably for the introduction of Personal Communications Service (PCS) licenses in 1995, where a 40 MHz cap was used across the 2 GHz and 800 MHz bands. Additionally, in 1999, ISED reviewed the spectrum cap policy and concluded that increasing the cap from 40 MHz to 55 MHz would continue to foster continued competition.

47. In some international jurisdictions, including Ireland, Australia and the United States, regulators have identified barriers in the market for wireless services, including access to mid-band spectrum. To address these barriers, these regulators have adopted pro-competitive auction measures. For example, in 2017, Ireland auctioned 350 MHz of spectrum in the 3600 MHz band, and capped each bidder at one 150 MHz block. In 2018, Australia auctioned the 3575-3700 MHz band and imposed a cap of 60 MHz in urban areas across the broader 3400-3700 MHz frequencies. Most recently, in 2021, the United States auctioned 100 MHz of spectrum in the 3450-3550 MHz band, and capped bidders at 40 MHz with a view to facilitating competition in the wireless market.

48. Given the above considerations, and in light of the policy objectives stated in section 3, ISED proposes to adopt pro-competitive measures for the 3800 MHz licensing process. ISED is seeking comment on whether to use a spectrum set-aside or a cross-band spectrum cap across the 3500 MHz and 3800 MHz bands, applied separately or together, as outlined below:

• Option 1: a 50 MHz set-aside
• Option 2: a 100 MHz cross-band cap across the 3500 MHz and 3800 MHz bands or
• Option 3: a 50 MHz set-aside and a 100 MHz cross-band cap

49. Eligibility for set-aside spectrum: If a set-aside is applied, ISED must determine which service providers will be eligible to bid on set-aside spectrum. In its effort to promote a competitive marketplace, ISED has implemented policies in various auctions that effectively reserved spectrum for certain sub-sets of entities that could acquire access to this spectrum to compete with NMSPs. Smaller service providers such as RMSPs and WISPs could benefit from an opportunity to acquire spectrum to support network improvements to meet the wireless traffic demands of their growing subscribership.

50. In the past, ISED has used specific definitions to distinguish between established service providers and newer service providers for the purpose of determining bidding eligibility. For the purpose of this consultation on the 3800 MHz auction, it is proposed that NMSPs be defined as “companies with 10% or more of the national wireless subscriber market share.” The subscriber market share will be determined by the 2020 CRTC Communications Monitoring Report.

51. ISED proposes that eligibility to bid on set-aside spectrum should be limited to a particular sub-set of service providers that are best positioned to compete in the market. As such, it is proposed that eligibility to bid on set-aside licenses be limited to those registered with the CRTC as facilities-based providers, that are not NMSPs, and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area of interest, effective as of the date of application to participate in the 3800 MHz auction. These proposed criteria are the same as those used in the 3500 MHz auction. The date of the application to participate in the 3800 MHz auction will be defined in the framework as a result of this consultation. In this consultation, these entities are referred to as set-aside-eligible bidders. Upon application to participate in the auction, applicants would be required to indicate in their application, whether they are applying to bid as a set-aside eligible or set-aside-ineligible bidder on a service area by service area basis.

52. A bidder may be eligible to qualify as a set-aside eligible bidder based on the eligibility of its affiliated entities or on the eligibility of the partners who control the bidder where the bidder is a partnership. As long as the bidder is not affiliated with or controlled by an NMSP, and where one or more affiliates or controlling partners of the bidder is registered on the CRTC facilities-based list, that bidder may be qualified as set-aside-eligible to bid in all licence areas where an affiliate or controlling partner is actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area.

53. Limiting access to any set-aside licences as noted above is more likely to result in the provision of robust advanced wireless services, both mobile and fixed, allowing for more effective and sustained competition in the post-auction marketplace. Further, in order to ensure the effectiveness of the set-aside and to deter speculation, it is proposed that any set-aside licences acquired by set-aside-eligible bidders would not be transferable to set-aside-ineligible entities for the first five years of the licence term, except under certain conditions as set out in section 13.2.

54. ISED notes that changes to a licensee's ownership structure, business relationships or service offerings after it has been issued a licence may affect the licensee's set-aside eligibility. It is proposed that the conditions of licence reflect the responsibility of any set-aside licensees to maintain their set-aside eligibility for the first five years of the licence.

55. In its assessment of a bidder’s eligibility to bid on any set-aside spectrum, ISED would determine whether commercial telecommunications services are actively being provided to the general public in the relevant Tier 2 service area, by the potential bidder. The term “general public” can include businesses, enterprises and institutions, as well as “traditional” residential consumers. Potential bidders would be required to demonstrate this by providing relevant documentation to ISED, which will include, but not be limited to, details outlining:

• the services being offered in the licence area
• the retail/distribution network and
• how subscribers access services and the number of subscribers in the service area

Further details on the application process and ISED’s requirements will be set out in the decision.

56. Set-aside block size: As discussed in section 5, there are 25 unpaired blocks of 10 MHz. Should a set-aside be applied, ISED is proposing that the set-aside blocks also be auctioned as five unpaired blocks of 10 MHz. Proposed contiguity rules for the aggregation of blocks within a specific licence area are detailed in section 10.8.

57. Application of a cross-band spectrum cap: If a cross-band cap is applied, ISED is proposing that the cap apply to the total of a licensee’s 3500 MHz and 3800 MHz spectrum licences starting from the end of the 3800 MHz auction for a period of five years.  If  a cross-band spectrum cap is applied, in licence areas where a licensee already holds 3500 MHz spectrum licences in excess of the spectrum cap, it is proposed that:

• such licensees would not be eligible to bid for additional licences in the 3800 MHz band auction in service areas where the spectrum cap has been met or exceeded
• such licensees would not be required to divest any 3500 MHz licences in order to fall within the spectrum cap

For this measure, licences held by any affiliate of the licensee would count as part of the cross band cap.  The 3500 MHz conditions of licence would be amended to reflect this decision.

58. Through the 3800 MHz Decision, ISED indicated the use of an auction process to allocate flexible use spectrum in the 3800 MHz band. The auction format should be simple, fair and transparent for bidders and it should lead to an efficient assignment of spectrum. In selecting the auction format and related rules, consideration is given to the characteristics of the spectrum being auctioned, for example, the quantity and size of the blocks, their geographic characteristics, as well as the similarities and complementarities that may exist among the blocks.

59. Given the expected demand for licences in the 3800 MHz band, reducing uncertainty concerning the value of the spectrum being offered would be of significant benefit to potential bidders. As such, ISED is proposing an auction format that allows for price discovery with multi-round simultaneous bidding.

60. With 25 blocks in 172 service areas, the proposed number of licences that may be available for the 3800 MHz band auction will significantly exceed the number of licences available in previous Canadian auctions. Based on ISED’s experience with the clock auction format in allocating a large quantity of licences in the 3500 MHz auction, ISED is of the view that this format is a practical option that permits price discovery and would allocate licences in the 3800 MHz band in a reasonable amount of time. Therefore, ISED proposes to use a clock auction format to auction licences in the 3800 MHz band.

61. Specifically, ISED is proposing the clock auction format with generic licences and intra-round bidding, as described below and in annexes D and E. The multi-round clock stage of this auction format would allow for price discovery. It would also provide an opportunity for participants to address exposure risk, as compared to other computationally feasible alternatives. The use of generic licences and intra-round bidding would support a shorter auction process. The assignment stage would also facilitate the assignment of contiguous spectrum.

10.1 Generic licences

62. As indicated in sections 5 and 8, ISED is proposing to auction the 3800 MHz band as 25 unpaired 10 MHz blocks in 172 Tier 4 service areas across Canada. ISED further proposes that these blocks will be offered as generic licences in each of the 172 service areas.

63. Generic licences are blocks of spectrum that are sufficiently similar and comparable in value to one another that they can be offered as a single category in each service area. In determining whether licences should be regarded as generic, ISED considered the frequency location in the band, the block size, the encumbrances, the transition timelines, and the possible technology and interference constraints. The use of generic licences simplifies the bidding process by enabling bidders to indicate the quantities of licences desired in each area instead of identifying specific licences, thereby also reducing the number of possible combinations that bidders have to consider in placing their bids.

64. As noted in the 3800 MHz Decision, there are currently three distinct types of incumbent users in the 3800 MHz band — wireless broadband services (WBS) from 3650-3700 MHz, fixed satellite services (FSS) from 3700-4200 MHz, and fixed operations in 3700-4200 MHz. The small number of fixed operations have been grandfathered and the transition timelines for WBS and FSS are different.

65. All WBS operations in 3650-3700 MHz will be displaced, as stated in the 3800 MHz Decision. WBS operators will be displaced by March 31, 2025 in all metropolitan and urban Tier 5 service areas, and by March 31, 2027 in all other Tier 5 service areas. In addition, FSS operations in all areas except satellite-dependent areas and consolidated gateway sites will be displaced to 4000-4200 MHz by March 31, 2025.

66. Given the proposed 20-year licence term and proposal to allow for additional time to meet the deployment requirements, ISED is of the view that the two year difference in transition timelines for rural and remote Tier 5 service areas is not likely to result in a significant difference in value between the licences in 3650-3700 MHz and the licences in 3700-3900 MHz. As such, ISED is proposing that all blocks with users that will be displaced either by March 31, 2025 or March 31, 2027 be auctioned as a single unencumbered category of generic licences.

67. As discussed in the 3800 MHz Decision, fixed operations have been grandfathered in 4104 Kenora/Sioux Lookout (Ontario) and 4-131 Medicine Hat/Brooks (Alberta). These fixed operations are in rural areas and ISED is of the view that they would have little impact on future flexible use in these service areas. As such, ISED is proposing that they be auctioned in the unencumbered category.

68. Encumbered tier areas: In satellite-dependent areas and service areas discussed in section 7, FSS earth stations will be allowed to continue operating using the full 500 MHz of spectrum from 3700-4200 MHz. As a result of the licensed FSS earth stations in satellite-dependent areas, 3700-3900 MHz will be encumbered in all but one satellite-dependent area, 4115 Portage la Prairie. Most of the satellite-dependent tiers are significantly encumbered based on current deployments of FSS earth stations, including more than 90% of the population in some areas. However, ISED expects that some of these earth stations will transition along with those in non-satellite-dependent areas and as FSS satellites meet their end of life. In addition, FSS earth stations operating in satellite-dependent service areas could also encumber parts of the population in adjacent non-satellite-dependent Tier 4 service areas (i.e. 4-058 Rouyn-Noranda, 4061 Amos,  4-099 Elliot Lake, 4-108 Thunder Bay, 4-155 Nanaimo, 4-156 Courtenay, 4-158 Squamish/Whistler, and 4-160 Kamloops,). As indicated in the 3800 MHz Decision, flexible use licensees in 3700-3900 MHz in any service area affected by FSS earth station operations located in satellite-dependent areas will be required to protect the FSS earth stations. For adjacent non-satellite-dependent service areas, ISED is proposing that all blocks in 3700-3900MHz where more than 10% of the population is encumbered be categorized as encumbered.

69. Furthermore, as previously discussed in section 7, there are 12 non-satellite-dependent Tier 4 service areas affected by the operations of FSS earth stations, including the protected Government of Canada FSS earth stations in North Bay, which are allowed to continue operating in the full 500 MHz in 37004200 MHz. ISED is proposing that all blocks in 3700-3900 MHz in these 12 service areas also be included in the encumbered category.

70. Categories of generic licences: Given the above treatment of existing licensees in the 3800 MHz band, ISED is proposing to auction 25 unencumbered blocks in 3650-3900 MHz in the 129 service areas without encumbrances, and five unencumbered blocks in 3650-3700 MHz and 20 encumbered blocks in 3700-3900 MHz in the 43 service areas with encumbrances. Encumbered service areas are listed in annex A. Note that using a different encumbrance threshold from the proposed 10% may affect the number of service areas in which two categories of licences (unencumbered and encumbered) would be available.

71. ISED is of the view that having separate encumbered and unencumbered categories allows bidders to express precise values for each category of licence during the multi-round clock stage, enabling greater price discovery. However, if multiple bidders win blocks in both the unencumbered and encumbered categories, only one of these bidders could be assigned contiguous frequencies in the assignment stage, which is discussed further in section 10.8. ISED is seeking stakeholder feedback on the proposal to auction licences in separate generic licence categories (unencumbered and encumbered) in the 43 service areas with encumbered blocks.

72. If a set-aside is applied: In the clock auction format, ISED will have to determine the initial supply of set-aside blocks in each category of generic licences. The 129 service areas with no encumbrances would have 5 unencumbered blocks reserved as set-aside. The 43 service areas with encumbrances would also have 5 blocks reserved as set-aside, however, the set-aside could be wholly contained in the unencumbered category or wholly contained in the encumbered category. If a set-aside is applied, a triple consisting of a service area, an encumbrance category, and a set-aside status (set-aside or open) is referred to as a “product.” ISED is seeking stakeholder feedback on whether the set-aside should be wholly contained in the unencumbered category or in the encumbered category under its proposal to offer licences in two separate categories of generic licences.

73. As described in section 9, if a set-aside is applied, ISED is proposing that each applicant must indicate in its application whether it is applying to bid as a set-aside-eligible or set-aside-ineligible bidder on a Tier 2 service area by service area basis. This eligibility will be applied to all Tier 4 service areas within the Tier 2. In a given service area, set-aside-ineligible bidders would be permitted to bid on up to the lower of either the available number of non-set-aside (“open”) blocks in a given service area and category or the maximum allowable under any applicable cap; while set-aside eligible bidders would be allowed to bid on up to the lower of either the total available number of blocks or the maximum allowable under any applicable cap.

74. Given that set-aside-eligible bidders could bid on more blocks than are set-aside, there is a possibility that set-aside-eligible bidders — individually or collectively — would be able to bid on and win more than the set-aside quantity in a given service area. In that case, ISED is proposing that all blocks won by set-aside-eligible bidders be considered set-aside blocks, and effectively be subject to the same conditions of licence set out in section 13.2. Although this rule would restrict the transferability of these licences for the first five years, it is noted that setting aside spectrum serves to reduce competitive barriers faced by smaller service providers, enabling them to compete in the market against the NMSPs.

10.2 Anonymous bidding

75. As has been the case in recent spectrum auctions, ISED is proposing to use anonymous bidding during the 3800 MHz band auction. Following every clock round, bidders will be provided with information on their own bidding activity from previous rounds and their eligibility for the next round. In addition, each bidder will be informed of the aggregate demand for each product from the previous round and the price of each product for the next round. Bidders will not be informed about the individual bids submitted by other bidders or about the remaining eligibility of other bidders.

76. This level of information disclosure would provide bidders with enough information to permit price discovery, allowing bidders to make informed decisions regarding their bidding strategies. Anonymous bidding would help bidders focus on their valuations for the licences, the level of aggregate demand, and the prices, rather than on the bidding behaviour of competing bidders. Anonymous bidding is therefore anticipated to reduce the potential for anti-competitive behaviour, while simplifying the bidding process.

10.3 Clock auction format

77. ISED is proposing to use a clock auction format for the 3800 MHz spectrum auction as described in annexes D and E. This is a two-stage auction format that provides a simultaneous multiple-round clock stage for generic blocks to determine the quantity of blocks won in each product, followed by an assignment stage to determine the specific frequency assignment of each licence.

10.4 Structure of the clock stage

78. The clock stage is a simultaneous multiple-round auction process with generic blocks, where all licences are offered at the same time. Before the auction begins, ISED will specify the initial supply of blocks in each product and the opening bid price (reserve price). An activity rule is used to improve price discovery and maintain auction progress.

79. Typically, the clock stage consists of a number of rounds in which the bidders identify the number of blocks demanded of each product, at the price specified by ISED for that round (the clock price). As the clock stage progresses, the clock prices of products with excess demand increase.

80. For the 3800 MHz band auction, ISED is proposing the use of “intra-round bidding” in the clock stage. With intra-round bidding, all rounds that take place after Round 1 have a range of prices associated with them. The start-of-round price is the lowest price in this range, whereas the round’s clock price is the highest price in this range. In Round 1, each bidder indicates the number of blocks it demands for each product at the opening bid price. In subsequent rounds, a bidder can either maintain its demand for a product at the round's clock price or request to change its demand at a price that is in between the start-of-round price and the clock price. The ability to express demand at a price between the start-of-round price and the clock price (rather than simply at the clock price) is referred to as intra-round bidding. This has several advantages:

• bidders can better express their demands
• ties in which multiple bidders change demand at the same price are less likely and
• a larger bid increment can be used without causing inefficiencies, reducing the duration of the auction

81. At the end of each round, bids are processed to determine the number of blocks held by each bidder for each product after the round (the processed demand). A bid to maintain demand from the previous round for a product is always applied during bid processing. A bid to increase demand for a product is applied only if the increase will not cause the bidder’s processed activity (i.e. the activity associated with the bidder’s processed demands) to exceed the bidder’s eligibility for the round and if the increase would not cause the bidder to exceed the spectrum cap (if adopted). The general principle is that a bid to decrease demand for a product is applied only if the reduction will not cause aggregate demand to fall below supply for that product (or to fall further below supply, if it is already below supply).  This guarantees that once a product has aggregate demand greater than or equal to supply, there will never be any unsold blocks for the product. For a detailed description, see section D7 of annex D.

82. A bidder can submit a bid that expresses its demand for a product at a price between the start-of-round price and the clock price, including either bound price. In a simultaneous auction with intra-round bidding, a bidder’s ability to increase its demand for one product may depend on whether it can reduce its demand for another product. In order to treat bids for different products in a consistent manner, the price intervals between the start-of-round price and the clock price are expressed in relative (percentage) terms. Bids for a change in demand are processed in ascending order of “price point.” The price point is generally defined by how much the intra-round bid exceeds the start-of-round price in percentage terms relative to the distance between the start-of-round price and the clock price for the product.

83. Once processed demands have been determined, the auction system will generally calculate the posted price of every product for the round as follows. A product’s posted price would be equal to the clock price of the same round if aggregate demand exceeds supply at the clock price. If aggregate demand for a product is equal to supply due to an intra-round bid for a reduction in demand that was applied, the posted price would be the price of that intra-round bid. Therefore, the price for the round would not need to increase to the level of the clock price if the demand and supply are balanced at some price that is below the clock price, as expressed using intra-round bidding. If aggregate demand for a product is less than or equal to supply and no bid for a reduction in demand was applied, the posted price would be equal to the start-of-round price. The round’s posted price becomes the start-of-round price for the next round.

84. If a set-aside is applied, the algorithm for setting posted prices will ensure that the posted price of the set-aside product never exceeds the posted price of the corresponding open product (i.e. open product in the same service area and encumbrance category). The algorithm also ensures that, at the conclusion of the auction, the price of the set-aside product equals the price of the corresponding open product if the number of licences won collectively by set-aside-eligible bidders exceeds the initial supply of the set-aside. This implies that set-aside-eligible bidders cannot raise the price of the open product without affecting the price of the set-aside product. For a detailed description, see section D8 of annex D.

10.5 Price increments in the clock rounds

85. Prices for the first clock round will be set according to the opening bid prices as published in the final licensing framework. ISED is consulting on the opening bid amounts for each of the licences being auctioned, as described in section 15.2. For each subsequent round, the start-of-round price would be equal to the posted price of the previous round, and the round’s clock price would be higher.

86. For the 3800 MHz spectrum auction, ISED is proposing that a round’s clock price be in the range of 1%-20% higher than the start-of-round price (or equivalently, the previous round’s posted price). Clock prices greater than $10,000 will be rounded up to the nearest $1,000, and clock prices less than $10,000 will be rounded up to the nearest $100. During the auction, ISED reserves the right to adjust the amount of roundtoround price increases within this range to facilitate the progress of an efficient and timely auction.

87. If a set-aside is applied, as is explained in annex D, when the price range for the set-aside product overlaps with the price range for the open product, the price increment for the set-aside product will be adjusted so that the clock price of the set-aside product equals the clock price of the open product.

10.6 Activity rules in the clock rounds

88. Each of the blocks available in the auction has been assigned a specific number of eligibility points ("points") that are approximately proportionate to the opening bid price of the licence. One eligibility point has been assigned for each $3000 of opening bid prices. Refer to annex F for a listing of the points for each licence and the population of each service area.

89. Each applicant must indicate in its application form the total number of "points’ worth" of blocks it wishes to be able to bid on during the auction. This number defines the bidder's initial eligibility and is also used to determine the financial deposit that must be submitted with the application. A bidder’s eligibility may not be increased once the auction has started.

90. In any round, a bidder will not be allowed to submit bids if the eligibility points associated with the bids exceed the bidder’s eligibility for the round. The term “submitted activity” for a round means the eligibility points associated with the bidder’s demands if all of its bids submitted for the round are applied during bid processing. The term “processed activity” means the eligibility points associated with the bidder’s actual processed demands.

91. In order to maintain its eligibility from the previous round, the bidder’s activity must correspond to a certain percentage of its eligibility for that round. This percentage is called the "activity requirement." ISED will set the activity requirement between 90% and 100% in all clock rounds, and will retain the discretion to change the activity requirement within that range as the auction progresses. The precise initial activity requirement will be communicated to all qualified bidders before the auction begins. Mathematical formulas for the calculation of eligibility are detailed in annex D.

92. In Round 1, a bidder’s eligibility is determined by the number of points acquired with its financial deposit. Bidders are required to indicate their demand in every round, even if their demand at the new round’s prices is unchanged from the previous round, to confirm their interest in products at the new prices. In subsequent rounds, a bidder’s eligibility in the next round is determined by the maximum of its: processed activity in the current round; and the minimum of its processed activity in the previous round and its submitted activity in the current round. This maximum is divided by the activity requirement and rounded down(e.g. divided by 0.95, if the activity requirement is 95%). Further, the bidder’s eligibility for the next round is not allowed to exceed the bidder’s eligibility for the current round.

93. This calculation method has the advantage that a bidder’s eligibility is not inadvertently reduced because some of its submitted bids are not applied. It allows for the processed activity to drop for one round without affecting the eligibility for the next round. However, if the processed activity does not increase sufficiently after the next round, the eligibility will be permanently reduced.

94. Missing bids are treated by the auction system as requests to reduce to a quantity of zero blocks at the start-of-round price for the product. If these requests are applied, or applied partially, a bidder’s processed activity, and hence its eligibility for the next round, will be reduced accordingly.

10.7 Conclusion of the clock stage

95. If a set-aside is applied, the clock stage will conclude for all products in all service areas after the first round in which, after the bids have been processed, the aggregate demand for each open product is less than or equal to its initial supply, and there is no excess demand for any set-aside product. If no set-aside is applied, the clock stage will conclude when there is no excess demand for any product in any service area. This round is referred to as the final clock round.

96. Bidders that hold processed demand for a product in a service area after the final clock round become winning bidders of the demanded quantity of the product. The price to be paid for one generic block of a product will be the product’s posted price for the final clock round. Winners will be assigned frequency-specific blocks during the assignment stage. 

10.8 Structure of the assignment stage

97. Whenever generic licences are used, the auction format must include an assignment stage to determine the assignment of specific blocks. Recognizing that using contiguous spectrum is generally more efficient,  ISED is proposing that winners of multiple blocks within a single product in a given service area receive contiguous licences to the extent possible.

98. All bidders will have an opportunity to express their preferences for specific blocks at the same time. As discussed in section 10.1, if a set-aside is applied, ISED will not designate specific frequencies as set-aside blocks in the 129 service areas where only unencumbered blocks are available. In the 43 service areas where both unencumbered and encumbered blocks are available, ISED will identify in the licensing framework whether the set-aside will be wholly contained in the unencumbered or the encumbered category.

99. Conditions for combining service areas into a single assignment area: The geographic unit for bidding in the assignment stage will be the “assignment area.” In order to simplify the assignment stage and to facilitate the assignment of contiguous spectrum across service areas, ISED is proposing that, wherever possible and as an exception to the process described above, two or more contiguous Tier 4 service areas may be combined into an assignment area.

100. To be considered an assignment area, Tier 4 service areas must form a contiguous geographic region, must be located within the same Tier 2 service area, and the Tier 4 service areas must have the same number of encumbered and unencumbered blocks. In addition, the winning bidders and the number of blocks they have won in the service areas being considered must be the same in each encumbrance category (unencumbered and encumbered).

101. Structure of the assignment stage: ISED is proposing to conduct a separate assignment round for each of the eight most populated assignment areas sequentially, in descending order of population. Once the eight most populated assignment areas have been assigned, ISED is proposing to conduct bidding for the remaining assignment areas in parallel. That is, bidding for multiple assignment areas would take place during the same assignment round. This would help to reduce the length of the assignment stage.

102. After the assignment of the eight most populated assignment  areas, ISED is proposing to rank all remaining assignment areas by population, highest to lowest, and then divide them into six sessions per assignment round. With this approach, an assignment area with one encumbrance category may be assigned in the same assignment round as an assignment area with two encumbrance categories. In general, each assignment round would not include more than one assignment area from within the same Tier 2 service area, to ensure that licences from service areas in close geographic proximity are not assigned in different sessions in the same round. As outlined in annex E, this constraint will be relaxed when there are fewer than six assignment areas remaining to be assigned. This order would provide each bidder with the additional knowledge of the assignment of its most populated assignment areas, before moving on to the next round in which it could adjust its preference for a specific assignment, based on the result obtained in the previous assignment round. This better enables bidders to obtain similar frequencies for its blocks across service areas that are in close geographic proximity.

103. Contiguity in service areas with encumbrances: As noted in section 10.1, the proposal to separate blocks into two categories of generic licences in the 43 service areas with encumbrances could create a scenario that would prevent multiple bidders that win blocks in both categories of licences (unencumbered and encumbered) from obtaining contiguous frequencies in those service areas. If only one bidder wins licences in both categories, that bidder would be assigned adjacent unencumbered and encumbered blocks. However, when more than one bidder wins licences in both categories, each bidder can be awarded contiguous blocks within each category, but it would not be possible for each such bidder to obtain contiguous frequencies across two categories. Contiguity for all winners could only be guaranteed if both the unencumbered and encumbered blocks are offered in a single generic category. ISED is of the view that offering both unencumbered and encumbered blocks as a single category would not allow bidders to express precise values between the two during the clock stage.

104. As such, ISED is proposing an approach to guarantee contiguity for one winning bidder. In this approach, each winning bidder would submit its bids for specific assignments in the unencumbered and encumbered categories separately. The auction software would use these bids to determine which of these bidders would be awarded contiguity between its unencumbered and encumbered blocks. This process is explained in detail in annex E.

105. Assignment price: Winning bidders do not have to place bids in the assignment stage if they do not have an assignment preference, as they would be guaranteed the number of generic licences that they have already won in the clock stage. Each winning bidder has both a right and an obligation to purchase one of the frequency range options presented to it in each assignment round.

106. The assignment bid is a package bid for the specific frequency locations of all blocks for a bidder in a given encumbrance category and assignment area. The assignment prices will be determined from the set of assignment bids for the encumbrance category and assignment area. The assignment price is attributable to the entire collection of blocks assigned to a given bidder in a given assignment area and not to individual blocks that comprise the package.

107. ISED is proposing to use a second-price rule to determine the prices to be paid by winning bidders in the assignment stage. More specifically, ISED is proposing to apply bidder-optimal core prices and to use the “nearest Vickrey” approach in determining the assignment prices. As described in annex E, ISED is also proposing to use a second-price approach for determining and pricing the bidder that is assigned contiguous spectrum in an assignment area with two encumbrance categories.

108. Given the pricing rules, the assignment price of each winning assignment stage package will be equal to or less than the corresponding winning bid amount, and could even be zero. The final price paid by a winning bidder would the sum of the clock stage price(s) and the assignment stage price(s).

109. The proposed structure of the assignment stage and determination of assignment prices are explained in detail in annex E.

110. Contiguity for licensee of 3640-3650 MHz: It is possible that a winning bidder in a given service area in the 3800 MHz auction is also the 3640-3650 MHz licensee in that service area. ISED is seeking stakeholder feedback on whether a winning bidder in the 3800 MHz auction that is also the 36403650 MHz licensee in that service area should be automatically assigned the blocks it has won starting at 3650-3660 MHz. As detailed in annex E, this approach would entail adding an additional condition (based on the 3640-3650 MHz licensee) for combining service areas into assignment areas. Under this approach, contiguity across the 3800 MHz and 3500 MHz bands would not be applied for such a licensee in the 43 service areas with two categories of generic licences, as it may conflict with in-band contiguity in the 3800 MHz band. As such, this approach would only apply to the 129 service areas with no encumbered products.

111. ISED recognizes that contiguous blocks of spectrum can be used more efficiently, and as such is proposing an auction format and design for the assignment stage that prioritizes assigning contiguous blocks to winning bidders within the 3800 MHz band whenever possible, as discussed in section 10.8.

112. ISED also recognizes that the 3500 MHz and 3800 MHz bands share similar propagation characteristics and could operate using the same equipment, through non-contiguous carrier aggregation, provided they fall within the technical and operational limits of the equipment.

113. In response to the 3800 MHz Consultation, stakeholders indicated that although the initial equipment deployed for 3500 MHz was expected to align with band n78 (3300-3800 MHz), n77 (3300-4200 MHz) equipment would soon be available. Given that the 3500 MHz band has already been auctioned and will soon begin being deployed, ISED is of the view that introducing a re-assignment for licences won in the 3500 MHz auction could unnecessarily delay the deployment of the 3500 MHz band by incentivizing licensees to wait until the 3800 MHz band is assigned. The differences between the transition timelines and encumbrances between the two bands would make optimizing contiguity across them challenging, through an auction.

114. Exchange of equal amounts of spectrum: In recognition of the principles for promoting the efficient use of spectrum, ISED is proposing to permit, after the announcement of the provisional licence winners, an exchange through a transfer request, of equal amounts of 3500 MHz and 3800 MHz spectrum within the same service area. This would include exchanges between a set-aside-eligible entity and a set-aside-ineligible entity and across bands, subject to the provisions of section 5.6 of  Client Procedure Circular CPC-2-1-23, Licensing Procedures for Spectrum Licences for Terrestrial Services. Allowing licence winners to exchange spectrum in 3500 MHz and 3800 MHz would improve the efficiency of spectrum utilization from 3450-3900 MHz by promoting contiguity. Note that licences in the 3500 MHz and 3800 MHz bands may be subject to different transition timelines, levels of encumbrances, deployment requirements, etc. In such cases, the transition timelines, encumbrances, deployment requirements and any other conditions of licence would remain attached to the licences themselves, however, in the case where a competitive measure applies to a licensee that measure will continue to apply to a licensee after the swap. If this proposal is adopted, the 3500 MHz conditions of licence would be amended to reflect this decision.

115. For further information on all of the requirements related to transfers, refer to CPC-2-1-23, as amended from time to time. These requirements are subject to revision and amendment for reasons including furtherance of the policy objectives related to the 3500 MHz and 3800 MHz bands. Licence transfers may also be subject to the provisions of the Competition Act.

116. In order to maintain auction integrity, as in past auctions, ISED proposes that there be rules relating to the participation of affiliated and associated entities in order to ensure that each bidder is an independent bidder. As was the case in previous auctions, it is proposed that affiliated entities not be allowed to participate separately in the auction. It is also proposed that associated entities only be allowed to participate separately if, following a review of their application, ISED is satisfied that their participation would not have an adverse impact on auction integrity. As in previous auctions, applicants will be required to disclose information about their company(ies), including affiliations and associations.

12.1 Affiliated entities

117. Proposed definition of affiliated entities: It is proposed that the definition of affiliated entities remain as it was for previous auctions, as follows:

Any entity will be deemed to be affiliated with a bidder if it controls the bidder, is controlled by the bidder, or is controlled by any other entity that controls the bidder. “Control” means the ongoing power or ability, whether exercised or not, to determine or decide the strategic decision-making activities of an entity, or to manage or run its day-to-day operations.

118. Presumption of affiliate status: If a person owns, directly or indirectly, at least 20% of the entity’s voting shares (or where the entity is not a corporation, at least 20% of the beneficial ownership in such entity), ISED will generally presume that the person can exercise a degree of control over the entity to establish a relation of affiliation. The ability to exercise control may also be demonstrated by other evidence. Under this rule, ISED may, at any time, ask a prospective bidder for information in order to satisfy any question of affiliation.

119. Applicants may provide information to ISED to rebut the presumption of affiliate status. Applicants must notify ISED in writing if they are rebutting the presumption and must file material that will enable ISED to review the question and make that determination. It is the responsibility of the applicant to file the appropriate material. Such material may include:

• copies of the relevant corporate documentation relating to both entities
• a description of their relationship
• copies of any agreements and arrangements between the entities and affidavits or declarations, signed by officers from the two entities, dealing with the control as outlined in the definition of “affiliate” above

120. Upon receipt of this material, ISED will either make a ruling based on the materials submitted or ask the applicant for further information (and provide a timeline within which to do so).

121. Should the applicant entities fail to provide the relevant information in a timely fashion in order to allow ISED to complete its determination, ISED may make a ruling on eligibility that the applicants in question are affiliated.

122. Eligibility to participate in the auction: It is proposed that only one member of an affiliate relationship be permitted to become a qualified bidder in the auction or the affiliated entities may apply to participate jointly as a single bidder. Affiliated entities must decide prior to the application deadline which entity will apply to participate in the auction. All affiliations must be disclosed at the time of the application.

12.2 Associated entities

123. Proposed definition of associated entities: As a basis for participating in the 3800 MHz spectrum auction, ISED proposes that associated entities be defined as follows:

Any entities that enter into any partnerships, joint ventures, agreements to merge, consortia or any arrangements, agreements or understandings of any kind, either explicit or implicit, relating to the acquisition or use of any of the spectrum licences being auctioned in this process will be treated as associated entities. Typical roaming and tower sharing agreements would not cause entities to be deemed associated.

124. As in past auctions, the proposed rules would allow carriers to form a bidding consortium and to participate in the auction as a single bidder if they wish to coordinate their bids through a single bidder. In such a case, the eligibility rules would apply jointly in each licence area. In cases where any of the entities participating jointly would not qualify as a set-aside-eligible bidder, the bidding consortium would not be eligible to bid on set-aside spectrum.

125. The spectrum and network efficiencies that can be achieved through various forms of associations and arrangements may help to address the high demand for capacity by customers and the high cost of network deployment. In support of the policy objectives stated in section 3 and the spectrum and network efficiencies that can be achieved through such arrangements, ISED recognizes the need to provide increased flexibility in the treatment of a certain subset of associated entities, as long as this would not have an adverse impact on the integrity of the auction.

126. Depending on the nature of the association, it may not preclude the ability of the entities to participate separately in the auction. It should be noted that under the proposed definition, entities are only deemed to be associated with respect to arrangements that relate to the acquisition or use of spectrum licences being auctioned in this process. For example, significant joint equipment-purchase agreements and joint backhaul networks would not be captured under the definition unless they relate to the licences in question.

127. Eligibility to participate separately in the auction: ISED proposes that associated entities may apply to participate separately in the 3800 MHz spectrum auction. ISED is of the view that allowing associated entities, which are competitors in the market, to bid separately would not have an adverse impact on the integrity of the auction provided that auction participants comply with the information disclosure and anti-collusion rules as proposed in section 12.4.

128. To obtain approval to participate separately in the auction, associated entities will be required to demonstrate to ISED’s satisfaction that they intend to separately and actively provide services in the applicable licence area. Associated entities wishing to participate in the auction separately would be required to submit their application at least two weeks in advance of the final application deadline. This requirement would provide ISED with the additional time necessary to assess the nature of the association between the entities. Should the request be denied, only one of the associated entities will be eligible to apply to participate in the auction.

129. Bidders are reminded that the provisions of the Competition Act apply independently of, and in addition to, the proposed policy.

130. ISED notes that all entities participating in the auction will be subject to the same prohibition of collusion rules, as stated in section 12.4.

131. ISED’s review would not extend to an overall assessment of the effects of the agreement between associated entities on competition in the marketplace.

132. Assessment factors: ISED would consider a broad range of criteria so as to determine the associated entities’ intent and actions to actively and independently provide wireless services. Assessment criteria may include, but would not be limited to:

• the companies’ intent and actions to provide services (coverage) in the area in which the sharing occurs
• the level of investment, including in distribution, marketing and customer service, in order to acquire and serve customers and
• the companies’ demonstration of separate presences in the marketplace

133. Documentation: Associated entities would be invited to provide all relevant documentation to ISED in regard to the above-noted assessment factors. These may include, but would not be limited to:

• all agreements relating to the transfer of, use of and access to the 3800 MHz spectrum
• business plans for the area in which the agreement(s) will provide access to spectrum and
• business and financial results, including investments and customer acquisition

134. ISED may request additional documentation to complete its assessment and may require that documents be certified by an officer of the company.

12.3 Auction integrity and transparency (information disclosure pre-auction)

135. In order to ensure auction integrity and transparency, all entities wishing to participate in the auction process will be required to disclose in writing, as part of their application, the names of affiliated and associated entities. It is proposed that a narrative also be submitted, describing all key elements and the nature of the affiliation or association in relation to the acquisition of the spectrum licences being auctioned and the post-auction relationships of said entities. It is proposed that this narrative include arrangements with other potential bidders that relate in any way to the future use of the licences being auctioned directly or indirectly.

136. Some examples of arrangements that would require disclosure include, but are not limited to, agreements to establish a joint network using spectrum licences acquired by each of the entities and agreements regarding a joint backhaul network if they relate to the use of the licences being auctioned. It is also proposed that agreements, such as significant joint equipment purchases, be disclosed. Typical roaming and tower sharing agreements and other agreements, such as the purchase of backhaul capacity, would not cause entities to be deemed associated entities and hence need not be disclosed.

137. The submitted narrative would be made available to other bidders and to the public on ISED’s website prior to the auction in order to ensure transparency of the licensing process.

12.4 Prohibition of collusion and other communication rules

138. As in previous auctions, in order to ensure the integrity of the bidding process, all applicants will be prohibited from cooperating, collaborating, discussing or negotiating agreements with other bidders regarding the licences being auctioned or the post-auction market structure. Any such discussions occurring at any time prior to the public announcement of provisional licence winners by ISED are prohibited.

139. In order to maintain the integrity of the auction, bidders are prohibited from signaling, either publicly or privately, their bidding intentions or post-auction market structure related to spectrum in the 3800 MHz band. This would include comments or any communication with or via the media. An example of prohibited communications would be making a public announcement regarding which licences the company intends to bid on or its rollout intentions.

140. Given that ISED is proposing to allow the participation of some associated entities as separate bidders in this auction process, the proposed prohibition of collusion rules are as follows:

All applicants, including affiliated and associated entities, are prohibited from cooperating, collaborating, discussing or negotiating agreements with competitors, relating to the licences being auctioned or relating to the post-auction market structure, including frequency selection, bidding strategy and post-auction market strategy, until after the public announcement of provisional licence winners by ISED.

Prospective bidders will note that the auction application forms contain a declaration that the applicant will be required to sign certifying that the applicant has not entered into and will not enter into any agreements or arrangements of any kind with any competitor regarding the amount to be bid, bidding strategies or the particular licence(s) on which the applicant or competitors will or will not bid. For the purposes of this certification, “competitor” means any entity, other than the applicant or its affiliates, which could potentially be a bidder in this auction based on its qualifications, abilities or experience.

Prospective bidders should note that the definition of “affiliate” for the purposes of this licensing process (defined by reference to “control in fact”) differs from “affiliate” for the purposes of the Competition Act. The provisions of the Competition Act apply independent of, and in addition to, the policies contained in this framework.

12.4.1 Communication during the auction process

141. In order to preserve the integrity of the auction process, any communications from an applicant, its affiliates, associates or beneficial owners or their representatives that disclose or comment on bidding strategies, including but not limited to, the intent of bidding and post-auction market structures, the progress of the auction, such as the status of auction rounds and stages, and potential auction revenues shall be considered contrary to the licensing framework, which will be published as a result of the current consultation and may result in disqualification and/or forfeiture penalties. Statements that indicate national or particular licence areas of interest will generally be found to be in contravention of the rules on prohibition of collusion. This will include communications with or via the media. This prohibition of communication applies until the public announcement of provisional licence winners by ISED.

142. Prior to the auction, an applicant who wishes to participate separately in the licensing process may approach another potential bidder to discuss a joint infrastructure build, a joint equipment purchasing agreement or a potential spectrum sharing agreement under the circumstances outlined in the following two paragraphs.

143. Once a consortium has been established and if the entities within that consortium have had communications that contravene the anti-collusion rules, these entities would no longer be eligible to participate separately in the auction. The same entities would therefore no longer be deemed competitors for the purpose of the auction, and discussions regarding issues such as bidding strategies could then take place. Should the consortium be dissolved prior to the auction, only one of the entities would be eligible to participate in the auction, and all parties would continue to be subject to the prohibition of collusion rules. The same restrictions apply to entities that have had unsuccessful discussions regarding the formation of a consortium to bid as a single bidder.

144. Where communications that fall within the definition of associated entities have taken place, the nature of the association must be disclosed. Entities applying to participate separately are required to make a declaration that they have not entered into and will not enter into any agreements or arrangements of any kind with any competitor regarding the amount to be bid, bidding strategies or the particular licence(s) on which the applicant or competitor will or will not bid. In the case where discussions that contravene the prohibition of collusion rules have occurred, the entities would only be permitted to participate in the auction as one single bidder, or only one of the entities could participate.

12.4.2 Discussion regarding beneficial ownership

145. Information regarding the beneficial ownership of each applicant will be made publicly available so that all bidders have knowledge of the identity of other bidders. Any discussions involving two bidders or any of their affiliates or associates regarding an addition or a significant change of beneficial ownership of a bidder, including matters such as mergers and acquisitions, from the receipt deadline for applications until the public announcement of provisional licence winners by ISED, would fall into the area of prohibited discussions and would be considered contrary to the auction rules.

146. However, an applicant may discuss changes in beneficial ownership with parties who are completely unrelated to other applicants, as long as:

• any change to the beneficial ownership of the applicant that provides a new party with a beneficial interest or which significantly alters the beneficial ownership structure is effected at least 10 days before the commencement of bidding
• the applicant informs the Minister immediately in writing of any change in beneficial ownership, which will be reflected in its published qualified bidder information on ISED’s Spectrum Management and Telecommunications website

147. Bidders must cease all such negotiations at least 10 days before the commencement of bidding until the public announcement of provisional licence winners by ISED.

12.4.3 Other communication rules

148. Discussions on tower sharing: The prohibition of communication includes discussions about tower and site sharing regarding the licences that are the subject of this auction until after the public announcement of provisional licence winners by ISED. Discussions concerning new arrangements or the expansion of existing sharing arrangements that relate to spectrum outside of licences being offered in this auction process are not prohibited.

149. Communication with local exchange carriers: The prohibition of communication includes discussions regarding interconnection services with a local exchange carrier (LEC) that is a qualified bidder (or one of its affiliates/associates) in this auction, where the services relate to spectrum in the bands offered in this auction process.

150. Consulting services, legal and regulatory advice: Separate bidders may not receive consulting advice from the same auction consulting company. Separate bidders may receive legal and regulatory advice from the same law firm provided that the law firm complies with the conflict of interest and confidential information requirements of the applicable law society and that the applicants otherwise comply with the provisions set forth in the licensing framework.

151. The proposed conditions would apply to all flexible use licences in the 3800 MHz band, 3650-3900 MHz. It should be noted that 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.

13.1 Licence term

152. The Framework for Spectrum Auctions in Canada, states that ISED has adopted a flexible approach in determining licence terms (up to 20 years) based on the specific spectrum being offered and subject to a public consultation preceding the specific auction or renewal process.

153. This decision was based on the recognition that licence terms in excess of 10 years would create greater incentive for financial institutions to invest in the telecommunications industry and for the industry itself to further invest in the development of network infrastructure, technologies and innovation.

154. The 3800 MHz band has the potential to facilitate the offering of 5G mobile broadband and fixed broadband services to Canadians. Given that the use of this band for 5G technologies is being adopted globally, there is little risk that there will be any usage changes to this spectrum in the foreseeable future. It is also unlikely that any developments in technology would result in a change to another use that is incompatible with mobile and fixed broadband services.

155. ISED recognizes that the current rate of wireless technology development is ever evolving and these developments, such as cognitive radio and dynamic spectrum access, are expected to provide opportunities for increased efficiency for spectrum access.  As a result, it is expected that although long-term spectrum licences will continue to provide priority access to spectrum, future consultations may explore the possibility of providing for opportunistic access to licensed spectrum.

156. ISED adopted a 20 year licence term for the adjacent 3500 MHz band. Furthermore, both bands share similar propagation characteristics and will both be used for commercial mobile or fixed wireless services.

157. In light of the above, ISED is proposing that auctioned spectrum licences in the 3800 MHz band have a licence term of 20 years. The proposed condition of licence is as follows:

The term of this licence is 20 years from the date that licences are first issued following the auction procedure, shortly after the final payment deadline, (“the initial licence issuance date”) set out in the Policy and Licensing Framework for Spectrum in the 3800 MHz Band (the Framework). All licences will terminate on the same date, 20 years after the initial licence issuance date.

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.

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 of Innovation, Science and Industry (the Minister) following a public consultation.

13.2 Licence transferability, divisibility and subordinate licensing

158. In general, spectrum licences that are issued via a competitive licensing process, such as an auction, may be transferred in whole or in part (either in geographic area or in bandwidth) subject to the approval of the Minister. All spectrum licence transfer requests, including requests for subordinate licences, are subject to review under the CPC-2-1-23.

159. As the frequency range of the 3800 MHz band, 3650-3900 MHz, is now designated as flexible use (mobile and fixed services), it is proposed that these flexible use licences be treated like all other commercial mobile spectrum licences and may be transferred or subordinated in accordance with the provisions of section 5.6 of CPC-2-1-23 (including section 5.6.4). As part of and review of a transfer, ISED will analyze concentration levels that would result from the licence transfer, and examine the ability of the licence transfer applicants and other existing and future competitors to provide services, given the post-transfer concentration of commercial mobile spectrum in the affected licence area(s). For subordinate licensing, the subordinate licence would include a subset of the primary licence conditions and its deployment would count toward meeting the deployment requirements of the primary licensee.

160. If a spectrum cap, including a cross-band spectrum cap across the 3500 MHz and 3800 MHz band, is adopted in the 3800 MHz band, it is proposed that the cap would continue to be in place for five years following licence issuance. Therefore, no transfer of licences or issuance of new licences would be authorized that allows a licensee to exceed the spectrum cap during this period or that allows a licensee whose prior holdings already exceed the cap to further exceed the cap. Any change in ownership or control granting a right or interest to another licensee in this band may be considered as licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister of Innovation, Science and Industry for any change that would have a material effect on its compliance with the spectrum cap. Such a request must be made in advance for any proposed transactions within its knowledge. Should a cross-band spectrum cap be adopted, the 3500 MHz conditions of licence would be amended to reflect this decision.

161. If a set-aside is applied, it is proposed that transfers of 3800 MHz spectrum will not be permitted where they will result in a set-aside-ineligible entity obtaining a set-aside spectrum licence for the first five years of the licence term. A set-aside spectrum licence may only be transferred to a set-aside-ineligible licensee after the five-year period set out above and once the licensee has satisfied the first mid-term deployment requirement. After the first five years, it is proposed that set-aside spectrum licences would be treated like all other commercial mobile spectrum licences and may be transferred in accordance with the provisions of section 5.6 of CPC-2-1-23. Similarly, it is proposed that transfers between set-aside-eligible entities may take place at any time, subject to the provisions of section 5.6 of CPC-2-1-23. As part of its review of any proposed transfer, ISED will analyze, among other factors, the change in spectrum concentration levels that would result from the licence transfer, and will examine the ability of the licence transfer applicants and other existing and future competitors to provide services, given the post-transfer concentration of commercial mobile spectrum in the affected licence area(s).

162. Despite the general restriction on transfers of set-aside licences, it is proposed that a subordinate licence may be granted to a set-aside-ineligible entity in support of an agreement to share spectrum, provided that certain conditions are met. It is also proposed that a subordinate licence in support of an agreement to share spectrum would not count towards the spectrum cap, under certain conditions. It is proposed that two conditions need to be met:

1. licensees would need to demonstrate that the conditions under section 5.6.3 of CPC-2-1-23 which relate to subordinate licences are fully met and
2. licensees would be required to demonstrate to the satisfaction of ISED that they intend to, and will continue to, make use of the 3800 MHz spectrum to actively and independently provide services in the applicable licence area, based on the assessment factors set out below

163. Assessment factors: ISED will consider a broad range of criteria to determine the associated entities' intent and actions to actively and independently provide wireless services. Assessment criteria may include, but will not be limited to:

• the companies' intent and actions to provide services (coverage) in the area in which the sharing occurs
• the level of investment, including in distribution, marketing and customer service, in order to acquire and serve customers
• the companies' demonstration of separate presences in the marketplace

164. Documentation: Associated entities will be invited to provide all relevant documentation to ISED in regard to the above-noted assessment factors or any other factor identified by ISED. These may include, but will not be limited to:

• all agreements relating to the transfer of, use of and access to the 3800 MHz spectrum
• business plans for the area in which the agreement(s) will provide access to spectrum
• business and financial results, including investments and customer acquisition

165. ISED may request additional documentation to complete its assessment and may require that documents be certified by an officer of the company.

166. ISED's review will not extend to an overall assessment of the effects of the agreement between associated entities on competition in the marketplace.

167. Licensees must apply to ISED for the issuance of subordinate licences prior to the implementation of any spectrum sharing agreements or any agreement that provides for another party to operate the licensee's spectrum.

168. As discussed in section 11, if a set-aside is applied, ISED may permit a transfer or "exchange" of equal amounts of 3800 MHz spectrum within the same licence area between a set-aside-eligible entity and a set-aside-ineligible entity. Refer to section 11 for further details on this proposal.

169. ISED is proposing the following wording for the condition of licence on transferability and divisibility:

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.

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.

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.

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.

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

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

170. If a set-aside is applied the following would also apply:

The following provision applies to set-aside licences as defined under the Policy and Licensing Framework for Spectrum in the 3800 MHz Band (the Framework):

• For the first five years of the licence term, a set-aside licence is not transferable to a set-aside-ineligible entity (as defined in the Framework) with two exceptions:
  1. a Subordinate Licence to a set-aside-ineligible entity may be granted in support of a spectrum sharing agreement provided that the requirements in section 5.6.3 and section 5.6.4 (in cases where the service being deployed is mobile) of CPC-2-123 are met and that ISED is satisfied that the relevant entities will actively and independently provide wireless services in the applicable licence areas, based on the assessment factors set out in the Framework and
  2. an exchange of equal amounts of 3800 MHz and/or 3500 MHz spectrum within the same licence area between a set-aside-eligible entity and a set-aside-ineligible entity may be allowed, subject to the provisions of section 5.6 of CPC-2-1-23
• A set-aside spectrum licence may only be transferred to a set-aside-ineligible licensee after the five-year period set out above and once the licensee has satisfied the first mid-term deployment requirement.

171. If a spectrum cap, including a cross-band cap across 3500 MHz and 3800 MHz bands, is applied the following would also apply:

The spectrum cap put in place for the 3800 MHz auction will continue for five years from the date of the licence issuance. Therefore, no transfer of licences or issuance of new licences will be authorized if it would result in a licensee exceeding the spectrum cap during this period or causes a licensee whose prior holdings already exceed the spectrum cap to further exceed the spectrum cap. Any change in ownership or control granting a right or interest to another licensee in this band may be considered as licence transfer for the purpose of this condition of licence whether or not the licensee name is changed as a result. The licensee must request approval by the Minister for any change that would have a material effect on its compliance with this spectrum aggregation limit. Such a request must be made in advance of any proposed transactions within its knowledge.

The licensees may also apply, in writing, to use a subordinate licensing process. ISED approval is required for each proposed subordinate licence. Subordinate licences will not count towards the subordinate licensee’s spectrum cap if the primary licensee and the subordinate licensee demonstrate to the satisfaction of ISED that they will be separately and actively providing services to customers in the applicable licence area. Where such approval is granted and for at least the duration of the spectrum cap being in place, licensees must implement their plans to the satisfaction of ISED. Any modifications to these plans must be submitted to ISED for approval.

13.3 Deployment requirements

172. ISED uses deployment requirements to encourage licensees to put the spectrum to use to provide wireless service in Canada and to deter acquisition of spectrum licences by speculators and those whose intent is to prevent access to the spectrum by their competitors.

173. Deployment requirements generally require licensees to provide coverage to a percentage of the population or to a percentage of the licensees' existing mobile broadband footprint within a given time period. In the 3500 MHz band, two deployment requirements were established. The first was a general deployment requirement for each licence area based on a percentage of the population. The second was an additional deployment requirement for licensees that operate a mobile LTE network. For the 3500 MHz band, ISED defined the mobile LTE network footprint as the areas covered by spectrum bands above 1 GHz. This included areas covered by service providers using AWS-1, AWS-3, AWS-4, PCS, BRS, and WCS. These LTE deployment requirements will be assessed against the cumulative coverage footprint of these bands within each service area. ISED proposes to use the same definition for the 3800 MHz band except with the addition of the 3500 MHz band.

174. For the 3800 MHz band, ISED is proposing to use a similar approach for deployment requirements as in 3500 MHz, including a general requirement and a mobile LTE requirement. Taken together, the deployment conditions for 3500 MHz and the proposed conditions for 3800 MHz, would result in mid-band spectrum deployment to approximately 98% of Canadians.

175. General requirement: The first is a general deployment requirement for each licence area based on a percentage of the population as listed in (see annex B) and would apply at year 5, 10 and 20 after the initial licence issuance date, which will be shortly after the final payment deadline, for Tier 4 service areas which include a large population centre. In areas that do not include a large population centre the deployment requirements would apply at year 7, 10 and 20 after the initial issuance date in recognition of the longer transition periods in these tiers.

176. Mobile LTE requirement: The second is an additional requirement for licensees that currently operate a mobile LTE network, with different deployment timelines that are based on the transition timeframes of incumbent operators in the band. Both sets of deployment requirements would apply to all tiers. ISED notes the importance of this spectrum to all Canadians for 5G services. The additional proposed requirements for licensees currently operating a mobile LTE network recognize that these licensees will likely make use of the 3800 MHz band to improve their current networks with 5G technologies. The proposed requirement for 5G in rural areas around urban centres is to promote deployment in rural areas surrounding urban centres and address concerns that targets were previously being met by serving only urban populations. As such, ISED is proposing that licensees that acquire 3800 MHz flexible licences and currently provide mobile LTE services to the general public (general public includes retail residential and retail business customers) in the relevant service area of interest would be required to meet the following deployment requirements, in addition to the general requirements, regardless of the service that they plan to deploy using the licence(s) in order to provide timely 5G coverage (see annex C):

• In the Tier 4 services areas of Montréal, Toronto and Vancouver:
  • provide service coverage to 90% of the population within its mid- band mobile LTE footprint, coverage in effect as of the publication date of Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band, within five years of the initial licence issuance date, which will be shortly after the final payment deadline
  • provide service coverage to 97% of the population within its mid-band mobile LTE footprint, coverage in effect as of the publication date of Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band, within seven years of the initial licence issuance date, which will be shortly after the final payment deadline
  • provide service coverage to 95% of the population outside the large population centre within ten years of the initial issuance date, which will be shortly after the final payment deadline
• In the 21 Tier 4 service areas which contain at least one large population centre as defined by the 2016 Census of Population from Statistics Canada, excluding Montréal, Toronto and Vancouver (see table B1 of annex B):
  • provide service coverage to 90% of the population within its mid-band mobile LTE footprint, coverage in effect as of the publication date of  Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band, within seven years of the initial licence issuance date which will be shortly after the final payment deadline
  • provide service coverage to 97% of the population within its mid-band mobile LTE footprint, coverage in effect as of the publication date of  Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band within ten years of the initial licence issuance date, which will be shortly after the final payment deadline
  • Outside the large population centres (but within the Tier 4):
    • provide service coverage to 95% of the population outside the large population centre within ten years of the initial licence issuance date, which will be shortly after the final payment deadline
• In the Tier 4 service areas which do not contain a large population centre (see table B2 of annex B):
  • provide service coverage to 90% of the population of its mid-band mobile LTE footprint, coverage in effect as of the publication date of Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band within seven years of the initial licence issuance date, which will be shortly after the final payment deadline
  • provide service coverage to 97% of the population of its mid-band mobile LTE footprint, coverage in effect as of the publication date of Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band, within ten years of the initial licence issuance date, which will be shortly after the final payment deadline

177. These time frames will ensure timely deployment of 5G services to all Canadians while permitting some flexibility for licensees to put in place build plans that align with their business strategies. However, in the deployment of 3800 MHz spectrum, it may be possible for some operators to make use of existing infrastructure. Therefore, ISED is seeking input on whether there may be an opportunity to accelerate deployment timelines, particularly in the case of operators that will have already deployed or that are planning to deploy 3500 MHz flexible use spectrum.

178. In all instances, the mobile LTE network footprint would be the coverage of mid-band spectrum in effect as of the publication date of a future decision paper, as defined by the service provider’s list of bands. ISED will consider network sharing arrangements such as Multi-Operator Core Network (MOCN) networks to count as part of this LTE network footprint but standard roaming agreements do not count towards this network footprint. In addition, it is proposed that the licensee must provide the Minister with any documentation or information related to spectrum access or LTE network footprints at the Minister's request.

179. Deployment requirements will be based on the most recent census information available at the time of assessment. Deployment by a subordinate licensee will count towards the requirement of the primary licensee and both fixed service and mobile coverage using 3800 MHz spectrum will count towards meeting the deployment requirements.  ISED encourages subordination in cases where the licensee does not plan to deploy services, to maximize the benefits that Canadians derive from the use of the spectrum.

180. Where a licence is transferred, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date, which will be shortly after the final payment deadline.

181. In consideration of the above, ISED proposes the following wording for this condition of licence, which will apply to all flexible use licences:

General deployment requirements

In Tier 4 areas that include a large population centre, all licensees will be required to demonstrate to the Minister that the spectrum has been put to use to actively provide service to a minimum percentage of the population as specified in table B1 of annex B, within 5, 10, and 20 years of the initial licence issuance date, which will be shortly after the final payment deadline. In all other Tier 4 areas, licensees will be required to demonstrate to the Minister that the spectrum has been put to use to actively provide service to a minimum percentage of the population as specified in table B2 of annex B, within 7, 10, and 20 years of the initial licence issuance date, which will be shortly after the final payment deadline.

The licensee is required to meet these conditions at all relevant times during the licence term and to continuously provide services throughout the term of the licence in accordance with these requirements.

Where a licence is transferred, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date.

Deployment requirements for service providers offering mobile LTE services

Licensees offering mobile LTE services will be required to demonstrate to the Minister that the spectrum has been put to use to cover the following deployment requirements within its mid-band mobile LTE network footprint (coverage in effect as of the publication date of ISED’s Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band), using the 3800 MHz band.

In the Tier 4 service areas of Montréal, Toronto  and Vancouver:

• 90% of the population within its mid-band mobile LTE network footprint  within five years and
• 97% within seven years of the initial licence issuance date
• 95% of the population outside the large urban population centres within 10 years of the initial licence issuance date

In tiers that contain a large population centre, excluding Montréal , Toronto and Vancouver, as listed in table B1 of annex B:

• 90% of the population within its mid-band mobile LTE network footprint  within seven years, and
• 97% within ten years of the initial licence issuance date

In addition, in the tiers that contain a large population centre:

• 95% of the population outside the large urban population centres within 10 years of the initial licence issuance date

In tiers that do not contain a large population centre, as listed in table B2 of annex B:

• 90% of the population within its mid-band mobile LTE network footprint within seven years, and
• 97% within 10 years of the initial licence issuance date

Licensees will be required to provide ISED with their mobile LTE network footprint as of the publication date of Decision on the Policy and Licensing Framework for Spectrum in the 3800 MHz Band, when requested by ISED.

The licensee is required to meet these conditions at all relevant times during the licence term and to continuously provide services throughout the term of the licence in accordance with these requirements.

Where a licence is transferred, the requirement for the new licensee to deploy will continue to be based on the initial licence issuance date.

The licensee must provide the Minister with any documentation or information related to spectrum access or LTE network footprints at the Minister's request.

182. Deployment requirements for encumbered service areas:  As discussed in section 10.1, ISED is proposing that blocks in 3700-3900 MHz in some Tier 4 service areas be considered encumbered in due to FSS earth station operations. ISED recognizes the potential constraints in deploying flexible use services in these areas and notes that there are 33 areas where the encumbrance could impact more than 30% of the population (i.e. the minimum coverage for the general deployment requirements in these areas) as identified in annex A. This may make it difficult to meet some of the proposed deployment requirements. However, as discussed in section 10.1, ISED expects that FSS earth station operations will eventually move to 4000-4200 MHz over the long term. Furthermore, flexible use licensees will have the ability to coordinate, and negotiate mutually beneficial commercial agreements with existing earth station operators to reduce the level of encumbrance. As such, ISED is not proposing to reduce the deployment requirement for these areas but is seeking stakeholder feedback on whether it should to support the deployment of flexible use services in encumbered service areas.

13.4 Other conditions of licence

183. ISED is seeking comments on additional conditions of licence outlined in annex G that would apply to licences issued through the proposed auction process for spectrum in the 3800 MHz band. The proposed conditions of licence in annex G are based on existing policies and procedures.

184. As discussed in section 3, the Government of Canada is committed to connecting all Canadians to affordable, reliable high-speed Internet and improving access to the latest mobile services. As such, it has set a national connectivity target to make broadband speeds of at least 50 megabits per second (Mbps) download and 10 Mbps upload available to all Canadian homes and businesses and to improve mobile access where Canadians both live and work and along major roads. As part of this commitment, ISED is considering the need to support and encourage connectivity for rural and remote communities in this consultation.

185. ISED expects that in order to meet these targets, a mix of wired, wireless (fixed and mobile) and satellite solutions will be required. ISED recognized in Canada’s Connectivity Strategy that facilitating spectrum access and increased deployment requirements can also support these targets. Accordingly, ISED has set out to support rural and remote connectivity through several recent spectrum consultations and decisions, through its:

• deployment requirements for 3500 MHz, similar to those proposed in section 13.3, which necessitate that licensees expand their networks throughout their licence term to cover more of the population, bringing next-generation services to a greater number of people
• Consultation on New Access Licensing Framework, Changes to Subordinate Licensing and White Space to Support Rural and Remote Deployment, which proposes a new regime for licensing unused spectrum, simplifying access to the secondary market and adding more access to white space spectrum
• Consultation on Updates to the Licensing and Fee Framework for Earth Stations and Space Stations in Canada, which proposes changes that will increase spectrum efficiency, use and flexibility for satellite operations that are expected to serve rural and remote communities
• Consultation on Amending Cellular and Personal Communications Services (PCS) Licence Conditions, which proposes reintroducing and increasing deployment requirements for these two bands
• 3800 MHz Decision that designated 80 MHz of spectrum for shared use in the 39003980 MHz band to provide opportunities for new and improved broadband services, including in rural and remote areas

186. Although ISED expects that these measures, combined with ongoing private sector investment, will improve connectivity in rural and remote areas in general, specific gaps in connectivity to unserved households may persist for some time. While the Government of Canada is employing various approaches to ensure that rural connectivity targets are met, including through investments like the Universal Broadband Fund, ISED considers that additional spectrum policy measures could have the potential to contribute further to the deployment of 50/10 Mbps services and expanded mobile access. As such, ISED is seeking comments on measures that it can employ to accelerate connectivity in rural and remote areas.

187. For clarity, the deployment conditions proposed in section 13.3 are designed to deter speculation and to ensure that the spectrum acquired at auction is used in a timely manner to provide wireless services to Canadians in all parts of the country. In this section, ISED is interested in additional measures that could backstop ongoing connectivity efforts specifically to ensure that any households left unserved by other private sector or government-supported projects will not be left behind.

188. ISED notes that other spectrum regulators have employed different measures to meet coverage objectives in rural and remote areas. These measures mainly focus on mobile coverage and include some combination of deployment requirements including specific geographic areas to be served (e.g. underserved areas, highways), deploying a set amount of base stations in rural areas, setting data rate targets, and/or encouraging sharing of networks. ISED considers that some combination of these measures could also be used in Canada.

189. For example, the UK spectrum regulator Ofcom, in its 700 MHz and 3.6-3.8 GHz auction consultations, proposed measures aimed at providing good quality mobile services in rural areas that were underserved. Ofcom’s proposal prompted UK mobile operators to put forward their own proposals designed to improve mobile coverage by sharing infrastructure in partnership with the UK government. In March 2020 the UK government announced that it had entered into an agreement with the four mobile operators to provide grant funding to deliver a Shared Rural Network. Under the terms of this agreement, each mobile operator has committed to providing good quality data and voice coverage to 88% of the geography of the country by  June 30, 2024, and 90% by January 30, 2027, subject to certain conditions (including the provision of funding for elements of the program). The UK mobile operators agreed to have their 900 MHz and/or 1800 MHz conditions of licences changed to give effect to these commitments in the form of new coverage obligations. Each operator has also agreed to meet certain coverage thresholds in each UK nation after four and six years, and provide a certain extent of new coverage in areas where roads and premises are located.

190. As part of its 2019 auction of the 2 GHz and 3.6 GHz bands [PDF: 4.5 MB], Germany set several deployment requirements to ensure that the spectrum was put to use, specific data rates were available and that coverage was increased to areas with no service. Germany set a coverage requirement with a transmission rate of at least 100 Mbit/s for at least 98% of households in each federal state by the end of 2022 for existing operators. It also mandated that by the end of 2022 licensees must operate 1,000 5G base stations with 500 base stations that offer a transmission rate of at least 100 Mbit/s in rural “not-spots” or areas with no service. The coverage requirements also included provisions for covering for motorways, federal and state roads, seaports and waterways, and railroads with 2000 daily passengers or more with the same targets. However, the requirements allowed coverage from other providers to count towards the target coverage of motorways, roads, waterways, and railways. In addition, to address concerns about the cost of spectrum and deployment, the German government provided operators with option to spread the payment of 2 GHz and 3.6 GHz licences won in 2019 over a 10 year period.

191. Ultimately, Canadians are seeking affordable, reliable services in rural areas. The 3500 MHz and proposed 3800 MHz deployment requirements, combined with the large amount of spectrum in these two bands, will result in broad deployment of 5G services across the country. However, ISED recognizes that most mobile networks and data packages are not designed specifically as substitutes to internet to the home, and that there will still be some coverage gaps in rural areas. Accordingly, ISED could consider conditions of licence with deployment requirements to cover targeted rural/remote areas, and/or offer specific broadband services, for the 3800 MHz flexible use licences.

192. ISED also recognizes that different bands or a mix of bands, such as the PCS or cellular bands (where deployment requirements are currently under consideration), could improve the cost and efficiency of covering rural and remote areas. Various bands may be useful for increasing coverage not only to where people live but also to roads and other locations. As such, ISED could also consider adjusting the deployment requirements for any or all mobile/flexible use licences. To that end, ISED is seeking comment on new measures or conditions of licence that could support Canada’s Connectivity Strategy, including consideration of increasing the deployment requirements for 3800 MHz or other mobile/flexible use bands; setting specific coverage targets or service requirements in rural areas (e.g. unserved households or highways); and/or encouraging network sharing agreements in rural areas.

193. The following section outlines the proposed general process for submitting an application to participate in the 3800 MHz auction, as well as the general requirements and rules that would apply prior to, during and after the auction.

15.1 Application to participate

194. To participate in the auction, all applicants must submit a completed application form, along with a financial deposit, details of the applicant’s beneficial ownership, information on any affiliations and associations as discussed in section 12.1 of this document, and other corporate documentation as required. ISED will publish the list of applicants on its website soon thereafter. As in past auction processes, a list of all qualified bidders, along with information related to their beneficial ownership, affiliates, and associated entities, will be made public via ISED’s website in accordance with the timelines stated in the Table of Key Dates. The number of eligibility points, financial deposit amounts, and eligibility status, including set-aside eligibility, will not be published.

15.2 Opening bids

195. Opening bids are the prices for the spectrum licences at the start of the auction, and the minimum that will be accepted for each licence. Opening bid prices should enable existing providers, national mobile service providers (NMSPs), regional service providers (RSPs), wireless internet service providers (WISPs), and new entrants to expand services and enhance connectivity in underserved areas, while supporting continued competition in the market for consumers and businesses.

196. Given the similarities between the 3800 MHz and 3500 MHz bands, in particular the propagation characteristics and that it will similarly also be able to be used for both commercial mobile and fixed services, ISED is proposing to use the same approach as was used for the 3500 MHz auction for determining opening bid prices for the 3800 MHz auction, for both categories of generic licences (unencumbered and encumbered).

197. In addition, given the results of the 3500 MHz auction, ISED is of the view that opening bid prices set in accordance with the methodology described below would be low enough to allow for bidding during the auction to determine the difference in values between products in the unencumbered and encumbered categories in a given service area. As such, ISED is proposing to use the same opening bid prices for all categories of generic licences within a given service area. However, ISED notes that its proposal to offer licences in two categories of generic licences in the 43 satellite-dependent and adjacent service areas may warrant a reduction in the opening bid prices for the encumbered category. ISED is seeking stakeholder feedback on whether such a reduction is necessary, and the best method to calculate such a reduction.

198. ISED’s proposal will again categorize each Tier 4 service area into one of four price levels based on the population of the service area and whether it contains a Census Metropolitan Area (CMA). For the purposes of this consultation, prices are based on 2016 Census data. However, prices may be updated once 2021 Census data is available.

199. As in the 3500 MHz auction, ISED is proposing the following prices in $/MHz/pop for the following categories:

• service areas with population over 2 million: $0.232/MHz/pop
• service areas with population over 1 million but less than 2 million: $0.1/MHz/pop
• service areas with population under 1 million that contain one or more CMA: $0.065/MHz/pop
• all other service areas: $0.051/MHz/pop

200. For each service area, the proposed opening bids were determined by multiplying the proposed prices in $/MHz/pop as outlined above by the population of the service area and 10 MHz block and rounding the obtained numbers to the nearest thousand. The total amount of opening bids for one block of unencumbered 10 MHz nationwide would be $46,719,000. The proposed opening bid prices can be found in annex F.

15.3 Proposed eligibility points for the 3800 MHz spectrum auction

201. The proposed eligibility points associated with the licences being made available in the 3800 MHz spectrum auction are based on opening bids.

202. Proposed eligibility points per service area are listed in annex F. For the 3800 MHz auction, eligibility points were determined relative to the lowest opening bid price in the auction. As such, one eligibility point has been assigned for each $3,000 of opening bid prices. In service areas with opening bid prices below $30,000 the number of eligibility points was rounded to the nearest point. For service areas above $30,000 the number of eligibility points was rounded to the nearest ten points. The equivalent of a national licence, comprised of one 10 MHz block of spectrum in the 172 service areas covering the country, would be associated with 15,564 eligibility points.

15.4 Pre-auction deposits

203. In order to enhance the integrity of the auction, ISED requires that all bidders submit a pre-auction financial deposit with their auction application. The financial deposit must be in the form of a certified cheque, bank draft, money order, wire transfer, or an irrevocable standby letter of credit, payable to the Receiver General for Canada, drawn on a financial institution that is a member of the Canadian Payments Association.

204. Similar to previous auctions, ISED proposes to determine the value of the pre-auction financial deposit based on the licences on which the applicant wishes to be eligible to bid. Each licence has been assigned a specific number of eligibility points that are approximately proportionate to the opening bid prices, as demonstrated in annex F. For spectrum licences to be auctioned in the 3800 MHz band, it is proposed that the financial deposit be equal to $3,000 per eligibility point.

205. An individual bidder requesting to be eligible to bid on the equivalent of one national 10 MHz block would have to submit a deposit covering 15,564 points, which would equate to $46,692,000 (i.e. $3,000 x 15,564). Financial deposit(s) will be returned to any applicant that is found not to be a qualified bidder and to any applicant that provides written notification to ISED of its withdrawal from the process prior to the auction’s commencement. Financial deposits will be returned to unsuccessful bidders once the auction has closed.

15.5 Final payment and forfeiture penalties

206. Within 10 business days following the publication of provisional licence winners, each provisional licence winner will be required to submit 20% of its final payment. The remaining portion of 80% will be due within 45 business days following the announcement of provisional licence winners. These payments will be non-refundable.

207. Following the conclusion of the auction, winning bidders that fail to comply with the specified payment schedule or fail to come into compliance with the eligibility requirements of the Radiocommunication Regulations, will be considered disqualified and will forfeit their ability to obtain licences through this process. Furthermore, noncompliant bidders will be subject to a forfeiture penalty in the amount of the difference between the forfeited bid and the ultimate price of the licence—to be determined by a subsequent licensing process.

208. In addition to the forfeiture penalties set out above, the applicant and/or its representatives may be subject to prosecution, administrative monetary penalties, or other enforcement procedures under the Radiocommunication Act if the auction rules are breached.

15.6 Bidder training and support

209. Qualified bidders will receive the necessary information to participate in the auction several weeks prior to the start of the auction. Information may include, but will not be limited to, an information session, a user manual for the auction system, instructions and passwords to access the secure auction system, along with the schedule for training, mock auctions, and the start of the bidding process.

210. A mock auction will be held, likely during the weeks prior to the start of the auction, in order to allow qualified bidders to better familiarize themselves with the auction system.

211. ISED will consider making unassigned licences available for licensing through an alternative process, which could include a subsequent auction at a later date following the close of the initial auction. The timing and form of such a process will depend on the demand for the available licences. ISED has streamlined the process for auctioning residual licences to expedite the availability of unallocated and returned licences (see Decision on a Streamlined Framework for Auctioning Residual Spectrum Licences). If necessary, ISED may conduct a public consultation.

212. Following the end of the initial licence term, licensees 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 the spectrum to a new service is required, or an overriding policy need arises.

213. As part of the licence renewal process, the Minister retains the power to fix and amend the terms and conditions of spectrum licences during the term of the licence and at the end of the term in accordance with subsection 5(1) of the Radiocommunication Act. As noted in the FSAC, licence fees that reflect some measure of market value will apply to licences issued through a renewal process. Accordingly, the renewal process will serve to determine whether new licences will be issued, the terms and conditions that will apply to the new licences.

214. Generally, approximately two years prior to the end of the licence term, ISED will review whether there is a need for a fundamental reallocation of the spectrum to a new service, or whether an overriding policy need has arisen. A review of the licensee's continued compliance with the conditions of licence will also begin. ISED will launch a public consultation to discuss whether or not, in light of the above-noted issues, new licences should be issued for a subsequent term. The consultation paper will also propose, and invite comments on, licence conditions that would apply during the subsequent licence term.

215. It is proposed that the renewal process include a public consultation process that would commence approximately two years prior to the end of the licence term.

216. As done in previous auctions, following a decision on the questions raised in this consultation paper, ISED will accept written questions soliciting clarification of the rules and policies set out in the decision paper for a limited period of time, which will be specified in the final licensing framework. Written questions, submitted by the deadline, and ISED's responses will be made public on ISED's  Spectrum Management and Telecommunications website.

217. Respondents are requested to provide their comments in electronic format (Microsoft Word or Adobe PDF) by email to spectrumauctions-encheresduspectre@ised-isde.gc.ca.

218. All submissions should cite the Canada Gazette, Part I, the publication date, the title and the notice reference number (SLPB-006-21). Parties should submit their comments no later than February 15, 2022, to ensure consideration. Soon after the close of the comment period, all comments received will be posted on ISED’s Spectrum Management and Telecommunications website.

219. ISED will also provide interested parties with the opportunity to reply to comments from other parties. Reply comments will be accepted until March 7, 2022.

220. Following the initial comment period, ISED may, at its discretion, request additional information if needed to clarify significant positions or new proposals. In such a case, the reply comment deadline may be extended.

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

222. For further information concerning the process outlined in this document or related matters, contact: 

Innovation Science and Economic Development Canada
c/o Senior Director, Regulatory Policy, Spectrum Policy Branch
235 Queen Street (6th Floor, East Tower)
Ottawa ON  K1A OH5
Telephone: 613-219-5436
TTY: 1-866-694-8389
Email: spectrumauctions-encheresduspectre@ised-isde.gc.ca