Canada readies for wireless auction: Carriers prepare bids for LMCS licenses

>From small, rural service providers to those seeking to establish a >national network, 18 companies have signed up to participate in Canada's >first spectrum auction, which begins Oct. 18.

For the first time, Industry Canada, Canada's federal regulatory agency in charge of telecom, decided to veer from its usual practice of presenting licenses based on business plans and instead will conduct an auction in the 24 and 38 GHz spectrum bands, said Earl Hoeg, manager of wireless networks for Industry Canada.

Auctions are not only faster, but they also enable Industry Canada to promote the efficient use of spectrum and encourage companies to deploy the most spectrum-efficient technology, Hoeg said.

"It's an open and fair process," he said. "Companies know why they've won and companies know why they've lost."

Instead of bureaucrats making decisions, he added, you now have investors backing companies' business plans.

In the past, the Canadian wireless industry has not been supportive of spectrum auctions, Hoeg said. "Now that we're moving toward it, they've gone from complaining to encouraging us to get it right," he said.

Northwestel Mobility Inc. views the auction as an educational and application opportunity, said Glenn Nicol, vice president and general manager for the company, which serves 110,000 customers over 4 million square kilometers in northern Canada.

Although living mostly outside large metro areas, NMI's customers still have demands similar to those of other Canadians, Nicol said. "With that kind of geography to cover, wireless is the most productive and efficient way to [provide service]," he said.

NMI has put down an auction deposit of $10,000 and will attempt to secure what Canadian authorities have labeled local multipoint communication service (LMCS) licenses but only in its remote area. "We're being geographically specific to our operating area as opposed to taking a national approach to this," Nicol said.

Other companies apparently have bigger plans. AT&T Canada Telecom and BC Tel Mobility both put down deposits of $9.63 million, while Firstmark Communications Canada and Wispra Networks each put down about $4.8 million.

Current LMCS license holder MaxLink Communications is prohibited by spectrum caps from participating in the upcoming auction. But those same caps will ensure that MaxLink holds more spectrum in more markets than any company participating in the auction could possibly accumulate. The company currently has 1000 MHz of spectrum in 207 Canadian markets, allowing it to provide end-to-end services nationally, said President Joel Bell. The fact that MaxLink and WIC Connexus are currently the only companies in the market also will be beneficial. Bell envisions a future with room for many competitors, where people expect symmetrical broadband with ubiquitous availability.

"While there is a first mover advantage, at the end of the day how you do will be determined by how effective you are at providing innovative service, quality support and competitive pricing," he said.

CANADA'S PREMIER LMCS AUCTION

- 1200 MHz of broadband wireless spectrum is available in each of 59 service areas.

- Incumbent local exchange carriers are limited to 200 MHz of spectrum in service areas that overlap their local exchange areas.

- All other parties are limited to 600 MHz of spectrum in any service area.