Rural communities will not see this spectrum in their communities for years with the current spectrum auction design. Canada needs to change spectrum distribution and place the spectrum into the hands of rural Canada.
If towns and rural markets could control their own futures by being able to access and use spectrum as a set-aside along with utilizing capital (grants or low-interest loans) from federal funds like the Universal Broadband Fund, they would have the ability to build and control their own futures instead of waiting on a Telco or ISP. This would place control back in the hands of the towns and rural communities enabling them to manage and control their own futures.
If this spectrum was available to rural markets as a set-aside, their benefits will be:
- Lower cost to deploy this spectrum and would save money for the communities and the federal government.
- The equipment has higher power than the Wi-Fi spectrum and requires fewer sites because the coverage footprint is larger.
- Removes interference with licensed spectrum.
- Faster data speeds from a larger amount of spectrum.
- Community control of Internet services instead of waiting on a Telco to come.
- The community can request ISP’s to operate their broadband services or operate themselves.
- Communities are already well trained at running utilities and broadband is just another utility that they can manage.
The existing spectrum auction model has historically been designed to accommodate large carriers. It was never designed for Indigenous communities, small towns, and rural communities in Canada to compete. The auction model works well for Telecom companies buying spectrum for large cities or provinces. The telcos have engineering staff to work through the documentation, the capital war chest to place the bid, and a great understanding of how to manage the bidding process. ISED and the Telco's developed this auction process over time to create a fair bidding process with each other. It was never intended for anyone outside of the Telco group to enter the process.
The spectrum auction does not allow for Indigenous communities, small towns, and rural communities to bid only for the spectrum within their community – if they bid in the auction, they must bid for the entire section within a Tier 4 district. Towns and Indigenous communities have no interest in the spectrum outside of their own communities and do not have the manpower or the capital to manage the complex bid process.
In the upcoming 3,500 MHz auction, ISED decided to go with Tier 4 service areas instead of using the Tier 5 areas which would have been smaller and more affordable for smaller ISP's. Tier 5 areas would have helped minimize the cost of zones to buy spectrum, but still would not have helped individual rural communities access spectrum in and around their district. Tier 4 & 5 map (tab at the bottom of the map depicts the zones)
In annex F within the 3500 MHz spectrum auction, under general deployment requirements of the 3,500 MHz auction, ISED has not mandated that Indigenous communities, small towns, and rural counties receive service using the 3500 MHz spectrum within the next 20 years. In order to receive service within the next 20 years, towns and communities must be listed on a priority list. Below are two examples of small cities that made the list:
Spectrum rules -The winning Telco has to deploy the spectrum by set percentage rules in the next 20 years or lose the spectrum.
Examples in Tier 4 spectrum deployment:
The Telco winner for the community of Red Deer, Alberta (Population of approximately 100,418) is required to deploy the spectrum as follows –
- 25% in 7 years
- 40% in 10 years
- 60% in 20 years
Estevan, Saskatchewan (Population of approximately 11,483) is required to deploy the spectrum as follows –
- 5% in 7 years
- 10% in 10 years
- 20% in 20 years
These are not considered small communities in rural Canada and any community with a smaller population does not even make the list.
ISED has also added a set aside for a portion of the 3,500 MHz spectrum for carriers with under 10% of the overall telecom market. For example, larger providers such as Shaw qualify for this set-aside spectrum and will most likely purchase this portion of the spectrum. Typically, these carriers will first want to expand their market in areas of high population density (large cities) to secure their investment for the costly spectrum they just purchased. Carriers will want to keep their investors happy with profitable earnings based on new customers loaded on the new spectrum. This policy is considered good business practice, but still leaves small towns and rural communities without the internet services required to attract new businesses and families to the community.
New Idea for Canada
Connect Mobility would like to propose the concept of having a ‘spectrum set aside’ for towns and Indigenous communities that match the FCC set aside in the USA for Native Americans. This set aside program puts the control of spectrum back into the hands of the people that will use it.
This program designed by the FCC is an excellent model for ISED to follow for rural communities. The FCC released a 2.5 GHz spectrum set-aside for native Americans and gave them two years to deploy or the spectrum was turned back and auctioned off.
“Roughly 554 Tribes in the United States have access to Educational Broadband Service (EBS) or spectrum within their Tribal territory. On July 10, 2019, the FCC passed an order that enables federally-recognized Tribal Nations to claim unlicensed EBS spectrum over their lands before competitive bidding begins.”
This two-year timeline lights a fire under every community to start the process of bringing high-speed internet to their community. If the capital/ grants are not available to complete the project within 2 years, then the federal government can change the timeline to match their available capital to meet their broadband initiative.
If ISED offered a spectrum set aside, what would the Federal Government and communities get out of this?
Small towns, rural communities, and Indigenous Communities:
The communities operate as a utility today for every other service provided within their community - power, gas, water, and heat. Broadband is just another utility to add to their portfolio. The towns can be trained to manage Internet services which would, in turn, create more jobs within the community. Today, revenues earned from internet services typically leave the communities whereas if the communities were the provider for internet services, the revenues would remain where they were needed most – in the small towns, rural communities, and Indigenous communities.
Once ISED has assigned the spectrum, the towns would have the ability to move forward as quickly as they wanted. They would have the option of hiring an RF consultant to manage this spectrum deployment and/or they could hire a local ISP to build the network. They would control what worked best for their town and how they wanted to grow their coverage and data speeds.
The community would issue a tender inviting Telco's, ISPs, and contractors to design the tower locations. This will save the government millions in Fiber to the home deployments when the towns can deploy their own fiber to the poles at a fraction of the cost with a licensed 3,500 MHz spectrum that the community can control. With the larger spectrum pool and higher power in 3,500 or 3,800 MHz, fewer towers will be necessary for the communities and this will also lower their overall build cost.
The small towns, rural communities, and Indigenous communities could charge a monthly fee to every subscriber to cover the cost of the spectrum held by the town. The town or the ISP could be responsible to collect this fee on behalf of ISED and submit payment. The ISED would receive a monthly income for the use of the ‘set aside’ spectrum.