Question Period Note: 3500 MHz SPECTRUM AUCTION

What is the status of the upcoming 3500 MHz spectrum auction?

• The Government of Canada has been clear that greater affordability, competition, and innovation in the Canadian telecommunications sector is important.

• To support these goals, the government is committed to making the right spectrum available at the right time.

• The 3500 MHz auction will begin on June 15, 2021.

• ISED has previously delayed the auction by six months to allow telecom providers to focus on responding to the COVID-19 pandemic.

ISED is making spectrum available to support the deployment of 5G services in Canada by holding three auctions in the coming years. The next planned auction is for the 3500 MHz band, which is currently used and will continue to be used for rural broadband, in addition to being a key band for the deployment of 5G services. This will be followed by auctions for 3800 MHz spectrum and millimetre wave spectrum, both of which are also expected to support 5G services.

In the 3500 MHz band, ISED is making 200 MHz of spectrum available for “flexible use” licensing that allows licensees to choose the type of services they will deploy, such as mobile (5G) or fixed wireless services (e.g. Internet-to-the-home). Since existing users are retaining some spectrum, the amount available for auction varies between 30 MHz and 140 MHz across 172 Tier 4 service areas that cover Canada.

For the 3500 MHz auction, ISED will implement pro-competitive measures in the form of a 50 MHz set-aside in markets where enough spectrum is available. This set-aside will provide the opportunity for smaller and regional competitors—competitors that have been shown to put downward pressure on prices—to acquire the spectrum they need to compete in the market for 5G services against the larger established national providers.

The rules for the 3500 MHz auction were published on March 5, 2020. On June 5, 2020, Minister Bains announced a six-month postponement of the auction process to allow the telecommunications industry to maintain its focus on providing essential services to Canadians during the COVID-19 pandemic. The revised application deadline was April 6, 2021. 24 companies have now applied and qualified to participate in the auction, which is scheduled to start June 15, 2021.

On April 15, 2021, the Canadian Radio-television and Telecommunications Commission (CRTC) released its decision on wholesale network access for Mobile Virtual Network Operators (MVNO). The decision requires that companies seeking MVNO access hold a commercial mobile spectrum licence in the area in question. This decision has prompted requests from some telecom providers for ISED to delay the 3500 MHz auction and reopen the application process. However, stakeholders have been advised that the auction is now closed and will proceed as scheduled.

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