Canadian telecoms and Internet providers that are not using spectrum awarded between 2004 and 2009 could lose it, if they haven’t used to expand broadband Internet access in rural Canada.
Industry Minister James Moore today announced that, starting in March 2014, his ministry will begin to review licences awarded for the 2300 to 3500 megahertz spectrum.
Telus (TSX:T) and ABC Communications are two B.C. companies that acquired licences for the 2300 to 3500 MHz spectrum.
“These spectrum licences contained conditions requiring that the spectrum be used for fixed wireless access, which represents the most affordable high-speed Internet access for many rural Canadians,” Moore said.
“Our government will only renew spectrum licences for those holders that have met all conditions of licence. Those that have not used the spectrum will lose it.”
The 2300 to 3500 MHz spectrum can be used for either broadband Internet or wireless networks (cellular). But the licences were awarded with the condition that it be used predominantly for expanding broadband Internet in rural Canada (as opposed to using it for wireless networks).
There’s a problem with that, though. At the time the licences were awarded, the hardware that would run on that particular band had not been well developed.
“Today, the equipment ecosystem has yet to be developed,” an Industry Canada document states. “Consequently, there has been limited deployment in the band; only one licensee has implemented a system.”
Hardware does exist that can use the 3500 MHz spectrum for broadband in rural areas, and one B.C. company – Tranzeo Wireless Technologies Inc. (TSX-V:TZT) – makes it.
It’s called WiMAX – a signal that can be used to beam broadband to an entire building or small town without wiring.
ABC Communications has used Tranzeo gear to deploy WiMAX in rural areas, according to Mike Rex, Tranzeo’s research and development manager.
But even Rex admits there are issues with WiMAX, when used for broadband Internet, not the least of which is cost.
Asked why telecoms and ISPs are not yet using WiMAX to extend broadband to remote areas, Rex said: “I can only speculate that they were waiting for the hardware prices to come down, or they were waiting for some spectral efficiency in the hardware to go up.”
Asked what the spectrum review might mean for Telus, company spokesperson Liz Sauve said: “We’ll meet industry Canada’s condition of licence requirements."
