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Ottawa to hold 5G spectrum auctions by 2021, introduces new low-income internet program

The federal government says it will hold three auctions by 2021 for wireless spectrum that can be used to build ultra-fast 5G networks, moving to address criticism that Canada is acting too slowly to help telecommunications companies implement the new technology.

Wireless carriers around the world are beginning to build 5G (or fifth-generation) networks and need new spectrum to carry more data and support the technology, which is expected to offer much faster speeds, shorter lag times and exponentially more connected devices.

Navdeep Bains, the federal Minister of Innovation, Science and Economic Development, revealed plans on Wednesday for two previously unannounced auctions of the valuable airwaves – one each in 2020 and 2021 – on top of one already planned for next year. But he did not firmly commit to earmarking spectrum for smaller wireless carriers that compete with industry’s three giants: Rogers Communications Inc., Telus Corp. and BCE Inc.

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Canadian wireless carriers plan to rollout 5G, the fifth generation of wireless technology in the coming years. Faster speeds. Higher bandwidth. Lower latency. It will open the door to life-changing innovations.

Canada will auction airwaves in the low-band, 600-megahertz frequency range in March, 2019. Such spectrum is prized for its ability to travel long distances and penetrate buildings, and the government has set aside 43 per cent of it for bidding only by regional players such as Quebecor Inc.’s Videotron and Shaw Communications Inc.’s Freedom Mobile.

That will give those two cable companies steep discounts on the licences compared with what the Big Three will pay, and Ottawa hopes that will translate into more competition and lower prices for consumers.

The incumbents argue that spectrum set-asides unnecessarily benefit wealthy cable companies and only serve to increase what the dominant players pay for the airwaves, in turn increasing prices for customers.

Mr. Bains said he does not want to prejudge the outcome of consultations with industry, but added: “But as you know from the 600 MHz [rules], we feel the set-aside is critical for competition and we want to continue to encourage more competition going forward.”

“Where there’s strong regional competition, you can see that Canadians end up paying less,” Mr. Bains said in an interview, pointing to lower wireless prices in provinces that have an alternative to the Big Three, such as Quebec. “The set-aside of spectrum is to promote strong regional competition across the country and we believe that will ultimately reduce the price points.”

He said on Wednesday that the government will begins consultation now and hold an auction in 2020 for spectrum in the 3,500 MHz range, which are mid-band airwaves that are considered key for 5G networks.

“Our proposals align with international trends in the band and represent an important step toward ensuring 3,500 will be available to meet consumer demand for 5G,” the minister said.

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Following that sale, in 2021, the government will auction off another block of very-high-frequency airwaves known as millimetre-wave spectrum (because the wavelengths are short enough to be measured in millimetres).

Such spectrum can carry a huge amount of data, but the airwaves cannot travel far, so wireless carriers will need to build small cell sites close to each other to provide a dense web of coverage.

There has been uncertainty around when Canadian carriers will launch 5G service, in part because they have not had clarity on when the government will make key spectrum bands available. Telus, in particular, has advocated for Ottawa to move faster on auctioning airwaves in the 3,500 band because it does not already own spectrum licences in that range, unlike its biggest rivals Rogers and BCE. Telus’s chief technology officer Ibrahim Gedeon told The Canadian Press earlier this week that Canada would fall behind if the government waited until 2020 or later to auction off that spectrum.

Mr. Bains said the timeline announced on Wednesday gives the industry predictability and puts Canada “in the top five versus our international peers when it comes to the deployment of spectrum for 5G,” adding we are “ahead of countries like Australia or Germany.”

The minister also announced that, after more than a year of negotiations, the government has reached an agreement with the country’s largest internet providers to offer deeply discounted service to low-income families.

Under the new program, dubbed “Connecting Families,” Rogers, Telus, BCE, Shaw, Videotron, Cogeco and SaskTel will offer home internet packages for $10 a month to families who receive the maximum Child Care Benefit. The packages will offer download speeds of at least 10 megabits a second and include at least 100 gigabytes of data usage a month. A separate program will provide up to 50,000 families with computers.

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Rogers and Telus have both previously launched similar programs, offering low-cost internet to families on social assistance or living in subsidized housing.

The government is investing $13-million over five years to create a secure online portal to assess households’ eligibility for the program.

The program has some limitations. It is targeted at households with children, which leaves out seniors, single people and young people on their own. There are also 1.2 million families that receive the maximum amount of the Canadian Child Benefit, but the program is capped at 220,000 households, or about 20 per cent. That is based in part on Rogers’ and Telus’s previous experience with how many eligible households take advantage of their low-cost offers.

Mr. Bains said the program could eventually extend to other groups, such as seniors, but said the focus of this program is on children and “making sure they succeed in this new digital economy.”

Anti-poverty group ACORN said the program is a good first step but stated, “we would have preferred [it if] all people under the low-income measure were included.” The group also noted it was disappointed that Atlantic Canada cable provider Eastlink is not participating in the program.

Editor’s Note: An earlier version of this story failed to include Cogeco in the list of companies involved in the new program called “Connecting Families.” This version has been corrected.
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