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A federal auction of cellular airwaves crucial to 5G mobile technology is raising concerns that hundreds of thousands of rural internet customers could be cut off or have their service reduced.

Navdeep Bains, Minister of Innovation, Science and Economic Development (ISED), has said Ottawa will sell off spectrum in the 3,500-megahertz frequency range in 2020. Radiowaves are used to carry communications signals and spectrum in this band is essential for 5G, the next generation of wireless technology that will offer much faster speeds, higher capacity and shorter lag times.

Wireless operators plan to invest heavily in the coming years to deploy 5G service, which will also support applications such as more advanced driverless vehicles and a vast expansion in sensors used for internet of things devices. It’s expected to lead to new economic opportunities and. with the global race to build 5G networks under way, the federal government has faced criticism it is not moving fast enough to get new spectrum into carriers’ hands.

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Amid that pressure, ISED has proposed dramatic changes to the ownership and use of 3,500-MHz spectrum, setting off a fight over the airwaves in the process as some complain the new approach will hurt rural internet users. But others, particularly Telus Corp., have argued in the past that Canada will fall behind on 5G if it does not free up this key band of spectrum for mobile use.

ISED launched a consultation in June with proposals to claw back some of the spectrum held by telecom operators already using it to deliver internet using communications towers and wireless signals. “Fixed wireless” is used in rural and remote areas that are difficult to serve with traditional wired internet service.

Xplornet Communications -- Canada’s largest rural broadband provider, with more than 350,000 homes served using either satellite or fixed-wireless technology -- is the largest user of 3,500 MHz airwaves. It says it is deeply concerned that the proposals will not leave it with adequate spectrum to serve many of its subscribers. One option would see Xplornet surrender up to two-thirds of its 3,500 spectrum while a second would cap it at no more than 50 MHz of bandwidth in each licence area, reducing its holdings in some parts of the country by more than 50 per cent.

“Once again, rural internet connectivity is being sacrificed for urban cellphone use,” said James Maunder, vice-president of public affairs at Xplornet. “These policy proposals would reduce the service of hundreds of thousands of homes in rural Canada.”

“We’re having good, productive conversations with the government, but we are anxious for the government to correct this so rural Canada is not left behind,” he said.

National carrier Telus doesn’t own any 3,500 airwaves after trading a large swath of licences to Xplornet in a spectrum swap just two years ago. Regional wireless providers such as Videotron and Freedom Mobile also have no 3,500 spectrum, while BCE Inc. and Rogers Communications Inc., two other national providers, together control 76 per cent of the spectrum in the band through a joint-venture called Inukshuk, according to ISED, which says it wants to promote more competition in the wireless industry.

“Making it possible for other providers to obtain 5G spectrum and compete will mean better prices for Canadians,” said Mallory Clyne, director of communications for ISED. She noted that consultations are ongoing but added, “any proposal that impacts rural Canadians will be given careful consideration because connectivity is essential for Canadians no matter where they live.”

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Mirko Bibic, chief legal and regulatory officer at BCE, said the government’s proposals claw back more than in “past precedents” with other spectrum bands, adding they “risk significantly slowing down broadband deployment to communities that need it most.” BCE recently started using the spectrum to offer fixed wireless home internet in two small Ontario towns and says it will expand the service to more than 30 communities in Ontario and Quebec by the end of the year.

Rogers’ senior vice-president of regulatory, David Watt, meanwhile, suggested that the government should move faster to make more airwaves higher in the broad 3,500 frequency range available sooner. Spectrum from 3,650 to 4,200 MHz is held by a number of users including satellite operators and ISED does not have immediate plans to reclaim and auction it off.

“We will be releasing 3,500 MHz spectrum for 5G as quickly as possible,” ISED’s Ms. Clyne said, noting the “complexities” of the higher-frequency band demands “additional consultation with stakeholders and analysis.”

Telus spokesman Richard Gilhooley declined to comment for this story ahead of the company’s formal submission on the consultation, which is due on Thursday.

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