Spectrum: a crucial element for the telecom industry

On June 13, 2007, I again was invited to address the Canadian Telecom Summit in Toronto as Industry minister. I reminded the audience of the reforms adopted over the preceding year and mostly discussed the reforms to come in the management of the frequency spectrum, a crucial element for the telecom industry. My transfer to the Foreign Affairs department two months later unfortunately prevented me from going forward with these plans. — 14 April 2009

A lot has happened in telecommunications policy since last June.

When I was here a year ago, I told you I wanted to modernize the way the telecom industry is regulated. I told you I had just tabled a proposed policy direction to the Canadian Radio-television and Telecommunications Commission (CRTC). We wanted the CRTC to rely on market forces to the maximum extent possible, and to regulate services only when necessary.

I told you this was the first step in a series of telecommunications policy changes. I was also examining two CRTC decisions – one on local telephone markets and another on Voice over Internet Protocol.

These decisions I believed were not consistent with the market-based approach that will make your industry stronger – an approach that guarantees there will be more competition among providers, and that consumers will get a bigger telecom bang for their buck.

Today, one year later, I am here to say that the policy direction is in force. Access-independent VoIP services were deregulated in the fall. In April, we abolished the regulations restricting telephone companies from offering promotions and calling back their former customers to offer them a better deal. These types of restrictions do not help competition and should not exist in a market-based economy.

Also in April, the criteria for deregulating local telephone markets were streamlined. This means that consumers in major urban markets such as Toronto will benefit sooner from the impact of competition in the marketplace, potentially bringing lower prices and better choice. And the CRTC has also recently announced that it is re-examining its existing regulations in light of the policy direction.

I am very proud of these accomplishments. They have reduced the burden of regulation on the industry. And they will benefit businesses and consumers!

I told you what Canada’s New Government would do. We acted. Today, one year later, I can say: mission accomplished! Now, with your continued support and advice, our government intends to move forward and make more changes to telecommunications policy that will benefit Canadians.

This year, we want to concentrate on another central aspect of the telecommunications industry – spectrum. Or, more precisely, the portion of spectrum – radio frequencies – that is the basis for wireless transmission.

Unfortunately, most people are unaware of the importance of spectrum. The media rarely mention it. But you and I know it: the broadcasting industry would not exist without spectrum. And the telecommunications industry would be much smaller.

When I was a kid, we used to play with walkie-talkies. Today, cellphones are not merely toys – they are widely used in everyday life. It is the fastest-growing sector in the Canadian telecommunications market.

But spectrum is not just about cellphones. New applications are being developed and commercialized every year.

High-tech cars today come with satellite navigation systems, and this requires spectrum. Farmland irrigation systems are being switched on and off remotely, which requires spectrum. Bank cards and public transit passes will soon be able to communicate by using spectrum.

The wireless transmission of energy is being developed. Imagine how revolutionary it would be if we did not need wires to transmit power. There are dozens of other examples of wireless communication between people and machines.

Wireless technology is like the electrical grid. At first, it was used mainly for lighting. Since then, all kinds of new electrical devices have been invented and connected to the wireline electrical network: ovens and refrigerators, hair dryers and washing machines. As new devices are invented that communicate wirelessly using spectrum, they too will reshape society in unpredictable ways.

This is why we must have an effective spectrum policy. The next wave of innovation depends on spectrum. Countries that have flexible spectrum policies will attract innovators, researchers and investments. Their citizens will have faster access to all these new products. Countries that slow down the adoption of technologies, or inhibit market forces, will fall behind.

The most critical role of government is to allocate spectrum in a timely and efficient manner.

This week, I approved a new spectrum policy framework. It will be officially published in the Canada Gazette on June 16. It will guide Industry Canada in managing spectrum more efficiently. This means that service providers who need spectrum will have easier access to it. It will foster innovation. And ultimately, consumers will have better telephone, Internet and television services.

The framework provides a small set of concise and clear guidelines, starting with:

�”market forces should be relied upon to the maximum extent feasible”; and
�”regulatory measures, when required, should be minimally intrusive.”

You will recognize here some similarities with the policy direction to the CRTC!

To put Canada at the forefront of wireless innovation, however, we need to go further. In its report last year, the Telecom Policy Review Panel called for, among other things:

�the establishment of market-based exclusive spectrum rights, which means an ability to buy, sell and lease spectrum holdings; and
�the elimination of barriers to the development of secondary markets in spectrum.

A sizeable body of economic, legal and technical literature considers that this would bring significant improvements in economic efficiency and innovation. I want to look at best practices around the globe. I want to know how we can adapt and improve our current practices.

This is why I have initiated a study of market-based exclusive spectrum rights. A group of experts with an international reputation in this field has been awarded the job. It is headed by Mr. Martin Cave, a British expert in spectrum policy who has been responsible for important reforms in that country. There is also a Canadian, Mr. Robert Jones. He has worked for 30 years in the field of spectrum here and on the international scene.

They will report to me in two months. I hope this will launch a lively debate.

Spectrum is a technical matter. But we’re making decisions that have important consequences for Canadians in their daily lives.

Earlier today, I announced that 12 new orbital positions have been made available to two Canadian satellite operators, Ciel Satellite and Telesat Canada. These new orbital positions are necessary in particular to better serve the customers of satellite television services. They are also needed to provide faster and more accessible broadband services in northern and remote communities.

Awarding these new licences will bring all the benefits of competition, including increased product and service offerings, choice in supplier, and competitive prices. That will benefit Canadians for years to come.

Let’s talk a bit more about television. Last month, the CRTC established August 31, 2011, as the deadline for the transition from analogue to digital television.

Digital TV is more efficient and uses less spectrum than analogue TV. It means that spectrum will become available for other uses. And so today, I am pleased to announce that this spectrum will become available for the industry in four years.

As in the U. S., channels 52 to 69 will be moved to lower frequencies, freeing up the 700-megahertz band. Four of these channels will be used for public safety. The others will be allocated for new services, including:

�advanced mobile;
�wireless broadband; and
�broadcasting.

I know that there is already strong interest in this spectrum. In the coming months, we will start laying the groundwork for its allocation. Stay tuned!

Finally, as you know, other important decisions must soon be made regarding spectrum allocation. They are related to the spectrum auction for advanced wireless services, to be held in early 2008. There are consultations now taking place to determine the auction rules.

As I said earlier, Canadians usually never hear about spectrum issues in the news. But looking at the press coverage for this auction, some of you must have been working overtime!

I note with interest that there is a debate about the amount of competition in the cellphone sector. A good debate includes opposing views and new ideas.

There are those who say we need specific measures to allow new players into the cellphone business to guarantee more competition. Others say there is a lot of competition already, and the rules should be the same for everybody. And there are also those who believe another way to stimulate more competition is by removing foreign investment restrictions. I’m glad to see that everybody takes for granted that competition is a good thing!

You know, every few years, we witness a new revolution in the telecommunications industry. Today, we are on the brink of a wireless revolution. Digital and wireless technologies are merging to create something new – something that will impact all aspects of our economy and our daily life.

As Minister of Industry, I want to make sure that you can develop your vision and plans. I want to make sure that you can seize all these exciting opportunities. My job is to create the best possible policy environment for business to thrive – and that in the end Canadians consumers are well served.

I hope to come back again next year to share with you more fascinating developments, and to report on all the policy improvements our government has made.