PIAC Challenges the Rogers/Shaw AWS Spectrum Deal

As predicted in the blog entry of 15 Jan 2013, the usual group of suspects have launched a campaign to get Industry Canada (IC) to reject the Rogers/Shaw deal which will see Rogers acquire unused AWS (Advanced Wireless Spectrum in the 1700/2100 MHz band) from Shaw once the moratorium on AWS spectrum transfer runs out in 2014.

The lead organizers of the appeal are PIAC, the somewhat misnamed, in my opinion, Public Interest Advocacy Centre and Open media.ca. [sic] There are also a number of west coast based groups that usually operate as part of the Open media.ca [sic] umbrella involved in what is at the moment mainly a letter writing and e-mail campaign.

Reasonable arguments can be made for both sides of this debate. On the "let it go through" side, if Rogers does not acquire the spectrum, there is little likelihood that the existing AWS operators will actually start using the spectrum in the Algoma District within the foreseeable future. On the "stop it" side, allowing Rogers to acquire the spectrum will on the surface only increase what is perceived as an oligopoly with the existing big 3 vendors.

How IC will react to the challenge is anyone's guess. I feel there are two critical areas of concern that the may affect the course of government action:

a. Will IC make a decision or announcement before of after the 700 MHz spectrum auction? Depending on where the appeal stands in the decision making process, it may directly affect who will participate in the auction and therefore the revenue the government will receive from the auction.

b. How will the decision affect future takeover bids? There have been persistent rumours of the incumbents taking over one or more of the new entrant AWS carriers since they went on the air. Any decision affecting the Rogers/Shaw deal will undoubtedly set precedence for future acquisition plans.

I am sure there will be more action in this arena in the not too distant future as all parties crank up their communication and public relation campaigns.

Rogers Makes Offer to Purchase Shaw Spectrum

Rogers announced that it has reached an "option to purchase" agreement with Shaw for the wireless spectrum purchased by Shaw in the AWS (Advanced Wireless Services) band. The statement was part of a number of agreements announced on Monday, 14 Jan 2013 by Rogers but the only one having a direct impact on the Algoma District.

In 2008, Shaw spent close to $190 million dollars to purchase wireless spectrum in the area from SSM to Vancouver Island. Included in this amount was $1.25 million for spectrum in the SSM and Thunder Bay areas.

In the fall of 2011, Shaw decided not to proceed with plans to develop a traditional cellular network but opted instead to build a Wi-Fi based network with cellular hardware access capability fully integrated with its cable network.  This made the AWS wireless spectrum they held redundant to their needs.

Under the terms of the 2008 spectrum auction, the major incumbent network operators i.e. Bell, Rogers and Telus are prohibited from purchase spectrum from the new entrants such as Shaw until 2014. No mention was made of "options to purchase." Regardless, the Rogers/Shaw sale will need approval from the Competition Bureau and Industry Canada. The CRTC is not involved in this decision.  

Rogers paid Shaw $50 million dollars upfront for the option to purchase. Since Shaw paid $190 million originally, and is rumoured to have spent close to a billion dollars overall in the development of a wireless strategy, it is reasonable to speculate that if the regulators approve the sale, Shaw will try to recoup as much of their expenditure as possible and Rogers will end up paying many times more than the $50 million agreed to for the option.

What Rogers would do with the spectrum in the Algoma District is open to conjecture. There does not appear to be spectrum shortage per se in the District but there is a congestion issue with the existing sites. More cells need to be added to ease this congestion.  How the major vendors providing the cell and backbone infrastructure in the District - Bell, Rogers and Tbaytel - achieve this is up to them.

One of the consequences which the regulators will have to consider when making their decision is the impact it will have on the other new entrants in the marketplace. Will companies such as Mobilicity, Public or Wind be able to sell all or part of their spectrum to an incumbent if the Shaw sale is approved? These companies have spectrum in the north, but I am not aware of any plans to activate their own hardware based service in the area. 

In my estimation third parties will launch some sort of legal or regulatory appeal of the process and any preliminary decisions the regulators may arrive at.

Stay tuned; I am sure there will more to follow. 

CRTC Directs Stricter Deferral Account Reporting

On 26 Oct 2012, the CRTC directed Bell Canada and Bell Aliant i.e. Bell to submit quarterly reports on the status of their Deferral Account project. They stated the reports must be filed within 15 days after the end of each quarter, beginning with the quarter ending December 2012.

The CRTC took this action in response to the amended report submitted by Bell on 31 Jul 2012 which in effect scrubbed the previous announced implementation schedules and combined the implementation period for about 100 localities to a single date of 31 Aug 2014. This report was also the incentive for my letter to the CRTC in August 2012.

The CRTC expressed concern that, based on the information available, there is a risk that the rollout will not be completed by the end of the rollout period in August 2014.

The letter identifies specific information that must be included in the quarterly reports:

a. A summary of the progress of the rollout;

b. The status of IS/IT system development to support the retail wireless broadband system, including the expected completion date;

c. The status of wireline transport backbone construction, including

i. communities completed with completion date,
ii. communities started with expected completion date, and
ii. communities not started with expected start and completion dates;

d. The status of wireless access construction by community, including the number of

i. towers required,
ii. towers existing or completed,
iii. additional towers with expected start and completion dates, and
iv. towers where electronic augmentation has been completed;

e. The service ready date, achieved or planned, by community.

The quarterly reports are also to include the following:

a. A description of any significant changes to the previous report and reasons for those changes;

b. Information about any delays in radio frequency testing and electronics implementation;

c. A list of communities where negotiations have begun for placement of cell towers for wireless broadband service and the status of such negotiations;

d. A summary of the results of any testing of customers’ wireless broadband service, including effects on the rollout schedule and lessons learned; and

e. The steps the Bell companies are taking to avoid excessive delays due to any of the above.

How much of this information will be made public or how much Bell will claim is competitive or proprietary information and therefore confidential, remains to be seen.

It is unfortunate that the CRTC choose not to issue a directive to Bell to accelerate the roll-out.

It could be a good test of the new CRTC regime’s stated aim to be friendlier to consumers.

New Bell Cell Site Coming to Echo Bay Area

On 26 Oct 2012 Bell announced public consults for a new cell site at Echo Bay in the area of 242 Maple Leaf Road. It will be a 70 metre lattice tri-pole similar to the one at Heyden and shown in the photo.

Like the previously announced new site in the North Sault area, there was no in-service date provided but it normally takes 6-9 months after the public consult for construction to start. Therefore I suspect we are looking at the 2013 work plan output.

Bell HSPA+ Working in North Sault Area 25 Oct 12

Bell HSPA+ service in the North sault area appears to be working, at least in the Goulais area. I made a call on late Thursday, 25 Oct 2012 without any problems and again in the next morning. See this blog for additional details about the service and coverage.

Status of Bell Cell Sites in North Sault 24 Oct 12

There are indications that the activation of the Bell HSPA+ cellular service in the North Sault area is getting closer. I understand the new sites and network access links are currently undergoing tests and if there are no problems, the sites may be commissioned as early as the 26 Oct 2012 weekend. Once I can confirm the sites are working, I will publish a blog entry.

A couple of reminders; the new Bell sites are HSPA+ only and will not work with CDMA technology but Bell CDMA phones will continue to work on the Tbaytel network as they have for the past few years. However, since Bell and Tbaytel are using and operating from their own towers in different locations, the coverage for HSPA+ and CDMA may be different. Although the Bell and Tbaytel towers are in close proximity, other technical features may result in different coverage.

Bell data hubs should work on the new Bell sites. Most external antennas and amplifiers can be used with any brand of data hub although it may be necessary to get a different connector or pigtail to connect the coaxial cable to the data unit.

In comments at this blog entry I speculated as follows about the Bell service in North Sault: - "Based on the map projection I am suspicious that they may be adding a cell configuration to one of their existing towers in the north Batchawana Bay area but this is just a guess." It has now been confirmed that Bell will activate a third site in the area of the Hwy 17/Hwy 563 intersection. Also, the site which I have referred to as Bell Goulais (Buttermilk) , Bell calls Haviland.

In summary, the three new Bell HSPA+ sites are Batchawana Bay, Haviland and Heyden.

  Map Showing Coverage (Brownish) and Tower Locations (Red Stars)
Go to the Bell coverage site  to see a manipulable version of the Bell coverage map.

  Clearer Picture of Tower Locations (Blue Teardrops)

CRTC Asks for Public Input to a Wireless/Mobile/Cellular Consumer Code

On 11 Oct 2012, the CRTC issued an invitation to "Canadians to participate in the development of a consumer code for cell phones and other mobile devices." This launches a public consultation to obtain Canadians’ views on a new code for retail wireless services, such as cell phones and other personal mobile devices. The end of the open, public consultation process on 30 Nov 2012 will lead to public hearings to be held in Gatineau, PQ starting on 28 Jan 2013.

Background

This recent announcement is follow-on to the consultation conducted between 04 Apr 2012 and 03 May 2012 on whether or not there was a need for CRTC intervention to ensure competition in the wireless (mobile or cellular sector). As indicated in this blog, the overwhelming public and corporate response indicated some form of federal level control was required but for very different reasons. The general public expressed concern about the one –sided nature of the existing contractual practices which they viewed as favouring the corporations while the corporations expressed concern about the Balkanization of the regulations caused by the provinces adopting their own individual set of regulations which were not always in agreement.

Elaboration of Latest Call for Consultation

The CRTC is seeking input from the public on areas that should be covered by any proposed code for retail wireless service. The CRTC specifically mentioned the following high level areas in their announcement:

a. The terms and conditions that should be addressed by a code for cell phones and mobile devices;

b. to whom the code should apply;

c. how the code should be enforced; and

d. how the code’s effectiveness should be assessed.

The Commission also identified other areas that should be included in the code. This summary list shows some of these areas:

a. Clarity of contract terms and conditions

b. Changes to contract terms and conditions

c. Contract cancellation, expiration and renewal

d. Clarity of advertised prices

e. Application of the Code to bundles of telecommunications services

f. Notification of additional fees

g. Privacy policies

h. Hardware warranties and related issues

i. Loss or theft of hardware

j. Security deposits

k. Disconnection

Additional details about the content of the above list can be found at the CRTC webpage.

Public Participation

The general public may participate in the proceedings by:

a. filling out the online form;

b. writing to the Secretary General, CRTC, Ottawa, Ontario, K1A 0N2; or

c. sending a fax to the CRTC at 819-994-0218.

The public inputs are published  at this CRTC website.