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Inappropriateness of Spectrum Auctioning in a Canadian Context

Spectrum is the publicly owned radio waves used for broadcasting television signals, wireless telephone, wireless data and Internet, and different forms of radio services. This report provides the most detailed analysis available in Canada on auctioning spectrum.
113 pages $10.00

Executive Summary

As the designated federal government body to oversee the trusteeship of the publicly-owned radio frequency spectrum, Industry Canada is responsible for ensuring that the spectrum is used in the best interests of the nation, its users and the general public. The use of the spectrum is granted in the form of a licence or radio authorization in accordance with specified policies, regulations and procedures, which are readily available to the public.

Industry Canada has continued to review and update their various licensing processes on a regular basis through public consultation with industry and users. However, the introduction of auctioning signals a change in the consultation mechanism and the government-industry and user relationship.

Industry Canada is currently establishing the financial, administrative and procedural arrangements necessary to have the operational capacity to conduct auctions. Auction software has been purchased, staff is being trained and demonstrations have been and are continuing to be provided. According to Industry Canada officials, auctions are planned to be employed to select licensees for a second round of licensing for Local Multipoint Communications Services (LMCS) in 1998, and several other potential candidate services and frequency bands apparently have also been identified.

This study examines the exceptional and unique spectrum management program in Canada, the previous use of the public consultation process with industry and users, how radiocommunications has evolved through the successful use of the comparative radio licensing process.

It makes the point that the introduction and intrusion of spectrum auctions would be inappropriate in this environment, from a consumer and licensee point of view, at this time or any time in the future.

Auctioning spectrum is a bad idea whose time should not have come. It is nothing more than a tax grab by government that will mean less competition, higher consumer prices, and no public benefits such as job creation and research and development in Canada.

With auctioning, Industry Canada becomes the OPEC of spectrum, as the Minister can create spectrum scarcity and benefit from it.

Auctions are an American remedy to cure an American illness we’ve never suffered from – too much time taken to select licensees followed by legal challenges. Canada has benefitted from timely licensing and no legal challenges, and has no valid need to change the process.

The report’s findings are that the comparative selection process as opposed to the auction option should be the preferred process for licensing spectrum.

 

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