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Telus Communications Inc TELUS COMMUNICATIONS INC. Reply Comments for CONSULTATION on a TECHNICAL, POLICY and LICENSING FRAMEWORK for SPECTRUM in the 600 MHz BAND SLPB-005-17 August 2017 Spectrum Management and Telecommunications November 3, 2017 Table of Contents Executive Summary ....................................................................................................................................... 4 The alleged “pro-competitive measures” will not fulfil the Department’s stated objectives and are destined to hinder Canada’s digital economy ...................................................................................... 5 Alternatives to proposed set-aside ..................................................................................................... 10 Ensuring the delivery of world-class connectivity to rural Canada ..................................................... 14 Auction mechanics and efficient outcomes ........................................................................................ 15 Introduction ................................................................................................................................................ 16 5G: Beyond mobile broadband ........................................................................................................... 16 Why do all operators need 600 MHz spectrum? ................................................................................ 17 TELUS’ Comments on Specific Questions Posed by ISED ............................................................................ 19 Q1A / Q1B / Q1C: Set-Aside Implementation, Amount, and Eligibility .................................................. 19 Set-aside eligibility rules are flawed ................................................................................................... 20 Set-aside size not justified .................................................................................................................. 25 A set-aside is not required .................................................................................................................. 27 A set-aside is not advisable ................................................................................................................. 31 If implementing allegedly “pro-competitive” measures, use a cap instead of a set-aside ................ 37 A band cap creates an effective set-aside .......................................................................................... 38 A sub-GHz broadband spectrum cap recognises the low band deficiencies of all operators ............ 38 If implementing a set-aside then correct the eligibility rules ............................................................. 41 If implementing a set-aside, anything more than 20 MHz unjustified ............................................... 42 If implementing a set-aside, it must be complemented by a cap on sub-GHz holdings to address low-band spectrum concentration concerns not resolved by proposed set-aside ............................ 43 If implementing a set-aside, must remove the set-aside in rural service areas ................................. 45 Q1D: Set-Aside Transferability ................................................................................................................ 46 Q1E: Set-Aside Block Size ........................................................................................................................ 47 Q2: Tier Sizes ........................................................................................................................................... 48 Q3: Generic Licences and Set-Aside Categorisation ............................................................................... 49 Generic Licences ................................................................................................................................. 49 Categorisation of blocks won by set-aside-eligible bidders ................................................................ 50 Q4: Anonymous Bidding and Information Disclosure ............................................................................. 51 2 Anonymous Bidding ............................................................................................................................ 51 Clock Round Information Disclosure ................................................................................................... 52 Q5: Auction Format ................................................................................................................................. 53 CCA using WARP-based activity rule ................................................................................................... 53 CCA using GARP-based activity rule .................................................................................................... 54 ECCA .................................................................................................................................................... 55 Summary of Responses ....................................................................................................................... 56 Q6: Assignment Stage ............................................................................................................................. 57 Guarantee of Contiguity ...................................................................................................................... 57 Assignment Stage ................................................................................................................................ 58 Q7: Price Increment Rules ...................................................................................................................... 62 Q8: Affiliated and Associated Entities ..................................................................................................... 64 Q9: Collusion and Communication Rules ................................................................................................ 68 Q10: Licence Term .................................................................................................................................. 69 Q11: Transferability and Divisibility ........................................................................................................ 70 Q12: Deployment Condition of Licence .................................................................................................. 70 Q13: Other Conditions of Licence (R&D, Mandatory Roaming and Subordination) .............................. 72 Research and Development Condition of Licence .............................................................................. 72 Mandatory Roaming for 5G Technologies Should Be for Out-of-Territory Regions Only and for Existing Technologies Should Be Limited to Out-of-Footprint Areas .................................................. 73 Subordination Is a Right of the Licensee ............................................................................................. 76 Q14: Opening Bids .................................................................................................................................. 77 Q15: Eligibility Points and Pre-Auction Deposits .................................................................................... 79 Q16: Renewal Process ............................................................................................................................. 80 3 Executive Summary 1. TELUS appreciates the opportunity to provide its reply comments. 2. TELUS fully supports the steps initiated by the Department to jointly repack with the US and make valuable 600 MHz mobile broadband spectrum available for the benefit of all Canadians. Combined with 3.5 GHz and mmWave bands, the allocation of this spectrum in a timely manner will be instrumental in securing Canada’s position as a global leader in 5G. 3. TELUS firmly believes that 5G networks will act as a stimulus for disruption in modern digital economies. 5G networks will serve as a platform for innovation and will drive digital development in vertical industries such as health care, transportation, agriculture, manufacturing, automation, and smart cities. As such, 5G will become a central technological pillar in the realisation of the Government’s Innovation Agenda: Empowering Canada’s digital society, building a highly talented workforce capable of undertaking the challenges of the 21st century, and maintaining Canada’s leadership in a digitally competitive world. 4. TELUS continues to advocate for the release of additional spectrum to address the insatiable demand for wireless data and enable the emergence of disruptive applications. TELUS offered its strong support for the bold steps proposed by the Department in response to the recent Consultation on Releasing Millimetre Wave Spectrum to Support 5G, in which the Department demonstrated a willingness to address critical incumbent coexistence issues and challenge the status quo in order to accelerate Canada’s 5G journey. 5. TELUS is also a strong proponent of a reliance on market forces to drive Canada’s digital economy leadership. Both the Spectrum Policy Framework for Canada (SPFC)1 and the Framework for Spectrum Auctions in Canada (FSAC)2 emphasise the reliance on market forces as a guiding principle. 1 http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf08776.html 2 http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01626.html 4 6. The framework proposed in this 600 MHz consultation does
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