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Alberta Service Area Volume I Linking Canadians with each other and the world 2500 MHz Multipoint Communications Systems License Application Canada Gazette Notice No. DGRB-006-99 Submitted by BC TEL Mobility Cellular Inc. October 12, 1999 Alberta Service Area Volume I 2500 MHz Multipoint Communications Systems License Application for the Service Area of Alberta Application Submitted to Industry Canada Pursuant to Canada Gazette Notice No. DGRB-006-99 by BC TEL Mobility Cellular Inc. October 12, 1999 2500 MHz MCS License Application Preface Preface In response to Canada Gazette Notice No. DGRB-006-99 2500 MHz Multipoint Communications Systems in the 2500 MHz Range, Policy and Licensing Procedures, (the “Notice”) BC TEL Mobility Cellular Inc. (the "Company") is pleased to submit the attached Multipoint Communications Systems (“MCS”) Application (the “Application”). The Notice establishes 14 service areas that are closely aligned with provincial boundaries except for an additional area that encompasses Eastern Ontario and Outaouais. The spectrum licensing policy, which provides for the utilization of specified radio frequencies in each of the service areas, is designed to facilitate the deployment of a high-quality, affordable MCS information infrastructure in the prescribed service areas. The Company is applying for MCS licenses in seven of the service areas set out by Industry Canada in the Notice. These Applications are made as part of the Company’s vision to become a national telecommunications services provider and as such include the service areas of British Columbia, Alberta, Ontario, Eastern Ontario and Outaouais, Quebec, New Brunswick and Nova Scotia. BC TEL Mobility Cellular Inc. has determined that these specific service areas are ideal candidates for the Company’s proposed MCS service because they correspond to the current and future routing plans of the majority of the TELUS national network. In addition, these areas provide the necessary elements of sufficient market size and technical compatibility with the Company’s proposed MCS network. These elements will enable the roll out of the proposed MCS service to approximately 60% of Canadian households, within 3 years, across the seven locations for which the Company has submitted applications. The Application is divided into three volumes. Volume 1 provides an Executive Summary and addresses the corporate requirements set out in the Notice. Specifically, Page i 2500 MHz MCS License Application Preface Section 1 contains the Executive Summary, Sections 2 and 3 address Eligibility and Demonstrated Competencies respectively. Appendix A outlines Ownership and Control and Appendix B provides Corporate Financial Information. Volume II provides information specific to the Alberta Service Area. Section 4 sets out the planned coverage in each service area and is followed by the Business Plan in Section 5. This section also includes supporting market research information. The Technology Strategy is explained in Section 6. Appendix C provides a glossary and is followed by Appendix D which contains the results of the Company's MCS technical trials. Volume III is the Learning Plan for Alberta. The Learning Plan satisfies one of the requirements of the Notice and is designed to meet the learning needs of the communities within Alberta. BC TEL Mobility Cellular Inc., which will be renamed to TELUS Mobility Cellular Inc. on October 18, 1999, is a wholly owned subsidiary of BCT.TELUS Communications Inc. (BCT.TELUS). BC TEL Mobility Cellular Inc. is a Canadian carrier pursuant to the Telecommunications Act. BCT.TELUS is a financially strong telecommunications company with a good record of service and is fully supportive of this application. For ease of reference throughout this Application, BC Tel Mobility Cellular Inc. will simply refer to itself as “TELUS” or the “Company” and BCT.TELUS will be used in reference to the parent company. Certain of the information contained in the Application is of a financial, commercial or technical nature and consequently, the Company is filing this information in confidence with Industry Canada pursuant to section 20(1) of the Access to Information Act. The release of this information to the public would provide current and potential competitors with sensitive, commercially useful information, the release of which would cause TELUS direct and specific harm. The disclosure of this information could reasonably be Page ii 2500 MHz MCS License Application Preface expected to result in a material financial loss and negatively impact the Company’s competitive position. In addition, some of the information for which confidentiality is claimed is proprietary third party information, which the Company has undertaken to hold in confidence. Disclosure of this information would prejudice the rights of these third parties and could cause TELUS direct harm in future negotiations with these parties. TELUS considers all of this information to be confidential and proprietary and consistently treats this information on a confidential basis. Information for which the Company claims confidentiality has been italicized. All illustrations and diagrams are also confidential. A public version of the Application has been provided for the public record. Page iii 2500 MHz MCS License Application Table of Contents Table of Contents Volume I Preface i Table of Contents iv 1. Executive Summary 1-1 2. Eligibility 2-1 2.1 Attestation that BC TEL Mobility Cellular Inc. Meets Canadian Ownership and Control Requirements 2-1 2.2 Incorporation Documents 2-1 2.3 Shareholdings 2-1 2.4 Directors 2-3 2.5 Officers 2-3 2.6 Financing 2-4 2.7 Agreements 2-5 3. Competencies 3-1 3.1 Overview of BCT.TELUS - Linking Canadians With Each Other And The World. 3-1 3.2 BCT.TELUS Experience 3-3 3.2.1 Wireless Communications Experience 3-4 3.2.2 Fixed Wireless Service Experience 3-5 3.2.3 Data Communications Experience 3-5 3.2.4 Internet Experience 3-6 3.2.5 Smart Cities & Virtual City Halls Experience 3-7 3.2.6 Electronic Customer Service Experience 3-7 3.2.7 Wireline Communications Experience 3-7 3.2.8 Research & Development Experience 3-8 3.2.9 Growth Strategy 3-10 3.3 Alliances and Partnerships 3-11 3.3.1 Domestic and International Alliances 3-11 3.3.2 CANARIE 3-12 Public Version Page-iv 2500 MHz MCS License Application Table of Contents 3.3.3 TRLabs 3-12 3.3.4 Netera Alliance 3-12 3.4 Financial Capabilities 3-13 3.4.1 Financial Statements 3-13 3.4.2 Interim Financial Statements 3-13 3.4.3 Financial Plan 3-13 3.4.4 Evidence of Financing 3-13 Appendix A: Financial Statements (Annual Reports) Appendix B: Eligibility Documents Volume II Introduction II-i 4. Service Area 4-1 5. Business Plan for the Alberta Serving Area 5-1 5.1 Introduction 5-1 5.1.1 Industry Structure 5-2 5.1.2 The Future of the High-speed Access Market 5-5 5.1.3 High-speed Internet Availability 5-6 5.2 The TELUS Business Strategy 5-7 5.2.1 TELUS Will Be a Wholesale Provider 5-7 5.3 Service Offering 5-8 5.3.1 Wholesale ISP Service 5-8 5.3.2 Proposed Discounts 5-9 5.4 Client Service & Support 5-10 5.4.1 The TELUS Line-of-Site Confirmation Service System 5-10 5.4.2 Market Development Assistance for Multi-unit Residences 5-11 5.4.3 Field Service 5-11 5.4.4 Interconnection Engineering & Support 5-11 5.4.5 Co-Branding Strategy 5-11 5.5 Network Roll-Out 5-12 5.5.1 Market Projections and Forecasts 5-15 Public Version Page-v 2500 MHz MCS License Application Table of Contents 5.5.2 Market Research Summary 5-15 5.5.3 The ISP (Wholesale) Market 5-17 5.5.4 The Current and Potential end-user Market 5-19 5.6 Projected Telus Market Share 5-23 5.7 Human Resource Strategy 5-24 5.8 Five Year Business Plan Financial Summary 5-24 Attachment 1: Angus Reid Market Research 5-A1.1 Attachment 2: Sensitivities and Risks 5-A2.1 6. Technology Strategy 6-1 6.1 Third Party ISP Access to the MCS Network 6-1 6.2 A Mosaic of ISP access solutions 6-4 6.3 TELUS Experience with MCS 6-5 6.3.1The WIND Trial 6-5 6.3.2 The WHIP Trial 6-6 6.4 Technology Approach 6-8 6.5 Network Infrastructure Design 6-9 6.5.1Typical Base Station Configuration 6-11 6.5.2 Technical Requirements for the Network 6-12 6.5.3 Customer Premise Equipment 6-13 6.5.4 Commercial Availability of Equipment 6-18 6.6 Commercializing a Service with Non-Ubiquitous Coverage 6-19 6.6.1 Integrated Operational Support Systems and Coverage 6-20 6.6.2 Training 6-21 6.7 System Capacity and Network Sizing 6-21 6.7.1 Addition of New Subscribers to the MCS System 6-22 6.7.2 Radio Site Subscriber Capacity 6-22 Appendix C: Glossary of Acronyms Appendix D: Technical Trials Public Version Page-vi 2500 MHz MCS License Application Table of Contents Volume III Learning Plan LP-1 Alberta Learning Plan LP-2 Learning Plan Overview LP-3 Learning Plan Objective LP-3 Learning Plan Funding LP-4 TELUS Learning Plan Advantages LP-6 Learning Plan Criteria LP-8 Summary of TELUS Education Initiatives LP-10 Public Version Page-vii 2500 MHz MCS License Application Section 1 1 Executive Summary In Canada Gazette Notice No. DGRB-006-99 “Multipoint Communications Systems in the 2500 MHz Range, Policy and Licensing Procedures” (the “Notice”) Industry Canada sets out its policy and licensing measures for the development of MCS at 2500 MHz and calls for applications from interested parties.
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