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Reply Comments of Cogeco Cable Inc FINAL 6 April 2011

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Reply Comments of Cogeco Cable Inc FINAL 6 April 2011 April 6, 2011 BY E-MAIL and REGULAR MAIL Manager, Mobile Technology and Services DGEPS Industry Canada 300 Slater Street Ottawa, Ontario K1A 0C8 e-mail: [email protected] Reply Comments Re : Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum SMSE-018-10 ____________________________________________________________________ Dear Sir/Madam: Cogeco Cable Inc. (“Cogeco”) is pleased to submit the attached reply comments in response to Canada Gazette Notice, Part 1, SMSE-018-10. We thank you for the opportunity to provide comments and remain available to answer any questions you may have regarding our submission. Yours very truly, Cogeco Cable Inc. ___________________________ Vice-President, Corporate Affairs YM/lde encl. 1 Cogeco Cable Inc . 5 Place Ville Marie Suite 1700 Montréal, Québec Tel : 514·764·4700 H3B 0B3 Fax : 514·874·0776 Canada Gazette Notice No. SMSE-018-10 Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum Published in the Canada Gazette , Part 1 dated 30 November 2010 Reply Comments of Cogeco Cable Inc. 6 April 2011 Table of Contents 1 Introduction ................................................................................................................. 1 2 Comments ................................................................................................................... 2 2.1 Need of Additional Mobile Spectrum ................................................................. 2 2.1.1 Increased Mobile Data Usage ..................................................................... 2 2.1.2 More Spectrum Required ............................................................................ 3 2.2 Tier Sizes ............................................................................................................ 5 2.2.1 High Cost of Spectrum ................................................................................ 5 2.2.2 Necessity for Smaller Tier Sizes ................................................................. 6 2.2.3 Ensuring Entry for New, Regional Players ................................................. 7 2.3 State of Competition ........................................................................................... 8 2.3.1 Effective Measures to Stimulate Competitive Entry .................................. 9 2.3.2 Foreign Ownership in Canadian Telecommunications ............................. 10 2.3.3 Liberalization of Foreign Ownership Restrictions Not Sufficient ............ 12 2.4 Measures to Promote Competition .................................................................... 14 2.4.1 Spectrum Holdings in Canada .................................................................. 15 2.4.2 Measures to Mitigate Spectrum Consolidation ......................................... 16 2.4.3 Other Measures to Promote Competition ................................................. 18 3 Conclusion ................................................................................................................ 20 i 1 Introduction 1. As the second largest cable system operator respectively in the Provinces of Ontario and Québec, Cogeco Cable Inc. (“Cogeco”), a cable telecommunications company, owns and operates wireline broadband telecommunications facilities and provides a wide range of Internet, voice, data, video and related services to both residential and business customers. 2. Cogeco has approximately 2,300 full time equivalent employees in Canada, providing valuable jobs in both Ontario and Québec in the key area of information and communications technologies, and its activities contribute directly and significantly to Canada’s digital economy. 3. Cogeco’s subsidiary Cogeco Data Services provides to its commercial customers in the Greater Toronto Area data networking, e-business applications, video conferencing, hosting services, Ethernet, private line, VOIP, HSI access, data storage, data security, co-location services and other advanced communications solutions. 4. Cogeco reiterates that it does not hold a market share in any of the relevant markets and services which would allow it to exercise any market power. 5. Most significantly, Cogeco currently has no spectrum holdings relevant to the provision of consumer communications services. 6. With this context, Cogeco is pleased to provide the following reply comments in response to Canada Gazette Notice SMSE-018-10 Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum. Failure by Cogeco to address any assertions or arguments put forward by other parties should not be construed by the Department as acceptance or agreement on the part of Cogeco. 1 2 Reply Comments 7. Cogeco will provide specific reply comments related to several of the questions and/or issues posed by Industry Canada in the Gazette Notice. Cogeco has reproduced the exact wording of each question as it appears in the Gazette Notice in order to facilitate the analysis of its comments in relation to those filed by other parties. 2.1 Need of Additional Mobile Spectrum Gazette Notice Section 4-1: What is the general need for additional commercial mobile spectrum at this time and what do you anticipate the future needs to be? 8. Virtually all parties agree with Cogeco’s initial comments that there is a general need for additional Mobile Spectrum in Canada, driven largely by greater adoption rates of mobile broadband devices such as smartphones, USB data sticks and tablet computers. 2.1.1 Increased Mobile Data Usage 9. A number of commentators noted the significant increase in mobile data consumption by Canadian wireless customers, due in large part to the greater adoption of smartphones and tablet computers. For example, Bell Mobility noted in its comments 1, “Deloitte Canada released its Technology, Media & Telecommunications (TMT) Predictions identifying the ten most significant developments that would impact on Canadian businesses in 2011. The number one development, identified by Deloitte, was that in 2011 Canadians would purchase more smartphones and tablets than [desktop] personal computers”. 1 Comments of Bell Mobility Inc., February 28, 2011, Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum , at Paragraph 17. 2 10. Bell and Telus also noted the rapid increase in the amount of data being consumed by its own mobile customers. Bell stated that, between 2008 and 2010, the average data usage for its smartphone users had climbed from 15 Mbs per month, to over 300 Mbs per month, an increase of 1900%. 2 Similarly, Telus stated that total mobile data usage by its customers grew by 449% during the same period. 3 Furthermore, both carriers state that this data usage will only increase in the short term, as smartphone adoption rates increase in Canada, and Canadians migrate to more data-intensive devices, such as Tablet computers. Rogers went on further, citing statistics indicating that mobile data traffic is expected to grow by 95% between 2010 and 2015 on a compounded annual basis, driven by the introduction, and adoption by consumers, of smartphones, tablets and other devices, as well as the consumption by consumers of higher bandwidth applications, such as mobile video. 4 Finally, with all three incumbent wireless carriers now offering services over a HSPA+ network, as well as new entrant wireless carriers providing services over similarly advanced networks, the demand for data-intensive applications and services will likely increase rapidly. 2.1.2 More Spectrum Required 11. Cogeco notes that many other parties 5 have acknowledged the initiative in the United States to make available an additional 500 MHz of spectrum. Rogers stated in its comments that Industry Canada had engaged a third party to conduct research into Canada’s spectrum needs, including mobile spectrum, for the next five years. 6 Cogeco is encouraged by this effort on the part of Industry Canada, and further, 2 Ibid, para. E7. 3 Comments of Telus Communications Inc., February 28, 2011, Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum, para. 79. 4 Comments of Rogers Communications Inc., February 28, 2011, Consultation on a Policy and Technical Framework for the 700 MHz Band and Aspects Related to Commercial Mobile Spectrum, para. 22. 5 For example, Bell Mobility at paragraph 24, Rogers at paragraph 24, TELUS at paragraph 82, Mobilicity at paragraph 45. 6 Ibid, para. 23. 3 endorses a program that would see Canada maintain parity with the US in allocating the majority of new spectrum for mobile broadband applications and accelerating the release of spectrum corresponding to the plans of our trading partners. 12. Canada must ensure that our citizens have access to the latest devices and applications; to provide opportunities for Canadian innovators to develop products and services that can be deployed in global markets; and, to ensure the interoperability of devices and services when visitors to Canada bring their devices into our country. 4 2.2 Tier Sizes Gazette Notice Section 5-12 - The Department seeks comments on whether the auction of 700 MHz commercial spectrum should be based on uniform tier sizes across all spectrum blocks, or a mixture of tier sizes. Gazette Notice Section 5-13 – Based on your answer above, what tier size(s) should be adopted?
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