Microcell Telecommunications Inc. (“Microcell”) in Response to Canada Gazette Notice DGTP-003-02

June 10, 2002 BY E-MAIL: [email protected] and REGULAR MAIL Mr. Michael Helm Director General Telecommunications Policy Industry Canada 300 Slater Street Ottawa, Ontario K1A 0C8 Re : Canada Gazette Notice DGTP-003-02, "Consultation on a Request to Modify the Treatment of Enhanced Specialized Mobile Radio Systems under the Mobile Spectrum Cap Policy" Dear Mr. Helm: You will find attached the comments of Microcell Telecommunications Inc. (“Microcell”) in response to Canada Gazette Notice DGTP-003-02. As discussed further in the comments, Microcell cannot accept Telus’ proposal to modify treatment of Enhanced Specialized Mobile Radio (“ESMR”) spectrum under the spectrum cap policy. To adopt the Telus request, as proposed, would bestow an enormous preference on Telus, it would work to the detriment of other cellular and PCS operators, and it would run contrary to sound public policy. To effect proper overall policy, the Department needs to initiate and complete a number of other reviews either as part of, or prior to, consideration of the Telus request. These involve reviews into foreign ownership restrictions, the current licence fee regime for mobile services, the ability to disaggregate mobile spectrum holdings, and more generally the validity of current spectrum cap policy. We appreciate the opportunity to provide our views to the Department, and look forward to filing reply comments on June 25. Yours very truly, Microcell Telecommunications Inc. (SGD) Dean Proctor _________________________ Dean Proctor Vice-President, Regulatory Affairs /des enc. Microcell Telecommunications Inc. Page 2 Comments in Response to DGTP-003-02 Comments in Response to Canada Gazette Notice DGTP-003-02 Consultation on a Request to Modify the Treatment of Enhanced Specialized Mobile Radio Systems under the Mobile Spectrum Cap Policy Microcell Telecommunications Inc. June 10, 2002 Microcell Telecommunications Inc. Page 1. Comments in Response to DGTP-003-002 1.0 Introduction These are the comments of Microcell Telecommunications Inc. (“Microcell”), filed in response to Canada Gazette Notice DGTP-003-02, “Consultation on a Request to Modify the Treatment of Enhanced Specialized Mobile Radio Systems under the Mobile Spectrum Cap Policy” (the “Consultation Notice”). The Consultation Notice seeks comment on a request submitted to Industry Canada on November 27, 2001 by TELUS Mobility (“Telus”), asking for a modification of the mobile spectrum cap policy with respect to spectrum used by Enhanced Specialized Mobile Radio (“ESMR”) systems. 2.0 Summary of Conclusions Industry Canada must recognize that the Telus request is not a simple technical adjustment to the spectrum cap rules. It would bring about a profound change to spectrum cap policy which, if adopted as proposed, would have a highly prejudicial impact on the competitive position of other industry players. For the reasons expanded upon in these comments, Microcell unequivocally believes the Department must reject the Telus request. No amount of technical rationale or verbal gymnastics can hide the simple facts: i) The Telus request is, quite simply, one for Telus to leverage – with official sanction – their incumbent status and “first-mover advantage” in order to acquire mobile spectrum beyond the 55 MHz spectrum cap. ii) The Telus request, as proposed, would allow Telus to exceed the 55 MHz spectrum cap in the acquisition of additional spectrum for advanced mobile systems, while constraining other operators from doing the same. This would bestow an undue preference on Telus, and would clearly not amount to sound policy. iii) The Telus request necessarily entails a review of the principle and role of the mobile spectrum cap policy. As such, the request deals with matters that affect all mobile carriers and all mobile spectrum, not just Telus, and not just ESMR spectrum. iv) Other more pressing proceedings affecting related policy issues have been announced by and recommended to Industry Canada, but not yet initiated. These include matters such as: spectrum licence fees; cellular and PCS licence conditions, including spectrum aggregation; and foreign ownership Microcell Telecommunications Inc. Page 2. Comments in Response to DGTP-003-002 restrictions. As each of these matters is integrally tied to the Telus request, they should be reviewed before considering the Telus request. v) Microcell would not oppose a complete lifting of the spectrum cap for all players. However, coming when and as it does, Microcell fundamentally opposes the Telus request, which would confer an enormous preference upon Telus, while prejudicially maintaining significant constraints on Telus’ principal competitors. 3.0 Ad Hoc Policymaking and Competitive Equity Don’t Mix The Department suggests the intent behind the Consultation Notice is not to launch into “… a review of the principle and role of the mobile spectrum cap policy”. With all respect to Industry Canada, Microcell profoundly disagrees with such an assessment. At the core of the Telus request is, in fact, a proposed change to the very substance of the mobile spectrum cap policy. And, through a modification of the treatment of ESMR spectrum as proposed, Telus would be conferred an enormous benefit unavailable to competitors, specifically the ability to acquire spectrum in excess of the 55 MHz cap, which spectrum can be used for advanced mobile systems. Special treatment vis-à-vis spectrum caps would have a negative and unfair impact on Telus’ competitors, including Microcell. As such, the process initiated by the Consultation Notice is not dealing with simple technical differences between how slices of the mobile spectrum band have been allocated in the past. It is a review into competitive equity, into “one-off” advantages issued on an ad hoc basis, and into the very principle and role of the mobile spectrum cap policy. - The Telus request Telus has attempted to argue that spectrum used for ESMR systems is not equivalent to cellular and PCS spectrum, and therefore need not be subject to the same mobile spectrum cap rules. In their November 2001 letter, Telus argues this to be the case because: “Even though ESMR networks use digital technology with a cellular deployment, access to ESMR spectrum and its properties, namely narrowband non-contiguous channels, make this spectrum different from PCS and cellular spectrum.” Telus further claims support for their argument comes from the policy of the U.S. Federal Communications Commission (“FCC”), and recommends: Microcell Telecommunications Inc. Page 3. Comments in Response to DGTP-003-002 “… that the Department adopt the FCC approach to attribute the amount of ESMR spectrum deployed up to a maximum of 10 MHz under the cap regardless of the amount of ESMR spectrum deployed.” Telus focuses on one selective snippet from the overall FCC spectrum cap policy. The policy as a whole, and the American industry structure which both influenced and was influenced by the policy, are ignored. - Selective snippets do not a whole policy make Given that Telus has supposedly based support for their request on American spectrum cap policy, Microcell’s comments make several references both to FCC policy, and to the U.S. industry structure which is an integral part of that policy. When setting public policy for Canada, it is neither wise nor appropriate for Industry Canada to hone in on one or two aspects of U.S. spectrum cap policy – as the Telus request would have the Department do – and ignore the rest of the policy and the context in which it was made. - The Telus request cannot be dealt with in isolation from other, more pressing policy reviews that are still pending The Consultation Notice was issued by Industry Canada despite there being other outstanding public policy reviews which affect the whole industry. In Microcell’s view, the policy implications of the Telus request, as explored below, are such that the Department should not contemplate granting Telus’ request unless and until it has completed its review of related matters still outstanding. Noteworthy in this respect are: i) the Department’s still pending review into spectrum licence fees and the licence conditions applicable to PCS and cellular mobile operators, which affect matters such as spectrum disaggregation. Despite the Department’s March 2001 announcement of its intention to undertake a review, nothing has happened since. This is important, because the Department’s eventual policies on both licence fees and licence conditions directly impact how the Department should deal with Telus’ ESMR request. ii) On another matter, the need to revisit, on a priority basis, the current foreign ownership restrictions, was raised over one year ago by the Broadband Task Force struck by Industry Canada. This recommendation has still not been acted upon. The review of ownership restrictions is important because the Microcell Telecommunications Inc. Page 4. Comments in Response to DGTP-003-002 competitive structure of the industry will undoubtedly be affected, whatever the eventual outcome of the review. iii) The Telus request for anomalous treatment of its ESMR spectrum will also have significant implications for competition between mobile telecommunications carriers. For this reason, the Telus request must be dealt with as part of an open review into the spectrum cap policy as a whole. We urge the Department not to accede to Telus’ request and give in to the temptation to make important policy decisions piecemeal, without considering the other, necessarily related, pieces of the

Load more