The government is set for another round of auctioning, selling off licenses for blocks of spectrum to the telecommunications companies serving customers across Canada. With 11 companies set to bid in Tuesday’s auction, we’ve been watching to see what this might mean for the consumers and businesses that rely on wireless technologies to communicate.
Candice So of IT Business.ca caught up with Howard Solomon, editor of IT World Canada.com, to find out what kind of fallout we can expect from the upcoming auction. Here’s the rundown of what we discussed. For more, watch the video above.
Candice So: It’s been five years since the last spectrum auction. What will be different about this auction, versus the one held in 2008?
Howard Solomon: There are fewer bidders, and fewer with big money – in 2008, Shaw Communications was there. Not this time. Combined with different rules it will mean a shorter auction – industry experts think about four weeks and maybe less. And it won’t pull in the $4 billion Ottawa got last time.
CS: How will the outcome of this auction affect Canadian wireless customers?
HS: Technically, once carriers start using 700 MHz spectrum and users have handsets that can take advantage of it, reception on those phones inside buildings will be better than they get now.
But the real question is how much spectrum will Wind Mobile get. Outside of Bell, Rogers and Telus, Wind is the only carrier that has ambition to create a national network. If it can’t get more spectrum in several provinces that will affect competition – and prices.
CS: Traditionally, most of the spectrum has been carved up between the Big Three – Rogers, Telus, and Bell. Should we expect to see that again after this auction?
HS: Yes. Although they have caps on how much they can buy, they can afford to buy across the country.
CS: People living in rural areas have had some concerns about how the spectrum auction has been set up. They say bigger companies won’t work to bring broadband access to rural areas. How has Industry Canada addressed those concerns?
HS: There are rules saying winning bidders can’t spend all of their efforts deploying 700 MHz spectrum in cities. They have between five and seven years, depending on the carrier, to deploy most of it. Otherwise they lose it.
CS: John Bitove seems like an interesting person to watch. He’s the entrepreneur originally behind Mobilicity and is now bidding under a new name, Feenix Wireless Inc. What kind of impact do you think he will have on the auction?
HS: His play will be interesting. Mobilicity is in protection from creditors as we do this, so he’s bidding under a separate company wholly owned by himself. One question is, is he hoping Mobilicity will be straightened out, so then it can buy the spectrum he gets? Note that he is trying to sell Mobilicity to Telus. So far Ottawa has said no.
CS: When will the results of the auction take effect?
HS: Unlike the 2008 auction, we won’t officially know when this one ends until Industry Canada publishes the list of winners – and that could be up to five days after the auction ends.