Spectrum Auction Services for the 600 MHz Auction

1.0 Purpose

Industry Canada (IC) or the Department requires spectrum auction services for the upcoming 600 MHz auction. The services will be required for a period commencing from date of contract award to December 31, 2022.

2.0 Title of Project

Spectrum Auction Services for the 600 MHz Auction

3.0 Background

Radio frequency spectrum is a finite public resource. Both private users and wireless communications service providers require spectrum for a diverse range of uses. IC, through the Department of Industry Act, the Radiocommunication Act and the Radiocommunication Regulations, with due regard to the objectives of the Telecommunications Act is responsible for spectrum management in Canada. The Spectrum Management Program operates under the guidance of the Spectrum Policy Framework for Canada, which provides a single policy objective and a set of guidelines to guide IC’s management of this resource.

Where the demand for spectrum is not expected to exceed the supply, IC generally uses a first-come, first-served licensing process to award spectrum licences. In instances where the demand for spectrum is expected to exceed supply, a competitive licensing process, such as an auction, is generally used.

The Framework for Spectrum Auctions in Canada describes the general approaches that IC will use to auction spectrum licences. As indicated in the Spectrum Policy Framework for Canada, the Department has adopted a policy objective to maximize the economic and social benefits that Canadians derive from the use of the radio frequency spectrum resource.

The Department has assigned spectrum licences in the following auction processes, details of which can be found at the following link: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf01714.html.

(1) Auction of the 24 and 38 GHz Frequency Bands

(2) Auction of Additional PCS Spectrum in the 2 GHz Frequency Range

(3) Auction of the 2300 MHz and 3500 MHz Frequency Bands

(4) Two Phase Residual Licence Auction in the 2300 MHz and 3500 MHz Frequency Bands

(5) Auction for Advanced Wireless Services and other spectrum in the 2 GHz range

(6) Auction of the 849-851 MHz and 894-896 MHz Frequency Bands for Air-Ground Services

(7) Auction of Residual Spectrum Licences in the 2300 MHz and 3500 MHz Bands

(8) Auction of Spectrum Licences for Mobile Broadband Services in the 700 MHz Band

(9) Auction of Spectrum Licences for Advanced Wireless Services in the Bands 1755- 1780 MHz and 2155-2180 MHz (AWS-3)

(10) Auction of Spectrum Licences for Broadband Radio Service in the Band

2500-2690 MHz

(11) Auction of Residual Spectrum Licences in the 700 MHz and AWS-3 Bands

Five of these auctions were simultaneous multiple round ascending (SMRA) auctions run over the Internet using the Auction Management System (AMS) software developed in the 1990's. Bidders were able to participate remotely from their premises using a secure Internet connection. Auction numbers 6, 7, 9 and 11 were conducted using a second-price sealed-bid format. Auction numbers 8 and 10 were conducted over the Internet using a combinatorial clock auction (CCA) format.

During some of these auction processes, IC enlisted the help of external auction consultants to assist and provide advice to IC staff with respect to policies, rules and procedures of the auction, to assist in monitoring the auction event as it took place, and to complete a post-auction evaluation. For auction numbers 8 and 10, auction consultants hosted the auctions in Canada.

On December 18, 2014, the Department’s Spectrum, Information Technologies and Telecommunications (SITT) Sector published a consultation paper seeking input on a proposal to repurpose spectrum in the 600 MHz band to mobile use while enabling virtually all of Canada’s over-the-air television broadcasters to continue to have access to the spectrum they need to remain on air. The consultation was undertaken to determine whether Canada would participate in a joint repurposing initiative along with the United States. The decision has now been made to proceed with the initiative.

After the amount of spectrum to be repurposed has been determined by the US incentive auction (started on March 29, 2016), the Department will consult on the format and rules that would apply to the mobile spectrum licences. Consistent with the approach taken for the 700 MHz and 2500 MHz auctions that were of similar levels of complexity and importance, the services of a Contractor will be required to provide auction advice which will form part of the policy and technical licensing rules for the 600 MHz auction. The Contractor will also be responsible for the development, testing and implementation of the auction system as well as being involved in the operation of the auction.

4.0 Objective

IC requires the services of a Contractor for the provision of spectrum auction services for a successful 600 MHz auction. The success of the 600 MHz auction is defined as: the provision of world-class spectrum auction advice; flawless auction execution; and participants that are generally satisfied that they were able to participate in the auction to the full extent set out in the auction policy and rules.

5.0 Scope of Work

The following outlines the Scope of Work to be carried out by the Contractor.

5.1 Phase 1: Consulting Services for Spectrum Auction Design

The Contractor will provide consulting services for the development of consultation(s), decisions and responses to any subsequent questions or requests for clarification related to 600 MHz spectrum licensing, leading to specific auction policies, rules, attributes and design to be set out by the Minister of IC, in the final auction policy, technical, and licensing decision(s).

5.2 Phase 2: Development, Testing, Implementation and Operation of a Spectrum Auction over the Internet

The Contractor will develop, test, implement and operate an auction system for Canada’s 600 MHz auction as set out in the final auction policy, technical, and licensing decision(s).