REVIEW OF THE CANADIAN 600 MHZ SPECTRUM AUCTION

DESCRIPTION OF REQUIREMENT:

Contract Duration: Period commencing from date of Contract award to March 31, 2020.

Number of Contracts: 1

The work is currently not being performed by a contractor.

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. ISED, 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 ISED’s management of this resource.

Where the demand for spectrum is not expected to exceed the supply, ISED 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 ISED 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 released its Decision on Repurposing the 600 MHz Band in August 2015, to jointly repurpose the 600 MHz band for fixed and commercial mobile use, in collaboration with the U.S. As determined through the U.S. incentive auction, 84 MHz of spectrum was repurposed, freeing up to 70 MHz of spectrum for commercial mobile services. Existing Canadian broadcasters will be transitioned to lower parts of the band, and subsequently, a spectrum auction was held to award spectrum licences for mobile use. In early 2016, ISED ran a competitive tendering process and subsequently contracted Power Auctions LLC of Washington DC, to provide auction consulting and hosting services for the 600 MHz spectrum auction. In August 2017, ISED initiated a consultation on a licensing framework for the auction of spectrum licences in the band 614-698 MHz (600 MHz band) and in March 2018 the Department published the Technical, Policy and Licensing Framework for Spectrum in the 600 MHz Band (hereinafter called the Framework). A combinatorial clock auction format with the activity rule based on the Generalized Axiom of Revealed Preference (GARP) was used to auction the 600 MHz band.

The 600 MHz spectrum auction began on March 12, 2019, and ended on April 4, 2019, after 54 rounds, which took place over 18 business days. Twelve companies participated in the auction, and 104 out of 112 licences were awarded to nine participants. There were 64 open and 48 set-aside licences. The auction generated $3.47 billion in revenue.

A total of 70 MHz of radio spectrum was auctioned in 16 service areas: 13 Tier 2 service areas and 3 Tier 4 service areas in the North, covering the entire country. In each service area, there were 7 paired blocks of 10 MHz each (Blocks: A, B, C, D, E, F and G). There were two stages in the auction: the Allocation Stage and the Assignment stage. During the Allocation Stage all blocks were auctioned as generic blocks, and three generic blocks were set-aside for eligible bidders in each service area. The assignment of specific frequencies was conducted in the Assignment Stage of the auction.

Eligibility to bid on set-aside spectrum was limited to those registered with the CRTC as facilities-based providers, that were not national service providers and that were actively providing commercial telecommunications services to the general public in the relevant Tier2 service area, effective as of the application date to participate in the 600 MHz auction.

ISED published the policy and licensing frameworks as well as other related documents for the 600 MHz auction on its website: https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf11331.html 

Detailed bid data of the 600 MHz auction and results are available from ISED’s public auction website: https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf11331.html.

PROJECT REQUIREMENTS/OBJECTIVES

The Department is seeking an independent Contractor to review the 600 MHz auction. The Contractor is required to provide a comprehensive evaluation of the auction design and its associated rules, the pro-competitive measure, the bidding behavior of the bidders and the final outcome of the auction. The audience of the evaluation is ISED.

Inquiries:

All enquiries regarding this bid solicitation must be submitted in writing to the Contracting Authority named below as early as possible within the solicitation period to allow sufficient time to provide a response. All enquiries must be submitted in writing no later than five (5) working days before the bid closing date. Enquiries received after that time may not be answered.

The Contracting Authority is:

Name: Chantal Lafleur

Title: Senior Contracts and Procurement Advisor

Email address: chantal.lafleur2@canada.ca