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UNCLAS SECTION 01 OF 06 OTTAWA 000617 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECPS CA
SUBJECT: SPECTRUM MANAGEMENT POLICIES: CANADA 
 
REF: SECSTATE 225777 
 
¶1.  The GOC's response to the questions posed in SECSTATE 
225777 has been sent as an email attachment, with formatting 
to make the GOC points clearer, to Mr. Frederick Matos, 
Office of Spectrum Management, National Telecommunications 
and Information Administration.  We recommend that others 
interested in the GOC response view the formatted document 
(email madere@state.gov to request formatted version.) 
 
     Question 1:  Responsible Authority: Which organizations 
are involved in spectrum management in your country?  To whom 
are they responsible -  executive branch, legislative branch, 
military - or are they autonomous? 
 
     Organization involved in spectrum management: 
------------------------- 
In Canada, the federal government's Department of Industry 
(Industry Canada (IC)) is responsible for all aspects of 
spectrum management.  The powers of the Minister of Industry 
with regard to spectrum management are mainly set out in the 
following Acts and applicable regulations: the Department of 
Industry Act, the Radiocommunication Act and the 
Radiocommunication Regulations, and the Telecommunications 
Act and the Canadian Telecommunications Common Carrier and 
Ownership and Control Regulations.  The Minister of Industry 
also acquires a lead role with regard to electronic 
communications under the Emergency Communications Act. Within 
Industry Canada, the following branches are involved in 
delivering spectrum management activities: 
--the Radiocommunications and Broadcasting Regulatory Branch 
(DGRB), (headquarter organization) is responsible for 
licensing, fee setting, regulatory policy, spectrum auctions, 
spectrum management operations, regional relationships and 
broadcast certification; 
--the Spectrum Engineering Branch (DGSE) (headquarter 
organization) is responsible for the establishment of the 
technical and engineering basis for the provision and use of 
the radio frequency spectrum and telecommunication equipment 
in Canada; 
--the Telecommunications Policy Branch (DGTP) (headquarter 
organization) is responsible for developing policies dealing 
with radio frequency spectrum usage and services in 
accordance with the objectives of telecommunications as set 
out in Section 7 of the Telecommunications Act. 
--Regional and District Offices across the following five 
regions covering the whole of Canada: Atlantic, Quebec, 
Ontario, Prairies/Northern, and Pacific, are involved in 
making a full range of spectrum-related services available to 
a diverse client base. 
 
     Other organizations involved in spectrum management: 
------------------------- 
--  The Canadian Radio-television and Telecommunications 
Commission (CRTC) is an independent federal agency 
(regulatory body) governed by the Broadcasting Act and the 
Telecommunications Act.  The CRTC assigns broadcasting 
licenses (e.g., for radio and television) under the 
Broadcasting Act following a consultation with Industry 
Canada which issues the concomitant broadcasting certificates 
dealing with the technical aspects of the assignment (e.g., 
antenna specifications, output power limits) under the 
Radiocommunication Act.  Under the Telecommunications Act, 
the CRTC also oversees the operation of telecommunications 
carriers and promotes the telecommunications objectives that 
are set out in Section 7 of the Act. 
-- The Department of National Defense (DND) is the federal 
government department having the overall responsibility for 
the defense requirements of Canada.  Industry Canada has an 
agreement with DND whereby DND is authorized to centrally 
manage the allocation and use of the 225-400 MHz frequency 
Qmanage the allocation and use of the 225-400 MHz frequency 
band.  DND must obtain Industry Canada approval for the use 
of all radiocommunications facilities and must pay license 
fees.  DND uses a large number of shared bands with the 
private sector. 
--  The Department of Transport (TC) is the federal 
government department responsible for maintaining a safe and 
secure Canadian transportation system.  Among its many 
activities, TC carries out certain frequency coordination 
activities, e.g., instances involving aeronautical 
obstruction clearances under the Air Regulations. 
--  NAV CANADA (NAVCAN) is a not-for-profit private 
corporation established to ensure a safe and reliable civil 
air navigations service.  Industry Canada and NAVCAN entered 
into an agreement authorizing NAVCAN to carry out certain 
frequency management requirements within certain radio bands 
allocated for aeronautical purposes, e.g., frequency 
coordination and engineering activities such as compatibility 
studies. 
 
     Accountability of organizations involved in spectrum 
management 
 
OTTAWA 00000617  002 OF 006 
 
 
------------------------- 
Canada is an independent sovereign democracy governed by a 
constitution which defines a federal system of government; 
the powers and limits of powers that can be exercised by the 
different levels of government (i.e., federal and 
provincial); and the powers of the executive, legislative and 
judicial branches of government.  Canada is governed in 
accordance to a parliamentary system.  The following are the 
main branches of Canada's Parliamentary System: the Executive 
Branch consisting of the Prime Minister and Cabinet; the 
Legislative Branch consisting of the Senate and House of 
Commons; and the Judicial Branch consisting of the Supreme 
Court of Canada, the Federal Court of Canada and the Superior 
courts in the provinces. 
 
     Executive Branch:  The Prime Minister and the Cabinet 
form the Executive Branch of Parliament.  The Executive 
Branch carries out actions authorized by Parliament and 
governs the country.  Most Cabinet Ministers are responsible 
for the administration of one or more government departments 
and report to Parliament on their departments' activities. 
The Governor in Council acts on advice of the Privy Council 
and is the formal executive body which gives legal effect to 
those decisions of Cabinet that are to have the force of law. 
 
 
     Within Canada's parliamentary system, the Minister of 
Industry is a Cabinet Minister of the Executive Branch and 
reports to Parliament on the activities of the Department. 
The Minister of Industry is responsible for Industry 
Portfolio initiatives which aim at fostering the creation and 
growth of a thriving and innovative economy.  As part of 
these initiatives, IC is responsible for various Marketplace 
Service Organizations including the Spectrum/Telecom Program. 
 
¶2.   Assignment Process:  Please describe the mechanism(s) 
your country uses to assign spectrum (for example, auctions, 
lotteries, comparative hearings).  To what services and/or 
bands are such mechanisms applied? 
 
     The following describes the various assignment 
mechanisms used in Canada and the service and/or bands to 
which the mechanisms apply: 
 
     First-Come, First-Served (FCFS) 
------------------------- 
The FCFS assignment process accounts for more than 95% of the 
radio licenses currently issued. The FCFS approach is used in 
instances where there is sufficient spectrum to meet the 
demand in a given frequency band and where there is no 
additional measure required to advance particular 
telecommunications policy objectives.  The FCFS assignment 
process is not automatic and in certain circumstances due to 
substantial spectrum demand, IC may determine that a 
competitive licensing process is the preferred assignment 
mechanism. 
 
     The FCFS generally applies to: 
--most point-to-point microwave systems and conventional land 
mobile systems where a --modest amount of spectrum is 
required; 
--individual land mobile frequency assignments; 
--some point-to-multipoint applications; 
--all satellite earth stations. 
 
     Competitive Licensing Processes 
------------------------- 
Competitive licensing processes (both comparative review and 
auctioning) have been used to license the following spectrum 
resources: 
--most frequency bands for Multipoint Communications Systems 
(MCS) in urban areas; 
--spectrum for public mobile telephone service; 
--spectrum for broadband wireless access applications; 
--fixed-satellite orbital positions. 
 
     Comparative Review 
------------------------- 
A comparative review process is used when the demand for 
spectrum is expected to exceed the supply or where there is a 
Qspectrum is expected to exceed the supply or where there is a 
need to pursue certain telecommunications policy objectives. 
Comparative review processes were previously used to license 
Local Multipoint Communications Systems (LMCS) in the 28 GHz 
range, Multipoint Communications Systems at 2500 MHz and to 
authorize the development of the Canadian satellite orbital 
position at 118.7 degrees orbital position. 
 
     Auction 
------------------------- 
An auction is used when the demand for spectrum is expected 
to exceed the supply; when government policy objectives can 
be fully met through the various means available (e.g. 
 
OTTAWA 00000617  003 OF 006 
 
 
measures such as regulations, conditions of license, 
utilization policies, standards, and auction rules); and 
where reliance on market forces to select licensees is deemed 
to be in the public interest. 
 
     To date, the following 4 auctions have been held: 
--Wireless Broadband Communications in the 24 and 38 GHz bands 
--Additional Personal Communications Services (PCS) spectrum 
in the 2 GHz frequency range 
--2300 MHz (Wireless Communications Services - WCS) and 3500 
MHz (Fixed Wireless Access - FWA) 
--2nd Phase - 2300 MHz and 3500 MHz 
 
 
¶3.  Licensing Regime:  Please describe your spectrum 
licensing regime.  Are licenses awarded for the provision of 
a specific service, or a specified technology or standard? 
Are licenses subject to renewal? 
 
     Industry Canada issues 2 types of licenses:  radio 
licenses and spectrum licenses. 
 
     Radio Licenses 
------------------------- 
 
     Radio licenses are awarded to users, service providers 
or carriers, based on the type of station used and type of 
radio service to be provided.  In certain cases, the amount 
of radio frequency spectrum required, or the number of 
frequencies assigned, and the location of operations are also 
taken into account. 
 
     For the most part, radio licenses expire on March 31 of 
each year and are renewable for a period of 12 months.  Radio 
licenses issued for less than 30 days expire on the day 
indicated on the licenses and are not renewable. 
 
     Spectrum Licenses 
------------------------- 
Spectrum licenses are awarded based on the utilization of 
specified radio frequencies within a defined geographic area. 
 With spectrum licenses, IC generally provides licensees with 
the maximum possible flexibility in determining the services 
they will offer and the technologies they will employ. 
 
     i)  Spectrum licenses assigned by auction: 
 
     Spectrum licenses issued through auctioning are 
generally valid for a 10 year period with expectancy of 
renewal for a further 10 years.  (Spectrum licenses would not 
be renewed on the basis of a breach of license condition, a 
fundamental re-allocation of spectrum to a new service, or an 
overriding policy.) 
 
     ii)  Spectrum licenses that are not assigned by auction, 
but by other mechanisms: 
 
     With regard to spectrum licenses that are not assigned 
through auctioning, the licensing term is determined on a 
case-by-case basis.  For example, some point-to-multipoint 
frequencies providing local network distribution may be 
licensed on a FCFS basis. 
 
 
 
¶4.   Licensee Privileges:  What flexibility do licensees have 
(e.g., secondary markets) to transfer their spectrum rights 
to other parties?  May licensees aggregate licenses or 
subdivide them?  May licensees make all or part of their 
spectrum available to other entities based on geography or 
time?  May licensees accept payment in exchange for spectrum 
access? 
 
     Transfer of spectrum licenses assigned on the basis of 
an auction 
------------------------- 
The spectrum licensee may transfer its license(s) in whole or 
in part (divisibility), in both the bandwidth and geographic 
dimensions to a qualified recipient.  Generally, the area 
transferred may be no smaller than a single spectrum grid 
cell.  (Grid system: For purposes of measuring coverage area, 
a geographic grid has been developed to standardize the units 
of measurement for a system's coverage area.  A spectrum grid 
cell is an hexagonal figure with an area of 25 square 
kilometers.  The grid cells fit together in an interlocking 
pattern over the geography of Canada.) 
 
     Generally, no minimum limit will be imposed on the 
Q     Generally, no minimum limit will be imposed on the 
amount of spectrum that can be transferred in the bandwidth 
dimension.  However, limits may be required on the amount of 
spectrum that can be transferred in the spectrum dimension in 
order to respect international band channeling plans or other 
 
OTTAWA 00000617  004 OF 006 
 
 
policy needs. 
 
     The transferee will only receive a license term equal to 
that remaining on the original license, but will be eligible 
for the same license renewal provision granted to the 
original licensee. 
 
     Under certain circumstances, Industry Canada allows for 
the desegregation and divisibility of spectrum licenses. 
 
     Where desegregation of a spectrum license is being 
considered, a portion of the specified radio frequency block 
may only be transferred/returned and desegregated when the 
discrete spectrum portions may be divided, such that the 
resulting portions remain as assignable blocks of spectrum. 
Desegregation must be concluded in a manner which allows for 
the portion(s) of spectrum transferred/returned and remaining 
to respect the spectrum assignment plans as defined in the 
applicable policy or Standard Radio System Plan. 
 
     A notification of transfer is required by Industry 
Canada for all proposed license transfers including a 
declaration from all interested parties that the transfer is 
in compliance with the eligibility criteria and other 
conditions of license.   Licensees accept payments for 
transfers. 
 
     Transfer of spectrum licenses 
------------------------- 
The following conditions with regard to transferability 
generally apply in cases where a spectrum license is assigned 
through a licensing mechanism other than auctions.  In most 
cases, the spectrum licensee does not have the enhanced 
transferability and divisibility rights.  However, in view of 
the fact that one of Industry Canada's objectives is to have 
the spectrum fully utilized in the market place, an 
application may be made to the Minister to transfer spectrum 
licenses to a third party in circumstances where the 
objective is not met.  While the licensee (or trustee) cannot 
sell the licenses outright, consideration will be given to a 
request for transfer of the license where the license 
accompanies other business assets and is being used as part 
of a going concern. 
 
     Non-assignability of radio licenses 
------------------------- 
A radio license cannot be transferred or assigned without the 
authorization of the Minister. 
 
¶5.  Spectrum Fees:  What types of fees are imposed on 
spectrum users?  How are fees calculated?  Which, if any, 
spectrum users are exempt from fees? 
 
     Fees for spectrum licenses assigned through auctioning 
------------------------- 
Spectrum fees for licenses assigned through auctioning are 
established by competitive bidding. 
 
     Fees for spectrum licenses assigned through other 
mechanisms 
------------------------- 
Under the Department of Industry Act, the Minister may fix 
spectrum license fees in respect of the rights and privileges 
provided.  Common to all spectrum licenses is authorization 
by geographical area(s) and frequency(ies) or frequency 
block(s), rather than authority for the installation and 
operation of an individual radio apparatus.  Prior to fixing 
a fee, Industry Canada normally holds a public consultation 
with all interested parties and the general public to enable 
a review and discussion of the proposed fee.  License fees 
are based on spectrum management costs where resource rents 
do not exist.  When resource rents do exist, fees will ensure 
a fair economic return to the public in addition to 
recovering spectrum management costs. 
 
     In 2003, Industry Canada established spectrum fees for 
cellular or PCS spectrum usage as follows: 
--the fee rate of $0.03512361 per MHz per person over the 
geographic area of their spectrum license. 
--The minimum yearly fee for a spectrum license is set at 
Q--The minimum yearly fee for a spectrum license is set at 
$1,000.  This fee is charged on an annual basis and is 
payable in full by March 31 of each year. 
 
     Fees for radio licenses in respect of radio apparatus 
installed in a station and that authorize the use of certain 
frequencies:  Under the Radiocommunication Regulations, fees 
for radio licenses are set by the Governor in Council and are 
determined by the type of station licensed and the type of 
service used.  In certain cases, the amount of radio 
frequency spectrum required or number of frequencies assigned 
and the location of operations are also taken into account. 
 
 
OTTAWA 00000617  005 OF 006 
 
 
     The following are the various fees that may be 
applicable to a radio license: 
---an issuance fee (the initial issuance of a radio license) 
the issuance fee and the monthly fee (see below) are 
calculated from the month the license is issued to March 31 
---a monthly fee - for the continuance in force of a radio 
license until the radio license has expired 
--a renewal fee - the annual fee for the renewal of a radio 
license (before expiry on March 31 - and renewable for a 
period of 12 months) 
--a reinstatement fee - for the reinstatement of a radio 
license after the license has expired on March 31 (where the 
fee is paid during the period beginning on Apr. 1 and ending 
Apr. 30 of the following year; and where the fee is paid 
during the period beginning on May 1 and ending on Mar. 31 of 
the following year) 
--a short-term fee - for the issuance and continuance in 
force of a radio license for a term of not more than 30 days 
- not renewable 
 
     Spectrum users exempted from licensing fees 
------------------------- 
All radio apparatus must be licensed under the 
Radiocommunication Act except if only capable of receiving 
broadcasting or if exempted by the Governor in Council under 
the Radiocommunication Regulations.  For example: 
--apparatus that is exempted from licensing and no licensing 
fees apply, e.g.: 
--radio apparatus that is set out in and meets a standard set 
out in the License Exempt Radio Apparatus Standards List, as 
amended from time to time 
--radio apparatus on board an aircraft 
--radio apparatus on board a ship or vessel 
--radio apparatus operated in the amateur radio service at a 
mobile or fixed station 
--all radio apparatus that is licensed but exempt from 
licensing fees must be prescribed by Governor in Council 
regulation, e.g.:  foreign governments that grant a 
reciprocal radio license fee exemption. 
 
¶6.  Treatment of Government versus Commercial Users:  Are 
government or other non-commercial users subject to different 
rules from commercial users with respect to questions 1-5 
above?  If yes, please describe. 
 
     The radio frequency spectrum is allocated and planned to 
advance public policy objectives while ensuring a balance 
between public and private radiocommunication use to benefit 
Canadians.  Industry Canada designates spectrum by type of 
use rather than type of user.  This means that various users, 
including government, can access many bands.  In our view, 
this allows for a more efficient use of the spectrum than 
portioning it for specific users or groups of users. 
However, Industry Canada established priorities in the use of 
frequencies for various radio services.  Safety services 
involve protection of life and property and take precedence 
over the following.  Generally, safety services benefit from 
non-shared, exclusive use assignments.  Preferred services 
are those established for industrial or business 
communications purposes, e.g., federal and provincial civil 
defense systems, provincial and municipal hydro electric 
power, highways and transportation systems, systems essential 
to the distribution and 
maintenance of electrical, oil and gas services, etc. 
 
     However, under the current regulations, radio license 
fees are set for classes of radio stations independent from 
the nature of the licensees.  Therefore all users, regardless 
of their line of business or the nature of the service they 
provide, are charged the same fee. 
 
¶7.  Other Incentives: Please describe what other means (not 
already identified) are used to encourage more efficient use 
of spectrum through market-based incentives or other 
Qof spectrum through market-based incentives or other 
mechanisms. 
 
     In recent years Industry Canada has introduced new 
approaches and policies for the effective management of 
spectrum:  Market-based mechanisms (mentioned above); 
Spectrum licensing (mentioned above); Other mechanisms (apart 
from market-based incentives) to encourage more efficient use 
of spectrum: 
 
     Spectrum sharing:  is employed among services in 
particular allocations and geographical areas to increase the 
usage of the spectrum.  (Examples of spectrum sharing 
arrangements: 
--Sharing by two or more often dissimilar services, that can 
coexist in the spectrum space in a manner that they derive 
virtually unencumbered use providing that certain technical 
sharing parameters are applied, e.g., power limitations, 
antenna pointing ranges. 
 
OTTAWA 00000617  006 OF 006 
 
 
--Time sharing of the spectrum, e.g., a number of lower usage 
mobile radio users sharing the same frequency channel; 
traffic engineering by grouping a large number of users 
together on multi-channel systems. 
--Spread spectrum. 
 
     New technologies: often augment the efficiency and 
flexibility of the use of spectrum.  E.g.: 
--They are often optimized to meet communication service 
demands and, as such, they often offer the additional benefit 
of increasing spectrum utilization. 
--Software-defined and cognitive radio offer the prospect of 
increasing flexible spectrum management practices. 
--The adoption of narrowband technology through spectrum 
refarming. 
 
     Certain approaches (efficient techniques): 
--Under laying radio services using the noise temperature 
concept to move regulation of interference from transmitters 
to receivers; 
--Re-introduction of radio receiver standards. 
 
     Conditions of licenses: 
--In certain situations, require research and development 
(R&D) commitments, i.e., R&D role in bringing new technology 
to marketplace. 
--Requirement to implement within a certain timeframe to 
ensure radio frequencies are utilized efficiently. 
 
¶8.    Government Spectrum:  If not already addressed above, 
do the provisions identified above (market-based assignment 
mechanisms, secondary markets, fees) apply to the management 
of spectrum used by government agencies or other non-profit 
entities?  Please describe and identify any lessons learned. 
 
     As mentioned in Question 6, under the current 
regulations, radio license fees are set for classes of radio 
stations independent from the nature of the licensees. 
Therefore all users, regardless of their line of business or 
the nature of the service they provide, are charged the same 
fee.  However, Priority Users do not have to participate in 
market-based approaches (e.g., auctions) to ensure that they 
have the frequencies in the bands designated for priority 
services.  Such users include those whose radiocommunications 
services are vital to national sovereignty and defense, law 
enforcement, public safety, and emergency services. 
Furthermore, Industry Canada will continue to facilitate 
access to spectrum for certain societal needs which would not 
be achieved by economic factors alone.  Industry Canada 
endeavors to ensure that spectrum is available for rural and 
remote areas, e.g., broadband services. 
 
¶9.  In-Country Contacts and Studies:  Please provide several 
in-country contacts that are willing to discuss these issues 
in more detail with us.  For each of these contacts, supply 
his or her name, title, organization, postal address, email 
address, telephone, and fax numbers.   Also, please provide 
all publicly available spectrum studies of market-based 
economic mechanisms (such as incentives). 
 
     Peter Hill, Director, Spectrum Management Operations 
(613) 980-7176 
 
     Fern Lger, Director, Spectrum and Radio Policy  (613) 
998-4470 
 
     Bill Graham, Director, International Telecommunications 
Policy and Coordination, (613) 998-4478 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS