By Kevin Martel

Wireless auction could improve cell service in rural areas

Jan 14, 2014 | 6:34 AM

Wireless service in Canada is expected to take a big step forward as those in the telecommunications industry prepare to bid in Tuesday’s wireless spectrum auction, and that could have a major impact on anyone who uses a cellphone or tablet.

Spectrum is the radio frequency used to deliver voice and data service to your smartphone or tablet when you’re away from your home network. Companies need to have licenses to have the right to use certain frequencies within a range. These rights costs tens, sometimes hundreds of millions of dollars to obtain and the opportunities to purchase any of them are few and far between.

Along with the Big 3 —Bell, Telus, and Rogers—there will be eight other companies registered to take part in the auction. Smaller, regional companies like SaskTel will also hope to acquire a chunk of the coveted radio waves up for grabs.

There is a particular interest in the 700 megahertz (MHz) frequency, which up until 2011 was used for analog television in Canada. AT&T and Verizon in the United States have been using this frequency since 2008. There was speculation last summer that Verizon was going to enter this auction but the company has since said it has no plans to do so.

Even with the 11 companies taking part, the outcome for customers could be significant explained Ontario-based tech analyst Carmi Levy.

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“The 700 MHz auction will level the playing field and give us more for our buck,” he said.

This specific spectrum has some unique qualities. Along with faster speeds, there’s also a promise of better reception in spots where it’s traditionally been poor such as inside elevators, underground or in a tunnel. Levy said waves can penetrate concrete buildings more effectively. Carriers will also find this spectrum more advantageous because waves can travel longer distance, meaning less cell phone towers for those smaller companies with tight budgets.

Levy said those living in rural areas could notice a huge difference too.

“What it means is that you’ll no longer have to be in an urban area in order to have the fastest or best wireless service,” he insisted. “Increasingly it won’t matter where you go—you could be in the middle of nowhere—and you’ll have screaming fast service on your smartphone.”

Levi also said those trips to the U.S. shouldn’t be as harsh on your wallet, as the 700 MHz frequency will give you better and cheaper roaming service when travelling over the border and syncing up with their waves.

The big three telecommunications carriers control more than 90 per cent of the Canadian wireless market. To raise competitiveness in the industry and to ensure they don’t squeeze out the smaller companies from the auction, the federal government has put in rules to give these smaller companies an opportunity to bid on spectrum access.

Having more competition could ultimately mean saving money by paying less on your monthly cell phone bill. Levy insisted there’s another scenario more likely.

“You’ll get greater value for your money so for a similar monthly payment, you’ll get more minutes [and] you’ll get more data, kind of a bigger bucket. The services will be faster, they’ll be more reliable and ultimately you’ll be able to use it for more than you do now,” he said.

Don’t expect the changes to come anytime soon however. Levy explained Industry Canada has not set out an end date for the auction. He said these types of events tend to go round after round, lasting a period of weeks or even months. He’s estimating by the end of winter or start of spring we’ll know which company won the spectrum rights and how much they bid. After that, changes might not be implemented for another year and a half to two years.

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