Foreign Takeover of Canadian Internet

Every Canadian entrepreneur who earns their living using the internet or relies on the internet for open communication, needs to be aware of the federal government’s auction of Mobile Broadband Services (MBS) — 700 MHz Band.  There is a possibility of a foreign takeover of Canadian internet.

September 17, 2013 at noon marks the deadline for receipt of applications to participate in Canada’s mobile broadband spectrum auction being held next year by Industry Canada.

The Canadian Telecommunications Act states the government has an obligation to “provide affordable and reliable telecommunication services of high quality to areas both urban and rural.” Will that hold true after the auction?

What mobile phones need

In order to communicate, mobile phones need to send high frequency radio signals. The benefit of high frequencies is that you only need a short antenna—the lower the frequency, the longer the antenna. The unfortunate thing with higher frequency communication is that the signals are affected by obstructions (buildings and trees etc) so more towers have to be built.  These mobile phone signals are only allowed a set of frequencies within the 800 MHz range. Why? Because the rest of this UHF (Ultra High Frequency) spectrum which lies between 300 and 3000MHz range is set aside for military, public safety, television, and various government agencies.

The pressure for more spectrum

As more and more people are using mobile phones and devices, the higher frequency radio signals have become more congested and communication companies are forced to spend more money building ‘repeater’ stations and towers. What to do?

Pressure was put on television broadcasters to release their use of UHF in the 700MHz range. On August 31, 2011, Canadian local over-the-air television stations in certain areas stopped broadcasting in analog and started broadcasting digital signals.

Digital signals use less airwave space than analog signals. This means that the freed-up space could be used by mobile phone companies. But which companies will gain control? Who decides this?

What happened in the American Auction

In 2008, the U.S. Federal Communications Commission (FCC) auctioned a big chunk of the spectrum in the 700MHz block. Verizon bid 9.4 billion dollars for most of the licenses. AT&T won most of the regional licenses with bids totaling 6.6 billion dollars.

Meanwhile, Google’s top bid barely surpassed the 4.6-billion-dollar minimum requirement but what it really wanted was to make certain that spectrum owners can’t block out Internet or telecom rivals.

Google insisted the FCC make open-access a condition of sale in the coveted “C-block” of the spectrum before it signed on as a bidder. By barely bidding more than the minimum, Google managed to pay nothing while ensuring that companies whose life blood is the Internet will be able to offer high-speed services to mobile devices on the spectrum.

Google’s aim was to ensure people can freely connect to the internet with the entire range of mobile telephone and Internet service providers via the spectrum.

In 2011, the U.S. National Science Foundation announced it wanted to  bring affordable wireless broadband to under-served areas.

What can happen to wifi internet access in Canada?

The auction of Canada’s 700MHz spectrum will be held January 14, 2014 by Industry Canada. What is at stake? The spectrum is divided into four blocks and two of these are to be set aside for foreign corporations new to the Canadian market.

Verizon, which owns much of the 700MHz spectrum in the United States, has announced that it may not be interested in seeking a similar foothold in Canada. Why not?

Another possible contender is the China controlled company, Huawei Canada.  Some say Huawei spent years hacking into Nortel’s system and stealing information so it could compete on world markets, leading to Nortel’s demise in 2000. Ironically, it is now providing high-speed networks for Bell Canada, Telus, SaskTel and Wind Mobile.

The problem is there is no one advocating for universal access to the internet in Canada. What if access to the internet becomes restricted?

There is a call to action by Bell, Rogers and Telus asking people to contact their members of parliament regarding the foreign takeover of Canadian internet.

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