Up For Bid: Two Radio Frequency Blocks

By Ron Grunsby

The Canadian government has announced it will auction two blocks of radio frequency spectrum that will be made available when Canadian broadcasters switch to digital TV next year. The plan is to sell space at 700 MHz and 2,500 MHz.

Most Canadian television is scheduled to go from analog to digital delivery by August 2011, and the 700-MHz auction could be held by the end of 2012, according to Industry Canada. Radio waves from the 700-MHz spectrum are desirable to telecom operators because they can travel long distances and more easily penetrate thick walls and buildings.

The auction will occur once potential bidders are financially ready and foreign funding issues are settled, industry minister Tony Clement said. According to Clement, he has spoken with the chief executives of the major telecom companies and discussions would continue about their ability to raise funds.

In 2008, Canada's government raised more than $4 billion in an auction of wireless spectrum between 1,710 and 2,155 MHz. Foreign ownership became a sticking point when Globalive bought more than $413 million worth of licenses. Globalive's main stakeholder is Egyptian telecom company Orascom Telecom Holding S.A.E.

The Canadian Radio-television and Telecommunications Commission said the company did not meet the standards for foreign ownership, but the Canadian government overturned the ruling. The government is expected to take a fresh look at the restrictions on foreign ownership in the wireless industry prior to the upcoming auction.

SOURCES: Reuters and the Toronto Star