A group of 12 rural ISPs has published an open letter to the Industry Minister seeking changes to the way spectrum is typically auctioned.
A year ago, I wrote:
The way spectrum has been getting auctioned, rural areas are bundled in with the urban centres. So, the carriers who buy more spectrum to serve the densely populated big cities end up controlling the less dense areas as well – in a sense, they get the rural licenses for free. How can we ensure that rural spectrum isn’t being hoarded without being deployed to the benefit of rural residents?
The letter from the rural ISPs says: “The solution is remarkably simple – set aside rural areas from urban areas and deal with them separately.”
The open letter has been appearing in The Hill Times.
One has to be careful about segregating “rural” from “urban” in an auction for mobile spectrum. The rural areas around cities may well contain major highway corridors that carry many users that are not residents of the rural communities through which they pass and who have greater affinity with the cities between which they travel. The rural carrier may not be able to support them well or conversely may be looking at them as their real clients – a kind of “cream-skimming”. Separating corridors from urban areas may also make the auction vulnerable to gaming opportunities by spoiling attempts at area aggregation. A lesser consideration is that a multitude of individual markets makes things more complex for auctioneer and bidder alike. Auction design can mitigate these concerns. A combinatorial design would permit offering separate urban and rural markets while permitting bidders to bundle urban and rural areas together if that is what is in their best interest. Those interested strictly in the rural areas are able to bid accordingly. The auction software computes combinations with the highest return for the Canadian public which should correspond with society’s highest valued use and an efficient outcome.