Approval Letter to Bell Canada and Rogers Communications Inc. Regarding Licence Transfer to Inukshuk Wireless Partnership

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March 30, 2006

Ottawa Ontario
K1A 0C8

Mr. Kenneth Englehart
VP, Regulatory Affairs
Rogers Communications Inc.
333 Bloor Street East
Toronto, Ontario M4W 1G9

Mr. Mirko Bibic
Chief, Regulatory Affairs
Bell Canada
110 O'Connor Street, 14^th Floor
Ottawa, Ontario K1P 1H1

Dear Sirs:

Thank you for your letter of August 2, 2005, in which you applied for the transfer of Inukshuk's Multipoint Communications Systems (MCS) licences.

Industry Canada officials have reviewed your application for a transfer and barring unforeseen circumstances will approve the licence transfer to Inukshuk Wireless Partnership pursuant to Section 4.5.2 of the policy and licensing procedures for 2500 MHz MCS Systems upon receipt and approval of the executed documents required relating to the Canadian ownership and control. Given the significant interest and anticipated developments surrounding the 2500 MHz band, I would like to take this opportunity to clarify several issues.

Mobile Use

Of particular interest is that in the United States, as well as in other countries, the decision has been made to include a mobile allocation in this band. The Department supports this development and is interested in ensuring that Canadians are able to maximize the benefits derived from this spectrum, recognizing the importance of harmonizing this band with other markets.

As noted in the conditions of licence (attached for your information), the MCS licences continue to be restricted to fixed service. The Department has determined that the equipment currently deployed has a limited degree of incidental mobility that is acceptable. However, the sale and marketing of any service intended to be used by subscriber terminals while in motion is prohibited. Should any licensee authorized under the fixed service in the band 2500-2690 MHz wish to offer services in the future that equal or exceed the mobile capabilities of technologies such as 802.16e, the licensee will be required to apply to the Department for a mobile authorization prior to any implementation of such services.

The use of this band for mobile applications will be subject to a revised spectrum policy that is expected to be released in the near future. The addition of mobile services constitutes a fundamental reallocation. The added regulatory flexibility to permit mobile services, together with the greater spectrum efficiencies associated with mobile technologies and the increased value associated with mobile spectrum, constitute a significant material change. Accordingly, the implementation of mobile services justifies a reassessment of the licensing requirements, including the amount of spectrum to be retained by incumbent licensees.

Service Deployment

Condition of licence 2 requires deployment and maintaining commercial service to all areas identified on the attached Detailed MCS Deployment Schedule.

For the purposes of this condition of licence, as well as the evaluation referred to in condition of licence 1, commercial service is defined as:  

• a) the licensee has installed sufficient base station transmitting and receiving equipment, together with related switching and ancillary equipment such that the service offering is available to seventy percent of the households within the specific deployment area (city or community);
  
  
• b) the service is being offered for sale to the public; and
  
  
• c) the service is being provided within a reasonable period of time to those opting for it.
  
  

Alternatively, items b) and c) of this definition will be deemed to be met if the licensee or its associated resellers have subscribers equivalent to at least five percent of the households in the particular deployment area.

As outlined in your letter to the Deputy Minister, dated September 12, 2005, an evaluation will be made as of December 31, 2009, to determine the extent to which deployment has taken place and to what extent there remains "unused" spectrum. This evaluation to be conducted by the Department, may include an assessment by an independent third party selected by the Department. The evaluation will be done on the basis of both geographic areas deployed, as well as the amount of spectrum put to productive and spectrally efficient use in those areas deployed. In terms of geography, the smallest assessment area will be defined by Statistics Canada Census Subdivisions and the smallest assessment in terms of spectrum will be units of 1 MHz.

Following the above-noted evaluation, upon notification by the Department, you will be required to surrender the licences immediately. A renewal licence for the term to March 31, 2011, will be issued covering those particular geographic areas and those parts of the spectrum where the licensee has demonstrated to the satisfaction of the Department that the spectrum has been put to productive and spectrally efficient use taking into account commercially available technology, cost considerations and good engineering practices.

Open Network

During the original competitive process, the Inukshuk application made many references to its commitment to establish an open network whereby it would allow access to its network on a wholesale basis to those who intended to offer broadband wireless services. You are reminded that the Canadian Radio-television and Telecommunications Commission (CRTC) has retained certain powers and duties, including those with respect to section 24 and subsection 27(2) of the Telecommunications Act with respect to your services. As such, the CRTC may deal with any issue or evidence of a dispute regarding the reasonableness of the terms on which access is being offered to a third party.

Learning Plan

Please note that the annual requirements for deployment and learning plan investments will be assessed in accordance with the conditions of licence. These requirements, as well as all other requirements of licence, must be met on an ongoing basis in order for the licensee to be considered in compliance with the conditions of licence.

In closing, I would point out that the terms and conditions established for the MCS licences will not restrict the Minister from taking any action in the future under the powers conferred under the Radiocommunication Act.

Should you have any questions or require assistance with the above, please contact me at (613) 990-4817.

Sincerely,

Jan Skora
Director General
Radiocommunications and
Broadcasting Regulatory Branch

Enclosures

Licence Conditions for 2500 MHz Multipoint Communications Systems Licensees - Inukshuk Wireless Partnership