Canada assailed over its 700 MHZ licensee R&D rule

Industry Canada's proposed requirement that new 700 MHz licensees must invest 2 percent of their adjusted gross revenues in eligible research and development activities related to telecommunications is "an artifact from a previous era that is no longer appropriate or required," according to the Canadian Wireless Telecommunications Association.

"Prescribing a range of R&D activities, as well as an amount of money in which the industry must invest, will stifle innovation and harm the industry," said the group in comments filed regarding Industry Canada's consultation on the licensing framework for mobile broadband services in the 700 MHz Band.

"Immediate relief is necessary in an industry where network demand and need for additional capital expenditure is accelerating exponentially," CWTA added, noting an R&D requirement is unnecessary because licensees will invest in R&D anyway to maintain a competitive advantage.

Canadian operators have spent billions of dollars on wireless infrastructure, over and above their expenditure on license fees, even during the ongoing economic downturn. The group reported over $7.2 billion in investments since 2008, not including $4.2 billion in AWS-related expenditures. CWTA added that research firm Ovum estimated that nearly $2.5 billion was invested by Canadian wireless carriers in capex during 2010 alone.

In March, Industry Canada, announced it will auction licenses for the 700 MHz digital dividend spectrum in early 2013. That will be followed by a subsequent auction of 2.5 GHz spectrum within a year.

Meanwhile, in Canadian operator news Wind Mobile announced its AWS network will soon cover 13.1 million people. The company now has more than 1,140 active network sites, 225 self-branded store locations and 400 points of distribution across 16 key markets throughout Canada. Further, HSPA+ enabled service upgrades have been implemented for the past eight months, and more than 34 percent of the operator's network supports speeds of up to 21 Mbps.

For more:
- see this CWTA filing (PDF)
- see this Wind release

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