Background
Canada’s licensed backhaul fee structure was last updated in 1996 when 2G was just entering the marketplace and voice communications dominated. As such, the previous radio license fees were capacity based, with the voice channel (64kb) forming the basic unit upon which the fee was calculated. In recent years this has effectively penalized operators who attempted to use spectrally efficient radios as the high-capacity radios generated higher license fees, regardless of spectrum amounts used.
ISED, recognizing that the wireless industry has evolved, has taken stakeholder feedback into account, and has implemented a new consumption-based license fee model (as of April 1st, 2021) that encourages innovation and rewards spectral efficiency, reflects the utility of different spectrum bands, and has pricing that is clear and predictable.
Consumption Based Fee Model
Annual radio license fee per link = consumption factor (MHz) x base rate ($/MHz)
Whereby:
- The consumption factor is based on the amount of spectrum assigned
- The base rate is dependent on the frequency band (refer to Table A1 below)
Rural Considerations
ISED has adopted Tier 5 service areas as a means of identifying urban, rural, and remote boundaries for the purpose of calculating point-to-point links. Urban area will comprise of all metro and urban Tier 5 service areas. Rural areas will comprise of all rural Tier 5 service areas, and remote areas will comprise of all remote Tier 5 service areas.
hould either station of the link be located within a remote Tier 5 area, the remote base rate will apply. Where one station is located within an urban area and the other in a rural area, the urban rate applies.
Follow the below web address to view ISED’s interactive tier map to determine urban/rural/remote locations. https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/h_sf01627.html#tierMap
Fee Calculation Examples
Example 1 – A backhaul link, two frequency (FDD), PTP, fixed link in rural area is assigned 80MHz channel in the 11GHz band and carries 1Gbps of data.
New consumption-based model: 80MHz x 2 frequencies x $19.20/MHz = $3,072/year.
Previous model: The previous yearly radio license fee for this link is $13,204.
Example 2 – A backhaul link, two frequency (FDD), PTP, fixed link in rural area is assigned 750MHz channel in the 70GHz band and carries 3Gbps of data.
New consumption-based model: 750MHz x 2 frequencies x $0.40/MHz = $600/year. Previous model: The previous yearly license fee for this link is $39,664.
| Table A1 – Frequency ranges & base rates for fixed Point-to-Point links | |||
| Frequency Range | Urban Base Rate ($/MHz) | Rural Base Rate ($/MHz) | Remote Base Rate ($/MHz) |
| < 890 MHz | 2,750 | 2,200 | 1,375 |
| > 890 and < 960MHz | 138 | 110.40 | 69.00 |
| > 960 and < 4200MHz | 45 | 36.00 | 22.50 |
| > 4.2 and < 8.5GHz | 34 | 27.20 | 17.00 |
| > 8.5GHz and < 15.35GHz | 24 | 19.20 | 12.00 |
| > 15.35 and < 24.25GHz | 16 | 12.80 | 8.00 |
| > 24.25 and < 52.6 GHz | 10 | 8.00 | 5.00 |
| > 52.6 and < 92GHz | 0.50 | 0.40 | 0.25 |
| > 92GHz | 0.50 | 0.40 | 0.25 |