Summary#

This bill changes the Radiocommunication Act to set minimum build‑out rules for spectrum licences. It requires licence holders to provide service to at least 50% of people in their licence area within 3 years. For large licence areas (Tiers 1–4), it also requires 50% coverage in every smaller local area (Tier 5) inside that licence area (DGSO-006-19, July 23, 2019). If a company does not meet the rules, the Minister can revoke and reissue the licence.

• Requires 50% population coverage in the licence area within 3 years (Bill s. 5(1.11)(a)).
• For Tier 1–4 areas, requires 50% coverage in every Tier 5 area inside the licence, within 3 years (Bill s. 5(1.11)(b); DGSO-006-19).
• If a licence is sold within 3 years, the same build‑out condition must be included in the sale (Bill s. 5(1.12)).
• Non‑compliance can lead to revocation; immediate if no service at all, or in 180 days otherwise (Bill s. 5(3), 5(5)).
• Before revocation takes effect, the Minister may arrange a transfer of service or issue a subordinate licence to a third party; this can restart a new 3‑year clock (Bill s. 5(6)–(6.2)).
• After revocation or surrender, the Minister must reallocate the licence within 60 days; the former holder and affiliates cannot compete (Bill s. 5(8)–(9)).
• Applies to existing licences; a new 3‑year period starts on the bill’s coming‑into‑force date (Transitional (1)–(2)).

What it means for you#

• Households and mobile users

  • Carriers must provide service to at least 50% of the people in each local service area (Tier 5) within 3 years. This sets a minimum build‑out beyond major cities (Bill s. 5(1.11)(b)).
  • If a carrier fails to meet the rule, the Minister may shift service to another provider to avoid shut‑offs, including by issuing a subordinate licence (Bill s. 5(6)–(6.2)).
  • If a licence has provided no service at all, it can be revoked immediately, which could affect availability until service is reassigned (Bill s. 5(5)(a), 5(8)).
  • People in the affected area can sue a non‑compliant holder for loss or damage if the holder cannot arrange for another provider to assume service and does not surrender the licence (Bill s. 5(7)).

• Rural and remote residents

  • The 50%‑per‑Tier‑5 rule applies inside large regional licences (Tiers 1–4). This forces carriers to reach at least half the population in each local area, including small towns and rural zones, within 3 years (Bill s. 5(1.11)(b); DGSO-006-19).

• Businesses (wireless carriers and fixed wireless providers)

  • You must meet both 50% coverage in the overall licence area and 50% in each Tier 5 area within 3 years of issuance (Bill s. 5(1.11)).
  • Selling a licence within 3 years requires passing the same build‑out condition to the buyer (Bill s. 5(1.12)).
  • Failure to comply can lead to revocation, a 180‑day wind‑down if service exists, and ineligibility for the reallocation round; affiliates are also barred (Bill s. 5(3), 5(5)(b), 5(9)).
  • You may avoid revocation if the Minister approves an arrangement to transfer service or issues a subordinate licence to a third party that can meet the target within 3 years (Bill s. 5(6)–(6.2)).

• Smaller providers and new entrants

  • You could gain access to spectrum sooner through subordinate licences or reallocation within 60 days if an incumbent misses targets (Bill s. 5(6.1), 5(8)).

• Existing licence holders

  • The new build‑out rules apply to current licences, but the law deems them “issued” on the day the Act takes effect. Your 3‑year compliance period starts then (Transitional (1)–(2)).

Expenses#

• Estimated net cost: Data unavailable (no direct appropriation in the bill).

• Direct appropriations in the bill: None. The bill sets conditions and enforcement powers but does not spend money (Bill text).

• Federal administration: The Minister (ISED) would need to monitor compliance, issue notices, manage transfers, and run reallocations within 60 days. Data unavailable.

• Court and damages: Civil liability falls on licence holders; no federal payments are authorized (Bill s. 5(7)).

• Effects on spectrum auction proceeds or fee revenues: Data unavailable.

Proponents' View#

• Improves coverage in small towns and rural areas by requiring 50% service in every Tier 5 area within large regional licences, within 3 years (Bill s. 5(1.11)(b); DGSO-006-19).
• Reduces spectrum hoarding and delays. Firm timelines, revocation authority, and 60‑day reallocation create clear incentives to build (Bill s. 5(1.11), 5(3), 5(8)).
• Protects users through managed transitions. The 180‑day window and subordinate licence option help maintain service while fixing non‑compliance (Bill s. 5(5)(b), 5(6)–(6.2)).
• Applies promptly to current licences by resetting the 3‑year clock on the law’s start date, speeding deployment without retroactive penalties (Transitional (1)–(2)).
• Adds accountability. If a holder cannot arrange a takeover and does not surrender, people can seek damages for losses (Bill s. 5(7)).

Assumptions to note: That 50% targets are achievable within 3 years across varied terrains; no cost estimate is provided.

Opponents' View#

• The 50% target in every Tier 5 area may be difficult or costly in remote or low‑density places, raising build‑out costs and risk (Bill s. 5(1.11)(b)). Data unavailable.
• A uniform 3‑year deadline may not fit real‑world constraints such as permits, backhaul, supply chains, and weather, leading to rushed or sub‑optimal builds (Bill s. 5(1.11)).
• Revocation risk adds uncertainty. Immediate revocation where no service exists and a 180‑day timeline otherwise may still disrupt projects and financing (Bill s. 5(5)).
• Ineligibility to bid on reissued licences (including affiliates) could reduce licence value and dampen auction interest, possibly lowering future proceeds (Bill s. 5(9)). Data unavailable.
• Expanded civil liability increases litigation and insurance exposure for carriers (Bill s. 5(7)). Data unavailable.
• A statutory, one‑size build‑out rule may conflict with or reduce flexibility in band‑specific deployment conditions set in past auctions. Data unavailable.

Assumptions to note: That added obligations will significantly reduce investment or auction revenue; no quantified evidence is provided.