CLEARNET CASESTUDY

Introduction

Personal Communication Service (PCS)

 Personal Communications Service (PCS) describes a set of
wireless communications capabilities which allows some
combination of terminal mobility, personal mobility, and service
profile management. More specifically, PCS refers to any of
several types of wireless voice or wireless data communications
systems, typically incorporating digital technology, providing
services similar to advanced cellular mobile or paging services.
 PCS can also be used to provide other wireless communications
services, including services which allow people to place and
receive communications while away from their home or office, as
well as wireless communications to homes, office buildings and
other fixed locations.
 Described in more commercial terms, PCS is a generation of
wireless-phone technology that combines a range of features and
services surpassing those available in analog- and digital-cellular
phone systems, providing a user with an all-in-one wireless
phone, paging, messaging, and data service.
 Understanding advances such as PCS in the telecommunications
industry is important for several reasons.
 First, PCS (also known as Personal Communication Network
(PCN) is part of the current trend toward a future of digital
communications technology that will include digital television,
digital MMDS (or ‘wireless cable’), digital cameras and digital
video from Direct Broadcast Satellites (DBS).
 Secondly, in addition to the advent of digital technology, PCS is a
new entrant in the wireless telecommunications industry that
differs from current analog cellular telephone networks.
Furthermore, besides cellular competitors, many analysts predict
PCS will also compete in the local telephone market since a mobile
PCS digital telephone provides the same voice quality as wireline
telephone service. Therefore, PCS is likely to impact many people
who have wireline local telephone service.
TECHNOLOGY
TRANSMITTING PHONE CALLS
 PCS providers use Code Division Multiple Access (CDMA) for their
network systems, which is a new transmission standard that was
invented in 1989 by Qualcomm. CDMA technology is used to
accomplish multiple accesses by assigning unique codes to
differentiate users. Thus, by assigning special codes to every voice
or data transmission, many more users can ‘share spectrum or air
space’.
 The advantages of CDMA include better quality and more efficient
use of battery power in the handset and more capacity because
CDMA reuses all of the available bandwidth of frequency in
adjacent cells. CDMA also provides better security for consumers
because it converts voice or data into a special code that is
transmitted to the person on the receiving end thereby reducing
the problems of fraud and eavesdropping. Despite its advantages,
the prospects of CDMA is questionable considering it is a new
transmission technology that needs more time to develop a
proven performance in the wireless telecommunications market.
PCS DIFFERS FROM CELLULAR TELEPHONE SERVICE IN THREE
WAYS

FREQUENCY SPECTRUM BAND

One technological difference between PCS and cellular systems is that
each uses a different frequency spectrum band. Cellular operates in a
lower frequency band than PCS. PCS uses a 2GHz (gigahertz) frequency
band to transmit and receive signals whereas cellular operates in a
800Mhz (megahertz) frequency band.
DATA TYPE
Because of the different and more efficient use of frequency, PCS is more
flexible with other types of data such as text and graphics than a cellular
telephone. PCS also has more capacity to provide data services than a
cellular telephone network.
CELL SIZE
Since the size of a PCS cell is smaller than that of a cellular telephone
network and the power of the antenna is lower, the size of a PCS
handset can be smaller (pocket-sized) than that of a cellular handset.
COSTS
Both PCS and cellular have very high fixed investment costs, heavy
marketing expenses and high operating costs. However, the network
construction costs for PCS are 1/3 the cost of cellular networks. In fact,
although more cell sites are required for PCS service than for a cellular
telephone network, each PCS cell site costs between $200,000 and
$300,000 compared to $1 to $4 million for each cellular base station due
to the fact that cellular base stations are taller and require more power.
HISTORY OF PCS
Unlike cellular systems, which have been analog for a decade, PCS has
always been digital. Before the launch of PCS in 1996, the only cellular
wireless service available was a cellular telephone that used analog
transmission in which each cell site could only serve a limited amount of
users. However, the development of digital transmission increased the
number of users to each base station and provided superior voice
quality. In addition to the technical achievement of digital transmission,
competitive pressures led to the research and discovery of digital
transmission technology. In fact, some analysts accurately predicted,
‘...emerging PCS may stimulate the evolution of mobile telephone service
into a competitor to today’s local exchange service by allowing new
entrants into the market (such as cable companies).

APPLICATION
 In regard to its services, PCS provides high quality voice transmission
compared to analog cellular. Also, PCS offers consumers special
 features such as caller ID, call waiting, call forwarding, call blocking,
three-way conference calling, paging and voice mail.
 All of these features are basic, built-in services, whereas digital
cellular providers currently charge extra for these services.
 Other features of PCS include a soft-hands off while driving between
cell sites resulting in fewer dropped calls and security techniques to
combat cloning as well as protection from other people
eavesdropping on (listening to) someone’s call without permission.
Cloning is a technique in which thieves use equipment to copy
identification and serial numbers of mobile telephones and then steal
airtime by making unauthorized calls using someone’s account.
 A disadvantage of PCS is its more limited ability to roam. However,
some PCS providers are overcoming this problem by expanding their
coverage nationwide.
DRIVING FORCES

USERS OF PCS
Consumer reaction has influenced the development of PCS. Prior to PCS,
most customers of wireless telephones were business professionals.
However, today most PCS customers are classified according to one of
the following three categories:
SECURITY PURPOSES: Consumers who intend to primarily use PCS in
cases of emergencies, such as to call for help in times of car trouble or to
call for directions when lost.
SOCIAL PURPOSES: Consumers who intend to use PCS for personal
safety purposes as well as to make frequent calls to family and friends.
BUSINESS PURPOSES: Consumers who intend to primarily use PCS for
all their business needs such as the mobile availability of paging, voice
mail and call waiting, which enable a person to be accessible at any time.
Furthermore, ‘PCS was conceived as a way to provide a low-cost,
feature-rich wireless telephone service. Pricing was to be low enough
for the service to be affordable to a wide segment of the population…
With the multi-functional handset replacing the combination of a mobile
phone, pager and answering machine.

A look at wireless milestones in Canada

  July 1, 1985 - Bell Cellular (the predecessor to Bell Mobility) and
Cantel (the predecessor to Rogers Wireless) launch cellular
services in the Toronto, Hamilton, Oshawa and Montreal areas
 1986 - The Alberta Government Telephones Commission, which
would become Telus, launches a cellphone network in Alberta for
public use. (It had been offering wireless service to the province's
resource industries since 1982.) Bell reaches 6,000 total wireless
subscribers.
 1990 - The number of Canadian cellphone users hits 500,000.
 1996 - Microcell Solutions Inc. launches Fido, on the global GSM
wireless standard.
 1997 - Clearnet launched PCS, a digital wireless service.
 1998 - Telus and B.C. Telecom announce a merger.
 2000 - For a whopping $6.6-billion, the largest acquisition in
Canadian telecom history, Telus acquires Clearnet, giving Telus a
national wireless network.
 2002 - Rogers launches service on the GSM wireless network - the
international world standard network.
 2004 - Rogers buys back AT&T's interest in Rogers Wireless for
$1.8-billion and one week later announces a $1.6-billion deal to
purchase Microcell
 2007 - A monumental merger of BCE and Telus is discussed but
quickly falls apart.
 2008 - Rogers brings Apple Inc.'s iPhone to Canada.
 2009 - Wind Mobile, after running a regulatory obstacle course,
launches wireless service.
 2010 - New wireless providers Public Mobile and Mobilicity
launch service. Google begins offering a cellphone and the iPad
comes out in Canada. The federal Conservatives announce plans
to cut foreign ownership restrictions in the regulated sector.

Canada’s telecom industry competitors

Rogers Wireless
Wireless Network Technology & Migration
 Rogers Wireless (or its predecessor – Rogers Cantel) has operated
in the Canadian mobile wireless market since its inception in
1985. In the early 1990’s, Rogers deployed TDMA IS-136
 technology to cover 83% of the Canadian population including all
major urban areas.
 Rogers was licensed to provide 2G digital PCS service in 1995.
 Rogers is the only GSM/GPRS provider in Canada, adding
GSM/GPRS voice/data technology – allowing speeds up to 30kbps
on the downlink – beginning in 2001.
 Rogers began deployment of GSM/GPRS in 2001, and in June
2002, Rogers completed the deployment of its digital wireless
GSM/GPRS network overlay in the 1900 megahertz frequency,
and in 2003, Rogers completed the deployment of GSM/GPRS
operating in the 850Mhz spectrum across its national footprint.
 Rogers completed deployment of EDGE technology across its
national GSM/GPRS network in June 2004, which more than
tripled the data transmission speeds available to Rogers
customers to average speeds of around 120 kbpsand bursts of up
to 200 kbps.
 Rogers substantially completed the integration of Microcell
(which changed its name to Fido) networks in 2005 that it
acquired in late 2004, and integrated Call-Net Enterprises in 2005,
which it acquired on July 1, 2005.
 Regarding 3G technology, in December 2005, Rogers began
testing UMTS/HSDPA 3G technology in the downtown core of
Toronto, and in November 2006, Rogers launched its
UMTS/HSDPA network with speeds of between 800 Kbps and 1.1
Mbps.
 This technology supports 14.4 Mbps downlink speeds and Rogers
plans to support devices capable of 1.8Mbps and 3.6Mbps in the
near term.
 Rogers plans to turn down its TDMA and analog (AMPS) networks
(that were substituted by its GSM overbuild) effective May 31,
2007.

Bell Mobility
Network Technology & Migration
 Bell Mobility (or its predecessors – the Bell Mobility companies)
has operated in the
 Canadian mobile wireless market since its inception in 1985, and
was licensed, along with three other wireless companies, to
provide 2G digital PCS service in 1995.
  Bell Mobility’s “core” technology standard is CDMA. Bell Mobility
launched its (2.5G) 1xRTT network upgrade in February of 2002,
providing typical data speeds of 120 Kbps up to 144 Kbps.
 Regarding 3G technology, On October 31, 2005, Bell Mobility
launched Canada's first 3G Evolution Data Optimized (“EV-DO”)
wireless data network in Toronto and Montréal,which delivers
average data download speeds of 400-700 kbps with peaks of up
to 2.4 Mbps.
 On April 30, 2007, Bell Mobility announced the launch of EV-DO
Revision. A technology for laptop users, providing peak download
speeds of 3.1 Mbps and peak upload speeds of 1.8Mbps. This
offering is initially available in selected areas of Ontario, with
plans for further deployment and speed enhancements
throughout 2007.
 Bell Mobility reportedly plans to terminate its analog first
generation (1G) AMPS network services in February of 2008.

Canada’s telecom industry has never been a welcoming place for

upstart firms.
Below, we take a look at some of the more notable telecoms that set up
shop in Canada, only to eventually be bought out by their bigger and
more established competitors.
Sprint Canada:
 U.S.-based telecom Sprint Corp. attempted to gain a foothold in the
Canadian market in the early 1990s, re-selling bulk long-distance
lines bought from domestic providers as foreign ownership
restrictions prevented it from owning its network.
 In 1993, Toronto-based Call-Net Enterprises Inc., which had
operated its own long-distance service for seven years, changed
the name of its long-distance subsidiary to Sprint Canada after a
strategic alliance with Sprint that saw the U.S. company take a
25% stake in Call-Net.
 Sprint Canada offered landline, long distance and internet services,
and the company partnered with Fido Solutions to offer
customers wireless service. Sprint’s big focus, however, was on
competitive long distance rates and taking on the monopoly that
Bell held at the time. By the end of 2004 it had just 31,000
wireless subscribers.
  In 2005, Rogers Communications Inc. announced it was acquiring
Sprint Canada’s parent Call-Net. At the time of the deal, its Sprint
Canada subsidiary had about 600,000 customers.
Fido Solutions:
 Montreal-based Microcell Telecommunications Inc. was one of four
companies to win a wireless licence from the federal government
and launched the Fido brand in 1996. It was the first provider to
offer customers a GSM cellphone network in Canada, which at the
time was dominated by the CDMA standard. Fido attempted to
increase its presence in the mobile sphere by partnering up with
Sprint Canada, which offered Fido plans as part of its phone and
internet bundles. Like Sprint, however, Fido was eventually
bought out by Rogers, which paid $1.4-billion. At the time of the
deal in November 2004, Fido had nearly 1.3 million customers.
Clearnet Communications:
 Clearnet was founded in 1984 as a company that made two-way
radio systems used in taxicabs and package delivery vehicles. In
1995, Clearnet was awarded a wireless license by Industry
Canada, and launched a mobile service shortly after. For much of
its existence, Clearnet was known as an innovative player in
wireless, particularly because it sold many of its phones in third-
party stores and allowed customers to quickly set up their
accounts with a credit card and over-the-phone credit check
Clearnet was bought by Telus in 2000 for $6.6-billion, which was
the largest telecom acquisition in Canadian history.
Allstream:
 Allstream’s story begins with the creation of CNCP
Telecommunications in 1967, following the merger of the
Canadian National Telegraph and the Canadian Pacific Telegraph.
CNCP would go on to develop the first facsimile (fax) network in
the world, as well as being the first provider in Canada to offer a
virtual private voice network. In 1990, CNCP rebranded itself as
Unitel Communications.
 By 1999, it became AT&T Canada, before finally changing its name
to Allstream in 2003. The next year, it was acquired by Manitoba
Telecom Services for $1.7-billion, which continues to own the firm
today.
Aliant:
 Aliant was formed in 1999 with the blockbuster merger of Atlantic
 Canada’s four incumbent telecoms — Maritime Telephone and
Telegraph Company, Island Telecom, Bruncor and NewTel
Enterprises. It began trading on the Toronto Stock Exchange that
year with a market cap of $3-billion and in January of 2000, its
partner Bell Canada had raised its ownership stake to 53%.
 In 2006, BCE Inc. completed a debt-paring restructuring that
combined Bell Canada’s rural customers in Ontario and Quebec with
Aliant’s operations as well as a stake in Bell Nordiq, creating Bell
Aliant (which was originally structured as an income trust), and
reducing BCE’s stake to about 45%.The remainder is publicly owned
but BCE controls Bell Aliant through its right to appoint the majority
of the board of directors.
 Bell continued to solely use the Aliant name in Atlantic Canada until
2009, at which point it transitioned it to the current Bell Aliant
branding.
The Introduction of PCS in Canada
 In December 1995, the then Minister of Industry, John Manley,
awarded PCS licences to 14 companies: two national 30 MHz PCS
licences were awarded to Clearnet PCS Inc. and Microcell
Networks Inc.; a national 10 MHz PCS licence was awarded to
Rogers Cantel Mobile Inc.; and a 10 MHz PCS licence was awarded
to the 11 regional shareholders of Mobility Personacom Canada
Ltd. for their operating territories. A complete list of the
successful applicants is provided in Appendix C. In the decision,
two licences were held in reserve: one 30 MHz licence (block
C/C') and one 10 MHz licence (block E/E').
 To ensure that a competitive environment would be maintained, at
the time of this licensing process, the Department also placed a
limit on the amount of spectrum that any one entity or its
affiliates could hold. This spectrum aggregation limit, commonly
referred to as the spectrum cap, was set at 40 MHz and consisted
of frequency assignments for PCS at 2 GHz, cellular
radiotelephony, and similar public high-mobility radiotelephony
services in the 800 MHz range such as Enhanced Specialized
Mobile Radio Services (ESMR).
 On November 5, 1999, the Minister of Industry announced that the
spectrum aggregation limit applying to PCS would be raised from
40 MHz to 55 MHz, and that 40 MHz of additional spectrum for
PCS would be licensed by auction. The 40 MHz of additional
 spectrum consisted of PCS spectrum blocks C/C' and E/E', which
had been held in reserve in 1995. These actions were taken to
ensure the availability of adequate spectrum resources to meet
the needs of the expanding PCS market, and also to enable the
implementation of new offerings such as Advanced Wireless
Services (AWS). For complete details on the aggregation limits
refer to Radio Systems Policy 021, Revision to the PCS Spectrum
Cap and Timing for Licensing Additional PCS Spectrum (RP-021).
Mergers and Acquisitions
 Since the initial licensing processes a number of mergers,
acquisitions and reorganizations have occurred among the
licensees. To begin with, in 1998 AGT Mobility Inc. merged with
BC TEL Services Inc. and Québec Téléphone to form TELUS
Corporation. TELUS and Thunder Bay Telephone subsequently
left the Mobility Canada Association, with the remaining members
reforming under the Bell Wireless Alliance. This was followed by
the acquisition of Clearnet by TELUS in late 2000. As part of the
restructuring TELUS created a new corporate entity, TELE-
MOBILE COMPANY, which is a partnership between Canada Inc.
and TELUS Communications Inc. This partnership holds all the
wireless licences associated with the two partners.
 As a consequence of the acquisition of Clearnet, TELUS had to
return to the Department 20 MHz of spectrum in three areas of
the country to come into compliance with the spectrum cap. To
come into compliance TELUS choose to return certain PCS
spectrum that was originally assigned to Clearnet PCS Inc. and
Québec Téléphone in its telephone operating territories in British
Columbia, Alberta, and Eastern Quebec.
 Over the period from 2001 to 2002, the four local telephone
companies in the Atlantic Provinces consolidated under one
company -- Aliant Telecom Inc. Also, BCE reorganized and
restructured two of its companies operating in Ontario and
Quebec (NorthernTel L.P. and Telebec L.P.) under a trust fund
called Bell Nordiq.
2001 PCS Auction
 In January 2001 the Department held an auction for the 40 MHz of
PCS spectrum that had been held in reserve by the Minister in his
1995 licensing decision (PCS blocks C and E) and the spectrum
returned to the Department by TELUS in 2000. Five entities bid on
 52 spectrum licences across the country with bids totalling $1.48
billion.
 For the spectrum licences not assigned following the PCS spectrum
auction the Department announced its intention to assign them on
a First-come, First-served basis (FCFS) or, where demand exceeds
supply, by auction.
Conversion to Spectrum Licensing
 In December 2002, the Department released Gazette Notice DGRB-
004-02 entitled Consultation on a New Fee and Licensing Regime
for Cellular and Incumbent Personal Communications Services
(PCS) Licensees. The Department proposed a transition of the
cellular and incumbent PCS licensees to new licensing and fee
regimes based on spectrum licences and a common fee. Based on
the comments and reply comments received, the Department
defined the final policy for the transition of cellular and
incumbent PCS licensees to the new licensing and fee regimes.
 The new licensing regime was announced in Gazette Notice DGRB-
006-03. This notice announced the release of the paper entitled
Spectrum Licensing Policy for Cellular and Incumbent Personal
Communications Services (PCS) which outlines Industry Canada's
proposal for the transition of cellular and incumbent PCS licences
to spectrum licences similar to those issued following the auction
of additional PCS spectrum in the 2 GHz range.
The nature of PCS risk for CLEARNET
Using the cellular industry as a reference, the following
summarizes the sources of risk that presently loom large on the
PCS scene:
1) Poorer RF propagation at PCS frequencies imposes a much
greater (from two to three times greater) number of base stations
needed to provide required coverage. This causes an enormous
increase in infrastructure and backhaul costs and in build-out
risk, compared to cellular.
2) Poorer RF penetration at PCS frequencies results in weaker in-
building and in-vehicle capability compared with cellular.
3) RF interference from adjacent-band service providers and
incompatibility between the various air interfaces can lead to
severe quality loss, capacity loss (the number of interference-free
channels gets smaller), flexibility loss in base station siting and
tower sharing difficulty.
 4) The need to be fully operational with capacity and coverage on
the first day of service is driven by the need to meet minimum
customer expectations and to compete with incumbents.
6) Local zoning restrictions make it difficult and expensive to
install new base stations or to increase the height of antenna
towers.
7) The necessity and the cost of relocating private operational
fixed service (POFS) microwave operators from the PCS band
imposes additional financial burdens on the service provider.
Digital’s dark side
 The adoption of digital air interfaces by PCS participants solves the
crucial problem of capacity, but also creates serious PCS-specific
RF interference control and spectrum efficiency challenges that the
cellular industry never faced.
 Digital modulation generates significant out-of-channel noise that
can severely contaminate adjacent channels. Because of this,
digital modulation requires guard bands against interference from
adjacent channels that use other air interface standards or that
belong to competing service providers, thus idling precious
spectrum.
 Furthermore, broadband digital RF networks are susceptible to
out-of-channel interference sources powerful enough to saturate
the base station receiver front end.
 Saturation is caused by narrowband interference sources and by
tower sharing-an almost inevitable trend due to the simultaneous
crowding of real estate and of spectrum. No amount of digital
signal processing can compensate for signal degradation caused by
front end saturation. These “dark side” issues of digital must be
explicitly addressed.
CLEANET and other participants Searching for cures
These sources of PCS risk can be mitigated by addressing root causes for
which there are practical, technical solutions in the RF domain. The
controllable root causes are:
1) Poor RF propagation at PCS frequencies, either through the
atmosphere, natural obstacles or buildings.
2) Difficulty of providing practical, sharp RF filters to effect
“spectrum containment,” a generic challenge that encompasses
minimizing guard bands required by digital RF modulation
schemes, rejecting RF interference and maximizing revenue-
 producing bandwidth.
3) Difficulty of dynamically tuning RF circuitry to mitigate RF
interference sources; to accommodate shifts in network capacity
demand; or to dynamically re-engineer the system as additional
cell sites are turned on.
4) Limitations of linear amplifiers, both transmitter linear power
amplifiers (LPAs) and receiver front-end low noise amplifiers
(LNAs), which often cause distortions and interference.
5) The difficulties in providing compact, cost-effective and reliable
electronically steerable antennas and associated control
electronics, which are needed to provide improved range and
interference rejection.
Finally Some solutions
 In the last few years, numerous companies in the RF industry
have addressed the described root causes of risk, taking
advantage of technical innovations to increase receiver
sensitivity and selectivity, and combat RF interference.
 For example, a lack of transmit power by the subscriber terminal
(reverse link limitation) can be compensated for by increased
receiver sensitivity at the base station. There are several ways to
achieve this, including increasing antenna height, smart
electronically steerable antennas and cryoelectronics. These
efforts now are coming to fruition.
 The categories of practical solutions that emerge are:
1) Ultra-low-noise base station receivers to increase the radius of
coverage cells, to minimize transmit power (and increase battery
life) for subscriber terminals operating in either coverage cells or
capacity cells, to improve in-building penetration and to improve
the tradeoff between coverage and capacity in certain digital RF
schemes (e.g., CDMA).
2) Sharp, low loss RF filters for minimizing guardbands,
maximizing the number of channels and rejecting interference in
the receiver channel.
3) Adaptive filtering and dynamic channel allocation to combat
fixed and intermittent sources of interference by frequency agile
RF filters.
4) High performance linear power amplifiers (LPA) that allow the
base station transmitter to cleanly combine the signals of many
channels without distortion and saturation in the allowed
bandwidth.
5) Electronically steerable “smart” antennas that can track mobile
users and selectively null out spatially wandering sources of
interference, in essence establishing an optimized dedicated
spatial communication path per user with increased range and in-
building penetration.
6) Some companies are focusing their core competencies on
solving a single challenge among the five mentioned above; others
are taking a more systems-level approach. A few companies are
focusing on improving LPA performance (increased power
handling and linearity, lower cost and complexity, and easier
maintainability). Electronically steerable smart antennas are
being developed by several vendors using technology originally
developed for military applications. Other companies with
competencies in superconductivity are offering products to
address one of the challenges listed above, low loss RF filters.
7) Superconducting Core Technologies Inc. combines electronic
RF tuning with superconducting RF filters and ultra low noise
receiver front ends in a rugged, low-cost miniature platform.
Synergistic combination of this technology with smart antennas
looks promising. Cryo electronic solutions have matured to the
point of successful field trials under the auspices of both RF
equipment manufacturers and PCS carriers, with initial
commercial availability scheduled for 1996.