Industry Canada says telecom companies that have been sitting on wireless spectrum for years will have to use it or lose it starting next March.

In a news release Thursday, Industry Minister James Moore said wireless companies will lose the right to use wireless spectrum they already paid for if it's not being used to offer services to Canadians by March 2014.

The spectrum is in the 2,300- and 3,500-MHz band and unrelated to the upcoming auction of new, more powerful 700-MHz spectrum.

'It's somewhat stranded spectrum.'- Telecom analyst Troy Crandall

"Beginning in March 2014, 2300 MHz and 3500 MHz spectrum licences will be subject to renewal," Moore said in a release. "These spectrum licences contained conditions requiring that the spectrum be used for fixed wireless access, which represents the most affordable high-speed internet access for many rural Canadians."

"Our government will only renew spectrum licences for those holders that have met all conditions of licence. Those that have not used the spectrum will lose it," Moore said.

Those bands of spectrum are already being used to transmit wireless signals in various parts of the country. But some portions of that spectrum are not currently being used, despite having been paid for by telecom firms several years ago.

They're typically in remote, rural communities, telecom analyst Troy Crandall of MacDougall, MacDougall & Mactier in Toronto said in an interview Thursday.

"It was for broadband wireless for communities where DSL did not make sense," he said. "The hope was to stick up a tower and connect using wireless broadband. Bell and Rogers's intention was right [but] the technology wasn’t quite there."

"It's somewhat stranded spectrum," he said.

Hoarding allegations

Canada's telecom incumbents are often accused of "hoarding" spectrum by buying it up so that others can't use it, but failing to use it effectively themselves — an accusation they deny.

While not of a high enough quality to handle 4G or LTE networks, that spectrum could be used to expand existing voice and some data services to underserved remote areas, Crandall said.

"Bell and Rogers have a lot of it; these guys have all the spectrum and [have] done nothing with it for 10 years," he said. "[Other] legitimate companies provide a good and needed service, and need this spectrum."

In the recent throne speech, the federal government said improving telecommunications to rural areas will be a focus of this government in the coming year. And in his statement Thursday, Moore said the most affordable way to do that is by issuing those spectrum licences to support fixed wireless services.

"Today's decision means Canadians will benefit from additional quality spectrum being deployed across the country, which will lead to dependable high-speed internet services on the latest technologies at the best prices," Moore said. 

"Our government will continue to enhance rural access to high-speed broadband networks and will continue to put consumer interests at the core of our decisions."​

The spectrum currently sitting idle is of lower quality, and relatively inexpensive.

Crandall estimates the unused bands are scattered across 13 different licensees, who paid $69 million for it in auctions in 2004 and 2009. That's a drop in the bucket compared to the billions of dollars companies paid for other bands, and are expected to pay for the valuable 700 MHz band.

Regardless of whether their old unused spectrum is confiscated, the move does not impact the ability of companies to bid on the 700-MHz early next year.