Most often, we read of differences between the United States and Canada, but in one area, the people of both nations agree: neither country can get enough of mobile wireless services. Consumers devour more mobile wireless data each year, and mobile operators beg the government to release more spectrum and to streamline rollout requirements.
Moreover, the US and Canada are interdependent internet economies. The US Department of Commerce reports that trade in communications technology (ICT) services and “potentially” ICT-enabled (PICTE) services is booming. U.S. PICTE services exports to Canada totaled $27.8 billion, or 52 percent of all U.S. services exports to Canada and 7 percent of total. The United States imported $13.9 billion in PICTE services from Canada, equal to 46 percent of all services imports from Canada and 6 percent of total PICTE services imports. This digital economy is vital to tech workers on both sides of the border. With so much being at stake in both countries—billions of dollars in revenue and millions of jobs—it boggles the mind why telecom regulators are dragging their feet on spectrum.
The 5G Journey was a key theme of this year’s Canadian Telecom Summit. 5G, the next generation mobile network standard, is expected to have ultra-low latency and a download speed of 20 gigabits (GB) per second. That’s 20 times faster than the current 4G download speed of 1 GB per second. But unlike 4G, where humans mainly drove adoption, it will be IoT devices and massive machine-type communications (mMTC) like smart meters that will likely benefit most from the data-bandwidth and latency improvements that 5G communications offers. Software talking to software will drive usage of the 5G network and that will forever change what services are delivered. “With 5G we are talking about completely new business models being created. The real excitement about 5G is how people will innovate on it. The rollout of 5G will unleash a real-time economy. For the first time we can provide on-demand service based on the value of that transaction to the user,” said Alexander Brock of Rogers Communications, a Canadian cable-wireless-content conglomerate.
5G will power self-driving cars but government is taking the slow lane when it comes to releasing spectrum. There is no need to prove the value of spectrum or to prove the need to lessen its scarcity. Canada’s 2014 auction of 700 MHz brought in nearly $5.3 billion, and the 2015 sale of AWS-3 spectrum brought in $2.1 billion. Since commercial spectrum auctions began in the 1990s, the US has earned more than $100 billion on licensing the airwaves. While it is good news that the US has teed up a rulemaking for mid-band spectrum, it is a long time in coming. Canada is slowly moving toward a 3.5GHz spectrum auction planned for the year 2020.
In Canada, Rogers, Telus, Shaw and Bell are in the trial stage of 5G. In the US, Verizon and AT&T are on track to have 5G networks up and running in a handful of cities by the end of 2018. T-Mobile has promised that if it can buy Sprint, it will also be in the running. However, the US is behind China and South Korea and needs to move quickly to catch up.
In addition to spectrum, both countries struggle with optimizing the framework for rollout on the ground. Compared to Japan, South Korea, and the European Union, both the US and Canada have low population density, meaning that it costs more for service providers to roll out 5G compared to other developed countries. There is a tendency for cities to hoard wireless resources, leaving little for the vast rural areas. City leaders often demand usurious prices to access city infrastructure, such as street poles and other vertical real estate which are otherwise used for city signage and lighting. Onerous processes often delay construction of new antenna sites.
5G also levels the playing field between networks in that wireless becomes a substitute for wireline technologies. Just as fiber, coax, and cable networks deliver massive amounts of data under the ground, 5G networks delivers data through the air at similarly competitive speeds. The increasing availability of wireless technologies will pressure the prices of wireline broadband. “Competition will drive 5G in Canada. We need the government to get spectrum in the hands of carriers as soon as possible so we can go after each other,” added Brian O’Shaughnessy, SVP and CTO of Converged Networks at Shaw Communications.
Whereas 4G enabled content and service delivery largely from Silicon Valley, 5G will expand the pie to non-traditional business partnerships and new industries, incorporating new actors and businesses, and enabling new sources of jobs and revenue
With 5G, the economies of the US and Canada can become even more integrated.
