Can changes to spectrum policy help Canada become more effective in bridging the digital divide?
I read some interesting articles recently that suggest we can do better. “Suggest” may be too delicate.
Writing in the Globe and Mail, Senior Business Writer and Columnist Rita Trichur looked at the election platforms of the major parties and came away disappointed. “Although the Liberals and the Conservatives are vowing to stop spectrum speculation, their proposed solutions are, in a word, weak.”
Her article noted that the Liberal platform said that if wireless deployment milestones aren’t met by spectrum holders, the government would “mandate the resale of spectrum rights and reallocate that capacity to smaller, regional providers.” As Ms. Trichur observed, this may sound nice in theory, “but let’s not forget that smaller regional providers may not have the financial wherewithal to pick up that slack. In fact, Western Canadian cable company Shaw Communications Inc. is selling itself to Rogers Communications Inc. precisely because it determined that 5G investments would be too costly to handle on its own.”
This is a point that merits repeating. Many of the spectrum licenses were awarded on a Tier 2 basis covering an entire province in a single license, or in the case of a handful of provinces, 2-3 licenses to cover the entire province. The deployment milestones in those licenses are generally based on a percentage of the total population within the license area and can be satisfied simply by serving the major urban centre at the heart of the licenses. The major carriers have generally deployed networks in both urban and rural areas. In the latest Communications Monitoring Report, the CRTC observed that 99.7% of Canadians had access to mobile service by the end of 2019 (two years ago). Twenty-four out of twenty-five Canadians (96%) had access to LTE.
We have seen 5G deployment announcements from the major carriers showing hundreds of communities, large and small. The issue with spectrum under-utilization has generally not been from the major carriers; the problem has been with companies that have speculated and squatted on spectrum set-asides.
That takes us to another article I read, focusing on improving spectrum policy to help with bridging the rural divide. TELUS writes, “Recent government policies have made the digital divide in Canada worse, not better. Across Canada, but particularly in rural areas, better policies are needed.”
The TELUS article links to a series of reports:
- Spectrum policy is disadvantaging rural Canadians. Unlocking available and unused spectrum could immediately boost hundreds of thousands of homes to 50/10 Mbps.
Cracking the rural broadband challenge: How to undertake a nation-building exercise, leveraging a core set of business principles, to extend connectivity to rural, remote and Indigenous communities across Canada. [pdf, 5.9MB]
- A report on rural connectivity concludes that spectrum set asides hurt rural Canadians by diverting it away from carriers wanting to deploy it and allowing the spectrum to lay unused.
The Government’s Spectrum Policy Will Reduce the Quality of Wireless Services for Rural Canadians [pdf, 1.5MB]
- A GSMA Intelligence report that concludes that, where 5G spectrum is held back from the market unnecessarily (e.g. through set-asides), then 5G services are likely to suffer and operators may overpay for spectrum, risking network investment and harming consumers.
5G and economic growth: An assessment of GDP impacts in Canada [pdf, 3.3MB]
TELUS says “In particular, poor spectrum policy has allowed this crucial element needed for rural connectivity to remain unused, leaving some Canadians without suitable Internet.”
The new government brings with it an opportunity for a fresh look at spectrum policy, perhaps as part of the development of an accelerated connectivity strategy.
Ms. Trichur wrote, “Canada is the land where smart industrial policy goes to die.”
It doesn’t have to be that way.
I’d like to greet the new government with optimism.
Maybe, just maybe, things will get better, smarter, more effective, even if it is just a little bit better, a little bit smarter, a little bit more effective, every day.