Canada needs to be a global leader in 5G.

That simple statement could, and perhaps should be the focus for Minister Champagne’s digital connectivity strategy.

Every funding program, spectrum allocation, infrastructure policy, should be structured toward achievement of that objective. Easy to remember, it makes a good soundbite: Canada needs to be a global leader in 5G. What is your strategy? Canada needs to be a global leader in 5G.

However, “Market forces alone will not deliver fast 5G internet to rural areas.” That statement, an extension of a foundational truth that has underpinned government broadband incentive programs for two decades, was the title of a recent article on Policy Options. “Canada must adopt measures that ensure universal, high-quality internet access and encourage early adoption of emerging 5G wireless technologies.”

No argument from me. Current rollouts of 5G promise to have service available to at least 70% of Canada’s population by year end.

Now, the authors claim Canada’s current broadband objective, that every Canadian should have the option to subscribe to a 50 Mbps (down) / 10 Mbps (up) with an unlimited data option, is already obsolete, due to the availability of much higher speeds in urban areas. I think this assertion needs further discussion. “The objective would be to give virtually every person access to essentially the same quality of internet connectivity, whether they reside in a major city or a remote Indigenous community.” While this may be a noble objective, it strikes me as somewhat naive. Indeed, the authors themselves acknowledge that.

FTTH may not be feasible for roughly 5 per cent of households – about 700,000 to 800,000 homes. Therefore, future-proofing the hardest to reach populations will depend on a combination of fixed wireless access (using 5G technology) and the emerging generation of globe-spanning low-earth-orbit (LEO) satellites, such as Telesat’s Lightspeed and SpaceX’s Starlink, to provide access where FTTH is not possible.

So let’s not get hung up on the specifics of what technology delivers “essentially the same quality of internet connectivity.” I tend to subscribe to the view that there are compromises necessitated by geographic considerations that preclude equivalent connectivity in remote areas compared to the services available in major centres. However, as Jagger and Richards wrote,

You can’t always get what you want
But if you try sometimes, well, you just might find
You get what you need.

Fixed wireless and low-earth-orbit satellites are great technologies, providing broadband connectivity that meets and exceeds the current aspirational objective set by the CRTC and the government for universal access. The services offered by these technologies meet and exceed the needs of most Canadians.

The Policy Options article expands on a Public Policy Forum discussion (and paper [pdf, 1.8 MB]), “Future Proof: Connecting Post-Pandemic Canada”, that contains two recommendations:

1. Canada commit to universal provision of future-proof digital connectivity infrastructure—connectivity that is scalable, so it can support data rates that far exceed the needs that can be foreseen today.
2. Canada implement a national strategy to be among the global leaders in 5G with action by government to remove roadblocks on both the supply and demand sides.

While I might quibble over the phrasing of the first recommendation, I can fully endorse the second.

The paper says there are three areas for focus to encourage leadership in 5G connectivity: Network rollout; Spectrum allocation; and, Access to structures (poles, buildings, and trenches) and passive infrastructure.

Universal access to fibre to the home simply isn’t possible in a country as vast as Canada, with harsh winters that regularly disrupt aerial cables and topography like the granite of the Canadian Shield that makes buried cabling oppressively expensive. However, the paper suggests we use 5G technology connected by fibre and LEO umbilicals.

There is a powerful synergy between 5G provision and future-proof Internet access. This is because the extension throughout the country of fibre and LEO constellations such as Telesat’s provides the backhaul capacity needed by 5G networks, while 5Gpowered fixed wireless can provide future-proof Internet connectivity in many places where fibre cannot reach. The functionality of wired and wireless connectivity is converging, with 5G as a major step towards providing the equivalent of fibre through the air.

There are strong comments in the paper, not so subtly calling for significant changes to Canada’s spectrum policy.

Canada should allocate spectrum for 5G more nearly in step with the U.S. than is currently the case. In addition, the design of the 5G spectrum allocation process must take into account requirements to make the best use of 5G technology—e.g. by providing contiguous blocks of spectrum to support the highest speed. Spectrum policy should balance the objective to promote competition with the need to maintain the incentive to invest in new technology for which market returns are uncertain at the outset.

To be a global leader in 5G, Canada needs to develop such a strategy, and then must take the steps to implement that strategy across all agencies. “Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.”

And that brings us back to the question: Will Minister Champagne make 5G leadership a central theme of his approach to digital connectivity?

Throughout the COVID-19 pandemic period, I have taken advantage of continuing education opportunities from the International Telecommunications Society (ITS), and I have promoted many of its sessions on this blog. ITS serves as “a global platform for industry, policy makers and regulators to create a 360-degree view of an issue from the perspective of different regions and jurisdictions.”

I want to highlight another webinar coming up in just over 3 weeks (November 22, at 8 am Eastern). It is especially timely as the new government in Canada prepares to reintroduce legislation to regulate “Big Tech” and internet content.

The role of digital platforms and how to regulate them has become the new frontier for regulators and policy maker around the world. There is a tension between competition, choice, and consumer protection on the one hand, and innovation, investment incentives and entrepreneurial freedom on the other.

“Digital Policies – an East-West Perspective” will discuss approaches to digital platform regulation in the US, Canada, Europe, South Korea, and Japan. This webinar will highlight the most important aspects of this topic:

• Alexandre de Streel, academic co-director of CERRE and professor at Namur University, will present a European perspective;
• Seongcheol Kim, Director and professor at the School of Media and Communication, Korea University, Seoul, will share insights into the discussion in South Korea;
• Seiji Ninomiya, Director General of the Telecommunications Bureau at the Ministry of Internal Affairs and Communications (MIC), Tokyo, will present Japan’s approach; and
• Michael H. Ryan, Principal at MHRyan Law (London), will provide insights on how digital policy compares in North America and Europe.

The session will be moderated by Georg Serentschy, a past chair of BEREC, the Body of European Regulators for Electronic Communications.

Michael Ryan is a familiar name to the Canadian regulatory scene, having literally written the book on Canadian telecommunications law. It is certain to be an interesting session, of relevance to Canadians who are watching for the government’s digital legislation.

Registration is free.

Frequent readers of this page know that the issue of affordable broadband is one of my special interests, and has been for more than a decade.

There was a new report that landed on my desk last week from the National Governors Association, seeking to expand the affordability of broadband services, with strategies characterized as having “emerged among leading best practices”:

• Providing direct customer assistance;
• Incentivizing affordable rates through grant programs;
• Expanding service options; and,
• Investing in infrastructure and community anchor institutions.

The report cites data from Pew Research Center that “show adults making less than $30,000 annually are half as likely to report having home internet access as adults making $75,000 or more, with only 57 percent of low-income households reporting access in 2021.”

While only 57% of low-income households report having home internet access, the same survey indicates 86% of low-income households are using the internet. Nearly 30% of low-income households are using the internet without having access at their own home. In 2005, just 7% of low-income households had home internet access while 49% used the internet.

Pew Research is a data rich source of information for strategic policy development. Canadians should be envious. I’ve often said that we need more data to help with decision-making, especially in the delivery of communications services to under-served populations.

In early September, Environics Institute released “Lessons Learned: The Pandemic and Learning from Home in Canada” [pdf, 4.6 MB]. The report is based on a survey conducted in late November / December of 2020.

Keeping in mind that this was from a year ago, during some of the darkest days of the pandemic, I found this excerpt to be troubling:

Canadians are more likely than Americans to express concerns about the affordability of their internet or cellphone connections.

Not surprisingly, the level of concern in Canada about internet and cellphone affordability is much higher among those with lower household incomes.

Keep in mind that compared to our neighbours to the south, Canada appears to have higher levels of adoption of connectivity among lower income households, despite the availability of direct government funding for Lifeline communications services in the United States.

There isn’t an easy answer to the issue of affordability. The knee-jerk reaction by some is that lower prices are the answer. While it would be popular – who doesn’t want lower prices for everything? – in reality, lower average prices simply won’t solve the issue for the most vulnerable households, who need special affordability programs for a variety of essential services.

To date, in Canada those targeted programs have been initiatives created (and funded) by the private sector.

The Environics report had a thought provoking section with “Concluding reflections”:

One of the great strengths of Canada’s systems of public education has been their ability to promote equality of opportunity. Through publicly funded education, students from different backgrounds can benefit from well-trained teachers and well-equipped classrooms. For many students, the short term effect of the COVID-19 pandemic, through the switch to online learning, has been to effectively “privatize” our educational infrastructure, as families have had to rely on their own resources to provide the spaces, tools and connections needed for ongoing learning.

Could or should government be doing more with direct social services funding for services and devices?

What new approaches should be considered for more equitable delivery of digital government services?

Canadian government policy for auctioning radio airwaves may be costing you $100 per year on your mobile phone bill.

That’s what Robert Crandall (a noted economist from the Technology Policy Institute in Washington) wrote in Policy Options last week. In “How Canada’s wireless spectrum policy drives up mobile rates”, Crandall says

Canada’s three national carriers have had to charge their subscribers an average of $74 per year – equal to 9.4 per cent of the average bill – just to cover the cost of acquiring these spectrum rights, which are long-term investments that must earn a return for their shareholders. The prices paid in July’s auction could add another 3.1 percentage points to the average bill, or $25 per subscriber per year, raising the total cost per subscriber to almost $100 per year.

In his article, Crandall calculates that Canada’s spectrum policies have driven national wireless service providers to end up paying “more than 15 times the prices paid by carriers in Germany, France or the United Kingdom” for the airwaves that carry our mobile calls and data. In 2020, he says this was effectively “a hidden tax on Canada’s mobile users of $1.76 billion”.

Crandall’s article reinforces the view from PwC that I discussed last week in “Looking at cost and quality of networks”. As I wrote,

The cost of wireless spectrum was found to be the main regulatory cost driver. When PwC reviewed the mid-band 5G spectrum auctions, it found that Canada’s national mobile operators paid $2.62 per MHz/pop nearly three times what was paid by US mobile operators ($0.94 MHz/pop). Even including the regional operators that benefited from set-aside spectrum discounts, Canada’s average of $1.81 per MHz/pop ranked highest in the world for 5G mid-band spectrum, ten to twenty times higher than European peers Germany ($0.19), France ($0.16), and the UK ($0.09).

Are government policies working at cross-purposes, seeking to lower consumer prices, while increasing costs for service providers? That’s a $100 per year question.

A new report from PwC was released earlier today, “Understanding the cost and quality of networks across the G20” [pdf, 4.2 MB]. The report examines the factors impacting network costs and quality for Canada compared to the rest of the G20, by building a “network build cost index” and a “network quality index”, which assesses network speeds, 4G availability, and consumer video experience.

Today’s report builds on PwC’s 2019 report, “The importance of a healthy telecommunications industry to Canada’s high-tech success” [pdf, 2.3 MB], that found Canadian Mobile Network Operators (MNOs) have:

• 2 times higher capital expenditure (CapEx) per wireless subscriber;
• 3 times higher spectrum costs; and
• 80% smaller scale, resulting in lower purchasing power.

In the new study, PwC found Canada ranks highest in the G20 on the network quality index, leading in terms of network speed, and being among the top countries for 4G availability and video experience. “This means that Canada has both the highest costs in the G20 to build wireless networks, while maintaining leading quality networks.”

The report notes that Canada is the second least densely populated country in the G20, behind only Australia. However, in contrast to Australia, “Canada has many more small towns dispersed across the country, which in part contributes to 50% more cell towers per capita, and 33% higher capital expenditure.”

The cost of wireless spectrum was found to be the main regulatory cost driver. When PwC reviewed the mid-band 5G spectrum auctions, it found that Canada’s national mobile operators paid $2.62 per MHz/pop nearly three times what was paid by US mobile operators ($0.94 MHz/pop). Even including the regional operators that benefited from set-aside spectrum discounts, Canada’s average of $1.81 per MHz/pop ranked highest in the world for 5G mid-band spectrum, ten to twenty times higher than European peers Germany ($0.19), France ($0.16), and the UK ($0.09).

The PwC report also considers secondary cost factors, such as: wages – Canada’s average is 5th highest in the G20; the impact of weather – limiting construction season and increasing maintenance costs; and, offsets from Canada’s favourable corporate tax rates and lower electricity prices.

Using Opensignal data, PwC’s report found that “Canadians benefit from the fastest networks in the G20 at 59.6 Megabits per second (mbps), slightly faster than South Korea, which is a significantly smaller geography country, and more than seven times faster than India (the slowest).” Canada was in the top 5 for 4G availability, with a connection rate of 93.5%, slightly behind Australia (94.0%), India (94.5%), the US (96.1%) and Japan (highest at 98.5%). With a score of 74.8, Canada ranked third in the G20 for video experience, slightly behind Australia (75.6) and Japan (77.6).

The report’s conclusion? PwC found that costs of building networks in Canada were impacted by its population density characteristics, geography, climate, spectrum policy and regulations, and scale. Still, despite mobile operators having significantly higher cost structures to build networks in Canada compared to other G20 countries, the quality of Canadian mobile networks are atop the G20 and among the best in the world.

As PwC notes, “It’s an achievement worth celebrating, but one that should be recognized in the context of what it takes to build and maintain wireless networks in Canada—especially as 5G networks are rolled out across the country.”