Canada: A Spectrum of Opportunities And Challenges: Canada's 5G Future

Capital Perspectives
Last Updated: June 27 2019
Article by Paul Burbank

5G wireless has been thrust into the public spotlight over the last year. Between the technology's lofty economic potential and the security concerns that it raises, you are bound to have heard something about it in the news.

Despite all this coverage, and 5G's power to reshape the world around us and how we communicate, public literacy about 5G and why it matters remains remarkably low.

What is 5G and Why the Rush to it?

5G refers to the fifth-generation of mobile networks, which will usher in faster, denser and more reliable wireless connections and ultimately give rise to a world of limitless interconnectivity. Stripped down to its essential elements, 5G is a set of standards and technology that will enable these future networks.

Standards are required to achieve consensus about what 5G is, and various standards-making bodies are working to define 5G performance requirements. While the prevailing standards will not be in place until later this year (when the 3rd Generation Partnership Project will release its 5G New Radio standards) we already know that 5G networks will be exponentially faster and more reliable than their predecessors. Even conservative estimates point to end-user experience speeds that are at least 20x faster than 4G networks, with imperceptibly low latency.

To achieve these advances in wireless performance, vendors and companies are researching, developing and commercializing new hardware and software that can be used throughout the 5G supply chain.

The market for 5G technology is heavily consolidated but fully global, with a few major equipment manufacturers dominating the landscape. The Financial Times estimated, for example, that Ericsson, Huawei and Nokia make up more than 90 per cent of "co-operation deals" with wireless network operators worldwide. Companies holding underlying IP and producing inputs – including firms in Canada – want to be a part of these companies' global supply chains.

Viewed through the lens of economic potential, industry and policymakers don't simply see the race to 5G as offering a first-mover advantage – it is a national economic imperative.

5G and the Internet of Things

Hindsight is 20/20. It is easy to look back at each generation of wireless technology and see how transformative they were. Every advance from 1G to 4G brought new network architectures that employed new technology and produced new use-cases and applications.

5G, however, will be fundamentally different. While the 4G decade was marked by convergence around the smartphone, the 5G era will be one of divergence toward the seemingly endless number of devices that will form the Internet of Things (IoT). These ultra-reliable, low-latency networks will permit the society-changing activities that we hear about in the context of IoT, such as fully-autonomous vehicles and drones and remote-robotic surgery.

If this sounds nebulous or unrealistic, it shouldn't – the numbers bear this out. Cisco, for example, estimates that worldwide mobile data traffic will triple over the next three years, when two thirds of all internet-connected devices on the planet will be a part of the IoT.

Networks that transmit exponentially more data also provide an opportunity to collect, process, harvest and use it for commercial purposes. Advances like mobile "edge" computing – processing data at the edge of a telecommunications network without having to backhaul it to centralized cloud servers – will continue to fuel this data boom.

It is trite to repeat that data is the gold or the oil of the 21st century. The economic benefits of 5G will accrue most to countries that transition fastest. So too, will the legal and political risk.

Governments cannot afford to ignore the grave security hazards, and concerns about individual privacy rights associated with data, that will invariably arise in the 5G/IoT era. While we have seen this debate play out rather messily in the news, the national security apparatus continues its quiet deliberation behind the scenes about acceptable vendors and technology.

To modify an old adage: the price of 5G's potential is ongoing vigilance. Policymakers know the path forward requires that both industry and consumers are confident that their vital security and privacy interests are protected.

So, Where is Canada?

Keeping pace in the 5G race requires governments to get several variables right; simplified regulation, widely-available wireless spectrum and private investment are all crucial. Canada's largest wireless service providers indicate they are ready, willing and able to make investments to deploy 5G wireless infrastructure. Indeed, they have already started.

Sometimes it is worth stating the obvious in order to highlight the ancillary: Canadian network operators operate in Canada and are therefore subject to Canadian regulation and cost structures. These two interconnected variables – regulation and cost of deployment – remain the two greatest forces of drag in Canada.

Consider spectrum. Spectrum is the lifeblood of wireless communication. While Canada appears to be on track to release in 2021 its Millimetre Wave spectrum – the extremely high-frequency spectrum that is the basis of so much 5G hype – the United States already began auctioning its off at the beginning of 2019. If past experience is any indication, Canadian companies will also have to pay the government twice as much (on a per-subscriber basis) as their U.S. counterparts to obtain rights to this spectrum.

As with previous iterations of wireless networks, Canada is in a position to succeed in the 5G era and harness its potential. But if Canada wants to be seen as a competitive participant in the race to 5G, then more ought to be done to stay on pace.

Paul Burbank is an articling student with the Fasken Ottawa office who will be joining the firm as an associate in September 2019. He works with the Communications Law group to provide advice on telecommunications and broadcasting in Canada, as well as other regulatory and administrative law matters. Paul also works with Fasken's Government Relations and Political Law group on strategy and compliance matters.     

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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