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Building Canada’s 5G future

As governments around the world scramble to support the deployment of 5G, questions remain about who will reap the potential benefits, pay the costs and more importantly, who should control the process.

Smart appliances, drone, autonomous vehicle and robot arranged in '5G' text

Canadians are about to get some answers as a panel of experts is expected, in June, to release a summary of stakeholder opinions, including whether power-sharing between federal regulators and local authorities over infrastructure needs to be modified.

“Expect a fight,” said John Lawford, executive director of Public Interest Advocacy Centre, an Ottawa-based non-profit consumer protection group. Such moves aren’t about slashing red tape and increasing efficiency, he says. Instead, they are designed to cut costs for national carriers like Bell and Telus. “It’s about socializing risks and privatizing profit.”

Counting on 5G to usher in the next phase of life-changing technologies like self-driving cars and virtual reality devices, politicians everywhere are tweaking regulations to speed up the rollout. To incentivize carriers, U.S. federal regulators have already decided to cap fees and curtail local authorities’ powers; controversial moves that mayors in many states are fighting in the courts.

Canada is mulling similar measures, with regulators angling for increased authority over poles and antennae, the infrastructure posing the biggest pain point for the network upgrade. Last year, the government commissioned a panel to look into its entire communications legal framework, and their findings might help shape future telecoms legislation. Federal rules mostly trump local authorities when it comes to telecommunications infrastructure, municipal approval is generally necessary, and fees must be negotiated for certain sites. It’s a scenario that “presents challenges for efficient and effective network deployment,” according to the Canadian Radio-television and Telecommunications Commission.

So what’s behind the ruckus surrounding 5G, and is it really worth it?

At its most optimistic, 5G is expected to be hundreds of times faster than current networks, enabling customers to download a two-hour movie in seconds. It could also help relieve network congestion, which is expected to get worse over time, given that mobile data consumption continues to soar. Some enthusiasts say it is impossible to measure how endless numbers of seamlessly connected devices could impact innovation and stimulate the formulation of new products because problems that were once deemed intractable could suddenly disappear with 5G.

However, countries that are not among the first adopters risk losing their edge. “5G deployment is critical for the upcoming cyber-physical way of living,” said Xavier Fernando, an electrical and computer engineering professor at Ryerson University in Toronto. “It is ‘a must have’ technology and a delay in deployment will definitely have a negative impact on the Canadian economy.”

So strong is the worry about losing “the 5G race” that some supporters of U.S. President Donald Trump reportedly floated the idea of nationalizing the efforts, with concomitant telco freakout. Meanwhile, Canada is still under pressure to ban equipment from Chinese telecommunications giant Huawei over concerns about handing over control of such a potentially vital and sensitive system.

Indeed, the payout could be substantial, with 5G possibly adding as much as $40 billion annually to Canada’s economy by 2026, according to a new report from Accenture.

5G “is not only going to boost innovation in Canada,” tweeted Minister Navdeep Bains, Canada's top telecom policymaker, but it could also “provide more Canadians with better, faster and more efficient connectivity.”

But no one knows how well 5G will actually work as it does not yet exist anywhere in the world today. And the obstacles to full deployment are significant. For starters, 5G signals only travel short distances. They struggle to penetrate through walls, buildings, and even leaves. Furthermore, the network required to support and maintain 5G will require thousands of new poles, antennae, and power points — which will cause headaches to install. Public and private buildings, and street furniture like bus shelters, lamp posts and park benches will also need to be co-opted. It also has the potential to spark outrage by residents who are already wary of the health effects of microwave technology and who may have to live with more cluttered streets.

It’s unclear who will want to pay for the zippy new services. Canadians already swallow some of the highest mobile rates in the world, and 4G is generally deemed adequate for most users’ needs. Will customers want to cough up for the ability to download the Encyclopaedia Britannica every five seconds while roaming the streets? In fact, the consensus is that industry will likely make the most use of 5G, which will also result in reduced latency (the delay between instruction and execution). In other words, the turbo-charged networks will make all sorts of automation much more feasible — albeit at the expense of redundant humans —, but may be of little interest to the average consumer in the short term.

Critics say 5G won’t solve the biggest Canadian telecommunications challenge — poor internet connections outside major metropolitan areas. While urban capacity will increase thanks to 5G, telcos are unlikely to extend the service to rural communities. The cost and low return on investment of installing infrastructure may not make it feasible.

“It’s hard to see the benefits for most consumers,” said PIAC’s Lawford.

Still, many argue that installing 5G is critical to everyone’s future economic well being and that the current legal framework threatens to bog down the latest as well as the not-thought-of-yet technologies.

Interestingly, an appointed panel made the same arguments more than a decade ago, though why ISED Canada declined to take its advice is unclear.

“New legislation should provide a single regulatory body, such as the CRTC, with direct authority to resolve disputes, order access and establish guidelines (as appropriate) with respect to all passive infrastructure owned by utilities such as power, gas, water and local authorities,” said the CRTC in its submission. “This additional authority should also be applicable to non-traditional structures for which access will be key for the efficient deployment of many future technologies. This would include light poles, bridges, water towers, street furniture, and privately owned buildings such as high-rises and office towers.”

Other stakeholders, including national carriers and the Competition Bureau, echoed these sentiments in various missives. “There’s plenty of anecdotal evidence that shows [utilities] have slowed the process down,” said Philip Palmer, a telecommunications lawyer and board member of Internet Society Canada Chapter. “There are incentives for them to do so.”

Municipal governments, unsurprisingly, disagree, saying the current cooperative regime is better suited to the complexities of managing the urban environment. A successful and safe deployment requires a deep understanding of all utilities’ requirements, said the Federation of Canadian Municipalities (FCM), the national voice of Canada’s cities. With regards to access to municipal assets, local governments, and by extension taxpayers, should not be asked to subsidize carriers’ profits.

There is no evidence local authorities present a threat to the smooth rollout of 5G, they say. Indeed, the success of current and previous generation of networks is proof they can help deliver a world-class service. Why wouldn’t Canadian cities, which compete to attract cutting-edge companies, want the best technology possible? Their exclusion from critical decision making will likely spark legal chaos and possibly unjust higher tax bills for all Canadians.

“Municipal officials across the country have demonstrated their ability to work with carriers to get the job done,” said the FCM, whose members include Canada's largest cities, small urban and rural communities, and 17 provincial and territorial municipal associations. “Municipalities are the only entity capable — technically and legally — of carrying out this vital role for the benefit of all users.”

Municipalities are concerned with issues of urban design, community aesthetics, safety, affordability and fair return on municipal investments,” argued the city of Calgary, in its submission. “However, these concerns are often overridden by federal decisions which favour market interests.”

While it’s too early to tell what the expert panel will recommend next year — and whether the government will take their advice this time around — James Kosa, a partner at WeirFoulds LLP in Toronto says the CRTC is unlikely to get its wish. “Until there’s some compelling public policy reason” to alter the current legal arrangement, “I don’t see there being much change,” he says.