We Need Cheaper Data, not another Cash Grab

Industry Canada is determining how to structure the sale of rights for the 700-megahertz spectrum that’s recently become available. These are the airwaves vacated by broadcasters as they quit analog television for the digital world. It’s a lot of spectrum up for grabs and Canada could do well if we think smart about this. But it appears we’re at the same kind of crossroads of a few years ago when the government opened up a newer spectrum and brand new entrants (GlobalLive, Mobilicity, etc.) came into the wireless market - but at a high price. We’re doing the same money grabbing analysis again on how much money the government can get for this spectrum. Instead, Industry Canada should really be determining how to enable business to use wireless as a strategic advantage for Canadian business to compete globally. If we were to lower the cost of wireless, Canada could have a competitive playing field against other countries using digital technology as a tool to compete.

I mentioned in a blog article last summer that Canada has some of the highest wireless rates compared to other countries. In maintaining these rates during the last few years at CRTC hearings, the big 3 Canadian telcos- our oligopoly- argued and justified that prices haven’t escalated much over the last decade. They forget to mention that prices have plummeted elsewhere. Looking at the actual market, Deloitte[1] highlighted two key trends that Canadian companies are looking for- i) we want to access data anywhere, anytime, and on any screen but want it economically and ii) we want the traditional five-nines (99.999%) of reliability and quality. What this is telling me is that Industry Canada can go a long way in positioning this new available spectrum with lower cost while maintaining our (superior) national networks if we offer this new spectrum smartly.

In this Internet-driven economy, it could be a huge advantage for Canada if we use this new spectrum as a competitive tool. There’s no reason other than profits that our data rates are as high as they are- not when you compare the data rates of other countries both large and small. With this additional bandwidth, we can price options to the market that can be adopted in business as new tools and capabilities that are currently cost prohibitive. In particular, there are some unique advantages of this 700- megahertz spectrum. This airwave spectrum can penetrate thick walls and travel long distances. So the advantages are you need fewer towers for coverage and we have bandwidth for the increased demands of smarter smartphones and tablets. With this additional spectrum we have lots of space, both in margins and bandwidth, to give Canada a new edge in offering businesses low rates and data anytime, anywhere.

I’m not saying that just because we have more bandwidth that we can automatically cut costs for our data network. What I’m suggesting is that Canada has this opportunity to capitalize on this spectrum and use the information technology as an important part of our competitive positioning moving forward.

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[1] Deloitte 2010 TMT Predictions