Professional Documents
Culture Documents
Leaping Forward-Wireless Broadband and A National Digital Strategy FINAL
Leaping Forward-Wireless Broadband and A National Digital Strategy FINAL
Michael Hennessy has been involved in the communications industry in Canada for 25 years, originally
with the Canadian Radio-television and Telecommunications Commission, then Bell Mobility and prior to
joining TELUS as President of Canadian Cable Television Association. He has also been a member of
the Board of the Canadian Television Fund and is currently Chair of the Banff World Television Festival.
Ted Woodhead has been involved in the communications industry in Canada for 17 years. Prior to
joining TELUS in 2004, he was Director of Regulatory Affairs with Rogers Wireless and prior to that was
Director of Convergence Policy and Infrastructure Access with the Canadian Radio-television and
Telecommunications Commission. He is a member of the Law Society of Upper Canada and was called
to the Bar in 1989.
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Table of contents
1. Introduction ......................................................................................................................................... 4
2. The leap forward we took and how we are doing our part in advocating for a national digital
strategy ......................................................................................................................................................... 4
9. Coda ................................................................................................................................................... 16
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1. Introduction
This paper is intended to provoke discussion about how to promote Canada’s
digital future through investment and innovation across all media platforms. The
opinions expressed however, seek not simply to “ensure” a place in that future
for wireless carriers, but to offer proposals for a national digital strategy that
would recognize the interrelationships and linkages between all parts of the
broadband ecosystem. Our comments use as a starting point, the importance of
the broadband networks as building blocks to support a digital media ecosystem.
In particular, this paper uses the recent launch of national 3G+ mobile broadband
networks by TELUS and Bell (a case study if you will) to illustrate the
opportunities that these networks present and how these networks can, if
properly leveraged and supported, meet broader social, cultural and economic
policy goals. These are the networks that will span Canada from coast to coast
and interconnect Canada with the world. These are the networks that Canadian
application developers and content creators will leverage and use to bring their
products and services not only to Canadians but also to the world. And these are
networks that will truly enable open consumer choice and increased innovation at
the edge of the network.
2. The leap forward we took and how we are doing our part
in advocating for a national digital strategy
TELUS and its over 35,000 team members are proud and excited about our
brand new “3G+” wireless network, which was launched nationwide last month.
Over a billion dollars of investment has resulted in perhaps the largest and we
think one of the most advanced wireless broadband networks in the world.
TELUS’ national 3G+ network is nothing short of revolutionary in terms of its
reach and its openness. When the network was activated on November 5th, in
one stroke Canada was propelled to global leadership in wireless
telecommunications and a substantial percentage of the “digital divide” in
broadband access was closed with wireless connectivity.
When TELUS was planning this next-generation wireless network – which
provides Internet access that is as good as or better than the speed of many of
the wired Internet connections in Canadian homes – we didn’t stop at large urban
centres. We made the capital investment necessary to push this world-class
network deep into rural and remote parts of this enormous country. So much so
that 93 percent of the population and perhaps 40% of the locations in B.C. and
Alberta that Industry Canada recently identified as unserved now have access to
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wireless broadband service. That’s 2,100 designated locations and hundreds of
communities. And all built without a dollar of government money.
Even more compelling our network sent a strong signal to the market that the
idea of walled-gardens as the model for wireless is passé. From the iPhone to
the “Droid”, our wireless business will be driven from the edge of the network
according to consumer demands and fuelled by the hundreds of thousands of
applications now driving innovation, creativity and choice.
What is perhaps most remarkable was that this investment, in conjunction with a
dual network infrastructure build by Bell, was accomplished with private money in
the midst of a generational recession. There is a very important lesson here to
consider as Canada struggles to address broadband challenges going forward.
With a deficit heading towards $60 billion, there is no way the government will be
able to spend to build the network platforms we need to drive an innovation
agenda. If we don’t rely on and encourage private sector investment the next
generation of broadband networks will not be built.
Step 1 will be stimulating private sector investment in broadband, wireless and
wireline networks in any national digital strategy.
Step 2 is even more important and that is really understanding all along the
media value chain that technology has placed the consumer in charge,
Step 3 is recognizing that while there are no sustainable protections defined by
political borders for media businesses, broadband networked nations are
gateways to prosperity in a borderless media market. Where there is challenge,
there is also opportunity.
In the 1850’s, Sir Francis Hincks had a vision of a railroad linking all of British
North America. His vision, shared with others, culminated in the expansion of rail
networks across Canada, moving him to exclaim “railways are my politics”.
Between 1850 and 1860 rail lines expanded from 22 miles to 2,000 in both
Ontario and Quebec. This was the result of a grand vision – a vision not without
controversy – that hastened Canada’s industrialization through the development
of home markets and the opportunities that foreign markets provided for
Canadian goods and services, once we could quickly and efficiently deliver them.
Just as our 19th century economy relied and prospered on the steel ties that
bound a nation, it gave way to 20th century and complementary networks made
of asphalt and copper. These networks once constructed enabled the “whole”
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economy. They were not an end, in and of themselves. Rather they enabled
economic, social and cultural benefits as well. That is what made them the
defining elements of their time. These developments defined the “old world”
economy but there are lessons to be learned for the “new world” economy as
well.
That said, while yesterday’s investments provided a foundation for these next
generation builds, we are only as good as the future billions of dollars in risk
capital all our enterprises will need to invest in networks, applications and
software development and the enablement of content available on any platform
and on demand.
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4. Mobile wireless broadband can help drive this future!
As noted above, TELUS’ launch of its competitive 3G+ High Speed Packet
Access (“HSPA”) network earlier this month brought the prospect of the broad
availability of always on, nearly ubiquitous mobile broadband to reality. Canada
now has 3 national advanced HSPA networks and more networks are planned to
launch in early 2010. That is an enormous addition to our advanced broadband
pool, and a very deep pool it will be.
New 3G + and later, LTE networks, will move from being considered a mere
complement to fixed broadband and the Internet overall, to an integral
component that will catalyze increased investment and innovation. This trend
would be consistent with the strategy embraced by TELUS beginning in 2000 to
invest in the future importance of mobile wireless and data.
Wireless
Wireline LD Wireline 40%
23% LD
Wireless 7%
18% 28% 70%
Wireless
Data Wireline Data
Wireline Local Local 8%
10% Wireline
49% 23%
Data
22%
20001
20091
1 12 months ending June 30, 2000 and June 30, 2009, respectively
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good as the speed of the typical wired Internet connection in urban Canadian
homes. In all, over 93% of Canadians are within the coverage area of these new
wireless broadband networks. This is a step change in meeting the policy goal of
bridging the digital divide and it was achieved without a dollar of government
money.
* Based on Rogers’ Sept. 14, 2009 public announcement of HSPA+ coverage within the cities indicated (using associated census metropolitan
areas).
** Based on coverage maps made publicly available by Rogers on Oct. 23, 2009.
Coverage areas are approximate as of October 2009. Actual coverage and network service can vary and are subject to change
It is not a boast to state that these are impressive achievements bringing next
generation broadband to previously unlikely places like Masset, Bella Coola and
Quesnel, British Columbia. There is little dispute that the growth of the use of
information and communications technologies (“ICTs”) has irrevocably altered
our society and the global economy in the post-war era. Broadband will
irrevocably alter our economies as well and in digital media broadly defined. But
the appetite for bandwidth seems insatiable and the changes wrought to
traditional industries are as dramatic as the opportunities are for the new. The
question is then, “Are we going to seize and leverage these opportunities?”
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5. Canada needs a national digital strategy
What is needed is the Government’s attention on the importance and need for
policies that allow all Canadians the opportunity to exploit this broadband future -
today. Now that we have built and continue to build out the underlying
broadband infrastructure, leveraging the capabilities of those networks and the
development of a broadband economy should form part of a larger industrial
strategy. That industrial strategy for Canada would include:
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• The principle behind stimulus is to invest not only in stimulating
platform deployment but to promote creation from software to
stories along the media value chain
3. Spectrum auctions should be fair and open to ensure to ensure that the $2
billion dollar overpayments in the last AWS auction are not repeated again
• Not a dollar of the total $4.2 billion auction proceeds went into
stimulating digital media or digital economy initiatives but got lost
forever in the federal government’s treasury
• $4.2 billion would have closed the digital divide for a decade
4. Canada and the world are our markets; we cannot be inward looking
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• Canadian innovation can succeed at home and on the world stage
if properly incubated and nurtured
• The Internet allows success in long tail and niche markets more so
than protected broadcast markets
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• Walled-gardens are anachronistic in an Internet space but
managed networks using IP-based technologies still have a place
for some consumers and businesses that need to exploit their
intellectual property
• Balanced copyright can legitimize fair use and the right to create
managed opportunities to exploit and monetize content in tandem
with open network environments
10. The consumer and public are already shaping markets and we need to
follow their direction to succeed
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content providers can create and innovate for years to come. Policy makers should
acknowledge and encourage these investments made in the midst of a global economic
crisis and recession and ensure that regulation and taxation are employed as tools only
where necessary and in the least intrusive manner feasible in order to further similar
investment behaviour. To do otherwise would interfere with the ability to recover these
investments over a reasonable period of time and would have the unintended but
disasterous consequence of creating disincentives to invest.
$229M
$181M
$116M
BlackBerry
Q3-07 Q3-08 Q3-09
Tour
Globally, this trend is confirmed and interestingly, but not surprisingly, video content
plays a growing and significant role in the transformation of mobile broadband wireless
usage. This forecast of the importance of data, but most importantly of video data, in
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global mobile data growth should provide ample impetus for the public policy apparatus
to take notice and act. As O2's CTO, Derek McManus, said:
For mobile network providers, the Internet has required an increase in network capacity
and will continue to do so for the foreseeable future and beyond. As illustrated by the
chart below, the global growth in mobile data traffic is quite staggering.
19%
10%
64%
7%
For network providers this is both a blessing and a curse. Increased mobile data use
expands the usefulness and revenues associated with the use of the devices and the
networks they ride on beyond basic voice. However, it also is the canary in the coal
mine because of the spectrum and backhaul capacity required to handle exponential
traffic growth, particularly video. Wireless also remains constrained by the laws of
physics which is near to immutable – spectrum shortage and availability! Spectrum is
the real estate upon which mobile broadband will be delivered. Radio spectrum is a
scarce public resource. Spectrum is more rapidly consumed when consumers and
businesses adopt more and more data applications. As we move inevitably toward a
converged mobile broadband data world, policy makers will need to find ways to make
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available more spectrum, in quicker cycles, and in ways that don’t distort the market-
based value of the resource, like auction set asides and arbitrary spectrum caps do, but
also in ways that don’t negatively impact the creation of the applications, content and
services that will be developed by creators and innovators. The new reality for wireless
services is a need for even more spectrum and greater scale, as a prerequisite for next
generation broadband demand.
The scale and scope of this problem can be illustrated in the following chart that shows
that approximately 149,000 terabytes of data will flow across TELUS’ network and by
2018 will consume more than TELUS’ available spectrum capacity. By way of
comparison to demonstrate the speed at which capacity is consumed, in 1993 it is
estimated that total Internet traffic amounted to 100 terabytes. In June of 2008, Cisco
estimated Internet traffic at 160 terabytes/second (for those who need to know, this is in
the order of 5 Zettabytes for the year. Oh, and 1 Zettabyte = 1 billion terabytes). While
total Internet traffic will continue to increase, wireless broadband Internet traffic will
make up an increasing share of it.
The graph above amply illustrates the problem. There will, in the very near future, be a
need to provide more spectrum to operators in order to service the burgeoning
opportunities for applications and content over mobile wireless broadband networks.
For network operators, the planned auctions of spectrum at 700 MHz and at 2.5/2.6
GHz will provide, in the short term, an opportunity to ensure that adequate spectral
resources are available, provided they are made available through an open auction
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process that does not employ market distorting set aside frameworks or spectrum caps
designed to manipulate outcomes.
Beyond that however, the auction of spectrum will provide to public policy makers an
opportunity to apportion funding, not otherwise available given current economic
circumstances, to make public investments in furthering a national digital strategy that
would increase Canada’s social, cultural and economic welfare by encouraging the
creation, adoption and use of ICTs and, in particular, application and content creation.
TELUS called for precisely this use of funds garnered from the recent AWS auction that
netted the Canadian treasury some $4.2B. These are areas (Canadian application and
content creation and innovation) are fertile ground for a properly conceived and
executed national digital strategy that would have an enduring impact on investment
and innovation in Canada. The billions of dollars that will be raised through upcoming
and future auctions should be invested, at least in part, back into the digital economy in
order to support application and content creation, broadband expansion, the digital TV
transition and the stimulation of Canadian new media opportunities.
We welcome and encourage the debate. Perhaps these 10 principles can serve as a
catalyst to realizing a vision and action plan for launching an ambitious national digital
strategy that will serve to enhance and sustain Canadians for years to come. The
wireless broadband example provides a window into a rapidly growing and
transformative shift in consumer preference. It serves as a signal that mobile wireless
broadband is moving from being a complementary lesser cousin of traditional wireline
broadband to a significant component in a converged broadband environment.
9. Coda
Will Canada be ready? Will Canada move quickly to recognize the linkages and
interrelationships in the whole converged broadband ecosystem? Will Canada invest in
the future? Who will champion this vital initiative? Who will have the vision and be the
champion? Who will be this century’s Sir Francis Hincks? Will Canada have a national
digital strategy that will keep pace with and exploit the world class network
developments and achievements that are occurring as we consider these fundamental
questions, or will others pass us in the fast lane while we ponder?
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