Cellphone Spectrum Set-Aside Simply Step One

My weekly technology law column (Toronto Star version, Ottawa Citizen version, homepage version) focuses on the recent government spectrum allocation announcement.  I argue that new wireless competition will be welcome news to consumers, however, it represents only part of the solution.  The day before the Prentice press conference, U.S.-based Verizon Wireless shocked the industry by announcing that next year it will adopt an "open network" approach that will remove the restrictive walled garden that typifies the incumbent carriers.  Instead, its customers will be permitted to use any device and any application that meets minimum technical standards. The Verizon decision comes just weeks after Google introduced a partnership with leading U.S. carriers such as Sprint and T-Mobile to create the Open Handset Alliance, which will similarly enable consumers to use devices that are fully open to new innovation and third-party programs.

This rush toward an open cellphone market stands in sharp contrast to years of restricted networks that left decisions about new devices and functionality strictly in the hands of a few dominant cellphone providers. 

Over the past year, the emergence of the Apple iPhone, which demonstrated the potential functionality of new devices as well as the frustration with phones that are locked to single carrier, along with the growing awareness of the negative impact of closed networks, has persuaded many regulators and companies that open is the way to go.

The open network approach has yet to find much support in Canada, however, as the new spectrum auction rules did not include any open network requirements.  In fact, while U.S. regulators have begun to prod the carriers to move toward greater openness by including open standard requirements into its forthcoming spectrum auction, Canadians are left with a closed market.  Ottawa does not appear ready to help since Prentice will likely discard the consumer-first slogan when he introduces new copyright laws next week that could make it illegal for Canadians to unlock their cellphones.  Moreover, while there will be another opportunity to inject both openness and competition into the market during the next spectrum auction in 2011, four years is a long time to wait to catch up to the rest of the world. Indeed, with government on the sidelines and the established competitors focused on protecting their market share, the best chance for a truly open Canadian wireless market may rest with the new entrants, who would do well to differentiate themselves not only on price, but also by embracing a more innovative, open strategy.

One Comment

  1. public use of canadian resource?
    Could you comment on the idea of public access to the spectrum?

    I sent this email Nov. 29th and no reply yet.

    Director General,
    Telecommunications Policy Branch,
    Industry Canada, 1612A,
    300 Slater St.,
    Ottawa, Ontario,
    K1A 0C8

    Director General,

    regarding: Gazette Notice DGTP-002-07

    with the just announced AWS spectrum auction, I was wondering if any part of the spectrum is reserved for public use?

    I would like to suggest that 10 percent of the spectrum be reserved for public service use by communities, libraries, schools and universities, the CBC and or private citizens.

    If this reserved spectrum is not fully used by the public, it could be leased out to businesses pending applications from the public.

    Since the spectrum is considered a resource of Canada, I do not believe the whole resource should be sold.

    thank you,