Canada is a great country. Our mobile rates, however, are not. Canadian costs are almost four times higher than the international average. Overall, we have lower network investment and higher consumer prices.
To put it into perspective, if spectrum costs were as low as those paid by European carriers, Canadian wireless rates could be as much as 12 percent lower.
One factor that could help? Changing the way we do spectrum auctions of radio frequency for telecommunications purposes. Benjamin Dachis outlines the issue in this intelligence memo for C. D. Howe Institute, Canada’s Spectrum Auctions: Too Slow and Too Pricey. As he explains:
“Canada lags peer jurisdictions in the timing and quantity of available spectrum for economically critical 5G spectrum bands. When it finally conducts its 5G auction in June, 37 other countries will have already assigned the band. Such regulatory impediments slow the rollout of 5G and undermine Canada’s technological competitiveness.”
Improving the framework and timeliness for allocating spectrum is important, he argues. Doing so would address high relative costs, expedite the now slow release of new spectrum, and ensure competitive availability. Because, Dachis writes, while commercial bidders drive prices, auction design sets the table, sometimes unhelpfully.
Policymakers should avoid high minimum auction prices, artificial spectrum scarcity, and rules that may allow competitors to foreclose competition and incent bidding wars, he recommends.
The federal government providing a clear and predictable regulatory framework for providers, especially one that balances price competition with incentives for ongoing investment, is crucial to better serving Canadians and providing them with not only cheaper but better telecommunications, writes Dachis.
