German Chancellor Angela Merkel delivers a speech at the opening of CeBIT technology in Hanover, Germany, last year. Germany is one of only three European countries on board to meet or beat the 2020 deadline to allow a 700 megahertz band of spectrum to be assigned for wireless broadband | Ole Spata/EPA Europe on edge of another tech revolution lost Squabbles over spectrum could be Continent’s undoing in the race to 5G.

In the world of tech and telecoms, the acronym du jour is 5G. The great “fifth generation” leap will, so they say, make self-driving cars or live HD television on the subway a reality. It’s a race that Europe is behind in, and perhaps that’s no surprise for a onetime trailblazer now seen as a laggard on most things digital.

Here is the surprise: The EU’s problem with 5G isn’t a lack of entrepreneurial drive or venture capital, as is so often the case. It’s politics.

For 5G to take off in the EU, proponents insist the Continent needs to implement the same standards and harmonize spectrums around the same time across all 28 EU countries. It can’t be done just at the national level in a bloc that has removed most barriers to movement of people or goods. Brussels wants to create a digital version of the Schengen borderless travel zone. This is where Europe’s 5G push has run into trouble.

The previous digital commissioner, Neelie Kroes, tried to coordinate spectrum across EU nations under the Connected Continent package. Even this half-step towards fully harmonized spectrum was shot down, in the summer of 2015, by national governments. The European Council refused to cede ground, and the spectrum harmonization parts of the proposal were eventually abandoned. The only two elements to emerge successfully from Connected Continent were a ban on cell phone roaming charges from June 2017 and securing rules on open Internet access, known as net neutrality.

Brussels is trying again with a digital single market plan unveiled last year and other initiatives. And again it’s running into opposition from some powerful vested interests at the national level.

‘Sweet spot’

For several months, Roberto Viola, the Italian who leads the 1,000 civil servants at the Commission’s DG Connect, has been traveling around Europe to try to build consensus. The key to the plan is to get governments to stitch together spectrum — the radio frequency that a mobile service can use to transmit and receive a signal — to make the next generation of wireless technology possible across the EU.

Viola is trying to persuade member countries to allow their 700 megahertz band of spectrum to be assigned for wireless broadband by 2020. That will allow cross-border coordination for things like connected cars and remote health care, which come to life as part of 5G.

“This band is the sweet spot for both wide coverage and high speeds. It will give top-quality internet access to all Europeans, even in rural areas, and pave the way for 5G,” said Commission Vice President Andrus Ansip.

The Commission’s bull’s-eye covers 694 MHz to 790 MHz. However, that’s being used by TV broadcasters for free-to-air channels. Sacrificing that band will reduce the amount of spectrum that digital TV broadcasters can use by 30 percent, which would be problematic for countries like Italy where space for TV channels is scarce.

The industry is concerned some EU countries won’t have the funds to change their infrastructure, having already invested heavily in technology for that band, according to the European Broadcasting Union. Also, some licenses for the spectrum, like Italy’s, will last until 2032.

Viola is meeting resistance in Southern Europe, where the powerful interests of Italy are bolstered by Greece and Romania, according to two people involved in the discussions. They lead a bloc of nations seeking to delay the transfer of spectrum until after 2022.

Italy isn’t alone in seeking more time. Of the 28 member nations, the majority want to delay the transfer until at least 2022.

“Italy is the problem,” said a high-ranking official within the Commission. While Viola’s appointment wasn’t a strategic ploy to help persuade the Italians to back the plan, his presence will help ease any proposals through parliament, according to one telecoms negotiator.

Italy is defending its public broadcaster, RAI, which uses the coveted spectrum band to bring TV to millions of its citizens, because of the cost and difficulty of reshuffling its broadcast network from 700 MHz to a lower band. The U.K.’s communications regulator, Ofcom, puts the cost of changing the use of the band at £660 million (€838 million) in 2022 for Britain alone.

Italy isn’t alone in seeking more time. Of the 28 member nations, the majority want to delay the transfer until at least 2022.

Nations which have non-EU neighbors are concerned because they’ll have to renegotiate agreements on the use of spectrum at their national borders, where there’s some overlap. Finland, for example, will need to strike a new deal with Russia, at a time when the EU’s relations with Moscow are less than cordial.

So far, only France, Germany and Sweden are on board to meet or beat the 2020 deadline. Denmark, Finland and the U.K. have outlined plans to shift the band over the next few years.

Viola is also reviewing Europe’s telecom laws, which range from access to the networks of the largest players to whether services like WhatsApp and Skype need to be regulated. He said that he will propose harmonized rules for spectrum as well as guidance for robotics, supercomputers and the Internet of Things.

Viola described his reform of Europe’s telecoms market as “ambitious” in an interview earlier this year.

But his full range of proposals won’t be seen until at least September — at least three months later than expected.

Missing the revolution

There’s growing anxiety in Europe that Chinese firms such as Huawei and ZTE will wow customers with technology that will revolutionize industries like health and automotive, while the European Parliament and Council bicker over details. South Korea plans to preview 5G technology during the 2018 Winter Olympics.

“First movers have such a huge time advantage over the early followers that Europe cannot afford to be second,” said Hossein Moiin, Nokia’s chief technology officer. “So be very careful.”

The best that European Commissioner for Digital Economy Günther Oettinger, one of the loudest proponents of a European-led jump to the next generation, can offer is an unveiling at the Euro 2020 football tournament. That’s two years after South Korea and, even then, that wasn’t his own idea but a suggestion from an audience member at a Q&A session earlier this year.

Oettinger hosted a two-and-a-half-hour roundtable with telecom and automaker executives on 5G and connected cars at the Mobile World Congress in Barcelona in late February. In his meetings with leaders of European industry, participants say, the German commissioner bemoans Europe’s weakness on big data and applications, and points to 5G as a chance for the Continent to catch up.

“Is Europe scared? Yes, they wouldn’t make all this noise otherwise,” said Antonio Graziano, Huawei’s vice president of European public affairs.

Europe’s own tech giants say they’re moving fast to develop the necessary technology to make 5G work. Sweden’s Ericsson has partnered with Swedish teleco TeliaSonera and KT of South Korea on 5G projects.

The EU was the mobile communications champion from the early 1990s on. The European Conference of Postal and Telecommunications Administrations created the standard technology that transformed the way we communicate. The Global System for Mobile Communications, or GSM, introduced text messages and was the backbone for 3G, which provided mobile broadband.

Then things went awry as nations auctioned their 4G spectrum at different times, with Germany taking the first step in 2010. That could happen again with 5G though it would be more complicated as the next generation can use an array of spectrum bands and needs a fixed-line backbone.

But that would be a blow for elements of the digital single market, such as Continent-wide connected cars, according to the European Telecommunications Network Operators’ Association.

“Consumers’ ability to enjoy 5G services will also depend on spectrum harmonization. Addressing fragmentation is key to secure Europe’s lead,” said ETNO spokesman Alessandro Gropelli.

"I would be very focused on making sure that the standards are designed in the interest of European operators." — Vittorio Colao, Vodafone CEO

Nokia, the maker of the device in almost everyone’s pocket 15 years ago, has retreated into a very dry maker of network equipment and is trying to fight back through mergers. And that’s symptomatic of how far Europe has slipped behind.

Of late, even when the EU does get things right — such as by funding a €700 million public-private partnership launched in 2013 — the technology risks having no home because of the politics around spectrum.

Europe is unlikely to deliver 5G before parts of Asia, and it’s only those with global businesses whose products and services are not dependent on 5G who are relaxed. Take Vodafone. Even though it’s based in London and has operations in Europe, its focus has moved towards Africa, where 4G access is better than in some European cities, and India, where more than a billion people are going mobile.

“I would be very focused on making sure that the standards are designed in the interest of European operators and make sure that the release of spectrum and the rules around access, privacy, net neutrality are the same across Europe,” Vodafone CEO, Vittorio Colao, said.

Without cross-border rules and standards, the digital single market won’t work, he added, though his business doesn’t rely upon 5G in the short term.

Laggards’ tech tax

At the Mobile World Congress in Barcelona, a queue of people snaked around Huawei’s pavilion waiting their turn to play against Kuka, a 5G-enabled, air hockey-playing robot. The German-made automaton uses a camera suspended above the air hockey table and accesses Huawei’s near-5G connection to defend its goal from human players.

Well, at least it uses the faster speeds in China. There, the robots can tap into Huawei’s Wi-Fi network and receive and transmit data 100-times faster than standard mobile access almost anywhere in Europe. Huawei salesmen explained that Spain’s telecommunications network was too slow for Kuka to move at top speed.

“I’ve never seen more love letters being sent in the industry.” — Ulf Ewaldsson, Ericsson’s chief technology officer

The plodding pace of change in Europe could have a hefty economic price tag.

In Europe, greater connectivity between devices like your phone and home appliances — the so-called Internet of Things — could add nearly €330 billion to the economy by 2020, including €8 billion from connected cars, according to the Boston Consulting Group. The Internet of Things won’t work as well without 5G.

The World Bank estimates that for every 10 percent of the population that has high-speed broadband connection, gross domestic product rises 1.21 percent in developed economies. That jumps to 1.38 points for less developed countries.

For connected and self-driving cars, regulations for data roaming and privacy need to be in sync across Europe or the EU risks being overtaken by the U.S. and China, said Oettinger. Automakers and telecom operators are due to meet the Commissioner in the summer for their third roundtable meeting on the topic, where they’ll agree the financial, legal and technical requirements for the evolution of the EU’s auto industry.

That’s forcing some equipment makers into shotgun weddings. Nokia acquired Alcatel-Lucent for €15.6 billion to compete with Ericsson and to give it exposure to North America, as its mobile network equipment business slows.

“I’ve never seen more love letters being sent in the industry,” said Ulf Ewaldsson, Ericsson’s chief technology officer. “First-mover advantage in 5G is very important. There are more movements in North America and Asia than there are in Europe.”