Connections are about control: Who provides and oversees the connecting pieces? Who maintains the flow of goods, services, people and data through those connections? What do the connections connect to themselves?
Less abstractly, the future of the automotive industry — along with the payment and commerce tasks associated with it — depends significantly on the type of technology that ties together web-enabled cars and trucks with outside networks. A debate about those connections is heating up in Europe. When a decision is finally made — right now, that is supposed to happen by the end of 2018 — it could have a meaningful impact on development of the global digital economy.
The debate pits a forthcoming 5G wireless infrastructure called C-V2X against existing Wi-Fi technology that, somewhat confusingly, goes by the moniker ITS-G5. The question involves how connected cars communicate with outside networks, an area that touches multiple issues related to web-enabled driving – including safety, data collection and management, payment and commerce features, and the further spread of the Internet of Things.
EU Work
Officials with the European Union, using a process that limits the ability of national governments to alter proposed legislation, plans to propose legislation about the underpinning technology for connected cars in Europe. It remains unclear whether the decision, expected to be announced in fall, would lead to strict technical rules regarding connected cars, or would constitute what some observers have called “soft guidance” about how to connect vehicles to outside networks.
For its part, EU officials working on the connection legislation have said they will not take sides when it comes to the technologies, and would instead remain neutral.
What that will mean in the coming months is still unclear. That said, any such legislation that wins approval from the EU promises to influence how carmakers and other participants in the emerging connected car ecosystem go about their business in the coming years and decades. That market, according to one account, is “expected to be worth billions of euros and will generate new revenue streams for telecoms operators and equipment makers.”
5G Favor
Major automotive companies, along with other firms, are already putting down their markers, with some of those positions hardly coming as a surprise. BMW, Daimler, Deutsche Telekom and Ericsson, along with other companies, have called upon the EU to support C-V2X, which would help ensure that “Europe will be in a better position to speed up the rollout of 5G networks,” a move that in turn would help make Europe more competitive in the larger global economy.
“[ITS-G5] places Europe at an economic disadvantage compared with other regions of the world – including China and the United States – where C-V2X is emerging as a strong technology candidate for C-ITS,” the companies said.
Some European countries also favor the 5G connection standard.
That includes Finland — known among many observers as the mobile data center of the world, and a “sandbox” for developers of 5G technology. The country reportedly does not want the EU to refer to the Wi-Fi technology in the upcoming legislation, unless balanced out by clear references to 5G, whose deployment in major telecoms networks is expected in 2020.
Finland’s transport ministry argued that 5G, which still needs recognition from major standards groups, will enable newer technologies much better than will the Wi-Fi system — and should therefore win significant backing for connected cars.
In fact, Finland and its Nordic neighbors Sweden, Norway, Denmark and Iceland released a letter in May in which they pledge to be in the “forefront” of 5G development and to “become world leaders in using” that technology in all types of digital endeavors, including connected vehicles. The countries underscored the seriousness of their bets on 5G by promising regulations and investments that will support the technology.
That does not necessarily mean those countries want the upcoming EU legislation to exclude the Wi-Fi technology for use with connected cars, as a Swedish official with the EU recently told reporters. Supporters of 5G connections for vehicles, at least for now, seem to be pushing for the technology to have preference in that legislation. (In any case, the Wi-Fi connections are needed for the time being.)
Spain’s Objections
Other countries are using different — and blunter — methods to argue their cases with the EU.
Spain’s transport ministry, for instance, sent EU officials a “blistering critique of a recent draft of the legislation that was circulated to member states.” Spain said that so far, the EU proposal is not neutral — despite such promises from EU officials — and favors the Wi-Fi connection technology over 5G. The country also accused the EU of overselling the safety benefits of the Wi-Fi technology for connected vehicles.
Spain is arguing in favor of having soft guidelines around the connection vehicle technology instead of binding rules.
Wi-Fi Favor
Some car manufacturers, meanwhile, “have argued that the Wi-Fi-based option is safer, because cars do not need to connect to telecoms networks in order for internet-connected braking to function quickly,” according to EURACTIV.
It quoted Joost Vantomme, director of smart mobility at the European Automobile Manufacturers’ Association, as saying that connected vehicle services such as safety functions, the retrieval of insurance information, and traffic and parking assistance work best via the Wi-Fi connection, or even require it.
He said the telecom industry has a self-serving interest in promoting 5G connections for cars and trucks. “Telecoms companies really want to invest into 5G, but they need to have clients and they see us, connected cars, as one of the first users. The question is, who will pay that? The jury is still out on this one,” he said.
The debates about the standards and foundations of the emerging world of connected vehicles are playing out. More will no doubt emerge as the technology improves and more companies find revenue streams and customer acquisition methods via the operation of those cars and trucks. What happens in the European Union — whether soft or binding — tends to have a major influence in the United States and other parts of the world, and the final wording of the upcoming connected vehicle legislation will almost certainly be the same.
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