Five Ways 5G is pushing the boundaries of law

5G is already a consumerised technology – the UK’s EE, Vodafone, Three and O2 brands have begun to roll out 5G services and the major handset manufacturers (especially Samsung, Apple and Huawei) have strong 5G roadmaps.

However, some of the more interesting B2B 5G applications, like using the Internet of Things (IoT), Smart City technologies, vehicle autonomy and mission-critical manufacturing; all based on the less known low-latency features of 5G, are taking longer to reach public prominence. These lesser known applications are changing the shape of legal, risk and regulatory environments for legal professionals who are seeking to leverage 5G in their operations. 

Apperio’s latest breakfast briefing explored some of the thornier legal issues facing companies looking to use 5G at scale. The speakers were Linda Davidson, Digital Consultant to the BBC, Channel 4, and Discovery Networks, and Sarah Kenshall, Head of the Telecoms practice at Burges Salmon LLP. Here are the key lessons learned.

The early 5G concerns are for Health and Safety

5G is a highly localised system at the point of use (5G cannot penetrate most buildings), requiring a much denser network of local antennae than was the case for 3G or 4G. Its applications (e.g. geopositioning for autonomous vehicles) also require a high density array of local cells. This has led to consumer concerns about any health risks associated with radio waves in the 5G frequency range. 

What does this mean for in-house lawyers

Rising health concerns are shaping attitudes of local authorities who are in control of planning permissions. In-house teams may face challenges such as competition for resources and infrastructure, as well as legal claims on health related issues.

Consumers are way ahead of legislative environments

Since the invention of the computer, digital technologies have come to business first – primarily due to the natural expense of first-mover technologies, followed across several years by consumerisation. This allowed legislation to follow a similarly relaxed trajectory.

However, the advent of the smartphone and powerful computers has changed everything, by putting world-class technology in the hands of anyone with a mobile phone contract. 5G may be the first technology to truly gain widespread consumer adoption at the same speed as businesses uncover the benefits – and this will mean that consumer demand will be a key pressure on government legislators, regulators and lawyers to catch up – and a source of entirely new classes of claim.

What does this mean for in-house lawyers

New classes of claims could include distribution of sensitive consumer data such as photos and videos across several jurisdictions with consumer protection laws. In the case of a video shared from a device in one country to another, where would the claim lie in the case of a lawsuit.

5G needs fibre 

As discussed above, 5G provides a highly localized connection, but all those YouTube videos and all that real time IoT data (a typical connected vehicle – even without autonomous functionality – today yields around 1.7TB of data each year) need bandwidth to the rest of the network – and that means fibre. 

In the past two years, the Communications Code has dramatically oiled the wheels of negotiations with landlords for siting telco equipment, removing the worst excesses of landowners’ demands; this in turn has made it economical for telcos to improve their coverage, particularly in more rural areas. 

The UK’s unique system by which BT and OpenReach are legally obliged to open up their infrastructure has also contributed to accelerating telcos’ commitment to 5G services. Finally, local authorities and even groups of local stakeholders have clubbed together to create viable broadband offerings in underserved areas. This interest, with the Code reducing the hurdles to entry, has resulted in increased investor interest in fibre, broadband and 5G business plans. 

However, there are still challenges, in particular the adoption in rural areas will be far slower (having to build new infrastructure) than urban areas, potentially creating a digital divide.

What does this mean for in-house lawyers

Larger landlords with the legal wherewithal to challenge the Code are testing the appetite of telcos to go to court, or at least encouraging them to seek alternative properties. 

We're all going feel the benefits and they will come. But with rural areas it’s a cost benefit analysis.  Investment’s easy to make it urban areas, because you’ve got the customer base and the business base to justify putting the pounds into fibre. In rural areas where the population is sparser, laying fibre is much more costly. The infrastructure piece is so expensive out in the countryside, I'm not sure that we'll ever get to that stage to be honest. 
Briefing guest

5G will power segmentation in the data security market

We have already seen the migration of most corporate data into the Cloud. Whilst there are many exceptions, the guiding rule is that specialists in the movement and/or storage of data can secure information more effectively than individual companies’ IT teams.

We have also already seen a basic stratification of the cloud storage market, with services like AWS (Amazon Web Services) delivering off-the-shelf, commoditized data security to a standard already much greater than most private organisations can achieve on-premise; and a raft of private cloud and hybrid cloud providers delivering elevated security (and functionality) at a price.

Because 5G will unlock a torrent of new classes of data and a similar glut of new business models, we can expect to see a further layering in the market for this trade-off between security and price. There will be, for example, large amounts of IoT data which, once the immediate use case is over and only compliance archival is a priority, can be classed as exceptionally low-value. This data will represent little in the way of a security risk, and will require ultra-low-cost storage.

As we gather vast amounts of data, we will slice and dice it into secure, slightly less secure, and the like. Security is still important, but the levels of security will vary. There will always be Amazon, but you might go to a private provider who will have that extra level of protection for some purposes. They'll charge you more, but they'll have an extra level and you can actually failover to different providers, too.
Sarah Kenshall

What does this mean for in-house lawyers

The Office of Communications (OFCOM) has recently finished a consultation which will require telcos to take full responsibility for cybersecurity in their supply chains, and when this translates into legislation, it will no doubt place new financial burdens on telcos’ enterprise clients as they pass on the inevitable cost. 

And while telcos will face fines for misdemeanours (a regime believed to be likely to be similar to the structure of GDPR), a regulatory environment with teeth usually encourages consumer confidence and therefore profitable business in the long term.

Conclusion

As we have seen, we are only at the beginning of what 5G can offer in terms of new business opportunities, and at this cutting edge, the need for legal services in areas such as data protection, health, security and commercial real estate are significant. In particular, GCs must engage collaboratively, as much of their work will be as part of emerging ecosystems rather than exclusively in their individual organisations; and we can also expect legal counsel to extend to relationships with regulators and effective lobbying into government. Don’t expect it to stop with 5G either – further developments, most notably Artificial Intelligence, may just make 5G the template for the expansion of the legal function in the future.