2013 PhotoChallenge Week 12: Technology. by Gary H (CC BY-NC-ND 2.0) https://flic.kr/p/e7gww7

2013 PhotoChallenge Week 12: Technology. by Gary H (CC BY-NC-ND 2.0) https://flic.kr/p/e7gww7

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Historic or Immaterial?: Making Sense of the CRTC Ruling on Broadband Access as a Basic Service

The CRTC released its much anticipated Talk Broadband ruling yesterday, declaring Internet access a universal service objective, shifting the local voice service subsidy to the Internet, and setting much-improved speed targets of 50 Mbps download and 10 Mbps upload. The decision sparked a wide range of responses: Open Media labelled the decision historic, but business analysts largely shrugged, calling it “immaterial” and “neutral” for the telecom carriers. How to reconcile the competing perspectives?

From a big picture perspective, those that have advocated for a forward-looking Canadian digital policy that places universal Internet connectivity as the foundation have good reason to be pleased. The CRTC’s recognition of Internet access as a basic service is an important development that is long overdue. While critics downplayed the importance of the formal recognition for years, updating Canadian policy to include access to broadband Internet services provides an important signal to the market and the basis for further regulatory and policy steps if needed.

Moreover, after years of middling broadband targets, the CRTC has stepped forward with a broadband target worthy of a country that wants to see itself as an innovation leader. The target of 50 Mbps download and 10 Mbps upload changes the Canadian conversation on broadband. Indeed, when Bell appeared before the CRTC as part of this hearing, it defended the previous 5 Mbps download/1 Mbps upload target. Bell executives warned that the company can’t even offer that speed in some markets, telling the Commission that “If a 5/1 basic service was mandated, we might have to withdraw our internet service from those markets, removing an option for consumers.” With this decision, the days of discussing 5/1 as a reasonable target are thankfully over.

The decision also marks a fundamental shift from voice to the Internet for Canadian communications regulation. Shifting the local voice service subsidy to broadband is absolutely the right thing to do as it takes the essence of a policy designed to ensure that all Canadians have basic connectivity and updates it to reflects how Canadians communicate today. The $100 million from the local voice service subsidy will help address the broadband access issue, though the Commission itself acknowledges that more money will be needed.

While these are all exciting, important developments, digging deeper into the details suggests that this is a small piece of a much bigger puzzle.

It may be important for the regulator to acknowledge the centrality of Internet access, but most Canadians are already there. Similarly, Bell may be content to argue for 5/1 service, but the CRTC’s own data indicates that 82% of Canadians already have access to 50/10. The CRTC wants 90% of Canadians to have access to those speeds by 2021 with the remaining 10 percent of the country getting there within 10-15 years. Expanding access to an additional 8 percent of the population over five years helps, but it isn’t transformative. In fact, given the ongoing investments from various providers, it is worth asking whether Canada might reach that target with or without the CRTC’s efforts. The real challenge remains the last 10% in rural and remote areas and for that the CRTC has no easy solution given that it sets a target of 2031 for achieving universal access.

The CRTC’s five year broadband target is within reach, but many other broadband goals are not. Affordability goes hand-in-hand with access, yet the CRTC largely punts on the issue, noting that “a comprehensive solution to affordability issues will require a multi-faceted approach, including the participation of other stakeholders.” That places much of the responsibility on the government, but it was open to the CRTC to push the providers harder on affordability. It points to innovative solutions from some companies (presumably Rogers and Telus), but does not go further by setting goals or targets for the obvious laggards in the industry.

The CRTC’s approach on data caps also avoids strict regulation, settling instead for more information and tools for consumers to monitor and manage their data usage. Some ISPs already provide those tools and others will be required to do so within a matter of months. These requirements will be helpful for some, but they eschew tougher regulatory options.

The CRTC’s proposed funding model – $100 million per year from the local voice subsidy and another $250 million over five years from telecom revenues that include Internet services – creates a useful source of funding, particularly when combined with the $500 million promised by the federal government. Moreover, the additional funding is relatively modest as a percentage of overall telecom revenues, especially when contrasted with the five percent Internet tax sought by some groups in the digital Cancon consultation. Yet even the CRTC admits that more money will be needed, telling ISED Minister Navdeep Bains that “meeting the nation’s broadband challenges will require billions of dollars over many years to come.”

Given that the CRTC largely avoids imposing regulatory requirements in this decision, more than just money will be needed to meet the broadband challenge. The Commission could have gone much further in mandating broadband obligations, addressing affordability, and curtailing data caps. It calls this decision “Modern Telecommunications Services – The Path Forward for Canada’s Digital Economy” and while it sets the target for modern telecommunications services, the path for getting there will still require much work.

12 Comments

  1. Will this have any effect on net neutrality conversations going forward?

  2. and you thought fake news was bad before..

    I have a flash for ya… it’s a national-inquirer state-of-mind out there.

    all you fox-news complainers… it’s LISTED as entertainment
    by advertized (here) as news.

    something other than sat service for rurals?

    about the same time the home-box is a website. (the internet of things excepted, of course. not techically possible, according to industry
    EXCEPT where they can make money off it.)

  3. Chris Carruthers says:

    Well said Michael.
    Will this have an effect on landline telephone rates in rural areas?

  4. Curious to see what the future holds for Canadian teleco’s regarding rural connectivity. Facebook tried to launch a satellite not that many months ago to connect rural Africa only a few months ago which exploded after launch. Google is expected to be next. This would offer free wifi over Africa.

    By the time we spend our billions on enhancing rural internet, my bet is that both google and facebook will already have connected not just Africa, but also most of the globe to free wifi through satellites.

    I also have a question regarding the money already spent on enhancing rural broadband over the years that were given to the big teleco’s. Where is it, and why haven’t we seen movement on rural broadband over the years? Most importantly are these billions of investments that are currently being fought for actually going to be spent on rural broadband infrastructure, or is this going to continue to fund these teleco’s “slush” accounts?

    • Devil's Advocate says:

      Don’t confuse what Facebook tried to do with Google’s efforts.

      Facebook wanted to install their own network, supposedly to give free access for the underprivileged. That, of course, sounded good, if you weren’t paying attention to the rest of the proposal, which would have given Facebook an unwarranted control and monopoly over what kind of internet traffic was to be allowed.

      Besides governing what sites and services were to be permitted, this deal would have shut out any competing providers from supplying service. It was the most disingenuous “free” offer I’ve ever seen.

      Google is simply working on supplying 1-gigabit, normal broadband for an affordable price, in places where competition has been lacking.

      • No question that there will be a cost to free but considering the market demand, does the cost really matter anymore, and will the national teleco’s be able to compete with that? This is going to be an epic showdown with Facebook, Google and the CRTC in the near future with both companies worth more than our national teleco’s combined. I don’t think Bell, Rogers, Shaw or Videotron will be able to save face. They are in all respectful sense have proven their ability to not follow the market demand over the years, rather try and advocate for their share holders, when really market demand is what benefits their shareholders. David vs. Goliath?

        • Yes there is a cost to free, and yes it does matter. The cost that Google and most definitely Facebook are extracting is your privacy and freedom.

          Also, don’t be fooled by satellite. It is inadequate in many ways. Presumably price can be be lowered for bandwidth, but one thing that will stay the same is the long delay caused by a 44,000 mile round trip distance which is limited by the speed of light. The typical 800ms delay (almost a second) makes telephone conversations intolerable as well.

      • Over two years ago a friend of mine who was hired on as an analyst at Google, gave a speech to EU’s ITC ececs. I wrote about it here:

        https://jkoblovsky.wordpress.com/2014/09/24/crtc-vs-netflix-the-fight-for-survival-is-on/

        For those of us watching and following telecom policy, Blais has to tread very carefully on this,

    • I doubt that rural connectivity will change much because of this. Currently most remote places are serviced by wireless. It works well and will scale a little, but nothing like what we’re starting to expect from modern internet. Where I live the technical option would be to run 18 km of fibre. Telus is not going to invest like that for a small community. The only real hope I have is that the price will go down. I just had a conversation with an internet friend in Turkey. He pays $15 per month for 4 times the speed that I pay $60 for. Canada should be able to do better, even in rural areas.

  5. Well, if you already managed to supply [something] to 80% it shouldn’t be insurmountable to get it to the other 20% right? Assuming you have never been to Canada or seen it on a map or potentially heard anything about it.. this totally makes sense.

  6. Check out Canadian company Genesis Technical Systems who are developing sub urban and rural broadband solutions. Genesis is developing a new, affordable technology that delivers up to 400 M/s over existing networks.

  7. Ich musste dies offensichtlich nicht tun, weil Nushape & TrulySkinny bei mir sehr gut funktioniert haben und ich Monat
    für Monat weiter abnehme. http://paoniu.yueons.com/home.php?mod=space&uid=14109&do=profile

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