Telecom stakeholders disagree on how to use $750M broadband fund

Input from various stakeholders involved with the telecom industry has shown conflicted views on how best to serve the public with the $750 million CAD broadband fund Canada’s telecom regulator is developing.

The fund is being established through contributions from industry for the purpose of offering all Canadians with at least 50Mbps download/10Mbps upload speed internet services. The Canadian Radio-television and Telecommunications Commission (CRTC) plans to distribute the fund over the first five years of its existence.

As it stands, there are guiding principles — the CRTC has made it clear that funding will be focused on under-served areas, and that it hopes to provide funding in a transparent and fair manner — but the details are still being fleshed out. Recently, the CRTC closed a period of open consultation in which it received comments from individuals, groups and corporations seeking to help guide the development of the fund.

Backbone vs. last-mile

In its intervention, Rogers stated that it believes the Commission should focus on backbone infrastructure, rather than last-mile facilities.

It also states that the CRTC should prioritize projects in the remotest parts of the country, eliminating areas in close proximity to locations already served — since those areas are the most likely to be served by “competitive market forces” without a subsidy.

“Otherwise, public funds will end up replacing private investment and not be put to the best use,” wrote the company.

Rogers said that Bell’s suggestion for how to select projects for funding will do just that.

Bell, backed by two somewhat unlikely supporters — the Public Interest Advocacy Centre (PIAC) and National Pensioners Federation (NPF) — suggested that the CRTC follow the FCC’s approach to funding. Though, the telecomm also agreed that around 10 percent of the fund should be allocated to satellite-dependent communities mostly located in the north.

Under Bell’s suggestion, the auctioning process would see winning bids selected based strictly on objective criteria to ensure that the distribution of subsidies is “transparent, fair and efficient.” Rogers argued, however, that Bell’s points system might favour extending service to areas that are close to those already served, which would have less of an impact than serving remote communities.

“Unfeasible to implement”

Bell was less on board with Rogers’ promotion of remote locales, particularly advocating against the CRTC’s suggestions that a major carrier might be compelled to serve an area if, for instance, a satellite company goes out of business.

“Rather, the obligation to serve exists where facilities exist or within a set distance of those facilities,” wrote Bell.

For its part, Telus found Bell, PIAC and NPF’s proposal “unfeasible to implement” and also suggested it wouldn’t do much to avoid subjective decision-making. Bell also disliked the CRTC’s idea of creating new third-party administrators for the fund, calling it potentially inefficient.

“The Commission should not reward market forces where they have failed.”

The carrier suggested that Innovation, Science and Economic Development Canada (ISED) should act as administrators, particularly because of that ministry’s five-year Connect to Innovate $500 million CAD broadband funding program, which is complementary to the CRTC’s fund.

Bell also suggested that the fund could use the Canadian Telecommunications Contribution Consortium — which currently oversees the administration of the National Contribution Fund to provide local telephone service subsidies in high-cost serving areas. This idea was also supported by Canada’s other two major carriers and several other groups.

Telus also noted that since ISED’s Connect to Innovate fund is focused on backbone infrastructure, the CRTC’s should focus on bolstering last-mile connections, conflicting with Rogers’ views and siding closer to Bell.

Advocacy, government and small ISP views

Some of Canada’s smaller internet service providers currently serving more remote locales — like Xplornet in Atlantic Canada– underlined the idea that the funding should not undercut investments already underway, and requested that the CRTC identify private initiatives in order to avoid overlap.

Advocacy group OpenMedia expressed that it was important to note that the CRTC should not trust any carrier’s claims regarding the power of market forces.

“The Commission should not reward market forces where they have failed, proven inadequate, or demonstrated hostility towards or attempted to impede non-market or otherwise alternative solutions,” wrote the group.

Yukon’s government, in the same vein, recommended that the criteria allow for project proposals which include both under-served areas and areas where the broadband standard is met, saying it would not only facilitate better service to under-served areas, but also promote competition — something sorely lacking in the territory, where Northwestel monopolizes much of the market.

Meanwhile, the government in Ontario and Alberta stated that competition hasn’t helped all rural areas hit speed goals of 5Mpbs/1Mpbs even if they’re within 25 kilometres of a major centre.

Another aspect of this funding — the phasing out of the local voice subsidy argued against by SaskTel — is still open for comment until September 8th, 2017.

Image credit: Martinelle via Pixabay

Source: CRTC Via: The Financial Post

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