Use spectrum windfall to subsidize broadband for low income families: Goldberg

With revenue poised to hit a record $4 billion from Canada's AWS spectrum auction, more than twice as much as many had projected, the federal government should consider using part of this unexpected windfall to expand broadband Internet access through a tax subsidy to low income Canadians, the organizer of Canada's biggest telecom conference announced yesterday. With revenue poised to hit a record $4 billion from Canada's AWS spectrum auction, more than twice as much as many had projected, the federal government should consider using part of this unexpected windfall to expand broadband Internet access through a tax subsidy to low income Canadians, the organizer of Canada's biggest telecom conference announced yesterday.In his opening remarks to the Canadian Telecom Summit in Toronto, industry consultant Mark Goldberg suggested that federal subsidies to entice carriers to expand broadband to rural and remote areas are misdirected. Instead, he says the money would have a greater impact if it was provided as a direct tax incentive to needy families."This represents a way for the government to reinvest money generated from the telecommunications industry back into the industry to help bridge the digital divide and render broadband affordability a non issue," he told delegates.A Statistics Canada report released last week shows a significant digital divide persists between high and low income earners when it comes to Internet usage. The new data from the Canadian Internet Use Survey reveal that the vast majority (91%) of people in the top quintile (more than $95,000) used the Internet. This was almost twice the proportion of 47% for the lowest quintile (less than $24,000). Mark Henderson, president and CEO of Ericsson Canada and a keynote speaker at yesterday's conference, agreed that extending broadband to rural areas is no longer an issue - at least from a technology perspective. He says new high-speed mobile networks such as HSPA can provide extremely high download speeds (14 Mbps) to communities located 400 km from a cell site. The business case works, he says, if the carrier charges a premium for the service."The technology is there and the speed is there," he told Network Letter. "If the operator needs to charge a premium because they're bringing that service out there, maybe the next step is to ask whether the government should provide a subsidy to make it more affordable for the people that live there. That's not for me to decide. We focus on technology and from our perspective, it's not a technology question anymore." Speaking to Network Letter, Goldberg said governments should get out of the business of "picking winners" and interfering with the market. For middle and high income families, paying a premium simply isn't a big issue, he contends."It's a patronizing view to suggest that rural families can't afford the higher cost - look at the price of lettuce and other vegetables in northern Canada - we don't subsidize lettuce. If we're going to foster a reliance on market forces the right way to do that is to put the subsidy into the end users' hands and let them decide who the winners are. Broadband is universally available, now let's make it universally affordable," said Goldberg.Universal broadband was a key plank during the Liberal government of Jean Chrétien but has fallen off the political radar in recent years. Goldberg says he would like to see it become a renewed priority for all federal parties.That view is shared by David Johnston, president of the University of Waterloo and past chair of the Information Highway Advisory Council, the Blue Ribbon Panel on Smart Communities and the National Broadband Task Force. He said subsidies likely have to be part of any policy that aims to provide universal broadband access."Our national broadband taskforce was heading in that direction," he told Network Letter at the Toronto conference today. "We felt the marketplace would bring broadband to the vast majority in the country but not to small and remote communities. We certainly saw subsidization of broadband access to small and rural communities as an option. It doesn't take you much farther to think in terms of support to low income individuals.""My focus would be particularly on learners," he added, "making it possible for students and children from low income families to have the same kind of access as children from middle and upper income families."

Use spectrum windfall to subsidize broadband for low income families: Goldberg

News | June 17, 2008

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