Redirect voice subsidy to broadband, CRTC panel hears

GATINEAU, Que. — With the use of landlines declining across the country, the money collected for the provision of universal phone service should be reallocated to cover areas of the country underserved by broadband connectivity, CRTC commissioners heard Thursday. On the ninth day of a three-week basic services hearing, the five-member panel was encouraged to stay away from the idea of creating new subsidies to fund the gaps in Internet service. Rogers Communications Inc. remained in step with other large telecommunications companies that have already appeared before the panel, with representatives saying that not only are download speeds of 5 Mbps and upload speeds of 1 Mbps sufficient for a basic service, but also that market forces and targeted government funding were getting the job done in reaching the remainder of Canadians not currently receiving that service. In his opening remarks, David Watt, Rogers’ senior vice president of regulatory, told the commissioners the company agreed with CRTC Chairman Jean-Pierre Blais’ remarks Monday, in which he stated that adding funds without knowing where they’re needed would be “like pouring money into sand.” Instead, Rogers recommended that any subsidy funds “should be narrowly targeted to where gaps may persist absent funding,” and that those funds should come from the government. The government introduced a new five-year, $500-million rural broadband program in its 2016 budget. But if the commission decided to create a new funding program, “it should do so by redirecting the existing subsidy for local voice service in high-cost areas,” Watt said. “Any obligation to serve should also be applied only in subsidy-eligible areas, consistent with the commission’s past practice of linking obligation to where it provides financial support.” Those funds would be doled out through a bidding process, Watt explained. The Canadian Taxpayers’ Federation also appeared before the panel Thursday, and called for the commissioners to reject any new tax “or levy, or access fee, or any other creative moniker that might be applied to a mandated cost which will ultimately be imposed on customers, for the express purpose of subsidizing other customers,” Aaron Wudrick, the group’s federal director, said. In its initial intervention, the CTF cited Statistics Canada’s 2013 residential telephone service survey that said the number of households without a landline rose from 13 per cent in 2010 to 21 per cent in 2013. “It would make sense for us, if we’re going to decided to have basic services and things that consumers are expected to contribute to, we can agree to add new technologies or add new things to that definition, but simply look for ways where we can use the same amount of money but put towards the purposes that are more relevant and better emerging,” Wudrick said. Any changes to the basic voice services regime would have a “disproportionate and adverse impact on rural and remote customers,” said Heather Tulk, Manitoba Telecom Services Inc.’s chief customer officer, adding if the subsidy is phased out, “so, too, should be the obligation to serve, the basic service objective and the cap on residential primary exchange service rates.” There is only one wallet being tapped when it comes to allocating funds from the government or customer bills directly, Blais noted earlier in the day’s session, during an appearance by a pair of Liberal MPs from rural Quebec ridings. “There are limits to consumers’ ability to pay more,” Pontiac MP Will Amos acknowledged. Throughout the course of Thursday’s session, commissioners returned to the question of affordability and whose responsibility it is to address it, with Blais calling out the heads of the major companies for their non-participation in the discussion. “Very few CEOs have shown up to our hearing. I’m respectful of the people they sent — they’re knowledgeable — but if this is a debate of society where were the CEOs? Where are the CEOs on this?” Blais said. “Because when we push and ask whether they think they have a social responsibility, they said ‘well no, we’d rather put our money elsewhere.’” “I think you have a chicken and egg problem. Poverty is exacerbated by the lack of Internet connectivity,” Laurentides-Labelle MP David Graham said. “So if you’re going to say that poverty’s going to fix itself and then you can afford Internet, when I said at the beginning of the presentation that every year our divide gets a year greater, it’s just going to accelerate that, it’s not going to fix it.” MTS representatives said the company is also not in favour of any new subsidies and that the federal and provincial governments were the best suited to ensure the necessary social assistance is provided. “I don’t think it’s the role of the telecommunications operator to source that information about individual Canadians and make decisions about which individual Canadians should or shouldn’t qualify for assistance,” Tulk said. “I don’t believe that’s the role of a telecommunications operator and I think it would be extremely difficult for a telecommunications operator to get that right in a respectful way for the people who need it.” Some of the country’s most-vulnerable people have come before the panel to share their stories about the difficult choices they’ve had to make when it comes to connectivity, Blais said. “So we’re hearing that side and we’re having other people come to this hearing and say ‘oh, CRTC don’t worry about that, that’s a poverty issue, other people should deal with it,’” Blais said. “Because the last thing they want is for us to deal with it because they know we may actually have an impact on their business.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.caand editing by Anja Karadeglija at akarad@thewirereport.ca

Redirect voice subsidy to broadband, CRTC panel hears

News | April 21, 2016

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Redirect voice subsidy to broadband, CRTC panel hears

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