Telecoms pooh-pooh affordability fund

Establishing a dedicated fund to tackle service affordability for low-income Canadians as part of the CRTC’s basic telecom services objective is not the right way to handle the issue, according to the majority of service providers who responded to an application to review and vary the regulator’s December decision. Much like the objective of the landline subsidy was to “bring down the price for all persons in the high-cost service area to a level that is comparable to the price elsewhere in Canada,” the new contribution regime will do the same for broadband infrastructure, Rogers Communications Inc. argued in its intervention to the Part 1 application filed last month by the Public Interest Advocacy Centre (PIAC), the National Pensioners Federation (NPF) and the Association of Community Organizations for Reform Now (ACORN) Canada. The application argued that the CRTC missed an opportunity in the decision that established a new $750-million fund to improve wireline and wireless service in underserved areas across the country, with a minimum speed requirement of 50 Mbps download and 10 Mbps upload, to address making service more affordable. In their application, the trio said the only way “to deliver affordable telecommunications to the lowest-income Canadians is by delivering it at below-market rates” and during the basic services proceeding proposed a subsidy for low-income households to apply to telecom services. “ACORN-NPF-PIAC’s review and variance arguments amount to an assertion that if the Commission did not implement a subsidy mechanism in the form they requested, it must be an error of law,” BCE Inc. said in its submission. “It is clear the Commission thoroughly considered its jurisdiction and mandate to introduce regulatory measures to address the affordability gap.” Telus Corp. said the applicants didn’t prove that the CRTC was “required to arrive at a particular decision to implement” their subsidy idea, “not merely that the Commission could have done so,” and called their interpretation of the Telecommunications Act a “narrow reading.” According to Sec. 7(b) of the Act, among the objectives of domestic telecom policy is “to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada.” Quebecor Inc. also poked at the trio’s reading of the legislation, saying in its French submission that it was ironic they accused the CRTC of unduly limiting its comprehension of the jurisdiction conferred upon it by the Telecom Act when “it’s clear the applicants are looking at the question of affordability with surprising narrowness.” The company took issue with the applicants’ statement that all parties confirmed during the proceeding that affordability “was an exercise in dealing with below cost delivery of service not a question of just and reasonable rate-setting or forborne market rates.” Quebecor said providing services below market cost was “maybe one approach to handle the question of affordability, but it’s certainly not the only one,” and to suggest that other parties share that view is false. Intervenors also disagreed with the applicants’ claim that circumstances had changed following the tabling of the federal government’s 2017 budget in March, which included the Affordable Access program in the form of a five-year $13.2-million income validation tool to “help service providers offer low-cost home Internet packages to interested low-income families.” According to Shaw Communications Inc., the argument is “based on a slanted reading” of the decision in question to say that the CRTC relied on the federal government to create a subsidy. “The proposed remedy risks undermining or halting pubic and private sector initiatives now under way in collaboration with the Government of Canada,” Shaw said. The First Mile Connectivity Consortium also expressed concern that if the CRTC approved the Part 1 application, it could “limit the ability of all parties to effectively implement the development of the broadband infrastructure fund” proposed in the decision “in a timely manner.” The group, which consists of First Nations Internet service providers (ISPs), said it welcomed the original decision and worried that “any alternative uses of this infrastructure fund to accommodate other demands may create competing priorities and requirements.” Namely, the consortium is “concerned that the additional affordability mechanism being requested by PIAC risks impacting the successful implementation and delivery of the required infrastructure fund.” The Canadian Network Operators Consortium (CNOC) said the CRTC needs time to “give improvements it has been making, and continues to make, to the wholesale regulatory regime, time to work before determining whether any further subsidy mechanism may be required in the future,” adding that “hasty action” to establish a new subsidy regime would “run contrary” to the CRTC’s conclusion that other stakeholders are already working on solutions. PIAC, NPF and ACORN did find some support from the Northwest Territories government, which said it applauds the CRTC for the measures taken in the basic services objective, but that historically, “the affordability of basic service has been an issue on which the Commission, pursuant to its mandate took a leadership role,” and that it sees “no reason why it was necessary for the Commission in that decision to deviate from its previous approach and to largely refrain from addressing affordability concerns.” The territorial government said it supports the review-and-vary application with the caveat that instead of focusing on affordability for low-income Canadians, it should be “more broadly applicable to the affordability of service to all Canadians including low income subscribers and subscribers in high-cost areas.” It added: “If it is ignored here then the inevitable consequence will be that the rates for internet service will remain significantly higher, and thus less affordable, in high cost areas such as the North than they are elsewhere in Canada.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telecoms pooh-pooh affordability fund

News | May 26, 2017

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Telecoms pooh-pooh affordability fund

News | May 26, 2017

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