CRTC rural broadband fund speed targets draw criticism

The CRTC revealed Thursday the details of the $750 million rural broadband fund that’s been in the works for nearly two years, prompting criticism from some groups concerned about what they say are low speed criteria. “We are disappointed that the fund initially allows for speeds that are half of the CRTC’s Basic Service Objective target of 50Mbps download and 10Mbps upload,” Byron Holland, president and CEO of the Canadian Internet Registration Authority said in a press release. “We encourage applicants to strive to meet these targets to ensure Canadians have access to quality of internet access that is required to participate meaningfully in the digital economy.” Digital technology advocacy group Cybera was also dismayed by the lower targets. “Requirements for capacity are only going to grow as more and more services come online. But with this move, the CRTC has effectively set a ceiling for internet growth, which could have far-reaching implications," Barb Carra, Cybera’s chief operating officer, said in an emailed statement. In the 2016 decision that created the fund, the CRTC also updated its basic service standards -- which outline minimums all Canadians should have access to -- to 50 Mbps download and 10 Mbps upload for wireline internet service. But Thursday, the commission said using those standards for the fund would “disadvantage some underserved areas.” It noted nearly half of Canadians subscribe to speeds below 25 Mbps, and that it considers a “minimum speed eligibility criterion of 25 Mbps download and 5 Mbps upload would likely result in projects covering underserved areas that would deliver a broadband Internet access service that the majority of Canadians use today.” It added that projects will have to be scalable to be capable of offering 50 Mbps download and 10 Mbps upload “at a future date.” In a press release, internet advocacy group OpenMedia also criticized the speed targets. “Today’s decision is a stunning step backwards, and demonstrates a serious lack of ambition from CRTC Chair Ian Scott,” OpenMedia executive director Laura Tribe said in the release. Those targets don’t apply to projects in communities where only satellite service is available, which aren’t subject to any speed minimums. In its rationale for that decision, the CRTC noted that geo-stationary satellite service has limitations, and while low-earth orbit (LEO) systems promise to deliver high-quality service in the future, that technology will take some time to deploy. The commission allocated 10 per cent of the total fund for those communities. The fund will distribute the $750 million over five years, and begin accepting applications in 2019. Among the details about how the fund will be administered that the commission revealed Thursday is the fund’s governance structure. It noted that during the consultation, many parties “suggested either assigning as the project manager or leveraging ISED’s expertise through collaboration between ISED and the Commission.” But the CRTC declined to do so, saying it is “neither appropriate nor feasible for the Commission as an independent statutory authority to appoint ISED to this role.” Instead, it will use its “own expertise, staff, and institutional capability for the implementation and operation of the selection process,” which it said would be efficient and cost-effective, and enable it to do the work in a timely manner. It also outlined that projects won’t be chosen using an auction framework, but instead simply judged based on specific criteria. While some participants in the consultation had suggested a reverse auction approach, the CRTC said the majority of those participating in the consultation opposed that proposal, arguing that “reverse auctions typically favour large bidders that are familiar with and staffed to support the bidding process.” It agreed with those criticisms, noting in the decision it is “concerned with the possible exclusion of small ISPs or community initiatives under the reverse auction approach. Due to the complexities of setting up and participating in auctions, small applicants may lack the institutional knowledge of the process or may not have access to the necessary resources to meaningfully participate.” The commission also set out how it will define an underserved area. It said will use the hexagon criteria, which has been criticized in the past for not being specific enough to accurately capture all areas lacking high-speed broadband infrastructure. The CRTC said using hexagons would reduce administrative burden for participants, since “industry members and other potential applicants are already familiar with the use of hexagons for delineating geographic areas.” The model is used by ISED for its Connect to Innovate fund. The CRTC said that to be eligible for a fixed broadband Internet access service project under its fund, an applicant must “propose to build or upgrade infrastructure in an eligible geographic area, defined as a 25 km2 hexagon where there is at least one household, as per Statistics Canada’s latest census data, but where no household has access to broadband Internet access service at universal service objective-level download and upload speeds (i.e. 50/10 Mbps).” It said the rationale for that definition was that if one household within a hexagon has service that meets the basic service definition, “it is likely that market forces will bring improved levels of broadband Internet access service to the remaining households in the hexagon.” Those applying to the fund won’t have a mechanism to challenge the CRTC’s determination of what is an eligible or ineligible area. The CRTC also set separate criteria for projects involving building transport or backbone capacity and mobile service. It included subscriber pricing in the eligibility criteria for residential internet service. It said applicants must outline a list of broadband internet packages they would offer and those “must include rates that are identical to or lower than those offered by a facilities-based service provider in one of the major urban centres or communities ... in the proposed project’s province or territory for reasonably comparable speed and capacity packages.” Participants must also consult, or at least attempt to consult, with the communities that would be affected by their projects. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Kyle Duggan at kduggan@thewirereport.ca

CRTC rural broadband fund speed targets draw criticism

News | September 27, 2018

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CRTC rural broadband fund speed targets draw criticism

News | September 27, 2018

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