Stick to hexagons for broadband fund, PIAC and telecoms tell CRTC

An application to relax eligibility requirements for the CRTC’s $750-million rural broadband fund is drawing support from a number of rural municipalities and opposition from telecoms, while a consumer group says keeping the original criteria would help target areas that need help the most. The Public Interest Advocacy Centre (PIAC) told the CRTC it “understands the reasoning behind SWIFT’s application to include underserved and ‘partially served’ hexagons, but where resources are scarce, PIAC, like the Commission itself, comes down on the side of those who would otherwise not receive any Internet service at all.” In December, the SouthWestern Integrated Fibre Technology Inc. (SWIFT) project filed an application in which it argued the eligibility criteria the CRTC set to determine who gets funding are too restrictive. The fund uses the hexagon mapping model that has been the target of criticism in the past. Hexagons, or 25-square-km areas, aren’t eligible for funding if even one household in that area has the option to access internet service that meets the CRTC’s basic service standards. SWIFT has also asked the federal government to step in and vary the decision by order-in-council. Comments in that process are due Feb. 18. PIAC argued in its intervention to the CRTC, released this week, that SWIFT is "requesting to amend the rules so that some people who can otherwise receive Internet service can obtain faster Internet service as opposed to using the resources available to extend Internet service to Canadians who would otherwise get NO Internet service.” It said Canadians without service are the "intended beneficiaries of the Broadband Fund and they should remain the focus.” Meanwhile, more than a dozen rural municipalities wrote to the CRTC in support of SWIFT’s application. The Town of Caledon said according to the CRTC, it has 765 underserved properties, but SWIFT’s data puts that number at 7,978. “Should the CRTC utilize the more specific mapping that has been completed by SWIFT, Caledon would be eligible for significantly more funding, reflecting the true demand in our local community,” it outlined. But Xplornet Communications Inc. argued granting SWIFT’s request would actually displace private investment, since making partially-served hexagons ineligible is the only measure the CRTC has to make sure projects don’t interfere with where industry is building out anyway. “One of the fundamental guiding principles of the Broadband Fund is that the Fund should complement and not displace other private or public investments,” the company said. It added that measure isn’t enough, providing confidential information to the CRTC showing there is “significant overlap” in areas where the CRTC plans to subsidize build outs and where Xplornet is planning to offer its service without the need for a subsidy. “If the Commission continues to provide subsidy to build in these areas, it will be using Broadband Fund resources to overbuild our network in an inefficient, redundant manner, interfering with our investments, and depriving Canadians in other underserved areas of the country from benefits that the Fund could extend to them." Telus Corp. said in its intervention there is no better option than the hexagon system. “There is currently no viable alternative that would create a central map upon which all stakeholders can rely. To the extent a better system is feasible, SWIFT has not identified it,” Telus said. In its application, SWIFT asked the CRTC to eliminate the hexagon system and make everything outside of telecoms’ service areas eligible for funding. At the very least, it said, the CRTC should make underserved areas in partially served hexagons that are near fully underserved hexagons eligible to apply. But using the more granular data SWIFT is asking for would be problematic because that kind of information is commercially sensitive, Telus said. Making that data public would, for example, allow competitors to raise prices in areas without competition, it said. If a competitor with facilities in Telus’ service area found out Telus serves a particular location -- even just a handful of houses -- it could, similarly, "target that location with special offers that would have the effect of significantly reducing or eliminating” the revenues the company earns in the area. Even if a better alternative was available, Telus noted that implementing it would take a significant amount of time and resources, including at least another CRTC proceeding, and then time to gather the necessary data, while the hexagon-based system can be used today. But it did agree with SWIFT on one point, saying applicants should be able to present evidence that specific areas of a hexagon can’t be served without a subsidy to then be eligible for funding. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Kyle Duggan at kduggan@thewirereport.ca

Stick to hexagons for broadband fund, PIAC and telecoms tell CRTC

News | February 13, 2019

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Stick to hexagons for broadband fund, PIAC and telecoms tell CRTC

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