CRTC urged to put a moratorium on broadband fund contributions

Telecoms and other stakeholders have had their say on proposed changes to the CRTC’s Broadband Fund. The commission posted the last of the interventions on Monday. The first batch of statements were uploaded last week. BCE Inc. submitted a hefty intervention, a 62-page document with three appendices. Bell chastised the regulator for collecting money for the fund from the National Contribution Fund (NCF) but not allocating all of the revenues. By 2022, only $46 million had been disbursed, Bell argued, while $375 million had been collected. An additional $150 million was scheduled to be assessed in 2023. The eastern telecom proposed forgoing any more collections until the surplus is spent and capping future amounts at $75 million. An application to halt further contributions was denied by the CRTC on the grounds that the amount levied is so small that it could not cause irreparable harm. Bell disputes that. “While ‘irreparable harm’ is the standard by which stay applications are typically evaluated, in this proceeding, the issue is no longer one of ‘irreparable harm’--harm that cannot be compensated in the final decision by a retroactive ruling,” the filing stated. “The issue is proper public policy.” The company also criticized the length of time it takes to get projects approved. Citing the Auditor General of Canada, Bell stated it takes nearly two years to get funding allocated to projects. By comparison, the department of Innovation, Science and Economic Development’s (ISED) universal broadband fund (UBF) takes about a year to approve expenditures. Even that is too long, some stakeholders told the Auditor General. Bell, SSi Micro Ltd., and National Capital Freenet requested to appear at a public proceeding on the topic. Telus Corp, Rogers Communications Inc, Saskatchewan Telecommunications Holding Corp. and Quebecor Inc. do not want to appear before the commission in person. Telus backed its eastern incumbent counterpart in calling for a moratorium on the collection of contributions. There are a myriad of programs to roll out internet infrastructure, both provincial and federal, it noted, and the CRTC fund is only one of them. The British Columbia firm opposes allocating Broadband Fund money to operational costs, one of the proposals the commission made in its initial notice of consultation. Using fund money for those costs could impose burdens on telecom service providers (TSPs) and internet service providers (ISPs), as well as the CRTC itself, Telus argued. One of the goals of the broadband review is to reach out to Indigenous communities. Telus worried about the approach the commission is taking. “The Broadband Fund’s current administrative structures may not fit well with addressing the needs of Indigenous Peoples due to the uniqueness of each community,” it wrote. “Different communities have varied needs and desires, and the application process can be onerous.” Rogers called upon the CRTC to spend more on Indigenous projects. “We urge the commission to prioritize providing funds to underserved First Nations communities,” the Toronto firm said. “This will place subsidies where they are most needed and do the greatest good.” It opposes operational spending, except for satellite transport costs in regions dependent on satellite service. It urged the commission to consider not only low-Earth orbit (LEO) satellites but mid-Earth orbit (MEO) satellites as well in order to provide service to remote areas not otherwise accessible. It is also against raising the contribution level assessed on TSPs. It supports the commission’s proposal to fund mobile wireless projects. SaskTel opined that the Universal Service Objective should be updated before any changes are made to the Broadband Fund. It, too, cautioned against a one-size-fits all approach to amending the fund. “It would be a mistake to assume that all rural markets are the same: just as it would be a mistake to assume uniformity in First Nations and the North,” Canada’s only publicly-held telecom asserted. “The fact is that even within those categories, there is a wide divergence of geography in the unserved markets.” SaskTel supports operational funding and called on the commission to speed up the approval process. Quebecor said the lines of communication between the regulator and the regulated need to be widened. It pointed to its rollout of internet in Quebec and said the provincial government is better at expressing its needs and listening to TSPs. Cogeco Inc. came out against changing the objectives of the Broadband Fund but instead urged returning to the original principles of connecting underserved districts. It is opposed to funding operational expenses. The company pointed out that broadband connectivity has now reached 93.5 per cent by the end of 2022. “Thus, Cogeco submits that the Broadband Fund has mostly lost its purpose,” the company wrote. Bragg Communications Inc., parent company of Eastlink, also took the CRTC to task for the lack of timeliness in approving projects. It also cited Bell’s figures on the large amounts going into the fund and the smaller amounts being spent. It supports operational funding coming from the fund. It said it does not oppose adding mobile wireless to the plan as long as that does not increase the contribution levels. There is a lack of independence for adjudication of disputes over fund projects, Xplore Inc. offered in its filing. “For this reason, expansion of the Broadband Fund’s scope is misguided,” the company stated. “Expanding the scope of the Fund will also expand the scope of possible Part 1 Applications for which the commission will have real or perceived independence concerns.” It is also against operational funding and using money for LEOs. SSi called on the CRTC to increase competition in the telecom sector and give competitive players such as itself more opportunity. It supports furthering service to Indigenous communities but does not like the notion of a separate Indigenous stream of money. It noted that not a single project has been approved for Nunavut as of yet. “We welcome the advent of SpaceX’s direct-to-home Starlink service in Nunavut, as elsewhere in Canada, but we note that the initial consequence has been to exacerbate, not bridge the divide between relatively wealthier Nunavummiut signing up to Starlink and the more economically challenged residents in the territory,” the satellite company said. Another satellite provider, Viasat Inc., called for a voucher system whereby consumers may receive portable subsidies to use with the provider of their choice. It pointed out its current service can offer speeds of 150 Megabits per second (Mbps) in many areas. “Rather than picking winners and losers to receive benefits, and having the underserved consumer bear the risk of the government’s getting it wrong, any updated Broadband Fund policy should promote sustainable competition in rural areas and ensure multiple service providers will be available in the long term even without ongoing subsidies,” it stated. Access Communications Co-operative Ltd. is a community-owned not for profit operating in 235 communities in Saskatchewan. It opposes operational funding. It urged the CRTC to establish guidelines for project approval, as current timelines are too lengthy. Another non-profit, the National Capital Freenet in Ottawa, called for the removal of the standard of 50 Mbps download/10 Mbps upload for service. This will allow the benchmark to increase over time, it said. Freenet, which has not applied to the fund so far, said the current 25km hexagon analysis has bypassed underserved portions of Ottawa. “We also suggest that regardless of the measure used to define geographic eligibility, if an area does not meet the universal service objective and can demonstrate a financial need for funding, the proximity to other well-served areas is irrelevant,” the organization said. The Alberta Rural Connectivity Coalition came out in favour of operational funding, for a period of four years. It said service packages should be priced within the range of the national average of $58.14 as of last year. It also endorsed the idea of mobile wireless connectivity. A joint submission was filed by the British Columbia Broadband Association, the Canadian Association of Wireless Internet Service Providers, the Canadian Communications Systems Alliance, the Competitive Network Operators of Canada and the Independent Telecommunications Providers Association. They worried about inflation and cost overages. TSPs and ISPs are not permitted to go back to the CRTC for extra funding to make up the difference. This leads to problems of affordability when marketing their product. “In the current market, even in rural areas where they focus their operations, small service providers simply do not have market power,” the groups wrote. “They cannot exercise market power to any degree that would permit them to price their services without first comparing them to the prices offered by the largest ILECs and wireless carriers.” The organizations also warned about over-building, which it alleges is occurring now with different funding streams available. Terago Networks Inc. called for the adoption of 5G Fixed Wireless Access (FWA), a killer app that could increase download and upload speeds for the internet. Since Indigenous reconciliation is a dominant theme of the commission’s study, several native groups filed interventions. The First Nation of Nacho Nyak Dun in the Yukon stated that the structure and approach of the consultation is not consistent with the obligations of the country to consult with its original peoples. It endorsed the notion of a separate funding stream for Indigenous people but said more must be done. The Indigenous Connectivity Institute called on the commission to work through a variety of native organizations to further reconciliation. It endorsed the concept of operational funding. Eeyou Communications Network is a Cree-majority owned non profit operating in northern Quebec. It has deployed fibre to the home to more than 10,800 households. It is in favour of funding mobile coverage of highways and roads. It called for more resources to be deployed to Indigenous communities, citing telehealth as an example. ECN estimates that since it began operations it has saved the local health board $8 million by eliminating the need to send patients south. The First MIle Connectivity Consortium represents eight First Nations organizations in B.C, Manitoba, Ontario, Quebec and Atlantic Canada. It expressed concern that most of the money allocated so far from the fund has gone to the major players with little being handed out to Indigenous companies. Only one FMCC member has yet to get any funding, the group noted. It called for subsidies to be given directly to consumers, not the large telecoms. The government of British Columbia filed an intervention saying updates to the Broadband Fund are crucial. Although it is in favour of increasing access for First Nations communities, it does not advocate a separate stream of funding. The province noted it has allocated $500 million of its own money for high-speed rollout since 2017. The Public Interest Advocacy Centre endorsed the operational subsidy and mobile wireless projects. It filed a hefty intervention complete with two background studies. The Ontario Federation of Agriculture, a long time supporter of rural broadband, said that wages and salaries should be included in the operational costs of the TSPs. It also called for a greater role for non profits, co-ops and rural municipalities in offering internet access. The Agricultural Producers Association of Saskatchewan backed the proposal for operational costs as well. The small population ensures that TSPs and ISPs cannot sustain a business plan that would allow the rollout of internet in rural communities. APAS warned against a one-size-fits-all policy on eligibility. Regional variations should be taken into account, it stated. The Saskatchewan Wheat Development Commission and SaskCanola and SaskFlax backed up APAS in their briefs. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

CRTC urged to put a moratorium on broadband fund contributions

News | July 24, 2023

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CRTC urged to put a moratorium on broadband fund contributions

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