Closing Canada’s digital divide will take more than reaching 100% broadband coverage, says former CRTC head

In order to truly measure progress on closing the digital divide in Canada, tracking affordability of internet services should be one of the key factors, says former CRTC chair and CEO Ian Scott. The digital divide has been defined as the gap between those who have access to quality broadband services in Canada, and those who do not. The federal government, several years ago, set a target of connecting all households in Canada to high-speed 50/10 Mbps internet service by 2030 — 98 per cent of which are expected to be able to connect by 2026. But in an interview with The Wire Report, Scott points to observations he made in a research paper published this June with the Institute for Research on Public Policy, titled Conquering the Next Frontier in Bridging the Digital Divide. Scott argues that simply achieving broadband service availability throughout the country is not necessarily the best marker of success. While making sure everyone has quality high-speed broadband access in the first place is the rightful priority, there needs to be more consideration for what comes next, said Scott, who was leader of the CRTC from 2017 to early 2023. “If you're talking about promoting a digital economy and a digital society, everybody needs to be able to connect,” Scott told The Wire Report. “We’re tracking what percentage of the population has access, we're not really tracking what percentage of the population are subscribing, and in particular…why they're not subscribing. We don't have any statistical focus on that, and that's what we need to know,” Scott said. “We need to consider the magnitude of societal benefits associated with community access, and the ability of low-income households and northern and Indigenous communities to access high-speed internet,” his paper states. Among other related topics, Scott and fellow panellists discussed these concepts during a conversation on Canada’s digital divide Tuesday, held by the Institute for Research on Public Policy as part of a three-part lecture and publication series titled “Imagining a Better Digital Future for Canada” and sponsored by Telus Corp. Panellist Bill Murdoch, executive director of Clear Sky Connections, a not-for-profit which works to improve broadband connectivity for First Nation communities, highlighted how arduous applying for Canada’s numerous broadband connectivity funds can be, especially for smaller players looking to get a share of the cash. For one, there is the federal $3.225 billion Universal Broadband Fund administered by the department of Innovation, Science, and Economic Development Canada (ISED). Then there is the CRTC’s $675 million Broadband Fund, as well as a $2 billion Canada Infrastructure Bank fund for larger projects, the Connect-to-Innovate program, and a number of provincial-level initiatives. Those are sometimes supplemented by separate deals made by the federal government, such as a $2.14 billion loan for Telesat Corp., which is working toward the global launch of its Lightspeed Low Earth Orbit (LEO) broadband satellite network. Telesat’s plan is to sell access to internet service providers (ISPs) who would in turn make deals with their own customers. In some regions, Telsat might deal with residential customers directly, but most deals throughout the world will be made with businesses. Varying funds bring varied application requirements Murdoch said once construction begins, work on fibre builds, specifically, can average five kilometres of work per day, with a build build season as short as June to October or November in some locations because of climate. But getting to the point of construction can be cumbersome, he said. “It’s just getting to the point of cash in the bank, the contracts in place, permitting, environmental if it’s required, to just simply do the work, and then we run fibre.” “The technical challenges are not insurmountable, it’s more the money to do the initial build,” Murdoch said. Murdoch highlighted on Tuesday’s panel that there are 63 First Nation communities in Manitoba, 61 of which fall under federal jurisdiction. He said getting funding to connect them is “always back-and-forth” between the federal and provincial governments. In addition, “different funding pots require different applications,” he noted. Even though the end solution or project might be the same, applicants still have to take care to tailor their applications to each fund. Then there are typically additional reporting requirements for each fund. Murdoch highlighted an instance in which he said there was a one-month funding application window, but the fund wanted permitting done as part of the application process. But, Murdoch noted, permits can take six weeks in the north, meaning they would only be available two weeks after the application deadline. The panellists additionally discussed whether more coordination between funding programs would be helpful or a hindrance. Scott highlighted that there are “institutional barriers” to coordination within the government. The CRTC’s fund is overseen by that independent, quasi-judicial body that regulates the Canadian communications sector, while the program by ISED, which is a department of the government, would have its own criteria. While they might require common data, they’re not interwoven. “If you could create a common database of data filed by parties when they’re seeking applications, if you could make the requirements more common, it’d reduce the cost, increase the efficiency, and so on,” said Scott. But while one overarching broadband fund might be ideas at the end of the day, Scott classified it as an “interesting policy discussion.” “Do you want it in the hands of an arms-length regulator, or do you want it in the hands of a government department that’s responsible for government policy, telecom policy? I’m sure there are good arguments on both sides, but as long as you have multiple programs, you need better coordination, both with the federal government and with the provincial, territorial, and municipal governments,” Scott said. Measurements of connectivity progress In the research paper, Scott notes that a 2023 report from Canada’s auditor general found that neither the CRTC or ISED possess good enough indicators for measuring progress specifically on the quality and affordability of internet access. Scott says the report expresses concerns that both bodies’ approach to measuring affordability only considers the price of service without taking into account people’s income. “Price alone does not indicate whether a Canadian household can afford internet or mobile cellular service. What is affordable for a household with two people earning $80,000 per year may not be affordable for a household with six people earning $30,000 per year,” Scott’s paper states. However, his paper also notes that existing affordability programs are “insufficient and unco-ordinated,” which Scott credits to the fact there is no clear government lead at any level, “and therefore no real accountability or financial commitment. “While many observers might expect that the responsibility would fall to the federal government department responsible for telecommunications policy (ISED), it is equally a social welfare and education issue with mixed responsibility within the federal government and cross-jurisdictionally with provincial, territorial, and municipal governments,” the paper states. “The challenge of addressing affordability will not be met through existing measures such as the federal government’s Connecting Families initiative or other measures introduced voluntarily by service providers. Nor will the challenge of affordability for disadvantaged groups be met by providing the industry regulator, the CRTC, with additional policy guidance to focus on the issue,” it notes. “The CRTC already has affordability as part of its statutory mandate and will continue to use its authority as an economic regulator to address affordability.” Of the existing programs, the paper notes they rely too heavily on the “voluntary actions” of the private sector. ISED’s Connecting Families Initiative is voluntary, not national in scope, and has no specific elements to measure scope, the paper says. “Rather than developing programming to address affordability, the policy focus has been on consumer prices for telecom services more broadly, including policy measures to enhance price competition within the industry,” the paper states. “While overall reductions in rates would be helpful, they do not address the affordability issue for those most in need.” Scott’s paper suggests, crediting the 2023 auditor general report with the recommendation, that the federal government, should collect and analyze data including on household income to “measure progress against the affordability objective of its connectivity strategy.” Scott not surprised by CRTC’s wholesale decision When asked if the CRTC’s recent decision ordering BCE Inc.’s Bell Canada, Bell Aliant, and Bell MTS, along with Saskatchewan Telecommunications Holding Corp., and Telus to provide competitors wholesale access to their existing fibre networks was an outcome he expected to see in that proceeding, Scott told The Wire Report he was not surprised. “We’d been working on that problem for an extended period of time . That led to the framework of analysis. What they did? No, nothing surprises me in it. Canadians want lower internet rates,” Scott said. SaskTel is challenging the CRTC’s decision, requesting from the Federal Court of Appeal both a judicial review, alleging that the new policy is unreasonable; and leave to appeal, alleging it is based on an unlawful policy direction. Scott declined to comment further on the commission’s work following his departure as its leader, saying “ I’m not going to be an arm-chair quarterback.” “It’s not an easy job. I give chair Eatrides all the credit in the world for doing a really tough job.” As for plans for the future, Scott said he intends to continue writing and has been doing some consulting work. In January, he expects to begin teaching a course on business and government relations at McGill University, where he previously completed a one-year stint as the university’s Max Bell School of Public Policy McConnell Professor of Practice. “I’m not retired or retiring. I remain a keen student of regulation and public policy,” Scott said. - Reporting by Hannah Daley at hdaley@thewirereport.ca with files from The Wire Report staff

Closing Canada’s digital divide will take more than reaching 100% broadband coverage, says former CRTC head

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| September 27, 2024

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