Mark Goldberg


www.mhgoldberg.com





The Canadian Telecom Summit

Fox Group Dispatch

An affordable broadband strategy

Earlier today, the CRTC rejected an appeal of Telecom Decision 2016-496 (“Modern telecommunications services – The path forward for Canada’s digital economy”) by the Association of Community Organizations for Reform Now Canada (ACORN) together with the National Pensioners Federation and the Public Interest Advocacy Centre (PIAC). The group had sought the creation of an “affordability funding mechanism for low-income telecommunications users” to be part of the modernization of Canada’s basic telecommunications service definition. In rejecting the group’s appeal, the CRTC reiterated what it had said in the original Decision:

… most ISPs generally recognized the issues experienced by certain vulnerable consumers in paying for their telecommunications services, but were of the view that these issues stem from broader socio-economic conditions and not exclusively from the pricing of telecommunications services. The Commission agrees with the ISPs and remains of the view that concerted efforts from a variety of stakeholders is essential to making progress in the area of affordability.

The CRTC cited statements from the original Decision, where the Commission identified “Affordability of broadband Internet access services” as one of the issues to be addressed in the decision. However, it determined:

A comprehensive solution to affordability issues will require a multi-faceted approach, including the participation of other stakeholders. In this regard, the record of this proceeding demonstrates that various stakeholders, including ISPs and community organizations, have begun to implement innovative solutions to meet the wide-ranging needs of lower-income consumers. The Commission is mindful that its regulatory frameworks should be sufficiently flexible to allow for such solutions and does not want to take regulatory action that would inadvertently hinder the development of further private and public sector initiatives.

In the CRTC’s submission to the Government’s Innovation Agenda (issued concurrently with Decision 2016-496), the CRTC wrote:

The CRTC considers that, in light of its necessity to participation in so many aspects of life, broadband access should be considered more holistically as part of the social safety net for vulnerable Canadians. The development of initiatives related to the affordability of broadband Internet access service for Canadians is of considerable concern and will require concerted efforts from a variety of stakeholders.

And with today’s Decision on the review application, the Commission has confirmed that it relying on the development of those initiatives in a multi-stakeholder environment.

On a number of occasions, FCC Chair Ajit Pai has said that closing the digital divide is his top policy priority. Earlier this week, the FCC held the fourth meeting of its Broadband Deployment Advisory Committee. In his opening remarks at the meeting, Chairman Pai said:

I’ve long said that every American who wants to participate in the digital economy should be able to do so. And the plain reality is that if you live in rural America, you are much less likely to have highspeed Internet access than if you live in a city. If you live in a low-income neighborhood, you are less likely to have high-speed Internet access than if you live in a wealthier area.

I remember the first time I noticed the correlation between broadband adoption and income. It was about 10 years ago and I was preparing a proposal for a training session that we used to deliver for regulators. We noticed that the rate of adoption of internet services was slowing and the asymptote was approaching the low 80% or so of households. I noticed that this was also the level of computer adoption in Canadian households. Digging into the numbers in Statistics Canada’s Survey of Household Spending, we were able to see the correlation between income and computer ownership and similarly, between income and internet adoption.

In our opening remarks at The 2008 Canadian Telecom Summit, we first called for an examination of the practice to subsidize rural broadband without regards to means while so many urban households were unable to afford service that so many of us considered affordable. Over the next few years, we continued to prod (some might say we nagged) industry leaders, Industry Ministers, Opposition critics, Members of Parliament, regulatory commissioners and who ever would listen. I remember sitting with an industry executive back in 2010 at one of those business club luncheons in a 5-star hotel ballroom and we started talking about the unconnected schoolkids among Canada’s economically disadvantaged households. I still have the follow-up email I sent him:

I am quite passionate about trying to figure out how we get computers and broadband into the most economically compromised members of society. I am not known for being left leaning, but like you, I am troubled that there are households with school aged children that lack computers, let alone broadband.

How do those kids stand a chance of competing with their classmates and breaking out of their circumstances?

I remember a frustrated email to another industry executive shortly after the US cable TV industry launched its low income broadband initiative as part of the Comcast/NBC approval process. I wrote, “Internet penetration in homes is virtually 100% of households with computers: these are skewed, as you would expect, by income. Our problem isn’t access to broadband; it is affordability of computers and connections. This is more of a problem in urban areas than rural.”

Since that time, in their home internet territories, TELUS [Internet for Good] and Rogers [Connected for Success] have created programs that provide computers, connectivity and digital literacy training in thousands of low income households.

To bridge the digital divide in the US, the FCC Chair has decided to pursue an approach that removes “outdated and unnecessary regulatory barriers” in order to incent the “massive investment to construct, expand, and improve wired and wireless networks.”

It is notable that in Canada so far, industry has been leading the development of programs to get connected computers into lower income households with school aged children, without funding from the government. I can appreciate the frustration of ACORN that Canada still does not have a national initiative. There are large areas of the country where broadband is available, but beyond the reach of families struggling to pay for basic sustenance. An affordability funding mechanism was not necessarily the best approach, but we are long overdue for the development of a national initiative for affordable broadband and a champion to lead it.

There is funding planned by the CRTC for rural and remote broadband to supplement government funding for similar programs. The Commission has acknowledged the multi-stakeholder approach to develop private and public sector initiatives to address affordability. Should Canada establish its own Broadband Deployment Advisory Committee to help guide a holistic approach to increase broadband adoption in urban and rural households?

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