Toward a universal broadband strategy

Governments at all levels, federal, provincial, regional and municipal have thrown billions of dollars at the challenge of extending the reach of broadband networks, but is there an overall strategy?

At the recent Rural & Remote Broadband Conference, Execulink CEO Ian Stevens observed that there doesn’t seem to be a strategy to tie together the myriad of funding programs.

In October, I observed that the ‘myriad of funding programs at all levels of government’ all seem designed to help offset the initial capital costs but there aren’t programs that look at the higher ongoing operating costs associated with rural and remote telecommunications services. As I noted then, there was a comment in the report of the Broadcasting and Telecommunications Legislative Review Panel [pdf] noting that indigenous communities said they are “looking for a more inclusive consultation process in the development of any fund to support broadband buildout with more constant, stable, and accessible funding.”

Constant, stable and accessible funding. I have often said that governments tend to build things well, but tend to do a lousy job at maintaining that infrastructure. Look at our sewer systems, road repairs, municipal housing projects all stand in testament to this. The cynic in me would attribute this to the ribbon cutting photo op for new infrastructure, but little political goodwill generated by ongoing maintenance.

Yet there are clearly higher operating costs incurred by telecommunications service providers in low population density markets, including: spectrum fees amortized across a smaller user base; installation and repair technicians have extended non-productive ‘windshield-time’, driving between customer locations; equipment endures harsher environmental conditions, located in remote, difficult to access locations, with less than optimal power reliability.

To offset these higher costs, there used to be a fund operated by the CRTC designed to allocate funds to companies offering telephone service in rural and remote areas. That fund began to be eliminated 4 years ago when the CRTC established its own Broadband Fund. In the introductory notes to Telecom Regulatory Policy 2016-496, the CRTC wrote that it will establish a mechanism to fund continuing access to fixed and mobile wireless broadband Internet access services, and fixed and mobile wireless voice services.

The terminology “continuing access” is important, because it parallels Section 46.5(1) of the Telecom Act:

46.5 (1) The Commission may require any telecommunications service provider to contribute, subject to any conditions that the Commission may set, to a fund to support continuing access by Canadians to basic telecommunications services.

In establishing its Broadband Fund, the CRTC refers to this section of the Act for its authority, but I wonder if the framers of this section of the Act intended for a continuing rural subsidy program to be shifted to a selective capital funding competition.

Was the CRTC following the best approach when it decided to develop its own capital subsidy system in place of ‘continuing’ support for high cost serving areas?

As I wrote a few weeks ago, there is a long history of the government using the communications sector as an alternate tax and wealth redistribution system. In the case of the Broadband Fund, telecommunications service providers are funding capital projects that would otherwise wait for a government funded program.

There is no question that we need more capital funding for rural broadband projects. As I noted a month ago, CRTC Chair Ian Scott told the ISP Summit that the Commission’s last call for broadband funding (in November 2019) drew “600 applications with a combined ask of more than $1.5 billion,” far outstripping the capacity of the Broadband Fund.

But, that doesn’t mean the CRTC Broadband Fund needs to be bigger. Indeed, should the CRTC be in the capital funding business at all? As I asked in November, “Is CRTC’s broadband fund fundamentally flawed?” “When other agencies and departments at federal provincial and regional levels of government are already in the business of awarding grants, did we need the CRTC to create yet another broadband capital funding program?”

At the very least, shouldn’t an overall broadband strategy take a look at how we will ‘support continuing access’?

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