Funding rural broadband

A recent article in cited CCSA figures to claim “Large ISPs winning big from UBF”, suggesting that government broadband subsidy programs are skewed toward the biggest service providers in the country.

I have been following the stream of announcements and looked at the figures provided in the article and reach a different conclusion: smaller service providers appear to be getting more than double their share of rural funding program dollars.

According to the article, “Videotron, Cogeco, Bell, Telus and Rogers have been the major winners of UBF funding”, accounting for 70.8% of funds allocated so far. Keep in mind that Cogeco isn’t one of the 5 biggest telecommunications services providers in the country; Shaw is. According to the CRTC, “The five largest providers of telecommunications services (including affiliates) accounted for 87.3% of total revenues in 2019.”

Cogeco is a significant rural service provider and (according to CCSA figures) it has won 22% of the government funding. But it isn’t part of the CRTC’s “Big 5”. Dropping Cogeco from the list of major funding winners, we see that the service providers that provide 87% of Canadians services have won less than half of the funding.

In other words, service providers with just 12.7% of the revenues have been awarded 51.2% of the government funding.

That is four times their ‘fair share’. CCSA is quoted in the article saying “Weโ€™re concerned that this focus on the larger players is going to have a detrimental impact on the ability of consumers in rural areas to actually get the kind of service that they are used to getting, and that they want to get from their local provider”.

The figures don’t support a statement that there is a “focus on the larger players”. It appears to me that smaller service providers are doing well in winning government funding awards.

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