And then there were 3

Two weeks ago, in “Peace, order and good government”, I wrote about what I would have liked to see in a party platform as we head into this pandemic election.

Earlier today, the Liberals finally released their “Forward. For Everyone” [pdf, 3.1MB] platform, at the midway point of this 5 week long election campaign. The Liberals and NDP released their platforms at the start of the process – and I discussed their platforms in my August 16 post.

Two years ago, the Liberal platform promised a 25% reduction in wireless prices over two years. That target was achieved, according to the Statistics Canada cellular component of the Consumer Price Index. Indeed, I argued back in early March of 2020 that the government could already “Declare victory. Consumers are winning”.

The 2021 Liberal platform does not contain much on the telecom policy front, beyond an affirmation of its commitment to drive further investment in rural broadband.

A re-elected Liberal government will:

  • Require those that have purchased the rights to build broadband actually do so. With this use it or lose it approach, Canada’s large national carriers will be required to accelerate the roll-out of wireless and high-speed internet in rural and northern Canada by progressively meeting broadband access milestones between now and 2025. If these milestones are not met, we will mandate the resale of spectrum rights and reallocate that capacity to smaller, regional providers.

A couple pages later, the platform says:

With an increased reliance on the internet to access services, work remotely and attend school, rural communities in Canada have been disproportionately affected by the digital divide. Just under 50% of rural communities have access to Broadband at 50/10 Mbps and the CRTC estimates that only 30% of First Nations households have access to internet. Ensuring that companies accelerate the roll-out of their broadband projects will contribute to the economic growth of those communities and the wellbeing of Canadians.

The platform appears to be a strong signal that a Trudeau government will stick with its fundamental telecom policy statement from a year ago: “Canada’s future depends on connectivity”, setting out clearly that it favours a policy environment that encourages investment in high-quality network facilities. “Incentives for ongoing investment, particularly to foster enhanced connectivity for those who are unserved or underserved, are a critical objective of the overall policies governing telecommunications, including these wholesale rates.”

As I have written before, it is easy to call for measures that lower prices. It is more responsible to set out a policy platform that understands the balance between competition, affordability, consumer interests, investment and innovation.

The Liberal platform seems to be pointing to maintaining balance.

The new national dream

As we approach the mid-point of the Canadian election campaign, we are still missing the clarity of a vision statement such as that set out a year ago by Innovation Minister Navdeep Bains: “Canada’s Future Depends on Connectivity.”

Clear. Concise. Over the past year, I have referred frequently to that statement.

At the time, I observed there can be regulatory and policy levers that don’t require direct subsidies to improve the business cases for the private sector to invest in rural expansion. Policies that improve the business case for network investment go a long way toward leveraging the financial capacity and technological capabilities of telecom carriers to achieve our national connectivity objectives.

Unfortunately, we haven’t heard a lot about that kind of vision in this election campaign.

Two weeks ago, I drew your attention to an OpEd entitled “It’s time we finally closed the digital gap”.

It served as a reminder that it was just over 20 years ago, in June 2001, that the report of the National Broadband Taskforce was released, “The New National Dream: Networking the Nation for Broadband Access” [pdf, 1.5 MB]. Just over 100 pages, the report was the result of consultations chaired by then president of University of Waterloo (and future Governor General), David Johnston with panel of 33 leading telecommunications stakeholders representing a wide range of interests.

Twenty years ago, the task force sought to have broadband deployed in just over 3 years “to and within all Canadian communities”.

They were optimists.

Twenty years later, we still don’t expect the job to be complete in 3 more years.

The experience of Canada’s broadband pioneers provided an essential reality check for the Task Force. It helped immeasurably to point us in the right direction, as we sought to develop priorities and models for broadband deployment.

In light of this experience and on the basis of our analysis of the broadband requirements of Canadian communities, we recommend that by 2004, broadband facilities and services should be deployed to and within all Canadian communities, according to the following priorities.

  • All Canadian communities should be linked to national broadband networks via high-capacity, scalable transport links capable of supporting an aggregate of 1.5 Mbps symmetrical service to each end user, as well as higher bandwidths to institutions.
  • Access to broadband in First Nation, Inuit, rural and remote communities (including Métis communities) should be available at a reasonably comparable price to that charged in more densely populated areas.
  • The local broadband access infrastructure should be extended to the community’s public facilities, including every public learning institution, public health care facility, public library and other designated public access point.
  • The local broadband access infrastructure should also be extended to local business and residential users, for example, by leveraging broadband infrastructure serving public facilities.

It appears that the scale of resources required were underestimated. For example, for “Transport to unserved communities”, estimates of total required investment ranged “from $1.3 billion at the lower end to $1.9 billion at the upper end.” Another $500-600M was estimated to be required to connect public institutions and up to $2B to connect businesses and residences.

Still, many of the fundamental principles seem worthwhile to continue to hold onto:

After examining a large number of alternative approaches, we came to the conclusion that government-funded broadband deployment models should achieve the following objectives:

  • ensure third-party open access;
  • ensure competitive and technological neutrality;
  • ensure sustainability and scalability;
  • ensure transparency in all aspects of government funding programs;
  • maximize the role and risk taking of the private sector;
  • leverage the financial capability of the private sector;
  • minimize deployment costs;
  • encourage public and private sector partnerships;
  • respond to community needs; and
  • build community capacity.

Twenty years later, we continue to need leadership who can articulate a coherent telecom policy agenda, promoting innovation, and fostering an environment encouraging investment in telecommunications infrastructure.

Now, that would be a new national dream.

How did we ever communicate before social media?

How did we ever communicate before social media?

Twitter went down this morning and I didn’t know what to do.

Direct messaging? I guess I can send an email.

Broadcast my thoughts? I guess I can write a blog post (like this one).

Thankfully, there is always the reliability of my telephone.

After all, the purveyors of duct cleaning know which technology is the most dependable.

Clarifying the CRTC’s service objective

There seems to be some confusion about what the CRTC meant when it updated its service objective to include broadband in 2016.

It is often a challenge to try to paraphrase a 55-page, 259 paragraph Decision and summarize it in an easy-to-understand soundbite.

The CRTC’s “Broadband Fund” webpage says: “Whether you’re at home, at work, or on the road, your phone should be able to connect using LTE, you should have an Internet connection with access to broadband speeds of at least 50 Mbps download and 10 Mbps upload and access to unlimited data.”

I wonder if it would have been more clear for the CRTC to say “you should have access to choose an Internet connection with broadband speeds of at least 50 Mbps download and 10 Mbps upload and access to unlimited data”?

Some [including the deeply flawed Ryerson University Local News Data Hub] point to that CRTC Broadband Fund web page as the source of their interpretation (misinterpretation) of the service objective.

They have apparently misread that summary to mean that the CRTC objective is for everyone to have a 50/10 broadband connection.

That clearly wasn’t the intent. How do we know? In its 2020 Communications Monitoring Report, the CRTC reported that “87% of households had access to Internet services with speeds of 50/10 Mbps with unlimited data and 96% of the population were covered by Long-Term Evolution Advanced (LTE-A) networks.” The 87% figure has been the headline number for how we are doing on the broadband scorecard.

On the other hand, CRTC data shows that just 46% of residential service subscriptions were for a 50/10/unlimited broadband connection. Nearly half of the households with access to a 50/10/unlimited chose a different service.

And if that isn’t sufficient evidence, the CRTC itself said (on a different page of its website), “That is why we set new targets for Internet speeds. We want all Canadian homes and businesses to have access to broadband Internet speeds of at least 50 Mbps for downloads and 10 Mbps for uploads.”

The absence of a clear understanding of our national broadband objective has led to at least two flawed reports from researchers at Ryerson University [ConnectTO and the Local News Data Hub] and it appears to be a contributing factor to communities adopting the flawed CIRA broadband test to measure the need for broadband investment in various communities.

Hopefully, university researchers and advocacy organizations will take a step back, review their studies and reports, and make the appropriate adjustments to their work.

The multi-dimensional consumer

Price isn’t the only factor driving many consumer purchasing decisions, and telecom services are no different.

We know that quality and coverage are important factors as well. People are willing to pay more for faster speeds, greater reliability, and a host of other factors [see “Competition brings out the best”]. That isn’t to say price isn’t important. All else being equal, who doesn’t want to save money?

The thing is, all else is rarely equal.

Whether shopping for shoes, groceries, cars, clothes, telecom services or whatever, quite frequently, all else isn’t equal. As consumers, often there are other factors at play.

We might deal with the same car dealer years after our last purchase, or stick with the same brand of car. We find stores that we like – for a variety of reasons – and continue to deal with them, even if the price isn’t always the lowest. Maybe we have found the store employees are friendlier; or, the grocery store’s produce is fresher; or, the meat seems better.

The lowest price isn’t always the deciding factor.

We often speak of the regulatory and policy tension in balancing quality, coverage and price for telecommunications services [see, for example “Value, affordability and investment”].

It has become popular to use the term “affordability” to refer to the service offerings of the wholesale-based service provider community. That is misleading and wrong. Doing so is hijacking the term “affordability”.

As I have discussed before, the households that truly need the greatest assistance with finding affordable telecom services have access to programs such as Connecting Families [newly improved with version 2.0, see “Is there a better approach to affordable telecom service?”], Rogers’ Connected for Success, or TELUS’ Internet for Good.

The marginally lower priced offerings from wholesale-based service providers simply don’t offer such affordable options for those most vulnerable Canadian households. Indeed, it is doubtful the reseller community could compete with these truly affordable services, even if the CRTC’s flawed 2019 wholesale internet rates decision is restored.

As I suggested recently, there may be a better approach to affordable telecom service.

It is disappointing to see a singular focus on price as the sole defining factor in determining the public interest.

The CRTC, and the federal cabinet, recognized the need to “appropriately balance the objectives of the wholesale services framework”, and acknowledged that the 2019 rates would “undermine investment in high-quality networks”.

The CRTC, and Cabinet recognized that quality, coverage and price work together as public interest considerations. Expanding service to unserved or underserved areas needs private sector investment.

These factors impacting consumers, and the tension between them, show the complex nature of the public interest.

Politicians need to consider the multi-dimensional considerations associated with consumer interests. Consumers have demonstrated that purchase decisions are more sophisticated than simply looking at price.

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