Last week’s CRTC award of more than a quarter billion dollars for an arctic fibre optic route included an especially relevant dissent. Long time readers know that I love reading dissenting views in CRTC decisions.
Telecom Decision CRTC 2024-149 provided a remarkably precise $271,937,242 for the Government of Nunavut’s transport fibre project in Nunavut. The CRTC decision is worth examining for a number of reasons.
To start with, have any of us ever seen a government estimate a project to 9 significant digits of accuracy?
Second, the Broadband Fund is funded by the telecom industry, through a tax administered by the CRTC. So, in a reversal of most broadband projects where a government body subsidizes a private sector initiative to invest in broadband infrastructure, here we have the private sector subsidizing a territorial government. The funding amount is substantial. It represents nearly 2 full years of collection for the Broadband Fund ($150 million per year).
In Decision 2018-377, the CRTC said “the Commission determines that to be eligible for funding, applicants must demonstrate that… they, or at least one member of the applicant partnership, joint venture, or consortium, have experience deploying and operating broadband infrastructure in Canada for a minimum of three years, or they have entered into a contractual arrangement with an entity… that has experience deploying and operating broadband infrastructure in Canada for a minimum of three years.”
That experience requirement is also set out in the Application Guide for the funding call.
In awarding the money to the Government of Nunavut, the CRTC waved its hands over the eligibility of the “applicant” to receive funding from the Broadband Fund.
- With respect to applicant type, applicants must demonstrate that they meet the requirements set out in the Application Guide regarding their acceptable legal structure, experience, and financial solvency. Paragraph 6.1.1(c) of the Application Guide sets out that as a territorial government, the GN is exempt from the financial solvency criteria. The Commission considers that the GN has demonstrated that it meets the other requirements. (emphasis added)
Hold on here.
More than a quarter billion dollars is going to a government with just a 14-word sentence confirming it meets the other 4 points of the criteria set out in the Application Guide? Trust us.
Let’s look at some of those criteria.
An applicant must demonstrate that it, or at least one member organization of the applicant partnership, joint venture, or consortium, has experience deploying and operating broadband infrastructure in Canada for a minimum of three years, or that it has entered into a contractual arrangement with an entity as described in 6.1.1(a) above that has a minimum of three years’ experience in deploying and operating broadband infrastructure in Canada.
Note that experience in deploying and operating broadband infrastructure should be related to the project type. For example, the CRTC will assess applicants for mobile projects based on their experience with deploying and operating mobile broadband infrastructure in Canada.
If the Government of Nunavut has the requisite “Broadband infrastructure experience”, shouldn’t the CRTC have taken an extra few words to state that relevant experience?
What about the requirement for applicants to set out the “Defined roles and responsibilities”? The Application Guide says “For example, applicants must identify which entity will retain ownership of the network assets, which entity will be responsible for building the network, and which entity will be responsible for the network’s operation.”
Perhaps there were more details about these criteria in the application. It isn’t obvious to me that the Government of Nunavut has 3 years of experience operating broadband infrastructure. The CRTC decision doesn’t disclose “which entity will retain ownership of the network assets, which entity will be responsible for building the network, and which entity will be responsible for the network’s operation.”
I think that when this level of funding – two years of Broadband Fund contributions – gets handed out, the CRTC should have more than a simple pro-forma statement that asks the public to trust that over a quarter billion dollars is going to an experienced builder and operator of broadband networks.
So, I was pleased to see an especially relevant dissent by Claire Anderson, Commissioner, British Columbia and Yukon, attached to the Decision. Although she does not represent Nunavut, as the first Indigenous woman appointed to the CRTC, with a decade of experience working with Indigenous communities on a wide range of matters to advance reconciliation, her opinion might carry a little extra weight on this decision. After all, in its Summary, the CRTC said this funding contributes “to the Commission’s commitment to advancing reconciliation with Indigenous peoples in Canada”.
In the Dissent, Commissioner Anderson says that there was a duty to consult in advance with NTI, Nunavut Tunngavik Incorporated, “the Designated Inuit Organization responsible for ensuring that the rights and responsibilities set out in the Nunavut Agreement are respected.” The CRTC Decision made the funding conditional on the Government of Nunavut providing evidence of NTI’s support. Did the Commission put the cart before the horse (as Raj Shoan summarized in a series of tweets)? “The CRTC approved the govt’s request for $300 million subject to future evidence that the community in question supported it.”
What was the rush?
It looks like the Commission skipped some steps in ensuring the Applicant is in conformance with the rules, and certainly in consulting with NTI.
Why did the CRTC feel a need to push the cash out the door? Was it tied to the CRTC rejecting an application by Bell Canada to pause contributions to the Broadband Fund? Bell had observed that “the Commission has collected significantly more than the amounts it has awarded through the Broadband Fund and will not be able to distribute the total amounts already collected”.
Four years ago, I asked if the CRTC’s Broadband Fund was fundamentally flawed.
Last week’s decision should raise plenty of questions. It does nothing to assuage my concerns.