Videotron filed a strong set of comments in response to Bell’s proposal to spend a remarkable $463M in deferral account funds to provide mobile-based broadband service to about 60,000 households.
Simply put, we consider Bell’s HSPA+ broadband expansion proposal a cynical abuse of the Commission’s process and an egregious anti-competitive assault on the wireless marketplace.
Videotron compares the per household cost of Bell’s proposal costs associated with other broadband subsidy projects. Videotron calculates that Bell’s proposal amounts to $7,590 per household; our quick math in a March 2 tweet was $7,276 per home, which we described as ‘staggering’. In contrast, Industry Canada’s recent rural broadband announcement used only $76.7M to extend broadband internet access to 169,000 households – just $454 per household – less than 1/16th the per household cost of Bell’s proposal.
It is important to realize that seventeen different providers, including Videotron, were awarded a portion of the Broadband Canada funds following an open, competitive process, adjudicated by a competent, independent governmental authority.
In contrast, no other service provider was given the opportunity to propose alternative, more cost-effective means to use Bell’s deferral account funds. Bell faced no competition and had no incentive to prepare a cost-effective approach. Rather, Bell’s sole goal appears to have been to find a way to claim the largest subsidy possible.
Videotron noted that Bell’s proposal was virtually identical to the total funds available in the deferral account, leaving nothing for refunds to the urban subscribers who funded the account.
To be blunt, the alleged cost of Bell’s broadband expansion proposal is preposterous. It does not pass even the most elementary “sanity” test. It should be rejected on this basis alone.
The Videotron filing sets the stage for fireworks to erupt on Tuesday June 8 at The Canadian Telecom Summit. Videotron’s President and CEO, Robert Depatie returns that morning to deliver a keynote address, followed by CRTC Chair Konrad von Finckenstein and the annual Regulatory Blockbuster. In the afternoon, we will look at digital strategies – an opportunity to explore the question of how much of a subsidy is reasonable for Canadians to provide to those living in higher cost serving areas. The 2010 Canadian Telecom Summit is less than 2 weeks away.
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