Time to stimulate demand

The wrap up of the deferral account last week should cause a re-think of supply side broadband programs.

The amount of money that was directed to be poured into serving so few homes should make us pause. In Bell territory, $300M of subscribers’ money is to be used to subsidize access for 60,000 homes.

Because of the long delays in the CRTC’s processes, many of the so-called unserved areas already have access from alternate service providers who entered the markets without subsidies.

So you and I are spending $5000 per household to install the capability to subscribe to Bell’s DSL service.

Maybe three quarters of the homes will sign up, so we are spending more than $6000 per new DSL subscriber with no financial means test to see if these homes needed a subsidy. In a patronizing urban-centric way of thinking, we seem to have been caught up with a view that rural and remote subscribers all need financial help.

That doesn’t make sense to me.

If broadband access is an essential part of our modern households, then can’t we consider the connectivity cost as part of the total cost of the home? How many people in Toronto or Vancouver or Calgary would gladly trade their total household cost with that of rural Canadians?

As I told the Edmonton Journal, we need to turn our attention to focus on stimulating broadband adoption. We should be concerned that there are still so many households in Canada that don’t have access to a computer in the home.

How many households with school age children have no computer? As a country, we are hovering around 80% of households owning computers, but well beyond that with wireline broadband access. With wireless access added into the mix, we are in the very high 90’s for broadband access and satellite-based broadband completes the job (and yes, I have tried satellite broadband – it works well, thank you).

According to Statistics Canada, nearly every household in the upper income category has a computer (97.0%) with virtually all of these households (96.7%) subscribing to broadband access. On the other hand, only half of the lowest income households have a computer, and one in five of these homes weren’t connected.

How many of these households have school-aged children?

We should be ensuring that public funds being spent on broadband stimulus have clear targets and measurable objectives. It seems to me that we are getting diminishing returns from programs that artifically tilt the economics of extending the reach of DSL.

How many more Canadians would benefit from a broadband program that targets putting a computer with broadband into every household with children?