Defining ‘basic’ communications

In his opening remarks at the CRTC hearings in Timmins yesterday, CRTC Chair Konrad von Finckenstein described the current regime for basic services:

1. We required telephone companies to serve their existing customers as well as new customers requesting telephone service. This is known as the obligation to serve.
2. We developed a basic service objective, which is a minimum target for residential service that includes:
   • local service on an individual telephone line
   • access to low-speed Internet at local rate (i.e. dial-up Internet service)
   • operator and directory assistance services
   • access to the long-distance network
   • enhanced calling features, and
   • a copy of the current local telephone directory. 
3. We developed a regulatory regime whereby companies that provide local telephone service to residential customers in rural and remote areas receive a subsidy.

The current proceeding is looking at whether there are changes in order to this regime. In the opening volley, it was suggested that maybe rural rates should rise to more closely match costs. If higher rates for phone service in urban centres are affordable, why would these same prices be unaffordable in lower density areas?

Yes, that would lead to unhappy rural ratepayers who have been the beneficiaries of wealth transfer from urban markets for the past century. The current system skims pennies from a lot of us each month in order to reduce the prices for relatively fewer folks in rural areas. Those pennies add up to a material amount when distributed to folks who are eligible for the subsidy.

Is geography, without any regard for ability to pay, still the most appropriate criteria for being the beneficiary of such largesse?

Should the definition be expanded to include broadband? If so, what should be the standard?

The Chair posed an interesting question to the panels: what if the CRTC set a target for Canadian service providers? What would that look like?

As this gets prepared to be posted, word is coming out that the future is not clear for Australia’s ambitious $43B National Broadband Network vision. As I suggested yesterday, will more governments stop interfering with the supply of broadband and focus more on stimulating demand?