The obligation to serve and more

Yesterday, the CRTC issued an important policy decision, Telecom Regulatory Policy CRTC 2011-291 Obligation to serve and other matters (press release).

The decision is the culmination of a 16 month process that included oral hearings last fall (see blog posts on the hearings here, here, and here).

As I wrote last fall in a post called It ain’t about plumbing:

Improving broadband adoption doesn’t need government intervention in the plumbing end of the business. Service providers are investing plenty of money to make sure the pipes are in place.

What we need is help in getting more people to drink from the broadband faucet.

The CRTC agreed on that point:

Virtually all Canadians, regardless of whether they live in urban centres or in rural and remote areas, benefit from having access to Internet services using a variety of technologies, including wireless and satellite technologies. The rollout of broadband Internet access has been successful through a combination of market forces, targeted funding, and public-private partnerships at all levels of government.

The Commission considers that the deployment of broadband Internet access services, including deployment in rural and remote areas, should continue to rely on market forces and targeted government funding, an approach which encourages private and public partnerships. Accordingly, the Commission concludes that it would not be appropriate at this time to establish a funding mechanism to subsidize the deployment of broadband Internet access services.

However, the CRTC has established targets for broadband speeds of 5 Mbps downstream and 1 Mbps upstream to be available to all Canadians through various technologies by the end of 2015. I noticed some ridiculing of the CRTC’s objective by people who seem to have missed a key element of the target: that these speeds will be available to all Canadians. Every Canadian, no matter where they live, no matter how remote, by 2015. That is a target that is both meaningful and achievable.

The Public Interest Advocacy Centre issued a press release saying it “deplored the lack of vision” at the CRTC for refusing to create a fund for rural broadband access and for allowing rural phone rates to rise to $30 per month. I find it interesting that PIAC seems to equate rural with poverty, seemingly finding it preferable to have a tax on all urban subscribers to subsidize rural services. In PIAC’s model, urban subscribers, regardless of ability to pay, subsidize rural users, regardless of their need for a subsidy. Is that really in the overall public interest?

In a competitive environment, cross-subsidies tend to create opportunities for artificial regulatory arbitrage. If subsidies are needed for affordability, should that be administered by the CRTC or by social services?

PIAC will be participating at The 2011 Canadian Telecom Summit, on our annual regulatory blockbuster taking place 4 weeks from today. We’ll be exploring this decision and much, much more.