The virtual edition of Canada’s premier industry event provides an opportunity for everyone to participate from anywhere, without the need to travel. So, you can drop in from the convenience of your home or office where ever in the world you might be. The platform will enable much of the interaction of an ‘in-person’ event – it’s the best we can do in these pandemic times.
There are a number of great sessions over the span of 3 days, including an addresses by Industry, Science and Economic Development Minister Navdeep Bains and CRTC Chair Ian Scott. And you won’t want to miss the ever popular Regulatory Blockbuster, featuring regulatory leaders from Bell, Rogers, TELUS, Cogeco, Iristel and CNOC. Some of the other sessions will help you learn more about 5G, Cyber Security and Privacy, what is being done about unwanted calls
I hope you will take advantage of the opportunity to participate in The 2020 Canadian Telecom Summit next week.
I have a special discount code available. To qualify, just send me an email, give me a call or send a comment to this post (it won’t show up for anyone else).
On June 8, Rural Economic Development Minister Maryam Monsef told the Rural and Remote Broadband Conference that a call for applications for Canada’s Universal Broadband Fund would be issued “in the coming days.”
increased the funding available through the Universal Broadband Fund from $1 billion, announced in Budget 2019, to $1.75 billion.
accelerating the target for broadband access to 98% by 2026 (from 95%)
a Rapid Response Stream for the Universal Broadband Fund, making up to $150 million available for projects that will be completed quickly (provide service by November 15, 2021)
$50 million dedicated to improving mobile Internet availability in areas of benefit to Indigenous communities
up to $600 million to secure capacity on Telesat’s LEO satellite constellation (a project announced more than a year ago)
Is enough funding being allocated to the Rapid Response Stream? Last week, CRTC Chair Ian Scott told the ISP Summit that the CRTC’s last call for broadband funding (in November 2019) drew “600 applications with a combined ask of more than $1.5 billion.” That is far in excess of the CRTC’s funding. A year later, we might assume that many of these projects are ready to go, awaiting funding.
There is a story of a shopper going into butcher shop to ask about getting a prime rib roast. The butcher responds that it is $20 per kilo. The shopper responds saying that the butcher down the block only charges $15 per kilo for prime rib. The butcher replies, “so why don’t you buy it from them?” The customer says that the other shop doesn’t have any prime rib, to which the butcher answers “well, when I am sold out, I only charge $10.”
In the past week, Rewheel released another misleading and problematic report [pdf] that confuses international pricing variations with the level of competitiveness in various countries. Rewheel has been criticized in the past, with NERA saying that “policy makers and regulators should ignore” its international pricing study.
There are all sorts of methodological problems with Rewheel’s latest report, “4G&5G connectivity competitiveness 2020”, such as arbitrary selections of plans, arbitrary weighting assignments, and artificially assigning prices to service providers that don’t have offerings that line up with Rewheel’s buckets. But among the most egregious problems is the failure to consider quality in examining measures of competitiveness.
Using Rewheel’s artificial scorecard, the consultancy concluded that “Telus, Bell and Rogers Canada had the least competitive monthly prices”. But, what was Rewheel actually looking at? A careful examination of the chart shows that Rewheel has combined smartphone plans with mobile data plans and apparently, has also added fixed wireless data plans into the mix. It is no wonder the International Center for Law and Economics referred to a previous Rewheel study as a “careless mish-mash of data points from which no reliable conclusions can be drawn.”
Indeed, the Rewheel report itself showcases some of the flaws in its own methodology with two of its specific comparisons:
MIN monthly price for 1 gigabyte: 4G&5G smartphone plans with at least 100 mins, 1 gigabyte and 1Mbit/s peak speed
Jio India was the operator in 2H2020 with the lowest monthly price for a 4G or 5G smartphone plan that included at least 100 mins, 1 gigabyte and 1 Mbit/s peak speed.
Telus Canada was the operator in 2H2020 with the highest monthly price (~16x higher than Jio’s).
MIN monthly price for 100 gigabytes: 4G&5G mobile broadband plans with at least 100 gigabytes and 50Mbit/s peak speed
Jio India was the operator in 2H2020 with the lowest monthly price for a 4G or 5G mobile broadband plan that included at least 100 gigabytes and 50 Mbit/s peak speed.
Rogers Canada was the operator in 2H2020 with the highest monthly price (~17x higher than Jio’s).
While Rewheel may have been seeking to shore up its assertion that Canada’s prices are the least competitive, these direct comparisons highlight the flaws in the research methodology.
In the first comparison, Rewheel examines prices for a 1 Mbps 4G/5G plan. Such low speed data plans aren’t sold in Canada. So Rewheel is comparing the prices offered by TELUS, one of the world’s fastest networks (87.3 Mbps) with the price of service on a network that offers barely a tenth of the speed (9.7 Mbps).
In the second case, we are supposed to be comparing 50 Mbps services, but Jio doesn’t achieve such speeds. In its notes, Rewheel claims “Countries were [sic] operators did not sell a plan that met all the criteria listed above for a given metric (e.g. 5G smartphone plan with 1000mins, UNLIMITED data and 500Mbps) were assigned the highest monthly price among all 48 countries for that given metric.”
How can Jio be ranked as the lowest price provider when it offers a service that doesn’t come close to the 50 Mbps metric? Rewheel is comparing the price of prime rib with the price of ground meat, another careless mish-mash.
You just cannot compare prices without consideration of the quality of the products or services. And you cannot draw conclusions on level of competitiveness in a market based solely on prices.
As Dr. Christian Dippon of NERA has said in the past “Quite simply, a market cannot both be noncompetitive and offer some of the best mobile wireless services in the world.”
When the CRTC issued its landmark 2016 broadband decision, “Modern telecommunications services – The path forward for Canada’s digital economy” [TRP 2016-496], I observed at the time that there was “a high likelihood that the basic service objective will not be much more than a score card bound to disappoint.”
At the time, the CRTC set an ambitious broadband objective relative to its peers in other countries: that within 10-15 years, all Canadians should have access to subscribe to an unlimited broadband service with speeds of 50 Mbps down and 10 Mbps up, as well as access to the latest generally deployed mobile technology in our homes, our businesses and major transportation roads. Since the ten to fifteen year target was issued at the end of 2016, the government objective has set 2030 as the target for universal access. To help achieve that objective, the CRTC decided that it would also get into the funding game, with its Broadband Fund joining a myriad of other government agencies at all levels who pick winners and losers in handing out ceremonial cheques to provide a one-time funding stimulus.
Many people didn’t give much thought to what the CRTC termed a consequence of that decision, “As a result, the Commission will begin to phase out the subsidy that supports local telephone service”. In other words, the Commission swapped out a program for ongoing support for all high cost serving areas, in favour of awarding one-time payments to specific winning projects.
As I wrote last week, the current environment may be creating an ‘expense gap’ for rural telecommunications service providers. Capital stimulus programs, whether by the CRTC or any other government agency, provide a one-time incentive payment to offset the higher costs of building networks in rural and remote areas. The forecasted business cases used in funding applications have a finite time horizon.
There remains a much higher ongoing cost to operate and maintain rural and remote networks. What happens at the end of that application funding period?
Will service providers be able to sustain service at affordable prices at the end of the funded business plan?
There is always a great photo-op and media coverage when a big capital funding cheque is awarded. A short while later, there might be a second press release when service is actually launched and a ceremonial ribbon gets cut.
The problem is that the need for ongoing support tends to be ignored (present company excepted, of course). But these support payments can be critical to maintaining affordable service in certain areas, as well as enabling ongoing upgrades. As I observed last week, a report from the FCC (“Improving the Nation’s Digital Infrastructure” [pdf]) recognized the need for $2B in annual support to accompany $40B in one time subsidies in the US context.
Did the CRTC err in phasing out its ongoing subsidy of local services in rural and remote markets? Was there a way to add broadband to the contribution eligible services to provide ongoing funding of service providers operating in high cost serving areas?
When other agencies and departments at federal provincial and regional levels of government are already in the business of awarding grants, did we need the CRTC to create yet another broadband capital funding program?
The CRTC acknowledges it “may conduct future consultation processes to review the eligibility and assessment criteria for the fund as needed.”
Perhaps such a review should consider whether the CRTC should exit the game of choosing winners and losers in favour of providing the more mundane, but necessary, perpetual and universal support for high cost serving areas.
The Pew Research Center is a jewel in the crown of social research, acting as a non-partisan “fact tank” without taking policy positions on issues. Through the years, it has produced valuable research on the internet and technology that I have highlighted more than a dozen times through the years, often adding that it is unfortunate no such institution exists in Canada.
In May, I referred to a dataset released by Pew that looked at perspectives on the internet based on research gathered in April, during the first month of the pandemic.
A couple weeks ago, IIC held a webinar looking at “American life in the midst of crisis”, featuring a discussion led by Lee Rainie, Pew’s Director of Internet and Technology.
I have embedded the 90 minute webinar here. Around the 26:40 mark, we are provided with some particularly interesting insights from data on Internet Use and Attitudes During the Crisis.
Among the findings highlighted from the April data was a chart showing that 53% of Americans considered the internet to be essential, with another 34% saying it was “important, but not essential”. Ten percent said it was not too important and the remaining 3% said it was not important at all. Looking at these responses by demographic groups, we can see the influence of age, education, income and urban versus rural respondents.
Again looking at the April dataset, there were also charts that I found interesting on US attitudes on the role of government in ensuring all Americans have a home high-speed internet connection and cellphone during the coronavirus outbreak. Roughly two thirds of Americans felt that government did not have this responsibility.
Nearly 60% of lower income Americans surveyed in April said that their children would encounter at least one of the following problems in participating in online classes: having to use a cellphone for connectivity; having to use public Wifi (because there was no home internet connection); or, not having access to a home computer. Interestingly, 80% of Americans said that schools should provide computers to students during the pandemic: 37% said to all students; 43% responded only for students from families that could not afford it.
Contrasting the opinions on the role of government on broadband access versus the supply of computers, the analysis suggested that when kids were involved, more Americans felt government intervention was warranted.
In the discussion section of the webinar, we are told “it’s relatively easy to say in the abstract that broadband ought to be a human right, and that governments have a responsibility to provide it particularly in school contexts”, but “compared with the other things we want government to do, is this a high priority or not? For some people it really is, but for significant numbers of people, there are other ‘stressors’ in their lives or other public policy preferences that they have, that make them think that broadband is not necessarily a top-of-mind top priority.”
As Mr. Rainie says, it will be really interesting to see whether people’s priorities have shifted when Pew conducts its next survey on these issues.
As you playback the webinar, be sure to listen to the discussion for the ‘colour commentary’ that follows the initial presentation of the data. There have been shifts in attitudes over time, lending support to my perspective that we need to turn our minds toward examining digital literacy and demand side factors for adoption of broadband.
Looking at the treasure trove of information being gathered by Pew, once again I am reminded that we need more data to inform our policy making in Canada.
